EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (the "EMPLOYMENT AGREEMENT") effective
the 1st day of September, 1998 (the "EFFECTIVE DATE"), by and between TRISTAR
CORPORATION, a Delaware corporation ("EMPLOYER"), and XXXXXX XXXXX ("EMPLOYEE").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as Executive Vice President
and Chief Financial Officer for a term of employment as herein provided and
Employee desires to accept such employment as herein provided; and
WHEREAS, the parties desire to establish by contract the terms and
conditions of the employment of Employee by Employer;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties agree as follows:
I. TERM OF EMPLOYMENT. The term of Employee's employment under this
Employment Agreement shall commence on the Effective Date and terminate on
August 31, 2000, unless terminated earlier as provided herein (the "TERM").
2. TITLE AND DUTIES OF EMPLOYEE. Employee shall serve as Executive Vice
President and Chief Financial Officer of Employer. Employee agrees to his
employment by Employer and to devote substantially his entire business time to
the business of Employer throughout the period of his employment, provided that
Employee may make personal passive investments and be involved in charitable
activities provided they do not interfere with his activities hereunder.
Employee is employed as Executive Vice President and Chief Financial Officer and
shall perform such duties as directed by the President or Board of Directors of
Employer. Employer shall have the right at any time to change or modify the work
or duties to be performed by Employee, provided that such work or duties as so
changed or modified shall include the general powers and duties usually vested
in the office of the Chief Financial Officer of a company of Employer's size and
shall be commensurate with such position. Subject to the prior sentence,
Employer shall have the exclusive power and authority to determine the matters
to be assigned to Employee and the specific duties to be performed by him.
Employee shall report to only the Board of Directors, President, Chief Executive
Officer and Chief Operating Officer of Employer.
3. SALARY. For all services rendered by him during the Term, Employee
shall be paid a base salary at the rate of One Hundred Ninety Thousand Dollars
per annum ($190,000) ("SALARY"), payable weekly, subject to standard deductions
for all applicable state and federal taxes and other reasonable bonafide
deductions.
4. ADDITIONAL BENEFITS. During the Term, Employee shall be entitled to the
following other benefits, in addition to his Salary or as otherwise described in
this Employment Agreement:
A. REIMBURSEMENT FOR TRAVEL, ENTERTAINMENT AND OTHER EXPENSES.
During the Term, Employer shall reimburse Employee for any reasonable
travel, entertainment or other necessary expenses incurred in the
performance of his duties under this Employment Agreement, consistent with
the policies of Employer at the time of such reimbursement with respect to
such expenses, as such policy may be modified from time to time.
B. ALL BENEFIT PLANS. During the Term, Employee shall be eligible to
participate in all benefit plans generally available to Employer's
officers, excluding any bonus plans other than as described in PARAGRAPH
4(C) below and shall at a minimum be provided with a health plan, long
term disability benefits (based upon Employee's inability to do his job
for a consecutive period of 6 months) and life insurance coverage pursuant
to Employer's benefit plan in existence at the time hereof as such plan
may be enhanced but not diminished during the term hereof.
C. BONUS PLAN. During the Term, Employee shall be eligible for
annual incentive compensation with a targeted maximum benefit of 25% of
Employee's Salary upon Employer achieving certain reasonable financial and
other goals to be agreed to by Employer and Employee and with adjustments
for a lesser bonus than the targeted maximum benefit if certain lesser
financial and other goals are achieved. In the event Employee's employment
is terminated for reasons other than as set forth in SECTIONS 7(C) or 7(E)
after six (6) months from the commencement date hereof or after the first
six (6) months of any fiscal year of the Employer, Employee shall receive
a prorated bonus for the period of employment based upon the
accomplishment of the financial goals that are met for such period prior
to termination of employment.
D. CAR ALLOWANCE. Employer shall pay Employee a car allowance of
$500.00 per month.
