EXHIBIT 10.2
EXECUTION COPY
AGREEMENT
AGREEMENT, dated as of September 1, 2001, by and between PAXAR
CORPORATION (the "Company"), and XXXXXX XXXXXXXX ("Executive").
1. PURPOSE.
The Company acknowledges and recognizes the value of Executive's services, which
services are of special, unique and extraordinary character. The Company desires
to continue to employ Executive and retain his abilities and services as an
employee through December 31, 2001 and, for two years thereafter, to continue to
obtain his advice as a consultant to the Company. In recognition of his long and
faithful service to the Company, the Company also desires to provide Executive
and his spouse with the retirement benefits specified in this Agreement.
2. 1989 EMPLOYMENT AGREEMENT SUPERSEDED.
(a) TERMINATION OF 1989 AGREEMENT. Executive and the Company originally
entered into an Employment Agreement dated as of February 13, 1989, and
amended as of October 1, 1998, and extended from time to time
thereafter (as amended and extended, the "1989 AGREEMENT"). The parties
have agreed that the terms and conditions set forth in this Agreement
shall supersede any and all provisions of the 1989 Agreement and any
other existing oral or written agreements, representations, or
warranties, between Executive and the Company, and that such agreements
shall be null and void and of no further force and effect, except as
otherwise specifically provided in this Agreement.
(b) SATISFACTION OF PRIOR OBLIGATIONS. Notwithstanding the termination of
the 1989 Agreement, as of the date hereof (the "EFFECTIVE DATE"), the
Company shall be required to pay Executive in accordance with the terms
of 1989 Agreement (i) any accrued but unpaid base salary under the 1989
Agreement for services rendered before the Effective Date, (ii) the
amount of any compensation earned and deferred under the 1989 Agreement
by Executive before the Effective Date, if any, and (iii) any expenses
required to be reimbursed under the 1989 Agreement that have accrued,
but are unpaid as of the Effective Date.
3. EMPLOYMENT.
The Company hereby agrees to continue to employ Executive as an employee and a
consultant, and Executive hereby agrees to continue to be employed by the
Company as an employee and a consultant, upon the terms, and subject to the
conditions, set forth in this Agreement.
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4. PERIOD OF EMPLOYMENT AND CONSULTANCY.
(a) EMPLOYMENT PERIOD. The parties agree that Executive's last day of
employment with the Company as an employee will be December 31, 2001,
unless his employment is terminated earlier in accordance with Section
9 below. As used in this Agreement, the term "EMPLOYMENT PERIOD" refers
to Executive's period of employment as an employee from the Effective
Date until his last day of such employment.
(b) CONSULTING PERIOD. Provided that this Agreement shall not have been
terminated in accordance with Section 9 below, the period for which
Executive shall act as a consultant hereunder shall commence on January
1, 2002, and shall end on December 31, 2003. As used in this Agreement,
the phrase "CONSULTING PERIOD" refers to Executive's period of
employment as a consultant hereunder from January 1, 2002, until his
last day of employment as a consultant.
5. MEMBERSHIP ON BOARD OF DIRECTORS.
Executive shall continue to serve as a director of the Company until expiration
of his current term and until his successor is duly elected and qualified.
Thereafter, the Company shall have no obligation to include Executive in the
management slate for election as a director or to recommend his election at any
meeting of stockholders. Executive may resign as a director of the Company at
any time upon written notice to the company without liability or otherwise
affecting the Company's obligations under this Agreement. In the event of
Executive's resignation as a director, the Company (and not the Executive) shall
make the public announcement of such resignation, which announcement shall be
subject to Executive's prior review and approval, which approval shall not be
unreasonably withheld.
6. POSITIONS; DUTIES AND RESPONSIBILITIES.
(a) DIRECTOR. As a member of the Company's Board of Directors (the
"BOARD"), Executive shall have the same duties and responsibilities as
other members of the Board.
(b) EMPLOYEE. As an employee of the Company, during the Employment Period:
(i) Executive shall continue to serve as an officer of the Company
in the same capacity and with the same titles as that in which
he served on the Effective Date, and as such officer,
Executive shall have the same duties and responsibilities as
he had on the Effective Date and such other duties and
responsibilities as he and the Company's Chief Executive
Officer may from time to time agree upon.
(ii) Executive shall serve the Company faithfully, to devote such
business time, attention and energies as is necessary or
appropriate to the performance of his duties, and to perform
the duties under this Agreement to the best of his abilities.
