Executive Employment Agreement
EXHIBIT
10.1
| 1. |
Employment.
|
Employer
agrees to employ Executive and Executive accepts such employment for the period
beginning as of August 21, 2006 and ending upon her separation pursuant to
Section
1(c)
hereof
(the “Employment
Period”).
(a) Position
and Duties.
(i) During
the Employment Period, Executive shall serve as the Senior Vice President,
Quality and Regulatory Affairs of Employer and shall have the normal duties,
responsibilities and authority implied by such position, subject to the power
of
the Chief Executive Officer of Employer and the Board to expand or limit such
duties, responsibilities and authority and to override such
actions.
(ii) Executive
shall report to the Chief Executive Officer of Employer, and Executive shall
devote her best efforts and her full business time and attention to the business
and affairs of the Company, Employer and their Subsidiaries.
(b) Salary,
Bonus and Benefits. During
the Employment
Period, Employer will pay Executive a base salary of $225,000 per annum (the
“Annual
Base Salary”).
In
addition, the Executive shall be eligible for and participate in the Annual
Incentive Compensation Plan (the “Annual Bonus”) under which the Executive shall
be eligible for an annual Target Bonus payment of 45% of Annual Base Salary.
Executive is eligible for the Long Term Incentive Plan of the company and upon
execution of this Agreement Executive shall receive an initial award calculated
as follows: (a) Restricted Stock in the Company to vest over three years
conditioned on the performance criteria specified in Exhibit “A” where the
number of shares awarded is determined by dividing $45,000 by the Closing price
of the Stock on August 21st
2006.
During the Employment Period, Executive will be entitled to such other benefits
approved by the Board and made available to the senior management of the
Company, Employer and their Subsidiaries,
which
shall include vacation time (four weeks per year - two weeks for the balance
of
calendar 2006) and medical, dental, life and disability insurance. The Board,
on
a basis consistent with past practice, shall review the Annual Base Salary
of
Executive and may increase the Annual Base Salary by such amount as the Board,
in its sole discretion, shall deem appropriate. The term “Annual Base Salary” as
used in this Agreement shall refer to the Annual Base Salary as it may be so
increased.
(c) Separation. The
Employment Period
will continue until (i) Executive’s death, disability or resignation from
employment with the Company, Employer and their respective Subsidiaries or
(ii)
the Company, Employer and their respective Subsidiaries decide to terminate
Executive’s employment with or without Cause. If (A) Executive’s employment is
terminated without Cause pursuant to clause (ii)
above or
(B) Executive resigns from employment with the Company, Employer or any of
their
respective Subsidiaries for Good Reason, then during the period commencing
on
the date of termination of the Employment Period and ending on the first
anniversary of the date of termination (the “Severance
Period”),
Employer shall pay to Executive, in equal installments on the Employer’s regular
salary payment dates, an aggregate amount equal to (I) her Annual Base Salary,
plus (II) an amount equal to the Annual Bonus, if any, paid or payable to
Executive by Employer for the last fiscal year ended prior to the date of
termination. Notwithstanding the foregoing, during the first year of employment
only, for the purposes of this Section
1(c)
the
Annual Bonus paid or payable to Executive by Employer for the last fiscal year
ended prior to the date of termination shall be deemed to be the full Target
Bonus. In addition, if Executive is entitled on the date of termination to
coverage under the medical and prescription portions of the Welfare Plans,
such
coverage shall continue for Executive and Executive’s covered dependents for a
period ending on the first anniversary of the date of termination at the active
employee cost payable by Executive with respect to those costs paid by Executive
prior to the date of termination; provided,
that
this coverage will count towards the depletion of any continued health care
coverage rights that Executive and Executive’s dependents may have pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”);
provided
further,
that Executive’s or Executive’s covered dependents’ rights to continued health
care coverage pursuant to this Section
1(c)
shall
terminate at the time Executive or Executive’s covered dependents become
covered, as described in COBRA, under another group health plan, and shall
also
terminate as of the date Employer ceases to provide coverage to its senior
executives generally under any such Welfare Plan. Notwithstanding the foregoing,
(I) Executive shall not be entitled to receive any payments or benefits pursuant
to this Section
1(c)
unless
Executive has executed and delivered to Employer a general release in form
and
substance satisfactory to Employer and (II) Executive shall be entitled to
receive such payments and benefits only so long as Executive has not breached
the provisions of Section
2
or
Section
3
hereof.
The release described in the foregoing sentence shall not require Executive
to
release any claims for any vested employee benefits, workers compensation
benefits covered by insurance or self-insurance, claims to indemnification
to
which Executive may be entitled under the Company’s or its Subsidiaries’
certificate(s) of incorporation, by-laws or under any of the Company’s or its
Subsidiaries’ directors or officers insurance policy(ies) or applicable law, or
equity claims to contribution from the Company or its Subsidiaries or any other
Person to which Executive is entitled as a matter of law in respect of any
claim
made against Executive for an alleged act or omission in Executive’s official
capacity and within the scope of Executive’s duties as an officer, director or
employee
of the Company or its Subsidiaries. Not later than eighteen (18) months
following the termination of Executive’s employment, the Company and its
Subsidiaries for which the Executive has acted in the capacity of a senior
manager, shall sign and deliver to Executive a release of claims that the
Company or its Subsidiaries has against Executive; provided
that,
such
release shall not release any claims that the Company or its Subsidiaries
commenced prior to the date of the release(s), any claims relating to matters
actively concealed by Executive, any claims to contribution from Executive
to
which the Company or its Subsidiaries are entitled as a matter of law or
any
claims arising out of mistaken indemnification by the Company or any of
its
Subsidiaries. Except as otherwise provided in this Section
1(c)
or in
the Employer’s employee benefit plans or as otherwise required by applicable
law, Executive shall not be entitled to any other salary, compensation
or
benefits after termination of Executive’s employment with Employer.
2. Confidential
Information.
(a) Obligation
to Maintain Confidentiality. Executive
acknowledges
that the information, observations and data (including trade secrets) obtained
by her during the course of her performance under this Agreement concerning
the
business or affairs of the Company, Employer and their respective Subsidiaries
and Affiliates (“Confidential
Information”)
are
the property of the Company, Employer or such Subsidiaries and Affiliates,
including information concerning acquisition opportunities in or reasonably
related to the Company’s and Employer’s business or industry of which Executive
becomes aware during the Employment Period. Therefore, Executive agrees that
she
will not disclose to any unauthorized Person or use for her own account (for
his
commercial advantage or otherwise) any Confidential Information without the
Board’s written consent, unless and to the extent that the Confidential
Information, (i) becomes generally known to and available for use by the public
other than as a result of Executive’s acts or omissions to act, (ii) was known
to Executive prior to Executive’s employment with Employer, the Company or any
of their Subsidiaries and Affiliates or (iii) is required to be disclosed
pursuant to any applicable law, court order or other governmental decree.
Executive shall deliver to the Company at a Separation, or at any other time
the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or
the
business of the Company, Employer and their respective Subsidiaries and
Affiliates (including, without limitation, all acquisition prospects, lists
and
contact information) which she may then possess or have under her
control.
(b) Ownership
of Property. Executive
acknowledges
that all discoveries, concepts, ideas, inventions, innovations, improvements,
developments, methods, processes, programs, designs, analyses, drawings,
reports, patent applications, copyrightable work and mask work (whether or
not
including any Confidential Information) and all registrations or applications
related thereto, all other proprietary information and all similar or related
information (whether or not patentable) that relate to the Company’s, Employer’s
or any of their respective Subsidiaries’ or Affiliates’ actual or anticipated
business, research and development, or existing or future products or services
and that are conceived, developed, contributed to, made, or reduced to practice
by Executive (either solely or jointly with others) while employed by the
Company, Employer or any of their respective Subsidiaries or Affiliates
(including any of the foregoing that constitutes any proprietary information
or
records) (“Work
Product”)
belong
to the Company, Employer or such Subsidiary or Affiliate and Executive hereby
assigns, and agrees to assign, all of the above Work Product to the Company,
Employer or to such Subsidiary or Affiliate. Any copyrightable work prepared
in
whole or in part by Executive in the course of her work for any of the foregoing
entities shall be deemed a “work made for hire” under the copyright laws, and
the Company, Employer or such Subsidiary or Affiliate shall own all rights
therein. To the extent that any such copyrightable work is not a “work made for
hire,” Executive hereby assigns and agrees to assign to the Company, Employer or
such Subsidiary or Affiliate all right, title, and interest, including without
limitation, copyright in and to such copyrightable work. Executive shall
promptly disclose such Work Product and copyrightable work to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm the Company’s, Employer’s or
such Subsidiary’s or Affiliate’s ownership (including, without limitation,
assignments, consents, powers of attorney, and other instruments).
(c)
Third
Party Information. Executive
understands
that the Company, Employer and their respective Subsidiaries and Affiliates
will
receive from third parties confidential or proprietary information
(“Third
Party Information”)
subject to a duty on the Company’s, Employer’s and their respective
Subsidiaries’ and Affiliates’ part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the
Employment Period and thereafter, and without in any way limiting the provisions
of Section
2(a)
above,
Executive will hold Third Party Information in the strictest confidence and
will
not disclose to anyone (other than personnel and consultants of the Company,
Employer or their respective Subsidiaries and Affiliates who need to know such
information in connection with their work for the Company, Employer or any
of
their respective Subsidiaries and Affiliates) or use, except in connection
with
her work for the Company, Employer or any of their respective Subsidiaries
and
Affiliates, Third Party Information unless expressly authorized by a member
of
the Board (other than herself if Executive is on the Board) in
writing.
(d)
Use of
Information of Prior Employers. During
the Employment
Period and thereafter, Executive will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employers
or
any other Person to whom Executive has an obligation of confidentiality, and
will not bring onto the premises of the Company, Employer or any of their
respective Subsidiaries or Affiliates any unpublished documents or any property
belonging to any former employer or any other Person to whom Executive has
an
obligation of confidentiality unless consented to in writing by the former
employer or Person. Executive will use in the performance of her duties only
information which is (i) generally known and used by persons with training
and
experience comparable to Executive’s and which is (x) common knowledge in the
industry or (y) otherwise legally in the public domain, (ii) otherwise provided
or developed by the Company, Employer or any of their respective Subsidiaries
or
Affiliates or (iii) in the case of materials, property or information belonging
to any former employer or other Person to whom Executive has an obligation
of
confidentiality, approved for such use in writing by such former employer or
Person.
3.
Non-competition and No Solicitation. Executive
acknowledges that in the course of her employment with Employer she will become
familiar with the Company’s, Employer’s and their respective Subsidiaries’ trade
secrets and with other confidential information concerning the Company, Employer
and such Subsidiaries and that her services will be of special, unique and
extraordinary value to the Company, Employer and such Subsidiaries. Therefore,
Executive agrees that:
(a)
Non-competition. During
the Employment
Period and also during the period commencing on the date of termination of
the
Employment Period and ending on the first anniversary of the date of
termination, she shall not without the express written consent of the Company,
anywhere in the United States, directly or indirectly, own, manage, control,
participate in, consult with, render services for, or in any manner engage
in
any business (i) competing with a brand of the Company, Employer, Medtech
Products, Inc., The Denorex Company, The Spic and Span Company, The Comet
Products Corporation, Prestige Brands International, Inc., Vetco, Inc., or
any
business acquired by such Persons, or any Subsidiaries of such Persons,
representing 10% or more of the consolidated revenues or EBITDA of the Company
and its Subsidiaries for the trailing 12 months ending on the last day of the
last completed calendar month immediately preceding the date of termination
of
the Employment Period (collectively “The Prestige Companies”) or (ii) in which
The Prestige Companies have conducted discussions or has requested and received
information relating to the acquisition of such business by such Person (x)
within one year prior to the Separation and (y) during the Severance Period,
if
any. Nothing herein shall prohibit Executive from being a passive owner of
not
more than 2% of the outstanding stock of any class of a corporation that is
publicly traded, so long as Executive has no active participation in the
business of such corporation
(b)
No solicitation. During
the Employment
Period and also during the period commencing on the date of termination
of the
Employment Period and ending on the first anniversary of the date of
termination, Executive shall not directly or indirectly through another
entity
(i) induce or attempt to induce any employee of The Prestige Companies
to leave
the employ of the Company, Employer or any subsidiary, or in any way interfere
with the relationship between The Prestige Companies and any employee thereof,
(ii) hire any person who was an employee of The Prestige Companies within
180
days after such person ceased to be an employee of the Company, Employer
or any
of their respective Subsidiaries (provided,
however,
that
such
restriction shall not apply for a particular employee if the Company has
provided its written consent to such hire, which consent, in the case of
any
person who was not a key employee of The Prestige Companies shall not be
unreasonably withheld), (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of The Prestige Companies
to cease
doing business with The Prestige Companies or in any way interfere with
the
relationship between any such customer, supplier, licensee or business
relation
and The Prestige Companies or (iv) directly or indirectly acquire or attempt
to
acquire an interest in any business relating to the business of The Prestige
Companies and with which The Prestige Companies has conducted discussions
or has
requested and received information relating to the acquisition of such
business
by The Prestige Companies in the two year period immediately preceding
a
Separation.
(c)
Enforcement. If,
at the time of
enforcement of Section
2
or this
Section
3,
a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum duration, scope
or
geographical area reasonable under such circumstances shall be substituted
for
the stated period, scope or area and that the court shall be allowed
to revise
the restrictions contained herein to cover the maximum duration, scope
and area
permitted by law. Because Executive’s services are unique and because Executive
has access to Confidential Information, the parties hereto agree that
money
damages would be an inadequate remedy for any breach of this Agreement.
Therefore, in the event of a breach or threatened breach of this Agreement,
the
Company, Employer, their respective Subsidiaries or their successors
or assigns
may, in addition to other rights and remedies existing in their favor,
apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security).
(d)
Additional Acknowledgments. Executive
acknowledges
that the provisions of this Section
1
are in
consideration of: (i) employment with the Employer, (ii) the prospective
issuance of Securities by the Company pursuant to the Long Term Incentive
Compensation Program and (iii) additional good and valuable consideration
as set
forth in this Agreement. In addition, Executive agrees and acknowledges
that the
restrictions contained in Section
2
and this
Section
3
do not
preclude Executive from earning a livelihood, nor do they unreasonably
impose
limitations on Executive’s ability to earn a living.
In
addition,
Executive acknowledges (i) that the business of the Company, Employer and
their
respective Subsidiaries will be conducted throughout the United States, (ii)
notwithstanding the state of incorporation or principal office of the Company,
Employer or any of their respective Subsidiaries, or any of their respective
executives or employees (including the Executive), it is expected that the
Company and Employer will have business activities and have valuable business
relationships within its industry throughout the United States and (iii)
as part
of her responsibilities, Executive will be traveling throughout the United
States in furtherance of Employer’s business and its relationships. Executive
agrees and acknowledges that the potential harm to the Company and Employer
of
the non-enforcement of Section
2
and this
Section
3
outweighs any potential harm to Executive of its enforcement by injunction
or
otherwise. Executive acknowledges that she has carefully read this Agreement
and
has given careful consideration to the restraints imposed upon Executive
by this
Agreement, and is in full accord as to their necessity for the reasonable
and
proper protection of confidential and proprietary information of the Company,
Employer and their Subsidiaries now existing or to be developed in the future.
Executive expressly acknowledges and agrees that each and every restraint
imposed by this Agreement is reasonable with respect to subject matter, time
period and geographical area.
IN
WITNESS WHEREOF, the parties hereto have executed this Executive Employment
Agreement on the date first written above.
PRESTIGE
BRANDS
HOLDINGS, INC.
By:
/s/
Xxxxx X.
Xxxx
Name:
Xxxxx X.
Xxxx
Title:
Chairman and
Chief Executive Officer
/s/ Xxxx X. Xxxxx
Xxxx
X. Xxxxx
DEFINITIONS
"Cause"
is defined as (i) your willful and continued failure to substantially perform
your duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness) that has not been cured within
10
days after a written demand for substantial performance is delivered to you
by
the Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, (ii) the willful
engaging by you in conduct which is demonstrably and materially injurious to
the
Company or its affiliates, monetarily or otherwise, (iii) your conviction (or
plea of nolo contendere) for any felony or any other crime involving dishonesty,
fraud or moral turpitude, (iv) your breach of fiduciary duty to the Company
or
its affiliates, (v) any violation of the Company's policies relating to
compliance with applicable laws which have a material adverse effect on the
Company or its affiliates or (vi) your breach of any restrictive covenant.
For
purposes of clauses (i) and (ii) of this definition, (x) no act, or failure
to
act, on your part shall be deemed "willful" unless done, or omitted to be done,
by you not in good faith and without reasonable belief that your act, or failure
to act, was in the best interest of the Company.
"Good
Reason" is defined as, without your consent, (i) the assignment to you of any
duties inconsistent with your status as the Senior Vice President Quality and
Regulatory Affairs or a substantial adverse alteration in the nature or status
of the your responsibilities, unless the Company has cured such events within
10
business days after the receipt of written notice thereof from you, (ii) a
reduction in your annual base salary or target annual bonus percentage, except
for across-the-board salary reductions similarly affecting all senior Company
executives, or (iii) the relocation of the Company's headquarters by more than
30 miles.
