Exhibit 10.15
 
Executive Employment Agreement
 

1.     Employment.  Prestige Brands Holdings, Inc. (“Employer”) agrees to employ
Eric S. Klee (“Executive”) and Executive accepts such employment for the period
beginning as of March 31, 2010 and ending upon his termination pursuant to
Section 1(c) hereof (the “Employment Period”) subject only to the approval of
the Prestige Brands Holdings, Inc. Board of Directors (the “Board”).
 
(a) Position and Duties.
 
(i)       During the Employment Period, Executive shall serve as General Counsel
and Secretary of Employer and shall have the normal duties, responsibilities and
authority implied by such position, subject to the power of the Chief Executive
Officer of Employer and the Board to expand or limit such duties,
responsibilities and authority and to override such actions.
 
(ii)      Executive shall report to the Chief Executive Officer of Employer, and
Executive shall devote his best efforts and his full business time and attention
to the business and affairs of Employer and its Subsidiaries (as defined below).
 
(b) Salary, Bonus and Benefits.  During the Employment Period, Employer will pay
Executive a base salary of $250,000 per annum (the “Annual Base Salary”), paid
twice monthly, in accordance with Employer’s normal payroll cycle and
procedures. In addition, in fiscal years 2011 and beyond, the Executive shall be
eligible for and participate in the Annual Incentive Compensation Plan (the
“Annual Bonus”) under which the Executive shall be eligible for an annual Target
Bonus payment of 40% of Annual Base Salary.  Executive shall be eligible to
participate in the Long-Term Equity Incentive Plan of Employer (the “Plan”) and
all equity grants thereunder shall automatically vest upon a Change in Control
(as defined in the Plan). During the Employment Period, Executive will be
entitled to such other benefits approved by the Board and made available to the
senior management of Employer and its Subsidiaries, which shall include vacation
time (four weeks per year), flexible spending account, 401(k) Plan (currently
65% match of up to 6% of salary, subject to IRS cap and periodic potential
adjustment by the Board) as well as medical, dental, vision, life, long term
care and disability insurance.  The Board, on a basis consistent with past
practice, shall review the Annual Base Salary of Executive and may increase the
Annual Base Salary by such amount as the Board, in its sole discretion, shall
deem appropriate.  The term “Annual Base Salary” as used in this Agreement shall
refer to the Annual Base Salary as it may be so increased.
 
(c) Termination.  The Employment Period will continue until (i) Executive’s
death, disability or resignation from employment with Employer and its
Subsidiaries or (ii) Employer and its Subsidiaries decide to terminate
Executive’s employment with or without Cause (as defined below).  If (A)
Executive’s employment is terminated without Cause pursuant to clause (ii) above
 

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or (B) Executive resigns from employment with Employer and its Subsidiaries for
Good Reason, then, subject to Executive’s execution and delivery of a Release,
starting on the sixtieth (60th) day following Executive’s termination of
employment, Employer shall pay to Executive, in equal installments ratably over
twelve (12) months in accordance with the Employer’s normal payroll cycle and
procedures, an aggregate amount equal to (I) his Annual Base Salary, plus (II)
an amount equal to the average Annual Bonus paid or payable to Executive by
Employer for the last three completed fiscal years prior to the date of
termination. In addition, if Executive is entitled on the date of termination to
coverage under the medical and prescription portions of the Welfare Plans, such
coverage shall continue for Executive and Executive’s covered dependents for a
period ending on the first anniversary of the date of termination at the active
employee cost payable by Executive with respect to those costs paid by Executive
prior to the date of termination; provided, that this coverage will count
towards the depletion of any continued health care coverage rights that
Executive and Executive’s dependents may have pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); provided
further, that Executive’s or Executive’s covered dependents’ rights to continued
health care coverage pursuant to this Section 1(c) shall terminate at the time
Executive or Executive’s covered dependents become covered, as described in
COBRA, under another group health plan, and shall also terminate as of the date
Employer ceases to provide coverage to its senior executives generally under any
such Welfare Plan.  Notwithstanding the foregoing, (I) Executive shall not be
entitled to receive any payments or benefits pursuant to this Section 1(c)
unless Executive has executed and delivered to Employer a general release in
form and substance satisfactory to Employer and (II) Executive shall be entitled
to receive such payments and benefits only so long as Executive has not breached
the provisions of Section 2 or Section 3 hereof.  The release described in the
foregoing sentence shall not require Executive to release any claims for any
vested employee benefits, workers compensation benefits covered by insurance or
self-insurance, claims to indemnification to which Executive may be entitled
under Employer’s or its Subsidiaries’ certificate(s) of incorporation, by-laws,
any indemnification agreement or under any of Employer’s or its Subsidiaries’
directors or officers insurance policy(ies) or applicable law, or equity claims
to contribution from Employer or its Subsidiaries or any other Person to which
Executive is entitled as a matter of law in respect of any claim made against
Executive for an alleged act or omission in Executive’s official capacity and
within the scope of Executive’s duties as an officer, director or employee of
Employer or its Subsidiaries. Not later than eighteen (18) months following the
termination of Executive’s employment, Employer and its Subsidiaries for which
the Executive has acted in the capacity of a senior manager, shall sign and
deliver to Executive a release of claims that Employer  and its Subsidiaries
have against Executive; provided that, such release shall not release any claims
that Employer and/or its Subsidiaries commenced prior to the date of the
release(s), any claims relating to matters actively concealed by Executive, any
claims to contribution from Executive to which Employer or its Subsidiaries are
entitled as a matter of law or any claims
 
