EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”), effective as of January 19, 2007 (“Effective
Date”), is made and entered into by and between PRESTIGE
BRANDS HOLDINGS, INC.
(the
“Company”) and XXXX
XXXXXX
(“Executive”).
W
I T
N E S S E T H:
WHEREAS,
the
Company desires to employ Executive upon the terms and subject to the conditions
hereinafter set forth, and Executive desires to accept such
employment;
NOW,
THEREFORE,
for and in consideration of the premises, the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties agree
as
follows:
1. EMPLOYMENT.
Subject
to the terms and conditions of this Agreement, the Company hereby employs
Executive as its Chief Executive Officer, reporting to the Board of Directors
of
the Company (the” Board”). During the term of this Agreement, subject to
Section
3.1,
Executive also shall serve as Chairman of the Board.
2. DURATION
OF AGREEMENT.
| 2.1 | Initial Term. This employment shall begin as of the Effective Date, and shall continue until it terminates pursuant to this Agreement. Unless extended pursuant to Section 2.2, or earlier terminated pursuant to any of Sections 5, 6, 7, 8 or 9, this Agreement will terminate on March 31, 2008. The specified period during which this Agreement is in effect is the “Term.” |
| 2.2 | Extensions of Term. |
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2.2.1
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By
Agreement.
The Term may be extended to a specified future date at any time by
the
specific written agreement of the parties signed prior to the original
expiration date specified in Section
2.1,
or any subsequent expiration date established pursuant to Section
2.2.2.
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2.2.2
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Annual
Extension.
For purposes of this Agreement, April 1, 2008 and each April 1 thereafter
shall be referred to as an “Anniversary Date,” and the one-year period
from each Anniversary Date to the next shall be referred to as a
“Contract
Year.” On each Anniversary Date, beginning April 1, 2008, unless either
party to this Agreement has notified the other in writing not less
than
three (3) months prior to such Anniversary Date of that party’s intention
to allow this Agreement to expire and not be renewed at the end of
the
then current Term, the Term shall automatically be extended for one
Contract Year on and from each Anniversary
Date.
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3. POSITION
AND DUTIES.
3.1 Position.
Executive shall serve as the Company's Chief Executive Officer. Executive shall
perform such duties and responsibilities as may be prescribed from time-to-time
by the Board, which shall be consistent with the responsibilities of similarly
situated executives of comparable companies in similar lines of business. So
long as Executive is serving as Chief Executive Officer, the Company shall
nominate Executive for election as a member of the Board at each meeting of
the
Company's shareholders at which the election of Executive is subject to a vote
by the Company's shareholders and to recommend that the shareholders of the
Company vote to elect Executive as a member of the Board, and the Company shall
designate Executive as Chairman of the Board in each Term. From time to time,
Executive also may be designated to such other offices within the Company or
its
subsidiaries as may be necessary or appropriate for the convenience of the
businesses of the Company and its subsidiaries; provided, however, during the
Term, he shall, in addition to the title of Chief Executive Officer, also
continue to hold the title of Chairman.
3.2 Full-Time
Efforts.
Executive shall perform and discharge faithfully, diligently and to the best
of
his ability such duties and responsibilities and shall devote his full-time
efforts to the business and affairs of the Company. Executive agrees to promote
the best interests of the Company and to take no action that in any way damages
the public image or reputation of the Company, its subsidiaries or its
affiliates.
3.3 No
Interference With Duties.
Executive shall not (i) engage in any activities, or render services to or
become associated with any other business that in the reasonable judgment of
the
Board violates Article 11 of this Agreement; or (ii) devote time to other
activities which would inhibit or otherwise interfere with the proper
performance of his duties, provided,
however,
that it
shall not be a violation of this Agreement for Executive to (i) devote
reasonable periods of time to charitable and community activities and industry
or professional activities, or (ii) manage personal business interests and
investments, so long as such activities do not interfere with the performance
of
Executive’s responsibilities under this Agreement. Executive may, with the prior
approval of the Board (or applicable committee), serve on the boards of
directors (or other governing body) of other for profit corporations or
entities, consistent with this Agreement and the Company's
policies.
3.4 Work
Standard.
Executive hereby agrees that he shall at all times comply with and abide by
all
terms and conditions set forth in this Agreement, and all applicable work
policies, procedures and rules as may be issued by Company. Executive also
agrees that he shall comply with all federal, state and local statutes,
regulations and public ordinances governing the performance of his duties
hereunder.
4. COMPENSATION
AND BENEFITS.
4.1 Base
Salary.
Subject
to the terms and conditions set forth in this Agreement, the Company shall
pay
Executive, and Executive shall accept an annual salary (“Base Salary”) in the
amount of Four Hundred Twenty-five Thousand and No/100 Dollars ($425,000).
The
Base Salary shall be paid in accordance with the Company’s normal payroll
practices. The Executive
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shall
be
entitled to periodic reviews (no less frequently than annually) for increases
in
Base Salary during each Contract Year, as shall be determined and approved
by
the Board, taking into account the performance of the Company and the Executive,
and other factors that the Board considers relevant to the salaries of
executives holding similar positions with enterprises comparable to the Company.
