<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_______________________
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
Commission file number 1-8714
TAMBRANDS INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-1366500
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
777 Westchester Avenue
White Plains, New York 10604
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code, is 914-696-6000
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, par New York Stock Exchange
value $.25 per share; and Pacific Stock Exchange
Common Share Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ________
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FORM 10-K
(Facing Sheet Continuation)
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained in this Form 10-K, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of February 9, 1995 was
$1,514,220,120. (For this computation, the registrant has excluded the market
value of all shares of its Common Stock reported as beneficially owned by
officers and directors of the registrant; such exclusion shall not be deemed to
constitute an admission that any such person is an "affiliate" of the
registrant.)
As of March 15, 1995, 36,689,326 shares of the registrant's Common
Stock were outstanding.
Documents Incorporated by Reference
-----------------------------------
Part III of this Form 10-K incorporates by reference portions of the
definitive Proxy Statement for the registrant's annual meeting of shareholders
to be held on April 25, 1995, filed with the Securities and Exchange Commission
pursuant to Regulation 14A.
<PAGE>
PART I
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Item 1. Business
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General
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Tambrands Inc. (the "Company") has been manufacturing and marketing
menstrual tampons, which are sold under the trademark TAMPAX(R), since 1936. It
is the leading manufacturer and marketer of tampons in the world. The Company
operates in one business segment, personal care products. In recent years, the
Company has focused on its core TAMPAX tampon business worldwide and has been
expanding its international operations. The Company is placing an increased
emphasis on the development and marketing of new products. The Company has
manufacturing operations in seven countries. In 1994, TAMPAX tampons were sold
in over 150 countries. The Company's largest eight markets are the United
States, the United Kingdom, France, Canada, Spain, CIS (principally Russia and
Ukraine), Italy and Belgium.
The Company was incorporated under the laws of the State of Delaware in
1936. The Company's principal executive offices are located at 777 Westchester
Avenue, White Plains, New York 10604 (telephone number 914-696-6000).
Recent Developments
-------------------
Effective May 31, 1994, Edward T. Fogarty was appointed President and Chief
Executive Officer of the Company. Several other significant changes in senior
management also occurred during 1994. Michael K. Lorelli was appointed
Executive Vice President and President, North America/Latin America effective
August 31, 1994, Thomas J. Mason was appointed Group Vice President -
International effective October 18, 1994, and Thomas Soper, III was appointed
Senior Vice President - Corporate Human Resources and Communications effective
August 29, 1994.
In June 1989, the Company adopted a corporate strategy of concentrating on
its core TAMPAX tampon business. As part of this strategy, the Company
announced in December 1989 a major restructuring program designed to reduce
costs and improve performance. In December 1991, the Company announced a
program to restructure its worldwide manufacturing operations to improve
efficiency and reduce costs. The 1989 and 1991 programs have been completed. In
June 1993, the Company announced that it would provide a $30 million charge ($20
million after-tax) to provide for restructuring of manufacturing and
administrative operations and the cost of management changes, including the
adoption of a consolidated international management strategy. This program has
been virtually completed. See Note 6, "Restructuring and Other Charges,"
included in the Notes to Consolidated Financial Statements contained in item 8
of Part II hereof. These restructuring programs have included sales of the
Company's
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businesses that were not supportive of the Company's core activities,
substantial reductions in workforce and a reduction of approximately 50% in the
number of manufacturing plants.
The Company currently is engaged in an ongoing program of substantially
upgrading production equipment at its manufacturing facilities through further
automation and computerization. The Company's 1994 capital spending programs
were related to investments in equipment to improve product quality and
productivity, modernize production facilities and reduce costs. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" contained in item 7 of Part II hereof. The Company intends to
continue its efforts to achieve productivity improvements.
In 1989, the Company initiated a stock repurchase program. As of
December 31, 1994, the Company had spent approximately $436 million to purchase
approximately 7.6 million shares of its Common Stock under four repurchase
programs. The Company was authorized as of December 31, 1994 to purchase
approximately 300,000 additional shares. The Company will continue its
repurchases as conditions warrant.
In 1992, the Company established a commercial paper program under which it
may borrow up to $150 million for general corporate purposes. At December 31,
1994, $57 million was outstanding under this program. In addition, in 1993, the
Company established a $150 million Medium-Term Note program. At December 31,
1994, $60 million was outstanding under this program.
Products
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Menstrual tampons represent virtually all of the Company's sales. The
Company's largest selling tampon is the TAMPAX
flushable applicator tampon, which first became commercially
available in 1936. The Company also manufactures and sells (i) TAMPAX tampons
with plastic applicators in the United States and Canada; (ii) TAMPAX COMPAK(R)
tampons, with a compact all-plastic applicator, in the United States, Canada,
France, the United Kingdom and other countries in Europe; and (iii) TAMPAX
comfort shaped flushable applicator tampons, with an all-paper rounded-end
applicator and a slimmer design than the Company's standard product, in the
United States, Canada, Australia, parts of Europe and several other countries.
The Company is placing an increased emphasis on the development and
marketing of new products. In 1994, the Company introduced nationally in the
United States the new TAMPAX SATIN TOUCH(TM) tampon and the new TAMPAX LITES(R)
tampon. The SATIN TOUCH tampon offers the ease and comfort of a plastic
applicator but has an all-paper applicator that is flushable and biodegradable.
SATIN
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TOUCH, which was introduced nationally in Canada in 1993, is a rounded-end
product with a patented, high-gloss surface. TAMPAX LITES is a new tampon
especially designed for use on days of light menstruation, when other tampons
might be too absorbent for comfortable use. In 1994, the Company introduced the
new TAMPAX SATIN(TM) tampon in France. This tampon is similar to the SATIN TOUCH
tampon. In the United Kingdom, the Company introduced nationally its TAMPAX
TAMPETS(R) tampon in 1994. This non-applicator tampon has been sold in Ireland
since 1993.
The Company continues to evaluate the possible introduction of its existing
products in additional markets, as well as certain new products and product
enhancements.
Marketing and Sales
-------------------
Marketing operations are conducted either directly by the Company and its
subsidiaries and joint venture, or by independent brokers or sales agents and
distributors. Sales are made directly to grocery, discount and drug stores and
other comparable outlets, as well as to wholesalers and distributors in those
trades. Sales to discount stores, including mass merchandisers and club stores,
have been increasing as a percentage of total sales. For the year 1994, Wal-
Mart, together with its affiliated stores, accounted for approximately 10.3% of
the Company's net sales worldwide. No single customer (including distributors)
of the Company and its subsidiaries and joint venture accounted for 10% or more
of total net sales prior to 1994. The marketplace for consumer products is
becoming increasingly global and currently is characterized by growing trade
consolidation and expansion across geographic borders. A small number of
significant customers have highly leveraged capital structures, making them
particularly sensitive to adverse market interest rate changes and other
economic variables. This situation did not significantly affect the Company
in 1994 or prior years.
Substantially all sales involve extensions of credit. Credit terms
generally are consistent with terms typically extended under local industry
practices. Default rates by the Company's customers in the United States have
been at or below industry averages, based on information from the Credit
Research Foundation.
In the United States, the Company's internal sales management group
directly handles sales to certain large customer accounts. These sales have
been increasing as a percentage of total sales. Other sales in the United
States and sales in Belgium, Canada, France and the Netherlands are handled
through independent sales brokers, who also may sell other branded consumer
products but generally do not carry products that compete with the products of
the Company and its subsidiaries. Sales are conducted in the Czech Republic,
Poland, Russia, Ukraine and the United Kingdom by the
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Company's subsidiaries and in the People's Republic of China by its joint
venture. Sales are conducted in other countries through independent
distributors and agents. Sales forces of the Company's subsidiaries in the Czech
Republic, Poland, Russia, Ukraine and the United Kingdom distribute certain
household consumer products for several other companies.
The Company believes that the recent trend by retailers and distributors to
reduce inventories and the related adverse impact on shipments will continue in
future periods. However, the rate of inventory reduction in future periods is
expected to be significantly less than the rate of reduction in 1993 and
therefore shipments are expected to more closely match retail sales, as they did
in 1994.
Media advertising is important to the overall success of the TAMPAX tampon
brand. In the United States, Canada and Europe, the Company focuses its
advertising on women aged 12-34, using a variety of media, including television
and print advertisements. The Company increased its advertising and promotional
spending in 1994 over 1993 levels, primarily to support the introduction of new
products in the Company's largest markets. The Company intends to continue to
support the TAMPAX tampon franchise with highly competitive levels of
advertising and promotional activities in the United States and Europe.
Advertising and promotional spending currently is being concentrated in the
Company's five largest markets (the United States, the United Kingdom, France,
Canada and Spain) and, as consumer economic and other conditions permit, will be
directed towards the four international markets believed to have the greatest
development potential (CIS, principally Russia and Ukraine, Mexico, China and
Brazil). The Company has consolidated its advertising execution through the
selection of BBDO Worldwide Inc. as its global advertising agency.
The Company also seeks to attract and retain customers through its teen
education program, which is designed to help female teenagers understand the
various forms of sanitary protection and promotes trial usage of TAMPAX tampons.
In developing markets, like Russia and China, the Company uses sampling with
young women and physician awareness programs. In the Company's largest markets,
the Company conducts school education programs that include videos, lecturers
and booklets.
Competition
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Highly competitive conditions prevail in the feminine protection industry
for external pads and menstrual tampons, which are competitive in both
performance and price, the principal methods of competition.
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In the United States, there are four other manufacturers whose sales,
directly or through subsidiaries, are significant in the total sanitary
protection market: Johnson & Johnson, Kimberly-Clark Corporation, Playtex Family
Products Corporation and The Procter & Gamble Company. Each of these
corporations manufactures and sells external pads or menstrual tampons or both.
Each makes and sells products other than external pads and tampons, and the
total sales of all products by and the capitalization of each of Johnson &
Johnson, Kimberly-Clark and Procter & Gamble are substantially greater than the
total sales and capitalization of the Company. These factors may be helpful to
the respective competitive positions of these companies in the feminine
protection industry. Substantially all of the tampons manufactured by the
above-mentioned four companies are sold under these companies' brand names. In
addition, there is a small private label segment of the industry. Management
believes that the TAMPAX tampon's leading market share position in the U.S.
tampon category (approximately 50.0% in dollars and 53.1% in units for the year
1994, according to Information Resources, Inc.) and strong brand loyalty among
consumers (as verified by household panel data obtained by Nielsen Marketing
Research), are positive factors in the Company's ability to compete in the
feminine protection industry. During 1994, the level of competitive activity
continued to increase in the United States, particularly in the areas of new
product introductions and price discounting.
Highly competitive conditions prevail in virtually all foreign markets.
Competition tends to be fragmented and regional in nature in most of those
markets, but tampons produced by, or under license from, Johnson & Johnson, and
external pads produced by, or under license from, Johnson & Johnson, Kimberly-
Clark and Procter & Gamble, are sold in many of the foreign markets where the
Company does business. Competitive activity remained at high levels in Europe
in 1994. This activity included the continued aggressive marketing of several
external pad products.
Management believes that the worldwide market for consumer products will
continue to be highly competitive and disinflationary and that the level of
competitive activity could intensify in 1995, including higher levels of
advertising and promotional activities, additional new product introductions,
and continued activity in the private label tampon sector.
Raw Materials
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The principal raw materials used in the Company's business are cotton and
rayon for tampons, paper and plastic for tampon applicators, and paperboard for
cartons and containers. Most of these raw materials are readily available in
the market from many sources. However, due to unusually low cotton production
during 1994 in several countries, worldwide demand for cotton produced in
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the United States has increased substantially over the last few months. This
could have an adverse effect on the ready availability and/or price of cotton to
the Company and other purchasers during 1995. In addition, the Company recently
has experienced cost pressures with regard to some of its other raw materials.
Trademarks and Patents
----------------------
The Company, directly or through its subsidiaries, owns a number of
trademarks, trademark registrations and trademark applications in the United
States and other countries, which, in the opinion of management, are
significant. The Company's trademark registrations vary in duration and are
typically renewable by the Company. Certain features of TAMPAX tampons are the
subject of U.S. and foreign patents or patent applications owned by the Company.
In management's opinion, certain of these patents are significant. The duration
of the Company's patents ranges from 4 to 18 years (i.e., the patents have
----
expiration dates ranging from the year 1999 to the year 2013).
Research and Development
------------------------
The Company maintains research and development laboratories at its
facilities in Palmer, Massachusetts and Havant, England. The Company's research
and development expenditures have approximated 2% of net sales in each of the
past three years. Management believes that developing better protecting and
more comfortable and convenient products, and products which are environmentally
sound, is important to maintaining the Company's competitive position. Research
is directed toward these goals.
Employees
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As part of the restructuring program announced in 1989, the staff of the
Company's headquarters and North American Division has been reduced
substantially. The sale of non-core businesses also has reduced the number of
employees. Additional headcount reductions have occurred and will occur as a
result of the restructuring programs announced in 1991 and 1993. At December
31, 1994, the Company and its subsidiaries employed approximately 3,400 persons.
Foreign and Domestic Operations; Export Sales
---------------------------------------------
The information regarding foreign and domestic operations of the Company
and its subsidiaries set forth on page F-15 under the caption "Segment and
Geographic Information" in the Notes to Consolidated Financial Statements is
incorporated herein by reference.
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Over the past three years, sales by the Company's foreign
operations accounted for approximately one-half of total unit sales.
In 1994, sales between geographic areas and export sales of the Company
were not significant.
Item 2. Properties
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Domestic Properties
-------------------
The Company owns and operates three manufacturing plants in the United
States, located in Auburn, Maine; Claremont, New Hampshire; and Rutland,
Vermont. Product and process research and development, and certain accounting,
data processing and sales and logistics operations are conducted at the
Company's Technical Center, located in Palmer, Massachusetts. This facility is
a testing center for the development of new products and for the application of
advanced manufacturing technology to the Company's products. The Company owns
each of these plants and the Technical Center. The Company leases headquarters
office space in White Plains, New York.
The Company's production machinery and equipment and the properties owned
by it described above are held free and clear of encumbrances.
During the last fiscal year, the Company's domestic plants were suitable
and adequate for the Company's requirements. The Company's domestic plants
operate principally on a three-shift basis, and have sufficient additional
capacity to satisfy the foreseeable requirements of the Company.
Foreign Properties
------------------
The Company's foreign subsidiaries own and operate manufacturing plants in
France, Ireland, Russia, Ukraine and the United Kingdom. The joint venture in
the People's Republic of China, in which the Company has an 80% interest, has
contractual rights to use a manufacturing plant there. The Company's foreign
subsidiaries lease office space in Australia, Brazil, Canada, France, Mexico,
Switzerland, Venezuela and in several other countries. The Company's subsidiary
in the United Kingdom leases office space there for the Company's international
headquarters.
As part of the Company's worldwide manufacturing restructuring program
announced in 1993, the Company has restructured its manufacturing operations in
France. During 1994, all worldwide production of COMPAK tampons was
concentrated at the French plant, and production of other tampons was
consolidated in the Company's other European plants. Also as part of the
restructuring program,
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in 1994 the tampon manufacturing plant in Mexico leased by a subsidiary and the
tampon manufacturing plant in South Africa owned by a subsidiary were closed.
Supply of products to Mexico and South Africa is now being sourced from other
production facilities.
The production machinery and equipment and properties owned by the
Company's foreign subsidiaries described above are held free and clear of
encumbrances.
During the last fiscal year, the foreign facilities of the Company's
subsidiaries were suitable and adequate for the Company's requirements. In
general, these foreign manufacturing facilities operate on a three-shift basis,
and have sufficient additional capacity to satisfy the foreseeable requirements
of the Company.
Item 3. Legal Proceedings
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The Company or a subsidiary is a defendant in a small number of product
liability lawsuits based on allegations that toxic shock syndrome ("TSS") was
contracted through the use of tampons. A small number of pre-suit claims
involving similar TSS allegations have also been asserted. The damages alleged
vary from case to case and often include claims for punitive damages. One TSS
lawsuit, served on the Company in July 1994, purports to be a class action on
behalf of all women who have contracted TSS through the use of tampons. The
Company does not believe that class certification is warranted, and intends to
vigorously contest any motion for class certification filed by the plaintiffs,
as well as the allegations contained in the plaintiffs' complaint.
The Company and three of its former officers have been named as defendants
in certain shareholder lawsuits that have been filed in the United States
District Court for the Southern District of New York and that have been
consolidated under the caption In Re Tambrands Inc. Securities Litigation. The
------------------------------------------
parties have stipulated to the certification of the consolidated lawsuit as a
class action on behalf of all purchasers of the Company's common stock during
the period December 14, 1992 through April 28, 1993. The complaint alleges that
the Company's disclosures during the class period contained material
misstatements and omissions concerning its anticipated future earnings and
thereby allegedly violated Section 10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934. The complaint seeks an unspecified amount of damages on
behalf of the class.
The Company was a nominal defendant in three purported shareholder
derivative lawsuits filed in the Supreme Court of the State of New York for
Westchester County and consolidated into a single action. Named collectively in
the consolidated complaint as individual defendants were the Company's directors
(other than Mr.
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<PAGE>
Fogarty), certain former directors and three of its former officers. The
complaint alleged that the officer-defendants exposed the Company to liability
in the shareholder class action described in the preceding paragraph and
misappropriated corporate opportunities by trading in the Company's stock on the
basis of nonpublic information. One of the former officers was also alleged to
have received improper reimbursements from the Company for alleged personal
expenses. The director-defendants were alleged to have acquiesced in the
aforesaid alleged violations. The complaint sought to recover on behalf of the
Company an unspecified amount of damages from the individual defendants. No
relief was sought against the Company. In September 1994, the Court granted the
defendants' motion to dismiss the complaint for failure to make a demand upon
the Board of Directors. Plaintiffs have appealed the dismissal.
The Company is involved, either as a named defendant or as the result of
contractual indemnities, in certain litigation arising out of the operations of
certain divested subsidiaries.
There are certain other legal proceedings pending against the Company
arising out of its normal course of business in which claims for monetary
damages are asserted.
While it is not feasible to predict the outcome of these legal proceedings
and claims with certainty, management is of the belief that any ultimate
liabilities for damages either are covered by insurance, are provided for in the
Company's financial statements or, to the extent not so covered or provided for,
should not individually or in the aggregate have a material adverse effect on
the Company's financial position.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
Management of the Registrant
----------------------------
The names and ages of all executive officers of the Company, the current
office held by each, and the period during which each has served as such are set
forth in the following table:
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<TABLE>
<CAPTION>
Period Served
Name Age Current Office In Current Office
---- --- -------------- -----------------
<S> <C> <C> <C>
Edward T. Fogarty 58 President and 1994 to date
Chief Executive
Officer (1)
Michael K. Lorelli 43 Executive Vice 1994 to date
President and President,
North America/Latin
America (2)
Thomas J. Mason 50 Group Vice President- 1994 to date
International (3)
Harry E. Raber 53 Vice President - 1991 to date
Corporate Engineering
and Manufacturing
Susan J. Riley 36 Vice President - 1994 to date
Finance
Thomas Soper, III 45 Senior Vice President- 1994 to date
Corporate Human Resources
and Communications (4)
Jerome B. Wainick 54 Vice President-Research 1990 to date
and Development (5)
Raymond F. Wright 56 Senior Vice President- 1989 to date
Chief Financial
Officer
</TABLE>
(1) Mr. Fogarty has served as an officer of the Company since May 1994. From
prior to March 1990 until May 1994, he was employed by Colgate-Palmolive Company
as President - USA/Canada/Puerto Rico.
(2) Mr. Lorelli has served as an officer of the Company since October 1994.
From January 1993 until October 1994, he was employed by Pizza Hut
International, a division of PepsiCo, Inc. as President. From prior to March
1990 until December 1992, he was employed by Pepsi-Cola East, a division of
PepsiCo, Inc., as President.
(3) Mr. Mason has served as an officer of the Company since October 1994.
From May 1992 until September 1994, he was employed by Dole Packaged Foods, a
division of Dole Food Co., as President. From April 1990 until May 1992, he was
employed by Kraft General Foods as Executive Vice President and General Manager,
Specialty Products. From prior to March 1990 until April 1990, he was employed
by Kraft General Foods as Vice President and General Manager - Knudsen.
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<PAGE>
(4) Mr. Soper has served as an officer of the Company since October 1994.
From prior to March 1990 until September 1994, he was employed by Alexander &
Alexander Services Inc. (a provider of risk management, insurance brokerage and
human resource management consulting services) as Senior Vice President -
Corporate Human Resources.
(5) Mr. Wainick has served as an officer of the Company since June 1990. From
prior to March 1990 until June 1990, he was employed by Binney & Smith, Inc. (a
manufacturer of arts and crafts supplies), a subsidiary of Hallmark Cards, Inc.,
as Director of Technical Development.
Each executive officer is appointed by the Board of Directors to serve until
the first meeting of directors following the annual meeting of shareholders of
the Company. Except as indicated in the footnotes above, the principal
occupation and employment during the past five years of each of the above-named
executive officers have been as an officer or other member of management of the
Company or one or more of its subsidiaries.
In general, management of the Company is organized into three groups:
North America/Latin America
International
Corporate/Central Services
The principal managers for each of these groups are as follows:
North America/Latin America
---------------------------
Name Title
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Michael K. Lorelli Executive Vice President and President,
North America/Latin America
R. Kent Doss Vice President - Sales
Jaclyn K. Flatow Vice President - Marketing
John C. LaBonty General Manager - Canada
Kevin J. Paradise Vice President - Human Resources
Robert M. Pietryka Vice President - Operations
Jose Violante Vice President - Latin America
International
-------------
Thomas J. Mason Group Vice President - International
Andrew Armenian Vice President and General Manager-CIS
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Patrick Legrand Vice President - Marketing
Li, Ming Di General Manager - China
Peter C. Napier Vice President - Operations
Anthony D. O'Neill Vice President - Finance
John D. Perrett Vice President - Human Resources
Christian Roure Vice President - Sales, Europe
T. Peter Stephenson Acting Vice President - Sales, U.K. and Ireland
Corporate/Central Services
--------------------------
Edward T. Fogarty President and Chief Executive Officer
Thomas Soper, III Senior Vice President - Corporate Human
Resources and Communications
Raymond F. Wright Senior Vice President - Chief Financial
Officer
David Briggs Vice President - Information Services,
International
Bruce P. Garren Vice President - Group Counsel
Seth E. Herbert Vice President - International Counsel
Martha B. Lindsay Vice President - Treasurer
Janey M. Loyd Vice President - Business Development
Anthony J. Principato Vice President - Tax
Harry E. Raber Vice President - Corporate Engineering and
Manufacturing
Owen K. Rankin Vice President - Global Marketing
Susan J. Riley Vice President - Finance
Jerome B. Wainick Vice President - Research and
Development
Irwin Zaetz Vice President - Information Services,
North America
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PART II
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Item 5. Market for Registrant's Common Equity and Related
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Shareholder Matters
-------------------
The Company's Common Stock is traded on the New York and Pacific Stock
Exchanges. The following table provides quarterly dividend and Common Stock
price range information for the years 1993 and 1994:
<TABLE>
<CAPTION>
Common Stock
Price Range (a)
------------------
Dividends
High Low Per Share
-------- -------- ------------
<S> <C> <C> <C>
1994
----------------
First Quarter $44 1/2 $38 1/4 $0.42
Second Quarter 39 5/8 34 3/4 0.42
Third Quarter 39 1/4 35 5/8 0.42
Fourth Quarter 42 1/2 36 1/4 0.44
1993
----------------
First Quarter $65 $53 1/2 $0.38
Second Quarter 54 1/8 39 1/2 0.38
Third Quarter 49 7/8 40 3/4 0.80(b)
Fourth Quarter 46 3/8 41 1/4 -- (b)
</TABLE>
(a) Reflects trading on the New York Stock Exchange.
(b) Dividends of $0.42 per share declared in the third quarter were paid in
December 1993.
As of March 15, 1995, there were 7,120 holders of record of the Company's Common
Stock.
Item 6. Selected Financial Data
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The information required by this item is set forth in a separate section of
this Annual Report on Form 10-K under the caption "Selected Financial Data"
appearing on page F-2 and is incorporated herein by reference.
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Item 7. Management's Discussion and Analysis of Results of
------ --------------------------------------------------
Operations and Financial Condition
----------------------------------
The information required by this item is set forth in a separate section of
this Annual Report on Form 10-K under the caption "Management's Discussion and
Analysis" beginning on page
F-3 and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
------ -------------------------------------------
The information required by this item is set forth in a separate section of
this Annual Report on Form 10-K as indicated in the "Index to Financial
Information" appearing on page F-1 and is incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
------ ------------------------------------------------
Accounting and Financial Disclosure
-----------------------------------
None.
PART III
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Item 10. Directors and Executive Officers of the Registrant
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The information relating to nominees for election as directors of the Company
set forth under the caption "Election of Directors" in the Company's definitive
Proxy Statement for the annual meeting of shareholders to be held on April 25,
1995 is incorporated herein by reference.
The information on executive officers set forth under the first two paragraphs
of the caption "Management of the Registrant" beginning on page 9 (including the
table and footnotes) is incorporated herein by reference.
The information relating to compliance with Section 16(a) of the Securities
Exchange Act of 1934, as amended, set forth under the caption "Executive
Compensation and Other Information - Other Information" in the Company's
definitive Proxy Statement for the annual meeting of shareholders to be held on
April 25, 1995 is incorporated herein by reference.
Item 11. Executive Compensation
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The information regarding executive compensation set forth under the captions
"Information Regarding the Board of Directors -Compensation of Directors,"
"Executive Compensation and Other Information" and "Proposal to Approve the 1995
Directors Stock and Deferred Compensation Plan" in the Company's definitive
Proxy Statement for the annual meeting of shareholders to be held on April 25,
1995 is incorporated herein by reference.
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Item 12. Security Ownership of Certain Beneficial Owners and
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Management
----------
The information regarding the security ownership of certain beneficial owners
and management set forth under the caption "Security Ownership by Management and
Others" in the Company's definitive Proxy Statement for the annual meeting of
shareholders to be held on April 25, 1995 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
------- ----------------------------------------------
The information pertaining to certain relationships and related transactions
set forth under the captions "Information Regarding the Board of Directors -
Compensation of Directors" and "Executive Compensation and Other Information -
Compensation Committee Interlocks and Insider Participation" in the Company's
definitive Proxy Statement for the annual meeting of shareholders to be held on
April 25, 1995 is incorporated herein by reference. The services performed for
the Company by Doherty, Wallace, Pillsbury & Murphy, P.C. were on terms no less
favorable to the Company than if such services had been provided by unaffiliated
parties.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules,
------- ----------------------------------------
and Reports on Form 8-K
-----------------------
(a) Documents filed as part of this report
1. Financial Statements
The list of financial statements set forth under the caption "Index to
Financial Information" on page F-1 is incorporated herein by
reference.
2. Financial Statement Schedules
The list of financial statement schedules set forth under the caption
"Index to Financial Information" on page F-1 is incorporated herein by
reference. All other schedules have been omitted, as the required
information is inapplicable or the information is presented in the
financial statements or related notes.
