EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 19th day of August, 1999 (the "Effective Date"), between International
Cosmetics Marketing, Inc., a Florida corporation, whose principal place of
business is 000 Xxxxxxxx Xxx Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000 and any of
its successors or affiliated companies (collectively, the "Company") and
Xxxxxxxxx XxXxxx, an individual whose address is 000 X. Xxxxxxx Xxxxxx, Xxx. 0,
Xxxxxxx, Xxxxxxx 00000 (the "Employee").
RECITALS
WHEREAS, the Company is a Florida corporation and is principally
engaged in the business of marketing, distributing and selling consumer products
(the "Business").
WHEREAS, the Company desires to employ the Employee and the Employee
desires to enter into the employ of the Company.
WHEREAS, the Company has established a valuable reputation and goodwill
in its business, with expertise in all aspects of the Business.
WHEREAS, the Employee, by virtue of the Employee's employment with the
Company, will become familiar with and possessed with the manner, methods, trade
secrets and other confidential information pertaining to the Company's Business,
including the Company's client base and product sources and pricing.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and the Employee do hereby agree as follows:
a. Recitals. The above recitals are true, correct, and are herein
incorporated by reference.
b. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and conditions hereinafter
set forth.
c. Authority and Power During Employment Period.
i. Duties and Responsibilities. During the term of this
Agreement, the Employee shall serve as President of the Company and shall have
such responsibilities and duties as are customarily undertaken by individuals in
similar positions as are requested by the Company's Board of Directors.
b. Time Devoted. Throughout the Term of the Agreement, the
Employee shall devote substantially all of the Employee's business time and
attention to the business
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and affairs of the Company consistent with the Employee's position with the
Company, except for reasonable vacations and except for illness or incapacity.
4. Term. The Term of employment hereunder will commence on the
Effective Date as set forth above and end three (3) years from the Effective
Date, unless this Agreement shall have been earlier terminated pursuant to
Section 6 of this Agreement.
5. Compensation and Benefits.
a. Salary. The Employee shall be paid a base salary, payable
in accordance with the Company's policies from time to time for salaried
employees, at the rate of One Hundred Two Thousand Dollars ($102,000) per annum:
provided, however, in the event that the Company has $15 Million in sales during
the first year of this Agreement, then the base salary for the second year shall
be increased by $24,000, and in the event that the Company has $50 Million in
sales during the second year of this Agreement, then the base salary for the
third year shall be increased by an additional $24,000.
b. Options. The Employee is granted 100,000 options (the
"Options") to purchase shares of the Company's Common Stock at an exercise price
of $2.50 per share. Such Options are granted under the Company's 1997 Stock
Option Plan and pursuant to the form of Option attached hereto as Exhibit A and
incorporated herein by such reference. The Options shall be exercisable for a
five (5) year period from the date of vesting and shall vest, subject to
continued employment of the Employee, (A) 33,333 Options on the date of this
Agreement, (B) 33,333 Options one year following the date of this Agreement, and
(C) 33,334 Options two years following the date of this Agreement.
c. Additional Options.
i. The Employee shall be granted up to 100,000
Options to purchase shares of the Company's Common Stock at the Fair Market
Value (as hereinafter defined) of the Company's Common Stock on the trading day
immediately preceding the date of grant. Such Options will be granted under the
Company's 1997 Stock Option Plan and pursuant to the form of Option attached
hereto as Exhibit A and incorporated herein by such reference. The Options shall
be granted and immediately exercisable for a five (5) year period from the date
of grant, subject to continued employment of the Employee as follows: (a) 50,000
Option two years following the date of this Agreement; and (b) 50,000 Options
three years following the date of this Agreement.
ii. For the purposes of this Agreement, "Fair Market
Value" shall be equal to the closing bid price of the Company's Common Stock as
reported on the OTC Bulletin Board or the primary exchange on which the
Company's Common Stock shall be quoted.
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d. Signing Bonus. Upon the signing of this Agreement, the
Employee shall be paid a signing bonus of Ten Thousand Dollars ($10,000).
e. Employee Benefits. The Employee shall be entitled to
participate in all benefit programs of the Company currently existing or
hereafter made available to salaried employees including, but not limited to,
stock option plans, pension and other retirement plans, group life insurance,
hospitalization, surgical and major medical coverage, sick leave, salary
continuation, vacation and holidays, long-term disability, and other fringe
benefits.
f. Vacation. During each fiscal year of the Company, the
Employee shall be entitled to such amount of vacation as determined by the Board
of Directors of the Company consistent with the Employee's position and length
of service to the Company.
6. Consequences of Termination of Employment.
a. Disability. In the event of the Employee's disability, the
Employee shall be entitled to compensation in accordance with the Company's
disability compensation practice for its salaried employees. "Disability," for
the purposes of this Agreement, shall be deemed to have occurred in the event
(A) the Employee is unable by reason of sickness or accident, to perform his
duties under this Agreement for an aggregate of 90 days in any 12-month period
or 45 consecutive days, or (B) the Employee has a guardian of the person or
estate appointed by a court of competent jurisdiction. Termination due to
disability shall be deemed to have occurred upon the first day of the month
following the determination of disability as defined in the preceding sentence.
b. Termination by the Company for Cause.
i. Nothing herein shall prevent the Company from
terminating the Employee for "Cause," as hereinafter defined. The Employee shall
continue to receive salary only for the period ending with the date of such
termination as provided in this Section 6(b). Any rights and benefits the
Employee may have in respect of any other compensation shall be determined in
accordance with the terms of such other compensation arrangements or such plans
or programs.
ii. "Cause" shall mean (A) committing or
participating in an injurious act of fraud, gross neglect, misrepresentation,
embezzlement or dishonesty against the Company; (B) committing or participating
in any other injurious act or omission wantonly, willfully, recklessly or in a
manner which was grossly negligent against the Company, monetarily or otherwise;
(C) engaging in a criminal enterprise involving moral turpitude; (D) an act or
acts (1) constituting a felony under the laws of the United States or any state
thereof or (2) if applicable, loss of any state or federal license required for
the Employee to perform the Employee's material duties or responsibilities for
the Company;
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or (E) any assignment of this Agreement by the Employee in violation of Section
13 of this Agreement.
iii. Notwithstanding anything else contained in this
Agreement, this Agreement will not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Employee a notice of
termination stating that the Employee committed one of the types of conduct
described in (ii) above. Notwithstanding, anything contained herein to the
contrary, this Agreement may be terminated (i) at any time upon the mutual
written consent of the Company and the Employee; or (ii) by the Company giving
30 days' prior written notice to Employee. During such 30 day period, the
Employee shall continue to perform the Employee's duties pursuant to this
Agreement, and the Company shall continue to compensate the Employee in
accordance with this Agreement.
d. Death. In the event of the death of the Employee during the
Term of the Agreement, compensation shall be paid to the Employee's designated
beneficiary, or, in the absence of such designation, to the estate or other
legal representative of the Employee for a period of thirty (30) days from and
after the date of death. Other death benefits will be determined in accordance
with the terms of the Company's benefit programs and plans.
7. Covenant Not to Compete and Non-Disclosure of Information.
a Covenant Not to Compete. The Employee acknowledges and
recognizes the highly competitive nature of the Company's Business and the
goodwill, continued patronage, and specifically the names and addresses of the
Company's Clients and the Company's Sources (as hereinafter defined) constitute
a substantial asset of the Company having been acquired through considerable
time, money and effort. Accordingly, in consideration of the execution of this
Agreement, the Employee agrees to the following:
i. That during the Restricted Period (as hereinafter
defined) and within the Restricted Area (as hereinafter defined), the Employee
will not, individually or in conjunction with others, directly or indirectly,
engage in any Business Activities (as hereinafter defined), whether as an
officer, director, proprietor, employer, partner, independent contractor,
investor (other than as a holder solely as an investment of less than one
percent (1%) of the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent or otherwise.
ii. That during the Restricted Period and within the
Restricted Area, the Employee will not, directly or indirectly, compete with the
Company by soliciting, inducing or influencing any of the Company's Clients
which have a business relationship with the Company at the time during the
Restricted Period to discontinue or reduce the extent of such relationship with
the Company.
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iii. That during the Restricted Period and within the
Restricted Area, the Employee will not (A) directly or indirectly recruit,
solicit or otherwise influence any employee or agent of the Company to
discontinue such employment or agency relationship with the Company, or (B)
employ or seek to employ, or cause or permit any business which competes
directly or indirectly with the Business Activities of the Company (the
"Competitive Business") to employ or seek to employ for any Competitive Business
employs or seeks to employ such person) employed by the Company.
iv. That during the Restricted Period the Employee
will not interfere with, or disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between the Company and any
supplier, customer, employee or agent of the Company.
b. Non-Disclosure of Information. The Employee acknowledges
that the Company's trade secrets, private or secret processes, methods and
ideas, as they exist from time to time, customer lists and information
concerning the Company's products, Company Sources, services, training methods,
development, technical information, marketing activities and procedures, credit
and financial data concerning the Company and/or the Company's Clients and the
Company's Sources (the "Proprietary Information") are valuable, special and
unique assets of the Company, access to and knowledge of which are essential to
the performance of the Employee hereunder. In light of the highly competitive
nature of the industry in which the Company's Business is conducted, the
Employee agrees that all Proprietary Information, heretofore or in the future
obtained by the Employee as a result of the Employee's association with the
Company shall be considered confidential.
In recognition of this fact, the Employee agrees that the Employee,
during the Restricted Period, will not use or disclose any of such Proprietary
Information for the Employee's own purposes or for the benefit of any person or
other entity or organization (except the Company) under any circumstances unless
such Proprietary Information has been publicly disclosed generally or, unless
upon written advice of legal counsel reasonably satisfactory to the Company, the
Employee is legally required to disclose such Proprietary Information. Documents
(as hereinafter defined) prepared by the Employee or that come into the
Employee's possession during the Employee's association with the Company are and
remain the property of the Company, and when this Agreement terminates, such
Documents shall be returned to the Company at the Company's principal place of
business, as provided in the Notices provision (Section 9) of this Agreement.
c. Documents. "Documents" shall mean all original written,
recorded, or graphic matters whatsoever, and any and all copies thereof
including, but not limited to: papers; email; books; records; tangible things;
correspondence; communications; telex messages; memoranda; work-papers; reports;
affidavits; statements; summaries; analyses; evaluations; client records and
information; agreements; agendas; advertisements; instructions; charges;
manuals; brochures; publications; directories; industry lists;
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schedules; price lists; client lists; statistical records; training manuals;
computer printouts; books of account, records and invoices reflecting business
operations; all things similar to any of the foregoing however denominated. In
all cases where originals are not available, the term "Documents" shall also
mean identical copies of original documents or non-identical copies thereof.
d. Company's Clients. The "Company's Clients" shall be deemed
to be any persons, partnerships, corporations, professional associations or
other organizations for whom the Company has performed Business Activities.
e. Company's Sources. The "Company's Sources" shall be deemed
to be any person, partnership, corporation, professional association or other
organization from whom the Company has, before and during the term of this
Agreement, directly or indirectly purchased products from time to time.
f. Restrictive Period. The "Restrictive Period" shall be
deemed to be eighteen (18) months following termination or expiration of this
Agreement.
g. Restricted Area. The Restricted Area shall be deemed to
mean within Broward County, Dade County, Monroe County and Palm Beach County,
Florida and within any other county of any state in which the Company is
providing service at the time of termination.
h. Business Activities. "Business Activities" shall be deemed
to include the Business, any business activities concerning marketing,
distributing and selling skin care, nutritional and other consumer products
provided by the Company and any additional activities which the Company or any
of its affiliates may engage in during the term of this Agreement.
h. Covenants as Essential Elements of this Agreement. It is
understood by and between the parties hereto that the foregoing covenants
contained in Sections 7a and 7b are essential elements of this Agreement, and
that but for the agreement by the Employee to comply with such covenants, the
Company would not have agreed to enter into this Agreement. Such covenants by
the Employee shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of such covenants against the Employee.
i. Survival After Termination of Agreement. Notwithstanding
anything to the contrary contained in this Agreement, the covenants in Sections
7a and 7b shall survive the termination of this Agreement and the Employee's
employment with the Company.
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j. Remedies.
i. The Employee acknowledges and agrees that the
Company's remedy at law for a breach or threatened breach of any of the
provisions of Section 7a or 7b herein would be inadequate and the breach shall
be per se deemed as causing irreparable harm to the Company. In recognition of
this fact, in the event of a breach or threatened breach by the Employee of any
of the provisions of Section 7a or 7b, the Employee agrees that, in addition to
any remedy at law available to the Company, including, but not limited to
monetary damages, all rights of the Employee to payment or otherwise under this
Agreement and all amounts then or thereafter due to the Employee from the
Company under this Agreement may be terminated and the Company, without posting
any bond, shall be entitled to obtain, and the Employee agrees not to oppose the
Company's request for 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 to the Company.
ii. The Employee acknowledges that the granting of a
temporary injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 7a or 7b and consequently agrees,
upon proof of any such breach, to the granting of injunctive relief prohibiting
any form of competition with the Company. Nothing herein contained shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach.
