Document:

exv10w1

 

EXHIBIT 10.01

AMENDED AND RESTATED

MATRIXX INITIATIVES, INC.

EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (the “Agreement”) is made and entered
into as of October 18, 2006, by and between Matrixx Initiatives, Inc., a Delaware corporation (the
“Company”), and Carl J. Johnson (“Executive”), and amends and restates the
Employment Agreement dated as of July 1, 2001, as amended by the First Amendment thereto dated as
of February 7, 2002.

ARTICLE 1

DUTIES AND TERM

     1.1 Employment. In consideration of their mutual covenants and other good and
valuable consideration, the receipt, adequacy, and sufficiency of which is hereby
acknowledged, the Company agrees to employ Executive, and Executive agrees to remain in
the employ of the Company, upon the terms and conditions herein provided.

     1.2 Position and Responsibilities.

          (a) Executive will serve as President and Chief Executive Officer of the Company,
reporting directly to the Board of Directors of the Company. Executive agrees to perform
services not inconsistent with these positions as shall from time to time be assigned to
Executive by the Board.

          (b) During the period of Executive’s employment hereunder, Executive will devote
substantially all of Executive’s business time, attention, skill, and efforts to the
faithful performance of Executive’s duties hereunder.

     1.3 Term. The term of Executive’s employment under this Agreement will commence
on July 1, 2001 and will continue, unless sooner terminated, for three years; after the
three-year period, Executive’s term of employment will automatically be extended from year
to year without further action by the Company or Executive unless a written notice not to
renew this Agreement is provided by one party to the other at least ninety (90) days prior
to the end of any extended term.

ARTICLE 2

COMPENSATION

     For all services rendered by Executive in any capacity during Executive’s employment under
this Agreement, the Company will compensate Executive as follows:

     2.1 Base Salary. The Company will pay to Executive an annual base salary of not
less than $425,000.00 to be paid in equal semi-monthly payments (the “Base 
Salary”), during the

 

 

term hereof; provided, however, that in the event the Company
institutes a salary reduction program that affects all exempt employees (as defined by
standard Company policies in compliance with the Fair Labor Standards Act) by the same
percentage, then Executive’s Base Salary may be reduced by such percentage (and the term
“Base Salary” as used in this Agreement will refer to the Base Salary as so adjusted). The
Board, or a committee thereof, will annually review the Base Salary, and may, in its
discretion, increase the Base Salary.

     2.2 Bonus Payments. An annual bonus, beginning with the first year of
employment, will be $112,500.00, based on meeting specified goals. The Board, or a
committee thereof, will establish in each fiscal year during the term hereof an executive
goal measurement plan. Any bonus under any such plan is referred to herein as the
“Annual Incentive Bonus.” This Annual Incentive Bonus shall be paid within
seventy-five (75) days of the end of the year for which it is calculated.

     2.3 Stock Options. Pursuant to the Executive’s Employment Offer Letter, stock
options will be granted and addressed in subsequent Matrixx Initiatives Inc. 2001
Long-Term Incentive Plan (“Stock Option Plan”) documents that will be provided. The
Company shall use all reasonable efforts to establish and maintain one or more stock
option plans in which Executive shall be entitled to participate.

     2.4 Additional Benefits. Executive will be entitled to participate in all
benefit and welfare programs, plans, and arrangements that are from time to time available
to the Company’s employees; provided, however, there will be no duplication of termination
or severance benefits, and to the extent that such benefits are specifically provided by
the Company to Executive under other provisions of this Agreement, the benefits available
under the foregoing plans and programs will be reduced by any benefit amounts paid under
such other provisions. Specifically, without limitation, Executive will receive the
following benefits:

          (a) Simple IRA. The Company offers a voluntary pre-tax salary reduction plan
with a three percent (3%) employer match in which eligible employees may elect to
participate on the first day of the month following ninety (90) days of continuous
employment. Eligible employees will have thirty (30) days in which to sign up for
participation once the enrollment criterion of ninety (90) days of continuous employment
has been met, subject to plan restrictions. Employees’ pre-tax plan contribution amounts
are limited to $6,000.00 annually. Federal guidelines and regulations governing Simple
Retirement Account (“SRA”) programs determine maximum annual contribution amounts.

          (b) Reimbursement of Business Expenses. The Company will, in accordance with
standard Company policies, pay, or reimburse Executive for all reasonable travel
and other expenses incurred by Executive in performing Executive’s obligations under this
Agreement.

          (c) Vacations. Executive will be entitled to fifteen (15) business days,
excluding Company holidays, of paid vacation during each calendar year of employment
hereunder. For the period July 1, 2001 through December 31, 2001, Executive shall be
entitled to a pro rata portion of vacation days. Executive may accrue and carry forward
vacation days from any particular year of his employment under this Agreement to the next
year.

2

 

          (d) Life Insurance and Disability Insurance. In addition to other insurance
benefits provided to Executive pursuant to this Agreement, the Company will provide
Executive, at the Company’s cost, life insurance and disability insurance coverage in
amounts and at levels agreed upon between the parties. Once these amounts and levels have
been determined, this coverage will not be modified or terminated without the signed,
written consent of both parties. In the event that any of the following occur:

	 	(i)	 	The Company or Executive shall terminate Executive’s employment under this
Agreement for any reason after December 31, 2008; or
	 
	 	(ii)	 	Executive’s employment with the Company shall terminate on account of Total
Disability; or
	 
	 	(iii)	 	The Company shall terminate Executive’s employment under this Agreement
without Cause on or prior to December 31, 2008; or
	 
	 	(iv)	 	Executive shall terminate his employment under this Agreement with Good
Reason on or prior to December 31, 2008; or
	 
	 	(v)	 	Company shall give notice prior to July 2008 under Section 1.3 of
this Agreement that it elects not to renew the Agreement;

     THEN the Company shall convey, transfer and assign the Policy to Executive within the 30-day
period following Executive’s termination of employment. Notwithstanding the foregoing, if (i)
Executive is a “specified employee” (as defined in Code Section 409A), and (ii) the definition of
Good Reason in Section 6.1 below does not qualify as an “involuntary” separation from
service pursuant to guidance issued under Code Section 409A (or the Company determines that no
other exceptions to Code Section 409A applies), the conveyance, transfer and assignment of the
Policy to Executive shall occur on the first day of the seventh month following his termination of
employment. During any such six month period, the Company shall cause the Executive’s designated
beneficiary to be the sole beneficiary for purposes of the death benefit under the Policy and, in
the event that the Company is paid any portion of the death benefit under the Policy upon the death
of Executive during any such six month period, the Company shall promptly pay over such death
benefit to Executive’s designated beneficiary. Company will be responsible for paying any
insurance premiums that become due and payable during this six-month period. After the conveyance,
transfer and assignment of the Policy to Executive, Executive will own the Policy and the cash
value and death benefit
thereunder and will be responsible for payment of any further premiums due on the Policy.