E. RELOCATION PACKAGE. Employer shall pay Employee's temporary
living expenses, moving expenses, relocation expenses, family visitation
expenses and other incidental expenses related to Employee relocating
himself and his family to Employer's place of business in San Antonio,
Bexar County, Texas. In satisfaction of the provisions of the preceding
sentence, Employer shall pay Employee $4,000 per month during the Term
pursuant to the provisions of this SECTION 4(E) as well as advances for
major expenses. If Employee relocates himself and his family to San
Antonio, Bexar County, Texas, within 12 months of the date hereof,
Employer shall pay to Employee $35,000, and upon such payment, no further
payments described in the preceding
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sentence shall be made to Employee. Employee shall promptly notify Employer upon
Employee's family relocating to San Antonio, Bexar County, Texas.
5. RESIGNATION. If for any reason other than for Good Reason, as
hereinafter defined, Employee voluntarily resigns his employment prior to the
expiration of the Term, Employee shall forfeit any right to receive any payments
or benefits, including severance benefits, pursuant to this Employment Agreement
and Employer shall be released and discharged from any liability, obligation or
duty arising in connection with this Employment Agreement or in connection with
Employee's employment, except for amounts accrued prior to such termination, a
bonus pursuant to SECTION 4(C), if any is earned, and any right of
indemnification hereunder or under the provisions of Employer's Bylaws and
Articles of Incorporation (the "INDEMNITY OBLIGATION"). Nevertheless, Employer
and Employee shall continue to be bound and obligated by any provision of this
Employment Agreement which is intended by its terms to survive and continue
beyond the resignation of Employee, including, but not limited to, the
provisions of SECTION 9. Employee may terminate his employment hereunder for
Good Reason, upon written notice to Employer setting forth the nature of such
Good Reason in reasonable detail. "GOOD REASON" shall mean (i) the failure of
Employer to provide Employee the salary, incentive and bonus compensation and
benefits in accordance with the terms hereof, (ii) the failure of Employer to
continue Employee in the position of Chief Financial Officer, (iii) the material
diminution in the nature or scope of the Employee's responsibilities, duties or
authority, (iv) the relocation of Employer's offices from the San Antonio, Texas
area or (v) any other material breach of this Employment Agreement by Employer.
Upon Employer's receipt of written notice of Employee's termination for Good
Reason hereunder, such termination shall be effective thirty (30) days after
receipt of such notice if a cure for such event has not been effected.
6. SEVERANCE AND NON-RENEWAL PAYMENT. Notwithstanding anything to the
contrary herein contained, the provisions of this SECTION 6 shall not be
applicable to a termination of employment pursuant to SECTIONS 7(A), 7(B), 7(C)
or 7(E) of this Employment Agreement. In addition, there shall be no obligation
of Employee to mitigate his damages and seek employment following the
termination of Employee's employment in order to receive the Severance or
Non-Renewal Payment hereunder.
X. XXXXXXXXX. In the event the employment of Employee by Employer is
terminated prior to the end of the Term, for any reason other than the
reasons set forth in the preamble to this SECTION 6, Employer shall be
obligated to pay Employee a severance payment (the "SEVERANCE") in an
amount equal to two (2) years Salary payable in twenty-four (24) equal
monthly installments of $15,833.33 (each a "SEVERANCE PAYMENT") commencing
the first of the month following any such termination. Any Severance
hereunder shall be subject to the following conditions and adjustments:
(i) The Severance shall be reduced by the number of
months salary paid by Employer from the Effective Date to the date
of termination
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hereunder multiplied by $15,833.33, and the number of Severance
Payments to be paid shall be reduced by the number of months salary
paid by Employer to Employee since the Effective Date to the date of
termination hereunder.
(ii) The Severance shall be reduced and offset on a
dollar for dollar basis in an amount equal to any sums earned and/or
received during the Severance period by Employee for any services
directly or indirectly provided to a third party such as salary,
incentive payments, bonus or consulting fees (the "OFFSET RIGHT").
During the Severance period Employee shall immediately give Employer
written notice upon Employee's engagement by a third party for
Employee to directly or indirectly provide any type of employment,
advice or consulting services.
(iii) The first nine (9) months of Severance Payments
under this Section shall not be subject to the Offset Right.
(iv) Subject to Subsections (ii) and (iii) above, the
parties agree that notwithstanding any other provisions to the
contrary herein contained, the Employee shall be entitled to receive
Severance Payments equal to the greater of twelve (12) months or the
remaining balance of the Term at the date of termination, whichever
sum is greater.
B. NON-RENEWAL PAYMENT. At the end of the Term of this Employment
Agreement, provided this Employment Agreement has not been terminated, if
the Agreement is not renewed and extended on a basis that is mutually
acceptable to both Employer and Employee, then in such event, Employee
shall be entitled to receive twelve (12) months salary in equal monthly
installments over a 12-month period beginning on the first day of the
first month following the expiration of the Term as non-renewal benefit
("NON-RENEWAL PAYMENT") subject to the following conditions and
adjustments:
(i) The Non-Renewal Payment hereunder shall be subject
to the Offset Right.
(ii) The first nine (9) months Non-Renewal Payment shall
not be subject to the Offset Right.
C. SURVIVAL OF CERTAIN PROVISIONS. Upon any such termination, this
Employment Agreement shall be terminated and Employer shall be released
from all obligations to Employee with respect to this Employment
Agreement, except for the compensation obligations set forth herein and
the indemnification obligation. Nevertheless, Employer and Employee shall
continue to be bound and obligated by any provision of this Employment
Agreement which is intended by its terms to survive and continue beyond
the termination of this Employment
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Agreement, including, but not limited to, the provisions of SECTION 9. The
right of Employer to terminate Employee in Employer's discretion prior to
the end of the Term is an independent and absolute right, and may be
applied and enforced separately by Employer at its election and in its
sole discretion, notwithstanding any other provision contained in this
Employment Agreement to the contrary.
7. TERMINATION EARLIER THAN BY EXPIRATION OF TERM.
Although the parties expressly intend that employment under this
Employment Agreement shall continue until August 31, 2000, unless sooner
terminated pursuant to the provisions of SECTION 5 or SECTION 6 above, the
parties agree that employment under this Employment Agreement, and the
provisions hereof (except for any provision intended by its terms to survive and
continue, including, but not limited to, the provisions of SECTION 9), shall be
terminated in advance of the expiration of the Term upon the occurrence of any
one of the following events:
A. DEATH. The death of Employee;
B. DISABILITY. The physical or mental disability of Employee that
has prevented him from performing effectively the duties of his employment
for a time period greater than six (6) consecutive months;
C. TERMINATION FOR CAUSE. Employer also reserves the right at its
election to terminate the employment of Employee for Cause. "CAUSE" exists
if Employee (i) has engaged in a wilful act of dishonesty (other than good
faith expense account disputes) or (ii) has willfully violated any
material provision of Employer's Code of Conduct which is currently in
effect, as the same may be modified, amended or restated from time to
time, and a copy of which is attached hereto and marked EXHIBIT A and
incorporated herein by reference. Upon the occurrence of any event
described in clause (i) of this SECTION 7(C), regardless of whether such
event is also described in clause (ii) of this SECTION 7(C), notice of
termination for cause of the employment of Employee may be given in
writing by Employer to Employee and such termination shall be effective
immediately upon the delivery of such notice. Upon the occurrence of any
event described in clause (ii) of this SECTION 7(C), notice of termination
for cause of the employment of Employee setting forth the grounds for such
termination shall be given to Employee by Employer in writing within sixty
(60) days of receiving actual knowledge of such default by the President,
Chief Executive Officer or Board of Directors of Employer and such
termination shall be effective thirty (30) days thereafter if a cure for
such event has not been effected. The giving of such notice shall also
effect a termination of the obligations under this Employment Agreement,
including without limitation SECTION 3, 4, and 6, except as to any
provision of this Employment Agreement which is intended by its terms to
survive and continue, including, but not limited to, the provisions of
SECTION 9.
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D. TERMINATION BY EMPLOYER WITHOUT CAUSE. Employer terminates
Employee's employment with Employer during the Term without Cause.
E. TERMINATION BY EMPLOYEE WITHOUT GOOD REASON. Employee terminates
his employment with Employer during the Term without Good Reason.
F. TERMINATION BY EMPLOYEE FOR GOOD REASON. Employee terminates his
employment with Employer during the Term for Good Reason.
Upon the occurrence of any of the events described above in SECTIONS 7(A)
through 7(C) or SECTION 7(E), Employer shall be released and discharged from any
liability, obligation or duty arising in connection with this Employment
Agreement or in connection with Employee's employment except as otherwise
provided herein and further, provided that upon the occurrence of any event
described in SECTION 7(A), Employee shall be entitled to receive the proceeds of
the life insurance policy maintained by Employer on the life of Employee or upon
the occurrence of an event described in SECTION 7(B), Employee shall be entitled
to the benefits of any disability policy of Employer covering such event to the
extent provided in such policy. In all cases the indemnification obligation
shall continue.
8. EMPLOYEE OWNERSHIP. During the Term, Employee will not directly or
indirectly, on his own behalf or as a partner, officer, consultant, principal,
agent, stockholder (except by ownership of five percent (5%) or less of the
outstanding stock of any publicly held corporation) or in any other capacity,
invest or engage in, or devote any material endeavor or effort to any other
business other than the business of Employer other than the charitable
activities as permitted in SECTION 2 hereof.
9. RECORDS; CONFIDENTIAL INFORMATION; NON-COMPETITION AGREEMENT; TANGIBLE
PROPERTIES.
A. OWNERSHIP. All business records, data and information ("RECORDS")
are and shall remain the exclusive property of Employer. Employee shall
not under any circumstances whatsoever permanently remove any Records from
the premises of Employer without prior written consent of Employer.
B. RETURN OF RECORDS. Upon request, Employee shall immediately
return to Employer all Records and copies thereof in Employee's
possession.
C. CONFIDENTIAL AND PROPRIETARY INFORMATION. To the extent not
otherwise provided for in this Employment Agreement, except as reasonably
desirable in Employee's performance of his duties hereunder, Employee
agrees to maintain the confidentiality of all confidential and
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proprietary information relating to the business or internal operation of
Employer both during and after his employment by Employer, provided that
if Employee becomes legally compelled to disclose any such information,
Employee will (i) promptly notify Employer so that Employer may seek a
protective order or other appropriate remedy and/or waive compliance under
this SECTION 9(C) and (ii) comply with all reasonable requests of Employer
in seeking a protective order or other appropriate remedy. If such
protective order or other remedy is not timely obtained, or if Employer
waives compliance with the provisions of this SECTION 9(C), Employee will
furnish only that portion of such information that is legally required.
Employee understands and agrees that this SECTION 9 is a material part of
this Employment Agreement, his acceptance of which is an inducement to
Employer to enter into this Employment Agreement.
D. NON-COMPETITION AGREEMENT. Employee covenants and agrees that for
the period beginning the date of Employee's termination of his employment
with Employer, however such termination is brought about (the "TERMINATION
DATE"), and ending on the second (2nd) anniversary of said date (the
"RESTRICTED PERIOD"), Employee will not, directly or indirectly, on his
own behalf or as a partner, officer, consultant, principal, agent,
stockholder (except by ownership of five percent (5%) or less of the
outstanding stock of any publicly held corporation) or in any other
capacity, invest or engage in, or devote any endeavor or effort to the
alternative designer fragrances or cosmetics segment of the perfume or
toiletries business, of the type currently sold by the persons set forth
on EXHIBIT B attached hereto and not mass brands of the types sold by
Xxxxxxx and Xxxxxx, Unilever, Colgate-Palmolive, L'Oreal or Revlon (the
"BUSINESS"), in the United States or other countries the Employer or its
subsidiaries are doing business at the time of the termination of this
Employment Agreement (the "TERRITORY"). During the Restricted Period, in
the event Employee is employed by or consults with a Conglomerate, as
herein defined, and such Conglomerate's primary business is not the
Business, as long as Employee is not directly or indirectly involved in
employment with or consulting in the Business, then in such event, that
employment is not prohibited from employment by such Conglomerate;
however, Employer shall be prohibited from being involved directly or
indirectly with the Business. Employee shall be prohibited from working
for a Conglomerate whose primary business is the Business. For the
purposes of this SECTION 9, "CONGLOMERATE" shall be defined as any
business which is comprised of entities or groups (e.g., divisions) with
multiple lines of business. Nothing herein shall prohibit Employee owning
an investment of less than ten percent (10%) of a Conglomerate.
