-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OxhiawOd9sfN0AmjP3qrUI2YRucvJ135t4AVGbybdJTTGUBKQWYdgMb8rd/Ij5Zz O7PzTCTC0J/OS5g3N/fAkg== /in/edgar/work/20000530/0000950144-00-007360/0000950144-00-007360.txt : 20000919 0000950144-00-007360.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950144-00-007360 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000129 FILED AS OF DATE: 20000530 FILER: COMPANY DATA: COMPANY CONFORMED NAME: E COM VENTURES INC CENTRAL INDEX KEY: 0000880460 STANDARD INDUSTRIAL CLASSIFICATION: [5912 ] IRS NUMBER: 650026340 STATE OF INCORPORATION: FL FISCAL YEAR END: 0205 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-19714 FILM NUMBER: 646368 BUSINESS ADDRESS: STREET 1: 11701 N W 101 RD CITY: MIAMI STATE: FL ZIP: 33178 BUSINESS PHONE: 3058891600 MAIL ADDRESS: STREET 1: 11701 N W 101 RD CITY: MIAMI STATE: FL ZIP: 33178 FORMER COMPANY: FORMER CONFORMED NAME: PERFUMANIA INC DATE OF NAME CHANGE: 19930328 10-K/A 1 0001.txt E COM VENTURES 1/29/2000 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended January 29, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) Commission file number 0-19714 E COM VENTURES, INC. (formerly PERFUMANIA, INC.) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) FLORIDA (State or other jurisdiction of incorporation or organization) 65-0026340 (I.R.S. Employer Identification Number) 11701 NW 101 ST. ROAD, MIAMI, FL (Address of principal executive offices) 33178 (Zip Code) (305) 889-1600 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $.01 PAR VALUE (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K [ ]. As of May 10, 2000, the number of shares of the registrant's Common Stock outstanding was 8,419,317. The aggregate market value of the Common Stock held by non affiliates of the registrant as of May 10, 2000 was approximately $12,282,100, based on the closing price of the Common Stock ($2.5625) as reported by the Nasdaq National Market on such date. For purposes of the foregoing computation, all executive officers, directors and 5 percent beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers, directors or 5 percent beneficial owners are, in fact, affiliates of the registrant. 2 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT EXECUTIVE OFFICERS AND DIRECTORS The executive officers and directors of the Company are as follows:
NAME AGE POSITION ---- --- -------- Ilia Lekach 51 Chairman of the Board and Chief Executive Officer Jerome Falic 36 President and Vice Chairman of the Board Marc Finer 38 President of the Retail Division of Perfumania and Director A. Mark Young 37 Chief Financial Officer Donovan Chin 33 Chief Financial Officer of Perfumania, Inc., Secretary and Director Claire Fair 40 Vice President of Human Resources Robert Pliskin(1)(2)(3) 76 Director Carole Ann Taylor(1)(2)(3) 54 Director Horacio Groisman, M.D.(2)(3) 47 Director Zalman Lekach 33 Director
- --------------- (1) Member of Audit Committee. (2) Member of Compensation Committee. (3) Member of Stock Option Committee. ILIA LEKACH is one of our co-founders and was our Chief Executive Officer and Chairman of the Board from incorporation in 1988 until his resignation in April 1994. Mr. Lekach was re-appointed Chief Executive Officer and Chairman of the Board on October 28, 1998. He is also Chairman of the Board and Chief Executive Officer of Parlux Fragrances, Inc., a publicly traded manufacturer of fragrance and related products, and Chairman of the Board of Directors of Take To Auction.Com, Inc. In August 1996, Mr. Lekach became an officer and director of L. Luria & Son, Inc., a publicly traded specialty discount retailer. On August 13, 1997, L. Luria & Son, Inc., filed for relief under Chapter 11 of the Bankruptcy Code and has since been liquidated. Messrs. Ilia Lekach and Zalman Lekach are brothers. JEROME FALIC has served as our President since October 28, 1998, as a Director since August 1994 and as the Vice Chairman of the Board since September 1994. Prior to his appointment as President, Mr. Falic served as a Vice President since our inception in 1988. MARC FINER has been the President of Perfumania's Retail Division since March 1994 and a Director since August 1994. Mr. Finer was the President of Parfums Expresso, Inc. and Parfums D'Arte, wholesale distributors of fragrances in Puerto Rico, from their inception in August 1986 until March 1994. 2 3 A. MARK YOUNG joined us in February 2000 and was appointed our Chief Financial Officer in May 2000. Prior to joining us, Mr. Young was employed for seven years in the Business Assurance practice of the Middle Market Group of PricewaterhouseCoopers LLP, South Florida. DONOVAN CHIN currently serves as the Chief Financial Officer of Perfumania and as our Secretary and a member of our Board of Directors. He was appointed Chief Financial Officer of Perfumania in May 2000, has served as our Secretary since February 1999 and has served as a Director since March 1999. He also served as our Chief Financial Officer from February 1999 until May 2000. Prior to that time, Mr. Chin served as our Corporate Controller from May 1995 to February 1999 and Assistant Corporate Controller from May 1993 to May 1995. Previously, Mr. Chin was employed by Price Waterhouse LLP in its Miami audit practice. CLAIRE FAIR has served as Vice President of Human Resources since August 1996. From November 1993 to August 1996, she served as Director of Human Resources. Previously, she was the Director of Employee Relations with Sterling, Inc., a national jewelry specialty retailer company. ROBERT PLISKIN has served as a Director since October 1991. Mr. Pliskin served as President of Longines Wittnauer Watch Company from 1971 to 1980 when he became President of the Seiko Time Corporation, a distributor of watches, a position he held until 1987. In 1987 he became the President of Hattori Corporation of America, a distributor of watches and clocks, until his retirement in 1993. Mr. Pliskin is a member of our Audit, Compensation and Stock Option Committees. CAROLE ANN TAYLOR has served as a Director since June 1993. From 1987 to 1998, Ms. Taylor was the owner and president of the Bayside Company Store, a retail souvenir and logo store at Bayside Marketplace in Miami, Florida. During this time she has also been a partner of the Jardin Bresilien Restaurant also located at the Bayside Marketplace. Currently, Ms. Taylor is the owner of Miami To Go, Inc., a retail and wholesale logo and souvenir merchandising and silkscreening company. She is also a partner at Miami Airport Duty Free Joint Venture with Greyhound Leisure Services which owns and operates the 19 duty free stores at Miami International Airport. She serves as director of the Miami-Dade Chamber of Commerce, the Greater Miami Convention & Visitors Bureau and the Miami Film Festival. Ms. Taylor is a member of our Audit, Compensation and Stock Option Committees. DR. HORACIO GROISMAN has served as a Director since March 1999. Dr. Groisman has been a practicing physician since 1981, specializing in head and neck surgery, and currently has offices in Miami, Aventura and Hollywood, Florida. Dr. Groisman is a member of our Compensation and Stock Option Committees. He also serves as Vice-Chairman of the Board of Directors of Take To Auction.Com, Inc. ZALMAN LEKACH has served as a Director since November 1999. Mr. Lekach became a director and an executive in Parlux, S.A., a subsidiary of Parlux Fragrances, Inc. in May 1990. In May 1993, he resigned his executive position and owned and operated a company exporting foods and health/beauty aids to South America. In January of 1995, he rejoined Parlux as its chief operating officer and a director. In June 1996, Mr. Zalman Lekach also assumed the position of President of Parlux. In January 1999, Mr. Zalman Lekach resigned his position as president and chief operating officer of Parlux to pursue opportunities unrelated to the fragrance field. Messrs. Ilia Lekach and Zalman Lekach are brothers. Our officers are elected annually by the Board of Directors and serve at the discretion of the Board. Our directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10 3 4 percent of our Common Stock, to file with the Securities and Exchange Commission (the "SEC") initial reports of ownership and reports of changes in ownership of Common Stock. Officers, directors and greater than 10 percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended January 29, 2000, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10 percent beneficial owners were complied with except that three reports relating to three transactions were filed late by Jerome Falic, and each as the following failed to file one report for one transaction: Marc Finer, Claire Finer, Donovan Chin, Robert Pliskin, Carol Ann Taylor, Horacio Groisman and Zalman Lekach. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth compensation awarded to, earned by or paid to our (a) Chief Executive Officer, and (b) our four most highly compensated executive officers other than the Chief Executive Officer whose compensation exceeded $100,000 in fiscal 1999, for services rendered to us during fiscal year 1999, 1998 and 1997. The Chief Executive Officer and such other executive officers are sometimes hereafter collectively referred to as the "Named Executive Officers". SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION -------------------------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS --------------------------------------- -------------------------------------------------- OTHER ANNUAL RESTRICTED NAME AND FISCAL COMPENSATION STOCK LTIP ALL OTHER PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS($) OPTIONS(#) PAYOUTS($) ($) - ------------------ ----- --------- -------- ----------- ----------- ---------- ---------- ---------- Ilia Lekach (2) 1999 420,000 0 0 0 0 0 0 Chairman of the Board and 1998 0 0 500,000(3) 0 775,000(4) 0 0 Chief Executive Officer Jerome Falic 1999 322,757 0 0 0 0 0 0 President and 1998 259,034 0 0 0 334,500(4) 0 0 Vice Chairman of the Board 1997 246,700 0 0 0 0 0 0 Marc Finer 1999 225,571 0 0 0 150,000 0 0 President, Retail Division 1998 200,401 0 0 0 60,000(4) 0 0 1997 183,912 0 0 0 50,000 0 0 Claire Fair 1999 167,428 0 0 0 60,000 0 0 Vice President of Human 1998 116,980 0 0 0 26,500(4) 0 0 Resources 1997 114,980 0 0 0 15,000 0 0 Donovan Chin 1999 167,185 0 0 0 100,000 0 0 Chief Financial Officer, 1998 85,014 0 0 0 34,500(4) 0 0 Perfumania, Inc. and 1997 80,575 0 0 0 0 0 0 Secretary
- -------------- (1) The column for "Other Annual Compensation" does not include any amounts for executive perquisites and any other personal benefits, such as the cost of automobiles, life insurance and disability insurance because the aggregate dollar amount per executive is less than 10% of his annual salary and bonus. (2) Ilia Lekach was re-appointed as Chief Executive Officer and Chairman of the Board on October 28, 1998. (3) Amount reported represents consulting fees paid to Ilia Lekach during Fiscal 1998 prior to his employment with us. (4) Includes options repriced effective October 28, 1998 in the following amounts: Ilia Lekach (375,000); Jerome Falic (100,000); Marc Finer (60,000); Claire Fair (21,500); and Donovan Chin (14,500). 4 5 OPTION GRANTS TABLE The following table sets forth certain information concerning grants of stock options made during fiscal year 1999 to the Named Executive Officers.
INDIVIDUAL OPTION GRANTS IN FISCAL YEAR 1999 -------------------------------------------------------------------------------------------------------- POTENTIAL REALIZABLE % OF TOTAL VALUE AT ASSUMED OPTIONS ANNUAL RATES OF GRANTED TO STOCK PRICE APPRECIATION NUMBER OF EMPLOYEES EXERCISE FOR OPTION TERM OPTIONS IN FISCAL PRICE PER EXPIRATION ------------------------------ NAME GRANTED 1999 (1) SHARE DATE 5% (2) 10% (2) ---- ---------------- -------------- ------------- ------------- ------------- ------------- Marc Finer 150,000 24% $3.13 2009 $295,266 $748,262 Claire Fair 60,000 10% $3.13 2009 $118,106 $299,305 Donovan Chin 100,000 16% $3.13 2009 $196,844 $498,841
- ------------- (1) Total stock option grants during fiscal 1999 were 624,250. (2) In accordance with the rules of the Securities and Exchange Commission, the potential realizable values for such options shown in the table presented above are based on assumed rates of stock price appreciation of 5% and 10% compounded annually from the date the options were granted to their expiration date. These assumed rates of appreciation do not represent our estimate or projection of the appreciation of shares of our common stock. 5 6 STOCK OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE The following table sets forth certain information concerning option exercises in fiscal year 1999 and the number of unexercised stock options held by the Named Executive Officers as of January 29, 2000.
VALUE OF NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY NUMBER OF OPTIONS AT FISCAL OPTIONS AT FISCAL SHARES YEAR-END(#) YEAR-END($) ACQUIRED --------------------- ------------------- ON VALUE EXERCISABLE/ EXERCISABLE/ NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE - --------------- ---------------- -------------- --------------------- ------------------- Ilia Lekach -- -- 775,000/0 $3,475,063/0 Jerome Falic -- -- 334,500/0 $1,502,344/0 Marc Finer -- -- 177,000/0 $ 390,938/0 Claire Fair -- -- 77,000/0 $ 183,888/0 Donovan Chin -- -- 109,500/0 $ 222,906/0
DIRECTOR COMPENSATION We pay each nonemployee director a $6,500 annual retainer, and we reimburse them for their expenses in connection with their activities as directors. In addition, nonemployee directors are eligible to receive stock options under the Directors Stock Option Plan. The Directors Stock Option Plan currently provides for an automatic grant of an option to purchase 2,000 shares of our common stock upon a person's election as a director and an automatic grant of options to purchase 4,000 shares of our common stock upon such director's re-election to the Board, in both instances at an exercise price equal to the fair market value of the common stock on the date of the option grant. EMPLOYMENT AGREEMENTS Effective February 1, 1999, we entered into 3-year employment agreements with Ilia Lekach and Jerome Falic pursuant to which they will receive an annual salary of $400,000 and $318,347, respectively, subject to cost-of-living increases, or 5% if higher. The employment agreements provide that Mr. Lekach and Mr. Falic will continue to receive their annual salary until the expiration of the term of their employment agreements if their employment is terminated by us for any reason other than death, disability or cause (as defined in the employment agreements). The agreements contain a performance bonus plan which provides for additional compensation and grant of stock options, if we meet certain net income levels. The employment agreements also prohibit the employees from directly or indirectly competing with us during the term of their employment and for one year after termination of employment except in the case of our termination of employment without cause. Effective December 1999, we entered into 3-year employment agreements with Marc Finer, Claire Fair and Donovan Chin pursuant to which they will receive an annual salary of $215,000, $160,000 and $160,000, respectively, subject to specified increases. The employment agreements provide that Mr. Finer, Ms. Fair and Mr. Chin will continue to receive their salary until the expiration of the term of the employment agreements if their employment is terminated by us for any reason other than death, disability or cause (as defined in the employment agreements), as well as provisions for change in control. 6 7 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of May 24, 2000, information with respect to the beneficial ownership of our Common Stock by (i) each person known by us to beneficially own more than 5% of the outstanding shares of our Common Stock, (ii) each of our directors, (iii) each Named Executive Officer, and (iv) all of our directors and executive officers as a group.
COMMON STOCK BENEFICIALLY OWNED ------------------------------------- NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT - ------------------------------------ ------ ------- Ilia Lekach 1,459,995(1)(2)(3)(4) 15.8% Rachmil Lekach 775,125(1)(2)(4) 8.4% Jerome Falic 700,332(1)(3)(4) 7.6% Simon Falic 537,050(2)(4)(5) 5.8% Marc Finer 177,000(1)(4) 1.9% Donovan Chin 109,500(1)(4) 1.2% Claire Fair 75,000(1)(4) * A. Mark Young 50,000(1)(4) * Robert Pliskin 12,000(1)(4) * Carole A. Taylor 12,000(1)(4) * Dr. Horatio Groisman 6,000(1)(4) * Zalman Lekach 6,000(1)(4) * Parlux Fragrances, Inc. 1,512,406(6) 16.4% Eisenberg Partners, LLC 911,946(7) 9.77% Mark A. Rice 880,630(8) 9.9% All directors and executive officers as a group (10 persons) 2,610,827 28.3%
- ----------- * Less than 1%. (1) The address of each of the beneficial owner identified is 11701 NW 101st Road, Miami, Florida 33178. (2) Ilia Lekach, Simon Falic and Rachmil Lekach jointly own with their spouses the shares set forth opposite their respective names. (3) Includes 12,300 shares of Common Stock owned by Pacific Investment Group, a corporation wholly owned by Mr. Lekach. (4) Includes shares of Common Stock issuable upon the exercise of stock options currently exercisable or exercisable within 60 days of May 24, 2000 in the following amounts: Ilia Lekach (775,000); Rachmil Lekach (250,000); Jerome Falic (334,500); Robert Pliskin (12,000); Marc Finer (177,000); Donovan Chin (109,000); A. Mark Young (50,000); Claire Fair (77,000); Dr. Horatio Groisman (6,000); Zalman Lekach (6,000) and Carole A. Taylor (12,000). (5) The address of Simon Falic is 150 Harbor Way, Bal Harbour, Florida 33312. (6) The address of Parlux Fragrances, Inc. is 3725 S.W. 30th Avenue, Ft. Lauderdale, Florida 33154. (7) Based on the Schedule 13D dated May 22, 2000 filed with the SEC by Eisenberg Partners, L.L.C. ("Eisenberg"). Eisenberg is the manager or investment manager and beneficially owns all shares of the following entities: E.P. Opportunity Fund L.L.C. (352,023 shares), EP Opportunity Fund International Ltd. (22,966 shares), EP.com Fund L.L.C. (466,919 shares) and EP.com Fund International, Ltd. (70,038 shares). The address for each entity is 77 W. Wacker Drive, Chicago, Illinois 60601. (8) Based on the Schedule 13D dated May 4, 2000 filed with the SEC by Mark A. Rice. Mr. Rice is the sole member of the Managing Member which controls both Namax Corporation (123,420 shares) and The dotCom Fund, L.L.C. (757,210 shares). The address for each entity is 666 Dundee Road, Suite 1901, Northbrook, Illinois 60062. 7 8 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS RELATIONSHIP WITH PARLUX. Parlux Fragrances, Inc. is a public company engaged in the manufacture of fragrances. Ilia Lekach, our Chairman of the Board and Chief Executive Officer and one of our principal shareholders, is the chairman of the board of Parlux. During fiscal year 1999, we purchased approximately $30.1 million of merchandise from Parlux. We believe that our purchases of merchandise from Parlux were, except for credit terms, on terms no less favorable to us than could reasonably be obtained in arm's length transactions with independent third parties. The amount due to Parlux at January 29, 2000, excluding amounts owed under the subordinated note discussed below, was approximately $9,350,000. Amounts due to Parlux are non-interest bearing. On August 31, 1999, we entered into a stock purchase agreement with Parlux. The agreement called for the transfer of 1,512,406 shares of our common stock to Parlux in consideration for a partial reduction of our outstanding trade indebtedness balance of approximately $4.5 million. The transfer price was based on a per share price of $2.98, which approximated 90% of the closing price of our common stock for the previous 20 business days. We filed a registration statement to permit Parlux to resell these shares in April 2000; however, this registration statement is not effective as of the date hereof. As a result of the transaction, we recorded a loss of approximately $314,000 which was charged to cost of goods sold in the third quarter of fiscal year 1999. On October 4, 1999, we signed an $8,000,000 subordinated note agreement with Parlux, in exchange for an equal reduction in the amount of our outstanding trade indebtedness balance. The note is due on May 31, 2000 with various periodic principal payments and bears interest at prime plus 1%. The note is subordinate to all bank related indebtedness. As of January 29, 2000, we had paid $4,500,000 pursuant to the terms of the note. The outstanding amount of the indebtedness as of January 29, 2000 is included in our consolidated balance sheet as subordinated note payable, affiliate. RELATIONSHIP WITH TAKE TO AUCTION.COM, INC. In December 1999, we loaned $1 million to Take To Auction.Com, Inc., pursuant to the terms of a convertible promissory note. Ilia Lekach, our Chairman and Chief Executive Officer and Horacio Groisman, one of our Directors, are also the Chairman and Vice Chairman, respectively, of Take To Auction and beneficially own 24.06% and 8.59%, respectively, of the outstanding common stock of Take To Auction. Mr. Lekach's shares in Take To Auction are held in a corporation of which he is the sole shareholder. The principal balance of the note is payable on December 20, 2001, and interest, which accrues at a rate of six percent per annum is payable semi-annually on the 21st day of each June and December commencing June 21, 2000. We have the right to convert, for a period of 14 days after Take To Auction's initial public offering, all of the principal amount of the note into shares of the Take to Auction's common stock at a conversion price per share equal to the initial public offering price of Take To Auction's common stock. We currently expect Take To Auction to effect its initial public offering in June 2000. In March 2000, we loaned Take To Auction's an additional $1 million pursuant to the terms of a convertible promissory note. The terms of the note are the same as the December 1999 note described above, except that the principal balance is payable on March 8, 2002 and interest is payable semi-annually on the 9th day of each September and March, commencing September 9, 2000. Take To Auction also granted us warrants to purchase six hundred thousand shares of its common stock at its initial public offering price. The warrants are exercisable in whole or in part during the one year period following the initial public offering. RELATED PARTY INDEBTEDNESS. As of January 29, 2000, Ilia Lekach, our Chairman and Chief Executive Officer was indebted to us pursuant to unsecured notes in the amount of $1,532,649. The notes are unsecured, mature December 31, 2001 and bear an interest rate of prime plus two percent per annum. Principal and interest are payable in full at maturity. Total interest income recognized during fiscal year 1999 was approximately $70,000. 8 9 In October 1999, Rachmil Lekach, one of our principal shareholders issued us an unsecured promissory note in the principal amount of $756,000. As of January 29, 2000, he was indebted to us in the amount of $779,594, including interest. This note bears an interest rate of prime plus two percent per annum. The note, including accrued interest, was repaid in April 2000. 9 10 PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this report: (1) Financial Statements An index to financial statements for the fiscal years ended January 29, 2000, January 30, 1999 and January 31, 1998 appears on page 23. (2) Financial Statement Schedule The following statement schedule for the fiscal years ended January 29, 2000, January 30, 1999 and January 31, 1998 are submitted herewith: ITEM FORM 10-K NUMBER PAGE ------ Schedule II - Valuation and Qualifying Accounts and Reserves 43 All other financial schedules are omitted because they are not applicable, or the required information is otherwise shown in the financial statements or notes thereto. 10 11 (a) Exhibits:
EXHIBIT NUMBER DESCRIPTION ------ ----------- 2.1 Agreement and Plan of Merger, dated January 28, 2000, by and among (1) Perfumania, Inc., E Com Ventures, Inc. and E Com Sub, Inc. (Exhibit 2.1) 3.1 Amended and Restated Articles of Incorporation (Exhibit 3.1) (2) 3.2 Bylaws (Exhibit 3.2) (3) 4.1 Warrant Agreement between the Company and Josephthal, Lyon & Ross Incorporated (4) (Exhibit 4.1) 10.1 Amendments to the Loan and Security Agreements between the Company and LaSalle (5) National Bank dated July 29, 1994, and September 30, 1994 (Exhibit 10.3) 10.2 Amendments to the Loan and Security Agreements between the Company and LaSalle (6) National Bank dated March 29, 1996 (Exhibit 10.4) 10.3 1991 Stock Option Plan, as amended (Exhibit 10.1) (7) 10.4 1992 Directors Stock Option Plan, as amended (Exhibit 10.6) (6) 10.5 Regulation S 5% Convertible Debentures Agreement (Exhibit 10.7) (6) 10.6 Regulation S Stock Subscription Agreement (Exhibit 10.8) (6) 10.7 Amendments to the Loan and Security Agreements between LaSalle National Bank dated April 16, 1997 (8) 10.8 Executive Employment Agreements and Separation Agreements 10.8.1 Employment Agreement, dated as of February 1, 1999, between the Company and Jerome Falic (Exhibit 10.10(c)) (9) 10.8.2 Employment Agreement, dated as of February 1, 1999, between the Company and Ilia Lekach (Exhibit 10.10(d)) (9) 10.8.3 Separation Agreement, dated December 1, 1998, between the Company and Ron Friedman (Exhibit 10.10(e)) (9) 10.8.4 Separation Agreement, dated January 29, 1999, between the Company and Simon Falic (Exhibit 10.10(f)) (9) 10.8.5 Employment Agreement, dated as of December 24, 1999, between the Magnifique Parfumes & Cosmetics, Inc. and Marc Finer (Exhibit 10.10(g)) (14) 10.8.6 Employment Agreement, dated as of December 24, 1999, between the Company and Claire Fair (Exhibit 10.10(h)) (14) 10.8.7 Employment Agreement, dated as of December 24, 1999, between the Company and Donovan Chin (Exhibit 10.10(i)) (14) 10.9 Form of Subscription Agreement, dated March 22, 1999, between the Company and the investors set forth therein (Exhibit 10.11) (10) 10.10 Securities Purchase Agreement, dated April 28, 1999, between the Company and the investors set forth therein (Exhibit 10.12) (10) 10.11 Securities Purchase Agreement, dated July 8, 1999, between the Company and the investors set forth therein (Exhibit 10.13) (10) 10.12 Securities Purchase Agreement, dated March 9, 2000, between the Company and the investors set forth therein (Exhibit 10.15) (11) 10.13 Securities Purchase Agreement, dated March 27, 2000, between the Company and the investors set forth therein (Exhibit 10.16) (11) 10.14 Stock Purchase Agreement, dated August 31, 1999, by and between Parlux Fragrances, Inc. and the Company (Exhibit 10.14) (11) 10.15 Stock Purchase Agreement, dated April 29, 2000, by and among the Company, Zero.net, Inc. and Envision Development Corporation (Exhibit 2.1) (12) 21.1 Subsidiaries of the Registrant (13) 23.1 Consent of PricewaterhouseCoopers LLP (13) 27.1 Financial Data Schedule (13)
- ------------ (1) Incorporated by reference to the exhibit of the same description filed with the Company's Form 8-K dated February 1, 2000. (2) Incorporated by reference to the exhibit of the same description filed with the Company's 1993 Form 10-K (filed April 28, 1994). (3) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-1 (No. 33-46833). (4) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-1 (No. 33-43556). (5) Incorporated by reference to the exhibit of the same description filed with the Company's 1994 Form 10-K (filed April 20, 1995). (6) Incorporated by reference to the exhibit of the same description filed with the Company's 1995 Form 10-K (filed April 26, 1996). (7) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-8 (file number 333-30882) filed on February 22, 2000 (8) Incorporated by reference to the exhibit of the same description filed with the Company's 1996 Form 10-K (filed May 2, 1997). (9) Incorporated by reference to the exhibit of the same description filed with the Company's 1998 Form 10-K/A (filed on May 28, 1999). (10) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-1 (file number 333-80525). (11) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-3 (file number 333-35580) filed on April 24, 2000 (12) Incorporated by reference to the exhibit of the same description filed with the Company's Form 8-K dated May 10, 2000 (13) Previously filed with the Company's 1999 Form 10-K on May 15, 2000. (14) Filed herewith. (a) Reports on Form 8-K None 11 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. May 30, 2000. PERFUMANIA, INC. By: /s/ ILIA LEKACH ---------------------------------- Ilia Lekach, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ ILIA LEKACH Chairman of the Board and May 30, 2000 ----------------------------- Chief Executive Officer Ilia Lekach (Principal Executive Officer) /s/ JEROME FALIC President and Vice Chairman May 30, 2000 ----------------------------- of the Board Jerome Falic /s/ A. MARK YOUNG Chief Financial Officer May 30, 2000 ----------------------------- (Principal Accounting A. Mark Young Officer and Principal Financial Officer) /s/ DONOVAN CHIN Director May 30, 2000 ----------------------------- Donovan Chin /s/ MARC FINER Director May 30, 2000 ----------------------------- Marc Finer Director May 30, 2000 ----------------------------- Robert Pliskin /s/ CAROLE ANN TAYLOR Director May 30, 2000 ----------------------------- Carole Ann Taylor /s/ HORACIO GROISMAN, M.D. Director May 30, 2000 ----------------------------- Horacio Groisman, M.D. /s/ ZALMAN LEKACH Director May 30, 2000 ----------------------------- Zalman Lekach
12 EX-10.85 2 0002.txt EMPLOYMENT AGREEMENT - MARC FINER 1 EXHIBIT 10.85 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into, and shall be binding this 24th day of December, 1999, by and between Magnifique Parfumes & Cosmetics, Inc., a Florida corporation ("Employer") and Marc Finer ("Executive"). W I T N E S S E T H: WHEREAS, Employer, is engaged in the business of selling perfumes and cosmetics on a discount basis; and WHEREAS, Executive is experienced in the management and operation of such business and is professionally qualified to perform such services for the Employer; and WHEREAS, Employer desires to retain the services of the Executive; and WHEREAS, Executive is desirous of obtaining employment with the Employer on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Employer and Executive agree as follows: 1. Recitals, Representations and Warranties. The foregoing recitals are true and correct and are incorporated herein by this reference. In addition to the foregoing recitals, Executive represents that he has not been convicted of any crime, has not been declared insolvent and has not filed for bankruptcy. In addition to the foregoing recitals, Employer represents and warrants that the individual executing this Agreement has authority to do so. 2. Employment. In exchange for the Compensation (as hereinafter defined) and subject to the other terms and conditions hereinafter set forth, Employer hereby employs Executive, as its President - Retail Division, to perform the Executive Duties (as hereinafter defined) and Executive hereby accepts such employment. 3. Duties. The Executive shall perform such executive and administrative services in the running of the business of the Employer as the Employer's Board of Directors and/or the President/CEO may assign to the Executive during the Term (as hereinafter defined). a. Performance of Executive Duties & Adherence to Policies. During the Term, Executive shall render the Executive Duties exclusively for Employer, shall perform the Executive Duties to the best of his ability and shall operate Employer's business efficiently and profitably adhering, at all times, to the policies of the Employer and Perfumania. 4. Term. The term of the Agreement shall commence on December 24, 1999 and shall expire on December 24, 2002. 5. Compensation. In consideration of and as compensation in full for Executive's performance of the Executive Duties hereunder, Employer agrees to compensate Executive as follows: a. Salary. During the term of this Agreement, Employer shall pay Executive a gross annual salary of Two Hundred Fifteen Thousand Dollars ($215,000)("Salary"). Such Salary shall be paid by Employer in accordance with Employer's regular payroll practices. Employer shall be entitled to deduct or withhold from all Salary payable hereunder all amounts required to be deducted or withheld from same pursuant to state or federal law. b. Stock Option Plan: (1) Executive shall be granted 150,000 options of Perfumania, Inc., at a price equal to the price as of November 1, 1999. Such options shall vest immediately. (2) At the discretion of the CEO, Executive may be granted additional options. c. Expense Reimbursement & Insurance. Executive shall be reimbursed for business expenses and receive full health, disability and life insurance. 2 d. Vacation. Employee shall be entitled to take up to twenty (20) working days of vacation per twelve (12) month period during the Term. e. Automobile allowance. Executive shall be entitled to a monthly automobile allowance of $500. f. Cellular Telephone. Employee shall be entitled to the use of one portable cellular telephone. g. Increases In Salary. On August 12, 2000, Executive's salary shall be increased to $225,000, on August 12, 2001, Executive's salary shall be increased to $250,000, and on August 12, 2002, Executive's salary shall be increased to $275,000. 6. Early Termination of Contract. a. Early Termination. To the extent that the Company shall decide to terminate this agreement prior to December 24, 2002, Executive shall be entitled to compensation as defined in paragraph 5 (including salary, stock plan, insurance coverage, automobile allowance and cellular telephone) for the greater of twelve months or the remainder of the Term of the Agreement as if Executive was still employed and this agreement was in full effect. A termination of this Agreement shall be deemed to happen upon a significant change in Executive's duties and/or title and/or to the extent that providing such services would require a move from South Florida. b. Change in Control. To the extent that Employer undergoes a significant change in control, is acquired by another organization accompanied by a change in senior management, or merges with another organization accompanied by a change in senior management, all items under Section 5 (including salary, stock plan, insurance coverage, automobile allowance, cellular telephone and any other unexercised options), shall be doubled for the greater of the duration of this Agreement or 24 months. 7. The performance of this Agreement shall be unconditionally guaranteed by Perfumania, Inc. 8. Miscellaneous. a. Notices. All notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given only upon hand delivery thereof or upon the first business day after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: To Employer: Magnifique Parfumes & Cosmetics, Inc. 11701 N.W. 101 Road Miami, Florida 33178 To Executive: Marc Finer 19300 NW 10th Street Pembroke Pines, Florida 33029 or to such other address or such other person as any party shall designate, in writing, to the other for such purposes and in the manner hereinabove set forth. b. Accuracy of Statements. No representation or warranty contained in this Agreement, and no statement delivered or information supplied to any party pursuant hereto, contains an untrue statement of material fact or omits to state a material fact necessary in order to make the statements or information contained herein or therein not misleading. The representations and warranties made in this Agreement will be continued and will remain true and complete in all material respects and will survive the execution of the transactions contemplated hereby. c. Entire Agreement. This Agreement sets forth all the promises, covenants, agreements, conditions and understandings between the parties hereto, and supersedes all prior and contemporaneous agreements, understandings, inducements or conditions, expressed or implied, oral or written, except as herein contained. 