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EXHIBIT
10.39
December 28, 2007
Mr. Michael Bailey
1655 Mallard Drive
Eagan, MN 55122
Re: 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 ”). 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 Cause by Visant or Jostens 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 Cause 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 (as defined below) 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 your part-time employment with VC is
terminated for Cause by VC or by you for any reason other than due
to your Permanent Disability or death at such time as such
employment ceases for any such reason.
(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, a Release and Waiver of Claims in the form attached
hereto on Appendix A (the “ Release ”), and
second, the non-revocation of such Release within the time period
described in paragraph 7 of such Release. Please do not sign this
Letter Agreement or the Release until your last date of employment
with Jostens.
(d) From January 7, 2008
through the earlier of (x) the date your part-time employment
with VC provided for above is terminated by VC for Cause 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, 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.
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(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.
2. Treatment of
Equity :
(a) Effective as of the
Effective Date of Separation: (i) all then unvested options
that you hold (“ Options ”) to purchase Visant
Holding Corp. Class A Common Stock (“ Visant
Stock ”) will expire and be cancelled without payment;
and (ii) all then vested Options to purchase Visant Stock
(including any such Options that vest based on the performance of
Visant and/or its any of its subsidiaries as of the end of fiscal
year 2007, even if such determination will not be made until the
availability of the VC’s consolidated audit results on or
about March 15, 2008) will remain exercisable through
December 31, 2008, so long as you continue to be
employed as a part-time employee under Paragraph 1(a) until such
date (or if such part-time employment is terminated by VC without
Cause or due to your resignation, death or Permanent Disability,
prior to such date).
(b) In exchange for the
cancellation, on January 1, 2009, of all Options to purchase
Visant Stock that are, as of January 1, 2009, outstanding,
Visant Holding Corp. will pay to you an amount equal to the product
of (x) the excess, if any, of the Fair Market Value (as
determined under the Management Stockholder’s Agreement and
approved by the Visant Holding Corp. Board of Directors or the
compensation committee thereof) of one share of Visant Stock on
December 31, 2008, over the per share exercise price of such
cancelled Options, and (y) the number of shares of Visant
Stock that were subject to such cancelled Options. Such payment
will be made to you following the availability of such Fair Market
Value valuation, on or about April 1, 2009, so long as
you continue to be employed as a part-time employee under Paragraph
1(a) until such date (or if such part-time employment is terminated
by VC without Cause or due to your resignation, death or Permanent
Disability, prior to such date of payment based on the Fair Market
Value of the Visant Stock as of such date of separation of
service).
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(c) On or about April 1,
2009, Visant Holding Corp. will purchase all shares of Visant Stock
then held by you, at a per share purchase price equal to the Fair
Market Value (determined as provided in Paragraph 2(b) above) of
such shares as of December 31, 2008, so long as you
continue to be employed as a part-time employee under Paragraph
1(a) until such date (or if such part-time employment is terminated
by VC without Cause or due to your resignation, death or Permanent
Disability, prior to such date of payment based on the Fair Market
Value of the Visant Stock as of such date of separation of
service).
(d) Until the applicable
dates of the payments provided for in Paragraph 2(b) and (c),
above, respectively, you hereby agree and acknowledge that you will
continue to hold all of your shares of Visant Stock pursuant to the
Management Stockholder’s Agreement and other Equity Documents
and to hold all of your Options to purchase Visant Stock pursuant
to the Equity Documents under which such Options were granted
(subject to the extension of the exercise term of vested Options as
set forth in Paragraph 2(a) above).
3. Accrued Rights upon
Effective Date of Separation : Visant shall pay you, in a
lump sum, all unpaid base salary you earned through the Effective
Date of Separation while still employed as a full-time employee of
Visant, promptly after the Effective Date of Separation. For the
avoidance of doubt, you will not accrue any vacation days for
2008.
4. Withholding;
Set-Off : Notwithstanding any other provision of this
Letter Agreement, Visant may, to the extent permitted by law,
withhold applicable federal, state and local income and other taxes
from any payments due to you hereunder in respect of any payments
and benefits provided to you hereunder in respect of which there
exists an obligation of Visant to withhold taxes or other
amounts.
5. Return of Visant
Property; Expense Reports : On or before the Effective Date
of Separation, you shall return to Visant all documents, manuals,
computers, computer programs, CDs and/or diskettes, customer lists,
notebooks, reports and other written or graphic materials,
including all copies thereof, relating in any way to Visant’s
business and prepared by you or obtained by you from Visant, its
affiliates, clients or its suppliers during the course of your
employmen
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