Exhibit 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of the 23rd day
of April, 1999, by and between Foilmark, Inc., a Delaware corporation (the
"Company"), Foilmark Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of the Company ("Foilmark Sub"), and Xxxxxx Xxxxxx (the
"Employee").
RECITALS
WHEREAS, the Company and Employee have entered into that certain
Employment Agreement between HoloPak Technologies, Inc., a Delaware corporation
("HoloPak"), and the Employee, dated as of June 29, 1998, as amended (the
"Original Employment Agreement");
WHEREAS, HoloPak, the Company and Foilmark Sub are parties to the
Agreement and Plan of Merger, dated as of November 17, 1998 (the "Merger
Agreement"), whereby HoloPak will be merged with and into Foilmark Sub (the
"Merger"), with Foilmark Sub as the surviving corporation in the Merger (the
"Surviving Corporation");
WHEREAS, Employee and HoloPak mutually agree that the Original
Employment Agreement shall terminate immediately prior to the effective time of
the Merger, and concurrently that the Company shall employ Employee as of the
effective time of the Merger; and
WHEREAS, as a condition precedent to the Merger Agreement, the Company
has agreed to employ Employee under the terms and conditions set forth below.
WITNESSETH:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. EMPLOYMENT.
The Company hereby employs the Employee as Chief Accounting Officer,
New Jersey Operations, of the Surviving Corporation, or another comparable
senior executive position of the Company with such title as the Board of
Directors of the Company shall determine, and Employee hereby accepts such
employment. During the term of employment under this Agreement (the "Employment
Term"), the Employee shall perform such duties as are requested from time to
time by the Board of Directors of the Company or the Chief Executive Officer of
the Company, which duties shall be consistent with the duties of a chief
financial officer of a corporation or a subsidiary of a corporation; PROVIDED,
that the Employee will not be required to perform such duties outside a radius
of thirty (30) miles of East Brunswick, New Jersey; PROVIDED, FURTHER, that
Employee may infrequently be required to travel to Newburyport, Massachusetts as
requested by the Board of Directors or the Chief Executive Officer of the
Company.
2. PERFORMANCE.
During the Employment Term, the Employee shall devote his entire
business efforts to the performance of his duties hereunder.
3. TERM.
Unless otherwise terminated in accordance with Sections 5 or 6 hereof,
the Employment Term shall be for an initial term of one and one-half years
commencing on the date hereof and continuing thereafter for successive one-year
renewal terms, unless the Company or Employee shall deliver, no later than
ninety (90) days prior to the expiration of the Employment Term or any such
additional one year period, written notice to the other terminating this
Agreement effective as of the end of the Employment Term or the then current
additional one year period.
4. COMPENSATION FOR EMPLOYMENT.
(a) The basic annual compensation of the Employee for his employment
services to the Company and to all of its affiliated companies during the
Employment Term shall be $100,000.00 (the "Salary"), which the Company shall pay
to the Employee in accordance with its normal payroll policy. These are the
initial terms of annual compensation. The amount of Salary may change and
compensation will be reflected.
(b) During the Employment Term, the Company shall also provide the
Employee with those fringe benefits that are specified on Exhibit "A" hereto
(the "Fringe Benefits"). The Company shall also reimburse the Employee for any
reasonable business expenses incurred on the Company's behalf in connection with
the performance of the services during the Employment Term.
(c) (i) HoloPak has granted to the Employee under its Non-Qualified
Stock Option Plan (the "HoloPak Plan"), options to purchase shares of Common
Stock ("Options") for 5,000 shares of HoloPak Common Stock at an exercise price
of $2.5875 per share. The Options will vest and become exercisable in two equal
installments on the first two (2) anniversaries of the Employment Agreement.
Pursuant to and in accordance with Section 3.4 of the Merger Agreement, at the
effective time of the Merger, the Options shall be converted into and become
rights with respect to shares of common stock of the Company, and the Company
shall assume each Option.
