EXHIBIT 10.4
PROFIT SHARING PLAN
The Profit Sharing Plan of the Company provides for the award of bonuses to
corporate and divisional officers and managers, including members of the
Executive Committee. The amount of the bonuses awarded is determined by the
achievement of profit goals set by the Executive Committee. In determining the
award, the Executive Committee will take into consideration any events that are
not merit related.
<PAGE>
EXHIBIT 10.6(a)
January 27, 2000
Mr. Ralph Levine
930 Park Avenue
Apartment 7-N
New York, New York 10028
Dear Ralph:
Reference is made to the Executive Employment Agreement, dated as of
June 4, 1998, between Carter-Wallace, Inc. (the "Company") and you (the
"Agreement"). The Board of Directors of the Company has determined that it is
appropriate to amend Section 8(e) of the Agreement in light of the fact that the
target annual incentive award opportunity is currently greater than 56.25% of
base salary and to amend Section 9(b) of the Agreement to correct an oversight
that would result in no bonus being paid for the year of termination in the
event of a termination by the Company without cause or by you for good reason.
Accordingly, upon confirmation by you of your agreement thereto, the
Agreement shall be amended in the following respects:
(1) Clause (ii) of Section 8(e) of the Agreement shall be amended
to read in its entirety as follows:
(ii) a decrease in the target annual incentive award
opportunity below the highest (as a percentage of base salary)
opportunity level established for any of the three preceding
fiscal years;
(2) Clause (i) of Section 9(b) of the Agreement shall be amended
to read in its entirety as follows:
(i) The Accrued Amounts plus an amount in lieu of a bonus for
the Termination Year determined by multiplying the greater of (A)
the highest bonus earned by the Executive in any of the three full
fiscal years preceding the date of termination and (B) the target
bonus (based on assumed attainment of 100% of the performance
objectives) for the Termination Year by a fraction, the numerator
of which is the number of months (treating any partial month as a
full month for this purpose) in the Termination Year during which
the Executive was employed and the denominator of which is 12;
<PAGE>
Mr. Ralph Levine -2- January 27, 2000
Upon your confirmation of your agreement with the amendments to the
Agreement set forth above by signing and returning to the Secretary of the
Company the copy of this letter provided, such amendments shall take effect
immediately.
Very truly yours,
CARTER-WALLACE, INC.
------------------------------
Chairman of the Board
Confirmed and agreed this
____ day of January, 2000
------------------------
Ralph Levine
<PAGE>
EXHIBIT 10.7(a)
January 27, 2000
Mr. Paul A. Veteri
21 Londonderry Drive
Greenwich, Connecticut 06830
Dear Paul:
Reference is made to the Executive Employment Agreement, dated as of
June 4, 1998, between Carter-Wallace, Inc. (the "Company") and you (the
"Agreement"). The Board of Directors of the Company has determined that it is
appropriate to amend Section 8(e) of the Agreement in light of the fact that the
target annual incentive award opportunity is currently greater than 56.25% of
base salary and to amend Section 9(b) of the Agreement to correct an oversight
that would result in no bonus being paid for the year of termination in the
event of a termination by the Company without cause or by you for good reason.
Accordingly, upon confirmation by you of your agreement thereto, the
Agreement shall be amended in the following respects:
(1) Clause (ii) of Section 8(e) of the Agreement shall be amended
to read in its entirety as follows:
(ii) a decrease in the target annual incentive award
opportunity below the highest (as a percentage of base salary)
opportunity level established for any of the three preceding
fiscal years;
(2) Clause (i) of Section 9(b) of the Agreement shall be amended
to read in its entirety as follows:
(i) The Accrued Amounts plus an amount in lieu of a bonus for
the Termination Year determined by multiplying the greater of (A)
the highest bonus earned by the Executive in any of the three full
fiscal years preceding the date of termination and (B) the target
bonus (based on assumed attainment of 100% of the performance
objectives) for the Termination Year by a fraction, the numerator
of which is the number of months (treating any partial month as a
full month for this purpose) in the Termination Year during which
the Executive was employed and the denominator of which is 12;
Upon your confirmation of your agreement with the amendments to the
Agreement set forth above by signing and returning to the Secretary of the
Company the copy of this letter provided, such amendments shall take effect
immediately.
Very truly yours,
CARTER-WALLACE, INC.
--------------------------
Chairman of the Board
Confirmed and agreed this
___ day of January, 2000
------------------------
Paul A. Veteri
<PAGE>
EXHIBIT 10.21(a)
January 27, 2000
Ms. T. Rosie Albright
85 Mayapple Road
Stamford, Connecticut 06903
Dear Rosie:
Reference is made to the letter agreement, dated as of September 14,
1998, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement")
relating to certain compensation arrangements in the event of a pending or
threatened Change in Control (as defined in the Agreement). The Board of
Directors of the Company has determined that it is appropriate to amend Section
4 of the Agreement to clarify how the pro-rated bonus referred to therein for
the year in which termination of employment occurs would be calculated.
Accordingly, upon confirmation by you of your agreement thereto, the
Agreement shall be amended in the following respects:
(1) Clause (i) of Section 4(a) of the Agreement shall be amended
to read in its entirety as follows:
(i) The sum of (A) the full amount due to you and not
theretofore paid for base salary up to the date of such
termination, (B) the amount of any accrued but unpaid bonus on
account of the last full fiscal year preceding the date of such
termination, (C) an amount in lieu of a bonus for the year in
which the termination of your employment occurs determined by
multiplying the greater of (x) the target bonus (based on assumed
attainment of 100% of the performance objectives) for the year in
which the termination occurs and (y) the highest bonus earned by
you in any of the three full fiscal years preceding the year in
which the termination occurs by a fraction, the numerator of which
is the number of months (treating any partial month as a full
month for this purpose) in the year in which termination occurs
during which you were employed by the Company and the denominator
of which is twelve and (D) accrued vacation pay;
(2) Subsection (b) of Section 4 shall be deleted in its entirety
and subsections (c), (d), (e), and (f) shall be relettered (b), (c),
(d), and (e), respectively.
Upon your confirmation of your agreement with the amendment to the
Agreement set forth above by signing and returning to the Secretary of the
Company the copy of this letter provided, such amendment shall take effect
immediately.
Very truly yours,
CARTER-WALLACE, INC.
--------------------------
Chairman of the Board
Confirmed and agreed this
___ day of January, 2000
------------------------
T. Rosie Albright
<PAGE>
EXHIBIT 10.22(a)
January 27, 2000
Stephen R. Lang, Esq.
1020 Park Avenue, Apt. 2D
New York, New York 10028
Dear Steve:
Reference is made to the letter agreement, dated as of June 4, 1998,
between Carter-Wallace, Inc. (the "Company") and you (the "Agreement") relating
to certain compensation arrangements in the event of a pending or threatened
Change in Control (as defined in the Agreement). The Board of Directors of the
Company has determined that it is appropriate to amend Section 4 of the
Agreement to clarify how the pro-rated bonus referred to therein for the year in
which termination of employment occurs would be calculated.
Accordingly, upon confirmation by you of your agreement thereto, the
Agreement shall be amended in the following respects:
(1) Clause (i) of Section 4(a) of the Agreement shall be amended
to read in its entirety as follows:
(i) The sum of (A) the full amount due to you and not
theretofore paid for base salary up to the date of such
termination, (B) the amount of any accrued but unpaid bonus on
account of the last full fiscal year preceding the date of such
termination, (C) an amount in lieu of a bonus for the year in
which the termination of your employment occurs determined by
multiplying the greater of (x) the target bonus (based on assumed
attainment of 100% of the performance objectives) for the year in
which the termination occurs and (y) the highest bonus earned by
you in any of the three full fiscal years preceding the year in
which the termination occurs by a fraction, the numerator of which
is the number of months (treating any partial month as a full
month for this purpose) in the year in which termination occurs
during which you were employed by the Company and the denominator
of which is twelve and (D) accrued vacation pay;
(2) Subsection (b) of Section 4 shall be deleted in its entirety
and subsections (c), (d), (e), and (f) shall be relettered (b), (c),
(d), and (e), respectively.
