Form 8-K
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 of 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported): March
21, 2006
PRESTIGE
BRANDS HOLDINGS, INC.
(Exact
name of registrant as specified in charter)
Delaware
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001-32433
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20-1297589
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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90
North Broadway, Irvington, New York 10533
(Address
of Principal executive offices, including Zip Code)
(914)
524-6810
(Registrant’s
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
Item
1.01. Entry
into a Material Definitive Agreement.
Agreement
with Peter C. Mann
On
March
21, 2006, Prestige Brands Holdings, Inc. (the “Company”) and Prestige Brands,
Inc. (“Prestige Brands”) entered into a Senior Management Agreement (the
“Agreement”) with Peter C. Mann, effective as of March 1, 2006. Pursuant to the
Agreement, Mr. Mann will continue to serve as Chief Executive Officer, Director
and Chairman of the Board of Directors of the Company through March 31, 2006.
On
April 1, 2006, he will relinquish his position as Chief Executive Officer,
but
will continue to serve as a director and Chairman of the Board of Directors.
The
Agreement supersedes the Amended and Restated Senior Management Agreement,
effective as of February 4, 2005, among Prestige International Holdings, LLC
(“Prestige International”), the Company, Prestige Brands and Mr. Mann. The
principal terms of the Agreement are summarized below.
Term. The
Agreement is effective as of March 1, 2006, and Mr. Mann's term of employment
expires March 31, 2007, unless extended by the mutual agreement of the parties
or terminated early.
Base
Salary. From
March 1, 2006 until March 31, 2006, the Company will pay Mr. Mann an annual
base
salary of $442,000. Commencing April 1, 2006, Mr. Mann's annual base salary
will
be $225,000. The Board of Directors and Compensation Committee of the Company
shall review the annual base salary of Mr. Mann and may increase it or decrease
it as merited.
Bonus
Eligibility. Mr.
Mann
is eligible for a bonus for the fiscal year beginning April 1, 2006. His target
bonus percentage shall be 75% of annual base salary, with a maximum potential
bonus payment of 150% of annual base salary, based on such subjective and
objective criteria as the Board of Directors, in conjunction with the
Compensation Committee, of the Company shall from time to time
adopt.
Vesting
of Shares.
Under
the terms of the Agreement, as of March 1, 2006, 140,686 shares of previously
unvested common stock in the Company held by Mr. Mann vested. If Mr. Mann
remains continuously employed with the Company, Prestige Brands or any of their
respective subsidiaries until March 1, 2007, an additional 140,686 shares of
Mr.
Mann's unvested common stock will vest. If his employment is terminated after
March 1, 2006 but prior to March 1, 2007, any unvested shares of common stock
held by Mr. Mann shall become vested on a straight-line pro rata basis,
according to the number of days elapsed since March 1, 2006, as compared to
the
number of days remaining until March 1, 2007.
Repurchase
Rights.
The
Company has the right to repurchase all or any portion of Mr. Mann's unvested
shares of common stock should his employment with the Company, Prestige Brands
or any of their respective subsidiaries cease, for a purchase price equal to
the
lesser of (i) original cost of the unvested shares to Mr. Mann and (ii) the
fair
market value of the unvested shares of common stock on the date the Company
gives notice of repurchase.
Restrictive
Covenants.
The
Agreement imposes customary restrictive covenants prohibiting Mr. Mann's
disclosure of confidential information. Mr. Mann assigns all work product and
intellectual property accumulated while employed by the Company to the Company,
Prestige Brands or any of their respective subsidiaries, and he agrees not
to
compete with the Company, Prestige Brands or any of their respective
subsidiaries for the period ending February 6, 2010.
Agreement
with Frank P. Palantoni
On
March
21, 2006, the Board of Directors of the Company approved the following
compensatory arrangement for Frank P. Palantoni as of April 1, 2006, at which
time Mr. Palantoni will become Chief Executive Officer and President of the
Company. Effective April 1, 2006, Mr. Palantoni will receive an annual salary
of
$400,000 and a target bonus of 75% of his base salary for the fiscal year
beginning April 1, 2006. Additionally, effective July 1, 2006 Mr. Palantoni
shall be awarded a grant of restricted stock in the aggregate amount of
$525,000. The actual number of shares of restricted stock shall be calculated
by
dividing such amount by the closing share price of the Company on July 1, 2006.
This
compensatory arrangement serves as an amendment to the Executive Employment
Agreement (“Employment Agreement”) with Mr. Palantoni made as of August 4, 2005.
In addition to the terms set forth above, the Employment Agreement provides
for
an initial grant of $400,000 worth of restricted stock (subject to vesting
based
upon certain earnings per share and revenue targets established by the
Compensation Committee), and an initial stock option grant to purchase $800,000
worth of common stock at $12.95 per share which vests in five equal annual
installments beginning on August 4, 2006. A copy of Mr. Palantoni’s Employment
Agreement was filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K
filed with the Securities and Exchange Commission on August 9, 2005.
Item
1.02. Termination
of a Material Definitive Agreement.
Effective
as of March 1, 2006, the Amended and Restated Senior Management Agreement among
Prestige International, the Company, Prestige Brands and Peter C. Mann was
superseded by the Agreement discussed in Item 1.01 of this Current Report on
Form 8-K. Under the terms of the Amended and Restated Senior Management
Agreement, Mr. Mann served as Chief Executive Officer for a base salary of
$425,000 per annum and certain other benefits. Mr. Mann also was granted shares
of restricted common stock in the Company which was subject to
vesting.
Item
5.02.
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Departure
of Directors or Principal Officers; Election of Directors; Appointment
of
Principal Officers.
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On
March
21, 2006, the Company’s Board of Directors adopted resolutions providing for the
following changes in executive officers to occur on April 1, 2006:
· |
Frank
P. Palantoni will relinquish his position as Chief Operating Officer
of
the Company and will become Chief Executive Officer of the Company.
He
will retain his position as President of the Company and will remain
a
member of the Board of Directors.
|
· |
Peter
C. Mann will relinquish his position as Chief Executive Officer of
the
Company. He will remain Chairman of the Board of
Directors.
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Mr.
Palantoni, age 48, has served as President and Chief Operating Officer of the
Company since August 2005 and as member of the Board of Directors since January
2006. He has 22 years of experience with Fortune 100 companies in a variety
of
consumer goods industries and financial services. Mr. Palantoni was the
President and CEO, Worldwide of Gerber Products Division, Novartis Infant and
Baby Division from 2001 to August 2005. He held positions of increasing
responsibility, including CEO of Novartis Consumer Health, North America, at
Novartis Corporation from 1998 to 2001. Mr. Palantoni also held leading
management positions at Groupe Danone and RJR Nabisco, Inc.
The
material terms of Mr. Palantoni’s employment arrangement with the Company are
set forth in Item 1.01 of this Current Report on Form 8-K.
Item
7.01. Regulation
FD Disclosure.
On
March
21, 2006, the Company released to media outlets a statement that is provided
as
Exhibit 99.2 to this current report, which is herein incorporated by reference.
Item
9.01. Financial
Statements and Exhibits.
99.1 Senior
Management Agreement dated as of March 21, 2006, between Prestige Brands
Holdings, Inc., Prestige Brands, Inc. and Peter C. Mann.
99.2
Press
Release dated March 21, 2006.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated:
March 23, 2006
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PRESTIGE
BRANDS HOLDINGS, INC.
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By:
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/s/
Peter J. Anderson
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Name:
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Peter
J. Anderson
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Title:
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Chief
Financial Officer
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