Exhibit 10.6(b)
EMPLOYMENT PROTECTION AGREEMENT
THIS EMPLOYMENT PROTECTION AGREEMENT (this "Agreement") is entered into
on December 8, 1997, by and between AMERICAN SAFETY RAZOR COMPANY, a Delaware
corporation (the "Company"), and XXXXXXX X. XXXXXXXXXX, an individual
("Executive").
WITNESSETH:
WHEREAS, Executive is currently employed as the President and Chief
Operating Officer of the Company;
WHEREAS, the board of directors of the Company considers it to be in
the best interests of the Company to xxxxxx the continued employment of certain
key management personnel; and
WHEREAS, the board of directors of the Company recognizes that the
possibility of the sale of the Company exists and, as a result, the board of
directors has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication to the Company of the Executive
as a member of the Company's management team;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
a. "Cause" shall mean any one of the following: (i) the conviction of
Executive of any crime or criminal offense involving monies or other property or
any felony; (ii) the breach by Executive of any of his fiduciary duties of
loyalty as an officer of the Company; (iii) the repeated and willful failure of
Executive to diligently, faithfully and competently perform his duties; and (iv)
the material violation by Executive of the terms of any agreement with the
Company after a reasonable notice of such violation and an opportunity to cure.
b. "Change of Control" shall mean (a) the purchase or other
acquisition, pursuant to the sale process recently approved by the board of
directors of the Company, by any person(s) or entity, within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (excluding, for this purpose, the Jordan Group (defined herein),
the Company or its subsidiaries or any employee benefit plan of the Company or
its subsidiaries), of (i) beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the then-outstanding
shares of voting common stock of the Company, (ii) all or substantially all of
the assets of the Company or (iii) that number of shares of voting common stock
owned by the members of the Jordan Group which results in the Jordan Group
beneficially owning less than three and one-half percent (3.5%) of the then
outstanding voting common stock of the Company, or (b) pursuant to such sale
process, resignation or removal of all the members of the Jordan Group from the
Board of Directors of the Company. Notwithstanding the foregoing, a sale,
spin-off, joint venture or other business combination by the Company, which
involves one or more, but not substantially all, of the Company's divisions or
subsidiaries and is approved by a majority vote of the board of directors of the
Company, shall not be deemed to be a Change of Control.
c. "Effective Date" shall mean the first date on which a Change of
Control occurs. Anything in this Agreement to the contrary notwithstanding, if
Executive's employment with the Company is terminated by the Company and such
termination (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control, or (ii) otherwise arose in
connection with, or in anticipation of, a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.
d. "Jordan Group" shall collectively mean Jordan Industries, Inc.,
The Jordan Company, Leucadia Investors Inc., Jordan/Zalaznick Capital
Corporation, MCIT PLC and their respective partners, shareholders, direct and
indirect subsidiaries, and any other Person that directly or indirectly, through
one or more intermediaries, controls or is controlled by or is under common
control with them, and Xxxx X. Xxxxxx XX, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx,
Xxxx X. Xxxxxx and Xxxxxxxx X. Xxxxxxx. For purposes of this definition, the
term "Person" shall include any single individual, any single entity and, in
either case, their "Affiliates" as that term is defined under the Exchange Act.
2. Duties. While employed by the Company, Executive shall diligently,
faithfully and competently perform the duties of the offices of President and
Chief Operating Officer and shall devote as much of his productive time and
abilities to the performance of such duties as is required to accomplish such
duties.
3. Compensation; Change of Control Payment.
a. While Executive is employed by the Company, the Company will pay
Executive such compensation and benefits as agreed upon from time to time by the
parties hereto.
b. In the event of a Change of Control, on an Effective Date, the
Company shall pay Executive a lump sum in cash consisting of, (i) six month's
base salary (excluding benefits) at the rate in effect as of the Effective Date
and (ii) an amount equal to 50% of Executive's "target" bonus (excluding stock
bonuses or stock options) for the fiscal year in which the Change of Control
occurs (items (i) and (ii) are collectively referred to as the "Change of
Control Payment"). The amounts payable to Executive pursuant to this Section
3(b) shall be in addition to any salary, bonus or benefits payable to or accrued
to Executive as of an Effective Date.
4. Severance Payment.
a. Subject to Sections 6 and 7 hereof, if as of an Effective Date (i)
Executive is not hired by the Company or its successor to serve as President or
such similar position, or within twelve months after such Effective Date, (ii)
Executive's employment is terminated by the Company or its successor for any
reason other than the voluntary termination by Executive, termination of
Executive for cause, or the death of Executive, (iii) the location of the office
where Executive is required to perform the majority of his duties for the
Company is relocated, without Executive's consent, to a location more than 70
miles from Verona, Virginia or (iv) without Executive's concurrence, Executive's
duties as set forth in Section 2 hereof or Executive compensation during the
twelve months prior to an Effective Date are materially reduced (items (i)-(iv)
each being referred to as a "Termination Event"), the Company shall pay
Executive an amount equal to the Change of Control Payment (such amount being
referred to as the "Severance Payment"). All amounts payable by the Company to
Executive pursuant to this Section 4 shall be in addition to any other amounts
payable under this Agreement and shall be paid, at the option of Executive: (A)
in a lump sum in cash within 10 days of the date of the Termination Event; or
(B) in accordance with the payroll schedule of the Company in effect as of the
date of the Termination Event, and, in addition, Executive shall be entitled to
continue to receive, at the Company's cost, the Base Benefits (defined herein)
he receives as of the date of the Termination Event until such time as the
Severance Payment has been paid in full, provided, however, if prior to the full
payment of the Severance Payment, Executive becomes employed with another
entity, upon Executive's delivery of written notice informing the Company of
such employment, the Company shall pay Executive a lump sum in cash equal to the
unpaid amount, if any, of the Severance Payment and Executive shall no longer be
entitled to receive the Base Benefits. As used in this Section 4(a), "Base
Benefits" shall mean life insurance, disability insurance and health insurance.
Pursuant to clause (B) of this Section 4(a), Executive shall not be entitled to
receive any benefits other than the Base Benefits, including, but not limited
to, participation in any 401(k), profit sharing or retirement plans or the
payment or reimbursement of any automobile expenses or social club dues.
b. Executive shall exercise his payment option under Section 4(a) by
delivering written notice to the Company within five (5) days after the date of
the Termination Event, provided, however, in the event Executive fails to
deliver such written notice, the Severance Payment shall be paid in accordance
with clause A of Section 4(a).
5. Stock Options. As of the date of a Termination Event, any stock
options previously granted to Executive under any stock option plan of the
Company or any of its subsidiaries, whether or not vested, shall become
immediately exercisable. Executive shall have one year after the date of the
Termination Event to exercise such options. The provisions of the foregoing
sentence will supersede and amend any inconsistent provision in the terms of any
agreement granting stock options to Executive.
6. Release. As a condition to receiving the amounts payable under
Section 4 and exercising any stock options pursuant to Section 5, Executive must
provide the Company with a release, satisfactory to the Company in its
reasonable discretion, of all claims, charges and causes of action Executive may
have arising out of or relating in any way to Executive's employment by the
Company and its affiliated companies and the termination of such employment.
7. Termination. Except as may otherwise be provided below, the
employment of Executive by the Company is "at will" and, prior to an Effective
Date, Executive's employment may be terminated by either the Executive or the
Company, in which case Executive shall have no further rights under this
Agreement (except as provided in the next sentence) and the Company shall be
released from its obligations under this Agreement. Notwithstanding the previous
sentence, if the Company shall terminate Executive's employment without Cause
within 120 days of an Effective Date, subject to the terms of Sections 6, 8 and
9, Executive shall be entitled to receive the benefit of this Agreement. This
Agreement shall expire on December 31, 2002, unless sooner terminated as
provided for above and upon such expiration, Executive shall have no further
rights under his Agreement and the Company shall be released from its
obligations under this Agreement. Notwithstanding anything contained in this
Agreement to the contrary, Sections 8 and 9 of this Agreement shall survive the
termination or expiration of this Agreement.
