Exhibit 10.19
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, made as of May 2,
2005 (this "Agreement"), by and between Castle Brands Inc., a Delaware
corporation, its subsidiaries and affiliates (the "Company"), and T. Xxxxxx
Xxxxxxxx (the "Executive"), an individual residing at 000 Xxxxxx Xxxxx, Xxxxx
Xxxx, XX 00000;
In consideration of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:
AGREEMENT:
1. Employment. Subject to the terms of this Agreement, the Company
agrees to continue to employ Executive, and Executive agrees to accept such
continued employment, as Senior Vice President - U.S. Sales of the Company and
its domestic subsidiary, Castle Brands (USA) Corp. ("CBC"). As such, Executive
will have responsibility for such job-related duties as were being performed by
the Executive for the Company and CBC on the date hereof and as will be assigned
to Executive from time to time by the Chief Operating Officer and President of
the Company.
2. Performance of Services. Executive accepts such employment and
agrees that throughout the term of his employment hereunder, he will devote his
full business time, attention, knowledge and skills, faithfully, diligently and
to the best of his ability, in furtherance of the business of the Company and
CBC and will perform the duties assigned to him from time to time pursuant to
Section 1 hereof, subject, at all times, to the direction and control of the
Chief Operating Officer and President of the Company, and to the policies of the
Company and CBC generally applicable to its executives. During the term of his
employment hereunder, Executive will not accept other employment or permit his
personal business interests to interfere with his duties hereunder.
3. Term. Executive will be employed for a term commencing on the
date hereof and ending on May 1, 2010 (the "Term"), unless his employment is
terminated prior to the expiration of the Term pursuant to Section 6 hereof.
4. Compensation. During the Term of this Agreement the Company
agrees to pay to Executive:
(a) Salary. Effective August 1, 2005, a salary (the "Base
Salary") at the rate of $175,000 per year, payable in accordance with the
Company's standard payroll practices as in effect from time to time. Such Base
Salary may be increased (but not decreased) on the basis of periodic reviews, in
the sole discretion of the Compensation Committee of the Board of Directors of
the Company.
(b) Stock Option Grants. Executive shall be entitled to such
options to purchase Common Stock of the Company as shall be granted by the
Compensation Committee of the Board of Directors of CBC.
(c) Incentive Bonus. The Executive shall be eligible to
receive a performance bonus subject to successful achievement of goals and
objectives to be agreed upon by the Executive and the Compensation Committee of
the Board of Directors of the Company.
(d) Vacation. Executive shall be entitled to twenty (20) paid
vacation days plus paid Company holidays.
(e) Other Benefits. Executive will be entitled to participate,
to the extent he is eligible under the terms and conditions thereof, in all
profit-sharing, hospitalization, insurance, medical, disability, or other fringe
benefit or executive perquisite plans generally available to other senior
executives of the Company.
5. Expenses. The Company will reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, CBC and affiliates, upon the
submission to the Company of appropriate invoices therefor, all in accordance
with the Company's policies and procedures as in effect from time to time for
Company employees.
6. Termination.
(a) Termination by the Company Without Cause. The Company may
terminate the employment of Executive hereunder at any time without Cause (as
hereinafter defined). Notice of any such termination must be in writing and will
be effective upon receipt by Executive. In the event that the employment of
Executive is terminated pursuant to this clause (a), the Company will continue
to pay to Executive the Base Salary per annum as in effect on the date of such
termination, in accordance with the standard payroll practices of the Company as
in effect from time to time, for a term of twelve (12) months following the date
of such termination. In addition, in the event that the employment of Executive
is terminated pursuant to this clause (a), the annual incentive bonus described
in Section 4(c) will be paid, if any, to Executive with respect to the year in
which termination occurs (pro rated for the portion of the year in which
Executive was so employed). Further, if (i) Executive fully complies with
Sections 7,9 and 10 of this Agreement, any stock option held by Executive that
is vested at the time of Executive's termination pursuant to this clause (a)
will be exercisable for a period of 12 months following the expiration of the 12
month period referred to in Section 10(a) and any unvested stock option held by
the Executive that would have become vested if Executive continued employment
for the 12 month period following his termination shall become vested at the end
of such 12 month period, and will be exercisable for a period of two years after
termination.
