EXHIBIT 10.3
FORM OF EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into as of this 30th day of
April, 1998 by and among CDRJ Investments (Lux) SA, a Luxembourg company
("Parent"), its indirect wholly owned subsidiary Jafra Cosmetics International,
Inc., a Delaware corporation ("Employer"), and [Name] ("Executive").
W I T N E S S E T H :
WHEREAS, pursuant to and subject to the terms of the Acquisition
Agreement, dated as of January 26, 1997, by and among Parent, CDRJ Holding
Company, a Cayman Islands exempted company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the other
parties thereto(the "Acquisition Agreement"), Parent and certain of its
Subsidiaries (as defined below) will acquire the Jafra Business (as defined in
the Acquisition Agreement)(the "Acquisition");
WHEREAS, subject to the consummation of the Acquisition, Employer
desires to employ Executive as its Chairman and Chief Executive Officer on the
terms and conditions set forth herein;
WHEREAS, Executive desires to accept such employment on the terms and
conditions set forth herein;
WHEREAS, each of Parent, Employer and Executive agrees that Executive
will have a prominent role in the management of the business, and the
development of the goodwill, of Parent, Employer and their respective
Affiliates (as defined below) and will establish and develop relations and
contacts with the principal customers and suppliers of Parent, Employer and
their respective Affiliates in the United States, Mexico, Latin America, Europe
and the rest of the world, all of which constitute valuable goodwill of, and
could be used by Executive to compete unfairly with, Parent, Employer and their
respective Affiliates;
WHEREAS, (i) in the course of his employment with Employer, Executive
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will obtain confidential and proprietary information and trade secrets
concerning the business and operations of Parent, Employer and their respective
Affiliates in the United States, Mexico, Latin America, Europe and the rest of
the world that could be used to compete unfairly with Parent, Employer and their
respective Affiliates; (ii) the covenants and restrictions contained in Sections
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8 through 13, inclusive, are intended to protect
the legitimate interests of Parent, Employer and their respective Affiliates in
their respective goodwill, trade secrets and other confidential and proprietary
information; and (iii) Executive desires to be bound by such covenants and
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restrictions;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein and for other good and valuable
consideration, Employer, Parent and Executive hereby agree as follows:
1. Agreement to Employ; No Conflicts. Upon the terms and subject to
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the conditions of this Agreement, Employer hereby employs Executive, and
Executive hereby accepts employment by Employer. Executive represents that he
is entering into this Agreement voluntarily and that his employment hereunder
and compliance with the terms and conditions hereof will not conflict with or
result in the breach by him of any agreement to which he is a party or by which
he may be bound.
2. Term; Position and Responsibilities.
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(a) Term of Employment. Unless Executive's employment shall sooner
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terminate pursuant to Section 7, Employer shall employ Executive for a term
commencing on the date of the consummation of the Acquisition (the "Commencement
Date") and ending on the third anniversary of the Commencement Date; provided,
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however, that on each day following the first anniversary of the Commencement
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Date the period of Executive's employment pursuant to this Agreement shall be
automatically extended, upon the same terms and conditions, for an additional
day unless Employer or Executive gives 60 days prior written notice (a
"Non-Extension Notice") to the other of its or his intention not to extend such
period of Executive's employment hereunder; provided, further, that delivery of
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a Non-Extension Notice by Employer or Executive to the other shall not
constitute a termination of Executive's employment by the Person delivering such
Non-Extension Notice unless such notice specifically provides for such
termination of employment in the manner described in Section 7 below and the
specific date thereof. The period commencing on the Commencement Date and
ending on the earlier of (i) the effective date of any termination of
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Executive's employment pursuant to Section 7 and (ii) the later of (x) the third
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anniversary of the Commencement Date and (y) the second anniversary of the 60th
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day following receipt by Employer or Executive, as the case may be, of a
Non-Extension Notice
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delivered pursuant to this Section 2(a) shall be referred to herein as the
"Employment Period".
(b) Position and Responsibilities. During the Employment Period,
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Executive shall serve as Chairman and Chief Executive Officer of Employer and
have such duties and responsibilities as are customarily assigned to individuals
serving in such positions and such other duties consistent with Executive's
titles and positions as the Board of Directors of Employer (the "Board")
specifies from time to time. Executive shall devote all of his skill, knowledge
and working time to the conscientious performance of the duties and
responsibilities of such positions, except for (i) vacation time as set forth in
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Section 6(c) and absence for sickness or similar disability and (ii) to the
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extent that it does not interfere with the performance of Executive's duties
hereunder and is in compliance with Executive's covenants and obligations under
Sections 8 through 13, inclusive, (A) such reasonable time as may be devoted to
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service on boards of directors of other corporations and entities and the
fulfillment of civic responsibilities and (B) such reasonable time as may be
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necessary from time to time for personal financial matters. Parent and Employer
will each use its reasonable best efforts to cause Executive to be nominated and
elected to serve as a member of its Board of Directors during the Employment
Period.
3. Base Salary. As compensation for the services to be performed by
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Executive during the Employment Period, Employer shall pay Executive a base
salary at an annualized rate of $ [ ] payable in installments on Employer's
regular payroll dates, and, in the event that Executive's employment hereunder
terminates by reason of his death, for one month after such termination. The
Board shall review Executive's base salary annually during the period of his
employment hereunder and, in its sole discretion, may increase (but may not
decrease) such base salary from time to time based upon the performance of
Executive, the financial condition of Employer, prevailing industry salary
levels and such other factors as the Board shall consider relevant; provided
that Executive's base salary shall be automatically increased on each
anniversary of the Commencement Date during the Employment Period by an amount
equal to the average increase in the consumer price index during the immediately
preceding twelve month period, as reported from time to time in the Wall Street
Journal. (The annual base salary payable to Executive under this
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Section 3, as the same may be increased from time to time, shall hereinafter be
referred to as the "Base Salary".)
4. Incentive Compensation Arrangements.
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(a) Annual Incentive Compensation. Employer shall establish an annual
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bonus plan for its executive officers (the "Bonus Plan"). During the Employment
Period, Executive shall be entitled to participate in the Bonus Plan in
accordance with the generally applicable terms thereof as in effect from time to
time. The Bonus Plan shall provide that, for each fiscal year of Employer ending
during the Employment Period (each such year, a "Bonus Year"), (i) if Parent and
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its Subsidiaries (collectively, the "Company") achieve [ ]% of the EBITDA target
established by the Board for such Bonus Year (the "EBITDA Target"), Executive
shall be entitled to an annual incentive bonus for such Bonus Year equal to [ ]%
of his Base Salary, (ii) if the Company achieves [ ]% of the EBITDA Target for
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such Bonus Year, Executive shall be entitled to an annual incentive bonus for
such Bonus Year equal to [ ]% of his Base Salary, (iii) if the Company achieves
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more than [ ]% of the EBITDA Target for such Bonus Year but less than [ ]% of
such EBITDA Target, Executive shall be entitled to an annual incentive bonus for
such Bonus Year equal to the sum of (x) [ ]% of his Base Salary and (y) [ ]% of
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his Base Salary for each 1% that the performance of the Company for such Bonus
Year exceeds 85% of such EBITDA Target, (iv) if the Company achieves more than
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[ ]% of the EBITDA Target for such Bonus Year, Executive shall be entitled to an
annual incentive bonus for such Bonus Year equal to the sum of (x) [ ]% of his
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Base Salary and (y) $[ ] for each $[ ] of EBITDA achieved by the Company in
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excess of [ ]% of the EBITDA Target for such Bonus Year and an additional $[ ]
for each $[ ] of EBITDA achieved by the Company in excess of [ ]% of the EBITDA
Target for such Bonus Year (if any); provided that the EBITDA achieved by the
Company for purposes of the calculation under clause (y) shall be determined
after deduction for the amount payable to Executive pursuant to such clause (y),
and (v) if the EBITDA achieved by the Company for a Bonus Year is less than [ ]%
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of the EBITDA Target for such Bonus Year, Executive shall not be entitled to any
annual incentive bonus for such Bonus Year. With respect to the first Bonus
Year, Executive shall be entitled to a minimum guaranteed annual incentive bonus
under the Bonus Plan equal to [ ]% of his annualized Base Salary for such Bonus
Year. The annual incentive bonus payable to Executive under the Bonus Plan shall
be paid in cash and shall be paid no later than 30 days following receipt by the
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Board of the audited consolidated financial statements of the Company for the
applicable Bonus Year.
