Document:

Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) is entered into as of [                ], 2014 (the “Effective Date”) by and between Insmed Incorporated, a Virginia corporation (the “Company”), and [                        ] (the “Indemnitee”).

 

RECITALS

 

WHEREAS, the Board of Directors has determined that the inability to attract and retain qualified persons as directors and officers is detrimental to the best interests of the Company and its shareholders and that the Company should act to assure such persons that there shall be adequate certainty of protection through insurance, advancement of expenses, and indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of the Company;

 

WHEREAS, the Company has adopted provisions in its Articles of Incorporation providing for indemnification and advancement of expenses of its directors and officers under the Virginia Stock Corporation Act (the “VSCA”), and the Company wishes to clarify and enhance the rights and obligations of the Company and the Indemnitee with respect to indemnification and advancement of expenses, as authorized by the Articles of Incorporation and Section 13.1-704 of the VSCA;

 

WHEREAS, in order to induce and encourage highly experienced and capable persons such as the Indemnitee to serve and continue to serve as directors and officers of the Company and in any other capacity with respect to the Company as the Company may request, and to otherwise promote the desirable end that such persons shall resist what they consider unjustified lawsuits and claims made against them in connection with the good faith performance of their duties to the Company, with the knowledge that certain costs, judgments, penalties, fines, liabilities, and expenses incurred by them in their defense of such litigation are to be borne by the Company and they shall receive the maximum protection against such risks and liabilities as may be afforded by applicable law, the Board of Directors of the Company has determined that the following Agreement is reasonable and prudent to promote and ensure the best interests of the Company and its shareholders; and

 

WHEREAS, the Company desires to have the Indemnitee continue to serve as a director or officer of the Company and in any other capacity with respect to the Company as the Company may request, as the case may be, free from undue concern for unpredictable, inappropriate, or unreasonable legal risks and personal liabilities by reason of the Indemnitee acting in good faith in the performance of the Indemnitee’s duty to the Company; and the Indemnitee desires to continue so to serve the Company, provided, and on the express condition, that he or she is furnished with the protections set forth hereinafter.

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the Indemnitee’s continued service as a director or officer of the Company, the parties hereto agree as follows:

 

1.                                      Definitions.  For purposes of this Agreement:

 

(a)                                 A “Change in Control” will be deemed to have occurred if the individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to such effective date whose election, or nomination for election by the shareholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors.

 

(b)                                 “Disinterested Director” means a director of the Company who was a director of the Company at the time of the occurrence giving rise to the Proceeding in respect of which indemnification is being sought by the Indemnitee and who is not at the time action is to be taken under this Agreement a party to such Proceeding.

 

(c)                                  “Expenses” means reasonable expenses incurred in connection with or resulting from any threatened, pending, or completed action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative, or legislative hearing, investigation, or any other proceeding, whether brought by or in the right of the Company or otherwise, including any and all appeals, whether of a civil, criminal, administrative, arbitrative, legislative, investigative, or other nature, and whether formal or informal, including, without limitation, reasonable attorneys’ fees, witness fees and expenses, fees and expenses of accountants and other advisors, retainers and disbursements and advances thereon, the premium, security for, and other costs relating to any bond (including cost bonds, appraisal bonds, or their equivalents), and reasonable expenses of establishing a right to indemnification or advancement under Sections 9, 11, 13, and 16 hereof, but shall not include the amount of judgments, fines, ERISA excise taxes, or penalties actually levied against the Indemnitee, or any amounts paid in settlement by or on behalf of the Indemnitee.

 

(d)                                 “Independent Counsel” means the law firm or a member of the law firm that was last designated by the Board of Directors as the Company’s principal Virginia legal counsel prior to the time of the occurrence giving rise to the Proceeding in respect of which indemnification is being sought by the Indemnitee; or if such Virginia legal counsel is unwilling to so serve for any reason, then legal counsel licensed in the Commonwealth of Virginia and mutually acceptable to the Board of Directors and the Indemnitee; or, in the event that a Change in Control has occurred, such legal counsel licensed in the Commonwealth of Virginia as is selected by the Indemnitee.  Notwithstanding the foregoing, the term “Independent Counsel”

 

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shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right to indemnification under this Agreement.

 

(e)                                  “Other Enterprise” means any other foreign or domestic corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or other entity.  For clarity, service as a trustee or as a member of a management or similar committee of a partnership, joint venture, or limited liability company shall be considered service as a director, officer, or employee of the trust, partnership, joint venture, or limited liability company.

 

(f)                                   “Proceeding” means any threatened, pending, or completed action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative, or legislative hearing, investigation, or any other proceeding, whether brought by or in the right of the Company or otherwise, including any and all appeals, whether of a civil, criminal, administrative, arbitrative, legislative, investigative, or other nature, and whether formal or informal, in which the Indemnitee is or may become involved, as a party or otherwise, by reason of the fact that the Indemnitee is or was a director, officer, employee, agent, or trustee of the Company or while a director, officer, employee, agent, or trustee of the Company is or was serving at the request of the Company as a director, officer, manager, partner, trustee, employee, or agent of any Other Enterprise, or by reason of anything done or not done by the Indemnitee in any such capacity, whether or not the Indemnitee is serving in such capacity at the time any liability is incurred for which indemnification or advancement can be provided under this Agreement.

 

2.                                      Service by the Indemnitee.  The Indemnitee shall serve and/or continue to serve as a director or officer of the Company faithfully and to the best of the Indemnitee’s ability so long as the Indemnitee is duly elected or appointed and until such time as the Indemnitee’s successor is elected and qualified or the Indemnitee is removed as permitted by applicable law or tenders a resignation.

 

3.                                      Indemnification and Advancement of Expenses.  The Company shall, to the fullest extent permitted by law and the Company’s Articles of Incorporation, indemnify and hold harmless the Indemnitee, and shall pay to the Indemnitee in advance of the final disposition of any Proceeding all Expenses incurred by the Indemnitee with respect to any such Proceeding, except as otherwise provided in this Agreement.  Without diminishing the scope of the rights provided by this Section, the rights of the Indemnitee to indemnification and advancement of Expenses provided hereunder shall include but shall not be limited to those rights hereinafter set forth, except that no indemnification or advancement of Expenses shall be paid to the Indemnitee:

 

(a)                                 to the extent expressly prohibited by applicable law or the Articles of Incorporation or Bylaws of the Company; 

 

(b)                                 for and to the extent that payment is actually made to the Indemnitee under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, provision of the articles of incorporation or bylaws, or agreement of the Company or any other

 

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company or other enterprise (and the Indemnitee shall reimburse the Company for any amounts paid by the Company and subsequently so recovered by the Indemnitee); or

 

(c)                                  in connection with an action, suit, or proceeding, or part thereof initiated by the Indemnitee (including claims and counterclaims, whether such counterclaims are asserted by (i) the Indemnitee, or (ii) the Company in an action, suit, or proceeding initiated by the Indemnitee), except a judicial proceeding or arbitration pursuant to Section 11 to enforce rights under this Agreement, unless the action, suit, or proceeding, or part thereof, was authorized or ratified by the Board of Directors of the Company.

 

4.                                      Proceedings Other than an Action by or in the Right of the Company.  Except as limited by Section 3 above, the Indemnitee shall be entitled to the indemnification rights provided in this Section if the Indemnitee is or may become involved, as a party or otherwise, in any Proceeding (other than an action by or in the right of the Company) by reason of the fact that the Indemnitee is or was a director, officer, employee, agent, or trustee of the Company or while a director, officer, employee, agent, or trustee of the Company is or was serving at the request of the Company as a director, officer, manager, partner, trustee, employee, or agent of any Other Enterprise, or by reason of anything done or not done by the Indemnitee in any such capacity.  Pursuant to this Section, the Indemnitee shall be indemnified against all liability (including judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses) incurred by the Indemnitee in connection with such Proceeding, unless the Indemnitee engaged in willful misconduct or a knowing violation of the criminal law.