The first such review shall take place during or before April 2008.
4.2 Incentive,
Savings and Retirement Plans.
During
the Term, Executive shall be entitled to participate in all incentive
(including, without limitation, long term incentive plans), savings and
retirement plans, practices, policies and programs applicable generally to
senior executive officers of the Company (“Senior Executives”), and on the same
basis as such Senior Executives, except as to benefits that are specifically
applicable to Executive pursuant to this Agreement. Without limiting the
foregoing, the following provisions shall apply with respect to
Executive:
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4.2.1
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Annual
Bonus Plan.
Executive shall be entitled to an annual bonus (including a guaranteed
prorated target bonus of no less than Sixty Two Thousand Eight Hundred
and
Seventy Seven dollars ($62,877) for the fiscal year ended March 31,
2007
based upon days of service from the Effective Date through March
31,
2007), the amount of which shall be determined by the Compensation
Committee of the Board (the "Committee"). The amount of and performance
criteria with respect to any bonus in any fiscal year subsequent
to March
31, 2007 shall be determined not later than the date or time prescribed
by
Treas. Reg. § 1.162-27(e) in accordance with a formula to be agreed upon
by the Company and Executive and approved by the Committee that reflects
the financial and other performance of the Company and the Executive's
contributions thereto. Throughout the Term, the Executive's annual
target
(subject to such performance and other criteria as may be established
by
the Committee) bonus shall be no less than seventy-five percent (75%)
of
the Base Salary and the maximum bonus shall be no less than one hundred
fifty percent (150%) of the Base Salary. Executive’s bonus for the fiscal
year ended March 31, 2008 shall be reduced by any amounts paid to
Executive pursuant to Section
4.2.6.
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4.2.2
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Welfare
Benefit Plans.
During the Term, Executive and Executive’s eligible dependents shall be
eligible for participation in, and shall receive all benefits under,
the
welfare benefit plans, practices, policies and programs provided
by the
Company (including, without limitation, medical, prescription, dental,
disability, executive life, group life, accidental death and travel
accident insurance plans and programs) (“Welfare Plans”) to the extent
applicable generally to Senior
Executives.
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4.2.3
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Vacation.
From the Effective Date through March 31, 2008 and during each Contract
Year thereafter through
the Term, Executive shall be granted four (4) weeks’ paid vacation in
accordance with the Company’s vacation policy as in effect and as approved
by the Committee from time to time. The
timing of paid vacations shall be scheduled in a reasonable manner
by the
Executive.
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4.2.4
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Business
Expenses.
Executive shall be reimbursed for all reasonable business expenses
incurred in carrying out the work hereunder. Executive shall follow
the
Company’s expense procedures that generally apply to other Senior
Executives in accordance with the policies, practices and procedures
of
the Company to the extent applicable generally to such Senior
Executives.
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4.2.5
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Perquisites.
Executive shall be entitled to receive such executive perquisites,
fringe
and other benefits as are provided to the senior most executives
and their
families under any of the Company’s plans and/or programs in effect from
time to time and such other benefits as are customarily available
to
Senior Executives.
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4.2.6
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Signing
and Retention Bonus.
Provided that Executive continues to be employed by the Company at
the
dates established hereafter in this section for payment, he shall
be paid
a bonus of Seventy-five thousand and 00/100 dollars ($75,000) on
April 1,
2007 and Seventy-five thousand and 00/100 dollars ($75,000) on April
1,
2008.
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4.2.7
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LTIP.
Beginning April 2007, Executive shall participate to the same extent
as
other Senior Executives in awards under the Company’s 2005 Long-Term
Equity Incentive Plan (the “LTIP Plan”). Executive’s LTIP Award shall have
at the time of grant a value of 150% of the Executive’s total cash
compensation during the fiscal year immediately preceding the date
of the
LTIP Award. Executive will be granted an LTIP Award, consisting of
restricted stock, in April 2007 with a value of $1,125,000, subject
to all
of the other terms and provisions of the LTIP Plan. The composition
of
future LTIP Awards beginning April 1, 2008 shall be determined in
accordance with the prevailing practice applicable to Senior Executives.
The Company confirms that upon a “Change in Control” (as defined in the
LTIP Plan), all awards to the Executive thereunder fully vest with
no
requirement that the Executive’s employment with the Company have
terminated.
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4.3 Legal
Fees.
Within,
ten (10) days following receipt of appropriate written documentation, the
Company will reimburse Executive up to $15,000 for reasonable and customary
legal fees and expenses incurred by Employee with respect to the negotiation
and
execution of this Agreement.
5. TERMINATION
FOR CAUSE.
