Exhibit 10.1

CSS Industries, Inc.

1845 Walnut Street

Suite 800

Philadelphia, PA 19103-4755

(215) 569-9900

FAX (215) 569-9979

December 5, 2012

Mr. Jack Farber

3056 Miro Drive North

Palm Beach Gardens, FL 33410

 

  Re: Employment Terms as Chairman of the Board of Directors of CSS Industries,
Inc.

Dear Jack:

This agreement (the “Agreement”) sets forth the terms and conditions of your
continued employment with CSS Industries, Inc. (the “Company”) as the Chairman
of the Board of Directors (“Board”), which Agreement shall become effective as
of the date hereof and shall continue until the last day of the Term (as defined
below).

 

1. Position, Term, Duties. You shall continue to be employed as an employee of
the Company in the position of Chairman of the Board until July 31, 2014, unless
your employment with the Company is terminated earlier (i) by you or the Company
or (ii) you are not elected to the Board by the Company’s stockholders while
this Agreement is in effect (the period of your employment with the Company
under this Agreement is hereinafter referred to as the “Term”). Unless
terminated earlier, the Term and your employment with the Company shall
automatically terminate on July 31, 2014. During the Term, you agree to use your
best efforts to perform your duties as Chairman of the Board faithfully, to
devote substantially all of your working time to the business of the Company,
and while you remain employed by the Company, you will not engage in any other
business activity that is in conflict with your duties and obligations to the
Company.

 

2. Compensation. During the Term, you shall continue to receive an annual base
salary that is equal to $400,000, less statutorily required and employee
authorized deductions, payable in accordance with the Company’s normal payroll
practices (“Base Salary”).

 

3. General Benefits. During the Term, you shall continue to be entitled to
participate in all employee pension and welfare benefit plans and programs made
available from time to time to the Company’s senior management employees.

 

4. Reimbursement of Expenses. During the Term, the Company shall reimburse you
for all reasonable and necessary expenses that are reimbursable under the
Company’s reimbursement policies and which are incurred by you in carrying out
your duties for the Company; provided that you present appropriate documentation
in accordance with the Company’s reimbursement policies.

 

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5. Termination.

 

  (a) Termination of Employment. Your employment with the Company may terminate
at any time for any reason, with or without “Cause,” (as such term is defined
below) with or without notice, and shall terminate immediately upon your death.
Additionally, your employment shall terminate automatically on July 31, 2014,
and shall terminate automatically prior to such time if the Company’s
stockholders do not re-elect you as a member of the Board. Upon your termination
of employment, you shall not be entitled to any severance pay or benefits except
as specifically provided in this Section 5.

 

  (b) Severance Payments. Subject to your execution of the Release (as defined
below) within the requisite period and non-revocation of such Release as set
forth in Section 5(e), if either (i) you remain continuously employed by the
Company as the Chairman of the Board through July 31, 2014 and your employment
with the Company terminates automatically on July 31, 2014 or (ii) your
employment is terminated by the Company for any reason prior to July 31, 2014,
including by reason of your not being re-elected as a member of the Board by the
Company’s stockholders, but other than on account of death or for Cause, the
Company shall pay you a severance benefit equal to one year of your Base Salary
(the “Severance Payment”), which Severance Payment shall be paid to you in
substantially equal installments over the twelve (12) month period following
your last day of employment with the Company in accordance with the Company’s
regular salary payment schedule. Unless delay is required pursuant to
Section 19(b) below and provided you execute and do not revoke the Release (as
defined below), such Severance Payment shall commence to be paid to you within
sixty (60) days following your termination of employment, provided that with
respect to any portion of the Severance Payment that constitutes deferred
compensation subject to the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended (“Section 409A”), if such sixty (60) day period begins
in one taxable year and ends in a second taxable year, such portion of the
Severance Payment will be paid to you in the second taxable year.

 

  (c) Medical Benefits. Subject to your execution of the Release within the
requisite period and non-revocation of such Release as set forth in
Section 5(e), if either (i) you remain continuously employed by the Company as
the Chairman of the Board through July 31, 2014 and your employment with the
Company terminates automatically on July 31, 2014 or (ii) your employment is
terminated by the Company for any reason prior to July 31, 2014, including by
reason of your not being re-elected as a member of the Board by the Company’s
stockholders, but other than on account of termination for Cause, the Company
shall provide you and your spouse, for as long as each of you shall live, with
medical insurance coverage under a medical insurance program which provides
medical coverage on terms and conditions and at such levels that you (or your
spouse, in the event of your earlier death) and the Company mutually agree,
provided that in no event shall such coverage be substantially greater or less
than the coverage you have in effect with the Company on the date immediately
prior to your last day of employment with the Company (the “Medical Benefits”);
provided further, in order for you (and your spouse) to receive such Medical
Benefits, you (or your spouse, in the event of your earlier death), shall pay
the monthly premium for such Medical Benefits (a written schedule of which the
Company will provide to you (or your spouse, in the event of your earlier death)
on an annual basis) and, unless delay is required pursuant to Section 19(b)
below and subject to the last sentence of this Section 5(c), the Company shall
pay you, within ten (10) days following the due date of such premiums, the
amount of such monthly premium, less the amount that you have been required to
pay for such coverage if you were employed by the Company at such time, plus an
additional amount equal to the federal, state and local income and payroll taxes
that you incur on such monthly payment. Your (and your spouse’s) entitlement to
the Medical Benefit and monthly payment shall continue until you (or your
spouse, in the event of your earlier death), do not pay the full monthly premium
for such Medical Benefits (and after the Company or the then applicable medical
program provider has provided you (or your spouse, in the event of your earlier
death) with at least thirty (30) days written notice that you (or your spouse,
in the event of your earlier death) have failed to pay such monthly premium), in
which case you (and your spouse) shall have no further rights to such Medical
Benefits and payments pursuant to this Section 5(c). Unless delay is required
pursuant to Section 19(b) below and provided you execute and do not revoke the
Release, the monthly payment from the Company provided in the first sentence
shall commence to be paid to you within sixty (60) days following your
termination of employment, provided that with respect to any portion of such
payment that constitutes deferred compensation subject to the requirements of
Section 409A, if such sixty (60) day period begins in one taxable year and ends
in a second taxable year, such portion of such monthly payment will be paid to
you in the second taxable year.

 

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  (d) Other Terminations. If your employment with the Company terminates on
account of your death, you will not be entitled to receive any of the Severance
Payments on account of such termination of employment; provided, however that
your spouse will continue to be entitled to receive the Medical Benefits
described in Section 5(c) and the Section 5(e) requirement of a signed Release
will be accordingly waived. If your employment with the Company terminates for
Cause, you will not be entitled to receive any Severance Payments, and neither
you nor your spouse will be entitled to receive the Medical Benefits described
in Section 5(c), on account of such termination of employment.

 

  (e) Release. Receipt of the Severance Payments and Medical Benefits (including
the monthly payment described in Section 5(c)), if any, is contingent on your
signing, and not revoking, within the time period provided in the Company’s
general release of claims, with such modifications made by you as the Company
deems appropriate for your individual situation, which release includes a
release against the Company and its affiliates and its and their officers,
directors, shareholders, employees, agents, and representatives, and each of
their predecessors, successors, and assigns, from all claims and liabilities
relating to your employment and termination of employment (the “Release”). The
Board or its delegate shall provide the form of Release to you within ten
(10) days following your termination of employment.

 

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  (f) Definition of Termination For “Cause”. For purposes of this Agreement,
termination for “Cause” means termination resulting from your failure to comply
with any lawful directive of the Board within the normal scope of your duties as
Chairman, your failure to comply with the Company’s Code of Ethics, your
conviction of a felony or of any moral turpitude crime, or your willful or
intentional engagement in conduct injurious to the Company or any of its
affiliates.

 

6. Severance Plan. You and the Company agree that this Agreement shall supersede
the CSS Industries, Inc. Severance Pay Plan for Senior Management and any other
Company severance plan, program, or policy (collectively the “Severance
Arrangements”), and you shall not be eligible to participate in, or receive any
payments or benefits under, any of the Severance Arrangements.

 

7. Employment Rights. Nothing expressed or implied in this Agreement will create
any right or duty on the part of the Company or you to have you remain in the
employment of the Company.

 

8. Withholding. All payments under this Agreement shall be made subject to
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state, and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation. You
shall be solely responsible for all federal, state, and local taxes due with
respect to any payment received under this Agreement.

 

9. Entire Agreement. This Agreement supersedes all previous and contemporaneous
communications, agreements, and understandings, whether oral or written, between
you and the Company and constitutes the sole and entire agreement between you
and the Company pertaining to the subject matter hereof. In the event of a
dispute arising out of or relating to this Agreement, it is agreed by the
parties that it is the product of substantial negotiation and input from each
party, and it shall be interpreted as having been prepared jointly by the
parties and no inferences or presumptions shall be drawn against the drafter by
any court, arbitrator, or other person or entity presiding over such dispute.
This Agreement shall not be amended, modified, or changed other than by express
written agreement by you and the Company.

 

10. Governing Law. The terms of this Agreement and any action arising
thereunder, shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania, excluding its choice of law rules.

 

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11. Survivorship. The respective rights and obligations of the parties under
this Agreement shall survive any termination of your employment to the extent
necessary to the intended preservation of such rights and obligations.

 

12. Severability and Waivers. If any of the obligations in this Agreement are
determined by any court of competent jurisdiction or other competent adjudicator
to be unenforceable by reason of their being too extensive in any respect, then
the parties agree that the court or adjudicator shall interpret and modify such
obligation(s) to be effective to the maximum extent in all respects as to which
it/they may be enforceable and then shall enforce such obligation(s) as
modified. If modification is not possible, then the parties agree that, because
each of the obligations in this Agreement is a separate and independent
covenant, any unenforceable obligation shall be severed and all remaining
obligations shall be enforced. No waiver or failure to enforce any or all rights
under this Agreement by either party on any occasion shall constitute waiver of
that party’s right to assert the same or any other rights on that or any other
occasion.

 

13. Notice. All notices required or allowed by this Agreement shall be
sufficient if in writing and if delivered in person or sent by registered or
certified mail, in the case of you to your residence, at the address it has in
its files, and, in the case of the Company, to its corporate headquarters,
attention President and Chief Executive Officer, with a copy to the Company’s
General Counsel.

 

14. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute but
one of the same instrument.

 

15. Successors. This Agreement is binding upon the parties, and their heirs,
executors, administrators, successors, and assigns. Neither party may assign or
delegate any of its respective duties or responsibilities under this Agreement
without the prior written consent of the other party.

 

16. Construction. The language of all parts of this Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or
against either party.

 

17. Arbitration. Should you or the Company have any dispute as to any aspect of
this Agreement, or arising out of, or related or connected with your employment,
termination, compensation, or benefits, or should you allege that the Company
has violated any of your rights under state or federal employment or civil
rights laws or any other laws, statutes, or constitutional provisions, the
parties will submit any such dispute, to the extent permissible by applicable
laws, to final and binding arbitration pursuant to the Employment Arbitration
Rules of the American Arbitration Association (www.adr.org) before a neutral
arbitrator selected from the list of Employment Arbitrators. UNLESS OTHERWISE
INVALIDATED BY APPLICABLE LAWS, THE PARTIES EXPRESSLY AGREE THAT SUCH
ARBITRATION SHALL BE THE EXCLUSIVE REMEDY FOR ANY DISPUTE INVOLVING THIS
AGREEMENT, YOUR EMPLOYMENT, TERMINATION, COMPENSATION, OR BENEFITS OR THE
VIOLATION OF YOUR CIVIL RIGHTS, AND HEREBY EXPRESSLY WAIVE ANY RIGHT THEY HAVE
OR MAY HAVE TO A COURT TRIAL OR A JURY TRIAL OF ANY SUCH DISPUTE. It is further
agreed by the parties that venue for any arbitration or other legal proceedings
shall be in Philadelphia, Pennsylvania.

 

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18. Non-Competition. During your employment with the Company, and for a period
of one (1) year thereafter, you will not, without the prior written consent of
the Human Resources Committee of the Board, 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 the Company or
by any of its affiliates during your employment with the Company (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 are therefore not appropriate. The
foregoing restriction shall not be construed to prohibit your ownership of any
class of securities of the Company and 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 ownership of any corporation other than the Company
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. We acknowledge and agree that
if the Company fails to satisfy its material obligations to you under this
Agreement after you have provided the Company with at least thirty (30) days
written notice of such failure, then your obligation to comply with the
non-competition covenant set forth in this Section 18 shall be waived.