2 3 d. Binding Effect; Survival & No Assignment. This Agreement shall be binding upon the parties hereto, their heirs, administrators, successors and assigns. This Agreement shall survive and remain effective during any bankruptcy of the Employer. Executive may not assign or transfer his interest herein, or delegate his Executive Duties hereunder, without the written consent of Employer. Any assignment or delegation of duties in violation of this provision shall be null and void. e. Amendment. The parties hereby irrevocably agree that no attempted amendment, modification, termination, discharge or change (collectively, "Amendment") of this Agreement shall be valid and effective, unless the parties shall agree in writing to such Amendment. f. No Waiver. No waiver of any provision of this Agreement shall be effective unless it is in writing and signed by the party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver. g. Gender and Use of Singular and Plural. All pronouns herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the party or parties, or their personal representatives, successors and assigns may require. h. Counterparts. This Agreement and any amendments may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. i. Headings. The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Agreement. j. Arbitration & Governing Law. Any controversy, claim or dispute arising out of or relating to this Agreement and/or Executive's employment with Employer shall be settled by arbitration in accordance with applicable rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This arbitration clause shall be exactly as the arbitration clause signed by all Perfumania employees. This Agreement shall be construed in accordance with the laws of the State of Florida and any proceeding arising between the parties in any manner pertaining or related to this Agreement shall, to the extent permitted by law, be held in Dade County, Florida. k. Further Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purposes of this Agreement. l. No Third Party Beneficiary. This Agreement is made solely and specifically among and for the benefit of the parties hereto, and their respective successors and assigns subject to the express provisions hereof relating to successors and assigns, and no other person shall have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third-party beneficiary or otherwise. m. Severability. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules, and regulations of the jurisdiction in which the parties do business. If any provision of this Agreement, or the application thereof to any person or circumstances shall, for any reason or to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law. n. Attorneys' Fees. In connection with any proceeding arising out of this Agreement, the prevailing party shall be entitled to recover costs and attorneys' fees, through all appeals, from the other party. o. Renegotiation. To the extent that Employer will make a significant acquisition or merger, this Agreement shall be renegotiated at terms no less favorable than this Agreement. p. Change in Control. To the extent that Employer undergoes a significant change in control, is acquired by another organization accompanied by a change in senior management, or merges with another organization accompanied by a change in senior management, all items under Section 5 and Section 6 above shall apply. 3 4 IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: GUARANTOR: By: /s/ Ilia Lekach ----------------------------------------- PERFUMANIA, INC. EMPLOYER: By: /s/ Ilia Lekach ----------------------------------------- MAGNIFIQUE PARFUMES & COSMETICS, INC. EXECUTIVE: By: /s/ Marc Finer ----------------------------------------- MARC FINER 4 EX-10.86 3 0003.txt EMPLOYMENT AGREEMENT - CLAIRE FAIR 1 EXHIBIT 10.86 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into, and shall be binding this 24th day of December, 1999, by and between the Perfumania, Inc., a Florida corporation ("Employer") and Claire Fair ("Executive"). W I T N E S S E T H: WHEREAS, Employer, is engaged in the business of selling perfumes and cosmetics on a discount basis; and WHEREAS, Executive is experienced in the management and operation of such business and is professionally qualified to perform such services for the Employer; and WHEREAS, Employer desires to retain the services of the Executive; and WHEREAS, Executive is desirous of obtaining employment with the Employer on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Employer and Executive agree as follows: 1. Recitals, Representations and Warranties. The foregoing recitals are true and correct and are incorporated herein by this reference. In addition to the foregoing recitals, Executive represents that he has not been convicted of any crime, has not been declared insolvent and has not filed for bankruptcy. In addition to the foregoing recitals, Employer represents and warrants that the individual executing this Agreement has authority to do so. 2. Employment. In exchange for the Compensation (as hereinafter defined) and subject to the other terms and conditions hereinafter set forth, Employer hereby employs Executive, as its Vice President of Human Resources, to perform the Executive Duties (as hereinafter defined) and Executive hereby accepts such employment. 3. Duties. The Executive shall perform such executive and administrative services in the running of the business of the Employer as the Employer's Board of Directors and/or the President/CEO may assign to the Executive during the Term (as hereinafter defined). a. Performance of Executive Duties & Adherence to Policies. During the Term, Executive shall render the Executive Duties exclusively for Employer, shall perform the Executive Duties to the best of his ability and shall operate Employer's business efficiently and profitably adhering, at all times, to the policies of the Employer and Perfumania. 4. Term. The term of the Agreement shall commence on December 24, 1999 and shall expire on December 24, 2002. 5. Compensation. In consideration of and as compensation in full for Executive's performance of the Executive Duties hereunder, Employer agrees to compensate Executive as follows: a. Salary. During the term of this Agreement, Employer shall pay Executive a gross annual salary of One Hundred Sixty Thousand Dollars ($160,000)("Salary"). Such Salary shall be paid by Employer in accordance with Employer's regular payroll practices. Employer shall be entitled to deduct or withhold from all Salary payable hereunder all amounts required to be deducted or withheld from same pursuant to state or federal law. b. Stock Option Plan: (1) Executive shall be granted 60,000 options of Perfumania, Inc., at a price equal to the price as of November 1, 1999. Such options shall vest immediately. (2) At the discretion of the CEO, Executive may be granted additional options. c. Expense Reimbursement & Insurance. Executive shall be reimbursed for business expenses and receive full health, disability and life insurance. 2 d. Vacation. Employee shall be entitled to take up to twenty (20) working days of vacation per twelve (12) month period during the Term. e. Automobile allowance. Executive shall be entitled to a monthly automobile allowance of $500. f. Increases In Salary. On August 12, 2000, August 12, 2001, and August 12, 2002, Executive's salary from the previous year shall be increased by the higher of 5% or C.P.I. 6. Early Termination of Contract. a. Early Termination. To the extent that the Company shall decide to terminate this agreement prior to December 24, 2002, Executive shall be entitled to compensation as defined in paragraph 5 (including salary, stock plan, insurance coverage and automobile allowance) for the greater of twelve months or the remainder of the Term of the Agreement as if Executive was still employed and this agreement was in full effect. A termination of this Agreement shall be deemed to happen upon a significant change in Executive's duties and/or title and/or to the extent that providing such services would require a move from South Florida. b. Change in Control. To the extent that Employer undergoes a significant change in control, is acquired by another organization accompanied by a change in senior management, or merges with another organization accompanied by a change in senior management, all items under Section 5 (including salary, stock plan, insurance coverage, automobile allowance, and any other unexercised options), shall be doubled for the greater of the duration of this Agreement or 24 months. 7. Miscellaneous. a. Notices. All notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given only upon hand delivery thereof or upon the first business day after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: To Employer: Perfumania, Inc. 11701 N.W. 101 Road Miami, Florida 33178 To Executive: Claire Fair 3330 N. 37th Street Hollywood, Florida 33021 or to such other address or such other person as any party shall designate, in writing, to the other for such purposes and in the manner hereinabove set forth. b. Accuracy of Statements. No representation or warranty contained in this Agreement, and no statement delivered or information supplied to any party pursuant hereto, contains an untrue statement of material fact or omits to state a material fact necessary in order to make the statements or information contained herein or therein not misleading. The representations and warranties made in this Agreement will be continued and will remain true and complete in all material respects and will survive the execution of the transactions contemplated hereby. c. Entire Agreement. This Agreement sets forth all the promises, covenants, agreements, conditions and understandings between the parties hereto, and supersedes all prior and contemporaneous agreements, understandings, inducements or conditions, expressed or implied, oral or written, except as herein contained. d. Binding Effect; Survival & No Assignment. This Agreement shall be binding upon the parties hereto, their heirs, administrators, successors and assigns. This Agreement shall survive and remain effective during any bankruptcy of the Employer. Executive may not assign or transfer his interest herein, or 2 3 delegate his Executive Duties hereunder, without the written consent of Employer. Any assignment or delegation of duties in violation of this provision shall be null and void. e. Amendment. The parties hereby irrevocably agree that no attempted amendment, modification, termination, discharge or change (collectively, "Amendment") of this Agreement shall be valid and effective, unless the parties shall agree in writing to such Amendment. f. No Waiver. No waiver of any provision of this Agreement shall be effective unless it is in writing and signed by the party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver. g. Gender and Use of Singular and Plural. All pronouns herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the party or parties, or their personal representatives, successors and assigns may require. h. Counterparts. This Agreement and any amendments may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. i. Headings. The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Agreement. j. Arbitration & Governing Law. Any controversy, claim or dispute arising out of or relating to this Agreement and/or Executive's employment with Employer shall be settled by arbitration in accordance with applicable rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This arbitration clause shall be exactly as the arbitration clause signed by all Perfumania employees. This Agreement shall be construed in accordance with the laws of the State of Florida and any proceeding arising between the parties in any manner pertaining or related to this Agreement shall, to the extent permitted by law, be held in Dade County, Florida. k. Further Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purposes of this Agreement. l. No Third Party Beneficiary. This Agreement is made solely and specifically among and for the benefit of the parties hereto, and their respective successors and assigns subject to the express provisions hereof relating to successors and assigns, and no other person shall have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third-party beneficiary or otherwise. m. Severability. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules, and regulations of the jurisdiction in which the parties do business. If any provision of this Agreement, or the application thereof to any person or circumstances shall, for any reason or to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law. n. Attorneys' Fees. In connection with any proceeding arising out of this Agreement, the prevailing party shall be entitled to recover costs and attorneys' fees, through all appeals, from the other party. o. Renegotiation. To the extent that Employer will make a significant acquisition or merger, this Agreement shall be renegotiated at terms no less favorable than this Agreement. p. Change in Control. To the extent that Employer undergoes a significant change in control, is acquired by another organization accompanied by a change in senior management, or merges with another organization accompanied by a change in senior management, all items under Section 5 and Section 6 above shall apply. 3 4 IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: EMPLOYER: By: /s/ Ilia Lekach -------------------------------------- PERFUMANIA, INC. EXECUTIVE: By: /s/ Claire Fair -------------------------------------- CLAIRE FAIR 4 EX-10.87 4 0004.txt EMPLOYMENT AGREEMENT - DONOVAN CHIN 1 EXHIBIT 10.87 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into, and shall be binding this 24th day of December, 1999, by and between the Perfumania, Inc., a Florida corporation ("Employer") and Donovan Chin ("Executive"). W I T N E S S E T H: WHEREAS, Employer, is engaged in the business of selling perfumes and cosmetics on a discount basis; and WHEREAS, Executive is experienced in the management and operation of such business and is professionally qualified to perform such services for the Employer; and WHEREAS, Employer desires to retain the services of the Executive; and WHEREAS, Executive is desirous of obtaining employment with the Employer on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Employer and Executive agree as follows: 1. Recitals, Representations and Warranties. The foregoing recitals are true and correct and are incorporated herein by this reference. In addition to the foregoing recitals, Executive represents that he has not been convicted of any crime, has not been declared insolvent and has not filed for bankruptcy. In addition to the foregoing recitals, Employer represents and warrants that the individual executing this Agreement has authority to do so. 2. Employment. In exchange for the Compensation (as hereinafter defined) and subject to the other terms and conditions hereinafter set forth, Employer hereby employs Executive, as its Chief Financial Officer, to perform the Executive Duties (as hereinafter defined) and Executive hereby accepts such employment. 3. Duties. The Executive shall perform such executive and administrative services as is expected from a Chief Financial Officer. During the Term (as hereinafter defined), the Executive shall report directly to the Chief Executive Officer of Perfumania, Inc. a. Performance of Executive Duties & Adherence to Policies. During the Term, Executive shall render the Executive Duties exclusively for Employer, shall perform the Executive Duties to the best of his ability and shall operate Employer's business efficiently and profitably adhering, at all times, to the policies of the Employer and Perfumania. 4. Term. The term of the Agreement shall commence on December 24, 1999 and shall expire on December 24, 2002. 5. Compensation. In consideration of and as compensation in full for Executive's performance of the Executive Duties hereunder, Employer agrees to compensate Executive as follows: a. Salary. Beginning on December 24, 1999, Employer shall pay Executive a gross annual salary of One-Hundred Thousand Dollars ($160,000)("Salary"). Such Salary shall be paid by Employer in accordance with Employer's regular payroll practices. Employer shall be entitled to deduct or withhold from all Salary payable hereunder all amounts required to be deducted or withheld from same pursuant to state or federal law. b. Withholding. Employer shall be entitled to deduct or withhold from all bonus payments paid pursuant to this Paragraph 5.b. all amounts required to be deducted or withheld from same pursuant to state or federal law. 2 c. Stock Option Plan: (1) Executive shall be granted 100,000 options, at a price equal to the closing market price as of November 1, 1999. Such options shall be fully vested as of the date of this Agreement. (2) At the discretion of the CEO, Executive may be granted additional options. d. Expense Reimbursement & Insurance. Executive shall be reimbursed for business expenses and receive full health, disability and life insurance. e. Car allowance. Executive shall receive, on a monthly basis, a $500 car allowance. f. Vacation. Employee shall be entitled to take up to twenty (20) working days of vacation per twelve (12) month period during the Term. g. Increases In Salary. On July 1, 2000, Executive's salary from the previous year shall be increased to an annual salary of $175,000, effective July 1, 2001, Executive's salary from the previous year shall be increased to an annual salary of $190,000 and effective July 1, 2002, Executive's salary from the previous year shall be increased to an annual salary of $200,000. 6. a. Early Termination of Contract. To the extent that the Company shall decide to terminate this agreement prior to December 24, 2002, Executive shall be entitled to compensation as defined in paragraph 5 (including salary, bonus, stock plan, 401K and insurance coverage) for the greater of twelve months or the remainder of the Term, and all unvested stock options shall vest immediately. A termination of this Agreement shall be deemed to happen upon a change in Executive's duties and/or title and/or to the extent that providing such services would require a move from South Florida. b. Change in Control. To the extent that Employer undergoes a significant change in control, is acquired by another organization accompanied by a change in senior management, or merges with another organization accompanied by a change in senior management, all items under Section 5 (including salary, any other unexercised stock options, insurance coverage, automobile allowance), shall be doubled for the greater of the duration of this Agreement or 24 months. 7. Miscellaneous. a. Notices. All notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given only upon hand delivery thereof or upon the first business day after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: To Employer: Perfumania, Inc. 11701 N.W. 101 Road Miami, Florida 33178 To Executive: Donovan Chin 324 NW 107 Ave. Pembroke Pines, FL 33026 or to such other address or such other person as any party shall designate, in writing, to the other for such purposes and in the manner hereinabove set forth. b. Accuracy of Statements. No representation or warranty contained in this Agreement, and no statement delivered or information supplied to any party pursuant hereto, contains an untrue statement of material fact or omits to state a material fact necessary in order to make the statements or information contained herein or therein not misleading. The representations and warranties made in this Agreement will be continued and will remain true and complete in all material respects and will survive the execution of the transactions contemplated hereby. 2 3 c. Entire Agreement. This Agreement sets forth all the promises, covenants, agreements, conditions and understandings between the parties hereto, and supersedes all prior and contemporaneous agreements, understandings, inducements or conditions, expressed or implied, oral or written, except as herein contained. d. Binding Effect; Survival & No Assignment. This Agreement shall be binding upon the parties hereto, their heirs, administrators, successors and assigns. This Agreement shall survive and remain effective during any bankruptcy of the Employer. Executive may not assign or transfer his interest herein, or delegate his Executive Duties hereunder, without the written consent of Employer. Any assignment or delegation of duties in violation of this provision shall be null and void. e. Amendment. The parties hereby irrevocably agree that no attempted amendment, modification, termination, discharge or change (collectively, "Amendment") of this Agreement shall be valid and effective, unless the parties shall agree in writing to such Amendment. f. No Waiver. No waiver of any provision of this Agreement shall be effective unless it is in writing and signed by the party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver. g. Gender and Use of Singular and Plural. All pronouns herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the party or parties, or their personal representatives, successors and assigns may require. h. Counterparts. This Agreement and any amendments may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. i. Headings. The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Agreement. j. Arbitration & Governing Law. Any controversy, claim or dispute arising out of or relating to this Agreement and/or Executive's employment with Employer shall be settled by arbitration in accordance with applicable rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This arbitration clause shall be exactly as the arbitration clause signed by all Perfumania employees. This Agreement shall be construed in accordance with the laws of the State of Florida and any proceeding arising between the parties in any manner pertaining or related to this Agreement shall, to the extent permitted by law, be held in Dade County, Florida. k. Further Assurances. The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purposes of this Agreement. l. No Third Party Beneficiary. This Agreement is made solely and specifically among and for the benefit of the parties hereto, and their respective successors and assigns subject to the express provisions hereof relating to successors and assigns, and no other person shall have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third-party beneficiary or otherwise. m. Severability. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules, and regulations of the jurisdiction in which the parties do business. If any provision of this Agreement, or the application thereof to any person or circumstances shall, for any reason or to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law. n. Attorneys' Fees. In connection with any proceeding arising out of this Agreement, the prevailing party shall be entitled to recover costs and attorneys' fees, through all appeals, from the other party. 3 4 o. Change in Control. To the extent that Employer undergoes a significant change in control, is acquired by another organization accompanied by a change in senior management, or merges with another organization accompanied by a change in senior management, all items under Section 5 and Section 6 above shall apply. . IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: EMPLOYER: PERFUMANIA, INC. By: /s/ Ilia Lekach --------------------------------------- Ilia Lekach, Chief Executive Officer EXECUTIVE: By: /s/ Donovan Chin --------------------------------------- Donovan Chin, Chief Financial Officer 4 -----END PRIVACY-ENHANCED MESSAGE-----