Upon your confirmation of your agreement with the amendment to the
Agreement set forth above by signing and returning to the Secretary of the
Company the copy of this letter provided, such amendment shall take effect
immediately.
Very truly yours,
CARTER-WALLACE, INC.
--------------------------
Chairman of the Board
Confirmed and agreed this
___ day of January, 2000
------------------------
Stephen R. Lang
<PAGE>
EXHIBIT 10.23
CARTER-WALLACE, INC.
CONSULTING AGREEMENT
FOR HENRY H. HOYT, JR
<PAGE>
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT by and between CARTER-WALLACE, INC., a
Delaware corporation (the "Company"), and Henry H. Hoyt, Jr. ("Executive") shall
become effective as of _________ __, 1999 (the "Effective Date").
W I T N E S S E T H
WHEREAS, Executive has served the Company in the position of Chairman
of the Board and Chief Executive Officer and, in those positions, Executive has
made substantial contributions to the success of the Company;
WHEREAS, the Company wishes to secure the services of Executive for a
period of years in the event that Executive retires from employment with the
Company, and to otherwise promote stability and continuity in management and in
any management transition; and
WHEREAS, the Executive desires to accept the benefits and obligations
of this Agreement during his continued employment and during the period
following employment during which consulting services are to be provided
hereunder, subject to the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
adequacy of which the Company and Executive each hereby acknowledge, the Company
and Executive hereby agree as follows:
1. DEFINITIONS.
(a) "Cause" shall mean (i) the willful and material breach of Sections
7 or 8 of this Agreement by Executive; (ii) Executive's conviction of a felony;
or (iii) Executive's engagement in conduct that constitutes willful gross
neglect or willful gross misconduct in carrying out his duties as an employee of
the Company or as a consultant (under Section 3 of this Agreement), which
results in material harm to the financial condition or reputation of the
Company. For purposes of this Agreement, an act or failure to act on Executive's
part shall be considered "willful" if it was done or omitted to be done by
Executive not in good faith, and shall not include any act or failure to act
resulting from any incapacity of Executive. Notwithstanding the foregoing, a
termination for "Cause" shall not take effect unless Executive has been given
written notice by the Company of its intention to terminate Executive for
"Cause," such notice (A) to state in detail the particular act or acts or
failure or failures to act that constitute the grounds on which the proposed
termination for "Cause" is based and (B) to be given within 90 days of the
Company's learning of such act or acts or failure or failures to act. Executive
shall have 20 days after the date that such written notice has been given in
which to cure such conduct, to the extent such cure is possible. If Executive
fails to cure such conduct, Executive shall then be entitled to a hearing before
the Board of Directors of the Company (the "Board") at which Executive and his
counsel are entitled to appear. Such hearing shall be held within 25 days of
such notice to Executive, provided Executive requests such hearing within 10
days of the written notice from the Company of the intention to terminate
Executive for "Cause." If, within five days following such hearing, Executive is
furnished written notice by the Board confirming that, in its judgment, grounds
for "Cause" on the basis of the original notice exist, Executive shall thereupon
be terminated for "Cause."
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<PAGE>
(b) A "Change in Control" shall be deemed to have occurred if, after
the Effective Date:
(i) any Person (other than the Company, any trustee or other
fiduciary holding securities under any employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company immediately prior to the occurrence with
respect to which the evaluation is being made in substantially the same
proportions as their ownership of the common stock of the Company)
becomes the Beneficial Owner (except that a Person shall be deemed to
be the Beneficial Owner of all shares that any such Person has the
right to acquire pursuant to any agreement or arrangement or upon
exercise of conversion rights, warrants or options or otherwise,
without regard to the sixty day period referred to in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
or any Significant Subsidiary (as defined below), representing 25% or
more of the combined voting power of the Company's or such Subsidiary's
then outstanding securities; provided, however, that such event shall
not constitute a Change in Control unless or until the percentage of
such securities owned beneficially, directly or indirectly, by such
Person is equal to or more than all such securities owned beneficially,
directly or indirectly, by the Hoyt Family;
(ii) during any period of two consecutive years (or shorter period
beginning on the Effective Date), individuals who at the beginning of
such period constitute the Board, and any new director (other than a
director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (i), (iii) or
(iv) of this paragraph) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved but excluding for
this purpose any such new director whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or Person other than the
Board, cease for any reason to constitute at least a majority of the
Board; provided, however, that such event shall not constitute a Change
in Control unless or until the percentage of voting securities of the
Company owned beneficially, directly or indirectly, by the Hoyt Family
is less than 50% of all such outstanding securities;
(iii) the consummation of a merger or consolidation of the Company
or any subsidiary or subsidiaries owning directly or indirectly all or
substantially all of the consolidated assets of the Company
(individually and collectively, a "Significant Subsidiary") with any
other entity, other than a merger or consolidation which would result
in the voting securities of the Company or a Significant Subsidiary
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving or resulting entity) more than 50% of the combined
voting power of the surviving or resulting entity outstanding
immediately after such merger or consolidation;
-3-
<PAGE>
(iv) the stockholders of the Company approve a plan or agreement
for the sale or disposition of all or substantially all of the
consolidated assets of the Company (other than such a sale or
disposition immediately after which such assets will be owned directly
or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the common stock of the Company
immediately prior to such sale or disposition), in which case the Board
shall determine the effective date of the Change in Control resulting
therefrom; or
(v) any other event occurs which the Board determines, in its
discretion, would materially alter the structure of the Company or its
ownership.
For purposes of this definition:
(A) The term "Beneficial Owner" shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange
Act (including any successor to such Rule).
(B) The term "Exchange Act" means the Securities Exchange
Act of 1934, as amended from time to time, or any
successor act thereto.
(C) The term "Person" shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof, including
"group" as defined in Section 13(d) thereof.
(D) The term the "Hoyt Family" shall mean the family of
Henry H. Hoyt, Sr., his descendants, and members of such
descendants' families.
(c) "Consulting Term" shall have the meaning set forth in Section 3(a).
(d) "Continuation Period" shall mean any period following a Change in
Control during which Executive has been invited either (i) to continue
employment on terms similar to the terms of Executive's employment immediately
prior to the Change in Control or (ii) to perform or continue performing the
consulting services specified in Section 3 hereof during the Consulting Term,
provided that, in either case, Executive has agreed in writing to accept such
continued employment or consulting services arrangement. The Continuation Period
shall in any event end on the Executive's death or Disability.
(e) "Disability" shall mean the inability of Executive to perform the
services for the Company and its subsidiaries required by his employment with
the Company or pursuant to Section 3 hereof during the Consulting Term due to
any medically determinable physical and/or mental incapacity or disability which
is permanent.
-4-
<PAGE>
(f) "Good Reason" shall mean (i) the assignment to Executive of any
duties inconsistent in any respect with Executive's position (including status,
offices, titles and reporting relationships), authority, duties or
responsibilities as (A) a Director and/or the Chairman of the Board while
Executive serves in those capacities during the Consulting Term (including any
failure of Executive to be elected or appointed as a Director or Chairman of the
Board unless Executive shall have declined to serve or continue to serve as a
Director or Chairman of the Board) or (B) a consultant performing services in
accordance with Section 3 hereof, or any other action by the Company that
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith that is remedied by the Company promptly after receipt of
notice thereof given by Executive; (ii) a change in the location where
consulting services are to be performed outside the area described in Section
3(b) of this Agreement; (iii) any failure of the Company to comply with and
satisfy Section 13(c) of this Agreement or any other material breach of this
Agreement by the Company; or (iv) the occurrence of a Change in Control, whether
during or prior to the Consulting Term and whether or not Executive has agreed
to any Continuation Period following such Change in Control.
