<PAGE>   1
                                                                    EXHIBIT 10.2


                              EMPLOYMENT AGREEMENT

                  This Agreement, dated as of July 7, 2000, is by and between
CMI INDUSTRIES, INC., a Delaware corporation (the "Company"), and JAMES A.
OVENDEN (the "Executive").

                              BACKGROUND STATEMENT

                  Executive is the Executive Vice President and Chief Financial
Officer of the Company. The parties hereto are parties to an employment
agreement dated January 1, 1996 between the Company and Executive, as amended
by Amendment No. 1 dated September, 1997 and by Amendment No. 2 dated March 14,
2000 (collectively, the "Existing Agreement"). The parties desire to enter into
this agreement to extend, modify and restate the Existing Agreement and to
provide for the continued employment of Executive by the Company.

                                    AGREEMENT

                  In consideration of the mutual promises set forth below and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto hereby agree as follows:

         1.       Restatement. This Agreement supersedes the Existing Agreement
in its entirety, which is hereby terminated, effective as of July 7, 2000 (the
"Effective Date"), and as of the Effective Date neither of the parties shall
have any further rights or obligations thereunder. From and after the Effective
Date, the terms and conditions of the Executive's employment shall be governed
by this Agreement.

         2.       Employment and Duties.

                  (a)      General. The Company hereby employs Executive as
         Executive Vice President and Chief Financial Officer of the Company and
         Executive hereby accepts such employment, upon the terms and conditions
         herein set forth. In such capacity, Executive shall perform all duties
         and services inherent or incident to the position, such duties as may
         be delineated by the Company's Bylaws, and such other duties
         commensurate with Executive's titles and position as may be assigned to
         Executive from time to time by the Board of Directors of the Company.
         If elected or appointed, Executive shall also serve as a director or
         officer of any of the Company's subsidiaries or affiliated companies
         and, if elected, will serve as a member of the Board of Directors or
         committees of the Board of Directors of the Company, without further
         compensation.

                  (b)      Exclusive Services. Throughout the Period (as defined
         in paragraph 3 below), except as may from time to time be otherwise
         agreed in writing by the Company or unless prevented by ill health,
         Executive shall devote his full-time working hours to his duties
         hereunder, shall exclusively and faithfully serve the Company, shall in
         all respects conform to and comply with the lawful and reasonable
         directions and instructions given


<PAGE>   2

         to him by the Board of Directors of the Company, and shall use his best
         efforts to promote and serve the interests of the Company.

                  (c)      No Other Employment. Throughout the Period, Executive
         shall not render services, directly or indirectly, to any other person
         or organization for which he receives compensation without the consent
         of the Board of Directors of the Company or otherwise engage in
         activities that would interfere significantly with the faithful or
         competent performance of his duties hereunder.

         3.       Term of Employment. The term of Executive's employment under
the terms of this Agreement shall be for an initial period of three (3) years,
commencing on the Effective Date and extending through and including the third
anniversary of the Effective Date (the "Initial Period"), provided, however,
that the term of employment hereunder, if not sooner terminated, shall continue
after the third anniversary of the Effective Date for additional one-year
periods unless at least ninety (90) days prior to the expiration of the then
current term, either the Company or Executive delivers written notice to the
other of its or his desire not to extend the term of Executive's employment
hereunder (the Initial Period, including the extension thereof, if any, is
herein referred to as the "Period," provided, however, that the Period shall
terminate when Executive's employment hereunder terminates).

         4.       Compensation and Other Benefits. Subject to the provisions of
this Agreement, the Company shall pay and provide the following compensation and
other benefits to Executive during the Period as compensation for services
rendered hereunder. The Company shall be entitled to deduct or withhold all
taxes and charges that the Company may be required to deduct or withhold from
Executive's compensation and benefits.

                  (a)      Base Salary. The Company shall pay to Executive an
         annual base salary (the "Base Salary") at the rate of $281,000 per
         annum, payable monthly in arrears on the Company's regularly scheduled
         payroll dates. The Base Salary will be reviewed not less than annually
         by the Compensation Committee of the Board of Directors of the Company
         and may be increased, but not decreased.

                  (b)      Incentive Compensation. Executive shall be entitled
         to participate in the Company's incentive compensation plan, and in any
         revised or substituted plan or other compensation program implemented
         by the Company in lieu of the incentive compensation plan currently in
         effect.

                  (c)      Employee Benefit Plans. Subject to applicable
         eligibility requirements, Executive shall be provided throughout the
         Period the opportunity to participate in those pension and welfare
         plans, programs and arrangements generally made available to executives
         of the Company (including any incentive compensation plan, the
         "Plans"). The Company shall have the right to modify or terminate any
         Plans or to substitute new Plans.