This
Agreement may be terminated immediately at any time by the Company without
any
liability owing to Executive or Executive’s beneficiaries under this Agreement,
except Base Salary through the date of termination and benefits under any plan
or agreement covering Executive which shall be governed by the terms of such
plan or agreement, under the following conditions, each of which shall
constitute “Cause” or “Termination for Cause”:
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(a)
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Any
willful act by Executive involving fraud and any willful breach by
Executive of applicable regulations of competent authorities in relation
to trading or dealing with stocks, securities, investments, regulation
of
the Company’s business and the
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(b)
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Attendance
at work in a state of intoxication or otherwise being found in possession
at his place of work of any prohibited drug or substance, possession
of
which would amount to a criminal
offense;
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(c)
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Executive's
personal dishonesty or willful misconduct in connection with his
duties to
the Company;
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(d)
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Breach
of fiduciary duty to the Company involving personal profit by the
Executive;
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(e)
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Assault
or other act of violence against any employee of the Company or other
person during the course of his
employment;
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(f)
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Conviction
of the Executive for any felony or crime involving moral
turpitude;
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(g)
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Material
intentional breach by the Executive of any provision of this Agreement
or
of any Company policy adopted by the
Board;
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(h)
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The
willful continued failure of Executive to perform substantially
Executive’s duties with the Company (other than any such failure resulting
from incapacity due to Disability, and specifically excluding any
failure
by Executive, after good faith, reasonable and demonstrable efforts,
to
meet performance expectations for any reason), after a written demand
for
substantial performance is delivered to Executive by a majority of
the
Board that specifically identifies the manner in which such Board
believes
that Executive has not substantially performed Executive’s
duties.
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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 interest of the Company. Any act,
or failure to act, based upon and performed in accordance with authority given
pursuant to a resolution duly adopted by the Board 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 interest of the Company.
The cessation of employment of Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority
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 Executive and Executive
is
given an opportunity to be heard before the Board), finding that, in the good
faith opinion of such Board, Executive is guilty of the conduct described in
any
one or more of subparagraphs (a) through (h) above, and specifying the
particulars thereof in detail.
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6. TERMINATION
UPON DEATH.
Notwithstanding
anything herein to the contrary, this Agreement shall terminate immediately
upon
Executive’s death, and the Company shall have no further liability to Executive
or his beneficiaries under this Agreement, other than for payment of Accrued
Obligations (as defined in Section
9(a)(1)),
and
the timely payment or provision of Other Benefits (as defined in Section
9(c)),
including without limitation benefits under such plans, programs, practices
and
policies relating to death benefits, if any, as are applicable to Executive
on
the date of his death. This payment shall be paid in a lump sum to the
Executive’s estate within 90 days after the Company is given notice of the
Executive’s death. The rights of the Executive’s estate with respect to stock
options and restricted stock, and all other benefit plans, shall be determined
in accordance with the specific terms, conditions and provisions of the
applicable agreements and plans; provided, however, that any LTIP Award granted
under Section
4.2.7
of this
Agreement shall immediately vest and become distributable as soon as practicable
after the death of the Executive.
7. DISABILITY.
If
the Company determines in good faith that the Disability of Executive has
occurred during the Term (pursuant to the definition of Disability set forth
below), it may give to Executive written notice of its intention to terminate
Executive’s employment. In such event, Executive’s employment with the Company
shall terminate effective on the 30th day after receipt of such written notice
by Executive (the “Disability Effective Date”), provided that, within the 30
days after such receipt, Executive shall not have returned to full-time
performance of Executive’s duties. If Executive’s employment is terminated by
reason of his Disability, this Agreement shall terminate without further
obligations to Executive, other than for payment of Accrued Obligations (as
defined in Section
9(a)(1))
and the
timely payment or provision of Other Benefits (as defined in Section
9(c),
including without limitation benefits under such plans, programs, practices
and
policies relating to disability benefits, if any, as are applicable to Executive
on the Disability Effective Date. The rights of the Executive with respect
to
stock options and restricted stock, and all other benefit plans, shall be
determined in accordance with the specific terms, conditions and provisions
of
the applicable agreements and plans; provided, however, that any LTIP Award
granted under Section
4.2.7
of this
Agreement shall immediately vest and become distributable upon the Disability
Effective Date.
For
purposes of this Agreement, “Disability” shall mean: (i) a long-term disability
entitling Executive to receive benefits under the Company’s long-term disability
plan as then in effect; or (ii) if no such plan is then in effect or the plan
does not apply to Executive, the inability of Executive, as determined by the
Board, to perform the essential functions of his regular duties and
responsibilities, with or without reasonable accommodation, due to a medically
determinable physical or mental illness which has lasted (or can reasonably
be
expected to last) for a period of six consecutive months. At the request of
Executive or his personal representative, the Board's determination that the
Disability of Executive has occurred shall be certified by two physicians
mutually agreed upon by Executive, or his personal representative, and the
Company. Without such independent certification (if so requested by Executive),
Executive’s termination shall be
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deemed
a
termination by the Company without Cause and not a termination by reason of
his
Disability.
8. EXECUTIVE'S
TERMINATION OF EMPLOYMENT.
Executive’s
employment may be terminated at any time by Executive for Good Reason or no
reason. For purposes of this Agreement, “Good Reason” shall mean:
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(a)
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Other
than his removal for Cause pursuant to Section
5,
without the written consent of Executive, the assignment to Executive
of
any duties inconsistent in any material respect with Executive’s position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities as in effect on the Effective Date, or
any
other action by the Company which results in a demonstrable diminution
in
such position, authority, duties or responsibilities (including without
limitation the designation of another person as Chairman); but excluding,
for this purpose an isolated, insubstantial and inadvertent action
not
taken in bad faith and which is remedied by the Company promptly
after
receipt of notice thereof given by
Executive;
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(b)
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A
reduction by the Company in Executive’s Base Salary as in effect on the
Effective Date or as the same may be increased from time to
time;
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(c)
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A
reduction by the Company in Executive's annual target bonus (expressed
as
a percentage of Base Salary) unless such reduction is a part of an
across-the-board decrease in target bonuses affecting all other Senior
Executives; provided, however that in any event, the Company may
not
reduce Executive’s annual target bonus (expressed as a percentage of Base
Salary) below seventy-five percent (75%) of the Base
Salary;
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(d)
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The
Company’s giving notice under Section
2.2.2
of
its intention not to renew this Agreement unless at that time, the
Company
could terminate this Agreement and Executive’s employment for
“Cause.”
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(e)
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The
failure by the Company to continue in effect any “pension plan or
arrangement” or any “compensation plan or arrangement” in which Executive
participates or the elimination of Executive’s participation in any such
plan (except for across the board plan changes or terminations similarly
affecting other Senior Executives); provided however that nothing
in this
provision shall have the effect of impairing Executive’s entitlement to an
annual target bonus in the amount set forth in Section 8(c)
above;
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(f)
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The
Company’s requiring Executive, without his consent, to be based at any
office or location more than thirty (30) miles from the Company's
current
headquarters in Irvington, New York;
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(g)
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The
material breach by the Company of any provision of this Agreement;
or
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(h)
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A
“Change in Control” (as defined in the LTIP Plan) occurs and
either the Company repudiates this Agreement or a successor (if any
and
applicable) (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company fails 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.
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Good
Reason shall not include Executive’s death or Disability. Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder, provided that Executive
raises to the attention of the Board any circumstance he believes in good faith
constitutes Good Reason within ninety (90) days after occurrence or be
foreclosed from raising such circumstance thereafter. The Company shall have
an
opportunity to cure any claimed event of Good Reason (other than under
subparagraph (h) above) within 30 days of notice from Executive.
If
Executive terminates his employment for Good Reason, upon the execution and
effectiveness of a mutually agreeable release of the Company from all liability
(a “Release”), he shall be entitled to the same benefits he would be entitled to
under Section
9
as if
terminated without Cause. If Executive terminates his employment without Good
Reason, this Agreement shall terminate without further obligations to Executive,
other than for payment of Accrued Obligations (as defined in Section
9(a)(1))
and the
timely payment or provision of Other Benefits (as defined in Section
9(c).
Unless
otherwise permitted by Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), with regard to any payment or benefit under this
Section
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which is
nonqualified deferred compensation covered by Section 409A of the Code, no
such
payment or benefit (other than Accrued Obligations and Other Benefits) shall
be
provided to Executive pursuant to this Section if a Release is not provided
to
the Company, without revocation thereof, no later than forty-five (45) days
after Executive’s termination date; and no payment or benefit hereunder shall be
provided to Executive prior to the Company’s receipt of a Release and the
expiration of any period of revocation provided for in the Release.
9. TERMINATION
WITHOUT CAUSE.
If
Executive’s employment is terminated by the Company without Cause prior to the
expiration of the Term (it being understood by the parties that termination
by
death or Disability shall not constitute termination without Cause), then
Executive shall be entitled to the following benefits upon the execution and
effectiveness of a Release:
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(a)
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The
Company shall pay to Executive commencing after the later of the
date of
termination or the execution and effectiveness of a Release, the
aggregate
of the following amounts:
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(1)
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in
a lump sum in cash within 30 days, the sum of (i) Executive’s Base Salary
through the date of termination to the extent not theretofore paid,
(ii)
any accrued expenses and vacation pay to the extent not theretofore
paid,
and (iii) unless Executive has elected a different payout date in
a prior
deferral election, any compensation previously deferred by Executive
(together with any accrued interest or earnings thereon) to the extent
not
theretofore paid (the sum of the amounts described in subparagraphs
(i),
(ii) and (iii) shall be referred to in this Agreement as the “Accrued
Obligations”);
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(2)
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in
installments ratably over twelve (12) months in accordance with the
Company’s normal payroll cycle and procedures, the amount equal to the sum
of: (i) Executive’s annual Base Salary in effect as of the date of
termination; plus
(ii) Executive’s
Applicable Annual Bonus (as defined below). For purposes of this
Agreement, “Applicable Annual Bonus” means the greater of Executive’s
actual annual incentive bonus from the Company earned in the fiscal
year
immediately preceding the fiscal year in which Executive’s termination
date falls or Executive’s target annual incentive bonus (e.g., 75% of Base
Salary as of the Effective Date) for the year in which Executive’s
termination date falls;
and
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(3)
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in
the event the termination of employment occurs prior to March 31,
2010,
for each LTIP Award granted prior to the date of termination pursuant
to
Section
4.2.7,
a
lump sum in cash equal to the product of: (i) a fraction, the numerator
of
which shall be the number “one (1)” if the Executive has been employed for
twelve months or less from the applicable date of the grant of the
LTIP
Award in question (the “Grant Date”), the number “two (2)” if the
Executive has been employed for more than twelve but less than twenty
four
months from the Grant Date and the number “three (3)” if the Executive has
been employed for more than twenty four months from the Grant Date
and the
denominator of which shall be the number “three (3)” multiplied
by (ii)
the value (based, in the case of restricted stock, upon the closing
market
price of the Company’s common stock on the day prior to the date of
termination of employment) of the unvested portion of each LTIP Award;
and
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(4)
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With
respect to Section
9(a)(2),
the Company, with the consent of the Executive, may make a lump sum
payment of all amounts, or all remaining amounts, due to Executive;
and
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(b)
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The
Executive’s participation in the life, medical and disability insurance
programs in effect on the date of termination of employment shall
on the
same basis as an active employee of the Company for up to twelve
(12)
months after Executive’s date of termination. Executive shall thereafter
be entitled to continuation of benefits pursuant to the provisions
of the
Consolidated Omnibus Budget Reconciliation Act, as from time to time
amended.
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(c)
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To
the extent not theretofore paid or provided, the Company shall timely
pay
or provide to Executive any other accrued amounts or accrued benefits
required to be paid or provided or which Executive is eligible to
receive
under any plan, program, policy or practice or contract or agreement
of
the Company (such other amounts and benefits shall be referred to
in this
Agreement as the “Other Benefits”).
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Unless
otherwise permitted by Section 409A of the Code, with regard to any payment
or
benefit under this Section
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which is
nonqualified deferred compensation covered by Section 409A of the Code, no
such
payment or benefit (other than Accrued Obligations and Other Benefits) shall
be
provided to Executive pursuant to this Section if a Release is not provided
to
the Company, without revocation thereof, no later than forty-five (45) days
after Executive’s termination date; and no payment or benefit hereunder shall be
provided to Executive prior to the Company’s receipt of a Release and the
expiration of any period of revocation provided in the Release. In addition,
unless otherwise permitted by Section 409A of the Code, the Company shall not
be
entitled to make a lump sum payment of all amounts, or all remaining amounts,
due to Executive under Section
9(a)(2)
if such
exercise would cause any such payment which is nonqualified deferred
compensation covered by Section 409A of the Code to be in non-compliance with
Section 409A of the Code, provided however, that nothing in this provision
or
the Agreement to the contrary, Executive shall not incur a diminution in value
of any payment to which he is entitled pursuant to this Agreement, nor shall
the
application of Section 409A relieve the Company of any obligation under this
Agreement to make payments to Executive to which he is entitled.
10. PUBLICITY;
NO DISPARAGING STATEMENT.
Executive and the Company covenant and agree that they shall not engage in
any
communications which shall disparage one another or interfere with their
existing or prospective business relationships.
11. BUSINESS
PROTECTION PROVISIONS.
11.1 Preamble.
As a
material inducement to the Company to enter into this Agreement, and its
recognition of the valuable experience, knowledge and proprietary information
Executive will gain from his employment with the Company, Executive warrants
and
agrees he will abide by and adhere to the following business protection
provisions in this Article 11 and all sections and subsections thereof.
11.2 Definitions.
For purposes of this Article 11 and all sections and subsections thereof, the
following terms shall have the following meanings:
(a) “Competitive
Position” shall mean any employment, consulting, advisory, directorship, agency,
promotional or independent contractor arrangement between the Executive and
any
person or Entity engaged in a line of business that competes directly with
any
brand of the Company or any of its affiliates or subsidiaries (collectively
the
“PBH Entities”) whereby
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Executive
is required to or does perform services on behalf of or for the benefit of
such
person or Entity which are substantially similar to the services in which
Executive participated or that he directed or oversaw while employed by the
Company. For the purposes of this Section
11.2,
it is
expressly understood and agreed that Executive shall not be precluded from
employment with an Entity that competes with the Company so long as Executive
does not participate, directly or indirectly, in the business operations of
any
subsidiary, division or portion thereof that manufactures, distributes or sells
such competing brands so long as Executive does not violate either Section
11.3
or
Section
11.4.
(b) “Confidential
Information” shall mean the proprietary or confidential data, information,
documents or materials (whether oral, written, electronic or otherwise)
belonging to or pertaining to the PBH Entities, other than “Trade Secrets” (as
defined below), which is of tangible or intangible value to any of the PBH
Entities and the details of which are not generally known to the competitors
of
the PBH Entities. Confidential Information shall also include: any items that
any of the PBH Entities have marked “CONFIDENTIAL” or some similar designation
or are otherwise identified as being confidential.
(c) “Entity”
or “Entities” shall mean any business, individual, partnership, joint venture,
agency, governmental agency, body or subdivision, association, firm,
corporation, limited liability company or other entity of any kind.
(d) “Restricted
Period” shall mean one (1) year following termination of Executive’s employment
hereunder; provided, however that the Restricted Period shall
be
extended for a period of time equal to any period(s) of time within the one
(1)
year period following termination of Executive's employment hereunder that
Executive is determined by a final non-appealable judgment from a court of
competent jurisdiction to have engaged in any conduct that violates this Article
12 or any sections or subsections thereof, the purpose of this provision being
to secure for the benefit of the Company the entire Restricted Period being
bargained for by the Company for the restrictions upon the Executive's
activities.
