Exhibit 10.43
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and among Vertis
Inc., (the “Company”), Vertis Holdings, Inc.
(“Holdings”) and Dean D. Durbin (the
“Executive”), dated and effective as of August 31, 2003
(the “Effective Date”).
WHEREAS, the Company wishes to
provide for the continued employment by the Company of the
Executive, and the Executive wishes to continue to serve the
Company, in the capacities and on the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, it is hereby agreed
as follows:
1.
EMPLOYMENT AT WILL. The
employment of the Executive by the Company shall be at will and
shall be terminable by either party upon 30 days prior written
notice or as otherwise set forth in Section 4. The provisions
of Sections 4 and 5 shall govern the consequences of any
termination of the Executive’s employment.
2.
POSITION AND DUTIES.
(a)
During his employment with the
Company, the Executive shall serve as the Chief Financial Officer
of the Company and shall perform such duties and have such
responsibilities as are customarily assigned to such position, and
shall also perform or hold such other duties and responsibilities
with respect to the Company or its subsidiaries not inconsistent
therewith as may from time to time be assigned to him by the Board
of Directors of the Company (the “Board”).
(b)
During his employment with the
Company, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive shall devote his
full business attention and time to the business and affairs of the
Company and shall use all reasonable efforts to carry out his
responsibilities faithfully and efficiently. However, the
Executive may serve on corporate, industry, civic or charitable
boards or committees, so long as these activities do not materially
interfere with the performance of the Executive’s
responsibilities to the Company.
3.
COMPENSATION.
(a)
BASE SALARY. During his
employment with the Company, the Executive shall continue to
receive an annual base salary at the rate in effect on the
Effective Date, as adjusted by the Board from time to time as set
forth below (the “Annual Base Salary”). The
Annual Base Salary shall be paid in accordance with the
Company’s regular payroll practice for its senior executives,
as in effect from time to time. The Annual Base Salary shall
be reviewed for adjustment by the Board at least annually prior to
the end of each calendar year during the Executive’s
employment with the Company.
(b)
ANNUAL CASH BONUS. For fiscal
years during the Executive’s employment with the Company, the
Executive shall participate in an annual cash incentive
compensation plan (currently the Company’s Executive
Incentive Plan), as adopted and approved by the Board from time to
time, with applicable corporate and individual performance targets
and maximum award amounts determined by the Board. The target
bonus of the Executive pursuant to the annual cash incentive
compensation plan shall be determined in accordance with the
Executive Incentive Plan (or the applicable replacement or
successor plan) with respect to each such fiscal year. Any
cash bonuses payable to the Executive will be paid at the time the
Company normally pays such bonuses to its senior executives and
will be subject to the terms and conditions of the applicable
annual cash incentive compensation plan.
(c)
LONG-TERM INCENTIVE
COMPENSATION. During the Executive’s employment with
the Company, the Executive shall be eligible to receive long-term
equity incentive compensation awards (which may consist of stock
options or other types of awards, as determined by the Board in its
discretion) pursuant to the Company’s equity incentive
compensation plans and programs in effect from time to time.
These awards shall be granted in the discretion of the Board and
shall include such terms and conditions (including performance
objectives) as the Board deems appropriate.
(d)
OTHER BENEFITS. During the
Executive’s employment with the Company, the Executive shall
be eligible to participate in the retirement, welfare benefit, and
fringe benefit plans, practices, policies and programs of the
Company (including any medical, prescription, dental, disability,
life insurance, accidental death and travel accident insurance
plans and programs maintained by the Company) to the same extent,
and subject to substantially the same terms and conditions, as
these arrangements are made available generally to the senior
officers of the Company.
(e)
VACATION; EXPENSES. The
Executive shall be entitled to 4 weeks annual paid executive leave
in accordance with the provisions of the Company’s executive
leave policy as in effect from time to time, which shall be taken
at times selected by the Executive with due regard for the business
needs of the Company. The executive leave does not accrue and
may not be carried forward, nor is unused leave paid out upon
termination of employment. The Company shall pay or reimburse
the Executive for ordinary and necessary business expenses incurred
by him in the performance of his duties in accordance with the
Company’s usual policies.
4.
TERMINATION OF
EMPLOYMENT.
(a)
DEATH OR DISABILITY. The
Executive’s employment shall terminate automatically upon the
Executive’s death during his employment with the
Company. The Company shall be entitled to terminate the
Executive’s employment because of the Executive’s
Disability. “Disability” means that (1) the
Executive is permanently disabled within the meaning of the
long-term disability plan of the Company in which the Executive
participates or (2) if there is no such plan in effect, that (i)
the Executive has been absent from the full-time performance of the
Executive’s duties with the Company for a period of 120 days,
(ii) the Company shall have given the Executive a notice
of
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termination for Disability, and (iii) within 30
days after such notice of termination is given, the Executive shall
not have returned to the full-time performance of the
Executive’s duties. The effective date of any such
termination for Disability shall be (A) in the case of a
termination pursuant to clause (1), the date on which the Executive
is determined to be disabled for purposes of such plan or, in the
case of a termination pursuant to clause (2), the date which is 30
days following the notice of termination for Disability (either
such date, the “Disability Effective Time”).
(b)
TERMINATION BY THE
COMPANY.
(i)
The Company may terminate the
Executive’s employment with the Company for Cause or without
Cause. Except as set forth in Section 4(b)(ii),
“Cause” shall mean (i) gross negligence or willful
misconduct by the Executive in connection with the performance of
his duties hereunder that is materially injurious to the Company,
monetarily or otherwise, (ii) the conviction of the Executive by a
court of competent jurisdiction for felony criminal conduct or
(iii) material violation by the Executive of the provisions of
Section 6 of this Agreement, unless, in the case of clauses (i) or
(iii), the event constituting Cause is curable and has been cured
by the Executive within ten business days of his receipt of written
notice from the Company that an event constituting Cause has
occurred and specifying in reasonable detail the actions required
to effect a cure.
(ii)
Notwithstanding the provisions of
Section 4(b)(i), following a Change in Control (as defined herein),
“Cause” shall only mean (A) the conviction of the
Executive by a court of competent jurisdiction for felony criminal
conduct; or (B) the willful engaging by the Executive in fraud or
dishonesty which is demonstrably and materially injurious to the
Company or its reputation, monetarily or otherwise. For
purposes of this Section 4(b), no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless
committed, or omitted by the Executive in bad faith.
(iii)
A termination of the
Executive’s employment for Cause shall require a vote of a
majority of the Board. Following a Change in Control a
termination of the Executive’s employment for Cause shall not
be effective unless it is accomplished in accordance with the
following procedures. The Board shall give the Executive
written notice (“Notice of Termination for Cause”) of
its intention to terminate the Executive’s employment for
Cause, setting forth in reasonable detail the specific conduct of
the Executive that it considers to constitute Cause and the
specific provision(s) of this Agreement on which it relies, and
stating the date, time and place of the Special Board Meeting for
Cause. The “Special Board Meeting for Cause”
means a meeting of the Board called and held specifically and
exclusively for the purpose of considering the Executive’s
termination for Cause. The Special Board Meeting for Cause
must take place not less than thirty business days after the
Executive receives the Notice of Termination for Cause. The
Executive shall be given an opportunity, together with counsel, to
be heard at the Special Board Meeting for Cause. The
Executive’s termination for Cause shall be effective when a
resolution is duly
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adopted at the Special Board Meeting
for Cause stating that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in the Notice of
Termination for Cause and that such conduct constitutes Cause under
the applicable provision of this Agreement.
(c)
TERMINATION BY THE
EXECUTIVE.
(i)
The Executive may terminate
employment with the Company for Good Reason or without Good
Reason. “Good Reason” shall mean the occurrence
of any of the following events, without the Executive’s
consent (other than in connection with an event constituting
Cause): (a) any action by the Company which results in a
significant diminution in the Executive’s position,
authority, duties or responsibilities as contemplated by this
Agreement; (b) a reduction in the Executive’s Annual Base
Salary or the Executive’s annual cash bonus opportunity under
the Executive Incentive Plan (or a successor plan) or a failure by
the Company to timely pay any portion of the Executive’s
current or deferred compensation; (c) the Company requiring the
Executive to be based at an office that is greater than 50 miles
from where the Executive’s office is located at such time
except for required travel on the Company’s business to an
extent substantially consistent with the business travel
obligations which the Executive undertook on behalf of the Company
prior to a Change in Control; or (d) the failure by the Company to
obtain from any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company an express written
assumption and agreement to perform this Agreement in the same
manner and to the same extent that the Company would be required to
perform it if no such succession had taken place unless, in each
case, such action is remedied by the Company within ten business
days after receipt of a Notice of Termination for Good Reason (as
defined below) given by the Executive.
(ii)
Except in the case of a Limited
Change in Control (as defined in Section 5(d) hereof) the Executive
shall automatically be deemed to have Good Reason (“Deemed
Good Reason”) despite the absence of any of the events or
circumstances described in the second sentence of Section 4(c)(i)
for the thirty day period commencing on the first anniversary of a
Change in Control; provided, however, that if the Executive
terminates his employment pursuant to the provisions of this
subparagraph (ii), the Executive’s entitlement to the
benefits provided in Section 5(d) (and the benefits provided in
connection with a termination described in such Section) may be
conditioned by the Company on the Executive continuing to serve the
Company for up to six months following the Notice of Termination
for Good Reason (the “Transition Period”). A
failure by the Executive to comply with such a request absent an
event or circumstance described in the second sentence of Section
4(c)(i) (as such definition is modified by the last sentence of
this Section 4(c)(ii)) will result in the termination being treated
as a termination described in Section 5(a). In the event that
the Company invokes its right to require the Executive to continue
to serve the Company during the Transition Period, the
Executive’s Annual Base Salary shall not be
reduced
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during such period, nor shall the
Executive’s annual bonus opportunity (which bonus, if any,
(i) shall be paid out on a pro-rata basis for the applicable period
during which the Executive was employed, (ii) shall be paid at the
time such bonuses are paid to the Company’s executives
generally and (iii) shall be based upon the Company’s (and if
applicable the Executive’s) scheduled performance against
target applicable to the portion of the performance period during
which the Executive was employed - in each case consistent with
(and not in duplication of) the provisions of Section 5(g)).
