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EXHIBIT 10.18
EXECUTIVE
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is
entered into as of May 13, 2000, by and between Xxxxx X. Xxxxxx ("Executive")
and Geographics, Inc., a Wyoming corporation (the "Company"). Capitalized terms
not otherwise defined in the text of this Agreement have the meanings set forth
in Appendix A, which is incorporated into this Agreement by reference.
WITNESSETH:
WHEREAS, the Executive and the Company entered into an employment agreement
dated as of April 16, 1999 ("Prior Agreement") and desire to supercede the Prior
Agreement with this Agreement;
WHEREAS, in view of Executive's experience and demonstrated skills and
abilities and his unique qualifications that are needed by the Company, the
Company has determined that it is in the best interests of the Company and its
stockholders to engage Executive as the Company's Chairman of the Board of
Directors, President and Chief Executive Officer; and
WHEREAS, the Company recognizes the need to provide a level of compensation
and relative security that is competitive with that of other publicly held
companies and that provides the necessary economic and performance incentives
that will be of benefit to the Company stockholders in the long term.
In consideration of each of the specific premises set forth above and in
further consideration of the mutual agreements set forth herein, the parties
agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment by the Company of Executive and Acceptance by Executive.
The Company hereby employs Executive during the term of this Agreement in such
capacities and upon such conditions concerning rates of compensation, benefits
and other matters as are hereinafter stated. Executive hereby accepts such
employment and agrees faithfully, diligently and to the best of his ability to
discharge the responsibilities of the offices that he shall, as provided herein,
occupy.
1.2 Capacity. Executive shall be employed during the term of this
Agreement as Chairman of the Board, President and Chief Executive Officer of the
Company with such duties, functions, responsibilities and authority that are
commensurate with and appropriate for such
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position and as are from time-to-time set forth in the Bylaws of the Company and
otherwise delegated to Executive by the Company's Board of Directors (the
"Board"). Notwithstanding the foregoing, while performing services under this
Agreement, Executive does not have to reside in the State of Washington.
1.3 Term. Subject to the other provisions of this Agreement, the term of
this Agreement and Executive's employment hereunder shall be deemed to have
commenced on the date of this Agreement and shall continue until April 17, 2003,
or the occurrence of an Event of Termination (as defined in Section 3.1).
1.4 Extension of Term. The term of this Agreement will be automatically
extended for an additional one (1)-year period unless the Company delivers a
written notice to the Executive within ninety (90) days of the termination date
of this Agreement, or any extension thereof, that the term of this Agreement
will not be extended.
ARTICLE II
COMPENSATION, BENEFITS AND EXPENSE REIMBURSEMENT
2.1 Compensation and Benefits. For services rendered pursuant to this
Agreement, Executive's compensation and benefits will consist of the following:
(a) Base Salary. As salary compensation to Executive for his
performance of the services to be rendered hereunder and for his acceptance
of the responsibilities described herein and for his performance of all the
usual obligations of employment, the Company agrees to pay to Executive,
and Executive agrees to accept, during the term of this Agreement an annual
base salary of not less than One Hundred Seventy Thousand Dollars
($170,000) per year or such greater amount as the Board or the appropriate
committee thereof may from time-to-time determine (the "Base Salary"). At
least annually the Board or the appropriate committee thereof shall review
the Base Salary to determine whether it should be increased based on
Executive's performance, the performance of the Company, or other
circumstances then prevailing. The results of each review shall be
communicated to and discussed with Executive by the Board or the
appropriate committee thereof.
(b) Benefits. Executive shall, during the term of this Agreement (and
thereafter to the extent provided herein or in such plans), be eligible to
participate in the Company's pension and retirement plans, insurance and
death benefits in effect for all salaried employees, together with any
future improvements in such plans and benefits. In addition, Executive
shall be entitled during the term of this Agreement (and thereafter to the
extent provided for herein or in any such plan) to receive such other and
further benefits, including, without limitation, benefits under stock
option plans, supplemental retirement plans, performance unit plans,
deferred compensation and salary continuation plans, medical, health, life,
accident and disability insurance programs, pension benefits, vacations,
and any and all other benefits as are generally made applicable to key
executive employees of the Company, and such additional benefits, as may be
granted to him from time-to-time by the Board or the appropriate committee
thereof.