 

5.                                      Indemnity in Proceedings by or in the Right of the Company.  Except as limited by Section 3 above, the Indemnitee shall be entitled to the indemnification rights provided in this Section if the Indemnitee is or may become involved, as a party or otherwise, in any Proceeding brought by or in the right of the Company by reason of the fact that the Indemnitee is or was a director, officer, employee, agent, or trustee of the Company or while a director, officer, employee, agent, or trustee of the Company is or was serving at the request of the Company as a director, officer, manager, partner, trustee, employee, or agent of any Other Enterprise, or by reason of anything done or not done by the Indemnitee in any such capacity.  Pursuant to this Section, the Indemnitee shall be indemnified against all liability (including judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses) incurred by the Indemnitee in connection with such Proceeding, unless the Indemnitee engaged in willful misconduct or a knowing violation of the criminal law.

 

6.                                      Indemnification for Costs, Charges, and Expenses of Successful Party.  Notwithstanding any limitations of Sections 3(c), 4 and 5 above, to the extent that:  (a) the Indemnitee has entirely prevailed, on the merits or otherwise, in defense of any Proceeding, or in defense of any claim, issue, or matter therein, including, without limitation, the dismissal of any action without prejudice, or (b) it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that the Indemnitee is otherwise entitled to be indemnified against Expenses, the Indemnitee shall be indemnified against all Expenses incurred by the Indemnitee in connection therewith.

 

7.                                      Partial Indemnification.  If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the liability (including

 

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judgments, fines, ERISA excise taxes or penalties, amounts paid in settlement by or on behalf of the Indemnitee, and Expenses) incurred in connection with any Proceeding, or in connection with any judicial proceeding or arbitration pursuant to Section 11 to enforce rights under this Agreement, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such liability incurred to which the Indemnitee is entitled.

 

8.                                      Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the maximum extent permitted by the VSCA, the Indemnitee shall be entitled to indemnification against all Expenses incurred by the Indemnitee or on the Indemnitee’s behalf if the Indemnitee appears as a witness or otherwise incurs legal expenses as a result of or related to the Indemnitee’s service as a director or officer of the Company, in any threatened, pending, or completed action, suit, arbitration, alternative dispute mechanism, inquiry, judicial, administrative, or legislative hearing, investigation, or any other  proceeding, including any and all appeals, whether of a civil, criminal, administrative, arbitrative, legislative, investigative, or other nature, and whether formal or informal, to which the Indemnitee neither is, nor is threatened to be made, a party.

 

9.                                      Determination of Entitlement to Indemnification.  To receive indemnification under this Agreement, the Indemnitee shall submit a written request to the Secretary of the Company.  Such request shall include documentation or information that is necessary for such determination and is reasonably available to the Indemnitee.  Upon receipt by the Secretary of the Company of a written request by the Indemnitee for indemnification, except to the extent required pursuant to Section 6, the indemnification shall be paid unless the following person or persons determine that the Indemnitee has engaged in willful misconduct or a knowing violation of the criminal law:  (a) the Board of Directors of the Company by a majority vote of Disinterested Directors, provided there are at least five such Disinterested Directors (and which majority shall for such purpose constitute a quorum); (b) a committee of at least five Disinterested Directors designated by a majority vote of the Disinterested Directors; (c) if there are not at least five Disinterested Directors, by Independent Counsel in a written opinion to the Company, a copy of which shall be delivered to the Indemnitee; or (d) in the event that a Change in Control has occurred, by Independent Counsel in a written opinion to the Company, a copy of which shall be delivered to the Indemnitee.  In the event that a Change in Control has occurred, Independent Counsel shall be selected by the Indemnitee.  If the Board of Directors and Indemnitee are entitled to select such Independent Counsel for the reasons described in Section 1(d) and cannot mutually agree on such selection (or upon failure of the Indemnitee to select such Independent Counsel, in the event a Change in Control has occurred), such Independent Counsel shall be selected upon application to a court of competent jurisdiction.  Unless a determination is made that the Indemnitee is not entitled to indemnification, such indemnification shall be paid in full by the Company not later than 60 calendar days after receipt by the Secretary of the Company of a written request for indemnification.  If the Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, the person or persons charged with making the determination under this Section shall reasonably prorate such partial indemnification among the claims, issues, or matters at issue at the time of the determination.

 

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10.                               Presumptions and Effect of Certain Proceedings.  The Secretary of the Company shall, promptly upon receipt of the Indemnitee’s written request for indemnification, advise in writing the Board of Directors or such other person or persons empowered to make the determination as provided in Section 9 that the Indemnitee has made such request for indemnification.  Upon making such request for indemnification, the Indemnitee shall be presumed to be entitled to indemnification hereunder, unless the Company establishes by a preponderance of the evidence that the Indemnitee engaged in willful misconduct or a knowing violation of the criminal law.  If a determination that the Indemnitee engaged in such conduct is not made pursuant to Section 9 within 60 calendar days after receipt by the Secretary of the Company of a written request for indemnification, the Indemnitee shall be absolutely entitled to indemnification, absent actual fraud in the request for indemnification, and such indemnification shall be paid.  The termination of any Proceeding described in Sections 4 or 5 by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself:  (a) create a presumption that the Indemnitee engaged in willful misconduct or a knowing violation of the criminal law, or (b) otherwise adversely affect the rights of the Indemnitee to indemnification except as may be provided herein.

 

11.                               Remedies of the Indemnitee in Cases of Determination Not to Indemnify or to Advance Expenses; Right to Bring Suit.  In the event that a determination is made that the Indemnitee is not entitled to indemnification hereunder or if payment is not timely made pursuant to Sections 9 and 10, or if an advancement of Expenses is not timely made pursuant to Section 16, the Indemnitee may at any time thereafter bring suit against the Company in a court of competent jurisdiction in the Commonwealth of Virginia seeking an adjudication of entitlement to such indemnification or advancement of Expenses.  Alternatively, the Indemnitee at the Indemnitee’s option may seek an award in an arbitration to be conducted by a single arbitrator in the Commonwealth of Virginia pursuant to the rules of the American Arbitration Association, such award to be made within 60 calendar days following the filing of the demand for arbitration.  The Company shall not oppose the Indemnitee’s right to seek any such adjudication or award in arbitration.  Notwithstanding any other provision of this Agreement, in any suit or arbitration brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit or arbitration brought by the Indemnitee to enforce a right to an advancement of Expenses), it shall be a defense that the Indemnitee engaged in willful misconduct or a knowing violation of the criminal law.  Further, in any suit brought by the Company to recover an advancement of Expenses pursuant to the terms of an undertaking, the Company shall be entitled to recover such Expenses upon a final judicial decision of a court of competent jurisdiction from which there is no further right to appeal that the Indemnitee engaged in willful misconduct or a knowing violation of the criminal law.  Neither the failure of the Company (including the Disinterested Directors, a committee of Disinterested Directors or Independent Counsel) to have made a determination prior to the commencement of such suit or arbitration that the Indemnitee engaged in such conduct, nor an actual determination by the Company (including the Disinterested Directors, a committee of Disinterested Directors or Independent Counsel) that the Indemnitee engaged in such conduct, shall create a presumption that the Indemnitee engaged in such conduct, or, in the case of such a suit brought by the Indemnitee, be a defense to such suit.  In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of Expenses hereunder, or brought by the Corporation to recover an advancement of Expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section 11 or otherwise shall

 

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be on the Company, which must establish such burden by a preponderance of the evidence.  The Company further agrees to stipulate in any court or before any arbitrator pursuant to this Section 11 that the Company is bound by all the provisions of this Agreement and is precluded from making any assertions to the contrary.  If the court or arbitrator shall determine that the Indemnitee is entitled to any indemnification or advancement of Expenses hereunder, the Company shall indemnify the Indemnitee for all Expenses incurred by the Indemnitee in connection with such adjudication or award in arbitration (including, but not limited to, any appellate proceedings) to the fullest extent permitted by law, and in any suit brought by the Company to recover an advancement of Expenses pursuant to the terms of an undertaking, the Company shall indemnify the Indemnitee for all Expenses incurred by the Indemnitee in connection with such suit to the extent the Indemnitee has been successful, on the merits or otherwise, in whole or in part, in defense of such suit, to the fullest extent permitted by law.