(g) "Retirement" (and "Retire" or "Retired") shall mean a termination
of Executive's employment with the Company and its subsidiaries for any reason
other than death, Disability, or termination by the Company for Cause; provided,
however, that a termination which follows a Change in Control that resulted in
or will result in payment to Executive under Section 6 shall not constitute a
"Retirement" for purposes of this Agreement. A voluntary termination of
employment by Executive, whether or not for Good Reason, will constitute a
Retirement unless it follows a Change in Control that resulted in or will result
in payment to Executive under Section 6.
2. TERM OF AGREEMENT.
The term of this Agreement (the "Term") shall be the period commencing
on the Effective Date and ending on the date which is the earliest of five years
after termination of Executive's employment or Executive's death or Disability.
3. CONSULTING SERVICES.
The provisions of this Section 3 will apply during the Consulting Term:
(a) Consulting Term. For purposes of this Agreement, the "Consulting
Term" shall be the period from the date of Executive's Retirement during the
Term until the earliest of (i) the fifth anniversary of such Retirement date,
(ii) Executive's death or Disability, (iii) termination of Executive's
consulting services by the Company for Cause, (iv) termination of Executive's
consulting services by Executive for Good Reason, or (v) a Change in Control or,
if Executive has agreed to a Continuation Period relating to a Change in Control
(including a Change in Control prior to Retirement), at the end of such
Continuation Period. In the event that Executive's termination of employment
with the Company does not constitute a "Retirement," the Consulting Term shall
be deemed to have never commenced.
-5-
<PAGE>
(b) Services of Executive. During the Consulting Term, Executive shall
consult with the Company at the request of the Company during normal business
hours, subject to reasonable advance notice, up to a maximum of five days per
calendar month. Matters as to which Executive shall consult shall be specified
by the Board, a committee of the Board, or the Chief Executive Officer, and
Executive shall report to the Board, a Board committee, or the Chief Executive
Officer. Such services shall be performed at the location where Executive was
employed immediately prior to the commencement of the Consulting Term, or a
location less than 25 miles from such original location, provided that Executive
may agree in writing to designation of another location as the "original
location" for purposes of this provision. In addition, during the Consulting
Term the Company will use its best efforts to cause Executive to be nominated
for election or reelection, or appointment or reappointment, as a Director of
the Company and to be elected Chairman of the Board at any time Executive is
serving as a Director, unless Executive shall have declined to serve or continue
to serve as a Director or Chairman of the Board.
(c) Company Support. The Company will provide office space reasonably
acceptable to Executive for use in the performance of his consulting services,
together with secretarial assistance and other facilities and amenities
customary for the support of a provider of executive level services to the
Company.
(d) Non-Exclusive Commitment. Except to the extent Executive may be
limited under Sections 7 and 8, this Consulting Agreement and Executive's
commitment under this Section 3 shall not restrict or limit Executive during or
after the Consulting Term in making personal investments which are not in
conflict with his duties to the Company and managing personal and family
financial and legal affairs, (ii) in undertaking public speaking engagements,
and (iii) in serving as a director of (or similar position with) any other
business or any educational, charitable, community, civic, religious, or similar
type of organization, so long as such activities do not preclude or render
unlawful Executive's consulting service to the Company or service on the Board
or otherwise materially inhibit the performance of Executive's duties under this
Agreement or materially impair the business of the Company or its subsidiaries.
4. COMPENSATION FOR CONSULTING SERVICES.
As compensation for the services to be rendered hereunder by Executive
during the Consulting Term, the Company agrees to pay to Executive the
compensation set forth in this Section 4:
(a) Consulting Fee. The Company will pay to Executive during the
Consulting Term a monthly cash consulting fee equal to 60% of the greater of (i)
Executive's monthly salary in effect immediately prior to his Retirement or (ii)
Executive's monthly salary in effect at the Effective Date. Such consulting fee
shall be payable whether or not any consulting services are performed during the
month.
(b) Non-Employee Director's Compensation. Executive shall be entitled
to be paid any fees otherwise payable to a non-employee Director and, if
applicable, to a non-employee Chairman of the Board, while serving in such
capacities during the Consulting Term, and shall not be excluded from payment of
such fees on account of the payment of consulting fees or other compensation
under this Agreement.
-6-
<PAGE>
(c) Continued Participation in Employee Benefit Programs. To the extent
permitted under any plan, program, practice or policy of the Company, during the
Consulting Term the Company shall continue benefits to Executive and/or his
family at least equal to those which would have been provided in accordance with
the welfare benefit plans, programs, practices and policies of the Company if
Executive's employment had not been terminated, including medical, dental,
disability and group life insurance plans and programs, in accordance with the
most favorable plans, practices, programs or policies of the Company during the
90-day period immediately preceding Executive's Retirement or, if more
favorable, as in effect from time to time thereafter with respect to senior
executives of the Company and their families.
(d) Payment Upon Termination of Consulting Term Due to Change in
Control or Due to Termination by Executive for Good Reason. In the event that
the Consulting Term ends upon a Change in Control or upon the end of a
Continuation Period following a Change in Control, or upon any other event
(including death or Disability) during such a Continuation Period, or upon a
termination by Executive for Good Reason, the Company shall pay Executive a lump
sum cash amount equal to (i) the amount of the monthly consulting fee specified
in Section 4(a) times (ii) 60 minus the number of months for which the
consulting fee specified in Section 4(a) has been paid.
(e) Reimbursement of Expenses. The Company will promptly reimburse
Executive for all reasonable business expenses and disbursements incurred by
Executive in the performance of Executive's duties during the Consulting Term,
in a manner consistent with the Company's reimbursement policies for senior
executives as in effect from time to time.
5. ADDITIONAL COMPENSATION FOR ENTRY INTO AGREEMENT.
As additional consideration for Executive's entry into this Agreement,
the Company hereby agrees as follows:
(a) Terms of Outstanding Options. In the event of any termination of
Executive's employment other than a termination by the Company for Cause,
options granted by the Company and held by Executive at the termination date
shall become fully vested and exercisable, and following such termination of
Executive's employment, such options shall remain exercisable for the remainder
of the ten-year stated term of such options, without regard to such termination
by Executive.
(b) Terms of Outstanding Restricted Stock and Deferred Stock. In the
event of any termination of Executive's employment other than a termination by
the Company for Cause, restricted stock and deferred stock granted by the
Company and held by Executive at the termination date shall become fully vested
and non-forfeitable.
6. OBLIGATIONS OF THE COMPANY UPON A CHANGE IN CONTROL DURING
EXECUTIVE'S EMPLOYMENT.
During the Term, in the event of a Change in Control while Executive
remains employed by the Company, the Company shall pay to Executive a lump sum
cash amount as follows:
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<PAGE>
(i) If there is no Continuation Period relating to such
Change in Control, at the date of such Change in
Control Executive shall be paid the amount of the
monthly consulting fee that would have otherwise been
payable as specified in Section 4(a) times 60; or
(ii) If there is a Continuation Period, at the end of such
Continuation Period Executive shall be paid the
amount of the monthly consulting fee that would have
otherwise been payable as specified in Section 4(a)
times 60; provided, however, that if Executive has
agreed to a Continuation Period that extends after
termination of employment and which contemplates that
Executive will provide consulting services pursuant
to Section 3 hereof, no payment shall be made to
Executive pursuant to this Section 6 if Executive
will receive payment under Section 4(d).
7. COVENANT NOT TO COMPETE; NONSOLICITATION.
(a) Non-Competition. Except with the prior written consent of the
Company authorized by a resolution adopted by the Board, during the Term
(including while employed by the Company and during the Consulting Term, if
any), Executive will not, and will not permit any corporation, partnership or
other business entity in which Executive has a financial interest to, engage
directly or indirectly in any business which is competitive with the business of
the Company; provided that the ownership by Executive of not more than one
percent of the capital stock of any other corporation or a one percent interest
in any partnership or other business entity shall not be deemed to be a
violation of this Section 7.
