Exhibit 10.23
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement"), made as of the 1st day of August
1997, by and between Coty US Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000
(hereinafter "Employer"), Coty Inc., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, X.X.
00000 ("Coty"), a Delaware corporation (hereinafter "Coty"), and Xxxxx X.
XxXxxxxxx, 0000 Xxxxx Xxxxx, Xxxxxxx, XX 00000 (hereinafter referred to as
"Executive").
WHEREAS, Employer is a wholly-owned subsidiary of Coty; and
WHEREAS, in furtherance of Coty's commitment to the continued success of
its fragrances and cosmetics business, and in recognition of the valuable
contributions to be made by Executive because of his experience, Employer has
agreed to employ Executive subject to certain terms and conditions as
hereinafter set forth, and Executive has indicated his willingness to accept
such employment;
Now, therefore, in consideration of the promises and covenants hereinafter
set forth, the parties agree as follows:
1. Effective August 1, 1997 and during the term of this Agreement
Executive will be employed by Employer as Vice President Sales and will be paid
an annual salary of not less than $274,800 ("Base Salary"). In December 1997 and
thereafter, Employer will review Executive's salary on an annual basis, in
accordance with Employer's policies, to determine appropriate increases, if any.
In addition to salary, Executive will be eligible to continue to participate in
Coty's Annual Performance Plan (the "Performance Plan"). Executive's Target
Award under the Performance Plan will be 40% of Base Salary. In addition,
Executive will be eligible to continue to participate in Coty's Long-Term
Incentive Plan (the "LTIP").
2. The term of this Agreement will commence on the date hereof (the
"Commencement Date") and shall terminate on the third anniversary of the
Commencement Date; provided, that the term of Executive's employment hereunder
shall be automatically extended for successive one-year periods, unless not
later than six (6) months prior to such third anniversary or any such automatic
extension, the Company or the Executive shall have given notice of termination.
The "Term" shall be the initial 3-year term or, if applicable, a successive
1-year term, as referenced above.
3. Employer will continue to provide retirement, employee benefit (pre-
and post-retirement) and fringe benefit plans to Executive no less favorable
than those made available to Employer's executive employees generally. Executive
will be entitled to the use of an executive class company car at Employer's
expense on terms no less favorable
than those provided to Employer's executives generally. The Executive shall be
entitled to six (6) weeks paid vacation each year.
4. Executive agrees that he shall use his best efforts to promote and
protect the interests of Employer, its parent, subsidiaries and related
corporations, and to devote substantially all of his working time, attention and
energy to performing the duties of his position.
5. Executive will not either directly or indirectly use for his own
benefit, or disclose or make known to any person or company, any confidential
information in his possession, or which becomes known to him or is developed
while he has been or is employed by Employer (the "confidentiality provision").
In light of his position and the confidential information that necessarily will
be imparted to him, Executive agrees that he will not compete with Coty or the
Employer in the fragrance or color cosmetics business in the United States, or
solicit employees of Coty or the Employer during the period of his employment
hereunder and for a period of two (2) years from the date of Executive's
termination of employment (the "non-compete provision"). Notwithstanding the
preceding sentence, in the event Executive's employment terminates and Coty or
Employer enforces the "non-compete provision," and Executive is not receiving
any other payments from Employer or Coty as provided hereunder, Executive shall
be entitled to receive from Employer during the time, if any, the "non-compete
provision" is being enforced by Employer or Coty the Base Salary that Executive
was receiving at the time of such termination. The confidentiality provision
shall survive any termination of this Agreement.
6. (a) In the event that Employer terminates the employment of Executive
for reasons other than for Cause (as defined below) or Executive resigns for
Good Reason (as defined below), Executive shall be entitled to severance
benefits under Employer's policies. In addition, in such event Executive will be
paid his Base Salary through the end of the Term, plus any Awards deemed earned
and due and owing under the Performance Plan and less any severance payments
paid Executive pursuant to this Agreement.
(b) Executive shall be required to mitigate the amount of any payment
provided for pursuant to this Agreement by seeking other comparable employment
within a reasonable commuting distance of his home, taking into account the
provisions of Section 5 of this Agreement. Anything in this Agreement to the
contrary notwithstanding, in the event that Executive provides services for pay
to anyone other than Employer or any of its affiliates or subsidiaries from the
date Executive's employment hereunder is terminated until the end of the Term,
the amounts paid to Executive during such period pursuant to this Agreement
shall be reduced by the amounts of salary, bonus or other cash compensation
earned by Executive during such period as a result of Executive's performing
such services.