 

12.                               Non-Exclusivity of Rights.  The rights to indemnification and to the advancement of Expenses provided by this Agreement shall not be deemed exclusive of any other right that the Indemnitee may now or hereafter acquire under any applicable law, agreement, vote of shareholders or Disinterested Directors, provisions of the articles of incorporation or bylaws (including the Articles of Incorporation or Bylaws of the Company), or otherwise.

 

13.                               Expenses to Enforce Agreement.  In the event that the Indemnitee is subject to or intervenes in any action, suit, or proceeding in which the validity or enforceability of this Agreement is at issue or seeks an adjudication or award in arbitration to enforce the Indemnitee’s rights under, or to recover damages for breach of, this Agreement, the Indemnitee, if the Indemnitee prevails in whole or in part in such action, suit, or proceeding, shall be entitled to recover from the Company and shall be indemnified by the Company against any Expenses incurred by the Indemnitee in connection therewith.

 

14.                               Continuation of Indemnity.  All agreements and obligations of the Company contained herein shall continue during the period the Indemnitee is a director, officer, employee, agent, or trustee of the Company or while a director, officer, employee, agent, or trustee is serving at the request of the Company as a director, officer, manager, partner, trustee, employee, or agent of any Other Enterprise, and shall continue thereafter with respect to any possible claims based on the fact that the Indemnitee was a director, officer, employee, agent, or trustee of the Company or was serving at the request of the Company as a director, officer, manager, partner, trustee, employee, or agent of any Other Enterprise.  This Agreement shall be binding upon all successors and assigns of the Company (including any transferee of all or substantially all of its assets and any successor by merger, conversion or operation of law) and shall inure to the benefit of the Indemnitee’s heirs, executors, and administrators.  To the extent that a change in applicable law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Articles of Incorporation or Bylaws of the Company, or under this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change, except to the extent any such indemnification or advancement of Expenses is expressly prohibited by this Agreement.

 

15.                               Notification and Defense of Proceeding.  Promptly after receipt by the Indemnitee of notice of any Proceeding, the Indemnitee shall, if a request for indemnification or an

 

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advancement of Expenses in respect thereof is to be made against the Company under this Agreement, notify the Company in writing of the commencement thereof; but the omission so to notify the Company shall not relieve it from any liability that it may have to the Indemnitee.  Notwithstanding any other provision of this Agreement, with respect to any such Proceeding of which the Indemnitee notifies the Company:

 

(a)                                 The Company shall be entitled to participate therein at its own expense;

 

(b)                                 Except as otherwise provided in this Section 15(b), to the extent that it may wish, the Company, jointly with any other indemnifying party similarly notified, shall be entitled to assume the defense thereof, with counsel satisfactory to the Indemnitee.  After notice from the Company to the Indemnitee of its election so to assume the defense thereof, the Company shall not be liable to the Indemnitee under this Agreement for any expenses of counsel subsequently incurred by the Indemnitee in connection with the defense thereof except as otherwise provided below.  The Indemnitee shall have the right to employ the Indemnitee’s own counsel in such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of the defense of such Proceeding, or (iii) the Company shall not within 60 calendar days of receipt of notice from the Indemnitee in fact have employed counsel to assume the defense of the Proceeding, in each of which cases the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company.  The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which the Indemnitee shall have made the conclusion provided for in (ii) above; and

 

(c)                                  Notwithstanding any other provision of this Agreement, the Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, or for any judicial or arbitral award if the Company was not given an opportunity, in accordance with this Section 15, to participate in the defense of such Proceeding.  The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on or disclosure obligation with respect to the Indemnitee without the Indemnitee’s written consent.  Neither the Company nor the Indemnitee shall unreasonably withhold its consent to any proposed settlement.

 

16.                               Advancement of Expenses.

 

(a)                                 Except as provided in Section 16(b) below, all Expenses incurred by the Indemnitee with respect to any Proceeding described in Section 4 or 5 shall be paid by the Company in advance of the final disposition of such Proceeding at the request of the Indemnitee.  To receive an advancement of Expenses under this Agreement, the Indemnitee shall submit a written request to the Secretary of the Company.  Such request shall reasonably evidence the Expenses incurred by the Indemnitee and shall include or be accompanied by (i) a signed written statement of the Indemnitee’s good faith belief that he or she has not engaged in willful misconduct or a knowing violation of the criminal law, and (ii) a written undertaking, signed by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be 

 

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determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that the Indemnitee is not entitled to be indemnified for such Expenses by the Company as provided by this Agreement or otherwise.  The Indemnitee’s undertaking to repay any such amounts is not required to be secured, and such undertaking shall be accepted without reference to the Indemnitee’s final ability to make repayment.  Each such advancement of Expenses shall be made within 20 calendar days after the receipt by the Secretary of the Company of such written request.  The Indemnitee’s entitlement to Expenses under this Agreement shall include those incurred in connection with any action, suit, or proceeding by the Indemnitee seeking an adjudication or award in arbitration pursuant to Section 11 of this Agreement (including the enforcement of this provision) to the extent the court or arbitrator shall determine that the Indemnitee is entitled to an advancement of Expenses hereunder.

 

17.                               Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever:  (a) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that are not by themselves invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal, or unenforceable, that are not themselves invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent of the parties that the Company provide protection to the Indemnitee to the fullest enforceable extent.

 

18.                               Headings; References; Pronouns.  The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.  References herein to section numbers are to sections of this Agreement.  All pronouns and any variations thereof shall be deemed to refer to the singular or plural as appropriate.

 

19.                               Other Provisions.

 

(a)                                 This Agreement and all disputes or controversies arising out of or related to this Agreement shall be governed by, and construed in accordance with, the internal laws of the Commonwealth of Virginia, without regard to the laws of any other jurisdiction that might be applied because of conflicts of laws principles of the Commonwealth of Virginia.

 

(b)                                 This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.

 

(c)                                  This Agreement shall not be deemed an employment contract between the Company and any Indemnitee who is an officer of the Company, and, if the Indemnitee is an officer of the Company, the Indemnitee specifically acknowledges that the Indemnitee may be discharged at any time for any reason, with or without cause, and with or without severance compensation, except as may be otherwise provided in a separate written contract between the Indemnitee and the Company.

 

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(d)                                 In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

 

(e)                                  This Agreement may not be amended, modified, or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party.  No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, and no single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, shall preclude any other or further exercise thereof or the exercise of any other right or power.

 

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IN WITNESS WHEREOF, the Company and the Indemnitee have caused this Agreement to be executed as of the date first written above.

 

	
 
    	
 
    	
 
    
	
 
    	
INSMED   INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
IndemniteeEXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into as of January 14, 2014, between Helen of Troy Nevada Corporation, a Nevada corporation (the “Company”), and Julien Mininberg (the “Executive”).

 

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and subject to the conditions set forth in this Agreement.

 

NOW THEREFORE, in consideration of the mutual promises contained in this Agreement, the parties hereto agree as follows:

 

1.                                      Employment and Effective Date. The Company agrees to employ Executive as Chief Executive Officer of the Company.  Executive shall also serve as Chief Executive Officer of Helen of Troy Limited, a Bermuda company (“Helen of Troy”), and agrees to serve in such additional positions as are reasonably assigned to the Executive by the Company and the Board of Directors (the “Board”) of Helen of Troy, from time to time, during the Term (as defined below).  Executive accepts such employment and such appointments, on the terms and subject to the conditions set forth in this Agreement.  The effective date of this Agreement (the “Effective Date”) shall be March 1, 2014.  Except as provided in Section 4(b)(v), neither the Company nor Executive shall have any obligations hereunder and the Company shall have no obligation to provide any compensation or benefit or make any payment under this Agreement, in each case, until the Effective Date.

 

2.                                      Duties.

 

(a)                                 Executive shall during the Term (as defined below), subject to the control of the Board, have the executive powers of the Chief Executive Officer and exercise active management and supervision over the business and affairs of Helen of Troy and its subsidiaries and its several officers and shall perform such executive and/or administrative duties consistent with the office of Chief Executive Officer of Helen of Troy and the Company as from time to time may be assigned to him by the Board in its judgment and discretion. Executive shall report to the Board.

 

(b)                                 During the Term, Executive shall devote his entire professional business time and all reasonable efforts to his employment and perform diligently his duties under this Agreement.  Notwithstanding the foregoing, with prior written approval of the Board, Executive may serve on one “for profit” Board of a public company and no more than two “not for profit” governing bodies of charities and/or educational institutions so long as such service does not unreasonably interfere with Executive’s performance of his obligations hereunder.

 

(c)                                  Executive understands that El Paso, Texas is the headquarters of Helen of Troy and agrees that he will devote as much time as deemed required by the Board in El Paso, Texas in performance of his duties under this Agreement. Executive agrees to purchase a home and 

 

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establish residence in El Paso, Texas, as soon as reasonably practical after July 31, 2015, unless otherwise consented to by the Board.

 

(d)                                 Executive understands and agrees that there will be reasonable domestic and international travel for business purposes customarily required of Executive in his capacity as Chief Executive Officer of Helen of Troy.

 

3.                                      Term.  Subject to Section 4 below, the term of this Agreement shall commence on March 1, 2014 and shall continue until March 1, 2016 (the “Term”).  The parties hereto agree that commencing nine months prior to the expiration of the Term, there will be a negotiation period that will continue for a period of no longer than three consecutive months (the “Negotiation Period”). During the Negotiation Period, and subject to the provisions herein relating to termination of this Agreement, the parties hereto shall participate in good faith negotiations regarding the possible extension of the Term, or the entry into a separate employment agreement.  Executive shall be responsible for initiating the Negotiation Period by contacting the Company pursuant to the notice provisions in Section 9(g) herein.  Nothing herein shall bind either party hereto to an extension of the Term or any particular procedure for negotiation and neither party is required to continue negotiations or enter into any definitive agreement regarding any extension of the Term or any separate employment agreement after the Negotiation Period.  For the avoidance of doubt, the non-renewal or non-extension of the Term shall not entitle Executive to any payment of severance pursuant to Sections 4 or 6 or to any other right or benefit hereunder.

 

4.                                      Compensation.  During the Term, the Company shall pay or provide, as the case may be, to Executive the compensation and other benefits and rights set forth in this Section 4.

 

(a)                                 Annual Base Salary. During the Term, the Company shall pay to Executive an annual base salary of no less than $900,000 per year (the “Base Salary”), payable in accordance with the Company’s usual pay practices (and in any event no less frequently than monthly).  The Base Salary shall be reviewed by the Compensation Committee annually.

 

(b)                                 Annual Incentive Bonus.  During the Term, Executive shall be eligible to participate in the Helen of Troy Limited 2011 Annual Incentive Plan and any successor annual incentive plan in which executive officers of Helen of Troy are eligible to participate (as amended, restated or modified from time to time, the “Annual Incentive Plan”). Any incentive award under this Section 4(b) shall be subject to, and governed by, the terms and requirements of the Annual Incentive Plan and the following applicable terms and conditions:

 

(i)                                     Fiscal Year Performance Period.  For the performance period commencing March 1, 2014 and ending February 28, 2015, Executive shall be eligible to receive an annual performance bonus (the “Fiscal 2015 APB”) targeted at $1,800,000, with the opportunity to earn up to $2,970,000 and a threshold achievement payout of $900,000.  The Fiscal 2015 APB shall be based on the achievement of adjusted net income growth (based on net income without asset impairment charges) and net sales growth.  Eighty percent (80%) of any Fiscal 2015 APB shall be based on the achievement of such adjusted net income growth performance measure and twenty 

 

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percent (20%) of any Fiscal 2015 APB shall be based on the achievement of the net sales growth performance measure.  Notwithstanding the foregoing, no Fiscal 2015 APB shall be earned or payable if such adjusted net income growth threshold is not achieved and Executive shall not be entitled to a bonus with respect to any such performance measure if the threshold amount associated with such performance measure is not achieved.  The Fiscal 2015 APB shall be on such other terms as determined by the Compensation Committee of the Board (the “Compensation Committee”).

 

(ii)                                  Post Fiscal 2015 Performance Periods. The performance goals, target awards, thresholds, maximums and other terms of annual incentive bonuses with respect to any performance period commencing after February 28, 2015 shall be determined at the sole discretion of the Compensation Committee.

 

(iii)                               Certain Conditions.

 

(A)                               Completion of the Performance Period.  For purposes of this Agreement, the Annual Incentive Plan and any award agreement granted thereunder, Executive shall not be deemed to be eligible for or to have “earned” any performance-based award under this Agreement, the Annual Incentive Plan or such award agreement unless the applicable performance period has been fully completed and the applicable performance goals have been achieved.

 

(B)                               Continued Employment; No Pro-Rata Awards. Except to the extent expressly set forth in Section 6(b)(iii), to qualify for any incentive bonus under the Annual Incentive Plan, Executive must remain employed with Helen of Troy through the last day of the performance period for which such incentive award is payable. For avoidance of doubt, except to the extent expressly set forth in Section 6(b)(iii), Executive shall not be entitled to any pro-rata portion of any annual incentive award for a partial performance period if his employment is terminated at any point on or prior to the last day of the performance period for which such incentive award is payable.

 

(iv)                              Award Not Guaranteed. The grant of any annual incentive award does not constitute a promise of achievement of such award or payment.

 

(v)                                 Awards Granted Prior to this Agreement. With respect to any performance period ending on or prior to February 28, 2014, Executive shall continue to be entitled to receive the annual cash bonus pursuant to the same performance conditions, payment, vesting and other terms and conditions of the award granted to Executive pursuant to the Kaz, Inc. 2011 Long-

 

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Term Incentive Plan (amended and restated as of March 1, 2012) and the Kaz FY14 Incentive Compensation Plan.

 

(c)                                  Long Term Incentive Compensation.  During the Term, Executive shall be entitled to participate in the Helen of Troy 2008 Stock Incentive Plan and any successor stock or long-term incentive plan in which executive officers of Helen of Troy are eligible to participate (as amended, restated or modified from time to time, the “Long Term Incentive Plan”).  Any incentive award under this Section 4(c) shall be subject to, and governed by, the terms and requirements of the Long Term Incentive Plan and the following applicable terms and conditions.

