EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT between AptarGroup, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxxxx (the "Executive") is entered
into on February 1, 1996. In consideration of the covenants contained herein,
the parties agree as follows:
1. Employment. The Company shall employ the Executive, and the
Executive agrees to be employed by the Company, upon the terms and subject to
the conditions set forth herein for the period beginning on February 1, 1996 and
ending on February 1, 1999, unless earlier terminated pursuant to Section 4
hereof; provided, however, that such term shall automatically be extended as of
each February 1, commencing February 1, 1997, for one additional year unless
either the Company or the Executive shall have terminated this automatic
extension provision by written notice to the other party at least 30 days prior
to the automatic extension date; and provided further that in no event shall
such term extend beyond September 12, 2012. The term of employment in effect
from time to time hereunder is hereinafter called the "Employment Period."
2. Position and Duties. During the Employment Period, the Executive
shall serve as the President of the Closures Division or in such other executive
position as determined by the Chief Executive Officer of the Company (the
"Company CEO") and shall have the normal duties, responsibilities and authority
of an executive serving in such position, subject to the direction of the Chief
Executive Officer of the Company (the "Company CEO"). The Executive shall have
the title of President of the Division or such other title denoting an executive
office as determined by the Company CEO and shall report to the Company CEO or
such other executive officer of the Company as determined by the Company CEO.
During the Employment Period, the Executive shall devote his best efforts and
his full business time to the business and affairs of the Company.
3. Compensation and Benefits. (a) The Company shall pay the Executive a
salary during the Employment Period, in monthly installments, initially at the
rate of $210,000.00 per annum. The Company CEO may, in his sole discretion (i)
increase (but not decrease) such salary from time to time and (ii) award a bonus
to the Executive for any calendar year during the Employment Period.
(b) The Company shall reimburse the Executive for all reasonable
expenses incurred by him in the course of performing his duties under this
Agreement which are consistent with the Company's policies in effect from time
to time.
(c) During the Employment Period, the Executive shall be entitled to
participate in the Company's executive benefit programs on the same basis as
other executives of the Company having the same level of responsibility, which
programs consist of those benefits (including insurance, vacation, company car
or car allowance and/or other benefits) for which substantially all of the
executives of the Company are from time to time generally eligible, as
determined from time to time by the Board.
(d) In addition to participation in the Company's executive benefit
programs pursuant to Sec.3(c), the Executive shall be entitled during the
Employment Period to:
(i) additional term life insurance coverage in an amount equal to
the Executive's salary; but only if and so long as such
additional coverage is available at standard rates from the
insurer providing term life insurance coverage under the
Executive benefit programs or a comparable insurer acceptable
to the Company (If the Executive is not participating in term
life insurance coverage under the Executive benefit programs
and if such additional coverage would be available at standard
rates from such insurer if the Executive were so
participating, the Executive shall instead be entitled to an
amount each calendar year, payable monthly, equal to the
amount the Company would have been required to pay for such
additional coverage for such year); or if the executive is not
participating in the additional life insurance coverage and if
the Employment Period ends on account of the Executive's
death, the Company shall pay to the Executive's estate (or
such person or persons as the Executive may designate in a
written instrument signed by him and delivered to the Company
prior to his death), amounts equal to one-half of the amounts
the Executive would have received as salary (based on the
Executive's salary then in effect) had the Employment Period
remained in effect until the second anniversary of the date of
the Executive's death, at the times such amounts would have
been paid.
(ii) supplementary long-term disability coverage in an amount which
will increase maximum covered annual compensation to $330,000
and maximum monthly payments to $18,333; but only if and so
long as such supplementary coverage is available at standard
rates from the insurer providing long-term disability coverage
under the Executive benefit program or a comparable insurer
acceptable to the Company.
4. Termination of Employment. (a) The Employment period shall end upon
the first to occur of: (i) the expiration of the term of this Agreement pursuant
to Section 1 hereof, (ii) retirement of the Executive at age 65 ("Retirement"),
(iii) termination of the Executive's employment by the Company on account of the
Executive's having become unable (as determined by the Board in good faith) to
regularly perform his duties hereunder by reason of illness or incapacity for a
period of more than six consecutive months ("Termination for Disability"), (iv)
termination of the Executive's employment by the Company for Cause ("Termination
for Cause"), (v) termination of the executive's employment by the Company other
than a Termination for Disability or a Termination for (Cause ("Termination
Without Cause"), (vi) the Executive's death or (vii) termination of the
Executive's employment by the Executive for any reason following written notice
to the Company at least 90 days prior to the date of such termination
("Termination by the Executive").
(b) For purposes of the Agreement, "Cause" shall mean (i) the
commission of a felony involving moral turpitude, (ii) the commission of a
fraud, (iii) the commission of any act involving dishonesty with respect to the
Company or any of its subsidiaries or affiliates, (iv) gross negligence or
willful misconduct with respect to the Company or any of its subsidiaries or
affiliates, (v) breach of any provision of Section 5 or Section 6 hereof or (vi)
any other breach of this Agreement which is material and which is not cured
within 30 days following written notice thereof to the Executive by the Company.
(c) If the Employment Period ends for any reason set forth in Section
4(a), except as otherwise provided in this Section 4, the Executive shall cease
to have any rights to salary, bonus (if any) or benefits hereunder, other than
(i) any unpaid salary accrued through the date of such termination, (ii) any
bonus payable, but only if such termination occurs during the third or fourth
quarter of the Company's fiscal year, such bonus to be prorated in accordance
with Company policy, (iii) any unpaid expenses which shall have been incurred as
of the date of such termination and (iv) to the extent provided in any benefit
plan in which the Executive has participated, any plan benefits which by their
terms extend beyond termination of the Executive's employment. Notwithstanding
the foregoing, if the Employment Period ends on account of Termination by the
Executive or Termination for Cause, the Executive shall not be entitled to any
unpaid bonus accrued through the date of such termination.
(d) If the Employment Period ends on account of Retirement, the Company
shall make no payments to the Executive other than as provided in Section 4(c)
hereof.
(e) If the Employment Period ends on account of Termination for
Disability, the Company shall pay to the Executive, in addition to the amounts
described in Section 4(c) hereof, amounts equal to one-half of the amounts the
Executive would have received as salary (based on the Executive's salary then in
effect) had the Employment Period remained in effect until the second
anniversary of the date of such termination, at the times such amounts would
have been paid, less any payments to which the Executive shall be entitled
during such salary continuance period under any disability benefit plan in which
the Executive has participated as an employee of the Company.
(f) If the Employment Period ends on account of the Executive's death,
the Company shall pay to the Executive's estate (or such person or persons as
the Executive may designate in a written instrument signed by him and delivered
to the Company prior to his death) amounts equal to one-half of the amounts the
Executive would have received as salary (based on the Executive's salary then in
effect) had the Employment Period remained in effect until the second
anniversary of the date of the Executive's death, at the times such amounts
would have been paid.
(g) If the Employment Period ends on account of Termination without
Cause, in addition to the amounts described in Section 4 (c) hereof, the Company
shall pay to the Executive amounts equal to the amounts the Executive would have
received as salary (based on the Executive's salary then in effect) had the
Employment Period remained in effect until the date on which (without any
extension thereof, or, if previously extended, without any further extension
thereof) it was then scheduled to end, at the times such amounts would have been
paid (in the event the Executive is entitled during the payment period to any
payments under any disability benefit plan or the like in which the Executive
has participated as an employee of the Company, less such payments); provided,
however, that in the event of the Executive's death during the payment period,
the Company shall pay to the Executive's estate (or such person or persons as
Executive may designate in a written instrument signed by him and delivered to
the Company prior to his death) amounts during the remainder of the payment
period equal to one-half of the amounts which would have been paid to the
Executive but for his death. It is expressly understood that the Company's
payment obligation under this section 4 (g) shall cease in the event the
Executive shall breach any provision of Section 5 or Section 6 hereof.
(h) Notwithstanding the foregoing provisions of this Section 4, in the
event of a Change in Control (as defined in Section 4 (i) hereof), the
employment of the Executive hereunder shall not be terminated by the Company or
any successor to the Company within two years following such Change in Control
unless the Executive receives written notice of such termination from the
Company at least six months prior to the date of such termination. In the event
of such termination of employment by the Company within two years following a
Change in Control, or in the event that the Executive terminates his employment
hereunder for Good Reason (as defined in Section 4 (i) hereof) within two years
following a Change in Control, the Executive shall be entitled to receive the
amounts the Executive would have received as salary (based on the Executive's
salary then in effect) at the times such amounts would otherwise have been paid
had the Employment Period remained in effect for the period commencing on the
date of such termination and ending 18 months following the date of such
termination. The Executive agrees that he shall not terminate his employment
hereunder, other than for Good Reason, within one year following a Change in
Control unless the Company receives written notice of such termination from the
Executive at least six months prior to the date of such termination. In the
event of such termination by the Executive other than for Good Reason, the
Executive shall be entitled to receive the amounts the Executive would have
received as salary (based on the Executive's salary then in effect) at the times
such amounts would otherwise have been paid had the Employment Period remained
in effect for six months following the date of such termination.
(i) For purposes of this Agreement (i) a "Change in Control" shall be
deemed to have occurred if any person becomes the holder of securities
representing a majority of the voting power of the Company, whether by merger,
consolidation, tender offer or otherwise and (ii) "Good Reason" shall mean (x) a
reduction by the Company in the Executive's rate of annual salary in effect
immediately prior to the Change in Control, (y) a material reduction in any
benefit afforded to the Executive pursuant to any benefit plan of the Company in
effect immediately prior to the Change in Control, unless all comparable
executives of the Company suffer a substantially similar reduction or (z) the
relocation of the Executive's office to a location more than 60 miles from
Crystal Lake, Illinois.
(j) Notwithstanding anything in this Agreement to the contrary, in the
event it shall be determined that any payment or distribution by the Company or
its affiliated companies to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this agreement
or otherwise, but determined without regard to any adjustment required under
this Section 4 (j)) (in the aggregate, the "Total Payments") would be subject to
the excise tax (the "Excise Tax") imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code), then the payments due hereunder
shall be reduced so that the Total Payments are one Dollar ($1) less than such
maximum amount.
(k) All determinations required to be made under Section 4 (j),
including whether and when a reduction pursuant to Section 4 (j) in the amount
payable hereunder is required and the amount of any such reduction and the
assumptions to be utilized in arriving at such determination, shall be made by
the Company's public accounting firm (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a
payment, or such earlier time as is requested by the Company or the Executive.
In the event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change in Control, the Executive
shall appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall furnish the Executive
with a written option that failure to report the Excise Tax on the Executive's
applicable federal income tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that the
reduction in the amount payable hereunder pursuant to Section 4 (j) will have
been less than that required by the calculations to be made hereunder. In such
event the Executive shall promptly pay to the Company the amount of any
additional reduction.
(5) Confidential Information. The Executive acknowledges that the
information, observations and data obtained by him while employed by the Company
pursuant to this Agreement, as well as those obtained by him while employed by
the Company or any of its subsidiaries or affiliates or any predecessor thereof
prior to the date of this Agreement, concerning the business or affairs of the
Company or any of its subsidiaries or affiliates or any predecessor thereof
("Confidential Information") are the property of the Company or such subsidiary
or affiliate. Therefore, the Executive agrees that he shall not disclose to any
unauthorized person or use for his own account any Confidential Information
without the prior written consent of the Company CEO unless and except to the
extent that such Confidential Information becomes generally known to and
available for use by the public other than as a result of the Executive's acts
or omissions to act. The Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes and
software and other documents and data (and copies thereof) relating to the
Confidential Information or the business of the Company or any of its
subsidiaries or affiliates which he may then possess or have under his control.