(e) “Territory”
shall mean each of the United States of America or any country other than the
United States of America in which the Company shall transact business during
the
Term.
(f) “Trade
Secrets” shall mean information or data of or about any of the PBH Entities,
including, but not limited to, technical or non-technical data, customer lists,
pricing models, formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial plans, product plans
or lists of actual or potential suppliers that: (1) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; (2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy; and (3) any other information
which is defined as a “trade secret” under applicable law.
(g) “Work
Product” shall mean all tangible work product, property, data, documentation,
“know-how,” concepts or plans, inventions, improvements, techniques and
11
processes
relating to the PBH Entities that were conceived, discovered, created, written,
revised or developed by Executive during the term of his employment with the
Company.
11.3 Nondisclosure;
Ownership of Proprietary Property.
(a)
In
recognition of the need of the PBH Entities to protect their legitimate business
interests, Confidential Information and Trade Secrets, Executive hereby
covenants and agrees that Executive shall regard and treat Trade Secrets and
all
Confidential Information as strictly confidential and wholly-owned by the PBH
Entities and shall not, for any reason, in any fashion, either directly or
indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign,
show, disclose, disseminate, reproduce, copy, misappropriate or otherwise
communicate any such item or information to any third party or Entity for any
purpose other than in accordance with this Agreement or as required by
applicable law, court order or other legal process: (i) with regard to each
item constituting a Trade Secret, at all times such information remains a “trade
secret” under applicable law, and (ii) with regard to any Confidential
Information, for the Restricted Period.
(b)
Executive
shall exercise best efforts to ensure the continued confidentiality of all
Trade
Secrets and Confidential Information, and he shall immediately notify the
Company of any unauthorized disclosure or use of any Trade Secrets or
Confidential Information of which Executive becomes aware. Executive shall
assist the PBH Entities, to the extent necessary, in the protection of or
procurement of any intellectual property protection or other rights in any
of
the Trade Secrets or Confidential Information.
(c)
All
Work
Product shall be owned exclusively by the PBH Entities. To the greatest extent
possible, any Work Product shall be deemed to be “work made for hire” (as
defined in the Copyright Act, 17 U.S.C.A. §101 et
seq.,
as
amended), and Executive hereby unconditionally and irrevocably transfers and
assigns to applicable PBH Entity all right, title and interest Executive
currently has or may have by operation of law or otherwise in or to any Work
Product, including, without limitation, all patents, copyrights, trademarks
(and
the goodwill associated therewith), trade secrets, service marks (and the
goodwill associated therewith) and other intellectual property rights. Executive
agrees to execute and deliver to the applicable PBH Entity any transfers,
assignments, documents or other instruments which the Company may deem necessary
or appropriate, from time to time, to protect the rights granted herein or
to
vest complete title and ownership of any and all Work Product, and all
associated intellectual property and other rights therein, exclusively in the
applicable PBH Entity.
11.4 Non-Interference
With Executives.
Executive
recognizes and acknowledges that, as a result of his employment by Company;
he
will become familiar with and acquire knowledge of confidential information
and
certain other information regarding the other executives and employees of the
PBH Entities. Therefore, Executive agrees that, during the Restricted Period,
Executive shall not encourage, solicit or otherwise attempt to persuade any
person in the employment of the PBH Entities to end his/her employment with
a
PBH Entity or to violate any confidentiality, non-competition or employment
agreement that such person may have with a PBH Entity or any policy of any
PBH
Entity.
12
Furthermore,
neither Executive nor any person acting in concert with the Executive nor any
of
Executive's affiliates shall, during the Restricted Period, employ any person
who has been an executive or management employee of any PBH Entity unless that
person has ceased to be an employee of the PBH Entities for at least six (6)
months.
11.5 Non-competition.
Executive
covenants and agrees to not obtain or work in a Competitive Position within
the
Territory during the Term or during the Restricted Period. Executive and
Company
recognize and acknowledge that the scope, area and time limitations contained
in
this Agreement are reasonable and are properly required for the protection
of
the business interests of Company due to Executive's status and reputation
in
the industry and the knowledge to be acquired by Executive through his
association with Company's business and the public's close identification of
Executive with Company and Company with Executive. Further, Executive
acknowledges that his skills
are such that he could easily find alternative, commensurate employment or
consulting work in his field that would not violate any of the provisions of
this Agreement. Executive
acknowledges and understands that, as consideration for his execution of this
Agreement and his agreement with the terms of this covenant not to compete,
Executive will receive employment with and other benefits from the Company
in
accordance with this Agreement.
11.6 Remedies.
Executive
understands and acknowledges that his violation of this Article 11 or any
section or subsection thereof would cause irreparable harm to Company and
Company would be entitled to an injunction by any court of competent
jurisdiction enjoining and restraining Executive from any employment, service,
or other act prohibited by this Agreement The parties agree that nothing in
this
Agreement shall be construed as prohibiting Company from pursuing any remedies
available to it for any breach or threatened breach of this Article 11 or any
section or subsection thereof, including, without limitation, the recovery
of
damages from Executive or any person or entity acting in concert with Executive.
