EXHIBIT 10.13
EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT dated as of September 5, 2003
(this "Agreement"), by and among Xxx Xxxxxxxx Corporation, a Delaware
corporation ("Company") and Xxxx X. XxXxxx ("Executive").
NOW, THEREFORE, in consideration of the mutual undertakings
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms shall
have the following meanings.
"BOARD" means the Board of Directors of a member of the
Company Group.
"CAUSE" means (i) the conviction of Executive by a court of
competent jurisdiction of, or entry of a plea of NOLO CONTENDERE with respect
to, a felony or any other crime which involves fraud, dishonesty or moral
turpitude; (ii) fraud or embezzlement on the part of Executive; (iii)
Executive's chronic abuse of or dependency on alcohol or drugs (illicit or
otherwise) which interferes with the performance of Executive's duties,
responsibilities or obligations under this Agreement; (iv) the material breach
by Executive of Section 2.5, 2.6 or 2.7 hereof; or (v) any act of moral
turpitude or willful misconduct by Executive which (A) is intended to result in
substantial personal enrichment of Executive at the expense of the Company Group
or (B) may have a material adverse impact on the business or reputation of the
Company Group.
"COMPANY GROUP" means, collectively, Holdings, the Company and
their respective Subsidiaries, successors or assigns.
"EFFECTIVE DATE" shall mean the Closing Date (as defined in
the Stock Purchase Agreement by and between the Company, The Lehigh Press, Inc.
and the selling stockholders named therein (the "Stock Purchase Agreement")).
"EMPLOYMENT PERIOD" has the meaning set forth in Section 2.1.
"GAAP" means U.S. generally accepted accounting principles
applied in accordance with Holdings' accounting methodologies and procedures.
"HOLDINGS" means Xxx Xxxxxxxx Holdings, Inc.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or combination thereof, or (ii) if a partnership, association or
other business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
ARTICLE II
EMPLOYMENT
2.1 EMPLOYMENT. The Company agrees to employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the
Effective Date and ending as provided in Section 2.4 (the "Employment
Period"). Notwithstanding the execution date of this Agreement, this
Agreement shall become effective on the Effective Date.
2.2 POSITION AND DUTIES.
(a) Commencing on the Effective Date and continuing during the
Employment Period, Executive shall serve as Senior Vice President - Education
Sales & President, Lehigh Lithographers Division. Executive will be responsible
for all sales activity for the Company with respect to the Company's major
education customer base and will continue to maintain such current
responsibilities with respect to the Lehigh Lithographers division as Executive
maintained immediately prior to the Effective Date. Executive will report to the
President and Chief Executive Officer of the Company and shall perform such
other duties as may be requested from time to time by the Chief Executive
Officer.
(b) Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company Group. The Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner. In the performance of his duties hereunder,
Executive shall at all times report and be subject to the lawful direction of
the Chief Executive Officer of the Company and any Board of Directors of any
Person within the Company Group and perform his duties hereunder subject to and
in accordance with the directions of the Chief Executive Officer of the Company
and the resolutions or any other determinations of any Board of Directors of any
Person within the Company Group and the By-laws of any Person within the Company
Group, as
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from time to time in effect. During the Employment Period, Executive
shall not become an employee of any Person other than a member of the
Company Group. Executive shall be permitted to make, monitor and pursue
private passive investments that do not interfere with the performance
of his duties hereunder. Executive shall make application for, and
submit to any examination as may be reasonably requested by, the Chief
Executive Officer of the Company or the Board of Directors of Holdings
in order to obtain key-man or other insurance on the life of Executive
for the benefit of the Company Group as the Chief Executive Officer of
the Company or the Board of Directors of Holdings shall direct.
(c) During the period from the Effective Date and until
December 31, 2005, (i) Executive's primary duties shall be performed in
Pennsauken, N.J., and (ii) Executive shall not be required to relocate
to any other Company Group facility or location.
2.3 BASE SALARY AND BENEFITS.
(a) During the Employment Period, Executive's base salary
shall be $250,000 (subject to increase, if any, provided under Section
2.3(d)) per annum (the "Base Salary"), which salary shall be payable in
regular installments in accordance with the Company's general payroll
practices and shall be subject to deductions for customary
withholdings, including, without limitation, federal and state
withholding taxes, social security taxes and state disability
insurance.
(b) During the Employment Period, Executive shall be entitled
to receive an annual bonus of $50,000 (the "Bonus") payable quarterly
in installments of $12,500 each, each of which shall be subject to
deductions for customary withholdings, including, without limitation,
federal and state withholding taxes, social security taxes and state
disability insurance. Each quarterly installment of the Bonus shall be
payable on or before the 30th day following the end of each of the
Company's fiscal quarters; provided, however, that the first quarterly
installment of the Bonus payable to Executive shall be prorated to
reflect the number of days, beginning on the Effective Date, during
such fiscal quarter which the Executive was employed by the Company
pursuant hereto.
