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EXHIBIT 10.6
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EKCO GROUP, INC.
00 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
December 4, 1996
(as amended February 10, 1999)
Xx. Xxxxxxx X. Xxxxxxx
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Re: EMPLOYMENT AGREEMENT
Dear Mal:
This letter is to confirm our understanding with respect to (i) your
future employment by Ekco Group, Inc. (the "Company"), (ii) your agreement to
protect and preserve information and property which is confidential and
proprietary to the Company, and (iii) your agreement not to compete with the
Company (the terms and conditions agreed to in this letter shall hereinafter be
referred to as the "Agreement"). In consideration of the mutual promises and
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, we have agreed as follows:
1. EMPLOYMENT. The Company will employ you, and you agree to be
employed by the Company, as the Company's Chief Executive Officer and Chairman
of the Board and you agree to perform such services and discharge such duties
and responsibilities, consistent with that office, as may be prescribed by the
Board of Directors of the Company from time to time. You shall devote your full
time and best efforts in the performance of the foregoing services, provided,
however, that you shall not be prevented or limited from continuing to serve as
a member of the Board of Directors or Board of Trustees of those corporations or
entities which you currently serve and such other positions as to which the
Board of Directors may consent, from time to time, which consent will not be
unreasonably withheld.
2. TERM OF EMPLOYMENT.
(a) TERM; TERMINATION. Your employment hereunder shall commence on
December 4, 1996 and shall continue thereafter on an "at-will" basis until
terminated either by you or by the Company for any reason upon written notice to
the other. The right of the Company to terminate your employment hereunder, to
which you hereby agree, shall be exercisable by written notice sent to you by
the Company and shall be effective as of the date of such notice.
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3. COMPENSATION.
(a) SALARY AND BONUS. The Company shall pay you as compensation
for your services and agreements hereunder during the term hereof (i) salary at
the rate of $250,000 per year, payable in accordance with the Company's salary
payment policy for executive employees generally, less any amounts required to
be withheld under applicable law, and (ii) a bonus in such amount, if any, as
may be determined annually by the Board of Directors or the Compensation
Committee in its sole discretion.
(b) TERMINATION. Upon termination of your employment hereunder, no
further compensation or benefits of any kind shall be payable to you hereunder,
except as provided in Sections 4(c), 5(c) and 5(d) below; provided, however,
that you shall continue to be bound by the terms and conditions of this
Agreement (other than Section 1 hereof).
4. STOCK AND STOCK RIGHTS.
(a) Upon the date of your acceptance of this Agreement, the
Company granted to you a stock option to purchase an aggregate of 900,000 shares
of the common stock, $.01 par value ("Common Stock"), of the Company, with an
exercise price per share equal to the fair market value of the Common Stock on
the date of grant and subject to the terms and conditions set forth in the
Non-Qualified Stock Option Agreement (the "Option Agreement") attached hereto as
EXHIBIT A.
(b) The Board of Directors, in its sole discretion, may from time
to time grant you additional shares of stock of the Company or options to
purchase such shares pursuant to the Company's stock option plans, restricted
stock purchase plans or other stock plans.
(c) Immediately upon the occurrence of any of the Listed
Contingencies (as defined below), you (or your estate, as appropriate) shall
have the unconditional, unencumbered and free right, title and interest in all
shares of stock of the Company which were granted, sold or optioned (subject, if
you or your estate elect to exercise unexercised rights, to your obligation to
pay the option exercise price or other purchase price to the extent theretofore
not paid) to you by the Company at any time prior to the date of such Listed
Contingency as if all restrictions imposed by the Company had lapsed and all
events necessary to vest in you (or your estate) such rights, including the
lapsing of time, had occurred, and the Company shall take all such actions as
may be necessary to release any then existing restrictions imposed by the
Company and waive any rights to repurchase such shares. For the purposes of this
Agreement, "Listed Contingencies" shall be limited to the following events:
(1) The occurrence of a Change of Control (as defined below) while
you are employed hereunder, and without regard to whether or
not your employment by the Company is terminated, whether a
Constructive Termination (as defined below) occurs at such
time or thereafter or the manner of any subsequent
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termination of your employment; or
(2) An event of Constructive Termination or termination by the
Company of your employment without Good Cause (as defined
below) following a Change of Control; or
(3) Termination of your employment as a result of your death; or
(4) Termination of your employment as a result of your permanent
and total disability (subject to the provisions of Section
4(g) below).