(b) Non-Solicitation. During the Term (including while employed by the
Company and during the Consulting Term, if any), Executive shall not personally
(and shall not personally cause others to) (i) take any action to solicit or
divert any material business or customers away from the Company, (ii) induce
customers, potential customers, suppliers, agents or other persons under
contract or otherwise associated or doing business with the Company to
terminate, reduce or alter any such association or business, or (iii) induce any
person employed by the Company to (A) terminate such employment arrangement, (B)
accept employment with another person, or (C) interfere with the customers or
suppliers or otherwise with the Company in any manner.
8. SECRECY; NONDISPARAGEMENT.
(a) Non-Disclosure of Confidential Information. Executive recognizes
and acknowledges that the information (such as, but not limited to, financial
information), trade secrets, formulae, manufacturing methods, technical data,
know-how and secret processes of the Company as acquired and used by the Company
are special, valuable and unique assets of the Company. Executive will not,
during the Term or at any time thereafter, disclose any such information, trade
secrets, formulae, manufacturing methods, technical data, know-how and secret
processes ("confidential information") to any person, firm, corporation,
association or any other entity for any reason or purpose whatsoever, except as
required by law, without the prior written consent of the Company, unless such
information shall have previously become public knowledge.
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<PAGE>
(b) Non-Disparagement. Executive agrees that, during the Term and at
all times thereafter, he will not make any disparaging statements about the
Company or the directors, officers or employees of the Company; provided that
this Section 8(b) shall not apply to truthful testimony as a witness, compliance
with other legal obligations, or truthful assertion of or defense against any
claim or breach of this Agreement, or to Executive's truthful statements or
disclosures to officers or directors of the Company, and shall not require
Executive to make false statements or disclosures. The Company agrees that,
during the Term and at all times thereafter, neither the directors nor the
officers of the Company nor any spokesperson for the Company shall make any
disparaging statements about Executive; provided that this Section 8(b) shall
not apply to truthful testimony as a witness, compliance with other legal
obligations, truthful assertion of or defense against any claim of breach of
this Agreement, or truthful statements or disclosures to Executive, and shall
not require false statements or disclosures to be made.
9. EXCISE TAX GROSS-UP. If Executive becomes entitled to one or more
payments (including, without limitation, the vesting of any non-cash benefit or
property), whether pursuant to the terms of this Agreement or any other plan,
arrangement, or agreement with the Company (all such amounts, exclusive of
additional payments pursuant to this Section 9, being referred to herein as the
"Total Payments"), which are or become subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any
similar tax that may hereafter be imposed) (the "Excise Tax"), the Company shall
pay to Executive at the time specified below an additional amount (the "Gross-Up
Payment") such that the net amount retained by Executive, after reduction for
(x) any Excise Tax (including any penalties or interest thereon) on the Total
Payments and on the Gross-Up Payment and (y) any federal, state, or local income
or employment tax on the Gross-Up Payment, shall be equal to the sum of (a) the
Total Payments, and (b) an amount equal to the product of any deductions
disallowed for federal, state, or local income tax purposes because of the
inclusion of the Gross-Up Payment in Executive's adjusted gross income
multiplied by the highest applicable marginal rate of federal, state, or local
income taxation, respectively, for the calendar year in which the Gross-Up
Payment is to be made.
For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) the Total
Payments shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless, and except to the extent that, in the written opinion of independent tax
counsel or auditors of nationally recognized standing selected by the Company
and reasonably acceptable to Executive ("Independent Advisors"), the Total
Payments do not constitute parachute payments, or such excess parachute payments
in excess of the base amount within the meaning of Section 280G(b)(3) of the
Code represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code or are otherwise not subject to the
Excise Tax; and (ii) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Independent Advisors in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. If more than one
Gross-Up Payment is made (including for this purpose any parachute excise tax
gross-up payment pursuant to the terms of any other plan, arrangement, or
agreement with the Company), the amount of each Gross-Up Payment shall be
computed so as not to duplicate any prior Gross-Up Payment.
-9-
<PAGE>
For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed (A) to pay federal income taxes at the highest
marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made; (B) to pay any applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in which
the Gross-Up Payment is to be made, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes if paid in such year (determined without regard to limitations on
deductions based upon the amount of Executive's adjusted gross income); and (C)
to have otherwise allowable deductions for federal, state, and local income tax
purposes at least equal to those disallowed because of the inclusion of the
Gross-Up Payment in Executive's adjusted gross income.
The Gross-Up Payment shall be paid on or before the earlier of (i) the
30th day after it has been determined that the Total Payments (or any portion
thereof) are subject to the Excise Tax, or (ii) the date on which the Excise Tax
becomes due and payable to the taxing authorities; provided, however, that if
the amount of such Gross-Up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to Executive on such day
an estimate, as determined by the Independent Advisors, of the minimum amount of
such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined. In the event that the amount of the
estimated payments exceeds the amount subsequently determined by the Independent
Advisors to have been due, Executive shall repay to the Company the amount of
such excess, plus interest at the rate provided in Section 1274(b)(2)(B) of the
Code, within five days following the Company's demand therefor.
In the event that the Excise Tax is subsequently determined, in a final
judicial determination or a final administrative settlement to which Executive
is a party (a "Final Determination"), to be less than the amount taken into
account hereunder at the time the Gross-Up Payment is made, Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined (but, if previously paid to the taxing authorities,
not prior to the time the amount of such reduction is refunded to Executive or
otherwise realized as a benefit by Executive), the portion of the Gross-Up
Payment that would not have been paid if such Excise Tax as finally determined
had been applied in initially calculating the Gross-Up Payment, plus interest on
the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined in a Final
Determination to exceed the amount taken into account hereunder at the time the
Gross-Up Payment is made (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest and penalties payable with respect to such excess) at the
time that the amount of such excess is finally determined.
-10-
<PAGE>
The Company shall have the right to control all proceedings with the
Internal Revenue Service that may arise in connection with the determination and
assessment of any Excise Tax and, at its sole option, the Company may pursue or
forego any and all administrative appeals, proceedings, hearings, and
conferences with any taxing authority in respect of such Excise Tax (including
any interest or penalties thereon); provided, however, that the Company's
control over any such proceedings shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder, and Executive shall be
entitled to settle or contest any other issue raised by the Internal Revenue
Service or any other taxing authority. Executive shall cooperate with the
Company in any proceedings relating to the determination and assessment of any
Excise Tax and shall not take any position or action that would materially
increase the amount of any Gross-Up Payment hereunder.
10. RELEASE. Executive agrees that, as a condition to receipt of the
payments and benefits provided hereunder upon termination of employment with the
Company or termination of Executive's consulting services, Executive will
execute a release agreement, in a form reasonably satisfactory to the Company
and Executive, releasing any and all claims arising out of Executive's
employment or consulting relationship (other than enforcement of this Agreement,
Executive's rights under any of the Company's incentive compensation and
employee benefit plans and programs to which Executive is entitled under this
Agreement or otherwise, and any claim for any tort for personal injury not
arising out of or related to Executive's termination of employment or service).
11. REMEDIES. In the event of a breach or threatened breach by
Executive of the provisions of Section 7 or Section 8 of this Agreement, the
Company shall be entitled to seek an injunction restraining Executive from
violating either of said provisions, or any other remedy, including the recovery
of damages from Executive. If Executive shall breach any of the provisions of
Section 7 or Section 8 of this Agreement, nothing herein shall be construed as
preventing the Company from withholding any payment or payments required to be
made hereunder to Executive.
