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Exhibit 10.14
FORM OF EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into on
this ___ day of ___________, 1998, effective as of July 1, 1998, by and between
Prestige Cosmetics Corporation, a Florida corporation (the "Company"), and XXXX
XXXXXX (hereinafter called the "Executive").
R E C I T A L S
A. The Executive is currently employed as the Chief Financial Officer
of the Company.
B. The Executive possesses intimate knowledge of the business and
affairs of the Company, its policies, methods and personnel.
C. The Board of Directors of the Company (the "Board") recognizes that
the Executive has contributed to the growth and success of the Company, and
desires to assure the Company of the Executive's continued employment and to
compensate him therefor.
D. The Board has determined that this Agreement will reinforce and
encourage the Executive's continued attention and dedication to the Company.
E. The Executive is willing to make his services available to the
Company and on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. Employment.
1.1 Employment and Term. The Company hereby agrees to employ
the Executive and the Executive hereby agrees to serve the Company on the terms
and conditions set forth herein.
1.2 Duties of Executive. During the term of this Agreement,
the Executive shall serve as the Chief Financial Officer of the Company, shall
diligently perform all services as may be assigned to him by the Board (provided
that such services shall not materially differ from the services currently
provided by the Executive), and shall exercise such power and authority as may
from time to time be delegated to him by the Board. The Executive shall devote
his full time and attention to the business and affairs of the Company, render
such services to the best of his ability, and use his best efforts to promote
the interests of the Company.
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2. Term.
2.1 Initial Term. The initial term of this Agreement, and the
employment of the Executive hereunder, shall commence on July 1, 1998 (the
"Commencement Date") and shall expire on June 30, 2001 unless sooner terminated
in accordance with the terms and conditions hereof (the "Initial Term").
2.2 Renewal Terms. Unless written notice stating otherwise is
received by the Company or the Executive within three months prior to the
Expiration Date (as described in Section 2.3), this Agreement shall
automatically renew for successive one-year terms.
2.3 Expiration Date. The date on which the term of this
Agreement shall expire (including the date on which any renewal term shall
expire), is sometimes referred to in this Agreement as the Expiration Date.
2.4 Effectiveness Conditioned upon Initial Public Offering.
This Agreement is subject to and contingent upon the Company consummating an
initial public offering of the Company's Common Stock pursuant to a Registration
Statement filed under the Securities Act of 1933, as amended (the "IPO"), on or
before December 31, 1998. In the event that the IPO does not occur on or before
December 31, 1998, then this Agreement shall be null and void ab initio.
3. Compensation.
3.1 Base Salary. The Executive shall receive a base salary at
the annual rate of $150,000 (the "Base Salary") during the term of this
Agreement, with such Base Salary payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes. The Base Salary shall be reviewed, at least annually, for merit increases
and may, by action and in the discretion of the Compensation Committee or the
Board, be increased at any time or from time to time.
3.2 Bonuses. Bonuses may be awarded in the discretion of the
Board of Directors or the Compensation Committee of the Company.
4. Expense Reimbursement and Other Benefits.
4.1 Reimbursement of Expenses. During the term of the
Executive's employment hereunder, upon the submission of proper substantiation
by the Executive, and subject to such rules and guidelines as the Company may
from time to time adopt, the Company shall reimburse the Executive for all
reasonable expenses actually paid or incurred by the Executive in the course of
and pursuant to the business of the Company. The Executive shall account to the
Company in writing for all expenses for which reimbursement is sought and shall
supply to the Company copies of all relevant invoices, receipts or other
evidence reasonably requested by the Company.
4.2 Compensation/Benefit Programs. During the term of this
Agreement, the Executive shall be entitled to participate in all medical,
dental, hospitalization, accidental death and dismemberment, disability, travel
and life insurance plans, and any and all other plans as are
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presently and hereinafter offered by the Company to its executives, including
savings, pension, profit-sharing and deferred compensation plans, subject to the
general eligibility and participation provisions set forth in such plans and to
the applicable statutes and regulations governing such plans.
4.3 Working Facilities. The Company shall furnish the
Executive with an office, secretarial help and such other facilities and
services suitable to his position and adequate for the performance of his duties
hereunder.
