10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 _______________________ FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission file number 1-8714 TAMBRANDS INC. -------------- (Exact name of registrant as specified in its charter) Delaware 13-1366500 -------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 777 Westchester Avenue White Plains, New York 10604 ---------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code, is 914-696-6000 ------------ Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- ------------------- Common Stock, par New York Stock Exchange value $.25 per share; and Pacific Stock Exchange Common Share Purchase Rights Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ________ --------- FORM 10-K (Facing Sheet Continuation) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this Form 10-K, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant as of February 9, 1995 was $1,514,220,120. (For this computation, the registrant has excluded the market value of all shares of its Common Stock reported as beneficially owned by officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an "affiliate" of the registrant.) As of March 15, 1995, 36,689,326 shares of the registrant's Common Stock were outstanding. Documents Incorporated by Reference ----------------------------------- Part III of this Form 10-K incorporates by reference portions of the definitive Proxy Statement for the registrant's annual meeting of shareholders to be held on April 25, 1995, filed with the Securities and Exchange Commission pursuant to Regulation 14A. PART I ------ Item 1. Business ------ -------- General ------- Tambrands Inc. (the "Company") has been manufacturing and marketing menstrual tampons, which are sold under the trademark TAMPAX(R), since 1936. It is the leading manufacturer and marketer of tampons in the world. The Company operates in one business segment, personal care products. In recent years, the Company has focused on its core TAMPAX tampon business worldwide and has been expanding its international operations. The Company is placing an increased emphasis on the development and marketing of new products. The Company has manufacturing operations in seven countries. In 1994, TAMPAX tampons were sold in over 150 countries. The Company's largest eight markets are the United States, the United Kingdom, France, Canada, Spain, CIS (principally Russia and Ukraine), Italy and Belgium. The Company was incorporated under the laws of the State of Delaware in 1936. The Company's principal executive offices are located at 777 Westchester Avenue, White Plains, New York 10604 (telephone number 914-696-6000). Recent Developments ------------------- Effective May 31, 1994, Edward T. Fogarty was appointed President and Chief Executive Officer of the Company. Several other significant changes in senior management also occurred during 1994. Michael K. Lorelli was appointed Executive Vice President and President, North America/Latin America effective August 31, 1994, Thomas J. Mason was appointed Group Vice President - International effective October 18, 1994, and Thomas Soper, III was appointed Senior Vice President - Corporate Human Resources and Communications effective August 29, 1994. In June 1989, the Company adopted a corporate strategy of concentrating on its core TAMPAX tampon business. As part of this strategy, the Company announced in December 1989 a major restructuring program designed to reduce costs and improve performance. In December 1991, the Company announced a program to restructure its worldwide manufacturing operations to improve efficiency and reduce costs. The 1989 and 1991 programs have been completed. In June 1993, the Company announced that it would provide a $30 million charge ($20 million after-tax) to provide for restructuring of manufacturing and administrative operations and the cost of management changes, including the adoption of a consolidated international management strategy. This program has been virtually completed. See Note 6, "Restructuring and Other Charges," included in the Notes to Consolidated Financial Statements contained in item 8 of Part II hereof. These restructuring programs have included sales of the Company's businesses that were not supportive of the Company's core activities, substantial reductions in workforce and a reduction of approximately 50% in the number of manufacturing plants. The Company currently is engaged in an ongoing program of substantially upgrading production equipment at its manufacturing facilities through further automation and computerization. The Company's 1994 capital spending programs were related to investments in equipment to improve product quality and productivity, modernize production facilities and reduce costs. See "Management's Discussion and Analysis of Results of Operations and Financial Condition" contained in item 7 of Part II hereof. The Company intends to continue its efforts to achieve productivity improvements. In 1989, the Company initiated a stock repurchase program. As of December 31, 1994, the Company had spent approximately $436 million to purchase approximately 7.6 million shares of its Common Stock under four repurchase programs. The Company was authorized as of December 31, 1994 to purchase approximately 300,000 additional shares. The Company will continue its repurchases as conditions warrant. In 1992, the Company established a commercial paper program under which it may borrow up to $150 million for general corporate purposes. At December 31, 1994, $57 million was outstanding under this program. In addition, in 1993, the Company established a $150 million Medium-Term Note program. At December 31, 1994, $60 million was outstanding under this program. Products -------- Menstrual tampons represent virtually all of the Company's sales. The Company's largest selling tampon is the TAMPAX flushable applicator tampon, which first became commercially available in 1936. The Company also manufactures and sells (i) TAMPAX tampons with plastic applicators in the United States and Canada; (ii) TAMPAX COMPAK(R) tampons, with a compact all-plastic applicator, in the United States, Canada, France, the United Kingdom and other countries in Europe; and (iii) TAMPAX comfort shaped flushable applicator tampons, with an all-paper rounded-end applicator and a slimmer design than the Company's standard product, in the United States, Canada, Australia, parts of Europe and several other countries. The Company is placing an increased emphasis on the development and marketing of new products. In 1994, the Company introduced nationally in the United States the new TAMPAX SATIN TOUCH(TM) tampon and the new TAMPAX LITES(R) tampon. The SATIN TOUCH tampon offers the ease and comfort of a plastic applicator but has an all-paper applicator that is flushable and biodegradable. SATIN -2- TOUCH, which was introduced nationally in Canada in 1993, is a rounded-end product with a patented, high-gloss surface. TAMPAX LITES is a new tampon especially designed for use on days of light menstruation, when other tampons might be too absorbent for comfortable use. In 1994, the Company introduced the new TAMPAX SATIN(TM) tampon in France. This tampon is similar to the SATIN TOUCH tampon. In the United Kingdom, the Company introduced nationally its TAMPAX TAMPETS(R) tampon in 1994. This non-applicator tampon has been sold in Ireland since 1993. The Company continues to evaluate the possible introduction of its existing products in additional markets, as well as certain new products and product enhancements. Marketing and Sales ------------------- Marketing operations are conducted either directly by the Company and its subsidiaries and joint venture, or by independent brokers or sales agents and distributors. Sales are made directly to grocery, discount and drug stores and other comparable outlets, as well as to wholesalers and distributors in those trades. Sales to discount stores, including mass merchandisers and club stores, have been increasing as a percentage of total sales. For the year 1994, Wal- Mart, together with its affiliated stores, accounted for approximately 10.3% of the Company's net sales worldwide. No single customer (including distributors) of the Company and its subsidiaries and joint venture accounted for 10% or more of total net sales prior to 1994. The marketplace for consumer products is becoming increasingly global and currently is characterized by growing trade consolidation and expansion across geographic borders. A small number of significant customers have highly leveraged capital structures, making them particularly sensitive to adverse market interest rate changes and other economic variables. This situation did not significantly affect the Company in 1994 or prior years. Substantially all sales involve extensions of credit. Credit terms generally are consistent with terms typically extended under local industry practices. Default rates by the Company's customers in the United States have been at or below industry averages, based on information from the Credit Research Foundation. In the United States, the Company's internal sales management group directly handles sales to certain large customer accounts. These sales have been increasing as a percentage of total sales. Other sales in the United States and sales in Belgium, Canada, France and the Netherlands are handled through independent sales brokers, who also may sell other branded consumer products but generally do not carry products that compete with the products of the Company and its subsidiaries. Sales are conducted in the Czech Republic, Poland, Russia, Ukraine and the United Kingdom by the -3- Company's subsidiaries and in the People's Republic of China by its joint venture. Sales are conducted in other countries through independent distributors and agents. Sales forces of the Company's subsidiaries in the Czech Republic, Poland, Russia, Ukraine and the United Kingdom distribute certain household consumer products for several other companies. The Company believes that the recent trend by retailers and distributors to reduce inventories and the related adverse impact on shipments will continue in future periods. However, the rate of inventory reduction in future periods is expected to be significantly less than the rate of reduction in 1993 and therefore shipments are expected to more closely match retail sales, as they did in 1994. Media advertising is important to the overall success of the TAMPAX tampon brand. In the United States, Canada and Europe, the Company focuses its advertising on women aged 12-34, using a variety of media, including television and print advertisements. The Company increased its advertising and promotional spending in 1994 over 1993 levels, primarily to support the introduction of new products in the Company's largest markets. The Company intends to continue to support the TAMPAX tampon franchise with highly competitive levels of advertising and promotional activities in the United States and Europe. Advertising and promotional spending currently is being concentrated in the Company's five largest markets (the United States, the United Kingdom, France, Canada and Spain) and, as consumer economic and other conditions permit, will be directed towards the four international markets believed to have the greatest development potential (CIS, principally Russia and Ukraine, Mexico, China and Brazil). The Company has consolidated its advertising execution through the selection of BBDO Worldwide Inc. as its global advertising agency. The Company also seeks to attract and retain customers through its teen education program, which is designed to help female teenagers understand the various forms of sanitary protection and promotes trial usage of TAMPAX tampons. In developing markets, like Russia and China, the Company uses sampling with young women and physician awareness programs. In the Company's largest markets, the Company conducts school education programs that include videos, lecturers and booklets. Competition ----------- Highly competitive conditions prevail in the feminine protection industry for external pads and menstrual tampons, which are competitive in both performance and price, the principal methods of competition. -4- In the United States, there are four other manufacturers whose sales, directly or through subsidiaries, are significant in the total sanitary protection market: Johnson & Johnson, Kimberly-Clark Corporation, Playtex Family Products Corporation and The Procter & Gamble Company. Each of these corporations manufactures and sells external pads or menstrual tampons or both. Each makes and sells products other than external pads and tampons, and the total sales of all products by and the capitalization of each of Johnson & Johnson, Kimberly-Clark and Procter & Gamble are substantially greater than the total sales and capitalization of the Company. These factors may be helpful to the respective competitive positions of these companies in the feminine protection industry. Substantially all of the tampons manufactured by the above-mentioned four companies are sold under these companies' brand names. In addition, there is a small private label segment of the industry. Management believes that the TAMPAX tampon's leading market share position in the U.S. tampon category (approximately 50.0% in dollars and 53.1% in units for the year 1994, according to Information Resources, Inc.) and strong brand loyalty among consumers (as verified by household panel data obtained by Nielsen Marketing Research), are positive factors in the Company's ability to compete in the feminine protection industry. During 1994, the level of competitive activity continued to increase in the United States, particularly in the areas of new product introductions and price discounting. Highly competitive conditions prevail in virtually all foreign markets. Competition tends to be fragmented and regional in nature in most of those markets, but tampons produced by, or under license from, Johnson & Johnson, and external pads produced by, or under license from, Johnson & Johnson, Kimberly- Clark and Procter & Gamble, are sold in many of the foreign markets where the Company does business. Competitive activity remained at high levels in Europe in 1994. This activity included the continued aggressive marketing of several external pad products. Management believes that the worldwide market for consumer products will continue to be highly competitive and disinflationary and that the level of competitive activity could intensify in 1995, including higher levels of advertising and promotional activities, additional new product introductions, and continued activity in the private label tampon sector. Raw Materials ------------- The principal raw materials used in the Company's business are cotton and rayon for tampons, paper and plastic for tampon applicators, and paperboard for cartons and containers. Most of these raw materials are readily available in the market from many sources. However, due to unusually low cotton production during 1994 in several countries, worldwide demand for cotton produced in -5- the United States has increased substantially over the last few months. This could have an adverse effect on the ready availability and/or price of cotton to the Company and other purchasers during 1995. In addition, the Company recently has experienced cost pressures with regard to some of its other raw materials. Trademarks and Patents ---------------------- The Company, directly or through its subsidiaries, owns a number of trademarks, trademark registrations and trademark applications in the United States and other countries, which, in the opinion of management, are significant. The Company's trademark registrations vary in duration and are typically renewable by the Company. Certain features of TAMPAX tampons are the subject of U.S. and foreign patents or patent applications owned by the Company. In management's opinion, certain of these patents are significant. The duration of the Company's patents ranges from 4 to 18 years (i.e., the patents have ---- expiration dates ranging from the year 1999 to the year 2013). Research and Development ------------------------ The Company maintains research and development laboratories at its facilities in Palmer, Massachusetts and Havant, England. The Company's research and development expenditures have approximated 2% of net sales in each of the past three years. Management believes that developing better protecting and more comfortable and convenient products, and products which are environmentally sound, is important to maintaining the Company's competitive position. Research is directed toward these goals. Employees --------- As part of the restructuring program announced in 1989, the staff of the Company's headquarters and North American Division has been reduced substantially. The sale of non-core businesses also has reduced the number of employees. Additional headcount reductions have occurred and will occur as a result of the restructuring programs announced in 1991 and 1993. At December 31, 1994, the Company and its subsidiaries employed approximately 3,400 persons. Foreign and Domestic Operations; Export Sales --------------------------------------------- The information regarding foreign and domestic operations of the Company and its subsidiaries set forth on page F-15 under the caption "Segment and Geographic Information" in the Notes to Consolidated Financial Statements is incorporated herein by reference. -6- Over the past three years, sales by the Company's foreign operations accounted for approximately one-half of total unit sales. In 1994, sales between geographic areas and export sales of the Company were not significant. Item 2. Properties ------ ---------- Domestic Properties ------------------- The Company owns and operates three manufacturing plants in the United States, located in Auburn, Maine; Claremont, New Hampshire; and Rutland, Vermont. Product and process research and development, and certain accounting, data processing and sales and logistics operations are conducted at the Company's Technical Center, located in Palmer, Massachusetts. This facility is a testing center for the development of new products and for the application of advanced manufacturing technology to the Company's products. The Company owns each of these plants and the Technical Center. The Company leases headquarters office space in White Plains, New York. The Company's production machinery and equipment and the properties owned by it described above are held free and clear of encumbrances. During the last fiscal year, the Company's domestic plants were suitable and adequate for the Company's requirements. The Company's domestic plants operate principally on a three-shift basis, and have sufficient additional capacity to satisfy the foreseeable requirements of the Company. Foreign Properties ------------------ The Company's foreign subsidiaries own and operate manufacturing plants in France, Ireland, Russia, Ukraine and the United Kingdom. The joint venture in the People's Republic of China, in which the Company has an 80% interest, has contractual rights to use a manufacturing plant there. The Company's foreign subsidiaries lease office space in Australia, Brazil, Canada, France, Mexico, Switzerland, Venezuela and in several other countries. The Company's subsidiary in the United Kingdom leases office space there for the Company's international headquarters. As part of the Company's worldwide manufacturing restructuring program announced in 1993, the Company has restructured its manufacturing operations in France. During 1994, all worldwide production of COMPAK tampons was concentrated at the French plant, and production of other tampons was consolidated in the Company's other European plants. Also as part of the restructuring program, -7- in 1994 the tampon manufacturing plant in Mexico leased by a subsidiary and the tampon manufacturing plant in South Africa owned by a subsidiary were closed. Supply of products to Mexico and South Africa is now being sourced from other production facilities. The production machinery and equipment and properties owned by the Company's foreign subsidiaries described above are held free and clear of encumbrances. During the last fiscal year, the foreign facilities of the Company's subsidiaries were suitable and adequate for the Company's requirements. In general, these foreign manufacturing facilities operate on a three-shift basis, and have sufficient additional capacity to satisfy the foreseeable requirements of the Company. Item 3. Legal Proceedings ------ ----------------- The Company or a subsidiary is a defendant in a small number of product liability lawsuits based on allegations that toxic shock syndrome ("TSS") was contracted through the use of tampons. A small number of pre-suit claims involving similar TSS allegations have also been asserted. The damages alleged vary from case to case and often include claims for punitive damages. One TSS lawsuit, served on the Company in July 1994, purports to be a class action on behalf of all women who have contracted TSS through the use of tampons. The Company does not believe that class certification is warranted, and intends to vigorously contest any motion for class certification filed by the plaintiffs, as well as the allegations contained in the plaintiffs' complaint. The Company and three of its former officers have been named as defendants in certain shareholder lawsuits that have been filed in the United States District Court for the Southern District of New York and that have been consolidated under the caption In Re Tambrands Inc. Securities Litigation. The ------------------------------------------ parties have stipulated to the certification of the consolidated lawsuit as a class action on behalf of all purchasers of the Company's common stock during the period December 14, 1992 through April 28, 1993. The complaint alleges that the Company's disclosures during the class period contained material misstatements and omissions concerning its anticipated future earnings and thereby allegedly violated Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The complaint seeks an unspecified amount of damages on behalf of the class. The Company was a nominal defendant in three purported shareholder derivative lawsuits filed in the Supreme Court of the State of New York for Westchester County and consolidated into a single action. Named collectively in the consolidated complaint as individual defendants were the Company's directors (other than Mr. -8- Fogarty), certain former directors and three of its former officers. The complaint alleged that the officer-defendants exposed the Company to liability in the shareholder class action described in the preceding paragraph and misappropriated corporate opportunities by trading in the Company's stock on the basis of nonpublic information. One of the former officers was also alleged to have received improper reimbursements from the Company for alleged personal expenses. The director-defendants were alleged to have acquiesced in the aforesaid alleged violations. The complaint sought to recover on behalf of the Company an unspecified amount of damages from the individual defendants. No relief was sought against the Company. In September 1994, the Court granted the defendants' motion to dismiss the complaint for failure to make a demand upon the Board of Directors. Plaintiffs have appealed the dismissal. The Company is involved, either as a named defendant or as the result of contractual indemnities, in certain litigation arising out of the operations of certain divested subsidiaries. There are certain other legal proceedings pending against the Company arising out of its normal course of business in which claims for monetary damages are asserted. While it is not feasible to predict the outcome of these legal proceedings and claims with certainty, management is of the belief that any ultimate liabilities for damages either are covered by insurance, are provided for in the Company's financial statements or, to the extent not so covered or provided for, should not individually or in the aggregate have a material adverse effect on the Company's financial position. Item 4. Submission of Matters to a Vote of Security Holders ------ --------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. Management of the Registrant ---------------------------- The names and ages of all executive officers of the Company, the current office held by each, and the period during which each has served as such are set forth in the following table: -9-
Period Served Name Age Current Office In Current Office ---- --- -------------- ----------------- Edward T. Fogarty 58 President and 1994 to date Chief Executive Officer (1) Michael K. Lorelli 43 Executive Vice 1994 to date President and President, North America/Latin America (2) Thomas J. Mason 50 Group Vice President- 1994 to date International (3) Harry E. Raber 53 Vice President - 1991 to date Corporate Engineering and Manufacturing Susan J. Riley 36 Vice President - 1994 to date Finance Thomas Soper, III 45 Senior Vice President- 1994 to date Corporate Human Resources and Communications (4) Jerome B. Wainick 54 Vice President-Research 1990 to date and Development (5) Raymond F. Wright 56 Senior Vice President- 1989 to date Chief Financial Officer
(1) Mr. Fogarty has served as an officer of the Company since May 1994. From prior to March 1990 until May 1994, he was employed by Colgate-Palmolive Company as President - USA/Canada/Puerto Rico. (2) Mr. Lorelli has served as an officer of the Company since October 1994. From January 1993 until October 1994, he was employed by Pizza Hut International, a division of PepsiCo, Inc. as President. From prior to March 1990 until December 1992, he was employed by Pepsi-Cola East, a division of PepsiCo, Inc., as President. (3) Mr. Mason has served as an officer of the Company since October 1994. From May 1992 until September 1994, he was employed by Dole Packaged Foods, a division of Dole Food Co., as President. From April 1990 until May 1992, he was employed by Kraft General Foods as Executive Vice President and General Manager, Specialty Products. From prior to March 1990 until April 1990, he was employed by Kraft General Foods as Vice President and General Manager - Knudsen. -10- (4) Mr. Soper has served as an officer of the Company since October 1994. From prior to March 1990 until September 1994, he was employed by Alexander & Alexander Services Inc. (a provider of risk management, insurance brokerage and human resource management consulting services) as Senior Vice President - Corporate Human Resources. (5) Mr. Wainick has served as an officer of the Company since June 1990. From prior to March 1990 until June 1990, he was employed by Binney & Smith, Inc. (a manufacturer of arts and crafts supplies), a subsidiary of Hallmark Cards, Inc., as Director of Technical Development. Each executive officer is appointed by the Board of Directors to serve until the first meeting of directors following the annual meeting of shareholders of the Company. Except as indicated in the footnotes above, the principal occupation and employment during the past five years of each of the above-named executive officers have been as an officer or other member of management of the Company or one or more of its subsidiaries. In general, management of the Company is organized into three groups: North America/Latin America International Corporate/Central Services The principal managers for each of these groups are as follows: North America/Latin America --------------------------- Name Title ---- ----- Michael K. Lorelli Executive Vice President and President, North America/Latin America R. Kent Doss Vice President - Sales Jaclyn K. Flatow Vice President - Marketing John C. LaBonty General Manager - Canada Kevin J. Paradise Vice President - Human Resources Robert M. Pietryka Vice President - Operations Jose Violante Vice President - Latin America International ------------- Thomas J. Mason Group Vice President - International Andrew Armenian Vice President and General Manager-CIS -11- Patrick Legrand Vice President - Marketing Li, Ming Di General Manager - China Peter C. Napier Vice President - Operations Anthony D. O'Neill Vice President - Finance John D. Perrett Vice President - Human Resources Christian Roure Vice President - Sales, Europe T. Peter Stephenson Acting Vice President - Sales, U.K. and Ireland Corporate/Central Services -------------------------- Edward T. Fogarty President and Chief Executive Officer Thomas Soper, III Senior Vice President - Corporate Human Resources and Communications Raymond F. Wright Senior Vice President - Chief Financial Officer David Briggs Vice President - Information Services, International Bruce P. Garren Vice President - Group Counsel Seth E. Herbert Vice President - International Counsel Martha B. Lindsay Vice President - Treasurer Janey M. Loyd Vice President - Business Development Anthony J. Principato Vice President - Tax Harry E. Raber Vice President - Corporate Engineering and Manufacturing Owen K. Rankin Vice President - Global Marketing Susan J. Riley Vice President - Finance Jerome B. Wainick Vice President - Research and Development Irwin Zaetz Vice President - Information Services, North America -12- PART II ------- Item 5. Market for Registrant's Common Equity and Related ------ ------------------------------------------------- Shareholder Matters ------------------- The Company's Common Stock is traded on the New York and Pacific Stock Exchanges. The following table provides quarterly dividend and Common Stock price range information for the years 1993 and 1994:
Common Stock Price Range (a) ------------------ Dividends High Low Per Share -------- -------- ------------ 1994 ---------------- First Quarter $44 1/2 $38 1/4 $0.42 Second Quarter 39 5/8 34 3/4 0.42 Third Quarter 39 1/4 35 5/8 0.42 Fourth Quarter 42 1/2 36 1/4 0.44 1993 ---------------- First Quarter $65 $53 1/2 $0.38 Second Quarter 54 1/8 39 1/2 0.38 Third Quarter 49 7/8 40 3/4 0.80(b) Fourth Quarter 46 3/8 41 1/4 -- (b)
