EX-10.29
[LETTERHEAD OF DEL LABORATORIES, INC.]
November 25, 1997
Xx. Xxxxxxx X. Xxxxxxxx, Xx.
0 Xxx Xxxxxxx Xxxx
Xxxxx Xxxxxx Xxxxx, XX 00000
Dear Xxxxx:
This is to confirm our understanding relative to your employment with Del
Laboratories, Inc. ("Del").
1. You will be employed as Vice President, Chief Financial Officer of Del,
effective as of October 1, 1997. After the successful completion of your first
ninety (90) days of employment, this Agreement will be effective for an initial
term ending December 31, 1999, unless sooner terminated pursuant to paragraph 12
herein. Del will provide you with at least six (6) months' notice in the event
that it desires not to renew this Agreement past December 31, 1999.
2. In your capacity as Vice President, Chief Financial Officer, you shall
faithfully adhere to, execute and fulfill all policies established by Xxx. You
shall devote all of your business time and attention to the affairs of Del.
3. You shall be compensated at the annual base rate of not less than
$210,000. Any and all compensation payments required by this Agreement shall be
payable in accordance with Del policy during the stated term of this Agreement.
4. Del will furnish to you for use, in connection with company business,
an automobile in a class comparable to executives of your rank. Del shall pay
for all of the operating and maintenance costs of such automobile, including all
insurance charges. You shall be responsible for all tax liability arising from
income reportable by Del to federal, state and local tax authorities and
attributable to your non-business use of the automobile furnished by Del. In
addition, Xxx will assist you in your relocation from New Jersey to Long Island
in accordance with Del's standard relocation policy for executives.
5. Del will reimburse you for all properly documented necessary and
reasonable business expenses in accordance with Del policy.
6. You shall participate, subject to eligibility, in such vacation,
profit-sharing, pension, group insurance, executive medical, hospitalization or
other incentive benefit plans or arrangements as Del may now or in the future
maintain for its executives of comparable rank to you. Nothing herein shall be
construed to require Del to establish or continue such plan. Rather, the
establishment and/or continuance of any such plan is within the sole discretion
of
Del. Notwithstanding the foregoing, in connection with the first twelve (12)
months of your employment, you will receive a minimum guaranteed bonus of
$60,000; such bonus will be payable on a pro rated annualized basis at the times
that Del pays annual bonuses to other executives of your rank. During the period
of your employment hereunder, Del shall provide a policy of life insurance in
the principle amount of not less than $500,000, payable to your designee,
provided that you are insurable at normal rates for a person of your age and
sex. You will cooperate in enabling Del to obtain such a policy.
7. (a) You recognize that as an executive of Del you will have access to,
acquire or assist in the development of secret and confidential information
regarding Del, its products, customers and plans, the disclosure of which to the
competitors of Del or others would cause Del to suffer substantial and
irreparable damage. You acknowledge that such information is of great value to
Del, is the sole property of Del and that such information has been and will be
acquired by you in confidence. In consideration of the obligations undertaken by
Xxx as set forth herein, you will not, at any time, during or after your
employment hereunder, publish, disclose or use, or authorize any other person or
entity to publish, disclose or use, any secret or confidential information,
whether patentable or not, of or about Del, including trade secrets (as that
term is defined below) and any other secret or confidential information of which
you become aware of or informed during the term of your employment, whether or
not developed by you, except as required in your duties to Del. For purposes
hereof, "trade secrets" shall include, without limitation, compilations,
studies, strategies, programs, methods, techniques and processes of or about Del
and its affiliates or their business, customers or suppliers, which derive
independent economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by, other persons who can obtain
economic value from their disclosure or use and which are the subject of efforts
to maintain their secrecy that are reasonable under the circumstances. Some
examples are information relating to (i) special needs and characteristics of
customers of Del and its affiliates, (ii) computer programs and controls, (iii)
existing and new or envisioned products, formulas, ingredients, devices,
methods, processes and techniques, (iv) laboratory tests and data, studies and
analyses, research and development data and projections, (v) marketing, sales,
pricing, costs and other financial data and projections, (vi) marketing,
promotional and advertising studies, programs and strategies, (vii) names of
current, former and prospective customers and suppliers of Del.
(b) Upon termination of your employment with Del, you shall promptly
deliver to Del all files, records, documents, drawings, blueprints, product
samples, tests, test results, manuals, letters, notes, notebooks and reports of
Del, and all copies thereof, and all other materials of a secret or confidential
nature relating to Del's business.
8. (a) You recognize that the services to be performed by you hereunder
are special, unique and extraordinary. The parties confirm that it is reasonably
necessary for the protection of Del that you agree, and accordingly, you do
hereby agree that, unless you have obtained the prior written consent of Del,
you will not, directly or indirectly, at any time during your employment
hereunder and thereafter for the remaining stated term of the
2
Agreement or six months from the date of termination of your employment,
whichever is longer (provided that, if this Agreement is terminated without
cause by Del, the provisions of this paragraph 8 shall only be applicable while
you are being paid by Del as an employee or consultant):
i) become an officer, director, stockholder, principal,
associate, partner, employee, owner, agent, creditor, independent contractor or
co-venturer of, or engage or participate in any other individual or
representative capacity whatsoever, in the conduct or management of, or own or
have any stock or other proprietary or financial interest in, or any other way
be interested in or associated with any other corporation, firm or business
engaged in the same or an similar business competitive with that of Del except
that you shall be free without such consent to own up to 3% of the capital stock
of corporations whose securities are publicly owned and regularly traded on any
national exchange or in the over-the-counter market; or
ii) solicit, or cause or authorize any other person or entity
to solicit, for or on behalf of yourself or any third party, persons or entities
who were customers of Del at any time within one year prior to the cessation of
our employment hereunder for any business similar to the business transacted by
Del with such customer; or
iii) sell to or accept, or cause or authorize any other person
or entity to sell to or accept, for or on behalf of you or any third party, any
such business from any such customers of Del.
9. For a period of two (2) years after the termination of your
employment with Del, you will not solicit, or cause or authorize any other
person or entity to solicit, advise, recommend, or in any way participate in
the hiring process of, any employee, consultant or contractor of Del, or any
other person, who was at any time within one year prior to the cessation of
your employment hereunder then under contract with or rendering services to
Del, to terminate his or her employment by, or consulting or contractual
relationship with Del, or to refrain from extending or renewing the same
(upon the same or new terms), to refrain from rendering services to Del, or
to become employed or retained by or to enter into contractual relations with
persons or entities other than Del.
10. All inventions, ideas, processes, designs, or discoveries relating
to the business of Del, whether or not patentable or entitled to trademark,
copyright or other protection, which you conceive, produce or make, alone or
jointly with others, during your employment with Del or at any time
thereafter if you use Del's trade secrets or other confidential information
which in any way relates to the present or anticipated business, development,
tests, products or activities of Del, or which in any way results from or are
suggested by or connected with your employment with Del, are and shall be the
property of Del. You also agree to, and hereby do, assign and transfer to Del
all of your rights, title and interest in and to such inventions, and in any
and all Letter Patents and/or patent applications with respect thereto, and
you further agree that whenever requested by Xxx, either during or subsequent
to your employment, you
3
shall execute patent and/or copyright applications, and other instruments
considered necessary or desirable by Xxx, to apply for and obtain Letters Patent
and/or copyrights of the United States and foreign countries covering such
inventions, processes, designs, discoveries, and/or ideas, and you shall make
assignments and execute any other instruments necessary to convey to Del
ownership and exclusive rights to such inventions, discoveries, patent
applications, patents and copyrights. Del shall bear all expenses connected with
such patent, patent applications and maintenance of patent protection, and
copyrights, and if services in connection therewith are performed by you at the
request of Del after the termination of your employment, Del shall pay
reasonable compensation for such services.
11. (a) You agree that any breach or threatened breach by you of any
provisions of paragraphs 7, 8, 9 or 10 would result in irreparable harm to Del
and could not reasonably or adequately be compensated in damages and that, in
the event of any such breach or threatened breach, Del shall be entitled to (i)
equitable relief, including but not limited to temporary, preliminary and
permanent injunctive relief enforcing the specific performance by you of this
Agreement or enjoining or restraining you from any violation or threatened
violation of the terms of this Agreement, and an equitable accounting of all
earnings, profits and other benefits arising from such breach, and (ii) recover
from you an amount equal to all profits, commissions or other compensation or
remuneration received or earned, directly or indirectly, by you from or on
account of any violation of your obligations under paragraphs 7, 8, 9 and 10 of
this Agreement. You further agree that if it is determined that you have
breached the restrictions contained in paragraphs 7, 8, 9 and 10 of this
Agreement, Del shall be entitled to recover from you all costs and reasonable
attorney's fees incurred as a result of its attempts to redress such breach or
enforce its rights and protect its legitimate interest. If any of the
restrictions contained in paragraph 8 or 9 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 thereof, and in its
reduced form such paragraph shall then be enforceable in the manner contemplated
hereby.
(b) Paragraphs 7, 8, 9 and 10 shall survive the termination of your
employment hereunder for the periods therein provided.
(c) For purposes of paragraphs 7, 8, 9 and 10, "Del" shall mean Del
and its affiliates.
12. (a) This Agreement shall terminate upon your death and may be
terminated by Del upon your permanent disability. Permanent disability shall be
deemed to exist if in the judgment of a physician licensed to practice in the
State of New York selected by Del, you have been unable or will be unable, due
to mental or physical incapacity, disease or injury to perform your duties or
services to Del for a period of not less than three consecutive months. If this
Agreement terminates due to your death, Del shall pay you or your legal
representative, as the case may be, an amount equal to your base salary for
three months. If the Agreement terminates due to your permanent disability, Del
shall pay you or your legal representative, as
4
the case may be, an amount equal to your base salary for the greater of three
months or until you are eligible for long term disability coverage under Del's
long term disability plan (provided, however, that such period shall not exceed
six months). Such amounts shall be paid in monthly installments.
(b) Del may terminate this Agreement for cause in the event you:
(i) commit any act of fraud or dishonesty in connection with
your employment or otherwise involving Del;
(ii) fail, refuse or neglect to perform any material duty or
obligation to Del or fail, refuse or neglect to carry out any
written instructions or directions of Del;
(iii) engage in conduct which, in Del's good faith opinion, is
detrimental to Xxx's interests;
(iv) commit a material breach of any provision of this
Agreement or any fiduciary or other duty to Del;
(v) engage in misconduct in connection with your employment;
(vii) violate paragraphs 7, 8, 9 and 10 above; or
(viii) misrepresent or fail to disclose any material fact,
information or statement to Del.
(c) In the event Del terminates this Agreement for cause, or with
notice of termination as provided in Paragraph 1 above, Del's obligations (other
than those, if any, pursuant to paragraph 13 below) shall cease and terminate as
of the date of such termination.
(d) In the event Del terminates this Agreement during the initial
term without cause, you shall be entitled to receive as liquidated damages and
in lieu of any other payment from or claim against Del, your base salary for the
remainder of the initial term, less appropriate deductions as required by law.
13. You agree that you will give Del at least one hundred twenty (120)
days' notice prior to any voluntary termination of your employment hereunder. In
the event of the termination of your employment hereunder for any reason, Del
shall have the option, in its sole discretion, to retain your services as a
consultant for a period of up to six (6) months from the date of such
termination, at the annual base rate set forth in paragraph 3 of this Agreement.
