Exhibit 10.37
EMPLOYMENT AGREEMENT
AGREEMENT dated as of November 15, 1999 by and among XXXXXXXXXX GRAPHICS,
INC., a New Jersey corporation, with its principal offices located at 000 Xxxxx
Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 (the "Company"), XXXXXXXXXX GRAPHICS
INTERNATIONAL, INC. ("CGII") and XXXXXX (X.X.) XXXXXXXXXXX with an address at 0
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Employee");
R E C I T A L S:
WHEREAS, Employee, prior to this date, has been employed as the Vice
President of Finance of CGII and the Company;
WHEREAS, effective November 15, 1999, the existing Chief Financial Officer
of CGII has resigned and the Board has elected Employee as Acting Chief
Financial Officer of CGII pending a search for a permanent candidate for such
position; and
WHEREAS, should CGII receive a proposal from, or engage in discussions
with, a third person, whether solicited by CGII or unsolicited, concerning a
possible business combination with or the acquisition of a substantial portion
of the voting securities of CGII, the Board and senior management of CGII has
deemed it imperative that it and CGII be able to rely on Employee to continue to
serve as a senior financial officer of CGII, without concern that Employee might
be distracted by the personal uncertainties and risks that such a proposal or
discussions might otherwise create; and
WHEREAS, CGII desires to reward Employee for his valuable, dedicated
service to CGII and its Subsidiaries should his service be terminated under the
conditions described herein;
NOW, THEREFORE, it is agreed as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
1.1 "Affiliate" shall mean a Person which, directly or indirectly,
controls, is controlled by or is under common control with CGII or the Company,
and for purposes hereof, "control" shall mean the ownership of 20% or more of
the voting interests of the Person in question.
1.2 "Basic Salary" shall have the meaning assigned to that term in Section
5.1 of this Agreement.
1.3 "Board" shall mean the Board of Directors of CGII as duly constituted
from time to time. Any action of the Board hereunder with respect to this
Agreement shall require the approval of a majority of the whole Board of
Directors of CGII.
1.4 "Business" shall mean the business conducted by CGII or any Subsidiary,
directly or indirectly, including, but not limited to, commercial printing and
services ancillary thereto.
1.5 "Cause" shall mean any of the following:
(a) The conviction of Employee for a felony, or the willful commission by
Employee of a criminal act, that in the reasonable judgment of the Board causes
or will likely cause substantial economic damage to CGII or substantial injury
to the business reputation of CGII;
(b) The willful commission by Employee of an act of fraud in the
performance of such Employee's duties on behalf of CGII or a Subsidiary; or
(c) The continuing willful failure of Employee to perform the substantive
duties of the Employee to CGII (other than any such failure resulting from
Employee's incapacity due to physical or mental illness) after written notice
thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to Employee
by the Board.
For purposes of this subparagraph, no act, or failure to act, on Employee's
part shall be considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission was
in the best interests of CGII or a Subsidiary.
1.6 "Change of Control" shall mean:
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Act")), other than a trustee
or other fiduciary holding securities under an employee benefit plan of CGII or
a Subsidiary, which becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of CGII representing 51%
or more of the combined voting power of CGII's then outstanding securities;
(B) a majority of the Board consists of individuals other than the members
of the Board on the date hereof (the "Incumbent Directors"); provided, however,
that any person becoming a director subsequent to the date hereof whose election
or nomination for election was approved by at least two-thirds of the directors
who at the time of such election or nomination comprised the Incumbent Directors
shall for purposes of this definition be considered an Incumbent Director;
(C) the shareholders of CGII approve, or if no shareholder approval is
required or obtained, CGII completes a merger, consolidation or similar
transaction of CGII with or into any other corporation, or a binding share
exchange involving CGII's securities occurs, other than any such transaction
which would result in the voting securities of CGII outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least 75% of
the combined voting power of the voting securities of CGII or such surviving
entity outstanding immediately after such transaction; or
(D) the shareholders of CGII approve a plan of complete liquidation of CGII
or an agreement for the sale or disposition by CGII of all or substantially all
of its assets.
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1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules, regulations and interpretations issued thereunder.
1.8 "Commencement Date" shall mean the date hereof.
1.9 "Confidential Information" shall include, without limitation by reason
of specification, any information, including, without limitation, trade secrets,
operational methods, methods of doing business, technical processes, formulae,
designs and design projects, inventions, research projects, strategic plans,
possible acquisition information and other business affairs of CGII or its
Affiliates, which (i) is or are designed to be used in, or are or may be useful
in connection with, the Business of CGII, any Subsidiary or any Affiliate of any
thereof, or which, in the case of any of these entities, results from any of the
research or development activities of any such entity, or (ii) is private or
confidential in that it is not generally known or available to the public,
except as the result of unauthorized disclosure by or information supplied by
Employee, or (iii) gives CGII or a Subsidiary or any Affiliate an opportunity or
the possibility of obtaining an advantage over competitors who may not know or
use such information or who are not lawfully permitted to use the same.
1.10 "Date of Termination" shall mean the Term Date, or such earlier date
upon which this Agreement shall terminate pursuant to Section 7 hereof.
1.11 "Disability" shall mean the inability of Employee to perform
Employee's duties of employment, pursuant to the terms of this Agreement and
by-laws of CGII as hereinafter provided, because of physical or mental
disability, where such disability shall have existed for a period of more than
90 consecutive days or an aggregate of 120 days in any 365 day period. The
existence of a Disability means that Employee's mental and/or physical condition
substantially interferes with Employee's performance of his substantive duties
for the Company and/or its Subsidiaries as specified in this Agreement. The fact
of whether or not a Disability exists hereunder shall be determined by
professionally qualified medical experts selected by the Board and reasonably
acceptable to the Employee or his agent.
1.12 "Duties" shall have the meaning assigned to that term in Section 2.1
of this Agreement.
1.13 "Panel" shall have the meaning given such terms in Section 8.
1.14 "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, entity or
government (whether federal, state, county, city,
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municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
1.15 "Restricted Period" shall mean the Term and the twelve month period
thereafter in the case of a termination of employment of Employee by the Company
(including non-extension) for Cause; and the Term and the six month period
thereafter in all other cases of the termination of Employee's employment
whether voluntarily or by the Company (including non-extension).
1.16 "Subsidiary" shall mean a Person, 50% or more of the outstanding
voting interests of which is owned or controlled, directly or indirectly, by
CGII.
1.17 "Term" shall mean the period of employment of Employee under this
Agreement.
1.18 "Term Date" shall have the meaning assigned to that term in Section 3
of this Agreement.
Wherever from the context it appears appropriate, each word or phrase
stated in either the singular or the plural shall include the singular and the
plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter.
2. EMPLOYMENT AND DUTIES OF EMPLOYEE
2.1 Employment; Title; Duties. CGII and the Company hereby employ Employee,
and Employee hereby accepts appointment, as Vice President and Acting Chief
Financial Officer of CGII and the Company. The duties of Employee shall be act
as the principal financial officer of CGII and the Company and to supervise the
finance and human resources departments of the Company; to pursue the objectives
of the Business; to perform generally those responsibilities and to render
services as are necessary and desirable to protect and to advance the best
interests of CGII and the Subsidiaries (collectively, the "Duties"), acting, in
all instances, under the supervision of the President, and in accordance with
the policies set by the Board. CGII shall take such actions as are necessary to
include Employee within the coverage of the policy of directors and officers
liability insurance.
2.2 Performance of Duties. Employee shall devote substantially all his
working time to perform the Duties as an executive of CGII and for the
performance of such other executive duties as are assigned to him from
time-to-time by the President. During the Term, Employee: (i) shall comply with
all laws, statutes, ordinances, rules and regulations relating to the Business,
and (ii) shall not engage in or become employed, directly or indirectly, in a
business which competes with the Business, without the prior written consent of
the President, nor shall he act as a consultant to or provide any services to,
whether on a remunerative basis or otherwise, the commercial or professional
business of any other Person which competes with the Business of the Company,
without such written consent, which, in both instances, may be given or withheld
by the President in his absolute discretion.
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2.3 Location of Employment. The principal place of employment of Employee
shall be within a thirty mile radius of Jersey City, New Jersey or such other
location as is consented to by Employee. It is, however, distinctly understood
and agreed that Employee may be required, in connection with the performance of
his duties, to work from time to time at other locations designated by the
President or as required in connection with the Business.
3. TERM OF EMPLOYMENT
The employment of Employee pursuant to this Agreement shall commence as of
the Commencement Date and shall end three years thereafter, unless extended
pursuant to the next sentence or unless sooner terminated pursuant to Section 7
(the later of (i) the third anniversary of the Commencement Date and (ii) the
date to which Employee's period of employment has been extended, is the "Term
Date"). If Employee's employment hereunder has not previously been terminated in
accordance with Section 7 hereof, then on the second anniversary of the
Commencement Date, and on each subsequent anniversary of the Commencement Date,
the Term shall be extended for one additional year, unless the Board shall
provide written notice to Employee three months or more prior to such
anniversary date that this Agreement will not be so extended. The rights of
termination set forth in Section 7 shall be applicable during any such extended
period of employment.
4. COMPENSATION AND BENEFITS
The Company shall pay Employee, as compensation for all of the services to
be rendered by him hereunder during the Term, and in consideration of the
various restrictions imposed upon Employee during the Term and the Restricted
Period, and otherwise under this Agreement, the Basic Salary and other benefits
as provided for and determined pursuant to Sections 5 and 6, inclusive, of this
Agreement; provided, however, that no compensation shall be paid to Employee
under this Agreement for any period subsequent to the termination of employment
of Employee for any reason whatsoever, except as provided in Section 7.
5. BASIC SALARY/BONUS
5.1 Basic Salary. The Company shall pay Employee, as compensation for all
of the services to be rendered by him hereunder, a salary of $125,000 per annum
(as adjusted upward by the Board from time to time) (the "Basic Salary"),
payable in substantially equal monthly payments, less such deductions or amounts
as are required to be deducted or withheld by applicable laws or regulations,
deductions for employee contributions to welfare benefits provided by the
Company to Employee and such other deductions or amounts, if any, as are
authorized by Employee. The Basic Salary shall be prorated for employment of
less than a full calendar year. The Basic Salary may be increased from
time-to-time by the Board and, once increased, shall not thereafter be reduced.
The Basic Salary shall be reviewed at least once in every calendar year by a
committee of the Board responsible for determining compensation of senior
management of the Company, each of the members of which is a
"non-employee-director" as defined in Rule 16b-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the
"Committee"). Any increase in Basic Salary shall not serve to offset or reduce
any other obligation to Employee under this Agreement.
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5.2 Bonus. Employee will be eligible for a cash bonus (the "Bonus") for
each fiscal year in an amount determined in accordance with the Company's
then-current bonus or incentive compensation policy. The Committee in
consultation with Employee shall establish in advance of each fiscal year of the
Company during the Term goals and levels of the Bonus for such fiscal year which
shall be related to the estimated budget for the Company for such fiscal year.
5.3 Change of Control Bonus. If a Change of Control shall have occurred in
a transaction approved by the Board, Employee shall be entitled to a special
cash bonus in the amount of $150,000 (subject to any applicable payroll or other
taxes required to be withheld), if Employee shall remain in the employ of CGII,
the Company or another Subsidiary for a period of six months after the date of
the Change of Control (the "Bonus Period") or such employment shall terminate
during the Bonus Period other than for Cause or voluntarily by Employee.
6. ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES
6.1 Additional Benefits. The Company shall provide the following additional
benefits to Employee during the Term:
(i) provision of a comprehensive medical indemnity policy for Employee
and his family having terms no less favorable than the coverage made
available to other members of senior management;
(ii) such other benefits as the Board shall lawfully adopt and approve
for members of senior management generally;
(iii) three (3) weeks of paid vacation during each calendar year;
provided, however, any vacation must be approved by the President with at
least two weeks' prior notice; and
(iv) long term disability insurance coverage consistent with current
Company policy.
6.2 Reimbursement for Expenses. The Company shall pay or reimburse Employee
for all reasonable expenses actually incurred or paid by him during the Term in
the performance of his services under this Agreement, upon presentation of such
bills, expense statements, vouchers or such other supporting information as the
Board may reasonably require. In the event the Company requires Employee to
travel on business during the Term, Employee shall be reimbursed for any related
travel expenses in accordance with this Section 6.2.
