EXHIBIT 10(M)
AMENDMENT
THIS AMENDMENT ("Amendment") is entered into as of October 15, 1996 between
The Cosmetic Center, Inc., formerly known as Cosmetic & Fragrance Concepts,
Inc., ("EMPLOYER" or "COMPANY") and Xxx X. Xxxxxxxx ("EMPLOYEE" or "XXXXXXXX").
RECITALS:
R-1. The parties entered into an Employment Agreement dated February 28,
1991 ("Employment Agreement").
R-2. On October 1, 1996 the COMPANY entered into a letter of intent with
Revlon Consumer Products Corporation ("Revlon") to merge its wholly owned
subsidiary, Prestige Fragrance & Cosmetic, Inc. ("PFC") into the COMPANY. After
the merger the COMPANY will consist of two groups -- The Cosmetic Center Group
and the PFC Group.
R-3. In order to ensure a smooth transition after the merger, Revlon has
requested that the COMPANY ensure XXXXXXXX'X continued employment for at least
six (6) months after the merger.
R-4. In consideration of the COMPANY amending the Employment Agreement as
provided for herein XXXXXXXX has agreed to continue his employment for at least
six (6) months after the merger.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
is hereby reciprocally acknowledged, the parties agree as follows:
1. EFFECTIVE DATE. The "Effective Date" of this Amendment shall be the date
PFC is merged into the COMPANY.
2. CONTINUATION OF EMPLOYMENT. Notwithstanding anything in the Employment
Agreement to the contrary, including without limitation, Sections 1, 2 and 10 C,
as of the Effective Date XXXXXXXX agrees to assume the newly created position of
President and Chief Operating Officer of The Cosmetic Center Group, in lieu of
his present position as President, Chief Executive and Chief Operating Officer
of the COMPANY, and to continue in such position for a period of at least six
(6) months from the Effective Date of this Amendment ("Minimum Employment
Period").
3. COMPENSATION OF EMPLOYEE. As of the Effective Date, Paragraphs 3 A and B
of the Employment Agreement shall no longer be applicable and the following
shall apply in lieu thereof:
"EMPLOYER hereby agrees to pay to EMPLOYEE for all services to be rendered
by EMPLOYEE in his capacity as President and Chief Operation Officer of The
Cosmetic Center Group of EMPLOYER an annual base salary ("Base Salary") of Two
Hundred Twenty Five Thousand Dollars ($225,000.00). In addition, Employee shall
be paid an annual amount of One Hundred Thousand Dollars ($100,000.00), which
amount shall be paid, less all amounts required by law to be withheld, in the
same number of installments and at the same time, as the Base Salary in
consideration for the non-competition covenant contained in the Employment
Agreement ("the Non-Competition Payments").
4. TERMINATION PAYMENT. Upon the Effective Date, Section 10 of the
Employment Agreement shall be deemed deleted, and in lieu thereof, the following
shall apply:
A. CANCELLATION OR TERMINATION. In the event EMPLOYER cancels and
terminates this Employment Agreement and discharges EMPLOYEE prior to the
expiration of the term of this Employment Agreement as specified in Section
2 of this Amendment for any reason other than for Good Cause or EMPLOYEE
terminates his employment with EMPLOYER at any time after the end of the
Minimum Employment Period, then EMPLOYER shall pay to EMPLOYEE a lump-sum
payment equal to the remainder of his Base Salary and Non-Competition
Payments that would be due through the end of the Term (without giving
effect to EMPLOYEE'S termination), which payment shall be made to EMPLOYEE
within thirty (30) days of the date of such termination. For illustrative
purposes only, if the Effective Date occurs on January 31, 1997 and
EMPLOYEE either terminates or is terminated from his employment with
EMPLOYER on September 30, 1997, EMPLOYEE shall be entitled to a lump-sum
payment equal to twenty nine (29) months of remaining Base Salary and
Non-Competition Payments (i.e. $785,416.65). EMPLOYEE shall not be
obligated to mitigate EMPLOYEE'S damages in the event of termination by
EMPLOYER. EMPLOYER agrees that this provision with respect to a termination
by EMPLOYER represents liquidated damages and not a penalty, and that it
represents a reasonable forecast of EMPLOYEE's anticipated and actual
economic damages as well as including reasonable compensation of
$100,000.00 per year to EMPLOYEE in consideration for the Non-Compete
provision contained in the Employment Agreement. EMPLOYER agrees that this
provision with respect to a termination by EMPLOYEE after the Minimum
Employment Period represents reasonable severance in light of EMPLOYEE'S
prior service to
EMPLOYER as well as including reasonable compensation of $100,000.00 per
year to EMPLOYEE in consideration for the Non-Compete provision contained
in the Employment Agreement. In the event EMPLOYER cancels and terminates
this Agreement and discharges EMPLOYEE prior to the expiration of the term
of this Agreement as specified in Section 2 for Good Cause or EMPLOYEE
terminates his employment with EMPLOYER at any time prior to the end of the
Minimum Employment Period, EMPLOYER shall have no obligation to make any
payment or provide any benefits hereunder for any period subsequent to the
date of such termination or resignation, except as required by law.
