Exhibit 10.5
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT by and between Crown Vantage Inc., a Virginia corporation (the
"Company") and ▇▇▇▇ ▇. ▇▇▇▇▇ (the "Executive"), dated as of the 1st day of
September, 1999.
1. Effective Date. The "Effective Date" of this Agreement shall be September
--------------
1, 1999.
2. Employment Period. The Company hereby agrees to continue the Executive in
-----------------
its employ, and the Executive hereby agrees to remain in the employ of the
Company, subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on December 31, 2001
(the "Employment Period"). Should the Executive remain employed by the
Company following the expiration of the Employment Period, it shall not be
according to, or governed by, the terms of this Agreement in any respect.
Unless the Executive's employment is pursuant to another Agreement, the
Executive shall be employed "at will," according to terms and conditions,
and with compensation and benefits, as are offered by the Company and
accepted by the Executive.
3. Terms of Employment.
-------------------
(a) Position and Duties. During the Employment Period, the Executive shall
-------------------
be employed as Senior Vice President, Administration and General
Counsel of the Company and shall have such duties, responsibilities
and authority as shall be consistent therewith.
During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive's reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood
and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
(b) Compensation.
------------
(i) Base Salary. The Executive shall receive an annual base salary
-----------
("Annual Base Salary") of $200,000 during the Employment
Period. The Annual Base Salary shall be paid in equal monthly
installments or more frequently. During the Employment Period,
the Annual Base Salary shall be reviewed at least every 12
months. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under
this Agreement. Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so
increased.
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
------------
shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the "Annual Bonus")
pursuant to the Company's annual incentive plans, pro rated in
the case of a bonus for any year during which the Executive was
employed for less than 12 months. Each such Annual Bonus shall
be paid no later than the end of the third month of the fiscal
year next following the fiscal year for which the Annual Bonus
is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the Employment
---------------------------------------
Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies
and programs applicable generally to other peer executives of
the Company and its affiliated companies. As used in this
Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with
the Company.
(iv) Welfare Benefit Plans. During the Employment Period, the
---------------------
Executive and/or the Executive's dependents, as the case may
be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated
companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in
no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable,
in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated
companies.
(v) Expenses. During the Employment Period, the Executive shall be
--------
entitled to receive prompt reimbursement for all reasonable
business expenses incurred by the Executive.
2
(vi) Fringe Benefits. During the Employment Period, the Executive
---------------
shall be entitled to fringe benefits at the discretion of the
Company, including, without limitation, tax and financial
planning services, payment of club dues, and an automobile of
his or her choice and payment of related expenses.
(vii) Vacation. During the Employment Period, the Executive shall be
--------
entitled to 5 weeks of paid vacation per year.
4. Termination of Employment.
-------------------------
(a) Death or Disability. The Executive's employment shall terminate
-------------------
automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 11(b) of this
Agreement of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by
the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for
180 consecutive business days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during
-----
the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the continued failure of the Executive to perform the
Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness) to the satisfaction of the
President and CEO, after a written notification is delivered to
the Executive which identifies the manner in which the
Executive has not performed to the satisfaction of the
President and CEO; or
(ii) the engaging by the Executive in illegal conduct or gross
misconduct which is injurious to the Company; or
(iii) failure to obey the lawful direction of the President and CEO,
not cured within five days following written notice from the
President and CEO; or
(iv) any act(s) that has a substantial and adverse effect on the
Company's business or reputation.
(c) Notice of Termination. Any termination by the Company for Cause shall
---------------------
be communicated by a Notice of Termination to the other party hereto
given in accordance with Section 11(b) of this Agreement. For purposes
of this Agreement, a
3
"Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to
the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if
the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date
shall be not more than thirty days after the giving of such notice).
The failure by the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Cause shall
not waive any right of the Company hereunder or preclude the Company
from asserting such fact or circumstance in enforcing the Company's
rights or defending against any claim of the Executive hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by the Company for Cause, the
date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination, and (iii) if the
Executive's employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of the Executive or
the Disability Effective Date, as the case may be.
