1
EXHIBIT 10.11
-------------
EMPLOYMENT AGREEMENT
BETWEEN
EKCO HOUSEWARES, INC.
AND
XXXXXX XXXXXXXX
AS OF
SEPTEMBER 25, 1996
SECTION PAGE
1. Employment 1
2. Term 2
3. Compensation 2
4. Reimbursement of Expenses 4
5. Termination Upon Death or Disability 5
6. Termination by Executive or Company 6
7. Confidentiality and Non-Competition 13
8. Arbitration 17
9. General 17
2
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 25th day of September, 1996 (hereinafter the
"Effective Date") by and between Ekco Housewares, Inc., a Delaware corporation
with a principal place of business in Franklin Park, Illinois (hereinafter the
"Company"), and Xxxxxx Xxxxxxxx of 00 Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxx Xxxxxx
00000 (hereinafter "Executive").
WHEREAS, Ekco Capital Enterprises, Inc. and Executive entered into an
employment agreement dated February 28, 1994 ("Former Agreement"), and now each
wish to replace the Former Agreement with this Employment Agreement ("Agreement"
or "Employment Agreement"), except as specifically indicated below; and
WHEREAS, Company desires to employ Executive, pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the parties covenant and agree as follows:
1. EMPLOYMENT
Company, or its successor hereby employs Executive and Executive hereby
accepts employment as an executive employee of Company to perform such executive
and managerial services as may be assigned to him by or under the authority of
the Board of Directors of Company (the "Board of Directors"), consistent with
such status as an executive employee. Executive agrees to use his best efforts,
skills and abilities faithfully to promote the interests of Company and to
perform such services as may be required of him by Company from time to time
consistent with his status. Executive shall report to and obey the lawful
directions of the Chairman and Chief Executive Officer of Ekco Group, Inc.
("Group"). Without limiting the generality of the foregoing, Executive agrees to
serve as Senior Vice President, Sales and Marketing of the Company and as
President of B. Via International Housewares (if and so long as he is elected to
those offices by the Board of Directors) and to serve (without additional
compensation) as a director, executive officer or executive employee of such
Affiliates of Company as Company may from time to time reasonably request,
provided that Executive consents thereto and that service for such Affiliates
will not require Executive to devote substantial time and effort to their
affairs. Further, without limiting the generality of the foregoing, if Executive
is asked by the Company to assume a position other than Senior Vice President,
Sales and Marketing, which position has greater responsibility than the position
of Senior Vice President, Sales and Marketing, in good faith the Company and
Executive
3
agree to renegotiate the compensation to which Executive is entitled under this
Agreement, and if compensation is agreed upon Executive agrees to assume such
position. Failing such agreement, Executive will continue to serve as Senior
Vice President, Sales and Marketing of the Company and as President of B. Via
International Housewares pursuant to this Agreement. Executive agrees to devote
his full business time and energies to the business and affairs of Company and
to work exclusively for Company (and such Affiliates) during the term of this
Agreement, except as Company and Executive may otherwise agree in writing from
time to time; provided, however, that nothing contained in this Section 1 shall
be deemed to prevent or limit the right of Executive to: (i) make passive
investments in the securities of any publicly-owned corporation, and (ii) make
any other passive investments with respect to which Executive is not obligated
or required to, and does not in fact, devote any substantial managerial efforts
which interfere with Executive's fulfillment of his duties hereunder.
Executive shall perform the duties of his office generally in the Chicago
Metropolitan area; provided, however, that he shall be obligated to take such
trips outside of such area as shall be necessary in connection with his duties.
2. TERM
Executive's employment hereunder shall commence on the Effective Date and
shall continue under the provisions of this Agreement until December 31, 1999;
or as earlier terminated as hereinafter set forth. If this Agreement is not
terminated on or prior to December 31, 1999, this Agreement shall automatically
renew on December 31, 1999 and annually thereafter for periods of one year,
unless terminated as provided herein (the "Term"). It is expressly acknowledged,
understood and agreed that the Former Agreement shall be replaced by this
Agreement and the Former Agreement shall be terminated and be given no further
force or effect, effective as of the Effective Date.
3. COMPENSATION
3.1 Except as otherwise provided in Sections 5 and 6 hereof, for his
services hereunder Executive shall receive from Company the following
compensation:
3.1.1 For 1997, 1998 and 1999, salary at the annual rate of Three Hundred
Thousand Dollars ($300,000) (the "Base Salary Rate"), payable in equal
installments in accordance with Company's pay policy and in any event
not less frequently than monthly; for all years after 1999, Executive's
salary will be determined by the
- 2 -
4
Board of Directors, but will be increased at least five percent (5%)
per year.
3.1.2 Executive may become eligible for bonus payments as follows:
A. FOR THE REMAINDER OF 1996. For the year ending December 31, 1996,
Executive shall be paid a bonus equal to the greater of One Hundred and
Fifty Thousand Dollars ($150,000) or two percent (2%) of net sales of
Ekco Capital Enterprises, Inc. for the 1996 fiscal year of Ekco Capital
Enterprises, Inc. This bonus shall be paid on or before March 1, 1997.
B. FOR 1997. For the year ending December 31, 1997, Executive shall be
paid a guaranteed bonus of Two-Hundred Thousand Dollars ($200,000);
provided, however, that if Executive's employment terminates for any
reason other than termination by Company for "good cause" pursuant to
Section 6.2.2, the bonus to be paid to Executive pursuant to this
Section 3.1.2(B) shall be prorated based on the number of days
Executive was employed during the year ending December 31, 1997. This
bonus shall be paid on or before March 1, 1998.
C. FOR 1998 AND 1999. No bonus potential.
D. FOR ALL YEARS AFTER 1999. Beginning with respect to the year ending
December 31, 2000 and for each subsequent year during the Term,
Executive shall be paid a bonus, on or before March 1 of the following
year, in such amount, if any, as the Board of Directors of Group (or
the Compensation Committee thereof) may determine annually in its
discretion.
3.1.3 Fringe benefits, including four weeks per year vacation time, life,
medical and dental insurance, and 401(k) retirement plan participation
similar in nature and benefits as those provided to other executive
employees of subsidiaries of Ekco Group, Inc. ("Group").
3.1.4 The use of a Company-owned or leased automobile having a cost as
delivered to Executive of not more than Fifty Thousand Dollars
($50,000) for use by Executive primarily in connection with the
performance of his duties under this Agreement and primarily for the
benefit of Company. Such automobile shall be exchanged by Company for
a new automobile once every three (3) years during the term of
employment of Executive pursuant to this
- 3 -
5
Agreement. Company will maintain this automobile and provide Executive
with insurance and reimbursement for business related fuel usage in the
course of his employment. At the Company's option, the requirements of
this Section 3.1.4 may be satisfied by the Company by the payment to
Executive of one thousand dollars ($1,000) per month for expenses
relating to the use and maintenance of an automobile.
3.1.5 Such other compensation pursuant to such executive bonus plans, stock
option plans or other stock plans, available to employees of Company
from time to time, as the Board of Directors may in its sole discretion
determine.
4. REIMBURSEMENT OF EXPENSES
4.1.1 Company shall reimburse Executive for travel, entertainment and other
business expenses reasonably incurred by him in connection with the
business of Company and its Affiliates to the extent and in a manner
consistent with then Company policy. Notwithstanding the foregoing, it
is understood and agreed that Executive may travel first class on any
flight to and from the United States to the Far East and business class
on any flight to and from the United States to a location outside of
North America and on any other international flight to and from a
location outside of North America.
4.1.2 Company shall reimburse Executive (or pay directly, if Executive so
elects) for rent of a furnished apartment (including cleaning service)
in the Chicago metropolitan area, in a reasonable amount. In addition,
Company shall reimburse Executive for the cost of once weekly
round-trip business class air travel for one person between New Jersey
and Chicago.
4.1.3 If Executive decides to relocate to the Chicago metropolitan area,
Company shall reimburse Executive for moving and relocation expenses,
including the hiring of a moving company, to the Chicago metropolitan
area, consistent with Company's relocation and moving policies for
executive employees, a copy of which is attached to this Agreement.
Without limiting the generality of the foregoing, upon Executive's
relocation to the Chicago metropolitan area, Company shall reimburse
Executive for the difference between $775,000 and the proceeds
received by Executive (net of all customary closing costs such as
broker commissions, legal fees and
- 4 -
6
transfer taxes) upon sale of his Pine Brook residence.
4.1.4 Company shall reimburse Executive for up to $5,000 of his out-of-pocket
expenses incurred in connection with the review of this Agreement by
his attorneys.
5. TERMINATION UPON DEATH OR DISABILITY
5.1 Executive's employment by Company shall terminate upon the death of
Executive, or if, by virtue of total and permanent disability, Executive is
unable to perform his duties hereunder.
5.2 In the event of such a termination of employment as a result of Executive's
death or total and permanent disability, all compensation hereunder shall
terminate and Company shall have no further obligations hereunder except
that Company shall pay to Executive (or his estate) the following:
5.2.1 In the event of death, a lump-sum payment equal to the Base Salary
Rate in effect at the date of such termination of employment, payable
no later than sixty (60) days after the date of such termination.
Company may purchase insurance with respect to its obligations pursuant
to this Section 5.2.1, and to the extent benefits are paid pursuant to
such insurance, Company's commitment under this Section 5.2.1 shall be
satisfied; and
5.2.2 In the event of total and permanent disability, amounts in lieu of
Salary, at the Base Salary Rate in effect at the date of such
termination of employment, payable in the manner specified in Section
3.1.1, for a period of twelve (12) months following the date of such
termination of employment at the rate of one-twelfth of such Base
Salary Rate per month; and
5.2.3 Such portion of Executive's Salary, as has accrued by virtue of
Executive's employment during the period prior to termination and has
not yet been paid, together with any amounts for expense reimbursement
and similar items which were properly incurred in accordance with the
provisions of Section 4 prior to termination and have not yet been paid.
5.3 Amounts to which Executive would otherwise be entitled under Section 5.2.2
above shall be reduced by the amount of any disability insurance proceeds
actually paid to or for the benefit of Executive (or his estate or legal
representatives) with respect to such twelve (12) months following the date
of termination under any disability
- 5 -
7
policy the premiums for which have been paid by Company or any Affiliate.
5.4 The determination that, by virtue of total and permanent disability,
Executive is unable to perform his duties hereunder shall be made by a
physician chosen by Executive (or his legal representative) and reasonably
satisfactory to Company. The cost of such examination shall be borne by
Company. Without limiting the generality of the foregoing, unless otherwise
agreed, Executive shall be conclusively presumed to be totally and
permanently disabled hereunder if for reasons involving mental or physical
illness or physical injury he fails to perform such duties for a period of
one hundred and eighty (180) consecutive calendar days or for any periods
aggregating six (6) months or more in any twelve (12) month period. For
purposes of this Section 5, Executive's date of termination in the event of
such total and permanent disability shall be the earlier of the date of
such physician's examination pursuant to which such determination is made
or the first business day after which either such 180-day or such six-month
period has expired.
6. TERMINATION BY EXECUTIVE OR COMPANY
6.1 Executive's employment may be terminated at any time by Executive by
written notice of at least three (3) months to Company, which time period
may be waived by Company in its discretion. If such notice is not given
after a Change of Control as discussed in the following sentence, Executive
shall be entitled to no further payments hereunder other than the payment
of any bonus Executive may be entitled to pursuant to Section 3.1.2(B). If
such notice is given after six (6) months of but within twenty four (24)
months of a Change of Control (as defined in Section 6.4) (a "Change of
Control Notice"), and unless such Change of Control shall have been
approved by a resolution adopted by the Board of Directors of Group with at
least two-thirds (2/3) of the then-serving Group directors who are Group
directors as of the date hereof voting in favor, then upon such termination
by Executive pursuant to this paragraph of this Section 6.1, Executive (or
his estate, if he dies prior to receiving the payments hereinafter set
forth in this sentence) shall be entitled to receive within thirty (30)
days of such termination (a) a lump-sum payment equal to three (3) times
the Base Salary Rate in effect on the date of such termination, plus (b) a
lump sum cash payment equal to (i) three (3) times the greater of (i)
$150,000, or (ii) the bonus received by Executive for the fiscal year prior
thereto. For the purposes of this Section 6.1, the time when a
- 6 -
8
termination occurs shall be the effective date of termination of Executive.
In addition, in the event of such a termination pursuant to a Change of
Control Notice, Company shall provide, and Executive shall continue to be
entitled to receive, such medical, dental and life insurance coverage as he
shall have been receiving pursuant to Section 3.1.3 as of the date of his
Change of Control Notice until the earlier of (x) his full-time employment
by a third party who offers Executive at least comparable benefits in the
particular benefit category or (y) three (3) years following such date of
termination, but only to the extent Company is able to continue the
applicable coverage of Executive under the terms of such group policies or
other policies providing coverage for Executive. Notwithstanding any other
provision in this Section 6.1, in the event Company is unable to continue
the applicable coverage of Executive under the terms of the applicable
policies, then Company shall cooperate with Executive in any actions which
may be necessary to allow Executive, to the extent possible, either (i) to
buy such policy or (ii) to continue insurance coverage with the insurer
writing Company's applicable group policy outside of Company's group plan.
Group shall pay to Executive 140% of the cost of such insurance coverage,
but in no event more than twice the cost of such coverage allocable to
Executive under the group or other policy covering him prior to
termination. In the event of termination as provided in this Section 6.1
Executive shall be entitled as of the date of termination or thereafter to
no other compensation under this Agreement (including, without limitation,
Section 4 or Section 6), except as provided in this Section 6.1, Section
6.3 and Section 6.3.1, and except as provided in Section 7.5 in the event
that Company exercises the option granted therein. Any compensation payable
under this Section 6.1 shall be paid notwithstanding Executive's total and
permanent disability or death occurring after termination of his employment
hereunder. In the event Executive dies or becomes totally and permanently
disabled after the date of any such notice but prior to the date of
termination of his employment under this Section 6.1, the provisions of
this Section 6.1 and not the provisions of Section 5 shall apply.
6.2 Executive's employment may be terminated at any time by Company, with or
without good cause (as defined below), by written notice to Executive,
effective immediately unless otherwise stated in such notice.
6.2.1 In the event Executive's employment hereunder is terminated by
Company without "good cause," at any time during the Term prior to any
Change of Control (as defined in Section 6.4) or in the event this
-7-
9
Agreement is not renewed on any December 31 as provided in Section 2,
then Executive (or his estate) shall be entitled to a lump sum payment
payable within thirty (30) days of the date of termination equal to two
(2) times his Base Salary Rate plus any bonus Executive may be entitled
to pursuant to Section 3.1.2(B). In addition, Executive shall continue
to be entitled to the continuation of such medical, dental, and life
insurance coverage as he shall be receiving pursuant to Section 3.1.3
as of the date of notice of termination until the earlier of (a) his
full time employment by a third party or (b) the term of his severance
payments, but only to the extent Company is able to continue the
applicable coverage of Executive under the terms of such Company
policies or other policies providing coverage for Executive.
Notwithstanding any other provision in this Section 6.2.1, in the event
Company is unable to continue the applicable coverage of Executive
under the terms of the applicable policies, then Company shall
cooperate with Executive in any actions which may be necessary to allow
Executive, to the extent possible, either (i) to buy such insurance
policy or (ii) to continue insurance coverage with the insurer writing
Company's applicable group policy outside of Company's Group plan.
Company shall pay to Executive 140% of the cost of such insurance
coverage, but in no event more than twice the cost of such coverage
allocable to Executive under the Company or other policy covering him
prior to termination. Such compensation shall be paid notwithstanding
Executive's total and permanent disability or death subsequent to such
notice, but in the event Executive (or his estate, legal
representative, or beneficiaries) receives death or disability benefits
pursuant to Section 5, such benefits shall constitute an offset for
amounts due under this Section 6.2.1. Executive shall be entitled as of
the date of termination to no other compensation under this Agreement
(including, without limitation, Section 3 or 5), except as provided in
Section 6.3 and Section 6.4 and except as provided in Section 7.5 in
the event that Company exercises the option granted therein.
6.2.2 In the event Company shall terminate Executive's employment for good
cause, then Executive shall be entitled as of the date of termination
to no compensation under this Agreement (including, without
limitation, Section 3 or 5 above), except as provided in Section 6.3
and except as provided in Section 7.5
-8-
10
in the event that Company exercises the option granted therein.
6.2.3 Immediately upon a Change of Control, and without regard to whether or
not Executive's employment is terminated or a Constructive Termination
occurs at such time or thereafter, Executive shall immediately have the
unconditional, unencumbered and free right, title and interest in all
shares of stock of Group which were granted, sold or optioned (subject
to his obligation to pay the option exercise price to the extent
theretofore not paid) to Executive by Group at any time prior to the
Change of Control as if all restrictions had lapsed and all events
necessary to vest in the Executive such rights, including the lapsing
of time, had occurred.
Following a Change of Control and upon an event of "Constructive
Termination" (as defined in Section 6.2.4) or termination of
Executive's employment without good cause, Executive shall receive
within ten (10) days of such event a lump-sum payment equal to three
(3) times the Base Salary Rate in effect on the date of such
Constructive Termination, plus a lump sum cash payment equal to the
greater of three (3) times (i) $150,000, or (ii) the bonus received by
Executive for the fiscal year prior to the year in which the
Constructive Termination or termination without good cause occurs. For
the purposes of this Section 6.2.3, the time when a Constructive
Termination occurs shall be the day any event occurs which is included
in the definition of Constructive Termination in Section 6.2.4. In
addition, Executive shall immediately upon Constructive Termination
pursuant to this Section 6.2.3 have the unconditional, unencumbered and
free right, title and interest in all shares of stock of Group which
were granted, sold or optioned (subject to his obligation to pay the
option exercise price to the extent theretofore not paid) to Executive
by Group at any time prior to the effective date of Constructive
Termination as if all restrictions had lapsed and all events necessary
to vest in the Executive such rights, including the lapsing of time,
had occurred.
6.2.4 As used herein, "Constructive Termination" shall be deemed to have
occurred if and when (i) Executive's base salary is decreased below the
level in effect on the date of the last amendment of this Agreement, or
the bonus percentage applicable to Executive's participation in any
compensation bonus plan or arrangement is reduced, without the
Executive's
-9-
11
consent, provided, however, that nothing herein shall be construed to
guarantee the Executive's bonus awards if performance is below
applicable targets, or (ii) the importance of the Executive's job
responsibilities is reduced without the Executive's consent, (iii)
Executive is required to relocate from New Jersey without his consent
or after Executive has relocated to the Chicago area, he is required to
relocate to a location other than the greater Chicago metropolitan area
without his consent, or (iv) termination of the Company's commitment
provided in Section 4.1.2.
6.3 In the event of any termination pursuant to any of Sections 6, 6.1, and
6.2, Executive shall be paid such portion of his Salary as has accrued by
virtue of Executive's employment during the period prior to termination and
has not yet been paid, together with any amounts for expense reimbursement,
vacation accruals and similar items which have been properly incurred or
accrued in accordance with the provisions of Section 4 prior to termination
and have not yet been paid.
6.4 As used herein, a "Change of Control" shall be deemed to have occurred (i)
if any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended), other than Group, any
employee stock plan of Group is or becomes the beneficial owner, directly
or indirectly, of securities of Group representing fifteen percent (15%) or
more of the outstanding Common Stock of Group, or (ii) ten (10) days
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in
the beneficial ownership by any "person" of fifteen percent (15%) or more
of the outstanding Common Stock of Group, provided, however, that at the
conclusion of such ten (10) day period such person has not discontinued or
rescinded his intention to make such a tender or exchange offer or (iii) if
during any consecutive twelve (12) month period beginning on or after the
date on which this Agreement is executed individuals who at the beginning
of such period were directors of Group cease, for any reason, to constitute
at least a majority of the Board of Directors of Group; or (iv) if a merger
of, or consolidation involving, Group in which Group's stock is converted
into securities of another corporation or into cash shall be consummated,
or a plan of complete liquidation of Group (whether or not in connection
with a sale of all or substantially all of Group's assets) shall be adopted
and consummated, or substantially all of Group's operating assets are sold
(whether or not a plan of liquidation shall be adopted or
- 10 -
12
a liquidation occurs), excluding in each case a transaction solely for the
purpose of reincorporating Group in a different jurisdiction or
recapitalizing Group's stock.
6.5 As used herein, "good cause" shall mean and be limited to a) a material
breach of any of Executive's obligations under Section 1 or 7 hereof, or b)
any action by Executive during the term of this Agreement involving willful
malfeasance or gross negligence of which Executive has been given written
notice and which continues following, or is not remedied by Executive
within, fifteen (15) days thereafter.
6.6 Company, in its sole discretion, may apply for and procure in its own name
(whether or not for its own benefit) policies of insurance insuring the
life of Executive in such amounts as Company may deem advisable. Executive
shall have no right, title, or interest in any such policies of insurance,
except to the extent his estate or other persons are specifically named as
beneficiaries thereof. Executive agrees to submit to any medical or other
examination and to execute and deliver any applications or other instrument
in writing, reasonably necessary to effectuate such insurance.
6.7 In the event of termination pursuant to Section 6.1 or 6.2.3, the payments
to be made to Executive under Section 6.1 or Section 6.2.3 shall be
subject to reduction as described below.
6.7.1. The following definitions shall apply for purposes of this Section 6.7:
6.7.1.1 "Code" means the Internal Revenue Code of 1986, as amended.
6.7.1.2 "Executive Parachute Payments" means all payments to Executive,
from whatever source and whether or not pursuant to this Employment
Agreement, which if not reduced by this Section 6.7 would be parachute
payments.
6.7.1.3 "Safe Harbor Exclusions" means the smallest amount of Executive
Parachute Payments under Section 6.1 or Section 6.2.3 the exclusion of
which would cause all remaining Executive Parachute Payments no longer
to be parachute payments (as a consequence of all remaining Executive
Parachute Payments having aggregate present value less than three
times the base amount). For purposes of determining Safe Harbor
Exclusions, the last payments in time under
-11-
13
Section 6.1 or Section 6.2.3 shall be excluded first. If there is no
amount of Executive Parachute Payments the exclusion of which would
cause all remaining Executive Parachute Payments no longer to be
parachute payments, or if there are no Executive Parachute Payments,
the Safe Harbor Exclusions shall be zero.
6.7.1.4 "Associated Income Tax," with respect to an amount of taxable
income, means the maximum marginal combined federal, state and local
income tax rate, including under Code section 4999 or successor
provisions if and only if applicable, applied to such taxable income.
For purposes of this Section 6.7, Associated Income Tax will be
considered payable at the time of receipt of the taxable income.
6.7.1.5 The following phrases have the meaning ascribed by Code section 280G
and successor provisions:
applicable Federal rate
base amount
parachute payment
present value.
6.7.2. If (i) the present value of Executive Parachute Payments reduced by
Associated Income Tax is less than (ii) the present value of Executive
Parachute Payments other than Safe Harbor Exclusions reduced by
Associated Income Tax, then the Safe Harbor Exclusions shall not be
paid to Executive, notwithstanding Section 6.1 or Section 6.2.1.
6.7.3. If either Executive or Company determines that, in accordance with
Section 6.7.2, the Safe Harbor Exclusions are not payable to
Executive, then the following procedure shall be followed:
6.7.3.1 The party making such determination shall give written notice (the
"Exclusion Notice") to the other party not later than ten days
following the termination of employment, setting forth in reasonable
detail the calculations on which such determination is based and
specifying the Safe Harbor Exclusions which are not payable.
6.7.3.2 In the event such Exclusion Notice is given by either party and not by
the other, and if such other party disputes the substance of the
Exclusion Notice, such other party shall give written notice of such
dispute (the "Dispute Notice") within ten days after receipt of the
Exclusion Notice, setting forth in reasonable detail the basis for
such dispute. If such other
- 12 -
14
party does not give a Dispute Notice within such ten days, the
substance of the Exclusion Notice shall be conclusively deemed to be
correct and final, and the Safe Harbor Exclusions specified therein
shall not be paid to Executive.
