EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 1st day of June, 2002 (the "Agreement"),
by and between ARMKEL, LLC, a Delaware limited liability company (the
"Employer"), and XXXXXX HUNS, an individual, residing at 00 Xxxxxxxx Xxx,
Xxxxxxxx, XX 00000 (the "Employee"), to be effective as of June 1, 2002 (the
"Effective Date").
WITNESSETH
WHEREAS, the Employer is a joint venture between Church & Xxxxxx
Co., Inc. ("C&D") and Xxxxx & Company ("Xxxxx");
WHEREAS, pursuant to an Asset Purchase Agreement (the "Asset
Purchase Agreement") dated as of May 7, 2001, between Armkel, LLC and
Xxxxxx-Xxxxxxx, Inc. ("C-W"), the Employer acquired the assets comprising the
consumer products business of C-W (the "Transaction");
WHEREAS, prior to the acquisition, the Employee was an executive
with C-W and was a party to a Change in Control Agreement with C-W dated as of
September 28, 1998, and amended as of January 27, 2000 (collectively, the "CIC
Agreement");
WHEREAS, as part of the Asset Purchase Agreement, the Employer sent
the Employee a letter dated as of September 28, 2001, confirming its commitment
to honor certain C-W obligations concerning the C-W Corporate Officer Medical
Expense Reimbursement Plan, Personal Financial Counseling Policy, and Split
Dollar life insurance (the "Assurance Letter");
WHEREAS, following the close of the Transaction, the Employee became
the President of the Employer's International Consumer Products Division (the
"President");
WHEREAS, the parties wish to enter into an agreement (the
"Agreement") governing the terms and conditions of the Employee's employment
with the Employer;
WHEREAS, the parties hereto desire to provide for the transition
from the Employer to C&D in the event C&D purchases Xxxxx'x entire interest in
the Employer;
WHEREAS, the parties hereto desire this Agreement to supersede all
prior agreements governing the Employee's employment, including, without
limitation, the CIC Agreement, Assurance Letter, and the Asset Purchase
Agreement;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Employer and the Employee
hereby agree as follows:
1. Effectiveness; Employment, Duties and Agreements.
(a) As of the Effective Date, this Agreement shall supersede any
other previous written or oral employment, severance, change in control,
employee benefit or other agreements or arrangements between the Employee and
the Employer or C-W, and the Employee hereby waives his rights under any and all
such agreements (including, without limitation, the CIC Agreement, Assurance
Letter, and Asset Purchase Agreement), and releases and agrees to hold harmless
the Employer, C-W, and C&D, and their respective employees, officers, directors,
shareholders, agents, representatives, affiliates, successors, and assigns, from
any and all liability, cost, expense, cause of action, claims, or obligation
thereunder.
(b) During the term of this Agreement, the Employer hereby agrees
to employ the Employee as the President of its International Consumer Products
Division, subject to the provisions of Article 3.
The Employee hereby accepts such position and agrees to serve
the Employer as the President of its International Consumer Products Division.
The Employee shall report to the Chief Executive Officer of the Employer (the
"CEO"). The Employee shall have the rights, duties and responsibilities as set
forth in this Agreement, and other duties and responsibilities commensurate with
his position or as determined by the CEO. The Employee shall be subject to, and
shall act in accordance with, all reasonable instructions and directions of the
CEO and all applicable policies and rules of the Employer. The Employee's
primary offices shall be located at the Employer's offices in Princeton, New
Jersey or such other location as the Employer may determine. During the
Employee's employment hereunder, the Employer shall reimburse the Employee, upon
receipt of proper documentation, for reasonable and necessary business expenses
incurred in connection with the performance of his duties hereunder in
accordance with the Employer's usual policies and practices.
(c) Until the Employee's termination of employment with the
Employer, the Employee shall, subject to Section 1(d) below, devote his full
working time, energy and attention to the performance of his duties and
responsibilities hereunder and shall faithfully and diligently endeavor to
promote the business and best interests of the Employer.
(d) While an employee of the Employer, the Employee may not,
without the prior written consent of the CEO, operate, participate in the
management, operations or control of, or act as an employee, officer,
consultant, agent or representative of, any type of business or service (other
than as an employee of the Employer), provided that it shall not be a violation
of the foregoing for the Employee to (i) act or serve as a director, trustee or
committee member of any civic or charitable organization and (ii) manage his
personal, financial and legal affairs, so long as such activities do not
interfere with the performance of his duties and responsibilities to the
Employer as provided hereunder.