12. ASSISTANCE IN LITIGATION. During the Term and at all times
thereafter until the death or Disability of Executive, Executive shall, upon
reasonable notice, furnish such information and proper assistance to the Company
as may reasonably be required by the Company in connection with any litigation
in which it or any of its subsidiaries or affiliates is or may become a party.
The Company will promptly reimburse Executive for all reasonable business
expenses and disbursements incurred by Executive in providing such information
and assistance in connection with litigation.
13. SUCCESSORS.
(a) Nonassignable by Executive. This Agreement is personal to Executive
and, without the prior written consent of the Company, shall not be assignable
by Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by Executive's
legal representatives.
-11-
<PAGE>
(b) Company Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.
(c) Obligations of Successor. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise.
14. NOTICES. All communications hereunder shall be in writing and
delivered or mailed by registered mail to the Company at 1345 Avenue of the
Americas, New York, New York 10105, Attention: Board of Directors, and to
Executive, at 1345 Avenue of the Americas, New York, New York 10105, unless
another address has been given to the other party hereto in writing.
15. INTERPRETATION. No provision of this Agreement may be altered or
waived except in writing and executed by the other party hereto. This Agreement
constitutes the entire contract between the parties hereto and supersedes all
prior agreements, written or oral, relating to Executive's severance benefits
from the Company and post-termination consulting services, to the extent such
prior agreements are not consistent with this Agreement. No party shall be bound
in any manner by any warranties, representations or guarantees, except as
specifically set forth in this Agreement. This Agreement shall be interpreted
under the laws of the State of New York, without regard to principles of
conflicts of laws.
16. ARBITRATION. The parties agree that any dispute or controversy
arising under or in connection with this Agreement shall be submitted to and
determined by arbitration in New York, New York in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and agree
to be bound by the decision in any such arbitration provision.
17. OTHER BENEFITS. Nothing in this Agreement shall be interpreted as
reducing or eliminating any benefits to which Executive or Executive's
beneficiaries are entitled, without regard to this Agreement, under any plan or
program of the Company following a termination of employment or termination of
consulting services for any reason.
18. NO DUTY TO MITIGATE. In the event of any termination of employment
or termination of consulting services triggering benefits under this Agreement,
Executive shall be under no obligation to seek other employment, and there shall
be no offset against any amounts due to Executive under this Agreement on
account of the remuneration attributable to any subsequent employment that
Executive may obtain. Any amounts due under this Agreement upon termination of
employment or consulting services are in the nature of severance payments, or
liquidated damages, or both, and are not in the nature of a penalty.
19. FEES AND EXPENSES. The Company shall pay fees and expenses
reasonably incurred by Executive as a result of Executive's seeking to obtain or
enforce any right or benefit provided by this Agreement, promptly and from time
to time, at Executive's request as such fees and expenses are incurred unless
Executive's actions in such regard are determined to be frivolous or in bad
faith.
-12-
<PAGE>
IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company
has caused this instrument to be duly executed as of the day and year first
above written.
CARTER-WALLACE, INC
By:
----------------------
Name:
Title:
EXECUTIVE
----------------------
Henry H. Hoyt, Jr.
-13-
<PAGE>
<TABLE>
<S> <C> <C>
1. Definitions............................................................ 1
2. Term of Agreement...................................................... 4
3. Consulting Services.................................................... 4
(a) Consulting Term........................................................ 4
(b) Services of Executive.................................................. 4
(c) Company Support........................................................ 5
(d) Non-Exclusive Commitment............................................... 5
4. Compensation for Consulting Services................................... 5
(a) Consulting Fee......................................................... 5
(b) Non-Employee Director's Compensation................................... 5
(c) Continued Participation in Employee Benefit Programs................... 5
(d) Payment Upon Termination of Consulting Term Due to Change in
Control or Due to Termination by Executive for Good Reason............. 6
(e) Reimbursement of Expenses.............................................. 6
5. Additional Compensation for Entry Into Agreement....................... 6
(a) Terms of Outstanding Options........................................... 6
(b) Terms of Outstanding Restricted Stock and Deferred Stock............... 6
6. Obligations of the Company upon a Change in Control During
Executive's Employment................................................. 6
7. Covenant Not to Compete; Nonsolicitation............................... 7
(a) Non-Competition........................................................ 7
(b) Non-Solicitation....................................................... 7
8. Secrecy; Nondisparagement.............................................. 7
(a) Non-Disclosure of Confidential Information............................. 7
(b) Non-Disparagement...................................................... 7
9. Excise Tax Gross-Up.................................................... 8
10. Release................................................................ 9
11. Remedies............................................................... 10
12. Assistance in Litigation............................................... 10
13. Successors............................................................. 10
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(a) Nonassignable by Executive............................................. 10
(b) Company Successors and Assigns......................................... 10
(c) Obligations of Successor............................................... 10
14. Notices................................................................ 10
15. Interpretation......................................................... 10
16. Arbitration............................................................ 11
17. Other Benefits......................................................... 11
18. No Duty to Mitigate.................................................... 11
19. Fees and Expenses...................................................... 11
</TABLE>
<PAGE>
EXHIBIT 10.23(a)
January 27, 2000
Mr. Henry H. Hoyt, Jr.
Carter-Wallace, Inc.
1345 Avenue of the Americas
New York, New York 10105
Dear Harry:
Reference is made to the Consulting Agreement, dated as of July 31,
1999, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement").
The Board of Directors of the Company has determined that it is appropriate to
amend Section 6(i) of the Agreement to clarify the manner in which your
compensation for the period preceding termination would be paid in the event
your employment is terminated following a Change in Control (as defined in the
Agreement) and there is no Continuation Period (as defined in the Agreement)
relating to such Change in Control.
Accordingly, upon confirmation by you of your agreement thereto, Clause
(i) of Section 6 of the Agreement shall be amended to read in its entirety as
follows:
(i) If there is no Continuation Period relating to such Change in
Control, at the date of such Change in Control Executive shall be paid
the amount of the monthly consulting fee that would have otherwise been
payable as specified in Section 4(a) times 60 plus the sum of (A) the
full amount due to Executive and not theretofore paid for base salary
up to the date of such Change in Control, (B) the amount of any accrued
but unpaid bonus on account of the last full fiscal year preceding the
date of such Change in Control and (C) an amount in lieu of a bonus for
the year in which the Change in Control occurs determined by
multiplying the greater of (x) the target bonus (based on assumed
attainment of 100% of the performance objectives) for the year in which
the Change in Control occurs and (y) the highest bonus earned by
Executive in any of the three full fiscal years preceding the year in
which the Change in Control occurs by a fraction, the numerator of
which is the number of months (treating any partial month as a full
month for this purpose) in the year in which Change in Control occurs
during which Executive was employed by the Company and the denominator
of which is twelve; or
<PAGE>
Mr. Henry H. Hoyt, Jr. -2- January 27, 2000
Upon your confirmation of your agreement with the amendment to the
Agreement set forth above by signing and returning to the Secretary of the
Company the copy of this letter provided, such amendment shall take effect
immediately.
Very truly yours,
CARTER-WALLACE, INC.
--------------------------
President
Confirmed and agreed this
___ day of January, 2000
------------------------
Henry H. Hoyt, Jr.
<PAGE>
EXHIBIT 10.24
January 1, 1999
Mr. Thomas G. Gerstmyer
12 Alexis Court
P.O. Box 132
Holmdel, New Jersey 07733
Dear Tom:
Carter-Wallace, Inc. (the "Company") recognizes that your contribution
to the success of the Company has been substantial and wishes to reinforce and
encourage your continued attention and dedication to your assigned duties
without distraction by entering into compensation arrangements with you that
will provide you with financial security in the event of a pending or threatened
Change in Control (as defined below). In order to accomplish these objectives,
the Company has entered into this letter agreement (the "Agreement").
