EXHIBIT 10.7
CONFORMED COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is dated the 21st day of June,
2000 (the "Effective Date") by and between Tekni-Plex, Inc., a Delaware
corporation (the "Employer"), having its principal offices at 000 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, XX 00000, and Xxxxxxx X.X. Xxxxx, an individual (the
"Executive"), residing at 00 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Executive has been continuously employed by the Employer
since April 4, 1994 and the Executive and the Employer desire that the
Executive continue in his role as the President and Chief Operating Officer of
Employer, upon the terms and conditions herein set forth;
WHEREAS, on April 4, 1997 the Employer and Executive entered into an
employment agreement which superceded and replaced in its entirety the prior
employment agreement between the Employer and the Executive dated April 4, 1994
(as amended, the "Prior Agreement");
WHEREAS, on March 2, 1998 the Employer and the Executive entered into
Amendment Number 1 to the employment agreement dated April 4, 1997 (as amended,
the "Original Agreement"); and
WHEREAS, in connection with the recapitalization of the Employer pursuant
to the Recapitalization Agreement dated as of April 12, 2000 among the Employer
and other parties thereto, the Employer and Executive each desires to amend the
terms of and restate the existing Original Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained in this Agreement, the Employer and the Executive,
intending to be legally bound, hereby agree as follows:
1. Employment. Subject to the terms and conditions hereinafter set forth,
the Employer hereby employs the Executive as President and Chief Operating
Officer of Employer, and the Executive hereby accepts such employment.
2. Term. The term of employment of the Executive by the Employer commenced
on April 4, 1994 pursuant to the Prior Agreement, which was superceded and
replaced by the Original Agreement effective April 4, 1997 and by
this Agreement on the date hereof. The term of employment (the "Employment
Term") pursuant to this Agreement shall terminate upon the earlier of: (a) June
27, 2003, to coincide with the fiscal year-end of Employer, or (b) the date on
which the employment of the Executive is terminated pursuant to Section 9
hereof. Absent written notice of intent not to renew by either party at least
90 days prior to the end of each fiscal year, beginning with the end of fiscal
year 2001, the Employment Term shall be automatically extended for a period of
one year after the previously scheduled expiration of the Employment Term.
3. Duties. During the Employment Term, the Executive shall render his
services to the Employer as President and Chief Operating Officer to perform
the duties and services usually pertaining to such offices and to perform such
other administrative and managerial functions as may be assigned to Executive
from time to time by the Chief Executive Officer or by the Board of Directors
of the Employer. In addition to the foregoing, the Executive shall hold,
without additional compensation therefor, such other offices, directorships or
memberships of committees of the Employer and/or any subsidiary or affiliate of
the Employer to which, from time to time during the Employment Term, the
Executive may be elected or appointed. During the Employment Term, the
Executive shall devote his principal business time, efforts, energy and skill
to the business of the Employer in accordance with the reasonable directions
and orders of the Chief Executive Officer of the Employer and will use his best
efforts to promote the interests of Employer.
4. Salary Compensation. In consideration of the services to be rendered by
the Executive, including, without limitation, any services which may be
rendered by the Executive as an officer, director or member of any committee of
the Employer or any subsidiary or affiliate of the Employer, the Employer shall
pay or cause to be paid to the Executive during the Employment Term, and the
Executive shall accept, compensation at the rate of two million five hundred
thousand ($2,500,000.00) dollars per annum (the "Salary"). Such compensation
shall be increased by 10% on each anniversary of the Effective Date. The
Employer's obligation to pay the Salary shall be payable in equal installments
in accordance with the usual payroll practices of the Employer which are in
effect from time to time during the Employment Term, but in no event less
frequently than monthly. The Executive's Salary shall be subject to all
applicable withholding and other taxes.
5. Bonus Compensation.
(a) Solely with respect to the Employer's fiscal year ended June 30,
2000, Executive shall be entitled to receive the
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Performance Bonus for such fiscal year provided for in the terms of the
Original Agreement and Prior Agreement, as applicable.
(b) Except as specifically provided in subparagraph (a) above,
bonuses may be awarded solely at the discretion of the Board of Directors
of the Employer with the affirmative vote of at least one director who is
not actively involved in the management of the Employer.
6. Employment Benefits. During the Employment Term, the Executive shall be
entitled to the following employment benefits:
(a) Four weeks paid vacation for each year of the Employment Term and
sick leave in accordance with the Employer's policies from time to time in
effect for executive officers of the Employer;
(b) Participation, subject to qualification requirements, in medical,
life or other insurance or hospitalization plans and long-term disability
policies which are presently in effect or hereinafter instituted by the
Employer and applicable to its executive officers generally;
(c) Participation, subject to classification requirements and
continued maintenance thereof by Employer, in other employee benefit
plans, such as profit sharing plans, which are from time to time
applicable to the Employer's executive officers generally;
(d) In the event Executive is relocated at Employer's request,
reasonable temporary living expenses for a maximum of 120 days, reasonable
expenses incurred for the purpose of finding a permanent residence at the
new location, and reimbursement, upon presentation of appropriate
receipts, for all reasonable moving expenses, brokerage commissions and
closing expenses related to the sale of his current residence and the
purchase of his new residence;
(e) Reimbursement of reasonable disability insurance premiums to
provide an annual benefit equal to 50% of Executive's Salary to age 65,
and Executive's compensation shall be grossed-up annually to cover any
additional taxes resulting from the annual premium paid for such policy by
the Employer and treated as compensation to the Executive; and
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(f) A leased full-size automobile, including insurance and
maintenance therefor.
7. Expenses. During the Employment Term, the Employer will reimburse the
Executive, upon presentation of appropriate receipts, for all travel,
entertainment and other out-of-pocket expenses which are reasonably and
necessarily incurred by the Executive in the performance of his duties
hereunder.
8. Insurance. The Executive agrees to cooperate with the Employer in
obtaining any insurance on the life or on the disability of the Executive which
the Employer may desire to obtain for its own benefit or pursuant to Section
6(e) above, and shall undergo such physical and other examinations, and shall
execute any consents or applications, which the Employer may request in
connection with the issuance of one or more of such insurance policies.
9. Termination. (a) Executive's employment under this Agreement may be
terminated without further liability by Employer at any time for "extreme
cause." For purposes of this Agreement, "extreme cause" is defined as (i)
Executive's willful refusal, after 30 days' prior written notice by Employer
(such notice detailing with specificity the nature of such breach), to cure any
continuing material breach hereof or (ii) a final non-appealable adjudication
in a criminal or civil proceeding that Executive has committed a fraud or
felony relating to or adversely affecting his employment, or, (iii) subject to
giving the Executive full opportunity to make a presentation to the Board of
Directors, determination by the Board of Directors upon indictment of the
Executive charging him with a crime which is a felony that termination of the
Executive is in the interests of the Employer. The foregoing to the contrary
notwithstanding, if Executive's employment is terminated as a result of an
indictment, and such indictment is finally dismissed, the Executive shall be
entitled to receive an amount equal to the Severance Benefit referred to in the
following clause (b), computed as of the date of termination.
(b) Employer may terminate Executive's employment hereunder at any
time, upon 30 days' notice to Executive, in the event that Employer is in
default of its payment (interest or principal) obligations under any
agreement governing the debt of the Employer for a period of more than 30
days. In the event of such termination, Employer's sole obligation shall
be payment of a severance benefit (the "Severance Benefit") equal to
Executive's then current annual Salary and any bonus awarded pursuant to
Section 5 and not yet paid. The Severance Benefit shall be payable in 12
monthly installments.
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(c) In the event of Executive's death, the Employer will pay an
amount equal to the Severance Benefit to his designated beneficiary (or,
failing such designation, to his estate) payable in 12 monthly
installments.
(d) In the event of Executive's disability or incapacity which
renders him unable to perform his duties for a period in excess of 120
consecutive days or a total of more than 180 days in any 12-month period,
the Employer may terminate this Agreement without further compensation.
(e) If, at any time during the Employment Term, the Executive resigns
from the employ of the Employer for any reason other than Employer's
failure to meet its obligations hereunder, the Employer shall have no
further obligations hereunder after such resignation date other than the
payment of amounts accrued and unpaid under Sections 4, 5, 6 and 7 hereof
through such resignation date, and continuing obligations under Sections
10 and 11 hereof.
10. Restrictive Covenant. Without prior written consent of the Board of
Directors of Employer, Executive agrees that he will not for a period of one
year following the termination by Executive of his employment with Employer
whether before or after the expiration of the Employment Term (or to such
lesser extent and for such lesser period as may be deemed enforceable by a
court of competent jurisdiction, it being the intention of the parties that
this Section 10 shall be so enforced): (i) directly or indirectly engage, in
the United States, in any business in competition with the primary business
conducted by Employer, either as employee, independent contractor, owner,
partner, lender or stockholder, at the time of termination of the Executive
(provided that the foregoing shall not be construed to prohibit ownership of
less than 5% of the outstanding shares of any public corporation); (ii)
solicit, canvass, or accept any business for any other competing company, or
business similar to any business of Employer, from any past, present or future
("future," as used herein, shall mean at or prior to the time of termination of
employment) customer of Employer; (iii) directly or indirectly induce or
attempt to influence any employee of Employer to terminate his employment; or
(iv) directly or indirectly request any present or future (as defined above)
entities with whom Employer has significant business relationships to curtail
or cancel their business with Employer. In addition and without limiting the
foregoing, upon the termination of the Executive's employment by the Employer
for any reason, whether before or after the expiration of the Employment Term,
Executive shall not (x) at any time directly or indirectly disclose to any
person, firm or corporation any trade, technical or technological secrets, or
(y) for a period of one year following termination disclose any details of
organization or business affairs, or any names of past, present or future (as
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defined above) customers of Employer. For purposes of this Section 10, the term
"Employer" shall be deemed to include Employer and all of its subsidiary
corporations.
11. Inventions. All inventions, discoveries, improvements, processes,
formulae and data relating to Employer's business that Executive may make,
conceive or learn during the employment of the Executive with the Employer
(during the term of this Agreement, whether during working hours or otherwise)
and relating to the Employer's lines of business shall be the exclusive
property of Employer. Executive agrees to make prompt disclosure to Employer of
all such inventions, etc., and to do at Employer's expense all lawful things
necessary or useful to assist Employer in securing their full enjoyment and
protection. In the event of any breach or threatened breach of the provisions
of this Section 11 or the preceding Section 10, Employer may apply to any court
of competent jurisdiction to enjoin such breach. Any such remedy shall be in
addition to Employer's remedies at law under such circumstances.
12. Conflicting Agreements. Each of the parties hereby represents and
warrants to the other that (a) neither the execution of this Agreement by such
party nor the performance by such party of any of its obligations or duties
hereunder will conflict with or violate or constitute a breach of the terms of
any other agreement to which such party is a party or by which it is bound, and
(b) such party is not required to obtain the consent of any person, firm,
corporation or other entity in order to enter into this Agreement or to perform
any of his obligations or duties hereunder.
13. Notices. Any notice, request, information or other document to be
given under this Agreement to any party by any other party shall be in writing
and delivered personally, sent by registered or certified mail, postage
prepaid, delivered by a nationally recognized overnight courier service, or
transmitted by facsimile machine followed by delivery of original documents by
a nationally recognized overnight courier service addressed as follows:
If to Employer:
Tekni-Plex, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Dr. F. Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
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Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Executive:
Xxxxxxx X.X. Xxxxx
at his then current address
included in the employment records
of the Employer
or to such other address as a party hereto may hereafter designate in writing
to the other party, provided that any notice of a change of address shall
become effective only upon receipt thereof.
14. Assignment; Successors and Assigns. This Agreement may not be assigned
by either party. This Agreement shall be binding upon and shall inure to the
benefit of the Employer and the Executive and their respective heirs, legal
representatives, successors and assigns.
15. Entire Agreement. This Agreement contains the entire understanding
between the Employer and the Executive with respect to the employment of the
Executive and supersedes all prior negotiations and understandings (including
the Prior Agreement) between the Employer and the Executive with respect to the
employment of the Executive by the Employer. This Agreement may not be amended
or modified except by a written instrument signed by both the Employer and the
Executive.
16. Severability. In the event any one or more provisions of this
Agreement is held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect, unaffected by such invalidity or unenforceability.
17. Applicable Law; Submission to Jurisdiction; Litigation Expenses. This
Agreement and the rights, obligations and relations of the parties hereto shall
be governed by and construed and enforced in accordance with the laws of the
State of New York without giving effect to the principles of conflicts of law
thereof.
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The parties hereto (i) submit for themselves, and any legal action or
proceeding relating to this Agreement or for recognition and enforcement of any
judgment in respect hereof, to the exclusive jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any therefor, (ii) consent that
any action or proceeding shall be brought in such courts, and waive any
objection that each may now or hereafter have to the venue of any such action
or proceeding in any such court, (iii) agree that service of process of any
such action or proceeding may be effected by certified mail (or any
substantially similar form of mail), postage prepaid, to the appropriate party
at its address as set forth herein, and service made shall be deemed to be
completed upon the earlier of actual receipt or five (5) days after the same
shall have been posted as aforesaid, and (iv) agree that nothing herein shall
affect the right to effect service of process in any other manner permitted by
law.
18. Headings. The headings of sections and subsections of this Agreement
are for convenience of reference only and are not to be considered in
construing this Agreement.
19. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which, when taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
Tekni-Plex, Inc.
By: /s/ F. Xxxxxxx Xxxxx
--------------------------------
Name: F. Xxxxxxx Xxxxx
Title: Chief Executive Officer
Executive:
/s/ Xxxxxxx X.X. Xxxxx
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Xxxxxxx X.X. Xxxxx
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