Executive Employment Agreement
EXHIBIT 10.35
1. Employment.
Employer agrees to employ Executive and Executive accepts such employment for
the period effective as of August 1, 2005 and ending upon his separation
pursuant to Section 1(c) hereof (the “Employment
Period”).
(a) Position
and Duties.
(i) During
the Employment Period, Executive shall serve as the Secretary & General
Counsel of Employer and shall have the normal duties, responsibilities and
authority implied by such position, subject to the power of the Chief Executive
Officer of Employer and the Board to expand or limit such duties,
responsibilities and authority and to override such actions.
(ii) Executive
shall report to the Chief Executive Officer of Employer, and Executive shall
devote his best efforts and his full business time and attention to the business
and affairs of the Company, Employer and their Subsidiaries.
(b) Salary,
Bonus and Benefits. During the Employment Period, Employer will pay
Executive a base salary of $300,000 per annum (the “Annual Base
Salary”). In addition, the Executive shall be eligible for and participate
in the Annual Incentive Compensation Plan (the “Annual Bonus”) under which the
Executive shall be eligible for an annual Target Bonus payment of 45% of annual
base salary with a maximum of 90% of annual salary. All provisions of the Annual
Bonus as approved by the Board of Directors will apply. During fiscal year
beginning April 1, 2005, the Board shall develop a new Long Term Incentive
Compensation program which may incorporate subjective and/or objective criteria
for bonus achievement, which program will be proportionately applicable to
Executive as determined by the Board. In addition, during the Employment Period,
Executive will be entitled to such other benefits approved by the Board and
made
available to the senior management of the Company, Employer and their
Subsidiaries, which shall include vacation time (in an amount consistent with
past practice) and medical, dental, life and disability insurance. The Board,
on
a basis consistent with past practice, shall review the Annual Base Salary
of
Executive and may increase the Annual Base Salary by such amount as the Board,
in its sole discretion, shall deem appropriate. The term “Annual Base Salary” as
used in this Agreement shall refer to the Annual Base Salary as it may be so
increased.
(c) Separation.
The Employment Period will continue until (i) Executive’s death, disability or
resignation from employment with the Company, Employer and their respective
Subsidiaries or (ii) the Company, Employer and their respective Subsidiaries
decide to terminate Executive’s employment with or without Cause. If (A)
Executive’s employment is terminated without Cause pursuant to clause (ii) above
or (B) Executive resigns from employment with the Company, Employer or any
of
their respective Subsidiaries for Good Reason, then during the period commencing
on the date of termination of the Employment Period and ending on the first
anniversary of the date of termination (the “Severance Period”), Employer
shall pay to Executive, in equal installments on the Employer’s regular salary
payment dates, an aggregate amount equal to (I) his Annual Base Salary, plus
(II) an amount equal to the annual bonus, if any, paid or payable to Executive
by Employer for the last fiscal year ended prior to the date of termination.
In
addition, if Executive is entitled on the date of termination to coverage under
the medical and prescription portions of the Welfare Plans, such coverage
shall
continue
for Executive and Executive’s covered dependents for a
period ending on the first anniversary of the date of termination at the
active employee cost payable by Executive
with respect to those costs paid by Executive prior to the date of termination;
provided, that this coverage will count towards the depletion of any
continued health care coverage rights that Executive and Executive’s dependents
may have pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985,
as amended (“COBRA”); provided further, that Executive’s or
Executive’s covered dependents’ rights to continued health care coverage
pursuant to this Section 1(c) shall terminate at the time
Executive or Executive’s covered dependents become covered, as described in
COBRA, under another group health plan, and shall also terminate as of the
date
Employer ceases to provide coverage to its senior executives generally under
any
such Welfare Plan. Notwithstanding the foregoing, (I) Executive shall not
be
entitled to receive any payments or benefits pursuant to this Section
11(c) unless Executive has executed and delivered to Employer a
general release in form and substance satisfactory to Employer and (II)
Executive shall be entitled to receive such payments and benefits only so
long
as Executive has not breached the provisions of Section 2 or Section
3 hereof. The release described in the foregoing sentence shall not require
Executive to release any claims for any vested employee benefits, workers
compensation benefits covered by insurance or self-insurance, claims to
indemnification to which Executive may be entitled under the Company’s or its
Subsidiaries’ certificate(s) of incorporation, by-laws or under any of the
Company’s or its Subsidiaries’ directors or officers insurance policy(ies) or
applicable law, or equity claims to contribution from the Company or its
Subsidiaries or any other Person to which Executive is entitled as a matter
of
law in respect of any claim made against Executive for an alleged act or
omission in Executive’s official capacity and within the scope of Executive’s
duties as an officer, director or employee of the Company or its Subsidiaries.
