Cto Employment Agreement

Exhibit 10.20


EMPLOYMENT AGREEMENT


This Employment Agreement (this "Agreement") is made as of the 23rd day of April, 1999, by and between Foilmark, Inc., a Delaware corporation (the "Company"), Foilmark Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company ("Foilmark Sub"), and Arthur Karmel (the "Employee").


RECITALS


WHEREAS, the Company and Employee have entered into that certain Employment Agreement between HoloPak Technologies, Inc., a Delaware corporation ("HoloPak"), and the Employee, dated as of June 29, 1998, as amended (the "Original Employment Agreement");


WHEREAS, HoloPak, the Company and Foilmark Sub are parties to the Agreement and Plan of Merger, dated as of November 17, 1998 (the "Merger Agreement"), whereby HoloPak will be merged with and into Foilmark Sub (the "Merger"), with Foilmark Sub as the surviving corporation in the Merger (the "Surviving Corporation");


WHEREAS, Employee and HoloPak mutually agree that the Original Employment Agreement shall terminate immediately prior to the effective time of the Merger, and concurrently that the Company shall employ Employee as of the effective time of the Merger; and


WHEREAS, as a condition precedent to the Merger Agreement, the Company has agreed to employ Employee under the terms and conditions set forth below.


WITNESSETH:


NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto, each intending to be legally bound hereby, agree as follows:


1. EMPLOYMENT.


The Company hereby employs the Employee as Chief Accounting Officer, New Jersey Operations, of the Surviving Corporation, or another comparable senior executive position of the Company with such title as the Board of Directors of the Company shall determine, and Employee hereby accepts such employment. During the term of employment under this Agreement (the "Employment Term"), the Employee shall perform such duties as are requested from time to time by the Board of Directors of the Company or the Chief Executive Officer of the Company, which duties shall be consistent with the duties of a chief financial officer of a corporation or a subsidiary of a corporation; PROVIDED, that the Employee will not be required to perform such duties outside a radius of thirty (30) miles of East Brunswick, New Jersey; PROVIDED, FURTHER, that Employee may infrequently be required to travel to Newburyport, Massachusetts as requested by the Board of Directors or the Chief Executive Officer of the Company.


2. PERFORMANCE.


During the Employment Term, the Employee shall devote his entire business efforts to the performance of his duties hereunder.


3. TERM.


Unless otherwise terminated in accordance with Sections 5 or 6 hereof, the Employment Term shall be for an initial term of one and one-half years commencing on the date hereof and continuing thereafter for successive one-year renewal terms, unless the Company or Employee shall deliver, no later than ninety (90) days prior to the expiration of the Employment Term or any such additional one year period, written notice to the other terminating this Agreement effective as of the end of the Employment Term or the then current additional one year period.


4. COMPENSATION FOR EMPLOYMENT.


(a) The basic annual compensation of the Employee for his employment services to the Company and to all of its affiliated companies during the Employment Term shall be $100,000.00 (the "Salary"), which the Company shall pay to the Employee in accordance with its normal payroll policy. These are the initial terms of annual compensation. The amount of Salary may change and compensation will be reflected.


(b) During the Employment Term, the Company shall also provide the Employee with those fringe benefits that are specified on Exhibit "A" hereto (the "Fringe Benefits"). The Company shall also reimburse the Employee for any reasonable business expenses incurred on the Company's behalf in connection with the performance of the services during the Employment Term.


(c) (i) HoloPak has granted to the Employee under its Non-Qualified Stock Option Plan (the "HoloPak Plan"), options to purchase shares of Common Stock ("Options") for 5,000 shares of HoloPak Common Stock at an exercise price of $2.5875 per share. The Options will vest and become exercisable in two equal installments on the first two (2) anniversaries of the Employment Agreement. Pursuant to and in accordance with Section 3.4 of the Merger Agreement, at the effective time of the Merger, the Options shall be converted into and become rights with respect to shares of common stock of the Company, and the Company shall assume each Option.


(ii) As of the effective date of the Merger, the Company shall grant to the Employee under its 1995 Amended and Restated Employee Stock Option Plan (the "Plan") options ("Options") to purchase 6,000 shares of Company common stock, $.01 par value, at an exercise price and pursuant to the vesting schedule set forth in the Plan.


(iii) The Employee will be an eligible participant in the Plan administered by the Company and, therefore, will be eligible for future grants of stock options in addition to the Options referred to above. The administrator of the Plan, which is currently the Compensation Committee of the Board of Directors of the Company, will determine from time to time whether any such additional Options shall be granted to the Employee and the exercise price vesting schedule and other terms of any such additional options that may be granted.


(d) The Company's commitment to grant additional Options is subject to the Company's obtaining approval of such items by the Board of Directors of the Company.


5. TERMINATION WITHOUT COMPENSATION.


(a) PARTIAL OR TOTAL DISABILITY. If the Employee is unable to perform his duties and responsibilities hereunder to the full extent required hereunder by reason of non-employment related illness, injury or incapacity for six months (during which time he shall continue to be compensated hereunder), the Company may terminate the Employment Term, and the Company shall not have any further liability or obligation to the Employee hereunder except for any unpaid Salary, unpaid bonus, adjusted pro rata based upon the portion of such bonus period in which the Employee was actually employed by the company hereunder and any Fringe Benefits accrued to the date of termination, provided, however, that Employee reserves any rights that he may have against the Company with respect to any claims for damages and/or benefits under any Workers' Compensation Act, or otherwise, arising out of injuries, illness or incapacity incurred as a result of his employment with the Company (an "Employment Injury"). In the event of any dispute under this Section 5(a), the Employee shall submit to a physical examination by a licensed physician mutually satisfactory to the Company and the Employee, the cost of such examination to be paid by the Company, and the determination of such physician shall be determinative. If, after termination due to disability as provided herein, the Employee obtains, at his sole expense, medical certification from a licensed physician reasonably satisfactory to the Company that such disability has ended, the Company shall offer to employ the Employee pursuant to the terms of this Agreement for the remainder of the initial term or any renewal term in effect at the time of termination, except that the Company shall not be required to reemploy the Employee at the same officer position if the Company shall have elected another person to such position during the period of the Employee's disability and such other person continues in such position at the time of the Employee's return to employment.


(b) DEATH. If the Employees dies, this Employment Agreement (except for the provisions of Sections 6, 10 and 11 hereof) shall terminate, and thereafter the Company shall not have any further liability or obligation to the Employee, his executors, administrator, heirs, assigns or any other person claiming under or through him except for unpaid Salary, any unpaid bonus earned by Employee for the bonus period in which Employee's death occurs adjusted pro rata based upon the portion of such bonus period in which the Employee was actually employed by the Company hereunder and any Fringe Benefits accrued to the date of his death.


(c) CAUSE. The Company may terminate the Employment ...