(b) Opportunity to Purchase Shares. On or as soon as reasonably
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practicable following the Commencement Date, Executive will be given the
opportunity to purchase up to [ ] Class A voting shares, par value $2.00
per share, of Parent (the "Shares"), for a per share purchase price equal to
$100 (the "Purchase Price"), but in no event will Parent be required to offer to
sell or to sell any Shares to Executive at any time at which making such an
offer or selling any such Shares would violate any applicable securities law.
The terms and conditions of Executive's purchase of any Shares, including the
restrictions on transfer of the Shares, the right of first refusal of Parent
with respect to such Shares, the right of Parent to repurchase all or a portion
of such Shares from Executive following any termination of Executive's
employment and the applicable repurchase price and the respective tag along and
drag along rights of Executive and Parent, shall be set forth in a separate
Management Stock Subscription Agreement, substantially in the form attached
hereto as Exhibit A, to be entered into by and between Parent and Executive.
Employer will use its reasonable best efforts to make third party financing,
guaranteed by Employer, available on customary terms to Executive for up to 75%
of the purchase price of the Shares purchased by Executive hereunder. Subject
to agreement of the lending bank and except as provided otherwise in connection
with an event of default (as defined in the applicable financing documents), the
principal amount financed shall become payable on the fifth anniversary of the
date of the origination of the loan and may be prepaid without penalty.
(c) Options. On or as soon as reasonably practicable following the
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Commencement Date, Executive shall be granted non-qualified stock options (the
"Options") to purchase two shares of the Class A voting shares of Parent for
each Share purchased by Executive in accordance with Section 4(b) above, at an
option exercise price per share equal to the Purchase Price. Subject in each
case to Executive's continued employment with Employer until the applicable
vesting date, one-half of the Options will become vested and, subject to
compliance with applicable securities laws, exercisable in three equal annual
installments on each of the first three anniversaries of the date of grant and
the remaining one half of the Options (the "Performance Options") will become
vested and, subject to compliance with applicable securities laws, exercisable
either (i) if,
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during the performance period specified in the Management Stock Option Agreement
referred to below, the Company achieves the performance objectives established
by the Board on the basis of the management case attached hereto as Exhibit B
and specified in such Management Stock Option Agreement or (ii) in the case of
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any Performance Options that do not become vested under the foregoing clause
(i), nine years from the date of grant. The terms and conditions of the Options,
including those described in this Section 4(c), and the right of Parent to
purchase vested Options from Executive under certain circumstances, will be set
forth in a separate Management Stock Option Agreement, substantially in the form
attached hereto as Exhibit C, to be entered into by and between Executive and
Parent at the time that such Options are granted.
(d) At the request of Executive, Employer shall lend to Executive from
time to time an amount sufficient to enable Executive to pay any interest on any
loan obtained by Executive to purchase the Shares and guaranteed by Employer
that is due prior to Employer's payment to Executive of the annual incentive
bonus provided for in Section 4(a) for the first Bonus Year. Any such loan
shall (i) be full recourse to Executive, (ii) shall be evidenced by a promissory
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note in form reasonably satisfactory to Employer, (iii) shall bear interest at
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the "applicable federal rate" (within the meaning of Section 1274 of the
Internal Revenue Code of 1986, as amended) and (iv) shall be due in full
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(including any accrued interest thereon) at the time Employer pays to Executive
the annual incentive bonus provided for in Section 4(a) for the first Bonus
Year, and Employer shall be entitled to apply any such annual incentive bonus to
repayment of principal and interest on any such loans.
5. Employee Benefits. During the Employment Period, Executive shall
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be entitled to participate in the profit sharing, pension, retirement, deferred
compensation, savings, life, medical, dental, disability and other welfare
benefit plans maintained by Employer for its senior executives in accordance
with the terms thereof, as the same may be amended and in effect from time to
time. The benefits referred to in this Section 5 shall be provided to Executive
on a basis that is commensurate with Executive's position and duties with
Employer hereunder.
6. Perquisites and Expenses.
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(a) General. During the Employment Period, Executive shall be
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entitled to participate in all perquisite
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programs maintained by Employer for its senior executives, on a basis that is
commensurate with Executive's position and duties with Employer hereunder, in
accordance with the terms thereof, as the same may be amended and in effect from
time to time.
