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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 1st day of August, 2000, by
and between Blyth, Inc., a Delaware corporation (together with its successors
and assigns permitted under this Agreement, the "Company"), and Robert B.
Goergen (the "Executive") .
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, the Company desires to continue to employ the Executive and
to enter into an agreement embodying the terms of such employment (this
"Agreement"), and the Executive desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is mutually acknowledged, the Company and
the Executive (individually a "Party" and together the "Parties") agree as
follows:
1. DEFINITIONS.
(a) "Affiliate" of a person or other entity shall mean a person
or other entity that, directly or indirectly, controls, is controlled by, or
is under common control with, the person, or other entity, specified.
(b) "Base Salary" shall mean an annualized salary of not less
than (a) $600,000 during the first three years of the Employment Period and
(b) thereafter, one-half of the annualized Base Salary as in effect on the
last day of the Initial Term, in each case as adjusted as contemplated by
Section 4 below. For periods prior to the Employment Period, the term "Base
Salary" shall mean the annualized compensation that was paid to the Executive
during such period, exclusive of any annual incentive or bonus awards."
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean:
(i) the Executive is convicted of a felony
involving moral turpitude; or
(ii) the Executive is guilty of willful gross
neglect or willful gross misconduct in carrying out his duties
under this Agreement, resulting, in either case, in material
economic harm to the Company, unless the Executive
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believed in good faith that such act or nonact was in the best
interests of the Company.
(e) "Constructive Termination Without Cause" shall mean
termination by the Executive of his employment at his initiative following
the occurrence of any of the following events without his consent:
(i) a reduction in the Executive's then current
Base Salary, or target bonus opportunity as a percentage of
Base Salary, or the termination or material reduction of any
perquisite described in Sections 7 or 8 or any other employee
benefit or perquisite enjoyed by him (other than, in the case
of such other employee benefits or perquisites, as part of an
across-the-board reduction of such other employee benefits or
perquisites applicable to all executive officers of the
Company);
(ii) the failure to elect or reelect the
Executive to any of the positions described in Section 3
(including membership on the Board) or the removal of him from
any such position;
(iii) (A) during the Initial Term, a material
diminution in the Executive's duties, responsibilities or
authority or the assignment to the Executive of duties which
are materially inconsistent with his duties or which
materially impair the Executive's ability to function as the
Chairman and Chief Executive Officer of the Company, and (B)
during the last three years of the Term of Employment, the
assignment to the Executive of duties that are materially
inconsistent with those that could reasonably be expected to
be assigned to, and performed by, a part-time senior executive
of a major corporation;
(iv) the relocation of the Company's principal
office, or the Executive's own office location, as assigned to
him by the Company, to a location outside the State of
Connecticut or more than 50 miles from Greenwich, Connecticut;
or
(v) the failure of the Company to obtain the
assumption in writing of its obligation to perform this
Agreement by any successor (whether direct or indirect, by
purchase, merger, consolidation, sale or similar transaction)
to all or substantially all of the business and/or assets of
the Company within 15 calendar days after the closing of any
such event.
Following written notice given as set forth in Section 21, below, from the
Executive of one of the events described above, the Company shall have 15
calendar days in which to cure. If the Company fails to cure, the Executive's
Constructive Termination Without Cause shall become effective on the 16th
calendar day following the written notice. The Executive's good faith
determination that there has been a Constructive Termination Without Cause shall
be conclusive
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unless the Company bears the burden of proving that the Executive was acting
in bad faith or unreasonably.
(f) "Disability" shall mean the Executive's inability, due to
physical or mental incapacity, to substantially perform his duties and
responsibilities under this Agreement, as determined by a medical doctor
selected by the Company and the Executive, for a period of six months or
longer. If the Parties cannot agree on a medical doctor, each Party shall
select a medical doctor, and the two doctors shall select a third who shall
be deemed to be the medical doctor selected by the Company and the Executive
for purposes hereof.
(g) "Effective Date" shall mean the date as of which this
Agreement was entered into.
(h) "Employment Period" shall have the meaning ascribed thereto
in Section 2 below.
(i) "Fair Market Value" shall mean the average daily value of a
share of Stock as traded on the stock market on which the Company's Common
Stock is principally traded (which is currently the New York Stock Exchange)
during the applicable period, based on the mean of the high and low reported
sales prices on each day during such period.
(j) "Initial Term" shall mean that portion of the first three
years of the Employment Period during which the Executive continues to be
employed hereunder.
(k) "Registration Rights Agreement" shall mean the Registration
Rights Agreement between the Company and the Executive in the form of Exhibit
A hereto.
(l) "Stock" shall mean the common stock, par value $0.02 per
share, of the Company.
(m) "Term of Employment" shall mean that portion of the
Employment Period during which the Executive continues to be employed
hereunder, including as the non-executive Chairman of the Board.
2. EMPLOYMENT PERIOD.
The Employment Period shall begin on the Effective Date, and shall
continue until the last day prior to sixth anniversary of the Effective Date.
