Personal
and Confidential
Mr. Paul
Quick
4000 West 110 th Street
Leawood, KS 66211
Subject to and conditioned upon approval by the
Human Resources Committee (the “Committee”) of the
Board of Directors of CSS Industries, Inc. (“CSS”), we
are pleased to extend an offer of employment to you as President of
Paper Magic Group, Inc. (“PMG”). You acknowledge and
agree that there are no other valid oral or written agreements
relating to the terms and conditions of your employment with PMG as
its President. You further represent and covenant to PMG that you
are not subject or a party to any employment agreement,
non-competition covenant, understanding or restriction which would
prohibit or restrict you from executing this letter and performing
all duties and responsibilities incidental to the position of
President of PMG, other than certain non-disclosure and
non-solicitation restrictions specifically set forth in a letter,
dated June 4, 2008, to you from your former employer, a copy
of which you have provided to us. In serving as President of PMG,
we understand and expect that you will not disclose or use any
proprietary or confidential information, data, developments or
trade secrets belonging to your former employer or any of its
subsidiary or affiliated companies, and you agree not to disclose
or use any such proprietary or confidential information, data,
developments or trade secrets.
1. Contract Term — The term
of your employment will be three (3) years, commencing
September 8, 2008 and ending September 7, 2011, unless
terminated earlier by you or by PMG at any time as provided herein.
Thereafter, your employment status with PMG will continue to be
that of an employee at-will, subject to termination by either you
or PMG at any time.
2. Compensation — Subject to
and conditioned upon approval by the Committee, the compensation
package for this position will be as follows:
A. Base Salary — A base
salary in the gross amount of Three Hundred Thousand Dollars
($300,000) per annum payable at such times as PMG pays its
executives. There will be an annual performance review thereafter
and you will then be considered for an increase in base salary,
commencing April 1, 2009, consistent with the then current PMG
policy.
B. Incentive Compensation —
For PMG’s current fiscal year ending March 31, 2009, you
will continue to be eligible to participate in the Management
Incentive Plan (“MIP”). For purposes of calculating
your potential 2009 fiscal year incentive compensation, and
depending on the extent of achievement of certain individual, PMG
and CSS objectives, you will have the potential of earning
incentive compensation based upon 80% of your base salary specified
in Section 2.A. above, prorated for the remaining portion of
the 2009 fiscal year.
Paul Quick
July 25, 2008
Page 2
For PMG’s subsequent fiscal years,
depending on the extent of achievement of certain individual, PMG
and CSS objectives, you will have the potential of earning for a
full fiscal year period incentive compensation with a target
opportunity of up to 80% of your then base salary. The financial
target objectives of your potential subsequent fiscal year
incentive compensation will be determined based upon the applicable
actual full fiscal year financial results of PMG and of
CSS.
C. Stock Option Grant — We
will recommend that a stock option will be granted to you to
acquire 10,000 shares of CSS Common Stock, which recommendation
will be provided to the Committee for consideration at the next
available date upon which the Committee considers equity grant
recommendations after the date upon which you commence employment
with PMG. This grant will in all respects be subject to and in
accordance with the provisions of the CSS 2004 Equity Compensation
Plan, and the terms of the grant letter to be provided to you at
the time of the grant.
D. Company Automobile — You
will be provided for your use a PMG-owned or leased automobile
comparable to the owned or leased automobiles then made available
by CSS’ affiliates to President-level officers of such
affiliates.
E. Vacation — You will be
eligible to accrue four (4) weeks vacation each calendar year,
in accordance with the applicable terms of PMG’s then current
vacation policy.
3. Benefits Coverage; Relocation
-You will be entitled to participate in those PMG benefit programs
available to its officer level personnel in accordance with the
applicable terms of these programs.
You agree that, as a part of our extension and
your acceptance of an offer of employment to you hereunder, you
will relocate your primary residence from 4000 West 110
th Street, Leawood, Kansas (the “Current
Primary Residence”) to the Scranton, Pennsylvania area within
three (3) months after the date hereof. Subject to your
commencement of employment with PMG, you will be eligible to be
reimbursed for expenses incurred on or after the date hereof
associated with the relocation of your primary residence to the
Scranton, Pennsylvania area in accordance with the applicable terms
of the CSS relocation policy, up to a maximum aggregate amount of
$150,000 (which amount shall include all amounts, if any,
determined by CSS, at its sole discretion, intended to be a
“gross up” for certain federal, state and local taxes
to which you may be subject as a result of receiving relocation
expense benefits under the CSS relocation policy). Further, in
addition to the foregoing relocation expense reimbursement, until
the earlier of (a) August 1, 2009 or (b) the date
upon which you complete the sale of your Current Primary Residence,
you will be eligible to be reimbursed for routine, ordinary course
expenses approved in advance by us, up to a maximum aggregate
monthly amount of $5,425, associated with your ownership of the
Current Primary Residence, including without limitation approved
mortgage, utility and routine maintenance expenses. We will
reimburse you for the foregoing approved Current Primary Residence
expenses promptly after you submit to us appropriate documentation
relating to such expenses.
Paul Quick
July 25, 2008
Page 3
4. Employment Status; Severance
Payments — Your employment status with PMG is subject to
termination by either you or PMG at any time. However, in the event
that PMG terminates your employment without cause at any time prior
to September 7, 2011, and subject to your compliance with the
terms and conditions of this letter agreement, PMG will pay you an
amount equal to the greater of (i) one year of your
then-current annual base salary (less applicable tax withholdings
and payroll deductions) or (ii) an amount equal to your
then-current annual base salary (less applicable tax withholdings
and payroll deductions) for the period from the effective date of
such termination to September 7, 2011, such amount reduced by
and to the extent of any earnings and other compensation received
by you or accrued for your benefit for your services (whether as an
employee or as an independent contractor) during the period
commencing on the day following the one year anniversary of your
termination. For purposes of this letter agreement, termination
“without cause” means termination other than
termination resulting from or related to your breach of any of your
obligations under this letter agreement, your failure to comply
with any lawful directive of PMG’s Chairman and Chief
Executive Officer, your failure to comply with CSS’ Code of
Ethics, your conviction of a felony or of any moral turpitude
crime, or your willful or intentional engagement in conduct
injurious to CSS or any of its affiliates.
The foregoing payment obligation is contingent
upon (x) receipt by PMG of a valid and fully effective release
(in form and substance reasonably satisfactory to PMG) of all
claims of any nature which you might have at such time against CSS,
its affiliates and their respective officers, directors and agents,
excepting therefrom only any payments due to you from PMG pursuant
to this Section 4, and (y) your resignation from all
positions of any nature which you may then hold with CSS and its
affiliates. If you are eligible to receive the foregoing payment,
such amount will be paid to you in equal installments, with such
installments bei
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