EXHIBIT 10.2
DISPUTES RELATING TO THIS AGREEMENT ARE REQUIRED TO BE SETTLED PURSUANT TO
CERTAIN DISPUTE RESOLUTION PROCEDURES AS PROVIDED IN ARTICLE 7 AND APPENDIX A OF
THIS AGREEMENT.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into between
Xxxxxx X. XxXxxx ("Employee"), and Tristar USA, Inc., a Delaware corporation
("Company"), whose principal executive offices are located in New York, New
York, on the 10 day of November, 1999.
WHEREAS, Company desires to employ Employee, and Employee desires to be
employed by Company, on terms hereinafter set forth;
NOW, THEREFORE, in consideration for the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DUTIES
1.1 EMPLOYMENT. During the term of this Agreement, Company agrees to
employ Employee as Executive Vice President Sales, Fragrance Impressions Limited
Division, and Employee accepts such employment, on the terms and conditions set
forth in this Agreement.
1.2 EXTENT OF SERVICE. During the term of this Agreement, Employee shall
devote substantially all of his business time, energy and skill to the affairs
of Company and its affiliated companies, and Employee shall not be engaged in
any other business or consulting activities pursued for gain, profit or other
pecuniary advantage. The foregoing shall not prevent Employee from engaging in
business or consulting activities or from making monetary investments in
businesses, provided that such business and consulting activities and such
investments do not substantially interfere with Employee's duties hereunder.
1.3 DUTIES. Employee shall be responsible for managing the sales and
marketing for Company and his duties shall include such duties relating to sales
and marketing as may be prescribed from time to time by Employee's supervisors
or the Board of Directors of Company (the "Board"). Employee shall also perform,
without additional compensation, similar duties for Company's affiliated
companies. Employee shall also serve, without additional compensation, as a
member of the Executive Committee of the management of Tristar Corporation, a
Delaware corporation and the parent of Company ("Tristar"), during the term of
this Agreement. Such committee is not a committee of the Board of Directors of
Tristar. Employee's supervisors shall be the President and Chief Executive
Officer of Tristar and the Vice President of Marketing for Tristar,
and Employee shall coordinate all marketing for Company with the Vice President
of Marketing for Tristar.
1.4 ACCESS TO AND USE OF PROPRIETARY INFORMATION. Employee recognizes
that, to assist Employee in the performance of his duties hereunder, Employee
will be provided access to and limited use of proprietary and confidential
information of Company, Tristar and their affiliates. Employee further
recognizes that, as a part of his employment with Company, Employee will benefit
from, and Employee's qualifications will be enhanced by, additional training,
education and experience which will be provided to Employee by Company directly
and/or as a result of work projects assigned by Company in which proprietary and
confidential information of Company and Tristar is utilized by Employee.
1.5 PRINCIPAL OFFICE. During the term of this Agreement, Employee's
principal office with Company shall be within a 25 mile radius of Bridgeport,
Connecticut or New York, New York.
ARTICLE 2
TERM OF EMPLOYMENT
The term of this Agreement (the "Term") shall commence on the date hereof
and continue until the earlier of (i) six-months after either party gives
written notice of termination, provided such termination may not be effective
until November 30, 2001, and (ii) termination pursuant to Article 4 hereof.
ARTICLE 3
COMPENSATION
3.1 MONTHLY BASE SALARY. As compensation for services rendered under this
Agreement, Employee shall be entitled to receive from Company a monthly base
salary (before standard deductions) equal to $18,750, subject to periodic review
and upward adjustment by the Board in its sole discretion (downward adjustment
shall not be permitted) (the "Salary"). Employee's monthly base salary shall be
payable at regular intervals (at least semi-monthly) in accordance with the
prevailing practice and policy of Company.
3.2 MANAGEMENT BONUS OBJECTIVES. Employee is eligible to receive a
Management Bonus as following: for the period from the date hereof to the end of
Company's fiscal year in 2000 and thereafter for each fiscal year of Company
during the Term (each a "Bonus Period"), Employee and the Board shall mutually
agree upon objectives ("Management Objectives") relating to Company management
and operations that Employee should achieve during such Bonus Period; provided
that if the Board and Employee are unable to agree on the Management Objectives,
the Management Objectives shall be determined by the Board in good faith. Each
Management Objective will be assigned a percentage, with the aggregate
percentage of the Management Objectives for each Bonus Period equal to 100%. To
the extent Employee achieves a particular Management Objective in a Bonus
Period, as determined by the Board, Employee will be credited with that portion
of the
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percentage assigned to such management Objective. The percentages credited to
Employee for the particular Bonus Period will be aggregated and the aggregate
percentage will be multiplied by the maximum Management Bonus available for such
Bonus Period. The maximum Management Bonus available for the Bonus Period from
the date hereof to the end of the Company's fiscal year in 2000, will be
$53,625.00 and the maximum Management Bonus for each Bonus Period thereafter
will be 30% of the Salary earned during such Bonus Period prior to the
termination of this Agreement.
3.3 SALES INCENTIVE BONUS. As of January 1, 2001, the Net Sales of Company
shall be determined for the preceding 12-month period. To the extent Net Sales
for such 12-month period (the "2000 Net Sales") exceed $12,000,000, employee
shall be paid a cash bonus of 2% of the Net Sales that exceed $12,000,000. Again
on January 1, 2002, the Net Sales of Company shall be determined for the
preceding 12-month period. To the extent Net Sales for such 12-month period
exceed the greater of $12,000,000 and the 2000 Net Sales, Employee shall be paid
a cash bonus of 2% of the Net Sales that exceed such greater amount. The bonus,
if any, to which Employee is entitled pursuant to this subsection, shall be in
addition to the Management Bonus referenced above in SECTION 3.2, and shall be
paid on or before 90-days after the end of the applicable 12-month period. For
purposes of this SECTION 3.3, "NET SALES" shall mean Gross Sales less returns
and allowances, and "GROSS SALES" means the total gross revenues earned by the
Company by selling product during the applicable 12-month period, as determined
in accordance with generally accepted accounting principles and historical
accounting practices of Fragrance Impressions Limited, a Connecticut corporation
("FIL"), consistently applied with periods prior to the date hereof, which shall
include all sales by Tristar Corporation, a Delaware corporation and the parent
of Company ("Tristar") or an affiliate of Tristar to existing customers of
existing SKUs of FIL and any new customers in the chain drug, mass merchants,
supermarket chains and speciality chain markets with respect to existing or new
SKUs of FIL.
3.4 BENEFITS. Employee shall, in addition to the compensation provided for
herein, be entitled to the following additional benefits:
(a) MEDICAL, HEALTH AND DISABILITY BENEFITS. Employee shall be
entitled to receive all medical, health and disability benefits that may,
from time to time, be provided to senior management personnel of Tristar,
as a group.
(b) OTHER BENEFITS. Employee shall also be entitled to receive any
other benefits that may, from time to time, be provided by Company to all
employees of Company as a group.
(c) VACATION. Employee shall be entitled to an annual vacation as
determined in accordance with the prevailing practice and policy of
Company.
(d) HOLIDAYS. Employee shall be entitled to holidays in accordance
with the prevailing practice and policy of Company.
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(e) REIMBURSEMENT OF EXPENSES. Company shall reimburse Employee for
all expenses reasonably incurred by Employee in conjunction with the
rendering of services at Company's request, provided that such expenses
are incurred in accordance with the prevailing practice and policy of
Company and are properly deductible by Company for federal income tax
purposes. As a condition to such reimbursement, Employee shall submit an
itemized accounting of such expenses in reasonable detail, including
receipts where required under federal income tax laws.
(f) CAR ALLOWANCE. Employee shall be entitled to receive a car
allowance of $500 per month, PRO RATED for any partial month.
ARTICLE 4
TERMINATION
4.1 TERMINATION WITH NOTICE. This Agreement may be terminated by Company
at any time, without Cause (hereinafter defined), immediately upon written
notice thereof given by Company to Employee. In the event of termination
effected by Company pursuant to this SECTION 4.1, Company shall pay Employee his
then current monthly base salary (subject to standard deductions) from the
effective date of such termination through the end of the Term either, at the
Company's election, (i) in a lump sum payment on or before 30 days after such
termination is effective or (ii) at regular intervals (at least semi-monthly) in
accordance with the prevailing practice and policy of Company (the "Severance").
Additionally, upon such termination Company shall continue to provide the
medical and health benefits set forth in SECTION 3.4(A) until the expiration of
the Term. Upon termination pursuant to this SECTION 4.1, other than payment of
the Severance and the provision of medical and health benefits set forth above,
Company shall have no further obligations to Employee hereunder.
4.2 TERMINATION FOR CAUSE. This Agreement may be terminated by Company for
Cause upon written notice thereof given by Company to Employee. In the event of
termination pursuant to this SECTION 4.2, Company shall pay Employee his monthly
base salary (subject to standard deductions) earned PRO RATA to the date of such
termination and Company shall have no further obligations to Employee hereunder.
The term "Cause" shall include, without limitation, the following, as determined
by the Board in its sole judgment: (i) Employee wilfully breaches any of the
material terms of this Agreement; (ii) Employee is convicted of a felony; (iii)
Employee fails, after at least one warning, to perform reasonable duties
assigned under this Agreement (other than a failure due to death or physical or
mental disability); (iv) Employee intentionally engages in conduct which is
demonstrably and materially injurious to Company; (v) Employee commits fraud or
theft of personal or Company property from Company premises; (vi) Employee
falsifies Company documents or records; (vii) Employee engages in acts of gross
carelessness or willful negligence that endanger life or property on Company
premises; (viii) Employee uses, distributes or is under the influence of illegal
drugs, alcohol or any other intoxicant on Company premises; (ix) Employee
possesses or stores hand guns on Company premises; (x) Employee commits any act
of sexual
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harassment with respect to any other employee of Company; or (xi) Employee
intentionally violates state, federal or local laws and regulations.
4.3 TERMINATION UPON DEATH OR DISABILITY. In the event that Employee dies,
this Agreement shall terminate upon Employee's death. Likewise, if Employee
becomes unable to perform the essential functions of his duties hereunder, with
or without reasonable accommodation, on account of illness, disability or other
reason whatsoever for a period of more than 180 consecutive or nonconsecutive
days in any 12-month period, Company may, upon notice to Employee, terminate
this Agreement. In the event of termination pursuant to this SECTION 4.3,
Employee (or his legal representatives) shall be entitled only to his monthly
base salary earned PRO RATA for services actually rendered prior to the date of
such termination; PROVIDED, HOWEVER, Employee shall not be entitled to his
monthly base salary for any period with respect to which Employee has received
short-term or long-term disability benefits under employee benefit plans
maintained from time to time by Company.
