1
Exhibit 10.14
EMPLOYMENT AGREEMENT
--------------------
This Agreement is made as of the 1st day of July, 1997 between Pamarco
Technologies Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
(the "Employee").
RECITALS
--------
The Employee is currently providing consulting services to the Company
and its affiliates pursuant to a Consulting Agreement dated as of April 1, 1997
(the "Consulting Agreement"). The Company and the Employee desire to (i)
terminate the Consulting Agreement and (ii) enter into this Employment Agreement
whereby the Employee shall provide services to the Company and its affiliates
upon the terms and conditions hereinafter set forth.
WITNESSETH:
-----------
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
each intending to be legally bound hereby, agree as follows:
1. EMPLOYMENT.
The Company hereby employs the Employee, and the Employee hereby
accepts employment by the Company upon the terms and conditions set forth in
this Agreement. During the term of employment under this Agreement (the
"Employment Term"), the Employee shall perform such duties as are assigned by
the Board of Directors of the Company, and will initially serve as the Chief
Operating Officer of the Company.
2. PERFORMANCE.
The Employee shall devote his entire business efforts to the
performance of his duties hereunder; provided, however, that the Employee may
engage in personal investment activities so long as they do not interfere with
the performance of his duties hereunder.
3. TERM.
Unless otherwise terminated in accordance with Sections 6 or 7, the
Employment Term shall be for two years from the date of this Agreement.
2
4. COMPENSATION FOR EMPLOYMENT.
(a) The basic annual rate of compensation of the Employee for his
employment services to the Company and its affiliates hereunder shall be
$200,000 (the "Salary"), in accordance with the Company's payroll payment
schedule in effect from time to time, which the Company shall pay to the
Employee in equal installments every two weeks. The Salary may be adjusted
upward on an annual basis as the Board of Directors of the Company (the "Board")
may approve, in its sole discretion, from time to time, but the Salary shall not
be decreased.
(b) Commencing January 1, 1997, the Employee shall be entitled to a
bonus or such other incentive compensation as may be provided under any plan or
program established from time to time by the Board, in its sole discretion.
(i) For the period January 1 through December 31, 1997, the
Employee shall be eligible to earn a bonus of up to a maximum of
$15,600 based upon the achievement of the following levels of pre-tax
income of Pamarco, Incorporated for the fiscal year ended December 31,
1997:
1997 pre-tax income of
Pamarco, Incorporated Aggregate Bonus Amount
--------------------- ----------------------
$ 1,581,164 $7,800
$ 1,739,280 $15,600
(ii) For the period July 1 through December 31, 1997, the
Board, in its sole discretion, shall establish a budget for pre-tax
income of the Company (excluding Pamarco Europe) in accordance with
generally accepted accounting principles consistently applied and the
Employee's bonus will vary as a percentage of Salary in relation to the
percentage achievement of that budget as follows:
Percentage of Percentage of Salary
Budget Attained Earned as Bonus
-------------------------------------------
<90% 0%
90% 5%
100% 10%
110% 15%
125% 17.5%
2
3
(iii) For the period January 1 through December 31, 1998, the
Board, in its sole discretion, shall establish a budget for pre-tax
income of the Company (excluding Pamarco Europe) in accordance with
generally accepted accounting principles consistently applied and the
Employee's bonus will vary as a percentage of Salary in relation to the
percentage achievement of that budget as follows:
Percentage of Percentage of Salary
Budget Attained Earned as Bonus
-------------------------------------------
<90% 0%
90% 10%
100% 20%
110% 30%
125% 35%
(iv) For the period January 1 through June 30, 1999, the
Board, in its sole discretion, shall establish a budget for pre-tax
income of the Company (excluding Pamarco Europe) in accordance with
generally accepted accounting principles consistently applied and the
Employee's bonus will vary as a percentage of Salary in relation to the
percentage achievement of that budget as follows:
Percentage of Percentage of Salary
Budget Attained Earned as Bonus
<90% 0%
90% 5%
100% 10%
110% 15%
125% 17.5%
For percentage of budget achievement between the benchmarks, the percentage of
Salary shall be linearly interpolated, provided that no bonus shall be paid for
achievement of less than the minimum budget goals set forth above and the
maximum bonus shall be as set forth above in any event.
(c) During the Employment Term, the Company shall provide, the Employee
with fringe benefits that are substantially equivalent to the fringe benefits
specified on Exhibit "A" (the "Fringe Benefits").
3
4
5. AGREEMENT NOT TO COMPETE.
During the Non-Competition Period (defined below), the Employee shall
not, within the United States, directly or indirectly, in any capacity, render
his services, engage or have a financial interest in, any business that shall be
competitive with any of those business activities in which the Company has been
or shall be engaged during his employment by the Company, including the
manufacture of anilox rolls, embossing rolls, offset rubber rolls and offset
printing presses; nor shall the Employee assist any person or entity that shall
be engaged in such business, including by making Company Information (defined
below) available to any such person or entity. If a court determines that the
foregoing restrictions are too broad or otherwise unreasonable under applicable
law, including with respect to time or space, the court is hereby requested and
authorized by the parties hereto to revise the foregoing restriction to include
the maximum restrictions allowable under applicable law. The "Non-Competition
Period" means the period during which the Employee is either employed by the
Company or being paid the Salary despite his termination under Section 7, plus
an additional one year after the termination of such employment or payments,
whichever is later.
6. TERMINATION WITHOUT COMPENSATION.
(a) TOTAL DISABILITY. If the Employee becomes totally disabled (as
defined below), the Employment Term may be terminated by the Company, and the
Company shall have no further liability or obligation to the Employee hereunder
except as follows: the Employee shall receive (i) any unpaid Salary and Fringe
Benefits that have accrued through the date of termination; (ii) continued
Salary for three months following the date he is considered totally disabled and
a proportionate share of any bonus otherwise payable in accordance with the
provisions of Section 4 for the calendar year in which he is considered to be
totally disabled, determined in the same manner as in Section 7 and (iii)
whatever benefits that he may be entitled to receive under any then existing
disability benefit plans of the Company, including any such plans included in
the Fringe Benefits. For the purposes hereof, the Employee shall be deemed to be
"totally disabled" if the Employee is considered totally disabled under the
Company's group disability plan in effect at that time, if any, or in the
absence of any such plan, under applicable Social Security regulations. In the
event of any dispute as to the disability of the Employee under this Section
6(a), the Employee shall submit to a physical examination by a licensed
physician mutually satisfactory to the Company and the Employee, the cost of
such examination to be paid by the Company, and the determination of such
physician shall be determinative.
(b) DEATH. If the Employee dies, this Employment Agreement shall
terminate, and thereafter the Company shall not have any further liability or
obligation to the Employee, his executors, administrators, heirs, assigns or any
other person claiming under or through him except that the Employee's estate
shall receive any unpaid Salary and Fringe Benefits that have accrued through
the date of termination.
4
5
(c) CAUSE. The Company may terminate the Employment Term for "cause" by
giving the Employee 30 days' notice of the termination date, and thereafter the
Company shall not have any further liability or obligation to the Employee,
except that the Employee shall receive any unpaid Salary and Fringe Benefits
that have accrued through the date of termination, net of any liabilities that
the Employee may have to the Company. For purposes of this Agreement, "cause"
shall mean the failure of the Employee to observe or perform (other than by
reason of illness, injury or incapacity) any of the material terms or provisions
of this Agreement, dishonesty, willful misconduct, material neglect of the
Company's business, conviction of a felony or other crime involving moral
turpitude, misappropriation of funds or habitual insobriety.
7. TERMINATION WITH COMPENSATION.
The Company shall have the right to terminate the Employment Term
without cause at any time by giving the Employee 30 days' notice of the
termination date. Under such circumstances, the Employee's Salary under Section
4(a) then in effect hereunder and the Fringe Benefits specified on Exhibit "B"
will continue for the duration of the Employment Term unless a different term is
specified on Exhibit "B"; provided, however, that such Fringe Benefits shall not
continue in effect for any period during which the Company is precluded from
continuing the Employee's participation in the plan or program under which any
such Fringe Benefit is provided by reason of any applicable law or regulation,
including the Federal tax law regarding discrimination. In addition, for the
calendar year in which the termination occurs, the Employee shall be entitled to
a proportionate bonus under Section 4(b) by assuming that he remained employed
for the full year and multiplying the bonus that otherwise would have been due
by a fraction the numerator of which is the number of full months the Employee
was actually employed by the Company during such calendar year and the
denominator of which is 12. Such payment shall be made at the same time as the
Company pays bonuses to other executives for that year. The Employee shall not
be entitled to any compensation under this Section 7 unless the Employee
executes and delivers to the Company after a notice of termination a release in
a form satisfactory to the Company in its sole discretion by which the Employee
releases the Company from any obligations and liabilities of any type
whatsoever, except for the Company's obligation to provide the Salary and Fringe
Benefits specified in this Section 7. The parties hereto acknowledge that the
Salary and Fringe Benefits to be provided under this Section 7 are to be
provided in consideration for the above-specified release.
8. INVENTIONS, DESIGNS AND PRODUCT DEVELOPMENTS.
All inventions, innovations, designs, ideas and product developments
(collectively, the "Developments"), developed or conceived by the Employee,
solely or jointly with others, whether or not patentable or copyrightable, at
any time during the Employment Term and that relate to the actual or planned
business activities of the Company and all of the Employee's right, title and
interest therein, shall be the exclusive property of the Company. The Employee
hereby assigns, transfers and conveys to the Company all of his right, title and
interest in and to any and all such Developments. The Employee shall disclose
fully, as soon as practicable and in writing, all Developments to the Board. At
any time and from time to time, upon the request of the Company,
5
6
the Employee shall execute and deliver to the Company any and all instruments,
documents and papers, give evidence and do any and all other acts that, in the
opinion of counsel for the Company, are or may be necessary or desirable to
document such transfer or to enable the Company to file and prosecute
applications for and to acquire, maintain and enforce any and all patents,
trademark registrations or copyrights under United States or foreign law with
respect to any such Developments or to obtain any extension, validation,
re-issue, continuance or renewal of any such patent, trademark or copyright. The
Company will be responsible for the preparation of any such instruments,
documents and papers and for the prosecution of any such proceedings and will
reimburse the Employee for all reasonable expenses incurred by him in compliance
with the provisions of this Section.