(d) As used herein, "Change of Control" shall be deemed to have
occurred (i) if any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended), other than the
Company or any employee stock plan of the Company is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing fifteen
percent (15%) or more of the outstanding Common Stock of the Company; or (ii)
ten (10) days following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result in
the beneficial ownership by any "person" of fifteen percent (15%) or more of the
outstanding Common Stock of the Company, provided, however, that at the
conclusion of such ten (10) day period such person has not discontinued or
rescinded his intention to make such a tender or exchange offer; or (iii) if
during any consecutive twelve (12) month period beginning on or after the date
on which this Agreement is executed individuals who at the beginning of such
period were directors of the Company cease, for any reason, to constitute at
least a majority of the Board of Directors of the Company; or (iv) if a merger
of, or consolidation involving, the Company in which the Company's stock is
converted into securities of another corporation or into cash shall be
consummated, or a plan of complete liquidation of the Company (whether or not in
connection with a sale of all or substantially all of the Company's assets)
shall be adopted and consummated, or substantially all of the Company's
operating assets are sold (whether or not a plan of liquidation shall be adopted
or a liquidation occurs), excluding in each case a transaction solely for the
purpose of reincorporating the Company in a different jurisdiction or
recapitalizing the Company's stock.
(e) As used herein, "Constructive Termination" shall be deemed to
have occurred if and when (i) your base salary is decreased below the level in
effect on the date of the last amendment of this Agreement, or the aggregate
salary and incentive compensation or benefits available to be earned by you is
directly or indirectly reduced or eliminated, or the bonus percentage, if any,
applicable to your participation in any compensation or bonus plan or
arrangement is reduced, without your consent, provided, however, that nothing
herein shall be construed to guarantee your bonus awards if performance is below
applicable targets, or (ii) the importance of your job responsibilities is
reduced without your consent, or (iii) a proposal is made to relocate you to a
location other than Nashua, New Hampshire or the greater Boston, Massachusetts
metropolitan area without your consent.
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(f) As used herein, "Good Cause" shall mean and be limited to a
material breach of any of your obligations under Section 1, 6 or 7 hereof, or
any action by you during the term of this Agreement involving willful
malfeasance or gross (but not simple) negligence on your part in a material
respect. Notwithstanding the foregoing, following a Change of Control, "Good
Cause" shall not be deemed to have occurred unless (1) the conduct which is the
basis for such material breach is either willful or intentionally unlawful and
(2) you shall not have ceased such conduct or cured the effect thereof, if
curable, so that such breach shall no longer be material within thirty (30) days
after you shall have received written notice from the Company of the Company's
intention to terminate your employment for Good Cause, which notice shall
specify in detail the basis therefor.
(g) The determination that, by virtue of total and permanent
disability, you are unable to perform your duties hereunder shall by made by a
physician chosen by the Company and reasonably satisfactory to you (or your
legal representative). The cost of such examination shall be borne by the
Company. Without limiting the generality of the foregoing, unless otherwise
agreed, you shall be conclusively presumed to be permanently and totally
disabled hereunder if for reasons involving mental or physical illness or
physical injury you fail to perform such duties for a period of one hundred
eighty (180) days or more in any twelve (12) month period. For the purposes of
this Section 4(g), the date of termination shall be the earlier of the date of
such physician's examination pursuant to which such determination is made or the
first business day after which such 180-day period has expired.
5. BENEFITS AND REIMBURSEMENT OF EXPENSES.
(a) VACATION. You shall be entitled to four weeks of vacation
leave for each 12 months of service performed by you at a time or times (either
consecutively or not consecutively) mutually agreeable to the Company and you.
