EXHIBIT 10.9
EXECUTION COPY
KEY EMPLOYEES A
[ XXXXXX ]
[ HAYDEN ] RETENTION AND SEVERANCE AGREEMENT
[ XXXXX ]
AGREEMENT made as of August 16, 1999 between World Color Press, Inc., a
Delaware corporation (the "Company"), with offices at 000 Xxxxxxxxxx Xxxx,
Xxxxxxxxx, XX 00000, and the employee whose name is set forth on the signature
page hereof (the "Employee").
WHEREAS, the Employee is employed by the Company or by one of its
wholly-owned consolidated subsidiaries;
WHEREAS, through a wholly-owned subsidiary, Quebecor Printing Inc. (the
"Parent") intends to acquire the Company by two-step transaction, and the
consummation of the first step tender offer shall be referred to as the
"Effective Date" of this Agreement; PROVIDED, HOWEVER, that in the event the
transaction is converted to a one-step merger, the Change in Control and
therefore the Effective Date hereof will occur upon the effective date of such
merger;
WHEREAS, the Company wishes to encourage and provide incentive to the
Employee to remain with and devote full time and attention to the business
affairs of the Company and wishes to provide income protection to the Employee
following the Effective Date;
NOW, THEREFORE, in consideration of the mutual agreement and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. DEFINITIONS.
(a) "CAUSE" shall mean the Employee's (i) conviction or guilty
plea or plea of nolo contendere of a felony involving fraud or dishonesty; (ii)
theft or embezzlement of property from Parent or the Company; or (iii) willful
and continued refusal by the Employee substantially to perform the duties of his
or her position (other than any such failure resulting from Employee's
incapacity due to physical or mental illness or any such actual or anticipated
failure after the Employee's issuance of a notice of termination for "Good
Reason" (as defined herein)), within a reasonable period of time after receipt
of written notice from the Company specifying the manner in which the Company
believes the Employee is not substantially performing the duties of his or her
position. For this definition, no act or failure to act shall be deemed willful
unless done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that the Employee's act, or failure to act was in the
best 'interests of the Company.
(b) "Code"shall mean the Internal Revenue Code of 1986, as
amended.
(c) "DATE OF TERMINATION" shall mean fifteen days following a
party's receipt of the Notice of Termination or the date of death.
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(d) The Employee shall have "GOOD REASON" to terminate
employment if (i) the Employee's level of compensation immediately prior to or
after the Effective Date is reduced, or level of benefits in effect immediately
prior to or after the Effective Date is reduced in any material respect; (ii)
any purchaser, assign, surviving corporation, or successor of Parent or the
Company or their respective businesses or assets (whether by acquisition,
merger, liquidation, consolidation, reorganization, sale or transfer of assets
of business or otherwise) fails or refuses to expressly assume in writing this
Agreement and all of the duties and obligations of the Company hereunder
pursuant to Paragraph 13 hereof; (iii) Parent or the Company fails to pay any
amounts due to the Employee; or (iv) the Company breaches any of the provisions
of this Agreement.
(e) "NOTICE OF TERMINATION" During the term of this Agreement,
any purported termination of the Employee's employment (other than by reason of
death) shall be communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Paragraph 14 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstance claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated.
(f) "PERMANENT DISABILITY" shall mean the Employee is unable
to engage in the activities required by the Employee's job by reason of any
medically determined physical or mental impairment for a period of six
consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period.
(g) "TERMINATION OF EMPLOYMENT" shall mean the termination of
the Employee's employment with Parent and the Company for any reason.
2. TERM. The initial term of this Agreement shall be for the period
commencing on the Effective Date, if and only if such Effective Date occurs, and
ending on the fifth anniversary thereafter. The term shall be automatically
extended by one additional day for each day beyond the fifth anniversary of the
date of this Agreement that the Employee remains employed by Parent or the
Company until such time as Parent or the Company (as applicable) elects to cease
such extension by giving written notice of such to the Employee. The Agreement
shall thus terminate on the second anniversary of the effective date of such
notice.
3. RETENTION BONUSES. The Employee shall be entitled to a bonus (the
"Retention Bonus") equal to a cash payment equal to the amount set forth on the
signature page hereof, forty percent of which shall be paid on the Effective
Date and sixty percent of which shall be paid on the first anniversary of the
Effective Date if the Employee remains employed by the Company or its
affiliates.
