Exhibit 10d
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and entered into as of the 1st day of July,
1998, by and between JPS PACKAGING COMPANY (the "Company") and XXXX X. XXXXXX
("Employee").
RECITALS
A. The Company is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware and is
engaged principally in the design and manufacture of flexible packaging
products.
B. Employee is duly qualified to render services in connection with
the business of the Company.
C. The Company has offered to employ Employee on the basis set forth
in this Agreement, and Employee has indicated his willingness to accept said
offer.
D. The parties believe that it is in their best interests to provide
for the specific terms and conditions of Employee's employment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
as hereinafter set forth, the parties agree as follows:
1. Employment.
The Company agrees to employ Employee as President and Chief Operating
Officer of the Company pursuant to the terms set forth below, and Employee
agrees to accept such employment with the Company in accordance with the terms
and conditions set forth in this Agreement.
2. Term.
The term of this Agreement shall begin on July 1, 1998, and shall
continue until either party gives the other thirty (30) days written notice of
its/his election to terminate this Agreement.
3. Compensation.
For services rendered by Employee pursuant to this Agreement, Employee
shall receive from the Company the following:
(a) Base Compensation. Employee's starting base monthly salary
shall be $12,916.67 ($155,000, annualized amount ["Base Annual Salary"]).
On or before July 1 of each year (commencing in 1999) during the term of
this Agreement, the
Compensation Committee of the Board of the Directors of the Company (the
"Board") (or, if no such committee or similar committee exists, the entire
Board) (the "Compensation Committee") shall review the performance of
Employee, which review shall serve as the basis for determining the amount
of increase, if any, of Employee's Base Annual Salary. The amount and terms
of any such adjustments shall be in the discretion of the Compensation
Committee; however, typically adjustments to base salary are effective as
of an employee's employment anniversary date.
(b) Incentive Compensation. As an executive officer of the
Company, Employee will be eligible to participate in the Company's
Incentive Compensation Plan (the "Incentive Plan"). Pursuant to the
Incentive Plan, the Compensation Committee will annually establish both the
Company-wide goal and individual target awards; provided, however, the
first period for the Company-wide goal and individual target awards will be
July 1, 1998 to December 31, 1998. Employee's target award initially will
be 50% of his Base Annual Salary, prorated for the initial partial year. In
each successive calendar year, Employee's individual target award will be
as set at a level not less than 50% of Base Annual Salary by the
Compensation Committee and Employee's actual incentive bonus will be based
entirely upon the Company's performance relative to the Company-wide goal,
all subject to the Incentive Plan as then in effect. Notwithstanding the
foregoing, payment of bonuses under the Incentive Plan for any year is
dependent upon Employee's employment with the Company at the end of such
calendar year.
(c) Vacation. Assuming an employment starting date of July 1,
1998, Employee will be entitled to accrue two weeks of paid vacation during
the remainder of 1998 in addition to any carryover of accrued vacation from
Sealright Co., Inc. at the applicable compensation rate. Commencing in
1999, Employee will be entitled to accrue four weeks of paid vacation each
calendar year.
(d) Stock Options. Subject to the terms and conditions of the
JPS Packaging Company 1998 Long-Term Compensation Plan (the "Plan") and the
Stock Option Agreement between the Company and Employee attached hereto as
Schedule A (the "Option Agreement"), the Company will grant to Employee on
"incentive stock option" (as defined in the Plan) to purchase 55,000 shares
of the common stock of the Company (the "Option"). The terms and conditions
of the Option are set forth in the Option Agreement, which is incorporated
herein and made part of this Agreement.
4. Benefits.
Employee shall be entitled to participate in all benefit programs and
incentive compensation plans that the Company makes generally available to its
executive officers, subject to Employee's meeting the eligibility provisions
thereof and, if applicable, as determined by the Compensation Committee.
Nothing contained herein shall preclude the Company, in its sole discretion,
from changing or amending, in whole or in part, or revoking any one or more of
such benefit programs or compensation plans or adopting new employee benefit
programs or compensation plans.
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5. Duties.
During Employee's term of employment by the Company, Employee shall
devote his normal working hours, attention and energies to the Company. Employee
shall serve to the best of his ability and shall perform the duties and have
such responsibilities consistent with Employee's position as President and Chief
Operating Officer of the Company, which duties and responsibilities shall be
similar to those of presidents and chief operating officers of companies in the
packaging industry having revenues comparable to those of the Company. Employee
agrees to abide by the rules, procedures, regulations, instructions, and
practices of the Company and any changes therein which may be adopted from time
to time by the Company.
6. Business Expenses.
In addition to compensation paid to Employee pursuant to Section 3,
during the term of Employee's employment hereunder, the Company agrees to
reimburse Employee for all reasonable and necessary business expenses which
Employee incurs in the performance of his duties hereunder in accordance with
the policies and procedures adopted from time to time by the Company (whether or
not in writing).
7. Sale of the Company.
In the event the Board has resolved to sell the Company (either by
sale of substantially all the assets, merger, consolidation, or other similar
transaction) (the "JPS Sale") and has entered into a letter of intent or
definitive agreement for the JPS Sale with a prospective purchaser within twelve
(12) months of the date of this Agreement, Employee shall receive a bonus in the
amount of:
(a) $100,000, if the total sale price of the Company (as
determined by the actual proceeds received by stockholders of JPS) (the
"JPS Sale Price") is less than $45,000,000; or
(b) $100,000, plus one percent (1%) of the JPS Sale Price in
excess of $45,000,000, up to a maximum aggregate bonus of $250,000, if the
JPS Sale Price exceeds $45,000,000.
8. Employment Termination.
The employment of Employee by the Company pursuant to this Agreement
shall terminate upon the occurrence of any of the following:
(a) Death or Disability. Immediately upon the death or
disability of Employee. For purposes of this Agreement, "disability" shall
mean the inability of Employee to perform his duties hereunder for a period
of ninety (90) consecutive calendar days, or for a period of one hundred
twenty (120) calendar days whether or not consecutive, during any three
hundred and sixty (360) day period due to a physical or mental incapacity.
The determination of disability shall be made by a disinterested medical
doctor, licensed to practice in the State of Kansas, chosen jointly by the
parties. Notwithstanding the definition of "disability" herein, if and only
if the Company provides disability insurance coverage to Employee at the
Company's cost, Employee's
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employment hereunder shall not be terminated by reason of disability until
the Company's disability insurance carrier has certified Employee as
disabled and has commenced (or agreed in writing) to pay disability
benefits to Employee.
(b) Cause. At the election of the Company for cause,
immediately (except as provided below) upon written notice by the Company
to Employee. For purposes of this Agreement, "cause" shall mean:
(i) The willful failure by Employee to perform his material
duties hereunder (other than any such failure resulting from
Employee's death or disability), as determined in good faith by a
majority of the Board;
(ii) The (A) continued failure (which failure need not be
willful) by Employee to perform his material duties hereunder (other
than any such failure resulting from Employee's death or disability)
or (B) breach by Employee of any material provision of this Agreement
(which failure or breach has not been cured by Employee within thirty
(30) days after written notice thereof by the Board of Directors), all
as determined in good faith by a majority of the Board;
(iii) Employee's conviction of a felony by a trial court of
competent jurisdiction, whether or not an appeal is taken; or
(iv) The willful engaging by Employee in unlawful conduct
(including acts of dishonesty) in connection with the business of the
Company, as determined in good faith by a majority of the Board.
(c) Good Reason. At the election of Employee for good reason,
immediately upon written notice by Employee to the Company. For purposes of
this Agreement, "good reason" shall mean:
(i) A change in Employee's responsibilities, titles, or
offices that is not consistent with Employee's status and duties
hereunder; or
(ii) A Change of Control (as hereinafter defined) during the
period of Employee's employment hereunder. For the purposes of this
Agreement, the term "Change of Control" shall mean: (A) a person,
corporation, entity or group, which (collectively) does not
beneficially own at least twenty-five percent (25%) of the Company's
issued and outstanding voting stock as of the date hereof, (I) makes a
tender or exchange offer for the issued and outstanding voting stock
of the Company and beneficially owns 25% or more of the issued and
outstanding voting stock after such tender or exchange offer, or (II)
acquires, directly or indirectly, the beneficial ownership of 25% or
more of the issued and outstanding voting stock of the Company in a
single transaction or series of transactions (excluding the
acquisition of newly issued voting stock of the Company issued in full
or part payment for the purchase by the Company or any subsidiary of
the Company of stock or assets), or (B) the Company is a party to a
merger, consolidation or similar transaction and following such
transaction 50%
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or more of the issued and outstanding voting securities of the
resulting entity is beneficially owned by a person, corporation,
entity or group other than the stockholders of the Company immediately
prior to the transaction, or (C) the Company sells 50% or more of its
assets to any other person or persons.
(d) Election of Company. Upon thirty (30) days prior written
notice from the Company to Employee, for reasons other than "cause," as
defined in 8(b), above.
(e) Election of Employee. Upon thirty (30) days prior written
notice from Employee to Company, for reasons other than "good reason," as
defined in 8(c), above.
9. Effect of Termination.
(a) Base Compensation and Benefits. In the event Employee's
employment is terminated for any reason, all compensation and benefits
shall cease, except that the Company shall pay to Employee that portion of
his then Base Annual Compensation that has been earned but unpaid at the
time of such termination and reimbursable expenses incurred by but not yet
reimbursed to Employee at the time of such termination.
(b) Termination Payment. In the event Employee's employment is
terminated by Employee pursuant to Section 8(c) or by the Company pursuant
to Section 8(d) within twelve (12) months of the date of this Agreement,
the Company shall pay to Employee a lump sum payment of $168,000, as a
termination payment, within thirty (30) days of his date of termination, in
addition to any amounts owed to Employee pursuant to Section 9(a). In the
event Employee's employment is terminated by Employee pursuant to Section
8(c) or by the Company pursuant to Section 8(d), at anytime after twelve
(12) months from the date of this Agreement, the Company shall pay to
Employee a lump sum payment equal to one-half of his then Base Annual
Salary, as a termination payment, within thirty (30) days of his date of
termination, in addition to any amounts owed to Employee pursuant to
Section 9(a).
(c) Stock Options.
(i) In the event Employee's employment is terminated
pursuant to Section 8(a), (c) or (d), Employee's Option, to the extent
not previously vested, shall immediately vest and shall become
exercisable for the total amount of unexercised Option Shares (as
defined in the Option Agreement) thereunder until the first to occur
of: (A) midnight on the tenth anniversary of the Grant Date; or (B)
the one year anniversary date of the termination of Employee. Any such
exercise following Employee's death may be made only by such
Employee's personal representative, unless Employee's will
specifically disposes of the Option, in which case such exercise shall
be made only by the recipient of such specific disposition. If
Employee's personal representative, or such recipient, shall be
entitled to exercise the Option pursuant to the preceding sentence,
such representative or recipient shall be bound by all the terms and
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conditions of this Agreement, the Option Agreement and the Plan which
would have applied to Employee's exercise of the Option.
(ii) In the event Employee's employment is terminated
pursuant to Section 8(b) or by Employee pursuant to Section 8(e), the
Option shall terminate and expire on the day Employee's employment
terminates; provided, however, that in the discretion of the Board,
the Option shall terminate and expire on the day Employee is notified
of his dismissal.
10. Notices.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered
personally or if sent by certified mail, return receipt requested, with first
class postage prepaid, addressed (a) to Employee at 0000 Xxxx 00xx Xxxxxx,
Xxxxxxx Xxxxxxx, XX 00000, and (b) to the Company at 0000 Xxxxxxxxx Xxxxx,
XxXxxx, Xxxxxx 00000, Attention: Chief Executive Officer. Any notice which is
required to be made within a stated period of time shall be deemed timely if
made before midnight of the last day of such period.
11. Alteration, Amendment or Termination.
No change or modification of this Agreement shall be valid unless the
same is in writing and signed by all the parties hereto. No waiver of any
provision of this Agreement shall be valid unless in writing and signed by the
person against whom it is sought to be enforced. The failure of any party at any
time to insist, or a delay in insisting, upon strict performance of any
condition, promise, agreement or understanding set forth herein shall not be
construed as a waiver or relinquishment of the right to insist upon strict
performance of the same condition, promise, agreement, or understanding at a
future time. A waiver or consent given by a party hereto on one occasion shall
be effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
12. Integration.
This Agreement sets forth (and is intended to be an integration of)
all of the promises, agreements, conditions, understandings, warranties and
representations, oral or written, express or implied, among the parties hereto
with respect to the terms of employment, and there are no promises, agreements,
conditions, understandings, warranties or representations, oral or written,
express or implied, among the parties hereto with respect to the terms of
employment other than as set forth herein.
13. Governing Law and Venue.
This Agreement and all disputes arising hereunder shall be subject to,
governed by and construed in accordance with the laws of the State of Kansas,
irrespective of the fact that one or more of the parties now is or may become a
resident of a different state. Employee hereby expressly submits and consents
to the exclusive in personam jurisdiction and exclusive venue of
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the courts of competent jurisdiction in the State of Kansas, including the
United States District Court for the District of Kansas.
14. Benefit and Burden.
This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, heirs, and personal
representatives. This Agreement, including the Option granted herein, shall not
be assignable, except the Option may be assignable pursuant to Section 9(c)(i).
15. Captions.
The headings of the sections and paragraphs are for convenience only
and in no way define, limit or affect the scope or substance of any section or
paragraph of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be affixed hereto, and
each of the parties hereto has executed this Agreement effective as of the date
and year first above written.
COMPANY:
JPS PACKAGING COMPANY
/s/ Xxxxxxx X. Xxxxxx
By: ___________________________
Xxxxxxx X. Xxxxxx
Name: ___________________________
Director
Title: ___________________________
EMPLOYEE:
/s/ Xxxx X. Xxxxxx
__________________________________
Xxxx X. Xxxxxx
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