The Company will not pay you any additional compensation for any vacation time
which is not used.
(b) EMPLOYEE BENEFIT PLANS. You shall also be entitled to
participate in such employee benefit plans and fringe benefits which the Company
provides or may establish for the benefit of its executive employees generally
(including, without limitation, group life, medical, dental and other insurance
plans), but only if and to the extent provided in such employee benefit plans.
(c) REIMBURSEMENT OF EXPENSES. You shall be entitled to
reimbursement for all ordinary and reasonable out-of-pocket business expenses
(including first class air travel and hotel accommodations) which are reasonably
incurred by you in furtherance of the Company's business in accordance with
reasonable policies adopted from time to time by the Company.
(d) EXCISE TAX. In the event you become subject to tax under
Section 4999 of the Internal Revenue Code (the "IRC"), or any similar tax
("Excise Tax"), as a result of any payment (within the meaning of Section 280G
of the IRC or other applicable provision) by the Company or
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any affiliate of the Company, the Company agrees that it will then "gross up"
your compensation by making an additional payment to you in an amount which,
after reduction for any income or excise taxes payable as a result of receiving
such additional payment, is equal to the Excise Tax.
6. CONFIDENTIALITY, INVENTIONS, AND NON-COMPETITION
ACKNOWLEDGEMENTS AND AGREEMENTS.
(a) Your agreements set forth in this Section 6 shall survive the
expiration or termination of this Agreement and the
termination of your employment with the Company for any
reason.
(b) You acknowledge that irreparable injury would be caused to the
Company by your breach of any of the provisions of this
Section 6, and agree that in the event of any such breach, the
Company and any of its affiliates, in addition to such other
rights and remedies as may exist in its favor, may apply to
any court of law or equity having jurisdiction to enforce the
specific performance of the provisions of this Section 6 and
may apply for injunctive relief against any act which would
violate any such provisions.
(c) You recognize that you now have knowledge of and/or may
hereafter gain knowledge of, confidential information, trade
secrets, confidential processes, confidential patentable or
unpatentable inventions or confidential "know how", including,
without limitation, techniques, formulae, designs,
developments, projects, technical information and
manufacturing process and distribution methods, relating to,
or concerned with the business of the Company and its
affiliates prior to the termination of this Agreement and
their respective suppliers, customers, stockholders,
licensors, licensees, and other persons or entities with which
the Company or its affiliates has, has had, or may in the
future have any commercial, scientific or technical
relationship. During the term of this Agreement and at all
times following the termination of your employment for any
reason, you will not, directly or indirectly, divulge, furnish
or make accessible to anyone (other than as required in the
regular course of your employment by the Company or with the
consent of the Board of Directors) such information. The
prohibitions contained in this Section 6(c) shall not apply to
information which is (a) within the domain of the general
public; (b) generally known within the industry or industries
in which the Company or its affiliates is involved; or (c)
independently developed by you without utilization of
confidential information gained while in the employ of the
Company; provided that you shall not have disclosed such
information in violation of this Agreement. All documents,
records, apparatus, equipment and other physical property
furnished to you by the Company or any affiliates of the
Company or produced by you or others in connection with your
services to the Company or any such affiliate shall be and
remain the sole property of the Company. You will return and
deliver such property
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to the Company as and when requested by the Company. Copies of
documents and records may be kept, but shall be kept
completely confidential to the same extent as other
confidential information of the Company. You shall return and
deliver all such property upon termination of your employment
for any reason, and you will not take with you any such
property or any reproduction of such property upon such
termination.
