UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 2009
Delta Apparel, Inc.
(Exact Name of Registrant as Specified in Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
| |
|
|
| 1-15583
|
|
58-2508794 |
|
|
|
|
| (Commission File Number)
|
|
(IRS Employer Identification No.) |
| |
|
|
| 322 S. Main Street, Greenville, South Carolina
|
|
29601 |
|
|
|
|
| (Address of Principal Executive Offices)
|
|
(Zip Code) |
(864) 232-5200
(Registrant’s
telephone number,
including area code)
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On December 31, 2009, Delta Apparel, Inc. (the “Company”) entered into Employment and
Non-Solicitation Agreements (the “Agreements”) with each of the following Named Executive Officers
(each an “NEO”): Deborah H. Merrill, Vice President, Chief Financial Officer and Treasurer of the
Company; William T. McGhee, President of Delta Activewear; Kenneth D. Spires, President of M.J.
Soffe, LLC; and Martha M. Watson, President of Junkfood Clothing Company and Vice President and
Secretary of the Company. The Agreements replace and supersede any prior employment agreements
between the Company and the NEOs. The Agreements are identical to one another except for the
employees’ job titles and base salaries.
Unless earlier terminated in accordance with its terms, each Agreement will continue until
December 31, 2012. The Agreements provide that each NEO will receive an annual base salary of not
less than the base salary as follows: Deborah H. Merrill, $253,000; William T. McGhee, $221,500;
Kenneth D. Spires, $310,000; and Martha M. Watson, $250,000. The base salary will be reviewed
annually and is subject to upward adjustment at the discretion of the President and Chief Executive
Officer of the Company, subject to approval by the Compensation Committee of the Company’s Board of
Directors.
Each Agreement provides that the NEO is entitled to participate in the Company’s Short-Term
Incentive Compensation Plan, to receive such executive fringe benefits as are provided to
executives in comparable positions at the Company, and to receive such other benefits as are
customarily available to executives of the Company, including, without limitation, vacations and
life, medical and disability insurance.
If the NEO dies during the term of the Agreement, the Company will continue to pay the base
salary in effect at the time of death to the NEO’s estate for six months. If the NEO becomes
disabled (as defined in the Agreement) during the term, and the Company terminates the NEO’s
employment, the NEO will continue to receive base salary and benefits for a period of six months
from the date of termination of employment.
The Company may terminate the NEO’s employment with or without cause upon written notice, and
the NEO may terminate employment with the Company upon 60 days’ prior written notice. If the
Company terminates the NEO’s employment without Cause (as defined in the Agreement) or the NEO
terminates employment as a result of an uncured material breach of the Agreement by the Company,
and in each case no Change of Control (as defined in the Agreement) has occurred, then the NEO is
entitled to receive base salary and incentive compensation ranging from 3 months base salary and
25% of the Short-Term Incentive Compensation for the most recent full fiscal year if the NEO was
employed for less than one year up to 12 months base salary and 100% of the Short-Term Incentive
Compensation for the most recent full fiscal year if the NEO was employed for three or more years.
To the extent permitted under Internal Revenue Code (“IRC”) Section 409A, the sum of applicable
base salary and incentive compensation shall be divided into equal monthly payments and paid to the
NEO over the applicable payout period, depending on the NEO’s years of service at the time of
termination. To the extent permitted under IRC Section 409A, the Company will also provide the NEO
with group life and disability coverage during the applicable payout period and make the NEO’s
COBRA payments for medical insurance during the applicable payout period. Each Agreement
conditions the receipt of these amounts and benefits upon the NEO’s execution of a release meeting
specified criteria.
If within one year after a Change of Control (as defined in the Agreement), the NEO terminates
employment for Good Reason (as defined in the Agreement) or the Company terminates the NEO’s
employment for any reason other than Cause (as defined in the Agreement), death or disability, then
the NEO is entitled to receive in a lump sum an amount equal to one times the NEO’s base salary as
of the date of termination and an amount equal to the Short-Term Incentive Compensation received by
the NEO for the most recent fiscal year prior to termination. The Company will also provide
out-placement assistance and continue coverage under the Company’s various welfare and benefit
plans in effect at the time of termination for 12 months. These termination payments are subject
to reduction to avoid constituting an “excess parachute payment” under IRC Section 280G.
During the term of the Agreement and in certain circumstances, for a period of 4 months after
termination of the NEO’s employment, the NEO is subject to non-competition restrictions. During
the term of the Agreement and for a period of two years after expiration of the Agreement or
termination of the NEO’s employment, the NEO is subject to non-solicitation restrictions. The
Agreement restricts the NEO from disparaging the Company and from disclosing the Company’s
confidential information and trade secrets.
The Employment and Non-Solicitation Agreements are attached as exhibits to this Form 8-K and
are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| |
10.1 |
|
Employment and Non-Solicitation Agreement dated as of December 31, 2009 between Delta
Apparel, Inc. and Deborah H. Merrill |
| |
| |
10.2 |
|
Employment and Non-Solicitation Agreement dated as of December 31, 2009 between Delta
Apparel, Inc. and William T. McGhee |
| |
| |
10.3 |
|
Employment and Non-Solicitation Agreement dated as of December 31, 2009 between Delta
Apparel, Inc. and Kenneth D. Spires |
| |
| |
10.4 |
|
Employment and Non-Solicitation Agreement dated as of December 31, 2009 between Delta
Apparel, Inc. and Martha M. Watson |