EXHIBIT 10.3
EMPLOYMENT AGREEMENT
among
WKI HOLDING COMPANY, INC.
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
--------------------
Recitals
--------
This EMPLOYMENT AGREEMENT (the "Agreement") among WKI Holding Company,
---------
Inc., a Delaware corporation ("Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Executive")
------- ---------
shall be effective as of February 10, 2003 (the "Agreement Date").
--------------
WHEREAS, the Company desires to employ Executive to serve as the Vice
President of Human Resources of the Company, upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises (which are deemed to be an
integral part of this Agreement) and the mutual covenants, representations,
warranties and agreements contained herein, the Company and Executive hereby
agree as follows:
Article I. DEFINITIONS
The terms set forth below have the following meanings (such meanings to be
applicable to both the singular and plural forms, except where otherwise
expressly indicated):
1.1 "Accrued Annual Bonus" means the amount of any Annual Bonus earned but
--------------------
not yet paid with respect to the Fiscal Year ended prior to the Date of
Termination.
1.2 "Accrued Base Salary" means the amount of Executive's Base Salary which
-------------------
is earned but not yet paid as of the Date of Termination.
1.3 "Agreement" is defined in the Recitals to this Agreement.
---------
1.4 "Agreement Date" is defined in the Recitals to this Agreement.
--------------
1.5 "Anniversary Date" means any annual anniversary of the Agreement
----------------
Date.
1.6 "Annual Bonus" is defined in Section 4.2(a).
------------
1.7 "Base Salary" is defined in Section 4.1.
-----------
1.8 "Beneficiary" is defined in Section 8.8.
-----------
1.9 "Cause" means any of the following:
-----
(a) Executive's commission of a misdemeanor involving fraud,
dishonesty, or moral turpitude, or of a felony,
(b) Executive's willful or intentional material breach of his
material obligations under this Agreement,
(c) willful or intentional material misconduct by Executive in the
performance of his duties under this Agreement, or
1
(d) the willful or intentional failure by Executive to materially
comply (to the best of his ability) with a specific, written
direction of the Chief Executive Officer of the Company that is
not inconsistent with this Agreement and Executive's
responsibilities hereunder, provided that such refusal or failure
(i) is not cured to the best of Executive's ability within ten
(10) business days after the delivery of such direction to
Executive and (ii) is not based on Executive's good faith belief,
as expressed by written notice to the Chief Executive Officer of
the Company given within such ten (10) business day period, that
the implementation of such direction of the Chief Executive
Officer of the Company would be unlawful or unethical.
1.10 "Change of Control" means any one or more of the following events:
-----------------
(a) any person (as such term is used in Rule 13d-5 under the
Exchange Act) or group (as such term is defined in Sections
3(a)(9) and 13(d)(3) of the Exchange Act), other than any
Subsidiary or any employee benefit plan (or any related trust) of
the Company or any of its Subsidiaries, becomes the beneficial
owner in the aggregate of more than thirty-five percent (35%) of
the Voting Securities;
(b) individuals who constitute the initial board of directors of
the Company as of January 31, 2003 (the "Reorganized Incumbent
---------------------
Board") cease for any reason to constitute more than sixty-six and
-----
two-thirds percent (66-2/3%) of the members of the board of
directors of the Company; provided that any individual who becomes
a director after January 31, 2003 whose election or nomination for
election by the Company shareholders, was approved by more than
sixty-six and two-thirds percent (66-2/3%) of the members of the
Reorganized Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in
connection with an actual or threatened "election contest"
relating to the election of the directors of the Company (as such
terms are used in Rule 14a-11 under the Exchange Act), "tender
offer" (as such term is used in Section 14(d) of the Exchange Act)
or a proposed Merger (as defined below in clause (c) of this
Section 1.11)) shall be deemed to be members of the Reorganized
Incumbent Board;
(c) consummation of a merger, reorganization, consolidation, or
similar transaction (any of the foregoing, a "Merger") unless the
------
Persons who were the beneficial owners of the Voting Securities
immediately before such Merger, are the beneficial owners,
immediately after such Merger, directly or indirectly, in the
aggregate, of more than sixty percent (60%) of the common stock
and any other voting securities of the entity resulting from such
Merger in substantially the same relative proportions as they
owned the Voting Securities immediately before the Merger;
(d) consummation of a sale of all or substantially all of the
assets of the Company (a "Sale") unless the Persons who were the
----
beneficial owners of the Voting Securities immediately before such
Sale, are the beneficial owners, immediately after such Sale,
directly or indirectly, in the aggregate, of more than
2
sixty percent (60%) of the common stock and any other voting
securities of the entity or entities that own such assets
immediately after the Sale; or
(e) The board of directors of the Company or the shareholders of
the Company, as applicable, approve a plan of liquidation of the
Company or World Kitchen, Inc.
