EXHIBIT 10.86
FIRST AMENDMENT TO
EMPLOYMENT, NON-COMPETITION
AND STOCK REPURCHASE AGREEMENT
This First Amendment to Employment, Non-Competition and Stock Repurchase
Agreement (this "Amendment Agreement") is dated as of January 8, 1999, is made
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by and between IMPAC Group, Inc., a Delaware corporation, with its principal
executive offices at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000-0000
(the "Company"), and Xxxxxxx Xxxxxxxxxxx (the "Employee"), an individual
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residing at _______________________________________________________________, and
amends that certain Employment, Non-Competition and Stock Repurchase Agreement,
dated as of March 12, 1998, by and between the Company and the Employee (the
"Employment Agreement").
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WHEREAS, this Amendment Agreement is being entered into in connection with
(a) the Securities Purchase Agreement of even date herewith, by and among the
Company and the Purchasers, as defined therein, and (b) the Company's Fourth
Amended and Restated Certificate of Incorporation of even date herewith (the
"Charter Amendment");
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WHEREAS, pursuant to the Charter Amendment, certain additional restrictions
are being placed on the Company's ability to make payments in cash of the
repurchase price for Shares (as defined in the Employment Agreement) being
repurchased by the Company under the terms of the Employment Agreement; and
WHEREAS, in consideration for, among other things, the Employee's
confirmation of his acceptance of the Charter Amendment as a "Subordinating
Agreement", as defined in the Employment Agreement, the Company has agreed to
make certain amendments to the Employment Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Employee agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
have the respective meanings ascribed to them in the Employment Agreement.
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2. Amendments. Upon the date of the effectiveness of the Charter
Amendment, the Employment Agreement shall be amended as follows:
2.1. Section 1 (Definitions) shall be amended by adding the following new
definitions in the appropriate alphabetical order:
""Severance Release" means a release of any claims of the Employee against
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the Company and its stockholders, directors, officers, employees, agents or
other affiliates arising out of his employment relationship (other than claims
to any compensation or benefits payable under or to be provided pursuant to
Section 5 hereof, or any rights of the Employee under Sections 6 or 7 hereof)
duly executed by the Employee and reasonably satisfactory in form and substance
to the Company.
"Subordinating Agreement" has the meaning specified in Section 7.1(a)(y)
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hereof."
2.2. Section 1 (Definitions) shall be further amended by deleting
therefrom the definitions of "Severance Extension Notice" and "Severance
Notice".
2.3. Sections 5(a) and 5(b) shall be amended by deleting such Sections in
their entirety, and substituting therefor the following new Sections 5(a) and
5(b):
"(a) If the Employee's employment with the Company terminates pursuant
to either Section 4(c) (by the Company without Cause) or Section 4(d) (by the
Employee for Good Reason) (other than a Termination upon Retirement) during the
Designated Term, then the Company shall, upon its receipt of a Severance
Release, continue to pay and provide to the Employee (A) the compensation
payable to him pursuant to Section 3(a) hereof, and (B) the benefits provided to
him pursuant to Section 3(c) hereof (the compensation and benefits described in
clauses (A) and (B), together, such Employee's "Base Severance Compensation"),
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and, unless such Termination of Employment was a Termination for Under-
Performance, (C) any bonus accrued or earned by the Employee pursuant to the
Bonus Plan and attributable to the Employee's performance for the portion of the
year prior to his Termination of Employment, on a one-time only basis payable at
the time of payment of bonuses to other executive employees under the Bonus
Plan, and (D) for each year, 50% of an amount equal to the compensation payable
to the Employee pursuant to Section 3(a), multiplied by a fraction, the
numerator of which equals the aggregate bonus actually payable with respect to
the preceding year to the Company's other executive employees in the
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same bonus pay-out range as the Employee was in prior to his Termination of
Employment, and the denominator of which equals the aggregate salary of such
other executive employees for such preceding year (the compensation described in
clauses (C) and (D) together, such Employee's "Variable Severance Compensation")
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for a period (the "Initial Severance Period") equal to the longer of (i) the
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remainder of the Designated Term, and (ii) (x) if such Termination of Employment
was a Termination for Under-Performance, the one-year period following the date
of such Termination of Employment, or (y) if such Termination of Employment was
not a Termination for Under-Performance, the eighteen-month period following the
date of such Termination of Employment. In the Company's sole discretion, the
Company may elect by written notice to the Employee given no later than thirty
(30) days prior to the end of the Initial Severance Period, to continue to pay
and provide to the Employee his Base Severance Compensation for an additional
period (the "Additional Severance Period") of up to one year following the end
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of the Initial Severance Period, provided that such Additional Severance Period
shall in no event extend beyond the second anniversary of the Employee's
Termination of Employment. Upon payment in full of the Employee's Base Severance
Compensation and, if and when applicable, his Variable Severance Compensation,
as described in this Section 5(a), the Company's obligations to pay and provide
the Employee with any other compensation otherwise payable to him pursuant to
Section 3 hereof, and all other rights of the Employee under Sections 2, 3 and 5
hereof, shall cease as of the date of such payment in full.
