Employment Agreement - Hain Celestial Group Inc. and Irwin D. Simon
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of July 1, 2003, by and between The Hain
Celestial Group, Inc., a Delaware corporation (the "Company"), and Irwin D.
Simon ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires that Executive continue to serve as President
and Chief Executive Officer of the Company and Executive is willing to continue
to serve;
WHEREAS, the Compensation Committee of the Company's Board of Directors and
the Company's Board of Directors, at meetings duly called and held, have each
authorized and approved the execution and delivery of this Agreement by the
Company; and
WHEREAS, the Company and Executive wish to enter into an agreement
embodying the terms of his employment as President and Chief Executive Officer
(the "Agreement").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Company and Executive hereby agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
Agreement, the Company hereby agrees to continue to employ Executive and
Executive hereby agrees to continue his employment by the Company until the
fourth anniversary of the date set forth above (the "Term"). The period during
which Executive is employed pursuant to this Agreement shall be referred to as
the "Employment Period."
2. Position, Duties and Location. During the Employment Period, Executive
shall serve as President and Chief Executive Officer of the Company and shall be
nominated for election, and if so elected shall continue to serve, as a member
of the Board of Directors of the Company and, unless the Company and Executive
shall jointly determine otherwise, Chairman of the Board of Directors of the
Company (the "Board"). In addition, Executive shall serve in such other position
or positions with the Company and its subsidiaries commensurate with his
position and experience as the Board shall from time to time specify. During the
Employment Period, Executive shall have the duties, responsibilities and
obligations customarily assigned to individuals serving as the president and
chief executive officer of comparable companies, and such other duties,
responsibilities and obligations consistent with such positions as the Board
shall from time to time specify. During the Employment Period, the Executive
will be the most senior executive to report to the Board. Executive shall
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devote his full business time to the services required of him hereunder,
except for vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use commercially reasonable
efforts to perform such services in a manner consonant with the duties of his
position and to improve and advance the business and interests of the Company
and its subsidiaries. Nothing contained in this Section 2 shall preclude
Executive from (i) serving on the board of directors of any business
corporation, unless such service would be contrary to applicable law,
(ii) serving on the board of directors of, or working for, any charitable or
community organization or (iii)pursuing his personal financial and legal
affairs, so long as such activities, individually or collectively, do not
interfere with the performance of Executive's duties hereunder or violate any of
the provisions of Section 6 hereof. Executive's place of employment shall be at
the Company's principal executive office in Melville, New York.
3. Compensation.
(a) Base Salary. The Company shall pay Executive a base salary for each of
the Company's fiscal years during the Employment Period at the following annual
rates:
For the Fiscal Year Ending Amount
June 30, 2004 $ 810,000
June 30, 2005 $ 875,000
June 30, 2006 $ 950,000
June 30, 2007 $ 1,050,000
The Board (or the appropriate committee of the Board) shall annually review
Executive's base salary in light of competitive practices, the base salaries
paid to other executive officers of the Company and the performance of Executive
and the Company, and may, in its discretion, increase such base salary by any
additional amount it determines to be appropriate; provided, however, any such
increase shall not reduce or limit any other obligation of the Company
hereunder. Executive's base salary (as set forth or as may be increased from
time to time) shall not be reduced. Executive's annual base salary payable
hereunder, as it may be increased from time to time is referred to herein as
"Base Salary." The Company shall pay Executive his Base Salary in accordance
with the normal payroll practices of the Company for its executive officers.
(b) Annual Bonus. For each fiscal year of the Company ending during the
Employment Period, Executive shall be eligible to receive an annual bonus, based
on the Executive's and the Company's performance during such fiscal year, equal
to up to 150% of his Base Salary, payable in the form of cash or otherwise, as
may be determined as set forth below to be commensurate with the Company's
and/or Executive's performance.
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(1) Fiscal 2004. For the fiscal year ending June 30, 2004, Executive's
annual bonus shall be determined by the Compensation Committee of the Board (the
"Compensation Committee") based on the following components:
I. Revenue Target
Percentage of Annual Bonus: 25%
II. Net Income Target
Percentage of Annual Bonus: 35%
III. Special Accomplishments Target (Acquisitions, New Ventures)
Percentage of Annual Bonus: 25%
IV. Leadership/Organization Target
Percentage of Annual Bonus: 15%
(2) Subsequent Fiscal Years. For each subsequent fiscal year during the
term of this Agreement, Executive and the Compensation Committee shall establish
performance objectives based on a set of performance criteria, to be determined
annually by the Compensation Committee in consultation with Executive, and to be
similar to those established for the Company's fiscal year ending June 30, 2004.