ARTICLE 5
PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION
5.1 CONFIDENTIAL INFORMATION. During the course of performing his services
pursuant to this Agreement, Employee acknowledges that he will have access to
trade secrets, proprietary information and other information concerning Tristar
Corporation and its products and business which Tristar Corporation maintains
confidential and is not generally available to the public ("Confidential
Information"). Without the prior written consent of Tristar Corporation,
Employee will not, at any time during or following the term of this Agreement,
disclose to any third person, or use for the benefit of Employee or any third
person, any Confidential Information acquired by Employee from Tristar
Corporation during the term of this Agreement. The foregoing restrictions will
not apply to any information which (a) becomes available to the public generally
(otherwise than by reason of Employee's breach of the provisions of this
Section), (b) can be shown by written records to have been known by Employee
prior to the date of this Agreement, or (c) is lawfully acquired by Employee
from another person. In the event Confidential Information is required to be
disclosed by Employee under court or governmental order, rule or regulation,
Employee shall immediately provide Tristar Corporation with notice thereof at
the address provided for Company below and shall give full and complete
cooperation to Tristar Corporation in its efforts to object to, and to obtain
protection of any Confidential Information that is the subject of, such required
disclosure. Upon termination of this Agreement, regardless of how such
termination may be brought about, Employee agrees to deliver to Tristar
Corporation or to destroy, at the option of Tristar Corporation, all
Confidential Information in the possession or control of Employee.
5.2 PUBLICITY. During the term of this Agreement and for a period of ten
years thereafter, Employee shall not, directly or indirectly, originate or
participate in the origination of any publicity, news release or other public
announcements, written or oral, whether to the public press or otherwise,
relating to this Agreement, to any amendment hereto, to Employee's employment
hereunder or to Tristar Corporation, without the prior written approval of
Company.
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5.3 EQUITABLE RELIEF. In the event of a breach or a threatened breach by
Employee of any of the provisions contained in this ARTICLE 5, Employee
acknowledges that Tristar Corporation will suffer irreparable injury not fully
compensable by money damages and, therefore, will not have an adequate remedy
available at law. Accordingly, Tristar Corporation shall be entitled, without
the necessity of posting a bond, to obtain such injunctive relief or other
equitable remedy from any court of competent jurisdiction as may be necessary or
appropriate to prevent or curtail any such breach, threatened or actual. The
foregoing shall be in addition to and without prejudice to any other rights that
Tristar Corporation may have under this Agreement, at law or in equity,
including, without limitation, the right to xxx for damages.
5.4 TRISTAR CORPORATION DEFINED. When used in this ARTICLE 5 and in
ARTICLE 6, "Tristar Corporation" includes Company, Tristar, and all affiliates
and subsidiaries of Tristar.
ARTICLE 6
RESTRICTIVE COVENANTS
6.1 NON-COMPETITION. In consideration of the benefits of this Agreement,
including Employee's access to and limited use of proprietary and confidential
information of Tristar Corporation, as well as training, education and
experience provided to Employee by Tristar Corporation directly and/or as a
result of work projects assigned by Tristar Corporation with respect thereto,
Employee hereby covenants and agrees that during the term of this Agreement and
for a period of 3 years following termination of this Agreement, regardless of
how such termination may be brought about, Employee shall not, directly or
indirectly, as proprietor, partner, stockholder, director, officer, employee,
consultant, joint venturer, investor or in any other capacity, engage in, or
own, manage, operate or control, or participate in the ownership, management,
operation or control, of any entity which engages in any of Tristar
Corporation's geographical or commercial markets in the business of developing,
manufacturing, marketing and distributing designer alternative fragrances, body
sprays or cosmetic pencils; PROVIDED, HOWEVER, the foregoing shall not, in any
event, prohibit Employee from purchasing and holding as an investment not more
than 1% of any class of publicly traded securities of any entity which conducts
a business in competition with the business of Tristar Corporation, so long as
Employee does not participate in any way in the management, operation or control
of such entity. It is further recognized and agreed that, even though an
activity may not be restricted under the foregoing provision, Employee shall not
during the term of this Agreement and for a period of 12 months following
termination of this Agreement, regardless of how such termination may be brought
about, provide any services to any person or entity which may be used against,
or in conflict with the interests of, Tristar Corporation or its customers or
clients.
6.2 JUDICIAL REFORMATION. Employee acknowledges that, given the nature of
Tristar Corporation's business, the covenants contained in SECTION 6.1 establish
reasonable limitations as to time, geographic area and scope of activity to be
restrained and do not impose a greater restraint than is reasonably necessary to
protect and preserve the goodwill of Tristar Corporation's business and to
protect its legitimate business interests. If, however, SECTION 6.1 is
determined by any court
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of competent jurisdiction to be unenforceable by reason of its extending for too
long a period of time or over too large a geographic area or by reason of it
being too extensive in any other respect or for any other reason, it will be
interpreted to extend only over the longest period of time for which it may be
enforceable and/or over the largest geographic area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it may
be enforceable, all as determined by such court.
6.3 CUSTOMER LISTS; NON-SOLICITATION. In consideration of the benefits of
this Agreement, including Employee's access to and limited use of proprietary
and confidential information of Tristar Corporation, as well as training,
education and experience provided to Employee by Tristar Corporation directly
and/or as a result of work projects assigned by Tristar Corporation with respect
thereto, Employee hereby further covenants and agrees that for a period of 5
years following the termination of this Agreement, regardless of how such
termination may be brought about, Employee shall not, directly or indirectly,
(a) use or make known to any person or entity the names or addresses of any
clients or customers of Tristar Corporation or any other information pertaining
to them, (b) call on, solicit, take away or attempt to call on, solicit or take
away any clients or customers of Tristar Corporation on whom Employee called or
with whom he became acquainted during his employment with Company, nor (c)
recruit, hire or attempt to recruit or hire any employees of Tristar
Corporation.
6.4 EQUITABLE RELIEF. In the event of a breach or a threatened breach by
Employee of any of the provisions contained in this ARTICLE 6, Employee
acknowledges that Tristar Corporation will suffer irreparable injury not fully
compensable by money damages and, therefore, will not have an adequate remedy
available at law. Accordingly, Tristar Corporation shall be entitled, without
the necessity of posting a bond, to obtain such injunctive relief or other
equitable remedy from any court of competent jurisdiction as may be necessary or
appropriate to prevent or curtail any such breach, threatened or actual. The
foregoing shall be in addition to and without prejudice to any other rights that
Tristar Corporation may have under this Agreement, at law or in equity,
including, without limitation, the right to xxx for damages.
ARTICLE 7
ARBITRATION
Except for the provisions of ARTICLES 5 and 6 of this Agreement dealing
with proprietary property, confidential information and restrictive covenants,
with respect to which Company expressly reserves the right to petition a court
directly for injunctive and other relief, any claim, dispute or controversy of
any nature whatsoever, including but not limited to tort claims or contract
disputes between the parties to this Agreement or their respective heirs,
executors, administrators, legal representatives, successors and assigns, as
applicable, arising out of or related to Employee's employment or the terms and
conditions of this Agreement, including the implementation, applicability or
interpretation thereof, shall be resolved in accordance with the dispute
resolution procedures set forth in APPENDIX A attached hereto and made a part
hereof.
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ARTICLE 8
MISCELLANEOUS
8.1 SURVIVAL OF PROVISIONS. The covenants and provisions of ARTICLES 5, 6
and 7 hereof shall survive any termination of this Agreement and continue for
the periods indicated, regardless of how such termination may be brought about.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by an overnight
delivery service with tracking procedures or by facsimile to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice: If to Employee, at the address set forth below his name
on the signature page hereof; and if to Company, at 00000 Xxx Xxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000, Attention:
Chief Financial Officer.
8.3 NO RIGHTS IN CONTRACTS. Employee acknowledges and agrees that he or
she shall not have any rights in or to any contracts entered into with clients
or customers of Company in connection with services provided by Employee
hereunder (including those in which Employee may be specifically named with
Company), unless otherwise agreed to in writing by Company.
8.4 ASSIGNMENT. The rights and obligations of Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of Company; provided that Company may only assign this Agreement to an
affiliate or subsidiary of Tristar. Employee's rights under this Agreement are
not assignable and any attempted assignment thereof shall be null and void.
8.5 GOVERNING LAW; JURISDICTION; VENUE. This Agreement shall be subject to
and governed by the laws of the State of Connecticut without regard to conflict
of law principles. Subject to the provisions of ARTICLE 7 hereof, the parties
agree to submit to the jurisdiction of the federal and state courts of the State
of Connecticut and the State of New York with respect to the breach or
interpretation of this Agreement or the enforcement of any and all rights,
duties, liabilities, obligations, powers and other relations among the parties
arising under this Agreement. Subject to the provisions of ARTICLE 7 hereof,
non-exclusive venue for any action permitted hereunder shall be proper in
Bridgeport, Fairfield County, Connecticut and New York, New York County, New
York, and the parties hereby consent to the jurisdiction of Connecticut and New
York courts and to such venues.
8.6 GUARANTEE. Tristar hereby guarantees the payment obligations of
Company hereunder.
8.7 ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement between the parties and supersedes all other agreements between the
parties which may relate to the
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subject matter contained in this Agreement. This Agreement may not be amended or
modified except by an agreement in writing which refers to this Agreement and is
signed by both parties.
8.8 HEADINGS. The headings of sections and subsections of this Agreement
are for convenience only and shall not in any way affect the interpretation of
any provision of this Agreement or of the Agreement itself.
8.9 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
8.10 WAIVER. The waiver by any party of a breach of any provision hereof
shall not be deemed to constitute the waiver of any prior or subsequent breach
of the same provision or any other provisions hereof. Further, the failure of
any party to insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement unless such party expressly waives such provision pursuant to
a written instrument which refers to this Agreement and is signed by such party.
8.11 REVIEW OF COUNSEL. Each party acknowledges that it and its counsel
have received, reviewed and been involved in the drafting of this Agreement and
that normal rules of construction, to the effect that ambiguities are to be
resolved against the drafting party, shall not apply.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
TRISTAR USA, INC.
By: _____________________________________
Xxxxxx X. Xxxxx
Executive Vice President
EMPLOYEE:
_________________________________________
Xxxxxx X. XxXxxx
Address: 00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
The undersigned joins for the sole purpose of agreeing to the provisions of
SECTION 8.6 hereof.
TRISTAR CORPORATION
By: ____________________________________
Xxxxxx X. Xxxxx
Executive Vice President
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APPENDIX A
DISPUTE RESOLUTION PROCEDURES
Re: Employment Agreement dated November 10, 1999 (including any amendments,
the "Agreement"), between Tristar USA, Inc., a Delaware corporation ("Company"),
and Xxxxxx X. XxXxxx ("Employee"). Unless otherwise defined in this APPENDIX A,
terms defined in the Agreement and used herein shall have the meanings set forth
therein.
A. NEGOTIATIONS. If any claim, dispute or controversy described in ARTICLE
7 of the Agreement (collectively, the "Dispute") arises, either party may, by
written notice to the party, have the Dispute referred to the persons designated
below for attempted resolution by good faith negotiations within 45 days after
such written notice is received. Such designated persons are as follows:
1. COMPANY. The Chairman of the Board and Chief Executive Officer or
his designee; and
2. EMPLOYEE. Employee or his designee.
Any settlement reached by the parties under this PARAGRAPH A shall not be
binding until reduced to writing and signed by both parties. When reduced to
writing, such settlement agreement shall supersede all other agreements, written
or oral, to the extent such agreements specifically pertain to the matters so
settled. If the above-designated persons are unable to resolve such dispute
within such 45-day period, either party may invoke the provisions of PARAGRAPH B
below.
B. ARBITRATION. All Disputes shall be settled by negotiation among the
parties as described in PARAGRAPH A above or, if such negotiation is
unsuccessful, by binding arbitration in accordance with procedures set forth in
PARAGRAPHS C and D below.
C. NOTICE. Notice of demand for binding arbitration by one party shall be
given in writing to the other party pursuant to the Agreement. In no event may a
notice of demand of any kind be filed more than one (1) year after the date the
Dispute is first asserted in writing to the other party pursuant to PARAGRAPH A
above, and if such demand is not timely filed, the Dispute referenced in the
notice given pursuant to PARAGRAPH A above shall be deemed released, waived,
barred and unenforceable for all time, and barred as if by statute of
limitations.
D. BINDING ARBITRATION. Upon filing of a notice of demand for binding
arbitration by either party, arbitration shall be commenced and conducted as
follows:
1. ARBITRATORS. All Disputes and related matters in question shall be
referred to and decided and settled by a panel of three arbitrators, one
selected by Company, one selected by Employee and the third selected by the two
arbitrators so selected. Selection of the arbitrators to be
A-1
selected Company and Employee shall be made within ten (10) business days after
the date of giving of a notice of demand for arbitration, and the two
arbitrators so appointed shall appoint the third within 10 business days
following their appointment. No person who has a bias, or financial or personal
interest in the result of the arbitration or any past or present relationship
with the parties or their representatives shall serve as arbitrator
2. COST OF ARBITRATION. The cost of arbitration proceedings, including
without limitation the arbitrators' compensation and expenses, hearing room
charges, court reporter transcript charges etc., shall be borne by the parties
equally or otherwise as the arbitrators may determine. The arbitrators may award
the prevailing party its reasonable attorneys' fees and costs incurred in
connection with the arbitration. The arbitrators are specifically instructed to
award attorneys' fees for instances of abuse in the discovery process.
3. LOCATION OF PROCEEDINGS. The arbitration proceedings shall be held
in the city and state where Employee's principal office with Company is located
at such time or, if Employee is not employed by Company at the time of such
arbitration proceedings, in the city and state where Company's principal office
with Company was located immediately prior to the termination of Employee's
employment with Company, unless the parties agree otherwise.
4. PRE-HEARING DISCOVERY. The parties shall have the right to conduct
and enforce pre- hearing discovery in accordance with the then current Federal
Rules of Civil Procedure, subject to these limitations:
(a) Each party may serve no more than one set of interrogatories
limited to 30 questions, including sub-parts;
(b) Each party may depose the other party's expert witnesses who
will be called to testify at the hearing, plus two fact witnesses without
regard to whether they will be called to testify (each party will be
entitled to a total of no more than 24 hours of deposition time of the
other party's witnesses), provided however, that the arbitrators may
provide for additional depositions upon showing of good cause; and
(c) Document discovery and other discovery shall be under the
control of and enforceable by the arbitrators.
5. DISCOVERY DISPUTES. All discovery disputes shall be decided by the
arbitrators. The arbitrators are empowered;
(a) to issue subpoenas to compel pre-hearing document or
deposition discovery;
(b) to enforce the discovery rights and obligations of the
parties; and
(c) to otherwise to control the scheduling and conduct of the
proceedings.
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Notwithstanding any contrary foregoing provisions, the arbitrators shall have
the power and authority to, and to the fullest extent practicable shall,
abbreviate arbitration discovery in a manner which is fair to all parties in
order to expedite the conclusion of each alternative dispute resolution
proceeding.
6. PRE-HEARING CONFERENCE. Within fifteen (15) days after selection of
the third arbitrator, or as soon thereafter as is mutually convenient to the
arbitrators, the arbitrators shall hold a pre- hearing conference to establish
schedules for completion of discovery, for exchange of exhibit and witness
lists, for arbitration briefs and for the hearing, and to decide procedural
matters and address all other questions that may be presented.
7. HEARING PROCEDURES. The hearing shall be conducted to preserve its
privacy and to allow reasonable procedural due process. Rules of evidence need
not be strictly followed, and the hearing shall be streamlined as follows:
(a) Documents shall be self-authenticating, subject to valid
objection by the opposing party;
(b) Expert reports, witness biographies, depositions and
affidavits may be utilized, subject to the opponent's right of a live
cross-examination of the witness in person;
(c) Charts, graphs and summaries shall be utilized to present
voluminous data, provided (i) that the underlying data is made available to
the opposing party thirty (30) days prior to the hearing, and (ii) that the
preparer of each chart, graph or summary is available for explanation and
live cross-examination in person;
(d) The hearing should be held on consecutive business days
without interruption to the maximum extent practicable; and
(e) The arbitrators shall establish all other procedural rules for
the conduct of the arbitration in accordance with the rules of arbitration
of the Center for Public Resources.
8. GOVERNING LAW. This arbitration provision shall be governed by, and
all rights and obligations specifically enforceable under and pursuant to, the
Federal Arbitration Act (9 U.S.C. ss. 1, ET SEQ.)
9. CONSOLIDATION. No arbitration shall include, by consolidation,
joinder or in any other manner, any additional person not a party to the
Agreement, except by written consent of both parties containing a specific
reference to these provisions.
10. AWARD. The arbitrators are empowered to render an award of general
compensatory damages and equitable relief (including, without limitations,
injunctive relief), but are not empowered to award exemplary, special or
punitive damages. The award rendered by the arbitrators
A-3
(a) shall be final, (b) shall not constitute a basis for collateral estoppel as
to any issue and (c) shall not be subject to vacation or modification.
