EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 1st day of August 1995, by and between The Cosmetic Center, Inc. a
Delaware corporation qualified to do business in Maryland with its principal
place of business located at 0000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000
("COMPANY"), and Xxxxx X. Xxxxxx, now residing at 0000 Xxxxxxxxx Xxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000 ("EMPLOYEE").
RECITALS
1. The COMPANY is engaged in the specialty retail sale and wholesale
distribution of a wide range of brand name cosmetic, fragrance, beauty aides and
related items.
2. EMPLOYEE is Vice President - Finance and Chief Financial
Officer of the COMPANY.
3. The COMPANY desires to employ and retain the unique experience,
ability and services of EMPLOYEE and EMPLOYEE desires and is willing to
undertake and continue such employment with the COMPANY, all upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the recitals, and of the mutual
covenants and agreements herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
COMPANY hereby employs EMPLOYEE, and EMPLOYEE hereby accepts employment with the
COMPANY, upon the terms and conditions set forth in this Agreement:
1. EMPLOYMENT AND DUTIES
During the term of this Agreement, EMPLOYEE shall continue in
the employ of the COMPANY and shall devote his entire time and attention to the
business and affairs of the COMPANY. During such period EMPLOYEE shall serve as
Vice President - Finance and Chief Financial Officer and shall serve in such
other capacities and perform such duties as the COMPANY shall require from time
to time.
Further, with respect to any sole proprietorship, firm,
company, corporation, joint venture, general or limited partnership, trust or
other entity (collectively a "Business Entity") which is a subsidiary or
otherwise affiliated with the COMPANY, whether or not controlled by the COMPANY
(collectively, an "Affiliate"), EMPLOYEE hereby agrees, at the request of the
President of the COMPANY made at any time and from time to time, to serve in
such other offices, positions and/or capacities with an Affiliate as to which he
may be elected or appointed, and to perform the duties required of him as such.
2. TERM OF EMPLOYMENT
A. Term. The term of EMPLOYEE'S employment hereunder shall
commence on August 1, 1995 and continue until July 31, 1996 (the "Original
Term"). The term of EMPLOYEE's employment hereunder shall be automatically
extended for successive additional twelve (12) month periods ("Additional
Terms") unless a notice to terminate this Agreement is given by the COMPANY to
EMPLOYEE, or by EMPLOYEE to the COMPANY, at least ninety (90) days prior to the
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expiration of the Original Term or of the then-applicable Additional Term (if
any). The Original Term and any Additional Terms are together referred to herein
as the "Entire Term" of this Agreement. On or before the last day of EMPLOYEE's
employment hereunder, EMPLOYEE shall execute and deliver to the COMPANY a letter
of resignation from all offices then held by EMPLOYEE with the COMPANY and with
any Affiliates effective upon said last day of employment hereunder.
B. Earlier Termination. Notwithstanding the aforesaid
provisions of this Section 2, this Agreement may be terminated
pursuant to the terms and conditions of Section 6 prior to what
would otherwise be the expiration of this Agreement's Term.
3. COMPENSATION OF EMPLOYEE
A. Salary. The COMPANY hereby agrees to pay to EMPLOYEE
for all services to be rendered by EMPLOYEE in any capacity
hereunder (including, but not limited to, services as an officer of
the COMPANY and/or of any Affiliate, and with respect to any other
offices, positions and/or capacities to which he is elected, or
which are assigned to him by the President of the COMPANY and/or by
the President of any Affiliate) an annual base salary ("Base
Salary") of One Hundred Seventeen Thousand Four Hundred Twenty
Dollars ($117,420.00), which shall be paid in accordance with the
COMPANY's normal payroll schedule, as maybe increased from time to
time by the President.
B. Withholding. There shall be deducted from each
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installment of EMPLOYEE's Salary, and from any other payments to or for the
benefit of EMPLOYEE pursuant to this Agreement, all amounts which are at any
time and from time to time by applicable laws, (federal, state, county or
municipal) required to be deducted by reason of withholding taxes, Social
Security contributions and other requisite governmental imposed deductions from
the income of employees.
