CONSULTING AGREEMENT
Agreement, dated as of February 1, 1999, by and between FINLAY FINE JEWELRY
CORPORATION, a Delaware corporation (the "Corporation"), and PINNACLE ADVISORS
LIMITED, a New York corporation (the "Consultant").
WHEREAS, the Corporation wishes to retain the Consultant and the Consultant
has agreed to undertake and perform the obligations herein set forth, subject to
the terms hereof.
NOW, THEREFORE, in consideration of the promises, covenants and agreements
set forth herein, the parties agree as follows:
1. Engagement of Consultant; Duties. The Corporation hereby engages the
Consultant, and the Consultant agrees to be engaged, as a consultant on the
terms and conditions set forth below. The Consultant agrees that it will, as an
independent contractor, serve, on a non-exclusive basis, as a consultant to the
Corporation and its affiliates, performing such services, including but not
limited to, advising on domestic and international operations and opportunities,
asset deployment, acquisition and divestiture programs, department and store
openings and closings, marketing strategy, meeting with lenders, capital and
operating budgets and other business matters, subject to the direction and
control of the Corporation's Chairman of the Board and Chief Executive Officer
and the Corporation's Board of Directors. The Consultant's role is that of a
consultant and advisor to, and not that of a manager or employee of the
Corporation. It is agreed that a representative of the Consultant will hold such
directorships in the Corporation and its affiliates to which he may from time to
time be elected and he shall be provided with an adequate office, a secretary
and other working facilities at the Corporation's principal executive offices;
unless otherwise agreed by the parties hereto, the obligation to provide such
office space shall be satisfied by the Consultant being provided with the office
heretofore utilized by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. The Consultant represents and
warrants that it is not subject to any agreement, covenant or legal restraint
which precludes or otherwise restricts its ability to enter into this Agreement
and perform the services contemplated hereby.
2. Time. The Consultant will devote such time to the affairs of the
Corporation (and its affiliates) as is necessary to perform the services
contemplated hereby in a professional and effective manner, subject to illness
and reasonable requirements
of other businesses and activities of the Consultant's personnel. The Consultant
may perform services hereunder in such manner (whether by conference, telephone,
letter or otherwise) and at such time and place as Consultant may reasonably
determine. It is presently contemplated that, if available, ▇▇. ▇▇▇▇▇▇▇▇▇ will
attempt to act for the Consultant in the performance of the services required of
the Consultant hereunder. Nothing herein shall prevent any representative of the
Consultant from taking vacation or travel.
3. Term.
The Consultant's engagement shall commence effective as of the date hereof
and shall continue until January 31, 2001 (the "Termination Date").
4. Compensation.
As compensation for the Consultant's services hereunder, the Consultant
shall receive a fee at the rate of $225,000 per year ("Compensation"), payable
in equal quarterly installments, with the first installment payable on February
1, 1999.
5. Expense Reimbursement.
The Corporation will reimburse the Consultant for any and all expenses
incident to the Consultant's rendering of services hereunder which the
Corporation deems necessary or desirable, upon presentation of expense vouchers
or other documentation in such detail as the Corporation may from time to time
reasonably require. It is acknowledged and agreed that the type of expenses to
be reimbursed hereunder shall be similar to those incurred by ▇▇. ▇▇▇▇▇▇▇▇▇ in
his position as an officer of each of the Corporation and its affiliates.
6. Non-Competition.
(a) The Consultant recognizes that the services to be performed by it
hereunder are special, unique and extraordinary and that, by reason of its
engagement hereunder, the Consultant will acquire confidential information and
trade secrets concerning the operation of the Corporation and Enterprises. For
all purposes hereunder or in respect hereof, the Consultant, for and on behalf
of itself and its representatives, including without limitation ▇▇. ▇▇▇▇▇▇▇▇▇,
agrees that during any period or periods in or in respect of which the
Consultant is receiving or has received any Compensation provided for herein
(whether or not the Consultant is engaged by or rendering services to the
Corporation during such period or periods), the Consultant will not, directly or
indirectly, as an officer, director, stockholder, partner, associate, employee,
consultant, owner, agent, creditor, co-venturer or otherwise, become or be
interested in or be
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associated with any other corporation, firm or business engaged, in any
geographical area in which the Corporation or Enterprises is engaged at the
Termination Date in a Competitive Business with that of the Corporation or
Enterprises on the Termination Date. A "Competitive Business" shall mean any
business (i) which operates any type of business in the jewelry field, (ii)
which acts as a direct vendor of or advisor with respect to diamonds or other
fine jewelry to any store which is a member of a retail group with which the
Corporation or Enterprises does business at the time the Consultant's engagement
hereunder expires, (iii) which is, or owns any entity which is, a department
store group in which the Corporation or Enterprises operates licensed jewelry
departments or (iv) which is in a business which is the same as or similar to
any business which the Corporation or Enterprises is engaged in at the time the
Consultant's engagement terminates. The Consultant's (or any representative's)
ownership, directly or indirectly, of not more than three percent of the issued
and outstanding stock of any corporation except Enterprises, the shares of which
are regularly traded on a national securities exchange or in the
over-the-counter market, shall not in any event be deemed to be a violation of
the provisions of this Section 6. The ownership of securities by Consultant (or
any representative thereof) of Enterprises shall not be deemed to be a violation
of this Section 6. For purposes of this Section 6 and Section 7, the term
"Corporation" and "Enterprises" shall also mean any affiliate (as such term is
defined in Rule 144 promulgated under the Securities Act of 1933, as amended, or
any successor rule) of either entity.
