EXHIBIT 10.9
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of May 9, 1997 by and between Xxxxxx Products Company,
a Delaware Corporation (the "Company"), and Xxxxxx X. Xxxxxx ("Executive").
WITNESSETH:
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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 employed 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
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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
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set forth, during the Term of Covered Employment, the Company shall employ
Executive, and Executive shall serve, as Executive Vice President-Finance and
Chief Financial Officer.
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 to the Chairman and Chief Executive Officer of the
Company.
3. Compensation and Benefits.
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3.1 Compensation. For all services to be rendered during the Term of
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Covered Employment, the Company shall pay Executive a salary ("Base Salary") of
$250,000 per annum, payable bi-weekly in arrears. The executive shall also
receive a one-time signing bonus in the amount of $50,000. In addition, the
Executive shall receive stock options to acquire 100,000 shares of Class A
Common Stock of Xxxxxx, Inc. at the per share price equal to the closing price
on April 30, 1997, as reported on the consolidated transaction reporting system
for the New York Stock Exchange. Of the 100,000 aforementioned stock options,
the first 50,000 of
these options shall be granted to the Executive effective upon the execution of
this employment agreement and are immediately exercisable upon the execution of
the option agreement evidencing such grant. Of the remaining 50,000 options,
which shall be granted at the execution of this employment agreement, one-third
(1/3) shall be exercisable on each of the first three anniversaries of May 1,
1997 if Executive is employed 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 Base 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, such 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 the 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 after 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,
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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.
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(a) Automobile. Executive shall be entitled to an automobile allowance
from the Company of $500 for each month during the Term of Covered
Employment. In addition, the Company shall pay for all insurance on the
automobile to which the monthly allowance is applied. However, Executive
shall be solely responsible for all maintenance, repair and other expenses
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 or 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, and 100% of moving expenses.
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(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
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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
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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 Section 4.1
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.
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4.2 Resignation. Executive may resign from employment with the
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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
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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 Company
through 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
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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
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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
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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
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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 ar 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
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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. Xxxxxx X. Xxxxxx
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c/o Carson Products Company
00 Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
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
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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
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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
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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
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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
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enforced under, the laws of the State of Georgia.
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13. Effectiveness of Agreement. This Agreement shall be and become
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effective as of the Execution Date.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Xxxxxx Products Company
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Chairman and CEO
/s/ Xxxxxx X. Xxxxxx
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Xx. Xxxxxx X. Xxxxxx
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