EXHIBIT 10.10
EXECUTION COPY
KEY EMPLOYEES I
RETENTION AND SEVERANCE AGREEMENT
[BACON]
AGREEMENT made as of August 16, 1999 between World Color Press, Inc., a
Delaware corporation (the "Company"), with offices at 000 Xxxxxxxxxx Xxxx,
Xxxxxxxxx, XX 00000, and the employee whose name is set forth on the signature
page hereof (the "Employee").
WHEREAS, the Employee is employed by the Company or by one of its
wholly-owned consolidated subsidiaries;
WHEREAS, through a wholly-owned subsidiary, Quebecor Printing Inc. (the
"Parent") intends to acquire the Company by two-step transaction, and the
consummation of the first step tender offer shall be referred to as the
"Effective Date" of this Agreement; PROVIDED, HOWEVEr that in the event the
transaction is converted to a one-step merger, the Change in Control and
therefore the Effective Date hereof will occur upon the effective date of such
merger;
WHEREAS, the Company wishes to encourage and provide incentive to the
Employee to remain with and devote full time and attention to the business
affairs of the Company and wishes to provide income protection to the Employee
following the Effective Date;
NOW, THEREFORE, in consideration of the mutual agreement and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. DEFINITIONS.
(a) "CAUSE" shall mean the Executive's (i) conviction or
guilty plea or plea of nolo contendere of a felony involving fraud or
dishonesty; (ii) theft or embezzlement of property from Parent or the Company;
or (iii) willful and continued refusal by the Executive substantially to perform
the duties of his or her position (other than any such failure resulting from
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the Executive's issuance of a notice of termination
for "Good Reason" (as defined herein)), within a reasonable period of time after
receipt of written notice from the Company specifying the manner in which the
Company believes the Executive is not substantially performing the duties of his
or her position. For this definition, no act or failure to act shall be deemed
willful unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's act, or failure to act was in
the best interests of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "DATE OF TERMINATION" shall mean fifteen days following a
party's receipt of the Notice of Termination or the date of death.
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(d) The Employee shall have "GOOD REASON" to terminate
employment if (i) the Employee's level of compensation in effect immediately
prior to or after the Effective Date is reduced, or level of benefits in effect
immediately prior to or after the Effective Date is reduced in any material
respect; (ii) any purchaser, assign, surviving corporation, or successor of
Parent or the Company or their respective businesses or assets (whether by
acquisition, merger, liquidation, consolidation, reorganization, sale or
transfer of assets of business or otherwise) fails or refuses to expressly
assume in writing this Agreement and all of the duties and obligations of the
Company hereunder pursuant to Paragraph 12 hereof; (iii) Parent or the Company
fails to pay any amounts due to the Employee; or (iv) the Company breaches any
of the provisions of this Agreement.
(e) "NOTICE OF TERMINATION" During the term of this Agreement,
any purported termination of the Employee's employment (other than by reason of
death) shall be communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Paragraph 13 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstance claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated.
(f) "PERMANENT DISABILITY" shall mean the Employee is unable
to engage in the activities required by the Employee's job by reason of any
medically determined physical or mental impairment for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period.
(g) "TERMINATION OF EMPLOYMENT" shall mean the termination of
the Employee's employment with Parent and the Company for any reason.
2. TERM. The initial term of this Agreement shall be for the period
commencing on the Effective Date, if and only if such Effective Date occurs, and
ending on the fifth anniversary thereafter. The term shall be automatically
extended by one additional day for each day beyond the fifth anniversary of the
date of this Agreement that the Executive remains employed by Parent or the
Company until such time as Parent or the Company (as applicable) elects to cease
such extension by giving written notice of such to the Executive. The Agreement
shall thus terminate on the second anniversary of the effective date of such
notice.
3. RETENTION BONUSES. The Employee shall be entitled to a bonus (the
"Retention Bonus") equal to a cash payment equal to the amount set forth on the
signature page hereof, which shall be paid on the first anniversary of the
Effective Date if the Employee remains employed by the Company or its
affiliates.
