CHANGE IN CONTROL
AGREEMENT
THIS AGREEMENT, dated as of September 20, 2007 between Del
Laboratories, Inc., a Delaware corporation (the "COMPANY"), and
Shawn Smith
("EXECUTIVE").
BACKGROUND:
In consideration of the future service to be provided by Executive
to
the Company and the mutual covenants hereinafter set forth, the
Company and
Executive (individually a "PARTY" and together the "PARTIES")
intending to be
legally bound agree as follows:
1. DEFINITIONS.
(a) "BASE COMPENSATION" shall mean Executive's annual base
compensation
payable by the Company.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CAUSE" shall be defined as (i) willful refusal or willful
neglect
by Executive to perform substantially her employment-related
duties; (ii)
willful gross misconduct or willful breach of fiduciary duty, each
in connection
with Executive's employment with the Company; (iii) conviction of a
crime
constituting a felony (or crime or offense of equivalent magnitude
in any
jurisdiction) or personal dishonesty or a willful violation of any
law, in each
case which causes material financial harm to the Company or (iv)
material breach
of any written covenant or agreement with the Company or any of its
subsidiaries
or affiliates not to disclose any confidential information
pertaining to the
Company or any such subsidiary or affiliate.
(d) "CHANGE IN CONTROL" shall mean the occurrence of any one of
the
following events:
(i) individuals who, as of the beginning of any twenty-four
month period, constitute the Board (the "INCUMBENT BOARD") cease
for any reason
to constitute at least a majority of the Board, provided that any
individual
becoming a director subsequent to the beginning of such period
whose election or
nomination for election was approved by a vote of at least 75% of
the directors
then comprising the Incumbent Board shall be considered as though
such
individual were a member of the Incumbent Board, but excluding, for
this
purpose, any such individual whose initial assumption of office is
in connection
with an actual or threatened election contest relating to the
election of
members of the Board;
(ii) at any time prior to the expiration or termination of
this Agreement, voting power representing more than 50% of the
Company's
outstanding common stock shall be acquired, directly or indirectly,
by any
individual, corporation or group, other than persons who are
members of the
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Board at the date hereof or who succeed to the ownership of
securities of the
Company of any such members of the Board as executor,
administrator, heir or
intestate distributee of such persons. "Group" shall mean persons
who act in
concert as described in Section 14(d)(2) of the Securities Exchange
Act of 1934,
as amended. "Change in control" shall not include increases in the
percentage of
voting power of persons who beneficially own or control stock on
the date of
this Agreement which occur solely as a result of a reduction in the
amount of
stock outstanding;
(iii) the effective date of a merger, consolidation, or sale
of all or substantially all of the business and/or assets of the
Company, unless
such transaction is with an affiliate of the Company or such
transaction results
in the Company being the controlling, surviving entity;
(iv) the adoption of a plan of liquidation by the Company or
its shareholders; or
(v) the adoption of a resolution by a majority of the Board
then in office declaring that a Change in Control has occurred, in
which case
the Change in Control shall be deemed to have occurred on the date
of, or the
date stated in, the Board resolution so declaring.
(e) "EMPLOYMENT AGREEMENT" shall mean the letter agreement dated
March
13, 2007 between Executive and the Company.
(f) "GOOD REASON" shall mean, without Executive's express
written
consent and without Cause, the occurrence, after a Change in
Control of the
Company, of any of the following:
(i) Any material and adverse diminution of Executive's
position, reporting relationships, responsibility or authority, or
assignment of
duties materially inconsistent with Executive's responsibilities
and status in
effect immediately prior to the Change in Control of the
Company;
(ii) Executive's Base Compensation is decreased by the Company
or her incentive or equity opportunity under any material incentive
or equity
program of the Company is or are reduced;
(iii) The failure by the Company to continue in effect any
material fringe benefit or compensation plan, retirement plan, life
insurance
plan, health and accident plan or disability plan in which
Executive is
participating at the time of a Change in Control (or plans
providing Executive
with substantially similar benefits), the taking of any action by
the Company
which would adversely affect Executive's participation in or
materially reduce
her benefits under any of such plans or deprive her of any material
fringe
benefit enjoyed by her at the time of the Change in Control, or the
failure by
the Company to provide her with the number of paid vacation days to
which she is
then entitled on the basis of years of service with the Company in
accordance
with the Company's normal vacation policy in effect immediately
prior to the
Change in Control;
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(iv) The failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as
contemplated in Section 7 hereof;
(v) The Company's requiring Executive to be based anywhere
other than within 30 miles of the Company's current headquarters;
or
(vi) The Company's requiring that Executive undertake business
travel to an extent significantly greater than Executive's business
travel
obligations immediately prior to the Change in Control.
(g) "TERMINATION UPON A CHANGE IN CONTROL" shall mean that prior to
or
following a Change in Control and during the term of this
Agreement, the Company
or Executive terminates Executive's employment as described in
Paragraph 3(a).
2. TERM OF AGREEMENT. This Agreement shall commence on the date
hereof and shall
continue in effect until the third anniversary of the date hereof;
provided,
however, that the term of this Agreement shall automatically renew
itself each
year for an additional term of one year until the Company provides
Executive one
year written notice that it wishes to terminate this Agreement;
such termination
shall be effective on the anniversary date hereof first occurring
after such
notice is given. The Company may not give such notice while it has
knowledge
that any third party has taken steps reasonably calculated to
effect a Change in
Control of the Company, unless and until such third party has, in
the reasonable
opinion of the Company, abandoned its efforts to effect a Change in
Control of
the Company. In addition, if a Change in Control of the Company
occurs during
the term of this Agreement, or if a Change in Control would have
occurred during
the term of this Agreement but for a delay in regulatory approval
or litigation
related to the Change in Control, this Agreement shall
automatically continue in
effect for a period of twenty-four (24) months beyond the last day
of the month
in which such Change in Control occurs.
3. TERMINATION UPON A CHANGE IN CONTROL.
(a) Prior to or following a Change in Control of the Company,
Executive
shall be entitled to the benefits provided in Section 4 hereof upon
the
subsequent termination of Executive's employment, if such
termination occurs
within twenty-four (24) months following such Change in Control and
is (i) by
the Company other than for Cause following a Change in Control,
(ii) by the
Company (other than for
