EXHIBIT 10.1
JOSTENS, INC.
SEPARATION AGREEMENT AND RELEASE OF CLAIMS
This Separation Agreement including a General and Special Release of Claims
(this "Agreement") is made as of the 1st day of April, 2002, by and between
JOSTENS, INC., a Minnesota corporation (the "Company") and Xxxxxxx X. Xxx (the
"Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Executive is a Vice President and General Manager of the
Company; and
WHEREAS, the Executive wishes to resign from his position as a Vice
President and General Manager to pursue other interests; and
WHEREAS, the parties wish to set forth their agreement as to the timing and
circumstances of the Executive's resignation and the undertakings of the parties
in connection therewith;
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
obligations set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereby agree as
follows:
1. Resignation.
The Executive hereby resigns from his position as a Vice President and
General Manager of the Company and terminates his employment with the Company
effective as of April 1, 2002 (the "Effective Date"). The Executive also resigns
as an officer and director of all subsidiaries and affiliates of the Company
effective as of the Effective Date.
2. Payments And Benefits Following Resignation.
Subject to the Executive's compliance with all of his obligations under
this Agreement, and in consideration of the Executive, among other things,
agreeing to maintain confidential information and not to compete with the
Company during the 18-month period April 1, 2002 - September 30, 2003 (the
"Benefits Period"), as provided in Sections 4 and 5 below and executing the
waivers and releases set forth in Section 7 below, the Company shall provide the
Executive with the payments and other benefits provided for under this
Agreement, as follows:
(a) Severance Benefits and Vacation Pay. The Company shall pay the
Executive in a lump sum as soon as reasonably practicable after the Effective
Date (the "Payment Date") a severance benefit of $805,485.85, less applicable
withholding taxes, representing the aggregate of all amounts payable to the
Executive upon his termination of service, including salary, bonus,
medical insurance, perquisites, Executive Supplemental Retirement Agreement
benefits, benefits under the Company's Executive Change in Control Severance Pay
Plan, and an income tax gross-up amount compensating him for the Company's cash
payment in lieu of providing him with certain tax-free benefits in kind. In
addition, the Company shall pay the Executive on the Payment Date $12,636.69 in
lieu of the fifteen days of accrued and unused vacation that the Executive has
earned as of the Effective Date under the Company's vacation plan for similarly
situated employees.
(b) Outplacement Benefits and Computer Use. The Company shall provide the
Executive with outplacement services with the firm of Xxx Xxxxx Xxxxxxxx for a
period ending on the earlier to occur of September 30, 2003, or the date on
which the Executive commences new full-time employment. During the same period,
the Executive shall be entitled to continue using the laptop computer and
associated software owned or licensed by the Company and currently provided for
his use; provided, however, that (i) the Executive shall no longer be provided
with access to the Company's internal computer network, except for access to any
e-mail that may be received for him; and (ii) at or before the end of such
period, the Executive shall return that computer to the Company in good working
condition, ordinary wear and tear excepted.
After the Effective Date, no other welfare benefits shall be provided by
the Company to or for the benefit of the Executive, except to the extent
included in the severance benefit payable under Section 2(a), the benefits
provided under this Section 2(b) or provided by or through the Company at the
expense of the beneficiary under Section 2(g).
(c) Repurchase of Shares. The Company shall repurchase from the Executive,
on the Payment Date, 5,351 shares of the Company's stock which are owned without
restriction, and 4,171 shares which are now pledged to secure a loan to the
Executive from the Company, in accordance with Section 3(a) of the Management
Shareholder Agreement, and Section 1.4(b) of the Loan and Pledge Agreement, both
dated as of May 10, 2000 between the Company and the Executive. The repurchase
price for all of the shares shall be $28.50 per share which is the fair market
value of the shares as of December 31, 2001 as determined by the Company's Board
of Directors. The proceeds of the repurchase of both the pledged shares and the
shares owned without restriction shall first be applied in satisfaction of the
Executive's $125,790.11 outstanding loan from the Company (i.e., principal of
$105,318 and interest of $20,472.11), and the balance of the proceeds shall be
paid to the Executive.