(a) Reflects trading on the New York Stock Exchange. (b) Dividends of $0.42 per share declared in the third quarter were paid in December 1993. As of March 15, 1995, there were 7,120 holders of record of the Company's Common Stock. Item 6. Selected Financial Data ------ ----------------------- The information required by this item is set forth in a separate section of this Annual Report on Form 10-K under the caption "Selected Financial Data" appearing on page F-2 and is incorporated herein by reference. -13- Item 7. Management's Discussion and Analysis of Results of ------ -------------------------------------------------- Operations and Financial Condition ---------------------------------- The information required by this item is set forth in a separate section of this Annual Report on Form 10-K under the caption "Management's Discussion and Analysis" beginning on page F-3 and is incorporated herein by reference. Item 8. Financial Statements and Supplementary Data ------ ------------------------------------------- The information required by this item is set forth in a separate section of this Annual Report on Form 10-K as indicated in the "Index to Financial Information" appearing on page F-1 and is incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on ------ ------------------------------------------------ Accounting and Financial Disclosure ----------------------------------- None. PART III -------- Item 10. Directors and Executive Officers of the Registrant ------- -------------------------------------------------- The information relating to nominees for election as directors of the Company set forth under the caption "Election of Directors" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 25, 1995 is incorporated herein by reference. The information on executive officers set forth under the first two paragraphs of the caption "Management of the Registrant" beginning on page 9 (including the table and footnotes) is incorporated herein by reference. The information relating to compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, set forth under the caption "Executive Compensation and Other Information - Other Information" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 25, 1995 is incorporated herein by reference. Item 11. Executive Compensation ------- ---------------------- The information regarding executive compensation set forth under the captions "Information Regarding the Board of Directors -Compensation of Directors," "Executive Compensation and Other Information" and "Proposal to Approve the 1995 Directors Stock and Deferred Compensation Plan" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 25, 1995 is incorporated herein by reference. -14- Item 12. Security Ownership of Certain Beneficial Owners and ------- ---------------------------------------------------- Management ---------- The information regarding the security ownership of certain beneficial owners and management set forth under the caption "Security Ownership by Management and Others" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 25, 1995 is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions ------- ---------------------------------------------- The information pertaining to certain relationships and related transactions set forth under the captions "Information Regarding the Board of Directors - Compensation of Directors" and "Executive Compensation and Other Information - Compensation Committee Interlocks and Insider Participation" in the Company's definitive Proxy Statement for the annual meeting of shareholders to be held on April 25, 1995 is incorporated herein by reference. The services performed for the Company by Doherty, Wallace, Pillsbury & Murphy, P.C. were on terms no less favorable to the Company than if such services had been provided by unaffiliated parties. PART IV ------- Item 14. Exhibits, Financial Statement Schedules, ------- ---------------------------------------- and Reports on Form 8-K ----------------------- (a) Documents filed as part of this report 1. Financial Statements The list of financial statements set forth under the caption "Index to Financial Information" on page F-1 is incorporated herein by reference. 2. Financial Statement Schedules The list of financial statement schedules set forth under the caption "Index to Financial Information" on page F-1 is incorporated herein by reference. All other schedules have been omitted, as the required information is inapplicable or the information is presented in the financial statements or related notes. 3. Exhibits Exhibit Number Description ------- ----------- 3(1) Certificate of Incorporation of the Company, as amended through April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the Company's Form S-8 Registration Statement (Reg. No. 33-13902), -15- incorporated herein by reference. 3(2) Certificate of Amendment of Certificate of Incorporation of the Company, dated April 24, 1990, filed May 15, 1990 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1990, incorporated herein by reference. 3(3) Certificate of Amendment of Certificate of Incorporation of the Company, dated April 28, 1992, filed May 15, 1992 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1992, incorporated herein by reference. 3(4) By-Laws of the Company, as amended, filed herewith. 4(1) Description of the rights of security holders set forth in the Certificate of Incorporation of the Company, as amended through April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the Company's Form S-8 Registration Statement (Reg. No. 33-13902), incorporated herein by reference. 4(2) Description of the rights of security holders set forth in the Certificate of Amendment of Certificate of Incorporation of the Company, dated April 28, 1992, filed May 15, 1992 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1992, incorporated herein by reference. 4(3) Rights Agreement, dated as of October 24, 1989, between the Company and First Chicago Trust Company of New York, which includes the Form of Right Certificate as Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B, filed October 27, 1989 as Exhibit 1 to the Company's Form 8-A Registration Statement, incorporated herein by reference. 4(4)(a) Indenture dated as of December 1, 1993 between the Company and Citibank, N.A., as trustee, relating to the Company's Medium- Term Note Program, filed March 31, 1994 as Exhibit 4(4)(a) to the Company's Form 10-K Report for the year ended December 31, 1993, incorporated herein by reference. 4(4)(b) Form of Floating Rate Debt Security, filed December 16, 1993 as Exhibit 4-a to the -16- Company's Report on Form 8-K, incorporated herein by reference. 4(4)(c) Form of Fixed Rate Debt Security, filed December 16, 1993 as Exhibit 4-b to the Company's Report on Form 8-K, incorporated herein by reference. Management Contracts and Compensatory Plans and Arrangements (Exhibits 10(1) - 10(21)) ----------------------- 10(1)(a) 1981 Long Term Incentive Plan, as amended through November 4, 1988, filed as Exhibit 10(1)(a) to the Company's Report on Form 10-K for the year 1988, incorporated herein by reference. 10(1)(b) Amendment to 1981 Long Term Incentive Plan, dated as of February 27, 1990, filed as Exhibit 10(1)(b) to the Company's Report on Form 10-K for the year 1989, incorporated herein by reference. 10(1)(c) Amendment to 1981 Long Term Incentive Plan, effective as of June 25, 1991, filed as Exhibit 10(1)(c) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(1)(d) Amendment to 1981 Long Term Incentive Plan, effective as of June 23, 1992, filed as Exhibit 10(1)(d) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(1)(e) Amendment to 1981 Long Term Incentive Plan, effective as of February 23, 1993, filed as Exhibit 10(1)(e) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(1)(f) Addendum to 1981 Long Term Incentive Plan, filed April 30, 1987 as Exhibit 28(a) to the Company's Form S-8 Registration Statement (Reg. No. 33-13902), incorporated herein by reference. 10(2)(a) 1981 Incentive Stock Option Plan, as amended through April 30, 1987, filed April 30, 1987 as Exhibit 28(a) to the Company's Form S-8 Registration Statement (Reg. No. 33- 13902), incorporated herein by reference. -17- 10(2)(b) Amendment to 1981 Incentive Stock Option Plan, dated as of February 27, 1990, filed as Exhibit 10(2)(b) to the Company's Report on Form 10-K for the year 1989, incorporated herein by reference. 10(2)(c) Amendment to 1981 Incentive Stock Option Plan, effective as of June 23, 1992, filed as Exhibit 10(2)(c) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(2)(d) Amendment to 1981 Incentive Stock Option Plan, effective as of February 23, 1993, filed as Exhibit 10(2)(d) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(a) 1991 Stock Option Plan, filed as Exhibit 10(3) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(3)(b) First Amendment to 1991 Stock Option Plan, effective as of July 1, 1991, filed as Exhibit 10(3)(b) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(3)(c) Second Amendment to 1991 Stock Option Plan, effective as of July 1, 1991, filed as Exhibit 10(3)(c) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(3)(d) Third Amendment to 1991 Stock Option Plan, effective as of June 23, 1992, filed as Exhibit 10(3)(d) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(e) Fourth Amendment to 1991 Stock Option Plan, effective as of February 23, 1993, filed as Exhibit 10(3)(e) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(f) Fifth Amendment to 1991 Stock Option Plan, effective as of February 23, 1993, filed as Exhibit 10(3)(f) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. -18- 10(3)(g) Addendum to 1991 Stock Option Plan, filed as Exhibit 10(3)(g) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(3)(h) Sixth Amendment to 1991 Stock Option Plan, effective as of February 1, 1994, filed as Exhibit 10(3)(h) to the Company's Report on Form 10-K for the year 1993, incorporated herein by reference. 10(4)(a) 1989 Restricted Stock Plan, as amended through December 31, 1990, filed as Exhibit 10(4) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(4)(b) Amendment to 1989 Restricted Stock Plan, effective as of February 23, 1993, filed as Exhibit 10(4)(b) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(5) Supplemental Executive Retirement Plan, effective July 1, 1986, as amended and restated effective July 1, 1994, filed as Exhibit 10(6) to the Company's Report on Form 10-Q for the quarter ended June 30, 1994, incorporated herein by reference. 10(6) Trust Agreement between the Company and The Northern Trust Company, dated as of October 31, 1988, filed as Exhibit 10(6) to the Company's Report on Form 10-K for the year 1988, incorporated herein by reference. 10(7) Pension Plan for Non-Employee Directors, filed as Exhibit 10(10) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference. 10(8)(a) 1992 Directors Stock Incentive Plan, filed as Exhibit 10(11) to the Company's Report on Form 10-K for the year 1991, incorporated herein by reference. 10(8)(b) First Amendment to 1992 Directors Stock Incentive Plan, effective as of August 18, 1992, filed as Exhibit 10(8)(b) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(8)(c) Second Amendment to 1992 Directors Stock -19- Incentive Plan, effective as of February 23, 1993, filed as Exhibit 10(8)(c) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(8)(d) Third Amendment to the 1992 Directors Stock Incentive Plan, effective as of August 24, 1993, filed as Exhibit 10(3) to the Company's Report on Form 10-Q/A for the quarterly period ended September 30, 1993, incorporated herein by reference. 10(8)(e) Fourth Amendment to Tambrands Inc. 1992 Directors Stock Incentive Plan, effective as of April 28, 1994, filed as Exhibit 10(7) to the Company's Report on Form 10-Q for the quarter ended June 30, 1994, incorporated herein by reference. 10(8)(f) Fifth Amendment to the Tambrands Inc. 1992 Directors Stock Incentive Plan, effective as of September 1, 1994, filed as Exhibit 10(4) to the Company's Report on Form 10-Q for the quarter ended September 30, 1994, incorporated herein by reference. 10(9)(a) Employment Protection Agreement between the Company and Mr. Edward T. Fogarty, dated as of May 31, 1994, filed as Exhibit 10(1) to the Company's Report on Form 10-Q for the quarter ended June 30, 1994, incorporated herein by reference; 10(9)(b) Employment Protection Agreement between the Company and Mr. Raymond F. Wright, dated as of August 23, 1989, and First Amendment to Employment Protection Agreement between the Company and Mr. Raymond F. Wright, dated as of October 16, 1990, filed as Exhibit 10(11)(c) to the Company's Report on Form 10-K for the year 1990, incorporated herein by reference; 10(9)(c) Employment Protection Agreement between the Company and Mr. Michael K. Lorelli, dated as of August 31, 1994, filed as Exhibit 10(2) to the Company's Report on Form 10-Q for the quarter ended September 30, 1994, incorporated herein by reference; 10(9)(d) Employment Protection Agreement between the Company and Mr. Jerome B. Wainick, dated as of June 18, 1990, and First Amendment to -20- Employment Protection Agreement between the Company and Mr. Jerome B. Wainick, dated as of October 16, 1990, filed herewith; 10(9)(e) Employment Protection Agreement between the Company and Mr. Harry E. Raber, dated as of August 13, 1992, filed herewith; The Company has agreements similar to the agreements listed as Exhibits 10(9)(b), 10(9) (d) and 10(9)(e) with its other executive officers. 10(10) Resolution of the Board of Directors of the Company with respect to the compensation of the Chairman of the Board, adopted on October 25, 1994, filed herewith. 10(11) Resolution of the Board of Directors of the Company with respect to the compensation of the Board, adopted on December 13, 1994, filed herewith. 10(12) 1995 Directors Stock and Deferred Compensation Plan, effective as of July 1, 1995 (subject to shareholder approval at the annual meeting of shareholders to be held on April 25, 1995), included as Exhibit A to the Company's Proxy Statement, dated March 10, 1995, for the annual meeting of shareholders to be held on April 25, 1995, incorporated herein by reference. 10(13) Executive Severance Program of the Company, filed as Exhibit 10(15) to the Company's Report on Form 10-K for the year 1989, incorporated herein by reference. 10(14) 1981 Annual Incentive Plan of the Company, refiled herewith, because the original filing is no longer eligible for incorporation by reference pursuant to Rule 24 of the Commission's Rules of Practice. 10(15) Letter Agreement between the Company and Mr. Edward T. Fogarty, dated as of April 25, 1994, filed as Exhibit 10(1) to the Company's Report on Form 10-Q for the quarter ended June 30, 1994, incorporated herein by reference. 10(16) Letter Agreement between the Company and Mr. Michael K. Lorelli, dated as of August 30, 1994, filed as Exhibit 10(1) to the Company's -21- Report on Form 10-Q for the quarter ended September 30, 1994, incorporated herein by reference. 10(17) Letter Agreement between the Company and Mr. Thomas Soper, III, dated as of August 29, 1994, filed herewith. 10(18) Letter Agreement between the Company and Mr. Thomas J. Mason, dated as of October 18, 1994, filed herewith. 10(19) Restricted Stock Agreement between the Company and Mr. Edward T. Fogarty, dated May 31, 1994, filed as Exhibit 10(3) to the Company's Report on Form 10-Q for the quarter ended June 30, 1994, incorporated herein by reference. 10(20) Stock Option Agreement between the Company and Mr. Edward T. Fogarty, dated May 31, 1994, filed as Exhibit 10(4) to the Company's Report on Form 10-Q for the quarter ended June 30, 1994, incorporated herein by reference. 10(21) Retirement Agreement between the Company and Mr. Charles J. Chapman, dated as of February 28, 1994, filed as Exhibit 10(21) to the Company's Report on Form 10-K for the year 1993, incorporated herein by reference. 10(22)(a) Commercial Paper Dealer Agreement between the Company and Merrill Lynch Money Markets, Inc., dated November 18, 1992, filed as Exhibit 10(15) (a) to the Company's Report on Form 10- K for the year 1992, incorporated herein by reference. 10(22)(b) Letter Agreement between the Company and the First National Bank of Chicago, dated as of November 18, 1992, filed as Exhibit 10(15)(b) to the Company's Report on Form 10-K for the year 1992, incorporated herein by reference. 10(22)(c) Amended and Restated Credit Agreement by and among the Company, Tambrands Limited, the signatory banks thereto and the Bank of New York, as agent, dated as of September 6, 1994, filed as Exhibit 10(5) to the Company's Report on Form 10-Q for the quarter ended September 30, 1994, incorporated herein by reference. 12 Computation of Ratio of Earnings to Fixed -22- Charges, filed herewith. 21 Subsidiaries of the Company, filed herewith. 23 Independent Auditors' Consent, filed herewith. 24 Powers of attorney, filed herewith. 27 Financial Data Schedules, filed herewith (in electronic format only). (b) Reports on Form 8-K The Company filed a Report under Item 5 of Form 8-K on October 27, 1994 in order to file a press release, issued by the Company on October 26, 1994, which contained the Company's third-quarter 1994 results. TAMPAX, COMPAK, LITES, SATIN, SATIN TOUCH and TAMPETS are trademarks of Tambrands Inc. -23- SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TAMBRANDS INC. Date: March 28, 1995 By /s/ EDWARD T. FOGARTY -------------------------- Edward T. Fogarty President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ EDWARD T. FOGARTY President and Chief March 28, 1995 --------------------------- Executive Officer EDWARD T. FOGARTY and Director (Principal Executive Officer) /s/ RAYMOND F. WRIGHT Senior Vice March 28, 1995 -------------------------- President-Chief RAYMOND F. WRIGHT Financial Officer (Principal Financial Officer) /s/ SUSAN J. RILEY Vice President - March 28, 1995 -------------------------- Finance (Principal SUSAN J. RILEY Accounting Officer) /s/ HOWARD B. WENTZ, JR. Chairman and March 28, 1995 -------------------------- Director HOWARD B. WENTZ, JR. * Director March 28, 1995 -------------------------- LILYAN H. AFFINITO * Director March 28, 1995 -------------------------- PAUL S. DOHERTY * Director March 28, 1995 -------------------------- FLOYD HALL -24- Signature Title Date --------- ----- ---- * Director March 28, 1995 -------------------------- ROBERT P. KILEY * Director March 28, 1995 -------------------------- JOHN LOUDON * Director March 28, 1995 -------------------------- RUTH M. MANTON * Director March 28, 1995 -------------------------- JOHN A. MEYERS * Director March 28, 1995 -------------------------- H.L. TOWER * Director March 28, 1995 -------------------------- ROBERT M. WILLIAMS * By /s/ EDWARD T. FOGARTY --------------------------- Edward T. Fogarty Attorney-in-Fact -25- INDEX TO FINANCIAL INFORMATION ------------------------------
Page Reference --------- Selected Financial Data............................... F-2 Management's Discussion and Analysis of Results of Operations and Financial Condition......... F-3 Financial Statements: Consolidated Statements of Earnings for the years ended December 31, 1994, 1993 and 1992.................. F-6 Consolidated Statements of Retained Earnings for the years ended December 31, 1994, 1993 and 1992.................. F-6 Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992.................. F-7 Consolidated Balance Sheets as of December 31, 1994 and 1993........................ F-8 Notes to Consolidated Financial Statements........................................ F-9 Independent Auditors' Report on Consolidated Financial Statements................. F-16 Financial Statement Schedule: VIII Reserves.................................... F-17 Independent Auditors' Report on Financial Statement Schedule...................... F-18 Supplementary Financial Information and Quarterly Data for the years ended December 31, 1994 and 1993.................. F-19
F-1 TAMBRANDS INC. Selected Financial Data ($ in thousands, except per share amounts)
Years ended December 31 1994 1993 (a) 1992 1991 (a) 1990 ---- ---- ---- ---- ---- Net sales $644,513 $611,465 $684,113 $660,722 $631,511 Gross profit 438,402 409,759 456,032 418,155 385,428 Marketing, selling and distribution 233,753 202,031 193,477 194,696 172,264 Administrative and general 53,034 61,378 67,823 63,027 63,238 Restructuring and other charges - 30,042 - 30,348 - Operating income 151,615 116,308 194,732 130,134 149,926 Earnings before cumulative effect of accounting change 89,729 73,702 122,409 79,035 97,768 Earnings before cumulative effect of accounting change per share 2.43 1.91 3.09 1.92 2.30 Average number of shares outstanding 36,992 38,632 39,640 41,216 42,524 Total assets 379,075 362,398 372,981 390,266 381,029 Medium-term notes payable 59,983 30,000 - - - Dividends per share 1.70 1.56 1.40 1.24 1.11
(a) Results and related financial data for 1993 and 1991 include Restructuring and other charges. F-2 Management's Discussion and Analysis Results of Operations 1994 vs. 1993 Consolidated Net sales for 1994 were $644.5 million, an increase of 5.4% from 1993. The increase was primarily due to higher worldwide unit sales, principally in the United States, driven by stabilization of retail trade inventories and the successful launch of two new products, Tampax Satin Touch and Tampax Lites. Sales volumes were also favorable in Europe where new products were launched in both the United Kingdom and France and in the developing markets of Russia and Ukraine. Gross profit as a percent of Net sales was 68% for 1994, up from 67% in 1993. The increase in margin reflects the impact of higher sales volume along with the Company's continued support of its worldwide manufacturing efficiency programs and its capital expenditures for productivity improvements. Marketing, selling and distribution expenses were up 15.7% compared with the prior year. The higher spending was primarily attributable to increased advertising and promotions worldwide to support the Tampax tampon franchise. This higher brand support was partially offset by reductions in overhead spending. In the United States, the Company regained market share throughout 1994 in the growing tampon category. Total year market share recovered to within 1% of 1993. A 13.6% savings was experienced in Administrative and general expenses, principally due to the consolidation of international management units and on- going overhead reduction programs. Increased sales volume combined with overhead savings was partially offset by increased brand support spending. This resulted in a 3.6% net improvement in Operating income versus 1993, exclusive of the 1993 restructuring charge. Interest, net and other reflected a significant increase in expense in 1994 compared to 1993. Foreign exchange transactions resulted in costs in the current year versus gains in 1993. Additionally, interest expense was higher, reflecting an increase in the Company's debt level and higher average interest rates. The effective tax rate for 1994 was 36.7%, compared to 37.9% in 1993. The higher effective tax rate in 1993 was primarily due to the restructuring charge, the cost of which was not fully deductible for tax purposes. Exclusive of the restructuring charge, the 1993 effective tax rate was 36.8%. 1994 Earnings per share were $2.43 in comparison to $1.64 in 1993. Earnings per share were the same as the prior year before the impact of the restructuring charge and adoption of SFAS No. 112 in 1993. The increase in Earnings per share was greater than that of Net earnings because fewer shares were outstanding on average in 1994 due to the Company's share repurchase program. Outlook The Company believes that the recent trend by retailers and distributors to reduce inventories and the related adverse impact on shipments will continue in future periods. However, the rate of inventory reduction in future periods is expected to be significantly less than the rate of reduction in 1993 and therefore shipments are expected to more closely match retail sales, as they did in 1994. The worldwide market for consumer products will continue to be highly competitive and disinflationary. Recently, competition has become more intense and management believes that such conditions could become even more competitive, including higher levels of advertising and promotional activities, additional new product introductions by competitors and continued activity in the private label tampon sector. The Company intends to continue to support the Tampax tampon franchise with highly competitive levels of advertising and promotional activities in the United States and Europe. F-3 1993 vs. 1992 Consolidated Net sales for 1993 were $611.5 million, a decrease of 10.6% from 1992. The decrease was the result of lower unit sales in the United States and Europe, unfavorable foreign exchange rates in Europe and the elimination of non-core products. Volume shortfalls in 1993 were principally caused by a trend by US retailers and European distributors to reduce consumer goods inventory levels. The decline was partially offset by favorable pricing adjustments associated with the European restaging in 1992. Gross profit as a percent of Net sales was 67% for 1993, up from 66.7% in 1992. This increase was attributable to elimination of the lower-margin sales of divested products and worldwide manufacturing efficiencies, partially offset by the impact of lower sales volume. In 1993, the Company provided $30.0 million for restructuring of manufacturing and administrative operations and the cost of management changes including the adoption of a consolidated international management strategy. The anticipated annual savings of approximately $20.0 million resulting from work force reductions and worldwide manufacturing restructuring are expected to be fully realized by 1995. Operating income was $116.3 million in 1993, down $78.4 million from 1992. In addition to the restructuring charge of $30.0 million, the decline in Operating income was primarily due to the lower Net sales. Marketing, selling and distribution expenses increased 4.4% over 1992. The Company raised its level of advertising and promotional spending to support the Tampax brand in the face of increased competition and to regain market share in the second half of 1993. The increase in brand support was partially offset by reductions in the other components of Marketing, selling and distribution as well as lower administrative spending in 1993. These reductions were the result of the continuing program to reduce overhead expenses. Interest, net and other improved by $5.2 million primarily due to net gains on foreign exchange contracts, somewhat mitigated by interest expense on increased borrowings. The effective tax rate for 1993, exclusive of the restructuring charge, was 36.8%, compared to 36.2% in 1992. Financial Condition Cash Flows from Operating Activities 1994 Cash flows from operating activities amounted to $128.9 million versus $128.7 million in 1993. The improvement in Net earnings was combined with favorable working capital management and was partially offset by cash used to fund restructuring activities. Over the past three years, Cash flows from operating activities totaled $353.4 million. These funds were used for the repurchase of Common Stock for treasury purposes, payment of dividends and capital expenditures. Capital Expenditures The 1994 capital spending programs relate to investments in equipment to improve product quality and productivity, modernize production facilities and reduce costs. Over the past three years, the Company spent $139.2 million on capital improvements. 1995 spending levels are expected to approximate those of 1994. Liquidity and Capital Resources During 1994, the Company continued to utilize its strong debt rating and a favorable financial climate to take advantage of low US interest rates through short-term bank credit lines and a commercial paper program. Additionally, the Company maintains a $150 million medium-term note facility of which $60 million was outstanding at December 31, 1994. F-4 Cash flows from operations and the ability to borrow from a variety of sources will provide the Company with the liquidity to continue the investments necessary to meet the Company's long-term strategic goals. The Company also utilizes cash resources to enhance shareholder value through the payment of dividends and its stock repurchase program. In 1994, record cash dividends of $62.7 million were paid. This is the 43rd consecutive year of higher annual dividend payments. During the year, the Company spent $71.1 million in its Common Stock repurchase program. Since 1989, a total of 7,620,600 shares have been purchased. The Company will continue the share repurchase program as conditions warrant. F-5
Consolidated Statements of Earnings Tambrands Inc. and Subsidiaries Years Ended December 31 (in thousands, except per share amounts) 1994 1993 1992 -------- --------- --------- Net Sales $644,513 $ 611,465 $ 684,113 Cost of products sold 206,111 201,706 228,081 -------- --------- --------- Gross profit 438,402 409,759 456,032 Selling, administrative and general expenses: Marketing, selling and distribution 233,753 202,031 193,477 Administrative and general 53,034 61,378 67,823 Restructuring and other charges -- 30,042 -- -------- --------- --------- 286,787 293,451 261,300 -------- --------- --------- Operating Income 151,615 116,308 194,732 Interest, net and other (9,864) 2,344 (2,869) -------- --------- --------- Earnings before provision for income taxes and cumulative effect of accounting change 141,751 118,652 191,863 Provision for income taxes 52,022 44,950 69,454 -------- --------- --------- Earnings Before Cumulative Effect of Accounting Change 89,729 73,702 122,409 Cumulative effect of accounting change -- (10,252) (1,009) -------- --------- --------- Net Earnings $ 89,729 $ 63,450 $ 121,400 ======== ========= ========= Average number of shares outstanding 36,992 38,632 39,640 Per Share Earnings before cumulative effect of accounting change $2.43 $1.91 $3.09 Cumulative effect of accounting change -- (0.27) (0.03) -------- --------- --------- Net earnings $2.43 $1.64 $3.06 ======== ========= =========
Consolidated Statements of Retained Earnings
Years Ended December 31 (in thousands, except per share amounts) 1994 1993 1992 -------- --------- --------- Balance at beginning of year $430,822 $ 433,851 $ 375,329 Net earnings 89,729 63,450 121,400 Dividends (62,721) (60,154) (55,469) Net issuance of treasury stock in fulfillment of various employee benefit, stock option and award plans (759) (6,325) (7,409) -------- --------- --------- Balance at end of year $457,071 $ 430,822 $ 433,851 ======== ========= ========= Dividends per share $1.70 $1.56 $1.40
See accompanying notes to consolidated financial statements. F-6 Consolidated Statements of Cash Flows Tambrands Inc. and Subsidiaries
Years Ended December 31 (in thousands) 1994 1993 1992 -------- --------- --------- Cash Flows from Operating Activities Net earnings $ 89,729 $ 63,450 $ 121,400 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 24,284 18,372 17,315 Deferred income taxes 4,557 (3,400) (3,414) Cumulative effect of accounting change -- 10,252 1,009 Restructuring and other (10,417) 14,946 (18,439) Change in: Accounts receivable (2,224) 21,485 (4,017) Inventories and other current assets (398) 456 (2,402) Taxes on income 5,925 3,426 (12,695) Accounts payable and accrued expenses 17,415 (256) (2,958) -------- --------- --------- Net cash provided by operating activities 128,871 128,731 95,799 -------- --------- --------- Cash Flows from Investing Activities Capital expenditures (38,470) (45,636) (55,125) Proceeds from sales of property, plant and equipment 2,093 3,686 7,343 Proceeds from sales of marketable securities, net 639 1,164 14,243 -------- --------- --------- Net cash used in investing activities (35,738) (40,786) (33,539) -------- --------- --------- Cash Flows from Financing Activities Payment of dividends (62,721) (60,154) (55,469) Purchase of shares for treasury (71,118) (57,946) (123,451) Short-term debt changes 6,149 (18,308) 72,316 Issuance of medium-term notes 29,983 30,000 -- Proceeds from exercise of stock options and other 2,422 12,432 14,584 -------- --------- --------- Net cash used in financing activities (95,285) (93,976) (92,020) -------- --------- --------- Effect of exchange rate changes on cash 730 (658) (3,147) -------- --------- --------- Net decrease in cash and cash equivalents (1,422) (6,689) (32,907) Cash and cash equivalents at beginning of year 15,298 21,987 54,894 -------- --------- --------- Cash and cash equivalents at end of year $ 13,876 $ 15,298 $ 21,987 ======== ========= ========= Supplemental Cash Flow Information Income taxes paid $ 49,500 $ 49,567 $ 82,446 Interest paid 4,573 4,574 8,006 -------- --------- ---------
See accompanying notes to consolidated financial statements. F-7 Consolidated Balance Sheets Tambrands Inc. and Subsidiaries
December 31 (in thousands, except share data) 1994 1993 --------- --------- Assets Current assets Cash and cash equivalents $ 13,876 $ 15,298 Accounts receivable, net 80,593 75,592 Inventories 37,957 38,000 Deferred taxes on income 18,892 20,427 Prepaid expenses and other current assets 25,818 24,445 --------- --------- Total current assets 177,136 173,762 Property, plant and equipment, net 194,315 180,396 Intangible and other assets 7,624 8,240 --------- --------- Total assets $ 379,075 $ 362,398 ========= ========= Liabilities and Shareholders' Equity Current liabilities Short-term borrowings $ 70,517 $ 64,368 Accounts payable 31,530 25,793 Accrued expenses 80,381 81,083 Taxes on income 20,732 15,137 --------- --------- Total current liabilities 203,160 186,381 Medium-term notes payable 59,983 30,000 Deferred taxes on income 21,450 17,119 Postemployment benefits 12,468 13,873 --------- --------- Total liabilities 297,061 247,373 Shareholders' equity Common Stock, authorized 300,000,000 shares, par value $.25 per share; issued 43,547,938 shares 10,887 10,887 Retained earnings 457,071 430,822 Cumulative foreign currency translation adjustment (13,621) (20,659) Treasury stock (371,016) (303,948) Unamortized value of restricted stock and pension costs (1,307) (2,077) --------- --------- Total shareholders' equity 82,014 115,025 --------- --------- Total liabilities and shareholders' equity $ 379,075 $ 362,398 ========= =========