E. NON-SOLICITATION AGREEMENT. During the Restricted Period,
Employee shall not, whether for his own account or for the account of any
other individual, partnership, firm, corporation or other business
organization, intentionally solicit, endeavor to entice away from Employer
or any entity controlled by or under common control with Employer, or
otherwise interfere in a material fashion with the relationship with, any
person who is
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employed by or otherwise engaged to perform services for Employer or any
person or entity who is as of the Termination Date, or within the then
most recent 12-month period, a customer or client of Employer. The giving
of references shall not be deemed a violation of this Section.
F. REFORMATION. Each of the parties hereto recognizes the time
limitations and territorial restrictions contained in this SECTION 9 are
properly required for the adequate protection of the business and goodwill
of Employer and agrees in the event any covenant or provision contained
herein shall be deemed to be illegal, unenforceable, or unreasonable by a
court or other tribunal of competent jurisdiction with respect to the time
limitation or any part of the Territory, such provision or covenant should
be modified to extend to the maximum time and territory that is reasonable
and submits to the reduction of said time limitations and territorial
restriction to such a time or an area as said court or tribunal shall deem
reasonable.
G. DOCUMENTS WRITTEN MATERIALS AND TANGIBLE PROPERTIES. To the
extent not otherwise provided for in this Employment Agreement, Employee
agrees that all documents, written materials and other tangible property,
including copies thereof, relating in any way to the business of Employer,
shall be and remain the exclusive property of Employer and shall be
returned to Employer by Employee immediately upon termination of his
employment by Employer or at the request of Employer.
H. INJUNCTIVE RELIEF. Employee hereby acknowledges and agrees that
Employer could not be fully compensated for damages resulting from a
continuing and material breach of any of the provisions of this SECTION 9
and, accordingly, that Employer shall be entitled to temporary and
permanent injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, to prevent a breach or
threatened breach of this SECTION 9 or to enforce the terms of this
SECTION 9. This right of Employer with respect to the obtaining of
injunctive relief shall not, however, diminish any right of Employer to
claim and recover monetary damages or to obtain any other remedy.
I. SURVIVAL. The provisions of this SECTION 9 shall continue in
effect notwithstanding the termination of, or resignation from, the
employment of Employee by Employer.
10. WAIVER OF BREACH. A waiver by a party of a breach of any provision of
this Employment Agreement shall not operate or be construed as a waiver of any
subsequent breach by the other party of the same or any other provision of this
Employment Agreement.
11. NOTICES. Any notice required to be given under this Employment
Agreement shall be deemed sufficient, if in writing, and sent by certified mail,
return
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receipt requested, or hand delivered, or via overnight delivery service to the
other party at the address shown below:
For Employer: Tristar Corporation
00000 Xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx Xxxxx
With a copy to: Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
For Employee: Xx. Xxxxxx Xxxxx
000 Xxxx Xxxxxx
X. Xxxxxxxxx, Xxx Xxxx 00000
With a copy to: Xxxx Xxxxxx, P.C.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx, Esq.
Either party may change its or his address for notices under this section by
giving notice of the change to the other pursuant to this section.
12. GOVERNING LAW; FORUM. This Employment Agreement shall be governed by
and construed in accordance with the laws of the State where Employer has its
corporate and administrative offices without regard to the conflicts of laws
rules thereof and is made and entered into in San Antonio, Bexar County, Texas.
Any and all controversies between the Employer and Employee shall be settled by
arbitration, in accordance with the Commercial Arbitration rules, then existing,
of the American Arbitration Association. Any arbitration hereunder shall be
before one arbitrator associated with the American Arbitration Rules of the
American Arbitration Association. The award of the arbitrator shall be final,
and judgment upon the award rendered may be entered in Bexar County, Texas. The
arbitrator may award attorneys' fees and costs to the prevailing party pursuant
to the terms of this Employment Agreement.