Notwithstanding the foregoing, the Executive's employment hereunder may be
terminated by either Party prior to the end of the Employment Period, subject
to the provisions of Section 9.
3. POSITION, DUTIES AND RESPONSIBILITIES.
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(a) Commencing on the Effective Date and continuing for the
first three years of the Employment Period, the Executive shall be employed
as the Chairman of the Board, President and Chief Executive Officer of the
Company and be responsible for the general management of the affairs of the
Company. During the remainder of the Employment Period, the Executive shall
be employed as the non-executive Chairman of the Board of the Company and
shall have such duties and responsibilities for the management of the Company
as shall be assigned to him from time to time by the Board of Directors of
the Company; provided that such duties and responsibilities shall not be
inconsistent with those that could reasonably be expected to be performed by
a part-time senior executive of a major corporation. The Executive has
heretofore been elected as a member of the Board of Directors of the Company.
The Executive, in carrying out his duties under this Agreement, shall report
to the Board. During the Initial Term, the Executive shall devote his full
business time and attention to the business and affairs of the Company and
shall use his best efforts, skills and abilities to promote its interests.
During the remainder of the Term of Employment, the Executive shall devote
one-half of his business time and attention to the business and affairs of
the Company and shall use his best efforts, skills and abilities to promote
its interests.
(b) Nothing herein shall preclude the Executive from (i)
serving on the boards of directors of a reasonable number of other
corporations subject to the approval of the Board in each case (which
approval has been given as to the boards on which the Executive is currently
serving as a director), which approval shall not be unreasonably withheld,
(ii) serving, to the extent consistent with past practice, on the boards of a
reasonable number of educational and/or charitable organizations, (iii)
engaging in charitable activities and community affairs, and (iv) managing
his personal investments and affairs, provided that such activities set forth
in this Section 3(b) do not materially interfere with the proper performance
of his duties and responsibilities under Section 3(a).
4. BASE SALARY.
During the Term of Employment, the Executive shall be paid the
Base Salary, which shall be payable in accordance with the regular payroll
practices of the Company. The Base Salary shall be reviewed annually for
increase in the discretion of the Board.
5. ANNUAL INCENTIVE AWARD.
During the Term of Employment, the Executive shall participate
in the Blyth, Inc. Annual Incentive Compensation Plan or any successor annual
incentive award plan of the Company. Under such plan, the Executive shall
have a target bonus opportunity each year equal to at least 100% of his then
Base Salary, payable in that amount if the performance goals established for
the relevant year are met. If such performance goals are not met, the
Executive shall receive a lesser amount (or nothing) as determined in
accordance with applicable plan guidelines. If such performance goals, are
exceeded, the Executive may receive a greater amount as determined in
accordance with applicable plan guidelines. The Executive shall be paid
his
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annual incentive awards no later than other senior executives of the
Company are paid their annual incentive awards.
6. SUPPLEMENTAL PENSION.
(a) Subject to vesting, as hereinafter provided, the Executive
shall be entitled to receive, during his lifetime, a supplemental pension
benefit, commencing on the sixth anniversary of the Effective Date, equal to
50% of his Final Average Compensation, but not in excess of $500,000 per
annum. To provide for the payment of such annuity, the Company agrees to
establish a so-called "rabbi trust" in customary form for the benefit of the
Executive and to contribute to such trust, promptly after the date hereof,
either a single life annuity insurance policy that insures the payment of
such annuity, as aforesaid, or monies sufficient to enable the trustee of
such trust to purchase such a policy. For purposes of this Section 6, Final
Average Compensation shall mean the sum of the Base Salary and annual
incentive award payments paid in respect of the three calendar years of the
Executive's employment by the Company, out of the five calendar years of such
employment ending on the last day of the Initial Term (or, if earlier, the
last day of the Term of Employment), during which he received the highest
level of such payments, divided by three.
(b) Except as provided in Section 9 hereof, the Executive's
entitlement to such supplemental pension benefit shall vest on a daily pro
rata basis over a six year period commencing as of the Effective Date, with
the entitlement fully vested on the last day prior to the sixth anniversary
of the Effective Date; consequently, by way of illustration, if the Executive
voluntarily terminates his employment thirty-six months from the Effective
Date, other than due to Disability or the occurrence of a Constructive
Termination Without Cause, the Executive will only be entitled to a
supplemental pension benefit in the form of a single life annuity commencing
on the sixth anniversary of the Effective Date equal to 25% of his Final
Average Compensation, but not in excess of $250,000 per annum.
7. EMPLOYEE BENEFIT PROGRAMS.
During the Term of Employment, the Executive shall be entitled
to participate in all employee pension and welfare benefit plans and programs
made available to the Company's senior level executives or to its employees
generally, as such plans or programs may be in effect from time to time,
including, without limitation, pension, profit sharing, savings and other
retirement plans or programs, 401(k), medical, dental, hospitalization,
short-term and long-term disability and life insurance plans, accidental
death and dismemberment protection, travel accident insurance, and any other
pension or retirement plans or programs and any other employee welfare
benefit plans or programs that may be sponsored by the Company from time to
time, including any plans that supplement the above-listed types of plans or
programs, whether funded or unfunded.
