Change of Control Employment Agreement with Robert P. van der Merwe 04/26/05

Amendment to the Employment Agreement 03/22/07

 

                                                                    Exhibit 10.1

 

                     CHANGE OF CONTROL EMPLOYMENT AGREEMENT

 

     AGREEMENT by and between PAXAR CORPORATION, a New York corporation (the

"Company"), and ROBERT P. van der MERWE (the "Executive"), dated as of the 26th

day of April, 2005.

 

     The Board of Directors of the Company (the "Board"), has determined that it

is in the best interests of the Company and its shareholders to assure that the

Company will have the continued dedication of the Executive, notwithstanding the

possibility, threat or occurrence of a Change of Control (as defined in Section

2 below) of the Company. The Board believes it is imperative to diminish the

inevitable distraction of the Executive by virtue of the personal uncertainties

and risks created by a pending or threatened Change of Control and to encourage

the Executive's full attention and dedication to the Company currently and in

the event of any threatened or pending Change of Control, and to provide the

Executive with compensation and benefits arrangements upon a Change of Control

that ensure that the compensation and benefits expectations of the Executive

will be satisfied and that are competitive with those of other corporations.

Therefore, in order to accomplish these objectives, the Board has caused the

Company to enter into this Agreement.

 

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

     1.   CERTAIN DEFINITIONS.

 

     (a) The "Effective Date" means the first date during the Change of Control

Period (as defined in Section 1(b)) on which a Change of Control occurs.

Anything in this Agreement to the contrary notwithstanding, if (A) a Change of

Control occurs, (B) the Executive's employment with the Company is terminated

prior to the date on which the Change of Control occurs, and (C) such

termination of employment (i) was at the request of a third party who has taken

steps reasonably calculated to effect a Change of Control or (ii) otherwise

arose in connection with or anticipation of a Change of Control, then for all

purposes of this Agreement the "Effective Date" shall mean the date immediately

prior to the date of such termination of employment.

 

     (b) The "Change of Control Period" means the period commencing on the date

hereof and ending on the third anniversary of the date hereof; provided,

however, that commencing on the first anniversary of this Agreement, and on each

anniversary of such date (each such anniversary being referred to herein as the

"Renewal Date"), unless previously terminated, the Change of Control Period

shall be automatically extended so as to terminate three years from such Renewal

Date, unless at least 60 days prior to the Renewal Date the Company shall give

notice to the Executive that the Change of Control Period shall not be so

extended.

 

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     2.   DEFINITION OF CHANGE OF CONTROL. "Change of Control" means:

 

     (a) The acquisition by any individual, entity, or group (within the meaning

of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as

amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the

meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of

either (i) the then outstanding shares of common stock of the Company (the

"Outstanding Company Common Stock") or (ii) the combined voting power of the

then outstanding voting securities of the Company entitled to vote generally in

the election of directors (the "Outstanding Company Voting Securities");

provided, however, that for purposes of this subsection (a), the following

acquisitions of stock shall not result in a Change of Control: (i) any

acquisition directly from the Company, (ii) any acquisition by the Company,

(iii) any acquisition by any employee benefit plan (or related trust) sponsored

or maintained by the Company or any corporation controlled by the Company, or

(iv) any acquisition by any corporation pursuant to a transaction that complies

with clauses (i), (ii), and (iii) of subsection (c) of this Section 2; or

 

     (b) Individuals who, as of the date hereof, constitute the Board (the

"Incumbent Board") cease for any reason to constitute at least a majority of the

Board; provided, however, that any individual becoming a director subsequent to

the date hereof whose election, or nomination for election, by the Company's

shareholders was approved by a vote of at least a majority of the directors then

comprising the Incumbent Board shall be considered as though such individual

were a member of the Incumbent Board, but excluding, for this purpose, any such

individual whose initial assumption of office occurs as a result of an actual or

threatened election contest with respect to the election or removal of directors

or other actual or threatened solicitation of proxies or consents by or on

behalf of a Person other than the Board; or

 