                  (d) Vacation and Holiday Pay. Responsibilities permitting,
         Executive shall be entitled to three (3) weeks paid vacation per year,
         plus paid holidays in accordance with


                                      -2-
<PAGE>   3

         the Company's policy. Executive may carry forward and use in the
         following year any unused vacation time; provided that vacation time
         may not be carried forward more than one year and Executive will not be
         entitled to any payment for unused time.

                  (e)      Special Incentive Compensation. In recognition of
         Executive's efforts in helping the Company achieve certain strategic
         objectives, the Company shall pay to Executive $75,000 within ten (10)
         days of the execution and delivery of this Agreement. In addition, the
         Company shall pay Executive a $25,000 bonus in the event the Company
         sells or otherwise disposes of substantially all of its assets deployed
         in the automotive fabrics business of the Chatham Division of the
         Company in one or more transactions approved by the Board of Directors
         of the Company. For the avoidance of doubt, to be entitled to the full
         bonus, substantially all of the assets associated with the woven
         fabrics automotive business, the circular knit fabrics automotive
         business and the woven velour fabrics automotive business must all be
         sold or otherwise disposed of. Notwithstanding the foregoing, the Board
         of Directors of the Company shall consider paying and may in its
         discretion agree to pay Executive a portion of the bonus upon
         completion of the sale of less than substantially all of the
         aforementioned assets. Payment of any amount due under this paragraph
         shall be made within fifteen (15) days of the completion of such
         transaction or transactions regarding such sale or disposition.

         5.       Expenses. During the Period, the Company shall pay on behalf
of Executive (or reimburse Executive for) reasonable and necessary business
expenses incurred by Executive at the request of, or on behalf of, the Company
in the performance of his duties pursuant to this Agreement. In addition, the
Company will continue to pay or reimburse Executive's club expenses on the basis
heretofore adopted by the parties under the Existing Agreement. Executive shall
file such expense reports with respect thereto as required by the Company's
policies.

         6.       Termination of Employment.

                  (a)      Resignation by Executive; Termination for Cause.

                           (i)      Except as otherwise provided in paragraph
                  6(e) below, if prior to the expiration of the Period,
                  Executive resigns from his employment hereunder or his
                  employment is terminated by the Company for Cause, as defined
                  in subparagraph 6(a)(ii) hereof, Executive shall not be
                  entitled to receive any further compensation under paragraph 4
                  hereof. Without limiting the generality of the foregoing,
                  Executive shall not be entitled to receive any compensation
                  under the Company's incentive compensation plan for the fiscal
                  year in which the effective date of resignation or termination
                  for Cause occurs or to participate in any Plans with respect
                  to future periods after the effective date of such resignation
                  or termination. However, Executive shall be entitled to
                  receive the following:

                                    (1)      Base Salary to the extent accrued
                           as of the effective date of such resignation or
                           termination.


                                      -3-
<PAGE>   4

                                    (2)      Vested benefits under any Plan as
                           of the termination date in accordance with the terms
                           of such Plan.

                           (ii)     Termination for "Cause" shall mean
                  termination of Executive's employment with the Company by the
                  Board of Directors of the Company because of (A) any act or
                  omission that constitutes a material breach by Executive of
                  any of his obligations or agreements under this Agreement or
                  the failure or refusal of Executive to perform any duties
                  reasonably required hereunder after notification by the Board
                  of Directors of such breach, failure or refusal and failure of
                  Executive to correct such breach, failure or refusal within
                  ten days of such notification (other than by reason of the
                  incapacity of Executive due to physical or mental illness), or
                  (B) the committing by Executive of a felony, or (C) the
                  perpetration by Executive of a dishonest act or common law
                  fraud against the Company or any of its affiliates, or (D) the
                  impairment of Executive's capacity or performance due to
                  alcohol or other substance abuse, or (E) any other act or
                  omission that is materially detrimental to the financial
                  condition or business reputation of, or is otherwise
                  materially injurious to, the Company or any affiliate thereof.

                           (iii)    The effective date of Executive's
                  resignation under this paragraph 6(a) shall be the earlier of
                  two weeks after receipt by the Company of written notice of
                  resignation or the date set forth in such resignation. The
                  effective date of termination of employment by the Company
                  under this paragraph 6(a) shall be the date specified in a
                  written notice of termination (which date shall be no earlier
                  than the date of furnishing such notice), or if no such date
                  is specified therein, the date of receipt by Executive of such
                  written notice of termination.

                  (b)      Termination Without Cause.

                           (i)      Subject to the provisions hereinafter set
                  forth, if, prior to the expiration of the Period, Executive's
                  employment is terminated by the Company without Cause,
                  Executive shall not be entitled to receive any further
                  compensation under paragraph 4 hereof, but Executive shall be
                  entitled to receive the following:

                                    (1)      Base Salary accrued as of the
                           termination date.