13. SEVERABILITY. If any of the provisions of this Employment Agreement is
determined to be invalid or unenforceable in part, the remaining provisions, and
the enforceable portions of any partially unenforceable provisions, shall
nevertheless be binding and enforceable.
14. BINDING EFFECT; EFFECTIVE DATE; ENTIRE AGREEMENT. Subject to SECTION
15 below, this Employment Agreement shall inure to the benefit of and shall be
binding upon Employer and its successors and assigns, and upon Employee
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and his heirs, legatees, executors, administrators, successors and
beneficiaries. This Employment Agreement shall be effective as of the date
hereof. This Employment Agreement contains the entire agreement between the
parties and supersedes any prior agreements, letter agreements, term sheets or
discussions between the parties, including the letter agreement between the
parties dated November 4, 1997. This Employment Agreement may not be amended
except by a written agreement signed by the parties.
15. ASSIGNMENT. This Employment Agreement shall not be assignable by
Employee without the prior written consent of Employer. This Employment
Agreement may only be assigned by Employer in connection with a sale of all or
substantially all of the assets of the Employer. In such event a written
assumption agreement shall be promptly delivered to Employee by the buyer of
such assets.
16. CAPTIONS. Captions of Sections are inserted only as a matter of
convenience and reference and in no way define, limit or describe the substance
or scope of this Employment Agreement or the intent of any of its provisions.
17. RULES OF CONSTRUCTION. This Employment Agreement has been negotiated
by the parties and is to be interpreted according to its fair meaning as if the
parties had prepared it together and not strictly for or against any party. All
references in this Employment Agreement to "parties" refer to parties in this
Employment Agreement unless expressly indicated otherwise. References in this
Employment Agreement to sections are to sections of this Employment Agreement
unless expressly indicated otherwise. References in this Employment Agreement to
"provisions" of this Employment Agreement refer to the terms, conditions and
promises contained in this Employment Agreement. At each place in this
Employment Agreement where the context so requires, the masculine, feminine or
neuter gender includes the others and the singular or plural number includes the
other. Forms of the verb "including" mean "including without limitation". The
word "or" is inclusive and includes "and".
18. INDEMNITY. Employer and Employee will enter into an Indemnity
Agreement in substantially the form attached hereto as EXHIBIT C
contemporaneously with or promptly after the execution hereof, which will
provide that the Employer will provide, subject to a customary limits and
exclusions, for the payment of legal fees and expenses related to the defense of
Employee of an action brought against Employee for which he is entitled to be
indemnified hereunder. The Employer will have the obligation to maintain and
continue in full force and effect an officer and directors insurance policy with
terms generally consistent with the officer and director insurance policy
currently in place.
19. REIMBURSEMENT OF EMPLOYEE'S ATTORNEY'S FEES. Employer shall pay
Employee for the legal fees of Employee's attorneys, Xxxx Xxxxxx, P.C., incurred
in connection with the negotiation and execution of this Employment Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
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TRISTAR CORPORATION
By: /s/ XXXXX XXXXX
Name: XXXXX XXXXX
Title: CHIEF EXECUTIVE OFFICER
/s/ XXXXXX XXXXX
-------------------------------------
XXXXXX XXXXX
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EXHIBIT A
CODE OF CONDUCT
X-0
XXXXXXX X
XXXX XX XXXXXXXXXXX
XXXXXX XXXXXX XXXXXX VENEZUELA
Xxxx Xxxxxxxx Xxxxxxxx Glamour, C. A. (Xxxx Nacris)
Delagar Xxxxxx G
Parfums DeCoeur
Fragrance Impressions
Lady in Red
L'Illusions
Yaz
From France to You
Paris Design
Q Perfumes
Xxxxxxx
Artmatic
Pavion
Wet n Wild
B-1
EXHIBIT C
INDEMNIFICATION AGREEMENT
This agreement is made as of the __th day of ___________, 199_, by and
between Tristar Corporation, a Delaware corporation (the "COMPANY"), and the
undersigned Officer of the Company (the "INDEMNITEE"), with reference to the
following facts:
A. The Company desires that Indemnitee continue as an officer and employee
of the Company and the Indemnitee wishes to continue to serve in such capacity.
B. Section 145 of the General Corporation Law of the State of Delaware,
under which Law the Company is organized, empowers corporations to indemnify a
person serving as a director, officer, employee or agent of the corporation and
a person who serves at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, or
other enterprise, and said Section 145 specifies that the indemnification set
forth therein shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise.
C. The Company's Certificate of Incorporation and Bylaws expressly provide
for the indemnification of certain individuals of the Company to the full extent
permitted by applicable law, the advancement of expenses in respect thereof, and
permit the execution of contracts, such as this Agreement, providing for
indemnification in addition to the indemnification obligations of the Company
set forth therein. The Indemnitee has indicated that he does not regard the
indemnities available under the Company's Certificate of Incorporation and
By-Laws as adequate to protect him against the risks associated with his service
to the Company and has noted that the Company does not currently provide
directors' and officers' liability insurance for his benefit, although the
Company intends to do so. In this connection the Company and the Indemnitee now
agree they should enter into this Indemnification Agreement in order to provide
greater protection to Indemnitee against such risks of service to the Company
D. In order to induce the Indemnitee to continue to serve as an officer
and employee of the Company and in consideration of his continued service, the
Company hereby agrees to indemnify the Indemnitee as follows:
(1) INDEMNITEE. The Company will indemnify and hold harmless the
Indemnitee, his executors, administrators or assigns, for any Expenses (as
defined below) which the Indemnitee is or becomes legally obligated to pay
in connection with any Proceeding. As used in this Agreement the term
"PROCEEDING" shall include any threatened, pending or completed claim,
action, suit or proceeding, (other than actions brought by or in the right
of the
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Company) or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which the Indemnitee may be or may have been
involved as a party or otherwise, by reason of the fact that Indemnitee is
or was an officer and employee of the Company, by reason of any actual or
alleged error or misstatement or misleading statement made or suffered by
the Indemnitee, by reason of any action taken by him or of any inaction on
his part while acting as such officer or employee, or by reason of the
fact that he was serving at the request of the Company as a director,
trustee, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise; provided, that in each such case
indemnitee acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company,
and, in the case of a criminal proceeding, in addition had no reasonable
cause to believe that his conduct was unlawful. With respect to any action
brought by or in the right of the Company, such Indemnitee shall also be
indemnified, to the extent not prohibited by applicable laws or as
determined by a court of competent jurisdiction, against expenses actually
and reasonably incurred by him in connection with such action if he acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company. As used in this Agreement,
the term "OTHER ENTERPRISE" shall include (without limitation) employee
benefit plans and administrative committees thereof, and the term "FINES"
shall include (without limitation) any excise tax assessed with respect to
any employee benefit plan.
(2) EXPENSES. As used in this Agreement, the term "EXPENSES" shall
include, without limitation, damages, judgments, fines, penalties,
settlements and costs, attorneys' fees and disbursements and costs of
attachment or similar bonds, investigations, and any expenses of
establishing a right to indemnification under this Agreement.
(3) ENFORCEMENT. If a claim or request under this Agreement is not
paid by the Company, or on its behalf, within thirty days after a written
claim or request has been received by the Company, the Indemnitee may at
any time thereafter bring suit against the Company to recover the unpaid
amount of the claim or request and if successful in whole or in part, the
Indemnitee shall be entitled to be paid also the Expenses of prosecuting
such suit. The Company shall have the right to recoup from the Indemnitee
the amount of any item or items of Expenses theretofore paid by the
Company pursuant to this Agreement, to the extent such Expenses are not
reasonable in nature or amounts; provided, however, that the Company shall
have the burden of proving such Expenses to be unreasonable. The burden of
proving that the Indemnitee is not entitled to indemnification for any
other reason shall be upon the Company.
(4) SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such
rights, including the execution
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of such documents necessary to enable the Company effectively to bring
suit to enforce such rights and providing all assistance requested by the
Company.