6. Noncompetition; Nonsolicitation. (a) The Executive acknowledges that
in the course of his employment with the Company pursuant to this Agreement he
will become familiar, and during the course of his employment by the Company or
any of its subsidiaries or affiliates or any predecessor thereof prior to the
date of this Agreement he has become familiar, with trade secrets and customer
lists of and other confidential information concerning the Company and its
subsidiaries and affiliates and predecessors thereof and that his services have
been and will be of special, unique and extraordinary value to the Company.
(b) The Executive agrees that during the Employment Period and for one
year thereafter, in the case of either Termination for Good Reason following a
Change in Control or Termination without Cause, or for two years thereafter in
the case of termination of employment for any other reason, (the "Noncompetition
Period") he shall not in any manner, directly or indirectly, through any person,
firm or corporation, alone or as a member of a partnership or as an officer,
director, stockholder, investor or employee of or in any other corporation or
enterprise or otherwise, engage or be engaged, or assist any other person, firm
corporation or enterprise in engaging or being engaged, in any business then
actively being conducted by the Company in any geographic area in which the
Company is conducting such business (whether through manufacturing or
production, calling on customers or prospective customers, or otherwise).
Notwithstanding the foregoing, subsequent to the Employment period the Executive
may engage or be engaged, or assist any other person, firm corporation or
enterprise in engaging or being engaged, in any business activity which is not
competitive with a business activity being conducted by the Company at the time
subsequent to the Employment Period that the Executive first engages or assists
in such business activity.
(c) The Executive further agrees that during the Noncompetition Period
he shall not in any manner, directly or indirectly (i) induce or attempt to
induce any employee of the Company or of any of its subsidiaries or affiliates
to terminate or abandon his employment, or any customer of the company or any of
its subsidiaries or affiliates to terminate or abandon its relationship, for any
purpose whatsoever, or (ii) in connection with any business to which (b) above
applies, call on, service, solicit or otherwise do business with any then
current or prospective customer of the Company or any of its subsidiaries or
affiliates.
(d) Nothing in this Section 6 shall prohibit the Executive from being
(i) a stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation any securities of which are publicly traded, so long as the
Executive has no active participation in the business of such corporation.
(e) If, at the time of enforcement of this Section 6, a court holds
that the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area and that the court shall be allowed to revise
the restrictions contained herein to cover the maximum period, scope and area
permitted by law.
7. Enforcement. Because the services of the Executive are unique and
the Executive has access to confidential information of the Company, the parties
hereto agree that the Company would be damaged irreparably in the event any
provision of Section 5 or Section 6 hereof were not performed in accordance with
their respective terms or were otherwise breached and that money damages would
be in an inadequate remedy for any such nonperformance or breach. Therefore, the
Company or its successors or assigns shall be entitled, in addition to other
rights and remedies existing in their favor, to an injunction or injunctions to
prevent any breach or threatened breach of any of such provisions and to enforce
such provisions specifically (without posting a bond or other security).
8. Survival. Sections 5, 6 and 7 hereof shall survive and continue in full
force and effect in accordance with their respective terms, notwithstanding any
termination of the Employment Period.
9. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or sent by certified mail,
return receipt requested, postage paid, addressed (a) if to the Executive, to
00000 Xxx Xxxx Xx., Xxxxxxxxxx, Xxxxxxxx 00000, and if to the Company, to
AptarGroup, Inc. 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxxxx X, Xxxxxxx Xxxx, Xxxxxxxx
00000, attention: Xxxxxxx X. Xxxxx, Executive Vice President, Chief Financial
Officer, Secretary and Treasurer, or (b) to such other address as either party
shall have furnished to the other in accordance with this Section 9.
10. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related in any manner to the subject matter hereof.
12. Successors and Assigns. This Agreement shall inure to the benefit of
and be enforceable by the Executive and his heirs, executors and personal
representatives, and the Company and its successors and assigns. Any successor
or assign of the Company shall assume the liabilities of the Company hereunder.
13. Governing Law. This Agreement shall be governed by the internal laws
(as opposed to the conflicts of law provisions) of the State of Illinois.
14. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
APTARGROUP, INC.
By: /s/ Xxxx X. Siebel
Its: CEO
/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx Xxxxx 0, 0000
(Xxxxxxxxx)