4.4 Automobile. The Company shall continue to provide the
Executive with an automobile comparable to the existing automobile provided by
the Company to Executive, together with reimbursement of the reasonable
operating expenses thereof.
4.5 Stock Options. Effective as of the date on which the IPO
occurs, the Executive shall be granted nonqualified options (the "Stock
Options") to purchase 50,000 shares of the Company's common stock ("Common
Stock") at an exercise price per share equal to the IPO price, pursuant to (and
therefore subject to all terms and conditions of) the Company's 1998 Executive
Incentive Compensation Plan (the "Executive Plan"). In addition, during the term
of this Agreement, the Executive shall be eligible for additional Stock Options
to purchase Common Stock of the Company under (and therefore subject to all
terms and conditions of) the Company's Executive Plan and any successor plan
thereto, and all rules of regulation of the Securities and Exchange Commission
applicable to such plans then in effect. The number of additional Stock Options
and terms and conditions of the additional Stock Options shall be determined by
the Committee appointed pursuant to the Executive Plan, or by the Board, in its
discretion and pursuant to the Executive Plan.
4.6 Other Benefits. The Executive shall be entitled to up to
four (4) weeks of vacation each calendar year during the term of this Agreement,
to be taken at such times as the Executive and the Company shall mutually
determine and provided that no vacation time shall interfere with the duties
required to be rendered by the Executive hereunder. Any vacation time not taken
by Executive during any calendar year may not be carried forward into any
succeeding calendar year. The Executive shall receive such additional benefits,
if any, as the Board of the Company shall from time to time determine.
5. Termination.
5.1 Termination for Cause. The Company shall at all times have
the right, upon written notice to the Executive, to terminate the Executive's
employment hereunder, for Cause. For purposes of this Agreement, the term
"Cause" shall mean (i) an action or omission of the Executive which constitutes
a willful and material breach of this Agreement which is not cured within sixty
(60) days after receipt by the Executive of written notice of same, (ii) fraud,
embezzlement, misappropriation of funds or breach of trust in connection with
his services hereunder, (iii) conviction of any crime which involves dishonesty
or a breach of trust, (iv) gross negligence in connection with the performance
of the Executive's duties hereunder, or (v) the material and willful or knowing
failure or refusal (other than as a result of a disability) by the Executive to
perform his duties hereunder. Any termination for Cause shall be made in writing
to
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the Executive, which notice shall set forth in detail all acts or omissions upon
which the Company is relying for such termination. The Executive shall have the
right to address the Board regarding the acts set forth in the notice of
termination. Upon any termination pursuant to this Section 5.1, the Company
shall (i) pay to the Executive his Base Salary to the date of termination and
(ii) pay to the Executive any bonuses awarded to the Executive pursuant to
Section 3.2 that have not been paid on or before the date of the termination of
the Executive's employment with the Company.
5.2 Disability. The Company shall at all times have the right,
upon written notice to the Executive, to terminate the Executive's employment
hereunder, if the Executive shall become entitled to benefits under the
disability insurance policy the Company maintains on behalf of such executive
pursuant to Subsection 4.6(c) hereof as then in effect, or, if the Executive
shall as the result of mental or physical incapacity, illness or disability,
become unable to perform his obligations hereunder for a period of 180 days in
any 12-month period. The Company shall have sole discretion based upon competent
medical advice to determine whether the Executive continues to be disabled. Upon
any termination pursuant to this Section 5.2, the Company shall (i) pay to the
Executive any unpaid Base Salary through the effective date of termination
specified in such notice, (ii) pay to the Executive any bonuses awarded to the
Executive pursuant to Section 3.2 that have not been paid on or before the date
of the termination of the Executive's employment with the Company, and (iii)
continue to pay the Executive for a period of twelve (12) months following an
amount equal to the excess, if any, of (A) the Base Salary he was receiving at
the time of his Disability, over (B) any benefits the Executive is entitled to
receive during such period under any disability insurance policies provided to
the Executive by the Company, such amount to be paid in the manner and at such
times as the Base Salary otherwise would have been payable to the Executive. The
Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however to the provisions of Section 4.1, and (y) payment
of compensation for unused vacation days that have accumulated during the
calendar year in which such termination occurs).