Not later than eighteen (18) months following the termination of Executive’s
employment, the Company and its Subsidiaries for which the Executive has
acted
in the capacity of a senior manager, shall sign and deliver to Executive
a
release of claims that the Company or its Subsidiaries has against Executive;
providedthat, such release shall not release any claims that the
Company or its Subsidiaries commenced prior to the date of the release(s),
any
claims relating to matters actively concealed by Executive, any claims to
contribution from Executive to which the Company or its Subsidiaries are
entitled as a matter of law or any claims arising out of mistaken
indemnification by the Company or any of its Subsidiaries. Except as otherwise
provided in this Section 1(c) or in the Employer’s employee benefit plans
or as otherwise required by applicable law, Executive shall not be entitled
to
any other salary, compensation or benefits after termination of Executive’s
employment with Employer.
2. Confidential
Information.
(a) Obligation
to Maintain Confidentiality. Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
during the course of his performance under this Agreement concerning the
business or affairs of the Company, Employer and their respective Subsidiaries
and Affiliates (“Confidential Information”) are the property of the
Company, Employer, or such Subsidiaries and Affiliates, including information
concerning acquisition opportunities in or reasonably related to the Company’s
and Employer’s business or industry of which Executive becomes aware during the
Employment Period. Therefore, Executive agrees that he will not disclose to
any
unauthorized Person or use for his own account (for his commercial advantage
or
otherwise) any Confidential Information without the Board’s written consent,
unless and to the extent that the Confidential Information, (i) becomes
generally
known
to
and available for use by the public other than as a result of Executive’s acts
or omissions to act, (ii) was known to Executive prior to Executive’s employment
with Employer, the Company or any of their Subsidiaries and Affiliates or (iii)
is required to be disclosed pursuant to any applicable law, court order or
other
governmental decree. Executive shall deliver to the Company at a Separation,
or
at any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) relating to the Confidential Information, Work Product
(as
defined below) or the business of the Company, Employer and their respective
Subsidiaries and Affiliates (including, without limitation, all acquisition
prospects, lists and contact information) which he may then possess or have
under his control.
(b) Ownership
of Property. Executive acknowledges that all discoveries, concepts,
ideas, inventions, innovations, improvements, developments, methods, processes,
programs, designs, analyses, drawings, reports, patent applications,
copyrightable work and mask work (whether or not including any Confidential
Information) and all registrations or applications related thereto, all other
proprietary information and all similar or related information (whether or
not
patentable) that relate to the Company’s, Employer’s or any of their respective
Subsidiaries’ or Affiliates’ actual or anticipated business, research and
development, or existing or future products or services and that are conceived,
developed, contributed to, made, or reduced to practice by Executive (either
solely or jointly with others) while employed by the Company, Employer or any
of
their respective Subsidiaries or Affiliates (including any of the foregoing
that
constitutes any proprietary information or records) (“Work Product”)
belonging to the Company, Employer or such Subsidiary or Affiliate and Executive
hereby assigns, and agrees to assign, all of the above Work Product to the
Company, Employer or to such Subsidiary or Affiliate. Any copyrightable work
prepared in whole or in part by Executive in the course of his work for any
of
the foregoing entities shall be deemed a “work made for hire” under the
copyright laws, and the Company, Employer or such Subsidiary or Affiliate shall
own all rights therein. To the extent that any such copyrightable work is not
a
“work made for hire,” Executive hereby assigns and agrees to assign to the
Company, Employer or such Subsidiary or Affiliate all right, title, and
interest, including without limitation, copyright in and to such copyrightable
work. Executive shall promptly disclose such Work Product and copyrightable
work
to the Board and perform all actions reasonably requested by the Board (whether
during or after the Employment Period) to establish and confirm the Company’s,
Employer’s or such Subsidiary’s or Affiliate’s ownership (including, without
limitation, assignments, consents, powers of attorney, and other
instruments).