     (c) Consummation of a reorganization, merger, or consolidation or sale or

other disposition of all or substantially all of the assets of the Company (a

"Business Combination"), in each case, unless following such Business

Combination, (i) all or substantially all of the individuals and entities who

were the beneficial owners, respectively, of the Outstanding Company Common

Stock and Outstanding Company Voting Securities immediately prior to such

Business Combination beneficially own, directly or indirectly, more than 60% of,

respectively, the outstanding shares of common stock and the combined voting

power of the then outstanding voting securities entitled to vote generally in

the election of directors, as the case may be, of the corporation resulting from

such Business Combination, including, without limitation, a corporation that as

a result of such transaction owns the Company or all or substantially all of the

Company's assets either directly or through one or more subsidiaries (any such

corporation being referred to herein as a "Resulting Corporation"), in

substantially the same proportions as their ownership of the Outstanding Company

Common Stock and Outstanding Company Voting Securities, as the case may be,

immediately prior to such Business Combination, (ii) no Person (excluding any

employee benefit plan (or related trust) of the Company or a Resulting

Corporation) beneficially owns, directly or indirectly, 30% or more of,

respectively, the outstanding shares of common stock of the Resulting

Corporation or the combined voting power of the then outstanding voting

securities of such Resulting Corporation except to the extent that such

ownership existed prior to the Business Combination, and (iii) at least a

majority of the members of the board of directors of the Resulting Corporation

were members of the Incumbent Board at the time of the execution of the initial

agreement, or of the action of the Board, providing for such Business

Combination; or

 

<PAGE>

 

 

     (d) Approval by the shareholders of the Company of a complete liquidation

or dissolution of the Company.

 

     3. EMPLOYMENT PERIOD. The Company hereby agrees to continue the Executive

in its employ, and the Executive hereby agrees to remain in the employ of the

Company subject to the terms and conditions of this Agreement, for the period

commencing on the Effective Date and ending on the third anniversary of such

date (the "Employment Period").

 

     4.   TERMS OF EMPLOYMENT.

 

          (a)  POSITION AND DUTIES.

 

               (i) During the Employment Period, (A) the Executive's position

(including status, offices, titles, and reporting requirements), authority,

duties, and responsibilities shall be at least commensurate in all material

respects with the most significant of those held, exercised, and assigned to the

Executive at any time during the 120-day period immediately preceding the

Effective Date and (B) the Executive's services shall be performed at the

location where the Executive was employed immediately preceding the Effective

Date or at any office or location less than 35 miles from such location.

 

               (ii) During the Employment Period, and excluding any periods of

vacation and sick leave to which the Executive is entitled, the Executive agrees

to devote his full attention and time during normal business hours to the

business and affairs of the Company and its affiliate companies and, to the

extent necessary to discharge the responsibilities assigned to the Executive

hereunder, to use the Executive's reasonable best efforts to perform faithfully

and efficiently such responsibilities.

 

          (b)  COMPENSATION.

 

               (i) BASE SALARY. During the Employment Period, the Executive

shall receive an annual base salary ("Annual Base Salary"), which shall be paid

at a monthly rate, at least equal to twelve times the highest monthly base

salary paid or payable, including any base salary which has been earned but

deferred, to the Executive by the Company and its affiliated companies in

respect of the twelve-month period immediately preceding the month in which the

Effective Date occurs. During the Employment Period, the Annual Base Salary

shall be reviewed no more than 12 months after the last salary increase awarded

to the Executive prior to the Effective Date and thereafter at least annually.

Any increase in Annual Base Salary shall not serve to limit or reduce any other

obligation to the Executive under this Agreement. Annual Base Salary shall not

be reduced after any such increase and the term Annual Base Salary as used in

this Agreement shall refer to Annual Base Salary as so increased. As used in

this Agreement, the term "affiliated companies" shall include any company

controlled by, controlling, or under common control with the Company.

 

<PAGE>

 

 

               (ii) ANNUAL BONUS. In addition to Annual Base Salary, the

Executive shall be awarded, for each fiscal year ending during the Employment

Period, an annual bonus in cash at least equal to the Executive's highest award

or awards for any fiscal year under the Company's plan or plans which provide

for the grant of annual cash bonuses or other short-term cash incentive awards

during the last three full fiscal years prior to the Effective Date (any such

award shall be annualized for any fiscal year in the event that the Executive

was not employed by the Company for the whole of such fiscal year) (the "Annual

Bonus"). Each such Annual Bonus plus unpaid but due amounts from prior awards

shall be paid in accordance with the terms of the applicable plan but in no

event later than the last day of the Employment Period.

 

               In the event the Executive has not received an Annual Bonus

during the period of three fiscal years prior to the Effective Date, the Annual

Bonus shall be the maximum amount of the bonus or award the Executive could earn

for the fiscal year during which the Effective Date occurs under any plan or

arrangement in which the Executive participates or is eligible to participate

and assuming: (1) the attainment of any performance goals or similar criteria

applicable to the Executive ("Bonus Criteria") to the extent necessary for the

Executive to qualify to receive the maximum award; and (2) the Executive's

employment by the Company for the full fiscal year.

 

               (iii) INCENTIVE, SAVINGS, AND RETIREMENT PLANS. During the

Employment Period, the Executive shall be entitled to participate in all

incentive (including stock option or similar incentive plans), savings and

retirement plans, practices, policies and programs applicable generally to other

peer executives of the Company and its affiliated companies, but in no event

shall such plans, practices, policies, and programs provide the Executive with

incentive opportunities (measured with respect to both regular and special

incentive opportunities, to the extent, if any, that such distinction is

applicable), savings opportunities and retirement benefit opportunities, in each

case, less favorable, in the aggregate, than the most favorable of those

provided by the Company and its affiliated companies for the Executive under

such plans, practices, policies, and programs as in effect at any time during

the 120-day period immediately preceding the Effective Date or if more favorable

to the Executive, those provided generally at any time after the Effective Date

to other peer executives of the Company and its affiliated companies.

 

               (iv) WELFARE BENEFIT PLANS. During the Employment Period, the

Executive and/or the Executive's family, as the case may be, shall be eligible

for participation in and shall receive all benefits under welfare benefit plans,

practices, policies, and programs provided by the Company and its affiliated

companies (including, without limitation, medical, prescription, dental,

disability, salary continuance, employee life, group life, accidental death, and

travel accident insurance plans and programs) to the extent applicable generally

to other peer executives of the Company and its affiliated companies, but in no

event shall such plans, practices, policies, and programs provide the Executive

with benefits that are less favorable, in the aggregate, than the most favorable

of such plans, practices, policies, and programs in effect for the Executive at

any time during the 120-day period immediately preceding the Effective Date or,

if more favorable to the Executive, those provided generally at any time after

the Effective Date to other peer executives of the Company and its affiliated

companies.

 

<PAGE>

 

 

               (v) EXPENSES. During the Employment Period, the Executive shall

be entitled to receive prompt reimbursement for all reasonable expenses incurred

by the Executive in accordance with the most favorable policies, practices, and

procedures of the Company and its affiliated companies in effect for the

Executive at any time during the 120-day period immediately preceding the

Effective Date or, if more favorable to the Executive, as in effect generally at

any time thereafter with respect to other peer executives of the Company and its

affiliated companies.

 

               (vi) FRINGE BENEFITS. During the Employment Period, the Executive

shall be entitled to fringe benefits, including, without limitation, if

applicable, tax and financial planning services, use of an automobile and

payment of related expenses, in accordance with the most favorable plans,

practices, programs, and policies of the Company and its affiliated companies in

effect for the Executive at any time during the 120-day period immediately

preceding the Effective Date or, if more favorable to the Executive, as in

effect generally at any time thereafter with respect to other peer executives of

the Company and its affiliated companies.

 

               (vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the

Executive shall be entitled to an office or offices of a size and with

furnishings and other appointments, and to exclusive personal secretarial and

other assistance, at least equal to the most favorable of the foregoing provided

to the Executive by the Company and its affiliated companies at any time during

the 120-day period immediately preceding the Effective Date or, if more

favorable to the Executive, as provided generally at any time thereafter with

respect to other peer executives of the Company and its affiliated companies.

 

               (viii) VACATION. During the Employment Period, the Executive

shall be entitled to paid vacation in accordance with the most favorable plans,

policies, programs, and practices of the Company and its affiliated companies as

in effect for the Executive at any time during the 120-day period immediately

preceding the Effective Date or, if more favorable to the Executive, as in

effect generally at any time thereafter with respect to other peer executives of

the Company and its affiliated companies.

 

     5.   TERMINATION OF EMPLOYMENT.

 

          (a) DEATH OR DISABILITY. The Executive's employment shall terminate

automatically upon the Executive's death during the Employment Period. If the

Company determines in good faith that the Disability of the Executive has

occurred during the Employment Period (pursuant to the definition of Disability

set forth below), it may give to the Executive written notice in accordance with

Section 12(b) of this Agreement of its intention to terminate the Executive's

employment. In such event, the Executive's employment with the Company shall

terminate effective on the 30th day after receipt of such notice by the

Executive (the "Disability Effective Date"), provided that, within the 30 days

after such receipt, the Executive shall not have returned to full-time

performance of the Executive's duties. For purposes of this Agreement,

"Disability" shall mean the absence of the Executive from the Executive's duties

with the Company on a full-time basis for 180 consecutive days as a result of

incapacity due to mental or physical illness which is determined to be total and

permanent by a physician selected by the Company or its insurers and acceptable

to the Executive or the Executive's legal representative.

 

<PAGE>

 

 

          (b) CAUSE. The Company may terminate the Executive's employment during

the Employment Period for Cause. For purposes of this Agreement, "Cause" shall

mean:

 

               (i) the willful and continued failure of the Executive to perform

substantially the Executive's duties with the Company or one of its affiliates

(other than any such failure resulting from incapacity due to physical or mental

illness), after a written demand for substantial performance is delivered to the

Executive by the Board or the Chief Executive Officer of the Company that

specifically identifies the manner in which the Board or Chief Executive Officer

believes that the Executive has not substantially performed the Executive's

duties, or

 

               (ii) the willful engaging by the Executive in illegal conduct or

gross misconduct that is materially and demonstrably injurious to the Company.

 

     For purposes of this provision, no act or failure to act, on the part of

the Executive, shall be considered "willful" unless it is done, or omitted to be

done, by the Executive in bad faith or without reasonable belief that the

Executive's action or omission was in the best interests of the Company. Any

act, or failure to act, based upon authority given pursuant to a resolution duly

adopted by the Board or upon the instructions of the Chief Executive Officer or

a senior officer of the Company or based upon the advice of counsel for the

Company shall be conclusively presumed to be done, or omitted to be done, by the

Executive in good faith and in the best interests of the Company. The cessation

of employment of the Executive shall not be deemed to be for Cause unless and

until there shall have been delivered to the Executive a copy of a resolution

duly adopted by the affirmative vote of not less than three-quarters of the

entire membership of the Board at a meeting of the Board called and held for

such purpose (after reasonable notice is provided to the Executive and the

Executive is given an opportunity, together with counsel, to be heard before the

Board), finding that, in the good faith opinion of the Board, the Executive is

guilty of the conduct described in subparagraph (i) or (ii) above, and

specifying the particulars thereof in detail.

 

          (c) GOOD REASON. The Executive's employment may be terminated by the

Executive for Good Reason. For purposes of this Agreement, "Good Reason" means

the breach by the Company of its obligations under Section 4(a), 4(b) or 11(c)

of this Agreement, including, without limitation, any requirement for the

Executive to travel on Company business to a substantially greater extent than

required immediately prior to the Effective Date or any purported termination by

the Company of the Executive's employment otherwise than as expressly permitted

by this Agreement, and the failure of the Company to cure such breach promptly

after notice thereof by the Executive. For purposes of this Section 5(c), any

good faith determination of "Good Reason" made by the Executive shall be

conclusive.

 

<PAGE>

 

 

          (d) NOTICE OF TERMINATION. Any termination by the Company for Cause,

or by the Executive for Good Reason, shall be communicated by Notice of

Termination to the other party hereto given in accordance with Section 12(b) of

this Agreement. For purposes of this Agreement, a "Notice of Termination" means

a written notice which (i) indicates the specific termination provision in this

Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable

detail the facts and circumstances claimed to provide a basis for termination of

the Executive's employment under the provision so indicated, and (iii) if the

Date of Termination (as defined below) is other than the date of receipt of such

notice, specifies the termination date (which date shall be not more than thirty

days after the giving of such notice). The failure by the Executive or the

Company to set forth in the Notice of Termination any fact or circumstance which

contributes to a showing of Good Reason or Cause shall not waive any right of

the Executive or the Company, respectively, hereunder or preclude the Executive

or the Company, respectively, from asserting such fact or circumstance in

enforcing the Executive's or the Company's rights hereunder.

 

          (e) DATE OF TERMINATION. "Date of Termination" means (i) if the

Executive's employment is terminated by the Company for Cause, or by the

Executive for Good Reason, the date of receipt of the Notice of Termination or

any later date specified therein, as the case may be, (ii) if the Executive's

employment is terminated by the Company other than for Cause or Disability, the

Date of Termination shall be the date on which the Company notifies the

Executive of such termination, and (iii) if the Executive's employment is

terminated by reason of death or Disability, the Date of Termination shall be

the date of death of the Executive or the Disability Effective Date, as the case

may be.

 

     6.   OBLIGATIONS OF THE COMPANY UPON TERMINATION.

 

          (a) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during

the Employment Period, the Company shall terminate the Executive's employment

other than for Cause, death or Disability or the Executive shall terminate

employment for Good Reason:

 

               (i) the Company shall pay to the Executive in a lump sum in cash

within 30 days after the Date of Termination the aggregate of the following

amounts:

 

               A. the sum of (1) the Executive's Annual Base Salary through the

Date of Termination to the extent not theretofore paid, (2) the product of (x)

the Annual Bonus that the Executive would have received had the Company achieved

100% of the Bonus Criteria for the current fiscal, and (y) a fraction, the

numerator of which is the number of days in the current fiscal year through the

Date of Termination, and the denominator of which is 365, and (3) any

compensation previously deferred by the Executive (together with any accrued

interest or earnings thereon), any awards under any other compensation or award

plan based on the Executive performance or any comparable or successor plan and

any accrued vacation pay, in each case to the extent not theretofore paid (the

sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter

referred to as the "Accrued Obligations"); and

 

<PAGE>

 

 

               B. the amount equal to the product of (1) 2.99 and (2) the sum of

(x) the Executive's Annual Base Salary and (y) the Annual Bonus that the

Executive would have received had the Company achieved 100% of the Bonus

Criteria for the current fiscal year;

 

               (ii) for three years after the Executive's Date of Termination,

or such longer period as may be provided by the terms of the appropriate health

insurance plan, practice, policy, or program, the Company shall continue health

insurance benefits to the Executive and/or the Executive's family at least equal

to those that would have been provided to them in accordance with the health

insurance plans, programs, practices, and policies described in Section 4(b)(iv)

of this Agreement if the Executive's employment had not been terminated or, if

more favorable to the Executive, as in effect generally at any time thereafter

with respect to other peer executives of the Company and its affiliated

companies and their families; provided, however, that if the Executive becomes

reemployed with another employer and is eligible to receive health insurance

benefits under another employer provided plan, the health insurance benefits

described herein shall be secondary to those provided under such other plan

during such applicable period of eligibility;

 

               (iii) the Company shall, at its sole expense as incurred, provide

the Executive with outplacement services the scope and provider of which shall

be selected by the Executive in his or her sole discretion;

 

               (iv) all options to purchase the Company's securities granted to

the Executive under any Company employee stock option plan shall become

immediately exercisable, it being understood by the Executive that such

immediate vesting may cause the characterization of such options under the

Internal Revenue Code of 1986, as amended (the "Code"), to be changed from

incentive stock options to non-qualified stock options with attendant tax

consequences; and

 

               (iv) to the extent not theretofore paid or provided, the Company

shall timely pay or provide to the Executive any other amounts or benefits

required to be paid or provided generally to employees of the Company upon

termination of employment under any plan, program, policy, or practice or

contract or agreement of the Company and its affiliated companies (such other

amounts and benefits shall be hereinafter referred to as the "Other Benefits").

 

          (b) DEATH. If the Executive's employment is terminated by reason of

the Executive's death during the Employment Period, this Agreement shall

terminate without further obligations to the Executive's legal representatives

under this Agreement, other than for payment of Accrued Obligations and the

timely payment or provision of Other Benefits. Accrued Obligations shall be paid

to the Executive's estate or beneficiary, as applicable, in a lump sum in cash

within 30 days of the Date of Termination. With respect to the provision of

Other Benefits, the term Other Benefits as used in this Section 6(b) shall

include, without limitation, and the Executive's estate and/or beneficiaries

shall be entitled to receive, benefits at least equal to the most favorable

benefits provided by the Company and affiliated companies to the estates and

beneficiaries of peer executives of the Company and such affiliated companies

under such plans, programs, practices, and policies relating to death benefits,

if any, as in effect with respect to other peer executives and their

beneficiaries at any time during the 120-day period immediately preceding the

Effective Date or, if more favorable to the Executive's estate and/or the

Executive's beneficiaries, as in effect on the date of the Executive's death

with respect to other peer executives of the Company and its affiliated

companies and their beneficiaries.

 

<PAGE>

 

 

          (c) DISABILITY. If the Executive's employment is terminated by reason

of the Executive's Disability during the Employment Period, this Agreement shall

terminate without further obligations to the Executive, other than for payment

of Accrued Obligations and the timely payment or provision of Other Benefits.

Accrued Obligations shall be paid to the Executive in a lump sum in cash within

30 days of the Date of Termination. With respect to the provision of Other

Benefits, the term Other Benefits as used in this Section 6(c) shall include,

and the Executive shall be entitled after the Disability Effective Date to

receive, disability and other benefits at least equal to the most favorable of

those generally provided by the Company and its affiliated companies to disabled

executives and/or their families in accordance with such plans, programs,

practices, and policies relating to disability, if any, as in effect generally

with respect to other peer executives and their families at any time during the

120-day period immediately preceding the Effective Date or, if more favorable to

the Executive and/or the Executive's family, as in effect at any time thereafter

generally with respect to other peer executives of the Company and its

affiliated companies and their families.

 

          (d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment

shall be terminated for Cause during the Employment Period or if the Executive

voluntarily terminates employment during the Employment Period, excluding a

termination for Good Reason, this Agreement shall terminate without further

obligations to the Executive other than the obligation to pay to the Executive

(x) his or her Annual Base Salary through the Date of Termination, (y) the

amount of any compensation previously deferred by the Executive, and (z) Other

Benefits, in each case to the extent theretofore unpaid. In such case, all

Accrued Obligations shall be paid to the Executive in a lump sum in cash within

30 days of the Date of Termination.

 

     7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or

limit the Executive's continuing or future participation in any plan, practice,

policy, or program provided by the Company or any of its affiliated companies

and for which the Executive may qualify, nor, subject to Section 12(f), shall

anything herein limit or otherwise affect such rights as the Executive may have

under any contract or agreement with the Company or any of its affiliated

companies. Amounts that are vested benefits or that the Executive is otherwise

entitled to receive under any plan, policy, practice, or program of or any

contract or agreement with the Company or any of its affiliated companies at or

subsequent to the Date of Termination shall be payable in accordance with such

plan, practice, policy, or program or contract or agreement except as explicitly

modified by this Agreement.

 

     8. FULL SETTLEMENT. The Company's payment of the amounts payable under

Section 6 hereof upon termination of the Executive's employment shall be in full

settlement of all claims of any nature whatsoever that the Executive may have

against the Company. The Company's obligation to make the payments provided for

in this Agreement and otherwise to perform its obligations hereunder shall not

be affected by any set-off, counterclaim, recoupment, defense, or other claim,

right, or action that the Company may have against the Executive or others. In

no event shall the Executive be obligated to seek other employment or take any

other action by way of mitigation of the amounts payable to the Executive under

any of the provisions of this Agreement and such amounts shall not be reduced

whether or not the Executive obtains other employment. The Company agrees to pay

as incurred, to the full extent permitted by law, all legal fees and expenses

that the Executive may reasonably incur as a result of any contest (regardless

of the outcome thereof) by the Company, the Executive or others of the validity

or enforceability of, or liability under, any provision of this Agreement or any

guarantee of performance thereof (including as a result of any contest by the

Executive about the amount of any payment pursuant to this Agreement), plus in

each case interest on any delayed payment at the applicable Federal rate

provided for in Section 7872(f)(2)(A) of the Code.

 

<PAGE>

 

 

     9. EXCISE TAX. The Executive and the Company acknowledge that the payments

specified in this Agreement and in any other agreements between the Executive

and the Company may be subject to the tax (the "Excise Tax") imposed by Section

4999 of the Code (or any similar tax that may hereinafter be imposed) because of

"excess parachute payments," as defined in Section 280G of the Code and that it

is their intention that the Company shall have no obligation to make any payment

to the Executive upon termination of his employment that would result in the

requirement to pay the Excise Tax. The Executive and the Company agree that the

amounts payable pursuant to this Agreement and any such other agreements shall

be reduced by such amount as shall be necessary to avoid the imposition of the

Excise Tax.

 

     10. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary

capacity for the benefit of the Company all secret or confidential information,

knowledge, or data relating to the Company or any of its affiliated companies,

and their respective businesses, that shall have been obtained by the Executive

during the Executive's employment by the Company or any of its affiliated

companies and that shall not be or become public knowledge (other than by acts

by the Executive or representatives of the Executive in violation of this

Agreement). After termination of the Executive's employment with the Company,

the Executive shall not, without the prior written consent of the Company or as

may otherwise be required by law or legal process, use or communicate or divulge

any such information, knowledge, or data to anyone other than the Company and

those designated by it. In no event shall an asserted violation of the

provisions of this Section 10 constitute a basis for deferring or withholding

any amounts otherwise payable to the Executive under this Agreement.

 

     11. SUCCESSORS.

 

          (a) This Agreement is personal to the Executive and without the prior

written consent of the Company shall not be assignable by the Executive

otherwise than by will or the laws of descent and distribution. This Agreement

shall inure to the benefit of and be enforceable by the Executive's legal

representatives.

 

          (b) This Agreement shall inure to the benefit of and be binding upon

the Company and its successors and assigns.

 

          (c) The Company will 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 the Company to assume

expressly and agree to perform this Agreement in the same manner and to the same

extent that the Company would be required to perform it if no such succession

had taken place. As used in this Agreement, "Company" shall mean the Company as

hereinbefore defined and any successor to its business and/or assets as

aforesaid.

 

<PAGE>

 

 

     12. MISCELLANEOUS.

 

          (a) This Agreement shall be governed by and construed in accordance

with the laws of the State of New York, without reference to principles of

conflict of laws. The captions of this Agreement are not part of the provisions

hereof and shall have no force or effect. This Agreement may not be amended or

modified otherwise than by a written agreement executed by the parties hereto or

their respective successors and legal representatives.

 

          (b) All notices and other communications hereunder shall be in writing

and shall be given by hand delivery to the other party or by registered or

certified mail, return receipt requested, postage prepaid, addressed as follows:

 

          If to the Executive:  Robert P. van der Merwe

                                Paxar Corporation

                                105 Corporate Park Drive

                                White Plains, NY 10604

 

 

          If to the Company:    Paxar Corporation

                                105 Corporate Park Drive

                                White Plains, NY 10604

                                Attention: General Counsel

 

or to such other address as either party shall have furnished to the other in

writing in accordance herewith. Notice and communications shall be effective

when actually received by the addressee.

