Cenveo, Inc. One Canterbury Green Stamford, CT 06901 Fax (203) 595-3074
Exhibit
10.5
One Canterbury Green
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February
1, 2008
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Cenveo
Inc.
One
Canterbury Green
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Dear
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This
letter agreement (and the attached Annex A, collectively, this “Agreement”)
governs certain terms of your employment as President, Envelope Group with
Cenveo, Inc. (the “Company”) and the terms under which your employment with the
Company may be terminated. The Company shall pay you an annual base salary in
the amount of $425,000 per year, which amount shall be payable in accordance
with the Company’s customary payroll practices. You will be eligible
to participate in the Company’s MBO annual incentive plan for a potential bonus
opportunity of 110% of your base salary, subject to the terms and conditions of
such plan. Your bonus for 2008 shall be prorated from today, the date you start
employment. You will also be entitled to an auto allowance of $1,000
per month. You and the Company hereby acknowledge that your employment with the
Company constitutes “at-will” employment and that either party may terminate
your employment at any time, upon written notice of termination, subject to and
in accordance with the provisions of this Agreement.
1. Termination of
Employment.
(a) If
the Company terminates your employment without Cause, as defined in Annex A, or
if you terminate your employment for Good Reason, as defined in Annex A, (i) the
Company will pay you, in lieu of any other severance benefit that would
otherwise be payable to you, a lump sum payment within ten (10) days (or, if
later, promptly after the time for revocation of the release referred to in
Section 2 below has expired) after your termination equal to one
(1) times your Annualized Total Compensation, as
defined
in
Annex A; (ii) you will immediately vest in all outstanding stock options or
other equity grants issued to you as of the date of your termination; and (iii)
you will be entitled to receive your base salary through the date of such
termination (to the extent not previously paid) plus all other amounts (other
than any severance benefits) you are entitled to under the terms of the
Company’s benefit plans, programs, and policies through the date of your
termination.
If
you elect medical or dental coverage under the Company’s group medical or dental
plans pursuant to Section 4980B of the Code (“COBRA Coverage”), the Company will
also pay or reimburse you, if paid by you, promptly upon your request, an amount
equal to the premium for COBRA Coverage (for yourself and your dependents)
during a period not to exceed twelve (12) months of such COBRA Coverage or such
shorter period to which you and your dependents are entitled pursuant to
COBRA.
(b)
If your employment is terminated for any other reason, including by reason of
your death or disability, or if you voluntarily terminate your employment
without Good Reason, you will be entitled to receive only your base salary
through the date of such termination (to the extent not previously paid) plus
all other amounts (other than any severance benefits) you are entitled to under
the terms of the Company’s benefit plans, programs, and policies through the
date of your termination.
(c) Except
as specifically provided in this Section 1, you will not be entitled to any
other compensation, severance or other benefits from the Company upon the
termination of your employment for any reason.
2. Delivery of
Release. As a condition to the obligation of the Company to
make the payments provided for in this Agreement and otherwise perform its
obligations hereunder to you upon termination of your employment (other than due
to your death), you or your legal representatives must deliver to the Company,
within sixty (60) days of termination of your employment, a general
unconditional release in favor of the Company in form and substance satisfactory
to the Company, and the time for revocation of such release must have expired
without revocation by you. You are not obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to you under
any of the provisions of this Agreement.
3. Non-Competition and
Non-Solicitation. You agree that at all times both during your
employment and for twelve (12) months thereafter you will not, directly or
indirectly, (a) carry on, engage in, or otherwise provide services to, any
business that competes anywhere in the United States with a portion of the
Company’s business representing more than 15% of the Company’s consolidated
revenues on the date of your termination of employment with the Company (b)
solicit or hire, or assist others in the solicitation or hiring of, any of the
employees of the Company or any of its subsidiaries or (c) solicit or otherwise
interfere in any respect with the business relationships of the
Company or any of its subsidiaries with any of their customers or
suppliers. During such twelve (12) month period, you will not make
any statements, comments, or
communications
that are reasonably likely to be considered to be disparaging, derogatory or
detrimental to the good name or business reputation of the Company.
4. Entire
Agreement. This Agreement (including, without limitation,
Annex A) constitutes the entire agreement and understanding between you and the
Company with respect to the subject matter hereof, and may not be amended or
modified except by subsequent written agreement executed by both parties
hereto.
5. Counterparts. This
Agreement may be executed in two or more counterparts, each of which will
constitute an original, and all of which together will constitute one and the
same Agreement.