5.3 Death. In the event of the death of the Executive during
the term of his employment hereunder, the Company shall (i) pay to the estate of
the deceased Executive any unpaid Base Salary through the Executive's date of
death, and (ii) pay to the estate of the deceased Executive any bonuses awarded
to the Executive pursuant to Section 3.2 that have not been paid on or before
the date of the termination of the Executive's employment with the Company. The
Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of the
Executive's death, subject, however to the provisions of Section 4.1, and (y)
payment of compensation for unused vacation days that have accumulated during
the calendar year in which such termination occurs).
5.4 Termination Without Cause. At any time the Company shall
have the right to terminate the Executive's employment hereunder by written
notice to the Executive. Upon any termination pursuant to this Section 5.4 (that
is not a termination under any of Sections 5.1, 5.2, 5.3, 5.5 or 5.6), the
Company shall (i) pay to the Executive any unpaid Base Salary through the
effective date of termination specified in such notice, (ii) pay to the
Executive any bonuses awarded to the Executive pursuant to Section 3.2 that have
not been paid on or before the date of
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the termination of the Executive's employment with the Company, (iii) continue
to pay the Executive's Base Salary for a period of twelve (12) months following
the effective date of the Executive's termination of employment with the
Company, (iv) pay to the Executive a bonus equal to the bonus awarded to the
Executive in the fiscal year of the Company that ended immediately prior to the
effective date of the termination of the Executive's employment with the
Company, payable within 45 days after the last day of the Company's fiscal year
in which such termination occurs, (v) continue to provide the Executive, for a
period of twelve (12) months following the effective date of the Executive's
termination of employment with the Company, with the benefits he was receiving
under Sections 4.2 and 4.4 hereof (the "Benefits") in the manner and at such
times as the compensation or Benefits otherwise would have been payable or
provided to the Executive, and (vi) pay to the Executive as a single lump sum
payment, within 30 days of the termination of his employment hereunder, a lump
sum benefit equal to the value of the portion of his benefits under any savings,
pension, profit sharing or deferred compensation plans that are forfeited under
such plans by reason of the termination of his employment hereunder prior to the
Expiration Date. In the event that the Company is unable to provide the
Executive with any Benefits required hereunder by reason of the termination of
the Executive's employment pursuant to this Section 5.4, then the Company shall
pay the Executive cash equal to the value of the Benefit that otherwise would
have accrued for the Executive's benefit under the plan, for the period during
which such Benefits could not be provided under the plans, said cash payments to
be made within 45 days after the end of the year for which such contributions
would have been made or would have accrued. The Company's good faith
determination of the amount that would have been contributed or the value of any
Benefits that would have accrued under any plan shall be binding and conclusive
on the Executive. For this purpose, the Company may use as the value of any
Benefit the cost to the Company of providing that Benefit to the Executive.
Further, the Executive shall continue to vest in the Executive's Stock Options
through the Expiration Date in the same manner and to the same extent as if his
employment hereunder terminated on the Expiration Date. The Company shall have
no further liability hereunder (other than for (x) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs).
5.5 Termination by Executive.
a. The Executive shall at all times have the right,
upon sixty (60) days written notice to the Company, to terminate the Executive's
employment hereunder.
b. Upon any termination pursuant to this Section 5.5
by the Executive without Good Reason, the Company shall (i) pay to the Executive
any unpaid Base Salary through the effective date of termination specified in
such notice and (ii) pay to the Executive any bonuses awarded to the Executive
pursuant to Section 3.2 that have not been paid on or before the date of the
termination of the Executive's employment with the Company. The Company shall
have no further liability hereunder (other than for (x) reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1, and (y) payment of compensation for
unused vacation days that have accumulated during the calendar year in which
such termination occurs.
