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EXHIBIT
10.40
March 20, 2008
Mr. Michael Bailey
1655 Mallard Drive
Eagan, MN 55122
Re: Amended and Restated Separation
Agreement
Dear Mike:
This letter agreement (the “
Letter Agreement ”) will confirm our agreement
regarding your separation from service with Visant Corporation
(“ VC ”) and its direct and indirect
subsidiaries, including Jostens, Inc. (“ Jostens
”) (together with VC, “ Visant ”). This
Letter Agreement amends and restates the original copy of this
agreement dated December 28, 2007 (the “ December
2007 Agreement ”), solely for purposes of clarifying the
circumstances under which you will be deemed in breach of this
Letter Agreement, and addressing the disposition of your equity.
Nothing herein modifies the release and waiver of claims given by
you pursuant to the December 2007 Agreement (the “ Release
and Waiver of Claims ”). You will separate from
employment with Visant, and resign from any officer or director
positions you may hold with Visant, effective January 7, 2008
(the “ Effective Date of Separation ”), so long
as your employment is not terminated for by Visant or Jostens for
your Breach prior to such date. Any capitalized terms used but not
defined herein will have the meaning set forth in the 2004 Stock
Option Plan for Key Employees of Visant Holding Corp. (f/k/a
Jostens Holding Corp.) and Its Subsidiaries, that certain
Management Stockholder’s Agreement entered into by and
between you and Jostens Holding Corp. dated March 17, 2005
(the “ Management Stockholder’s Agreement
”), and/or those certain Stock Option Agreements entered into
by and between you and Visant Holding Corp. dated March 17,
2005, as applicable (collectively, the “ Equity
Documents ”). In consideration for the promises and
mutual covenants contained herein, each of you and VC agree to the
following:
1. Part-Time Employment
and Release :
(a) For the period commencing
on the Effective Date of Termination and ending on June 30,
2009, you will be employed by VC as a non-executive, part-time
employee of VC, subject to earlier termination by VC for your
Breach (as defined below) or by you for any reason. As such a
part-time employee, you will provide such services to VC as may
reasonably be requested by Marc Reisch (or such other person as he
may designate) from time to time and will report to Marc Reisch (or
such other person as he may designate). You and VC each acknowledge
that your role as a part-time employee is contemplated to require
only that you perform services from time to time, that such
services as you may perform will be provided primarily by you from
locations other than any Visant property (and that in fact you will
not be provided with any office space at any Visant property) and
that such part-time employment does not constitute employment for
purposes of Section 409A of the Code. However, you shall
devote your full time business efforts to VC during the period of
time you remain employed by VC hereunder.
(b) Subject to the provisions
of Paragraph 1(c) below, VC will pay you, beginning on
Visant’s first payroll date occurring in calendar year 2008
following your Effective Date of Separation and execution and
non-revocation of the Release and Waiver of Claims and ending on
VC’s last payroll date occurring in June of 2009, an
aggregate amount equal to $600,000.00, payable as follows:
(i) $500,000.00 shall be paid in substantially equal
installments, on a bi-monthly basis, during the calendar year 2008
and (ii) the remaining $100,000.00 shall be paid in
substantially equal installments, on a bi-monthly basis, between
January 1, 2009, through June 30, 2009 (each such
installment payment, a “ Severance Payment ”).
Notwithstanding the foregoing, you will forfeit any unpaid
Severance Payments if this Letter Agreement is terminated by VC for
your Breach.
(c) Payment to you of the
Severance Payments provided for in Paragraph 1(b) above shall be
conditioned on your execution of: first, on the Effective Date of
Separation, the Release and Waiver of Claims, and second, the
non-revocation of such Release and Waiver of Claims within the time
period described in paragraph 7 of such Release and Waiver of
Claims. Please do not sign this Letter Agreement or the Release and
Waiver of Claims until your last date of employment with
Jostens.
(d) From January 7, 2008
through the earlier of (x) the date this Letter Agreement is
terminated by VC for your Breach or by you for any reason
(including due to your death or Permanent Disability) or
(y) June 30, 2009, you will continue to be eligible to
participate in the group medical, dental and vision plans provided
to other employees of VC, as they may change from time to time;
except that you will be required to pay the
full cost of the premiums (which includes both the employer and
employee portion) payable in respect of such coverage. Upon
expiration of your services to VC as a part-time employee on
June 30, 2009 (or such earlier date of termination or
resignation, as applicable), you will be entitled to commence
receiving such health insurance benefits as VC may, pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“
COBRA ”), be required to provide to you (upon your
election to receive them), for the full length of the period that
you (and your dependents, as applicable) are eligible under COBRA
to receive such benefits and subject to your payment of the COBRA
premiums. (You hereby acknowledge that you understand, as of the
date hereof,
2
that COBRA permits VC to require you to
pay up to 102% of the cost to VC of providing such benefits to
similarly situated employees of VC). You will be advised separately
of coverage continuation rights under COBRA by Acclaim Benefits,
the COBRA administrator, or its successor. The benefit election
form must be returned to Acclaim Benefits or its successor along
with your premium payments before benefits will be continued. In
all cases, benefits under this paragraph (d) will be subject
to the same terms and conditions of the group benefits plan as
apply to active VC employees (including Visant’s right to
modify or terminate such benefits). In addition to the foregoing,
VC hereby acknowledges and agrees that you will become eligible to
participate in the applicable Jostens’ retiree medical plan
on such date as you achieve age 55, subject to and in accordance
with the terms and conditions of such plan, as the same may be in
effect from time to time, taking into account your service with
Jostens.
(e) For so long as you remain
a part-time employee as provided in Paragraph 1(a) above:
(i) subject to the terms and conditions of the Visant 401(k)
Retirement Savings Plan and applicable law, you will remain
eligible to participate in such plan and (ii) you will only be
permitted to continue to participate in (and become vested under)
any other tax-qualified or non-qualified retirement plans in which
you participated prior to the Effective Date of Separation to the
extent permitted under the terms of such plans and applicable law;
provided that, for clarity, commencement of your benefits under
your Executive Supplemental Retirement Agreement dated
April 23, 1998, as amended, will be triggered by your
separation from employment with Jostens on January 7, 2008,
and you will not be eligible to earn or accrue any additional
benefits thereunder.
(f) At all times during the
period that you are employed by VC as provided in Paragraph 1(a)
above, you will be reimbursed for all reasonable business expenses
that you incur in performing any services under this Letter
Agreement (provided this shall not include auto or gas expenses).
Such expenses will be reimbursed upon presentation by you from time
to time of a documented expense report in the manner required and
otherwise pursuant to applicable business expense reimbursement
policies maintained by VC during your period of part-time
employment with Visant for executive-level employees.
(g) Except as expressly
provided as set forth in this Paragraph 1 above or Paragraph 2
below or as may be required by applicable law, you hereby
acknowledge and agree that at no time while you are employed as
provided in Paragraph 1(a) above will you be eligible or entitled
to participate in any bonus or other incentive compensation plan or
program, retirement, severance, perquisite, fringe benefit or other
employee benefit plan, program or policy maintained by
Visant.
(h) You will be deemed in
“Breach” of this Letter Agreement in the event of
(i) the willful or intentional engaging by you in conduct that
causes material and demonstrable injury, monetarily or otherwise,
to Visant, the Investors or their respective Rule 405
Affiliates, (ii) commission by you of a crime constituting
(A) a felony under the laws of the United States or any state
thereof or (B) a misdemeanor involving moral turpitude, or
(iii) a material
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