8. Withholding. Anything to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Employee or the
Employee's estate or beneficiaries shall be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as the Company may
reasonably determine, the Company may accept other arrangements pursuant to
which it is satisfied that such tax and other payroll obligations will be
satisfied in a manner complying with applicable law or regulation.
9. Notices. Any notice required or permitted to be given under
the terms of this Agreement shall be sufficient if in writing and if sent
postage prepaid by registered or certified mail, return receipt requested; by
overnight delivery; by courier; or by confirmed telecopy, in the case of the
Employee to the Employee's last place of business or residence as shown on the
records of the Company, or in the case of the Company to its principal office as
set forth in the first paragraph of this Agreement, or at such other place as it
may designate.
10. Waiver. Unless agreed in writing, the failure of either
party, at any time, to require performance by the other of any provisions
hereunder shall not affect its right thereafter to enforce the same, nor shall a
waiver by either party of any breach of any provision hereof be taken or held to
be a waiver of any other preceding or succeeding breach of any term or provision
of this Agreement. No extension of time for the
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performance of any obligation or act shall be deemed to be an extension of time
for the performance of any other obligation or act hereunder.
11. Completeness and Modification. This Agreement constitutes
the entire understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Employment Agreement. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party to be charged.
12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute but one agreement.
13. Binding Effect/Assignment. This Agreement shall be binding
upon the parties hereto, their heirs, legal representatives, successors and
assigns. This Agreement shall not be assignable by the Employee but shall be
assignable by the Company in connection with the sale, transfer or other
disposition of its business or to any of the Company's affiliates controlled by
or under common control with the Company.
14. Governing Law. This Agreement shall become valid when
executed and accepted by Company. The parties agree that it shall be deemed made
and entered into in the State of Florida and shall be governed and construed
under and in accordance with the laws of the State of Florida. Anything in this
Agreement to the contrary notwithstanding, the Employee shall conduct the
Employee's business in a lawful manner and faithfully comply with applicable
laws or regulations of the state, city or other political subdivision in which
the Employee is located.
15. Further Assurances. All parties hereto shall execute and
deliver such other instruments and do such other acts as may be necessary to
carry out the intent and purposes of this Agreement.
16. Headings. The headings of the sections are for convenience
only and shall not control or affect the meaning or construction or limit the
scope or intent of any of the provisions of this Agreement.
17. Survival. Any termination of this Agreement shall not,
however, affect the ongoing provisions of this Agreement which shall survive
such termination in accordance with their terms.
18. Severability. The invalidity or unenforceability, in whole
or in part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence,
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clause, phrase or word or of any provision of this Agreement shall not affect
the validity or enforceability of the remaining portions thereof.
19. Enforcement. Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
20. Venue. Company and Employee acknowledge and agree that the
U.S. District for the Southern District of Florida, or if such court lacks
jurisdiction, the 17th Judicial Circuit (or its successor) in and for Broward
County, Florida, shall be the venue and exclusive proper forum in which to
adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
21. Construction. This Agreement shall be construed within the
fair meaning of each of its terms and not against the party drafting the
document.
22. Independent Legal Counsel. The parties have either (i)
been represented by independent legal counsel in connection with the negotiation
and execution of this Agreement, or (ii) each has had the opportunity to obtain
independent legal counsel, has been advised that it is in their best interests
to do so, and by execution of this Agreement has waived such right.
THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS READ ALL OF THE
TERMS OF THIS AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO
ABIDE BY ITS TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of date
set forth in the first paragraph of this Agreement.
THE COMPANY:
INTERNATIONAL COSMETICS MARKETING, INC.
By: /s/ Xxxxx Xxxxxx
--------------------
Xxxxx Xxxxxx, Chief Financial Officer
THE EMPLOYEE
/s/ Xxxxxxxxx XxXxxx
--------------------
Xxxxxxxxx XxXxxx
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