If
the foregoing terms and conditions are acceptable and agreed to by you, please
sign the line provided below to signify such acceptance and agreement and return
the executed copy to the undersigned.
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
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Chairman and Chief Executive
Officer
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Accepted
and Agreed this
1st
day of February, 2008.
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ANNEX
A
DEFINITIONS
AND MISCELLANEOUS TERMS
a.
“Cause” means:
(i)
the willful and continued failure of the Executive to perform substantially his
duties with the Company (other than any such failure resulting from Executive’s
incapacity due to physical or mental illness or any such failure subsequent to
Executive being delivered a notice of termination without Cause by the Company
or delivering a notice of termination for Good Reason to the Company) after a
written demand for substantial performance is delivered to Executive by the
Company which specifically identifies the manner in which the Company believes
that Executive has not substantially performed Executive’s duties;
(ii)
the willful engaging by Executive in illegal conduct or misconduct which is
demonstrably and materially injurious (monetarily or otherwise) to the Company
or its subsidiaries;
(iii)
conviction of, or the pleading of nolo contendere with regard to, a crime
constituting a felony; or
(iv)
dishonesty or misappropriation by Executive relating to the Company or any of
its funds, properties or other assets.
A
termination for Cause after a Change in Control (as defined in the Equity Plan,
as of the date hereof) shall be based only on events occurring after such Change
in Control; provided, however, the foregoing limitation shall not apply to an
event constituting Cause that was not discovered by the Company prior to a
Change in Control. For purposes of this definition, no act or failure
to act by Executive shall be considered “willful” unless done or omitted to be
done by Executive in bad faith and without reasonable belief that Executive’s
action or omission was in the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company.
In
order for a cessation of Executive’s employment to be deemed to be a termination
of Executive’s employment for Cause for the conduct described above, (A) the
Company shall have provided written notice to Executive that identifies such
conduct, and (B) in the event that the event or condition is curable, Executive
shall have failed to remedy such event or condition within thirty (30) days
after Executive has received such written notice, and (C) the final
determination that Executive’s employment shall be terminated for Cause shall
have been made (specifying the particular details thereof) by the Company. The
Company must initially notify Executive of any event constituting Cause within
ninety (90) days following the Company’s knowledge of its existence or such
event shall not constitute Cause under this Agreement.
b.
“Good Reason” means, without Executive’s express written consent, the occurrence
of any of the following events:
(i)
a material diminution of Executive’s authority, duties or
responsibilities;
(ii)
material reduction by the Company in Executive’s rate of annual base
salary;
(iii)
any requirement of the Company that Executive be based anywhere more than
thirty-five (35) miles from his current location or such other place of
employment as mutually agreed upon by the Company and Executive if constituting
a material change; or
(iv)
any material breach of this Agreement by the Company.
Notwithstanding
the foregoing, a Good Reason event shall not be deemed to have occurred if the
Company cures such action, failure or breach within thirty (30) days after
receipt of notice thereof given by Executive. Executive’s right to
terminate employment for Good Reason shall not be affected by Executive’s
incapacities due to mental or physical illness and Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any event or condition constituting Good Reason; provided, however, that
Executive must provide notice of termination of employment within six (6) days
following Executive’s knowledge of an event constituting Good Reason or such
event shall not constitute Good Reason under this Agreement.
c.
“Annualized Total Compensation” means the Executive’s Base Salary, target bonus
opportunity (as if all targets and objectives were met) and car allowance for
one year, at the rate in effect immediately before the Executive’s termination
date.
Confidentiality;
Intellectual Property.
(a)
The Executive hereby acknowledge that, as an employee of the Company, the
Executive will be making use of, acquiring and adding to confidential
information of a special and unique nature and value relating to the Company and
its subsidiaries. The Executive further recognizes and acknowledges
that all confidential information is the exclusive property of the Company and
its subsidiaries, is material and confidential, and is critical to the
successful conduct of the business of the Company and its
subsidiaries. Accordingly, the Executive hereby covenants and agrees
that the Executive will use confidential information for the benefit of the
Company and its subsidiaries only and will not at any time, directly or
indirectly, during the term of the Executive’s employment with the Company or at
any time thereafter divulge, reveal or communicate any confidential information
to any person, firm, corporation or entity whatsoever, or use any confidential
information for the Executive’s own benefit or for the benefit of others, except
as required in connection with the performance of the Executive’s
duties. The foregoing does not prohibit the Executive from making any
disclosures required by applicable law, provided that whenever possible the
Executive will give the Company prior notice of such contemplated disclosure and
cooperate with the Company at its expense in seeking a protective order or other
appropriate protection of such information.