6.7.3.3 If a Dispute Notice is given, or if Exclusion Notices are given by
both parties which differ as to the Safe Harbor Exclusions identified
therein, the parties shall negotiate in good faith to resolve such
dispute. In the absence of resolution within 30 days after receipt of
the Dispute Notice or the later of the two Exclusion Notices, as the
case may be, either party may by written notice given to the other
party submit the matter for arbitration in accordance with Section 8
except that, notwithstanding any provision of Section 8 to the
contrary, such arbitration shall be before a single arbitrator to be
agreed upon by the parties or, in the absence of agreement as to the
arbitrator within ten days after receipt of such notice of submission
to arbitration, to be appointed by the American Arbitration
Association or its successor.
7. CONFIDENTIALITY AND NON-COMPETITION
7.1 Executive's agreements set forth in this Section 7 shall survive the
expiration or termination of this Agreement and the termination of his
employment with Company for any reason.
7.2 Executive acknowledges that irreparable injury would be caused to Company
by his breach of any of the provisions of this Section 7, and agrees that
in the event of any such breach, Company and any of its Affiliates, in
addition to such other rights and remedies as may exist in its favor, may
apply to any court of law or equity having jurisdiction to enforce the
specific performance of the provisions of this Section 7 and may apply for
injunctive relief against any act which would violate any such provisions.
The covenants of Executive contained in this Section 7 shall be construed
as independent of all other provisions contained in this Agreement and
shall be enforceable, notwithstanding the existence of any claim or cause
of action of Executive against Company or any of its Affiliates, whether
predicated on this Agreement or otherwise.
7.3 Executive recognizes that he now has knowledge of and/or may hereafter gain
knowledge of, confidential information, trade secrets, confidential
processes, confidential patentable or unpatentable inventions or
confidential
- 13 -
15
"know how", including, without limitation, techniques, formulae, designs,
developments, projects, technical information and manufacturing process and
distribution methods, relating to, or concerned with the business of
Company and its Affiliates during the term of this Agreement and their
respective suppliers, customers, stockholders, licensors, licensees, and
other persons or entities with which Company or its Affiliates has, has
had, or may in the future have any commercial, scientific or technical
relationship, and which information has not previously been made public or
thereafter made public. During the term of this Agreement and at all times
following the termination of Executive's employment for any reason,
Executive will not, directly or indirectly, divulge, furnish or make
accessible to anyone (other than as required in the regular course of his
employment by Company or with the consent of the Board of Directors of
Company) such information. As used in the first sentence hereof, the phrase
"made public" shall apply to information (a) within the domain of the
general public; (b) generally known within the industry or industries in
which Company or its Affiliates is involved; or (c) is independently
developed by Executive without utilization of confidential information
gained while in the employ of Company; provided that no information shall
be deemed to have been made public if it is within the domain of the
general public or generally known within the industry or industries in
which Company or its Affiliates is involved. All documents, records,
apparatus, equipment and other physical property furnished to Executive by
Company or any Affiliate of Company or produced by Executive or others in
connection with his services to Company or any such Affiliate shall be and
remain the sole property of Company. Executive will return and deliver such
property to Company as and when requested by Company. Copies of documents
and records may be kept, but shall be kept completely confidential to the
same extent as other confidential information of Company. Executive shall
return and deliver all such property upon termination of his employment for
any reason, and Executive will not take with him any such property or any
reproduction of such property upon such termination.
7.4 Any work or research or the results thereof, made or developed by
Executive, alone or in conjunction with others during the term of his
employment, including but without limitation, any designs, patents,
inventions, processes, know-how or formulae created, invented or conceived
during the period of his employment by Company , whether during or out of
the usual hours of work, which arise out of or are related to the business,
research, or development work or field of operation of Company, or any
- 14 -
16
of its Affiliates, shall to the extent of Executive's interest therein be
the sole and exclusive property of Company, shall be disclosed in writing
to Company and to no other person, unless so directed in writing by the
Board of Directors, and Executive hereby assigns to Company all and any
rights which he has or may acquire in the same. To this end, both during
the period of Executive's employment and at all times thereafter, Executive
agrees to execute all necessary papers, instruments and documents properly
required to effect such assignment to Company or its nominee, to make
application through Company's patent attorney or general counsel at the
expense of Company, for such United States and foreign patents as may be
specified from time to time by Company on inventions, processes, or
formulae which are or become the property of Company hereunder, and to
execute assignments upon Company's request, for Executive's entire interest
in all such applications to Company or to its nominee without compensation
(other than his usual compensation as an employee of Company) and Executive
agrees to give Company and its patent attorney or general counsel all
reasonable assistance in preparing such applications, descriptions, and
illustrations of each such invention, process, or formula and in connection
with proceedings relating thereto or to such other applications or patents
resulting therefrom; and further agrees to execute all lawful papers
considered necessary by Company and do all that Company reasonably requests
in order to protect Company's rights in said inventions, processes, and
formulae or to obtain patents thereon, including, without limitation,
continuations, reissues, renewals, and extensions. It is further agreed
that Executive's obligations specified hereunder shall not expire with the
termination of his employment, but Company agrees to pay Executive a
reasonable amount for any time that Executive spends in such work at
Company's request after the termination of his employment hereunder and
agrees to reimburse Executive for expenses reasonably or necessarily
incurred in connection with such work.
7.5 In consideration of his continued employment by Company and the other
benefits accruing to him hereunder, and subject to the fulfillment by
Company of its obligations to Executive hereunder, Executive agrees that
during the term hereof and for a period of one year following the date of
termination of Executive's employment, if such termination is as a result
of Executive's termination or termination by Company of this Agreement
(such period of employment and one year period being referred to in this
Agreement as the "Non-Competition Period"), he will not engage or
participate, directly or indirectly, within the United States of America
either as principal, agent,
- 15 -
17
employee, employer, consultant, stockholder, partner or in any other
individual or representative capacity whatever, in the conduct or
management of, or own any stock or other proprietary interest in, or debt
of, any business which shall be competitive with any business which is or
was conducted by Company or any Affiliate of Company, while Executive was
an employee of Company under this Agreement, unless he shall have obtained
the prior written consent of the Board of Directors, and which consent
shall make express reference to this Agreement. During the Non-Competition
Period, Company, at Company's sole election, will pay Executive the Base
Salary Rate then in effect on the date of his termination from employment
with Company on the same terms as he had received his salary immediately
prior to the termination, less any payments paid or payable to Executive
pursuant to the terms of Section 5.2.2, Section 6.1, Section 6.2, Section
6.2.1 or Section 6.2.3 hereof, it being understood that notwithstanding any
other provision contained in this Section 7.5, the Non-Competition Period
will not in any event extend beyond the period for which Executive is paid
following termination of his employment under the terms of this Section,
7.5 or otherwise under the terms of this Agreement. Notwithstanding any
other provision in this Section 7, Executive shall be free without such
consent to make investments, directly or indirectly, in the securities of
any publicly-owned corporation if his ownership thereof is limited to not
more than three percent (3%) of the issued and outstanding securities of
any class of securities of such corporation. Executive acknowledges that
his skills and experience are such that he can anticipate finding
employment at an executive level in a wide variety of industries and
represents and agrees that he will be providing services to Company that
are special, unique and extraordinary and that the restrictions imposed by
this Section 7 on employment are necessary for the protection of the
legitimate interests and competitive position of Company and do not impose
undue hardships on Executive.
7.6 During the Non-Competition Period, Executive will not, directly or
indirectly, solicit any officer, director, executive, employee or
consultant of Company or any Affiliate of Company to leave such employment
or terminate such position, nor will he directly or indirectly employ,
hire, retain or cause to be employed, hired, or retained (other than by
Company or, with Company's consent, its Affiliates), or establish a
business with, any person who within one year prior to such employment,
retainer or establishment was employed or retained by Company or its
Affiliates in any of the above-mentioned capacities, provided, however,
that this Section 7.6 shall not
- 16 -
18
prohibit Executive directly or indirectly from employing, hiring, retaining
or causing to be employed, hired, or retained, any person who the Executive
establishes was dismissed by Company or its Affiliates without cause or who
has terminated due to a Change of Control.
8. ARBITRATION
Except with respect to the provisions of Section 7, any dispute or
disagreement arising under or relating to the provisions of this Agreement,
or any breach thereof, including, without limitation, relating to Section 1
hereof or to whether a termination of Executive's employment was with "good
cause", shall be resolved by binding arbitration in accordance with the
Commercial Rules of the American Arbitration Association or its successor
(except as set forth herein), and judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. The decision of the arbitrators shall be made by majority vote and
be final and absolute. In any such arbitration, one arbitrator shall be
selected by Company and one arbitrator shall be selected by Executive. Each
party shall have thirty (30) days from the receipt by one party of a notice
of the other party of submission to arbitration to choose an arbitrator. A
third arbitrator shall be selected by the two so chosen within ten (10)
days of the selection of the most recently selected of the two arbitrators
so chosen. Failing action within any of such periods by any party or the
arbitrators, any unappointed arbitrator or arbitrators shall be appointed
by the American Arbitration Association (or its successor) upon application
of any party or arbitrator. The parties shall promptly furnish to the
arbitrators such information as the arbitrators may reasonably request. The
expenses of any arbitration proceeding (not including the other party's
attorney's fees and expenses) shall be paid by Company if the Executive
recovers any amount or otherwise obtains relief in such proceeding and by
the Executive if the Executive initiated arbitration and there is a
specific finding that the Executive's claim was frivolous. In all other
circumstances, the expenses of such arbitration proceeding (not including
attorney's fees and expenses) shall be divided equally. Arbitration shall
take place in Nashua, New Hampshire, or such other place on which the
parties shall agree.
9. GENERAL
9.1 This Agreement is personal and shall in no way be subject to assignment by
Executive.
- 17 -
19
9.2 This Agreement shall be binding upon and shall inure to the benefit of
Company and its successors and assigns either by merger, operation of law,
consolidation, assignment, purchase or otherwise of a controlling interest
in the business of Company and Executive, his heirs, executors,
administrators, legal representatives, and permitted assigns. Company
agrees that a successor in interest by merger, operation of law,
consolidation, assignment, purchase or otherwise of a controlling interest
in the business of Company will be informed prior to such event of the
existence of this Agreement. Company will require any successor (whether
direct or indirect, by purchase, merger, operation of law, consolidation,
assignment or otherwise of a controlling interest in the business, stock or
other assets of Company) to assume expressly and agree to perform this
Agreement. Failure of Company to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to such compensation and benefits in
the same amount and on the same terms as he would be entitled hereunder in
the event of a termination without "good cause", except that, for the
purposes of implementation hereof, the date on which any such succession
becomes effective shall be deemed to be the date on which Executive becomes
entitled to such compensation and benefits from Company. As used in this
Agreement, "Company" shall mean Ekco Housewares, Inc. as hereinbefore
defined and any successor as aforesaid.
9.3 The parties intend this Agreement to be enforced as written. However, (i)
if any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a duly authorized court of competent
jurisdiction, then the remainder of this Agreement, or the application of
such portion or provision in circumstances other than those as to which it
is so declared illegal or unenforceable, shall not be affected thereby, and
each portion and provision of this Agreement shall be valid and be
enforceable to the fullest extent permitted by law; and (ii) if any
provision, or any part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, Company and
Executive agree that the court making such determination shall have the
power to reduce the duration and/or area of such provision, and/or to
delete specific words and phrases ("blue-pencilling") and in its reduced or
blue-pencilled form such provision shall then be enforceable and shall be
enforced.
9.4 All notices and communications required or permitted to be given hereunder
shall be duly given by delivering the same in hand or by depositing such
notice or communication in
- 18 -
20
the mail, sent by certified or registered mail, return receipt requested,
postage prepaid, as follows:
If sent to Company: Ekco Housewares, Inc.
00 Xxxx Xxxxx Xx.
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: C.E.O
With a Copy to: Ekco Group, Inc.
00 Xxxx Xxxxx Xx.
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: C.E.O.
If sent to
Executive: Xxxxxx Xxxxxxxx
00 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxx Xxxxxx 00000
or such other address as either party furnishes to the other by like
notice.
9.5 This Agreement constitutes the entire agreement and understanding between
the parties in relation to the subject matter hereof and there are no
promises, representations, conditions, provisions or terms related thereto
other than those set forth in this Agreement. This Agreement supersedes all
previous understandings, agreements and representations between Company and
Executive regarding Executive's employment by Company, written or oral.
9.6 All captions in this Agreement are intended solely for the convenience of
the parties, and none shall be deemed to affect the meaning or construction
of any provision hereof.
9.7 No failure of Company or Executive to exercise any power reserved to it or
him, respectively, by this Agreement, or to insist upon strict compliance
by Executive or Company, respectively, with any obligation or condition
hereunder, and no custom or practice of the parties at variance with the
terms hereof, shall constitute a waiver of Company's or Executive's right,
as the case may be, to demand exact compliance with any of the terms
hereof. Waiver by either party of any particular default by the other party
hereto shall not affect or impair the waiving party's rights with respect
to any subsequent default of the same, similar or different nature, nor
shall any delay, forbearance or omission of either party to exercise any
power or right arising out of any breach or default by the other party of
- 19 -
21
any of the terms, provisions or covenants hereof, affect or impair its or
his right to exercise the same, nor shall such constitute a waiver by
Company or Executive, as the case may be, of any right hereunder, or the
right to declare any subsequent breach or default and to terminate this
Agreement prior to the expiration of its term.
9.8 As used herein, the term "Affiliate" shall be deemed to include any
corporation, joint venture, or other business enterprise, whether
incorporated or unincorporated, which Company directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with.
9.9 This contract shall be construed under and be governed in all respects by
the laws of the State of New Hampshire.
9.10 Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided for herein be reduced by any
compensation earned by Executive as the result of employment by another
employer or by retirement benefits after the date of termination or
otherwise, except as specifically set forth herein.
9.11 No amendment or modification to this Agreement shall be effective unless in
writing and signed by both parties hereto. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be
deemed to be an original instrument, but all such counterparts together
shall constitute but one agreement.
9.12 Group hereby unconditionally and irrevocably guarantees the prompt
performance of the obligations assumed in this Agreement by Company, its
wholly-owned subsidiary.
- 20 -
22
IN WITNESS WHEREOF, Company has caused this Agreement to be executed and
delivered by its duly authorized officer and its corporate seal to be hereunto
affixed and Executive has hereunto set his hand and seal as of the day and year
first written above in duplicate originals.
EKCO HOUSEWARES, INC.
By
/S/XXXXXX X. XXXXXXXXXX
-----------------------
EKCO GROUP, INC., AS GUARANTOR
By /S/XXXXXX X. XXXXXXXXXX
--------------------------
XXXXXX XXXXXXXX
/S/XXXXXX XXXXXXXX
------------------
- 21 -