 

(i)                                     Initial Performance Period.  For the performance period commencing March 1, 2014 and ending February 28, 2017, Executive shall be eligible to receive a long term performance bonus (the “Fiscal 2015 LTPB”) targeted at $1,500,000, with the opportunity to earn up to $3,000,000 and a threshold achievement payout of $750,000.  The Fiscal 2015 LTPB shall be based on the achievement of adjusted earnings per share growth (based on earnings per share without asset impairment charges), adjusted cash flow productivity and relative total shareholder return.  Fifty percent (50%) of any Fiscal 2015 LTPB shall be based on the achievement of such adjusted earnings per share growth performance measure, twenty-five percent (25%) of any Fiscal 2015 LTPB shall be based on the achievement of the adjusted cash flow productivity performance measure and twenty-five percent (25%) of any Fiscal 2015 LTPB shall be based on the achievement of the relative total shareholder return performance measure.  Executive shall not be entitled to a bonus with respect to any such performance measure if the threshold amount associated with such performance measure is not achieved.  With respect to the Fiscal 2015 LTPB, Executive shall be granted performance-based restricted stock units (“RSUs”) under the Long Term Incentive Plan.  The number of common shares of Helen of Troy subject to the RSU shall be equal to the maximum opportunity for the Fiscal 2015 LTPB divided by the Fair Market Value (as such term is defined under the Long Term Incentive Plan) of a common share of Helen of Troy on the date of the grant of the Fiscal 2015 LTPB award (rounded up to the next whole share).  The Fiscal 2015 LTPB shall be on such other terms as determined by the Compensation Committee.

 

(ii)                                  Post Fiscal 2015 Performance Periods. The performance goals, target awards, thresholds, maximums and other terms of long term incentive bonuses with respect to any performance period commencing after February 28, 2015 shall be determined at the sole discretion of the Compensation Committee.

 

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(iii)                               Certain Conditions.

 

(A)                               Completion of the Performance Period. For purposes of this Agreement, the Long Term Incentive Plan and any award agreement granted thereunder, Executive shall not be deemed to be eligible for or to have “earned” any performance-based award under the Long Term Incentive Plan or such award agreement unless the applicable performance period has been fully completed and the applicable performance goals have been achieved.

 

(B)                               Continued Employment; No Pro-Rata Awards. Except to the extent expressly set forth in Section 6(b)(iii), to qualify for any incentive payment under the Long Term Incentive Plan, Executive must remain employed with Helen of Troy through the last day of the performance period for which such incentive payment is payable. For avoidance of doubt, except to the extent expressly set forth in Section 6(b)(iii), Executive shall not be entitled to any pro-rata portion of any long term incentive award for a partial performance period if his employment is terminated at any point on or prior to the last day of the performance period for which such incentive award is payable.

 

(iv)                              Award Not Guaranteed. The grant of any long term incentive award does not constitute a promise of achievement of such award or payment.

 

(d)                                 Life Insurance.  The Company and Executive have entered into an Endorsement Split Dollar Agreement with respect to a policy issued by Lincoln National Life Insurance Company (the “Policy”) in the face amount of $5,000,000.00 on the life of Executive (the “Insurance Agreement”).  Effective as of May 18, 2014, Kaz USA, Inc. shall transfer ownership of and assign all rights under the Policy to Executive.  For the avoidance of doubt, (i) Kaz USA, Inc. shall pay and be responsible for the annual premium through the date ending immediately prior to May 18, 2014, and (ii) Executive shall pay and be responsible for all premiums payable in respect of the Policy from and after May 18, 2014.  After May 18, 2014, Helen of Troy and its subsidiaries shall no longer have any obligations with respect to the Policy or under the Insurance Agreement with respect to the Policy so transferred and all rights and obligations of Kaz USA, Inc. under the Insurance Agreement with respect to the Policy so transferred shall be terminated in accordance with the terms thereof.  Executive and the Company agree that the value of the Policy for tax purposes shall be equal to the cash surrender value of the Policy as of May 18, 2014.

 

(e)                                  Other Benefits. During the Term, the Company shall provide to Executive such health and welfare benefits as may be generally available to other employees of the Company.  Executive shall participate in all retirement and other benefit plans of the Company generally available from time to time to employees of the Company and for which Executive qualifies under the terms of such plans. Executive shall be entitled to six (6) weeks of vacation and such periods of sick leave allowance each year as are determined by the Company for all employees of the Company.

 

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(f)                                   Expense Reimbursement.  The Company shall reimburse Executive for reasonable travel and other expenses incurred by Executive, including, without limitation travel and lodging for Executive for trips to El Paso, Texas prior to the time he purchases a home and establishes residence in El Paso, Texas pursuant to this Agreement in connection with the Executive’s performance of his duties to carry out the Company’s business, subject to Helen of Troy’s written policies, procedures and practices.  When the Executive purchases a home and establishes residence pursuant to Section 2(c), Executive shall be reimbursed for his reasonable moving expenses incurred in moving to El Paso, Texas.

 

5.                                      Termination.

 

(a)                                 Death.  Executive’s employment hereunder shall automatically terminate upon his death.

 

(b)                                 Disability. In the event Executive incurs a Disability for a continuous period of one-hundred twenty (120) consecutive days or one hundred eighty (180) cumulative days in any calendar year, the Company may, at its election, terminate Executive’s employment by providing Executive prior written notice of termination.  The term “Disability” shall mean any disability or incapacity that so impairs Executive’s mental or physical health that it prevents him from performing the essential functions of his job with or without a reasonable accommodation.

 

(c)                                  Cause.  The Company may terminate Executive’s employment for Cause by providing written notice, which shall set forth in reasonable detail the facts and circumstances constituting Cause.  Such termination shall be effective immediately upon the delivery of such notice; provided that solely in the case of any event constituting a termination for Cause that is capable of being cured or corrected and not cured or corrected as provided under clauses (iv) or (v) below, such termination shall be effective upon the expiration of thirty (30) days following the date of the delivery of written notice of such event by the Company.  “Cause” shall mean:

 

(i)                                     Executive’s commission of an act of fraud, embezzlement or similar action; Executive’s conviction of, or plea of guilty or no contest to, (A) any felony, (B) any crime involving fraud, embezzlement, or (C) other defalcation or any crime involving moral turpitude;

 

(ii)                                  Executive’s commission of any act of dishonesty which are injurious to the business reputation of the Company or Executive’s violation of the Company’s insider trading policy;

 

(iii)                               Executive’s failure to perform his material duties under this Agreement, including without limitation, the failure to follow the directions of the Board;

 

(iv)                              Executive’s breach of any material provision of this Agreement which, if in the Board’s determination is capable of being cured or corrected, such breach is not cured or corrected by Executive within thirty (30) days of receiving written notice thereof from the Company;

 

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(v)                                 Executive’s material breach of any written policy of the Company or Helen of Troy, including but not limited to the Code of Ethics for the Chief Executive Officer and Senior Financial Officers of Helen of Troy Limited, which, if in the Board’s determination is capable of being cured or corrected, such breach is not cured or corrected by Executive within thirty (30) days of receiving written notice thereof from the Company; or

 

(vi)                              The breach of any fiduciary duty owed to the Company, Helen of Troy and/or its’ shareholders, which is deemed to be material in the reasonable judgment of the Board.

 

(d)                                 Good Reason.  Executive may terminate his employment at any time during the Term for Good Reason by providing the Company and the Board prior written notice which shall set forth in reasonable detail the facts and circumstances constituting Good Reason. “Good Reason” shall mean any of the following if such event occurs without the consent of Executive:

 

(i)                                     Executive shall fail to be vested by Helen of Troy with the powers and authority of the Chief Executive Officer of Helen of Troy, or if the provision of the bye-laws of Helen of Troy describing the relative duties and responsibilities of the Chief Executive Officer, as in effect on the Effective Date, are changed in any material respect;

 

(ii)                                  a significant change by the Company or Helen of Troy in Executive’s functions, duties or responsibilities which change would cause Executive’s position with the Company or Helen of Troy to become of less dignity, responsibility, importance or scope from the position and attributes thereof described in Sections 1 and 2 above;

 

(iii)                               other breach of a material provision of this Agreement by the Company;

 

(iv)                              the Company requires Executive to move his residence more than fifty miles from El Paso, Texas; or

 

(v)                                 the refusal of any successor to assume this Agreement in accordance with the terms and conditions of Section 9(n).

 

Notwithstanding anything to the contrary contained herein, no termination for Good Reason shall occur unless (A) the Executive delivers written notice to the Company of the occurrence of the event described in this Section 5(d) that constitutes “Good Reason” within ninety (90) days of the Executive learning of the initial existence of the event, (B) the Company or Helen of Troy, as applicable, fails to remedy the event within thirty (30) days of the delivery of such notice and (C) the Executive terminates his employment no later than thirty (30) days following the end of such cure period.

 

(e)                                  Voluntary Termination. Upon ninety (90) days’ prior written notice to the Company, Executive may voluntarily terminate his employment with the Company.

 

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(f)                                   Termination without Cause. The Company may, upon written notice to Executive, terminate Executive’s employment at any time without Cause.

 

(g)                                  Resignation of Offices and Directorships. Upon any termination of Executive’s employment under this Agreement for any reason, all offices and directorships held by Executive in the Company, Helen of Troy or any of their respective subsidiaries shall be terminated automatically and without further action by Executive as of the date of termination. Executive agrees, at the reasonable request of the Company or the Board, to execute and deliver further documents or instruments and take such other action as may be reasonably necessary or desirable to effect or document any such termination or resignation.

 

6.                                      Payments to Executive upon Termination.

 

(a)                                 Cause or Voluntary Termination. In the event of Executive’s termination pursuant to Sections 5(c) or (e), Executive shall be entitled to no further compensation or other benefits under this Agreement, except as to (i) that portion of any unpaid Base Salary earned by Executive hereunder up to and including the effective date of such termination and (ii) any unpaid incentive payment earned by Executive with respect to any award under the Annual Incentive Plan or Long Term Incentive Plan and vested prior to the effective date of such termination.

 

(b)                                 Death or Disability. In the event of Executive’s termination of employment pursuant to Sections 5(a) or 5(b), Executive (or his legal representative or beneficiary) shall be entitled to no further compensation or other benefits under this Agreement, except as to (i) that portion of any unpaid Base Salary earned by Executive hereunder up to and including the Company’s notice of such termination, (ii) any unpaid incentive payment earned by Executive with respect to any award under the Annual Incentive Plan or Long Term Incentive Plan and vested prior to the effective date of such termination and (iii) the pro rata portion (as defined below) of any incentive compensation the Compensation Committee, in its reasonable discretion, determines Executive likely would have received for the performance period during which Executive’s employment with the Company was terminated had Executive’s employment not been terminated, which shall be payable at the same time as such payment would be made during Executive’s regular employment with the Company.  Notwithstanding the foregoing, nothing in this Agreement shall affect Executive’s right to receive death or disability benefits under the life insurance and disability insurance programs of Helen of Troy and its subsidiaries.  For purposes of this Section 6(b), the term “pro rata portion” shall mean a percentage, when expressed as a fraction, the numerator of which is the number of days during the applicable performance period in which the Executive was an employee of the Company or its subsidiaries, and the denominator of which is the number of days in such performance period.

 

(c)                                  Termination without Cause or for Good Reason. In the event of Executive’s termination of employment pursuant to Sections 5(d) or (f), Executive shall be entitled to any unpaid Base Salary or other benefit earned by him hereunder up to and including the date of termination (except that no benefit or other compensation with respect to any awards under the Annual Incentive Plan and Long Term Incentive Plan shall be payable), and, subject to Executive’s compliance with Section 6(f):

 

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(i)                                     an amount equal to $4,000,000, which shall be payable in accordance with the terms and conditions of this Agreement and Section 6(d); and

 

(ii)                                  to the extent permitted by benefit plans of Helen of Troy and its subsidiaries, and applicable law, the continuation (by way of Company payment for coverage under COBRA) of health insurance benefits for Executive and his family for a maximum of eighteen months after the date of termination or until Executive is covered by another health insurance policy or is eligible for coverage under an employer-sponsored group health plan, if that occurs earlier than eighteen months. Executive acknowledges that the Company’s payment for coverage under COBRA may be a taxable benefit to Executive.  Executive and the Company agree that if the COBRA continuation payments provided for in this Section 6(c)(ii) are determined to be discriminatory under the Affordable Care Act nondiscrimination provisions applicable to insured group health plans, the parties will renegotiate Section 6(c)(ii), as applicable, in good faith to avoid the imposition of any excise tax on Executive or the Company.  The Company shall pay the Company’s COBRA administrator directly on behalf of Executive.

 

(d)                                 Timing of Payments.  Subject to Executive’s compliance with Section 6(f) and Section 9(a) below, the amount provided for in Section 6(c)(i) shall be payable in eighteen (18) equal installments commencing on the first payroll date that is at least 60 but not more than 75 days after Executive’s date of termination and on a monthly basis thereafter at the same time as such payment would be made during the first regular payroll date of the calendar month.

 

(e)                                  No Further Compensation. Notwithstanding any other provision of this Agreement, the Annual Incentive Plan, the Long Term Incentive Plan or any other benefit plan, agreement or arrangement of Helen of Troy and its subsidiaries, the provisions of this Section 6 exclusively shall govern Executive’s rights upon termination of employment with the Company and its affiliates, and except as expressly set forth in this Section 6, Executive shall have no further right to any compensation or other benefits under this Agreement, the Annual Incentive Plan, the Long Term Incentive Plan or such other benefit plans, agreements or arrangements.  Under no circumstances will any rights or awards of Executive under the Annual Incentive Plan or the Long Term Incentive Plan accelerate and vest upon Executive’s termination.

 

(f)                                   Condition to Payment.  All payments and benefits due to Executive under clauses (i) and (ii) of Section 6(c) that are not otherwise required by any rule or regulation issued by any state or federal governmental agency shall be contingent upon execution by Executive of a general release of all claims to the maximum extent permitted by law against Helen of Troy, the Company and their respective affiliates and their respective and former directors, employees and agents, in such form as determined by the Board in its reasonable discretion.

 

(g)                                  No Mitigation or Offset.  In the event of any termination of employment under Section 5, Executive shall be under no obligation to seek other employment and the Company will have no right of offset with regard to any severance payment made under Section 6(c)(i).

 

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7.                                      Covenants and Confidential Information.  Executive acknowledges the Company and Helen of Troy are relying on and expecting Executive’s continued commitment to performance of his duties and responsibilities during the time when Executive is employed by the Company under this Agreement.  Executive acknowledges and agrees that his responsibilities are worldwide in scope and that, as a result, the geographic and other restrictions herein on Executive’s ability to compete are fair and reasonable.  In light of such reliance and expectation on the part of the Company and Helen of Troy, Executive agrees he will not:

 

(a)                                 disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, in competition with, or contrary to the interests of, the Company, Helen of Troy or its subsidiaries, any confidential information relating to the Company, Helen of Troy or any of its subsidiaries’ respective operations, properties or otherwise to its particular business or other trade secrets of the Company, Helen of Troy or any of its subsidiaries, it being acknowledged by Executive that all such information regarding the business of the Company, Helen of Troy or its subsidiaries compiled or obtained by, or furnished to, Executive while Executive shall have been employed by or associated with the Company, Helen of Troy or its subsidiaries is confidential information and the exclusive property of Company, Helen of Troy or its subsidiaries, as the case may be; provided, however, that the foregoing restrictions shall not apply to the extent that such information (A) is obtainable in the public domain or known in the industry generally, (B) becomes obtainable in the public domain or known in the industry generally, except by reason of the breach by Executive of the terms hereof, or (C) is required to be disclosed by rule of law or by order of a court or governmental body or agency.

 

(b)                                 During the Term and for a period ending on the first anniversary of the date of termination of Executive’s employment with the Company for any reason, Executive shall not, directly or indirectly:

 

(i)                                     engage or invest in, own, manage, operate, finance, control, or participate in the ownership, management, operation, financing or control of, be employed by, associated with, or in any manner connected with, lend Executive’s name or any similar name to, lend Executive’s credit to, or render services or advice to, any business whose products or activities compete in whole or in part with the products or activities sold or engaged in, respectively, by the Company and Helen of Troy or its subsidiaries (a), anywhere in the United States or (b) any country outside the United States in which the Company and Helen of Troy or its subsidiaries are doing business or marketing its services; provided, however, that Executive may purchase or otherwise acquire up to (but not more than) five percent (5%) of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities have been registered under Sections 12(b) or (g) of the Securities Exchange Act of 1934.  Executive further agrees that this covenant is reasonable with respect to its duration, geographical area and scope.  Executive understands and agrees that the scope of the Company and Helen of Troy and its subsidiaries’ businesses and the geography of its business under this Agreement may be amended as the such businesses grow;

 

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(ii)                                  either for himself or any other person: (A) induce or attempt to induce any employee of the Company or Helen of Troy or any of its subsidiaries to leave the employ of the Company and Helen of Troy or any of its subsidiaries, provided, however, that a general advertisement or solicitation that is not directed specifically to any such employee shall not violate this subsection; (B) in any way interfere with the relationship between the Company, Helen of Troy or any of its subsidiaries and any of their respective employees; (C) employ, or otherwise engage as an employee, independent contractor, or otherwise, any employee of the Company, Helen of Troy or its subsidiaries; or (D) induce or attempt to induce any customer, supplier, licensee, or business relation of the Company, Helen of Troy or its subsidiaries to cease doing business with the Company, Helen of Troy or its subsidiaries, or in any way interfere with the relationship between any customer, supplier, licensee or business relation of the Company, Helen of Troy or its subsidiaries;

 

(iii)                               either for himself or any other Person, solicit the business of any person known to Executive to be a customer of the Company, Helen of Troy or its subsidiaries, whether or not Executive had personal contact with such person, with respect to products or activities which compete in whole or in part with the products or activities of the Company, Helen of Troy or its subsidiaries; or

 

(c)                                  While the covenant under Section 7(a) is in effect, Executive agrees to advise the Company and Helen of Troy of the identity of any employer of Executive within ten (10) days after accepting any employment.  If Executive seeks other employment during the term or during the first anniversary of Executive’s employment with the Company, Executive agrees to provide a copy of this Agreement to any prospective employer.  The Company and/or Helen of Troy may serve notice upon each such employer that Executive is bound by this Agreement and furnish each such employer with a copy of this Agreement or relevant portions thereof.

 

(d)                                 Executive agrees, other than with regard to employees in the good faith performance of Executive’s duties with the Company while employed by the Company, both during the Term and after Executive’s employment with the Company terminates, not to knowingly disparage the Company or its officers, directors, employees or agents in any manner likely to be harmful to it or them or its or their business, business reputation or personal reputation. This Section 7(d) shall not be violated by statements from Executive which are truthful, complete and made in good faith in required response to legal process or governmental inquiry.

 

(e)                                  Executive agrees that any breach of this Section 7 by Executive shall be deemed a material breach of this Agreement. Executive agrees and understands that the remedy at law for any breach by him of this Section 7 would be inadequate and that the damages flowing from such breach are not readily susceptible to being measured in monetary terms.  Accordingly, it is acknowledged that, upon Executive’s violation of any provision of this Section 7, the Company, Helen of Troy or its subsidiaries may be entitled to immediate injunctive relief and may obtain temporary orders or other injunctive relief restraining any further breach.  Nothing in this Section

 

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7 shall be deemed to limit the Company, Helen of Troy or any of its subsidiaries’ remedies at law or in equity for any breach by Executive of any of the provisions of this Section 7 which may be pursued or availed of by the Company, Helen of Troy or any of its subsidiaries.  Executive agrees that the provisions of this Section 7 shall be enforceable and not impaired in any manner whatsoever as a result of a breach by the Company, Helen of Troy or any of its subsidiaries of any of its obligations, if any, under this Agreement, other than the obligations to pay salary, bonuses, and vested incentive payment awards.  Executive agrees that the Company shall be entitled to the injunctive relief provided for herein by posting a bond not to exceed $2,500.00.

 

(f)                                   Executive acknowledges and agrees that the restrictions imposed by this Section 7 are reasonable with respect to subject matter, time period and geographic area.  If the final judgment of a court of competent jurisdiction declares that any provision of this Section 7 is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Section 7 are not affected or impaired in any way and the parties agree that the court making such determination will have the power to limit the provision, to delete specific words or phrases, or to replace any invalid, illegal or unenforceable provision with a provision that is valid, legal and enforceable and that comes closest to expressing the intention of the invalid, illegal or unenforceable provision, and this Agreement will be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties agree to negotiate in good faith to replace such invalid, illegal and unenforceable provision with a valid, legal and enforceable provision that achieves, to the greatest lawful extent under this Agreement, the economic, business and other purposes of such invalid, illegal or unenforceable provision.

 

8.                                      Withholding of Taxes.  The Company shall withhold from any amounts payable under this Agreement all federal, state, local or other taxes as it legally shall be required to be withheld.

 

9.                                      Miscellaneous.

 

(a)                                 Deferred Compensation.

 

(i)                                     Notwithstanding anything to the contrary in this Agreement, if Executive  is a “specified employee” within the meaning of Section 409A the Internal Revenue Code of 1986, as amended (the “Code”) at the time of Executive’s  termination of employment (other than due to death), then the severance payable to Executive, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A of the Code (together, the “Deferred Compensation”) that is payable within the first six (6) months following Executive’s termination of employment, will be paid in a lump sum on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s termination of employment.  All subsequent Deferred Compensation, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the

 

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contrary, if Executive dies following his date of termination but prior to the six (6) month anniversary of his date of termination, then any payments delayed in accordance with this paragraph will be paid in a lump sum as soon as administratively practicable (but not more than 90 days) after the date of Executive’s death and all other Deferred Compensation will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

(ii)                                  Deferred Compensation otherwise payable or provided pursuant to Section 6(c) shall be paid or provided only at the time of a termination of Executive’s employment which constitutes a “separation from service” within the meaning of Section 409A of the Code.

 

(iii)                               The foregoing provisions are intended to comply with the requirements of Section 409A of the Code so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A of the Code, and any ambiguities herein will be interpreted to so comply.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A of the Code.

