PAGE
Exhibit 10(A)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 25th day of August, 1996,
by and between XXXXXX GREETINGS, INC., a Delaware corporation
(the "Corporation"), and XXXXX X. X'XXXXXXX, residing in
Woodstock, Vermont ("Executive").
W I T N E S S E T H:
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WHEREAS, the Corporation desires to assure itself of
the services of Executive and Executive is willing to make his
services available to the Corporation on the terms and conditions
set forth below:
NOW, THEREFORE, in consideration of the premises and
mutual promises contained in this Agreement, IT IS AGREED:
1. Employment. The Corporation hereby employs
Executive and Executive hereby accepts employment with the
Corporation on the terms and conditions set forth in this
Agreement.
2. Term. The Term of Executive's employment
hereunder shall commence as of the date hereof. Unless sooner
terminated pursuant to Paragraph 6 hereof, Executive's employment
hereunder shall continue until December 31, 1999 (the "Term"),
which Term shall renew automatically from year to year thereafter
unless notice of an intention not to renew is given by either
party to the other at least six (6) months before the end of the
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Term or any renewal term, in which event Executive's employment
shall cease as of the end of such Term or renewal term, as
applicable.
3. Duties. Executive shall serve as, and have the
duties and responsibilities of, the President and Chief Executive
Officer of the Corporation and will, under the direction of the
Board of Directors of the Corporation (the "Board"), devote
substantially all of his working time and effort to the
performance of the duties of such offices provided, however, that
nothing herein shall prohibit Executive from participating in
charitable and other activities described in a letter to the
Corporation delivered contemporaneously herewith. The
Corporation shall take such actions as necessary to (i) elect
Executive as a Director promptly after the execution of this
Agreement and (ii) elect Executive as Chairman of the Board of
Directors not later than the time of the Corporation's next
annual meeting.
4. Compensation. Executive's compensation for the
services performed under this Agreement shall be as follows:
(a) Base Salary. Executive shall receive a base
salary of Three Hundred Fifty Thousand ($350,000) Dollars per
year (the "Base Salary"), payable in regular semimonthly
installments, which Base Salary shall be reviewed by the Board in
August of each year beginning with 1997 for possible increases.
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(b) Incentive Compensation. In addition to Base
Salary, Executive shall earn incentive compensation ("Incentive
Compensation") as follows:
(i) in respect of fiscal year 1996, a signing
bonus of Two Hundred Thousand ($200,000) Dollars payable on
the commencement of Executive's employment hereunder;
(ii) in respect of fiscal year 1997 and each
fiscal year thereafter during the Term or any renewal term
of this Agreement (provided Executive has served as
President and Chief Executive Officer for part or all of
such fiscal year), a payment, to be made on or before each
April 1 of the succeeding year, based upon the percentage
increase in the Corporation's operating income for such
fiscal year (on a consolidated basis using generally
accepted accounting principles consistently applied) over
the operating income of the previous fiscal year (but
disregarding, in each case, extraordinary revenues or
extraordinary costs and expenses), with no payment if the
growth rate is less than five (5%) percent and with a
payment equal to thirty-six (36%) percent of base salary for
operating income growth of five (5%) percent, increasing
proportionately thereafter to a payment equal to one hundred
forty-three (143%) percent of base salary for operating
income growth of fifteen percent (15%) or more. Nothing
herein shall prohibit the Board from granting in its
discretion additional incentive compensation to Executive if
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a percentage increase exceeds 15% or otherwise. If the
operating income as computed above for any previous base
measuring year is less than the operating income for the
fiscal year ended December 31, 1996 in the Corporation's
audited financial statements (the "Base Operating Income"),
then the operating income for such previous year shall be
deemed to be the Base Operating Income for purposes of the
calculation hereunder.
