Playtex Products, Inc. and Michael R. Gallagher Memorandum of Understanding for CEO Employment Terms (2003-2004)
This agreement outlines the employment terms for Michael R. Gallagher as Chief Executive Officer of Playtex Products, Inc. from April 15, 2003, to June 30, 2004. It specifies his base salary, incentive bonuses, stock option considerations, and special cash bonuses tied to the company's stock price. The agreement also details conditions for termination, including compensation in cases of resignation, termination for cause, or without cause, and references prior agreements. Shareholder approval is required for certain bonus arrangements. Gallagher is also entitled to standard executive fringe benefits.
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Exhibit 10(e)(2)
PLAYTEX PRODUCTS, INC.
Memorandum of Understanding
This MEMORANDUM OF UNDERSTANDING (this "Memorandum") dated as of April 15, 2003, sets forth the mutual and binding understanding of the undersigned regarding the material terms of employment of Michael R. Gallagher ("MRG") by Playtex Products, Inc. (the "Company").
POSITION:
MRG shall continue to be employed as Chief Executive Officer of the Company and will continue to be a member of the Company's Board of Directors (the "Board").
TERM:
The term of MRG's employment agreement (the "Term") shall be from the date hereof to June 30, 2004, unless earlier terminated or extended in accordance with this Memorandum or otherwise by agreement of the parties.
BASE SALARY:
The base salary shall be at least $900,000 per year, subject to upward adjustment at the discretion of the Board.
INCENTIVE BONUSES:
MRG shall be afforded the opportunity to earn an Incentive Bonus with respect to each calendar year occurring during the term of his employment as Chief Executive Officer with the Company based upon the attainment of financial objectives established by the Compensation and Stock Option Committee of the Board following consideration of the recommendation of senior management of the Company; provided that with respect to any partial year at the conclusion of MRG's employment, the amount of the Incentive Bonus otherwise payable shall be prorated to reflect the portion of such year during which MRG is employed by the Company.
The target Incentive Bonus for each calendar year shall equal 125% of MRG's base salary as in effect as of the first day of such calendar year.
The maximum Incentive Bonus for each calendar year shall equal 187.5% of MRG's base salary as in effect as of the first day of such calendar year.
STOCK OPTIONS:
It is the intention of the parties that MRG shall be included in consideration for additional options during the term of his employment, and, as circumstances warrant, the Company shall give consideration to such further grants in its discretion.
SPECIAL PRICE BASED INCENTIVE ARRANGEMENT:
As additional incentive, MRG shall be eligible to receive Special Price-Based Incentive Compensation based upon the trading price of the Company's common stock in accordance with the following criteria.
| For 30 consecutive trading days, closing price equals or exceeds, at any time prior to 6/30/03 | Cash Bonus | |
|---|---|---|
| $20.00 | $1,000,000 | |
| $25.00 | $1,500,000 | |
| $30.00 | $1,500,000 | |
| $35.00 | $2,000,000 | |
| $40.00 | $2,000,000 |
MRG will be entitled to the cash bonus when and if the respective 30 consecutive trading day price targets are achieved, provided that MRG is employed as Chief Executive Officer of the Company at such time.
TERMINATION OF EMPLOYMENT PRIOR TO THE EXPIRATION OF TERM:
— MRG resignation or termination by Company for "cause":
MRG entitled to payment of base salary though date of termination. No entitlement to any other case compensation from the Company.
— Termination by the Company without "cause":
MRG entitled to the amounts set forth in the Retention Agreement dated July 22, 1997 between the Company and MRG, as amended.
— Death/Disability:
MRG entitled to the amounts set forth in the Retention Agreement dated July 22, 1997 between the Company and MRG, as amended.
SHAREHOLDER APPROVAL:
In order that certain payment described in this memorandum qualify as performance based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended, arrangements providing for the Incentive Bonus will be subject to the approval of the shareholders of the Company. Haas Wheat & Partners, L.P. ("Haas Wheat") has agreed with MRG to vote the shares of common stock of the Company controlled by Haas Wheat (approximately 33% of the outstanding shares of such stock) to approve such arrangements.
FRINGE BENEFITS:
MRG shall be eligible to receive fringe benefits customary for a position of this nature.
ADDITIONAL DOCUMENTATION:
This Memorandum is a successor to the Memorandum of Understanding between the parties dated as of May 18, 1999. References to that Memorandum of Understanding (or to its predecessor, the Memorandum of Understand between the parties dated as of June 21, 1995) in the Retention Agreement dated July 22, 1997 between the Company and MRG, and any other agreements between the parties, are amended so that they refer to this Memorandum instead.
PLAYTEX PRODUCTS, INC.
By: | /s/ ROBERT B. HAAS Its Chairman | ||
MICHAEL R. GALLAGHER | |||
/s/ MICHAEL R. GALLAGHER | |||
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- Exhibit 10(e)(2)
