Exhibit 10.9
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of March 11, 1996, by and between Xxxxxx Products
Company, a Georgia corporation (the "Company"), and Xxxxxx Xxxxx ("Executive").
WITNESSETH:
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WHEREAS, the current owners of all of the outstanding capital stock of
Aminco, Inc., the parent of the Company, have entered into a Stock Purchase
Agreement dated as of May 11, 1995 (the "Stock Purchase Agreement") with DNL
Savannah Acquisition Corp., a Delaware Corporation ("DNL"), under which such
shareholders shall sell, and DNL shall purchase, all of the outstanding capital
stock of Aminco, Inc.; and
WHEREAS, the Company wishes to retain the services of Executive from April
8, 1996, and Executive wishes to be employed in the service of the Company from
April 8, 1996, 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 April
8, 1996 and shall end on the third anniversary of that date (the "Expiration
Date"), unless terminated earlier under Section 5.
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 Vice President, Marketing.
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 she shall devote substantially all her working hours.
Executive shall report to the Executive Vice President, Global Marketing.
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
$140,000 per annum, payable bi-weekly in arrears. In addition, for each fiscal
year of the Company ending within the Term of Covered Employment, Executive
shall receive a bonus (the "Bonus") in an amount equal to (i) thirty percent
(30%) of her Base Salary if the "base case" objectives (but not the "anticipated
case" objectives) for such fiscal year as specified in the business plan
attached as Appendix A hereto are met, and (ii) fifty percent (50%) of her Base
Salary if the "anticipated case" objectives for such fiscal year as specified in
the business plan attached as Appendix A hereto are met. The Bonus shall be
paid
in a single lump sum 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, subject to the requirements of
applicable law.
3.3 Fringe Benefits.
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(a) Relocation Expenses/Allowance. The Company shall reimburse
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Executive for all expenses incurred by her in relocating to Savannah,
Georgia or its vicinity. The Company shall reimburse Executive for
all travel and temporary lodging expenses incurred by her prior to her
commencement of employment with the Company including two spouse
accompanied trips to Savannah, Georgia to secure her new permanent
residence in Savannah, Georgia or its vicinity. In addition the
Company shall pay Executive $10,000 as a general relocation allowance,
$12,000 per annum education allowance and weekly travel between
Warwick, New York and Georgia from April 8 through June 30, 1996 and
temporary housing expenses up to June 30, 1996.
(b) Other Fringe Benefits. During the Term of Covered Employment,
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Executive shall receive any fringe benefits generally provided by the
Company to its employees.
4. LONG-TERM INCENTIVE AWARD. In the event a "Triggering Event", as
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hereinafter defined, occurs while Executive is employed by the Company
(including any such employment following the expiration of the Term of Covered
Employment), the Company shall pay Executive, within 90 days after such
Triggering Event, a lump sum amount in cash equal to one-half of one percent
(0.5%) of the value of Aminco, Inc. (or any successor thereto) at the time of
such Triggering Event, minus $250,000. A "Triggering Event" means the earliest
to occur of (i) an initial public offering of the common stock of Aminco, Inc.
(or any successor thereto), (ii) a sale of substantially all of the stock of the
assets of Aminco, Inc. (or any successor thereto), or (iii) the fifth
anniversary of the Closing Date. For purposes of this Section 4, the value of
Aminco, Inc. (or any successor thereto) at the time of the Triggering Event
means (x) if the Triggering Event is the initial public offering of the common
stock of Aminco, Inc. (or any successor thereto), the value determined on the
basis of the price set for the sale of such common stock to the public in such
initial public offering, as established by the managing underwriters to such
public offering, (y) if the Triggering Event is the sale of substantially all of
the stock or assets of Aminco, Inc. (or any successor thereto), the price being
paid by the acquiror of such stock or assets, and (z) if the Triggering Event is
the fifth anniversary of the Closing Date, the value established as of such date
under a valuation of Aminco, Inc. (or any successor thereto) conducted by an
independent appraiser.
5. TERMINATION OF EMPLOYMENT. Notwithstanding any other provision
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of this Agreement, but subject to the notice provisions contained in this
Section 5, 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.