                                    (2)      The greater of the following two
                           amounts:

                                             (A) An amount equal to the Base
                                    Salary that would have accrued (at the then
                                    current Base Salary rate) over the remainder
                                    of the Period if Executive had not been
                                    terminated, payable over the remainder of
                                    the Period in equal monthly installments on
                                    the Company's regularly scheduled payroll
                                    dates commencing on the first pay period to
                                    occur following the last payment under
                                    clause (1) above; or


                                      -4-
<PAGE>   5

                                             (B) An amount equal to one year's
                                    Base Salary (at the then current Base Salary
                                    rate), payable over one year in equal
                                    monthly installments on the Company's
                                    regularly scheduled payroll dates commencing
                                    on the first pay period to occur following
                                    the last payment under clause (1) above.

                                    (3)      The health care and life insurance
                           benefits coverage provided to Executive at his date
                           of termination shall be continued at the same level
                           and in the same manner as if his employment had not
                           terminated (subject to the customary changes in such
                           coverages if Executive reaches age 65 or similar
                           events), beginning on the date of such termination
                           and ending on the date the last payment is due under
                           clause (2) above; and any additional coverages
                           Executive had at termination, including dependent
                           coverage, will also be continued for such period on
                           the same terms based on the same proportionate share
                           of total cost of each such coverage as is being paid
                           by Executive at the time of such termination.

                                    (4)      Any bonus payable under an
                           incentive compensation or other Plan for the fiscal
                           year in which the termination is effective, pro rated
                           based on the number of days from the first day of
                           such fiscal year to and including the date of
                           termination. Any pro rated bonus payable hereunder
                           shall be paid on the applicable date provided for in
                           the Plan.

                                    (5)      Vested benefits under any other
                           Plan as of the termination date in accordance with
                           the terms thereof.

                           (ii)     If, following a termination of employment
                  without Cause, Executive breaches the provisions of paragraph
                  7 hereof, Executive shall not be eligible, as of the date of
                  such breach, for the payment of any further benefits under
                  clauses (2) and (3) of subparagraph 6(b)(i) above, and all
                  obligations and agreements of the Company to pay such benefits
                  shall thereupon cease.

                           (iii)    In addition to the amounts provided for in
                  subparagraph 6(b)(i) above, the Company shall pay to Executive
                  the amount, if any, which when added to the other amounts
                  payable to Executive under this subparagraph 6(b), will place
                  Executive in the same after-tax position as if the excise tax
                  penalty of Section 4999 of the Internal Revenue Code of 1986,
                  as amended, or any successor statute of similar import, did
                  not apply to any of the amounts payable under this paragraph
                  6(b), including this subparagraph 6(b)(iii). Amounts payable
                  under this subparagraph 6(b)(iii) shall be paid not less than
                  14 business days prior to the date Executive must pay any
                  portion of such excise tax penalty, whether by estimated tax
                  payment or otherwise.

                  (c)      Death or Disability. If Executive dies prior to the
         expiration of the Period, his beneficiary or estate shall be entitled
         to receive a pro rata portion of the Base Salary and a pro rata portion
         of any incentive compensation bonus, at the rates paid to Executive


                                      -5-
<PAGE>   6

         pursuant to subparagraph 3(a) hereof at the date of death, for a period
         of 90 days following such date of death. If Executive suffers from a
         Permanent Disability (as hereinafter defined) prior to the expiration
         of the Period, the Company shall be entitled to terminate this
         Agreement by notice and Executive shall be entitled to receive a pro
         rata portion of the Base Salary and a pro rata portion of any incentive
         compensation bonus, at the rates paid to Executive pursuant to
         subparagraph 3(a) hereof at the date of Permanent Disability, for a
         period of 180 days following such date of Permanent Disability. Except
         as otherwise provided above and except for the right to receive vested
         benefits under any Plan in accordance with the terms of such Plan,
         Executive shall not be entitled to receive any further compensation
         under paragraph 3 hereof after the date of his death or Permanent
         Disability. "Permanent Disability" shall mean Executive's permanent
         disability as defined in the Company's disability insurance policy then
         in effect, or, if there is no insurance policy then in effect, as
         defined in the Company's employee disability policy in effect on the
         Effective Date.

                  (d)      Expiration of Term. Except as otherwise provided in
         this subparagraph 6(d), in the event either Executive or the Company
         gives written notice of non-renewal of this Agreement pursuant to
         paragraph 3 hereof, following expiration of the Period, Executive shall
         not be entitled to receive any further compensation under paragraph 4
         hereof and, except as provided in the following sentence, shall not be
         entitled to any severance or termination payments. Notwithstanding the
         foregoing, during the six-month period following expiration of the
         Period while Executive is employed by the Company:

                           (i)      In the event Executive resigns or the
                  Company terminates Executive with Cause, then subparagraph
                  6(a) shall apply to such resignation or termination even
                  though the Period has expired.

                           (ii)     In the event the Company terminates
                  Executive without Cause, then subparagraph 6(b) shall apply to
                  such termination even though the Period has expired.

                           (iii)    In the event a "Change of Control" (as
                  defined below) occurs while Executive is employed by the
                  Company, then subparagraph 4(e) and subparagraph 6(e) shall
                  apply even though the Period has expired.

                  (e)      Change of Control.

                           (i)      Notwithstanding the foregoing provisions of
                  this paragraph 6, if a Change of Control occurs during the
                  Period (or within six months after the expiration of the
                  Period while Executive is employed by the Company) and either
                  (x) the Company terminates Executive's employment with the
                  Company within one year after the Change of Control other than
                  for "Good Cause" (as hereinafter defined) or in connection
                  with his death or Permanent Disability; or (y) Executive
                  resigns within one year after the Change of Control for "Good
                  Reason" (as hereinafter defined), then Executive shall not be
                  entitled to receive any further


                                      -6-
<PAGE>   7

                  compensation under paragraph 4 hereof, but Executive shall be
                  entitled to receive the following:

                                    (1)      Base Salary accrued as of the
                           termination date.

                                    (2)      An amount equal to two years' Base
                           Salary (at the then current Base Salary rate),
                           payable over one year in equal monthly installments
                           on the Company's regularly scheduled payroll dates
                           commencing on the first pay period to occur following
                           the last payment under clause (1). Notwithstanding
                           the foregoing, (x) in the event the Change of Control
                           is as described in clause (C) of the definition
                           thereof, then the amounts payable under this clause
                           (2) shall be paid in their entirety upon occurrence
                           of the underlying event that the stockholders voted
                           in favor of; and (y) in the event Executive shall
                           have resigned for Good Reason within seven days after
                           the occurrence of a Change of Control (or in the case
                           of changes of control based upon a stockholder vote,
                           the occurrence of the underlying event that the
                           stockholders voted in favor of), then the amounts
                           payable under this clause (2) shall be paid in their
                           entirety upon occurrence of the Change of Control or
                           the underlying event as the case may be.

                                    (3)      The health care and life insurance
                           benefits coverage provided to Executive at his date
                           of termination shall be continued for a two year
                           period at the same level and in the same manner as if
                           his employment had not terminated (subject to the
                           customary changes in such coverages if Executive
                           reaches age 65 or similar events), beginning on the
                           date of such termination; and any additional
                           coverages Executive had at termination, including
                           dependent coverage, will also be continued for such
                           period on the same terms based on the same
                           proportionate share of total cost of each such
                           coverage as is being paid by Executive at the time of
                           such termination. Notwithstanding the foregoing, (x)
                           in the event the Change of Control is as described in
                           clause (C) of the definition thereof, then the
                           benefits due under this clause (3) shall be fully
                           funded upon occurrence of the underlying event that
                           the stockholders voted in favor of; and (y) in the
                           event Executive shall have resigned for Good Reason
                           within seven days after the occurrence of a Change of
                           Control (or in the case of changes of control based
                           upon a stockholder vote, the occurrence of the
                           underlying event that the stockholders voted in favor
                           of), then the benefits due under this clause (3)
                           shall be fully funded upon occurrence of the Change
                           of Control or the underlying event as the case may
                           be.

                                    (4)      Except as provided below, any bonus
                           payable under an incentive compensation or other Plan
                           for the fiscal year in which the termination is
                           effective, pro rated based on the number of days from
                           the first day of such fiscal year to and including
                           the date of termination. Any pro rated bonus payable
                           hereunder shall be paid on the applicable date


                                      -7-
<PAGE>   8

                           provided for in the Plan. In the event Executive
                           resigns during the first year following a Change of
                           Control for Good Reason as defined in clause (A) or
                           (B) of the definition thereof, then the amount of
                           bonus to be paid under any incentive compensation
                           Plan then in effect shall be double the maximum
                           amount to which Executive would be entitled to
                           thereunder for that year, regardless of whether the
                           Company achieves the required results required to
                           earn the maximum payments thereunder, and the bonus
                           amount shall be payable within seven days of the
                           termination of employment.

                                    (5)      Vested benefits under any other
                           Plan as of the termination date in accordance with
                           the terms thereof.

                           (ii)     If, following such a termination or
                  resignation, Executive breaches the provisions of paragraph 7
                  hereof, Executive shall not be eligible, as of the date of
                  such breach, for the payment of any further benefits under
                  clauses (2) and (3) of subparagraph 6(e)(i) above, and all
                  obligations and agreements of the Company to pay such benefits
                  shall thereupon cease.

