EXHIBIT 10.19
7/31/95
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT between AptarGroup, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxx (the "Executive") is entered into
on October 19, 1995, effective as of April 22, 1995. In consideration of the
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covenants contained herein, the parties agree as follows:
1. Employment. The Company shall employ the Executive, and the
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Executive agrees to continued employment by the Company, upon the terms and
subject to the conditions set forth herein for the period beginning on April 22,
1995 and ending on April 22, 2001, unless earlier terminated pursuant to Section
4 hereof (the "Employment Period").
2. Position and Duties. During the Employment Period, the Executive
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shall serve as the President of the Xxxxxxxx Dispensing division of the Company
(the "Division") or in such other executive position as determined by the Chief
Executive Officer of the Company (the "Company CEO") and shall have the normal
duties, responsibilities and authority of an executive serving in such position,
subject to the direction of the Board of Directors of the Company (the "Board")
or the Company CEO. The Executive shall have the title of President of the
Division or such other title denoting an executive office as determined by the
Company CEO and shall report to the Company CEO or such other executive officer
of the Company as determined by the Company CEO. During the Employment Period,
the Executive shall devote his best efforts and his full business time to the
business and affairs of the Division or such other business unit of the Company
as determined by the Company CEO.
3. Compensation. (a) The Company shall pay the Executive a salary
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during the Employment Period, in monthly installments, initially at the rate of
$200,000 per annum. The Company CEO may, in his sole discretion (i) increase
(but not decrease) such salary from time to time and (ii) award a bonus to the
Executive for any calendar year during the Employment Period.
(b) The Company shall reimburse the Executive for all reasonable
expenses incurred by him in the course of performing his duties under this
Agreement which are consistent with the Company's policies in effect from time
to time.
(c) During the Employment Period, the Executive shall be entitled to
participate in the Company's executive benefit programs on the same basis as
other executives of the Company having the same level of responsibility, which
programs consist of those benefits (including insurance, vacation, company car
or car allowance and/or other benefits) for which substantially all of the
executives of the Company are from time to time generally eligible, as
determined from time to time by the Board. During the Employment Period, the
Executive shall also be entitled to participate in a supplemental executive
retirement program, the principal terms of which are set forth in Exhibit A
hereto (the "SERP").
4. Termination of Employment. (a) The Employment Period shall end
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upon the first to occur of: (i) the expiration of the term of this Agreement
pursuant to Section 1 hereof, (ii) termination of the Executive's employment by
the Company on account of the Executive's having become unable (as determined by
the Board in good faith) to regularly perform his duties hereunder by reason of
illness or incapacity for a period of more than six consecutive months
("Termination for Disability"), (iii) termination of the Executive's employment
by the Company for Cause ("Termination for Cause"), (iv) the Executive's death
or (v) termination of the Executive's employment by the Executive for any reason
following written notice to the Company at least 90 days prior to the date of
such termination ("Termination by the Executive").
(b) For purposes of this Agreement, "Cause" shall mean (i) the
commission of a felony involving moral turpitude, (ii) the commission of a
fraud, (iii) the commission of any act involving dishonesty with respect to the
Company or any of its subsidiaries or affiliates, (iv) gross negligence or
willful misconduct with respect to the Company or any of its subsidiaries or
affiliates, (v) breach of any provision of Section 5 or Section 6 hereof or (vi)
any other breach of this Agreement which is material and which is not cured
within 30 days following written notice thereof to the Executive by the Company.
(c) If the Employment Period ends for any reason set forth in Section
4(a), except as otherwise provided in this Section 4, the Executive shall cease
to have any rights to salary, bonus (if any) or benefits hereunder, other than
(i) any unpaid salary accrued through the date of such termination, (ii) any
bonus payable, but only if such termination occurs during the third or fourth
quarter of the Company's fiscal year, such bonus to be prorated in accordance
with Company policy, (iii) any unpaid expenses which shall have been incurred as
of the date of such termination and (iv) to the extend provided in any benefit
plan in which the Executive has participated, including
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the SERP, any plan benefits which by their terms extend beyond termination of
the Executive's employment. Notwithstanding the foregoing, if the Employment
Period ends on account of Termination by the Executive or Termination for Cause,
the Executive shall not be entitled to any unpaid bonus accrued through the date
of such termination.
(d) If the Employment Period ends prior to April 22, 2001 on account
of Termination for Disability, the Company shall pay to the Executive, in
addition to the amounts described in Section 4(c) hereof, amounts equal to one-
half of the amounts the Executive would have received as salary (based on the
Executive's salary then in effect) had the Employment Period remained in effect
until the second anniversary of the date of such termination, at the times such
amounts would have been paid, less any payments to which the Executive shall be
entitled during such salary continuation period under any disability benefit
plan in which the Executive has participated as an employee of the company.
