EXECUTION EDITION
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT effective as of February 17, 2002,
between REVLON CONSUMER PRODUCTS CORPORATION, a Delaware corporation ("RCPC"
and, together with its parent Revlon, Inc. and its subsidiaries the "Company"),
and Xxxx X. Xxxxx (the "Executive").
RCPC wishes to employ the Executive with the Company, and the
Executive wishes to accept employment with the Company, on the terms and
conditions set forth in this Agreement.
Accordingly, RCPC and the Executive hereby agree as follows:
1. Employment, Duties and Acceptance.
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1.1 Employment, Duties. RCPC hereby employs
the Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company, in the capacity of president and chief
executive officer of Revlon, Inc. ("Revlon") and RCPC, reporting to the Board of
Directors of each of Revlon and RCPC, and to perform such other duties
consistent with such position (including service as a director or officer of any
affiliate of Revlon, Inc. if elected) as may be assigned by the Board of
Directors of Revlon. The Executive's title shall be President and Chief
Executive Officer of Revlon and RCPC, or such other titles of at least
equivalent level consistent with the Executive's duties from time to time as may
be assigned to the Executive by the Board of Directors of Revlon. RCPC agrees to
use its best efforts to cause the Executive to be elected to the Board of
Directors of Revlon and of RCPC, so that the Executive may serve as a member of
both Boards throughout the Term.
1.2 Acceptance.
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1.2.1 The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. During the Term, it shall not be a
violation of this Agreement for the Executive (i) to serve as a member of the
board of the two non-profit institutions on which he currently serves or (ii) to
serve on other corporate, civic or charitable boards or committees with the
consent of the Company (which shall not be unreasonably withheld), so long as
such activities are consistent with the policies of the Company and do not
interfere with the performance of the Executive's duties in accordance with this
Agreement.
1.2.2 The Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and the
Executive has not done or permitted to be done anything that may curtail or
impair any of the rights granted to the Company herein and (ii) neither the
execution and delivery of this Agreement by the Executive nor
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the performance by the Executive of any of the Executive's obligations hereunder
constitutes or will constitute a violation or breach of, or a default under, any
agreement, arrangement or understanding, or any other restriction of any kind,
to which the Executive is a party or by which the Executive is bound.
1.3 Location. The duties to be performed by
the Executive hereunder shall be performed primarily at the office of RCPC in
the New York City metropolitan area, subject to reasonable travel requirements
consistent with the nature of the Executive's duties from time to time on behalf
of the Company.
2. Term of Employment; Certain Post-Term Benefits.
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2.1 The Term. The term of the Executive's
employment under this Agreement (the "Term") shall commence on February 17, 2002
(the "Effective Date") and shall end on such date as provided pursuant to
Section 2.2.
2.2 End-of-Term Provisions.
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(i) The Term shall initially be
scheduled to end on February 16, 2005. At any time on or after February 28, 2002
RCPC shall have the right to give written notice of non-renewal of the Term. In
the event RCPC gives such notice of non-renewal, the Term automatically shall be
extended so that it ends thirty-six months after the last day of the month in
which RCPC gives such notice. If RCPC shall not theretofore have given such
notice, from and after February 28, 2002 unless and until RCPC gives written
notice of non-renewal as provided in this Section 2.2, the Term automatically
shall be extended day-by-day; upon the giving of such notice by RCPC, the Term
automatically shall be extended so that it ends thirty-six months after the last
day of the month in which RCPC gives such notice. Non-extension of the Term
shall not be deemed to be a breach of this Agreement by RCPC for purposes of
Section 4.4.
(ii) The Term shall end earlier than
the date provided in Section 2.2, if sooner terminated pursuant to Section 4.
3. Compensation; Benefits.
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3.1 Salary. As compensation for all services
to be rendered pursuant to this Agreement, RCPC agrees to pay the Executive
during the Term a base salary, payable in bi-weekly arrears, at the annual rate
of not less than $1,300,000 (the "Base Salary"). All payments of Base Salary or
other compensation hereunder shall be less such deductions or withholdings as
are required by applicable law and regulations. The Base Salary shall be
reviewed by the Company from time to time, but no less frequently than once
every twelve (12) months, and may be increased (but not decreased) from time to
time by action of the Compensation Committee of the Board of Directors. Any
increase in the Base Salary shall not serve to limit or reduce any other
obligation of the Company hereunder. In the event that RCPC, in its sole
discretion, determines to increase the Base Salary, such increased amount shall,
from and after the effective date of the increase, constitute "Base Salary" for
purposes of this Agreement.
