**Exhibit 10.4**
**EMPLOYMENT AGREEMENT**
     THISEMPLOYMENT AGREEMENT (the “Agreement”) is effective as of the 16th day of September,2004, by and between Applica Consumer Products, Inc., a Florida corporation with its principalplace of business at 5980 Miami Lakes Drive, Miami Lakes, Florida (the “Company”), and BrianGuptill, an individual residing in the State of Florida (the “Employee”).
**RECITALS:**
     A. The Employee is currently employed as the Vice President – Engineering of the Company.
     B. The Employee possesses knowledge of the business and affairs of the Company and itssubsidiaries, their policies, methods and personnel.
     C. The Company recognizes that the Employee has contributed to the growth and success of theCompany and its subsidiaries, and desires to assure the Company and its subsidiaries of theEmployee’s continued employment and to compensate him therefor.
     D. The Employee is willing to make his services available to the Company on the terms andconditions hereinafter set forth.
**AGREEMENT**
     Therefore, in consideration of the premises, mutual covenants and agreements of the partiescontained herein, and other good and valuable consideration, the receipt and adequacy of which ishereby acknowledged, the Company and the Employee hereby agree as follows:
     1. Employment. Commencing on the date hereof, the Company shall employ the Employeeand the Employee shall accept employment by the Company, upon the terms and conditions set forth inthis Agreement.
     2. Term. The term of employment (the “Term”) of this Agreement shall begin on thedate hereof and, except as otherwise provided in Sections 7, 8, 9 and 10 below, shall end on June30, 2005. The Term shall automatically renew for successive one-year terms, unless soonerterminated as provided herein or unless either party gives notice at least 30 days prior to the endof the Term that such party does not intend to renew the Term.
     3. Duties. The Employee will have such duties as are assigned or delegated to theEmployee by the Chief Executive Officer and President of the Company, and will initially serve asthe Senior Vice President – Engineering of the Company. The Employee will devote his entirebusiness time, attention, skill, and energy exclusively to the business of the Company and itssubsidiaries, will use his best efforts to promote the success of the Company and its
 

 

subsidiaries,and will cooperate fully with the Board in the advancement of the best interests of the Company andits subsidiaries.
     4. Compensation. During the Term, the Company shall compensate Employee as follows:
          (a) Salary. The Company shall pay Employee an annual salary of $245,024 (the“Annual Base Salary”), to be distributed in equal periodic installments according to theCompany’s customary payroll practices.
          (b) Annual Bonus. The Employee shall be entitled to receive incentivecompensation (the “Incentive Compensation”) for each year during the Term as determined inthe sole discretion of the Board of Directors of the Company (the “Board”) and the Presidentand Chief Executive Officer of the Company.
     5. Expense Reimbursement and Other Benefits.
          (a) Reimbursement of Expenses. During the term of Employee’s employmenthereunder, the Company, upon the submission of proper substantiation in accordance withCompany policy, including copies of all relevant invoices, receipts or other evidencereasonably requested by the Company, by the Employee, shall reimburse the Employee for allreasonable expenses actually paid or incurred by the Employee in the course of and pursuantto the business of the Company.
          (b) Executive Benefits. Employee shall participate in the Company’s GroupHealth and Hospitalization Plan, Group Life Insurance Plan, Group Disability Insurance Planand all other insurances, or insurance plans (collectively, the “Welfare Benefits”).
          (c) Stock Options. During the Term of this Agreement, the Employee shall beeligible to be granted options to acquire shares of the Common Stock of Applica Incorporated(“Applica”) under (and therefore subject to all terms and conditions of) the Applica stockoption plans as then in effect, and all rules and regulations of the Securities and Exchange Commission applicable to stockoption plans. Such options will contain such restrictions as required by the Applica Boardor the applicable committee of such Board charged with administration of the stock optionplan. The number of shares of Common Stock subject to the stock options shall be adjustedfor any subsequent stock splits, stock dividends or similar recapitalizations of Applica’sCommon Stock which results in an increase or decrease of the number of shares of outstandingCommon Stock of Applica. The number of options and terms and conditions of options shall bedetermined in the sole discretion of the Board, or applicable committee thereof, and shallbe based on several factors, including the performance of the Company on a consolidatedbasis.
          (d) Automobile. During the Term, the Company shall provide Employee with anautomobile allowance of $900 monthly.
          (e) Vacation. During the Term, the Employee will be entitled to three weeks’paid vacation for each year. The Employee will also be entitled tothe paid holidays and other
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paid leave set forth in the Company’s policies. Vacation days and holidays during anyfiscal year that are not used by the Employee during such fiscal year may not be carriedover and used in any subsequent fiscal year.
     6. Restrictions.
          (a) Non-Competition. During the Term and for a one year period after thetermination of the Term for any reason, the Employee shall not, directly or indirectly,engage or invest in, own, manage, operate, finance, control, or participate in any manner inthe ownership, management, operation, financing, or control of, be employed by, associatedwith, or in any manner connected with, lend his name or any similar name to, lend his creditto or render services or advice to, purchase product from or distribute on behalf of(whether as an employee, officer, director, partner, agent, security holder, creditor,consultant or otherwise), any person or entity that directly or indirectly (or through anyaffiliated entity) engages in competition with the Company (for this purpose, any businessthat engages in the manufacture or distribution of products similar to those productsmanufactured or distributed by the Company at the time of termination of the Agreement shallbe deemed to be in competition with the Company); provided that such provision shall notapply to the Employee’s ownership of Common Stock of Applica or the acquisition by theEmployee, solely as an investment, of any issuer that is registered under Section 12(b) or12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admittedfor trading on any United States national securities exchange or that are quoted on theNational Association of Securities Dealers Automated Quotations System, or any similarsystem or automated dissemination of quotations of securities prices in common use, so longas the Employee does not control, acquire a controlling interest in or become a member of agroup which exercises direct or indirect control or, more than one percent of any class ofcapital stock of such corporation.
          (b) Nondisclosure. During the Term and after the termination of the Term for anyreason, the Employee shall not at any time divulge, communicate, use to the detriment of theCompany or for the benefit of any other person or persons, or misuse in any way, any ConfidentialInformation (as hereinafter defined) pertaining to the business of the Company. Any ConfidentialInformation or data now or hereafter acquired by the Employee with respect to the business of theCompany shall be deemed a valuable, special and unique asset of the Company that is received by theEmployee in confidence and as a fiduciary, and Employee shall remain a fiduciary to the Companywith respect to all of such information. For purposes of this Agreement, “ConfidentialInformation” means information disclosed to the Employee or known by the Employee as a consequenceof or through his employment by the Company (including information conceived, originated,discovered or developed by the Employee) prior to or after the date hereof, and not generallyknown, about the Company or its business. Confidential Information shall include, but not belimited to, any and all:
     (i) trade secrets and data concerning the past, current and planned business,strategy, operations and affairs of the Company, data, know-how, compositions,processes, designs, sketches, photographs, graphs, drawings, samples, inventions andideas, past, current, and planned research and development, customer lists, clientlists,
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agent lists, current and anticipated customer and client requirements, pricelists, commission information, market studies, business plans, computer software and programs (including object code andsource code), computer software and database technologies, systems, concepts, ideas,designs, methods and information relating directly or indirectly to the Company;
     (ii) information concerning the past, current and planned business, strategy,operations and affairs of the Company, which includes historical financialstatements, financial projections and budgets, historical and projected income,capital spending budgets and plans, the names and backgrounds of key personnel,suppliers, distributors, manufacturers, customers and clients, and any and allinformation relating to contracts and agreements with such persons, howeverdocumented; and
     (iii) notes, analysis, compilations, studies, summaries, and other material prepared byor for the Company containing or based, in whole or in part, on any information included inthe foregoing.
          Notwithstanding the foregoing, nothing herein shall be deemed to restrict the Employeefrom disclosing Confidential Information to the extent required by law; provided, however,that the Employee provides prior notice of such disclosure to the Company and provides theCompany with a reasonable opportunity to prevent, limit or protect such disclosure. None ofthe foregoing obligations and restrictions apply to any Confidential Information that theEmployee demonstrates was or became generally available to the public other than as a resultof disclosure by the Employee.