9. CONFIDENTIAL INFORMATION.
(a) The Employee has had and will have possession of or access to
confidential information relating to the business of the Company, including
writings, equipment, processes, drawings, reports, manuals, invention records,
financial information, business plans, customer lists, the identity of or other
facts relating to prospective customers, inventory lists, arrangements with
suppliers and customers, computer programs, or other material embodying trade
secrets, customer or product information or technical or business information of
the Company. All such information, other than any information that is in the
public domain through no act or omission of the Employee or which he is
authorized to disclose, is referred to collectively as the "Company
Information." During and after the Employment Term, the Employee shall not (i)
use or exploit in any manner the Company Information for himself or any person,
partnership, association, corporation or other entity other than the Company,
(ii) remove any Company Information, or any reproduction thereof, from the
possession or control of the Company or (iii) treat Company Information
otherwise than in a confidential manner.
(b) All Company Information developed, created or maintained by the
Employee, alone or with others while employed by the Company, and all Company
Information maintained by the Employee thereafter, shall remain at all times the
exclusive property of the Company. The Employee shall return to the Company all
Company Information, and reproductions thereof, whether prepared by him or
others, that are in his possession immediately upon request and in any event
upon the completion of his employment by the Company.
10. REMEDIES.
The Employee expressly acknowledges that the remedy at law for any
breach of Sections 5, 8 and 9 will be inadequate and that upon any such breach
or threatened breach, the Company shall be entitled as a matter of right to
injunctive relief in any court of competent jurisdiction, in equity or
otherwise, and to enforce the specific performance of the Employee's obligations
under these provisions without the necessity of proving the actual damage to the
Company or the inadequacy of a legal remedy. Subject to the remainder of this
Section 10, the rights conferred upon the Company
6
7
by the preceding sentence shall not be exclusive of, but shall be in addition
to, any other rights or remedies which the Company may have at law, in equity or
otherwise.
11. GENERAL.
(a) GOVERNING LAW. The terms of this Agreement shall be governed by the
laws of the State of New Jersey.
(b) COMPANY. For purposes of Sections 5, 8, 9 and 10, the term
"Company" shall be deemed to include any incorporated or unincorporated
subsidiaries or affiliates of the Company, including Pamarco Europe Ltd. and any
majority-owned subsidiaries thereof.
(c) BINDING EFFECT. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit and be enforceable by the
respective heirs, representatives, successors (including any successor as a
result of a merger or similar reorganization) and assigns of the parties hereto,
except that the duties and responsibilities of the Employee hereunder are of a
personal nature and shall not be assignable in whole or in part by the Employee.
(d) NOTICES. All notices required to be given under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent by Federal Express or other overnight
delivery service, addressed as follows:
TO EMPLOYEE:
Xxxxx X. Xxxx
---------------------
---------------------
TO THE COMPANY:
Pamarco Technologies Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxxx, XX 00000
Attn: Chairman of the Board
7
8
With a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
and
Bradford Ventures Ltd.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx
(e) ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements or understandings of the parties regarding
these matters, including the Consulting Agreement. This Agreement may not be
modified or amended in any way except in writing by the parties hereto.
(f) DURATION. Notwithstanding the termination of the Employment Term
and of the Employee's employment by the Company, this Agreement shall continue
to bind the parties for so long as any obligations remain under the terms of
this Agreement.
(g) WAIVER. No waiver of any breach of this Agreement shall be
construed to be a waiver as to succeeding breaches.
(h) SEVERABILITY. If any provision of this Agreement or application
thereof to anyone under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement as of the day and year first written
above.
PAMARCO TECHNOLOGIES INC.
By:
--------------------------
Name:
Title:
8
9
-----------------------------
XXXXX X. XXXX
9
10
EXHIBIT A
FRINGE BENEFITS
---------------
(a) Medical, dental, term life, disability and travel accident
insurance coverage, all at levels comparable to those provided to other senior
officers of the Company.
(b) Participation in all pension and 401(k) savings plans, all at
levels comparable to those provided to other senior officers of the Company..
(c) Provision to Employee of a late model automobile comparable to that
provided to other senior officers of the Company, including all related fuel,
maintenance, repair, insurance and other costs.
(d) Reimbursement, in accordance with the Company's policies, upon
proper accounting, of reasonable expenses and disbursements incurred by Employee
in the course of his duties.
(e) Paid holidays in accordance with the Company's policies.
(f) Paid vacation of four weeks per year.
A-1
11
EXHIBIT B
FRINGE BENEFITS
---------------
(a) Medical, dental, term life, disability and travel accident
insurance coverage, all at levels comparable to those provided to other senior
officers of the Company.
(b) Participation in all pension and 401(k) savings plans, all at
levels comparable to those provided to other senior officers of the Company.
B-1
