EMPLOYMENT AGREEMENT
Exhibit 10.21
This Agreement is made as of the 30th day of June, 2008 between Tufco L.P., a
Delaware corporation (“Tufco”), and Xxxxxx Xxxx (The “Employee”).
RECITALS
Tufco L.P. desires to employee the Employee and the Employee desires to become an employee of
Tufco L.P., upon the terms and conditions herinafter set forth. Tufco L.P., Inc. is a Delaware
corporation (“Tufco”).
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
Tufco L.P. hereby employees the Employee as General Manager of its Business Imaging Division
in Newton, NC 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 required from
time to time by the Executive Vice President and COO of Tufco L.P., the President and CEO of Tufco
L.P., the Board of Directors of Tufco L.P. (the “Board”) or any senior officer of Tufco L.P., Inc.
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 one year commencing on June 30, 2008 and continuing thereafter for
successive one-year renewal terms.
4. Compensation for Employment
(a) The basic annual compensation of the Employee for his employment services to Tufco and to
all of its affiliated companies during the Employment Term shall be $156,000 (the “Salary”), which
Tufco shall pay to the Employee in accordance with its normal payroll policy. Tufco may adjust the
Salary upward on an annual basis as the Board may determine, but the Salary shall not be decreased.
(b) Commencing as of October 1, 2008 (the “Bonus Starting Date”) and continuing during the
Employment Term, Tufco 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 that budget as follows:
| Percentage of Budget Attained | Percentage of Salary Earned as Bonus | |||
79% and below |
0.0 | % | ||
80% |
20.0 | % | ||
90% |
27.5 | % | ||
100% |
35.0 | % | ||
110% |
42.5 | % | ||
120% and above |
50.0 | % | ||
For a percentage of budget achievement between the benchmarks, the percentage of Salary shall be
linearly interpolated, provided that no bonus is paid for achievement less than 80% of budget and
the maximum bonus shall be 50% of Salary in any event. In the case of partial fiscal year, Tufco
shall adjust the bonus to correspond to Tufco’s budget and the salary for the portion of the
applicable fiscal year that shall be included in the Employment Term.
(c) During the Employment Term, Tufco shall also provide the Employee with those fringe
benefits that are specified on Exhibit “A” hereto (the “Fringe Benefits”). Tufco shall also
reimburse the Employee for any reasonable expenses incurred on Tufco’s behalf in connection with
the performance of his services during the Employment Term.
(d) Stock Options. Options may be granted periodically to selected Tufco L.P.
executives for superior performance at the sole discretion of the President/CEO, subject to options
availability determined by and at the sole discretion of the Chairman of the Tufco L.P. Board of
Directors. The timing, the exercise price, as well as the vesting period and the number of options
(if any) will be determined annually by the Chairman of the Tufco L.P. Board of Directors.
5. Termination Without Compensation
(a) Non-Renewal of Term. The Employment Term may be terminated by either party hereto
at 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 30 days prior to the proposed termination date.
(b) 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 illness, injury or
incapacity for six months (during which time he shall continue to be compensated hereunder), Tufco
may terminate the Employee Term, and Tufco shall not have any further liability or obligation to
the Employee hereunder except for any unpaid Salary and Fringe Benefits accrued to the date of
termination. In the event of any dispute under this Section 6(b), the Employee shall submit to a
physical examination by a licensed physician mutually satisfactory to Tufco and the Employee, the
cost of such examination to be paid by Tufco, 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 Tufco that such disability has ended, Tufco 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 Tufco shall not be required to reemploy the
Employee at the same position if Tufco shall have elected another person to such position during
the period.
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(c) Death. If the Employee dies, the Employment Agreement (except for the provisions
of Sections 6, 10 and 11 hereof) shall terminate, and thereafter Tufco shall not have any further
liability or obligation to the Employee, his executors, administrators, heirs, assigns or any other
person claiming under or though him except for unpaid Salary and Fringe Benefits accrued to the
date of his death.
(d) Cause. Tufco may terminate the Employment Term for “cause” by giving the Employee
30 days’ notice of the termination date, and thereafter Tufco 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 Tufco’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 Tufco gives the Employee notice of such willful misconduct or material neglect.
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 Tufco terminated the Employment Term under such circumstances, Tufco shall provide the
Employee with the Termination Compensation specified in Section 6(c).
(b) Without Cause. Tufco shall have the right to terminate the employment Term
without cause at any time by giving the Employee 30 days’ notice of the termination date. Under
such circumstances, Tufco shall provide the Employee with the Termination Compensation specified in
Section 6(c).
(c) Termination Compensation. The “Termination Compensation” shall consist of the
following: (I) in the case of a termination by Tufco under Section 6(a), 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 one-year term of the Employment Term or (B) one year. 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 from
any obligations and liabilities of any type whatsoever, except for Tufco obligation to provide the
Salary specified in this Section 6. 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.
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(d) Exclusivity. Upon any termination by Tufco under Section 6(a), or Section 6(b),
Tufco 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). Upon any termination by the Employee
under Section 6(a), Tufco 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
to provide to the Employee any unpaid Salary and Fringe Benefits that shall have accrued through
the date of termination.
