Exhibit 99(d)(5)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 2, 2000 (this "Agreement"),
between ADP Financial Information Services, Inc. (the "Company"), Xxxxxxxxxx
Graphics International, Inc. ("CGII"), Xxxxxxxxxx Graphics Inc. ("CGI") and
Xxxxxxx X. Xxxxxxxxxx (the "Employee").
WHEREAS, simultaneously with the execution of this Employment
Agreement, ADP, FIS Acquisition Corp. ("Purchaser") and CGII have entered into
an Agreement and Plan of Merger (as amended from time to time, the "Merger
Agreement"), pursuant to which ADP and Purchaser will acquire CGII (the
"Acquisition", which term includes the acquisition of more than 50% of the
CGII's shares of common stock through any transaction including, without
limitation, a tender offer);
WHEREAS, as a condition to the willingness of ADP and Purchaser to
enter into the Merger Agreement, each of ADP and Purchaser has required that the
Employee agree, and in order to induce ADP and Purchaser to enter into the
Merger Agreement, the Employee has agreed, to enter into this Employment
Agreement; and
WHEREAS, this Employment Agreement shall become effective upon the
consummation of the Acquisition and supersede the agreement dated April 13, 1998
(the "Prior Employment Agreement") between the CGI and the Employee.
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, the parties hereto agree as follows:
1. EFFECTIVE DATE; TERMINATION OF PRIOR AGREEMENT.
This Employment Agreement shall become effective upon the consummation
of the Acquisition (the "Effective Date"). Upon effectiveness of this Employment
Agreement, this Employment Agreement shall supersede the Prior Employment
Agreement which shall become null and void, except for provisions thereof that
by their terms survive termination. In the event the Merger Agreement is
terminated and the Acquisition is not consummated, this Employment Agreement
shall automatically terminate.
2. EMPLOYMENT; EMPLOYEE'S TITLE AND RESPONSIBILITIES.
(a) The Company hereby employs the Employee and the Employee hereby
agrees to enter into the employ of the Company, pursuant to the terms and
conditions of this Employment Agreement, until this Employment Agreement shall
be terminated as provided in Section 5(a) hereof (the "Employment Period").
During the Employment Period, the Employee shall serve as President of CGI and
shall have the duties and responsibilities commensurate with such position, and
such other duties and responsibilities with the Company and ADP may reasonably
be assigned from time to time by the Company. Employee shall perform his duties
hereunder at the direction, and subject to the authority and control, of the
Group President of the Company (or his designee) and in accordance with the
terms and conditions of this Employment Agreement.
(b) During the Employment Period, the Employee shall devote his full
business time, energy and skill, on a best efforts and exclusive basis, to the
business and affairs of the Company and ADP, and will use his full business
time, energy and skill to promote the business and interests of the Company and
ADP.
(c) The principal place of employment of Employee shall be within a
thirty mile radius of Jersey City, New Jersey or such other location as is
consented to by Employee. The duties shall not require Employee to relocate his
residence outside the state of New Jersey without his consent. It is, however,
distinctly understood and agreed that Employee may be required, in connection
with the performance of his duties, to work from time to time at other locations
designated by the Company or as required in connection with the business of the
Company.
3. BASE SALARY AND BENEFITS.
(a) During the Employment Period, the Company shall pay to the Employee
as compensation for the services to be provided by the Employee hereunder a base
salary of two hundred sixty-one thousand, seven hundred dollars ($261,700) per
annum (the "Base Salary"), payable bi-weekly. The Company shall review the
Employee's performance annually to determine if the Employee shall be granted an
increase in the Base Salary.
(b) During the Employment Period, the Employee shall be entitled to
participate in and shall be a beneficiary of all of ADP's then current pension,
medical and dental, life, accident and disability insurance, stock purchase and
stock option plans which ADP makes available to employees of the Company
generally, pursuant to the terms and conditions of such plans and arrangements
and in accordance with ADP's then current policies. The level and extent of the
Employee's participation under such plans and arrangements shall be equivalent
to that of other employees of the Company of comparable positions and seniority
(taking into account, for eligibility and vesting purposes, the Employee's
service with CGI prior to the Merger).