(ii) As of the effective date of the Merger, the Company shall grant to
the Employee under its 1995 Amended and Restated Employee Stock Option Plan (the
"Plan") options ("Options") to purchase 6,000 shares of Company common stock,
$.01 par value, at an exercise price and pursuant to the vesting schedule set
forth in the Plan.
(iii) The Employee will be an eligible participant in the Plan
administered by the Company and, therefore, will be eligible for future grants
of stock options in addition to the Options referred to above. The administrator
of the Plan, which is currently the Compensation Committee of the Board of
Directors of the Company, will determine from time to time whether any such
additional Options shall be granted to the Employee and the exercise price
vesting schedule and other terms of any such additional options that may be
granted.
(d) The Company's commitment to grant additional Options is subject to
the Company's obtaining approval of such items by the Board of Directors of the
Company.
5. TERMINATION WITHOUT COMPENSATION.
(a) PARTIAL OR TOTAL DISABILITY. If the Employee is unable to perform
his duties and responsibilities hereunder to the full extent required hereunder
by reason of non-employment related illness, injury or incapacity for six months
(during which time he shall continue to be compensated hereunder), the Company
may terminate the Employment Term, and the Company shall not have any further
liability or obligation to the Employee hereunder except for any unpaid Salary,
unpaid bonus, adjusted pro rata based upon the portion of such bonus period in
which the Employee was actually employed by the company hereunder and any Fringe
Benefits accrued to the date of termination, provided, however, that Employee
reserves any rights that he may have against the Company with respect to any
claims for damages and/or benefits under any Workers' Compensation Act, or
otherwise, arising out of injuries, illness or incapacity incurred as a result
of his employment with the Company (an "Employment Injury"). In the event of any
dispute under this Section 5(a), the Employee shall submit to a physical
examination by a licensed physician mutually satisfactory to the Company and the
Employee, the cost of such examination to be paid by the Company, and the
determination of such physician shall be determinative. If, after termination
due to disability as provided herein, the Employee obtains, at his sole expense,
medical certification from a licensed physician reasonably satisfactory to the
Company that such disability has ended, the Company shall offer to employ the
Employee pursuant to the terms of this Agreement for the remainder of the
initial term or any renewal term in effect at the time of termination, except
that the Company shall not be required to reemploy the Employee at the same
officer position if the Company shall have elected another person to such
position during the period of the Employee's disability and such other person
continues in such position at the time of the Employee's return to employment.
(b) DEATH. If the Employees dies, this Employment Agreement (except for
the provisions of Sections 6, 10 and 11 hereof) shall terminate, and thereafter
the Company shall not have any further liability or obligation to the Employee,
his executors, administrator, heirs, assigns or any other person claiming under
or through him except for unpaid Salary, any unpaid bonus earned by Employee for
the bonus period in which Employee's death occurs adjusted pro rata based upon
the portion of such bonus period in which the Employee was actually employed by
the Company hereunder and any Fringe Benefits accrued to the date of his death.
(c) CAUSE. The Company may terminate the Employment Term for "cause" by
giving the Employee 30 days' written notice of the termination date, and
thereafter the Company shall not have any further liability or obligation to the
Employee. For purposes of the Agreement, "cause" shall mean the failure of the
Employee to observe or perform (other than by reason of illness, injury or
incapacity) any of the responsibilities or provisions of this Agreement after
the provision by the Company of 30-days written and an opportunity to cure such
failure to observe or perform such material terms or provisions. "Cause" also
shall include dishonesty, willful misconduct, material neglect of the Company's
business, conviction of a felony or other crime involving moral turpitude,
misappropriation of funds or habitual insobriety.
6. TERMINATION WITH COMPENSATION.
(a) NON-RENEWAL OF TERM. The Employment Term may be terminated by
either party hereto as of the end of the initial term or any renewal term then
in effect by giving written notice of the intention to terminate the Employment
Term at least 90 days prior to the proposed termination date. If the Company
terminates the Employment Term under such circumstances, the Company shall
provide the Employee with the Termination Compensation specified in Section 6
(c).