3. Exhibits
Exhibit
Number Description
------- -----------
3(1) Certificate of Incorporation of the Company, as amended through
April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the
Company's Form S-8 Registration Statement (Reg. No. 33-13902),
-15-
<PAGE>
incorporated herein by reference.
3(2) Certificate of Amendment of Certificate of Incorporation of the
Company, dated April 24, 1990, filed May 15, 1990 as Exhibit
4(2) to the Company's Report on Form 10-Q for the quarter ended
March 31, 1990, incorporated herein by reference.
3(3) Certificate of Amendment of Certificate of Incorporation of the
Company, dated April 28, 1992, filed May 15, 1992 as Exhibit
4(2) to the Company's Report on Form 10-Q for the quarter ended
March 31, 1992, incorporated herein by reference.
3(4) By-Laws of the Company, as amended, filed herewith.
4(1) Description of the rights of security holders set forth in the
Certificate of Incorporation of the Company, as amended through
April 28,
1987, filed April 30, 1987 as Exhibit 4(a) to the Company's
Form S-8 Registration Statement (Reg. No. 33-13902),
incorporated herein by reference.
4(2) Description of the rights of security holders set forth in the
Certificate of Amendment of Certificate of Incorporation of the
Company, dated April 28, 1992, filed May 15, 1992 as Exhibit
4(2) to the Company's Report on Form 10-Q for the quarter ended
March 31, 1992, incorporated herein by reference.
4(3) Rights Agreement, dated as of October 24, 1989, between the
Company and First Chicago Trust Company of New York, which
includes the Form of Right Certificate as Exhibit A and the
Summary of Rights to Purchase Common Shares as Exhibit B, filed
October 27, 1989 as Exhibit 1 to the Company's Form 8-A
Registration Statement, incorporated herein by reference.
4(4)(a) Indenture dated as of December 1, 1993 between the Company and
Citibank, N.A., as trustee, relating to the Company's Medium-
Term Note Program, filed March 31, 1994 as Exhibit 4(4)(a) to
the Company's Form 10-K Report for the year ended December 31,
1993, incorporated herein by reference.
4(4)(b) Form of Floating Rate Debt Security, filed December 16, 1993 as
Exhibit 4-a to the
-16-
<PAGE>
Company's Report on Form 8-K, incorporated herein by reference.
4(4)(c) Form of Fixed Rate Debt Security, filed December 16, 1993 as
Exhibit 4-b to the Company's Report on Form 8-K, incorporated
herein by reference.
Management Contracts and
Compensatory Plans and Arrangements
(Exhibits 10(1) - 10(21))
-----------------------
10(1)(a) 1981 Long Term Incentive Plan, as amended through November 4,
1988, filed as Exhibit 10(1)(a) to the Company's Report on Form
10-K for the year 1988, incorporated herein by reference.
10(1)(b) Amendment to 1981 Long Term Incentive Plan, dated as of
February 27, 1990, filed as Exhibit 10(1)(b) to the Company's
Report on Form 10-K for the year 1989, incorporated herein by
reference.
10(1)(c) Amendment to 1981 Long Term Incentive Plan, effective as of
June 25, 1991, filed as Exhibit 10(1)(c) to the Company's
Report on Form 10-K for the year 1991, incorporated herein by
reference.
10(1)(d) Amendment to 1981 Long Term Incentive Plan, effective as of
June 23, 1992, filed as Exhibit 10(1)(d) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
10(1)(e) Amendment to 1981 Long Term Incentive Plan, effective as of
February 23, 1993, filed as Exhibit 10(1)(e) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
10(1)(f) Addendum to 1981 Long Term Incentive Plan, filed April 30, 1987
as Exhibit 28(a) to the Company's Form S-8 Registration
Statement (Reg. No. 33-13902), incorporated herein by
reference.
10(2)(a) 1981 Incentive Stock Option Plan, as amended
through April 30, 1987, filed April 30, 1987 as Exhibit 28(a)
to the Company's Form S-8 Registration Statement (Reg. No. 33-
13902), incorporated herein by reference.
-17-
<PAGE>
10(2)(b) Amendment to 1981 Incentive Stock Option Plan, dated as of
February 27, 1990, filed as Exhibit 10(2)(b) to the Company's
Report on Form 10-K for the year 1989, incorporated herein by
reference.
10(2)(c) Amendment to 1981 Incentive Stock Option Plan, effective as of
June 23, 1992, filed as Exhibit 10(2)(c) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
10(2)(d) Amendment to 1981 Incentive Stock Option Plan, effective as of
February 23, 1993, filed as Exhibit 10(2)(d) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
10(3)(a) 1991 Stock Option Plan, filed as Exhibit 10(3) to the Company's
Report on Form 10-K for the year 1990, incorporated herein by
reference.
10(3)(b) First Amendment to 1991 Stock Option Plan, effective as of July
1, 1991, filed as Exhibit 10(3)(b) to the Company's Report on
Form 10-K for the year 1991, incorporated herein by reference.
10(3)(c) Second Amendment to 1991 Stock Option Plan, effective as of
July 1, 1991, filed as Exhibit 10(3)(c) to the Company's Report
on Form 10-K for the year 1991, incorporated herein by
reference.
10(3)(d) Third Amendment to 1991 Stock Option Plan, effective as of June
23, 1992, filed as Exhibit 10(3)(d) to the Company's Report on
Form 10-K for the year 1992, incorporated herein by reference.
10(3)(e) Fourth Amendment to 1991 Stock Option Plan, effective as of
February 23, 1993, filed as Exhibit 10(3)(e) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
10(3)(f) Fifth Amendment to 1991 Stock Option Plan, effective as of
February 23, 1993, filed as Exhibit 10(3)(f) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
-18-
<PAGE>
10(3)(g) Addendum to 1991 Stock Option Plan, filed as Exhibit 10(3)(g)
to the Company's Report on Form 10-K for the year 1992,
incorporated herein by reference.
10(3)(h) Sixth Amendment to 1991 Stock Option Plan, effective as of
February 1, 1994, filed as Exhibit 10(3)(h) to the Company's
Report on Form 10-K for the year 1993, incorporated herein by
reference.
10(4)(a) 1989 Restricted Stock Plan, as amended through December 31,
1990, filed as Exhibit 10(4) to the Company's Report on Form
10-K for the year 1990, incorporated herein by reference.
10(4)(b) Amendment to 1989 Restricted Stock Plan, effective as of
February 23, 1993, filed as Exhibit 10(4)(b) to the Company's
Report on Form 10-K for the year 1992, incorporated herein by
reference.
10(5) Supplemental Executive Retirement Plan, effective July 1, 1986,
as amended and restated effective July 1, 1994, filed as
Exhibit 10(6) to the Company's Report on Form 10-Q for the
quarter ended June 30, 1994, incorporated herein by reference.
10(6) Trust Agreement between the Company and The Northern Trust
Company, dated as of October 31, 1988, filed as Exhibit 10(6)
to the Company's
Report on Form 10-K for the year 1988, incorporated herein by
reference.
10(7) Pension Plan for Non-Employee Directors, filed as Exhibit
10(10) to the Company's Report on Form 10-K for the year 1990,
incorporated herein by reference.
10(8)(a) 1992 Directors Stock Incentive Plan, filed as
Exhibit 10(11) to the Company's Report on Form 10-K for the
year 1991, incorporated herein by reference.
10(8)(b) First Amendment to 1992 Directors Stock
Incentive Plan, effective as of August 18, 1992, filed as
Exhibit 10(8)(b) to the Company's Report on Form 10-K for the
year 1992, incorporated herein by reference.
10(8)(c) Second Amendment to 1992 Directors Stock
-19-
<PAGE>
Incentive Plan, effective as of February 23, 1993, filed as
Exhibit 10(8)(c) to the Company's Report on Form 10-K for the
year 1992, incorporated herein by reference.
10(8)(d) Third Amendment to the 1992 Directors Stock Incentive Plan,
effective as of August 24, 1993, filed as Exhibit 10(3) to the
Company's Report on Form 10-Q/A for the quarterly period ended
September 30, 1993, incorporated herein by reference.
10(8)(e) Fourth Amendment to Tambrands Inc. 1992 Directors Stock
Incentive Plan, effective as of April 28, 1994, filed as
Exhibit 10(7) to the Company's Report on Form 10-Q for the
quarter ended June 30, 1994, incorporated herein by reference.
10(8)(f) Fifth Amendment to the Tambrands Inc. 1992 Directors Stock
Incentive Plan, effective as of September 1, 1994, filed as
Exhibit 10(4) to the Company's Report on Form 10-Q for the
quarter ended September 30, 1994, incorporated herein by
reference.
10(9)(a) Employment Protection Agreement between the Company and Mr.
Edward T. Fogarty, dated as of May 31, 1994, filed as Exhibit
10(1) to the Company's Report on Form 10-Q for the quarter
ended June 30, 1994, incorporated herein by reference;
10(9)(b) Employment Protection Agreement between the
Company and Mr. Raymond F. Wright, dated as of August 23, 1989,
and First Amendment to Employment Protection Agreement between
the Company and Mr. Raymond F. Wright, dated as of October 16,
1990, filed as Exhibit 10(11)(c) to the Company's Report on
Form 10-K for the year
1990, incorporated herein by reference;
10(9)(c) Employment Protection Agreement between the
Company and Mr. Michael K. Lorelli, dated as of August 31,
1994, filed as Exhibit 10(2) to the Company's Report on Form
10-Q for the quarter ended September 30, 1994, incorporated
herein by reference;
10(9)(d) Employment Protection Agreement between the
Company and Mr. Jerome B. Wainick, dated as of
June 18, 1990, and First Amendment to
-20-
<PAGE>
Employment Protection Agreement between the Company and Mr.
Jerome B. Wainick, dated as of October 16, 1990, filed
herewith;
10(9)(e) Employment Protection Agreement between the
Company and Mr. Harry E. Raber, dated as of August 13, 1992,
filed herewith;
The Company has agreements similar to the agreements listed as
Exhibits 10(9)(b), 10(9) (d) and 10(9)(e) with its other
executive officers.
10(10) Resolution of the Board of Directors of the Company with
respect to the compensation of the Chairman of the Board,
adopted on October 25, 1994, filed herewith.
10(11) Resolution of the Board of Directors of the Company with
respect to the compensation of the Board, adopted on December
13, 1994, filed herewith.
10(12) 1995 Directors Stock and Deferred Compensation Plan, effective
as of July 1, 1995 (subject to shareholder approval at the
annual meeting of shareholders to be held on April 25, 1995),
included as Exhibit A to the Company's Proxy Statement, dated
March 10, 1995, for the annual meeting of shareholders to be
held on April 25, 1995, incorporated herein by reference.
10(13) Executive Severance Program of the Company, filed as Exhibit
10(15) to the Company's Report on Form 10-K for the year 1989,
incorporated herein by reference.
10(14) 1981 Annual Incentive Plan of the Company, refiled herewith,
because the original filing is no longer eligible for
incorporation by reference pursuant to Rule 24 of the
Commission's Rules of Practice.
10(15) Letter Agreement between the Company and Mr. Edward T. Fogarty,
dated as of April 25, 1994, filed as Exhibit 10(1) to the
Company's Report on Form 10-Q for the quarter ended June 30,
1994, incorporated herein by reference.
10(16) Letter Agreement between the Company and Mr. Michael K.
Lorelli, dated as of August 30, 1994, filed as Exhibit 10(1) to
the Company's
-21-
<PAGE>
Report on Form 10-Q for the quarter ended September 30, 1994,
incorporated herein by reference.
10(17) Letter Agreement between the Company and Mr. Thomas Soper, III,
dated as of August 29, 1994, filed herewith.
10(18) Letter Agreement between the Company and Mr. Thomas J. Mason,
dated as of October 18, 1994, filed herewith.
10(19) Restricted Stock Agreement between the Company and Mr. Edward
T. Fogarty, dated May 31, 1994, filed as Exhibit 10(3) to the
Company's Report on Form 10-Q for the quarter ended June 30,
1994, incorporated herein by reference.
10(20) Stock Option Agreement between the Company and Mr. Edward T.
Fogarty, dated May 31, 1994, filed as Exhibit 10(4) to the
Company's Report on Form 10-Q for the quarter ended June 30,
1994, incorporated herein by reference.
10(21) Retirement Agreement between the Company and Mr. Charles J.
Chapman, dated as of February 28, 1994, filed as Exhibit 10(21)
to the Company's Report on Form 10-K for the year 1993,
incorporated herein by reference.
10(22)(a) Commercial Paper Dealer Agreement between the Company and
Merrill Lynch Money Markets, Inc., dated November 18, 1992,
filed as Exhibit 10(15) (a) to the Company's Report on Form 10-
K for the year 1992, incorporated herein by reference.
10(22)(b) Letter Agreement between the Company and the First National
Bank of Chicago, dated as of November 18, 1992, filed as
Exhibit 10(15)(b) to the Company's Report on Form 10-K for the
year 1992, incorporated herein by reference.
10(22)(c) Amended and Restated Credit Agreement by and among the Company,
Tambrands Limited, the signatory banks thereto and the Bank of
New York, as agent, dated as of September 6, 1994, filed as
Exhibit 10(5) to the Company's Report on Form 10-Q for the
quarter ended September 30, 1994, incorporated herein by
reference.
12 Computation of Ratio of Earnings to Fixed
-22-
<PAGE>
Charges, filed herewith.
21 Subsidiaries of the Company, filed herewith.
23 Independent Auditors' Consent, filed herewith.
24 Powers of attorney, filed herewith.
27 Financial Data Schedules, filed herewith (in electronic format
only).
(b) Reports on Form 8-K
The Company filed a Report under Item 5 of Form 8-K on October 27,
1994 in order to file a press release, issued by the Company on October
26, 1994, which contained the Company's third-quarter 1994 results.
TAMPAX, COMPAK, LITES, SATIN, SATIN TOUCH and TAMPETS are trademarks of
Tambrands Inc.
-23-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TAMBRANDS INC.
Date: March 28, 1995 By /s/ EDWARD T. FOGARTY
--------------------------
Edward T. Fogarty
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ EDWARD T. FOGARTY President and Chief March 28, 1995
--------------------------- Executive Officer
EDWARD T. FOGARTY and Director
(Principal Executive
Officer)
/s/ RAYMOND F. WRIGHT Senior Vice March 28, 1995
-------------------------- President-Chief
RAYMOND F. WRIGHT Financial Officer
(Principal Financial
Officer)
/s/ SUSAN J. RILEY Vice President - March 28, 1995
-------------------------- Finance (Principal
SUSAN J. RILEY Accounting Officer)
/s/ HOWARD B. WENTZ, JR. Chairman and March 28, 1995
-------------------------- Director
HOWARD B. WENTZ, JR.
* Director March 28, 1995
--------------------------
LILYAN H. AFFINITO
* Director March 28, 1995
--------------------------
PAUL S. DOHERTY
* Director March 28, 1995
--------------------------
FLOYD HALL
-24-
<PAGE>
Signature Title Date
--------- ----- ----
* Director March 28, 1995
--------------------------
ROBERT P. KILEY
* Director March 28, 1995
--------------------------
JOHN LOUDON
* Director March 28, 1995
--------------------------
RUTH M. MANTON
* Director March 28, 1995
--------------------------
JOHN A. MEYERS
* Director March 28, 1995
--------------------------
H.L. TOWER
* Director March 28, 1995
--------------------------
ROBERT M. WILLIAMS
* By /s/ EDWARD T. FOGARTY
---------------------------
Edward T. Fogarty
Attorney-in-Fact
-25-
<PAGE>
INDEX TO FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
Page
Reference
---------
<S> <C>
Selected Financial Data............................... F-2
Management's Discussion and Analysis of
Results of Operations and Financial Condition......... F-3
Financial Statements:
Consolidated Statements of Earnings
for the years ended
December 31, 1994, 1993 and 1992.................. F-6
Consolidated Statements of Retained
Earnings for the years ended
December 31, 1994, 1993 and 1992.................. F-6
Consolidated Statements of Cash
Flows for the years ended
December 31, 1994, 1993 and 1992.................. F-7
Consolidated Balance Sheets as of
December 31, 1994 and 1993........................ F-8
Notes to Consolidated Financial
Statements........................................ F-9
Independent Auditors' Report on
Consolidated Financial Statements................. F-16
Financial Statement Schedule:
VIII Reserves.................................... F-17
Independent Auditors' Report on
Financial Statement Schedule...................... F-18
Supplementary Financial Information
and Quarterly Data for the years
ended December 31, 1994 and 1993.................. F-19
</TABLE>
F-1
<PAGE>
TAMBRANDS INC.
Selected Financial Data
($ in thousands, except per share amounts)
<TABLE>
<CAPTION>
Years ended December 31 1994 1993 (a) 1992 1991 (a) 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net sales $644,513 $611,465 $684,113 $660,722 $631,511
Gross profit 438,402 409,759 456,032 418,155 385,428
Marketing, selling and distribution 233,753 202,031 193,477 194,696 172,264
Administrative and general 53,034 61,378 67,823 63,027 63,238
Restructuring and other charges - 30,042 - 30,348 -
Operating income 151,615 116,308 194,732 130,134 149,926
Earnings before cumulative effect
of accounting change 89,729 73,702 122,409 79,035 97,768
Earnings before cumulative effect
of accounting change per share 2.43 1.91 3.09 1.92 2.30
Average number of shares outstanding 36,992 38,632 39,640 41,216 42,524
Total assets 379,075 362,398 372,981 390,266 381,029
Medium-term notes payable 59,983 30,000 - - -
Dividends per share 1.70 1.56 1.40 1.24 1.11
</TABLE>
(a) Results and related financial data for 1993 and 1991 include Restructuring
and other charges.
F-2
<PAGE>
Management's Discussion and Analysis
Results of Operations
1994 vs. 1993 Consolidated Net sales for 1994 were $644.5 million, an increase
of 5.4% from 1993. The increase was primarily due to higher worldwide unit
sales, principally in the United States, driven by stabilization of retail trade
inventories and the successful launch of two new products, Tampax Satin Touch
and Tampax Lites. Sales volumes were also favorable in Europe where new products
were launched in both the United Kingdom and France and in the developing
markets of Russia and Ukraine.
Gross profit as a percent of Net sales was 68% for 1994, up from 67% in 1993.
The increase in margin reflects the impact of higher sales volume along with the
Company's continued support of its worldwide manufacturing efficiency programs
and its capital expenditures for productivity improvements.
Marketing, selling and distribution expenses were up 15.7% compared with the
prior year. The higher spending was primarily attributable to increased
advertising and promotions worldwide to support the Tampax tampon franchise.
This higher brand support was partially offset by reductions in overhead
spending. In the United States, the Company regained market share throughout
1994 in the growing tampon category. Total year market share recovered to
within 1% of 1993.
A 13.6% savings was experienced in Administrative and general expenses,
principally due to the consolidation of international management units and on-
going overhead reduction programs.
Increased sales volume combined with overhead savings was partially offset by
increased brand support spending. This resulted in a 3.6% net improvement in
Operating income versus 1993, exclusive of the 1993 restructuring charge.
Interest, net and other reflected a significant increase in expense in 1994
compared to 1993. Foreign exchange transactions resulted in costs in the current
year versus gains in 1993. Additionally, interest expense was higher, reflecting
an increase in the Company's debt level and higher average interest rates.
The effective tax rate for 1994 was 36.7%, compared to 37.9% in 1993. The higher
effective tax rate in 1993 was primarily due to the restructuring charge, the
cost of which was not fully deductible for tax purposes. Exclusive of the
restructuring charge, the 1993 effective tax rate was 36.8%.
1994 Earnings per share were $2.43 in comparison to $1.64 in 1993. Earnings per
share were the same as the prior year before the impact of the restructuring
charge and adoption of SFAS No. 112 in 1993. The increase in Earnings per share
was greater than that of Net earnings because fewer shares were outstanding on
average in 1994 due to the Company's share repurchase program.
Outlook The Company believes that the recent trend by retailers and
distributors to reduce inventories and the related adverse impact on shipments
will continue in future periods. However, the rate of inventory reduction in
future periods is expected to be significantly less than the rate of reduction
in 1993 and therefore shipments are expected to more closely match retail sales,
as they did in 1994.
The worldwide market for consumer products will continue to be highly
competitive and disinflationary. Recently, competition has become more intense
and management believes that such conditions could become even more competitive,
including higher levels of advertising and promotional activities, additional
new product introductions by competitors and continued activity in the private
label tampon sector. The Company intends to continue to support the Tampax
tampon franchise with highly competitive levels of advertising and promotional
activities in the United States and Europe.
F-3
<PAGE>
1993 vs. 1992 Consolidated Net sales for 1993 were $611.5 million, a decrease
of 10.6% from 1992. The decrease was the result of lower unit sales in the
United States and Europe, unfavorable foreign exchange rates in Europe and the
elimination of non-core products. Volume shortfalls in 1993 were principally
caused by a trend by US retailers and European distributors to reduce consumer
goods inventory levels. The decline was partially offset by favorable pricing
adjustments associated with the European restaging in 1992.
Gross profit as a percent of Net sales was 67% for 1993, up from 66.7% in 1992.
This increase was attributable to elimination of the lower-margin sales of
divested products and worldwide manufacturing efficiencies, partially offset by
the impact of lower sales volume.
In 1993, the Company provided $30.0 million for restructuring of manufacturing
and administrative operations and the cost of management changes including the
adoption of a consolidated international management strategy. The anticipated
annual savings of approximately $20.0 million resulting from work force
reductions and worldwide manufacturing restructuring are expected to be fully
realized by 1995.
Operating income was $116.3 million in 1993, down $78.4 million from 1992. In
addition to the restructuring charge of $30.0 million, the decline in Operating
income was primarily due to the lower Net sales. Marketing, selling and
distribution expenses increased 4.4% over 1992. The Company raised its level of
advertising and promotional spending to support the Tampax brand in the face of
increased competition and to regain market share in the second half of 1993. The
increase in brand support was partially offset by reductions in the other
components of Marketing, selling and distribution as well as lower
administrative spending in 1993. These reductions were the result of the
continuing program to reduce overhead expenses.
Interest, net and other improved by $5.2 million primarily due to net gains on
foreign exchange contracts, somewhat mitigated by interest expense on
increased borrowings.
The effective tax rate for 1993, exclusive of the restructuring charge, was
36.8%, compared to 36.2% in 1992.
Financial Condition
Cash Flows from Operating Activities 1994 Cash flows from operating activities
amounted to $128.9 million versus $128.7 million in 1993. The improvement in Net
earnings was combined with favorable working capital management and was
partially offset by cash used to fund restructuring activities.
Over the past three years, Cash flows from operating activities totaled $353.4
million. These funds were used for the repurchase of Common Stock for treasury
purposes, payment of dividends and capital expenditures.
Capital Expenditures The 1994 capital spending programs relate to investments
in equipment to improve product quality and productivity, modernize production
facilities and reduce costs. Over the past three years, the Company spent $139.2
million on capital improvements. 1995 spending levels are expected to
approximate those of 1994.
Liquidity and Capital Resources During 1994, the Company continued to utilize
its strong debt rating and a favorable financial climate to take advantage of
low US interest rates through short-term bank credit lines and a commercial
paper program. Additionally, the Company maintains a $150 million medium-term
note facility of which $60 million was outstanding at December 31, 1994.
F-4
<PAGE>
Cash flows from operations and the ability to borrow from a variety of sources
will provide the Company with the liquidity to continue the investments
necessary to meet the Company's long-term strategic goals.
The Company also utilizes cash resources to enhance shareholder value through
the payment of dividends and its stock repurchase program. In 1994, record cash
dividends of $62.7 million were paid.
This is the 43rd consecutive year of higher annual dividend payments. During the
year, the Company spent $71.1 million in its Common Stock repurchase program.
Since 1989, a total of 7,620,600 shares have been purchased. The Company will
continue the share repurchase program as conditions warrant.
F-5
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Earnings
Tambrands Inc. and Subsidiaries
Years Ended December 31 (in thousands, except per share amounts) 1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Net Sales $644,513 $ 611,465 $ 684,113
Cost of products sold 206,111 201,706 228,081
-------- --------- ---------
Gross profit 438,402 409,759 456,032
Selling, administrative and general expenses:
Marketing, selling and distribution 233,753 202,031 193,477
Administrative and general 53,034 61,378 67,823
Restructuring and other charges -- 30,042 --
-------- --------- ---------
286,787 293,451 261,300
-------- --------- ---------
Operating Income 151,615 116,308 194,732
Interest, net and other (9,864) 2,344 (2,869)
-------- --------- ---------
Earnings before provision for income taxes and
cumulative effect of accounting change 141,751 118,652 191,863
Provision for income taxes 52,022 44,950 69,454
-------- --------- ---------
Earnings Before Cumulative Effect of Accounting Change 89,729 73,702 122,409
Cumulative effect of accounting change -- (10,252) (1,009)
-------- --------- ---------
Net Earnings $ 89,729 $ 63,450 $ 121,400
======== ========= =========
Average number of shares outstanding 36,992 38,632 39,640
Per Share
Earnings before cumulative effect of accounting change $2.43 $1.91 $3.09
Cumulative effect of accounting change -- (0.27) (0.03)
-------- --------- ---------
Net earnings $2.43 $1.64 $3.06
======== ========= =========
</TABLE>
Consolidated Statements of Retained Earnings
<TABLE>
<CAPTION>
Years Ended December 31 (in thousands, except per share amounts) 1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of year $430,822 $ 433,851 $ 375,329
Net earnings 89,729 63,450 121,400
Dividends (62,721) (60,154) (55,469)
Net issuance of treasury stock in fulfillment of various
employee benefit, stock option and award plans (759) (6,325) (7,409)
-------- --------- ---------
Balance at end of year $457,071 $ 430,822 $ 433,851
======== ========= =========
Dividends per share $1.70 $1.56 $1.40
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
Consolidated Statements of Cash Flows
Tambrands Inc. and Subsidiaries
<TABLE>
<CAPTION>
Years Ended December 31 (in thousands) 1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net earnings $ 89,729 $ 63,450 $ 121,400
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 24,284 18,372 17,315
Deferred income taxes 4,557 (3,400) (3,414)
Cumulative effect of accounting change -- 10,252 1,009
Restructuring and other (10,417) 14,946 (18,439)
Change in:
Accounts receivable (2,224) 21,485 (4,017)
Inventories and other current assets (398) 456 (2,402)
Taxes on income 5,925 3,426 (12,695)
Accounts payable and accrued expenses 17,415 (256) (2,958)
-------- --------- ---------
Net cash provided by operating activities 128,871 128,731 95,799
-------- --------- ---------
Cash Flows from Investing Activities
Capital expenditures (38,470) (45,636) (55,125)
Proceeds from sales of property, plant and equipment 2,093 3,686 7,343
Proceeds from sales of marketable securities, net 639 1,164 14,243
-------- --------- ---------
Net cash used in investing activities (35,738) (40,786) (33,539)
-------- --------- ---------
Cash Flows from Financing Activities
Payment of dividends (62,721) (60,154) (55,469)
Purchase of shares for treasury (71,118) (57,946) (123,451)
Short-term debt changes 6,149 (18,308) 72,316
Issuance of medium-term notes 29,983 30,000 --
Proceeds from exercise of stock options and other 2,422 12,432 14,584
-------- --------- ---------
Net cash used in financing activities (95,285) (93,976) (92,020)
-------- --------- ---------
Effect of exchange rate changes on cash 730 (658) (3,147)
-------- --------- ---------
Net decrease in cash and cash equivalents (1,422) (6,689) (32,907)
Cash and cash equivalents at beginning of year 15,298 21,987 54,894
-------- --------- ---------
Cash and cash equivalents at end of year $ 13,876 $ 15,298 $ 21,987
======== ========= =========
Supplemental Cash Flow Information
Income taxes paid $ 49,500 $ 49,567 $ 82,446
Interest paid 4,573 4,574 8,006
-------- --------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE>
Consolidated Balance Sheets
Tambrands Inc. and Subsidiaries
<TABLE>
<CAPTION>
December 31 (in thousands, except share data) 1994 1993
--------- ---------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 13,876 $ 15,298
Accounts receivable, net 80,593 75,592
Inventories 37,957 38,000
Deferred taxes on income 18,892 20,427
Prepaid expenses and other current assets 25,818 24,445
--------- ---------
Total current assets 177,136 173,762
Property, plant and equipment, net 194,315 180,396
Intangible and other assets 7,624 8,240
--------- ---------
Total assets $ 379,075 $ 362,398
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings $ 70,517 $ 64,368
Accounts payable 31,530 25,793
Accrued expenses 80,381 81,083
Taxes on income 20,732 15,137
--------- ---------
Total current liabilities 203,160 186,381
Medium-term notes payable 59,983 30,000
Deferred taxes on income 21,450 17,119
Postemployment benefits 12,468 13,873
--------- ---------
Total liabilities 297,061 247,373
Shareholders' equity
Common Stock, authorized 300,000,000 shares, par
value $.25 per share; issued 43,547,938 shares 10,887 10,887
Retained earnings 457,071 430,822
Cumulative foreign currency translation adjustment (13,621) (20,659)
Treasury stock (371,016) (303,948)
Unamortized value of restricted stock and pension
costs (1,307) (2,077)
--------- ---------
Total shareholders' equity 82,014 115,025
--------- ---------
Total liabilities and shareholders' equity $ 379,075 $ 362,398
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-8
<PAGE>
Notes To Consolidated Financial Statements
Tambrands Inc. and subsidiaries (dollar amounts in thousands, except per share
amounts)
1 Accounting Policies
The consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States. Where alternatives exist,
the choices selected are described below.
Consolidation The 1994 and 1993 consolidated financial statements include the
accounts of Tambrands Inc. and all majority owned subsidiaries (the "Company").
Prior to 1993, businesses in China, Russia and Ukraine were accounted for under
the cost method and carried as Investments in affiliates. The financial results
and positions of these businesses were consolidated in 1993. The effect of
consolidation of these subsidiaries was not material to the financial statements
as a whole; therefore, prior years were not restated.
Foreign Currency Translation For subsidiaries not located in highly
inflationary economies, gains or losses resulting from the translation of
subsidiary companies' assets and liabilities denominated in foreign currencies
are shown as a separate component of Shareholders' equity.
For subsidiaries operating in highly inflationary economies, working capital
items are translated using current rates of exchange with adjustments included
in Operating income.
Cash Equivalents Highly liquid investments with a maturity of three months or
less when purchased are considered to be cash equivalents.
Inventories Inventories are stated at the lower of cost or market. Cost is
determined using the LIFO method for all domestic inventories. All other
inventories are stated at FIFO.
Depreciation Depreciation is computed on the straight-line and accelerated
methods over the useful lives of the assets.
Intangibles Intangible assets are amortized on a straight-line basis over
periods not exceeding 40 years.
Income Taxes Deferred taxes are provided for differences between the financial
statement and tax bases of assets and liabilities.
Provision has not been made for income taxes on foreign subsidiaries' unremitted
earnings to the extent that such earnings have been reinvested in the business;
any US income taxes payable on the distribution of available earnings should
generally be offset by credits for foreign taxes paid.
Reclassifications Certain reclassifications have been made to prior years'
financial statements to conform to the 1994 presentation.
2 Balance Sheet Components
The components of certain balance sheet accounts at December 31 are as follows:
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
Accounts receivable, net
Accounts receivable trade $ 77,235 $ 75,798
Less allowance for doubtful accounts 1,456 1,453
-------- --------
75,779 74,345
Other 4,814 1,247
-------- --------
$ 80,593 $ 75,592
======== ========
Inventories
Raw materials $ 12,967 $ 10,140
Finished goods 24,990 27,860
-------- --------
$ 37,957 $ 38,000
======== ========
Current cost of LIFO inventories $ 30,617 $ 26,837
Stated value of LIFO inventories 14,713 9,838
-------- --------
Excess of current cost over stated value $ 15,904 $ 16,999
======== ========
</TABLE>
F-9
<PAGE>
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
Property, plant and equipment, net (at cost)
Buildings, leaseholds and improvements $ 56,522 $ 51,907
Machinery, equipment and fixtures 230,333 189,518
Land 3,808 4,536
Construction in progress 23,794 29,388
-------- --------
314,457 275,349
Less accumulated depreciation 120,142 94,953
-------- --------
$194,315 $180,396
======== ========
Intangible and other assets
Cost $ 14,066 $ 14,147
Less accumulated amortization 6,442 5,907
-------- --------
$ 7,624 $ 8,240
======== ========
Accrued expenses
Promotions $ 27,723 $ 16,774
Salaries and benefits 25,480 24,691
Restructuring reserves 5,205 18,071
Other liabilities 21,973 21,547
-------- --------
$ 80,381 $ 81,083
======== ========
</TABLE>
<TABLE>
<CAPTION>
3 Statement of Earnings Information
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Interest, net and other
Net financing:
Interest income $ 1,304 $ 983 $ 3,323
Interest expense (7,645) (4,890) (8,567)
Translation gain on
foreign currency loans -- -- 3,427
-------- -------- --------
(6,341) (3,907) (1,817)
Net realization on foreign
currency transactions (3,449) 6,551 (462)
Other (74) (300) (590)
-------- -------- --------
$ (9,864) $ 2,344 $ (2,869)
======== ======== ========
Depreciation $ 23,545 $ 17,570 $ 15,749
Research and development 10,735 9,881 11,769
</TABLE>
4 Benefit Plans
The Company maintains several non-contributory pension plans covering domestic
and foreign employees who meet certain minimum service and age requirements and
provides supplemental non-qualified retirement benefits to non-employee
directors, certain officers and key employees. Pensions are based upon earnings
of covered employees during their periods of credited service. The Company's
funding policy for its pensions is to make the annual contributions required by
applicable regulations.
The following table sets forth the funded status of the plans and the amounts
recognized in the accompanying financial statements.
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
Plan assets at fair value,
primarily stocks and bonds $ 86,950 $ 91,242
-------- --------
Actuarial present value of
benefit obligations:
Vested benefits 87,645 91,491
Nonvested benefits 4,749 6,120
-------- --------
Accumulated benefit obligation 92,394 97,611
Effect of projected future salary increases 7,949 11,723
-------- --------
Projected benefit obligation 100,343 109,334
-------- --------
Projected benefit obligation in
excess of plan assets 13,393 18,092
Deferred actuarial adjustments 412 (4,738)
Deferred prior service cost (3,527) (3,907)
-------- --------
Accrued pension cost included
in accrued expenses $ 10,278 $ 9,447
======== ========
</TABLE>
At December 31, 1994 and 1993, the accumulated benefit obligation of the
domestic plans exceeded plan assets by $9,962 and $10,251, respectively.
F-10
<PAGE>
The net cost of pensions included in the Statements of earnings consists of:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Service cost: benefits earned
during the period $ 5,045 $ 4,940 $ 4,880
Interest cost on projected
benefit obligation 8,093 7,288 7,368
Actual return on plan assets 3,375 (12,703) (7,501)
Net amortization and deferral (10,289) 6,697 654
-------- -------- -------
$ 6,224 $ 6,222 $ 5,401
======== ======== =======
</TABLE>
In 1994 and 1993, the discount rates used to determine the projected benefit
obligation for the domestic plans were 8.5% and 7.5%, respectively, and the
rates of increase in future compensation were 5% and 6%, respectively. For the
international plans, the discount rates used to determine the projected benefit
obligation were 9% in 1994 and 8% in 1993, and the rates of increase in future
compensation ranged from 5.5% to 6% and 5.5% to 6.5% in 1994 and 1993,
respectively. Expected long-term rates of return on plan assets ranged from 8.5%
to 9.25% in both 1994 and 1993. Prior service costs arising from plan amendments
are amortized on a straight-line basis over the average remaining service period
of employees expected to receive benefits under each plan.
As of January 1, 1993, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 112, "Employers' Accounting for Postemployment Benefits,"
recognizing a charge to earnings of $16,000, amounting to $10,252 after tax or
$0.27 per share. In 1992, the Company recognized the full amount of its
estimated accumulated postretirement benefit obligation in accordance with the
provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions." The pre-tax charge to 1992 earnings was $1,627 with a net
earnings effect of $1,009 or $0.03 per share. The after-tax amounts of these
accounting changes have been reflected in the 1993 and 1992 Statements of
earnings as a cumulative effect of accounting change. The incremental annual
cost of accounting for postretirement and postemployment benefits under the new
accounting methods is not material. The actuarial assumptions used to measure
the cost of postretirement and postemployment benefits are consistent with those
used to measure the cost of the pension plans.
The Company also sponsors a defined contribution 401(k) savings plan available
to domestic employees who meet certain minimum age and service requirements. The
plan, which is funded principally with the Company's Common Stock, includes
provision for a discretionary contribution by the Company of up to 2% of each
employee's covered earnings based on Company performance.
5 Income Taxes
Provision for income taxes for the years ended December 31 has been made as
follows:
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Current:
United States $47,866 $44,558 $65,885
Foreign (401) 3,792 6,983
------- ------- -------
47,465 48,350 72,868
Deferred:
United States 6,699 (3,915) (3,154)
Foreign (2,142) 515 (260)
------- ------- -------
4,557 (3,400) (3,414)
------- ------- -------
$52,022 $44,950 $69,454
======= ======= =======
</TABLE>
Changes in deferred taxes are due primarily to the restructuring provisions
established in 1993.
The effective tax rates for 1994, 1993 and 1992 were 36.7%, 37.9% and 36.2%,
respectively. The higher effective tax rate in 1993 was primarily due to the
restructuring charge, the cost of which was not fully deductible for tax
purposes. Exclusive of the restructuring charge's effect, the 1993 effective tax
rate was 36.8%. The difference between the comparable effective tax rates and
the statutory federal rate is principally due to state income taxes.
During 1994 and 1993, Shareholders' equity was credited for $76 and $1,330,
respectively, for tax benefits relating to compensation expense for tax purposes
in excess of the amounts recognized for financial reporting purposes.
F-11
<PAGE>
In 1992, the Company adopted SFAS No. 109, "Accounting for Income Taxes." The
adoption of the Statement did not have a material effect on Net earnings.
Deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse.
The components of the net deferred tax asset (liability) for the years ended
December 31 are as follows:
<TABLE>
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Deferred tax assets:
Employee benefits $ 5,320 $ 5,219
Postemployment benefits 4,208 5,748
Intercompany transactions 4,785 2,263
Restructuring 223 6,879
Accrued liabilities 5,579 3,783
Other 4,607 3,633
------- -------
24,722 27,525
======= =======
Deferred tax liabilities:
Property, plant and equipment 19,307 16,172
Safe harbor leases 6,816 7,490
Other 1,157 555
------- -------
27,280 24,217
------- -------
$(2,558) $ 3,308
======= =======
</TABLE>
6 Restructuring and Other Charges
In 1993, the Company announced a program to restructure its worldwide operations
to improve efficiency and reduce costs. Its previous investments in technology
enabled it to operate with reduced manufacturing and administrative overhead and
fewer employees. As a result, the Company provided $30,042, or $20,273 after
tax, for this restructuring and the cost of management changes caused by the
adoption of a consolidated international management strategy. At December 31,
1994, the remaining accrual related primarily to committed severance plans and
reflects longer severance obligations common in certain countries.
7 Commitments and Contingencies
The Company's lease of its headquarters in White Plains, New York and European
headquarters in the United Kingdom are non-cancelable operating leases. Certain
computers and related equipment are held under capital leases with remaining
terms of less than one year.
Future minimum lease payments under operating leases with terms in excess of one
year amount to $5,061 in 1995, $4,173 in 1996, $3,534 in 1997, $3,418 in 1998
and $3,193 in 1999. Rent expense in 1994, 1993 and 1992 amounted to $4,270 ,
$5,027 and $4,031, respectively.
The Company has been named in product liability litigation and claims arising
from the alleged association of tampons with Toxic Shock Syndrome. The cases
seek compensatory and punitive damages in various amounts.
The Company and certain of its former officers have been named as defendants in
certain shareholder lawsuits now consolidated into one action. The consolidated
lawsuit has been certified as a federal securities fraud class action on behalf
of all purchasers of the Company's Common Stock during the period from December
14, 1992 through April 28, 1993. The complaint seeks an unspecified amount of
damages on behalf of the purported class.
The Company is involved, either as a named defendant or as the result of
contractual indemnities, in litigation arising out of the operations of certain
divested subsidiaries. Included in this litigation are a patent infringement
action and an environmental matter.
There are certain other legal proceedings pending against the Company arising
out of its normal course of business in which claims for monetary damages are
asserted.
While it is not feasible to predict the outcome of these legal proceedings and
claims with certainty, management is of the belief that any ultimate liabilities
for damages either are covered by insurance or should not have a material
adverse effect on the Company's financial position.
F-12
<PAGE>
8 Borrowings
The Company's Short-term borrowings consist of commercial paper and notes
payable bearing interest at prevailing market rates and supported by bank lines
of credit amounting to $150,000 at December 31, 1994 and 1993. Commercial paper
borrowings at December 31, 1994 and 1993 were $57,201 and $48,425, with average
annual interest rates at year-end of 5.6% and 3.4%, respectively, with
maturities in the first quarter of the subsequent year. Notes payable at
December 31, 1994 and 1993 totaled $13,316 and $15,943, at average annual rates
outstanding throughout the year of 5.7% and 4.3%, respectively. Commitment fees
to secure the lines of credit are not material.
In 1993, the Company established a $150,000 medium-term note facility. At
December 31, 1994, $60,000 of these unsecured notes were outstanding, at
interest rates ranging from 4.6% to 7.4%, with maturities varying from January
1997 to May 2004. At December 31, 1993, there were $30,000 of unsecured notes
outstanding, at interest rates ranging from 5.5% to 5.6%, maturing in January
1999.
The terms of the borrowing facilities include various covenants which provide,
among other things, for limitations on liens and the maintenance of a minimum
debt service ratio. The Company was in compliance with such covenants at
December 31, 1994.
9 Financial Instruments
As part of its risk management program, the Company minimizes its exposure to
foreign currency fluctuation through the use of forward exchange contracts and
options. At December 31, 1994, there were no forward exchange contracts
outstanding. Forward exchange contracts with face values of $50,627 were
outstanding at December 31, 1993, the carrying value of which approximated
market. The Company had foreign currency options with face values of $31,958 and
$52,600 at December 31, 1994 and 1993, respectively, expiring in the subsequent
year. The unamortized premiums are amortized to income over the option periods
and amounted to $520 and $999 at December 31, 1994 and 1993, respectively.
Medium-term notes, carried at the discounted value of $59,983, had an estimated
fair value of $54,500 at December 31, 1994. At December 31, 1993, the fair value
of the notes approximated their carrying value of $30,000.
10 Shareholders' Equity
Common Stock In 1992, the Company increased the number of authorized shares of
Common Stock from 150 million to 300 million. Changes in outstanding shares for
the years ended December 31 are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Shares outstanding at
beginning of year 38,292,952 39,162,634 40,647,529
Purchased for treasury (1,718,700) (1,187,100) (1,856,200)
Issued for stock option
and other employee
plans from treasury 99,778 317,418 371,305
---------- ---------- ----------
Shares outstanding
at end of year 36,674,030 38,292,952 39,162,634
========== ========== ==========
Shares held in treasury
at end of year 6,873,908 5,254,986 4,385,304
---------- ---------- ----------
</TABLE>
The Company has stock option plans which provide for the granting of options to
directors, officers and key employees to purchase shares of its Common Stock
within ten years, at prices equal to or greater than the fair market value on
the date of grant.
F-13
<PAGE>
Activity for the years 1994, 1993 and 1992 is as follows:
<TABLE>
<CAPTION>
Average Average Average
Shares Price Shares Price Shares Price
--------- ------- --------- ------- --------- -------
1994 1993 1992
--------------------- -------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Options for Common Stock:
Outstanding at beginning of year 2,524,886 $51.36 2,755,451 $51.22 2,561,623 $46.07
Granted 866,074 38.78 452,272 43.96 590,075 63.47
Cancelled (508,672) 51.94 (446,546) 54.04 (80,580) 53.35
Exercised (36,654) 27.57 (236,291) 30.42 (315,667) 31.76
--------- ------ --------- ------ --------- ------
Outstanding at end of year 2,845,634 $47.80 2,524,886 $51.36 2,755,451 $51.22
========= ====== ========= ====== ========= ======
</TABLE>
At December 31, 1994 and 1993, respectively, there were options for 1,290,051
and 1,137,470 shares exercisable at average prices of $52.73 and $51.18 and
there were 2,299,071 and 2,741,522 shares available for granting options.
Cumulative Foreign Currency Translation Adjustment Amounts credited (charged)
to Shareholders' equity amounted to $7,038, ($10,073) and ($19,804) for the
years ended December 31, 1994, 1993 and 1992, respectively.
Unamortized Value of Restricted Stock and Pension Costs Changes in the
unamortized value of restricted stock represent charges for the market value of
grants made during the year, offset by periodic amortization. Such net changes
amounted to $4, ($577) and ($442) for the years ended December 31, 1994, 1993
and 1992, respectively. In 1994 and 1993, minimum pension liability adjustments,
net of tax benefits, amounting to ($774) and $1,263, respectively, were
reflected in Shareholders' equity.
F-14
<PAGE>
11 Segment and Geographic Information
The Company operates in one industry segment, personal care products. The
Company markets these products around the world. Sales are made and credit is
granted to drug, grocery, variety and discount stores and other comparable
outlets, as well as to wholesalers and distributors in those trades. A small
number of significant customers are financed through highly leveraged capital
structures, making them particularly sensitive to market interest rate changes
and other economic variables.
For the year ended December 31, 1994, the Company had a significant customer
that accounted for 10.3% of the Company's Net sales. No single customer
accounted for 10% or more of Net sales in prior years.
Information about the Company's operations in different geographic areas
follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Net sales
United States $381,975 $363,337 $393,494
Europe 195,748 182,854 204,114
Other international 66,790 65,274 86,505
-------- -------- --------
$644,513 $611,465 $684,113
======== ======== ========
Operating income
United States $142,931 $142,399 $167,571
Europe 27,112 31,347 55,018
Other international 10,314 2,114 5,239
Unallocated items, net (28,742) (29,510) (33,096)
Restructuring and
other charges - (30,042) -
-------- -------- --------
$151,615 $116,308 $194,732
======== ======== ========
Identifiable assets at
December 31
United States $212,346 $197,546 $196,990
Europe 152,295 153,016 158,835
Other international 14,434 11,836 17,156
-------- -------- --------
$379,075 $362,398 $372,981
======== ======== ========
</TABLE>
Certain overhead costs are allocated to the geographic areas based on the
anticipated benefit to be derived by the area. Restructuring and other charges
of $30,042 reduced 1993 Operating income of the United States, Europe, Other
international and Unallocated items, net by $2,237, $16,921, $1,781 and $9,103,
respectively.
F-15
<PAGE>
Independent Auditors' Report
KPMG
To the Board of Directors and Shareholders of Tambrands Inc.:
We have audited the accompanying consolidated balance sheets of Tambrands Inc.
and subsidiaries as of December 31, 1994 and 1993 and the related consolidated
statements of earnings, retained earnings and cash flows for each of the years
in the three-year period ended December 31, 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Tambrands Inc. and
subsidiaries as of December 31, 1994 and 1993 and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1994, in conformity with generally accepted accounting
principles.
As discussed in the notes to the consolidated financial statements, the Company
changed its method for accounting for postemployment benefits in 1993 and for
postretirement benefits in 1992.
KPMG PEAT MARWICK LLP
Stamford, Connecticut
January 24, 1995
F-16
<PAGE>
SCHEDULE VIII
TAMBRANDS INC. AND SUBSIDIARIES
RESERVES
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
($ in thousands)
<TABLE>
<CAPTION>
1994 1993 1992
----- ----- -----
<S> <C> <C> <C>
Reserve deducted in the balance sheet
from the asset to which it applies
Allowance for doubtful accounts:
Balance at beginning of period $1,453 $1,560 $1,580
Additions charged to cost and expenses 93 556 532
Reclassification of unrecoverable promotional
allowance & other 11 (144) (88)
Write-off of bad debts (101) (519) (464)
------ ------ ------
Balance at end of period $1,456 $1,453 $1,560
====== ====== ======
</TABLE>
F-17
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors and Shareholders
Tambrands Inc.:
Under date of January 24, 1995, we reported on the consolidated balance sheets
of Tambrands Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of earnings, retained earnings and cash flows
for each of the years in the three-year period ended December 31, 1994, as
contained in the annual report on Form 10-K for the year 1994. Our report
refers to a change in accounting for postemployment benefits in 1993 and
postretirement benefits in 1992. In connection with our audits of the
aforementioned consolidated financial statements, we also have audited the
related financial statement schedule as listed in Item 14(a)2 of the annual
report on Form 10-K for the year 1994. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits.
In our opinion, the financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Stamford, Connecticut
January 24, 1995
F-18
<PAGE>
Supplementary Financial Information and Quarterly Data
quarterly data
(unaudited)
<TABLE>
<CAPTION>
First Second Third Fourth
-------------- -------------- -------------- --------------
(in millions, except per share amounts) 1994 1993 1994 1993(a) 1994 1993 1994 1993
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $139.2 $154.3 $165.6 $149.0 $175.3 $161.4 $164.4 $146.7
Gross profit 95.3 105.1 113.0 100.9 117.6 107.5 112.5 96.2
Net earnings before cumulative
effect of accounting change 22.0 32.2 20.0 (3.4) 25.0 23.8 22.7 21.1
Per share 0.58 0.82 0.54 (0.09) 0.68 0.62 0.62 0.55
Net earnings 22.0 21.9 20.0 (3.4) 25.0 23.8 22.7 21.1
Per share 0.58 0.56 0.54 (0.09) 0.68 0.62 0.62 0.55
</TABLE>
(a) Results include Restructuring and other charges as described in the notes to
the consolidated financial statements.
F-19
<PAGE>
Index to Exhibits
-----------------
Exhibit
Number Description
------- -----------
3(4) By-Laws of the Company, as amended.
10(9)(d) Employment Protection Agreement between the Company and Mr.
Jerome B. Wainick, dated as of June 18, 1990, and First Amendment
to Employment Protection Agreement between the Company and Mr.
Jerome B. Wainick, dated as of October 16, 1990.
10(9)(e) Employment Protection Agreement between the Company and Mr. Harry
E. Raber, dated as of August 13, 1992.
10(10) Resolution of the Board of Directors of the Company with respect
to the compensation of the Chairman of the Board, adopted on
October 25, 1994.
10(11) Resolution of the Board of Directors of the Company with respect
to the compensation of the Board, adopted on December 13, 1994.
10(14) Annual Incentive Plan of the Company.
10(17) Letter Agreement between the Company and Mr. Thomas Soper, III,
dated as of August 29, 1994.
10(18) Letter Agreement between the Company and Mr. Thomas J. Mason,
dated as of October 18, 1994.
12 Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of the Company.
23 Independent Auditors' Consent.
24 Powers of attorney.
27 Financial Data Schedule
The Company will furnish a copy of any exhibit to a shareholder requesting
such exhibit in writing upon payment by the shareholder of a fee representing
the Company's reasonable expenses in furnishing such exhibit.
<PAGE>
EXHIBIT 3.(4)
BY-LAWS
OF
TAMBRANDS INC.
--------------
as amended through January 31, 1995
ARTICLE I
STOCKHOLDERS.
------------
Section 1. The annual meeting of the stockholders of the Corporation
shall be held, at such time and at such place within or without the State of
Delaware as may be fixed by the Board of Directors from time to time, for the
purpose of electing directors and for the transaction of such other business as
may properly be brought before the meeting. Any previously scheduled annual
meeting of the stockholders may be postponed by resolution of the Board of
Directors upon public notice given on or prior to the date previously scheduled
for such annual meeting of stockholders. To be properly brought before an
annual meeting, business must be (a) specified in the notice of meeting (or any
---
supplement thereto) given by or at the direction of the Board of Directors, (b)
---
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
---
stockholder of the Corporation who was a stockholder of record at the time of
giving of notice provided for in this Section 1, who is entitled to vote at the
meeting and who complied with the notice procedures set forth in this Section 1.
For business to be properly brought before an annual meeting by a stockholder,
if such business is related to the election of directors of the Corporation, the
procedures in Article II, Section 9 of these By-Laws must be complied with. If
such business relates to any other
<PAGE>
matter, the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed to and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the 90th day
prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made.
Such stockholder's notice shall set forth in writing as to each matter the
stockholder proposes to bring before the annual meeting (i) a brief description
---
of the business desired to be brought before the annual meeting, the reasons for
conducting such business at the annual meeting, and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (ii) as to the stockholder giving the notice
----
and the beneficial owner, if any, on whose behalf the nomination or proposal is
made (A) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (B) the class and number
of shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner. Notwithstanding anything in these By-
Laws to the contrary, no business shall be conducted at any annual meeting
except in accordance with the procedures set forth in this Section 1. The
Chairman of the meeting shall, if the facts warrant, determine and declare to
the meeting that business was not properly brought before the meeting in
accordance with the provisions of this Section 1, and if he should so determine,
the Chairman shall declare to the meeting that any such business not properly
brought before the meeting shall not be transacted. For purposes of this Section
1 and Article II, Section 9, "public announcement" shall mean disclosure in a
press release reported by the
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<PAGE>
Dow Jones News Service, Associated Press or comparable national news service or
in a document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). In addition to the provisions of this
Section 1, a stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth herein. Nothing in these By-Laws shall be deemed to affect
any rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2. Special meetings of the stockholders may be held only upon
call of the Board of Directors or of the Executive Committee or of the Chairman
of the Board or of the President, at such time and at such place within or
without the State of Delaware as may be fixed by the Board of Directors or by
the Executive Committee or by the Chairman of the Board or by the President, as
the case may be, and as may be stated in the notice setting forth such call.
Any previously scheduled special meeting of the stockholders may be postponed by
resolution of the Board of Directors upon public notice given on or prior to the
date previously scheduled for such special meeting of stockholders.
The purpose or purposes of any special meeting of stockholders shall
be set forth in the notice of meeting, and, except as otherwise required by law
or by the Certificate of Incorporation, no business shall be transacted at any
special meeting of stockholders other than the items of business stated in the
notice of meeting. The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 2, and if
he should so determine, the Chairman shall declare to the meeting that any such
business not properly brought before the meeting shall not be transacted.
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<PAGE>
Section 3. Notice of the time and place of every meeting of
stockholders shall be delivered personally or mailed not less than ten days nor
more than 60 days prior to such meeting to each stockholder of record entitled
to vote thereat, who shall have furnished a written address to the Secretary of
the Corporation for the purpose. Such further notice shall be given as may be
required by law. Meetings may be held without notice, if all stockholders
entitled to vote are present, or if notice is waived by those not present.
Section 4. The holders of record of a majority of the shares of the
capital stock of the Corporation, issued and outstanding, and entitled to vote,
present in person or by proxy shall, except as otherwise provided by law,
constitute a quorum at all meetings of the stockholders. Whether or not a
quorum is present at the meeting, the Chairman of the meeting or the holders of
a majority of such shares so present or represented may adjourn the meeting from
time to time. The stockholders present at any duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of sufficient stockholders to constitute the remaining stockholders less than a
quorum.
Section 5. Meetings of the stockholders shall be presided over by the
Chairman of the Board, or if he is not present, by the President, or if neither
of them is present, by a Vice President, or, if neither the Chairman of the
Board, the President nor a Vice President is present, by a Chairman to be chosen
at the meeting. The Secretary of the Corporation, or in his absence, an
Assistant Secretary, shall act as Secretary of the meeting, or, if neither the
Secretary nor an Assistant Secretary is present, then the meeting shall choose
its Secretary.
Section 6. Each stockholder entitled to vote at any meeting shall
have one vote in person or by proxy for each share of stock held by him which
has voting power upon the matter in question at the time; but no proxy shall be
voted on after three years from its date, unless such proxy provides for a
longer period.
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<PAGE>
Section 7. Unless otherwise provided by express provision of
applicable law, the Certificate of Incorporation or these By-Laws, all matters
to be decided at a meeting of stockholders shall be by the vote of a majority of
the shares present, either in person or by proxy, that are entitled to vote at
such meeting, except that the election of directors shall be by a plurality of
votes cast. At all elections of directors by the stockholders the voting shall
be by ballot. The Corporation shall, in advance of any meeting of stockholders,
appoint one or more inspectors to act at the meeting and make a written report
thereof. The Corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate is able to act at a meeting of stockholders, the Chairman of such
meeting shall appoint one or more inspectors to act at such meeting. No
director or candidate for the office of director shall be appointed as such
inspector. Each inspector shall first take and subscribe an oath or affirmation
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability, shall make a certificate
of the result of the vote taken after the balloting, and shall have such other
duties as are prescribed by law. The Chairman of the meeting shall fix and
announce at the meeting the date and time of the opening and the closing of the
polls for each matter upon which the stockholders will vote at the meeting.
Section 8. In order to determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action
(other than action by consent, which is the subject of Article I, Section 9 of
these By-Laws), the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not be more than
60 nor less than 10 days before the date of any such
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<PAGE>
meeting, nor more than 60 days prior to any other such action. A determination
of the stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting, provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
Section 9. (a) Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of the stockholders of the Corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may, subject to the provisions
of this Section 9, be taken without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the actions so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered to the Corporation. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered to the Corporation, written consents signed by
a sufficient number of holders to take action are delivered to the Corporation.
(c) The record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be fixed by the Board of
Directors. Any stockholder seeking to have the stockholders authorize or take
corporate action by written consent without a meeting shall, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date. Upon receipt of such a request, the Secretary of the Corporation
shall, as promptly as practicable, direct the Chairman or
-6-
<PAGE>
the President to call a special meeting of the Board of Directors to be held as
promptly as practicable, but in any event not more than 10 days following the
date of receipt of such a request. At such a meeting, the Board of Directors
shall fix a record date which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which shall not be more than 10 days after the date that the resolution
fixing the record date is adopted by the Board of Directors. Notice of the
record date shall be published in accordance with the rules and policies of any
stock exchange on which securities of the Corporation are then listed or, if the
securities of the Corporation are not listed on a stock exchange, then notice of
the record date shall be published in accordance with the rules and policies of
the National Association of Securities Dealers Automatic Quotation National
Market System. If no record date has been so fixed by the Board of Directors,
the record date for determining the stockholders entitled to consent to
corporate action in writing without a meeting, where no prior action by the
Board of Directors is required by the Delaware General Corporation Law, shall be
the first date on which a signed written consent setting forth the action taken
or proposed to be taken is delivered to the Corporation. If no date has been
fixed by the Board of Directors and prior action by the Board of Directors is
required by the Delaware General Corporation Law, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board of Directors adopts the resolution taking such prior action.
(d) In the event of the delivery to the Corporation of a written
consent or consents purporting to represent the requisite voting power to
authorize or take corporate action and/or related revocations, the Secretary of
the Corporation shall provide for the safekeeping of such consents and
revocations and shall, as promptly as practicable, engage inspectors for the
purpose of promptly performing a ministerial review of the validity of the
consents and revocations. No action by written consent without a meeting
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<PAGE>
shall be effective until such inspectors have completed their review, determined
that the requisite number of valid and unrevoked consents has been obtained to
authorize or take actions specified in the consents and certified such
determination for entry in the records of the Corporation for the purpose of
recording the proceedings of meetings of the stockholders.
(e) For purposes of this Section 9, delivery to the Corporation shall
be effected by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested.
ARTICLE II
DIRECTORS.
---------
Section 1. The number of directors shall be fixed by the Board of
Directors from time to time by appropriate resolution, provided that the number
of directors shall not be less than three. A director shall hold office until
his successor is elected and has qualified. A director need not be a
stockholder. One-third of the total number of directors shall constitute a
quorum for the transaction of business, provided that a quorum shall never be
less than two directors. If at any meeting of the Board of Directors there
shall be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum shall have been obtained. The Board of
Directors may designate the Chairman of the Board as an officer.
Section 2. Whenever any vacancy shall have occurred in the Board of
Directors by reason of death, resignation, increase in the number of directors,
or otherwise, it shall be filled by a majority of the remaining directors,
though less than a quorum, and the person so chosen shall hold office for the
unexpired term of the director whom he will have succeeded, or in a case of the
increase of the number of directors, the person so chosen shall
-8-
<PAGE>
hold office until his successor is elected and has qualified.
Section 3. Meetings of the Board of Directors shall be held at such
place within or without the State of Delaware as may from time to time be fixed
by resolution of the Board, or as may be specified in the notice of any meeting.
Regular meetings of the Board of Directors shall be held at such times as may
from time to time be fixed by resolution of the Board. Notice need not be given
of regular meetings of the Board held at times fixed by resolution of the Board.
A meeting of the Board may be held without notice immediately after the annual
meeting of stockholders at the same place at which such meeting was held.
Special meetings of the Board of Directors may be called at any time
by or at the direction of the Board of Directors itself, the Executive
Committee, the Chairman of the Board or the President or, in the event of the
absence or disability of the Chairman and the President, by or at the direction
of the Secretary by oral, telegraphic or written notice to each director, duly
served or sent at least 24 hours before such meeting or, if mailed, mailed no
later than the fourth calendar day before such meeting. Meetings may be held at
any time without notice if all the directors are present or if those not present
waive notice of the meeting, in writing.
Section 4. The Board of Directors may, in its discretion, by
resolution passed by a majority of the whole Board, designate an Executive
Committee to consist of the Chairman or the President and such number of other
directors (not less than two) as the Board may from time to time determine,
which Committee shall have, and may exercise when the Board is not in session,
all the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it, may declare a
dividend or dividends, may authorize the issuance of stock and may adopt a
certificate of ownership and merger pursuant to Section 253 (or its successor
provision) of the Delaware General Corporation Law; but the power and authority
of the Executive Committee shall be subject to the provisions of Section
-9-
<PAGE>
141(c) (or its successor provision) of the Delaware General Corporation Law and
any other applicable statute.
The Board may designate one or more directors as alternate members of
the Executive Committee, who may replace any absent or disqualified member at
any meeting of the Executive Committee. The Board shall have the power at any
time to change the membership of the Executive Committee, or to fill vacancies
in it, or to dissolve it. The Executive Committee may make such rules for the
conduct of its business as it shall from time to time deem necessary or
appropriate. A majority of the members of the Executive Committee shall
constitute a quorum.
Section 5. The Board of Directors may, in its discretion, by
resolution passed by a majority of the whole Board, appoint one or more other
Committees in addition to the Executive Committee, each consisting of one or
more of the directors of the Corporation, which shall have and may exercise such
of the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation as shall be conferred by the resolution
appointing it, and which, in furtherance thereof, may authorize the seal of the
Corporation to be affixed to all papers which may require it; but the power and
authority of any such Committee shall be subject to the provisions of Section
141(c) (or its successor provision) of the Delaware General Corporation law and
any other applicable statute.
The Board may designate one or more directors as alternate members of
any such Committee, who may replace any absent or disqualified member at any
meeting of such Committee. The Board shall have the power at any time to change
the membership of any such Committee, or to fill vacancies in it, or to dissolve
it. Any such Committee may make such rules for the conduct of its business as
it shall from time to time deem necessary or appropriate. Except as may be
otherwise provided by resolution of the Board, a majority of the members of any
such Committee, composed of more than two members, shall constitute a quorum.
Section 6. Each director who is not also an officer of the Corpo-
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<PAGE>
ration shall receive as compensation for all his or her services as a Director,
an annual fee plus an additional fee for attendance at each meeting of the Board
of Directors and each meeting of any committee of the Board of which he or she
is a member, each such fee to be in such amount as may from time to time be
fixed by resolution of the Board. Directors who are also officers shall receive
no additional compensation for their services as Directors of the Corporation.
Section 7. The Board of Directors may (but need not) elect one of the
directors as Chairman of the Board, but a director so elected shall not be an
officer or employee of the Corporation, and shall not exercise the functions of
an officer, unless expressly so designated as provided in Section 1 of Article
III. The Chairman of the Board shall serve until the meeting of the Board next
following the ensuing annual meeting of stockholders but may be removed at any
time by the affirmative vote of a majority of the members of the Board then in
office.
Section 8. Each director shall retire from the Board not later than
the date of the annual meeting of the stockholders of the Corporation next
following his or her 72nd birthday.
Section 9. Nomination of Directors. (a) Only persons who are
-----------------------
nominated in accordance with the procedures set forth in this Section 9 shall be
eligible for election as directors of the Corporation. Nominations of persons
for election to the Board of Directors of the Corporation may be made at any
annual meeting of stockholders by or at the direction of the Board of Directors
or by any stockholder of the Corporation entitled to vote for the election of
directors at the meeting who was a stockholder of record at the time of giving
of notice provided for in this Section 9 and who complies with the notice
procedures set forth in this Section 9. Any such nomination by a stockholder
shall be made pursuant to timely notice in writing to the Secretary of the
Corporation. To be timely notice for an annual meeting, a stockholder's notice
shall be delivered to the Secretary of the Corporation at the principal
executive offices of the Corporation not less than 60 days nor
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<PAGE>
more than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such
annual meeting or the 10th day following the day on which public announcement
(as defined in Article I, Section 1) of the date of such meeting is first made.
Notwithstanding anything in the foregoing sentence to the contrary, in the event
that the number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement naming all of the
nominees for director or specifying the size of the increased Board of Directors
made by the Corporation at least 70 days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice required by this Section
9 shall also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary of
the Corporation at the principal executive offices of the Corporation not later
than the close of business on the 10th day following the day on which such
public announcement is first made by the Corporation. Such stockholder's notice
shall set forth in writing (i) as to each person whom the stockholder proposes
to nominate for election or re-election as a director (A) the name, age,
business address and residence address of such person, (B) the principal
occupation or employment of such person, (C) the number of shares of stock of
the Corporation which are beneficially owned by such person, and (D) any other
information relating to such person that is required to be disclosed in
connection with the solicitation of proxies for election of directors, or as
otherwise required, in each case pursuant to Regulation 14A under the Exchange
Act (including, without limitation, such person's written consent to being named
in a proxy statement as a nominee and to serving as a director if elected); and
(ii) as to the stockholder giving the notice and the beneficial owner, if any,
on
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<PAGE>
whose behalf the nomination is made (A) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner and (B) the class and number of shares of the Corporation which are
owned beneficially and of record by such stockholder and such beneficial owner.
(b) Nominations of persons for election to the Board of Directors of
the Corporation may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (i)
by or at the direction of the Board of Directors or (ii) provided that the Board
of Directors has determined that directors shall be elected at such special
meeting, by any stockholder of the Corporation who is a stockholder of record at
the time of giving of notice provided for in this Section 9, who shall be
entitled to vote at the meeting and who complies with the notice procedures set
forth in this Section 9. In the event the Corporation calls a special meeting
of stockholders for the purpose of electing one or more directors to the Board
of Directors, any such stockholder may nominate a person or persons (as the case
may be), for election to such position(s) as specified in the Corporation's
notice of meeting, if the stockholder's notice shall be delivered to the
Secretary of the Corporation at the principal executive offices of the
Corporation not earlier than the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to such
special meeting or the 10th day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.
(c) At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a director shall furnish to the Secretary
of the Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a director of the Corporation unless nominated in accordance
with the procedures set forth in this Section 9. The
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<PAGE>
Chairman of the meeting shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in accordance with the procedures
prescribed by these By-Laws and in that event the defective nomination shall be
disregarded. In addition to the provisions of this Section 9, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth herein.
ARTICLE III
OFFICERS.
--------
Section 1. The Board of Directors as soon as may be after the
election held in each year shall choose a President of the Corporation, one or
more Vice Presidents, a Secretary and a Treasurer. One or more of the Vice
Presidents may be designated Executive Vice President, and one or more of the
Vice Presidents may be designated Senior Vice President. The Board of Directors
or the Executive Committee may from time to time appoint such additional Vice
Presidents, such Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and such other officers as it may deem proper and may fill vacancies
in any office. The office of Secretary and Treasurer may be held by the same
person and a Vice President of the Corporation may be either the Secretary or
the Treasurer. The President shall be chosen from the directors. The Board of
Directors may at any time choose a Chairman of the Board.
Section 2. The term of office of all officers shall be one year, or
until their respective successors are chosen, but any officer may be removed
from office at any time by the affirmative vote of a majority of the members of
the Board then in office.
Section 3. The officers of the Corporation shall each have such
powers and duties as generally pertain to their respective offices, as well as
such powers and duties as from time to time may be conferred by the Board of
Directors or by the Executive Committee. The Treasurer and the Assistant
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<PAGE>
Treasurers may be required to give bond for the faithful discharge of their
duties, in such form and with such surety or sureties as the Board of Directors
may from time to time prescribe.
ARTICLE IV
INDEMNIFICATION.
---------------
Section 1. Nature of Indemnity. The Corporation shall indemnify any
-------------------
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was or has agreed to become a director or officer of the Corporation, or is or
was serving or has agreed to serve at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, including an employee benefit plan, or by reason of any action
alleged to have been taken or omitted in such capacity, and may indemnify any
person who was or is a party or is threatened to be made a party to such an
action, suit or proceeding by reason of the fact that he is or was or has agreed
to become an employee or agent of the Corporation, or is or was serving or has
agreed to serve at the request of the Corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including an employee benefit plan, against expenses (including attorneys'
fees), judgments, fines, excise taxes or penalties (including those payable
under the Employee Retirement Income Security Act of 1974, as amended) and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, except to the extent prohibited by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted the Corporation
to provide prior to such amendment), provided, however, that, except as provided
-------- -------
in Section 5 of this Article IV,
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<PAGE>
the Corporation shall indemnify any such person seeking indemnification in
connection with an action, suit or proceeding (or part thereof) initiated by
such person only if such action, suit or proceeding (or part thereof) was
authorized by the Board of Directors.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
---- ----------
shall not, of itself, create a presumption that the person did not act in
accordance with any applicable standard of conduct under the Delaware General
Corporation Law making it permissible for the Corporation to indemnify the
claimant for the amount claimed.
Section 2. Successful Defense. To the extent that a director,
------------------
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Section
1 hereof or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 3. Determination That Indemnification Is Proper. Any
--------------------------------------------
indemnification of a director or officer of the Corporation under Section 1 of
this Article IV (unless ordered by a court) shall be made by the Corporation
unless a determination is made that indemnification of the director or officer
is not proper in the circumstances because he has not met the applicable
standard of conduct or because indemnification would otherwise be prohibited
under the Delaware General Corporation Law. Any indemnification of an employee
or agent of the Corporation under Section 1 of this Article IV (unless ordered
by a court) may be made by the Corporation upon a determination that
indemnification of the employee or agent is proper in the circumstances because
he has met the applicable standard of conduct and indemnification is not
otherwise prohibited. Any such determination shall be made (a) if requested by
the indemnitee, by Independent Counsel (as hereinafter defined) in a written
opinion to the Board of Directors, a copy of which shall be delivered to the
indemnitee, or (b) if no request is made by
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<PAGE>
the indemnitee for a determination by Independent Counsel, (i) by the Board of
Directors by a majority vote of a quorum consisting of Disinterested Directors
(as hereinafter defined), or (ii) if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable, or even if obtainable,
such quorum of Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered to
the indemnitee, or (iii) by the stockholders of the Corporation. In the event
the determination of entitlement to indemnification is to be made by Independent
Counsel at the request of the indemnitee, Independent Counsel shall be selected
by the indemnitee unless the indemnitee shall request that such selection be
made by the Board of Directors, in which event Independent Counsel shall be
selected by the Board of Directors. If it is so determined that the indemnitee
is entitled to indemnification, payment to the indemnitee shall be made within
10 days after such determination. In making a determination with respect to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall presume that the indemnitee is entitled to
indemnification under this Article IV, and the Corporation shall have the burden
of proof to overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that presumption. For
purposes of this Section 3, "Disinterested Director" means a director of the
Corporation who is not and was not a party to the matter in respect of which
indemnification is sought by the indemnitee, and "Independent Counsel" means a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (a) the Corporation or the indemnitee in any matter
material to either such party, or (b) any other party to the matter giving rise
to a claim for indemnification. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or the indemnitee in an action
to determine the indemnitee's rights under this Article IV.
Section 4. Advance Payment of Expenses. Expenses (including
---------------------------
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<PAGE>
attorney's fees) incurred by a director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article IV.
Such expenses (including attorney's fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate. The Board of Directors may authorize the Corporation's
counsel to represent such director, officer or employee or agent in any action,
suit or proceeding, whether or not the Corporation is a party to such action,
suit or proceeding.
Section 5. Procedure for Indemnification of Directors and Officers.
-------------------------------------------------------
Any indemnification of a director or officer of the Corporation under Sections 1
and 2 of this Article IV, or advance of costs, charges or expenses to a director
or officer under Section 4 of this Article IV, shall be made promptly, and in
any event within 30 days, upon the written request of the director or officer.
If a determination by the Corporation that the director or officer is entitled
to indemnification or advances pursuant to this Article IV is required, and the
Corporation fails to respond within 30 days to a written request therefor, the
Corporation shall be deemed to have approved such request. If the Corporation
denies a written request for indemnification or advances, in whole or in part,
or if payment in full
pursuant to such request is not made within 30 days, the right to
indemnification or advances as granted by this Article IV shall be enforceable
by the director or officer in any court of competent jurisdiction. Such
person's costs and expenses incurred in connection with successfully
establishing his right to indemnification or advances, in whole or in part, in
any such action shall also be indemnified by the Corporation. It shall be a
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<PAGE>
defense to any such action (other than an action brought to enforce a claim for
advance of costs, charges and expenses under Section 4 of this Article IV where
the required undertaking, if any, has been received by the Corporation) that the
claimant has not met the applicable standard of conduct or that indemnification
is otherwise prohibited under the Delaware General Corporation Law, but the
burden of proving such defense shall be on the Corporation. Neither the failure
of the Corporation (including the Board of Directors, Independent Counsel and
the Corporation's stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct, nor the
fact that there has been an actual determination by the Corporation (including
the Board of Directors, Independent Counsel and the Corporation's stockholders)
that the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met the
applicable standard of conduct.
Section 6. Survival; Preservation of Other Rights. The foregoing
--------------------------------------
provisions of this Article shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in such
capacity at any time while these provisions and the relevant provisions of the
Delaware General Corporation Law are in effect, and any repeal or modification
thereof shall not affect any right or obligation then existing with respect to
any state of facts then or previously existing or any action, suit or proceeding
previously or thereafter brought or threatened based in whole or in part upon
any such state of facts. Such contract may not be modified retroactively
without the consent of such director, officer, employee or agent.
The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall inure to the benefit of
the heirs, executors and administrators of such a person and shall continue as
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<PAGE>
to a person who has ceased to be a director, officer, employee or agent.
The Corporation may, upon a vote of a majority of the directors, enter
into an indemnity agreement with any director, officer, employee or agent of the
Corporation providing for the maximum right to indemnification permissible under
the applicable laws of the State of Delaware.
Section 7. Insurance. The Corporation shall purchase and maintain
---------
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, including an employee benefit plan,
against any liability asserted against him and incurred by him or on his behalf
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article IV, provided that such insurance is available on
--------
acceptable terms, which determination shall be made by a vote of a majority of
the entire Board of Directors.
Section 8. Savings Clause. If this Article or any portion hereof
--------------
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the full extent permitted by any applicable portion
of this Article that shall not have been invalidated and to the full extent
permitted by applicable law.
Section 9. Amendments. This Article may be amended solely by the
----------
affirmative vote of (i) a majority of the Board of Directors, but only to the
extent that such amendment would permit the Corporation to provide broader
indemnification rights than were provided hereby immediately prior to such
amendment, or (ii) the holders of 75% or more of the outstanding shares of
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<PAGE>
Common Stock of the Corporation.
ARTICLE V
CERTIFICATES OF STOCK.
---------------------
Section 1. The interest of each stockholder of the Corporation shall
be evidenced by certificates for shares of stock in such form as the Board of
Directors may from time to time prescribe. The shares in the stock of the
Corporation shall be transferred on the books of the Corporation by the holder
thereof in person or by his attorney, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof of
the authenticity of the signature as the Corporation or its agents may
reasonably require.
Section 2. The certificates of stock shall be signed by the Chairman
of the Board or the President or a Vice President and by the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer, and may be
countersigned and registered in such manner, if any, and sealed as the Board of
Directors or the Executive Committee may by resolution prescribe.
ARTICLE VI
CHECKS, NOTES, ETC.
------------------
All checks and drafts on the Corporation's bank accounts and all bills
of exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers, agent or agents as shall be thereunto authorized from time to time by
the Board of Directors or the Executive Committee.
ARTICLE VII
OFFICES.
-------
The Corporation and the stockholders and the directors may have
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<PAGE>
offices outside of the State of Delaware at such places as shall be determined
from time to time by the Board of Directors or the Executive Committee.
ARTICLE VIII
AMENDMENTS.
----------
The By-Laws of the Corporation, regardless of whether made by the
stockholders or by the Board of Directors, may be amended, added to, rescinded
or repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change is given in the notice of the meeting.
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<PAGE>
EXHIBIT 10.(9)(D)
EMPLOYMENT PROTECTION AGREEMENT
-------------------------------
THIS AGREEMENT between Tambrands Inc., a Delaware corporation (the
"Corporation"), and Jerome B. Wainick (the "Executive"), dated as of this 18th
day of June, 1990.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Corporation and the Executive have previously entered into
an agreement providing the Corporation and the Executive with certain rights
upon the occurrence of a change of control (the "Prior Agreement") to assure the
Corporation of continuity of management in the event of any Change of Control;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Corporation and the
Executive as follows:
1. Operation of Agreement. The effective date of this Agreement shall
----------------------
be the date on which a Change of Control (as defined below) occurs (the
"Effective Date"), provided that if the Executive is not employed by the
Corporation on the Effective Date this Agreement shall be void and without
effect. This Agreement shall terminate on May 31, 1993, provided that the
termination date of this Agreement shall be extended for one additional year on
June 1, 1991 and each subsequent June 1, unless the Executive shall have
received written notice from the Corporation prior to the March 1 immediately
preceding such June 1 that the Board of Directors of the Corporation (the
"Board") has determined that the termination date of this Agreement shall not be
so extended. Notwithstanding the foregoing, this Agreement shall not terminate
on the date determined in accordance with the preceding sentence if a Change of
Control shall have occurred prior to such date.
2. Definitions. (a) Change of Control. For purposes of this
----------- -----------------
Agreement, a "Change of Control" shall be deemed to have occurred if: (i) any
---
person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), and as used in Sections 13(d)
and 14(d) thereof)), excluding the Corporation, any majority owned subsidiary of
the Corporation (a "Subsidiary") and any employee benefit plan sponsored or
maintained by the Corporation or any Subsidiary (including any trustee of such
plan acting as trustee), but including a "group" as defined in Section 13(d)(3)
of the Exchange Act (a "Person"), becomes the beneficial owner of shares of the
Corporation having at least 20% of the total number of votes that may be cast
for the election of directors of the Corporation (the "Voting Shares") provided,
however, that such an event shall not constitute a Change of Control if the
acquiring Person has entered into an agreement with the Corporation approved by
the Board which materially restricts the right of such Person to direct or
influence the management or policies of the Corporation; (ii) the shareholders
----
of the Corporation shall approve any merger or other business combination of the
Corporation, sale of the Corporation's assets or combination of the foregoing
transactions (a "Transaction") other than a Transaction involving only the
Corporation and one or more of its Subsidiaries, or a Transaction immediately
following which the shareholders of the Corporation immediately prior to the
Transaction continue to have a majority of the voting power in the resulting
entity excluding for this purpose any shareholder owning directly or indirectly
more than 10% of the shares of the other company involved in the Transaction, or
(iii) within any 24-month period beginning on or after May 31, 1990, the persons
-----
who
<PAGE>
were directors of the Corporation immediately before the beginning of such
period (the "Incumbent Directors") shall cease (for any reason other than death)
to constitute at least a majority of the Board or the board of directors of any
successor to the Corporation, provided that any director who was not a director
as of June 1, 1990 shall be deemed to be an Incumbent Director if such director
was elected to the Board by, or on the recommendation of or with the approval
of, at least two-thirds of the directors who then qualified as Incumbent
Directors either actually or by prior operation of this Section 2(a)(iii).
(b) Participation by Executive. Notwithstanding the foregoing, no
--------------------------
Change of Control shall be deemed to have occurred for purposes of this
Agreement by reason of any actions or events in which the Executive participates
in a capacity other than in his capacity as the Executive (or as a director of
the Corporation or a Subsidiary, where applicable).
3. Employment Period. If the Executive is employed on the Effective
-----------------
Date, the Corporation agrees to continue the Executive in its employ, and the
Executive agrees to remain in the employ of the Corporation, for the period (the
"Employment Period") commencing on the Effective Date and ending on the earliest
to occur of (i) the second anniversary of the Effective Date, (ii) the
--- ----
Executive's normal retirement date under the Corporation's retirement plans as
in effect from time to time and (iii) the date of any termination of the
-----
Executive's employment in accordance with Section 6 of this Agreement.
4. Position and Duties. (a) No Reduction in Position. During the
------------------- ------------------------
Employment Period, the Executive's position (including titles), authority and
responsibilities shall be at least commensurate with the highest of those held,
exercised and assigned at any time during the 90-day period immediately
preceding the Effective Date.
(b) Business Time. From and after the Effective Date, the Executive
-------------
agrees to devote his full business time during normal business hours to the
business and affairs of the Corporation and to use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him hereunder, to
the extent necessary to discharge such responsibilities, except for
(i) reasonable time spent in serving on corporate, civic or charitable
boards or committees approved by the Board, in each case only if and
to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation and sick leave to which he is entitled.
It is expressly understood and agreed that the Executive's continuing to serve
on any boards and committees on which he is serving or with which he is
otherwise associated with the consent or approval of the Corporation immediately
preceding the Effective Date shall not be deemed to interfere with the
performance of the Executive's services to the Corporation.
5. Compensation. (a) Base Salary. During the Employment Period, the
------------ -----------
Executive shall receive a base salary ("Base Salary") at a monthly rate at least
equal to the monthly salary paid to the Executive by the Corporation and any of
its affiliated companies immediately prior to the Effective Date. The Base
Salary shall be reviewed at least once each year after the Effective Date, and
may be increased (but not decreased) at any time and from time to time by action
of the Board or any committee thereof or any individual having authority to take
such action in accordance with the Corporation's regular practices. Neither
payment of the Base Salary nor payment of any increased Base Salary after the
Effective
- 2 -
<PAGE>
Date shall serve to limit or reduce any other obligation of the Corporation
hereunder. For purposes of the remaining provisions of this Agreement, the term
"Base Salary" shall mean Base Salary as defined in this Section 5(a) or, if
increased after the Effective Date, the Base Salary as so increased.
(b) Annual Bonus. In addition to the Base Salary, the Executive shall
------------
be awarded for each fiscal year of the Corporation ending during the Employment
Period an annual bonus (either pursuant to a bonus plan or program of the
Corporation or otherwise) in cash at least equal to the last annual bonus
(annualized, if awarded in respect of a partial year) awarded to the Executive
under the Annual Incentive Plan of the Corporation prior to the Effective Date
("Annual Bonus"). If a fiscal year of the Corporation begins, but does not end,
during the Employment Period, the Executive shall receive an amount with respect
to such fiscal year at least equal to the amount of the Annual Bonus multiplied
by a fraction, the numerator of which is the number of days in such fiscal year
occurring during the Employment Period and the denominator of which is 365.
Each amount payable in respect of the Executive's Annual Bonus shall be paid not
later than the last day of March of the year next following the year for which
the Annual Bonus (or pro-rated portion) is earned or awarded, unless electively
deferred by the Executive pursuant to any deferral programs or arrangements that
the Corporation may make available to the Executive, in which event such
deferred amount shall be payable in accordance with the terms of such deferral
program or arrangement. Neither the Annual Bonus nor any bonus amount paid in
excess thereof after the Effective Date shall serve to limit or reduce any other
obligation of the Corporation hereunder.
(c) Incentive and Savings Plans and Retirement Programs. In addition
---------------------------------------------------
to the Base Salary and Annual Bonus payable as hereinabove provided, during the
Employment Period, the Executive shall be entitled to participate in all
incentive and savings plans and programs, including stock option plans and other
equity based compensation plans, and in all retirement plans, on a basis
providing him with the opportunity to receive compensation (without duplication
of the amount payable as an Annual Bonus) and benefits equal to those provided
by the Corporation to the Executive on an annualized basis under such plans and
programs as in effect at any time during the 90-day period immediately preceding
the Effective Date.
(d) Benefit Plans. During the Employment Period, the Executive and his
-------------
family shall be entitled to participate in or be covered under all welfare
benefit plans and programs of the Corporation and its affiliated companies,
including all medical, dental, disability, group life, accidental death and
travel accident insurance plans and programs, as in effect at any time during
the 90-day period immediately preceding the Effective Date.
(e) Expenses. During the Employment Period, the Executive shall be
--------
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the policies and procedures of the Corporation
as in effect at any time during the 90-day period immediately preceding the
Effective Date.
(f) Vacation and Fringe Benefits. During the Employment Period, the
----------------------------
Executive shall be entitled to paid vacation and fringe benefits in accordance
with the policies of the Corporation as in effect at any time during the 90-day
period immediately preceding the Effective Date.
(g) Office and Support Staff. During the Employment Period, the
------------------------
Executive shall be entitled to an office or offices of a size and with
- 3 -
<PAGE>
furnishings and other appointments, and to secretarial and other assistance, at
least equal to the most favorable of the foregoing provided to the Executive at
any time during the 90-day period immediately preceding the Effective Date.
6. Termination. (a) Death, Disability or Retirement. Subject to the
----------- -------------------------------
provisions of Section 1 hereof, this Agreement shall terminate automatically
upon the Executive's death or attainment of normal retirement age under the
Corporation's retirement plans as in effect from time to time, provided that,
after the Effective Date, the normal retirement age may not be lowered for
purposes of this Agreement without the Executive's consent. The Corporation may
terminate this Agreement, after having established the Executive's Disability,
by giving the Executive written notice of its intention to terminate his
employment, and his employment with the Corporation shall terminate effective on
the 90th day after receipt of such notice if, within 90 days after such receipt,
the Executive shall fail to return to full-time performance of his duties. For
purposes of this Agreement, "Disability" means disability which, after the
expiration of more than 26 weeks after its commencement, is determined to be
total and permanent by a physician selected by the Corporation or its insurers
and acceptable to the Executive or his legal representatives (such agreement to
acceptability not to be withheld unreasonably).
(b) Voluntary Termination. Notwithstanding anything in this Agreement
---------------------
to the contrary, the Executive may, upon not less than 30 days' written notice
to the Corporation, voluntarily terminate employment during the Employment
Period for any reason (including early retirement under the terms of the
Corporation's retirement plan as in effect from time to time), provided that any
termination by the Executive pursuant to Section 6(d) of this Agreement on
account of Good Reason (as defined therein) shall not be treated as a voluntary
termination under this Section 6(b).
(c) Cause. The Corporation may terminate the Executive's employment
-----
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty or gross misconduct on the Executive's
---
part which result or are intended to result in material damage to the
Corporation's business or reputation or (ii) repeated material violations by the
----
Executive of his obligations under Section 4 of this Agreement which violations
are demonstrably willful and deliberate on the Executive's part.
(d) Good Reason. The Executive may terminate his employment during the
-----------
Employment Period for Good Reason. For purposes of this Agreement, "Good
Reason" means
(i) a good faith determination by the Executive that, without his prior
written consent, the Corporation or any of its officers has taken or failed
to take any action (including, without limitation, (A) exclusion of the
---
Executive from consideration of material matters within his area of
responsibility, (B) statements or actions which undermine the Executive's
---
authority with respect to persons under his supervision or reduce his
standing with his peers, (C) a pattern of discrimination against or
---
harassment of the Executive or persons under his supervision and (D) the
---
subjection of the Executive to procedures not generally applicable to other
similarly situated executives) which changes the Executive's position
(including titles), authority or responsibilities under Section 4 of this
Agreement or reduces the Executive's ability to carry out his duties and
responsibilities under Section 4 of this Agreement;
(ii) any failure by the Corporation to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Corporation promptly
- 4 -
<PAGE>
after receipt of notice thereof from the Executive;
(iii) the Corporation's requiring the Executive to be employed at any
location more than 50 miles further from his principal residence than the
location at which the Executive was employed immediately preceding the
Effective Date; or
(iv) any failure by the Corporation to obtain the assumption of and
agreement to perform this Agreement by a successor as contemplated by
Section 14(b) of this Agreement, provided that the successor has had actual
written notice of the existence of this Agreement and its terms and an
opportunity to assume the Corporation's responsibilities under this
Agreement during a period of 10 business days after receipt of such notice.
(e) Notice of Termination. Any termination by the Corporation for
---------------------
Cause or by the Executive for Good Reason during the Employment Period shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 15(c) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice given, in the case
of a termination for Cause, within 10 business days of the Corporation's having
actual knowledge of all of the events giving rise to such termination, and in
the case of a termination for Good Reason, within 180 days of the Executive's
having actual knowledge of the events giving rise to such termination, and which
(i) indicates the specific termination provision in this Agreement relied upon,
---
(ii) sets forth in reasonable detail the facts and circumstances claimed to
----
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the termination date is other than the date
-----
of receipt of such notice, specifies the termination date of this Agreement
(which date shall be not more than 15 days after the giving of such notice).
The failure by the Executive to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.
(f) Date of Termination. For purposes of this Agreement, the term
-------------------
"Date of Termination" means (i) in the case of a termination for which a Notice
---
of Termination is required, the date of receipt of such Notice of Termination
or, if later, the date specified therein and (ii) in all other cases, the actual
date on which the Executive's employment terminates during the Employment
Period.
7. Obligations of the Corporation upon Termination. (a) Death. If
----------------------------------------------- ------
the Executive's employment is terminated during the Employment Period by reason
of the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement other
than those obligations accrued hereunder at the date of his death, including,
for this purpose (i) the Executive's full Base Salary through the Date of
---
Termination, (ii) the product of the Annual Bonus and a fraction, the numerator
----
of which is the number of days in the current fiscal year of the Corporation
through the Date of Termination, and the denominator of which is 365 (the "Pro-
rated Bonus Obligation"), (iii) any compensation previously deferred by the
-----
Executive (together with any accrued earnings thereon) and not yet paid by the
Corporation and (iv) any other amounts or benefits owing to the Executive under
----
the then applicable employee benefit plans or policies of the Corporation (such
amounts specified in clauses (i), (ii), (iii) and (iv) are hereinafter referred
to as "Accrued Obligations"). Unless otherwise directed by the Executive (or,
in the case of any employee benefit plan qualified (a "Qualified Plan") under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as
may be required by such plan), all such Accrued Obligations shall be paid to the
Executive's legal representatives
- 5 -
<PAGE>
in a lump sum in cash within 30 days of the Date of Termination. Anything in
this Agreement to the contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable level of
benefits available to surviving families of executives of the Corporation and
its affiliates under such plans, programs and policies relating to family death
benefits, if any, of the Corporation and its affiliates in effect at any time
during the 90-day period immediately preceding the Effective Date.
(b) Disability. If the Executive's employment is terminated by reason
----------
of the Executive's Disability, the Executive shall be entitled, after the Date
of Termination until the date when the Employment Period would otherwise have
terminated, to continue to participate in or be covered under the benefit plans
and programs referred to in Section 5(d) of this Agreement or, at the
Corporation's option, to receive equivalent benefits by alternate means at least
equal to those provided in accordance with Section 5(d) of this Agreement.
Unless otherwise directed by the Executive (or, in the case of any Qualified
Plan, as may be required by such plan), the Executive shall also be paid all
Accrued Obligations in a lump sum in cash within 30 days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled to receive disability and other benefits at least
equal to the most favorable level of benefits available to disabled employees
and/or their families in accordance with the plans, programs and policies
maintained by the Corporation or its affiliates relating to disability at any
time during the 90-day period immediately preceding the Effective Date.
(c) Cause and Voluntary Termination. If, during the Employment Period,
-------------------------------
the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason), the
Corporation shall pay the Executive the Accrued Obligations other than the Pro-
rated Bonus Obligation. Unless otherwise directed by the Executive (or, in the
case of any Qualified Plan, as may be required by such plan), the Executive
shall be paid all such Accrued Obligations in a lump sum in cash within 30 days
of the Date of Termination and the Corporation shall have no further obligations
to the Executive under this Agreement.
(d) Termination by Corporation other than for Cause or Disability and
-----------------------------------------------------------------
Termination by Executive for Good Reason. (i) Lump Sum Payment. If, during
---------------------------------------- ----------------
the Employment Period, the Corporation terminates the Executive's employment
other than for Cause or Disability, or the Executive terminates his employment
for Good Reason, the Corporation shall pay to the Executive in a lump sum in
cash within 15 days after the Date of Termination the aggregate of the following
amounts:
(A) if not theretofore paid, the Executive's Base Salary through the
Date of Termination at the rate specified in Section 5(a) of this Agreement;
(B) a cash amount equal to two times the sum of
(1) the Executive's annual Base Salary at the rate specified in
Section 5(a) of this Agreement;
(2) the Annual Bonus; and
(3) the present value, calculated using the annual federal short-
term rate as determined under Section 1274(d) of the Code, of (without
duplication) (x) the annual cost to the Corporation (based on the
---
premium rates or other costs to it) of obtaining coverage equivalent to
the coverage under the plans and programs described in Section 5(d) of
this Agreement, and (y) the annual-
---
- 6 -
<PAGE>
ized value of the fringe benefits described under Section 5(f) of this
Agreement;
provided, however, that in no event shall the Executive be entitled to
receive under this clause (B) more than the product obtained by multiplying
the amount determined under this clause by a fraction whose numerator shall
be the number of months (including fractions of a month) which at the Date
of Termination remain until the Executive's normal retirement date under the
Corporation's retirement plan or any successor plan as in effect from time
to time and whose denominator shall be 24, and provided further that, with
respect to the life and medical insurance coverage referred to in Section
5(d) of this Agreement, at the Executive's election made prior to the Date
of Termination, the Corporation shall use its best efforts to secure
conversion coverage and shall pay the cost of such coverage in lieu of
paying the lump sum amount attributable to such life or medical insurance
coverage; and
(C) a cash amount equal to any amounts (other than amounts payable to
the Executive under any Qualified Plans) described in Sections 7(a)(iii) and
(iv) of this Agreement.
(ii) Discharge of Corporation's Obligations. Subject to the performance
--------------------------------------
of its obligations under this Section 7(d), the Corporation shall have no
further obligations to the Executive in respect of any termination by the
Executive for Good Reason or by the Corporation other than for Cause or
Disability, except to the extent expressly provided under any of the plans
referred to in Section 5(c) or 5(d) of this Agreement.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
-------------------------
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Corporation or any of
its affiliated companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise prejudice such rights as the Executive may
have under any stock option or other plans or agreements with the Corporation or
any of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
Corporation or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
9. Certain Reduction of Payments by the Corporation. (a) For purposes
------------------------------------------------
of this Section 9, (i) "Payment" shall mean any payment or distribution in the
-
nature of compensation to or for the benefit of the Executive, whether paid or
payable pursuant to this Agreement or otherwise; (ii) "Agreement Payment" shall
--
mean a Payment paid or payable pursuant to this Agreement (disregarding this
Section 9); (iii) "Net After Tax Receipts" shall mean the Present Value of a
---
Payment net of all applicable Federal, State and local income and excise taxes
(the "Taxes") imposed on the Executive with respect thereto (calculated in the
manner described in Section 7(d)(ii) of this Agreement); (iv) "Present Value"
--
shall mean the present value of a Payment or an Agreement Payment determined in
accordance with Section 280G(d)(4) of the Code; and (v) "Reduced Amount" shall
-
mean the aggregate amount of Payments which (a) is less than the sum of all
-
Payments and (b) results in the greatest aggregate Net After Tax Receipts.
(b) Anything in this Agreement to the contrary notwithstanding, in the
event the Corporation's independent public accounting firm (the "Accounting
Firm") shall determine that receipt of all Payments would subject the Executive
to tax under Section 4999 of the Code, it shall determine whether some amount of
Payments would meet the definition of a
- 7 -
<PAGE>
Reduced Amount. If the Accounting Firm determines that there is a Reduced
Amount, the aggregate Agreement Payments shall be reduced to such Reduced
Amount; provided, however, that if the Reduced Amount exceeds the aggregate
Agreement Payments, the aggregate Payments shall, after the reduction of all
Agreement Payments, be reduced (but not below zero) in the amount of such
excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments
or Payments, as the case may be, should be reduced to the Reduced Amount, the
Corporation shall promptly give the Executive notice to that effect and a copy
of the detailed calculation thereof, and the Executive may then elect, in his
sole discretion, which and how much of the Payments shall be eliminated or
reduced (as long as after such election the present value of the aggregate
Payments equals the Reduced Amount), and shall advise the Corporation in writing
of his election within ten days of his receipt of notice. If no such election
is made by the Executive within such ten-day period, the Corporation may elect
which of the Agreement Payments or Payments, as the case may be, shall be
eliminated or reduced (as long as after such election the present value of the
aggregate Agreement Payments or Payments, as the case may be, equals the Reduced
Amount) and shall notify the Executive promptly of such election. All
determinations made by the Accounting Firm under this Section 9 shall be binding
upon the Corporation and the Executive and shall be made within 60 days of a
termination of employment of the Executive. As promptly as practicable
following such determination, the Corporation shall pay to or distribute for the
benefit of the Executive such Payments as are then due to the Executive under
this Agreement and shall promptly pay to or distribute for the benefit of the
Executive in the future such Payments as become due to the Executive under this
Agreement.
(d) While it is the intention of the Corporation and the Executive to
reduce the amounts payable or distributable to the Executive hereunder only if
the aggregate Net After Tax Receipts to the Executive would thereby be
increased, as a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that amounts will have been paid or distributed by the
Corporation to or for the benefit of the Executive pursuant to this Agreement
which should not have been so paid or distributed ("Overpayment") or that
additional amounts which will not have been paid or distributed by the
Corporation to or for the benefit of the Executive pursuant to this Agreement
should have been so paid or distributed ("Underpayment"), in each case,
consistent with the calculation of the Reduced Amount hereunder. In the event
that the Accounting Firm, based either upon the assertion of a deficiency by the
Internal Revenue Service against the Corporation or the Executive which the
Accounting Firm believes has a high probability of success or controlling
precedent or other substantial authority, determines that an Overpayment has
been made, any such Overpayment paid or distributed by the Corporation to or for
the benefit of the Executive shall be treated for all purposes as a loan ab
--
initio to the Executive which the Executive shall repay to the Corporation
------
together with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to
have been made and no amount shall be payable by the Executive to the
Corporation if and to the extent such deemed loan and payment would not either
reduce the Executive's Taxes or generate a refund of such Taxes. In the event
that the Accounting Firm, based upon controlling precedent or other substantial
authority, determines that an Underpayment has occurred, any such Underpayment
shall be promptly paid by the Corporation to or for the benefit of the Executive
together with interest at the applicable federal rate provided for in Section
7872(f)(2)of the Code.
10. Full Settlement. The Corporation's obligation to make the
---------------
- 8 -
<PAGE>
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation may have against the Executive or others whether by reason of
the subsequent employment of the Executive or otherwise. In no event shall the
Executive be obligated to seek other employment by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and no amount payable under this Agreement shall be reduced on account of any
compensation received by the Executive from other employment. In the event that
the Executive shall in good faith give a Notice of Termination for Good Reason
and it shall thereafter be determined by mutual consent of the Executive and the
Corporation or by a tribunal having jurisdiction over the matter that Good
Reason did not exist, the employment of the Executive shall, unless the
Corporation and the Executive shall otherwise mutually agree, be deemed to have
terminated, at the date of giving such purported Notice of Termination, by
mutual consent of the Corporation and the Executive and, except as provided in
the last preceding sentence, the Executive shall be entitled to receive only
those payments and benefits which he would have been entitled to receive at such
date otherwise than under this Agreement.
11. Legal Fees and Expenses. In the event that a claim for payment of
-----------------------
benefits under this Agreement is disputed, the Corporation shall pay all
reasonable legal fees and expenses incurred by the Executive in pursuing such
claim, provided that the Executive is successful as to at least part of the
disputed claim by reason of litigation, arbitration or settlement.
12. Confidential Information. The Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, (i) obtained by the
---
Executive during his employment by the Corporation or any of its affiliated
companies and (ii) not otherwise public knowledge (other than by reason of an
----
unauthorized act by the Executive). After termination of the Executive's
employment with the Corporation, the Executive shall not, without the prior
written consent of the Corporation, unless compelled pursuant to an order of a
court or other body having jurisdiction over such matter, communicate or divulge
any such information, knowledge or data to anyone other than the Corporation and
those designated by it. In no event shall an asserted violation of the
provisions of this Section 12 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
13. Employment Contract or Severance Benefits. Notwithstanding
-----------------------------------------
anything else in this Agreement to the contrary, any amount payable to the
Executive hereunder on account of his termination of employment shall be reduced
on a dollar for dollar basis by each dollar actually paid to the Executive with
respect to such termination under the terms of any employment contract between
the Executive and the Corporation or under any severance program or policy
applicable to the Executive. Nothing in this Agreement shall be construed to
require duplication of any compensation, benefits or other entitlements provided
to the Executive by the Corporation under the terms of any employment contract
which may address similar matters.
14. Successors. (a) This Agreement is personal to the Executive and,
----------
without the prior written consent of the Corporation, shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
- 9 -
<PAGE>
upon the Corporation and its successors. The Corporation shall require any
successor to all or substantially all of the business and/or assets of the
Corporation, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent as the Corporation would be
required to perform if no such succession had taken place.
15. Miscellaneous. (a) Applicable Law. This Agreement shall be
------------- --------------
governed by and construed in accordance with the laws of the State of Delaware,
applied without reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
----------
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the address listed below
If to the Corporation: Tambrands Inc.
One Marcus Avenue
Lake Success, New York 11042
Attention: Secretary
(with a copy to the
attention of the
General Counsel)
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(d) Tax Withholding. The Corporation may withhold from any amounts
---------------
payable under this Agreement such Federal, State or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any provision
------------
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of the
--------
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused this Agreement to be executed in its name on its behalf,
and its corporate seal to be hereunto affixed and attested by its Assistant
Secretary, all as of the day and year first above written.
- 10 -
<PAGE>
ATTEST: TAMBRANDS INC.
/s/Marilyn K. Jones By /s/Paul E. Konney
------------------------- --------------------------------
Assistant Secretary Title: Senior Vice President-
General Counsel and
Secretary
(Seal)
EXECUTIVE: JEROME B. WAINICK
/s/Jerome B. Wainick
----------------------------------
Address:
Tambrands Inc.
One Marcus Avenue
Lake Success, New York 11042
- 11 -
<PAGE>
EXHIBIT 10.9(D)1
FIRST AMENDMENT
---------------
This FIRST AMENDMENT, dated as of October 16, 1990, to the Employment
Protection Agreement, dated as of June 18, 1990 (the "Employment Protection
Agreement"), by and between Jerome B. Wainick (the "Executive") and Tambrands
Inc., a Delaware corporation (the "Corporation"), witnesseth:
WHEREAS, the Corporation and the Executive entered into the Employment
Protection Agreement to assure the Corporation of continuity of management in
the event of any change of control;
WHEREAS, the Board of Directors of the Corporation has authorized an
amendment to the Employment Protection Agreement that it has determined to be in
the best interests of the Corporation and its stockholders; and
WHEREAS, the Executive has agreed to such amendment;
NOW THEREFORE, in consideration of the premises, it is hereby agreed by and
between the Corporation and the Executive as follows:
1. Section 9 of the Employment Protection Agreement is hereby amended and
restated as follows:
9. Certain Additional Payments by the Corporation.
----------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Corporation to or for the benefit of the Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Code (or any successor provision) or
any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive
of all taxes with respect to the Gross-Up Payment (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by KPMG Peat Marwick or other firm then auditing the accounts of the
Corporation (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Corporation and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the
<PAGE>
Corporation. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the Change of
Control, or is unwilling or unable to perform its obligations pursuant to
this Section 9, the Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Corporation. Any Gross-Up Payment, determined pursuant to
this Section 9, shall be paid by the Corporation to the Executive within
five days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Corporation
and the Executive. As a result of the potential uncertainty in the
application of Section 4999 of the Code (or any successor provision) at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Corporation should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the
Corporation exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the
Corporation to or for the benefit of the Executive.
(c) The Executive shall notify the Corporation in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Corporation of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive is informed in writing of such claim and
shall apprise the Corporation of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on
which he gives such notice to the Corporation (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Corporation notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the
Executive shall:
(i) give the Corporation any information reasonably requested by the
Corporation relating to such claim,
(ii) take such action in connection with contesting such claim as
the Corporation shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Corporation,
(iii) cooperate with the Corporation in good faith in order effectively
to contest such claim, and
(iv) permit the Corporation to participate in any proceedings relating
to such claim;
provided, however, that the Corporation shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred
in connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or
2
<PAGE>
income tax (including interest and penalties with respect thereto) imposed
as a result of such representation and payment of costs and expenses.
Without limiting the foregoing provisions of this Section 9(c), the
Corporation shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Corporation shall determine; provided, however, that if the
Corporation directs the Executive to pay such claim and sue for a refund,
the Corporation shall advance the amount of such payment to the Executive,
on an interest-free basis, and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Corporation's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised
by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Corporation pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Corporation's complying with the requirements of Section 9(c))
promptly pay to the Corporation the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount advanced by the Corporation
pursuant to Section 9(c), a determination is made that the Executive shall
not be entitled to any refund with respect to such claim and the
Corporation does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
2. This First Amendment may not be amended or modified other than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
3. Except as expressly set forth herein, this First Amendment shall not
modify or amend any of the provisions contained in the Employment Protection
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.
3
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused this First Amendment to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested, all as of
the day and year first above written.
ATTEST: TAMBRANDS INC.
/s/ Jonathan W. Emery By /s/Paul E. Konney
----------------------- ------------------------------
Title: Senior Vice President -
General Counsel and Secretary
EXECUTIVE
(Seal)
/s/ Jerome B. Wainick
--------------------------------
Name: Jerome B. Wainick
4
<PAGE>
EXHIBIT 10.(9)(E)
EMPLOYMENT PROTECTION AGREEMENT
-------------------------------
THIS AGREEMENT between Tambrands Inc., a Delaware corporation (the
"Corporation"), and Harry E. Raber (the "Executive"), dated as of this 13th day
of August, 1992.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Corporation and the Executive have agreed to enter into an
agreement providing the Corporation and the Executive with certain rights upon
the occurrence of a change of control (as defined below) to assure the
Corporation of continuity of management in the event of any change of control;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Corporation and the
Executive as follows:
1. Operation of Agreement. The effective date of this Agreement shall
----------------------
be the date on which a Change of Control occurs (the "Effective Date"), provided
that if the Executive is not employed by the Corporation on the Effective Date
this Agreement shall be void and without effect. This Agreement shall terminate
on July 31, 1995, provided that the termination date of this Agreement shall be
extended for one additional year on August 1, 1993 and each subsequent August 1,
unless the Executive shall have received written notice from the Corporation
prior to the May 1 immediately preceding such August 1 that the Board of
Directors of the Corporation (the "Board") has determined that the termination
date of this Agreement shall not be so extended. Notwithstanding the foregoing,
this Agreement shall not terminate on the date determined in accordance with the
preceding sentence if a Change of Control shall have occurred prior to such
date.
2. Definitions. (a) Change of Control. For purposes of this
----------- -----------------
Agreement, a "Change of Control" shall be deemed to have occurred if: (i) any
---
person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), and as used in Sections 13(d)
and 14(d) thereof)), excluding the Corporation, any majority owned subsidiary of
the Corporation (a "Subsidiary") and any employee benefit plan sponsored or
maintained by the Corporation or any Subsidiary (including any trustee of such
plan acting as trustee), but including a "group" as defined in Section 13(d)(3)
of the Exchange Act (a "Person"), becomes the beneficial owner of shares of the
Corporation having at least 20% of the total number of votes that may be cast
for the election of directors of the Corporation (the "Voting Shares") provided,
however, that such an event shall not constitute a Change of Control if the
acquiring Person has entered into an agreement with the Corporation approved by
the Board which materially restricts the right of such Person to direct or
influence the management or policies of the Corporation; (ii) the shareholders
----
of the Corporation shall approve any merger or other business combination of the
Corporation, sale of the Corporation's assets or combination of the foregoing
transactions (a "Transaction") other than a Transaction involving only the
Corporation and one or more of its Subsidiaries, or a Transaction immediately
following which the shareholders of the Corporation immediately prior to the
Transaction continue to have a majority of the voting power in the resulting
entity excluding for this purpose any shareholder owning directly or indirectly
more than 10% of the shares of the other company involved in the Transaction, or
(iii) within any 24-month period beginning on or after July 31, 1992, the
-----
persons who
<PAGE>
were directors of the Corporation immediately before the beginning of such
period (the "Incumbent Directors") shall cease (for any reason other than death)
to constitute at least a majority of the Board or the board of directors of any
successor to the Corporation, provided that any director who was not a director
as of August 1, 1992 shall be deemed to be an Incumbent Director if such
director was elected to the Board by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of this Section
2(a)(iii).
(b) Participation by Executive. Notwithstanding the foregoing, no
--------------------------
Change of Control shall be deemed to have occurred for purposes of this
Agreement by reason of any actions or events in which the Executive participates
in a capacity other than in his capacity as the Executive (or as a director of
the Corporation or a Subsidiary, where applicable).
3. Employment Period. If the Executive is employed on the Effective
-----------------
Date, the Corporation agrees to continue the Executive in its employ, and the
Executive agrees to remain in the employ of the Corporation, for the period (the
"Employment Period") commencing on the Effective Date and ending on the earliest
to occur of (i) the second anniversary of the Effective Date, (ii) the
--- ----
Executive's normal retirement date under the Corporation's retirement plans as
in effect from time to time and (iii) the date of any termination of the
-----
Executive's employment in accordance with Section 6 of this Agreement.
4. Position and Duties. (a) No Reduction in Position. During the
------------------- ------------------------
Employment Period, the Executive's position (including titles), authority and
responsibilities shall be at least commensurate with the highest of those held,
exercised and assigned at any time during the 90-day period immediately
preceding the Effective Date.
(b) Business Time. From and after the Effective Date, the Executive
-------------
agrees to devote his full business time during normal business hours to the
business and affairs of the Corporation and to use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him hereunder, to
the extent necessary to discharge such responsibilities, except for
(i) reasonable time spent in serving on corporate, civic or charitable
boards or committees approved by the Board, in each case only if and
to the extent not substantially interfering with the performance of
such responsibilities, and
(ii) periods of vacation and sick leave to which he is entitled.
It is expressly understood and agreed that the Executive's continuing to serve
on any boards and committees on which he is serving or with which he is
otherwise associated with the consent or approval of the Corporation immediately
preceding the Effective Date shall not be deemed to interfere with the
performance of the Executive's services to the Corporation.
5. Compensation. (a) Base Salary. During the Employment Period, the
------------ -----------
Executive shall receive a base salary ("Base Salary") at a monthly rate at least
equal to the monthly salary paid to the Executive by the Corporation and any of
its affiliated companies immediately prior to the Effective Date. The Base
Salary shall be reviewed at least once each year after the Effective Date, and
may be increased (but not decreased) at any time and from time to time by action
of the Board or any committee thereof or any individual having authority to take
such action in accordance with the Corporation's regular practices. Neither
payment of the Base Salary nor payment of any increased Base Salary after the
Effective
- 2 -
<PAGE>
Date shall serve to limit or reduce any other obligation of the Corporation
hereunder. For purposes of the remaining provisions of this Agreement, the term
"Base Salary" shall mean Base Salary as defined in this Section 5(a) or, if
increased after the Effective Date, the Base Salary as so increased.
(b) Annual Bonus. In addition to the Base Salary, the Executive shall
------------
be awarded for each fiscal year of the Corporation ending during the Employment
Period an annual bonus (either pursuant to a bonus plan or program of the
Corporation or otherwise) in cash at least equal to the last annual bonus
(annualized, if awarded in respect of a partial year) awarded to the Executive
under the Annual Incentive Plan of the Corporation prior to the Effective Date
("Annual Bonus"). If a fiscal year of the Corporation begins, but does not end,
during the Employment Period, the Executive shall receive an amount with respect
to such fiscal year at least equal to the amount of the Annual Bonus multiplied
by a fraction, the numerator of which is the number of days in such fiscal year
occurring during the Employment Period and the denominator of which is 365.
Each amount payable in respect of the Executive's Annual Bonus shall be paid not
later than the last day of March of the year next following the year for which
the Annual Bonus (or pro-rated portion) is earned or awarded, unless electively
deferred by the Executive pursuant to any deferral programs or arrangements that
the Corporation may make available to the Executive, in which event such
deferred amount shall be payable in accordance with the terms of such deferral
program or arrangement. Neither the Annual Bonus nor any bonus amount paid in
excess thereof after the Effective Date shall serve to limit or reduce any other
obligation of the Corporation hereunder.
(c) Incentive and Savings Plans and Retirement Programs. In addition
---------------------------------------------------
to the Base Salary and Annual Bonus payable as hereinabove provided, during the
Employment Period, the Executive shall be entitled to participate in all
incentive and savings plans and programs, including stock option plans and other
equity based compensation plans, and in all retirement plans, on a basis
providing him with the opportunity to receive compensation (without duplication
of the amount payable as an Annual Bonus) and benefits equal to those provided
by the Corporation to the Executive on an annualized basis under such plans and
programs as in effect at any time during the 90-day period immediately preceding
the Effective Date.
(d) Benefit Plans. During the Employment Period, the Executive and his
-------------
family shall be entitled to participate in or be covered under all welfare
benefit plans and programs of the Corporation and its affiliated companies,
including all medical, dental, disability, group life, accidental death and
travel accident insurance plans and programs, as in effect at any time during
the 90-day period immediately preceding the Effective Date.
(e) Expenses. During the Employment Period, the Executive shall be
--------
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the policies and procedures of the Corporation
as in effect at any time during the 90-day period immediately preceding the
Effective Date.
(f) Vacation and Fringe Benefits. During the Employment Period, the
----------------------------
Executive shall be entitled to paid vacation and fringe benefits in accordance
with the policies of the Corporation as in effect at any time during the 90-day
period immediately preceding the Effective Date.
(g) Office and Support Staff. During the Employment Period, the
------------------------
Executive shall be entitled to an office or offices of a size and with
- 3 -
<PAGE>
furnishings and other appointments, and to secretarial and other assistance, at
least equal to the most favorable of the foregoing provided to the Executive at
any time during the 90-day period immediately preceding the Effective Date.
6. Termination. (a) Death, Disability or Retirement. Subject to the
----------- -------------------------------
provisions of Section 1 hereof, this Agreement shall terminate automatically
upon the Executive's death or attainment of normal retirement age under the
Corporation's retirement plans as in effect from time to time, provided that,
after the Effective Date, the normal retirement age may not be lowered for
purposes of this Agreement without the Executive's consent. The Corporation may
terminate this Agreement, after having established the Executive's Disability,
by giving the Executive written notice of its intention to terminate his
employment, and his employment with the Corporation shall terminate effective on
the 90th day after receipt of such notice if, within 90 days after such receipt,
the Executive shall fail to return to full-time performance of his duties. For
purposes of this Agreement, "Disability" means disability which, after the
expiration of more than 26 weeks after its commencement, is determined to be
total and permanent by a physician selected by the Corporation or its insurers
and acceptable to the Executive or his legal representatives (such agreement to
acceptability not to be withheld unreasonably).
(b) Voluntary Termination. Notwithstanding anything in this Agreement
---------------------
to the contrary, the Executive may, upon not less than 30 days' written notice
to the Corporation, voluntarily terminate employment during the Employment
Period for any reason (including early retirement under the terms of the
Corporation's retirement plan as in effect from time to time), provided that any
termination by the Executive pursuant to Section 6(d) of this Agreement on
account of Good Reason (as defined therein) shall not be treated as a voluntary
termination under this Section 6(b).
(c) Cause. The Corporation may terminate the Executive's employment
-----
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
means (i) an act or acts of dishonesty or gross misconduct on the Executive's
---
part which result or are intended to result in material damage to the
Corporation's business or reputation or (ii) repeated material violations by the
----
Executive of his obligations under Section 4 of this Agreement which violations
are demonstrably willful and deliberate on the Executive's part.
(d) Good Reason. The Executive may terminate his employment during the
-----------
Employment Period for Good Reason. For purposes of this Agreement, "Good
Reason" means
(i) a good faith determination by the Executive that, without his prior
written consent, the Corporation or any of its officers has taken or failed
to take any action (including, without limitation, (A) exclusion of the
---
Executive from consideration of material matters within his area of
responsibility, (B) statements or actions which undermine the Executive's
---
authority with respect to persons under his supervision or reduce his
standing with his peers, (C) a pattern of discrimination against or
---
harassment of the Executive or persons under his supervision and (D) the
---
subjection of the Executive to procedures not generally applicable to other
similarly situated executives) which changes the Executive's position
(including titles), authority or responsibilities under Section 4 of this
Agreement or reduces the Executive's ability to carry out his duties and
responsibilities under Section 4 of this Agreement;
(ii) any failure by the Corporation to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Corporation promptly
- 4 -
<PAGE>
after receipt of notice thereof from the Executive;
(iii) the Corporation's requiring the Executive to be employed at any
location more than 50 miles further from his principal residence than the
location at which the Executive was employed immediately preceding the
Effective Date; or
(iv) any failure by the Corporation to obtain the assumption of and
agreement to perform this Agreement by a successor as contemplated by
Section 14(b) of this Agreement, provided that the successor has had actual
written notice of the existence of this Agreement and its terms and an
opportunity to assume the Corporation's responsibilities under this
Agreement during a period of 10 business days after receipt of such notice.
(e) Notice of Termination. Any termination by the Corporation for
---------------------
Cause or by the Executive for Good Reason during the Employment Period shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 15(c) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice given, in the case
of a termination for Cause, within 10 business days of the Corporation's having
actual knowledge of all of the events giving rise to such termination, and in
the case of a termination for Good Reason, within 180 days of the Executive's
having actual knowledge of the events giving rise to such termination, and which
(i) indicates the specific termination provision in this Agreement relied upon,
---
(ii) sets forth in reasonable detail the facts and circumstances claimed to
----
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the termination date is other than the date
-----
of receipt of such notice, specifies the termination date of this Agreement
(which date shall be not more than 15 days after the giving of such notice).
The failure by the Executive to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.
(f) Date of Termination. For purposes of this Agreement, the term
-------------------
"Date of Termination" means (i) in the case of a termination for which a Notice
---
of Termination is required, the date of receipt of such Notice of Termination
or, if later, the date specified therein and (ii) in all other cases, the actual
date on which the Executive's employment terminates during the Employment
Period.
7. Obligations of the Corporation upon Termination. (a) Death. If
----------------------------------------------- ------
the Executive's employment is terminated during the Employment Period by reason
of the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement other
than those obligations accrued hereunder at the date of his death, including,
for this purpose (i) the Executive's full Base Salary through the Date of
---
Termination, (ii) the product of the Annual Bonus and a fraction, the numerator
----
of which is the number of days in the current fiscal year of the Corporation
through the Date of Termination, and the denominator of which is 365 (the "Pro-
rated Bonus Obligation"), (iii) any compensation previously deferred by the
-----
Executive (together with any accrued earnings thereon) and not yet paid by the
Corporation and (iv) any other amounts or benefits owing to the Executive under
----
the then applicable employee benefit plans or policies of the Corporation (such
amounts specified in clauses (i), (ii), (iii) and (iv) are hereinafter referred
to as "Accrued Obligations"). Unless otherwise directed by the Executive (or,
in the case of any employee benefit plan qualified (a "Qualified Plan") under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as
may be required by such plan), all such Accrued Obligations shall be paid to the
Executive's legal representatives
- 5 -
<PAGE>
in a lump sum in cash within 30 days of the Date of Termination. Anything in
this Agreement to the contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable level of
benefits available to surviving families of executives of the Corporation and
its affiliates under such plans, programs and policies relating to family death
benefits, if any, of the Corporation and its affiliates in effect at any time
during the 90-day period immediately preceding the Effective Date.
(b) Disability. If the Executive's employment is terminated by reason
----------
of the Executive's Disability, the Executive shall be entitled, after the Date
of Termination until the date when the Employment Period would otherwise have
terminated, to continue to participate in or be covered under the benefit plans
and programs referred to in Section 5(d) of this Agreement or, at the
Corporation's option, to receive equivalent benefits by alternate means at least
equal to those provided in accordance with Section 5(d) of this Agreement.
Unless otherwise directed by the Executive (or, in the case of any Qualified
Plan, as may be required by such plan), the Executive shall also be paid all
Accrued Obligations in a lump sum in cash within 30 days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled to receive disability and other benefits at least
equal to the most favorable level of benefits available to disabled employees
and/or their families in accordance with the plans, programs and policies
maintained by the Corporation or its affiliates relating to disability at any
time during the 90-day period immediately preceding the Effective Date.
(c) Cause and Voluntary Termination. If, during the Employment Period,
-------------------------------
the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason), the
Corporation shall pay the Executive the Accrued Obligations other than the Pro-
rated Bonus Obligation. Unless otherwise directed by the Executive (or, in the
case of any Qualified Plan, as may be required by such plan), the Executive
shall be paid all such Accrued Obligations in a lump sum in cash within 30 days
of the Date of Termination and the Corporation shall have no further obligations
to the Executive under this Agreement.
(d) Termination by Corporation other than for Cause or Disability and
-----------------------------------------------------------------
Termination by Executive for Good Reason. (i) Lump Sum Payment. If, during
---------------------------------------- ----------------
the Employment Period, the Corporation terminates the Executive's employment
other than for Cause or Disability, or the Executive terminates his employment
for Good Reason, the Corporation shall pay to the Executive in a lump sum in
cash within 15 days after the Date of Termination the aggregate of the following
amounts:
(A) if not theretofore paid, the Executive's Base Salary through the
Date of Termination at the rate specified in Section 5(a) of this Agreement;
(B) a cash amount equal to two times the sum of
(1) the Executive's annual Base Salary at the rate specified in
Section 5(a) of this Agreement;
(2) the Annual Bonus; and
(3) the present value, calculated using the annual federal short-
term rate as determined under Section 1274(d) of the Code, of (without
duplication) (x) the annual cost to the Corporation (based on the
---
premium rates or other costs to it) of obtaining coverage equivalent to
the coverage under the plans and programs described in Section 5(d) of
this Agreement, and (y) the annual-
---
- 6 -
<PAGE>
ized value of the fringe benefits described under Section 5(f) of this
Agreement;
provided, however, that in no event shall the Executive be entitled to
receive under this clause (B) more than the product obtained by multiplying
the amount determined under this clause by a fraction whose numerator shall
be the number of months (including fractions of a month) which at the Date
of Termination remain until the Executive's normal retirement date under the
Corporation's retirement plan or any successor plan as in effect from time
to time and whose denominator shall be 24, and provided further that, with
respect to the life and medical insurance coverage referred to in Section
5(d) of this Agreement, at the Executive's election made prior to the Date
of Termination, the Corporation shall use its best efforts to secure
conversion coverage and shall pay the cost of such coverage in lieu of
paying the lump sum amount attributable to such life or medical insurance
coverage; and
(C) a cash amount equal to any amounts (other than amounts payable to
the Executive under any Qualified Plans) described in Sections 7(a)(iii) and
(iv) of this Agreement.
(ii) Discharge of Corporation's Obligations. Subject to the performance
--------------------------------------
of its obligations under this Section 7(d), the Corporation shall have no
further obligations to the Executive in respect of any termination by the
Executive for Good Reason or by the Corporation other than for Cause or
Disability, except to the extent expressly provided under any of the plans
referred to in Section 5(c) or 5(d) of this Agreement.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
-------------------------
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Corporation or any of
its affiliated companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise prejudice such rights as the Executive may
have under any stock option or other plans or agreements with the Corporation or
any of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
Corporation or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
9. Certain Additional Payments by the Corporation.
----------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Corporation
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision) or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes with respect to the Gross-Up Payment (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
- 7 -
<PAGE>
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat
Marwick or other firm then auditing the accounts of the Corporation (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Corporation and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Corporation. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, or is unwilling or unable to perform its obligations
pursuant to this Section 9, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Corporation. Any Gross-Up Payment, determined pursuant to this Section 9, shall
be paid by the Corporation to the Executive within five days of the receipt of
the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Corporation and the Executive. As a result of the
potential uncertainty in the application of Section 4999 of the Code (or any
successor provision) at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments which will not have been
made by the Corporation should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that the
Corporation exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for the benefit of
the Executive.
(c) The Executive shall notify the Corporation in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Corporation of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than 10 business days after the Executive is
informed in writing of such claim and shall apprise the Corporation of the
nature of such claim and the date on which such claim is requested to be paid.
the Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which he gives such notice to the Corporation (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Corporation notifies the Executive in writing prior
to the expiration of such period that it desires to contest such claim, the
Executive shall:
(i) give the Corporation any information reasonably requested by the
Corporation relating to such claim,
(ii) take such action in connection with contesting such claim as the
Corporation shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Corporation,
(iii) cooperate with the Corporation in good faith in order effectively
to contest such claim, and
(iv) permit the Corporation to participate in any proceedings relating
to such claim;
- 8 -
<PAGE>
provided, however, that the Corporation shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on a after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limiting the
foregoing provisions of this Section 9(c), the Corporation shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the Corporation directs
the Executive to pay such claim and sue for a refund, the Corporation shall
advance the amount of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statue of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Corporation's
control of the contest shall be limited to issues with respect to which a Gross-
Up Payment would be payable hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Corporation pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Corporation's complying with the requirements of Section 9(c)) promptly pay to
the Corporation the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Corporation pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Corporation does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
10. Full Settlement. The Corporation's obligation to make the payments
---------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation may have against the Executive or others whether by reason of
the subsequent employment of the Executive or otherwise. In no event shall the
Executive be obligated to seek other employment by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and no amount payable under this Agreement shall be reduced on account of any
compensation received by the Executive from other employment. In the event that
the Executive shall in good faith give a Notice of Termination for Good Reason
and it shall thereafter be determined by mutual consent of the Executive and the
Corporation or by a tribunal having jurisdiction over the matter that Good
Reason did not exist, the employment of the Executive shall, unless the
- 9 -
<PAGE>
Corporation and the Executive shall otherwise mutually agree, be deemed to have
terminated, at the date of giving such purported Notice of Termination, by
mutual consent of the Corporation and the Executive and, except as provided in
the last preceding sentence, the Executive shall be entitled to receive only
those payments and benefits which he would have been entitled to receive at such
date otherwise than under this Agreement.
11. Legal Fees and Expenses. In the event that a claim for payment of
-----------------------
benefits under this Agreement is disputed, the Corporation shall pay all
reasonable legal fees and expenses incurred by the Executive in pursuing such
claim, provided that the Executive is successful as to at least part of the
disputed claim by reason of litigation, arbitration or settlement.
12. Confidential Information. The Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, (i) obtained by the
---
Executive during his employment by the Corporation or any of its affiliated
companies and (ii) not otherwise public knowledge (other than by reason of an
----
unauthorized act by the Executive). After termination of the Executive's
employment with the Corporation, the Executive shall not, without the prior
written consent of the Corporation, unless compelled pursuant to an order of a
court or other body having jurisdiction over such matter, communicate or divulge
any such information, knowledge or data to anyone other than the Corporation and
those designated by it. In no event shall an asserted violation of the
provisions of this Section 12 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
13. Employment Contract or Severance Benefits. Notwithstanding
-----------------------------------------
anything else in this Agreement to the contrary, any amount payable to the
Executive hereunder on account of his termination of employment shall be reduced
on a dollar for dollar basis by each dollar actually paid to the Executive with
respect to such termination under the terms of any employment contract between
the Executive and the Corporation or under any severance program or policy
applicable to the Executive. Nothing in this Agreement shall be construed to
require duplication of any compensation, benefits or other entitlements provided
to the Executive by the Corporation under the terms of any employment contract
which may address similar matters.
14. Successors. (a) This Agreement is personal to the Executive and,
----------
without the prior written consent of the Corporation, shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Corporation and its successors. The Corporation shall require any successor
to all or substantially all of the business and/or assets of the Corporation,
whether direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise, by an agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Corporation would be required to perform if
no such succession had taken place.
15. Miscellaneous. (a) Applicable Law. This Agreement shall be
------------- --------------
governed by and construed in accordance with the laws of the State of Delaware,
applied without reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
----------
- 10 -
<PAGE>
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the address listed below
If to the Corporation: Tambrands Inc.
777 Westchester Avenue
White Plains, New York 10604
Attention: Secretary
(with a copy to the
attention of the
General Counsel)
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(d) Tax Withholding. The Corporation may withhold from any amounts
---------------
payable under this Agreement such Federal, State or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any provision
------------
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of the
--------
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused this Agreement to be executed in its name on its behalf,
and its corporate seal to be hereunto affixed and attested, all as of the day
and year first above written.
- 11 -
<PAGE>
ATTEST: TAMBRANDS INC.
/s/Jonathan W. Emery By /s/Paul E. Konney
------------------------- --------------------------------
Title: Senior Vice President-
General Counsel and
Secretary
(Seal)
EXECUTIVE: HARRY E. RABER
/s/Harry E. Raber
----------------------------------
Address:
Tambrands Inc.
Bridge & Springfield Sts.
P.O. Box 271
Palmer, MA 01069
- 12 -
<PAGE>
EXHIBIT 10.10
Resolution of the Board of Directors
adopted on October 25, 1994
------------------------------------
RESOLVED, that in consideration of his services as Chairman of the Board of
--------
Directors of the Corporation, the Corporation shall pay Howard B. Wentz, Jr. for
the period from November 1, 1994 until the Annual Meeting of Shareholders to be
held in 1995, a cash fee of $2,500 per diem, in addition to the other
compensation otherwise payable to him for his services as a non-employee
director of the Corporation under the Corporation's standard practices and
policies, except that Mr. Wentz shall not receive any per meeting fees for
attendance at meetings of the Board of Directors or any of its committees.
<PAGE>
EXHIBIT 10.11
Resolution of the Board of Directors
adopted on December 13, 1994
-------------------------------------
RESOLVED, that, effective as of January 1, 1995, directors of the
--------
Corporation shall no longer receive cash fees for attendance at more than ten
Board and Committee meetings.
<PAGE>
EXHIBIT 10.14
TAMPAX Incorporated
--------------------------------------------------------------------------------
1981 Annual Incentive Plan
--------------------------------------------------------------------------------
<PAGE>
TAMPAX Incorporated
--------------------------------------------------------------------------------
1981 Annual Incentive Plan
--------------------------------------------------------------------------------
Section Title Page
------- -------------------------------------------------- ----
1. Purposes...................................................... 3
--------
2. Definitions................................................... 3
-----------
3. Effective Date................................................ 4
--------------
4. Administration................................................ 5
--------------
5. Designation of Participants, Performance Criteria and Goals... 8
-----------------------------------------------------------
6. Annual Plan Accrual........................................... 9
-------------------
7. Determination of Awards....................................... 10
-----------------------
8. Payment of Awards............................................. 10
-----------------
9. Deferral of Awards............................................ 11
------------------
10. Rights of Participants........................................ 11
----------------------
11. Non-Transferability of Rights under the Plan.................. 12
--------------------------------------------
12. Agreements with Participants.................................. 12
----------------------------
13. Withholding Taxes............................................. 12
-----------------
14. No Employment Rights.......................................... 13
--------------------
15. Termination, Amendment and Modification....................... 13
---------------------------------------
16. Notices....................................................... 13
-------
17. Severability of Provisions.................................... 14
--------------------------
18. Headings and Captions......................................... 14
---------------------
19. Controlling Law............................................... 14
---------------
<PAGE>
TAMPAX Incorporated
--------------------------------------------------------------------------------
1981 Annual Incentive Plan
--------------------------------------------------------------------------------
1. Purposes
The purposes of the TAMPAX Incorporated 1981 Annual Incentive Plan (the
"Plan") are to enable TAMPAX Incorporated ("TAMPAX") and its subsidiaries
to attract, retain, motivate, and reward the best qualified executives by
providing key employees with the opportunity to earn competitive
compensation directly linked to results and to create a strong foundation
on which to build an aggressive and forward thinking management of top
quality.
2. Definitions
Unless the context requires otherwise, the following words as used in the
Plan shall have the meanings ascribed to each below, it being understood
that masculine, feminine and neuter pronouns are used interchangeably, and
that each comprehends the others.
(a) "Annual Plan Accrual" shall mean the amount accrued by TAMPAX for
payment of awards pursuant to Section 6 of the Plan.
<PAGE>
(b) "Board" shall mean the Board of Directors of TAMPAX.
(c) "Committee" shall mean the Compensation Committee of the Board.
(d) "Company" shall mean TAMPAX and its subsidiaries, any of whose
employees are Participants (as hereinafter defined) in this Plan.
(e) "Participant" shall mean a key employee of the Company (who may be,
but need not be, an officer and/or director) who has been selected by
the Committee as eligible to participate in this Plan.
(f) "Performance Period" shall mean, unless otherwise determined by the
Committee, one (1) fiscal year of TAMPAX.
(g) "Termination of Employment" shall mean the discontinuance of
employment of a Participant with the Company for any reason
whatsoever.
3. Effective Date
The effective date of the Plan shall be June 30, 1981.
2
<PAGE>
4. Administration
--------------
(a) The Plan shall be administered by the Committee. All powers and
functions of the Committee may at any time and from time to time be
exercised by the Board; provided, however, that with respect to
matters relating to employees who are members of the Board, such
powers and functions of the Committee may be exercised by the Board
only if, at the time of such exercise, a majority of the members of
the entire Board, and a majority of directors acting in the matter,
are not employees and have not been employees during the preceding
year.
(b) The Committee shall have full authority to interpret the Plan; to
establish, amend, and rescind rules for carrying out the Plan; to
administer the Plan; to select employees to participate in the Plan;
to determine the terms and provisions of any agreements pertaining to
the Plan (which need not be identical) between TAMPAX and
Participants; to determine the amount and manner of payment of awards
and to make all other determinations and to take such steps in
connection with the Plan as the Committee, in its discretion, deems
necessary or desirable. The Committee shall not be bound to any
standards of uniformity or similarity of action, interpretation or
conduct in the discharge of its duties hereunder, regardless of the
apparent similarity of the matters
3
<PAGE>
coming before it. Its determination shall be binding on all parties.
(c) The Committee may designate the Secretary of the Company, other
employees of the Company or competent professional advisors to assist
the Committee in the administration of the Plan and may grant
authority to such persons to execute agreements or other documents on
behalf of the Committee.
(d) The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant or agent
and any computation received from such consultant or agent.
No member or former member of the Committee or of the Board of
Directors of the Company shall be liable for any action or
determination made in good faith with respect to the Plan. To the
maximum extent permitted by applicable law, each member or former
member of the Committee or of the Board of Directors of the Company
shall be indemnified and held harmless by the Company against any cost
or expense (including counsel fees) or liability (including any sum
paid in settlement of a claim with the approval of the Company)
arising out of any act or omission to act in connection with the Plan
unless arising out of such member's or former member's own fraud or
bad faith.
4
<PAGE>
Such indemnification shall be in addition to any rights of
indemnification the members or former members may have as directors or
under the by-laws of the Company. Expenses incurred by the Board or
the Committee in the engagement of such counsel, consultant or agent
shall be paid by the Company.
(e) All costs and expenses involved in administering the Plan as provided
herein, or incident thereto, shall be borne by TAMPAX.
(f) The Committee shall select one of its members as a Chairman and shall
adopt such rules and regulations as it shall deem appropriate
concerning the holding of its meetings and the transaction of its
business. Any member of the Committee may be removed at any time
either with or without cause by resolution adopted by the Board; and
any vacancy on the Committee may at any time be filled by resolution
adopted by the Board.
(g) All determinations by the Committee shall be made by the affirmative
vote of a majority of its members. Any such determination may be made
at a meeting duly called and held at which a majority of the members
of the Committee were in attendance in person or through telephonic
communication.
5
<PAGE>
Any determination set forth in writing and signed by all of the
members of the Committee shall be as fully effective as if it had been
made by a majority vote of the members at a meeting duly called and
held.
(h) The Committee may, in its sole discretion, make appropriate
adjustments with respect to the terms of the Plan and its
applicability to Participants in the event of a discontinuance by the
Company of a Participant's employment with the Company resulting from
any event such as the merger, sale or consolidation of the Company.
5. Designation of Participants, Performance Criteria and Goals
-----------------------------------------------------------
For each Performance Period, the Committee shall designate those
Participants who may be entitled to receive incentive awards subject to the
terms and conditions of the Plan. Unless otherwise determined by the
Committee, in its sole discretion prior to the commencement of each
Performance Period, the Committee shall determine the performance criteria
and goals for such Performance Period, determine the relative weight to be
given to the performance criteria, and in accordance with established
criteria and goals, assign minimum, target and maximum award opportunities
to each Participant based upon such Participant's salary, position and
ability to impact TAMPAX's annual performance.
6
<PAGE>
At any time designated by the Committee during the Performance Period,
appropriate adjustments in the goals may be made by the Committee to avoid
undue windfalls or hardships due to external conditions outside the control
of management and non-recurring or abnormal items.
6. Annual Plan Accrual
-------------------
Prior to the commencement of each Performance Period, the Committee shall
determine the amount to be accrued (excluding all costs and expenses
involved in administering the Plan which shall be borne separately by the
Company as provided in Section 4(e) hereof) in each fiscal year of TAMPAX
for the payment of awards pursuant to the Plan. The aggregate awards for
any Performance Period may be less than or may exceed the amount accrued
for such Performance Period, in the discretion of the Committee.
7. Determination of Awards
-----------------------
After completion of each Performance Period, overall annual results
attained by the Company, its divisions and Participants shall be evaluated
relative to goals. Based upon such evaluation, the Committee may authorize
the payment to each Participant of an incentive award hereunder. All
awards shall be payable in immediately available funds unless otherwise
determined by the Committee.
7
<PAGE>
If a Participant is selected for Plan participation after the beginning of
a Performance Period, the assigned award will be prorated in accordance
with the salary earned for such portion of the Performance Period in which
he is a Participant. In the event of the Termination of Employment of a
Participant, the Committee, in its sole discretion, may determine not to
pay any awards or to reduce the awards payable to him with regard to any
prior or current Performance Period.
8. Payment of Awards
-----------------
Unless otherwise determined by the Committee, payment shall be made as soon
as practicable following the close of each Performance Period, except as
otherwise provided in Section 9 of this Plan.
9. Deferral of Awards
------------------
Participants, who are selected by the Committee as being eligible to
participate in TAMPAX's 1981 Deferred Compensation Plan, may elect to defer
all or a portion of their awards in accordance with the terms of such 1981
Deferred Compensation Plan.
8
<PAGE>
10. Rights of Participants
----------------------
Nothing contained in the Plan and no action taken pursuant to the Plan
shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Company and any Participant or his legal
representative or designated beneficiary, or any other persons. Any Annual
Plan Accrual that may be established by the Company in connection with the
Plan shall continue to be a part of the general funds of the Company, and
no individual or entity other than the Company shall have any interest in
such funds until paid to a Participant, his legal representative or
designated beneficiary. If and to the extent that any Participant or his
legal representative or designated beneficiary, as the case may be,
acquires a right to receive any payment from the Company pursuant to the
Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company.
11. Non-Transferability of Rights under the Plan
--------------------------------------------
No amounts payable or other rights under the Plan shall be sold,
transferred, assigned, pledged or otherwise disposed of or encumbered by a
Participant, except as provided herein.
9
<PAGE>
12. Agreements with Participants
----------------------------
Each Participant shall be required to enter into an agreement with TAMPAX
which shall contain such provisions, consistent with the provisions of the
Plan, as may be established from time to time by the Committee, including
any provisions which may be advisable to comply with applicable laws,
regulations, rulings, or guidelines of any government authority.
13. Withholding Taxes
-----------------
The Company shall have the right to deduct withholding taxes from any
payments made pursuant to the Plan, or make such other provisions as it
deems necessary or appropriate to satisfy its obligations to withhold
federal, state or local income or other taxes incurred by reason of
payments pursuant to the Plan. In lieu thereof, the Company shall have the
right to withhold the amount of such taxes from any other sums due or to
become due from the Company to the Participant upon such terms and
conditions as the Committee may prescribe.
10
<PAGE>
14. No Employment Rights
--------------------
Nothing in this Plan or any booklet or other document describing or
referring to this Plan shall be deemed to confer on any Participant the
right to continue in the employ of the Company or his respective employer
or affect the right of such employer to terminate the employment of any
such person with or without cause.
15. Termination, Amendment and Modification
---------------------------------------
The Committee may from time to time amend, modify or discontinue the Plan
or any provision hereof. No amendment to or discontinuance or termination
of the Plan shall, without the written consent of the Participant,
adversely affect any rights of such Participant with respect to amounts
previously awarded. The Plan shall continue until terminated by the
Committee.
16. Notices
-------
Each Participant shall be responsible for furnishing the Committee with the
current and proper address for the mailing of notices and the delivery of
agreements and payments. Any notice required or permitted to be given
shall be deemed given if directed to the person to whom addressed at such
address
11
<PAGE>
and mailed by regular United States mail, first-class and prepaid. If any
item mailed to such address is returned as undeliverable to the addressee,
mailing will be suspended until the Participant furnishes the proper
address.
17. Severability of Provisions
--------------------------
If any provision of the Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provisions
had not been included.
18. Headings and Captions
---------------------
The headings and captions herein are provided for reference and convenience
only, shall not be considered part of the Plan, and shall not be employed
in the construction of the Plan.
19. Controlling Law
---------------
This Plan shall be construed and enforced according to the laws of the
State of New York to the extent not preempted by Federal law, which shall
otherwise control.
1981AIP
12
<PAGE>
EXHIBIT 10.17
August 29, 1994
Mr. Thomas Soper III
255 Strawberry Hill Avenue #D5
Stamford, Connecticut 06902
Dear Mr. Soper:
We are pleased to confirm the terms of your employment with Tambrands Inc.
(the "Company").
1. Duties. You will become an employee of the Company on August 29, 1994
------
(the "Commencement Date").
You will be placed on the Company payroll at the rate of $1.00 per month
until you physically report for duty, which will be no later than the 10th of
October, 1994, at which time your base salary will be treated in accordance with
item 2 below. Effective as of such date, you will be the Senior Vice President
- Corporate Human Resources and Communications of the Company. You shall report
directly to the Company's President and Chief Executive Officer. All other
terms and conditions of this agreement will be in effect as of the "Commencement
Date."
Immediately upon your appointment as Senior Vice President, Corporate Human
Resources and Communications of the Company, you will devote all of your skill,
knowledge and full working time (reasonable vacation time and absence for
sickness or disability excepted) solely and exclusively to the performance of
your duties hereunder.
2. Base Salary. As compensation for the duties to be performed by you
-----------
under the terms of this letter agreement, the Company will pay you a base salary
in the amount of $250,000 per annum, payable in semi-monthly installments at the
same time as the Company pays salary to its other executive employees and
subject to all applicable deductions or reductions therein made pursuant to your
elections under the Company's compensation plans or programs. It is
contemplated that the Company will review your base salary from time to time
and, at the discretion of the Compensation Committee of the Board of Directors,
may
1
<PAGE>
increase your base salary based upon your performance, then generally prevailing
industry salary scales and other relevant factors, including, without
limitation, the Company's general compensation practices for its executive
officers. (Such annual base salary, as it may hereafter be increased, will be
referred to as your "Base Salary").
3. Incentive Bonus. While you are providing services pursuant to this
---------------
letter, you will be entitled to participate in the Company's Annual Incentive
Plan (the "AIP") as in effect from time to time. Your annual bonus opportunity
under the AIP at the target level of performance will be equal to 42% of your
Base Salary. Under the terms of the AIP, you may receive more or less than 42%
of your Base Salary if performance exceeds or falls short of target levels. Any
bonus payable to you under the AIP will be paid to you at the same time as
bonuses are paid to other executives under the AIP and subject to the terms and
conditions of the AIP.
Notwithstanding the foregoing, in no event shall the amount payable to you
as an annual bonus in respect of 1994 services be less than 42% of the base
salary payable to you for 1994 services. In addition, contingent on forfeiture
of your annual incentive at Alexander & Alexander Services, the Company will
provide a cash payment equal to the prorated target incentive you would have
received for the portion of 1994 you worked at Alexander & Alexander Services
Inc. The sum of the bonuses payable in accordance with the two preceding
sentences, if the 1994 Alexander & Alexander Services bonus payable in
accordance with the second preceding sentence , if the 1994 A&AS Annual
Incentive is not forfeited, is referred to in this agreement as the "1994
Targeted Bonus".
For services performed during 1995, you will receive no less than two-
thirds of your targeted bonus level of 42% of base salary under the AIP. You
may receive more if performance exceeds two thirds of targeted levels.
4. Stock Options. Effective as of the Commencement Date, you will be
-------------
granted a stock option having a ten-year term for 35,000 shares of the Company's
----------------------
common stock (the "Option") under the terms of the Company's 1991 Stock Option
Plan (the "1991 Plan"). The Option will be exercisable in three approximately
equal annual installments on each of the first three anniversaries of the
Commencement Date, but will become exercisable earlier upon the date, if any, on
which a Change of Control (as defined in the 1991
2
<PAGE>
Plan) occurs or on which your employment terminates due to your (i) death, (ii)
- --
Disability (as defined in the 1991 Plan), (iii) retirement prior to age 65 with
---
the consent of the committee responsible for administering the 1991 Plan or (iv)
--
retirement at age 65. The per share exercise price for the shares subject to
the Option will be determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Number of Shares Exercise Price
---------------- --------------
<S> <C>
17,500 Fair market value of a share on August 29, 1994 as
determined under the 1991 Plan (hereafter referred to
as the "Fair Market Value").
5,834 Fair Market Value plus $5.00
5,833 Fair Market Value plus $10.00
5,833 Fair Market Value plus $15.00
</TABLE>
All other terms of the Option will be as provided in the 1991 Plan and the
agreement relating to such grant, which terms shall be no less favorable than
the terms that would apply under the 1991 Plan if there were no limitation upon
their scope under the option agreement.
You shall be eligible to receive future awards under the 1991 Plan (or
any successor thereto) at a level commensurate with your position and in
accordance with the Company's compensation practices and policies generally
applicable to the Company's executive officers as in effect from time to time,
provided that you will not receive any additional stock option grants in 1994.
-------- ----
You will also be eligible to participate in any amended or newly developed cash
or equity-based executive compensation plans on the same basis as described in
the preceding sentence. At current Company stock prices and under the Company's
current executive compensation practices, the level of option award for the
Senior Vice President, Corporate Human Resources and Communications position is
approximately 8,100 shares per year.
5. Restricted Stock. You shall be eligible to receive an award of
----------------
600 restricted shares of the Company's common stock (the "Award") under the 1989
Restricted Stock Plan (or any successor thereto) (the "1989 Plan") in February
1995. You shall be eligible to receive future
3
<PAGE>
awards under the 1989 Plan at a level commensurate with your position and in
accordance with the Company's compensation practices and policies generally
applicable to the Company's executive officers as in effect from time to time.
At current Company stock prices and under the Company's current executive
compensation practices, the level of restricted shares awarded for the Senior
Vice President, Corporate Human Resources and Communications is approximately
600 shares per year. All terms and conditions of your Awards will be as
provided in the 1989 Plan and the agreement relating to the Award.
6. Change of Control Agreement. As of the date hereof and effective
---------------------------
as of the Commencement Date, you and the Company will enter into an "Employment
Protection Agreement" substantially in the form attached hereto as Exhibit A.
If there is a Change in Control prior to October 10, 1994 or prior to payment of
a 1994 annual bonus, the Base Salary and 1994 Targeted Bonus shall be used in
determining the level of salary and bonus under your Employment Protection
Agreement, notwithstanding any contrary provisions of such agreement.
7. Employee Benefits. From and after the Commencement Date, you will
-----------------
be eligible to participate in the employee benefit plans and programs generally
available to the Company's employees (including, but not limited to, coverage
under the Company's medical, dental, life and disability insurance plans and
participation in the Company's Pension Plan and Savings Plan) as in effect from
time to time on the same basis as the Company's other employees, subject to the
terms and provisions of such plans and programs. You will receive four weeks
paid vacation per annum.
You will at all times during your employment by the Company be
designated as an Executive Participant for purposes of the Company's
Supplemental Executive Retirement Plan as amended and restated effective July 1,
1994 (the "SERP"). As such, your SERP benefit will be calculated under the
"Mid-Career Formula" of the SERP. You will be eligible to participate in the
SERP to the extent that the benefits that you may accrue, or the compensation
that may be taken into account in calculating the benefits that you may accrue,
under the Company's Pension Plan are affected by any limitation required for the
Pension Plan to satisfy the applicable requirements of the Internal Revenue
Code. Your SERP benefits will be payable in accordance with the terms of the
SERP such that in the event that your employment with
4
<PAGE>
the Company is "Involuntarily Terminated" within two years following the
occurrence of a "Change of Control" (as each such term is defined in the SERP)
your benefits accrued thereunder shall be calculated as though you had two
additional years of service and you shall be deemed to be fully vested in your
entire such benefits.
For purposes of determining "Actuarial Equivalence" under the SERP, the
actuarial assumptions used shall be no less favorable than (i) the actuarial
assumptions in effect for funding purposes on the date of determination under
the Pension Plan for Employees of Tambrands Inc., as amended from time to time
(the "Pension Plan"), or any successor thereto which is a tax-qualified plan
under the applicable provisions of the Internal Revenue Code of 1986, as
amended, or (ii) the actuarial assumptions in effect for funding purposes under
the Pension Plan as of the date of such Plan's termination, if the Pension Plan
is no longer in effect and there is no such successor plan.
In the event of your termination of employment for any reason prior to
becoming fully vested in the SERP's "Mid-Career Formula", you shall receive a
supplemental benefit which shall be calculated in accordance with the attached
"Minimum Supplemental Pension Term Sheet"; provided, however, that the Company's
-----------------------------------------
and your actuary shall promptly review such Term Sheet and we agree that it
shall be amended as is necessary to fully effectuate the objective expressed
therein.
8. Executive Perquisites. You will be eligible to receive the
---------------------
perquisites and other personal benefits made available to the Company's senior
executives from time to time, including, without limitation, payment of or
reimbursement for up to $10,000 per annum for personal tax and financial
planning.
9. Expenses. The Company will reimburse you for all reasonable
--------
expenses incurred by you in connection with your performance of services under
this letter agreement in accordance with the Company's policies, practices and
procedures.
10. Termination of Employment. If the Company terminates your
-------------------------
employment prior to age 65 for any reason other than Cause or Disability or you
terminate your employment as a result of a Termination for Good Reason, the
Company will pay you severance benefits in an aggregate amount equal to one and
one-half (1.5) times your then
5
<PAGE>
current annual Base Salary in one lump sum payment, unless you specifically
request and the Company agrees to make the payment of all or any portion of this
payment over time, not to exceed 18 months. In addition, you will be paid a
bonus for the year of termination equal to the target bonus for the year of
termination, if one has been established, or for the preceding year, if such
target has not yet been established; provided, however, that in calculating the
-------- -------
amount of such bonus, performance objectives which relate to individual
performance shall be assumed to have been fully attained and performance
objectives which relate to corporate performance shall take into account actual
corporate performance; and further provided, that the bonus so determined shall
------- --------
be prorated for the number of months worked during the year of termination.
In the event your employment terminates (i) due to your death or
-
Disability or after age 65, (ii) is terminated by the Company for Cause or (iii)
-- ---
is terminated by you other than as a result of a Termination for Good Reason,
you will be entitled to receive the compensation and benefits payable to you
under the Company's otherwise applicable employee benefit plans or programs.
Any benefits payable to you pursuant to this paragraph 10 will be in full
satisfaction of all liabilities to you under this agreement and with respect to
any other claim you may have in conjunction with your termination of employment
(excluding any rights you may have under the 1991 Plan or this letter with
respect to options, under the 1989 Restricted Stock Plan with respect to
restricted stock, any vested benefits you may have under the terms of the
Company's SERP, Pension Plan or Savings Plan, but including, without limitation,
any claim for benefits under the Company's Executive Severance Program). These
benefits will not be subject to any offset, mitigation or other reduction as a
result of your receiving salary or other benefits by reason of your securing
other employment.
For purposes of this agreement, the following terms will have the
meanings set forth below:
"Cause" means (i) your willful failure to perform substantially your
-
duties as an officer and employee of the Company (other than due to
physical or mental illness) that results in material economic damage to the
Company, (ii) your engaging in serious misconduct that results in material
--
economic damage to the Company, (iii) your having been convicted of, or
---
6
<PAGE>
entered a plea of nolo contendere to, a crime that constitutes a felony, or
---- ----------
(iv) your unauthorized disclosure of confidential information (unless such
--
disclosure was believed by you to be appropriate in the course of properly
carrying out your duties under this agreement, and other than to the extent
required by an order of a court having competent jurisdiction or under
subpoena from an appropriate government agency) that has resulted or is
likely to result in material economic damage to the Company. For purposes
of this definition, no act, or failure to act on your part, shall be
considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that such actions or omission was in
the best interest of the Company. Prior to terminating your employment for
Cause, the Company shall deliver to you reasonable advance written notice
of any proposed action by the Board of Directors of the Company (the
"Board") relating to your termination for Cause specifying the particulars
in detail sufficient to give you an informed opportunity to be heard before
the Board, together with your counsel. No termination for Cause shall be
effective without the Board having decided after such hearing , by the
affirmative vote of a majority of its members at a meeting of the Board,
that you were guilty of conduct constituting Cause, as defined herein.
"Disability" means that, as a result of your incapacity due to
physical or mental illness, you have been absent from your duties to the
Company on a substantially full-time basis for 180 days in any twelve-month
period.
"Termination for Good Reason" means a voluntary termination of your
employment which occurs within 90 days following the occurrence of any of
the following events without your prior written consent: (i) any assignment
-
to you of any duties or authorities which are different from, and result in
a diminution of, the duties and authorities you are to perform or possess
as Senior Vice President, Corporate Human Resources and Communications of
the Company pursuant to this letter agreement, (ii) your removal from or
--
any failure to reelect or redesignate you to the position of Senior Vice
President, Corporate Human Resources and Communications of the Company,
except in connection with a termination of your employment by the Company
for Cause or (iii) any reduction in your Base Salary or
---
7
<PAGE>
(iv) any action which results in your ceasing to report directly to the
Company's President and Chief Executive Officer.
11. Binding Effect.
--------------
(a) This letter agreement will inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. If
you should die while any amounts would still be payable to you
under this letter agreement if you had continued to live, all
such amounts, unless otherwise provided herein, will be paid in
accordance with the terms of this letter agreement to your
personal or legal representatives, executors, administrators,
heirs, distributees, devisees, legatees or estate, as the case
may be.
(b) The Company will 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, by agreement in form and substance satisfactory to you,
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be breach of this
Agreement. 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 executes and delivers the
agreement provided for in this Section 11(b) or which otherwise
becomes bound by all the terms and provisions of this Agreement
by operation of law.
12. Indemnification. The Company agrees to indemnify you to the
---------------
fullest extent permitted under its By-laws as in effect from time to time. The
Company shall advance to you all reasonable costs and expenses incurred by you
in connection with any Proceeding within 20 days after receipt by the Company of
a written request for such advance. Such request shall include an itemized list
of the
8
<PAGE>
costs and expenses and an undertaking by you to repay the amount of such advance
if it shall ultimately be determined that you are not entitled to be indemnified
against such costs and expenses. For purposes of this Section 12, a
"Proceeding" shall mean any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which you are made, or are threatened to be
made, a party to, or a witness in, such action, suit or proceeding by reason of
the fact that you are or were an officer, director or employee of the Company or
are or were serving as an officer, director, member, employee, trustee or agent
of any other entity at the request of the Company. The Company shall not settle
any proceeding or claim in any manner which would impose on you any penalty or
limitation without your prior written consent. You agree that you will not
unreasonably withhold your consent to any proposed settlement.
13. General Provisions. No provisions of this letter agreement may
------------------
be modified, waived or discharged unless such modification, waiver or discharge
is agreed to in a writing signed by you and such Company officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
Except as set forth in the Employment Protection Agreement referenced
in Section 6 of this letter no agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this letter agreement. The
invalidity or unenforceability of any one or more provisions of this letter
agreement will not affect the validity or enforceability of any other provision
of this letter agreement, which will remain in full force and effect. This
letter agreement may be executed in one or more counterparts, each of which will
be deemed to be an original but all of which together will constitute one and
the same instrument.
All amounts payable to you hereunder will be paid net of any and all
applicable income or employment taxes required to be withheld therefrom under
applicable Federal, State or local laws or regulations.
9
<PAGE>
The validity, interpretation, construction and performance of this
letter agreement will be governed by the laws of the State of New York, without
giving effect to its conflict of laws provisions.
14. Due Authorization. The Company represents and warrants to you
-----------------
that (i) the Company has all requisite corporate power and authority to enter
into this agreement and the agreements referenced in Sections 6 and 7 of this
agreement, (ii) the execution and delivery of all such agreements and the
performance of the Company's obligations under all such agreements have been
duly authorized by all necessary corporate action on the part of the Company and
(iii) all such agreements have been duly executed by the Company and constitute
the Company's valid and binding obligations, enforceable against it in
accordance with their terms.
15. Notice. For the purpose of this agreement, notices and all other
------
communications provided for in the agreement shall be in writing and shall be
deemed to have been duly given on the third business day following the mailing
of such notice or communication by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to you:
Mr. Thomas Soper III
255 Strawberry Hill Avenue
Unit D-5
Stamford, CT 06902
If to the Company:
Tambrands Inc.
777 Westchester Avenue
White Plains, NY 10604
Attn: Corporate Counsel
or to such other address as the party to be notified shall have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
* * * *
10
<PAGE>
If the foregoing accurately sets forth the terms of your employment
with the Company, please so indicate by signing below and returning one signed
copy of this letter agreement to me.
Sincerely,
TAMBRANDS INC.
/s/EDWARD T. FOGARTY
_____________________________
Edward T. Fogarty
President & CEO
ACCEPTED AND AGREED
as of this 29th day
of August, 1994
/s/THOMAS SOPER III
____________________________
Thomas Soper III
11
<PAGE>
"Minimum Supplemental Pension Term Sheet"
--------------------------------------------------------------------------------
Thomas Soper III
[] Objective
Provide a supplemental benefit (the "Supplemental Benefit") during the
period employee is unvested in the Tambrands Mid-Career formula, equal
to the benefit that would have been provided by Alexander & Alexander
Services Inc. under the A&AS Supplemental Pension Plan in effect as of
August 29, 1994 ("A&AS SERP") had Mr. Soper remained with A&AS for up
to an additional five years. For example,
Service Under A&AS
Tambrands Service Supp. Benefit Calc.
----------------- -------------------
1 year 10 years
2 years 11 years
3 years 12 years
4 years 13 years
5 years 14 years
6-9 years 14 years
provided, however, that if actual A&AS service credited for purposes of
the A&AS SERP is greater than nine years, such actual A&AS credited
service shall be used in determining service under the right-hand
column above.
[] Vesting
20% vesting per year during first five years, 100% vested after five
(5) and beyond.
[] Assumptions
[] The Supplemental Benefit will be equal to the benefit that would
have been payable from the A&AS SERP had Mr. Soper continued in
employment with A&AS for up to an additional five years. The amount
of such benefit shall be determined as of the date payment commences
under the A&AS SERP and shall be assumed to be paid in the same form
as benefits are in fact paid under the A&AS SERP; provided, however,
that if Mr. Soper and the Company agree, such benefit will be paid
at such other time and in such other form as is actuarially
equivalent to the benefit described in the preceding sentence.
<PAGE>
T. Soper
Page 2
[ ] If the A&AS SERP benefit does not provide for an offset of the vested
qualified A&AS Pension Plan benefit, then the Supplemental Benefit
shall be offset by such benefit.
[ ] Covered compensation taken into account under the A&AS SERP shall be
assumed to be $351,000, which amount shall be increased going forward
at 5% per year.
[ ] Once Tambrands "Mid-Career" SERP benefit has vested at age 55 with 10
years of service, the Company's obligation to provide a Supplemental
Benefit will lapse.
[ ] Assumptions for funding, actuarial equivalence and expense will be the
same as used for Tambrands SERP.
[ ] Funding equal to level annual funding over five years.
<PAGE>
EXHIBIT 10.18
October 18, 1994
Mr. Thomas J. Mason
1293 White Dove Circle
Westlake Village, CA 91362
Dear Mr. Mason:
We are pleased to confirm the terms of your employment with Tambrands Inc.
(the "Company").
1. Duties. You will become an employee of the Company on October 18, 1994
------
(the "Commencement Date").
You will be placed on the Company payroll at the rate of $1.00 per month
until you physically report for duty, which will be no later than the 24th of
October, 1994, at which time your base salary will be treated in accordance with
item 4 below. Effective as of such date, you will be the Group Vice President,
International of the Company. You shall report directly to the Company's
President and Chief Executive Officer. All other terms and conditions of this
agreement will be in effect as of the "Commencement Date."
Immediately upon your appointment as Group Vice President, International,
you will devote all of your skill, knowledge and full working time (reasonable
vacation time and absence for sickness or disability excepted) solely and
exclusively to the performance of your duties hereunder.
2. Location. You will be temporarily assigned to the Corporate
--------
Headquarters at 777 Westchester Avenue in White Plains upon your "Commencement
Date". On or about July 1, 1995, you will be considered an expatriate with a
home country of the U.S. and an assignment location of the U.K. As of the
actual date of your international assignment, you will be assigned to Tambrands
Ltd. headquarters, currently located in Woking, England and such date shall be
deemed the commencement date of your expatriate assignment.
3. Expatriate Assignment. The terms of your expatriate assignment will be
---------------------
finalized in the first quarter of 1995 and will be included as a rider to this
employment
1
<PAGE>
agreement. The terms will follow those provided in the Tambrands International
Assignment Policy, except where specifically noted in the above mentioned rider.
4. Base Salary. As compensation for the duties to be performed by you
-----------
under the terms of this letter agreement, the Company will pay you a base salary
in the amount of $300,000 per annum, payable in semi-monthly installments at the
same time as the Company pays salary to its other executive employees and
subject to all applicable deductions or reductions therein made pursuant to your
elections under the Company's compensation plans or programs. It is
contemplated that the Company will review your base salary from time to time
and, at the discretion of the Compensation Committee of the Board of Directors,
may increase your base salary based upon your performance, then generally
prevailing industry salary scales and other relevant factors, including, without
limitation, the Company's general compensation practices for its executive
officers. (Such annual base salary, as it may hereafter be increased, will be
referred to as your "Base Salary").
5. Sign-On Bonus. You will receive a sign-on bonus of $100,000, less
-------------
applicable withholdings, payable in the first quarter of 1995, when AIP awards
are paid. This payment will be in lieu of any 1994 AIP award and recognizes any
foregone compensation from your prior employer.
6. Incentive Bonus. While you are providing services pursuant to this
---------------
letter, you will be entitled to participate in the Company's Annual Incentive
Plan (the "AIP") as in effect from time to time. Your annual bonus opportunity
under the AIP at the target level of performance will be equal to 50% of your
Base Salary. Under the terms of the AIP, you may receive more or less than 50%
of your Base Salary if performance exceeds or falls short of target levels. Any
bonus payable to you under the AIP will be paid to you at the same time as
bonuses are paid to other executives under the AIP and subject to the terms and
conditions of the AIP.
For services performed during 1995, you will receive no less than two-
thirds of your targeted bonus level of 50% of base salary under the AIP. You
may receive more if performance exceeds two thirds of targeted levels.
7. Stock Options. Effective as of the Commencement Date, you will be
-------------
granted a stock option having a ten-year term for 50,000 shares of the Company's
----------------------
common
2
<PAGE>
stock (the "Option") under the terms of the Company's 1991 Stock Option Plan
(the "1991 Plan"). The Option will be exercisable in three approximately equal
annual installments on each of the first three anniversaries of the Commencement
Date, but will become exercisable earlier upon the date, if any, on which a
Change of Control (as defined in the 1991 Plan) occurs or on which your
employment terminates due to your (i) death, (ii) Disability (as defined in the
- --
1991 Plan), (iii) retirement prior to age 65 with the consent of the committee
---
responsible for administering the 1991 Plan or (iv) retirement at age 65. The
--
per share exercise price for the shares subject to the Option will be determined
in accordance with the following schedule:
<TABLE>
<CAPTION>
Number of Shares Exercise Price
---------------- --------------
<S> <C>
25,000 Fair market value of a share on August 29, 1994 as
determined under the 1991 Plan (hereafter referred to
as the "Fair Market Value").
8,334 Fair Market Value plus $5.00
8,333 Fair Market Value plus $10.00
8,333 Fair Market Value plus $15.00
</TABLE>
All other terms of the Option will be as provided in the 1991 Plan and the
agreement relating to such grant, which terms shall be no less favorable than
the terms that would apply under the 1991 Plan if there were no limitation upon
their scope under the option agreement.
You shall be eligible to receive future awards under the 1991 Plan (or
any successor thereto) at a level commensurate with your position and in
accordance with the Company's compensation practices and policies generally
applicable to the Company's executive officers as in effect from time to time,
provided that you will not receive any additional stock option grants in 1994.
-------- ----
You will also be eligible to participate in any amended or newly developed cash
or equity-based executive compensation plans on the same basis as described in
the preceding sentence. At current Company stock prices and under the Company's
current executive compensation practices, the level of option award for the
Group Vice President, International position is approximately 12,200 shares per
year.
3
<PAGE>
8. Restricted Stock. You shall be eligible to receive an award of
----------------
900 restricted shares of the Company's common stock (the "Award") under the 1989
Restricted Stock Plan (or any successor thereto) (the "1989 Plan") in February
1995. You shall be eligible to receive future awards under the 1989 Plan at a
level commensurate with your position and in accordance with the Company's
compensation practices and policies generally applicable to the Company's
executive officers as in effect from time to time. At current Company stock
prices and under the Company's current executive compensation practices, the
level of restricted shares awarded for the Group Vice President, International
is approximately 900 shares per year. All terms and conditions of your Awards
will be as provided in the 1989 Plan and the agreement relating to the Award.
9. Change of Control Agreement. As of the date hereof and effective
---------------------------
as of the Commencement Date, you and the Company will enter into an "Employment
Protection Agreement" substantially in the form attached hereto as Exhibit A.
If there is a Change in Control prior to October 24, 1994 or prior to payment of
a 1994 Bonus, the Base Salary and 1994 Targeted Bonus shall be used in
determining the level of salary and bonus under your Employment Protection
Agreement, notwithstanding any contrary provisions of such agreement.
10. Employee Benefits. From and after the Commencement Date, you
-----------------
will be eligible to participate in the employee benefit plans and programs
generally available to the Company's U.S. employees (including, but not limited
to, coverage under the Company's medical, dental, life and disability insurance
plans and participation in the Company's Pension Plan and Savings Plan) as in
effect from time to time on the same basis as the Company's other U.S.
employees, subject to the terms and provisions of such plans and programs. You
will receive four weeks paid vacation per annum.
You will at all times during your employment by the Company be
designated as an Executive Participant for purposes of the Company's
Supplemental Executive Retirement Plan as amended and restated effective July 1,
1994 (the "SERP"). As such, your SERP benefit will be calculated under the
"Mid-Career Formula" of the SERP. You will be eligible to participate in the
SERP to the extent that the benefits that you may accrue, or the compensation
that may be taken into account in calculating the benefits that you may accrue,
under the Company's Pension Plan are affected by
4
<PAGE>
any limitation required for the Pension Plan to satisfy the applicable
requirements of the Internal Revenue Code. Your SERP benefits will be payable
in accordance with the terms of the SERP such that in the event that your
employment with the Company is "Involuntarily Terminated" within two years
following the occurrence of a "Change of Control" (as each such term is defined
in the SERP) your benefits accrued thereunder shall be calculated as though you
had two additional years of service and you shall be deemed to be fully vested
in your entire such benefits.
For purposes of determining "Actuarial Equivalence" under the SERP, the
actuarial assumptions used shall be no less favorable than (i) the actuarial
assumptions in effect for funding purposes on the date of determination under
the Pension Plan for U.S. Employees of Tambrands Inc., as amended from time to
time (the "Pension Plan"), or any successor thereto which is a tax-qualified
plan under the applicable provisions of the Internal Revenue Code of 1986, as
amended, or (ii) the actuarial assumptions in effect for funding purposes under
the Pension Plan as of the date of such Plan's termination, if the Pension Plan
is no longer in effect and there is no such successor plan.
In the event of your termination of employment for any reason prior to
becoming fully vested in the SERP's "Mid-Career Formula", you shall receive a
supplemental benefit which shall be calculated in accordance with the attached
"Minimum Supplemental Pension Term Sheet"; provided, however, that the Company's
-----------------------------------------
and your actuary shall promptly review such Term Sheet and we agree that it
shall be amended as is necessary to fully effectuate the objective expressed
therein.
11. Executive Perquisites. You will be eligible to receive the
---------------------
perquisites and other personal benefits made available to the Company's senior
executives from time to time, including, without limitation, payment of or
reimbursement for up to $10,000 per annum for personal tax and financial
planning.
Under the terms of the International Assignment Policy, Tambrands will
engage an international tax consulting firm (currently Ernst & Young) to prepare
and file your returns. The fee for such services will be borne by the Company.
12. Expenses. The Company will reimburse you for all reasonable
--------
expenses incurred by you in connection with
5
<PAGE>
your performance of services under this letter agreement in accordance with the
Company's policies, practices and procedures.
13. Termination of Employment. If the Company terminates your
-------------------------
employment prior to age 65 for any reason other than Cause or Disability or you
terminate your employment as a result of a Termination for Good Reason, the
Company will pay you severance benefits in an aggregate amount equal to one and
one-half (1.5) times your then current annual Base Salary in one lump sum
payment, unless you specifically request and the Company agrees to make the
payment of all or any portion of this payment over time, not to exceed 18
months. In addition, you will be paid a bonus for the year of termination equal
to the target bonus for the year of termination, if one has been established, or
for the preceding year, if such target has not yet been established; provided,
--------
however, that in calculating the amount of such bonus, performance objectives
-------
which relate to individual performance shall be assumed to have been fully
attained and performance objectives which relate to corporate performance shall
take into account actual corporate performance; and further provided, that the
------- --------
bonus so determined shall be prorated for the number of months worked during the
year of termination.
In the event your employment terminates (i) due to your death or
-
Disability or after age 65, (ii) is terminated by the Company for Cause or (iii)
-- ---
is terminated by you other than as a result of a Termination for Good Reason,
you will be entitled to receive the compensation and benefits payable to you
under the Company's otherwise applicable employee benefit plans or programs.
Any benefits payable to you pursuant to this paragraph 10 will be in full
satisfaction of all liabilities to you under this agreement and with respect to
any other claim you may have in conjunction with your termination of employment
(excluding any rights you may have under the 1991 Plan or this letter with
respect to options, under the 1989 Restricted Stock Plan with respect to
restricted stock, any vested benefits you may have under the terms of the
Company's SERP, Pension Plan or Savings Plan, but including, without limitation,
any claim for benefits under the Company's Executive Severance Program). These
benefits will not be subject to any offset, mitigation or other reduction as a
result of your receiving salary or other benefits by reason of your securing
other employment.
6
<PAGE>
For purposes of this agreement, the following terms will have the
meanings set forth below:
"Cause" means (i) your willful failure to perform substantially your
-
duties as an officer and employee of the Company (other than due to
physical or mental illness) that results in material economic damage to the
Company, (ii) your engaging in serious misconduct that results in material
--
economic damage to the Company, (iii) your having been convicted of, or
---
entered a plea of nolo contendere to, a crime that constitutes a felony, or
---- ----------
(iv) your unauthorized disclosure of confidential information (unless such
--
disclosure was believed by you to be appropriate in the course of properly
carrying out your duties under this agreement, and other than to the extent
required by an order of a court having competent jurisdiction or under
subpoena from an appropriate government agency) that has resulted or is
likely to result in material economic damage to the Company. For purposes
of this definition, no act, or failure to act on your part, shall be
considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that such actions or omission was in
the best interest of the Company. Prior to terminating your employment for
Cause, the Company shall deliver to you reasonable advance written notice
of any proposed action by the Board of Directors of the Company (the
"Board") relating to your termination for Cause specifying the particulars
in detail sufficient to give you an informed opportunity to be heard before
the Board, together with your counsel. No termination for Cause shall be
effective without the Board having decided after such hearing , by the
affirmative vote of a majority of its members at a meeting of the Board,
that you were guilty of conduct constituting Cause, as defined herein.
"Disability" means that, as a result of your incapacity due to
physical or mental illness, you have been absent from your duties to the
Company on a substantially full-time basis for 180 days in any twelve-month
period.
"Termination for Good Reason" means a voluntary termination of your
employment which occurs within 90 days following the occurrence of any of
the following events without your prior written consent: (i) any assignment
-
to you of any duties or authorities which
7
<PAGE>
are different from, and result in a diminution of, the duties and
authorities you are to perform or possess as Senior Vice President,
Corporate Human Resources and Communications of the Company pursuant to
this letter agreement, (ii) your removal from or any failure to reelect or
--
redesignate you to the position of Group Vice President, International of
the Company, except in connection with a termination of your employment by
the Company for Cause or (iii) any reduction in your Base Salary or (iv)
---
any action which results in your ceasing to report directly to the
Company's President and Chief Executive Officer.
14. Binding Effect.
--------------
(a) This letter agreement will inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees. If
you should die while any amounts would still be payable to you
under this letter agreement if you had continued to live, all
such amounts, unless otherwise provided herein, will be paid in
accordance with the terms of this letter agreement to your
personal or legal representatives, executors, administrators,
heirs, distributees, devisees, legatees or estate, as the case
may be.
(b) The Company will 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, by agreement in form and substance satisfactory to you,
to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be breach of this
Agreement. 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 executes and delivers the
agreement provided for in this Section 11(b) or which otherwise
8
<PAGE>
becomes bound by all the terms and provisions of this Agreement
by operation of law.
15. Indemnification. The Company agrees to indemnify you to the
---------------
fullest extent permitted under its By-laws as in effect from time to time. The
Company shall advance to you all reasonable costs and expenses incurred by you
in connection with any Proceeding within 20 days after receipt by the Company of
a written request for such advance. Such request shall include an itemized list
of the costs and expenses and an undertaking by you to repay the amount of such
advance if it shall ultimately be determined that you are not entitled to be
indemnified against such costs and expenses. For purposes of this Section 15, a
"Proceeding" shall mean any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which you are made, or are threatened to be
made, a party to, or a witness in, such action, suit or proceeding by reason of
the fact that you are or were an officer, director or employee of the Company or
are or were serving as an officer, director, member, employee, trustee or agent
of any other entity at the request of the Company. The Company shall not settle
any proceeding or claim in any manner which would impose on you any penalty or
limitation without your prior written consent. You agree that you will not
unreasonably withhold your consent to any proposed settlement.
16. General Provisions. No provisions of this letter agreement may
------------------
be modified, waived or discharged unless such modification, waiver or discharge
is agreed to in a writing signed by you and such Company officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
Except as set forth in the Employment Protection Agreement referenced
in Section 9 of this letter no agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this letter agreement. The
invalidity or unenforceability of any one or more provisions of this letter
agreement will not affect the validity or enforceability of any other provision
of this letter agreement, which will remain in
9
<PAGE>
full force and effect. This letter agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
All amounts payable to you hereunder will be paid net of any and all
applicable income or employment taxes required to be withheld therefrom under
applicable Federal, State or local laws or regulations.
The validity, interpretation, construction and performance of this
letter agreement will be governed by the laws of the State of New York, without
giving effect to its conflict of laws provisions.
17. Due Authorization. The Company represents and warrants to you
-----------------
that (i) the Company has all requisite corporate power and authority to enter
into this agreement and the agreements referenced in Sections 6 and 7 of this
agreement, (ii) the execution and delivery of all such agreements and the
performance of the Company's obligations under all such agreements have been
duly authorized by all necessary corporate action on the part of the Company and
(iii) all such agreements have been duly executed by the Company and constitute
the Company's valid and binding obligations, enforceable against it in
accordance with their terms.
18. Notice. For the purpose of this agreement, notices and all other
------
communications provided for in the agreement shall be in writing and shall be
deemed to have been duly given on the third business day following the mailing
of such notice or communication by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to you:
Mr. Thomas J. Mason
1293 White Dove Circle
Westlake Village, CA 91362
If to the Company:
Tambrands Inc.
777 Westchester Avenue
White Plains, NY 10604
Attn: SVP Corporate Human Resources
10
<PAGE>
or to such other address as the party to be notified shall have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
* * * *
If the foregoing accurately sets forth the terms of your employment
with the Company, please so indicate by signing below and returning one signed
copy of this letter agreement to me.
Sincerely,
TAMBRANDS INC.
/s/ EDWARD T. FOGARTY
_____________________________
Edward T. Fogarty
President & CEO
ACCEPTED AND AGREED
as of this 18th day
of October, 1994
/s/ THOMAS J. MASON
____________________________
Thomas J. Mason
11
<PAGE>
"Minimum Supplemental Pension Term Sheet"
--------------------------------------------------------------------------------
Thomas J. Mason
[] Objective
Provide a supplemental benefit (the "Supplemental Benefit") during the
period employee is unvested in the Tambrands Mid-Career formula, equal
to the benefit that would have been provided under the Dole
Supplemental Pension Plan maintained for senior executives of Dole
Packaged Foods ("Dole SERP") had Mr. Mason remained with Dole for up to
an additional five years. For example,
Service Under Dole
Tambrands Service Supp. Benefit Calc.
----------------- -------------------
1 year 3 years
2 years 4 years
3 years 5 years
4 years 6 years
5 years 7 years
6-9 years 7 years
provided, however, that if actual Dole service credited for purposes of
the Dole SERP is greater than two years, such actual Dole credited
service shall be used in determining service under the right-hand column
above.
[] Vesting
20% vesting per year during first five years, 100% vested after five (5)
and beyond.
[] Assumptions
[] The Supplemental Benefit will be equal to the benefit that would
have been payable from the Dole SERP had Mr. Mason continued in
employment with Dole for up to an additional five years. The amount
of such benefit shall be determined as of the date payment
commences under the Dole SERP and shall be assumed to be paid in
the same form as benefits are in fact paid under the Dole SERP;
provided, however, that if Mr. Mason and the Company agree, such
benefit will be paid at such other time and in such other form as is
actuarially equivalent to the benefit described in the preceding
sentence.
<PAGE>
T. Mason
Page 2
[ ] If the Dole SERP benefit does not provide for an offset of the vested
qualified Dole Pension Plan benefit, then the Supplemental Benefit shall be
offset by such benefit.
[ ] Covered compensation taken into account under the Dole SERP shall be assumed
to be $450,000, which amount shall be increased going forward at 5% per
year.
[ ] Once Tambrands "Mid-Career" SERP benefit has vested with 10 years of
service, the Company's obligation to provide a Supplemental Benefit will
lapse.
[ ] Assumptions for funding, actuarial equivalence and expense will be the same
as used for Tambrands SERP.
[ ] Funding equal to level annual funding over five years.
<PAGE>
October 18, 1994
Mr. Thomas J. Mason
1293 White Dove Circle
Westlake Village, CA 91362
Dear Mr. Mason:
As agreed, you will be covered under the Company's Expatriate Relocation
Program. In addition, the Company has agreed to the following additional
provisions associated with the sale of your home in Westlake Village, California
and with the relocation of your family to the United Kingdom.
1. Any loss incurred by you on the ultimate sale of your property as
determined by the original purchase price of $985,000, minus the
selling price, will be reimbursed up to a maximum of $250,000. You
have informed us that the purchase price was $985,000. You have
agreed to provide the Company appropriate documentation to verify the
purchase price when and as required. This protection is for a term of
up to five (5) calendar years commencing with the date you and your
family first become resident in the United Kingdom.
2. Should you decide to rent your property in California during all or
part of your expatriate assignment, the Company will provide downside
protection in the event you are unable to rent your property, incur a
temporary interruption in rental stream of income or incur costs
associated with the rental/supervision of the tenant to the following
limits:
a. Should you incur an interruption in the rental income stream
and/or the rental income you obtain is less than your carrying
cost of the property, the Company will cover your actual losses
up to a maximum amount equal to the equivalent of two (2) months
of your full carrying costs over each of two separate eighteen
(18) consecutive month rental protection periods. Should the
amount of actual losses incurred not exceed the rental protection
period limit, then there shall be no carry over to the next
subsequent rental protection period.
b. The Company's obligation to provide any further rental income
protection shall cease at the end of the second rental protection
period--three (3) years in total.
<PAGE>
T. J. Mason
October 18, 1994
Page 2
c. You agree to make every good faith effort to rent your property
to a reputable tenant at then prevailing Fair Market Rates.
d. The Company's assistance is specifically limited to the above
provisions including the cost of agency fees associated with the
rental, and in the aggregate, not to exceed the specified maximum
limit per respective rental protection period.
e. As per the policy, the company -- in employing a Balance Sheet
Approach -- will be deducting a home country housing cost, as
well as providing fully paid Company provided U.K. housing for
the duration of your expatriate assignment following the general
principle that you shall neither financially gain nor lose on
housing during your overseas assignment.
2. The Company will, under the provisions of the expatriate policy,
deduct a hypothetical home country tax, and will be responsible for
planning and paying all taxes incurred by you during the expatriate
assignment. You agree to work with and to maintain and furnish to
Ernst & Young (or such other professional service firm as the Company
may from time to time so designate) such records and assistance may
require.
3. The home selling assistance as provided for under the company's
relocation policy shall be available to you for a period of five
calendar years subsequent to the commencement of your expatriate
assignment.
Should you have any questions regarding this information, please contact me
at (914) 696-6644.
With best regards,
/s/THOMAS SOPER, III
Thomas Soper, III
SVP, Corporate Human Resources
<PAGE>
Tambrands Inc.
FORM 10-K
PART IV, Item 14., Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
The following table sets forth the Company's ratio of earnings to fixed charges
for the periods indicated.
<TABLE>
<CAPTION>
Year Ended
(in thousands, except ratios) December 31,
------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes $141,751 $118,652 $191,863 $131,825 $154,696
Fixed charges 9,054 6,549 6,470 4,929 4,512
-------- -------- -------- -------- --------
Earnings $150,805 $125,201 $198,333 $136,754 $159,208
======== ======== ======== ======== ========
Fixed charges:
Interest portion of operating
lease expense:
Operating lease expense $ 4,270 $ 5,027 $ 4,031 $ 4,204 $ 2,221
Assumed interest factor 0.33 0.33 0.33 0.33 0.33
-------- -------- -------- -------- --------
Interest portion of operating
lease expense 1,409 1,659 1,330 1,387 733
Interest expense 7,645 4,890 5,140 3,542 3,779
-------- -------- -------- -------- --------
Fixed charges $ 9,054 $ 6,549 $ 6,470 $ 4,929 $ 4,512
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 16.7 19.1 30.7 27.7 35.3
======== ======== ======== ======== ========
</TABLE>
<PAGE>
EXHIBIT 21
----------
TAMBRANDS INC.
Subsidiaries of the registrant.
------------------------------
<TABLE>
<CAPTION>
(1) (2) (3)
Percentage of Voting
Securities Owned
--------------------------
State or Country By the By Other
Name of Subsidiary of Organization Company Subsidiaries
------------------------------ ----------------- ------- ----------------
<S> <C> <C> <C>
Tambrands Canada Inc. Canada 100%
Tambrands Europe Ltd. Delaware 100%
Tambrands Limited United Kingdom 100% (a)
Tambrands Ireland Ireland 100% (b)
Limited
Tambrands France S.A. France 100% (a)
ZAO Tambrands Russia 100% (a)
Tambrands AG Switzerland 100% (a)
Tambrands Benelux S.A. Belgium 100% (c)
Industrial Catenation South Africa 100% (a)
Services (Pty) Ltd.
Tambrands South Africa South Africa 100% (d)
(Pty) Ltd.
Tambrands PACE, Inc. Delaware 100%
Tambrands Czech Republic 100% (e)
Czechoslovakia Limited
Tambrands Poland Ltd. Poland 100% (e)
Tambrands de Venezuela, C.A. Venezuela 100% (e)
Tambrands - St. Petersburg Russia 100% (f)
Tambrands Ukraine Ukraine 100% (f)
Shenyang Tambrands People's Republic 80%
Company Limited of China
Tambrands Brasil Ltd. Delaware 100%
Tambrands Industria e Brazil 100% (g)
Comercio Limitada
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3)
Percentage of Voting
Securities Owned
--------------------------
State or Country By the By Other
Name of Subsidiary of Organization Company Subsidiaries
---------------------- ---------------- ------- ------------
<S> <C> <C> <C>
TIM International Delaware 100%
Investments Incorporated
Tambrands Dosmil, Mexico 100% (h)
S.A. de C.V.
</TABLE>
Notes: (a) Owned by Tambrands Europe Ltd.
(b) Owned by Tambrands Limited.
(c) Owned by Tambrands Europe Ltd. and Tambrands AG.
(d) Owned by Industrial Catenation Services (Pty) Ltd.
(e) Owned by Tambrands PACE, Inc.
(f) Owned by Tambrands Limited and Tambrands PACE, Inc.
(g) Owned by the Company in part directly and in part
indirectly through Tambrands Brasil Ltd.
(h) Owned by TIM International Investments Incorporated.
Exhibit.21
<PAGE>
EXHIBIT 23
Independent Auditors' Consent
-----------------------------
The Board of Directors
Tambrands Inc.:
We consent to incorporation by reference in the Registration Statement No. 33-
50961 on Form S-3 and Nos. 2-77947, 33-13902, 33-36746, 33-40161, 33-43713 and
33-50398 on Form S-8 of Tambrands Inc. of our reports dated January 24, 1995,
relating to the consolidated balance sheets of Tambrands Inc. and subsidiaries
as of December 31, 1994 and 1993, and the related consolidated statements of
earnings, retained earnings and cash flows for each of the years in the three-
year period ended December 31, 1994, and all related schedules, which reports
appear in the December 31, 1994 annual report on Form 10-K of Tambrands Inc.
Our reports refer to a change in accounting for postemployment benefits in 1993
and for postretirement benefits in 1992.
KPMG PEAT MARWICK LLP
Stamford, Connecticut
March 30, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/LILYAN H. AFFINITO
---------------------
Lilyan H. Affinito
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/PAUL S. DOHERTY
------------------
Paul S. Doherty
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/FLOYD HALL
-------------
Floyd Hall
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/ROBERT P. KILEY
------------------
Robert P. Kiley
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/JOHN LOUDON
--------------
John Loudon
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/RUTH M. MANTON
-----------------
Ruth M. Manton
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/JOHN A. MEYERS
-----------------
John A. Meyers
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/H. L. TOWER
--------------
H. L. Tower
Dated: March 14, 1995
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make,
constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of
them, with full power to act without the other, the true and lawful attorney of
the undersigned, in the name, place and stead of the undersigned to execute on
behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on
Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and
all amendments thereto, to be filed with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and
any and all other instruments which either of said attorneys deems necessary or
advisable to enable Tambrands Inc. to comply with the Act, the rules,
regulations and requirements of the SEC in respect thereof, and the securities
or Blue Sky laws of any State or other governmental subdivision, giving and
granting to each of said attorneys full power and authority to do and perform
each and every act and thing whatsoever necessary or appropriate to be done in
and about the premises as fully to all intents as the undersigned might or would
do if personally present at the doing thereof, with full power of substitution
and revocation, thereby ratifying and confirming all that said attorneys or
substitutes may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto executed this power of
attorney on the date indicated below.
/s/ROBERT M. WILLIAMS
---------------------
Robert M. Williams
Dated: March 14, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 13,876
<SECURITIES> 0
<RECEIVABLES> 82,049
<ALLOWANCES> (1,456)
<INVENTORY> 37,957
<CURRENT-ASSETS> 177,136
<PP&E> 314,457
<DEPRECIATION> (120,142)
<TOTAL-ASSETS> 379,075
<CURRENT-LIABILITIES> 203,160
<BONDS> 59,983
<COMMON> 10,887
0
0
<OTHER-SE> 71,127
<TOTAL-LIABILITY-AND-EQUITY> 379,075
<SALES> 644,513
<TOTAL-REVENUES> 644,513
<CGS> 206,111
<TOTAL-COSTS> 206,111
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 93
<INTEREST-EXPENSE> 7,645
<INCOME-PRETAX> 141,751
<INCOME-TAX> 52,022
<INCOME-CONTINUING> 89,729
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,729
<EPS-PRIMARY> 2.43
<EPS-DILUTED> 2.43
</TABLE>