(d) Pension Benefits. An aggregate annual benefit of $32,408 shall be paid
to the Executive each year commencing in the year in which he attains age 65, of
which $20,258 shall be paid from Pension Plan D and the balance shall be paid by
the Company pursuant to the Supplemental Pension Plan; provided, however, that
if the annual benefit payable under Pension Plan D is less than $20,258 at that
time, the difference shall be paid by the Company under the Supplemental Pension
Plan. The Executive shall remain entitled to receive his benefits under those
plans at the time and in the manner he chooses, subject to the terms and
conditions of those plans. This Agreement does not adversely affect any of the
Executive's benefits or other rights under Pension Plan D, the Supplemental
Pension Plan or the Company's 401(k) Retirement Savings Plan.
(e) Options. Executive holds an option to acquire an aggregate of 38,680
shares issued pursuant to the Stock Option Agreement made pursuant to the
Jostens, Inc. Stock Incentive Plan and dated as of May 10, 2000, between the
Company and the Executive, the exercisable portion of which represents the right
to acquire 7,736 shares. The Company shall pay Executive $25,142 on the Payment
Date in respect of such exercisable portion, upon which payment the entire
option shall be cancelled.
(f) References and Non-disparagement. The Company shall provide the
Executive with a favorable written reference (in the form attached hereto as
Exhibit A) and, if requested, favorable written references relating to his
employment by the Company. The Executive and the Company agree that, before and
after his termination of employment with the Company, neither of them will make
any statement or communication of information by whatever means relating to his
employment with the Company that may be reasonably interpreted to be critical of
or derogatory to the other party to this Agreement, including, in the case of
the Company, its officers, directors and employees; provided, however, that
nothing in this paragraph is intended to keep either party from testifying
truthfully under subpoena or other legal process before any court or
administrative agency of competent jurisdiction.
(g) Election to Continue or Convert Welfare Benefits. This Agreement shall
not adversely affect the rights of the Executive and/or his eligible spouse and
dependents to elect to continue (or convert to individual coverage), after the
Effective Date and at such individual's own expense, any of the group health,
life insurance and/or disability income insurance benefits provided to him by
the Company as of the Effective Date, but only to the extent any such individual
is entitled to such rights under applicable state or federal law or the terms of
the applicable Company plan or insurance contract.
3. Exclusive Separation Payments And Benefits.
The Executive and the Company acknowledge and agree that this Agreement is
intended to be the exclusive separation arrangement between the Company and the
Executive. Accordingly, unless otherwise agreed to in writing signed by the
Executive and the Company, the Executive and the Company agree that the
Executive shall not be entitled to any remuneration, payments or other benefits
under any other severance or separation plan or arrangement of the Company
(other than the payments and other benefits provided to the Executive pursuant
to, or referred to in, this Agreement); and Executive specifically waives any
and all rights he may have to benefits under the Executive Supplemental
Retirement Agreement between the Executive and the Company. The payments and
other benefits provided by or referred to in this Agreement include any
severance or termination benefits that may be required by applicable law.
4. Confidential Information.
(a) The Executive shall not, at any time or for any reason, disclose,
exploit, sell, publish, communicate or divulge, directly or indirectly, to any
person, corporation or entity, or use for his own benefit, any Confidential or
Proprietary Information. For the purposes of this Agreement, "Confidential or
Proprietary Information" shall mean information belonging to the Company or any
of its affiliates and acquired by the Executive during the course of his
employment that is of a special and unique nature and value, (i) where such
information is not generally known in the industries in which the Company is
currently engaged in business; and (ii) where such information refers or relates
in any manner whatsoever to the business activities, processes, services or
products of the Company or its affiliates. Such information (whether in printed
or electronic form) includes, but is not limited to, such matters as the
Company's employee lists and other personnel and compensation information;
office policies and practices; manuals, books and training materials; management
organization and methods; performance reviews, project assessments and all other
forms and documents used in management of the Company's employees and in
performing work for the Company; trade secrets; procedures; financial accounts,
costs and sales data; supply sources, resources and contracts; accounting and
bookkeeping practices and financial, marketing and operating data and records;
databases; information relating to costs and revenues; other financial
information; marketing and business forecasts and business and development plans
and strategies (whether contemplated, initiated or completed); advertising and
marketing methods; customer and prospective customer names and lists; price
lists; business contacts and existing and potential business opportunities; data
collection forms and other documents provided to customers, contracts or other
agreements with customers or vendors; customers' needs for the Company's
products and services; any information concerning any publication, product,
technology, procedure or service currently offered or under development by the
Company; other information specific to the Company's products; any litigation
and other legal matters (including but not limited to the terms of this
Agreement); all reports, statements, correspondence, memoranda, methods of
operation, policies, results of analysis, strategic information and other
information distributed to policy or management committee members or at business
meetings; and any other similar information.
(b) In the event the Executive shall be requested, by subpoena or
otherwise, in a judicial, administrative or government proceeding to make
disclosures of Confidential or Proprietary Information which are otherwise
prohibited by this Agreement (whether by way of oral questions, interrogatories,
requests for information or documents, subpoenas or similar process), the
Executive shall notify the Company in writing of such request (and shall provide
a copy of such request to the Company) within two (2) business days of the
Executive's receipt thereof and before providing any information in response to
such request. The Company shall provide counsel to represent the Executive at
the Company's expense in connection with responding to any such subpoena or
request for information.
(c) The Executive shall return to the Company immediately upon request of
the Company at any time during the Benefits Period all of the Company's property
and Confidential or Proprietary Information which is in tangible form
(including, but not limited to, all correspondence, memoranda, files, manuals,
books, lists, records, equipment, computer disks, magnetic tape, and electronic
or other media and equipment) and all copies thereof in the Executive's
possession, custody or control.
5. Covenant Not to Compete.
(a) Without the written consent of the Company in its sole and absolute
discretion, the Executive shall not, directly or indirectly, either individually
or as a stockholder, director, officer, partner, consultant, owner, capital
investor, lender, employee, agent, or in any other capacity (other than as a
holder of no more than one percent (1%) of the outstanding stock of a
publicly-traded corporation), for the duration of the Benefits Period, engage in
the Company Business, or work for or provide services to any Competitor of the
Company or its affiliates. For the purposes of this Agreement, (i) the term
"Company Business" shall mean both the domestic and international school-related
affinity products and services business, including but not limited to the school
photography business, and any other business engaged in, or proposed to be
engaged in, by the Company or its affiliates as of the effective date of this
Agreement; and (ii) the term "Competitor" shall mean any natural person,
corporation, firm, organization, trust, partnership, association, joint venture,
governmental agency or other entity that engages, or proposes to engage, in the
Company Business.
(b) During the Benefits Period, the Executive shall not directly or
indirectly, (i) induce or attempt to induce or otherwise counsel, advise, ask or
encourage any individual who at the time is a current employee of the Company or
its affiliates, to leave the employ of the Company or its affiliates or to
accept employment with another employer besides the Company or its affiliates as
an employee or as an independent contractor; (ii) offer employment to or hire
such individual, or (iii) cause, encourage or assist any other person or entity,
directly or indirectly, either individually or as a stockholder, director,
officer, partner, consultant, owner, capital investor, lender, employee, agent,
or in any other capacity (other than as a holder of no more than one percent
(1%) of the outstanding stock of a publicly-traded corporation) to offer
employment to or hire any such individual.
(c) The Executive agrees that the restrictions imposed upon him by the
provisions of this Section 5 are fair and reasonable considering the nature of
the Company's business, and are reasonably required for the protection of the
Company. The Executive further agrees that the provisions of Section 5(a)
relating to areas of restriction and time periods of restriction were
specifically discussed in good faith and are acceptable to the Executive.
Nevertheless, to the extent that these restrictions exceed the maximum areas of
restriction, limitations or periods of time which a court of competent
jurisdiction would enforce, the areas of restriction, limitations or time
periods shall be modified by such court to be the maximum areas of restriction,
limitations or time periods which such court would enforce in any state in which
such court shall be convened. If any other part of this Section 5 is held to be
invalid or unenforceable, the remaining parts shall nevertheless continue to be
valid and enforceable as though the unenforceable portions were absent.
(d) The Executive acknowledges that a breach of any of the provisions of
this Section 5 may result in continuing and irreparable damages to the Company
for which there may be no adequate remedy at law and that the Company, in
addition to all other relief available to it, shall be entitled to the issuance
of a temporary restraining order, preliminary injunction and permanent
injunction restraining the Executive from committing or continuing to commit any
breach of the provisions of Section 4 above or this Section 5 pending further
legal proceedings and for appropriate periods in the future. Furthermore, the
Executive understands that his breach of the provisions of Section 4 above or
this Section 5 may cause monetary damages to the Company. In the event of a
final adjudication by a court of competent jurisdiction that the Executive has
breached the provisions of Section 4 above or this Section 5, the Executive
shall be required to pay the Company the amount of any actual damages awarded to
the Company as a result of such adjudication, plus the amount of the Company's
reasonable attorneys fees and expenses. In the event of a final adjudication by
a court of competent jurisdiction that the
Executive has not breached the provisions of Section 4 above or this Section 5,
the Company shall be required to pay the Executive the amount of the reasonable
attorneys fees and expenses incurred by the Executive in connection with the
proceedings resulting in such final adjudication. For the purposes of this
Agreement, a "final adjudication" is a judgment from which no further appeal may
be taken, either because no further appeal is available or because the time for
taking such appeal has expired.
6. Release and Waiver of Claims Against the Company.
(a) The Executive, on behalf of himself, his agents, heirs, successors,
assigns, executors and administrators, in consideration for the payments and
other consideration provided for under this Agreement, hereby forever releases
and discharges the Company and its successors, their affiliated entities and
controlling persons, and their past and present directors, employees, agents,
attorneys, accountants, representatives, plan fiduciaries, successors and
assigns from any and all known and unknown causes of action, actions, judgments,
liens, indebtedness, damages, losses, claims, liabilities, and demands of
whatsoever kind and character in any manner whatsoever arising on or prior to
the date of this Agreement, including but not limited to (i) any claim for
breach of contract, breach of implied covenant, breach of oral or written
promise, wrongful termination, intentional infliction of emotional distress,
defamation, interference with contract relations or prospective economic
advantage, negligence, misrepresentation or employment discrimination, and
including without limitation alleged violations of Title VII of the Civil Rights
Act of 1964, as amended, prohibiting discrimination based on race, color,
religion, sex or national origin; the Family and Medical Leave Act; the
Americans With Disabilities Act prohibiting discrimination based on disability;
the Age Discrimination in Employment Act prohibiting discrimination based on age
over 40; other federal, state and local laws, ordinances and regulations; and
any unemployment or workers' compensation law; (ii) any and all liability that
was or may have been alleged against or imputed to the Company by the Executive
or by anyone acting on his behalf; (iii) all claims for wages, monetary or
equitable relief, employment or reemployment with the Company in any position,
and any punitive, compensatory or liquidated damages; and (iv) all rights to and
claims for attorneys' fees and costs except as otherwise provided herein;
provided, however, that this release shall not extend to the obligations of the
Company that are specifically recited or referred to in this Agreement, or to
the rights of Executive and/or his spouse and eligible dependents with respect
to the Company's benefit plans as described in Sections 2(d) and 2)(g) of this
Agreement. The Executive expressly waives any and all rights granted by any
federal, state or local laws or ordinances or regulations that are intended to
protect the Executive from waiving unknown claims.
(b) The Executive shall not file or cause to be filed any action, suit,
claim, charge or proceeding with any federal, state or local court or agency
relating to any claim within the scope of this Section 6. The Executive
represents and warrants that he has not assigned any claim released herein, or
authorized any other person to assert any claim on his behalf.
(c) In the event any action, suit, claim, charge or proceeding within the
scope of this Section 6 is brought by any government agency, putative class
representative or other third party to vindicate any alleged rights of the
Executive, (i) the Executive shall, except to the extent required or compelled
by law, legal process or subpoena, refrain from participating, testifying or
producing documents therein, and (ii) all damages, inclusive of attorneys' fees,
if any, required to be paid to the Executive by the Company as a consequence of
such action, suit, claim, charge or proceeding shall be repaid to the Company by
the Executive within ten (10) days of his receipt thereof.
(d) Notwithstanding anything in this Agreement to the contrary, in the
event of a violation of this Section 6 by the Executive, the Company's
obligations pursuant to this Agreement shall cease as of the date of such
violation and the Executive shall be liable to the Company for any actual
damages the Company suffers as a result of such violation, including costs,
expenses and all attorneys' fees and expenses.
7. Release and Waiver of Claims Against the Executive.
The Company hereby forever releases and discharges the Executive from any
and all actions, causes of action, claims or demands in general, special or
punitive damages, attorneys' fees and costs, expenses or other compensation
which in any way relate to or arise out of the Company's employment of the
Executive or the termination of such employment or otherwise, which the Company
may now or hereafter have under any federal, state or local law, regulation or
ordinance. The release and waiver contained in this Section 7 of this Agreement
shall not apply to any act of fraud or criminal conduct by the Executive of
which the Company is not aware as of the date of this Agreement, nor to any act
of non-compliance with the terms of this Agreement by the Executive.
8. No Admission of Wrongdoing.
The release and waiver of claims by the Company in Section 7 of this
Agreement, and the payment by the Company of that portion of the amounts and
other benefits set forth in this Agreement to which the Executive would not
otherwise be entitled, are being given to the Executive in return for the
Executive's agreements and covenants contained in this Agreement. Nothing
contained in this Agreement shall be construed as an admission of liability or
wrongdoing by either the Executive or the Company.
9. Voluntary Execution of Agreement.
BY HIS SIGNATURE BELOW, THE EXECUTIVE ACKNOWLEDGES THAT:
(A) I HAVE RECEIVED A COPY OF THIS AGREEMENT AND WAS OFFERED A PERIOD OF
FORTY-FIVE (45) DAYS TO REVIEW AND CONSIDER IT;
(B) IF I SIGN THIS AGREEMENT PRIOR TO THE EXPIRATION OF FORTY-FIVE DAYS, I
KNOWINGLY AND VOLUNTARILY WAIVE AND GIVE UP THIS RIGHT OF REVIEW;
(C) I HAVE THE RIGHT TO REVOKE THIS AGREEMENT FOR A PERIOD OF SEVEN DAYS
AFTER I SIGN IT BY MAILING OR DELIVERING A WRITTEN NOTICE OF REVOCATION TO THE
CHIEF EXECUTIVE OFFICER OF THE COMPANY, NO LATER THAN THE CLOSE OF BUSINESS ON
THE SEVENTH DAY AFTER THE DAY ON WHICH I SIGNED THIS AGREEMENT;
(D) THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
SEVEN DAY REVOCATION PERIOD HAS EXPIRED WITHOUT THE AGREEMENT HAVING BEEN
REVOKED;
(E) THIS AGREEMENT WILL BE FINAL AND BINDING AFTER THE EXPIRATION OF THE
REVOCATION PERIOD REFERRED TO IN (C). I AGREE NOT TO CHALLENGE ITS
ENFORCEABILITY;
(F) I AM AWARE OF MY RIGHT TO CONSULT AN ATTORNEY, HAVE BEEN ADVISED IN
WRITING TO CONSULT WITH AN ATTORNEY, AND HAVE HAD THE OPPORTUNITY TO CONSULT
WITH AN ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS AGREEMENT;
(G) NO PROMISE OR INDUCEMENT FOR THIS AGREEMENT HAS BEEN MADE EXCEPT AS SET
FORTH IN THIS AGREEMENT;
(H) I AM LEGALLY COMPETENT TO EXECUTE THIS AGREEMENT AND ACCEPT FULL
RESPONSIBILITY FOR IT; AND
(I) I HAVE CAREFULLY READ THIS AGREEMENT INCLUDING THE RELEASE SET FORTH IN
SECTION 6, ACKNOWLEDGE THAT I HAVE NOT RELIED ON ANY REPRESENTATION OR
STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS DOCUMENT OR THE WRITTEN
MATERIALS PRESENTED TO ME WITH THIS AGREEMENT, AND WARRANT AND REPRESENT THAT I
AM SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.