(b) If the Employee's employment with the Company terminates pursuant
to either Section 4(c) (by the Company without Cause) or Section 4(d) (by the
Employee for Good Reason) (other than a Termination upon Retirement) at any time
after the end of the Designated Term, then the Company shall, upon its receipt
of a Severance Release, continue to pay and provide to the Employee his Base
Severance Compensation and, unless such Termination of Employee was a
Termination for Under-Performance, his Variable Severance Compensation for a
period (the "Initial Post-Term Severance Period") equal to (i) one year
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following the date of such Termination of Employment, if such Termination of
Employment was a Termination for Under-Performance, or (ii) eighteen months
following the date of such Termination of Employment, if such Termination of
Employment was not a Termination for Under-Performance. The Company may elect,
in its sole discretion, by written notice to the Employee given no later than
ninety (90) days prior to the end of the Initial Post-Term Severance Period, to
extend the period during which the Employee's Base Severance Compensation shall
be payable and provided to the Employee for an additional period (also referred
to herein as an "Additional Severance Period") of up to one year from the end of
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the Initial Post-Term Severance
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Period, provided that such Additional Severance Period shall in no event extend
beyond the second anniversary of the Employee's Termination of Employment. Upon
payment in full of the Employee's Base Severance Compensation, and, if and when
applicable, his Variable Severance Compensation as described in this Section
5(b), the Company's obligations to pay and provide the Employee with any of the
compensation payable to him pursuant to Section 3 hereof, and all other rights
of the Employee under Sections 2, 3 and 5 hereof, shall cease as of the date of
such payment in full."
2.4. The first sentence of Section 7.1(a)(y) shall be amended by deleting
such sentence in its entirety, and substituting therefor the following:
"if the Company is prohibited by the terms of the Company's Charter, as in
effect from time to time, or any of the Company's or any of its
Subsidiaries' agreements with its or their lenders (including, without
limitation, the Company's senior credit agreement with Bank of America
National Trust & Savings Association, as Agent, and the Indenture with
respect to the Company's Senior Subordinated Notes) (with the Charter and
any such agreement each being referred to herein as a "Subordinating
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Agreement") from making any payments of any portion of the repurchase price
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for any of the Shares in cash, the Company shall be entitled to complete
the repurchase of such Shares as to which payment of the repurchase price
in cash is not so prohibited by delivering to the Employee a check for the
repurchase price thereof."
2.5. Section 8(b) (Non-Competition) shall be amended by inserting the
words "or the Initial Post-Term Severance Period, as applicable" between the
words "Severance Period" and the words ", the Additional Severance Period" on
the eleventh line of such Section.
3. Miscellaneous.
(a) No Other Amendment. Except as otherwise expressly provided by this
Amendment Agreement, all of the terms, conditions and provisions of the
Employment Agreement shall continue in full force and effect. This Amendment
Agreement and the Employment Agreement shall be read and construed as one
instrument.
(b) Counterparts. This Amendment Agreement may be executed by the parties
in separate counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
agreement. In pleading or proving this Amendment
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Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
(c) Captions. The captions of sections or subsections of this Amendment
Agreement are for reference only and shall not affect the interpretation or
construction of this Amendment Agreement.
(d) Construction. The language used in this Amendment Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction shall be applied against either party.
(e) Governing Law. This Amendment Agreement shall to the maximum lawful
extent be governed by and interpreted and construed in accordance with the
internal laws of the State of Illinois, as applied to contracts under seal made,
and entirely to be performed, within Illinois, and without reference to
principles of conflicts or choice of law.
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IN WITNESS WHEREOF, each of the Company and the Employee has executed and
delivered this First Amendment to Employment, Non-Competition and Stock
Repurchase Agreement as an agreement under seal as of the date first above
written.
COMPANY: IMPAC GROUP, INC.
By /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: President
EMPLOYEE: /s/ Xxxxxxx Xxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxx
