AMENDED AND
RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This AMENDED AND
RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the
“Agreement”) is made and entered into on the dates
signified on the signature pages hereto, and is to be effective on
December 19, 2008 (the “Effective Date”), by and
between Ennis, Inc. (“Ennis” or the
“Company”) and Richard L. Travis, Jr.
(“Executive”) (Executive together with Company are the
“Parties”). This Agreement amends and restates that
certain Employment Agreement dated April 21, 2006 between
Richard L. Travis, Jr. and Company (the “Original
Agreement”).
WHEREAS, Company
desires to continue to employ Executive as Vice President-Finance,
Chief Financial Officer and Secretary, and Executive desires to
continue to be employed by Company in said capacity without
distraction by employment-related uncertainties, and Company
considers such employment to be a vital element to protecting and
enhancing the best interests of Company, its subsidiaries and
shareholders;
WHEREAS, Company
and Executive are Parties to the Original Agreement; and
WHEREAS, Company
and Executive wish to amend and restate the Original Agreement in
its entirety to set forth in writing the terms and conditions of
their understandings and agreements whereby Executive will continue
to be employed by Company for the period set forth below commencing
on the Effective Date (subject to the provisions of Section 4
below);
NOW, THEREFORE in
consideration of the mutual covenants set forth herein and other
good and valuable consideration, the Parties agree as
follows:
(a) Company agrees
to employ Executive in the position of Vice President-Finance,
Chief Financial Officer and Secretary (collectively
“CFO”). Executive shall serve and perform the duties
which may from time to time be assigned to him by Company’s
Board of Directors (“Board”), its Chairman or the Chief
Executive Officer (“CEO”). Executive shall exercise the
authority and assume the responsibilities of an executive of a
company the size and nature of Ennis, and other duties as the
Board, its Chairman, or the CEO may prescribe consistent with a
Company the size and nature of Ennis.
(b) Executive
agrees to serve as CFO and agrees that he will devote his best
efforts and all his business time and attention to all facets of
the business of Company and will faithfully and diligently carry
out the duties of CFO. Executive agrees to comply with all Company
policies in effect from time to time, and to comply with all laws,
rules and regulations, including but not limited to, those
applicable to Company.
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 1
(c) Company may
from time to time designate Executive as an officer of any current
or future subsidiary and, in such event, should use its best
efforts to fairly allocate Executive’s compensation among
itself and such other subsidiary or subsidiaries either through
multiple direct payroll checks to Executive or by inter-company
reimbursements, in any case consistent with any applicable
regulations or any regulatory policies.
(d) Executive
agrees to office attendance and hours consistent with the duties
and obligations of an executive of a company of such size and
nature as Ennis, and further agrees to travel as necessary to
perform his duties under this Agreement.
Subject to earlier
termination in accordance with the provisions of Section 4 of
this Agreement, Executive shall be employed by Company for an
initial period commencing on the Effective Date and ending on
December 31, 2009 (the “Term”); provided
that the Term shall be automatically extended for successive
one-year periods thereafter unless, no later than sixty (60) days
prior to the expiration of the Term, or any such successive 1-year
renewal period, either Party shall provide to the other Party
written notice of its or his desire not to extend the
Term.
3.
COMPENSATION, BENEFITS AND REIMBURSEMENT OF EXPENSES
.
Company shall
compensate Executive for the services rendered under this Agreement
as follows:
(a)
Base . During the Term, Company shall pay Executive
an annual base salary to be determined by the Board or the
Compensation Committee thereof (“Base Salary”). The
Base Salary shall initially be set at $355,000 per year. The Base
Salary shall be payable in equal bi-weekly installments (less
applicable withholding) and in accordance with customary payroll
practices of Company for the payment of executives.
