Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 1st day of February, 1999, is made
by and between ▇▇▇▇ Graphic Systems, Inc., a Delaware corporation having its
principal place of business in the State of Illinois (the "Company"), and
_______________ (the "Executive").
WHEREAS, the Company desires to retain the services of the
Executive, and the Executive is willing to render such services, in accordance
with the terms hereinafter set forth; and
WHEREAS, the Executive wishes to continue to be employed by the
Company; and
WHEREAS, the Board of Directors of the Company (the "Board") by
appropriate resolutions has authorized the terms for continued employment of the
Executive as provided for in this Agreement; and
WHEREAS, the parties hereto desire to amend, modify and restate, to
the extent that the Company has assumed any obligations, under the offer of
employment letter agreement between the Executive and the Company, dated as of
_____________;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the adequacy of which is hereby acknowledged, the Company and the
Executive agree as follows:
ARTICLE I
Definitions
"ACCRUED ANNUAL BASE SALARY" means that portion of the Executive's
Annual Base Salary which is accrued but unpaid as of the Date of Termination.
"ACCRUED ANNUAL BONUS" means the sum of (i) the amount of any Annual
Bonus earned with respect to the Fiscal Year ending prior to the Date of
Termination but which is unpaid as of the Date of Termination plus (ii) with
respect to the Fiscal Year during which the Date of Termination occurs, a pro
rata portion (based on a fraction the numerator of which is the number of days
which have elapsed in such Fiscal Year through the Date of Termination, and the
denominator of which is 365) of the Annual Bonus which the Executive would have
earned had the date of Termination been the last day of such Fiscal Year.
"ANNUAL BASE SALARY" has the meaning specified in Section 4.1 of
this Agreement.
"ANNUAL BONUS" has the meaning specified in Section 4.2 of this
Agreement.
"BOARD" has the meaning specified in the recitals to this Agreement.
"CAUSE" means (i) the Executive's willful failure to perform
assigned responsibilities and/or the duties of his employment in any material
respect, (ii) malfeasance, misfeasance or negligence in the performance of the
Executive's duties of employment in any material respect, (iii) the Executive's
commission of a felony under the laws of the United States or any state thereof
(whether or not in connection with his employment), (iv) the Executive's
material disclosure of Protected Information (as defined in Section 8.11(a))
respecting the Company's or any of its affiliates' or Subsidiaries' business to
any individual or entity which is not in the performance of the duties of his
employment, (v) the Executive's commission of an act or acts of sexual
harassment that would normally constitute grounds for termination under a formal
policy adopted by the Company, or (vi) any other act or omission by the
Executive (other than an act or omission resulting from the exercise by the
Executive of good faith business judgment) which is materially injurious to the
financial condition or the business reputation of the Company or any of its
affiliates.
Notwithstanding the foregoing, no act or omission by the Executive
described in clause (i) or (ii) above shall constitute Cause hereunder unless
the Company gives written notice thereof to the Executive, and the Executive
fails to remedy such act or omission within five (5) business days after
receiving such notice, (such period of five (5) business days to be defined as
the "Cure Period").
"Change of Control" has the meaning described in the following
paragraphs (a) through (c):
(a) Prior to an initial public offering of the stock of
GGS Holdings, Inc. ("GGS"), the holding company for the Company, a "Change
of Control" shall be deemed to have occurred:
(i) Whenever Stonington Capital Appreciation 1994
Fund, L.P. (the "Fund") (together with all affiliates) owns less than
fifty-one percent (51%) of either (A) the then outstanding shares of common
stock of GGS (the "Outstanding GGS Common Stock") or (B) the combined voting
power of the then outstanding voting securities of GGS entitled to vote
generally in the election of directors (the "Outstanding GGS Voting
Securities"); or
(ii) Whenever GGS owns less than fifty-one
percent (51%) of either (A) the then outstanding shares of common stock of
the Company or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors.
(b) After an initial public offering of the stock of GGS,
a "Change of Control" shall mean:
(i) The acquisition by any Person or group of
related Persons of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of twenty percent (20%) or more of either the Outstanding
GGS Common Stock or the Outstanding GGS Voting Securities; provided,
however, that for purposes of this subparagraph (i), the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from GGS, (B) any acquisition by GGS, or (C) any acquisition
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by any employee benefit plan (or related trust) sponsored or maintained by
GGS or any corporation controlled by GGS; and provided further that no
acquisition shall constitute a Change of Control unless, as a result
thereof, a Person or group of related Persons has beneficial ownership of a
larger percentage of the Outstanding GGS Common Stock or the Outstanding GGS
Voting Securities than is then beneficially owned by the Fund and its
affiliates; or
(ii) Individuals who, as of the date of the
Closing, constitute the board of directors of GGS (the "Incumbent Board")
cease for any reason to constitute at least a majority of the board of
directors of GGS; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the shareholders of GGS, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Incumbent Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of
the Outstanding GGS Common Stock and Outstanding GGS Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, at least sixty percent (60%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their respective ownership, immediately prior to
such Business Combination, of the Outstanding GGS Common Stock and
Outstanding GGS Voting Securities; provided, however, that the provisions of
this paragraph (b) shall be applied, in connection with and after any such
Business Combination, as if all references to GGS (except in the definition
of, and references to, the Incumbent Board) were replaced by references to
the corporation resulting from such Business Combination and shall be
applied, with respect to any subsequent Business Combination, as if the
reference in this subparagraph (iii) to "at least sixty percent (60%)" were
replaced by a reference to "at least ninety-five percent (95%)"; or
(iv) Approval by the shareholders of the Company
or of GGS of a complete liquidation or dissolution of the Company or of GGS,
respectively; provided, however, that a Change of Control shall not result
from approval by the shareholders of GGS of a dissolution of GGS for the
purpose of making a pro rata distribution of shares of the Company to the
shareholders of GGS; and provided further that, after such distribution, the
provisions of paragraph (a), above, this paragraph (b), and paragraph (c),
below, shall be applied as if all references to GGS (except in the
definition of, and references to, the Incumbent Board) were replaced by
references to the Company; or
(v) Any event as a result of which GGS owns less
than fifty-one percent (51%) of either (A) the then outstanding shares of
common stock of the Company or (B) the
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combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors.
(c) If the Fund makes a pro rata distribution of shares
of common stock or other securities of GGS to individuals or other
entities who are partners in the Fund, then the continued holding of such
shares or other securities of GGS by those distributees shall be deemed,
for purposes of paragraphs (a) and (b), above, to be continued holding of
those shares or other securities by the Fund and its affiliates.
"CLOSING" means the closing of an acquisition of ▇▇▇▇ Graphic
Systems, Inc. by an acquiring entity except as otherwise provided herein.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMPANY" has the meaning specified in the recitals to this
Agreement.
"CONTRACT TERM" has the meaning specified in Section 3.1 of this
Agreement.
"DATE OF TERMINATION" means the date as of which the Executive's
employment with the Company is terminated by the Company or by the Executive for
any reason including, but not limited to, death or Disability.
"DISABILITY" means any medically determinable physical or mental
impairment, which shall have rendered the Executive unable to perform the duties
required under this Agreement for a continuous period of six (6) months. The
date of the determination of Disability is the date on which the Executive is
certified, following such six (6)-month period by a physician reasonably
acceptable to the Company and the Executive, as having incurred a Disability.
"EXECUTIVE" has the meaning specified in the recitals to this
Agreement.
"FISCAL YEAR" means each period of twelve (12) months beginning on
January 1 and ending on the following December 31.
"GOOD REASON" means the occurrence of any one of the following
events after a Change of Control:
(a) Assignment to the Executive of any duties materially and
adversely inconsistent with the Executive's position as specified in
Article II hereof, or any other action by the Company which results in a
material and adverse change in the Executive's position, authority, duties
or responsibilities; or
(b) A demotional change in the Executive's title or the line of
authority through which the Executive is required to report; or
(c) Failure by the Company to obtain, in accordance with Section
8.1, below, the written agreement of any successor in interest to the
business of the Company or assignee of the Company to assume and perform
the obligations of the Company under this Agreement; or
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(d) A material failure by the Company to comply with Article IV
or Article V of this Agreement.
Notwithstanding the foregoing, no act or omission by the Company
shall constitute Good Reason hereunder unless (i) the Executive gives the
Company written notice thereof within two (2) months after he first knew or
should have known of such act or omission, and the Company fails to remedy such
act or omission within thirty (30) days after receiving such notice, or (ii)
such act or omission is part of a series of two (2) or more acts or omissions,
each of which constitutes Good Reason without regard to this proviso, and which
occur within a period of twelve (12) months or less.
"PERSON" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"PROHIBITED BUSINESS" has the meaning specified in Section 8.12
of this Agreement.
"PROTECTED INFORMATION" has the meaning specified in Section 8.11
of this Agreement.
"STOCK OPTIONS" has the meaning specified in Addendum 1 to this
Agreement.
"STOCKHOLDERS AGREEMENT" means that certain agreement dated
October 15, 1996 by and among GGS Holdings, Inc., the stockholders and the
holders of options or restricted stock under the Management Stock Incentive Plan
(the "Management Stock Incentive Plan"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994 and
Stonington Capital Appreciation Fund, L.P.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation, shall have or
might have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned legally or beneficially by such Person
and/or one or more Subsidiaries of such Person, and (b) any partnership in which
such Person and/or one or more Subsidiaries of such Person shall have an
interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).
"TERMINATION OF EMPIOYMENT WITHOUT CAUSE" means a termination of
the Executive's employment by the Company for any reason other than Cause.
ARTICLE II
Duties
2.1 EMPLOYMENT. This Agreement amends, modifies and restates, to
the extent that the Company has any obligations under the offer of employment
letter between the Executive and the Company, dated as of ______________ (the
"Prior Letter"), and the Prior Letter , to the extent that the Company has any
obligations thereunder, is hereby superseded by the provisions
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hereof, including the provisions set forth in Addendum 1 attached hereto and
made a part hereof as if fully rewritten.
2.2 DUTIES. The Company hereby employs the Executive to serve as
Executive Vice President, ______________ of the Company during the Contract Term
with overall charge and responsibility for the _____________ affairs of the
Company and to perform such duties consistent with such position as the
Executive shall reasonably be directed to perform or as may be specified in the
Company's by-laws (if applicable), and the Executive hereby accepts such
employment. During the Contract Term, and excluding any periods of vacation,
sick leave or disability to which the Executive is entitled, the Executive
agrees to devote the Executive's full business time and attention to the
business affairs of the Company. The Company reserves the right to assign
additional responsibilities to, change responsibilities of or reassign the
Executive at any time during the Contract Term consistent with the terms of this
Agreement.
2.3 OTHER ACTIVITIES. During the Contract Term, 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 or fulfill speaking
engagements, or (c) manage personal investments, so long as such activities are
consistent with the policies of the Company and do not interfere with the
performance of the Executive's duties in accordance with this Agreement.
ARTICLE III
Term of Agreement
3.1 TERM. The initial term of this Agreement shall commence on
February 1, 1999 and terminate on January 31, 2001. This initial term, however,
shall be automatically extended without further action of either party for
successive additional two (2) year periods, unless written notice of either
party's intention not to extend has been given to the other party hereto at
least three (3) months prior to the expiration of the then effective term (the
initial term or such longer period for which the term of the Executive's
employment shall have been so extended is hereinafter referred to as the
"Contract Term").
ARTICLE IV
Compensation
4.1 BASE SALARY. While the Executive is employed by the Company
during the Contract Term, the Company shall pay or cause to be paid to the
Executive in cash, in installments not less frequently than monthly, an annual
base salary ("Annual Base Salary") at the rate set forth in Addendum 1. The
Company shall review the Executive's Annual Base Salary no less frequently than
annually and may from time to time increase or decrease Executive's Annual Base
Salary, provided that it shall not be reduced to an annual rate of less than the
amount set forth in Addendum 1. The term Annual Base Salary as used in this
Agreement shall refer to the Annual Base Salary as so increased or decreased.
4.2 ANNUAL BONUS. While the Executive is employed by the Company
during the Contract Term, the Company shall pay or cause to be paid to the
Executive an annual cash bonus ("Annual Bonus") in accordance with the terms of
a bonus plan for senior executives of the Company, as adopted by the Board, as
amended from time to time.