(b) Termination by the Company for Cause. The Company may
terminate the employment of Executive hereunder for Cause. Executive shall be
entitled to thirty (30) days prior written notice of the intent to terminate
Executive hereunder and the right to address and/or cure such Cause. Any notice
of intent to terminate for Cause must specify the particular grounds therefor in
reasonable detail. In the event that the employment of Executive is terminated
pursuant to this clause (b), the Company will pay to Executive the amount of all
accrued but unpaid Base Salary to the date of such termination, but no annual
incentive bonus or pension contribution will be paid with respect to the year in
which termination occurs, or in the case of the annual incentive bonus, with
respect to the prior year if Executive is terminated under this clause (b) prior
to payment of the bonus applicable to such prior year. As used herein, "Cause"
means Executive's personal dishonesty, willful misconduct, breach of fiduciary
duty, or failure to substantially perform assigned duties relating to
Executive's performance hereunder (other than any such failure owing to
Executive becoming Disabled) as reasonably determined by the Board of Directors
of the Company in its sole discretion, or any willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or material
breach of any
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provision of this Agreement as reasonably determined by the Board of Directors
of the Company in its sole discretion.
(c) Termination by Executive. Executive may terminate his
employment hereunder (i) at any time without cause or (ii) for Good Reason (as
hereinafter defined). Notice of any such termination must be in writing and will
be effective 60 days after receipt by the Company or such earlier date as may be
specified by the Company after receipt of such notice. In the event that
Executive terminates employment pursuant to subclause (i) of this clause (c),
the Company will pay to Executive the amount of all accrued but unpaid Base
Salary to the date of such termination, but no annual incentive bonus or pension
contribution will be paid with respect to the year in which termination occurs.
In the event that Executive terminates employment hereunder for Good Reason,
Executive will be entitled to the same salary and bonus payments as would be
provided were he to be terminated without Cause pursuant to Section 6(a) above.
Further, any stock option held by Executive that is vested at the time of
Executive's termination pursuant to this clause (c) will be exercisable for a
period of one year following the expiration of the 12 month period referred to
in Section 10(a) and any unvested stock option held by the Executive will become
vested, and will be exercisable for a period of two years. As used herein, "Good
Reason" means a termination by Executive of Executive's employment hereunder
within 30 days after any material diminution in the nature or status of
Executive's job responsibilities from those in effect on the date of this
Agreement or the most recent anniversary thereof, dissolution or divestiture of
all or a significant portion of the Company's or other material change in the
Company, which in each case would materially adversely diminish the nature or
status of Executive's job responsibilities, or the Company's material breach of
any provision of this Agreement which is not cured within 15 business days after
written notice thereof from Executive to the Company.
(d) Termination Upon Death. This Agreement will terminate
automatically on the death of Executive. In the event that the employment of
Executive is terminated pursuant to this clause (d), the Company will pay to the
representative of Executive the amount of all accrued but unpaid Base Salary to
the date of such termination, the annual incentive bonus, if any, described in
Section 4(c) with respect to the year in which termination occurs (pro rated for
the portion of the year in which Executive was so employed), and an amount equal
to six (6) months Base Salary. Further, any stock option held by Executive that
is vested at the time of death will be exercisable by Executive's personal
representative or estate for a period of two years from date of death and all
unvested stock options held by Executive shall fully vest and be exercisable by
Executive's personal representative or estate for a period of two years from
date of death.