(c) During the Employment Period, in accordance with ADP's then current
policies, the Employee shall be entitled to receive reimbursement for all
authorized, reasonable expenses incurred by the Employee in the performance of
his duties hereunder, including, without limitation, reimbursement for
authorized travel and entertainment expenses.
(d) During the Employment Period, the Employee shall be entitled to the
number of days of vacation determined in accordance with ADP's then current
vacation policy.
(e) During the Employment Period, in accordance with ADP's then current
policies, the Employee shall be entitled to a monthly car allowance of $275. The
difference between Employee's current car allowance and the car allowance set
forth in this subsection (e) has been included in Employee's Base Salary.
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4. BONUS; STOCK OPTIONS.
(a) In addition to the Base Salary described in Section 3(a) hereof,
during the Employment Period, the Employee shall be eligible to receive an
annual cash bonus based upon the Employee's achievement of performance
objectives to be determined mutually by the Company and Employee each year (the
"Annual Cash Bonus"). The targeted Annual Cash Bonus for ADP's fiscal year ended
June 30, 2001 shall be 30% of the annual Base Salary, seventy-eight thousand,
five hundred dollars ($78,500), with a potential to earn up to 45% of the annual
Base Salary, one hundred seventeen thousand, eight hundred dollars ($117,800),
based, among other things, upon achievement of performance objectives.
Additionally, during the term of this Employment Agreement the Employee and the
Company shall establish "stretch" bonus goals with respect to the net operating
income component of the Employee's performance objectives thereby entitling the
Employee to an additional bonus of 200% of the bonus component related to that
performance objective. If the Annual Cash Bonus becomes payable, it will be paid
within ninety (90) days after the end of ADP's applicable fiscal year provided
that the Employee is an employee of the Company on the last day of such fiscal
year. Notwithstanding the foregoing, the pro-rated Annual Cash Bonus for the
portion of the Company's fiscal year ended June 30, 2000 that the Employee is
employed hereunder shall be paid together with the Annual Cash Bonus for the
Company's fiscal year ended June 30, 2001.
(b) As soon as practicable after the date hereof, the Company shall
recommend to ADP's stock option committee that the Employee receive an option to
purchase fifteen thousand (15,000) shares of ADP common stock which shall vest
in five equal installments over a five-year period from the date of grant and
shall be subject to the terms and conditions of such option grant.
5. TERMINATION OF EMPLOYMENT.
(a) The Employee's employment with the Company pursuant to this
Employment Agreement shall cease and terminate upon the earliest to occur of the
following dates (the "Employment Termination Date"): (i) the third anniversary
of the Effective Date, (ii) the date of death of the Employee or, in the event
the Employee shall be unable by reason of physical or mental disability to
continue the proper performance of his duties hereunder and such disability
shall have continued for a period of at least three (3) months (such
circumstances are referred to herein as "Disability"), the date of Disability,
(iii) the date that the Employee terminates his employment hereunder for any
reason, (iv) in the event that the Employee shall commit a criminal act, fail or
refuse to perform any obligation hereunder and such failure or refusal shall
continue during the ten (10) day period following the receipt by the Employee of
written notice from the Company or ADP of such failure or refusal, commit any
act of negligence in the performance of his duties hereunder and fail to take
appropriate corrective action during the ten (10) day period following the
receipt by the Employee of written notice from the Company or ADP of such
negligence, or commit any act of willful misconduct (such circumstances set
forth in this subsection (iv) are referred to herein as "Cause"), and the
Company or ADP shall elect to terminate the Employee's employment hereunder for
Cause, the date on which the Company or ADP shall give written notice to the
Employee of such election, and (v) the date the Company or
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ADP terminates the Employee's employment hereunder for any reason other than
as provided in Sections 5(a)(i)-(iv) hereof.
(b) If the Employee's employment is terminated during the Employment
Period as provided in Section 5(a)(ii) hereof, the Employee (or his beneficiary
or estate in the event of death of the Employee) shall be entitled to receive,
within thirty (30) days of such termination, in addition to any other benefits
to which the Employee is entitled pursuant to the terms of the employee benefit
plans of ADP applicable to the Employee, (i) Base Salary accrued to the
Employment Termination Date and (ii) all disability or death benefits payable in
accordance with the employee benefit plans of ADP in which the Employee is then
participating.
