EXHIBIT 10.9
FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT BY AND BETWEEN
COMMEMORATIVE BRANDS, INC. AND ▇▇▇▇▇ ▇. ▇▇▇▇▇ DATED FEBRUARY 1,
2002
FIRST AMENDMENT
TO THE
EMPLOYMENT AGREEMENT
BY AND BETWEEN
COMMEMORATIVE BRANDS, INC.
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇
WHEREAS, Commemorative Brands, Inc. ("CBI") and ▇▇▇▇▇ ▇. ▇▇▇▇▇
("Executive") entered into an employment agreement, dated as of July 13, 1999
(the "Agreement"), pursuant to which Executive agreed to serve as President and
Chief Executive Officer of CBI;
WHEREAS, under Section 17 of the Agreement, the Agreement may be
amended by an agreement in writing signed by Executive and CBI;
WHEREAS, as a result of the Agreement and Plan of Merger among
CBI, Commemorative Brands Holding Corp. ("Holding") and Commemorative Brands
Acquisition Corp., dated as of July 26, 2000 (the "Merger"), CBI and ▇▇▇▇▇▇
Senior Holding Corp. became wholly-owned subsidiaries of Holding;
WHEREAS, as of January 23, 2002, the name of Holding was changed
to American Achievement Corporation ("American");
WHEREAS, Section 4.2 of the Agreement provides, among other
things, that if CBI achieves $30 million of Consolidated EBITDA (as defined
therein) within three years of the effective date of the Agreement, Executive
shall be paid a long-term incentive bonus of $1 million ("Long-Term Bonus") in
the form of Series "B" preferred stock of CBI having a face value of $1 million
on the date of issuance. To the extent that such grant of preferred stock is
taxable under Federal, State, FICA/Medicare, unemployment law or other tax law,
under the Agreement, such taxes are to be paid by CBI or, if paid by Executive,
shall be reimbursed to Executive by CBI;
WHEREAS, the Series "B" preferred stock of American has been
converted to Series "A" preferred stock of American;
WHEREAS, in full and complete satisfaction of its obligations
under Section 4.2 of the Agreement (as such section read prior to this
Amendment), CBI has paid Executive $550,000 of the Long-Term Bonus in the form
of Series "A" preferred stock of American having a face value of $550,000 on the
date of issuance, and has also paid Executive the taxes under
Federal, State, FICA/Medicare, unemployment law or other tax law associated with
such bonus; and
WHEREAS, American now wishes to retain Executive as President and
Chief Executive Officer and to revise the Agreement to reflect the new corporate
structure resulting from the Merger.
NOW THEREFORE, pursuant to Section 17 of the Agreement, the
Agreement is hereby amended effective as of February 1, 2002 as follows:
1. The recital paragraph to the Agreement shall be amended to
read as follows:
"This Employment Agreement ("Agreement") is entered into as
of this 13th day of July, 1999, and amended as of February
1, 2002, by and between AMERICAN ACHIEVEMENT CORPORATION
(formerly known as Commemorative Brands Holding Corp.) and
any successors thereto (collectively referred to as the
"Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive")."
2. Section 1 of the Agreement is amended by adding the
following sentence to the end thereof:
"Effective as of July 27, 2000, if directed by the Board of
Directors of the Company (the "Board"), Executive will serve
in an executive capacity to any subsidiary of the Company
(each a "Subsidiary") without additional compensation;
provided that nothing in this Section 1 shall be construed
as negating or otherwise modifying any rights or obligations
of the parties under Section 4.1 hereof."
3. The fourth and fifth sentences of Section 4.2 of the
Agreement are amended to read as follows:
"If the Company achieves (a) $57,000,000 of EBITDA (as
hereinafter defined) during fiscal years 2002, 2003 or 2004,
the Executive shall be paid a long-term incentive bonus of
$500,000 in the form of Series "A" preferred stock of the
Company having a face value of $500,000 on the date of
issuance; and (b) $62,000,000 of EBITDA (as hereinafter
defined) during fiscal years 2002, 2003 or 2004, the
Executive shall be paid a long-term incentive bonus (in
addition to such amounts payable under (a) above) of
$500,000 in the form of Series "A" preferred stock of the
Company having a face value of $500,000 on the date of
issuance (collectively, the "Long-Term Bonus"). The
preferred stock shall be issued to Executive within ninety
(90) days following the achievement of
the applicable EBITDA target by the Company, provided that
the Company achieves such EBITDA target during fiscal years
2002, 2003 or 2004. Notwithstanding the foregoing, to the
extent the Company's EBITDA is materially changed as a
result of a capital transaction of the Company, appropriate
adjustments shall be made to the EBITDA targets used for
determining the Executive's entitlement to the Long-Term
Bonus under this Section 4.2 hereof, as shall be agreed to
in good faith by the parties."