8. Reimbursement of Business and Other Expenses; Perquisites;
Vacations.
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(a) The Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all business expenses incurred in
connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy. The Company shall pay
all reasonable financial consultant and legal fees and expenses incurred by
the Executive in connection with the negotiation of the Executive's
employment arrangements with the Company.
(b) During the Term of Employment, the Company will (i) provide
a car and driver for the Executive's use, consistent with past practice, in
fulfilling his responsibilities as Chief Executive Officer or as the
non-executive Chairman of the Board and as a member of various boards of
directors/trustees of corporations and educational and charitable
organizations, (ii) make available, without charge, a portion of the
Company's executive office space (or the equivalent), consistent with past
practice, for use by The Goergen Foundation, The Ropart Group Limited and
their Affiliates and (iii) permit the Executive to use the Company's aircraft
(subject to the obligation to reimburse the Company for the value of the
personal use thereof determined in accordance with Treasury Regulation
1.61-21(g)).
(c) During the Term of Employment, the Executive shall be
entitled to four weeks paid vacation per year of employment, which shall
accrue and otherwise be subject to the Company's vacation policy for senior
executives.
9. TERMINATION OF EMPLOYMENT.
(a) Termination Due to Death. In the event that the Executive's
employment is terminated due to his death, his estate or his beneficiaries,
as the case may be, shall be entitled to the following benefits:
(i) continuation of Base Salary through the end
of the Employment Period and for a period of 24 months
thereafter; the Base Salary during the 24 months following the
Employment Period shall be the Base Salary that was payable
during the final year of the Employment Period;
(ii) annual incentive award for the year in which
the Executive's death occurs, based on the original target
award performance for such year, payable in a single
installment promptly after his death;
(iii) continued participation by the Executive's
spouse during her lifetime in the Company's medical and dental
plans, or, in the event that the Executive's spouse is not
eligible to participate in such plans or such plans are
terminated after the termination of the Executive's
employment, in plans (including plans maintained solely for
the benefit of the Executive's spouse) that provide benefits
that are equivalent to those provided under each of the
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Company's medical and dental plans on the date the Executive's
employment is terminated;
(iv) the supplemental pension benefit provided in
Section 6 shall fully vest; and
(v) upon the death of both the Executive and his
spouse, the Company shall, upon the demand of the Executive's
or his spouse's estate or his or her beneficiaries, as the
case may be, (A) buy back from such estate or such
beneficiaries 7,500,000 shares of Stock (or such lesser amount
as may be specified in such demand) within ninety days of such
demand at the Fair Market Value thereof during the calendar
quarter ending immediately prior to the date of such demand,
or register the public offer and sale by such estate or such
beneficiaries of 7,500,000 shares of Stock (or such lesser
amount as may be specified in such demand) pursuant to the
Registration Rights Agreement; PROVIDED, HOWEVER, that the
Company shall not have any obligation either to buy back
shares of Stock or to register the public offer and sale
thereof if such estate or such beneficiaries can then sell all
shares of Stock owned by it or them in a public offering in an
unlimited number without registration of such sale under the
Securities Act of 1933, as amended.
(b) Termination Due to Disability. In the event that the
Executive's employment is terminated due to his Disability, he shall be
entitled to the following benefits:
(i) disability benefits in accordance with the
long-term disability program then in effect for senior
executives of the Company;
(ii) continuation of Base Salary (less disability
benefit payments) through the end of the Employment Period and
for a period of 24 months thereafter; the Base Salary during
the 24 months following the Employment Period shall be the
Base Salary that was payable during the final year of the
Employment Period;
(iii) annual incentive award for the year in which
the Executive's Disability occurs, based on the original
target award performance for such year, payable in a single
installment promptly after the Executive's employment is
terminated;
(iv) continued participation by the Executive
during his lifetime in all employee welfare benefit plans and
programs that are generally made available to senior officers
of the Company or its employees, or, in the event that the
Executive is not eligible to participate in such plans or such
plans are terminated after the date the Executive's employment
is terminated, in plans (including plans maintained solely for
the benefit of the Executive) that provide
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benefits that are equivalent to those provided under each of
the Company's employee welfare benefit plans and programs on
the date the Executive's employment is terminated;
(v) continued participation by the Executive's
spouse during her lifetime in the Company's medical and dental
plans, or, in the event that the Executive's spouse is not
eligible to participate in such plans or such plans are
terminated after the date the Executive's employment is
terminated, in plans (including plans maintained solely for
the benefit of the Executive's spouse) that provide benefits
that are equivalent to those provided under each of the
Company's medical and dental plans on the date the Executive's
employment is terminated;
(vi) continuation of the perquisites described in
Section 8(b) during the Executive's lifetime, except that the
Executive's personal use of the Company's aircraft shall be
limited to 50 hours of flight time per annum;
(vii) the supplemental pension benefit provided in
Section 6 shall fully vest; and
(viii) upon the death of the Executive and his
spouse, the Company shall, upon the demand of the Executive's
or his spouse's estate or his or her beneficiaries, as the
case may be, (A) buy back from such estate or such
beneficiaries 7,500,000 shares of Stock (or such lesser amount
as may be specified in such demand) within ninety days of such
demand at the Fair Market Value thereof during the calendar
quarter ending immediately prior to the date of such demand or
register the public offer and sale by such estate or such
beneficiaries of 7,500,000 shares of Stock (or such lesser
amount as may be specified in such demand) pursuant to the
Registration Rights Agreement; PROVIDED, HOWEVER, that the
Company shall not have any obligation either to buy back
shares of Stock or to register the public offer and sale
thereof if such estate or such beneficiaries can then sell all
shares of Stock owned by it or them in a public offering in an
unlimited number without registration of such sale under the
Securities Act of 1933, as amended.
In no event shall a termination of the Executive's employment for
Disability occur until the Party terminating his employment gives written notice
to the other Party in accordance with Section 21 below.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take
effect unless the provisions of this paragraph (i) are
complied with. The Executive shall be given written notice by
the Board of the intention to terminate him for Cause, such
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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 six months of the Board learning of such act
or acts or failure or failures to act. The Executive shall
have ten calendar days after the date that such written notice
has been given to the Executive in which to cure such conduct,
to the extent such cure is possible. If he fails to cure such
conduct, the Executive shall then be entitled to a hearing
before the Board. Such hearing shall be held within 15
calendar days of such notice to the Executive, provided he
requests such hearing within ten calendar days of the written
notice from the Board of the intention to terminate him for
Cause. If, within five calendar days following such hearing,
the Executive is furnished written notice by the Board
confirming that, in its judgment, grounds for Cause on the
basis of the original notice exist, he may thereupon be
terminated for Cause, provided that Cause has occurred.
(ii) In the event the Company terminates the
Executive's employment for Cause:
(1) the Executive shall be entitled to Base
Salary through the date of the termination;
and
(2) any unvested supplemental pension benefit to
which the Executive would otherwise be
entitled under Section 6 shall be forfeited.
(d) Termination Without Cause or Constructive Termination
Without Cause. In the event the Executive's employment is terminated by the
Company without Cause, other than due to Disability or death, or in the event
there is a Constructive Termination Without Cause, the Executive shall be
entitled to the following benefits:
(i) Continuation of Base Salary through the end
of the Employment Period;
(ii) annual incentive award for the year in which
the Executive's employment is terminated, based on the
original target award performance for such year, payable in a
single installment promptly after the Executive's employment
is terminated;
(iii) continued participation by the Executive
during his lifetime in all employee welfare benefit plans and
programs that are generally made available to senior officers
of the Company or its employees, or, in the event that the
Executive is not eligible to participate in such plans or such
plans are terminated after the date the Executive's employment
is terminated, in plans (including plans maintained solely for
the benefit of the Executive) that provide
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benefits that are equivalent to those provided under each of
the Company's employee welfare benefit plans and programs on
the date the Executive's employment is terminated;
(iv) continued participation by the Executive's
spouse during her lifetime in the Company's medical and dental
plans, or, in the event that the Executive's spouse is not
eligible to participate in such plans or such plans are
terminated after the date the Executive's employment is
terminated, in plans (including plans maintained solely for
the benefit of the Executive's spouse) that provide benefits
that are equivalent to those provided under each of the
Company's medical and dental plans on the date the Executive's
employment is terminated;
(v) continuation of the perquisites described in
Section 8(b) during the Executive's lifetime, except that the
Executive's personal use of the Company's aircraft shall be
limited to 50 hours of flight time per annum;
(vi) continued provision by the Company to the
Executive during his lifetime of executive office space and
secretarial support comparable to that made available to the
Executive during the Term of Employment;
(vii) the Company shall, upon the demand of the
Executive, buy back from the Executive 100,000 shares of the
Company's Common Stock at the end of each of the next four
calendar quarters following the end of the quarter in which
his employment was terminated at the Fair Market Value of such
Stock during such quarter;
(viii) the supplemental pension benefit provided in
Section 6 shall fully vest; and
(ix) upon the death of the Executive and his
spouse, the Company shall, upon the demand of the Executive's
or his spouse's estate or his or her beneficiaries, as the
case may be, (A) buy back from such estate or such
beneficiaries 7,500,000 shares of Stock (or such lesser amount
as may be specified in such demand) within ninety days of such
demand at the Fair Market Value thereof during the calendar
quarter ending immediately prior to the date of such demand or
register the public offer and sale by such estate or such
beneficiaries of 7,500,000 shares of Stock (or such lesser
amount as may be specified in such demand) pursuant to the
Registration Rights Agreement; PROVIDED, HOWEVER, that the
Company shall not have any obligation either to buy back
shares of Stock or to register the public offer and sale
thereof if such estate or such beneficiaries can then sell all
shares of Stock owned by it or them in a public offering in an
unlimited number without registration of such sale under the
Securities Act of 1933, as amended.
