EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of April 28,
1995, by and between PPC ACQUISITIONS, INC., a Delaware corporation (the
"Corporation"), and XXXXX X. XXXXXXXXX, an individual (the "Executive").
RECITALS
WHEREAS, the Corporation is engaged in business as a long run
magazine and catalog full service heatset web offset printer (the "Business");
WHEREAS, the Corporation desires to employ the Executive as the
president of the Corporation, to serve as the executive manager of the
Business with such authority and obligations as set forth herein, and the
Executive desires to provide such management services to the Corporation, on
the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants set forth
in this Agreement and other good and valuable consideration, the receipt of
which is hereby acknowledged, the Corporation and the Executive hereby agree
as follows:
1. TERM OF EMPLOYMENT. The Corporation hereby employs the
Executive for an initial term of three (3) years, commencing on the date
first above set forth and ending on the third anniversary thereof (the
"Initial Term"), and continuing thereafter for successive one (1) year
periods (each, a "Term Extension"); provided, however, that the Executive may
terminate this Agreement as of the end of the Initial Term or any Term
Extension by providing written notice thereof to the Corporation not less
than six (6) months prior to the end of such Initial Term or Term Extension
(an "Executive Non-Extension"); provided further, that in no event shall
there be more than five (5) Term Extensions. The Initial Term together with
any and all Term Extensions is referred to herein as the "Term."
Notwithstanding the foregoing, this Agreement may be sooner terminated as
provided herein.
2. DUTIES AND OBLIGATIONS OF THE EXECUTIVE.
a. DUTIES. During the Term, the Executive shall hold the
title of "President and Chief Executive Officer" of the Corporation, shall
serve as the executive manager of the Business, and as such shall have
responsibility for and authority over the day-to-day operations and
management of the Business (subject to the supervision, control and direction
of the board of directors of the Corporation (the "Board of Directors")).
The duties assigned to the Executive hereunder shall be consistent with the
duties which would be expected of the chief executive officer of companies of
like size and scope.
b. METHOD OF PERFORMING DUTIES. The Executive shall devote
his full time, attention and efforts exclusively to the Business and shall
faithfully, industriously, and to the best of his ability, experience and
talents render the services required of him hereunder. The Executive shall
render such services at the principal office of the Corporation located at
Waterloo, Wisconsin, or at such other location as determined by the Board of
Directors;
PROVIDED, HOWEVER, that the Executive shall travel outside of the State of
Wisconsin from time to time as may be reasonably necessary for the
performance of his services hereunder.
3. COMPENSATION.
a. SALARY; SEVERANCE PAY. In consideration of the
Executive's services to the Corporation hereunder, the Corporation shall pay
to the Executive a salary at an annual rate of Two Hundred Thirty-Five
Thousand Dollars ($235,000) ("Salary"). The Salary shall be payable
semi-monthly in accordance with the standard policies of the Corporation in
existence from time to time, subject to federal, state and local wage
deductions and any other deductions required by law. The Salary shall be
subject to annual upward adjustments in the sole discretion of the Board of
Directors.
Except as specifically provided in this Section 3(a), the
Executive shall not be entitled to any severance payment or other benefits in
the event of the termination of this Agreement. In the event that this
Agreement is terminated pursuant to Section 4(a)(3), 4(a)(4) or 4(c) below,
the Executive shall be entitled to severance pay ("Severance Pay") equal to
the aggregate Salary which would have been payable to the Executive during
the period commencing on the effective date of termination and ending one (1)
year thereafter. Any Severance Pay payable to the Executive by the
Corporation pursuant to this Section 3(a) shall be payable in accordance with
the provisions set forth above with respect to the payment of Salary by the
Corporation, and shall be subject to federal, state and local wage deductions
and any other deductions required by law; PROVIDED, HOWEVER, that if such
effective date shall be subsequent to the expiration of the fourth (4th) Term
Extension, it shall be assumed for purposes of this Section 3(a) that the
Executive would have been entitled to Salary at the rate in effect on the
effective date of termination during such one-year period after such date
notwithstanding the expiration of the fifth (5th) Term Extension. The
Executive shall not be entitled to any Severance Pay or other benefits
following termination of this Agreement pursuant to an Executive
Non-Extension.
b. INCENTIVE COMPENSATION. As additional consideration
for the Executive's services hereunder, the Executive shall be entitled to
participate in the Corporation's Executive Long Term Incentive Compensation
Plan (as may be adopted and in effect from time to time).
c. BENEFITS. In addition to the other compensation
payable to the Executive pursuant to this Section 3, the Executive shall be
entitled to: (1) all employee benefits provided by the Corporation to other
senior management personnel of the Corporation; and (2) payment of monthly
membership dues incurred by the Executive in connection with the Executive's
membership at one (1) country club of his choice; provided, however, that the
aggregate amount of such dues shall not exceed $10,000 in any twelve (12)
month period.
d. REIMBURSEMENT OF EXPENSES. The Executive shall be
reimbursed by the Corporation for all travel and out-of-pocket expenses
reasonably incurred by him for the purpose of and in connection with the
performance of his services hereunder. Such reimbursement shall be made upon
presentation of vouchers or other statements itemizing such expenses in
reasonable detail consistent with the Corporation's policies.
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e. VACATION. The Executive shall be entitled to four
(4) weeks of paid vacation each year during the Term.
4. TERMINATION.
a. TERMINATION NOT FOR CAUSE. This Agreement shall
terminate and the obligations and covenants of the parties hereunder shall be
of no further force and effect, except those obligations which shall survive
the termination of this Agreement as set forth in Section 16 below, upon the
occurrence of any of the following events:
(1) Thirty (30) days after written notice is
delivered to the Executive in the event of the permanent disability of the
Executive (as defined hereinafter);
(2) The death of the Executive;
(3) Thirty (30) days after written notice of
termination is delivered by the Corporation to the Executive for any reason
whatsoever, other than pursuant to Section 4(b) below or clauses (1) and (2)
of this Section 4(a); or
(4) Upon the expiration of the fifth (5th) Term
Extension.
b. TERMINATION FOR CAUSE. This Agreement shall terminate
and the obligations and covenants of the parties hereunder shall be of no
further force and effect, except those obligations which shall survive this
Agreement as set forth in Section 16 below, immediately upon delivery by the
Corporation to the Executive of written notice specifying the basis for
termination in the event of the occurrence of any basis for termination for
cause, as hereinafter defined.
c. TERMINATION BY THE EXECUTIVE FOR GOOD CAUSE. Subject
to the provisions of Section 16 below, the Executive shall have the right to
terminate this Agreement for good cause, as hereinafter defined.
d. GOOD CAUSE. "Good cause" means (1) the material breach
of this Agreement by the Corporation, if such breach is not cured by the
Corporation within thirty (30) days after the Executive has provided written
notice thereof to the Corporation specifying the nature of such breach; (2)
the relocation of the Executive's place of employment to a state other than
Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio or Wisconsin, provided
such relocation is effected without the Executive's consent; (3) at any time
during the Term, the Executive shall fail to be a member of the Board of
Directors or the board of directors of PPC Holdings, Inc., a Delaware
corporation ("Holdings"); or (4) the failure of Holdings to adopt a stock
option plan for the benefit of certain management employees of the
Corporation before January 1, 1996, pursuant to which, and subject to the
conditions therein, the Executive will be granted options to acquire 8,750
shares of Holdings Common Stock at an exercise price of $0.01 per share; such
stock option plan will provide that not less than ten percent (10%) of the
options will vest at each of the five (5) fiscal year-ends after the date of
grant of the options, and that if financial performance goals established by
the board of directors of Holdings are met in each of such
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fiscal years, one hundred percent (100%) of the options will be vested as of
the end of such five (5)-year period.
e. PERMANENT DISABILITY. "Permanent disability" means the
inability of the Executive to fulfill substantially all of his normal duties
and responsibilities hereunder for an aggregate of one hundred eighty (180)
days during any period of two hundred and forty (240) consecutive days, or an
aggregate of two hundred seventy (270) days during any period of three
hundred sixty-five (365) consecutive days, by reason of any physical or
mental disability as determined by a medical doctor acceptable to the Board
of Directors and confirmed in writing by such doctor, which confirmation
shall be submitted to the Board of Directors.
f. TERMINATION FOR CAUSE. "Termination for cause" means
termination of the Executive's employment as a result of:
(1) the Executive's willful breach or habitual
neglect of the Executive's material duties hereunder;
(2) the Executive's chronic alcoholism or addiction
to narcotics (whether lawful or otherwise);
(3) the Executive's criminal conviction for fraud,
embezzlement, misappropriation of assets, malicious mischief, any act of
moral turpitude or any felony; or
(4) any other material breach of this Agreement by
the Executive, which breach is described in a written notice from the Board
of Directors specifying the nature of such breach.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION.
a. DEFINITION OF CONFIDENTIAL AND PROPRIETARY INFORMATION.
The Executive hereby acknowledges that during the Term, the Executive shall
or may make use of, acquire, create, develop or add to certain confidential
and/or proprietary information regarding the Corporation and/or the Business
(whether in existence prior to, as of or after the Effective Date,
collectively, "Proprietary Information"), which Proprietary Information shall
include, without limitation, all of the following materials and information
(whether or not reduced to writing and whether or not patentable or protected
by copyright): inventions, processes, formulae, programs, technical data,
"know-how," procedures, manuals, confidential reports and communications,
marketing methods, product sales or cost information, new product ideas or
improvements, research and development programs, identities or lists of
suppliers, vendors or customers, financial information of the Corporation of
any nature whatsoever, or any other confidential or proprietary information
relating to the Corporation and/or the Business. The parties hereto agree
that the failure of any Proprietary Information to be marked or otherwise
labelled as confidential or proprietary information shall not affect its
status as Proprietary Information.
b. USE. The Executive shall not, directly or indirectly,
disclose, divulge, reveal, report, publish, transfer or otherwise
communicate, or use for his own benefit
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or the benefit of any other person, partnership, firm, corporation or other
entity, or use to the detriment of the Corporation, or misuse in any way, any
Proprietary Information. The Executive and the Corporation each hereby
stipulate that, as between them, all Proprietary Information acquired or
made, developed or conceived of in whole or in part by the Executive
constitutes important, material and confidential and/or proprietary
information of the Corporation, constitutes unique and valuable information,
and affects the successful conduct of the business of the Corporation and its
goodwill, and that the Corporation shall be entitled to recover its damages,
in addition to any injunctive remedy available under Section 9 below, for any
breach of this Section 5.
c. OWNERSHIP.
(1) IN GENERAL. The Executive hereby acknowledges
and agrees that all right, title and interest in and to any Proprietary
Information shall be and shall remain the exclusive property of the
Corporation, and that any Proprietary Information which the Executive
acquires from the Corporation was received in confidence and as a fiduciary
of the Corporation. Without limiting the foregoing, the Executive hereby
assigns to the Corporation any and all right, title and interest which the
Executive may have in all Proprietary Information (including without
limitation all inventions, trade secrets, patents, copyrights and all other
rights in connection therewith) made, developed or conceived of in whole or
in part by the Executive during the Term. The Executive further agrees to
execute and deliver any and all instruments, and to do all other things
reasonably requested by the Corporation, both during and after the Term, in
order to vest more fully in the Corporation all ownership rights in such
Proprietary Information. All equipment, notebooks, documents, memoranda,
reports, files, samples, books, correspondence, lists, other written and
graphic records, and the like, in any way relating to any Proprietary
Information or the business of the Corporation or its activities, which the
Executive shall prepare, use, construct, observe, process, or control
(collectively, "Materials") shall be and shall remain the Corporation's
exclusive property, and the Executive hereby agrees to deliver all Materials,
together with any and all copies thereof, promptly to the Corporation upon
the termination of this Agreement for any reason.
(2) WORK MADE FOR HIRE. Without limiting any
other provision set forth in this Agreement, if any Proprietary Information
or Materials are protected by copyright and are deemed in any way to fall
within the definition of "work made for hire," as such term is defined in 17
U.S.C. Section 101, or any successor provision thereof, such work shall be
considered a "work made for hire," the copyright of which shall be owned
solely, completely and exclusively by the Corporation. Without limiting any
other provision set forth in this Agreement, if any Proprietary Information
or Materials are protected by copyright and are not considered to be included
in the categories of works covered by the "work made for hire" definition
contained in 17 U.S.C. Section 101, or any successor provision thereof, such
items shall be deemed to be assigned and transferred completely and
exclusively to the Corporation by virtue of the Executive's execution of this
Agreement.
(6) NON-COMPETITION.
(a) RESTRICTIONS. In consideration of the retention of
the Executive as an employee of the Corporation and the benefits to be
provided hereunder, from the date hereof
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until one (1) year after the date of termination of this Agreement pursuant
to Section 1 or 4(b) above or (2) for so long as any Severance Pay shall be
payable after a termination of this Agreement pursuant to Section 4(a)(3)
above, the Executive shall not, directly or indirectly, engage in any
business activity (as a principal, agent, employee, shareholder, officer,
director, partner, security holder, creditor, consultant or otherwise),
competitive with the Business or the Corporation's other activities, except
as previously approved by the Board of Directors in writing. During the
Term, the Executive shall not, directly or indirectly, or by action in
concert with others, induce or influence, or seek to induce or influence, any
person who is engaged by the Corporation (as an agent, employee, consultant,
or otherwise) to terminate such engagement with the Corporation; provided,
however, that nothing contained in this Agreement shall be deemed to limit
the authority of the Executive to terminate employees of the Corporation in
connection with the exercise of the Executive's duties under this Agreement.
Notwithstanding any provision to the contrary set forth in this Agreement,
the Corporation hereby acknowledges and agrees that the restrictions set
forth in this Section 6 shall not apply in the event that this Agreement is
terminated by the Executive for good cause in accordance with the terms set
forth in Section 4(c) above.
(b) INTERPRETATION OF COVENANTS. Nothing contained in this
Section 6 shall be deemed a waiver of the Executive's obligations under
Section 5, and in the event of any conflict or inconsistency between the
provisions of this Section 6 and Section 5 above, the provisions of Section 5
shall control.
7. REASONABLENESS OF RESTRICTIONS. THE EXECUTIVE HAS
CAREFULLY READ AND CONSIDERED THE PROVISIONS OF SECTIONS 5 AND 6 HEREOF AND,
HAVING DONE SO, HEREBY AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH
SECTIONS ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED FOR THE
PROTECTION OF THE INTERESTS OF THE CORPORATION AND ITS BUSINESS.
8. INDEMNIFICATION. The Corporation shall indemnify, defend
and hold harmless the Executive from and against all losses, liabilities,
damages, costs and expenses of any nature whatsoever (including, without
limitation, reasonable attorneys' fees and costs related thereto) which the
Executive may suffer or incur in any threatened, pending or completed action,
suit or proceeding by reason of the performance of his services under this
Agreement or as a member of the Board of Directors if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reason to believe his conduct was unlawful; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which the Executive shall have been adjudged to be liable to the Corporation
unless and only to the extent that a court of applicable jurisdiction shall
have determined that despite the adjudication of liability but in view of all
of the circumstances of the case, the Executive is fairly and reasonably
entitled to indemnity for such expenses which such court shall determine to
be proper.
9. INJUNCTIVE RELIEF.
a. REGARDING EMPLOYMENT DUTIES IN GENERAL. The parties
hereby acknowledge and agree that the services to be performed under the
terms of this Agreement are
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of a special, unique, unusual, extraordinary and intellectual character that
gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law. The parties therefore
expressly agree that the Corporation, in addition to any other rights or
remedies that the Corporation may possess, shall be entitled to injunctive
and other equitable relief (other than an injunction to compel the Executive
to perform for the Corporation the services required under this Agreement) to
prevent or remedy a breach of this Agreement by the Executive.
b. REGARDING CONFIDENTIALITY AND NON-COMPETITION . The
Executive acknowledges and agrees that the Corporation shall suffer
irreparable harm in the event that the Executive breaches any of his
obligations under Sections 5 and 6 hereof, and that monetary damages shall be
inadequate to compensate the Corporation for any such breach. Accordingly,
the Executive agrees that in the event of any breach or threatened breach by
the Executive of any of the provisions of Sections 5 and 6 hereof, the
Corporation shall be entitled to a temporary restraining order, preliminary
injunction and permanent injunction in order to prevent or restrain any such
breach or threatened breach by the Executive, or by any or all of the
Executive's agents, representatives or other persons directly or indirectly
acting for, on behalf of or with the Executive.
c. NO LIMITATION OF REMEDIES. Notwithstanding the
provisions set forth in Sections 9(a) and 9(b) above or any other provision
contained in this Agreement, the parties hereby agree that no remedy
conferred by any of the specific provisions of this Agreement, including,
without limitation, this Section 9, is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on
and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives. Notwithstanding the
foregoing, neither party shall assign this Agreement without the prior
written consent of the other party.
11. GOVERNING LAW. This Agreement shall be construed under and
in accordance with, and governed in all respects by, the laws of the State of
Wisconsin (without giving effect to principles of conflicts of law).
12. WAIVER. The failure of any party to insist on strict
compliance with any of the terms, covenants, or conditions of this Agreement
by any other party shall not be deemed a waiver of that term, covenant or
condition, nor shall any waiver or relinquishment of any right or power at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
13. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing, and shall be deemed to have been
given five (5) days after it is placed in the United States mail, registered
or certified, postage prepaid, return receipt requested, or upon receipt if
personally delivered, or the next business day if transmitted by
telefacsimile (which telefacsimile shall be followed by a copy thereof placed
in the United States
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mail, registered or certified, postage prepaid, return receipt requested, no
later than the next business day after transmission thereof), addressed to
the parties as follows:
To the Executive:
Xxxxx X. Xxxxxxxxx
00 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
To the Corporation:
PPC Acquisitions, Inc.
0000-X Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chairman of the Board
Any party may change its above address for notices upon written notice to the
other party in accordance with this Section.
14. INTEGRATION. This Agreement constitutes the entire
agreement of the parties hereto with respect to the retention of the
Executive by the Corporation, and supersedes any and all prior and
contemporaneous agreements, whether oral or in writing, between the parties
hereto with respect to the subject matter hereof.
15. AMENDMENTS. This Agreement may not be amended, modified,
altered or supplemented except by written agreement of the parties hereto.
16. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS. The rights and
obligations of the parties hereto pursuant to Sections 3, 5, 6, 8 and 9
hereof, including the obligation of the Corporation to pay any and all
compensation described under Section 3 above earned, or to reimburse the
Executive for expenses described in Section 3(d), as of the effective date of
termination of this Agreement, shall survive the termination of this
Agreement.
17. SEVERABILITY. If any provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable,
the remaining provisions shall nevertheless continue in full force without
being impaired or invalidated in any way. If any court of competent
jurisdiction holds any provision of this Agreement to be invalid, void or
unenforceable with respect to any state, region or locality, such provision
shall nevertheless continue in full force and effect in all other states,
regions and localities to which such provision applies.
18. HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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20. ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce the terms of this Agreement, the prevailing party shall
be entitled to recover all reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Agreement as of the date first above written.
PPC ACQUISITIONS, INC.,
a Delaware corporation
By: /S/ XXXXXX X. XXXXXXX
------------------------------------------
Name:
Title:
/S/ XXXXX X. XXXXXXXXX
---------------------------------------------
XXXXX X. XXXXXXXXX
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