EXHIBIT 10.4
FORM OF
RETENTION INCENTIVE AGREEMENT
This Retention Incentive Agreement ("Agreement") is dated
_____________ __, 199_, and is between ________________ ("Employee") and Xxxxxx
Packaging Company, a Pennsylvania limited partnership ("Xxxxxx").
Employee and Xxxxxx, intending to be legally bound hereby and
in consideration of the provisions contained herein, agree that upon a Change in
Control (as defined below) Xxxxxx shall make a Change in Control payment (as
described below) to the Employee. The Change in Control payment will continue
after a Qualifying Termination Event (as defined below); provided, that Employee
signs a Release (as described below) upon such Qualifying Termination Event, as
follows:
1. Change in Control. A Change in Control shall be deemed to
have occurred when the beneficial ownership of 50 percent or more of the GP(LP)
Group, or when 50 percent or more of the GP(LP) Group's business and assets, is
sold or otherwise transferred to any person(s) other than (i) Xxxxxx X. Xxxxxx
or his descendants (natural and adopted) or their spouses or (ii) a business
entity controlled by Xxxxxx X. Xxxxxx.
For purposes of this Agreement, the term "GP(LP)
Group" shall mean, in the aggregate, Xxxxxx and any of its subsidiaries,
including those whose principal offices are located in North, Central, and South
America, Europe, and Asia. The term "GP(LP) Group," as of the date of this
Agreement, consists of Xxxxxx, Xxxxxx Packaging Canada Limited, Xxxxxx Packaging
Poland, L.P., Xxxxx Xxxxxx Spolka, z.o.o., Xxxxxx Packaging Holdings I, Xxxxxx
Recycling Company, Xxxxxx Packaging France Partners, Xxxxxx Packaging France
Holding, S.A., Xxxxxx Packaging France, S.A., Xxxxxx Packaging Italy, Srl, SIP,
Srl, Lido Plast- Xxxxxx, Xxxxxx Packaging Latin America, LLC, Xxxxxx Brasil
Paricipacoes Ltda., and Xxxxxx Packaging do Brasil, S.A.
2. Qualifying Termination Event
(a) A Qualifying Termination Event shall be
deemed to have occurred if, during the period after the date of a Change in
Control and before the date the payment described in Paragraph 3 is made,
Employee ceases to be employed by Xxxxxx or its successor (referred to jointly
as "Xxxxxx") for any of the following reasons:
(1) Employee's death, retirement at or after age
65, or total disability (entitling him to
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benefits under Xxxxxx'x long-term disability
plan);
(2) Except as provided in (b) below, Xxxxxx
terminates Employee's employment; or
(3) After Employee gives Xxxxxx written notice
of one or more of the following events and
Xxxxxx fails to cure the event(s) during the
30-day period following Xxxxxx'x receipt of
such notice, Employee terminates his
employment with Xxxxxx as a result of any of
the following events:
(i) Employee's position is materially and
adversely changed (without his consent)
from his position as of the Change in
Control;
(ii) Employee is assigned duties
and responsibilities
(without his consent) that
are inconsistent in a
material respect with the
scope of duties and
responsibilities associated
with his position as of the
Change in Control;
(iii) Employee is directly requested by the
person to whom the Employee directly
reports to commit an unethical,
dishonest, or illegal act of a material
nature, knowing that such act is
unethical, dishonest, or illegal
(provided that whether the act cited by
Employee is in fact unethical or
dishonest shall be determined by the
Chief Executive Officer of Xxxxxx in his
sole discretion);
(iv) Employee's annual salary
rate as in effect on the
day before the Change in
Control is reduced; or
(v) Xxxxxx requires Employee to be based at
an office which is more than 50 miles
further from Employee's residence than
Employee's office on the day before the
Change in Control (other than travel
reasonably required in the performance
of Employee's responsibilities).
(b) Notwithstanding (a) above, Employee's termination of
employment will not be considered a Qualifying Termination Event for purposes
of this Agreement if one of the following applies:
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(1) Employee's employment with Xxxxxx is
involuntarily terminated due to Employee's
continuing refusal to perform his duties or
to follow any lawful direction of Xxxxxx,
provided the performance of such duties or
the following of such lawful direction would
not result in an event described in
(a)(3)(i) or (ii) above;
(2) Employee's employment with Xxxxxx is
involuntarily terminated due to Employee's
intentional act or acts of dishonesty which
Employee intended to result in his personal,
more-than-immaterial enrichment;
(3) prior to the occurrence of an event
described in (a)(3)(i) through (v) above,
Employee's employment with Xxxxxx is
involuntarily terminated due to Employee's
documented willful malfeasance or willful
misconduct in connection with his employment
or Employee's documented willful and
deliberate insubordination;
(4) Employee's employment with Xxxxxx is
involuntarily terminated because Employee is
convicted of a felony;
(5) Employee's employment with Xxxxxx is
terminated, but during the seven calendar
days after such termination, Employee is
offered (and declines) employment by the
buyer of the entire business (or
substantially all of the business) of
Xxxxxx, on substantially the same terms
(including this Agreement) as Employee's
employment on the day before such
termination; or
(6) any other voluntary termination not
described in (a) above.
