UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to _________________
Commission File Number 0-20729
PRINTWARE, INC.
______________________________________________________
(Exact name of registrant as specified in its charter.)
Minnesota 41-1522267
_______________________________ __________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1270 Eagan Industrial Boulevard, St. Paul, MN 55121
(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 456-1400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
no par value ("Common Stock")
Indicate by checkmark whether the registrant (1) has filled all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
Yes [ ] No [X]
Based upon the $3.25 per share closing price of the registrant's Common Stock
as of March 15, 2000, the aggregate value of the shares of Common Stock held
by non-affiliates as of such date was approximately $10,645,560.
Common Stock--3,275,557 shares outstanding as of March 15, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Proxy Statement for its 2000 Annual Meeting of Shareholders as
amended and restated by preliminary and additional definitive materials is
incorporated by reference.
The Company's Annual Report on Form 10-K is amended as follows:
The Company has checked the box on the cover page relating to delinquent
filers of Item 405 of Regulation S-K .
Item 14. Item 14 is amended to read as follows:
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Exhibits.
See "Exhibit Index" and attached exhibits filed electronically
herewith on the page following the Signature Page.
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to
Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized.
PRINTWARE, INC.
Registrant
Date: April 10, 2000 By /s/ Daniel A. Baker
___________________
Daniel A. Baker
President & Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Name Title Dates
_____________________ _______________ ______________
/s/ Daniel A. Baker President & Chief April 10, 2000
- -------------------------- Executive Officer
Daniel A. Baker (Principal Executive Officer) ______________
/s/ Thomas W. Petschauer Executive Vice President April 10, 2000
- -------------------------- & Chief Financial Officer
Thomas W. Petschauer (Principal Financial Officer) ______________
/s/ Allen L. Taylor Director of the Board April 10, 2000
- -------------------------- ______________
Allen L. Taylor
/s/ Michael C. Berg Director of the Board April 10, 2000
- -------------------------- ______________
Michael C. Berg
/s/ Victor H. Weiss Director of the Board April 10, 2000
- -------------------------- ______________
Victor H. Weiss
/s/ Brian D. Shiffman Secretary April 10, 2000
- -------------------------- ______________
Brian D. Shiffman
/s/ Cordell E. Lomen Controller April 10, 2000
- -------------------------- ______________
Cordell E. Lomen
PRINTWARE, INC.
EXHIBIT INDEX
Exhibit No. Description
3.1 Company's Articles of Incorporation as amended to date
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 filed on May 13, 1996,
Registration No. 333-03629).
3.2 Company's By-Laws (incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement on Form S-1 filed on May
13, 1996, Registration No. 333-03629).
4.1 Form of common stock certificate (incorporated by reference to
Exhibit 4.1 to Amendment No.1 the Company's Registration
Statement on Form S-1 filed on May June 18, 1996, Registration
No. 333-03629).
10.1* Incentive Stock Option Plan of 1985 (incorporated by reference
to Exhibit 10.1 to the Company's Registration Statement on Form
S-1 filed on May 13, 1996, Registration No. 333-03629).
10.2* 1986 Incentive Stock Option Plan (incorporated by reference to
Exhibit 10.2 to the Company's Registration Statement on Form S-1
filed on May 13, 1996, Registration No. 333-03629).
10.3* 1996 Stock Plan (incorporated by reference to Exhibit 10.3 to
the Company's Registration Statement on Form S-1 filed on May
13, 1996, Registration No. 333-03629).
10.4* 1996 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 10.4 to the Company's Registration Statement on Form S-1
filed on May 13, 1996, Registration No. 333-03629).
10.5* Form of 1996 Bonus Compensation Plan for executive officers
(incorporated by reference to Exhibit 10.5 to the Company's
Registration Statement on Form S-1 filed on May 13, 1996,
Registration No. 333-03629).
10.6* Change in Control Severance Agreement between the Company and
Daniel A. Baker dated April 25, 1996 (incorporated by reference
to Exhibit 10.6 to the Company's Registration Statement on Form
S-1 filed on May 13, 1996, Registration No. 333-03629).
10.6.1* Change in Control Severance Agreement between the Company and
Thomas W. Petschauer dated February 10, 1997, filed
electronically herewith.
10.6.2* Form of Change in Control Severance Agreement between the
Company and Timothy S. Murphy filed electronically herewith.