(b) Business Travel, Lodging, etc. Employer shall reimburse
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Executive for reasonable travel, lodging, meal and other reasonable expenses
incurred by him in connection with his performance of services hereunder upon
submission of evidence, satisfactory to Employer, of the incurrence and purpose
of each such expense and otherwise in accordance with Employer's business travel
and expense reimbursement policy applicable to its senior executives as in
effect from time to time.
(c) Vacation. During the Employment Period, Executive shall be
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entitled to a number of weeks of paid vacation on an annualized basis, without
carryover accumulation, equal to the number of weeks of paid vacation per year
applicable to senior executives of Employer in accordance with its vacation
policy as in effect from time to time.
7. Termination of Employment.
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(a) Termination Due to Death or Disability. In the event that
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Executive's employment hereunder terminates due to his death or is terminated by
Employer due to Executive's Disability (as defined below), no termination
benefits shall be payable to or in respect of Executive except as provided in
Section 3 or Section 7(f)(ii). For purposes of this Agreement, "Disability"
shall mean a physical or mental disability that prevents or is reasonably
expected to prevent the performance by Executive of his duties hereunder for a
continuous period of six months or longer. The determination of Executive's
Disability shall (i) be made by an independent physician who is reasonably
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acceptable to Employer and Executive (or his representative), (ii) be final and
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binding on the parties hereto and (iii) be made taking into account such
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competent medical evidence as shall be presented to such independent physician
by Executive and/or Employer or by any physician or group of physicians or other
competent medical experts employed by Executive and/or Employer to advise such
independent physician.
(b) Termination by Employer for Cause. Executive may be terminated
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for Cause (as defined below) by Employer, provided that Executive shall have
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been given prior written
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notice of any proposed termination of his employment for Cause, which notice
specifies in reasonable detail the circumstances claimed to provide the basis
for such termination, and Executive shall not have made reasonable effort to
correct such circumstances, satisfactory to the Board, within 30 days of receipt
of such written notice. "Cause" shall mean (i) the willful failure of Executive
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substantially to perform his duties hereunder (other than any such failure due
to Executive's physical or mental illness), (ii) Executive's engaging in willful
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and serious misconduct that has caused or is reasonably expected to result in
material injury to Employer or any of its Affiliates, (iii) Executive's
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conviction of, or entering a plea of guilty or nolo contendere to, a crime that
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constitutes a felony or (iv) the willful and material breach by Executive of any
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of his obligations hereunder or under any other written agreement or covenant
with Employer or any of its Affiliates.
(c) Termination Without Cause. A termination "Without Cause" shall
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mean a termination of Executive's employment by Employer other than due to
Disability as described in Section 7(a) or for Cause as described in Sec tion
7(b).
(d) Termination by Executive. Executive may terminate his employment
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for any reason. A termination of employment by Executive for "Good Reason"
shall mean a ter mination by Executive of his employment with Employer
following the occurrence, without Executive's consent, of any of the following
events: (i) the assignment to Executive of duties that are significantly
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different from, and that result in a substantial diminution of, the duties that
he is to assume on the Commencement Date, (ii) the assignment to Executive of a
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title that is different from and junior to the title specified in Section 2 or
the failure of Parent and Employer to use their reasonable best efforts to cause
Executive to be elected or reelected to serve as a member of their respective
Boards of Directors or (iii) the failure of Employer to obtain the assumption of
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this Agreement by any Successor (as defined below) to Employer as contemplated
by Section 14, provided in any such case that within 30 days of Executive's
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becoming aware of the occurrence of any such event, Executive shall have
delivered written notice to Employer of his intention to terminate his
employment for Good Reason, which notice specifies in reasonable detail the
circumstances claimed to provide the basis for such termination, and Employer
shall not have made reasonable
8
effort to correct such circumstances, to the satisfaction of Executive, within
30 days of receipt of such written notice.
(e) Notice of Termination. Any termination of Executive's employment
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by Employer pursuant to Section 7(a), 7(b) or 7(c), or by Executive pursuant to
Section 7(d), shall be communicated by a written Notice of Termination addressed
to the other parties to this Agreement. A "Notice of Termination" shall mean a
notice stating that Executive's employment with Employer has been or will be
terminated and the specific provisions of this Section 7 under which such
termination is being effected.
(f) Payments Upon Certain Terminations.