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4. SEVERANCE BENEFITS,
(a) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. The Employee
shall be entitled to severance benefits if, during the one-year period
commencing on the Effective Date, the Employee has a Termination of Employment
initiated (i) by Parent or the Company without Cause or (ii) by the Employee for
Good Reason. Such severance benefits shall include (i) a cash payment, which
shall be payable in one lump sum as soon as reasonably practicable after the
Date of Termination, but in no event more than fourteen days thereafter, equal
to the unpaid balance, if any, of the Retention Bonus; and (ii) continuation of
coverage under and participation in employee welfare and fringe benefit plans or
programs that the Employee (or any beneficiary) is covered under or
participating in immediately prior to Notice of Termination (without giving
effect to any reduction in such benefits which constitutes Good Reason) (or, if
higher, immediately prior to the Effective Date) (or substantially equivalent
plans or programs on a benefit by benefit basis) until the earlier of (x) the
one-year anniversary of the Date of Termination and (y) the date on which the
Employee becomes re-employed and receives comparable benefits under welfare and
fringe benefit plans of a successor employer; PROVIDED, HOWEVER, that in the
event that the Employee is party to an employment and/or noncompete agreement
with the Company or any of its affiliates and such agreement provides severance
benefits upon termination without Cause (and such provision is applicable), then
the Employee shall be entitled to severance benefits under whichever agreement
provides greater severance benefits, and no severance shall be paid under the
other agreement.
(b) TERMINATION UPON DEATH OR DISABILITY. The Employee (or his
or her representative, if applicable) shall be entitled to the following
severance benefits if, during the one year period commencing on the Effective
Date, the Employee has a Termination of Employment due to death or Permanent
Disability: (i) a cash payment, which shall be payable in one lump sum as soon
as reasonably practicable after the Date of Termination, but in no event more
than fourteen days thereafter, equal to the unpaid balance, if any, of the
Retention Bonus; and (ii) continuation of coverage under and participation in
employee welfare and fringe benefit plans or programs that the Employee (or any
beneficiary) is covered under or participating in immediately prior to Notice of
Termination (or, if higher, immediately prior to the Effective Date) (or
substantially equivalent plans or programs on a benefit by benefit basis) until
the earlier of (x) the one-year anniversary of the Date of Termination and (y)
the date on which the Employee becomes re-employed and receives comparable
benefits under welfare and fringe benefit plans of a successor employer.
(c) LEGAL AND ACCOUNTING FEES AND EXPENSES. The Company also
shall pay to the Employee all legal and accounting fees and expenses incurred by
the Employee as a result of a termination which entities the Employee to the
severance benefits hereunder (including all such fees and expenses, if any,
incurred in disputing any such termination or in seeking in good faith to obtain
or enforce any benefit or right provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment of benefit provided by the Company).
Such payments shall be made within five business days after delivery of the
Employee's written requests for
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payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
5. PAYMENTS OTHER THAN SEVERANCE . Subject to Paragraph 9 herein, upon
any Termination of Employment, whether or not the severance benefits outlined in
Paragraph 4 above are payable, the Employee shall also be entitled to all
compensation and other amounts accrued, due and owing to Employee from Parent or
the Company or under any employee benefit plan of Parent or the Company, as of
the Date of Termination.
6. EMPLOYEE'S AGREEMENTS,
(a) NON-COMPETE. In consideration of the Noncompete Payment,
the Employee hereby covenants and agrees that for the twelve-month period
following the earlier of any Termination of Employment and the first anniversary
of the Effective Date, he or she shall not directly or indirectly, own, manage,
operate, 'oin, control or participate in the ownership, management, operation or
control, or be connected as a director, officer, employee, partner, consultant
or otherwise with any Competing Business, other than as a shareholder or
beneficial owner, directly or indirectly of five percent or less of the
outstanding securities of a publicly held Competing Business. For purposes of
this Agreement, "Competing Business" means any business, firm or enterprise
engaged in a business substantially similar to the Company's printing business
as it exists at the time of the Effective Date within the same geographical
locations in the United States in which the Company operates on the Effective
Date. The "Noncompete Payment" shall be equal to amount set forth on the
signature page hereto, forty percent of which shall be paid on the Effective
Date and sixty percent of which shall be paid on the earlier of the first
anniversary of the Effective Date or termination of the Executive's employment
without Cause, for Good Reason or by reason of death or Permanent Disability.
(b) NON-SOLICITATION. In consideration of the Noncompete
Payment, the Employee hereby covenants and agrees that for the twelve-month
period following the earlier of any Termination of Employment and the first
anniversary of the Effective Date, he or she shall not directly or indirectly,
(i) solicit any employee of the Company or its affiliates to leave the
employment of the Company or its affiliates, or (ii) solicit any customer of the
Company or its affiliates to end its business relations with the Company or its
affiliates.
(c) ENFORCEMENT. It is expressly understood and agreed that
although the Employee and the Company consider the restrictions contained in
this Paragraph 6 to be reasonable, if a final judicial determination is made by
a court of competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable restriction against
the Employee, the provisions of this Agreement shall not be rendered void but
shall be deemed amended to apply as to such maximum time and territory and to
such maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.
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7. GOLDEN PARACHUTE GROSS-UP. If, in the written opinion of a
nationally recognized accounting firm, selected by the Company and reasonably
acceptable to the Employee for this purpose (at the Company's expense), or if so
alleged by the Internal Revenue Service ("IRS"), the aggregate of the benefit
payments and provisions under this Agreement and any other arrangement between
the Employee and Parent or the Company (the "Payments") would cause the payment
or provision of one or more of such benefits to constitute an "excess parachute
payment" as defined in Section 28OG(b) of the Code, then the Company will pay to
the Employee an additional amount in cash (the "Gross-Up Payment") equal to the
amount necessary to cause the net amount retained by the Employee, after
deduction of any (i) excise tax on the Payments, (ii) federal, state or local
income tax on the Gross-Up Payment, (iii) excise tax on the Gross-Up Payment and
(iv) any penalty and interest related to the Payments, to be equal to the
aggregate remuneration the Employee would have received, excluding such Gross-Up
Payment (net of all federal, state and local excise and income taxes), as if
Sections 28OG and 4999 of the Code (and any successor provisions thereto) had
not been enacted into law. The Gross-Up Payment provided for in this Paragraph
shall be made within ten days after the termination of Employee's employment or
the date on which any Payment is made that is reasonably likely to constitute an
"excess parachute payment"; PROVIDED, HOWEVER, that if the amount of the
Gross-Up Payment cannot be finally determined at the time, the Company shall pay
to Employee an estimate as determined in good faith by the Company of such
payments (together with interest at the rate provided in section 1274(b)(2)(B)
of the Code) as soon as the amount thereof can be determined but in no event
after the earlier of (i) the date any related withholding taxes are due or (ii)
the thirtieth day after the date of termination or the date on which any Payment
is made that is reasonably likely to constitute an "excess parachute payment."
The Company agrees to reimburse the Employee for reasonable fees and
expenses (including reasonable attorneys and accountants fees and expenses) in
connection with any audit or assessment by the IRS if a claim ("Claim") arises
out of, or results from the treatment or characterization by the IRS of any
Payments made by Parent or the Company and for the cost of preparing the
Employee's income tax returns for the year in which any Payment by Parent or the
Company may be characterized as an excess parachute payment. The Employee shall
notify the Company in writing of any such Claim as soon as practicable, but in
no event later than ten business days after the Employee is informed of such
Claim and shall cooperate with the Company in good faith to effectively contest
the Claim. The Company shall, at its expense, control all proceedings in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such Claim and the Employee agrees to cooperate
in the prosecution of such contest in such manner as the Company shall
reasonably determine, subject to the Company's obligations hereunder; PROVIDED,
HOWEVER, that no final resolution of such claim may be made by the Company
without the Employee's consent if such resolution could adversely affect the
Employee. Notwithstanding the foregoing, if the Company forgoes further
prosecution of such contest, the Employee may elect to continue such prosecution
and the Company shall cooperate with the Employee and shall be liable for the
fees and expenses in connection with such further prosecution.
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8. EMPLOYMENT AT-WILL. Notwithstanding anything to the contrary
contained herein, the Employee's employment with the Company is not for any
specified term and may be terminated by the Employee or by the Company at any
time, for any reason, with or without cause, without liability except with
respect to the severance benefits provided hereunder or as required by law or
any other contract or employee benefit plan or practice.
9. WAIVER OF OTHER SEVERANCE BENEFITS. Subject to the proviso in
Paragraph 4(a) herein, the benefits payable pursuant to this Agreement are in
lieu of any other severance benefits which may otherwise be payable to the
Employee upon termination within one year following a change in control pursuant
to agreement, policy or practice, except those benefits which are to be made
available to the Employee as required by applicable law.
10. DISPUTE. All claims by the Employee for benefits under this
Agreement shall be directed to and determined by the Board of Directors of the
Company and shall be in writing. Any denial by the Board of Directors of the
Company of a claim for benefits under this Agreement shall be delivered to the
Employee in writing and shall set forth the specific reasons for the denial and
the specific provisions of this Agreement relied upon. Any dispute or
controversy arising under, out of, in connection with or in relation to this
Agreement shall, at the election and upon written demand of either party, be
finally determined and settled by binding arbitration in the town of Greenwich,
CT, using a mutually agreeable single arbitrator, in accordance with the Labor
Arbitration rules and procedures of the American Arbitration Association, and
judgment upon the award may be entered in any court having jurisdiction thereof.
