EMPLOYMENT AGREEMENT
AGREEMENT,dated as of July 14, 1997 by and between Xxxxxx Products Company,
a Georgia Corporation (the "Company"), and Xxxxxxx X. Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company wishes to retain the services of Executive from and
after the date of the execution of this Agreement (the "Execution Date"), and
Executive wishes to be eployed in the services of the Company from and after the
Execution Date, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Term of Covered Employment. The term of Executive's employment covered
under this Agreement (the "Term of Covered Employment") shall commence on the
Execution Date and shall end on the third anniversary of the Execution Date (the
"Expiration Date"), unless terminated earlier under Section 4.
2. Employment and Duties. Subject to the terms and conditions hereinafter
set forth, during the Term of Covered Employment, the Company shall employ
Executive and Executive shall serve, as Senior Vice President-Finance.
In such capacity, Executive shall perform the duties and responsibilities
assigned by the Company, and such performance shall be Executive's principal
activity to which he shall devote substantially all his working hours. Executive
shall report the Chairman and Chief Executive Officer of the Company.
3. Compensation and Benefits.
3.1 Compensation. For all srvices to be rendered during the Term of Covered
Employment, the Company shall pay Executive a salary ("Base Salary") of $150,000
per annum, payable bi-weekly in arrears. The executive shall also receive a
one-time signing bonus in the amount of $25,000. In addition, the Executive
shall receive stock options to acquikre 50,000 shares of Class A Common Stock of
Xxxxxx, Inc. At the per share price equal to the closing price on July 11, 1997,
as reported on the consolidated traqnsaction reporting system for the New York
Stock Exchange. The options, which shall be granted at the execution of this
employment agreement, shall be exercisable one-third (1/3) on each of the first
three anniversaries of the date of the execution of this agreement if Executive
is empoyed by the Company on such dates. In addition, for each fiscal year of
the Company ending within the Term of Covered Employment, Executive shall
receive a (pro-rated for 1997) bonus (the "Bonus") in an amount equal to (i)
thirty percent (30%) of Bae Salary if the "base case" objectives (but not the
"anticipated case" objectives) for such fiscal year as specified by the Board,
or a committee thereof are achieved, or (ii) fifty percent (50%) of Base Salary
if the "anticipated case" objectives for such fiscal year as specified by the
Board, or a committee thereof are met The objectives utilized in determining the
Bonus shall be net revenue growth, net income, earnings per share and/or stock
price growth, suh as defined by the board (or a committee thereof) in its sole
discretion. A lesser percentage of Base Salary may be paid hereunder if one or
more, but not all, of the targeted objectives are met.The value of the Bonus, if
any, shall be paid seventy-five percent (75%) in a single lump sum cash payment
and twenty-five percent (25%) in shares of restricted stock of Xxxxxx, Inc. If
the "anticipated case" objectives are met, the value of the Bonus, if any, shall
be paid fifty percent (50%) in a single lump sum cash payment and fifty percent
(50%) in shares of restricted stock of Xxxxxx, Inc. Such restricted stock shall
vest aS to one-third (1/3) of the aggregate number of shares delivered to
Executive on each of he first three anniversaries of the date of payment of the
Bonus if Executive is employed by the Company on such dates. The Bonus shall be
paid no later than 120 days ater the end of the fiscal year for which the
applicable objectives have been met.
3.2 Pension and Welfare Plans. During the Term of Covered Employment,
Executive shall also be eligible to participate in any pension and welfare plans
maintained by the Company for its employees, except profit-sharing and the
Christmas bonus plan, subject to the requirements of applicable law.
3.3 Fringe Benefits.
(a) Automobile. Executive shall be entitled to an automobile allowance from
the Company of $250 for each month during the Term of Covered Employment.
Executive shall be solely responsible for all maintenance, repair and other
expenss with respect to such automobile.
(b) Relocation Expenses/Allowance. The Company shall reimburse Executive
for all expenses incurred by him in relocating to Savannah, Georgia ro its
vicinity. The company shall reimburse Executive for all travel and temporary
lodging expenses incurred, including spouse-accompanied trips to Savannah,
Georgia to secure his permanent residence in Savannah, Georgia or its vicinity.
In addition, the Company shall pay Executive 100% of final closing costs
associated with purchase of residence in Savannah or its vicinity, 100% of
moving expenses, and up to $15,000 of closing costs associated with the sale of
residence in Memphis, Tennessee.
(c)Other Fringe Benefits. During the Term of covered Employment, Executive
shall receive any other fringe benefits generally provided by the Company to its
employees.
4.Termination of Employment. Notwithstanding any other provision of this
Agreement, but subject to the notice provisions contained in this Section 4, the
Company retains the right to terminate Executive's employment, and Executive
retains the right to resign from employment with the Company, at any time and
for any reason.
4.1 Termination for Cause. The Company may terminate Executive's employment
with the Company for "Cause" (as hereinafter defined) in the manner specified in
this Section 4.1. In the event that on or after the Execution Date and prior to
the Expiration Date, the Company terminates Executive's employment with the
Company for Cause, the Term of Covered Employment shall end on the date of such
termination (which shall be the date specified in the notice described in this
Section 4.1) and Executive shall be entitled only to any unpaid amount of Base
Salary for his employment with the Company throughout and including the date of
such termination. In any event, Executive shall not be entitled to receive any
amount of Base Salary with respect to any period following the date of such
termination, or any portion of the Bonus for the fiscal year of the Company in
which such date of termination occurs.
For purposes of this Agreement, termination for "Cause" means termination
by the Company due to Executive's gross dereliction of his duties under this
Agreement, including, without limitation, his refusal to follow or gross neglect
of the directions of the Chief Executive Officer of the Company or any other
executive of the Company senior to Executive, or any willful misconduct by
Executive that is materially injurious to the Company, or the indictment of
Executive for a felony involving moral turpitude.
To terminate Executive for Cause, the Company shall give a written notice
of such termination to Executive ("Notice of Termination"), and shall specify
the date of such termination, which shall not be earlier than the date on which
such notice is given to Executive. Such notice shall be given to Executive no
later than 10 days after actual knowledge of the events or circumstances which
purportedly constitute Cause for such termination, and shall specify the
particular act or acts, or failure to act, or other events or circumstances
constituting Cause for such termination. Executive shall be given the
opportunity within 30 days after receiving such notice to explain why Cause for
such termination does not exist. Within 15 days after any such explanation,
Executive will be given the final decision regarding whether Cause exists. If
the final decision is that Cause exists, Executive's employment with the Company
shall be terminated under this Section4.1 pursuant to the notice of Termination
as of the date of termination specified in such Notice. If the final decision is
that Cause does not exist, Executive's employment with the Company shall not be
terminated under this
Section 4.1.
4.2 Resignation. Executive may resign from employment with the Company by
giving the Company written notice of such resignation, which notice shall
specify the date of resignation, which shall not be earlier than 30 days after
the date such written notice is given to the Company. In the event of
Executive's resignation on or after the Execution and prior to the Expiration
Date, the Term of Covered Employment shall end on the date of resignation which
shall be the date specified in Executive's notice of resignation), and Executive
shall be entitled only to any unpaid amount of Base Salary for his employment
with the Company through and including such date of resignation. Executive shall
not be entitled to receive any amount of Base Salary with respect to any period
following such date of resignation, or any portion of the bonus for the fiscal
year of the Company in which such date of resignation occurs.
4.3 Termination Other Than For Cause. The Company may terminate Executive's
employment with the Company other than for Cause by giving Executive written
notice of such termination, which notice shall specify the date of such
termination, which shall not be earlier than 30 days after such written notice
is given to Executive. In the event that on or after the Execution Date and
prior to the Expiration Date Executive's employment with the Company is
terminated by the Company other than for Cause, the Term of Covered Employment
shall end upon such specified date of termination and the Company shall pay
Executive, within 30 days after such date of termination, an additional lump sum
amount equal to any unpaid amount of Base Salary for his term of employment with
the Companythrough and including such date of termination. Executive shall not
be eligible to participate in any of the Company's employee benefit plans
following such date of termination of employment, except as may be required by
applicable law.
4.4 Termination Due to Death or Disability. The Company may terminate
Executive's employment with the Company due to "Disability", as hereinafter
defined, by giving Executive written notice of such termination, which notice
shall specify the date of such termination, which shall not be earlier than 30
days after such written notice is given to Executive. If on or after the
Execution Date and prior to the Expiration Date Executive's employment with the
Company is terminated due to Disability, or if during such period Executive
dies, the Term of Covered Employment shall end upon such specified date of
termination or date of death, as applicable, and the Company shall pay
Executive, or his beneficiary of estate, as the case may be, within 15 days
after such date of termination or death, an additional lump sum amount equal to
150% of one year's Base Salary.