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arising out of mistaken indemnification by Employer and/or any of its
Subsidiaries.  Except as otherwise provided in this Section 1(c) or in the
Employer’s employee benefit plans or as otherwise required by applicable law,
Executive shall not be entitled to any other salary, compensation or benefits
after termination of Executive’s employment with Employer.
 
2.         Confidential Information.
 
(a) Obligation to Maintain Confidentiality.  Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
during the course of his performance under this Agreement concerning the
business or affairs of Employer, its Subsidiaries and Affiliates (“Confidential
Information”) are the property of Employer, its Subsidiaries and Affiliates, as
applicable, including information concerning acquisition opportunities in or
reasonably related to Employer’s, its Subsidiaries’ and/or Affiliates’ business
or industry of which Executive becomes aware during the Employment Period.
Therefore, Executive agrees that he will not disclose to any unauthorized Person
or use for his own account (for his commercial advantage or otherwise) any
Confidential Information without the Board’s written consent, unless and to the
extent that the Confidential Information, (i) becomes generally known to and
available for use by the public other than as a result of Executive’s acts or
omissions to act, (ii) was known to Executive prior to Executive’s employment
with Employer or any of its Subsidiaries or Affiliates or (iii) is required to
be disclosed pursuant to any applicable law, court order or other governmental
decree.  Executive shall deliver to Employer on the date of termination, or at
any other time Employer may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) relating to the Confidential Information, Work Product (as
defined below) or the business of the Employer, its Subsidiaries and Affiliates
(including, without limitation, all acquisition prospects, lists and contact
information) which he may then possess or have under his control.
 
(b) Ownership of Property.  Executive acknowledges that all discoveries,
concepts, ideas, inventions, innovations, improvements, developments, methods,
processes, programs, designs, analyses, drawings, reports, patent applications,
copyrightable work and mask work (whether or not including any Confidential
Information) and all registrations or applications related thereto, all other
proprietary information and all similar or related information (whether or not
patentable) that relate to Employer’s, its Subsidiaries’ and/or Affiliates’
actual or anticipated business, research and development, or existing or future
products or services and that are conceived, developed, contributed to, made, or
reduced to practice by Executive (either solely or jointly with others) while
employed by the Employer, its Subsidiaries and/or Affiliates (including any of
the foregoing that constitutes any proprietary information or records) (“Work
Product”) belong to the Employer or such Subsidiary or Affiliate and Executive
hereby assigns, and agrees to assign, all of the above Work Product to Employer
or to such Subsidiary or Affiliate.  Any copyrightable work prepared in whole or
in part by Executive in
 
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the course of his work for any of the foregoing entities shall be deemed a “work
made for hire” under the copyright laws, and Employer or such Subsidiary or
Affiliate shall own all rights therein.  To the extent that any such
copyrightable work is not a “work made for hire,” Executive hereby assigns and
agrees to assign to Employer or such Subsidiary or Affiliate all right, title,
and interest, including without limitation, copyright in and to such
copyrightable work.  Executive shall promptly disclose such Work Product and
copyrightable work to the Board and perform all actions reasonably requested by
the Board (whether during or after the Employment Period) to establish and
confirm the Employer’s or such Subsidiary’s or Affiliate’s ownership (including,
without limitation, assignments, consents, powers of attorney, and other
instruments).
 
(c) Third Party Information. Executive understands that Employer, its
Subsidiaries and Affiliates will receive from third parties confidential or
proprietary information (“Third Party Information”), subject to a duty on
Employer’s, its Subsidiaries’ and Affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  During the Employment Period and thereafter, and without in any way
limiting the provisions of Section 2(a) above, Executive will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than personnel and consultants of Employer, its Subsidiaries and Affiliates who
need to know such information in connection with their work for Employer or any
of its Subsidiaries and Affiliates) or use, except in connection with his work
for Employer or any of its Subsidiaries and Affiliates, Third Party Information
unless expressly authorized by a member of the Board (other than himself if
Executive is on the Board) in writing.
 
(d) Use of Information of Prior Employers.  During the Employment Period and
thereafter, Executive will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employers or any other
Person to whom Executive has an obligation of confidentiality, and will not
bring onto the premises of Employer or any of its Subsidiaries or Affiliates any
unpublished documents or any property belonging to any former employer or any
other Person to whom Executive has an obligation of confidentiality unless
consented to in writing by the former employer or Person.  Executive will use in
the performance of his duties only information which is (i) generally known and
used by persons with training and experience comparable to Executive’s and which
is (x) common knowledge in the industry or (y) otherwise legally in the public
domain, (ii) otherwise provided or developed by Employer or any of its
Subsidiaries or Affiliates or (iii) in the case of materials, property or
information belonging to any former employer or other Person to whom Executive
has an obligation of confidentiality, approved for such use in writing by such
former employer or Person.
 
3.          Non-competition and No Solicitation.  Executive acknowledges that
(i) the course of his employment with Employer he will become familiar with
Employer’s, its Subsidiaries’ and Affiliates’ trade secrets and with other
confidential information
 
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concerning the Employer, its Subsidiaries and Affiliates; and (ii) his services
will be of special, unique and extraordinary value to Employer and such
Subsidiaries.  Therefore, Executive agrees that:
 
(a) Non-competition.  During the Employment Period and also during the period
commencing on the date of termination of the Employment Period and ending on the
first anniversary of the date of termination (the “Severance Period”), he shall
not without the express written consent of Employer, anywhere in the United
States, directly or indirectly, own, manage, control, participate in, consult
with, render services for, or in any manner engage in any business (i) which
competes with (a) OTC wart or skin tag treatment products (including, without
limitation, salicylic acid or cryogen-based products), (b) dental devices for
treatment or management of bruxism, (c) OTC sore throat treatment products
(including, without limitation, liquids, lozenges and strips), (d)
inter-proximal devices, (e) powdered and liquid cleansers, (f) pediatric OTC
medicinal and non-medicinal products, (g) OTC eye care products, or (h) any
other business acquired by Employer and its Subsidiaries after the date hereof
which represents 5% or more of the consolidated revenues or EBITDA of Employer
and its Subsidiaries for the trailing 12 months ending on the last day of the
last completed calendar month immediately preceding the date of termination of
the Employment Period, or (ii) in which Employer and/or its Subsidiaries have
conducted discussions or have requested and received information relating to the
acquisition of such business by such Person (x) within one year prior to the
date of termination and (y) during the Severance Period, if any.  Nothing herein
shall prohibit Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation that is publicly traded, so long
as Executive has no active participation in the business of such corporation
 
(b) No solicitation.  During the Employment Period and also during the Severance
Period, Executive shall not directly or indirectly through another entity (i)
induce or attempt to induce any employee of Employer or its Subsidiaries to
leave the employ of Employer or its Subsidiaries, or in any way interfere with
the relationship between Employer or its Subsidiaries and any employee thereof,
(ii) hire any person who was an employee of Employer or its Subsidiaries within
180 days after such person ceased to be an employee of Employer or its
Subsidiaries; provided, however, that such restriction shall not apply for a
particular employee if Employer or its Subsidiaries have provided written
consent to such hire, which consent, in the case of any person who was not a key
employee of Employer or its Subsidiaries shall not be unreasonably withheld,
(iii) induce or attempt to induce any customer, supplier, licensee or other
business relation of Employer or its Subsidiaries to cease doing business with
Employer or its Subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and Employer
or its Subsidiaries or (iv) directly or indirectly acquire or attempt to acquire
an interest in any business relating to the business of Employer or its
Subsidiaries and with which Employer or its Subsidiaries have conducted
discussions or have requested and received information relating to the
 
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acquisition of such business by Employer or its Subsidiaries in the two year
period immediately preceding the date of termination.
 
