EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT dated as of January 31, 2002, and
effective as of January 1, 2002 ("Effective Date"), by and among Xxx Xxxxxxxx
Press, Inc., a Delaware corporation ("Company") and Xxxxx X. Xxxxxxxx
("Executive").
NOW, THEREFORE, in consideration of the mutual undertakings contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms shall have the
following meanings.
"BOARD" means the Board of Directors of a member of the Company Group.
"CAUSE" means (i) the conviction of Executive by a court of competent
jurisdiction of, or entry of a plea of NOLO CONTENDERE with respect to, a felony
or any other crime which involves fraud, dishonesty or moral turpitude; (ii)
fraud or embezzlement on the part of Executive; (iii) Executive's chronic abuse
of or dependency on alcohol or drugs (illicit or otherwise) which interferes
with the performance of Executive's duties, responsibilities or obligations
under this Agreement; (iv) the material breach by Executive of Section 2.5, 2.6
or 2.7 hereof; or (v) any act of moral turpitude or willful misconduct by
Executive which (A) is intended to result in substantial personal enrichment of
Executive at the expense of the Company Group or (B) may have a material adverse
impact on the business or reputation of the Company Group.
"CHANGE IN CONTROL" means (i) the acquisition by a person or group of
persons of greater than 50% of the voting power of the Company; (ii) the sale of
all or substantially all of the assets of the Company in one transaction or a
series of related transactions; or (iii) a merger or consolidation of the
Company in which the shareholders of the Company immediately prior to such
consolidation own directly or indirectly less than 50% of the voting power of
the resulting corporation.
"COMPANY GROUP" means, collectively, Holding, the Company and their
respective Subsidiaries, successors or assigns.
"EBITDA" means, for any period, consolidated net income of Holding,
the Company and its subsidiaries determined in accordance with GAAP plus (i)
provisions for taxes based on income or profits to the extent included in
computing such consolidated net income, plus (ii) consolidated interest expense
of Holding and its subsidiaries for such period, whether paid or accrued, to the
extent any such expense was deducted in computing such consolidated net income,
plus (iii) depreciation, amortization and other non-cash expenses of Holding and
its subsidiaries for such period (excluding
any such non-cash expenses to the extent it represents an accrual or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
paid in a prior period) to the extent any such expense was deducted in computing
such consolidated net income, plus (iv) any fees or expenses related to the
transactions contemplated by the Merger Agreement to the extent any such expense
was deducted in computing consolidated net income for such period, plus (v) any
annual retainer payment made to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation or its affiliates to the extent any such expense was deducted in
computing consolidated net income for such period, minus (vi) any gain on any
sale or disposition of assets of Holding or any of its subsidiaries in excess of
$200,000 in any year, minus (vii) any interest or dividend income or income from
any other investments, minus (viii) any gain on the sale of any investment or
any stock of any subsidiary of Holding or any of its subsidiaries, and (ix) plus
any increase in the LIFO reserve or minus any decrease in the LIFO reserve, in
each case for such period to the extent any such increase or decrease was
included in computing consolidated net income for such period.
"EMPLOYMENT PERIOD" has the meaning set forth in Section 2.1.
"GAAP" means U.S. generally accepted accounting principles applied in
accordance with the Company's accounting methodologies and procedures.
"HOLDING" means Xxx Xxxxxxxx Corporation.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
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ARTICLE II
EMPLOYMENT
2.1 EMPLOYMENT. The Company agrees to employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the Effective
Date and ending as provided in Section 2.4 (the "Employment Period").
2.2 POSITION AND DUTIES.
(a) Commencing on the Effective Date and continuing during the
Employment Period, Executive shall serve in an executive position for the
Company Group as determined by the Chief Executive Officer of the Company.
(b) Executive shall devote his best efforts and his full business
time and attention (except for permitted vacation periods and reasonable periods
of illness or other incapacity) to the business and affairs of the Company
Group. The Executive shall perform his duties and responsibilities to the best
of his abilities in a diligent, trustworthy, businesslike and efficient manner.
In the performance of his duties hereunder, Executive shall at all times report
and be subject to the lawful direction of the Chief Executive Officer of the
Company and any Board of Directors of any Person within the Company Group and
perform his duties hereunder subject to and in accordance with the directions of
the Chief Executive Officer of the Company and the resolutions or any other
determinations of any Board of Directors of any Person within the Company Group
and the By-laws of any Person within the Company Group, as from time to time in
effect. During the Employment Period, Executive shall not become an employee of
any Person other than a member of the Company Group. Executive shall be
permitted to make, monitor and pursue private passive investments that do not
interfere with the performance of his duties hereunder. Executive shall make
application for, and submit to any examination as may be reasonably requested
by, the Chief Executive Officer of the Company or the Board of Directors of
Holding in order to obtain key-man or other insurance on the life of Executive
for the benefit of the Company Group as the Chief Executive Officer of the
Company or the Board of Directors of Holding shall direct.
2.3 BASE SALARY AND BENEFITS.
(a) During the Employment Period, Executive's base salary shall be
$225,000 (subject to increase, if any, provided under Section 2.3(d)) per annum
(the "Base Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll practices and shall be subject to
deductions for customary withholdings, including, without limitation, federal
and state withholding taxes, social security taxes and state disability
insurance.
(b) During the Employment Period, Executive shall be entitled to an
annual bonus in an amount equal to $75,000 per annum (the "Non-Discretionary
Bonus"). During the Employment Period, Executive will also be eligible to
receive an additional bonus each year (the "Additional Bonus", and together with
the Non-
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Discretionary Bonus, the "Total Annual Bonus"). The Additional Bonus for
a calendar year shall equal 1.4% of EBITDA for such calendar year in excess of
certain EBITDA targets to be established by the Board from time to time, but in
no event shall the Additional Bonus exceed $210,000 for any calendar year. The
Total Annual Bonus shall be payable in December, 2002 for calendar year 2002,
and each December thereafter during the Employment Period for the calendar year
then ending, based on an estimate of EBITDA in accordance with current
practices. An adjustment for any underpayment or overpayment shall be made in
the next calendar year by the Company or Executive, as the case may be, within
30 days of receipt of certified financial statements for the Company Group. At
the option of the Company, the Additional Bonus may be paid in its entirety
within 30 days after receipt of certified financial statements for the Company
Group for the year to which such Additional Bonus relates. The Total Annual
Bonus shall be subject to deduction for customary withholdings, including,
without limitation, federal and state withholding taxes, social security taxes
and state disability insurance.
(c) In addition to the Base Salary, the Total Annual Bonus payable
to Executive pursuant to Section 2.3(b), Executive shall be entitled, during the
Employment Period, to (i) participate in all retirement, disability, pension,
health, medical, insurance and other fringe benefits or plans of the Company
generally available to employees, and (ii) the following benefits (collectively,
"Benefits") at the Company's expense:
(A) Four (4) weeks of vacation; and
(B) Reimbursement of all dues and assessments due in respect
of a corporate membership in Greenbriar Hills Country Club maintained on
behalf of Executive.
(d) Executive's base salary described in Section 2.3(a) may be
increased during the Employment Period at the sole discretion of the Board of
Holding.
2.4 TERM.
(a) The Employment Period shall end at 11:59 p.m. on December 31,
2004, subject to earlier termination (i) by reason of Executive's death, (ii) by
action of the Company or Holding, with or without Cause or (iii) upon
Executive's voluntary resignation or for any other reason not set forth above.
(b) RESIGNATION OR TERMINATION FOR CAUSE. If the Employment Period
is terminated as a result of Executive's voluntary resignation, or by the
Company or Holding for Cause, or for any other reason not set forth in Sections
2.4(c) or 2.4(d) hereof, the Executive shall be entitled to his Base Salary
through the date of termination, but shall not be entitled to any further Base
Salary, Total Annual Bonus or Benefits for that year or any future year, or to
any severance compensation of any kind, nature or amount. Executive agrees that
he shall provide at least 90 days' written notice prior to any voluntary
resignation.
(c) DEATH. If Executive's employment is terminated as a result of
his death, the Company shall pay to his estate all previously earned and accrued
but unpaid
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Base Salary up to the date of such termination, but neither Executive nor his
estate shall be entitled to any further Base Salary, Total Annual Bonus or
Benefits for that year or any future year or to any severance compensation of
any kind, nature or amount.
(d) TERMINATION WITHOUT CAUSE. Subject to Section 2.4(e) hereof, if
the Executive's employment is involuntarily terminated by the Company or Holding
without Cause, Executive shall be entitled to all previously earned and accrued
but unpaid Base Salary up to the date of such termination, but shall not be
entitled to any further Base Salary, Total Annual Bonus or Benefits for that
year or any future year, and Executive agrees that no severance compensation of
any kind, nature or amount shall be payable, except that Executive shall be
entitled to an amount in cash equal to $337,500, of which (i) $112,500 shall be
payable in one lump sum within five (5) days after the effective date of
termination and (ii) $225,000 shall be payable in twelve (12) equal monthly
payments of $18,750 each. Any payments to be made pursuant to clause (ii) of the
immediately preceding sentence shall be made in monthly installments on the
payment dates on which Executive's Base Salary would have otherwise been paid if
the Employment Period had continued, and as of the date of the final such
payment none of the Company, Holding, or any other member of the Company Group
shall have any further obligation to Executive pursuant to this Section 2.4.