     In addition to the above, the Company shall also pay to Executive an amount equal to the
“total presumed federal and state taxes” that could be imposed on Executive with respect to the
income tax payable upon the transfer and assignment of the Policy. For purposes of the preceding
sentence, the “total presumed federal and state taxes” that could be imposed on Executive shall be
conclusively calculated by the Company using a combined tax rate equal to the sum of the maximum
marginal federal and state income tax rates and the hospital insurance

3

 

(or “HI”) portion of
FICA. No adjustments will be made in this combined rate for the deduction of state taxes on the
federal return, the loss of itemized deductions or exemptions, or for any other purpose. Executive
shall be responsible for paying the actual taxes. Such payment will be paid to Executive within
five (5) business days following the transfer of the Policy to Executive.

     2.5 Relocation Expenses. Executive will receive up to $50,000.00 for relocation
expenses from the Grand Rapids, Michigan area to a location designated by the Company by
December 31, 2001. The Company will reimburse Executive for reasonable travel and
temporary living expenses in the Phoenix, Arizona area until a determination has been made
regarding the place to be designated by the Company for Executive’s permanent relocation.
Also, in the event that Executive’s current residence is not sold within ninety (90) days
of determination by the Company that Executive should permanently relocate from the Grand
Rapids, Michigan area, the Company guarantees the purchase of the residence at the middle
price of three (3) appraisals that Executive must obtain, or, protection for the sale of
the residence up to $35,000.00 from the middle appraisal price. Any relocation
requirement by the Company shall be within the continental United States. Any amounts
paid to Executive pursuant to this Article 2.5 shall be increased to pay for any tax
liability incurred by Executive as a result of the payment of these funds.

ARTICLE 3

TERMINATION OF EMPLOYMENT

     3.1 Death or Retirement of Executive. Executive’s employment under this
Agreement will automatically terminate upon the death or Retirement (as defined in
Section 6.1) of Executive.

     3.2 By Executive. Executive will be entitled to terminate Executive’s employment
under this Agreement by giving Notice of Termination (as defined in Section 6.1)
to the Company:

          (a) for Good Reason (as defined in Section 6.1); and

          (b) at any time without Good Reason.

     3.3 By Company. The Company will be entitled to terminate Executive’s employment
under this Agreement by giving Notice of Termination to Executive:

          (a) in the event of Executive’s Total Disability (as defined in Section 6.1);

          (b) for Cause (as defined in Section 6.1); and

          (c) at any time without Cause.

ARTICLE 4

COMPENSATION UPON TERMINATION OF EMPLOYMENT

     If Executive’s employment hereunder is terminated in accordance with the provisions of Article
3 hereof, except for any other rights or benefits specifically provided for herein following
Executive’s period of employment, the Company will be obligated to provide compensation and
benefits to Executive only as follows, subject to the provisions of Section 5.12 hereof:

4

 

     4.1 Upon Termination for Death or Disability. If Executive’s employment
hereunder is terminated by reason of Executive’s death or Total Disability, the Company
will:

          (a) pay Executive (or Executive’s estate) or beneficiaries any Base Salary that has
accrued but has not been paid as of the termination date (the “Accrued Base
Salary”);

          (b) pay Executive (or Executive’s estate) or beneficiaries for unused vacation days
accrued as of the termination date in an amount equal to Executive’s Base Salary
multiplied by a fraction the numerator of which is the number of accrued unused vacation
days and the denominator of which is 260 (the “Accrued Vacation Payment”);

          (c) reimburse Executive (or Executive’s estate) or beneficiaries for expenses incurred by
Executive prior to the date of termination that are subject to reimbursement pursuant to
this Agreement (the “Accrued Reimbursable Expenses”);

          (d) provide to Executive (or Executive’s estate) or beneficiaries any accrued and vested
benefits required to be provided by the terms of any Company-sponsored benefit plans or
programs (the “Accrued Benefits”), together with any benefits required to be paid
or provided in the event of Executive’s death or Total Disability under applicable law;

          (e) pay Executive (or Executive’s estate) or beneficiaries any Annual Incentive Bonus
with respect to a prior fiscal year that has accrued but has not been paid (the
“Accrued Annual Incentive Bonus” plus the pro rata share of any Annual Incentive
Bonus for the fiscal year during which Executive’s employment shall be terminated;
provided, however, that no such amount shall be payable to Executive
unless the objectives are achieved in the reasonable judgment of the Company for the full
fiscal year (the “Pro Rata Bonus”); and

          (f) Executive (or Executive’s estate) or beneficiaries shall have the right to exercise
all unexercised stock options and warrants outstanding at the termination date related to
the original option grant of 75,000 shares, whether or not vested, in accordance with
terms of the plans and agreements pursuant to which such options or warrants were issued.

     4.2 Upon Termination by Company for Cause or by Executive Without Good Reason.
If Executive’s employment is terminated by the Company for Cause, or if Executive
terminates Executive’s employment with the Company other than (y) upon Executive’s death
or Total Disability, or (z) for Good Reason, the Company will:

          (a) pay Executive the Accrued Base Salary;

          (b) pay Executive the Accrued Vacation Payment;

          (c) pay Executive the Accrued Reimbursable Expenses;

          (d) pay Executive the Accrued Benefits, together with any benefits required to be paid or
provided under applicable law;

5

 

          (e) pay Executive any Accrued Annual Incentive Bonus; and

          (f) Executive will have the right to exercise vested options and warrants in accordance
with terms of the plans and agreements pursuant to which such options or warrants were
issued.