(e) If the Employment Period ends prior to April 22, 2001 on account
of the Executive's death, the Company shall pay to the Executive's estate (or
such person or persons as the Executive may designate in a written instrument
signed by him and delivered to the Company prior to his death) amounts equal to
one-half of the amounts the Executive would have received as salary (based on
the Executive's salary then in effect) had the Employment Period remained in
effect until the second anniversary of the date of the Executive's death, at the
times such amounts would have been paid.
(f) Notwithstanding the foregoing provisions of this Section 4, in
the event of a Change in Control (as defined in Section 4(g) hereof), the
employment of the Executive hereunder shall not be terminated by the Company or
any successor to the Company or the Division following such Change in Control
unless the Executive receives written notice of such termination from the
Company at least 12 months (or such lesser number of months remaining until the
end of the employment period) prior to the date of such termination. In the
event of such termination of employment by the Company following a Change in
Control, or in the event that the Executive terminates his employment hereunder
for Good Reason (as defined in Section 4(g) hereof) following a Change in
Control, the Executive shall be entitled to receive the amounts the Executive
would have received as salary (based on the Executive's salary then in effect)
at the times such amounts would otherwise have been paid, and the Executive
shall accrue benefits under the SERP, as if the Employment Period had remained
in effect until April 22, 2001. The Executive agrees that he shall not terminate
his employment hereunder, other than for Good Reason, within one year following
a Change in Control
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unless the Company receives written notice of such termination from the
Executive at least six months prior to the date of such termination. In the
event of such termination by the Executive other than for Good Reason, the
Executive shall be entitled to receive the amounts the Executive would have
received as salary (based on the Executive's salary then in effect) at the times
such amounts would otherwise have been paid, and the Executive shall accrue
benefits under the SERP, as if the Employment Period had remained in effect
until the date which is six months following the date of such termination or
April 22, 2001, whichever occurs first.
(g) For purposes of this Agreement (i) a "Change in Control" shall be
deemed to have occurred if any person becomes the holder of securities
representing a majority of the voting power of the Company, whether by merger,
consolidation, tender offer or otherwise, or the Division is sold by the Company
and (ii) "Good Reason" shall mean (x) a reduction by the Company in the
Executive's rate of annual salary in effect immediately prior to the Change in
Control, (y) a material reduction in any benefit afforded to the Executive
pursuant to any benefit plan of the Company in effect immediately prior to the
Change in Control, unless all comparable executives of the Company suffer a
substantially similar reduction or (z) the relocation of the Executive's office
to a location more than 60 miles from Crystal Lake, Illinois.
(h) Notwithstanding anything in this Agreement to the contrary, in
the event it shall be determined that any payment or distribution by the Company
or its affiliated companies to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any adjustment required
under this Section 4(h)) (in the aggregate, the "Total Payments") would be
subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), then the payments due
hereunder shall be reduced so that the Total Payments are One Dollar ($1) less
than such maximum amount.
(i) All determinations required to be made under Section 4(h),
including whether and when a reduction pursuant to Section 4(h) in the amount
payable hereunder is required and the amount of any such reduction and the
assumptions to be utilized in arriving at such determination, shall be made by
the Company's public accounting firm (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
payment, or such earlier time as is requested by the Company or the Executive.
In the event that the Accounting Firm is serving as
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accountant or auditor for the individual, entity or group effecting the Change
in Control, the Executive shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that the reduction in the amount payable hereunder pursuant to Section
4(h) will have been less than that required by the calculations to be made
hereunder. In such event the Executive shall promptly pay to the Company the
amount of any additional reduction.
5. Confidential Information. The Executive acknowledges that the
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information, observations and data obtained by him while employed by the Company
pursuant to this Agreement, as well as those obtained by him while employed by
the Company or any of its subsidiaries or affiliates or any predecessor thereof
prior to the date of this Agreement, concerning the business or affairs of the
Company or any of its subsidiaries or affiliates or any predecessor thereof
("Confidential Information") are the property of the Company or such subsidiary
or affiliate. Therefore, the Executive agrees that he shall not disclose to any
unauthorized person or use for his own account any Confidential Information
without the prior written consent of the Company CEO unless and except to the
extent that such Confidential Information becomes generally known to and
available for use by the public other than as a result of the Executive's acts
or omissions to act. The Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes and
software and other documents and data (and copies thereof) relating to the
Confidential Information or the business of the Company or any of its
subsidiaries or affiliates which he may then possess or have under his control.
6. Noncompetition; Nonsolicitation. (a) The Executive acknowledges
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that in the course of his employment with the Company pursuant to this Agreement
he will become familiar, and during the course of his employment by the Company
or any of its subsidiaries or affiliates or any predecessor thereof prior to the
date of this Agreement he has become familiar, with trade
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secrets and customer lists of and other confidential information concerning the
Company and its subsidiaries and affiliates and predecessors thereof and that
his services have been and will be of special, unique and extraordinary value to
the Company.