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(iii) Executive shall (i) comply with all applicable laws, rules and
regulations, and all requirements of all applicable
regulatory, self-regulatory, and administrative bodies; (ii)
comply with the Company's rules, procedures, policies,
requirements, and directions; and (iii) not engage in any
other business or employment without the written consent of
the Company, except as otherwise specifically provided herein.
(c) CONSULTANT. As a consultant of the Company, during the Consulting
Period:
(i) Executive shall perform such consulting services as may be
requested from time to time by the Company's Board or its
Chief Executive Officer, consistent with Executive's previous
experience and qualifications as a senior executive officer
and employee of the Company.
(ii) Executive shall perform such consulting services at such time
or times during normal business hours and at such locations as
Executive and the Company shall mutually agree, provided that
Executive shall not be required to devote more than ten (10)
hours in any week to the performance of such consulting
services, it being understood that if Executive performs such
services for fewer than ten (10) hours in any week, the
difference shall not be carried over to a subsequent week.
7. COMPENSATION AND BENEFITS.
Executive shall receive the following compensation and benefits during the
Employment Period and the Consulting Period (together the "TERM").
(a) BASE SALARY. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate in effect immediately prior
to the Effective Date of this Agreement ("Base Salary") in accordance
with the compensation policy applicable to the Company's senior
executive officers. Base Salary shall be paid during the Employment
Period in accordance with the Company's standard payroll practice for
senior executive officers. During the Consulting Period, the Company
shall continue to pay Executive the Base Salary in arrears in equal
monthly installments on the last business day of each month.
(b) ANNUAL INCENTIVE COMPENSATION. For the Company's fiscal year ending
December 31, 2001, Executive shall be eligible to receive incentive
compensation under the incentive compensation plan in effect and
applicable to Executive on the Effective Date.
(c) STOCK OPTIONS. All outstanding unexercised stock options granted to
Executive under the Company's stock option plans (A) shall become fully
vested and exercisable as of December 31, 2001, and (B) shall continue
to be exercisable by Executive until the option expiration date
(determined without regard to Executive's employment termination).
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(d) BENEFIT PLANS, FRINGE BENEFITS AND VACATIONS. During the Employment
Period, Executive shall be eligible to participate in or receive
benefits under any pension plan, 401(k) savings plan, nonqualified
deferred compensation plan, supplemental executive retirement plan,
medical and dental benefits plan, life insurance plan, short-term and
long-term disability plans, supplemental and/or incentive compensation
plans, or any other employee benefit or fringe benefit plan, generally
made available by the Company to senior executive officers in
accordance with the eligibility requirements of such plans and subject
to the terms and conditions set forth in this Agreement. During the
Consulting Period, Executive shall be eligible to participate in the
Company's medical and dental benefits plan and life and disability
insurance plan on the same basis as the Company's senior executive
officers.
(e) COMPANY-PROVIDED AUTOMOBILE. Until the earlier of the expiration of the
Term or the expiration of the lease of the automobile that Executive is
using on the Effective Date, the Company shall continue to provide
Executive with the full-time use of such automobile and payment of
related expenses at the same style and level as provided to Executive
immediately prior to the Effective Date.
(f) EXPENSE REIMBURSEMENT. During the Term, the Company shall promptly
reimburse Executive for the ordinary and necessary business expenses
incurred by Executive in the performance of his duties under this
Agreement in accordance with the Company's customary practices
applicable to senior executive officers.
8. SUPPLEMENTAL RETIREMENT BENEFIT.
The Company shall pay Executive a supplemental retirement benefit as follows:
(a) CALCULATION OF BENEFIT. The supplemental retirement benefit will be an
amount equal to 60% of Executive's Final Average Compensation. For
purposes of this Agreement, Executive's "FINAL AVERAGE COMPENSATION"
shall be equal to the average of Executive's Total Compensation for the
three (3) calendar years during the period from and including 1996 to
and including 2001 (or any part of 2001) in which Executive earned the
highest Total Compensation. "Total Compensation" means the total Base
Salary and incentive compensation earned by Executive for a calendar
year, including compensation earned in one calendar year and paid or
payable in a subsequent calendar year.
(b) PAYMENT OF BENEFIT TO EXECUTIVE. The Company shall pay the supplemental
retirement benefit to Executive until his death in equal monthly
installments commencing on the first day of the first calendar month
after Executive's 65th birthday. Executive may elect by written notice
to the Company to commence the supplemental retirement benefit prior to
his 65th birthday, but no earlier than his 60th birthday, subject to a
3% per year reduction in the percentage of his Final Average
Compensation that he is entitled to receive (e.g., if Executive elects
to commence receipt of the supplemental benefit
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immediately after his 64th birthday, his supplemental retirement
benefit would be equal to 57% of his Final Average Compensation).
