printer-friendly

Sample Business Contracts

Termination Benefits Agreement - Ultrafem Ltd. and Audrey Contente

Sponsored Links

                            TERMINATION BENEFITS AGREEMENT


    This Termination Benefits Agreement (the "Agreement") is made and entered
into as of the 1st day of October, 1990, by and between ULTRAFEM, LTD., a
Delaware corporation having its principal executive offices at (address) (the
"Company"), and AUDREY CONTENTE, whose mailing address is 1275 Market Street,
No. 1300, San Francisco, California 94103 ("Officer").

                                   R E C I T A L S:

    A.   The Officer is the Chairman of the Board of the Company and has helped
guide the Company through many problems.

    B.   The Officer is expected to continue to make a major contribution to
the profitability, growth, and financial strength of the Company.

    C.   The Company considers the continued services of the Officer to be in
the best interest of the Company and its shareholders and desires to assure the
continued services of the Officer on behalf of the Company as an objective and
impartial basis and without distraction or conflict of interest in the event of
an attempt to obtain control of the Company.

    D.   The Officer is willing to remain in the employ of the Company upon the
understanding that the Company will provide income security upon the terms and
subject to the conditions contained herein if the Officer's employment is
terminated voluntarily for good reason or involuntarily by the Company without.


                                  A G R E E M E N T

    NOW, THEREFORE, on the basis of the foregoing facts and as a material
inducement to, and in consideration of, the Officer continuing to serve as
Chairman of the Board of the Company, the Company and the Officer agree as
follows:

    1.   SEVERANCE PAYMENTS UPON TERMINATION.  If the Officer's status as
Chairman of the Board of the Company is terminated for any reason other than in
a situation described in Section 2 below, the Company shall pay to the Officer
the following:

         (a)  All accrued and unpaid salary and other compensation payable to
the Officer by Company for services rendered by Officer to Company through the
date on which the Officer's status as Chairman of the Board of the Company is
terminated (the "Termination Date"); and


<PAGE>

         (b)  All accrued and unused vacation pay payable to the Officer by the
Company with respect to services rendered by the Officer to Company through the
Termination Date; and

         (c)  Severance pay in an amount equal to one year's salary, at the
annual rate at which the Officer was being compensated for her services as
Chairman of the Board of the Company on that date which is thirty days prior to
the Terminate Date; provided however, that (i) if the Officer's status as
Chairman of the Board of the Company is terminated by reason of the death of
Officer or for Cause (as defined below) the Officer shall receive no payments
under this Paragraph 1(c), and (ii) if the Officer's status as Chairman of the
Board is terminated as a result of the Officer's Permanent Disability (as
defined below), such severance pay will be an amount equal to six months' salary
instead of one year's salary.  The severance pay provided for in this paragraph
(c) shall be payable in twelve equal monthly installments (six monthly
installments if payable as a result of Permanent Disability) in the same manner
and at the same time as the Officer's salary was paid to him as Chairman of the
Board of the Company immediately prior to the Termination Date. The Company may
deduct from each installment of severance pay an amount sufficient to cover
applicable Federal, state and/or local income tax withholding, old age and
survivor's and other social security payments.

    2.   SEVERANCE PAYMENTS UPON TERMINATION FOLLOWING CHANGE OF CONTROL. If
the Officer's status as Chairman of the Board of the Company is terminated by
the Company other than for Cause, or the Permanent Disability of the Officer, or
if the Officer shall terminate her employment for Good Reason (as defined below)
within six months following a Change of Control (as defined below) of the
Company, then the Company shall pay to the Officer in a lump sum, in cash, on
the fifth day following the Termination Date, the following:

         (a)  all accrued and unpaid salary and other compensation payable to
the Officer by the Company for services rendered by the Officer to the Company
through the Termination Date; and

         (b)  all accrued and unused vacation pay payable to the Officer by
the Company with respect to services rendered by the Officer to the Company
through the Termination Date; and

         (c)  severance pay in an amount equal to one year's salary, at the
annual rate at which the Officer was being compensated for her services as
Chairman of the Board of the Company on that date which is 30 days prior to the
Termination Date.