5.1 Termination for Cause. The Company may terminate Executive's
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employment with the Company for "Cause" (as hereinafter defined) in the
manner specified in this Section 5.1. In the event that after the Start
Date and prior to the Expiration Date, the Company terminates Executive's
employment with the Company for Cause, the Term of Covered
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Employment shall end on the date of such termination (which shall be the
date specified in the notice described in this Section 5.1) and Executive
shall be entitled only to any unpaid amount of Base Salary for her
employment with the Company through 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 her
duties under this Agreement, including, without limitation, her refusal to
follow or gross neglect of the directions of the Chief Executive Officer of
the Company or the Executive Vice President, Global Marketing 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"), which notice
shall have been authorized by a vote of the majority of the Company's Board
of Directors (the "Board") and shall specify the date of such termination,
which shall not be earlier than the date on which notice is given to the
Executive. Such notice shall be given to Executive no later than 10 days
after a member of the Board (other than Executive) has 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 meet with the Board to explain why Cause for such
termination does not exist. Within 15 days after any such meeting, the
Board shall give Executive its final decision regarding whether Cause
exists. If the Board's final decision is that Cause exists, Executive's
employment with the Company shall be terminated under this Section 5.1
pursuant to the Notice of Termination as of the date of termination
specified in such Notice. If the Board's final decision is that Cause does
not exist, Executive's employment with the Company shall not be terminated
under this Section 5.1.
5.2 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 after the Start Date 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 her 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.
5.3 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 Closing 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
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executive, within 15 days after such date of termination, an additional
lump sum amount equal to 150% of one year's Base Salary. 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.
5.4 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 Start 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 her beneficiary or
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 her duties under this Agreement for a period of at
least six consecutive months because of medically determinable physical or
mental impairment, as determined by a physician mutually agreeable to
Executive and the Company. If Executive and the Company are unable to
agree on such a physician, each shall appoint one physician and those two
physicians shall appoint a third physician who shall make such a
determination.
6. NON-COMPETITION; NON-SOLICITATION. While Executive is employed
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by the Company (including any period of such employment following the expiration
of the Term of Covered Employment), and during the period in which Executive is
receiving 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 business which manufactures and/or distributes ethnic hair
care products or cosmetics within a 500-mile radius of the Company's
headquarters, (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 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 6 or any other relief as
may be required to specifically enforce this covenant.
7. 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 her obligations under this Section 7) 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
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Company or any of its affiliates deals with them. Upon termination of
employment with the Company, Executive shall return to the Company all property
in her 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 7 or any other relief as may be required to
specifically enforce this covenant.
8. TAXES. The Company shall be entitled to deduct and withhold from
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all amounts payable under this Agreement all applicable Federal, state and local
taxes which the Company determines are required by law to be deducted and
withheld.
9. NOTICES. All notices and other communications under this
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Agreement shall be in writing and shall be given by hand delivery to the party
receiving such notice or by certified mail, return requested, postage prepaid,
addressed as follows:
If to Executive: Xx. Xxxxxx Xxxxx
0 Xxxxxx'x Xxxxx
Xxxxxxx, Xxx Xxxx 00000
If to the Company: Xxxxxx Products Company
00 X Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: 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.
10. SEVERABILITY. If any provision of this Agreement is held to be
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invalid under applicable law, such provision shall be ineffective only to the
extent of such invalidity, and the remaining provisions of this Agreement shall
be unimpaired.
11. WAIVERS. The waiver by either party of a breach of any provision
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of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of such provision, or as a waiver of any other provision of
this Agreement.
12. 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 her rights, duties, obligations or interests
hereunder to any other person without the prior express written consent of the
Board of Directors of the Company.
13. ENTIRE AGREEMENT. This instrument contains the entire agreement
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of the parties with respect to, and supersedes all prior agreements relating to,
Executive's employment with the Company.
14. GOVERNING LAW. This Agreement shall be governed by, and
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construed and enforced under, the laws of the State of Georgia.