(c) Enforcement.  If, at the time of enforcement of Section 2 or this Section 3,
a court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law.  Because Executive’s services are
unique and because Executive has access to Confidential Information, the parties
hereto agree that money damages would be an inadequate remedy for any breach of
this Agreement.  Therefore, in the event of a breach or threatened breach of
this Agreement, Employer, its Subsidiaries or their successors or assigns may,
in addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
hereof (without posting a bond or other security).
 
(d) Additional Acknowledgments.  Executive acknowledges that the provisions of
this Section 3 are in consideration of:  (i) employment with the Employer, (ii)
the prospective issuance of securities by Employer pursuant to the Plan and
(iii) additional good and valuable consideration as set forth in this
Agreement.  In addition, Executive agrees and acknowledges that the restrictions
contained in Section 2 and this Section 3 do not preclude Executive from earning
a livelihood, nor do they unreasonably impose limitations on Executive’s ability
to earn a living.  In addition, Executive acknowledges (i) that the business of
Employer and its Subsidiaries will be conducted throughout the United States,
(ii) notwithstanding the state of incorporation or principal office of Employer
or any of its Subsidiaries, or any of their respective executives or employees
(including the Executive), it is expected that Employer and its Subsidiaries
will have business activities and have valuable business relationships within
its industry throughout the United States and (iii) as part of his
responsibilities, Executive will be traveling throughout the United States in
furtherance of Employer’s and/or its Subsidiaries’ business and their
relationships.  Executive agrees and acknowledges that the potential harm to
Employer and its Subsidiaries of the non-enforcement of Section 2 and this
Section 3 outweighs any potential harm to Executive of their enforcement by
injunction or otherwise.  Executive acknowledges that he has carefully read this
Agreement and has given careful consideration to the restraints imposed upon
Executive by this Agreement, and is in full accord as to their necessity for the
reasonable and proper protection of confidential and proprietary information of
Employer and its Subsidiaries now existing or to be developed in the
future.  Executive expressly acknowledges and agrees that each and every
restraint imposed by this Agreement is reasonable with respect to subject
matter, time period and geographical area.
 
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4.     Miscellaneous.  

(a)        Survival.  The provisions of Sections 1(c), 2, 3 and 4 shall survive
the termination of this Agreement.

(b)       Entire Agreement and Merger.  This Agreement sets forth the entire
understanding of the parties and merges and supersedes any prior or
contemporaneous agreements, whether written or oral, between the parties
pertaining to the subject matter hereof.

(c)       Modification.  This Agreement may not be modified or terminated
orally, and no modification or waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party against whom the same is
sought to be enforced.

(d)      Waiver.  Failure of a party to enforce one or more of the provisions of
this Agreement or to require at any time performance of any of the obligations
hereof shall not be construed to be a waiver of such provisions by such party
nor to in any way affect the validity of this Agreement or such party's right
thereafter to enforce any provision of this Agreement, nor to preclude such
party from taking any other action at any time which it would legally be
entitled to take.

(e)       Successors and Assigns.  Neither party shall have the right to assign
this Agreement, or any rights or obligations hereunder, without the consent of
the other party; provided, however, that upon the sale of all or substantially
all of the assets, business and goodwill of Employer to another company, or upon
the merger or consolidation of Employer with another company, this Agreement
shall inure to the benefit of, and be binding upon, both Executive and the
company purchasing such assets, business and goodwill, or surviving such merger
or consolidation, as the case may be, in the same manner and to the same extent
as though such other company were Employer; and provided, further, that Employer
shall have the right to assign this Agreement to any Affiliate or Subsidiary of
Employer.  Subject to the foregoing, this Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their legal representatives,
heirs, successors and permitted assigns.

(f)       Communications.  All notices or other communications required or
permitted hereunder will be in writing and will be deemed given or delivered
when delivered personally, by registered or certified mail or by overnight
courier (fare prepaid) addressed as follows:
 
 

 (i)   To Employer:  Prestige Brands Holdings, Inc.         90 North Broadway  
      Irvington, New York  10533         Attention: Chief Executive Officer  

 
                 
 

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 (ii)   With a copy to: Prestige Brands Holdings, Inc.         90 North Broadway
        Irvington, New York  10533         Attention: Legal Department          
   (iii)   To the Employee: Eric S. Klee         44 Travis Road         Baldwin
Place, New York  10505  

 
   
or to such address as a party hereto may indicate by a notice delivered to the
other party.  Notice will be deemed received the same day when delivered
personally, five (5) days after mailing when sent by registered or certified
mail, and the next business day when delivered by overnight courier.  Any party
hereto may change its address to which all communications and notices may be
sent by addressing notices of such change in the manner provided.
 
(g)      Severability.  If any provision of this Agreement is held to be invalid
or unenforceable by a court of competent jurisdiction, such invalidity or
unenforceability shall not affect the validity and enforceability of the other
provisions of this Agreement and the provision held to be invalid or
unenforceable shall be enforced as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.

(h)      Governing Law.  This Agreement will be governed by, construed and
enforced in accordance with the laws of the State of New York, without giving
effect to its conflicts of law provisions.

(i)       Arbitration.  (a) Except as provided in subsection (b) of this Section
4(i), the following provisions shall apply to disputes between Employer and
Executive arising out of or related to either: (i) this Agreement (including any
claim that any part of this Agreement is invalid, illegal or otherwise void or
voidable), or (ii) the employment relationship that exists between Employer and
Executive:

 
(i)  
The parties shall first use their reasonable best efforts to discuss and
negotiate a resolution of the dispute.

 
(ii)  
If efforts to negotiate a resolution do not succeed within 5 business days after
a written request for negotiation has been made, the dispute shall be resolved
timely and exclusively by final and binding arbitration in New York County or
Westchester County, New York pursuant to the American Arbitration Association
(“AAA”) National Rules for the Resolution of Employment Disputes (the “AAA
Rules”).  Arbitration must be demanded within ten (10) calendar days after the
expiration of the five (5) day period referred to above.  The arbitration
opinion and award shall

 

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  be final and binding on the Employer and the Executive and shall be
enforceable by any court sitting within New York County or Westchester County,
New York.  Employer and Executive shall share equally all costs of arbitration
excepting their own attorney’s fees unless and to the extent ordered by the
arbitrator(s) to pay the attorneys’ fees of the prevailing party.

 

 
(iii)  
The parties recognize that this Section 4(i) means that certain claims will be
reviewed and decided only before an impartial arbitrator or panel of arbitrators
instead of before a court of law and/or a jury, but desire the many benefits of
the arbitration process over court proceedings, including speed of resolution,
lower costs and fees, and more flexible rules of evidence.  The arbitration or
arbitrators duly selected pursuant to the AAA’s Rules shall have the same power
and authority to order any remedy for violation of a statute, regulation, or
ordinance as a court would have; and shall have the same power to order
discovery as a federal district court has under the Federal Rules of Civil
Procedure.

 
(b)
The provisions of this Section 4(i) shall not apply to any action by the
Employer seeking to enforce its rights arising out of or related to the
provisions of Sections 2 and 3 of this Agreement.

  
(c)
This Section 4(i) is intended by the Employer and the Executive to be
enforceable under the Federal Arbitration Act (“FAA”).  Should it be determined
by any court that the FAA does not apply, then this Section 4(i) shall be
enforceable under the applicable arbitration statutes of the State of Delaware.

(j)           No Third-Party Beneficiaries.  Each of the provisions of this
Agreement is for the sole and exclusive benefit of the parties hereto and shall
not be deemed for the benefit of any other person or entity.

(k)           Section 409A of the Internal Revenue Code.  (a) Notwithstanding
any provisions of this Agreement to the contrary, if the Executive is considered
a Specified Executive (as defined below) at termination of employment other than
on account of death or Disability, under such procedures as established by the
Employer in accordance with Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), benefit distributions, other than those that are deemed
“separation pay” under the Treas. Reg. §1.409A-1(b)(9), that are made upon
termination of employment may not commence earlier than six (6) months after the
date of termination.  Therefore, in the event this provision is applicable to
the Executive, any distribution which would otherwise be paid to the Executive
within the first six months following termination shall be accumulated and paid
to the Executive in a lump sum on the first day of the seventh month following
termination.  All subsequent distributions shall be paid in the manner
specified.  
 
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“Specified Executive” means a key employee (as defined in Section 416(i) of the
Code without regard to paragraph 5 thereof) of the Employer if any stock of the
Employer is publicly traded on an established securities market or otherwise.

