EMPLOYMENT AGREEMENT
BETWEEN
PER XXXXX
AND
CHECKPOINT SYSTEMS, INC.
THIS AGREEMENT is made as of July, 19, 2001, by and between CHECKPOINT SYSTEMS,
INC. a Pennsylvania corporation ("CSI"), and PER XXXXX ("Executive").
BACKGROUND
CSI is involved in providing integrated security and safety and identification
solutions for retail, industrial and institutional applications world-wide, both
directly and through its affiliates.
Executive has agreed to accept employment with CSI as its Vice President and
General Manager-Europe and has agreed to furnish his skills to CSI and fulfill
the duties of the aforementioned position as outlined in Exhibit "A". attached
hereto and made a part hereof, on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Employment and Term
CSI hereby employs Executive as its Vice President and General
Manager-Europe. Executive agrees to serve CSI in such capacity, subject
to the terms and conditions of this Agreement, for a term of two (2)
calendar years, commencing on the date hereof (the "Term"). The
Executive's period of continuous employment will begin on February 1,
1995.
2. Duties
A. During the Term, Executive shall use his best efforts to perform all
duties required in furtherance of his position as outlined in Exhibit
"A" or as are assigned to him from time to time by the Chief Operating
Officer of CSI.
B. Executive shall diligently and faithfully devote his entire time,
energy, skill, and best efforts to perform his duties under this
Agreement. Executive shall conduct himself at all times so as to
advance the best interests of CSI, and shall not undertake or engage
in any other business activity or continue or assume any other
business affiliations which conflict or interfere with the performance
of his services hereunder without the prior written consent of the
Chief Executive Officer of CSI.
3. Compensation
CSI shall pay Executive and Executive shall accept, as his base
compensation for all services rendered to CSI pursuant hereto:
A. During the Term, an annual base salary of $237,500 USD (the "Base
Salary"), payable at regular monthly intervals in accordance with
CSI's normal payroll practice, which Base Salary shall be adjusted as
of January lst during the Term hereof, effective as of the aforesaid
date. The amount of such adjustment, while in the discretion of the
Chief Executive Officer shall reflect Executive's performance; and
B. In addition to the Base Salary payable to Executive under Subsection
3A above, upon achieving the certain goals and objectives as defined
in CSI's Bonus Plan, attached hereto as Exhibit B, an incentive bonus
"Bonus") (up to 30% max) shall be paid for each year of the Term in
accordance with the terms of said Bonus Plan, which Bonus Pool Plan
may be amended by CSI at any time during the term hereof For the year
2001 only, you will receive a guaranteed minimum bonus of $30,000 USD
under the terms of the Plan payable on or about the earnings release
date for the year 2001 results.
C. In addition to the standard bonus in (B) above, an incremental bonus
based upon exceeding quarterly cash flow and operating income
objectives (as set by the Company) will be payable to Executive. There
is no cap on this aspect of the bonus. This payment shall be payable
on a quarterly basis. Details of the 2001 Bonus Scheme is attached and
is controlling as to targets and payments.
D. You will be paid a housing allowance of $15,000 USD payable on the
commencement of employment.
E. The Company will make a $35,000 USD contribution to your pension plan
for each full year you are in this position. This shall be payable on
a monthly basis.
4. Fringe Benefits and Other Compensation
A. During the Term, Executive shall be entitled to participate in and
receive the program of fringe benefits applicable to all employees of
CSI, subject only to Executive's meeting or satisfying the eligibility
requirements and standards therefor with regard to health, life and
disability insurance benefits. Said program of fringe benefits may be
amended or revoked by CSI at any time during the term hereof
B. CSI shall reimburse to Executive all reasonable business expenses
properly incurred and defrayed by him in the course of employment with
CSI.
C. The Executive shall be entitled to receive his normal compensation for
all Bank and Public Holidays observed in England and a further 30
working days vacation in each calendar year.
5. Termination
A. Executive's employment and rights to compensation hereunder shall
terminate immediately if Executive voluntarily leaves the employment
of CSI without giving the notice set out in this Section 5A, except
that CSI shall have the obligation to pay Executive such portion of
his Base Salary provided for in Subsection 3A hereof as may be accrued
but unpaid (including vacation pay) on the date Executive voluntarily
leaves the employment of CSI. Executive shall have no right to receive
any Bonus payments that have accrued and are payable if Executive
voluntarily leaves the employment of CSI without giving the notice set
out in this Section 5A, it being the understanding of the parties that
in this event, the amount and payment of any accrued Bonus shall be in
the sole discretion of the Board of Directors of CSI. In the event
that Executive voluntarily leaves the employment of CSI, he shall
provide at least thirty (30) days written notice.
