Document:

EMPLOYMENT AGREEMENT
                                    BETWEEN
                                  JOHN DAVIES
                                      AND
                            CHECKPOINT SYSTEMS, INC.

     THIS  AGREEMENT is made as of the 20th day of March,  2001,  by and between
CHECKPOINT SYSTEMS,  INC. a Pennsylvania  corporation  ("CSI"),  and John Davies
("Executive").

                                   BACKGROUND

     CSI is involved in providing  integrated  security and safety solutions for
retail,  industrial and institutional  applications worldwide, both directly and
through its affiliates.

     Executive has agreed to accept  employment  with CSI as its Vice President,
Research and Development and has agreed to furnish his skills to CSI and fulfill
the duties of the  aforementioned  position as outlined in Exhibit "A", attached
hereto and made a part hereof, on the terms and conditions of this Agreement.

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

     1. Employment and Term. CSI hereby employs Executive as its Vice President,
Research  and  Development.  Executive  agrees  to serve  CSI in such  capacity,
subject to the terms and  conditions  of this  Agreement,  for a term of two (2)
calendar years, commencing on the date hereof (the "Term").

     2. Duties.

     A.  During the Term,  Executive  shall use his best  efforts to perform all
duties  required in furtherance of his position as outlined in Exhibit "A" or as
are assigned to him from time to time by the Executive Vice President of CSI.\

     B.  Executive  shall  diligently  and  faithfully  devote his entire  time,
energy,  skill,  and best  efforts to perform his duties  under this  Agreement.
Executive shall conduct himself at all times so as to advance the best interests
of CSI,  and shall not  undertake  or engage in any other  business  activity or
continue or assume any other business  affiliations  which conflict or interfere
with the performance of his services hereunder without the prior written consent
of the Chief Executive Officer of CSI.

     3. Compensation.

     CSI  shall  pay  Executive  and  Executive   shall  accept,   as  his  base
compensation for all services rendered to CSI pursuant hereto:

     A.  During  the Term,  an annual  base  salary of $. (the  "Base  Salary"),
payable at regular  intervals in accordance with CSI's normal payroll  practice,
which Base Salary  shall be  adjusted as of January 1st during the Term  hereof,
effective as of the aforesaid date. The amount of such adjustment,  while in the
discretion of the Chief Executive Officer shall reflect Executive's performance;
and

     B. In addition to the Base Salary payable to Executive under  Subsection 3A
above, upon achieving the certain goals and objectives as defined in CSI's Bonus
Pool Plan,  attached  hereto as Exhibit B, an incentive bonus ("Bonus") shall be
paid for each year of the Term in  accordance  with the terms of said Bonus Pool
Plan,  which Bonus Pool Plan may be amended or revoked by CSI at any time during
the term hereof.

     4. Fringe Benefits and Other Compensation.

     A.  During the Term,  Executive  shall be entitled  to  participate  in and
receive the program of fringe benefits applicable to all employees, subject only
to Executive's meeting or satisfying the eligibility  requirements and standards
therefor with regard to health,  life and disability  insurance  benefits.  Said
program of fringe  benefits  may be amended or revoked by CSI at any time during
the term hereof.

     5. Termination.

     A.  Executive's  employment  and  rights to  compensation  hereunder  shall
terminate  immediately  if Executive  voluntarily  leaves the employment of CSI,
except that CSI shall have the  obligation to pay Executive  such portion of his
Base Salary  provided for in  Subsection  3A hereof as may be accrued but unpaid
(including vacation pay) on the date Executive voluntarily leaves the employment
of CSI.  Executive  shall have no right to receive any Bonus  payments that have
accrued and are payable if Executive  voluntarily  leaves the employment of CSI,
it being the  understanding  of the parties  that in this event,  the amount and
payment of any  accrued  Bonus shall be in the sole  discretion  of the Board of
Directors of CSI. In the event that Executive  voluntarily leaves the employment
of CSI, he shall provide at least thirty (30) days written notice.

     B. CSI may upon  written  notice to Executive  giving the reasons  therefor
terminate  Executive's  employment and his rights to compensation  hereunder for
cause.  As used herein,  the term "cause"  shall  include and be limited to, the
following:  conviction of Executive  for any felony,  fraud or  embezzlement  or
crime of moral turpitude; being held liable by a court of competent jurisdiction
for sexual harrassment in violation of applicable federal,  state or local laws;
controlled  substance abuse,  alcoholism or drug addiction which interferes with
or affects Executive's responsibilities to CSI or which reflects negatively upon
the integrity or reputation of CSI; or Executive's breach of any of the material
covenants  contained in this Agreement which breach is not cured within ten (10)
days of the receipt of written  notice  thereof by  Executive.  If  Executive is
terminated  for cause as provided  above,  Executive's  employment and rights to
compensation  hereunder  shall  terminate  immediately  upon  receipt of written
notice except that CSI shall have the  obligation to pay Executive  such portion
of his Base  Salary as may be accrued but unpaid on the date his  employment  is
terminated.  Executive  shall have no right to receive any Bonus  payments  that
have accrued and are payable if Executive  is  terminated  for cause as provided
above.

     C. If Executive is  terminated  by CSI during the Term hereof,  for reasons
other than those  provided in  Subsections  5A or 5B above,  and  provided  that
Executive is not in violation of the  provisions of Section 6 hereof,  Executive
shall be  entitled to receive  severance  pay for a period of twelve (12) months
thereafter  consisting of payment of one hundred  percent  (100%) of Executive's
monthly Base Salary payable at regular intervals in accordance with CSI's normal
payroll  practices,  as well as any Bonus  payments that are accrued and payable
through  the date of such  termination,  and  continuation  of health  insurance
benefits contemporaneous with the severance pay.

     D.  Executive  shall  not  be  considered  to  have  voluntarily  left  his
employment  within  the  meaning  of  Section  5A if he  leaves  for  any of the
following reasons:

     (i) The assignment of the Executive to any duties substantially
inconsistent with his position, duties, responsibilities or status with CSI as
defined herein or a substantial reduction of the aforesaid duties or
responsibilities;

     (ii) In the event of a "Change in Control" as defined  herein,  any failure
of CSI to obtain the  assumption of the  obligation to perform this Agreement as
contemplated. For purposes of this Agreement, a "Change in Control" of CSI shall
be deemed to have occurred if (a) any person or entity or group  thereof  acting
in concert  (an  "Acquiror")  acquires  from the  shareholders  of CSI  (whether
through a merger,  a  consolidation,  or otherwise) and  possesses,  directly or
indirectly,  the power to elect or  appoint  or  approve  the  appointment  of a
majority  of the Board of  Directors  and does,  in fact,  elect or  appoint  or
approve  the  appointment  of the  majority of the Board;  or (b) such  Acquiror
obtains the right or power to elect a substitute or replacement Board, and does,
in  fact,  exercise  such  right;  or (c) the  shareholders  of CSI  approve  an
agreement  for the sale or  disposition  by CSI of all or  substantially  all of
CSI's assets to an Acquiror;

     E. No  later  than  six (6)  months  prior  to the end of the  Term of this
Agreement, CSI and Executive shall commence negotiations for either an extension
of Term or the entering into of a new  agreement.  In the event that the parties
are unable to agree upon an extension or new agreement, and Executive leaves the
employ of CSI, Executive shall be entitled to receive severance pay equal to his
Base  Salary at the end of the Term,  for a period of nine (9)  months  from the
date he leaves the employ of CSI. If Executive is employed for the full calendar
year, and  employment is terminated for any reason,  other than cause as defined
in Section 5B,  Executive  shall be entitled to receive  payment  from the Bonus
Plan, even if such payment is payable after Executive's employment has ceased.

     F. If Executive is  terminated  by CSI during the Term hereof,  for reasons
other than those provided in Subsections 5A or 5B above, or if this Agreement is
not  renewed,  CSI shall  provide  Executive  outplacement  consulting  services
comparable to those received by management of similar organizations.

     G. If  Executive  becomes  unable to perform  his duties  hereunder  due to
partial or total  disability or incapacity  resulting  from a mental or physical
illness,  injury  or any  similar  cause,  CSI  will  continue  the  payment  of
Executive's total  compensation at his then current rate for a period of six (6)
months following the date Executive is first unable to perform his duties due to
such disability or incapacity.  Thereafter, CSI shall have no obligation for the
Base Salary or other  compensation  payments to Executive during the continuance
of such disability or incapacity,  except that CSI shall pay to Executive, based
upon the portion of the  calendar  year that  Executive  was able to perform his
duties prior to the disability, the pro rata portion of the Bonus that Executive
would have earned if he had remained in the employ of CSI for the full  calendar
year  (payable at such time that  Executive  would have  received  such  Bonus).
Executive shall receive CSI's standard disability coverage.