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2. Compensation/Vacation.
As compensation for the agreements made by the Employee herein
(including, without limitation, his waiver of his rights under the CIC
Agreement, Assurance Letter, and Asset Purchase Agreement, and his release of
the Employer, C&D, and C-W with respect thereto), and the performance by the
Employee of his obligations hereunder, the Employer shall pay the Employee the
following compensation and benefits:
(a) Not less than once a month pursuant to the Employer's normal
and customary payroll procedures, a base salary at the rate of $275,000 per
annum (the "Base Salary"), beginning June 1, 2002.
(b) The Employee shall be paid a cash sign-on bonus of $600,000
upon the later of the first business day after the Effective Date or the date
this Agreement is signed.
(c) The Employee will be eligible to participate in the group
medical, dental, retirement, disability, and life insurance, and any other
benefit plans or programs made available to other similarly situated employees
of the Employer in the country where the Employee is located.
(d) The Employee will be eligible for an annual incentive
compensation award ranging from 0%-110% of Base Salary, with a target bonus of
55% of Base Salary (the "Target Bonus") based on the achievement of performance
goals established by the Compensation Committee of the Employer's Board of
Directors. Should such bonus be awarded, it will be paid in accordance with the
Employer's usual practices and, subject to Section 5(b), shall be paid only if
the Employee is an employee of the Employer on the date it is scheduled to be
paid.
(e) The Employee shall be paid a cash retention bonus of $600,000
on October 1, 2003, provided that the Employee is an employee of the Employer on
such date.
(f) During the term of this Agreement, if C&D purchases Xxxxx'x
entire interest in the Employer (the "Xxxxx Transaction"), the Employee shall
receive a bonus (the "Change of Control Bonus") equal to $930,000 plus an
"equity appreciation award," if any, based on the return on Xxxxx'x equity
investment in the Employer ("XXX"). The XXX (denominated as a percentage) shall
be determined by the Employer in its sole and absolute discretion within a
reasonable time following the close of the Xxxxx Transaction. After the Employer
determines the XXX, the equity appreciation award shall be calculated by
multiplying $270,000 by the ratio of the XXX less 23, divided by 10. Provided,
however, that the equity appreciation award shall not be less than zero ($0) nor
more than $270,000. The determination of the equity appreciation award may be
expressed mathematically as follows:
Equity Appreciation Award = $270,000 * [(XXX - 23)/10], where XXX
cannot be less than 23 nor more than 33.
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The Employee shall be paid the Change of Control Bonus over a
twenty-four (24) month period following the Xxxxx Transaction with (i) one-third
payable upon the close of the Xxxxx Transaction, (ii) one-third payable twelve
(12) months after the close of the Xxxxx Transaction and, (iii) one-third
payable twenty-four (24) months after the close of the Xxxxx Transaction. The
Change of Control Bonus will be paid in cash.
(g) The Employee hereby agrees to the assignment of his split
dollar life insurance policy and any cash build-up thereunder from C-W to the
Employer.
(h) The Employee shall receive 5 weeks of paid annual vacation,
per calendar year, prorated for any partial year, subject to the Employer's
normal vacation policy.
3. At-Will Status. The Employee shall be an at-will employee of
the Employer, provided that severance benefits may be paid in accordance with
Section 5(b) hereof upon the Employee's termination of employment with the
Employer for any of the reasons specified in such Section 5(b). The Employee's
employment hereunder shall terminate upon the earliest to occur of the following
events:
(a) Death. The Employee's employment hereunder shall terminate
upon his death.
(b) Disability. The Employer shall be entitled to terminate the
Employee's employment hereunder for "Disability." For purposes of this
Agreement, the Employee shall be subject to a "Disability" if (i) as a result of
the Employee's incapacity due to physical or mental illness, the Employee shall
have been unable to perform his duties hereunder, or the Employer reasonably
determines that the Employee will not be able to substantially perform his
duties hereunder, for a period of three (3) consecutive months or for 90 days
within any 365-day period, and (ii) within thirty (30) days after Notice of
Termination (as defined in Section 4 below) for Disability is given following
such 3-month or 90/365-day period, as the case may be, the Employee shall not
have returned to the performance of his duties on a full-time basis to the
reasonable satisfaction of the Employer. Such inability or incapacity to perform
the duties hereunder shall be documented to the reasonable satisfaction of the
CEO or his delegate by correspondence from physicians acceptable to the CEO or
his delegate.