(c) SPOUSE'S BENEFIT IF PAYMENTS HAVE COMMENCED. In the event of
Executive's death after commencement of payments of such supplemental
retirement benefit to Executive, the Company shall pay to his surviving
spouse until her death or such earlier date as determined in accordance
with Section 23(f) below an amount equal to 50% of the supplemental
retirement benefit determined under Section 8(a) above in equal monthly
installments. Such payments will continue without interruption at the
adjusted rate following Executive's date of death.
(d) SPOUSE'S BENEFIT IF PAYMENTS HAVE NOT COMMENCED. In the event of
Executive's death before commencement of payments of the supplemental
retirement benefit, commencing on the first day of the first calendar
month after Executive would have attained age 65, the Company shall pay
Executive's surviving spouse, until her death or such earlier date as
determined in accordance with Section 23(f) below, in equal monthly
installments an amount equal to 50% of the supplemental retirement
benefit that would have been payable to Executive. Executive's
surviving spouse may elect by written notice to the Company to commence
the supplemental retirement benefit prior to the date on which
Executive would have attained age 65, but not earlier than the date on
which Executive would have attained age 60, subject to a 3% per year
reduction in percentage of Executive's Final Average Compensation that
she is entitled to receive (e.g., if Executive's surviving spouse
elects to commence payment of the supplemental retirement benefit
immediately after Executive would have attained age 64, the
supplemental retirement benefit would be equal to 27% of Executive's
Final Average Compensation).
(e) BENEFIT IMMEDIATELY VESTED. The Company shall be required to pay the
supplemental retirement benefit to Executive and his surviving spouse
in accordance with this Section 8, regardless of the reason for
termination of Executive's employment under this Agreement, including a
termination by the Company for Cause under Section 9(c).
9. TERMINATION OF AGREEMENT.
Executive's employment under this Agreement as an employee or consultant may be
terminated prior to December 31, 2003 (the "EXPIRATION DATE") under any of the
circumstances set forth in this Section 9.
(a) DEATH. Executive's employment as an employee or consultant shall
terminate upon Executive's death.
(b) TOTAL DISABILITY. The Company may terminate Executive's employment as
an employee or consultant upon his becoming "Totally Disabled." For
purposes of this Agreement, Executive shall be "Totally Disabled" if
Executive is physically or mentally incapacitated so as to render
Executive incapable of performing his usual and customary duties under
this Agreement without reasonable accommodation. Executive's receipt of
disability
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benefits under the Company's long-term disability benefits plan (the
"LTD Plan") or receipt of Social Security disability benefits shall be
deemed conclusive evidence of Total Disability for purpose of this
Agreement; provided, however, that in the absence of Executive's
receipt of such long-term disability benefits or Social Security
benefits, the Company's Board of Directors (the "Board") may, in its
reasonable discretion (but based upon appropriate medical evidence),
determine that Executive is Totally Disabled.
(c) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
Executive's employment as an employee or consultant for "Cause". Such
termination shall be effective as of the date specified in the written
notice of termination provided to Executive.
(i) For purposes of this Agreement, the term "Cause" shall mean
any of the following: (A) conviction (including conviction on
a nolo contendere plea) of (I) a crime involving the
commission by Executive of a felony or (II) a criminal act
intended to result directly or indirectly in substantial gain
or personal enrichment to Executive at the expense of the
Company, but excluding any such conviction that results solely
from Executive's title or position with the Company and is not
based on his personal conduct; or (B) willful misconduct or
gross negligence in connection with the business of the
Company or an affiliate occurring after the Effective Date of
this Agreement that results in material damage to the Company
or the affiliate or to their respective businesses, whether
monetary or otherwise; or (C) persistent failure to observe or
perform Executive's duties and responsibilities or to comply
with Company policies as set forth in Section 6 hereof after
written notice thereof by the Company and, if capable of cure,
failure to cure the same within thirty (30) days after such
notice; or (D) breach of any of the covenants set forth in
Section 12 or 13 of this Agreement.
(ii) Executive's employment shall in no event be considered to have
been terminated by the Company for Cause if the act or failure
to act upon which such termination is based was done or
omitted to be done as a result of bad judgment or negligence
on Executive's part.
(d) TERMINATION BY EXECUTIVE. Executive may terminate his employment under
this Agreement at any time before the Expiration Date for any reason
after providing thirty (30) days' prior written notice to the Company.
(e) NOTICE OF TERMINATION. Any termination by the Company or by Executive
under this Agreement shall be communicated by notice of termination to
the other party hereto. For purposes of this Agreement, a Notice of
Termination shall mean a notice in writing which shall indicate the
specific termination provision in this Agreement relied upon to
terminate Executive's employment and, if applicable, shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated.
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10. COMPENSATION AND BENEFITS PAYABLE FOLLOWING TERMINATION PRIOR TO THE
EXPIRATION DATE.
In the event that Executive's employment is terminated prior to the Expiration
Date, Executive (or his surviving spouse, beneficiary or estate, as the case may
be) shall receive the following compensation and benefits:
(a) DEATH OR TOTAL DISABILITY. In the event that Executive's employment is
terminated by reason of his death as provided in Section 9(a) above or
his Total Disability as provided in Section 9(b) above:
(i) STOCK OPTIONS. All outstanding unexercised stock options
granted to Executive under the Company's stock option plans
(A) shall become fully vested and exercisable as of his
employment termination date and (B) shall continue to be
exercisable until the option expiration date (determined
without regard to Executive's employment termination).
(i) SUPPLEMENTAL RETIREMENT BENEFIT. The Company shall provide
Executive with the supplemental retirement benefit set forth
in Section 8 above and shall have no further obligations under
Section 7 hereof.
(b) TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE. In the event that
Executive's employment as an employee or consultant is terminated by
the Company for Cause pursuant to Section 9(c) above or by Executive
pursuant to Section 9(d) above, the Company shall provide Executive
with the supplemental retirement benefit set forth in Section 8 above
and shall have no further obligations under Section 7 hereof.
(c) TERMINATION FOR ANY OTHER REASON. If the Company terminates Executive's
employment under this Agreement, whether as an employee or as a
consultant, for a reason not set forth in Section 9, or if Executive
terminates his employment, whether as an employee or as a consultant,
as a result of a material breach of this Agreement by the Company, then
notwithstanding such termination of employment, the Company shall
continue to make the payments and provide the benefits set forth in
Section 7 until the earliest of (i) the Expiration Date, (ii) the date
of Executive's death, or (iii) the date of Executive's Total
Disability, and the Company shall provide Executive with the
supplemental retirement benefit set forth in Section 8 above.
(d) ANNUAL INCENTIVE COMPENSATION. In the event that Executive's employment
is terminated for any reason prior to December 31, 2001, the Company
shall pay Executive (or his personal representative) an amount equal to
the pro rata portion (based on the number of days of employment prior
to the termination date) of the annual incentive compensation that
would have been payable to Executive if he had continued in employment
through the end of the calendar year. Such amount will be paid at the
same time and in the same manner as the annual incentive compensation
for such year is paid to other senior executive officers.
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(e) EARNED BUT UNPAID COMPENSATION. Upon termination of Executive's
employment under Section 9 hereof, the Company shall pay Executive (or
his personal representative) any accrued but unpaid Base Salary for
services rendered to the date of termination, the amount of any
compensation previously earned and deferred by Executive, any earned
but unpaid incentive compensation for any calendar year ended prior to
the year in which is employment terminates, any accrued but unpaid
expenses required to be reimbursed under this Agreement, and any
vacation accrued to the date of the termination. The Company shall pay
all of the foregoing amounts, except for earned but unpaid incentive
compensation, within 30 days after the date of termination; earned but
unpaid incentive compensation for any calendar year ended prior to the
year in which Executive's employment terminates shall be paid at the
same time as the Company pays incentive compensation to its other
senior executives.
(f) OTHER COMPENSATION AND BENEFITS. Except as may otherwise be provided
under this Agreement,
(i) any benefits to which Executive may be entitled pursuant to
the plans, policies and arrangements referred to in Section
7(d) above shall be determined and paid in accordance with the
terms of such plans, policies and arrangements; and
(iii) Executive shall have no right to receive any other
compensation, or to participate in any other plan, arrangement
or benefit, with respect to future periods after such
termination or resignation.
11. ESTABLISHMENT OF TRUST FOLLOWING CHANGE OF CONTROL.
If Executive notifies the Company within thirty (30) days after a
Change of Control (as defined in Appendix A hereto) occurs that this
Section 11 is to become effective, the Company shall, as soon as
possible, but in no event later than five (5) business days after
receipt of such notice, take the following actions:
(i) The Company shall establish an irrevocable trust for the
purpose of providing funds for the payment of the supplemental
retirement benefits payable pursuant to Section 8 of this
Agreement. Such trust shall be a grantor trust containing
provisions which are the same as, or are similar to, the
provisions contained in the model "rabbi trust" set forth in
IRS Revenue Procedure 92-64. The Company shall pay all costs
relating to the establishment and maintenance of the trust and
the investment of funds held in such trust.