(c) Stock Options. Effective on the date of the
commencement of Executive's employment hereunder, Executive shall
be granted one or more non-qualified stock options (each a "Stock
Option") to purchase an aggregate of 1,000,000 shares of common
stock of the Corporation, par value $.01 per share (the "Common
Stock"), to be issued under, and pursuant to the terms of, the
Corporation's 1989 and 1991 Stock Incentive Plans (each a "Stock
Plan") (but in no event will any portion of a Stock Option be
exercisable if such exercise would result in an issuance of
shares in excess of the maximum number of shares available under
such Stock Plans). The Stock Options granted hereby will have
the following exercise schedule and exercise prices, and each
such Stock Option will become exercisable, except as otherwise
provided therein, only if Executive is a full time employee of
the Corporation on the dates set forth below with respect to such
Stock Option:
(i) 400,000 shares of Common Stock,
exercisable on and after the date of the commencement of
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Executive's employment hereunder, with an exercise price per
share equal to the fair market value of the Common Stock on
such date (the "Grant Date FMV").
(ii) 300,000 shares of Common Stock,
exercisable on and after the date that is one (1) year from
the date of the commencement of Executive's employment
hereunder, with an exercise price per share equal to the
Grant Date FMV plus $2.
(iii) 300,000 shares of Common Stock,
exercisable on and after the date that is two (2) years from
the date of the commencement of Executive's employment
hereunder, with an exercise price per share equal to (x) the
Grant Date FMV plus $3 with respect to the first 200,000 of
such shares of Common Stock and (y) the Grant Date FMV plus
$4 with respect to the remaining 100,000 shares of Common
Stock.
All such Stock Options shall expire ten (10)
years from the date of the grant of the Stock Options, subject to
the other terms and conditions of the applicable Stock Option
Agreements and Stock Plans.
The Corporation also has advised Executive
that as of the date of this Agreement, the Corporation's 1989 and
1991 Stock Incentive Plans have insufficient shares available for
issuance to satisfy the full 1,000,000 share Stock Option grant
to Executive (750,000 shares of Common Stock are currently
available to satisfy this grant to Executive). The Corporation
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agrees to use its best efforts to take steps to obtain the
approval of its shareholders at the next annual meeting of
shareholders to amend the existing Stock Plans to increase the
number of shares available pursuant thereto such that there shall
be a sufficient number of available shares to provide Executive
with the economic benefit of the Stock Options. In the event
that the necessary shareholder approval is not received, then
Executive's sole and exclusive remedy, provided the Corporation
has used its best efforts, shall be the right, for a period of up
to 60 days following the date of such annual meeting of
shareholders (which meeting shall occur no later than June 30,
1997), to terminate this Agreement upon 30 days advance written
notice given at any time during such 60 day period, and Executive
shall not have the right to assert a claim for damages,
injunctive relief or any other relief in law or equity.
Notwithstanding the foregoing, in the event Executive exercises
his right to terminate this Agreement pursuant to the provisions
of this Paragraph 4(c), Executive shall be paid his pro-rata
portion (based on the number of days of employment in 1997) of
the amount of Incentive Compensation payable with respect to 1997
in accordance with the terms of Paragraph 4(b), and Executive
shall be entitled to receive all compensation and other benefits
under Paragraphs 4(a), 4(b) and 5(a)-(h) accruing through the
date of termination.
5.Fringe Benefits.
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(a) Vacation. Executive shall be entitled to
four (4) weeks of paid vacation annually.
(b) Club Memberships. The Corporation shall pay
all of Executive's dues (including initiation dues) and
membership assessments for such club or clubs which membership(s)
are determined by the Board to be useful in connection with
Executive's duties on behalf of the Corporation. The Corporation
also shall reimburse Executive for all expenses incurred by
Executive at such clubs on behalf of the Corporation.
(c) Reimbursement for Reasonable Business
Expenses. The Corporation shall reimburse Executive for
reasonable expenses incurred by him in connection with the
performance of his duties pursuant to this Agreement, including,
but not limited to, travel expenses, expenses in connection with
seminars, professional conventions or similar professional
functions and other reasonable business expenses.
(d) Automobile. The Corporation shall provide
Executive with full use of a luxury automobile (e.g. Cadillac,
STS, or motor vehicle of comparable cost), owned or leased by the
Corporation, for use in carrying out his duties for the
Corporation and otherwise. The Corporation agrees to provide
adequate liability and collision insurance for the automobile,
protecting the Executive and the Corporation, and to pay all
lease, maintenance and operating costs appropriate or necessary
to maintain and operate such automobile in prime condition.
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(e) Generally. Executive shall be eligible to
participate in such health, welfare and other fringe benefits as
are currently available (and as may be made available in the
future) to other senior executive-level employees of the
Corporation.