If any part of this Article 11 or any section or subsection thereof is found
to
be unreasonable, then it may be amended by appropriate order of a court of
competent jurisdiction to the extent deemed reasonable. Furthermore and in
recognition that certain severance payments are being agreed to in reliance
upon
Executive’s compliance with this Article 11 after termination of his employment,
in the event Executive breaches any of such business protection provisions
of
this Agreement, any unpaid amounts (e.g., those provided under Section 8 or
Section 9(a)) shall
be
forfeited and Company shall not be obligated to make any further payments or
provide any further benefits to Executive following any such breach.
12.
RETURN
OF MATERIALS; BOARD RESIGNATION.
Upon
Executive’s termination, or at any point after that time upon the specific
request of the Company, Executive shall return to the Company all written or
descriptive materials of any kind belonging or relating to the Company or its
affiliates, including, without limitation, any originals, copies and abstracts
containing any Work Product, intellectual property, Confidential Information
and
Trade Secrets in Executive’s possession or control. In addition, upon the
termination of Executive’s employment with the Company, upon the request of the
Board,
13
Executive
shall submit, and upon the failure to do so, shall be deemed to have submitted
his resignation as a member of the Board effective upon the termination of
employment.
13. GENERAL
PROVISIONS.
13.1 Amendment.This
Agreement may be amended or modified only by a writing signed by both of the
parties hereto.
13.2 Binding
Agreement.
This Agreement shall inure to the benefit of and be binding upon Executive,
his
heirs and personal representatives, and the Company and its successors and
assigns.
13.3 Waiver
Of Breach; Specific Performance.
The
waiver of a breach of any provision of this Agreement shall not operate or
be
construed as a waiver of any other breach. Each of the parties to this
Agreement will be entitled to enforce its or his rights under this Agreement,
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights existing in its or his favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that
any
party may in its or his sole discretion apply to any court of law or equity
of
competent jurisdiction for specific performance or injunctive relief in order
to
enforce or prevent any violations of the provisions of this
Agreement.
13.4 Indemnification
and Insurance.
The
Company shall indemnify and hold the Executive harmless to the maximum extent
permitted by law against judgments, fines, amounts paid in settlement and
reasonable expenses, including reasonable attorneys’ fees incurred by the
Executive, in connection with the defense of, or as a result of any action
or
proceeding (or any appeal from any action or proceeding) in which the Executive
is made or is threatened to be made a party by reason of the fact that he is
or
was an officer of the Company or any affiliate. In addition, the Company agrees
that the Executive is and shall continue to be covered and insured up to the
maximum limits provided by all insurance which the Company maintains to
indemnify its directors and officers (as well as any insurance that it maintains
to indemnify the Company for any obligations which it incurs as a result of
its
undertaking to indemnify its officers and directors) and that the Company will
exert its best efforts to maintain such insurance, in not less than its present
limits, in effect throughout the term of the Executive’s
employment.
13.5 No
Effect On Other Arrangements.
It is
expressly understood and agreed that the payments made in accordance with this
Agreement are in addition to any other benefits or compensation to which
Executive may be entitled or for which he may be eligible, whether funded or
unfunded, by reason of his employment with the Company. Notwithstanding the
foregoing, the provisions in Section
5
through
Section
9
regarding benefits that the Executive will receive upon his employment being
terminated supersede and are expressly in lieu of any other severance program
or
policy that may be offered by the Company, except with regard to any rights
the
Executive may have pursuant to COBRA.
14
13.6 Tax
Withholding.There
shall be deducted from each payment under this Agreement the amount of any
tax
required by any govern-mental authority to be withheld and paid over by the
Company to such governmental authority for the account of
Executive.
13.7 Notices.
All
notices and all other communications provided for herein shall be in writing
and
delivered personally to the other designated party, or mailed by certified
or
registered mail, return receipt requested, or delivered by a recognized national
overnight courier service, or sent by facsimile, as follows:
If
to Company to: Prestige
Brands Holdings, Inc.
Attn:
General Counsel’s Xxxxxx
00
Xxxxx
Xxxxxxxx
Xxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
If
to Executive to: Xxxx
Xxxxxx
00
Xxxxxxxx Xxxxx
Xxxxxxxxx
Xxxx, XX 00000
All
notices sent under this Agreement shall be deemed given twenty-four (24) hours
after sent by facsimile or courier, seventy-two (72) hours after sent by
certified or registered mail and when delivered if personal delivery. Either
party hereto may change the address to which notice is to be sent hereunder
by
written notice to the other party in accordance with the provisions of this
Section.
13.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware (without giving effect to conflict of laws).
13.9 Entire
Agreement. This
Agreement contains the full and complete understanding of the parties hereto
with respect to the subject matter contained herein and this Agreement
supersedes and replaces any prior agreement, either oral or written, which
Executive may have with Company that relates generally to the same subject
matter including, as of the Effective Date, the Prior Agreements.
13.10
Assignment.
This Agreement may not be assigned by Executive without the prior
written consent of Company, and any attempted assignment not in accordance
herewith shall be null and void and of no force or effect.
13.11
Severability.