Each component of the performance criteria will include a performance objective
and a weighting for such objective as a component of Mr. Simon's overall annual
bonus.
In addition, the Compensation Committee shall be authorized to provide for
discretionary bonuses to Mr. Simon during any fiscal year for extraordinary
corporate events.
Notwithstanding the foregoing, in the case that the Company enters into any
acquisition or other business transactions during the Employment Period with the
prior approval of the Board that, in the Executive's reasonable judgment,
materially affects the Executive's ability to achieve the foregoing performance
objectives, the Executive may request that the Compensation Committee review his
performance objectives. Following such review, the Compensation Committee may
make any appropriate modifications to the Executive's performance objectives
that it deems necessary to cause such performance objectives to remain
consistent with those contemplated in this Section 3(b).
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(c) Options.
(i) Effective May 13, 2003, Executive shall be granted options exercisable
for 300,000 shares of the Company's common stock at an exercise price of the
market price on the effective date of grant under the Company's 2002 Stock
Incentive and Award Plan or any substantially similar plan adopted by the
Company from time to time (the "Plan"). The date of grant shall be determined by
the Executive and the Board and the options will vest immediately.
(ii) On July 1 of each fiscal year during the Employment Period (other than
the fiscal year ending June 30, 2004 and commencing July 1, 2004) in which the
Executive continues to by employed by the Company under the terms of this
Agreement, Executive shall be granted options exercisable for 300,000 shares of
the Company's common stock at an exercise price of the market price at the date
of grant under the Plan. The date of grant shall be determined by the Executive
and the Board and the options will vest immediately.
(d) Restricted Stock.
In January 2004, but in no event prior to the Annual Meeting of
Shareholders to be held subsequent to the conclusion of the Company's fiscal
year ended June 30, 2003, Executive shall receive an award of 150,000 shares of
restricted stock (the "Restricted Shares") under the Plan. Subject to Section 5,
such restricted stock shall vest equally over the period from the date of award
to the conclusion of the Employment Period. The Compensation Committee may
review the overall amount of restricted stock annually when performance
objectives are determined.
The Company agrees to keep the requisite number of options available for
grant under the Plan to Executive.
4. Benefits, Perquisites and Expenses.
(a) Benefits. During the Employment Period, Executive shall be eligible to
participate in (i) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each pension, retirement, deferred
compensation, savings or employee stock purchase plan sponsored or maintained by
the Company, and (iii) to the extent of any awards made from time to time by the
Board committee administering the plan, each stock option, restricted stock,
stock bonus or similar equity-based compensation plan sponsored or maintained by
the Company, in each case, whether now existing or established hereafter, to the
extent that Executive is eligible to participate in any such plan under the
generally applicable provisions thereof.
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Nothing in this Section 4(a) shall limit the Company's right to amend or
terminate any such plan in accordance with the procedures set forth therein.
(b) Perquisites. During the Employment Period, Executive shall be entitled
to at least four weeks' paid vacation annually, shall be entitled to observe all
Jewish holidays and shall also be entitled to receive such perquisites as are
generally provided to other senior executive officers of the Company in
accordance with the then current policies and practices of the Company.
Executive's unused vacation days may not be accumulated and carried forward to
following years, but at the end of each calendar year Executive shall be paid in
cash for all unused vacation days. In addition, during the Employment Period,
Executive shall receive:
(1) the use of a Company-owned automobile acceptable to Executive,
including, at Executive's request, the services of a driver at the Company's
expense, and the Company shall pay insurance premiums in respect of the
automobile with liability limits not less than $1 million/$3 million;
(2) supplemental executive medical insurance for reimbursement up to
$20,000; and
(3) life insurance policy for the benefit of Mr. Simon's wife and/or
children. Amounts payable under such policy should be equal to Mr. Simon's
salary and bonus for fiscal 2003 and thereafter on the basis of a two year
average (See Section 3) (but in no event less than $1,500,000).
