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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Employment Agreement"), is made and entered
into this 19th day of April, 1996, by and between TRISTAR CORPORATION, a Texas
corporation ("Employer"), and Joseph DeKama ("Employee"), a resident of the
State of New York.
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as its Senior Vice President -
Director of Sales for the United States and Canada for a term of employment as
herein provided and Employee desires to become an employee of Employer as
herein provided; and
WHEREAS, the parties desire to establish by contract the terms and
conditions of the employment of Employee by Employer;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties agree as follows:
1. TERM OF EMPLOYMENT. The term of this Employment Agreement shall
commence on April 1, 1996 and terminate on August 31, 1998. The Company's
fiscal year ends on August 31 of each year (the "Fiscal Year"). Following
August 31, 1998, so long as Employee is not in default of any of Employee's
obligations hereunder, this Employment Agreement shall automatically be renewed
at the end of each subsequent Fiscal Year for an additional Fiscal Year if
Employer has attained at least 50% of the annual revenue targets for such
Fiscal Year as set forth on Exhibit C attached hereto.
2. TITLE AND DUTIES OF EMPLOYEE AND ESTABLISHMENT OF SALES AND
MARKETING OFFICE. Employee shall serve as Senior Vice President - Director of
Sales of Employer for the United States and Canada. Employee agrees to his
employment by Employer and to devote his entire time, skill, labor, and
attention exclusively to the business of Employer throughout the period of his
employment. A schedule of business activities that Employee may engage in
which shall not be a violation of Employee's commitment to devote his entire
time and energy to is attached hereto as Exhibit A and incorporated herein by
reference (the "Permitted Activities"). Employer shall have the right at any
time to change or modify the work or duties to be performed by Employee,
provided that such work or duties as so changed or modified shall include the
general powers and duties usually invested in the office of Senior Vice
President - Director of Sales of a corporation. Employer shall have the
exclusive power and authority to determine the matters to be assigned to
Employee and the specific duties to be performed by him. During the Term,
Employer will establish a Sales and Marketing Office in New York located at 250
West 57th Street, New York, New York or such other address designated in
writing by Employer from time to time. The office will be staffed and include
the salary and benefits of up to 2 employees, rent, and operating expenses such
as telephone and supplies. The maximum annual cost for such sales office shall
be $100,000. A schedule of the costs of such sales and marketing office will
be prepared by Employee and submitted to the Employer for approval.
3. SALARY. For all services rendered by him during the Term,
Employee shall be paid an annual salary of Three Hundred Sixty Thousand Dollars
($360,000) ("Salary"), payable monthly, minus standard deductions for all
applicable state and federal taxes and other reasonable bona fide deductions.
If the Term of this Employment Agreement is extended beyond Fiscal 1998 as
provided in Section 1 above, there will be a review of the salary and
compensation provisions for any such extension and any adjustments shall be set
forth in the written extension agreement referred to herein.
4. ADDITIONAL BENEFITS. During the Term, Employee shall be entitled
to the following other benefits, in addition to his Salary or as otherwise
described in this Employment Agreement:
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A. REIMBURSEMENT FOR TRAVEL, ENTERTAINMENT AND OTHER EXPENSES.
During the Term, Employer shall reimburse Employee up to $100,000 per
year (beginning the date hereof) for any reasonable travel,
entertainment or other necessary expenses incurred in the performance
of his duties under this Employment Agreement, consistent with the
policies of Employer at the time of such reimbursement with respect to
such expenses, as such policy may be modified from time to time. On
an annual basis (beginning the date hereof), Employee shall prepare a
maximum annual budget for such expenses (which budget shall not exceed
$100,000) or such other amount as agreed to by the parties from time
to time, and an executive officer of Employer must approve such budget
before any such expenses are reimbursed.
B. ALL BENEFIT PLANS.. During the Term, Employee shall be
eligible to participate in all benefit plans generally available to
Employer's officers,
C. BONUS. During the Term, Employee shall be eligible for annual
incentive compensation of up to $60,000 in accordance with the terms
and conditions as set forth in Exhibit B attached hereto and
incorporated herein by reference.
D. STOCK OPTIONS. Employer will be eligible to receive stock
options to acquire up to 250,000 shares of Employer's common stock in
accordance with the terms and conditions set forth in Exhibit C
attached hereto and incorporated herein by reference.
5. RESIGNATION.
A. WITHOUT GOOD REASON. If for any reason Employee voluntarily
resigns his employment prior to the expiration of the Term other than
for Good Reason (as defined in Section 5.B. below), Employee shall
forfeit any right to receive any further payments or benefits,
including the Lump Sum Payment (as defined in Section 6), pursuant to
this Employment Agreement and Employer shall be released and
discharged from any liability, obligation or duty arising in
connection with this Employment Agreement or in connection with his
employment. Nevertheless, Employee shall continue to be bound and
obligated by any provision of this Employment Agreement which is
intended by its terms to survive and continue beyond the resignation
of Employee, including, but not limited to, the provisions of Section
9.
B. WITH GOOD REASON. If Employee voluntarily resigns his
employment with Employer for Good Reason, then provided that Employee
strictly complies with the terms of the Employment Agreement, Employer
shall be obligated to pay Employee the Lump Sum Payment (as defined
below). For purposes of this Section 5.B., "Good Reason" shall mean
(a) a reduction, without Employee's consent, of Employee's Salary, (b)
the assignment to Employee of duties inconsistent with those duties
typically performed by the office of vice president of a corporation,
without Employee's consent, or (c) the Employer's material breach of
any other material provision in this Employment Agreement; provided,
however, that in the event the Employee intends to resign for Good
Reason, the Employee must give the Employer 30 days' prior written
notice of his intent to do so, setting forth the conditions he
reasonably believes constitute "Good Reason" hereunder; and provided,
further, that the Employer shall have 30 days, or such longer period
of time as mutually agreed upon, to cure the condition to Employee's
reasonable satisfaction. In the event Employee resigns prior to the
expiration of Employer's period to cure, such termination shall not
constitute a resignation for Good Reason. In addition, upon any such
resignation for Good Reason by Employee hereunder, Employee shall
continue to be bound and obligated by any
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provision of this Employment Agreement which is intended by its terms
to survive and continue beyond the resignation of Employee, including,
but not limited to, the provisions of Section 9.
6. TERMINATION IN DISCRETION OF EMPLOYER. If the employment of
Employee by Employer is terminated by Employer in its discretion prior to the
end of the Term, other than a termination pursuant to Section 7 of this
Employment Agreement, then during the remainder of the Term, and provided that
Employee strictly complies with the terms of this Employment Agreement,
Employer shall be obligated to pay Employee the greater of (i) the balance of
Employee's salary under this Employment Agreement until August 31, 1998 (for a
termination prior to August 31, 1998) or the balance of Employee's salary for
the Employer's Fiscal Year during the year of termination (for a termination
after August 31, 1998) or (ii) three months salary (the "Lump Sum Payment").
Upon such termination, this Employment Agreement shall be terminated and
Employee shall be released from all obligations to Employee with respect to
this Employment Agreement, including but not limited to compensation, except
for the Lump Sum Payment and obligations accrued prior to such date of
termination. Nevertheless, Employee shall continue to be bound and obligated
by any provision of this Employment Agreement which is intended by its terms to
survive and continue beyond the resignation of Employee, including, but not
limited to, the provisions of Section 9. This right of Employer to terminate
Employee in Employer's discretion prior to the end of the Term is an
independent and absolute right, and may be applied and enforced separately by
Employer at its election and in its sole discretion, notwithstanding any other
provision contained in this Employment Agreement to the contrary.
7. TERMINATION EARLIER THAN BY EXPIRATION OF TERM. Although the
parties expressly intend that this Employment Agreement shall continue during
the Term until its expiration unless sooner terminated pursuant to the
provisions of Section 5 or Section 6 above, the parties mutually agree that
this Employment Agreement, and its provisions (except for any provision
intended by its terms to survive and continue, including, but not limited to,
the provisions of Section 9), in addition shall be terminated in advance of the
expiration of the Term upon the occurrence of any one of the following events:
A. DEATH. The death of Employee;
B. DISABILITY. The physical or mental disability of Employee
that prevents him from performing effectively the duties of his
employment for a time period greater than six (6) consecutive months.
For purposes of this Section 7.B., the determination of whether
Employee has been physically or mentally disabled for more than six
(6) consecutive months shall be made in the majority, written opinion
of a three-person panel of licensed medical doctors, said panel to be
made up of one licensed medical doctor appointed by Employee (or his
legal representative, which representative may be his closest living
relation if no legal representative exists), one licensed medical
doctor appointed by Employer and a third licensed medical doctor
selected by the other two panel members; or
C. TERMINATION FOR CAUSE. Employer also reserves the right at
its election to terminate the employment of Employee, and thereby
effect a termination of this Employment Agreement, if it determines
that Employee, at any time, (i) has engaged in misconduct, including
an act of dishonesty or moral turpitude, or (ii) has violated in any
material respect any material covenant, term or condition contained in
this Employment Agreement or any applicable material policy or
policies of Employer, or (iii) has been negligent in his attention to
the business of Employer or has intentionally failed to perform a
reasonably requested directive or assignment from the President or the
Board of Directors of Employer. Upon the occurrence of any event
described in clause (i) of this Section 7.C., regardless of whether
such event is also described in clause (ii) of this Section 7.C.,
notice of termination for cause of the
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employment of Employee may be given in writing by Employer to Employee
and such termination shall be effective immediately upon the delivery
of such notice. Upon the occurrence of any event described in clause
(ii) or (iii) of this Section 7.C. Notice of termination for cause of
the employment of Employee setting forth the grounds for such
termination shall be given to Employee by Employer in writing and such
termination shall be effective thirty (30) days thereafter if a cure
for such event has not been effected. The giving of such notice shall
also effect a termination of this Employment Agreement except as to
any provision of this Employment Agreement which is intended by its
terms to survive and continue, including, but not limited to, the
provisions of Section 9.
Upon the occurrence of any of the events described above in Section 7. A. -
7. C., Employer shall be released and discharged from any liability, obligation
or duty arising in connection with this Employment Agreement or in connection
with Employee's employment, including payment of the Lump Sum Payment, provided
that upon the occurrence of any event described in Section 7.B., Employee shall
be entitled to the benefits of any disability policy of Employer covering such
event to the extent provided in such policy.
8. BEST EFFORTS OF EMPLOYEE. Employee agrees he will at all times
faithfully, industriously, and to the best of his ability, experience, and
talent, perform to the reasonable satisfaction of Employer all of the duties
that may be required of and from him pursuant to the express and implicit terms
of this Employment Agreement. During the Term, Employee will not directly or
indirectly, on his own behalf or as a partner, officer, consultant, principal,
agent, stockholder (except by ownership of five percent (5%) or less of the
outstanding stock of any publicly held corporation) or in any other capacity,
invest or engage in, or devote any material endeavor or effort to any other
business than the Permitted Activities.
9. RECORDS; CONFIDENTIAL INFORMATION; NON-COMPETITION AGREEMENT;
TANGIBLE PROPERTIES.
A. OWNERSHIP. All business records, data and information
("Records") are and shall remain the exclusive property of Employer.
Employee shall not under any circumstances whatsoever permanently
remove any Records from the premises of Employer without prior written
consent of Employer.
B. RETURN OF RECORDS. Upon request, Employee shall immediately
return to Employer all Records and copies thereof in Employee's
possession.
C. CONFIDENTIAL AND PROPRIETARY INFORMATION. To the extent not
otherwise provided for in this Employment Agreement, Employee agrees
to maintain the confidentiality of all confidential and proprietary
information relating to the business or internal operation of Employer
both during and after his employment by Employer, provided that if
Employee becomes legally compelled to disclose any of such
information, Employee will promptly notify Employer so that Employer
may seek a protective order or other appropriate remedy and/or waive
compliance under this Section 9. C. If such protective order or other
remedy is not obtained, or if Employer waives compliance with the
provisions of this Section 9.C., Employee will furnish only that
portion of such information that is legally required. Employee
understands and agrees that this Section 9 is a material part of this
Employment Agreement, his acceptance of which is an inducement to
Employer to enter into this Employment Agreement.
D. NON-COMPETITION AGREEMENT. Employee covenants and agrees that
for the period beginning the date of Employee's termination of his
employment with
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Employer and ending on the second (2nd) anniversary of said date (the
"Restricted Period"), Employee will not, directly or indirectly, on
his own behalf or as a partner, officer, consultant, principal, agent,
stockholder (except by ownership of five percent (5%) or less of the
outstanding stock of any publicly held corporation) or in any other
capacity, invest or engage in, or devote any endeavor or effort to the
alternative designer fragrances segment of the perfume or toiletries
business (the "Business"), including without limitation the companies
set forth on Exhibit D attached hereto, in the United States or Canada
or in other jurisdictions in which Employer may operate (the
"Territory").
E. NON-SOLICITATION AGREEMENT. During the Restricted Period,
Employee shall not, whether for his own account or for the account of
any other individual, partnership, firm, corporation or other business
organization, intentionally solicit, endeavor to entice away from
Employer or any entity controlled by or under common control with
Employer, or otherwise interfere in a material fashion with the
relationship with, any person who is employed by or otherwise engaged
to perform services for Employer or any person or entity who is as of
the Termination Date, or within the then most recent 12-month period,
a customer or client of Employer.
F. REFORMATION. Each of the parties hereto recognizes that the
time limitations and territorial restrictions contained in this
Section 9 are properly required for the adequate protection of the
Business and that in the event any covenant or other provision
contained herein shall be deemed to be illegal, unenforceable, or
unreasonable by a court or other tribunal of competent jurisdiction
with respect to any part of the Territory, such covenant or provisions
shall not be affected with respect to any other part of the Territory,
and each of the parties hereto agrees and submits to the reduction of
said time limitations and territorial restriction to such an area as
said court shall deem reasonable.
G. DOCUMENTS, WRITTEN MATERIALS AND TANGIBLE PROPERTIES. To the
extent not otherwise provided for in this Employment Agreement,
Employee agrees that all documents, written materials and other
tangible property, including copies thereof, relating in any way to
the business of Employer, shall be and remain the exclusive property
of Employer and shall be returned to Employer by Employee immediately
upon termination of his employment by Employer or at the request of
Employer.
H. INJUNCTIVE RELIEF. Employee hereby acknowledges and agrees
that Employer could not be fully compensated for damages resulting
from a continuing and material breach of any of the provisions of this
Section 9 and, accordingly, that Employer shall be entitled to
temporary or permanent injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions,
to enforce any such provision. This right of Employer with respect to
the obtaining of injunctive relief shall not, however, diminish any
right of Employer to claim and recover monetary damages or to obtain
any other remedy.
I. SURVIVAL. The provisions of this Section 9 shall continue in
effect notwithstanding the termination of, or resignation from, the
employment of Employee by Employer.
10. WAIVER OF BREACH. A waiver by Employer of a breach of any
provision of this Employment Agreement shall not operate or be construed as a
waiver of any subsequent breach by Employee of the same or any other provision
of this Employment Agreement.
11. NOTICES. Any notice required to be given under this Employment
Agreement
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shall be deemed sufficient, if in writing, and sent by certified mail, return
receipt requested, or hand delivered, to the other party at the address shown
below
FOR Employer: Tristar Corporation
12500 San Pedro, Suite 500
San Antonio, Texas 78216
Attn: President
WITH a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P.
300 Convent, Suite 1500
San Antonio, Texas 78205
Attn: Cecil Schenker, P.C.
FOR Employee: Joseph DeKama
250 West 57th Street
New York, New York
Either party may change its or his address for notices under this section by
giving notice of the change to the other pursuant to this section.
12. GOVERNING LAW; FORUM. This Employment Agreement shall be governed
by and construed in accordance with the laws of the State of Texas without
regard to the conflicts of laws rules thereof and is made and entered into in
San Antonio, Bexar County, Texas. Each of the parties hereto agree that any
lawsuit or claim relating to this Employment Agreement shall be brought in the
State District Court for Bexar County, Texas or in the United States Federal
District Court for the Western District of Texas, San Antonio Division
13. ENTIRE AGREEMENT. This Employment Agreement contains the entire
agreement between the parties. This Employment Agreement shall not be amended
except by a written agreement signed by both parties. The execution of this
Employment Agreement shall terminate in full that certain Independent Sales
Representative Agreement by and among Employer, Employee and Ascending Sales,
Inc. executed in October, 1995 and upon the termination thereof, such
Independent Sales Representative Agreement shall be of no force and effect.
14. SEVERABILITY. If any of the provisions of this Employment
Agreement are determined to be invalid or unenforceable in part, the remaining
provisions, and the enforceable portions of any partially unenforceable
provisions, shall nevertheless be binding and enforceable.
15. BINDING EFFECT; EFFECTIVE DATE. Subject to Section 16 below, this
Employment Agreement shall inure to the benefit of and shall be binding upon
Employer and its successors and assigns, and upon Employee and his heirs,
legatees, executors, administrators, successors and beneficiaries. This
Employment Agreement shall be effective as of the date first above written.