(c) If the Employee terminates his employment hereunder during the
Employment Period as provided in Section 5(a)(iii) hereof, the Employee shall be
entitled to receive, within thirty (30) days of such termination, in addition to
any other benefits to which the Employee is entitled pursuant to the terms of
any employee benefit plans of ADP applicable to the Employee, Base Salary
accrued to the Employment Termination Date.
(d) If the Company terminates the Employee's employment hereunder
during the Employment Period as provided in Section 5(a)(iv) hereof, the
Employee shall only be entitled to receive, within thirty (30) days of such
termination, in addition to any other benefits to which the Employee is entitled
pursuant to the terms of any employee benefit plans of ADP applicable to the
Employee, Base Salary accrued to the Employment Termination Date.
(e) If the Company terminates the Employee's employment hereunder
during the Employment Period as provided in Section 5(a)(v) hereof, the Employee
shall be entitled to receive, in addition to any other benefits which the
Employee is entitled pursuant to the terms of employee benefit plans of ADP
applicable to the Employee, Base Salary and Annual Cash Bonus payable when such
amounts would otherwise have been paid to Employee until the third anniversary
of the Effective Date. Any payments made to the Employee pursuant to this
Section 5(e) are expressly conditioned upon the Employee's execution of a
general release in favor of the Company, ADP and their respective affiliates.
(f) Notwithstanding anything to the contrary set forth herein, the
Company shall not be obligated to pay any amounts under this Employment
Agreement that would be deemed to be an "excess parachute payment" as defined in
the Internal Revenue Code Section 280G.
6. NON-COMPETITION; NON-DISCLOSURE; NON-HIRE; EXCLUSIVE RIGHTS.
(a) NON-COMPETITION. Subject to the last sentence of this Section 6(a),
the Employee agrees that during a period commencing on the date hereof and
ending 12 months after the Employment Termination Date (the "Non-Competition
Period"), he will not, except on behalf of the Company or ADP or any of their
respective affiliates, directly or indirectly, whether as an officer, director,
stockholder, investor, partner, proprietor, business associate, employee,
representative or otherwise, do any of the following acts: (i) provide services
which are competitive with the businesses or services of the Brokerage Services
Group of ADP (as such
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businesses are conducted on the date hereof or at any time during the
Non-Competition Period) (the "Businesses"), or promote, market, become or
acquire an interest in, or associate in a business relationship with, any
other person, corporation, firm, partnership or other entity whatsoever who
is or may be engaged in any line of business competitive with the Businesses
(a "Competitor") or (ii) solicit or refer, directly or indirectly, any
clients or prospective clients of any services and/or products which are
similar to those offered by the Company or ADP (at any time during the
Non-Competition Period) to another provider of such services, or (iii)
promote, market or participate in the sale, lease or licensing of any
equipment or software by which services and/or products similar to those
provided by the Company or ADP (at any time during the Non-Competition
Period) can be performed, to, for or with any person, corporation, firm,
partnership or other entity whatsoever. Notwithstanding anything to the
contrary contained herein, if the Company terminates the Employee's
employment hereunder pursuant to Section 5(a)(v) hereof, the "Non-Competition
Period" shall be defined as the period commencing on the date hereof and
ending on the fourth anniversary of the Effective Date.
Notwithstanding anything to the contrary contained herein, (i) the
foregoing provisions of this Section 6(a) shall not be deemed violated by the
purchase and/or ownership by Employee of shares of any class of equity
securities (or options, warrants or rights to acquire such securities, or any
securities convertible into such securities) representing (together with any
securities which would be acquired upon the exercise of any such options,
warrants or rights or upon the conversion of any other security convertible into
such securities) two percent (2%) or less of the outstanding shares of any such
class of equity securities of any issuer whose securities are traded on a
national securities exchange or listed by NASDAQ, the National Quotation Bureau
Incorporated or any similar organization; provided, however, that Employee not
be otherwise connected with or active in the business of the issuers described
in this Section 6(a), and (ii) Employee shall be permitted, after the Employment
Termination Date, to (A) provide consulting services to entities which are not
Competitors and (B) be employed on a full-time basis (i.e., not on an
independent contracting basis) by any person, firm, corporation, partnership or
other entity to provide for such entity in-house products or services that may
be deemed to be competitive with those offered by the Company only if such
products or services are used exclusively by such entity and are not directly or
indirectly marketed or sold by such entity for the use by any unrelated third
party; provided that in either case Employee complies with the provisions of
sub-sections (b), (c) and (d) of this Section 6 in connection therewith.