10. Notices.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing, shall be deemed properly given if
delivered personally or sent by certified or registered mail, postage prepaid,
return receipt requested, or sent by telegram, telex, telecopy or similar form
of telecommunication, and shall be deemed to have been given when received. Any
such notice, request, demand or communication shall be addressed: (a) if to the
Company, to the Chief Executive Officer of the Company, 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000; (b) if to the Executive, to his last known
home address on file with the Company; or (c) to such other address as the
parties shall have furnished to one another in writing.
11. Termination and Amendments; Miscellaneous.
(a) This Agreement may only be terminated, or the provisions of this
Agreement amended or waived, prior to the expiration of the Company's and the
Executive's obligations under this Agreement, by a writing signed by the Company
and the Executive.
(b) The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(c) The failure to insist upon strict compliance with any provision hereof,
or the failure to assert any right hereunder, shall not be deemed to be a waiver
of such provision or right or of any other provision or right under this
Agreement. In the event that any term, provision or release of claims or rights
contained in this Agreement is found or determined to be illegal or otherwise
invalid and unenforceable, whether in whole or in part, such invalidity shall
not affect the enforceability of the remaining terms, provisions and releases of
claims or rights.
(d) Except for payments to be made from the trusts under the Company's
Pension Plan D and 401(k) Retirement Savings Plan, all payments to be made
hereunder shall be paid from the Company's general funds and no special or
separate fund shall be established and no segregation of assets shall be made to
assure the payment of such amounts. Nothing contained in this Agreement shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and the Executive or any other person with
respect to amounts to be paid hereunder; provided, however, that this Agreement
does not affect the existing fiduciary duties of the Company under its Pension
Plan D and 401(k) Retirement Savings Plan.
(e) Nothing in this Agreement shall confer upon the Executive any right to
continue in the employ of the Company or its affiliates.
(f) This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and supersedes all prior
oral and written and all contemporaneous oral discussions, agreements and
understandings of any kind or nature. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective permitted
successors and assigns.
(g) Any reference within this Agreement to an action, judgment, conclusion,
or determination by the Company shall mean an action, judgment, conclusion, or
determination of the Board of Directors of the Company or its authorized
representative(s).
(h) The headings preceding the text of the sections hereof are inserted
solely for convenience of reference, and shall not constitute a part of this
Agreement, nor shall they affect its meaning, construction or effect.
(i) This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Minnesota.
(j) This Agreement may be executed in two or more counterparts, all of
which shall have the same force and effect as if all parties thereto had
executed a single copy.
IN WITNESS WHEREOF, the Company and the Executive have acknowledged and
executed this Agreement effective as of the seventh day following the date first
set forth above, unless revoked by the Executive in the manner set forth in
Section 9 above.
JOSTENS, INC.
_________________________________ By: _____________________________________
Xxxxxxx X. Xxx Name: ___________________________________
Title: __________________________________