1. Certain Definitions.
(a) "Cause" shall mean (i) the willful and material breach of Sections
5 or 6 of this Agreement by you; (ii) your conviction of a felony; or (iii) your
engagement in conduct that constitutes willful gross neglect or willful gross
misconduct in carrying out your duties under this Agreement, resulting, in
either case, in material harm to the financial condition or reputation of the
Company. For purposes of this Agreement, an act or failure to act on your part
shall be considered "willful" if it was done or omitted to be done by you not in
good faith, and shall not include any act or failure to act resulting from any
incapacity of you. Notwithstanding the foregoing, a termination for "cause"
shall not take effect unless you have been given written notice by the Company
of its intention to terminate you for "cause," such notice (A) to state in
detail the particular act or acts or failure or failures to act that constitute
the grounds on which the proposed termination for "cause" is based and (B) to be
given within 90 days of the Company's learning of such act or acts or failure or
failures to act. You shall have 20 days after the date that such written notice
has been given to you in which to cure such conduct, to the extent such cure is
possible. If you fail to cure such conduct, you shall then be entitled to a
hearing before the Board of Directors of the Company (the "Board") at which you
and your counsel are entitled to appear. Such hearing shall be held within 25
days of such notice to you, provided you request such hearing within 10 days of
the written notice from the Company of the intention to terminate you for
"cause". If, within five days following such hearing, you are furnished written
notice by the Board confirming that, in its judgment, grounds for "cause" on the
basis of the original notice exist, you shall thereupon be terminated for
"cause."
<PAGE>
(b) A "Change in Control" shall be deemed to have occurred if:
(i) any Person (other than the Company, the Hoyt family, any
trustee or other fiduciary holding securities under any employee
benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company immediately prior to the
occurrence with respect to which the evaluation is being made in
substantially the same proportions as their ownership of the common
stock of the Company) becomes the Beneficial Owner (except that a
Person shall be deemed to be the Beneficial Owner of all shares that
any such Person has the right to acquire pursuant to any agreement or
arrangement or upon exercise of conversion rights, warrants or options
or otherwise, without regard to the sixty day period referred to in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company or any Significant Subsidiary (as defined
below), representing 25% or more of the combined voting power of the
Company's or such Subsidiary's then outstanding securities; provided,
however, that such event shall not constitute a Change in Control
unless or until the percentage of such securities owned beneficially,
directly or indirectly, by such Person is equal to or more than all
such securities owned beneficially, directly or indirectly, by the Hoyt
Family;
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
clause (i), (iii) or (iv) of this paragraph) whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the two-year
period or whose election or nomination for election was previously so
approved but excluding for this purpose any such new director whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an
individual, corporation, partnership, group, associate or other entity
or Person other than the Board, cease for any reason to constitute at
least a majority of the Board; provided, however, that such event shall
not constitute a Change in Control unless or until the percentage of
voting securities of the Company owned beneficially, directly or
indirectly, by the Hoyt Family is less than 50% of all such outstanding
securities;
(iii) the consummation of a merger or consolidation of the
Company or any subsidiary or subsidiaries owning directly or indirectly
all or substantially all of the consolidated assets of the Company
(individually and collectively, a "Significant Subsidiary") with any
other entity, other than a merger or consolidation which would result
in the voting securities of the Company or a Significant Subsidiary
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities
of the surviving or resulting entity) more than 50% of the combined
voting power of the surviving or resulting entity outstanding
immediately after such merger or consolidation;
(iv) the stockholders of the Company approve a plan or
agreement for the sale or disposition of all or substantially all of
the consolidated assets of the Company (other than such a sale or
disposition immediately after which such assets will be owned directly
or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the common stock of the Company
immediately prior to such sale or disposition), in which case the Board
shall determine the effective date of the Change in Control resulting
therefrom; or
-2-
<PAGE>
(v) any other event occurs which the Board determines, in its
discretion, would materially alter the structure of the Company or its
ownership.
For purposes of this definition:
(A) The term "Beneficial Owner" shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange
Act (including any successor to such Rule).
(B) The term "Exchange Act" means the Securities Exchange
Act of 1934, as amended from time to time, or any
successor act thereto.
(C) The term "Person" shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof, including
"group" as defined in Section 13(d) thereof.
(D) The term the "Hoyt Family" shall mean the family of
Henry H. Hoyt, Sr., his descendants, and members of such
descendants' families.
(c) The "Effective Date" shall be the date on which a Change in Control
occurs; provided, however, that if your employment with the Company is
terminated prior to the date on which a Change in Control occurs and it is
reasonably demonstrated that such termination was at the request of a third
party that has taken steps reasonably calculated to effect a Change in Control
or otherwise arose in connection with or anticipation of a Change in Control,
then for all purposes of this Agreement the "Effective Date" shall be the date
immediately prior to the date of such termination.
(d) "Good Reason" shall mean (i) the assignment to you of any duties
inconsistent in any respect with your position (including status, offices,
titles and reporting relationships), authority, duties or responsibilities as
contemplated by Section 3(a) of this Agreement or any other action by the
Company that results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied by the Company
promptly after receipt of notice thereof given by you; (ii) the transfer or
attempted assignment of you without your consent to a location outside the area
described in Section 3(a)(ii) of this Agreement or the assignment to you of
duties that require that you be absent from such location on business for more
than the average number of days of business-related travel in the preceding
three fiscal years; or (iii) any failure of the Company to comply with and
satisfy Section 10(c) of this Agreement or any other material breach of this
Agreement by the Company.
2. Employment Period. The period commencing on the Effective Date and
ending on the second anniversary of such date or on such earlier date of
termination as provided herein shall be referred to herein as the "Employment
Period". The Company hereby agrees to continue you in its employ, and you hereby
agree to remain in the employ of the Company, during the Employment Period.
-3-
<PAGE>
3. Terms of Employment.
(a) Position and Duties. During the Employment Period, (i) your
position, status, authority, duties and responsibilities shall be at least equal
to those of the position held by you immediately prior to the Effective Date and
(ii) your services shall be performed at the location where you were employed
immediately preceding the Effective Date or any office or location less than
twenty-five (25) miles from such location. During the Employment Period, you
agree to devote your best efforts to the service of the Company and the
performance of such duties and responsibilities.
(b) Compensation.
(i) Base Salary. During the Employment Period, you shall
receive a base salary ("Base Salary") at an annual rate at least equal
to the highest annual base salary paid to you by the Company with
respect to any of the three fiscal years immediately preceding the year
in which the Effective Date occurs or, if greater, the base salary in
effect for the year in which the Effective Date occurs.
(ii) Annual Bonus. In addition to Base Salary, you shall be
awarded, for each fiscal year during the Employment Period, an annual
bonus (an "Annual Bonus") in cash at least equal to the greater of (x)
the highest bonus earned by you in any of the three fiscal years
immediately preceding the fiscal year in which the Effective Date
occurs and (y) the target bonus (based on the assumed attainment of
100% of the performance objectives) for the fiscal year in which the
Effective Date occurs.
(iii) Benefit Plans. During the Employment Period, you and
your family shall be entitled to participate in, on a basis consistent
with your position with the Company, and shall receive benefits under
plans, practices, policies and programs provided by the Company
(including, without limitation, retirement, pension, profit sharing,
stock option and long-term incentive plans, and death and life
insurance benefits and medical insurance programs) at least as
favorable as the most favorable of such plans, practices, policies and
programs in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable, as in effect from
time to time thereafter with respect to senior executives of the
Company and their families. In the case of a retirement on or after the
Effective Date, all of your then outstanding options to purchase common
stock of the Company shall become immediately vested and exercisable
for the remaining term of the option and all of your then outstanding
restricted and deferred stock grants relating to common stock of the
Company shall become immediately vested. For purposes of this
Agreement, "retire" or "retirement" shall mean your voluntary
termination of employment with the Company after attaining age 65 or,
if earlier, the date which you are eligible to terminate employment
with the Company and promptly thereafter commence receiving retirement
benefits pursuant to any pension plan maintained by the Company without
any reduction for the failure to attain a prescribed age.