11. CONFIDENTIALITY. The parties hereto will maintain the substance of
any proceedings hereunder in confidence and the arbitrators, prior to any
proceedings hereunder, will sign an agreement whereby the arbitrators agree to
keep the substance of any proceedings hereunder in confidence.
A-4
EXHIBIT A
LONG-TERM INCENTIVE PLAN
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (this "Agreement") dated as of the Grant Date (the
"Grant Date") set forth on Schedule I hereto, between TRISTAR CORPORATION, a
Delaware corporation (the "Company"), and the employee of the Company or of a
subsidiary of the Company identified on Schedule I hereto (the "Employee").
On the Grant Date the Company granted to the Employee the option or options
hereinafter described pursuant to, and subject to and upon the terms and
conditions set forth in, the Tristar Corporation Long-Term Incentive Plan, as
amended from time to time (the "Plan"), and promptly thereafter notified the
Employee of the grant of such option or options.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto hereby
agree as follows:
1. GRANT OF OPTION.
(a) On the Grant Date, the Company irrevocably granted to the Employee,
as a matter of separate agreement and not in lieu of salary or any other
compensation for services, the right and option to purchase all or any part
of the aggregate number of shares of its Common Stock, par value $.01 per
share (the "Common Stock"), set forth on Schedule I hereto, on the terms
and conditions herein set forth.
(b) To the extent set forth in Schedule I hereto, the right and option
to purchase shares of Common Stock are intended to be an incentive stock
option (an "ISO") within the meaning of Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code"). To the extent such right and
option to purchase shares of Common Stock as set forth on Schedule I hereto
is not identified as being intended to be an ISO, such right and option
will be considered a non-statutory option. In addition, to the extent that
a right and option to purchase shares of Common Stock intended to be an ISO
does not qualify as an ISO, such right and option, to the extent that it
does not so qualify, shall be converted to a non-statutory option.
(c) The ISOs and non-statutory stock options granted to the Employee
hereunder are each referred to as an "Option" and collectively referred to
as the "Options".
Exhibit A-1
2. TERMS.
(a) EXERCISE PRICE. The exercise price per share for the shares of
Common Stock subject to an Option granted hereunder shall be the per share
amount set forth in Schedule I hereto for such Option (the "Exercise
Price"). With respect to any Option that is intended to be an ISO, the
Exercise Price shall not be less than the fair market value per share
(determined as of the date the Option is granted) of the Common Stock on
such date.
(b) VESTING. Subject to the provisions of Section 4 of this Agreement
and the provisions of the Plan, the Option or Options granted hereunder
shall become exercisable as to the portions of the aggregate number of
shares covered by such Option as set forth on Schedule I hereto on and
after each of the related dates during the term of such Option set forth on
Schedule I hereto.
(c) TERM AND CONDITIONS OF EXERCISE. An Option granted hereunder shall
be exercisable in whole at any time or in part from time to time during the
term of such Option as to all or any of the shares then purchasable under
such Option, but not as to less than the minimum number of shares stated on
Schedule I hereto with respect to such Option (or the shares then
purchasable under the Option if less than such minimum) at any one time;
provided that if there is a Tandem SAR (as defined in the Plan) outstanding
which relates to any of the shares purchasable under such Option, then the
number of shares so purchasable shall be reduced by the number of shares in
respect of which the Tandem SAR has been exercised.
The term of the Option or Options subject hereto shall be for the
number of years from the Grant Date set forth on Schedule I hereto with
respect to such Option or such shorter period of time as is described in
Section 4. In no event shall the term of the Option exceed ten years from
the Grant Date.
Except as provided in Section 4, an Option granted hereunder shall not
be exercisable unless the Employee shall, at the time of exercise, be an
employee of the Company or of a subsidiary of the Company. The holder of
such Option shall have none of the rights of a shareholder with respect to
the shares subject to such Option until such shares are transferred to the
holder upon the exercise of such Option.
3. RESTRICTIONS ON TRANSFER. An Option granted hereunder shall not be
assignable or transferrable by the Employee except by will or by the laws of
descent and distribution, and subject to Section 4(a), such Option is
exercisable, during the Employee's lifetime, only by the Employee. The
designation of a beneficiary by the Employee shall not constitute a transfer.
More particularly (but without limiting the generality of the foregoing), such
Option may not be assigned, transferred (except as aforesaid), pledged or
encumbered in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process. In the event of any
attempted assignment, transfer, pledge, encumbrance or other disposition of such
Option contrary to the
Exhibit A-2
provisions hereof, or the levy of any attachment or similar process upon such
Option, such Option shall be null and void and of no further effect.
4. STATUS OF OPTION UPON CERTAIN EVENTS. If the Employee's employment shall
terminate prior to the complete exercise of an Option granted hereunder, then
such Option shall thereafter be exercisable solely to the extent provided in
paragraphs (a) through (c) of this Section 4; provided, however, that (i) such
Option may not be exercised after the scheduled expiration date and (ii) if the
Employee's employment terminates for any reason other than as contemplated by
paragraphs (a) through (c) of this Section 4, the Option shall remain
exercisable for a period of 30 days following such termination (but in no event
shall such period extend beyond the scheduled expiration of such Option) at
which time such Option shall immediately terminate and be forfeited, but only
for the number of shares for which such Option shall have vested as provided on
Schedule I hereto as of the date of such termination.
