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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT made on August 11, 1998 by and between XXXXXX
GREETINGS, INC., a Delaware corporation (the "Corporation"), and XXXXX X.
X'XXXXXXX ("Executive").
WITNESSETH:
WHEREAS, the Corporation desires to assure itself of the continued
services of Executive, and Executive is willing to make his services available
to the Corporation on the terms and conditions set forth below;
WHEREAS, except as expressly set forth herein below, this Agreement
supersedes the Employment Agreement dated as of August 25, 1996, by and between
the Corporation and the Executive (the "Predecessor Agreement").
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, IT IS AGREED:
1. EMPLOYMENT. The Corporation hereby employs Executive, and Executive
hereby accepts employment with the Corporation, on the terms and conditions set
forth in this Agreement.
2. TERM. The Term of Executive's employment hereunder shall commence
as of the date hereof. Unless sooner terminated pursuant to Paragraph 6 hereof,
Executive's employment hereunder shall continue until December 31, 2002 (the
"Term"), which Term shall renew automatically from year to year thereafter
(each such year hereinafter referred to as a "Renewal Term") unless notice of
an intention not to renew is given by either party to the other at least six
(6) months before the end of the Term or any Renewal Term, in which event
Executive's employment shall cease as of the end of such Term or Renewal Term,
as applicable.
3. DUTIES. Executive shall continue to serve as, and have the duties
and responsibilities of, the Chairman, President and Chief Executive Officer of
the Corporation and will, under the direction of the Board of Directors of the
Corporation (the "Board"), devote substantially all of his working time and
effort to the performance of the duties of such offices provided, however, that
nothing herein shall prohibit Executive from participating in charitable and
other activities described in a letter to the Corporation delivered prior
hereto.
4. COMPENSATION. Executive's compensation for the services performed
under this Agreement shall be as follows:
(a) BASE SALARY. Executive shall receive a base salary of
Five Hundred Thousand ($500,000) Dollars per year (the "Base Salary"),
effective August 1, 1998 and
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payable in regular semimonthly installments, which Base Salary shall be
reviewed by the Board in August of each year beginning with 1999 for possible
increases.
(b) INCENTIVE COMPENSATION. In addition to Base Salary,
Executive shall earn incentive compensation ("Incentive Compensation") for
fiscal year 1998 and each fiscal year thereafter during the Term or any Renewal
Term of this Agreement (provided Executive has served as Chairman, President or
Chief Executive Officer for part or all of such fiscal year), to be paid on or
before each April 1 of the succeeding fiscal year, in an amount equal to up to
200% of the Base Salary in effect for such fiscal year, based upon (1) the
percentage increase in the Corporation's operating income for such fiscal year
(on a consolidated basis using generally accepted accounting principles
consistently applied) and (2) the percentage increase in the Corporation's
revenue for such fiscal year, in accordance with the terms set forth in
Appendix A attached hereto. Nothing herein shall prohibit the Board from
granting in its discretion additional Incentive Compensation to Executive.
(c) NEW STOCK OPTION. On the date hereof, Executive shall be
granted a non-qualified stock option (the "Stock Option") to purchase an
aggregate of 500,000 shares of common stock of the Corporation, par value $.01
per share (the "Common Stock"), to be issued under, and pursuant to the terms
of, the Corporation's 1991 Stock Incentive Plan (the "Stock Plan"). The Stock
Option granted hereby will have the following exercise schedule and exercise
prices:
(1) 166,667 shares of Common Stock will be
exercisable from and after the date hereof at the market price for Common
Shares as of the close of trading on the date hereof;
(2) 166,666 shares of Common Stock to vest on
April 15, 1999 and to be exercisable from and after such date at $28.00 per
share; and
(3) 166,667 shares of Common Stock to vest on
April 15, 2000 and to be exercisable from and after such date at $30.00 per
share.
The Stock Option shall expire ten (10) years from the date hereof,
subject to the other terms and conditions of the applicable Stock Option
Agreement and Stock Plan.