For purposes of this Agreement, "Disability" means Executive's inability to
perform his duties under this Agreement for a period of at least six consecutive
months because of medically determinable physical or mental impairment, as
determined by a physician mutually agreeable to Executive and the Company. If
Executive and the Company are unable to agree on such a physician, each shall
appoint one physician and those two physicians shall appoint a third physician
who shall make such a determination.
5. Non-Competition; Non-Solicitation. While Executive is employed by the
Company (including any period of such employment following the expiration of the
Term of Covered Employment), and during the period in which Executive is
receiving payments of Base Salary from the Company (regardless of whether or not
Executive is then employed by the Company), Executive shall not directly or
indirectly (i) own, manage, operate, represent, promote, consult for, control or
participate in the ownership, operation, acquisition or management of any other
business which manufactures and/or distributes ethnic hair care products or
cosmetics, (ii) solicit (other than on behalf of the Company or any of its
affiliates), divert or take away the business of any customers of the Company or
any of its affiliates, or any prospective customers of the Company or any of its
affiliates whose business the Company or any of its affiliates is actively
soliciting, or has actively solicited, during Executive's employment with the
Company with whom Executive had any material personal contact, or (iii) solicit
or induce any employee of the Company or any of its affiliates to terminate such
employee's employment with the Company or such affiliate. It is expressly
acknowledged that a breach of this covenant may result in irreparable harm to
the Company for which there is no adequate remedy at law and that, therefore, in
the event of such a breach, the Company shall be entitled to obtain injunctive
relief restraining Executive from engaging in activities prohibited by this
Section 5 or any other relief as may be required to specifically enforce this
covenant.
6. Confidentiality. While employed by the Company and at all times
thereafter, Executive shall maintain the confidentiality of all information of
and relating to, and all material of, the Company and its affiliates that have
not been made available to the public (other than by reason of a breach by
Executive of his obligations under this Section 6) and shall not, without the
Company's prior written permission, disclose to any person outside of the
Company and its affiliates any such information or material. Without limiting
the foregoing sentence, such information and material shall include pricing
plans and price policies, business plans, sales forecasts, research and
development, formulas, procedures and the identity of customers and suppliers
and the terms upon which the Company or any of its affiliates deals with them.
Upon termination of employment with the Company, Executive shall return to the
Company all property in his possession, whether or not containing confidential
information, including but not limited to originals and copies of any written
documents, drawings and reports, diskettes and other storage media, belonging to
the Company or any of its affiliates or received from the Company or any of its
affiliates. It is expressly acknowledged that a breach of this covenant may
result in irreparable harm to the Company for which there is no adequate remedy
at law and that, therefore, in the event of such a breach, the Company shall be
entitled to obtain injunctive relief restraining Executive from engaging in
activities prohibited by this Section 6 or any other relief as may be required
to specifically enforce this covenant.
7. Notices. All notices and other communications under this Agreement shall
be in writing and shall be given by hand delivery to the party receiving such
notice or by certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Executive: Xx. Xxxxxxx X. Xxxxxxx
If to the Company: Xxxxxx Products Company
00 Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chairman and Chief Executive
Officer
or to such other address as either party shall have furnished to the other
party in writing as the address to send future notices and communications in
accordance herewith. Any notice or communication shall be deemed given when
actually received by the party who is its intended recipient.
8. Severability. If any provision of this Agreement is held to be invalid
under applicable law, such provision shall be ineffective only to the extent of
such invalidity, and the remaining provisions of this Agreement shall be
unimpaired.
9. Waivers. The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of such provision, or as a waiver of any other provision of this Agreement.
10. Assignability. The Company may assign its rights and obligations
hereunder to any of its affiliates, or to any successor of the Company.
Executive may not assign any of his rights, duties, obligations or interests
hereunder to any other person without the prior express written consent of the
Board of Directors of the Company.
11. Entire Agreement. This instrument contains the entire agreement of the
parties with respect to, and supersedes all prior agreements relating to,
Executive's employment with the Company.
12. Governing Law. This Agreement shall be governed by, and construed and
enforced under, the laws of the State of Georgia.
13. Effectiveness of Agreement. This Agreement shall be and become
effective as of the Execution Date.
IN WITNESS WHREOF, the parties have executed this Agreement as of the date
first written above.
Xxxxxx Products Company
By:__________________________
Xxxxx Xxxxx
Chairman and CEO
_______________________________
Xx. Xxxxxxx X. Xxxxxxx