16. ASSIGNMENT. This Employment Agreement shall not be assignable by
Employee without the prior written consent of Employer.
17. CAPTIONS. Captions of Sections are inserted only as a matter of
convenience and reference and in no way define, limit or describe the substance
or scope of this Employment Agreement or the intent of any of its provisions.
18. RULES OF CONSTRUCTION. This Employment Agreement has been
negotiated by the parties and is to be interpreted according to its fair
meaning as if the parties had prepared it together and not strictly for or
against any party. All references in this Employment Agreement to "parties"
refer to parties in this Employment Agreement unless expressly indicated
otherwise. References in this
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Employment Agreement to sections are to sections of this Employment Agreement
unless expressly indicated otherwise. References in this Employment Agreement
to "provisions" of this Employment Agreement refer to the terms, conditions and
promises contained in this Employment Agreement. At each place in this
Employment Agreement where the context so requires, the masculine, feminine or
neuter gender includes the others and the singular or plural number includes
the other. Forms of the verb "including" mean "including without limitation."
The word "or" is inclusive and includes "and ."
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written,
TRISTAR CORPORATION
By:
------------------------------------
Name:
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Title:
---------------------------------
----------------------------------------
JOSEPH DEKAMA
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EXHIBIT A
PERMITTED ACTIVITIES
Employee's wife currently participates in the wholesale distribution of
brand name fragrances. Such activities shall constitute a Permitted Activity
hereunder unless such activities materially increase during the Term from the
level of activity for the year prior to the date hereof. On a quarterly basis,
Employee shall provide Employer with a report of such activities and in the
event Employer determines that such activities have materially increased, such
activity shall be a "Permitted Activity" hereunder only to the extent that
Employer determines that such increase was not the result, directly or
indirectly, of Employee's employment with Employer or from knowledge gained,
directly or indirectly, from Employee's employment with Employer
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EXHIBIT C
TERMS AND CONDITIONS OF STOCK OPTION
1. Aggregate number of Option Shares Up to 250,000 in one to six separate option grants
2. Type Nonqualified, not under any existing company plan
3. Exercise Price Fair market value on the date of grant
4. Expiration Date Seven years from the date of grant
5. Death, Disability, Retirement, Options, to the extent exercisable upon occurrence of event, shall
Resignation or Other Termi nation remain exercisable for three months
Without Cause
6. Termination With Cause Options, to the extent exercisable upon termination shall be forfeited
7. Grant of Options Effective upon the date hereof, options for 50,000 shares shall be
granted. If certain annual revenue targets are attained by Employer
in the four consecutive years beginning with fiscal year 1997, then
Employee shall be granted additional options to acquire 50,000 shares
for each fiscal year in which such targets are met. Notwithstanding
the preceding, if in any such fiscal year Employer attains only 50% to
99% of an annual revenue target, then the number of options for which
Employee shall be eligible to receive in such fiscal year shall equal
the percentage of the annual revenue target attained times 50,000 (for
example, if 50% of an annual revenue target is attained, the number of
options which shall be granted at that fiscal year end shall be
25,000), and if Employer attains less than 50% of an annual revenue
target, then the number of options which shall be granted at that
fiscal year end shall be 0. All options not granted to Employee in any
fiscal year due to Employer obtaining less than 100% but at least 50%
of the annual revenue target for such fiscal year shall be accumulated
in a pool (up to 50,000 shares) out of which Employee shall receive
options for up to 50,000 shares in fiscal year 2001 in the same
percentage manner as set forth above based upon achieving the annual
revenue targets for fiscal year 2001. Each option, when granted,
shall be immediately exercisable ir full on the date of grant.
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8. Revenue Targets Fiscal Year 1997 - $20,000,000
Fiscal Year 1999 - $45,000,000
Fiscal Year 1998 - $39,000,000
Fiscal Year 2000 - $52,000,000
Fiscal Year 2001 - $60,000,000
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EXHIBIT D
LIST OF COMPETITORS
United States Canada Venezuela
- ------------- ------ ---------
Jean Philippe Cartland Glamour, C. A. (Jean Nacris)
Delagar Claude G
Parfums DeCoeur
Fragrance Impressions
Lady in Red
Quintessence
L'Illusions
Tsumura Int'i
Yaz
From France to You
Paris Design
Q Perfumes
Deborah
Artmatic
Pavion
Wet n Wild