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EXHIBIT (c)(14)
AGREEMENT
This Agreement ("Agreement") is entered into by and between Duplex Products
Inc., a corporation ("Duplex") and David Preston ("Preston").
WHEREAS, Preston currently serves as Vice President of Sales of Duplex;
and,
WHEREAS, Duplex may from time to time be an acquisition target; and,
WHEREAS, it is in the best interests of the shareholders that key
management personnel remain in place throughout any acquisition activity and
devote their entire time and energies to their employment with Duplex and any
such acquisition activity; and,
WHEREAS, it is the desire of Duplex to give appropriate incentives and
protection to certain key executives in the event of any such activity so that
they can devote their entire time and energies to Duplex business without
distraction.
NOW, THEREFORE, in consideration of the promises set forth in this
Agreement, and in further consideration of Preston's continued employment with
Duplex, the parties hereto agree as follows:
1. DEFINITIONS. The terms defined below shall have the following meanings
throughout this Agreement:
1.1 BASE ANNUAL SALARY. For purposes of this Agreement, "Base Annual
Salary" shall be equal to Preston's annual salary excluding bonuses or
other similar payments as of the date of a Change of Control.
1.2. CHANGE IN CONTROL. A "Change in Control" shall exist upon the first
of any of the following to occur:
1.2.1. Any tender offer, merger or other business combination, sale
of assets, contested election or any combination of the foregoing
transactions (a "Transaction"), which results in the persons who were
directors of Duplex before the Transaction ceasing to constitute a
majority of the Board of Directors of Duplex or any successor to
Duplex after the Transaction;
1.2.2. Duplex merges or consolidates with another corporation and as
a result of the merger or consolidation fifty percent (50%) or less of
the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by former
stockholders of Duplex;
1.2.3. A tender offer or exchange offer is made and consummated for
the ownership of securities of Duplex representing more than fifty
percent (50%) of the combined voting power of Duplex's then
outstanding voting securities; or
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1.2.4. Duplex transfers substantially all of its assets to another
corporation which is not a wholly-owned subsidiary of Duplex.
1.2.5. A Change of Control for the purposes of this Agreement shall
specifically include any transaction completed with Miami Systems
Corporation and/or Wallace Computer Systems Inc..
1.3 SEVERANCE CONSIDERATION. "Severance Consideration" shall be equal to
one year's Base Annual Salary if the Severance occurs in the first twelve
(12) months immediately following a Change of Control. Beginning the
thirteenth (13th) month through the twenty-fourth (24th) month after a
Change of Control, said Severance Consideration shall be reduced by 8.33%
each month.
1.4 QUALIFYING TERMINATION. A "Qualifying Termination" is a termination of
Preston's employment qualifying him for Severance Consideration under this
Agreement and shall mean:
1.4.1 Any termination of Preston's employment by Duplex, or any
successor to Duplex, without cause, subsequent to and within
twenty-four (24) months of a Change of Control;
1.4.2 A reduction of Preston's salary by Duplex, or any successor to
Duplex, by 20% per cent, or more, or his position is changed from Vice
President of Sales, subsequent to and within twenty-four (24) months
of a Change of Control.
1.5 ENTIRE TIME AND ENERGIES. "Entire time and energies" shall mean the
normal and customary hours per week devoted to perform the duties assigned
to Preston as Vice President of Sales since he assumed said position, and
as compared to corporate executives in similar positions with other similar
companies.
2. PAYMENT OF SEVERANCE CONSIDERATION.
If a Qualifying Termination occurs and Preston is entitled to Severance
Consideration, said Severance Consideration shall be paid to Preston as
set forth in this Agreement, and shall be paid in one lump sum within ten
(10) days of said termination.
3. RETENTION POOL.
Duplex has created a Retention Pool to be used only if a transaction is
consummated with Miami Systems Corporation and/or Wallace Computer Systems
Inc., in which case Preston will share in said Retention Pool as follows:
3.1 If Miami Systems Corporation effectuates a merger with Duplex, or
acquires 50% or more of the outstanding shares of Duplex, or Wallace
Computer Systems Inc. acquires 50% or more of the outstanding shares
of Duplex, and Preston is still
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employed by Duplex at the time either of the above referenced
transactions is consummated, then in that event, Preston shall receive
$100,000.00 from said Retention Pool, in one lump sum payable within
ten (10) days after said transaction is consummated.
4. STOCK OPTIONS.
On January 4, 1996, Duplex through its Board of Directors adopted a
resolution that would cause all stock options issued under the 1984/1993
Incentive Stock Option program, owned by Preston, no matter when granted
that would not otherwise vest, to vest 100% at the time of the consummation
of either of the transactions mentioned in paragraph 3 hereinabove with
Miami Systems Corporation or Wallace Computer Systems Inc.
5. WITHHOLDING OF TAXES.
Duplex, or any successor of Duplex, shall withhold from any Severance
Consideration payable under this Agreement all federal, state, city or
other taxes as may be required by law.
6. NOT AN EMPLOYMENT AGREEMENT.
Nothing in this Agreement shall give Preston any right to continued
employment with Duplex, or any successor of Duplex, nor shall it give
Duplex any rights to the continued performance of duties by Preston to
Duplex, or any successor of Duplex.
7. NOTICES.
Notices under this Agreement shall be in writing and shall be deemed given
when mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to Duplex, to:
Duplex Products Inc.
1947 Bethany Road
Sycamore, IL 60178
Attn: President
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If to Preston, to:
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or to such other address as either party may furnish to the other in writing,
except that notices of changes of address shall be effective only upon receipt.
8. APPLICABLE LAW.
The performance and interpretation of this Agreement shall be construed in
accordance with the laws of the State of Illinois.
9. SEVERABILITY.
If a court of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.
10. NO ASSIGNMENT.
Preston's rights to receive payments or benefits under this Agreement shall
not be assignable or transferable whether by pledge, creation of a security
interest or otherwise. Duplex shall have no liability to pay any amount so
attempted to be assigned or transferred.
11. SUCCESSORS.
This Agreement shall be binding upon and inure to the benefit of Duplex,
its successors and assigns (including, without limitation, any company into
or with which Duplex may merge or consolidate). Duplex agrees that it will
not effect a Change of Control unless either: the person or entity
acquiring control of Duplex shall expressly assume by an instrument in
writing all duties and obligations of Duplex under this Agreement; or
Duplex shall provide for the payment in full of all amounts which are
payable to Preston under this Agreement.
12. CONFIDENTIALITY AND RELEASE.
Preston's right to receive and Duplex's obligation to pay Severance
Consideration shall be contingent upon Preston executing a binding
agreement setting forth a release of any and all claims arising from his
employment and/or termination of employment with
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Duplex or any successor of Duplex. Such agreement shall also contain
covenants of confidentiality.
13. ENTIRE AGREEMENT.
This Agreement represents the entire agreement of the parties regarding the
severance pay arrangements between them. This Agreement may not be modified
except in writing signed by both parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above written.
DUPLEX PRODUCTS INC.
By: /s/ John A. Bacon /s/ David Preston
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John A. Bacon DAVID PRESTON
Compensation Committee Chairman
January 26, 1996
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