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EXHIBIT
10.42
EMPLOYMENT
AGREEMENT
Timothy M.
Larson
This EMPLOYMENT AGREEMENT
(the “ Agreement ”) is dated as of
January 7, 2008 (the “ Effective Date ”) by
and between Jostens, Inc. (the “ Company ”), a
wholly owned subsidiary of Visant Corporation (“
Visant ”) and Timothy M. Larson (the “
Executive ”).
WHEREAS, as of the Effective
Date, the Company desires to employ Executive and to enter into an
agreement embodying the terms of such employment and Executive
desires to accept such employment and enter into such an
agreement.
NOW, THEREFORE, in
consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as
follows:
1. Term of Employment
. Subject to the provisions of Section 7 of this Agreement,
Executive shall be employed by the Company for a period commencing
on the Effective Date and ending on the fifth anniversary of the
Effective Date (the “ Initial Term ”) ,
on the terms and subject to the conditions set forth in this
Agreement. Following the Initial Term, the term of
Executive’s employment hereunder shall automatically be
renewed on the terms and conditions hereunder for additional
one-year periods commencing on each anniversary of the last day of
the Initial Term (the Initial Term and any annual extensions of the
term of this Agreement, subject to the provisions of Section 7
hereof, together, the “ Employment Term ”),
unless either party gives written notice of non-renewal at least
sixty (60) days prior to such anniversary. Any such written
notice by the Company of non-renewal shall be deemed to constitute
a termination by the Company without Cause under Section 7(c)
of this Agreement.
2. Position
.
a. During the Employment
Term, Executive shall serve as the President and Chief Executive
Officer of the Company. In such position, Executive shall have such
duties and authority as determined by the Chief Executive Officer
of Visant, or such other party as he or the Board of Directors of
Visant (the “ Board ”) shall designate from time
to time and commensurate with the position of president of a
company of similar size, structure and nature to that of the
Company. During the Employment Term, the Executive shall report to
the Chief Executive Officer of Visant or such other party as he or
the Board shall designate from time to time.
b. During the Employment
Term, Executive will devote Executive’s full business time
and reasonable best efforts to the performance of Executive’s
duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would
conflict or interfere in any material respect with the rendition of
such services either directly or indirectly, without the prior
written consent of the Board; provided that nothing herein
shall preclude Executive, subject to the prior approval of the
Board, from accepting appointment to or continue to serve on any
board of directors or trustees of any business corporation or any
charitable organization ; provided , further ,
in each case in the aggregate, that such activities do not conflict
or interfere with the performance of Executive’s duties
hereunder or conflict with Section 8.
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3. Base Salary .
During the Employment Term, the Company shall pay Executive a base
salary at the annual rate of $650,000, payable in substantially
equal periodic payments in accordance with the Company’s
practices for other executive employees, as such practices may be
determined from time to time. Executive shall be entitled to such
increases in Executive’s base salary, if any, as may be
determined from time to time in the sole discretion of the Board,
which shall at least annually following June 2009 review
Executive’s rate of base salary to determine if any such
increase shall be made. Executive’s annual base salary, as in
effect from time to time hereunder, is hereinafter referred to as
the “ Base Salary .”
4. Annual Bonus .
During the Employment Term, Executive shall be eligible to earn an
annual bonus award between 0% and up to 127% of Executive’s
Base Salary in respect of each fiscal year of the Company (an
“ Annual Bonus ”), with a target amount equal to
85% of Executive’s Base Salary (the “ Target
Bonus ”) (with a maximum opportunity equal to 127% of
Executive’s Base Salary (increasing in linear progression for
performance above 100% and up to 150% of the performance targets)
based upon achievement of certain “stretch” targets to
be established by the Board annually in consultation with the
Executive), payable upon the Company’s achievement of certain
performance targets (of which no less than 67% shall be weighted
based on EBITDA (as such term is defined in that certain Stock
Option Agreement dated March 17, 2005 (covering
Executive’s stock options that vest based on Company
performance) (the “Option Agreement” )) for each
fiscal year of the Company (each, a “ Fiscal Year
”), with the balance of such performance targets to be based
on other metrics established by the Board from year to year. The
Annual Bonus shall be payable under the Company’s management
incentive compensation plan, or any successor thereto (the “
Incentive Plan ”), on such terms and at such time(s)
as annual bonuses are otherwise payable thereunder. In addition to
the foregoing, Executive shall continue to be eligible for the
extraordinary bonuses as set forth in, and subject to the terms of,
that certain letter agreement (the Letter Agreement ”)
entered into between Visant Corporation (“ Visant
”) and Executive, dated October 2, 2006.
