EXHIBIT 10.1
EMPLOYMENT AGREEMENTS; APPOINTMENT OF EXECUTIVE OFFICERS
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of the
28th day of April, 2000, by and between BPI PACKAGING TECHNOLOGIES,
INC., a Delaware corporation (the "Company"), and JAY SHAPIRO
("Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee and Employee
desires to accept such employment by the Company upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Subject to the other terms and conditions of this
Agreement, the Company hereby agrees to employ Employee as the Vice
President of Operations of the Company as set forth herein, and Employee
hereby agrees to be so employed in such position by the Company, for a
term beginning on April 28, 2000 and ending January 27, 2002; provided,
however, upon expiration of the stated term of this Agreement,
Employee's employment with the Company shall revert to the status of
employment at will and shall thereafter be subject to termination by
either party at any time and regardless of cause.
2. RESPONSIBILITIES OF EMPLOYMENT. During the term of Employee's
employment, Employee: (a) shall diligently and faithfully serve the
Company in such capacity as may be determined from time to time by the
President of the Company and perform such other duties, assignments and
responsibilities as the Company may impose upon Employee from time to
time, consistent with his role as an executive officer of the Company,
and he shall devote his best efforts and entire business time, services
and attention to the advancement of the Company's interests; and (b)
shall not, without the prior written consent of the President of the
Company, engage in any other employment or business, directly or
indirectly, in any capacity (whether as a sole proprietor, partner,
member, manager, director, officer, employee, consultant or otherwise),
whether for compensation or otherwise and whether or not such business
is in competition or conflict with the business of the Company provided,
however ownership of not more than one percent (1%) of the securities of
any publicly-held corporation or five percent (5%) of any private
corporation shall not constitute a violation of this Section 2.
3. COMPENSATION; STOCK OPTIONS; BENEFITS; REIMBURSEMENT FOR
EXPENSES.
(a) During the term of Employee's employment pursuant to this
Agreement, the Company shall pay to Employee as basic compensation for
his services hereunder the sum of One Hundred and Twenty-Five Thousand
Dollars ($125,000) per year, payable in accordance with the normal
payroll practices of the Company commencing on a date to be mutually
agreed upon by the Company and the Employee.
(b) Employee shall receive options to purchase Common Stock
of the Company during the term of this Agreement if the Company equals
or exceeds certain financial performance goals as set forth below:
(1) If, in fiscal year 2000, the Company's net earnings
for the fiscal year plus amounts deducted in the computation
thereof for: (a) interest expense, (b) Federal, state and local
income taxes, (c) depreciation, (d) amortization of intangibles, as
computed by the Company's accountants in accordance with generally
accepted accounting principals, consistently applied, and (e) any
expenses or other charges associated with the investment, loans,
and equipment leases made by DGJ, L.L.C. to the Company and all
other extraordinary charges ("EBITDA"), equals or exceeds one of
the EBITDA performance goals below (the "Performance Goals"), the
Company shall grant to Employee, at no cost to Employee, options to
purchase the corresponding number of shares of Common Stock of the
Company (the "2000 Options") at an exercise price of $.04 per share
(the "Exercise Price"), subject to adjustment in the event of a
stock split, stock dividend or similar event, as determined by the
Board of Directors of the Company:
EBITDA
Performance Goals Number of Shares
$3,000,000 350,000
$4,500,000 350,000
$6,000,000 350,000
$7,500,000 350,000
$9,000,000 350,000
If and when the Company grants the 2000 Options to the Employee,
the 2000 Options shall vest in increments of one-third (1/3), with
one one-third (1/3) portion vesting on the date the 2000 Options
are granted to Employee (the "2000 Grant Date") and one one-third
(1/3) portion vesting on each of the first and second anniversaries
of the 2000 Grant Date.
