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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made this ____ day of
September, 1996, by and between LEOPOLD STYLING PRODUCTS, INC., a Delaware
corporation (hereinafter called "Employer") and XXX X. XXXXXXX (hereinafter
called ("Employee").
W I T N E S S E T H:
A. Employee currently serves as Chief Executive Officer and Chairman of
the Board of Directors of Employer.
B. Employer is in the process of preparing for an initial public
offering of its Common Stock (the "Offering").
C. Employer and Employee desire to enter into an employment agreement
pursuant to which Employer shall employ Employee on the terms and conditions set
forth in this Agreement effective on the consummation of the Offering (the
"Effective Date").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth in this Agreement, the parties hereto agree as follows:
1. EMPLOYMENT. On the Effective Date, Employer shall employ Employee,
and Employee shall accept such employment, as Chief Executive Officer and
Chairman of the Board of Employer and in such other capacities and for such
other duties and services as shall from time to time be mutually agreed upon by
Employer and Employee.
2. FULL TIME OCCUPATION. Commencing on the Effective Date, Employee
shall devote no less than 90% of Employee's business time, attention and efforts
to the performance of Employee's duties under this Agreement, and shall serve
Employer faithfully and diligently.
3. COMPENSATION AND OTHER BENEFITS.
(a) SALARY. Commencing on the Effective Date, Employer shall
pay to Employee, as full compensation for the services rendered by Employee,
during Employee's employment under this Agreement, a salary at a rate of
$150,000 for the first year, $200,000 for the second year and $250,000 per annum
for the remaining term of this Agreement, to be paid in equal monthly
installments, or in such other periodic installments upon which Employer and
Employee shall mutually agree.
(b) ANNUAL BONUS. Employee shall be eligible to participate in
a bonus pool established and administered in the sole discretion of the Board of
Directors of Employer or by a committee appointed by the Board of Directors for
the payment of annual bonuses to senior officers ("Bonus Pool"). Employer will
have the right but not the obligation to establish a Bonus Pool. Employee will
be eligible to receive an annual bonus to be determined by the Board of
Directors in its discretion.
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(c) INSURANCE AND OTHER BENEFITS. Employee shall be entitled to
participate in or receive benefits under all employee and executive benefit
plans or arrangements and prerequisites of employment, including without
limitation, plans or arrangements providing for health and disability insurance
coverage, life insurance for the benefit of Employee's beneficiaries, deferred
compensation and pension benefits, all at the highest level that is available
through Employer to other senior officers of Employer subject to the same terms
and conditions as apply to such other senior officers.
4. TERM OF EMPLOYMENT.
(a) EMPLOYMENT TERM. The term of Employee's employment under
this Agreement shall commence on the Effective Date and shall continue for five
years thereafter and from year to year thereafter, unless and until terminated
by either party giving written notice to the other not less than 60 days prior
to the end of the then current term.
(b) TERMINATION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding
anything to the contrary herein contained:
(i) Employee's employment shall be automatically
terminated, without notice, effective upon the date of Employee's death;
(ii) If Employee shall fail, for a period of more than
90 consecutive days, to perform any of Employee's duties under this Agreement as
the result of illness or other incapacity, Employer may, at its option, upon
notice to Employee, terminate Employee's employment effective on the date of
that notice; and
(iii) If Employee shall breach or violate any of the
provisions of this Agreement, or fail to perform in a manner reasonably
satisfactory to Employer any of the duties required of Employee and such breach,
violation or failure shall continue for a period of 45 days after Employer shall
have given Employee written notice specifying the nature thereof in reasonable
detail, Employer may, at its option, upon notice to Employee, terminate
Employee's employment effective on the date of that notice.
5. COMPETITION AND CONFIDENTIAL INFORMATION.
(a) INTERESTS TO BE PROTECTED. The parties acknowledge that
during the term of Employee's employment with Employer, Employee will perform
essential services for Employer. Employee will be exposed to, have access to,
and be required to work with, a considerable amount of Confidential Information
(as defined below). The parties also expressly recognize and acknowledge that
the personnel of Employer have been trained by, and are valuable to, Employer
and that if Employer must hire new personnel or retrain existing personnel to
fill vacancies, it will incur substantial expense in recruiting and training
such personnel. The parties expressly recognize that should Employee compete
with Employer in any manner whatsoever, it could seriously impair the good will
and diminish the value of Employer's business. The parties acknowledge that this
covenant has an extended duration; however, they agree that this covenant is
reasonable and it is necessary for the protection of Employer, its stockholders
and employees. For these and other reasons, and the fact that there are many
other employment opportunities available to Employee if he should terminate his
employment, the parties are in full and complete agreement that the following
restrictive covenants are fair and reasonable and are
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freely, voluntarily and knowingly entered into. Furthermore, each party was
given the opportunity to consult with independent legal counsel before entering
into this Agreement.
