Exhibit 10.15
EXECUTION COPY
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made effective as
of February 6, 2006 by and among Pregis Holding I Corporation,
a Delaware corporation ( “Pregis I” ),
and its wholly owned subsidiaries, Pregis Holding II Corporation, a
Delaware corporation ( “Pregis II” ) and
Pregis Corporation, a Delaware corporation (
“Pregis” ) (Pregis I, Pregis II
and Pregis, collectively, the “Employers”
and individually an “Employer” ), and
Vincent P. Langone ( “Executive”
).
RECITALS
WHEREAS, Executive desires to be
employed by Employers;
WHEREAS, Employers desire to employ
Executive and to utilize his management services as indicated
herein, and Executive has agreed to provide such management
services to Employers; and
WHEREAS, as a condition precedent
and a material inducement for Employers to employ and pay
Executive, Executive has agreed to execute this Agreement and the
Noncompetition Agreement, dated as of the date hereof, between
Pregis I and Executive (the “Noncompetition
Agreement” ), and be bound by the provisions herein
and therein.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
PROVISIONS
1. Term and Duties .
Employers hereby agree to employ Executive as President and Chief
Executive Officer, with customary duties and responsibilities as
presidents and chief executive officers of companies of comparable
size, type and nature, commencing on February 6, 2006 (the
“Start Date” ) and continuing for a
period of three (3) years (the “Initial
Term” ) or until terminated in accordance with this
Section 1 or Section 4. Unless terminated by either
Executive or Employers by written notice delivered at least thirty
(30) days prior to the expiration of the Initial Term,
Executive’s employment shall continue for successive one
(1) year terms (each one (1) year term hereinafter
referred to as a “Subsequent Term” and,
together with the Initial Term, the
“Term” ) until terminated by written
notice delivered at least thirty (30) days prior to the
expiration of the Subsequent Term. Subject to the provisions of
this Agreement, during the Term, Executive shall, to the best of
his skill and ability, devote his efforts and abilities to the
performance of Executive’s duties on behalf of Employers and
to the promotion of their interests consistent with and subject to
the direction and control of the
Board of Directors of each Employer (the
“Board” ). Executive shall report to the
Board and shall devote substantially all of his business time,
energies, attention and abilities to the operation of the business
of Employers and shall not be actively involved in any other trade
or business or as an employee of any other trade or business.
Nothing in this Agreement shall preclude Executive from
(i) engaging in charitable and community affairs,
(ii) managing his personal investments (including acquiring or
retaining securities of other companies and entities, provided such
investments are passive), (iii) continuing to serve on the
boards of directors of entities on which he presently serves (to
the extent such service is not precluded by federal or state law or
by conflict of interest by reason of his positions with Employers)
which do not compete with any Employer, or (iv) subject to
written approval of the Board, serving as a member of boards of
directors of other companies or entities which do not compete with
any Employer, or engaging in other activities which do not compete
with any Employer or do not otherwise conflict with the provisions
of this Agreement, in the case of each of (i) - (iv),
which do not materially interfere with the performance of his
duties hereunder. During the Term, Executive shall be a member of
the Board of Directors of Pregis I and
Pregis II.
2. Compensation During Term
.
(a) Base Compensation . In
consideration of the services to be rendered by Executive during
the Term, Employers shall pay to Executive as base salary $550,000
per year or at such higher rate as shall be determined by the Board
in its sole discretion ( “Base
Compensation” ), payable bi-weekly and prorated for
any partial employment period.
(b) Bonus . Subject to the
limitations set forth in this Agreement, commencing with the fiscal
year beginning January 1, 2006, Executive shall be eligible to
receive an annual lump sum incentive bonus (the
“Incentive Bonus” ) based upon the
achievement of performance goals determined by the Board in
consultation with Executive. The amount of the Incentive Bonus
shall be determined in the manner set forth on Schedule A hereto.
For the fiscal year beginning January 1, 2006, notwithstanding
the terms set forth on Schedule A, the Incentive Bonus shall be at
least $275,000. The Incentive Bonus shall be paid at the same time
as annual bonuses are paid to executive officers
generally.
3. Benefits .
(a) Executive shall be eligible to
participate in such benefit programs offered by each Employer
(other than bonus plans), such as health, dental, life and
disability insurance, vision, vacations and pension, as are offered
to similarly-situated employees (except in the case of equity-based
incentive plans where awards are subject to Board (or committee
thereof) approval) and in each case on no less favorable terms of
benefits than are generally available to the employees of Employers
(based on seniority and salary level), subject in each case to the
generally applicable terms and conditions of
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the plan, benefit or program in
question. Notwithstanding the foregoing, Executive (and his wife
and other eligible dependents) shall, on the Start Date, be fully
and immediately covered under the Employers’ medical and
health plans without regard to waiting periods or exclusions for
pre-existing conditions.
(b) Employers shall reimburse
Executive for all reasonable expenses incurred by him in the course
of performing his duties under this Agreement which are consistent
with Employers’ policies in effect from time to time with
respect to travel (including travel at reasonable intervals between
Executive’s residence in New Jersey and Chicago, Illinois),
entertainment and other business expenses, subject to
Employers’ requirements with respect to reporting,
documentation and approval of such expenses.
(c) During the Term, Employers shall
pay to Executive (i) up to $25,000 per year toward the payment
of premiums on life insurance policies currently in effect for the
benefit of Executive and (ii) up to $11,000 per year toward
the payment of premiums on disability policies currently in effect
for the benefit of Executive.
(d) During the Term, Employers shall
(i) lease an automobile to Executive at a cost to the Employer
of not more than $1,000 per month; and (ii) pay Executive the
reasonable costs of maintaining a residence in the metropolitan
Chicago area (not to exceed approximately $5,000 per month). Prior
to executing a lease for such residence, Executive shall consult
with the Board in respect of the terms thereof.
(e) During the Term, Executive shall
be entitled to paid vacation and holidays in accordance with
Employers’ policy for senior executives.
4. Termination .
Executive’s employment shall terminate upon the first to
occur of the following (each, a “Termination
Date” ):
(a) The expiration of the
Term;
(b) Executive’s death or
disability (mentally, physically or emotionally), so that Executive
cannot substantially perform his duties hereunder for a period of
135 consecutive days or for 180 days during any 365 day period
during the Term;
(c) Executive’s voluntary
termination of his employment for Good Reason (as hereinafter
defined) upon written notice to the Employers within twenty
(20) days of the event constituting Good Reason, or for any
other reason upon not less than ten (10) business days’
written notice to Employers; or
(d) Employers’ termination of
Executive’s employment with or without Cause (as hereinafter
defined).
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5. Termination Payments
.
(a) Except as otherwise provided
herein, if Executive’s employment is terminated pursuant to
Section 1 by thirty (30) days’ prior written notice
or pursuant to Section 4, Executive’s Base Compensation
and other compensation and benefits, if any, shall terminate on the
Termination Date.
(b) Upon termination of
Executive’s employment without Cause or with Good Reason,
Employers shall be obligated, in lieu of any other remedies
available to Executive, to pay Executive (A) an amount equal
to 1.5 times his then current Base Compensation (the
“Termination Payment” );
(B) (i) if the Termination Date occurs during the months
of January-June of the fiscal year, a pro rata Incentive Bonus for
the fiscal year in which the termination occurs (the
“Target Pro Rata Incentive Payment” ),
based on Executive’s target Incentive Bonus for such fiscal
year and assuming that the Employers attain their budgeted
performance goals for such fiscal year at 100%; or (ii) if the
Termination Date occurs during the months of July-December of the
fiscal year, a pro rata Incentive Bonus for the fiscal year in
which the termination occurs (the “Actual Pro Rata
Incentive Payment” ), based on Employers’
actual performance through the end of such fis