10.7 Office/Warehouse Lease dated December 22, 1991 between the
Company and Northwestern Mutual Life Insurance Company
(incorporated by reference to Exhibit 10.7 to the Company's
Registration Statement on Form S-1 filed on May 13, 1996,
Registration No. 333-03629).
10.8** Plate Material Agreement dated December 11, 1991 between the
Company and E.J. Gaisser, Inc. (incorporated by reference to
Exhibit 10.8 to the Company's Registration Statement on Form S-1
filed on May 13, 1996, Registration No. 333-03629).
10.9** Supply Agreement dated May 2, 1991 between the Company and
Polychrome Corporation (incorporated by reference to Exhibit
10.9 to Amendment No. 2 to the Company's Registration Statement
on Form S-1 filed on June 27, 1996, Registration No. 333-03629).
10.10** License Agreement dated May 17, 1985 among the Company,
Minnesota Mining and Manufacturing Company and Allen L. Taylor
(incorporated by reference to Exhibit 10.10 to the Company's
Registration Statement on Form S-1 filed on May 13, 1996,
Registration No. 333-03629).
10.11** Purchase Agreement dated January 1, 1995 between the Company and
Deluxe Corporation, as amended December 12, 1995 (incorporated
by reference to Exhibit 10.11 to Amendment No. 2 to the
Company's Registration Statement on Form S-1 filed on June 27,
1996, Registration No. 333-03629).
23.1 Consent of Deloitte & Touch LLP (filed electronically with
initial Form 10-K filing on March 22, 2000).
27 Financial Data Schedule (filed electronically with initial Form
10-K filing on March 22, 2000).
*Indicates Compensatory Agreement
**Certain portions of this Exhibit have been deleted and filed separately with
the Commission pursuant to a request for confidential treatment under Rule
24b-2.
EXHIBIT 10.6.1
CHANGE IN CONTROL
SEVERANCE AGREEMENT
THIS AGREEMENT, by and between Printware, Inc., a Minnesota corporation
with its principal offices at St. Paul, Minnesota ("Printware") and Thomas W.
Petschauer, residing at 10025 Oxborough Road, Bloomington, Minnesota, 55437
(the "Executive"), is made and entered into as of this 10 day of February,
1997.
WHEREAS, the Executive has made and is expected to make, due to
Executive's intimate knowledge of the business and affairs of Printware, its
policies, methods, personnel, and proprietary information, a significant
contribution to the profitability, growth, and financial strength of
Printware; and
WHEREAS, Printware recognizes that the possibility of a Change in
Control may exist, and that such possibility and the uncertainty and
questions which it may raise may result in the departure or the distraction
of the Executive in the performance of his duties, to the detriment of
Printware and its shareholders; and
WHEREAS, it is in the best interests of Printware and its stockholders
to reinforce and encourage the continued attention and dedication of
Executive to his assigned duties without distraction and to ensure the
continued availability to Printware of the Executive in the event of a Change
in Control.
THEREFORE, in consideration of the foregoing and other respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect until such time as Executive ceases to be
employed by Printware and any and all amounts due under this Agreement have
been paid.
2. Change in Control. The rights and benefits provided under this
Agreement shall be effective only upon the occurrence of a Change in Control.
For purposes of this Agreement, a "Change in Control" shall mean a change in
control of Printware which would be required to be reported in response to
Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not Printware is then subject to such
reporting requirement including, without limitation, if:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) who is not, as of the date of this Agreement, a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Printware representing 25% or more of the
combined voting power of Printware's outstanding securities becomes, after the
date of this Agreement, the beneficial owner, directly or indirectly, of
securities of Printware representing 25% or more of the combined voting power
of Printware's then outstanding securities; or
(b) any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act) who as of the date of this Agreement is the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Printware representing 25% or more combined voting power of
Printware's outstanding securities increases at any time after the date of
this Agreement such person's percentage ownership of Printware's outstanding
securities by ten percentage points or more from the level held as of the date
of this Agreement; or
(c) there ceases to be a majority of the Board of Directors of Printware
comprised of: (i) individuals who on the date hereof constituted the Board of
Printware; (ii) individuals who are nominated as part of the management slate
and elected by the shareholders as a member of the Board of Directors in an
uncontested election; and (iii) individuals who after the date hereof are
nominated and elected by a majority of the members of the Board of Directors
who held such office prior to a Change in Control; or
(d) the occurrence of a transaction requiring shareholders' approval for
the acquisition of Printware through purchase of stock or assets or by merger
or otherwise.