4. SEVERANCE BENEFITS. (a) The Employee shall be entitled to severance
benefits if, during the one-year period commencing on the Effective Date, the
Employee has a Termination of Employment initiated (i) by Parent or the Company
without Cause or (ii) by the Employee for Good Reason. Such severance benefits
shall include (i) a cash payment, which
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shall be payable in one lump sum as soon as reasonably practicable after the
Date of Termination, but in no event more than fourteen days thereafter, equal
to the unpaid balance, if any, of the Retention Bonus; and (ii) continuation of
coverage under and participation in employee welfare and fringe benefit plans or
programs that the Employee (or any beneficiary) is covered under or
participating in immediately prior to Notice of Termination (without giving
effect to any reduction in such benefits which constitutes Good Reason) (or, if
higher, immediately prior to the Effective Date) (or substantially equivalent
plans or programs on a benefit by benefit basis) until the earlier of (x) the
one-year anniversary of the Date of Termination and (y) the date on which the
Employee becomes re-employed and receives comparable benefits under welfare and
fringe benefit plans of a successor employer; PROVIDED, HOWEVER, that in the
event that the Employee is party to an employment and/or noncompete agreement
with the Company or any of its affiliates and such agreement provides severance
benefits upon termination without Cause (and such provision is applicable), then
the Employee shall be entitled to severance benefits under whichever agreement
provides greater severance benefits, and no severance shall be paid under the
other agreement.
(b) TERMINATION UPON DEATH OR DISABILITY. The Employee (or his
or her representative, if applicable) shall be entitled to the following
severance benefits if, during the one year period commencing on the Effective
Date, the Employee has a Termination of Employment due to death or Permanent
Disability: (i) a cash payment, which shall be payable in one lump sum as soon
as reasonably practicable after the Date of Termination, but in no event more
than fourteen days thereafter, equal to the unpaid balance, if any, of the
Retention Bonus; and (ii) continuation of coverage under and participation in
employee welfare and fringe benefit plans or programs that the Employee (or any
beneficiary) is covered under or participating in immediately prior to Notice of
Termination (or, if higher, immediately prior to the Effective Date) (or
substantially equivalent plans or programs on a benefit by benefit basis) until
the earlier of (x) the one-year anniversary of the Date of Termination and (y)
the date on which the Employee becomes re-employed and receives comparable
benefits under this Agreement.
(c) LEGAL AND ACCOUNTING FEES AND EXPENSES. The Company also
shall pay to the Executive all legal and accounting fees and expenses incurred
by the Executive as a result of a termination which entitles the Executive to
the severance benefits hereunder (including all such fees and expenses, if any,
incurred in disputing any such termination or in seeking in good faith to obtain
or enforce any benefit or right provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment of benefit provided by the Company).
Such payments shall be made within five business days after delivery of the
Executive's written requests for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may require.
5. PAYMENTS OTHER THAN SEVERANCE. Subject to Paragraph 8 herein, upon
any Termination of Employment, whether or not the severance benefits outlined in
Paragraph 4 above are payable, the Employee shall also be entitled to all
compensation and other amounts accrued, due and owing to Employee from Parent or
the Company or under any employee benefit plan of Parent or the Company, as of
the Date of Termination.
