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Exhibit
10(t)
CHANGE IN CONTROL AND
SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL AND
SEVERANCE AGREEMENT, dated as of March 31, 2006 (this “
Agreement ”), is made by and between Church &
Dwight Co., Inc, a Delaware corporation (the “ Company
”), and James R. Craigie (the “ Executive
”).
WHEREAS, the Company
considers it essential to the best interests of its stockholders to
foster the continued employment of key executive management
personnel; and
WHEREAS, the Board of
Directors of the Company (the “ Board ”)
recognizes that the possibility of a Change in Control (as defined
in Section 1.3 below) of the Company exists from time to time
and that such possibility, and the uncertainty, instability and
questions that it may raise for and among key executive management
personnel, may result in the premature departure or significant
distraction of such management personnel to the material detriment
of the Company and its shareholders; and
WHEREAS, the Board has
determined that protection of the Executive’s earned
benefits, compensation and severance payments are the most
efficient means to eliminate any such conflict in regards to the
Executive; and
NOW THEREFORE, in
consideration of the premises and the mutual covenants herein
contained, the Company and the Executive intending to be legally
bound do hereby agree as follows:
1. Definitions. For purposes of
this Agreement, the following terms shall have the meanings set
forth below:
1.1. “ Affiliate
” shall mean, other than the Company, (i) any
corporation in an unbroken chain of corporations beginning with the
Company, which owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in
one of the other corporations in such chain; (ii) any
corporation, trade or business (including, without limitation, a
partnership or limited liability company) which is controlled fifty
percent (50%) or more (whether by ownership of stock, assets
or an equivalent ownership interest or voting interest) by the
Company or one of its Affiliates; or (iii) any other entity,
approved by the Board as an Affiliate, in which the Company or any
of its Affiliates has a material equity interest.
1.2. “ Annual Base
Salary ” shall mean the Executive’s rate of regular
base annual compensation prior to any reduction under (i) a
salary reduction agreement pursuant to Section 401(k) or
Section 125 of the Code or (ii) any other plan or
arrangement deferring any base salary, and shall not include
(without limitation) cost of living allowances, fees, retainers,
reimbursements, bonuses, incentive awards, prizes or similar
payments.
1.3. “ Cause
” shall mean Executive’s dishonesty, fraud,
insubordination, willful misconduct or refusal to attempt to
perform services (for any reason other than illness or incapacity),
as determined by the Board in its sole discretion.
1.4. “ Change in
Control ” shall be deemed to have occurred if:
1.4.1. any Person becomes the
beneficial owner (as defined in Rule 13(d)-3 under the Exchange
Act) of shares of Common Stock representing more than fifty percent
(50%) of the total number of votes that may be cast for the
election of directors of the Company;
1.4.2. the stockholders of
the Company shall consummate any merger or other business
combination of the Company, sale of all or substantially all of the
Company’s assets or combination of the foregoing transactions
(a “ Transaction ”), other than a Transaction
involving only the Company and one or more of its Subsidiaries, or
a Transaction immediately following which the stockholders of the
Company immediately prior to the Transaction continue to have a
majority of the voting power in the resulting entity; or
1.4.3. within any twenty-four
(24) month period beginning on or after the date hereof, the
persons who were directors of the Company immediately before the
beginning of such period (the “ Incumbent Directors
”) shall cease (for any reason other than death) to
constitute at least a majority of the Board (or the board of
directors of any successor to the Company); provided that, any
director who was not a director as of the date hereof shall be
deemed to be an Incumbent Director if such director was elected to
the Board by, or on the recommendation of or with the approval of,
at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of the
foregoing unless such election, recommendation or approval was the
result of an actual or threatened election contest of the type
contemplated by Rule 14a-11 promulgated under the Exchange Act or
any successor provision.
1.5. “ Code
” shall mean Internal Revenue Code of 1986, as
amended.
1.6. “ Common
Stock ” shall mean the common stock of the Company, par
value $1.00.
1.7. “ Exchange
Act ” shall mean the Securities Exchange Act of 1934, as
amended.
