Document:

exv10w1

 

Exhibit 10.1

NASHUA CORPORATION

MANAGEMENT INCENTIVE PLAN

	1.	 	Purpose
	 
	 	 	The purposes of the Management Incentive Plan (“MIP” or the “Plan”) for Nashua Corporation
(the “Company”) are as follows:

	 	(a)	 	to attract and retain the best possible management talent;
	 
	 	(b)	 	to permit management of the Company to share in its profits;
	 
	 	(c)	 	to promote the success of the Company; and
	 
	 	(d)	 	to link management rewards closely to individual and Company performance.

	2.	 	Definitions

	 	(a)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(b)	 	“Committee” means the Leadership and Compensation Committee of the
Company’s Board of Directors.
	 
	 	(c)	 	“Company” means Nashua Corporation.
	 
	 	(d)	 	“IPO” means individual management performance objectives which are specific
performance objectives for Participants approved as follows:

	 	 	 
	Approved By	 	Participant
	Compensation Committee

	 	President and CEO
	 
	 	 
	President and CEO

	 	Chief Financial Officer and other
Corporate Vice Presidents
	 
	 	 
	President and CEO, and
Manager who directly or
indirectly supervises the Participant

	 	All other executives

	 	 	 	Up to 20% of the Participant’s management incentive payment may be based upon
successful achievement of the Individual Performance Objectives.
	 
	 	(e)	 	“MIP” means the Management Incentive Plan of the Company.
	 
	 	(f)	 	“Participant” means any employee of the Company or any of its subsidiaries
who has been designated as a Participant in the Plan in accordance with Article 3.

 

 

	 	(g)	 	“Performance Objectives” means one or more pre-established performance
objectives, including PTPB and IPO.
	 
	 	(h)	 	“Plan” means the Management Incentive Plan for Nashua Corporation.
	 
	 	(i)	 	“Plan Year” means the fiscal year of the Company.
	 
	 	(j)	 	“PTPB” means pre-tax, pre-bonus profit from the Company for the Company’s
fiscal year as calculated according to generally accepted accounting practices (GAAP).
	 
	 	(k)	 	“TPO” means targeted performance objectives which are specifically targeted
to financial targets for areas of the Participant’s influence such as product line sales,
gross margins or net margins and/or specific cost categories or costs related to certain
cost centers. Up to 30% of a Participant’s management incentive payment may be based on
the successful achievement of the targeted objectives.
	 
	 	(l)	 	“Total Company Operating Performance” means the financial performance of
all of Nashua Corporation and its divisions during the Company’s fiscal year.

	3.	 	Participation
	 
	 	 	Participation in the Plan is limited to key managers of the Company who have been recommended
as Participants by the Officers of the Company and approved by the Committee. Participants
may include, but are not limited to: Corporate Staff Officers of the Company, non-officer
General Managers and key functional Directors and Managers. The recommendation list is
reviewed and approved by the Committee at the beginning of each Plan Year. Any changes to the
list of Participants during any Plan Year will be recommended by the Chief Executive Officer
and subject to approval by the Committee.
	 
	4.	 	Annual Bonus Opportunity
	 
	 	 	Participants may have the opportunity to earn an annual variable bonus.

	 	(a)	 	Target Bonus
	 
	 	 	 	The Target Bonus for each Participant is established each Plan Year. Bonuses will be
capped based on award level at a maximum of 200% of salary at 130% of annual pre-tax
budget.
	 
	 	(b)	 	Bonus Payout

	 	(i)	 	A Participant’s annual bonus payout is based on the overall
Company’s performance and pre-established Performance Objectives.
	 
	 	(ii)	 	Within the first 90 days of the beginning of each Plan Year,
Performance Objectives for Participants will be established. Specific
Performance Objectives will vary based

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	 	 	 	on the specific business strategy of the Company and the business unit, and may
include such measures as: PTPB, IPO and TPO.
	 
	 	(iii)	 	Bonus payouts will be determined based on the following schedule:

	 	•	 	Bonus at target. The bonus award of an individual will meet the
“target” level ranging from 10% to 60% of base salary, if the Company’s
budgeted pre-tax, pre-bonus income is achieved.
	 