(b) The Consultant, for and on behalf of itself and its representatives,
agrees, during the period set forth in subsection (a) above, that it shall not,
on behalf of itself or any business it is interested in or associated with,
employ or otherwise engage, or seek to employ or engage, any individual employed
by the Corporation or Enterprises at any time during the preceding twelve
months, or solicit any business in the jewelry field from any person the
Corporation or Enterprises was doing business with at any time during the
engagement hereunder, including without limitation any lessor from which the
Corporation or Enterprises leases or leased a department or departments.
(c) The Corporation and Enterprises shall be entitled, in addition to any
other right and remedy it may have, at law or in equity, to an injunction,
without the posting of any bond or other security, enjoining or restraining the
Consultant from any violation or threatened violation of this Section 6, and the
Consultant hereby consents to the issuance of such injunction; provided,
however, that the foregoing shall not prevent the Consultant from contesting the
issuance of any such injunction on the ground that no violation or threatened
violation of this Section 6 has occurred. If any of the restrictions contained
herein shall be deemed to be unenforceable
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by reason of the extent, duration or geographical scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, geographical scope, or other provisions hereof, and in its
reduced form this Section 6 shall be enforceable in the manner contemplated
hereby.
(d) The Consultant acknowledges that Enterprises is a third party
beneficiary of the obligations of Consultant under this Sections 6 and 7 herein.
Accordingly, Enterprises will have the right to enforce against Consultant and
its representatives its obligations under such Sections despite not being a
signatory to this Agreement.
7. Confidentiality. The Consultant, for and on behalf of itself and its
representatives, shall not divulge to anyone, either during or at any time after
the termination of its engagement, any information constituting a trade secret
or other confidential information acquired by it concerning the Corporation or
Enterprises, except in the performance of its duties hereunder, without the
prior written consent of the Corporation or Enterprises, as the case may be, or
if required by law. The Consultant acknowledges that any such information is of
a confidential and secret character and of great value to the Corporation or
Enterprises, and upon the termination of its engagement the Consultant shall
forthwith deliver up to the Corporation all notebooks and other data in its
possession relating to either the Corporation or Enterprises, as the case may
be. The Corporation shall be entitled, in addition to any other right and remedy
it may have, at law or in equity, to an injunction, without the posting of any
bond or other security, enjoining or restraining the Consultant from any
violation or threatened violation of this Section 7, and the Consultant hereby
consents to the issuance of such injunction; provided, however, that the
foregoing shall not prevent the Consultant from contesting the issuance of any
such injunction on the ground that no violation or threatened violation of this
Section 7 has occurred.
8. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not affect or render invalid or unenforceable any
other provision of this Agreement, and this Agreement shall be construed as if
such provision had been drawn so as not to be invalid or unenforceable.
9. Entire Agreement, Etc. This Agreement sets forth the parties' final and
entire agreement, and supersedes any and all prior understandings with respect
to its subject matter. This Agreement shall bind and benefit the parties hereto
and their respective heirs, successors and assigns, except as otherwise set
forth herein. This Agreement is personal in nature and none of the Consultant's
obligations under this Agreement may
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be assigned or delegated by the Consultant. The Corporation may assign this
Agreement to any affiliate thereof. This Agreement shall also be assignable by
the Corporation or any of its affiliates to any other person in connection with
the sale, transfer or other disposition of all or a substantial portion of its
business and assets; and this Agreement shall inure to and be binding upon any
successor to all or a substantial portion of the business, or to all or
substantially all of the assets, of the Corporation, whether by merger,
consolidation, purchase of stock or assets or otherwise. This Agreement cannot
be changed, waived or terminated except by a writing signed by both the
Consultant and the Corporation and shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
and performed entirely within such state.
10. Independent Contractor. The parties agree that the Corporation shall
have no right to control or direct the details, manner or means by which the
Consultant accomplishes the results of the services performed hereunder, it
being acknowledged that the Consultant shall for all purposes be an independent
contractor of the Corporation.
11. Counterparts. This instrument may be executed in two or more
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
12. Notices. Any notice or other communication required to or which may be
given to any party hereunder shall be in writing and shall be delivered
personally to such party (or the Secretary thereof in the case of the
Corporation) or if mailed, by registered or certified mail, postage prepaid,
return receipt requested, addressed to such other party at the address first set
forth above and shall be deemed delivered in all cases upon receipt. Any party
may change the address to which notices are to be sent by giving written notice
of any such change in the manner provided herein.
13. Captions. The descriptive headings of the several sections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
14. No Right of Set-Off. The obligation to pay to the Consultant all
Compensation and any other amounts payable to the Consultant hereunder shall be
an absolute obligation of the Corporation and shall not be subject to any right
of set-off or similar right.
15. Arbitration. Any controversy or claim arising out of or relating to
this Agreement or any breach or asserted breach hereof or questioning the
validity and binding effect hereof shall be determined by arbitration conducted
in the City of New York in accordance with the Commercial Rules of the American
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Arbitration Association then obtaining, and judgment upon any award rendered may
be entered in any court having jurisdiction thereof. The decision of the
arbitrators shall be final and binding upon the parties hereto. The Corporation
shall pay all of the costs and expenses (including reasonable attorneys' fees)
incurred by the Executive in connection with any matters submitted to
arbitration pursuant to this Section 15 if the Consultant substantially prevails
in such arbitration.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first written above.
FINLAY FINE JEWELRY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
PINNACLE ADVISORS LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
The undersigned agrees to and
accepts the foregoing Agreement:
FINLAY ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
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