4. EMPLOYEE BENEFITS
During the Term of this Agreement, the COMPANY shall provide
EMPLOYEE with the following benefits, which may be adjusted from time to time:
A. Insurance Plans. The COMPANY shall provide EMPLOYEE with
benefits, including major medical health insurance for EMPLOYEE and his
immediate family, group life and accident insurance, disability income
insurance, or similar group insurance plans which the Company may from time to
time make available to other employees, all in accordance with the COMPANY's
Employee Handbook as then in effect. All matters of eligibility for benefits
under any plan or plans of group health, life, accident, disability, medical
expense or similar group insurance plans which the COMPANY may at any time and
from time to time make available shall be determined in accordance with the
provisions of the insurance policies.
B. Vacation and Sick Leave. EMPLOYEE shall be
entitled to paid vacation and paid sick leave in the manner
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provided for in the COMPANY's Employee Handbook as then in effect. Upon
termination of EMPLOYEE'S employment hereunder, Company shall pay EMPLOYEE for
all unused vacation days at the then prevailing salary rate.
C. Profit-Sharing and Pension Plans. To the same extent and on
the same basis as the COMPANY makes available to all other employees, EMPLOYEE
shall have the right to participate in any profit-sharing or pension plan
established by COMPANY under the terms and conditions therein contained in such
plans and as many be governed by rules established under ERISA.
D. Deferred Compensation Plan. To the same extent and on the
same basis as the COMPANY makes available to all other employees holding
comparable management positions to that of the EMPLOYEE, EMPLOYEE shall have the
right to participate in any deferred compensation plan established by COMPANY
under the terms and conditions therein contained.
5. PROPRIETARY DATA.
A. Trade Secrets and Other Confidential Information. During
the term of this Agreement and for three (3) years thereafter, EMPLOYEE shall
keep confidential any data, documents, or financial or other information of a
trade secret or confidential nature relating to the COMPANY's past, present or
future operations (the "Proprietary Data"), shall not disclose the Proprietary
Data to any third parties other than officers, employees or agents of the
COMPANY on a "need to know" basis, shall take all necessary steps to ensure that
such officers,
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employees or agents keep such Proprietary Data confidential, and shall use the
Proprietary Data only in connection with rendering services to the COMPANY. Upon
the end EMPLOYEE's employment with the COMPANY, EMPLOYEE shall promptly return
to the COMPANY the originals and all copies of the Proprietary Data in the
possession of EMPLOYEE, and shall not use any of the Proprietary Data for his
own benefit or for the benefit of any third parties. The covenants contained in
this Section 5(a) shall not apply to Proprietary Data which is or becomes a
matter of general knowledge in the industry otherwise than by a breach of the
provisions of this Section 5(a).
B. Injunctive Relief. EMPLOYEE acknowledges that the covenants
contained in Sections 5(a) are necessary for the protection of the legitimate
business interests of the COMPANY and are reasonable limitations of activities,
that the rights of the COMPANY are of a specialized and unique character, and
that immediate and irreparable damage will result to the COMPANY if EMPLOYEE
fails to or refuses to perform or comply with such covenants. Therefore,
notwithstanding any election by the COMPANY to claim damages from EMPLOYEE as a
result of any such failure or refusal, the COMPANY may, in addition to any other
remedies and damages available, seek an injunction in a court of competent
jurisdiction to restrain any such failure or refusal (and no bond or other
security shall be required in connection therewith) as applicable to companies
that compete with the COMPANY or any of its subsidiaries and which operate
within the same geographic area as the COMPANY or any of its subsidiaries.
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6. TERMINATION
A. Death. The term of this Agreement shall forthwith
terminate upon the death of EMPLOYEE, whereupon the COMPANY shall
not have any further obligations or liability hereunder except to
pay the EMPLOYEE's estate the unpaid portion, if any, of
EMPLOYEE's compensation accrued for the period up to the date of
EMPLOYEE's death, plus any other employee benefits due the
EMPLOYEE under Section 4 of this Agreement, in such manner as may
be prescribed in the applicable plan.
B. Total Disability. In the event of the Total Disability (as
that term is hereafter defined) of EMPLOYEE for a period of four (4) consecutive
calendar months, or for eighty percent (80%) or more of the normal working days
during a period of six (6) consecutive full calendar months, the COMPANY shall
have the right to end the term of this Agreement by giving EMPLOYEE ten (10)
days' written notice. Upon the expiration of such ten (10) days period, the term
of this Agreement shall end and the COMPANY shall not have any further
obligations hereunder except to pay EMPLOYEE the unpaid portion, if any, of
EMPLOYEE's compensation accrued for the period up to the date of termination of
EMPLOYEE's employment, plus any other employee benefits due the EMPLOYEE under
Section 4 of this Agreement, in such manner as may be prescribed in the
applicable plan. As used in this Agreement, the term "Total Disability" shall
mean a mental or
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physical condition which, in the opinion of the COMPANY and in the opinion of
two consulting physicians, renders EMPLOYEE unable or incompetent to carry out
his obligations hereunder.
