Change In Control Agreement - Hain Celestial Group Inc.
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT dated as of _________, 2000
(this "Agreement"), is made by and between The Hain Celestial Group, Inc., a
Delaware corporation having its principal offices at 50 Charles Lindbergh
Boulevard, Uniondale, New York 11553 (the "Company"), and [Executive Name],
[Executive Title] (the "Executive").
WHEREAS, the Company considers it essential to the best
interests of its shareholders to foster the continued employment of key
executive management personnel; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that, as is the case with many publicly-held corporations, the
possibility of a Change in Control (as defined in Section 1.4 below) of the
Company exists from time to time and that such possibility, and the uncertainty,
instability and questions which it may raise for and among key executive
management personnel, may result in the premature departure or significant
distraction of such management personnel to the material detriment of the
Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce, focus and encourage the continued attention and
dedication of key members of the executive management of the Company and its
subsidiaries, including (without limitation) the Executive, to their assigned
duties without distraction in the face of potentially disturbing or unsettling
circumstances arising from the possibility of a Change in Control of the
Company;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Definitions. For purposes of this Agreement, the
following terms have the meanings set forth below:
1.1 "Annual Base Salary" shall mean the Executive's rate of
regular base annual compensation prior to any reduction under a salary reduction
agreement pursuant to section 401(k) or section 125 of the Internal Revenue Code
of 1986, as amended from time to time (the "Code"), and shall not include
(without limitation) cost of living allowances, fees, retainers, reimbursements,
bonuses, incentive awards, prizes or similar payments.
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1.2 [Intentionally Omitted]
1.3 "Cause" for termination by the Company or any subsidiary
of the Executive's employment, after any Change in Control, shall mean (i) the
willful and continued failure by the Executive to substantially perform the
Executive's duties with the Company, or a subsidiary of the Company, as such
duties may reasonably be defined from time to time by the Board (or a duly
designated and authorized committee thereof), or to abide by the reasonable
written policies of the Company or of the Executive's primary employer (other
than any such failure resulting from the Executive's incapacity due to physical
or mental illness or any such actual or anticipated failure after the issuance
of a Notice of Termination by the Executive for Good Reason pursuant to Section
4.1) after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the manner in which
the Board believes that the Executive has not substantially performed the
Executive's duties or has not abided by any reasonable written policies, or (ii)
the continued and willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that the Executive's act, or failure to act, was in
the best interests of the Company or its subsidiaries.
1.4 "Change in Control" shall mean and be deemed to have
occurred if:
(i) The acquisition by any Person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
50% or more of the combined voting power of the then outstanding Voting
Stock of the Company; provided, however, that for purposes of this
Section 1.4(i), the following acquisitions shall not constitute a
Change of Control: (A) any issuance of Voting Stock of the Company
directly from the Company that is approved by the Incumbent Board (as
defined in Section 1.4(ii) below), (B) any acquisition by the Company
of Voting Stock of the Company or (C) any acquisition of Voting Stock
of the Company by any Person pursuant to a Business Combination (as
defined in Section 1.4(iii) below) that complies with clauses
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(A), (B) and (C) of Section 1.4(iii) below; or
(ii) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a member of the Board (a "Director") subsequent
to the date hereof whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least two-thirds
of the Directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without objection
to such nomination) shall be deemed to have been a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest (within the meaning of Rule 14a-11 of the
Exchange Act) with respect to the election or removal of Directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) consummation of a reorganization, merger or
consolidation, a sale or other disposition of all or substantially all
of the assets of the Company, or other transaction (each, a "Business
Combination"), unless, in each case, immediately following such
Business Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners of Voting Stock of the
Company immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the combined voting power
of the then outstanding shares of Voting Stock of the entity resulting
from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions
relative to each other as their ownership, immediately prior to such
Business Combination, (B) no Person (other than the Company or such
entity resulting from such Business Combination) beneficially owns,
directly or indirectly, 50% or more of the combined voting power of the
then outstanding shares of Voting Stock of the entity resulting from
such Business Combination and (C) at least a majority of the members of
the board of directors of the entity resulting from such Business
Combination were
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members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of
the Board providing for such Business Combination; or
(iv) the stockholders of the Company approve (a) the
sale or disposition by the Company (other than to a subsidiary of the
Company) of all or substantially all of the assets of the Company, or
(b) a complete liquidation or dissolution of the Company.
1.5 "Company" shall mean The Hain Celestial Group, Inc. and
any successor to its business and/or assets which assumes (either expressly, by
operation of law or otherwise) and/or agrees to perform this Agreement by
operation of law or otherwise (except in determining, under Section 1.3 hereof,
whether or not any Change in Control of the Company has occurred in connection
with such succession).
1.6 "Disability" shall mean and be deemed the reason for the
termination by the Executive of the Executive's employment, if, as a result of
the Executive's incapacity due to physical or mental illness, the Executive
shall have been absent from the full-time performance of the Executive's duties
for a period of three (3) consecutive months.
1.7 "Good Reason" for termination by the Executive of the
Executive's employment in connection with or as a result of any Change in
Control shall mean the occurrence (without the Executive's prior express written
consent) of any one of the following acts, or failures to act, unless, in the
case of any act or failure to act described in clauses (i), (iv), (v) or (vi)
below, such act or failure to act is corrected by the Company or any subsidiary
prior to the Date of Termination specified in the Notice of Termination given in
respect thereof:
(i) the assignment to the Executive of any duties or
responsibilities inconsistent with the Executive's most significant
position(s) (including without limitation status, offices, titles and
reporting responsibilities/rights) as an executive officer of the
Company and/or a subsidiary held during the one hundred eighty (180)
day period immediately preceding any related Potential Change in
Control, or a substantial adverse alteration of the Executive's
position or title(s) with the Company or any subsidiary or in the
nature of such status, offices, titles and reporting responsibilities/
rights;
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(ii) a reduction in the Executive's Annual Base
Salary as in effect on the date of this Agreement or as the same may be
increased at any time thereafter and from time to time;
(iii) the relocation of the Company's principal
executive offices to a location more than thirty (30) miles from its
location on the date of this Agreement (or, if different, more than
thirty (30) miles from where such offices are located immediately prior
to any Potential Change of Control) or the Company's requiring the
Executive to be based anywhere other than the location where the
Executive is performing his duties immediately prior to any Potential
Change in Control, except for required travel on the Company's business
to an extent substantially consistent with the Executive's business
travel obligations as of the date of the Potential Change in Control;
(iv) any failure by the Company to comply with any of
the provisions of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(v) the failure by the Company or a subsidiary to
continue in effect any pension benefit or incentive or deferred
compensation plan in which the Executive participates immediately prior
to any Potential Change in Control which is material to the Executive's
total compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan or arrangement) has been made
with respect to such plan, or the failure by the Company or a
subsidiary to continue the Executive's participation therein (or in
such substitute or alternative plan or arrangement) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to
other participants, as existed at the time of the Potential Change in
Control;
(vi) the failure by the Company or a subsidiary to
continue to provide the Executive with health and welfare benefits
substantially similar to those enjoyed by the Executive under any of
the Company's or a subsidiary's retirement, life insurance, medical,
health
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and accident, or disability or similar plans in which the Executive was
participating at the time of any Potential Change in Control, the
taking of any action by the Company or a subsidiary which would
directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of the Potential Change in Control, or the
failure by the Company or a subsidiary to provide the Executive with
the number of paid vacation days to which the Executive is entitled in
accordance with the Company or a subsidiary's normal vacation policy in
effect at the time of the Potential Change in Control;
(vii) any purported termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 4.1; and/or
(viii) a termination by the Executive of his employment for any reason
during the last 30 days of the Window Period.
1.8 "Person" shall have the meaning ascribed thereto in
Section 3(a)(9) of the Exchange Act, as modified, applied and used in Sections
13(d) and 14(d) thereof; provided, however, a Person shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries (in its capacity as such), (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation or
other entity owned, directly or indirectly, by the stockholders of the Company
in substantially the same character and proportions as their ownership of stock
of the Company.
1.9 "Potential Change in Control" shall mean and be
deemed to have occurred if:
(i) the Company enters into an agreement the
consummation of which would result in the occurrence of
a Change in Control;
(ii) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential
Change in Control has occurred; and/or
(iii) any Person becomes, after the date
hereof, the Beneficial Owner, directly or indirectly, of
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securities of the Company representing twenty five percent (25%) or
more of the combined voting power of the Company's then outstanding
securities, or any Person increases such Person's beneficial ownership
of such securities by five (5) percentage points or more over the
percentage so owned by such Person on the date hereof.
1.10 "Voting Power" means securities entitled to vote
generally in the election of directors.
1.11 "Window Period" shall mean the thirteen (13) month
period following a Change in Control.
2. Term of this Agreement. This Agreement shall commence on the date
hereof and shall continue in effect as long as the Executive is employed by the
Company, provided, however, that if (i) a Change in Control shall have occurred
during the Executive's employment with the Company, this Agreement shall
continue in effect until the termination of the applicable Window Period, or
(ii) if a Potential Change in Control shall have occurred during the Executive's
employment with the Company, this Agreement shall continue in effect until one
(1) year after the Executive's termination of employment with the Company (the
"Term").
3. Severance Payments.
3.1 Severance. The Company shall pay the Executive the
payments described in Section 3.1.1 and 3.1.2 (the "Severance Payments") upon
the termination of the Executive's employment with the Company during the Window
Period (including, but not limited to, the Executive's termination of employment
for Good Reason, death or Disability), unless such termination is (i) by the
Company for Cause, or (ii) by the Executive without Good Reason. In addition,
the Executive's employment shall be deemed to have been terminated immediately
following a Change in Control by the Company without Cause or by the Executive
for Good Reason if (a) the Executive reasonably demonstrates that the
Executive's employment was terminated prior to a Change in Control without Cause
(1) at the request of a Person who has entered into an agreement with the
Company the consummation of which will constitute a Change in Control (or who
has taken other steps reasonably calculated to effect a Change in Control) or
(2) otherwise in connection with, as a result of or in anticipation of a Change
in Control, (b) the Executive terminates his employment for Good Reason prior to
a Change in Control and the Executive reasonably demonstrates that the
circumstance(s) or event(s) which constitute such Good Reason occurred (1) at
the request of such Person or (2) otherwise in connection with, as a result of
or in anticipation of a Change in
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Control, or (c) the Executive dies or is terminated due to Disability, in each
case, after the occurrence of a Potential Change in Control and related Change
in Control actually occurs within one (1) year after the Date of Termination or
the date of death, as the case may be. The Executive's right to terminate the
Executive's employment for Good Reason shall not be affected by the Executive's
incapacity due to physical or mental illness. The Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting Good Reason hereunder.
3.1.1 In lieu of any further salary and bonus
payments to the Executive for periods subsequent to the Date of
Termination, the Company shall pay to the Executive (i) a lump sum
severance payment in cash (or at the Executive's sole and exclusive
option receive such amounts as salary continuation during the
applicable periods set forth below), equal to (x) two (2) times the
highest Annual Base Salary paid or payable to the Executive during the
thirty-six (36) month period immediately preceding the month in which
the Change in Control occurs, and (y) the aggregate of the maximum
bonuses (as defined in the Annual Incentive Plan (a copy of which is
attached hereto as Exhibit A) or if no Plan is in effect, the highest
annual amount paid or payable to the Executive during the thirty-six
(36) month period immediately preceding the month in which the change
in control occurs) which could have been earned, vested or otherwise
paid for the year in which the Change in Control occurs (for purposes
herein, the maximum bonuses shall automatically vest and be deemed
earned in their entirety as if the Executive was employed for the
entire applicable year period in which the Change in Control occurs and
shall be deemed payable to the Executive in full as of the Date of
Termination), and (ii) all unpaid accrued vacation through the Date of
Termination in accordance with the Company's plans and practices in
effect immediately prior to the Change in Control, provided that such
unpaid vacation has been accrued on the books and records of the
Company prior to the Date of Termination.
3.1.2 After the Date of Termination, the Company
shall continue to provide the Executive and/or the Executive's
dependents, as the case may be, with (i) life, disability, accident and
health insurance benefits ("Benefits Coverage") substantially similar
to those which the Executive and/or the Executive's dependents is
receiving immediately prior to any related Potential Change in Control
or the receipt of the Notice of Termination (without giving effect to
any reduction
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in such benefits subsequent to a Change in Control which reduction
constitutes Good Reason), whichever is greater, until the earlier to
occur of such time as the Executive is provided with substantially
comparable Benefits Coverage with a new employer or twenty four (24)
months; (ii) the automobile allowance, gas and other automobile
benefits the Executive was receiving immediately prior to any related
Potential Change in Control or the receipt of the Notice of Termination
(without giving effect to any reduction in such benefits subsequent to
a Change in Control which reduction constitutes Good Reason), whichever
is greater, for a period of twelve (12) months; and (iii) outplacement
services, the scope and provider of which shall be selected by the
Executive with the cost of such services and related expenses borne by
the Company, subject to the submission of reasonable documentation in
accordance with the Company's standard practice to substantiate
expenses.
3.1.3 During the term of this Agreement and through
the period of twenty-four (24) months following the Date of
Termination, all benefits under any pension or retirement plans,
employees stock ownership plan or any other plan or agreement relating
to retirement benefits ("Retirement Benefits") in which the Executive
participates shall continue to accrue to the Executive, crediting of
service all Retirement Benefits provided to the Executive as a fully
vested participant under any such plan or agreement relating to
retirement benefits. No contributions shall be required to be made by
the Executive to any plan providing for employee contributions
following the Date of Termination. To the extent that the amount of any
Retirement Benefits are or would be payable from a nonqualified plan,
the Company shall, as soon as practicable following the Date of
Termination (but in no event later than the 30th day after the Date of
Termination), pay directly to the Executive in one lump sum, cash in an
amount equal to the additional benefits that would have been provided
had such accrual or crediting been taken into account in calculating
such Retirement Benefits. Such lump sum payment shall be calculated as
provided in the relevant plan and, in the case of a defined
contribution plan, shall include an amount equal to the gross amount of
the maximum employer contributions.
3.1.4 Any outstanding options to purchase common
stock of the Company held by the Executive prior to the Date of
Termination under an existing stock option plan maintained by the
Company shall immediately vest and become exerciseable in full in
accordance with the terms and the provisions of the applicable stock
option plan.
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3.2 Special Reimbursement. In the event that the Executive
becomes entitled to the Severance Payments, if any payment or benefit paid or
payable, or received or to be received, by or on behalf of the Executive in
connection with a Change in Control or the termination of the Executive's
employment, whether any such payments or benefits are pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company, any
of its subsidiaries, any Person, or otherwise (the "Total Payments"), will or
would be subject to the excise tax imposed under section 4999 of the Code (the
"Excise Tax"), the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that after payment by the Executive of all taxes
(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 any Excise Tax imposed upon or attributable to
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Total Payments.
3.2.1 For purposes of determining whether any of the
Total Payments will be subject of the Excise Tax and the amount of such
Excise Tax, (i) the Total Payments shall be treated as "parachute
payments" within the meaning of section 280G(b)(2) of the Code, and all
"excess parachute payments" within the meaning of section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel (delivered to the Executive) selected by the
Company and reasonably acceptable to the Executive such Total Payments
(in whole or in part) (a) do not constitute parachute payments,
including (without limitation) by reason of section 280G(b)(4)(A) of
the Code, (b) such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered,
within the meaning of section 280G(b)(4)(B) of the Code, or (c) are
otherwise not subject to the Excise Tax, and (ii) the value of any
non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with the
principles of sections 280G(d)(3) and (4) of the code.
3.2.2 In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account
hereunder at the time of termination of the Executive's employment, the
Executive shall repay to the Company, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction plus
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interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the
time of the termination of the Executive's employment (including by
reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make
an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect
to such excess) at the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of any such
subsequent liability for Excise Tax with respect to the Severance
Payments.
3.3 Date of Payment. The payment provided for in Section 3.1.1
and Section 3.2 hereof shall be made not later than the fifteenth (15th) day
following the Date of Termination; provided, however, that if the amounts of
such payments cannot be finally determined on or before such day, the Company
shall pay to the Executive on such day an estimate, as determined in good faith
by the Company, of the minimum amount of such payments to which the Executive is
likely to be entitled to and shall pay the remainder of such payments (together
with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon
as the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth (5th) business day after demand by the Company (together with interest
at the rate provided in section 1274(b)(2)(B) of the Code). At the time that
payments are made under this Section 3.3, the Company shall provide the
Executive with a detailed written statement setting forth the manner in which
such payments were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Company has received from
outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).
3.4 Legal Costs. The Company shall also reimburse the
Executive for all legal fees and expenses incurred in good faith by
the Executive as a result of any dispute with any party (including,
but not limited to, the Company and/or any affiliate of the
Company) regarding the payment of any benefit provided for in this
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Agreement (including, but not limited to, all such fees and expenses incurred in
disputing any termination or in seeking in good faith to obtain or enforce any
benefit or right provided by this Agreement or in connection with any tax audit
or proceeding to the extent attributable to the application of Section 4999 of
the Code), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in section 7872(f)(2)(A) of the Code. Such payments
shall be made within five (5) business days after delivery of the Executive's
written requests for payment accompanied by such evidence of fees and expenses
incurred as the Company reasonably may require.
3.5 Employment Agreement. The payment to the Executive of the
Severance Payments provided for in Section 3.1 shall be in lieu of any severance
payable to the Executive under the terms of any other employment agreement in
effect on the Date of Termination. Except as provided in the preceding sentence,
this Agreement is not intended to and shall not modify or supersede any such
employment agreement or other contract or arrangement between the Executive and
the Company in effect from time to time.
4. Termination Procedures and Compensation During Dispute.
4.1 Notice of Termination. Any purported termination of the
Executive's employment with the Company (other than by reason of death) during
the Window Period shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 7 hereof.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment with
the Company under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board in the form and in the manner specified in Section 1.3 of this
Agreement. For purposes of this Agreement, any purported termination not
effected in accordance with the Section 4.1 shall not be considered effective.
4.2 Date of Termination. "Date of Termination," with respect
to any purported termination of the Executive's employment during the Window
Period, shall mean (i) if the Executive's employment is terminated for
Disability, fifteen (15) days after Notice of Termination is given, and (ii) if
the Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination
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by the Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than thirty (30) days, respectively,
after the date on which such Notice of Termination is given).
4.3 Dispute Concerning Termination. If within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this Section 4.3), the party
receiving such Notice of Termination notifies the other party in writing that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally resolved in accordance with Section 4.4;
provided, however, that the Date of Termination shall be extended by a notice of
dispute only if the basis for such notice is reasonable, such notice is given in
good faith and the party giving such notice pursues the resolution of such
dispute with reasonable diligence.
4.4 Alternative Dispute Resolution Including Arbitration. If a
dispute arises out of or related to this Agreement, the Company and the
Executive agree that they shall first seek to resolve any dispute by
negotiation. If the dispute has not been resolved within thirty (30) days after
the date a party hereto provides notice of dispute to the other party in
accordance with Section 4.3, either party may initiate mediation of the dispute
by sending the other party a written request dispute be mediated. The parties
shall mediate the dispute before a neutral, third party mediator (if a mutually
agreeable mediator cannot be identified, one shall be appointed by the American
Arbitration Association) selected by the mutual agreement of both parties within
thirty (30) days after the date of written request for mediation. If the dispute
or within dispute has not been resolved within sixty (60) days after the
original notice of a dispute or within thirty (30) days after the date of the
request for mediation, whichever is the later, then either party may proceed to
binding arbitration before a panel of three independent arbitrators selected
from a list made available by the American Arbitration Association. The mediator
shall not serve as an arbitrator. The arbitration shall be governed by the
current arbitration rules of the American Arbitration Association or its
successors. Any mediation or arbitration commenced pursuant to this Section 4.4
shall be conducted in the metropolitan area of New York, New York.
Notwithstanding any provisions in such rules to the contrary, the arbitrators
shall issue findings of fact and conclusions of law, and an award, within 15
days of the date of the hearing unless the parties otherwise agree.
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4.5 Compensation During Dispute. If a purported termination
occurs during the Window Period, and such termination is disputed in accordance
with Section 4.3 above, the Company shall continue to pay the Executive the full
compensation (including without limitation Annual Base Salary and Target Bonus)
in effect at the time of any related Potential Change in Control or when the
notice giving rise to the dispute was given (whichever is greater) and continue
the Executive as a participant in all compensation, incentive, pension and
welfare benefit and insurance plans in which the Executive was participating at
the time of any Potential Change in Control or when the notice giving rise to
the dispute was given, whichever is greater, until the dispute is finally
resolved in accordance with Sections 4.3 and 4.4 hereof. Amounts paid under this
Section 4.5 are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this Agreement
or any other plan, agreement or arrangement.
5. No Mitigation. The Company agrees that, if the Executive's
employment is terminated during the Window Period, the Executive is not required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Company pursuant to Section 3 or Section 4.5. Further,
the amount of any payment or benefit provided for in Section 3 or Section 4.5
shall not be reduced by any compensation earned by the Executive as a result of
employment by another employer, by retirement benefits, or offset against any
amount claimed to be owed by the Executive to the Company or any of its
subsidiaries, or otherwise.
6. Successors; Binding Agreement.
6.1 Successors. In addition to any obligations
imposed by law upon any successor to the Company, 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 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 it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to compensation
from the Company in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason during the Window Period, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
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6.2 Binding Agreement. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the term of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
7. Notices. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company:
Irwin D. Simon
The Hain Celestial Group, Inc.
50 Charles Lindbergh Blvd.
Uniondale, New York 11553
Attention: Chairman of the Board and
Chief Executive Officer
With a copy to:
Roger Meltzer, Esq.
Cahill, Gordon & Reindel
80 Pine Street
New York, New York 10005
To the Executive:
[Executive Name]
Address
8. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the Executive
and such 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
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provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. 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 expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Delaware without regard to the principles of
conflict of laws thereof. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to and include any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The rights and
obligations of the Company and the Executive under this Agreement shall survive
the expiration of the Term.
9. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.
11. No Limitation. Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
without regard to the conflicts of law provisions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this
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Agreement as of the date and year first written above.
THE HAIN CELESTIAL GROUP, INC.
By: /s/Irwin D. Simon
------------------------------
Name: Irwin D. Simon
Title: President & Chief Executive
Officer
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