Your duties as a consultant shall be determined by Del, and you shall spend such
time during normal business hours as is reasonably necessary to accomplish those
duties. If you fail or refuse to act as a consultant during such period, Del may
elect to terminate your consultancy
5
by notice in accordance herewith. During any period when you are receiving
compensation hereunder, including periods when Del has tendered such
compensation despite your failure or refusal to act, you shall continue to be
bound by the provisions of paragraphs 7, 8, 9 and 10 of this Agreement. Payments
pursuant to this paragraph are in lieu of, and supersede, any other obligations
Del has to you pursuant to this Agreement. During the period of such
consultancy, you shall not accept any other employment so long as Del continues
to pay you as herein provided.
14. You have represented and hereby represent and warrant to Del that
there are no restrictions, covenants, agreements or limitations on your right or
ability to enter into and perform the terms of this Agreement, and agree to
indemnify and save the Company harmless from any liability, cost or expense,
including attorneys' fees, based upon or arising out of any such restrictions,
covenants, agreements or limitations that may be found to exist.
15. You agree that during the period you are employed by Xxx, and at all
reasonable times thereafter, you will assist and cooperate with Del in
connection with any ongoing or future investigation, dispute or claim of any
kind involving Del, including any proceeding before any arbitral,
administrative, regulatory, judicial, legislative or other body or agency, to
the extent that such claims, investigations or proceedings relate to services
performed or required to be performed by you, pertinent knowledge possessed by
you or any act or omission by you.
16. In connection with your employment with Del, you shall comply in all
material respects with all federal, state and local laws, rules and regulations
applicable to Del's business.
17. This Agreement is personal and non-assignable to you. It shall extend
to, and be binding upon any corporation or other entity with which Del shall
merge or consolidate or to which Del shall lease or sell all or substantially
all of its assets and may be assigned by Del to any affiliate of Del or to any
corporation or entity with which such affiliate shall merge or consolidate or to
which such affiliate shall lease or sell all or substantially all of its assets.
18. Any notices or other communications required by permitted to be given
hereunder shall be in writing, and shall be duly given if delivered personally
or sent by registered or certified mail, return receipt requested, to Del at 000
Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxx 00000, Attention: Xxx X. Xxxxxxx,
President and to you at your address first set forth above, or to such other
address as either party shall designate by written notice to the other.
19. Except as set forth in Paragraphs 7, 8 and 9 above, any claim or
controversy arising out of or relating to this Agreement, or any breach thereof,
or otherwise relating to your employment, compensation and benefits with the
Company, or the termination thereof, shall be settled by arbitration in New
York, New York in accordance with the rules established by the American
Arbitration Association; provided, however, that you and Del agree that (i) the
arbitrator shall be prohibited from disregarding, adding to or modifying the
terms of this
6
Agreement; (ii) the arbitrator shall be required to follow established
principles of substantive law and the law governing burdens of proof; (iii) only
legally protected rights may be enforced in arbitration; (iv) the arbitrator
shall be without authority to award punitive or exemplary damages; (v) the
arbitrator shall be an attorney licensed to practice law in New York who has
experience in similar matters; and (vi) any demand for arbitration must be filed
and served, if at all, within 180 days of the occurrence of the act or omission
complained of. Any claim or controversy not submitted to arbitration in
accordance with this Paragraph 18 shall be considered waived and, thereafter, no
arbitration panel or tribunal or court shall have the power to rule or make any
award on any such claim or controversy. The award rendered in any arbitration
proceeding held under this Paragraph 19 shall be final and binding, and judgment
upon the award may be entered in any court having jurisdiction thereof, provided
it conforms to established principles of law and is supported by substantial
record evidence.
20. This agreement constitutes the entire agreement between us in any way
relating to your employment, compensation and benefits with Del and supersedes
all prior agreements and understandings between us. This agreement may not be
altered or amended except by a writing signed by you and the Chief Executive
Officer of Del.
21. This Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of New York, without reference to choice
of law principles.
Very truly yours,
DEL LABORATORIES, INC.
By: /s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx
Chairman of the Board,
President and Chief Executive Officer
AGREED:
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
7