The arbitrator shall have the power to order specific performance, mandamus, or
other appropriate legal or equitable relief to enforce the provisions of this
Agreement. The Company shall pay all costs of the arbitration and all reasonable
attorney's and accountant's fees and expenses of the Employee in connection
therewith.
11. NO SET-OFF. There shall be no right of set-off or counterclaim in
respect of any claim, debt, or obligation against any payment to or benefit for
the Employee provided for in this Agreement.
12. NO MITIGATION OBLIGATION. The parties hereto expressly agree that
the payment of the benefits by the Company to the Employee in accordance with
the terms of this Agreement will be liquidated damages, and, except with respect
to reduction of employee welfare and fringe benefits but only to the extent
specifically provided for in Paragraph 4(a), that the Employee shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor shall any profits, income, earnings
or other benefits from any source whatsoever create any mitigation, offset,
reduction or any other obligation on the part of the Employee hereunder or
otherwise.
13. SUCCESSORS: BINDING AGREEMENT
(a) This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company or by any merger or consolidation where
the Company is not the surviving corporation, or upon any transfer of all or
substantially all of the Company's
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assets, or any other change in control. The Company shall require any purchaser,
assign, surviving corporation, or successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
the form and substance satisfactory to the Employee, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent the
Company would be required to perform if no such succession had taken place. This
Agreement shall be binding upon and inure to the benefit of the Company and any
purchaser, assign, surviving corporation or successor to the Company, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business and assets of the Company whether by purchase,
merger, consolidation, reorganization, transfer of all or substantially all of
the business or assets of the Company, or otherwise (and such purchaser, assign,
surviving corporation or successor shall thereafter be deemed the "Company" for
the purposes of this Agreement), but this Agreement shall not otherwise be
assignable, transferable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Paragraph 13. Without limiting the generality of the
foregoing, the Employee's right to receive payments hereunder shall not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest or otherwise, or otherwise subject to anticipation, alienation, sale,
encumbrance, charge, hypothecation, or set-off in respect of any claim, debt, or
obligation, or to execution, attachment, levy or similar process, or assignment
by operation of law, other than by a transfer by his will or by the laws of
descent and distribution. Any attempt, voluntary or involuntary, to effect any
action prohibited by this Paragraph shall be null, void, and of no effect.
14. NOTICES. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, or other similar
means of communication, as follows:
(a) the attention of its Secretary; If to the Company,
addressed to its principal Employee offices to
(b) If to the Employee, to him or her at the address set forth
below under the Employee's signature; or at any such other address as either
party shall have specified by notice in writing to the other.
15. AMENDMENTS: WAIVERS. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by the Employee and by
a duly authorized representative of the Company. By an instrument in writing
similarly executed, either
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party may waive compliance. by the other party with any provision of this
Agreement that such other party was or is obligated to comply with or perform;
PROVIDED, HOWEVER, that such waiver shall not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, or power provided herein or by law
or in equity.
16. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements (including Schedule 6. 1 1 to the Agreement and
Plan of Merger among Parent, Printing Acquisition Inc. and the Company dated as
of July 12, 1999 (the "Merger Agreement")), promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto. The parties further
intend that this Agreement shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this Agreement.
Notwithstanding the foregoing, nothing in this Agreement shall affect the
treatment of the Employee's stock options or restricted stock, if any, or the
Employee's third party beneficiary rights under the Merger Agreement (except
with respect to Schedule 6.11 of the Merger Agreement). Notwithstanding the
foregoing, this Agreement shall not affect or supersede any existing employment
and/or noncompete agreement between the Employee and the Company or any of its
affiliates, except to the extent provided in the proviso in Paragraph 4((a)
herein.
17. SEVERABILITY: ENFORCEMENT. If any provision of this Agreement, or
the application thereof to any person, place or circumstance shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
18. INDEMNIFICATION. The Company shall indemnify, defend, and hold the
Employee harmless from and against any liability, damages, costs, or expenses
(including legal and accounting fees and expenses) in connection with any claim,
cause of action, investigation, litigation, or proceeding involving him or her
by reason of his or her having been an officer, director, employee, or agent of
the Company, unless it is judicially determined, in a final, nonappealable
order, that the Employee was guilty of gross negligence or willful misconduct.
19. GOVERNING LAW. This Agreement shall be interpreted, administered
and enforced in accordance with the law of the State of Connecticut, except to
the extent preempted by Federal law.
20. COUNTERPARTS. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
The parties have duly executed this Agreement as of the date first written
above.
Employee Name:
Retention Bonus:
Noncompete Payment:
WORLD COLOR PRESS, INC EMPLOYEE
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By:
Title:
