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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement is made as of the 16 day of August, 1997 by and between
HoloPak Technologies, Inc. a Delaware corporation ("HoloPak" or the "Company")
and Xxxxx X. Xxxxxx (the "Employee").
RECITALS
The Company desires to employ the Employee, and the Employee desires to
become an employee of the Company, upon the terms and conditions hereinafter set
forth.
WITNESSETH:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. Employment.
The Company hereby employs the Employee as Chief Executive Officer and
the Employee hereby accepts such employment. During the term of employment under
this Agreement (the "Employment Term"), the Employee shall perform such duties
as are requested from time to time by the Board of Directors of the Company or
the Chairman of the Board of Directors of the Company. The Employee shall also
be appointed to the Board of Directors of the Company, subject to approval by
the Board of Directors, to serve until his successor is elected and qualified.
2. Performance.
During the Employment Term, the Employee shall devote his entire
business efforts to the performance of his duties hereunder.
3. Term.
Unless otherwise terminated in accordance with Sections 5 or 6, the
Employment Term shall be for an initial term of eighteen months commencing on
September 1, 1997.
4. Compensation for Employment.
(a) The basic annual compensation of the Employee for his employment
services to the Company and to all of its affiliated companies during the
Employment Term shall be $200,000 (the "Salary"), which the Company shall pay to
the Employee in accordance with its normal payroll policy.
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(b) Commencing as of September 1, 1997 (the "Bonus Starting Date") and
continuing during the Employment Term, the Company shall pay the Employee a
bonus in accordance with this paragraph (b). For each fiscal year during the
Employment Term, the Board, in its sole discretion, shall establish a budget for
pre-tax income in accordance with generally accepted accounting principles
consistently applied ("GAAP") and the Employee's bonus will vary as a percentage
of Salary in relation to the percentage achievement of budget as follows:
Percentage of
Budget Target Percentage of Salary
Attained Earned as Bonus
-------------------------------------------------------
less than 80% 0%
80%-90% 10%
90%-100% 20%
100%-110% 30%
110%-120% 40%
120% less than or equal to 50%
For a percentage of budget achievement between the benchmarks, the percentage of
Salary shall be linearly interpolated, provided that no bonus shall be paid for
achievement less than 80% of budget and the maximum bonus shall be 50% of Salary
in any event. In the case of a partial fiscal year, the Company shall adjust the
bonus to correspond to the Company's budget and the salary for the portion of
the applicable fiscal year that shall be included in the Employment Term.
Notwithstanding the foregoing, the Employee's initial bonus period (the "Initial
Bonus Period") shall be the period starting with the Bonus Starting Date and
ending September 1, 1998, and the Company shall use its budget for that period
(a copy of which the Company has provided to the Employee) to determine the
Employee's eligibility for a bonus, and then apply the applicable bonus
percentage to that portion of the Employee's annual Salary that relates to the
Initial Bonus Period.
(c) During the Employment Term, the Company shall also provide the
Employee with those fringe benefits that are specified on Exhibit "A" hereto
(the "Fringe Benefits"). The Company shall also reimburse the Employee for any
reasonable business expenses incurred on the Company's behalf in connection with
the performance of his services during the Employment Term.
(d)(i) HoloPak will grant to the Employee under its Non-Qualified Stock
Option Plan (the "Plan") options to purchase shares of Common Stock ("Options")
for 100,000 shares of HoloPak Common Stock at an exercise price of $3.25 per
share. The Options will vest and become exercisable in three equal installments
as follows: (i) 33,334 shares on Xxxxx 0, 0000, (xx) 33,333 shares on September
1, 1998 and (iii) 33,333 shares on March 1, 1999. The Options will be subject to
the terms of the Plan and an Option Grant Letter, a copy of which has been
provided to the Employee.
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(ii) The Employee will be an eligible participant in the Plan
and, therefore, will be eligible for grants of stock options in addition to the
Options referred to above. The administrator of the Plan, which is currently a
committee of the Board of Directors, will determine from time to time whether
any such additional options shall be granted to the Employee and the exercise
price, vesting schedule and other terms of any such additional options that may
be granted.
(e) HoloPak's commitment to grant the Options is subject to HoloPak's
obtaining approval of such items by HoloPak's Board of Directors.
5. Termination Without Compensation.
(a) Partial or Total Disability. If the Employee is unable to perform
his duties and responsibilities hereunder to the full extent required hereunder
by reason of non-employment related illness, injury or incapacity for six months
(during which time he shall continue to be compensated hereunder), the Company
may terminate the Employment Term, and the Company shall not have any further
liability or obligation to the Employee hereunder except for any unpaid Salary,
any unpaid bonus earned by Employee pursuant to Section 4(b) hereof for the
bonus period in which termination of employment occurs, adjusted pro rata based
upon the portion of such bonus period in which the Employee was actually
employed by the Company hereunder and any Fringe Benefits accrued to the date of
termination, provided, however, that Employee reserves any rights that he may
have against the Company with respect to any claims for damages and/or benefits
under any Workers' Compensation Act, or otherwise, arising out of injuries,
illness or incapacity incurred as a result of his employment with the Company
(an "Employment Injury"). In the event of any dispute under this Section 5(a),
the Employee shall submit to a physical examination by a licensed physician
mutually satisfactory to the Company and the Employee, the cost of such
examination to be paid by the Company, and the determination of such physician
shall be determinative. If, after termination due to disability as provided
herein, the Employee obtains, at his sole expense, medical certification from a
licensed physician reasonably satisfactory to the Company that such disability
has ended, the Company shall offer to employ the Employee pursuant to the terms
of this Agreement for the remainder of the initial term or any renewal term in
effect at the time of termination, except that the Company shall not be required
to reemploy the Employee at the same officer position if the Company shall have
elected another person to such position during the period of the Employee's
disability and such other person continues in such position at the time of the
Employee's return to employment.
(b) Death. If the Employee dies, this Employment Agreement (except for
the provisions of Sections 6, 10 and 11 hereof) shall terminate, and thereafter
the Company shall not have any further liability or obligation to the Employee,
his executors, administrators, heirs, assigns or any other person claiming under
or through him except for unpaid Salary, any unpaid bonus earned by Employee
pursuant to Section 4(b) hereof for the bonus period in which Employee's death
occurs, adjusted pro rata based upon the portion of such bonus period in which
the Employee was actually employed by the Company hereunder and any Fringe
Benefits accrued to the date of his death.
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(c) Cause. The Company may terminate the Employment Term for "cause" by
giving the Employee 60 days' written notice of the termination date, and
thereafter the Company shall not have any further liability or obligation to the
Employee. For purposes of this Agreement, "cause" shall mean the failure of the
Employee to observe or perform (other than by reason of illness, injury or
incapacity) any of the material terms or provisions of this Agreement,
dishonesty, willful misconduct, material neglect of the Company's business,
conviction of a felony or other crime involving moral turpitude,
misappropriation of funds or habitual insobriety. Any such willful misconduct or
material neglect shall constitute "cause" only if the action (or omission) at
issue shall be continuing 30 days after the Company gives the Employee written
notice of such willful misconduct or material neglect constituting "cause".
6. Termination With Compensation.
(a) Non-Renewal of Term. The Employment Term may be terminated by
either party hereto as of the end of the initial term or any renewal term then
in effect by giving written notice of the intention to terminate the Employment
Term at least 90 days prior to the proposed termination date. If the Company
terminates the Employment Term under such circumstances, the Company shall
provide the Employee with the Termination Compensation specified in Section
6(c).
(b) Without Cause. The Company shall have the right to terminate the
Employment Term without cause at any time by giving the Employee 60 days'
written notice of the termination date. Under such circumstances, the Company
shall provide the Employee with the Termination Compensation specified in
Section 6(c).
(c) Termination Compensation. The "Termination Compensation" shall
consist of payment of the Employee's Salary under Section 4(a), at the level in
effect at the date of termination, for the longer of (A) any remaining part of
the initial term of the Employment Term or (B) 6 months. The Employee shall not
be entitled to any Termination Compensation under this Section 6 unless the
Employee executes and delivers to the Company after a notice of termination a
release in a form satisfactory to the Company in its sole discretion by which
the Employee releases the Company and its affiliates, and the Company so
releases the Employee, from any obligations and liabilities of any type
whatsoever, except for the Company's obligation to provide the Salary specified
in this Section 6, any unpaid bonus earned by Employee pursuant to Section 4(b)
hereof for the bonus period in which termination of employment occurs, adjusted
pro rata based upon the portion of such bonus period in which the Employee was
actually employed by the Company hereunder and any liability for any Employment
Injury. The parties hereto acknowledge that the Salary to be provided under this
Section 6 is to be provided in consideration for the above-specified release.
(d) Exclusivity. Upon any termination by the Company under Section 6(a)
or Section 6(b), the Company shall not have any obligation to the Employee, his
executors, administrators, heirs, assigns or any other person claiming under or
through him other than to provide the Termination Compensation under the terms
and conditions of Section 6(c) and any obligation that the Company may have for
any Employment Injury.
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7. Agreement Not to Compete.
(a) During the Non-Competition Period (defined below), the Employee
shall not, within the Restricted Area (defined below) directly or indirectly, in
any capacity, without the express written consent of the Chairman of the Board
of Directors of the Company, render his services, engage in any business
activity or have a financial interest in, any business (other than as the holder
of not more than one percent of the total outstanding stock of any publicly-held
company) that is competitive with any of those business activities in which
HoloPak, Transfer Print Foils, Inc., Alubec Industries Inc. or any person,
partnership, association, corporation or other entity (each a "Person")
controlled by any of them (any such party is referred to herein as a "HoloPak
Party") shall have been engaged during his employment by the Company, nor shall
the Employee assist any person or entity that is engaged in such business,
including by making HoloPak Information (defined below) available to any such
person or entity. In addition, the Employee shall not directly or indirectly
solicit or otherwise encourage any of employees of any HoloPak Party to
terminate their employment with the applicable HoloPak Party. Notwithstanding
the above, the Employee may become employed or consult in the areas of adhesive
coating, extrusion coating, silicone coating, laminating, printing, paper or
film manufacturing upon termination of his employment, except to the extent that
the Company can prove such subsequent employment is in direct competition with a
HoloPak Party. As used herein, the "Restricted Area" means (i) the United States
of America and (ii) Canada. If a court determines that the foregoing
restrictions are too broad or otherwise unreasonable under applicable law,
including with respect to time or space, the court is hereby requested and
authorized by the parties hereto to review the foregoing restriction to include
the maximum restrictions allowable under applicable law. The "Non-Competition
Period" means the period during which the Employee is employed hereunder. In
addition, (A) in the case of termination of employment pursuant to Section 6
hereof, the "Non-Competition Period" shall be extended from the date of such
termination of employment for a period equal to the greater of (x) the period in
which any payment of compensation (except for an employment related injury) is
made to Employee pursuant to this Agreement and (y) one year, or (B) in the case
of termination of employment pursuant to Section 5 hereof, the "Non-Competition
Period" shall be extended from the date of such termination of employment for a
period of one year.
(b) The terms of this Section 7 shall apply to the Employee and any
Person controlled by the Employee, including any relative of the Employee, to
the same extent as if they were parties hereto, and the Employee shall take
whatever actions may be necessary to cause any such Persons or entities to
adhere to the terms of this Section 7.
8. Inventions, Designs and Product Developments.
All inventions, innovations, designs, ideas and product developments
(collectively, the "Developments"), developed or conceived by the Employee,
solely or jointly with others, whether or not patentable or copyrightable, at
any time during the Employment Term and that relate to the actual or planned
business activities of any HoloPak Party and all of the Employee's right, title
and interest therein, shall be the exclusive property of the applicable HoloPak
Party. The Employee
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hereby assigns, transfers and conveys to any applicable HoloPak Party all of his
right, title and interest in and to any and all such Developments. As requested
from time to time by the Board, the Employee shall disclose fully, as soon as
practicable and in writing, all Developments to the Chairman of the Board of
Directors of the Company. At any time and from time to time, upon the request of
any of the Board, the Employee shall execute and deliver to the Company any and
all instruments, documents and papers, give evidence and do any and all other
acts that, in the opinion of counsel for the Company, are or may be necessary or
desirable to document such transfer or to enable any applicable HoloPak Party to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such Developments or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The applicable HoloPak Party will be responsible for the preparation
of any such instruments, documents and papers and for the prosecution of any
such proceedings and will reimburse the Employee for all reasonable expenses
incurred by him in compliance with the provisions of this Section.
9. Confidential Information.
(a) The Employee has had and will have possession of or access to
confidential information relating to the business of one or more HoloPak
Parties, including writings, equipment, processes, drawings, reports, manuals,
invention records, financial information, business plans, customer lists, the
identity of or other facts relating to prospective customers, inventory lists,
arrangements with suppliers and customers, computer programs, or other material
embodying trade secrets, customer or product information or technical or
business information of certain HoloPak Parties. All such information, other
than any information that is in the public domain through no act or omission of
the Employee or which he is authorized to disclose, or that the Employee had in
his possession prior to his employment with the Company is referred to
collectively as the "HoloPak Information." During and after the Employment Term,
the Employee shall not knowingly, willfully or intentionally (i) use or exploit
in any manner the HoloPak Information for himself or any Person other than a
HoloPak Party, (ii) remove any HoloPak Information, or any reproduction thereof,
from the possession or control of any HoloPak Party or (iii) treat HoloPak
Information otherwise than in a confidential manner.
(b) All HoloPak Information developed, created or maintained by the
Employee, alone or with others while employed by the Company, and all HoloPak
Information maintained by the Employee thereafter, shall remain at all times the
exclusive property of the applicable HoloPak Party. The Employee shall return to
the Company all HoloPak Information, and reproductions thereof, whether prepared
by him or others, that are in his possession immediately upon request and in any
event upon the completion of his employment by the Company.
