EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of September
1, 1998 by and between REXALL SUNDOWN, INC., a Florida corporation (the
"Company"), and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ (the "Employee").
R E C I T A L S
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The Company desires to employ the Employee, and the Employee desires to
be employed by the Company, in accordance with the provisions contained in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of each of the Company and the Employee contained in
this Agreement, each of the Company and the Employee agrees as follows:
I. EMPLOYMENT
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1.1 The Company employs the Employee and the Employee accepts such
employment. Subject to the direction of the Board of Directors of the Company,
the Employee shall serve as the Chief Executive Officer of the Company. The
Employee shall have such responsibilities, perform such duties and exercise such
power and authority as are inherent in, or incident to, the offices of Chief
Executive Officer. The Employee shall devote his full business time and
attention and his best efforts to the performance of his duties as an employee
of the Company.
1.2 During the Term, the Employee, if elected, shall serve as a
Director of the Company and/or a Director or officer of any subsidiary of the
Company without any additional compensation for such services other than the
compensation provided for hereunder.
II. TERM
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2.1 Subject to the provisions of Article 5 hereof, the term of this
Agreement shall be for a period of three (3) years commencing on September 1,
1998 and terminating on August 31, 2001 (the "Term").
III. COMPENSATION
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3.1 Salary. In payment for the obligations to be performed by the
Employee during the Term, the Company shall pay to the Employee (subject to any
applicable payroll and/or taxes required to be withheld) annual compensation
("Annual Compensation") equal to (i) a salary of Four Hundred Twenty Thousand
Dollars ($420,000) in cash for the year commencing September 1, 1998 and (ii)
for each succeeding year during the Term, a salary equal to that of the previous
year increased by the greater of (a) 5%, (b) the increase in the cost of living
based upon the Revised Consumer Price Index (1982-84=100) published by the
Bureau of Labor for Boca Raton, Florida utilizing September 1998 as the base
month, or (c) such increase as the Company's Board of Directors may determine in
excess of (a) and (b) above.
3.2 Payment of Salary. Payments of salary shall be made to the Employee
in installments from time to time on the same dates that payments of salary are
generally made to all senior management employees of the Company.
3.3 Incentive Compensation. The Company shall pay the Employee an
incentive compensation bonus in an amount up to one hundred percent (100%) of
Employee's Annual Compensation for each of the Company's fiscal years during the
Term hereof based upon such criteria as are mutually determined by the Company
and the Employee.
IV. CERTAIN FRINGE BENEFITS
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4.1 Generally. The Employee shall be entitled to reimbursement for
reasonable business expenses incurred in connection with his employment
including customer entertainment. The Company shall provide the Employee with an
automobile allowance or an automobile of the type currently provided to senior
executives of the Company at the Company's expense and the Company shall provide
at its expense insurance, gas and maintenance for such automobile. The Company
will also provide you with a car or cellular telephone and a company credit card
for business travel and entertainment. The Employee shall further be entitled to
receive such benefits and to participate in such benefit plans as are generally
provided from time to time by the Company to its senior management employees;
provided, however, that nothing contained in this Section 4.1 shall be construed
to obligate the Company to provide any specific benefits to its employees
generally.
4.2 Vacations. The Employee shall be entitled to such vacation time on
an annual basis as is provided in accordance with the policies as are from time
to time in force for the Company's employees.
V. TERMINATION OF EMPLOYMENT
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5.1 Certain Definitions. The following terms shall have the following
respective meanings when utilized in this Agreement:
(a) "Acquisition of Control" shall mean:
(i) any person (including a Group), without the
approval of a majority of the Incumbent Directors, becoming
the Beneficial Owner of, or acquiring the power to direct the
exercise of voting power with respect to, directly or
indirectly, securities which represent thirty percent (30%) or
more of the combined voting power of the Company's outstanding
securities thereafter, whether or not some portion of such
securities was owned by such person (or by any member of such
Group) prior thereto; provided, however, that this provision
shall not apply to acquisitions by a director, executive
officer or their affiliates if such person had such status on
April 24, 1995; or
(ii) the Incumbent Directors cease at any time to
constitute a majority of the Board of Directors, whether of
(A) the Company or (B) after any cash tender offer or exchange
offer, merger, consolidation or other business combination,
recapitalization of the Company, sale, liquidation or
dissolution (or adoption of a plan for liquidation or
dissolution), or any combination of any or all of the
foregoing transactions, including but not limited to a series
of such transactions, any successor to the Company; provided,
however, an Acquisition of Control shall not be deemed to have
occurred with respect to the Employee if the action of the
Employee was voluntary and would have been sufficient, without
the action of others, to constitute an Acquisition of Control.
(b) "Beneficial Owner" shall have the meaning provided in
Section 607.0901(1)(e) of the Florida Statutes.
(c) "Cause" shall mean any action by the Employee or any
inaction by the Employee which is reasonably believed by the Company to
constitute:
(i) fraud, embezzlement, misappropriation,
dishonesty or breach of trust;
(ii) a felony or moral turpitude;
(iii) material breach or violation of any or all of
the covenants, agreements and obligations of the Employee set
forth in this Agreement, other than as the result of the
Employee's death or Disability;
(iv) a willful or knowing failure or refusal by the
Employee to perform any or all of his material duties and
responsibilities as an officer of the Company, other than as
the result of the Employee's death or Disability; or
(v) gross negligence by the Employee in the
performance of any or all of his material duties and
responsibilities as an officer of the Company, other than as
the result of the Employee's death or Disability; provided,
however, that if the basis for any termination of the
Employee's employment by the Company as set forth in the
Termination Notice delivered by the Company to the Employee is
any or all of the definitions of Cause set forth in Section
5.1(c)(iii) or Section 5.1.(c)(iv) of this Agreement, then, in
such event, the Employee shall have thirty (30) days from and
after the date of his receipt of such Termination Notice to
cure the action or inaction specified therein to the
reasonable satisfaction of the Company.
(d) "Compensation" shall mean the cash payment to which
Employee is entitled under the provisions of Sections 3.1 and 3.3
hereof.
(e) "Disability" shall mean any mental or physical illness,
condition, disability or incapacity which prevents the Employee from
reasonably discharging his duties and responsibilities as an officer of
the Company. If any disagreement or dispute shall arise between the
Company and the Employee as to whether the Employee suffers from any
Disability, then, in any such event, the Employee shall submit to the
physical or mental examination of a physician licensed under the laws
of the State of Florida, who shall be mutually selected by the Company
and the Employee, and such physician shall make the determination of
whether the Employee suffers from any Disability. In the absence of
fraud or bad faith, the determination of such physician shall be final
and binding upon each of the Company and the Employee. The entire cost
of any such examination shall be borne solely by the Employee.
(f) "Group" shall mean any combination of persons knowingly
participating in a joint activity or interdependent consciously
parallel action toward a common goal, whether or not pursuant to an
express contract; provided, however, that actions taken by a director
of the Company acting as such shall not alone constitute membership in
a Group.
(g) "Incumbent Director" shall mean any director of the
Company serving at April 24, 1995 or one elected thereafter if
nominated or approved by at least two-thirds of the then Incumbent
Directors.
(h) "Protracted Disability" shall mean any Disability which
prevents the Employee from reasonably discharging his duties and
responsibilities as an officer of the Company for a period of six (6)
consecutive months.
(i) "Termination Date" shall mean a specific date not less
than ten (10) nor more than thirty (30) days from and after the date of
any Termination Notice upon which the Employee's employment by the
Company shall be terminated in accordance with the provisions of this
Agreement.
(j) "Termination Notice" shall mean a written notice which (i)
sets forth the specific provision of this Agreement relied upon to
terminate the Employee's employment by the Company, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide the
basis for the termination of the Employee's employment by the Company
pursuant to the specific provision of this Agreement relied upon
therein and (iii) sets forth a Termination Date.