5. Employee Benefits;
Business Expenses .
a. Employee Benefits .
During the Employment Term, Executive and his dependents shall be
entitled to participate in the Company’s welfare benefit
plans, fringe benefit plans and qualified and nonqualified
retirement plans (the “ Company Plans ”) as in
effect from time to time as determined by the Board (collectively,
the “ Employee Benefits ”), on the same basis as
those benefits are made available to the other senior executives of
the Company, in accordance with the Company’s policies as in
effect from time to time, including the senior executive medical
allowance and physical exam program on the same terms as offered to
other senior executives of Visant from time to time. In addition,
Executive shall continue to be entitled to benefits under
Executive’s Executive Supplemental Retirement Agreement dated
March 25, 2004, subject to and in accordance with its
terms.
b. Perquisites .
During the Employment Term, Executive shall be entitled to receive
such perquisites as are made available to other senior executives
of the Company in accordance with the Company’s policies as
in effect from time to time as determined by the
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Board; provided that Executive
shall be entitled to (i) not less than four weeks of paid
vacation per annum, which shall be subject to the Company’s
vacation policy applicable to the other senior executives of the
Company and in accordance with the Company’s policies as in
effect from time to time, (ii) reimbursement for financial
counseling services (including financial planning, tax preparation,
estate planning, and tax and investment planning software) in an
amount not to exceed $1,500 annually and (iii) a monthly car
allowance of $1,800 to commence May 1, 2008 (until such time
as this allowance shall commence, Executive shall continue to have
the use of Executive’s Company-leased vehicle).
c. Business Expenses .
During the Employment Term, reasonable business expenses incurred
by Executive in the performance of Executive’s duties
hereunder shall be reimbursed by the Company in accordance with the
Company’s policies applicable to senior executive officers of
the Company.
6. Phantom Stock Award
. Executive shall be granted, promptly following the Effective
Date, a target award of up to 5,000 shares of phantom stock (a
threshold opportunity of 2,500 phantom shares and a stretch maximum
amount of up to 10,000 phantom shares) (the “ Award
”), payable in cash on or about March 15, 2010, subject
to the achievement of performance targets established by the Board
relating to the compounded annual growth rate of the
Company’s adjusted EBITDA between December 31, 2007 and
December 31, 2009, and subject to the terms and conditions set
forth in the award letter and the Visant Holding Corp. Long Term
Incentive Plan (the “LTIP” ) to be provided to
you.
7. Termination .
Executive’s employment hereunder may be terminated based on
the terms and conditions of this Section and as described in
subsections 7(a), 7(b) and 7(c), as the case may be;
provided that Executive will be required to give the Company
at least 60 days advance written notice of any resignation of
Executive’s employment (other than due to Executive’s
death or Disability). In the event that the Company terminates
Executive’s employment in accordance with the foregoing
sentence the Company may, in its sole discretion, prohibit
Executive from entering the premises of the Company for all or any
portion of the period after giving him notice of such termination.
Notwithstanding any other provision of this Agreement, the
provisions of this Section 7 shall exclusively govern
Executive’s rights upon termination of employment with the
Company; provided , however, that nothing contained in this
Section 7 shall diminish Executive’s rights with respect
to the Equity Documents, which shall continue to govern
Executive’s equity holdings following any termination in
accordance therewith.
a. By the Company For
Cause or By Executive Without Good Reason .