5. Obligations of the Company upon Termination.
-------------------------------------------
(a) Termination Other Than for Cause, Death or Disability if Employee
-----------------------------------------------------------------
Agrees to Cancellation of Change of Control Agreement. If, during the
-----------------------------------------------------
Employment Period, the Company shall terminate the Executive's
employment other than for Cause or death or Disability, and, subject
to (i) the execution by the Executive of the Release attached as
Exhibit A hereto, and (ii) the automatic cancellation of any right the
Executive might otherwise have under the Change of Control Agreement
previously entered into between the Executive and the Company, a copy
of which is attached as Exhibit B, the Executive shall be entitled to
all of the following:
(i) the Company shall pay to the Executive in a lump sum in cash
within 15 calendar days after the Date of Termination the
aggregate of the following amounts:
A. the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore paid,
(2) the product of (x) the higher of (I) the Minimum Bonus
and (II) the Annual Bonus paid or payable, including any
bonus or portion thereof, which has been earned but deferred
(and annualized for any fiscal year consisting of less than
twelve full months or during which the Executive was
employed for less than twelve full months), for the most
recently completed fiscal year during the Employment Period,
if any (such higher amount being referred to as the "Highest
Annual Bonus") and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365,
and (3) any
4
compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon)
and any accrued vacation pay, in each case to the extent
not theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred to
as the "Accrued Obligations"); and
B. an amount equal to the product of (1) two and (2) the
highest amount actually paid to the Executive in cash
compensation (that is, Annual Base Salary plus bonus(es)
actually paid) in any one of the previous three calendar
years; and
C. an amount equal to the excess of (a) the actuarial
equivalent of the benefit (utilizing actuarial assumptions
no less favorable to the Executive than those in effect
under the Company's qualified defined benefit retirement
plan (the "Retirement Plan") and immediately prior to the
Effective Date under the Retirement Plan, and any excess
or supplemental retirement plan in which the Executive
participates (together, the "SERP") which the Executive
would receive if the Executive's employment continued for
two years after the Date of Termination assuming for this
purpose that all accrued benefits are fully vested, and,
assuming that the Executive's compensation in each of the
two years is that required by Section 3(b)(i) and Section
3(b)(ii), over (b) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if any,
under the Retirement Plan and the SERP as of the Date of
Termination;
(ii) all stock options, restricted stock and other stock-based
compensation shall become immediately exercisable or vested, as
the case may be, and stock options shall be exercisable for two
years thereafter;
(iii) for the Continuation Period (as defined below), the Company
shall continue to pay the premium for benefits to the Executive
and/or the Executive's dependents equal to those which would
have been provided to them in accordance with the plans,
programs, practices and policies described in Section 3(b)(iv)
of this Agreement if the Executive's employment had not been
terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies and
their families, provided, however, that if the Executive
becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another
employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility,
and provided further that the Executive and the Executive's
dependents otherwise are and remain eligible for coverage under
the federal law COBRA. The Continuation Period shall be two
years. For purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree
benefits pursuant to such plans, practices, programs and
policies, the Executive shall be
5
considered to have remained employed until two years after the
Date of Termination and to have retired on the last day of such
period;
(iv) the Company shall, at its sole expense as incurred, provide the
Executive with reasonable outplacement services the scope and
provider of which shall be selected by the Executive in his
sole discretion; and
(v) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts
or benefits, other than (x) severance benefits and (y) any
benefits or payments under the Change of Control Agreement
(Exhibit B), all rights to which the Executive shall have
relinquished as partial consideration for the payments and
benefits under this Section 5(a), that are required to be paid
or provided or which the Executive is eligible to receive under
any plan, program, policy or practice or contract or agreement
of the Company and its affiliated companies (such other amounts
and benefits shall be hereinafter referred to as the "Other
Benefits").
(b) Termination Other than for Cause, Death or Disability if the Executive
----------------------------------------------------------------------
Does Not Agree to Cancellation of Change of Control Agreement. If,
--------------------------------------------------------------
during the Employment Period, the Company shall terminate the
Executive's employment other than for Cause, death or Disability, and
the Executive elects to maintain in effect the Change of Control
Agreement previously entered into between the Executive and the
Company, a copy of which is attached as Exhibit B, this Agreement
shall terminate without further obligations on the part of the Company
to the Executive other than obligation to pay to the Executive (x) his
or her Annual Base Salary through the Date of Termination, (y) the
amount of any compensation previously deferred by the Executive, and
(z) Other Benefits, in each case to the extent theretofore unpaid.
(c) Death. If the Executive's employment is terminated by reason of the
-----
Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of
Accrued Obligations, the Severance Amount (as defined below) and the
timely payment or provision of Other Benefits. The "Severance Amount"
equals the sum of (x) one times the Annual Base Salary, and (y) one
times the Target Bonus, and (z) the pro rata share of the annual bonus
plan for the year in which death occurred. Accrued Obligations shall
be paid to the Executive's estate or beneficiary, as applicable, in a
lump sum in cash within 30 calendar days of the Date of Termination.
With respect to the provision of Other Benefits after the Effective
Date, the term Other Benefits as utilized in this Section 5(c) shall
include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to
the most favorable benefits provided by the Company and affiliated
companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs,
practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or
the Executive's beneficiaries, as in effect on the date of the
Executive's death with respect
6
to other peer executives of the Company and its affiliated companies
and their beneficiaries.
(d) Disability. If the Executive's employment is terminated by reason of
----------
the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations, the
Severance Amount and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 calendar days of the Date of Termination. With
respect to the provision of Other Benefits after the Effective Date,
the term Other Benefits as utilized in this Section 5(d) shall
include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company
and its affiliated companies to disabled executives and/or their
families in accordance with such plans, programs, practices and
policies relating to disability, if any, as in effect generally with
respect to other peer executives and their families at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter generally with respect to other peer
executives of the Company and its affiliated companies and their
families.
(e) Termination for Cause or by Resignation of Employee. If the
---------------------------------------------------
Executive's employment shall be terminated for Cause during the
Employment Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the
Executive (x) his or her Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by
the Executive, and (z) Other Benefits, in each case to the extent
theretofore unpaid. If the Executive breaches this Agreement by
voluntarily terminating employment during the Employment Period, this
Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment
or provision of Other Benefits, and the Company shall have any and all
legal and equitable rights for breach of contract that it may have
under applicable law. In such case, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination. Upon a termination of the Executive's employment for
Cause or by the Executive by resignation, the Executive shall forfeit
all stock options and restricted stock that are not vested on the Date
of Termination.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
-------------------------
the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program
of or any contract or agreement with the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
7
7. Full Settlement. The Company's obligation to make the payments provided for
---------------
in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and
such amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or
any guarantee of performance thereof (including as a result of any contest
by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
8. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any
additional payments required under this Section 8 (a "Payment") would
be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the "Excise
Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by
the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 8(a), if it shall be determined that the
Executive is entitled to a Gross-Up Payment, but that the Executive,
after taking into account the Payments and the Gross-Up Payment, would
not receive a net after-tax benefit of at least $25,000 (taking into
account both income taxes and any Excise Tax) as compared to the net
after-tax proceeds to the Executive resulting from an elimination of
the Gross-Up Payment and a reduction of the Payments, in the
aggregate, to an amount (the "Reduced Amount") such that the receipt
of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 8(c), all determinations required
to be made under this Section 8, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be
made by Ernst & Young, L.L.P., or such other
8
certified public accounting firm as may be designated by the Executive
(the "Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control, the
Executive shall appoint another nationally recognized accounting firm
to make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this Section
8, shall be paid by the Company to the Executive within five days of
the receipt of the Accounting Firm's determination. Any determination
by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies
pursuant to Section 8(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten business
days after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the
date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim;
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively
to contest such claim; and
(iv) permit the Company to participate in any proceedings relating
to such claim;
9
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 8(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax
claimed and ▇▇▇ for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and ▇▇▇ for a refund, the
Company shall advance the amount of such payment to the Executive, on
an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 8(a) or 8(c), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 8(c)) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section
8(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
9. Confidential Information. The Executive shall hold in a fiduciary capacity
------------------------
for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained
by the Executive during the Executive's employment by the Company or any of
its affiliated companies and which shall not be or become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). After termination of the Executive's
employment with the Company, the
10
Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge
any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 9 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
10. Successors.
----------
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to assume expressly
and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall
mean 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, or otherwise.
11. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without reference to principles
of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:
If to the Executive:
-------------------
If to the Company:
-----------------
Crown Vantage Inc.
Cincinnati, Ohio
11
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, President and CEO
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder shall
not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
CROWN VANTAGE INC.
By ___________________________________ Date 8/25/99
▇▇▇▇▇▇ ▇. ▇▇▇▇, President and CEO
"The Executive"
By ___________________________________ Date 8/25/99
▇▇▇▇ ▇. ▇▇▇▇▇
12