	 	•	 	Bonus below target. In the event of below budget performance, the
threshold for a payout is 80% of budgeted consolidated pre-tax, pre-bonus
income. In the event that corporate performance is 79% or lower than
budgeted pre-tax, pre-bonus income, no employee will receive a bonus. For
pre-tax income performance between 80% and 100%, bonuses will be paid at
50% and 100%, respectively, with interpolation in between.
	 
	 	•	 	Bonus above target. In the event of above budgeted performance, a
higher percentage of incremental pre-tax, pre-bonus income will fund the
bonus award pool based on award level. Bonus will not exceed 200% of
salary and maximum bonus is achieved for 130% of budgeted pre-tax,
pre-bonus income.

	 	(iv)	 	Bonus payouts will be determined based on the formula used to
measure the Company’s results for each Participant, and calculated in accordance
with the Performance Objectives approved by the Committee.
	 
	 	(v)	 	The Committee may, in its sole discretion, make required
adjustments to the Plan.
	 
	 	(vi)	 	No bonuses for a Plan Year shall be paid to Participant unless the
Minimum Thresholds set by the Committee for such Plan Year is met.

	 	(c)	 	Bonus Determination in Cases of Leave of Absence

	 	(i)	 	If a Participant is on a Company approved leave of absence
(including, without limitation, leaves of absence covered by the Family and
Medical Leave Act) for less than three months during the Plan Year, then the
employee will continue to participate in this Plan for that Plan Year; provided
that the Committee may, in its sole discretion, decrease the potential bonus
under this Plan on a prorated basis.
	 
	 	(ii)	 	If a Participant is on a non-Company approved leave of absence or
is on a Company approved leave of absence for more than three months, then the
Participant is not eligible to receive awards under this Plan, unless approved by
the Committee.

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	 	(d)	 	Bonus Determination in Cases of Termination

	 	(i)	 	Participants whose employment terminated prior to the end of the
Plan Year for any reasons other than death, disability, or retirement are not
eligible to receive awards under this Plan, unless approved by the Committee.
	 
	 	(ii)	 	Participants whose employment terminates after the end of the Plan
Year, but before payment of the award, are not eligible to receive the awards
under this Plan unless approved by the Committee.

	5.	 	Timing of Payment of Bonuses

	 	(a)	 	Current Payment
	 
	 	 	 	Except as provided in Section 5(b), the bonus allocated by the Committee for each
Participant shall be paid in cash and in full as soon as may be conveniently possible
after such allocation by the Board and certification by the Committee of the Company’s
achievement of the relevant Performance Objectives, but not later than two and
one-half months from the last day of the Plan Year to which such bonus relates.
	 
	 	(b)	 	Deferral of Bonus
	 
	 	 	 	Any Participant may elect to defer receipt of all or part of such bonus in accordance
with any deferred compensation plans which may be offered by the Company in the
future.

	6.	 	Plan Administration

	 	(a)	 	General Administration
	 
	 	 	 	The Committee will administer the Plan, and will interpret the provisions of the Plan.
The interpretation and application of these terms by the Committee shall be binding
and conclusive. The Committee’s authority will include, but is not limited to:

	 	(i)	 	Selecting of Participants
	 
	 	(ii)	 	Establishing and modifying Performance Objectives, and weighting
Performance Objectives.
	 
	 	(iii)	 	The determination of performance results and bonus awards.
	 
	 	(iv)	 	Exceptions to the provisions of the Plan made in good faith and for
the benefit of the Company.

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	 	(b)	 	Adjustments for Extraordinary Events
	 
	 	 	 	If an event occurs during a Plan Year that materially influences the performance
measures of the Company and is deemed by the Committee to be extraordinary and out of
the control of management, the Committee may, in its sole discretion, increase or
decrease the Performance Objectives used to determine the annual bonus payout. Events
warranting such action may include, but are not limited to, changes in accounting, tax
or regulatory rulings and significant changes in economic conditions resulting in
windfall gains or losses.
	 
	 	(c)	 	Amendment, Suspension, or Termination of the Plan
	 
	 	 	 	The Committee may amend, suspend or terminate the Plan, in whole or in part, at any
time, if, in the sole judgment of the Committee, such action is in the best interests
of the Company. Notwithstanding the above, any such amendment, suspension or
termination must be prospective in that it may not deprive Participants of that which
they otherwise would have received under the Plan for the Plan Year had the Plan not
been amended, suspended or terminated. The Company reserves the right to amend,
modify, or repeal the Plan at any time without prior written notice to Participants.

	7.	 	Miscellaneous Provisions

	 	(a)	 	Effective Date
	 
	 	 	 	The effective date of the Plan is January 1, 2007.
	 
	 	(b)	 	Titles
	 
	 	 	 	Section and Article titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.
	 
	 	(c)	 	Employment Not Guaranteed
	 
	 	 	 	Nothing contained in the Plan nor any action taken in the administration of the Plan
shall be construed as a contract of employment or as giving a Participant any right to
be retained in the service of the Company.
	 
	 	(d)	 	Validity
	 
	 	 	 	In the event that any provision of the Plan is held to be invalid, void or
unenforceable, the same shall not effect, in any respect whatsoever, the validity of
any other provision of the Plan.

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	 	(e)	 	Withholding Tax
	 
	 	 	 	The Company shall withhold from all benefits due under the Plan an amount sufficient
to satisfy any federal, state and local tax withholding requirements.
	 
	 	(f)	 	Applicable Law
	 
	 	 	 	The Plan shall be governed in accordance with the laws of the State of New Hampshire.

Page 6Exhibit 10.1
	 

	 
		

	 

	 
		CASTLE BRANDS INC.
	 

	 
		

	 

	 
		SEPARATION AGREEMENT
	 

	 
		

	 

	 
		SEPARATION AGREEMENT (“Agreement”), dated as of March
		20, 2007, between Castle Brands Inc. (“Castle Brands”) (Castle
		Brands, together with all of its subsidiaries, parents, and any other
		affiliates shall herein be referred to as the “Company”), and
		Herbert Roberts (“Employee”) (the Company and Employee shall
		collectively be referred to as the “Parties”).
	 

	 
		

	 

	 
		RECITALS

	 

	 
		A.
	 

	 
		WHEREAS, the Parties had entered into that certain Employment Agreement,
		dated December 5, 2006 (the “Employment Agreement”).
	 

	 
		B.
	 

	 
		WHEREAS, the Employment Agreement set forth, amongst other provisions,
		Employee’s compensation and termination provisions.
	 

	 
		C.
	 

	 
		WHEREAS the Parties desire to terminate the Employment Agreement on the
		terms and conditions set forth below.
	 

	 
		NOW, THEREFORE, in consideration of the premises and of the mutual
		covenants contained herein, the Parties hereto do hereby agree as follows:
	 

	 
		1.
	 

	 
		Termination of Employment.  Except as otherwise provided in
		this Section 1, Employee’s employment with the Company shall terminate as
		of March 15, 2007.  The last day of Employee’s employment as provided
		in this Section 1 shall be deemed the “Termination Date.”
		   
	 

	 
		

	 

	 
		2.
	 

	 
		Duties of Employee; Base Salary and Benefits; Other Business
		Activities.
	 

	 
		

	 

	 
		(a)
	 

	 
		Duties of Employee. As of the Termination Date, Employee shall
		cease to be Chief Financial Officer, Treasurer and Principal Financial Officer
		or otherwise act as an employee of the Company.  Beginning on the
		Termination Date, as and to the extent requested by the Company from time to
		time, Employee shall perform the following duties: (a) act as a historical and
		knowledge resource to Company employees in connection with matters related to
		the Company, including financial matters, as requested by the Company, (b)
		train and transition his responsibilities to other Company employees, and (c)
		other duties related to the duties set forth in (a) and (b) above. Employee
		shall vacate the Company’s offices as of the Termination Date and perform
		the duties described herein generally from an office he shall establish.
		 In connection with such duties, the Company will have no obligation or
		liability in respect of such office.
	 

	 
		

	 

	 
		(b)
	 

	 
		Base Salary and Benefits Through Termination Date. Employee shall
		continue to be paid a base salary at the annual rate of $261,000 up to and
		until March 15, 2007.  As of the Termination
	 

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		Date, Employee shall cease to be eligible for benefits under any Company
		benefits plan or program or otherwise, except (i) as expressly provided in this
		Agreement, or (ii) as otherwise required under (A) the terms of a Company
		benefits plan or program or (B) applicable law.
	 

	 
		

	 

	 
		(c)
	 

	 
		Other Business Activities. Employee shall be permitted to engage
		in other business activities (including employment) during his remaining period
		of employment with the Company, provided that such activities do not otherwise
		violate the terms of this Agreement or the Employment Agreement or impair his
		ability to perform his duties hereunder or comply with other obligations
		Employee may have to the Company.
	 

	 
		

	 

	 
		3.
	 

	 
		Consideration. Although, in the absence of this Agreement, the
		Company is not required to provide any of the following consideration to
		Employee, the Company, in exchange for promises made herein by Employee, shall
		provide Employee with the following benefits:
	 

	 
		

	 

	 
		(a)
	 

	 
		Severance Payment. The Company agrees to pay Employee an aggregate
		severance payment of $100,000.  Such payment shall be made in four
		installments as follows:
	 

	 
		

	 

	 
		$25,000 payable on March 31, 2007
	 

	 
		$25,000 payable on April 30, 2007
	 

	 
		$25,000 payable on May 31, 2007
	 

	 
		$25,000 payable on June 30, 2007
	 

	 
		

	 

	 
		(b)
	 

	 
		COBRA. The Company agrees that it will instruct its applicable employees
		and/or agents not to challenge Employee’s right to continue welfare
		benefits coverage under the Consolidated Omnibus Budget Reconciliation Act of
		1985, as amended (“COBRA”) based upon the circumstances that
		led to the modification of Employee’s duties as provided herein. The
		Company reserves the right to challenge or deny continuing coverage under COBRA
		for other reasons, as appropriate. Provided that Employee timely elects COBRA
		continuation coverage (and the Company has no reasonable grounds to challenge
		or deny such coverage) or employee converts to a personal plan, the Company
		will pay through the COBRA Payment End Date (as defined below) for the monthly
		premiums for the level of coverage Employee maintained on the Termination Date
		(the “Monthly Premiums”).  In no event (including by reasons of
		Employee’s election to convert to a personal plan) shall the Company be
		required to pay any amount in excess of the Monthly Premiums.  The
		“COBRA Payment End Date” shall be the earlier of (i) 12 months
		following the Termination Date and (ii) the date Employee becomes employed by a
		third party and is eligible for coverage, and such coverage may actually
		commence, under the group benefits plan of the new employer. If during the
		period Employee is receiving this benefit, Employee obtains new employment and
		becomes eligible for coverage under the group benefits plan of the new
		employer, Employee must notify the Company in writing
	 

	 
		
 

	 

	 
		2
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		of such new employment and the date on which Employee will first be
		eligible for coverage under the group benefits plan of such new employer so
		that the Company receives such notification prior to the commencement of such
		employment.
	 

	 
		

	 

	 
		(c)
	 

	 
		Taxes and Withholdings. The payments and benefits to be made
		pursuant to this Section 3 and in Section 2 shall be subject to all applicable
		withholdings for federal, state and local income taxes, Social Security, and
		all other customary withholdings. The Company makes no representations
		regarding the tax implications of the compensation, payments and benefits to be
		paid to Employee under this Agreement.    
	 

	 
		

	 

	 
		4.
	 

	 
		Non-Admission of Liability. The Company is providing Employee with
		the consideration described in this Agreement in exchange for Employee’s
		agreement to undertake certain obligations, as described herein. The fact that
		the Company is offering this consideration to Employee should not be understood
		as an admission that the Company has violated Employee’s rights (or the
		rights of anyone else), any statute or law, or breached any duty or obligation
		in any manner whatsoever.  The fact that Employee is accepting such
		consideration should not be understood as an admission that Employee has
		violated any statute or law, or breached any duty or obligation in any manner
		whatsoever.
	 

	 
		

	 

	 
		5.
	 

	 
		Release and other Promises. The intent of this section is to
		secure Employee’s release of claims against the Company or anyone
		connected with it for any harm Employee may claim to have suffered for any
		period prior to his execution of this Agreement in connection with
		Employee’s employment or the termination of Employee’s employment, in
		return for the benefits described in this Agreement. Accordingly, in exchange
		for the consideration described above, Employee hereby agrees as follows:
	 

	 
		

	 

	 
		(a)
	 

	 
		Release. Employee, with the intention of binding himself and his
		heirs, beneficiaries, trustees, administrators, executives, assigns and legal
		representatives (collectively, the “Releasors”), hereby
		irrevocably and unconditionally releases, remises, and forever discharges the
		Company and all of its present, former and/or future officers, employees,
		directors, stockholders, agents, representatives, partners, administrators,
		attorneys, insurers, fiduciaries, subsidiaries, divisions, affiliates,
		predecessors, successors and assigns, in their individual and/or representative
		capacities (hereinafter collectively referred to as the “Released
		Parties”), from any and all liabilities, causes of action, suits,
		agreements, promises, damages, disputes, controversies, contentions,
		grievances, differences, judgments, debts, claims and demands of any kind
		whatsoever, both in law and in equity, known or unknown, fixed or contingent,
		and whether asserted or unasserted (“Claims”), including,
		without limitation, (i) any and all rights and claims arising out of or in
		connection with Employee’s employment by Castle Brands Inc., the terms and
		conditions of such employment, or the termination of Employee’s
		employment; (ii) any and all contract claims, claims for bonuses, claims for
		severance allowances, or claims of constructive discharge
	 

	 
		
 

	 

	 
		3
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		or entitlements; (iii) fraud claims, defamation, disparagement and other
		personal injury and tort claims; and (iv) claims under any federal, state, or
		municipal employee benefit, wage payment, discrimination, or retaliation, or
		fair employment practices law (e.g., on the basis of sex, religion, age, race,
		or disability or any other legally protected characteristic), statute, or
		regulation, and claims for costs and expenses (including but not limited to
		experts’ fees and attorneys’ fees) with respect thereto.  This
		General Release includes, without limitation, any and all rights and claims
		under the Title VII of the Civil Rights Act of 1964, as amended, the Employee
		Retirement Income Security Act of 1974, the Americans with Disabilities Act of
		1990, the U.S.  Pregnancy Discrimination Act, the U.S.  Fair Labor
		Standards Act, the U.S.  Equal Pay Act, The Workers Adjustment and
		Notification Act, the Equal Pay Act of 1963, the Age Discrimination in
		Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the
		Civil Rights Act of 1866, the Civil Rights Act of 1991, the New York
		Conscientious Employee Protection Act, the New York Equal Pay Act, the New York
		Smokers’ Rights Law, the New York Genetic Privacy Act, and the New York
		Constitution, in each case as such laws have been or may be amended.  Such
		released Claims also include, without limitation, any and all Claims under
		state contract or tort law; any and all Claims based on the design or
		administration of any Company employee benefit plan or program arising under
		any Company policy, procedure, or employee benefit plan; any and all Claims for
		wages, commissions, bonuses, continued employment with the Company in any
		position, and compensatory, punitive or liquidated damages; and any and all
		Claims for attorney’s fees and costs. Notwithstanding the foregoing,
		nothing contained herein shall interfere with or waive Employee’s right to
		enforce this Agreement or any other agreement between the Parties to the extent
		expressly preserved by this Agreement, or the Company’s right to enforce
		any of Employee’s obligations contained in this Agreement or any other
		agreement between the Parties to the extent expressly preserved by this
		Agreement.  In the event that any Released Party other than the Company
		asserts a claim against Employee involving any acts, omissions or facts that
		occurred during any period prior to Employee’s signing of this Agreement,
		the said Released Party shall not have the benefit of the foregoing release by
		Employee, and Employee shall be free to assert any claims or counterclaims
		against said Released Party as if this Agreement had not been signed.
	 

	 
		

	 

	 
		(b)
	 

	 
		No Prior Lawsuits. Employee hereby represents that Employee has
		not filed any Claim against the Released Parties relating to Employee’s
		employment and/or separation from employment with the Company, or otherwise
		involving facts which occurred in any period prior to Employee’s signing
		of this Agreement. Employee hereby further represents and warrants that
		Employee has not assigned or transferred, or purported to have assigned or
		transferred to any entity or person, any claim or cause of action released in
		this Section 5(b), or any amount of money related hereto.  Employer
		reciprocally represents that it has no knowledge of any material claims or
		investigations which could materially impact Employee’s entering into this
		Agreement on the terms hereof.
	 

	 
		
 

	 

	 
		4
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		

	 

	 
		(c)
	 

	 
		Continued Obligations Under the Employment Agreement. Employee
		agrees that it is a material condition of this Agreement that Employee comply
		with Paragraphs 7, 9, 10 and 22 of the Employment Agreement, which are
		incorporated by reference herein.
	 