     4.3 Upon Termination by the Company Without Cause or by Executive for Good
Reason. If Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason, the Company will:

          (a) pay Executive the Accrued Base Salary;

          (b) pay Executive the Accrued Vacation Payment;

          (c) pay Executive the Accrued Reimbursable Expenses;

          (d) pay Executive the Accrued Benefits, together with any benefits required to be paid or
provided under applicable law;

          (e) pay Executive any Accrued Annual Incentive Bonus;

          (f) pay Executive for a twelve (12) month period commencing on or before the thirtieth
day following the termination date twenty-four (24) semi-monthly payments each equal to
one-twenty-fourth of the sum of (1) Executive’s Base Salary in effect immediately prior to
the time such termination occurs for the remaining term of this Agreement or for one (1)
year, whichever is longer, plus (2) the average of the Annual Incentive Bonuses paid to
Executive for the two (2) fiscal years immediately preceding the fiscal year in which the
termination occurs (or if less than two, the amount of his single Annual Incentive Bonus,
if any) for each of the remaining years of the term of this Agreement or for one year,
whichever is longer. Notwithstanding the foregoing, if (i) Executive is a “specified
employee” (as defined in Code Section 409A), and (ii) the definition of Good Reason in
Section 6.1 below does not qualify as an “involuntary” separation from service
pursuant to guidance issued under Section 409A (or the Company determines that no other
exceptions to Code Section 409A applies), the above
payments will commence on the first day of the seventh month following his separation from
service. All payments that would have otherwise been paid to Executive during this
six-month period shall be paid to Executive in one lump sum on the first day of the seventh
month following his separation from service, plus interest accruing at the rate of interest
per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime
rate in effect at its principal office in New York City, each change in the prime rate to
be effective from and including the date such change is publicly announced as being
effective. If Executive dies before he receives the above payment, the Company will
distribute the benefits to Executive’s beneficiary as soon as administratively feasible
following the date of Executive’s death. Except for the above required delay in payment,
neither the Executive nor the Company shall have the right or the ability to accelerate or
defer the payment of amounts determined pursuant to this Section 4.3(f), provided
that if the Executive dies during the 12-month period set forth above, the Company shall
pay his estate a lump sum amount equal to the remaining payments to be made under this
provision.

6

 

          (g) maintain in full force and effect at the Company’s expense, for Executive’s and
Executive’s eligible beneficiaries’ continued benefit, until the first to occur of (x) his
attainment of alternative employment which provides substantially similar health benefits
or (y) twelve (12) months following the termination date of Executive’s employment
hereunder or the remaining term of this Agreement, (whichever is longer), the benefits
provided pursuant to Company-sponsored benefit plans, programs, or other arrangements in
which Executive was entitled to participate as a full-time employee immediately prior to
such termination in accordance with Section 2.4 hereof, subject to the terms and
conditions of such plans and programs (the “Continued Benefits”). If Executive’s
continued participation is not permitted under the general terms and provisions of such
plans, programs, and arrangements, the Company will arrange to provide Executive with
Continued Benefits substantially similar to those which Executive would have been entitled
to receive under such plans, programs, and arrangements; and

          (h) Executive shall have the right to exercise vested options and warrants in accordance
with Section 4.1(f).

     4.4 Upon Termination by the Company Without Cause Following a Change of Control or by
Executive for Good Reason Following a Change of Control. If following a Change of
Control, Executive’s employment is terminated by the Company Without Cause or by Executive
for Good Reason, the Company will:

          (a) Make the payments and provide to Executive the benefits under Section 4.3
other than under Section 4.3(f) hereof; and

          (b) Pay to Executive a lump sum payment on or prior to the thirtieth day following the
termination date of Executive’s employment hereunder in an amount equal to two hundred
percent (200%) of the sum of (1) Executive’s Base Salary in effect for the fiscal year
immediately prior to the fiscal year in which the Change of Control occurs, plus (2) the
average of the Annual Incentive Bonuses paid to
Executive for the two (2) fiscal years immediately preceding the fiscal year in which the
Change of Control occurs (or if less than two, the amount of his single Annual Incentive
Bonus, if any). Notwithstanding the foregoing, if (i) Executive is a “specified employee”
(as defined in Code Section 409A), and (ii) the definition of Good Reason in Section
6.1 below does not qualify as an “involuntary” separation from service pursuant to
guidance issued under Section 409A (or the Company determines that no other exceptions to
Code Section 409A applies), the above payment will be paid to Executive in one lump sum on
the first day of the seventh month following his separation from service. If Executive
dies before he receives the above payment, the Company will distribute the benefits to
Executive’s beneficiary as soon as administratively feasible following the date of
Executive’s death.

ARTICLE 5

RESTRICTIVE COVENANTS

     5.1 Confidential Information and Materials. Executive hereby agrees and
acknowledges that the following ideas, information, and materials in written, oral,
magnetic, photographic, optical or other form and whether now existing or developed or
created during the

7

 

period of Executive’s employment or engagement with the Company (the
“Confidential Information”), are proprietary to the Company and are highly
sensitive in nature:

          (a) Hardware. Any and all ideas, concepts, know-how, techniques, structures,
information and materials relating to the design, development, engineering, invention,
patent, patent application, manufacture or improvement of any and all equipment,
components, devices, techniques, processes or formulas (including, without limitation,
mask works, semi-conductor chips, processors, memories, disc drives, tape heads, computer
terminals, keyboards, storage devices, printers, and optical storage media) and any and
all components, devices, techniques or circuitry incorporated in any of the above which is
or are constructed, designed, improved, altered or used by the Company and which is or are
not generally known to the public or within the industries in which the Company competes.

          (b) Software. Any and all ideas, concepts, know-how, techniques, structures,
information and materials relating to existing computer software or firmware products and
computer software or firmware in various stages of research and development including
without limitation source code, object and load modules, requirements specifications,
design specifications, design notes, flow charts, coding sheets, annotations,
documentation, technical and engineering data, laboratory studies, benchmark test results,
and the structures, organization, designs, formulas and algorithms which reside in the
software and which are not generally known to the public or within the industries or
trades in which the Company competes.

          (c) Business Procedures. Internal business procedures and business plans,
including analytical methods and procedures, licensing techniques, manufacturing
information and procedures such as formulations, processes and equipment, technical and
engineering data, vendor names, other vendor information,
purchasing information, financial information, service and operational manuals and
documentation therefor, ideas for new products and services and other such information
which relates to the way the Company conducts its business and which is not generally known
to the public.

          (d) Legal Rights. All patents, copyrights, trade secrets, trademarks and service
marks, and the like.

          (e) Marketing Plans and Customer Lists. Any and all customer and marketing
information and materials, such as (i) strategic data, including marketing and development
plans, forecasts and forecast assumptions and volumes, and future plans and potential
strategies of the Company which have been or are being discussed; (ii) financial data,
price and cost objectives, price lists, pricing policies and procedures, and estimating
and quoting policies and procedures; and (iii) customer data, including customer lists,
names of existing, past or prospective customers and their representatives, data about or
provided by prospective, existing or past customers, customer service information and
materials, data about the terms, conditions and expiration dates of existing contracts
with customers and the type, quantity and specifications of products and services
purchased, leased or licensed by customers of the Company.

          (f) Not Generally Known. Any and all information not generally known to the
public or within the industries or trades in which the Company competes.

8

 

     5.2 General Knowledge. The general skills and experience gained by Executive
during Executive’s employment or engagement by the Company, and information publicly
available or generally known within the industries or trades in which the Company
competes, is not considered Confidential Information. Following the Non-Competition
Period (as defined in Section 5.9(a), Executive is not restricted from working
with a person or entity which has independently developed information or materials similar
to the Confidential Information, but in such a circumstance, Executive agrees not to
disclose the fact that any similarity exists between the Confidential Information and the
independently developed information and materials, and Executive understands that such
similarity does not excuse Executive from the non-disclosure and other obligations in this
Agreement.

     5.3 Executive Obligations as to Confidential Information and Materials. During
Executive’s employment or engagement by the Company, Executive will have access to the
Confidential Information and will occupy a position of trust and confidence with respect
to the Confidential Information and the Company’s affairs and business. Executive agrees
to take the following steps to preserve the confidential and proprietary nature of the
Confidential Information:

          (a) Non-Disclosure. During and after Executive’s employment or engagement by the
Company, Executive will not use, disclose or otherwise permit any person or entity access
to any of the Confidential Information other than as required in the performance of
Executive’s duties with the Company. Executive understands that Executive is not allowed
to sell, license, market or otherwise exploit any products
or services (including software or firmware in any form) which embody in whole or in part
any Confidential Information.

          (b) Prevent Disclosure. Executive will take all reasonable precautions to
prevent disclosure of the Confidential Information to unauthorized persons or entities.

          (c) Abide by the Company’s Restrictions. Executive will treat as confidential
and proprietary any information or materials from outside the Company which the Company is
obligated to treat as confidential or proprietary, in accordance with the Company’s
reasonable instructions to Executive.

          (d) Return All Materials. Upon termination of Executive’s employment or
engagement by the Company for any reason whatsoever, Executive will deliver to the Company
all tangible materials embodying the Confidential Information, including any
documentation, records, listings, notes, data, sketches, drawings, memoranda, models,
accounts, reference materials, samples, machine-readable media and equipment which in any
way relate to the Confidential Information. Of course, Executive agrees not to retain any
copies of any of the above materials.

     5.4 Inform Subsequent Employers. Executive covenants and agrees that, for a
period beginning on the date of Executive’s termination of employment with the Company and
ending on the termination of the Non-Competition Period, prior to accepting subsequent
employment with an employer engaged in substantially the same line of work as the Company,
Executive will inform any such subsequent employer that this Agreement exists.

9

 

     5.5 Ideas and Inventions. Executive agrees to assign to the Company all of
Executive’s right, title and interest in or to any and all ideas, concepts, know-how,
techniques, processes, inventions, discoveries, developments, works of authorship,
innovations and improvements (“Inventions”), conceived or made by Executive,
whether alone or with others, whether patentable or not, except those that the Executive
developed entirely on Executive’s own time without using the Company’s equipment,
supplies, facilities, or trade secret information and which neither (1) relate at the time
of conception or reduction to practice of the invention to the Company’s business, or
actual or demonstrably anticipated research or development of the Company, nor (2) result
from any work performed by the Executive for the Company. Executive agrees to disclose
all Inventions to the Company promptly, and to provide all assistance reasonably requested
by the Company in the preservation of its interests in the Inventions (such as by
executing documents, testifying, etc.), such assistance to be provided at the Company’s
expense but without any additional compensation to Executive.

     5.6 Inventions and Patents; Assertion of Rights. Executive agrees that from this
date until Executive leaves the Company’s employment, Executive will keep the Company
informed of any Inventions made by Executive, in whole or in part, or conceived by
Executive, alone or with others, which result from any work Executive may do for, or at
the request of, the Company, or which relate to the Company’s activities, investigations,
or obligations. Executive will, at the expense of the Company, assist the Company or its
nominees to obtain patents for
such Inventions in any countries throughout the world. Such Inventions will be the
property of the Company or its nominees, whether patented or not. Executive will and does,
without charge to the Company, assign to the Company, all of Executive’s right, title, and
interest in and to such Inventions, including patents and patent applications and reissues
thereof. Executive agrees to execute, acknowledge, and deliver any instruments confirming
the complete ownership by the Company of such Inventions. Such assignments will include
the right to sue for infringement.

     5.7 Copyrights. Executive agrees that any work prepared by Executive during the
course of Executive’s employment or engagement hereunder which is eligible for United
States copyright protection or protection under the Universal Copyright Convention, the
Berne Copyright Convention and/or the Buenos Aires Copyright Convention will be a work
made for hire. In the event any such work is deemed not to be a work made for hire,
Executive hereby assigns all right, title and interest in and to the copyright in such
work to the Company, and agrees to provide all assistance reasonably requested by the
Company in the establishment, preservation and enforcement of its copyright in such work,
such assistance to be provided at the Company’s expense but without any additional
compensation to Executive.

     5.8 Conflicting Obligations and Rights. Executive agrees to inform the Company
in writing of any apparent conflict between Executive’s work for the Company and (i) any
obligations Executive may have to preserve the confidentiality of another’s proprietary
information or materials, or (ii) any rights Executive claims to any patents, copyrights,
trade secrets, or other inventions, ideas or similar rights, before performing that work.
Otherwise, the Company may conclude that no such conflict exists and Executive agrees
thereafter to make no such claim against the Company. The Company will receive such
disclosures in confidence. There are no such existing obligations and claims of Executive
as of the date of this Agreement.

10

 

     5.9 Non-Competition/Non-Solicitation.

          (a) During the Non-Competition Period (as defined herein), Executive agrees that
Executive will not directly or indirectly Compete (as defined herein) with the Business in
the Business Territory. The term “Business Territory” means the United States of
America, including (i) the Western United States (Alaska, Arizona, California, Colorado,
Hawaii, Idaho, Oregon, Montana, New Mexico, Nevada, Utah, Washington, and Wyoming), and
(ii) a 30-mile radius around the Company’s corporate headquarters and any other location
of the Company.

