Employment Agreement - National Fiberstok Corp. and Jack Resnick
NATIONAL FIBERSTOK CORPORATION
SUITE C-150
5775 PEACHTREE DUNWOODY ROAD
ATLANTA, GEORGIA 33342
June 28, 1996
Mr. Jack Resnick
5300 Fox Ridge Road
Roanoke, VA 24014
Dear Jack:
Confirming our various discussions, effective with the date of this letter, you
will be Senior Vice President of National Fiberstok Corporation ("NFC") and DEC
International, Inc. ("DEC"). In addition, you will be President and Chief
Executive Officer - Transkrit Division ("Transkrit").
RESPONSIBILITIES
In your new capacity, you will report directly to me and maintain your primary
physical office at the Transkrit corporate office in Roanoke, Virginia. Your
responsibilities will include:
o continuing oversight and management of all activities of Transkrit and
Label Art, Inc. (including Short Run Labels, Inc.);
o assistance in the development of corporate strategies to maximize
shareholder value of DEC, NFC and its subsidiaries;
o assistance in the identification, analysis and purchase of suitable
acquisition targets, other business combinations and/or outsourcing
candidates; and
o other responsibilities as assigned by me or the Board of Directors of
DEC or NFC.
<PAGE>
Mr. Jack Resnick
Page 2
CASH COMPENSATION
Your base compensation expressed in annual terms will be $225,000, paid weekly.
An appraisal of your performance pursuant to an agreed upon annual plan will
form the basis for any increase in this base compensation. Such an increase
will be subject to approval by the Compensation Committee of the Board of
Directors of DEC or NFC ("Compensation Committee").
You will be eligible to earn incentive cash compensation on an annual basis of
up to a maximum of 40% of your base compensation. Such incentive cash
compensation will be determined on a pro rated basis for the remainder of fiscal
year 1996 and annually thereafter. The payout under this plan 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 Transkrit (including Label Art, Inc. and
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
normally made in the first quarter of each fiscal year after the close and audit
of the prior fiscal year's operating performance, and are subject to approval by
the Compensation Committee.
INSURANCE, RETIREMENT AND OTHER BENEFITS
You will continue to participate in all insurance, retirement and other benefit
plans including the use of a company automobile as provided by Transkrit prior
to the acquisition by NFC and which were not terminated at the closing of the
acquisition, in each case at the same contribution and/or co-pay levels as
existed prior to the acquisition.
You will be eligible for four weeks of company-paid vacation per year.
STOCK OPTION AND STOCK OWNERSHIP
You will also be granted 58,485 shares of DEC Class A Common Stock, par value
.0001 per share ("Shares"), pursuant to the provisions of the DEC 1996 Stock
Incentive Plan (the "Plan") and award agreements issued under the Plan (the
"Award
<PAGE>
Mr. Jack Resnick
Page 3
Agreements"). Vesting will be in accordance with the terms of the Award
Agreements and Plan. A copy of the Plan and the Award Agreements are enclosed
herewith.
In addition, in the event that DEC is able to repurchase existing Shares from
retired or other stockholders, you will be offered the opportunity to purchase
for cash up to 10,000 Shares at a price equal to the price paid by DEC for the
repurchase of those shares.
Any ownership of Shares will be subject to all terms and conditions of the Award
Agreements and the DEC Stockholders Agreement, a copy of which is enclosed
herewith.
SEVERANCE; NONCOMPETITION
This offer of employment is at the will of the parties. Should NFC choose to
terminate your employment for any reason other than an illegal act or willful
refusal to follow instructions, you would be entitled to continuation of your
then current base compensation for a period of one (1) year from the date of
termination.
You agree to devote your entire business time and attention to the business of
the DEC and NFC and, during the term of your employment with NFC, not to be
engaged in any other business activity other than passive investments in
businesses or enterprises that are not competitive with any business then
engaged in by the DEC or NFC. At no time, whether during the term, or after the
termination, of your employment by NFC shall you disclose to others or use
(other than for the benefit of the DEC and NFC) any information concerning the
DEC or NFC or its finances, its products, procedures or business practices,
except to the extent required in the course of performing duties to NFC during
the term of your employment.
In the event of termination of your employment for whatever reason, you shall
not, for a period of 18 months after termination, directly or indirectly, in any
capacity work for, or otherwise have a financial interest or be engaged in, any
business that prints business forms or direct mail promotional material.
<PAGE>
Mr. Jack Resnick
Page 4
PARTICIPATION AT BOARD OF DIRECTORS MEETINGS
You will the have opportunity to attend all Board of Directors meetings as a
non-voting participant, unless specifically restricted from doing so by the
order of the Chairman of the Board of Directors.
I believe this constitutes a complete summary of our discussions regarding your
employment with NFC. If you are in agreement with the provisions of this offer,
please indicate by countersigning this letter. A copy of the countersigned
letter will be provided for your files.
Jack, I am extremely pleased that you have agreed to remain with Transkrit and
to join the key management team at NFC. I am looking forward to working with
you and am confident that your efforts will have a major positive impact on the
continued development of the value of the DEC and NFC.
Sincerely,
NATIONAL FIBERSTOK CORPORATION
Robert M. Miklas
President & CEO
/s/ Jack Resnick
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Jack Resnick
Date:
<PAGE>
DEC INTERNATIONAL, INC.
1996 INCENTIVE COMPENSATION PLAN
EXECUTIVE: JACK RESNICK
PRESIDENT & CEO - TRANSKRIT INCENTIVE MAXIMUM: 40%
CATEGORY COMPONENT 1995 THRESHOLD TARGET INTERIM PROJECTED
WEIGHT ACTUAL (MINIMUM) MAXIMUM) YTD EST AWARD
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EBITDA
(TRANSKRIT/
LABEL ART) 70.0% .70*TARGET
ALL OTHER 30.0%
SAFETY
ACQUISITIONS
DISCRETIONARY
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TOTAL 0.0%
NOTE: NO AWARD CAN BE EARNED ON "ALL OTHER" GOAL COMPONENTS UNLESS DIVISION
THRESHOLD EBITDA IS ATTAINED.