(b) NON-DISCLOSURE. The Employee agrees that he will not, directly or
indirectly, disclose, furnish or make accessible to any person, corporation,
firm, partnership or other entity whatsoever (except the Company or ADP or any
of their respective affiliates), or to any officer, director, stockholder,
partner, associate, employee, agent or representative of any such entity, any
proprietary information which is not in the public domain, any customer lists,
business methods, procedures, pricing and marketing structure and strategy,
source or object codes, experimental or research work, names and addresses of
current, former and prospective clients or employees, or any other trade
secrets, technical data, or know-how of any kind relating to the Businesses.
Upon termination of Employee's employment hereunder for any reason whatsoever,
Employee shall immediately return all documents and notes (including all copies
thereof) of any and all
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information and materials belonging or relating to the Businesses (whether or
not such materials were prepared by the Employee or another person).
(c) NON-HIRE. The Employee agrees that he will not, during the
Non-Competition Period, directly or indirectly, recruit, hire, employ, or
encourage to leave the employ of the Company or any of its affiliates, any
person who is now or hereafter becomes an employee or consultant of the Company
or any of its affiliates until such person has ceased to be an employee or
consultant of the Company or ADP or any of their respective affiliates for a
period of at least two years.
(d) EXCLUSIVE RIGHTS. The Employee hereby assigns to the Company, and
agrees that the Company shall have exclusive right, title and interest for the
entire world in and to all data, programs, specifications, documentation and
other information, including, without limitation, any and all patent, copyright,
trade secret or other proprietary right relating thereto made, prepared or
created by the Employee in connection with anything relating to the Company's
actual or prospective business which the Employee conceives or works on during
the Non-Competition Period. Accordingly, the Employee:
(i) shall promptly and fully disclose all such items to the
Company and will not disclose such items to any other person
or entity (other than employees of the Company or ADP
authorized to review such information), without the Company's
prior written consent;
(ii) shall maintain on the Company's behalf and surrender to the
Company upon termination of the Employee's employment with the
Company all written records regarding all such items;
(iii) shall, but without personal expense, fully cooperate with the
Company and execute all papers and perform all reasonable acts
requested by the Company to establish, confirm or protect the
Company's exclusive rights in such items or to enable it to
transfer legal title to same, together with any patents that
may be issued;
(iv) shall, but without personal expense, provide such information
and true testimony as the Company may request regarding such
items including, without limitation, items which the Employee
neither conceived nor worked on but regarding which the
Employee has knowledge because of the Employee's employment by
the Company; and
(v) states that the only such items in which the Employee
personally holds or claims an interest, and which are not
subject to this Employment Agreement, are listed on the
Ownership Schedule attached hereto. The absence of such
Ownership Schedule means that no such items exist.
(e) INJUNCTIVE RELIEF. Employee agrees that a violation of the
foregoing covenants not to compete, not to disclose, not to hire and regarding
the Company's exclusive rights
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contained herein will cause irreparable injury to the Company and its
affiliates, and that the Company and its affiliates shall be entitled, in
addition to any other rights and remedies they may have, at law or in equity,
to an injunction enjoining and restraining Employee from doing or continuing
to do any such act and any other violations or threatened violations of this
Section 6.
7. TERMINATION OF AGREEMENT. Upon termination of this Employment
Agreement for any reason whatsoever, all rights and obligations of the parties
hereunder shall cease (with the exception of those set forth in Sections 5 and 6
above).
8. BUSINESS JUDGMENT. Nothing contained herein shall in any way limit,
restrict or interfere with the determination of the officers and directors of
the Company and/or ADP as to the manner in which the Company shall be run.
9. PURCHASER EMPLOYMENT FORMS. At the Company's request, the Employee
shall complete and execute such other customary employment applications and
other similar forms that the Company or ADP generally require of all of their
employees; provided, however, that in the event of a conflict between the terms
and conditions of this Employment Agreement and the terms and conditions of any
such other employment application or other forms, during the Employment Period
the terms of this Employment Agreement shall take precedence.