          (b) For purposes of this Section 5.9, the “Non-Competition Period” means
the period of Executive’s employment by the Company, or any of its Affiliates plus an
additional period of one (1) year following the date of termination of Executive’s
employment for any reason, whether such termination is voluntary or involuntary.
Executive agrees that the Non-Competition Period will be extended by the number of days
during any such period in which Executive is or was engaged in activities constituting a
breach of this Article 5.

          (c) For purposes of this Section 5.9, the term “Compete” or
“Competing” means, with respect to the Business: (i) managing, supervising, or
otherwise participating in a management or sales capacity; or (ii) otherwise managing,
operating, controlling, participating in the ownership, management, or control of, or
being connected with or having any interest in, as a stockholder, agent, partner, lender,
consultant, advisor or otherwise, any business or Person which provides goods, products,
or services competitive with those provided by the Business; provided,
however, that nothing contained herein will prohibit Executive from owning less
than one percent (1%) of any class of securities listed on a national securities exchange
or traded publicly in the over-the-counter market; or (iii) entering into or attempting to
enter into any business substantially similar to the Business, either alone or with any
other Person.

          (d) For the purposes of this Section 5.9, the words “directly or indirectly,” as
they modify the word “Compete” or “Competing” mean (i) acting as an agent, representative,
consultant, officer, director, member, independent contractor, or employee of any Person
that is Competing with the Business; (ii) participating in any such Competing Person or
enterprise as an owner, partner, limited partner, joint venturer, member, creditor, or
shareholder (except as expressly permitted herein); or (iii) or communicating to any such
Competing Person or enterprise the names or addresses or any other information concerning
any past, present, or identified prospective client or customer or any other confidential
information of the Business, the Company or any of its Affiliates.

          (e) For purposes of this Article 5, the term “Business” means the business, as
conducted by the Company, or any of its Affiliates immediately prior to the date hereof
and/or developed during Executive’s employment hereunder.

          (f) Non-Solicitation of Employees. Executive recognizes that the Company’s
employees are a valuable resource of the Company. Accordingly, during the Employee
Non-Solicitation Period (as defined herein), Executive agrees that Executive will not,
either alone or in conjunction with any other Person, directly or indirectly, solicit,
induce, or recruit any Company employee to leave the employ of the Company. For the
purpose of this Section 5.9(e), Company employee means (i) any employee of the
Company, or any of its Affiliates as of, or

11

 

immediately prior to the date hereof or during
the Non-Competition Period, the Employee Non-Solicitation Period, and the Customer
Non-Solicitation Period; or (ii) any former employee of the Company, or any of its
Affiliates whose employment with the Company, or any of its Affiliates ceased less than
one (1) year before the date of such co-venturing, solicitation, inducement, or
recruitment.

          For purposes of this Section 5.9, the “Employee Non-Solicitation Period” and
the “Customer Non-Solicitation Period” mean the period of Executive’s employment by the
Company, or any of its Affiliates, and an additional period of one (1) year following the date of
termination of Executive’s employment for any reason, whether such termination is voluntary or
involuntary. The Employee Non-Solicitation Period described herein will be extended by the number
of days during any such period in which Executive is or was engaged in activities constituting a
breach of this Article 5.

          (g) Non-Solicitation of Customers and Prospective Customers. Executive
recognizes that the Company’s customers and Prospective Customers are a valuable asset of
the Company. Accordingly, during the Customer Non-Solicitation Period, Executive will
not, for the purpose of competing with the Company, either alone or in conjunction with
any other Person, directly or indirectly, call on, solicit, take away, accept as a client,
customer, or prospective client or customer, or attempt to call on, solicit, take away, or
accept as a client, customer, or prospective client or customer, any Person that, as of
the date of the termination of Executive’s employment hereunder, was a client, customer,
or Prospective Customer of the Company, or any of its Affiliates.

          (h) Executive hereby expressly agrees and acknowledges that:

               (i) the Company has protectable business interests throughout the Business Territory, and
elsewhere, and that competition with and against such business interests would be harmful
to the Company;

               (ii) the covenants contained in this Article 5 are reasonable as to time and geographical
area and do not place any unreasonable burden upon Executive’s ability to earn a
livelihood;

               (iii) the public will not be harmed as a result of enforcement of the covenants contained
in this Article 5;

               (iv) the personal legal counsel for Executive has reviewed the covenants contained in this
Article 5; and

               (v) Executive understands and hereby agrees to each and every term and condition
contained in this Article 5.

     5.10 Non-Disparagement. During the term of this Agreement, the Non-Competition
Period, the Employee Non-Solicitation Period, and the Customer Non-Solicitation Period,
the Executive will not disparage the Company nor will the Company, or its representatives,
disparage Executive.

12

 

     5.11 Remedies. Executive expressly agrees and acknowledges that the covenants set
forth in Sections 5.1 through Section 5.10 are necessary for the
protection of the interests of the Company and its Affiliates because of the nature and
scope of their business and Executive’s position with the Company and, consistent with
Section 6.3, such covenants may be enforced in any court of competent
jurisdiction. Further, Executive acknowledges that any breach of such covenants would
result in irreparable damage to the Company, and that money damages will not sufficiently
compensate the Company for its injury caused thereby, and that the remedy at law for any
breach or threatened breach of any of such covenants will be inadequate and, accordingly
agrees, that the Company will, in addition to all other available remedies (including
without limitation, seeking such damages as it can show it has sustained by reason of such
breach), be entitled to injunctive relief or specific performance and that, in addition to
such
money damages, Executive may be restrained and enjoined from any continuing breach of any
such covenant.

     5.12 Severability of Article 5 Provisions. If any provision of this Article 5
shall be adjudicated by a court of competent jurisdiction to be invalid or unenforceable
because of the scope, duration, area of its applicability, or any other reason, the court
making such determination will have the power to modify such scope, duration, or area, or
all of them, or to strike an invalid or unenforceable provision, in whole or in part, to
make such scope, duration, area, or provision valid and enforceable. Executive further
acknowledges and agrees that if such covenants, or any of them, are deemed to be
unenforceable as a result of litigation initiated or otherwise supported by Executive
and/or the Executive fails to comply with this Article 5, the Company has no obligation to
provide any compensation or other benefits described in Article 4 hereof.

     5.13 Other Agreements. In the event that Executive has previously signed, or does
sign in the future any one or more separate non-competition, non-solicitation,
confidentiality, or similar agreement(s) with the Company, such agreement(s) will remain
binding and enforceable and the Company may, at its option, assert any and all such
agreement(s) against Executive in addition to, or in lieu of, this Agreement.

