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10-Q - FORM 10-Q - CSS INDUSTRIES INC | c07830e10vq.htm |
EX-32.1 - EXHIBIT 32.1 - CSS INDUSTRIES INC | c07830exv32w1.htm |
EX-32.2 - EXHIBIT 32.2 - CSS INDUSTRIES INC | c07830exv32w2.htm |
EX-10.3 - EXHIBIT 10.3 - CSS INDUSTRIES INC | c07830exv10w3.htm |
EX-31.1 - EXHIBIT 31.1 - CSS INDUSTRIES INC | c07830exv31w1.htm |
EX-31.2 - EXHIBIT 31.2 - CSS INDUSTRIES INC | c07830exv31w2.htm |
Exhibit 10.2
July 26, 2010
Personal and Confidential
Ms. Laurie F. Gilner
1548 Highland Valley Circle
Chesterfield, MO 63005
1548 Highland Valley Circle
Chesterfield, MO 63005
Dear Laurie:
Subject to and conditioned upon approval by the Human Resources Committee (the Committee) of
the Board of Directors of CSS Industries, Inc. (CSS), we are pleased to extend an offer of
employment to you as President of C.R. Gibson, LLC (CRG). You acknowledge and agree that there
are no other valid oral or written agreements relating to the terms and conditions of your
employment with CRG as its President. You further represent and covenant to CRG that you are not
subject or a party to any employment agreement, non-competition covenant, understanding or
restriction which would prohibit or restrict you from executing this letter and performing all
duties and responsibilities incidental to the position of President of CRG. In serving as
President of CRG, we understand and expect that you will not disclose or use any proprietary or
confidential information, data, developments or trade secrets belonging to your former employers or
any of their respective subsidiary or affiliated companies, and you agree not to disclose or use
any such proprietary or confidential information, data, developments or trade secrets.
1. Contract Term The term of your employment will be three (3) years, commencing
September 7, 2010 and ending September 6, 2013, unless terminated earlier by you or by CRG at any
time as provided herein. Thereafter, your employment status with CRG will continue to be that of
an employee at-will, subject to termination by either you or CRG at any time.
2. Compensation
Subject to and conditioned upon approval by the Committee, the
compensation package for this position will be as follows:
A. Base Salary A base salary in the gross amount of Three Hundred Twenty-Five
Thousand Dollars ($325,000) per annum payable at such times as CRG pays its executives. There will
be an annual performance review, and you will then be considered for an increase in base salary,
commencing April 1, 2011, consistent with the then current CRG policy.
B. Incentive Compensation For CRGs current fiscal year ending March 31, 2011, you
will be eligible to participate in the FY2011 Management Incentive Program (MIP). For purposes
of calculating your potential 2011 fiscal year incentive compensation, and depending on the extent
of achievement of certain CRG and CSS objectives, you will have the potential of earning incentive
compensation based upon 80% of your base salary specified in
Section 2.A. above. The amount of your 2011 fiscal year bonus opportunity will be guaranteed at a
minimum of Fifty Thousand Dollars ($50,000), and will not be prorated based upon your start date.
402 BNA Dr. Building 100, Suite 600, Nashville, TN 37217 / 615-724-2800
Ms. Laurie F. Gilner
July 26, 2010
Page 2
July 26, 2010
Page 2
For CRGs subsequent fiscal years, depending on the extent of achievement of certain CRG and
CSS objectives, you will have the potential of earning for a full fiscal year period incentive
compensation with a target opportunity of up to 80% of your then base salary.
C. Equity Grants We will recommend that you be granted a stock option to acquire
7,500 shares of CSS common stock (which option will have a term of seven (7) years and will vest as
to 25% of the underlying shares on each of the first four (4) anniversaries of the grant) and a
stock bonus award of 7,500 time-vested restricted stock units of CSS common stock (3,750 of which
will vest on the third anniversary of the grant and 3,750 of which will vest on the fourth
anniversary of the grant), which recommendation will be provided to the Committee for consideration
at the next available date upon which the Committee considers equity grant recommendations after
the date upon which you commence employment with CRG. These grants will in all respects be subject
to and in accordance with the provisions of the CSS 2004 Equity Compensation Plan, and the terms of
the grant letters to be provided to you at the time of the grants. Thereafter, you will be
considered for annual equity grant recommendations at such times as the Committee considers annual
equity grant recommendations for CRGs officer level personnel.
D. Motor Vehicle Allowance You will receive an allowance of One Thousand Dollars
($1,000) per month for the cost of your use of a motor vehicle.
E. Vacation
You will be eligible to accrue four (4) weeks vacation each calendar
year, in accordance with the applicable terms of CRGs then current vacation policy.
3. Benefits Coverage; Relocation You will be entitled to participate in those CRG
benefit programs available to its officer level personnel in accordance with the applicable terms
of these programs.
You agree that, as a part of our extension and your acceptance of an offer of employment to
you hereunder, you will relocate your primary residence from 1548 Highland Valley Circle,
Chesterfield, Missouri (the Current Primary Residence) to the Nashville, Tennessee area by no
later than December 31, 2010. Subject to your commencement of employment with CRG, you will be
eligible to be reimbursed for expenses incurred on or after the date hereof associated with the
relocation of your primary residence to the Nashville, Tennessee area in accordance with the
applicable terms of the CSS relocation policy, up to a maximum aggregate amount of $120,000 (which
amount shall include all amounts, if any, determined by CSS, at its sole discretion, intended to be
a gross up for certain federal, state and local taxes to which you may be subject as a result of
receiving relocation expense benefits under the CSS relocation policy). Further, in addition to
the foregoing relocation expense reimbursement and in the event that you do not complete the sale
of your Current Primary Residence prior to November 1, 2010, after November
1, 2010 and until the earlier of (a) November 1, 2011 or (b) the date upon which you complete
the sale of your Current Primary Residence, you will be eligible to be reimbursed for routine,
ordinary course expenses approved in advance by us, up to a maximum aggregate monthly amount of
$4,500, associated with your ownership of the Current Primary Residence, including without
limitation approved mortgage, utility and routine maintenance expenses. We will reimburse you for
the foregoing approved Current Primary Residence expenses promptly after you submit to us
appropriate documentation relating to such expenses.
Ms. Laurie F. Gilner
July 26, 2010
Page 3
July 26, 2010
Page 3
4. Employment
Status; Severance Payments Your employment status with CRG is subject
to termination by either you or CRG at any time. However, in the event that CRG terminates your
employment without cause at any time prior to September 6, 2013, and subject to your compliance
with the terms and conditions of this letter agreement, CRG will pay you an amount equal to the
greater of (i) one year of your then-current annual base salary (less applicable tax withholdings
and payroll deductions) or (ii) an amount equal to your then-current annual base salary (less
applicable tax withholdings and payroll deductions) for the period from the effective date of such
termination to September 6, 2013, such amount reduced by and to the extent of any earnings and
other compensation received by you or accrued for your benefit for your services (whether as an
employee or as an independent contractor) during the period commencing on the day following the one
year anniversary of your termination. For purposes of this letter agreement, termination without
cause means termination other than termination resulting from or related to your breach of any of
your obligations under this letter agreement, your failure to comply with any lawful directive of
CRGs Chairman and Chief Executive Officer, your failure to comply with CSS Code of Ethics, your
conviction of a felony or of any moral turpitude crime, or your willful or intentional engagement
in conduct injurious to CSS or any of its affiliates.
The foregoing payment obligation is contingent upon (x) receipt by CRG of a valid and fully
effective release (in form and substance reasonably satisfactory to CRG) of all claims of any
nature which you might have at such time against CRG, CSS, and their respective affiliates, and
their respective officers, directors and agents, excepting therefrom only any payments due to you
from CRG pursuant to this Section 4, and (y) your resignation from all positions of any nature
which you may then hold with CRG, CSS and their respective affiliates. If you are eligible to
receive the foregoing payment, such amount will be paid to you in equal installments, with such
installments being paid on the then-applicable paydays for CRG executives, commencing on or about
the first such payday following the termination of your employment by CRG without cause and your
satisfaction of the conditions specified in the immediately preceding sentence.
Further, if you are eligible to receive the payment set forth in clause (ii) of the first
paragraph of this Section 4, you covenant and agree that commencing with the one year anniversary
of the date of your termination you will promptly advise CRG in writing on a bi-weekly basis of any
earnings and other compensation received by you or accrued for your benefit for your services
(whether as an employee or as an independent contractor) during the period commencing on the day
following the one year anniversary of your termination.
Ms. Laurie F. Gilner
July 26, 2010
Page 4
July 26, 2010
Page 4
5. Confidential Information. You recognize and acknowledge that by reason of
employment by and service to CRG, you have had and will continue to have access to confidential
information of CRG, CSS, and their respective affiliates, including, without limitation,
information and knowledge pertaining to products and services offered, inventions, innovations,
designs, ideas, plans, trade secrets, proprietary information, computer systems and software,
packaging, advertising, distribution and sales methods and systems, sales and profit figures,
customer and client lists, and relationships between or among CRG, CSS and their respective
affiliates and dealers, distributors, wholesalers, customers, clients, suppliers and others who
have business dealings with CRG, CSS and such affiliates (Confidential Information). You
acknowledge that such Confidential Information is a valuable and unique asset of CRG, CSS and/or
their respective affiliates, and covenant that you will not, either during or at any time after
your employment with CRG, disclose any such Confidential Information to any person for any reason
whatsoever (except as your duties described herein may require) without the prior written consent
of the Committee, unless such information is in the public domain through no fault of you or except
as may be required by law.
6. Non-Competition. During your employment with CRG, and for a period of one year
thereafter, you will not, without the prior written consent of the Committee, directly or
indirectly, own, manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer, director, employee,
partner, principal, agent, representative, consultant or otherwise with or use or permit your name
to be used in connection with, any business or enterprise engaged within any portion of the United
States or Canada (collectively, the Territory) (whether or not such business is physically
located within the Territory) that is engaged in the creation, design, manufacture, distribution or
sale of any products or services that are the same or of a similar type then manufactured or
otherwise provided by CRG, CSS or by any of their respective affiliates during your employment with
CRG (the Business). You recognize that you will be involved in the activity of the Business
throughout the Territory, and that more limited geographical limitations on this non-competition
covenant (and the non-solicitation covenant set forth in Section 7 of this letter agreement) are
therefore not appropriate. The foregoing restriction shall not be construed to prohibit your
ownership of not more than five percent (5%) of any class of securities of any corporation which is
engaged in any of the foregoing businesses having a class of securities registered pursuant to the
Securities Act of 1933, provided that such ownership represents a passive investment and that
neither you nor any group of persons including you in any way, either directly or indirectly,
manages or exercises control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part in business, other than exercising his rights as a shareholder, or seeks
to do any of the foregoing.
7. No Solicitation. During your employment with CRG, and for a period of one year
thereafter, you agree not to, either directly or indirectly, (i) call on or solicit with respect to
the Business any person, firm, corporation or other entity who or which at the time of termination
of your employment with CRG was, or within two years prior thereto had been, a customer of CRG, CSS
or any of their respective affiliates, or (ii) solicit the employment of any person who
was employed by CRG, CSS or by any of their respective affiliates on a full or part-time basis at
any time during the course of your employment with CRG, unless prior to such solicitation of
employment, such persons employment with CRG, CSS or any of their respective affiliates was
terminated.
Ms. Laurie F. Gilner
July 26, 2010
Page 5
July 26, 2010
Page 5
8. Equitable Relief.
A. You acknowledge that the restrictions contained in Sections 5, 6 and 7 of this letter
agreement are reasonable and necessary to protect the legitimate interests of CRG, CSS and their
respective affiliates, that CRG would not have entered into this letter agreement in the absence of
such restrictions, and that any violation of any provision of those Sections will result in
irreparable injury to CRG, CSS and their respective affiliates. You represent that your
experience and capabilities are such that the restrictions contained in Sections 5 and 6 hereof
will not prevent you from obtaining employment or otherwise earning a living at the same general
level of economic benefit as is anticipated by this letter agreement. YOU FURTHER REPRESENT AND
ACKNOWLEDGE THAT (i) YOU HAVE BEEN ADVISED BY CRG TO CONSULT YOUR OWN LEGAL COUNSEL IN RESPECT OF
THIS LETTER AGREEMENT, (ii) THAT YOU HAVE HAD FULL OPPORTUNITY, PRIOR TO EXECUTION OF THIS LETTER
AGREEMENT, TO REVIEW THOROUGHLY THIS LETTER AGREEMENT WITH YOUR COUNSEL, AND (iii) YOU HAVE READ
AND FULLY UNDERSTAND THE TERMS AND PROVISIONS OF THIS LETTER AGREEMENT.
B. You agree that CRG shall be entitled to preliminary and permanent injunctive relief,
without the necessity of proving actual damages, as well as any other remedies provided by law
arising from any violation of Sections 5, 6 and 7 of this letter agreement, which rights shall be
cumulative and in addition to any other rights or remedies to which CRG may be entitled. In the
event that any of the provisions of Sections 5, 6 and 7 hereof should ever be adjudicated to exceed
the time, geographic, product or service, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum
time, geographic, product or service, or other limitations permitted by applicable law.
C. You and CRG irrevocably and unconditionally (i) agree that any suit, action or other legal
proceeding arising out of Sections 5, 6 and 7 of this letter agreement, including without
limitation, any action commenced by CRG for preliminary or permanent injunctive relief or other
equitable relief, may be brought in the United States District Court for the Eastern District of
Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any
court of general jurisdiction in Philadelphia County, Pennsylvania, (ii) consent to the
non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii)
waive any objection to the laying of venue of any such suit, action or proceeding in any such
court.
Ms. Laurie F. Gilner
July 26, 2010
Page 6
July 26, 2010
Page 6
D. You agree that CRG may provide a copy of Sections 5, 6 and 7 of this letter agreement to
any business or enterprise (i) which you may directly or indirectly own, manage, operate, finance,
join, participate in the ownership, management, operation, financing, control or control of, or
(ii) with which you may be connected with as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise, or in connection with which you may use or permit
your name to be used.
9. Governing Law. This letter agreement shall be governed by and interpreted under
the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws
provisions.
10. Section 409A of the Internal Revenue Code of 1986, as amended (the Code).
A. Interpretation. Notwithstanding the other provisions hereof, this letter
agreement is intended to comply with the requirements of Section 409A of the Code, to the extent
applicable, and this letter agreement shall be interpreted to avoid any penalty sanctions under
Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall
be construed and interpreted to comply with Section 409A of the Code and, if necessary, any such
provision shall be deemed amended to comply with Section 409A of the Code and regulations
thereunder. If any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under Section 409A of the Code, then such benefit or payment shall be
provided in full at the earliest time thereafter when such sanctions will not be imposed. All
payments to be made upon a termination of employment under this letter agreement that are deferred
compensation may only be made upon a separation from service under Section 409A of the Code. For
purposes of Section 409A of the Code, each payment made under this letter agreement shall be
treated as a separate payment. In no event may you, directly or indirectly, designate the calendar
year of payment. While this letter agreement is intended to comply with the requirements of
Section 409A of the Code, to the extent applicable, neither CRG, CSS nor any of its respective
affiliates makes or has made any representation, warranty or guarantee of any federal, state or
local tax consequences of your receipt of any benefit or payment hereunder, including but not
limited to, under Section 409A of the Code, and you are solely responsible for all taxes that may
result from your receipt of the amounts payable to you under this letter agreement.
B. Payment Delay. To the maximum extent permitted under Section 409A of the Code, the
severance benefits payable under this letter agreement are intended to comply with the short-term
deferral exception under Treas. Reg. §1.409A-1(b)(4), and any remaining amount is intended to
comply with the separation pay exception under Treas. Reg. §1.409A-1(b)(9)(iii); provided,
however, any amount payable to you during the six (6) month period following your separation date
that does not qualify within either of the foregoing exceptions and constitutes deferred
compensation subject to the requirements of Section 409A of the Code, then such amount shall
hereinafter be referred to as the Excess Amount. If at the time of your separation from service,
CSS (or any entity required to be aggregated with CSS under Section 409A of the Code) stock is
publicly-traded on an established securities market or otherwise and you are a specified employee
(as defined in Section 409A of the Code and determined in the
sole discretion of CSS (or any successor thereto) in accordance with CSS (or any successor
thereto) specified employee determination policy), then CRG shall postpone the commencement of
the payment of the portion of the Excess Amount that is payable within the six (6) month period
following your separation date with CRG (or any successor thereto) for six (6) months following
your separation date with CRG (or any successor thereto). The delayed Excess Amount shall be paid
in a lump sum to you within thirty (30) days following the date that is six (6) months following
your separation date with CRG (or any successor thereto). If you die during such six (6) month
period and prior to the payment of the portion of the Excess Amount that is required to be delayed
on account of Section 409A of the Code, such Excess Amount shall be paid to the personal
representative of your estate within sixty (60) days after your death.
Ms. Laurie F. Gilner
July 26, 2010
Page 7
July 26, 2010
Page 7
C. Reimbursements. All reimbursements provided under this letter agreement shall be
made or provided in accordance with the requirements of Section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement is for expenses incurred during your
lifetime (or during a shorter period of time specified in this letter agreement), (ii) the amount
of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible
for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will
be made on or before the last day of the taxable year following the year in which the expense is
incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another
benefit.
Please confirm your understanding of the foregoing provisions by executing the enclosed
counterpart of this letter and returning this executed counterpart to me.
Sincerely yours,
Christopher J. Munyan
Chairman and Chief Executive Officer
C.R. Gibson, LLC
Chairman and Chief Executive Officer
C.R. Gibson, LLC
The aforementioned is confirmed as of this
_____
day of July, 2010:
cc: William G. Kiesling |