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(e) Voluntary Termination; Retirement.
(i) A termination of employment by the Executive
on his own initiative, other than a termination due to death
or Disability or a Constructive Termination Without Cause or
retirement following the end of the Term of Employment, shall
have the same consequences as provided in Section 9(c)(ii) for
a termination for Cause. A voluntary termination under this
Section 9(e) shall be effective 30 calendar days after prior
written notice is received by the Company.
(ii) The Executive may retire at any time
following the end of the Employment Period, in which event he
will be entitled to the benefits described in Section
9(d)(iii)-(vi) and (ix), as well as that described in Section
9(d)(viii).
(f) Other Termination Benefits. In the case of any of the
foregoing terminations, the Executive or his estate shall also be entitled to:
(i) the balance of any incentive awards due for
performance periods which have been completed, but which have
not yet been paid;
(ii) any expense reimbursements due the
Executive; and,
(iii) other benefits, if any, in accordance with
applicable plans and programs of the Company.
(g) No Mitigation; No Offset. In the event of any
termination of employment under this Section 9, the Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain.
(h) Nature of Payments. Any amounts due under this
Section 9 are in the nature of severance payments considered to be reasonable by
the Company and are not in the nature of a penalty.
(i) Adjustments in the Event of Stock Splits, etc. The
number of shares of Stock that are subject to Sections 9(a), (b) and (d) shall
be subject to appropriate adjustment in the event that the outstanding shares of
Common Stock of the Company are changed into a different number or class of
shares by reason of any stock split, stock dividend, reverse stock split,
reclassification, recapitalization or other similar transaction.
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(j) Anything to the contrary in Sections 9(a), (b) and
(d) notwithstanding, for a period not to exceed one hundred eighty (180) days
from the date of a demand that the Company buy back shares of Stock, the Company
shall not be obligated to buy back shares of Stock at any time when the Company,
in its good faith judgment, reasonably believes that the buy back of such shares
of Stock would materially and adversely affect (A) a pending or scheduled public
offering or private placement of securities of the Company, (B) an acquisition,
merger, consolidation or similar transaction by or of the Company, or (C)
preexisting and continuing negotiations, discussions or pending proposals with
respect to any of the foregoing transactions. Nothing contained in this Section
9(j) shall be deemed to limit the rights of the Company under the last paragraph
of Section 1.4 of the Registration Rights Agreement, except that the 180 day
period referred to therein shall be coterminous with the 180 day period referred
to herein.
10. CONFIDENTIALITY.
(a) The Executive agrees that he will not, at any time
during the Term of Employment or thereafter, disclose or use any trade secret,
proprietary or confidential information of the Company, or any subsidiary or
Affiliate of the Company, obtained during the course of his employment by the
Company, hereunder or otherwise, that is not already known to the public (other
than as a result of the Executive's violation of this Section 10(a), except as
required in the course of such employment or with the written permission of the
Company or, as applicable, any subsidiary or Affiliate of the Company or as may
be required by law, provided that, if the Executive receives legal process with
regard to disclosure of such information, he shall promptly notify the Company
and cooperate with the Company in seeking a protective order.
(b) The Executive agrees that at the time of the
termination of his employment with the Company, whether at the instance of the
Executive or the Company, and regardless of the reasons therefor, he will
deliver to the Company, and not keep or deliver to anyone else, any and all
notes, files, memoranda, papers and, in general, any and all physical matter
containing information that is significant to the conduct of the business of the
Company or any subsidiary or Affiliate of the Company which are in his
possession, except for any documents for which the Company or any subsidiary or
Affiliate of the Company has given written consent to removal at the time of the
termination of the Executive's employment and except for his personal rolodex,
phone book and similar items.
(c) The Executive agrees that the Company's remedies at
law would be inadequate in the event of a breach or threatened breach of this
Section 10; accordingly, the Company shall be entitled, in addition to its
rights at law, to an injunction and other equitable relief without the need to
post a bond.
11. NONCOMPETITION.
(a) Subject to the provisions of Section 11(b) below and
notwithstanding any other provisions of this Agreement, any and all payments
(except those made from Company
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sponsored tax-qualified pension or welfare plans), benefits or other
entitlements to which the Executive or his spouse may be eligible in
accordance with the terms hereof, may be forfeited, whether or not in pay
status, at the discretion of the Company, if the Executive at any time
without the consent of the Company establishes a relationship with a
competitor which is in conflict with or adverse to the interests of the
Company and its subsidiaries (a "Competitive Activity"). For purposes of this
Section 11, the term "establishes a relationship with a competitor" shall
mean founding, organizing, establishing, becoming associated with, becoming
employed by, rendering services to, consulting or acting as a consultant to,
serving as a director for, being a partner in or owning a substantial
interest in, as shareholder or otherwise, a business, entity or enterprise
which designs, develops, manufactures, produces, offers for sale or sells a
product or service which can be used as a substitute for, performs
substantially the same function as, is a practical alternative for, or is
generally intended to satisfy the same customer or client needs for, any
product or service which is designed, developed, manufactured, produced,
offered for sale or sold by the Company or its subsidiaries and which
generates revenues equal to 5% of the consolidated gross revenues of the
Company and its subsidiaries. The payments, benefits and other entitlements
hereunder are being made in part in consideration of the obligations of this
Section 11 and in particular the post-employment payments, benefits and other
entitlements are being made in consideration of, and dependent upon,
compliance with this Section 11(a).