If
any
one or more of the terms, provisions, covenants or restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect, and to that end the provisions hereof shall be deemed
severable.
15
13.12 Section
and Paragraph Headings.
The
Section and paragraph headings set forth herein are for convenience of reference
only and shall not affect the meaning or interpretation of this Agreement
whatsoever.
13.13 Interpretation.Should
a
provision of this Agreement require judicial interpretation, it is agreed that
the judicial body interpreting or construing the Agreement shall not apply
the
assumption that the terms hereof shall be more strictly construed against one
party by reason of the rule of construction that an instrument is to be
construed more strictly against the party which itself or through its agents
prepared the agreement, it being agreed that all parties and/or their agents
have participated in the preparation hereof.
13.14 Mediation;
Arbitration.
(a) Except
as
provided in subsection (d) of this Section
13.14,
the
following provisions shall apply to disputes between Company and Executive
arising out of or related to either: (i) this Agreement (including any claim
that any part of this agreement is invalid, illegal or otherwise void or
voidable), or (ii) the employment relationship that exists between Company
and
Executive:
|
(1)
|
The
parties shall first use their best efforts to discuss and negotiate
a
resolution of the dispute.
|
|
(2)
|
If
efforts to negotiate a resolution do not succeed within 5 business
days
after a written request for negotiation has been made, a party
may submit
to the dispute to mediation by sending a letter to the other party
requesting mediation. The dispute shall be mediated by a mediator
agreeable to the parties or, if the parties cannot agree, by a
mediator
selected by the American Arbitration Association. If the parties
cannot
agree to a mediator within 5 business days, either party may submit
the
dispute to the American Arbitration Association for the appointment
of a
mediator. Mediation shall commence within 10 business days after
the
mediator has been named.
|
(b) In
the
event that a dispute between Company and Executive that has been submitted
to
mediation pursuant to subsection (a) of this section
13.14
is
not resolved within sixty (60)
days after a written request for negotiation has been made, then, except
as
provided in subsection (d) of this Section
13.14,
any
such dispute shall be
resolved timely and exclusively by final and binding arbitration pursuant
to the
American Arbitration Association (“AAA”) National
Rules
for the Resolution of
Employment Disputes (the “AAA Rules”). Arbitration must be demanded within ten
(10) calendar days after the expiration of
the
sixty (60) day period
referred to above. The arbitration opinion and award shall be final and binding
on the Company and the Executive and shall be
enforceable
by any court sitting
within Westchester County, New York. Company and Executive shall share equally
all costs of arbitration excepting their
own
attorney’s fees unless and to
the extent ordered by the arbitrator(s) to pay the attorneys’ fees of the
prevailing party.
16
(c) The
parties recognize that this Section
13.14
means
that certain claims will be reviewed and decided only before an impartial
arbitrator or panel of arbitrators instead of before a court of law and/or
a
jury, but desire the many benefits of the arbitration process over court
proceedings, including speed of resolution, lower costs and fees, and more
flexible rules of evidence. The arbitrator or arbitrators duly selected pursuant
to the AAA’s Rules shall have the same power and authority to order any remedy
for violation of a statute, regulation, or ordinance as a court would have;
and
shall have the same power to order discovery as a federal district court
has
under the Federal Rule of Civil Procedure.
(d) The
provisions of this Section
13.14
shall
not apply to any action by the Company seeking to enforce its rights arising
out
of or related to the provisions of Article 12 of this Agreement.
(e) This
Section
13.14
is
intended by the Company and the Executive to be enforceable under the Federal
Arbitration Act. Should it be determined by any court that the Act does not
apply, then this Section
13.14
shall be
enforceable under the applicable arbitration statutes of the State of
Delaware.
13.15 Voluntary
Agreement.Executive
and Company represent and agree that each has reviewed all aspects of this
Agreement, has carefully read and fully understands all provisions of this
Agreement, and is voluntarily entering into this Agreement. Each party
represents and agrees that such party has had the opportunity to review any
and
all aspects of this Agreement with legal, tax or other adviser(s) of such
party’s choice before executing this Agreement.
13.16 Nonqualified
Deferred Compensation Omnibus Provision.
It is intended that any compensation provided under this Agreement be
administered and paid in a manner which will not result in the imposition of
additional federal income taxes on the Executive under Code Section 409A. The
provisions of this Agreement relating to amounts which constitute deferred
compensation under Code Section 409A are intended to be construed accordingly.
If any compensation or benefits provided by this Agreement may result in the
application of Section 409A of the Code, the Company shall, in consultation
with
the Executive, modify the Agreement (which could include, without limitation
a
“gross up”) in the least restrictive manner necessary in order to exclude such
compensation from the definition of “deferred compensation” within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A
and/or any rules, regulations or other regulatory guidance issued under such
statutory provision and without any diminution in the value of the payments
to
the Executive.
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IN
WITNESS WHEREOF, the parties hereto have executed, or caused their duly
authorized representative to execute, this Agreement as of this 19th
day of January, 2007.
By:
/s/ Xxxxx
X. Xxxxxxxx
Title:
Chief Financial Officer
“EXECUTIVE”
/s/
Xxxx
Xxxxxx
Xxxx
Xxxxxx
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