	 
		

	 

	 
		(d)
	 

	 
		Cooperation with the Company. Employee shall fully cooperate and
		assist the Company with the following matters to the extent the Company may,
		from time to time, so request: (i) effecting a transition of Employee’s
		responsibilities and to ensure that the Company is aware of all matters being
		handled by Employee, and (ii) cooperation and assistance with any
		investigation, litigation, or other dispute in which the Company may become
		involved which may relate to the Employee or the performance of his duties with
		the Company. Such cooperation and assistance shall include providing
		information, documents, etc., submitting to interviews with the Company’s
		counsel and accountants, submitting to depositions, providing testimony and
		general cooperation to assist the Company in defending its position with
		reference to any matter. Employee will be reimbursed in accordance with the
		Company’s expense reimbursement policy for any reasonable out-of-pocket
		expense Employee may incur in fulfilling Employee’s obligations under this
		paragraph. Such obligation shall be in addition to, and not in lieu of,
		Employee’s obligation under Paragraph 10 of the Employment Agreement.
		 Subsequent to the Termination Date, the services to be provided pursuant
		to this Section 5(d) shall be performed at times and on schedules that are
		reasonably consistent with Executive’s other business activities and
		commitments.
	 

	 
		

	 

	 
		 
	 

	 
		6.
	 

	 
		Release of Employee.
	 

	 
		

	 

	 
		(a)
	 

	 
		Release. Except as necessary to enforce the terms of this
		Agreement, and in exchange for and in consideration of the promises, covenants
		and agreements set forth herein, the Company hereby releases and forever
		discharges Employee from any and all liabilities, causes of action, suits,
		agreements, promises, damages, disputes, controversies, contentions,
		grievances, differences, judgments, debts, claims and demands of any kind
		whatsoever, both in law and in equity, known or unknown, fixed or contingent,
		and whether asserted or unasserted (“Company Claims”), (i)
		which the Company may have or claim to have based upon or in any way related to
		Employee’s employment or termination of employment with the Company for
		any period prior to the Company’s execution of this Agreement or (ii)
		which otherwise involve any act, omission or facts that occurred during any
		period prior to the Company’s signing of this Agreement; provided,
		however, that while, to the best of the Company’s knowledge as of the date
		hereof, no such action by the Employee has taken place,  the Company does
		not release or discharge herein any Company Claims it may now or in the future
		have against Employee for acts of fraudulent, criminal or other willful
		misconduct of Employee of which the Company currently is not aware and which
		has or would have an adverse effect on the Company, provided
	 

	 
		
 

	 

	 
		5
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		that such unreleased or non-discharged Company Claim must be directly
		related to or result from:
	 

	 
		

	 

	 
		(i) an act of criminal misconduct where (x) the Employee is convicted or
		enters a plea of guilty or nolo contendre with respect to such criminal
		misconduct in or before a court of competent jurisdiction or in a non-judicial
		disposition of such a proceeding; and (y) if applicable, sentencing shall have
		taken place; and/or
	 

	 
		

	 

	 
		(ii) an act of fraud or willful misconduct, where the proceeding by a
		court of competent jurisdiction, non-judicial proceeding or other alternative
		dispute resolution mechanism terminates with a materially adverse finding
		against the Employee or a non-judicial disposition of such proceeding.
	 

	 
		

	 

	 
		Except for Company Claims related to fraudulent, criminal or other
		willful misconduct, the Company further covenants not to voluntarily
		participate or assist in any lawsuit, arbitration or other legal action
		asserting any claims that are released under this Agreement.
	 

	 
		

	 

	 
		7. Acknowledgments. By signing this Agreement below, Employee
		hereby acknowledges as follows:
	 

	 
		

	 

	 
		(a)
	 

	 
		Sufficiency of Consideration. The consideration received by
		Employee in Sections 3 and 6 of this Agreement in exchange for the release
		contained in Section 5 and the other promises contained in this Agreement, are
		greater in value than anything else which Employee may have otherwise been
		entitled under any existing Company separation, benefit or compensation policy
		if Employee did not execute this Agreement and are in lieu of any other
		compensation which Employee may have otherwise been entitled to receive under
		the Employment Agreement upon termination.
	 

	 
		

	 

	 
		(b)
	 

	 
		No Other Wages or Benefits Due. Except as described in this
		Agreement, Employee has been paid all wages and attendant benefits due Employee
		from the Company in consideration of the services Employee rendered for the
		Company during the period prior to his execution of this Agreement, including,
		but not limited to, vacation pay, sick or disability pay, overtime pay, holiday
		pay, expense reimbursement, bonuses, and any and all monetary or other benefits
		that are or were due Employee pursuant to policies of the Company in effect
		prior to his execution of this Agreement.
	 

	 
		

	 

	 
		(c)
	 

	 
		Entire Agreement; Prior Agreements. This Agreement contains the
		entire agreement between Employee and the Company regarding the subject matter
		hereto and, as such, fully supersedes any and all prior agreements or
		understandings between Employee and the Company pertaining to the subject
		matter addressed in this Agreement (including, without limitation, the
	 

	 
		
 

	 

	 
		6
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		Employment Agreement); provided, that, this Agreement shall not
		supersede, replace, or otherwise affect in any manner, (i) Employee’s
		continuing obligations under Paragraphs 7, 9, 10 and 22 of the Employment
		Agreement (as modified in Section 5(c) of this Agreement), and (ii) the waiver,
		binding effect (as to preserved paragraphs of the Employment Agreement),
		notice, severability, headings and other provisions contained in Paragraphs 13,
		14, 15, 17, 20 and 22 of the Employment Agreement.  The Parties
		acknowledge that this Agreement is not intended to limit the indemnification
		provisions of Company’s certificate of incorporation and bylaws nor the
		terms of Section 145 of the Delaware General Corporation Law.  Employee
		has carefully read and fully understands all of the provisions of this
		Agreement, which, except as noted in this Agreement, sets forth the entire
		understanding between Employee and the Company. In agreeing to the terms of
		this Agreement, Employee is not relying upon any written or oral promise or
		representation made to Employee by any employee or representative of the
		Company, other than the promises contained herein. This Agreement may not be
		amended, superseded, cancelled or terminated other than in a writing signed
		both by Employee and by the Company or its attorney or other designated
		representative.
	 

	 
		

	 

	 
		(d)
	 

	 
		No Duress. Employee has not been forced or pressured in any manner
		whatsoever to sign this Agreement, and Employee has agreed to all of its terms
		voluntarily.
	 

	 
		

	 

	 
		8.
	 

	 
		Severability. If any provision of this Agreement is held to be
		illegal, void or unenforceable, such provision shall be of no force or effect.
		 However, the illegality or unenforceability of such provision shall have
		no effect upon, and shall not impair the legality or enforceability of, any
		other provision of this Agreement; provided, however, that upon any finding by
		a court (or other tribunal) of competent jurisdiction that the releases
		contained in Paragraph 5 are illegal, void or unenforceable, you agree,
		promptly upon the request of the Company, to execute a new general release that
		is legal and enforceable.
	 

	 
		

	 

	 
		9.
	 

	 
		Return of Company Property. On the Termination Date or upon
		earlier request by the Company, Employee shall return to the Company any
		Company property in Employee’s possession, custody or control; provided,
		however, that paychecks, policies, benefit documents or other similar
		non-confidential materials received by Employee regarding the Employee’s
		employment with the Company in the ordinary course of such employment shall not
		be subject to such return.
	 

	 
		

	 

	 
		10.
	 

	 
		Choice of Law; Forum. This Agreement (including any of
		Employee’s continuing obligations under Paragraphs 7, 9, 10 and 22 of the
		Employment Agreement) shall be governed by the laws of the State of New York
		without giving effect to the principle of choice of law thereof. The
		interpretation and enforcement of the provisions of this Agreement (including
		any dispute regarding Employee’s continuing obligations under Paragraphs
		7, 9, 10 and 22 of the Employment Agreement) shall be resolved and
	 

	 
		
 

	 

	 
		7
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		determined exclusively by the state or federal courts sitting in New
		York, New York, and such courts are hereby granted exclusive jurisdiction for
		such purpose.
	 

	 
		

	 

	 
		11.
	 

	 
		Effective Date. Because this Agreement includes a release of
		claims under the Age Discrimination in Employment Act, the Company hereby
		advises you that you should consult an attorney regarding this Agreement, that
		you are entitled to twenty-one (21) days from your receipt of this Agreement to
		consider it and that you may have seven (7) days from the date you sign this
		Agreement to revoke it.  At the conclusion of that seven (7) day period,
		this Agreement will become final and effective and your right to revoke this
		Agreement will have expired.
	 

	 
		

	 

	 
		12.
	 

