EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 22ND day of
March, 1999, by and between BPI PACKAGING TECHNOLOGIES, INC., a Delaware
corporation (the "Company"), and XXXXX XXXXXXXX ("Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee and Employee desires to
accept such employment by the Company upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Subject to the other terms and conditions of this
Agreement, the Company hereby agrees to employ Employee as the Senior Vice
President of Sales of the Company as set forth herein, and Employee hereby
agrees to be so employed in such position by the Company, for a three (3)
year term beginning on March 22, 1999 and ending March 21, 2002; PROVIDED,
HOWEVER, upon expiration of the stated term of this Agreement, Employee's
employment with the Company shall revert to the status of employment at will
and shall thereafter be subject to termination by either party at any time
and regardless of cause.
2. RESPONSIBILITIES OF EMPLOYMENT. During the term of Employee's
employment, Employee: (a) shall diligently and faithfully serve the Company in
such capacity as may be determined from time to time by the President of the
Company and perform such other duties, assignments and responsibilities as the
Company may impose upon Employee from time to time, consistent with his role as
an executive officer of the Company, and he shall devote his best efforts and
entire business time, services and attention to the advancement of the Company's
interests; and (b) shall not, without the prior written consent of the President
of the Company, engage in any other employment or business, directly or
indirectly, in any capacity (whether as a sole proprietor, partner, member,
manager, director, officer, employee, consultant or otherwise), whether for
compensation or otherwise and whether or not such business is in competition or
conflict with the business of the Company PROVIDED, HOWEVER ownership of not
more than one percent (1%) of the securities of any publicly-held corporation or
five percent (5%) of any private corporation shall not constitute a violation of
this Section 2.
3. COMPENSATION; STOCK OPTIONS; BENEFITS; REIMBURSEMENT FOR EXPENSES.
(a) During the term of Employee's employment pursuant to this Agreement,
the Company shall pay to Employee as basic compensation for his services
hereunder the sum of One Hundred and Twenty-Five Thousand Dollars ($125,000.00)
per year, payable in accordance with the normal payroll practices of the Company
commencing on a date to be mutually agreed upon by the Company and the Employee.
(b) Employee shall receive options to purchase Common Stock of the Company
during the term of this Agreement if the Company equals or exceeds certain
financial performance goals as set forth below:
(1) If, in fiscal year 1999, the Company's net earnings for the fiscal
year plus amounts deducted in the computation thereof for: (a) interest
expense, (b) Federal, state and local income taxes, (c) depreciation, (d)
amortization of intangibles, as computed by the Company's accountants in
accordance with generally accepted accounting principals, consistently
applied, and (e) any expenses or other charges associated with the
investment, loans, and equipment leases made by DGJ, L.L.C. to the Company
and all other extraordinary charges ("EBITDA"), equals or exceeds one of
the EBITDA performance goals below (the "Performance Goals"), the Company
shall grant to Employee, at no cost to Employee, options to purchase the
corresponding number of shares of Common Stock of the Company (the "1999
Options") at an exercise price of $.04 per share (the "Exercise Price"),
subject to adjustment in the event of a stock split, stock dividend or
similar event, as determined by the Board of Directors of the Company:
EBITDA
Performance Goals Number of Shares
----------------- ----------------
$3,000,000 526,400
$4,500,000 526,400
$6,000,000 526,400
$7,500,000 526,400
$9,000,000 526,400
If and when the Company grants the 1999 Options to the Employee, the 1999
Options shall vest in increments of one-third (1/3), with one one-third
(1/3) portion vesting on the date the 1999 Options are granted to Employee
(the "1999 Grant Date") and one one-third (1/3) portion vesting on each of
the first and second anniversaries of the 1999 Grant Date.
(2) If, in Fiscal Year 2000, the Company's EBITDA equals or exceeds
one of the Performance Goals, the Company shall grant to Employee, at no
cost to Employee, options to purchase, at the Exercise Price, an amount of
shares equal to, but not less than zero,: (a) the number of shares of
Common Stock of the Company that corresponds to the equaled or highest
exceeded Performance Goal, (b) less the number of shares represented by the
1999 Options (the "2000 Options"). If and when the Company grants the 2000
Options to the Employee (the "2000 Grant Date"), the 2000 Options will vest
one-half (1/2) on the 2000 Grant Date and one-half (1/2) on the first
anniversary of the 2000 Grant Date.
(3) If, in Fiscal Year 2001, the Company's EBITDA equals or exceeds
one of the Performance Goals, the Company shall grant to Employee, at no
cost to Employee, options to purchase, at the Exercise Price, an amount of
shares equal to, but not less than zero,: (a) the number of shares of
Common Stock of the Company that corresponds to the equaled or highest
exceeded Performance Goal, (b) less the number of
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shares represented by the 1999 Options and the 2000 Options (the "2001
Options"). The 2001 Options shall vest 100% on the date they are granted to
Employee.
(4) The terms of the 1999 Options, the 2000 Options and the 2001
Options, if any, and the terms and conditions thereof shall be established
by the Board of Directors of the Company at the time of the grant of such
option upon such terms and conditions as are customary for stock options
held by employees of publicly-held companies. Notwithstanding the
foregoing, such options shall be exercisable for a minimum period of five
(5) years from the date of vesting, shall not be subject to repurchase by
the Company, and shall be freely transferable once vested.
(5) To the extent not previously vested, any and all options which the
Employee has received hereunder will immediately vest upon a Change in
Control of the Company. "Change of Control" as used herein means sale of
50% or more of the Common Stock of the Company, but not including the
exercise of any warrant held by DGJ, L.L.C. and its designees or assigns.
(c) Shares issuable under Section 3(b) of this Agreement shall be
registered on Form S-8 on or before July 31, 1999. The warrant shares issuable
under Section 3(c) of this Agreement shall be registered at the same time as the
warrant dated the date hereof from the Company to DGJ, L.L.C.
(d) During the term of Employee's employment hereunder, the Company shall
provide Employee with such benefits, if any, as are generally made available by
the Company to all of its other employees or to all other executive employees;
PROVIDED, HOWEVER, the Employee shall be entitled each calendar year to four (4)
weeks of vacation, at such time or times as is reasonably agreed upon by the
parties hereto, during which time the Employee shall receive his normal
compensation as provided for in Section 3(a) hereof.
(e) Employee shall be entitled to be reimbursed for all reasonable and
necessary out-of-pocket expenses incurred by Employee in the conduct of the
performance of his services for the Company in accordance with policies relating
thereto established by the President from time to time. The Company will
reimburse Employee for all such expenses following presentation by Employee,
from time to time, of an itemized accounting and appropriate substantiation of
such expenditures.
(f) Employee shall be entitled to be reimbursed for all reasonable and
necessary out-of-pocket expenses incurred by Employee in connection with the
moving of his personal residence to an area reasonably close to the Company's
office in North Dighton, Massachusetts. The Company will reimburse Employee for
all such expenses following presentation by Employee, from time to time, of an
itemized accounting and appropriate substantiation of such expenditures.
(g) Employee shall be entitled to be reimbursed for a reasonable amount of
loss on the sale of his house located in Wayne, Illinois. Such loss shall equal
that amount that is the current sale price deducted from the price the Employee
paid for the house when he purchased it.
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(h) Employee shall be entitled to the use of a car paid for and owned or
leased by the Company for the duration of this Agreement.
4. COVENANT NOT TO COMPETE. Employee acknowledges and agrees that he
has obtained and will continue to obtain knowledge and familiarity with the
operations of the Company, the conduct of the business of the Company, its
operating, manufacturing, distribution, marketing and sales procedures and
methods, the identity and requirements of its past, present and potential
customers and other proprietary information and trade secrets not generally
known to other persons or entities who can obtain economic value from its
disclosure or use which includes, without limitation, records, data,
documents, plans, policies, customer lists, price lists, names and addresses
of suppliers or representatives, or other matters of any kind or description
relating to any of the foregoing, irrespective of the medium on which
contained, which must be safeguarded and which are reasonable under the
circumstances to protect. To protect the Company, Employee hereby agrees that
during the term hereof and for a period of one (1) year from the date after
termination of Employee's employment by the Company and this Agreement's
termination, Employee shall not, directly or indirectly, to the furthest
extent permitted by law:
(a) own, manage, operate, control or participate in, or be associated in
any manner whatsoever, directly, indirectly or otherwise, with, or be connected
as an officer, employee, partner, director, member, manager, consultant or
otherwise with, or have any financial interest in, or aid or assist any person
or entity in the conduct of, or otherwise engage in, any business (whether it be
a sole proprietorship, partnership, limited liability company, corporation or
other entity) engaged in any business carried on by the Company anywhere within
the United States of America; or
(b) approach, solicit or otherwise encourage any employee of the Company to
terminate his or her employment with the Company, or to enter into employment
with any other person or entity; or
(c) approach, induce or persuade any customer of the Company, whether a
past, present or potential customer of the Company, to terminate its or not
pursue a (as applicable) relationship with the Company or to enter into any
relationship with any other person or entity engaged in the business of the
Company or in a business or businesses described in clause (a) above; or
(d) in any manner slander, libel or through any other means take any action
which is intended, or could reasonably be expected, to be detrimental to
Company, its products, personnel, prospects or operations; PROVIDED, HOWEVER,
ownership of not more than one percent (1%) of the securities of any
publicly-held corporation shall not constitute a violation of this Section 4.
(e) If any provision or part of this Section 4 is held to be unenforceable
because of the duration of such provision or the area covered thereby, Employee
and the Company agree to modify such provision or, that the court making such
determination shall have the power to modify such provision, to reduce the
duration or area of such provision, or both, or
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to delete specific words or phrases ("blue-penciling"), and in its reduced or
blue-penciled form, such provision shall then be enforceable and shall be
enforced.
5. EQUITABLE REMEDIES. Employee acknowledges and agrees to the fairness,
applicability, scope and nature of the covenants set forth in Sections 4, 7
and 8 hereof, and further agrees that the time period and scope specified
therein are the fair, appropriate and minimum and reasonable time and scope
necessary to protect the Company in the conduct of its business. Employee
further agrees that damages are not an adequate remedy in the event of a
violation of such covenants, and hereby agrees that, in case of violation,
the Company and its successors and assigns shall be entitled to injunctive
relief, without the posting of a bond, in addition to such other relief and
remedies as may otherwise be available in law or equity. The Company's
forbearance or failure to take action with regard to any violation of this
Agreement, shall not be deemed a waiver of such violation or limitation upon
the Company's rights as set forth in this Section.
6. EMPLOYEE ALTERNATIVE SERVICES. Employee represents and warrants to
the Company that, in the event of enforcement of the provisions of Sections
4, 5, 6, 7 and 8 hereof, Employee's experience, capabilities and prospects
are such that Employee can obtain employment that will not cause Employee to
be in violation of such Sections hereof, and that the enforcement of such
covenants hereunder by the Company by way of injunction will not prevent
Employee from earning a livelihood.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
(a) Employee hereby covenants and agrees that he will not, except as may be
required in connection with his employment with the Company, directly or
indirectly, use or disclose to any other person or entity, whether during or
subsequent to the term of his employment by the Company, irrespective of the
time, manner or cause of the termination of his employment, any information of a
proprietary nature belonging to the Company, or which could be reasonably
expected to have an adverse effect on the Company, its business, property or
financial condition, including, without limitation, records, data, documents,
processes, specifications, methods of operation, inventions, manufacturing
techniques and know-how, formulae, experimental or developmental work, plans,
policies, customer lists, price lists, the names and addresses of suppliers or
representatives, investigations or other matters of any kind or description
relating to the products, services, suppliers, customers, sales or businesses of
the Company.
(b) All records, files, drawings, data, computer programs, documents,
equipment, writings and the like relating to the Company's business which
Employee shall prepare, use, construct or observe, shall be and remain the sole
property of the Company, and upon termination of this Agreement or his
employment hereunder or otherwise with the Company for any reason, Employee
shall return to the possession of the Company any items of that nature and any
copies thereof which he may have in his possession.
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8. INVENTIONS.