8. Restrictive Covenants. In consideration of this Agreement, Executive
agrees that for the one year period after his employment is terminated for any
reason, Executive shall not:
a. directly or indirectly, either individually or as a principal,
partner, agent, employee, employer, consultant, stockholder, joint venturer, or
investor, or as a director or officer of any corporation or association, or in
any other manner or capacity whatsoever, engage in, assist or have any active
interest in a business located anywhere in United States, Israel, Germany, the
Dominican Republic, Puerto Rico, Canada, Mexico or the United Kingdom that
manufactures or distributes razor blades, razors, cotton fiber products in the
health and beauty aids business segment, or foot care or soap products in the
health and beauty aids business segment, or that otherwise competes with or is
substantially similar in concept, design, format, or otherwise to the business
conducted by the Company and its subsidiaries on the date hereof or at any time
prior to the date on which Executive's employment is terminated. Notwithstanding
the above, this paragraph shall not be construed to prohibit Executive from
owning less than three percent (3%) of the outstanding securities of a
corporation which is publicly traded on a securities exchange or
over-the-counter.
b. directly or indirectly, either individually, or as a principal,
partner, agent, employee, employer, consultant, stockholder, joint venturer, or
investor, or as a director or officer of any corporation or association, or in
any other manner or capacity whatsoever, (i) divert or attempt to divert from
the Company any business with any customer or account with which Executive had
any contact or association, which was under the supervision of Executive, or the
identity of which was learned by Executive as a result of Executive's employment
with the Company, or (ii) induce
any salesperson, distributor, supplier, vendor, manufacturer, representative,
agent, jobber or other person transacting business with the Company to terminate
their relationship or association with the Company, or to represent, distribute
or sell services or products in competition with services or products that are
provided by or produced by the Company at any time prior to the date on which
Executive's employment is terminated, or (iii) induce or cause any employee of
the Company or its affiliates to leave the employ of the Company or any
affiliate of the Company.
9. Non-Disclosure. Executive shall not at any time or in any manner,
directly or indirectly, use or disclose to any party other than the Company, it
subsidiaries or their successors any trade secrets or other confidential
information (defined herein) learned or obtained by him while a stockholder,
officer or director of the Company. As used herein, the term "Confidential
Information" means information disclosed to or known by Executive as a
consequence of his position with the Company and not generally known in the
industry in which the Company or its subsidiaries are engaged and that in any
relates to the Company's or any of its subsidiaries' products, processes,
services, inventions (whether patentable or not), formulas, techniques or
know-how, including, but not limited to, information relating to distribution,
systems and methods, research, development, manufacturing, purchasing,
accounting, engineering, marketing, merchandising and selling. Executive
acknowledges that the release of any Confidential Information of the Company,
any of its subsidiaries or their successors to unauthorized persons would be
extremely detrimental to the Company and agrees to use its best efforts to
safeguard such Confidential Information from unauthorized persons. Upon a
Termination Event, or whenever the Company shall request, Executive shall
deliver and return promptly to the Company all tangible embodiments (including
all copies) of the Confidential Information in the possession or under the
control of Executive.
10. Successors.
a. This Agreement shall inure to the benefit of and be enforceable by
Executive and Executive's legal representative.
b. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
c. The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation, sale of assets or otherwise) to all or
substantially all of the business and/or assets of the Company 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. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Mitigation. The Company acknowledges and agrees that in the event
of a Termination Event, Executive shall not be required to mitigate the amount
of the Severance Payment by seeking other employment or otherwise.
12. Miscellaneous.
a. This Agreement shall be governed by and construed in accordance with
the laws of the state of Virginia, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
b. This Agreement may be amended, changed or modified only pursuant to
a written document signed by both the Company and the Executive.
c. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Xxxxxxx X. Xxxxxxxxxx
0 Xxx Xxxx Xxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
If to the Company:
American Safety Razor Company
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
Notices and communications shall be effective at the time they are given in the
foregoing manner.
d. The Company shall withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as may be required to be
withheld pursuant to any applicable law or regulation.
e. A party's failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to
assert any right hereunder shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.
f. If any legal action or other proceeding is commenced to enforce or
interpret any provision of, or otherwise relating to this Agreement, the losing
party shall pay the prevailing party's reasonable expenses incurred in the
investigation of any claim leading to the proceeding, preparation for and
participation in the proceeding, any appeal or other post judgment motion and
any action to enforce or collect the judgment, including contempt, garnishment,
levy, discovery or bankruptcy. "Expenses" shall include, without limitation,
reasonable court or other proceeding costs and reasonable experts' and
reasonable attorneys' fees and their expenses. The phrase "prevailing party"
shall mean the party who is determined in the proceeding to have prevailed and
who prevails by dismissal, default or otherwise.
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IN WITNESS WHEREOF, the foregoing Agreement was executed on December 8,
1997.
AMERICAN SAFETY RAZOR COMPANY
By:/s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx, Chairman of
the Board and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxxxx
