EXHIBIT 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT effective as of August 1, 2001, between
REVLON CONSUMER PRODUCTS CORPORATION, a Delaware corporation ("RCPC" and,
together with its parent Revlon, Inc. and its subsidiaries the "Company"), and
Paul Shapiro (the "Executive").
RCPC wishes to employ the Executive with the Company, and the
Executive wishes to accept employment with the Company, on the terms and
conditions set forth in this Agreement.
Accordingly, RCPC and the Executive hereby agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. RCPC hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company, in the capacity of Chief Administrative
Officer of Revlon, Inc. and to perform such other duties consistent with such
position as may be assigned by the Board of Directors and the Chief Executive
Officer of Revlon, Inc. The Executive's title shall be Chief Administrative
Officer and Executive Vice President, or such other titles of at least
equivalent level consistent with the Executive's duties from time to time as may
be assigned to the Executive by the Board of Directors (the "Board") and the
Chief Executive Officer (the "CEO") of Revlon, Inc. At all times during the
Term, the Executive shall be the senior-most administrative officer of the
Company. At all times during the Term, the Executive shall report directly to
the CEO and the Board.
1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive hereby represents that
his performance and execution of this Agreement will not constitute a breach of
any agreement or arrangement to which he is a party or is otherwise bound.
Nothing in this Agreement shall preclude the Executive from devoting reasonable
periods of time to the management of his personal assets and investments or from
devoting reasonable periods of time to the performance of civic or charitable
activities as long as such activities do not interfere with the performance of
his duties to the Company. The Executive currently serves and may continue to
serve during the Term on the board of directors of Toll Brothers, Inc., Niche
Directories, Inc. and Haircolor Express, Inc. and the Executive may serve during
the Term on the boards of directors of other corporations with the prior
approval of the Board or the CEO.
1.3 Location. The duties to be performed by the
Executive hereunder shall be performed primarily at the office of Revlon, Inc.
in the New York City metropolitan area, subject to reasonable travel
requirements consistent with the nature of the Executive's duties from time to
time on behalf of the Company.
2. Term of Employment; Certain Post-Term Benefits.
2.1 The Term. The term of the Executive's employment
under this Agreement (the
"Term") shall commence on August 1, 2001 (the "Effective Date") and shall end on
such date as provided pursuant to Section 2.2.
2.2 End-of-Term Provisions. At any time on or after
July 31, 2003 either RCPC or the Executive shall have the right to give written
notice of non-renewal of the Term. If RCPC or the Executive shall not
theretofore have given such notice, from and after July 31, 2003 unless and
until RCPC or the Executive gives written notice of non-renewal as provided in
this Section 2.2, the Term automatically shall be extended day-by-day.
Non-extension of the Term shall not be deemed to be a breach of this Agreement
by RCPC or the Executive for purposes of Section 4.4.
2.3 Special Curtailment. The Term shall end earlier
than the date provided in Section 2.2, if sooner terminated pursuant to Section
4.
3. Compensation: Benefits.
3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, RCPC agrees to pay the Executive during the
Term a base salary, payable biweekly in arrears, at the annual rate of not less
than $500,000 (the "Base Salary"). All payments of Base Salary or other
compensation hereunder shall be less such deductions or withholdings as are
required by applicable law and regulations. In the event that RCPC, in its sole
discretion, from time to time determines to increase the Base Salary, such
increased amount shall, from and after the effective date of the increase,
constitute "Base Salary" for purposes of this Agreement.
3.2 Bonus. In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive shall receive an annual
bonus of 75% of the Executive's Base Salary at the rate in effect during the
calendar year in which the bonus is earned, based upon achievement of 100% of
the objectives set annually not later than March 1, of such year by the
Compensation Committee of the Board in its sole discretion; or in the
alternative an annual bonus of up to 100% of the Executive's Base Salary
(determined at the rate in effect during the year prior to the payment of such
bonus, or weighted average rate if more than one rate was in effect for such
year) if such performance objectives are exceeded; and provided that the
Executive's bonus in respect of year 2001, payable in March 2002, shall not be
less than $500,000 regardless of the attainment of the objectives for the year
2001, which objectives shall be set by the Compensation Committee.
3.3 (a) Stock Options.(i) The Executive has been
granted on June 18, 2001 conditional upon being elected an executive officer
(which election was effective August 1, 2001) an option to purchase 100,000
shares of Revlon Class A common stock, and (ii) subject to the Executive's
continued employment, not later than March 30, 2002, the Executive shall be
granted an option to purchase 100,000 shares of Revlon Class A common stock,
each with a term of 10 years from the date of grant and an option exercise price
equal to the market price of Revlon Class A common stock on the date of grant
and otherwise on terms (other than number of shares covered) substantially the
same as other senior most executives of the Company generally. Subject to the
Executive's continued employment with the Company, the options so recommended
shall vest and become and remain exercisable as to 25% of the shares subject
thereto on each of the first through fourth anniversaries of the date of grant
or, if more advantageous to the Executive, on terms no less favorable than
options granted to RCPC'S senior most executives generally. If prior to the end
of the Term, the Company shall terminate the Executive other than for Cause
pursuant to Section 4.3, or the Executive shall terminate his employment on
account of Good Reason pursuant to Section 4.4, or if either the Company or the
Executive shall provide notice of non renewal of the Term on or after July 31,
2003, each option award held by the Executive as of the date of such termination
shall continue to vest in accordance with its terms and shall remain exercisable
for one year following the date that all options
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granted under that award becomes fully vested and exercisable.
(b) Restricted Stock The Executive has been
granted on June 18, 2001, conditional upon being elected an executive officer
(which election was effective August 1, 2001), 50,000 restricted shares of
Revlon Class A common stock which shall vest in 1/3 increments, on the day after
the 20 day average closing price of Revlon Class A common stock on the NYSE
equals $20, $25 and $30, respectively; provided that the restrictions shall not
lapse unless and until Executive has remained continuously employed until June
18, 2003 (unless the failure to remain continuously employed through that date
is due to termination by the Company without Cause or termination by the
Executive for Good Reason in which case the Executive will be deemed to have
remained continuously employed until such date); and in any event all
restrictions shall lapse on June 18, 2004 whether or not the Term has been
extended and whether or not the Executive remains employed on that date (unless
Executive has been terminated for Cause).
(c) All Options and Restricted Shares granted on
June 18, 2001 shall become fully vested and all restrictions shall lapse upon a
"change of control" as defined in Schedule A annexed ("Change of Control").
3.4 Business Expenses. RCPC shall pay or reimburse
the Executive for all reasonable expenses actually incurred or paid by the
Executive during the Term in the performance of the Executive's services under
this Agreement, subject to and in accordance with applicable expense
reimbursement and related policies and procedures as in effect from time to
time.
3.5 Vacation. During each year of the Term, the
Executive shall be entitled to a vacation period or periods of four weeks taken
in accordance with applicable vacation policy as in effect from time to time.
3.6 Fringe Benefits.
(i) During the Term, the Executive shall be
entitled to participate in those qualified and non-qualified defined benefit,
defined contribution, group insurance, (other than life insurance) medical,
dental, disability and other benefit plans of the Company as from time to time
in effect made available to senior executives of the Company generally and in
the Company's Executive Medical Plan providing for reimbursement of medical and
dental benefits not payable under plans generally available. During the Term the
Executive shall be entitled to the use of a Company-provided automobile (BMW X5)
in accordance with the Company's executive automobile policy and guidelines as
from time to time in effect, (including all operating costs thereof, insurance
maintenance and monthly parking in a New York City garage) and the Executive
shall be reimbursed for the initiation fees, dues assessments and like fees for
membership in the Peninsula Health Club in New York City and dues at the Boca
Rio Country Club. In addition, during the Term, the Executive shall be eligible
to participate in all benefit and prerequisite arrangements that the Company
makes available generally to its senior executives, including, without
limitation, the executive tax preparation program and the executive fitness
program.
(ii) Executive hereby waives any and all life
insurance coverage which would otherwise be available to Executive under Company
benefits plans.
(iii) During the Term, RCPC shall maintain an
individual policy of disability insurance, naming the Executive as the insured
and the Executive or a designee as the beneficiary, with a benefit equal to (A)
sixty percent (60%) of the Executive's Base Salary in effect on the date of
disability less (B) the long-term disability benefit payable under the Company's
group disability program as in effect from time to time
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(irrespective of whether the Executive has elected to participate in such
long-term disability program).
(iv) In furtherance of the Executive's
retirement benefit expectations, and without limiting the Company's ability to
modify, in any way, or terminate any or all of its defined benefit plans, RCPC
agrees to guarantee to the Executive a minimum monthly pension as set forth
below:
(a) Commencing with retirement on or
after Executive reaches age 65 (on April 25, 2006), RCPC shall pay or
provide a monthly straight life annuity pension amount of $33,333.33,
reduced by the actuarial equivalent of all benefits paid or payable
(calculated on a straight life annuity basis) to or in respect of the
Executive under (i) the Revlon Employees Retirement Plan, the Revlon
Pension Equalization Plan, and any predecessors or successors to either
of them; and (ii) all other defined benefit retirement and defined
contribution plans, whether or not tax qualified, maintained at any
time by RCPC, Revlon, Inc., any past employer of the Executive, or the
affiliate of any of them, in all cases without regard to whether the
plan has previously terminated, is being currently maintained or is
established and maintained in the future. Such offset for benefits
under other plans shall be determined as of the day this pension
starts; shall not be subsequently adjusted on account of any subsequent
benefit accruals or change in benefit amounts expected under such other
plans, whether on account of the Executive's death or otherwise; and
shall disregard benefits derived from employee before-tax or after-tax
contributions to any plan and from employer matching contributions
under any qualified 401(k) plan.
(b) The Executive may elect to have the
pension determined pursuant to subsection (a) above paid as an
actuarially equivalent joint and 50% survivor annuity with his spouse
as beneficiary if she shall survive the Executive and be legally
married to the Executive at the time of his death. Such election shall
be made by the Executive not later than 90 days before the pension
benefit is to start and shall take effect only if the Executive and his
spouse are alive and married to each other on the day the pension
starts. If the Executive's spouse dies after the pension starts and
before the Executive, no adjustment shall be made to the amount of
annual pension payable to the Executive.
(c) If the Executive dies before April
25, 2006, a lifetime pension shall be payable to the spouse, if any, to
whom the Executive was legally married on the date of his death,
commencing on April 25, 2006, in a monthly amount determined as if the
Executive had survived to that date and had then elected to have his
benefit paid as an actuarially equivalent joint and 50% survivor
annuity with his spouse as beneficiary.
(d) For purposes of determining
actuarial equivalence, the following assumptions shall be used: an
interest rate equal to the AA corporate bond long-term rate in effect
on the first day of the month preceding the month in which the benefit
is to start, the 1983 Group Annuity Mortality Table, and otherwise the
reasonable actuarial assumptions and methods selected by RCPC's primary
actuary.
(e) Notwithstanding any other provision
of this Agreement, no benefit shall be payable pursuant to this
subsection 3.6(iv), and any amounts then being paid shall cease and the
Executive shall immediately reimburse the Company for amounts
theretofore paid, in the event that (x) prior to July 31, 2003 the
Executive terminates his employment during the Term otherwise than as
provided in Section 4.4, (y) the Executive materially breaches this
Agreement during the Term or Executive breaches any of Sections 5, 6 or
7 after the Term or (z) RCPC terminates the Executive's employment
(under this Agreement or otherwise) for "Cause" as set forth in Section
4.3 of this Agreement.
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(f) Payments pursuant to this subsection
3.6(iv) shall be made quarterly or at such more frequent intervals as
RCPC may elect. RCPC's obligation under this subsection 3.6(iv) shall
be an unsecured, unfunded and unaccrued contingent general obligation
of RCPC to be satisfied from its unsegregated general funds, provided
that RCPC shall have the right, if it so elects and the Executive
consents, to defease its obligation hereunder by the purchase and
delivery to the Executive of an annuity on his life in the amount
provided for above or to fund its obligation hereunder through the
purchase of insurance or other instruments, and the Executive agrees to
comply with the reasonable requests of RCPC should RCPC elect to do so,
including by submitting to medical examination required in connection
with the purchase of any such insurance provided that any failure to
qualify for any such insurance due to Executive's health shall not
relieve RCPC of it's obligation to provide benefits under Section
3.6(iv).
4. Termination.
4.1 Death. If the Executive shall die during the
Term, the Term shall terminate and no further amounts or benefits shall be
payable hereunder except pursuant to Section 3.6(iv) or any compensation or
benefit plan in which the Executive then participates.
4.2 Disability. If during the Term the Executive
shall become physically or mentally disabled, whether totally or partially, such
that the Executive is unable to perform the Executive's services hereunder for
(i) a period of six consecutive months or (ii) shorter periods aggregating six
months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six months, by
written notice to the Executive (but before the Executive has returned to active
service following such disability), terminate the Term and no further amounts or
benefits shall be payable hereunder, except for the insurance provided for in
Section 3.6(iii) and except that the Executive shall be entitled to receive
until the first to occur of (x) the Executive ceasing to be disabled or (y) the
Executive's attaining the age of 65, continued coverage for the Executive under
the Company's group medical (including executive medical) plan, to the extent
permitted by such plans and to the extent such benefits continue to be provided
to the Company's senior executives generally.
4.3 Cause. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime or offense involving
the property of the Company or any of its subsidiaries or affiliates, willful
misconduct by the Executive in connection with the performance of the
Executive's duties hereunder or other material breach by the Executive of this
Agreement, RCPC may at any time by written notice to the Executive terminate the
Term for "Cause" and, upon such termination, the Executive shall be entitled to
receive no further amounts or benefits hereunder, except as required by law.
4.4 Company Breach; Other Termination. (A) In the
event of (i) the breach of any material provision of this Agreement by the
Company, (ii) the failure of the Compensation Committee (or other appropriate
Committee of the Board) to fully grant the options or restricted stock
contemplated by Section 3.3, (iii) a material adverse change in the position,
title or reporting structure of the Executive, (iv) a relocation of Revlon,
Inc.'s headquarters outside the New York metropolitan area or the relocation of
the Executive's principal place of employment to any location other than such
headquarters, or (v) a material failure by RCPC to pay compensation or benefits
when due to the Executive pursuant to this Agreement, the Executive shall be
entitled to terminate the Executive's employment and the Term upon 30 days'
prior written notice to the Company. (B) Additionally, the
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Agreement may be terminated by either the Company or the Executive giving notice
at any time on or after July 31, 2003 as described in Section 2.2. Any
termination of the Executive's employment and the Term under Section 4.4 (A) or
(B) above shall be deemed a termination for "Good Reason". In consideration of
the Executive's covenant in Section 5.2 upon termination for Good Reason under
this Section 4.4, RCPC agrees, and the Company's sole obligation arising from
such termination (except as otherwise provided in Section 3.6 and in Section 3.3
(solely with regard to vesting and exercisability of options) or any
compensation or benefit plan in which the Executive then participates) shall be
for RCPC to make payments in lieu of Base Salary in the amounts prescribed by
Section 3.1, to pay the Executive each month an amount equal to one twelfth
(1/12) of the maximum annual bonus contemplated by Section 3.2 and to continue
the Executive's participation in the benefits provided for in subsections (i),
(ii) and (iii) of Section 3.6 (in each case less amounts required by law to be
withheld) in each case through the later of January 31, 2005 or 18 months after
the effective date of the termination; provided that (1) such benefit
continuation is subject to the terms of such plans, (2) the Executive shall, as
a condition, execute such release, confidentiality, non-competition and other
covenants as would be required of other executives in order for the Executive to
receive payments and benefits under the Revlon Executive Severance Policy as in
effect on the date of this Agreement and (3) Executive shall have no obligation
to continue to provide services to the Company after the Term; and any cash
compensation paid or payable or any non-cash compensation paid or payable in
lieu of cash compensation earned by the Executive from other employment or
consultancy during such period shall not reduce the payments provided for herein
payable by the Company (it being understood that the Executive shall have no
obligation to repay to the Company any amounts previously paid to the Executive
hereunder by the Company as a result of any compensation earned by Executive
after the date of such payment).
4.5 Litigation Expenses. If RCPC and the Executive
become involved in any action, suit or proceeding relating to the alleged breach
of this Agreement by RCPC or the Executive, or any dispute as to whether a
termination of the Executive's employment is with or without Cause or a
resignation of employment is with or without Good Reason, then if and to the
extent that a final judgment in such action, suit or proceeding is rendered in
favor of the Executive, RCPC shall reimburse the Executive for all expenses
(including reasonable attorneys' fees) incurred by the Executive in connection
with such action, suit or proceeding or the portion thereof adjudicated in favor
of the Executive. Such costs shall be paid to the Executive promptly upon
presentation of expense statements or other supporting information evidencing
the incurrence of such expenses.
5. Protection of Confidential Information Non-Competition.
5.1 The Executive acknowledges that the Executive's
services will be unique, that they will involve the development of
Company-subsidized relationships with key customers, suppliers, and service
providers as well as with key Company employees and that the Executive's work
for the Company has given and will give the Executive access to highly
confidential information not available to the public or competitors, including
trade secrets and confidential marketing, sales, product development and other
data and place which it would be impracticable for the Company to effectively
protect and preserve in the absence of this Section 5 and the disclosure or
misappropriation of which could materially adversely affect the Company.
Accordingly, the Executive agrees:
5.1.1 except in the course of performing the
Executive's duties provided for in Section 1.1, not at any time, whether before,
during or after the Executive's employment with the Company, to divulge to any
other entity or person any confidential information acquired by the Executive
concerning the Company's or its affiliates' financial affairs or business
processes or methods or their research, development or marketing programs or
plans, any other of its or their trade secrets, any information regarding
personal matters of any directors, officers, employees or agents of the Company
or its affiliates or their respective family members, or
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any information concerning the circumstances of the Executive's employment and
any termination of the Executive's employment with the Company or any
information regarding discussions related to any of the foregoing. The foregoing
prohibitions shall include, without limitation, directly or indirectly
publishing (or causing, participating in, assisting or providing any statement,
opinion or information in connection with the publication of) any diary, memoir,
letter, story, photograph, interview, article, essay, account or description
(whether fictionalized or not) concerning any of the foregoing, publication
being deemed to include any presentation or reproduction of any written, verbal
or visual material in any communication medium, including any book, magazine,
newspaper, theatrical production or movie, or television or radio programming or
commercial or internet. In the event that the Executive is requested or required
to make disclosure of information subject to this Section 5.1.1 under any court
order, subpoena or other judicial process, the Executive will promptly notify
RCPC, take all reasonable steps requested by RCPC to defend against the
compulsory disclosure and permit RCPC to control with counsel of its choice any
proceeding relating to the compulsory disclosure. The Executive acknowledges
that all information, the disclosure of which is prohibited by this Section, is
of a confidential and proprietary character and of great value to the Company.
5.1.2 to deliver promptly to the Company on
termination of the Executive's employment with the Company, or at any time that
RCPC may so request, all memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the
Company's business and all property associated therewith, which the Executive
may then possess or have under the Executive's control.
5.2 In consideration of RCPC's covenant in Section
4.4, the Executive shall (i) in all respects fully comply with the terms of the
Employee Agreement as to Confidentiality and Non-Competition referred to in
Revlon Executive Severance Policy (the "Non-Competition Agreement"), whether or
not the Executive is a signatory thereof, with the same effect as if the same
were set forth herein in full, and (ii) in the event that the Executive shall
terminate the Executive's employment otherwise than as provided in Section 4.4,
the Executive shall comply with the restrictions set forth in paragraph 9(e) of
the Non-Competition Agreement through the earliest date on which the Term would
have expired pursuant to Section 2.2 if RCPC had given notice of non-renewal on
or as promptly as permitted by Section 2.2 after the date of termination,
subject only to the Company continuing to make payments equal to the Executive's
Base Salary during such period, notwithstanding the limitation otherwise
applicable under paragraph 9(d) thereof or any other provision of the
Non-Competition Agreement.
5.3 If the Executive commits a breach of any of the
provisions of Section 5.1 or 5.2 hereof, RCPC shall have the following rights
and remedies:
5.3.1 Prior to a Change of Control the right
and remedy to immediately terminate all further payments and benefits provided
for in this Agreement except as may otherwise be required by law in the case of
qualified benefit plans.
5.3.2 the right and remedy to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach will cause
irreparable injury to the Company and that money damages and disgorgement of
profits will not provide an adequate remedy to the Company, and, if the
Executive attempts or threatens to commit a breach of any of the provisions of
Section 5.1 or 5.2, the right and remedy to be granted a preliminary and
permanent injunction in any court having equity jurisdiction against the
Executive committing the attempted or threatened breach (it being agreed that
each of the rights and remedies enumerated above shall be independent of the
others and shall be severally enforceable, and that all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available
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to RCPC under law or in equity), and
5.3.3 the right and remedy to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, Increments or other benefits (collectively "Benefits") derived
or received by the Executive as the result of any transactions constituting a
breach of any of the provisions of Section 5.1 or 5.2 hereof, and the Executive
hereby agrees to account for and pay over such Benefits as directed by RCPC.
5.4 If any of the covenants contained in Section 5.1,
5.2 or 5.3, or any part thereof, hereafter are construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.
5.5 If any of the covenants contained in Section 5.1
or 5.2, or any part thereof, are held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision so as to be enforceable to the maximum extent
permitted by applicable law and, in its reduced form, said provision shall then
be enforceable.
5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1, 5.2 and 5.3
upon the courts of any state within the geographical scope of such covenants. In
the event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the breadth of such covenants or
otherwise, it is the intention of the parties' hereto that such determination
not bar or in any way affect RCPC's right to the relief provided above in the
courts of any other states within the geographical scope of such covenants as to
breaches of such covenants in such other respective jurisdictions, the above
covenants as they relate to each state being for this purpose severable into
diverse and independent covenants.
5.7 Any termination of the Term or the Executive's
employment shall have no effect on the continuing operation of this Section 5.
6. Inventions and Patents.
6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive's work with
the Company or any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or any of its
subsidiaries or affiliates or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of the
Executive's inventorship.
6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Executive within two years after the termination of the Executive's employment
with the Company, it is to be presumed that the Invention was conceived or made
during the Term.
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6.3 The Executive agrees that the Executive will not
assert any rights to any invention as having been made or acquired by the
Executive prior to the date of this Agreement, except for Inventions, if any,
disclosed to the Company in writing prior to the date hereof.
7. Intellectual Property.
Notwithstanding and without limiting the provisions of Section
6, the Company shall be the sole owner of all the products and proceeds of the
Executive's services hereunder, including, but not limited to, all materials,
ideas, concepts, formats, suggestions, developments, arrangements, packages,
programs and other intellectual properties that the Executive may acquire,
obtain, develop or create in connection with or during the Term, free and clear
of any claims by the Executive (or anyone claiming under the Executive) of any
kind or character whatsoever (other than the Executive's right to receive
payments hereunder), the Executive shall, at the request of RCPC, execute such
assignments, certificates or other instruments as RCPC may from time to time
deem necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, title or interest in or to any such properties.
8. Indemnification and Directors and Officers Insurance.
RCPC will indemnify the Executive, to the maximum extent
permitted by applicable law, against all costs, charges and expenses incurred or
sustained by the Executive in connection with any action, suit or proceeding to
which the Executive may be made a party, brought by any shareholder of the
Company directly or derivatively or by any third party by reason of any act or
omission of the Executive as an officer, director or employee of the Company or
of any subsidiary or affiliate of the Company. In addition, the Executive shall
be covered by RCPC's directors and officer's liability insurance policy to the
same extent as the other senior most executives of RCPC.
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9. Notices.
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith) provided in all cases a copy of all
such notices shall be sent by telefax and email at the time it is otherwise
transmitted:
If to the Company, to:
Revlon Consumer Products Corporation
625 Madison Avenue
New York, NY 10022
Attention: Robert Kretzman Senior Vice President and General
Counsel
Email: Robert.Kretzman@Revlon.com
Fax: 212-527-5693
If to the Executive, to the Executive's principal residence as
reflected in the records of the Company.
10. General
10.1 This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made between residents thereof and to be performed
entirely in New York.