(e) Termination by the Company by Reason of Disability. The
Company may terminate the employment of Executive hereunder after Executive
becomes Disabled (as hereinafter defined). Notice of any such termination must
be in writing and will be effective thirty days after receipt by Executive. In
the event that the employment of Executive is terminated pursuant to this clause
(e), the Company will pay to Executive or his representative the amount of all
accrued but unpaid Base Salary to the date of such termination less the amount,
if any, received by Executive from any disability insurance maintained by the
Company, the annual incentive bonus described in Section 4(c), if any, with
respect to the year in which termination occurs (pro rated for the portion of
the year in which Executive was so employed) and an amount equal to one year's
Base Salary. Further, any stock option held by Executive that
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is vested at the time of termination for disability will be exercisable for a
period of two years from date of such termination for disability and all
unvested stock options held by Executive shall fully vest and be exercisable for
a period of two years from date of termination for disability. As used herein,
the term "Disabled" means Executive becoming physically or mentally disabled or
incapacitated to the extent that he has been or will be unable to perform his
duties hereunder on account of such disabilities or incapacitation for a
continuous period of six months as determined by a qualified independent
physician or group of physicians selected by the Company and approved by
Executive or his representative, such approval not to be unreasonably withheld.
(f) Change of Control. A "Change of Control" shall have
occurred if: (i) thirty-five percent (35%) or more of the outstanding voting
stock of the Company has been acquired by any person (as defined by Section
3(a)(9) of the Securities Exchange Act of 1934, as amended) other than directly
from the Company; (ii) there has been a merger or equivalent combination
involving the Company after which 49% or more of the voting stock of the
surviving corporation is held by persons other than former shareholders of the
Company; (iii) twenty percent (20%) or more of the members of the Board elected
by shareholders are persons who were not nominated in the then most recent proxy
statement of the Company; or (iv) the Company sells or disposes of all or
substantially all of its assets. In the event that the employment of Executive
is terminated following a Change in Control, the Company will continue to pay to
Executive the Base Salary per annum as in effect on the date of such
termination, in accordance with the standard payroll practices of the Company as
in effect from time to time, for a term of twenty-four (24) months following the
date of such termination. In addition, in the event that the employment of
Executive is terminated pursuant to this clause (f), the annual incentive bonus
described in Section 4(c) will be paid to Executive with respect to the year in
which termination occurs (pro rated for the portion of the year in which
Executive was so employed). Further, all unvested stock options will vest
without further action on the date of termination and all stock options shall be
exercisable during the remainder of their original terms.
(g) Release and No Further Obligations. As a condition to the
payments and other consideration provided to Executive under each clause of this
Section 6, the Executive shall have executed and delivered to the Company the
form of general release attached hereto as Exhibit A. Except as otherwise
expressly provided in this Agreement and the Stock Option Agreement, from and
after the effective date of any termination of Executive's employment hereunder
pursuant to this Section 6, the Company will have no further obligations (for
the payment of money or otherwise) to Executive or his representative, as
applicable.
7. Confidentiality.
(a) Executive will not, at any time following the date of this
Agreement, and regardless of whether Executive continues to be employed by the
Company, and if Executive's employment has been terminated, regardless of the
manner, reason, time or cause thereof, directly or indirectly reveal, report,
publish, disclose, transfer or furnish to any person not entitled to receive the
same for the immediate benefit of the Company, any Proprietary Information (as
hereinafter defined). The term "Proprietary Information" means all information
of any nature whatsoever, and in any form, which at the time or times concerns
or relates to any aspect of any business that the Company or its subsidiaries
are involved in or actively contemplating (the "Business") and which is
confidential, proprietary or not generally known to
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persons engaged in businesses similar to the Business. Proprietary Information
includes, but is not limited to, items, materials and information concerning the
following: marketing plans or strategies; budgets; designs; promotional
strategies; client preferences and policies; creative activities for clients;
concepts; intellectual property and trade secrets; product plans; financial
information and all documentation, reports and data (recorded in any form)
relating to the foregoing. Notwithstanding the foregoing, "Proprietary
Information" does not include any information to the extent it becomes generally
known to persons engaged in businesses similar to the Business through no fault
of Executive or any information which Executive is required to disclose as a
result of a subpoena or other legal process.
(b) Executive agrees that all memoranda, notes, records,
papers or other documents, computer disks, computer software programs and the
like and all copies thereof, relating to the Business (the "Business Records")
are and will be the sole and exclusive property of the Company. Except for use
for the benefit of the Company, Executive will not copy or duplicate any of the
Business Records, nor remove them from the Company's facilities. Executive must
comply with any and all procedures which the Company may adopt from time to time
to preserve the confidentiality of Proprietary Information and the
confidentiality of property of the types described immediately above, whether or
not such property contains a legend indicating its confidential nature.
(c) Upon termination of Executive's employment with the
Company for any reason whatsoever and at any other time upon the Company's
request, Executive (or his personal representative) must deliver to the Company
all property described in this Section 7 which is in his possession or control.
8. Representation and Warranty. Executive represents and warrants to
the Company that he is not a party to any prior employment agreement or other
agreement which restricts, interferes with or impairs, or which might be claimed
to restrict, interfere with or impair, in any way, Executive's use of any
information or Executive's execution or performance of this Agreement.
9. Discoveries and Improvements. Executive acknowledges and agrees
that all inventions, discoveries, and improvements, whether patentable or
unpatentable, made, devised, or discovered by Executive, whether by himself, or
jointly with others, from the date hereof until the expiration of the Term
hereof, reasonably deemed to be directly related to or pertaining in any way to
the Business, will be promptly disclosed in writing to the President (or such
other officer as the President may designate) of the Company and will be the
sole and exclusive property of the Company. Executive agrees to execute any
assignments to the Company or its nominee of his entire right, title, and
interest in and to any such inventions, discoveries, and improvements and to
execute any other instruments and documents requisite or desirable in applying
for and obtaining patents, copyrights or trademarks at the cost of the Company,
with respect thereto in the United States and in all foreign countries, that may
be requested by the Company. Executive further agrees, whether or not in the
employ of the Company, to cooperate to the extent and in the manner requested by
the Company in the prosecution or defense of any patent, trademark or copyright
claims or any litigation or other proceeding involving any inventions, trade
secrets, processes, discoveries, or improvements covered by this Agreement, but
all expenses thereof will be paid by the Company.
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10. Restrictive Covenants.
(a) Executive acknowledges and agrees that his position with
the Business places him in a position of confidence and trust with respect to
Proprietary Information. Executive consequently agrees that it is reasonable and
necessary for the protection of the goodwill of the Business that Executive make
the covenants contained herein. Accordingly, Executive agrees that during the
Term of this Agreement and for a period of 12 months after the date of
termination of Executive's employment hereunder for any reason whatsoever
Executive will not, without the prior written consent of the Company and
provided that the Company continues to make payments to the Executive in
accordance with the provisions of Section 6, (i) employ, solicit or encourage to
leave the employ of the Company, or to become employed by any person other than
the Company, any employee of the Company, or any individual who was an employee
of the Company during the one year prior to the termination of Executive's
employment, (ii) persuade or attempt to persuade any customer of the Company as
of the date of the termination of Executive's employment, to cease doing
business with, or to reduce the amount of business it does with, the Company or
solicit the business of any of the Company's customers as of the date of the
termination of Executive's employment hereunder with respect to any product or
service which competes with the products and services of the Company as of the
date of termination of Executive's employment or (iii) compete with the Company
as a consultant to, employee of, or equity participant in, any venture which
competes with the Business within the United States of America.
(b) Executive has carefully considered the nature and extent
of the restrictions upon him and the rights and remedies conferred upon the
Company under Sections 10 and 11 of this Agreement and hereby acknowledges and
agrees that the same are reasonable in time and territory, are designed to avoid
competition which otherwise would be unfair to the Company, do not stifle the
inherent skill and experience of Executive, would not operate as a bar to
Executive's sole means of support, are required to protect the legitimate
interests of the Company and do not confer a benefit upon the Company
disproportionate to the benefit otherwise afforded him by this Agreement.
11. Certain Remedies. The parties hereto acknowledge that in the
event of a breach or a threatened breach by Executive of any of his obligations
under Sections 7, 9 or 10 of this Agreement the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company will be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof,
and nothing herein will be construed as prohibiting the Company from pursuing
any other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages.
