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EXHIBIT 10.25
EXECUTIVE
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
April 16, 1999 by and between Xxxxx X. Xxxxxx ("Executive") and Geographics,
Inc., a Wyoming corporation (the "Company"). Capitalized terms not otherwise
defined in the text of this Agreement have the meanings set forth in Appendix A,
which is incorporated into this Agreement by reference.
WITNESSETH:
WHEREAS, in view of Executive's experience and demonstrated skills and
abilities and his unique qualifications that are needed by the Company, the
Company has determined that it is in the best interests of the Company and its
stockholders to engage Executive as the Company's Chairman of the Board of
Directors (the "Board") and Chief Executive Officer; and
WHEREAS, the Company recognizes the need to provide a level of
compensation and relative security that is competitive with that of other
publicly held companies and that provides the necessary economic and performance
incentives that will be of benefit to the Company stockholders in the long term.
In consideration of each of the specific premises set forth above and
in further consideration of the mutual agreements set forth herein, the parties
agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment by the Company of Executive and Acceptance by Executive.
The Company hereby employs Executive during the term of this Agreement in such
capacities and upon such conditions concerning rates of compensation, benefits
and other matters as are hereinafter stated. Executive hereby accepts such
employment and agrees faithfully, diligently and to the best of his ability to
discharge the responsibilities of the offices that he shall, as provided herein,
occupy.
1.2 Capacity. Executive shall be employed during the term of this
Agreement as Chairman of the Board and Chief Executive Officer of the Company
with such duties, functions, responsibilities and authority that are
commensurate with and appropriate for such position and as are from time-to-time
set forth in the Bylaws of the Company and otherwise delegated to Executive by
the Board. Notwithstanding the foregoing, while performing services under this
Agreement, Executive does not have to reside in the State of Washington.
1.3 Term. Subject to the other provisions of this Agreement, the term
of this Agreement and Executive's employment hereunder shall be deemed to have
commenced on the date of this Agreement and shall continue until the occurrence
of an Event of Termination (as defined in Section 3.1).
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ARTICLE II
COMPENSATION, BENEFITS AND EXPENSE REIMBURSEMENT
2.1 Compensation and Benefits. For services rendered pursuant to this
Agreement, Executive's compensation and benefits will consist of the following:
(a) Base Salary. As salary compensation to Executive for his
performance of the services to be rendered hereunder and for his
acceptance of the responsibilities described herein and for his
performance of all the usual obligations of employment, the Company
agrees to pay to Executive, and Executive agrees to accept, during the
term of this Agreement an annual base salary of not less than Seventy
Five Thousand Dollars ($75,000) per year or such greater amount as the
Board or the appropriate committee thereof may from time-to-time
determine (the "Base Salary"). At least annually the Board or the
appropriate committee thereof shall review the Base Salary to determine
whether it should be increased based on Executive's performance, the
performance of the Company, or other circumstances then prevailing. The
results of each review shall be communicated to and discussed with
Executive by the Board or the appropriate committee thereof.
(b) Benefits. Executive shall, during the term of this
Agreement (and thereafter to the extent provided herein or in such
plans), be eligible to participate in the Company's pension and
retirement plans, insurance and death benefits in effect for all
salaried employees, together with any future improvements in such plans
and benefits. In addition, Executive shall be entitled during the term
of this Agreement (and thereafter to the extent provided for herein or
in any such plan) to receive such other and further benefits,
including, without limitation, benefits under stock option plans,
supplemental retirement plans, performance unit plans, deferred
compensation and salary continuation plans, medical, health, life,
accident and disability insurance programs, pension benefits,
vacations, and any and all other benefits as are generally made
applicable to key executive employees of the Company, and such
additional benefits, as may be granted to him from time-to-time by the
Board or the appropriate committee thereof.