(b) Bonus
Opportunities . In addition to the Base Salary, Executive
shall also be eligible to participate in and receive compensation
as may be determined by the Board or the Compensation Committee
thereof (“Discretionary Bonus”), pursuant to Executive
Annual Incentive Plan, or any subsequent plan. The Discretionary
Bonus is not an accrued right under this Agreement.
(c) Stock
Options or Other Form of Additional Consideration .
Executive will be eligible to participate in and may receive from
time to time stock options or other forms of long-term incentive
compensation arrangements subject to the discretion of the Board or
the Compensation Committee thereof.
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 2
The
stipulations regarding the granting of these awards and their
exercise by Executive will be defined in the Long-Term Incentive
Plan or in other plans or actions of the Board or the Compensation
Committee thereof.
(d)
Expenses . Company will pay or reimburse Executive
for all normal and reasonable travel and entertainment expenses
incurred by Executive in connection with Executive’s
responsibilities to Company upon submission of proper vouchers in
accordance with Company’s expense reimbursement policy, as
set forth in the Ennis, Inc. Employee Reimbursable Expense Policy,
effective January 1, 2008, or any thereafter adopted
replacement expense reimbursement policies. Any reimbursement that
would constitute non-qualified deferred compensation subject to
Section 409A shall be subject to the following additional
rules:
(i) No
reimbursement of any such expense shall affect Executives right to
reimbursement of any other such expense in any other taxable
year;
(ii) Reimbursement
of expense should be made, if at all, not later than the end of the
calendar year following the calendar year in which the expense was
incurred; and
(iii) The right to
reimbursement shall not be subject to liquidation or exchange for
any other benefit.
(e)
Benefits . Company shall make available to Executive,
throughout the Term, benefits as are generally provided by Company
to its executive officers, including but not limited to any group,
health, dental, vision, disability or accident, insurance, pension
plan, profit sharing plan, retirement savings plan, 401(k) plan, or
such other benefit plan or policy which may presently be in effect
or which may hereafter be adopted by Company for its executive
officers and key management personnel; provided, however, that
nothing herein contained shall be deemed to require Company to
adopt or maintain any particular plan or policy.
(f)
Vacation . Executive shall be entitled to paid
vacation during each calendar year during the Term, consistent with
policies and amounts then applicable to executive
officers.
(g)
Holidays . Executive shall further be entitled to
paid holidays, personal days, and sick days consistent with the
policies then applicable to executive officers.
(a)
Termination by Company Without Cause . Company may at
any time terminate the Term and Executive’s employment
hereunder without
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 3
Cause (and
other than due to death or Disability). If Company terminates the
Term and Executive’s employment hereunder pursuant to this
Section 4(a) prior to end of the Term, as the same may have been
extended or renewed pursuant to Section 2, Company shall pay
Executive all accrued but unpaid Base Salary, and any earned but
unpaid Discretionary Bonus for the prior year, if any,
(“Accrued Compensation”) as soon as reasonably
practicable following such termination. In addition, and subject to
Section 7, Company shall also pay Executive a severance
payment (the “Severance Payment”) equal to the greater
of the amount of Base Salary through the end of the Term or one
(1) times the sum of (i) Executive’s then annual
Base Salary plus (ii) an amount equal to Executive’s
Discretionary Bonus for the immediately preceding fiscal year. In
addition, in the event of a termination pursuant to this Section
4(a) or Section 4(c) below, any unvested stock options or other
equity-awards granted to Executive under any plan, initiative, or
award plan previously or subsequently adopted by Company that are
outstanding as of the date of such termination shall become fully
vested and nonforfeitable. However, notwithstanding any other
provision of this Section 4(a), any such stock options granted
to Executive that remain unexercised as of the date of their
expiration will expire in accordance with the terms of the
applicable plan and the relevant stock option agreement. Subject to
Sections 4(j) and 7, the Severance Payment will be paid out in
bi-weekly payments over a period of one (1) year in accordance
with the ordinary payroll practices and deductions of
Company.