Notwithstanding the foregoing, there shall not be a Change of Control if,
in advance of (or subsequent to) such event, Executive agrees in writing
that such event shall not constitute a Change of Control.
1.11 "Code" means the Internal Revenue Code of 1986, as amended from
----
time to time.
1.12 "Compensation Committee" means the compensation committee of the
----------------------
WKI Board, composed exclusively of non-employee directors.
1.13 "Date of Termination" means the effective date of a Termination of
-------------------
Employment for any reason, including death or Disability, whether by the
Company or by Executive.
1.14 "Disability" means a mental or physical condition which renders
----------
Executive unable or incompetent to carry out the material job
responsibilities which Executive held or the material duties to which
Executive was assigned at the time the disability was incurred, which has
existed for at least three (3) calendar months and which in the opinion of
a physician mutually agreed upon by the Company and Executive (provided
that the parties shall not unreasonably withhold such agreement) is
expected to be permanent or to last for an indefinite duration or a
duration in excess of six (6) calendar months.
1.15 "Employment Period" is defined in Article III.
-----------------
1.16 "Exchange Act" means the United States Securities Exchange Act of
------------
1934, as amended, or any federal statute or statutes which shall be enacted
to take its place, together with all rules and regulations promulgated
thereunder.
1.17 "Excise Tax" means the excise tax imposed by Section 4999 of the
----------
Code, together with any interest or penalties imposed with respect to such
excise tax.
1.18 "Executive" is defined in the Recitals to this Agreement.
---------
1.19 "Fiscal Year" means the calendar year period beginning each
-----------
January 1 and ending each December 31.
1.20 "Good Reason" means the occurrence of any one of the following
-----------
events unless Executive specifically consents to such event in writing:
(a) any material breach of the Agreement by the Company of any of
their material obligations under this Agreement, including any of
the following occurrences which shall be deemed to constitute a
material breach of their material obligations:
3
(i) failure to pay Base Salary as required by Section 4.1 or
Annual Bonus as required by Section 4.2;
(ii) failure to pay or provide material benefits under
Article VI of this Agreement; or
(iii) any substantial adverse change in the position,
responsibilities, and duties of Executive as compared to
Executive's position, responsibilities and duties as set forth in
Section 2.1,
(b) the failure of the Company to assign this Agreement to a
successor, as applicable, or the failure of such successor to
explicitly assume and agree to be bound by this Agreement
1.21 "including" means including without limitation.
---------
1.22 "Interest Rate" means the prime commercial lending rate announced
-------------
by JPMorgan Chase Bank on the date an amount is to be determined hereunder
or, if no such rate shall be announced on such date, the immediately prior
date on which JPMorgan Chase Bank announced such a rate; provided, however,
that if the interest rate determined in accordance with this Section 1.22
exceeds the highest legally permissible interest rate, then the Interest
Rate shall be the highest legally-permissible interest rate.
1.23 "Maximum Annual Bonus" is defined in Section 4.2(b).
--------------------
1.24 "Maximum Annual Goals" is defined in Section 4.2(b).
--------------------
1.25 "Maximum Percentage" is defined in Section 4.2(b).
------------------
1.26 "Payment" shall mean any payment or distribution in the nature of
-------
compensation (within the meaning of Section 280G(b)(2) of the Code) to or
for the benefit of Executive, whether paid or payable pursuant to this
Agreement or otherwise.
1.27 "Person" means any individual, sole proprietorship, partnership,
------
joint venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
instrumentality, division, agency, body or department.
1.28 "Prorata Annual Bonus" means (a) the product of the Target Annual
--------------------
Bonus for the Fiscal Year that includes the Date of Termination multiplied
by (b) a fraction, the numerator of which is the number of days which have
elapsed in the Fiscal Year through the Date of Termination and the
denominator of which is 365.
1.29 "Severance Period" means two (2) years from the Date of
----------------
Termination.