12. Notices. All notices hereunder must be in writing and addressed
to the Secretary of the Company at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
XX 00000 and to Executive at the address listed above. Each such address for
notice may be changed by notice of such change given to the other party hereto.
All such notices will be effective upon receipt.
13. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior or contemporaneous agreements, whether written or oral, of
the parties or affiliates hereto relating
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to the subject matter hereof. No amendment, waiver or modification hereof will
be valid or binding unless made in writing and signed by the parties hereto (in
the case of an amendment or modification) or by the party against whom
enforcement is sought (in the case of a waiver).
14. Governing Law/Arbitration. This Agreement will be governed,
interpreted and construed according to the internal laws of the State of New
York without regard to conflict of laws principles. Any controversy or claim
arising out of, or relating to, this Agreement or the breach thereof, must be
promptly settled by arbitration by a panel of three arbitrators in New York, New
York, in accordance with the Commercial Rules then obtaining of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court having jurisdiction thereof. It is expressly understood that the
arbitrator will have the authority to grant legal and equitable relief,
including both temporary restraints and preliminary injunctive relief to the
same extent as could a court of competent jurisdiction, and that the arbitrator
is empowered to order either side to fully cooperate in promptly resolving any
controversies or claims under this Agreement. Notwithstanding the foregoing, in
the event of a breach or threatened breach by Executive of any provision of
Section 7, 9 or 10 of this Agreement, the Company will be entitled to seek an
injunction from any court of competent jurisdiction and Executive hereby submits
to the personal jurisdiction of any such court.
15. Severability. Should any part of this Agreement be held or
declared to be void or illegal for any reason by an arbitrator or court of
competent jurisdiction, such provision will be ineffective, but all other parts
of this Agreement which can be effected without such illegal part will
nevertheless remain in full force and effect.
16. Headings. The Section headings contained in this Agreement are
for reference purposes only and will not affect the meaning or interpretation of
this Agreement.
17. Withholding. Anything to the contrary notwithstanding, all
payments required to be made by the Company hereunder to Executive will be
subject to withholding of such amounts relating to taxes (whether or not related
to payments required to be made by the Company hereunder) as the Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all of which
will collectively constitute a single original.
19. No Reliance; Opportunity to Consult with Counsel. The parties
hereto each represent to the other that in executing this Agreement each does
not rely upon, and has not relied upon, any representation or statement not set
forth herein with regard to the subject matter, basis or effect of this
Agreement or otherwise. Executive acknowledges that has had an opportunity to
consult with an attorney of his choice prior to executing this Agreement.
20. No Assignment. Neither this Agreement nor the right to receive
any payments hereunder may be assigned by Executive except as provided for
herein. This Agreement will be binding upon Executive, his heirs, executors and
administrators and upon the Company, its successors and assigns.
21. Survival and New Agreement. The provisions of Sections 6, 7, 9,
10, 11, 14, 15, 17, 20 and this Section 21 will survive the termination or
expiration of this Agreement.