(b) The Executive agrees that during the Employment Period and for two
years thereafter if this Agreement is terminated prior to April 22, 2001 or five
years thereafter if this Agreement is terminated on or after April 22, 2001 (the
"Noncompetition Period") he shall not in any manner, directly or indirectly,
through any person, firm or corporation, alone or as a member of a partnership
or as an officer, director, stockholder, investor or employee of or in any other
corporation or enterprise or otherwise, engage or be engaged, or assist any
other person, firm, corporation or enterprise in engaging or being engaged, in
any business than actively being conducted by the Company in any geographic area
in which the Company is conducting such business (whether through manufacturing
or production, calling on customers or prospective customers, or otherwise).
Notwithstanding the foregoing, subsequent to the Employment Period the Executive
may engage or be engaged, or assist any other person, firm, corporation or
enterprise in engaging or being engaged, in any business activity which is not
competitive with a business activity being conducted by the Company at the time
subsequent to the Employment Period that the Executive first engages or assists
in such business activity.
(c) The Executive further agrees that during the Noncompetition Period
he shall not in any manner, directly or indirectly (i) induce or attempt to
induce any employee of the Company or of any of its subsidiaries or affiliates
to terminate or abandon his employment, or any customer of the Company or any of
its subsidiaries or affiliates to terminate or abandon its relationship, for any
purpose whatsoever, or (ii) in connection with any business to which (b) above
applies, call on, service, solicit or otherwise do business with any then
current or prospective customer of the Company or of any of its subsidiaries or
affiliates.
(d) Nothing in this Section 6 shall prohibit the Executive from being
(i) a stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation any securities of which are publicly traded, so long as the
Executive has no active participation in the business of such corporation.
(e) If, at the time of enforcement of this Section 6, a court holds
that the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum period, scope or
geographical area reasonable under
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such circumstances shall be substituted for the stated period, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law.
7. Enforcement. Because the services of the Executive are unique and
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the Executive has access to confidential information of the Company, the parties
hereto agree that the Company would be damaged irreparably in the event any
provision of Section 5 or Section 6 hereof were not performed in accordance with
their respective terms or were otherwise breached and that money damages would
be an inadequate remedy for any such nonperformance or breach. Therefore, the
Company or its successors or assigns shall be entitled, in addition to other
rights and remedies existing in their favor, to an injunction or injunctions to
prevent any breach or threatened breach of any of such provisions and to enforce
such provisions specifically (without posting a bond or other security).
8. Survival. Sections 5, 6 and 7 hereof shall survive and continue
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in full force and effect in accordance with their respective terms,
notwithstanding any termination of the Employment Period.
9. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be either personally delivered, or sent by certified mail,
return receipt requested, postage prepaid, addressed a) if to the Executive, to
Xxxxx X. Xxxx, 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000, and if to
the Company, to AptarGroup, Inc., 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxxxx X, Xxxxxxx
Xxxx, Xxxxxxxx 00000, attention: Xxxxxxx X. Xxxxx, Executive Vice President,
Chief Financial Officer, Secretary and Treasurer, or (b) to such other address
as either party shall have furnished to the other in accordance with this
Section 9.
10. Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. Entire Agreement. This Agreement constitutes the entire agreement
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and understanding between the parties with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or
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between the parties, written or oral, which may have related in any manner to
the subject matter hereof.
12. Successors and Assigns. This Agreement shall inure to the benefit
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of and be enforceable by the Executive and his heirs, executors and personal
representatives, and the Company and its successors and assigns. Any successor
or assign of the Company shall assume the liabilities of the Company hereunder.
13. Governing Law. This Agreement shall be governed by the internal
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laws (as opposed to the conflicts of law provisions) of the State of Illinois.
14. Amendment and Waiver. The provisions of this Agreement may be
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amended or waived only with the prior written consent of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
APTARGROUP, INC.
By: /s/ Xxxx X. Siebel
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Its: President and COO
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/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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Exhibit A
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Principal Terms
of
Supplemental Executive Retirement Program
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The SERP benefit will be paid in full in accordance with the schedule
set forth below (the "Schedule") if the Executive is employed by the Company
until he reaches age 65 or if, following a change in control the Company
terminates the Executives employment, or if the Executive terminates his
employment for Good Reason. If the employment of the Executive is terminated
prior to his attaining age 65 on account of Termination for Disability,
Termination for Cause or Termination by the Executive, the SERP benefit accrued
through the date of termination of employment will be paid in accordance with
the Schedule beginning at age 65. If the employment of the Executive terminates
on account of his death prior to his attaining age 65, 50 percent of the SERP
benefit accrued through the date of termination of employment in accordance with
the Schedule will be paid to his spouse. If the Executive dies following the
termination of his employment, 50 percent of the SERP payable to the Executive
at the date of his death in accordance with the Schedule will be paid to his
spouse. The SERP is not a qualified plan for federal income tax purposes.
Schedule of Payments
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Amount of
Annual Payment
Period Earned for 10 Years
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4/22/95-4/22/96 $ 8,500
4/23/96-4/22/97 17,000
4/23/97-4/22/98 25,500
4/23/98-4/22/99 34,000
4/23/99-4/22/2000 42,500
4/23/2000-4/22/2001 50,000