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c. Upon any termination pursuant to this Section 5.5
by the Executive for Good Reason, the Company shall pay to the Executive the
same amounts that would have been payable by the Company to the Executive under
Section 5.4 of this Agreement if the Executive's employment had been terminated
by the Company without Cause. The Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 4.1, and (y) payment of compensation for unused vacation days that
have accumulated during the calendar year in which such termination occurs).
d. For purposes of this Agreement, "Good Reason"
shall mean (i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 1.2 of this Agreement, or any other action by the Company which
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive; (ii) any failure by the Company to
comply with any of the provisions of Section 3 of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive; (iii) the Company's requiring the Executive to be based at any
office or location more than fifty (50) miles outside of City limits of
Deerfield Beach, except for travel reasonably required in the performance of the
Executive's responsibilities; (iv) any purported termination by the Company of
the Executive's employment otherwise than for Cause pursuant to Section 5.1, or
by reason of the Executive's death pursuant to Section 5.1, or Disability
pursuant to Section 5.2, of this Agreement prior to the Expiration Date.
5.6 Change in Control of the Company.
a. In the event that (i) a Change in Control (as
defined in paragraph (b) of this Section 5.6) in the Company shall occur prior
to the Expiration Date, and (ii) either (A) prior to the earlier of the
Expiration Date and one year after the date of the Change in Control, either (x)
the Executive's employment with the Company is terminated by the Company without
Cause, as defined in Section 5.1 (and other than pursuant to Section 5.2 by
reason of the Executive's disability or Section 5.3 by reason of the Executive's
death) or (y) the Executive terminates his employment with the Company for Good
Reason, as defined in Section 5.5(d) hereof, or (B) within the thirty (30) day
period beginning one year after the date of the Change in Control, the
Executives terminates his employment with the Company for any reason, then
subject to the limitations specified in paragraph c of this Section 5.6, the
Company shall pay to the Executive those amounts Executive would be entitled to
under Section 5.4 hereof as if his employment was terminated without Cause.
Further, upon the Change in Control, any stock options granted to the Executive
by the Company that were outstanding as of the date of the Change in Control
shall become immediately exercisable. The Company shall have no further
liability hereunder (other than for (1) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1, and (2) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs).
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b. For purposes of this Agreement, the term "Change
in Control" shall mean:
(i) Approval by the shareholders of the
Company of (x) a reorganization, merger, consolidation or other form of
corporate transaction or series of transactions, other than a public offering of
the Company's securities, in each case, with respect to which persons who were
the shareholders of the Company immediately prior to such reorganization, merger
or consolidation or other transaction do not, immediately thereafter, own more
than 50% of the combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company's then
outstanding voting securities, or (y) a liquidation or dissolution of the
Company or (z) the sale of all or substantially all of the assets of the Company
(unless such reorganization, merger, consolidation or other corporate
transaction, liquidation, dissolution or sale is subsequently abandoned);
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Securities Exchange Act) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) the acquisition (other than from the
Company) by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than 50% of either
the then outstanding shares of the Company's Common Stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally in the election of directors (hereinafter referred to as the ownership
of a "Controlling Interest") excluding, for this purpose, any acquisitions by
(1) the Company or its Subsidiaries, (2) any person, entity or "group" that as
of the date hereof owns beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act) of a Controlling Interest or (3)
any employee benefit plan of the Company or its Subsidiaries.
c. The payments otherwise required under paragraph a
of this Section 5.6 shall be subject to the following:
(i) Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution by the Company 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 (a "Payment"), would be nondeductible by the Company for
Federal income tax purposes because of Section 280G of the Code, then the
aggregate present value of amounts payable or distributable to or for the
benefit of the Executive pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred to
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as "Agreement Payments") shall be reduced to the Reduced Amount. The "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment to be
nondeductible by the Company because of Section 280G of the Code. Anything to
the contrary notwithstanding, if the Reduced Amount is zero and it is determined
further that any Payment which is not an Agreement Payment would nevertheless be
nondeductible by the Company for Federal income tax purposes because of Section
280G of the Code, then the aggregate present value of Payments which are not
Agreement Payments shall also be reduced (but not below zero) to an amount
expressed in present value which maximizes the aggregate present value of
Payments without causing any Payment to be nondeductible by the Company because
of Section 280G of the Code. For purposes of this Section 5.6(c) present value
shall be determined in accordance with Section 280G(d)(4) of the Code.
