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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of February 3, 1997 by
and between REXALL SUNDOWN, INC., a Florida corporation (the "Company"), and
XXXX X. XXXXXXX (the "Employee").
R E C I T A L S
The Company desires to employ the Employee, and the Employee desires
to be employed by the Company, in accordance with the provisions contained in
this Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of each of the Company and the Employee contained in
this Agreement, each of the Company and the Employee agrees as follows:
I. EMPLOYMENT
1.1 The Company employs the Employee and the Employee accepts such
employment. Subject to the direction of the Board of Directors of the Company,
the Employee shall serve as an Executive Vice President of the Company. The
Employee shall have such responsibilities, perform such duties and exercise
such power and authority as are inherent in, or incident to, the office of
Executive Vice President. The Employee shall devote his full business time and
attention and his best efforts to the performance of his duties as an employee
of the Company.
1.2 During the Term (as defined in Section 2.1 below), the
Employee, if elected, shall serve as a Director of the Company and/or a
Director or officer of any subsidiary of the Company without any additional
compensation for such services other than the compensation provided for
hereunder.
II. TERM
2.1 Subject to the provisions of Article V hereof, the term of the
Employee's employment under this Agreement shall be for the period commencing
on February 3, 1997, and terminating on February 2, 2000 (the "Term").
III. COMPENSATION
3.1 Salary. In payment for the obligations to be performed by the
Employee during the Term, the Company shall pay to the Employee (subject to any
applicable payroll and/or taxes required to be withheld) annual compensation
("Annual Compensation") equal to (i) a salary of Two Hundred Fifty Thousand
Dollars ($250,000.00) in cash for the year commencing February 3, 1997 (with an
increase of Annual Compensation to Two Hundred Seventy-Five Thousand Dollars
($275,000.00) commencing August 3, 1997) and (ii) for each succeeding year
during the Term, a salary equal to that of the previous year increased by the
greater of (A) 5% or (B) the percentage increase in the cost of living based
upon the Revised Consumer Price Index (1982-84=100) published by the Bureau of
Labor Statistics of the United States Department of Labor for Boca Raton,
Florida utilizing February 1997 as the base month.
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3.2 Payment of Salary. Payments of salary shall be made to the
Employee in installments from time to time on the same dates that payments of
salary are generally made to all senior management employees of the Company.
3.3 Incentive Compensation. The Company shall pay the Employee an
incentive compensation bonus in an amount up to thirty-five percent (35%) of
Employee's Annual Compensation for each of the Company's fiscal years during
the Term hereof pursuant to the Company's Management Incentive Plan in effect
from time to time.
IV. CERTAIN FRINGE BENEFITS
4.1 Generally. The Employee shall be entitled to reimbursement
for reasonable business expenses incurred in connection with his employment
including customer entertainment. The Company shall provide the Employee with
(a) an automobile allowance of $10,500 per year or, (b) an automobile (not to
exceed $10,500 per year) at the Company's expense and the Company shall provide
at its expense insurance and maintenance for such automobile. The Company
will also provide the Employee with a car or cellular telephone, a company
credit card for business travel, entertainment and gas for the Employee's
automobile. The Employee shall further be entitled to receive such benefits
and to participate in such benefit plans as are generally provided from time to
time by the Company to its senior management employees; provided, however, that
nothing contained in this Section 4.1 shall be construed to obligate the
Company to provide any specific benefits to its employees generally.
4.2 Vacations. The Employee shall be entitled to such vacation
time on an annual basis as is provided in accordance with the policies as are
from time to time in force for the Company's employees, or as otherwise
approved by the Company's President.
4.3. Moving and Relocation Expenses. The Company shall reimburse
the Employee all reasonable interim living expenses prior to moving to southern
Florida and shall reimburse the Employee for all reasonable moving expenses in
connection with such move, including, without limitation, (a) one-way coach
airfare for the Employee and his family, or the cost of land travel from North
Carolina to southern Florida, (b) transportation, packing, loading and
unloading of all household goods from North Carolina to southern Florida, (c)
assistance with house hunting and temporary living accommodations (up to a
maximum of six months), and (d) closing costs, attorneys' fees and real estate
brokerage costs in connection with the sale of Employee's house; which
reimbursement pursuant to this Section 4.3 shall not exceed $75,000.00 in the
aggregate (subject to applicable taxes).
V. TERMINATION OF EMPLOYMENT
5.1 Certain Definitions. The following terms shall have the
following respective meanings when utilized in this Agreement:
(a) "Acquisition of Control" shall mean:
(i) any person (including a Group), without the
approval of a majority of the Incumbent Directors, becoming the Beneficial
Owner of, or acquiring the power to direct the exercise of voting power with
respect to, directly or indirectly, securities which represent thirty percent
(30%) or more of the combined voting power of the Company's outstanding
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securities thereafter, whether or not some portion of such securities was owned
by such person (or by any member of such Group) prior thereto; provided,
however, that this provision shall not apply to acquisitions by a director,
executive officer or their affiliates if such person had such status on
February 3, 1997; or
(ii) the Incumbent Directors cease at any time to
constitute a majority of the Board of Directors, whether of (A) the Company or
(B) after any cash tender offer or exchange offer, merger, consolidation or
other business combination, recapitalization of the Company, sale, liquidation
or dissolution (or adoption of a plan for liquidation or dissolution), or any
combination of any or all of the foregoing transactions, including but not
limited to a series of such transactions, any successor to the Company;
provided, however, an Acquisition of Control shall not be deemed to have
occurred with respect to the Employee if the action of the Employee was
voluntary and would have been sufficient, without the action of others, to
constitute an Acquisition of Control.
(b) "Beneficial Owner" shall have the meaning provided in
Section 607.0901(1)(e) of the Florida Statutes.
(c) "Cause" shall mean any action by the Employee or any
inaction by the Employee which is reasonably believed by the Company to
constitute:
(i) fraud, embezzlement, misappropriation,
dishonesty or breach of trust;
(ii) a felony or moral turpitude;
(iii) material breach or violation of any or all of
the covenants, agreements and obligations of the Employee set forth in this
Agreement, other than as the result of the Employee's death or Disability;
(iv) a willful or knowing failure or refusal by
the Employee to perform any or all of his material duties and responsibilities
as an officer of the Company, other than as the result of the Employee's death
or Disability; or
(v) gross negligence by the Employee in the
performance of any or all of his material duties and responsibilities as an
officer of the Company, other than as the result of the Employee's death or
Disability;
;provided, however, that if the basis for any
termination of the Employee's employment by the Company as set forth in the
Termination Notice delivered by the Company to the Employee is any or all of
the definitions of Cause set forth in Section 5.1(c)(iii) or Section 5.1(c)(iv)
of this Agreement, then, in such event, the Employee shall have thirty (30)
days from and after the date of his receipt of such Termination Notice to cure
the action or inaction specified therein to the reasonable satisfaction of the
Company unless thirty (30) days is not a reasonably sufficient period of time
to cure such action or inaction, in which case the Employee shall have such
reasonable cure time as the Company and the Employee shall mutually agree,
which period shall under no circumstances exceed ninety (90) days.
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(d) "Compensation" shall mean the cash payment to which
Employee is entitled under the provisions of Sections 3.1 and 3.3 hereof.
(e) "Disability" shall mean any mental or physical
illness, condition, disability or incapacity which prevents the Employee from
reasonably discharging his duties and responsibilities as an officer of the
Company. If any disagreement or dispute shall arise between the Company and
the Employee as to whether the Employee suffers from any Disability, then, in
any such event, the Employee shall submit to the physical or mental examination
of a physician licensed under the laws of the State of Florida, who shall be
mutually selected by the Company and the Employee, and such physician shall
make the determination of whether the Employee suffers from any Disability. In
the absence of fraud or bad faith, the determination of such physician shall be
final and binding upon each of the Company and the Employee. The entire cost
of any such examination shall be borne solely by the Company.
(f) "Group" shall mean any combination of persons
knowingly participating in a joint activity or interdependent consciously
parallel action toward a common goal, whether or not pursuant to an express
contract; provided, however, that actions taken by a director of the Company
acting as such shall not alone constitute membership in a Group.
(g) "Incumbent Director" shall mean any director of the
Company serving at February 1, 1997 or one elected thereafter if nominated or
approved by at least two-thirds of the then Incumbent Directors.
(h) "Protracted Disability" shall mean any Disability
which prevents the Employee from reasonably discharging his duties and
responsibilities as an officer of the Company for a period of six (6)
consecutive months.