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15. EFFECTIVENESS OF AGREEMENT. This Agreement shall be and become
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effective as of the Closing Date, provided, that if the Stock Purchase Agreement
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is terminated, this Agreement shall be cancelled and be of no force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Xxxxxx Products Company
By:____________________________
Xxx Xxxxx
Chairman & CEO
_________________________
Xxxxxx Xxxxx
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XXXXXX PRODUCTS COMPANY
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxx 00000-0000
July 31, 1996
PERSONAL AND CONFIDENTIAL
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Xx. Xxxxxx Xxxxx
0 Xxxxxx'x Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Re: Employment Agreement Modification
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Dear Xxxxxx:
I am pleased to advise you that the Board of Directors of Xxxxxx Products
Company (the "Company") has agreed to modify your employment agreement, dated as
of March 11, 1996, with the Company (the "Employment Agreement") to (i) extend
your term of employment thereunder, (ii) increase your base salary, (iii)
convert your stock-based long-term incentive opportunity into the right to
purchase Class A Common Stock of the Company, and (iv) effect certain other
changes thereto.
Accordingly, the Employment Agreement is hereby modified, effective as of
the dates set forth below, as follows:
1. Effective as of the closing of the Offerings (as that term is defined
in the Form S-1 Registration Statement filed by Xxxxxx, Inc. under the
Securities Act of 1933), Section 1 of the Employment Agreement is hereby amended
by deleting it in its entirety and replacing it with a new Section 1 to read in
its entirety as follows:
"1. Term of Covered Employment. The term of Executive's
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employment covered under this Agreement (the "Term of Covered Employment")
shall commence on the Closing Date and shall end on the third anniversary
of the closing of the Offerings, as that term is defined in the Form
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S-1 Registration Statement filed by Xxxxxx, Inc. under the Securities Act
of 1933, (the "Expiration Date"), unless earlier terminated under Section 5
of this Agreement."
2. Effective as of [the date hereof], Section 3.1 of the Employment
Agreement is hereby amended by deleting it in its entirety and replacing it with
a new Section 3.1 to read as follows:
"3.1 Compensation. For all services to be rendered during the
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Term of Covered Employment, the Company shall pay Executive a salary
("Base Salary") of $155,000 per annum, payable bi-weekly in arrears.
In addition, for each fiscal year of the Company ending within the
Term of Covered Employment, Executive shall receive a 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 that fiscal year, as specified by the Board (as
defined in Section 5.1 of this Agreement), or a committee thereof, are
achieved, or (ii) fifty percent (50%) of Base Salary if the
"anticipated case" objectives for that 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, each 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 for a fiscal year are achieved.
If the "base case" 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. Effective as of the date hereof, Section 3.2 of the Employment
Agreement is hereby amended by adding at the end thereof the following proviso:
", provided, however, that, unless otherwise determined by the Company
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and Xxxxxx, Inc., Executive shall not be eligible to
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participate in any profit-sharing plan maintained, sponsored or
contributed to by the Company or Xxxxxx, Inc. that is intended to
qualify under Section 401(a) of the Internal Revenue Code of 1986, as
amended."
4. Effective as of the date hereof, Section 4 of the Employment
Agreement is hereby amended by deleting it in its entirety and replacing it with
a new Section 4 to read as follows:
"4. Stock Purchase Right. Executive shall have the right to
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acquire 5.2205 shares of Xxxxxx, Inc.'s Class A Common Stock at a per share
purchase price equal to the fair market value per hare of the Class A
Common Stock on the date of purchase, as determined by the Board (as
defined in Section 5.1 of this Agreement). Executive may satisfy the
aggregate purchase price for the shares of the Class A Common Stock by
tendering cash or a promissory note (in the form attached hereto as Exhibit
1). If Executive elects to tender such a promissory note, Executive shall
execute and deliver a pledge agreement, in the form attached hereto as
Exhibit 2, pursuant to which Executive shall pledge the purchased shares of
the Class A Common Stock acquired to Xxxxxx, Inc. to secure payment of such
promissory note. As a condition of any such purchase, Executive shall also
execute and deliver a shareholders agreement, if required by the Company or
Xxxxxx, Inc., and a registration rights agreement (in the form attached
hereto as Exhibit 3)."
5. Effective as of the date hereof, Appendix A to the Employment
Agreement is hereby deleted in its entirety.
6. Except as expressly modified herein, the Employment Agreement
shall remain in full force and effect in accordance with its terms and
provisions as the same are set forth on the date hereof.
Please indicate your acceptance of and agreement to the above
modifications by signing this modification agreement in the space provided
below.
XXXXXX PRODUCTS COMPANY
By:___________________________
Name:
Title:
AGREED TO AND ACCEPTED:
____________________________
Xxxxxx Xxxxx
