Exhibit 99.1
TRANSITION AND CONSULTING
AGREEMENT
This
Transition and Consulting Agreement (this “ Agreement
”), dated as of the 9th day of September, 2009, by and
between James L. Einstein, an individual resident of the State of
North Carolina (“ Executive ”), and Rock-Tenn
Converting Company, a Georgia corporation (the “
Company ”),
W I T N E S S E T H:
WHEREAS, Executive has decided to retire from his
employment with RockTenn on January 1, 2010; and
WHEREAS, the Company and Executive desire to make
arrangements pursuant to which Executive will assist in transition
following his retirement; and WHEREAS, the Company and Executive
desire to enter into this Agreement pursuant to which Executive
will act as an independent consultant to Alliance Display
commencing on January 2, 2010;
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Executive and the Company hereby agree as
follows:
Section
1.
Transition Period .
From
July 1, 2009 through September 30, 2009, Executive will continue to
serve as Executive Vice President and General Manager of Alliance
Display. From October 1, 2009 through January 1, 2010,
Executive will serve as Chairman of Alliance
Display. During the period from the date hereof through
January 1, 2010, Executive will continue to be an employee of
Rock-Tenn Services Inc., and shall be employed pursuant to the
Employment Agreement (as hereafter defined). Employee
agrees that he desires to participate in this transition and hereby
tenders his resignation as an employee and officer of the Company
or any of its Affiliates (as hereinafter defined) effective as of
the end of the day on January 1, 2010. The Company
hereby accepts such resignation, effective as of the end of the day
on January 1, 2010, agrees to provide the compensation and
consideration reflected in this Agreement, and intends to pursue
this transition in reliance on such resignation. The
Company and Executive intend that Executive have a
“separation from service” from the Company within the
meaning of Section 409A of the Internal Revenue Code of 1986, as
amended, (“ 409A ”) on January 2,
2010.
Section
2.
Term .
The
term during which Executive will serve as a consultant and perform
Consulting Services (as hereinafter defined) under this Agreement
shall commence on January 2, 2010 and shall (subject to Section 6)
continue through December 31, 2010 (the “ Term
”).
Section
3.
Consulting Services; Status.
3.1
Consulting Services . In consideration of the
compensation being paid to Executive hereunder, Executive shall
perform such consulting services relating to Alliance Display as
shall be requested by Chief Executive Officer of RockTenn or the
General Manager of Alliance Display (collectively, “
Consulting Services ”). Executive shall
devote as much of his working hours and attention, energies, skills
and efforts as are necessary to successfully perform his duties
hereunder; provided, however, Executive will not be required to
provide on average more than ten (10) hours of Consulting Services
per week during the Term. Executive will be required to
travel reasonable amounts, but in no event shall he be required to
move his residence from Winston-Salem, North Carolina.
3.2
Status of Executive . Executive will perform all
Consulting Services as an independent contractor, and not as an
employee. As an independent contractor, Executive shall
be responsible for all taxes on amounts that the Company pays to
Executive pursuant to this Agreement. Executive shall
not be entitled to receive any employee benefits or participate in
any benefit plans in connection with his engagement as a consultant
hereunder. At no time during the Term shall Executive
hold himself out as an officer or employee of the Company, and
during such period Executive shall not enter into agreements
(orally or in writing) on behalf of the Company.
Section
4.
Consulting Fee; Expenses.
During
the Term, the Company shall pay Executive a consulting fee of Two
Hundred Thousand Dollars ($200,000) per annum, such amount to be
paid in substantially equal monthly installments (“
Consulting Fee ”). The Company will
reimburse Executive for reasonable out of pocket expenses incurred
on behalf of the Company, subject to the Company’s travel and
expense policy in effect at the time incurred; provided, for
purposes of satisfying the requirements of 409A, (i) no such
reimbursement may be exchanged or liquidated for another payment or
benefit and (ii) any reimbursements of such expenses shall be made
as soon as practicable under the circumstances but in any event no
later than the end of the calendar year following the calendar year
in which the related expenses were incurred. In addition, during
the Term, the Company will pay to Executive Five Hundred Dollars
($500.00) per month to cover office related expenses.