(c) Stock Options. The Company shall grant options to purchase
three hundred thousand (300,000) shares of the Company's common stock
(the "Salary Options") to Executive at an exercise price of $0.30 per
share, with such Salary Options being immediately vested and
exercisable. The Company shall also grant Executive options to purchase
Five Hundred Thousand (500,000) shares of the Company's common stock
(the "Bonus Options") to Executive at an exercise price of $0.50 with
one-eighteenth (1/18th) such Bonus Options vesting and becoming
exercisable on May 1, 1999 and each monthly anniversary thereafter.
2.2 Expenses. The Company shall reimburse Executive for all reasonable
expenses incurred in the course of the performance of Executive's duties and
responsibilities pursuant to this Agreement and consistent with the Company's
policies with respect to travel, entertainment and miscellaneous expenses, and
the requirements with respect to the reporting of such
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expenses. In addition, the Company shall reimburse Executive for housing or
hotel accommodations in the Blaine, Washington area during the term of this
Agreement.
2.3 Withholding. The Company shall be entitled to withhold from amounts
to be paid to Executive hereunder any federal, state or local withholding or
other taxes or charges that it is from time-to-time required to withhold. The
Company shall be entitled to rely on an opinion of counsel if any questions as
to the amount or requirement of any such withholding shall arise.
ARTICLE III
TERMINATION
3.1 Right to Terminate; Automatic Termination. Each of the following
events shall be considered an "Event of Termination":
(a) Termination By the Company. Subject to Section 3.2, the
Company may terminate Executive's employment and all of the Company's
obligations under this Agreement at any time and for any reason. The
termination will be in effect at such time as designated by the Company
but not less than two weeks after notice is given.
(b) Termination by Death or Disability. Subject to Section
3.2, Executive's employment and the Company's obligations under this
Agreement shall terminate as follows: (i) automatically, effective
immediately and without any notice being necessary, upon Executive's
death; and (ii) in the event that Executive becomes Disabled, by the
Company giving notice of termination to Executive.
(c) Executive Resigns or Voluntarily Terminates Employment.
Subject to Section 3.2, Executive may terminate his employment under
this Agreement if Executive provides the Company at least two weeks
advance written notice.
(d) Executive Terminates Employment for Good Reason or due to
a Change in Control. Subject to Section 3.2, Executive may terminate
his employment immediately for Good Reason or upon a Change in Control.
3.2 Rights Upon Termination.
(a) Section 3.1(a), Section 3.1(b) or Section 3.1(d)
Terminations. If Executive's employment is terminated pursuant to
Section 3.1 (a) Section 3.1(b) or Section 3.1(d), notwithstanding the
other terms of this Agreement, Executive shall have no further rights
against the Company hereunder, except for the right to receive (i) any
unpaid Base Salary with respect to the period prior to the effective
date of termination (ii) reimbursement of expenses to which Executive
is entitled under Section 2.2 hereof, and (iii) any unvested Salary
Options or Bonus Options owned by Executive will become fully vested.
(b) Section 3.1(c) Termination. If Executive's employment is
terminated pursuant to Section 3.1(c), notwithstanding the other terms
of this Agreement, Executive shall have no further rights against the
Company hereunder, except for the right to
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receive (i) any unpaid Base Salary with respect to the period prior to
the effective date of termination and (ii) reimbursement of expenses to
which Executive is entitled under Section 2.2 hereof.
(c) Exclusive Remedy. To the extent permitted by applicable
law, the payments contemplated by this Section 3.2 shall constitute the
exclusive and sole remedy for any termination of Executive's employment
with the Company (whether pursuant to, or in violation of, the terms of
this Agreement), and Executive covenants not to assert or pursue any
remedies, other than an action to enforce the payments due to Executive
under this Agreement, at law or in equity, with respect to any
termination of employment.
ARTICLE IV
CONFIDENTIALITY; NONCOMPETITION
4.1 Covenant Against Competition.
(a) Noncompetition. Without the prior written consent of the
Company, Executive, for a two-year period following his resignation,
shall not become involved directly or indirectly, as an employee,
officer, director, partner, consultant, owner (other than a minority
shareholder interest of not more than 5% of a company whose equity
interests are publicly traded on a nationally recognized stock exchange
or over-the-counter) or in any other capacity, in any activity on
behalf of a Competitor of the Company.
