AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement")
entered into by and between XXXXXX OFF, a resident of the Commonwealth of
Pennsylvania ("Executive"), and CHECKPOINT SYSTEMS, INC., a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania
("Company") is effective January 1, 2006.
WHEREAS, Company has an Employment Agreement with Executive commencing
on August 15, 2002 (the "Prior Agreement");
WHEREAS, in recognition of Executive's contributions to Company's
success and accomplishments during his tenure as President and Chief Executive
Officer and Chairman of Company, the Board of Directors of Company ("Board of
Directors") wishes to have the Company retain Executive and obtain his
commitment to continue to serve as President and Chief Executive Officer of
Company on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:
1. Employment and Term. Executive hereby agrees to be employed as President and
Chief Executive Officer, and Company hereby agrees to retain Executive as
President and Chief Executive Officer. By executing this Agreement the Company
confirms that the Board of Directors has approved this Agreement and has elected
Executive Chairman of the Board of Directors effective as of the date hereof.
The term of Executive's employment as President and Chief Executive Officer
under this Agreement (the "Term") shall be the period commencing on January 01,
2006 and ending on December 31, 2008. The Prior Agreement is hereby terminated
and superseded in its entirety by this Agreement
2. Duties. During the Term, Executive will have the titles of President and
Chief Executive Officer of Company. Executive shall report to and receive
instructions from Company's Board of Directors and shall assume such duties and
responsibilities as may be reasonably assigned to Executive from time to time by
the Board of Directors provided such duties are of a nature customarily assigned
to directors, presidents and chief executive officers of public companies
similarly situated. Without limitation, Executive shall have full authority and
discretion relating to the general and day-to-day management of the affairs of
the Company including, but not limited to, finances and other financial matters,
compensation matters (other than with respect to the compensation of Executive,
himself, if any, and the other executive officers of the Company which shall be
determined by the Compensation Committee of the Board of Directors), personnel
matters (other than such matters that relate to Executive himself), budgeting,
operations, intellectual property, investor relations, retention of
professionals and strategic planning and implementation. Executive will be the
most senior executive officer of the Company and all other executives and
businesses of the Company will report to Executive or his designee. The
foregoing language shall not be construed so as to limit the duties and
responsibilities of the Board of Directors as described in the Company's
Articles of Incorporation and Bylaws.
3. Other Business Activities. Executive shall serve Company faithfully and to
the best of his ability and shall devote his full business time, attention,
skill and efforts to the performance of the duties required by or appropriate
for his position as President and Chief Executive Officer. In furtherance of the
foregoing, and not by way of limitation, for so long as he remains President and
Chief Executive Officer of Company, Executive shall not directly or indirectly
engage in any other business activities or pursuits, except for those arising
from positions held as of August 15, 2002 as a director or otherwise with
charitable or business organizations, as identified by Executive to the Board of
Directors or such other activities as would not materially interfere with
Executive's ability to carry out his duties under this Agreement.
Notwithstanding the foregoing, Executive shall be permitted to engage in
activities in connection with (i) service as a volunteer, officer or director or
in a similar capacity of any charitable or civic organization, (ii) managing
personal investments, and (iii) serving as a director, executor, trustee or in
another similar fiduciary capacity for a non commercial entity; provided,
however, that any such activities do not materially interfere with Executive's
performance of his responsibilities and obligations pursuant to this Agreement.
4. Base Salary. The Company shall pay Executive a salary at the annual rate of
Seven Hundred and Sixty Seven Thousand, Five hundred Dollars ($767,500.00) (the
"Base Salary"), payable pursuant to the Company's normal practice, but no less
frequently than monthly. The Base Salary shall be inclusive of all applicable
income, Social Security and other taxes and charges which are required by law or
requested to be withheld by Executive and which shall be withheld and paid in
accordance with Company's normal payroll practice for its similarly-situated
executives as in effect from time to time. The Board of Directors, in
consultation with Executive, shall periodically review Executive's Base Salary
during the Term, at least annually (at times according to its customary
practice) for increases based on Executive's performance and other relevant
factors.
5. Annual Incentive Compensation. Executive shall participate in an annual
incentive compensation program(s) to be developed by the Board of Directors
which will enable Executive to earn incentive compensation up to a maximum of
One Hundred Percent (100%) of Base Salary provided specified goals and
objectives identified by the Board of Directors in consultation with Executive
are achieved. Such goals and objectives shall be identified no later than the
end of the first quarter of each calendar year and shall be consistent with the
Company's budgets and business plans which are reasonably achievable. Any
compensation payable to Executive pursuant to this Section shall be paid to
Executive no later than the date of publication of the Company's audited
financial statements for the prior fiscal year, whether or not Executive is then
employed by the Company, except as otherwise expressly limited in this
Agreement.
6. Long Term Compensation. Executive shall be granted Long Term Compensation at
the discretion of the Board under the Company's Omnibus Plan and existing
compensation practices. Long Term Compensation under the Company's Omnibus Plan
can include, but is not limited to Stock Options, Long Term Incentive Program
(LTIP) awards, Restricted Stock Awards, Stock Appreciation Rights (SARS), or
other awards as determined by the Board of Directors.
6.1. Long Term Compensation.
(a) Grants of Long Term Compensation to Executive will vest according to the
plans associated with the grants.
(b) Notwithstanding paragraph (a) of this Section 6.1, the Long Term
Compensation shall become 100% vested upon Executive's termination of employment
on account of death or Disability, termination of employment by Company Without
Cause, termination of employment by Executive For Good Reason, or upon a Change
in Control, as each such term is defined in Section 10.3.
(c) In the event of Executive's termination of employment during the Term of
this Agreement for any reason other than a termination for Cause, the Long Term
Compensation that is vested and exercisable on the date of such termination of
employment shall expire on the fifth annual anniversary of the date of such
termination of employment.
6.2. Anti-Dilution Adjustments. The number or type of shares or other property
subject to the Long Term Compensation and the exercise price of the Long Term
Compensation shall be appropriately and proportionately adjusted by the Board of
Directors if the class of securities which are subject to the Long Term
Compensation are (i) exchanged for or converted into cash, property or a
different number or kind of shares or securities as a result of a
reorganization, merger, consolidation, recapitalization, restructuring or
reclassification, or (ii) if the number of securities of the class of securities
then subject to the Long Term Compensation are increased or decreased or if
cash, property or shares or securities are distributed in respect of such
subject securities as a result of a dividend (other than a regular, quarterly
cash dividend) or other distribution, stock split, reverse stock split, spin-off
or the like.
6.3. Tax Withholding. Executive shall pay in cash or make other arrangements
satisfactory to the Board of Directors for the satisfaction of any withholding
tax obligations that arise by reason of exercise, vesting or payment of the Long
Term Compensation. The Long Term Compensation shall be exercisable (if
applicable), in whole or in part in cash, by surrender of shares previously
acquired or through a cashless exercise in accordance with the terms of the
Company's plan. Company shall not be required to issue shares of common stock or
to recognize the disposition of such shares until such obligations are
satisfied.
7. Other Benefits.
(a) Pension Plans. Executive shall be entitled to participate in all tax-
qualified and non-tax-qualified pension plans maintained or contributed to by
Company or for the benefit of its executives (collectively, the "Company Pension
Plans"), in accordance with the terms of such Company Pension Plans as they may
be amended from time to time in the discretion of the Company.
(b) Medical Insurance. During the Term of this Agreement, Executive shall be
entitled to participate in any medical and dental insurance plans generally
available to the senior management of Company, as such plans may be in effect
from time to time. After termination of Executive's employment with Company
other than on account of termination by Company for Cause or Executive Without
Good Reason, Executive, his spouse, and his eligible dependents or survivors
shall be entitled to continue to participate in such plans for life on the terms
generally applied to actively employed senior management of Company, including
any employee cost-sharing provisions. To the extent the terms and conditions of
the aforesaid plans do not permit participation by Executive, his spouse, his
dependents, or his survivors, Company shall arrange to provide Executive, his
spouse, his dependents, or his survivors with the after-tax economic equivalent
of such continued coverage. In connection with such post retirement benefits, at
age 65, or whenever Medicare is available, Medicare will become the primary
insurance and the company will provide supplemental coverage so that the
coverage is equal to that of actively employed senior management of Company.
(c) Other Benefit Plans. Executive shall be entitled to receive or participate
in such further savings, deferred compensation, health or welfare benefit plans
offered to Company's senior management generally, in accordance with the terms
of such plans as they may be amended from time to time in the discretion of the
Company.
(d) Perquisites; Expenses. The Company agrees to promptly reimburse Executive
for all reasonable business expenses incurred by Executive in performing his
duties pursuant to this Agreement, in accordance with Company's reimbursement
policies generally applicable to management personnel. During the Term of this
Agreement, Company agrees to provide Executive with such perquisites as are
generally made available to management personnel from time to time, including
the perquisites provided as of the date the Board of Directors approves this
Agreement. The Company acknowledges that Executive has obtained ownership in a
fractional jet program at his own expense for personal use. In the event that
Executive uses his personal aircraft for business travel, Executive may xxxx the
Company for one first class, round trip airfare to the destination. In the event
that Executive's spouse accompanies Executive to the business function,
Executive can xxxx a second first class round trip airfare to the company.
(e) Vacation. Executive shall be entitled to six (6) weeks paid vacation
annually, and to cash compensation in respect of accrued but unused vacation
days if Executive is terminated under the terms hereof, for the calendar year in
which such termination occurs.
(f) Severance Upon Expiration of Term. Commencing at least nine (9) months prior
to the expiration of the Term of this Agreement, the Board of Directors and
Executive shall negotiate in good faith to extend the Term of Executives'
employment pursuant to terms and conditions similar to this Agreement. In the
event that the parties are unable to agree, then upon the expiration of the Term
of this Agreement, Executive shall receive, in one lump sum payment, an amount
equal to one (1) times the sum of the Base Salary as in effect as of the date of
the expiration of the Term of this Agreement and any other compensation received
by Executive pursuant to any bonus or incentive plan during the immediately
preceding year, in addition to any other amounts due to Executive pursuant to
the terms hereof. Any Long Term Compensation granted to the Executive in the (9)
month period referred to in the first sentence of this Section 7(f), shall
expire immediately. However, all other Long Term Compensation and Stock Options
pursuant to this Agreement shall vest immediately.
8. Nondisclosure of Confidential Information.
(a) Executive and Company acknowledge that Executive will, in the course of his
employment, come into possession of confidential, proprietary business and
technical information, and trade secrets of Company and its Affiliates (the
"Proprietary Information"). Proprietary Information includes, but is not limited
to, the following:
o Business procedures. All information concerning the way Company and
its Affiliates conduct their business, which is not publicly
available or generally known in the industry or trade in which
Company or its Affiliates compete (such as Company contracts,
internal business procedures, controls, plans, licensing
techniques and practices, supplier, subcontractor and prime contractor
names and contacts and other vendor information, computer system
passwords and other computer security controls, financial information,
distributor information, and employee data) and the physical
embodiments of such information (such as check lists, samples, service
and operational manuals, contracts, proposals, printouts,
correspondence, forms, listings, ledgers, financial statements,
financial reports, financial and operational analyses, financial and
operational studies, management reports of every kind, databases,
employment or personnel records, and any other written or machine-
readable expression of such information as are filed in any tangible
media).
o Marketing Plans and Customer Lists. All information which is not
publicly available or generally known in the industry or trade in
which Company or its Affiliates compete pertaining to Company's and its
Affiliates' marketing plans and strategies; forecasts and projections;
marketing practices, procedures and policies; goals and objectives;
quoting practices, procedures and policies; and customer data including
the customer list, contracts, representatives, requirements and needs,
specifications, data provided by or about prospective customers, and
the physical embodiments of such information.
o Business Ventures: All information which is not publicly available
or generally known in the industry or trade in which Company or
its Affiliates compete concerning new product development,
negotiations for new business ventures, future business plans, and
similar information and the physical embodiments of such
information.
o Software. All information relating to Company's and its
Affiliates' software or hardware in operation or various stages of
research and development, which is not publicly available or
generally known in industry or trade in which Company or its
Affiliates compete and the physical embodiments of such
information.
o Litigation. Information which is not publicly available or
generally known in the industry or trade in which Company or its
Affiliates compete regarding litigation and potential litigation
matters and the physical embodiments of such information.
o Policy Information. Information which is not publicly available or
generally known in the industry or trade in which the Company
competes regarding the policies and positions that have been or
will be advocated by Company and its Affiliates with governmental
officials, the views of government officials toward such policies
and positions, and the status of any communications that Company
or its Affiliates may have with any government officials.
o Information Not Generally Known. Any information which (a) is not
available to the public or within the industry or trade in which
Company or its Affiliates compete, (b) gives Company or its
Affiliates a significant advantage over its or their competitors,
or (c) has significant economic value or potentially significant
economic value to Company or its Affiliates, including the
physical embodiments of such information.
o "Proprietary Information" does not include (i) information which
at the time of disclosure or thereafter is in the public domain or
is already possessed by Executive, free of any confidentiality
obligation, (ii) information disclosed to Executive in good faith
by a third party who has an independent right to such information
and who discloses the same to Executive, free of any
confidentiality obligation, (iii) information which is
independently developed by Executive, (iv) information which the
Company generally discloses to third parties without imposing
obligations of confidentiality thereon, and (v) information known
by Executive prior to entering into this Agreement.
(b) Executive acknowledges that the Proprietary Information is a valuable and
unique asset of Company and its Affiliates. Executive agrees that he will not,
at any time during his employment or for a period of two (2) years after the
termination of his employment with Company, without the prior written consent of
Company or its Affiliates, as applicable, either directly or indirectly divulge
any Proprietary Information for his own benefit or for any purpose other than
the exclusive benefit of Company and/or its Affiliates.
9. Agreement Not to Compete.
(a) Executive agrees that he shall not compete with Company or its Affiliates
for the Restricted Period. The Restricted Period is defined as the period
beginning on the date hereof and ending (i) if Executive is terminated for Cause
(as defined in Section 10.4(a)) or Executive terminates this Agreement Without
Good Reason (as defined in Section 10.2(b)), on the date which is thirty (30)
months following the date of termination, (ii) if this Agreement is terminated
by the Company for any reason other than Cause or Executive for Good Reason, on
the date of such termination, and (iii) if this Agreement terminates due to the
expiration of the Term, on the date which is twelve (12) months following the
expiration of the Term.
(b) For the purposes of this Section 9, "compete" shall mean directly or
indirectly through one or more intermediaries (i) working or serving as a
director, officer, employee, consultant, agent, representative, or in any other
capacity, with or without compensation, on behalf of one or more entities
engaged in the Company's Business (as defined below) in any country where
Company (including any Affiliate) either engages in the Company's Business at
the time of Executive's termination or where Company, at the time of Executive's
termination, has developed a business plan or taken affirmative steps to engage
in the Company's Business, (ii) soliciting any employees of the Company other
than a general solicitation via any communication medium directed generally to
the public at large or to industry participants or if Executive's employer
solicited such employee without input or encouragement from Executive, and/or
(iii) inducing any customer or business partner of the Company to breach a
contract with the Company or otherwise cease doing business with the Company or
any principal for whom the Company acts as agent to terminate such agency
relationship. For purposes of this provision, the term "the Company's Business"
shall mean any business activity or line of business similar to the type of
business conducted by Company, and/or its Affiliates at the time of Executive's
termination of employment or which Company, and/or its Affiliates at the time of
Executive's termination of employment or within one year prior thereto have
developed a business plan or taken affirmative steps to enter into or conduct.
Executive expressly agrees that the markets served by Company and its Affiliates
extend worldwide and are not dependent on the geographic location of the
executive personnel or the businesses by which they are employed and that the
restrictions set forth in this Section 9 are reasonable and are no greater than
are required for the protection of Company, and its Affiliates. For purposes of
this Agreement, the term "Affiliate" shall be deemed to refer to Company, and
any entity (whether or not existing on the date hereof) controlling, controlled
by or under common control with Company.
10. Termination. Executive's employment hereunder may be terminated during the
Term upon the occurrence of any one of the events described in this Section 10
upon fifteen days prior written notice to Executive. Upon termination, Executive
shall be entitled only to such compensation and benefits as described in this
Section 10.
10.1. Disability and Death.
(a) Disability. If Executive becomes physically or mentally disabled to such an
extent that he has not been able to perform the duties set forth in Section 2 of
this Agreement, with or without a reasonable accommodation, for a period of more
than 180 days, either consecutively or within any 365-day period ("Disability"),
Company may terminate Executive's employment hereunder. The determination of
whether Executive has a Disability under this Agreement shall be made by the
Board of Directors, which shall consider the information presented by
Executive's personal physician and by any other advisors, including any other
physician, which the Board of Directors determines appropriate. The
determination of the Board of Directors shall be final and binding, unless it is
determined to have been arbitrary and capricious. If the employment of Executive
terminates during the Term due to the Disability of Executive, Company shall
provide to Executive (i) whatever benefits are available to him under any
disability benefit plan(s) applicable to him at the time of such termination to
the extent Executive satisfies the requirements of such plan(s), and (ii) the
payments set forth in Section 10.1.(c).
(b) Death. If Executive dies during the Term, Company shall pay to Executive's
executors, legal representatives or administrators the payments set forth in
Section 10.1.(c). Except as specifically set forth in this Section 10.1 or under
applicable laws, Company shall have no liability or obligation hereunder to
Executive's executors, legal representatives, administrators, heirs or assigns
or any other person claiming under or through him by reason of Executive's
death, except that Executive's executors, legal representatives or
administrators will be entitled to receive any death benefit payable to them as
beneficiaries under any insurance policy or other benefits plans in which
Executive participates as an employee of Company and to exercise any rights
afforded them under any benefit plan then in effect.
(c) Payment Upon Disability or Death. Upon termination of the employment of
Executive due to Death or Disability during the Term, Company shall pay an
amount equal to all accrued but unpaid Base Salary through the date of
termination of employment, plus a portion of the Average Annual Incentive
Compensation (as defined in Section 10.2(d) below) pro-rated for the year
through the date of termination.
10.2. Termination By Company Without Cause; Termination By Executive For
Good Reason.
(a) Termination By Company Without Cause. The Company may terminate
Executive's employment hereunder at any time for any reason other than Cause,
Disability or Death upon thirty (30) days written notice to Executive
("Termination Without Cause").
(b) Termination By Executive For Good Reason. Executive may terminate his
employment hereunder at any time for Good Reason ("Termination for Good Reason")
For purposes of this Agreement, Good Reason shall mean (i) a material reduction
in the position or responsibilities of Executive, provided that a Change in
Control (including the fact that the Company's stock is not publicly held or is
held or controlled by a single stockholder as a result of a Change in Control)
shall of itself be deemed a material reduction in the position or
responsibilities of Executive; (ii) a reduction in Executive's Base Salary or a
material reduction in Executive's compensation arrangements or benefits;
(iii) a substantial failure of Company to perform any material provision of
this Agreement; (iv) a relocation of Company's executive offices to a distance
of more than seventy-five (75) miles from its location as of the date of this
Agreement,unless such relocation results in Company's executive offices being
closer to Executive's then primary residence or does not substantially
increase the average commuting time of Executive; and (v) if Executive ceases
involuntarily (other than by reason of death, disability or Termination for
Cause) to be the Chairman of the Board of Directors.
(c) In the event of a Termination Without Cause or a Termination For Good
Reason, Company shall pay to Executive within forty-five (45) days after
termination an amount equal to all accrued but unpaid Base Salary through the
date of termination of employment, plus a portion of the Average Annual
Incentive Compensation pro-rated for the year through the date of termination,
plus the Multiplier times the Compensation Amount (as such terms are defined in
Section 10.2(d) below). In addition, upon Executive's Termination Without Cause
or Termination For Good Reason, the Long Term Compensation shall fully vest and
be exercisable in accordance with Section 6.1(c).
(d) The Multiplier is defined as two and one-half (2-1/2). The Compensation
Amount is defined as the sum of (i) the annual Base Salary of Executive as in
effect immediately prior to Executive's termination of employment, and (ii) the
Average Annual Incentive Compensation. The Average Annual Incentive Compensation
shall be the average of the Annual Incentive Compensation earned for the two
preceding calendar years. For purposes of determining the Average Annual
Incentive Compensation earned by Executive in any past year, any non-cash
compensation awarded to Executive shall be included as annual incentive
compensation only if specifically designated as such by the Board of Directors,
and such non-cash compensation shall be valued by such method as the Board of
Directors in its discretion shall determine, which may be the manner in which
such compensation is valued for proxy reporting purposes.
10.3. Change in Control.
(a) For purposes of this Agreement, "Change in Control" shall mean an
occurrence of one or more of the following events:
(i) an acquisition of any voting securities of Company (the "Voting
Securities") by any "person" or "group" (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934) other than an employee
benefit plan of Company, immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 under the Exchange Act) of more
than fifty percent (50%) of the combined voting power of Company's then
outstanding Voting Securities; or
(ii) within any 18-month period, the individuals who were directors of the
Company as of the date the Board of Directors approved this Agreement (the
"Incumbent Directors") ceasing for any reason other than death, disability,
retirement or by reason of the plan adopted by the Board of Directors on even
date herewith to expand the number of members of the Board to constitute at
least a majority of the Board of Directors, provided that any director who was
not a director as of the date the Board of Directors approved this Agreement
shall be deemed to be an Incumbent Director if such director was appointed or
nominated for election to the Board of Directors by, or on the recommendation or
approval of, at least a majority of directors who then qualified as Incumbent
Directors, provided further that any director appointed or nominated to the
Board of Directors to avoid or settle a threatened or actual proxy contest shall
in no event be deemed to be an Incumbent Director; or
(iii) satisfaction of all conditions to a merger, consolidation, or
reorganization involving Company that results or would result in the
stockholders of Company immediately before such merger, consolidation or
reorganization owning, directly or indirectly, immediately following such
merger, consolidation or reorganization, less than fifty percent (50%) of the
combined voting power of the corporation which survives such transaction as the
ultimate parent entity, unless such merger, consolidation or reorganization is
not thereafter consummated.
(iv) a sale of all or substantially all of the assets of Company.
(b) If, as a result of payments provided for under or pursuant to this
Agreement together with all other payments in the nature of compensation
provided to or for the benefit of Executive under any other agreement in
connection with a Change in Control, Executive becomes subject to taxes of any
state, local or federal taxing authority that would not have been imposed on
such payments but for the occurrence of a Change in Control, including any
excise tax under Section 4999 of the Internal Revenue Code of 1986 (the "Code")
and any successor or comparable provision, then, in addition to any other
benefits provided under or pursuant to this Agreement or otherwise, Company
(including any successor to Company) shall pay to Executive at the time any such
payments are made under or pursuant to this or the other agreements, an amount
equal to the amount of any such taxes imposed or to be imposed on Executive (the
amount of any such payment, the "Parachute Tax Reimbursement"). In addition,
Company (including any successor to Company) shall "gross up" such Parachute Tax
Reimbursement by paying to Executive at the same time an additional amount equal
to the aggregate amount of any additional taxes (whether income taxes, excise
taxes, special taxes, employment taxes or otherwise) that are or will be payable
by Executive as a result of the Parachute Tax Reimbursement being paid or
payable to Executive and/or as a result of the additional amounts paid or
payable to Executive pursuant to this sentence, such that after payment of such
additional taxes Executive shall have been paid on a net after-tax basis an
amount equal to the Parachute Tax Reimbursement. The amount of any Parachute Tax
Reimbursement and of any such gross-up amounts shall be determined by Company's
independent auditing firm, whose determination, absent manifest error, shall be
treated as conclusive and binding absent a binding determination by a
governmental taxing authority that a greater amount of taxes is payable by
Executive.
10.4. Termination For Cause; Termination By Executive Without Good Reason.
(a) Termination for Cause. The Company may terminate the employment of
Executive for Cause at any time during the Term. For purposes of this Agreement,
Cause shall mean that Executive has committed an act of Misconduct (as defined
below) or that there has been a willful and continuing failure of Executive to
perform substantially his obligations under this Agreement, other than as a
result of Executive's Death or Disability. For purposes of this Agreement,
"Misconduct" shall mean: (i) embezzlement, fraud, or breach of fiduciary duty by
Executive against the Company; (ii) personal dishonesty of Executive materially
injurious to Company; (iii) an unauthorized and intentional disclosure of any
Proprietary Information in breach of Executive's duty of loyalty; (iv)
conviction of, or entering a plea of nolo contendere or guilty to, a felony
criminal offense; or (v) competing with the Company while employed by the
Company or during the Restricted Period, in contravention of Section 9.
(b) Termination By Executive Without Good Reason. Executive may terminate his
employment hereunder at any time Without Good Reason (as defined in Section
10.2(b)).
(c) In the event Executive's employment with Company is terminated by Company
for Cause or by Executive Without Good Reason, Executive shall receive all
accrued but unpaid Base Salary and benefits as of the effective date of
Termination. In the event Executive's employment with Company is terminated by
the Company for Cause or by Executive during the Term of this Agreement Without
Good Reason, Executive shall forfeit all unvested Long Term Compensation granted
under this Agreement.
11. Other Agreements. Executive represents and warrants to Company that:
(a) There are no restrictions, agreements or understandings whatsoever to
which Executive is a party or by which he is bound that would prevent or make
unlawful Executive's execution of this Agreement or Executive's employment
hereunder, or which is or would be inconsistent or in conflict with this
Agreement or Executive's employment hereunder, or would prevent, limit or impair
in any way the performance by Executive of his obligations hereunder.
(b) Executive shall disclose the existence and terms of the restrictive
covenants set forth in this Agreement to any employer by whom Executive may be
employed during the Term (which employment is not hereby authorized) or during
the Restricted Period as defined in the Agreement Not to Compete by and between
Executive and Company set forth in Section 9 hereof.
12. Survival of Provisions. The provisions of this Agreement shall survive
the termination of Executive's employment hereunder and the payment of all
amounts payable and delivery of all post-termination compensation and benefits
pursuant to this Agreement incident to any such termination of employment.
13. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon Company and its successors or permitted assigns and
Executive and his executors, administrators or heirs. The Company shall require
any successor or successors expressly to assume the obligations of Company under
this Agreement. The Company's failure to obtain the agreement of any successor
or assign to assume the obligations of this Agreement shall be considered "Good
Reason" for purposes of Section 10.2(b). For purposes of this Agreement, the
term "successor" shall include the ultimate parent corporation of any
corporation involved in a merger, consolidation, or reorganization with or
including the Company that results in the stockholders of Company immediately
before such merger, consolidation or reorganization owning, directly or
indirectly, immediately following such merger, consolidation or reorganization,
securities of another corporation, regardless of whether any such merger,
consolidation or reorganization is deemed to constitute a Change in Control for
purposes of this Agreement. Executive may not assign any obligations or
responsibilities under this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of Company. At any time
prior to a Change in Control, Company may provide, without the prior written
consent of Executive, that Executive shall be employed pursuant to this
Agreement by any of its Affiliates or Company, and in such case all references
herein to the "Company" shall be deemed to include any such entity, provided
that (i) such action shall not relieve Company of its obligation to make or
cause an Affiliate to make or provide for any payment to or on behalf of
Executive pursuant to this Agreement, and (ii) Executive's duties and
responsibilities shall not be significantly diminished as a result thereof. The
Board of Directors may not assign any or all of its responsibilities hereunder
to any committee of the Board of Directors.
14. Executive Benefits.This Agreement shall not be construed to be in lieu of
or to the exclusion of any other rights, benefits and privileges to which
Executive may be entitled as an executive of Company under any retirement,
pension, profit-sharing, insurance, hospitalization or other plans or benefits
which may now be in effect or which may hereafter be adopted.
15. Board of Directors Service. Subject to re-election by a vote of
stockholders, Executive shall continue to serve on the Board of Directors
through the Term and shall tender his resignation from the Board of Directors
upon expiration of the Term, or upon any earlier termination of his employment,
which resignation may or may not be accepted.
16. Notices. All notices required to be given to any of the parties of this
Agreement shall be in writing and shall be deemed to have been sufficiently
given, subject to the further provisions of this Section 16, for all purposes
when presented personally to such party, or sent by facsimile transmission, any
national overnight delivery service, or certified or registered mail, to such
party at its address set forth below:
(a) If to Executive:
Xxxxxx Off
0 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
(b) If to Company:
Checkpoint Systems, Inc.