See accompanying notes to consolidated financial statements. F-8 Notes To Consolidated Financial Statements Tambrands Inc. and subsidiaries (dollar amounts in thousands, except per share amounts) 1 Accounting Policies The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. Where alternatives exist, the choices selected are described below. Consolidation The 1994 and 1993 consolidated financial statements include the accounts of Tambrands Inc. and all majority owned subsidiaries (the "Company"). Prior to 1993, businesses in China, Russia and Ukraine were accounted for under the cost method and carried as Investments in affiliates. The financial results and positions of these businesses were consolidated in 1993. The effect of consolidation of these subsidiaries was not material to the financial statements as a whole; therefore, prior years were not restated. Foreign Currency Translation For subsidiaries not located in highly inflationary economies, gains or losses resulting from the translation of subsidiary companies' assets and liabilities denominated in foreign currencies are shown as a separate component of Shareholders' equity. For subsidiaries operating in highly inflationary economies, working capital items are translated using current rates of exchange with adjustments included in Operating income. Cash Equivalents Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Inventories Inventories are stated at the lower of cost or market. Cost is determined using the LIFO method for all domestic inventories. All other inventories are stated at FIFO. Depreciation Depreciation is computed on the straight-line and accelerated methods over the useful lives of the assets. Intangibles Intangible assets are amortized on a straight-line basis over periods not exceeding 40 years. Income Taxes Deferred taxes are provided for differences between the financial statement and tax bases of assets and liabilities. Provision has not been made for income taxes on foreign subsidiaries' unremitted earnings to the extent that such earnings have been reinvested in the business; any US income taxes payable on the distribution of available earnings should generally be offset by credits for foreign taxes paid. Reclassifications Certain reclassifications have been made to prior years' financial statements to conform to the 1994 presentation. 2 Balance Sheet Components The components of certain balance sheet accounts at December 31 are as follows:
1994 1993 -------- -------- Accounts receivable, net Accounts receivable trade $ 77,235 $ 75,798 Less allowance for doubtful accounts 1,456 1,453 -------- -------- 75,779 74,345 Other 4,814 1,247 -------- -------- $ 80,593 $ 75,592 ======== ======== Inventories Raw materials $ 12,967 $ 10,140 Finished goods 24,990 27,860 -------- -------- $ 37,957 $ 38,000 ======== ======== Current cost of LIFO inventories $ 30,617 $ 26,837 Stated value of LIFO inventories 14,713 9,838 -------- -------- Excess of current cost over stated value $ 15,904 $ 16,999 ======== ========
F-9
1994 1993 -------- -------- Property, plant and equipment, net (at cost) Buildings, leaseholds and improvements $ 56,522 $ 51,907 Machinery, equipment and fixtures 230,333 189,518 Land 3,808 4,536 Construction in progress 23,794 29,388 -------- -------- 314,457 275,349 Less accumulated depreciation 120,142 94,953 -------- -------- $194,315 $180,396 ======== ======== Intangible and other assets Cost $ 14,066 $ 14,147 Less accumulated amortization 6,442 5,907 -------- -------- $ 7,624 $ 8,240 ======== ======== Accrued expenses Promotions $ 27,723 $ 16,774 Salaries and benefits 25,480 24,691 Restructuring reserves 5,205 18,071 Other liabilities 21,973 21,547 -------- -------- $ 80,381 $ 81,083 ======== ========
3 Statement of Earnings Information 1994 1993 1992 -------- -------- -------- Interest, net and other Net financing: Interest income $ 1,304 $ 983 $ 3,323 Interest expense (7,645) (4,890) (8,567) Translation gain on foreign currency loans -- -- 3,427 -------- -------- -------- (6,341) (3,907) (1,817) Net realization on foreign currency transactions (3,449) 6,551 (462) Other (74) (300) (590) -------- -------- -------- $ (9,864) $ 2,344 $ (2,869) ======== ======== ======== Depreciation $ 23,545 $ 17,570 $ 15,749 Research and development 10,735 9,881 11,769
4 Benefit Plans The Company maintains several non-contributory pension plans covering domestic and foreign employees who meet certain minimum service and age requirements and provides supplemental non-qualified retirement benefits to non-employee directors, certain officers and key employees. Pensions are based upon earnings of covered employees during their periods of credited service. The Company's funding policy for its pensions is to make the annual contributions required by applicable regulations. The following table sets forth the funded status of the plans and the amounts recognized in the accompanying financial statements.
1994 1993 -------- -------- Plan assets at fair value, primarily stocks and bonds $ 86,950 $ 91,242 -------- -------- Actuarial present value of benefit obligations: Vested benefits 87,645 91,491 Nonvested benefits 4,749 6,120 -------- -------- Accumulated benefit obligation 92,394 97,611 Effect of projected future salary increases 7,949 11,723 -------- -------- Projected benefit obligation 100,343 109,334 -------- -------- Projected benefit obligation in excess of plan assets 13,393 18,092 Deferred actuarial adjustments 412 (4,738) Deferred prior service cost (3,527) (3,907) -------- -------- Accrued pension cost included in accrued expenses $ 10,278 $ 9,447 ======== ========
At December 31, 1994 and 1993, the accumulated benefit obligation of the domestic plans exceeded plan assets by $9,962 and $10,251, respectively. F-10 The net cost of pensions included in the Statements of earnings consists of:
1994 1993 1992 -------- -------- -------- Service cost: benefits earned during the period $ 5,045 $ 4,940 $ 4,880 Interest cost on projected benefit obligation 8,093 7,288 7,368 Actual return on plan assets 3,375 (12,703) (7,501) Net amortization and deferral (10,289) 6,697 654 -------- -------- ------- $ 6,224 $ 6,222 $ 5,401 ======== ======== =======
In 1994 and 1993, the discount rates used to determine the projected benefit obligation for the domestic plans were 8.5% and 7.5%, respectively, and the rates of increase in future compensation were 5% and 6%, respectively. For the international plans, the discount rates used to determine the projected benefit obligation were 9% in 1994 and 8% in 1993, and the rates of increase in future compensation ranged from 5.5% to 6% and 5.5% to 6.5% in 1994 and 1993, respectively. Expected long-term rates of return on plan assets ranged from 8.5% to 9.25% in both 1994 and 1993. Prior service costs arising from plan amendments are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under each plan. As of January 1, 1993, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 112, "Employers' Accounting for Postemployment Benefits," recognizing a charge to earnings of $16,000, amounting to $10,252 after tax or $0.27 per share. In 1992, the Company recognized the full amount of its estimated accumulated postretirement benefit obligation in accordance with the provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The pre-tax charge to 1992 earnings was $1,627 with a net earnings effect of $1,009 or $0.03 per share. The after-tax amounts of these accounting changes have been reflected in the 1993 and 1992 Statements of earnings as a cumulative effect of accounting change. The incremental annual cost of accounting for postretirement and postemployment benefits under the new accounting methods is not material. The actuarial assumptions used to measure the cost of postretirement and postemployment benefits are consistent with those used to measure the cost of the pension plans. The Company also sponsors a defined contribution 401(k) savings plan available to domestic employees who meet certain minimum age and service requirements. The plan, which is funded principally with the Company's Common Stock, includes provision for a discretionary contribution by the Company of up to 2% of each employee's covered earnings based on Company performance. 5 Income Taxes Provision for income taxes for the years ended December 31 has been made as follows:
1994 1993 1992 ------- ------- ------- Current: United States $47,866 $44,558 $65,885 Foreign (401) 3,792 6,983 ------- ------- ------- 47,465 48,350 72,868 Deferred: United States 6,699 (3,915) (3,154) Foreign (2,142) 515 (260) ------- ------- ------- 4,557 (3,400) (3,414) ------- ------- ------- $52,022 $44,950 $69,454 ======= ======= =======
Changes in deferred taxes are due primarily to the restructuring provisions established in 1993. The effective tax rates for 1994, 1993 and 1992 were 36.7%, 37.9% and 36.2%, respectively. The higher effective tax rate in 1993 was primarily due to the restructuring charge, the cost of which was not fully deductible for tax purposes. Exclusive of the restructuring charge's effect, the 1993 effective tax rate was 36.8%. The difference between the comparable effective tax rates and the statutory federal rate is principally due to state income taxes. During 1994 and 1993, Shareholders' equity was credited for $76 and $1,330, respectively, for tax benefits relating to compensation expense for tax purposes in excess of the amounts recognized for financial reporting purposes. F-11 In 1992, the Company adopted SFAS No. 109, "Accounting for Income Taxes." The adoption of the Statement did not have a material effect on Net earnings. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the net deferred tax asset (liability) for the years ended December 31 are as follows:
1994 1993 ------- ------- Deferred tax assets: Employee benefits $ 5,320 $ 5,219 Postemployment benefits 4,208 5,748 Intercompany transactions 4,785 2,263 Restructuring 223 6,879 Accrued liabilities 5,579 3,783 Other 4,607 3,633 ------- ------- 24,722 27,525 ======= ======= Deferred tax liabilities: Property, plant and equipment 19,307 16,172 Safe harbor leases 6,816 7,490 Other 1,157 555 ------- ------- 27,280 24,217 ------- ------- $(2,558) $ 3,308 ======= =======
6 Restructuring and Other Charges In 1993, the Company announced a program to restructure its worldwide operations to improve efficiency and reduce costs. Its previous investments in technology enabled it to operate with reduced manufacturing and administrative overhead and fewer employees. As a result, the Company provided $30,042, or $20,273 after tax, for this restructuring and the cost of management changes caused by the adoption of a consolidated international management strategy. At December 31, 1994, the remaining accrual related primarily to committed severance plans and reflects longer severance obligations common in certain countries. 7 Commitments and Contingencies The Company's lease of its headquarters in White Plains, New York and European headquarters in the United Kingdom are non-cancelable operating leases. Certain computers and related equipment are held under capital leases with remaining terms of less than one year. Future minimum lease payments under operating leases with terms in excess of one year amount to $5,061 in 1995, $4,173 in 1996, $3,534 in 1997, $3,418 in 1998 and $3,193 in 1999. Rent expense in 1994, 1993 and 1992 amounted to $4,270 , $5,027 and $4,031, respectively. The Company has been named in product liability litigation and claims arising from the alleged association of tampons with Toxic Shock Syndrome. The cases seek compensatory and punitive damages in various amounts. The Company and certain of its former officers have been named as defendants in certain shareholder lawsuits now consolidated into one action. The consolidated lawsuit has been certified as a federal securities fraud class action on behalf of all purchasers of the Company's Common Stock during the period from December 14, 1992 through April 28, 1993. The complaint seeks an unspecified amount of damages on behalf of the purported class. The Company is involved, either as a named defendant or as the result of contractual indemnities, in litigation arising out of the operations of certain divested subsidiaries. Included in this litigation are a patent infringement action and an environmental matter. There are certain other legal proceedings pending against the Company arising out of its normal course of business in which claims for monetary damages are asserted. While it is not feasible to predict the outcome of these legal proceedings and claims with certainty, management is of the belief that any ultimate liabilities for damages either are covered by insurance or should not have a material adverse effect on the Company's financial position. F-12 8 Borrowings The Company's Short-term borrowings consist of commercial paper and notes payable bearing interest at prevailing market rates and supported by bank lines of credit amounting to $150,000 at December 31, 1994 and 1993. Commercial paper borrowings at December 31, 1994 and 1993 were $57,201 and $48,425, with average annual interest rates at year-end of 5.6% and 3.4%, respectively, with maturities in the first quarter of the subsequent year. Notes payable at December 31, 1994 and 1993 totaled $13,316 and $15,943, at average annual rates outstanding throughout the year of 5.7% and 4.3%, respectively. Commitment fees to secure the lines of credit are not material. In 1993, the Company established a $150,000 medium-term note facility. At December 31, 1994, $60,000 of these unsecured notes were outstanding, at interest rates ranging from 4.6% to 7.4%, with maturities varying from January 1997 to May 2004. At December 31, 1993, there were $30,000 of unsecured notes outstanding, at interest rates ranging from 5.5% to 5.6%, maturing in January 1999. The terms of the borrowing facilities include various covenants which provide, among other things, for limitations on liens and the maintenance of a minimum debt service ratio. The Company was in compliance with such covenants at December 31, 1994. 9 Financial Instruments As part of its risk management program, the Company minimizes its exposure to foreign currency fluctuation through the use of forward exchange contracts and options. At December 31, 1994, there were no forward exchange contracts outstanding. Forward exchange contracts with face values of $50,627 were outstanding at December 31, 1993, the carrying value of which approximated market. The Company had foreign currency options with face values of $31,958 and $52,600 at December 31, 1994 and 1993, respectively, expiring in the subsequent year. The unamortized premiums are amortized to income over the option periods and amounted to $520 and $999 at December 31, 1994 and 1993, respectively. Medium-term notes, carried at the discounted value of $59,983, had an estimated fair value of $54,500 at December 31, 1994. At December 31, 1993, the fair value of the notes approximated their carrying value of $30,000. 10 Shareholders' Equity Common Stock In 1992, the Company increased the number of authorized shares of Common Stock from 150 million to 300 million. Changes in outstanding shares for the years ended December 31 are as follows:
1994 1993 1992 ---------- ---------- ---------- Shares outstanding at beginning of year 38,292,952 39,162,634 40,647,529 Purchased for treasury (1,718,700) (1,187,100) (1,856,200) Issued for stock option and other employee plans from treasury 99,778 317,418 371,305 ---------- ---------- ---------- Shares outstanding at end of year 36,674,030 38,292,952 39,162,634 ========== ========== ========== Shares held in treasury at end of year 6,873,908 5,254,986 4,385,304 ---------- ---------- ----------
The Company has stock option plans which provide for the granting of options to directors, officers and key employees to purchase shares of its Common Stock within ten years, at prices equal to or greater than the fair market value on the date of grant. F-13 Activity for the years 1994, 1993 and 1992 is as follows:
Average Average Average Shares Price Shares Price Shares Price --------- ------- --------- ------- --------- ------- 1994 1993 1992 --------------------- -------------------- --------------------- Options for Common Stock: Outstanding at beginning of year 2,524,886 $51.36 2,755,451 $51.22 2,561,623 $46.07 Granted 866,074 38.78 452,272 43.96 590,075 63.47 Cancelled (508,672) 51.94 (446,546) 54.04 (80,580) 53.35 Exercised (36,654) 27.57 (236,291) 30.42 (315,667) 31.76 --------- ------ --------- ------ --------- ------ Outstanding at end of year 2,845,634 $47.80 2,524,886 $51.36 2,755,451 $51.22 ========= ====== ========= ====== ========= ======
At December 31, 1994 and 1993, respectively, there were options for 1,290,051 and 1,137,470 shares exercisable at average prices of $52.73 and $51.18 and there were 2,299,071 and 2,741,522 shares available for granting options. Cumulative Foreign Currency Translation Adjustment Amounts credited (charged) to Shareholders' equity amounted to $7,038, ($10,073) and ($19,804) for the years ended December 31, 1994, 1993 and 1992, respectively. Unamortized Value of Restricted Stock and Pension Costs Changes in the unamortized value of restricted stock represent charges for the market value of grants made during the year, offset by periodic amortization. Such net changes amounted to $4, ($577) and ($442) for the years ended December 31, 1994, 1993 and 1992, respectively. In 1994 and 1993, minimum pension liability adjustments, net of tax benefits, amounting to ($774) and $1,263, respectively, were reflected in Shareholders' equity. F-14 11 Segment and Geographic Information The Company operates in one industry segment, personal care products. The Company markets these products around the world. Sales are made and credit is granted to drug, grocery, variety and discount stores and other comparable outlets, as well as to wholesalers and distributors in those trades. A small number of significant customers are financed through highly leveraged capital structures, making them particularly sensitive to market interest rate changes and other economic variables. For the year ended December 31, 1994, the Company had a significant customer that accounted for 10.3% of the Company's Net sales. No single customer accounted for 10% or more of Net sales in prior years. Information about the Company's operations in different geographic areas follows:
1994 1993 1992 -------- -------- -------- Net sales United States $381,975 $363,337 $393,494 Europe 195,748 182,854 204,114 Other international 66,790 65,274 86,505 -------- -------- -------- $644,513 $611,465 $684,113 ======== ======== ======== Operating income United States $142,931 $142,399 $167,571 Europe 27,112 31,347 55,018 Other international 10,314 2,114 5,239 Unallocated items, net (28,742) (29,510) (33,096) Restructuring and other charges - (30,042) - -------- -------- -------- $151,615 $116,308 $194,732 ======== ======== ======== Identifiable assets at December 31 United States $212,346 $197,546 $196,990 Europe 152,295 153,016 158,835 Other international 14,434 11,836 17,156 -------- -------- -------- $379,075 $362,398 $372,981 ======== ======== ========
Certain overhead costs are allocated to the geographic areas based on the anticipated benefit to be derived by the area. Restructuring and other charges of $30,042 reduced 1993 Operating income of the United States, Europe, Other international and Unallocated items, net by $2,237, $16,921, $1,781 and $9,103, respectively. F-15 Independent Auditors' Report KPMG To the Board of Directors and Shareholders of Tambrands Inc.: We have audited the accompanying consolidated balance sheets of Tambrands Inc. and subsidiaries as of December 31, 1994 and 1993 and the related consolidated statements of earnings, retained earnings and cash flows for each of the years in the three-year period ended December 31, 1994. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tambrands Inc. and subsidiaries as of December 31, 1994 and 1993 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1994, in conformity with generally accepted accounting principles. As discussed in the notes to the consolidated financial statements, the Company changed its method for accounting for postemployment benefits in 1993 and for postretirement benefits in 1992. KPMG PEAT MARWICK LLP Stamford, Connecticut January 24, 1995 F-16 SCHEDULE VIII TAMBRANDS INC. AND SUBSIDIARIES RESERVES YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 ($ in thousands)
1994 1993 1992 ----- ----- ----- Reserve deducted in the balance sheet from the asset to which it applies Allowance for doubtful accounts: Balance at beginning of period $1,453 $1,560 $1,580 Additions charged to cost and expenses 93 556 532 Reclassification of unrecoverable promotional allowance & other 11 (144) (88) Write-off of bad debts (101) (519) (464) ------ ------ ------ Balance at end of period $1,456 $1,453 $1,560 ====== ====== ======
F-17 Independent Auditors' Report ---------------------------- The Board of Directors and Shareholders Tambrands Inc.: Under date of January 24, 1995, we reported on the consolidated balance sheets of Tambrands Inc. and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of earnings, retained earnings and cash flows for each of the years in the three-year period ended December 31, 1994, as contained in the annual report on Form 10-K for the year 1994. Our report refers to a change in accounting for postemployment benefits in 1993 and postretirement benefits in 1992. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedule as listed in Item 14(a)2 of the annual report on Form 10-K for the year 1994. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK LLP Stamford, Connecticut January 24, 1995 F-18 Supplementary Financial Information and Quarterly Data quarterly data (unaudited)
First Second Third Fourth -------------- -------------- -------------- -------------- (in millions, except per share amounts) 1994 1993 1994 1993(a) 1994 1993 1994 1993 ------ ------ ------ ------ ------ ------ ------ ------ Net sales $139.2 $154.3 $165.6 $149.0 $175.3 $161.4 $164.4 $146.7 Gross profit 95.3 105.1 113.0 100.9 117.6 107.5 112.5 96.2 Net earnings before cumulative effect of accounting change 22.0 32.2 20.0 (3.4) 25.0 23.8 22.7 21.1 Per share 0.58 0.82 0.54 (0.09) 0.68 0.62 0.62 0.55 Net earnings 22.0 21.9 20.0 (3.4) 25.0 23.8 22.7 21.1 Per share 0.58 0.56 0.54 (0.09) 0.68 0.62 0.62 0.55
(a) Results include Restructuring and other charges as described in the notes to the consolidated financial statements. F-19 Index to Exhibits ----------------- Exhibit Number Description ------- ----------- 3(4) By-Laws of the Company, as amended. 10(9)(d) Employment Protection Agreement between the Company and Mr. Jerome B. Wainick, dated as of June 18, 1990, and First Amendment to Employment Protection Agreement between the Company and Mr. Jerome B. Wainick, dated as of October 16, 1990. 10(9)(e) Employment Protection Agreement between the Company and Mr. Harry E. Raber, dated as of August 13, 1992. 10(10) Resolution of the Board of Directors of the Company with respect to the compensation of the Chairman of the Board, adopted on October 25, 1994. 10(11) Resolution of the Board of Directors of the Company with respect to the compensation of the Board, adopted on December 13, 1994. 10(14) Annual Incentive Plan of the Company. 10(17) Letter Agreement between the Company and Mr. Thomas Soper, III, dated as of August 29, 1994. 10(18) Letter Agreement between the Company and Mr. Thomas J. Mason, dated as of October 18, 1994. 12 Computation of Ratio of Earnings to Fixed Charges. 21 Subsidiaries of the Company. 23 Independent Auditors' Consent. 24 Powers of attorney. 27 Financial Data Schedule The Company will furnish a copy of any exhibit to a shareholder requesting such exhibit in writing upon payment by the shareholder of a fee representing the Company's reasonable expenses in furnishing such exhibit. EX-3.(4) 2 BY LAWS EXHIBIT 3.(4) BY-LAWS OF TAMBRANDS INC. -------------- as amended through January 31, 1995 ARTICLE I STOCKHOLDERS. ------------ Section 1. The annual meeting of the stockholders of the Corporation shall be held, at such time and at such place within or without the State of Delaware as may be fixed by the Board of Directors from time to time, for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting. Any previously scheduled annual meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given on or prior to the date previously scheduled for such annual meeting of stockholders. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any --- supplement thereto) given by or at the direction of the Board of Directors, (b) --- otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a --- stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 1, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 1. For business to be properly brought before an annual meeting by a stockholder, if such business is related to the election of directors of the Corporation, the procedures in Article II, Section 9 of these By-Laws must be complied with. If such business relates to any other matter, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed to and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description --- of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting, and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (ii) as to the stockholder giving the notice ---- and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. Notwithstanding anything in these By- Laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 1. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 1, and if he should so determine, the Chairman shall declare to the meeting that any such business not properly brought before the meeting shall not be transacted. For purposes of this Section 1 and Article II, Section 9, "public announcement" shall mean disclosure in a press release reported by the -2- Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition to the provisions of this Section 1, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in these By-Laws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. Section 2. Special meetings of the stockholders may be held only upon call of the Board of Directors or of the Executive Committee or of the Chairman of the Board or of the President, at such time and at such place within or without the State of Delaware as may be fixed by the Board of Directors or by the Executive Committee or by the Chairman of the Board or by the President, as the case may be, and as may be stated in the notice setting forth such call. Any previously scheduled special meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given on or prior to the date previously scheduled for such special meeting of stockholders. The purpose or purposes of any special meeting of stockholders shall be set forth in the notice of meeting, and, except as otherwise required by law or by the Certificate of Incorporation, no business shall be transacted at any special meeting of stockholders other than the items of business stated in the notice of meeting. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2, and if he should so determine, the Chairman shall declare to the meeting that any such business not properly brought before the meeting shall not be transacted. -3- Section 3. Notice of the time and place of every meeting of stockholders shall be delivered personally or mailed not less than ten days nor more than 60 days prior to such meeting to each stockholder of record entitled to vote thereat, who shall have furnished a written address to the Secretary of the Corporation for the purpose. Such further notice shall be given as may be required by law. Meetings may be held without notice, if all stockholders entitled to vote are present, or if notice is waived by those not present. Section 4. The holders of record of a majority of the shares of the capital stock of the Corporation, issued and outstanding, and entitled to vote, present in person or by proxy shall, except as otherwise provided by law, constitute a quorum at all meetings of the stockholders. Whether or not a quorum is present at the meeting, the Chairman of the meeting or the holders of a majority of such shares so present or represented may adjourn the meeting from time to time. The stockholders present at any duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of sufficient stockholders to constitute the remaining stockholders less than a quorum. Section 5. Meetings of the stockholders shall be presided over by the Chairman of the Board, or if he is not present, by the President, or if neither of them is present, by a Vice President, or, if neither the Chairman of the Board, the President nor a Vice President is present, by a Chairman to be chosen at the meeting. The Secretary of the Corporation, or in his absence, an Assistant Secretary, shall act as Secretary of the meeting, or, if neither the Secretary nor an Assistant Secretary is present, then the meeting shall choose its Secretary. Section 6. Each stockholder entitled to vote at any meeting shall have one vote in person or by proxy for each share of stock held by him which has voting power upon the matter in question at the time; but no proxy shall be voted on after three years from its date, unless such proxy provides for a longer period. -4- Section 7. Unless otherwise provided by express provision of applicable law, the Certificate of Incorporation or these By-Laws, all matters to be decided at a meeting of stockholders shall be by the vote of a majority of the shares present, either in person or by proxy, that are entitled to vote at such meeting, except that the election of directors shall be by a plurality of votes cast. At all elections of directors by the stockholders the voting shall be by ballot. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the Chairman of such meeting shall appoint one or more inspectors to act at such meeting. No director or candidate for the office of director shall be appointed as such inspector. Each inspector shall first take and subscribe an oath or affirmation faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability, shall make a certificate of the result of the vote taken after the balloting, and shall have such other duties as are prescribed by law. The Chairman of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting. Section 8. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action (other than action by consent, which is the subject of Article I, Section 9 of these By-Laws), the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of any such -5- meeting, nor more than 60 days prior to any other such action. A determination of the stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 9. (a) Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may, subject to the provisions of this Section 9, be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the actions so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. (b) Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation. (c) The record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be fixed by the Board of Directors. Any stockholder seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date. Upon receipt of such a request, the Secretary of the Corporation shall, as promptly as practicable, direct the Chairman or -6- the President to call a special meeting of the Board of Directors to be held as promptly as practicable, but in any event not more than 10 days following the date of receipt of such a request. At such a meeting, the Board of Directors shall fix a record date which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than 10 days after the date that the resolution fixing the record date is adopted by the Board of Directors. Notice of the record date shall be published in accordance with the rules and policies of any stock exchange on which securities of the Corporation are then listed or, if the securities of the Corporation are not listed on a stock exchange, then notice of the record date shall be published in accordance with the rules and policies of the National Association of Securities Dealers Automatic Quotation National Market System. If no record date has been so fixed by the Board of Directors, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, where no prior action by the Board of Directors is required by the Delaware General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation. If no date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. (d) In the event of the delivery to the Corporation of a written consent or consents purporting to represent the requisite voting power to authorize or take corporate action and/or related revocations, the Secretary of the Corporation shall provide for the safekeeping of such consents and revocations and shall, as promptly as practicable, engage inspectors for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. No action by written consent without a meeting -7- shall be effective until such inspectors have completed their review, determined that the requisite number of valid and unrevoked consents has been obtained to authorize or take actions specified in the consents and certified such determination for entry in the records of the Corporation for the purpose of recording the proceedings of meetings of the stockholders. (e) For purposes of this Section 9, delivery to the Corporation shall be effected by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. ARTICLE II DIRECTORS. --------- Section 1. The number of directors shall be fixed by the Board of Directors from time to time by appropriate resolution, provided that the number of directors shall not be less than three. A director shall hold office until his successor is elected and has qualified. A director need not be a stockholder. One-third of the total number of directors shall constitute a quorum for the transaction of business, provided that a quorum shall never be less than two directors. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum shall have been obtained. The Board of Directors may designate the Chairman of the Board as an officer. Section 2. Whenever any vacancy shall have occurred in the Board of Directors by reason of death, resignation, increase in the number of directors, or otherwise, it shall be filled by a majority of the remaining directors, though less than a quorum, and the person so chosen shall hold office for the unexpired term of the director whom he will have succeeded, or in a case of the increase of the number of directors, the person so chosen shall -8- hold office until his successor is elected and has qualified. Section 3. Meetings of the Board of Directors shall be held at such place within or without the State of Delaware as may from time to time be fixed by resolution of the Board, or as may be specified in the notice of any meeting. Regular meetings of the Board of Directors shall be held at such times as may from time to time be fixed by resolution of the Board. Notice need not be given of regular meetings of the Board held at times fixed by resolution of the Board. A meeting of the Board may be held without notice immediately after the annual meeting of stockholders at the same place at which such meeting was held. Special meetings of the Board of Directors may be called at any time by or at the direction of the Board of Directors itself, the Executive Committee, the Chairman of the Board or the President or, in the event of the absence or disability of the Chairman and the President, by or at the direction of the Secretary by oral, telegraphic or written notice to each director, duly served or sent at least 24 hours before such meeting or, if mailed, mailed no later than the fourth calendar day before such meeting. Meetings may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting, in writing. Section 4. The Board of Directors may, in its discretion, by resolution passed by a majority of the whole Board, designate an Executive Committee to consist of the Chairman or the President and such number of other directors (not less than two) as the Board may from time to time determine, which Committee shall have, and may exercise when the Board is not in session, all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it, may declare a dividend or dividends, may authorize the issuance of stock and may adopt a certificate of ownership and merger pursuant to Section 253 (or its successor provision) of the Delaware General Corporation Law; but the power and authority of the Executive Committee shall be subject to the provisions of Section -9- 141(c) (or its successor provision) of the Delaware General Corporation Law and any other applicable statute. The Board may designate one or more directors as alternate members of the Executive Committee, who may replace any absent or disqualified member at any meeting of the Executive Committee. The Board shall have the power at any time to change the membership of the Executive Committee, or to fill vacancies in it, or to dissolve it. The Executive Committee may make such rules for the conduct of its business as it shall from time to time deem necessary or appropriate. A majority of the members of the Executive Committee shall constitute a quorum. Section 5. The Board of Directors may, in its discretion, by resolution passed by a majority of the whole Board, appoint one or more other Committees in addition to the Executive Committee, each consisting of one or more of the directors of the Corporation, which shall have and may exercise such of the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation as shall be conferred by the resolution appointing it, and which, in furtherance thereof, may authorize the seal of the Corporation to be affixed to all papers which may require it; but the power and authority of any such Committee shall be subject to the provisions of Section 141(c) (or its successor provision) of the Delaware General Corporation law and any other applicable statute. The Board may designate one or more directors as alternate members of any such Committee, who may replace any absent or disqualified member at any meeting of such Committee. The Board shall have the power at any time to change the membership of any such Committee, or to fill vacancies in it, or to dissolve it. Any such Committee may make such rules for the conduct of its business as it shall from time to time deem necessary or appropriate. Except as may be otherwise provided by resolution of the Board, a majority of the members of any such Committee, composed of more than two members, shall constitute a quorum. Section 6. Each director who is not also an officer of the Corpo- -10- ration shall receive as compensation for all his or her services as a Director, an annual fee plus an additional fee for attendance at each meeting of the Board of Directors and each meeting of any committee of the Board of which he or she is a member, each such fee to be in such amount as may from time to time be fixed by resolution of the Board. Directors who are also officers shall receive no additional compensation for their services as Directors of the Corporation. Section 7. The Board of Directors may (but need not) elect one of the directors as Chairman of the Board, but a director so elected shall not be an officer or employee of the Corporation, and shall not exercise the functions of an officer, unless expressly so designated as provided in Section 1 of Article III. The Chairman of the Board shall serve until the meeting of the Board next following the ensuing annual meeting of stockholders but may be removed at any time by the affirmative vote of a majority of the members of the Board then in office. Section 8. Each director shall retire from the Board not later than the date of the annual meeting of the stockholders of the Corporation next following his or her 72nd birthday. Section 9. Nomination of Directors. (a) Only persons who are ----------------------- nominated in accordance with the procedures set forth in this Section 9 shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at any annual meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who was a stockholder of record at the time of giving of notice provided for in this Section 9 and who complies with the notice procedures set forth in this Section 9. Any such nomination by a stockholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely notice for an annual meeting, a stockholder's notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not less than 60 days nor -11- more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement (as defined in Article I, Section 1) of the date of such meeting is first made. Notwithstanding anything in the foregoing sentence to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 70 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 9 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. Such stockholder's notice shall set forth in writing (i) as to each person whom the stockholder proposes to nominate for election or re-election as a director (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the number of shares of stock of the Corporation which are beneficially owned by such person, and (D) any other information relating to such person that is required to be disclosed in connection with the solicitation of proxies for election of directors, or as otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including, without limitation, such person's written consent to being named in a proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on -12- whose behalf the nomination is made (A) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (B) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. (b) Nominations of persons for election to the Board of Directors of the Corporation may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such special meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 9, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 9. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. (c) At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 9. The -13- Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these By-Laws and in that event the defective nomination shall be disregarded. In addition to the provisions of this Section 9, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. ARTICLE III OFFICERS. -------- Section 1. The Board of Directors as soon as may be after the election held in each year shall choose a President of the Corporation, one or more Vice Presidents, a Secretary and a Treasurer. One or more of the Vice Presidents may be designated Executive Vice President, and one or more of the Vice Presidents may be designated Senior Vice President. The Board of Directors or the Executive Committee may from time to time appoint such additional Vice Presidents, such Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers and such other officers as it may deem proper and may fill vacancies in any office. The office of Secretary and Treasurer may be held by the same person and a Vice President of the Corporation may be either the Secretary or the Treasurer. The President shall be chosen from the directors. The Board of Directors may at any time choose a Chairman of the Board. Section 2. The term of office of all officers shall be one year, or until their respective successors are chosen, but any officer may be removed from office at any time by the affirmative vote of a majority of the members of the Board then in office. Section 3. The officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors or by the Executive Committee. The Treasurer and the Assistant -14- Treasurers may be required to give bond for the faithful discharge of their duties, in such form and with such surety or sureties as the Board of Directors may from time to time prescribe. ARTICLE IV INDEMNIFICATION. --------------- Section 1. Nature of Indemnity. The Corporation shall indemnify any ------------------- person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, including an employee benefit plan, or by reason of any action alleged to have been taken or omitted in such capacity, and may indemnify any person who was or is a party or is threatened to be made a party to such an action, suit or proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including an employee benefit plan, against expenses (including attorneys' fees), judgments, fines, excise taxes or penalties (including those payable under the Employee Retirement Income Security Act of 1974, as amended) and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, except to the extent prohibited by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), provided, however, that, except as provided -------- ------- in Section 5 of this Article IV, -15- the Corporation shall indemnify any such person seeking indemnification in connection with an action, suit or proceeding (or part thereof) initiated by such person only if such action, suit or proceeding (or part thereof) was authorized by the Board of Directors. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, ---- ---------- shall not, of itself, create a presumption that the person did not act in accordance with any applicable standard of conduct under the Delaware General Corporation Law making it permissible for the Corporation to indemnify the claimant for the amount claimed. Section 2. Successful Defense. To the extent that a director, ------------------ officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 hereof or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Section 3. Determination That Indemnification Is Proper. Any -------------------------------------------- indemnification of a director or officer of the Corporation under Section 1 of this Article IV (unless ordered by a court) shall be made by the Corporation unless a determination is made that indemnification of the director or officer is not proper in the circumstances because he has not met the applicable standard of conduct or because indemnification would otherwise be prohibited under the Delaware General Corporation Law. Any indemnification of an employee or agent of the Corporation under Section 1 of this Article IV (unless ordered by a court) may be made by the Corporation upon a determination that indemnification of the employee or agent is proper in the circumstances because he has met the applicable standard of conduct and indemnification is not otherwise prohibited. Any such determination shall be made (a) if requested by the indemnitee, by Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee, or (b) if no request is made by -16- the indemnitee for a determination by Independent Counsel, (i) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable, or even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the indemnitee, or (iii) by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the indemnitee, Independent Counsel shall be selected by the indemnitee unless the indemnitee shall request that such selection be made by the Board of Directors, in which event Independent Counsel shall be selected by the Board of Directors. If it is so determined that the indemnitee is entitled to indemnification, payment to the indemnitee shall be made within 10 days after such determination. In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that the indemnitee is entitled to indemnification under this Article IV, and the Corporation shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. For purposes of this Section 3, "Disinterested Director" means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the indemnitee, and "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (a) the Corporation or the indemnitee in any matter material to either such party, or (b) any other party to the matter giving rise to a claim for indemnification. Notwithstanding the foregoing, the term "Independent Counsel" 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 Corporation or the indemnitee in an action to determine the indemnitee's rights under this Article IV. Section 4. Advance Payment of Expenses. Expenses (including --------------------------- -17- attorney's fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article IV. Such expenses (including attorney's fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may authorize the Corporation's counsel to represent such director, officer or employee or agent in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding. Section 5. Procedure for Indemnification of Directors and Officers. ------------------------------------------------------- Any indemnification of a director or officer of the Corporation under Sections 1 and 2 of this Article IV, or advance of costs, charges or expenses to a director or officer under Section 4 of this Article IV, shall be made promptly, and in any event within 30 days, upon the written request of the director or officer. If a determination by the Corporation that the director or officer is entitled to indemnification or advances pursuant to this Article IV is required, and the Corporation fails to respond within 30 days to a written request therefor, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnification or advances, in whole or in part, or if payment in full pursuant to such request is not made within 30 days, the right to indemnification or advances as granted by this Article IV shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his right to indemnification or advances, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a -18- defense to any such action (other than an action brought to enforce a claim for advance of costs, charges and expenses under Section 4 of this Article IV where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the applicable standard of conduct or that indemnification is otherwise prohibited under the Delaware General Corporation Law, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including the Board of Directors, Independent Counsel and the Corporation's stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct, nor the fact that there has been an actual determination by the Corporation (including the Board of Directors, Independent Counsel and the Corporation's stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 6. Survival; Preservation of Other Rights. The foregoing -------------------------------------- provisions of this Article shall be deemed to be a contract between the Corporation and each director, officer, employee and agent who serves in such capacity at any time while these provisions and the relevant provisions of the Delaware General Corporation Law are in effect, and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such contract may not be modified retroactively without the consent of such director, officer, employee or agent. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall inure to the benefit of the heirs, executors and administrators of such a person and shall continue as -19- to a person who has ceased to be a director, officer, employee or agent. The Corporation may, upon a vote of a majority of the directors, enter into an indemnity agreement with any director, officer, employee or agent of the Corporation providing for the maximum right to indemnification permissible under the applicable laws of the State of Delaware. Section 7. Insurance. The Corporation shall purchase and maintain --------- insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, including an employee benefit plan, against any liability asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article IV, provided that such insurance is available on -------- acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors. Section 8. Savings Clause. If this Article or any portion hereof -------------- shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the Corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law. Section 9. Amendments. This Article may be amended solely by the ---------- affirmative vote of (i) a majority of the Board of Directors, but only to the extent that such amendment would permit the Corporation to provide broader indemnification rights than were provided hereby immediately prior to such amendment, or (ii) the holders of 75% or more of the outstanding shares of -20- Common Stock of the Corporation. ARTICLE V CERTIFICATES OF STOCK. --------------------- Section 1. The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the Board of Directors may from time to time prescribe. The shares in the stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his attorney, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. Section 2. The certificates of stock shall be signed by the Chairman of the Board or the President or a Vice President and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and may be countersigned and registered in such manner, if any, and sealed as the Board of Directors or the Executive Committee may by resolution prescribe. ARTICLE VI CHECKS, NOTES, ETC. ------------------ All checks and drafts on the Corporation's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, agent or agents as shall be thereunto authorized from time to time by the Board of Directors or the Executive Committee. ARTICLE VII OFFICES. ------- The Corporation and the stockholders and the directors may have -21- offices outside of the State of Delaware at such places as shall be determined from time to time by the Board of Directors or the Executive Committee. ARTICLE VIII AMENDMENTS. ---------- The By-Laws of the Corporation, regardless of whether made by the stockholders or by the Board of Directors, may be amended, added to, rescinded or repealed at any meeting of the Board of Directors or of the stockholders, provided notice of the proposed change is given in the notice of the meeting. -22- EX-10.(9)(D) 3 EMPLOYMENT PROTECTION AGREEMENT EXHIBIT 10.(9)(D) EMPLOYMENT PROTECTION AGREEMENT ------------------------------- THIS AGREEMENT between Tambrands Inc., a Delaware corporation (the "Corporation"), and Jerome B. Wainick (the "Executive"), dated as of this 18th day of June, 1990. W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Corporation and the Executive have previously entered into an agreement providing the Corporation and the Executive with certain rights upon the occurrence of a change of control (the "Prior Agreement") to assure the Corporation of continuity of management in the event of any Change of Control; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is hereby agreed by and between the Corporation and the Executive as follows: 1. Operation of Agreement. The effective date of this Agreement shall ---------------------- be the date on which a Change of Control (as defined below) occurs (the "Effective Date"), provided that if the Executive is not employed by the Corporation on the Effective Date this Agreement shall be void and without effect. This Agreement shall terminate on May 31, 1993, provided that the termination date of this Agreement shall be extended for one additional year on June 1, 1991 and each subsequent June 1, unless the Executive shall have received written notice from the Corporation prior to the March 1 immediately preceding such June 1 that the Board of Directors of the Corporation (the "Board") has determined that the termination date of this Agreement shall not be so extended. Notwithstanding the foregoing, this Agreement shall not terminate on the date determined in accordance with the preceding sentence if a Change of Control shall have occurred prior to such date. 2. Definitions. (a) Change of Control. For purposes of this ----------- ----------------- Agreement, a "Change of Control" shall be deemed to have occurred if: (i) any --- person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"), and as used in Sections 13(d) and 14(d) thereof)), excluding the Corporation, any majority owned subsidiary of the Corporation (a "Subsidiary") and any employee benefit plan sponsored or maintained by the Corporation or any Subsidiary (including any trustee of such plan acting as trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange Act (a "Person"), becomes the beneficial owner of shares of the Corporation having at least 20% of the total number of votes that may be cast for the election of directors of the Corporation (the "Voting Shares") provided, however, that such an event shall not constitute a Change of Control if the acquiring Person has entered into an agreement with the Corporation approved by the Board which materially restricts the right of such Person to direct or influence the management or policies of the Corporation; (ii) the shareholders ---- of the Corporation shall approve any merger or other business combination of the Corporation, sale of the Corporation's assets or combination of the foregoing transactions (a "Transaction") other than a Transaction involving only the Corporation and one or more of its Subsidiaries, or a Transaction immediately following which the shareholders of the Corporation immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity excluding for this purpose any shareholder owning directly or indirectly more than 10% of the shares of the other company involved in the Transaction, or (iii) within any 24-month period beginning on or after May 31, 1990, the persons ----- who were directors of the Corporation immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Corporation, provided that any director who was not a director as of June 1, 1990 shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this Section 2(a)(iii). (b) Participation by Executive. Notwithstanding the foregoing, no -------------------------- Change of Control shall be deemed to have occurred for purposes of this Agreement by reason of any actions or events in which the Executive participates in a capacity other than in his capacity as the Executive (or as a director of the Corporation or a Subsidiary, where applicable). 3. Employment Period. If the Executive is employed on the Effective ----------------- Date, the Corporation agrees to continue the Executive in its employ, and the Executive agrees to remain in the employ of the Corporation, for the period (the "Employment Period") commencing on the Effective Date and ending on the earliest to occur of (i) the second anniversary of the Effective Date, (ii) the --- ---- Executive's normal retirement date under the Corporation's retirement plans as in effect from time to time and (iii) the date of any termination of the ----- Executive's employment in accordance with Section 6 of this Agreement. 4. Position and Duties. (a) No Reduction in Position. During the ------------------- ------------------------ Employment Period, the Executive's position (including titles), authority and responsibilities shall be at least commensurate with the highest of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date. (b) Business Time. From and after the Effective Date, the Executive ------------- agrees to devote his full business time during normal business hours to the business and affairs of the Corporation and to use his best efforts to perform faithfully and efficiently the responsibilities assigned to him hereunder, to the extent necessary to discharge such responsibilities, except for (i) reasonable time spent in serving on corporate, civic or charitable boards or committees approved by the Board, in each case only if and to the extent not substantially interfering with the performance of such responsibilities, and (ii) periods of vacation and sick leave to which he is entitled. It is expressly understood and agreed that the Executive's continuing to serve on any boards and committees on which he is serving or with which he is otherwise associated with the consent or approval of the Corporation immediately preceding the Effective Date shall not be deemed to interfere with the performance of the Executive's services to the Corporation. 5. Compensation. (a) Base Salary. During the Employment Period, the ------------ ----------- Executive shall receive a base salary ("Base Salary") at a monthly rate at least equal to the monthly salary paid to the Executive by the Corporation and any of its affiliated companies immediately prior to the Effective Date. The Base Salary shall be reviewed at least once each year after the Effective Date, and may be increased (but not decreased) at any time and from time to time by action of the Board or any committee thereof or any individual having authority to take such action in accordance with the Corporation's regular practices. Neither payment of the Base Salary nor payment of any increased Base Salary after the Effective - 2 - Date shall serve to limit or reduce any other obligation of the Corporation hereunder. For purposes of the remaining provisions of this Agreement, the term "Base Salary" shall mean Base Salary as defined in this Section 5(a) or, if increased after the Effective Date, the Base Salary as so increased. (b) Annual Bonus. In addition to the Base Salary, the Executive shall ------------ be awarded for each fiscal year of the Corporation ending during the Employment Period an annual bonus (either pursuant to a bonus plan or program of the Corporation or otherwise) in cash at least equal to the last annual bonus (annualized, if awarded in respect of a partial year) awarded to the Executive under the Annual Incentive Plan of the Corporation prior to the Effective Date ("Annual Bonus"). If a fiscal year of the Corporation begins, but does not end, during the Employment Period, the Executive shall receive an amount with respect to such fiscal year at least equal to the amount of the Annual Bonus multiplied by a fraction, the numerator of which is the number of days in such fiscal year occurring during the Employment Period and the denominator of which is 365. Each amount payable in respect of the Executive's Annual Bonus shall be paid not later than the last day of March of the year next following the year for which the Annual Bonus (or pro-rated portion) is earned or awarded, unless electively deferred by the Executive pursuant to any deferral programs or arrangements that the Corporation may make available to the Executive, in which event such deferred amount shall be payable in accordance with the terms of such deferral program or arrangement. Neither the Annual Bonus nor any bonus amount paid in excess thereof after the Effective Date shall serve to limit or reduce any other obligation of the Corporation hereunder. (c) Incentive and Savings Plans and Retirement Programs. In addition --------------------------------------------------- to the Base Salary and Annual Bonus payable as hereinabove provided, during the Employment Period, the Executive shall be entitled to participate in all incentive and savings plans and programs, including stock option plans and other equity based compensation plans, and in all retirement plans, on a basis providing him with the opportunity to receive compensation (without duplication of the amount payable as an Annual Bonus) and benefits equal to those provided by the Corporation to the Executive on an annualized basis under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date. (d) Benefit Plans. During the Employment Period, the Executive and his ------------- family shall be entitled to participate in or be covered under all welfare benefit plans and programs of the Corporation and its affiliated companies, including all medical, dental, disability, group life, accidental death and travel accident insurance plans and programs, as in effect at any time during the 90-day period immediately preceding the Effective Date. (e) Expenses. During the Employment Period, the Executive shall be -------- entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the policies and procedures of the Corporation as in effect at any time during the 90-day period immediately preceding the Effective Date. (f) Vacation and Fringe Benefits. During the Employment Period, the ---------------------------- Executive shall be entitled to paid vacation and fringe benefits in accordance with the policies of the Corporation as in effect at any time during the 90-day period immediately preceding the Effective Date. (g) Office and Support Staff. During the Employment Period, the ------------------------ Executive shall be entitled to an office or offices of a size and with - 3 - furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive at any time during the 90-day period immediately preceding the Effective Date. 6. Termination. (a) Death, Disability or Retirement. Subject to the ----------- ------------------------------- provisions of Section 1 hereof, this Agreement shall terminate automatically upon the Executive's death or attainment of normal retirement age under the Corporation's retirement plans as in effect from time to time, provided that, after the Effective Date, the normal retirement age may not be lowered for purposes of this Agreement without the Executive's consent. The Corporation may terminate this Agreement, after having established the Executive's Disability, by giving the Executive written notice of its intention to terminate his employment, and his employment with the Corporation shall terminate effective on the 90th day after receipt of such notice if, within 90 days after such receipt, the Executive shall fail to return to full-time performance of his duties. For purposes of this Agreement, "Disability" means disability which, after the expiration of more than 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its insurers and acceptable to the Executive or his legal representatives (such agreement to acceptability not to be withheld unreasonably). (b) Voluntary Termination. Notwithstanding anything in this Agreement --------------------- to the contrary, the Executive may, upon not less than 30 days' written notice to the Corporation, voluntarily terminate employment during the Employment Period for any reason (including early retirement under the terms of the Corporation's retirement plan as in effect from time to time), provided that any termination by the Executive pursuant to Section 6(d) of this Agreement on account of Good Reason (as defined therein) shall not be treated as a voluntary termination under this Section 6(b). (c) Cause. The Corporation may terminate the Executive's employment ----- during the Employment Period for Cause. For purposes of this Agreement, "Cause" means (i) an act or acts of dishonesty or gross misconduct on the Executive's --- part which result or are intended to result in material damage to the Corporation's business or reputation or (ii) repeated material violations by the ---- Executive of his obligations under Section 4 of this Agreement which violations are demonstrably willful and deliberate on the Executive's part. (d) Good Reason. The Executive may terminate his employment during the ----------- Employment Period for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a good faith determination by the Executive that, without his prior written consent, the Corporation or any of its officers has taken or failed to take any action (including, without limitation, (A) exclusion of the --- Executive from consideration of material matters within his area of responsibility, (B) statements or actions which undermine the Executive's --- authority with respect to persons under his supervision or reduce his standing with his peers, (C) a pattern of discrimination against or --- harassment of the Executive or persons under his supervision and (D) the --- subjection of the Executive to procedures not generally applicable to other similarly situated executives) which changes the Executive's position (including titles), authority or responsibilities under Section 4 of this Agreement or reduces the Executive's ability to carry out his duties and responsibilities under Section 4 of this Agreement; (ii) any failure by the Corporation to comply with any of the provisions of Section 5 of this Agreement, other than an insubstantial or inadvertent failure remedied by the Corporation promptly - 4 - after receipt of notice thereof from the Executive; (iii) the Corporation's requiring the Executive to be employed at any location more than 50 miles further from his principal residence than the location at which the Executive was employed immediately preceding the Effective Date; or (iv) any failure by the Corporation to obtain the assumption of and agreement to perform this Agreement by a successor as contemplated by Section 14(b) of this Agreement, provided that the successor has had actual written notice of the existence of this Agreement and its terms and an opportunity to assume the Corporation's responsibilities under this Agreement during a period of 10 business days after receipt of such notice. (e) Notice of Termination. Any termination by the Corporation for --------------------- Cause or by the Executive for Good Reason during the Employment Period shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(c) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice given, in the case of a termination for Cause, within 10 business days of the Corporation's having actual knowledge of all of the events giving rise to such termination, and in the case of a termination for Good Reason, within 180 days of the Executive's having actual knowledge of the events giving rise to such termination, and which (i) indicates the specific termination provision in this Agreement relied upon, --- (ii) sets forth in reasonable detail the facts and circumstances claimed to ---- provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the termination date is other than the date ----- of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing his rights hereunder. (f) Date of Termination. For purposes of this Agreement, the term ------------------- "Date of Termination" means (i) in the case of a termination for which a Notice --- of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein and (ii) in all other cases, the actual date on which the Executive's employment terminates during the Employment Period. 7. Obligations of the Corporation upon Termination. (a) Death. If ----------------------------------------------- ------ the Executive's employment is terminated during the Employment Period by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement other than those obligations accrued hereunder at the date of his death, including, for this purpose (i) the Executive's full Base Salary through the Date of --- Termination, (ii) the product of the Annual Bonus and a fraction, the numerator ---- of which is the number of days in the current fiscal year of the Corporation through the Date of Termination, and the denominator of which is 365 (the "Pro- rated Bonus Obligation"), (iii) any compensation previously deferred by the ----- Executive (together with any accrued earnings thereon) and not yet paid by the Corporation and (iv) any other amounts or benefits owing to the Executive under ---- the then applicable employee benefit plans or policies of the Corporation (such amounts specified in clauses (i), (ii), (iii) and (iv) are hereinafter referred to as "Accrued Obligations"). Unless otherwise directed by the Executive (or, in the case of any employee benefit plan qualified (a "Qualified Plan") under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as may be required by such plan), all such Accrued Obligations shall be paid to the Executive's legal representatives - 5 - in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable level of benefits available to surviving families of executives of the Corporation and its affiliates under such plans, programs and policies relating to family death benefits, if any, of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date. (b) Disability. If the Executive's employment is terminated by reason ---------- of the Executive's Disability, the Executive shall be entitled, after the Date of Termination until the date when the Employment Period would otherwise have terminated, to continue to participate in or be covered under the benefit plans and programs referred to in Section 5(d) of this Agreement or, at the Corporation's option, to receive equivalent benefits by alternate means at least equal to those provided in accordance with Section 5(d) of this Agreement. Unless otherwise directed by the Executive (or, in the case of any Qualified Plan, as may be required by such plan), the Executive shall also be paid all Accrued Obligations in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled to receive disability and other benefits at least equal to the most favorable level of benefits available to disabled employees and/or their families in accordance with the plans, programs and policies maintained by the Corporation or its affiliates relating to disability at any time during the 90-day period immediately preceding the Effective Date. (c) Cause and Voluntary Termination. If, during the Employment Period, ------------------------------- the Executive's employment shall be terminated for Cause or voluntarily terminated by the Executive (other than on account of Good Reason), the Corporation shall pay the Executive the Accrued Obligations other than the Pro- rated Bonus Obligation. Unless otherwise directed by the Executive (or, in the case of any Qualified Plan, as may be required by such plan), the Executive shall be paid all such Accrued Obligations in a lump sum in cash within 30 days of the Date of Termination and the Corporation shall have no further obligations to the Executive under this Agreement. (d) Termination by Corporation other than for Cause or Disability and ----------------------------------------------------------------- Termination by Executive for Good Reason. (i) Lump Sum Payment. If, during ---------------------------------------- ---------------- the Employment Period, the Corporation terminates the Executive's employment other than for Cause or Disability, or the Executive terminates his employment for Good Reason, the Corporation shall pay to the Executive in a lump sum in cash within 15 days after the Date of Termination the aggregate of the following amounts: (A) if not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate specified in Section 5(a) of this Agreement; (B) a cash amount equal to two times the sum of (1) the Executive's annual Base Salary at the rate specified in Section 5(a) of this Agreement; (2) the Annual Bonus; and (3) the present value, calculated using the annual federal short- term rate as determined under Section 1274(d) of the Code, of (without duplication) (x) the annual cost to the Corporation (based on the --- premium rates or other costs to it) of obtaining coverage equivalent to the coverage under the plans and programs described in Section 5(d) of this Agreement, and (y) the annual- --- - 6 - ized value of the fringe benefits described under Section 5(f) of this Agreement; provided, however, that in no event shall the Executive be entitled to receive under this clause (B) more than the product obtained by multiplying the amount determined under this clause by a fraction whose numerator shall be the number of months (including fractions of a month) which at the Date of Termination remain until the Executive's normal retirement date under the Corporation's retirement plan or any successor plan as in effect from time to time and whose denominator shall be 24, and provided further that, with respect to the life and medical insurance coverage referred to in Section 5(d) of this Agreement, at the Executive's election made prior to the Date of Termination, the Corporation shall use its best efforts to secure conversion coverage and shall pay the cost of such coverage in lieu of paying the lump sum amount attributable to such life or medical insurance coverage; and (C) a cash amount equal to any amounts (other than amounts payable to the Executive under any Qualified Plans) described in Sections 7(a)(iii) and (iv) of this Agreement. (ii) Discharge of Corporation's Obligations. Subject to the performance -------------------------------------- of its obligations under this Section 7(d), the Corporation shall have no further obligations to the Executive in respect of any termination by the Executive for Good Reason or by the Corporation other than for Cause or Disability, except to the extent expressly provided under any of the plans referred to in Section 5(c) or 5(d) of this Agreement. 8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent ------------------------- or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise prejudice such rights as the Executive may have under any stock option or other plans or agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program. 9. Certain Reduction of Payments by the Corporation. (a) For purposes ------------------------------------------------ of this Section 9, (i) "Payment" shall mean any payment or distribution in the - nature of compensation to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise; (ii) "Agreement Payment" shall -- mean a Payment paid or payable pursuant to this Agreement (disregarding this Section 9); (iii) "Net After Tax Receipts" shall mean the Present Value of a --- Payment net of all applicable Federal, State and local income and excise taxes (the "Taxes") imposed on the Executive with respect thereto (calculated in the manner described in Section 7(d)(ii) of this Agreement); (iv) "Present Value" -- shall mean the present value of a Payment or an Agreement Payment determined in accordance with Section 280G(d)(4) of the Code; and (v) "Reduced Amount" shall - mean the aggregate amount of Payments which (a) is less than the sum of all - Payments and (b) results in the greatest aggregate Net After Tax Receipts. (b) Anything in this Agreement to the contrary notwithstanding, in the event the Corporation's independent public accounting firm (the "Accounting Firm") shall determine that receipt of all Payments would subject the Executive to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a - 7 - Reduced Amount. If the Accounting Firm determines that there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such Reduced Amount; provided, however, that if the Reduced Amount exceeds the aggregate Agreement Payments, the aggregate Payments shall, after the reduction of all Agreement Payments, be reduced (but not below zero) in the amount of such excess. (c) If the Accounting Firm determines that aggregate Agreement Payments or Payments, as the case may be, should be reduced to the Reduced Amount, the Corporation shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof, and the Executive may then elect, in his sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the present value of the aggregate Payments equals the Reduced Amount), and shall advise the Corporation in writing of his election within ten days of his receipt of notice. If no such election is made by the Executive within such ten-day period, the Corporation may elect which of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced (as long as after such election the present value of the aggregate Agreement Payments or Payments, as the case may be, equals the Reduced Amount) and shall notify the Executive promptly of such election. All determinations made by the Accounting Firm under this Section 9 shall be binding upon the Corporation and the Executive and shall be made within 60 days of a termination of employment of the Executive. As promptly as practicable following such determination, the Corporation shall pay to or distribute for the benefit of the Executive such Payments as are then due to the Executive under this Agreement and shall promptly pay to or distribute for the benefit of the Executive in the future such Payments as become due to the Executive under this Agreement. (d) While it is the intention of the Corporation and the Executive to reduce the amounts payable or distributable to the Executive hereunder only if the aggregate Net After Tax Receipts to the Executive would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Corporation to or for the benefit of the Executive pursuant to this Agreement which should not have been so paid or distributed ("Overpayment") or that additional amounts which will not have been paid or distributed by the Corporation to or for the benefit of the Executive pursuant to this Agreement should have been so paid or distributed ("Underpayment"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Accounting Firm, based either upon the assertion of a deficiency by the Internal Revenue Service against the Corporation or the Executive which the Accounting Firm believes has a high probability of success or controlling precedent or other substantial authority, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Corporation to or for the benefit of the Executive shall be treated for all purposes as a loan ab -- initio to the Executive which the Executive shall repay to the Corporation ------ together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by the Executive to the Corporation if and to the extent such deemed loan and payment would not either reduce the Executive's Taxes or generate a refund of such Taxes. In the event that the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Corporation to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2)of the Code. 10. Full Settlement. The Corporation's obligation to make the --------------- - 8 - payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against the Executive or others whether by reason of the subsequent employment of the Executive or otherwise. In no event shall the Executive be obligated to seek other employment by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and no amount payable under this Agreement shall be reduced on account of any compensation received by the Executive from other employment. In the event that the Executive shall in good faith give a Notice of Termination for Good Reason and it shall thereafter be determined by mutual consent of the Executive and the Corporation or by a tribunal having jurisdiction over the matter that Good Reason did not exist, the employment of the Executive shall, unless the Corporation and the Executive shall otherwise mutually agree, be deemed to have terminated, at the date of giving such purported Notice of Termination, by mutual consent of the Corporation and the Executive and, except as provided in the last preceding sentence, the Executive shall be entitled to receive only those payments and benefits which he would have been entitled to receive at such date otherwise than under this Agreement. 11. Legal Fees and Expenses. In the event that a claim for payment of ----------------------- benefits under this Agreement is disputed, the Corporation shall pay all reasonable legal fees and expenses incurred by the Executive in pursuing such claim, provided that the Executive is successful as to at least part of the disputed claim by reason of litigation, arbitration or settlement. 12. Confidential Information. The Executive shall hold in a fiduciary ------------------------ capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their respective businesses, (i) obtained by the --- Executive during his employment by the Corporation or any of its affiliated companies and (ii) not otherwise public knowledge (other than by reason of an ---- unauthorized act by the Executive). After termination of the Executive's employment with the Corporation, the Executive shall not, without the prior written consent of the Corporation, unless compelled pursuant to an order of a court or other body having jurisdiction over such matter, communicate or divulge any such information, knowledge or data to anyone other than the Corporation and those designated by it. In no event shall an asserted violation of the provisions of this Section 12 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 13. Employment Contract or Severance Benefits. Notwithstanding ----------------------------------------- anything else in this Agreement to the contrary, any amount payable to the Executive hereunder on account of his termination of employment shall be reduced on a dollar for dollar basis by each dollar actually paid to the Executive with respect to such termination under the terms of any employment contract between the Executive and the Corporation or under any severance program or policy applicable to the Executive. Nothing in this Agreement shall be construed to require duplication of any compensation, benefits or other entitlements provided to the Executive by the Corporation under the terms of any employment contract which may address similar matters. 14. Successors. (a) This Agreement is personal to the Executive and, ---------- without the prior written consent of the Corporation, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding - 9 - upon the Corporation and its successors. The Corporation shall require any successor to all or substantially all of the business and/or assets of the Corporation, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Corporation would be required to perform if no such succession had taken place. 15. Miscellaneous. (a) Applicable Law. This Agreement shall be ------------- -------------- governed by and construed in accordance with the laws of the State of Delaware, applied without reference to principles of conflict of laws. (b) Amendments. This Agreement may not be amended or modified ---------- otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (c) Notices. All notices and other communications hereunder shall be ------- in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: at the address listed below If to the Corporation: Tambrands Inc. One Marcus Avenue Lake Success, New York 11042 Attention: Secretary (with a copy to the attention of the General Counsel) or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee. (d) Tax Withholding. The Corporation may withhold from any amounts --------------- payable under this Agreement such Federal, State or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) Severability. The invalidity or unenforceability of any provision ------------ of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (f) Captions. The captions of this Agreement are not part of the -------- provisions hereof and shall have no force or effect. IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Corporation has caused this Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed and attested by its Assistant Secretary, all as of the day and year first above written. - 10 - ATTEST: TAMBRANDS INC. /s/Marilyn K. Jones By /s/Paul E. Konney ------------------------- -------------------------------- Assistant Secretary Title: Senior Vice President- General Counsel and Secretary (Seal) EXECUTIVE: JEROME B. WAINICK /s/Jerome B. Wainick ---------------------------------- Address: Tambrands Inc. One Marcus Avenue Lake Success, New York 11042 - 11 - EXHIBIT 10.9(D)1 FIRST AMENDMENT --------------- This FIRST AMENDMENT, dated as of October 16, 1990, to the Employment Protection Agreement, dated as of June 18, 1990 (the "Employment Protection Agreement"), by and between Jerome B. Wainick (the "Executive") and Tambrands Inc., a Delaware corporation (the "Corporation"), witnesseth: WHEREAS, the Corporation and the Executive entered into the Employment Protection Agreement to assure the Corporation of continuity of management in the event of any change of control; WHEREAS, the Board of Directors of the Corporation has authorized an amendment to the Employment Protection Agreement that it has determined to be in the best interests of the Corporation and its stockholders; and WHEREAS, the Executive has agreed to such amendment; NOW THEREFORE, in consideration of the premises, it is hereby agreed by and between the Corporation and the Executive as follows: 1. Section 9 of the Employment Protection Agreement is hereby amended and restated as follows: 9. Certain Additional Payments by the Corporation. ---------------------------------------------- (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Corporation to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes with respect to the Gross-Up Payment (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick or other firm then auditing the accounts of the Corporation (the "Accounting Firm") which shall provide detailed supporting calculations both to the Corporation and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Corporation. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, or is unwilling or unable to perform its obligations pursuant to this Section 9, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Corporation. Any Gross-Up Payment, determined pursuant to this Section 9, shall be paid by the Corporation to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Corporation and the Executive. As a result of the potential uncertainty in the application of Section 4999 of the Code (or any successor provision) at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Corporation should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Corporation exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Corporation to or for the benefit of the Executive. (c) The Executive shall notify the Corporation in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Corporation of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive is informed in writing of such claim and shall apprise the Corporation of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which he gives such notice to the Corporation (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Corporation notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Corporation any information reasonably requested by the Corporation relating to such claim, (ii) take such action in connection with contesting such claim as the Corporation shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Corporation, (iii) cooperate with the Corporation in good faith in order effectively to contest such claim, and (iv) permit the Corporation to participate in any proceedings relating to such claim; provided, however, that the Corporation shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or 2 income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 9(c), the Corporation shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Corporation shall determine; provided, however, that if the Corporation directs the Executive to pay such claim and sue for a refund, the Corporation shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Corporation's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Corporation's complying with the requirements of Section 9(c)) promptly pay to the Corporation the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Corporation does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 2. This First Amendment may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 3. Except as expressly set forth herein, this First Amendment shall not modify or amend any of the provisions contained in the Employment Protection Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. 3 IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Corporation has caused this First Amendment to be executed in its name on its behalf, and its corporate seal to be hereunto affixed and attested, all as of the day and year first above written. ATTEST: TAMBRANDS INC. /s/ Jonathan W. Emery By /s/Paul E. Konney ----------------------- ------------------------------ Title: Senior Vice President - General Counsel and Secretary EXECUTIVE (Seal) /s/ Jerome B. Wainick -------------------------------- Name: Jerome B. Wainick 4 EX-10.(9)(E) 4 EMPLOYMENT PROTECTION AGREEMENT EXHIBIT 10.(9)(E) EMPLOYMENT PROTECTION AGREEMENT ------------------------------- THIS AGREEMENT between Tambrands Inc., a Delaware corporation (the "Corporation"), and Harry E. Raber (the "Executive"), dated as of this 13th day of August, 1992. W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Corporation and the Executive have agreed to enter into an agreement providing the Corporation and the Executive with certain rights upon the occurrence of a change of control (as defined below) to assure the Corporation of continuity of management in the event of any change of control; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is hereby agreed by and between the Corporation and the Executive as follows: 1. Operation of Agreement. The effective date of this Agreement shall ---------------------- be the date on which a Change of Control occurs (the "Effective Date"), provided that if the Executive is not employed by the Corporation on the Effective Date this Agreement shall be void and without effect. This Agreement shall terminate on July 31, 1995, provided that the termination date of this Agreement shall be extended for one additional year on August 1, 1993 and each subsequent August 1, unless the Executive shall have received written notice from the Corporation prior to the May 1 immediately preceding such August 1 that the Board of Directors of the Corporation (the "Board") has determined that the termination date of this Agreement shall not be so extended. Notwithstanding the foregoing, this Agreement shall not terminate on the date determined in accordance with the preceding sentence if a Change of Control shall have occurred prior to such date. 2. Definitions. (a) Change of Control. For purposes of this ----------- ----------------- Agreement, a "Change of Control" shall be deemed to have occurred if: (i) any --- person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time (the "Exchange Act"), and as used in Sections 13(d) and 14(d) thereof)), excluding the Corporation, any majority owned subsidiary of the Corporation (a "Subsidiary") and any employee benefit plan sponsored or maintained by the Corporation or any Subsidiary (including any trustee of such plan acting as trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange Act (a "Person"), becomes the beneficial owner of shares of the Corporation having at least 20% of the total number of votes that may be cast for the election of directors of the Corporation (the "Voting Shares") provided, however, that such an event shall not constitute a Change of Control if the acquiring Person has entered into an agreement with the Corporation approved by the Board which materially restricts the right of such Person to direct or influence the management or policies of the Corporation; (ii) the shareholders ---- of the Corporation shall approve any merger or other business combination of the Corporation, sale of the Corporation's assets or combination of the foregoing transactions (a "Transaction") other than a Transaction involving only the Corporation and one or more of its Subsidiaries, or a Transaction immediately following which the shareholders of the Corporation immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity excluding for this purpose any shareholder owning directly or indirectly more than 10% of the shares of the other company involved in the Transaction, or (iii) within any 24-month period beginning on or after July 31, 1992, the ----- persons who were directors of the Corporation immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Corporation, provided that any director who was not a director as of August 1, 1992 shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this Section 2(a)(iii). (b) Participation by Executive. Notwithstanding the foregoing, no -------------------------- Change of Control shall be deemed to have occurred for purposes of this Agreement by reason of any actions or events in which the Executive participates in a capacity other than in his capacity as the Executive (or as a director of the Corporation or a Subsidiary, where applicable). 3. Employment Period. If the Executive is employed on the Effective ----------------- Date, the Corporation agrees to continue the Executive in its employ, and the Executive agrees to remain in the employ of the Corporation, for the period (the "Employment Period") commencing on the Effective Date and ending on the earliest to occur of (i) the second anniversary of the Effective Date, (ii) the --- ---- Executive's normal retirement date under the Corporation's retirement plans as in effect from time to time and (iii) the date of any termination of the ----- Executive's employment in accordance with Section 6 of this Agreement. 4. Position and Duties. (a) No Reduction in Position. During the ------------------- ------------------------ Employment Period, the Executive's position (including titles), authority and responsibilities shall be at least commensurate with the highest of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date. (b) Business Time. From and after the Effective Date, the Executive ------------- agrees to devote his full business time during normal business hours to the business and affairs of the Corporation and to use his best efforts to perform faithfully and efficiently the responsibilities assigned to him hereunder, to the extent necessary to discharge such responsibilities, except for (i) reasonable time spent in serving on corporate, civic or charitable boards or committees approved by the Board, in each case only if and to the extent not substantially interfering with the performance of such responsibilities, and (ii) periods of vacation and sick leave to which he is entitled. It is expressly understood and agreed that the Executive's continuing to serve on any boards and committees on which he is serving or with which he is otherwise associated with the consent or approval of the Corporation immediately preceding the Effective Date shall not be deemed to interfere with the performance of the Executive's services to the Corporation. 5. Compensation. (a) Base Salary. During the Employment Period, the ------------ ----------- Executive shall receive a base salary ("Base Salary") at a monthly rate at least equal to the monthly salary paid to the Executive by the Corporation and any of its affiliated companies immediately prior to the Effective Date. The Base Salary shall be reviewed at least once each year after the Effective Date, and may be increased (but not decreased) at any time and from time to time by action of the Board or any committee thereof or any individual having authority to take such action in accordance with the Corporation's regular practices. Neither payment of the Base Salary nor payment of any increased Base Salary after the Effective - 2 - Date shall serve to limit or reduce any other obligation of the Corporation hereunder. For purposes of the remaining provisions of this Agreement, the term "Base Salary" shall mean Base Salary as defined in this Section 5(a) or, if increased after the Effective Date, the Base Salary as so increased. (b) Annual Bonus. In addition to the Base Salary, the Executive shall ------------ be awarded for each fiscal year of the Corporation ending during the Employment Period an annual bonus (either pursuant to a bonus plan or program of the Corporation or otherwise) in cash at least equal to the last annual bonus (annualized, if awarded in respect of a partial year) awarded to the Executive under the Annual Incentive Plan of the Corporation prior to the Effective Date ("Annual Bonus"). If a fiscal year of the Corporation begins, but does not end, during the Employment Period, the Executive shall receive an amount with respect to such fiscal year at least equal to the amount of the Annual Bonus multiplied by a fraction, the numerator of which is the number of days in such fiscal year occurring during the Employment Period and the denominator of which is 365. Each amount payable in respect of the Executive's Annual Bonus shall be paid not later than the last day of March of the year next following the year for which the Annual Bonus (or pro-rated portion) is earned or awarded, unless electively deferred by the Executive pursuant to any deferral programs or arrangements that the Corporation may make available to the Executive, in which event such deferred amount shall be payable in accordance with the terms of such deferral program or arrangement. Neither the Annual Bonus nor any bonus amount paid in excess thereof after the Effective Date shall serve to limit or reduce any other obligation of the Corporation hereunder. (c) Incentive and Savings Plans and Retirement Programs. In addition --------------------------------------------------- to the Base Salary and Annual Bonus payable as hereinabove provided, during the Employment Period, the Executive shall be entitled to participate in all incentive and savings plans and programs, including stock option plans and other equity based compensation plans, and in all retirement plans, on a basis providing him with the opportunity to receive compensation (without duplication of the amount payable as an Annual Bonus) and benefits equal to those provided by the Corporation to the Executive on an annualized basis under such plans and programs as in effect at any time during the 90-day period immediately preceding the Effective Date. (d) Benefit Plans. During the Employment Period, the Executive and his ------------- family shall be entitled to participate in or be covered under all welfare benefit plans and programs of the Corporation and its affiliated companies, including all medical, dental, disability, group life, accidental death and travel accident insurance plans and programs, as in effect at any time during the 90-day period immediately preceding the Effective Date. (e) Expenses. During the Employment Period, the Executive shall be -------- entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the policies and procedures of the Corporation as in effect at any time during the 90-day period immediately preceding the Effective Date. (f) Vacation and Fringe Benefits. During the Employment Period, the ---------------------------- Executive shall be entitled to paid vacation and fringe benefits in accordance with the policies of the Corporation as in effect at any time during the 90-day period immediately preceding the Effective Date. (g) Office and Support Staff. During the Employment Period, the ------------------------ Executive shall be entitled to an office or offices of a size and with - 3 - furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive at any time during the 90-day period immediately preceding the Effective Date. 6. Termination. (a) Death, Disability or Retirement. Subject to the ----------- ------------------------------- provisions of Section 1 hereof, this Agreement shall terminate automatically upon the Executive's death or attainment of normal retirement age under the Corporation's retirement plans as in effect from time to time, provided that, after the Effective Date, the normal retirement age may not be lowered for purposes of this Agreement without the Executive's consent. The Corporation may terminate this Agreement, after having established the Executive's Disability, by giving the Executive written notice of its intention to terminate his employment, and his employment with the Corporation shall terminate effective on the 90th day after receipt of such notice if, within 90 days after such receipt, the Executive shall fail to return to full-time performance of his duties. For purposes of this Agreement, "Disability" means disability which, after the expiration of more than 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Corporation or its insurers and acceptable to the Executive or his legal representatives (such agreement to acceptability not to be withheld unreasonably). (b) Voluntary Termination. Notwithstanding anything in this Agreement --------------------- to the contrary, the Executive may, upon not less than 30 days' written notice to the Corporation, voluntarily terminate employment during the Employment Period for any reason (including early retirement under the terms of the Corporation's retirement plan as in effect from time to time), provided that any termination by the Executive pursuant to Section 6(d) of this Agreement on account of Good Reason (as defined therein) shall not be treated as a voluntary termination under this Section 6(b). (c) Cause. The Corporation may terminate the Executive's employment ----- during the Employment Period for Cause. For purposes of this Agreement, "Cause" means (i) an act or acts of dishonesty or gross misconduct on the Executive's --- part which result or are intended to result in material damage to the Corporation's business or reputation or (ii) repeated material violations by the ---- Executive of his obligations under Section 4 of this Agreement which violations are demonstrably willful and deliberate on the Executive's part. (d) Good Reason. The Executive may terminate his employment during the ----------- Employment Period for Good Reason. For purposes of this Agreement, "Good Reason" means (i) a good faith determination by the Executive that, without his prior written consent, the Corporation or any of its officers has taken or failed to take any action (including, without limitation, (A) exclusion of the --- Executive from consideration of material matters within his area of responsibility, (B) statements or actions which undermine the Executive's --- authority with respect to persons under his supervision or reduce his standing with his peers, (C) a pattern of discrimination against or --- harassment of the Executive or persons under his supervision and (D) the --- subjection of the Executive to procedures not generally applicable to other similarly situated executives) which changes the Executive's position (including titles), authority or responsibilities under Section 4 of this Agreement or reduces the Executive's ability to carry out his duties and responsibilities under Section 4 of this Agreement; (ii) any failure by the Corporation to comply with any of the provisions of Section 5 of this Agreement, other than an insubstantial or inadvertent failure remedied by the Corporation promptly - 4 - after receipt of notice thereof from the Executive; (iii) the Corporation's requiring the Executive to be employed at any location more than 50 miles further from his principal residence than the location at which the Executive was employed immediately preceding the Effective Date; or (iv) any failure by the Corporation to obtain the assumption of and agreement to perform this Agreement by a successor as contemplated by Section 14(b) of this Agreement, provided that the successor has had actual written notice of the existence of this Agreement and its terms and an opportunity to assume the Corporation's responsibilities under this Agreement during a period of 10 business days after receipt of such notice. (e) Notice of Termination. Any termination by the Corporation for --------------------- Cause or by the Executive for Good Reason during the Employment Period shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 15(c) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice given, in the case of a termination for Cause, within 10 business days of the Corporation's having actual knowledge of all of the events giving rise to such termination, and in the case of a termination for Good Reason, within 180 days of the Executive's having actual knowledge of the events giving rise to such termination, and which (i) indicates the specific termination provision in this Agreement relied upon, --- (ii) sets forth in reasonable detail the facts and circumstances claimed to ---- provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the termination date is other than the date ----- of receipt of such notice, specifies the termination date of this Agreement (which date shall be not more than 15 days after the giving of such notice). The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing his rights hereunder. (f) Date of Termination. For purposes of this Agreement, the term ------------------- "Date of Termination" means (i) in the case of a termination for which a Notice --- of Termination is required, the date of receipt of such Notice of Termination or, if later, the date specified therein and (ii) in all other cases, the actual date on which the Executive's employment terminates during the Employment Period. 7. Obligations of the Corporation upon Termination. (a) Death. If ----------------------------------------------- ------ the Executive's employment is terminated during the Employment Period by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement other than those obligations accrued hereunder at the date of his death, including, for this purpose (i) the Executive's full Base Salary through the Date of --- Termination, (ii) the product of the Annual Bonus and a fraction, the numerator ---- of which is the number of days in the current fiscal year of the Corporation through the Date of Termination, and the denominator of which is 365 (the "Pro- rated Bonus Obligation"), (iii) any compensation previously deferred by the ----- Executive (together with any accrued earnings thereon) and not yet paid by the Corporation and (iv) any other amounts or benefits owing to the Executive under ---- the then applicable employee benefit plans or policies of the Corporation (such amounts specified in clauses (i), (ii), (iii) and (iv) are hereinafter referred to as "Accrued Obligations"). Unless otherwise directed by the Executive (or, in the case of any employee benefit plan qualified (a "Qualified Plan") under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as may be required by such plan), all such Accrued Obligations shall be paid to the Executive's legal representatives - 5 - in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable level of benefits available to surviving families of executives of the Corporation and its affiliates under such plans, programs and policies relating to family death benefits, if any, of the Corporation and its affiliates in effect at any time during the 90-day period immediately preceding the Effective Date. (b) Disability. If the Executive's employment is terminated by reason ---------- of the Executive's Disability, the Executive shall be entitled, after the Date of Termination until the date when the Employment Period would otherwise have terminated, to continue to participate in or be covered under the benefit plans and programs referred to in Section 5(d) of this Agreement or, at the Corporation's option, to receive equivalent benefits by alternate means at least equal to those provided in accordance with Section 5(d) of this Agreement. Unless otherwise directed by the Executive (or, in the case of any Qualified Plan, as may be required by such plan), the Executive shall also be paid all Accrued Obligations in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled to receive disability and other benefits at least equal to the most favorable level of benefits available to disabled employees and/or their families in accordance with the plans, programs and policies maintained by the Corporation or its affiliates relating to disability at any time during the 90-day period immediately preceding the Effective Date. (c) Cause and Voluntary Termination. If, during the Employment Period, ------------------------------- the Executive's employment shall be terminated for Cause or voluntarily terminated by the Executive (other than on account of Good Reason), the Corporation shall pay the Executive the Accrued Obligations other than the Pro- rated Bonus Obligation. Unless otherwise directed by the Executive (or, in the case of any Qualified Plan, as may be required by such plan), the Executive shall be paid all such Accrued Obligations in a lump sum in cash within 30 days of the Date of Termination and the Corporation shall have no further obligations to the Executive under this Agreement. (d) Termination by Corporation other than for Cause or Disability and ----------------------------------------------------------------- Termination by Executive for Good Reason. (i) Lump Sum Payment. If, during ---------------------------------------- ---------------- the Employment Period, the Corporation terminates the Executive's employment other than for Cause or Disability, or the Executive terminates his employment for Good Reason, the Corporation shall pay to the Executive in a lump sum in cash within 15 days after the Date of Termination the aggregate of the following amounts: (A) if not theretofore paid, the Executive's Base Salary through the Date of Termination at the rate specified in Section 5(a) of this Agreement; (B) a cash amount equal to two times the sum of (1) the Executive's annual Base Salary at the rate specified in Section 5(a) of this Agreement; (2) the Annual Bonus; and (3) the present value, calculated using the annual federal short- term rate as determined under Section 1274(d) of the Code, of (without duplication) (x) the annual cost to the Corporation (based on the --- premium rates or other costs to it) of obtaining coverage equivalent to the coverage under the plans and programs described in Section 5(d) of this Agreement, and (y) the annual- --- - 6 - ized value of the fringe benefits described under Section 5(f) of this Agreement; provided, however, that in no event shall the Executive be entitled to receive under this clause (B) more than the product obtained by multiplying the amount determined under this clause by a fraction whose numerator shall be the number of months (including fractions of a month) which at the Date of Termination remain until the Executive's normal retirement date under the Corporation's retirement plan or any successor plan as in effect from time to time and whose denominator shall be 24, and provided further that, with respect to the life and medical insurance coverage referred to in Section 5(d) of this Agreement, at the Executive's election made prior to the Date of Termination, the Corporation shall use its best efforts to secure conversion coverage and shall pay the cost of such coverage in lieu of paying the lump sum amount attributable to such life or medical insurance coverage; and (C) a cash amount equal to any amounts (other than amounts payable to the Executive under any Qualified Plans) described in Sections 7(a)(iii) and (iv) of this Agreement. (ii) Discharge of Corporation's Obligations. Subject to the performance -------------------------------------- of its obligations under this Section 7(d), the Corporation shall have no further obligations to the Executive in respect of any termination by the Executive for Good Reason or by the Corporation other than for Cause or Disability, except to the extent expressly provided under any of the plans referred to in Section 5(c) or 5(d) of this Agreement. 8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent ------------------------- or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Corporation or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise prejudice such rights as the Executive may have under any stock option or other plans or agreements with the Corporation or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan or program. 9. Certain Additional Payments by the Corporation. ---------------------------------------------- (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Corporation to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes with respect to the Gross-Up Payment (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. - 7 - (b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick or other firm then auditing the accounts of the Corporation (the "Accounting Firm") which shall provide detailed supporting calculations both to the Corporation and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Corporation. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, or is unwilling or unable to perform its obligations pursuant to this Section 9, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Corporation. Any Gross-Up Payment, determined pursuant to this Section 9, shall be paid by the Corporation to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Corporation and the Executive. As a result of the potential uncertainty in the application of Section 4999 of the Code (or any successor provision) at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Corporation should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Corporation exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Corporation to or for the benefit of the Executive. (c) The Executive shall notify the Corporation in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Corporation of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive is informed in writing of such claim and shall apprise the Corporation of the nature of such claim and the date on which such claim is requested to be paid. the Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which he gives such notice to the Corporation (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Corporation notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Corporation any information reasonably requested by the Corporation relating to such claim, (ii) take such action in connection with contesting such claim as the Corporation shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Corporation, (iii) cooperate with the Corporation in good faith in order effectively to contest such claim, and (iv) permit the Corporation to participate in any proceedings relating to such claim; - 8 - provided, however, that the Corporation shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on a after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this Section 9(c), the Corporation shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Corporation shall determine; provided, however, that if the Corporation directs the Executive to pay such claim and sue for a refund, the Corporation shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statue of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Corporation's control of the contest shall be limited to issues with respect to which a Gross- Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Corporation's complying with the requirements of Section 9(c)) promptly pay to the Corporation the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Corporation pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Corporation does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 10. Full Settlement. The Corporation's obligation to make the payments --------------- provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against the Executive or others whether by reason of the subsequent employment of the Executive or otherwise. In no event shall the Executive be obligated to seek other employment by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and no amount payable under this Agreement shall be reduced on account of any compensation received by the Executive from other employment. In the event that the Executive shall in good faith give a Notice of Termination for Good Reason and it shall thereafter be determined by mutual consent of the Executive and the Corporation or by a tribunal having jurisdiction over the matter that Good Reason did not exist, the employment of the Executive shall, unless the - 9 - Corporation and the Executive shall otherwise mutually agree, be deemed to have terminated, at the date of giving such purported Notice of Termination, by mutual consent of the Corporation and the Executive and, except as provided in the last preceding sentence, the Executive shall be entitled to receive only those payments and benefits which he would have been entitled to receive at such date otherwise than under this Agreement. 11. Legal Fees and Expenses. In the event that a claim for payment of ----------------------- benefits under this Agreement is disputed, the Corporation shall pay all reasonable legal fees and expenses incurred by the Executive in pursuing such claim, provided that the Executive is successful as to at least part of the disputed claim by reason of litigation, arbitration or settlement. 12. Confidential Information. The Executive shall hold in a fiduciary ------------------------ capacity for the benefit of the Corporation all secret or confidential information, knowledge or data relating to the Corporation or any of its affiliated companies, and their respective businesses, (i) obtained by the --- Executive during his employment by the Corporation or any of its affiliated companies and (ii) not otherwise public knowledge (other than by reason of an ---- unauthorized act by the Executive). After termination of the Executive's employment with the Corporation, the Executive shall not, without the prior written consent of the Corporation, unless compelled pursuant to an order of a court or other body having jurisdiction over such matter, communicate or divulge any such information, knowledge or data to anyone other than the Corporation and those designated by it. In no event shall an asserted violation of the provisions of this Section 12 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 13. Employment Contract or Severance Benefits. Notwithstanding ----------------------------------------- anything else in this Agreement to the contrary, any amount payable to the Executive hereunder on account of his termination of employment shall be reduced on a dollar for dollar basis by each dollar actually paid to the Executive with respect to such termination under the terms of any employment contract between the Executive and the Corporation or under any severance program or policy applicable to the Executive. Nothing in this Agreement shall be construed to require duplication of any compensation, benefits or other entitlements provided to the Executive by the Corporation under the terms of any employment contract which may address similar matters. 14. Successors. (a) This Agreement is personal to the Executive and, ---------- without the prior written consent of the Corporation, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors. The Corporation shall require any successor to all or substantially all of the business and/or assets of the Corporation, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Corporation would be required to perform if no such succession had taken place. 15. Miscellaneous. (a) Applicable Law. This Agreement shall be ------------- -------------- governed by and construed in accordance with the laws of the State of Delaware, applied without reference to principles of conflict of laws. (b) Amendments. This Agreement may not be amended or modified ---------- - 10 - otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (c) Notices. All notices and other communications hereunder shall be ------- in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: at the address listed below If to the Corporation: Tambrands Inc. 777 Westchester Avenue White Plains, New York 10604 Attention: Secretary (with a copy to the attention of the General Counsel) or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee. (d) Tax Withholding. The Corporation may withhold from any amounts --------------- payable under this Agreement such Federal, State or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) Severability. The invalidity or unenforceability of any provision ------------ of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (f) Captions. The captions of this Agreement are not part of the -------- provisions hereof and shall have no force or effect. IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Corporation has caused this Agreement to be executed in its name on its behalf, and its corporate seal to be hereunto affixed and attested, all as of the day and year first above written. - 11 - ATTEST: TAMBRANDS INC. /s/Jonathan W. Emery By /s/Paul E. Konney ------------------------- -------------------------------- Title: Senior Vice President- General Counsel and Secretary (Seal) EXECUTIVE: HARRY E. RABER /s/Harry E. Raber ---------------------------------- Address: Tambrands Inc. Bridge & Springfield Sts. P.O. Box 271 Palmer, MA 01069 - 12 - EX-10.10 5 RESOLUTION OF THE BOARD OF DIRECTORS EXHIBIT 10.10 Resolution of the Board of Directors adopted on October 25, 1994 ------------------------------------ RESOLVED, that in consideration of his services as Chairman of the Board of -------- Directors of the Corporation, the Corporation shall pay Howard B. Wentz, Jr. for the period from November 1, 1994 until the Annual Meeting of Shareholders to be held in 1995, a cash fee of $2,500 per diem, in addition to the other compensation otherwise payable to him for his services as a non-employee director of the Corporation under the Corporation's standard practices and policies, except that Mr. Wentz shall not receive any per meeting fees for attendance at meetings of the Board of Directors or any of its committees. EX-10.11 6 RESOLUTION OF THE BOARD OF DIRECTORS EXHIBIT 10.11 Resolution of the Board of Directors adopted on December 13, 1994 ------------------------------------- RESOLVED, that, effective as of January 1, 1995, directors of the -------- Corporation shall no longer receive cash fees for attendance at more than ten Board and Committee meetings. EX-10.14 7 TAMPAX INCORPORATED 1981 ANNUAL INCENTIVE PLAN EXHIBIT 10.14 TAMPAX Incorporated -------------------------------------------------------------------------------- 1981 Annual Incentive Plan -------------------------------------------------------------------------------- TAMPAX Incorporated -------------------------------------------------------------------------------- 1981 Annual Incentive Plan -------------------------------------------------------------------------------- Section Title Page ------- -------------------------------------------------- ---- 1. Purposes...................................................... 3 -------- 2. Definitions................................................... 3 ----------- 3. Effective Date................................................ 4 -------------- 4. Administration................................................ 5 -------------- 5. Designation of Participants, Performance Criteria and Goals... 8 ----------------------------------------------------------- 6. Annual Plan Accrual........................................... 9 ------------------- 7. Determination of Awards....................................... 10 ----------------------- 8. Payment of Awards............................................. 10 ----------------- 9. Deferral of Awards............................................ 11 ------------------ 10. Rights of Participants........................................ 11 ---------------------- 11. Non-Transferability of Rights under the Plan.................. 12 -------------------------------------------- 12. Agreements with Participants.................................. 12 ---------------------------- 13. Withholding Taxes............................................. 12 ----------------- 14. No Employment Rights.......................................... 13 -------------------- 15. Termination, Amendment and Modification....................... 13 --------------------------------------- 16. Notices....................................................... 13 ------- 17. Severability of Provisions.................................... 14 -------------------------- 18. Headings and Captions......................................... 14 --------------------- 19. Controlling Law............................................... 14 --------------- TAMPAX Incorporated -------------------------------------------------------------------------------- 1981 Annual Incentive Plan -------------------------------------------------------------------------------- 1. Purposes The purposes of the TAMPAX Incorporated 1981 Annual Incentive Plan (the "Plan") are to enable TAMPAX Incorporated ("TAMPAX") and its subsidiaries to attract, retain, motivate, and reward the best qualified executives by providing key employees with the opportunity to earn competitive compensation directly linked to results and to create a strong foundation on which to build an aggressive and forward thinking management of top quality. 2. Definitions Unless the context requires otherwise, the following words as used in the Plan shall have the meanings ascribed to each below, it being understood that masculine, feminine and neuter pronouns are used interchangeably, and that each comprehends the others. (a) "Annual Plan Accrual" shall mean the amount accrued by TAMPAX for payment of awards pursuant to Section 6 of the Plan. (b) "Board" shall mean the Board of Directors of TAMPAX. (c) "Committee" shall mean the Compensation Committee of the Board. (d) "Company" shall mean TAMPAX and its subsidiaries, any of whose employees are Participants (as hereinafter defined) in this Plan. (e) "Participant" shall mean a key employee of the Company (who may be, but need not be, an officer and/or director) who has been selected by the Committee as eligible to participate in this Plan. (f) "Performance Period" shall mean, unless otherwise determined by the Committee, one (1) fiscal year of TAMPAX. (g) "Termination of Employment" shall mean the discontinuance of employment of a Participant with the Company for any reason whatsoever. 3. Effective Date The effective date of the Plan shall be June 30, 1981. 2 4. Administration -------------- (a) The Plan shall be administered by the Committee. All powers and functions of the Committee may at any time and from time to time be exercised by the Board; provided, however, that with respect to matters relating to employees who are members of the Board, such powers and functions of the Committee may be exercised by the Board only if, at the time of such exercise, a majority of the members of the entire Board, and a majority of directors acting in the matter, are not employees and have not been employees during the preceding year. (b) The Committee shall have full authority to interpret the Plan; to establish, amend, and rescind rules for carrying out the Plan; to administer the Plan; to select employees to participate in the Plan; to determine the terms and provisions of any agreements pertaining to the Plan (which need not be identical) between TAMPAX and Participants; to determine the amount and manner of payment of awards and to make all other determinations and to take such steps in connection with the Plan as the Committee, in its discretion, deems necessary or desirable. The Committee shall not be bound to any standards of uniformity or similarity of action, interpretation or conduct in the discharge of its duties hereunder, regardless of the apparent similarity of the matters 3 coming before it. Its determination shall be binding on all parties. (c) The Committee may designate the Secretary of the Company, other employees of the Company or competent professional advisors to assist the Committee in the administration of the Plan and may grant authority to such persons to execute agreements or other documents on behalf of the Committee. (d) The Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant or agent and any computation received from such consultant or agent. No member or former member of the Committee or of the Board of Directors of the Company shall be liable for any action or determination made in good faith with respect to the Plan. To the maximum extent permitted by applicable law, each member or former member of the Committee or of the Board of Directors of the Company shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan unless arising out of such member's or former member's own fraud or bad faith. 4 Such indemnification shall be in addition to any rights of indemnification the members or former members may have as directors or under the by-laws of the Company. Expenses incurred by the Board or the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company. (e) All costs and expenses involved in administering the Plan as provided herein, or incident thereto, shall be borne by TAMPAX. (f) The Committee shall select one of its members as a Chairman and shall adopt such rules and regulations as it shall deem appropriate concerning the holding of its meetings and the transaction of its business. Any member of the Committee may be removed at any time either with or without cause by resolution adopted by the Board; and any vacancy on the Committee may at any time be filled by resolution adopted by the Board. (g) All determinations by the Committee shall be made by the affirmative vote of a majority of its members. Any such determination may be made at a meeting duly called and held at which a majority of the members of the Committee were in attendance in person or through telephonic communication. 5 Any determination set forth in writing and signed by all of the members of the Committee shall be as fully effective as if it had been made by a majority vote of the members at a meeting duly called and held. (h) The Committee may, in its sole discretion, make appropriate adjustments with respect to the terms of the Plan and its applicability to Participants in the event of a discontinuance by the Company of a Participant's employment with the Company resulting from any event such as the merger, sale or consolidation of the Company. 5. Designation of Participants, Performance Criteria and Goals ----------------------------------------------------------- For each Performance Period, the Committee shall designate those Participants who may be entitled to receive incentive awards subject to the terms and conditions of the Plan. Unless otherwise determined by the Committee, in its sole discretion prior to the commencement of each Performance Period, the Committee shall determine the performance criteria and goals for such Performance Period, determine the relative weight to be given to the performance criteria, and in accordance with established criteria and goals, assign minimum, target and maximum award opportunities to each Participant based upon such Participant's salary, position and ability to impact TAMPAX's annual performance. 6 At any time designated by the Committee during the Performance Period, appropriate adjustments in the goals may be made by the Committee to avoid undue windfalls or hardships due to external conditions outside the control of management and non-recurring or abnormal items. 6. Annual Plan Accrual ------------------- Prior to the commencement of each Performance Period, the Committee shall determine the amount to be accrued (excluding all costs and expenses involved in administering the Plan which shall be borne separately by the Company as provided in Section 4(e) hereof) in each fiscal year of TAMPAX for the payment of awards pursuant to the Plan. The aggregate awards for any Performance Period may be less than or may exceed the amount accrued for such Performance Period, in the discretion of the Committee. 7. Determination of Awards ----------------------- After completion of each Performance Period, overall annual results attained by the Company, its divisions and Participants shall be evaluated relative to goals. Based upon such evaluation, the Committee may authorize the payment to each Participant of an incentive award hereunder. All awards shall be payable in immediately available funds unless otherwise determined by the Committee. 7 If a Participant is selected for Plan participation after the beginning of a Performance Period, the assigned award will be prorated in accordance with the salary earned for such portion of the Performance Period in which he is a Participant. In the event of the Termination of Employment of a Participant, the Committee, in its sole discretion, may determine not to pay any awards or to reduce the awards payable to him with regard to any prior or current Performance Period. 8. Payment of Awards ----------------- Unless otherwise determined by the Committee, payment shall be made as soon as practicable following the close of each Performance Period, except as otherwise provided in Section 9 of this Plan. 9. Deferral of Awards ------------------ Participants, who are selected by the Committee as being eligible to participate in TAMPAX's 1981 Deferred Compensation Plan, may elect to defer all or a portion of their awards in accordance with the terms of such 1981 Deferred Compensation Plan. 8 10. Rights of Participants ---------------------- Nothing contained in the Plan and no action taken pursuant to the Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and any Participant or his legal representative or designated beneficiary, or any other persons. Any Annual Plan Accrual that may be established by the Company in connection with the Plan shall continue to be a part of the general funds of the Company, and no individual or entity other than the Company shall have any interest in such funds until paid to a Participant, his legal representative or designated beneficiary. If and to the extent that any Participant or his legal representative or designated beneficiary, as the case may be, acquires a right to receive any payment from the Company pursuant to the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. 11. Non-Transferability of Rights under the Plan -------------------------------------------- No amounts payable or other rights under the Plan shall be sold, transferred, assigned, pledged or otherwise disposed of or encumbered by a Participant, except as provided herein. 9 12. Agreements with Participants ---------------------------- Each Participant shall be required to enter into an agreement with TAMPAX which shall contain such provisions, consistent with the provisions of the Plan, as may be established from time to time by the Committee, including any provisions which may be advisable to comply with applicable laws, regulations, rulings, or guidelines of any government authority. 13. Withholding Taxes ----------------- The Company shall have the right to deduct withholding taxes from any payments made pursuant to the Plan, or make such other provisions as it deems necessary or appropriate to satisfy its obligations to withhold federal, state or local income or other taxes incurred by reason of payments pursuant to the Plan. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant upon such terms and conditions as the Committee may prescribe. 10 14. No Employment Rights -------------------- Nothing in this Plan or any booklet or other document describing or referring to this Plan shall be deemed to confer on any Participant the right to continue in the employ of the Company or his respective employer or affect the right of such employer to terminate the employment of any such person with or without cause. 15. Termination, Amendment and Modification --------------------------------------- The Committee may from time to time amend, modify or discontinue the Plan or any provision hereof. No amendment to or discontinuance or termination of the Plan shall, without the written consent of the Participant, adversely affect any rights of such Participant with respect to amounts previously awarded. The Plan shall continue until terminated by the Committee. 16. Notices ------- Each Participant shall be responsible for furnishing the Committee with the current and proper address for the mailing of notices and the delivery of agreements and payments. Any notice required or permitted to be given shall be deemed given if directed to the person to whom addressed at such address 11 and mailed by regular United States mail, first-class and prepaid. If any item mailed to such address is returned as undeliverable to the addressee, mailing will be suspended until the Participant furnishes the proper address. 17. Severability of Provisions -------------------------- If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included. 18. Headings and Captions --------------------- The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan. 19. Controlling Law --------------- This Plan shall be construed and enforced according to the laws of the State of New York to the extent not preempted by Federal law, which shall otherwise control. 1981AIP 12 EX-10.17 8 LETTER OF AGREEMENT BETWEEN COMPANY AND SOPER III EXHIBIT 10.17 August 29, 1994 Mr. Thomas Soper III 255 Strawberry Hill Avenue #D5 Stamford, Connecticut 06902 Dear Mr. Soper: We are pleased to confirm the terms of your employment with Tambrands Inc. (the "Company"). 1. Duties. You will become an employee of the Company on August 29, 1994 ------ (the "Commencement Date"). You will be placed on the Company payroll at the rate of $1.00 per month until you physically report for duty, which will be no later than the 10th of October, 1994, at which time your base salary will be treated in accordance with item 2 below. Effective as of such date, you will be the Senior Vice President - Corporate Human Resources and Communications of the Company. You shall report directly to the Company's President and Chief Executive Officer. All other terms and conditions of this agreement will be in effect as of the "Commencement Date." Immediately upon your appointment as Senior Vice President, Corporate Human Resources and Communications of the Company, you will devote all of your skill, knowledge and full working time (reasonable vacation time and absence for sickness or disability excepted) solely and exclusively to the performance of your duties hereunder. 2. Base Salary. As compensation for the duties to be performed by you ----------- under the terms of this letter agreement, the Company will pay you a base salary in the amount of $250,000 per annum, payable in semi-monthly installments at the same time as the Company pays salary to its other executive employees and subject to all applicable deductions or reductions therein made pursuant to your elections under the Company's compensation plans or programs. It is contemplated that the Company will review your base salary from time to time and, at the discretion of the Compensation Committee of the Board of Directors, may 1 increase your base salary based upon your performance, then generally prevailing industry salary scales and other relevant factors, including, without limitation, the Company's general compensation practices for its executive officers. (Such annual base salary, as it may hereafter be increased, will be referred to as your "Base Salary"). 3. Incentive Bonus. While you are providing services pursuant to this --------------- letter, you will be entitled to participate in the Company's Annual Incentive Plan (the "AIP") as in effect from time to time. Your annual bonus opportunity under the AIP at the target level of performance will be equal to 42% of your Base Salary. Under the terms of the AIP, you may receive more or less than 42% of your Base Salary if performance exceeds or falls short of target levels. Any bonus payable to you under the AIP will be paid to you at the same time as bonuses are paid to other executives under the AIP and subject to the terms and conditions of the AIP. Notwithstanding the foregoing, in no event shall the amount payable to you as an annual bonus in respect of 1994 services be less than 42% of the base salary payable to you for 1994 services. In addition, contingent on forfeiture of your annual incentive at Alexander & Alexander Services, the Company will provide a cash payment equal to the prorated target incentive you would have received for the portion of 1994 you worked at Alexander & Alexander Services Inc. The sum of the bonuses payable in accordance with the two preceding sentences, if the 1994 Alexander & Alexander Services bonus payable in accordance with the second preceding sentence , if the 1994 A&AS Annual Incentive is not forfeited, is referred to in this agreement as the "1994 Targeted Bonus". For services performed during 1995, you will receive no less than two- thirds of your targeted bonus level of 42% of base salary under the AIP. You may receive more if performance exceeds two thirds of targeted levels. 4. Stock Options. Effective as of the Commencement Date, you will be ------------- granted a stock option having a ten-year term for 35,000 shares of the Company's ---------------------- common stock (the "Option") under the terms of the Company's 1991 Stock Option Plan (the "1991 Plan"). The Option will be exercisable in three approximately equal annual installments on each of the first three anniversaries of the Commencement Date, but will become exercisable earlier upon the date, if any, on which a Change of Control (as defined in the 1991 2 Plan) occurs or on which your employment terminates due to your (i) death, (ii) - -- Disability (as defined in the 1991 Plan), (iii) retirement prior to age 65 with --- the consent of the committee responsible for administering the 1991 Plan or (iv) -- retirement at age 65. The per share exercise price for the shares subject to the Option will be determined in accordance with the following schedule:
Number of Shares Exercise Price ---------------- -------------- 17,500 Fair market value of a share on August 29, 1994 as determined under the 1991 Plan (hereafter referred to as the "Fair Market Value"). 5,834 Fair Market Value plus $5.00 5,833 Fair Market Value plus $10.00 5,833 Fair Market Value plus $15.00
All other terms of the Option will be as provided in the 1991 Plan and the agreement relating to such grant, which terms shall be no less favorable than the terms that would apply under the 1991 Plan if there were no limitation upon their scope under the option agreement. You shall be eligible to receive future awards under the 1991 Plan (or any successor thereto) at a level commensurate with your position and in accordance with the Company's compensation practices and policies generally applicable to the Company's executive officers as in effect from time to time, provided that you will not receive any additional stock option grants in 1994. -------- ---- You will also be eligible to participate in any amended or newly developed cash or equity-based executive compensation plans on the same basis as described in the preceding sentence. At current Company stock prices and under the Company's current executive compensation practices, the level of option award for the Senior Vice President, Corporate Human Resources and Communications position is approximately 8,100 shares per year. 5. Restricted Stock. You shall be eligible to receive an award of ---------------- 600 restricted shares of the Company's common stock (the "Award") under the 1989 Restricted Stock Plan (or any successor thereto) (the "1989 Plan") in February 1995. You shall be eligible to receive future 3 awards under the 1989 Plan at a level commensurate with your position and in accordance with the Company's compensation practices and policies generally applicable to the Company's executive officers as in effect from time to time. At current Company stock prices and under the Company's current executive compensation practices, the level of restricted shares awarded for the Senior Vice President, Corporate Human Resources and Communications is approximately 600 shares per year. All terms and conditions of your Awards will be as provided in the 1989 Plan and the agreement relating to the Award. 6. Change of Control Agreement. As of the date hereof and effective --------------------------- as of the Commencement Date, you and the Company will enter into an "Employment Protection Agreement" substantially in the form attached hereto as Exhibit A. If there is a Change in Control prior to October 10, 1994 or prior to payment of a 1994 annual bonus, the Base Salary and 1994 Targeted Bonus shall be used in determining the level of salary and bonus under your Employment Protection Agreement, notwithstanding any contrary provisions of such agreement. 7. Employee Benefits. From and after the Commencement Date, you will ----------------- be eligible to participate in the employee benefit plans and programs generally available to the Company's employees (including, but not limited to, coverage under the Company's medical, dental, life and disability insurance plans and participation in the Company's Pension Plan and Savings Plan) as in effect from time to time on the same basis as the Company's other employees, subject to the terms and provisions of such plans and programs. You will receive four weeks paid vacation per annum. You will at all times during your employment by the Company be designated as an Executive Participant for purposes of the Company's Supplemental Executive Retirement Plan as amended and restated effective July 1, 1994 (the "SERP"). As such, your SERP benefit will be calculated under the "Mid-Career Formula" of the SERP. You will be eligible to participate in the SERP to the extent that the benefits that you may accrue, or the compensation that may be taken into account in calculating the benefits that you may accrue, under the Company's Pension Plan are affected by any limitation required for the Pension Plan to satisfy the applicable requirements of the Internal Revenue Code. Your SERP benefits will be payable in accordance with the terms of the SERP such that in the event that your employment with 4 the Company is "Involuntarily Terminated" within two years following the occurrence of a "Change of Control" (as each such term is defined in the SERP) your benefits accrued thereunder shall be calculated as though you had two additional years of service and you shall be deemed to be fully vested in your entire such benefits. For purposes of determining "Actuarial Equivalence" under the SERP, the actuarial assumptions used shall be no less favorable than (i) the actuarial assumptions in effect for funding purposes on the date of determination under the Pension Plan for Employees of Tambrands Inc., as amended from time to time (the "Pension Plan"), or any successor thereto which is a tax-qualified plan under the applicable provisions of the Internal Revenue Code of 1986, as amended, or (ii) the actuarial assumptions in effect for funding purposes under the Pension Plan as of the date of such Plan's termination, if the Pension Plan is no longer in effect and there is no such successor plan. In the event of your termination of employment for any reason prior to becoming fully vested in the SERP's "Mid-Career Formula", you shall receive a supplemental benefit which shall be calculated in accordance with the attached "Minimum Supplemental Pension Term Sheet"; provided, however, that the Company's ----------------------------------------- and your actuary shall promptly review such Term Sheet and we agree that it shall be amended as is necessary to fully effectuate the objective expressed therein. 8. Executive Perquisites. You will be eligible to receive the --------------------- perquisites and other personal benefits made available to the Company's senior executives from time to time, including, without limitation, payment of or reimbursement for up to $10,000 per annum for personal tax and financial planning. 9. Expenses. The Company will reimburse you for all reasonable -------- expenses incurred by you in connection with your performance of services under this letter agreement in accordance with the Company's policies, practices and procedures. 10. Termination of Employment. If the Company terminates your ------------------------- employment prior to age 65 for any reason other than Cause or Disability or you terminate your employment as a result of a Termination for Good Reason, the Company will pay you severance benefits in an aggregate amount equal to one and one-half (1.5) times your then 5 current annual Base Salary in one lump sum payment, unless you specifically request and the Company agrees to make the payment of all or any portion of this payment over time, not to exceed 18 months. In addition, you will be paid a bonus for the year of termination equal to the target bonus for the year of termination, if one has been established, or for the preceding year, if such target has not yet been established; provided, however, that in calculating the -------- ------- amount of such bonus, performance objectives which relate to individual performance shall be assumed to have been fully attained and performance objectives which relate to corporate performance shall take into account actual corporate performance; and further provided, that the bonus so determined shall ------- -------- be prorated for the number of months worked during the year of termination. In the event your employment terminates (i) due to your death or - Disability or after age 65, (ii) is terminated by the Company for Cause or (iii) -- --- is terminated by you other than as a result of a Termination for Good Reason, you will be entitled to receive the compensation and benefits payable to you under the Company's otherwise applicable employee benefit plans or programs. Any benefits payable to you pursuant to this paragraph 10 will be in full satisfaction of all liabilities to you under this agreement and with respect to any other claim you may have in conjunction with your termination of employment (excluding any rights you may have under the 1991 Plan or this letter with respect to options, under the 1989 Restricted Stock Plan with respect to restricted stock, any vested benefits you may have under the terms of the Company's SERP, Pension Plan or Savings Plan, but including, without limitation, any claim for benefits under the Company's Executive Severance Program). These benefits will not be subject to any offset, mitigation or other reduction as a result of your receiving salary or other benefits by reason of your securing other employment. For purposes of this agreement, the following terms will have the meanings set forth below: "Cause" means (i) your willful failure to perform substantially your - duties as an officer and employee of the Company (other than due to physical or mental illness) that results in material economic damage to the Company, (ii) your engaging in serious misconduct that results in material -- economic damage to the Company, (iii) your having been convicted of, or --- 6 entered a plea of nolo contendere to, a crime that constitutes a felony, or ---- ---------- (iv) your unauthorized disclosure of confidential information (unless such -- disclosure was believed by you to be appropriate in the course of properly carrying out your duties under this agreement, and other than to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency) that has resulted or is likely to result in material economic damage to the Company. For purposes of this definition, no act, or failure to act on your part, shall be considered "willful" unless done, or omitted to be done, by you not in good faith and without reasonable belief that such actions or omission was in the best interest of the Company. Prior to terminating your employment for Cause, the Company shall deliver to you reasonable advance written notice of any proposed action by the Board of Directors of the Company (the "Board") relating to your termination for Cause specifying the particulars in detail sufficient to give you an informed opportunity to be heard before the Board, together with your counsel. No termination for Cause shall be effective without the Board having decided after such hearing , by the affirmative vote of a majority of its members at a meeting of the Board, that you were guilty of conduct constituting Cause, as defined herein. "Disability" means that, as a result of your incapacity due to physical or mental illness, you have been absent from your duties to the Company on a substantially full-time basis for 180 days in any twelve-month period. "Termination for Good Reason" means a voluntary termination of your employment which occurs within 90 days following the occurrence of any of the following events without your prior written consent: (i) any assignment - to you of any duties or authorities which are different from, and result in a diminution of, the duties and authorities you are to perform or possess as Senior Vice President, Corporate Human Resources and Communications of the Company pursuant to this letter agreement, (ii) your removal from or -- any failure to reelect or redesignate you to the position of Senior Vice President, Corporate Human Resources and Communications of the Company, except in connection with a termination of your employment by the Company for Cause or (iii) any reduction in your Base Salary or --- 7 (iv) any action which results in your ceasing to report directly to the Company's President and Chief Executive Officer. 11. Binding Effect. -------------- (a) This letter agreement will inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees. If you should die while any amounts would still be payable to you under this letter agreement if you had continued to live, all such amounts, unless otherwise provided herein, will be paid in accordance with the terms of this letter agreement to your personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees or estate, as the case may be. (b) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be breach of this Agreement. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 11(b) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 12. Indemnification. The Company agrees to indemnify you to the --------------- fullest extent permitted under its By-laws as in effect from time to time. The Company shall advance to you all reasonable costs and expenses incurred by you in connection with any Proceeding within 20 days after receipt by the Company of a written request for such advance. Such request shall include an itemized list of the 8 costs and expenses and an undertaking by you to repay the amount of such advance if it shall ultimately be determined that you are not entitled to be indemnified against such costs and expenses. For purposes of this Section 12, a "Proceeding" shall mean any action, suit or proceeding, whether civil, criminal, administrative or investigative, in which you are made, or are threatened to be made, a party to, or a witness in, such action, suit or proceeding by reason of the fact that you are or were an officer, director or employee of the Company or are or were serving as an officer, director, member, employee, trustee or agent of any other entity at the request of the Company. The Company shall not settle any proceeding or claim in any manner which would impose on you any penalty or limitation without your prior written consent. You agree that you will not unreasonably withhold your consent to any proposed settlement. 13. General Provisions. No provisions of this letter agreement may ------------------ be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and such Company officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Except as set forth in the Employment Protection Agreement referenced in Section 6 of this letter no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this letter agreement. The invalidity or unenforceability of any one or more provisions of this letter agreement will not affect the validity or enforceability of any other provision of this letter agreement, which will remain in full force and effect. This letter agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. All amounts payable to you hereunder will be paid net of any and all applicable income or employment taxes required to be withheld therefrom under applicable Federal, State or local laws or regulations. 9 The validity, interpretation, construction and performance of this letter agreement will be governed by the laws of the State of New York, without giving effect to its conflict of laws provisions. 14. Due Authorization. The Company represents and warrants to you ----------------- that (i) the Company has all requisite corporate power and authority to enter into this agreement and the agreements referenced in Sections 6 and 7 of this agreement, (ii) the execution and delivery of all such agreements and the performance of the Company's obligations under all such agreements have been duly authorized by all necessary corporate action on the part of the Company and (iii) all such agreements have been duly executed by the Company and constitute the Company's valid and binding obligations, enforceable against it in accordance with their terms. 15. Notice. For the purpose of this agreement, notices and all other ------ communications provided for in the agreement shall be in writing and shall be deemed to have been duly given on the third business day following the mailing of such notice or communication by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows: If to you: Mr. Thomas Soper III 255 Strawberry Hill Avenue Unit D-5 Stamford, CT 06902 If to the Company: Tambrands Inc. 777 Westchester Avenue White Plains, NY 10604 Attn: Corporate Counsel or to such other address as the party to be notified shall have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. * * * * 10 If the foregoing accurately sets forth the terms of your employment with the Company, please so indicate by signing below and returning one signed copy of this letter agreement to me. Sincerely, TAMBRANDS INC. /s/EDWARD T. FOGARTY _____________________________ Edward T. Fogarty President & CEO ACCEPTED AND AGREED as of this 29th day of August, 1994 /s/THOMAS SOPER III ____________________________ Thomas Soper III 11 "Minimum Supplemental Pension Term Sheet" -------------------------------------------------------------------------------- Thomas Soper III [] Objective Provide a supplemental benefit (the "Supplemental Benefit") during the period employee is unvested in the Tambrands Mid-Career formula, equal to the benefit that would have been provided by Alexander & Alexander Services Inc. under the A&AS Supplemental Pension Plan in effect as of August 29, 1994 ("A&AS SERP") had Mr. Soper remained with A&AS for up to an additional five years. For example, Service Under A&AS Tambrands Service Supp. Benefit Calc. ----------------- ------------------- 1 year 10 years 2 years 11 years 3 years 12 years 4 years 13 years 5 years 14 years 6-9 years 14 years provided, however, that if actual A&AS service credited for purposes of the A&AS SERP is greater than nine years, such actual A&AS credited service shall be used in determining service under the right-hand column above. [] Vesting 20% vesting per year during first five years, 100% vested after five (5) and beyond. [] Assumptions [] The Supplemental Benefit will be equal to the benefit that would have been payable from the A&AS SERP had Mr. Soper continued in employment with A&AS for up to an additional five years. The amount of such benefit shall be determined as of the date payment commences under the A&AS SERP and shall be assumed to be paid in the same form as benefits are in fact paid under the A&AS SERP; provided, however, that if Mr. Soper and the Company agree, such benefit will be paid at such other time and in such other form as is actuarially equivalent to the benefit described in the preceding sentence. T. Soper Page 2 [ ] If the A&AS SERP benefit does not provide for an offset of the vested qualified A&AS Pension Plan benefit, then the Supplemental Benefit shall be offset by such benefit. [ ] Covered compensation taken into account under the A&AS SERP shall be assumed to be $351,000, which amount shall be increased going forward at 5% per year. [ ] Once Tambrands "Mid-Career" SERP benefit has vested at age 55 with 10 years of service, the Company's obligation to provide a Supplemental Benefit will lapse. [ ] Assumptions for funding, actuarial equivalence and expense will be the same as used for Tambrands SERP. [ ] Funding equal to level annual funding over five years. EX-10.18 9 LETTER OF AGREEMENT BETWEEN COMPANY AND MASON EXHIBIT 10.18 October 18, 1994 Mr. Thomas J. Mason 1293 White Dove Circle Westlake Village, CA 91362 Dear Mr. Mason: We are pleased to confirm the terms of your employment with Tambrands Inc. (the "Company"). 1. Duties. You will become an employee of the Company on October 18, 1994 ------ (the "Commencement Date"). You will be placed on the Company payroll at the rate of $1.00 per month until you physically report for duty, which will be no later than the 24th of October, 1994, at which time your base salary will be treated in accordance with item 4 below. Effective as of such date, you will be the Group Vice President, International of the Company. You shall report directly to the Company's President and Chief Executive Officer. All other terms and conditions of this agreement will be in effect as of the "Commencement Date." Immediately upon your appointment as Group Vice President, International, you will devote all of your skill, knowledge and full working time (reasonable vacation time and absence for sickness or disability excepted) solely and exclusively to the performance of your duties hereunder. 2. Location. You will be temporarily assigned to the Corporate -------- Headquarters at 777 Westchester Avenue in White Plains upon your "Commencement Date". On or about July 1, 1995, you will be considered an expatriate with a home country of the U.S. and an assignment location of the U.K. As of the actual date of your international assignment, you will be assigned to Tambrands Ltd. headquarters, currently located in Woking, England and such date shall be deemed the commencement date of your expatriate assignment. 3. Expatriate Assignment. The terms of your expatriate assignment will be --------------------- finalized in the first quarter of 1995 and will be included as a rider to this employment 1 agreement. The terms will follow those provided in the Tambrands International Assignment Policy, except where specifically noted in the above mentioned rider. 4. Base Salary. As compensation for the duties to be performed by you ----------- under the terms of this letter agreement, the Company will pay you a base salary in the amount of $300,000 per annum, payable in semi-monthly installments at the same time as the Company pays salary to its other executive employees and subject to all applicable deductions or reductions therein made pursuant to your elections under the Company's compensation plans or programs. It is contemplated that the Company will review your base salary from time to time and, at the discretion of the Compensation Committee of the Board of Directors, may increase your base salary based upon your performance, then generally prevailing industry salary scales and other relevant factors, including, without limitation, the Company's general compensation practices for its executive officers. (Such annual base salary, as it may hereafter be increased, will be referred to as your "Base Salary"). 5. Sign-On Bonus. You will receive a sign-on bonus of $100,000, less ------------- applicable withholdings, payable in the first quarter of 1995, when AIP awards are paid. This payment will be in lieu of any 1994 AIP award and recognizes any foregone compensation from your prior employer. 6. Incentive Bonus. While you are providing services pursuant to this --------------- letter, you will be entitled to participate in the Company's Annual Incentive Plan (the "AIP") as in effect from time to time. Your annual bonus opportunity under the AIP at the target level of performance will be equal to 50% of your Base Salary. Under the terms of the AIP, you may receive more or less than 50% of your Base Salary if performance exceeds or falls short of target levels. Any bonus payable to you under the AIP will be paid to you at the same time as bonuses are paid to other executives under the AIP and subject to the terms and conditions of the AIP. For services performed during 1995, you will receive no less than two- thirds of your targeted bonus level of 50% of base salary under the AIP. You may receive more if performance exceeds two thirds of targeted levels. 7. Stock Options. Effective as of the Commencement Date, you will be ------------- granted a stock option having a ten-year term for 50,000 shares of the Company's ---------------------- common 2 stock (the "Option") under the terms of the Company's 1991 Stock Option Plan (the "1991 Plan"). The Option will be exercisable in three approximately equal annual installments on each of the first three anniversaries of the Commencement Date, but will become exercisable earlier upon the date, if any, on which a Change of Control (as defined in the 1991 Plan) occurs or on which your employment terminates due to your (i) death, (ii) Disability (as defined in the - -- 1991 Plan), (iii) retirement prior to age 65 with the consent of the committee --- responsible for administering the 1991 Plan or (iv) retirement at age 65. The -- per share exercise price for the shares subject to the Option will be determined in accordance with the following schedule:
Number of Shares Exercise Price ---------------- -------------- 25,000 Fair market value of a share on August 29, 1994 as determined under the 1991 Plan (hereafter referred to as the "Fair Market Value"). 8,334 Fair Market Value plus $5.00 8,333 Fair Market Value plus $10.00 8,333 Fair Market Value plus $15.00
All other terms of the Option will be as provided in the 1991 Plan and the agreement relating to such grant, which terms shall be no less favorable than the terms that would apply under the 1991 Plan if there were no limitation upon their scope under the option agreement. You shall be eligible to receive future awards under the 1991 Plan (or any successor thereto) at a level commensurate with your position and in accordance with the Company's compensation practices and policies generally applicable to the Company's executive officers as in effect from time to time, provided that you will not receive any additional stock option grants in 1994. -------- ---- You will also be eligible to participate in any amended or newly developed cash or equity-based executive compensation plans on the same basis as described in the preceding sentence. At current Company stock prices and under the Company's current executive compensation practices, the level of option award for the Group Vice President, International position is approximately 12,200 shares per year. 3 8. Restricted Stock. You shall be eligible to receive an award of ---------------- 900 restricted shares of the Company's common stock (the "Award") under the 1989 Restricted Stock Plan (or any successor thereto) (the "1989 Plan") in February 1995. You shall be eligible to receive future awards under the 1989 Plan at a level commensurate with your position and in accordance with the Company's compensation practices and policies generally applicable to the Company's executive officers as in effect from time to time. At current Company stock prices and under the Company's current executive compensation practices, the level of restricted shares awarded for the Group Vice President, International is approximately 900 shares per year. All terms and conditions of your Awards will be as provided in the 1989 Plan and the agreement relating to the Award. 9. Change of Control Agreement. As of the date hereof and effective --------------------------- as of the Commencement Date, you and the Company will enter into an "Employment Protection Agreement" substantially in the form attached hereto as Exhibit A. If there is a Change in Control prior to October 24, 1994 or prior to payment of a 1994 Bonus, the Base Salary and 1994 Targeted Bonus shall be used in determining the level of salary and bonus under your Employment Protection Agreement, notwithstanding any contrary provisions of such agreement. 10. Employee Benefits. From and after the Commencement Date, you ----------------- will be eligible to participate in the employee benefit plans and programs generally available to the Company's U.S. employees (including, but not limited to, coverage under the Company's medical, dental, life and disability insurance plans and participation in the Company's Pension Plan and Savings Plan) as in effect from time to time on the same basis as the Company's other U.S. employees, subject to the terms and provisions of such plans and programs. You will receive four weeks paid vacation per annum. You will at all times during your employment by the Company be designated as an Executive Participant for purposes of the Company's Supplemental Executive Retirement Plan as amended and restated effective July 1, 1994 (the "SERP"). As such, your SERP benefit will be calculated under the "Mid-Career Formula" of the SERP. You will be eligible to participate in the SERP to the extent that the benefits that you may accrue, or the compensation that may be taken into account in calculating the benefits that you may accrue, under the Company's Pension Plan are affected by 4 any limitation required for the Pension Plan to satisfy the applicable requirements of the Internal Revenue Code. Your SERP benefits will be payable in accordance with the terms of the SERP such that in the event that your employment with the Company is "Involuntarily Terminated" within two years following the occurrence of a "Change of Control" (as each such term is defined in the SERP) your benefits accrued thereunder shall be calculated as though you had two additional years of service and you shall be deemed to be fully vested in your entire such benefits. For purposes of determining "Actuarial Equivalence" under the SERP, the actuarial assumptions used shall be no less favorable than (i) the actuarial assumptions in effect for funding purposes on the date of determination under the Pension Plan for U.S. Employees of Tambrands Inc., as amended from time to time (the "Pension Plan"), or any successor thereto which is a tax-qualified plan under the applicable provisions of the Internal Revenue Code of 1986, as amended, or (ii) the actuarial assumptions in effect for funding purposes under the Pension Plan as of the date of such Plan's termination, if the Pension Plan is no longer in effect and there is no such successor plan. In the event of your termination of employment for any reason prior to becoming fully vested in the SERP's "Mid-Career Formula", you shall receive a supplemental benefit which shall be calculated in accordance with the attached "Minimum Supplemental Pension Term Sheet"; provided, however, that the Company's ----------------------------------------- and your actuary shall promptly review such Term Sheet and we agree that it shall be amended as is necessary to fully effectuate the objective expressed therein. 11. Executive Perquisites. You will be eligible to receive the --------------------- perquisites and other personal benefits made available to the Company's senior executives from time to time, including, without limitation, payment of or reimbursement for up to $10,000 per annum for personal tax and financial planning. Under the terms of the International Assignment Policy, Tambrands will engage an international tax consulting firm (currently Ernst & Young) to prepare and file your returns. The fee for such services will be borne by the Company. 12. Expenses. The Company will reimburse you for all reasonable -------- expenses incurred by you in connection with 5 your performance of services under this letter agreement in accordance with the Company's policies, practices and procedures. 13. Termination of Employment. If the Company terminates your ------------------------- employment prior to age 65 for any reason other than Cause or Disability or you terminate your employment as a result of a Termination for Good Reason, the Company will pay you severance benefits in an aggregate amount equal to one and one-half (1.5) times your then current annual Base Salary in one lump sum payment, unless you specifically request and the Company agrees to make the payment of all or any portion of this payment over time, not to exceed 18 months. In addition, you will be paid a bonus for the year of termination equal to the target bonus for the year of termination, if one has been established, or for the preceding year, if such target has not yet been established; provided, -------- however, that in calculating the amount of such bonus, performance objectives ------- which relate to individual performance shall be assumed to have been fully attained and performance objectives which relate to corporate performance shall take into account actual corporate performance; and further provided, that the ------- -------- bonus so determined shall be prorated for the number of months worked during the year of termination. In the event your employment terminates (i) due to your death or - Disability or after age 65, (ii) is terminated by the Company for Cause or (iii) -- --- is terminated by you other than as a result of a Termination for Good Reason, you will be entitled to receive the compensation and benefits payable to you under the Company's otherwise applicable employee benefit plans or programs. Any benefits payable to you pursuant to this paragraph 10 will be in full satisfaction of all liabilities to you under this agreement and with respect to any other claim you may have in conjunction with your termination of employment (excluding any rights you may have under the 1991 Plan or this letter with respect to options, under the 1989 Restricted Stock Plan with respect to restricted stock, any vested benefits you may have under the terms of the Company's SERP, Pension Plan or Savings Plan, but including, without limitation, any claim for benefits under the Company's Executive Severance Program). These benefits will not be subject to any offset, mitigation or other reduction as a result of your receiving salary or other benefits by reason of your securing other employment. 6 For purposes of this agreement, the following terms will have the meanings set forth below: "Cause" means (i) your willful failure to perform substantially your - duties as an officer and employee of the Company (other than due to physical or mental illness) that results in material economic damage to the Company, (ii) your engaging in serious misconduct that results in material -- economic damage to the Company, (iii) your having been convicted of, or --- entered a plea of nolo contendere to, a crime that constitutes a felony, or ---- ---------- (iv) your unauthorized disclosure of confidential information (unless such -- disclosure was believed by you to be appropriate in the course of properly carrying out your duties under this agreement, and other than to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency) that has resulted or is likely to result in material economic damage to the Company. For purposes of this definition, no act, or failure to act on your part, shall be considered "willful" unless done, or omitted to be done, by you not in good faith and without reasonable belief that such actions or omission was in the best interest of the Company. Prior to terminating your employment for Cause, the Company shall deliver to you reasonable advance written notice of any proposed action by the Board of Directors of the Company (the "Board") relating to your termination for Cause specifying the particulars in detail sufficient to give you an informed opportunity to be heard before the Board, together with your counsel. No termination for Cause shall be effective without the Board having decided after such hearing , by the affirmative vote of a majority of its members at a meeting of the Board, that you were guilty of conduct constituting Cause, as defined herein. "Disability" means that, as a result of your incapacity due to physical or mental illness, you have been absent from your duties to the Company on a substantially full-time basis for 180 days in any twelve-month period. "Termination for Good Reason" means a voluntary termination of your employment which occurs within 90 days following the occurrence of any of the following events without your prior written consent: (i) any assignment - to you of any duties or authorities which 7 are different from, and result in a diminution of, the duties and authorities you are to perform or possess as Senior Vice President, Corporate Human Resources and Communications of the Company pursuant to this letter agreement, (ii) your removal from or any failure to reelect or -- redesignate you to the position of Group Vice President, International of the Company, except in connection with a termination of your employment by the Company for Cause or (iii) any reduction in your Base Salary or (iv) --- any action which results in your ceasing to report directly to the Company's President and Chief Executive Officer. 14. Binding Effect. -------------- (a) This letter agreement will inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees. If you should die while any amounts would still be payable to you under this letter agreement if you had continued to live, all such amounts, unless otherwise provided herein, will be paid in accordance with the terms of this letter agreement to your personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees or estate, as the case may be. (b) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be breach of this Agreement. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 11(b) or which otherwise 8 becomes bound by all the terms and provisions of this Agreement by operation of law. 15. Indemnification. The Company agrees to indemnify you to the --------------- fullest extent permitted under its By-laws as in effect from time to time. The Company shall advance to you all reasonable costs and expenses incurred by you in connection with any Proceeding within 20 days after receipt by the Company of a written request for such advance. Such request shall include an itemized list of the costs and expenses and an undertaking by you to repay the amount of such advance if it shall ultimately be determined that you are not entitled to be indemnified against such costs and expenses. For purposes of this Section 15, a "Proceeding" shall mean any action, suit or proceeding, whether civil, criminal, administrative or investigative, in which you are made, or are threatened to be made, a party to, or a witness in, such action, suit or proceeding by reason of the fact that you are or were an officer, director or employee of the Company or are or were serving as an officer, director, member, employee, trustee or agent of any other entity at the request of the Company. The Company shall not settle any proceeding or claim in any manner which would impose on you any penalty or limitation without your prior written consent. You agree that you will not unreasonably withhold your consent to any proposed settlement. 16. General Provisions. No provisions of this letter agreement may ------------------ be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and such Company officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Except as set forth in the Employment Protection Agreement referenced in Section 9 of this letter no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this letter agreement. The invalidity or unenforceability of any one or more provisions of this letter agreement will not affect the validity or enforceability of any other provision of this letter agreement, which will remain in 9 full force and effect. This letter agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. All amounts payable to you hereunder will be paid net of any and all applicable income or employment taxes required to be withheld therefrom under applicable Federal, State or local laws or regulations. The validity, interpretation, construction and performance of this letter agreement will be governed by the laws of the State of New York, without giving effect to its conflict of laws provisions. 17. Due Authorization. The Company represents and warrants to you ----------------- that (i) the Company has all requisite corporate power and authority to enter into this agreement and the agreements referenced in Sections 6 and 7 of this agreement, (ii) the execution and delivery of all such agreements and the performance of the Company's obligations under all such agreements have been duly authorized by all necessary corporate action on the part of the Company and (iii) all such agreements have been duly executed by the Company and constitute the Company's valid and binding obligations, enforceable against it in accordance with their terms. 18. Notice. For the purpose of this agreement, notices and all other ------ communications provided for in the agreement shall be in writing and shall be deemed to have been duly given on the third business day following the mailing of such notice or communication by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows: If to you: Mr. Thomas J. Mason 1293 White Dove Circle Westlake Village, CA 91362 If to the Company: Tambrands Inc. 777 Westchester Avenue White Plains, NY 10604 Attn: SVP Corporate Human Resources 10 or to such other address as the party to be notified shall have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. * * * * If the foregoing accurately sets forth the terms of your employment with the Company, please so indicate by signing below and returning one signed copy of this letter agreement to me. Sincerely, TAMBRANDS INC. /s/ EDWARD T. FOGARTY _____________________________ Edward T. Fogarty President & CEO ACCEPTED AND AGREED as of this 18th day of October, 1994 /s/ THOMAS J. MASON ____________________________ Thomas J. Mason 11 "Minimum Supplemental Pension Term Sheet" -------------------------------------------------------------------------------- Thomas J. Mason [] Objective Provide a supplemental benefit (the "Supplemental Benefit") during the period employee is unvested in the Tambrands Mid-Career formula, equal to the benefit that would have been provided under the Dole Supplemental Pension Plan maintained for senior executives of Dole Packaged Foods ("Dole SERP") had Mr. Mason remained with Dole for up to an additional five years. For example, Service Under Dole Tambrands Service Supp. Benefit Calc. ----------------- ------------------- 1 year 3 years 2 years 4 years 3 years 5 years 4 years 6 years 5 years 7 years 6-9 years 7 years provided, however, that if actual Dole service credited for purposes of the Dole SERP is greater than two years, such actual Dole credited service shall be used in determining service under the right-hand column above. [] Vesting 20% vesting per year during first five years, 100% vested after five (5) and beyond. [] Assumptions [] The Supplemental Benefit will be equal to the benefit that would have been payable from the Dole SERP had Mr. Mason continued in employment with Dole for up to an additional five years. The amount of such benefit shall be determined as of the date payment commences under the Dole SERP and shall be assumed to be paid in the same form as benefits are in fact paid under the Dole SERP; provided, however, that if Mr. Mason and the Company agree, such benefit will be paid at such other time and in such other form as is actuarially equivalent to the benefit described in the preceding sentence. T. Mason Page 2 [ ] If the Dole SERP benefit does not provide for an offset of the vested qualified Dole Pension Plan benefit, then the Supplemental Benefit shall be offset by such benefit. [ ] Covered compensation taken into account under the Dole SERP shall be assumed to be $450,000, which amount shall be increased going forward at 5% per year. [ ] Once Tambrands "Mid-Career" SERP benefit has vested with 10 years of service, the Company's obligation to provide a Supplemental Benefit will lapse. [ ] Assumptions for funding, actuarial equivalence and expense will be the same as used for Tambrands SERP. [ ] Funding equal to level annual funding over five years. October 18, 1994 Mr. Thomas J. Mason 1293 White Dove Circle Westlake Village, CA 91362 Dear Mr. Mason: As agreed, you will be covered under the Company's Expatriate Relocation Program. In addition, the Company has agreed to the following additional provisions associated with the sale of your home in Westlake Village, California and with the relocation of your family to the United Kingdom. 1. Any loss incurred by you on the ultimate sale of your property as determined by the original purchase price of $985,000, minus the selling price, will be reimbursed up to a maximum of $250,000. You have informed us that the purchase price was $985,000. You have agreed to provide the Company appropriate documentation to verify the purchase price when and as required. This protection is for a term of up to five (5) calendar years commencing with the date you and your family first become resident in the United Kingdom. 2. Should you decide to rent your property in California during all or part of your expatriate assignment, the Company will provide downside protection in the event you are unable to rent your property, incur a temporary interruption in rental stream of income or incur costs associated with the rental/supervision of the tenant to the following limits: a. Should you incur an interruption in the rental income stream and/or the rental income you obtain is less than your carrying cost of the property, the Company will cover your actual losses up to a maximum amount equal to the equivalent of two (2) months of your full carrying costs over each of two separate eighteen (18) consecutive month rental protection periods. Should the amount of actual losses incurred not exceed the rental protection period limit, then there shall be no carry over to the next subsequent rental protection period. b. The Company's obligation to provide any further rental income protection shall cease at the end of the second rental protection period--three (3) years in total. T. J. Mason October 18, 1994 Page 2 c. You agree to make every good faith effort to rent your property to a reputable tenant at then prevailing Fair Market Rates. d. The Company's assistance is specifically limited to the above provisions including the cost of agency fees associated with the rental, and in the aggregate, not to exceed the specified maximum limit per respective rental protection period. e. As per the policy, the company -- in employing a Balance Sheet Approach -- will be deducting a home country housing cost, as well as providing fully paid Company provided U.K. housing for the duration of your expatriate assignment following the general principle that you shall neither financially gain nor lose on housing during your overseas assignment. 2. The Company will, under the provisions of the expatriate policy, deduct a hypothetical home country tax, and will be responsible for planning and paying all taxes incurred by you during the expatriate assignment. You agree to work with and to maintain and furnish to Ernst & Young (or such other professional service firm as the Company may from time to time so designate) such records and assistance may require. 3. The home selling assistance as provided for under the company's relocation policy shall be available to you for a period of five calendar years subsequent to the commencement of your expatriate assignment. Should you have any questions regarding this information, please contact me at (914) 696-6644. With best regards, /s/THOMAS SOPER, III Thomas Soper, III SVP, Corporate Human Resources EX-12 10 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Tambrands Inc. FORM 10-K PART IV, Item 14., Exhibit 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited) The following table sets forth the Company's ratio of earnings to fixed charges for the periods indicated.
Year Ended (in thousands, except ratios) December 31, ------------------------------------------------ 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- Earnings: Income before income taxes $141,751 $118,652 $191,863 $131,825 $154,696 Fixed charges 9,054 6,549 6,470 4,929 4,512 -------- -------- -------- -------- -------- Earnings $150,805 $125,201 $198,333 $136,754 $159,208 ======== ======== ======== ======== ======== Fixed charges: Interest portion of operating lease expense: Operating lease expense $ 4,270 $ 5,027 $ 4,031 $ 4,204 $ 2,221 Assumed interest factor 0.33 0.33 0.33 0.33 0.33 -------- -------- -------- -------- -------- Interest portion of operating lease expense 1,409 1,659 1,330 1,387 733 Interest expense 7,645 4,890 5,140 3,542 3,779 -------- -------- -------- -------- -------- Fixed charges $ 9,054 $ 6,549 $ 6,470 $ 4,929 $ 4,512 ======== ======== ======== ======== ======== Ratio of earnings to fixed charges 16.7 19.1 30.7 27.7 35.3 ======== ======== ======== ======== ========
EX-21 11 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21 ---------- TAMBRANDS INC. Subsidiaries of the registrant. ------------------------------
(1) (2) (3) Percentage of Voting Securities Owned -------------------------- State or Country By the By Other Name of Subsidiary of Organization Company Subsidiaries ------------------------------ ----------------- ------- ---------------- Tambrands Canada Inc. Canada 100% Tambrands Europe Ltd. Delaware 100% Tambrands Limited United Kingdom 100% (a) Tambrands Ireland Ireland 100% (b) Limited Tambrands France S.A. France 100% (a) ZAO Tambrands Russia 100% (a) Tambrands AG Switzerland 100% (a) Tambrands Benelux S.A. Belgium 100% (c) Industrial Catenation South Africa 100% (a) Services (Pty) Ltd. Tambrands South Africa South Africa 100% (d) (Pty) Ltd. Tambrands PACE, Inc. Delaware 100% Tambrands Czech Republic 100% (e) Czechoslovakia Limited Tambrands Poland Ltd. Poland 100% (e) Tambrands de Venezuela, C.A. Venezuela 100% (e) Tambrands - St. Petersburg Russia 100% (f) Tambrands Ukraine Ukraine 100% (f) Shenyang Tambrands People's Republic 80% Company Limited of China Tambrands Brasil Ltd. Delaware 100% Tambrands Industria e Brazil 100% (g) Comercio Limitada
(1) (2) (3) Percentage of Voting Securities Owned -------------------------- State or Country By the By Other Name of Subsidiary of Organization Company Subsidiaries ---------------------- ---------------- ------- ------------ TIM International Delaware 100% Investments Incorporated Tambrands Dosmil, Mexico 100% (h) S.A. de C.V.
Notes: (a) Owned by Tambrands Europe Ltd. (b) Owned by Tambrands Limited. (c) Owned by Tambrands Europe Ltd. and Tambrands AG. (d) Owned by Industrial Catenation Services (Pty) Ltd. (e) Owned by Tambrands PACE, Inc. (f) Owned by Tambrands Limited and Tambrands PACE, Inc. (g) Owned by the Company in part directly and in part indirectly through Tambrands Brasil Ltd. (h) Owned by TIM International Investments Incorporated. Exhibit.21 EX-23 12 INDEPENDENT AUDITORS' CONSENT EXHIBIT 23 Independent Auditors' Consent ----------------------------- The Board of Directors Tambrands Inc.: We consent to incorporation by reference in the Registration Statement No. 33- 50961 on Form S-3 and Nos. 2-77947, 33-13902, 33-36746, 33-40161, 33-43713 and 33-50398 on Form S-8 of Tambrands Inc. of our reports dated January 24, 1995, relating to the consolidated balance sheets of Tambrands Inc. and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of earnings, retained earnings and cash flows for each of the years in the three- year period ended December 31, 1994, and all related schedules, which reports appear in the December 31, 1994 annual report on Form 10-K of Tambrands Inc. Our reports refer to a change in accounting for postemployment benefits in 1993 and for postretirement benefits in 1992. KPMG PEAT MARWICK LLP Stamford, Connecticut March 30, 1995 EX-24 13 POWERS OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/LILYAN H. AFFINITO --------------------- Lilyan H. Affinito Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/PAUL S. DOHERTY ------------------ Paul S. Doherty Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/FLOYD HALL ------------- Floyd Hall Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/ROBERT P. KILEY ------------------ Robert P. Kiley Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/JOHN LOUDON -------------- John Loudon Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/RUTH M. MANTON ----------------- Ruth M. Manton Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/JOHN A. MEYERS ----------------- John A. Meyers Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/H. L. TOWER -------------- H. L. Tower Dated: March 14, 1995 POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby make, constitute and appoint Howard B. Wentz, Jr. and Edward T. Fogarty, and each of them, with full power to act without the other, the true and lawful attorney of the undersigned, in the name, place and stead of the undersigned to execute on behalf of the undersigned, as Director of Tambrands Inc., the Annual Report on Form 10-K for the year ended December 31, 1994 of Tambrands Inc., and any and all amendments thereto, to be filed with the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934, as amended ("Act"), and any and all other instruments which either of said attorneys deems necessary or advisable to enable Tambrands Inc. to comply with the Act, the rules, regulations and requirements of the SEC in respect thereof, and the securities or Blue Sky laws of any State or other governmental subdivision, giving and granting to each of said attorneys full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as the undersigned might or would do if personally present at the doing thereof, with full power of substitution and revocation, thereby ratifying and confirming all that said attorneys or substitutes may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto executed this power of attorney on the date indicated below. /s/ROBERT M. WILLIAMS --------------------- Robert M. Williams Dated: March 14, 1995 EX-27 14 ARTICLE 5 F.D.S.
5 1,000 12-MOS DEC-31-1994 JAN-01-1994 DEC-31-1994 13,876 0 82,049 (1,456) 37,957 177,136 314,457 (120,142) 379,075 203,160 59,983 10,887 0 0 71,127 379,075 644,513 644,513 206,111 206,111 0 93 7,645 141,751 52,022 89,729 0 0 0 89,729 2.43 2.43