Notwithstanding the foregoing, all unvested portions of the Stock
Option will vest at the applicable exercise price if there is a Change in
Control (as defined in Paragraph 7 below) or the average closing price for any
period of 20 consecutive trading days equals or exceeds $35.
(d) EXISTING STOCK OPTIONS. Any and all stock options granted
to the Executive by the Corporation pursuant to Paragraph 4(c) of the
Predecessor Agreement shall continue and remain in effect in accordance with
the terms and conditions of the grants
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("Existing Stock Options"), except that the Corporation immediately shall amend
the grants of the Existing Stock Options to provide:
(1) Executive may use "mature" shares to pay part or all of
the exercise price of Existing Stock Options;
(2) Executive may transfer all or part of the Existing
Stock Options to designated family members, trusts for the benefit of family
members, or family partnerships; and
(3) For vesting and exercisability in accordance with
Paragraphs 6(a)(2), 6(b)(2), 6(d)(2), 6(e)(2) and 6(f)(2).
5. FRINGE BENEFITS.
(a) VACATION. Executive shall be entitled to four (4) weeks of
paid vacation annually.
(b) CLUB MEMBERSHIPS. The Corporation shall pay all of
Executive's dues (including initiation dues) and membership assessments for
such club or clubs which membership(s) are determined by the Board to be useful
in connection with Executive's duties on behalf of the Corporation. The
Corporation also shall reimburse Executive for all expenses incurred by
Executive at such clubs on behalf of the Corporation.
(c) REIMBURSEMENT FOR REASONABLE BUSINESS EXPENSES. The
Corporation shall reimburse Executive for reasonable expenses incurred by him
in connection with the performance of his duties pursuant to this Agreement,
including, but not limited to, travel expenses, expenses in connection with
seminars, professional conventions or similar professional functions and other
reasonable business expenses.
(d) AUTOMOBILE. The Corporation shall provide Executive with full
use of a luxury automobile (e.g. Cadillac, STS, or motor vehicle of comparable
cost), owned or leased by the Corporation, for use in carrying out his duties
for the Corporation and otherwise. The Corporation agrees to provide adequate
liability and collision insurance for the automobile, protecting the Executive
and the Corporation, and to pay all lease, maintenance and operating costs
appropriate or necessary to maintain and operate such automobile in prime
condition.
(e) GENERALLY. Executive shall be eligible to participate in such
health, dental, welfare and other fringe benefits as are currently available
(and as may be made available in the future) to other senior executive-level
employees of the Corporation.
(f) LIFE AND DISABILITY INSURANCE. The Corporation shall provide
Executive with, and shall pay when due all premiums on and otherwise keep in
force, (1) split-dollar
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life insurance with a face amount of $2.5 million, and (2) disability insurance
that provides after-tax benefits to Executive equaling 60% of his Base Salary
(determined at the time of disability) per year up to age 65.
(g) SUPPLEMENTAL RETIREMENT BENEFITS. The Executive shall
continue to participate in the Corporation's make-up pension plan and SERP
(collectively, the "Retirement Plans"). The Corporation shall immediately take
such actions and execute such documents as are necessary to ensure that
Executive is provided under the Retirement Plans with (1) additional credit as
of the date hereof for five years of service for all purposes under the
Retirement Plans, (2) credit for one additional year of service for all
purposes under the Retirement Plans (up to a maximum of five years additional
deemed service) for each year of actual service after December 31, 1997, and
(3) vesting in and entitlement to receive early retirement benefits. In the
event the Corporation is unable to provide any of the foregoing, or any of the
benefits provided for in Paragraphs 6(a)(5), 6(b)(5), 6(d)(6), 6(e)(6) or
6(f)(4), through the Retirement Plans, the Corporation shall provide Executive
with equivalent (in all material respects) benefits in a form acceptable to
Executive.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR DISABILITY. If during the Term or any Renewal
Term, Executive shall be unable to perform his duties hereunder on account of
illness or other incapacity, and such illness or other incapacity shall
continue for a period of more than six (6) months in any twelve-month period,
the Corporation shall thereafter have the right to terminate Executive's
employment prior to conclusion of the Term or Renewal Term, provided that such
illness or incapacity remains in effect at the time of termination. In the
event of termination of employment under this Paragraph 6(a), all compensation
and other benefits accruing after such date of termination pursuant to
Paragraphs 4(a), 4(b) and 5(a)-(g) of this Agreement shall terminate on the
date of employment termination, and the following payments and benefits instead
shall be provided:
(1) Incentive Compensation under Paragraph 4(b) with
respect to the fiscal year immediately preceding the year in which employment
termination occurs shall be paid Executive or his designee if it has not been
paid by the time of termination and a pro-rata portion (based on the number of
days of employment in the year of termination) of the amount of Incentive
Compensation payable with respect to the fiscal year in which employment
termination occurs;
(2) The Stock Option, and Existing Stock Options and other
equity grants immediately shall become fully vested and fully exercisable.