(c) Cause. The Employer (except as provided herein) may terminate
the Employee's employment for Cause. For purposes of this Agreement, the term
"Cause" shall mean: (i) a material violation by the Employee of this Agreement;
(ii) excessive absenteeism or the failure by the Employee to satisfactorily
perform his duties hereunder; (iii) the Employee's insubordination, misconduct,
gross negligence, or material violation of the Employer policies, work rules, or
codes of conduct; (iv) fraud, dishonesty, theft, embezzlement, or the indictment
(or plea of guilty or nolo contendre) of the Employee of a felony or any other
crime involving moral turpitude; or (v) illegal use of drugs or abuse of
alcohol. Notwithstanding the forgoing, no act or omission described in (i),
(ii), or (iii) above shall constitute "Cause" unless the Employer notifies the
Employee in writing of the acts or omissions that the Employer believes
constitute Cause, and the Employee fails to cure such acts or omissions to the
Employer's satisfaction within 72 hours of receiving such notice.
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(d) Voluntary Termination. The Employee's employment hereunder may
be terminated at any time by the Employee for Good Reason (as defined in Section
5(c) or for any reason other than Good Reason upon thirty (30) days written
notice to the Employer.
(e) Involuntary Termination. The Employer may terminate the
Employee's employment for any reason not constituting Cause, subject to the
terms of Section 5(c).
4. Termination Procedure.
(a) Notice of Termination. Any termination of the Employee's
employment by the Employee or the Employer (other than termination pursuant to
Section 3(a)) shall be communicated by written "Notice of Termination" to the
Employee or the Employer in accordance with Section 10(a).
(b) Date of Termination. "Date of Termination" shall mean the
actual date the Employee's employment with the Employer ends.
5. Termination Payments.
(a) For Cause or Voluntary Termination. If the Employee's
employment is terminated by the Employer for Cause or the Employee voluntarily
terminates employment with the Employer other than for Good Reason, the Employer
shall pay to the Employee any unpaid Base Salary and vacation pay unused up to
the Date of Termination, and shall have no further obligations hereunder.
(b) Death or Disability. If the Employee's employment with the
Employer is terminated due to death or Disability, the Employer shall pay the
Employee (or, in the case of his death, his estate or beneficiary) (i) any
unpaid Base Salary and unused vacation; and (ii) a pro rata portion of the
Target Bonus for the portion of the year he was actively at work prior to his
death or Disability, based on the Employer's and the Employee's actual
performance during such portion of the year, and the Employer shall have no
further obligations hereunder.
(c) Termination Not for Cause or Voluntary Termination for Good
Reason. If the Employee's employment with the Employer is terminated by the
Employer not for Cause or by the Employee for Good Reason, the Employer shall
provide the Employee severance benefits of (i) any accrued but unpaid Base
Salary and vacation pay through the Date of Termination; (ii) the Retention
Bonus (if not yet paid); and (iii) the Change of Control Bonus (if not yet
paid), but which shall only become payable one-third upon the Closing of the
Xxxxx Transaction, one-third twelve months later, and one-third twenty-four
months thereafter. Moreover, for purposes of determining the Change of Control
Bonus for this Section, the equity appreciation award component thereof shall be
deemed to be zero ($0), and thus the Change of Control Bonus shall be fixed at
$930,000. No part of this Change of Control Bonus shall be payable until the
Closing of the Xxxxx Transaction, and then shall be payable over the time period
provided above. In addition, if such termination occurs after October 1, 2003,
the Employer shall also pay to the Employee (iv) 100% of the Employee's then
current Base Salary (in accordance with the
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Employer's normal payroll practices); and (v) the Target Bonus determined under
Section 2(d) for the year in which the Date of Termination occurs, such amount
to be paid in accordance with the Employer's usual practices. Payments under
this Section 5(c) shall be contingent upon the Employee executing a waiver and
release of claims acceptable to the Employer in its discretion. If the Employee
violates any provision of Section 6 or 7 hereof, the Employee shall not be
entitled to receive any amounts under this Section, and any amounts previously
paid shall be forfeited and returned to the Employer. Other than as provided in
this Section 5(c), the Employer shall have no further obligations to the
Employee.