 

          (c) The invalidity or unenforceability of any provision of this

Agreement shall not affect the validity or enforceability of any other provision

of this Agreement.

 

          (d) The Company may withhold from any amounts payable under this

Agreement such federal, state, local, or foreign taxes as shall be required to

be withheld pursuant to any applicable law or regulation.

 

          (e) The Executive's or the Company's failure to insist upon strict

compliance with any provision of this Agreement or the failure to assert any

right the Executive or the Company may have hereunder, including, without

limitation, the right of the Executive to terminate employment for Good Reason

pursuant to Section 5(c) of this Agreement, shall not be deemed to be a waiver

of such provision or right or any other provision or right of this Agreement.

 

<PAGE>

 

 

          (f) The Executive and the Company acknowledge that, except as may

otherwise be provided under any other written agreement between the Executive

and the Company, the employment of the Executive by the Company is "at will"

and, subject to Section 1(a) hereof, prior to the Effective Date and after the

third anniversary of the Effective Date, the Executive's employment and/or this

Agreement may be terminated by either the Executive or the Company at any time

prior to the Effective Date, in which case the Executive shall have no further

rights under this Agreement. From and after the Effective Date and until the

third anniversary of the Effective Date, this Agreement shall supersede any

other agreement between the parties with respect to the subject matter hereof.

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand

and, pursuant to the authorization from its Board of Directors, the Company has

caused these presents to be executed in its name on its behalf, all as of the

day and year first above written.

 

 

                                          /s/ Robert P.van der Merwe

                                         ----------------------------

                                             Robert P. van der Merwe

 

 

                                         PAXAR CORPORATION

 

 

                                         By: /s/ Leo Benatar

                                         ----------------------------

                                           Title: Director

 

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AMENDMENT NO 1 to the CHANGE OF CONTROL AGREEMENT, dated as of April 25, 2005 (the “Agreement”) by and between PAXAR CORPORATION (the “Company”) and ROBERT P. VAN DER MERWE (the “Executive”).

 

WHEREAS, the Company and the Executive have entered into the Agreement; and

 

WHEREAS, the Company and the Executive mutually desire to amend the Agreement on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained in the Agreement, as amended hereby, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby amend the Agreement as follows:

 

1.    Section 6(a)(i)B. is hereby amended by deleting “2.99” therefrom and substituting “2” therefor.

 

2.    Section 9 is hereby deleted in its entirety and the following substituted therefor:

 

9.    GROSS UP.

 

(a) If it shall be determined that any benefit provided to the Executive or payment or distribution by or for the account of the Company or its affiliates to or for the benefit of the Executive, whether provided, paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, collectively, the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of the Excise Tax and all other income, employment, excise and other taxes that are imposed on the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment (the “Residual Amount”) equal to the Excise Tax imposed upon the Payments; provided, however, that in no event shall the amount of the Residual Amount exceed $2,000,000.

 

(b) All determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made on or before the consummation of a transaction giving rise to the imposition of an Excise Tax by the Company's independent, certified public accounting firm (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that additional Gross-Up Payments shall be required to be made to compensate the Executive for amounts of Excise Tax later determined to be due (an "Underpayment"). If the Executive is subsequently required to make a payment of any Excise Tax and the Executive has not theretofore been paid the maximum Gross-Up Payment permitted by Section 9(a), the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive but only to the extent such Underpayment (together with all earlier Gross-Up Payments made to the Executive) does not exceed the maximum Gross-Up Payment permitted by Section 9(a).

 

 

 


 

 

IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be executed this 22nd day of March, 2007.

 

 

 

PAXAR CORPORATION 

 

 

 

 

 

 

 

/s/ David E. McKinney 

 

 

 

Its” 

 

 

 

 

 

 

 

/s/ Robert P. van der Merwe 

 

 

 

Robert P. van der Merwe 

 

 

 

 


 

 

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