1.30 "Stock" means the shares of common stock, par value $0.01 per
-----
share, of the Company.
1.31 "Subsidiary" means, with respect to any Person, (a) any
----------
corporation of which more than fifty percent (50%) of the outstanding
capital stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of
4
whether, at the time, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
by such Person, or (b) any partnership, limited liability company or other
entity in which such Person has a direct or indirect interest (whether in
the form of voting or participation in profits or capital contribution) of
more than fifty percent (50%).
1.32 "Target Annual Bonus" is defined in Section 4.2(b).
-------------------
1.33 "Target Annual Goals" is defined in Section 4.2(b).
-------------------
1.34 "Target Percentage" is defined in Section 4.2(b).
-----------------
1.35 "Taxes" means the incremental United States federal, state and
-----
local income, excise and other taxes payable by Executive with respect to
any applicable item of income.
1.36 "Termination for Good Reason" means a Termination of Employment
---------------------------
by Executive for a Good Reason during the Employment Period.
1.37 "Termination of Employment" means a termination by the Company or
-------------------------
by Executive of Executive's employment by the Company.
1.38 "Termination Without Cause" means a termination of Executive by
-------------------------
the Company for any reason other than Cause or Executive's death or
Disability during the Employment Period.
1.39 "Value" of a Payment shall mean the economic present value of a
-----
Payment as of the date of the change of control for purposes of Section
280G of the Code, as determined by the Accounting Firm using the discount
rate required by Section 280G(d)(4) of the Code.
1.40 "Voting Securities" means any of the securities of the Company
-----------------
entitled to vote generally in the election of the directors of the Company.
1.41 "WKI Board" means the board of directors of the Company.
---------
Article II. POSITION AND RESPONSIBILITIES
2.1 Duties. During the Employment Period, the Company shall employ the
------
Executive as its Vice President of Human Resources. During the Employment
Period, Executive shall devote substantially all of his business time,
attention and effort to the affairs of the Company and the Subsidiaries and
shall use his reasonable best efforts to promote the best interests of the
Company and the Subsidiaries. Executive shall be responsible for such
functions and operations as assigned to him from time to time by the Chief
Executive Officer of the Company. Executive shall report on all functions
and operations within the scope of his responsibilities to the Chief
Executive Officer of the Company. During the Employment Period, and
excluding any periods of disability, vacation, or sick
5
leave to which Executive is entitled, Executive agrees to devote his full
attention and time to the business and affairs of the Company and the
Subsidiaries.
2.2 Other Activities. Executive may serve on corporate, civic or
----------------
charitable boards or committees, deliver lectures, fulfill speaking
engagements or teach at educational institutions, or manage personal
investments, provided that such activities do not individually or in the
aggregate materially interfere with the performance of Executive's duties
under this Agreement.
Article III. EMPLOYMENT PERIOD
3.1 Employment Period.
-----------------
(a) Subject to the termination provisions hereinafter provided, the
initial term of Executive's employment under this Agreement (the
"Employment Period") shall commence on the Agreement Date and end
-----------------
on the Anniversary Date which is three (3) years after the
Agreement Date (the "Initial Term"); provided, however, that as of
------------
the date that is six (6) months before the end of the Initial Term,
the Employment Period will automatically be extended through the
Anniversary Date that is five years after the Agreement Date,
unless one party has previously provided the other with a notice
that such extension shall not take place (a "Notice of
Non-Extension"). The period from the end of the Initial Term
through such fifth Anniversary Date is referred to as the
"Extension Period".
----------------
(b) Notwithstanding the foregoing, (i) if either party timely
delivers a written Notice of Non-Extension to the other in
accordance with the provisions of Subsection (a) hereof, this
Agreement and the Employment Period shall automatically terminate
at the end of the Initial Term and (ii) this Agreement and the
Employment Period shall automatically terminate at the end of the
Employment Period.
Article IV. COMPENSATION
4.1 Salary. The Company shall pay Executive in accordance with the
------
normal payroll practices of the Company an annual salary at a rate of
$275,000 per year ("Base Salary"). During the Employment Period, the Base
-----------
Salary shall be reviewed at least annually and may be increased (but not
decreased) from time to time as shall be determined by the WKI Board or the
Compensation Committee. Any increase in Base Salary shall not limit or
reduce any other obligation of the Company to Executive under this
Agreement. Once Base Salary shall have been increased, it shall be treated
for all purposes of this Agreement as Executive's Base Salary. Base Salary
shall not be decreased at any time without the express written consent of
Executive.