For purposes of this Agreement, "Good Reason" means (i) any
reduction in the Employee's Base Salary or Target Bonus opportunity; (ii)
required relocation to which the Employee does not consent of more than 45 miles
(provided that extensive travel shall not count as a relocation for this
purpose); or (iii) a transfer of significant international country
responsibilities previously handled by the Employee to another executive of the
Employer, provided that this clause (iii) shall not apply to (A) a sale or other
transfer of all or part of the Employer's international business units, or (B)
the Xxxxx Transaction. In addition, the occurrence of the Xxxxx Transaction
shall not be deemed a termination of the Employee's employment with the
Employer.
6. Confidential Information and Inventions. As a condition to the
effectiveness of this Agreement, the Employee shall execute the Employer's
Confidential Information and Inventions Agreement. Any violation of such
agreement shall also be deemed a violation of this Agreement.
7. Non-Solicitation.
(a) In consideration of the Employer's willingness to enter into
this Agreement and provide the payments and benefits provided hereunder, and to
give the Employee access to confidential information regarding the Employer's
business, the Employee shall not:
(i) directly or indirectly, solicit any Customer (as
hereinafter defined), or any former or prospective Customer, with a view
to inducing such Customer to enter into an agreement, or otherwise do
business, with any Competitor (as hereinafter defined) or attempt to
induce any Customer to terminate its relationship with the Employer or to
not enter into a relationship with the Employer, as the case may be, while
an employee hereunder and for a period of two (2) years following the Date
of Termination; or
(ii) solicit or attempt to solicit the employment of any
employee of the Employer, or any person employed by the Employer during
the prior one (1) year period, or attempt to solicit or induce any such
employee or person to leave the employ of the Employer for a period
beginning on the Date of Termination and ending two (2) years following
such date.
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(b) For purposes of this Section 7:
(i) A "Competitor" shall mean any person, corporation, firm,
partnership, proprietorship or other entity engaged in the same business
as the Employer or, if the Competitor is engaged in businesses other than
such business, the departments, divisions, affiliates, subsidiaries or
other units of the Competitor engaged in such business.
(ii) A "Customer" shall mean (1) any person or entity that
sells, purchases or in any way utilizes the products or services of the
Employer or (2) any person or entity that has an active business
relationship with, or has referred business to, the Employer at the time
of the Date of Termination.
8. Third Party Beneficiary Right; Enforcement. The Employee
hereby agrees and acknowledges that his obligations under Sections 6 and 7
hereof are for the benefit of the Employer, and its successors and assigns, and
that such successors and assigns shall have the right to enforce such provisions
hereof to the same extent and in the same manner as the Employer. The Employee
acknowledges and agrees that in the event of the Employee's breach or threatened
breach of the covenants in Sections 6 and 7, the Employer's damage and harm
would be immediate and irreparable, would be difficult to ascertain, and not
subject to adequate remedy at law. Accordingly, the Employer shall have the
right to enforce the covenants contained in Sections 6 and 7 by specific
performance, injunction, and other equitable relief, in addition to any money or
other legal damages to which the Employer may be entitled. If the Employer
institutes any action or proceeding to enforce the provisions hereof, to the
extent permitted by applicable law, the Employee hereby waives the claim or
defense that the Employer has an adequate remedy at law, and the Employee shall
not urge in any such action or proceeding the defense that any such remedy
exists at law. In addition, the Employer need not post any bond or other
security in connection with enforcing the covenants in Sections 6 and 7.
Sections 6, 7 and 8 shall survive the termination of the Employee's employment
by the Employer.
9. Reasonableness. The Employee agrees that the Employer engages
in businesses worldwide and actively competes worldwide. The Employee agrees
that the Employer develops substantial confidential information and proprietary
insights and take steps to protect such information and insights. The Employee
agrees that he will be given access to such information and insights in
consideration, among other things, of his agreement to be bound by this
Agreement, including without limitation the confidentiality, non-disclosure,
non-solicitation and intellectual property restrictions and covenants set forth
in Sections 6 and 7 and in the Employer's Confidential Information and
Inventions Agreement. The Employee acknowledges that the restrictions and
covenants set forth in this Agreement, including specifically without limitation
those restrictions and covenants set forth in Sections 6 and 7, are necessary to
prevent the use and disclosure of the Employer's confidential information and to
otherwise protect the legitimate business interests of the Employer. The
Employee further acknowledges that all of the restrictions and covenants in this
Agreement are reasonable in all respects, including without limitation duration,
territory and scope of activity. The Employee agrees that the existence of any
claim or cause of action by the Employee against the Employer, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Employer of the covenants and restrictions set forth in this
Agreement.
