Exhibit 10.15
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”), dated as of December 30, 2005
between Luca C. Naccarato (the “Executive”) and SGS
International, Inc., a Delaware corporation (the
“Company”), recites and provides as follows:
WHEREAS, the Company and the
Executive wish to set forth the terms of Executive’s
employment with the Company; and
NOW, THEREFORE, in consideration of
the foregoing premises and the mutual covenants herein, the receipt
and sufficiency of which are hereby acknowledged by each of the
parties, the Company and the Executive agree as follows:
1. Employment.
(a) Position . On the terms
and subject to the conditions set forth herein, the Company agrees
to employ the Executive as Executive Vice President of the Company
and President of SGS Canada throughout the Employment Term (as
defined below). At the request of the Chief Executive Officer and
without additional compensation, the Executive shall also serve as
an officer and/or director of any or all of the subsidiaries of the
Company.
(b) Duties and
Responsibilities . The Executive shall have such duties and
responsibilities that are consistent with the Executive’s
position as the Chief Executive Officer determines and shall
perform such duties and carry out such responsibilities to the best
of the Executive’s ability for the purpose of advancing the
business of the Company and its subsidiaries. The Executive shall
report to the Chief Executive Officer of the Company. Subject to
the provisions of Section l(c) below, during the Employment Term
the Executive shall devote the Executive’s full business
time, skill and attention to the business of the Company and its
subsidiaries, and, except as specifically approved by the Chief
Executive Officer, shall not engage in any other business activity
or have any other business affiliation.
(c) Other Activities .
Anything in this Agreement to the contrary notwithstanding, as part
of the Executive’s business efforts and duties on behalf of
the Company, the Executive may participate in social, charitable
and civic activities, and, if specifically approved by the Chief
Executive Officer, the Executive may serve on the boards of
directors of other companies, provided that such activities
do not unreasonably interfere with the performance of and do not
involve a conflict of interest with the Executive’s duties or
responsibilities hereunder.
2. Employment Term .
The “Employment Term” hereunder shall commence on the
date set forth above and shall continue in full force and effect
until the fourth (4 l ) anniversary of the date
hereof unless terminated earlier pursuant to the terms and
conditions of this Agreement. The Employment Term will renew
hereunder automatically for successive one-year periods unless
either party gives written notice to the other not less than ninety
(90) days prior to the end of Employment Term hereof (or any
subsequent anniversary, as the case may be) that such party does
not wish the Employment Term to be so extended, and under such
circumstances, the Employment Term and this Agreement will
terminate by its terms, and without liability to either
party, on the fourth anniversary of the date
hereof (or such subsequent anniversary, as the case
maybe).
3. Compensation .
During the Employment Term, the Company will pay and/or otherwise
provide the Executive with compensation and related benefits as
follows:
(a) Base Salary . The Company
agrees to pay the Executive, for services rendered hereunder, an
initial base salary at the annual rate of $225,649 (the “
Base Salary ”). Base Salary will be reviewed annually
throughout the Employment Term by the Board or the Compensation
Committee of the Board of Directors. The Base Salary shall be
payable in equal periodic installments, less any sums which may be
required to be deducted or withheld under applicable provisions of
law. The Base Salary for any partial year shall be prorated based
upon the number of days elapsed in such year.
(b) Bonus Plans . The
Executive shall be eligible to participate in the Company’s
bonus plans for senior management with an annual incentive target
of forty percent (40%) of Base Salary (“ Incentive
Payment ”), subject to achievement of such
program’s objectives and final approval of the
Board.
(c) Benefits . During the
Employment Term (and thereafter to the extent expressly provided
herein), the Executive shall be entitled to participate in all of
the Company’s employee benefit plans applicable to the
Company’s comparable senior executives according to the terms
of those plans.
4. Termination of
Employment .
(a) By the Company For Cause
. The Company may terminate the Executive’s employment under
this Agreement at any time for Cause (as defined in
Section 4(e)) and shall provide written notice of termination
to the Executive (which notice shall specify in reasonable detail
the basis upon which such termination is made). In the event the
Executive’s employment is terminated for Cause, all
provisions of this Agreement (other than Sections 5 through 14
hereof) and the Employment Term shall be terminated. Upon
termination for Cause, the Executive shall be entitled to payment
of the Executive’s earned and unpaid Base Salary to the date
of termination.
(b) Upon Death or Disability
. If the Executive dies, all provisions of Section 3 of this
Agreement (other than rights or benefits arising as a result of
such death) and the Employment Term shall be automatically
terminated; provided, however, that an amount equal to the
earned and unpaid Incentive Payments to the date of death and
earned and unpaid Base Salary to the date of death shall be paid to
the Executive’s surviving spouse or, if none, the
Executive’s estate, and the death benefits under the
Company’s employee benefit plans shall be paid to the
Executive’s beneficiary or beneficiaries as properly
designated in writing by the Executive. If the Executive is unable
to perform the essential functions of the Executive’s job
under this Agreement, with or without reasonable accommodation, by
reason of physical or mental disability or incapacity (
“Disability ”) and such disability or incapacity
shall have continued for any period of one hundred eighty
(180) days, the Company may terminate this Agreement and the
Employment Term at any time thereafter. In such event, the
Executive shall
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be entitled to receive the
Executive’s normal compensation hereunder during said time of
disability or incapacity, and shall thereafter be entitled to
receive the “Disability Incentive Payment” (as
described in the last sentence of this subsection (b)) and accrued
and unpaid Base Salary to the date of termination. The portion of
the payment representing the Disability Incentive Payment shall be
paid in a lump sum determined on a net present value basis, using a
reasonable discount rate determined by the Board. The Disability
Incentive Payment shall be equal to the target Incentive Payment
that the Executive would have been eligible to receive for the year
in which the Employment Term is terminated multiplied by a
fraction, the numerator of which is the number of days in such year
before and including the day of termination of the Employment Term
and the denominator of which is the total number of days in such
year.
(c) By the Company Without
Cause .
(i) The Company may terminate the
Executive’s employment under this Agreement at any time
without Cause (for purposes of clarity, it is acknowledged that
expiration of the Employment Term (including notice of non-renewal)
shall not be considered a termination without Cause), and other
than by reason of the Executive’s death or disability. The
Company shall provide written notice of termination to the
Executive, which notice shall specify the effective date of such
termination and that the termination is without Cause (the “
Termination Date ”). If the Termination Date is later
than the date of the notice, then from the date of the notice
through the Termination Date, the Executive shall continue to
perform the normal duties of the Executive’s employment
hereunder, and shall be entitled to receive when due all
compensation and benefits applicable to the Executive hereunder.
Thereafter, conditioned upon the Executive executing and not
revoking a general release in favor of the Company, the Board and
their affiliates, in a form acceptable to the Company, the Company
shall pay the Executive the amounts set forth in this subsection
(c). Under such circumstances, the Company shall pay the Executive
an amount equal to fifty percent (50%) of the
Executive’s Base Salary for a period of twenty-four
(24) months (the “ Termination Period ”),
in such periodic installments as were being paid immediately prior
to the Termination Date.
(ii) The Company shall pay the
Executive, on the date the Executive would otherwise be paid the
Incentive Payment, an amount equal to the full target Incentive
Payment for the year that includes the Termination Date multiplied
by a fraction, the numerator of which is the number of complete
months in the Termination Period and the denominator of which is
12.
(iii) The Company shall also be
obligated to pay to the Executive earned and unpaid Base Salary to
the Termination Date.
(iv) During the Termination Period,
the Executive and the Executive’s dependents will be entitled
to continued participation in the “employee welfare benefit
plans” (as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974) in which the Executive and
the Executive’s dependents participated on the
Executive’s Termination Date with respect to any such
plans
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for which such continued
participation is allowed pursuant to applicable law and the terms
of the plan. Notwithstanding the foregoing, the coverage or
reimbursements for coverage provided under this subsection
(iv) shall cease if the Executive and/or the Executive’s
dependents become covered under an employee welfare benefit plan of
another employer of the Executive that provides the same or similar
type of benefits.
(d) By the Executive . The
Executive may terminate the Executive’s employment, and any
further obligations which the Executive may have to perform
services on behalf of the Company hereunder at any time after the
date hereof; by sending written notice of termination to the
Company not less than thirty (30) days prior to the effective
date of such termination. During such thirty (30) day period,
at the election of the Company, the Executive shall continue to
perform the normal duties of the Executive’s employment
hereunder, and shall be entitled to receive when due all
compensation and benefits applicable to the Executive hereunder.
Except as provided below, if the Executive shall elect to terminate
the Executive’s employment hereunder (other than as a result
of the Executive’s death or disability), then the Executive
shall be entitled to receive accrued and unpaid Base Salary to the
date of termination, but the Company shall have no further
obligation to make payments or provide benefits to the Executive
under Section 3 hereof. Anything in this Agreement to the
contrary notwithstanding, the termination of the Executive’s
employment by the Executive for Good Reason (as defined in
Section 4(e)), shall be deemed to be a termination of the
Executive’s employment without Cause by the Company for
purposes of this Agreement, and the Executive shall be entitled to
the payments and benefits set forth in Section 4(c) above,
subject to the Executive executing and not revoking a general
release in favor of the Company, the Board and their affiliates, in
a form acceptable to the Company. Notwithstanding the foregoing, in
no event shall any termination of employment by the Executive be
deemed f