(f) Relocation Expenses. The Corporation shall
promptly (i) reimburse Executive for the travel expenses and, for
a period ending 60 days from the date hereof (renewable for up to
an additional 60 days if needed, based on Executive's statement
that he is actively seeking permanent housing) temporary living
expenses, including lodging and food, previously or hereafter
incurred by him or his family in connection with the move to the
Cincinnati, Ohio area and (ii) provide Executive with a one-time
payment of $200,000 for all of Executive's other relocation and
moving expenses relating hereto, including any loss on the sale
of Executive's home in North Carolina, payable upon the
commencement of Executive's employment hereunder.
(g) Life and Disability Insurance. The
Corporation shall provide Executive with life insurance (not less
than $600,000) and disability insurance in accordance with the
Corporation's general policies.
(h) Supplemental Retirement Benefits. The
Corporation shall provide Executive with a supplemental
retirement benefit to be mutually agreed upon and implemented by
December 31, 1996.
6. Termination of Employment.
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(a) Termination for Disability. If during the
Term or any renewal term of employment set forth in Paragraph 2
Executive shall be unable to perform his duties hereunder on
account of illness or other incapacity, and such illness or other
incapacity shall continue for a period of more than six (6)
months in any twelve-month period, the Corporation shall
thereafter have the right to terminate Executive's employment
prior to conclusion of the Term or renewal term set forth in
Paragraph 2. In the event of termination of employment under
this Paragraph 6(a), all compensation and other benefits accruing
after such date of termination pursuant to Paragraphs 4(a), 4(b)
and 5(a)-(h) of this Agreement shall terminate on the date of
employment termination, provided:
(1) Incentive Compensation under Paragraph
4(b) with respect to the fiscal year immediately preceding
the year in which employment termination occurs shall be
paid Executive if it has not been paid by the time of
termination and a pro-rata portion (based on the number of
days of employment in the year of termination) of the amount
of Incentive Compensation payable with respect to the fiscal
year in which employment termination occurs;
(2) Outstanding Stock Options granted
pursuant to Paragraph 4(c) which are exercisable at the time
of Executive's termination for disability shall be
exercisable in accordance with the terms of the applicable
Stock Option agreements and Stock Plans;
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(3) Semi-monthly installments of Base Salary
under Paragraph 4(a) shall be continued for a period of 3
full months after termination but not beyond the Term or
renewal term of employment set forth in Paragraph 2; and
(4) Medical and health coverage to the
extent provided under Paragraph 5(e) shall be continued (at
the Corporation's expense) for a period of six (6) months
after termination.
(b) Termination for Death. In the event of
Executive's death during the Term or any renewal term of
employment set forth in Paragraph 2, all compensation and other
benefits accruing after such date of termination pursuant to
Paragraphs 4(a), 4(b) and 5(a)-(h) of this Agreement shall
terminate on the date of death, provided:
(1) Incentive Compensation under Paragraph
4(b) with respect to the fiscal year immediately preceding
the year in which death occurs shall be paid Executive's
estate if it has not been paid by the time of termination
and a pro-rata portion (based on the number of days of
employment in the year of termination) of the amount of
Incentive Compensation payable with respect to the fiscal
year in which employment termination occurs;
(2) Outstanding Stock Options granted
pursuant to Paragraph 4(c) which are exercisable at the time
of Executive's death shall be exercisable in accordance with
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the terms of the applicable Stock Option agreements and
Stock Plan;
(3) Semi-monthly installments of base salary
under Paragraph 4(a) shall be paid to Executive's wife or,
if deceased, to his estate for a period of three (3) full
months after death but not beyond the Term or renewal term
of employment set forth in Paragraph 2; and
(4) Medical and health coverage to the
extent provided under Paragraph 5(e) shall be continued (at
the Corporation's expense) for Executive's wife and family,
if living, for a period equal to six (6) months.