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22. Failure to Utilize. The Company will have no obligation to use
Executive's services or the rights granted hereunder in connection therewith or
otherwise, and the Company will be deemed to have fully satisfied its
obligations hereunder by paying to Executive the compensation due Executive in
accordance with the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
Castle Brands Inc. Executive
By: /s/ Xxxx Xxxxxxx By: /s/ T. Xxxxxx Xxxxxxxx
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Name: Xxxx Xxxxxxx Name: T. Xxxxxx Xxxxxxxx
Title: Chairman and Chief
Executive Officer
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EXHIBIT A
FORM OF GENERAL RELEASE
GENERAL RELEASE
1. (a) As a condition to and in consideration of the payments and
benefits described in Section 6 of the Amended and Restated Employment
Agreement, dated May 2, 0000, xxxxxxx Xxxxxx Xxxxxx (XXX) Corp. and me relating
to my employment with Castle Brands Inc., and for other good and valuable
consideration, I, with the intention of binding myself and my heirs,
beneficiaries, trustees, administrators, executives, assigns and legal
representatives (collectively, the "Releasors"), hereby irrevocably and
unconditionally release, remise, and forever discharge Castle Brands Inc.,
Castle Brands (USA) Corp. and the Releasees (as hereinafter defined) with
respect to any and all agreements, promises, rights, liabilities, claims, and
demands of any kind whatsoever (upon any legal or equitable theory, whether
contractual, common law, or statutory, under federal, state or local law or
otherwise), whether known or unknown, asserted or unasserted, fixed or
contingent, apparent or concealed, that the Releasors ever had, now have or
hereafter can, shall or may have for, upon, or by reason of any matter, cause or
thing whatsoever existing, accruing, arising or occurring at any time on or
prior to the date I execute this General Release, including, without limitation,
(i) any and all rights and claims arising out of or in connection with my
employment by Castle Brands Inc., the terms and conditions of such employment,
or the termination of my employment; (ii) any and all contract claims, claims
for bonuses, claims for severance allowances or entitlements; (iii) fraud
claims, defamation, disparages and other personal injury and tort claims; and
(iv) claims under any federal, state, or municipal employee benefit, wage
payment, discrimination, or fair employment practices law (e.g., on the basis of
sex, religion, age, race, or disability), statute, or regulation, and claims for
costs and expenses (including but not limited to experts' fees and attorneys'
fees) with respect thereto. This General Release includes, without limitation,
any and all rights and claims under the Title VII of the Civil Rights Act of
1964, as amended, the Employee Retirement Income Security Act of 1974, the
Americans with Disabilities Act of 1990, the U.S. Pregnancy Discrimination Act,
the U.S. Family and Medical Leave Act, the U.S. Fair Labor Standards Act, the
U.S. Equal Pay Act, The Workers Adjustment and Notification Act, the Equal Pay
Act of 1963, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act of 1990, the Civil Rights Act of 1866, the Family and
Medical Leave Act of 1993, the Civil Rights Act of 1991, the New York
Conscientious Employee Protection Act, the New York Equal Pay Act, the New York
Smokers' Rights Law, the New York Family Leave Act, the New York Genetic Privacy
Act, and the New York Constitution, in each case as such laws have been or may
be amended. Nothing in this General Release shall deprive me of any compensation
that was earned but not paid prior to my termination; accrued benefits to which
I have acquired a vested right under any employee benefit plan or policy, stock
plan or deferred compensation arrangement; any health care continuation coverage
to the extent required by applicable law; or any right that I may have under the
Agreement dated May 2, 2005.
(b) For purposes of this General Release, the term "Castle
Brands Inc., Castle Brands (USA) Corp. and the Releasees" includes Castle Brands
Inc., its past and present direct and indirect subsidiaries, affiliates,
successors, assigns, and all of its and their past, preset, and future
employees, officers, directors, attorneys, agents, and legal representatives,
whether acting
as agents or in individual capacities, and this General Release shall inure to
the benefit of and shall be binding and enforceable by all such entities and
individuals.
2. (a) Opportunity to Review. I acknowledge that before signing this
General Release, I was given a period of at least 21 days in which to review and
consider it. I acknowledge that I was encouraged by Castle Brands (USA) Corp. to
review this General Release, and that to the extent I wish to do so I have done
so. I further acknowledge that I have read this General Release in its entirety,
and that I fully understand the terms and legal effect of this General Release.
I am entering into this General Release voluntarily and of my own free will. If
I executed this General Release before the end of the 21-day period, such early
execution was completely voluntary, and I had reasonable and ample time in which
to review this General Release.
(b) Revocability. I agree that, for a period of seven days
after I sign this General Release (the "Revocation Period"), I have the right to
revoke it by providing notice, in writing (delivered by hand or by overnight
mail), to Castle Brands (USA) Corp., Attention: Chief Operating Officer.
Notwithstanding anything contained herein to the contrary, this General Release
will not become effective and enforceable until after the expiration of the
Revocation Period.
Date signed:
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