5.2 Termination of Employment.
(a) Notwithstanding the provisions of Article 2 hereof, this
Agreement (i) shall be automatically terminated upon the death of the
Employee pursuant to the provisions of Section 5.3 hereof and (ii) may
be terminated at any time by the Company pursuant to the provisions of
Section 5.4 or 5.5 hereof.
(b) If either the Company or the Employee shall desire to
terminate the Employee's employment by the Company pursuant to any of
the provisions of Sections 5.4 or 5.5 hereof, then the party causing
any such termination shall give to the other party a Termination
Notice.
(c) If this Agreement shall be terminated pursuant to any of
the provisions of this Article 5, the Company shall be discharged from
all of its obligations to the Employee hereunder upon its payment to
the
Employee of the required amount set forth in the section of
this Article 5 pursuant to which such termination shall occur.
5.3 Death of Employee. If at any time during the Term the Employee
shall die, then the employment of the Employee by the Company shall
automatically terminate on the date of the Employee's death. In such event, not
more than thirty (30) days from and after the date of the Employee's death, the
Company shall pay to the Employee's estate or heirs, as the case may be, an
amount in cash equal to the Employee's Compensation (subject to any applicable
payroll and/or other taxes required by law to be withheld) determined as of the
date of the Employee's death.
5.4 Disability of Employee.
(a) If at any time during the Term the Employee shall suffer
any Disability, then the Company shall be obligated to continue to pay
in the ordinary and normal course of its business to the Employee or
his legal representatives, as the case may be, the Employee's
Compensation (subject to any applicable payroll and/or other taxes
required by law to be withheld) from the date that the Employee shall
first suffer any such Disability to the date that the Employee's
employment by the Company shall be terminated pursuant to any of the
provisions of this Agreement.
(b) If the Employee shall suffer any Protracted Disability
during the Term, then the Company may terminate this Agreement. In such
event, in addition to any other benefits which may have been provided
by the Company to the Employee or his legal representatives, as the
case may be, pursuant to the provisions of Section 5.4(a) hereof, not
later than thirty (30) days after the Termination Date specified in the
Termination Notice, the Company shall pay to the Employee or his legal
representatives, as the case may be, an amount in cash equal to the
Employee's Compensation (subject to any applicable payroll and/or other
taxes required by law to be withheld) determined as of the Termination
Date. Subsequent to such Termination Date, the Employee or his legal
representatives, as the case may be, shall also be entitled to receive
any benefits which may be payable under any disability insurance policy
or disability plan provided by the Company.
5.5 Termination of Employment by Company.
(a) The Company may terminate this Agreement at any time with
Cause. In such event, the Company shall be obligated to continue to pay
in the ordinary and normal course of its business to the Employee his
Annual Compensation (subject to any applicable payroll and/or other
taxes required by law to be withheld) until the Termination Date.
(b) The Company may terminate this Agreement at any time
without Cause. If the Company shall terminate the employment of the
Employee by the Company without Cause, and not pursuant to any other
provision of this Agreement, the Company shall continue to pay to the
Employee the Employee's Annual Compensation (subject to any applicable
payroll and/or other taxes required by law to be withheld) for a period
of one (1) year from the date of termination. If the Employee is
terminated without cause, the provisions of Section 6.1(b) hereof shall
be of no further force and effect.
5.6 Change in Control. Notwithstanding any other provisions of Sections
5.1 through 5.5 hereof, if (i) there is an Acquisition of Control and, (ii) at
any time within three (3) months prior to such Acquisition of Control or at any
time within one (1) year thereafter, either (A) the Employee for any reason
terminates his employment with the Company, or (B) the Employee's employment is
terminated without Cause, then the Employee shall have the option, but not the
obligation, of being paid in cash an amount equal to three (3) times his
Compensation for the then current fiscal year of the Company (amounts due under
this Section 5.6 are referred to as the "Payment"). If the Employee opts to
receive the Payment under this Section 5.6, whether his employment is terminated
by the Company or by himself, the provisions of Section 6.1(b) hereof shall be
of no further force or effect. Subject to the provisions of Section 5.7 hereof,
the Payment shall be made not later than three (3) months after the Employee
gives notice to the Company in the form of a Termination Notice of his election
under this Section 5.6.
