Exhibit 10.6(d)
EMPLOYMENT AGREEMENT
This Agreement, effective as of January 31, 2003, is entered into by and
between Applied Graphics Technologies, Inc., a Delaware corporation ("AGT"), and
Xxxxxxx X. Xxxxxxxx, (hereinafter referred to as the "Employee"), an individual
presently residing at 00 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000. In
consideration of the mutual covenants set forth herein, the parties agree as
follows:
1. Employment Term. Subject to the further terms and conditions of this
Agreement, AGT shall continue to employ Employee for the period beginning on
January 31, 2003 (the "Commencement Date") and ending on January 30, 2005 (the
"Term"). After the Term, Employee shall be an employee "At will" and may be
terminated by AGT at any time with or without cause.
2. Compensation.
a. AGT will pay Employee a salary at the rate of Three Hundred
Thousand Dollars ($300,000) per annum ("Base Salary"). The Base Salary will be
reviewed annually and may, in the sole discretion of the Board of Directors, be
increased but may not be reduced.
b. Employee will be eligible to receive a performance bonus with
respect to 2003 and for future periods based upon the Management Incentive Plan
("MIP") approved by the Board with respect to each such period. In the event
Employee's employment shall terminate or expire for any reason other than for
"Cause" pursuant to paragraph 5(a) herein, after the end of any period with
respect to which an MIP bonus was based, but before said bonus was paid,
Employee shall be entitled to the full amount of said bonus to which he would
otherwise have been entitled had his employment not terminated or expired, such
bonus to be payable at the time, and in the manner, that MIP bonuses are paid to
comparable employees. In addition, Employee shall be eligible to receive any
additional bonus that may be approved by the Board of Directors in its sole
discretion.
c. The Base Salary and bonuses referred to above represent all of
Employee's cash compensation, and accordingly, Employee shall not be entitled to
any overtime, weekend or holiday compensation. All payments made pursuant to
this Agreement shall be less applicable withholdings and deductions.
d. Employee shall be eligible to participate in those insurance,
retirement and other benefits generally provided to AGT's other senior
executives of similar rank and tenure from time to time.
e. Employee shall be reimbursed for all reasonable travel and
entertainment expenses incurred in the furtherance of AGT's business, upon
submission by Employee of appropriate documentation in accordance with AGT's
policies as are in effect from time to time.
f. AGT shall provide Employee with an all-inclusive automobile
allowance of $800 per month.
3. Duties. Employee agrees to fulfill the duties of Senior Vice-President
and Chief Financial Officer and Treasurer as such duties are defined by AGT's
Board of Directors. In light of the requirements of the Company as determined by
the Board of Directors, it is understood that the Employee's duties may be
modified from time to time in the future. However, the Employee's duties must,
at a minimum, consist of those customarily performed by the Chief Financial
Officer. Employee's reporting relationship shall be as determined by the Board
of Directors in its sole discretion; provided that, unless and until the Board
determines otherwise,
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Employee shall report to Xxx Xxxxxxxxxx in his capacity as President and Chief
Operating Officer. Employee shall devote all of his business efforts to the
performance of his duties hereunder and shall do so to the best of his
abilities. The Employee's principal office, which is currently in New York,
shall be in a location determined by the Board of Directors. Employee will
travel both in the United States and abroad as necessary and appropriate to
fulfill his duties.
4. Vacation. Employee shall be entitled to four (4) weeks vacation during
each year of the Term, to be taken at such times as shall be agreed between
Employee and the entity or person to whom he reports. Vacation days will accrue
and be paid in accordance with AGT's policies as are in effect from time to
time.
5. Termination. Subject to the provisions of this Paragraph 5, either AGT
or
Employee may terminate this Agreement prior to the expiration of the Term, as
provided for hereinbelow.
(a) AGT shall have the right to terminate this Agreement for Cause (as
hereinafter defined), whereupon the Term shall be at an end.