3. Termination Following Change in Control. If a Change in Control
occurs during the term of this Agreement, and if Executive's employment is
terminated during the 12 month period following the date of the Change in
Control (i) by Printware other than for Cause, Retirement, or Disability or
(ii) by Executive for Good Reason, then Executive shall be entitled to the
benefits provided below:
(a) Printware shall pay Executive, through the Date of Termination, the
Executive's base salary as in effect at the time the Notice of Termination is
given and any other form or type of compensation and benefit otherwise payable
for such period;
(b) Printware shall pay Executive a severance payment (the "Severance
Payment") equal to 12 months of 125% the Executive's monthly base salary as of
the Date of Termination (base salary shall include any amounts contributed by
the Executive to any cash or deferred arrangement that qualifies under Section
401(k) of the Code or any cafeteria plan under Section 125 of the Code
sponsored by Printware).
The Severance Payment shall be made in a single lump sum within 60 days after
the Date of Termination. The Severance Payment herein shall be in lieu of any
other cash severance benefits payable under any other policy, plan or program
of Printware.
(c) All nonvested options to purchase the capital stock of Printware held
by Executive on the Date of Termination shall immediately vest in full and all
restrictions on any restricted stock held by Executive shall immediately lapse
and Executive shall be entitled to exercise all rights and to receive all
benefits accruing to Executive under any and all Printware stock purchase and
stock option plans or programs, or any successor to any such plans or
programs, for a period of 90 days following the Date of Termination, which
shall be in addition to, and not reduced by, any other amounts payable to
Executive under this Section 3.
(d) Executive shall be entitled to receive all benefits payable to the
Executive under any of Printware's pension, life insurance, medical, health
and accident, disability, deferred compensation, or savings plans in which
Executive was participating immediately prior to the Change in Control, which
shall be in addition to, and not reduced by, any other amounts payable to
Executive under this Section 3.
(e) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 3 be reduced by any compensation earned by Executive as the result of
employment by another employer or by any other amounts of compensation or
benefits payable by Printware after the Date of Termination, or otherwise.
4. Cause and Good Reason Defined.
(a) Cause. Termination by Printware of Executive's employment for
"Cause" during the 12 month period following a Change in Control shall mean
termination due to: (i) gross neglect by Executive of his duties to Printware,
or gross breach by Executive of Printware's reasonable policies that have been
previously communicated to Executive, which in each case is not cured by
Executive within 15 days after written notice by Printware to Executive
describing the gross neglect or gross breach; or (ii) the conviction of the
Executive by a court of competent jurisdiction of felony criminal conduct
relating to his employment by Printware.
(b) Good Reason. Executive shall be entitled to terminate his
employment during the 12 month period following a Change in Control for Good
Reason, which shall mean, without Executive's express written consent, any of
the following:
(i) the failure to elect or reelect the Executive to the offices of
President and Chief Executive Officer of Printware, or a change by Printware
of the Executive's functions, duties or responsibilities which reduces the
responsibility, importance or scope of Executive's position with Printware;
(ii) a reduction by Printware in Executive's annual compensation or
bonus potential in effect immediately prior to a Change in Control;
(iii) the relocation of Printware's principal executive offices to a
location more than fifty miles from their current location, or Printware
requiring Executive to be based anywhere other than Printware's principal
executive offices except for required travel on Printware's business;
(iv) the material reduction by Printware of the benefits enjoyed by
Executive under any of Printware's pension, life insurance, medical, health
and accident, disability, deferred compensation, incentive awards, incentive
stock options, or savings plans in which Executive was participating
immediately prior to the Change in Control, or the material reduction by
Printware of any material fringe benefit enjoyed by Executive immediately
prior to the Change in Control;
(v) the failure of Printware to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 7; or
(vi) any purported termination of Executive's employment which is not
made pursuant to a Notice of Termination satisfying the requirements of
Section 5 (a) below.
Notwithstanding the foregoing, unless the Executive gives a Notice of
Termination satisfying the requirements of Section 5(a) below within 15 days
of the occurrence of an event constituting Good Reason, the Executive shall
have waived his rights under this Agreement for any benefits arising out of
that event.
