Exhibit 10.37
(PORTOLA LOGO) [l31029al3102901.gif]
March 3, 2008
John G. LaBahn
204 Edinburgh Court
Naperville, Illinois 60540
Dear John:
It is a pleasure to confirm as set forth herein our employment agreement with
you for the position of Senior Vice President and Chief Financial Officer
reporting to me as President and CEO. This agreement is documented below and is
contingent upon having a medical examination to determine if you can perform the
essential functions of this position with or without reasonable accommodation.
Included in the medical examination will be a drug screen. You will need to
present a photo ID at the time of your medical examination. Subject to the
medical examination, your employment will start on March 4, 2008.
Portola Packaging, Inc. is an at-will employer and this agreement does not
constitute and is not to be taken as a change in your status as an at-will
employee; however, if Portola terminates your employment for other than “Cause”
or if you resign for “Good Reason,” you will receive the compensation set forth
below under Severance Benefits. “Cause” for purposes of this agreement shall
mean(1) a material breach of this agreement by you, but not through bad judgment
or negligence, (2) an act or acts of dishonesty on your part resulting or
intending to result directly or indirectly in gain or personal enrichment to
which you were not legally entitled at the expense of the company, (3) your
habitual neglect of duties you are required to perform under this agreement or
(4) your committing fraud against the company. “Good Reason” for purposes of
this agreement shall mean, without your prior written consent, any one of the
following events: (a) any adverse change in any material respect to your duties,
authority, title or reporting relationships from those in effect on the
commencement of employment; (b) the assignment of duties to you that are
inconsistent with your position as Senior Vice President and Chief Financial
Officer; (c) any reduction of the salary as in effect from time to time or the
failure by the company to include you on similar terms and conditions in the
employee benefits plans or perquisites afforded to peer-level executives of the
company; or (d) the company’s failure to pay your salary, employee benefits or
perquisites in accordance with the company’s regular payment practices. If a
“Good Reason” event described above occurs, you shall be obligated to give to me
as President and CEO written notice of such event within thirty (30) days of
your having knowledge of such event and the company shall have fifteen (15) days
following receipt of such written notice to cure such event to your reasonable
satisfaction.
Salary
The starting salary will be $10,576.92 bi-weekly ($275,000 annualized). A
performance review will be conducted at least annually. Your salary, as in
effect from time to time, cannot be reduced.
Variable Compensation
Portola Packaging, Inc. total compensation package also offers you the
opportunity to increase your earnings based on the performance of the company
with an Incentive Compensation plan.

 

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Under this plan, your target is 30% of annual salary earned to a maximum of 60%.
For fiscal year 2008 which ends August 31, we will guarantee you payment at a
minimum payment of $41,000.
Equity
You will be issued 300,000 stock option shares with a vesting schedule as
follows: 100,000 shares on each August 31 beginning in 2008 until fully vested
or upon a Change of Control of Portola Packaging, Inc. when any remaining
unvested shares will immediately vest. “Change of Control” for purposes of this
agreement shall have the same definition as such phrase is defined in your
Portola Packaging, Inc. Indemnification Agreement. You will also be eligible for
additional future stock option grants, but at the sole discretion of the Board
of Directors of the company.
The issue price of these options will be at the current fair market value, which
will be calculated within no more than 90 days of your date of hire.
Health and Welfare Benefits
Portola Packaging, Inc. offers a flexible comprehensive benefits package that
includes paid vacation and holidays, health care, dental, vision, Rx, flexible
spending accounts, short/long term disability, life insurance and 401-K savings
plan with company match.
For vacation time, you will be eligible for Portola’s Management R&R program.
Effective upon your employment, you are eligible to take reasonable time off
throughout the year. While you are still required to coordinate the scheduling
with your supervisor, there is no specific assignment of vacation days, nor
accrual of vacation time.
Should you become disabled, our policy provides you with full salary
continuation for up to six months, at which time you would be covered under our
company paid long-term disability plan, which provides for 60% of your pay to a
maximum of $15,000/month.
Liability
You will be covered by insurance under the company Director and Officer
Liability Insurance Policy which covers all company officers and directors. In
addition, you will be covered by the indemnity agreement attached as Exhibit A.
Confidentiality and Non-Compete Agreements
You are required as part of this agreement and in consideration, in part, of
your employment and compensation set forth herein to sign the confidentiality
and non-compete agreement attached as Exhibit B.
Severance Benefits
You will be eligible for severance payments of twelve months of salary, payable
as a lump sum, should your employment be terminated by the company for any
reason other than Cause or if you should resign for Good Reason. You would also
be given the opportunity to purchase COBRA benefits coverage for up to 18 months
from the date of termination of employment. Election to purchase COBRA coverage
is voluntary. For the first 180 days of the COBRA coverage following
termination, the COBRA premium will be a shared cost between you, the employee
(50%) and the company (50%). Outplacement benefits by an outplacement firm which
you select will also be provided if your employment is terminated by the company
for other than Cause or if you should resign for Good Reason up to a maximum of
$10,000. If you terminate your employment for your

 

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own convenience at any time other than for Good Reason, the company will not be
obligated to pay you any amount of severance.
Arbitration
Any disputes under this employment agreement shall be resolved by binding
arbitration in Chicago, Illinois by a single arbitrator under the National
Rules For The Resolution Of Employment Disputes of the American Arbitration
Association. The arbitrator shall have the discretionary authority to award
arbitrator’s fees and expenses, costs of arbitration, and reasonable attorney’s
fees and expenses to the prevailing party.
A benefits package has been previously provided to you. Your benefits selections
will be made upon your employment.
John, we look forward to you joining the Portola team.
Sincerely,
Brian Bauerbach
President and Chief Executive Officer
Portola Packaging, Inc.
Signed and Agreed to:

          /s/ John G. LaBahn       John G. LaBahn