<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[MARK ONE]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 0-21726
INTERNATIONAL IMAGING MATERIALS, INC.
-------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3179629
-------- ----------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
310 Commerce Drive, Amherst, New York 14228
-------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(716) 691-6333
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed 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
------------ ------------
At January 20, 1997, 8,610,114 shares of Common Stock of the Registrant were
outstanding.
<PAGE>
INTERNATIONAL IMAGING MATERIALS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited) as of
December 31, 1996 and March 31, 1996 3
Consolidated Statements of Income (unaudited) for the
three and nine months ended December 31, 1996 and January 2, 1996 4
Consolidated Statements of Cash Flows (unaudited) for the
nine months ended December 31, 1996 and January 2, 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
EXHIBIT INDEX 12
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERNATIONAL IMAGING MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1996
----------------- -----------------
(IN THOUSANDS, EXCEPT SHARE AND
PER SHARE AMOUNTS)
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 913 $ 570
Trade receivables 17,436 16,157
Inventories:
Raw materials 6,662 9,397
Work in process 4,580 3,627
Finished goods 4,214 4,839
-------- --------
Total inventories 15,456 17,863
-------- --------
Prepaid expenses 1,028 635
-------- --------
Deferred income taxes 1,226 1,467
-------- --------
Total current assets 36,059 36,692
-------- --------
Property, plant and equipment, at cost:
Land 1,170 1,163
Buildings and improvements 21,201 10,924
Equipment 75,530 64,362
Construction in progress 5,768 17,194
-------- --------
103,669 93,643
-------- --------
Less accumulated depreciation 26,579 21,826
-------- --------
Net property, plant and equipment 77,090 71,817
-------- --------
Other assets 4,493 6,952
-------- --------
$117,642 $115,461
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable to banks 9,000 16,292
Current installments of long-term debt 1,239 1,674
Trade accounts payable 5,508 8,126
Accrued compensation and benefits 1,008 338
Payable to Fujicopian Co., Ltd., a related party 3,152 1,184
Other accrued liabilities 1,529 1,132
-------- --------
Total current liabilities 21,436 28,746
-------- --------
Long-term debt, excluding current installments 1,294 2,259
Deferred income taxes 7,932 6,336
-------- --------
Total liabilities 30,662 37,341
-------- --------
Stockholders' equity:
Preferred stock; $.01 par value; 5,000,000 shares
authorized; none issued --- ---
Common stock; $.01 par value; 30,000,000 shares
authorized; 8,682,899 and 8,855,301 shares issued
as of December 31, 1996 and March 31, 1996, respectively 87 89
Additional paid-in capital 47,564 53,037
Unearned compensation - restricted stock award (484) (692)
Notes receivable from exercise of stock options and warrants (75) (1,219)
Retained earnings 41,135 32,394
Treasury stock, 72,785 and 310,400 shares, at cost as of
December 31, 1996 and March 31, 1996, respectively (1,247) (5,489)
-------- --------
Total stockholders' equity 86,980 78,120
-------- --------
$117,642 $115,461
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
INTERNATIONAL IMAGING MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------- -------------------------
DECEMBER 31, JANUARY 2, DECEMBER 31, JANUARY 2,
1996 1996 1996 1996
------------- ---------- ------------- ----------
(IN THOUSANDS, EXCEPT PER (IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues $27,730 $24,018 $79,584 $64,242
Cost of goods sold 19,499 16,712 55,991 45,310
------- ------- ------- -------
Gross profit 8,231 7,306 23,593 18,932
------- ------- ------- -------
Operating expenses:
Research and development 931 829 2,656 2,375
Selling 1,495 1,096 3,904 2,965
General and administrative 1,006 895 3,128 2,744
------- ------- ------- -------
Total operating expenses 3,432 2,820 9,688 8,084
------- ------- ------- -------
Operating income 4,799 4,486 13,905 10,848
Other expense 122 7 457 48
------- ------- ------- -------
Income before income taxes 4,677 4,479 13,448 10,800
Income taxes 1,637 1,614 4,707 3,891
------- ------- ------- -------
Net income $ 3,040 $ 2,865 $ 8,741 $ 6,909
======= ======= ======= =======
Net income per share of common stock $0.34 $0.31 $0.97 $0.74
======= ======= ======= =======
Weighted average common shares outstanding 9,025 9,363 8,992 9,339
======= ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
INTERNATIONAL IMAGING MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------------
DECEMBER 31, JANUARY 2,
1996 1996
------------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,741 $ 6,909
-------- --------
Adjustments to reconcile net income to net cash provided (used)
by operating activities:
Depreciation and amortization 6,022 4,466
Deferred income taxes 2,059 1,571
Other noncash provisions 175 220
Reduction in income tax payable from the exercise of options and warrants 962 1,314
Cash provided (used) by changes in:
Trade receivables (1,245) (3,148)
Inventories 2,407 (2,565)
Prepaid expenses (393) (4)
Other assets (327) 38
Trade accounts payable (813) (2,143)
Accrued compensation and benefits 670 (321)
Payable to Fujicopian Co., Ltd. 2,025 1,198
Other accrued liabilities 397 (158)
Income taxes payable --- (1,070)
-------- --------
Total adjustments 11,939 (602)
-------- --------
Net cash provided by operating activities 20,680 6,307
-------- --------
Cash flows used in investing activities:
Capital expenditures (12,015) (13,789)
Payments to acquire other assets --- (5,575)
Maturities of securities --- 3,468
-------- --------
Net cash used in investing activities (12,015) (15,896)
-------- --------
Cash flows from financing activities:
Proceeds from sale of common stock 63 80
Exercise of stock options and warrants:
Proceeds 1,431 408
Notes received from officers and director (1,124) (2,299)
Proceeds from (repayments of) note payable (7,292) 10,000
Repayments of long-term debt (1,400) (1,424)
-------- --------
Net cash provided (used) by financing activities (8,322) 6,765
-------- --------
Net increase (decrease) in cash and cash equivalents 343 (2,824)
Cash and cash equivalents at beginning of period 570 3,559
-------- --------
Cash and cash equivalents at end of period $ 913 $ 735
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amount capitalized 516 117
Income taxes $ 2,074 $ 2,076
======== ========
Supplemental disclosure of noncash investing and financing activities:
Increase (decrease) in liabilities incurred in connection with capital expenditures (1,862) 158
Notes received from exercise of stock options and warrants --- 548
Common stock surrendered 4,046 3,796
Issuance of restricted common stock $ 1 $ 58
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
INTERNATIONAL IMAGING MATERIALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ADJUSTMENTS
In the opinion of the Company's management, the accompanying unaudited
consolidated financial statements contain all normal recurring adjustments
necessary for a fair presentation of the Company's consolidated financial
position as of December 31, 1996 and consolidated results of operations for the
three and nine month periods ended December 31, 1996 and January 2, 1996 and
consolidated cash flows for the nine month periods ended December 31, 1996 and
January 2, 1996. Consolidated results of operations for the three and nine
month periods ended December 31, 1996 are not necessarily indicative of results
to be expected for the full year ending March 31, 1997.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
COMPARISON OF THE QUARTER ENDED DECEMBER 31, 1996 WITH THE QUARTER ENDED JANUARY
2, 1996
Revenues in the three months ended December 31, 1996 were $27.7 million, an
increase of 15.4% from $24.0 million in the three months ended January 2, 1996.
The Company sells its ribbons primarily to printer original equipment
manufacturers, which in turn sell the ribbons under their own brand names to
end-users, either directly or through distributors and value-added resellers.
Revenues from OEM customers in the three months ended December 31, 1996 were
$19.7 million, comprised 70.9% of total revenues, and increased 11.7% from $17.6
million in the three months ended January 2, 1996. This increase primarily
reflects the transfer of ribbon production for a significant color ribbon
program from Fujicopian to the Company, new product introduced by the Company to
existing tag and label and fax customers in North America, and increased sales
of existing and new products outside of North America.
The Company also sells its ribbons directly to distributors and dealers
where such sales do not adversely affect the Company's OEM customers. Revenues
from domestic distributors in the three months ended December 31, 1996 were $7.1
million, comprised 25.4% of total revenues, and increased 16.7% from $6.1
million in the three months ended January 2, 1996. The addition of several new
significant tag and label customers, and end-user migration towards this
distributor channel from the OEM channel as the market for tag and label ribbons
matures, contributed to this growth.
Revenues from international distributors in the three months ended December
31, 1996 were $1.0 million, comprised 3.6% of total revenues and increased
171.2% from $372,000 in the three months ended January 2, 1996. The rapid
expansion of the market for tag and label printing in South America, and the
Company's marketing programs targeting these opportunities, were principally
responsible for the addition of several new customers and the corresponding
sales increase.
Gross margin was 29.7% of revenues in the three months ended December 31,
1996, as compared to 30.4% in the three months ended January 2, 1996. This
decline primarily resulted from the incremental operating expenses from the new
manufacturing facility opened during the three months ended July 2, 1996, a
deterioration in sales mix and lower selling prices.
Operating expenses were $3.4 million in the three months ended December 31,
1996, an increase of $612,000 from $2.8 million in the three months ended
January 2, 1996. Personnel additions in sales and marketing and increased
advertising to maximize revenue from new products and identify opportunities for
future products were primarily responsible for the increase.
Other expense was $122,000 in the three months ended December 31, 1996, an
increase of $115,000 from $7,000 in the three months ended January 2, 1996.
This increase reflects the expensing of current interest charges on the
Company's lines of credit in the three months ended December 31, 1996. Interest
charges incurred on the Company's lines of credit in the three months ended
January 2, 1996 were capitalized as part of the cost of construction of the new
manufacturing facility.
Weighted average common shares outstanding were 9.0 million shares in the
three months ended December 31, 1996, a decrease of 338,000 shares from 9.4
million shares in the three months ended January 2, 1996. This decrease
primarily resulted from the repurchase of 315,400 shares on the open market
during February and March 1996.
7
<PAGE>
COMPARISON OF THE NINE MONTHS ENDED DECEMBER 31, 1996 WITH THE NINE MONTHS ENDED
JANUARY 2, 1996
Revenues in the nine months ended December 31, 1996 were $79.6 million, an
increase of 23.9% from $64.2 million in the nine months ended January 2, 1996.
Revenues from OEM customers in the nine months ended December 31, 1996 were
$57.7 million, comprised 72.5% of total revenues, and increased 17.5% from $49.1
million in the nine months ended January 2, 1996. This increase primarily
reflects the transfer of ribbon production for a significant color ribbon
program from Fujicopian to the Company, new products introduced by the Company
to existing tag and label and fax customers in North America, and increased
sales of existing and new products outside of North America.
Revenues from domestic distributors in the nine months ended December 31,
1996 were $19.6 million, comprised 24.7% of total revenues and increased 36.2%
from $14.4 million in the nine months ended January 2, 1996. In September 1995,
the Company acquired the thermal transfer supplies business from one of its OEM
customers, QMS Inc., and began selling ribbons and other thermal transfer
supplies under the QMS brand name directly to distributors, dealers and end-
users. The higher selling prices for ribbons and other items included in the QMS
supplies business, the addition of several new significant tag and label
customers, and end-user migration towards this distributor channel from the OEM
channel as the market for tag and label ribbons matures contributed to this
growth.
Revenues from international distributors in the nine months ended December
31, 1996 were $2.2 million, comprised 2.8% of total revenues, and increased
220.4% from $702,000 in the nine months ended January 2, 1996. The rapid
expansion of the market for tag and label printing in South America, and the
Company's marketing programs targeting these opportunities, were principally
responsible for the addition of several new customers and the corresponding
sales increase.
Gross margin was 29.6% in the nine months ended December 31, 1996 as
compared to 29.5% in the nine months ended January 2, 1996. The increased
leverage of fixed overhead costs and production efficiencies from the higher
sales volume, higher margins on the QMS thermal transfer supplies business and
the benefit from the stronger U.S. dollar for product purchased from Japan
offset the incremental operating expenses from the new manufacturing facility
opened during the three months ended July 2, 1996, a deterioration in sales mix
and lower selling prices.
Operating expenses were $9.7 million in the nine months ended December 31,
1996, an increase of $1.6 million from $8.1 million in the nine months ended
January 2, 1996. Personnel additions in sales and marketing, including the
creation of the telemarketing capability for QMS thermal transfer supplies, and
increased advertising to maximize revenue from new products and identify
opportunities for future products were primarily responsible for the increase.
Personnel additions in research and development to create new products for
future revenue growth also contributed to the increase.
Other expense was $457,000 in the nine months ended December 31, 1996, an
increase of $409,000 from $48,000 in the nine months ended January 2, 1996 This
increase reflects the expensing of current interest charges on the Company's
lines of credit subsequent to the completion of construction of the Company's
new manufacturing facility in April 1996. Interest charges incurred on the
Company's lines of credit in the nine months ended January 2, 1996 were
capitalized as part of the cost of the facility.
Weighted average common shares outstanding were 9.0 million shares in the
nine months ended December 31, 1996, a decrease of 347,000 shares from 9.3
million shares in the nine months ended January 2, 1996. This decrease
primarily resulted from the repurchase of 315,400 shares on the open market
during February and March 1996.