(c) Disability and Retirement shall have the same meanings as set forth
in Printware's long term disability plan and its retirement plan,
respectively.
5. Termination Procedure; Disputes.
(a) Notice of Termination. Any purported termination of Executive's
employment by Printware or by Executive following a Change in Control shall be
communicated by written Notice of Termination to the other party hereto and
shall indicate the specific termination provision in this Agreement relied
upon and shall set forth the facts and circumstances claimed to provide a
basis for termination of Executive's employment under this Agreement. Notice
of termination and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed to the last known residence address of
the Executive or, in the case of Printware, to its principal office to the
attention of each of the then directors of Printware with a copy to its
Secretary, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
(b) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date the Executive's employment by Printware
ceases, as specified in a Notice of Termination. The Date of Termination
shall be not be less than 10 nor more than 30 days from the date the Notice of
Termination is given.
(c) Disputes Concerning Termination. If, within 10 days after any Notice
of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and no appeal
having been perfected); provided, that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith
and the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute,
Printware shall continue to pay Executive full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
base salary) and continue Executive as a participant in all compensation,
benefit and insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this subsection. Amounts paid under this
subsection are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts under this Agreement.
6. Funding. In order to assure the performance of Printware or its
successor of its obligations under this Agreement, Printware shall deposit in
a so called "rabbi" trust, immediately upon the occurrence of a Change in
Control, an amount equal to the maximum payment that could become payable to
the Executive under Section 3(b) of this Agreement. Under the written
instrument governing the trust, the trustee shall be instructed to pay to the
Executive (or the Executive's legal representative, as the case may be) the
amount to which the Executive shall be entitled under the terms hereof, and
the balance, if any, of the trust not so paid or reserved for payment shall be
repaid to Printware. If and to the extent there are not amounts in trust
sufficient to pay Executive under this Agreement, Printware shall remain
liable for any and all payments due to Executive. In accordance with the
terms of such trust, at all times during the term of this Agreement, Executive
shall have no rights, other than as an unsecured general creditor of
Printware, to any amounts held in trust and all trust assets shall be general
assets of Printware and subject to the claims of creditors of Printware.
Failure of Printware to establish or fully fund such trust shall not be deemed
a revocation or termination of this Agreement by Printware.
7. Successors; Binding Agreement.
(a) Printware will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of Printware to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
Printware would be required to perform it if no such succession had taken
place. Failure of Printware to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Executive to the benefit described in Section 3 herein,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, successors, heirs, and designated
beneficiaries. If Executive should die while any amount would
still be payable to Executive hereunder if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's designated
beneficiaries, or, if there is no such designated beneficiary, to the
Executive's estate.
8. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the parties. No waiver by either party hereto at
any time of any breach by the other party to this Agreement of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or similar time. No agreements or
representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made
by either party which are not expressly set forth in this Agreement. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Minnesota.
9. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PRINTWARE, INC.
/s/ BRIAN D. SHIFFMAN
By_______________________
Its Secretary
EXECUTIVE:
/s/ THOMAS W. PETSCHAUER
_________________________
Thomas W. Petschauer
EXHIBIT 10.6.2
CHANGE IN CONTROL
SEVERANCE AGREEMENT
THIS AGREEMENT, by and between Printware, Inc., a Minnesota corporation
with its principal offices at St. Paul, Minnesota ("Printware") and Timothy S.
Murphy, residing at 1911 Bohland Ave., St. Paul, Minnesota, 55116 (the
"Executive"), is made and entered into as of this __ day of ____________, 2000.
WHEREAS, the Executive has made and is expected to make, due to
Executive's intimate knowledge of the business and affairs of Printware, its
policies, methods, personnel, and proprietary information, a significant
contribution to the profitability, growth, and financial strength of
Printware; and
WHEREAS, Printware recognizes that the possibility of a Change in Control
may exist, and that such possibility and the uncertainty and questions which
it may raise may result in the departure or the distraction of the Executive
in the performance of his duties, to the detriment of Printware and its
shareholders; and
WHEREAS, it is in the best interests of Printware and its stockholders
to reinforce and encourage the continued attention and dedication of
Executive to his assigned duties without distraction and to ensure the
continued availability to Printware of the Executive in the event of a Change
in Control.
THEREFORE, in consideration of the foregoing and other respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect until such time as Executive ceases to be
employed by Printware and any and all amounts due under this Agreement have
been paid.