(iv) Vacation. During the Employment Period, you shall be
entitled to paid vacation in accordance with the policies of the
Company in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable, as in effect from
time to time thereafter with respect to other senior executives of the
Company.
-4-
<PAGE>
4. Obligations of the Company upon Termination.
If, during the Employment Period, the Company shall terminate your
employment other than for Cause, or if you shall terminate your employment for
Good Reason:
(a) Lump-Sum Payment. The Company shall pay to you in a lump sum in
cash within 7 days after the date of termination the aggregate of the following
amounts:
(i) The full amount due to you and not theretofore paid for
base salary up to the date of such termination, the amount of any
accrued but unpaid bonus on account of the last full fiscal year
preceding the date of such termination and accrued vacation pay;
(ii) Two times your Final Compensation. For purposes of this
Agreement, Final Compensation means the sum of (A) your annual base
salary as in effect immediately prior to such termination and (B) the
greater of (x) the highest bonus earned by you in any of the three full
fiscal years preceding the date of termination and (y) the target bonus
(based on the assumed attainment of 100% of the performance objectives)
for the year in which the termination occurs; and
(iii) An amount equal to the increase in the lump-sum benefit
to which you would be entitled under the Carter-Wallace, Inc. Executive
Pension Benefits Plan (assuming for this purpose that you had elected a
lump-sum benefit payable upon your termination) if the calculation of
the gross benefit thereunder (but not of any offset amounts) were
modified by (A) increasing your number of years of benefit service by
three, (B) substituting your Final Compensation for your "Modified
Average Compensation" in the benefit formula and (C) treating such
gross benefit as fully vested.
Notwithstanding the foregoing, the aggregate lump-sum payment made pursuant to
clauses (ii) and (iii) above shall in no event be less than $1,000,000.
(b) Pro-Rated Bonus. As soon as practicable following the end of the
fiscal year in which the termination of your employment occurs, the Company
shall pay to you a pro-rated bonus reflecting the number of months (treating any
partial month as a full month for this purpose) in such fiscal year during which
you were employed.
(c) Welfare Benefits. For two years following the termination of your
employment, or such longer period as any plan, program, practice or policy may
provide, the Company shall continue benefits to you and/or your family at least
equal to those which would have been provided in accordance with the welfare
benefit plans, programs, practices and policies of the Company if your
employment had not been terminated, including medical, dental, disability and
group life insurance plans and programs, in accordance with the most favorable
plans, practices, programs or policies of the Company during the 90-day period
immediately preceding the Effective Date or, if more favorable, as in effect
from time to time thereafter with respect to other senior executives of the
Company and their families and, for purposes of eligibility for retiree benefits
pursuant to such plans, practices, programs and policies, you shall be
considered to have remained employed until the end of the Employment Period and
to have retired on the last day of such period.
-5-
<PAGE>
(d) Stock Options and Awards. All of your then outstanding options to
purchase common stock of the Company shall become immediately vested and
exercisable for the remaining term of the option and all of your then
outstanding restricted and deferred stock grants relating to common stock of the
Company shall become immediately vested.
(e) Outplacement. The Company agrees to provide you with reasonable
outplacement assistance through the Company's Human Resources Department. The
Company further agrees to reimburse you for reasonable job search expenses. All
job search expenses in excess of one hundred dollars ($100.00) are subject to
prior approval by the Company.
(f) Release. You agree, as a condition to receipt of the termination
payments and benefits provided for in this Section 4, that you will execute a
release agreement, in a form reasonably satisfactory to the Company and you,
releasing any and all claims arising out of your employment (other than
enforcement of this Agreement, your rights under any of the Company's incentive
compensation and employee benefit plans and programs to which you are entitled
under this Agreement or otherwise, and any claim for any tort for personal
injury not arising out of or related to your termination of employment).
5. Covenant Not to Compete; Nonsolicitation.
(a) Except with the prior written consent of the Company authorized by
a resolution adopted by the Board, while employed by the Company, you will not,
and will not permit any corporation, partnership or other business entity in
which you have a financial interest to, engage directly or indirectly in any
business which is competitive with the business of the Company; provided that
the ownership by you of not more than one percent of the capital stock of any
other corporation or a one percent interest in any partnership or other business
entity shall not be deemed to be a violation of this Section 5.
(b) While employed by the Company and for a period of one year after
the termination of your employment for any reason, you shall not personally (and
shall not personally cause others to) (i) take any action to solicit or divert
any material business or customers away from the Company, (ii) induce customers,
potential customers, suppliers, agents or other persons under contract or
otherwise associated or doing business with the Company to terminate, reduce or
alter any such association or business, or (iii) induce any person employed by
the Company to (A) terminate such employment arrangement, (B) accept employment
with another person, or (C) interfere with the customers or suppliers or
otherwise with the Company in any manner.
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<PAGE>
6. Secrecy; Nondisparagement.
(a) You recognize and acknowledge that the information (such as, but
not limited to, financial information), trade secrets, formulae, manufacturing
methods, technical data, know-how and secret processes of the Company as
acquired and used by the Company are special, valuable and unique assets of the
Company. You will not, while employed by the Company or at any time thereafter,
disclose any such information, trade secrets, formulae, manufacturing methods,
technical data, know-how and secret processes to any person, firm, corporation,
association or any other entity for any reason or purpose whatsoever without the
prior written consent of the Company, unless such information shall have
previously become public knowledge.
(b) You agree that you will not make any disparaging statements about
the Company or the directors, officers or employees of the Company; provided
that this Section 6(b) shall not apply to truthful testimony as a witness,
compliance with other legal obligations, or truthful assertion of or defense
against any claim or breach of this Agreement, or to your truthful statements or
disclosures to officers or directors of the Company, and shall not require you
to make false statements or disclosures. The Company agrees that neither the
directors nor the officers of the Company nor any spokesperson for the Company
shall make any disparaging statements about you; provided that this Section 6(b)
shall not apply to truthful testimony as a witness, compliance with other legal
obligations, truthful assertion of or defense against any claim of breach of
this Agreement, or truthful statements or disclosures to you, and shall not
require false statements or disclosures to be made.
7. Excise Tax Gross-Up. If you become entitled to one or more payments
(including, without limitation, the vesting of any non-cash benefit or
property), whether pursuant to the terms of this Agreement or any other plan,
arrangement, or agreement with the Company (all such amounts, exclusive of
additional payments pursuant to this Section 7, being referred to herein as the
"Total Payments"), which are or become subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any
similar tax that may hereafter be imposed) (the "Excise Tax"), the Company shall
pay to you at the time specified below an additional amount (the "Gross-Up
Payment") such that the net amount retained by you, after reduction for (x) any
Excise Tax (including any penalties or interest thereon) on the Total Payments
and on the Gross-Up Payment and (y) any federal, state, or local income or
employment tax on the Gross-Up Payment, shall be equal to the sum of (a) the
Total Payments, and (b) an amount equal to the product of any deductions
disallowed for federal, state, or local income tax purposes because of the
inclusion of the Gross-Up Payment in your adjusted gross income multiplied by
the highest applicable marginal rate of federal, state, or local income
taxation, respectively, for the calendar year in which the Gross-Up Payment is
to be made.
For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) the Total
Payments shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless, and except to the extent that, in the written opinion of independent tax
counsel or auditors of nationally recognized standing selected by the Company
and reasonably acceptable to you ("Independent Advisors"), the Total Payments do
not constitute parachute payments, or such excess parachute payments in excess
of the base amount within the meaning of Section 280G(b)(3) of the Code
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code or are otherwise not subject to the
Excise Tax; and (ii) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Independent Advisors in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. If more than one
Gross-Up Payment is made (including for this purpose any parachute excise tax
gross-up payment pursuant to the terms of any other plan, arrangement, or
agreement with the Company), the amount of each Gross-Up Payment shall be
computed so as not to duplicate any prior Gross-Up Payment.
-7-
<PAGE>
For purposes of determining the amount of the Gross-Up Payment, you
shall be deemed (A) to pay federal income taxes at the highest marginal rate of
federal income taxation for the calendar year in which the Gross-Up Payment is
to be made; (B) to pay any applicable state and local income taxes at the
highest marginal rate of taxation for the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes if paid in
such year (determined without regard to limitations on deductions based upon the
amount of your adjusted gross income); and (C) to have otherwise allowable
deductions for federal, state, and local income tax purposes at least equal to
those disallowed because of the inclusion of the Gross-Up Payment in your
adjusted gross income.
The Gross-Up Payment shall be paid on or before the earlier of (i) the
30th day after it has been determined that the Total Payments (or any portion
thereof) are subject to the Excise Tax, or (ii) the date on which the Excise Tax
becomes due and payable to the taxing authorities; provided, however, that if
the amount of such Gross-Up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to you on such day an
estimate, as determined by the Independent Advisors, of the minimum amount of
such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined. In the event that the amount of the
estimated payments exceeds the amount subsequently determined by the Independent
Advisors to have been due, you shall repay to the Company the amount of such
excess, plus interest at the rate provided in Section 1274(b)(2)(B) of the Code,
within five days following the Company's demand therefor.
In the event that the Excise Tax is subsequently determined, in a final
judicial determination or a final administrative settlement to which you are a
party (a "Final Determination"), to be less than the amount taken into account
hereunder at the time the Gross-Up Payment is made, you shall repay to the
Company, at the time that the amount of such reduction in Excise Tax is finally
determined (but, if previously paid to the taxing authorities, not prior to the
time the amount of such reduction is refunded to you or otherwise realized as a
benefit by you), the portion of the Gross-Up Payment that would not have been
paid if such Excise Tax as finally determined had been applied in initially
calculating the Gross-Up Payment, plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined in a Final Determination to exceed the amount taken
into account hereunder at the time the Gross-Up Payment is made (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (plus any interest and penalties payable with
respect to such excess) at the time that the amount of such excess if finally
determined.
-8-
<PAGE>
The Company shall have the right to control all proceedings with the
Internal Revenue Service that may arise in connection with the determination and
assessment of any Excise Tax and, at its sole option, the Company may pursue or
forego any and all administrative appeals, proceedings, hearings, and
conferences with any taxing authority in respect of such Excise Tax (including
any interest or penalties thereon); provided, however, that the Company's
control over any such proceedings shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder, and you shall be entitled
to settle or contest any other issue raised by the Internal Revenue Service or
any other taxing authority. You shall cooperate with the Company in any
proceedings relating to the determination and assessment of any Excise Tax and
shall not take any position or action that would materially increase the amount
of any Gross-Up Payment hereunder.
8. Remedies. In the event of a breach or threatened breach by you of
the provisions of Section 5 or Section 6 of this Agreement, the Company shall be
entitled to seek an injunction restraining you from violating either of said
provisions, or any other remedy, including the recovery of damages from you. If
you shall breach any of the provisions of Section 5 or Section 6 of this
Agreement, nothing herein shall be construed as preventing the Company from
withholding any payment or payments required to be made hereunder to you.
9. Assistance in Litigation. You shall, upon reasonable notice, furnish
such information and proper assistance to the Company as may reasonably be
required by the Company in connection with any litigation in which it or any of
its subsidiaries or affiliates is or may become a party.
10. Successors.
(a) This Agreement is personal to you and, without the prior written
consent of the Company, shall not be assignable by you otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by your legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise.
11. Notices. All communications hereunder shall be in writing and
delivered or mailed by registered mail to the Company at 1345 Avenue of the
Americas, New York, New York 10105, Attention: Board of Directors, and to you,
at your address set forth above, unless another address has been given to the
other party hereto in writing.
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<PAGE>
12. Interpretation. No provision of this Agreement may be altered or
waived except in writing and executed by the other party hereto. This Agreement
constitutes the entire contract between the parties hereto and cancels and
supersedes all prior agreements, written or oral, relating to your employment
with the Company. No party shall be bound in any manner by any warranties,
representations or guarantees, except as specifically set forth in this
Agreement. This Agreement shall be interpreted under the laws of the State of
New York.
13. Arbitration. The parties agree that any dispute or controversy
arising under or in connection with this Agreement shall be submitted to and
determined by arbitration in New York, New York in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and agree
to be bound by the decision in any such arbitration provision.
14. Other Benefits. Nothing in this Agreement shall be interpreted as
reducing or eliminating any benefits to which you or your beneficiaries are
entitled, without regard to this Agreement, under any plan or program of the
Company following a termination of employment for any reason.
15. No Duty to Mitigate. In the event of any termination of employment
under Section 4 of this Agreement, you shall be under no obligation to seek
other employment, and there shall be no offset against any amounts due to you
under this Agreement on account of the remuneration attributable to any
subsequent employment that you may obtain. Any amounts due under Section 4 are
in the nature of severance payments, or liquidated damages, or both, and are not
in the nature of a penalty.
16. Fees and Expenses. The Company shall pay fees and expenses
reasonably incurred by you as a result of your seeking to obtain or enforce any
right or benefit provided by this Agreement, promptly and from time to time,
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<PAGE>
at your request as such fees and expenses are incurred unless your actions in
such regard are determined to be frivolous or in bad faith.
Very truly yours,
CARTER-WALLACE, INC.
By ___________________________
Chairman of the Board
Agreed and consented to as of
the date set forth above
------------------------------
Thomas G. Gerstmyer
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EXHIBIT 10.24(a)
January 27, 2000
Mr. Thomas G. Gerstmyer
12 Alexis Court
P.O. Box 132
Holmdel, New Jersey 07733
Dear Tom:
Reference is made to the letter agreement, dated as of January 1, 1999,
between Carter-Wallace, Inc. (the "Company") and you (the "Agreement") relating
to certain compensation arrangements in the event of a pending or threatened
Change in Control (as defined in the Agreement). The Board of Directors of the
Company has determined that it is appropriate to amend Section 4 of the
Agreement to clarify how the pro-rated bonus referred to therein for the year in
which termination of employment occurs would be calculated.
Accordingly, upon confirmation by you of your agreement thereto, the
Agreement shall be amended in the following respects:
(1) Clause (i) of Section 4(a) of the Agreement shall be
amended to read in its entirety as follows:
(i) The sum of (A) the full amount due to you and not
theretofore paid for base salary up to the date of such
termination, (B) the amount of any accrued but unpaid bonus on
account of the last full fiscal year preceding the date of
such termination, (C) an amount in lieu of a bonus for the
year in which the termination of your employment occurs
determined by multiplying the greater of (x) the target bonus
(based on assumed attainment of 100% of the performance
objectives) for the year in which the termination occurs and
(y) the highest bonus earned by you in any of the three full
fiscal years preceding the year in which the termination
occurs by a fraction, the numerator of which is the number of
months (treating any partial month as a full month for this
purpose) in the year in which termination occurs during which
you were employed by the Company and the denominator of which
is twelve and (D) accrued vacation pay;
<PAGE>
(2) Subsection (b) of Section 4 shall be deleted in its
entirety and subsections (c), (d), (e), and (f) shall be relettered
(b), (c), (d), and (e), respectively.
Upon your confirmation of your agreement with the amendment to the
Agreement set forth above by signing and returning to the Secretary of the
Company the copy of this letter provided, such amendment shall take effect
immediately.
Very truly yours,
CARTER-WALLACE, INC.
--------------------------
Chairman of the Board
Confirmed and agreed this
___ day of January, 2000
------------------------
Thomas G. Gerstmyer