(2) If, in Fiscal Year 2001, the Company's EBITDA equals
or exceeds one of the Performance Goals, the Company shall grant to
Employee, at no cost to Employee, options to purchase, at the
Exercise Price, an amount of shares equal to, but not less than
zero: (a) the number of shares of Common Stock of the Company that
corresponds to the equaled or highest exceeded Performance Goal,
(b) less the number of shares represented by the 2000 Options (the
"2001 Options"). If and when the Company grants the 2001 Options
to the Employee (the "2001 Grant Date"), the 2001 Options will vest
one-half (1/2) on the 2001 Grant Date and one-half (1/2) on the
first anniversary of the 2001 Grant Date.
(3) The terms of the 2000 Options and the 2001 Options,
if any, and the terms and conditions thereof shall be established
by the Board of Directors of the Company at the time of the grant
of such option upon such terms and conditions as are customary for
stock options held by employees of publicly-held companies.
Notwithstanding the foregoing, such options shall be exercisable
for a minimum period of five (5) years from the date of vesting,
shall not be subject to repurchase by the Company, and shall be
freely transferable once vested.
(4) To the extent not previously vested, any and all
options which the Employee has received hereunder will immediately
vest upon a Change in Control of the Company. "Change of Control"
as used herein means sale of 50% or more of the Common Stock of the
Company, but not including the exercise of any warrant held by DGJ,
L.L.C. and its designees or assigns.
(c) Shares issuable under Section 3(b) of this Agreement
shall be registered on Form S-8 on or before July 31, 2001.
(d) During the term of Employee's employment hereunder, the
Company shall provide Employee with such benefits, if any, as are
generally made available by the Company to all of its other employees or
to all other executive employees; provided, however, the Employee shall
be entitled each calendar year to four (4) weeks of vacation, at such
time or times as is reasonably agreed upon by the parties hereto, during
which time the Employee shall receive his normal compensation as
provided for in Section 3(a) hereof.
(e) Employee shall be entitled to be reimbursed for all
reasonable and necessary out-of-pocket expenses incurred by Employee in
the conduct of the performance of his services for the Company in
accordance with policies relating thereto established by the President
from time to time. The Company will reimburse Employee for all such
expenses following presentation by Employee, from time to time, of an
itemized accounting and appropriate substantiation of such expenditures.
(f) The Company shall reimburse Employee for transportation
expenses in an amount not to exceed five hundred dollars ($500.00) per
month.
4. COVENANT NOT TO COMPETE. Employee acknowledges and agrees
that he has obtained and will continue to obtain knowledge and
familiarity with the operations of the Company, the conduct of the
business of the Company, its operating, manufacturing, distribution,
marketing and sales procedures and methods, the identity and
requirements of its past, present and potential customers and other
proprietary information and trade secrets not generally known to other
persons or entities who can obtain economic value from its disclosure or
use which includes, without limitation, records, data, documents, plans,
policies, customer lists, price lists, names and addresses of suppliers
or representatives, or other matters of any kind or description relating
to any of the foregoing, irrespective of the medium on which contained,
which must be safeguarded and which are reasonable under the
circumstances to protect. To protect the Company, Employee hereby
agrees that during the term hereof and for a period of one (1) year from
the date after termination of Employee's employment by the Company and
this Agreement's termination, Employee shall not, directly or
indirectly, to the furthest extent permitted by law:
(a) own, manage, operate, control or participate in, or be
associated in any manner whatsoever, directly, indirectly or otherwise,
with, or be connected as an officer, employee, partner, director,
member, manager, consultant or otherwise with, or have any financial
interest in, or aid or assist any person or entity in the conduct of, or
otherwise engage in, any business (whether it be a sole proprietorship,
partnership, limited liability company, corporation or other entity)
engaged in any business carried on by the Company anywhere within the
United States of America; or
(b) approach, solicit or otherwise encourage any employee of
the Company to terminate his or her employment with the Company, or to
enter into employment with any other person or entity; or
(c) approach, induce or persuade any customer of the Company,
whether a past, present or potential customer of the Company, to
terminate its or not pursue a (as applicable) relationship with the
Company or to enter into any relationship with any other person or
entity engaged in the business of the Company or in a business or
businesses described in clause (a) above; or
(d) in any manner slander, libel or through any other means
take any action which is intended, or could reasonably be expected, to
be detrimental to Company, its products, personnel, prospects or
operations; provided, however, ownership of not more than one percent
(1%) of the securities of any publicly-held corporation shall not
constitute a violation of this Section 4.