     5.14 Scope of Article. For purposes of this Article 5, unless the context
otherwise requires, the term “Company” includes Matrixx Initiatives, Inc., its direct and
indirect subsidiaries, and its Affiliates.

ARTICLE 6

MISCELLANEOUS

     6.1 Definitions. For purposes of this Agreement, the following terms will have
the following meanings:

          “Accrued Base Salary” — as defined in Section 4.1(a).

          “Accrued Benefits” — as defined in Section 4.1(d).

          “Accrued Annual Incentive Bonus” — as defined in Section 4.1(e).

          “Accrued Reimbursable Expenses” — as defined in Section 4.1(c).

          “Accrued Vacation Payment” — as defined in Section 4.1(b).

13

 

          “Affiliate” — of a Person means a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the first Person.
“Control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.

          “Annual Incentive Bonus” — as defined in Section 2.2.

          “Base Salary” — as defined in Section 2.1.

          “Board” — means the Company’s Board of Directors.

          “Business” — as defined in Section 5.9(e).

          “Business Territory” — as defined in Section 5.9(a).

          “Cause” will mean the occurrence of any of the following:

          (a) Executive’s gross and willful misconduct which results in material injury to the
Company;

          (b) Executive’s engaging in fraudulent conduct with respect to the Company’s or any of
its Affiliates’ business or in conduct of a criminal nature that may have an adverse
impact on the Company’s or any of its Affiliates’ standing and reputation;

          (c) The material failure or refusal by Executive to perform the duties required of
Executive by this Agreement which inappropriate failure or refusal shall not be cured
within thirty (30) days following receipt by Executive of written notice from the Board of
Directors of the Company specifying the factors or events constituting such failure or
refusal;

          (d) Executive’s use of drugs and/or alcohol in violation of then current Company policy;
or

          (e) Executive’s material breach of his obligation under Section 1.2(b) hereof
which shall not be cured within thirty (30) days after written notice thereof to Executive
from the Board.

          “Code” will mean the Internal Revenue Code of 1986, as amended.

          “Compete” or “Competing” — as defined in Section 5.9(c).

          “Change of Control” shall mean and will be deemed to have occurred if:

          (f) After the date of this Agreement, any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor
provision thereto) shall become the beneficial owner (within the meaning

14

 

of Rule 13d-3 under the
Exchange Act or any successor provision thereto) directly or indirectly of securities of the
Company representing 15 percent or more of the combined voting power of the Company’s then
outstanding securities ordinarily having the right to vote at an election of directors;
provided, however, that, for purposes of this subparagraph, “person” shall exclude
the Company, its subsidiaries, any person acquiring such securities directly from the Company, any
employee benefit plan sponsored by the Company or from Executive or any stockholder owning 15
percent or more of the combined voting power of the Company’s outstanding securities as of the date
of this Agreement; or

          (g) Any stockholder of the Company owning 15 percent or more of the combined voting power of
the Company’s outstanding securities as of the date of this Agreement shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) directly or indirectly of
securities of the Company (other than through the acquisition of securities directly from the
Company or from Executive) representing 20 percent or more of the combined voting power of the
Company’s then outstanding securities ordinarily having the right to vote at an election of
directors; or

          (h) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least 80 percent of the Board, provided, however,
that any person becoming a member of the Board subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least 80
percent of the members then comprising the Incumbent Board (other than an election or nomination of
an individual whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of directors of the Company, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act or any successor provision
thereto) shall be, for purposes of this Agreement, considered as though such person were a member
of the Incumbent Board; or

          (i) Approval by the stockholders of the Company and consummation of a reorganization, merger,
consolidation, or sale or other disposition of all or substantially all of the assets of the
Company, in each case, with or to a corporation or other person or entity of which persons who were
the stockholders of the Company immediately prior to such transaction do not, immediately
thereafter, own more than 80 percent of the combined voting power of the outstanding voting
securities entitled to vote generally in the election of directors of the reorganized, merged,
consolidated or purchasing corporation (or in the case of a non-corporate person or entity,
functionally equivalent voting power) and 80 percent of the members of the Board of which
corporation (or functional equivalent in the case of a non-corporate person or entity) were not
members of the Incumbent Board at the time of the execution of the initial agreement providing for
such reorganization, merger, consolidation or sale, not including the sale of assets pursuant to
the Asset Purchase Agreement by and between Wm. Wrigley Jr. Company and the Company, dated as of
March 14, 2001.

          “Confidential Information” — as defined in Section 5.1.

          “Continued Benefits” — as defined in Section 4.3(g).

          “Customer Non-Solicitation Period” — as defined in Section 5.9(f).

15

 

          “Employee Non-Solicitation Period” — as defined in Section 5.9(f).

          “Good Reason” will mean the occurrence of any of the following:

          (j) Executive’s compensation is reduced by the Company in violation of this Agreement; or

          (k) Executive’s function, duties and/or responsibilities are significantly reduced so as
to cause his position with the Company to become of materially less dignity,
responsibility and/or importance than those associated with his functions, duties and/or
responsibilities as of the date of this Second Amendment; or

          (l) In either event more than once during the term of this Agreement, Executive is
required by the Company permanently to relocate his residence or the Company’s principal
business office is relocated more than 60 miles away from its then current location; or

          (m) Other material breach of this Agreement by the Company, which breach is not cured
within thirty (30) days after written notice thereof is received by the Company.

          “Inventions” — as defined in Section 5.5.

          “Non-Competition Period” — as defined in Section 5.9(b).

          “Notice of Termination” will mean a notice which indicates the specific termination provision
of this Agreement relied upon and sets forth in reasonable detail, the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the provision so
indicated.

          “Person” means any natural person, firm, partnership, association, corporation, company,
limited liability company, limited partnership, trust, business trust, governmental authority, or
other entity.

          “Policy” means that certain Estate Whole Life Policy No. 16-084-015 dated April 18, 2002,
procured by the Company on the life of Executive from The Northwestern Mutual Life Insurance
Company pursuant to Section 2.4(d) of the Agreement.

          “Prospective Customer” means any Person that the Company or any of its Affiliates have
contacted, or have developed a strategy or plan to contact, for the purpose of acquiring such
Person as a client.

          “Retirement” will mean normal retirement at age 65.