(c) Third
Party Information. Executive understands that the Company, Employer
and their respective Subsidiaries and Affiliates will receive from third parties
confidential or proprietary information (“Third Party Information”)
subject to a duty on the Company’s, Employer’s and their respective
Subsidiaries’ and Affiliates’ part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the
Employment Period and thereafter, and without in any way limiting the provisions
of Section 2(a) above, Executive will hold Third Party Information
in the strictest confidence and will not disclose to anyone (other than
personnel and consultants of the Company, Employer or their respective
Subsidiaries and Affiliates who need to know such information in connection
with
their work for the Company, Employer or any of their respective Subsidiaries
and
Affiliates) or use, except in connection with his work for the Company, Employer
or any of their respective Subsidiaries and Affiliates,
Third
Party Information unless expressly authorized by a member of the Board (other
than himself if Executive is on the Board) in writing.
(d) Use
of Information of Prior Employers. During the Employment Period and
thereafter, Executive will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employers or any other
Person to whom Executive has an obligation of confidentiality, and will not
bring onto the premises of the Company, Employer or any of their respective
Subsidiaries or Affiliates any unpublished documents or any property belonging
to any former employer or any other Person to whom Executive has an obligation
of confidentiality unless consented to in writing by the former employer or
Person. Executive will use in the performance of his duties only information
which is (i) generally known and used by persons with training and experience
comparable to Executive’s and which is (x) common knowledge in the industry or
(y) otherwise legally in the public domain, (ii) otherwise provided or developed
by the Company, Employer or any of their respective Subsidiaries or Affiliates
or (iii) in the case of materials, property or information belonging to any
former employer or other Person to whom Executive has an obligation of
confidentiality, approved for such use in writing by such former employer or
Person.
3. Non-competition
and No Solicitation. Executive acknowledges that in the course of his
employment with Employer he will become familiar with the Company’s, Employer’s
and their respective Subsidiaries’ trade secrets and with other confidential
information concerning the Company, Employer and such Subsidiaries and that
his
services will be of special, unique and extraordinary value to the Company,
Employer and such Subsidiaries. Therefore, Executive agrees that:
(a) Non-competition.
During the Employment Period and also during the period commencing on the date
of termination of the Employment Period and ending on the first anniversary
of
the date of termination, he shall not without the express written consent of
the
Company, anywhere in the United States, directly or indirectly, own, manage,
control, participate in, consult with, render services for, or in any manner
engage in any business (i) competing with a brand of the Company, Employer,
Medtech Products, Inc., The Denorex Company, The Spic and Span Company, The
Comet Products Corporation, Prestige Brands International, Inc., Vetco, Inc.,
or
any business acquired by such Persons, or any Subsidiaries of such Persons,
representing 10% or more of the consolidated revenues or EBITDA of the Company
and its Subsidiaries for the trailing 12 months ending on the last day of the
last completed calendar month immediately preceding the date of termination
of
the Employment Period (collectively “The Prestige Companies”) or (ii) in which
The Prestige Companies have conducted discussions or has requested and received
information relating to the acquisition of such business by such Person (x)
within one year prior to the Separation and (y) during the Severance Period,
if
any. Nothing herein shall prohibit Executive from being a passive owner of
not
more than 2% of the outstanding stock of any class of a corporation that is
publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) No
solicitation. During the Employment Period and also during the period
commencing on the date of termination of the Employment Period and ending on
the
first anniversary of the date of termination, Executive shall not directly
or
indirectly through another entity (i) induce or attempt to induce any employee
of The Prestige Companies to leave the employ of the Company, Employer or any
subsidiary, or in any
way
interfere with the relationship between The Prestige Companies and any employee
thereof, (ii) hire any person who was an employee of The Prestige Companies
within 180 days after such person ceased to be an employee of the Company,
Employer or any of their respective Subsidiaries (provided,
however, that such restriction shall not apply for a particular
employee if the Company has provided its written consent to such hire, which
consent, in the case of any person who was not a key employee of The Prestige
Companies shall not be unreasonably withheld), (iii) induce or attempt to induce
any customer, supplier, licensee or other business relation of The Prestige
Companies to cease doing business with The Prestige Companies or in any way
interfere with the relationship between any such customer, supplier, licensee
or
business relation and The Prestige Companies or (iv) directly or indirectly
acquire or attempt to acquire an interest in any business relating to the
business of The Prestige Companies and with which The Prestige Companies has
conducted discussions or has requested and received information relating to
the
acquisition of such business by The Prestige Companies in the two year period
immediately preceding a Separation.