Section
5.
Vesting of Long Term Incentives.
If
Executive’s employment with the Company or any of its
Affiliates continues until January 1, 2010, the following long-term
incentive awards shall vest as follows (subject to approval of the
Compensation Committee):
(a)
the options to acquire 3,967 shares of Class A Common Stock granted
to Executive on or about May 5, 2007, which are scheduled to vest
on May 10, 2010, shall vest on January 1, 2010;
(b)
the 10,200 shares of restricted stock granted to Executive on or
about May 8, 2006, which are scheduled to vest on May 8, 2010,
shall vest on January 1, 2010;
(c)
the 10,200 shares of restricted stock granted to Executive on or
about May 8, 2006, which are scheduled to vest on May 8, 2011,
shall vest on January 1, 2010;
(d) the
4,800 shares of restricted stock granted to Executive on or about
May 10, 2007, which are scheduled to vest on March 31, 2010, shall
vest at “Target” on January 1, 2010; and
(e)
the 4,800 shares of restricted stock granted to Executive on or
about May 10, 2007, which are scheduled to vest on March 31, 2010,
shall vest at “Target” on January 1,
2010.
Section
6.
Termination of Agreement.
The
Company may terminate this Agreement by written notice to Executive
upon the occurrence of any of the following events: (i) any willful
or material act of dishonesty or falsification of reports, records
or information submitted by Executive to the Company; (ii) if
Executive is convicted of having committed a felony or any act or
omission by Executive involving fraud; (iii) any act or omission by
Executive that Executive knew was likely to materially damage the
business of Alliance Display or the Company; (iv) material neglect
of his duties hereunder or Executive’s refusal to perform his
duties or responsibilities hereunder; or (v) for Executive’s
material breach of his obligations under this Agreement or the
Confidentiality Agreement (as hereinafter defined) or the
Employment Agreement or the Noncompetition Agreement (as
hereinafter defined). This Agreement also shall
terminate by written notice to the Company by Executive or at
Executive’s death or upon a determination made in writing and
delivered to the Company and to Executive by a duly licensed
medical doctor (reasonably satisfactory to the Company and
Executive) which concludes that Executive as a result of any
physical or mental condition is no longer able even with reasonable
accommodation to perform the essential functions of his duties and
responsibilities hereunder. Upon any termination of this
Agreement, this Agreement and the parties’ rights and
obligations hereunder shall terminate, except (i) for such rights
and obligations as shall accrue prior to the effective date of
termination of this Agreement and (ii) the provisions of Sections
7, 8, 9 and 10 shall survive termination.
Section
7.
Protection of Inventions.
7.1
Inventions . For purposes of this Agreement,
“Inventions” shall mean any and all developments,
discoveries, concepts, methods, processes, designs, inventions,
ideas, or improvements, whether or not patentable, conceived, made,
implemented, or reduced to practice by Executive, whether alone or
acting with others, that were or are developed (i) while performing
Consulting Services for the Company or its Affiliates, or (ii)
while utilizing, directly or indirectly, the equipment, supplies,
facilities, or trade secret information of the Company or its
Affiliates made available during the Term.
7.2
Disclosure of Inventions . Executive agrees and
covenants that during the Term and for a period of twelve (12)
months following the earlier of (i) the end of the Term or (ii) the
termination of this Agreement, Executive shall promptly report and
disclose to the Company in writing all Inventions.
7.3
Ownership of Inventions . Executive acknowledges
and agrees that all Inventions are the sole and exclusive property
of the Company. Executive agrees to assign, and hereby
automatically assigns, without further consideration, to the
Company any and all rights (moral and otherwise), title, and
interest in and to all Inventions.
7.4
Intellectual Property Rights . The Company, its
successors and assigns, shall have the right to obtain, hold and
claim in its or their own name all patents, patent applications,
copyrights and copyright registrations, trademarks and
service marks and related applications and registrations,
confidential and trade secret rights and any other protection
available to the Inventions.
7.5
Cooperation . Executive agrees to perform, upon
the reasonable request of the Company, during or after his
consultancy, such further acts as may be necessary or desirable to
transfer, perfect, and defend the Company’s ownership of the
Inventions, including but not limited to: (i) executing,
acknowledging, and delivering any requested affidavits and
documents of assignment and conveyance; (ii) assisting in the
preparation, prosecution, procurement, maintenance and enforcement
of all intellectual property rights with respect to the Inventions
in any countries; (iii) providing testimony in connection with
any proceeding affecting the right, title, or interest of the
Company in any Inventions; and (iv) performing any other acts
deemed necessary or desirable to carry out the purposes of this
Agreement. The Company shall reimburse all reasonable
out-of-pocket expenses incurred by Executive at the Company’s
request in connection with the foregoing.
Section
8.
Non-Disparagement
.
Executive hereby agrees and covenants that,
except as may be required by law, he shall not make any statement,
written or verbal, in any forum or media, or take any action, in
disparagement of Alliance Display or Rock-Tenn Company or its
Affiliates, including, but not limited to, negative references to
its products, services, officers or employees.
Section
9.
Company Property.
All of
the property (tangible and intangible) of the Company and its
Affiliates, including documents, correspondence, manuals, computer
programs and software, security badges and passwords, reports,
tapes, photographs, lists, equipment (including computers, cell
phones and PDAs), funds, books, records, files, memoranda, notes,
drawings, plans, sketches, trade secrets, confidential information,
Inventions, and other material and data (together with all copies
thereof), which Executive shall use, prepare or come in contact
with or possession of during the course of, or as a result of, his
performing the Consulting Services, shall, as between the parties
hereto, remain the sole property of the Company. Upon
the end of the Term or upon the demand of the Company, Executive
shall immediately return to the Company all such property or
materials and thereafter shall not remove or cause to be removed
such materials from the premises of the Company.
Section
10. Trade
Secrets, Confidential Information and Nonsolitiation
.
10.1 Trade
Secrets . Executive agrees that he will not use or
disclose any Trade Secrets of which he became aware during his
employment with the Company or its Affiliates or during the course
of his engagement hereunder for so long as they remain Trade
Secrets, regardless of whether the Trade Secrets are in written or
tangible form, without the prior written consent of the
Company. “Trade Secrets” means information
of the Company or its Affiliates, without regard to form,
including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or
suppliers which is not commonly known by or available to the public
and which information: (1) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (2) is the subject
of efforts that are reasonable under the circumstances to maintain
its secrecy.
10.2
Confidential Information . Executive agrees that from the
date hereof and continuing for a period of two (2) years after the
earlier of (i) the end of the Term or (ii) the termination this
Agreement, he shall hold in trust and keep confidential all
Confidential Information of which he became aware during his
employment with the Company or its Affiliates or during the course
of his engagement as a consultant hereunder and will not in any way
disclose, publish or make use of Confidential Information without
the prior written consent of the
Company. “Confidential Information” shall
mean any data or information which is valuable to the Company or
its Affiliates and which is not generally known to competitors of
the Company or its Affiliates, including, without limitation,
general business information, analysis and other information of a
proprietary nature regarding the Company or its Affiliates,
excluding Trade Secrets. Notwithstanding the foregoing,
the term Confidential Information shall not include information
that Executive can show by competent proof: (i) was generally known
to the public at the time the Company or its Affiliate disclosed
the information to Executive; (ii) became generally known to the
public after disclosure by the Company or its Affiliate through no
act or omission of Executive; or (iii) was disclosed to Executive
after the Term by a third party having a bona fide right both to
possess the information and to disclose the information to
Executive, provided such third party is not subject to an
obligation of confidentiality with respect to such
information.
10.3
Noncompetition .
(a) Definitions. The
following terms shall have the following meaning for purposes of
this Section 10.
(i) “Business” shall mean
(A) the design, manufacture, marketing and sale of temporary and
permanent point-of-purchase displays, (B) and lithographic
laminated packaging and (C) the provision of contract packing
services.
(ii)
“Competitor” shall mean any entity that engages in the
business of (A) designing, manufacturing, marketing and selling
temporary and permanent point-of-purchase displays, (B)
lithographic laminated packaging or (C) providing contract packing
services, including but not limited to the following entities and
their