(e) If any provision or part of this Section 4 is held to be
unenforceable because of the duration of such provision or the area
covered thereby, Employee and the Company agree to modify such provision
or, that the court making such determination shall have the power to
modify such provision, to reduce the duration or area of such provision,
or both, or to delete specific words or phrases ("blue-penciling"), and
in its reduced or blue-penciled form, such provision shall then be
enforceable and shall be enforced.
5. EQUITABLE REMEDIES. Employee acknowledges and agrees to the
fairness, applicability, scope and nature of the covenants set forth in
Sections 4, 7 and 8 hereof, and further agrees that the time period and
scope specified therein are the fair, appropriate and minimum and
reasonable time and scope necessary to protect the Company in the
conduct of its business. Employee further agrees that damages are not
an adequate remedy in the event of a violation of such covenants, and
hereby agrees that, in case of violation, the Company and its successors
and assigns shall be entitled to injunctive relief, without the posting
of a bond, in addition to such other relief and remedies as may
otherwise be available in law or equity. The Company's forbearance or
failure to take action with regard to any violation of this Agreement,
shall not be deemed a waiver of such violation or limitation upon the
Company's rights as set forth in this Section.
6. EMPLOYEE ALTERNATIVE SERVICES. Employee represents and
warrants to the Company that, in the event of enforcement of the
provisions of Sections 4, 5, 6, 7 and 8 hereof, Employee's experience,
capabilities and prospects are such that Employee can obtain employment
that will not cause Employee to be in violation of such Sections hereof,
and that the enforcement of such covenants hereunder by the Company by
way of injunction will not prevent Employee from earning a livelihood.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
(a) Employee hereby covenants and agrees that he will not,
except as may be required in connection with his employment with the
Company, directly or indirectly, use or disclose to any other person or
entity, whether during or subsequent to the term of his employment by
the Company, irrespective of the time, manner or cause of the
termination of his employment, any information of a proprietary nature
belonging to the Company, or which could be reasonably expected to have
an adverse effect on the Company, its business, property or financial
condition, including, without limitation, records, data, documents,
processes, specifications, methods of operation, inventions,
manufacturing techniques and know-how, formulae, experimental or
developmental work, plans, policies, customer lists, price lists, the
names and addresses of suppliers or representatives, investigations or
other matters of any kind or description relating to the products,
services, suppliers, customers, sales or businesses of the Company.
(b) All records, files, drawings, data, computer programs,
documents, equipment, writings and the like relating to the Company's
business which Employee shall prepare, use, construct or observe, shall
be and remain the sole property of the Company, and upon termination of
this Agreement or his employment hereunder or otherwise with the Company
for any reason, Employee shall return to the possession of the Company
any items of that nature and any copies thereof which he may have in his
possession.
8. INVENTIONS.
(a) Any invention, improvement, discovery, process, formula
or method relating to or useful in connection with the business now or
hereafter carried on or contemplated by the Company, which is developed
or discovered or which comes to the attention of Employee while he is
employed by the Company, will be forthwith fully disclosed by him to the
President of the Company. Any such invention, improvement, discovery,
process, formula or method will be the sole and absolute property of the
Company, and the Company will be the sole and absolute owner of all
patent and other rights in respect thereof, without the necessity of any
payment by the Company to Employee in connection therewith.