B. FAILURE TO PAY SALARY WHEN DUE. In the event EMPLOYER fails to pay
any regular Base Salary and Non-Competition Payments when due as specified
in Section 3 hereof, or to pay accelerated amount due if such Base Salary
and Non-Competition Payments are accelerated as specified in Section 10A,
IN ADDITION TO SUCH AMOUNT WHICH IS DUE TO EMPLOYEE, EMPLOYEE SHALL BE
ENTITLED TO RECEIVE INTEREST ON THE UNPAID BALANCE THEREOF AT THE RATE OF
15% PER ANNUM.
C. SURVIVAL OF REMEDIES. This Section 10 shall survive any termination
of this Agreement other than for Good Cause.
5. AUTOMOBILE. Upon expiration of the Employment Agreement, termination by
EMPLOYEE after the end of the Minimum Employment Period, or termination by
EMPLOYER at any time during the Term other than for Good Cause, the COMPANY
shall transfer to XXXXXXXX title to the COMPANY'S 1993 Lexus 400 which is
presently being used by XXXXXXXX.
6. CONTINUATION OF BENEFITS. For a period of one year following expiration
of the Employment Agreement, termination by EMPLOYEE after the end of the
Minimum Employment Period, or termination by EMPLOYER at any time during the
Term other than for Good Cause, the COMPANY shall continue to provide and/or pay
the Medical Reimbursement and Insurance Reimbursement in accordance with
Paragraphs 5 and 6 of the Employment Agreement to the same extent as if XXXXXXXX
remained employed by the COMPANY. Upon expiration of the Employment Agreement,
termination by EMPLOYEE after the end of the Minimum Employment Period, or
termination by EMPLOYER at any time during the Term other than for Good Cause,
the COMPANY shall pay KOVALKSY the sum of $8,100.00 in consideration for the
Group Insurance Benefits being lost by XXXXXXXX as a result of such termination.
7. STOCK OPTIONS. Upon the Effective Date, Paragraph 12 of the Employment
Agreement shall be deemed deleted, and in lieu thereof, the following shall
apply:
"Upon expiration of the Employment Agreement, termination by EMPLOYEE after
the end of the Minimum Employment Period, termination by EMPLOYER at any time
during the Term other than for Good Cause or EMPLOYEE'S death, EMPLOYER shall
offer to repurchase all unexpired options (whether vested or not) to purchase
securities of the EMPLOYER ("Options") from EMPLOYEE or his estate or other
successor-in-interest, as the case may be. The price to be paid for each such
option shall be the excess, if any, of (A) the greater of (i) the then Market
Price (as defined below) of EMPLOYER's common stock (or other securities for
which the option is then exercisable) on the date of termination or (ii) $7.63
over (B) the option exercise price. EMPLOYEE (or his estate or other
successor-in-interest) shall have the right to sell all or a portion of such
Options to EMPLOYER. EMPLOYER shall purchase and pay for all such Options within
sixty (60) days of the date of EMPLOYEE's termination.
For the purpose of this Agreement, "Market Price" shall mean the closing
sale price on the date in question of a share of such stock on the composite
tape for the principal United States securities exchange registered under the
Securities Exchange Act of 1934 (the "Exchange Act") on which such stock is
listed, or, if such stock is not listed on any such exchange, the closing sale
price or bid quotation with respect to a share of such stock on the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations are
available, or if shares of such stock are not traded on any United States
registered securities exchange or in the over-the-counter market, the fair
market value on the date in question of a share of such stock as determined by
an investment banker selected by a majority of the members of the board of
Directors of EMPLOYER in good faith."
8. DEFERRED COMPENSATION. Upon expiration of the Employment Agreement or
termination, EMPLOYER shall pay to EMPLOYEE, the deferred compensation liability
established by EMPLOYER for EMPLOYEE in accordance with generally accepted
accounting principles less all amounts required by law to be withheld. In
addition, within thirty (30) days of any termination referred to in the
preceding sentence, EMPLOYEE shall have the right to purchase EMPLOYER'S
interest in the Guardian Life Insurance Policy on EMPLOYEE and his wife by
paying to EMPLOYER the amount of premiums paid to date of such policy on the
date of EMPLOYEE'S termination.
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9. CONFIRMATION OF TERMS. All of the terms, covenants and conditions of the
Employment Agreement, except as are herein specifically modified and amended,
shall remain in full force and effect and are hereby adopted and reaffirmed by
the parties hereto. In the event of any conflict between the terms of this
Amendment and the Employment Agreement, the terms of this Amendment shall
control.
IN WITNESS WHEREOF, the COMPANY has caused this Amendment to be executed
and sealed on its behalf by its duly authorized officers, and XXXXXXXX has
hereunto set his hand and seal, all done as of the day and year hereinabove
first written.
EMPLOYER:
ATTEST: THE COSMETIC CENTER, INC.
(SEAL)
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Xxxx Xxxxxxxxx
Chairman
WITNESS: EMPLOYEE:
(SEAL)
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Xxx X. Xxxxxxxx
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