Exhibit 10(e)(xiv)
_____________________
Xx. Xxxxxxx Xxxxx
Executive Vice President
Xxxxxx Division
Xxxxxx Greetings, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Re: Employment Agreement
Dear Xxxx:
In accordance with our discussions, this letter serves as a contract
confirming your employment as Executive Vice President of the Card Division of
Xxxxxx Greetings, Inc. This agreement supersedes and terminates that
Employment Agreement entered into on January 2, 1991 and amended and extended
by agreement of December 6, 1994. The terms of this new Agreement are as
follows:
0.Xxx have agreed to serve the Company on a full-time basis as a senior
executive employee, and the Company agrees to employ you as such, for a
period of three years commencing as of April 1, 1996 and ending on
March 31, 1999. Your employment and this Agreement may be extended
thereafter on an indefinite basis by mutual agreement of the parties.
In the event that either you or the Company elect not to extend your
employment on an indefinite basis after March 31, 1999, then you shall
be treated as having been terminated without Cause and you shall be
entitled to those termination benefits set forth in Paragraph 5.
2.Your annual salary, effective as of April 1, 1996, shall be $210,000
and effective as of the date of the signing of this Agreement shall be
$230,000 and which amount may be increased from time to time by the
Company in accordance with the Company's salary administration program.
In addition, you will qualify for participation in the Incentive Bonus
Program.
0.Xx addition to the above salary and bonus, you will also be included in
Xxxxxx'x Supplemental Executive Retirement Plan and in Xxxxxx'x other
programs for executives which include: executive physical
examinations, supplemental life insurance, tax preparation, and estate
planning assistance. Further, you will continue to receive all other
fringe benefits as are generally available to Company executives as
such benefit plans may exist from time to time.
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Xx. Xxxxxxx Xxxxx
_________________
Page Two
0.Xx the event you are unable to perform your duties hereunder due to
illness or other incapacity, which incapacity continues for more than
six consecutive or nonconsecutive months in any 12 month period, the
Company shall have the right, on not less than 30 days written notice
to you, to terminate this Agreement; your employment and your salary
and rights to participate in the Incentive Bonus Plan and benefits
described in Paragraph 3 shall cease on the effective date of your
termination.
In the event of your death during your employment hereunder, your
salary shall cease as of the last day of the sixth full calendar month
following the month in which your death occurs; except for such salary
continuation rights, this Agreement and your rights to participate in
the Incentive Bonus Plan and benefits described in Paragraph 3 shall
terminate as of the date of death. Provided, however, that in the
event of your death during your employment hereunder health insurance
coverage shall be extended to your wife and dependent children at the
Company's expense for at least six months.
5.The Company reserves the right to terminate your employment at any time
during the term or extended term of this Agreement. Except where
termination is pursuant to Paragraph 4, or is for Cause as defined in
Paragraph 6, the Company will pay to you immediately upon such
termination, two times your yearly salary at the salary level in effect
on the date of termination, plus any unpaid bonus under the Incentive
Bonus Program with respect to a completed calendar year of employment.
In addition, you will continue to be covered at the Company's cost
under the Company's medical benefits plan until you commence new
employment or until two years from the date of termination, whichever
first occurs. In the event any person, corporation, partnership or
joint venture becomes the beneficial owner of fifty percent (50%) or
more of the voting securities of the Company then the provisions of
this Paragraph for two times salary and bonus shall be automatically
revised to 2.9 times such salary plus any unpaid bonus but subject to
the provisions of the attached Exhibit A. Further, upon the
consummation of such a change of ownership you may, within 30 days,
elect to terminate your employment and if you make such an election the
Company shall, upon such termination immediately pay to you 2.9 times
your yearly salary plus any unpaid bonus.
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Xx. Xxxxxxx Xxxxx
_________________
Page Three
0.Xx the event you voluntarily terminate your employment during the term
or extended term of this Agreement, other than 1) on March 31, 1999 as
provided in Paragraph 1, above, or 2) within 30 days of a change of
ownership as provided in Paragraph 5, above, or if your employment is
terminated by the Company for Cause, your right to salary and rights to
participate in the Incentive Bonus Plan and benefits described in
Paragraph 3 shall cease as of the date of termination. "Cause" shall
mean dishonesty, insubordination, gross negligence or willful
misconduct in the performance of your duties -- failure to perform
duties in a diligent and competent manner, or any willful or material
breach of this Agreement - provided, however, that in instances of
alleged insubordination, gross negligence, failure to perform duties in
a diligent and competent manner, or any willful or material breach of
this Agreement you shall be promptly given notice and shall have 90
days in which to correct or cure any alleged deficiency.
