EXHIBIT 10.24
SEPARATION AGREEMENT
DATED AS OF JANUARY 16, 1998
BETWEEN
STYLING TECHNOLOGY CORPORATION
AND
XXXXXX X. XXXXXXXX
SEPARATION AGREEMENT
SEPARATION AGREEMENT effective as of the 16th day of January 1998 by
and between STYLING TECHNOLOGY CORPORATION, a Delaware corporation ("Company"),
and XXXXXX X. XXXXXXXX ("Xxxxxxxx").
Xxxxxxxx currently serves as President of Company pursuant to the terms
of an Employment Agreement dated September 19, 1996 (the "Employment
Agreement"). In addition, Xxxxxxxx serves as a director of Company. Company and
Xxxxxxxx also are parties to a Stock Option Agreement dated June 29, 1995 (the
"Stock Option Agreement").
Xxxxxxxx and Company have determined to terminate their relationship
and the terms of the Employment Agreement and to modify the Stock Option
Agreement on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth in this Agreement, the parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT. Effective as of the date of
this Agreement, the Employment Agreement is cancelled and terminated in its
entirety, except for (a) the provisions of Section 5(d) relating to Confidential
Information, and (b) the provisions of Section 5(e) relating to the Return of
Books and Papers, each of which Company and Xxxxxxxx agree shall remain in full
force and effect.
2. RESIGNATION AS OFFICER, DIRECTOR, AND EMPLOYEE. Xxxxxxxx hereby
resigns as an officer, director, and employee of Company and each affiliate of
Company, and Company hereby accepts such resignation on behalf of itself and its
affiliates, such resignation and acceptance to be effective as of the date of
this Agreement. Until June 30, 1998, Xxxxxxxx shall remain a consultant of
Company and his responsibilities shall be limited to specific transactional
activities of an executive nature reasonably requested by Company from time to
time related primarily to potential acquisitions. Xxxxxxxx xxx, at his option,
provide such consulting services from his house. Xxxxxxxx will report to and
receive instructions from the Chief Executive Officer and Chief Financial
Officer of Company.
3. PAYMENT AMOUNTS. Between the date of this Agreement and June 30,
1998, so long as Xxxxxxxx does not accept employment from another company,
Company shall pay to Xxxxxxxx an amount equal to $75,000 payable in accordance
with the following schedule: (a) $5,000 on January 31, 1998, (b) $10,000 on
February 28, 1998, (c) $10,000 on Xxxxx 00, 0000, (x) $10,000 on April 30, 1998,
(e) $10,000 on May 30, 1998, and (f) $30,000 on June 30, 1998. Such amount shall
be in lieu of all payments that otherwise would be payable under the Employment
Agreement. All payments of this amount shall be made after deducting all
applicable federal and state payroll, FICA, unemployment, and other taxes.
Company shall reimburse Xxxxxxxx for all reasonable travel and entertainment
expenses and other ordinary and necessary business expenses incurred by Xxxxxxxx
in connection with the business of Company and the performance of Clifford's
consulting services under paragraph 2 of this Agreement; provided, however, that
Xxxxxxxx shall not incur such expenses without prior written authorization from
Company. The term "business expenses" shall not include any item not deductible
by Company for federal income tax purposes.