(ii) The Company shall make an irrevocable contribution to the
Trust in an amount that is sufficient to pay Executive (and
his surviving spouse) the supplemental retirement benefit
pursuant to Section 8 above
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The Company acknowledges that regardless of the establishment of such
trust, the Company shall continue to be liable for payment of the
supplemental retirement benefits payable pursuant to Section 8 of this
Agreement in the event that the funds held in such trust are
insufficient to make all payments of such supplemental retirement
benefit provided for in Section 8.
12. RESTRICTIVE COVENANTS.
(a) RESTRICTIONS. Executive covenants that, except in furtherance of his
duties hereunder and as approved by the Board or Chief Executive
Officer:
(i) COMPETITIVE ACTIVITY. During the Restricted Period (as
hereinafter defined), Executive shall not directly or
indirectly, own any interest in, participate or engage in,
assist, render any services (including advisory services) to,
become associated with, work for, serve (in any capacity
whatsoever, including, without limitation, as an employee,
consultant, advisor, agent, independent contractor, officer or
director) or otherwise become in any way or manner connected
with the ownership, management, operation, or control of, any
business, firm, corporation, partnership, trust or other
business or governmental entity (collectively, together with
any individual, a "PERSON") that engages in, or assists others
in engaging in or conducting, any business that deals,
directly or indirectly, in products or services similar to or
competitive with the Company's product line or services
anywhere in the world that the Company does business as of
Executive's last day of employment; provided, however, that
the restrictions set -------- forth above shall not be deemed
to exclude the Executive from acting as director of a
corporation for the benefit of the Company with the consent of
the Board; and provided, -------- further, that the
restrictions set forth above shall not be deemed to prohibit
Executive from owning or acquiring securities issued by any
corporation whose securities are listed on a national
securities exchange or are quoted on Nasdaq or the OTC
Bulletin Board, provided that -------- the Executive at no
time owns, directly or indirectly, beneficially or otherwise,
one (1%) percent or more of any class of any such
corporation's outstanding capital stock.
(ii) NON-SOLICITATION OF CUSTOMERS. During the Restricted Period,
Executive shall not knowingly provide or solicit to provide to
any Person any goods or services that are competitive with
those provided by the Company or that would be competitive
with the goods or services that the Company has planned to
provide. The term "CUSTOMER" shall mean any Person to whom the
Company has provided goods and services during the last five
(5) years of Executive's employment by the Company.
(iii) NON-SOLICITATION OF COMPANY PERSONNEL. During the Restricted
Period, Executive will not solicit for employment, or attempt
to solicit, directly or by assisting others, any employee of
Company with whom Executive had contact during Executive's
employment with the Company. For the purposes of this
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paragraph, "contact" means any interaction whatsoever between
Executive and the other employee.
(iv) PROTECTED INFORMATION. Executive shall not divulge to others,
nor shall he use at any time during the Restricted Period or
thereafter, any confidential or trade secret information
obtained by him during the course of his employment with the
Company, including information relating to sales, salesmen,
sales volume or strategy, customers, formulas, processes,
methods, machines, manufactures, compositions, ideas,
improvements or inventions belonging to or relating to the
business of the Company, or its subsidiary or affiliated
companies.
(v) NON-DISPARAGEMENT. Executive covenants and agrees that during
the Restricted Period or at any time thereafter, Executive
shall not, directly or indirectly, in public or private,
deprecate, impugn, disparage, or make any remarks that would
tend to or be construed to tend to defame the Company or any
of its employees, members of its board of directors or agents,
nor shall Executive assist any other person, firm or company
in so doing.
(b) DEFINITION OF "RESTRICTED PERIOD." For purposes of this Agreement, the
term "RESTRICTED PERIOD" shall mean the Term and the period of five (5)
years after the end of the Term.
(c) COMPANY'S COVENANT. The Company covenants and agrees that during the
Restricted Period or at any time thereafter, the Company shall not,
directly or indirectly, in public or private, deprecate, impugn,
disparage, or make any remarks that would tend to or be construed to
tend to defame Executive, nor shall the Company assist any other
person, firm or company in so doing.
(d) ENFORCEMENT OF COVENANTS. Executive and the Company acknowledge that
his or its breach of any of the restrictive covenants contained in this
Section 12 may cause irreparable damage to the Company or the
Executive, as applicable, for which remedies at law would be
inadequate. Accordingly, if Executive or the Company breaches or
threatens to breach any of the provisions of this Section 12, the
Company or the Company, as the case may be, shall be entitled to
appropriate injunctive relief, including, without limitation,
preliminary and permanent injunctions, in any court of competent
jurisdiction, restraining Executive or the Company, as the case may be,
from taking any action prohibited hereby. This remedy shall be in
addition to all other remedies available to the Company or Executive at
law or in equity. If any portion of this Section 12 is adjudicated to
be invalid or unenforceable, this Section 12 shall be deemed amended to
delete therefrom the portion so adjudicated, such deletion to apply
only with respect to the operation of this Section 12 in the
jurisdiction in which such adjudication is made.
13. PROPRIETARY PROPERTY.
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(a) OWNERSHIP OF PROPRIETARY PROPERTY. Executive agrees that any and all
inventions, discoveries, investigations, know-how, trade secrets and
developments or improvements in technology (collectively "Inventions")
as well as any and all Proprietary Information (as defined in Section
13(b)) created, developed, conceived of or discovered during the
Employment Period (i) by Executive (solely or jointly with others)
either (A) in the course of his employment or engagement, on the
Company's time or with the Company's materials or facilities, or (B)
relating to any subject matter with which his work for the Company is
or may be concerned or to any business in which the Company or any of
its subsidiaries or affiliated companies is involved, regardless of how
or when he shall have created, developed, conceived, or discovered such
Inventions or Proprietary Information (collectively, "PROPRIETARY
PROPERTY"), or (ii) by or for the Company, or (iii) by any independent
Person and thereafter acquired by the Company, and which are within the
Executive's knowledge or possession in the case of (i) above or that
come into the Executive's knowledge or possession during the Restricted
Period in the case of (ii) or (iii) above, shall be, if created,
developed, conceived of or discovered by the Executive, promptly
disclosed to the Company, or shall be, if otherwise developed or
acquired by the Company, received by Executive as an employee,
consultant or retiree of the Company and not in any way for his own
benefit. Executive shall neither have nor obtain any right, title or
interest in or to such Proprietary Property unless and until the
Company shall expressly and in writing waive the rights that it has
therein and thereto under the provisions of this Section. With respect
to any and all Proprietary Property that is invented, created, written,
developed, furnished or produced by Executive, or suggested by
Executive to the Company, during the Term, Executive does hereby agree
that all such Proprietary Property shall be the exclusive property of
the Company, and that the Executive shall neither have nor retain any
right, title or interest, of any kind therein and thereto or in and to
any results or proceeds therefrom. At any time, whether during or after
the Term, the Executive will, upon the request and at the expense of
the Company, (A) obtain patents or copyrights on, or (B) permit the
Company to patent or copyright, any such Proprietary Property,
whichever (A) or (B) is appropriate, and/or (C) execute, acknowledge
and deliver any and all assignments, instruments of transfer, or other
documents, that the Company deems necessary or appropriate to transfer
to and vest in the Company all right, title and interest in and to such
Proprietary Property and to evidence the Company's ownership of such
Proprietary Property, including, without limitation, taking all steps
necessary to enable the Company to publish or protect said Proprietary
Property by patents or otherwise in any and all countries and to render
all such assistance as the Company may require in any patent office
proceeding or litigation involving said Proprietary Property. Executive
shall not, without limitation as to time or place, use any Proprietary
Property except on Company business, during or after the Employment
Period, nor disclose the same to any other Person or individual except
for disclosure on Company business or as may be required by law.
(b) DEFINITION OF PROPRIETARY INFORMATION. As used in this Agreement,
"Proprietary Information" means any information about the affairs of
the Company or any of its subsidiaries or affiliates, including,
without limitation, trade secrets, trade "know-how", inventions,
customer lists, client lists, business plans, operational methods,
pricing
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policies, marketing plans, sales plans, identity of suppliers, trading
positions, sales, profits or other financial information, which is
confidential to the Company or any of its subsidiaries or affiliates or
is not generally known in the relevant trade, regardless of whether
Executive developed such information.
(c) DISCLOSURE OF PROPRIETARY PROPERTY. During the Term and thereafter, the
Executive will not, directly or indirectly, lecture upon, publish
articles concerning, use, disseminate, disclose, sell or offer for sale
any Proprietary Property without the Company's prior written
permission.
14. INDEMNIFICATION.
(a) INDEMNIFICATION AND PROCEDURES. The Company agrees that if the
Executive is made a party, or is threatened to be made a party, to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he is or was
a director, officer or employee of the Company or is or was serving at
the request of the Company as a director, officer, member, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, including services with respect to employee benefits
plans, whether or not the basis of such Proceeding is the Executive's
alleged action in an official capacity while serving as a director,
officer, employee or agent, the Executive shall be indemnified and held
harmless by the Company to the fullest extent legally permitted or
authorized by the Company's certificate of incorporation or bylaws or
resolutions of the Board or, if greater, by the laws of the Company's
state of incorporation against all cost, expense, liability and loss
(including without limitation, attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive
even if he has ceased to be a director, member, employee or agent of
the Company or other entity and shall inure to the benefit of the
Executive's heirs, executors and administrators. The Company shall
advance the Executive all reasonable costs and expenses incurred by him
in connection with a Proceeding within twenty (20) days after receipt
by the Company of a written request for such advance. Such request
shall include an undertaking by the Executive to repay the amount of
such advance if it shall ultimately be determined that he is not
entitled to be indemnified against such costs and expenses.
(b) NO PRESUMPTION. Neither the failure of the Company (including its
Board, independent legal counsel or shareholders) to have made a
determination prior to the commencement of any Proceeding concerning
payment of amounts claimed by the Executive under paragraph (a) above
that indemnification of the Executive is proper because he has met the
applicable standard of conduct, nor a determination by the Company
(including its Board, independent legal counsel or shareholders) that
the Executive has not met such applicable standard of conduct, shall
create a presumption that the Executive has not met the applicable
standard of conduct.
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(c) D&O LIABILITY INSURANCE. The Company shall continue and maintain a
directors' and officers' liability insurance policy covering the
Executive to the extent the Company provides such coverage for its
other current and former senior executive officers and directors.
15. WITHHOLDING OF TAXES.
The Company shall withhold from any compensation and benefits payable under this
Agreement all applicable federal, state, local, or other taxes.
16. ARBITRATION OF DISPUTES.
Except as provided in Section 13 above, any dispute, controversy or claim
arising out of or pursuant to this Agreement or the breach hereof shall be
settled by arbitration in the City of New York, State of New York. Such
arbitration shall be effected by arbitrators selected as hereinafter provided
and shall be conducted in accordance with the National Rules for the Resolution
of Employment Disputes, existing at the date thereof, of the American
Arbitration Association. The dispute, controversy or claim shall be submitted to
three arbitrators, one arbitrator to be selected by the Company, one arbitrator
to be selected by the Executive and the third arbitrator to be selected by the
two so selected by the Company and the Executive, or if they cannot agree on a
third, by the American Arbitration Association. In the event that either the
Company or the Executive within one (1) month after notification of any demand
for arbitration hereunder, shall not have selected its arbitrator and given
notice thereof to the other party in accordance with the terms of Section 22 of
this Agreement, the arbitrator for such party shall be selected by the American
Arbitration Association. Meetings of the arbitrators shall be held in New York,
New York, or at such other place or places as may be agreed upon by the parties
and the arbitrators. The results of final determination of any such arbitration
proceedings shall be binding on the parties hereto and a judgment may be entered
in any court having jurisdiction.
17. PAYMENT OF FEES, EXPENSES AND INTEREST.
If any arbitration is conducted under Section 16 hereof, the arbitrator(s) shall
have the right, in his (their) discretion, to award to the prevailing party all
fees and expenses (including legal, consultants' and other professional fees and
expenses) incurred by the prevailing party in connection with such arbitration.
In addition, if Executive is the prevailing party, the Company shall pay
Executive interest on any delayed payment under this Agreement at the applicable
federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
(or any successor to such section).
18. NO CLAIM AGAINST ASSETS.
Nothing in this Agreement shall be construed as giving Executive any claim
against any specific assets of the Company or as imposing any trustee
relationship upon the Company in respect of Executive. Except as provided in
Section 11 above, the Company shall not be required to establish a special or
separate fund or to segregate any of its assets in order to provide for the
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satisfaction of its obligations under this Agreement. Executive's rights under
this Agreement shall be limited to those of an unsecured general creditor of the
Company and its affiliates.
19. SUCCESSORS AND ASSIGNMENT.
Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. The rights and benefits of
Executive under this Agreement are personal to him, and no such right or benefit
shall be subject to voluntary or involuntary alienation, assignment or transfer;
provided, however, that nothing in this Section 19 shall preclude Executive from
designating a beneficiary or beneficiaries to receive any benefit payable on his
death.
20. ENTIRE AGREEMENT; AMENDMENT.
This Agreement shall supersede any and all existing oral or written agreements,
representations, or warranties between Executive and the Company or any of its
subsidiaries or affiliated entities relating to the terms of Executive's
employment. It may not be amended except by a written agreement signed by both
parties.
21. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.
22. NOTICES.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those persons listed below at
their following respective addresses or at such other address as each may
specify by notice to the others:
To the Company:
Paxar Corporation
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: General Counsel
To Executive:
Xxxxxx Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxxxxx, XX 00000
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23. MISCELLANEOUS.
(a) NO SET-OFF, ETC. The Company's obligation to make the payments provided
for in this Agreement and otherwise perform its obligations under this
Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense, or other claim, right, or action that the Company
may have against Executive.
(b) WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(c) SEVERABILITY. If any term or provision of this Agreement is declared
illegal or unenforceable by any court of competent jurisdiction and
cannot be modified to be enforceable, such term or provision shall
immediately become null and void, leaving the remainder of this
Agreement in full force and effect.
(d) HEADINGS. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this
Agreement.
(e) RULES OF CONSTRUCTION. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.
(f) TERM OF PAYMENTS TO AND BENEFITS FOR SURVIVING SPOUSE. If Xxxxxx
Xxxxxxxx, Executive's spouse on the date of this Agreement, is
Executive's surviving spouse at the time of his death, then she shall
be entitled to receive the payments to and benefits provided for a
surviving spouse under Section 8 of this Agreement for the periods
specified therein. However, if Xxxxxx Xxxxxxxx is not Executive's
surviving spouse at the time of his death, for purposes of Section 8 of
this Agreement, Executive's surviving spouse, if any, shall be entitled
to receive the amounts payable to and benefits provided for a surviving
spouse under this Agreement until the earlier of (i) the date of such
surviving spouse's death or (ii) the last date on which Xxxxxx Xxxxxxxx
would have been entitled to receive such payment or benefit, the date
of death of such surviving spouse being deemed to be the last day of
Xxxxxx Xxxxxxxx'x life expectancy used by the Company for purposes of
preparing the Company's financial statements to determine the accrual
of the Company's expenses resulting from such payments and benefits.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts will together constitute but one
Agreement.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year set forth below.
PAXAR CORPORATION EXECUTIVE
/s/ Xxx Xxxxxxx /s/ Xxxxxx Xxxxxxxx
--------------- -------------------
Xxx Xxxxxxx Xxxxxx Xxxxxxxx
Director
On Behalf of the Board of Directors
Date: October 31, 2001 Date: October 30, 2001
---------------- ----------------
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APPENDIX A
DEFINITION OF CHANGE OF CONTROL
For purposes of Section 11 of this Agreement, "CHANGE OF CONTROL" means:
(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")) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (1) the then outstanding shares of common stock of the
Company (the "OUTSTANDING COMPANY COMMON STOCK") or (2) 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 clause (A), the following acquisitions of stock shall
not result in a Change of Control: (1) any acquisition directly from
the Company, (2) any acquisition by the Company, (3) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or (4) any
acquisition by any corporation pursuant to a transaction that complies
with clauses (1), (2), and (3) of subsection (c) of this definition; or
(b) Individuals who, as of the date hereof, constitute the Company's Board
of Directors (the "INCUMBENT BOARD") cease for any reason to constitute
at least a majority of the Company's Board of Directors; 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 a majority 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 other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Company's Board of Directors; or
(c) Consummation of a reorganization, merger, or consolidation or 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, (1) all or substantially 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 60% of, respectively, the
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Business Combination, including, without limitation, a
corporation that as a result of such transaction owns the Company or
all or substantially all of the Company's assets either directly or
through one or more subsidiaries (any such corporation being referred
to
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herein as a "RESULTING CORPORATION"), in substantially the same
proportions as their ownership of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
immediately prior to such Business Combination, (2) no Person
(excluding any employee benefit plan (or related trust) of the Company
or a Resulting Corporation) beneficially owns, directly or indirectly,
30% or more of, respectively, the outstanding shares of common stock of
the Resulting Corporation or the combined voting power of the then
outstanding voting securities of such Resulting Corporation except to
the extent that such ownership existed prior to the Business
Combination, and (3) at least a majority of the members of the board of
directors of the Resulting Corporation were 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.
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