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(c) Stock Options. The Company has previously granted options to
purchase three hundred thousand (300,000) shares of the Company's common
stock (the "Salary Options") to Executive at an exercise price of $0.30 per
share, with such Salary Options being immediately vested and exercisable.
The Company also previously granted Executive options to purchase Five
Hundred Thousand (500,000) shares of the Company's common stock (the "Bonus
Options") to Executive at an exercise price of $0.50 with one-eighteenth
(1/18th) of such Bonus Options vesting and becoming exercisable on May 1,
1999 and each monthly anniversary thereafter. Effective as of the date
hereof, the Company shall grant Executive options to purchase ____ shares
of the Company's common stock at an exercise price of $_____ per share,
with such options being immediately vested and exercisable.
2.2 Expenses. The Company shall reimburse Executive for all reasonable
expenses (including the expense of maintaining Executive's membership in the
Milwaukee Club or other comparable business club) incurred in the course of the
performance of Executive's duties and responsibilities pursuant to this
Agreement and consistent with the Company's policies with respect to travel,
entertainment and miscellaneous expenses, and the requirements with respect to
the reporting of such expenses. In addition, the Company shall reimburse
Executive for housing or hotel accommodations in the Blaine, Washington, area
during the term of this Agreement, and Executive's travel to and from his
residences and other offices to Blaine, Washington.
2.3 Withholding. The Company shall be entitled to withhold from amounts to
be paid to Executive hereunder any federal, state or local withholding or other
taxes or charges that it is from time-to-time required to withhold. The Company
shall be entitled to rely on an opinion of counsel if any questions as to the
amount or requirement of any such withholding shall arise.
ARTICLE III
TERMINATION
3.1 Right to Terminate; Automatic Termination. Each of the following
events shall be considered an "Event of Termination":
(a) Termination By the Company for Cause. Subject to Section 3.2, upon
the occurrence of any of the following events, the Company may terminate
this Agreement and Employee's employment hereunder immediately for Cause
upon delivery of written notice to Employee:
(i) the commission by Employee of any act of willful or
intentional dishonesty that is material to the Company;
(ii) the conviction of Employee for an offense which involves
fraud, dishonesty, moral turpitude and constitutes a misdemeanor or
felony under federal, state or local laws and which is material to the
Company as reasonably determined by a majority of the Board; and
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(iii) the intentional and prolonged failure of Employee to devote
his best efforts to the performance of his duties and responsibilities
hereunder or, alternatively, the prolonged incompetent performance by
Employee of such duties and responsibilities, or breach of any term of
this Agreement which is material to the Company as reasonably
determined by a majority of the Board. For purposes of this subsection
(iii), the intentional and prolonged failure of Employee to perform
his duties or the prolonged incompetent performance of same or breach
shall be deemed to exist if Employee has not substantially corrected
such failure, performance, or breach within 60 days after having been
given written notice by the Company. During this 60-day period, the
Board may suspend the Executive from any or all Company activities.
(b) Termination by Death or Disability. Subject to Section 3.2,
Executive's employment and the Company's obligations under this Agreement
shall terminate as follows: (i) automatically, effective immediately and
without any notice being necessary, upon Executive's death; and (ii) in the
event that Executive becomes Disabled, by the Company giving notice of
termination to Executive.
(c) Executive Resigns or Voluntarily Terminates Employment. Subject to
Section 3.2, Executive may terminate his employment under this Agreement if
Executive provides the Company at least two weeks advance written notice.
(d) Termination by the Company Without Cause. Subject to the
obligations of the Company to Executive as provided in Section 3.2, the
Company may terminate Executive's employment without cause.
(e) Executive Terminates Employment for Good Reason or due to a Change
in Control. Subject to Section 3.2, Executive may terminate his employment
immediately for Good Reason or upon a Change in Control.
3.2 Rights Upon Termination.
(a) Section 3.1(a) Termination. If the Executive's employment is
terminated pursuant to Section 3.1(a), notwithstanding the other terms of
this Agreement, Executive shall have no further rights against the Company
hereunder, except the right to receive (i) any unpaid Base Salary with
respect to the period prior to the effective date of termination, and (ii)
reimbursement of expenses to which Executive is entitled under Section 2.2
hereof.
(b) Section 3.1 (b) Termination. If Executive's employment is
terminated pursuant to Section 3.1(b) because of the Executive's death,
notwithstanding the other terms of this Agreement, Executive shall have no
further rights against the Company hereunder, except for the right to
receive (i) any unpaid Base Salary with respect to the period prior to the
effective date of termination (ii) a death benefit in the amount equal to
six (6) months salary (iii) reimbursement of expenses to which Executive is
entitled under Section 2.2 hereof, and (iv) any unvested Salary Options,
Bonus Options or other options granted to Executive to purchase the
Company's common stock which are owned
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by Executive will become fully vested. If Executive's employment is
terminated pursuant to Section 3.1(b) because of the Executive's
disability, notwithstanding the other terms of this Agreement, Executive
shall have no further rights against the Company hereunder, except for the
right to receive (i) any unpaid Base Salary with respect to the period
prior to the effective date of termination (ii) a severance payment in the
amount equal to six (6) months salary (iii) reimbursement of expenses to
which Executive is entitled under Section 2.2 hereof, and (iv) any unvested
Salary Options, Bonus Options or other options granted to Executive to
purchase the Company's common stock which are owned by Executive will
become fully vested.
(c) Section 3.1(c) Terminations. If Executive's employment is
terminated pursuant to Section 3.1(c), notwithstanding the other terms of
this Agreement, Executive shall have no further rights against the Company
hereunder, except for the right to receive (i) any unpaid Base Salary with
respect to the period prior to the effective date of termination (ii)
reimbursement of expenses to which Executive is entitled under Section 2.2
hereof.
(d) Section 3.1(d) Termination. If Executive's employment is
terminated pursuant to Section 3.1(d), notwithstanding the other terms of
this Agreement, Executive shall have the right to receive (i) any unpaid
Base salary with respect to the period prior to the effective date of
termination, (ii) one year's Base Salary payable on the regular payroll
dates, subject to applicable withholding, for a period of one year
following termination, and (iii) reimbursement of expenses to which
Executive is entitled under Section 2.2 hereof, and (iv) any unvested
Salary Options, Bonus Options or other options granted to Executive to
purchase the Company's common stock which are owned by Executive will
become fully vested.
(e) Exclusive Remedy. To the extent permitted by applicable law, the
payments contemplated by this Section 3.2 shall constitute the exclusive
and sole remedy for any termination of Executive's employment with the
Company (whether pursuant to, or in violation of, the terms of this
Agreement), and Executive covenants not to assert or pursue any remedies,
other than an action to enforce the payments due to Executive under this
Agreement, at law or in equity, with respect to any termination of
employment, and will sign a full and complete release at the time of
termination, but prior to receipt of any compensation or benefits in excess
of the compensation or benefits already earned and accrued.
ARTICLE IV
CONFIDENTIALITY; NONCOMPETITION
4.1 Covenant Against Competition.
(a) Noncompetition. Without the prior written consent of the Company,
Executive, for a two-year period following his resignation, shall not
become involved directly or indirectly, as an employee, officer, director,
partner, consultant, owner (other than a minority shareholder interest of
not more than 5% of a company whose equity
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interests are publicly traded on a nationally recognized stock exchange or
over-the-counter) or in any other capacity, in any activity on behalf of a
Competitor of the Company.
(b) Nonsolicitation. For a period of two years after the termination
of Executive's employment, Executive will not solicit, or assist another
person to solicit, any employee, supplier or other person having business
relations with the Company to terminate such employee's employment or
terminate or curtail such supplier's or other person's business
relationship with the Company.
4.2 Confidentiality Information. Executive acknowledges that he has been
required to use his personal intellectual skills on behalf of the Company, its
subsidiaries and affiliates (the term "Company" as used in this Section 4.2
shall include such subsidiaries and affiliates) and that it is reasonable and
fair that the fruits of such skills should inure to the sole benefit of the
Company. Executive further acknowledges that he has acquired information of a
confidential nature relating to the operation, finances, business relationships
and trade secrets of the Company. Therefore, for a period of two years following
termination of employment, Executive will not use (except in response to a
request by an officer of the Company), publish, disclose or authorize anyone
else to use, publish or disclose, without the prior written consent of the
Company, within the geographical area in which such use, publication or
disclosure could harm the Company's existing or potential business interests,
any Confidential Information or trade secrets; provided, however, that following
termination of Executive's employment, Executive shall be prohibited from ever
using, publishing, disclosing or authorizing anyone else to use, publish or
disclose, any information that constitutes a trade secret under applicable law.
Executive shall not remove or retain any figures, calculations, formulae,
letters, papers, software, abstracts, summaries, drawings, blueprints, diskettes
or any other material, or copies thereof, which contain or embody any
Confidential Information or trade secrets of the Company, except for use in the
course of Executive's regular authorized duties on behalf of the Company. The
foregoing notwithstanding, Executive has no obligation to refrain from using,
publishing or disclosing any such Confidential Information that is or hereafter
shall become available to the public, other than by use, publication or
disclosure by Executive. This prohibition also does not prohibit Executive's use
of general skills and know-how acquired during and prior to employment with the
Company, as long as such use does not involve the use, publication or disclosure
of the Company's Confidential Information or trade secrets.
ARTICLE V
GENERAL PROVISIONS
5.1 Notices. Any and all notices provided for in this Agreement shall be
given in writing and shall be deemed given to a party at the earlier of (i) when
actually delivered to such party, or (ii) when mailed to such party by
registered or certified mail (return receipt requested) or sent to such party by
courier, confirmed by receipt, and addressed to such party at the address
designated below for such party as follows (or to such other address for such
party as such party may have substituted by notice pursuant to this Section
5.1):
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(a) If to the Company:
Geographics, Inc.
0000 Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Attn: Board of Directors
with a copy to:
Xxx X. Xxxxxxxxx
Xxxxxxx Xxxx & Friedrich LLP
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
(b) If to Executive:
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Ariel 1608
Ft. Xxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxx
Xxxxx Xxxxxxxxxxx Xxxxx SC
000 Xxxx Xxxxxxxxx Xxxxxx, #0000
Xxxxxxxxx, XX 00000-0000
Any purported notice of Event of Termination pursuant to Section 3.1 shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated. No such
purported termination shall be effective unless the notice meets the
requirements of this Section 5.1.
5.2 Entire Agreement. This Agreement contains the entire understanding and
the full and complete agreement of the parties and supersedes and replaces any
prior understandings and agreements among the parties, with respect to the
subject matter hereof.
5.3 Amendment; Headings. This Agreement may be altered, amended or
modified only in a writing, signed by both of the parties hereto. Headings
included in this Agreement are for convenience only and are not intended to
limit or expand the rights of the parties hereto. References to Sections herein
shall mean sections of the text of this Agreement, unless otherwise indicated.
5.4 Assignability. This Agreement and the rights and duties set forth
herein may not be assigned by Executive, or by the Company, in whole or in part,
except that the Company may
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assign its rights and obligations to a successor of the Company's business which
expressly assumes the Company's obligations hereunder in writing. This Agreement
shall be binding on and inure to the benefit of each party and such party's
respective heirs, legal representatives, successors and permitted assigns.