(c) Termination for Just Cause. During the Term
or any renewal term of employment set forth in Paragraph 2, the
Corporation shall be entitled to terminate Executive's Employment
at any time for Just Cause upon written notice to Executive. For
the purposes of this Agreement, "Just Cause" shall mean
intentional dishonest conduct, intentional willful misconduct or
intentional fraud by Executive in administering the affairs of
the Corporation, conviction of a felony, Executive's material
breach of any of Executive's material agreements or covenants set
forth in this Agreement or Executive's gross negligence in the
performance of Executive's duties under this Agreement and
Executive's failure to remedy or discontinue such breach or gross
negligence within 30 days after written notice from the Board of
Directors specifying such breach or gross negligence. With
respect to the definition of Just Cause, an act, or failure to
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act, on the part of the Executive shall be deemed "intentional"
only if done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that his action or omission
was in, or not opposed to, the best interest of the Corporation.
Failure to meet performance standards or objectives of the
Corporation shall not constitute Just Cause for purposes hereof.
In the event of termination of employment under this Paragraph
6(c), all compensation and other benefits accruing after such
date of termination pursuant to Paragraphs 4(a), 4(b) and 5(a)-
(h) of this Agreement shall terminate on the date of employment
termination, provided:
(1) Incentive Compensation under Paragraph
4(b) with respect to the fiscal year immediately preceding
the year in which employment termination occurs shall be
paid Executive if it has not been paid by the time of
termination and Executive shall receive no Incentive
Compensation with respect to the year of termination; and
(2) Outstanding Stock Options granted
pursuant to Paragraph 4(c) which are exercisable at the time
of Executive's termination shall be exercisable in
accordance with the terms of the applicable Stock Option
agreements and Stock Plan.
(d) Termination without Just Cause. During the
Term or any renewal term of employment set forth in Paragraph 2,
the Corporation shall be entitled to terminate Executive's
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employment upon written notice to Executive for any reason and
without meeting the standards of Just Cause set forth in
Paragraph 6(c) above. In the event of termination of employment
under this Paragraph 6(c), all compensation and other benefits
accruing after such date of termination pursuant to Paragraphs
4(a), 4(b) and 5(a)-(h) of this Agreement shall terminate on the
date of employment termination, provided:
(1) Incentive Compensation under Paragraph
4(b) with respect to the fiscal year immediately preceding
the year in which employment termination occurs shall be
paid Executive if it has not been paid by the time of
termination;
(2) All outstanding Stock Options granted
pursuant to Paragraph 4(c) shall become immediately
exercisable; and
(3) Executive as and for severance pay shall
be paid (i) on the date of such termination, three (3) years
of Base Salary then being received pursuant to paragraph
4(a) plus (ii) a pro-rata portion (based on the number of
days of employment in the year of termination) of the amount
of Incentive Compensation paid or payable with respect to
the fiscal year in which employment termination occurs,
payable at the time provided by Paragraph 4(b); provided
however that if such termination occurs before January 1,
1998, the amount payable pursuant to clause (ii) shall be
75% of Executive's Base Salary immediately prior to such
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termination and shall be paid on the date of such
termination.
(e) Termination by Executive for Good Reason.
During the Term or any renewal term of employment set forth in
Paragraph 2, the Executive shall be entitled to terminate his
employment upon written notice to the Corporation for Good
Reason. For purposes of this Paragraph 6(e), "Good Reason" shall
mean a reduction in Executive's titles as President and Chief
Executive Officer and, commencing immediately after the next
annual shareholders meeting, Chairman of the Board of Directors;
a material reduction in Executive's duties or responsibilities
hereunder; the relocation of the Corporation's principal
executive offices to a location more than 25 miles from
Cincinnati, Ohio; or the Corporation's material breach of any of
the Corporation's material agreements or covenants set forth in
this Agreement, which breach shall not have been remedied or
discontinued within 30 days after written notice by Executive
specifying such breach to the Corporation. In the event of
termination of employment under this Paragraph 6(e), all
compensation and other benefits accruing after such date of
termination pursuant to Paragraphs 4(a), 4(b) and 5(a)-(h) of
this Agreement shall terminate on the date of employment
termination, provided:
(1) Incentive Compensation under Paragraph
4(b) with respect to the fiscal year immediately preceding
the year in which employment termination occurs shall be
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paid Executive if it has not been paid by the time of
termination;
(2) All outstanding Stock Options granted
pursuant to Paragraph 4(c) shall become immediately
exercisable; and
(3) Executive as and for severance pay shall
be paid (i) on the date of such termination, three (3) years
of Base Salary then being received pursuant to paragraph
4(a) plus (ii) a pro-rata portion (based on the number of
days of employment in the year of termination) of the amount
of Incentive Compensation paid or payable with respect to
the fiscal year in which employment termination occurs,
payable at the time provided by Paragraph 4(b); provided
however that if such termination occurs before January 1,
1998, the amount payable pursuant to clause (ii) shall be
75% of Executive's Base Salary immediately prior to such
termination and shall be paid on the date of such
termination.