(3) Semi-monthly installments of "Current Compensation"
(defined as the sum of Executive's then current Base Salary plus the average of
the Incentive Compensation he earned for the two consecutive fiscal years
immediately preceding the fiscal year in which his employment terminates;
provided that his 1997 Incentive Compensation is
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deemed to be $500,000 for this purpose) shall be continued for a period at
least one (1) year after termination but not beyond the Term or Renewal Term;
(4) Medical, dental and health coverage to the extent
provided under Paragraph 5(e) shall be continued (at the Corporation's expense)
for a period of one (1) year after termination; and
(5) One (1) additional year of credit under the Retirement
Plans shall be granted Executive.
(b) TERMINATION FOR DEATH. In the event of Executive's death
during the Term or any Renewal Term, all compensation and other benefits
accruing after such date of termination pursuant to Paragraphs 4(a), 4(b) and
5(a)-(g) of this Agreement shall terminate on the date of death, and the
following payments and benefits instead shall be provided:
(1) Incentive Compensation under Paragraph 4(b) with
respect to the fiscal year immediately preceding the year in which death occurs
shall be paid Executive's estate if it has not been paid by the time of
termination and a pro-rata portion (based on the number of days of employment
in the year of termination) of the amount of Incentive Compensation payable
with respect to the fiscal year in which employment termination occurs;
(2) The Stock Option, Existing Stock Options and other
equity grants immediately shall become fully vested and fully exercisable;
(3) Semi-monthly installments of Current Compensation shall
be paid to Executive's wife or, if deceased, to his estate for a period of one
(1) year after death but not beyond the Term or Renewal Term;
(4) Medical, dental and health coverage to the extent
provided under Paragraph 5(e) shall be continued (at the Corporation's expense)
for Executive's wife and family, if living, for a period equal to one (1) year;
and
(5) One (1) additional year of service shall be granted
Executive for all purposes under the Retirement Plans.
(c) TERMINATION FOR JUST CAUSE. During the Term or any Renewal
Term, the Corporation's Board of Directors shall be entitled to terminate
Executive's employment for Just Cause upon written notice to Executive, upon a
two-thirds vote of the Directors at a meeting called and held for that purpose
and of which the Executive has been given prior notice and at which he has been
given an opportunity to participate with counsel of his choice. For the
purposes of this Agreement, "Just Cause" shall mean (1) the Executive engages
in an intentional act of fraud, embezzlement, theft or other material violation
of law involving dishonesty in carrying out his duties under this Agreement,
resulting, in any case,
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in material harm to the Corporation, unless the Executive believed in good
faith that such conduct was in the bests interests of the Corporation and such
conduct in fact did not constitute a felony, (2) conviction of a felony, or (3)
any material breach by the Executive of any of his material agreements or
covenants with the Corporation set forth in this Agreement that results in
material harm to the Corporation and that is not cured by the Executive within
30 days after written notice from the Board of Directors specifying the breach
and requesting a cure. Failure to meet performance standards or objectives of
the Corporation shall not constitute Just Cause for purposes hereof. In the
event of termination of employment under this Paragraph 6(c), all compensation
and other benefits accruing after such date of termination pursuant to
Paragraphs 4(a), 4(b) and 5(a) -(g) of this Agreement shall terminate on the
date of employment termination, and the following payments and benefits instead
shall be provided:
(1) Incentive Compensation under Paragraph 4(b) with
respect to the fiscal year immediately preceding the year in which employment
termination occurs shall be paid Executive or his designee if it has not been
paid by the time of termination, and Executive shall receive no Incentive
Compensation with respect to the year of termination; and
(2) Outstanding portions of the Stock Option and the
Existing Stock Options which are exercisable at the time of Executive's
termination shall be exercisable in accordance with the terms of the applicable
Stock Option agreements and Stock Plans.