4. The last sentence of Section 4.2 of the Agreement is amended
to read as follows:
"For purposes hereof, EBITDA shall have the meaning set
forth in the Amended and Restated Credit Agreement, dated as
of July 27, 2000, currently in effect among CBI, TP Holding
Corp., ▇▇▇▇▇▇ Publishing Company, ▇▇▇▇▇▇ Production Services
Company, L.P., ▇▇▇▇▇▇ Financial, Inc., Key Corporate
Capital, Inc., and The Bank of Nova Scotia, as may be
hereafter amended from time to time (or any successor Credit
Agreement thereto) (to the extent the definition of EBITDA
is thereby amended with the consent of the Executive, which
consent shall not be unreasonably withheld by the Executive)
which current definition is attached hereto as Exhibit A."
5. Section 4.3 of the Agreement shall be amended to read as
follows:
"As of July 27, 2000, Executive shall receive a grant of
stock options pursuant to the terms of the Company's stock
option plan (the "Plan"), a copy of which is attached hereto
as Exhibit B, in exchange for any options to purchase common
stock of CBI held by Executive as of July 27, 2000,
equivalent to the amount provided under the Agreement and
Plan of Merger among CBI, the Company and Commemorative
Brands Acquisition Corp., dated as of July 26, 2000, and at
a price per share equal to the fair market value of the
Company's shares at the time of grant. Executive shall also
be (i) entitled to an option, granted as of February 1,
2002, to purchase 12,500 shares of the common stock of the
Company (the "2002 Option"); and (ii) eligible, at the sole
and absolute discretion of the Board, for the grant of an
option to purchase 15,000 shares of the common stock of the
Company, to be granted (if at all) at such time as may be
determined by the Board in its sole and absolute discretion
(together with the 2002 Option, the "Future Options"). The
Future Options shall be granted at a price per share equal
to the fair market value of the Company's shares at the time
of grant and shall have such other terms as set forth in the
Plan and the Option Agreements to be entered into between
the Company and Executive. Thereafter, additional grants of
stock
options to Executive (if any) shall be made at such times
and in such amounts as the Board shall determine in its sole
and absolute discretion."
6. Section 7.2 of the Agreement shall be amended by deleting
the phrase "and any stock options actually earned through the date of
termination" from the first sentence thereof and replacing it with the phrase
"and the 2002 Option, to the extent such 2002 Option has not been granted as of
the date of termination".
7. Section 7.4(iv) of the Agreement shall be amended by
replacing the phrase "incentive stock options to the extent earned in accordance
with Section 4.3" with the phrase "the 2002 Option".
8. Section 7.4(vi) shall be amended by deleting the phrases "or
stock options" and "or 4.3."
9. Section 7.6 of the Agreement shall be amended to read as
follows:
"7.6 VESTING. Except as otherwise provided herein, all stock
actually earned shall vest upon termination by the Executive
for Good Reason or for any termination of the Executive by
the Company other than for Substantial Cause."
10. Section 9.1 of the Agreement shall be amended to read as
follows:
"9.1 Executive agrees to refrain during his employment and
for one year after the termination of his employment under
this Agreement for any reason, without written permission of
the Company, from becoming involved in any way, within the
boundaries of the United States, in the businesses (the
"Businesses") of: (i) manufacturing, designing, servicing or
selling, the type of jewelry or fine paper or other
scholastic, licensed sports, insignia, recognition or
affinity products manufactured or sold (or then contemplated
to be manufactured or sold) by the Company, any of its
divisions, Subsidiaries and/or other affiliated entities;
(ii) designing, publishing, servicing or selling yearbook
products or scholastic recognition publications or
directories; or (iii) providing event planning services for
school alumni, including but not limited to, as an employee,
consultant, independent representative, partner or
proprietor."
11. Section 9.2 of the Agreement shall be amended by deleting
the phrase "scholastic, licensed sport, insignias, recognition or affinity
business" and replacing it with the phrase "business (as it relates to the
Businesses)".
12. This Amendment may be executed in two counterparts, each of
which shall be deemed an original but both of which together shall constitute
one and the same instrument.
13. The Agreement, except as otherwise set forth herein, shall
remain in full force and effect in all other respects.
IN WITNESS WHEREOF, the parties have executed this Amendment as
of February 1, 2002.
AMERICAN ACHIEVEMENT
CORPORATION (formerly known as
Commemorative Brands Holding Corp.)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name:
Title:
COMMEMORATIVE BRANDS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. Bench
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Name:
Title:
EXECUTIVE
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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