(c) For purposes of this Agreement: (i) "Cause" shall be limited to the
following:
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(A) Intentional malicious destruction of Employer or Coty property;
intentional or deliberate misconduct; intentional or deliberate failure to act
in the best interests of Employer or Coty or a significant breach of reasonable
rules established by Employer or Coty; provided, that Employer or Coty has
advised Executive of the charges against Executive and given Executive a
reasonable period of time to correct his conduct, actions or breach and
Executive has failed to do so; or
(B) Executive shall commit acts constituting a felony involving (1)
moral turpitude materially adversely reflecting on the Employer or (2)
dishonesty having a material adverse effect on the financial performance of the
Employer or Coty, provided in each case that until any dispute concerning the
applicability of this Section 6 (c) (i) (B) is resolved, Executive shall be paid
his Base Salary and continue to participate in Employer's benefit plans.
(C) Breach by Executive of the provisions of Section 5 hereof.
(D) Anything herein to the contrary notwithstanding, termination shall
not be considered to have been for Cause if caused by an act or omission
believed by Executive in good faith to have been in or not opposed to the
interests of Employer, without intent of gaining therefrom directly or
indirectly a profit to which Executive was not legally entitled, and reasonably
believed by him not to have been improper or unlawful.
(ii) "Good Reason" shall mean termination at the election of Executive
based on any of the following:
(A) Without Executive's express written consent, the assignment of
Executive to a position other than Vice President - Sales with day-to-day
responsibility and authority over Employer's sales department relating to the
fragrance and color cosmetics business of Employer, except in connection with
the termination of this employment for Cause, or normal retirement, death, or by
the Executive other than for Good Reason; or
(B) A reduction in Executive's fringe or retirement benefits as in
effect on the date hereof that is not applied by Employer to executives
generally or a reduction by Employer in Executive's Base Salary;
(C) The merger or consolidation of Employer into or with any other
entity other than Coty or a majority-owned subsidiary of Coty or Employer,
unless the entity which survives such merger shall assume and agree to perform
the obligations of Employer hereunder pursuant to an instrument reasonably
acceptable to Executive.
(D) The sale, transfer or other disposition of more than 30% of the
assets of Employer to an entity other than Coty or a majority-owned subsidiary
of Coty or Employer during the period commencing with the date of this Agreement
and ending on
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any date of determination, unless Coty shall jointly and severally assume the
obligations of Employer hereunder pursuant to an instrument reasonably
acceptable to Executive.
(E) Separation of Executive's office location from the principal
corporate office of Employer or relocation outside the contiguous United States.
7. Employer shall have the right to terminate the Agreement immediately
with no further liability under the terms of this Agreement, should Executive
terminate his employment without Good Reason, or if Executive is discharged by
Employer for Cause, subject to payments that are due under this Agreement.
8. If Executive is required to seek judicial enforcement of his rights
under this Agreement and Executive prevails in such proceeding, Executive shall
be entitled to be reimbursed by Employer for his reasonable attorney fees.
9. This Agreement shall be construed under the laws of the State of New
York.
10. This Agreement supersedes all prior agreements, negotiations and
understandings of any kind with respect to the subject matter hereof and
contains all of the terms and provisions of agreement between the parties hereto
with respect to the subject matter hereof. Specifically, and not by way of
limitation, the Employment Agreement dated June 16, 1992 and the amendment dated
September 26, 1994 relating to Executive are superseded hereby. Any
representation, promise or condition, whether written or oral, not specifically
incorporated herein, shall be of no binding effect upon the parties.
11. (a) If any portion of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, that portion only
shall be deemed deleted as though it had never been included herein but
the remainder of this Agreement shall remain in full force and effect.
(b) Executive acknowledges and agrees that Employer's remedies at law
for a breach or threatened breach of any of the provisions of Section 5 would be
inadequate and, in recognition of this fact, Executive agrees that, in the event
of such a breach or threatened breach, in addition to any remedies at law,
Employer, without posting any bond, shall be entitled to obtain equitable relief
in the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
(c) This Agreement shall not be assignable by Executive.
12. No modification, termination or waiver of any provision of this
Agreement shall be valid unless it is in writing and signed by all parties
hereto.
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13. Employer and Coty represent that each has all requisite power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement, and that this Agreement is enforceable against each in
accordance with its terms.
COTY INC.
By /s/ Xxxx-Xxxxx Xxxxxxx
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Name: Xxxx-Xxxxx Xxxxxxx
Title: Executive Vice President
COTY US INC.
Employer
By /s/ Xxxx-Xxxxx-Xxxxxxx
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Name: Xxxx-Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
Agreed to by:
/s/ Xxxxx X. XxXxxxxxx
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Executive
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