10. COUNTERPARTS. This Employment Agreement may be executed
simultaneously in two (2) or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
11. ENTIRE AGREEMENT. This Employment Agreement sets forth the entire
agreement among the parties relating to the matters contemplated herein and
there are no representations, agreements or understandings between the parties
except as set forth or specifically referred to herein. Any agreement entered
into prior to the date hereof between the Employee and CGI and/or any of their
respective affiliates regarding the matters contemplated herein is hereby
terminated in its entirety and is replaced by this Employment Agreement.
12. NOTICES. All notices shall be sent to the parties by hand delivery,
nationally recognized overnight courier or by certified or registered mail at
the addresses set forth below or to any changed address which may be given in
the manner provided for in this Section 12. All notices to either the Company or
ADP shall be sent to (i) the Company at ADP Financial Information Services,
Inc., 0 Xxxxxxx Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, and (ii) Parent at
Automatic Data Processing, Inc. One ADP Boulevard, etc.
Attention: General Counsel. All notices to the Employee shall be sent to
_____________________________________. All notices to CGI shall be sent to
Xxxxxxxxxx Graphics, Inc., 000 Xxxxx Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000. Unless
hand delivered, notices shall be deemed given three business days following the
date deposited in the U.S. mails or one business day following the date of
delivery to a nationally recognized overnight courier service.
13. SEVERABILITY. In the event that this Employment Agreement or any
provision hereof is declared invalid, unenforceable or illegal by any court,
agency, commission
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or arbitrator(s) having jurisdiction hereof or thereof, neither party shall
have any cause of action or claim against the other by reason of such
declaration of invalidity, unenforceability or illegality; and any such
declaration concerning any provision hereof shall not affect, impair or
invalidate the remainder of this Employment Agreement, but shall be confined
in its operation to that provision hereof only and the remainder of this
Employment Agreement shall remain in full force and effect. The parties
hereto agree to substitute the invalid, unenforceable or illegal provision by
a valid, enforceable or legal one which corresponds to the spirit and purpose
of the invalid, unenforceable or illegal provisions to the greatest extent
possible.
14. AMENDMENT. This Employment Agreement may not be changed, modified
or amended in any manner except by an instrument in writing signed by all
parties hereto.
15. ASSIGNMENT. This Employment Agreement is personal to each of the
parties hereto and no party hereto may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
parties hereto; provided, however, that no consent shall be required hereunder
in the event that the Company assigns this Employment Agreement to any other
affiliate of the Company which shall succeed to the business of the Company and
which assignment does not alter the rights or duties of the Employee hereunder,
in which event the obligations of the Company hereunder shall be binding upon
such assignee.
16. HEADINGS. The headings contained in this Employment Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Employment Agreement.
17. WAIVER. No failure or delay on the part of any party hereto in the
exercise of any right hereunder in enforcing or requiring the compliance or
performance by the other party of any of the terms and conditions of this
Employment Agreement shall operate as a waiver of any such right, or constitute
a waiver of a breach of any such terms and conditions, nor shall any single or
partial exercise of any such right preclude other or further exercise thereof or
of any other right, nor shall any of the aforementioned failures or delays
affect or impair such rights generally in any way. The waiver by any party of a
breach of any term or condition of this Employment Agreement by the another
party shall not operate as nor be construed as a waiver of any subsequent breach
thereof.
18. GOVERNING LAW. This Employment Agreement and its validity,
construction and performance shall be governed in all respects by the laws of
the State of New Jersey, without giving effect to its conflicts of laws
principles.
[Text continues on following page.]
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IN WITNESS WHEREOF, the parties hereto have signed this Employment
Agreement as of the date first above written.
ADP FINANCIAL INFORMATION
SERVICES, INC.
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
XXXXXXXXXX GRAPHICS
INTERNATIONAL, INC.
By: /s/ XXXXXXX XXXXXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President and Chief Executive Officer
XXXXXXXXXX GRAPHICS, INC.
By: /s/ XXXXXXX XXXXXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President and Chief Executive Officer
/s/ XXXXXXX X. XXXXXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
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