5.7 Payments. Notwithstanding anything in the foregoing to the
contrary, if any of the payments provided for in this Agreement, together with
any other payments which the Employee has the right to receive from the Company,
would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the
Internal Revenue
Code), the payments pursuant to this Agreement shall be reduced to the largest
amount as will result in no portion of such payments being subject to the excise
tax imposed in Section 4999 of the Internal Revenue Code; provided, however,
that the Employee shall have the absolute discretion to direct the Company to
pay any amount which shall be payable to him pursuant to Section 5.6 hereof in
such equal annual installments as the Employee may direct, with the first such
installment payable when such amount would otherwise have been payable; and
further provided that the Employee shall have the absolute discretion to
allocate any reductions required by this Section 5.7 from amounts due him under
Section 5.6 hereof. The Company shall be obligated to comply with any directions
given to it by the Employee pursuant to the preceding sentence.
VI. CERTAIN RESTRICTIONS ON THE EMPLOYEE
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6.1 Certain Restrictions. The Employee covenants and agrees with the
Company as follows:
(a) He shall not at any time, directly and indirectly, for
himself or any other person, firm, corporation, partnership,
association or other entity which competes in any manner with the
Company or any of its subsidiaries or affiliates in the United States
of America or its territories or possessions (collectively, the
"Territory"), attempt to employ, employ or enter into any contractual
arrangement for employment with, any employee or former employee of the
Company or any of its subsidiaries or affiliates, unless such former
employee shall not have been employed by the Company or any of its
subsidiaries or affiliates for a period of at least one year.
(b) He shall not, during the term of this Agreement, and for a
period of eighteen (18) months from and after the date of termination
of this Agreement, directly or indirectly, (i) acquire or own in any
manner any interest in, or loan any amount to, any person, firm,
partnership, corporation, association or other entity which competes in
any manner with the Company or any of its subsidiaries or affiliates in
the Territory, (ii) be employed by or serve as an employee, agent,
officer, director of, or as a consultant to, any person, firm,
partnership, corporation, association or other entity, other than the
Company and its subsidiaries and affiliates, which competes in any
manner with any of the Company or its subsidiaries or affiliates in the
Territory, or (iii) compete in any manner with the Company or its
subsidiaries or affiliates in the Territory. The foregoing provisions
of this Section 6.1(b) shall not prevent the Employee from acquiring or
owning not more than five percent (5%) of the equity securities of any
entity whose securities are listed for trading on a national securities
exchange or are regularly traded in the over-the-counter securities
market.
(c) He shall not at any time disclose, directly or indirectly,
to any person, firm, corporation, partnership, association or other
entity, any confidential information relating to the Company or any of
its subsidiaries or affiliates, including, without limitation, any
information concerning the financial condition, assets, personnel,
procedures, techniques, products, customers, sources of leads and
methods of obtaining new business or the methods generally of doing and
operating the respective businesses of the Company and its subsidiaries
and affiliates, trade secrets, product ideas, processes, techniques,
formulas, know-how, marketing plans and strategies, except to the
extent that such information is a matter of public knowledge or is
required to be disclosed by law or judicial or administrative process.
(d) He shall return all Company documents to the Company at
upon the termination of his employment by the Company.
6.2 Injunction. It is recognized and acknowledged by each of the
Company and the Employee that a breach or violation by the Employee of any or
all of his covenants and agreements contained in Section 6.1 hereof will cause
irreparable harm and damage to the Company and its subsidiaries and affiliates
in a monetary amount which would be virtually impossible to ascertain. As a
result, the Employee recognizes and acknowledges that the Company and its
subsidiaries and affiliates shall be entitled to a temporary restraining order
and/or injunction from any court of competent jurisdiction enjoining and
restraining any breach or violation by the Employee and/or his affiliates,
employees, associates, partners or agents, either directly or indirectly, of any
or all of the Employee's covenants and agreements contained in Section 6.1
hereof. Such right to a temporary restraining order and/or injunction shall be
cumulative and in addition to whatever other rights or remedies the Company and
its subsidiaries and affiliates may possess hereunder, at law or in equity.
Nothing contained in this Agreement shall be construed to prevent the Company
and its subsidiaries and affiliates from seeking and recovering from the
Employee damages suffered by any or all of them as a result of any breach or
violation by the Employee and/or his affiliates, employees, associates, partners
or agents of any or all of the Employee's covenants and agreements contained in
this Agreement.
6.3 Reduction in Scope. In the event that any of the covenants and
agreements of the Employee contained in Section 6.1 hereof shall be held invalid
or unenforceable by a court of competent jurisdiction because of its duration or
geographic area, then, in any such event, such covenant or agreement shall be
reduced by such court in duration or geographical area or both to such extent as
to make it valid and enforceable in the jurisdiction where such court is
located, and in all other respects it shall remain in full force and effect.
VII. ATTORNEYS' FEES
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7.1 Prevailing Party. If any litigation shall arise between the Company
and the Employee based, in whole or in part, upon this Agreement or any or all
of the provisions contained herein, the prevailing party in any such litigation
shall be entitled to recover from the non-prevailing party, and shall be awarded
by a court of competent jurisdiction, any and all reasonable fees and
disbursements of trial and appellate counsel paid, incurred or suffered by such
prevailing party as the result of, arising from, or in connection with, any such
litigation.
VIII. MISCELLANEOUS
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8.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without application of any
conflicts of laws principles. The Employee waives any plea of jurisdiction as
not being a resident of, or being located or conducting business in, Palm Beach
County, Florida and agrees that any litigation or action directly or indirectly
connected with this Agreement, shall, at the Company's election, be subject to
binding arbitration administered by the American Arbitration Association in West
Palm Beach, Florida.
8.2 Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Employee with respect to the subject matter hereof
and supersedes all prior negotiations, agreements, understandings and
arrangements, both oral and written, between the Company and the Employee with
respect to such subject matter. This Agreement may not be modified in any way,
except by a written instrument executed by each of the Company and the Employee.
8.3 Notices. Any and all notices required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand, sent by a recognized overnight carrier such as
Federal Express or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, as follows:
If to the Company: Rexall Sundown, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Employee: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as either party may from time to time give written
notice of to the other.
8.4 Benefits; Binding Effect. This Agreement shall be for the benefit
of, and shall be binding upon, each of the Company and the Employee and their
respective heirs, personal representatives, legal representatives, successors
and assigns.
8.5 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. Except as is otherwise provided in Section 6.3 hereof, if any one or more
of the words, phrases, sentences, clauses or sections contained in this
Agreement shall be declared invalid by a court of competent jurisdiction, then,
in any such event, this Agreement shall be construed as if such invalid word or
words, phrase or phrases, sentence or sentences, clause or clauses, or section
or sections had not been inserted.
8.6 Waivers. The waiver by either party of a breach or violation of any
term or provision of this Agreement by the other party shall not operate nor be
construed as a waiver of any subsequent breach or violation of any provision of
this Agreement nor of any other right or remedy.
8.7 Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions of this Agreement.
8.8 Counterparts. This Agreement may be executed in any number of
counterparts and by the separate parties hereto in separate counterparts, each
of which shall be deemed to constitute an original and all of which shall be
deemed to be the one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement as of the date first above written.
REXALL SUNDOWN, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman of the Board
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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