7.Termination of employment under Paragraph 4, 5, or 6 shall terminate
this Agreement with the exception of the provisions of Paragraphs 8, 9,
and 11 and any other provisions of this Agreement which by their terms
survive termination of employment.
0.Xx the event of termination of your employment for whatever reason, you
agree that for a period of one year after such termination you will not
compete, directly or indirectly, with the Company or with any division,
subsidiary or affiliate of Xxxxxx Greetings, Inc. or participate as a
director, officer, employee, consultant, advisor, partner or joint
venturer in any business engaged in the manufacture or sale of greeting
cards, gift wrap or other products produced by the Company, or by any
division, subsidiary or affiliate of Xxxxxx Greetings, Inc., without
the Company's prior consent.
0.Xx connection with this Agreement, you agree to continue to receive
confidential information of the Company in confidence, and not to
disclose to others, assist others in the application of, or use for
your own gain, such information, or any part thereof, unless and until
it has become public knowledge or has come into the possession of
others by legal and equitable means. You further agree that, upon
termination of employment with the Company, all documents, records,
notebooks, and similar writings, including copies thereof, then in your
possession, whether prepared by you or by others, will be left with the
Company. For purposes of this Paragraph, "confidential information"
means information concerning Company's finances, plans, sales,
products, processes and services, or those of Company's subsidiaries,
divisions or affiliates, which is disclosed to you or known by you as a
consequence of or through your employment with the Company, and which
is not generally known in the industry in which the Company or its
subsidiaries, divisions or affiliates are or may become engaged.
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Xx. Xxxxxxx Xxxxx
_________________
Page Four
10.Nothing herein is intended to be granted to you to the exclusion of any
other rights or privileges to which you may be entitled as an executive
employee of the Company under any retirement, insurance,
hospitalization, or other plan which may now or hereafter be in effect.
11.This agreement shall inure to the benefit of and be binding upon you
and your legal representatives as well as the Company, its successors
and assigns including, without limitation, any person, partnership,
corporation or other entity which may acquire all, or substantially
all, of the Company's assets and business.
To indicate your acceptance of and willingness to be bound by this
Agreement, please sign and return one duplicate original of this letter.
Sincerely,
XXXXXX GREETINGS, INC.
By /s/ Xxxxx X'Xxxxxxx
--------------------
AGREED:
/s/ Xxxxxxx Xxxxx
-------------------
Xxxxxxx Xxxxx
December 28, 1996
--------------------
Date
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EXHIBIT A
Anything in this Agreement to the contrary notwithstanding, in the event
that the Corporation's auditors (the "Auditors") determine that any payment or
distribution by the Corporation to or for the benefit of Executive, whether
paid or payable (distributed or distributable) pursuant to this Agreement or
otherwise (a "Payment"), would be nondeductible by the Corporation for federal
income tax purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), then the aggregate present value of the amounts
payable or distributable to or for the benefit of Executive pursuant to this
Agreement or any other agreement between Executive and Corporation (the
"Agreement Payments") shall be reduced (but not below zero) to the "Reduced
Amount." For purposes of this Agreement, the "Reduced Amount" shall be an
amount expressed in present value terms which maximizes the aggregate present
value of Agreement Payments without causing any Payment to be nondeductible by
the Corporation because of Section 280G of the Code.
As a result of the uncertainty in the application of Section 280G of the
Code at the time of the initial determination by the Auditors, it is possible
that Agreement Payments will have been made by the Corporation which should
not have been made (an "Overpayment") or that additional Agreement Payments
which will not have been made by the Corporation could have been made (an
"Underpayment"), consistent in each case with the calculation of the Reduced
Amount hereunder. In the event that the Auditors, based on the assertion of a
deficiency by the Internal Revenue Service against the Corporation or
Executive which the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to Executive which he shall repay to the
Corporation, together with interest at the applicable federal rate provided
for in Section 7872(f)(2) of the Code; provided, however, that no amount shall
be payable by Executive to the Corporation if and to the extent that such
payment would not reduce the amount which is subject to taxation under Section
4999 of the Code. In the event that the Auditors, based on controlling
precedent, determine that an Underpayment has occurred, such Underpayment
shall promptly be paid by the Corporation to or for the benefit of Executive,
together with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code.
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