(d) Any work or research or the results thereof, made or developed
by you, alone or in conjunction with others during the term of
your employment, including but without limitation, any
designs, patents, inventions, processes, know-how or formulae
created, invented or conceived during the period of your
employment by the Company, whether during or out of the usual
hours of work, which arise out of or are related to the
business, research, or development work or field of operation
of the Company, or any of its affiliates, shall to the extent
of your interest therein be the sole and exclusive property of
the Company, shall be disclosed in writing to the Company and
to no other person, unless so directed in writing by the Board
of Directors, and you hereby assign to the Company all and any
right which you have or may acquire in the same. To this end,
both during the period of your employment and at all times
thereafter, you agree to execute all necessary papers,
instruments and documents properly required to effect such
assignment to the Company or its nominee, to make application
through the Company's patent attorney or general counsel at
the expense of the Company, for such United States and foreign
patents as may be specified from time to time by the Company
on inventions, processes, or formulae which are or become the
property of the Company hereunder, and to execute assignments
upon the Company's request, for your entire interest in all
such applications to the Company or to its nominee without
compensation (other than your usual compensation as an
employee of the Company) and you agree to give the Company and
its patent attorney or general counsel all reasonable
assistance in preparing such applications, descriptions, and
illustrations of each such invention, process, or formula and
in connection with proceedings relating thereto or to such
other applications or patents resulting therefrom; and further
agree to execute all lawful papers considered necessary by the
Company and do all that the Company reasonably requests in
order to protect the Company's rights in said inventions,
processes, and formulae or to obtain patents thereon,
including, without limitation, continuations, reissues,
renewals, and extensions. It is further agreed that your
obligations specified hereunder shall not expire with the
termination of this Agreement or your employment, but the
Company agrees to pay you a reasonable amount for any time
that you spend in such work at the Company's request after the
termination of this Agreement or your employment hereunder and
agrees to reimburse you for expenses reasonably or necessarily
incurred in connection with such work.
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(e) In consideration of your continued employment by the Company,
and the other benefits accruing to you hereunder, and subject
to the fulfillment by the Company of its obligations to you
hereunder, you agree that during the term of this Agreement
and for a period of thirty-six (36) months following the date
of termination of your employment pursuant to Section 2 hereof
(such period of employment and thirty-six (36) month period
being referred to in this Agreement as the "Non-Competition
Period"), you will not engage or participate, directly or
indirectly, within the United States of America or Canada
either as principal, agent, employee, employer, consultant,
stockholder, partner or in any other individual or
representative capacity whatever, in the conduct or management
of, or own any stock or other proprietary interest in, or debt
of, any business which shall be competitive with any business
which is or was conducted by the Company or any affiliate of
the Company, while you were an employee of the Company, unless
you shall have obtained the prior written consent of the Board
of Directors, and which consent shall make express reference
to this Agreement. Notwithstanding any other provision in this
Section 6, you shall be free without such consent to make
investments, directly or indirectly, in the securities of any
publicly-owned entity if your ownership thereof is limited to
not more than three percent (3%) of the issued and outstanding
securities of any class of securities of such entity. You
acknowledge that your skills and your experience are such that
you can anticipate finding employment at an executive level in
a wide variety of industries and represent and agree that the
restrictions imposed by this Section 6 on employment are
necessary for the protection of the legitimate interests and
competitive position of the Company and do not impose undue
hardships on you.
(f) During the Non-Competition Period, you shall not, directly or
indirectly, solicit any officer, director, executive, employee
or consultant of the Company or any affiliate of the Company
to leave such employment or terminate such position.
7. NO CONFLICTING AGREEMENTS. You hereby represent and warrant
that you have no commitments or obligations inconsistent with this Agreement and
you hereby agree to indemnify and hold the Company harmless against loss,
damage, liability or expense arising from any claim based upon circumstances
alleged to be inconsistent with such representation and warranty.
8. GENERAL.
(a) NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight
courier, or (iv) sent by registered or certified mail, return receipt requested,
postage prepaid.
If to Xxxxxxx X. Xxxxxxx: Xxxxxxx X. Xxxxxxx
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00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
If to the Company: Ekco Group, Inc.
00 Xxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attn: Vice President
and General Counsel
All notices, requests, consents and other communications hereunder
shall be deemed to have been given either (i) if by hand, at the time of the
delivery thereof to the receiving party at the address of such party set forth
above, (ii) if made by telex, telecopy or facsimile transmission, at the time
that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv) if
sent by registered or certified mail, on the fifth (5th) business day following
the day such mailing is made.
(b) ENTIRE AGREEMENT. This Agreement and the Option Agreement
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior oral or written
agreements and understandings relating to the subject matter hereof. No
statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in this Agreement shall affect, or be used to interpret,
change or restrict, the express terms and provisions of this Agreement.
(c) MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
Agreement may be modified or amended only by written agreement executed by the
parties hereto.
(d) WAIVERS AND CONSENTS. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only by
written document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
(e) ASSIGNMENT. The Company may assign its rights and obligations
hereunder to any person or entity who succeeds to all or substantially all of
the Company's business or that aspect of the Company's business in which you are
principally involved. Your rights and obligations under this Agreement may not
be assigned by you without the prior written consent of the Company.
(f) BENEFIT. All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed
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to create any rights or obligations except among the parties hereto, and no
person or entity shall be regarded as a third-party beneficiary of this
Agreement.
(g) GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the law of the State of New Hampshire without giving effect to the conflict of
law principles thereof.
(h) ARBITRATION. Except with respect to the provisions of Section
6 hereof, any controversy, dispute or claim arising out of or in connection with
this Agreement, or the breach, termination or validity hereof, shall be settled
by final and binding arbitration to be conducted by an arbitration tribunal in
Boston, MA, pursuant to the rules of the American Arbitration Association. The
arbitration tribunal shall consist of three arbitrators. The party initiating
arbitration shall nominate one arbitrator in the request for arbitration and the
other party shall nominate a second in the answer thereto within thirty (30)
days of receipt of the request. The two arbitrators so named will then jointly
appoint the third arbitrator. If the answering party fails to nominate its
arbitrator within the thirty (30) day period, or if the arbitrators named by the
parties fail to agree on the third arbitrator with sixty (60) days, the office
of the American Arbitration Association in Boston, MA shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration
tribunal (by a majority determination, or if there is no majority, then by the
determination of the third arbitrator, if any) shall be final, and judgment upon
such decision or award may be entered in any competent court or application may
be made to any competent court for judicial acceptance of such decision or award
and an order of enforcement. In the event of any procedural matter not covered
by the aforesaid rules, the procedural law of the State of New Hampshire shall
govern.
(i) JURISDICTION AND SERVICE OF PROCESS. Any legal action or
proceeding with respect to this Agreement may be brought in the courts of the
State of New Hampshire or of the United States of America for the District of
New Hampshire. By execution and delivery of this Agreement, each of the parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the party at its address set
forth in Section 8(a) hereof.
(j) SEVERABILITY. The parties intend this Agreement to be enforced
as written. However, (i) if any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a duly authorized court
having jurisdiction, then the remainder of this Agreement, or the application of
such portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law; and (ii) if any provision, or part thereof, is
held to be unenforceable because of the duration of such provision or the
geographic area covered thereby, the Company and you agree that the court making
such determination shall have the power to reduce the duration and/or geographic
area of such provision,
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and/or to delete specific words and phrases ("blue-pencilling"), and in its
reduced or blue-pencilled form such provision shall then be enforceable and
shall be enforced.
(k) HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect the meaning or construction of any of the
terms or provisions hereof.
(l) NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay
by a party hereto in exercising any right, power or remedy under this Agreement,
and no course of dealing between the parties hereto, shall operate as a waiver
of any such right, power or remedy of the party. No single or partial exercise
of any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
(m) EXPENSES. Should any party breach this Agreement, in addition
to all other remedies available at law or in equity, such party shall pay all of
any other party's costs and expenses resulting therefrom and/or incurred in
enforcing this Agreement, including legal fees and expenses.
(n) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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If the foregoing accurately sets forth our agreement, please so
indicate by signing and returning to us the enclosed copy of this letter.
Very truly yours,
EKCO GROUP, INC.
By: /S/ XXXXXX X. XXXXXXXXXX
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Name: XXXXXX X. XXXXXXXXXX
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Title: EVP/CFO
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Accepted and Approved
/S/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
Dated: 12/04/96 and 03/04/99
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