2. Change in Control. The rights and benefits provided under this
Agreement shall be effective only upon the occurrence of a Change in Control.
For purposes of this Agreement, a "Change in Control" shall mean a change in
control of Printware which would be required to be reported in response to
Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not Printware is then subject to such
reporting requirement including, without limitation, if:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) who is not, as of the date of this Agreement, a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Printware representing 25% or more of the
combined voting power of Printware's outstanding securities becomes, after
the date of this Agreement, the beneficial owner, directly or indirectly, of
securities of Printware representing 25% or more of the combined voting power
of Printware's then outstanding securities; or
(b) any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act) who as of the date of this Agreement is the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Printware representing 25% or more combined voting power of
Printware's outstanding securities increases at any time after the date of
this Agreement such person's percentage ownership of Printware's outstanding
securities by ten percentage points or more from the level held as of the date
of this Agreement; or
(c) there ceases to be a majority of the Board of Directors of Printware
comprised of: (i) individuals who on the date hereof constituted the Board of
Printware; (ii) individuals who are nominated as part of the management slate
and elected by the shareholders as a member of the Board of Directors in an
uncontested election; and (iii) individuals who after the date hereof are
nominated and elected by a majority of the members of the Board of Directors
who held such office prior to a Change in Control; or
(d) the occurrence of a transaction requiring shareholders' approval for
the acquisition of Printware through purchase of stock or assets or by merger
or otherwise.
3. Termination Following Change in Control. If a Change in Control
occurs during the term of this Agreement, and if Executive's employment is
terminated during the 12 month period following the date of the Change in
Control (i) by Printware other than for Cause, Retirement, or Disability or
(ii) by Executive for Good Reason, then Executive shall be entitled to the
benefits provided below:
(a) Printware shall pay Executive, through the Date of Termination, the
Executive's base salary as in effect at the time the Notice of Termination is
given and any other form or type of compensation and benefit otherwise payable
for such period;
(b) Printware shall pay Executive a severance payment (the "Severance
Payment") equal to 12 months of 125% the Executive's monthly base salary as of
the Date of Termination (base salary shall include any amounts contributed by
the Executive to any cash or deferred arrangement that qualifies under Section
401(k) of the Code or any cafeteria plan under Section 125 of the Code
sponsored by Printware).
The Severance Payment shall be made in a single lump sum within 60 days after
the Date of Termination. The Severance Payment herein shall be in lieu of any
other cash severance benefits payable under any other policy, plan or program
of Printware.
(c) All nonvested options to purchase the capital stock of Printware held
by Executive on the Date of Termination shall immediately vest in full and all
restrictions on any restricted stock held by Executive shall immediately lapse
and Executive shall be entitled to exercise all rights and to receive all
benefits accruing to Executive under any and all Printware stock purchase and
stock option plans or programs, or any successor to any such plans or
programs, for a period of 90 days following the Date of Termination, which
shall be in addition to, and not reduced by, any other amounts payable to
Executive under this Section 3.
(d) Executive shall be entitled to receive all benefits payable to the
Executive under any of Printware's pension, life insurance, medical, health
and accident, disability, deferred compensation, or savings plans in which
Executive was participating immediately prior to the Change in Control, which
shall be in addition to, and not reduced by, any other amounts payable to
Executive under this Section 3.
(e) Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 3 be reduced by any compensation earned by Executive as the result of
employment by another employer or by any other amounts of compensation or
benefits payable by Printware after the Date of Termination, or otherwise.
4. Cause and Good Reason Defined.
(a) Cause. Termination by Printware of Executive's employment for
"Cause" during the 12 month period following a Change in Control shall mean
termination due to: (i) gross neglect by Executive of his duties to Printware,
or gross breach by Executive of Printware's reasonable policies that have been
previously communicated to Executive, which in each case is not cured by
Executive within 15 days after written notice by Printware to Executive
describing the gross neglect or gross breach; or (ii) the conviction of the
Executive by a court of competent jurisdiction of felony criminal conduct
relating to his employment by Printware.