     H. If Executive dies, all payments hereunder shall continue for a period of
two (2) months after the end of the week in which Executive's death shall occur,
at  which  point  such  payments  shall  cease  and CSI  shall  have no  further
obligations   or   liabilities   hereunder  to   Executive's   estate  or  legal
representative or otherwise,  except that CSI shall pay to Executive's estate or
legal representation, based upon the portion of the calendar year that Executive
was  employed  by CSI prior to his  death,  the  prorated  portion  of the Bonus
Executive would have earned if he had remained in the employ of CSI for the full
calendar  year  (payable at such time that  Executive  would have  received such
Bonus).

     I. CSI's obligation to make payments  hereunder is purely contractual and a
general obligation of CSI and the amounts payable hereunder shall not be held by
CSI in a trust or segregated fund for Employee nor shall Employee have any right
against  CSI or any  director,  officer or  employee  of CSI,  in respect of any
payment hereunder other than as a general creditor of CSI.

     J. Upon  termination of employment,  all vested stock options granted under
the CSI Stock Option Plan (1992) will be treated in accordance with the terms of
the CSI Stock Option Plan (1992).

     6.      Confidentiality and Covenant Not to Compete.

     A.  Executive  covenants  and  agrees  that  he  will  at  all  times  keep
confidential and will not at any time,  except with the prior written consent of
CSI,  directly or indirectly,  communicate or disclose or use for his benefit or
the benefit of any Person (as defined in subsection  9E hereof)  except CSI, any
trade secrets or  confidential  or proprietary  information of CSI or any of its
affiliates  including,  but not limited to, strategic planning documents,  data,
reports,  records,  plans,  policies,  applications,  and other  documents,  and
Executive will also use his best efforts to prevent  unauthorized  disclosure by
others.

     B. Executive agrees not to compete with CSI in any manner whatsoever, as an
employee,  shareholder,  director,  creditor,  joint  venturer,  consultant,  or
otherwise,  or any currently existing or hereinafter created  subsidiary,  joint
venture,  or business line of CSI, at any time during this Agreement,  and for a
period of two years  following the date of termination of employment in the area
constituting the United States, Puerto Rico and Europe.

     C. The  parties  agree  that  any  breach  by  Executive  of the  covenants
contained in this Section 6 will result in  irreparable  injury to CSI for which
money damages could not adequately  compensate CSI, and therefore,  in the event
of any such  breach,  CSI shall be entitled (in addition to any other rights and
remedies which it may have at law or in equity) to have an injunction  issued by
any competent  court of equity  enjoining and restraining  Executive  and/or any
other  Person  involved  therein from  continuing  such  breach.  The  covenants
contained  in this  Section 6 are  independent  of all other  covenants  between
Executive and CSI.

     D. If any portion of the covenants or agreements  contained  herein, or the
application thereof, is construed to be invalid or unenforceable, then the other
portions of such  covenant(s) or agreement(s)  or the application  thereof shall
not be affected and shall be given full force and effect  without  regard to the
invalid or unenforceable portions.

     E.  All  information,  lists,  data,  reports,  records,  plans,  policies,
applications,  and other papers, articles, and materials of any kind relating to
CSI's business and obtained by Executive in the course of his  association  with
CSI,  whether  developed by him or not,  shall be and remain CSI's  property and
will be returned to CSI along with any and all copies  thereof,  at such time as
Executive ceases to be an employee of CSI.

     7. Conflict of Interest.

     A.  Executive  represents  and  warrants  that  he is  not  subject  to any
restrictions  or  prohibitions  whatsoever,  and  has  no  interest  whatsoever,
contractual or otherwise,  which would in any way prevent, restrict or interfere
with his  right  and/or  ability  to  enter  into  this  Agreement  and  perform
hereunder, or which would create a conflict of interest for him or for CSI.

     B. Executive  covenants that,  during the Term, he will disclose to CSI, in
writing,  any and all interests he may have,  whether for profit or compensation
or not,  in any venture or activity  which could  interfere  with his ability to
perform  under this  Agreement  or create a conflict of interest  for him or for
CSI.