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3.2 Bonus. In addition to the amounts to be
paid to the Executive pursuant to Section 3.1, the Executive shall receive an
annual bonus of 100% of the Executive's Base Salary at the rate in effect during
the calendar year in which the bonus is earned, based upon achievement of 100%
of the objectives set annually not later than March 31 of such year by the
Compensation Committee of the Board of Directors of Revlon in its sole
discretion (but after consultation with the Executive); provided, that the
annual bonus amount shall be 150% of the Executive's Base Salary if the
achievement is 120% (or more) of such objectives; and provided, further, that
the Executive's annual bonus for the year ending December 31, 2002 shall not be
less than $1,300,000, regardless of the attainment of such objectives. In the
event that the Executive's employment shall terminate otherwise than as of a
calendar year end, the Executive's bonus with respect to the calendar year in
which employment terminates shall be prorated for the actual number of days of
employment during such year, and such bonus, if any, shall be payable on the
date that executive bonuses are paid generally, whether or not the Executive
remains employed on such date.
3.3 Equity. Pursuant to the recommendation of
the Compensation Committee of the Board administering the Revlon, Inc. Third
Amended and Restated 1996 Stock Plan ("1996 Stock Plan"), the Executive is
hereby granted an award (the "Equity Award") of restricted stock and stock
options in accordance with the terms and conditions of the Restricted Stock
Agreement and the Nonqualified Stock Option Agreement annexed hereto as Exhibits
A and B, respectively.
3.4 Business Expenses. RCPC shall pay or
reimburse the Executive for all reasonable expenses actually incurred or paid by
the Executive during the Term in the performance of the Executive's services
under this Agreement, subject to and in accordance with applicable expense
reimbursement and related policies and procedures as in effect from time to
time.
3.5 Vacation. During each year of the Term,
the Executive shall be entitled to a vacation period or periods of four weeks
taken in accordance with applicable vacation policy as in effect from time to
time (or such greater period as may be available under such policy).
3.6 Fringe Benefits.
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(i) During the Term, the Executive
shall be entitled to participate in those qualified and non-qualified defined
benefit, defined contribution, group insurance, medical, dental, disability and
other benefit plans of the Company as from time to time in effect made available
to senior executives of the Company generally and in the Company's Executive
Deferred Compensation Plan and Executive Medical Plan providing for
reimbursement of medical and dental benefits not payable under plans generally
available. In addition, in accordance with the directives of the Compensation
Committee of the Board of Directors, during the Term the Executive shall be
assigned the use of a Company-provided chauffeured automobile (a late model top
of the line BMW or equivalent vehicle) during the business week for personal and
business use and at other times as required for business purposes. Further,
during the Term the Executive shall be
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reimbursed for the initiation fees, dues, assessments and like fees for
membership in one city club of the Executive's choice.
(ii) During the Term, RCPC agrees to
make available to the Executive additional term life insurance coverage with a
death benefit of $10,000,000, subject to the insurer's satisfaction with the
results of any required medical examination so as to insure at standard risk
rates, to which medical examination the Executive hereby agrees to submit, and
RCPC shall reimburse the Executive for the premium expense related thereto. Such
coverage shall be provided pursuant to the Company's optional supplemental term
insurance program, to the extent available, or to the extent not available, the
Executive may select a plan of the Executive's choice and may designate the
beneficiary of such plan.
(iii) During the Term, RCPC shall
maintain an individual policy of disability insurance, naming the Executive as
the insured and the Executive or a designee as the beneficiary, with a benefit
equal to (A) fifty percent of the sum of the Executive's Base Salary in effect
on the date of disability plus the Executive's most recent annual bonus pursuant
to Section 3.2 less (B) the long-term disability benefit payable under the
Company's group disability program as in effect from time to time (irrespective
of whether the Executive has elected to participate in such long-term disability
program).
(iv) RCPC shall pay reasonable home
relocation expenses.
(v) During the Term, RCPC shall pay to
the Executive as additional compensation on a monthly basis an amount equal to
the sum of (i) the payment actually payable by the Executive for the preceding
month in respect of regularly scheduled interest and amortization of principal
on any bank loan that the Executive shall obtain to purchase a principal
residence in the New York metropolitan area and/or a Manhattan apartment
(calculated on the basis of a standard fixed payment commercial mortgage table
with interest adjustable seven years after initial borrowing and principal
amortized over 30 years after initial borrowing, but excluding any prepayment of
principal) (the "Mortgage Loan") plus (ii) any loan origination "points" with
respect to the closing of the Mortgage Loan, in each case limited to a
$2,000,000 maximum principal amount of Mortgage Loan (the "Home Loan Payments");
plus (iii) the amount of any increase in any federal, state and local income
taxes actually payable by the Executive as a result of RCPC's payment of Home
Loan Payments and amounts under this clause (iii). Notwithstanding the
foregoing, RCPC shall use reasonable efforts (but determined in its sole
discretion) to make the Mortgage Loan itself, in whole or in part, in which case
such loan shall bear interest at the applicable federal rate.
(vi) In furtherance of the Executive's
retirement benefit expectations, and without limiting the Company's ability to
modify, in any way, any or all of its defined benefit plans, RCPC agrees to
guarantee to the Executive a minimum monthly pension as set forth below:
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(a) Commencing with retirement
on or after March 1, 2014, RCPC shall pay or provide a monthly straight
life annuity pension amount of $41,667, reduced by the actuarial
equivalent of all benefits paid or payable (calculated on a straight
life annuity basis) to or in respect of the Executive under (i) the
Revlon Employees Retirement Plan, the Revlon Pension Equalization Plan,
and any successors to either of them, (ii) all other defined benefit
retirement and defined contribution plans, whether or not tax
qualified, maintained at any time by RCPC, Revlon, any past employer of
the Executive, or the affiliate of any of them, in all cases without
regard to whether the plan has previously terminated, is being
currently maintained or is established and maintained in the future.
Such offset for benefits under other plans shall be determined as of
the day this pension starts; shall not be subsequently adjusted on
account of any subsequent benefit accruals or change in benefit amounts
expected under such other plans, whether on account of the Executive's
death or otherwise; and shall disregard benefits derived from employee
contributions and from employer matching contributions under any 401(k)
plan. Only a percentage (the "Accrued Percentage") of the amount
otherwise payable pursuant to this Section 3.6(v)(a) shall be paid if
the Executive's employment shall terminate prior to March 1, 2014, as
follows: for termination prior to February 28, 2003, the Accrued
Percentage shall be 0%; for termination on or after February 28, 2003
and prior to February 28, 2004, 8.33%; and thereafter, an additional
8.33% to accrue as of each February 28th on which the Executive is
still employed, with the result that the benefit shall be 100% accrued
on and after February 28, 2014. If the Executive shall retire on or
after March 1, 2009 but prior to March 1, 2014, the Executive shall be
entitled to receive the applicable Accrued Percentage of the pension
benefit payable pursuant to this Section 3.6(vi)(a), but subject to
actuarial reduction for such early commencement.
(b) The Executive may elect to
have the pension determined pursuant to subsection (a) above paid as an
actuarially equivalent joint and 50% survivor annuity with his spouse
as beneficiary if she shall survive the Executive and be legally
married to the Executive at the time of his death. Such election shall
be made by the Executive not later than 90 days before the pension
benefit is to start and shall take effect only if the Executive and his
spouse are alive and married to each other on the day the pension
starts. If the Executive's spouse dies after the pension starts and
before the Executive, no adjustment shall be made to the amount of
annual pension payable to the Executive.
(c) If the Executive dies
before March 1, 2014, a lifetime pension shall be payable to the
spouse, if any, to whom the Executive was legally married on the date
of his death, commencing on March 1, 2014 in a monthly amount
determined as if the Executive had survived to that date and had then
elected to have his benefit paid as an actuarially equivalent joint and
50% survivor annuity with his spouse as beneficiary; provided, that the
amount otherwise determined in accordance with the foregoing shall be
multiplied by the Accrued Percentage calculated pursuant to the last
sentence of Section 3.6(v)(a) as of the date of the Executive's death
(or, if earlier, the date as of which
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Executive's employment terminated), and only that accrued amount shall
be due to the surviving spouse.
(d) For purposes of
determining actuarial equivalence, the following assumptions shall be
used: an interest rate equal to the AA corporate bond long-term rate in
effect on the first day of the month preceding the month in which the
benefit is to start, the 1983 Group Annuity Mortality Table, and
otherwise the reasonable actuarial assumptions and methods selected by
RCPC's primary actuary in consultation with the Executive's financial
advisors.
(e) Notwithstanding any other
provision of this Agreement, no benefit shall be payable pursuant to
this subsection 3.6(vi), and any amounts then being paid shall cease in
the event that (x) prior to March 1, 2005 the Executive terminates his
employment during the Term otherwise than as provided in Section 4.4,
(y) the Executive materially breaches this Agreement (including Section
5, 6 or 7) or (z) RCPC terminates the Executive's employment (under
this Agreement or otherwise) for "Cause" as set forth in Section 4.3 of
this Agreement.
(f) Payments pursuant to this
subsection 3.6(vi) shall be made quarterly or at such more frequent
intervals as RCPC may elect. RCPC's obligation under this subsection
3.6(vi) shall be an unsecured, unfunded and unaccrued contingent
general obligation of RCPC to be satisfied from its unsegregated
general funds, provided that RCPC shall have the right, if it so
elects, to defease its obligation hereunder by the purchase and
delivery to the Executive of an annuity on his life in the amount
provided for above or to fund its obligation hereunder through the
purchase of insurance or other instruments, and the Executive agrees to
comply with the reasonable requests of RCPC should RCPC elect to do so,
including by submitting to medical examination required in connection
with the purchase of any such insurance.
3.7 Special Home Loan Bonus and Tax Loan
Forgiveness.
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3.7.1 As an additional inducement to the
Executive to enter into and remain in RCPC's employ, RCPC agrees that if during
or after the Term the Executive shall terminate his employment for Good Reason
(as provided in Section 4.4) or RCPC shall terminate Executive's employment
other than pursuant to Section 4.2 or 4.3, RCPC shall pay a special bonus to the
Executive within ten (10) days of the date of the termination of his employment,
in an amount equal to $2,000,000 less the amount of Home Loan Payments made by
RCPC in respect of the principal of the Mortgage; provided, however, that if
during or after the Term the Executive materially breaches any of his
obligations hereunder (including under Sections 5, 6 and 7), no bonus shall be
payable under this Section 3.7.1, and in the case of a material breach of
Section 5, 6 or 7 following termination of employment, any bonus theretofore
paid under this Section 3.7.1 shall be forfeited and repaid by the Executive to
RCPC. Notwithstanding the foregoing, if RCPC makes the Mortgage Loan itself as
provided in
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the last sentence of Section 3.6(v), no special bonus shall be paid pursuant to
the preceding sentence, the Mortgage Loan shall be forgiven in its entirety on
the date the special bonus would have otherwise been paid, and such forgiveness
shall, for all purposes of this Agreement, be deemed to have been an actual
payment of such special bonus (so that, for example, repayment of the amount
forgiven might be required upon a material breach by the Executive of Section 5,
6 or 7 following termination of employment).
3.7.2 In connection with the grant of
restricted stock pursuant to section 3.3 hereof, the Executive shall make a
valid and timely election under section 83(b) of the Internal Revenue Code. In
order to facilitate the Executive's ability to make such election, RCPC shall
loan to the Executive an amount of approximately $2.3 million, being the amount
necessary to satisfy state, local and federal income taxes (including any
withholding tax) incurred by the Executive as a result of the making of such
election. Such loan shall be made at the time or times necessary to satisfy the
relevant tax liability with interest accrued on the loan to be due and payable
together with the full principal amount thereof on the fifth anniversary of the
date of the restricted stock award to which the loan relates. Interest shall be
payable at the applicable federal rate required to avoid imputation of income
tax liability. Such loan shall be secured by a pledge of the restricted shares
to which the loan relates and the loan and pledge shall be evidenced by the
Promissory Note Agreement and Pledge Agreement annexed hereto as Exhibits C and
D, respectively. For the avoidance of doubt, as provided in the Promissory Note
Agreement, if during the Term the Executive terminates his employment for
reasons constituting "Good Reason" (as defined in Section 4.4 hereof) or RCPC
terminates the Executive's employment otherwise than pursuant to Section 4.2 or
4.3, the outstanding balance of the loan and all related accrued interest shall
be forgiven.
4. Termination.
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4.1 Death. If the Executive shall die during
the Term, the Term shall terminate and no further amounts or benefits shall be
payable hereunder except pursuant to Section 3.6.