(b) Non-Solicitation. For a period of two years after the
termination of Executive's employment, Executive will not solicit, or
assist another person to solicit, any employee, supplier or other
person having business relations with the Company to terminate such
employee's employment or terminate or curtail such supplier's or other
person's business relationship with the Company.
4.2 Confidentiality Information. Executive acknowledges that
he has been required to use his personal intellectual skills on behalf of the
Company, its subsidiaries and affiliates (the term "Company" as used in this
Section 4.2 shall include such subsidiaries and affiliates) and that it is
reasonable and fair that the fruits of such skills should inure to the sole
benefit of the Company. Executive further acknowledges that he has acquired
information of a confidential nature relating to the operation, finances,
business relationships and trade secrets of the Company. Therefore, for a period
of two years following termination of employment, Executive will not use (except
in response to a request by an officer of the Company), publish, disclose or
authorize anyone else to use, publish or disclose, without the prior written
consent of the Company, within the geographical area in which such use,
publication or disclosure could harm the Company's existing or potential
business interests, any Confidential Information or trade secrets; provided,
however, that following termination of Executive's employment, Executive shall
be prohibited from ever using, publishing, disclosing or authorizing anyone else
to use, publish or disclose, any information that constitutes a trade secret
under applicable law. Executive shall not remove or retain any figures,
calculations, formulae, letters, papers, software, abstracts, summaries,
drawings, blueprints, diskettes or any other material, or copies thereof,
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which contain or embody any Confidential Information or trade secrets of the
Company, except for use in the course of Executive's regular authorized duties
on behalf of the Company. The foregoing notwithstanding, Executive has no
obligation to refrain from using, publishing or disclosing any such Confidential
Information that is or hereafter shall become available to the public, other
than by use, publication or disclosure by Executive. This prohibition also does
not prohibit Executive's use of general skills and know-how acquired during and
prior to employment with the Company, as long as such use does not involve the
use, publication or disclosure of the Company's Confidential Information or
trade secrets.
ARTICLE V
GENERAL PROVISIONS
5.1 Notices. Any and all notices provided for in this
Agreement shall be given in writing and shall be deemed given to a party at the
earlier of (i) when actually delivered to such party, or (ii) when mailed to
such party by registered or certified mail (return receipt requested) or sent to
such party by courier, confirmed by receipt, and addressed to such party at the
address designated below for such party as follows (or to such other address for
such party as such party may have substituted by notice pursuant to this Section
5.1):
(a) If to the Company:
Geographics, Inc.
0000 Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Attn: Board of Directors
with a copy to:
Xxx X. Xxxxxxxxx
Xxxxxxx Xxxx & Xxxxxxxxx LLP
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
(b) If to Executive:
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Ariel 1608
Ft. Xxxxxx, XX 00000
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with a copy to:
Xxxxx X. Xxxx
Xxxxx Xxxxxxxxxxx Xxxxx SC
000 Xxxx Xxxxxxxxx Xxxxxx, #0000
Xxxxxxxxx, XX 00000-0000
Any purported notice of Event of Termination pursuant to Section 3.1 shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated. No such
purported termination shall be effective unless the notice meets the
requirements of this Section 5.1.
5.2 Entire Agreement. This Agreement contains the entire understanding
and the full and complete agreement of the parties and supersedes and replaces
any prior understandings and agreements among the parties, with respect to the
subject matter hereof.
5.3 Amendment; Headings. This Agreement may be altered, amended or
modified only in a writing, signed by both of the parties hereto. Headings
included in this Agreement are for convenience only and are not intended to
limit or expand the rights of the parties hereto. References to Sections herein
shall mean sections of the text of this Agreement, unless otherwise indicated.
5.4 Assignability. This Agreement and the rights and duties set forth
herein may not be assigned by Executive, but may be assigned by the Company, in
whole or in part. This Agreement shall be binding on and inure to the benefit of
each party and such party's respective heirs, legal representatives, successors
and permitted assigns.
5.5 Severability. If any court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then such
invalidity or unenforceability shall have no effect on the other provisions
hereof, which shall remain valid, binding and enforceable and in full force and
effect, and such invalid or unenforceable provision shall be rewritten or
construed in a manner so as to give the maximum valid and enforceable effect to
the intent of the parties expressed herein.
5.6 Waiver of Breach. The waiver by either party of the breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
5.7 Governing Law; Construction. This Agreement and the obligations
hereunder shall be interpreted, construed and enforced in accordance with the
laws of the State of Washington (without regard to its conflict of laws
principles). Any ambiguities in this Agreement shall not be strictly construed
against the drafter of the language, but rather shall be resolved by applying
the most reasonable interpretation under the circumstances, giving full
consideration to the intentions of the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year written above.
/s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx
GEOGRAPHICS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Title: Executive Vice President
(Signature Page of Executive Employment Agreement)
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APPENDIX A
DEFINITIONS
"Change in Control" shall mean the occurrence any of the following:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% of more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition by the Company, (ii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (iii) any
acquisition by any corporation pursuant to a transaction that complies
with clauses (i), (ii) and (iii) of subsection (c);
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by
a vote of at least two-thirds (2/3) of the directors then comprising
the Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board;
(c) Consummation of a reorganization, merger or consolidation
or a sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination") in each case, unless,
following such Business Combination, (i) all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
Outstanding Company Common Stock and the combined voting power of the
then Outstanding Company Voting Securities after the Business
Combination, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related
trusts) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 40% or more of
either the Outstanding Company Common Stock or the Outstanding Company
Voting Securities except to the extent that such ownership existed
prior to the Business Combination and (iii) at least two-thirds (2/3)
of the members of the board of directors of the corporation resulting
from such Business Combination were
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members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
"Competitor" shall mean an organization identified in Appendix B or the
successor to such an organization or an organization not identified but which is
engaged in the development, manufacture, marketing, sale or distribution of
stationary paper products or any other products the Company may undertake to
develop, manufacture, sell or distribute (collectively, "Products") or which is
formed, created, or initiated by Executive, either individually or in concert
with others, with a purpose, plan or activity to develop, manufacture, market,
sell or distribute Products.
"Confidential Information" shall mean information that is possessed by or
developed for the Company and that relates to the Company's existing or
potential business or technology, which information is generally not
known to the public and which information the Company seeks to protect
from disclosure to its existing or potential competitors or others,
including, without limitation, the following: business plans,
strategies, existing or proposed bids, costs, technical developments,
existing or proposed research projects, financial or business
projections, investments, marketing plans, negotiation strategies,
training information and materials, information generated for client
engagements and information stored or developed for use in or with
computers. Confidential Information also includes information received
by the Company from others for which the Company has an obligation to
treat as confidential, including all information obtained in connection
with client engagements.
"Disabled" shall mean that Executive is unable to perform his services under
this Agreement for a continuous period of six months by reason of his
physical or mental illness or incapacity. If there is any dispute as to
whether Executive is or was physically or mentally unable to perform
his duties under this Agreement, such question shall be submitted to a
licensed physician agreed to by Executive (or any legal guardian
lawfully appointed) and the Company, or, if they are unable to so
agree, appointed by the senior judge of the Milwaukee County Circuit
Court at the request of either Executive (or such legal guardian) or
the Company. Executive shall submit to such examinations and provide
such information as such physician may reasonably request and the
determination of such physician as to Executive's physical or mental
condition shall be binding and conclusive upon Executive and the
Company.
"Good Reason" shall mean a basis for termination of this Agreement by
Executive (1) for any reason within three (3) months following a Change
in Control), or (2) any material breach by the Company of the terms of
this Agreement.
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XXXXXXXX X
LIST OF COMPETITORS
1. Paper Direct, Inc.
2. Xxxxxx, Inc.
3. American Pad & Paper Company
4. Z-International, Inc.
Appendix B - 1