                                         -2-


<PAGE>


    3.   DEFINITIONS.  For purposes of this Agreement, the following words
shall have the definitions set forth below:

         (a)  A "Change of Control" shall mean any of the following:

              (i)  The acquisition by any individual, entity or group (within 
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership 
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% 
or more of either (A) the then outstanding shares of common stock of the 
Company (the "Outstanding Company Common Stock") or (B) the combined voting 
power of the then outstanding voting securities of the Company entitled to 
vote generally in the election of directors (the "Outstanding Company Voting 
Securities"); provided, however, that the following acquisitions shall not 
constitute a Change of Control: (i) any acquisition directly from the Company 
(excluding an acquisition by virtue of the exercise of a conversion 
privilege), (ii) any acquisition by the Company, (iii) any acquisition by any 
employee benefit plan (or related trust) sponsored or maintained by the 
Company or any corporation controlled by the Company or (iv) any acquisition 
by any corporation pursuant to a reorganization, merger or consolidation, if, 
following such reorganization, merger or consolidation, the conditions 
described in clauses (A), (B) and (C) of subsection (iii) of this section 3 
are satisfied; 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 
director subsequent to the date hereof whose election, or nomination for 
election by the Company's shareholders, was approved by a vote of at least a 
majority of the directors then comprising the Incumbent Board shall be 
considered as though such individual were a member of the Incumbent Board, 
but excluding, for this purpose, any such individual whose initial assumption 
of office occurs as a result of either an actual or threatened election 
contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated 
under the Exchange Act) or other actual or threatened solicitation of proxies 
or consents by or on behalf of a Person other than the Board; or

            (iii)  Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (A) more than 60% of, respectively,
the then outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation and the combined voting power of
the then outstanding voting securities or such corporation entitled to vote
generally in the election of

                                         -3-

<PAGE>
 directors is then beneficially owned, directly or indirectly, by all or 
substantially all of the individuals and entities who were the beneficial 
owners, respectively, of the Outstanding Company Common Stock and Outstanding 
Company Voting Securities immediately prior to such reorganization, merger or 
consolidation in substantially the same proportions as their ownership, 
immediately prior to such reorganization, merger or consolidation, of the 
Outstanding Company Common Stock and Outstanding Company Voting Securities, 
as the case may be, (B) no Person (excluding the Company, any employee 
benefit plan (or related trust) of the Company or such corporation resulting 
from such reorganization, merger or consolidation and any Person beneficially 
owning, immediately prior to such reorganization, merger or consolidation, 
directly or indirectly, 20% or more of the Outstanding Company Common Stock 
or Outstanding Voting Securities, as the case may be) beneficially owns, 
directly or indirectly 20% or more of, respectively, the then outstanding 
shares of common stock of the corporation resulting from such reorganization, 
merger or consolidation or the combined voting power of the then outstanding 
voting securities of such corporation entitled to vote generally in the 
election of directors and (C) at least a majority of the members of the board 
of directors of the corporation resulting from such reorganization, merger or 
consolidation were members of the Incumbent Board at the time of the 
execution of the initial agreement providing for such reorganization, merger 
or consolidation; or

         (iv) Approval by the shareholders of the Company of (A) a complete
liquidation or dissolution of the Company or (B) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other disposition, (i)
more than 60% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding the Company and any employee benefit plan (or related trust) of the
company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 20% or more of
the Outstanding Company Common Stock or Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then

                                         -4-

<PAGE>

outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (iii) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Company.

         (b)  "Good Reason" shall mean any of the following (without the
Officer's express written consent):

              (i)  a change in status, position or responsibilities which, in
         the Officer's reasonable judgment, does not represent a promotion from
         existing status, position or responsibilities as in effect immediately
         prior to a Change of Control; the assignment of any duties or
         responsibilities which, in the Officer's reasonable judgment, are
         inconsistent with such status, position or responsibilities; or any
         removal from or failure to reappoint or reelect the Officer to any of
         such positions, except in connection with the termination for total or
         permanent disability, death or cause or by him other than for good
         reason; or

              (ii) a reduction by the Company in the Officer's base salary as
         in effect on the date hereof or as the same may be increased from time
         to time during the term of this Agreement, or the Company's failure to
         increase within 12 months of the Officer's last increase in base
         salary the Officer's base salary after a Change of Control in an
         amount which at least equals, on a percentage basis, the average
         percentage increase in base salary for all executive and senior
         Officers in the Company affected in the preceding 12 months; or

             (iii) the failure of the Company to continue in effect any
         incentive, bonus or other compensation plan in which the Officer
         participates, including but not limited to the Company's stock option
         and restricted stock plans, unless an equitable arrangement (embodied
         in an ongoing substitute or alternative plan), evidenced by the
         Officer's written consent, has been made with respect to such plan in
         connection with the Change of Control, or the failure by the Company
         to continue the Officer's participation therein, or any action by the
         Company which would directly or indirectly materially reduce
         participation therein; or

              (iv) a relocation of the Company's principal executive offices to
         a location outside of Los Angeles, Orange, Riverside or San Diego
         Counties, in California,


                                         -5-


<PAGE>

         or the Officer's relocation by the Company to any place other than the
         location at which the Officer performs the Officer's duties
         immediately prior to the Change of Control, except for required travel
         by the Officer on the Company's business to an extent substantially
         consistent with the Officer's business travel obligations immediately
         prior to the Change of Control.