4.2 Disability. If during the Term the
Executive shall become physically or mentally disabled, whether totally or
partially, such that the Executive is unable to substantially perform the
Executive's services hereunder for (i) a period of six consecutive months or
(ii) shorter periods aggregating six months during any twelve month period, the
Company may at any time after the last day of the six consecutive months of
disability or the day on which the shorter periods of disability shall have
equaled an aggregate of six months, by written notice to the Executive (but
before the Executive has returned to active service following such disability),
terminate the Term and no further amounts or benefits shall be payable
hereunder, except that the Executive shall be entitled to receive until the
first to occur of (x) the Executive ceasing to be disabled or (y) the
Executive's attaining the age of 65, continued coverage for the Executive under
the Company paid group life insurance plan and for the Executive and his spouse
and children, if any, under the Company's group medical (including executive
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medical) plan, to the extent permitted by such plans and to the extent such
benefits continue to be provided to the Company's senior executives generally.
4.3 Cause. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime involving the
property of the Company or any of its subsidiaries or affiliates which results
in material economic harm to the Company, willful misconduct by the Executive in
connection with the performance of the Executive's duties hereunder or other
material breach by the Executive of this Agreement, RCPC may at any time by
written notice to the Executive terminate the Term for "Cause" and, upon such
termination, the Executive shall be entitled to receive no further amounts or
benefits hereunder, except as required by law. The Executive shall not be deemed
to have been terminated for Cause unless (i) reasonable notice has been
delivered to him setting forth the reasons for the Company's intention to
terminate for Cause, and (ii) a period of ten (10) days has elapsed since
delivery of such notice during which the Executive was afforded an opportunity
to cure, if capable of remedy, the reasons for the Company's intention to
terminate for Cause. For purposes of determining whether conduct constitutes
gross neglect or willful misconduct, no act or failure to act on the part of the
Executive shall be considered as such if the Executive acted (or failed to act)
in good faith and the Executive reasonably believed that such act (or failure to
act) was in the best interest of the Company.
4.4 Company Breach; Other Termination.
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(a) If a "Good Reason" event occurs,
the Executive shall be entitled to terminate the Executive's employment and the
Term upon 30 days' prior written notice to the Company, which notice shall set
forth in detail the basis for the "Good Reason" permitting such a termination,
and the Company shall thereupon have a 15-day right to cure and if cured the
proposed termination for Good Reason shall be null and of no effect. In
addition, following a "Change in Control" (as defined in Executive's Restricted
Stock Agreement) the Executive shall be entitled to elect to terminate his
employment with the Company for any reason or no reason upon 30 days' advance
written notice to the Company; provided, however, that such notice may only be
given in the seventh month following such Change in Control. Any termination of
the Executive's employment and the Term pursuant to the preceding two sentences
shall be deemed a termination for "Good Reason". In addition, RCPC shall be
entitled to terminate the Term and the Executive's employment at any time and
without prior notice otherwise than pursuant to the provisions of Section 4.2 or
4.3. In consideration of the Executive's covenant in Section 5.2 upon
termination under this Section 4.4 by the Executive, or in the event RCPC so
terminates the Term otherwise than pursuant to the provisions of Section 4.2 or
4.3, RCPC agrees, and the Company's sole obligation arising from such
termination (except for any payments of salary, earned bonus and vested benefits
accrued through the date of such termination and as otherwise provided in
Sections 3.6 and 3.7) shall be, at the Executive's election by written notice
within 10 days after such termination, for RCPC either:
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(i) to make payments in lieu
of Base Salary in the amounts prescribed by Section 3.1 as in effect on
the date of termination of employment and disregarding any reduction in
the Base Salary that would constitute a breach under this Agreement and
to continue the Executive's participation in the health, medical and
life insurance benefits provided for in subsections (i) and (ii) of
Section 3.6 (in each case less amounts required by law to be withheld)
through the date on which the Term would have expired pursuant to
Section 2.2 if RCPC had given notice of non-renewal on or as promptly
as permitted by Section 2.2 after the date of termination, provided
that (1) such benefit continuation is subject to the terms of such
plans, (2) group life insurance continuation is subject to a limit of
two years pursuant to the terms thereof, (3) the Executive shall cease
to be covered by medical and/or dental plans of the Company at such
time as the Executive becomes covered by like plans of another company,
(4) the Executive shall, as a condition, execute such release,
confidentiality, non-competition and other covenants as would be
required in order for the Executive to receive payments and benefits
under Revlon Executive Severance Policy as in effect on the date of
this Agreement, and (5) any compensation earned by the Executive from
other employment or consultancy after the first 18 months following the
date of termination shall reduce the payments provided for herein; and
provided further that the continuation of payments in lieu of Base
Salary otherwise required pursuant to the preceding provisions of this
clause (i) will stop, if earlier than the date provided above, on such
date (if any) that the aggregate payments thereof plus the sum of (x)
the amount of any special Home Loan Bonus paid or Mortgage Loan
Forgiven and (y) the amount of any Tax Loan forgiven, pursuant to
Section 3.7.1 and 3.7.2, have totaled $6 million, or
(ii) to make the payments and
provide the benefits prescribed by the Executive Severance Policy of
the Company as in effect on the date of this Agreement (except that the
provision in Paragraph IIIC(ii) establishing a limit of six months of
payments shall not be applicable to the Executive) upon the Executive's
compliance with the terms thereof, provided that the payments otherwise
required pursuant to this clause (ii) shall be reduced (but not below
zero) by the amount of any Home Loan Bonus paid or Mortgage Loan
forgiven and by the amount of any Tax Loan forgiven pursuant to Section
3.7.
(b) For purposes of Section 4.4(a), a
"Good Reason" event shall mean any of the following: (i) the breach by the
Company of any material provision of this Agreement or the Restricted Stock
Agreement, annexed hereto as Exhibit A, or the Stock Option Agreement, annexed
hereto as Exhibit B, (ii) the assignment to the Executive of any duties
inconsistent in any material respect with the Executive's position (including
status, offices, titles and reporting relationships), authority, duties or
responsibilities as contemplated by Section 1.1 of this Agreement, or any other
action by the Company which, in either case, results in a significant and
adverse diminution in such position, authority, duties or responsibilities,
excluding any isolated and inadvertent action not taken in bad faith; (iii) the
Executive being required to
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relocate his principal place of employment more than thirty-five (35) miles from
his principal place of employment with the Company in Manhattan, New York City,
as of the Effective Date (unless the effect of such relocation results in the
Executive's principal place of employment with the Company being less than
thirty-five (35) miles from the Executive's principal residence); (iv) failure
of the Company to obtain the assumption in writing of its obligation to perform
this Agreement by any successor to all or substantially all of the assets of the
Company within 15 days after a merger, consolidation, sale or similar
transaction unless such assumption occurs by operation of law (by way of
example, in a corporate merger); or (v) the failure to elect or the removal of
the Executive from the Board of Directors of either Revlon or RCPC other than
for conduct that would constitute Cause.
4.5 Voluntary Termination By Executive without
Good Reason. The Executive may terminate his employment under this Agreement
without Good Reason, and such termination under this Section 4.5 shall be
effective upon thirty (30) days' prior written notice to the Company and shall
not be deemed a breach of this Agreement.
4.6 Dispute Resolutions. If there is a dispute
relating to the alleged breach of this Agreement by RCPC or the Executive, the
parties hereto agree that exclusive jurisdiction of any dispute regarding this
Agreement shall be the state or federal courts located in the State of New York,
provided that this Section 4.5 shall not limit the operation of Section 5.6.
Notwithstanding the foregoing, other than with respect to any dispute relating
to Executive's obligations under Sections 5, 6, and 7, the Executive may elect
to have any dispute relating to the alleged breach of this Agreement by RCPC or
the Executive resolved by arbitration. The arbitration proceeding shall be
conducted in the City of New York under the rules of the American Arbitration
Association and the arbitrator(s) shall determine the matters in dispute in
accordance with the laws of the State of New York. In case of litigation, each
party agrees to submit to the jurisdiction of the federal and state courts of
New York. In case of arbitration or litigation, the Company shall pay all the
reasonable costs of such proceeding, including reasonable attorneys' fees, if
and to the extent (i) the Executive prevails and (ii) the court or arbitrator in
its discretion deems such an award appropriate under the circumstances.
4.7 No Mitigation. In no event shall the
Executive be obligated to seek other employment.
5. Protection of Confidential Information;
Non-Competition.
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5.1 The Executive acknowledges that the
Executive's services will be unique, that they will involve the development of
Company-subsidized relationships with key customers, suppliers, and service
providers as well as with key Company employees and that the Executive's work
for the Company has given and will give the Executive access to highly
confidential information not available to the public or competitors, including
trade secrets and confidential marketing, sales, product development and other
data and place which it would be impracticable for the Company to effectively
protect and preserve in the absence of this Section 5 and the disclosure or
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misappropriation of which could materially adversely affect the Company.
Accordingly, the Executive agrees:
5.1.1 except in the course of performing
the Executive's duties provided for in Section 1.1, not at any time, whether
before, during or after the Executive's employment with the Company, to divulge
to any other entity or person any confidential information acquired by the
Executive concerning the Company's or its affiliates' financial affairs or
business processes or methods or their research, development or marketing
programs or plans, any other of its or their trade secrets, any information
regarding personal matters of any directors, officers, employees or agents of
the Company or its affiliates or their respective family members, or any
information concerning the circumstances of the Executive's employment and any
termination of the Executive's employment with the Company or any information
regarding discussions related to any of the foregoing. The foregoing
prohibitions shall include, without limitation, directly or indirectly
publishing (or causing, participating in, assisting or providing any statement,
opinion or information in connection with the publication of) any diary, memoir,
letter, story, photograph, interview, article, essay, account or description
(whether fictionalized or not) concerning any of the foregoing, publication
being deemed to include any presentation or reproduction of any written, verbal
or visual material in any communication medium, including any book, magazine,
newspaper, theatrical production or movie, or television or radio programming or
commercial. In the event that the Executive is requested or required to make
disclosure of information subject to this Section 5.1.1 under any court order,
subpoena or other judicial process, the Executive will promptly notify RCPC,
take all reasonable steps requested by RCPC to defend against the compulsory
disclosure and permit RCPC to control with counsel of its choice any proceeding
relating to the compulsory disclosure. The Executive acknowledges that all
information, the disclosure of which is prohibited by this section, is of a
confidential and proprietary character and of great value to the Company.
5.1.2 to deliver promptly to the Company
on termination of the Executive's employment with the Company, or at any time
that RCPC may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control.
5.2 In consideration of RCPC's covenant in
Section 4.4, the Executive shall (i) in all respects fully to comply with the
terms of the Employee Agreement as to Confidentiality and Non-Competition
referred to in Revlon Executive Severance Policy (the "Non-Competition
Agreement"), whether or not the Executive is a signatory thereof, with the same
effect as if the same were set forth herein in full, and (ii) in the event that
the Executive shall terminate the Executive's employment otherwise than as
provided in Section 4.4, the Executive shall comply with the restrictions set
forth in paragraph 9(e) of the Non-Competition Agreement through the earliest
date on which the Term would have expired pursuant to Section 2.2 if RCPC had
given notice of non-renewal on or as promptly as permitted by Section 2.2 after
the date of termination, subject only to the Company continuing to make payments
equal to the Executive's Base
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Salary during such period, notwithstanding the limitation otherwise applicable
under paragraph 9(d) thereof or any other provision of the Non-Competition
Agreement.
5.3 If the Executive commits a breach of any
of the provisions of Section 5.1 or 5.2 hereof, RCPC shall have the following
rights and remedies:
5.3.1 the right and remedy to immediately
terminate all further payments and benefits provided for in this Agreement,
except as may otherwise be required by law in the case of qualified benefit
plans,
5.3.2 the right and remedy to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach will cause
irreparable injury to the Company and that money damages and disgorgement of
profits will not provide an adequate remedy to the Company, and, if the
Executive attempts or threatens to commit a breach of any of the provisions of
Section 5.1 or 5.2, the right and remedy to be granted a preliminary and
permanent injunction in any court having equity jurisdiction against the
Executive committing the attempted or threatened breach (it being agreed that
each of the rights and remedies enumerated above shall be independent of the
others and shall be severally enforceable, and that all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to RCPC under law or in equity), and
5.3.3 the right and remedy to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits (collectively "Benefits") derived
or received by the Executive as the result of any transactions constituting a
breach of any of the provisions of Section 5.1 or 5.2 hereof, and the Executive
hereby agrees to account for and pay over such Benefits as directed by RCPC.
5.4 If any of the covenants contained in
Section 5.1, 5.2 or 5.3, or any part thereof, hereafter are construed to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to the
invalid portions.
5.5 If any of the covenants contained in
Section 5.1 or 5.2, or any part thereof, are held to be unenforceable because of
the duration of such provision or the area covered thereby, the parties agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision so as to be enforceable to the maximum
extent permitted by applicable law and, in its reduced form, said provision
shall then be enforceable.
5.6 The parties hereto intend to and hereby
confer jurisdiction to enforce the covenants contained in Sections 5.1, 5.2 and
5.3 upon the courts of any state within the geographical scope of such
covenants. In the event that the courts of any one or more of such states shall
hold such covenants unenforceable in whole or in part by reason of the breadth
of such covenants or otherwise, it is the intention of the parties'
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hereto that such determination not bar or in any way affect RCPC's right to the
relief provided above in the courts of any other states within the geographical
scope of such covenants as to breaches of such covenants in such other
respective jurisdictions, the above covenants as they relate to each state being
for this purpose severable into diverse and independent covenants.
5.7 Any termination of the Term or the
Executive's employment shall have no effect on the continuing operation of this
Section 5.
5.8 Pursuant to Sections 4.4 and 5.2, the
Executive is subject to certain non-competition covenants set forth in the
Non-Competition Agreement referred to in the Revlon Executive Severance Policy,
which covenants extend beyond the Executive's termination of employment.
6. Inventions and Patents.
----------------------
6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive's work with
the Company or any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or any of its
subsidiaries or affiliates or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of the
Executive's inventorship.
6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Executive within two years after the termination of the Executive's employment
with the Company, it is to be presumed that the Invention was conceived or made
during the Term.
6.3 The Executive agrees that the Executive
will not assert any rights to any Invention as having been made or acquired by
the Executive prior to the date of this Agreement, except for Inventions, if
any, disclosed to the Company in writing prior to the date hereof.
7. Intellectual Property.
---------------------
Notwithstanding and without limiting the provisions of Section
6, the Company shall be the sole owner of all the products and proceeds of the
Executive's services hereunder, including, but not limited to, all materials,
ideas, concepts, formats, suggestions, developments, arrangements, packages,
programs and other intellectual properties that the Executive may acquire,
obtain, develop or create in connection with or during the Term, free and clear
of any claims by the Executive (or anyone claiming under the Executive) of any
kind or character whatsoever (other than the Executive's right to
14
receive payments hereunder), the Executive shall, at the request of RCPC,
execute such assignments, certificates or other instruments as RCPC may from
time to time deem necessary or desirable to evidence, establish, maintain,
perfect, protect, enforce or defend its right, title or interest in or to any
such properties.
8. Indemnification.
---------------
RCPC will indemnify the Executive, to the maximum extent
permitted by applicable law, against all costs, charges and expenses incurred or
sustained by the Executive in connection with any action, suit or proceeding to
which the Executive may be made a party, brought by any shareholder of the
Company directly or derivatively or by any third party by reason of any act or
omission of the Executive as an officer, director or employee of the Company or
of any subsidiary or affiliate of the Company.
9. Notices.
-------
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
If to the Company, to:
Revlon Consumer Products Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to the Executive, to the Executive's principal residence as
reflected in the records of the Company, with a copy to:
Xxxxxx Price Xxxxxxx & Kammholz
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxx
10. General.
-------
10.1 This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made between residents thereof and to be performed
entirely in New York.
10.2 The section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
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10.3 This Agreement and the Restricted Stock
Agreement, Nonqualified Stock Option Agreement, Promissory Note Agreement and
Pledge Agreement referred to in Section 3.3 set forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersede all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in those
Agreements, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
10.4 This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned by the Executive, nor may the
Executive pledge, encumber or anticipate any payments or benefits due hereunder,
by operation of law or otherwise. RCPC may assign its rights, together with its
obligations, hereunder (i) to any affiliate or (ii) to a third party in
connection with any sale, transfer or other disposition of all or substantially
all of any business to which the Executive's services are then principally
devoted, provided that no assignment pursuant to clause (ii) shall relieve RCPC
from its obligations hereunder to the extent the same are not timely discharged
by such assignee.
10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
10.6 This Agreement may be executed in two or
more counterparts, each of which shall he deemed to be an original but all of
which together will constitute one and the same instrument.
10.7 Immediately following the Effective Date,
RCPC shall promptly pay to the Executive an amount equal to the reasonable
professional fees that the Executive incurred to negotiate and prepare this
Agreement.
11. Subsidiaries and Affiliates.
---------------------------
As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written
REVLON CONSUMER PRODUCTS CORPORATION
By: _________________________________________
_____________________________________________
Xxxx X. Xxxxx, the Executive