(b) Anything in Section 11(a) to the contrary
notwithstanding, no forfeiture shall take place with respect to any payments,
benefits or entitlements hereunder or under any other award agreement, plan or
practice (i) if the Executive shall have been terminated without Cause or in the
event there is a Constructive Termination Without Cause, or, in all other
circumstances, (ii) unless the Company shall have first given the Executive
written notice of its intent to so forfeit or cancel any such payments, benefits
or entitlements, and Executive has not, within 30 calendar days of his receipt
of such notice, ceased such unpermitted Competitive Activity.
(c) Nothing in this Section 11 shall prohibit Executive
from being a passive owner of less than five percent of the outstanding common
stock, capital stock and equity of any firm, corporation or enterprise so long
as the Executive has no active participation in the management of business of
such firm, corporation or enterprise.
(d) If the restrictions stated herein are found by a
court to be unreasonable, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall revise
the restrictions contained herein to cover the maximum period, scope and area
permitted by law.
12. RESOLUTION OF DISPUTES.
Any disputes arising under or in connection with this
Agreement shall be resolved by third party mediation of the dispute and, failing
that, by binding arbitration, to be held in Connecticut, in accordance with the
rules and procedures of the American Arbitration
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Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Each Party shall bear his
or its own costs of the mediation, arbitration or litigation, except that the
Company shall bear all such costs if the Executive prevails in such
mediation, arbitration or litigation on any material issue.
13. ASSIGNABILITY; BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, heirs (in the case of the
Executive) and assigns. Subject to the provisions of Section 9(d) (relating to a
Constructive Termination Without Cause), rights or obligations of the Company
under this Agreement may be assigned or transferred by the Company pursuant to a
merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it reasonably can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law.
14. REPRESENTATION.
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person, firm or organization. The Executive represents that the
performance of his obligations under this Agreement will not violate any
agreement between him and any other person, firm or organization.
15. ENTIRE AGREEMENT.
This Agreement contains the entire understanding and agreement
between the Parties concerning the subject matter hereof and supersedes all
prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, between the Parties with respect thereto.
16. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and an authorized
officer of the Company. No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement to be performed
by such other Party shall be deemed a waiver of a similar or
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dissimilar condition or provision at the same or any prior or subsequent
time. Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be.
17. SEVERABILITY.
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by law
so as to achieve the purposes of this Agreement.
18. SURVIVORSHIP.
Except as otherwise expressly set forth in this Agreement, the
respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive's employment. This Agreement itself (as
distinguished from the Executive's employment) may not be terminated by either
Party without the written consent of the other Party.
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19. REFERENCES.
In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
20. GOVERNING LAW/JURISDICTION.
This Agreement shall be governed in accordance with the laws
of Connecticut without reference to principles of conflict of laws.
21. NOTICES.
All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (a) delivered
personally, (b) sent by certified or registered mail, postage prepaid, return
receipt requested or (c) delivered by overnight courier (provided that a written
acknowledgment of receipt is obtained by the overnight courier) to the party
concerned at the address indicated below or to such changed address as such
Party may subsequently give such notice of:
If to the Company: Blyth, Inc.
100 Field Point Road
Greenwich, CT 06830-6451
Attention: Vice President
Human Resources
If to the Executive: Mr. Robert B. Goergen
c/o Blyth, Inc.
100 Field Point Road
Greenwich, CT 06830-6451
22. HEADINGS.
The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in two or more counterparts.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date written above.
Blyth, Inc.
By: /s/ Jane Casey
----------------------
Its: Vice President
Human Resources
/s/ Robert B. Goergen
-------------------------
Robert B. Goergen
17
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EXHIBIT 10.10
EXHIBIT A
BLYTH, INC.
REGISTRATION RIGHTS AGREEMENT
AUGUST 1, 2000
----------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1.......................................................................1
REGISTRATION RIGHTS.............................................................1
1.1 CERTAIN DEFINITIONS...........................................1
1.2 REGISTRATION..................................................2
1.3 EXPENSES OF REGISTRATION......................................2
1.4 REGISTRATION PROCEDURES.......................................2
1.5 INDEMNIFICATION...............................................3
SECTION 2.......................................................................5
MISCELLANEOUS...................................................................5
2.1 GOVERNING LAW.................................................5
2.2 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF RIGHTS..................5
2.3 ENTIRE AGREEMENT; AMENDMENT; WAIVER...........................5
2.4 NOTICES, ETC..................................................5
2.5 DELAYS OR OMISSIONS...........................................6
2.6 RIGHTS; SEPARABILITY..........................................6
2.7 TITLES AND SUBTITLES..........................................6
2.8 COUNTERPARTS..................................................6
2.9 REMEDIES......................................................6
</TABLE>
ii
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BLYTH, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 1, 2000, by and between Blyth, Inc., a Delaware
corporation (the "Company"), and Robert B. Georgen (the "Holder").
WHEREAS, the Company and the Holder entered into an Employment
Agreement, dated as of August 1, 2000 (the "Employment Agreement");
WHEREAS, pursuant to Section 9 of the Employment Agreement,
following the later of the death of the Holder and the death of his spouse,
the Company is obligated, upon the demand of the Holder's or his spouse's
estate or his or her beneficiaries, as the case may be (the "Successors"),
(A) to buy back from the Successors a certain number of shares of common
stock of the Company, $0.02 par value per share ("Common Stock") within a
certain period of time following such demand or (B) to register the public
offer and sale by such Successors of a certain number of shares of Common
Stock; and
WHEREAS, the parties hereto desire to set forth the terms and
conditions that would be applicable in the event that the Company elected to
register the public offer and sale by such Successors of shares of Common
Stock.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties hereto agree as follows:
SECTION 1
REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
definitions shall apply:
"COMMISSION" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
promulgated thereunder, all as the same shall be in effect from time to time.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed), and the declaration or ordering of the effectiveness of
such registration statement.
"REGISTRATION EXPENSES" means all expenses incurred by the
Company in complying with Section 1.2, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
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Registration Expenses shall not include: Selling Expenses or other
compensation paid to underwriters or other agents or brokers to effect the
sale or the fees of counsel or accountants for the Successors.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, as shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions, and stock transfer taxes applicable to the sale of
Registrable Securities.
1.2 REGISTRATION.
(a) If at any time the Successors demand, pursuant to
Section 9 of the Employment Agreement, that the Company either buy back or
register the public offer and sale of shares of Common Stock, and the Company
elects to register the public offer and sale of such shares of Common Stock,
the Company shall promptly file a registration statement (the "Registration
Statement") providing for the sale by the Successors of such shares of Common
Stock (the "Registrable Securities"), shall qualify the offer and sale of the
Registrable Securities under applicable state securities laws, and shall use
all commercially reasonable efforts to keep such Registration Statement and
qualification continuously effective for a period beginning on the effective
date of such registration statement and ending on the date the distribution
described in the Registration Statement is complete.
(b) The Successors shall have the right to require
that such public offer and sale of the Registrable Securities be firmly
underwritten by underwriters selected by the Successors (subject to the
consent of the Company, which consent will not be unreasonably withheld);
provided, however, that if the Company and the Successors are unable to
obtain the commitment of such underwriters to firmly underwrite the offer,
then, in lieu of registering the public offer and sale of such Registrable
Securities, the Company shall buy back such Registrable Securities pursuant
to Section 9 of the Employment Agreement.
1.3 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with the registration, qualification or compliance pursuant to
Section 1.2 shall be borne by the Company; PROVIDED, HOWEVER, that in connection
with any registration of securities, the Company shall not be responsible for
the fees and costs of counsel or accountants for the Successors.
1.4 REGISTRATION PROCEDURES. If and whenever the Company elects to
effect the registration of Registrable Securities, the Company shall:
(a) Prepare and file with the Commission the Registration
Statement with respect to such Registrable Securities and use its diligent
efforts to cause the Registration Statement to become and remain effective as
provided herein.
(b) Prepare and file with the Commission such amendments
and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective and current and to comply with the provisions of the Securities Act
with respect to the sale of or other disposition of all Registrable Securities
covered by the Registration Statement, including such amendments and supplements
as may be necessary to reflect the intended method of disposition of the
prospective seller or sellers of such Registrable Securities during the
applicable periods as specified in Section 1.2.
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(c) Furnish to the Successors such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as such seller may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities.
(d) Notify the Successors at any time when a prospectus
relating to Registrable Securities covered by the Registration Statement is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing.
(e) In connection with any underwritten offering pursuant
to a registration statement filed pursuant to Section 1.2 hereof, enter into an
underwriting agreement in form reasonably necessary to effect the offer and sale
of the Common Stock, provided such underwriting agreement contains reasonable
and customary provisions.
The Successors shall not (until further notice) effect sales
of shares covered by the Registration Statement after receipt of telegraphic,
telecopied or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus, which
correction or updating shall be effected promptly after the giving of such
notice.
Notwithstanding the foregoing, for a period not to exceed one
hundred eighty (180) days, the Company shall not be obligated to prepare and
file, or be prevented from delaying or abandoning, or by written notice to the
Successors, may suspend the use of the Registration Statement pursuant to this
Agreement at any time when the Company, in its good faith judgment, reasonably
believes:
(i) that the filing thereof, at the time
requested, or the offering of Common Stock pursuant thereto,
would materially and adversely affect (A) a pending or
scheduled public offering or private placement of securities
of the Company, (B) an acquisition, merger, consolidation or
similar transaction by or of the Company, (C) preexisting and
continuing negotiations, discussions or pending proposals with
respect to any of the foregoing transactions, or (D) the
financial condition of the Company in view of the disclosure
of any pending or threatened litigation, claim, assessment or
governmental investigation which might be required thereby, or
(ii) that the failure to disclose any material
information with respect to the foregoing would cause a
violation of the Securities Act or the Exchange Act.
1.5 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) The Company will indemnify the Successors against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained, on the
effective date thereof, in any registration statement, any prospectus contained
therein, or any amendment or supplement thereto, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the
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<PAGE>
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, or any violation by
the Company of any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse the Successors
for any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability
or action; PROVIDED, HOWEVER that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged
untrue statement or omission, made in reliance upon and in conformity with
written information furnished to the Company by an instrument duly executed
by the Successors and stated to be specifically for use therein; PROVIDED,
FURTHER, that the Company shall not be liable to the Successors to the extent
that any such expense, claim, loss, damage or liability (or action or
proceeding, whether commenced or threatened, in respect thereof) results from
the fact that Registrable Securities were sold to a person to whom there was
not sent or given a copy of the Registration Statement or prospectus (as then
amended or supplemented).
(b) The Successors will indemnify the Company, each of
its directors and officers and its legal counsel and independent accountants,
each underwriter of the Company's securities covered by such a registration
statement, and each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof), including
any of the foregoing incurred in settlement of any litigation commenced or
threatened, arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained, on the effective date
thereof, in any such registration statement, any prospectus contained
therein, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in the light of the circumstances under
which they were made) not misleading, and will reimburse the Company, and
such directors, officers, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action,
in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by the Successors and stated to be specifically for use
therein; PROVIDED, HOWEVER, that the obligations of the Successors hereunder
shall be limited to an amount equal to the net proceeds to the Successors of
Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this
Section 1.5 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1.5 to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Notwithstanding anything to the contrary contained in this
Section 1.5(c), the Indemnified Party shall have the right to employ its own
counsel in any action, claim, litigation, proceeding or investigation, and the
fees and expenses thereof shall be borne by the Indemnified Party, unless the
Indemnified Party shall have reasonably concluded that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Indemnifying Party, in which case the Indemnifying Party shall
bear all of such Indemnified Party's legal and other fees and expenses which
arise in defense thereof.
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In such event, the Indemnifying Party shall not have the right to direct the
defense of such action, claim, litigation, proceeding or investigation on
behalf of the Indemnified Party.
(d) If the indemnification provided for in this
Section 1.5 is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying the Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party with respect to such loss, liability,
claim, damage or expense in the proportion that is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or the
omission (or alleged omission) to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
SECTION 2
MISCELLANEOUS
2.1 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without giving
effect to principles of conflicts of laws thereof.
2.2 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF RIGHTS. This Agreement
shall inure to the benefit of and be binding upon the Company and its successors
and assigns and the Holder and the Successors and their heirs and legal
representatives. The rights and benefits of the Holder and the Successors
hereunder may not be assigned to a transferee or assignee (other than by will or
by laws of descent and distribution), without the consent of the Company.
2.3 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement
constitutes the full and entire understanding and agreement among the parties
with regard to the subject hereof. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated, except by a written instrument
signed by the Company and the Holder or the Successors.
2.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally, (b) sent by certified or registered mail, postage prepaid,
return receipt requested or (c) delivered by overnight courier (provided that a
written acknowledgment of receipt is obtained by the overnight courier) to the
party concerned at the address indicated below or to such changed address as
such party may subsequently give such notice of:
If to the Company: Blyth, Inc.
100 Field Point Road
Greenwich, CT 06830-6451
Attention: Vice President
Human Resources
If to the Holder: Mr. Robert B. Goergen
c/o Blyth, Inc.
100 Field Point Road
Greenwich, CT 06830-6451
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2.5 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to the Successors (in any capacity hereunder),
upon any breach or default of the Company under this Agreement shall impair any
such right, power or remedy of the Successors nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default or be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of the Successors (in any capacity
hereunder) of any breach or default under this Agreement or any waiver on the
part of the Successors of any provisions or conditions of this Agreement must be
made in writing and shall be effective only to the extent specifically set forth
in such writing.
2.6 RIGHTS; SEPARABILITY. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
2.7 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing or interpreting this Agreement.
2.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2.9 REMEDIES. The parties to this Agreement acknowledge and agree
that a breach of any of the obligations of the Company or the Successors set
forth in this Agreement may not be compensable by payment of money damages and,
therefore, that the covenants of the foregoing set forth in this Agreement may
be enforced in equity by a decree requiring specific performance.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement effective as of the day and year first above written.
BLYTH, INC.
By: /s/ Jane Casey
-----------------------------
Title: Vice President
Human Resources
HOLDER
By: /s/ Robert B. Goergen
-----------------------------
Robert B. Georgen
8
