USA Detergents, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
May 5, 1997
Xx. Xxxxxx X. Xxxxxxx
0000 Xxxx Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX
Re: Letter Agreement
Dear Hal:
This will constitute the agreement between you and USA Detergents,
Inc. (the "Company") regarding your resignation from employment from the
Company and retention as a consultant to the Company, both effective May 5,
1997.
1. You will be paid your salary, less lawful deductions, and accrued
vacation pay through the effective date of your resignation from employment.
2. In return for your general release and the other covenants and
agreements set forth below, the Company will voluntarily provide the following
aggregate consideration, which you acknowledge that, on the whole, you are not
otherwise entitled to receive under applicable law, Company policy, or pursuant
to any contractual agreement you may have with the Company:
(a) You will be a consultant to the Company for the period
beginning on the effective date of your resignation from employment and
ending on a date 180 days thereafter, or such earlier date as the Company
may determine at any time during such 180 day period (such 180 day or
shorter period is referred to in this letter agreement as the "Consulting
Term"), at an annualized rate equal to $125,000 per annum, payable in
bi-monthly installments, or, at the Company's election, in accordance with
the Company's normal salary payment policies for its employees generally.
You acknowledge that the Company will not withhold taxes on any amounts
paid to you as a consultant, except to the extent required by law, and that
you are responsible for any tax withholding, social security, unemployment
insurance and other similar payments not made by the Company on any such
amounts paid to you.
(b) You will, during the Consulting Period, be available as a
consultant to the Company for an average of thirty-seven and one-half
(37.5)
hours per week at the Company's offices. It is understood that if
Consultant meets the average hours requirement contained in the preceding
sentence for the bi-weekly pay period referred to in paragraph (a) of this
Section 2, he will be paid his specified salary for such bi-monthly period
despite the occurrence of any holiday on which the Company's offices are
closed for business during such period. It is anticipated that you will be
working directly with, and providing consulting services and assistance to,
Xxxxxxx Xxxxxx, the present chief financial officer of the Company. You
will receive directions as to the scope of your assignment and tasks to be
performed from Xx. Xxxxxx and, to the extent he or they so desire, from the
Company's Chairman and/or Board of Directors.
As a consultant, you acknowledge and agree that you are an independent
contractor and do not and will not have the power or authority to sign
contracts for or otherwise bind the Company without express written
authorization from an executive officer of the Company; nor will you hold
yourself out as an officer or employee of the Company.
(c) Except as otherwise provided herein, you will continue to be
covered by the Company's group health insurance through the Severance
Period (as defined herein) at the Company's expense. After the Severance
Period has ended, you may elect to continue your health insurance coverage
at your own expense for the period allowed under applicable law, and will
be provided information regarding your option to do so by separate letter.
(d) You shall no longer be entitled to participate in the
Company's profit sharing plan (i.e., the "OGM Plan"), and you acknowledge
that no sum is owed or may hereafter be owed to you under the OGM Plan in
connection with your employment by the Company up to the date hereof.
(e) If, and only to the extent, that you have satisfactorily
provided, in the sole reasonable discretion of the Company, the consulting
services required pursuant to the terms hereof during the Consulting
Period, you will be entitled to continued vesting of all options granted to
you under the Company's 1995 Stock Option Plan (the "Plan") through March 1
1999, in accordance with the option vesting schedule set forth in your
option agreements with the Company (the "Option Agreements").
Notwithstanding any provision to the contrary contained in the Plan, the
Option Agreements or any agreement made under the Plan or the Option
Agreements, all options granted to you must be exercised within six months
from the date such options vest (including any automatic vesting in
accordance with Section 8 of the Option Agreements) or, as to options which
have vested prior to May 5, 1997, on or before November 5, 1997, in all
instances unless otherwise agreed to in writing by the Company. You
understand that an exercise of any stock option subsequent to three months
after the effective date of your resignation from employment with the
Company will not be treated as an exercise of an incentive stock option,
notwithstanding your status as a consultant to the Company.
(f) If, and only to the extent, that you have satisfactorily
provided, in the sole reasonable discretion of the Company, the consulting
services required pursuant to the terms hereof during the Consulting
Period, the Company shall pay to you a severance payment in the amount of
$62,500, less all lawful deductions, payable in equal bi-monthly
installments (or, at the Company's election, in accordance with the
Company's normal salary payment policies for its employees generally) over
a period of six months commencing on the date immediately succeeding the
last day of the Consulting Term (the "Severance Period").
(g) It is understood and agreed that you will be unable to
perform consulting services hereunder during the period from August 8 to
August 24 and that you will not receive any compensation pursuant to
paragraph (a) of this Section 2 during such period.
By entering into this letter agreement, you waive any claim to
reinstatement and/or future employment with the Company or any present or
future entity affiliated with the Company.
3. In consideration of the voluntary payment and aggregate
consideration offered above, you hereby agree to release and discharge each of
the Company, its affiliated entities and its or their respective officers,
directors employees, representatives, and agents, from any and all claims,
causes of action and demands of any kind, arising at law or in equity, whether
known or unknown, which you have, ever have had, and ever in the future may
have, against any of them, relating to or arising out of your employment
relationship with the Company (including out of your employment agreement with
the Company dated as of July 31, 1995 (the "Employment Agreement")) under any
contract, tort, federal, state or local fair employment practices or civil
rights law including, but not limited to, Title VII of the Civil Rights Act of
1964, as amended, the Americans with Disabilities Act, the Age Discrimination
in Employment Act, the Older Worker Benefits Protection Act, the Employee
Retirement Income Security Act of 1974, the New Jersey Law Against
Discrimination or any claim for physical or emotional distress or injuries, or
any other duty or obligation of any kind or description. This release shall
apply to all known, unknown, unsuspected and unanticipated claims, liens,
injuries and damages relating to or arising out of your employment relationship
with the Company including, but not limited to, claims of employment
discrimination, indemnity for discharge, or claims sounding in tort or in
contract, express or implied, as of the date of the execution of this
Agreement. You also agree not to initiate any legal action, charge or complaint
against the Company in any forum whatsoever to the extent that such legal
action, charge or complaint is based on events which took place prior to the
date of execution hereof or claims existing as of the date of execution hereof.
In the event any such actions, charges or complaints are asserted in the future
by or on behalf of you, a breach of this letter agreement shall be deemed to
have occurred, and the Company shall be entitled to the return of the
consideration set forth in this letter agreement, as well as the payment of all
attorneys'
fees incurred by the Company in defending such action, charge or complaint,
together with any other remedies available to the Company at law or in equity.
4. You hereby reconfirm the obligations undertaken by you under
Sections 7 (confidential information) and 8 (two year covenant not to compete)
of your Employment Agreement. You further agree that neither you nor your
representatives will publicly or privately disparage or criticize the Company
or any of the Company's products, services, divisions, affiliates, related
companies or current or former officers, directors, trustees, employees,
agents, administrators, representatives or fiduciaries.
5. Except as set forth in this letter agreement, you acknowledge that
upon signing this letter agreement: (a) your Employment Agreement is hereby
terminated and of no further force and effect, and (b) all past, present or
future obligations of the Company, with respect to your salary, bonuses,
vacation, leave and other benefits have been satisfied and fulfilled, and that
the Company has no further obligations with respect thereto.
6. You agree to cooperate with the Company in connection with any
threatened, actual or future litigation, administrative hearings or similar
matter involving the Company, whether administrative, civil or criminal in
nature, in which and to the extent your cooperation is deemed necessary by the
Company in its discretion. The Company agrees to reimburse you for all
out-of-pocket disbursements incurred by you in connection with your travel
needed for such cooperation.
7. You hereby agree to indemnify and hold harmless the Company, its
affiliated entities and its or their respective officers, directors, employees,
representatives and agents, against and in respect of any and all damages,
losses, liabilities, obligations, costs and expenses (including reasonable
attorneys' fees) that the Company or any such other person may suffer or incur
as a result of a breach of any of your obligations set forth herein. You hereby
acknowledge that in the event of a breach or threatened breach by you of the
provisions of this letter agreement, the Company would suffer irreparable harm
for which there would be no adequate remedy at law. Accordingly, you agree that
in such event, in addition to any other remedies which the Company may have in
law or in equity for money damages or other relief, the Company shall be
entitled to temporary and/or injunctive relief, without the necessity of
proving damages, to enforce the provisions hereof.
8. You hereby acknowledge that you have been provided an opportunity
to consult with an attorney or other advisor of your choice regarding the terms
of this letter agreement, that you have been given twenty-one (21) days in
which to consider whether you wish to enter into this letter agreement, and
that you have elected to enter into this letter agreement knowingly and
voluntarily. You further acknowledge that you may revoke your assent to this
letter agreement within seven (7) days of its execution by you. If you wish to
revoke your agreement, your written notice of revocation must be received
within the seven (7) day revocation period by the Company (attention: Xxxxxxxxx
X. Xxxxxxxx) at its address. The voluntary payments
and consideration to be provided by the Company pursuant to paragraph 2 hereof
will be made and/or given if you do not revoke this letter agreement prior to
the expiration of the revocation period.
9. Notwithstanding any other provision contained herein, the
obligations assumed by the Company under this letter agreement shall be
conditioned upon its receipt of an executed duplicate original of this letter
agreement and complete adherence to its terms by you.
10. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
conflicts of laws provisions.
11. If any of the provisions, terms, clauses, or waivers or releases
of claims or rights contained in this letter agreement is declared illegal,
unenforceable, or ineffective in a legal forum, such provisions, terms,
clauses, waivers, releases or claims or rights shall be deemed severable, such
that all other provisions, terms, clauses, waivers, releases of claims and
rights contained in this letter agreement shall remain valid and binding upon
both parties.
12. The failure of the Company to insist upon strict adherence to any
term of this letter agreement on any occasion shall not be considered a waiver
thereof or deprive it of the right thereafter to insist upon strict adherence
to that term or any other term of this letter agreement.
13. This letter agreement may not be changed except by a writing
signed by you and an authorized management representative of the Company.
If you agree to the foregoing terms, please sign and return to us the
enclosed copy of this letter, which will then be a binding agreement between
us.
Very truly yours,
USA DETERGENTS, INC.
By: /s/ Uri Evan
--------------------------
Uri Evan
Chairman of the Board
Agreed to as of May 5, 1997
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