(i) "Termination Date" shall mean a specific date not
less than ten (10) nor more than thirty (30) days from and after the date of
any Termination Notice upon which the Employee's employment by the Company
shall be terminated in accordance with the provisions of this Agreement;
provided, however, if the Company and the Employee extend the Employee's cure
period pursuant to the proviso in Section 5.1(c) hereof, then the Termination
Date shall also be so extended.
(j) "Termination Notice" shall mean a written notice
which (i) sets forth the specific provision of this Agreement relied upon to
terminate the Employee's employment by the Company, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide the basis for
the termination of the Employee's employment by the Company pursuant to the
specific provision of this Agreement relied upon therein and (iii) sets forth a
Termination Date.
5.2 Termination of Employment.
(a) Notwithstanding the provisions of Article II hereof,
this Agreement (i) shall be automatically terminated upon the death of the
Employee pursuant to the provisions of Section 5.3 hereof, (ii) may be
terminated at any time by the Company pursuant to the provisions of Section 5.4
or 5.5 hereof and (iii) may be terminated by the Employee pursuant to the
provisions of Section 5.6 hereof.
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(b) If either the Company or the Employee shall desire to
terminate the Employee's employment by the Company pursuant to any of the
provisions of Sections 5.4, 5.5 or 5.6 hereof, then the party causing any such
termination shall give to the other party a Termination Notice.
(c) If this Agreement shall be terminated pursuant to any
of the provisions of this Article V, the Company shall be discharged from all
of its obligations to the Employee hereunder upon its payment to the Employee
of the required amount set forth in the section of this Article 5 pursuant to
which such termination shall occur.
5.3 Death of Employee. If at any time during the Term the
Employee shall die, then the employment of the Employee by the Company shall
automatically terminate on the date of the Employee's death. In such event,
not more than thirty (30) days from and after the date of the Employee's death,
the Company shall pay to the Employee's estate or heirs, as the case may be, an
amount in cash equal to the Employee's Compensation (subject to any applicable
payroll and/or other taxes required by law to be withheld) determined as of the
date of the Employee's death.
5.4 Disability of Employee.
(a) If at any time during the Term the Employee shall
suffer any Disability, then the Company shall be obligated to continue to pay
in the ordinary and normal course of its business to the Employee or his legal
representatives, as the case may be, the Employee's Compensation (subject to
any applicable payroll and/or other taxes required by law to be withheld) from
the date that the Employee shall first suffer any such Disability to the date
that the Employee's employment by the Company shall be terminated pursuant to
any of the provisions of this Agreement.
(b) If the Employee shall suffer any Protracted
Disability during the Term, then the Company may terminate this Agreement. In
such event, in addition to any other benefits which may have been provided by
the Company to the Employee or his legal representatives, as the case may be,
pursuant to the provisions of Section 5.4(a) hereof, not later than thirty (30)
days after the Termination Date specified in the Termination Notice, the
Company shall pay to the Employee or his legal representatives, as the case may
be, an amount in cash equal to the Employee's Compensation (subject to any
applicable payroll and/or other taxes required by law to be withheld)
determined as of the Termination Date. Subsequent to such Termination Date,
the Employee or his legal representatives, as the case may be, shall also be
entitled to receive any benefits which may be payable under any disability
insurance policy or disability plan provided by the Company.
5.5 Termination of Employment by Company.
(a) The Company may terminate this Agreement at any time
with Cause. In such event, the Company shall be obligated to continue to pay
in the ordinary and normal course of its business to the Employee his Annual
Compensation (subject to any applicable payroll and/or other taxes required by
law to be withheld) until the Termination Date.
(b) The Company may terminate this Agreement at any time
without Cause. If the Company shall terminate the employment of the Employee
by the Company without
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Cause, and not pursuant to any other provision of this Agreement, the Company
shall continue to pay to the Employee the Employee's Annual Compensation
(subject to any applicable payroll and/or other taxes required by law to be
withheld) for the balance of the Term as provided for in Section 3.2 hereof;
provided, however, if such termination occurs between February 3, 1997 and
February 2, 1998, Employee shall only be entitled to receive the Annual
Compensation for one (1) year. If the Employee is terminated without cause,
the provisions of Section 6.1(b) hereof shall be of no further force and
effect.
5.6 Change in Control. Notwithstanding any other provisions of
Sections 5.1 through 5.5 hereof, if (i) there is an Acquisition of Control and,
(ii) at any time within three (3) months prior to such Acquisition of Control
or at any time within one (1) year thereafter, either (A) the Employee for any
reason terminates his employment with the Company, or (B) the Employee's
employment is terminated without Cause, then the Employee shall have the
option, but not the obligation, of being paid in cash an amount equal to three
(3) times his Compensation for the then current fiscal year of the Company
(amounts due under this Section 5.6 are referred to as the "Payment"). If the
Employee opts to receive the Payment under this Section 5.6, whether his
employment is terminated by the Company or by himself, the provisions of
Section 6.1(b) hereof shall be of no further force or effect. Subject to the
provisions of Section 5.7 hereof, the Payment shall be made not later than
three (3) months after the Employee gives notice to the Company in the form of
a Termination Notice of his election under this Section 5.6.
5.7 Payments. Notwithstanding anything in the foregoing to the
contrary, if any of the payments provided for in this Agreement, together with
any other payments which the Employee has the right to receive from the
Company, would constitute a "parachute payment" (as defined in Section
280G(b)(2) of the Internal Revenue Code), the payments pursuant to this
Agreement shall be reduced to the largest amount as will result in no portion
of such payments being subject to the excise tax imposed in Section 4999 of the
Internal Revenue Code; provided, however, that the Employee shall have the
absolute discretion to direct the Company to pay any amount which shall be
payable to him pursuant to Section 5.6 hereof in such equal annual installments
as the Employee may direct, with the first such installment payable when such
amount would otherwise have been payable; and further provided that the
Employee shall have the absolute discretion to allocate any reductions required
by this Section 5.7 from amounts due him under Section 5.6 hereof. The Company
shall be obligated to comply with any directions given to it by the Employee
pursuant to the preceding sentence.
VI. CERTAIN RESTRICTIONS ON THE EMPLOYEE
6.1 Certain Restrictions. The Employee covenants and agrees with
the Company as follows:
(a) He shall not at any time, directly and indirectly,
for himself or any other person, firm, corporation, partnership, association or
other entity which competes in any manner with the Company or any of its
subsidiaries or affiliates in the United States of America or its territories
or possessions (collectively, the "Territory"), attempt to employ, employ or
enter into any contractual arrangement for employment with, any employee or
former employee of the Company or any of its subsidiaries or affiliates, unless
such former employee shall not have been employed by the Company or any of its
subsidiaries or affiliates for a period of at least one year.
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(b) He shall not, during the term of this Agreement, and
for a period of twelve (12) months from and after the date of termination of
this Agreement, directly or indirectly, (i) acquire or own in any manner any
interest in, or loan any amount to, any person, firm, partnership, corporation,
association or other entity which competes in any manner with the Company or
any of its subsidiaries or affiliates in the Territory, (ii) be employed by or
serve as an employee, agent, officer, director of, or as a consultant to, any
person, firm, partnership, corporation, association or other entity, other than
the Company and its subsidiaries and affiliates, which competes in any manner
with any of the Company or its subsidiaries or affiliates in the Territory, or
(iii) compete in any manner with the Company or its subsidiaries or affiliates
in the Territory. The foregoing provisions of this Section 6.1(b) shall not
prevent the Employee from acquiring or owning not more than five percent (5%)
of the equity securities of any entity whose securities are listed for trading
on a national securities exchange or are regularly traded in the over-the-
counter securities market.
(c) He shall not at any time disclose, directly or
indirectly, to any person, firm, corporation, partnership, association or other
entity, any confidential information relating to the Company or any of its
subsidiaries or affiliates, including, without limitation, any information
concerning the financial condition, assets, personnel, procedures, techniques,
products, customers, sources of leads and methods of obtaining new business or
the methods generally of doing and operating the respective businesses of the
Company and its subsidiaries and affiliates, trade secrets, product ideas,
processes, techniques, formulas, know-how, marketing plans and strategies,
except to the extent that such information is a matter of public knowledge or
is required to be disclosed by law or judicial or administrative process.
(d) He shall return all Company documents to the Company
upon the termination of his employment by the Company.
6.2 Injunction. It is recognized and acknowledged by each of the
Company and the Employee that a breach or violation by the Employee of any or
all of his covenants and agreements contained in Section 6.1 hereof will cause
irreparable harm and damage to the Company and its subsidiaries and affiliates
in a monetary amount which would be virtually impossible to ascertain. As a
result, the Employee recognizes and acknowledges that the Company and its
subsidiaries and affiliates shall be entitled to a temporary restraining order
and/or injunction from any court of competent jurisdiction enjoining and
restraining any breach or violation by the Employee and/or his affiliates,
employees, associates, partners or agents, either directly or indirectly, of
any or all of the Employee's covenants and agreements contained in Section 6.1
hereof. Such right to a temporary restraining order and/or injunction shall be
cumulative and in addition to whatever other rights or remedies the Company and
its subsidiaries and affiliates may possess hereunder, at law or in equity.
Nothing contained in this Agreement shall be construed to prevent the Company
and its subsidiaries and affiliates from seeking and recovering from the
Employee damages suffered by any or all of them as a result of any breach or
violation by the Employee and/or his affiliates, employees, associates,
partners or agents of any or all of the Employee's covenants and agreements
contained in this Agreement.
6.3 Reduction in Scope. In the event that any of the covenants
and agreements of the Employee contained in Section 6.1 hereof shall be held
invalid or unenforceable by a court of competent jurisdiction because of its
duration or geographic area, then, in any such event, such covenant or
agreement shall be reduced by such court in duration or geographical area or
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both to such extent as to make it valid and enforceable in the jurisdiction
where such court is located, and in all other respects it shall remain in full
force and effect.
VII. ATTORNEYS' FEES
7.1 Prevailing Party. If any litigation shall arise between the
Company and the Employee based, in whole or in part, upon this Agreement or any
or all of the provisions contained herein, the prevailing party in any such
litigation shall be entitled to recover from the non-prevailing party, and
shall be awarded by a court of competent jurisdiction, any and all reasonable
fees and disbursements of trial and appellate counsel paid, incurred or
suffered by such prevailing party as the result of, arising from, or in
connection with, any such litigation.
VIII. MISCELLANEOUS
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without
application of any conflicts of laws principles. The Employee waives any plea
of jurisdiction as not being a resident of, or being located or conducting
business in, Palm Beach County, Florida and agrees that any litigation or
action directly or indirectly connected with this Agreement, shall, at the
Company's election, be subject to binding arbitration administered by the
American Arbitration Association in West Palm Beach, Florida.
7.3 Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Employee with respect to the subject
matter hereof and supersedes all prior negotiations, agreements, understandings
and arrangements, both oral and written, between the Company and the Employee
with respect to such subject matter. This Agreement may not be modified in any
way, except by a written instrument executed by each of the Company and the
Employee.
7.4 Notices. Any and all notices required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given when delivered by hand, sent by a recognized overnight carrier such
as Federal Express or when deposited in the United States mail, by registered
or certified mail, return receipt requested, postage prepaid, as follows:
If to the Company: Rexall Sundown, Inc.
000 Xxxxxx Xxxxx Xxxxxxx, X.X.
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx,
Vice President and General Counsel
If to the Employee: Xxxx X. Xxxxxxx
000 Xxxxxx Xxxxx Xxxxxxx, X.X.
Xxxx Xxxxx, XX 00000
or to such other address as either party may from time to time give written
notice of to the other.
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7.5 Benefits; Binding Effect. This Agreement shall be for the
benefit of, and shall be binding upon, each of the Company and the Employee and
their respective heirs, personal representatives, legal representatives,
successors and assigns.
7.6 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. Except as is otherwise provided in Section 6.3 hereof, if any one or more
of the words, phrases, sentences, clauses or sections contained in this
Agreement shall be declared invalid by a court of competent jurisdiction, then,
in any such event, this Agreement shall be construed as if such invalid word or
words, phrase or phrases, sentence or sentences, clause or clauses, or section
or sections had not been inserted.
7.7 Waivers. The waiver by either party of a breach or violation
of any term or provision of this Agreement by the other party shall not operate
nor be construed as a waiver of any subsequent breach or violation of any
provision of this Agreement nor of any other right or remedy.
7.8 Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of any or all of the provisions of this Agreement.
7.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the separate parties hereto in separate counterparts, each
of which shall be deemed to constitute an original and all of which shall be
deemed to be the one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed and delivered
this Agreement as of February 3, 1997.
REXALL SUNDOWN, INC.
By:
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Xxxxxxxxx X. Xxxx, President
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XXXX X. XXXXXXX
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