EXHIBIT 10.12
EMPLOYMENT AGREEMENT, DATED AS OF DECEMBER 16, 1996 BY AND
BETWEEN COMMEMORATIVE BRANDS, INC. AND CHARLYN A. COOK
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of this 16th
day of December, 1996, by and between COMMEMORATIVE BRANDS, INC. and any
successors thereto (collectively referred to as the "Company") and CHARLYN A.
COOK ("Executive").
The parties hereby agree as follows:
1. EMPLOYMENT. Executive will serve the Company in an executive capacity in such
office as from time to time shall be determined by the Board of Directors of the
Company, and will perform, faithfully and diligently, the services and functions
performed and will carry out the functions of her office and furnish her best
advice, information, judgment and knowledge with respect to the business of the
Company. Executive agrees to perform such duties as hereinabove described and to
devote full-time attention and energy to the business of the Company. Executive
will not, during the term of employment under this Agreement, engage in any
other business activity if such business activity would impair Executive's
ability to carry out her duties under this Agreement.
2. TERM. This Agreement shall be effective upon consummation of the acquisition
by the Company of substantially all of the assets and businesses of CJC
Holdings, Inc. and L.G. Balfour Company, Inc. on December 16, 1996 and shall
thereafter terminate on December 15, 1999; provided that the term of this
Agreement shall be extended automatically for an additional year on December 15,
1999, and each anniversary of December 15, 1999, unless at least 60 days prior
to December 15, 1999, or such anniversary date, the Company shall give notice to
Executive that the termination date shall not be so extended.
3. COMPENSATION AND OTHER BENEFITS.
3.1 SALARY. The salary compensation to be paid by the Company to
Executive and which Executive agrees to accept from the Company for services
performed and to be performed by Executive hereunder shall be an annual gross
amount, before applicable withholding and other payroll deductions, of $160,000,
payable in equal bi-weekly installments of $6,153.85, subject to such changes as
the Board of Directors of the Company may, in its sole discretion, from time to
time determine.
3.2 BENEFITS. Executive shall be entitled to participate in such
employee benefit programs, plans and policies (including incentive bonus plans
and incentive stock option plans) as are maintained by the Company and as may be
established for the employees of the Company from time to time on the same basis
as other executive employees are entitled thereto. It is understood that the
establishment, termination or change in any such Executive employee benefit
programs, plans or policies shall be at the instance of the Company in the
exercise of its sole discretion, from time to time, and any such termination or
change in such program, plan or policy will not affect this Agreement so long as
Executive is treated on the same basis as other executive employees
participating in such program, plan or policy, as the case may be. Upon
termination of employment under this Agreement, without regard to the manner in
which the termination was brought about, Executive's rights in such employee
benefit programs, plans or policies shall be governed solely by the terms of the
program, plan or policy itself and not this
-2-
Agreement. Executive shall be entitled to an annual paid vacation in accordance
with the Company's personnel policy for her years of service completed as an
employee of the Company and the Company's predecessors.
4. WORKING FACILITIES. During the term of her employment under this Agreement,
Executive shall be furnished with a private office, stenographic services and
such other facilities and services as are commensurate with her position with
the Company and adequate for the performance of her duties under this Agreement.
5. EXPENSES. During the term of her employment under this Agreement, Executive
is authorized to incur reasonable out-of-pocket expenses for the discharge of
her duties hereunder and the promotion of business of the Company, including
expenses for entertainment, travel and related items. The Company shall
reimburse Executive for all such expenses upon presentation by Executive from
time to time of itemized accounts of expenditures incurred in accordance with
customary Company policies.
6. TERMINATION. Executive's employment under this Agreement may be terminated
with or without cause or reason by either Company or Executive upon the
following terms and conditions.
6.1 TERMINATION BY COMPANY FOR CAUSE. If any of the following events or
circumstances occur, the Company may terminate Executive's employment under this
Agreement at any time during or at the end of the term of this Agreement for any
of the following causes (each a "Cause").
(i) Executive's conviction of a felony;
(ii) Executive's intentional failure to observe or perform material
provisions of this Agreement required to be observed or
performed by her; or
(iii) Executive's intentional substantial wrongful damage to
property of the Company.
Upon payment by the Company to Executive of all salary payable, accrued
and unused vacation, and any accrued bonus to the date of such termination, the
Company shall have no further liability to Executive for compensation in
accordance herewith, and Executive will not be entitled to receive the
Termination Payment or Termination Benefits (as such terms are defined below)
except aforesaid vacation and any accrued bonus.
6.2 TERMINATION BY COMPANY WITHOUT CAUSE. In the event of the termination of
Executive's employment under this Agreement by the Company at any time during or
at the end of the term of this Agreement without Cause as defined in Paragraph
6.1 above, Executive will be entitled to receive 39 bi-weekly payments equal to
the average of her bi-weekly compensation in effect within the two years
preceding the termination (including, for these purposes, average bi-weekly
compensation of Executive from the Company's predecessors) ("Termination
Payments"), less legally required withholdings. In addition to the Termination
Payments, Executive will be entitled to elect the continuation of health
benefits under COBRA and the Company will pay the COBRA premiums for an 18-month
period, beginning on the date that
-3-
Executive's health coverage ceases due to her termination, accrued but unused
vacation, and any accrued bonus ("Termination Benefits"). If Executive obtains
employment while she is entitled to receive the Termination Payments and the
Termination Benefits, each Termination Payment shall be reduced by the amount of
her average bi-weekly compensation to be received in connection with her new
employment and the payment of the Termination Benefits shall cease upon
Executive becoming covered under the new employer's health coverage plan at no
cost to Executive. The combination of the Termination Payments and the
Termination Benefits constitute the sole amount to which Executive is entitled
if termination is without Cause.
6.3 TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. Executive may
terminate her employment under this Agreement without Good Reason as defined in
Paragraph 6.4 below upon the giving of 90 days written notice of termination. In
the event of such termination, the Company may elect to pay Executive six months
of compensation including unused accrued vacation and any accrued bonus in lieu
of 90 days notice, in which event Executive's services to the Company will be
terminated immediately. No Termination Payments or Termination Benefits other
than as set forth in Section 6.3 shall be payable upon Executive's termination
of this Agreement without Good Reason.
6.4 TERMINATION BY EXECUTIVE WITH GOOD REASON. Executive may terminate
her employment under this Agreement for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean:
(i) Without Executive's consent, the assignment to Executive of
substantial duties inconsistent with Executive's then-current
position, duties, responsibilities and status with the
Company, or any removal of Executive from her titles and
offices, except in connection with the termination of
Executive's employment under this Agreement by Company or as a
result of Executive's death or permanent disability (as
defined in the Company's or Executive's disability insurance
policies);
(ii) The Company requiring Executive to relocate anywhere other
than Austin, Texas, except for required travel on the
Company's business to an extent substantially consistent with
Executive's business travel obligations, or, in the event
Executive consents to such relocation out of Austin, Texas,
the failure by the Company to pay or reimburse Executive for
all reasonable moving expenses incurred by Executive relating
to a change of Executive's principal residence in connection
with such relocation and to indemnify Executive against any
loss (defined as the difference between the actual bona fide
sale price of such residence and the fair market value of such
residence as determined by a member of the Society of Real
Estate Appraisers designated by Executive and satisfactory to
the Company) realized in the sale of Executive's principal
residence in connection with any such change in residence; or
(iii) A decrease in Executive's salary from the salary in effect
upon the date hereof that is inconsistent with or not
commensurate with Executive's then current position with the
Company.
-4-
In the event of termination under this Section 6.4, the Company shall
pay to Executive the same Termination Payments and Termination Benefits to which
Executive would have been entitled had she been terminated by the Company
without Cause.
6.5 DEATH OR PERMANENT DISABILITY. Executive's employment under this
Agreement shall terminate upon Executive's death or permanent disability (as
defined in the Company's or Executive's disability insurance policies). Other
than accrued but unused vacation and any accrued but unpaid bonus, no
Termination Payments or Termination Benefits shall be payable upon Executive's
death or permanent disability.
6.6 RELEASE AGREEMENT. The Termination Payments and Termination
Benefits pursuant to Section 6 are contingent upon Executive executing a Release
Agreement after termination, a copy of which is attached to this Agreement. It
is understood that Executive may preserve all rights and causes of action in the
event of termination by the Company and evidence of release of same will only be
by execution of said Release Agreement after termination.
7. CONFIDENTIALITY. During and after the term of employment under this
Agreement, Executive agrees that she shall not, without the express written
consent of Company, directly or indirectly communicate or divulge to, or use for
her own benefit or for the benefit of any other person, firm, association or
corporation, any of Company's trade secrets, proprietary data or other
confidential information, which trade secrets, proprietary data or other
confidential information were communicated to or otherwise learned or acquired
by Executive during her employment relationship with Company ("Confidential
Information"), except that Executive may disclose such matters to the extent
that disclosure is required (a) at Company's direction or (b) by a court or
other governmental agency of competent jurisdiction. As long as such matters
remain trade secrets, proprietary data or other confidential information,
Executive shall not use such trade secrets, proprietary data or other
confidential information in any way or in any capacity other than as expressly
consented to by Company.
8. COVENANT NOT TO COMPETE OR SOLICIT.
8.1 Executive agrees to refrain for one year after the termination of
her employment under this Agreement for any reason, without written permission
of the Company, from becoming involved in any way, within the boundaries of the
United States, in the business of manufacturing, designing, servicing or
selling, the type of jewelry or fine paper or other scholastic, licensed sports,
insignia, recognition or affinity products manufactured or sold (or then
contemplated to be manufactured or sold) by the Company, its divisions,
subsidiaries and/or other affiliated entities, including but not limited to, as
an employee, consultant, independent representative, partner or proprietor.
8.2 Executive also agrees to refrain during her employment under this
Agreement, and in the event of the termination of her employment under this
Agreement for any reason, for one year thereafter, without written permission
from the Company, from diverting, taking, soliciting and/or accepting on her own
behalf or on the behalf of another person, firm, or company, the scholastic
licensed sports, insignia, recognition or affinity business of any customer of
the Company, its divisions, subsidiaries and/or affiliated entities, or any
potential customer of the Company, its divisions, subsidiaries and/or affiliated
entities whose identity
-5-
became known to Executive through her employment by the Company and to which the
Company has made a written business proposal or provided written pricing
information before the termination of Executive's employment under this
Agreement.
8.3 Executive also agrees to refrain during her employment under this Agreement,
and in the event of the termination of her employment under this Agreement for
any reason for a period of one year thereafter, from inducing or attempting to
influence any employee or independent representative of the Company, its
divisions, subsidiaries, and/or affiliated entities to terminate his or her
employment or association with the Company or such other entity.
8.4 Executive further agrees that the covenants in Sections 8.1 and 8.2 are made
to protect the legitimate business interests of the Company, including interests
in the Company's "Confidential Information," as defined in Section 7 of this
Agreement, and not to restrict her mobility or to prevent her from utilizing her
skills. Executive understands as a part of these covenants that the Company
intends to exercise whatever legal recourse against her for any breach of this
Agreement and in particular for breach of these covenants.
9. CONTROLLING LAW AND PERFORMABILITY. The execution, validity, interpretation
and performance of this Agreement will be governed by the law of the State of
Texas.
10. SEPARABILITY. If any provision of this Agreement is rendered or declared
illegal or unenforceable, all other provisions of this Agreement will remain in
full force and effect.
11. NOTICES. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by certified mail (return receipt
requested) addressed as follows:
If to Executive: Charlyn A. Cook
1115 Elm Street
Austin, TX 78703
If to the Company: Chief Executive Officer
Commemorative Brands, Inc.
7211 Circle S Road
Austin, TX 78745
12. ASSIGNMENT. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon its successors and assigns.
The rights and obligations of Executive under this Agreement are of a personal
nature and shall neither be transferred or assigned in whole or in part by
Executive.
13. NON-WAIVER. No waiver of or failure to assert any claim, right, benefit or
remedy hereunder shall operate as a waiver of any other claim, right, benefit or
remedy of the Company or Executive.
-6-
14. REVIEW AND CONSULTATION. Executive acknowledges that she has had a
reasonable time to review and consider this Agreement and has been given the
opportunity to consult with an attorney.
15. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement contains the entire
agreement of Executive and the Company relating to the matters contained in this
Agreement and supersedes all prior agreements and understandings, oral or
written, between Executive and the Company with respect to the subject matter in
this Agreement. This Agreement may be changed only by an agreement in writing by
Executive and the Company.
-7-
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first above written.
COMMEMORATIVE BRANDS, INC.
By: /S/ JEFFREY H. BRENNAN
-----------------------------
Name: Jeffrey H. Brennan
Title: Chief Executive Officer
EXECUTIVE
/S/ CHARLYN A. COOK
-8-