              (v)  the failure by the Company to continue to provide the
         Officer with benefits substantially similar to those enjoyed or
         entitled under any of the Company's pension, profit sharing, life
         insurance, medical, dental, health and accident, or disability plans
         at the time of a Change of Control, the taking of any action by the
         Company which would directly or indirectly materially reduce any of
         such benefits or deprive the Officer of any material fringe benefit
         enjoyed or entitled to at the time of the Change of Control, or the
         failure by the Company to provide the number of paid vacation and sick
         leave days to which the Officer is entitled on the basis of years of
         service with the Company in accordance with the Company's normal
         vacation policy in effect on the date hereof; or

              (vi) the failure of the Company to obtain a satisfactory
         agreement from any successor or assign of the Company to assume and
         agree to perform this Agreement; or

             (vii) any purported termination of the Officer's employment which
         is not effected pursuant to paragraph 4(e) hereof (and, if
         applicable, paragraph 3(d) hereof); and for purposes of this
         Agreement, no such purported termination shall be effective; or

            (viii) any request by the Company that the Officer participate in
         an unlawful act or take any action constituting a breach of the
         Officer's professional standard of conduct. Notwithstanding anything
         in this paragraph 3(b) to the contrary, the Officer's right to
         terminate the employment pursuant to this paragraph 3(b) shall not be
         affected by incapacity due to physical or mental illness.

         (c)  "Permanent Disability" shall mean a disability of the Officer
which either prevents the Officer from Materially performing her obligations and
duties as Chairman of the Board of the Company for a period of 180 days or which
the Board of Directors of the Company, in its reasonable and good faith
judgment, determines will prevent the Officer from materially performing her
obligations and duties as Chairman of the Board of the Company for a period of
180 days (and the Termination Date


                                         -6-

<PAGE>

resulting from permanent disability shall be the first to occur of the end of
such 180 day period or the date of such determination by the Board of 
Directors).


         (d)  For "Cause" means action by the Officer involving violation of
any criminal statute constituting a felony, gross misconduct in the performance
of Officer's duties, chronic alcoholism, drug addiction or willful and continued
neglect of duties, following a minimum of thirty days' written notice from the
Company of the same during which the Officer shall not have effected or begun
diligently to effect a cure.

    4.   ADDITIONAL PROVISIONS

         (a)  ENFORCEMENT OF AGREEMENT.  The Company is aware that upon the
occurrence of a Change of Control the Board of Directors or a shareholder of the
Company may then cause or attempt to cause the Company to refuse to comply with
its obligations under this Agreement, or may cause or attempt to cause the
Company to institute, or may institute litigation seeking to have this Agreement
declared unenforceable, or may take or attempt to take other action to deny the
Officer the benefits intended under this Agreement. In these circumstances, the
purpose of this Agreement could be frustrated. It is the intent of the Company
that the Officer not be required to incur the expenses associated with the
enforcement of any rights under this Agreement by litigation or other legal
action, nor be bound to negotiate any settlement of any rights hereunder,
because the cost and expense of such legal action or settlement would
substantially detract from the benefits intended to be extended to the Officer
hereunder. Accordingly, if following a Change of Control it should appear to the
Officer that the Company has failed to comply with any of its obligations under
this Agreement or in the event that the Company or any other person takes any
action to declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish or to recover from
the Officer the benefits entitled to be provided to the Officer hereunder, and
that Officer has complied with all obligations under this Agreement, the Company
irrevocably authorizes the Officer from time to time to retain counsel of the
Officer's choice, at the expense of the Company as provided in this paragraph
4(a), to represent the Officer in connection with the initiation or defense of
any litigation or other legal action, whether such action is by or against the
Company or any Director, officer, shareholder, or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Officer entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Officer agree that a confidential relationship shall exist between the Officer
and such counsel. The reasonable


                                         -7-

<PAGE>

fees and expenses of counsel selected from time to time by the Officer as
hereinabove provided shall be paid or reimbursed to the Officer by the Company
on a regular, periodic basis upon presentation by the Officer of a statement or
statements prepared by such counsel in accordance with its customary practices,
up to a maximum aggregate amount of $500,000. Any legal expenses incurred by the
Company by reason of any dispute between the parties as to enforceability of or
the terms contained in this Agreement, notwithstanding the outcome of any such
dispute, shall be the sole responsibility of the Company, and the Company shall
not take any action to seek reimbursement from the Officer for such expenses.

         (b)  SEVERANCE PAY; NO DUTY TO MITIGATE DAMAGES.  The amounts payable
to the Officer shall not be treated as damages but as severance compensation to
which the Officer is entitled by reasons of termination of employment in the
circumstances contemplated by this Agreement. The Officer shall not be required
to mitigate damages on the amount of any payment provided for under this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment provided for under this Agreement be reduced by any compensation earned
by the Officer as a result of employment by another employer after the
Termination Date, or any amounts which might have been earned by the Officer in
other employment had other such employment been sought.

         (c)  NO EFFECT ON OTHER CONTRACTUAL RIGHTS.  The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Officer's existing rights or
rights which would accrue solely as the result of the passage of time, under any
benefit plan, employment agreement or other contract, plan or arrangement.

         (d)  NOT AN EMPLOYMENT AGREEMENT.  This Agreement is not intended to
constitute, and shall not be construed to constitute, an employment agreement
and nothing herein shall obligate the Company to continue to employ Officer as
Chairman of the Board of the Company.

         (e)  NOTICE OF TERMINATION.  Any purported termination by the Company
or by the Officer shall be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4(m) 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 her employment under the provision so
indicated. For purposes of this Agreement, no such purported termination shall
be effective without such Notice of Termination.


                                         -8-

<PAGE>


         (f)  INTERNAL REVENUE CODE.  Anything in this Agreement to the
contrary notwithstanding, in the event that the Company's outside accountants
(the "Auditor") determines that the payment by the Company to or for the benefit
of the Officer, whether paid or payable pursuant to the terms of this Agreement,
would be nondeductible by the Company for federal income tax purposes because of
Section 260G of the Internal Revenue Code of 1986, as amended (the "Code"), then
the amount payable to or for the benefit of the Officer pursuant to this
Agreement (the "Agreement Payments") shall be reduced (but not below zero) to
the Reduced Amount. For purposes of this paragraph 4(f), the "Reduced Amount"
shall be the amount which maximizes the amount payable without causing the
payment to be nondeductible by the Company because of Section 280G of the Code.

         (g)  ASSIGNMENT.  This Agreement shall inure to the benefit of and be
binding upon the Officer and the Company and their respective executors,
administrators, heirs, personal representatives, successors, and assigns, but
neither this Agreement nor any right hereunder may be assigned or transferred by
either party hereto, any beneficiary, or any other person, nor be subject to
alienation, anticipation, sale, pledge, encumbrance, execution, levy, or other
legal process of any kind against the Officer, her beneficiary or any other
person. Notwithstanding the foregoing, the Company will assign this Agreement to
any corporation or other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation, sale of assets, or
otherwise and shall obtain the assumption of this Agreement by such successor.

         (h)  ENTIRE AGREEMENT.  This Agreement contains the entire Agreement
between the parties with respect to the subject matter hereof. All
representations, promises, and prior or contemporaneous understandings, written
or oral, among the parties with respect to the subject matter hereof are merged
into and expressed in this Agreement, and any and all prior agreements between
the parties with respect to the subject matter hereof are hereby canceled.

         (i)  AMENDMENT.  This Agreement shall not be amended, modified, or
supplemented without the written agreement of the parties at the time of such
amendment, modification, or supplement.

         (j)  GOVERNING LAW.  This Agreement is made and entered into in the
State of California and the laws of said State shall govern the validity and
interpretation hereof and the performance of the parties hereto of their
respective duties and obligations hereunder.

         (k)  SEVERABILITY.  The invalidity or unenforceability of any
particular provision of this particular Agreement shall


                                         -9-

<PAGE>


not affect the other provisions, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision has not been contained
herein.

         (l)  CAPTIONS.  The captions in this Agreement are for convenience and
identification purposes only, are not an integral part of this Agreement, and
are not to be considered in the interpretation of any part hereof.

         (m)  NOTICES.  Except as specifically set forth in this Agreement, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or sent by registered or
certified mail, postage prepaid, addressed as set forth above, or to such other
address as shall be furnished in writing by any party to the others.

         (n)  WAIVERS.  Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed to be a valid waiver unless such waiver is in
writing or, even if in writing, shall be deemed to be a waiver of a subsequent
breach of such condition or provision or a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent time.

         (o)  MISCELLANEOUS.  The making, execution and delivery of this
Agreement by the parties hereto have been induced by no representations,
statements, warranties or other agreements other than those herein expressed.





                                         -10-

<PAGE>



    IN WITNESS WHEREOF, this Agreement has been entered into as of the date
first above written.

                             "COMPANY"

                             ULTRAFEM, LTD.

                             By: /s/ BRUCE F. ROSE
                                 -------------------------------
                                 Bruce F. Rose; President


                             "OFFICER"

                              /s/ AUDREY CONTENTE
                             ----------------------------------
                             AUDREY CONTENTE






                                         -11-