10. Remedies.
The Employee expressly acknowledges that the remedy at law for any
breach of Sections 7, 8 or 9 will be inadequate and that upon any such breach or
threatened breach, the Company (or the applicable HoloPak Party) shall be
entitled as a matter of right to injunctive relief in any court of
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competent jurisdiction, in equity or otherwise, and to enforce the specific
performance of the Employee's obligations under these provisions without the
necessity of proving the actual damage or the inadequacy of a legal remedy.
Subject to the remainder of this Section 10, the rights conferred upon the
Company (and any HoloPak Party) by the preceding sentence shall not be exclusive
of, but shall be in addition to, any other rights or remedies which HoloPak may
have at law, in equity or otherwise.
11. Survival.
Notwithstanding the termination of the Employment Term pursuant to
Section 5 or 6, the obligations of the Employee under Sections 7, 8 and 9 hereof
shall survive and remain in full force and effect and the Company shall be
entitled to relief against the Employee pursuant to the provisions of Section 10
hereof.
12. General.
(a) Governing Law. The terms of this Agreement shall be governed by the
laws of the State of New Jersey.
(b) Interpretation. Unless the context of this Agreement clearly
requires otherwise, (i) references to the plural include the singular, and to
the singular include the plural, (b) "or" has the inclusive meaning frequently
identified with the phrase "and/or" and (c) "including" has the inclusive
meaning frequently identified with the phrase "but not limited to." The section
and other headings contained in this Agreement are for reference purposes only
and shall not control or affect the construction of this Agreement or the
interpretation thereof in any respect. Section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified. Each accounting
term used herein that is not specifically defined herein shall have the meaning
given to it under GAAP.
(c) Binding Effect. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit and be enforceable by the
respective heirs, representatives, successors (including any successor as a
result of a merger or similar reorganization) and assigns of the parties hereto,
except that the duties and responsibilities of the Employee hereunder are of a
personal nature and shall not be assignable in whole or in part by the Employee.
Any HoloPak Party other than the Company is a third party beneficiary of this
Agreement and may enforce the provisions of this Agreement that pertain to such
HoloPak Party, including Sections 7, 8 and 9, to the same extent as if a party
hereto.
(d) Notices. All notices required to be given under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent by Federal Express or other overnight
delivery service, addressed as follows (or to such other address that a party
may provide from time to time by notice to the other parties):
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TO EMPLOYEE:
Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
TO HOLOPAK:
HoloPak Technologies, Inc.
0 Xxxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Chairman of the Board
TO THE COMPANY:
Transfer Print Foils, Inc.
0 Xxxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
(e) Entire Agreement; Termination of Prior Agreement; Modification.
This Agreement (including Exhibit A hereto) and the additional agreements
specified in Sections 4(d) and 4(e) (to the extent that the parties enter into
any of such agreements) constitute the entire agreement of the parties hereto
with respect to the subject matter hereof. This Agreement may not be modified or
amended in any way except in writing by the parties hereto.
(f) Duration. Notwithstanding the termination of the Employment Term
and of the Employee's relationship with the Company, this Agreement shall
continue to bind the parties for so long as any obligations remain under this
Agreement, and in particular, the Employee shall continue to be bound by the
terms of Sections 7, 8 and 9.
(g) Waiver. No waiver of any breach of this Agreement shall be
construed to be a waiver as to succeeding breaches.
(h) Severability. If any provision of this Agreement or application
thereof to anyone under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.
(i) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement the day and year first written above.
HOLOPAK TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
Title: Chief Financial Officer
and Secretary
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EXHIBIT A
FRINGE BENEFITS
1. Typical Officer Benefits: Inclusion in the benefit plans generally
given to executive officers of the Company from time to time, including
any benefits provided with respect to health, life and disability
insurance and participation in any of the Company's profit sharing and
pension plans. In addition, the Company shall waive the waiting period
for participation in the profit sharing and 401(k) plans to the extent
permitted by law to allow Employee to participate in such plans at the
earliest possible date.
2. Vacation: Four weeks of paid vacation for each one-year period of
employment under this Agreement.
3. Automobile Allowance: Company automobile allowance consistent with the
allowance given to executive officers of the Company.
4. Leased Apartment: The Company will pay for a rented apartment located
within a 20-mile radius of the Company's headquarters, for use by the
Employee at a cost not to exceed $1,500 per month. In the event that
suitable living arrangements are not available at the allotted cost,
the parties may mutually agree upon an increased allowance amount.
5. Round Trip Airfare: The Company will pay for two coach class roundtrip
airline tickets from Newark to Chicago per month.
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