Employee shall have the right to terminate this Agreement for Good
Reason (as hereinafter defined), whereupon the Term shall be at an
end. If AGT terminates this Agreement for other than Cause or
Employee terminates this Agreement for Good Reason, then AGT shall
pay and/or provide to Employee the following:
(i) all accrued but unpaid amounts payable hereunder with respect
to the period prior to the date of termination (including,
without limitation, base
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salary, any unpaid bonus which may have been awarded to or
earned by Employee, unused vacation pay and reimbursable
expenses); and
(ii) The sum of (A) all Base Salary which would have become payable
to Employee under this Agreement as if this Agreement had not
been terminated and Employee remained employed by AGT for a
period of 12 months following such termination, (the
"Severance Period"), and (B) the aggregate amount by which all
then unvested stock options are "in the money" on the date of
termination, said amount to be calculated by subtracting from
the market value of AGT stock as of the date of termination
the applicable exercise prices of the stock options;
(iii) The amounts referred to in subparagraphs (i) and (ii) above
are sometimes hereinafter referred to as the "Severance
Payments". The Severance Payments shall be paid in a lump sum
(without present value discount) within thirty (30) days after
the date of termination, except that any unpaid MIP bonus to
which Employee is entitled pursuant to paragraph 2(b) herein
shall be paid as provided in said paragraph. As a condition to
Employee's receipt of the Severance Payments, Employee will be
required to execute a Release in the form attached hereto as
SCHEDULE OF RELEASE; and
(iv) during the maximum period permitted by COBRA, but in no event
past the end of the Severance Period, AGT will provide
Employee, at AGT's expense, with COBRA coverage. During the
Severance Period, Employee
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shall not be entitled to any other benefits provided in
paragraph 2(d) except any conversion and other rights which
survive termination of employment under any group life,
disability insurance and/or other benefit plans of AGT in
which Employee participates or participated as an employee of
AGT. Anything contained herein to the contrary, AGT's
obligation to provide COBRA benefits shall terminate upon the
date the Employee is first eligible for medical insurance
related to his new employment.
(b) If AGT terminates this Agreement for Cause, or if Employee dies or
becomes permanently disabled (as hereinafter defined), then AGT
shall pay to Employee all accrued but unpaid amounts hereunder with
respect to the period prior to the date of termination, death or
disability (including, without limitation, Base Salary, unused
vacation pay and reimbursable expenses and, in the event Employee
dies or becomes permanently disabled, any unpaid bonus which may
have been awarded to or earned by Employee); said amounts to be paid
to Employee (or his estate) within 30 days after the date of such
termination, death or disability, except that any unpaid MIP bonus
to which Employee is entitled pursuant to paragraph 2(b) herein
shall be paid as provided in said paragraph.
(c) For purposes of this Agreement, "Cause" shall mean: (i) indictment
for, conviction of or pleas of guilty or nolo contendre to any
felony (other than an offense involving a motor vehicle) or business
related misdemeanor; (ii) theft, fraud or embezzlement; (iii) an act
of gross neglect or gross misconduct; (iv)
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habitual drug or alcohol abuse; (v) excessive absenteeism not
related to illness; (vi) the intentional failure to perform assigned
duties; (vii) a material breach of any of the provisions of this
Agreement; (viii) the commission of any other action with the intent
to harm or injure AGT, its parents, subsidiaries or affiliates;
which, in the case of clauses (v), (vi), (vii) and/or (viii) above,
are not remedied by Employee within thirty (30) days after receipt
by Employee of written notice from the Chairman of the Board of
Directors of AGT (the "Board").
(d) For purposes of this Agreement, "Good Reason" shall mean (i) if any
payment to be made by AGT to Employee is not made when due and
remains unpaid for fifteen (15) days after written notice from
Employee, and/or (ii) any other material breach by AGT of this
Agreement which is not remedied within thirty (30) days after
receipt of written notice thereof to AGT by Employee (including,
without limitation, any demotion in Employee's title or position
and/or any material diminution of Employee's powers, duties or
responsibilities; provided that, if Employee ceases to serve as
Treasurer and perform the duties of that office, such change in
status will not constitute "Good Reason" pursuant to this
subparagraph).
(e) "Permanent disability" shall mean physical or mental illness,
disability or disfigurement which renders Employee incapable of
performing his normal services hereunder for a continuous period of
8 weeks, or an aggregate of 16 weeks during any 52-week period. In
the event Employee is disabled less than such 8 or 16 weeks,
respectively, Employee shall nonetheless be entitled to full
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compensation during such period. In the event of termination as a
result of disability under 5(b) above, Employee shall, in addition
to any other payments or benefits hereunder, be entitled to receive
a severance payment pursuant to company policy, but not less than
one (1) year of Base Salary.
(f) In the event that, on January 30, 2005, (A) Employee is still
employed by AGT, and (B) for any reason whatsoever, AGT has failed
to offer to enter into a written agreement extending the term of
Employee's employment by AGT for a period of at least one (1) year
beyond January 30, 2005, upon terms at least as favorable to
Employee as those set forth herein, then AGT shall pay and/or
provide to Employee the following:
(i) all accrued but unpaid amounts payable hereunder with
respect to the period ending on January 30, 2005
(including, without limitation, base salary, any unpaid
bonus which may have been awarded to or earned by
Employee, unused vacation pay and reimbursable
expenses); and
(ii) all base salary which would have become payable to
Employee under this Agreement, as if this term of this
Agreement had not expired and Employee remained employed
by AGT for an additional period of one (1) year
following such expiration, (the "Continuation Period").
(iii) the amounts referred to in subparagraphs (i) and (ii)
above are
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sometimes hereinafter referred to as the "Continuation
Payments". The Continuation Payments shall be paid in a
lump sum (without present value discount) within thirty
(30) days after the date of the expiration of the Term
except that any unpaid MIP bonus to which Employee is
entitled pursuant to paragraph 2(b) herein shall be paid
as provided in said paragraph. As a condition to
Employee's receipt of the Continuation Payments,
Employee will be required to execute a Release in the
form attached hereto as SCHEDULE OF RELEASE; and
(iv) during the maximum period permitted by COBRA, but in no
event past the end of the Continuation Period, AGT will
provide Employee, at AGT's expense, with COBRA coverage.
During the Continuation Period, Employee shall not be
entitled to any other benefits provided in paragraph
2(d) except any conversion and other rights which
survive termination of employment under any group life,
disability insurance and/or other benefit plans of AGT
in which Employee participates or participated as an
employee of AGT. Anything contained herein to the
contrary, AGT's obligation to provide COBRA benefits
shall terminate upon the date the employee is first
eligible for medical insurance related to his new
employment.
(g) Employee shall not be obligated to seek or accept other employment
in mitigation
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of any amounts payable hereunder and the obtaining of any such other
employment shall in no event effect any reduction of AGT's
obligations to make the payments or, except as provided in
subsections (a)(iv) and (f)(iv) above, to provide the benefits
required hereunder."
6. Noncompetition, Nonsolicitation and Confidentiality. As a material
inducement to continue to employ him, Employee agrees to execute the
Noncompetition, Nonsolicitation and Confidentiality Agreement attached hereto as
Exhibit A, the terms of which are incorporated herein by reference.
7. Absence of Restrictions. Employee represents and warrants that he is
not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon him entering into this Agreement or performing
the duties called for by this Agreement.
8. Notices. All notices, consents and other communications required or
permitted to be given hereunder shall be in writing and delivered personally or
sent by certified or registered mail, postage prepaid, as follows:
a. if to Employee, to: Xxxxxxx X. Xxxxxxxx, 00 Xxxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
b. if to AGT, to: Chairman of the Board of Directors, 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, with a copy to
Xxxxxx X. Xxxxx, Chief Legal Officer, at 000 Xxxx 00xx Xxxxxx,
Xxxxx Xxxxx, Xxx Xxxx Xxx Xxxx 00000-0000.
Any notice so given shall be deemed received when delivered personally,
or, if mailed,
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three days after it is deposited, postage prepaid, by certified mail, in the
United States mail. Either party may change the address to which notices are to
be sent by giving written notice of such change of address to the other party in
the manner herein provided for giving notice.
9. General.
a. Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall be subject to resolution in
the state or federal courts in New York and shall be governed by and
construed and enforced in accordance with the laws of the State of
New York applicable to agreements made and to be performed entirely
in New York without giving effect to principles of conflicts of laws
thereof.
b. The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation
of this Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto concerning the subject
matter hereof, and supersedes all prior agreements, arrangements and
understandings between the parties hereto.
c. AGT may assign its rights and obligations under this Agreement to
any successor thereto or to any corporation or other entity
controlled, or under common control with AGT or any of its
affiliates. This Agreement is personal to employee, and neither this
Agreement nor any of Employee's rights or obligations hereunder may
be assigned, pledged or encumbered by him, without the prior written
approval of AGT.
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d. This Agreement may be amended, modified, superseded or canceled, and
the terms or covenants hereof may be waived, only by a written
instrument executed by both parties hereto, or, in the case of a
waiver, by the party waiving compliance. The failure of either party
at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the
same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or
construed as a further or continuing waiver of any such breach or
waiver of the breach of any other term or covenant in this
Agreement.
e. In the event that any one or more of the provisions of this
Agreement shall be determined to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired
thereby.
f. This Agreement may be executed in counterparts; each of which shall
be deemed to be an original but all of which together shall be
deemed to be one and the same instrument.
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g. Except with regard to employee's obligations under the
Noncompetition, Nonsolicitation and Confidentiality Agreement
attached hereto as Exhibit A, and with regard to AGT's obligations
under Paragraphs 5, this Agreement shall be of no further force and
effect and AGT shall have no further obligations hereunder after the
expiration or termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
shown below.
XXXXXXX X. XXXXXXXX APPLIED GRAPHICS TECHNOLOGIES, INC.
By: _____________________________ By: _______________________________
Dated: __________________________ Title: ____________________________
Dated: ____________________________
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