(b)
All Intellectual Property and Technology created, developed, obtained or
conceived of by the Executive during the Executive’s employment, and all
business opportunities presented to the Executive during the Executive’s
employment, will be owned by and belong exclusively to the Company, provided
that they are reasonably related to any of the business of the Company as at the
date of such creation, development, obtaining or conception, and the Executive
will (i) promptly disclose any such Intellectual Property, Technology or
business opportunity to the
Company,
and (ii) execute and deliver to the Company, without additional compensation,
such instruments as the Company may require from time to time to evidence its
ownership of any such Intellectual Property, Technology or business
opportunity.
Enforcement of
Covenants.
The
Executive acknowledges that the restrictions contained in of this Agreement are
a reasonable and necessary protection of the immediate interests of the Company,
and any violation of these restrictions would cause substantial injury to the
Company and that the Company would not have entered into this Agreement, without
receiving the additional consideration offered by the Executive in binding the
Executive to any of these restrictions. In the event of a breach or
threatened breach by the Executive of any of these restrictions, the Company
will be entitled to apply to any court of competent jurisdiction for an
injunction restraining the Executive from such breach or threatened breach;
provided, however, that the right to apply for an injunction shall not be
construed as prohibiting the Company from pursuing any other available remedies
for such breach or threatened breach. In the event that,
notwithstanding the foregoing, a covenant included herein is deemed by any court
to be unreasonably broad in any respect, it shall be modified in order to make
it reasonable and shall be enforced accordingly. Without limitation
of, and notwithstanding the foregoing, in the event that, in any judicial
proceeding, a court refuses to enforce any of the covenants contained herein,
then the unenforceable covenant shall be deemed eliminated from the provisions
hereof for the purpose of those proceedings to the extent necessary to permit
the remaining covenants to be enforced. If any one or more of the
provisions hereof is held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions hereof shall not be
affected thereby. To the extent permitted by applicable law, the
Executive and the Company waive any provision of law which renders any provision
hereof invalid, illegal or unenforceable in any respect.
Indemnification.
The
Executive’s rights of indemnification under the Company’s and any of its
subsidiaries organizational documents, any plan or agreement at law or otherwise
and the Executive’s rights thereunder to director’s and officer’s liability
insurance coverage for, in both cases, actions as an officer and/or director of
the Company and its affiliates shall survive any termination of the Executive’s
employment.
Notices.
All
notices or communications under this Agreement must be in writing, addressed (i)
if to the Company to the attention of the General Counsel at the Company’s
headquarters address and (ii) if to the Executive, at the Executive’s address
first written above (or to any other addresses as either party may designate in
a notice duly delivered as described in this paragraph). Any notice
or communication must be delivered by telecopy, by hand or by
courier. Notices and communications may also be sent by certified or
registered mail, return receipt requested, postage prepaid, addressed as above
and the third business day after the actual date of mailing will constitute the
time at which notice was given.
Governing
Law.
This
Agreement will be governed by and construed in accordance with the laws of New
York that apply to contracts made and performed entirely within such
state.
Arbitration of
Disputes.
Any
dispute or controversy arising under or in connection with this Agreement that
cannot be resolved by the Executive and the Company will be determined by
arbitration in New York City, New York, in accordance with the rules set forth
by the American Arbitration Association. The decision of the
arbitrator will be final and binding on the Executive and the Company and
judgment may be entered on such decision in any court of competent
jurisdiction.
Successors and
Assigns.
This
Agreement will inure to the benefit of and be enforceable by the Executive’s
legal representatives and heirs. This Agreement will inure to the
benefit of and be binding upon the Company and its successors and
assigns. As used in this Agreement, the term “Company” means the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, written agreement, or otherwise.
Withholding.
The
Company may withhold from any amounts payable under this Agreement such federal,
state or local taxes as are required to be withheld pursuant to any applicable
law or regulation.
Entire Agreement;
Modifications.
This
Agreement (and the Annexes hereto) constitutes the entire agreement and
understanding between the Executive and the Company with respect to the subject
matter hereof, and may not be amended or modified except by subsequent written
agreement executed by both parties hereto. At the Executive’s
request, the Company agrees to negotiate in good faith with the Executive to
make such amendments to this Agreement as may be necessary or appropriate to
comply with Section 409A of the Code.