(c) During the Employment Period, Executive shall be eligible
to receive an annual bonus in an amount that can equal up to 35% of the
Base Salary (the "Performance Bonus"). The Performance Bonus shall be
paid only if certain performance and financial targets, to be
established by the Company's President and Chief Executive Officer from
time to time, are met. The Performance Bonus shall be payable on the
last business day in each February, during the Employment Period for
the previous calendar year; PROVIDED, HOWEVER, that no Performance
Bonus shall be paid in respect of calendar year 2003. The Performance
Bonus shall be payable only to the extent that the Executive is an
employee in good standing as of December 31 of the applicable year. An
adjustment for any underpayment or overpayment shall be made in the
next calendar year by the Company or Executive, as the case may be,
within 30 days of receipt of certified financial statements for the
Company Group. At
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the option of the Company, the Performance Bonus may be paid in its
entirety within 30 days after receipt of certified financial statements
for the Company Group for the year to which such Performance Bonus
relates. The Performance Bonus shall be subject to deduction for
customary withholdings, including, without limitation, federal and
state withholding taxes, social security taxes and state disability
insurance.
(d) In addition to the Base Salary, the Bonus payable to
Executive pursuant to Section 2.3(b) and the Performance Bonus payable
to Executive pursuant to Section 2.3(c), Executive shall be entitled,
during the Employment Period, to (i) participate in all retirement,
disability, pension, health, medical, insurance and other fringe
benefits or plans of the Company generally available to employees, and
(ii) the following benefits (collectively, "Benefits") at the Company's
expense:
(A) Four (4) weeks of vacation;
(B) As soon as reasonably practicable following the
Effective Date, the Executive shall be granted options to purchase up
to 150,000 shares of the Common Stock of Holdings. The options shall
have an exercise price of $1.00 per share and shall vest over a four
(4) year period based upon the satisfaction of performance criteria
determined by Holdings Board in accordance with Holdings' Stock Option
Plan. Additionally, Executive shall have the right to purchase, within
thirty (30) days after the Effective Date, 1,000,000 shares of the
Common Stock of Holdings at a price of $1.00 per share; and
(C) Executive's base salary described in Section
2.3(a) may be increased during the Employment Period at the sole
discretion of the Board of Holdings.
2.4 TERM.
(a) The Employment Period shall end at 11:59 p.m. on December
31, 2005, subject to earlier termination (i) by reason of Executive's
death, (ii) by action of the Company or Holdings, with or without Cause
or (iii) upon Executive's voluntary resignation or for any other reason
not set forth above.
(b) RESIGNATION OR TERMINATION FOR CAUSE. If the Employment
Period is terminated as a result of Executive's voluntary resignation,
or by the Company or Holdings for Cause, or for any other reason not
set forth in Sections 2.4(c) or 2.4(d) hereof, the Executive shall be
entitled to his Base Salary through the date of termination, but shall
not be entitled to any further Base Salary, Bonus, Performance Bonus or
Benefits for that year or any future year, or to any severance
compensation of any kind, nature or amount. Executive agrees that he
shall provide at least 90 days' written notice prior to any voluntary
resignation.
(c) DEATH. If Executive's employment is terminated as a result
of his death, the Company shall pay to his estate all previously earned
and accrued but unpaid Base Salary up to the date of such termination,
but neither Executive nor his estate shall be entitled to any further
Base Salary, Bonus, Performance Bonus or
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Benefits for that year or any future year or to any severance
compensation of any kind, nature or amount.
(d) TERMINATION WITHOUT CAUSE. Subject to Section 2.4(e)
hereof, if the Executive's employment is involuntarily terminated by
the Company or Holdings without Cause, Executive shall be entitled to
all previously earned and accrued but unpaid Base Salary up to the date
of such termination, but shall not be entitled to any further Base
Salary, Bonus, Performance Bonus or Benefits for that year or any
future year, and Executive agrees that no severance compensation of any
kind, nature or amount shall be payable, except that Executive shall be
entitled to an amount in cash equal to the greater of (i) $250,000,
which shall be payable in twelve (12) equal monthly payments of
$20,833.33 each or (ii) the Base Salary that would otherwise be payable
to Executive if the Executive's employment had not been terminated and
Executive had remained employed by the Company through and until
December 31, 2005. Any payments to be made pursuant to clause (ii) of
the immediately preceding sentence shall be made on the payment dates
on which Executive's Base Salary would have otherwise been paid if the
Employment Period had continued. As of the date of the final payment to
be paid pursuant to this Section 2.4(d), none of the Company, Holdings,
or any other member of the Company Group shall have any further
obligation to Executive pursuant to this Section 2.4.
(e) Executive agrees that Executive shall be entitled to the
payments provided for in Sections 2.4(d) if and only if Executive has
not breached as of the date of termination of the Employment Period the
provisions of Sections 2.5, 2.6 and 2.7 hereof and does not breach such
sections at any time during the period for which such payments are to
be made; PROVIDED, that the Company's obligation to make such payments
will terminate upon the occurrence of any such breach during such
severance period.
(f) Executive hereby agrees that no severance compensation of
any kind, nature or amount shall be payable to Executive, except as
expressly set forth in this Section 2.4, and Executive hereby
irrevocably waives any claim for any other severance compensation.
(g) All of Executive's rights to Benefits, the Bonus and the
Performance Bonus hereunder (if any) accruing after the termination of
the Employment Period shall cease upon such termination.
2.5 CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by him while employed by
Holdings, the Company or any other member of the Company Group (whether prior
to or during the Employment Period) concerning the business or affairs of any
member of the Company Group ("Confidential Information") are the property of
Holdings, the Company or such other member of the Company Group. Therefore,
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 Board of Holdings, unless and to the extent that the
aforementioned matters become generally known to and available for use
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by the public other than as a result of Executive's acts or omissions to act.
Executive shall deliver to Holdings at the termination of Executive's
employment, or at any other time Holdings 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, Work
Product (as defined below) and the business of the Company Group which he may
then possess or have under his control. Executive acknowledges that (a) the
Confidential Information is commercially and competitively valuable to the
Company Group; (b) the unauthorized use or disclosure of the Confidential
Information would cause irreparable harm to the Company Group; (c) Holdings
and the Company have taken and are taking all reasonable measures to protect
their legitimate interest in the Confidential Information, including, without
limitation, affirmative action to safeguard the confidentiality of such
Confidential Information; (d) the restrictions on the activities in which
Executive may engage set forth in this Agreement, and the periods of time for
which such restrictions apply, are reasonably necessary in order to protect
the Company Group's legitimate interests in its Confidential Information; and
(e) nothing herein shall prohibit Holdings or the Company from pursuing any
remedies, whether in law or equity, available to Holdings or the Company for
breach or threatened breach of this Agreement, including the recovery of
damages from Executive.
2.6 INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company
Group's actual or anticipated business, research and development or existing or
future products or services and which are conceived, developed or made by
Executive while employed by Holdings, the Company or any other member of the
Company Group (whether prior to or during the Employment Period) ("Work
Product") belong to Holdings, the Company or such other member of the Company
Group, and Executive hereby assigns to Holdings and the Company his entire
right, title and interest in any such Work Product. Executive will promptly
disclose such Work Product to the Board of Holdings and perform all actions
reasonably requested by the Board of Holdings (whether during or after
Executive's employment period) to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
2.7 NONCOMPETE, NONSOLICITATION.
(a) Executive acknowledges that in the course of his
employment with Holdings, the Company or any other member of the
Company Group he has become familiar, and he will become familiar, with
the Company Group's trade secrets and with other Confidential
Information and that his services have been and will be of special,
unique and extraordinary value to the Company Group. Therefore,
Executive agrees that, during the time he is employed by the Company or
any other member of the Company Group and thereafter for a period of
twelve (12) months (the "Noncompete Period"), Executive shall not
directly or indirectly own, manage, control, participate in, consult
with, render services for, or in any manner engage in any business with
any person (including by himself or in association with any person,
firm, corporate or other business organization or through any other
entity) in
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competition with the businesses of the Company Group as such
businesses exist or are in process on the date of the termination of
Executive's employment, within any geographical area in which the
Company Group engages or plans on the date of the termination of
Executive's employment to engage in such businesses. Nothing herein
shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding stock of a corporation which is publicly traded, so
long as Executive has no active participation in the business of such
corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another entity (i) induce or attempt to induce
any employee of the Company or any other member of the Company Group to
leave the employ of the Company or such other member of the Company
Group, or in any way interfere with the relationship between any member
of the Company Group and any employee thereof, (ii) hire any person who
was an employee of the Company Group at any time within the six-month
period prior to the date of termination of Executive's employment with
the Company or any other member of the Company Group, or (iii) induce
or attempt to induce any customer, supplier, licensee, licensor,
franchisee, franchisor or other business relation of the Company or any
other member of the Company Group to cease doing business with the
Company or such other member of the Company Group, or in any way
interfere with the relationship between any such customer, supplier,
licensee, licensor, franchisee, franchisor or business relation and the
Company or any other member of the Company Group.