(b) WITHOUT CAUSE. The Company shall have the right to terminate the
Employment Term without cause at any time by giving the Employee 60 days'
written notice of the termination date. Under such circumstances, the Company
shall provide the Employee with the Termination Compensation specified in
Section 6(c).
(c) TERMINATION COMPENSATION. The "Termination Compensation" shall
consist of payment of the Employee's Salary under Section 4(a), at the level in
effect at the date of termination, for the longer of (A) any remaining part of
the initial term of the Employment Term or (B) 6 months. The Employee shall not
be entitled to any Termination Compensation under this Section 6 unless the
Employee executes and delivers to the Company after a notice of termination a
release in a form satisfactory to the Company in its sole discretion by which
the Employee releases the Company and its affiliates, and the Company so
releases the Employee, from any obligations and liabilities of any type
whatsoever, except for the Company's obligation to provide the Salary specified
in this Section 6, any unpaid bonus earned by Employee for the bonus period in
which termination of employment occurs, adjusted pro rata based upon the portion
of such bonus period in which the Employee was actually employed by the Company
hereunder and any liability for any Employment Injury. The parties hereto
acknowledge that the Salary to be provided under this Section 6 is to be
provided in consideration for a above-specified release. Compensation under the
terms and conditions of Section 6(c) and any obligations that the Company may
have for any Employment Injury.
(d) EXCLUSIVITY. Upon any termination by the Company under Section 6(a)
or Section 6(b), the Company shall not have any obligation to the Employee, his
executors, administrators, heirs, assigns or any other claiming under or through
him other than to provide the Termination Compensation under the terms and
conditions of Section 6(c) and any obligations that the Company may have for any
Employment Injury.
7. AGREEMENT NOT TO COMPETE.
(a) During the Non-Competition Period (defined below), the Employee
shall not, within the Restricted Area ( defined below) directly or indirectly,
in any capacity, without the express written consent of the Chairman of the
Board of Directors of the Company, render his services, engage in any business
activity or have a financial interest in, any business (other than as the holder
of not more than one percent of the total outstanding stock of any publicly-held
company) that is competitive with any of those business activities in which the
Company, the Surviving Corporation, Foilmark Manufacturing Corporation, Transfer
Print Foils, Inc., Alubec Industries, Inc, or any subsidiary of any of the
foregoing or any person, partnership, association, corporation or other entity
(each a "Person") controlled by any of them (any such party is referred to
herein as a "Foilmark Party") shall have been engaged during his employment by
the Company, nor shall the Employee assist any person or entity that is engaged
in such business, including by making Foilmark Information (defined below)
available to any such person or entity. In addition, the Employee shall not
directly or indirectly solicit or otherwise encourage any of employees of any
Foilmark Party to terminate their employment with the applicable Foilmark Party.
As used herein, the "Restricted Area" means (i) the United States of America and
(ii) Canada. If a court determines that the foregoing restrictions are too broad
or otherwise unreasonable under applicable law, including with respect to time
space, the court is hereby requested and authorized by the parties hereto to
review the foregoing restriction to include the maximum restrictions allowable
under applicable law. The "Non-Competition Period" means the period during which
the Employee is employed hereunder. In addition, (A) in the case of termination
of employment pursuant to Section 6 hereof, the "Non-Competition Period" shall
be extended from the date of such termination of employment for a period equal
to the greater of (x) the period in which any payment of compensation (except
for an employment related injury) is made to Employee pursuant to this Agreement
and (y) one year, or (B) in
the case of termination of employment pursuant to Section 5 hereof, the
"Non-Competition Period" shall be extended from the date of such termination of
employment for a period of one year.
(b) The terms of this Section 7 shall apply to the Employee and any
Person controlled by the Employee, including any relative of the Employee, to
the same extent as if they were parties hereto, and the Employee shall take
whatever actions may be necessary to cause any such Persons or entities to
adhere to the terms of this Section 7.