     8. Notices.

     All notices,  requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if  delivered  by hand or
mailed,  certified or registered mail,  return receipt  requested,  with postage
prepaid, at the following addresses or to such other address as either party may
designate by like notice:

     A. If to Executive, to:

                                    John Davies

     B. If to CSI, to:

                                    Checkpoint Systems, Inc.
                                    101 Wolf Drive
                                    Thorofare, NJ  08086
                                    Attn: Chairman of the Board of Directors

     C. In all cases, copies to:

                                    Stradley, Ronon, Stevens & Young
                                    2600 One Commerce Square
                                    Philadelphia, Pennsylvania 19103
                                    Attn:  William R. Sasso, Esquire

     9. Additional Provisions.

     A. This Agreement shall inure to the benefit of and be binding upon CSI and
its successors and assigns and Executive,  his heirs, executors,  administrators
and legal representatives.

     B. This Agreement constitutes the entire agreement between the parties with
respect to the  subject  matter  hereof,  and  cannot be  changed or  terminated
orally. This Agreement supersedes all prior and contemporaneous  written or oral
agreements  between  the  parties  relating to the  subject  matter  hereof.  No
modification or waiver of any of the provisions hereof shall be effective unless
in writing and signed by the party against whom it is sought to be enforced.

     C. If any provision of this  Agreement  shall be or shall become illegal or
unenforceable  in whole or in part,  for any reason  whatsoever,  the  remaining
provisions shall nevertheless be deemed valid, binding and subsisting.

     D. No failure on the part of any party  hereto to exercise  and no delay in
exercising  any  right,  power or remedy  hereunder  shall  operate  as a waiver
thereof,  nor shall any single or partial exercise of any right, power or remedy
hereunder  preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.

     E.  "Person" as used herein  shall mean a natural  person,  joint  venture,
corporation,  partnership,  trust,  estate,  sole  proprietorship,  governmental
agency or authority or other juridical entity.

     F.  This  is a  personal  service  contract  and  may  not be  assigned  by
Executive.  This  Agreement  may not be assigned by CSI to any  affiliate of CSI
which accedes to or otherwise carries on the business of CSI, whether by merger,
liquidation,  consolidation or otherwise, unless the duties and responsibilities
of Executive remain substantially unchanged after such assignment.

     G. The  headings  of the  several  sections  of this  Agreement  have  been
inserted  for  convenience  of  reference  only and shall in no way  restrict or
modify any of the terms or provisions hereof.

     H. This  Agreement  shall be  governed  by and  construed  and  enforced in
accordance  with the laws of the  State of New  Jersey,  without  regard  to its
conflicts of laws principles. Subject to the provisions of Subsection 6C hereof,
all unresolved claims, demands or disputes between Executive and CSI arising out
of or  relating  to this  Agreement,  or the  parties'  respective  performances
hereunder,  shall be  subject  to binding  arbitration  in the local  Chapter in
Philadelphia,  Pennsylvania  pursuant to the Rules of the  American  Arbitration
Association.  The prevailing  party shall be entitled to  reimbursement  for all
costs, including reasonable attorneys' fees, associated with such arbitration.

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
on the date first above written.

ATTEST:                        CHECKPOINT SYSTEMS, INC.

_________________________  By:________________________________
                                  Michael E. Smith

WITNESS:

_________________________  By: ________________________________
                                  John DaviesFIRST AMENDMENT TO
                              EMPLOYMENT AGREEMENT

         This First Amendment to Employment Agreement is made as of this 4th day
of March, 2002, by and between Checkpoint Systems, Inc. ("CSI") and John Davies
("Executive").

         WHEREAS, CSI and Executive are parties to an Employment Agreement
dated March 20, 2001 ("Agreement"); and

         WHEREAS, the parties wish to amend such Agreement as set forth herein;

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

          1.   Article 1.  Employment and Term is hereby amended by changing the
               Executive's title to Executive Vice President.

          2.   Article 3.A  Compensation is hereby amended by changing the "Base
               Salary" to $250,000.

          3.   Article 5.  Termination is hereby amended by changing  Article 5C
               and 5E so that the twelve  (12) month  period  contained  therein
               shall now be read as eighteen (18) months.

          4.   All other terms of the Agreement shall remain the same.

         IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed as of the date first above written.

           CHECKPOINT SYSTEMS, INC.

         BY:  /s/ Michael E. Smith    BY:  /s/ John Davies, Jr.
              --------------------         --------------------
              President and Chief           John Davies
              Executive Officer

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