Exhibit 99.2
Executive Employment
Agreement
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(this “ Agreement ”) is made as of
August 4, 2005, by and among Prestige Brands
Holdings, Inc., a Delaware corporation (the “
Company ”), Prestige Brands, Inc., a Delaware
corporation (“ Employer ”), and Frank P.
Palantoni (“ Executive ”). Certain
definitions are set forth in Section 4 of this
Agreement.
Employer desires to employ Executive
and Executive desires to be employed by Employer upon the terms set
forth herein.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as
follows:
1.
Employment . Employer agrees to employ Executive and
Executive accepts such employment for the period beginning as of
August 15, 2005 and ending upon his separation pursuant to
Section 1(c) hereof (the “ Employment
Period ”).
(a)
Position and Duties .
(i)
During the Employment Period, Executive shall serve as the
President and Chief Operating Officer of Employer and shall have
the normal duties, responsibilities and authority implied by such
position, subject to the power of the Chief Executive Officer of
Employer and the Board to expand or limit such duties,
responsibilities and authority and to override such
actions.
(ii)
Executive shall report to the Chief Executive Officer of Employer,
and Executive shall devote his best efforts and his full business
time and attention to the business and affairs of the Company,
Employer and their Subsidiaries.
(b)
Salary, Bonus and Benefits . During the Employment
Period, Employer will pay Executive a base salary of $350,000 per
annum (the “ Annual Base Salary ”). In addition,
Executive shall be eligible for and participate in the Annual
Incentive Compensation Plan (the “ Annual Bonus Plan
”) under which Executive shall be eligible for an annual
target bonus (the “ Target Bonus ”) payment of
not less than 60% nor more than 120% of the Annual Base
Salary. For the fiscal year beginning April 1, 2005
only, Executive’s participation in the Annual Bonus Plan is
guaranteed but will be adjusted for the number of days remaining in
such fiscal year from the date hereof pro rata, based on the Target
Bonus of 60% regardless of the Company’s performance.
Executive shall be eligible to participate in the Company’s
2005 Long-Term Equity Incentive Plan (the “ Plan
”). Executive’s participation in the Plan may involve
awards of Restricted Stock (as defined in the Plan) and/or
Non-qualified Stock Options (as defined in the Plan). It is the
current intention of the Board to grant Restricted Stock and
Non-qualified Stock Options pursuant to the Plan on an annual
basis,
subject to the
needs of the business and the exercise of prudent judgment by the
Board and the Compensation Committee. Upon execution of this
Agreement, the Company hereby grants to Executive, pursuant to and
in accordance with the terms and conditions of the Plan, an initial
grant of: (i) a number of shares of Restricted Stock equal to
the result obtained by dividing $400,000 by the closing price of
the Common Stock (as defined in the Plan) on the date hereof, which
shall vest in accordance with the three-year performance criteria
specified in Exhibit A attached hereto; and (ii) a
Non-qualified Stock Option to acquire a number of shares of Common
Stock equal to the result obtained by dividing $800,000 by the
closing price of the Common Stock on the date hereof at a per share
exercise price equal to the closing price of the Common Stock on
the date hereof, which shall vest twenty percent (20%) on each of
the next five (5) anniversaries of the date hereof. In
the event of a Change in Control, all Restricted Stock and
Non-qualified Stock Options granted to Executive hereunder shall
automatically become fully vested and exercisable in accordance
with the terms and conditions of the Plan, whether or not Executive
is subsequently terminated. In addition, during the Employment
Period, Executive will be entitled to such other benefits approved
by the Board and made available to the senior management of the
Company, Employer and their Subsidiaries, which shall include four
weeks annual paid vacation time (two weeks in the balance of
calendar 2005) and medical, dental, life and disability
insurance. The Board, on a basis consistent with past
practice, shall review the Annual Base Salary of Executive and may
increase the Annual Base Salary by such amount as the Board, in its
sole discretion, shall deem appropriate. The term
“Annual Base Salary” as used in this Agreement shall
refer to the Annual Base Salary as it may be so
increased.
(c)
Separation . The Employment Period will continue until
(i) Executive’s death, Disability or resignation from
employment with the Company, Employer and their respective
Subsidiaries or (ii) the Company, Employer and their
respective Subsidiaries decide to terminate Executive’s
employment with or without Cause. If
(A) Executive’s employment is terminated without Cause
pursuant to clause (ii) above or (B) Executive resigns
from employment with the Company, Employer or any of their
respective Subsidiaries for Good Reason, then during the period
commencing on the date of termination of the Employment Period and
ending on the first anniversary of the date of termination (the
“ Severance Period ”), Employer shall pay to
Executive, in equal installments on the Employer’s regular
salary payment dates, an aggregate amount equal to (I) his Annual
Base Salary, plus (II) an amount equal to the annual bonus, if any,
paid or payable to Executive by Employer pursuant to the Annual
Bonus Plan for the last fiscal year ended prior to the date of
termination. Notwithstanding the foregoing, during the first year
of employment only, for the purposes of this
Section 1(c) the Annual Bonus paid or payable to
Executive by Employer for the last fiscal year ended prior to the
date of termination shall be deemed to be the full Target
Bonus. In addition, if Executive is entitled on the date of
termination to coverage under the medical and prescription portions
of the Welfare Plans, such coverage shall continue for Executive
and Executive’s covered dependents for a period
ending
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on the first
anniversary of the date of termination at the active employee cost
payable by Executive with respect to those costs paid by Executive
prior to the date of termination; provided , that this
coverage will count towards the depletion of any continued health
care coverage rights that Executive and Executive’s
dependents may have pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“ COBRA
”); provided further, that Executive’s or
Executive’s covered dependents’ rights to continued
health care coverage pursuant to this
Section 1(c) shall terminate at the time
Executive or Executive’s covered dependents become covered,
as described in COBRA, under another group health plan, and shall
also terminate as of the date Employer ceases to provide coverage
to its senior executives generally under any such Welfare
Plan. Notwithstanding the foregoing, (I) Executive shall not
be entitled to receive any payments or benefits pursuant to this
Section 1(c) unless Executive has executed and
delivered to Employer a general release in form and substance
satisfactory to Employer and (II) Executive shall be entitled to
receive such payments and benefits only so long as Executive has
not breached the provisions of Section 2 or
Section 3 hereof. The release described in the
foregoing sentence shall not require Executive to release any
claims for any vested employee benefits, workers compensation
benefits covered by insurance or self-insurance, claims to
indemnification to which Executive may be entitled under the
Company’s or its Subsidiaries’ certificate(s) of
incorporation, by-laws or under any of the Company’s or its
Subsidiaries’ directors or officers insurance policy(ies) or
applicable law, or equity claims to contribution from the Company
or its Subsidiaries or any other Person to which Executive is
entitled as a matter of law in respect of any claim made against
Executive for an alleged act or omission in Executive’s
official capacity and within the scope of Executive’s duties
as an officer, director or employee of the Company or its
Subsidiaries. Not later than eighteen (18) months following the
termination of Executive’s employment, the Company and its
Subsidiaries for which the Executive has acted in the capacity of a
senior manager, shall sign and deliver to Executive a release of
claims that the Company or its Subsidiaries has against Executive;
provided that , such release shall not release any claims
that the Company or its Subsidiaries commenced prior to the date of
the release(s), any claims relating to matters actively concealed
by Executive, any claims to contribution from Executive to which
the Company or its Subsidiaries are entitled as a matter of law or
any claims arising out of mistaken indemnification by the Company
or any of its Subsidiaries. Except as otherwise provided in
this Section 1(c) or in the Employer’s
employee benefit plans or as otherwise required by applicable law,
Executive shall not be entitled to any other salary, compensation
or benefits after termination of Executive’s employment with
Employer.
2.
Confidential Information .
(a)
Obligation to Maintain Confidentiality . Executive
acknowledges that the information, observations and data (including
trade secrets) obtained by him during the course of his performance
under this Agreement concerning the business or affairs of the
Company, Employer and their respective Subsidiaries
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and Affiliates
(“ Confidential Information ”) are the property
of the Company, Employer or such Subsidiaries and Affiliates,
including information concerning acquisition opportunities in or
reasonably related to the Company’s and Employer’s
business or industry of which Executive becomes aware during the
Employment Period. Therefore, Executive agrees that he will not
disclose to any unauthorized Person or use for his own account (for
his commercial advantage or otherwise) any Confidential Information
without the Board’s written consent, unless and to the extent
that the Confidential Information, (i) becomes generally known
to and available for use by the public other than as a result of
Executive’s acts or omissions to act, (ii) was known to
Executive prior to Executive’s employment with Employer, the
Company or any of their Subsidiaries and Affiliates or
(iii) is required to be disclosed pursuant to any applicable
law, court order or other governmental decree. Executive
shall deliver to the Company at a Separation, or at any other time
the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents
and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the
Company, Employer and their respective Subsidiaries and Affiliates
(including, without limitation, all acquisition prospects, lists
and contact information) which he may then possess or have under
his control.
(b)
Ownership of Property . Executive acknowledges that
all discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, processes, programs, designs,
analyses, drawings, reports, patent applications, copyrightable
work and mask work (whether or not including any Confidential
Information) and all registrations or applications related thereto,
all other proprietary information and all similar or related
information (whether or not patentable) that relate to the
Company’s, Employer’s or any of their respective
Subsidiaries’ or Affiliates’ actual or anticipated
business, research and development, or existing or future products
or services and that are conceived, developed, contributed to,
made, or reduced to practice by Executive (either solely or jointly
with others) while employed by the Company, Employer or any of
their respective Subsidiaries or Affiliates (including any of the
foregoing that constitutes any proprietary information or records)
(“ Work Product ”) belong to the Company,
Employer or such Subsidiary or Affiliate and Executive hereby
assigns, and agrees to assign, all of the above Work Product to the
Company, Employer or to such Subsidiary or Affiliate. Any
copyrightable work prepared in whole or in part by Executive in the
course of his work for any of the foregoing entities shall be
deemed a “work made for hire” under the copyright laws,
and the Company, Employer or such Subsidiary or Affiliate shall own
all rights therein. To the extent that any such copyrightable
work is not a “work made for hire,” Executive hereby
assigns and agrees to assign to the Company, Employer or such
Subsidiary or Affiliate all right, title, and interest, including
without limitation, copyright in and to such copyrightable
work. Executive shall promptly disclose such Work Product and
copyrightable work to the Board and perform all actions reasonably
requested by the Board (whether during or after the Employment
Period) to establish and confirm the Company’s,
Employer’s or such Subsidiary’s
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or
Affiliate’s ownership (including, without limitation,
assignments, consents, powers of attorney, and other
instruments).
(c)
Third Party Information . Executive understands that the
Company, Employer and their respective Subsidiaries and Affiliates
will receive from third parties confidential or proprietary
information (“ Third Party Information ”)
subject to a duty on the Company’s, Employer’s and
their respective Subsidiaries’ and Affiliates’ part to
maintain the confidentiality of such information and to use it only
for certain limited purposes. During the Employment Period
and thereafter, and without in any way limiting the provisions of
Section 2(a) above, Executive will hold Third
Party Information in the strictest confidence and will not disclose
to anyone (other than personnel and consultants of the Company,
Employer or their respective Subsidiaries and Affiliates who need
to know such information in connection with their work for the
Company, Employer or any of their respective Subsidiaries and
Affiliates) or use, except in connection with his work for the
Company, Employer or any of their respective Subsidiaries and
Affiliates, Third Party Information unless expressly authorized by
a member of the Board (other than himself if Executive is on the
Board) in writing.
(d) Use
of Information of Prior Employers . During the Employment
Period and thereafter, Executive will not improperly use or
disclose any confidential information or trade secrets, if any, of
any former employers or any other Person to whom Executive has an
obligation of confidentiality, and will not bring onto the premises
of the Company, Employer or any of their respective Subsidiaries or
Affiliates any unpublished documents or any property belonging to
any former employer or any other Person to whom Executive has an
obligation of confidentiality unless consented to in writing by the
former employer or Person. Executive will use in the
performance of his duties only information which is
(i) generally known and used by persons with training and
experience comparable to Executive’s and which is (x) common
knowledge in the industry or (y) otherwise legally in the public
domain, (ii) otherwise provided or developed by the Company,
Employer or any of their respective Subsidiaries or Affiliates or
(iii) in the case of materials, property or information
belonging to any former employer or other Person to whom Executive
has an obligation of confidentiality, approved for such use in
writing by such former employer or Person.
3.
Non-competition and No Solicitation . Executive
acknowledges that in the course of his employment with Employer he
will become familiar with the Company’s, Employer’s and
their respective Subsidiaries’ trade secrets and with other
confidential information concerning the Company, Employer and such
Subsidiaries and that his services will be of special, unique and
extraordinary value to the Company, Employer and such
Subsidiaries. Therefore, Executive agrees that:
(a)
Non-competition . During the Employment Period and
also during the period commencing on the date of termination of the
Employment Period and ending on the first anniversary of the date
of termination, he shall not without the express written consent of
the Company, anywhere in the United States, directly
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or indirectly,
own, manage, control, participate in, consult with, render services
for, or in any manner engage in any business (i) c
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