          “Total Disability” will mean Executive’s failure substantially to perform Executive’s duties
hereunder on a full-time basis for a period exceeding ninety (90) consecutive days or for periods
aggregating more than one hundred eighty (180) days during any twelve-month period as a result of
incapacity due to physical or mental illness. If there is a dispute as to whether Executive is or
was physically or mentally unable to perform his duties under this Agreement, such dispute will be
submitted for resolution to a licensed physician

16

 

agreed upon by the Company and Executive, or if an
agreement cannot be promptly reached, the Company and Executive will promptly select a physician,
and if these physicians cannot agree, the physicians will promptly select a third physician whose
decision will be binding on all parties. If such a dispute arises, Executive will submit to such
examinations and will provide such information as such physician(s) may request, and the
determination of the physician(s) as to Executive’s physical or mental condition will be binding
and conclusive. Notwithstanding the foregoing, if Executive participates in any group disability
plan provided by the
Company which offers long-term disability benefits, “Total Disability” will mean total
disability as defined therein.

     6.2 Key Man Insurance. The Company will have the right, in its sole discretion,
to purchase “key man” insurance on the life of Executive. The Company shall be the owner
and beneficiary of any such policy. If the Company elects to purchase such a policy,
Executive will take such physical examinations and supply such information as may be
reasonably requested by the insurer.

     6.3 Dispute Resolution. If there shall be any dispute between the Company and
Executive (i) in the event of any termination of Executive’s employment by the Company,
whether such termination was for Cause, or (ii) in the event of any termination of
employment by Executive, or (iii) otherwise arising out of Executive’s employment or this
Agreement, the dispute will be resolved by binding arbitration in accordance with the
National Rules for the Resolution of Labor Disputes (“Rules”) administered by the
American Arbitration Association (“AAA”). This arbitration will be held in the
AAA office located nearest the Company’s headquarters. The provisions of the Rules are
incorporated as a part hereof; provided, however, that (A) the Company or Executive must
initiate arbitration within one (1) year from the date any claim accrues; and (B) either
party may seek injunctive relief in court to avoid irreparable injury during the pendency
of arbitration proceedings. IT IS EXPRESSLY UNDERSTOOD THAT BY SIGNING THIS AGREEMENT,
WHICH INCORPORATES BINDING ARBITRATION, THE COMPANY AND EXECUTIVE AGREE, EXCEPT AS
SPECIFICALLY PROVIDED OTHERWISE IN SECTION 5.11 AND THIS SECTION 6.3, TO
WAIVE COURT OR JURY TRIAL TO THE FULLEST EXTENT PERMITTED BY LAW AND TO WAIVE PUNITIVE,
STATUTORY, CONSEQUENTIAL, AND ANY DAMAGES, OTHER THAN COMPENSATORY DAMAGES.

     6.4 Successors; Binding Agreement. This Agreement will be binding upon any
successor to the Company and will inure to the benefit of and be enforceable by
Executive’s personal or legal representatives, beneficiaries, designees, executors,
administrators, heirs, distributees, devisees and legatees.

     6.5 Modification; No Waiver. This Agreement may not be modified or amended except
by an instrument in writing signed by the parties hereto. No term or condition of this
Agreement will be deemed to have been waived, nor will there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument by the party
charged with such waiver or estoppel. No such written waiver will be deemed a continuing
waiver unless specifically stated therein, and each such waiver will operate only as to
the specific term or condition waived and will not constitute a waiver of such term or
condition for the future or as to any other term or condition.

17

 

     6.6 Severability. The covenants and agreements contained herein are separate and
severable and the invalidity or unenforceability of any one or more of such covenants or
agreements, if not material to the employment arrangement that is
the basis for this Agreement, will not affect the validity or enforceability of any other
covenant or agreement contained herein.

     6.7 Notices. All notices, demands, and other communications provided for
hereunder will be in writing (including facsimile or similar transmission) and mailed (by
U.S. certified mail, return receipt requested, postage prepaid), sent, or delivered
(including by way of overnight courier service), (i) if to the Company, c/o Matrixx
Initiatives, Inc., 4742 N. 24th Street, Suite 455, Phoenix, Arizona, 85016, Attention:
Chairman, Board of Directors, facsimile no. (602) 385-8850, and to Matthew Feeney, Snell &
Wilmer L.L.P., One Arizona Center, Phoenix, Arizona 85004-0001, facsimile no. (602)
382-6070; and (ii) if to Executive, Carl J. Johnson, c/o Matrixx Initiatives, Inc., 4742
N. 24th Street, Suite 455, Phoenix, Arizona, 85016, Attention: Carl J. Johnson, facsimile
no. (602) 385-8850; or, as to any party, to such other person and/or at such other address
or number as shall be designated by such party in a written notice to the other party.
All such notices, demands, and communications, if mailed, will be effective upon the
earlier of (i) actual receipt by the addressee, (ii) the date shown on the return receipt
of such mailing, or (iii) three (3) days after deposit in the mail. All such notices,
demands, and communications, if not mailed, will be effective upon the earlier of (i)
actual receipt by the addressee, (ii) with respect to facsimile and similar electronic
transmission, the earlier of (x) the time that electronic confirmation of a successful
transmission is received, or (y) the date of transmission, if a confirming copy of the
transmission is also mailed as described above on the date of transmission, and (iii) with
respect to delivery by overnight courier service, the day after deposit with the courier
service, if delivery on such day by such courier is confirmed with the courier or the
recipient orally or in writing.

     6.8 Assignment. This Agreement and any rights hereunder will not be assignable
by either party without the prior written consent of the other party except as otherwise
specifically provided for herein.

     6.9 Entire Understanding. This Agreement constitutes the entire understanding
between the parties hereto and no agreement, representation, warranty or covenant has been
made by either party except as expressly set forth herein.

     6.10 Executive’s Representations. Executive represents and warrants that neither
the execution and delivery of this Agreement nor the performance of Executive’s duties
hereunder violates the provisions of any other agreement to which Executive is a party or
by which Executive is bound.

     6.11 Governing Law. This Agreement will be construed in accordance with and
governed for all purposes by the laws of the State of Arizona applicable to contracts
executed and wholly performed within such state.

18

 

     6.12 Section 409A of the Code. If any payments under this Agreement are subject to
the provisions of Section 409A of the Code, both Executive and the Company agree that this
Agreement will comply fully with and meet all the requirements of Section 409A of the Code.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 

	 	MATRIXX INITIATIVES, INC.	 	 
	 