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(i) In the event of a termination of Executive's employment by
Employer Without Cause or a termination by Executive of his employment for Good
Reason in either such case during the Employment Period (any such termination, a
"Qualifying Termination"), Employer shall pay to Executive (or, following his
death, to Executive's beneficiaries) his full Base Salary through the Date of
Termination and, as liquidated damages in respect of claims based on provisions
of this Agreement and provided Executive executes and delivers a general release
of all claims substantially in the form attached hereto as Exhibit D, the
following additional amounts:
(A) his Base Salary, at the rate in effect hereunder immediately prior
-
to the Qualifying Termination, which shall be payable in installments on
Employer's regular payroll dates, for the period (such period, the
"Severance Period") beginning on the Date of Termination (as defined below)
and ending on the later of (i) the third anniversary of the Commencement
-
Date and (ii) the second anniversary of the Date of Termination; plus
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(B) if the Company achieves the performance objectives established
-
under the Bonus Plan for the Bonus Year that includes the Date of
Termination, an amount, payable in one lump sum as soon as reasonably
practicable following receipt by the Board of the consolidated financial
statements of the Company for such Bonus Year, equal to the product of (1)
-
the annual incentive bonus that would have been payable to Executive for
such Bonus Year pursuant to Section 4(b) under the Bonus Plan had he
remained employed for the entire Bonus Year, multiplied by (2) a fraction,
-
the
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numerator of which is equal to the number of days in such Bonus Year
that precede the Date of Termination and the denominator of which is equal
to 365, less
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(C) the amount, if any, paid or payable to Executive under the terms
-
of any severance plan, severance policy, severance program or severance
practice of Employer or any of its Affiliates applicable to Executive, as
in effect on the Date of Termination (a "Severance Program");
provided that Employer may, at any time, pay to Executive, in a single lump sum
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and in satisfaction of Employer's obligations under clauses (A) and (B) of
this Section 7(f)(i), an amount equal to (x) the installments of the Base Salary
-
then remaining to be paid to Executive pursuant to clause (A) above, and the
amount, if any, then remaining to be paid to Executive pursuant to clause (B)
above, without discount for immediate payment, less (y) the amount, if any,
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remaining to be paid to Executive pursuant to any Severance Program identified
under clause (C) above.
In addition, in the event of a Qualifying Termination, Employer shall,
during the Severance Period, provide Executive continued coverage under the
medical and other health plans of Employer referred to in Section 5 (the
"Continued Benefits") in which Executive was a participant immediately prior to
the Date of Termination, subject to timely payment by Executive of all premiums,
contributions and other co-payments required to be paid during such period by
senior executives of Employer under the terms of such plans as in effect from
time to time.
Executive shall not have a duty to mitigate the costs to Employer
under this Section 7(f)(i), except that Continued Benefits shall be canceled to
the extent of any comparable benefit coverage offered to Executive during the
Severance Period by a subsequent employer or other Person (as defined below) for
which Executive performs services, including but not limited to consulting
services.
(ii) If Executive's employment shall terminate upon his death or due
to his Disability or if Employer shall terminate Executive's employment for
Cause or Executive shall terminate his employment without Good Reason during the
Employment Period, Employer shall pay Executive (or, in the event of his death,
his beneficiaries) his full Base Salary through the Date of Termination or as
provided in Section 3 above. In addition, in the case of any such
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termination due to Executive's death or Disability, if the Company achieves the
performance objectives established under the Bonus Plan for the Bonus Year that
includes the Date of Termination, Employer shall pay Executive (or his
beneficiaries if applicable) an amount, payable in one lump sum as soon as
reasonably practicable following receipt by the Board of the consolidated
financial statements of the Company for such Bonus Year, equal to the product of
(1) the annual incentive bonus that would have been payable to Executive for
-
such Bonus Year pursuant to Section 4(b) under the Bonus Plan had he remained
employed for the entire Bonus Year, multiplied by (2) a fraction, the numerator
-
of which is equal to the number of days in such Bonus Year that precede the Date
of Termination (exclusive of any time between the onset of a physical or mental
disability that prevents the performance by Executive of his duties hereunder
and the resulting Date of Termination) and the denominator of which is equal to
365.