Notwithstanding the definition of Good Reason set forth in the
second sentence of Section 4(c)(i), the Company may, in its
discretion, change the Executive’s authority, position,
duties or responsibilities during the Transition Period, without
such change constituting Good Reason.
(iii)
A termination of employment by the
Executive for Good Reason or Deemed Good Reason shall be effected
by giving the Company written notice (“Notice of Termination
for Good Reason”) of the termination, setting forth in the
case of a termination for Good Reason in reasonable detail the
specific conduct of the Company that constitutes Good Reason and
the specific provision(s) of this Agreement on which the Executive
relies. A termination of employment by the Executive for Good
Reason shall be effective ten business days following the date when
the Notice of Termination for Good Reason is given, unless, if
applicable, the event constituting Good Reason is remedied by the
Company prior to that date. Actions by the Company which
constitute Good Reason shall be disregarded in the calculation of
termination benefits described in Section 5.
(iv)
A termination of the
Executive’s employment by the Executive without Good Reason
shall be effected by giving the Company 30 days’ written
notice of the termination.
(d)
DATE OF TERMINATION;
RESIGNATION. The “Date of Termination” means the
date of the Executive’s death, the Disability Effective Time
or the date on which the termination of the Executive’s
employment by the Company for Cause or without Cause or by the
Executive for Good Reason or without Good Reason is
effective. Following termination of the Executive’s
employment for any reason, the Executive shall immediately resign
from the Board and from all other offices and positions he holds
with the Company and its subsidiaries if requested by the
Board.
5.
OBLIGATIONS OF THE COMPANY UPON
TERMINATION.
(a)
TERMINATION BY THE COMPANY (OTHER
THAN TERMINATIONS FOR CAUSE, DEATH OR DISABILITY), OR TERMINATION
BY THE EXECUTIVE FOR GOOD REASON. If the Company terminates
the Executive’s employment for any reason other than for
Cause (other than a termination for Disability or death), or the
Executive terminates his employment for Good Reason, then, except
for any termination to which Section 5(d) applies, the Company
shall pay to the Executive (i) a cash payment equal to two times
the sum of (A) the Executive’s Annual Base Salary immediately
prior to the Date of Termination and (B) the greater of (1) the
annual bonus earned by the Executive for the last completed fiscal
year prior to the fiscal year in which
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the Date of Termination occurs and (2) the
annual bonus the Executive would have earned for the fiscal year in
which the Date of Termination occurs absent such termination (which
amount shall be based upon the Company’s (and if applicable
the Executive’s) actual performance against target (expressed
as a percentage of achievement of targeted performance) applicable
to the portion of the performance period during which the Executive
was employed, with such percentage level of achievement annualized
for the full fiscal year) (the greater of such amounts being
referred to hereafter as the “Applicable Bonus
Amount”); and (ii) any unpaid amounts of the
Executive’s Annual Base Salary for periods prior to the Date
of Termination and earned annual bonuses for completed fiscal years
prior to the Date of Termination. The payment described in
clause (i) of the preceding sentence shall be made ratably over the
two-year period following the Date of Termination, in accordance
with the Company’s normal payroll practices and the payments
described in clause (ii) of the preceding sentence shall be made
within 30 days of the Date of Termination. The Company shall
also provide to the Executive (and, as applicable, his eligible
dependents), in the event of such a termination continued
participation at the Company’s expense in the Company’s
medical, dental, prescription and vision care insurance plans (or
substantially equivalent coverage under an alternative arrangement)
for six months following the Date of Termination (or, if earlier,
until the date the Executive obtains alternative coverage from a
subsequent employer) following which, if no such alternative
coverage has been obtained, the Executive will be entitled to elect
continuation coverage (“COBRA”) in accordance with the
provisions of Section 4980B of the Internal Revenue Code of 1986,
as amended (the “Code”), which COBRA coverage period
shall begin at the close of the period of such continued
participation. For purposes of this Agreement, the
Executive’s employment shall be deemed to have been
terminated within the thirteen month period following a Change in
Control and during the Term by the Company without Cause (and shall
be governed by Section 5(d)), if the Executive’s employment
is terminated by the Company without Cause either (i) during the
120 day period prior to the execution of an agreement, the
consummation of which would result in a Change in