(ii) All determinations required to be made
under this Section 5.6(c) shall be made by Xxxxxx Xxxxxxxx LLP or, at the
Executive's option, any other nationally or regionally recognized firm of
independent public accountants selected by the Executive and approved by the
Company, which approval shall not be unreasonably withheld or delayed (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Executive within twenty (20) business days of the Date of
Termination or such earlier time as is requested by the Company and an opinion
to the Executive that he has substantial authority not to report any excise tax
on his Federal income tax return with respect to any Payments. Any such
determination by the Accounting Firm shall be binding upon the Company and the
Executive. The Executive shall determine which and how much of the Payments
shall be eliminated or reduced consistent with the requirements of this Section
5.6(c), provided that, if the Executive does not make such determination within
ten business days of the receipt of the calculations made by the Accounting
Firm, the Company shall elect which and how much of the Payments shall be
eliminated or reduced consistent with the requirements of this Section 5.6(c)
and shall notify the Executive promptly of such election. Within five business
days thereafter, the Company shall pay to or distribute to or for the benefit of
the Executive such amounts as are then due to the Executive under this
Agreement. All fees and expenses of the Accounting Firm incurred in connection
with the determinations contemplated by this Section 5.6(c) shall be borne by
the Company.
(iii) As a result of the uncertainty in the
application of Section 280G of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Payments will have been
made by the Company which should not have been made ("Overpayment") or that
additional Payments which will not have been made by the Company could have been
made ("Underpayment"), in each case, consistent with the calculations required
to be made hereunder. In the event that the Accounting Firm, based upon the
assertion of a deficiency by the Internal Revenue Service against the Executive
which the Accounting Firm believes has a high probability of success, determines
that an Overpayment has been made, any such Overpayment paid or distributed by
the Company 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 Company 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
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and no amount shall be payable by the Employee to the Company if and to the
extent such deemed loan and payment would not either reduce the amount on which
the Executive is subject to tax under Section 1 and Section 4999 of the Code 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
Company 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.
5.7 Resignation. Upon any termination of employment pursuant
to this Section 5, the Executive shall be deemed to have resigned as an officer,
and if he or she was then serving as a director of the Company, as a director,
and if required by the Board, the Executive hereby agrees to immediately execute
a resignation letter to the Board.
5.8 Survival. The provisions of this Section 5 shall survive
the termination of this Agreement, as applicable.
6. Restrictive Covenants.
6.1 Non-competition. At all times while the Executive is
employed by the Company and for a one (1) year period after the termination of
the Executive's employment with the Company for any reason, the Executive shall
not, directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any other person or
entity (whether as an employee, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in competition with the Company; provided
that such provision shall not apply to the Executive's ownership of Common Stock
of the Company or the acquisition by the Executive, solely as an investment, of
securities of any issuer that is registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and that are listed or admitted for
trading on any United States national securities exchange or that are quoted on
the National Association of Securities Dealers Automated Quotations System, or
any similar system or automated dissemination of quotations of securities prices
in common use, so long as the Executive does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control or, more than five percent of any class of capital stock of such
corporation. Notwithstanding the foregoing, if either (i) the Company delivers a
written notice to the Executive pursuant to Section 2.2 hereof of its intention
not to renew the term of this Agreement for reasons other than Cause (as defined
in Section 5.1 hereof), or (ii) the Executive's employment is terminated by the
Company without Cause pursuant to Section 5.4 of this Agreement, and within 90
days of such termination the Executive agrees to waive his right to receive a
continuation of Base Salary, the bonus, Benefits, and the lump sum payment,
otherwise payable to him under clauses (iii), (iv), (v) and (vi) of Section 5.4,
by providing the Company a written waiver (the "Waiver") of such right, in such
form as the Company reasonably may require, then the Executive shall cease to be
subject to the provisions of this Section 6.1 immediately upon the Expiration
Date or upon delivery of the Waiver by the Executive to the Company, as
applicable.