(e) TERMINATION AFTER CHANGE IN CONTROL. Subject to Section 2.4(f),
in addition to the benefits provided pursuant to Section 2.4(d), if Executive's
employment is involuntarily terminated by the Company or Holding without Cause
after a Change in Control has occurred and such termination occurs prior to
December 31, 2002, Executive shall be entitled to a one-time lump sum cash
payment in an amount equal to $30,000, which payment shall be made by the
Company to Executive within fifteen (15) days after the date of termination.
(f) Executive agrees that Executive shall be entitled to the
payments provided for in Sections 2.4(d) and (e) if and only if Executive has
not breached as of the date of termination of the Employment Period the
provisions of Sections 2.5, 2.6 and 2.7 hereof and does not breach such sections
at any time during the period for which such payments are to be made; PROVIDED,
that the Company's obligation to make such payments will terminate upon the
occurrence of any such breach during such severance period.
(g) Executive hereby agrees that no severance compensation of any
kind, nature or amount shall be payable to Executive, except as expressly set
forth in this Section 2.4, and Executive hereby irrevocably waives any claim for
any other severance compensation.
(h) All of Executive's rights to Benefits and Total Annual Bonuses
hereunder (if any) accruing after the termination of the Employment Period shall
cease upon such termination.
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2.5 CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by him while employed by Holding,
the Company or any other member of the Company Group (whether prior to or during
the Employment Period) concerning the business or affairs of any member of the
Company Group ("Confidential Information") are the property of Holding, the
Company or such other member of the Company Group. Therefore, 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 Board of
Holding, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result of
Executive's acts or omissions to act. Executive shall deliver to Holding at the
termination of Executive's employment, or at any other time Holding 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, Work Product (as defined below) and the business of the Company
Group which he may then possess or have under his control. Executive
acknowledges that (a) the Confidential Information is commercially and
competitively valuable to the Company Group; (b) the unauthorized use or
disclosure of the Confidential Information would cause irreparable harm to the
Company Group; (c) Holding and the Company have taken and are taking all
reasonable measures to protect their legitimate interest in the Confidential
Information, including, without limitation, affirmative action to safeguard the
confidentiality of such Confidential Information; (d) the restrictions on the
activities in which Executive may engage set forth in this Agreement, and the
periods of time for which such restrictions apply, are reasonably necessary in
order to protect the Company Group's legitimate interests in its Confidential
Information; and (e) nothing herein shall prohibit Holding or the Company from
pursuing any remedies, whether in law or equity, available to Holding or the
Company for breach or threatened breach of this Agreement, including the
recovery of damages from Executive.
2.6 INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company
Group's actual or anticipated business, research and development or existing or
future products or services and which are conceived, developed or made by
Executive while employed by Holding, the Company or any other member of the
Company Group (whether prior to or during the Employment Period) ("Work
Product") belong to Holding, the Company or such other member of the Company
Group, and Executive hereby assigns to Holding and the Company his entire right,
title and interest in any such Work Product. Executive will promptly disclose
such Work Product to the Board of Holding and perform all actions reasonably
requested by the Board of Holding (whether during or after Executive's
employment period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
2.7 NONCOMPETE, NONSOLICITATION.
(a) Executive acknowledges that in the course of his employment with
Holding, the Company or any other member of the Company Group he has become
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familiar, and he will become familiar, with the Company Group's trade secrets
and with other Confidential Information and that his services have been and will
be of special, unique and extraordinary value to the Company Group. Therefore,
Executive agrees that, during the time he is employed by the Company or any
other member of the Company Group and thereafter for a period of twelve (12)
months (the "Noncompete Period"), Executive shall not directly or indirectly
own, manage, control, participate in, consult with, render services for, or in
any manner engage in any business with any person (including by himself or in
association with any person, firm, corporate or other business organization or
through any other entity) in competition with the businesses of the Company
Group as such businesses exist or are in process on the date of the termination
of Executive's employment, within any geographical area in which the Company
Group engages or plans on the date of the termination of Executive's employment
to engage in such businesses. Nothing herein shall prohibit Executive from being
a passive owner of not more than 2% of the outstanding stock of a corporation
which is publicly traded, so long as Executive has no active participation in
the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any other member of the Company Group to leave the employ of
the Company or such other member of the Company Group, or in any way interfere
with the relationship between any member of the Company Group and any employee
thereof, (ii) hire any person who was an employee of the Company Group at any
time within the six-month period prior to the date of termination of Executive's
employment with the Company or any other member of the Company Group, or (iii)
induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee, franchisor or other business relation of the Company or any other
member of the Company Group to cease doing business with the Company or such
other member of the Company Group, or in any way interfere with the relationship
between any such customer, supplier, licensee, licensor, franchisee, franchisor
or business relation and the Company or any other member of the Company Group.
