Exhibit 10.28
XXXXXXX X. XXXXXXX
EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT dated January 6, 1997 is made by and between Big Flower
Press Holdings, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx (the "Executive").
WHEREAS, the Company considers it essential to the best interests of its
stockholders to xxxxxx the continuous employment of key management personnel;
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as defined in the last Section
hereof) exists and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its stockholders;
and
WHEREAS, the Board has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without discussion in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the sufficiency of which is hereby acknowledged, the Company
and the Executive hereby agree as follows:
1. Defined Terms. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
remain in effect until the Executive's employment with the Company is terminated
by the Company, the Executive or any successor to the Company.
3. Company's Covenants. In order to induce the Executive to remain in the
employ of the Company and in consideration of the Executive's covenants set
forth in Section 4 hereof, the Company agrees, under the conditions described
herein, to pay the Executive the "Severance Payments" described in Section 6.1
hereof in the event the Executive's employment with the Company is terminated
following a Change in Control. No amount or benefit shall be payable under this
Agreement unless there shall have been (or, under the terms hereof, there shall
be deemed to have been) a termination of the Executive's employment with the
Company following a Change in Control under the conditions described herein.
This Agreement shall not be construed as creating an express or implied contract
of employment and, except as otherwise
1
agreed in writing between the Executive and the Company, the Executive shall not
have any right to be retained in the employ of the Company.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event of a Potential Change in
Control, the Executive will remain in the employ of the Company until the
earliest of (i) the date which is six (6) months from the date of such Potential
Change in Control, (ii) the date of a Change in Control, (iii) the date of
termination by the Executive of the Executive's employment for Good Reason
(determined by treating the Potential Change in Control as a Change in Control
in applying the definition of Good Reason), or by reason of death, Disability or
Retirement, or (iv) the termination by the Company of the Executive's employment
for any reason.
5. Compensation Other Than Severance Payments.
5.1 Following a Change in Control, during any period that the Executive
fails to perform the Executive's full-time duties with the Company as a result
of incapacity due to physical or mental illness, the Company shall pay the
Executive's full salary to the Executive at the rate in effect at the
commencement of any such period, together with all compensation and benefits
payable to the Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period, until the
Executive's employment is terminated by the Company for Disability.
5.2 If the Executive's employment shall be terminated for any reason
following a Change in Control, the Company shall pay the Executive's full salary
to the Executive through the Date of Termination at the rate in effect at the
time the Notice of Termination is given, together with all compensation and
benefits payable to the Executive through the Date of Termination under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period.
5.3 If the Executive's employment shall be terminated for any reason
following a Change in Control, the Company shall pay the Executive's normal
post-termination compensation and benefits, if any, to the Executive as such
payments become due. Such post-termination compensation and benefits, if any,
shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
arrangements in effect from time to time.
6. Severance Payments.
6.1 Subject to Section 6.2 hereof, the Company shall pay the Executive the
payments and provide the Executive the benefits described in this Section 6.1
(the "Severance Payments") upon the termination of the Executive's employment
following a Change in Control, in addition to the payments and benefits
described in Section 5 hereof, unless such termination is (i) by the Company for
Cause, (ii) by reason of death, Disability or Retirement, or (iii) by the
Executive
2
without Good Reason. The Executive's employment shall be deemed to have been
terminated following a Change in Control by the Company without Cause or by the
Executive with Good Reason if the Executive's employment is terminated prior to
a Change in Control without Cause at the direction of a Person who has entered
into an agreement with the Company the consummation of which will constitute a
Change in Control or if the Executive terminates his employment with Good Reason
prior to a Change in Control (determined by treating a Potential Change in
Control as a Change in Control in applying the definition of Good Reason) if the
circumstance or event which constitutes Good Reason occurs at the direction of
such Person.
(A) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to two (2) times
the sum of (i) the greater of the Executive's annual base salary in effect
immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and the Executive's annual base
salary in effect immediately prior to the Change in Control, and (ii) the
greater of the target bonus for the Executive pursuant to the Company's
Executive Incentive Plan (or any similar, successor or predecessor annual
incentive plan) (the "EIP") in the year immediately preceding that in
which the Date of Termination occurs or the average such bonus for the
three (3) years immediately preceding the Change in Control.
(B) Notwithstanding any provision of the EIP, the Company shall pay
to the Executive a lump sum amount, in cash, equal to the sum of (i) any
incentive compensation which has been allocated or awarded to the
Executive for a completed fiscal year or other measuring period preceding
the Date of Termination under the EIP, but has not yet been paid (pursuant
to Section 5.2 hereof or otherwise), and (ii) a pro rata portion to the
Date of Termination of the aggregate value of all contingent incentive
compensation awards to the Executive for all uncompleted periods under the
EIP calculated as to each such award by assuming all annual incentive
targets have been met.
(C) All stock options, restricted stock awards and any other
incentive awards (other than awards under the EIP described in
subparagraph (B) hereof) shall immediately vest and become exercisable
and/or payable to the Executive, as the case may be, with any such stock
options to remain exercisable until at least ninety (90) days following
the date of such Change in Control, any performance-based awards being
determined based on the assumption that all applicable incentive targets
have been met.
(D) For a twenty-four (24) month period after the Date of
Termination, the Company shall arrange to provide the Executive with life,
disability, accident
3
and health insurance benefits substantially similar to those which the
Executive is receiving immediately prior to the Notice of Termination
(without giving effect to any reduction in such benefits subsequent to a
Change in Control which reduction constitutes Good Reason). Benefits
otherwise receivable by the Executive pursuant to this Section 6.1(D)
shall be reduced to the extent comparable benefits are actually received
by or made available to the Executive without cost during the twenty-four
(24) month period following the Executive's termination of employment (and
any such benefits actually received by the Executive shall be reported to
the Company by the Executive). If the benefits provided to the Executive
under this Section 6.1(D) shall result in a decrease, pursuant to Section
6.2, in the Severance Payments and these Section 6.1(D) benefits are
thereafter reduced pursuant to the immediately preceding sentence because
of the receipt of comparable benefits, the Company shall, at the time of
such reduction, pay to the Executive the lesser of (a) the amount of the
decrease made in the Severance Payments pursuant to Section 6.2, or (b)
the maximum amount which can be paid to the Executive without being, or
causing any other payment to be, nondeductible by reason of section 280G
of the Code.
6.2 Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive's
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person) (all
such payments and benefits, including the Severance Payments, being hereinafter
called "Total Payments") would not be deductible (in whole or part), by the
Company, an affiliate or Person making such payment or providing such benefit as
a result of section 280G of the Code, then, to the extent necessary to make such
portion of the Total Payments deductible (and after taking into account any
reduction in the Total Payments provided by reason of section 280G of the Code
in such other plan, arrangement or agreement), (A) the cash Severance Payments
shall first be reduced (if necessary, to, but not below, zero), and (B) all
other non-cash Severance Payments shall next be reduced (if necessary, to, but
not below, zero). For purposes of this limitation (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have effectively
waived in writing prior to the Date of Termination shall be taken into account,
(ii) no portion of the Total Payments shall be taken into account which in the
opinion of tax counsel selected by the Company's independent auditors does not
constitute a "parachute payment" within the meaning of section 280G(b)(2) of the
Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) the
Severance Payments shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or (ii) in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions, in the opinion of the tax counsel
referred to in clause (ii); and (iv) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the
4
Company's independent auditors in accordance with the principles of sections
280G(d)(3) and (4) of the Code.
If it is established pursuant to a final determination of a court or an
Internal Revenue Service proceeding that, notwithstanding the good faith of the
Executive and the Company in applying the terms of this Section 6.2, the
aggregate "parachute payments" paid to or for the Executive's benefit are in an
amount that would result in any portion of such "parachute payments" not being
deductible by reason of section 280G of the Code, then the Executive shall have
an obligation to pay the Company upon demand an amount equal to the sum of (i)
the excess of the aggregate "parachute payments" paid to or for the Executive's
benefit over the aggregate "parachute payments" paid to or for the Executive's
benefit over the aggregate "parachute Payments" that could have been paid to or
for the Executive's benefit without any portion of such "parachute payments" not
being deductible by reason of section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at the rate provided in section
1274(b)(2)(B) of the Code from the date of the Executive's receipt of such
excess until the date of such payment.