(i) The Employment Term and
Executive’s employment hereunder may be terminated by the
Company for Cause (as defined below) and shall terminate
automatically upon Executive’s resignation (other than for
Good Reason or due to Executive’s death or Disability);
provided that Executive will be required to give the Company
at least 60 days advance written notice of such
resignation.
(ii) For purposes of this
Agreement, “ Cause ” shall mean
(A) Executive’s willful and continued failure to perform
his material duties with respect to the Company or its
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subsidiaries as provided hereunder which
continues beyond ten (10) days after a written demand for
substantial performance is delivered to Executive by the Company
(the “ Cure Period ”); (B) the willful or
intentional engaging by Executive in conduct that causes material
and demonstrable injury, monetarily or otherwise, to the Company,
the Investors or their respective Affiliates (each as defined in
the Third Amended and Restated 2004 Stock Option Plan for Key
Employees of Visant Holding Corp. (“ VHC ”) and
Its Subsidiaries ( the “Plan”); (C) the
commission by Executive of a crime constituting (x) a felony
under the laws of the United States or any state thereof or
(y) a misdemeanor involving moral turpitude; or (D) a
material breach of this Agreement or any of the Equity Documents by
Executive, including, without limitation, engaging in any action in
breach of the restrictive covenants set forth in Section 8 of
this Agreement or the Equity Documents, that continues beyond the
Cure Period (to the extent that, in the Board’s reasonable
judgment, such breach can be cured). In addition, “ Good
Reason ” shall mean (i) a reduction in the
Executive’s base salary or annual incentive compensation
opportunity (other than a general reduction in base salary or
annual incentive compensation opportunity that affects all members
of senior management in substantially the same proportions,
provided that the Executive’s base salary is not
reduced by more than 10%); (ii) a substantial reduction in the
Executive’s duties and responsibilities, an adverse change in
Executive’s titles as set forth in Section 2 above or
the assignment to Executive of duties or responsibilities
substantially inconsistent with such titles; or (iii) a
transfer of the Executive’s primary workplace by more than
fifty miles outside of Bloomington, Minnesota.
(iii) If Executive’s
employment is terminated by the Company for Cause, or if Executive
resigns other than for Good Reason or as a result of
Executive’s death or Disability, Executive shall be entitled
to receive:
(A) a lump-sum payment of the
Base Salary that is earned by Executive but unpaid as of the Date
of Termination (as such term is defined in Section 7(d)
below), paid within ten (10) business days after the Date of
Termination;
(B) a lump-sum payment of any
Annual Bonus that is earned by Executive in respect of the Fiscal
Year immediately prior to the Fiscal Year in which the Date of
Termination occurs, but unpaid as of the Date of Termination, paid
within ten (10) business days after the Date of
Termination;
(C) a lump-sum payment equal
to all vacation pay that is accrued in respect of Executive’s
unused vacation days as of the Date of Termination, paid within ten
(10) business days after the Date of Termination;
(D) reimbursement for any
unreimbursed business expenses incurred by Executive in accordance
with Company policy referenced in Section 5(c) above prior to
the Date of Termination (with such reimbursements to be paid
promptly after Executive provides the Company with the necessary
documentation of such expenses to the extent required by such
policy);
(E) such Employee Benefits,
if any, as to which Executive may be entitled under the applicable
Company Plans upon termination of employment hereunder, and any
rights under the Letter Agreement, to the extent provided therein
(the payments and benefits described clauses (A) through
(E) hereof being referred to, collectively, as the “
Accrued Rights ).
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Following such termination of
Executive’s employment by the Company for Cause or
resignation by Executive other than for Good Reason or as a result
of Executive’s death or Disability, except as set forth in
this Section 7(a)(iii), Executive shall have no further rights
to any compensation or any other benefits under this
Agreement.
b. Disability or Death
.
(i) Executive’s
employment hereunder shall terminate upon Executive’s death
and may be terminated by the Company if Executive becomes
physically or mentally incapacitated and is therefore unable for a
period of six (6) consecutive months or for an aggregate of
nine (9) months in any eighteen (18) consecutive month
period to perform Executive’s duties (such incapacity is
hereinafter referred to as “ Disability ”). Any
question as to the existen
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