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7. TERMINATION OF EMPLOYMENT
7.1 Death. If Employee dies during the Term, this Agreement shall
terminate, except that the Company shall continue to pay to Employee's spouse,
or in the absence of a surviving spouse, his estate, Employee's Basic Salary for
a period through the third full month following the date of death, pay any other
amounts which were accrued but unpaid, provide welfare benefits to his family
for the balance of the stated Term as if Employee had not died and provide for
the payment of the life insurance benefit provided for in Section 6.1.
7.2 Disability. If, during the Term, Employee has a Disability, the Company
may, at any time after Employee has a Disability, terminate Employee's
employment by written notice to him. In the event that Employee's employment is
terminated, this Agreement shall terminate except that the Company shall
continue to pay Employee's Basic Salary for a period through the third full
month following the date of the termination of his employment, pay any other
amounts which were accrued but unpaid, and provide welfare benefits to his
family until the Term Date, and pay or provide for the payment of the disability
benefit provided for in Section 6.1, until Employee reaches age 65.
7.3 Voluntary Termination. This Agreement may be terminated by Employee at
any time with or without cause upon 30 days prior written notice to the Company.
After such 30 day period, the Company shall have no further liability to make
payments hereunder except those required by law or which were accrued and unpaid
at the end of the Term.
7.4 Termination for Cause. The Company may terminate Employee's employment
hereunder for Cause at any time by written notice given to Employee by the
Board. Upon such termination Employee shall not have any right to receive any
further payments hereunder except for amounts accrued and unpaid hereunder prior
thereto and provide welfare benefits as required by law and except as provided
in Section 7.8.
7.5 Termination Without Cause. Except as provided in the next sentence, if
this Agreement is terminated by the Company without Cause, Employee shall be
entitled to a lump sum payment equal to one half of Employee's then current
Basic Salary, payable upon the Date of Termination and payment of any accrued
but unpaid amounts. If a Change of Control occurs and this Agreement is
terminated by the Company without Cause prior to the Term Date, or within a
period of two years following the Change of Control, whichever is shorter, then
Employee shall be entitled to a lump sum payment equal to two times Employee's
then current Basic Salary and anticipated Bonus based upon the criteria
established by the Committee, payable upon the Date of Termination, and payment
of any accrued but unpaid amounts, including, without limitation, any special
bonus under Section 5.3.
7.6 Notice of Termination. Any purported termination of employment by the
Company by reason of Employee's Disability or for Cause shall be communicated by
written Notice of Termination to Employee. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice given by the Company, which shall
indicate the specific basis for termination of employment and shall set forth in
reasonable detail the basis of determination of the remaining payments due to
Employee under this Agreement.
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7.7 Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date of termination of employment specified in the
Notice of Termination, as such date may be modified pursuant to the following
two sentences. If within thirty (30) days after any Notice of Termination is
given, Employee notifies the Company that a dispute exists as to the reasons
given in the Notice of Termination (a "Dispute" and the giving of such notice, a
"Notice of Dispute"), the Date of Termination shall be the date on which the
Dispute is finally determined, either by mutual written agreement of the
parties, by the Panel, or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected); provided that the Date of Termination shall be
extended by a Notice of Dispute only if such notice is given in good faith and
Employee pursues the resolution of such Dispute with reasonable diligence and
provided further that pending the resolution of any such Dispute, the Company
shall continue to pay Employee the same Basic Salary and to provide Employee
with the same or substantially comparable welfare benefits and prerequisites,
including participation in the Company's retirement plans, profit sharing plans,
to the extent then so available at the date of such determination, stock option
plans, stock award plans or stock appreciation right plans that Employee was
paid and provided to the extent that such continued participation is possible
under the general terms and provisions of such plans, programs and benefits but
in no event beyond the Term Date. Should a Dispute asserted by Employee
ultimately be determined in favor of the Company, then all sums (net of tax
withholdings by the Company from such sums) paid by the Company to Employee from
the Date of Termination specified in the Notice of Termination until final
resolution of the Dispute pursuant to this paragraph, exclusive of accrued,
unpaid amounts prior to the Date of Termination, shall be repaid promptly by
Employee to the Company, all options, rights and stock awards granted to
Employee during such period shall be canceled or returned to the Company, and no
service as an employee shall be credited to Employee for such period for pension
purposes. Employee shall not be obligated to pay to the Company the cost of
providing Employee with welfare benefits and prerequisites for such period
unless the final judgment, order or decree of a court arbitration panel or other
body resolving the Dispute determines that Employee acted in bad faith in giving
a Notice of Dispute. Should a Dispute ultimately be determined in favor of
Employee, then Employee shall be entitled to retain all sums paid to Employee
under this subparagraph pending resolution of the Dispute and shall be entitled
to receive, in addition, the payments and other benefits provided for in this
Section 7 to the extent not previously paid hereunder and the payment of
Employee's reasonable legal fees incurred as a result of such Dispute upon
submission to the Company of a detailed statement of fees from Employee's
attorneys.
8. ARBITRATION
Except as otherwise provided herein, the parties hereby agree that any
dispute regarding the rights and obligations of any party under this Agreement
or under any law governing the relationship created by this Agreement, including
without limitation Employee's challenge of a purported termination for Cause or
Disability, must be resolved pursuant to this Section 8. Within seven (7) days
of either party's written notice to the other of his or its desire to submit any
arbitrable matter as set forth herein to arbitration, the parties will meet to
attempt to amicably resolve their differences and, failing such resolution,
either or both of the parties may submit the
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matter to mandatory and binding arbitration with the CPR Institute for Dispute
Resolution ("CPR"). The issue(s) in dispute shall be settled by arbitration in
accordance with the Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, by a panel of three arbitrators (the "Panel").
The only issue(s) to be determined by the Panel will be those issues
specifically submitted to the Panel. The Panel will not extend, modify or
suspend any of the terms of this Agreement. The arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. ss.1-16, and judgment upon the award
rendered by the Panel may be entered by any court having jurisdiction thereof. A
determination of the Panel shall be by majority vote.
Promptly following receipt of the request for arbitration, CPR shall
convene the parties in person or by telephone to attempt to select the
arbitrators by agreement of the parties. If agreement is not reached, the
Company shall select one arbitrator and Employee shall select one other
arbitrator. These two arbitrators shall select a third arbitrator. If these two
arbitrators are unable to select the third arbitrator by mutual agreement, CPR
shall submit to the parties a list of not less than eleven (11) candidates. Such
list shall include a brief statement of each candidate's qualifications. Each
party shall number the candidates in order of preference, shall note any
objection they may have to any candidate, and shall deliver the list so marked
back to CPR. Any party failing without good cause to return the candidate list
so marked within ten (10) days after receipt shall be deemed to have assented to
all candidates listed thereon. CPR shall designate the arbitrator willing to
serve for whom the parties collectively have indicated the highest preference
and who does not appear to have a conflict of interest. If a tie should result
between two candidates, CPR may designate either candidate.
This agreement to arbitrate is specifically enforceable. Judgment upon any
award rendered by the Panel may be entered in any court having jurisdiction. The
decision of the Panel within the scope of the submission is final and binding on
all parties, and any right to judicial action on any matter subject to
arbitration hereunder hereby is waived (unless otherwise provided by applicable
law), except suit to enforce this arbitration award or in the event arbitration
is not available for any reason or in the event the Company shall seek equitable
relief to enforce Section 9 of this Agreement. If the rules of the CPR differ
from those of this Section 8, the provisions of this Section 8 will control. The
Company shall pay all the costs of arbitration including the fees of the
arbitrators, and the arbitrators shall award reasonable legal fees to Employee,
unless the arbitrators or a judicial forum shall finally determine that Employee
acted in bad faith.
9. CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS
9.1 Acknowledgment of Confidentiality. Employee understands and
acknowledges that he may obtain Confidential Information during the course of
his employment by the Company. Accordingly, Employee agrees that he shall not,
either during the Term or at any time within two years after the Date of
Termination, (i) use or disclose any such Confidential Information outside the
Company, its Subsidiaries and Affiliates; or (ii) except as required in the
proper performance of his services hereunder, remove or aid in the removal of
any Confidential Information or any property or material relating thereto from
the premises of CGII, the Company or any Subsidiary.
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The foregoing confidentiality provisions shall cease to be applicable to
any Confidential Information which becomes generally available to the public
(except by reason of or as a consequence of a breach by Employee of his
obligations under this Section 9).
In the event Employee is required by law or a court order to disclose any
such Confidential Information, he shall promptly notify the Company of such
requirement and provide the Company with a copy of any court order or of any law
which in his opinion requires such disclosure and, if the Company so elects, to
the extent that he is legally able, permit the Company an adequate opportunity,
at its own expense, to contest such law or court order.
9.2 Delivery of Material. Employee shall promptly, and without charge,
deliver to the Company on the termination of his employment hereunder, or at any
other time the Company may so request, all memoranda, notes, records, reports,
manuals, computer disks, videotapes, drawings, blueprints and other documents
(and all copies thereof) relating to the Business of the Company, its
Subsidiaries and its Affiliates, and all property associated therewith, which he
may then possess or have under his control.
10. NON-COMPETITION PROVISIONS
Employee agrees that he will not, during the Restricted Period, compete
directly or indirectly with the Business. The phrase "compete directly or
indirectly with the Business shall be deemed to include, without limiting the
generality thereof, (1) engaging or having a material interest, directly or
indirectly, as owner, employee, officer, director, partner, sales
representative, stockholder, capital investor, lessor, renderer of consultation
services or advise, either alone or in association with other, in the operation
of any aspect of any type of business or enterprise competitive with the
Business; (2) soliciting any of the employees of the Company or any Affiliate to
leave the employ of the Company or any Affiliate; (3) soliciting any of the
employees of the Company or any Affiliate to become employees of any other
Person; or (4) soliciting any customer of the Company or any Affiliate with
respect to the Business. Similarly, Employee shall not raid, entice or induce
any Person who on the Date of Termination is, or within one (1) year immediately
preceding the Date of Termination was, a customer of the Company or any
Affiliate, to become a customer of any other Person for products or services the
same as, or similar to, those products and services as from time to time shall
be provided by the Company or any Affiliate, and Employee shall not approach any
Person for such purpose; nor shall Employee raid, entice or induce any Person
who on the Date of Termination is, or within one year immediately preceding the
Date of Termination was, an employee of the Company or any Affiliate, to become
employed by any other Person; similarly, Employee shall not approach any such
employee for such purpose or authorize or knowingly approve the taking of such
actions by any other Person or assist any such other Person in taking any such
action.
The phrase "compete directly or indirectly with the Business" shall not be
deemed to include an ownership interest as an inactive investor, which, for
purposes of this Agreement, shall mean only the beneficial ownership of less
than five (5%) percent of the outstanding shares of any series or class of
securities of any competitor of CGII, the Company or any Subsidiary, which
securities of such series or class are publicly traded in the securities market.
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11. SURVIVAL
The provisions of Sections 7, 8, 9, 10, and 14 shall survive termination of
this Agreement and remain enforceable according to their terms.
12. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement shall
in no way affect the validity or enforceability of any other provisions hereof.
13. NOTICES
All notices, demands and requests required or permitted to be given under
the provisions of this Agreement shall be deemed duly given if made in writing
and delivered personally or mailed by postage prepaid certified or registered
mail, return receipt requested, accompanied by a second copy sent by ordinary
mail, which notices shall be addressed as follows:
If to the Company or CGII:
Xxxxxxxxxx Graphics, Inc.
000 Xxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: President
If to Employee:
Xxxxxx (X.X.) Xxxxxxxxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
By notifying the other parties in writing, given as aforesaid, any party
may from time-to-time change its address or the name of any person to whose
attention notice is to be given, or may add another person to whose attention
notice is to be given, in connection with notice to any party.
14. ASSIGNMENT AND SUCCESSORS
Neither this Agreement nor any of his rights or duties hereunder may be
assigned or delegated by Employee. This Agreement is not assignable by the
Company except to any successor in interest which takes over all or
substantially all of the business of the Company, as it is conducted at the time
of such assignment. Any corporation into or with which the Company is merged or
consolidated or which takes over all or substantially all of the business of the
Company shall be deemed to be a successor of the Company for purposes hereof.
This Agreement shall be binding upon and, except as aforesaid, shall inure to
the benefit of the parties and their respective successors and permitted
assigns.
