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Exhibit 10(a)
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 1, 1996 (the "EMPLOYMENT AGREEMENT"),
by and between AMSCAN HOLDINGS INC. a Delaware corporation (collectively the
"EMPLOYER" or "COMPANY") and Xxxx X. Xxxxxxxxxxx (the "EMPLOYEE").
WHEREAS, the Employer is presently planning a public offering of its
securities, and wishes to retain the services of the Employee following the
consummation of such offering;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree, effective at and only upon the closing of
the proposed initial public offering of common stock of the Employer (the date
of such closing being referred to herein as the "EFFECTIVE DATE"), as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Employee, and Employee
hereby agrees to serve, as Chief Executive Officer, Chairman of its Board of
Directors and President of the Company, for the term and upon the conditions and
provisions of this Employment Agreement.
(b) Upon the commencement of this Employment Agreement, as
provided in paragraph 3(a), all other employment arrangements in connection with
the Employee's employment by Amscan Inc. shall be terminated except that
Amscan Inc. shall remain liable to the Employee for all obligations owing by the
Company to the Employee on the Effective Date which have not been discharged.
2. EMPLOYEE'S DUTIES.
(a) During the term of this Employment Agreement, the Employer
will employ the Employee as President, Chief Executive Officer, Chairman of its
Board of Directors and the President of the Company. The Employee shall as its
chief executive, supervise, manage and administer the business of the Company,
and perform such executive duties as are consistent with his office and position
and as may be assigned to him from time to time by the Board of Directors.
(b) The Employee shall serve without additional remuneration
as (i) a director of the Employer, if elected by Employer's stockholders; (ii) a
member of any committee of the Board of the Employer, as determined by the
Board; and (iii) a director and/or officer of one or more of the Employer's
subsidiaries, if appointed to such position by the Employer or the applicable
board of directors.
(c) During the term of this Employment Agreement, Employee
shall devote his full business time, skill and efforts to the affairs of the
Employer as reasonably necessary to permit the faithful and diligent performance
of his duties hereunder. But, nothing contained herein is intended to preclude
the Employee from managing his private assets, including his real
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estate holdings (in particular those real estate holdings which may be leased to
the Company or any of its affiliates or subsidiaries) provided that such
activities do not interfere with nor diminish the diligent performance by the
Employee of his duties on behalf of the Company.
3. TERM.
(a) This Employment Agreement shall commence on the day
following the Effective Date and continue for a period of three (3) years
thereafter (the "TERM"), unless terminated earlier in accordance with the
provisions of this Employment Agreement. Notwithstanding the foregoing, the
Employee's employment hereunder shall terminate upon the occurrence of any of
the following events:
1. the mutual agreement, in writing, at any time, by the
Employer and Employee to terminate such employment;
2. the death of the Employee;
3. the termination of the Employee's employment by the
Employer, for "CAUSE" as defined hereinafter;
4. the unilateral cessation or discontinuance by the
Employee of his working for or employment by the
Employer.
(b) For the purposes of this Employment Agreement, "CAUSE"
shall mean (i) the commission by the Employee of any crime or an intentional act
of fraud against the Employer; (ii) any act of gross negligence or wilful
misconduct on the part of the Employee with respect to his duties under this
Employment Agreement; (iii) any act of wilful disobedience on the part of the
Employee in violation of specific and reasonable directions of the Board. A
violation under any Motor Vehicle Law or Code shall not be included in the
definition of "Cause".
(c) Upon termination of the Employee's employment hereunder,
whether at the end of the Term or any extended term or in the event of earlier
termination as provided herein, the Employee shall have no further rights under
this Employment Agreement, except as expressly herein set forth. Nothing
contained herein shall be deemed to preclude the Employer from enforcing any
remedies available to it at law or equity in consequence of a breach by the
Employee of his obligations to the Employer or available to the Employer under
the provisions of this Employment Agreement, including without limitation the
enforcement of any restrictive covenants hereunder to the extent herein
provided.
4. COMPENSATION.
(a) During the Term, the Employer agrees to pay to the
Employee the following base yearly salaries:
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(i) The base yearly salary shall be Three Hundred
Thousand ($300,000.00) Dollars until the end of the
first contract year.
(ii) For each full contract year starting with the second
contract year, the base yearly salary will be
increased by five (5%) percent of the base yearly
salary of the preceding contract year.
For the purposes hereof, "contract year' shall mean each successive
twelve month period commencing on the Effective Date and on each anniversary
thereof during the Term.
(b) Employee's base yearly salary shall be payable in regular
intervals in accordance with the Company's customary payroll practices in effect
during the Term.
(c) All compensation shall be subject to such withholding of
any federal, state or local taxes as may be required by law with respect to
these payments.
(d) In the event of the termination of the Employee's
employment before the end of a contract year, the base yearly salary for the
year of termination shall be pro-rated to the date of termination.
(e) Bonuses may be paid by the Company to the Employee in such
amounts and in such manner as the Company's Board of Directors may, in its sole
discretion, determine.
5. FRINGE BENEFITS.
As additional consideration for the services of the Employee
under this Employment Agreement, the Employer shall provide to the Employee all
fringe benefits provided by the Employer to its other executives, including
automobile allowance, paid vacation, holiday and sick leave, medical insurance
for the Employee, with spouse and dependent children fully paid for by the
Employer, and group life insurance, and participation in pension and/or profit
sharing plans, in the same manner and to the same extent as such fringe benefits
shall be available to such other executives of the Employer or as the Board of
Directors of the Company may otherwise determine.