(b) NON-COMPETITION. During the term of Employee's employment
with Employer and for the period ending 12 months after the termination of
Employee's employment with Employer, regardless of the reason therefor, Employee
shall not (whether directly or indirectly, as owner, principal, agent,
stockholder, director, officer, manager, employee, partner, participant, or in
any other capacity) engage or become financially interested in any competitive
business conducted within the Restricted Territory or solicit, canvas or accept,
or authorize any other person, firm or entity to solicit, canvas or accept, from
any customers of Employer, any business within the Restricted Territory for
Employee or for any other person, firm or entity. As used herein, customers of
Employer shall mean any persons, firms or entities that purchased goods or
services from Employer during the period of Employee' s employment with
Employer; competitive business shall mean any business which sells or provides
or attempts to sell or provide products or services the same as or substantially
similar to the products or services sold or provided by Employer; and the
Restricted Territory shall mean any area in which Employer conducts business.
(c) NON-SOLICITATION OF EMPLOYEES. During the term of
Employee's employment and for a period of 12 months after the termination of
Employee's employment with Employee, regardless of the reason therefor, Employee
shall not directly or indirectly, for himself, or on behalf of, or in
conjunction with, any other person(s), company, partnership, corporation, or
governmental entity, seek to hire, and/or hire any of Employer's personnel or
employees for the purpose of having such employee engage in services that are
the same, similar or related to the services that such employee provided for
Employer.
(d) CONFIDENTIAL INFORMATION. Employee shall maintain in strict
secrecy all confidential or trade secret information relating to the business of
Employer (the "Confidential Information") obtained by Employee in the course of
Employee's employment, and Employee shall not, unless first authorized in
writing by Employer, disclose to, or use for Employee's benefit or for the
benefit of any person, firm or entity at any time either during or subsequent to
the term of Employee's employment, any Confidential Information, except as
required in the performance of Employee's duties on behalf of Employer. For
purposes hereof, Confidential Information shall include without limitation any
trade secrets, knowledge or information with respect to processes, inventions,
formulae, machinery, manufacturing techniques or know-how; any business methods
or forms; any names or addresses of customers or data on customers or suppliers;
and any business policies or other information relating to or dealing with the
purchasing, sales or distribution policies or practices of Employer.
(e) RETURN OF BOOKS AND PAPERS. Upon the termination of
Employee's employment with Employer for any reason, Employee shall deliver
promptly to Employer all catalogues, manuals, memoranda, drawings, and
specifications; all cost, pricing and other financial data; all customer
information; all other written or printed materials which are the property of
Employer (and any copies of them); and all other materials which may contain
Confidential Information relating to the business of Employer, which Employee
may then have in Employee's possession whether prepared by Employee or not.
(f) DISCLOSURE OF INFORMATION. Employee shall disclose
promptly to Employer, or its nominee, any and all ideas, designs, processes and
improvements of any kind relating to the business
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of Employer, whether patentable or not, conceived or made by Employee, either
alone or jointly with others, during working hours or otherwise, during the
entire period of Employee's employment with Employer, or within six months
thereafter.
(g) ASSIGNMENT. Employee hereby assigns to Employer or its
nominee, the entire right, title and interest in and to all discoveries and
improvements, whether patentable or not, which Employee may conceive or make
during Employee's employment with Employer, or within six months thereafter, and
which relate to the business of Employer.
(h) EQUITABLE RELIEF. In the event a violation of any of the
restrictions contained in this paragraph is established, Employer shall be
entitled to preliminary and permanent injunctive relief as well as damages and
an equitable accounting of all earnings, profits and other benefits arising from
such violation, which right shall be cumulative and in addition to any other
rights or remedies to which Employer may be entitled. In the event of a
violation of any provision of subparagraph (a), (d) or (e) of this paragraph,
the period for which those provisions would remain in effect shall be extended
for a period of time equal to that period beginning when such violation
commenced and ending when the activities constituting such violation shall have
been finally terminated in good faith.
(i) RESTRICTIONS SEPARABLE. Each and every restriction set
forth in this paragraph is independent and severable from the others, and no
such restriction shall be rendered unenforceable by virtue of the fact that, for
any reason, any other or others of them may be unenforceable in whole or in
part.
6. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received when delivered
against receipt or when deposited in the United States mails, first class
postage prepaid, addressed as set forth below:
(i) If to Employer:
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Attention:
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with a copy to:
X'Xxxxxx, Cavanagh, Anderson,
Xxxxxxxxxxxxx & Xxxxxxxx, P.A.
Xxx Xxxx Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
(ii) If to Employee:
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Attention:
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with a copy to:
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Attention:
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Either party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(b) INDULGENCES. Neither any failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
(c) CONTROLLING LAW. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement, shall be governed
by and construed in accordance with the laws of the State of Arizona,
notwithstanding any Arizona or other conflict-of-interest provisions to the
contrary.
(d) BINDING NATURE OF AGREEMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns except that no party may
assign or transfer such party's rights or obligations under this Agreement
without the prior written consent of the other party.
(e) EXECUTION IN COUNTERPART. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.
(f) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
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(g) ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements and conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(h) PARAGRAPH HEADINGS. The paragraph headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
(i) GENDER. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.
(j) NUMBER OF DAYS. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday, then the final day shall be
deemed to be the next day which is not a Saturday, Sunday or holiday.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EMPLOYER:
LEOPOLD STYLING PRODUCTS, INC.
By:
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Name:
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Its:
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EMPLOYEE:
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Xxx X. Xxxxxxx
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