	 
		Notice. Whenever any notice is required or permitted hereunder, it
		shall be given in writing addressed as follows:
	 

	 
		    
	 

	 
		To the Company:
	 

	 
		

	 

	 
		Castle Brands Inc.
	 

	 
		570 Lexington Avenue, 29th Floor
	 

	 
		New York, NY 10022
	 

	 
		Facsimile: (646) 356-0222
	 

	 
		Attention: Chief Executive Officer
	 

	 
		 
	 

	 
		To the Executive:    
	 

	 
		

	 

	 
		To his home address as shown on the records of the Company, Attention:
		Herbert Roberts.
	 

	 
		

	 

	 
		Notice shall be deemed given and effective (a) five (5) business days
		after the deposit in the U.S. mail of a writing addressed as above and sent
		first class mail, certified, return receipt requested, (b) when received by the
		addressee, if sent by a nationally recognized air courier for next day delivery
		service (receipt requested), or (c) upon personal delivery (with written
		confirmation of receipt). Each party shall also provide a courtesy notice via
		email to the other, which courtesy notice shall not constitute notice pursuant
		to this Section 12.  Either party may change the address for notice by
		notifying the other party of such change in accordance with this Section 12.
	 

	 
		

	 

	 
		13.
	 

	 
		Assignment and Transfer. This Agreement shall inure to the benefit
		of and be enforceable by, and may be assigned by the Company without
		Employee’s consent to, any purchaser of all or substantially all of the
		Company’s business or assets, any successor to the Company or any assignee
		thereof (whether direct or indirect, by purchase, merger, consolidation or
		otherwise), and upon such assignment this Agreement shall be binding upon such
		successor or assignee. Employee’s rights and obligations under this
		Agreement shall not be transferable by Employee by assignment or otherwise, and
		any purported assignment, transfer or delegation thereof shall be void;
		provided, however, that if Employee shall die, all amounts payable to Employee
		hereunder shall be paid in accordance with the terms of this Agreement to
		Employee’s estate.
	 

	 
		
 

	 

	 
		8
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		

	 

	 
		15.
	 

	 
		No Waiver. No waiver by the parties hereto of any default or
		breach of any term, condition or covenant of this Agreement shall be deemed to
		be a waiver of any other term, condition or covenant contained herein or on any
		subsequent default or breach of the same term, condition or covenant.
	 

	 
		

	 

	 
		16.
	 

	 
		No Obligation to Mitigate. In no event shall Employee be obliged
		to seek other employment or consulting or take any other action by way of
		mitigation of the amounts payable to Employee under any of the provisions of
		this Agreement, nor shall the amount of any payment hereunder be reduced by any
		compensation earned by Employee as a result of self-employment or employment by
		another employer.
	 

	 
		

	 

	 
		17.
	 

	 
		No Right of Set-off, Etc. Except as set forth in this Agreement,
		the obligation of the Company to make the payments provided for in this
		Agreement and otherwise to perform its obligations hereunder shall not be
		affected by any circumstances, including without limitation, set-off,
		counterclaim, recoupment, defense or other claim, right or action which the
		Company may have against Employee or others.
	 

	 
		

	 

	 
		 
	 

	 
		18.
	 

	 
		Counterparts. This Agreement may be executed in two or more
		counterparts, each of which shall be deemed an original and all of which
		together shall be deemed to be one and the same instrument. Execution of this
		Agreement by the Parties evidenced by signatures transmitted by facsimile or
		electronic mail shall be deemed the same as original signatures.
	 

	 
		

	 

	 
		[REMAINDER OF PAGE INTENIONALLY LEFT BLANK]
	 

	 
		
 

	 

	 
		9
	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		ACCEPTED AND AGREED:
	 

	 
		  
	 

	 
		CASTLE BRANDS INC.
	 

	 
		  
	 

	 
		By:   /s/ Mark Andrews
		            
	 

	 
		Name:
	 

	 
		Mark Andrews
	 

	 
		Title:
	 

	 
		Chief Executive Officer
	 

	 
		Dated:
	 

	 
		March 20, 2007
	 

	 
		 
	 

	 
		

	 

	 
		   /s/ Herbert
		Roberts             
		
	 

	 
		HERBERT ROBERTS
	 

	 
		

	 

	 
		Dated:
	 

	 
		March 20, 2007
	 

	 
		

	 

	 
		
 

	 

	 
		10

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