EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated October 28, 1996, by and between Azurel
Ltd., a Delaware corporation (the "Company"), and XXXXXX XXXXXX, an individual
residing at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to secure the unique experience, ability
and services of the Executive upon the terms and conditions hereinafter set
forth and to prevent any other competitive business from securing his services
other than as herein set forth; and
WHEREAS, the Executive desires to render services to the Company upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
Section 1. Employment. The Company hereby employs Executive and the
Executive hereby accepts such employment, as the Chairman of the Board of
Directors and Chief Executive Officer of the Company, subject to the terms and
conditions set forth in this Agreement.
Section 2. Duties. The Executive shall serve as the Chairman of the
Board of Directors and Chief Executive Officer of the Company and shall properly
perform such duties as may be assigned to him from time to time by the Board of
Directors of the Company. If requested by the Company, the Executive shall
render services to subsidiaries and affiliates of the Company ("Affiliates"),
serve as an officer of the Company or any Affiliate, and serve on the Board of
Directors of the Company on any Affiliates or any committee thereof without
additional compensation. During the Term, as defined below, the Executive shall
devote substantially all of his business time to the performance of his duties
hereunder unless otherwise authorized by the Board of Directors. Executive
agrees, at the Company's request and expense, to be examined by a physician in
order for the Company to obtain key man life insurance on Executive's life, and
Executive's consents to Company obtaining such life insurance.
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Section 3. Term of Employment. The term of the Executive's employment
shall be for a period of thirty-six (36) months commencing on the effective date
of the initial public offering of the Company's securities (the "Term"), subject
to earlier termination as set forth herein. The Term of this Agreement shall be
automatically extended for additional one (1) year renewals, unless either party
notifies to other in writing at least ninety (90) days prior to the expiration
of the then existing Term of its intention not to extend the Term. If the Term
has not commenced by March 30, 1997, either party may cancel this Agreement,
without liability to the other, on written notice to the other party.
Section 4. Compensation of Executive.
4.1. Salary. Company shall pay to Executive the annual
compensation of $95,000 for his services hereunder, less such deductions as
shall be required to be withheld by applicable law and regulations. All salaries
payable to Executive shall be paid at such regular weekly, biweekly or
semi-monthly time or times as the Company makes payment of its regular payroll
in the regular course of business.
4.2 Discretionary Bonus. During the Term and in addition to
the annual salary set forth in Section 4.1 above, the Executive shall be
entitled to such bonus and/or additional compensation as the Board of Directors
of the Company may determine from time to time in its sole discretion, payable
in cash, stock options and/or in capital stock of the Company.
4.3 Automobile Allowance. Executive shall receive an
automobile allowance for use of an automobile to be provided by Executive, of
$800.00 per month plus reimbursement for automobile liability, casualty, etc.
insurance, in the actual amount thereof, not to exceed $1,500 per annum. Such
payment shall be in lieu of any payment for the cost of acquiring and insuring
such automobile and the maintenance and repair thereof.
4.4 Expenses. During the Term, the Company shall reimburse the
Executive for all reasonable and
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necessary travel and entertainment expenses and other bona fide expenses
incurred by the Executive on behalf of the Company, in performance of the
Executive's duties hereunder.
4.5 Benefits. The Executive shall be permitted during the Term
to participate in any medical, dental, hospitalization or disability insurance
plans, health plans, health programs, pension plans, bonus plans or similar
benefits that may be available to other executives of the Company to the extent
the Executive is eligible under the terms of such plans or programs and in
accordance with the terms of such plans on programs. The Company, at its
expense, shall provide executive with a life insurance policy on his life (term
or group) with a minimum death benefit of $500,000, payable to the beneficiary
designated by Executive.
4.6 Acceleration of Compensation. In the event that either (i)
a tender offer for shares of the Company's Common Stock is made, which tender is
not approved by the Company's Board of Directors and a majority of the Company's
outstanding stock is tendered thereunder, or (ii) a Board of Directors, not
recommended by management is impaneled, then and in either of those events, two
times the then unpaid balance of the entire compensation required to be paid
pursuant to this Agreement through the end of the Term (but in no event less
than the compensation for twelve months), shall be immediately due and payable
to the Executive.
5. Vacations. The Executive shall be entitled to a vacation
of three weeks per year, during which period his salary shall be paid in full.
The Executive shall take his vacation at such time or times as the Executive and
the Company shall determine is mutually convenient.
6. Disability of the Executive. If the Executive is
incapacitated or disabled by accident, sickness or otherwise (including, without
limitation, as a result of abuse of alcohol or other drugs or controlled
substances) so as to render the Executive mentally or physically incapable of
performing the services required to be performed under this Agreement for a
period of one hundred twenty (120) consecutive days or longer or for any one
hundred eighty (180) days in any period of three hundred sixty (360) consecutive
days (a "Disability"), the Company may, at that
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time or any time thereafter, at its option, terminate the employment of the
Executive under this Agreement immediately upon giving the Executive notice to
that effect. In the event of the Disability of the Executive, the Executive
shall receive severance compensation equal to the Base Salary for the greater
of(a) the remainder of the Term of this Agreement and (b) the twelve (12) month
period commencing on the Termination Date (as defined below).
Section 7 Termination.
7.1. Termination for Cause. The Company may terminate the
employment of the Executive and all of the Company's obligations under this
Agreement at any time for Cause (as hereinafter defined) by giving the Executive
notice of such termination, with reasonable specificity of the details thereof.
"Cause" shall mean (i) the Executive's misconduct as could reasonably be
expected to have a material adverse effect on the business and affairs of the
Company, (ii) the Executive's disregard of lawful instructions of the Company's
Board of Directors consistent with the Executive's position relating to the
business of the Company or neglect of duties or failure to act, which, in each
case, could reasonably be expected to have a material adverse effect on the
business and affairs of the Company, (iii) the commission by the Executive of an
act constituting common law fraud, or a felony, or criminal act against the
Company or any Affiliate or any of the assets of any of them, (iv) conviction of
a crime involving moral turpitude or (v) the Executive's material breach of any
of the agreements contained herein. A termination pursuant to Section 7.1(i),
(ii) or (v) shall take effect thirty (30) days after the giving of the notice
contemplated hereby unless the Executive shall, during such thirty (30) day
period, remedy to the satisfaction of the Board of Directors of the Company the
misconduct, disregard or breach specified in such notice; provided, however,
that such termination shall take effect immediately upon the giving of such
notice if the Board of Directors of the Company shall, in its sole discretion,
have determined that such misconduct, disregard or breach is not remediable
(which determination shall be stated in such notice). A termination pursuant to
Section 7.1(iii) or (iv) shall take effect immediately upon the giving of the
notice contemplated hereby.
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7.2 Termination without Cause. The Company may terminate the
employment of the Executive and all of the Company's obligations under this
Agreement (except as hereinafter provided) at any time during the Term without
Cause (hereinafter, "Not for Cause") by giving the Executive written notice of
such termination, to be effective fifteen (15) days following the giving of such
written notice.
7.3. Termination for Good Reason; Resignation. The Executive
may (i) resign or (ii) terminate his employment and all of his obligations under
this Agreement at any time during the Term for Good Reason (as hereinafter
defined) by giving the Company notice of such termination, with reasonable
specificity of the details thereof, to be effective thirty (30) days following
the giving of such written notice. Good Reason shall mean the occurrence of any
of the following events or conditions:
(i)(A) the assignment to the Executive of any duties materially
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2 of this Agreement, of (B) any
other action by the Company which results in a material diminution in such
position, authority, duties or responsibilities, other than an insubstantial and
inadvertent action which is remedied by the Company promptly after receipt of
notice thereof given by the Executive; or (ii) any failure by the Company to
comply with the provisions of Section 4 or 5 of this Agreement, other than an
insubstantial and inadvertent failure which is remedied by the Company promptly
after receipt of notice thereof given by the Executive, or (iii) the Company's
requiring the Executive to be based at any office or location outside a fifty
(50) mile radius from 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except for travel
reasonably required in the performance of the Executive's responsibilities; or
(iv) any purported termination by the Company of the Executive's employment
otherwise than as permitted by this Agreement, it being understood that any such
purported termination shall not be effective for any purpose of this Agreement.
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For purposes of this subsection, any good faith determination
of Good Reason made by the Executive shall be conclusive.
For convenience of reference, the date upon which any
termination of the employment of the Executive pursuant to Sections 6 or 7
shall be effective shall be hereinafter referred to as the "Termination Date."
8. Effect of Termination of Employment.
(a) Upon the termination of the Executive's employment for
Cause, neither the Executive nor the Executive's beneficiaries or estate shall
have any further rights under this Agreement or any claims against the Company
arising out of this Agreement, except the right to receive (i) the unpaid
portion of the Base Salary provided for in Section 4.1, computed on a pro rata
basis to the Termination Date (the "Unpaid Salary Amount") and (ii)
reimbursement for any expenses for which the Executive shall not have
theretofore been reimbursed, as provided in Section 4.5 (the "Expense
Reimbursement Amount").
(b) Upon the termination of the Executive's employment by the
Company Not for Cause or by the Executive for Good Reason, neither the Executive
nor the Executive's beneficiaries or estate shall have any further rights under
this Agreement or any claims against the Company arising out of this Agreement,
except the right to receive (i) the Unpaid Salary Amount, (ii) the Expense
Reimbursement Amount and (ii) severance compensation equal to the Base Salary
for the remainder of the Term (but in no event less than twelve months), without
giving effect to any automatic renewal of the Term.
(c) In the event the Executive resigns from the employment by
the Company prior to the end of the Term other than for Good Reason, neither the
Executive nor the Executive's beneficiaries or estate shall have any further
rights under this Agreement or claims against the Company arising out of this
Agreement except the right to receive (i) the Unpaid Salary Amount, (ii) the
Expense Reimbursement Amount.
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Notwithstanding the preceding provisions of this Section 8, in
the event the payments to be received by the Executive would constitute an
"excess parachute payment" under the Internal Revenue Code of 1986, and
applicable regulations as then in effect, then such payments shall be reduced
accordingly so as not to constitute an "excess parachute payment."
Section 9. Disclosure of Confidential Information. The Executive
recognizes that he has had and will continue to have access to secret and
confidential information regarding the Company, including but not limited to
its customer list, products, formulate, know-how, and business and marketing
plans ("Confidential Information"). The Executive acknowledges that such
information is of great value to the Company, is the sole property of the
Company, and has been and will be acquired by him in confidence. In
consideration of the obligations undertaken by the Company herein, the Executive
will not, at any time, during or after his employment hereunder, reveal, divulge
or make known to any person, any Confidential Information acquired by the
Executive during the course of his employment. The provisions of this Section 9
shall survive the Executive's employment hereunder.
Section 10. Covenant Not To Compete.
(a) The Executive recognizes that the services to be performed
by him hereunder are special, unique and extraordinary. The parties confirm that
it is reasonably necessary for the protection of Company that the Executive
agree, and accordingly, the Executive does hereby agree, that he shall not,
directly or indirectly, at any time during the Term and the "Restricted Period"
(as defined below except on behalf of the Company):
(i) except as provided in Subsections (d)
below, be engaged in the manufacture, sale, distribution or
marketing of cosmetics or fragrances (the "Industry") or
provide technical assistance, advice or counseling regarding
the Industry in the United States or any other country in
which the Company or any Affiliate is engaged in the conduct
of business (including licensing others to engage in the
Industry using brand names
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owned by, or licensed to the Company), either on his own
behalf or as an officer, director, stockholder, partner,
consultant, associate, employee, owner, agent, creditor,
independent contractor, or co-venturer of any third party; or
(ii) employ or engage, or cause or authorize,
directly or indirectly, to be employed or engaged, for or on
behalf of himself or any third party, any employee or agent
of Company or any Affiliate,
(b) The Executive hereby agrees that he will not, directly
or indirectly, for or on behalf of himself or any third party, at any time
during the term of the Agreement and during the Restricted Period solicit any
customers of the Company or any Affiliate with regard to any activity prohibited
by section 10(a).
(c) If any of the restrictions contained in this Section 10
shall be deemed to be unenforceable by reason of the extent, duration or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form this
Section shall then be enforceable in the manner contemplated hereby.
(d) This Section 10 shall not be construed to prevent
Executive from owning, directly or indirectly, in the aggregate, an amount not
exceeding three percent (3%) of the issued and outstanding voting securities of
any class of stock of any company whose voting capital stock is traded on a
national securities exchange or on the over-the-counter market other than
securities of the Company.
(e) The term "Restricted Period," as used in this Section 10,
shall mean the period of the Executive's actual employment hereunder plus:) in
the event the Executive resigns without Good Reason or the Executive is
terminated for Cause, the twelve (12) months after the Termination Date.
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(f) The provisions of this Section 10 shall survive the end
of the Restricted Period as provided in Section 10(e) hereof.
Section 11. Miscellaneous.
11.1 Injunctive Relief. The Executive acknowledges that the
services to be rendered under the provisions of this Agreement are of a special,
unique and extraordinary character and that it would be difficult or impossible
to replace such services. Accordingly, the Executive agrees that any breach or
threatened breach by him of Sections 9 or 10 of this Agreement shall entitle the
Company, in addition to all other legal remedies available to it, to apply to
any court of competent jurisdiction to seek to enjoin such breach or threatened
breach without the need to prove irreparable injury on the inadequacy of legal
remedies and without bond. The parties understand and intend that each
restriction agreed to by Executive hereinafter shall be construed as separable
and divisible from every other restriction, that the unenforceability of any
restriction shall not limit the enforceability, in whole or in part, of any
other restriction, and that one or more or all of such restrictions may be
enforced in whole or in part as the circumstances warrant. In the event that any
restriction in this Agreement is more restrictive than permitted by law in the
jurisdiction in which Company seeks enforcement thereof, such restriction shall
be limited to the extent permitted by law.
11.2 Assignment. Neither the Executive nor the Company may
assign or delegate any of their rights or duties under this Agreement without
the express written consent of the other. The Company may assign this Agreement
to a successor by consolidations on merger or to an entity or person acquiring
all or substantially all of the assets and business of the Company as a going
concern.
11.3 Entire Agreement. This Agreement constitutes and embodies
the full and complete understanding and agreement of the parties with respect to
the Executive's employment by the Company, supersedes all prior understandings
and agreements, whether oral or written, between the Executive and the Company,
and shall not be amended, modified or changed except by an instrument in
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writing executed by the party to be charged. The invalidity or partial
invalidity of one or more provisions of this Agreement shall not invalidate
any other provision of this Agreement. No waiver by either party of any
provision or condition to be performed shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
11.4 Binding Effect. This Agreement shall inure to the benefit
of, be binding upon and enforceable against, the parties hereto and their
respective successors, heirs, beneficiaries and permitted assigns.
11.5 Headings. The headings contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
11.6 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered, sent by
registered or certified mail, return receipt requested, postage prepaid, or by
private overnight mail service (e.g. Federal Express) to the party at the
address set forth above or to such other address as either party may hereafter
give notice of in accordance with the provisions hereof. Notices shall be deemed
given on the sooner of the date actually received or the third business day
after sending.
11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to such State's conflicts of laws provisions and each of the parties
hereto irrevocably consents to the jurisdiction and venue of the federal and
state courts located in the State of New York, County of New York.
11.8 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute on of the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.
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AZUREL LTD.
By: /s/ Xxxxxxxxxxx Xxxxx
Name: XXXXXXXXXXX XXXXX
Title: PRESIDENT
/s/ Xxxxxx Xxxxxx
XXXXXX XXXXXX
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