(f) Failure to Renew Employment Agreement. In
the event this Employment Agreement is not renewed in accordance
with the terms of Paragraph 2 hereof all compensation and other
benefits accruing after such date of termination pursuant to
Paragraphs 4(a), 4(b) and 5(a)-(h) of this Agreement shall
terminate on the date employment ceases, provided:
(1) Incentive Compensation under Paragraph
4(b) with respect to the fiscal year in which the notice of
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non-renewal is given shall be paid Executive in accordance
with the provisions of Paragraph 4(b);
(2) Outstanding Stock Options granted
pursuant to Paragraph 4(c) which are exercisable at the time
of the expiration of Executive's employment shall be
exercisable in accordance with the terms of the applicable
Stock Option agreements and Stock Plan; and
(3) In the event the failure to renew is a
result of the Corporation giving Executive notice of non-
renewal under Paragraph 2, Executive will be paid an amount
equal to Executive's Base Salary then in effect (payable two
(2) business days after the date employment ceases) and
medical and health coverage, to the extent provided under
Paragraph 5(e), shall be continued (at the Corporation's
expense) for a period of 6 full months after the date
employment ceases.
7. Change of Control.
(a) In General. In the event that during the
Term or any renewal term of employment set forth in Paragraph 2
(i) Executive voluntary terminates employment no sooner than
thirty (30) but not later than sixty (60) days after a Change in
Control (as hereinafter defined) or (ii) the Corporation
terminates Executive's employment within one (1) year after a
Change in Control, but excepting termination of employment
pursuant to Paragraphs 6(a), (b) and (c) hereof, then the
Corporation shall pay to Executive, within three (3) business
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days following Executive's termination, the sum of 2.99 times the
sum of (A) Executive's annual Base Salary in effect immediately
prior to such Change in Control and (B) Executive's average
annual Incentive Compensation computed for the period after the
fiscal year ending December 31, 1996. In addition, if a Change
in Control occurs, all the unexercisable Stock Options previously
granted and available for exercise by Executive hereunder shall
become immediately exercisable, and if Executive's employment is
terminated thereafter in accordance with the preceding sentence,
Executive shall be entitled to all other benefits generally
available to senior executives of the Corporation after
termination of employment (excluding severance, if any). The
foregoing payments and benefits shall be in lieu of all other
severance, termination, unexercisable Stock Options, future stock
awards, unpaid or future Incentive Compensation and continuing
pay benefits to which Executive would be entitled under this
Agreement or otherwise.
Notwithstanding the foregoing, in the event
that Executive's termination pursuant to this paragraph 7(a)
occurs in 1996 or 1997, the amount of Incentive Compensation used
in Clause (B) of the foregoing payment formula shall be (x)
$87,500 if the termination occurs in 1996 or (y) a pro-rata
portion (based on the number of days of employment in 1997) of
the amount of Incentive Compensation payable with respect to 1997
(payable in accordance with the terms of paragraph 4(b)) if the
termination occurs in 1997.
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A Change in Control as used herein shall be
deemed to have occurred if the conditions set forth in any one of
the following subparagraphs shall have been satisfied:
(1) Any Person is or becomes the Beneficial
Owner ("Beneficial Owner"), as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended from time to
time ("Exchange Act"), directly or indirectly, of securities
of the Corporation representing 50% or more of the combined
voting power of the Corporation's then outstanding
securities; or
(2) If any action relating to termination is
taken by the Corporation pursuant to the request or
direction of any Person who by agreement, whether actual,
implied or otherwise, will become a Beneficial Owner with
ownership as described in (1) above, or pursuant to the
request or direction of any Person who requests or directs
such action as a condition to becoming a Beneficial Owner
with ownership as described in (1) above, then a Change in
Control shall be deemed to have occurred with respect to
such action and to have preceded such action; or
(3) During any period of two consecutive
years (not including any period prior to the execution of
this Agreement), individuals who at the beginning of such
period constitute the Board and any new director (other than
a director designated by a Person who has entered into an
agreement with the Corporation, to effect a transaction
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described in clause (1), (4) or (5) of this definition)
whose election by the Board or nomination for election by
the Corporation's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or
whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of
the Board; or
(4) The stockholders of the Corporation
approve a merger or consolidation of the Corporation with
any other corporation, other than (a) a merger or
consolidation which would result in the voting securities of
the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding
securities prior to such merger or consolidation under an
employee benefit plan of the Corporation at least 50% of the
combined voting power of the voting securities of the
Corporation or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation,
or (b) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction)
in which no Person acquires more than 50% of the combined
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voting power of the Corporation's then outstanding
securities; or
(5) The stockholders of the Corporation
approve a plan of complete liquidation of the Corporation or
an agreement for the sale or disposition by the Corporation
of all or substantially all the Corporation's assets.
As used in this Paragraph, "Person" shall
have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof; however, a
Person shall not include (i) the Corporation or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation or
any of its subsidiaries, which held stock of the Corporation
prior to the Change in Control, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, both
immediately before and immediately after the Change of Control
event, by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the
Corporation.
(b) Limitation on Payments. Notwithstanding
anything in Paragraph 7(a) to the contrary, if any of the
benefits payable to the Executive as a result of a Change in
Control constitute Parachute Payments, the following provisions
shall apply. If the Threshold Amount is less than (x) the
Parachute Payments but greater than (y) the Parachute Payments
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reduced by the sum of (i) the Excise Tax and (ii) the total of
the Federal, state and local income and employment taxes on the
amount of the Parachute Payments in excess of the Threshold
Amount, then the benefits payable under Paragraph 7(a) of this
Agreement shall be reduced (but not below zero) to the extent
necessary so that the maximum Parachute Payments shall not exceed
the Threshold Amount. In all other circumstances the Executive
shall be entitled to the full benefits payable under Paragraph
7(a) of this Agreement. The Executive shall select a firm of
independent certified public accountants to determine which of
the foregoing provisions shall apply, and such determination
shall be binding on the parties hereto. For the purposes of this
Paragraph 7, "Parachute Payments" shall mean any payment or
provision by the Corporation of any amount or benefit to and for
the benefit of the Executive, whether paid or payable or provided
or to be provided under the terms of this Agreement or otherwise,
that would be considered "parachute payments" within the meaning
of Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code") and the regulations promulgated thereunder;
"Threshold Amount" shall mean three times the Executive's "base
amount" within the meaning of Section 280G(b)(3) of the Code and
the regulations promulgated thereunder, less one dollar; and
"Excise Tax" shall mean the excise tax imposed by Section 4999 of
the Code.
8. Noncompetition. The Corporation and Executive
agree that the Corporation's customer contacts and relations are
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established and maintained at great expense and that Executive by
virtue of employment under this Agreement, will have unique and
extensive exposure to the Corporation's customers and that he
will be able to establish a unique relationship with those
customers and the opportunity, both during and after employment,
to unfairly compete with the Corporation (which term, for
purposes of this Paragraph 8, shall include the Corporation, or
any affiliate or subsidiary of the Corporation which provides
similar products and services). Therefore, Executive and the
Corporation agree as follows:
(a) During Term of Employment. During the Term
or renewal term of his employment, Executive agrees that he shall
not, directly or indirectly, either individually or as an
employee, agent, partner, shareholder, consultant or in any other
capacity participate in, engage in or have an ownership interest
in any business that competes with the Corporation's Business.
The "Corporation's Business" shall mean the business of the
Corporation and its subsidiaries of selling greeting cards and
gift wrapping. The ownership of an interest constituting not
more than two (2%) percent of the outstanding debt or equity in a
corporation the shares of which are traded on a recognized stock
exchange or trade in the over-the-counter market, even though
that corporation may be a competitor of the Corporation, shall
not be deemed financial participation in a competitor.