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ARTICLE V
Other Benefits
5.1 INCENTIVE, SAVINGS AND RETIREMENT PLANS. The Executive shall
be entitled to participate while the Executive is employed by the Company during
the Contract Term in all incentives (including long-term incentives), savings
and retirement plans, practices, policies and programs applicable to other
senior executives of the Company.
5.2 WELFARE BENEFITS. While the Executive is employed by the
Company during the Contract Term, the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and shall receive all
benefits under all welfare benefit plans, practices, policies and programs
provided by the Company (as amended or changed from time to time) and applicable
to other senior executives of the Company.
5.3 FRINGE BENEFITS. While the Executive is employed by the
Company during the Contract Term, the Executive shall be entitled to all fringe
benefits applicable to other senior executives of the Company.
5.4 REIMBURSEMENT OF BUSINESS EXPENSES. The Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred while the Executive is employed by the Company during the Contract
Term, upon the Company's receipt of required accountings therefor.
5.5 VACATION. While the Executive is employed by the Company
during the Contract Term, the Executive shall be entitled to paid vacation time
in accordance with the plans, practices, policies, and programs applicable to
other senior executives of the Company.
ARTICLE VI
Termination of Employment
6.1 TERMINATION OF EMPIOYMENT FOR CAUSE, OTHER THAN FOR GOOD
REASON, DEATH, DISABILITY OR RETIREMENT. If, before the end of the Contract
Term, the Company terminates Executive's employment for Cause, the Executive
terminates his employment other than for Good Reason or the Executive's
employment terminates due to death, Disability or Retirement, the Company shall
pay to the Executive, the beneficiaries designated in writing by the Executive,
or the Executive's estate, as the case may be, within thirty (30) days after the
Date of Termination an amount which is equal to the Executive's Accrued Annual
Base Salary. In addition, the Company will pay the Executive's Accrued Annual
Bonus at the time payments are made to other participants in accordance with the
provisions of the plan. The Executive shall have no further right to receive any
Accrued Annual Bonus, unaccrued Annual Bonus or other compensation after such
termination or resignation of employment with respect to the year in which such
termination or resignation occurs or later years or to accrue from and after the
Date of Termination any further benefits under any other plan or arrangement. If
the Company terminates the Executive's employment for Cause, it shall provide
the Executive with not less than five (5) business days' advance written notice
of termination, including a statement of the Date of Termination and the
specific detailed basis for such termination. In this connection, as provided
for in the definition of "Cause" contained in Article I hereof, the Company
shall have the right to terminate the Executive's employment for Cause if the
notice and cure provisions in said
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definition have first been complied with; provided, that the foregoing notice
period shall be concurrent with the cure period, if any.
6.2 TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT CAUSE OR FOR
GOOD REASON. If, before the end of the Contract Term, there is either: (a) a
Termination of Employment Without Cause; or, (b) a termination of employment by
the Executive for Good Reason, the Executive shall receive promptly after the
Date of Termination an amount equal to the sum of the Executive's Accrued Annual
Base Salary that would have been payable to the Executive if his employment had
continued for the period from the Date of Termination until the second
anniversary of the Date of Termination. The Company will also pay the portion of
the Executive's Accrued Annual Bonus at the time payments are made to other
participants in accordance with the provisions of the plan. In addition, for a
period of two (2) years after the Date of Termination, the Company shall
continue to provide benefits to the Executive and/or the Executive's family in a
form that would have been provided to them in accordance with the plans,
practices, policies and programs referred to in Section 5.2 of this Agreement;
provided, however, that such benefits may be discontinued by the Company earlier
in the event that, and to the extent that, the Executive becomes entitled to
comparable benefits from a subsequent employer.
6.3 OTHER TERMINATION BENEFITS. In addition to any amounts or
benefits payable upon termination of employment hereunder and except as
otherwise provided herein, the Executive shall be entitled to any payments or
benefits explicitly provided under the terms of any plan, policy or program of
the Company or as otherwise required by applicable law.
ARTICLE VII
Representations and Warranties of the Executive
To induce the Company to enter into this Agreement, the Executive
makes the following representations and warranties to the Company, each and all
of which shall be true as of the date of execution and delivery of this
Agreement and shall survive the execution and delivery of this Agreement:
7.1 POWER. LEGAL COMPETENCE. ENFORCEABLE OBLIGATIONS. The
Executive is a bona fide resident of the State of Illinois, is over 2l years of
age, and has the power and is legally competent to execute, deliver and perform
this Agreement and all documents and instruments to be delivered by the
Executive hereunder. This Agreement constitutes a legal, valid and binding
obligation of the Executive, enforceable against him in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally or by general principles of
equity.
7.2 INVESTMENT KNOWLEDGE AND EXPERIENCE. The Executive has
sufficient knowledge and experience in financial, business and tax matters to be
capable of evaluating the risks and merits inherent in an investment in and/or
employment with the Company and of making informed decisions with respect
thereto.
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7.3 ADEQUATE MEANS. The Executive, at the present time, has
adequate means of providing for his current needs and personal contingencies,
including the payment of income tax liabilities.
7.4 TRANSFER OF SHARES. Any Stock Options the Executive may
obtain during the period of his employment shall be for his own account and
shall not be subject to resale, transfer or distribution unless such shares are
registered under the Securities Act of 1933, as amended, or an exemption from
such registration is available..
ARTICLE VIII
Miscellaneous
8.1 ASSIGNMENT. SUCCESSORS. The Company may freely assign its
respective rights and obligations under this Agreement to a successor to the
Company's business, including without limitation a purchaser of all or
substantially all the assets of the Company's business, without the prior
written consent of the Executive, provided that such successor assumes in
writing all of the Company's obligations hereunder. This Agreement shall be
binding upon and inure to the benefit of the Executive and the Executive's
estate and the Company and any assignee of or successor to the Company.
8.2 BENEFITS. The benefits payable under this Agreement to
Executive constitute a legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms. This Agreement constitutes
a legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally or by
general principles of equity.
8.3 SEVERABILITY. If all or any part of this Agreement is
declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any portion of this
Agreement not declared to be unlawful or invalid. Any paragraph or part of a
paragraph so declared to be unlawful or invalid shall, if possible, be construed
in a manner which will give effect to the terms of such paragraph or part of a
paragraph to the fullest extent possible while remaining lawful and valid.
8.4 AMENDMENT AND WAIVER. This Agreement shall not be altered,
amended or modified except by written instrument executed by the Company and
Executive. A waiver of any term, covenant, agreement or condition contained in
this Agreement shall not be deemed a waiver of any other term, covenant,
agreement or condition, and any waiver of any default as to any such term,
covenant, agreement or condition shall not be deemed a waiver of any later
default as to such term or as to any other term, covenant, agreement or
condition.
8.5 NOTICES. All notices and other communications hereunder shall
be in writing and delivered by hand, by facsimile transmission, by first class
registered or certified mail, return receipt requested, postage prepaid, or by
reputable commercial delivery service, addressed as follows:
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If to the Company:
▇▇▇▇ Graphic Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chairman
If to the Executive:
Either party may from time to time designate a new address by notice given in
accordance with this section. Notice and communications shall be effective when
delivered by hand or commercial delivery service, when received by facsimile
transmission, or three (3) business days after being mailed as set forth above.
8.6 COUNTERPART ORIGINALS. This Agreement may be executed in
several counterparts each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
8.7 ENTIRE AGREEMENT. ENFORCEABLE OBLIGATIONS. This Agreement,
together with the Management Stock Incentive Plan and the agreement or
agreements pursuant to which options have been or may be granted to the
Executive under the Management Stock Incentive Plan, and agreements ancillary to
these agreements form the entire agreement between the parties hereto with
respect to any severance payments and with respect to the subject matter of this
Agreement. Without limiting the generality of the foregoing, this Agreement
supersedes the Prior Letter and the Prior Letter is void and of no further
effect from and after February 1, 1999.
8.8 EFFECT ON OTHER AGREEMENTS. This Agreement shall supersede
all prior agreements, promises and representations, whether in writing or
otherwise, regarding the Executive's employment with the Company, including
severance or other payments contingent upon termination of such employment.
8.9 APPLICABLE LAW. The provisions of this Agreement shall be
interpreted and construed in accordance with the laws of the State of Illinois,
without regard to its choice of law principles.
8.10 SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS. The Executive's
rights under Article VI hereof, and his obligations under Sections 8.11, 8.12
and 8.13 hereof, shall survive the termination of the Executive's employment
and/or the termination of this Agreement.
8.11 TRADE SECRETS. CONFIDENTIAL AND PROPRIETARY BUSINESS
INFORMATION.
(a) The Company has advised the Executive and the Executive
acknowledges that it is the policy of the Company to maintain as secret and
confidential all Protected Information (as defined below), and that Protected
Information has been and will be developed at substantial cost and effort to
the Company. "Protected Information" means trade secrets and confidential and
proprietary business information of the Company, including, but not limited
to, such information regarding customers (including potential customers),
sources of supply, processes, methods, plans, apparatus, specifications,
materials, pricing information, intellectual property (including applications
and rights in discoveries, inventions or patents), internal memoranda,
marketing plans, contracts, finances, personnel, research and internal
policies, other than any information
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which has entered the public domain (unless such information entered the
public domain through the efforts of or on account of the Executive).
(b) The Executive acknowledges that the Executive will acquire
Protected Information with respect to the Company and its successors in
interest, which information is a valuable, special and unique asset of the
Company's business and operations, and that disclosure of such Protected
Information would cause irreparable damage to the Company.
(c) The Executive shall not, directly or indirectly, divulge,
furnish or willfully make accessible to any person, firm, corporation,
association or other entity (otherwise than as may be required in the regular
course of the Executive's employment or by law) nor use in any manner, either
during (other than as may be required in the regular course of the
Executive's employment or by law) or after termination of employment by the
Company, any Protected Information, or cause any such information of the
Company to enter the public domain.
8.12 NON-COMPETITION.
(a) The Executive agrees that the Executive shall not during the
Executive's employment with the Company, and, if the Executive terminates
employment during the Contract Term other than for Good Reason, or if the
Company terminates the Executive's employment during the Contract Term for
Cause, thereafter for two (2) years, directly or indirectly, in any capacity,
engage or participate in, or become employed by or render advisory or
consulting or other services in connection with, or make any financial
investment in, whether in the form of equity or debt, or own any interest,
directly or indirectly in any Prohibited Business as defined in Section
8.12(c).
(b) The Executive agrees that the Executive shall not, during the
Executive's employment with the Company, and, if the Executive terminates
employment during the Contract Term without Good Reason or if the Company
terminates the Executive's employment during the Contract Term for Cause,
thereafter for two (2) years, make any financial investment, whether in the
form of equity or debt, or own any interest, directly or indirectly, in any
Prohibited Business. Nothing in this Section 8.12 shall, however, restrict
the Executive from making any investment in any company whose stock is
listed on an American securities exchange or traded in the over-the-counter
market and has sales in excess of $100 million; provided that (i) such
investment does not give the Executive the right or ability to control or
influence the policy decisions of any Prohibited Business, and (ii) such
investment does not create a conflict of interest between the Executive's
duties hereunder and the Executive's interest in such investment.
(c) A "Prohibited Business" shall mean any business that competes
with the Company in the design, development, engineering, manufacture,
remanufacture, refurbishment, sale, resale, installation or service of all
or any portion of printing press systems or components for newspaper, insert
or commercial printing or other graphic arts.
8.13 UNDERTAKING REGARDING EMPLOYEES. From the effective date
hereof until two (2) years after the Date of Termination, the Executive shall
not, directly or indirectly, except with the permission in writing of the
Company, (a) induce or encourage any employee of the Company or of any successor
in interest to leave employment with the Company or any successor in interest;
or (b) employ, hire, solicit or cause to be employed, hired or solicited for
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employment (other than by the Company or any successor in interest), or
establish a business with or encourage others to hire, any person who within one
(1) year prior thereto was, to the knowledge of the Executive, employed by the
Company or any successor in interest; provided, however, that the Executive will
not be prohibited from hiring or employing (or causing to be hired or employed)
any person whose termination of employment with the Company or any successor in
interest was not directly or indirectly induced, encouraged or solicited by the
Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement on
this ____ day of ______________ , 1999.
▇▇▇▇ GRAPHIC SYSTEMS, INC.
_______________________________
Name:
Title:_________________________
Executive
_______________________________
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