6. BUSINESS EXPENSES.
The Employer acknowledges that the Employee may necessarily
incur, for the benefit of the Company and in furtherance of the Company's
business, various expenses including, but not limited to, travel, entertainment
and promotion expenses. The Employer, at its options, shall either pay such
necessary expenses directly, advance sums to be used for payment of such
necessary expenses or on submission by the Employee of receipts and an itemized
account of such expenditures, reimburse the Employee for such necessary expenses
actually incurred by him.
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7. RESTRICTIVE COVENANTS.
The Employee acknowledges that his employment with Employer
has brought and will bring him into close contact with trade secrets,
proprietary information and other confidential material and assets of the
Employer and other information not readily available to the public, the
disclosure of which to third parties would have a material adverse effect on the
Employer's business operations. In recognition of the foregoing, the Employee
covenants and agrees that:
(a) During the Term and during any extended term, whether or
not the Employee's employment is terminated before the end of the particular
term, and upon termination of the Employee's employment for a period of three
(3) years following such termination, he will not, directly or indirectly, as
proprietor, partner, shareholder (other than as a less than five percent
shareholder in a publicly held company), officer, director, employee or
consultant, or in any other capacity, for his own benefit or for or with any
other person or entity, engage in or perform services in any business or
activity involved in or related to the business in which the Employer or any of
its Affiliates, as herein defined, is now engaged or any other business in which
the Employer or any of its Affiliates may hereafter become engaged during the
Term in any trading area in which the Employer may be engaged in business or
trade. The Employee acknowledges that the Employer now carries on its business
in many trading areas throughout the world.
(b) Employee will not, at any time, without the prior written
consent of the Employer, furnish or disclose to any person who is not then an
officer, employee or agent of the Employer, (i) any trade secret of the
Employer, or (ii) any documents, records, plans, models, customer lists or other
tangible property of the Employer, regardless of its form, which may come into
his possession, custody or control in consequence of his employment.
(c) In addition to a right to accounting by the Employer
and/or damages and/or any other relief to which the Employer may be entitled as
a result of the Employee's breach hereof the Employer will be entitled to
injunctive relief restraining any such breach or threatened breach, or the
continuation of such breach, by the Employee, provided however, that if a court
of competent jurisdiction shall determine that this covenant shall be
enforceable only if limited to a shorter period of time or to a smaller
geographical area than is herein expressly provided, or otherwise limited, then
and in such event, this covenant shall be deemed to be limited to the extent so
determined to be enforceable, in the same manner and to the same extent as if
such limited were expressly provided herein.
(d) The rights hereunder of the Employer against the Employee
may be assigned by the Employer and may be enforced by any successors or assigns
of the Employer.
"AFFILIATES" shall mean any entity controlling, controlled by
or under common control with the Company or the entity controlling the Company.
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9. ENFORCEMENT.
In the event of any litigation arising out of or related to
the Employment Agreement, in addition to any other relief to which it is
entitled, the prevailing party shall be entitled to receive reimbursement from
the losing party for the prevailing party's legal fees and expenses in
connection with such litigation.
10. NOTICES.
Any notices, requests, consents and other communications,
required or permitted to be given hereunder, shall be in writing, and shall be
deemed to have been duly given if delivered personally or sent by certified
mail, return receipt requested, to the party to be notified at his or its
address set forth below or at such other address as the party to be notified may
have otherwise designated, by notice in writing, with copies to their respective
attorneys as set forth below:
To Employer: Amscan Inc.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Board of Directors
with a copy to: Xxxxxxx & Xxxxxxxxx, LLP
Attn: Xxx Xxxxxxxxx, Esq.
or Xxxx X. Lever, Esq.
Xxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
To Employee: Xx. Xxxx X. Xxxxxxxxxxx
c/o Amscan Inc.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Board of Directors
with a copy to: Xxxxxxx & Xxxxxxxxx, LLP
Attn: Xxx Xxxxxxxxx, Esq.
or Xxxx X. Lever, Esq.
Xxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
11. AMENDMENTS.
No amendments or additions to this Employment Agreement shall
be binding unless in writing and signed by both parties, except as herein
otherwise provided.
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12. GOVERNING LAW.
This Employment Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
13. PARAGRAPH HEADINGS.
The paragraph headings used in this Employment Agreement are
included solely for convenience and shall not affect or be used in connection
with the interpretation of this Employment Agreement.
14. ENTIRE AGREEMENT.
This Employment Agreement including any Exhibits attached
hereto sets forth the entire agreement and understanding of the parties relating
to the subject matter hereof, and supersedes all prior agreements, arrangements
and understandings, written or oral, between the parties, except as specifically
provided herein.
15. SUCCESSORS AND ASSIGNS.
This Employment Agreement, and the Employee's rights and
obligations hereunder, may not be assigned by the Employee. This Employment
Agreement shall be binding on any successor to the Employer, whether by merger,
acquisition of substantially all of the Employer's assets or otherwise, as fully
as if such successor were a signatory hereto, and the Employer shall cause such
successor to, and such successor shall, expressly assume the Employer's
obligations hereunder. The term "EMPLOYER" as used in this Employment Agreement,
shall include all such successors.
IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the day and year first above written.
/S/ XXXX XXXXXXXXXXX
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(Employer)
/S/ XXXX XXXXXXXXXXX
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Xxxx Xxxxxxxxxxx (Employee)
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