8. INVENTIONS DESIGNS AND PRODUCT DEVELOPMENTS.
All inventions, innovations, designs ideas and product developments
(collectively, the "Developments"), developed or conceived by the Employee,
solely or jointly with others, whether or not patentable or copyrightable, at
any time during the Employment Term and that relate to the actual or planned
business activities of any Foilmark Party and all of the Employee's rights,
title and interest therein, shall be the exclusive property of the applicable
HoloPak Party. The Employee hereby assigns, transfers and conveys to any
applicable Foilmark Party all of his rights, title and interest in and to any
and all such Developments. As requested from time to time by the Board, the
Employee shall disclose fully, as soon as practicable and in writing, all
Developments to the Chairman of the Board of Directors of the Company. At any
time and from time to time, upon the request of the Board, the Employee shall
execute and deliver to the Company any and all instruments, documents and
papers, give evidence and do any and all other acts that, in the opinion of
counsel for the Company, are or may be necessary or desirable to document such
transfer or to enable any applicable Foilmark Party to file and prosecute
applications for and to acquire, maintain and enforce any and all patents,
trademark registrations or copyrights under United States or foreign law with
respect to any such Developments or to obtain any extension, validation,
reissue, continuance or renewal of any such patent, trademark or copyright. The
applicable Foilmark Party will be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse the Employee for all reasonable expenses incurred
by him in compliance with the provisions of this Section.
9. CONFIDENTIAL INFORMATION.
(a) The Employee has had and will have possession of or access to
confidential information relating to the business of one or more Foilmark
Parties, including writings, equipment, processes, drawings, reports, manuals,
invention records, financial information, business plans, customer lists, the
identity of or other facts relating to prospective customers, inventory lists,
arrangements with suppliers and customers, computer programs, or other material
embodying trade secrets, customer or product information or technical or
business information of certain Foilmark Parties. All such information, other
than any information that is in the public domain through no act or omission of
the Employee or which he is authorized to disclose, or that the Employee had in
his possession prior to this employment with the Company is referred to
collectively as the "Foilmark Information". During and after the Employment
Term, the Employee shall not knowingly, willfully or intentionally (i) use or
exploit in any manner the Foilmark Information for himself or any Person other
than a Foilmark Party, (ii) remove any Foilmark Information, or any reproduction
thereof, from the possession or control of any Foilmark Party or (iii) treat
Foilmark Information otherwise than in a confidential manner.
(b) All Foilmark Information developed, created or maintained by the
Employee, alone or with others while employed by the Company, and all Foilmark
Information maintained by the Employee thereafter, shall remain at all time the
exclusive property of the applicable Foilmark Party. The Employee shall return
to the Company all Foilmark Information, and reproductions thereof, whether
prepared by him or others, that
are in his possession immediately upon request and in any event upon the
completion of his employment by the Company.
10. REMEDIES.
The Employee expressly acknowledges that the remedy at law for any
breach of Sections 6, 7, 8 or 9 will be inadequate and that upon any such breach
or threatened breach, the Company (or the applicable Foilmark Party) shall be
entitled as a matter of right to injunctive relief in any court of competent
jurisdiction, in equity or otherwise, and to enforce the specific performance of
the Employee's obligations under these provisions without the necessity of
proving the actual damage or the inadequacy of a legal remedy. Subject to the
remainder of this Section 10, the rights conferred upon the Company (and any
Foilmark Party) by the preceding sentence shall not be exclusive of, but shall
be in addition to, any other rights or remedies which the Company may have at
law, in equity or otherwise.
11. SURVIVAL.
Notwithstanding the termination of the Employment Term pursuant to
Section 5 or 6, the obligations of the Employee under Sections 6, 7, 8 and 9
hereof shall survive and remain in full force and effect and the Company shall
be entitled to relief against the Employee pursuant to the provisions of Section
10 hereof.