(b) With respect to the payment of all benefits under the Agreement, including
separation pay and deferred compensation, whether a “termination of employment”
takes place is determined based on the facts and circumstances surrounding the
termination of the Executive’s employment and whether the Employer and the
Executive intended for the Executive to provide significant services for the
Employer following such termination.  A change in the Executive’s employment
status will not be considered a termination of employment if:

 
(i)  
the Executive continues to provide services as an employee of the Employer at an
annual rate that is twenty percent (20%) or more of the services rendered, on
average, during the immediately preceding three full calendar years of
employment (or, if employed less than three years, such lesser period) and the
annual remuneration for such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or, if less, such lesser period), or

 
(ii)  
the Executive continues to provide services to the Employer in a capacity other
than as an employee of the Employer at an annual rate that is fifty percent
(50%) or more of the services rendered, on average, during the immediately
preceding three full calendar years of employment (or if employed less than
three years, such lesser period) and the annual remuneration for such services
is fifty percent (50%) or more of the average annual remuneration earned during
the final three full calendar years of employment (or if less, such lesser
period).

For purposes of applying the provisions of Section 409A of the Code, a reference
to the Employer shall also be deemed a reference to any affiliate thereof within
the contemplation of Sections 414(b) and 414(c) of the Code.  For purposes of
this Agreement, the definition of “termination of employment” shall apply to all
uses of such term, whether capitalized or not.
 
(l)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
 

  PRESTIGE BRANDS HOLDINGS, INC.                
 
By:
/s/ Matthew M. Mannelly       Name: Matthew M. Mannelly       Title: Chief
Executive Officer                     By:   /s/ Eric S. Klee        Name: Eric
S. Klee          

 
          

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                                                  DEFINITIONS
 
“Affiliate” means, with respect to any Person, any other Person who directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person.  The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
“controlled” and “controlling” have meanings correlative thereto.
 
“Cause” is defined as (i) your  willful and continued failure to substantially
perform your duties with Employer (other than any such failure resulting from
your incapacity due to physical or mental illness) that has not been cured
within  10 days after a written demand for substantial performance is delivered
to you by the Board, which demand specifically identifies the manner in which
the Board believes that you have not substantially performed your duties, (ii)
the willful engaging by you in conduct which is demonstrably and materially
injurious to Employer or its Affiliates, monetarily or otherwise, (iii) your
conviction (or plea of nolo contendere) for any felony or any other crime
involving dishonesty, fraud or moral turpitude, (iv) your breach of fiduciary
duty to Employer or its Affiliates, (v) any violation of Employer's policies
relating to compliance with applicable laws which have a material adverse effect
on Employer or its Affiliates or (vi) your breach of any restrictive
covenant.  For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on your part shall be deemed "willful" unless done, or omitted
to be done, by you not in good faith and without reasonable belief that your
act, or failure to act, was in the best interest of  Employer.

“Disability” means the Executive: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees or directors of the Employer.  Medical determination of
Disability may be made by either the Social Security Administration or by the
provider of an accident or health plan covering employees or directors of the
Employer provided that the definition of “disability” applied under such
disability insurance program complies with the requirements of the preceding
sentence.  Upon the request of the plan administrator, the Executive must submit
proof to the plan administrator of the Social Security Administration’s or the
provider’s determination.  For purposes of this Agreement the definition of
“Disability” shall apply to all uses of such term, whether capitalized or not.

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“Good Reason” means that the Executive terminated his employment with the
Employer because, within the twelve (12) month period preceding the Executive’s
termination, one or more of the following conditions arose and the Executive
notified the Employer of such condition within 90 days of its occurrence and the
Employer did not remedy such condition within 30 days:

 
(i)
a material diminution in the Executive’s base salary as in effect on the date
hereof or as the same may be increased from time to time;

 
(ii)  
a material diminution in the Executive’s authority, duties, or responsibilities;

 
(iii)  
the relocation of the Employer’s headquarters outside a thirty-mile radius of
Irvington, New York or the Employer’s requiring the Executive to be based at any
place other than a location within a thirty-mile radius of Irvington, New York,
except for reasonably required travel on the Employer’s business; or

 
(iv)  
any other action or inaction that constitutes a material breach by the Employer
of this Agreement.

 
“Person” means any person or entity, whether an individual, trustee,
corporation, limited liability company, partnership, trust, unincorporated
organization, business association, firm, joint venture, governmental authority
or similar entity.
 
“Subsidiary” of any specified Person shall mean any corporation fifty percent
(50%) or more of the outstanding capital stock of which, or any partnership,
joint venture, limited liability company or other entity fifty percent (50%) or
more of the ownership interests of which, is directly or indirectly owned or
controlled by such specified Person, or any such corporation, partnership, joint
venture, limited liability company, or other entity which may otherwise be
controlled, directly or indirectly, by such Person.