4.2 Annual Bonus.
------------
(a) Executive shall be eligible to earn an annual cash bonus
("Annual Bonus") in accordance with the terms hereof for each
------------
Fiscal Year which begins during the Employment Period.
6
(b) The WKI Board or the Compensation Committee, as applicable,
(collectively, the "Board or Committee") shall establish
------------------
performance goals, the achievement of which will determine the
amount of the Executive's annual bonuses for the 2003 Fiscal Year
and later Fiscal Years that end during the Employment Period. In
the case of the 2003 Fiscal Year, performance goals shall be set by
the Board or Committee as soon as practicable after the Agreement
Date. Performance goals for other Fiscal Years shall be established
annually by the Board or Committee, after consultation with the
Executive, within ninety (90) calendar days after the first day of
the applicable Fiscal Year. If Executive achieves the target level
of such performance goals (the "Target Annual Goals"), as
-------------------
determined by the Board or Committee, his Annual Bonus for that
Fiscal year shall be equal to fifty percent (50%) (the "Target
------
Percentage") of Executive's Base Salary (the "Target Annual
---------- -------------
Bonus"). If Executive achieves the maximum level of such
-----
performance goals ("Maximum Annual Goals") for any such Fiscal
--------------------
year, as determined by the Board or Committee, his Annual Bonus for
that Fiscal Year shall be one hundred percent (100%) (the "Maximum
-------
Percentage") of Executive's Base Salary (the "Maximum Annual
---------- --------------
Bonus"). The Annual Bonus for any Fiscal Year may exceed the
-----
Maximum Annual Bonus at the discretion of the Board or Committee.
The Target Percentage and the Maximum Percentage may be increased
by the Board or Committee, from time to time, but may not be
decreased below the above specified percentages of Executive's Base
Salary without the express written consent of Executive. If
Executive achieves a level of performance which falls between the
Target Annual Goals and the Maximum Annual Goals, linear
interpolation shall be applied to determine Executive's Annual
Bonus for such year. Notwithstanding the foregoing, for the 2003
Fiscal Year, Executive's Target Annual Bonus shall be equal to
fifty percent (50%) of Executive's Base Salary (or $137,500).
Executive shall be guaranteed an Annual Bonus for the 2003 Fiscal
Year of not less than $68,750, provided he remains actively
employed by the Company through December 31, 2003.
(c) Except as described in the following sentence, the Company
shall pay the entire Annual Bonus that is payable with respect to a
Fiscal Year in a lump sum cash payment as soon as practicable after
the Board or Committee determines whether and the degree to which
Maximum Annual Goals or Target Annual Goals have been achieved
following the close of such Fiscal Year. Any such Annual Bonus
shall in any event be determined and paid within ninety (90)
calendar days after the end of the Fiscal Year; provided, however,
that the guaranteed $68,750 Annual Bonus for the 2003 Fiscal Year
shall be paid on January 2, 2004.
4.3 Hiring Bonus. The Company shall pay the Executive a hiring bonus
------------
in the amount of $30,000, payable as soon as practicable following the
Agreement Date.
Article V. PARTICIPATION IN EQUITY PLAN
5.1 Executive and the Company agree that Executive shall be a
participant in the WKI Holding Company, Inc. Stock Option Plan (the "Equity
Plan") on terms and conditions mutually agreeable to the Executive and the
Compensation Committee. Executive and the Company agree that the parties
shall negotiate in good faith to
7
establish appropriate terms for the reservation and authorization for the
issuance of Stock under the Equity Plan with respect to Executive.
Article VI. BENEFITS AND PERQUISITES
6.1 Benefit Plans and Perquisites.
-----------------------------
(a) Executive shall be entitled to participate in the welfare
benefit plans and programs and perquisites of the Company on terms
not less favorable than those in effect for other senior executives
of the Company from time to time; provided, that Executive shall
not be covered by any severance plan, program or policy during the
Employment Period.
(b) Executive shall be entitled to participate in the retirement
and savings benefit plans and programs of the Company on terms not
less favorable than those in effect for other senior executives of
the Company from time to time.
(c) Without limiting the generality of the foregoing, during the
Employment Period, Executive shall receive a cash benefits
allowance of $35,000 per year, which amount shall be paid (in
arrears) no later than January 31 of the following year.
(d) Executive shall also be entitled to participate in the
long-term incentive compensation plan of the Company, as in effect
from time to time.
6.2 Expenses. During the Employment Period, Executive shall be
--------
entitled to receive prompt reimbursement for all reasonable
employment-related expenses incurred by Executive upon the receipt by the
Company of an accounting for such expenses in accordance with the
practices, policies and procedures applicable to other senior executives of
the Company.
6.3 Office; Support Staff. During the Employment Period, Executive
---------------------
shall be entitled to an office, and to secretarial and other assistance,
appropriate to his position and duties under this Agreement.
Article VII. TERMINATION BENEFITS
7.1 Termination for Other Than for Good Reason, Death or Disability,
----------------------------------------------------------------
or At or After End of Employment Term.
-------------------------------------
(a) If Executive terminates his employment during the Employment
Term other than for Good Reason, death or Disability, the Company
shall pay to Executive as soon as reasonably possible but in no
event later than thirty (30) calendar days after the Date of
Termination an amount equal to the sum of Executive's Accrued Base
Salary and Accrued Annual Bonus. The respective provisions of any
benefit plans or perquisite programs in which Executive
participates shall govern whether Executive shall be entitled to
any benefits under such plans or programs.
8
(b) If the Executive's employment is terminated at or after the end
of the Employment Period for any reason (whether by Executive or
the Company), including, without limitation, by virtue of the
Company providing a Notice of Non-Extension to the Executive, (i)
the Company shall pay to Executive as soon as reasonably possible
but in no event later than thirty (30) calendar days after the Date
of Termination an amount equal to the sum of Executive's Accrued
Base Salary and Accrued Annual Bonus and (ii) the respective
provisions of any benefit plans or perquisite programs in which
Executive participates shall govern whether Executive shall be
entitled to any benefits under such plans or programs.
Notwithstanding the foregoing, in the event that the Executive's
employment is terminated, for reasons other than cause, after the
end of the Employment Period under circumstances which would
otherwise entitle him to receive severance benefits under a
severance plan or policy of the Company in effect as such time, the
amount of the Executive's severance pay payable under such plan or
policy shall in no event be less than one (1) year's Base Salary
(as in effect at termination), payable in accordance with the terms
of, and subject to the conditions of, such plan or policy.
7.2 Termination for Cause. If the Company terminates Executive's
---------------------
employment for Cause, the Company shall pay to Executive as soon as
reasonably possible but in no event later than thirty (30) calendar days
after the Date of Termination an amount equal to the Executive's Accrued
Base Salary. In addition, the respective provisions of any benefit plans or
perquisite programs in which Executive participates shall govern whether
Executive shall be entitled to any benefits under such plans or programs;
provided, however, that in no event shall the Executive be entitled to
receive any Accrued Annual Bonus (or similar payment) if his employment is
terminated for Cause.
7.3 Termination for Death or Disability. If, before the end of the
-----------------------------------
Employment Period, Executive's employment terminates due to his death or
Disability, the Company shall pay to Executive or his Beneficiaries, as the
case may be, as soon as reasonably possible but in no event later than
thirty (30) calendar days after the Date of Termination, an amount which is
equal to the sum of Executive's Accrued Base Salary and Accrued Annual
Bonus. Further, if the Date of Termination occurs during the period
commencing from July 1 through December 31 of any Fiscal Year, Executive or
his Beneficiaries, as the case may be, shall be paid a Prorata Annual Bonus
as soon as reasonably possible but in no event later than thirty (30)
calendar days after the Date of Termination. The respective provisions of
any benefit plans or perquisite programs in which Executive participates
shall govern whether Executive or his Beneficiaries, as applicable, shall
be entitled to any benefits under such plans or programs.
7.4 Termination Without Cause or for Good Reason.
--------------------------------------------
(a) In the event of a Termination Without Cause or a Termination
for Good Reason, Executive shall receive the following:
(i) as soon as reasonably possible but in no event later than
thirty (30) calendar days after the Date of Termination, a lump sum
amount in immediately
9
available funds equal to the sum of Executive's Accrued Base Salary
and Accrued Annual Bonus;
(ii) as soon as reasonably possible but in no event later
than thirty (30) calendar days after the Date of Termination, a
lump sum amount in immediately available funds equal to 120% of
Executive's Base Salary;
(iii) if the Date of Termination occurs during the period
commencing from July 1 through December 31 of any Fiscal Year, as
soon as reasonably possible but in no event later than thirty (30)
calendar days after the Date of Termination, a lump sum amount in
immediately available funds equal to the Prorata Annual Bonus;
(iv) as soon as reasonably possible but in no event later
than thirty (30) calendar days after the Date of Termination, a
lump sum amount in immediately available funds equal to the total
amount (if any) of Executive's unvested benefits under any plan or
program sponsored by the Company providing deferred compensation or
retirement benefits, that are forfeited on account of the
Termination of Employment, and that would have vested, had
Executive's employment continued through the end of the Severance
Period;
(v) the medical and dental benefits referred to in Section
6.1(a) to which Executive is entitled as of the Date of Termination
through the Severance Period; and
(vi) as soon as reasonably possible but in no event later
than thirty (30) calendar days after the Date of Termination, but
without duplication of the foregoing, a lump sum cash payment equal
to the present value (determined using the Interest Rate) of the
amounts payable under Section 6.1(c) for the period from the Date
of Termination through the Severance Period.
(b) Executive's Termination of Employment shall not be considered
to be for Good Reason unless:
(i) not more than ninety (90) calendar days after the
occurrence (or if later, not more than ninety (90) calendar days
after the Executive becomes aware) of the event or events alleged
to constitute Good Reason, Executive provides the Company with
written notice (the "Notice of Good Reason") of his intent to
---------------------
consider the Termination for Good Reason, including a detailed
description of the specific reasons which form the basis for such
consideration, and demanding that such event or events be cured not
later than ten (10) business days after the Company receives the
Notice of Good Reason (the "Cure Period");
-----------
(ii) the Company shall have failed to cure such event or
events during the Cure Period; and
(iii) not more than ninety (90) calendar days following the
expiration of the Cure Period, Executive shall have given the
Company a second notice (a "Notice of Termination for Good Reason")
-------------------------------------
stating that such cure has not occurred
10
and that as a result, Executive is terminating his employment for
Good Reason on the date (after the end of the Cure Period)
specified in the Notice of Termination for Good Reason. A Notice of
Termination for Good Reason shall not be based upon any reason or
reasons other than one or more reasons set forth in the Notice of
Good Reason.
Article VIII. MISCELLANEOUS
8.1 Public Announcement. The Company shall give Executive a reasonable
-------------------
opportunity to review and comment on any public announcement relating to
this Agreement or Executive's employment by the Company.
8.2 Approvals. The Company represents and warrants to Executive that
---------
it has taken all corporate action necessary to authorize this Agreement.
8.3 Full Settlement. The Company's obligations to make the payments
---------------
provided for in this Agreement and otherwise to perform their obligations
hereunder shall not be affected by any circumstances, including set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. Any claim which the Company
may have against Executive, whether for a breach of this Agreement or
otherwise, shall be brought in a separate action or proceeding and not as
part of any action or proceeding brought by Executive to enforce any rights
against the Company under this Agreement.
8.4 No Mitigation. In no event shall Executive be obligated to seek
-------------
other employment or to take any other action to mitigate the amounts
payable to Executive under any of the provisions of this Agreement, nor
shall the amount of any payment hereunder be reduced by any compensation
earned as a result of Executive's employment by another employer, except
that any continued welfare benefits provided for by Section 7.4(a)(v) shall
not duplicate any benefits that are provided to Executive and his family by
such other employer and shall be secondary to any coverage provided by such
other employer.
8.5 Guarantee. World Kitchen, Inc. agrees to guarantee the payment of
---------
any liabilities under this Agreement.
8.6 Liability Insurance and Indemnification. The Company shall
---------------------------------------
maintain directors' and officers' liability insurance for Executive while
employed, and for a six (6) year period following Termination of Employment
at a level equivalent to the most favorable and protective coverage for any
active officer or director of the Company. The Company agrees to indemnify
Executive for any job-related liability to the fullest extent permitted
under applicable law, its by-laws, and other applicable indemnification
agreements of the Company.
8.7 Non-Solicitation. In consideration of the benefits provided under
----------------
this Agreement, Executive hereby agrees to be bound by the provisions of
this Section. During the Employment Period and for a period of one (1) year
after termination of employment for any reason, Executive shall not in any
manner, directly or indirectly, induce or attempt to induce any employee of
the Company or any Subsidiary or affiliate to quit or abandon his
11
or her employment, or any customer, independent contractor, consultant,
supplier or vendor of the Company Business to quit or abandon its
relationship for any purpose whatsoever. For purposes of this Section,
"Company Business" means the development, manufacture or purchase from
third parties and marketing of consumer bakeware, dinnerware, kitchen and
household tools, rangetop cookware and cutlery products.
8.8 Enforcement.
-----------
(a) If Executive incurs legal, accounting, expert witness or other
fees and expenses in an effort to establish, in connection with any
dispute with the Company, Executive's entitlement to compensation
and benefits under this Agreement, the Company shall, to the extent
Executive is successful in such dispute, reimburse Executive for
such fees and expenses, to the extent the incurrence and amount
thereof are reasonable, and shall pay Executive a Tax Gross-Up
Payment in respect of the Taxes incurred by Executive with respect
to such reimbursement of fees and expenses. The Company shall
reimburse Executive for such fees and expenses on a monthly basis
upon Executive's request for reimbursement accompanied by evidence
that the fees and expenses were incurred.
(b) If the Company fails to pay any amount provided under this
Agreement when due, the Company shall pay interest on such amount
at a rate equal to the Interest Rate.
8.9 Beneficiary. If Executive dies prior to receiving all of the
-----------
amounts payable to him in accordance with the terms and conditions of this
Agreement, such amounts shall be paid to the beneficiary ("Beneficiary")
-----------
designated by Executive in writing to the Company during his lifetime, or
if no such Beneficiary is designated, to Executive's estate. Such payments
shall be made in a lump sum to the extent so payable and, to the extent not
payable in a lump sum, in accordance with the terms of this Agreement.
Executive, without the consent of any prior Beneficiary, may change his
designation of Beneficiary or Beneficiaries at any time or from time to
time by submitting to the Company a new designation in writing.
8.10 Assignment; Successors. The Company may not assign its or their
----------------------
rights and obligations under this Agreement without the prior written
consent of Executive except to a successor to its business. This Agreement
shall be binding upon and inure to the benefit of Executive, his estate and
Beneficiaries, the Company, and the successors and permitted assigns of the
Company.
8.11 Nonalienation. Except as otherwise expressly provided herein,
-------------
benefits payable under this Agreement shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, prior to actually being received by Executive, and any such
attempt to dispose of any right to benefits payable hereunder shall be
void.
8.12 Severability. If all or any part of this Agreement is declared by
------------
any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any portion of
this Agreement not declared to be unlawful or
12
invalid. Any provision so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of
such provision to the fullest extent possible while remaining lawful and
valid.
8.13 Amendment; Waiver. This Agreement shall not be amended or
-----------------
modified except by written instrument executed by the Company, World
Kitchen, Inc. and Executive. A waiver of any term, covenant or condition
contained in this Agreement shall not be deemed a waiver of any other term,
covenant or condition, and any waiver of any default in any such term,
covenant or condition shall not be deemed a waiver of any later default
thereof or of any other term, covenant or condition.
8.14 Notices. All notices hereunder shall be in writing and delivered
-------
by hand, by nationally-recognized delivery service that guarantees
overnight delivery, or by first-class, registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Company, to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
If to Executive, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The parties may from time to time designate a new address by notice given
in accordance with this Section 8.14. Notice shall be considered to have
been given when actually received by the addressee.
8.15 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
8.16 Entire Agreement. This Agreement forms the entire agreement
----------------
between the parties hereto with respect to the subject matter contained in
the Agreement and shall supersede all prior agreements, promises and
representations regarding employment, compensation, severance or other
payments contingent upon Termination of Employment, whether in writing or
otherwise.
8.17 Applicable Law. This Agreement shall be interpreted and construed
--------------
in accordance with the laws of the State of Delaware, without regard to its
choice of law principles.
13
8.18 Survival of Executive's Rights. All of Executive's rights
------------------------------
hereunder, including his rights to compensation and benefits, shall survive
the termination of Executive's employment, the termination of this
Agreement, or both.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Agreement Date.
WKI HOLDING COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Its:
---------------------
Date: June 18, 2003
------------------
WORLD KITCHEN, INC.
By:
----------------------
Its:
---------------------
Date:
--------------------
EXECUTIVE:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
June 18, 2003
-------------------------
Date
14