12. GENERAL.
(a) GOVERNING LAW. The terms of this Agreement shall be governed by the
laws of the State of New Jersey.
(b) INTERPRETATION. Unless the context of this Agreement clearly
requires otherwise, (i) references to the plural include the singular, and to
the singular include the plural, (ii) "or" has the inclusive meaning frequently
identified with the phrase "and/or" and (iii) "including" has the inclusive
meaning frequently identified with the phrase "but not limited to". The section
and other headings contained in this Agreement are for reference purposes only
and shall not control or affect the construction of this Agreement of the
interpretation thereof in any respect. Section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified. Each accounting
term used herein that is not specifically defined herein shall have the meaning
given to it under GAAP.
(c) BINDING EFFECT. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit and be enforceable by the
respective heirs, representatives, successors (including any successor as a
result of a merger or similar reorganization) and assigns of the parties hereto,
except that the duties and responsibilities of the Employee hereunder are of a
personal nature and shall not be assignable in whole or in part by the Employee.
Any Foilmark Party other than the Company is a third party beneficiary of this
Agreement and may enforce the provisions of this Agreement that pertain to such
Foilmark Party, including Sections 6, 7, 8 and 9, to the same extent as if a
party hereto.
(d) NOTICES. All notices required to be given under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered or when mailed be registered or certified mail, postage prepaid,
return receipt requested, or when sent by Federal Express or other overnight
delivery service, addressed as follows (or to such other address that a party
may provide from time or time by notice to the other parties):
TO EMPLOYEE:
Xxxxxx Xxxxxx
0 Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
TO THE COMPANY:
Foilmark, Inc.
0 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: President
(e) ENTIRE AGREEMENT. Termination of Prior Agreement Modification. This
Agreement (including Exhibit A hereto) and the additional agreements specified
in Sections 4(c) and 4(d) (to the extent that the parties enter into any of such
agreements) constitute the entire agreement of the parties hereto with respect
to the subject matter hereof. This Agreement may not be modified or amended in
any way except in writing by the parties hereto.
(f) WAIVER. No waiver of any breach of this Agreement shall be
construed to be a waiver as to succeeding breaches.
(g) SEVERABILITY. If any provision of this Agreement or application
thereof to anyone under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.
(h) COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto upon the same instrument.
(i) TERMINATION OF ORIGINAL EMPLOYMENT AGREEMENT. Employee and Foilmark
Sub agree that the Original Employment Agreement has been terminated effective
immediately prior to the effective time of the Merger. In consideration for
entering into this Agreement, the sufficiency of which is hereby acknowledged,
Employee hereby concurrently waives all rights that he may have under the
Original Employment Agreement, including, but not limited to, any right that he
may have to Termination Compensation (as such term is defined in the Original
Employment Agreement) under the Original Employment Agreement arising out of or
as a result of such termination of the Original Employment Agreement.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement the day and year first written above.
FOILMARK, INC.
By: /s/
-------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: President & Chief Executive Officer
FOILMARK ACQUISITION CORPORATION
By: /s/
-------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: President
/s/
------------------------------
Xxxxxx Xxxxxx
EXHIBIT A
FRINGE BENEFITS
1. TYPICAL OFFICER BENEFITS: Inclusion in the benefit plans generally
given to executive officers of the Company from time to time, including
any benefits provided with respect to life and disability insurance,
and participation in any of the Company's profit sharing and pension
plans.
2. MEDICAL INSURANCE: The Company shall waive the three-month waiting
period for participation in Medical, Prescription and Dental benefits.
3. VACATION: You will be eligible for 3 vacation weeks during the balance
of our fiscal year ending December 31, 1999. Thereafter, you will be
eligible for vacation time in accordance with Company policy; provided,
that you shall be eligible for at least 3 vacation weeks per year.
4. COMPANY VEHICLE: An automobile allowance, in accordance with Company
policy, will be provided, in an amount not less than $500 per month.
Insurance, maintenance and Company business mileage will also be
covered by the Company.