(d) TERMINATION WITHOUT JUST CAUSE. During the Term or any
Renewal Term, the Corporation shall be entitled to terminate Executive's
employment upon written notice to Executive for any reason and without meeting
the standards of Just Cause set forth in Paragraph 6(c) above. In the event of
termination of employment under this Paragraph 6(d), all compensation and other
benefits accruing after such date of termination pursuant to Paragraphs 4(a),
4(b) and 5(a)-(g) of this Agreement shall terminate on the date of employment
termination, and the following payments and benefits instead shall be provided:
(1) Incentive Compensation under Paragraph 4(b) with
respect to the fiscal year immediately preceding the year in which employment
termination occurs shall be paid Executive or his designee if it has not been
paid by the time of termination;
(2) The Stock Option, Existing Stock Options and other
equity grants immediately shall become fully vested and fully exercisable;
(3) Executive as and for severance pay shall be paid (i) on
the date of such termination, three (3) times Executive's Current Compensation,
plus (ii) a pro rata portion (based on the number of days of employment in the
year of termination) of
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the amount of Incentive Compensation paid or payable with respect to the fiscal
year in which employment termination occurs, payable at the time provided by
Paragraph 4(b);
(4) Medical, dental and health coverage to the extent
provided under Paragraph 5(e) shall be continued (at the Corporation's expense)
for a period of three (3) years after termination;
(5) Life insurance coverage to the extent provided under
Paragraph 5(f) shall be continued (at the Corporation's expense) for a period
of three (3) years after termination; and
(6) Three (3) additional years of service shall be granted
Executive for all purposes under the Retirement Plans.
(e) TERMINATION BY EXECUTIVE FOR GOOD REASON. During the Term or
any Renewal Term, the Executive shall be entitled to terminate his employment
upon written notice to the Corporation for Good Reason. For purposes of this
Paragraph 6(e), "Good Reason" shall mean a reduction in Executive's titles as
President, Chief Executive Officer and Chairman of the Board of Directors; a
material reduction in Executive's duties or responsibilities hereunder; a
Change in Control as defined in Paragraph 7; the relocation of the
Corporation's principal executive offices to a location more than 25 miles from
Cincinnati, Ohio; or the Corporation's material breach of any of the
Corporation's material agreements or covenants set forth in this Agreement,
which breach shall not have been remedied or discontinued within 30 days after
written notice by Executive specifying such breach to the Corporation. In the
event of termination of employment under this Paragraph 6(e), all compensation
and other benefits accruing after such date of termination pursuant to
Paragraphs 4(a), 4(b) and 5(a) - (g) of this Agreement shall terminate on the
date of employment termination, and the following payments and benefits instead
shall be provided:
(1) Incentive Compensation under Paragraph 4(b) with
respect to the fiscal year immediately preceding the year in which employment
termination occurs shall be paid Executive or his designee if it has not been
paid by the time of termination;
(2) The Stock Option, Existing Stock Options and other
equity grants immediately shall become fully vested and fully exercisable;
(3) Executive as and for severance pay shall be paid (i) on
the date of such termination, three (3) times Executive's Current Compensation
plus (ii) a pro rata portion (based on the number of days of employment in the
year of termination) of the amount of Incentive Compensation paid or payable
with respect to the fiscal year in which employment termination occurs, payable
at the time provided by Paragraph 4(b);
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(4) Medical, dental and health coverage to the extent
provided under Paragraph 5(e) shall be continued (at the Corporation's expense)
for a period of three (3) years after termination;
(5) Life insurance coverage to the extent provided under
Paragraph 5(f) shall be continued (at the Corporation's expense) for a period
of three (3) years after termination; and
(6) Three (3) additional years of credit under the
Retirement Plans under Paragraph 5(g) shall be granted Executive.