(c) Enforcement.
If, at the time of enforcement of Section 2 or this Section 3, a
court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law. Because Executive’s services are
unique and because Executive has access to Confidential Information, the parties
hereto agree that money damages would be an inadequate remedy for any breach
of
this Agreement. Therefore, in the event of a breach or threatened breach of
this
Agreement, the Company, Employer, their respective Subsidiaries or their
successors or assigns may, in addition to other rights and remedies existing
in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other
security).
(d) Additional
Acknowledgments. Executive acknowledges that the provisions of this
Section 1 are in consideration of: (i) employment with the Employer, (ii)
the prospective issuance of Securities by the Company pursuant to the Long
Term
Incentive Compensation Program and (iii) additional good and valuable
consideration as set forth in this Agreement. In addition, Executive agrees
and
acknowledges that the restrictions contained in Section 2 and this
Section 3 do not preclude Executive from earning a livelihood, nor do
they unreasonably impose limitations on Executive’s ability to earn a living. In
addition, Executive acknowledges (i) that the business of the Company, Employer
and their respective Subsidiaries will be conducted throughout the United
States, (ii) notwithstanding the state of incorporation or principal office
of
the Company, Employer or any of their respective Subsidiaries, or any of their
respective executives or employees (including the Executive), it is expected
that the Company and Employer will have business activities and have valuable
business relationships within its industry throughout the United States and
(iii) as part of his responsibilities, Executive will be traveling throughout
the United States in furtherance of Employer’s business and its relationships.
Executive agrees and acknowledges that the potential harm to the Company and
Employer of the non-enforcement of Section 2 and this Section 3
outweighs any potential harm to Executive of its enforcement by injunction
or
otherwise. Executive acknowledges that he has carefully read this Agreement
and
has given careful consideration to the restraints imposed upon Executive by
this
Agreement, and is in full
accord
as
to their necessity for the reasonable and proper protection of confidential
and
proprietary information of the Company, Employer and their Subsidiaries now
existing or to be developed in the future. Executive expressly acknowledges
and
agrees that each and every restraint imposed by this Agreement is reasonable
with respect to subject matter, time period and geographical area.
IN
WITNESS WHEREOF, the parties hereto have executed this Executive Employment
Agreement on this 17th day of January, 2006.
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By: /s/ Xxxxx X.
Xxxx
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Name: Xxxxx X. Xxxx
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Title: Chief Executive
Officer
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/s/ Xxxxxxx X.
Xxxxx
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Xxxxxxx X.
Xxxxx
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DEFINITIONS
"Cause"
is defined as (i) your willful and continued failure to substantially perform
your duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness) that has not been cured within
10
days after a written demand for substantial performance is delivered to you
by
the Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties, (ii) the willful
engaging by you in conduct which is demonstrably and materially injurious to
the
Company or its affiliates, monetarily or otherwise, (iii) your conviction (or
plea of nolo contendere) for any felony or any other crime involving dishonesty,
fraud or moral turpitude, (iv) your breach of fiduciary duty to the Company
or
its affiliates, (v) any violation of the Company's policies relating to
compliance with applicable laws which have a material adverse effect on the
Company or its affiliates or (vi) your breach of any restrictive covenant.
For
purposes of clauses (i) and (ii) of this definition, (x) no act, or failure
to
act, on your part shall be deemed "willful" unless done, or omitted to be done,
by you not in good faith and without reasonable belief that your act, or failure
to act, was in the best interest of the Company.
"Good
Reason" is defined as, without your consent, (i) the assignment to you of any
duties inconsistent with your status as the Company's Secretary & General
Counsel or a substantial adverse alteration in the nature or status of the
your
responsibilities, unless the Company has cured such events within 10 business
days after the receipt of written notice thereof from you, (ii) a reduction
in
your annual base salary or target annual bonus percentage, except for
across-the-board salary reductions similarly affecting all senior Company
executives, or (iii) the relocation of the Company's headquarters by more than
30 miles.