1.8. “ Good
Reason ” shall mean and shall be deemed to exist if,
without the prior express written consent of the Executive,
(i) the Executive suffers a demotion in his title or position
as it existed on the date of this Agreement; (ii) the
Executive suffers a material reduction in his duties,
responsibilities or effective authority associated with his titles
and positions; (iii) the Executive’s target annual cash
compensation (Annual Base Salary plus target bonus percentage) or
aggregate benefits are decreased by the Company; (iv) the
Company fails to obtain assumption of this Agreement by an
acquiror; or (v) the Executive’s primary office location
is moved to a location more than 50 miles from its location as of
the date hereof. For purposes of this Agreement, any action or
inaction shall constitute Good Reason only for the 90 day period
from the date on which such action or inaction first occurred. The
Executive’s continued employment shall not constitute consent
to, or a waiver of rights with respect to, any act or failure to
act constituting Good Reason hereunder.
1.9. “ Person
” shall have the meaning ascribed thereto in
Section 3(a)(9) of the Exchange Act, as modified, applied and
used in Sections 13(d) and 14(d) thereof; provided ,
however , a Person shall not include (i) the Company or
any Subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of
its
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subsidiaries (in its capacity as such),
(iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company
in substantially the same character and proportions as their
ownership of stock of the Company.
1.10. “
Subsidiary ” shall mean any subsidiary corporation of
the Company within the meaning of Section 424(f) of the
Code
2. Severance Payments
.
2.1. Change in Control
Severance. Upon the termination of the Executive’s
employment by the Company without Cause or by the Executive for
Good Reason during the two-year period following a Change in
Control (a “ CIC Termination ”), and upon
execution of a general release in favor of the Company and
substantially in the form attached hereto as Exhibit A (the “
Release ”) and expiration of any revocation period
applicable to the release, the Executive shall be entitled to the
payments and benefits set forth in this Section 2.1 and in
Section 2.3. In addition, a CIC Termination shall result if
the Executive’s employment is terminated prior to a Change in
Control and (a) the Executive reasonably demonstrates that the
Executive’s employment was terminated without Cause prior to
a Change in Control (1) at the request of a Person who has
entered into an agreement with the Company the consummation of
which will constitute a Change in Control (or who has taken other
steps reasonably calculated to effect a Change in Control) or
(2) otherwise in connection with or in anticipation of a
Change in Control, or (b) the Executive terminates his
employment for Good Reason prior to a Change in Control and the
Executive reasonably demonstrates that the circumstance(s) or
event(s) which constitute such Good Reason occurred (1) at the
request of such Person or (2) otherwise in connection with or
in anticipation of a Change in Control.
2.1.1. A payment equal to
three times the sum of (a) the Executive’s Annual Base
Salary and (b) the Executive’s target bonus amount for
the year in which any such termination occurs. The payment shall be
made in a single lump sum on the date that is six months following
the Executive’s CIC Termination.
2.1.2. A lump sum payment
equal to the Executive’s target bonus payment under the
Company’s management incentive plan times a fraction, the
numerator of which is the number of days that have elapsed in the
year of the Executive’s CIC Termination and the denominator
of which is 365. Such payment shall be made on the date which is
six months after the Executive’s CIC Termination.
2.2. Non-Change in Control
Severance. Upon the termination of the Executive’s
employment by the Company without Cause or by the Executive for
Good Reason at any time other than those prescribed in
Section 2.1 (a “Non-CIC Termination”), and upon
execution of a Release and expiration of any revocation period
applicable to the Release, the Executive shall be entitled to the
payments and benefits set forth in this Section 2.2 and in
Section 2.3.
2.2.1. An amount equal to two
times the Executive’s Annual Base Salary. This amount shall
be paid 50% on the date that is six months following the
Executive’s Non-CIC Termination, and the remaining 50% shall
be paid in six substantially equal monthly installments.
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2.2.2. A lump sum payment
equal to the Executive’s target bonus payment under the
Company’s Management Incentive Plan times a fraction, the
numerator of which is the number of days that have elapsed in the
year of the Executive’s Non-CIC Termination and the
denominator of which is 365. Such payment shall be made on the date
which is six months after the Executive’s Non-CIC
Termination.
2.3. Additional
Severance. In addition to the payments provided for in
Section 2.1 and 2.2, upon a CIC Termination or Non-CIC
Termination, the following additional provisions shall
apply:
2.3.1. Group Medical
Coverage. For a thirty-six (36) month period after the
Executive’s CIC Termination or a twenty-four (24) month
period after the Executive’s Non-CIC Termination, as
applicable, Executive may elect to continue, under the terms
prevailing from time to time, group medical and dental coverage for
himself and his covered dependents. If Executive elects such
coverage, Executive’s share of any group medical and dental
premiums will be at the then-prevailing active employee rate.
Failure to pay the premium will result in loss of the coverage.
Executive agrees and understands that his rights under Code
Section 4980B which sets forth certain COBRA continuation
coverage requirements will run concurrently with the period of
coverage under this Section 2.3.1. Following the period of
coverage under this Section 2.3.1, Executive may continue
medical and dental coverage for any remaining COBRA period only by
electing COBRA coverage and paying the applicable premiums under
COBRA. Medical benefits otherwise receivable by the Executive
pursuant to this Section 2.3.1 shall be reduced to the extent
the Executive obtains comparable coverage under another
employer’s plan during the 36-month or 24-month period, as
applicable following the Executive’s termination. The
Executive agrees to immediately report such other coverages to the
Company.
2.3.2. Group Life
Insurance Coverage. For a thirty-six twelve (36) month
period after the Executive’s CIC Termination or a twenty-four
(24) month period after the Executive’s Non-CIC
Termination, as applicable, the Company shall continue
Executive’s basic life insurance coverage. Executive will be
entitled to the life insurance conversion rights required by
applicable law.
2.3.3. Outplacement.
The Executive shall be entitled to the outplacement assistance set
forth in the Company’s executive-level corporate outplacement
program.
2.3.4. Vacation.
Executive will receive payment for any granted and unused vacation
upon termination in accordance with the Company’s policy and
applicable law.
2.3.5. Other Benefits.
Any supplemental, spouse or child life insurance, accidental death
and dismemberment and disability insurance will terminate on the
Executive’s date of termination in accordance with the terms
of the applicable welfare benefit plan. Qualified retirement plan
and savings plan benefits will be subject to the terms of the
applicable plan.
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2.3.6. Equity
Compensation; Nonqualified Deferred Compensation. All awards of
equity compensation and any non-qualified deferred compensation
earned by the Executive shall be subject to the provisions of the
applicable equity compensation plan, equity award agreement and/or
the applicable non-qualified deferred compensation plan.
3. Special Tax
Reimbursement.
3.1. If the Executive is
liable for the payment of any excise tax (the “ Basic
Excise Tax ”) pursuant to Section 4999 of the Code,
or any successor or like provision, with respect to any payment or
property transfers received or to be received under this Agreement
or otherwise, including, without limitation the acceleration of
vesting of any equity compensation awarded to the Executive, the
Company shall pay the Executive an amount (the “ Special
Tax Reimbursement ”) which, after payment to the
Executive (or on the Executive’s behalf) of any federal,
state and local income and employment taxes, including, without
limitation, any further excise tax under Section 4999 of the
Code, with respect to or resulting from the Special Tax
Reimbursement, equals the net amount of the Basic Excise Tax. The
Special Tax Reimbursement shall be paid as soon as practicable
after the amount is determined and reviewed for accuracy by the
Company’s certified public accountants.
4. Restrictive
Covenants.
4.1. Non-Competition.
During the Executive’s employment and if the
Executive’s employment with the Company terminates, for a
period of three years following a CIC Termination and for a period
of two years following a Voluntary Termination (as defined below),
the Executive shall not, directly or indirectly, within or with
respect to the United States of America engage, in any business or
activity or render any services or provide any advice to
any
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