6.3 The payments provided for in Section 6.1(A), (B) and, to the extent
applicable, (C) hereof shall be made not later than the fifth day following the
Date of Termination, provided, however, that if the amounts of such payments,
and the limitation on such payments set forth in Section 6.2 hereof, cannot be
finally determined on or before such day, the Company shall pay to the Executive
on such day an estimate, as reasonably determined by the Company, of the minimum
amount of such payments to which the Executive is clearly entitled and shall pay
the remainder of such payments (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code). At the time that payments are made under
this Section, the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and the basis
for such calculations including, without limitation, any opinions or other
advice the Company has received from outside counsel, auditors or consultants
(and any such opinions or advice which are in writing shall be attached to the
statement).
7. Termination Procedures and Compensation During Dispute.
7.1 Notice of Termination. After a Change in Control, any purported
termination of the Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the
5
Executive's employment under the provision so indicated. Further, a Notice of
Termination for Cause is required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board which was called and held for
the purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the particulars thereof
in detail.
7.2 Date of Termination. "Date of Termination," with respect to any
purported termination of the Executive's employment after a Change in Control
shall mean (i) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination by the Company,
shall not be less than thirty (30) days (except in the case of a termination for
Cause) and, in the case of a termination by the Executive, shall not be less
than fifteen (15) days nor more than sixty (60) days, respectively, from the
date such Notice of Termination is given).
7.3 Compensation Concerning Termination. If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of a court or arbitration
tribunal of competent jurisdiction which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided further that the Date of Termination shall be extended by a
notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence.
7.4 Compensation During Dispute. If a purported termination occurs
following a Change in Control, and such termination is disputed in accordance
with Section 7.3 hereof, the Company shall continue to pay the Executive the
full compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, salary) and continue the Executive as a
participant in all compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise to the dispute was
given, until the dispute is finally resolved in accordance with Section 7.3
hereof. Amounts paid under this Section 7.4 are in addition to all other amounts
due under this Agreement (other than those due under Section 5.2 hereof) and
shall not be offset against or reduce any other amounts due under this
Agreement.
6
8. No Mitigation. The Company agrees that, if the Executive's employment
by the Company is terminated following a Change in Control pursuant to Section
6.1, the Executive is not required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company pursuant to
Section 6 or Section 7.4. Further, the amount of any payment or benefit provided
for in Section 6 (other than Section 6.1(D)) or Section 7.4 shall not be reduced
by any compensation earned by the Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement.
9.1 In addition to any obligations imposed by law upon any successor to
the Company, the Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder of the
Executive were to terminate the Executive's employment for Good Reason after a
Change in Control, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination.
9.2 This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:
7
To the Company:
Big Flower Press Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
To the Executive:
Xxxxxxx X. Xxxxxxx
at his office in person or at his
home address as maintained on the
books of record of the Company
from time to time
11. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of the
Company and the Executive under Sections 6 and 7 shall survive the expiration of
the term of this Agreement.
12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
8
14. Settlement of Disputes; Arbitration; Attorneys' Fees.
14.1 All claims by the Executive for benefits under this Agreement shall
be directed to and determined by the Board and shall be in writing. Any denial
by the Board of a claim for benefits under this Agreement shall be delivered to
the Executive in writing and shall set forth the specific reasons for the denial
and the specific provisions of this Agreement relied upon. The Board shall
afford a reasonable opportunity to the Executive for a review of the decision
denying a claim and shall further allow the Executive to appeal to the Board a
decision of the Board within sixty (60) days after notification by the Board
that the Executive's claim has been denied. Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in New York City, New York in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of the Executive's
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
14.2 Each party shall have the right, in addition to any other relief
granted by such arbitrator (or by any court with respect to relief related to
specific performance as set forth in Section 14.1), to attorneys' fees based on
a determination by the arbitrator (or, with respect to relief related to
specific performance as set forth in Section 14.1, the court) of the extent to
which each party has prevailed as to the material issues raised in determination
of the dispute.
15. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(A) "Xxxxx" shall mean R. Xxxxxxxx Xxxxx, any member of his family, and
any entity (including, without limitation, any trust, corporation, LLC, LLP or
partnership) controlled, directly or indirectly, by R. Xxxxxxxx Xxxxx and/or any
such family member.
(B) "Beneficial Owner" shall have the meaning defined in Rule 13d-3 under
the Exchange Act.
(C) "Board" has the meaning set forth in the introduction to this
Agreement.
(D) "Cause" for termination by the Company of the Executive's employment,
after any Change in Control, shall mean (i) the willful and continued failure by
the Executive to substantially perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason by the Executive pursuant to
Section 7.1) after a written demand for substantial performance is delivered to
the Executive by the Board, which demand specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive's
9
duties, or (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
or without reasonable belief that the Executive's act, or failure to act, was in
the best interest of the Company.