3. Change in Control Payment. On the first anniversary of a
Change in Control, Xxxxxx or its successor shall make one payment to Employee of
$47,000 (less applicable withholding). The payment shall be made as soon as
practicable after the first anniversary of the Change in Control.
If the Employee experiences a Qualifying Termination Event
after the Change in Control, Xxxxxx or its successor shall make the Change in
Control payment at the time described above; provided, that Employee signs a
Release (as provided in Paragraph 5) upon such Qualifying Termination Event.
If the Employee's termination of employment is not considered a Qualifying
Termination Event and a Change in Control has
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occurred, the obligation of Xxxxxx or its successors to make the payment
shall cease as of the date of the Employee's termination of employment.
4. Beneficiary. If Employee dies before the amount due under
the provisions of Paragraph 3 of this Agreement has been paid, any such unpaid
amount will be paid in a single sum within 90 days of his death to his surviving
spouse or, if she does not survive him, to his estate.
5. Release. Upon a Qualifying Termination Event and prior to
the Change in Control payment, Employee, for himself, his executors,
administrators, heirs, and assigns, shall sign a separate release (the
"Release") in which Employee shall:
(a) agree that no charge, complaint, claim, or
lawsuit of any kind will be filed in
connection with any claim released by this
Agreement or the Release against Xxxxxx, its
successors, parents, subsidiaries, and
affiliates, incorporated and unincorporated,
past and present, and each of them, as well
as its and their directors, officers, agents
, servants, and employees, past and present,
and each of them (all collectively referred
to as "Releasees"); and
(b) acknowledge full and complete satisfaction
of, and release and discharge Releasees from
, any and all claims, demands, and causes of
action of whatever kind or nature, whether
known or unknown to, or suspected or
unsuspected by, Employee, which Employee at
the time of the Release owns or holds or has
at any time owned or held against any
Releasee(s) arising out of or by reason of
Employee's employment or termination of
employment due to a Change in Control.
The Release shall include, but shall not be limited to, claims under the Age
Discrimination in Employment Act of 1967, as amended ("ADEA"). The Release shall
not, however, preclude Employee's right to pursue any claims arising (i) under
this Agreement or (ii) under any benefit programs in which Employee has accrued
any rights which arise on, or after, the Qualifying Termination Event.
6. Noncompetition and Nondisclosure Requirements
(a) Noncompetition. Employee covenants that he
will not (i) directly or indirectly own, manage, operate, control, advise,
participate in, become a proprietor, partner, director, officer, or employee of,
provide services to, or become
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financially interested in, any business (other than solely by virtue of the
ownership of less than five percent of any class of publicly traded securities)
competitive with the business of Xxxxxx or any of its affiliates (the
"Companies") as of the date this Agreement is executed, or (ii) engage or
participate in any effort or act to induce any of the customers or employees of
Xxxxxx to take any action which might be disadvantageous to the Companies.
(b) Nondisclosure. Employee covenants that he
will not (other than in the good faith performance of his services to Xxxxxx
before Employee's termination of employment) disclose or make known to anyone
other than employees of the Companies, or use for the benefit of himself or any
other person, firm, operation, or entity unrelated to the Companies, any
knowledge, information, or materials, whether tangible or intangible, belonging
to the Companies, about their products, services, know-how, customers, business
plans, or financial, marketing, pricing, compensation, and other proprietary
matters relating to the Companies. On or before Employee's termination of
employment with Xxxxxx, Employee shall promptly deliver to Xxxxxx or to any
affiliate designated by Xxxxxx any and all tangible, confidential information in
his possession.
(c) Remedies for Breach. If Employee breaches
the covenant set forth in (a) above and/or the covenant set forth in (b) above,
Employee's employment with Xxxxxx and/or Xxxxxx'x obligation to make the payment
described herein shall terminate at Xxxxxx'x option. In addition, Employee
expressly acknowledges that damages alone will be an inadequate remedy for any
breach or violation of (a) and/or (b) above and that Xxxxxx, in addition to all
other remedies, shall be entitled as a matter of right to equitable relief,
including injunctions and specific performance, in any court of competent
jurisdiction. If any of the provisions of (a) or (b) above are held to be in any
respect unenforceable, then they shall be deemed to extend only over the maximum
period of time, geographic area, or range of activities as to which they may be
enforceable against Employee.
7. Confidentiality. The terms of this Agreement are
confidential. Employee shall not disclose in any way this Agreement or any of
its terms to any person other than his spouse; his legal counsel, accountant,
financial adviser, or superior to whom he directly reports; Xxxxxxx X. Xxxxxx,
Xx.; or Xxxxxx X. Xxxxxx or a member of Xxxxxx X. Xxxxxx'x family.
8. Governing Law. This Agreement is made and entered into in
the Commonwealth of Pennsylvania, and except as provided in Paragraph 5, at all
times and for all purposes shall be interpreted, enforced, and governed under
its laws.
9. Arbitration. Without in any way affecting the terms of
Paragraph 5, any controversy or claim arising out of or relating to this
Agreement shall be settled exclusively by
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arbitration in Philadelphia, Pennsylvania, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment upon the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof. To the fullest extent permitted by applicable law and by
the Commercial Arbitration Rules, the arbitration proceedings and award shall be
kept confidential.
10. Entire Agreement; Amendment. This Agreement contains the
entire agreement between Employee and Xxxxxx as to the payment described herein.
Any amendment to this Agreement must be in writing, must be signed by both
Xxxxxx and Employee, and must be consented to in writing by the "Xxxxxx
Partners," as such term is defined in the Agreement and Plan of
Recapitalization, Redemption and Purchase entered into by and among Xxxxxx et
al. as of December 18, 1997.
11. Successor Employer. In the event of the dissolution,
merger, consolidation, or reorganization of Xxxxxx, or the sale of the entire
(or substantially all of the) business of Xxxxxx, this Agreement shall be
continued by Xxxxxx'x successor. The successor shall assume all liabilities
under this Agreement and shall have the powers, duties, and responsibilities of
Xxxxxx under this Agreement.
12. Termination of Agreement. This Agreement shall terminate
at 12:00 midnight on December 31, 1998, unless a Change in Control occurs prior
to such time. However, if Xxxxxx has entered into a binding agreement on or
before
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December 31, 1998 pursuant to which Xxxxxx will or could experience a Change in
Control after December 31, 1998, this Agreement shall not terminate until after
such binding agreement is either consummated or terminated.
IN WITNESS WHEREOF, the persons named below have signed this
Retention Incentive Agreement as of the date first set forth above.
ATTEST: XXXXXX PACKAGING COMPANY
By: Xxxxxx Packaging Corporation,
Its General Partner
By:
------------------------
----------------
Title:----------
WITNESS: EMPLOYEE
----------------
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RETENTION INCENTIVE AGREEMENT PARTIES
Andris, Xxxx Xxxxxxxx, Xxxxxxx
Xxxxxx, Xxx Xxxxxx, Xxxx
Xxxxxxxx, Xxxxxx Xxxxxxx, Xxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxx
Xxxxx, Xxxxxxxx Xxxxxx, Xxxx
Xxxxxxx, Xxxx XxXxxxxxx, Xxxx
Xxxxxxxx, Xxxx XxXxxxxx, Xxxxx
Xxxxx, Xxxxx Xxxxxx, Xxxx
Xxxxx, Xxxxx Xxxxxxxxx, Xxxxx
Xxxx, Xxxxxx Xxxxxxxxxx, Xxxx
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxx
Xxxxx, Xxxxx Nico, Xxxxx
Xxxxxx, Xxxx Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxxx X'Xxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxx Xxx, Xxxxxxx
Xxxxx, Xxxx Xxxxx, Xxxx
Xxxxxx, Xxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxx
Xxxx, Xxx Xxxxxxxx, Xxxxx
Xxxxx, Xxxxx Xxxxxxxx, Xxxx
Xxxxx, Xxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx, Xxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxx Xxxxxx, Xxx
Xxxxxxxx, Xxxx Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxxx
Xxxxxxx, Xxx Xxxxxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx
Xxxx, Xxxx Xxxxxxx, Xxxxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxx Xxxxx, Xxxxx
Xxxxxx, Xxx Xxxxxx, Xxxx
Xxxx, Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxxx, Xxxx Xxxxxx, Xxxxx
Xxxxxxxx, Xxxxxx Xxxxxxxx, Xx
Xxxxx, Xxxxxxx Xxxxxx, Xxxx
Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx
Xxxxxxxxxxxx, Xxxxx Xxxx, Xxxx
Xxxxx, Xxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxx
Xxxxx, Xxxxx
Xxxxxxxx, Xxxxxxx
Xxxxx, Xxxxxxx
Xxxxxxx, Xxxxxxx