(b) Employee agrees to assign and transfer to the Company,
without payment of any money or other consideration, all of his right,
title and interest in and to any invention, improvement, discovery,
process, formula or method, relating to or useful in connection with the
business now or hereafter carried on or contemplated by the Company,
which he may conceive, develop or make during the term of his employment
by the Company, either solely or jointly with others. Upon request of
the Company, Employee will execute and deliver, at the expense of the
Company, all such documents and will do all such other acts as may in
the Company's opinion be necessary or desirable to secure to the
Company, its successors and assigns, or its nominee, all right, title
and interest in and to any such invention, improvement, discovery,
process, formula or method.
9. TERMINATION. Upon termination of Employee's employment by the
Company, by Employee or upon the death or disability of Employee, the
rights of Employee shall be as follows:
(a) Death or Disability of Employee; Termination by Employee.
If Employee dies while employed by the Company, if Employee's employment
is terminated by the Company due to Employee's disability (as defined in
Subparagraph (d) hereinbelow), or if Employee elects to terminate his
employment hereunder, this Agreement shall immediately terminate without
any further obligation on the part of the Company to Employee,
including, without limitation, no obligation to pay Employee any salary
or other benefits, except that the Company shall pay to Employee or his
Beneficiary (as hereinafter defined in Subparagraph (e)) only such
salary pursuant to Section 3 hereof as may be accrued and unpaid on the
date of such death, disability or termination of employment.
(b) Termination by the Company for Cause. If Employee's
employment is terminated at any time by the Company for cause, this
Agreement shall immediately terminate without any further obligation on
the part of the Company, including, without limitation, no obligation to
pay Employee any salary or other benefits, except that the Company shall
pay to Employee only such salary pursuant to Section 3 hereof as may be
accrued and unpaid on the date of such termination of employment. For
purposes of the foregoing, "cause" shall mean any of the following (i)
willful failure or neglect of Employee to perform his duties as set
forth herein after written notice thereof by the Company, (ii) the
commission of fraud, theft, deceit, a felony, embezzlement, or improper
use of corporate funds by Employee, (iii) self-dealing by Employee
detrimental to the Company or any attempt to obtain any personal profit
from any transaction in which the Company has an interest, (iv) habitual
intoxication or drug addiction, (v) Employee's repeated failure after
written notice thereof by the Company to perform or comply with rules,
regulations or requirements reasonably established by the Company for
Employee in the conduct of his employment hereunder, or (vi) any
material breach of this Agreement by Employee.
(c) Termination by the Company for Other Reasons. The
Company shall have the right at any time to terminate Employee's
employment hereunder for any reason by giving him written notice (which
shall fix the date as of which his employment is to terminate) of its
intention to do so. If Employee's employment hereunder is terminated by
the Company other than for cause or by reason of Employee's death or
disability, the Company shall be obligated to pay Employee only his
salary pursuant to Section 3 hereof until the first to occur of the
following: (i) the end of the stated term of this Agreement; (ii)
Employee's engaging in any employment, business, or other activity,
directly or indirectly, which does or would constitute a violation of
the provisions of Section 4 hereof (whether or not the provisions of
said Section 4 may have ceased to be operative and/or effective for any
reason); (iii) Employee's death or disability; or (iv) any discovery of
embezzlement or improper use of corporate funds by Employee, self-
dealing detrimental to the Company or any attempt to obtain personal
profit from any transaction in which the Company has an interest, or any
breach of the terms of this Agreement.
(d) Definition of Disability. For purposes of the foregoing,
the term "disability" shall mean Employee's inability due to illness or
other physical or mental disability to substantially perform his duties
as prescribed herein for a period of ninety (90) days within any
consecutive twelve (12) month period.
(e) Definition of Beneficiary. For purposes of the
foregoing, the term "Beneficiary" shall mean any person (including any
trust or trustee) Employee may have designated in a writing acceptable
to and filed with the Company. In the absence of the appointment of
such a beneficiary or if such beneficiary predeceases Employee or
refuses to accept the benefits hereunder, then the term "Beneficiary"
shall mean the estate of Employee.