(E) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from
the Company) representing 35% or more of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the
election of directors of the Company; or
(II) during any period of two consecutive years (not including any
period prior to the date 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 Company to effect a transaction described in clause (I), (III) or
(IV) of this paragraph) whose election by the Board or nomination for
election by the Company'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 thereof; or
(III) the stockholders of the Company approve a merger or
consolidation of the Company with any other entity and, in connection with
such merger or consolidation, individuals who constitute the Board
immediately prior to the time any agreement to effect such merger or
consolidation is entered into fail for any reason to constitute at least a
majority of the board of directors of the surviving corporation following
the consummation of such merger or consolidation; or
(IV) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all the Company's assets.
The acquisition of any portion of the combined voting power of the Company by
Xxxxx or by any person affiliated with Xxxxx shall in no event constitute a
Change in Control. The merger, consolidation or sale of assets of the Company
with or to any corporation or entity controlled by
10
Xxxxx or any person affiliated with Xxxxx shall in no event constitute a Change
in Control.
(F) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(G) "Company" has the meaning set forth in the introduction to this
Agreement.
(H) "Control" shall mean the possession, directly or indirectly, of the
power to direct the management or policies of a Person, whether through
ownership of securities, by contract, or otherwise.
(I) "Date of Termination" shall have the meaning stated in Section 7.2
hereof.
(J) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
(K) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(L) "Executive" has the meaning set forth in the first paragraph of this
Agreement.
(M) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express written
consent) of any one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act described in
paragraph (I), (IV), (V) or (VI) below, such act or failure to act is corrected
prior to the Date of Termination specified in the Notice of Termination given in
respect thereof:
(I) the assignment to the Executive following a Change in Control of
any duties inconsistent with the Executive's status as a senior executive
officer of the Company or a substantial adverse alteration in the nature
or status of the Executive's responsibilities from those in effect
immediately prior to the Change in Control other than any such alteration
primarily attributable to the fact that the Company may no longer be a
public company;
(II) a reduction by the Company following a Change in Control in the
Executive's annual base salary as in effect immediately prior to the
Change in Control;
11
(III) the failure by the Company following a Change in Control,
without the Executive's consent, to pay to the Executive any portion of
the Executive's current compensation, or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven (7) days of the date such
compensation is due;
(IV) the failure by the Company following a Change in Control to
continue in effect any compensation plan in which the Executive
participates immediately prior to the Change in Control which is material
to the Executive's total compensation, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan (as determined by Xxxxx or the Board prior to the
Change in Control), or the failure by the Company following a Change in
Control to continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as existed at
the time of the Change in Control;
(V) the failure by the Company following a Change in Control to
continue to provide the Executive with benefits substantially similar to
those enjoyed by the Executive under any of the Company's pension, life
insurance, medical, health and accident, or disability plans in which the
Executive was participating at the time of the Change in Control, the
taking of any action by the Company following a Change in Control which
would directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of the Change in Control, or the failure by the
Company following a Change in Control to provide the Executive with the
number of paid vacation days to which the Executive is entitled on the
basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect at the time of the Change in
Control;
(VI) any purported termination of the Executive's employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 7.1; for purposes of this Agreement, no such
purported termination shall be effective; or
(VI) any relocation of the Company's principal executive offices
outside of the New York metropolitan area following a Change in Control.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's
12
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good Reason hereunder.
(N) "Notice of Termination" shall have the meaning stated in Section 7.1
hereof.
(O) "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 Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company or (v) Xxxxx.
(P) "Potential Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; or
(II) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(Q) "Retirement" shall be deemed the reason for the termination by the
Company or the Executive of the Executive's employment if such employment is
terminated in accordance with the Company's retirement policy, not including
early retirement, generally applicable to its salaried employees, as in effect
immediately prior to the Change in Control, or in accordance with any retirement
arrangement established with the Executive's consent with respect to the
Executive.
(R) "Severance Payments" shall mean those payments described in Section
6.1 hereof.
(S) "Total Payments" shall mean those payments described in Section 6.2
hereof.
13
IN WITNESS WHEROF, the undersigned parties have signed this Agreement as
of the date first written above.
BIG FLOWER PRESS HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
XXXXXXX X. XXXXXXX
14
