EXHIBIT 10.24.1
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Xxxx X. X'Xxxxx
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of January 1, 1991 ("Prior Agreement")
and wish to enter into this Agreement to amend and restate the Prior Agreement
as herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
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continue until terminated as hereinafter provided.
2. Position. Executive shall serve as President and Chief Executive
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Officer, at Employer's headquarters in Amherst, New York, or in such other, and
in such additional, senior management position or positions and/or in such other
location as Executive and Employer shall mutually agree. Executive hereby
accepts the employment specified herein and agrees, so long as he is employed
hereunder, to devote substantially his full time to the services required of him
in his employment, except for vacation time and reasonable periods of absence
due to sickness, personal injury or other disability. Executive agrees to use
his best efforts and judgment to advance the business and interests of Employer
in a manner consonant with the duties of his position.
3. Base Salary. So long as Executive is employed by Employer,
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Employer shall pay Executive an annual base salary of not less than $302,900
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
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shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
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Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
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(a) Termination by Employer for Cause or Disability.
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(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive,
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in a single lump sum payment, within 60 days after the effective date of such
termination of employment (i) his base salary as provided in Section 3, as the
same may have been increased by Employer's Board of Directors or Compensation
Committee, payable through such effective date; (ii) any bonuses earned but not
yet paid for any fiscal year completed prior to such effective date; and (iii)
any deferred salary, bonuses or other compensation, but subject to the terms of
any applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
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Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all
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benefits theretofore being provided to him as provided in Section 5; (iii) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary targets in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements. The foregoing and Section 9
of this Agreement shall be Executive's sole and exclusive remedy if, prior to a
Change in Control, his employment is terminated without Cause or Disability or
if he resigns as a result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
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(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder,
his employment shall terminate and Executive's estate shall be entitled to
receive all rights and benefits to which Executive would have been entitled had
his employment been terminated as described in Paragraph (c)(1) of this Section
6.
(d) Termination Following Change in Control.
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(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any
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corporation owned, directly or indirectly, by Employer or the
stockholders of Employer in substantially the same proportions as
their ownership of stock of Employer), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Employer
representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members by
a majority of that portion of the Board consisting of members who
were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting power
of the voting securities of Employer, or such surviving entity,
outstanding immediately after such merger or consolidation; or (b)
a merger or consolidation effected to implement a recapitalization
of Employer (or similar transaction) in which no "person" (as
defined above) acquires more than 35% of then-outstanding
securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
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the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) within 5 business days following such termination
Executive shall be entitled (in addition to all amounts to which
Executive would have been entitled had such termination been a
termination for Cause as described in Section 6(a)) to receive a
lump sum payment equal to the greater of (A) or (B):
(A) The following with respect to the period commencing on
the effective date of such termination and ending on the
expiration of 36 months after the Change in Control: (x)
Executive's highest monthly base salary annualized (i.e. the
Executive's highest monthly base salary multiplied by twelve
(12)) for any time in the five (5) years prior to such
termination; (y) the prorated portion (based on the portion
of the fiscal year served prior to termination) of the bonus
that Executive would have earned pursuant to Section 4 for
that fiscal year as if all primary targets in respect of
that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid or, if no such annual
bonus program is then in effect, the most recent annual
bonus awarded the Executive; or
(B) The product of three times (3) Executive's highest
monthly base salary on an annualized (i.e. the Executive's
highest monthly base salary multiplied by twelve (12)) for
any time in the five (5) years prior to such termination,
plus an amount equal to the product of three times (3) the
amount of the highest bonus paid to Executive at any time
during the five (5) fiscal years of Employer completed prior
to his termination of employment.
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and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after
thirty-six (36) months following a Change in Control: (i) for a reason other
than Cause or Disability, or (ii) if Executive resigns because of material
breach of the Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of
termination: (x) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (y)
all benefits theretofore being provided to him as provided in Section 5; (z) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary target in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements.
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(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to receive the payments and commence receiving the
benefits described in subparagraph (3) of this Section 6(d). "Good Reason"
shall mean the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially
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similar to those provided pursuant to Section 5 hereof at the
time of the Change in Control of Employer or the taking of any
action by Employer which would directly or indirectly materially
reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
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Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid to the Executive by
Employer (or any of its subsidiaries or successors) in fulfillment of any
applicable and binding statute or regulation which legally obligate Employer (or
its subsidiary or successor) to make a severance payment or payments to
Executive as a direct result of the termination of his employment, but not
including payments received by the Executive under any legally required social
programs in which employers are required to participate on behalf of their
employees, generally, such as U.S. Social Security or state-mandated
unemployment insurance car the equivalent thereof. In addition, the obligation
to make payments and provide benefits under this Agreement shall not be subject
to any reduction or offset due to the fact that Executive may receive or is
receiving retirement payments from Employer or distributions from Employer's
retirement plan(s), its successor or any other source, nor due to the fact that
the Executive is, or during the term or effectiveness of this Agreement may
become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments under
this Section 6, the amounts payable shall not be
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reduced by the amounts paid to Executive by another subsequent employer.
7. Funding. Employer may in its discretion establish a trust or
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other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
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Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
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Executive and Employer entered into an agreement as of September 5, 1989, and
amended and restated on December 31, 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1989 Agreement") which is
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1989 Agreement and under applicable law, in the event of
Executive's breach of the 1989 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1989 Agreement are in addition to any amounts payable under this
Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
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provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
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due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
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12. Arbitration. Except as provided in subparagraph (2) of Section
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6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Supplemental Executive Retirement Agreement. Executive's
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Supplemental Executive Retirement Agreement dated as of January 1, 1991 is
hereby terminated and cancelled.
14. Miscellaneous.
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(a) Amendments. This Agreement may not be altered, modified or
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amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
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include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and his personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
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Section 14, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
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the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
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(e) Severability. In the event that any one or more of the provisions
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of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
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each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
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this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Xxxx X. X'Xxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
If to Employer to:
International Imaging Materials, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
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are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
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State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
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between Employer and Executive regarding the
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subject matter hereof and supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Its: Chairman of the Board
/s/ Xxxx X. X'Xxxxx
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Xxxx X. X'Xxxxx
(Executive)
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