          (c) Nonsolicitation of Employees and Clients. During the Term and for a oneyear period after the termination of the Term for any reason, the Employee shall not,directly or indirectly, for himself or for any other person, firm, corporation, partnership,association or other entity, other than in connection with the performance of Employee’sduties under this Agreement, (a) employ or attempt to employ or enter into any contractualarrangement with any employee or former employee of the Company, unless such employee orformer employee has not been employed by the Company for a period in excess of six months,(b) call on or solicit any of the actual or targeted prospective customers or clients of theCompany on behalf of any person or entity in connection with any business competitive withthe business of the Company, (c) make known the names and addresses of such customers orclients or any information relating in any manner to the Company’s trade or businessrelationships with such customers or clients (unless the Employee can demonstrate that suchinformation was or became generally available to the public other than as a result of adisclosure by the Employee) and/or (d) interfere with the Company’s relationship with anyperson, including employees, consultants, contractors, suppliers, distributors, clients, orcustomers of Company.
          (d) Ownership of Developments. All copyrights, patents, trade secrets, orother intellectual property rights associated with any ideas, concepts, techniques,inventions, processes, or works of authorship developed or created by Employee during thecourse of performing work for the Company or its customers (collectively, the “WorkProduct”) shall belong exclusively to the Company and shall, to the extent possible, beconsidered a work made
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by the Employee for hire for the Company within the meaning of Title17 of the United States Code. To the extent the Work Product may not be considered workmade by the Employee for hire for the Company, the Employee agrees to assign, andautomatically assign at the time of creation of the Work Product, without any requirement offurther consideration, any right, title, or interest the Employee may have in such WorkProduct. Upon the request of the Company, the Employee shall take such further actions,including execution and delivery of instruments of conveyance, as may be appropriate to givefull and proper effect to such assignment.
          (e) Books and Records. All books, records, and accounts relating in any manner to thecustomers of the Company, whether prepared by the Employee or otherwise coming into the Employee’spossession, shall be the exclusive property of the Company and shall be returned immediately to theCompany on termination of the Employee’s employment hereunder or on the Company’s request at anytime. The Employee will not remove from the Company’s premises any other proprietary orconfidential document, agreement, record, notebook, plan, model, component, device, or computersoftware or code, whether embodied in a disk or in any other form (collectively, the “ProprietaryItems”). The Employee recognizes that, as between the Company and the Employee, all of theProprietary Items, whether or not developed by the Employee, are the exclusive property of theCompany. Upon termination of this Agreement by either party, or upon the request of the Company duringthe term of this Agreement, the Employee will promptly return to the Company all of the ProprietaryItems in the Employee’s possession or subject to the Employee’s control, and the Employee shall notretain any copies or other physical embodiment of any of the Proprietary Items.
          (f) Definition of Company. Solely for purposes of this Section 6, the term“Company” shall mean Applica, along with its current direct and indirect subsidiaries, anyexisting or future subsidiaries of Applica that are operating during the time periodsdescribed herein and any other entities that directly or indirectly, through one or moreintermediaries, control, are controlled by or are under common control with Applica duringthe periods described herein.
          (g) Acknowledgment by Employee. The Employee acknowledges and confirms that (a)the restrictive covenants contained in this Section 6 are reasonably necessary to protectthe legitimate business interests of the Company, and (b) the restrictions contained in thisSection 6 (including without limitation the length of the term of the provisions of thisSection 6) are not overbroad, overlong, or unfair and are not the result of overreaching,duress or coercion of any kind. The Employee further acknowledges and confirms that hisfull, uninhibited and faithful observance of each of the covenants contained in this Section6 will not cause him any undue hardship, financial or otherwise, and that enforcement ofeach of the covenants contained herein will not impair his ability to obtain employmentcommensurate with his abilities and on terms fully acceptable to him or otherwise to obtainincome required for the comfortable support of him and his family and the satisfaction ofthe needs of his creditors. The Employee acknowledges and confirms that his specialknowledge of the business of the Company is such as would cause the Company serious injuryor loss if he were to use such ability and knowledge to the benefit of a competitor or wereto compete with the Company in violation of the terms of this Section 6. The Employeefurther acknowledges that the restrictions contained in this Section 6
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are intended to be,and shall be, for the benefit of and shall be enforceable by, the Company’s successors andassigns.
          (h) Reformation by Court. In the event that a court of competent jurisdictionshall determine that any provision of this Section 6 is invalid or more restrictive thanpermitted under the governing law of such jurisdiction, then only as to enforcement of thisSection 6 within the jurisdiction of such court, such provision shall be interpreted andenforced as if it provided for the maximum restriction permitted under such governing law.
          (i) Extension of Time. If the Employee shall be in violation of any provisionof this Section 6, then each time limitation set forth in this Section 6 shall be extendedfor a period of time equal to the period of time during which such violation or violationsoccur. If the Company seeks injunctive relief from such violation in any court, then thecovenants set forth in this Section 6 shall be extended for a period of time equal to thependency of such proceeding including all appeals by the Employee.
          (j) Survival. The provisions of this Section 6 shall survive the terminationof this Agreement, as applicable.
          (k) Injunctive Relief. The Employee acknowledges that the injury that would besuffered by the Company as a result of a breach of any provision of this Section 6 would beirreparable and that an award of monetary damages for such a breach would be an inadequate remedy.Consequently, the Employee consents to, and the Company will have the right (in addition to anyother rights it may have) to request, the issuance of a temporary restraining order or apreliminary or permanent injunction to prohibit or restrain any breach or threatened breach orotherwise to specifically enforce any provision of this Section 6, or to maintain the status quopending the outcome of any proceeding which may be initiated. The Company will not be obligated topost bond or other security in seeking such relief.
     7. Termination for Cause.
          (a) The Company shall have the right to terminate the Term and the Employee’semployment hereunder for Cause (as defined below). Upon any termination pursuant to thisSection 7, the Company shall pay to the Employee any unpaid Annual Base Salary through theeffective date of termination specified in such notice. The Company shall have no furtherliability hereunder (other than for reimbursement for reasonable business expenses incurredprior to the date of termination, subject, however, to the provisions of Section 5(a)).
          (b) For purposes hereof, the term “Cause” shall mean: (i) the Employee’s failure toperform his duties hereunder; (ii) the Employee’s failure to adhere to any written policy ofthe Company; (iii) the appropriation (or attempted appropriation) of a business opportunityof the Company, including attempting to secure or securing any personal profit in connectionwith any transaction entered into on behalf the Company; (iv) the misappropriation (orattempted misappropriation) of any of the Company’s funds or property; (v) the convictionof, the indictment for (or its procedural equivalent), or the entering of a guilty plea orplea of no contest
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with respect to, a felony, the equivalent thereof, or any other crimewith respect to which imprisonment is a possible punishment; (vi) the commission by theEmployee of any act which shocks, insults and offends the community and ridicules publicmorals and decency, or (vii) any gross or willful improper conduct of the Employee.
     8. Termination Without Cause. At any time the Company shall have the right toterminate the Term and the Employee’s employment hereunder by written notice to the Employee. Uponany termination pursuant to this Section 8 (that is not a termination under any of Sections 7, 9,or 10), the Company shall pay to the Employee a lump sum equal to the sum of (A) the Annual BaseSalary at the date of termination, and (B) the Incentive Compensation for the prior year.Further, any Applica stock option granted to Employee which are vested shall be exercisableimmediately and the Applica stock acquired pursuant to such exercise may be sold by Employeesubject to no restrictions by the Company whatsoever (other than those imposed by federal and statesecurities laws). The Company shall have no further liability hereunder (other than forreimbursement for reasonable business expenses incurred prior to the date of termination, subject,however, to the provisions of Section 5(a)).
     9. Termination by Employee.
          (a) The Employee shall at all times have the right, upon 30 days written notice to theCompany, to terminate the Term and his employment hereunder.
          (b) Upon any termination pursuant to this Section 9 by the Employee without Good Reason(as defined below), the Company shall pay to the Employee any unpaid Annual Base Salarythrough the effective date of termination specified in such notice. The Company shall haveno further liability hereunder (other than for reimbursement for reasonable businessexpenses incurred prior to the date of termination, subject, however, to the provisions ofSection 5(a)).
          (c) Upon any termination pursuant to this Section 9 by the Employee for Good Reason,the Company shall pay to the Employee the same amounts that would have been payable by theCompany to the Employee under Section 8 of this Agreement if the Employee’s employment hadbeen terminated by the Company without Cause. The Company shall have no further liabilityhereunder (other than for reimbursement for reasonable business expenses incurred prior tothe date of termination, subject, however, to the provisions of Section 5(a)).
          (d) For purposes of this Agreement, “Good Reason” shall mean any failure by the Companyto comply with any of the material provisions of Section 4 of this Agreement, other than anisolated, insubstantial and inadvertent failure not occurring in bad faith and which isremedied by the Company promptly after receipt of notice thereof given by the Employee.
     10. Change in Control.
          (a) In the event that (i) a Change in Control (as defined in paragraph (b) of thisSection 10) of Applica shall occur during the Term, and (ii) prior to the earlier of theexpiration of the Term and one year after the date of the Change in Control, the Term and
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Employee’s employment with the Company is terminated by the Company without Cause, asdefined in Section 7(b) or the Employee terminates the Term and his employment for GoodReason, as defined in Section 9(d), the Company shall (1) pay to the Employee any unpaidAnnual Base Salary through the effective date of termination, (2) pay to the Employee theIncentive Compensation, if any, not yet paid to the Employee for any year prior to suchtermination, at such time as the Incentive Compensation otherwise would have been payable tothe Employee, (3) at the time of such termination, pay to the Employee a lump sum equal tothe sum of (A) the Annual Base Salary at the date of termination multiplied by 1.5, and (B)the Incentive Compensation for the prior year multiplied by 1.5. Further, any Company stockoption granted to Employee shall be exercisable immediately and the Company stock acquiredpursuant to such exercise may be sold by Employee subject to no restrictions by Companywhatsoever (other than those imposed by federal and state securities laws). The Companyshall have no further liability hereunder (other than for reimbursement for reasonablebusiness expenses incurred prior to the date of termination, subject, however, to theprovisions of Section 5(a)).
          (b) For purposes of this Agreement, the term “Change in Control” shall mean:
          (i) Approval by the shareholders of Applica of (x) a reorganization, merger,consolidation or other form of corporate transaction or series of transactions, ineach case, with respect to which persons who were the shareholders of Applicaimmediately prior to such reorganization, merger or consolidation or othertransaction do not, immediately thereafter, own more than 50% of the combined votingpower entitled to vote generally in the election of directors of the reorganized,merged or consolidated company’s then outstanding voting securities, or (y) aliquidation or dissolution of Applica or (z) the sale of all or substantially allof the assets of Applica (unless such reorganization, merger, consolidation or othercorporate transaction, liquidation, dissolution or sale is subsequently abandoned);or
          (ii) Individuals who, as of the date hereof, constitute the Board of Directorsof Applica (as of the date hereof the “Incumbent Board”) cease for any reason toconstitute at least a majority of the Board, provided that any person becoming adirector subsequent to the date hereof whose election, or nomination for election byApplica’s shareholders, was approved by a vote of at least a majority of thedirectors then comprising the Incumbent Board (other than an election or nominationof an individual whose initial assumption of office is in connection with an actualor threatened election contest relating to the election of the Directors of Applica,as such terms are used in Rule 14a-11 of Regulation 14A promulgated under theSecurities Exchange Act) shall be, for purposes of this Agreement, considered asthough such person were a member of the Incumbent Board; or
          (iii) The acquisition (other than from Applica) by any person, entity or“group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the SecuritiesExchange Act (excluding, for this purpose, Applica or its subsidiaries, or anyemployee benefit plan of Applica or its subsidiaries) which acquires beneficialownership (within the meaning of Rule 13d-3 promulgated under the SecuritiesExchange Act), of 20% or more of either
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the then outstanding shares of Applica’sCommon Stock or the combined voting power of the Applica’s then outstanding votingsecurities entitled to vote generally in the election of directors.
          (c) The payments made pursuant to paragraph (a) above shall be in lieu of any and allcompensation due to Employee for the years that would otherwise be remaining in the Term.Upon receipt of said lump sum payment, this Agreement and all rights and duties of theparties shall be terminated, except as follows. In consideration for such lump sum paymentand for the right to terminate under the conditions set forth above, Employee agrees toconsult with the Company (or its successors), and its officers if requested to do so for aperiod of at least two years from the date of such termination. However, Employee shall be required to devote only such part of his time to such services asEmployee believes reasonable in Employee’s sole discretion, and the time and date suchservices are offered shall be determined by Employee so long as that time and date is withina reasonable period of time after the request. It is expressly agreed that the Company’srights to avail itself of the advice and consultation services of Employee shall at alltimes be exercised in a reasonable manner, that adequate notice shall be given to Employeein such events, and that non-compliance with any such request by Employee for good reason,including, but not limited to, ill health or prior commitments, shall not constitute abreach or violation of this Agreement. Employee agrees that, except for reimbursement ofall reasonable expenses incurred by him with respect to such consultation and advisoryservices, payable as such consultation and advisory services are rendered, he shall not beentitled to any further compensation. It is understood that in furnishing any advisory andconsulting services provided herein, Employee shall not be an employee of the Company butshall act in the capacity of independent contractor.
