Exhibit 10.10

CHANGE OF CONTROL AGREEMENT

 

 

THIS CHANGE OF CONTROL AGREEMENT is dated effective as of July 10, 2014 by and
between THE FEMALE HEALTH COMPANY, a Wisconsin corporation (the "Company"), and
SUSAN OSTROWSKI (the "Executive").

 

RECITALS

 

A. The Board of Directors of the Company (the "Board") has determined that it is
in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company.

B. The Board believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefit arrangements upon a Change of Control which ensure that
the compensation and benefit expectations of the Executive will be satisfied and
which are competitive with those of other corporations.

C. In order to accomplish the objectives of the Board summarized in these
recitals, the Board has caused the Company to enter into this Agreement.

AGREEMENTS

 

In consideration of the recitals and the mutual covenants and agreements set
forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:

 

1. Definitions.  For the sole and exclusive purposes of this Agreement, the
following terms have the following meanings:

(a) Effective Date.  The "Effective Date" means the first date during the Change
of Control Period on which a Change of Control occurs.  Notwithstanding anything
in this Agreement to the contrary, if a Change of Control occurs and Executive's
employment with the Company (or, if applicable, its subsidiary) or this
Agreement was terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment or of this Agreement (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment or purported
termination of this Agreement.

(b) Change of Control Period.  The "Change of Control Period" means the period
commencing on the date of a Change of Control and ending on the third
anniversary thereafter.

(c) Change of Control.  "Change of Control" means 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,

 

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[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 transaction which complies with clauses [a], [b] and [c] of
subsection (iii) of this section 1.

(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 (or by the Nominating and Corporate
Governance Committee of the 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 an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board.

(iii) Approval by the shareholders of the Company of a reorganization, merger or
consolidation (a "Business Combination"), in each case, unless, following such
Business Combination, [a] 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 Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
(or other entity) resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, [b] no Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation (or other entity) resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation (or
other entity) resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
[c] at least a majority of the members of the board of directors of the
corporation (or other governing body) resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination.

(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 (or
other entity), 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 (or other equity interests) and the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors (or other governing body) 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] less than 20% of, respectively, the
then outstanding shares of common stock of such corporation (or other entity)
and the combined voting power of the then outstanding voting securities of such
corporation (or other entity) entitled to vote generally in the election of
directors (or other governing body)is then beneficially owned, directly or
indirectly, by any Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation), except to the extent that such
Person owned substantially the same percent of the Outstanding Company Common
Stock or Outstanding Company Voting Securities prior to the sale or disposition,
and [iii] at least a majority of the members of the board of directors of such
corporation (or other governing body) were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board,
providing for such sale or other disposition of assets of the Company or were
elected, appointed or nominated by the Board.

(d) Disability.  "Disability" means the absence of the Executive from the
Executive's duties with the Company on a full‑time basis for 180 consecutive
business days as a result of incapacity due to mental or

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physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement as to acceptability not to be
withheld unreasonably).

(e) Cause.  "Cause" means:

(i) the willful and continued failure of the Executive to perform substantially
the Executive's duties with the Company or its affiliates (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the Executive by the
Board which specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive's duties and after
the Executive is given a reasonable period of time to rectify or eliminate such
failure, or

(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.

Notwithstanding anything herein to the contrary, no act or failure to act, on
the part of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive's action or omission was in the best interests of the
Company.  Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of a more senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company.  The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three‑quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

(f) Good Reason.  "Good Reason" means:

(i) the assignment to the Executive of any duties inconsistent in any respect
with the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by
section 3(a) of this Agreement, or any other action by the Company which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of
section 3(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

(iii) the Company's requiring the Executive to be based at any office or
location other than as provided in section 3(a)(i)[b] hereof or the Company's
requiring the Executive to travel on Company business to a substantially greater
extent than required immediately prior to the Effective Date;

(iv) any purported termination by the Company of the Executive's employment
otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy section 10(c) of this
Agreement.

(g) Date of Termination.  "Date of Termination" means (i) if the Executive's
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination (as defined in
section 4(d)) or any later date specified therein, as the case may be, (ii) if
the Executive's

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employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date (as defined
in section 4(a)), as the case may be.

2. Employment Period.  The Company agrees to continue the Executive in its
employ (or, if applicable, in the employ of its subsidiary or subsidiaries), and
the Executive agrees to remain in the employ of the Company (or, if applicable,
in the employ of its subsidiary or subsidiaries) subject to the terms and
conditions of this Agreement, for the period commencing on the Effective Date
and ending on the third anniversary of such date (the "Employment
Period").  Notwithstanding the foregoing, if the Incumbent Board approves the
Change of Control transaction before it is consummated and one or more of the
nonemployee directors adopt(s) a resolution providing that this Agreement shall
not become operative in connection with such Change of Control, this Agreement
shall not become operative in connection with that Change of Control.

3. Terms of Employment. 

(a) Position and Duties. 

(i) During the Employment Period, [a] the Executive's position (including
status, offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
those held, exercised or assigned at any time during the 120‑day period
immediately preceding the Effective Date and [b] the Executive's services shall
be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 35 miles from
such location.

(ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company (or, if applicable, its subsidiary or subsidiaries) and,
to the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable efforts to perform
faithfully and efficiently such responsibilities.  During the Employment Period
it shall not be a violation of this Agreement for the Executive to [a] serve on
corporate, civic or charitable boards or committees, [b] deliver lectures,
fulfill speaking engagements or teach at educational institutions and/or
[c] manage personal investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities as an
employee of the Company (or, if applicable, its subsidiaries) in accordance with
this Agreement.  It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company (or, if applicable, its subsidiaries).

(b) Compensation.

(i) Base Salary.  During the Employment Period, the Executive shall receive an
annual base salary ("Annual Base Salary"), at least equal to twelve times the
highest monthly base salary paid or payable, including any base salary which has
been earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the 12‑month period immediately preceding the month in
which the Effective Date occurs.  During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter at least
annually and shall be first increased no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date and
thereafter at least annually by the higher of [a] the average increase
(excluding promotional increases) in base salary awarded to the Executive for
each of the three full fiscal years (annualized in the case of any fiscal year
consisting of less than twelve full months or during which the Executive was
employed for less than twelve months) prior to the Effective Date, and [b] the
percentage increase (excluding promotional increases) in base salary generally
awarded to peer executives of the Company and its affiliated companies for the
year of determination.  Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement.  Annual Base Salary shall not be reduced after any such increase and
the term Annual Base Salary as utilized in this Agreement shall refer to Annual
Base Salary as so increased.  As used in this Agreement, the term

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"affiliated companies" shall include any company controlled by, controlling or
under common control with the Company.

(ii) Annual Bonus.  In addition to Annual Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Period, an annual
bonus (the "Annual Bonus") in cash at least equal to the higher of [a] the
average of the three highest bonuses paid or payable, including any bonus or
portion thereof which has been earned but deferred, to the Executive by the
Company and its affiliated companies in respect of the five fiscal years (or
such shorter period during which the Executive has been employed by the Company)
immediately preceding the fiscal year in which the Effective Date occurs
(annualized for any fiscal year during such period consisting of less than
twelve full months or with respect to which the Executive has been employed by
the Company for less than twelve full months) and [b] the bonus paid or payable
(annualized as described above), including any bonus or portion thereof which
has been earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the most recently completed fiscal year prior to the
Effective Date (such higher amount being referred to as the "Recent Annual
Bonus").  Each such Annual Bonus shall be paid no later than two and one-half
months following the end of the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus.

(iii) Incentive, Savings and Retirement Plans.  During the Employment Period,
the Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies, but in no event
shall such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
120‑day period immediately preceding the Effective Date or if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

(iv) Welfare Benefit Plans.  During the Employment Period, the Executive and/or
the Executive's family, as the case may be, shall be eligible for participation
in and shall receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its affiliated companies
(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120‑day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.

(v) Expenses.  During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices and
procedures of the Company and the affiliated companies in effect for the
Executive at any time during the 120‑day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

(vi) Fringe Benefits.  During the Employment Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of automobile
and payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120‑day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

(vii) Office and Support Staff.  During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal

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secretarial and other assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and its affiliated companies
at any time during the 120‑day period immediately preceding the Effective Date
or, if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.

(viii) Vacation.  During the Employment Period, the Executive shall be entitled
to paid vacation in accordance with the most favorable plans, policies, programs
and practices of the Company and its affiliated companies as in effect for the
Executive at any time during the 120‑day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

4. Termination of Employment. 

(a) Death or Disability.  The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that a Disability of the Executive has occurred
during the Employment Period, it may give to the Executive written notice in
accordance with section 11(b) of this Agreement of its intention to terminate
the Executive's employment.  In such event, the Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that, within the
30 days after such receipt, the Executive shall not have returned to full‑time
performance of the Executive's duties. 

(b) Cause.  The Company may terminate the Executive's employment during the
Employment Period for Cause.

(c) Good Reason.  The Executive's employment may be terminated by the Executive
for Good Reason.  For purposes of this section 4(c), any good faith
determination of "Good Reason" made by the Executive shall be
conclusive.  Anything in this Agreement to the contrary notwithstanding, a
termination by the Executive for any reason during the 180‑day period
immediately following the Effective Date shall be deemed to be a termination for
Good Reason for all purposes of this Agreement.

(d) Notice of Termination.  Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with section 11(b) of this
Agreement.  For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated, and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice).  The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

5. Obligations of the Company upon Termination.

(a) Good Reason; Other Than for Cause, Death or Disability.  If, during the
Employment Period, the Company shall terminate the Executive's employment other
than for Cause, death or Disability or the Executive shall terminate the
Executive's employment for Good Reason:

(i) The Company shall pay to the Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of the following amounts:

[a] the sum of [i] the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid, [ii] the product of (x) the
higher of [A] the Recent Annual Bonus and [B] the Annual Bonus paid or payable,
including any bonus or portion thereof which has been earned but deferred

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(and annualized for any fiscal year consisting of less than 12 full months or
during which the Executive was employed for less than 12 full months), for the
most recently completed fiscal year during the Employment Period, if any (such
higher amount being referred to as the "Highest Annual Bonus") and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365 and
[iii] any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in
clauses [i], [ii] and [iii] shall be hereinafter referred to as the "Accrued
Obligations"); and

[b] The amount equal to the product of [i] three and [ii] the sum of (x) the
Executive's Annual Base Salary and (y) the Highest Annual Bonus.

(ii) For three years after the Executive's Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
sections 3(b)(iii) and (iv) (the "Benefit Plans") of this Agreement had the
Executive's employment not been terminated, in accordance with the most
favorable plans, practices, programs or policies of the Company and its
affiliated companies applicable generally to other peer executives and their
families during the 120‑day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes re-employed with another employer and is eligible to receive
medical or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of
eligibility.  For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the Executive shall be considered to
have remained employed until three years after the Date of Termination and to
have retired on the last day of such period.  Notwithstanding anything herein to
the contrary, the Company shall have no obligation to continue benefits to the
Executive under this section 5(a)(ii) to the extent any such continuation of
benefits [a] is contrary to the terms of the applicable Benefit Plan at the time
of the Effective Date of the Change of Control, [b] would cause a Benefit Plan
or the applicable benefit to lose any tax favored treatment or tax
qualification, or [c] would cause a Benefit Plan to violate any requirement of
the Employee Retirement Income Security Act of 1974, as amended, or any tax
qualification or tax favorable treatment provision of the Code (defined below)
that is intended to apply to the Benefit Plan. To the extent the Company is not
able to continue the benefits to the Executive under this section 5(a)(ii)
because of application of the foregoing sentence, then the Company shall make a
lump-sum payment (within 30 days after the Executive's Date of Termination) to
the Executive equal to the present value of the health, welfare and retirement
benefits unable to be provided hereunder, which is designed to compensate the
Executive for lost health, welfare and retirement benefits. 

(iii) The Company shall, at its sole expense and as requested, provide the
Executive with outplacement services the scope and provider of which shall be
selected by the Executive in the Executive's sole discretion.

(iv) To the extent not theretofore paid or provided, the Company shall timely
pay or provide to the Executive any other amounts or benefits required to be
paid or provided or which the Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").

(b) Death.  If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits.  Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination.  With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this section 5(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120‑day period

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immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.

(c) Disability.  If the Executive's employment is terminated by reason of the
Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other
Benefits.  Accrued Obligations shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination.  With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this section 5(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120‑day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

(d) Cause; Other than for Good Reason.  If the Executive's employment shall be
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (i) the Executive's Annual Base Salary through the Date
of Termination, (ii) the amount of any compensation previously deferred by the
Executive, and (iii) Other Benefits, in each case to the extent theretofore
unpaid.  If the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits. In such case,
all Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.

(e) Compliance with Code section 409A.  To the extent any amount payable under
this Agreement is considered "nonqualified deferred compensation" under Code
section 409A, the Company shall not accelerate or defer the time or schedule of
any payment to be made hereunder and such payments may only be made if the
Executive has previously "separated from service" with the Company as defined
under Code section 409A.  To the extent the Executive is a "specified employee"
as defined under Treasury Regulation section 1.409A-1(i)(1), any payment of
nonqualified deferred compensation following the Executive's separation from
service by reason other than death that is not otherwise exempt from Code
section 409A shall be paid on the first payroll period of the Company that is at
least 6-months after the Executive's separation from service.  It is expressly
contemplated by the parties that this Agreement will conform to, and be
interpreted to comply with, Code section 409A.

6. Nonexclusivity of Rights.  Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan, program, policy
or practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies.  Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.

7. Full Settlement.  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 the Executive or others.  In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.  The Company agrees to
pay as incurred, to the full extent permitted by law, all legal fees and
expenses which the Executive reasonably incurs as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case

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interest on any delayed payment at the applicable federal rate provided for in
section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the
"Code").

8. Certain Additional Payments by the Company. 

(a) Anything in this Agreement to the contrary notwithstanding, if it is
determined that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this section 8) (a "Payment")
would be subject to the excise tax imposed by section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross‑Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross‑Up Payment, the Executive
retains an amount of the Gross‑Up Payment equal to the Excise Tax imposed upon
the Payments.

(b) Subject to the provisions of section 8(c), all determinations required to be
made under this section 8, including whether and when a Gross‑Up Payment is
required and the amount of such Gross‑Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by such certified
public accounting firm as may be designated by the Executive (the "Accounting
Firm") which shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested by
the Company.  If the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder).  All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross‑Up Payment, as determined pursuant to
this section 8, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination.  If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty.  Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.  As a
result of the uncertainty in the application of section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross‑Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder.  If the Company exhausts its remedies pursuant to
section 8(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

(c) The 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 the Gross‑Up Payment.  Such notification shall be given as soon as
practicable but no later than ten business days after the 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.  The Executive
shall not pay such claim prior to the expiration of the 30‑day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due).  If the Company notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company
relating to such claim,

(ii) 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,

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(iii) cooperate with the Company in good faith in order effectively to contest
such claim, and

(iv) permit the Company to participate in any proceedings relating to such
claim; 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 and hold the Executive
harmless, on an after‑tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses.  Without limitation on the
foregoing provisions of this section 8(c), 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 the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the 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; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest‑free basis and shall
indemnify and hold the Executive harmless, on an after‑tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount.  Furthermore, the Company's control of
the contest shall be limited to issues with respect to whether a Gross‑Up
Payment would be payable hereunder and the 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.

(d) If, after the receipt by the Executive of an amount advanced by the Company
pursuant to section 8(c), the Executive becomes entitled to receive any refund
with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of section 8(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto).  If, after the receipt by the Executive of an amount
advanced by the Company pursuant to section 8(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross‑Up Payment required to be paid.

9. Confidential Information.  The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement).  After termination of the Executive's employment with the Company,
the Executive shall not, for a period of three years following the Executive's
termination of employment, without the prior written consent of the Company or
as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

10. Successors.  

(a) This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution.  This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

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(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.  As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

11. Miscellaneous. 

(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of Wisconsin, without reference to principles of conflict of
laws.  The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows: 

If to the Executive, to the Executive's address appearing on the records of the
Company.

 

If to the Company:

 

The Female Health Company

515 North State Street

Suite 2225

Chicago, IL 60654

Attn:  Chief Executive Officer

 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

 

(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such
federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

(e) The Executive's or the Company's failure to insist upon strict compliance
with any provision hereof or any other provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to section 4(c) of this Agreement, shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.

(f) The Executive and the Company acknowledge that, except as may otherwise be
provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and, prior
to the Effective Date, the Executive's employment and this Agreement may be
terminated by either the Executive or the Company at any time prior to the
Effective Date, in which case the Executive shall have no further rights under
this Agreement.  From and after the Effective Date this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof.

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Dated as of the date first above written.

 

 

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

/s/  Susan Ostrowski

7/11/14

 

 

Susan Ostrowski

 

 

 

 

 

 

 

 

THE FEMALE HEALTH COMPANY

 

 

 

 

 

 

BY

/s/  Karen King

 

 

 

Karen King, President and

 

 

 

Chief Executive Officer

 

 

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