Compensation Agreement - Label Arts Inc. and Thomas J. Cobery
AMENDED AND RESTATED COMPENSATION AGREEMENT
By And Between
THOMAS J. COBERY
And
LABEL ART, INC.
Dated as of June 28, 1996
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AGREEMENT (this "Agreement") dated as of June 28, 1986, by and between
Label Art, Inc. (the "Company"), a Delaware corporation having its principal
place of business at One Riverside Way, Wilton, New Hampshire 03086, and Thomas
J. Cobery (the "Executive"), having an address at 263 Riverneck Road,
Chelmsford, MA 01824.
W I T N E S S E T H:
WHEREAS, Executive has previously been employed as an executive of the
Company; and
WHEREAS, all the outstanding stock of the Company has, since 1986,
been held by Transkrit Corporation ("Transkrit"), a Delaware corporation; and
WHEREAS, National Fiberstok Corporation, a Delaware corporation
("NFC") and wholly-owned subsidiary of DEC International, Inc., a Delaware
corporation ("DEC"), has agreed to purchase all of the issued and outstanding
capital stock of Transkrit and to merge Transkrit into itself effective as of
the date hereof; and
WHEREAS, the Executive and the Company are parties to a Compensation
Agreement (the "1986 Agreement") setting forth the terms on which the Executive
is currently being compensated by the Company; and
WHEREAS, in connection with the aforesaid purchase and merger of
Transkrit by and into NFC, the
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Executive and the Company desire to amend and restate the 1986 Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. BASE COMPENSATION. The Executive will be compensated by the
Company at the base compensation rate per annum set forth in Exhibit A hereto,
as the same may be amended from year to year pursuant to Section 5. Such base
compensation shall be paid at such times and in such manner as the Company has
customarily paid the salaries of its executives.
2. BONUS COMPENSATION.
(a) In addition to the base compensation payable pursuant to
paragraph 1 above, the Company will pay the Executive, on the terms set forth
herein, bonus compensation as provided herein.
(b) The amount of bonus compensation to be received by the Executive
shall be based upon attainment of the bonus program as defined in and as set
forth in Exhibit A hereto, as the same may be amended from year to year pursuant
to Section 5.
The calculation of the amount of bonus compensation shall be made in
connection with the annual audit of the Company by the Company's regularly
employed certified public accountants applying generally accepted
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accounting principles on a consistent basis, who shall set forth such
determination in writing . The Company shall cause a copy of such determination
to be furnished to the Executive. Such bonus compensation shall be paid by the
Company to the Executive 10 days after such accountants furnish a copy of such
determination to the Executive in conjunction with the annual audit of the
Company's financial statements.
(c) For the 1996 calendar year, notwithstanding the date of this
Agreement, bonus compensation payable to the Executive shall be the sum of
the following: (i) the amount of bonus compensation accrued on the books and
records of the Company in respect of the Executive's employment with the
Company during the period from January 1, 1996 through June 30, 1996 plus
(ii) bonus compensation payable pursuant to Section 2(a) and (b) of this
Agreement based on the employment of the Executive commencing July 1, 1996.
3. BENEFITS.
(a) The Company will (i) continue to provide the Executive with an
automobile comparable to that currently being provided by the Company to the
Executive, such automobile being replaced by a new comparable automobile at
least every 3 years; (ii) reimburse the Executive for the operating expenses of
such automobile; (iii) provide the
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Executive with whole life and disability insurance in amounts comparable to
those previously provided by the Company to the Executive; and (iv) generally
make available to the Executive those perquisites generally made available to
other employees of the Company.
(b) Effective as of the date hereof, the Executive will be granted an
option to purchase 47,763 shares of DEC class A Common Stock, par value .0001
per share, pursuant to the provisions of the DEC 1996 Stock Incentive Plan (the
"Plan") and award agreements issued under the Plan (the "Award Agreements").
Vesting will be in accordance with the Award Agreements and the Plan. A copy of
the Plan and the Award Agreements are attached hereto as Exhibits B and C.
Ownership of Shares will be subject to all of the terms and conditions of the
Award Agreements and the DEC Stockholders' Agreement, a copy of which is
attached hereto as Exhibit D.
4. EXPENSES. The Company will reimburse the Executive for
reasonable travel, entertainment and other expenses paid or incurred by the
Executive in connection with the performance of his duties for the Company.
The Executive shall be required to account for such expenses and to supply
vouchers or other proof thereof, to the extent and in such detail as may
reasonably be required by the Company.
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5. REVISION OF EXHIBIT A. The Company and the Executive will use
their best efforts to agree each fiscal year, to be effective as of the first
day of such fiscal year, on what, if any, amendments, modifications or additions
are to be made to Exhibit A hereto. Upon reaching such agreement, a new Exhibit
A shall be prepared and initialled by the Company and the Executive. If the
Company and the Executive are unable to agree by March 30 of any year as to any
such amendments, modifications or additions, this Agreement shall terminate.
6. DUTIES OF THE EXECUTIVE. The Executive will be Senior Vice
President of NFC and DEC and will be President of the Company. The Executive
shall report directly to the President and Chief Executive Officer - Transkrit
Division and shall maintain his primary physical office at the Company's
corporate office in Wilton, New Hampshire. The Executive's responsibilities
shall include:
(a) continuing oversight and management of all activities of the
Company (including Short Run Labels, Inc.);
(b) assistance in the development of corporate strategies to maximize
the value of NFC, DEC and their subsidiaries;
(c) assistance in the identification, analysis and purchase of
suitable acquisition targets, other
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business combinations and/or outsourcing candidates; and
(d) other responsibilities as assigned by the President and Chief
Executive Officer of NFC and DEC or the President and Chief Executive
Officer - Transkrit Division.
7. NATURE OF AGREEMENT; TERMINATION. This Agreement is an
agreement only with respect to the compensation payable to the Executive by
the Company during the period he is employed by the Company, and is not to be
considered in any respect an employment contract. The employment of the
Executive by the Company is at will, and each of the Company and Executive
shall be entitled, at their sole discretion, to terminate the employment
relationship of the Executive by the Company and all of the Executive's
rights hereunder at any time and for any reason, with or without cause;
PROVIDED, that the Executive shall be required to give the Company three
months notice of any such termination of employment by the Executive, other
than by reason of death or disability or pursuant to Section 5 hereof; and
FURTHER PROVIDED, that upon any termination of the employment of the
Executive by the Company other than by reason of death or disability, the
Executive will be entitled to (i) that number of month's severance pay as is
set forth on Exhibit A hereto in an
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amount based upon his base compensation rate payable pursuant to Section 1 on
the date of such termination, (ii) base compensation (as provided in Section
1 hereof) and expenses (as provided in Section 4 hereof) payable hereunder
for periods prior to the date of such termination, (iii) continuance of
insurance benefits through the period for which severance pay is payable
hereunder and (iv) if such termination occurs after the eighth month of any
year in which this Agreement is in effect, the amount of bonus compensation
which will become payable for such year pursuant to Section 2 hereof, to be
paid in accordance with Section 2. Except as specifically set forth in this
Section 7, Executive shall not be entitled to receive any amounts hereunder
from and after the date of such termination by the Executive or by the
Company.
8. NON-COMPETITION UNDERTAKING. The Executive agrees and
acknowledges that the terms of the Non-Competition Undertaking of the Executive,
dated March 13, 1986, shall remain in full force and effect in accordance with
its terms in favor NFC as the legal successor to Transkrit.
9. GENERAL. This Agreement contains the entire agreement between the
Company and the Executive with respect to the subject matter hereof and may not
be
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amended, waived, changed, modified or discharged except by an instrument in
writing executed by or on behalf of the party or parties against whom any
amendment, waiver, change, modification or discharge is sought. All notices,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to have duly given if delivered certified mail, return receipt
requested, or delivered in person, to the parties hereto at the addresses set
forth above. This Agreement may not be assigned by either party hereto, but
shall be binding upon and shall inure to the benefit of, the Executive, his
heirs, executors, administrator and legal representatives, and the Company and
its successors; provided, that NFC or the Company may sell or transfer all or
part of the shares of the Company, or all or part of the assets of the Company,
to any majority-owned direct or indirect subsidiary of DEC.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
as of the date first above written.
LABEL ART, INC.
By: /s/ Thomas J. Cobery
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EXECUTIVE:
By: /s/ Thomas J. Cobery
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Agreed and Acknowledged:
(with respect to Section 8)
NATIONAL FIBERSTOK CORPORATION
By: /s/ Jack Resnick
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Exhibit A to Compensation Agreement
between Label Art Inc. and Tom Cobery
for Year Ended December 31, 1996
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Base Compensation: $195, 936.00
Number of Months Severance Pay: 6
Bonus Program:
You will be eligible to earn incentive cash compensation of up to a maximum
of 40% of your base compensation. The payout will be determined by your
performance against a mutually agreed upon incentive performance plan.
This plan, a sample form of which is attached, will include EBITDA
(excluding any extraordinary gains and losses for unplanned acquisitions
that would affect planned EBITDA) of the Company (including Short Run
Labels, Inc.) and other performance targets, with a significant emphasis
on the former measure. Payout will begin upon achievement of a minimum of
70% of target, with maximum payout of 40% of base compensation for
performance equal to or exceeding target. All payments under this plan
are subject to approval by the Compensation Committee of the Board of
Directors of DEC, NFC or the Company.
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DEC INTERNATIONAL, INC.
1996 INCENTIVE COMPENSATION PLAN
EXECUTIVE: THOMAS J. COBERY INCENTIVE MAXIMUM: 40%
PRESIDENT - LABEL ART, INC.
CATEGORY COMPONENT 1995 THRESHOLD TARGET INTERIM PROJECTED
WEIGHT ACTUAL (MINIMUM) (MAXIMUM) YTD EST AWARD
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EBITDA (LABEL ART, 70.0% .70*TARGET
INC., INCLUDING
SHORT RUN LABELS,
INC.)
SAFETY 10.0%
ALL OTHER 20.0%
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TOTAL 0.0%
NOTE: NO AWARD CAN BE EARNED ON "ALL OTHER" GOAL COMPONENTS UNLESS DIVISION
THRESHOLD EBITDA IS ATTAINED. "ALL OTHER" GOAL COMPONENTS CONSIST OF
1996 CATEGORIES OF NONOPERATING INCOME OBJECTIVES AND THE 20%
COMPONENT WEIGHT ATTRIBUTED TO THE "ALL OTHER" THE GOAL COMPONENTS
SHALL BE PRORATED AMONG SUCH INDIVIDUAL OBJECTIVES.