(b) Upon Termination of Employment. Executive
agrees that, for a period of one (1) year after the termination
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of his employment with the Corporation, he will not, directly or
indirectly, individually or as an employee, agent, partner,
shareholder, consultant or in any other capacity, canvass,
contact, solicit or accept on behalf of himself or any other
corporation, any customers of the Corporation, for the purpose of
providing services, products or business competitive with those
then being provided by the Corporation nor shall Executive during
said one (1) year period solicit or otherwise induce any then
employee of the Corporation to leave his or her employment with
the Corporation.
9. Confidential Information. During the Term of this
Agreement or any renewal term and at all times subsequent
thereto, Executive shall keep secret and shall not exploit or
disclose or make accessible to any person or entity, except in
furtherance of the business of the Corporation, and except as may
be required by law or legal process, any confidential business
information of any type relating to the business of the
Corporation that was acquired or developed by either the
Corporation or any of its subsidiaries or affiliates, or
Executive, prior to or during the Term or renewal term. In
addition, the term "confidential business information" shall not
include information which (i) is or becomes generally available
to the public other than as a result of a disclosure by
Executive; or (ii) was available to Executive prior to any
employment by the Corporation.
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10. Relief. Executive acknowledges that the
provisions of Paragraphs 8 and 9 of this Agreement are reasonable
and necessary for the protection of the Corporation and that the
corporation will be irreparably damaged if such covenants are not
specifically enforced. Accordingly, it is agreed that the
Corporation will be entitled to injunctive relief for the purpose
of restraining Executive from violating such covenants (and no
bond or other security shall be required in connection
therewith), in addition to any other relief to which the
Corporation may be entitled.
11. Sale, Consolidation or Merger. In the event of a
sale of the stock of the Corporation, or consolidation or merger
of the Corporation with or into another corporation or entity, or
the sale of substantially all of the operating assets of the
Corporation to another corporation, entity or individual, the
Corporation's successor-in-interest shall be deemed to have
assumed all liabilities of the Corporation under this Agreement
but the Corporation shall not be relieved of any of its
obligations hereunder.
12. Waiver. The failure of any party to insist, in
any one or more instances, upon performance of the terms or
conditions of this Agreement shall not be construed as a waiver
or a relinquishment of any right granted hereunder or of the
future performance of any such terms, covenant or condition.
13. Notices. Any notice to be given hereunder shall
be deemed sufficient if addressed in writing, and delivered by
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registered or certified mail or delivered personally, in the case
of the Corporation, to its principal business office with a copy
to Xxxx, Xxxxxxxxxx & Xxxxxxxxx, 1800 Star Bank Center, 000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000-0000, Attention: Xxxxxxx X.
Xxxxxxxx, Esq., and in the case of Executive, to his address
appearing on the records of the Corporation or to such other
addresses as he may designate in writing to the Corporation with
a copy to Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, P.C.
14. Severability. In the event that any provision of
this Agreement shall be held to be invalid or unenforceable for
any reason whatsoever, it is agreed such invalidity or
unenforceability shall not affect any other provision of this
Agreement, the remaining covenants, restrictions and provisions
hereof shall remain in full force and effect and any court of
competent jurisdiction may so modify the objectionable provision
as to make it valid, reasonable and enforceable.
15. Amendment. This Agreement may be amended only by
an agreement in writing signed by the parties hereto.
16. Entire Agreement. This Agreement contains the
entire agreement of the parties with respect to Executive's
employment by the Corporation and supersedes any prior or
simultaneous agreements between them, whether oral or written.
17. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
State of Ohio.
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18. Benefit. This Agreement shall be binding upon and
inure to the benefit of and shall be enforceable by and against
the Corporation, its successors and assigns, and Executive, his
heirs, beneficiaries and legal representatives. It is agreed
that the rights and obligations of Executive may not be delegated
or assigned except as specifically set forth in this Agreement.
19. Attorneys' Fees. Executive's reasonable
attorneys' fees incurred in connection with the negotiation of
the terms of this Agreement shall be paid by the Corporation.
IN WITNESS WHEREOF, the parties hereto have executed or
caused this Agreement to be executed as of the day, month and
year first above written.
XXXXXX GREETINGS, INC.
("Corporation")
By:/s/ Xxxxxx X. Xxxxxxxx
-----------------------
XXXXXX X. XXXXXXXX
Chairman of the Board
/s/ Xxxxx X. X'Xxxxxxx
--------------------------
XXXXX X. X'XXXXXXX
("Executive")
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