(f) FAILURE TO RENEW EMPLOYMENT AGREEMENT. In the event this
Employment Agreement is not renewed in accordance with the terms of Paragraph 2
hereof all compensation and other benefits accruing after such date of
termination pursuant to Paragraphs 4(a), 4(b) and 5(a)-(g) of this Agreement
shall terminate on the date employment ceases, and the following payments and
benefits instead shall be provided:
(1) Incentive Compensation under Paragraph 4(b) with
respect to the fiscal year in which the notice of non-renewal is given shall be
paid Executive or his designee in accordance with the provisions of Paragraph
4(b);
(2) The Stock Option, Existing Stock Options and other
equity grants immediately shall become fully vested and fully exercisable;
(3) In the event the failure to renew is a result of the
Corporation giving Executive notice of non-renewal under Paragraph 2, Executive
or his designee will be paid an amount equal to semi-monthly installments of
Current Compensation (payable two (2) business days after the date employment
ceases) and medical, dental and health coverage, to the extent provided under
Paragraph 5(e), shall be continued (at the Corporation's expense) for a period
of one (1) year after the date employment ceases; and
(4) One additional year of service shall be granted
Executive for all purposes under the Retirement Plans.
7. CHANGE OF CONTROL.
(a) DEFINITION. A Change in Control as used herein shall be
deemed to have occurred if the conditions set forth in any one of the following
subparagraphs shall have been satisfied:
(1) Any Person is or becomes the beneficial owner
("Beneficial Owner"), as defined in Rule 13d-3 of the Securities Exchange Act
of 1934, as amended from time to time ("Exchange Act"), directly or indirectly,
of securities of the Corporation representing 30% or more of the combined
voting power of the Corporation's
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then outstanding securities, except that this Paragraph 7(a)(1) shall apply to
Prudential only if it is or becomes the Beneficial Owner of securities of the
Corporation representing 50% or more of the combined voting power of the
Corporation's then outstanding securities; or
(2) If any action relating to termination is taken by the
Corporation pursuant to the request or direction of any Person who by
agreement, whether actual, implied or otherwise, will become a Beneficial Owner
with ownership as described in (1) above, or pursuant to the request or
direction of any Person who requests or directs such action as a condition to
becoming a Beneficial Owner with ownership as described in (1) above, then a
Change in Control shall be deemed to have occurred with respect to such action
and to have preceded such action; or
(3) During any period of two consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an agreement
with the Corporation, to effect a transaction described in clause (1), (4) or
(5) of this definition) whose election by the Board or nomination for election
by the Corporation's stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board; or
(4) The stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than (a) a
merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding securities prior to such
merger or consolidation under an employee benefit plan of the Corporation at
least 50% of the combined voting power of the voting securities of the
Corporation or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of the Corporation (or
similar transaction) in which no Person acquires more than 50% of the combined
voting power of the Corporation's then outstanding securities; or
(5) The stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all the Corporation's
assets.
As used in this Paragraph, "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; however, a Person shall not include (i) the Corporation or any
of its subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation or any of its subsidiaries, which
held stock of the Corporation prior to the Change in Control, (iii) an
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underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, both
immediately before and immediately after the Change of Control event, by the
stockholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
(b) In the event Executive voluntarily terminates his employment
for Good Reason within 60 days following a Change in Control or the Company
terminates the Executive's employment pursuant to Paragraph 6(d) or 6(f) within
one (1) year following a Change in Control, he shall receive the payments and
benefits set forth in Paragraph 6(d), (e), or (f) above, as applicable. In the
event that such payments and benefits result in the Executive incurring the tax
(the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986
(the "Code") on "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code (the "Parachute Amount"), the Corporation will pay to
Executive an amount (the "Gross Up Payment") such that the net amount retained
by Executive, after deduction of any Excise Tax on the excess parachute payment
and any federal, state and local taxes (together with penalties and interest)
and Excise Tax upon the payment provided for by this Paragraph 7(b), will be
equal to the Parachute Amount, subject to the following provisions:
(1) For purposes of determining the amount of the Gross Up
Payment, Executive will be deemed to pay federal income taxes at the highest
marginal rate of federal taxation in the calendar year in which the Gross Up
Payment is to be made and state and local income taxes at the highest marginal
rates of taxation in the state and locality of Executive's residence on the
date of Executive's Termination, net of the maximum reduction in federal income
taxes that could be obtained from deduction of such state and local taxes.
(2) The determination of whether the Excise Tax is payable
and the amount thereof will be based upon the opinion of tax counsel selected
by Executive and approved by the Corporation, which approval will not be
unreasonably withheld. The costs of obtaining the opinion of tax counsel shall
be borne by the Corporation. If such determination is not finally accepted by
the Internal Revenue Service (or state and local taxing authorities), then
appropriate adjustments to the Excise Tax will be computed and additional Gross
Up Payments will be made in the manner provided by this Paragraph 7(b).
(3) The Corporation will pay the estimated amount of the
Gross Up Payment in cash to Executive concurrent with Employee's Termination.
Executive and the Corporation agree to reasonably cooperate in the determination
of the actual amount of the Gross Up Payment. Further, Executive and the
Corporation agree to make such adjustments to the estimated amount of the Gross
Up Payment as may be necessary to equal the actual amount of the Gross Up
Payment, which in the case of Executive will refer to refunds of prior
overpayments and in the case of the Corporation will refer to makeup of prior
underpayments.
(4) The amount of Gross Up Payment paid by the Corporation
shall not exceed $5,000,000.
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8. NONCOMPETITION. The Corporation and Executive agree that the
Corporation's customer contacts and relations are established and maintained at
great expense and that Executive by virtue of employment under this Agreement,
will have unique and extensive exposure to the Corporation's customers and that
he will be able to establish a unique relationship with those customers and the
opportunity, both during and after employment, to unfairly compete with the
Corporation (which term, for purposes of this Paragraph 8, shall include the
Corporation, or any affiliate or subsidiary of the Corporation which provides
similar products and services). Therefore, Executive and the Corporation agree
as follows:
(a) DURING TERM OF EMPLOYMENT. During the Term or any Renewal
Term of his employment, Executive agrees that he shall not, directly or
indirectly, either individually or as an employee, agent, partner, shareholder,
consultant or in any other capacity participate in, engage in or have an
ownership interest in any business that competes with the Corporation's
Business. The "Corporation's Business" shall mean the business of the
Corporation and its subsidiaries of selling greeting cards and gift wrapping.
The ownership of an interest constituting not more than two (2%) percent of the
outstanding debt or equity in a corporation the shares of which are traded on a
recognized stock exchange or trade in the over-the-counter market, even though
that corporation may be a competitor of the Corporation, shall not be deemed
financial participation in a competitor.
(b) UPON TERMINATION OF EMPLOYMENT. Executive agrees that,
for a period of one (1) year after the termination of his employment with the
Corporation, he will not, directly or indirectly, individually or as an
employee, agent, partner, shareholder, consultant or in any other capacity,
canvass, contact, solicit or accept on behalf of himself or any other
corporation, any customers of the Corporation, for the purpose of providing
services, products or business competitive with those then being provided by
the Corporation nor shall Executive during said one (1) year period solicit or
otherwise induce any then employee of the Corporation to leave his or her
employment with the Corporation.
9. CONFIDENTIAL INFORMATION. During the Term of this Agreement or any
renewal term and at all times subsequent thereto, Executive shall keep secret
and shall not exploit or disclose or make accessible to any person or entity,
except in furtherance of the business of the Corporation, and except as may be
required by law or legal process, any confidential business information of any
type relating to the business of the Corporation that was acquired or developed
by either the Corporation or any of its subsidiaries or affiliates, or
Executive, prior to or during the Term or renewal term. In addition, the term
"confidential business information" shall not include information which (i) is
or becomes generally available to the public other than as a result of a
disclosure by Executive; or (ii) was available to Executive prior to any
employment by the Corporation.
10. RELIEF. Executive acknowledges that the provisions of Paragraphs 8
and 9 of this Agreement are reasonable and necessary for the protection of the
Corporation and that the Corporation will be irreparably damaged if such
covenants are not specifically enforced. Accordingly, it is agreed that the
Corporation will be entitled to injunctive relief for the
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purpose of restraining Executive from violating such covenants (and no bond or
other security shall be required in connection therewith), in addition to any
other relief to which the Corporation may be entitled.
11. SALE, CONSOLIDATION OR MERGER. In the event of a sale of the stock
of the Corporation, or consolidation or merger of the Corporation with or into
another corporation or entity, or the sale of substantially all of the
operating assets of the Corporation to another corporation, entity or
individual, the Corporation's successor-in-interest shall be deemed to have
assumed all liabilities of the Corporation under this Agreement but the
Corporation shall not be relieved of any of its obligations hereunder.
12. WAIVER. The failure of any party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such terms, covenant or condition.
13. NOTICES. Any notice to be given hereunder shall be deemed
sufficient if addressed in writing, and delivered by registered or certified
mail or delivered personally, in the case of the Corporation, to its principal
business office with a copy to Xxxx, Xxxxxxxxxx & Xxxxxxxxx, 1800 Star Bank
Center, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000-0000, Attention: Xxxxxxx X.
Xxxxxxxx, Esq., and in the case of Executive, to his address appearing on the
records of the Corporation or to such other addresses as he may designate in
writing to the Corporation with a copy to Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, P.C.
14. SEVERABILITY. In the event that any provision of this Agreement
shall be held to be invalid or unenforceable for any reason whatsoever, it is
agreed such invalidity or unenforceability shall not affect any other provision
of this Agreement, the remaining covenants, restrictions and provisions hereof
shall remain in full force and effect and any court of competent jurisdiction
may so modify the objectionable provision as to make it valid, reasonable and
enforceable.
15. AMENDMENT. This Agreement may be amended only by an agreement in
writing signed by the parties hereto.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties with respect to Executive's employment by the Corporation and
supersedes the Predecessor Employment Agreement (except as provided in
Paragraph 4(d) hereinabove).
17. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Ohio.
18. BENEFIT. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by and against the Corporation, its
successors and assigns, and
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Executive, his heirs, beneficiaries and legal representatives. It is agreed
that the rights and obligations of Executive may not be delegated or assigned
except as specifically set forth in this Agreement.
19. ATTORNEYS' FEES. Executive's reasonable attorneys' fees incurred
in connection with the negotiation of the terms of this Agreement shall be paid
by the Corporation.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the day, month and year first above written.
XXXXXX GREETINGS, INC.
August 11, 1998 By:/s/ C. Xxxxxxx Xxxxxxxxxx
--------------------- -------------------------------------
Date Its:
-----------------------------
August 11, 1998 /s/ Xxxxx X. X'Xxxxxxx
--------------------- ----------------------------------------
Date Xxxxx X. X'Xxxxxxx
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Appendix A
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Performance Performance Performance
Measure Weight Targets(1) Bonus
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1. Increase in operating 50% Minimum: 5% 50% of Base Pay
income (2) Target: 10% 75% of Base Pay
Maximum: 15% 100% of Base
Pay
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2. Increase in revenue (2,3) 50% Minimum: 5% 50% of Base Pay
Target: 10% 75% of Base Pay
Maximum: 15% 100% of Base
Pay
-------------------------------------------------------------------------------------
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1 If the performance falls between the targets shown, the amount of
bonus percentage shall be determined by linear interpolation.
2 Based on increase over the base period. The base period shall be the
average of the two fiscal years preceding the year in respect of which
performance is being measured. Operating income shall be adjusted for
acquisitions, divestitures and other extraordinary items.
3 No award with respect to a year will be due and payable for an
increase in revenue unless the increase in operating income with respect to such
a year as compared to the base period shall be at least 5%.