C. With Cause. The COMPANY shall have the right to terminate
the employment of EMPLOYEE at any time for cause (as hereinafter defined) upon
at least five (5) days' written notice setting forth the specific details of the
action or inaction of EMPLOYEE which constitutes cause. For purposes of the
foregoing, "cause" shall mean (i) conviction of a felony or other crime
involving moral turpitude or pursuant to which EMPLOYEE is imprisoned, (ii) the
use of narcotics or alcohol by EMPLOYEE to an extent which materially interferes
with his performance of his duties under this Agreement, (iii) dishonesty of
EMPLOYEE in a material matter, (iv) repeated failure by EMPLOYEE to devote
proper time and attention to the business of the COMPANY and/or of an Affiliate
employing EMPLOYEE in accordance with this Agreement, (v) failure by EMPLOYEE to
carry out the directions, policies, instructions and/or decisions of the
President of the COMPANY, (vi) repeated and unexcused absenteeism by EMPLOYEE,
or (vii) the material breach by EMPLOYEE of any of his obligations or agreements
contained herein. Upon such termination, the COMPANY shall have no further
obligations or liability hereunder except to pay EMPLOYEE the unpaid portion, if
any, of EMPLOYEE's compensation accrued for the period up to the date of
termination of EMPLOYEE's employment, plus any other employee benefits due the
EMPLOYEE under Section 4 of this Agreement, in such manner as
may be prescribed in the applicable plan.
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D. Without Cause. If the COMPANY at any time during the term
of this Agreement desires to terminate EMPLOYEE for any reason other than for
cause, the COMPANY shall have the right to terminate the employment of EMPLOYEE
at anytime. If the COMPANY shall terminate the employment of EMPLOYEE pursuant
to this Section 6D, the term of this Agreement shall end and the COMPANY shall
not have any further obligations or liability hereunder except to pay EMPLOYEE
the unpaid portion, if any, of EMPLOYEE's compensation accrued for the period up
to the date of termination of EMPLOYEE's employment, plus any other employee
benefits due the EMPLOYEE under Section 4 of this Agreement, in such manner as
may be prescribed in the applicable plan, together with an additional amount of
one year's Base Salary, said payment is to be payable in accordance with the
COMPANY's normal payroll schedule and is to commence immediately following the
effective date of the termination of EMPLOYEE's employment hereunder.
E. By EMPLOYEE. If EMPLOYEE at any time is for any reason
dissatisfied with the terms and conditions of his employment hereunder, EMPLOYEE
shall have the right to terminate his employment upon no less than sixty days'
notice to the COMPANY; provided, however, the term of this Agreement shall
terminate upon the date set by EMPLOYER which shall in no event be greater than
sixty days' from the giving of EMPLOYEE's notice. If EMPLOYEE shall terminate
his employment pursuant to this Section 6E, the term of this Agreement shall end
at the
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expiration of the notice period and the COMPANY shall have no further
obligations or liability hereunder except to pay to EMPLOYEE the unpaid portion,
if any, of EMPLOYEE's compensation accrued for the period up to the date of
termination, plus any other employee benefits due the EMPLOYEE under Section 4
of this Agreement, in such manner as may be prescribed in the applicable plan.
F. After the Expiration of the Term. In the event that,
following the expiration of the term of this Agreement, EMPLOYEE shall be
terminated by the COMPANY prior to his 65th birthday and the termination shall
be for other than "cause" , the COMPANY shall pay EMPLOYEE as a severance
allowance an amount equal to one year's annual compensation, plus any other
employee benefits due the EMPLOYEE under Section 4 of this Agreement, in such
manner as may be prescribed in the applicable plan. The EMPLOYEE's annual
compensation shall be the total of his base salary at the rate paid for the
month prior to such termination of employment.
