EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated October 14, 1999 by and
between CCPC HOLDING COMPANY, INC. (the Company) and XXXXXXXXX XXX (the
"Executive").
WHEREAS, in connection with the transaction contemplated in the
Agreement and Plan of Merger dated as of August 2, 1999 by and among CCPC
Acquisition Corp., the Company's parent, and General Housewares Corp., and a
subsidiary of the Company, (the "Merger"), the Company desires to employ
Executive and to enter into an agreement embodying the terms of such employment;
and
WHEREAS, Executive desires to accept such employment and enter into
such an agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:
1. Term of Employment; Executive Representation.
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a. Employment Term. Subject to the provisions of Section 8,
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Executive shall be employed by the Company for the period commencing
on the closing date of the Merger and ending on December 31, 2002 (the
"Employment Term") on the terms and subject to the conditions set
forth in this Agreement. Commencing with January 1, 2003, and on each
January 1 thereafter (each an "Extension Date"), the Employment Term
shall be automatically extended for an additional one-year period,
unless the Company or Executive provides the other parry hereto 90
days' prior written notice before the next Extension Date that the
Employment Term shall not be so extended, in which case the Employment
Term shall end on the December 31 prior to such next Extension Date.
For the avoidance of doubt, the term "Employment Term" shall include
any extension that becomes applicable pursuant to the preceding
sentence.
b. Executive Representation. Executive hereby represents to
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the Company that the execution and delivery of this Agreement by
Executive and the Company and the performance by Executive of the
Executive's duties hereunder shall not constitute a breach of, or
otherwise contravene, the terms of any employment agreement or other
agreement or policy to which Executive is a party or by which to his
knowledge he is otherwise bound.
2. Position.
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a. During the Employment Term, Executive shall serve as the
President of OXO International ("OXO"), currently a division of a
subsidiary of the Company, and Executive shall be the highest ranking
officer within the
division and shall principally perform Executive's duties to OXO and
its affiliates in the Industry from OXO's offices in the New York
metropolitan area, subject to normal and customary travel requirements
in the conduct of OXO business. In such position, Executive shall have
such duties and authority as shall be determined from time to time by
the Board of Directors of Corning Consumer Products Company ("CCPC")
(the "Board") consistent with his position as President of a business
the size of OXO and shall report directly to the Chairman, Chief
Executive Officer or Chief Operating Officer of CCPC (the "CEO") and
the Board.
b. During the Employment Term, Executive will devote
Executive's full business time and reasonable best efforts to the
performance of Executive's duties hereunder and will not engage in any
other business, profession or occupation for compensation or otherwise
which would conflict with the rendition of such services either
directly or indirectly, without the prior written consent of the CEO
or the Board; provided that nothing herein shall preclude Executive
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from continuing to serve on the board of directors or trustees of any
business corporation or any charitable organization on which he
currently serves or devoting his free time to other ventures as he
sees fit or, subject to the prior approval of the Board, from
accepting appointment to any additional directorships or trusteeships,
provided in each case, and in the aggregate, that such activities do
not interfere with the performance of Executive's duties hereunder or
conflict with Section 9.
3. Base Salary. During the Employment Term, the Company shall pay
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Executive a base salary (the "Base Salary") at the initial annual rate of
$300,000, payable in regular installments in accordance with the Company's
normal payroll practices. Executive shall be entitled to such increases in
Executive's Base Salary, if any, as may be determined after review annually
by the Board and after consideration by the Board of the Company's
performance and the performance generally of the market in which the
Company operates; provided, however, that in no event shall Executive's
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Base Salary be decreased below $300,000. The Board shall first review
Executive's Base Salary no later than January 31, 2000.
4. Bonus.
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a. Signing Bonus. Within one week following the closing date
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of the Merger, the Company shall pay to Executive a signing bonus in a
lump sum amount equal to $200,000; provided, that in the event and to
the extent that Executive uses this bonus amount to invest in the
Company Stock (as hereinafter defined in Section 5 hereof), Executive
shall receive an additional payment equal to the amount payable by
Executive in respect of any federal, state and local personal income
taxes that Executive pays on such portion of the signing bonus that
Executive uses to invest in the equity of the Company at the highest
marginal rates. As soon as practicable, the Company intends to
establish an equity purchase plan similar to the Company's Management
Equity Plan established in the Spring of 1998. In the event such
equity plan has not been timely established
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and Executive has paid taxes on the signing bonus (the "Tax Payment"),
upon the establishment of such equity plan and Executive's investment
of the amount of the signing bonus (less the amount of the Tax
Payment) into the Common Stock, the Company shall invest an amount
equal to such Tax Payment in the name of and for the benefit of
Executive.
b. Annual Bonus. With respect to each full calendar year
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during the Employment Term, Executive shall be eligible to earn an
annual bonus award (an "Annual Bonus") in such amount as determined in
the sole discretion of the Board; provided, that for calendar year
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1999, Executive's Annual Bonus opportunity shall be equal to 75% of
Executive's Base Salary (the "Target Bonus"), which shall be payable
based on the same performance criteria as in effect for OXO under its
annual incentive as in effect immediately prior to August 3, 1999. In
addition, for the calendar year 2000, Executive shall be entitled to
participate in the Company's annual incentive plan, and if and to the
extent that certain minimum financial performance targets of the
Company are achieved (as such targets are established by the Board)
(the "Minimum Targets"), Executive's Annual Bonus shall equal the
Target Bonus; provided, further, that if and to the extent that the
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Company's financial performance exceeds the Minimum Targets, Executive
may be entitled to receive a higher Annual Bonus, which shall not
exceed an amount equal to up to 200% of Executive's Base Salary. The
annual incentive plan for calendar year 2000 shall be designed to
provide that 25% of Executive's Annual Bonus opportunity shall be
based on the Company's achievement of certain corporate objectives and
that 75% of Executive's Annual Bonus opportunity shall be based on
OXO's achievement of certain corporate objectives, as established by
the Board. For calendar year 2001, 50% of Executive's Annual Bonus
opportunity shall be based on the Company's achievement of certain
corporate objectives and that 50% of Executive's Annual Bonus o be
based on OXO's achievement of certain corporate objectives. For
calendar years following 2001, the Company shall create and maintain a
new annual incentive plan, with performance criteria and bonus
formulas to be established annually by the Compensation Committee of
the Board, after consultation with Executive and other members of the
Company's senior management. Notwithstanding the foregoing, at no time
during the Employment Term shall Executive's Annual Bonus opportunity
be reduced below the Target Bonus, and such opportunity may be
increased at the discretion of the Board, in proportion with any
significant increase in Executive's duties and responsibilities.
5. Equity Arrangements. As soon as practicable after the date of
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the Merger, the Company shall provide Executive with the opportunity to
invest up to $500,000 in the common stock of the Company (the "Company
Stock"). In connection with this investment, Executive shall be granted an
option to acquire an additional number of shares of Company Stock, which
number of shares shall be based in part on the total dollar amount of
Executive's investment. This option shall vest 20% per year over a five
year period. As soon as practicable after the date of the Merger, the
Company shall enter into certain agreements with Executive, such as a
stockholder's agreement and an option agreement that shall govern
Executive's acquisition and holding of the Company Stock.
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6. Employee Benefits. Upon the commencement of the Employment
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Term and continuing through calendar years 1999 and 2000, so long as
Executive shall remain employed by the Company, Executive shall be provided
health insurance, life insurance and short term and long term disability
insurance, retirement benefits and fringe benefits as set forth on Schedule
A (collectively "Employee Benefits") no less favorable than Executive was
provided immediately prior to the date of the Merger. Immediately upon the
commencement of the Employment Term, Executive's years of service with
General Housewares Corporation shall be recognized generally for purposes
of eligibility and vesting and, with respect to any defined benefit pension
plan, also for purposes of benefit accrual under the benefit plans by which
the Company shall provide such Employee Benefits. After December 31, 2000
and through the remainder of the Employment Term, Executive shall be
provided such Employee Benefits as shall be generally made available to
other senior executives of the Company, in accordance with the terms of the
employee benefit plans as shall be implemented by the Company beginning in
2001.
7. Business Expenses and Perquisites.
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a. Expenses. During the Employment Term, reasonable business
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expenses incurred by Executive in the performance of Executive's
duties hereunder shall be reimbursed by the Company in accordance with
Company policies.
b. Perquisites. Upon the commencement of the Employment Term
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and continuing through calendar years 1999 and 2000, Executive shall
be provided with perquisites (including the lease, maintenance,
insurance, and gas expenses of an automobile, annual membership dues
at a country club of Executive's choice, and executive medical
benefits) no less favorable than those provided to Executive
immediately prior to the date of the Merger; provided, however, that
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after December 31, 2000 and for the remainder of the Employment Term,
Executive shall be provided such perquisites as shall be generally
made available to other senior executives of the Company, in
accordance with the terms of the Company's employee benefit plans as
shall be implemented by the Company beginning in 2001.
8. Termination. Notwithstanding any other provision of this
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Agreement, the provisions of this Section 8 shall exclusively govern
Executive's rights upon termination of employment with the Company and its
affiliates.
a. By the Company For Cause or By Executive Resignation
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Without Good Reason.
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(i) The Employment Term and Executive's employment hereunder
may be terminated by the Company for Cause (as defined below) or
by Executive's resignation without Good Reason (as defined in
Section 8(c)); provided that Executive will be required to give
the Company at least 30 days advance written notice of a
resignation without Good Reason.
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(ii) For purposes of this Agreement, "Cause" shall mean (A)
Executive's continued failure to perform Executive's duties
properly assigned to him hereunder (other than as a result of
Executive's death or Disability), which failure continues beyond
thirty (30) days after a written demand for correction of such
failure is delivered by the Company to Executive specifying in
detail the failures on the part of Executive to perform his
duties which constitute a default hereunder, (B) willful
misconduct by Executive involving dishonesty or breach of trust
in connection with Executive's employment which results in
demonstrable injury to the Company, (C) conviction of, or plea of
nolo contendere to, a felony; or (D) Executive's material breach
of the provisions of Sections 9 or 10 of this Agreement which
continues after thirty (30) days written notice by the Company to
Executive specifying in detail the nature of the breach;
provided, however, that Executive shall not be terminated for
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Cause under (A), (B) or (D) above unless and until Executive has
been given the opportunity to present to the Board his position
as to the allegations constituting Cause at a meeting for which
Executive has received at least ten (10) days prior written
notice of the time, place and purpose.
(iii) If Executive's employment is terminated by the Company
for Cause, or if Executive resigns without Good Reason, Executive
shall be entitled to receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned but unpaid as of the date of
termination for any previously completed calendar year;
(C) reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with
Company policy prior to the date of Executive's
termination; and
(D) such Employee Benefits, if any, as to which Executive may
be entitled through the date of termination under the
employee benefit plans of the Company (the amounts
described in clauses (A) through (D) hereof being
referred to as the "Accrued Rights").
Following such termination of Executive's employment by the Company
for Cause or resignation by Executive without Good Reason, except as set forth
in this Section 8(a), Executive shall have no further rights to any compensation
or any other benefits under this Agreement.
b. Disability or Death.
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(i) The Employment Term and Executive's employment hereunder
shall terminate upon Executive's death or if Executive becomes
physically or mentally incapacitated and is therefore unable for
a period of six (6)
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consecutive months or for an aggregate of twelve (12) months in
any twenty-four (24) consecutive month period to perform
Executive's duties (such incapacity is hereinafter referred to as
"Disability"). Any question as to the existence of the Disability
of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company. If
Executive and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and
those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in
writing to the Company and Executive shall be final and
conclusive for all purposes of the Agreement.
(ii) Upon termination of Executive's employment hereunder for
either Disability or death, Executive or Executive's estate (as
the case may be) shall be entitled to receive:
(A) the Accrued Rights; and
(B) a pro rata portion of the Target Bonus, based upon the
percentage of the calendar year that shall have elapsed
through the date of Executive's termination of
employment, payable when such Annual Bonus would have
otherwise been payable had the Executive's employment
not terminated,
Following Executives termination of employment due to death or
Disability, except as set forth in this Section 8(b), Executive shall have no
further rights to any compensation or any other benefits under this Agreement,
except for Employee Benefits (as in effect on the date of such termination)
which by their terms apply upon death or Disability.
c. By the Company Without Cause or Resignation by Executive
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for Good Reason.
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(i) The Employment Term and Executive's employment hereunder
may be terminated by the Company without Cause or by Executive's
resignation for Good Reason.
(ii) For purposes of this Agreement, "Good Reason" shall
mean:
(A) a substantial reduction by the Company of Executive's
duties and responsibilities (other than as a result of
Executive's death or Disability, or termination of
Executive's employment by the Company for Cause or
resignation by Executive without Good Reason);
(B) a reduction by the Company of the Base Salary or Annual
Bonus opportunity, without Executive's prior written
agreement;
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(C) a relocation of Executive's primary workplace to a
location that is more than 30 miles from Executive's
current workplace, as of the date of this Agreement,
without Executive's prior written agreement.
(D) a substantial increase in Executive's duties and
responsibilities without the consent of Executive;
provided that any such increase resulting from an
expansion of the business of OXO (e.g. an expansion
from domestic to global operations) shall riot
constitute Good Reason;
(E) a requirement that Executive report to an individual with
a lesser position than Chairman, Chief Executive
Officer or Chief Operating Officer of CCPC; or
(F) a material breach of any of the other material provision
of this Agreement by the Company.
Notwithstanding the foregoing, none of the events described in this Section
8(c)(ii) shall constitute Good Reason unless Executive shall have notified the
Company in writing specifying in detail the events which constitute Good Reason
and then only if the Company shall have failed to cure such event within thirty
(30) days after the Company's receipt of such written notice.
(iii) If Executive's employment is terminated by the Company
without Cause (other than by reason of death or Disability) or if
Executive resigns for Good Reason, Executive shall be entitled to
receive:
(A) the Accrued Rights;
(B) subject to Executive's compliance with the provisions of
Section 9 and payment of the then Base Salary and the
Target Bonus (including the pro-rata portion of the
Target Bonus for any portion of a full year, if
applicable) until the earlier of (x) the third
anniversary of the date of termination of Executive's
employment and (y) any [material] breach (which
continues after notice and failure to cure has been
provided pursuant to Section 8(a)(ii) hereof) by
Executive of the restrictive covenants set forth in
Sections 9 and 10 of this Agreement; and
(C) Employee Benefits until the earlier of (x) the third
anniversary of the date of termination of Executive's
employment and (y) any breach by a restrictive
covenants set forth in Sections 9 and 10 of this
Agreement; provided that in the event that Executive
obtains employment with a subsequent employer, any
Employee Benefits provided hereunder shall become
secondary to programs provided by such subsequent
employer.
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The payments provided for in Section 8(c)(iii)(B) shall be paid in
accordance with the Company's normal payroll practices. Following Executive's
termination of employment by the Company without Cause (other than by reason of
Executive's death or Disability) or by Executive's resignation for Good Reason,
except as set forth in this Section 8(c), Executive shall have no further rights
to any compensation or any other benefits under this Agreement.
d. Expiration of Employment Term.
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(i) Election Not to Extend the Employment Term. In the event
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either party elects not to extend the Employment Term pursuant to
Section 1, unless Executive's employment is earlier terminated
pursuant to paragraphs (a), (b) or (c) of this Section 8,
Executive's Employment Term hereunder (whether or not Executive
continues as an employee of the Company thereafter) shall be
deemed to terminate on the close of business on the day
immediately preceding the next scheduled Extension Date and
Executive shall be entitled to receive the Accrued Rights. In the
event that the Company has given notice of its election not to
extend the Employment Term, (A) Executive's employment shall
terminate upon the expiration of the Employment Term; (B) he
shall receive, subject to his compliance with the provisions of
Sections 9 and 10, continued payment of the that Base Salary and
the Target Bonus for a period of one year after such expiration
date; and (C) for purposes of Section 9, which shall remain in
effect, the "Restricted Period" shall be one year after such
expiration date.
Following such termination of Executive's employment hereunder as a result of
either party's election not to extend the Employment Term, except as set forth
in this Section 8(d)(i), Executive shall have no further rights to any
compensation or any other benefits under this Agreement, and the provisions of
Sections 9, 10 and 1 l of this Agreement shall, to the extent applicable,
survive any termination of this Agreement.
(ii) Continued Employment Beyond the Expiration of the
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Employment Term. Unless the parties otherwise agree in writing,
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continuation of Executive's employment with the Company beyond
the expiration of the Employment Term shall be deemed an
employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and Executive's employment may
thereafter be terminated at-will by either Executive or the
Company; provided that the provisions of Sections 9, 10 and 11 of
this Agreement shall, to the extent applicable, survive any
termination of this Agreement.
e. Notice of Termination. Any purported termination of
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employment by the Company or by Executive (other than due to
Executive's death) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 12(i)
hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts
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and circumstances claimed to provide a basis for termination of
employment under the provision so indicated.
9. Excess Parachute Excise Tax Payments.
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(i) (A) If it is determined (as hereafter provided) that any
payment or distribution by the Company to or for the benefit of
Executive, whether paid or payable or, distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar
right, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a "Payment"),
would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) or to any similar tax
imposed by state or local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any
such interest and penalties, are hereafter collectively referred
to as the "Excise Tax"), then Executive shall be entitled to
receive an additional payment or payments (a "Gross-Up Payment")
in an amount such that, after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes), including any Excise Tax and income tax imposed in
respect of the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax in respect of upon
the Payments, which shall be used by Executive satisfy such
Excise Tax liability.