                           (iii)    In addition to the amounts provided for in
                  subparagraph 6(e)(i) above, the Company shall pay to Executive
                  the amount, if any, which when added to the other amounts
                  payable to Executive under this subparagraph 6(e), will place
                  Executive in the same after-tax position as if the excise tax
                  penalty of Section 4999 of the Internal Revenue Code of 1986,
                  as amended, or any successor statute of similar import, did
                  not apply to any of the amounts payable under this paragraph
                  6(e), including this subparagraph 6(e)(iii). Amounts payable
                  under this subparagraph 6(e)(iii) shall be paid not less than
                  14 business days prior to the date Executive must pay any
                  portion of such excise tax penalty, whether by estimated tax
                  payment or otherwise.

For purposes of this subparagraph, a termination of Executive's employment by
the Company without Good Cause subject to this subparagraph 6(e) shall be deemed
to have occurred even if a Change of Control has not occurred if the termination
without Good Cause occurs at the request of or pursuant to an agreement with a
third party who has taken steps reasonably calculated to effect a Change of
Control, or otherwise in connection with or in anticipation of a Change of
Control. For purposes of this Agreement, the following definitions shall apply:

         "Change of Control" shall mean any of the following:

                  (A)      The acquisition by any person, entity or "group,"
         within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
         Exchange Act of 1934, as amended (the "Exchange Act") (other than by
         any employee benefit plan of the Company which acquires beneficial
         ownership of voting securities of the Company) of beneficial ownership
         (within the meaning of Rule l3d-3 promulgated under the Exchange Act)
         of 50% or more of either the then outstanding shares of Common Stock or
         the combined voting power of the Company's then outstanding voting
         securities entitled to vote


                                      -8-
<PAGE>   9

         generally in the election of directors. Notwithstanding the foregoing
         provisions of this subparagraph (A), the redemption by the Company
         prior to the Effective Date of Common Stock of the Company held by the
         "MLCP Investors" (as defined in the Amended and Restated Stockholders
         Agreement dated as of February 14, 1992, as amended, among the Company
         and other signatories thereto), shall not be deemed a Change in Control
         under this subparagraph (A).

                  (B)      Approval by the stockholders of the Company of a
         reorganization, merger or consolidation, in each case, with respect to
         which the shares of the Company's voting stock outstanding immediately
         prior to such reorganization, merger or consolidation do not constitute
         or become exchanged for or converted into more than 50% of the combined
         voting power entitled to vote generally in the election of directors of
         the reorganized, merged or consolidated Company's then outstanding
         voting securities.

                  (C)      Approval by the stockholders of the Company of a
         liquidation or dissolution of the Company or of the sale of all or a
         majority of the revenue producing assets of the Company considered on a
         consolidated basis.

                  (D)      Approval by the Board of Directors of the Company of
         the sale or disposition of 60% or more of the Company Assets (as
         hereinafter defined) in one or more transactions. "Company Assets"
         shall mean the revenue producing assets of the Company, considered on a
         consolidated basis, as of the Effective Date and any revenue producing
         assets acquired by the Company subsequent to the Effective Date. For
         all purposes of this subparagraph (D), the Company Assets shall be
         determined by reference to the book value of such assets as shown on
         the Company's financial statements.

         "Good Reason" shall mean:

                  (A)      The assignment to Executive of any duties
         inconsistent and in diminution in any respect with Executive's then
         current position (including status, offices, titles and reporting
         requirements), authority, duties or responsibilities, or any other
         action by the Company which results in a diminution in such position,
         authority, duties or responsibilities, excluding for this purpose an
         isolated, insubstantial and inadvertent action not taken in bad faith
         and which is remedied by the Company promptly after receipt of notice
         thereof given by Executive; or

                  (B)      A reduction in the overall level of Executive's
         compensation or benefits; or

                  (C)      The Company's requiring Executive to be based at any
         office or location other than the office at which he is based on the
         Effective Date, except for travel reasonably required in the
         performance of his responsibilities; or

                  (D)      Any purported termination by the Company of
         Executive's employment other than for Good Cause; or


                                      -9-
<PAGE>   10

                  (E)      Any failure by the Company to comply with and satisfy
         paragraph 10(b) of this Agreement; or

                  (F)      If after the sale or disposition of 60% or more of
         the Company Assets in one or more transactions, Net Sales (as
         hereinafter defined) are reduced by more than 60%. "Net Sales" shall
         mean the quarterly net sales of the Company, considered on a
         consolidated basis, as reported in the Company's quarterly report on
         Form 10-Q as filed with the Securities and Exchange Commission. The
         amount of a reduction in Net Sales shall be determined by comparing Net
         Sales for the fiscal quarter ending July 1, 2000 with the Net Sales for
         the first full fiscal quarter commencing after the sale or other
         disposition of Company Assets.

         For purposes of this Agreement, any good faith determination of "Good
         Reason" made by Executive shall be conclusive.

