Exhibit 99.10
EMPLOYMENT AGREEMENT
AGREEMENT made as of July 8 , 1998, by and between XXXXXX XXXXXXXX
("Employee"), and DEP Corporation ("Employer") to be effective as provided in
paragraph 3 below.
1. EMPLOYMENT. As of the effective date, Employer agrees to employ
Employee, and Employee agrees to serve as an employee of Employer,
pursuant to the terms and conditions of this Employment Agreement
("Agreement").
2. DUTIES. Employee's title shall be President and Chief Executive
Officer. In such capacity, Employee shall be the senior executive
officer of Employer, with general supervisory authority over its
business and operations, subject to the direction of Employer's Board
of Directors. Employee's principal place of business shall be in Los
Angeles, California, or its neighboring communities, subject to normal
and reasonable requirements for business travel. Employee shall
devote all of his business time and attention to the business and
affairs of Employer, and shall perform such duties consistent with his
position as shall, from time-to-time, be designated by the Employer,
which duties shall consist of, but not be limited to achieving
sustainable competitive financial long-term success in the
marketplace, creating a corporate environment which fosters high
standards of leadership, cooperation and teamwork, and promoting
systems conducive to excellence in product quality, customer service,
and community relations. During the term of this Agreement, Employee
promises to render loyal and diligent service to Employer.
3. TERM. Employee's term of employment, under this Agreement, shall
commence as of the effective date of this Agreement and shall continue
for a three-year period, unless terminated at an earlier date pursuant
to paragraph 7 of this Agreement. The effective date of this
Agreement shall be the first date on which Xxxxxx Corporation or its
affiliates ("Henkel") becomes the beneficial owner of a majority of
the outstanding stock of Employer. As of such date, this Agreement
shall supersede in its entirety the Employment Agreement between
Employee and Employer dated as of March 23, 1998, and any other
agreement relating to the subject matter of this Agreement between
Employer and Employee. If Henkel does not become the beneficial owner
of a majority of the outstanding stock of Employer by December 31,
1998, this Agreement shall be null and void.
4. COMPENSATION. In consideration of the performance by Employee of his
duties, and promise not to disclose (paragraph 14) and promise not to
compete (paragraph 15), Employer shall pay to Employee during the term
of his employment the following compensation:
a) SALARY. A base salary at the rate of not less than
$565,000 per year. Such amount is referred to as "Base
Salary". In the event that the Company, in its sole
discretion, from time to time determines to increase the
Base Salary, such amount shall constitute "Base Salary" for
purposes of this Agreement. Employee's Base Salary shall be
payable in monthly or bi-monthly installments, subject to
all applicable federal, state and local withholding, social
security, and other taxes or charges required by law to be
withheld by an employer.
b) OTHER BENEFITS. Employee shall be entitled to receive all
other employee benefits currently existing, on a basis not
less favorable than those provided to Employee immediately
prior to the effective date of this Agreement.
c) INCENTIVE COMPENSATION. In lieu of the current equity
opportunity enjoyed by Employee, Employer shall offer the
following cash alternative:
During the term of Employee's employment, Employee shall receive
incentive compensation pursuant to the:
- Xxxxxx Corporation Management Incentive Plan (MIP)
- Xxxxxx Corporation Long-Term Incentive Plan (LTI)
Employee shall be eligible for participation as of the year 1999
for the following participation as a function of his Base Salary:
- MIP maximum opportunity of 45% of Base Salary defined in 4a.
- LTI maximum opportunity of 67% of Base Salary defined in 4a.
The 1999 MIP and LTI incentive payment shall be paid in April of
2000. Employee shall be entitled to receive not less than
$250,000 as the aggregate guaranteed minimum incentive payment
for 1999 under the MIP and LTI Plans. The 2000 MIP and LTI
incentive payment shall be paid in April of 2001. Employee shall
be entitled to receive not less than $250,000 as the aggregate
guaranteed minimum incentive payment for 2000 under the MIP and
LTI Plans.
For 1998, Employee shall be entitled to a fixed incentive payment
equal to $250,000 payable in April 1999.
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5. PERQUISITES. During the term of Employee's employment, Employee shall
be entitled to the following perquisites:
a) AUTOMOBILE. In accordance with established policy, Employer
shall provide Employee with the use of an automobile
(including insurance, maintenance, and gas) which shall be
leased or owned by Employer.
b) VACATION. Employee shall be entitled to at least 20 days
vacation per year plus customary holidays.
In the event that any of the aforesaid benefits are considered items of
taxable income to Employee, Employer will not provide any monies to mitigate or
"gross up" any such tax impact.
6. EXPENSES. Employee shall be entitled to reimbursement for all
reasonable and necessary, travel, and other business expenses,
incurred by Employee during the performance of his duties, subject to
the usual and customary requirements of substantiation and
documentation.
7. TERMINATION. Employee's term of employment is subject to termination
upon the occurrence of any of the following:
a) Upon the death of Employee, effective as of the date of
Employee's death.
b) Upon Employee being permanently and totally disabled, as
defined pursuant to the terms of the Employee's then current
disability insurance coverage.
c) For convenience of Employee, effective thirty (30) days
after the date of delivery to Employer of such notice in
writing.
d) For convenience of Employer or Henkel, effective thirty (30)
days after the date of delivery to Employee of such notice
in writing.
e) By Employee, for Good Reason effective thirty (30) days
after date of delivery to Employer of such notice in
writing. "GOOD REASON" shall mean any of the following
events during Employee's employment with Employer: (a) the
assignment of the Employee, without the Employee's consent,
to a position other than President and Chief Executive
Officer of the Employer, or having authority,
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responsibilities or duties that are substantially less than
his authority, responsibilities or duties as of the
effective date of this Agreement (The parties recognize
that Employer may not remain as a separate legal entity and
that there may be other reasons why Employee's
responsibilities, including but not limited to reporting
responsibilities, may change as a result of Employer's
integration into the Henkel organization or why Employee's
title may change. By themselves, these changes shall not be
deemed to constitute "Good Reason" for purposes of this
Agreement, provided that the substance of Employee's
authority, responsibility or duties are not substantially
reduced from those in effect as of the effective date of
this Agreement.); (b) the relocation, without the Employee's
consent, of the Employer's principal executive offices
outside of Los Angeles, California or its neighboring
communities; (c) a material breach by the Employer of any
provision of this Agreement; (d) the reduction, without
Employee's consent, of Employee's Base Salary or incentive
compensation opportunity; (e) any substantial reduction of
fringe benefits provided to Employee; (f) the Employer's
failure to obtain an agreement from any successor or assign
of the Employer to assume and agree to perform this
Agreement or (d) a Change of Control of the Employer.
"CHANGE OF CONTROL" shall mean a transaction where (i) the
Employer sells all or substantially all of its assets,
except if such sale is to Henkel or an affiliate of Henkel
(ii) the Employer participates in a merger, consolidation or
other similar type of transaction in which it is not the
surviving corporation, unless such transaction is with
Henkel or an affiliate of Henkel or (iii) Henkel and its
affiliates cease to own a majority of the common stock in
the Employer.
f) By Employer in the event that Employee's employment is
terminated by Employer for Good Cause immediately upon
notice to Employee of the circumstances leading to such
termination for Good Cause. "GOOD CAUSE" shall mean the
occurrence of any of the following events during Employee's
employment with Employer: (a) Employee's commission of a
felony or embezzlement of money or other property of
Employer; (b) a wilful and material breach by Employee of
any provisions of this Agreement; (c) Employee's wilful and
material failure to observe the reasonable directives of
Employer's Board of Directors; or (d) willful gross neglect
or willful gross misconduct in carrying out Employee's
duties.
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8. SEVERANCE BENEFITS. If Employee's employment is terminated pursuant
to paragraph 7d or 7e, Employee shall receive the greater of (a) or
(b), where (a) and (b) are as follows:
a) Severance payments and continuation of other employment
related benefits in an amount and in a form which Employee
would receive as a participant in the Xxxxxx Corporation
Severance Pay Plan (pursuant to the provisions of such plan
or successor plan which is in effect on the date Employee's
employment is terminated) or,
b) A one-time lump sum payment in an amount equal to the sum,
as of date Employee's employment is terminated, of
Employee's Base Salary, guaranteed minimum incentive
payments and fringe benefits specified in paragraphs 4a, 4b
and 4c for the remainder of the three (3) year initial term
of this Agreement. In addition, Employee shall have the
right to participate in all medical, dental,
hospitalization, insurance and other benefits which were
provided by Employer during the term of his employment
hereunder pursuant to paragraph 4(b), until such time as he
is eligible for Medicare benefits.
.
9. TERMINATION FOR GOOD CAUSE, CONVENIENCE OF EMPLOYEE, DEATH OR
DISABILITY. In the event that Employee's employment is terminated
pursuant to paragraph 7(a), 7(b), 7(c) or 7(f), Employee will receive
payment for all accrued Base Salary, accrued and vested benefits and
vacation time through the date of his termination of employment.
Except as set forth in this paragraph 9, Employer will have no further
obligation to pay severance or benefits of any kind whether under this
Agreement or otherwise.
10. ARBITRATION.
a) Any disputes or claims arising out of or concerning
Employee's employment or termination by Employer whether
arising under theories of liability or damages based upon
contract, tort or statute will be determined exclusively by
arbitration before a single arbitrator in accordance with
the employment arbitration rules of the American Arbitration
Association, except as modified by this Agreement. The
arbitrator's decision will be final and binding on both
parties. Judgment upon the award rendered by the arbitrator
may be entered in any court of competent jurisdiction. In
recognition of the fact that resolution of any disputes or
claims in the courts is rarely timely or cost effective for
either party, the parties enter this mutual agreement to
arbitrate in order to gain the benefits of a speedy,
impartial and cost-effective dispute resolution procedure.
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b) Any arbitration will be held in Employee's place of
employment with Employer. The arbitrator must be an
attorney with substantial experience in employment matters,
selected by mutual agreement of the parties. If the parties
are unable to agree to an arbitrator within thirty (30) days
following a demand for arbitration hereunder, an arbitrator
meeting the foregoing experience requirement shall be
selected by alternately striking names from a list of five
(5) such persons provided by the American Arbitration
Association (AAA) office located nearest to the place of
employment, following a request by the party seeking
arbitration for a list of five (5) such attorneys. If
either party fails to strike any of the names from the list,
the arbitrator will be selected from the list by the other
party.
c) Each party will have the right to take the deposition of one
(1) individual and any expert witness designated by the
other party. Each party will also have the right to
propound requests for production of documents to any party
and the right to subpoena documents and witnesses for the
arbitration. Additional discovery may be made only where
the arbitrator selected so orders upon a showing of
substantial need. The arbitrator will have the authority to
entertain a motion to dismiss and/or a motion for summary
judgment by any party and will apply the standards governing
such motions under the Federal Rules of Civil Procedure.
d) The parties agree that they will attempt, and they intend
that they and the arbitrator should use their best efforts
in that attempt, to conclude the arbitration proceeding and
have a final decision from the arbitrator within 120 days
from the date of selection of the arbitrator; provided,
however, that the arbitrator will be entitled to extend such
120-day period for one additional 120-day period. The
arbitrator will deliver a written award with respect to the
dispute to each of the parties, who must promptly act in
accordance therewith.
e) Employer will pay any and all reasonable fees and expenses
incurred by Employee in seeking to obtain or enforce any
rights or benefits provided by this Agreement, including all
reasonable attorneys' and experts' fees and expenses,
accountants' fees and expenses, and court costs (if any)
that may be incurred by Employee in pursuing a claim for
payment of compensation or benefits or other right or
entitlement under this Agreement, except that Employee shall
not be entitled to such payment unless the Arbitrator shall
award Employee in excess of twenty-five thousand dollars
($25,000.00).
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f) The arbitrator must act in accordance with the terms and
provisions of this Agreement and applicable legal principles
and will have no authority to add, delete or modify any term
or provision of this Agreement.
11. AMENDMENT. This Agreement may be amended only by writing, and no
modification or waiver of any provision of this Agreement shall be
valid, unless in writing, and signed by both parties.
12. ASSIGNMENT. This Agreement shall be binding and enforceable against
the successors and assigns of Employer.
13. GOVERNING LAW. The terms and provisions of this Agreement shall be
governed by the laws of the Sate of California.
14. NONDISCLOSURE COVENANT.
a) Employee hereby agrees and acknowledges that all information
pertaining to the prior, current or contemplated conduct and
details of Employer, and Henkel ("Confidential
Information"), whether generated by Employee or otherwise,
and whether generated during regular working hours or
otherwise, is the sole property and a valuable and
confidential asset of Employer and Henkel. Confidential
Information shall include, without limitation, information
related to trade secrets, supplier lists, customer lists and
needs, identities of customer representatives, contracts,
machinery, equipment, computer software, design techniques,
credit sources and information, technical know-how, research
and development activities and data, inventions,
discoveries, distribution, packaging, advertising and
selling methods, administrative procedures, private
processes, techniques and formulae, as well as other aspects
of the affairs and business operations of Employer and
Henkel as they may exist from time to time. Confidential
Information shall not include (i) information and knowledge
that Employee possessed independently of or prior to his
employment or association with Employer, and Henkel and (ii)
publicly available information in substantially the form in
which it is publicly available unless such information is
publicly available by reason of unauthorized disclosure or
(iii) information of a general nature not pertaining
exclusively to Employer and Henkel which could generally be
acquired in similar employment with another company.
Employee hereby covenants and agrees that during the term of
this Agreement and thereafter, whether terminated by
Employee or by Employer or Henkel, he shall keep
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confidential Information inviolate and confidential and
shall not reveal it to any competitor or other person or
apply it for his own purpose or that of a third party of
otherwise publicize or use Confidential Information without
the prior written consent of Employer and Henkel.
b) Upon any termination of this Agreement or upon demand of
Employer or Henkel, Employee shall deliver or cause to be
delivered to Employer or Henkel all records, papers,
notebooks, memoranda, letters and other repositories of
Confidential Information, whether prepared by him or others,
including all copies thereof, then in his possession or
control, without retaining any copies thereof. During the
term of this Agreement, employee shall keep such records,
papers, notebooks, memoranda, letters and other repositories
of Confidential Information in such a manner so as to deny
any unauthorized persons all access thereto.
15. NON-COMPETITION COVENANTS.
a) Employee covenants and agrees that during the term of this
Agreement and for a period of six (6) months from the date
of termination of this Agreement, he shall not, directly or
indirectly, render services for or enter employment with,
any competitor doing business in the fields related to
Employer's businesses, or such other business segments as
Employee may have responsibility for or close involvement
in, as a member of the management team. If Employee is
offered employment by a company engaged in such competitive
business and also doing substantial business in other
fields, Employee may accept employment with such competitor
provided Henkel is given written assurance by such company
that Employee will not be required to provide any services
to the market segments referred to above.
b) Employee further covenants and agrees that during the term
of this Agreement and for a period of six (6) months from
the date of termination of this Agreement he shall not,
directly, or indirectly, influence or attempt to influence
any employee, agent, distributor or supplier of Employer or
Henkel to terminate or otherwise impair Employer's or
Xxxxxx'x relationship with such employee, agent, distributor
or supplier.
c) Henkel may elect to extend the non-competition and
non-solicitation restrictions contained in paragraphs 15(a)
and 15(b) for an additional, consecutive six (6) month
period upon payment of $10 to Employee.
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Henkel may make such election at any time prior to
expiration of the initial six (6) month period.
d) Employee may solicit the prior written consent of Employer
or Henkel to conduct otherwise proscribed by this Agreement
by submitting a written request therefore. Employer or
Henkel will promptly advise Employee whether it will waive
the requirements of this Agreement with respect to such
request.
16. LIMITED EFFECT OF WAIVER BY COMPANY. If the Employer and Henkel
waives a breach of any provision of this Agreement by the employee,
that waiver will not operate or be construed as a waiver of later
breaches by the Employee.
17. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, the other provisions of this Agreement will remain in
effect, insofar as is consistent with law. If this Agreement is held
invalid or cannot be enforced, then to the full extent permitted by
law any prior agreement between the Employer (or any predecessor
thereof) and the Employee will be deemed reinstated as if this
Agreement has not been executed.
18. CONSIDERATION. The compensation package as outlined in paragraph 4
shall be considered as direct, consideration for Employee's commitment
and promise contained in paragraphs 14, 15(a) and 15(b) (as well as
for Employee's performance of his duties).
/s/ Xxxxxx Xxxxxxxx Date: July 8, 1998
------------------------------------- ----------------------------------
XXXXXX XXXXXXXX
DEP CORPORATION
By: /s/ Xxxxxx X. Xxxxxx Date: July 8, 1998
------------------------------------- ----------------------------------
Title: Chairman, Compensation &
Management Stock Option
Committee
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