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10. Miscellaneous.
(a) Any notice or other communication required or permitted under
this Agreement shall be effective only if it is in writing and delivered
personally or sent by registered or certified mail, postage prepaid, addressed
as follows (or if it is sent through any other method agreed upon by the
parties):
If to the Employer:
ARMKEL, LLC
000 Xxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
If to the Employee:
Xxxxxx Huns
00 Xxxxxxxx Xxx
Xxxxxxxx, XX 00000
or to such other address as any party hereto may designate by notice to the
other, and shall be deemed to have been given upon receipt.
(b) This Agreement by and between the Employee and the Employer
constitutes the entire agreement between the parties hereto with respect to the
Employee's employment, and supersedes and is in full substitution for any and
all prior understandings or agreements, whether oral or written, with respect to
the Employee's employment.
(c) This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party against whom or which enforcement of
such waiver is sought. The failure of any party hereto at any time to require
the performance by any other party hereto of any provision hereof shall in no
way affect the full right to require such performance at any time thereafter,
nor shall the waiver by any party hereto of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself or a waiver of any other provision of this
Agreement.
(d) This Agreement is binding on and is for the benefit of the
parties hereto and their respective successors, heirs, executors, administrators
and other legal representatives. Neither this Agreement nor any right or
obligation hereunder may be assigned by the Employee. The Employee specifically
consents to the assignment of this Agreement, and all rights of the Employer
contained herein, including without limitation rights under Sections 6, 7 and 8,
to any successor or assign of the Employer.
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(e) The Employer may withhold from any amounts payable to the
Employee hereunder all federal, state, city or other taxes that the Employer may
reasonably determine are required to be withheld pursuant to any applicable law
or regulation.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT REFERENCE TO HER
PRINCIPLES OF CONFLICTS OF LAW.
(g) Any dispute or claim, other than a violation or purported
violation by the Employee of Section 6 or 7 hereof, arising out of or relating
to this Agreement or otherwise relating to the employment relationship with the
Employer, shall be subject to binding arbitration, before a single arbitrator,
in Princeton, New Jersey, in accordance with the rules of the American
Arbitration Association as the exclusive remedy for such claim or dispute.
Judgment upon the award rendered by the arbitrator may be entered in any court
of competent jurisdiction. The Employee and the Employer agree that such
arbitration will be confidential and no details, descriptions, settlements or
other facts concerning such arbitration shall be disclosed or released to any
third party without the specific written consent of the other party, unless
required by law or court order or in connection with enforcement of any decision
in such arbitration. The arbitrator shall have no authority to add, delete, or
modify any term of this Agreement. Any damages awarded in such arbitration shall
be limited to the contract measure of damages, and shall not include punitive,
exemplary, special, consequential, indirect, or any other extra contractual
damages. Each side shall pay one-half of the arbitrator's fee and be responsible
for their own attorney's fees.
(h) This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
(i) The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
any provision hereof.
(j) All provisions of this Agreement are intended to be severable.
In the event any provision or restriction contained herein is held to be invalid
or unenforceable in any respect, in whole or in part, such finding will in no
way affect the validity or enforceability of any other provision of this
Agreement. The parties hereto further agree that any such invalid or
unenforceable provision will be deemed modified so that it will be enforced to
the greatest extent permissible under law, and to the extent that any court of
competent jurisdiction determines any restriction herein to be unreasonable in
any respect, such court may limit this Agreement to render it reasonable in
light of the circumstances in which it was entered into and specifically enforce
this Agreement as limited.
(k) The Employee acknowledges and confirms that he has had the
opportunity to seek such legal, financial and other advice and representation as
he has deemed appropriate in connection with this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
ARMKEL, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, Human Resources
/s/Xxxxxx Huns
------------------------------------------
XXXXXX HUNS
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