(B) Subject to the provisions of section 8(f)(i)(A) hereof,
all determinations required to be made under this
Section 8, including whether an Excise Tax is payable
by Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required and the amount
of such Gross-Up Payment, shall be made by the
nationally recognized firm of certified public
accountants (the "Accounting Firm") used by the Company
prior to a change in control. The Accounting Firm shall
be directed by the Company or Executive to submit its
preliminary determination and detailed supporting
calculations to both the Company and Executive within
15 calendar days after the Termination Date, if
applicable, and any other such time or times as may be
requested by the Company or Executive. If the
Accounting Firm determines that any Excise Tax is
payable by Executive, the Company shall pay the
required Gross-Up Payment to, or for the benefit of,
Executive within five business days after receipt of
such determination and calculations. If the Accounting
Firm determines that no Excise Tax is payable by
Executive, it shall, at the same time as it makes such
determination, furnish Executive with an opinion that
he has substantial authority not to report any Excise
Tax on his federal, state, local income or other tax
return. Any determination by the
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Accounting Firm as to the amount of the Gross-Up
Payment shall be binding upon the Company and Executive
absent a contrary determination by the internal Revenue
Service or a court of competent jurisdiction; provided,
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however, that no such determination shall eliminate or
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reduce the Company's obligation to provide any Gross-Up
Payment that shall be due as a result of such contrary
determination. As a result of the uncertainty in the
application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of
similar uncertainty regarding state or local tax law at
the time of any determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments that
will not have been made by the Company should have been
made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the
event that the Company exhausts or fails to pursue its
remedies pursuant to Section 8(f)(i) hereof and
Executive thereafter is required to make a payment of
any Excise Tax, the Executive shall direct the
Accounting firm to determine the amount of the
Underpayment that has occurred and to submit its
determination and detailed supporting calculations to
both the Company and Executive as promptly as possible.
Any such Underpayment shall be promptly paid by the
Company to, or for the benefit of, Executive within
five business days after receipt of such determination
and calculations.
(C) The Company and Executive shall each provide the
Accounting Firm access to and copies of any books,
records and documents in the possession of the Company
or Executive, as the case may be, reasonably requested
by the Accounting Firm, and otherwise cooperate with
the Accounting Firm in connection with the preparation
and issuance of the determination contemplated by
Section 8(f)(i) hereof.
(D) The federal, state and local income or other tax returns
filed by Executive (or any filing made by a
consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with
the determination of the Accounting Firm with respect
to the Excise Tax payable by Executive. Executive shall
make proper payment of the amount of any Excise Tax,
and at the request of the Company, provide to the
Company true and correct copies (with any amendments)
of his federal income tax return as filed with the
Internal Revenue Service and corresponding state and
local tax returns, if relevant, as filed with the
applicable taxing authority, and such other documents
reasonably requested by the Company, evidencing such
payment. If prior to the filing of Executive's federal
income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines
that
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the amount of the Gross-Up Payment should be reduced,
Executive shall within five business days pay to the
Company the amount of such reduction.
(E) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 8(f)(i)(B) and
(D) hereof (other than the cost of any tax return
preparation paid or payable by Executive in connection
with the preparation of his income or other tax
returns) shall be borne by the Company. If such fees
and expenses are initially advanced by Executive, the
Company shall reimburse Executive the full amount of
such fees and expenses within five business days after
receipt from Executive of a statement therefor and
reasonable evidence of his payment thereof.
(ii) In the event that the Internal Revenue Service claims
that any payment or benefit received under this Agreement
constitutes an "excess parachute payment," within the meaning of
Section 280G(b)(1) of the Code, Executive shall notify the
Company in writing of such claim. Such notification shall be
given as soon as practicable but no later than 10 business days
after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay
such claim prior to the expiration of the 30 day period following
the date on which Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that
it desires to contest such claim, Executive shall (A) give the
Company any information reasonably requested by the Company
relating to such claim; (B) take such action in connection with
contesting such claim as the Company shall reasonably request in
writing from time to time, including without limitation,
accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company and reasonably
satisfactory to Executive; (C) cooperate with the Company in good
faith in order to effectively contest such claim; and (D) permit
the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay
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directly all costs and expenses (including, but not limited to,
additional interest and penalties and related legal, consulting
or other similar fees) incurred in connection with such contest
and shall indemnify and hold Executive harmless, on an after-tax
basis, for and against any Excise Tax or other tax (including
interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses. Failure
of Executive to notify Company within ten (10) business days as
set forth above shall not operate to deprive Executive of the
indemnification hereunder except to the extent of the actual
prejudice suffered by Company as a result of such failure.
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(iii) The Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue
or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct Executive
to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that
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if the Company directs Executive to pay such claim and xxx for a
refund, the Company shall advance the amount of such payment to
Executive on an interest-free basis, and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or
other tax (including interest and penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided,
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further, that if Executive is required to extend the statute of
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limitations to enable the Company to contest such claim,
Executive may limit this extension solely to such contested
amount. The Company's control of the contest shall be limited to
issues with respect to which a corporate deduction would be
disallowed pursuant to Section 280G of the Code and Executive
shay be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other
taxing authority. In addition, no position may be taken nor any
final resolution be agreed to by the Company without Executive's
consent if such position or resolution could reasonably be
expected to adversely affect Executive (including any other tax
position of the Executive unrelated to matters covered hereby).
(iv) If, after the receipt by Executive of an amount advanced
by the Company in connection with the contest of the Excise Tax
claim, Executive becomes entitled to receive any refund with
respect to such claim, Executive shall promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto).
10. Non-Competition.
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a. Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and accordingly
agrees as follows
(i) During the Employment Term and the Restricted Period (as
hereinafter defined), the Executive shall not, without the
Company's express written consent, directly or indirectly, (A)
engage in any business that is in the Industry (as hereinafter
defined), (B) enter the employ of, or render any services to, any
person engaged in any business that is in the Industry, (C)
except as otherwise provided in Section 9(a)(ii), below, acquire
a financial interest in or otherwise become actively involved in
such business with, any person engaged in any business that is in
the
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Industry, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or
consultant (without the consent of the Board), or (D) interfere
with business relationships (whether formed before or after the
date of this Agreement) between the Company and its customers or
clients, or otherwise encourage such customers or clients to
cease to be a customer or client of the Company. For purposes of
this Section 9(a)(i), solicitation of customers or clients of the
Company or its affiliates on behalf of a business not in the
Industry shay not be deemed interference.
(ii) Notwithstanding anything to the contrary in this
Agreement, the Executive may, directly or indirectly own, solely
as art investment, securities of any person engaged in the
Industry which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if the Executive
(A) is not a controlling person of or a member of a group which
controls, such person and (B) does not, directly or indirectly,
own 5% or more of any class of securities of such person.
(iii) During the Restricted Period, the Executive will not,
directly or indirectly, solicit or encourage any person who has
been employed in the Industry by the Company or its subsidiaries
or affiliates at any time during the 12 months prior to the date
of such solicitation (an "Industry Employee") to leave the
Company or its subsidiaries or affiliates or otherwise offer
employment to any person he knows, after reasonable inquiry, to
be an Industry Employee.
b. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this
Section 9 to be reasonable, if a final judicial determination is made
by a court of competent jurisdiction that the time or territory or any
other restriction contained in this Agreement is an unenforceable
restriction against Executive, the provisions of this Agreement shall
not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent a such court may
judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not
affect the enforceability of any of the other restrictions contained
herein.
c. For purposes of this Agreement, "Industry" shall be
defined as being in the business of manufacturing, or otherwise
producing kitchen tools and gadgets and garden, bath and hand tools,
and/or the selling of the same, and the "Restricted Period" shall
mean, (i) in the event that Executive's employment is terminated by
the Company without Cause or by Executive for Good Reason, a period
equal to three years following the date the Executive ceases to be
employed with the Company, (ii) in the event that Executive's
employment is terminated by Executive without Good Reason or by the
Company for Cause, a
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period of two years following the date the Executive ceases to be
employed with the Company and (iii) in the event that the Company
determines not to extend the Employment Term pursuant to Section 1(a),
a period (for so long as Company continues to promptly make the
payments provided for in Section 8(d)) of one year following the date
the Employment Term expires; provided, however, the Company shall
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provide written notice to Executive specifying in reasonable detail
the nature of any breach of the covenants set forth in this Section 9
and Section 10 and Executive shall have a period of 30 days in which
to cure any such breach or threatened breach before the Company may
cease making any payments or providing such benefits as provided for
hereunder.
Notwithstanding the foregoing, in the event that the Executive terminates his
employment for any reason upon the occurrence of a Change in Control, the
Executive shall (i) not be bound by the restrictions of this Section 9 and (ii)
not have any rights to any compensation or other benefits under this Agreement;
other than the Accrued Rights provided for in Section 8(iii); provided, further,
-------- -------
that upon the occurrence of a Change in Control, in the event that the Company
(or its successor) terminates the Executive's employment, the Executive shall be
entitled to elect, in lieu of the obligations and compensation and benefits
otherwise imposed or afforded by Section 9 and Section B, respectively, (i) not
to be bound by the restrictions of this Section 9 and (ii) not to have any
rights to any compensation or other benefits under this Agreement, other than
the Accrued Rights provided for in Section 8(a)(iii).
11. Confidentiality. Executive will not at any time (whether
---------------
during or after Executive's employment with the Company) disclose or use
for Executive's own benefit or purposes or the benefit or purposes of any
other person, firm, partnership, joint venture, association, corporation or
other business organization, entity or enterprise other than the Company
and any of its subsidiaries or affiliates (other than as required by the
Company in the course of fulfilling his duties and responsibilities or as
required by a court of competent jurisdiction in accordance with applicable
law), any Confidential Information (as hereinafter defined), provided that
--------
the foregoing shall not apply to information which is not unique to the
Company or which is generally known to the industry or the public other
than as a result of Executive's breach of this covenant or which Executive
is required to disclose under applicable law. Executive agrees that upon
termination of Executive's employment with the Company for any reason, he
will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom,
in any way relating to the business of the Company and its affiliates,
except that he may retain personal notes, books and diaries that do not
contain Confidential Information; provided, however, that Executive may
-------- -------
retain (and divulge) Confidential Information for the limited purpose of
using such Information in connection with Executive's prosecution or
defense of any action arising under this Agreement. Executive further
agrees that he will not retain or use for Executive's account at any time
any trade names, trademark or other proprietary business designation used
or owned in connection with the business of the Company or its affiliates.
For purposes of this Agreement, "Confidential Information" shall mean all
non-public, proprietary and confidential information of the Restricted
Group, and "Restricted Group" shall mean the Company, its subsidiaries,
Xxxxxx, Inc., Kohlberg
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Kravis Xxxxxxx & Co., L.P. and any of their respective affiliates, in
existence on the date of termination of Executive's employment.
12. Specific Performance. Executive acknowledges and agrees that
--------------------
the Company's remedies at law for a breach or threatened breach of any of
the provisions of Section 9 or Section 10 would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the
Company, without posting any bond, shall be entitled to cease making any
payments or providing any benefit otherwise required by this Agreement and
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available; provided, however, that if and only if
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(a) Executive provides the Company with written notice of arty employment
that he obtains at any time during the Restricted Period (which notice
shall include Executive's new employer, position with the new employer, and
a brief summary of the nature of the business of his new employer) in a
timely fashion to the Company and (b) thereafter the Company determines
that such new employment breaches the covenants se forth in Section 9 or
Section 10, the Company may cease making such payments or providing such
benefits or obtain such equitable relief as provided for hereunder.
Notwithstanding the foregoing, the Company shall provide written notice to
Executive specifying in reasonable detail the nature of any breach of the
covenants set forth in Section 9 and Section 10 and Executive shall have a
period of 30 days in which to cure any such breach or threatened breach
before the Company may cease making such payments or providing such
benefits as provided for hereunder.
13. Miscellaneous.
-------------
a. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York,
without regard to conflicts of laws principles thereof.
b. Prior Agreements. This Agreement supercedes all prior
----------------
agreements and understandings (including verbal agreements) between
Executive and the Company and any predecessor employer regarding the
terms and conditions of Executive's employment with such employer
including, without limitation, the amended employment agreement
between Executive and General Housewares Inc., dated as of September
23, 1998.
c. Entire Agreement/Amendments. This Agreement contains the
---------------------------
entire understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly
set forth herein. This Agreement may not be altered, modified, or
amended except by written instrument signed by the parties hereto.
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d. No Waiver. The failure of a party to timely insist upon
---------
strict adherence of any term in this Agreement or to take advantage of
any remedy which such party may have hereunder on any occasion shall
not operate as caches or estoppel or be considered a waiver of such
party's rights, with respect to such breach or non-adherence or
deprive such party of the right thereafter to insist upon the
correction of such breach or strict adherence to that term or any
other term of this Agreement, or to seek such remedy or any other
remedy with respect to the original breach or non-adherence or any
breach or non-adherence thereafter.
e. Severability. In the event that any one or more of the
------------
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not
be affected thereby.
f. Assignment. This Agreement shall not be assignable by
----------
Executive. This Agreement may be assigned by the Company to a company
which is a successor in interest to substantially all of the business
operations of the Company or OXO. Such assignment shall become
effective when the Company notifies the Executive of such assignment
or at such later date as may be specified in such notice. Upon such
assignment, the rights and obligations of the Company hereunder shall
become the rights and obligations of such successor company, provided
that any assignee expressly assumes the obligations, rights and
privileges of this Agreement.
g. No Mitigation by Executive; Company's Right to Offset.
-----------------------------------------------------
Executive shall not be required to mitigate the amount of any payment
provided for pursuant to this Agreement by seeking other employment;
provided, however, that Executive agrees that if Executive breaches,
-------- -------
or fails to comply with, any covenant or agreement herein that applies
to the period following the termination of Executive's employment by
or with the Company (including Sections 9 and 10), from any further
obligations to pay to Executive any amounts that would otherwise be
payable to Executive under this Agreement (including but not limited
to amounts to be paid to Executive pursuant to Section 8(c)), and the
Company may seek recovery of such amounts paid while any such breach
occurs and continues concurrently with the Company making payment to
Executive of any amounts pursuant to Section 8.
h. Successors; Binding Agreement. This Agreement shall inure
-----------------------------
to the benefit of and be binding upon Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
i. Notice. For the purpose of this Agreement, notices and
------
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
three (3) business days after it is mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as
either party may have furnished to the other in writing in accordance
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herewith, except that notice of change of address shall be effective
only upon receipt.