	 	 	 	 
	 

	 	 

By: William J. Hemelt
	 	 
	 

	 	Its: Chief Financial Officer	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Carl J. Johnson	 	 

19exv10w2

 

EXHIBIT 10.02

AGREEMENT

     This Agreement is entered into between Matrixx Initiatives, Inc., a Delaware corporation
(“Company”), and William J. Hemelt (“Executive”), as of the 18th day of
October, 2006.

     WHEREAS, Executive is the Executive Vice President, Chief Financial Officer and Treasurer of
the Company;

     WHEREAS, the Company has procured a Whole Life Adjustable Policy No. 16-815-283, dated May 22,
2004, on the life of Executive from The Northwestern Mutual Life Insurance Company (the
“Policy”);

     WHEREAS, the Company owns the Policy and pays the premiums on the Policy but a portion of the
death benefit under the Policy is payable to Executive;

     WHEREAS, the Company and Executive desire to specify the terms and conditions under which the
Policy may be transferred to Executive.

     Now, therefore, Company and Executive hereby agree as follows:

1. Transfer of Policy: In the event that any of the following occur:

     (a) The Company or Executive shall terminate Executive’s employment with the Company for any
reason after March 31, 2007; or

     (b) Executive’s employment with the Company shall terminate on account of Total Disability; or

     (c) The Company shall terminate Executive’s employment without Cause on or prior to March 31,
2007; or

     (d) Executive shall terminate his employment with Good Reason on or prior to March 31, 2007;

     THEN the Company shall convey, transfer and assign the Policy to Executive within the 30-day
period following Executive’s termination of employment. Notwithstanding the foregoing, if (i)
Executive is a “specified employee” (as defined in Section 409A of the Internal Revenue Code of
1986, as amended (“Code”)), and (ii) the definition of Good Reason below does not qualify
as an “involuntary” separation from service pursuant to guidance issued under Code Section 409A (or
the Company determines that no other exceptions to Code Section 409A applies), the conveyance,
transfer and assignment of the Policy to Executive shall occur on the first day of the seventh
month following his termination of employment. During any such six month period, the Company shall
cause the Executive’s designated beneficiary to be the sole beneficiary for purposes of the death
benefit under the Policy and, in the event that the Company is paid any portion of the death
benefit under the Policy upon the death of Executive during any such six month period, the Company
shall promptly pay over such
death benefit to Executive’s

 

 

designated beneficiary. Company will be responsible for paying
any insurance premiums that become due and payable during this six-month period. After the
conveyance, transfer and assignment of the Policy to Executive, Executive will own the Policy and
the cash value and death benefit thereunder and will be responsible for payment of any further
premiums due on the Policy.

     In addition to the above, the Company shall also pay to Executive an amount equal to the
“total presumed federal and state taxes” that could be imposed on Executive with respect to the
income tax payable upon the transfer and assignment of the Policy. For purposes of the preceding
sentence, the “total presumed federal and state taxes” that could be imposed on Executive shall be
conclusively calculated by the Company using a combined tax rate equal to the sum of the maximum
marginal federal and state income tax rates and the hospital insurance (or “HI”) portion of
FICA. No adjustments will be made in this combined rate for the deduction of state taxes on the
federal return, the loss of itemized deductions or exemptions, or for any other purpose. Executive
shall be responsible for paying the actual taxes. Such payment will be paid to Executive within
five (5) business days following the transfer of the Policy to Executive.

2. Definitions: For purposes of this Agreement, the following terms will have the
following meanings:

          “Affiliate” of a Person means a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the first Person.
“Control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.

          “Cause” will mean the occurrence of any of the following:

          (a) Executive’s gross and willful misconduct which results in material injury to the
Company;

          (b) Executive’s engaging in fraudulent conduct with respect to the Company’s or any of
its Affiliates’ business or in conduct of a criminal nature that may have an adverse
impact on the Company’s or any of its Affiliates’ standing and reputation;

          (c) The material failure or refusal by Executive to perform the duties required of
Executive pursuant to his employment with the Company, which inappropriate failure or
refusal shall not be cured within thirty (30) days following receipt by Executive of
written notice from the Board of Directors of the Company specifying the factors or events
constituting such failure or refusal;

          (d) Executive’s use of drugs and/or alcohol in violation of then current Company policy;
or

          (e) Executive’s material failure to devote substantially all of Executive’s business
time, attention, skill, and efforts to the faithful performance of Executive’s duties
to the Company, which shall not be cured within thirty (30) days after written notice
thereof to Executive from the Board.

2

 

          “Good Reason” will mean the occurrence of any of the following:

          (a) Executive’s compensation is reduced by the Company; or

          (b) Executive’s function, duties and/or responsibilities are significantly reduced so as
to cause his position with the Company to become of materially less dignity,
responsibility and/or importance than those associated with his functions, duties and/or
responsibilities as of the date of this Agreement; or

          (c) In either event more than once during the term of his employment with the Company,
Executive is required by the Company permanently to relocate his residence or the
Company’s principal business office is relocated more than 60 miles away from its then
current location.

          “Person” means any natural person, firm, partnership, association, corporation, company,
limited liability company, limited partnership, trust, business trust, governmental authority, or
other entity.

          “Total Disability” will mean Executive’s failure substantially to perform Executive’s duties
to the Company on a full-time basis for a period exceeding ninety (90) consecutive days or for
periods aggregating more than one hundred eighty (180) days during any twelve-month period as a
result of incapacity due to physical or mental illness. If there is a dispute as to whether
Executive is or was physically or mentally unable to perform his duties, such dispute will be
submitted for resolution to a licensed physician agreed upon by the Company and Executive, or if an
agreement cannot be promptly reached, the Company and Executive will promptly select a physician,
and if these physicians cannot agree, the physicians will promptly select a third physician whose
decision will be binding on all parties. If such a dispute arises, Executive will submit to such
examinations and will provide such information as such physician(s) may request, and the
determination of the physician(s) as to Executive’s physical or mental condition will be binding
and conclusive. Notwithstanding the foregoing, if Executive participates in any group disability
plan provided by the Company which offers long-term disability benefits, “Total Disability” will
mean total disability as defined therein.

3

 

          IN WITHNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 

	 	MATRIXX INITIATIVES, INC.	 	 
	 
	 	 	 	 
	 

	 	 

By: Carl J. Johnson
	 	 
	 

	 	Its: Chief Executive Officer	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	 

William J. Hemelt
	 	 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]