5.5 Severability. If any court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then such
invalidity or unenforceability shall have no effect on the other provisions
hereof, which shall remain valid, binding and enforceable and in full force and
effect, and such invalid or unenforceable provision shall be rewritten or
construed in a manner so as to give the maximum valid and enforceable effect to
the intent of the parties expressed herein.
5.6 Waiver of Breach. The waiver by either party of the breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
5.7 Governing Law; Construction. This Agreement and the obligations
hereunder shall be interpreted, construed and enforced in accordance with the
laws of the State of Washington (without regard to its conflict of laws
principles). Any ambiguities in this Agreement shall not be strictly construed
against the drafter of the language, but rather shall be resolved by applying
the most reasonable interpretation under the circumstances, giving full
consideration to the intentions of the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year written above.
/s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx
GEOGRAPHICS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------------------
Xxx X. Xxxxxxxxx
Secretary
(Signature Page of Executive Employment Agreement)
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APPENDIX A
DEFINITIONS
"Change in Control" shall mean the occurrence any of the following:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
50% of more of either (i) the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition by the Company, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iii) any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (c);
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least two-thirds
(2/3) of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or any other
actual or threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board;
(c) Consummation of a reorganization, merger or consolidation or a
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination") in each case, unless, following such
Business Combination, (i) all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then Outstanding Company Common Stock and the
combined voting power of the then Outstanding Company Voting Securities
after the Business Combination, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trusts) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 40% or
more of either the Outstanding Company Common Stock or the Outstanding
Company Voting Securities except to the extent that such ownership existed
prior to the Business Combination and (iii) at least two-thirds (2/3) of
the members of the board of directors of the corporation resulting from
such Business Combination were
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members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
"Competitor" shall mean an organization identified in Appendix B or the
successor to such an organization or an organization not identified but
which is engaged in the development, manufacture, marketing, sale or
distribution of stationary paper products or any other products the Company
may undertake to develop, manufacture, sell or distribute (collectively,
"Products") or which is formed, created, or initiated by Executive, either
individually or in concert with others, with a purpose, plan or activity to
develop, manufacture, market, sell or distribute Products.
"Confidential Information" shall mean information that is possessed by or
developed for the Company and that relates to the Company's existing or
potential business or technology, which information is generally not known
to the public and which information the Company seeks to protect from
disclosure to its existing or potential competitors or others, including,
without limitation, the following: business plans, strategies, existing or
proposed bids, costs, technical developments, existing or proposed research
projects, financial or business projections, investments, marketing plans,
negotiation strategies, training information and materials, information
generated for client engagements and information stored or developed for
use in or with computers. Confidential Information also includes
information received by the Company from others for which the Company has
an obligation to treat as confidential, including all information obtained
in connection with client engagements.
"Disabled" shall mean that Executive is unable to perform his services under
this Agreement for a continuous period of six months by reason of his
physical or mental illness or incapacity. If there is any dispute as to
whether Executive is or was physically or mentally unable to perform his
duties under this Agreement, such question shall be submitted to a licensed
physician agreed to by Executive (or any legal guardian lawfully appointed)
and the Company, or, if they are unable to so agree, appointed by the
senior judge of the Milwaukee County Circuit Court at the request of either
Executive (or such legal guardian) or the Company. Executive shall submit
to such examinations and provide such information as such physician may
reasonably request and the determination of such physician as to
Executive's physical or mental condition shall be binding and conclusive
upon Executive and the Company.
"Good Reason" shall mean a basis for termination of this Agreement by Executive
(1) for any reason within three (3) months following a Change in Control),
or (2) any material breach by the Company of the terms of this Agreement.
Xxxxxxxx-0
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XXXXXXXX X
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LIST OF COMPETITORS
1. Paper Direct, Inc.
2. Xxxxxx, Inc.
3. American Pad & Paper Company
4. Z-International, Inc.
Appendix-3