(b) Good Reason. Executive shall be entitled to terminate his
employment during the 12 month period following a Change in Control for Good
Reason, which shall mean, without Executive's express written consent, any of
the following:
(i) the failure to elect or reelect the Executive to the offices of
Vice President of Printware, or a change by Printware of the Executive's
functions, duties or responsibilities which reduces the responsibility,
importance or scope of Executive's position with Printware;
(ii) a reduction by Printware in Executive's annual compensation or
bonus potential in effect immediately prior to a Change in Control;
(iii) the relocation of Printware's principal executive offices to a
location more than fifty miles from their current location, or Printware
requiring Executive to be based anywhere other than Printware's principal
executive offices except for required travel on Printware's business;
(iv) the material reduction by Printware of the benefits enjoyed by
Executive under any of Printware's pension, life insurance, medical, health
and accident, disability, deferred compensation, incentive awards, incentive
stock options, or savings plans in which Executive was participating
immediately prior to the Change in Control, or the material reduction by
Printware of any material fringe benefit enjoyed by Executive immediately
prior to the Change in Control;
(v) the failure of Printware to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 7; or
(vi) any purported termination of Executive's employment which is not
made pursuant to a Notice of Termination satisfying the requirements of
Section 5 (a) below.
Notwithstanding the foregoing, unless the Executive gives a Notice of
Termination satisfying the requirements of Section 5(a) below within 15 days
of the occurrence of an event constituting Good Reason, the Executive shall
have waived his rights under this Agreement for any benefits arising out of
that event.
(c) Disability and Retirement shall have the same meanings as set forth
in Printware's long term disability plan and its retirement plan,
respectively.
5. Termination Procedure; Disputes.
(a) Notice of Termination. Any purported termination of Executive's
employment by Printware or by Executive following a Change in Control shall
be communicated by written Notice of Termination to the other party hereto
and shall indicate the specific termination provision in this Agreement
relied upon and shall set forth the facts and circumstances claimed to
provide a basis for termination of Executive's employment under this
Agreement. Notice of termination and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed to the last known
residence address of the Executive or, in the case of Printware, to its
principal office to the attention of each of the then directors of Printware
with a copy to its Secretary, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
(b) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date the Executive's employment by Printware
ceases, as specified in a Notice of Termination. The Date of Termination
shall be not be less than 10 nor more than 30 days from the date the Notice
of Termination is given.
(c) Disputes Concerning Termination. If, within 10 days after any
Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties, or
by a final judgment, order or decree of a court of competent jurisdiction
(which is not appealable or the time for appeal therefrom having expired and no
appeal having been perfected); provided, that the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such dispute
with reasonable diligence. Notwithstanding the pendency of any such dispute,
Printware shall continue to pay Executive full compensation in effect when
the notice giving rise to the dispute was given (including, but not limited
to, base salary) and continue Executive as a participant in all compensation,
benefit and insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this subsection. Amounts paid under this
subsection are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts under this Agreement.
6. Funding. In order to assure the performance of Printware or its
successor of its obligations under this Agreement, Printware shall deposit in
a so called "rabbi" trust, immediately upon the occurrence of a Change in
Control, an amount equal to the maximum payment that could become payable to
the Executive under Section 3(b) of this Agreement. Under the written
instrument governing the trust, the trustee shall be instructed to pay to the
Executive (or the Executive's legal representative, as the case may be) the
amount to which the Executive shall be entitled under the terms hereof, and
the balance, if any, of the trust not so paid or reserved for payment shall
be repaid to Printware. If and to the extent there are not amounts in trust
sufficient to pay Executive under this Agreement, Printware shall remain
liable for any and all payments due to Executive. In accordance with the
terms of such trust, at all times during the term of this Agreement, Executive
shall have no rights, other than as an unsecured general creditor of
Printware, to any amounts held in trust and all trust assets shall be general
assets of Printware and subject to the claims of creditors of Printware.
Failure of Printware to establish or fully fund such trust shall not be deemed
a revocation or termination of this Agreement by Printware.
7. Successors; Binding Agreement.
(a) Printware will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Printware to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
Printware would be required to perform it if no such succession had taken
place. Failure of Printware to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Executive to the benefit described in Section 3 herein,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, successors, heirs, and designated
beneficiaries. If Executive should die while any amount would
still be payable to Executive hereunder if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's designated
beneficiaries, or, if there is no such designated beneficiary, to the
Executive's estate.
8. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the parties. No waiver by either party hereto at
any time of any breach by the other party to this Agreement of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or similar time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Minnesota.
9. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PRINTWARE, INC.
By_______________________
Its______________________
EXECUTIVE:
_________________________