10.2 The Section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.3 This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
10.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive, nor may the
Executive pledge, encumber or anticipate any payments or benefits due hereunder,
by operation of law or otherwise. RCPC may assign its rights, together with its
obligations, hereunder (i) to any affiliate or (ii) to a third party in
connection with any sale, transfer or other disposition of all or substantially
all of any business to which the Executive's services are then principally
devoted, provided that no assignment shall relieve RCPC from its obligations
hereunder to the extent the same are not timely discharged by such assignee.
10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the
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parties hereto, or in the case of a waiver, by the Party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other term or
covenant contained in this Agreement.
10.6 This Agreement may be executed in two or more
counterparts, each of which shall he deemed to be an original but all of which
together will constitute one and the same instrument.
11. Subsidiaries and Affiliates.
As used herein, the term "subsidiary" shall mean any corporation
or other business entity controlled directly or indirectly by the corporation or
other business entity in question, and the term "affiliate" shall mean and
include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written
REVLON CONSUMER PRODUCTS CORPORATION
By: s/s ROBERT KRETZMAN
----------------------------------
Name: Robert Kretzman
Title: Senior Vice President
s/s PAUL SHAPIRO
-------------------------------------
Paul Shapiro, the Executive
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Schedule A
Change in Control. A "Change in Control" shall be deemed to
have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) any Person, other than one or more Permitted
Holders is or becomes the Beneficial Owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that for
purposes of this definition a Person will be deemed to have
"beneficial ownership" of all shares that any Person has the
right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of securities of the Company representing 35% or
more of the combined voting power of the Company's Voting
Stock and the Permitted Holders "beneficially own" (as so
defined) directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of
the Company than such other Person and do not have the right
or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of
the Company (for the purposes of this clause (i) and clause
(iii), such other Person will be deemed to beneficially own
any Voting Stock of a specified corporation held by a parent
corporation, if such other Person beneficially owns, directly
or indirectly, more than 35% of the voting power of the Voting
Stock of such parent corporation and the Permitted Holders
beneficially own, directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Voting Stock of
such parent corporation and do not have the right or ability
by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of such
parent corporation); or
(ii) individuals who on the Grant Date constituted
the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was
approved by a vote of 66 2/3% of the directors of the Company
then still in office who were either directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company
then in office; or
(iii) the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company or there
is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets to
an entity in which any Person, other than one or more
Permitted Holders is or becomes the Beneficial Owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this definition a Person will be
deemed to have "beneficial ownership" of all shares that any
Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time),
directly or indirectly, of securities of such entity
representing 35% or more of the combined voting power of the
such entity's Voting Stock, and the Permitted Holders
"beneficially own" (as so defined) directly or indirectly, in
the aggregate a lesser percentage of the total voting power of
the Voting Stock of such entity than such other Person and do
not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the
Board of Directors of such entity (for the purposes of clause
(i) and this clause (iii) such other Person will be deemed to
beneficially own any Voting Stock of a specified corporation
held by a parent corporation, if such other Person
beneficially owns, directly or indirectly, more than 35% of
the voting power of the Voting Stock of such parent
corporation and the Permitted Holders beneficially own,
directly or indirectly, in the aggregate a lesser percentage
of the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting
power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of such parent
corporation).
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions
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continue to have substantially the same combined voting power of the Voting
Stock in an entity which owns all or substantially all of the assets of the
Company immediately following such transaction or series of transactions.
"Capital Stock" of any Person shall mean any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into or exchangeable for
such equity.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Grant Date" means the date of this agreement.
"Permitted Holders" means Ronald O. Perelman (or in the event of his
incompetence or death, his estate, heirs, executor, administrator, committee or
other personal representative (collectively, "heirs")) or any Person controlled,
directly or indirectly, by Ronald O. Perelman or his heirs.
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
"Preferred Stock," as applied to the Capital Stock of the Company, means Capital
Stock of any class or classes (however designated) which is preferred as to the
payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of the Company, over shares of Capital
Stock of any other class of the Company.
"Voting Stock" means all classes of Capital Stock of the Company then
outstanding and normally entitled to vote in the election of Directors.
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