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6. GOLDEN PARACHUTE GROSS-UP. If, in the written opinion of a
nationally recognized accounting firm, selected by the Company and reasonably
acceptable to the Executive for this purpose (at the Company's expense), or if
so alleged by the Internal Revenue Service ("IRS"), the aggregate of the benefit
payments and provisions under this Agreement and any other arrangement between
the Executive and Parent or the Company (the "Payments") would cause the payment
or provision of one or more of such benefits to constitute an "excess parachute
payment" as defined in Section 28OG(b) of the Code, then the Company will pay to
the Executive an additional amount in cash (the "Gross-Up Payment") equal to the
amount necessary to cause the net amount retained by the Executive, after
deduction of any (i) excise tax on the Payments, (ii) federal, state or local
income tax on the Gross-Up Payment, (iii) excise tax on the Gross-Up Payment and
(iv) any penalty and interest related to the Payments, to be equal to the
aggregate remuneration the Executive would have received, excluding such
Gross-Up Payment (net of all federal, state and local excise and income taxes),
as if Sections 28OG and 4999 of the Code (and any successor provisions thereto)
had not been enacted into law. The Gross-Up Payment provided for in this
Paragraph shall be made within ten days after the termination of Executive's
employment or the date on which any Payment is made that is reasonably likely to
constitute an "excess parachute payment"; PROVIDED, HOWEVER, that if the amount
of the Gross-Up Payment cannot be finally determined at the time, the Company
shall pay to Executive an estimate as determined in good faith by the Company of
such payments (together with interest at the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but
in no event after the earlier of (i) the date any related withholding taxes are
due or (ii) the thirtieth day after the date of termination or the date on which
any Payment is made that is reasonably likely to constitute an "excess parachute
payment."
The Company agrees to reimburse the Executive for reasonable fees and
expenses (including reasonable attorneys and accountants fees and expenses) in
connection with any audit or assessment by the IRS if a claim ("Claim") arises
out of, or results from the treatment or characterization by the IRS of any
Payments made by Parent or the Company and for the cost of preparing the
Executive's income tax returns for the year in which any Payment by Parent or
the Company may be characterized as an excess parachute payment. The Executive
shall notify the Company in writing of any such Claim as soon as practicable,
but in no event later than ten business days after the Executive is informed of
such Claim and shall cooperate with the Company in good faith to effectively
contest the Claim. The Company shall, at its expense, control all proceedings in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such Claim and the Executive agrees to cooperate
in the prosecution of such contest in such manner as the Company shall
reasonably determine, subject to the Company's obligations hereunder; PROVIDED,
HOWEVER, that no final resolution of such claim may be made by the Company
without the Executive's consent if such resolution could adversely affect the
Executive. Notwithstanding the foregoing, if the Company forgoes further
prosecution of such contest, the Executive may elect to continue such
prosecution and the Company shall cooperate with the Executive and shall be
liable for the fees and expenses in connection with such further prosecution.
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7. EMPLOYMENT AT-WILL. Notwithstanding anything to the contrary
contained herein, the Employee's employment with the Company is not for any
specified term and may be terminated by the Employee or by the Company at any
time, for any reason, with or without cause, without liability except with
respect to the severance benefits provided hereunder or as required by law or
any other contract or employee benefit plan or practice.
8. WAIVER OF OTHER SEVERANCE BENEFITS. Subject to the proviso in
Paragraph 4(a) herein, the benefits payable pursuant to this Agreement are in
lieu of any other severance benefits which may otherwise be payable to the
Employee upon termination within one year following a change in control pursuant
to agreement, policy or practice, except those benefits which are to be made
available to the Employee as required by applicable law.
9. DISPUTE. All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the Board of Directors of the
Company and shall be in writing. Any denial by the Board of Directors of the
Company of a claim for benefits under this Agreement shall be delivered to the
Executive in writing and shall set forth the specific reasons for the denial and
the specific provisions of this Agreement relied upon. Any dispute or
controversy arising under, out of, in connection with or in relation to this
Agreement shall, at the election and upon written demand of either party, be
finally determined and settled by binding arbitration in the town of Greenwich,
CT, using a mutually agreeable single arbitrator, in accordance with the Labor
Arbitration rules and procedures of the American Arbitration Association, and
judgment upon the award may be entered in any court having jurisdiction thereof.
The arbitrator shall have the power to order specific performance, mandamus, or
other appropriate legal or equitable relief to enforce the provisions of this
Agreement. The Company shall pay all costs of the arbitration and all reasonable
attorney's and accountant's fees and expenses of the Executive in connection
therewith.
10. NO SET-OFF. There shall be no right of set-off or counterclaim in
respect of any claim, debt, or obligation against any payment to or benefit for
the Employee provided for in this Agreement.