 

(iv)                              Notwithstanding anything to the contrary in this Agreement, this Agreement and the benefits provided hereunder are intended to comply, to the extent applicable thereto, with Code Section 409A and the Treasury Regulations and other guidance promulgated or issued thereunder and with Code Section 457A and the Treasury Regulations and other guidance promulgated or issued thereunder, and the provisions of this Agreement shall be interpreted and construed consistent with this intent.  If Executive or the Company believes, at any time, that any such benefit or right does not so comply with Code Section 457A, it shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Code Section 457A (with the most limited possible economic effect on Executive and on the Company).

 

(v)                                 “Ineligible Compensation” means compensation relating to services performed for the benefit or on behalf of Helen of Troy Limited as determined by the Company in its sole discretion regardless of whether the cost of such compensation is actually borne by Helen of Troy Limited.  To the extent Executive performs such services for Helen of Troy Limited, as well as for the Company, Helen of Troy and any subsidiary or affiliate of Helen of Troy, the determination of what portion of such compensation

 

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shall be considered Ineligible Compensation shall also be made by the Company or Helen of Troy in its sole discretion.

 

(vi)                              If and to the extent required by Code Section 457A, and subject to Code Section 409A:

 

(A)                               Any Ineligible Compensation (and if applicable any earnings and losses attributable thereto) shall be paid to Executive no later than the last day of the twelfth (12th month after the end of the taxable year of Helen of Troy Limited during which the right to the payment of such Ineligible Compensation is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 457A.

 

(B)                               In the case of any deferred amount of Ineligible Compensation, to the extent such deferred amount is not includible in Executive’s gross income in a taxable year beginning before 2018, such deferred amount (and if applicable any earnings and losses attributable thereto) shall be paid to Executive in the later of (1) the last taxable year beginning before 2018, or (2) the taxable year in which there is no “substantial risk of forfeiture” of Executive’s rights to such Ineligible Compensation, within the meaning of Code Section 457A.

 

(b)                                 Representations and Covenants of Executive.  Executive represents and warrants that he is not a party to any agreement, contract or understanding, whether employment or otherwise, which would restrict or prohibit Executive from undertaking or performing employment in accordance with the terms and conditions of this Agreement.  Executive further covenants that he will not impair his ability to carry out his obligations under this Agreement by entering into any agreement or in any way assisting others, directly or indirectly, to enter into any agreement which will violate the confidentiality, non-solicitation and non-competition provisions of this Agreement.

 

(c)                                  Decisions by Company or the Board. Any powers granted to the Board or the Board of Directors of the Company hereunder may be exercised by a committee, appointed by the Board or the Board of Directors of the Company, as applicable, and such committee, if appointed, shall have general responsibility for the administration and interpretation of this Agreement.

 

(d)                                 Entire Agreement; Conflicts with Other Agreements. This Agreement (including the Exhibits hereto) contains the entire understanding relating to the subject matter hereof and supersedes any prior written or oral agreements and understandings, whether written or not, if any, between the Company or any predecessor of the Company and Executive. In the event of any conflict or inconsistency between the terms of any other agreement between the Company, Helen of Troy, or any of their respective subsidiaries and Executive or any plan of Helen of Troy or its subsidiaries and the terms hereof, the terms of this Agreement shall govern.

 

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(e)                                  Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

(f)                                   Binding Effect and Assignment.  The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding on, the Company and its successors and assigns, and the rights and obligations of Executive under this Agreement shall inure to the benefit of, and shall be binding upon, Executive and (other than obligations to perform services and to refrain from competition and disclosure of confidential information) his heirs, personal representatives and assigns; provided that Executive may not assign any of his rights, interests or obligations hereunder without the prior written consent of the Company or Helen of Troy.

 

(g)                                  Notices.  Unless otherwise provided in this Agreement, all notices, approvals, or other communications purporting to affect the rights of the parties hereunder will be in writing and will be delivered personally or by confirmed facsimile or certified mail, return receipt requested or express courier to the other party at the address of the party set forth below or at such other address as such party notifies to the other party in writing:

 

Company:                                     Helen of Troy Nevada Corporation
 l Helen of Troy Plaza
 El Paso, Texas 79912
 Attn: Board of Directors

 

With a copy to:            Office of General Counsel
 1 Helen of Troy Plaza
 El Paso, Texas 79912

 

Executive:                                      Julien Mininberg
 1 Helen of Troy Plaza
 El Paso, Texas 79912

 

Any such notice or communication (i) sent by express courier will be considered delivered or received the next business day; (ii) given personally will be considered delivered or received on the date of such delivery; and (iii) sent by certified mail, return receipt requested, will be considered delivered or received three calendar days after the date of dispatch.

 

(h)                                 Waiver.  The failure of either party to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions as to any future violations thereof nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties in this Agreement are cumulative, and the waiver of any single remedy shall not constitute a waiver of such party’s right to assert all other legal remedies available to it under the circumstances.

 

(i)                                     Amendments and Modifications.  This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto.  Notwithstanding the foregoing, nothing contained in this Agreement shall

 

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be deemed to supersede or impair any rights of the Company, Helen of Troy and/or its subsidiaries under any agreement which exists on the Effective Date between the Company, Helen of Troy and/or its subsidiaries and Executive which relates to confidential information, trade secret or inventions of the Company and to the extent there are any inconsistencies between this Agreement and such other agreements, the Company, Helen of Troy and its subsidiaries may elect to determine in its sole discretion which such provisions shall be applicable.

 

(j)                                    Governing Law and Venue.  This Agreement, including all matters related to its validity, enforceability, construction, interpretation and performance, all aspects of the relationship between the parties contemplated hereby and any disputes or controversies arising therefrom or related thereto, will be governed by and controlled by the laws of the State of Texas (without regard to its conflicts-of-law provisions or principals).  Each party consents and agrees that the state and federal courts located in El Paso County, Texas shall have the exclusive jurisdiction to determine, hear, and enforce any claims or disputes arising out of this Agreement.  Each party waives any objection to venue in such courts, including without limitation, any claim based on improper venue or forum nonconveniens.

 

(k)                                 Counterparts.  This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

 

(l)                                     Effect of Headings.  The section headings herein are for convenience only and shall not affect the construction or interpretation of this Agreement.

 

(m)                             Interpretation.  The definitions contained in this Agreement (including any Exhibit hereto) are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.

 

(n)                                 Assumption.  Helen of Troy will require any successor (whether direct or indirect, by purchase, merger, acquisition of assets, consolidation or otherwise) to all or substantially all of the business and/or assets of Helen of Troy to assume and agree to perform the duties and obligations of Helen of Troy and the Company, as the case may be, under this Agreement in the same manner and to the same extent that Helen of Troy and the Company would be required to perform if no such succession had taken place.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, this Agreement has been executed on the day and year first written above.

 

	
HELEN OF TROY NEVADA CORPORATION
    	
 
    	
EXECUTIVE:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Vincent D. Carson
    	
 
    	
/s/ Julien Mininberg
    
	
 
    	
Vincent D. Carson
    	
 
    	
Julien Mininberg, individually
    
	
 
    	
Senior Vice President
    	
 
    	
 
    

 

The obligations of Helen of Troy Nevada Corporation to Executive hereunder are hereby guaranteed by Helen of Troy Limited, a Bermuda company, and the undersigned subsidiary of Helen of Troy Limited, a Barbados company.

 

 

	
HELEN OF TROY LIMITED,
    	
 
    	
HELEN OF TROY LIMITED,
    
	
a Bermuda company
    	
 
    	
a Barbados company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Vincent D. Carson
    	
 
    	
By:
    	
/s/ Vincent D. Carson
    
	
 
    	
Vincent D. Carson
    	
 
    	
 
    	
Vincent D. Carson
    
	
 
    	
Senior Vice President
    	
 
    	
 
    	
Senior Vice President
    

 

17

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