         "Good Cause" shall mean and be limited to (A) an act or acts of
personal dishonesty taken by Executive and intended to result in substantial
personal enrichment of Executive at the expense of the Company, (B) repeated
violations by Executive of Executive's obligations as an employee of the Company
which are demonstrably willful and deliberate on Executive's part and which are
not remedied in a reasonable period of time after receipt of written notice from
the Company, or (C) the conviction of Executive of a felony.

         7.       Noncompetition; Noninterference and Nondisclosure.

                  (a)      General. This Agreement is being entered into by
         Executive in consideration of the Company's continued employment of
         Executive pursuant to this Agreement. Executive expressly acknowledges
         that he has and will continue to have special knowledge, contacts and
         expertise with respect to the Restricted Business (as defined below),
         and that the Company would not employ him, or make the expenditures
         necessary to enable Executive to perform the duties incident to his
         employment by the Company, without obtaining the covenants and
         agreements of Executive set forth in this paragraph 7, which Executive
         acknowledges and agrees reflect reasonable restrictions necessary and
         appropriate to protect the interests of the Company.

                  (b)      Modification of Definitions. Executive acknowledges
         that from time to time Executive and the Company may agree to change
         the definition of Restricted Business or Territory (as defined below).
         Any such changes will be binding upon Executive.

                  (c)      Noncompetition. Executive acknowledges that as a
         member of the Office of the President of the Company and Senior Vice
         President and Chief Executive Officer of the Company, he has and will
         have executive responsibility for the business and operations of the
         Company, throughout the states of Alabama, Arizona, California,
         Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Iowa,
         Kansas, Louisiana, Massachusetts, Maryland, Michigan, Mississippi,
         Missouri, New Jersey, New York,


                                      -10-
<PAGE>   11

         North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island,
         South Carolina, Tennessee, Texas, Vermont, Virginia and Washington
         (hereinafter the "Territory") and that it is reasonable, and necessary,
         for the Company to protect itself on such basis. For so long as
         Executive is employed by the Company and continuing through the
         Restricted Period (as defined below), Executive covenants and agrees
         that in the Territory he will not, unless he receives the prior written
         consent of the Company, directly or indirectly:

                           (i)      have any interest in (whether as owner,
                  consultant, officer, director or otherwise) (but excluding an
                  interest by way of employment only);

                           (ii)     act as agent, broker or distributor for, or
                  adviser or consultant to; or

                           (iii)    be employed as an executive or hold an
                  executive position in

         any business (without regard to the form in which conducted) which is
         engaged, or which he reasonably knows is undertaking to become engaged,
         in the Territory in the business of (1) manufacturing and selling
         greige woven fabrics; (2) designing, manufacturing or selling wide
         elasticized knit fabrics produced in warp knit styles or circular knit
         styles for use in, among other things, intimate apparel, foundations,
         swimwear, bodywear and other activewear; (3) designing, manufacturing
         or selling narrow elasticized fabrics for use in, among other things,
         intimate apparel, swimwear and medical uses; (4) designing,
         manufacturing or selling upholstery fabrics for use in the
         transportation and automotive markets; or (5) designing, manufacturing
         or selling blankets, mattress pads, electric mattress pads, fringed
         throws, afghans or infant bedding products (collectively, the
         "Restricted Business"). For purposes of this Agreement, the Restricted
         Period shall mean (x) in the case of a resignation or termination for
         Cause subject to paragraphs 6(a) or 6(d)(i) or a termination subject to
         paragraph 6(c) (in the case of a Permanent Disability), a period of 24
         months after the date of the resignation or termination; (y) in the
         case of a resignation or termination subject to paragraphs 6(d)(iii) or
         6(e), a period of 12 months after the date of the resignation or
         termination; or (z) in the case of a resignation or termination subject
         to paragraphs 6(b) or 6(d)(ii), the period during which payments are to
         be made to Executive pursuant to subparagraph 6(b)(i)(2) hereof,
         without regard to the possible application of subparagraph 6(b)(ii)
         hereof. Except as expressly provided in the preceding sentence with
         respect to certain resignations and terminations described in paragraph
         6(d) hereof, there will be no Restricted Period if the term of this
         Agreement expires without renewal pursuant to paragraph 3 hereof.

                  (d)      Noninterference. During the Restricted Period,
         Executive shall not, whether for his own account or for the account of
         any other individual, partnership, firm, corporation or other business
         organization or entity (other than the Company), solicit or endeavor to
         entice away from the Company, any subsidiary or affiliate of the
         Company known by Executive to be a subsidiary or an affiliate of the
         Company (an "Affiliate") or otherwise interfere with the relationship
         of the Company or any Affiliate with, any person who is employed by or
         associated with the Company or any Affiliate (including, but not
         limited to, any independent sales representatives or organizations) or
         any person or entity


                                      -11-
<PAGE>   12

         who is, or was within the then most recent 12-month period, a customer
         or client of the Company or any Affiliate located within the Territory.

                  (e)      Nondisclosure. Executive recognizes that the services
         to be performed by him hereunder are special, unique and extraordinary
         in that, by reason of his employment, hereunder, he may acquire or has
         acquired confidential information and trade secrets concerning the
         operations of the Company or its Affiliates, the use or disclosure of
         which could cause the Company substantial loss and damages that could
         not be readily calculated and for which no remedy at law would be
         adequate. Accordingly, Executive covenants and agrees with the Company
         that he will not at any time, except in performance of Executive's
         obligations to the Company hereunder or with the prior written consent
         of the Board of Directors of the Company, directly or indirectly,
         disclose any secret or confidential information that he may learn or
         has learned by reason of his association with the Company, or any
         predecessors to its business, or use any such information to the
         detriment of the Company or any of its Affiliates. The term
         "confidential information" includes, without limitation, information
         not previously disclosed to the public or to the trade (provided that
         disclosure to a governmental agency under compulsion or in compliance
         with applicable laws, rules or regulations shall not be disclosure to
         the public or the trade for purposes of this subsection) with respect
         to the Company's or any of its Affiliates' products, manufacturing
         processes, facilities and methods, research and development, trade
         secrets, know-how and other intellectual property, systems, procedures,
         manuals, confidential reports, product price lists, cost sheets,
         customer lists, marketing plans or strategies, financial information
         (including the revenues, costs or profits associated with any of the
         Company's or any of its Affiliates' products), business plans,
         prospects or opportunities. Executive understands and agrees that the
         rights and obligations set forth in this subparagraph 7(e) shall
         survive the Restricted Period and Executive's employment hereunder and
         shall continue in the case of confidential information constituting a
         trade secret, indefinitely, and in the case of other confidential
         information, for a period of five years after the date of his
         termination of employment.

                  (f)      Exclusive Property. Executive confirms that all
         confidential information is and shall remain the exclusive property of
         the Company. All business records, papers and documents kept or made by
         Executive relating to the business of the Company shall be and remain
         the property of the Company. Upon the termination of his employment
         with the Company for any reason or upon the request of the Company at
         any time, Executive shall promptly deliver to the Company, and shall
         not retain copies of, any written materials not previously made
         available to the public or records or documents made by Executive or
         coming into his possession concerning the business or affairs of the
         Company, excluding records relating exclusively to the terms and
         conditions of his employment relationship with the Company. Executive
         understands and agrees that the rights and obligations set forth in
         this subparagraph 7(f) are perpetual and, in any case, shall extend
         beyond the Restricted Period and Executive's employment hereunder.


                                      -12-
<PAGE>   13

                  (g)      Stock Ownership. Nothing in this Agreement shall
         prohibit Executive from acquiring or holding any voting securities of
         any company or other business entity, provided that (i) Executive does
         not participate in the operations of any such company, (ii) the voting
         securities are listed on a national securities exchange or quoted on
         the automated quotation system of the National Association of
         Securities Dealers, Inc., and (iii) Executive and members of his
         immediate family do not own, at any time during the Restricted Period,
         more than 5% of the issued and outstanding voting securities of such
         entity.

                  (h)      Modification. It is understood and agreed by the
         parties hereto that should any portion, provision or clause of the
         foregoing be deemed too broad to permit enforcement to its full extent,
         then it shall be enforced to the maximum extent permitted by law, and
         Executive hereby consents and agrees that such scope may be judicially
         modified accordingly in any proceeding brought to enforce such
         restriction.

                  (i)      Independent. The covenants and agreements set forth
         in the foregoing subparagraphs shall be deemed and shall be construed
         as separate and independent covenants and agreements, and should any
         part or provision of such covenants and agreements be held invalid,
         void or unenforceable by any court of competent jurisdiction, such
         invalidity, voidness, or unenforceability shall in no way render
         invalid, void, or unenforceable any other part or provision thereof or
         any separate covenant not declared invalid, void, or unenforceable; and
         this Agreement shall in that case be construed as if the void, invalid
         or unenforceable provisions were omitted.

         8.       Intellectual Property.

                  (a)      Communication. Executive shall communicate to the
         Company promptly and fully all inventions, discoveries, designs,
         processes, improvements, works, documents, brochures, sales literature,
         computer software, patents, copyrights, trademarks, trade names and
         similar information (hereinafter collectively called "Intellectual
         Property") made or conceived by Executive (whether solely by Executive
         or jointly with others and whether involving equipment, products,
         systems, services or procedures) during the Period (i) that are along
         the lines of or are related to the present or prospective business,
         work, investigations, or other activity of the Company, (ii) that
         result from, are suggested by, or are related to any work that
         Executive may do in connection with his employment pursuant to this
         Agreement, or (iii) that result in whole or in part from work performed
         by Executive during time for which he is paid as an employee or
         independent contractor of the Company.

                  (b)      Assistance. Executive shall assist the Company and
         its designees during and subsequent to the Period in every proper way
         (without charge to the Company, but without expense to Executive) in
         obtaining and maintaining, for the benefit of the Company and its
         designees, patents and registrations in any and all countries for the
         Intellectual Property.


                                      -13-
<PAGE>   14

                  (c)      Assignment. Executive shall assign to the Company all
         of Executive's right, title and interest in and to Intellectual
         Property to make such Intellectual Property the sole and exclusive
         property of the Company or its designees.

                  (d)      Records. Executive shall keep and maintain adequate
         and current written records of all Intellectual Property, in the form
         of notes, sketches, drawings, samples or reports relating to them,
         which records shall be and remain the property of the Company at all
         times.

         9.       Injunctive Relief. Without intending to limit the remedies
available to the Company, Executive acknowledges that a breach of any of the
covenants contained in paragraphs 7 and 8 hereof may result in material
irreparable injury to the Company for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach or threat thereof, the Company shall be
entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining Executive from engaging in activities
prohibited by this Agreement or such other relief as may be required to
specifically enforce any of the covenants in this Agreement.

         10.      Nonassignability; Binding Agreement.

                  (a)      By Executive. Neither this Agreement nor any right,
         duty, obligation or interest hereunder shall be assignable or delegable
         by Executive without the Company's prior written consent; provided,
         however, that nothing in this paragraph shall preclude Executive from
         designating any of his beneficiaries to receive any benefits payable
         hereunder upon his death, or the executors, administrators, or other
         legal representatives, from assigning any rights hereunder to the
         person or persons entitled thereto.

                  (b)      By the Company. Except as provided in the following
         sentence, this Agreement nor any of the Company's rights and
         obligations hereunder may be assigned, delegated or transferred by it
         without Executive's prior written consent. Any business entity
         succeeding to substantially all of the business of the Company by
         purchase, merger, consolidation, sale of assets or otherwise, shall be
         bound by and shall adopt and assume this Agreement and the Company
         shall obtain the assumption of this Agreement by such successor.

                  (c)      Binding Effect. This Agreement shall be binding upon,
         and inure to the benefit of, the parties hereto, any successors to or
         assigns of the Company and Executive's heirs and the personal
         representatives of Executive's estate.

         11.      Attorneys' Fees. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which Executive may reasonably
incur as a result of any contest following any Change of Control (regardless of
the outcome thereof) by the Company or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including any legal fees and expenses incurred as a result
of any contest by Executive about the amount of any payment pursuant to
paragraph 6(e) of this


                                      -14-
<PAGE>   15

Agreement), plus in each case interest at the applicable Federal rate provided
for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended.

         12.      Severability. If the final determination of a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such determination may be perfected, that any
term or provision hereof is invalid or unenforceable, (a) the remaining terms
and provisions hereof shall be unimpaired and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.

         13.      Amendment; Waiver. This Agreement may not be modified, amended
or waived in any manner except by an instrument in writing signed by both
parties hereto. The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.

         14.      Governing Law. All matters affecting this Agreement, including
the validity thereof, are to be governed by, interpreted and construed in
accordance with the laws of the State of New York.

         15.      Notices. Any notice hereunder by either party to the other
shall be given in writing by personal delivery, certified mail, return receipt
requested, or overnight or special courier, to the address specified below the
parties' respective signatures or to such other address as may be specified by
notice from time to time by the Company or Executive. A notice shall be deemed
given, if by personal delivery or overnight or special courier, on the date of
such delivery or, if by certified mail, on the date shown on the applicable
return receipt.

         16.      Supersedes Previous Agreements. This Agreement constitutes the
entire agreement of the parties, and supersedes all prior or contemporaneous
negotiations, commitments, agreements and writings, with respect to the subject
matter hereof.

         17.      Counterparts. This Agreement may be executed by either of the
parties hereto in counterpart, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.

         18.      Headings. The headings of paragraphs and subparagraphs herein
are included solely for convenience of reference and shall not control the
meaning or interpretation of any of the provisions of this Agreement.


                [Remainder of this page intentionally left blank]


                                      -15-
<PAGE>   16

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.

                                       CMI INDUSTRIES, INC.


                                       By: /s/ Joseph L. Gorga
                                           -------------------------------------
                                           Joseph L. Gorga
                                           President and Chief Executive Officer

                                       Address:

                                       1301 Gervais Street
                                       Columbia, South Carolina 29201




                                       /s/ James A. Ovenden             [L.S.]
                                       -----------------------------------------
                                       James A. Ovenden

                                       Address:

                                       10 Sunturf Circle
                                       Columbia, SC 29223


                                      -16-