(b)
Termination by Company for Cause . Company may
terminate the Term and Executive’s employment hereunder at
any time for Cause. Upon termination of the Term and
Executive’s employment hereunder by Company for Cause,
Company shall promptly pay Executive his Accrued Compensation. A
termination for Cause may be for one or more of the following
reasons, which shall be defined as “Cause:”
(i) Conduct by
Executive constituting a material act of willful misconduct in
connection with the performance of his duties, including, without
limitation, violations of Company’s policies on sexual
harassment, ethics, or any other policies then in effect;
misappropriation of funds or property of Company or any of its
affiliates other than the occasional, customary and de minimis use
of Company property for personal purposes; or other willful
misconduct that is below normal industry standards, as determined
in the sole reasonable discretion of Company;
(ii) Continued
willful and deliberate non-performance by Executive of his duties
hereunder (other than by reason of Executive’s physical or
mental illness, incapacity, or disability) where such
non-performance continue for more than ten (10) days following
written notice of such non-performance unless ten (10) days
notice would be futile in correcting issues related to
non-performance;
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 4
(iii)
Executive’s refusal or failure to follow lawful directives
where such refusal or failure has continued for more than ten
(10) days following a written notice of such refusal or
failure unless ten (10) days notice would be futile in
correcting issues related to non-performance;
(iv) A criminal or
civil conviction of Executive, a plea of nolo contendere by
Executive, or other conduct by Executive that, as determined in the
sole reasonable discretion of the Board, has resulted in, would
result in, if Executive were retained in his position with Company,
material injury to the reputation of Company, including, without
limitation, conviction or fraud, theft, embezzlement or a crime
involving moral turpitude;
(v) A material
breach by Executive of any of the provisions of this
Agreement;
(vi) Ongoing
alcohol/drug addition and a failure by Executive to successfully
complete a recovery program; or
(vii) Intentional
wrongful disclosure of confidential information of Company or
engaging in wrongful competitive activity with Company.
(c)
Termination by Executive for Good Reasons . Executive
may terminate the Term and Executive’s employment hereunder
for “Good Reason” (as defined below), after providing
thirty (30) days written notice to Company, which identifies
the Good Reason for Executive’s termination. Upon termination
of the Term and Executive’s employment hereunder by Executive
for Good Reason, Company shall pay Executive:
(i) His Accrued
Compensation, to be paid as soon as reasonably practicable
following such termination; and
(ii) Subject to
Sections 4(j) and 7, the Severance Payment, in periodic bi-weekly
payments over a period of one (1) year in accordance with the
ordinary payroll practices and deductions of Company.
Good
Reason means any of the following reasons:
(i)
Executive’s removal from his position as CFO other than due
to termination of the Term and Executive’s employment
hereunder pursuant to Section 4(a) and (b), (d), or (e) of
this Agreement; or
(ii) Company fails
to make any payment to Executive required to be made under the
terms of this Agreement, as such failure is not cleared within
twenty (20) days after Executive provides written notice to
Company that provides reasonable detail and nature of the
payment.
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 5
(d)
Termination By or of Executive after Change of Control .