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, render his services,
engage or have a financial interest in, any business that is competitive with any of those business
activities in which Tufco L.P., Inc. shall have been engaged during his employment by it, including
paper converting, mill roll converting, paper sheeting, slitting and rewinding paper rolls,
facsimile rolls, and buying and reselling paper products, nor shall the Employee assist any person
or entity that is engaged in such business, including by making Tufco Information (defined below)
available to any such person or entity. In addition, during the Non-Competition Period, the
Employee shall not directly or indirectly solicit or otherwise encourage any of the employees of
any Tufco Party (defined below) to terminate their employment with the applicable Tufco Party. As
used herein, the “Restricted Area” means the United States of America. 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 equal to the sum of (A) the period of the
Employee’s employment hereunder, (B) any period during which the Employee is paid any Termination
Compensation (defined above) and (C) an additional one year after the end of the later of the
period in clauses (A) and (B).
(b) The terms of this Section 5 shall apply to Employee and any person, partnership,
association, corporation or other entity (collectively, a “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 5.
(c) In the event of the voluntary or involuntary bankruptcy of Employer or the filing of a
plan for reorganization by Employer resulting in the termination of the contract of employment or a
situation giving rise to circumstances by which Employer fails to make any payment of compensation
set forth in the Employment Agreement relating to covenants against competition as set forth in
Section 7 of the Agreement.
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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 Tufco, Tufco or any person controlled by
either or both of them (any such party is referred to herein as a “Tufco Party”) and all of the
Employee’s right, title and interest therein, shall be the exclusive property of the applicable
Tufco Party. The Employee hereby assigns, transfers and conveys to any applicable Tufco 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 Board. At any time and from time to time, upon request of any of the Board,
the Employee shall execute and deliver to Tufco any and all instruments, documents and papers, give
evidence and do any and all other acts that, in the opinion of counsel for Tufco, are or may be
necessary or desirable to document such transfer or to enable any applicable Tufco 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 Tufco Party will be responsible for the preparation
of any such instruments, documents and paper 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 Tufco 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 Tufco
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, is referred to collectively
as the “Tufco Information”. During and after the Employment Term, the Employee shall not (I) use
or exploit in any manner the Tufco Information for himself of any Person other than a Tufco Party,
(II) remove any Tufco Information, or any reproduction thereof, from the possession or control of
any Tufco Party or (III)M treat Tufco Information other than in a confidential manner.
(b) All Tufco Information developed, created or maintained by the Employee, alone or with
others while employed by Tufco, and all Tufco Information maintained by the Employee thereafter,
shall remain at all times the exclusive property of the applicable Tufco Party. The Employee shall
return to Tufco all Tufco 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 Tufco.
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, Tufco (of the applicable
Tufco Party) shall be entitled as a matter of right to injunctive relief in any court of 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 Tufco (and any Tufco Party) by the preceding sentence shall not be exclusive
of, but shall be in addition to, any other rights or remedies which Tufco may have at law, in
equity or otherwise.
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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 Tufco 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 Wisconsin.
(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, (II)
“or” 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 Tufco Party
other than Tufco is a third party beneficiary of this Agreement and may enforce the provisions of
this Agreement that pertain to such Tufco 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:
| TO EMPLOYEE | TO: | |||
| Xxxxxx Xxxx | Tufco L.P., Inc. | |||
| 000 Xxxxx Xxxx | Attn: Chief Executive Officer | |||
| Xxxxxxxxx, XX 00000 | 0000 Xxxxx Xxxxx Xxxx | |||
| Xxxxx Xxx, XX 00000 |
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(e) Entire Agreement; Termination of Prior Agreement Modification. This Agreement
constitutes 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 relationship with Tufco, 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 or 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
validity 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.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto duly
executed this Agreement the day and year first written above.
| TUFCO L.P., INC. | EMPLOYEE | |||||||||
By:
|
/s/ Xxxxxxx X. Xxxxxxx
|
By: | /s/ Xxxxxx Xxxx
|
|||||||
| Executive Vice President, CFO, COO | ||||||||||
Date:
|
June 30, 2008 | Date: | June 30, 2008 | |||||||
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EXHIBIT A
ADDENDUM TO EMPLOYMENT CONTRACT OF: Xxxxxx Xxxx
Tufco L.P. agrees to provide the benefits listed below to Xxxxxx Xxxx, as a supplement to the
employment contract dated June 30, 2008, or employment date as soon thereafter as mutually agreed
by the parties.
| • | Company paid health insurance, dental insurance and disability insurance. |
| • | Company paid life insurance policy in the amount of $250,000. |
| • | Immediate vesting of all stock options grants upon any significant change of ownership in Tufco L.P. (of which 2,000 are granted on start date) |
| • | $800 per month car allowance or Company leased vehicle. |
| • | Non-equity membership in Lake Hickory Country Club |
Agreed to by Tufco L.P.:
TUFCO L.P., INC.:
/s/ Xxxxxxx X. Xxxxxxx
|
||
Executive Vice President, CFO, COO |
EMPLOYEE:
/s/ Xxxxxx Xxxx
|
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