If to the Company:
CCPC Holding Company, Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxxxx, President
If to Executive:
To the most recent address of Executive set forth in the personnel
records of the Company.
With a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
j. Withholding. The Company may withhold from any amounts
-----------
payable under this Agreement such Federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or
regulation.
k. Arbitration. Any unresolved dispute or controversy
-----------
arising under or in connection with this Agreement shall be settled
exclusively by arbitration, conducted before a single experienced
employment arbitrator in New York, New York, in accordance with the
rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators' award in any court having
jurisdiction. The provisions of this paragraph 12(j) shall not limit
the rights of the Company to enforce the restrictive covenants or
agreements of Employee set forth in Sections 9, 10 and 11 herein by
injunctions, restraining orders or other equitable actions in
circumstances specifically provided for in this Agreement.
l. Cost of Enforcement. In any action to enforce any of the
-------------------
provisions of this Agreement, the prevailing party shall be paid its
legal fees and expenses by the losing party (including legal fees and
expenses incurred to enforce this provision).
m. Counterparts. This Agreement may be signed in
------------
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
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n. Shareholder Approval. This Agreement shall not become
--------------------
effective and no payments and benefits set forth in Section 8 shall be
paid unless and until the Company obtains the affirmative vote of more
than seventy-five percent of all shareholders, excluding Executive and
excluding those shareholders who are lineally related to, or the
spouse of Executive. Even though all shareholders of the Company may
vote on the approval of this Agreement, only the votes of such
qualifying shareholders as are described in this Section 12(n) will
count for purposes of calculating whether the requisite shareholder
approval of this Agreement is obtained. If the foregoing shareholder
approval is obtained by the Company, the Company shall provide written
notice to the Executive no later than five business days after the
closing date of the Merger that such approval has been obtained.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
CCPC HOLDING COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
Title: President
EXECUTIVE:
/s/ Xxxxxxxxx Xxx
Xxxxxxxxx Xxx
000 Xxxxxxxxx Xxxxxx, #000
Xxx Xxxx. XX 00000
XXX
Address of Executive
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SCHEDULE A
FRINGE BENEFITS OF EXECUTIVE
LIFE INSURANCE
GHC's policy provides Life and Accidental Death & Dismemberment (AD&D) insurance
through Sun Life of Canada. Maximum coverage for executives is $500,000.
Employee pays a portion for the coverage.
TRAVEL ACCIDENT LIFE AND AD&D INSURANCE
Employees who are required to travel on behalf of GHC are covered by Travel
Accident insurance through Continental Casualty Company (CNA), which is a
$500,000 full-time travel and accident policy. There is no cost to the
employee.
SHORT TERM DISABILITY
GHC offers short term disability pay to employees that have used all their sick
paid days and are under a physician's care. Maximum benefit period is 26 weeks
(l00% of weekly compensation for first 6 weeks and 60% of weekly compensation
from the 7th until the 26th week). There is no cost to the employee.
LONG TERM DISABILITY (LTD)
GHC offers employees the option of a voluntary Long-Term Disability Income
Insurance program through Reliance Standard Life Insurance Co. The benefit is
60% of base monthly income up to $5,000 per month until age 65 (whichever sum is
less after a waiting period of 180 days). Premium is totally paid by the
employee.
GROUP HEALTH AND DENTAL
GHC offers health and dental benefits through Employers Health (Humana). This
is a PPO and the employee pays approximately 20% of the premium for the
coverage. Deductions are pre-tax. Employee is automatically enrolled in the
self-funded dental plan if they enroll in the group medical plan.
EXEC-U-CARE
GHC offers executives supplemental coverage through Exec-u-care if they are
enrolled in the group health/dental plan. This coverage pays the employee what
they pay "out-of-pocket" for healthcare (i.e., co-pays, deductibles, and items
not covered by the plan such as eye glasses), so that company pays 100% of
medical and dental expenses.
LONG TERM SAVINGS AND INVESTMENT PLAN (401(K))
Employee is eligible to participate the beginning of the quarter following their
one year anniversary. Employee can contribute 1% to 16% in pre-tax deductions.
GHC will match 50% of contribution to this plan up to a maximum of 6% of salary
(maximum match is therefore 3%). Employee is vested 100% in their
contributions. Employee is vested in employer match contributions as follows:
1 yr service 25%
2 yr service 50%
3 yr service 75%
4 yr or more 100%
PENSION PLAN
Employee is eligible after one year of employment and is fully vested after five
years of employment (based on 1000 hours each year). Two percent of salary and
incentive compensation for each year of service, with the average of five
highest consecutive calendar years in the last ten years of employment, up to a
maximum of 25 years or 50% of salary, subject to IRS requirements.
