EXHIBIT 10.6
CONFORMED COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is dated the 21st day of June,
2000 (the "Effective Date") by and between Tekni-Plex, Inc., a Delaware
corporation (the "Employer"), having its principal offices at 000 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, XX 00000, and F. Xxxxxxx Xxxxx, an individual (the
"Executive"), residing at 0000 Xxxxxxx Xxxxx, Xxxx 00, Xxxxxx Xxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, the Executive has been continuously employed by the Employer
since March 18, 1994 and the Executive and the Employer desire that the
Executive continue in his role as the Chairman of the Board of Directors and
Chief Executive Officer of Employer, upon the terms and conditions herein set
forth;
WHEREAS, on January 30, 1997 the Employer and Executive entered into an
employment agreement which superceded and replaced in its entirety the prior
employment agreement between the Employer and the Executive dated March 18,
1994 (as amended, the "Prior Agreement");
WHEREAS, on March 2, 1998 the Employer and the Executive entered into
Amendment Number 1 to the employment agreement dated as of January 30, 1997 (as
amended, the "Original Agreement"); and
WHEREAS, in connection with the recapitalization of the Employer pursuant
to the Recapitalization Agreement dated as of April 12, 2000 among the Employer
and other parties thereto, the Employer and Executive each desires to amend the
terms of and restate the existing Original Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained in this Agreement, the Employer and the Executive,
intending to be legally bound, hereby agree as follows:
1. Employment. Subject to the terms and conditions hereinafter set forth,
the Employer hereby employs the Executive as Chairman of the Board of Directors
and Chief Executive Officer of Employer, and the Executive hereby accepts such
employment.
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2. Term. The term of employment of the Executive by the Employer commenced
on March 18, 1994 pursuant to the Prior Agreement, which was superceded and
replaced by the Original Agreement effective January 30, 1997 and by this
Agreement on the date hereof. The term of employment (the "Employment Term")
pursuant to this Agreement shall terminate upon the earlier of: (a) June 27,
2003, to coincide with the fiscal year-end of Employer, or (b) the date on
which the employment of the Executive is terminated pursuant to Section 9
hereof. Absent written notice of intent not to renew by either party at least
90 days prior to the end of each fiscal year, beginning with the end of fiscal
year 2001, the Employment Term shall be automatically extended for a period of
one year after the previously scheduled expiration of the Employment Term.
3. Duties. During the Employment Term, the Executive shall devote such
time as necessary to discharge his duties and responsibilities as Chairman of
the Board of Directors and Chief Executive Officer of the Employer and shall
possess all rights and authorities as have been exercised previously under the
Prior Agreement, such duties and authorities not to be diminished. In addition
to the foregoing, the Executive shall hold, without additional compensation
therefor, such other offices, directorships or memberships of committees of the
Employer and/or any subsidiary or affiliate of the Employer, as the Board of
Directors may reasonably request, and to which, from time to time, during the
Employment Term, the Executive may be elected or appointed.
4. Salary Compensation. In consideration of the services to be
rendered by the Executive as described in Section 3 above, the Employer shall
pay or cause to be paid to the Executive during the Employment Term, and the
Executive shall accept, compensation at the rate of five million
($5,000,000.00) dollars per annum (the "Salary"). Such compensation shall be
increased by 10% on each anniversary of the Effective Date. The Salary shall be
payable in equal installments in accordance with the usual payroll practices of
Employer which are in effect from time to time during the Employment Term, but
in no event less frequently than monthly. The Executive's Salary shall be
subject to all applicable withholding and other taxes.
5. Bonus Compensation.
(a) Solely with respect to the Employer's fiscal year ended June 30,
2000, Executive shall be entitled to receive the Performance Bonus for
such fiscal year provided for in the terms of the Original Agreement and
Prior Agreement, as applicable.
(b) Except as specifically provided in subparagraph (a) above,
bonuses may be awarded solely at the discretion of the
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Board of Directors of the Employer with the affirmative vote of at least
one director who is not actively involved in the management of the
Employer.
6. Employment Benefits. During the Employment Term, the Executive shall be
entitled, in addition to the benefits generally available to other executive
officers of Employer, to the following employment benefits at Employer's cost:
(a) Four weeks paid vacation for each year of the Employment Term and
sick leave in accordance with the Employer's policies from time to time in
effect for executive officers of the Employer;
(b) Participation in a reasonable medical and hospitalization plan,
but in no event providing lesser benefits than those in effect at March
18, 1994, and applicable to its executive officers generally;
(c) A long-term disability policy (non-Employer policy naming
Executive as beneficiary and owner) providing for benefits in the amount
of 50% of Executive's Base Salary to age 65, and Executive's compensation
shall be grossed-up annually to cover any additional taxes resulting from
the annual premium paid for such policy by the Employer and treated as
compensation to the Executive;
(d) Participation, subject to classification requirements and
continued maintenance thereof by Employer, in other employee benefit
plans, such as profit sharing plans, which are from time to time
applicable to the Employer's executive officers generally;
(e) In the event Executive is relocated, a temporary monthly living
allowance until Executive is permanently relocated to cover reasonable
living and travel expenses in connection with maintenance of a temporary
residence, reimbursement, upon presentation of appropriate receipts, of
all reasonable moving expenses, brokerage commissions and closing expenses
related to the sale of his current residence and the purchase of his new
residence, and, following such relocation, provided Executive's current
home remains unrented and a good faith effort is being made to sell
Executive's current residence, Employer shall reimburse Executive for the
cost of interest on mortgages (not to exceed current levels of debt) and
real estate taxes for a period not to exceed twelve months;
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(f) A leased automobile, including insurance and maintenance
therefor;
(g) Tax return preparation and reasonable financial planning
services;
(h) A $1 million term life insurance policy on the Executive's life
for a beneficiary selected by him; and
(i) The reasonable cost of a country club membership (and dues).
7. Expenses. During the Employment Term, the Employer will reimburse the
Executive, upon presentation of appropriate receipts, for all travel,
entertainment and other out-of-pocket expenses which are reasonably incurred by
the Executive in the performance of his duties hereunder.
8. Insurance. The Executive agrees to cooperate with the Employer in
obtaining any insurance on the life or on the disability of the Executive which
the Employer may reasonably desire to obtain at its cost for its own benefit
and shall undergo reasonable physical and other examinations for this sole
purpose, and shall execute any consents or applications which the Employer may
reasonably request in connection with the issuance of one or more of such
insurance policies.
9. Termination. (a) Executive's employment under this Agreement may be
terminated without further liability by Employer at any time for "Cause." For
purposes of this Agreement, Cause is defined as (i) Executive's willful
refusal, after 30 days' prior written notice by Employer (such notice detailing
with specificity the nature of such breach and the steps required to satisfy
Employer that such breach will be cured), to begin to take such steps to cure
any continuing material breach hereof or (ii) a final non-appealable
adjudication in a criminal or civil proceeding that Executive has committed a
fraud or felony relating to his employment.
(b) In addition to life insurance benefits which will be payable in
lump sum, in the event of Executive's death during the Employment Term,
the Employer will pay a severance benefit (the "Severance Benefit"), as
defined below, to Executive's designated beneficiary (or, failing such
designation, to his estate) payable in 12 equal monthly installments. The
Severance Benefit shall consist of an amount equal to the then current
annual Salary, any bonus amounts awarded pursuant to Section 5 but not yet
paid, and any other accrued benefits if due and payable at the time of
Executive's death.
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(c) In the event of Executive's disability or incapacity which
renders him unable to perform his duties for a period in excess of 120
consecutive days or a total of more than 180 days in any 12-month period,
the Employer may terminate this Agreement. Upon termination under this
Section 9(c), Employer will pay Executive the Severance Benefit as defined
above. In addition, Employer will cause ownership of all insurance
policies on Executive's life to be transferred to Executive.
(d) If, at any time during the Employment Term, the Executive resigns
from the employ of the Employer for any reason other than Employer's
failure to meet its obligations hereunder, Employer and Executive shall
have no further obligations hereunder after such resignation date other
than the payment of amounts accrued and unpaid under Sections 4, 5, 6 and
7 hereof through such resignation date, and continuing obligations under
Sections 10 and 11 hereof.
10. Restrictive Covenant. Without prior written consent of the Board
of Directors of Employer, such consent not to be unreasonably withheld,
Executive agrees that he will not for a period of one year following the
termination by Executive of his employment with Employer whether before or
after the expiration of the Employment Term (or to such lesser extent and for
such lesser period as may be deemed enforceable by a court of competent
jurisdiction, it being the intention of the parties that this Section 10 shall
be so enforced): (i) directly or indirectly engage, in the United States, in
any business in competition with the primary business conducted by Employer,
either as employee, independent contractor, owner, partner, lender or
stockholder, at the time of termination of the Executive (provided that the
foregoing shall not be construed to prohibit ownership of less than 5% of the
outstanding shares of any public corporation); (ii) solicit, canvass, or accept
any business for any other competing company, or business similar to any
business of Employer, from any past, present or future ("future," as used
herein, shall mean at or prior to the time of termination of employment)
customer of Employer; (iii) directly or indirectly induce or attempt to
influence any employee of Employer to terminate his employment; or (iv)
directly or indirectly request any present or future (as defined above)
entities with whom Employer has significant business relationships to curtail
or cancel their business with Employer. In addition and without limiting the
foregoing, upon the termination of the Executive's employment by the Employer
for any reason, whether before or after the expiration of the Employment Term,
Executive shall not (x) at any time directly or indirectly disclose to any
person, firm or corporation any trade, technical or technological secrets, or
(y) for a period of one year following termination disclose any details of
organization or business affairs, or any names of past, present or future (as
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defined above) customers of Employer. For purposes of this Section 10, the term
"Employer" shall be deemed to include Employer and all of its subsidiary
corporations.
11. Inventions. All inventions, discoveries, improvements, processes,
formulae and data relating to Employer's business that Executive may make,
conceive or learn during the employment of the Executive with the Employer
(during the term of this Agreement, whether during working hours or otherwise)
and relating to the Employer's lines of business shall be the exclusive
property of Employer. Executive agrees to make prompt disclosure to the Board
of Directors of Employer of all such inventions, etc., and to do at Employer's
expense all lawful things necessary or useful to assist Employer in securing
their full enjoyment and protection. In the event of any breach or threatened
breach of the provisions of this Section 11 or the preceding Section 10,
Employer may apply to any court of competent jurisdiction to enjoin such
breach. Any such remedy shall be in addition to Employer's remedies at law
under such circumstances.
12. Conflicting Agreements. Each of the parties hereby represents and
warrants to the other that (a) neither the execution of this Agreement by such
party nor the performance by such party of any of its obligations or duties
hereunder will conflict with or violate or constitute a breach of the terms of
any other agreement to which such party is a party or by which it is bound, and
(b) such party is not required to obtain the consent of any person, firm,
corporation or other entity in order to enter into this Agreement or to perform
any of his obligations or duties hereunder.
13. Notices. Any notice, request, information or other document to be
given under this Agreement to any party by any other party shall be in writing
and delivered personally, sent by registered or certified mail, postage
prepaid, delivered by a nationally recognized overnight courier service, or
transmitted by facsimile machine followed by delivery of original documents by
a nationally recognized overnight courier service addressed as follows:
If to Employer:
MST Partners
000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Mr. J. Xxxxxx XxXxxxx
Facsimile No.: (000) 000-0000
with a copy to:
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Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Executive:
F. Xxxxxxx Xxxxx
at his then current address
included in the employment records
of the Employer
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
The Xxxxx Firm P.C.
0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
or to such other address as a party hereto may hereafter designate in writing
to the other party, provided that any notice of a change of address shall
become effective only upon receipt thereof.
14. Assignment; Successors and Assigns. This Agreement may not be assigned
by either party. This Agreement shall be binding upon and shall inure to the
benefit of the Employer and the Executive and their respective heirs, legal
representatives, successors and assigns.
15. Entire Agreement. This Agreement contains the entire understanding
between the Employer and the Executive with respect to the employment of the
Executive and supersedes all prior negotiations and understandings (including
the Prior Agreement) between the Employer and the Executive with respect to the
employment of the Executive by the Employer. This Agreement may not be amended
or modified except by a written instrument signed by both the Employer and the
Executive.
16. Severability. In the event any one or more provisions of this
Agreement is held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect, unaffected by such invalidity or unenforceability.
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17. Construction. The parties hereto acknowledge and agree that: (i) each
party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii) the rule of construction
to the effect that any ambiguities are resolved against the drafting party
shall not be employed in the interpretation of this Agreement; and (iii) the
terms and provisions of this Agreement shall be construed fairly as to all
parties hereto and not in favor of or against any party, regardless of which
party was generally responsible for the preparation of this Agreement.
18. Applicable Law; Submission to Jurisdiction; Litigation Expenses. This
Agreement and the rights, obligations and relations of the parties hereto shall
be governed by and construed and enforced in accordance with the laws of the
State of New York without giving effect to the principles of conflicts of law
thereof.
The parties hereto (i) submit for themselves, and any legal action or
proceeding relating to this Agreement or for recognition and enforcement of any
judgment in respect hereof, to the exclusive jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any therefor, (ii) consent that
any action or proceeding shall be brought in such courts, and waive any
objection that each may now or hereafter have to the venue of any such action
or proceeding in any such court, (iii) agree that service of process of any
such action or proceeding may be effected by certified mail (or any
substantially similar form of mail), postage prepaid, to the appropriate party
at its address as set forth herein, and service made shall be deemed to be
completed upon the earlier of actual receipt or five (5) days after the same
shall have been posted as aforesaid, and (iv) agree that nothing herein shall
affect the right to effect service of process in any other manner permitted by
law.
The prevailing party in any litigation relating to this Agreement shall be
entitled to recover reasonable professional fees, including attorneys' fees and
litigation expenses relating to such dispute.
19. Headings. The headings of sections and subsections of this Agreement
are for convenience of reference only and are not to be considered in
construing this Agreement.
20. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which, when taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
Tekni-Plex, Inc.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Secretary & Director
Executive:
/s/ F. Xxxxxxx Xxxxx
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F. Xxxxxxx Xxxxx
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