You acknowledge that the restrictions contained in this Section 18 are
reasonable and necessary to protect the legitimate interests of the Company and
its affiliates, that the Company would not have entered into this Agreement in
the absence of such restrictions, and that any violation of any provision of
this Section 18 will result in irreparable injury to the Company and its
affiliates. YOU REPRESENT AND ACKNOWLEDGE THAT (i) YOU HAVE BEEN ADVISED BY THE
COMPANY TO CONSULT YOUR OWN LEGAL COUNSEL IN RESPECT OF THIS AGREEMENT,
(ii) THAT YOU HAVE HAD FULL OPPORTUNITY, PRIOR TO EXECUTION OF THIS AGREEMENT,
TO REVIEW THOROUGHLY THIS AGREEMENT WITH YOUR COUNSEL, AND (iii) YOU HAVE READ
AND FULLY UNDERSTAND THE TERMS AND PROVISIONS OF THIS AGREEMENT.

You agree that the Company 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 this
Section 18, which rights shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. In the event that any of the
provisions of this Section 18 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.

 

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You and the Company irrevocably and unconditionally (i) agree that any suit,
action or other legal proceeding arising out of this Section 18, including
without limitation, any action commenced by the Company 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.

You agree that the Company may provide a copy of Section 18 of this 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.

 

19. Section 409A of the Internal Revenue Code.

 

  (a) This Agreement is intended to comply with Section 409A or an exemption
thereto, and payments may only be made under this Agreement upon an event and in
a manner permitted by Section 409A, to the extent applicable. All separation
payments to be made upon a termination of employment that constitute deferred
compensation subject to Section 409A under this Agreement may only be made upon
a “separation from service” under Section 409A. For purposes of Section 409A,
each payment shall be treated as a separate payment and the right to a series of
installment payments under this Agreement shall be treated as a right to a
series of separate payments. In no event may you, directly or indirectly,
designate the calendar year of a payment. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance
with the requirements of Section 409A. No action or failure to act pursuant to
this Section 19 shall subject the Company or any affiliate thereof to any claim,
liability, or expense, and neither the Company nor any affiliate thereof shall
have any obligation to indemnify or otherwise protect you from the obligation to
pay any taxes pursuant to Section 409A.

 

  (b) To the maximum extent permitted under Section 409A, severance benefits
provided under this Agreement that are payable during the “short-term deferral
period” are intended to be exempt from Section 409A under the “short-term
deferral” exception. If at the time of your separation from service, the
Company’s (or any entity required to be aggregated with the Company under
Section 409A) stock is publicly-traded on an established securities market or
otherwise and you are a “specified employee” (as defined in Section 409A and
determined in the sole discretion of the Company, or any successor thereto, in
accordance with the Company’s, or any successor’s, “specified employee”
determination policy), then the Company shall postpone the commencement of
payments that are determined to be deferred compensation subject to Section 409A
that are payable within the six (6) month period following your date of
termination with the Company (or any successor thereto) for six (6) months
following your termination with the Company (or any successor thereto). The
delayed amounts shall be paid in a lump sum to you within thirty (30) days
following the date that is six (6) months following your date of termination
with the Company (or any successor thereto) and any amounts payable after such
six (6) month period shall be paid to you in accordance with the original
schedule. If you die during such six (6) month period and prior to the payment
of the delayed amount, such delayed amount shall be paid to the personal
representative of your estate within sixty (60) days after your death.

 

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If the foregoing is acceptable to you, kindly sign and return to me one copy of
this Agreement and this Agreement shall constitute a binding agreement between
you and the Company.

 

Sincerely yours, CSS Industries, Inc. By:  

/s/ Christopher J. Munyan

  Christopher J. Munyan   President and Chief Executive Officer Date:  
December 5, 2012

REVIEWED, AGREED TO AND ACCEPTED:

 

/s/ Jack Farber

          Jack Farber         Date:   December 5, 2012  

 

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