8
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company's financial condition remained strong, with long-term debt
comprising only 1.5% of total capitalization at December 31, 1996. During the
nine months ended December 31, 1996, $20.7 million of cash provided by operating
activities was used to fund $12.0 million of capital expenditures primarily
related to the construction of and equipment purchased for the Company's new
100,000 square foot manufacturing facility. The Company also repaid $8.7 million
of debt during the nine-month period, consisting of $7.3 million repaid on its
lines of credit and $1.4 million of scheduled repayments on its long-term
facilities. Raw material inventories decreased $2.7 million in the nine months
ended December 31, 1996, primarily due to a reduction in polyester film. Accrued
royalties for calendar year 1996 to be paid in February 1997 were primarily
responsible for the $2.0 million increase in the payable to Fujicopian Co., Ltd.
The Company expects to spend approximately $2.0 million on capital
expenditures during the remainder of fiscal 1997. The Company had available
borrowing capacity on lines of credit with two banks of $21.0 million at
December 31, 1996. This borrowing capacity was increased by an additional $10.0
million by one of the banks which increased its line of credit on January 2,
1997. The Company anticipates funding its capital expenditure program and its
working capital requirements, in addition to repaying approximately $4.0 million
of the $9.0 million balance on its lines of credit, with cash generated by
operating activities in fiscal 1997. The Company believes that internally
generated cash will be more than sufficient to fully repay the lines of credit
and fund working capital, capital expenditures and debt service requirements in
fiscal 1998.
9
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
10.1 Demand Note Agreement, dated January 2, 1997, between Marine
Midland Bank and the Registrant.
10.24.1 Executive Continuity Agreement, dated December 31, 1996, between
John W. O'Leary and the Registrant.
10.24.2 Executive Continuity Agreement, dated December 31, 1996, between
Richard A. Marshall and the Registrant.
10.24.3 Executive Continuity Agreement, dated December 31, 1996, between
Michael J. Drennan and the Registrant.
10.24.4 Executive Continuity Agreement, dated December 31, 1996, between
Vincent C. Dowell and the Registrant.
10.24.5 Executive Continuity Agreement, dated December 31, 1996, between
Nick S. Mandrycky and the Registrant.
10.24.6 Executive Continuity Agreement, dated December 31, 1996, between
Rick W. Wallace and the Registrant.
10.24.7 Executive Continuity Agreement, dated December 31, 1996, between
F. Lynn Hamb and the Registrant.
10.24.8 Executive Continuity Agreement, dated December 31, 1996, between
David B. Lupp and the Registrant.
10.24.9 Executive Continuity Agreement, dated December 31, 1996, between
Susan R. Stamp and the Registrant.
11 Statement re: Calculation of Net Income Per Share of Common Stock.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended December 31,
1996.
10
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
INTERNATIONAL IMAGING MATERIALS, INC.
Date: 2/10/97 /s/ JOHN W. O'LEARY
--------- ------------------------------
John W. O'Leary
President and
Chief Executive Officer
Date: 2/10/97 /s/ MICHAEL J. DRENNAN
--------- ------------------------------
Michael J. Drennan
Vice President - Finance,
Treasurer, Secretary and
Chief Financial Officer
11
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EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
10.1 Demand Note Agreement, dated January 2, 1997,
between Marine Midland Bank and the Registrant
10.24.1 Executive Continuity Agreement, dated December 31,
1996, between John W. O'Leary and the Registrant.
10.24.2 Executive Continuity Agreement, dated December 31,
1996, between Richard A. Marshall and the Registrant.
10.24.3 Executive Continuity Agreement, dated December 31,
1996, between Michael J. Drennan and the Registrant.
10.24.4 Executive Continuity Agreement, dated December 31,
1996, between Vincent C. Dowell and the Registrant.
10.24.5 Executive Continuity Agreement, dated December 31,
1996, between Nick S. Mandrycky and the Registrant.
10.24.6 Executive Continuity Agreement, dated December 31,
1996, between Rick W. Wallace and the Registrant.
10.24.7 Executive Continuity Agreement, dated December 31,
1996, between F. Lynn Hamb and the Registrant
10.24.8 Executive Continuity Agreement, dated December 31,
1996, between David B. Lupp and the Registrant.
10.24.9 Executive Continuity Agreement, dated December 31,
1996, between Susan R. Stamp and the Registrant.
11 Calculation of Net Income per Share of Common Stock
27 Financial Data Schedule
12
<PAGE>
EXHIBIT 10.1
NOTE
$20,000,000.00 Buffalo, New York
January 2, 1997
FOR VALUE RECEIVED, INTERNATIONAL IMAGING MATERIALS, INC. (Company)
hereby promises to pay to the order of MARINE MIDLAND BANK (Bank), on demand or
when due as provided herein, at One Marine Midland Center, Attn: Regional
Commercial Banking Department, Buffalo, New York 14203, the lesser of TWENTY
MILLION AND NO/100 DOLLARS ($20,000,000.00) or the aggregate unpaid principal
balance amount of all advances made by the Bank to the Company from time to
time, as evidenced by the inscriptions made on the schedule on the reverse side
hereof or any continuation thereof (Schedule), together with interest thereon as
set forth below.
1. Definitions As used in this Note, unless otherwise specified, the
-----------
following terms shall have the following respective meanings:
"Business Day" - Any day excluding Saturday, Sunday and any day on
which banks in Buffalo, New York are required or authorized by law or other
governmental action to close.
"Federal Funds Rate" - The rate determined daily by the Bank based in
part on the daily federal funds rate plus 50 basis points.
"Fixed Rate" - A per annum rate determined by the Bank based on the
Federal Funds Rate and offered by the Bank to the Company for a Fixed Rate
Interest Period. A Fixed Rate shall only be available on the date such rate is
quoted by the Bank.
"Federal Funds Rate Loan" - Any loan other than a Fixed Rate Loan on
which interest is calculated based on the Federal Funds Rate.
"Fixed Rate Loan" - Any loan on which interest is calculated based on
the Fixed Rate.
"Fixed Rate Interest Period" - The period from one day up to ninety
days selected by the Company pursuant to Section 3 hereof during which the Fixed
Rate Option is in effect.
"Interest Period" - Either a Fixed Rate Interest Period or a Libor
Interest Period, as appropriate.
"Libor Interest Period" - The 30, 60 or 90 day period selected by
Company pursuant to Section 3 hereof during which the Libor Rate Option is in
effect.
<PAGE>
-2-
"Libor Interest Determination Date" - A Business Day that is two
Business Days prior to the commencement of each Interest Period during which the
Libor Rate will be applicable.
"Libor Loan" - Any Loan on which interest is calculated based on the
Libor Rate.
"Libor Rate" - The rate of interest equal to (a) the per annum rate
determined by the Bank, applicable to any selected Interest Period based on the
average rate per annum which the offices C~ various leading banks located in
London, England offer for deposits in U.S. Dollars in the London Interbank
Eurodollar Market at approximately 11:00 a.m. (London time) on a Libor Interest
Determination Date in an amount approximately equal to the amount of the
applicable Libor Loan, plus (b) 20 basis points.
"Loan" or "Loans" - Any and all loans made pursuant to this Note
whether as a Federal Funds Rate Loan, a Libor Loan, or a Fixed Rate Loan.
"Prime Rate" - The rate of interest publicly announced by Bank from
time to time as its prime rate and is a base rate for calculating interest on
certain loans. The Prime Rate may or may not be the most favorable rate charged
by the Bank to its customers from time to time.
"Rate Options" - The choice of the Federal Funds Rate, Libor Rate or
Fixed Rate options and Interest Periods offered to Company pursuant to Section 3
hereof to establish the interest to be charged on the unpaid principal amount
hereof from time to time.
"Request Certificate" - A certificate in the form annexed hereto as
Exhibit A with all blanks appropriately completed, and duly executed on behalf
of the Company.
2. Advances. Nothing contained in this Note or otherwise is
--------
intended, nor shall constitute, any obligation of the Bank to make any advance.
The Bank may, in its sole discretion, make an advance to the Company upon oral
request. Each oral request shall be conclusively presumed to have been made by a
person authorized by the Company to do so, and any credit by the Bank of an
advance to or for the account of the Company shall conclusively establish the
Company's obligation to repay same. The Bank shall incur no liability of any
kind to any party by reason of making an advance upon an oral request.
3. Interest.
--------
a. Rate. The unpaid principal amount of the Loans shall bear
----
interest until demand or maturity, whether by
<PAGE>
-3-
acceleration or otherwise, at a rate of interest per annum equal to either the
Federal Funds Rate, the Fixed Rate or the Libor Rate as selected by the Company
in accordance with the terms of this Note. If on any day a Loan is outstanding
with respect to which a proper and timely notice has not been delivered to Bank
in accordance with the terms of this Note specifying the basis for determining
the rate of interest, then for that day the Loan shall be deemed to be a Federal
Funds Rate Loan and shall bear interest accordingly.
b. Continuation or Conversion. Subject to the provisions of
--------------------------
Sections 3.d, 6 and 7 hereof, Company shall have the option prior to demand or
maturity of this Note:
(i) to convert all or any part of the outstanding Loans from
(aa) a Federal Funds Rate Loan to a Fixed Rate Loan or a Libor
Loan; (bb) a Libor Loan or a Fixed Rate Loan to a Federal Funds
Rate Loan; (cc) a Libor Loan to a Fixed Rate Loan; or (dd) a Fixed
Rate Loan to a Libor Loan; provided, however Libor Loans and Fixed
Rate Loans may only be converted on the expiration date of the
applicable Interest Period; and provided further, a Loan may only
be converted into a Libor Loan or a Fixed Rate Loan in amounts
equal to at least $100,000.00 or a whole multiple thereof; or
(ii) upon the expiration of any Interest Period to continue
all or any portion of the outstanding principal balance of a Libor
Loan or a Fixed Rate Loan equal to at least $100,000.00 or a whole
multiple thereof as a Libor Loan or a Fixed Rate Loan, the
succeeding Interest Period of which shall commence on the
expiration date of the Interest Period of the Loan to be
continued;
provided, however, Company may only continue a Libor Loan or a Fixed Rate Loan
or convert a Loan into a Libor Loan or a Fixed Rate Loan if Company at all times
either (x) maintains as Federal Funds Rate Loans a principal amount of this
Note equal to the amount of all scheduled principal payments due within 90 days
of such continuation or conversion date; or (y) has a sufficient amount of Libor
Loans or Fixed Rate Loans with Interest Periods ending on or before the next
scheduled principal payment date to pay all scheduled principal payments due
within 90 days of such continuation or conversion date; or (z) maintains a
combination of Federal Funds Rate Loans, Fixed Rate Loans and Libor Loans as
described in this Section 3.b.(x) and (y) at least equal to the amount of all
scheduled principal payments due within 90 days of such continuation or
conversion date.
<PAGE>
-4-
c. Notice of Rate Option Selected. Not later than 10:00 a.m. two
------------------------------
Business Days prior to the date of this Note, Company shall notify Bank (which
notice may be given by telephone) of the initial Rate Option selected. After the
date of this Note, Company shall notify Bank (which notice may be given by
telephone or facsimile confirmed within two Business Days thereafter by delivery
of an appropriately completed originally executed Request Certificate) not later
than 10:00 a.m. (New York time) on the Business Day of the proposed conversion
date in the case of a conversion to a Federal Funds Rate Loan or a Fixed Rate
Loan, or on the Libor Interest Determination Date immediately preceding the
proposed conversion or continuation date in the case of a conversion to a Libor
Loan or the continuation of a Libor Loan. The Company shall specify (i) the
proposed conversion/continuation date (which shall be a Business Day), (ii) the
amount of the Loans to be converted or continued (which shall equal at least
$100,000.00), (iii) whether the proposed conversion or continuation shall be a
Libor Loan, a Fixed Rate Loan or a Federal Funds Rate Loan, and (iv) in the case
of a conversion to, or continuation of, a Libor Loan or a Fixed Rate Loan, the
requested Interest Period. If as of the Business Day prior to the date of this
Note with respect to the initial Rate Option or as of the last day of any
Interest Period after the date hereof, notice has not been given to Bank in
accordance with this Section 3.c with respect to any outstanding Libor Loans or
Fixed Rate Loans, then for that day and thereafter until proper notice has been
given with respect to such Loan, such Loan shall bear interest based on the
Federal Funds Rate. The initial Interest Period and Rate Option selections
shall have the same limitations as described in the foregoing Section 3.b(x),
(y) and (z) regarding maintenance of a sufficient portion of this Note as a
Federal Funds Rate Loan and/or with restricted Interest Periods so as to
maintain at all times Company's ability to pay scheduled principal payments due
within 90 days of the date hereof.
Bank shall not incur any liability to Company in acting upon
telephonic notice which Bank believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company.
Except as provided for in Sections 6 and 7 of this Note, notice by
Company for conversion to, or continuation of, Libor Loans shall be irrevocable
on and after the related Libor Interest Determination Date until the expiration
of the applicable Interest Period, and Company shall be bound to convert or
continue in accordance therewith.
d. Computation of Interest. Any change in the interest rate
-----------------------
on a Federal Funds Rate Loan resulting from a change in the Federal Funds Rate
shall be effective on the date of such change. Interest shall be calculated on
the basis of one
<PAGE>
-5-
three-hundred sixtieth (1/360th) of the interest rate thereof in effect for each
calendar day such balance of principal is unpaid which will result in a higher
effective annual rate. In computing interest on any Loan, the date of the
making of the Loan (which shall, for purposes of this Section 3.d only, be
deemed to include the date of conversion to a Federal Funds Rate Loan) or the
first day of an Interest Period shall be included and the date of payment
(which shall, for the purposes of this Section 3.d only, be deemed to include
the date of conversion of a Libor Loan or a Fixed Rate Loan) or the expiration
date of an Interest Period shall be excluded; provided, that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
Interest on all Federal Funds Rate Loans and Fixed Rate Loans shall be
payable monthly on the first day of each month following the date of this Note
until this Note is paid in full, and on the date this Note is paid in full.
Interest on each Libor Loan shall be payable on the last day of the applicable
Interest Period for such Libor Loan until this Note is paid in full, and on the
date this Note is paid in full.
e. Post-Maturity Interest. After maturity, whether by
----------------------
acceleration or otherwise, if an advance is not payable on demand, or after
demand, if an advance is payable on demand, such advance shall bear interest
payable monthly on the first day of each month until this Note is paid in full
and on the date this Note is paid in full at a per annum rate of three percent
(3%) in excess of the Prime Rate in effect from time to time until this Note is
paid in full. In no event shall the interest on this Note exceed the maximum
rate authorized by law.
4. Payments. Each advance shall be payable on the earlier of (a)
--------
the due date thereof or on demand, as inscribed by the Bank on the Schedule,
or (b) ninety-two (92) days after the date upon which such advance is made. The
Bank will endeavor (but shall be under no obligation) to send to the Company
written confirmation of the due date of each advance, but any failure to do so
shall not relieve the Company of the obligation to repay the advance when due.
Unless the Company shall object to such confirmation in writing within three (3)
days after receipt thereof, such confirmation shall be prima facie evidence of
the facts stated therein.
5. Repayments and Prepayments. Company shall have the right to
--------------------------
repay or prepay at any time, without premium, all or any portion of the
principal indebtedness evidenced by this Note not payable on demand which is a
Federal Funds Rate Loan, together with accrued interest on the principal so
repaid or prepaid to the date of such payment; provided, that any such
prepayment would not cause Company to be in violation of the terms of Section
3.b hereof. Any partial prepayments of
<PAGE>
-6-
principal shall be applied upon installments of this Note in inverse order of
maturity, unless otherwise agreed in writing by the Bank and the Company.
6. Special Provisions Governing Libor Loans - Increased Costs.
----------------------------------------------------------
a. In the event that on any Libor Interest Determination Date,
Bank shall have determined (which determination shall be final, conclusive and
binding) that:
(1) by reason of conditions in the London Interbank
Eurodollar Market or of conditions affecting the position of Bank in such market
occurring after the date hereof, adequate fair means do not exist for
establishing the Libor Rate, or
(2) by reason of (i) any applicable law or governmental rule,
regulation, guideline or order (or any written interpretation thereof and
including any new law or governmental rule, regulation, guideline or order but
excluding any of the foregoing relating to taxes referred to in Section 8) or
(ii) other circumstances affecting Bank or the London Interbank Eurodollar
Market or the position of Bank in such market (such as, but not limited to,
official reserve requirements), the Libor Rate does not represent the effective
pricing to Bank for U.S. dollar deposits of comparable amounts for the
relevant period due to such increased costs; then, and in either such event,
Bank shall on such date (and in any event as soon as possible after being
notified of a new Interest Period) give notice by telephone, confirmed in
writing, to Company of such determination.
b. Thereafter, Company shall pay to Bank upon written request
therefor, such additional amounts as Bank in its sole discretion, shall
reasonably determine to be required to compensate Bank for such increased costs.
A certificate as to such additional amounts submitted to Company by Bank shall,
absent manifest error, be final, conclusive and binding upon Company and Bank.
c. In lieu of paying Bank such additional amounts as required by
this Section 6, Company may exercise the following options:
(1) If such determination by Bank relates only to a Libor
Loan then being requested by Company pursuant to the terms hereof, Company may,
on such Libor Interest Determination Date by giving notice by telephone to Bank,
withdraw such request; or
<PAGE>
-7-
(2) Company may, by giving notice by telephone to Bank
require Bank to make the Libor Loan then being requested in the form of a
Federal Funds Rate Loan or a Fixed Rate Loan, or to convert its outstanding
Libor Loan that is so affected into a Federal Funds Rate Loan or a Fixed Rate
Loan at the end of the then current Interest Period.
7. Required Termination and Repayment of Libor Loans.
-------------------------------------------------
a. In the event Bank shall have reasonably determined, at any
time (which determination shall be final, conclusive and binding but shall be
made only after consultation with Company), that the making or continuation of
any or all of its Libor Loans:
(1) has become unlawful by compliance by Bank in good faith
with any applicable law, governmental rule, regulation, guideline or order, or
(2) would cause Bank severe hardship as a result of a
contingency occurring after the date of this Note which materially and adversely
affects the London Interbank Eurodollar Market (such as, but not limited to
disruptions resulting from political or economic events); then, and in either
such event, Bank shall on such date (and in any event as soon as possible after
making such determination) give telephonic notice to Company, confirmed in
writing, of such determination, identifying which of the Libor Loans was so
affected.
b. Company then shall, upon the termination of the then current
Interest Period applicable to each Libor Loan so affected or, if earlier, when
required by law, repay each such affected Libor Loan, together with all interest
accrued thereon.
c. In lieu of the repayment to Bank required by Section 7.b,
Company may exercise the following options:
(1) If the determination by Bank relates only to a Libor Loan
then being requested by Company pursuant to the terms hereof, Company may, on
such date by giving notice by telephone to Bank, withdraw such request; or
(2) Company may, by giving notice by telephone to Bank,
require Bank to make the Libor Loan then being requested in the form of a
Federal Funds Rate Loan or a Fixed Rate Loan, or to convert its outstanding
Libor Loan or Loans that are so affected into a Federal Funds Rate Loan or a
Fixed Rate Loan at the end of the then current Libor Interest Period applicable
to each such Libor Loan (or at such earlier time as repayment is otherwise
required to be made pursuant to the terms of this Note). Such notice shall
pertain only to the Libor Loan
<PAGE>
-8-
outstanding or to be outstanding during each such affected Libor Interest
Period.
8. Taxes. If any taxes or duties of any kind shall be payable, or
-----
ruled to be payable, by or to any taxing authority of or in the United States,
or any other foreign country, or any political subdivision of any thereof, in
respect of any of the transactions contemplated by this Note (including, but not
limited to, execution, delivery, performance, enforcement, or payment of
principal or interest of or under this Note or the making of the Libor Loan), by
reason of any not existing or hereafter enacted statute, rule, regulation or
other determination (excluding any taxes imposed on or measured by the net
income of Bank), Company will:
a. Pay on written request therefor all such taxes or duties,
including interest and penalty, if any;
b. Promptly furnish Bank with evidence of any such payment; and
c. Indemnify and hold Bank and any holder or holders of this Note
harmless and indemnified against any liability or liabilities with respect to or
in connection with any such taxes or the payment thereof or resulting from any
delay or omission to pay such taxes.
9. Schedule. Bank is authorized to inscribe the type of, and date
--------
of the making, conversion and continuation of, each Federal Funds Rate Loan,
each Fixed Rate Loan and each Libor Loan, the amount thereof, the applicable
interest rate, the dates on which each Interest Period shall begin and end, the
due date thereof, each payment or prepayment of principal, and the aggregate
unpaid principal balance of this Note on the Schedule. Each entry set forth on
the Schedule shall be prima facie evidence of the facts so set forth, except for
any such funds as to which the Bank has sent to the Company a written
confirmation and the Company has timely objected as provided herein. No failure
by Bank to make, and no error by Bank in making, any inscription on the Schedule
shall affect Company's obligation to repay the full principal amount advanced by
Bank to or for the account of Company, or Company's obligation to pay interest
thereon at the agreed upon rate.
10. Collateral. If payment of this Note is secured by collateral,
----------
the collateral is specified in the collateral records of the Bank.
11. Events of Default. Any holder of this Note may declare all
-----------------
indebtedness evidenced by this Note, not payable on demand, to be immediately
due and payable whenever such holder has the right to do so under any security
agreement or other
<PAGE>
-9-
agreement, now or hereafter in effect, pursuant to which payment of the
indebtedness evidenced by this Note is secured; or irrespective of the terms or
existence of any such security agreement or other agreement, upon the occurrence
of any one or more of the following events:
a. Nonpayment when the same becomes due, whether by acceleration
or otherwise, of principal of, or interest on, any indebtedness evidenced by
this Note;
b. Default by Company in the payment or performance of any
obligation, term, condition or event of default of any other agreement between
Company and the holder hereof;
c. Ninety days after the death or judicial declaration of
incompetency of any indorser, guarantor or any other party liable for, or whose
assets or any interest therein secures, payment of any indebtedness evidenced by
this Note, if an individual;
d. The filing by or against Company of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, relief as a debtor or other relief under the bankruptcy, insolvency or
similar laws of the United States or any state or territory thereof or any
foreign jurisdiction, now or hereafter in effect;
e. The making of any general assignment by Company for the
benefit of creditors;
f. The appointment of a receiver or trustee for Company or for
any assets of Company, including, without limitation, the appointment of, or
taking possession by, a "custodian", as defined in the Federal Bankruptcy Code;
g. The occurrence of any event described in clause (c), (d), (e)
or (f) of this paragraph with respect to any indorser, guarantor or any other
party liable for, or whose assets or any interest therein secures, payment of
any indebtedness evidenced by this Note, or the occurrence of any such event
with respect to any general partner of any maker hereof, if any such maker is a
partnership;
h. Nonpayment by Company when due (or, if permitted by the terms
of the applicable document, within any applicable grace period), whether by
acceleration, demand or otherwise, of any indebtedness for borrowed money owing
to any party other than Bank, or the occurrence of any event which could result
in acceleration of the time for payment of any such indebtedness; or
<PAGE>
- 10 -
i. If the holder hereof in good faith believes that the prospect
of payment of all or any part of the indebtedness evidenced by this Note is
impaired.
12. Waiver. No failure by the Bank to exercise, and no delay in
------
exercising, any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by the Bank of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies of the Bank as herein specified
are cumulative and not exclusive of any other rights or remedies which the Bank
may otherwise have.
13. Costs and Expenses. Company agrees to pay all reasonable costs
------------------
and expenses incurred by the holder in enforcing this Note or in collecting the
indebtedness evidenced hereby, including, without limitation, if the holder
retains counsel for any such purpose, reasonable attorneys' fees and expenses.
14. Successors and Assigns. Company and Bank as used herein shall
----------------------
include the legal representatives, successors and assigns of those parties.
15. Governing Law. This Note shall be construed under, and governed
-------------
by, the internal laws of the State of New York without regard to principles of
conflicts of laws.
INTERNATIONAL IMAGING MATERIALS, INC.
[SEAL] By /s/ Michael J. Drennan
----------------------------------
Name: Michael J. Drennan
-------------------------------
Title: VP-Finance
------------------------------
<PAGE>
SCHEDULE
--------
LOANS, INTEREST RATES AND PAYMENTS OF PRINCIPAL
-----------------------------------------------
<TABLE>
<CAPTION>
AMOUNT
DATE LOAN AMOUNT OF TYPE OF DUE OF AGGREGATE
MADE, CON- LOAN MADE, LOAN AND INTEREST DATE, PRINCIPAL UNPAID NOTATION
TINUED OR CONTINUED OR INTEREST PERIOD IF PAID OR PRINCIPAL MADE BY
CONVERTED CONVERTED RATE DATES ANY PREPAID BALANCE AND DATE
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT A
---------
REQUEST CERTIFICATE
-------------------
The undersigned hereby certifies to Marine Midland Bank ("Bank"), in
accordance with the terms of a Note dated January 2, 1997 from the undersigned
to the Bank ("Note");
The undersigned requests or has requested by telephone or facsimile
notice a:
(Check One)
[ ] conversion
[ ] continuation
of a
(Check One)
[ ] Libor Loan
[ ] Federal Funds Rate Loan
[ ] Fixed Rate Loan
to a
(Check One)
[ ] Libor Loan
[ ] Federal Funds Rate Loan
[ ] Fixed Rate Loan
in the amount of $ for an Interest Period, if applicable, of
-------------
LIBOR LOAN FIXED RATE LOAN
(check one) (enter number of days
between 1 and 90)
[ ] 30 days.
[ ] 60 days. days
[ ] 90 days. -----
The proposed conversion/continuation is to be made on 19
-------------, --.
WITNESS the signature of the undersigned authorized signatory this
day of 19 .
- ---- -------------, --
INTERNATIONAL IMAGING MATERIALS, INC.
By
--------------------------------------
(Title)
<PAGE>
EXHIBIT 10.24.1
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and John W. O'Leary
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of January 1, 1991 ("Prior Agreement")
and wish to enter into this Agreement to amend and restate the Prior Agreement
as herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as President and Chief Executive
--------
Officer, at Employer's headquarters in Amherst, New York, or in such other, and
in such additional, senior management position or positions and/or in such other
location as Executive and Employer shall mutually agree. Executive hereby
accepts the employment specified herein and agrees, so long as he is employed
hereunder, to devote substantially his full time to the services required of him
in his employment, except for vacation time and reasonable periods of absence
due to sickness, personal injury or other disability. Executive agrees to use
his best efforts and judgment to advance the business and interests of Employer
in a manner consonant with the duties of his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $302,900
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
<PAGE>
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive,
-2-
<PAGE>
in a single lump sum payment, within 60 days after the effective date of such
termination of employment (i) his base salary as provided in Section 3, as the
same may have been increased by Employer's Board of Directors or Compensation
Committee, payable through such effective date; (ii) any bonuses earned but not
yet paid for any fiscal year completed prior to such effective date; and (iii)
any deferred salary, bonuses or other compensation, but subject to the terms of
any applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all
-3-
<PAGE>
benefits theretofore being provided to him as provided in Section 5; (iii) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary targets in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements. The foregoing and Section 9
of this Agreement shall be Executive's sole and exclusive remedy if, prior to a
Change in Control, his employment is terminated without Cause or Disability or
if he resigns as a result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder,
his employment shall terminate and Executive's estate shall be entitled to
receive all rights and benefits to which Executive would have been entitled had
his employment been terminated as described in Paragraph (c)(1) of this Section
6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any
-4-
<PAGE>
corporation owned, directly or indirectly, by Employer or the
stockholders of Employer in substantially the same proportions as
their ownership of stock of Employer), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Employer
representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members by
a majority of that portion of the Board consisting of members who
were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting power
of the voting securities of Employer, or such surviving entity,
outstanding immediately after such merger or consolidation; or (b)
a merger or consolidation effected to implement a recapitalization
of Employer (or similar transaction) in which no "person" (as
defined above) acquires more than 35% of then-outstanding
securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
-5-
<PAGE>
the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) within 5 business days following such termination
Executive shall be entitled (in addition to all amounts to which
Executive would have been entitled had such termination been a
termination for Cause as described in Section 6(a)) to receive a
lump sum payment equal to the greater of (A) or (B):
(A) The following with respect to the period commencing on
the effective date of such termination and ending on the
expiration of 36 months after the Change in Control: (x)
Executive's highest monthly base salary annualized (i.e. the
Executive's highest monthly base salary multiplied by twelve
(12)) for any time in the five (5) years prior to such
termination; (y) the prorated portion (based on the portion
of the fiscal year served prior to termination) of the bonus
that Executive would have earned pursuant to Section 4 for
that fiscal year as if all primary targets in respect of
that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid or, if no such annual
bonus program is then in effect, the most recent annual
bonus awarded the Executive; or
(B) The product of three times (3) Executive's highest
monthly base salary on an annualized (i.e. the Executive's
highest monthly base salary multiplied by twelve (12)) for
any time in the five (5) years prior to such termination,
plus an amount equal to the product of three times (3) the
amount of the highest bonus paid to Executive at any time
during the five (5) fiscal years of Employer completed prior
to his termination of employment.
-6-
<PAGE>
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after
thirty-six (36) months following a Change in Control: (i) for a reason other
than Cause or Disability, or (ii) if Executive resigns because of material
breach of the Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of
termination: (x) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (y)
all benefits theretofore being provided to him as provided in Section 5; (z) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary target in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements.
-7-
<PAGE>
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to receive the payments and commence receiving the
benefits described in subparagraph (3) of this Section 6(d). "Good Reason"
shall mean the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially
-8-
<PAGE>
similar to those provided pursuant to Section 5 hereof at the
time of the Change in Control of Employer or the taking of any
action by Employer which would directly or indirectly materially
reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid to the Executive by
Employer (or any of its subsidiaries or successors) in fulfillment of any
applicable and binding statute or regulation which legally obligate Employer (or
its subsidiary or successor) to make a severance payment or payments to
Executive as a direct result of the termination of his employment, but not
including payments received by the Executive under any legally required social
programs in which employers are required to participate on behalf of their
employees, generally, such as U.S. Social Security or state-mandated
unemployment insurance car the equivalent thereof. In addition, the obligation
to make payments and provide benefits under this Agreement shall not be subject
to any reduction or offset due to the fact that Executive may receive or is
receiving retirement payments from Employer or distributions from Employer's
retirement plan(s), its successor or any other source, nor due to the fact that
the Executive is, or during the term or effectiveness of this Agreement may
become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments under
this Section 6, the amounts payable shall not be
-9-
<PAGE>
reduced by the amounts paid to Executive by another subsequent employer.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of September 5, 1989, and
amended and restated on December 31, 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1989 Agreement") which is
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1989 Agreement and under applicable law, in the event of
Executive's breach of the 1989 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1989 Agreement are in addition to any amounts payable under this
Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
-10-
<PAGE>
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Supplemental Executive Retirement Agreement. Executive's
-------------------------------------------
Supplemental Executive Retirement Agreement dated as of January 1, 1991 is
hereby terminated and cancelled.
14. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall 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 Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and his personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 14, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
-11-
<PAGE>
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
John W. O'Leary
30 Great Oak Lane
Pittsford, New York 14534
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the
-12-
<PAGE>
subject matter hereof and supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ Donald D. Lennox
-------------------------------------
Donald D. Lennox
Its: Chairman of the Board
/s/ John W. O'Leary
----------------------------------------
John W. O'Leary
(Executive)
-13-
<PAGE>
EXHIBIT 10.24.2
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Richard A. Marshall
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of June 27, 1994 ("Prior Agreement") and
wish to enter into this Agreement to amend and restate the Prior Agreement as
herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Executive Vice President and
--------
Chief Operating Officer, at Employer's headquarters in Amherst, New York, or in
such other, and in such additional, senior management position or positions
and/or in such other location as Executive and Employer shall mutually agree.
Executive hereby accepts the employment specified herein and agrees, so long as
he is employed hereunder, to devote substantially his full time to the services
required of him in his employment, except for vacation time and reasonable
periods of absence due to sickness, personal injury or other disability.
Executive agrees to use his best efforts and judgment to advance the business
and interests of Employer in a manner consonant with the duties of his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $189,861
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
<PAGE>
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive,
-2-
<PAGE>
in a single lump sum payment, within 60 days after the effective date of such
termination of employment (i) his base salary as provided in Section 3, as the
same may have been increased by Employer's Board of Directors or Compensation
Committee, payable through such effective date; (ii) any bonuses earned but not
yet paid for any fiscal year completed prior to such effective date; and (iii)
any deferred salary, bonuses or other compensation, but subject to the terms of
any applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all
-3-
<PAGE>
benefits theretofore being provided to him as provided in Section 5; (iii) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary targets in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements. The foregoing and Section 9
of this Agreement shall be Executive's sole and exclusive remedy if, prior to a
Change in Control, his employment is terminated without Cause or Disability or
if he resigns as a result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any
-4-
<PAGE>
corporation owned, directly or indirectly, by Employer or the
stockholders of Employer in substantially the same proportions as
their ownership of stock of Employer), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Employer
representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors,
in its sole discretion, elects to treat as a Change in Control
for purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
-5-
<PAGE>
the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) within 5 business days following such termination
Executive shall be entitled (in addition to all amounts to which
Executive would have been entitled had such termination been a
termination for Cause as described in Section 6(a)) to receive a
lump sum payment equal to the greater of (A) or (B):
(A) The following with respect to the period commencing on
the effective date of such termination and ending on the
expiration of 36 months after the Change in Control: (x)
Executive's highest monthly base salary annualized (i.e. the
Executive's highest monthly base salary multiplied by twelve
(12)) for any time in the five (5) years prior to such
termination; (y) the prorated portion (based on the portion
of the fiscal year served prior to termination) of the bonus
that Executive would have earned pursuant to Section 4 for
that fiscal year as if all primary targets in respect of
that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid or, if no such annual
bonus program is then in effect, the most recent annual
bonus awarded the Executive; or
(B) The product of three times (3) Executive's highest
monthly base salary on an annualized (i.e. the Executive's
highest monthly base salary multiplied by twelve (12)) for
any time in the five (5) years prior to such termination,
plus an amount equal to the product of three times (3) the
amount of the highest bonus paid to Executive at any time
during the five (5) fiscal years of Employer completed prior
to his termination of employment.
-6-
<PAGE>
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or (ii) if Executive resigns because of material breach of the
Agreement by Employer, Executive shall be entitled to continue to receive for a
period of nine (9) months following the effective date of termination: (x) his
base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee; (y) all benefits
theretofore being provided to him as provided in Section 5; (z) any deferred
salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary target in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements.
-7-
<PAGE>
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to receive the payments and commence receiving the
benefits described in subparagraph (3) of this Section 6(d). "Good Reason"
shall mean the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially
-8-
<PAGE>
similar to those provided pursuant to Section 5 hereof at the
time of the Change in Control of Employer or the taking of any
action by Employer which would directly or indirectly materially
reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid to the Executive by
Employer (or any of its subsidiaries or successors) in fulfillment of any
applicable and binding statute or regulation which legally obligate Employer (or
its subsidiary or successor) to make a severance payment or payments to
Executive as a direct result of the termination of his employment, but not
including payments received by the Executive under any legally required social
programs in which employers are required to participate on behalf of their
employees, generally, such as U.S. Social Security or state-mandated
unemployment insurance car the equivalent thereof. In addition, the obligation
to make payments and provide benefits under this Agreement shall not be subject
to any reduction or offset due to the fact that Executive may receive or is
receiving retirement payments from Employer or distributions from Employer's
retirement plan(s), its successor or any other source, nor due to the fact that
the Executive is, or during the term or effectiveness of this Agreement may
become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments under
this Section 6, the amounts payable shall not be
-9-
<PAGE>
reduced by the amounts paid to Executive by another subsequent employer.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of May 23, 1993, and amended
and restated on December 31, 1996 entitled "Nondisclosure, Noncompetition and
Optional Consulting Agreement" ("1993 Agreement") which is attached to this
Agreement and which shall remain in full force and effect notwithstanding any
provision of this Agreement. In addition to the remedies provided in the 1993
Agreement and under applicable law, in the event of Executive's breach of the
1993 Agreement all compensation and benefits otherwise payable to Executive
under this Agreement shall terminate. Any amounts payable under the 1993
Agreement are in addition to any amounts payable under this Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
-10-
<PAGE>
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall 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 Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and his personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality
-11-
<PAGE>
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Richard A. Marshall
5560 Oak Dale Lane
Williamsville, New York 14221
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
-12-
<PAGE>
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ Richard A. Marshall
----------------------------------------
Richard A. Marshall
(Executive)
-13-
<PAGE>
EXHIBIT 10.24.3
Detailed Agreement
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Michael J. Drennan
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of June 21, 1994 ("Prior Agreement") and
wish to enter into this Agreement to amend and restate the Prior Agreement as
herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Vice President - Finance,
--------
Treasurer, Secretary and Chief Financial Officer, at Employer's headquarters in
Amherst, New York, or in such other, and in such additional, senior management
position or positions and/or in such other location as Executive and Employer
shall mutually agree. Executive hereby accepts the employment specified herein
and agrees, so long as he is employed hereunder, to devote substantially his
full time to the services required of him in his employment, except for vacation
time and reasonable periods of absence due to sickness, personal injury or other
disability. Executive agrees to use his best efforts and judgment to advance
the business and interests of Employer in a manner consonant with the duties of
his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $124,021
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as
<PAGE>
shall be agreed upon between Employer and Executive. The annual base salary
actually paid under this Section may only be reduced, however, to the extent
Executive elects to defer such salary under the terms of any deferred
compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same
- 2 -
<PAGE>
within a reasonable time (not to exceed 30 days). In the event of termination
for Cause, Executive shall be entitled to receive, in a single lump sum payment,
within 60 days after the effective date of such termination of employment (i)
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, payable through such
effective date; (ii) any bonuses earned but not yet paid for any fiscal year
completed prior to such effective date; and (iii) any deferred salary, bonuses
or other compensation, but subject to the terms of any applicable plan or
deferral agreement. The amounts and rights to which Executive may be entitled in
respect of any outstanding restricted stock grants, stock options, stock
appreciation rights and supplemental retirement benefit arrangements shall be
determined in accordance with the applicable plans and/or any applicable
agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received atleast nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive his
base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as
- 3 -
<PAGE>
provided in Section 3, as the same may have been increased by Employer's Board
of Directors or Compensation Committee; (ii) all benefits theretofore being
provided to him as provided in Section 5; (iii) any deferred salary, bonuses and
other compensation, but subject to the terms of any applicable plan or deferral
agreement; and, within 60 days after the effective date of his termination, he
shall be paid the prorated portion (based on the portion of the fiscal year
served prior to termination) of the bonus that Executive would have earned
pursuant to Section 4 for that fiscal year, as if all the primary targets in
respect of that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid. The amounts and rights to which Executive
may be entitled in respect of any outstanding restricted stock grants, stock
options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements. The foregoing and Section 9 of this Agreement shall
be Executive's sole and exclusive remedy if, prior to a Change in Control, his
employment is terminated without Cause or Disability or if he resigns as a
result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities
- 4 -
<PAGE>
Exchange Act of 1934, as amended (the "Exchange Act") (other than
(a) Employer or (b) any corporation owned, directly or
indirectly, by Employer or the stockholders of Employer in
substantially the same proportions as their ownership of stock of
Employer), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Employer representing 35% or more of the combined
voting power of Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good
- 5 -
<PAGE>
Reason (Section 6(c)(1)) or as a result of Executive's death (Section 6(c)(2)),
then Executive shall be entitled to receive the compensation described in the
applicable paragraph of this Section 6 (as indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) within 5 business days following such termination
Executive shall be entitled (in addition to all amounts to which
Executive would have been entitled had such termination been a
termination for Cause as described in Section 6(a)) to receive a
lump sum payment equal to the greater of (A) or (B):
(A) The following with respect to the period commencing on
the effective date of such termination and ending on the
expiration of 36 months after the Change in Control: (x)
Executive's highest monthly base salary annualized (i.e. the
Executive's highest monthly base salary multiplied by twelve
(12)) for any time in the five (5) years prior to such
termination; (y) the prorated portion (based on the portion
of the fiscal year served prior to termination) of the bonus
that Executive would have earned pursuant to Section 4 for
that fiscal year as if all primary targets in respect of
that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid or, if no such annual
bonus program is then in effect, the most recent annual
bonus awarded the Executive; or
(B) The product of three (3) times Executive's highest
monthly base salary on an annualized basis (i.e. the
Executive's highest monthly base salary multiplied by twelve
(12)) for any time in the five (5) years prior to such
termination, plus an amount equal to the product of three
times (3) the amount of the highest bonus paid to Executive
at any time during the five (5)
- 6 -
<PAGE>
fiscal years of Employer completed prior to his termination
of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or (ii) if Executive resigns because of material breach of the
Agreement by Employer, Executive shall be entitled to continue to receive for a
period of nine (9) months following the effective date of termination: (x) his
base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee; (y) all benefits
theretofore being provided to him as provided in Section 5; (z) any deferred
salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary target in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement
- 7 -
<PAGE>
benefit arrangements shall be determined in accordance with the applicable plans
and/or any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to receive the payments and commence receiving the
benefits described in subparagraph (3) of this Section 6(d). "Good Reason"
shall mean the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
- 8 -
<PAGE>
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid to the Executive by
Employer (or any of its subsidiaries or successors) in fulfillment of any
applicable and binding statute or regulation which legally obligate Employer (or
its subsidiary or successor) to make a severance payment or payments to
Executive as a direct result of the termination of his employment, but not
including payments received by the Executive under any legally required social
programs in which employers are required to participate on behalf of their
employees, generally, such as U.S. Social Security or state-mandated
unemployment insurance car the equivalent thereof. In addition, the obligation
to make payments and provide benefits under this Agreement shall not be subject
to any reduction or offset due to the fact that Executive may receive or is
receiving retirement payments from Employer or distributions from Employer's
retirement plan(s), its successor or any other source, nor due to the fact that
the Executive is, or during the term or effectiveness of this Agreement may
become, at or beyond any unusual or normal retirement age.
- 9 -
<PAGE>
(g) In the event that Executive becomes entitled to payments under
this Section 6, the amounts payable shall not be reduced by the amounts paid to
Executive by another subsequent employer.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of September 5, 1989, and
amended and restated on December 31, 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1989 Agreement") which is
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1989 Agreement and under applicable law, in the event of
Executive's breach of the 1989 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1989 Agreement are in addition to any amounts payable under this
Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in
- 10 -
<PAGE>
the Wall Street Journal during the relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall 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 Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and his personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
- 11 -
<PAGE>
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Michael J. Drennan
5810 Thompson Road
Clarence Center, NY 14032
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the
- 12 -
<PAGE>
subject matter hereof and supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ Michael J. Drennan
----------------------------------------
Michael J. Drennan
(Executive)
- 13 -
<PAGE>
EXHIBIT 10.24.4
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Vincent C. Dowell
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of June 23, 1994 ("Prior Agreement") and
wish to enter into this Agreement to amend and restate the Prior Agreement as
herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Vice President -
--------
Manufacturing at Employer's headquarters in Amherst, New York, or in such other,
and in such additional, senior management position or positions and/or in such
other location as Executive and Employer shall mutually agree. Executive hereby
accepts the employment specified herein and agrees, so long as he is employed
hereunder, to devote substantially his full time to the services required of him
in his employment, except for vacation time and reasonable periods of absence
due to sickness, personal injury or other disability. Executive agrees to use
his best efforts and judgment to advance the business and interests of Employer
in a manner consonant with the duties of his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $135,000
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
<PAGE>
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive,
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<PAGE>
in a single lump sum payment, within 60 days after the effective date of such
termination of employment (i) his base salary as provided in Section 3, as the
same may have been increased by Employer's Board of Directors or Compensation
Committee, payable through such effective date; (ii) any bonuses earned but not
yet paid for any fiscal year completed prior to such effective date; and (iii)
any deferred salary, bonuses or other compensation, but subject to the terms of
any applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all
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<PAGE>
benefits theretofore being provided to him as provided in Section 5; (iii) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of his termination, he shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary targets in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements. The foregoing and Section 9
of this Agreement shall be Executive's sole and exclusive remedy if, prior to a
Change in Control, his employment is terminated without Cause or Disability or
if he resigns as a result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any
- 4 -
<PAGE>
corporation owned, directly or indirectly, by Employer or the
stockholders of Employer in substantially the same proportions as
their ownership of stock of Employer), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Employer
representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
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<PAGE>
the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) Executive shall be entitled (in addition to all amounts
to which Executive would have been entitled had such termination
been a termination for Cause as described in Section 6(a)) to
continue to receive each month for a period of thirty-six (36)
months following the effective date of the termination,
Executive's highest monthly base salary for any time in the five
(5) years prior to such termination, plus an amount equal to one-
twelfth (1/12) of the amount of the highest annual bonus paid to
Executive at any time during the five (5) fiscal years of
Employer completed prior to his termination of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or
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<PAGE>
(ii) if Executive resigns because of material breach of the Agreement by
Employer, Executive shall be entitled to continue to receive for a period of
nine (9) months following the effective date of termination: (x) his base salary
as provided in Section 3, as the same may have been increased by Employer's
Board of Directors or Compensation Committee; (y) all benefits theretofore being
provided to him as provided in Section 5; (z) any deferred salary, bonuses and
other compensation, but subject to the terms of any applicable plan or deferral
agreement; and, within 60 days after the effective date of his termination, he
shall be paid the prorated portion (based on the portion of the fiscal year
served prior to termination) of the bonus that Executive would have earned
pursuant to Section 4 for that fiscal year, as if all the primary target in
respect of that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid. The amounts and rights to which Executive
may be entitled in respect of any outstanding restricted stock grants, stock
options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to commence receiving the payments and benefits
described in subparagraph (3) of this Section 6(d). "Good Reason" shall mean
the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
- 7 -
<PAGE>
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid
- 8 -
<PAGE>
to the Executive by Employer (or any of its subsidiaries or successors) in
fulfillment of any applicable and binding statute or regulation which legally
obligate Employer (or its subsidiary or successor) to make a severance payment
or payments to Executive as a direct result of the termination of his
employment, but not including payments received by the Executive under any
legally required social programs in which employers are required to participate
on behalf of their employees, generally, such as U.S. Social Security or state-
mandated unemployment insurance car the equivalent thereof. In addition, the
obligation to make payments and provide benefits under this Agreement shall not
be subject to any reduction or offset due to the fact that Executive may receive
or is receiving retirement payments from Employer or distributions from
Employer's retirement plan(s), its successor or any other source, nor due to the
fact that the Executive is, or during the term or effectiveness of this
Agreement may become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments and
benefits under this Section 6, the amounts payable shall be reduced by the
amounts paid to Executive by another subsequent employer in the form of salary,
bonus, or benefits with respect to services rendered during the period of the
payments to be made by Employer. Executive agrees to inform Employer in good
faith and in a timely manner of any such other compensation in order to
facilitate the offset required by this provision.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as
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<PAGE>
may be necessary so that net after tax payments to Executive equal such fees and
disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of July 7, 1992, and amended
and restated on December 31, 1996 entitled "Nondisclosure, Noncompetition and
Optional Consulting Agreement" ("1992 Agreement") which is attached to this
Agreement and which shall remain in full force and effect notwithstanding any
provision of this Agreement. In addition to the remedies provided in the 1992
Agreement and under applicable law, in the event of Executive's breach of the
1992 Agreement all compensation and benefits otherwise payable to Executive
under this Agreement shall terminate. Any amounts payable under the 1992
Agreement are in addition to any amounts payable under this Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure
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<PAGE>
to the benefit of and be binding upon Employer and its successors and assigns.
Employer shall 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 Employer to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that Employer would be
required to perform it if no such succession had taken place. This Agreement
shall inure to the benefit of and be enforceable by Executive and his personal
or legal representatives, executors, administrators, heirs, distributees,
devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Vincent C. Dowell
5991 Hopi Court
Lockport, NY 14094
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
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<PAGE>
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ Vincent C. Dowell
----------------------------------------
Vincent C. Dowell
(Executive)
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<PAGE>
EXHIBIT 10.24.5
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Nick S. Mandrycky
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of June 27, 1994 ("Prior Agreement") and
wish to enter into this Agreement to amend and restate the Prior Agreement as
herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Vice President-Sales at
--------
Employer's headquarters in Amherst, New York, or in such other, and in such
additional, senior management position or positions and/or in such other
location as Executive and Employer shall mutually agree. Executive hereby
accepts the employment specified herein and agrees, so long as he is employed
hereunder, to devote substantially his full time to the services required of him
in his employment, except for vacation time and reasonable periods of absence
due to sickness, personal injury or other disability. Executive agrees to use
his best efforts and judgment to advance the business and interests of Employer
in a manner consonant with the duties of his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $128,224
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced, however, to the extent Executive elects to defer
such salary
<PAGE>
under the terms of any deferred compensation or savings plan maintained by
Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive, in a single lump sum payment, within 60
days after the effective
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<PAGE>
date of such termination of employment (i) his base salary as provided in
Section 3, as the same may have been increased by Employer's Board of Directors
or Compensation Committee, payable through such effective date; (ii) any bonuses
earned but not yet paid for fiscal year completed prior to such effective date;
and (iii) any deferred salary, bonuses or other compensation, but subject to the
terms of any applicable plan or deferral agreement. The amounts and rights to
which Executive may be entitled in respect of any outstanding restricted stock
grants, stock options, stock appreciation rights and supplemental retirement
benefit arrangements shall be determined in accordance with the applicable plans
and/or any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all benefits theretofore being provided to him as provided in
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<PAGE>
Section 5; (iii) any deferred salary, bonuses and other compensation, but
subject to the terms of any applicable plan or deferral agreement; and, within
60 days after the effective date of his termination, he shall be paid the
prorated portion (based on the portion of the fiscal year served prior to
termination) of the bonus that Executive would have earned pursuant to Section 4
for that fiscal year, as if all the primary targets in respect of that year had
been achieved and, based thereon, the maximum discretionary bonuses had been
paid. The amounts and rights to which Executive may be entitled in respect of
any outstanding restricted stock grants, stock options, stock appreciation
rights and supplemental retirement benefit arrangements shall be determined in
accordance with the applicable plans and/or any applicable agreements. The
foregoing and Section 9 of this Agreement shall be Executive's sole and
exclusive remedy if, prior to a Change in Control, his employment is terminated
without Cause or Disability or if he resigns as a result of a material breach of
this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any corporation
owned, directly or indirectly, by
- 4 -
<PAGE>
Employer or the stockholders of Employer in substantially the
same proportions as their ownership of stock of Employer), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
Employer representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
- 5 -
<PAGE>
the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) Executive shall be entitled (in addition to all amounts
to which Executive would have been entitled had such termination
been a termination for Cause as described in Section 6(a)) to
continue to receive each month for a period of thirty-six (36)
months following the effective date of the termination,
Executive's highest monthly base salary for any time in the five
(5) years prior to such termination, plus an amount equal to one-
twelfth (1/12) of the amount of the highest annual bonus paid to
Executive at any time during the five (5) fiscal years of
Employer completed prior to his termination of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or
- 6 -
<PAGE>
(ii) if Executive resigns because of material breach of the Agreement by
Employer, Executive shall be entitled to continue to receive for a period of
nine (9) months following the effective date of termination: (x) his base salary
as provided in Section 3, as the same may have been increased by Employer's
Board of Directors or Compensation Committee; (y) all benefits theretofore being
provided to him as provided in Section 5; (z) any deferred salary, bonuses and
other compensation, but subject to the terms of any applicable plan or deferral
agreement; and, within 60 days after the effective date of his termination, he
shall be paid the prorated portion (based on the portion of the fiscal year
served prior to termination) of the bonus that Executive would have earned
pursuant to Section 4 for that fiscal year, as if all the primary target in
respect of that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid. The amounts and rights to which Executive
may be entitled in respect of any outstanding restricted stock grants, stock
options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to commence receiving the payments and benefits
described in subparagraph (3) of this Section 6(d). "Good Reason" shall mean
the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
- 7 -
<PAGE>
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid
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<PAGE>
to the Executive by Employer (or any of its subsidiaries or successors) in
fulfillment of any applicable and binding statute or regulation which legally
obligate Employer (or its subsidiary or successor) to make a severance payment
or payments to Executive as a direct result of the termination of his
employment, but not including payments received by the Executive under any
legally required social programs in which employers are required to participate
on behalf of their employees, generally, such as U.S. Social Security or state-
mandated unemployment insurance car the equivalent thereof. In addition, the
obligation to make payments and provide benefits under this Agreement shall not
be subject to any reduction or offset due to the fact that Executive may receive
or is receiving retirement payments from Employer or distributions from
Employer's retirement plan(s), its successor or any other source, nor due to the
fact that the Executive is, or during the term or effectiveness of this
Agreement may become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments and
benefits under this Section 6, the amounts payable shall be reduced by the
amounts paid to Executive by another subsequent employer in the form of salary,
bonus, or benefits with respect to services rendered during the period of the
payments to be made by Employer. Executive agrees to inform Employer in good
faith and in a timely manner of any such other compensation in order to
facilitate the offset required by this provision.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as
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<PAGE>
may be necessary so that net after tax payments to Executive equal such fees and
disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of April 24, 1990, and
amended and restated on December 31, 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1990 Agreement") which is
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1990 Agreement and under applicable law, in the event of
Executive's breach of the 1990 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1990 Agreement are in addition to any amounts payable under this
Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure
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<PAGE>
to the benefit of and be binding upon Employer and its successors and assigns.
Employer shall 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 Employer to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that Employer would be
required to perform it if no such succession had taken place. This Agreement
shall inure to the benefit of and be enforceable by Executive and his personal
or legal representatives, executors, administrators, heirs, distributees,
devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Nick S. Mandrycky
126 Brandywine Drive
Williamsville, NY 14051
If to Employer to:
International Imaging Materials, Inc.
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<PAGE>
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ Nick S. Mandrycky
----------------------------------------
Nick S. Mandrycky
(Executive)
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<PAGE>
EXHIBIT 10.24.6
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Rick W. Wallace
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of May 1, 1995 ("Prior Agreement") and
wish to enter into this Agreement to amend and restate the Prior Agreement as
herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Vice President - Marketing at
--------
Employer's headquarters in Amherst, New York, or in such other, and in such
additional, senior management position or positions and/or in such other
location as Executive and Employer shall mutually agree. Executive hereby
accepts the employment specified herein and agrees, so long as he is employed
hereunder, to devote substantially his full time to the services required of him
in his employment, except for vacation time and reasonable periods of absence
due to sickness, personal injury or other disability. Executive agrees to use
his best efforts and judgment to advance the business and interests of Employer
in a manner consonant with the duties of his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $100,293
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced, however, to the extent Executive elects to defer
such salary
<PAGE>
under the terms of any deferred compensation or savings plan maintained by
Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive, in a single lump sum payment, within 60
days after the effective
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<PAGE>
date of such termination of employment (i) his base salary as provided in
Section 3, as the same may have been increased by Employer's Board of Directors
or Compensation Committee, payable through such effective date; (ii) any bonuses
earned but not yet paid for any fiscal year completed prior to such effective
date; and (iii) any deferred salary, bonuses or other compensation, but subject
to the terms of any applicable plan or deferral agreement. The amounts and
rights to which Executive may be entitled in respect of any outstanding
restricted stock grants, stock options, stock appreciation rights and
supplemental retirement benefit arrangements shall be determined in accordance
with the applicable plans and/or any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all benefits theretofore being provided to him as provided in
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<PAGE>
Section 5; (iii) any deferred salary, bonuses and other compensation, but
subject to the terms of any applicable plan or deferral agreement; and, within
60 days after the effective date of his termination, he shall be paid the
prorated portion (based on the portion of the fiscal year served prior to
termination) of the bonus that Executive would have earned pursuant to Section 4
for that fiscal year, as if all the primary targets in respect of that year had
been achieved and, based thereon, the maximum discretionary bonuses had been
paid. The amounts and rights to which Executive may be entitled in respect of
any outstanding restricted stock grants, stock options, stock appreciation
rights and supplemental retirement benefit arrangements shall be determined in
accordance with the applicable plans and/or any applicable agreements. The
foregoing and Section 9 of this Agreement shall be Executive's sole and
exclusive remedy if, prior to a Change in Control, his employment is terminated
without Cause or Disability or if he resigns as a result of a material breach of
this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any corporation
owned, directly or indirectly, by
- 4 -
<PAGE>
Employer or the stockholders of Employer in substantially the
same proportions as their ownership of stock of Employer), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
Employer representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
- 5 -
<PAGE>
the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) Executive shall be entitled (in addition to all amounts
to which Executive would have been entitled had such termination
been a termination for Cause as described in Section 6(a)) to
continue to receive each month for a period of thirty-six (36)
months following the effective date of the termination,
Executive's highest monthly base salary for any time in the five
(5) years prior to such termination, plus an amount equal to one-
twelfth (1/12) of the amount of the highest annual bonus paid to
Executive at any time during the five (5) fiscal years of
Employer completed prior to his termination of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or
- 6 -
<PAGE>
(ii) if Executive resigns because of material breach of the Agreement by
Employer, Executive shall be entitled to continue to receive for a period of
nine (9) months following the effective date of termination: (x) his base salary
as provided in Section 3, as the same may have been increased by Employer's
Board of Directors or Compensation Committee; (y) all benefits theretofore being
provided to him as provided in Section 5; (z) any deferred salary, bonuses and
other compensation, but subject to the terms of any applicable plan or deferral
agreement; and, within 60 days after the effective date of his termination, he
shall be paid the prorated portion (based on the portion of the fiscal year
served prior to termination) of the bonus that Executive would have earned
pursuant to Section 4 for that fiscal year, as if all the primary target in
respect of that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid. The amounts and rights to which Executive
may be entitled in respect of any outstanding restricted stock grants, stock
options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to commence receiving the payments and benefits
described in subparagraph (3) of this Section 6(d). "Good Reason" shall mean
the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
- 7 -
<PAGE>
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid
- 8 -
<PAGE>
to the Executive by Employer (or any of its subsidiaries or successors) in
fulfillment of any applicable and binding statute or regulation which legally
obligate Employer (or its subsidiary or successor) to make a severance payment
or payments to Executive as a direct result of the termination of his
employment, but not including payments received by the Executive under any
legally required social programs in which employers are required to participate
on behalf of their employees, generally, such as U.S. Social Security or state-
mandated unemployment insurance car the equivalent thereof. In addition, the
obligation to make payments and provide benefits under this Agreement shall not
be subject to any reduction or offset due to the fact that Executive may receive
or is receiving retirement payments from Employer or distributions from
Employer's retirement plan(s), its successor or any other source, nor due to the
fact that the Executive is, or during the term or effectiveness of this
Agreement may become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments and
benefits under this Section 6, the amounts payable shall be reduced by the
amounts paid to Executive by another subsequent employer in the form of salary,
bonus, or benefits with respect to services rendered during the period of the
payments to be made by Employer. Executive agrees to inform Employer in good
faith and in a timely manner of any such other compensation in order to
facilitate the offset required by this provision.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as
- 9 -
<PAGE>
may be necessary so that net after tax payments to Executive equal such fees and
disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of May 10, 1993, and amended
and restated on December 31, 1996 entitled "Nondisclosure, Noncompetition and
Optional Consulting Agreement" ("1993 Agreement") which is attached to this
Agreement and which shall remain in full force and effect notwithstanding any
provision of this Agreement. In addition to the remedies provided in the 1993
Agreement and under applicable law, in the event of Executive's breach of the
1993 Agreement all compensation and benefits otherwise payable to Executive
under this Agreement shall terminate. Any amounts payable under the 1993
Agreement are in addition to any amounts payable under this Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure
- 10 -
<PAGE>
to the benefit of and be binding upon Employer and its successors and assigns.
Employer shall 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 Employer to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that Employer would be
required to perform it if no such succession had taken place. This Agreement
shall inure to the benefit of and be enforceable by Executive and his personal
or legal representatives, executors, administrators, heirs, distributees,
devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Rick W. Wallace
8313 Black Walnut Drive
East Amherst, NY 14051
If to Employer to:
International Imaging Materials, Inc.
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<PAGE>
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ Rick W. Wallace
----------------------------------------
Rick W. Wallace
(Executive)
- 12 -
<PAGE>
EXHIBIT 10.24.7
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and F. Lynn Hamb
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of April 20, 1995 ("Prior Agreement")
and wish to enter into this Agreement to amend and restate the Prior Agreement
as herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Senior Vice President-
--------
Technical Operations and Chief Technical Officer, at Employer's headquarters in
Amherst, New York, or in such other, and in such additional, senior management
position or positions and/or in such other location as Executive and Employer
shall mutually agree. Executive hereby accepts the employment specified herein
and agrees, so long as he is employed hereunder, to devote substantially his
full time to the services required of him in his employment, except for vacation
time and reasonable periods of absence due to sickness, personal injury or other
disability. Executive agrees to use his best efforts and judgment to advance
the business and interests of Employer in a manner consonant with the duties of
his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $147,000
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
<PAGE>
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive, in a single lump sum payment, within 60
days after the effective
- 2 -
<PAGE>
date of such termination of employment (i) his base salary as provided in
Section 3, as the same may have been increased by Employer's Board of Directors
or Compensation Committee, payable through such effective date; (ii) any bonuses
earned but not yet paid for any fiscal year completed prior to such effective
date; and (iii) any deferred salary, bonuses or other compensation, but subject
to the terms of any applicable plan or deferral agreement. The amounts and
rights to which Executive may be entitled in respect of any outstanding
restricted stock grants, stock options, stock appreciation rights and
supplemental retirement benefit arrangements shall be determined in accordance
with the applicable plans and/or any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all benefits theretofore being provided to him as provided in Section 5; (iii)
any deferred salary, bonuses and other
- 3 -
<PAGE>
compensation, but subject to the terms of any applicable plan or deferral
agreement; and, within 60 days after the effective date of his termination, he
shall be paid the prorated portion (based on the portion of the fiscal year
served prior to termination) of the bonus that Executive would have earned
pursuant to Section 4 for that fiscal year, as if all the primary targets in
respect of that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid. The amounts and rights to which Executive
may be entitled in respect of any outstanding restricted stock grants, stock
options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements. The foregoing and Section 9 of this Agreement shall
be Executive's sole and exclusive remedy if, prior to a Change in Control, his
employment is terminated without Cause or Disability or if he resigns as a
result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any corporation
owned, directly or indirectly, by Employer or the stockholders of
Employer in substantially the same proportions as their
- 4 -
<PAGE>
ownership of stock of Employer), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Employer representing
35% or more of the combined voting power of Employer's then
outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive the compensation
described in the applicable paragraph of this Section 6 (as indicated in the
parentheses).
- 5 -
<PAGE>
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) Executive shall be entitled (in addition to all amounts
to which Executive would have been entitled had such termination
been a termination for Cause as described in Section 6(a)) to
continue to receive each month for a period of thirty-six (36)
months following the effective date of the termination,
Executive's highest monthly base salary for any time in the five
(5) years prior to such termination, plus an amount equal to one-
twelfth (1/12) of the amount of the highest annual bonus paid to
Executive at any time during the five (5) fiscal years of
Employer completed prior to his termination of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or (ii) if Executive resigns because of material breach of the
Agreement by Employer, Executive shall be entitled to continue to receive for a
period of nine (9) months following the effective date of termination: (x) his
base salary as provided in Section
- 6 -
<PAGE>
3, as the same may have been increased by Employer's Board of Directors or
Compensation Committee; (y) all benefits theretofore being provided to him as
provided in Section 5; (z) any deferred salary, bonuses and other compensation,
but subject to the terms of any applicable plan or deferral agreement; and,
within 60 days after the effective date of his termination, he shall be paid the
prorated portion (based on the portion of the fiscal year served prior to
termination) of the bonus that Executive would have earned pursuant to Section 4
for that fiscal year, as if all the primary target in respect of that year had
been achieved and, based thereon, the maximum discretionary bonuses had been
paid. The amounts and rights to which Executive may be entitled in respect of
any outstanding restricted stock grants, stock options, stock appreciation
rights and supplemental retirement benefit arrangements shall be determined in
accordance with the applicable plans and/or any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to commence receiving the payments and benefits
described in subparagraph (3) of this Section 6(d). "Good Reason" shall mean
the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit
- 7 -
<PAGE>
plan or arrangement in which Executive participates immediately
prior to the Change in Control of Employer unless an equitable
and substantially comparable arrangement (embodied in a
substitute or alternative plan) has been made with respect to
such plan or arrangement, or the failure by Employer to continue
Executive's participation therein (or in such substitute or
alternative plan or arrangement) on a basis not less favorable,
both in terms of the amount of benefit provided and the level of
participation relative to other participants, as existed at the
time of the Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid to the Executive by
Employer (or any of its subsidiaries or successors) in fulfillment of any
applicable and binding statute or regulation which legally obligate Employer (or
its subsidiary or successor) to make a severance payment or payments to
Executive as a direct result of the termination of his employment, but not
including payments received by the Executive
- 8 -
<PAGE>
under any legally required social programs in which employers are required to
participate on behalf of their employees, generally, such as U.S. Social
Security or state-mandated unemployment insurance car the equivalent thereof. In
addition, the obligation to make payments and provide benefits under this
Agreement shall not be subject to any reduction or offset due to the fact that
Executive may receive or is receiving retirement payments from Employer or
distributions from Employer's retirement plan(s), its successor or any other
source, nor due to the fact that the Executive is, or during the term or
effectiveness of this Agreement may become, at or beyond any unusual or normal
retirement age.
(g) In the event that Executive becomes entitled to payments and
benefits under this Section 6, the amounts payable shall be reduced by the
amounts paid to Executive by another subsequent employer in the form of salary,
bonus, or benefits with respect to services rendered during the period of the
payments to be made by Employer. Executive agrees to inform Employer in good
faith and in a timely manner of any such other compensation in order to
facilitate the offset required by this provision.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of April 20, 1995, and
amended and restated on December 31 , 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1995 Agreement") which is
- 9 -
<PAGE>
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1995 Agreement and under applicable law, in the event of
Executive's breach of the 1995 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1995 Agreement are in addition to any amounts payable under this
Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall 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 Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and his personal or legal
- 10 -
<PAGE>
representatives, executors, administrators, heirs, distributees, devisees and
legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
F. Lynn Hamb
59 Hampton Hill Drive
Amherst, NY 14221
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except
- 11 -
<PAGE>
that notices regarding changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ F. Lynn Hamb
----------------------------------------
F. Lynn Hamb
(Executive)
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<PAGE>
EXHIBIT 10.24.8
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and David B. Lupp
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain his services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of July 10, 1995 ("Prior Agreement") and
wish to enter into this Agreement to amend and restate the Prior Agreement as
herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Vice President, Controller,
--------
Assistant Secretary and Assistant Treasurer, at Employer's headquarters in
Amherst, New York, or in such other, and in such additional, senior management
position or positions and/or in such other location as Executive and Employer
shall mutually agree. Executive hereby accepts the employment specified herein
and agrees, so long as he is employed hereunder, to devote substantially his
full time to the services required of him in his employment, except for vacation
time and reasonable periods of absence due to sickness, personal injury or other
disability. Executive agrees to use his best efforts and judgment to advance
the business and interests of Employer in a manner consonant with the duties of
his position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $96,924
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
<PAGE>
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for his reasonable expenses
incurred in the performance of his duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of his employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform his duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive, in a single lump sum payment, within 60
days after the effective date of such termination of employment (i) his base
salary as
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<PAGE>
provided in Section 3, as the same may have been increased by Employer's Board
of Directors or Compensation Committee, payable through such effective date;
(ii) any bonuses earned but not yet paid for any fiscal year completed prior to
such effective date; and (iii) any deferred salary, bonuses or other
compensation, but subject to the terms of any applicable plan or deferral
agreement. The amounts and rights to which Executive may be entitled in respect
of any outstanding restricted stock grants, stock options, stock appreciation
rights and supplemental retirement benefit arrangements shall be determined in
accordance with the applicable plans and/or any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) his base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all benefits theretofore being provided to him as provided in Section 5; (iii)
any deferred salary, bonuses and other compensation, but subject to the terms of
any applicable plan or deferral agreement; and, within 60 days after the
effective date
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<PAGE>
of his termination, he shall be paid the prorated portion (based on the portion
of the fiscal year served prior to termination) of the bonus that Executive
would have earned pursuant to Section 4 for that fiscal year, as if all the
primary targets in respect of that year had been achieved and, based thereon,
the maximum discretionary bonuses had been paid. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements. The foregoing and Section 9 of this Agreement shall
be Executive's sole and exclusive remedy if, prior to a Change in Control, his
employment is terminated without Cause or Disability or if he resigns as a
result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates his employment on his own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which he would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during his employment hereunder, his
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had his
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any corporation
owned, directly or indirectly, by Employer or the stockholders of
Employer in substantially the same proportions as their ownership
of stock of Employer), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of
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<PAGE>
securities of Employer representing 35% or more of the combined
voting power of Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive the compensation
described in the applicable paragraph of this Section 6 (as indicated in the
parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
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<PAGE>
(i) Executive shall be entitled (in addition to all amounts
to which Executive would have been entitled had such termination
been a termination for Cause as described in Section 6(a)) to
continue to receive each month for a period of thirty-six (36)
months following the effective date of the termination,
Executive's highest monthly base salary for any time in the five
(5) years prior to such termination, plus an amount equal to one-
twelfth (1/12) of the amount of the highest annual bonus paid to
Executive at any time during the five (5) fiscal years of
Employer completed prior to his termination of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or (ii) if Executive resigns because of material breach of the
Agreement by Employer, Executive shall be entitled to continue to receive for a
period of nine (9) months following the effective date of termination: (x) his
base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee; (y) all benefits
theretofore being provided to him as provided in Section 5; (z) any deferred
salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days
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<PAGE>
after the effective date of his termination, he shall be paid the prorated
portion (based on the portion of the fiscal year served prior to termination) of
the bonus that Executive would have earned pursuant to Section 4 for that fiscal
year, as if all the primary target in respect of that year had been achieved
and, based thereon, the maximum discretionary bonuses had been paid. The amounts
and rights to which Executive may be entitled in respect of any outstanding
restricted stock grants, stock options, stock appreciation rights and
supplemental retirement benefit arrangements shall be determined in accordance
with the applicable plans and/or any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to commence receiving the payments and benefits
described in subparagraph (3) of this Section 6(d). "Good Reason" shall mean
the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of his employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the
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<PAGE>
failure by Employer to continue Executive's participation therein
(or in such substitute or alternative plan or arrangement) on a
basis not less favorable, both in terms of the amount of benefit
provided and the level of participation relative to other
participants, as existed at the time of the Change in Control of
Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid to the Executive by
Employer (or any of its subsidiaries or successors) in fulfillment of any
applicable and binding statute or regulation which legally obligate Employer (or
its subsidiary or successor) to make a severance payment or payments to
Executive as a direct result of the termination of his employment, but not
including payments received by the Executive under any legally required social
programs in which employers are required to participate on behalf of their
employees, generally, such as U.S. Social Security or state-mandated
unemployment insurance car the equivalent thereof. In addition, the obligation
to make payments and provide benefits under this Agreement shall not be subject
to any reduction or offset due to the fact that Executive may receive or is
receiving retirement
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<PAGE>
payments from Employer or distributions from Employer's retirement plan(s), its
successor or any other source, nor due to the fact that the Executive is, or
during the term or effectiveness of this Agreement may become, at or beyond any
unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments and
benefits under this Section 6, the amounts payable shall be reduced by the
amounts paid to Executive by another subsequent employer in the form of salary,
bonus, or benefits with respect to services rendered during the period of the
payments to be made by Employer. Executive agrees to inform Employer in good
faith and in a timely manner of any such other compensation in order to
facilitate the offset required by this provision.
7. Funding. Employer may in its discretion establish a trust or
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other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of July 10, 1995, and
amended and restated on December 31, 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1995 Agreement") which is
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1995 Agreement and under applicable law, in the event of
Executive's breach of the 1995 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1995 Agreement are in addition to any amounts payable under this
Agreement.
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<PAGE>
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall 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 Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and his personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
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<PAGE>
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
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this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
David B. Lupp
159 Plantation Court
East Amherst, NY 14051
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
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<PAGE>
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ David B. Lupp
----------------------------------------
David B. Lupp
(Executive)
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<PAGE>
EXHIBIT 10.24.9
AMENDED AND RESTATED
IIMAK
EXECUTIVE
CONTINUITY AGREEMENT
This AGREEMENT, dated as of December 31, 1996 by and between
INTERNATIONAL IMAGING MATERIALS, INC. ("Employer") and Susan R. Stamp
("Executive") sets forth the terms and conditions of Executive's employment.
Executive has contributed substantially to the success of Employer and
Employer desires to retain her services as set forth in this Agreement and to
provide sufficient compensation and benefits to assure the continuance of such
services. Employer and Executive have previously entered into an IIMAK
Executive Continuity Agreement dated as of March 27, 1996 ("Prior Agreement")
and wish to enter into this Agreement to amend and restate the Prior Agreement
as herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive's employment with Employer will
------------------
continue until terminated as hereinafter provided.
2. Position. Executive shall serve as Vice President - Human
--------
Resources at Employer's headquarters in Amherst, New York, or in such other, and
in such additional, senior management position or positions and/or in such other
location as Executive and Employer shall mutually agree. Executive hereby
accepts the employment specified herein and agrees, so long as she is employed
hereunder, to devote substantially her full time to the services required of her
in her employment, except for vacation time and reasonable periods of absence
due to sickness, personal injury or other disability. Executive agrees to use
her best efforts and judgment to advance the business and interests of Employer
in a manner consonant with the duties of her position.
3. Base Salary. So long as Executive is employed by Employer,
-----------
Employer shall pay Executive an annual base salary of not less than $85,000
during each fiscal year of Employer. Executive's annual base salary shall be
subject to increase at the discretion of the Compensation Committee of the Board
of Directors of Employer. Such salary shall be payable in equal monthly
installments or in such other number of installments as shall be agreed upon
between Employer and Executive. The annual base salary actually paid under this
Section may only be reduced,
<PAGE>
however, to the extent Executive elects to defer such salary under the terms of
any deferred compensation or savings plan maintained by Employer.
4. Bonuses. So long as Executive is employed by Employer, Employer
-------
shall pay Executive such bonuses pursuant to such plans or arrangements as may
be in effect from time to time, as determined pursuant to such plans or
arrangements approved by Employer's Board of Directors or the Compensation
Committee thereof.
5. Employee Benefits: Business Expenses and Perquisites. So long as
----------------------------------------------------
Executive is employed by Employer, (i) Executive shall be provided employee
benefits including retirement and dental coverage, and life, health and long
term disability insurances under Employer's plans, policies and programs as may
be available to similarly situated officers in accordance with the provisions of
such plans, policies and programs, provided that such benefits are no less
favorable than those Executive is receiving from Employer on the date of this
Agreement; (ii) Executive shall be reimbursed for her reasonable expenses
incurred in the performance of her duties hereunder upon presentation of proper
documentation; and (iii) Employer shall provide Executive with such other
benefits, facilities, services and perquisites, including, but not limited to,
vacation and holidays, use of an automobile, cell phone and computer, income tax
preparation services and loans no less favorable than those Executive is
receiving from Employer on the date of this Agreement.
6. Termination of Employment.
-------------------------
(a) Termination by Employer for Cause or Disability.
-----------------------------------------------
(1) Executive may be terminated for Cause by Employer at any time.
Cause shall mean (i) Executive is convicted of a felony, or (ii) Executive, in
carrying out the duties of her employment, has been guilty of unreasonable (and
persistent) neglect or refusal to perform her duties hereunder, or (iii) any
material misappropriation of funds or property by Executive. If Employer
determines Executive's breach or neglect of duties that may give rise to
termination of Employment for Cause can be remedied by Executive within a
reasonable time (not to exceed 30 days), Employer shall give Executive written
notice of such breach or neglect and an opportunity to remedy the same within a
reasonable time (not to exceed 30 days). In the event of termination for Cause,
Executive shall be entitled to receive,
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<PAGE>
in a single lump sum payment, within 60 days after the effective date of such
termination of employment (i) her base salary as provided in Section 3, as the
same may have been increased by Employer's Board of Directors or Compensation
Committee, payable through such effective date; (ii) any bonuses earned but not
yet paid for any fiscal year completed prior to such effective date; and (iii)
any deferred salary, bonuses or other compensation, but subject to the terms of
any applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(2) Executive may be terminated for Disability by Employer after
Executive has received at least nine (9) consecutive months of benefits under
Employer's long term disability insurance. Disability shall mean that Executive
is disabled as defined in Employer's long term disability insurance covering
Executive. In the event of a Disability, Executive shall continue to receive
his base salary as provided in Section 3, as the same may have been increased by
Employer's Board of Directors or Compensation Committee, until such time that
benefits become payable under the Employer-provided long term disability
insurance covering Executive. In addition, Executive shall be entitled to
receive, in a single lump sum payment, within sixty (60) days after the
effective date of termination of employment (i) any bonuses earned but not yet
paid for fiscal years completed prior to such effective date; and (ii) any
deferred salary, bonuses or other compensation, but subject to the terms of any
applicable plan or deferral agreement. The amounts and rights to which
Executive may be entitled in respect of any outstanding restricted stock grants,
stock options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with applicable plans and/or any
applicable agreements.
(b) Termination Without Cause or Disability. Employer may terminate
---------------------------------------
Executive's employment without Cause or Disability at any time. Prior to a
Change in Control, in the event Employer terminates Executive's employment for
other than Cause or Disability, or if Executive resigns because of a material
breach of this Agreement by Employer, Executive shall be entitled to continue to
receive for a period of nine (9) months following the effective date of the
termination: (i) her base salary as provided in Section 3, as the same may have
been increased by Employer's Board of Directors or Compensation Committee; (ii)
all
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<PAGE>
benefits theretofore being provided to her as provided in Section 5; (iii) any
deferred salary, bonuses and other compensation, but subject to the terms of any
applicable plan or deferral agreement; and, within 60 days after the effective
date of her termination, she shall be paid the prorated portion (based on the
portion of the fiscal year served prior to termination) of the bonus that
Executive would have earned pursuant to Section 4 for that fiscal year, as if
all the primary targets in respect of that year had been achieved and, based
thereon, the maximum discretionary bonuses had been paid. The amounts and rights
to which Executive may be entitled in respect of any outstanding restricted
stock grants, stock options, stock appreciation rights and supplemental
retirement benefit arrangements shall be determined in accordance with the
applicable plans and/or any applicable agreements. The foregoing and Section 9
of this Agreement shall be Executive's sole and exclusive remedy if, prior to a
Change in Control, her employment is terminated without Cause or Disability or
if she resigns as a result of a material breach of this Agreement by Employer.
(c) Voluntary Termination; Death.
----------------------------
(1) In the event Executive terminates her employment on her own
initiative (for other than material breach of this Agreement by Employer or for
Good Reason following a Change in Control (as hereinafter defined)), such
termination shall not be deemed to be a breach of this Agreement and shall
entitle Executive only to all rights and benefits to which she would have been
entitled had such termination been a termination for Cause as described in
paragraph (a) of this Section 6.
(2) In the event Executive dies during her employment hereunder, her
employment shall terminate and Executive's estate shall be entitled to receive
all rights and benefits to which Executive would have been entitled had her
employment been terminated as described in Paragraph (c)(1) of this Section 6.
(d) Termination Following Change in Control.
---------------------------------------
(1) A "Change in Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than (a) Employer or (b) any
- 4 -
<PAGE>
corporation owned, directly or indirectly, by Employer or the
stockholders of Employer in substantially the same proportions as
their ownership of stock of Employer), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Employer
representing 35% or more of the combined voting power of
Employer's then outstanding securities;
(ii) during any period of two consecutive years, there is
elected 35% or more of the members of the Board of Directors of
Employer without the approval or the nomination of such members
by a majority of that portion of the Board consisting of members
who were serving at the beginning of the two-year period;
(iii) the stockholders of Employer approve a merger or
consolidation of Employer with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of Employer outstanding immediately prior thereto
continuing to represent more than 51% of the combined voting
power of the voting securities of Employer, or such surviving
entity, outstanding immediately after such merger or
consolidation; or (b) a merger or consolidation effected to
implement a recapitalization of Employer (or similar transaction)
in which no "person" (as defined above) acquires more than 35% of
then-outstanding securities; or
(iv) the stockholders of Employer approve an agreement for
the sale or disposition by Employer of all or substantially all
of Employer's assets.
(v) any other action occurs which the Board of Directors, in
its sole discretion, elects to treat as a Change in Control for
purposes of this Agreement.
(2) In the event Executive's employment is terminated after a Change
in Control by Employer for Cause or Disability (Section 6(a)) or by Executive
for other than Good Reason (Section 6(c)(1)) or as a result of Executive's death
(Section 6(c)(2)), then Executive shall be entitled to receive
- 5 -
<PAGE>
the compensation described in the applicable paragraph of this Section 6 (as
indicated in the parentheses).
(3) If Executive's employment is terminated by Employer within thirty-
six (36) months following a Change in Control for a reason other than Cause or
Disability, then:
(i) Executive shall be entitled (in addition to all amounts
to which Executive would have been entitled had such termination
been a termination for Cause as described in Section 6(a)) to
continue to receive each month for a period of thirty-six months
following the effective date of the termination, Executive's
highest monthly base salary for any time in the five (5) years
prior to such termination, plus an amount equal to one twelfth
(1/12) of the amount of the highest annual bonus paid to
Executive at any time during the five (5) fiscal years of
Employer completed prior to her termination of employment.
and
(ii) Executive shall receive for a period of thirty-six (36)
months following such termination, the benefits provided in
Section 5 hereof. At the end of such thirty-six (36) month
period, Executive shall have the option to purchase the personal
computer and car provided by Employer at its net tax book value.
In the event that any such benefit can not be provided to
Executive for any reason, Employer will provide Executive with an
economically equivalent alternate benefit. After Executive's
health benefits terminate, Executive will then be entitled to
full rights under Title X of the Consolidated Omnibus
Reconciliation Act of 1985, as amended. In addition, for a
period of six (6) months after such termination, Employer will
provide Executive with out placement services of a type
appropriate for Executive's position at a cost not to exceed
fifteen (15%) percent of the Executive's annual base salary at
the time of termination.
(4) If Executive's employment is terminated by Employer after thirty-
six (36) months following a Change in Control: (i) for a reason other than Cause
or Disability, or
- 6 -
<PAGE>
(ii) if Executive resigns because of material breach of the Agreement by
Employer, Executive shall be entitled to continue to receive for a period of
nine (9) months following the effective date of termination: (x) her base salary
as provided in Section 3, as the same may have been increased by Employer's
Board of Directors or Compensation Committee; (y) all benefits theretofore being
provided to her as provided in Section 5; (z) any deferred salary, bonuses and
other compensation, but subject to the terms of any applicable plan or deferral
agreement; and, within 60 days after the effective date of her termination, she
shall be paid the prorated portion (based on the portion of the fiscal year
served prior to termination) of the bonus that Executive would have earned
pursuant to Section 4 for that fiscal year, as if all the primary target in
respect of that year had been achieved and, based thereon, the maximum
discretionary bonuses had been paid. The amounts and rights to which Executive
may be entitled in respect of any outstanding restricted stock grants, stock
options, stock appreciation rights and supplemental retirement benefit
arrangements shall be determined in accordance with the applicable plans and/or
any applicable agreements.
(5) If Executive's employment is terminated by Executive within
thirty-six (36) months following a Change in Control for Good Reason (as herein
defined), then within five (5) business days following such termination
Executive shall be entitled to commence receiving the payments and benefits
described in subparagraph (3) of this Section 6(d). "Good Reason" shall mean
the occurrence of any of the following circumstances:
(i) the assignment to Executive of any duties inconsistent
with the position that Executive held immediately prior to the
Change in Control of Employer, or significant adverse alteration
in the nature or status of Executive's responsibilities or the
conditions of her employment from those in effect immediately
prior to such Change in Control;
(ii) the relocation of Employer's office at which Executive
is employed to a location more than 35 miles from Employer's
office immediately prior to the Change in Control, or Employer's
requiring Executive to be based anywhere other than Employer's
offices at such location except for required travel on Employer's
business to an extent substantially consistent with Executive's
- 7 -
<PAGE>
business travel obligations at the time of the Change in Control;
(iii) the failure by Employer to continue in effect any
material compensation or other benefit plan or arrangement in
which Executive participates immediately prior to the Change in
Control of Employer unless an equitable and substantially
comparable arrangement (embodied in a substitute or alternative
plan) has been made with respect to such plan or arrangement, or
the failure by Employer to continue Executive's participation
therein (or in such substitute or alternative plan or
arrangement) on a basis not less favorable, both in terms of the
amount of benefit provided and the level of participation
relative to other participants, as existed at the time of the
Change in Control of Employer;
(iv) the failure by Employer to continue to provide
Executive with benefits substantially similar to those provided
pursuant to Section 5 hereof at the time of the Change in Control
of Employer or the taking of any action by Employer which would
directly or indirectly materially reduce any of such benefits; or
(v) any breach of this Agreement by Employer.
(e) Excise Tax. It is possible that the payments specified in this
----------
Agreement and in other agreements may be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), as
amended (or any similar tax that may hereinafter be imposed) because of "excess
parachute payments," as defined in Section 280G of the Code. Executive and
Employer agree that the amount payable pursuant to this Agreement and other
agreements shall be reduced by such amount as shall be necessary to avoid the
imposition of the Excise Tax.
(f) Neither Employer's, nor its successors', obligation to make
payments and to provide benefits set forth in this Agreement shall be subject to
any set-off, defense, or counterclaim except for (i) any unpaid indebtedness of
the Executive to Employer arising from expense advance or from loans reflected
by promissory notes, and (ii) any amounts owed and paid
- 8 -
<PAGE>
to the Executive by Employer (or any of its subsidiaries or successors) in
fulfillment of any applicable and binding statute or regulation which legally
obligate Employer (or its subsidiary or successor) to make a severance payment
or payments to Executive as a direct result of the termination of her
employment, but not including payments received by the Executive under any
legally required social programs in which employers are required to participate
on behalf of their employees, generally, such as U.S. Social Security or state-
mandated unemployment insurance car the equivalent thereof. In addition, the
obligation to make payments and provide benefits under this Agreement shall not
be subject to any reduction or offset due to the fact that Executive may receive
or is receiving retirement payments from Employer or distributions from
Employer's retirement plan(s), its successor or any other source, nor due to the
fact that the Executive is, or during the term or effectiveness of this
Agreement may become, at or beyond any unusual or normal retirement age.
(g) In the event that Executive becomes entitled to payments under
this Section 6, the amounts payable shall be reduced by the amounts paid to
Executive by another subsequent employer in the form of salary, bonus, or
benefits with respect to services rendered during the period of the payments to
be made by Employer. Executive agrees to inform Employer in good faith and in a
timely manner of any such other compensation in order to facilitate the offset
required by this provision.
7. Funding. Employer may in its discretion establish a trust or
-------
other fund to finance any or all of the payments which are or may become payable
to Executive under this Agreement. Employer shall construct the fund such that
amounts placed in the fund remain nontaxable to Executive until such time as the
payments are made to the Executive.
8. Legal Expense. If, with respect to any alleged failure by
-------------
Employer to comply subsequent to a Change in Control with any of the terms of
this Agreement and regardless of whether Executive is successful, Executive
hires legal counsel with respect to this Agreement or institutes any negotiation
or institutes or responds to legal action to assert or defend the validity of,
enforce her rights under, or recover damages for breach of this Agreement,
Employer shall pay, as they are incurred, Executive's actual expenses for
attorneys' fees and disbursements, together with such additional payments, if
any, as may be necessary so that net after tax payments to Executive equal such
fees and disbursements.
- 9 -
<PAGE>
9. Nondisclosure, Noncompetition and Optional Consulting Agreement.
---------------------------------------------------------------
Executive and Employer entered into an agreement as of June 14, 1993, and
amended and restated on December 31, 1996 entitled "Nondisclosure,
Noncompetition and Optional Consulting Agreement" ("1993 Agreement") which is
attached to this Agreement and which shall remain in full force and effect
notwithstanding any provision of this Agreement. In addition to the remedies
provided in the 1993 Agreement and under applicable law, in the event of
Executive's breach of the 1993 Agreement all compensation and benefits otherwise
payable to Executive under this Agreement shall terminate. Any amounts payable
under the 1993 Agreement are in addition to any amounts payable under this
Agreement.
10. Code of Ethics. Executive shall comply with all of the terms and
--------------
provisions of any code of ethics at any time or from time-to-time instituted by
Employer.
11. Interest. In the event of any delay in payment of the amounts
--------
due Executive, Employer or its successor shall pay interest on the amounts
delayed at the prime rate (as reported in the Wall Street Journal during the
relevant period) plus one percent.
12. Arbitration. Except as provided in subparagraph (2) of Section
-----------
6(a), any and all disputes or controversies concerning this Agreement shall be
determined by arbitration in Buffalo, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrators
shall be authorized to decree and award any and all relief of a legal or
equitable nature including, but not limited to, relief in the nature of a
temporary restraining order, a temporary or permanent injunction, and money
damages, with or without an accounting and costs.
13. Miscellaneous.
-------------
(a) Amendments. This Agreement may not be altered, modified or
----------
amended except by a written instrument signed by each of the parties hereto.
(b) Successors. As used in this Agreement, the term Employer shall
----------
include any successors to all or part of the business and/or assets of Employer.
This Agreement shall inure to the benefit of and be binding upon Employer and
its successors and assigns. Employer shall require any successor (whether
- 10 -
<PAGE>
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be enforceable by
Executive and her personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
(c) Assignment. Except as provided under Paragraph (b) of this
----------
Section 13, neither this Agreement nor any of the rights or obligations
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party.
(d) Waiver. Waiver by any party hereto of any breach or default by
------
the other party of any terms of this Agreement shall not operate as a waiver of
any other breach or default, whether similar to or different from the breach or
default waived.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Counterparts. This Agreement may be executed in counterparts,
------------
each shall be deemed an original but all of which together shall constitute one
and the same instrument.
(g) Notices. Notices and all other communications provided for in
-------
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to Executive to:
Susan R. Stamp
6400 Thistle Court
East Amherst, NY 14051
If to Employer to:
International Imaging Materials, Inc.
310 Commerce Drive
Amherst, New York 14228-2396
- 11 -
<PAGE>
Attention: President
or to such other address or such other person as Executive or Employer shall
designate in writing in accordance herewith except that notices regarding
changes in notices shall be effective only upon receipt.
(h) Headings. Headings to sections and paragraphs in this Agreement
--------
are for the convenience of the parties only and are not intended to be part of
or to affect the meaning or interpretation of, this Agreement.
(i) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of New York without reference to principles of conflict of laws.
(j) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between Employer and Executive regarding the subject matter hereof and
supersedes all prior agreements relating thereto.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and Executive has hereunto set his hand hereto on the date first above written.
International Imaging Materials, Inc.
(Employer)
By: /s/ John W. O'Leary
-------------------------------------
John W. O'Leary
Its: President & Chief Executive Officer
/s/ Susan R. Stamp
----------------------------------------
Susan R. Stamp
(Executive)
- 12 -
<PAGE>
EXHIBIT 11.
CALCULATION OF NET INCOME PER SHARE OF COMMON STOCK
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
DECEMBER 31, JANUARY 2,
1996 1996
-------------- ------------
(UNAUDITED)
<S> <C> <C>
NET INCOME $3,040 $2,865
-------------- ------------
WEIGHTED AVERAGE COMMON SHARES 8,597 8,827
OUTSTANDING
COMMON STOCK EQUIVALENTS FOR RESTRICTED
STOCK, STOCK OPTIONS AND WARRANTS 428 536
-------------- ------------
WEIGHTED AVERAGE COMMON SHARES 9,025 9,363
OUTSTANDING AS ADJUSTED -------------- ------------
NET INCOME PER SHARE OF COMMON $ .34 $ .31
STOCK
============== ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 913
<SECURITIES> 0
<RECEIVABLES> 17,436
<ALLOWANCES> 0
<INVENTORY> 15,456
<CURRENT-ASSETS> 36,059
<PP&E> 103,669
<DEPRECIATION> 26,579
<TOTAL-ASSETS> 117,642
<CURRENT-LIABILITIES> 21,436
<BONDS> 1,294
0
0
<COMMON> 87
<OTHER-SE> 86,893
<TOTAL-LIABILITY-AND-EQUITY> 117,642
<SALES> 79,584
<TOTAL-REVENUES> 79,584
<CGS> 55,991
<TOTAL-COSTS> 55,991
<OTHER-EXPENSES> 9,688
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 457
<INCOME-PRETAX> 13,448
<INCOME-TAX> 4,707
<INCOME-CONTINUING> 8,741
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,741
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