(f) Continuing Obligations of Employee. Notwithstanding
anything to the contrary contained herein, termination of this Agreement
or Employee's employment, whether for cause, by reason of disability, by
Employee or otherwise, shall not be deemed in any way to affect
Employee's obligations under Section 4 through and including Section 9
of this Agreement, with respect to which he shall remain bound.
10. GOVERNING LAW. This Agreement shall be construed, governed
and enforced in accordance with the internal laws of the State of
Illinois, without regard to conflicts of law principles.
11. MUTUAL CONTRIBUTION. The parties to this Agreement have
mutually contributed to its drafting. Consequently, no term or
provision of this Agreement shall be construed against any party on the
ground that such party drafted the provision or caused the provision to
be drafted, or that any party suffered any inequity or inequality in
bargaining power causing such party to accept any term or provision
contained herein.
12. MODIFICATION; ETC. This Agreement is the entire agreement and
understanding of the parties hereto with respect to the subject matter
hereof and supersedes any and all prior and contemporaneous
negotiations, understandings and agreements with regard to the subject
matter hereof, whether oral or written. No representation, inducement,
agreement, promise or understanding altering, modifying, taking from or
adding to the terms and conditions hereof shall have any force or effect
unless the same is in writing and validly executed by the parties
hereto. The titles of the Sections have been inserted as a matter of
convenience of reference only and shall not be construed to control or
affect the meaning or construction of this Agreement.
13. SEVERABILITY; ASSIGNMENT. If any portion of this Agreement is
found to be in violation of or conflict with any applicable law, the
parties agree that said portion shall be modified only to the extent
necessary to enable it to comply with such law, and the remainder of
this Agreement shall remain in full force and effect. This Agreement
requires the personal services of and is not assignable by Employee, but
shall be binding upon and inure to the benefit of the successors and
assigns of the Company.
14. NOTICES. All notices or other communications in connection
with this Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed first class, postage prepaid and
addressed as follows: (i) if to the Company, addressed to: BPI Packaging
Technologies, Inc., 455 Somerset Avenue, North Dighton, Massachusetts
02764; Attention: James F. Koehlinger; and (ii) if to Employee,
addressed to: Jay Shapiro, 21 Village Drive, East Sandwich,
Massachusetts 02537; or such other address or addressed to the attention
of such other person or persons as either of the parties may notify the
other in accordance with the provisions of this Section.
15. CHOICE OF FORUM AND VENUE. EMPLOYEE AND THE COMPANY, IN ORDER
TO INDUCE EACH OTHER TO ENTER INTO THIS AGREEMENT, HEREBY AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY IN CONNECTION
WITH, OUT OF, RELATED TO OR FROM THIS AGREEMENT SHALL BE LITIGATED, IN
COURTS HAVING SITUS WITHIN THE U.S.A., STATE OF ILLINOIS, COUNTY OF
COOK. EMPLOYEE AND THE COMPANY HEREBY CONSENT AND SUBMIT TO THE
JURISDICTION OF ANY SUCH STATE OR FEDERAL COURT LOCATED WITHIN SUCH
COUNTY. EMPLOYEE AND THE COMPANY HEREBY WAIVE ANY RIGHT EACH OF THEM
MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT BY OR
AGAINST EITHER OF THEM IN ACCORDANCE WITH THIS SECTION.
16. OPPORTUNITY FOR INDIVIDUAL COUNSEL. All parties hereto hereby
acknowledge and agree that they have each had an opportunity to read
this Agreement in its entirety and to obtain separate counsel before
such party's execution of this Agreement, and that this Agreement is
made voluntarily and without duress of any kind.
IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement as of the day and year first written above.
EMPLOYEE BPI PACKAGING TECHNOLOGIES, INC.
/s/ Jay Shapiro By: /s/ James F. Koehlinger
Title: Acting Chief Operating Officer