(c) Executive agrees that: (i) the covenants set forth in this
Section 2.7 are reasonable in geographical and temporal scope and in all other
respects, (ii) Holding and the Company would not have entered into this
Agreement but for the covenants of Executive contained herein, and (iii) the
covenants contained herein have been made in order to induce Holding and the
Company to enter into this Agreement.
(d) If, at the time of enforcement of this Section 2.7, a court or
arbiter shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, 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.
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ARTICLE III
MISCELLANEOUS
3.1 EXECUTIVE'S REPRESENTATIONS. Executive hereby represents and
warrants to Holding and the Company that (i) the execution, delivery and
performance of this Agreement by Executive do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound,
(ii) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or
entity and (iii) upon the execution and delivery of this Agreement by Holding
and the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby
acknowledges and represents that he has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.
3.2 SURVIVAL. Sections 2.5, 2.6, 2.7 and 3.3 through 3.13 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.
3.3 NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally,
mailed by certified or registered mail, return receipt requested and postage
prepaid, or sent via a nationally recognized overnight courier, or sent via
facsimile to the recipient. Such notices, demands and other communications will
be sent to the address indicated below:
To the Company or Holding:
Xxx Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
To Executive:
Xxxxx X. Xxxxxxxx
00 Xxxxx Xxxx
Xxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
3.4 SEVERABILITY. Whenever possible, each provision of this
Agreement will 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
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unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
3.5 COMPLETE AGREEMENT. This Agreement and the other documents which
have been executed by Holding, the Company, and Executive (I.E., Shareholders
Agreement, Security and Pledge Agreement, Management Stock Purchase Agreement
and Non-Recourse Secured Promissory Note) embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, including the agreements between the parties dated July 14, 1997 and
January 1, 1999.
3.6 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
3.7 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, all
covenants and agreements contained in this Agreement shall bind and inure to the
benefit of and be enforceable by Holding, the Company, and their respective
successors and assigns. Except as otherwise specifically provided herein, this
Agreement, including the obligations and benefits hereunder, may not be assigned
to any party by Executive.
3.8 NO STRICT CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen hereto by the parties hereto to express
their mutual intent, and no rule of strict construction shall be applied to this
Agreement.
3.9 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
3.10 GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by and construed
in accordance with the domestic law of the State of Missouri, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Missouri or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Missouri.
3.11 REMEDIES. Each of the parties to this Agreement will be entitled
to enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement, including,
without limitation, Sections 2.5, 2.6 and 2.7 hereof, and that any party may in
its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
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and/or other injunctive relief in order to enforce or prevent any violations of
the provisions of this Agreement.
3.12 DISPUTE RESOLUTION.
(a) ARBITRATION. In the event of disputes between the parties with
respect to the terms and conditions of this Agreement, such disputes shall be
resolved by and through an arbitration proceeding to be conducted under the
auspices of the American Arbitration Association (or any like organization
successor thereto) in St. Louis, Missouri. Such arbitration proceeding shall be
conducted pursuant to the commercial arbitration rules (formal or informal) of
the American Arbitration Association in as expedited a manner as is then
permitted by such rules (the "Arbitration"). Both the foregoing agreement of the
parties to arbitrate any and all such claims, and the results, determination,
finding, judgment and/or award rendered through such Arbitration, shall be final
and binding on the parties hereto and may be specifically enforced by legal
proceedings.
(b) PROCEDURE. Such Arbitration may be initiated by written notice
from either party to the other which shall be a compulsory and binding
proceeding on each party. The Arbitration shall be conducted by an arbitrator
selected in accordance with the procedures of the American Arbitration
Association. Time is of the essence of this arbitration procedure, and the
arbitrator shall be instructed and required to render his or her decision within
thirty (30) days following completion of the Arbitration.
(c) VENUE AND JURISDICTION. Any action to compel arbitration
hereunder shall be brought in the Circuit Court of St. Louis County, State of
Missouri.
3.13 AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended and waived only with the prior written consent of Holding, Company, and
Executive.
* * * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Employment Agreement as of the date first written above.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
XXX XXXXXXXX PRESS, INC.
By:
----------------------------
Name:
Title:
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----------------------------
XXXXX X. XXXXXXXX
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