(iii) Executive shall be entitled to receive all amounts payable and
benefits accrued under any otherwise applicable plan, policy, program or
practice of Employer in which Executive was a participant during his employment
with Employer in accordance with the terms thereof, provided that (x) Executive
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shall not be entitled to receive any payments or benefits under any such plan,
policy, program or practice providing any bonus or incentive compensation (and
the provisions of this Section 7(f) shall supersede the pro visions of any such
plan, policy, program or practice), and (y) the amount, if any, paid or payable
-
to Executive under the terms of any such plan, policy, program or practice
relating to severance shall reduce the amounts payable under Section 7(f)(i) as
provided in clause (C) thereof.
(g) Date of Termination. As used in this Agreement, the term "Date
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of Termination" shall mean (i) if Executive's employment is terminated by his
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death, the date of his death, (ii) if Executive's employment is terminated by
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Employer for Cause, the latest of the date on which Notice of Termination is
given as contemplated by Sec tion 7(e), the date of termination specified in
such notice and the date any applicable correction period ends, and (iii) if
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Executive's employment is terminated by Employer Without Cause, due to
Executive's Disability or by Executive for any reason, the date that is 30 days
after the date on which Notice of Termination is given as contemplated by
Section 7(e) or, if no such notice is given, 30 days after the date of
termination of employment.
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(h) Resignation upon Termination. Effective as of any Date of
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Termination under this Section 7 or otherwise as of the date of Executive's
termination of employment with Employer, Executive shall resign, in writing,
from all Board memberships and other positions then held by him with Employer
and its Affiliates.
8. Unauthorized Disclosure. During the period of Executive's
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employment with Employer and the ten-year period following any termination of
such employment, without the prior written consent of the Board or its
authorized representative, except to the extent required by an order of a court
having jurisdiction or under subpoena from an appropriate government agency,
in which event, Executive shall use his best efforts to consult with the Board
prior to responding to any such order or subpoena, and except as required in the
performance of his duties hereunder, Executive shall not disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
informa tion regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information (including but not
limited to data and other information relating to members of the Board of
Directors of Parent, Employer or any of their respective Affiliates or to
management of Parent, Employer or any of their respective Affiliates),
operating policies or manuals, business plans, financial records, packaging
design or other financial, commercial, business or technical information (a)
-
relating to Parent, Employer or any of their respective Affiliates or (b) that
-
Parent, Employer or any of their respective Affiliates may receive belonging to
suppliers, customers or others who do business with Parent, Employer or any of
their respective Affiliates (collectively, "Confidential Information") to any
third person unless such Confidential Information has been previously disclosed
to the public or is in the public domain (other than by reason of Executive's
breach of this Section 8).
9. Non-Competition. During the period of Executive's employment with
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Employer and, following any termination thereof, the period ending on (a) in the
-
case of a Qualifying Termination, the last day of the Severance Period or (b) in
-
the case of any other termination of Executive's employment with Employer, the
second anniversary of the effective date of such termination (such applicable
periods collectively, the "Restriction Period"),Executive shall not, directly or
indirectly, become employed in an executive capacity by, engage in business
with, serve as an agent or consultant to, or become a partner, member,
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principal or stockholder (other than a holder of less than 1% of the outstanding
voting shares of any publicly held company) of, any Person that competes
anywhere in the United States, Mexico, Latin America or Europe, with any part of
the business of Parent, Employer or any of their respective Affiliates that
relates to producing, marketing, manufacturing, designing, formulating,
procuring or developing facial skin care or body products, color cosmetics,
fragrances, health or beauty supplements or other such products or related
materials. For purposes of this Section 9, the phrase employment "in an
executive capacity" shall mean employment in any position in connection with
which Executive has or reasonably would be viewed as having powers and
authorities with respect to any other Person or any part of the business thereof
that are substantially similar, with respect thereto, to the powers and
authorities assigned to the executive officer or officers of Employer serving in
the capacities served by Executive during the Employment Period or any superior
executive officer of Employer in the By-Laws of Employer as in effect on the
date hereof, a copy of the relevant portions of which has been delivered to
Executive on or before the date hereof, and which Executive hereby confirms that
he has reviewed.