B. CSI may upon written notice to Executive giving the reasons therefor
terminate Executive's employment and his rights to compensation
hereunder for cause. As used herein, the term "cause" shall include
and be limited to, the following: conviction of Executive for any
indictable offence (excluding motoring offences), fraud or
embezzlement or crime of moral turpitude; being held liable by a court
of competent jurisdiction for sexual harassment in violation of
applicable local laws; controlled substance abuse, alcoholism or drug
addiction which interferes with or affects Executive's
responsibilities to CSI or which reflects negatively upon the
integrity or reputation of CSI; or Executive's breach of any of the
material covenants contained in this Agreement which breach is not
cured within ten (10) days of the receipt of written notice thereof by
Executive. If Executive is terminated for cause as provided above,
Executive's employment and rights to compensation hereunder shall
terminate immediately upon receipt of written notice except that CSI
shall have the obligation to pay Executive such portion of his Base
Salary and vacation as may be accrued but unpaid on the date his
employment is terminated.
C. If Executive is terminated by CSI during the Term hereof, for reasons
other than those provided in Subsections above, and provided that
Executive is not in violation of the provisions of Section 6 hereof,
Executive shall be entitled to receive severance pay for a period of
eighteen (18) months, and, up to an additional six (6) months
severance pay, (provided the Executive is not employed during each
month of the six month period thereafter). The severance pay shall
consist of payment of one hundred percent (100%) of Executive's
monthly Base Salary payable at regular monthly intervals in accordance
with CSI's normal payroll practices, as well as any bonus payments
that are accrued and payable through the date of such termination, and
continuation of health insurance benefits contemporaneous with the
severance pay.
D. Executive shall not be considered to have voluntarily left his
employment within the meaning of
Section 5A if he leaves for any of the following reasons:
(i) The assignment of the Executive to any duties substantially
inconsistent with his position, duties, responsibilities or status
with CSI as defined herein or a substantial reduction of the aforesaid
duties, responsibilities or compensation;
(ii) In the event of a "Change in Control" as defined herein, any failure
of CSI to obtain the assumption of the obligation to perform this
Agreement as contemplated. For purposes of this Agreement, a "Change
in Control" of CSI shall be deemed to have occurred if (a) any person
or entity or group thereof acting in concert (an "Acquiror") acquires
from the shareholders of CSI (whether through a merger, a
consolidation, or otherwise) and possesses, directly or indirectly,
the power to elect or appoint or approve the appointment of a majority
of the Board of Directors and does, in fact, elect or appoint or
approve the appointment of the majority of the Board; or (b) such
Acquiror obtains the right or power to elect a substitute or
replacement Board, and does, in fact, exercise such right; or (c) the
shareholders of CSI approve an agreement for the sale or disposition
by CSI of all or substantially all of CSI's assets to an Acquiror;
E. No later than six (6) months prior to the end of the Term of this
Agreement, CSI and Executive shall commence negotiations for either an
extension of Term or the entering into of a new agreement. In the
event that the parties are unable to agree upon an extension or new
agreement, and Executive leaves the employ of CSI, Executive shall be
entitled to receive severance pay equal to his Base Salary at the end
of the Term, for a period of one (1) year from the date he leaves the
employ of CSI. If Executive is employed for a full calendar year from
the date hereof, and employment is terminated for any reason, other
than cause as defined in Section 5B, Executive shall be entitled to
receive payment from the Bonus Plan, even if such payment is payable
after Executive's employment has ceased.
F. If Executive is terminated by CSI during the Term hereof, for reasons
other than those provided in Subsections 5A or 5B above, or if this
Agreement is not renewed, CSI shall provide Executive outplacement
consulting services comparable to those received by management of
similar organizations.
G. If Executive becomes unable to perform his duties hereunder due to
partial or total disability or incapacity resulting from a mental or
physical illness, injury or any similar cause, CSI will continue the
payment of Executive's total compensation (including all bonuses) at
his then current rate for a period of six (6) months following the
date Executive is first unable to perform his duties due to such
disability or incapacity. Thereafter, CSI shall have no obligation for
the Base Salary or other compensation payments to Executive during the
continuance of such disability or incapacity, except that CSI shall
pay to Executive, based upon the portion of the calendar year that
Executive was able to perform his duties prior to the disability, the
pro rata portion of the Bonus that Executive would have earned if he
had remained in the employ of CSI for the full calendar year (payable
at such time that Executive would have received such Bonus). 44e
Executive shall receive CSI's standard disability coverage.
H. If Executive dies, all payments hereunder shall continue for a period
of two (2) months after the end of the week in which Executive's death
shall occur, at which point such payments shall cease and CSI shall
have no further obligations or liabilities hereunder to Executive's
estate or legal representative or otherwise, except that CSI shall pay
to Executive's estate or legal representation, based upon the portion
of the calendar year that Executive was employed by CSI prior to his
death, the prorated portion of the Bonus Executive would have earned
if he had remained in the employ of CSI for the full calendar year
(payable at such time that Executive would have received such Bonus).
I. CSIs obligation to make payments hereunder is purely contractual and a
general obligation of CSI and the amounts payable hereunder shall not
be held by CSI in a trust or segregated fund for Employee nor shall
Employee have any right against CSI or any director, officer or
employee of CSI, in respect of any payment hereunder other than as a
general creditor of CSI but subject to any payment that is deemed
otherwise by virtue of law.
J. Upon termination of employment, all vested stock options granted under
the CSI Stock Option Plan (1992) will be treated in accordance with
the terms of the CSI Stock Option Plan (1992).
6. Confidentiality and Covenant Not to Compete
A. Executive covenants and agrees that he will at all times keep
confidential and will not at any time, except with the prior written
consent of CSI, directly or indirectly, communicate or disclose or use
for his benefit or the benefit of any Person (as defined in subsection
9E hereof) except CSI, any trade secrets or confidential or
proprietary information of CSI or any of its affiliates including, but
not limited to, strategic planning documents, data, reports, records,
plans, policies, applications, and other documents, and Executive will
also use his best efforts to prevent unauthorized disclosure by
others. This section shall not apply to any information that is in the
public domain (other than by way of unauthorized disclosure) or
required to be disclosed by virtue of any statutory provision.
B. Executive agrees not to compete with CSI in any product or service
supply by CSI during the six months immediately preceding the date of
termination in any manner whatsoever, as an employee, shareholder,
director, creditor, joint venturer, consultant, or otherwise, or any
currently existing or hereinafter created subsidiary, joint venture,
or business line of CSI, at any time during this Agreement, and for a
period of two years following the date 'of termination of employment
in the area constituting the United States, Puerto Rico and Europe.
C. The parties agree that any breach by Executive of the covenants
contained in this Section 6 will result in irreparable injury to CSI
for which money damages could not adequately compensate CSI, and
therefore, in the event of any such breach, CSI shall be entitled (in
addition to any other rights and remedies which it may have at law or
in equity) to have an injunction issued by any competent court of
equity enjoining and restraining Executive and/or any other Person
involved therein from continuing such breach. The covenants contained
in this Section 6 are independent of all other covenants between
Executive and CSI.
D. If any portion of the covenants or agreements contained herein, or the
application thereof, is construed to be invalid or unenforceable, then
the other portions of such covenant(s) or agreement(s) or the
application thereof shall not be affected and shall be given full
force and effect without regard to the invalid or unenforceable
portions.
E. All information, lists, data, reports, records, plans, policies,
applications, and other papers, articles, and materials of any kind
relating to CSI's business and obtained by Executive in the course of
his association with CSI, whether developed by him or not, shall be
and remain CSI's property and will be returned to CSI along with any
and all copies thereof, at such time as Executive ceases to be an
employee of CSI.
7. Conflict of Interest
A. Executive represents and warrants that he is not subject to any
restrictions or prohibitions whatsoever, and has no interest
whatsoever, contractual or otherwise, which would in any way prevent,
restrict or interfere with his right and/or ability to enter into this
Agreement and perform hereunder, or which would create a conflict of
interest for him or for CSI.
B. Executive covenants that, during the Term, he will disclose to CSI, in
writing, any and all interests he may have, whether for profit or
compensation or not, in any venture or activity which could interfere
with his ability to perform under this Agreement or create a conflict
of interest for him or for CSI.
8. Notices
All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, at the following addresses or to such
other address as either party may designate by like notice:
A. If to Executive, to:
Per Xxxxx
B. If to CSI, to:
Checkpoint Systems, Inc.
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Chairman of the Board of Directors
C. In all cases, copies to:
Stradley, Ronon, Xxxxxxx & Xxxxx
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esquire
9. Additional Provisions
A. This Agreement shall inure to the benefit of and be binding upon CSI
and its successors and assigns and Executive, his heirs, executors,
administrators and legal representatives.
B. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and cannot be changed or
terminated orally. This Agreement supersedes all prior and
contemporaneous written or oral agreements between the parties
relating to the subject matter hereof. No modification or waiver of
any of the provisions hereof shall be effective unless in writing and
signed by the party against whom it is sought to be enforced.
C. If any provision of this Agreement shall be or shall become illegal or
unenforceable in whole or in part, for any reason whatsoever, the
remaining provisions shall nevertheless be deemed valid, binding and
subsisting.
D. No failure on the part of any party hereto to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
E. "Person" as used herein shall mean a natural person, joint venture,
corporation, partnership, trust, estate, sole proprietorship,
governmental agency or authority or other juridical entity.
F. This is a personal service contract and may not be assigned by
Executive. This Agreement may not be assigned by CSI to any affiliate
of CSI which accedes to or otherwise carries on the business of CSI,
whether by merger, liquidation, consolidation or otherwise, unless the
duties and responsibilities of Executive remain substantially
unchanged after such assignment.
G. The headings of the several sections of this Agreement have been
inserted for convenience of reference only and shall in no way
restrict or modify any of the terms or provisions hereof.
H. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the United Kingdom without regard to its
conflicts of laws principles. Subject to the provisions of Subsection
6C hereof, all unresolved claims, demands or disputes between
Executive and CSI arising out of or relating to this Agreement, or the
parties' respective performances hereunder, shall be subject to
binding arbitration in the local Chapter in London, England pursuant
to the Rules of the International Arbitration Association. The
prevailing party shall be entitled to reimbursement for all costs,
including reasonable attorneys' fees, associated with such
arbitration.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.
ATTEST: CHECKPOINT SYSTEMS, INC.
_______________ BY:
--------------------------------
Xxxxxxx X. Xxxxxx, Xx.
WITNESS:
________________
--------------------------------
Per Xxxxx