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Vice President and General Counsel
Such notice shall be deemed to be received when delivered if delivered
personally, upon electronic or other confirmation of receipt if delivered by
facsimile transmission, the next business day after the date sent if sent by a
national overnight delivery service, or three (3) business days after the date
mailed if mailed by certified or registered mail. Any notice of any change in
such address shall also be given in the manner set forth above. Whenever the
giving of notice is required, the giving of such notice may be waived in writing
by the party entitled to receive such notice.
17. Entire Agreement; Amendments. This Agreement and any other documents,
instruments or other writings delivered or to be delivered in connection with
this Agreement as specified herein constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede all
prior and contemporaneous agreements, understandings, and negotiations, whether
written or oral, with respect to the terms of Executive's employment by Company.
This Agreement may be amended or modified only by a written instrument signed by
all parties hereto.
18. Waiver. The waiver of the breach of any term or provision of this Agreement
shall not operate as or be construed to be a waiver of any other or subsequent
breach of this Agreement.
19. Governing Law. This Agreement shall be governed and construed as to its
validity, interpretation and effect by the laws of the Commonwealth of
Pennsylvania.
20. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
21. Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.
22. Counterparts. This Agreement may be executed in any number of counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute one and the same instrument.
23. Specific Enforcement; Extension of Period. Executive acknowledges that the
restrictions contained in Sections 8 and 9 hereof are reasonable and necessary
to protect the legitimate interests of Company and its Affiliates and that
Company would not have entered into this Agreement in the absence of such
restrictions. Executive also acknowledges that any breach by him of Sections 8
or 9 hereof will cause continuing and irreparable injury to Company for which
monetary damages would not be an adequate remedy. Executive shall not, in any
action or proceeding by Company to enforce Sections 8 or 9 of this Agreement,
assert the claim or defense that an adequate remedy at law exists. In the event
of such breach by Executive, Company shall have the right to enforce the
provisions of Sections 8 and 9 of this Agreement by seeking injunctive or other
relief in any court, and this Agreement shall not in any way limit remedies at
law or in equity otherwise available to Company. In the event that the
provisions of Sections 8 or 9 hereof should ever be adjudicated to exceed the
time, geographic, or other limitations permitted by applicable law in any
applicable jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, or other limitations permitted by
applicable law.
24. Arbitration. Any dispute or claim other than those referred to in Section
23, arising out of or relating to this Agreement or otherwise relating to the
employment relationship between Executive and Company (including but not limited
to any claims under Title VII of the Civil Rights Act of 1964, as amended; the
Americans with Disabilities Act; the Age Discrimination in Employment Act; the
Family Medical Leave Act; and the Employee Income Retirement Security Act) shall
be submitted to Arbitration, in Philadelphia County, Commonwealth of
Pennsylvania, and except as otherwise provided in this Agreement shall be
conducted in accordance with the rules of, but not under the auspices of, the
American Arbitration Association. The arbitration shall be conducted before an
arbitration tribunal comprised of three individuals, one selected by Company,
one selected by Executive, and the third selected by the first two. The parties
and the arbitrators selected by them shall use their best efforts to reach
agreement on the identity of the tribunal within ten (10) business days of
either party to this Agreement submitting to the other party a written demand
for arbitration. The proceedings before the tribunal shall take place within
twenty (20) business days of the selection thereof. Executive and Company agree
that such arbitration will be confidential and no details, descriptions,
settlements or other facts concerning such arbitration shall be disclosed or
released to any third party without the specific written consent of the other
party, unless required by law or court order or in connection with enforcement
of any decision in such arbitration. The parties shall equally divide the costs
of the arbitrators, and each party shall bear his or its attorneys' fees and
other costs, except that the arbitrators may specifically direct one party to
bear a greater portion or the entire cost of the arbitration, including all
attorneys fees, if the arbitrators determine that such party acted in bad faith.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the day and year first written above.
Attest: CHECKPOINT SYSTEMS, INC.
/s/ Xxxx X. Xxxxxxxxx By:/s/R. Xxxxx Xxxxxxx
------------------------------------ -----------------------------
Lead Outside Director
/s/Xxxxxx Off
-----------------------------