(c) Executive agrees that: (i) the covenants set forth in this
Section 2.7 are reasonable in geographical and temporal scope and in
all other respects, (ii) Holdings and the Company would not have
entered into this Agreement but for the covenants of Executive
contained herein, and (iii) the covenants contained herein have been
made in order to induce Holdings and the Company to enter into this
Agreement.
(d) If, at the time of enforcement of this Section 2.7, a
court or arbiter shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area
reasonable under such circumstances shall be substituted for the stated
duration, 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.
ARTICLE III
MISCELLANEOUS
3.1 EXECUTIVE'S REPRESENTATIONS. Executive hereby represents and
warrants to Holdings and the Company that (i) the execution, delivery and
performance of this Agreement by Executive do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound,
(ii) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or
entity and (iii) upon the execution and delivery of
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this Agreement by Holdings and the Company, this Agreement shall be the valid
and binding obligation of Executive, enforceable in accordance with its terms.
Executive hereby acknowledges and represents that he has consulted with
independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
3.2 SURVIVAL. Sections 2.5, 2.6, 2.7 and 3.3 through 3.13 shall survive
and continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.
3.3 NOTICES. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally, mailed
by certified or registered mail, return receipt requested and postage prepaid,
or sent via a nationally recognized overnight courier, or sent via facsimile to
the recipient. Such notices, demands and other communications will be sent to
the address indicated below:
To the Company or Holdings:
Xxx Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
To Executive:
Xxxx X. XxXxxx
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
3.4 SEVERABILITY. Whenever possible, each provision of this Agreement
will 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 any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
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3.5 COMPLETE AGREEMENT. This Agreement and the other documents which
have been executed by Holdings, the Company, and Executive (I.E., Stock Purchase
Agreement) embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, written or oral.
3.6 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
3.7 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, all
covenants and agreements contained in this Agreement shall bind and inure to the
benefit of and be enforceable by Holdings, the Company, and their respective
successors and assigns. Except as otherwise specifically provided herein, this
Agreement, including the obligations and benefits hereunder, may not be assigned
to any party by Executive.
3.8 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen hereto by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied to this
Agreement.
3.9 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
3.10 GOVERNING LAW. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by and construed in
accordance with the domestic law of the State of Missouri, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Missouri or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Missouri.
3.11 REMEDIES. Each of the parties to this Agreement will be entitled
to enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement, including,
without limitation, Sections 2.5, 2.6 and 2.7 hereof, and that any party may in
its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
and/or other injunctive relief in order to enforce or prevent any violations of
the provisions of this Agreement.
3.12 DISPUTE RESOLUTION.
(a) ARBITRATION. In the event of disputes between the parties
with respect to the terms and conditions of this Agreement, such
disputes shall be resolved by and through an arbitration proceeding to
be conducted under the auspices of the American Arbitration Association
(or any like organization successor thereto) in St. Louis, Missouri.
Such arbitration proceeding shall be conducted pursuant to the
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commercial arbitration rules (formal or informal) of the American
Arbitration Association in as expedited a manner as is then permitted
by such rules (the "Arbitration"). Both the foregoing agreement of the
parties to arbitrate any and all such claims, and the results,
determination, finding, judgment and/or award rendered through such
Arbitration, shall be final and binding on the parties hereto and may
be specifically enforced by legal proceedings.
(b) PROCEDURE. Such Arbitration may be initiated by written
notice from either party to the other which shall be a compulsory and
binding proceeding on each party. The Arbitration shall be conducted by
an arbitrator selected in accordance with the procedures of the
American Arbitration Association. Time is of the essence of this
arbitration procedure, and the arbitrator shall be instructed and
required to render his or her decision within thirty (30) days
following completion of the Arbitration.
(c) VENUE AND JURISDICTION. Any action to compel arbitration
hereunder shall be brought in the Circuit Court of St. Louis County,
State of Missouri.
3.13 AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended and waived only with the prior written consent of Holdings, Company,
and Executive.
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Executive Employment Agreement as of the date first written above.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.
XXX XXXXXXXX CORPORATION
By: /s/ XXXXX X. XXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Human Resources
Officer
/s/ XXXX X. XXXXXX
-----------------------------------------
XXXX X. XXXXXX
Acknowledged:
XXX XXXXXXXX HOLDINGS INC.
By: /s/ XXXX XXXXXX
--------------------------------------
Title: Senior Vice President and
Chief Financial Officer
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