11. NO MITIGATION OBLIGATION. The parties hereto expressly agree that
the payment of the benefits by the Company to the Executive in accordance with
the terms of this Agreement will be liquidated damages, and, except with respect
to reduction of employee welfare and fringe benefits but only to the extent
specifically provided for in Paragraph 4(a), that the Executive shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor shall any profits, income, earnings
or other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Executive hereunder or
otherwise.
12. SUCCESSORS: BINDING AGREEMENT.
(a) This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company or by any merger or consolidation where
the Company is not the surviving corporation, or upon any transfer of all or
substantially all of the Company's
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assets, or any other change in control. The Company shall require any purchaser,
assign, surviving corporation, or successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
the form and substance satisfactory to the Employee, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent the
Company would be required to perform if no such succession had taken place. This
Agreement shall be binding upon and inure to the benefit of the Company and any
purchaser, assign, surviving corporation or successor to the Company, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business and assets of the Company whether by purchase,
merger, consolidation, reorganization, transfer of all or substantially all of
the business or assets of the Company, or otherwise (and such purchaser, assign,
surviving corporation or successor shall thereafter be deemed the "Company" for
the purposes of this Agreement), but this Agreement shall not otherwise be
assignable, transferable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Paragraph 12. Without limiting the generality of the
foregoing, the Employee's right to receive payments hereunder shall not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest or otherwise, or otherwise subject to anticipation, alienation, sale,
encumbrance, charge, hypothecation, or set-off in respect of any claim, debt, or
obligation, or to execution, attachment, levy or similar process, or assignment
by operation of law, other than by a transfer by his will or by the laws of
descent and distribution. Any attempt, voluntary or involuntary, to effect any
action prohibited by this Paragraph shall be null, void, and of no effect.
13. NOTICES. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex, telecopy, or certified or registered mail, postage prepaid, or other
similar means of communication, as follows:
(a) the attention of its Secretary; If to the Company,
addressed to its principal executive offices to
(b) If to the Employee, to him or her at the address set forth
below under the Employee's signature; or at any such other address as either
party shall have specified by notice in writing to the other.
14. AMENDMENTS: WAIVERS. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by the Employee and by
a duty authorized representative of the Company. By an instrument in writing
similarly executed, either
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party may waive compliance by the other party with any provision of this
Agreement that such other party was or is obligated to comply with or perform;
PROVIDED, HOWEVER, that such waiver shall not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further. exercise
thereof or the exercise of any other right, remedy, or power provided herein or
by law or in equity.
15. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements (including Schedule 6.1 1 to the Agreement and
Plan of Merger among Parent, Printing Acquisition Inc. and the Company dated as
of July 12, 1999 (the "Merger Agreement")), promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto. The parties further
intend that this Agreement shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this Agreement.
Notwithstanding the foregoing, nothing in this Agreement shall affect the
treatment of the Employee's stock options or restricted stock, if any, or the
Employee's third party beneficiary rights under the Merger Agreement (except
with respect to Schedule 6.11 of the Merger Agreement). Notwithstanding the
foregoing, this Agreement shall not affect or supersede any existing employment
and/or noncompete agreement between the Employee and the Company or any of its
affiliates, except to the extent provided in the proviso in Paragraph 4(a)
herein.
16. SEVERABILITY: ENFORCEMENT. If any provision of this Agreement, or
the application thereof to any person, place or circumstance shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
17. INDEMNIFICATION. The Company shall indemnify, defend, and hold the
Executive harmless from and against any liability, damages, costs, or expenses
(including legal and accounting fees and expenses) in connection with any claim,
cause of action, investigation, litigation, or proceeding involving him or her
by reason of his or her having been an officer, director, employee, or agent of
the Company, unless it is judicially determined, in a final, nonappealable
order, that the Executive was guilty of gross negligence or willful misconduct.
18. GOVERNING LAW. This Agreement shall be interpreted, administered
and enforced in accordance with the law of the State of Connecticut, except to
the extent preempted by Federal law.
19. COUNTERPARTS. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
The parties have duly executed this Agreement as of the date first written
above.
Employee Name:
Retention Bonus:
Address
WORLD COLOR PRESS, INC. EMPLOYEE
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By:
Title:
