EXHIBIT 10(k)
RETENTION AGREEMENT
This RETENTION AGREEMENT (the "Agreement") dated as of March 21,
2000, sets forth the mutual and binding understanding of the undersigned
regarding the special retention incentives intended to be afforded to Xxxxx X.
Xxxxxx (the "Executive") by Playtex Products, Inc. (Playtex and its subsidiaries
together called the "Company") in order to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility, threat
or occurrence of a "Change of Control".
1. Definitions:
The terms "Cause", "Change of Control " and "Good Reason" are defined in
Exhibit I.
2. Severance Upon Termination Prior To A Change Of Control:
A. Termination By The Company Without Cause:
If the Executive's employment is terminated by the Company during the Term
without "Cause" but prior to the occurrence of a Change of Control, the
Executive shall be entitled to receive an amount equal to one year's
salary in effect at the time of the termination, plus one year's bonus
(equal to the highest annual bonus paid to the Executive in respect of the
three most recent years ended prior to the date of the Executive's
termination of employment (the "Highest Annual Bonus")), both payable in
regular pay periods for one year following the date of Termination. Such
payouts shall not be reduced or subject to set-offs whether or not
Executive obtains other employment.
Such severance payments shall be in lieu of any severance payments
otherwise payable under the Company Severance Plan or any other plan or
arrangement of the Company concerning the Executive's termination of
employment, but without prejudice to the Executive's other rights, if any,
to other compensation under the Company's other plans and arrangements.
B. Termination By The Company For Cause, By The Executive Voluntarily,
or By Reason Of Death Or Disability (As Defined In Company's Long
Term Disability Policy) Of Executive or:
The Executive shall be entitled to the severance compensation set forth in
the Company's Severance Plan and any other arrangement to which the
Executive is
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party and which is applicable to such termination of employment, if any,
but shall not be entitled to any supplemental or enhanced severance
benefits hereunder.
3. Severance Upon Termination Following A Change Of Control:
For purposes of this Agreement, the Company's termination of the
Executive's employment without Cause within three months prior to the
occurrence of a Change of Control shall be treated as a termination
following a Change of Control.
A. Termination Within Three Years Following a Change of Control (i) By
The Company Without Cause, Or (ii) By The Executive For "Good
Reason":
(i) The Company shall pay the Executive an amount (the "Special
Termination Amount") equal to (a) one times the Executive's annual base
salary at the time of the Change of Control or at the time of termination
(whichever is higher) plus (b) one times the amount of one year's bonus
equal to the highest annual bonus paid or payable to the Executive in
respect of the three most recent fiscal years ended prior to the date of
the Executive's termination of employment ("Highest Annual Bonus"),
payable within 30 days after the date of termination.
(ii) The Company shall pay to the Executive in a lump sum in cash
within 30 days after the date of termination an amount equal to the sum of
(a) the Executive's annual base salary through the date of termination to
the extent not theretofore paid, (b) a pro rata portion of the Highest
Annual Bonus based upon the percentage of the Company's fiscal year that
shall have elapsed through the date of termination, (c) a pro rata
contribution to the Company's Profit-Sharing and Deferred Benefit
Equalization Plan with respect to the Executive (with no duplication of
benefits) for the current fiscal year, and (d) any compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case to the extent not
theretofore paid.
(iii) For the one-year period following the date of termination, the
Company shall (a) continue medical, welfare and fringe benefits to the
Executive and/or the Executive's family at least equal to those which
would have been provided to them in accordance with the plans, programs,
practices and policies of the Company (as in at the time of the Change of
Control; provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare and
fringe benefits under another employer provided plan, the medical and
other welfare and fringe benefits described herein shall be secondary to
those provided under such other plan during such applicable
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period of eligibility, and (b) make equivalent payments to Executive equal
to the payments which would have been made under the Playtex
Profit-Sharing Plan and Deferred Benefits Equalization Plan with respect
to the Executive, payable when such payments are made under the respective
Plans.
The severance payments and benefits provided hereunder shall be in lieu of
any severance payments otherwise payable under the Company's Severance
Plan or any other plan or arrangement of the Company in respect of the
Executive's termination of employment, but without prejudice to the
Executive's other rights, if any, to other compensation under the
Company's other plans and arrangements.
B. Termination (i) By The Company For Cause, (ii) By The Executive
Without Good Reason, (iii) Death or Disability, Or (iv) For Any
Reason After The Third Anniversary Of A Change of Control:
Executive shall be entitled to the severance compensation set forth in the
Company's Severance Plan or any other plan or arrangement to which the
Executive is a party and which is applicable to such termination of
employment, if any, but shall not be entitled to any supplemental or
enhanced severance benefits hereunder.
4. Special Payments Upon The Occurrence Of A Change of Control:
The Company shall pay the Executive a special bonus (the "Special Bonus")
in cash equal to the Highest Annual Bonus within 30 days following the
consummation of the Change of Control.
The Executive's accounts under the Playtex Products Profit-Sharing
Retirement Plan and Deferred Benefit Equalization Plan shall become fully
vested as of immediately prior to the consummation of the Change of
Control.
The Executive's outstanding stock options granted under the 1994 Playtex
Stock Option Plan shall become fully vested as of immediately prior to the
consummation of the Change of Control, provided, however, that such stock
options shall not vest on an accelerated basis if such acceleration is the
only factor which would prevent use of the pooling method of accounting in
connection with the Change in Control in which event, the unvested options
must be exchanged for common stock of the acquirer of equal value.
5. Certain Restrictions On Payment Of Compensation And Benefits:
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Notwithstanding any other provision of this Agreement to the contrary, if
the Company or the Executive determines (on the basis of advice from the
Company's independent public accountants) that part or all of the
consideration, compensation or benefits to be paid to Executive under this
Agreement or any other arrangement, plan or policy constitutes a
"parachute payment" under section 280G(b)(2) of the Internal Revenue Code
of 1986, as amended ("Code"), then the amounts constituting a "parachute
payment" which would otherwise be payable to or for the benefit of
Executive shall be reduced to the extent necessary so that the reduced
payments do not constitute a "parachute payment". If, due to the
uncertainty in the application of Section 4999, payments are made to the
Executive which should not have been paid, such amount shall be treated as
a loan to the Executive, who shall repay it with interest at the
applicable federal rate provided for in section 7872(f)(2) of the Code;
and if additional amounts could have been paid to the Executive, the
Company shall pay such amount together with such interest provided for in
section 7872(f)(2) of the Code.
6. No Mitigation Or Setoffs:
The Executive shall not be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive
under this Agreement and, except as provided in Section 3(A)(iii)(a)
(relating to continuation of medical, welfare and fringe benefits), such
amounts shall not be reduced or subject to setoffs (whether or not the
Executive obtains other employment).
7. Confidential Information:
During the term of Executive's employment by the Company, Executive shall
keep secret and retain in strictest confidence, and shall not use for the
benefit of himself or others except in connection with the business and
affairs of the Company, all confidential matters of the Company and its
affiliates, including, without limitation, trade "know-how", secrets,
consultant contracts, customer lists, subscription lists, details of
consultant contracts, pricing policies, operational methods, marketing
plans or strategies, product development techniques or plans, business
acquisition plans, new personnel acquisition plans, methods of
manufacture, technical processes, designs and design projects, inventions
and research projects and other business affairs of the Company and its
affiliates learned by Executive heretofore or hereafter, and shall not
disclose them to anyone outside of the Company and its affiliates, either
during or after
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employment by the Company or any of its affiliates, except (i) as required
in the course of performing duties hereunder, (ii) with the Company's
express written consent, (iii) if such information is or becomes generally
known by the public other than as a result of a breach hereof or (iv) as
required by law or judicial or administrative process.
8. Miscellaneous:
A. Withholding:
The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
B. Governing Law/Amendment:
This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut, without reference to the principles of
conflict of laws. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
C. Enforceability:
The Company agrees to pay all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the
outcome) by the Company or the Executive or others of the enforceability
of any provision of this Agreement, including the amount of any payment,
plus interest on any delayed payment.
D. Waiver:
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision.
The Executive's or the Company's failure to insist upon strict compliance
with any provision or the failure to assert any right shall not be deemed
to be a waiver of such provision or right.
E. Counterparts; Binding Effect:
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This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which taken together shall constitute
one and the same agreement. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
PLAYTEX PRODUCTS, INC.
/S/ XXXXX X. XXXXXX By: /S/ XXXXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
Executive Vice President and Chief Executive Officer
Chief Financial Officer
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EXHIBIT I
Certain Defined Terms
"Cause" shall mean (i) repeated violations by the Executive of the
Executive's duties to the Company (other than as a result of incapacity due to
physical or mental illness) which are demonstrably willful and deliberate on the
Executive's part, which are committed in bad faith or without reasonable belief
that such violations are in the best interests of the Company and which are not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such violations and (ii) the Executive's conviction of a
felony involving the assets or business of the Company or its affiliates.
"Change of Control" shall mean the occurrence of any of the
following: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14 (d) of the Exchange Act), is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
voting stock of the Company, (ii) the sale, lease, transfer, conveyance or other
disposition, in one or a series of related transactions, of all or substantially
all of the assets of the Company to any "person" or "group" (as such terms are
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to any
party or parties to the Stock Purchase Agreement or their respective affiliates
or (iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company (the
"Board") (together with any new directors whose election by such Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of a majority of all the Directors or a majority of the Directors on either
the "Purchaser Nominating Committee" or the "Non-Purchaser Nominating Committee"
as such terms are defined by the Stock Purchase Agreement, in each case who were
either directors at the beginning of such period or were previously so elected
or nominated) cease for any reason to constitute a majority of the Board then in
office.
"Good Reason" shall mean any substantial diminution in the
Executive's title, duties, status, reporting relationship, authority, or
responsibilities, a reduction in the aggregate compensation and benefits
provided to the Executive by the Company and its affiliates from those earned by
the Executive at the time of the Change of Control, or a requirement that the
Executive's principal place of employment be relocated more than 35 miles from
his principal place of employment prior to the occurrence of a Change of
Control, which diminution, reduction or relocation is not remedied in a
reasonable period of time after receipt of written notice from the Executive
specifying such events.