(5) EXCLUSIONS. The Company shall not be liable under this Agreement
to pay any Expenses in connection with any claim made against the
Indemnitee:
(a) to the extent that payment is actually made to the
Indemnitee under a valid, enforceable and collectible insurance
policy of the Company;
(b) in connection with a judicial action by or in the right of
the Company, in respect of any claim, issue or matter as to which
the Indemnitee shall have been adjudged to be liable for gross
negligence or misconduct in the performance of his duty to the
Company unless and only to the extent that any court in which such
action was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances
of the case, the Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses as such court shall deem proper;
(c) if it is provided by final judgment in a court of law or
other final adjudication to have been based upon or attributable to
the Indemnitee's in fact having gained any personal profit or
advantage to which he was not legally entitled;
(d) brought about or contributed to by the dishonesty of the
Indemnitee seeking payment hereunder, however, notwithstanding the
foregoing, the Indemnitee shall be protected under this Agreement as
to any claims upon which suit may be brought against him by reason
of any alleged dishonesty on his part, unless a judgment or other
final adjudication thereof adverse to the Indemnitee shall establish
that he committed (i) acts of active and deliberate dishonesty, (ii)
with actual dishonest purpose and intent, (iii) which acts were
material to the cause of action so adjudicated; or
(e) for any Expense which the Company is prohibited by
applicable law from paying as indemnity or for any other reason.
(6) INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding
any other provision of this Agreement, to the extent that the Indemnitee
has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against any
and all Expenses incurred in connection therewith.
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(7) PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to the indemnification by the Company for some
or a portion of Expenses, but not, however, for the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion of
such Expenses to which the Indemnitee is entitled.
(8) ADVANCES OF EXPENSES. Expenses incurred by the Indemnitee in
connection with any Proceeding, except the amount of any settlement, shall
be paid by the Company in advance upon the request of the Indemnitee that
the Company pay such Expenses. The Indemnitee hereby undertakes to repay
to the Company the amount of any Expenses theretofore paid by the Company
to the extent that it is ultimately determined that such Expenses were not
reasonable or that the Indemnitee is not entitled to indemnification.
(9) APPROVAL OF EXPENSES. No Expenses for which indemnity shall be
sought under this Agreement, other than those in respect of judgments and
verdicts actually rendered, shall be incurred without the prior consent of
the Company, which consent shall not be unreasonably withheld.
(10) NOTICE OF CLAIM. The Indemnitee, as a condition precedent to
his right to be indemnified under this Agreement, shall give to the
Company notice in writing as soon as practicable of any claim made against
him for which indemnity will or could be sought under this Agreement.
Notice to the Company shall be given at its principal office and shall be
directed to the Corporate Secretary (or such other address as the Company
shall designate in writing to the Indemnitee); notice shall be deemed
received if sent by prepaid mail properly addressed, the date of such
notice being the date postmarked. In addition, the Indemnitee shall give
the Company such information and cooperation as it may reasonably require
and as shall be within the Indemnitee's power.
(11) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
(12) INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. Nothing herein shall
be deemed to diminish or otherwise restrict the Indemnitee's right to
indemnification under any provision of the Certificate of Incorporation or
By-Laws of the Company and amendments thereto or under law.
(13) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
(14) SAVING CLAUSE. Wherever there is conflict between any provision
of this Agreement and any applicable present or future statute, law or
regulation contrary to which the Company and the Indemnitee have no legal
right to contract, the latter shall prevail, but in such event the
affected provisions of this
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Agreement shall be curtailed and restricted only to the extent necessary
to bring them within applicable legal requirements.
(15) COVERAGE. The provisions of this Agreement shall apply with
respect to the Indemnitee's service as an officer and employee of the
Company prior to the date of this Agreement and with respect to all
periods of such service after the date of this Agreement, even though the
Indemnitee may have ceased to be an officer and employee of the Company.
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and signed as of the day and year first above written.
TRISTAR CORPORATION
By: /s/ XXXXX XXXXX
Name: XXXXX XXXXX
Title: CHIEF EXECUTIVE OFFICER
/s/ XXXXXX XXXXX
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XXXXXX XXXXX