6.2 Nondisclosure. The Executive shall not at any time
divulge, communicate, use to the detriment of the Company or for the benefit of
any other person or persons, or misuse
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in any way, any Confidential Information (as hereinafter defined) pertaining to
the business of the Company. Any Confidential Information or data now or
hereafter acquired by the Executive with respect to the business of the Company
(which shall include, but not be limited to, information concerning the
Company's financial condition, prospects, technology, customers, suppliers,
sources of leads and methods of doing business) shall be deemed a valuable,
special and unique asset of the Company that is received by the Executive in
confidence and as a fiduciary, and Executive shall remain a fiduciary to the
Company with respect to all of such information. For purposes of this Agreement,
"Confidential Information" means information disclosed to the Executive or known
by the Executive as a consequence of or through his employment by the Company
(including information conceived, originated, discovered or developed by the
Executive) prior to or after the date hereof, and not generally known, about the
Company or its business. Notwithstanding the foregoing, nothing herein shall be
deemed to restrict the Executive from disclosing Confidential Information to the
extent required by law.
6.3 Nonsolicitation of Employees and Clients. At all times
while the Executive is employed by the Company and for a two (2) year period
after the termination of the Executive's employment with the Company for any
reason, the Executive shall not, directly or indirectly, for himself or for any
other person, firm, corporation, partnership, association or other entity (a)
employ or attempt to employ or enter into any contractual arrangement with any
employee or former employee of the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six
months, (b) call on or solicit any of the actual or targeted prospective clients
of the Company on behalf of any person or entity in connection with any business
competitive with the business of the Company, and (c) make known the names and
addresses of such clients or any information relating in any manner to the
Company's trade or business relationships with such customers, other than in
connection with the performance of Executive's duties under this Agreement.
6.4 Ownership of Developments. All copyrights, patents, trade
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company or its
clients (collectively, the "Work Product") shall belong exclusively to the
Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product. Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.
6.5 Books and Records. All books, records, and accounts
relating in any manner to the customers or clients of the Company, whether
prepared by the Executive or otherwise coming into the Executive's possession,
shall be the exclusive property of the Company and shall be returned immediately
to the Company on termination of the Executive's employment hereunder or on the
Company's request at any time.
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6.6 Definition of Company. Solely for purposes of this Section
6, the term "Company" also shall include any existing or future subsidiaries of
the Company that are operating during the time periods described herein and any
other entities that directly or indirectly, through one or more intermediaries,
control, are controlled by or are under common control with the Company during
the periods described herein.
6.7 Acknowledgment by Executive. The Executive acknowledges
and confirms that (a) the restrictive covenants contained in this Section 6 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Section 6 (including without
limitation the length of the term of the provisions of this Section 6) are not
overbroad, overlong, or unfair and are not the result of overreaching, duress or
coercion of any kind. The Executive further acknowledges and confirms that his
full, uninhibited and faithful observance of each of the covenants contained in
this Section 6 will not cause him any undue hardship, financial or otherwise,
and that enforcement of each of the covenants contained herein will not impair
his ability to obtain employment commensurate with his abilities and on terms
fully acceptable to him or otherwise to obtain income required for the
comfortable support of him and his family and the satisfaction of the needs of
his creditors. The Executive further acknowledges and confirms that his special
knowledge of the business of the Company is such as would cause the Company
serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the
terms of this Section 6. The Executive further acknowledges that the
restrictions contained in this Section 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.
6.8 Reformation by Court. In the event that a court of
competent jurisdiction shall determine that any provision of this Section 6 is
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Section 6 within the
jurisdiction of such court, such provision shall be interpreted and enforced as
if it provided for the maximum restriction permitted under such governing law.
6.9 Extension of Time. If the Executive shall be in violation
of any provision of this Section 6, then each time limitation set forth in this
Section 6 shall be extended for a period of time equal to the period of time
during which such violation or violations occur. If the Company seeks injunctive
relief from such violation in any court, then the covenants set forth in this
Section 6 shall be extended for a period of time equal to the pendency of such
proceeding including all appeals by the Executive.
6.10 Survival. Except to the extent otherwise provided in
Section 6.1 hereof, the provisions of this Section 6 shall survive the
termination of this Agreement, as applicable.
7. Mediation. In the event a dispute arises out of or relates to this
Agreement, or the breach thereof, and if the dispute cannot be settled through
negotiation, the parties hereby agree first to attempt in good faith to settle
the dispute by mediation administered by the American Arbitration Association
under its Employment Mediation Rules before resorting to litigation or some
other dispute resolution procedure.
