EXHIBIT 10.19
CENVEO, INC.
One Canterbury Green
000 Xxxxx Xxxxxx, 0xx Xxxxx
[Cenveo logo] Xxxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
June 22, 2006
Xx. Xxxxxx Xxxxx
Cenveo Inc.
One Canterbury Green
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxx:
This letter agreement (and the attached Annex A, collectively, this
"Agreement") governs certain terms of your employment as President with
Cenveo, Inc. (the "Company") and the terms under which your employment with
the Company may be terminated. You and the Company hereby acknowledge that
your employment with the Company constitutes "at-will" employment and that
either party may terminate your employment at any time, upon written notice
of termination, subject to and in accordance with the provisions of this
Agreement.
1. Termination of Employment.
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(a) If the Company terminates your employment without Cause, as
defined in Annex A, or if you terminate your employment for Good Reason, as
defined in Annex A, (i) the Company will pay you, in lieu of any other
severance benefit that would otherwise be payable to you, a lump sum payment
within ten (10) days (or, if later, promptly after the time for revocation
of the release referred to in Section 2 below has expired) after your
termination equal to one and one-half (1 1/2) times your Annualized Total
Compensation, as defined in Annex A; (ii) you will immediately vest in all
outstanding stock options or other equity grants issued to you as of the
date of your termination; and (iii) you will be entitled to receive your
base salary through the date of such termination (to the extent not
previously paid) plus all other amounts (other than any severance benefits)
you are entitled to under the terms of the Company's benefit plans,
programs, and policies through the date of your termination.
If you elect medical or dental coverage under the Company's group
medical or dental plans pursuant to Section 4980B of the Code ("COBRA
Coverage"), the Company will also pay or reimburse you, if paid by you,
promptly upon your request, an amount
equal to the premium for COBRA Coverage (for yourself and your dependents)
during a period not to exceed eighteen (18) months of such COBRA Coverage or
such shorter period to which you and your dependents are entitled pursuant
to COBRA.
(b) If your employment is terminated for any other reason,
including by reason of your death or disability, or if you voluntarily
terminate your employment without Good Reason, you will be entitled to
receive only your base salary through the date of such termination (to the
extent not previously paid) plus all other amounts (other than any severance
benefits) you are entitled to under the terms of the Company's benefit
plans, programs, and policies through the date of your termination.
(c) Except as specifically provided in this Section 1, you will not
be entitled to any other compensation, severance or other benefits from the
Company upon the termination of your employment for any reason.
2. Delivery of Release. As a condition to the obligation of the
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Company to make the payments provided for in this Agreement and otherwise
perform its obligations hereunder to you upon termination of your employment
(other than due to your death), you or your legal representatives must
deliver to the Company a general unconditional release in favor of the
Company in form and substance satisfactory to the Company, and the time for
revocation of such release must have expired without revocation by you. You
are not obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to you under any of the provisions of
this Agreement.
3. Non-Competition and Non-Solicitation. You agree that at all
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times both during your employment and for eighteen (18) months thereafter
you will not ,directly or indirectly, (a) carry on, engage in, or otherwise
provide services to, any business that competes anywhere in the United
States with a portion of the Company's business representing more than 15%
of the Company's consolidated revenues on the date of your termination of
employment with the Company (b) solicit or hire, or assist others in the
solicitation or hiring of, any of the employees of the Company or any of its
subsidiaries or (c) solicit or otherwise interfere in any respect with the
business relationships of the Company or any of its subsidiaries with any of
their customers or suppliers. During such eighteen (18) month period, you
will not make any statements, comments, or communications that are
reasonably likely to be considered to be disparaging, derogatory or
detrimental to the good name or business reputation of the Company.
4. Entire Agreement. This Agreement (including, without limitation,
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Annex A) constitutes the entire agreement and understanding between you and
the Company with respect to the subject matter hereof, and may not be
amended or modified except by subsequent written agreement executed by both
parties hereto.
5. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which will constitute an original, and all of which
together will constitute one and the same Agreement.
If the foregoing terms and conditions are acceptable and agreed to by you,
please sign the line provided below to signify such acceptance and agreement
and return the executed copy to the undersigned.
CENVEO, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman and CEO
Accepted and Agreed this
23 day of June, 2006.
--
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
ANNEX A
DEFINITIONS AND MISCELLANEOUS TERMS
a. "Cause" means:
(i) the willful and continued failure of the Executive to perform
substantially his duties with the Company (other than any such failure
resulting from Executive's incapacity due to physical or mental illness or
any such failure subsequent to Executive being delivered a notice of
termination without Cause by the Company or delivering a notice of
termination for Good Reason to the Company) after a written demand for
substantial performance is delivered to Executive by the Company which
specifically identifies the manner in which the Company believes that
Executive has not substantially performed Executive's duties;
(ii) the willful engaging by Executive in illegal conduct or misconduct
which is demonstrably and materially injurious (monetarily or otherwise) to
the Company or its subsidiaries;
(iii) conviction of, or the pleading of nolo contendere with regard to, a
crime constituting a felony; or
(iv) dishonesty or misappropriation by Executive relating to the Company or
any of its funds, properties or other assets.
A termination for Cause after a Change in Control (as defined in the Equity
Plan, as of the date hereof) shall be based only on events occurring after
such Change in Control; provided, however, the foregoing limitation shall
not apply to an event constituting Cause that was not discovered by the
Company prior to a Change in Control. For purpose of this definition, no act
or failure to act by Executive shall be considered "willful" unless done or
omitted to be done by Executive in bad faith and without reasonable belief
that Executive's action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be
done, by Executive in good faith and in the best interests of the Company.
In order for a cessation of Executive's employment to be deemed to be a
termination of Executive's employment for Cause for the conduct described
above, (A) the Company shall have provided written notice to Executive that
identifies such conduct, and (B) in the event that the event or condition is
curable, Executive shall have failed to remedy such event or condition
within thirty (30) days after Executive has received such written notice,
and (C) the final determination that Executive's employment shall be
terminated for Cause shall have been made (specifying the particular details
thereof) by the Company. The Company must initially notify Executive of any
event constituting Cause within ninety (90) days following the Company's
knowledge of its existence or such event shall not constitute Cause under
this Agreement.
ANNEX A
b. "Good Reason" means, without Executive's express written consent, the
occurrence of any of the following events:
(i) the assignment to Executive of any duties or responsibilities (including
reporting responsibilities) that are inconsistent with Executive's
position(s), duties, responsibilities or status with the Company, or any
diminution of such duties or responsibilities (other than temporarily while
incapacitated because of physical or mental illness), including a
requirement that you report to anyone other than Xxxxxx X. Xxxxxx, Xx., CEO
or the Board of Directors or an adverse change in Executive's titles or
offices (including Executive's membership on the Board) with the Company;
(ii) a reduction by the Company in Executive's rate of annual base salary or
annual target bonus opportunity (including any adverse change in the formula
for such annual bonus target) or other incentive opportunities as the same
may be increased from time to time thereafter;
(iii) any requirement of the Company that Executive be based anywhere more
than thirty-five (35) miles from his current location or such other place of
employment as mutually agreed upon by the Company and Executive;
(iv) any material breach of this Agreement by the Company, or the Company
notifies Executive of the Company's intention not to observe or perform one
or more of the material obligations of the Company under this Agreement; or
(v) the failure of the Company to continue in effect Executive's
participation in the Company's employee benefit plans, programs,
arrangements and policies, at a level substantially equivalent in value to
and on a basis consistent with the relative levels of participation of other
similarly positioned senior executive officers.
Notwithstanding the foregoing, a Good Reason event shall not be deemed to
have occurred if the Company cures such action, failure or breach within ten
(10) days after receipt of notice thereof given by Executive. Executive's
right to terminate employment for Good Reason shall not be affected by
Executive's incapacities due to mental or physical illness and Executive's
continued employment shall not constitute consent to, or a waiver of rights
with respect to, any event or condition constituting Good Reason; provided,
however, that Executive must provide notice of termination of employment
within six (6) days following Executive's knowledge of an event constituting
Good Reason or such event shall not constitute Good Reason under this
Agreement.
c. "Annualized Total Compensation" means the Executive's Base Salary, target
bonus opportunity (as if all targets and objectives were met) and car
allowance for one year, at the rate in effect immediately before the
Executive's termination date.
ANNEX A
Allocations; Mitigation of Excise Tax.
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(a) The payments made under Section 1 will, in the aggregate, be in
consideration for the Executive's separate agreements under Sections 2 and 3
of this Agreement and, in part, to provide the Executive certain additional
severance benefits. The allocation of the aggregate payments under this
Agreement as the specific consideration for each of the Executive's separate
agreements and as an additional severance benefit will be in the Executive's
reasonable discretion with the consent of the Company, which consent will
not be unreasonably withheld or denied.
(b) In the event any portion of the payments under Section 1 or other
benefits, including any acceleration of vesting or payment, provided for
under this Agreement or any other agreement or arrangement between the
Executive and the Company ("Payments") would be subject to the excise tax
imposed pursuant to Section 4999 of the Internal Revenue Code, such Payments
will be reduced to the amount that would result in no portion of the
Payments being subject to the excise tax imposed pursuant to section 4999 of
the Code; provided that no such reduction will be made if the net after-tax
benefit to which the Executive otherwise would be entitled without such
reduction would be greater than the net after-tax benefit to the Executive
resulting from the receipt of the Payments with such reduction. For purposes
of the foregoing calculation, the Executive's net after-tax benefit will be
determined after taking into account federal, state and local income and
excise taxes. The allocation of any reduction required hereby among the
Payments will be determined by the Executive. The Company agrees that the
Executive's reasonable allocation pursuant to this provision (for severance
amounts under this Agreement) to be in consideration for the Executive's
agreement under Section 2 may be used by the Executive to mitigate the
effects of Section 4999 of the Internal Revenue Code.
Confidentiality; Intellectual Property.
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(a) The Executive hereby acknowledge that, as an employee of the Company,
the Executive will be making use of, acquiring and adding to confidential
information of a special and unique nature and value relating to the Company
and its subsidiaries. The Executive further recognize and acknowledge that
all confidential information is the exclusive property of the Company and
its subsidiaries, is material and confidential, and is critical to the
successful conduct of the business of the Company and its subsidiaries.
Accordingly, the Executive hereby covenant and agree that the Executive will
use confidential information for the benefit of the Company and its
subsidiaries only and will not at any time, directly or indirectly, during
the term of the Executive's employment with the Company or at any time
thereafter divulge, reveal or communicate any confidential information to
any person, firm, corporation or entity whatsoever, or use any confidential
information for the Executive's own benefit or for the benefit of others,
except as required in connection with the performance of the Executive's
duties. The foregoing does not prohibit the Executive from making any
disclosures required by applicable law, provided that whenever possible the
Executive will give the Company
ANNEX A
prior notice of such contemplated disclosure and cooperate with the Company
at its expense in seeking a protective order or other appropriate protection
of such information.
(b) All Intellectual Property, as defined in Annex A, and Technology, as
defined in Annex A, created, developed, obtained or conceived of by the
Executive during the Executive's employment, and all business opportunities
presented to the Executive during the Executive's employment, will be owned
by and belong exclusively to the Company, provided that they are reasonably
related to any of the business of the Company as at the date of such
creation, development, obtaining or conception, and the Executive will (i)
promptly disclose any such Intellectual Property, Technology or business
opportunity to the Company, and (ii) execute and deliver to the Company,
without additional compensation, such instruments as the Company may require
from time to time to evidence its ownership of any such Intellectual
Property, Technology or business opportunity.
Enforcement of Covenants.
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The Executive acknowledge that the restrictions contained in of this
Agreement are a reasonable and necessary protection of the immediate
interests of the Company, and any violation of these restrictions would
cause substantial injury to the Company and that the Company would not have
entered into this Agreement, without receiving the additional consideration
offered by the Executive in binding the Executive to any of these
restrictions. In the event of a breach or threatened breach by the Executive
of any of these restrictions, the Company will be entitled to apply to any
court of competent jurisdiction for an injunction restraining the Executive
from such breach or threatened breach; provided, however, that the right to
apply for an injunction shall not be construed as prohibiting the Company
from pursuing any other available remedies for such breach or threatened
breach. In the event that, notwithstanding the foregoing, a covenant
included herein is deemed by any court to be unreasonably broad in any
respect, it shall be modified in order to make it reasonable and shall be
enforced accordingly. Without limitation of, and notwithstanding the
foregoing, in the event that, in any judicial proceeding, a court refuses to
enforce any of the covenants contained herein, then the unenforceable
covenant shall be deemed eliminated from the provisions hereof for the
purpose of those proceedings to the extent necessary to permit the remaining
covenants to be enforced. If any one or more of the provisions hereof is
held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected
thereby. To the extent permitted by applicable law, the Executive and the
Company waive any provision of law which renders any provision hereof
invalid, illegal or unenforceable in any respect.
ANNEX A
Indemnification.
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The Executive's rights of indemnification under the Company's and any of its
subsidiaries organizational documents, any plan or agreement at law or
otherwise and the Executive's rights thereunder to director's and officer's
liability insurance coverage for, in both cases, actions as an officer
and/or director of the Company and its affiliates shall survive any
termination of the Executive's employment.
Notices.
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All notices or communications under this Agreement must be in writing,
addressed (i) if to the Company to the attention of the General Counsel at
the Company's headquarters address and (ii) if to the Executive, at the
Executive's address first written above (or to any other addresses as either
party may designate in a notice duly delivered as described in this
paragraph). Any notice or communication must be delivered by telecopy, by
hand or by courier. Notices and communications may also be sent by certified
or registered mail, return receipt requested, postage prepaid, addressed as
above and the third business day after the actual date of mailing will
constitute the time at which notice was given.
Governing Law.
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This Agreement will be governed by and construed in accordance with the laws
of New York that apply to contracts made and performed entirely within such
state.
Arbitration of Disputes.
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Any dispute or controversy arising under or in connection with this
Agreement that cannot be resolved by the Executive and the Company will be
determined by arbitration in New York City, New York, in accordance with the
rules set forth by the American Arbitration Association. The decision of the
arbitrator will be final and binding on the Executive and the Company and
judgment may be entered on such decision in any court of competent
jurisdiction.
Successors and Assigns.
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This Agreement will inure to the benefit of and be enforceable by the
Executive's legal representatives and heirs. This Agreement will inure to
the benefit of and be binding upon the Company and its successors and
assigns. As used in this Agreement, the term "Company" means the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, written agreement, or otherwise.
Withholding.
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The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as are required to be withheld pursuant to any
applicable law or regulation.
ANNEX A
Entire Agreement; Modifications.
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This Agreement (and the Annexes hereto) constitutes the entire agreement
and understanding between the Executive and the Company with respect to the
subject matter hereof, and may not be amended or modified except by
subsequent written agreement executed by both parties hereto. At the
Executive's request, the Company agrees to negotiate in good faith with the
Executive to make such amendments to this Agreement as may be necessary or
appropriate to comply with Section 409A of the Code.
