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Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of November 3, 1997 by and
between REXALL SUNDOWN, INC., a Florida corporation (the "Company"), and GERRY
HOLLY (the "Employee").
R E C I T A L S
The Company desires to employ the Employee, and the Employee desires to
be employed by the Company, in accordance with the provisions contained in this
Employment Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of each of the Company and the Employee contained in
this Agreement, each of the Company and the Employee agrees as follows:
I. EMPLOYMENT
1.1 The Company employs the Employee and the Employee accepts such
employment. Subject to the direction of the Board of Directors of the Company,
the Employee shall serve as the Executive Vice President-Operations of the
Company. The Employee shall have such responsibilities, perform such duties and
exercise such power and authority as are inherent in, or incident to, the office
of Executive Vice President-Operations. The Employee shall devote his full
business time and attention and his best efforts to the performance of his
duties as an employee of the Company.
1.2 During the Term (as hereinafter defined), the Employee, if elected,
shall serve as a Director of the Company and/or a Director or officer of any
subsidiary of the Company without any additional compensation for such services
other than the compensation provided for hereunder.
II. TERM
2.1 Subject to the provisions of Article V hereof, the term of this
Agreement shall be for the period commencing on November 3, 1997, and
terminating on November 2, 2000 (the "Term").
III. COMPENSATION
3.1 SALARY. In payment for the obligations to be performed by the
Employee during the Term, the Company shall pay to the Employee (subject to any
applicable payroll and/or taxes required to be withheld) annual compensation
("Annual Compensation") equal to (i) a salary of Two Hundred Twenty Five
Thousand Dollars ($225,000.00) in cash for the year commencing November 3, 1997
and (ii) for each succeeding year during the Term, a salary equal to that of the
previous year increased by the greater of (A) 5% or (B) the percentage increase
in the cost of living based upon the Revised Consumer Price Index (1982-84=100)
published by the Bureau of Labor Statistics of the United States Department of
Labor for Boca Raton, Florida utilizing November 1997 as the base month.
3.2 PAYMENT OF SALARY. Payments of salary shall be made to the Employee
in installments from time to time on the same dates that payments of salary are
generally made to all senior management employees of the Company.
3.3 INCENTIVE COMPENSATION. The Company shall pay the Employee an
incentive compensation bonus in an amount up to sixty-two and one-half percent
(62.5%) of Employee's Annual Compensation for each of the Company's fiscal years
during the Term hereof pursuant to the Company's Management Incentive Plan in
effect from time to time.
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IV. CERTAIN FRINGE BENEFITS
4.1 GENERALLY. The Employee shall be entitled to reimbursement for
reasonable business expenses incurred in connection with his employment
including customer entertainment. The Company shall provide the Employee with an
automobile allowance of $10,500 per year. The Company will also provide the
Employee with a country club membership and a car or cellular telephone, a
company credit card for business travel, entertainment and gas for the
Employee's automobile. The Employee shall further be entitled to receive such
benefits and to participate in such benefit plans as are generally provided from
time to time by the Company to its senior management employees; provided,
however, that nothing contained in this Section 4.1 shall be construed to
obligate the Company to provide any specific benefits to its employees
generally.
4.2 VACATIONS. The Employee shall be entitled to such vacation time on
an annual basis as is provided in accordance with the policies as are from time
to time in force for the Company's employees, or as otherwise approved by the
Company's President.
4.3. MOVING AND RELOCATION EXPENSES. Pursuant to a separate agreement,
the Company has agreed to reimburse the Employee for all interim living expenses
prior to moving to southern Florida, for moving expenses in connection with such
move, and closing costs, attorneys' fees and real estate brokerage costs in
connection with the sale of Employee's current house and purchase of a new
house. In addition, the Company shall reimburse the Employee for up to two round
trip air tickets between southern Florida and California per month.
V. TERMINATION OF EMPLOYMENT
5.1 CERTAIN DEFINITIONS. The following terms shall have the following
respective meanings when utilized in this Agreement:
(a) "Acquisition of Control" shall mean:
(i) any person (including a Group), without the
approval of a majority of the Incumbent Directors, becoming the Beneficial Owner
of, or acquiring the power to direct the exercise of voting power with respect
to, directly or indirectly, securities which represent thirty percent (30%) or
more of the combined voting power of the Company's outstanding securities
thereafter, whether or not some portion of such securities was owned by such
person (or by any member of such Group) prior thereto; provided, however, that
this provision shall not apply to acquisitions by a director, executive officer
or their affiliates if such person had such status on November 3,1997; or
(ii) the Incumbent Directors cease at any time to
constitute a majority of the Board of Directors, whether of (A) the Company or
(B) after any cash tender offer or exchange offer, merger, consolidation or
other business combination, recapitalization of the Company, sale, liquidation
or dissolution (or adoption of a plan for liquidation or dissolution), or any
combination of any or all of the foregoing transactions, including but not
limited to a series of such transactions, any successor to the Company;
provided, however, an Acquisition of Control shall not be deemed to have
occurred with respect to the Employee if the action of the Employee was
voluntary and would have been sufficient, without the action of others, to
constitute an Acquisition of Control.
(b) "Beneficial Owner" shall have the meaning provided in
Section 607.0901(1)(e) of the Florida Statutes.
(c) "Cause" shall mean any action by the Employee or any
inaction by the Employee which is reasonably believed by the Company to
constitute:
(i) fraud, embezzlement, misappropriation, dishonesty
or breach of trust;
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(ii) a felony or moral turpitude;
(iii) material breach or violation of any or all of
the covenants, agreements and obligations of the Employee set forth in this
Agreement, other than as the result of the Employee's death or Disability;
(iv) a willful or knowing failure or refusal by the
Employee to perform any or all of his material duties and responsibilities as an
officer of the Company, other than as the result of the Employee's death or
Disability; or
(v) gross negligence by the Employee in the
performance of any or all of his material duties and responsibilities as an
officer of the Company, other than as the result of the Employee's death or
Disability;
provided, however, that if the basis for any
termination of the Employee's employment by the Company as set forth in the
Termination Notice delivered by the Company to the Employee is any or all of the
definitions of Cause set forth in Section 5.1(c)(iii) or Section 5.1(c)(iv) of
this Agreement, then, in such event, the Employee shall have thirty (30) days
from and after the date of his receipt of such Termination Notice to cure the
action or inaction specified therein to the reasonable satisfaction of the
Company.
(d) "Compensation" shall mean the cash payment to which
Employee is entitled under the provisions of Sections 3.1 and 3.3 hereof.
(e) "Disability" shall mean any mental or physical illness,
condition, disability or incapacity which prevents the Employee from reasonably
discharging his duties and responsibilities as an officer of the Company. If any
disagreement or dispute shall arise between the Company and the Employee as to
whether the Employee suffers from any Disability, then, in any such event, the
Employee shall submit to the physical or mental examination of a physician
licensed under the laws of the State of Florida, who shall be mutually selected
by the Company and the Employee, and such physician shall make the determination
of whether the Employee suffers from any Disability. In the absence of fraud or
bad faith, the determination of such physician shall be final and binding upon
each of the Company and the Employee. The entire cost of any such examination
shall be borne solely by the Employee.
(f) "Group" shall mean any combination of persons knowingly
participating in a joint activity or interdependent consciously parallel action
toward a common goal, whether or not pursuant to an express contract; provided,
however, that actions taken by a director of the Company acting as such shall
not alone constitute membership in a Group.
(g) "Incumbent Director" shall mean any director of the
Company serving at November 3, 1997 or one elected thereafter if nominated or
approved by at least two-thirds of the then Incumbent Directors.
(h) "Protracted Disability" shall mean any Disability which
prevents the Employee from reasonably discharging his duties and
responsibilities as an officer of the Company for a period of six (6)
consecutive months.
(i) "Termination Date" shall mean a specific date not less
than ten (10) nor more than thirty (30) days from and after the date of any
Termination Notice upon which the Employee's employment by the Company shall be
terminated in accordance with the provisions of this Agreement.
(j) "Termination Notice" shall mean a written notice which (i)
sets forth the specific provision of this Agreement relied upon to terminate the
Employee's employment by the Company, (ii) sets forth in reasonable detail the
facts and circumstances claimed to provide the basis for the termination of the
Employee's employment by the Company pursuant to the specific provision of this
Agreement relied upon therein and (iii) sets forth a Termination Date.
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5.2 TERMINATION OF EMPLOYMENT.
(a) Notwithstanding the provisions of Article II hereof, this
Agreement (i) shall be automatically terminated upon the death of the Employee
pursuant to the provisions of Section 5.3 hereof, (ii) may be terminated at any
time by the Company pursuant to the provisions of Section 5.4 or 5.5 hereof and
(iii) may be terminated by the Employee pursuant to the provisions of Section
5.6 hereof.
(b) If either the Company or the Employee shall desire to
terminate the Employee's employment by the Company pursuant to any of the
provisions of Sections 5.4, 5.5 or 5.6 hereof, then the party causing any such
termination shall give to the other party a Termination Notice.
(c) If this Agreement shall be terminated pursuant to any of
the provisions of this Article V, the Company shall be discharged from all of
its obligations to the Employee hereunder upon its payment to the Employee of
the required amount set forth in the section of this Article 5 pursuant to which
such termination shall occur.
5.3 DEATH OF EMPLOYEE. If at any time during the Term the Employee
shall die, then the employment of the Employee by the Company shall
automatically terminate on the date of the Employee's death. In such event, not
more than thirty (30) days from and after the date of the Employee's death, the
Company shall pay to the Employee's estate or heirs, as the case may be, an
amount in cash equal to the Employee's Compensation (subject to any applicable
payroll and/or other taxes required by law to be withheld) determined as of the
date of the Employee's death.
5.4 DISABILITY OF EMPLOYEE.
(a) If at any time during the Term the Employee shall suffer
any Disability, then the Company shall be obligated to continue to pay in the
ordinary and normal course of its business to the Employee or his legal
representatives, as the case may be, the Employee's Compensation (subject to any
applicable payroll and/or other taxes required by law to be withheld) from the
date that the Employee shall first suffer any such Disability to the date that
the Employee's employment by the Company shall be terminated pursuant to any of
the provisions of this Agreement.
(b) If the Employee shall suffer any Protracted Disability
during the Term, then the Company may terminate this Agreement. In such event,
in addition to any other benefits which may have been provided by the Company to
the Employee or his legal representatives, as the case may be, pursuant to the
provisions of Section 5.4(a) hereof, not later than thirty (30) days after the
Termination Date specified in the Termination Notice, the Company shall pay to
the Employee or his legal representatives, as the case may be, an amount in cash
equal to the Employee's Compensation (subject to any applicable payroll and/or
other taxes required by law to be withheld) determined as of the Termination
Date. Subsequent to such Termination Date, the Employee or his legal
representatives, as the case may be, shall also be entitled to receive any
benefits which may be payable under any disability insurance policy or
disability plan provided by the Company.
5.5 TERMINATION OF EMPLOYMENT BY COMPANY.
(a) The Company may terminate this Agreement at any time with
Cause. In such event, the Company shall be obligated to continue to pay in the
ordinary and normal course of its business to the Employee his Annual
Compensation (subject to any applicable payroll and/or other taxes required by
law to be withheld) until the Termination Date.
(b) The Company may terminate this Agreement at any time
without Cause. If the Company shall terminate the employment of the Employee by
the Company without Cause, and not pursuant to any other provision of this
Agreement, the Company shall continue to pay to the Employee the Employee's
Annual Compensation (subject to any applicable payroll and/or other taxes
required by law to be withheld) for a period of
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one (1) year from the date of termination. If the Employee is terminated without
cause, the provisions of Section 6.1(b) hereof shall be of no further force and
effect.
5.6 CHANGE IN CONTROL. Notwithstanding any other provisions of Sections
5.1 through 5.5 hereof, if (i) there is an Acquisition of Control and, (ii) at
any time within three (3) months prior to such Acquisition of Control or at any
time within one (1) year thereafter, either (A) the Employee for any reason
terminates his employment with the Company, or (B) the Employee's employment is
terminated without Cause, then the Employee shall have the option, but not the
obligation, of being paid in cash an amount equal to three (3) times his
Compensation for the then current fiscal year of the Company (amounts due under
this Section 5.6 are referred to as the "Payment"). If the Employee opts to
receive the Payment under this Section 5.6, whether his employment is terminated
by the Company or by himself, the provisions of Section 6.1(b) hereof shall be
of no further force or effect. Subject to the provisions of Section 5.7 hereof,
the Payment shall be made not later than three (3) months after the Employee
gives notice to the Company in the form of a Termination Notice of his election
under this Section 5.6.
5.7 PAYMENTS. Notwithstanding anything in the foregoing to the
contrary, if any of the payments provided for in this Agreement, together with
any other payments which the Employee has the right to receive from the Company,
would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the
Internal Revenue Code), the payments pursuant to this Agreement shall be reduced
to the largest amount as will result in no portion of such payments being
subject to the excise tax imposed in Section 4999 of the Internal Revenue Code;
provided, however, that the Employee shall have the absolute discretion to
direct the Company to pay any amount which shall be payable to him pursuant to
Section 5.6 hereof in such equal annual installments as the Employee may direct,
with the first such installment payable when such amount would otherwise have
been payable; and further provided that the Employee shall have the absolute
discretion to allocate any reductions required by this Section 5.7 from amounts
due him under Section 5.6 hereof. The Company shall be obligated to comply with
any directions given to it by the Employee pursuant to the preceding sentence.
VI. CERTAIN RESTRICTIONS ON THE EMPLOYEE
6.1 CERTAIN RESTRICTIONS. The Employee covenants and agrees with the
Company as follows:
(a) He shall not at any time, directly and indirectly, for
himself or any other person, firm, corporation, partnership, association or
other entity which competes in any manner with the Company or any of its
subsidiaries or affiliates in the United States of America or its territories or
possessions (collectively, the "Territory"), attempt to employ, employ or enter
into any contractual arrangement for employment with, any employee or former
employee of the Company or any of its subsidiaries or affiliates, unless such
former employee shall not have been employed by the Company or any of its
subsidiaries or affiliates for a period of at least one (1) year.
(b) He shall not, during the term of this Agreement, and for a
period of eighteen (18) months from and after the date of termination of this
Agreement, directly or indirectly, (i) acquire or own in any manner any interest
in, or loan any amount to, any person, firm, partnership, corporation,
association or other entity which competes in any manner with the Company or any
of its subsidiaries or affiliates in the Territory, (ii) be employed by or serve
as an employee, agent, officer, director of, or as a consultant to, any person,
firm, partnership, corporation, association or other entity, other than the
Company and its subsidiaries and affiliates, which competes in any manner with
any of the Company or its subsidiaries or affiliates in the Territory, or (iii)
compete in any manner with the Company or its subsidiaries or affiliates in the
Territory. The foregoing provisions of this Section 6.1(b) shall not prevent the
Employee from acquiring or owning not more than five percent (5%) of the equity
securities of any entity whose securities are listed for trading on a national
securities exchange or are regularly traded in the over-the-counter securities
market.
(c) He shall not at any time disclose, directly or indirectly,
to any person, firm, corporation, partnership, association or other entity, any
confidential information relating to the Company or any of its subsidiaries or
affiliates, including, without limitation, any information concerning the
financial condition, assets, personnel, procedures, techniques, products,
customers, sources of leads and methods of obtaining new business or
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the methods generally of doing and operating the respective businesses of the
Company and its subsidiaries and affiliates, trade secrets, product ideas,
processes, techniques, formulas, know-how, marketing plans and strategies,
except to the extent that such information is a matter of public knowledge or is
required to be disclosed by law or judicial or administrative process.
(d) He shall return all Company documents to the Company upon
the termination of his employment by the Company.
6.2 INJUNCTION. It is recognized and acknowledged by each of the
Company and the Employee that a breach or violation by the Employee of any or
all of his covenants and agreements contained in Section 6.1 hereof will cause
irreparable harm and damage to the Company and its subsidiaries and affiliates
in a monetary amount which would be virtually impossible to ascertain. As a
result, the Employee recognizes and acknowledges that the Company and its
subsidiaries and affiliates shall be entitled to a temporary restraining order
and/or injunction from any court of competent jurisdiction enjoining and
restraining any breach or violation by the Employee and/or his affiliates,
employees, associates, partners or agents, either directly or indirectly, of any
or all of the Employee's covenants and agreements contained in Section 6.1
hereof. Such right to a temporary restraining order and/or injunction shall be
cumulative and in addition to whatever other rights or remedies the Company and
its subsidiaries and affiliates may possess hereunder, at law or in equity.
Nothing contained in this Agreement shall be construed to prevent the Company
and its subsidiaries and affiliates from seeking and recovering from the
Employee damages suffered by any or all of them as a result of any breach or
violation by the Employee and/or his affiliates, employees, associates, partners
or agents of any or all of the Employee's covenants and agreements contained in
this Agreement.
6.3 REDUCTION IN SCOPE. In the event that any of the covenants and
agreements of the Employee contained in Section 6.1 hereof shall be held invalid
or unenforceable by a court of competent jurisdiction because of its duration or
geographic area, then, in any such event, such covenant or agreement shall be
reduced by such court in duration or geographical area or both to such extent as
to make it valid and enforceable in the jurisdiction where such court is
located, and in all other respects it shall remain in full force and effect.
VII. MISCELLANEOUS
7.1 PREVAILING PARTY. If any litigation shall arise between the Company
and the Employee based, in whole or in part, upon this Agreement or any or all
of the provisions contained herein, the prevailing party in any such litigation
shall be entitled to recover from the non-prevailing party, and shall be awarded
by a court of competent jurisdiction, any and all reasonable fees and
disbursements of trial and appellate counsel paid, incurred or suffered by such
prevailing party as the result of, arising from, or in connection with, any such
litigation.
7.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without application of any
conflicts of laws principles. The Employee waives any plea of jurisdiction as
not being a resident of, or being located or conducting business in, Palm Beach
County, Florida and agrees that any litigation or action directly or indirectly
connected with this Agreement, shall, at the Company's election, be subject to
binding arbitration administered by the American Arbitration Association in West
Palm Beach, Florida.
7.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Company and the Employee with respect to the subject matter hereof
and supersedes all prior negotiations, agreements, understandings and
arrangements, both oral and written, between the Company and the Employee with
respect to such subject matter. This Agreement may not be modified in any way,
except by a written instrument executed by each of the Company and the Employee.
7.4 NOTICES. Any and all notices required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand, sent by a recognized overnight carrier such as
Federal Express or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, as follows:
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If to the Company: Rexall Sundown, Inc.
851 Broken Sound Parkway, N.W.
Boca Raton, FL 33487
Attn: Richard Werber,
Vice President and General Counsel
If to the Employee: Gerry Holly
851 Broken Sound Parkway, N.W.
Boca Raton, FL 33487
or to such other address as either party may from time to time give written
notice of to the other.
7.5 BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of, and shall be binding upon, each of the Company and the Employee and their
respective heirs, personal representatives, legal representatives, successors
and assigns.
7.6 SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. Except as is otherwise provided in Section 6.3 hereof, if any one or more
of the words, phrases, sentences, clauses or sections contained in this
Agreement shall be declared invalid by a court of competent jurisdiction, then,
in any such event, this Agreement shall be construed as if such invalid word or
words, phrase or phrases, sentence or sentences, clause or clauses, or section
or sections had not been inserted.
7.7 WAIVERS. The waiver by either party of a breach or violation of any
term or provision of this Agreement by the other party shall not operate nor be
construed as a waiver of any subsequent breach or violation of any provision of
this Agreement nor of any other right or remedy.
7.8 SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions of this Agreement.
7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the separate parties hereto in separate counterparts, each
of which shall be deemed to constitute an original and all of which shall be
deemed to be the one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement as of November 3, 1997.
REXALL SUNDOWN, INC.
By: /s/ DEAN DESANTIS
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Dean DeSantis, Senior Vice President
/s/ GERRY HOLLY
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Gerry Holly