     11. Waivers. It is understood that either party may waive the strict performance ofany covenant or agreement made herein; however, any waiver made by a party hereto must be duly madein writing in order to be considered a waiver, and the waiver of one covenant or agreement shallnot be considered a waiver of any other covenant or agreement unless specifically in writing asaforementioned.
     12. Savings Provisions. The invalidity, in whole or in part, of any covenant orrestriction, or any section, subsection, sentence, clause, phrase or word, or other provisions ofthis Agreement, as the same may be amended from time to time shall not affect the validity of theremaining portions thereof.
     13. Governing Law. This Agreement shall be construed in accordance with and governedby the laws of the State of Florida without giving effect to its choice of law provision.
     14. Notices. If either party desires to give notice to the other in connection withany of the terms and provisions of this Agreement, said notice must be in writing and shall bedeemed given when (a) delivered by hand (with written confirmation of receipt), (b) sent byfacsimile (with written confirmation of receipt), provided that a copy is mailed by registeredmail, return receipt requested, or (c) when received by the addressee, if sent by a nationallyrecognized overnight delivery service (receipt requested), in each case addressed to the party for
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whom it is intended as follows (or such other addresses as either party may designated by notice tothe other party):   If to the Company: Applica Consumer Products, Inc. 5980 Miami Lakes Drive Miami Lakes, Florida 33014 Attn: Corporate Secretary   If to Employee: At the most recent home address of Employee on theofficial records of the Company
     15. Default. In the event either party defaults in the performance of its obligationsunder this Agreement, the non-defaulting party may, after giving 30 days notice to the defaultingparty to provide a reasonable opportunity to cure such default, proceed to protect its rights bysuit in equity, action at law, or, where specifically provided for herein, by arbitration, toenforce performance under this Agreement or to recover damages for breach thereof, including allcosts and attorneys’ fees, whether settled out of court, arbitrated, or tried (at both trial andappellate levels).
     16. Section 162(m) Limits.
     Notwithstanding any other provision of this Agreement, if and to the extent that anyremuneration payable by the Company to the Employee for any year would exceed the maximum amount ofsuch remuneration that the Company may deduct for that year by reason of Section 162(m) of theCode, payment of the portion of the remuneration for that year that would not be so deductibleunder Section 162(m) shall, in the sole discretion of the Board, be deferred so that it shallbecome payable at such time or times as the Board reasonably determines that it would be deductible by the Company under Section 162(m), with interest at the “short-termapplicable federal rate” as such term is defined in Section 1274(d) of the Code.
     17. No Third Party Beneficiary. Nothing expressed or implied in this Agreement isintended, or shall be construed, to confer upon or give any person, other than the Company, theparties hereto and their respective heirs, personal representatives, legal representatives,successors and assigns, any rights or remedies under or by reason of this Agreement.
     18. Waiver of Jury Trial. ALL PARTIES KNOWINGLY WAIVE THEIR RIGHTS TO REQUEST A TRIALBY JURY IN ANY LITIGATION IN ANY COURT OF LAW, TRIBUNAL OR LEGAL PROCEEDING INVOLVING THE PARTIESHERETO OR ANY DISPUTES ARISING OUT OF OR RELATED TO THIS AGREEMENT.
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     **IN WITNESS WHEREOF**, the Company, by its appropriate officer, signed this Agreement andEmployee has signed this Agreement, as of the day and year first above written.      **APPLICA CONSUMER PRODUCTS, INC.**       By:  /s/ David D. Warren     Name: David D. Warren  Its: Senior VicePresident - HR       **EMPLOYEE**       /s/ Brian Guptill    Brian Guptill  
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