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15. LIMITATION ON PAYMENTS
In the event that any payment or benefit received or to be received by
Employee in connection with the termination of Employee's employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with CGII, the Company, any person whose actions result in a Change in
Control or any person affiliated with CGII, the Company or such person)
(collectively with the payments and benefits hereunder, "Total Payments") would
not be deductible (in whole or part) as a result of section 280G of the Code by
the Company, an affiliate or other person making such payment or providing such
benefit, the payments and benefits hereunder shall be reduced until no portion
of the Total Payments is not deductible, or the payments and benefits hereunder
are reduced to zero. At Employee's request, such reduction may be effected by
extending the date the payment would otherwise be due by not more than five
years or by decreasing the amount of the payment or benefit otherwise due and
payable. For purposes of this limitation (i) no portion of the Total Payments
the receipt or enjoyment of which Employee shall have effectively waived in
writing prior to the date of payment shall be taken into account, (ii) no
portion of the Total Payments shall be taken into account which, in the opinion
of tax counsel selected by Employee and acceptable to the Company's independent
auditors, is not likely to constitute a "parachute payment" within the meaning
of section 280G(b)(2) of the Code, (iii) the payments and benefits hereunder
shall be reduced only to the extent necessary so that, in the opinion of the tax
counsel referred to in clause (ii), the Total Payments (other than those
referred to in clauses (i) or (ii)) in their entirety are likely to constitute
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4) of the Code or are otherwise not likely to be subject to
disallowance as deductions; and (iv) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Company's independent auditors in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.
16. ENTIRE AGREEMENT, WAIVER AND OTHER
16.1. Integration. This Agreement contains the entire agreement of the
parties hereto on its subject matter and supersedes all previous agreements
between the parties hereto, written or oral, express or implied, covering the
subject matter hereof. No representations, inducements, promises or agreements,
oral or otherwise, not embodied herein, shall be of any force or effect.
16.2. No Waiver. No waiver or modification of any of the provisions of this
Agreement shall be valid unless in writing and signed by or on behalf of the
party granting such waiver or modification. No waiver by any party of any breach
or default hereunder shall be deemed a waiver of any repetition of such breach
or default or shall be deemed a waiver of any other breach or default, nor shall
it in any way affect any of the other terms or conditions of this Agreement or
the enforceability thereof. No failure of the Company to exercise any power
given it hereunder or to insist upon strict compliance by Employee with any
obligation hereunder, and no custom or practice at variance with the terms
hereof, shall constitute a waiver of the right of the Company to demand strict
compliance with the terms hereof.
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Employee shall not have the right to sign any waiver or modification of any
provisions of this Agreement on behalf of the Company, nor shall any action
taken by Employee reduce his obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by instrument in
writing signed by all of the parties hereto after the date hereof. Neither this
Agreement nor any of the rights of any of the parties hereunder may be
terminated except as provided herein.
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17. MISCELLANEOUS
17.1 Governing Law. This Agreement shall be governed by and construed, and
the rights and obligations of the parties hereto enforced, in accordance with
the laws of the State of New Jersey.
17.2 Headings. The Section and Subsection headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17.3 Severability. The invalidity or unenforceability of any provision of
this Agreement shall in no way affect the validity or enforceability of any
other provisions hereof.
17.4 Obligations of Company. The Company's obligation to pay Employee the
compensation and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which
the Company may have against Employee or anyone else. All amounts payable by the
Company hereunder shall be paid without notice or demand. Except as expressly
provided herein, the Company waives all rights which it may now have or may
hereafter have conferred upon it, by statute or otherwise, to terminate, cancel
or rescind this Agreement in whole or in part. Except as provided in Section 7.7
herein, each and every payment made hereunder by the Company shall be final and
the Company will not seek to recover for any reason all or any part of such
payment from Employee or any person entitled thereto. Employee shall not be
required to mitigate the amount of any payment or other benefit provided for in
this Agreement by seeking other employment or otherwise.
17.5 Rights of Beneficiaries of Employee. This Agreement shall inure to the
benefit of, and be enforceable by, Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would still be payable to
Employee hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or, if there be no
such designee, to Employee's estate.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above, to be effective as of the Commencement Date.
XXXXXXXXXX GRAPHICS, INC.
By:
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: President and Chief Executive Officer
XXXXXXXXXX GRAPHICS INTERNATIONAL, INC.
By:
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: President and Chief Executive Officer
---------------------------------------------
Xxxxxx (X.X.) Xxxxxxxxxxx