4. STOCK OPTIONS. The Stock Option Agreement is hereby modified so
that it covers a total of 90,000 shares of Common Stock of Company (the "Revised
Option Shares"), with the remaining 71,571 shares originally covered by the
Stock Option Agreement being immediately cancelled. Of the Revised Option
Shares, 81,000 shares shall vest immediately and 9,000 shares shall vest on
January 16, 1999, so long as Xxxxxxxx has fulfilled his obligations under
paragraph 5 below for a period of one year from the date of this Agreement. The
form of notice to be given to Company by Xxxxxxxx upon exercise of his options
is attached as Exhibit A. With respect to the number of Revised Option Shares,
the aggregate number of shares and the price per share shall be proportionately
adjusted for any increase or decrease in the number of outstanding shares of
stock of Company resulting from a subdivision or consolidation of shares or any
other capital adjustment or the payment of a stock dividend or other increase or
decrease in the number of such shares effected without Company's receipt of
consideration therefor in money, services, or property. Company shall file a
Registration Statement with the Securities and Exchange Commission covering the
Revised Option Shares on or before February 28, 1998 and shall use its best
efforts to cause such Registration Statement to become effective as soon as
practicable and thereafter to be available for two years from the date of this
Agreement, subject only to any lock-up period reasonably requested of him by
investment bankers with respect to the Revised Option Shares in connection with
an underwritten public offering by Company. Company represents and warrants to
Xxxxxxxx that it is not currently discussing pursuing an underwritten public
offering with any investment bankers that would require Xxxxxxxx to enter into a
lock-up agreement.
5. NON-DISPARAGEMENT. Neither party hereto shall publicly disparage
the other party hereto or any of the other party's directors, officers,
employees, agents, representatives, family members, heirs, successors, or
assigns, or take any action that might reasonably be expected to cause any
adverse publicity or embarrassment to any of such persons or to otherwise injure
or impair the business, reputation or prospects of any such person; provided,
however, each party shall be free to communicate with any such person regarding
the other party (when requested to do so by such person) so long as the contents
of such discussion are truthfully accurate and constitute public knowledge
otherwise than as a result of disclosures made by the party making such
communication. Company and Xxxxxxxx agree to the form and content of the press
release attached hereto. Company also may make appropriate industry
announcements consistent with the contents of the press release attached hereto
but will furnish copies thereof to Xxxxxxxx prior to their release.
6. MUTUAL RELEASE. Except for those obligations set forth in
this Agreement, Company hereby releases Xxxxxxxx and Xxxxxxxx hereby releases
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Company from any and all actions, causes of action, suits, debts, controversies,
contracts, agreements, promises, and claims (collectively, "claims"), of every
nature, character, and description, in law or in equity, known or unknown, which
they own or hold, or have at any time heretofore owned or held, or which they
hereafter can, shall, or may own or hold against the other, and each of them,
arising out of or relating to any acts or omissions occurring on or before the
date of this Agreement, including, but not limited to, any and all claims
arising out of or in any way related to the employment of Xxxxxxxx by Company,
or the termination of said employment, or the directorship of Xxxxxxxx with
Company, or the ownership of Xxxxxxxx of any shares of or options to purchase
shares of the common stock of Company. As used in this paragraph, Company shall
include all subsidiaries, affiliates, directors, officers, attorneys, and agents
of Company, and their respective heirs, executors, administrators, successors,
and assigns, and as used in this paragraph, Xxxxxxxx shall include his heirs,
executors, administrators, attorneys, agents, successors, assigns, and each of
them. In light of the intention of Company and Xxxxxxxx that this release extend
to any and all claims of any kind, each of them expressly waives any and all
rights under California Civil Code Section 1542, to the extent it may apply,
which statute states as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor."
7. 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 (i) if personally
delivered, on the date of delivery, (ii) if mailed, three days after deposit in
the United States mail, registered or certified, return receipt requested,
postage prepaid and addressed as provided below, or (iii) if by a courier
delivery service providing overnight or "next-day" delivery, on the next
business day after deposit with such service addressed as follows:
(i) If to Company:
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Secretary
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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 Xxxxxxxx:
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxx & Davidoff Incorporated
1900 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
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; WAIVERS. 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. No waiver shall be binding
unless executed in writing by the party making the waiver.
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(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 Delaware,
notwithstanding any Delaware 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 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against each 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) 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.
(g) 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.
(h) 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.
(i) 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
STYLING TECHNOLOGY CORPORATION
By:
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Name:
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Its:
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Xxxxxx X. Xxxxxxxx
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