7. ARBITRATION.
Any controversy or claim arising out of or in any way relating
to this Agreement, the performance of the parties thereunder, the termination
thereof, or the breach thereof, shall be settled by arbitration in Xxxxxx
County, Maryland, in accordance with the Commercial Arbitration Rules of the
American
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Arbitration Association, and judgment upon the award rendered by the arbitrator
may be entered in any court of the State of Maryland having jurisdiction
thereof. The parties agree that any controversy or claim subject to arbitration
will be submitted to single arbitrator selected from the panels of Arbitrators
of the American Arbitration Rules unless some other method is agreed to by the
parties to this Agreement. Additionally, the discovery provisions of the Federal
Rules of Civil Procedure then in effect shall apply in any such arbitration and
the arbitrator is hereby directed to enforce such Rules. The losing party in any
such arbitration shall pay the prevailing party's legal fees and costs as well
as the costs of the arbitration. The foregoing agreement to arbitrate shall be
specifically enforceable.
8. NON-ASSIGNABILITY BY EMPLOYEE
EMPLOYEE shall have no right to assign this Agreement or any
of his rights or obligations hereunder to another party or parties.
9. ASSIGNABILITY BY THE COMPANY
the COMPANY shall have the right to assign this
Agreement or any of its rights or obligations hereunder, provided that such
assignment shall not alter the financial arrangements or basic duties of
EMPLOYEE as provided in this Agreement.
10. APPLICABLE LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland applicable to
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contracts made and to be performed therein, without giving effect to the
principles of conflicts of law.
11. NON-WAIVER OF BREACH
No failure of either party to exercise any power, right or
remedy given such party hereunder, or to insist upon the strict compliance by
the other party of any obligation, covenant, term, condition, warranty or
agreement hereunder, and no custom or practice at variance with the terms
hereof, shall constitute a waiver of such party's rights to demand exact
compliance with the terms hereof.
12. NUMBER AND GENDER
Where text required, words in the singular shall be deemed to
include the plural and vice-versa, and words of any gender shall be deemed to
include all genders.
13. HEADINGS NOT PART OF AGREEMENT
Any headings preceding the text of the several Sections and
subparagraphs of this Agreement are inserted solely for convenience of reference
and shall not constitute a part of this Agreement nor shall they affect its
meaning, construction or effect.
14. NOTICES
No notice, request, consent, approval, waiver or other
communication which may be or is required or permitted to be given under this
Agreement shall be effective unless the same is in writing and is delivered in
person, or sent by registered or certified mail, return receipt requested,
first-class postage
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prepaid, (1) if to the COMPANY to the first grammatical paragraph of this
Agreement, Attention: President, with a copy to Xxxxxx X. Xxxxxxxx, Esquire, 000
Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxx 00000, and (2) if to
EMPLOYEE to the address set forth in the first grammatical paragraph of this
Agreement, or (effective upon receipt) at any other address that may be given by
one party to the other by notice pursuant to this Paragraph 14. Such notices, if
sent by registered or certified mail, return receipt requested, first-class
postage prepaid, shall be deemed to have been given at the time of mailing.
15. ENTIRE AGREEMENT
This Agreement contains all of the agreements and
understandings between the parties hereto with respect to the employment of
EMPLOYEE by the COMPANY, and no oral agreements or written correspondence shall
be held to affect the provisions hereof.
16. PARTIAL INVALIDITY
Should any part of this Agreement for any reason be declared
or held invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity and enforceability of any remaining portion, which remaining
portion shall remain in force and effect as of this Agreement had been executed
with the invalid or unenforceable portion thereof eliminated.
17. AMENDMENTS
Neither this Agreement nor any provision hereof may be
amended, modified, changed, waived, discharged or terminated
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orally, but only by an instrument in writing signed by the party against which
enforcement of the amendment, modification, change, waiver, discharge or
termination is sought.
18. BURDEN AND BENEFIT
This Agreement is binding upon, and inures to the benefit of,
the parties hereto and their respective spouses, heirs, executors,
administrators, personal and legal representatives, successors and assigns.
19. COUNTERPARTS
This Agreement may be executed in one or more counterparts
and, in such event, all such counterparts shall constitute originals and all
such counterparts shall constitute a single agreement.
20. NO INFERENCE AGAINST AUTHOR
No provision of this Agreement shall be interpreted against
any party because such party or its legal representative drafted such provision.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year hereinabove first written.
COMPANY:
THE COSMETIC CENTER, INC.
/s/Ben Kolvalsky (SEAL)
Xxx Xxxxxxxx,
President
WITNESS: EMPLOYEE:
/s/Xxxxxxx X. Xxxxx /s/Xxxxx X. Xxxxxx (SEAL)
Xxxxx X. Xxxxxx
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