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8. Section 162(m) Limits. Notwithstanding any other provision of this
Agreement to the contrary, if and to the extent that any remuneration payable by
the Company to the Executive for any year would exceed the maximum amount of
remuneration that the Company may deduct for that year under Section 162(m)
("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the
"Code"), payment of the portion of the remuneration for that year that would not
be so deductible under Section 162(m) shall, in the sole discretion of the
Board, be deferred and become payable at such time or times as the Board
determines that it first would be deductible by the Company under Section
162(m), with interest at the "short-term applicable rate" as such term is
defined in Section 1274(d) of the Code. The limitation set forth under this
Section 8 shall not apply with respect to any amounts payable to the Executive
pursuant to Section 5 hereof.
9. Assignment. Neither party shall have the right to assign or delegate
his rights or obligations hereunder, or any portion thereof, to any other
person.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, upon
its effectiveness, shall supersede all prior agreements, understandings and
arrangements, both oral and written, between the Executive and the Company (or
any of its affiliates) with respect to such subject matter. This Agreement may
not be modified in any way unless by a written instrument signed by both the
Company and the Executive.
12. Notices: All notices required or permitted to be given hereunder
shall be in writing and shall be personally delivered by courier, sent by
registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as evidenced
by the return receipt thereof, or three (3) days after deposit in the U.S. mail.
Notice shall be sent (i) if to the Company, addressed to Prestige Cosmetics
Corporation, 0000 Xxxx Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000,
Attention: President, with a copy to Xxxx Xxxxxxx, Esq., Xxxxxxxxx Traurig,
P.A., 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, and (ii) if to the
Executive, to his address as reflected on the payroll records of the Company, or
to such other address as either party hereto may from time to time give notice
of to the other.
13. Benefits; Binding Effect. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns, including, without limitation, any successor to the Company, whether by
merger, consolidation, sale of stock, sale of assets or otherwise.
14. Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses
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or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.
15. Waivers. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
16. Damages. Nothing contained herein shall be construed to prevent the
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.
17. Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.
19. Indemnification.
a. Subject to limitations imposed by law, the Company
shall indemnify and hold harmless the Executive to the fullest extent permitted
by law from and against any and all claims, damages, expenses (including
attorneys' fees), judgments, penalties, fines, settlements, and all other
liabilities incurred or paid by him in connection with the investigation,
defense, prosecution, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which the Executive was or is a party or is threatened to be
made a party by reason of the fact that the Executive is or was an officer,
employee or agent of the Company, or by reason of anything done or not done by
the Executive in any such capacity or capacities, provided that the Executive
acted in good faith, in a manner that was not grossly negligent or constituted
willful misconduct and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The Company also shall pay any and all reasonable expenses (including
attorney's fees) incurred by the Executive as a result of the Executive being
called as a witness in connection with any matter involving the Company and/or
any of its officers or directors.
b. The Company shall pay any reasonable expenses
(including attorneys' fees), judgments, penalties, fines, settlements, and other
liabilities incurred by the
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Executive in investigating, defending, settling or appealing any action, suit or
proceeding described in this Section 19 in advance of the final disposition of
such action, suit or proceeding. The Company shall promptly pay the amount of
such expenses to the Executive, but in no event later than 10 days following the
Executive's delivery to the Company of a written request for an advance pursuant
to this Section 19, together with a reasonable accounting of such expenses.
c. The Executive hereby undertakes and agrees to
repay to the Company any advances made pursuant to this Section 19 if and to the
extent that it shall ultimately be found that the Executive is not entitled to
be indemnified by the Company for such amounts.
d. The Company shall make the advances contemplated
by this Section 19 regardless of the Executive's financial ability to make
repayment, and regardless whether indemnification of the Executive by the
Company will ultimately be required. Any advances and undertakings to repay
pursuant to this Section 19 shall be unsecured and interest-free.
e. The provisions of this Section 19 shall survive
the termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY:
PRESTIGE COSMETICS CORPORATION
By
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Name:
Title:
EXECUTIVE:
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XXXX XXXXXX
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