If at any time during the period commencing 90 days prior to a
Change of Control Event and ending 12 months after the Change of
Control Event (the “Change of Control Period”), the
Executive’s employment is terminated, other than by death,
either (i) by the Company other than for Cause as provided in
Section 4(b), or (ii) by the Executive for any reason,
then in addition to any other amounts payable to the Executive
pursuant to this Agreement, other than the Severance Payment, the
Company shall pay to Executive, in one lump-sum payment within
30 days after the date of such termination, Accrued
Compensation plus an amount equal to two and one half times (2.5x)
the sum of (x) Executive’s then annual Base Salary plus
(y) and an amount equal to Executive’s Discretionary
Bonus for the immediately preceding fiscal year (the “Change
of Control Severance Payment”). Subject to Section 4(j), the
Change of Control Severance Payment shall be paid in periodic
bi-weekly payments over a period of one (1) year in accordance
with the ordinary payroll practice of Company. In addition, any
unvested stock options or other equity-awards granted to Executive
under any plan, initiative, or award plan previously or
subsequently adopted by the Company that are outstanding as of the
date of such termination shall become fully vested and
nonforfeitable; provided that any such stock options granted to
Executive that remain unexercised as of the date of their
expiration will expire in accordance with the terms of the
applicable plan and the relevant stock option agreement. For
purposes of this agreement, a “Change of Control Event”
shall be deemed to have taken place if one or more of the following
occurs:
(i) Any person or
entity other, as that term is used in Section 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, (other than a qualified
benefit plan of Company or an affiliate of Company) becomes or is
discovered to be a beneficial owner (as defined in Rule 13d-3
under the Exchange Act as in effect on the date hereof) directly or
indirectly or securities of Company representing 30% or more of the
combined voting power of Company’s then outstanding
securities (unless such person is known by Executive to be already
such beneficial owner on the date of this Agreement);
(ii) Individuals
who, as of the Effective Date hereof, constitute the Board of
Directors of Company cease for any reason to constitute at least a
majority of the respective Board of Directors, unless any such
change is approved by a unanimous vote of the respective Board of
Directors in office immediately prior to such cessation;
(iii) The Company
or any of its affiliates shall (in a single transaction or a series
or related transactions) issue shares, sell or purchase assets,
engage in a merger or engage in any other transaction immediately
after which securities of the Company representing 50% or more of
the combined voting power of the then outstanding securities of the
Company
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 6
shall be
ultimately owned by person(s) who shall not have owned such
securities prior to such transaction or who shall be a party to
such transaction;
(iv) The Company
and its affiliates shall sell or dispose of (in a single
transaction or series of related transactions) business operations
which generated a majority of the consolidated revenues (determined
on the basis of Company’s four most recently completed fiscal
quarters for which reports have been filed under the Exchange Act)
of Company and its subsidiaries immediately prior
thereto;
(v) The
Company’s Board of Directors shall approve the distribution
to the Company’s shareholders of all or substantially all of
Company’s net assets or shall approve the dissolution of the
Company; or
(vi) Any other
transaction series of related transactions occur which have
substantially the effect of the transactions specified in any of
the preceding clauses in this sentence.
If
Executive’s employment is not terminated during the Change of
Control Period, then the rights and obligation of the parties for
the balance of the term of this Agreement shall be governed by this
Agreement exclusive of the provisions contained in this Section
4(d) except that this Section 4(d) shall continue and become
applicable for the term of this Agreement if a subsequent Change of
Control Event occurs.
(e)
Termination due to Disability . Company may terminate
Executive’s employment hereunder due to Executive’s
“Disability.” Executive shall be deemed to have
sustained a “Disability” if he shall have been unable
to perform his duties for more than ninety (90) days in any
twelve (12) month period. Upon termination of
Executive’s employment hereunder pursuant to this
Section 4(e), Company shall promptly pay Executive his Accrued
Compensation and any payments to which he may be entitled under any
applicable employee benefits plan (according to the terms of such
plans and policies).
(f)
Death . The Term and Executive’s employment
hereunder will terminate automatically upon Executive’s
death. Upon termination of the Term and Executive’s
employment hereunder because of Executive’s death, Company
shall promptly pay Executive’s estate his Accrued
Compensation, and any payments to which Executive’s spouse,
beneficiaries or estate may be entitled under any applicable
employee benefit plan (according to the terms of such plans and
policies).
(g)
Termination COBRA Payment . Upon termination of the
Term and Executive’s employment hereunder pursuant to
Sections 4 (a), (c), (d) or (e), Company shall pay the
cost to Executive as such costs become due for
AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT/TRAVIS — Page 7
continuation
coverage under COBRA (hereinaf
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