(a) Any invention, improvement, discovery, process, formula or method
relating to or useful in connection with the business now or hereafter carried
on or contemplated by the Company, which is developed or discovered or which
comes to the attention of Employee while he is employed by the Company, will be
forthwith fully disclosed by him to the President of the Company. Any such
invention, improvement, discovery, process, formula or method will be the sole
and absolute property of the Company, and the Company will be the sole and
absolute owner of all patent and other rights in respect thereof, without the
necessity of any payment by the Company to Employee in connection therewith.
(b) Employee agrees to assign and transfer to the Company, without payment
of any money or other consideration, all of his right, title and interest in and
to any invention, improvement, discovery, process, formula or method, relating
to or useful in connection with the business now or hereafter carried on or
contemplated by the Company, which he may conceive, develop or make during the
term of his employment by the Company, either solely or jointly with others.
Upon request of the Company, Employee will execute and deliver, at the expense
of the Company, all such documents and will do all such other acts as may in the
Company's opinion be necessary or desirable to secure to the Company, its
successors and assigns, or its nominee, all right, title and interest in and to
any such invention, improvement, discovery, process, formula or method.
9. TERMINATION. Upon termination of Employee's employment by the
Company, by Employee or upon the death or disability of Employee, the rights
of Employee shall be as follows:
(a) DEATH OR DISABILITY OF EMPLOYEE; TERMINATION BY EMPLOYEE. If Employee
dies while employed by the Company, if Employee's employment is terminated by
the Company due to Employee's disability (as defined in Subparagraph (d)
hereinbelow), or if Employee elects to terminate his employment hereunder, this
Agreement shall immediately terminate without any further obligation on the part
of the Company to Employee, including, without limitation, no obligation to pay
Employee any salary or other benefits, except that the Company shall pay to
Employee or his Beneficiary (as hereinafter defined in Subparagraph (e)) only
such salary pursuant to Section 3 hereof as may be accrued and unpaid on the
date of such death, disability or termination of employment.
(b) TERMINATION BY THE COMPANY FOR CAUSE. If Employee's employment is
terminated at any time by the Company for cause, this Agreement shall
immediately terminate without any further obligation on the part of the Company,
including, without limitation, no obligation to pay Employee any salary or other
benefits, except that the Company shall pay to Employee only such salary
pursuant to Section 3 hereof as may be accrued and unpaid on the date of such
termination of employment. For purposes of the foregoing, "cause" shall mean any
of the following (i) willful failure or neglect of Employee to perform his
duties as set forth herein after written notice thereof by the Company; (ii) the
commission of fraud, theft, deceit, a felony, embezzlement, or improper use of
corporate funds by Employee, (iii) self-dealing by Employee detrimental to the
Company or any attempt to obtain any personal profit from any transaction in
which the Company has an interest, (iv) habitual intoxication or drug addiction,
(v) Employee's
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repeated failure after written notice thereof by the Company to perform or
comply with rules, regulations or requirements reasonably established by the
Company for Employee in the conduct of his employment hereunder, or (vi) any
material breach of this Agreement by Employee.
(c) TERMINATION BY THE COMPANY FOR OTHER REASONS. The Company shall have
the right at any time to terminate Employee's employment hereunder for any
reason by giving him written notice (which shall fix the date as of which his
employment is to terminate) of its intention to do so. If Employee's employment
hereunder is terminated by the Company other than for cause or by reason of
Employee's death or disability, the Company shall be obligated to pay Employee
only his salary pursuant to Section 3 hereof until the first to occur of the
following: (i) the end of the stated term of this Agreement; (ii) Employee's
engaging in any employment, business, or other activity, directly or indirectly,
which does or would constitute a violation of the provisions of Section 4 hereof
(whether or not the provisions of said Section 4 may have ceased to be operative
and/or effective for any reason); (iii) Employee's death or disability; or (iv)
any discovery of embezzlement or improper use of corporate funds by Employee,
self-dealing detrimental to the Company or any attempt to obtain personal profit
from any transaction in which the Company has an interest, or any breach of the
terms of this Agreement.
(d) DEFINITION OF DISABILITY. For purposes of the foregoing, the term
"disability" shall mean Employee's inability due to illness or other physical or
mental disability to substantially perform his duties as prescribed herein for a
period of ninety (90) days within any consecutive twelve (12) month period.
(e) DEFINITION OF BENEFICIARY. For purposes of the foregoing, the term
"Beneficiary" shall mean any person (including any trust or trustee) Employee
may have designated in a writing acceptable to and filed with the Company. In
the absence of the appointment of such a beneficiary or if such beneficiary
predeceases Employee or refuses to accept the benefits hereunder, then the term
"Beneficiary" shall mean the estate of Employee.
(f) CONTINUING OBLIGATIONS OF EMPLOYEE. Notwithstanding anything to the
contrary contained herein, termination of this Agreement or Employee's
employment, whether for cause, by reason of disability, by Employee or
otherwise, shall not be deemed in any way to affect Employee's obligations under
Section 4 through and including Section 9 of this Agreement, with respect to
which he shall remain bound.
10. GOVERNING LAW. This Agreement shall be construed, governed and
enforced in accordance with the internal laws of the State of Illinois,
without regard to conflicts of law principles.
11. MUTUAL CONTRIBUTION. The parties to this Agreement have mutually
contributed to its drafting. Consequently, no term or provision of this
Agreement shall be construed against any party on the ground that such party
drafted the provision or caused the provision to be drafted, or that any
party suffered any inequity or inequality in bargaining power causing such
party to accept any term or provision contained herein.
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12. MODIFICATION; ETC. This Agreement is the entire agreement and
understanding of the parties hereto with respect to the subject matter
hereof and supersedes any and all prior and contemporaneous negotiations,
understandings and agreements with regard to the subject matter hereof,
whether oral or written. No representation, inducement, agreement, promise
or understanding altering, modifying, taking from or adding to the terms
and conditions hereof shall have any force or effect unless the same is in
writing and validly executed by the parties hereto. The titles of the
Sections have been inserted as a matter of convenience of reference only
and shall not be construed to control or affect the meaning or construction
of this Agreement.
13. SEVERABILITY; ASSIGNMENT. If any portion of this Agreement is
found to be in violation of or conflict with any applicable law, the
parties agree that said portion shall be modified only to the extent
necessary to enable it to comply with such law, and the remainder of this
Agreement shall remain in full force and effect. This Agreement requires
the personal services of and is not assignable by Employee, but shall be
binding upon and inure to the benefit of the successors and assigns of the
Company.
14. NOTICES. All notices or other communications in connection with
this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed first class, postage prepaid and addressed
as follows: (i) if to the Company, addressed to: BPI Packaging
Technologies, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxxx
00000; Attention: Xxxxxxxxx Xxxxxx; and (ii) if to Employee, addressed to:
Xxxxx Xxxxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxxx 00000; or
such other address or addressed to the attention of such other person or
persons as either of the parties may notify the other in accordance with
the provisions of this Section.
15. CHOICE OF FORUM AND VENUE. EMPLOYEE AND THE COMPANY, IN ORDER TO
INDUCE EACH OTHER TO ENTER INTO THIS AGREEMENT, HEREBY AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH,
OUT OF, RELATED TO OR FROM THIS AGREEMENT SHALL BE LITIGATED, IN COURTS
HAVING SITUS WITHIN THE U.S.A., STATE OF ILLINOIS, COUNTY OF XXXX. EMPLOYEE
AND THE COMPANY HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY SUCH
STATE OR FEDERAL COURT LOCATED WITHIN SUCH COUNTY. EMPLOYEE AND THE COMPANY
HEREBY WAIVE ANY RIGHT EACH OF THEM MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT BY OR AGAINST EITHER OF THEM IN ACCORDANCE
WITH THIS SECTION.
16. OPPORTUNITY FOR INDIVIDUAL COUNSEL. All parties hereto hereby
acknowledge and agree that they have each had an opportunity to read this
Agreement in its entirety and to obtain separate counsel before such
party's execution of this Agreement, and that this Agreement is made
voluntarily and without duress of any kind.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first written above.
EMPLOYEE BPI PACKAGING TECHNOLOGIES, INC.
/s/ Xxxxx Xxxxxxxx
------------------------------------------ By /s/ Xxxxxxxxx Xxxxxx
XXXXX XXXXXXXX ------------------------------
Title: President
--------------------------
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