(c) Business Expenses. During the Employment Period, the Company shall pay
or reimburse Executive for all reasonable expenses incurred or paid by Executive
in the performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may require and
in accordance with the generally applicable policies and procedures of the
Company.
(d) Indemnification. During the Employment Period, the Company shall
indemnify Executive and hold Executive harmless from and against any claim, loss
or cause of action arising from or out of Executive's performance as an officer,
director or employee of the Company or any of its subsidiaries or in any other
capacity, including any fiduciary capacity, in which Executive serves at the
request of the Company to the maximum extent permitted by applicable law and the
Company's Amended and Restated Certificate of Incorporation and By-Laws.
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5. Termination of Employment.
(a) Early Termination of the Employment Period. Notwithstanding Section 1,
the Employment Period shall end upon the earliest to occur of (1) a termination
of Executive's employment on account of Executive's death, (2) a termination due
to Executive's Disability, (3) Termination for Cause, (4) a Termination Without
Cause, (5) a Termination for Good Reason or (6) Termination Not for Good Reason.
(b) Benefits Payable Upon Early Termination; Change of Control;
Non-Renewal. (1) Following the end of the Employment Period pursuant to
Section 5(a), (2) following a Change of Control of the Company after which the
Executive remains employed by the Company or its successor under the terms of
this Agreement, or (3) in the event this Agreement is not renewed upon or prior
to its expiration on equal or more favorable terms (a "Non-Renewal"), Executive
(or, in the event of his death, his surviving spouse, if any, or his estate)
shall be paid the type or types of compensation, without duplication, determined
to be payable in accordance with the following table at the times established
pursuant to Section 5(c):
Additional Severance
Earned Salary Vested Benefits Benefits Benefits
Termination due Payable Payable Payable Not payable
to death
Termination due Payable Payable Payable Not payable
to Disability
Termination for Payable Payable Not payable Not payable
Cause
Termination for Payable Payable Payable Payable
Good Reason
Termination Payable Payable Payable Payable
Without Cause
Termination Not Payable Payable Not payable Not payable
for Good Reason
Change of Control Not payable Not payable Not payable Payable
of the Company
(without Termina-
tion)
Non-Renewal Payable Payable Payable Not Payable
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(c) Timing of Payments. Earned Salary shall be paid in cash in a single
lump sum as soon as practicable, but in no event more than 10 days, following
the end of the Employment Period. Vested Benefits shall be payable in accordance
with the terms of the plan, policy, practice, program, contract or agreement
under which such benefits have been awarded or accrued. Additional Benefits
shall be provided or made available at the times specified below as to each such
Additional Benefit. Unless otherwise specified, Severance Benefits shall be paid
in a single lump sum cash payment as soon as practicable, but in no event later
than 10 days after the Executive's termination.
(d) Definitions. For purposes of Sections 5 and 6, capitalized terms have
the following meanings:
"Additional Benefits" means, the benefits described below:
(i) All of the Executive's benefits accrued under the employee option,
pension, retirement, savings and deferred compensation plans of the Company
shall become vested in full (including, but not limited to, any options granted
in accordance with Section 3(c) or the Restricted Shares awarded under Section
3(d)); provided, however, that to the extent such accelerated vesting of
benefits cannot be provided under one or more of such plans consistent with
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), such benefits shall be paid to the Executive in a lump sum within 10
days after termination of employment outside the applicable plan;
(ii) Executive (and, to the extent applicable, his dependents) will be
entitled to continue participation in all of the Company's medical, dental and
vision care plans (the "Health Benefit Plans"), until the third anniversary of
Executive's termination of employment (second anniversary in the case of
termination due to death); provided that Executive's participation in the
Company's Health Benefit Plans shall cease on any earlier date that Executive
becomes eligible for comparable benefits from a subsequent employer. Executive's
participation in the Health Benefit Plans will be on the same terms and
conditions (including, without limitation, any contributions that would have
been required from Executive) that would have applied had Executive continued to
be employed by the Company. To the extent any such benefits cannot be provided
under the terms of the applicable plan, policy or program, the Company shall
provide a comparable benefit under another plan or from the Company's general
assets; and
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(iii) An amount equal to (A) three times (two times in the case of
termination due to death) Base Salary in effect on the date of termination, plus
(B) three times (two times in the case of termination due to death) the average
annual bonus paid to the Executive over two immediately preceding fiscal years,
including any annual bonus paid pursuant to Section 3(b), plus (c), except in
the case of Non-Renewal, the Executive's accrued annual bonus through the date
of termination, determined in accordance with clause (B) above.
"Black-Scholes Value" means the value of options to purchase the Company's
common stock for which such value is to be determined under this Agreement, as
calculated by the Accountants (as defined in Section 5(f)) or any other
compensation consultant mutually agreeable to the parties (the "Compensation
Consultant") using the Black-Scholes method of valuation in determining such
valuation, the Compensation Consultant in its good faith discretion shall be
responsible for designating commercially reasonable and customary parameters for
the Black-Scholes method, which shall be outlined to Executive in writing upon
the determination of the Black-Scholes Value for purposes of making a payment
under the Agreement.
"Change of Control of the Company" means and shall be deemed to have
occurred if:
(i) any person (within the meaning of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), other than the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of Voting Securities representing 50 percent or more of the total
voting power of all the then-outstanding Voting Securities; or
(ii) the individuals who, as of the date hereof, constitute the Board,
together with those who first become directors subsequent to such date and whose
recommendation, election or nomination for election to the Board was approved by
a vote of at least a majority of the directors then still in office who either
were directors as of the date hereof or whose recommendation, election or
nomination for election was previously so approved (the "Continuing Directors"),
cease for any reason to constitute a majority of the members of the Board; or
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(iii) the stockholders of the Company approve a merger, consolidation,
recapitalization or reorganization of the Company or a subsidiary, reverse split
of any class of Voting Securities, or an acquisition of securities or assets by
the Company or a subsidiary, or consummation of any such transaction if
stockholder approval is not obtained, other than any such transaction in which
the holders of outstanding Voting Securities immediately prior to the
transaction receive (or, in the case of a transaction involving a subsidiary and
not the Company, retain), with respect to such Voting Securities, voting
securities of the surviving or transferee entity representing more than 60
percent of the total voting power outstanding immediately after such
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.
"Disability" means long-term disability within the meaning of the Company's
long-term disability plan or program.
"Earned Salary" means any Base Salary earned, but unpaid, for services
rendered to the Company on or prior to the date on which the Employment Period
ends pursuant to Section 5(a) hereof.
"Severance Benefit" means an amount equal to the greater of (i) the
Black-Scholes Value, determined as of the most recent option grant date to
Executive under this Agreement or (ii) the Black-Scholes Value, determined as of
the date that causes the Severance Benefit to become payable under this
Agreement, of all options for the Company's common stock contemplated but not
yet granted under Section 3(c). In addition, in the event the Executive's
employment is terminated hereunder, all of the shares of common stock issuable
upon the exercise of options are not eligible for resale by Executive within 90
days following the date of the event giving rise to the payment of these
Severance Benefits either under Rule 144 or pursuant to an effective
registration statement, and following written request by the Executive, the
Company fails to file and cause to have become effective within 90 days of such
notice a registration statement relating to such resale and to keep such
registration statement effective for a period of 90 days thereafter, Executive
may, at his option, exchange such options for an amount equal to the
Black-Scholes Value thereof computed in accordance with the preceding sentence.
"Termination for Cause" means a termination of Executive's employment by
the Company due to (i) Executive's conviction of a felony or a crime involving
moral turpitude, or (ii) Executive's willful and continued failure to perform
the material duties of his position, which failure continues for a period of 30
days after Executive's receipt of written notice from the Company specifying the
exact details of such alleged failure and which has had (or is expected to have)
a material adverse effect on the business of the Company or its subsidiaries.
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"Termination for Good Reason" means a termination of Executive's employment
by Executive following (i) a diminution in Executive's positions, duties and
responsibilities from those described in Section 2 hereof, (ii) the removal of
Executive from, or the failure to re-elect Executive as Chairman of the Board of
the Company or as Chief Executive Officer of the Company, (iii) a reduction in
Executive's annual Base Salary, (iv) a material breach by the Company of any
other provision of this Agreement or (vii) a Change in Control of the Company.
"Termination Not For Good Reason" means any termination of Executive's
employment by Executive other than Termination for Good Reason or a termination
due to Executive's Disability or death.
"Termination Without Cause" means any termination of Executive's employment
by the Company other than a Termination for Cause or a termination due to
Executive's Disability.
"Vested Benefits" means amounts which are vested or which Executive is
otherwise entitled to receive under the terms of or in accordance with any plan,
policy, practice or program of, or any contract or agreement with, the Company
or any of its subsidiaries, at or subsequent to the date of his termination
without regard to the performance by Executive of further services or the
resolution of a contingency.
"Voting Securities or Security" means any securities of the Company which
carry the right to vote generally in the election of directors.
(e) Full Discharge of Obligations. Except as expressly provided in the last
sentence of this Section 5(e), the amounts payable to Executive pursuant to this
Section 5 and Section 7(d) following termination of his employment (including
amounts payable with respect to Vested Benefits) shall be in full and complete
satisfaction of Executive's rights under this Agreement. Except as otherwise set
forth in Section 6, after the effective date of a termination of employment for
any reason, Executive shall have no further obligations or liabilities to the
Company. Nothing in this Section 5(e) shall be construed to release the Company
from its commitment to indemnify Executive and hold Executive harmless from and
against any claim, loss or cause of action as described in Section 4(d).
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(f) Excise Tax Gross-Up.
(i) Anything in this Agreement to the contrary notwithstanding, if it shall
be determined that any payment, distribution or benefit provided (including,
without limitation, the acceleration of any payment, distribution or benefit and
the acceleration of exercisability of any stock option) to Executive or for his
benefit (whether paid or payable or distributed or distributable) pursuant to
the terms of this Agreement or otherwise (a "Payment") would be subject, in
whole or in part, to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then the Executive shall be entitled to receive from the Company
an additional payment (the "Gross-Up Payment") in an amount such that the net
amount of the Payment and the Gross-Up Payment retained by Executive after the
calculation and deduction of all Excise Taxes (including any interest or
penalties imposed with respect to such taxes) on the Payment and all federal,
state and local income tax, employment tax and Excise Tax (including any
interest or penalties imposed with respect to such taxes) on the Gross-Up
Payment provided for in this Section 5(f) and taking into account any lost or
reduced tax deductions on account of the Gross-Up Payment, shall be equal to the
Payment.
(ii) All determinations required to be made under this Section 5(f),
including whether and when the Gross-Up Payment is required and the amount of
such Gross-Up Payment, and the assumptions to be used in arriving at such
determinations shall be made by the Accountants (as defined below) which shall
provide Executive and the Company with detailed supporting calculations with
respect to such Gross-Up Payment within ten (10) days after termination of
Executive's employment or such other event which results in a Payment which
could necessitate a Gross-Up Payment. For purposes of this Agreement, the
"Accountants" shall mean Ernst & Young LLP or successor firm providing its
services to the Company in connection with its annual audit. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed to pay
Federal income taxes at the applicable marginal rate of federal income taxation
for the calendar year in which the Gross-Up Payment is to be made and to pay any
applicable state and local income taxes at the applicable marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made, net
of the reduction in federal income taxes which could be obtained from the
deduction of such state or local taxes if paid in such year (determined with
regard to limitations on deductions based upon the amount of Executive's
adjusted gross income). To the extent practicable, any Gross-Up Payment with
respect to any Payment shall be paid by the Company at the time Executive is
entitled to receive the Payment and in no event shall any Gross-Up Payment be
paid later than 10 days after the receipt by Executive of the Accountants'
determination. Any determination by the Accountants shall be binding upon the
Company and Executive, including for purposes of withholding on amounts payable
under this Agreement. As a result of uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Accountants
hereunder, it is possible that the Gross-Up Payment made will have been an
amount that is greater or less than the Company should have paid pursuant to
this Section 5(f) (an "Overpayment" or "Underpayment," respectively). In the
event that the Gross-Up Payment is determined by the Accountants or pursuant to
any proceeding or negotiations with the Internal Revenue Service to be less than
the amount initially determined by the Accountants, Executive shall promptly
repay the Overpayment to the Company; provided, however, that in the event any
portion of the Gross-Up Payment to be repaid to the Company has been paid to any
Federal, state or local tax authority, repayment thereof shall not be required
until actual refund or credit of such portion has been made to Executive. In the
event that the Company exhausts its remedies pursuant to Section 5(f)(iii) and
Executive is required to make a payment of any Excise Tax, the Underpayment
shall be promptly paid by the Company to or for Executive's benefit.
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(iii) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes, interest and/or penalties with respect to such claim is due).
If the Company notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall:
(A) give the Company any information reasonably requested by the Company
relating to such claim;
(B) take such action in connection with contesting such claim as the
Company 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 Company;
(C) cooperate with the Company in good faith in order to effectively
contest such claim; and
(D) permit the Company to participate in any proceedings relating to such
claims;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify Executive for and hold
Executive harmless from, on an after-tax basis, any Excise Tax, income tax or
employment tax (including interest and penalties with respect thereto) imposed
as a result of such representation and payment of all related costs and
expenses. Without limiting the foregoing provisions of this Section 5(f), the
Company 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 Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
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 Company shall determine. The Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
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6. Noncompetition and Confidentiality. In consideration of the salary and
benefits to be provided by the Company hereunder, including particularly the
severance arrangements set forth herein, Executive agrees to the following
provisions of this Section 6.
(a) Noncompetition. During the Employment Period and during the greater of
(i) three years following any termination of Executive's employment, or (ii) any
period thereafter during which Executive continues to receive benefits under
this Agreement, other than a Termination Without Cause, a Termination for Good
Reason or Non-Renewal, Executive shall not directly or indirectly own, manage,
operate, control, be employed by, participate in or, provide services or
financial assistance to any business which directly competes with Company or any
of its subsidiaries or engages in the type of business(es) principally conducted
by the Company or any of its subsidiaries, except that Executive may own for
investment purposes up to 5% of the capital stock of any such company.
(b) Confidentiality. Executive agrees that, during the Employment Period
and thereafter, he shall hold and keep confidential any trade secrets, customer
lists and pricing or other confidential information, or any inventions,
discoveries, improvements, products, whether patentable practices, methods or
not, directly or indirectly useful in or relating to the business of the Company
or its subsidiaries as conducted by it from time to time, as to which Executive
shall at any time during the Employment Period become informed, and he shall not
directly or indirectly disclose any such information to any person, firm or
corporation or use the same except in connection with the business and affairs
of the Company or its subsidiaries. The foregoing prohibition shall not apply to
the extent such information, knowledge or data (a) was publicly known at the
time of disclosure to Executive, (b) become publicly known or available
thereafter other than by any means in violation of this Agreement, or (c) is
required to be disclosed by Executive as a matter of law or pursuant to any
court or regulatory order.
(c) Company Property. Except as expressly provided herein, promptly
following Executive's termination of employment, Executive shall return to the
Company all property of the Company and its subsidiaries.
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(d) Injunctive Relief and Other Remedies with Respect to Covenants.
Executive acknowledges and agrees that the covenants and obligations of
Executive with respect to noncompetition, confidentiality and Company property,
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants and obligations may cause the Company irreparable
injury for which adequate remedies are not available at law. Therefore,
Executive agrees that the Company shall be entitled to seek an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) restraining Executive from committing any violation of the covenants
and obligations contained in this Section 6. This remedy is in addition to any
other rights and remedies the Company may have at law or in equity.
7. Miscellaneous.
(a) Survival. Sections 4 (relating to indemnification), 5 (relating to
early termination, change of control and non-renewal), 6 (relating to
noncompetition, nonsolicitation and confidentiality), 7(b) (relating to
arbitration), 7(c) (relating to binding effect), 7(d) (relating to
full-settlement and legal expenses) and 7(n) (relating to governing law) shall
survive the termination hereof.
(b) Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be resolved by binding arbitration. This arbitration
shall be held in New York City and except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association then in effect at the
time of the arbitration, and otherwise in accordance with principles which would
be applied by a court of law or equity. The arbitrator shall be acceptable to
both the Company and Executive. If the parties cannot agree on an acceptable
arbitrator, the dispute shall be held by a panel of three arbitrators one
appointed by each of the parties and the third appointed by the other two
arbitrators.
(c) Binding Effect. This Agreement shall be binding on, and shall inure to
the benefit of, the Company and any person or entity that succeeds to the
interest of the Company (regardless of whether such succession does or does not
occur by operation of law) by reason of the sale of all or a portion of the
Company's stock, a merger, consolidation or reorganization involving the Company
or, unless the Company otherwise elects in writing, a sale of the assets of the
business of the Company (or portion thereof) in which Executive performs a
majority of his services. This Agreement shall also inure to the benefit of
Executive's heirs, executors, administrators and legal representatives.
<PAGE>
(d) Full-Settlement; Legal Expenses. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement. The Company agrees
to pay, upon written demand therefor by Executive, all legal fees and expenses
which Executive may reasonably incur as a result of any dispute or contest by or
with the Company or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement (including as a result of any
contest by Executive about the amount of any payment hereunder) if Executive
substantially prevails in the dispute or contest or the dispute or contest is
settled, plus in each case interest at the applicable Federal rate provided for
in Section 7872(f)(2) of the Code. In any such action brought by the Executive
for damages or to enforce any provisions of this Agreement, the Executive shall
be entitled to seek both legal and equitable relief and remedies, including,
without limitation, specific performance of the Company's obligations hereunder,
in his sole discretion.
(e) Assignment. Except as provided under Section 7(c), neither this
Agreement nor any of the rights or obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the other
party.
(f) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters referred to herein. No
other agreement (other than awards made in accordance with the terms of one of
the Company's applicable compensatory plans, programs or arrangements) relating
to the terms of Executive's employment by the Company, oral or otherwise, shall
be binding between the parties. There are no promises, representations,
inducements or statements between the parties other than those that are
expressly contained herein. Executive acknowledges that he is entering into this
Agreement of his own free will and accord, and with no duress, that he has read
this Agreement and that he understands it and its legal consequences and has
been advised to consult with an attorney before executing this Agreement.
Executive waives any conflict of interest which may arise due to the
representation by the Executive, on the one hand, and the Company, on the other
hand, by Cahill Gordon & Reindel llp, its partners and associates from time to
time in connection with various legal matters, including regarding this
Agreement.
(g) Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event that any
of the provisions of any of Section 6 is not enforceable in accordance with its
terms, Executive and the Company agree that such Section shall be reformed to
make such Section enforceable in a manner which provides the Company the maximum
rights permitted at law.
<PAGE>
(h) Waiver. Waiver by any party hereto of any breach or default by the
other party of any of the terms of this Agreement shall not operate as a waiver
of any other breach or default, whether similar to or different from the breach
or default waived. No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any failure by
either party hereto to assert its or his rights hereunder on any occasion or
series of occasions.
(i) Notices. Any notice required or desired to be delivered under this
Agreement shall be in writing and shall be delivered personally, by courier
service, by certified mail, return receipt requested, or by telecopy and shall
be effective upon actual receipt by the party to which such notice shall be
directed, and shall be addressed as follows (or to such other address as the
party entitled to notice shall hereafter designate in accordance with the terms
hereof):
If to the Company:
The Hain Celestial Group, Inc.
58 South Service Road
Melville, New York 11747
Attention: Secretary
If to Executive:
Irwin D. Simon
c/o The Hain Celestial Group, Inc.
58 South Service Road
Melville, New York 11747
Copy to:
Cahill Gordon & Reindel llp
80 Pine Street
New York, New York 10005
Attention: Roger Meltzer, Esq.
(j) Amendments. This Agreement may not be altered, modified or amended
except by a written instrument signed by each of the parties hereto.
<PAGE>
(k) Headings. Headings to paragraphs in this Agreement are for the
convenience of the parties only and are not intended to be part of or to affect
the meaning or interpretation hereof.
(l) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
(m) Withholding. Any payments provided for herein shall be reduced by any
amounts required to be withheld by the Company from time to time under
applicable Federal, State or local income tax laws or similar statutes then in
effect.
(n) Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to
principles of conflict of laws thereof.
<PAGE>
IN WITNESS WHEREOF, Executive has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed as of the day and year first above written.
THE HAIN CELESTIAL GROUP, INC.
By: /s/ Ira J. Lamel
Name: Ira J. Lamel
Title: Executive Vice President and
Chief Financial Officer
/s/ Irwin D. Simon
Irwin D. Simon