(a) DEATH OR DISABILITY OR RETIREMENT. If the Employee shall die, be
subject to Disability (as defined in Section 22(e)(3) of the Code) while
employed by the Company or a subsidiary or retire (as such term is used in
any of the Company's pension plans), an Option granted hereunder (unless
previously terminated pursuant to paragraphs (b) or (c) below) may be
exercised as follows: (i) in the case of death, in full for the aggregate
number of shares covered thereby by the legatee or legatees of such Option
under the Employee's last will, or by the personal representatives or
distributees of the Employee, at any time within a period of one year after
the Employee's death, but in no event after the expiration of such Option
set forth in Section 2(c); (ii) in the case of Disability while employed by
the Company or a subsidiary, in full for the aggregate number of shares
covered thereby by the Employee or by the personal representatives of the
Employee if the Employee is unable to act for himself or herself, at any
time within a period of one year after the Employee ceases to be an
employee of the Company or one of its subsidiaries, but in no event after
the expiration of such Option set forth in Section 2(c) herein; and (iii)
in the case of retirement, for (a) the number of shares for which such
Option shall have vested as provided on Schedule I hereto as of the date of
such retirement, and (b) so long as the Employee does not become employed
by a "competitor" of the Company subsequent to such retirement, such
additional number of shares which shall thereafter become vested subsequent
to the date of such retirement pursuant to the Vesting Schedule set forth
on Schedule I hereto; by the Employee or by the personal representatives of
the Employee if the Employee is unable to act for himself or herself, at
any time within a period of five years after the date of such retirement,
but in no event after the expiration of the Option set forth in Section
2(c) herein. A determination as to whether the Employee has become employed
by a "competitor," and the definition of "competitor," shall be made by the
Compensation Committee of the Company (the "Committee"), in its sole
discretion. If an ISO is exercised more than three months after the
Employee's retirement and the Employee has not died or incurred a
Disability, such Option will be converted to a non-statutory option.
(b) TERMINATION WITH CAUSE. If the Employee's employment with the
Company or a subsidiary shall be terminated by the Company or such
subsidiary for "cause" (as
Exhibit A-3
defined below) prior to the exercise of any part of the Option or Options
granted hereunder, then such Option or Options held by the Employee shall
immediately terminate and be forfeited unless the Committee, in its sole
discretion, shall otherwise determine. For purposes hereof, the term
"cause" shall have the meaning assigned thereto in that certain Employment
Agreement, dated of even date herewith, between the Employee and Tristar
USA, Inc., a Delaware corporation and a subsidiary of the Company.
(c) CHANGE IN EMPLOYMENT. The Option or Options granted hereunder shall
not be affected by any change of employment (or by any temporary leave of
absence approved by the Committee or by the Board itself), so long as the
Employee continues to be in the employ of the Company or of a subsidiary of
the Company.
5. ADJUSTMENTS. If all or any portion of an Option granted hereunder is
exercised subsequent to any stock dividend, stock split, recapitalization,
combination, exchange of shares, merger, consolidation, liquidation, split-up,
split-off, spin-off or other similar change in capitalization, any distribution
to stockholders, including a rights offering, other than regular cash dividends,
changes in the outstanding stock of the Company by reason of any increase or
decrease in the number of issued shares of Common Stock resulting from a
split-up or consolidation of shares or any similar capital adjustment or the
payment of any stock dividend, any share repurchase at a price in excess of the
closing market price (as determined by the Committee) of the Common Stock at the
time such repurchase is announced or other increase or decrease in the number of
such shares, the Committee may make such appropriate adjustments in the purchase
price paid upon exercise of such Option and the aggregate number and class of
shares or other securities or property issuable upon any such exercise as the
Committee shall, in its sole discretion, determine. In any such event, no
fractional share shall be issued upon any such exercise, and the aggregate price
paid shall be appropriately reduced on account of any fractional share not
issued; further, the minimum number of full shares which may be purchased upon
any such exercise shall be the minimum number specified on Schedule I hereto
adjusted proportionately.
6. PAYMENT; METHOD OF EXERCISE. Payment of the purchase price of the shares
of Common Stock subject to an Option granted hereunder may be made (i) in any
combination of cash or whole shares of Common Stock already owned by the
Employee or (ii) in shares of Common Stock withheld by the Company from the
shares of Common Stock otherwise issuable to the Employee as a result of the
exercise of such Option ("cashless exercise"). Subject to the terms and
conditions of this Agreement, such Option may be exercised by written notice to
the Company at its principal office, attention of the Secretary. Such notice
shall (a) state the election to exercise such Option, the number of shares in
respect of which it is being exercised and the manner of payment for such shares
and (b) be signed by the person or persons so exercising such Option and, in the
event such Option is being exercised pursuant to Section 4 by any person or
persons other than the Employee, accompanied by appropriate proof of the right
of such person or persons to exercise such Option. If the Option being exercised
is an ISO and non-statutory options have also been granted to the Employee
hereunder, such notice shall also identify whether the Option being exercised is
an ISO and, if so, the number of shares of Common Stock to be purchased pursuant
to such exercise. Such notice shall either (i) elect cashless exercise or be
accompanied by payment of the full purchase price
Exhibit A-4
of such shares, in which event the Company shall issue and deliver a certificate
or certificates representing such shares as soon as practicable after the notice
is received, or (ii) fix a date (not more than 10 business days from the date of
such notice) for the payment of the full purchase price of such shares at the
Company's principal office, against delivery of a certificate or certificates
representing such shares. Cash payments of such purchase price shall, in case of
clause (i) or (ii) above, be made by cash or check payable to the order of the
Company. Common Stock payments (valued at the closing market price on the date
of exercise, as determined by the Committee), shall be made by delivery of stock
certificates in negotiable form. All cash and Common Stock payments shall, in
either case, be delivered to the Company at its principal office, attention of
the Secretary. Shares of Common Stock withheld pursuant to a cashless exercise
election shall be valued at the closing market price on the date of exercise, as
determined by the Committee. If certificates representing Common Stock are used
to pay all or part of the purchase price of an Option granted hereunder, a
replacement certificate shall be delivered by the Company representing the
number of shares delivered but not so used, and an additional certificate shall
be delivered representing the additional shares to which the holder of such
Option is entitled as a result of the exercise of such Option. The certificate
or certificates for the shares as to which such Option shall have been so
exercised shall be registered in the name of the person or persons so exercising
the Option and shall be delivered as aforesaid to or upon the written order of
the person or persons exercising such Option. All shares issued as provided
herein will be fully paid and nonassessable.
7. ADMINISTRATION. The Committee shall have the power to interpret the Plan
and this Agreement, and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Committee shall be final and binding upon the
Employee, the Company and all other interested persons.
8. TAXES. The Company shall have the right to deduct or withhold, or
require the person exercising an Option to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes (including such person's
FICA obligation) required by law to be withheld with respect to any taxable
event arising or as a result of this Option.
9. RESERVES, ETC. Shares of Common Stock delivered upon the exercise of an
Option granted hereunder shall, in the discretion of the Board of Directors of
the Company or the Committee, be either shares of Common Stock heretofore or
hereafter authorized and then unissued, or previously issued shares of Common
Stock heretofore or hereafter acquired through purchase in the open market or
otherwise, or some of each. The Company shall be under no obligation to reserve
or to retain in its treasury any particular number of shares of Common Stock at
any time, and no particular shares, whether unissued or held as treasury shares,
shall be identified as those covered by an Option granted hereunder.
10. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Agreement or in the
Plan shall confer upon the Employee any right to continue in the employ of the
Company or any subsidiary of the Company or shall interfere with or restrict in
any way the rights of the Company or any subsidiary of the Company, which are
hereby expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Exhibit A-5
11. GENERAL RESTRICTIONS.
(a) An Option granted hereunder shall be subject to the requirement
that, if at any time the Committee shall determine that (i) the listing,
registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or Federal
law, or (ii) the consent or approval of any governmental regulatory body,
or (iii) an agreement by the recipient of such Option granted pursuant to
this Agreement with respect to the disposition of shares of Common Stock is
necessary or desirable (in connection with any requirement or
interpretation of any Federal or state securities law, rule or regulation)
as a condition of, or in connection with, the granting of such Option or
the issuance, purchase or delivery of shares of Common Stock thereunder,
such Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the
Committee.
(b) The Employee hereby (i) represents and warrants that any shares of
Common Stock issued, transferred or delivered to, or acquired by, the
Employee pursuant to this Agreement shall be acquired solely for the
Employee's own account for investment, and not with a view to any
distribution thereof that would violate the Securities Act of 1933 (the
"Securities Act") or the applicable securities laws of any state, (ii)
agrees that he or she will not distribute any such shares of Common Stock
in violation of the Securities Act or the applicable securities laws of any
state, and (iii) acknowledges that, unless notified to the contrary by the
Company, such shares of Common Stock will not have been registered under
the Securities Act or the securities laws of any state and must be held
indefinitely unless subsequently registered under the Securities Act and
any applicable state securities laws or unless an exemption from such
registration becomes or is available.
12. ENTIRE AGREEMENT; AMENDMENT. This Agreement together with the Plan
constitutes the entire agreement between the parties with respect to the subject
matter hereof. Any term or provision of this Agreement may be waived at any time
by the party which is entitled to the benefits thereof, except that any waiver
of any term or condition of this Agreement must be in writing.
The Committee shall have the authority to amend this Agreement to include
any provision which, at the time of such amendment, is authorized under the
terms of the Plan; however, an Option granted hereunder may not be revoked or
altered in a manner unfavorable to the holder without the written consent of the
holder.
13. GOVERNING LAW. The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflict of
laws.
14. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the successors, assigns and heirs of the respective parties.
Exhibit A-6
15. NOTICES. All notices or other communications made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by registered or certified mail, return
receipt requested, to those listed below at their following respective addresses
or at such other address as each may specify by notice to the others:
TO THE EMPLOYEE:
As set forth in Schedule I
TO THE COMPANY:
MAILING ADDRESS:
Tristar Corporation
00000 Xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Compensation Committee
16. WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
17. CONSTRUCTION. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation on construction of the Agreement. The
singular form shall include the plural, when the context so indicates. In the
event of an inconsistence between the terms of this Agreement and the terms of
Schedule I hereto, the terms of Schedule I shall prevail. In the event of an
inconsistency between the terms of this Agreement (including Schedule I) and the
terms of the Plan, the terms of the Plan shall prevail.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and the Employee has hereunto
set his or her signature, all as of the Grant Date.
TRISTAR CORPORATION
By:
Name:
Title:
EMPLOYEE
Xxxxxx X. XxXxxx
SCHEDULE I
Employee Name Xxxxxx X. XxXxxx
Employee Address 00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Grant Date November __, 1999
Shares of Common Stock underlying Option 150,000
Option Term 10 years
Options Considered to be ISO's within
the meaning of Section 422(b) of the
Code Yes XX No
Exercise Price Per Share $_________
(Closing price on Grant Date
as reported by the Nasdaq SmallCap
Market)
Vesting Schedule:
The Option shall be exercisable according to the following schedule:
November __, 1999 35,000
November __, 2000 23,000
November __, 2001 23,000
November __, 2002 23,000
November __, 2003 23,000
November __, 2004 23,000
Schedule I-1