10. Non-Solicitation of Employees. During the Restriction Period,
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Executive shall not, directly or indirectly, for his own account or for the
account of any other Person anywhere in the United States, Mexico, Latin America
or Europe, (i) solicit for employment, employ or otherwise interfere with the
-
relationship of Parent, Employer or any of their respective Affiliates with any
natural person throughout the world who is or was employed by or otherwise
engaged to perform services for Parent, Employer or any of their respective
Affiliates at any time during which Executive was employed by Employer (in the
case of any such activity during such time) or during the six-month period
preceding such solicitation, employment or interference (in the case of any such
activity after the Date of Termination), other than any such solicitation or
employment on behalf of Parent, Employer or any of their respective Affiliates
during Executive's employment with Employer, or (ii) induce any employee of
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Parent, Employer or any of their respective Affiliates who is a member of
management to engage in any activity which Executive is prohibited from engaging
in under any of Sections 8, 9, 10 or 11 or to terminate his employment with
Employer.
11. Non-Solicitation of Customers. During the Restriction Period,
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Executive shall not, directly
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or indirectly, for his own account or for the account of any other Person
anywhere in the United States, Mexico, Latin America or Europe, solicit or
otherwise attempt to establish any business relationship of a nature that is
competitive with the business or relationship of Parent, Employer or any of
their respective Affiliates with any Person throughout the world which is or was
a customer, client or distributor of Parent, Employer or any of their respective
Affiliates at any time during which Executive was employed by Employer (in the
case of any such activity during such time) or during the twelve-month period
preceding the Date of Termination (in the case of any such activity after the
Date of Termination), other than any such solicitation on behalf of Parent,
Employer or any of their respective Affiliates during Executive's employment
with Employer.
12. Return of Documents. In the event of the termination of
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Executive's employment for any reason, Executive shall deliver to Employer all
of (a) the property of each of Parent, Employer and their respective Affiliates
-
and (b) the documents and data of any nature and in whatever medium of each of
-
Parent, Employer and their respective Affiliates, and he shall not take with him
any such property, documents or data or any reproduction thereof, or any
documents containing or pertaining to any Confidential Information.
13. Injunctive Relief with Respect to Covenants; Forum, Venue and
-------------------------------------------------------------
Jurisdiction. Executive acknowledges and agrees that the covenants, obligations
------------
and agreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause Employer
irreparable injury for which adequate remedies are not available at law.
Therefore, Executive agrees that Employer shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of such
covenants, obligations or agreements. These injunctive remedies are cumulative
and in addition to any other rights and remedies Employer may have. Parent,
Employer and Executive each hereby irrevocably submits to the exclusive
jurisdiction of the courts of California and the Federal courts of the United
States of America, in each case located in Los Angeles, California, in respect
of the injunctive remedies set forth in this Section 13 and the interpretation
and enforcement of Sections 8, 9, 10, 11, 12 and 13 insofar
14
as such interpretation and enforcement relate to any request or application for
injunctive relief in accordance with the provisions of this Section 13, and the
parties hereto hereby irrevocably agree that (a) the sole and exclusive
-
appropriate venue for any suit or proceeding relating solely to such injunctive
relief shall be in such a court, (b) all claims with respect to any request or
-
application for such injunc tive relief shall be heard and determined
exclusively in such a court, (c) any such court shall have exclusive
-
jurisdiction over the person of such parties and over the subject matter of any
dispute relating to any request or application for such injunctive relief, and
(d) each hereby waives any and all objections and defenses based on forum, venue
-
or personal or subject matter jurisdiction as they may relate to an application
for such injunctive relief in a suit or proceeding brought before such a court
in accordance with the provisions of this Section 13.
14. Assumption of Agreement. Employer shall require any Successor
-----------------------
thereto, by agreement in form and substance reasonably satisfactory to
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place. Failure of Employer to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Executive to terminate his employment with
Employer for Good Reason as described in Section 7(c) provided that for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
15. Entire Agreement. This Agreement (including the Exhibits hereto)
----------------
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. All prior correspondence and proposals (including but
not limited to summaries of proposed terms) and all prior promises,
representations, understandings, arrangements and agreements relating to such
subject matter (including but not limited to those made to or with Executive by
any other Person) are merged herein and superseded hereby.
16. Indemnification. Employer hereby agrees that it shall indemnify
---------------
and hold harmless Executive to the fullest extent permitted by Delaware law from
and against any and all liabilities, costs, claims and expenses, including all
costs and expenses incurred in defense of litigation
15
(including attorneys' fees), arising out of the employment of Executive
hereunder, except to the extent arising out of or based upon the gross
negligence or willful misconduct of Executive. Costs and expenses incurred by
Executive in defense of such litigation (including attorneys' fees) shall be
paid by Employer in advance of the final disposition of such litigation upon
receipt by Employer of (a) a written request for payment, (b) appropriate
- -
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking adequate
-
under Delaware law made by or on behalf of Executive to repay the amounts so
paid if it shall ultimately be determined that Executive is not entitled to be
indemnified by Employer under this Agreement, including but not limited to as a
result of such exception.
17. Miscellaneous.
-------------
(a) Binding Effect; Assignment. This Agreement shall be binding on
--------------------------
and inure to the benefit of Parent, Employer, and their respective Successors
and permitted assigns. This Agreement shall also be binding on and inure to the
benefit of Executive and his heirs, executors, administrators and legal
representatives. This Agreement shall not be assignable by any party hereto
without the prior written consent of the other parties hereto, except as
pro vided pursuant to this Section 17(a). Each of Parent and Employer may effect
such an assignment without prior written approval of Executive upon the transfer
of all or substantially all of its business and/or assets (by whatever means),
provided that the Successor to Employer shall expressly assume and agree to
--------
perform this Agreement in accordance with the provisions of Section 14.
(b) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of California without reference to principles of
conflicts of law, provided that the indemnification provisions contained in
--------
Section 16 shall be governed by and construed in accordance with Delaware law.
(c) Taxes. Employer may withhold from any payments made under this
-----
Agreement all applicable taxes, including but not limited to income, employment
and social insurance taxes, as shall be required by law.
(d) Amendments. No provision of this Agreement may be modified,
----------
waived or discharged unless such modification, waiver or discharge is approved
by the Board or
16
a Person authorized thereby and is agreed to in writing by Executive and, in the
case of any such modification, waiver or discharge affecting the rights or
obligations of Parent, is approved by the Board of Directors of Parent or a
Person authorized thereby. No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No waiver of any provision of this Agreement shall be
implied from any course of dealing between or among the parties hereto or from
any failure by any party hereto to assert its rights hereunder on any occasion
or series of occasions.
(e) Severability. In the event that any one or more of the provisions
------------
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(f) Notices. Any notice or other communication required or permitted
-------
to be delivered under this Agreement shall be (i) in writing, (ii) delivered
- --
personally, by courier service or by certified or registered mail, first-class
postage prepaid and return receipt requested, (iii) deemed to have been received
---
on the date of delivery or, if so mailed, on the third business day after the
mailing thereof, and (iv) addressed as follows (or to such other address as the
--
party entitled to notice shall hereafter designate in accordance with the terms
hereof):
(A) If to Employer, to it at:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
---------
(B) if to Parent, to it at:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Attention: General Counsel
---------
(C) if to Executive, to him at his residential address as currently
on file with Employer.
17
Copies of any notices or other communications given under this Agreement shall
also be given to:
▇▇▇▇▇▇▇, Dubilier & Rice, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------
and
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
---------
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ & Associates, P.A.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
---------
(g) Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(h) Headings. The section and other headings contained in this
--------
Agreement are for the convenience of the parties only and are not intended to be
a part hereof or to affect the meaning or interpretation hereof.
(k) Certain Definitions.
-------------------
"Affiliate": with respect to any Person, means any other Person that,
---------
directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
"Control": with respect to any Person, means the possession, directly
-------
or indirectly, severally or jointly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of
18
voting securities, by contract or credit arrangement, as trustee or executor, or
otherwise.
"Person": any natural person, firm, partnership, limited liability
------
company, association, corporation, com pany, trust, business trust,
governmental authority or other entity.
"Subsidiary": with respect to any Person, each corporation or other
----------
Person in which the first Person owns or Controls, directly or indirectly,
capital stock or other ownership interests representing 50% or more of the
combined voting power of the outstanding voting stock or other owner ship
interests of such corporation or other Person.
"Successor": of a Person means a Person that succeeds to the first
---------
Person's assets and liabilities by merger, liquidation, dissolution or otherwise
by operation of law, or a Person to which all or substantially all the assets
and/or business of the first Person are transferred.
19
IN WITNESS WHEREOF, Parent and Employer have duly executed this
Agreement by their authorized representatives, and Executive has hereunto set
his hand, in each case effective as of the date first above written.
CDRJ Investments (Lux) SA
/s/
By: -------------------------
Name:
Title:
Jafra Cosmetics International,
Inc.
/s/
By: -------------------------
Name:
Title:
Executive:
/s/
-----------------------------
Name: