-----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, V9H01Pzx38IXkeT4rZn7fT8uCvzvHSREH+JqxlxTiU5dfSwgwCmlfRoqpXdB30/g XxjHOd+A8rz/HHFcL4nYKQ== 0000950144-99-006883.txt : 19990624 0000950144-99-006883.hdr.sgml : 19990624 ACCESSION NUMBER: 0000950144-99-006883 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19990130 FILED AS OF DATE: 19990528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERFUMANIA INC CENTRAL INDEX KEY: 0000880460 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 650026340 STATE OF INCORPORATION: FL FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-19714 FILM NUMBER: 99637824 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 10-K/A 1 PERFUMANIA FORM 10-K/A 1-30-99 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 30, 1999 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 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 April 15, 1999, the number of shares of the registrant's Common Stock outstanding was 7,397,360. The aggregate market value of the Common Stock held by non affiliates of the registrant as of April 15, 1999 was approximately $10.8 million, based on the closing price of the Common Stock ($2.34) 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 50 Chairman of the Board and Chief Executive Officer Jerome Falic 35 President and Vice Chairman of the Board Marc Finer 37 President of the Retail Division and Director Donovan Chin 32 Chief Financial Officer, Secretary and Director Claire Fair 39 Vice President of Human Resources Robert Pliskin 75 Director Carole Ann Taylor 53 Director Dr. Horatio Groisman 46 Director ILIA LEKACH is a co-founder of the Company and was the Company's Chief Executive Officer and Chairman of the Board from its incorporation in 1988 until April 1994. Mr. Lekach was re-appointed the Company's Chief Executive Officer and Chairman of the Board on October 28, 1998. Mr. Lekach is also Chairman of the Board and Chief Executive Officer of Parlux Fragrances, Inc. ("Parlux"), a publicly traded manufacturer of fragrance and related products. In August 1996, Mr. Lekach became an officer and director with L.Luria & Son, Inc., ("Luria"), a publicly traded specialty discount retailer. On August 13, 1997, Luria filed for relief under Chapter 11 of the Bankruptcy Code and has since been liquidated. See "Certain Relationships and Related Transactions." JEROME FALIC was appointed President on October 28, 1998. Mr. Falic has been a Vice President of the Company since the Company's inception and a Director of the Company since August 1994. Mr. Falic was appointed the Company's Vice Chairman of the Board in September 1994. MARC FINER has been the President of the Company'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. DONOVAN CHIN was appointed Chief Financial Officer and Secretary of the Company in February of 1999. Prior to this appointment, Mr. Chin served as Corporate Controller of the Company from May 1995 to February 1999 and as 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 was appointed Vice President of Human Resources in August 1996. From November 1993 to August 1996, she served as the Company's Director of Human Resources. Previously, Ms. Fair was the Director of Employee Relations with Sterling, Inc. ROBERT PLISKIN was appointed a Director of the Company in 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 position he held until 1987. In 1987 Mr. Pliskin became the President of Hattori 2 3 Corporation of America, a distributor of watches and clocks, until his retirement in 1993. Mr. Pliskin is a member of the Company's Audit Committee and Compensation Committee. CAROLE ANN TAYLOR was appointed a Director of the Company in 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. She was also a partner of Jardin Bresilien restaurant located at 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 is Miami Airport Duty Free Joint Venture with Greyhound Leisure Services which owns and operates the 19 duty free stores at Miami International Airport. Ms. Taylor is a Director of the Greater Miami Convention & Visitors Bureau, the Academy of Travel and Tourism, the Omni Advisory Board, the Performing Arts Trust Foundation and the Greater Miami Chamber of Commerce Board of Trustees. Ms. Taylor is a member of the Company's Audit Committee, Stock Option Committee and Compensation Committee. DR. HORATIO GROISMAN was appointed a Director of the Company in 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 the Company's Stock Option and Compensation Committee. The Company's officers are elected annually by the Board of Directors and serve at the discretion of the Board. The Company's 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 the Company's directors and executive officers, and persons who own more than 10 percent of the Company's 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 the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended January 30, 1999, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10 percent beneficial owners were complied with except that one report relating to one transaction was filed late by each Jerome Falic and Robert Pliskin, respectively and two reports representing two transactions for Claire Fair have not been filed as of May 28, 1999. On October 28, 1999, the Company repriced the outstanding options issued under the Company's 1991 Stock Option Plan. As of May 28, 1999 each of the following individuals has not met the filing requirement with respect to those options which were cancelled in connection with the repricing: Ilia Lekach, Jerome Falic, Marc Finer, Claire Fair, Simon Falic, Ron Friedman, Robert Pliskin, and Carole A. Taylor. 3 4 ITEM 11. EXECUTIVE COMPENSATION The following table sets forth compensation awarded to, earned by or paid to the Company's (a)Chief Executive Officer, (b) the Company's four most highly compensated executive officers other than the Chief Executive Officer whose compensation exceeded $100,000 in fiscal 1998, for services rendered to the Company during fiscal year 1998, 1997 and 1996 and (c) those individuals for whom disclosures would have been provided but for the fact that those individual were not serving as executive officers of the Company at the end of the fiscal year. The Chief Executive Officer and such other executive officers are sometimes hereafter collectively referred to as the "Named Executive Officers". SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ---------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS ---------------------------------------------- --------------------- ---------- OTHER RESTRICTED NAME AND FISCAL ANNUAL STOCK LTIP ALL OTHER PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARD(S) OPTIONS(#) PAYOUTS($) COMPENSATION($) - ------------------------------------------------------------------------------------------------------------------------------------ Ilia Lekach (2) 1998 $0 $0 500,000 (3) $0 775,000(8) $0 $0 Chairman of the Board and Chief Executive Officer Jerome Falic (4) 1998 $259,034 $0 0 $0 334,500(8) $0 $0 President and 1997 $246,700 $0 0 $0 0 $0 $0 Vice Chairman of the Board 1996 $236,250 $61,000 0 $0 0 $0 $0 Marc Finer 1998 $200,401 $0 0 $0 60,000(8) $0 $0 President, Retail Division 1997 $183,912 $0 0 $0 50,000 $0 $0 1996 $169,962 $22,500 0 $0 0 $0 $0 Claire Fair 1998 $116,855 $0 0 $0 26,500(8) $0 $0 Vice President of Human 1997 $114,980 $0 0 $0 15,000 $0 $0 Resources 1996 $85,809 $0 0 $0 3,000 $0 $0 Simon Falic (5) 1998 $316,598 $0 0 $0 154,500(8) $0 1,303,588 (6) 1997 $304,813 $0 0 $0 0 $0 $0 1996 $287,163 $75,000 0 $0 0 $0 $0 Ron A. Friedman (7) 1998 $228,981 $0 0 $0 429,000(8) $0 826,232 (6) 1997 $246,700 $0 0 $0 0 $0 $0 1996 $236,250 $61,000 0 $0 0 $0 $0
(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 the Company's 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 by the Company. (4) Jerome Falic was appointed President following the resignation of Simon Falic on January 29, 1999. (5) Mr. Simon Falic resigned on January 29, 1999 at which time Mr. Falic served the Company in the following capacities: President, Chief Financial Officer, Chief Operations Officer, Treasurer and Secretary. (6) Pursuant to and in accordance with the individual separation agreements with the aforementioned Named Executive Officers, each shall receive the amount indicated over a 36-month term. See "Separation Agreements" below. (7) Mr. Friedman resigned on October 28, 1998 at which time he served the Company in the following capacities: Chief Financial Officer, Chief Operating Officer, Treasurer and Secretary. (8) 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); Simon Falic (100,000); and Ron Friedman (429,000). 4 5 OPTION GRANTS TABLE The following table sets forth certain information concerning grants of stock options made during fiscal year 1998 to the Named Executive Officers.
INDIVIDUAL OPTION GRANTS IN FISCAL YEAR 1998 -------------------------------------------------------------------------------------------------------- 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 1998 (4) SHARE DATE 5% (1) 10% (1) ---- ---------------- -------------- ------------- ------------- ------------- ------------- Ilia Lekach 400,000 21% $0.41 2008 $103,156 $260,760 375,000 (2) 20% $0.50 2008 $117,938 $298,125 Jerome Falic 34,500 (3) 4% $0.50 2008 $10,850 $27,428 200,000 25% $0.41 2008 $51,578 $130,380 100,000 (2) 5% $0.50 2008 $31,450 $79,500 Marc Finer 60,000 (2) 3% $0.50 2008 $18,870 $47,700 Claire Fair 5,000 (3) * $0.50 2008 $1,573 $3,975 21,500 (2) 1% $0.50 2008 $6,762 $17,093 Simon Falic 54,500 (3) 3% $0.50 2008 $71,140 $43,328 100,000 (2) 13% $0.50 2008 $31,450 $79,500
* Indicates that amount is less than 1%. (1) 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 the Company's estimate or projection of the appreciation of shares of common stock of the Company. (2) The indicated options were initially granted prior to fiscal 1998 and were subject to the Company's repricing effective October 28, 1998. Pursuant to repricing, these options were cancelled and reissued with an exercise price of $0.50. (3) The indicated options were granted during fiscal 1998 prior to the repricing and were subject to the Company's repricing. Pursuant to repricing, these options were cancelled and reissued with an exercise price of $0.50. (4) Total stock option grants during fiscal 1998 were 1,926,750 of which 1,130,600 represents options cancelled and subsequently re-granted as part of the repricing. 5 6 STOCK OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE The following table sets forth certain information concerning option exercises in fiscal year 1998 and the number of unexercised stock options held by the Named Executive Officers as of January 30, 1999.
VALUE OF NUMBER OF UNEXERCISED NUMBER OF UNEXERCISED IN-THE-MONEY SHARES OPTIONS AT FISCAL OPTIONS AT FISCAL ACQUIRED YEAR-END(#) YEAR-END($) ON VALUE EXERCISABLE/ EXERCISABLE/ NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE - ----------------------- -- ---------------- --- -------------- -- --------------------- --- ------------------- Ilia Lekach -- -- 775,000/0 $8,061,938/0 Jerome Falic -- -- 334,500/0 $2,439,386/0 Marc Finer 33,000 $120,375 27,000/0 $ 280,868/0 Claire Fair 9,500 $ 97,532 9,500/7,500 $98,824/78,019 Simon Falic -- -- 154,500/0 $1,607,186/0 Ron Friedman 429,000 $175,890 -- --
DIRECTOR COMPENSATION The Company pays each nonemployee director a $6,500 annual retainer and reimburses such persons for their expenses in connection with their activities as directors of the Company. 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 Common Stock upon a person's election as a director of the Company and an automatic grant of options to purchase 4,000 shares of Common Stock upon such persons re-election as a director of the Company, in both instances at an exercise price equal to the fair market value of the Common Stock on the date of grant. EMPLOYMENT AGREEMENTS Effective February 1, 1999, the Company 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 the Company 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 the Company meets certain net income levels. The employment agreements also prohibit the employees from directly or indirectly competing with the Company during the term of their employment and for one year after termination of employment except in the case of the Company's termination of employment without cause. Effective August 1996, the Company entered into 3-year employment agreements with Marc Finer and Claire Fair, pursuant to which they will receive an annual salary of $175,000 and $100,000, respectively, subject to cost-of-living increases, or 5% if higher. The employment agreements provide that Mr. Finer and Ms. Fair will continue to receive their salary until the expiration of the term of the employment agreements if their employment is terminated by the Company 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 the Company meets certain net income levels. The employment agreements also prohibit the employee from directly or indirectly competing with the Company during the term of their employment and for one year 6 7 after termination of employment except in the case of the Company's termination of employment without cause. SEPARATION AGREEMENTS Pursuant to a separation agreement entered into between Ron Friedman and the Company, upon the tendering of Mr. Friedman's resignation, the following payments will be made pursuant to and in consideration of this agreement, such payments being subject to applicable withholding taxes: a $826,232 severance payment, of which $119,046 was paid through January 1999 and the balance of which is payable in monthly installments of $20,136 from February through October 1999 and $18,948 from November 1999 through November 2001. Mr. Friedman will continue to receive health, dental and life insurance coverage, on the same basis as prior to his resignation for an additional 36 months. Additionally, the Company shall convert all previously granted options into shares of the Company's common stock. Pursuant to a separation agreement entered into between Simon Falic and the Company, upon the tendering of Mr. Falic's resignation, the following payments will be made pursuant to and in consideration of this agreement, such payments being subject to applicable withholding taxes: a $1,303,588 severance payment, of which $300,000 was paid in January 1999 and the balance of which is payable in monthly installments of $26,529 during fiscal 1999, $27,855 during fiscal 2000 and $29,248 during fiscal 2001. Mr. Falic will continue to receive health, dental and life insurance coverage, on the same basis as prior to his resignation for an additional 36 months. 7 8 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of May 24, 1999, information with respect to the beneficial ownership of the Company's Common Stock by (i) each person known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock, (ii) each director of the Company, (iii) each Named Executive Officer, and (iv) all directors and executive officers of the Company as a group.
COMMON STOCK BENEFICIALLY OWNED ----------------------------------------------------- SHARES PERCENT ------------------ ---------- NAME AND ADDRESS OF BENEFICIAL OWNER (1) Ilia Lekach 1,459,995(2)(3)(4) 19.7% Simon Falic 683,050(2)(4) 9.2% Rachmil Lekach 675,125(2)(4) 9.1% Jerome Falic 923,230(3)(4) 12.5% Ron A. Friedman - * Marc Finer 27,000(4) * Claire Fair 18,000(4) * Robert Pliskin 4,000(4) * Carole A. Taylor 3,800(4) * Donovan Chin 9,500(4) * Dr. Horatio Groisman 2,000(4) * All directors and executive officers as a group 2,444,525 33.0% (9 persons)
*Less than 1%. (1) The address of each of the beneficial owners identified is 11701 NW 101st Road, Miami, Florida 33178, except for Simon Falic and Ron Friedman. (2) Ilia Lekach, Simon Falic, 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 in the following amounts: Ilia Lekach (775,000); Rachmil Lekach (150,000); Jerome Falic (334,500); Robert Pliskin (4,000); Marc Finer (27,000); Donovan Chin (9,500); Dr. Horatio Groisman (2,000); Claire Fair (17,000); and Carole A. Taylor (3,800). 8 9 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS RELATIONSHIP WITH PARLUX. Parlux Fragrances, Inc. ("Parlux") is a public company engaged in the manufacture of fragrances. Ilia Lekach, the Company's Chairman of the Board and Chief Executive Officer, and one of the Company's principal shareholders, is the Chairman of the Board of Parlux. During fiscal year 1998, the Company purchased approximately $24.3 million of merchandise from Parlux, representing approximately 27% of the Company's total purchases. The Company believes that its purchases of merchandise from Parlux, were, except for credit terms, on terms no less favorable to the Company than could reasonably be obtained in arm's length transactions with independent third parties. RELATIONSHIP WITH L. LURIA & SON, INC. L. Luria & Son, Inc, ("Luria's") is a public company that was a specialty discount retailer selling a broad line of products. Ilia Lekach, the Company's Chairman of the Board and Chief Executive Officer, and one of the Company's principal shareholders, was the Chairman of the Board of Luria's. During fiscal year 1997, the Company sold approximately $2.0 million of merchandise to Luria's, representing approximately 1% of the Company's total sales. The Company believes that its sales of merchandise to Luria's, were, except for credit terms, on terms no less favorable to the Company than could reasonably be obtained in arm's length transactions with independent third parties. During August 1997, Luria's filed for relief under Chapter 11 of the United States Bankruptcy Code. The Company is an unsecured creditor of Luria's and in fiscal year 1997 the Company wrote off receivables from Luria's in the amount of $1.2 million. The Company has been characterized as an insider in the liquidating plan of reorganization filed on April 6, 1998 by Luria's in the United States Bankruptcy Court, Southern District of Florida. In October 1998, the committee of unsecured creditors in Luria's bankruptcy proceedings filed a complaint with the United States Bankruptcy Court, Southern District of Florida, to recover substantial funds from the Company. The complaint alleges that Luria's made preference payments, as defined by the Bankruptcy Court, to the Company and seeks recovery of said preference payments, as well as disallowing any and all claims of the Company against Luria's until full payment of the preference payments have been made. Management cannot presently predict the outcome of these matters, although management believes, upon the advice of legal counsel, that the Company would have meritorious defenses and that the ultimate resolution of these matters should not have a materially adverse effect on the Company's financial position or result of operations. RELATED PARTY INDEBTEDNESS. From time to time the Company has borrowed money for working capital purposes from its principal shareholders and executive officers and members of their immediate families. The highest aggregate amounts of the Company's indebtedness to such persons during fiscal year 1998, amount outstanding at January 30, 1999, the maturity date of such indebtedness and the interest rate payable by the Company at January 30, 1999, were as set forth in the following table:
HIGHEST AMOUNT AMOUNT ANNUAL OUTSTANDING OUTSTANDING AT PAYMENT INTEREST DURING FISCAL YEAR JANUARY 30, 1999 DATE RATE -------------------- -------------------- ------------------ -------------- Israel Friedman (1) $786,483 $0 November 1998 Prime plus 2%
(1) Father of Ron A. Friedman, the Company's previous Chief Financial Officer, Chief Operating Officer and Secretary. As of January 30, 1999, Ilia Lekach was indebted to the Company pursuant to an unsecured note, in the amount of $457,243 issued in connection with his purchase of a condominium from the Company in October 1991. The note accrues interest at the rate of 9.5% and matures on December 31, 2000. Prior to becoming an employed as the Company's Chief Executive Officer effective February 1, 1999, Ilia Lekach provided consulting services to the Company. The total consulting fees paid to this Mr. Lekach during 1998 was $500,000. 9 10 (3) Exhibits
Page Number or Incorporated by Exhibit Description Reference From - ------- ----------- --------------- 3.1 Amended and Restated Articles of Incorporation (1) 3.2 Bylaws (2) 4.1 Warrant Agreement between the Company and Josephthal, Lyon & Ross Incorporated (3) 10.1 Executive Compensation Plans and Arrangements (5) (a) Employment Agreement, dated as of February 1, 1995, between the Company and Simon Falic (b) Employment Agreement, dated as of February 1, 1995, between the Company and Jerome Falic (c) Employment Agreement, dated as of February 1, 1995, between the Company and Ron Friedman (d) Consulting Agreement, dated as of January 1, 1994, between the Company and Rachmil Lekach (e) Consulting Agreement, dated as of May 2, 1995, between the Company and Ilia Lekach 10.3 Amendments to the Loan and Security Agreements between the Company and LaSalle National Bank dated July 29, 1994, and September 30, 1994 (5) 10.4 Amendments to the Loan and Security Agreements between the Company and LaSalle National Bank dated March 29, 1996 (6) 10.5 1991 Stock Option Plan, as amended (6) 10.6 1992 Directors Stock Option Plan, as amended (6) 10.7 Regulation S 5% Convertible Debentures Agreement (6) 10.8 Regulation S Stock Subscription Agreement (6) 10.9 Amendments to the Loan and Security Agreements between LaSalle National Bank dated April 16, 1997 (7) 10.10 Executive Employment Agreements and Separation Agreements (10) (a) Employment Agreement, dated as of June 21, 1996, between the Company and Claire Fair (b) Employment Agreement, dated as of August 11, 1997, between the Company and Marc Finer (c) Employment Agreement, dated as of February 1, 1999, between the Company and Jerome Falic (d) Employment Agreement, dated as of February 1, 1999, between the Company and Ilia Lekach (e) Separation Agreement, dated December 1, 1998, between the Company and Ron Friedman (f) Separation Agreement, dated January 29, 1999, between the Company and Simon Falic 21.1 Subsidiaries of the Registrant (6) 23.1 Consent of PricewaterhouseCoopers LLP (9) 27.1 Financial Data Schedule (9)
10 11 (1) Incorporated by reference to the exhibit of the same description filed with the Company's 1993 Form 10-K (filed April 28, 1994). (2) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-1 (No. 33-46833). (3) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-1 (No. 33-43556). (4) Incorporated by reference to the exhibit of the same description filed with the Company's Registration Statement on Form S-8 (filed October 13, 1994). (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 1996 Form 10-K (filed May 2, 1997) (8) Incorporated by reference to the exhibit of the same description filed with the Company's 1997 Form 10-K (filed May 28, 1998) (9) Incorporated by reference to the exhibit of the same description filed with the Company's 1998 Form 10-K (filed April 30, 1999). (10) Filed herewith 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 28, 1999 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 28, 1999 - ------------------------------- Chief Executive Officer Ilia Lekach /s/ Jerome Falic President and Vice Chairman May 28, 1999 - ------------------------------- of the Board Jerome Falic /s/ Donovan Chin Chief Financial Officer May 28, 1999 - ------------------------------- and Director Donovan Chin /s/ Marc Finer President of the Retail Division May 28, 1999 - ------------------------------- and Director Marc Finer /s/ Robert Pliskin Director May 28, 1999 - ------------------------------- Robert Pliskin /s/ Carole Ann Taylor Director May 28, 1999 - ------------------------------- Carole Ann Taylor /s/ Horacio Groisman, M.D. Director May 28, 1999 - ------------------------------- Horacio Groisman, M.D.
12 EX-10.10.A 2 EMPLOYMENT AGREEMENT - FAIR 1 Exhibit 10.10(a) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into, and shall be binding this 21st day of June, 1996, 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 she 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 - 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 as is expected from a Human Resource Vice President. 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 her 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 June 21, 1996 and shall expire on August 11, 2000. 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 August 11, 1996 and through the term of this Agreement, Employer shall pay Executive a gross annual salary of One-Hundred Thousand Dollars ($100,000)("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. Performance Bonus Plan. The Executive shall be entitled to a bonus equal to: (1) 5% of Executive's salary to the extent that Net Income of the Company shall exceed $2,000,000. 1 2 (2) a) An additional 1/2% of Executive's salary for each increment of $100,000 in the Company's Net Income over $2,000,000 up to $6,000,000, and b) to the extent that the Company's net income exceeds $6,000,000, executive shall receive a bonus of 30% of salary plus 3/4% of executive's salary for each $100,000 increment over $6,000,000. (3) For the purpose of this paragraph, Net Income is defined as net income reported in S.E.C. Form 10-K (after taking into account extraordinary income or loss). (4) 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. c. Stock Option Plan: (1) Executive shall be granted 5,000 options, at a price equal to the price as of August 11, 1996. Such options shall vest 1/3 each after each 12 month period from date of contract. (2) To the extent Net Income exceeds $2,000,000, Executive shall be granted an additional 2,000 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 fifteen (15) working days of vacation per twelve (12) month period during the Term. g. Increases In Salary, Additional Bonuses & Additional Options. On August 11, 1997, 1998 and 1999, Executive's salary from the previous year shall be increased by the higher of 5% or C.P.I. 6. Early Termination of Contract. To the extent that the Company shall decide to terminate this agreement prior to August 11, 1999, Executive shall be entitled to compensation as defined in paragraph 5 (including salary, bonus, stock plan, 401K and insurance coverage) 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 change in Executive's duties and/or title and/or to the extent that providing such services would require a move from South Florida. 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, FL 33021 2 3 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 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 3 4 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. IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: EMPLOYER: PERFUMANIA, INC. By: Ron A. Friedman, Chief Operating Officer EXECUTIVE: By: Claire Fair 4 EX-10.10.B 3 EMPLOYMENT AGREEMENT - FINER 1 Exhibit 10.10(b) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into, and shall be binding this 11th day of August, 1997, by and between the Perfumania, 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 August 11, 1997 and shall expire on August 11, 2000. 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 August 11, 1997 and through the term of this Agreement, Employer shall pay Executive a gross annual salary of One-Hundred Seventy-FiveThousand Dollars ($183,750)("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. Performance Bonus Plan. The Executive shall be entitled to a bonus equal to: (1) 5% of Executive's salary to the extent that Planned Net Income of the Retail Division, as well as the home office, will be met. 1 2 (2) a) An additional 3/4% of Executive's salary for each increment of $100,000 (net of 40% tax) above the Company's Planned Net Income (Retail Division and home office). Actual Net Income will be reduced to the extent Wholesale and Interest Expense (net of 40% tax) do not meet their budgets. (3) 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. c. Stock Option Plan: (1) Executive shall be granted 50,000 options, at a price equal to the price as of August 11, 1996. Such options shall vest 1/3 each after each 12 month period from date of contract. (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 fifteen (15) working days of vacation per twelve (12) month period during the Term. g. Increases In Salary, Additional Bonuses & Additional Options. On August 11, 1998 and August 11, 1999, Executive's salary from the previous year shall be increased by the higher of 5% or C.P.I. 6. Early Termination of Contract. To the extent that the Company shall decide to terminate this agreement prior to August 11th, 2000 , Executive shall be entitled to compensation as defined in paragraph 5 (including salary, bonus, stock plan, 401K and insurance coverage) as if Executive was still employed and this agreement was in full effect. 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 Attention: Ron A. Friedman To Executive: Marc Finer 19300 N. 10th Street Pembroke Pines, FL 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. 2 3 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 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. 3 4 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. IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: EMPLOYER: PERFUMANIA, INC. By: Ron A. Friedman, Chief Operating Officer EXECUTIVE: By: Marc Finer 4 EX-10.10.C 4 EMPLOYMENT AGREEMENT - FALIC 1 Exhibit 10.10(c) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1st day of February, 1999, by and between the Perfumania, Inc., a Florida corporation ("Employer") and Jerome Falic ("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 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 Chairman of Perfumania may assign to the Executive during the Term (as hereinafter defined). During the Term (as hereinafter defined), the Executive shall report directly to Perfumania's Chairman. 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. 2 4. Term. The term of the Agreement shall commence on February 1, 1999 and shall expire on January 31, 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 Three Hundred Eighteen Thousand Three Hundred Forty-Seven Dollars ($318,347)("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. Performance Bonus Plan. The Executive shall be entitled to a bonus equal to: (1) 10% of Executive's salary to the extent that Net Income of the Company shall exceed $1,000,000. (2) a) An additional 1% of Executive's salary for each increment of $100,000 in the Company's Net Income over $1,000,000 up to $6,000,000, and b) to the extent that the Company's net income exceeds $6,000,000, executive shall receive a bonus of 65% of salary plus 1.5% of executive's salary for each $100,000 increment over $6,000,000. (3) For the purpose of this paragraph, Net Income is defined as net income reported in S.E.C. Form 10-K (after taking into account extraordinary income or loss). (4) 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. c. Stock Option Plan: (1) Executive should be granted 15,000 options to the extent that Net Income exceeds $2,000,000, and an additional 750 options for each $100,000 increments in Net Income over $2,000,000 up to $4,000,000, and (2) To the extent Net Income exceeds $4,000,000, Executive shall be granted 30,000 options and 500 options for each $100,000 increments in Net Income over $4,000,000 up to $7,000,000. 3 d. 401k Plan, Expense Reimbursement & Insurance. Executive shall be entitled to participate in the Employer's 401(k) plan, be reimbursed for business expenses and receive full health, disability and life insurance. e. Vacation. Employee shall be entitled to take up to twenty (20) working days of vacation per twelve (12) month period during the Term. f. Automobile Allowance. Employee shall be entitled to a monthly automobile allowance of $750. g. Cellular Telephones. Employee shall be entitled to the use of two cellular telephones, one to be installed in an automobile designated by employee and one portable cellular phone. h. Increases In Salary, Additional Bonuses & Additional Options. Each year after the initial term, Executive's salary shall be increased by the higher of 5% or C.P.I. 6. Early Termination of Contract. To the extent that the Company shall decide to terminate this agreement prior to December 31, 2001, Executive shall be entitled to compensation as defined in paragraph 5 (including salary, bonus, stock plan, 401K and insurance coverage, automobile allowance and cellular telephones) as if Executive was still employed and this agreement was in full effect. 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: Jerome Falic 209 Bal Bay Drive Bal Harbour, Florida 33154 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 4 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 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 5 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 or is acquired, all items under Section 5, Compensation, shall be doubled for the duration of the term of this Agreement. In addition, Executive will be granted 5,000 stock options for each remaining month from the date of the change in control through January 31, 2002. These stock options shall be fully vested and shall be granted at an exercise price equal to the closing market price of the Company's stock on the day prior to any press release announcing a change in control. 6 IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: EMPLOYER: PERFUMANIA, INC. By: EXECUTIVE: By: Jerome Falic EX-10.10.D 5 EMPLOYMENT AGREEMENT - LEKACH 1 Exhibit 10.10(d) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 1st day of February, 1999, by and between the Perfumania, Inc., a Florida corporation ("Employer") and Ilia Lekach ("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 Executive Officer and Chairman of the Board, 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 may assign to the Executive during the Term (as hereinafter defined). During the Term (as hereinafter defined), the Executive shall report directly to Perfumania's Board of Directors. 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 February 1, 1999 and shall expire on January 31, 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. Signing Bonus. Employer shall pay Executive a signing bonus of $500,000 as of January 30, 1999. Such signing bonus shall be in consideration of and as compensation for services provided to Employer in fiscal year 1998. b. Salary. During the Term of this Agreement, Employer shall pay Executive a gross annual salary of Four Hundred Thousand Dollars ($400,000)("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. 1 2 c. Performance Bonus Plan. The Executive shall be entitled to a bonus equal to: (1) 20% of Executive's salary to the extent that Net Income of the Company shall exceed $1,000,000. (2) a) An additional 2% of Executive's salary for each increment of $100,000 in the Company's Net Income over $1,000,000 up to $6,000,000, and b) to the extent that the Company's net income exceeds $6,000,000, executive shall receive a bonus of 130% of salary plus 3% of executive's salary for each $100,000 increment over $6,000,000. (3) For the purpose of this paragraph, Net Income is defined as net income reported in S.E.C. Form 10-K (after taking into account extraordinary income or loss). (4) 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. d. 401k Plan, Expense Reimbursement & Insurance. Executive shall be entitled to participate in the Employer's 401(k) plan, be reimbursed for business expenses and receive full health, disability and life insurance. e. Vacation. Employee shall be entitled to take up to twenty (20) working days of vacation per twelve (12) month period during the Term. f. Increases In Salary, Additional Bonuses & Additional Options. Each year after the initial term, Executive's salary shall be increased by the higher of 5% or C.P.I. 6. Early Termination of Contract. To the extent that the Company shall decide to terminate this agreement prior to December 31, 2001, Executive shall be entitled to compensation as defined in paragraph 5 (including salary, bonus, stock plan, 401K and insurance coverage) as if Executive was still employed and this agreement was in full effect. 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: Ilia Lekach 137 Golden Beach Drive Golden Beach, FL 33160 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. 2 3 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 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. 3 4 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 or is acquired, all items under Section 5, Compensation, shall be doubled for the duration of the term of this Agreement. IN WITNESS WHEREOF, Employer and Executive have executed this Agreement as of the date first above written. WITNESSES: EMPLOYER: PERFUMANIA, INC. By: EXECUTIVE: By: Ilia Lekach 4 EX-10.10.E 6 SEPARATION AGREEMENT - FRIEDMAN 1 Exhibit 10.10 (e) SEPARATION AGREEMENT THES SEPARATION AGREEMENT ("Agreement"), executed this 1st day of December 1998, but effective for all purposes as of 12:00 a.m. on October 29, 1998 ("Effective Date"), by and between RON A. FRIEDMAN ("Employee") and PERFUMANIA, INC., a Florida corporation, its subsidiaries and affiliates (Perfumania, Inc. and its subsidiaries and affiliates are hereinafter collectively referred to as "Employer"), with the joinder and consent of SUSAN RUDD FRIEDMAN ("SRF"). WITNESSETH WHEREAS, Employee was employed by Employer (and/or its predecessor) from June 1991 through and including October 28, 1998 ("Employee's Employment"); WHEREAS, Employee's relationship with Employer is being severed as of the Effective Date; WHEREAS, Employee is hereby tendering his resignation as a member of the Board of Directors of Employer, effective 11:59 p.m. on October 28, 1998; and WHEREAS, Employer and Employee wish to resolve all outstanding and other matters relating to or in any manner connected with Employee's Employment; NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: (a) The above recitals are true and correct and are incorporated herein by this reference. (b) Employee hereby releases Employer and Employer's predecessors, shareholders, officers, directors, agents and/or employees, from any charge of discrimination and all claims or causes of action including, but not limited to, any claim or cause of action arising out of, under, or relating to Employee's Employment, the severance of his employment relationship, the Civil Rights Act of 1871 (42 U.S.C. Sec. 1981), the Labor Management Relations Act of 1947, the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, the Occupational Safety and Health Act of 1970, the Rehabilitation Act of 1973, the Health Maintenance Organization Act of 1973, the Employee Retirement Income Security Act of 1974, the Immigration Reform and Control Act of 1986, the Americans with Disabilities Act of 1990, the Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, Executive Order 11141, Executive Order 11246, Executive Order 11375, Chapter 760 of the Florida Statutes, the Florida Civil Rights Act of 1992, Chapter 11A of the Dade County Code and/or any other state, federal or local law. 1 2 (c) Employee acknowledges and represents that he suffered no workplace injury during the period of his employment. (d) In consideration of the matters contained herein, Employer shall compensate Employee as follows (the "Settlement Package"): 1 Employer shall pay to Employee the sum of Eight Hundred Twenty-Six Thousand Two Hundred Thirty-Two ($826,232.00), corresponding to Employee's current salary and benefits for approximately three (3) years (the "Guaranteed Income"), which Guaranteed Income is immediately earned and due, however, as an accommodation to Employer, Employee shall, subject to the terms of this Agreement, permit Employer to pay the Guaranteed Income to Employee in accordance with the following installment schedule:
Pay Date Amount Pay Date Amount Pay Date Amount -------- ------ -------- ------ -------- ------ 12/09/98 11,068 01/05/00 11,248 01/03/01 11,248 12/23/98 11,068 01/19/00 9,474 01/17/01 9,474 02/02/00 9,474 01/31/01 9,474 01/06/99 85,068 02/16/00 9,474 02/14/01 9,474 01/20/99 11,842 03/01/00 9,474 02/28/01 9,474 02/03/99 10,068 03/15/00 9,474 03/14/01 9,474 02/17/99 10,068 03/29/00 9,474 03/28/01 9,474 03/03/99 10,068 04/12/00 9,474 04/11/01 9,474 03/17/99 10,068 04/26/00 9,474 04/25/01 9,474 03/31/99 10,068 05/10/00 9,474 05/09/01 9.474 04/14/99 10,068 05/24/00 9,474 05/23/01 9,474 04/28/99 10,068 06/07/00 9,474 06/06/01 9,474 05/12/99 10,068 06/21/00 9,474 06/20/01 9,474 05/26/99 10,068 07/05/00 9,474 07/03/01 9,474 06/09/99 10,068 07/19/00 9,474 07/18/01 9,474 06/23/99 10,068 08/02/00 9,474 08/01/01 9,474 07/07/99 10,068 08/16/00 9,474 08/15/01 9,474 07/21/99 10,068 08/30/00 9,474 08/29/01 9,474 08/04/99 10,068 09/13/00 9,474 09/12/01 9,474 08/18/99 10,068 09/27/00 9,474 09/26/01 9,474 09/01/99 10,068 10/11/00 9,474 10/10/01 9,474 09/15/99 10,068 10/25/00 9,474 10/24/01 9,474 09/29/99 10,068 11/08/00 9,474 11/07/01 9,474 10/13/99 10,068 11/22/00 9,474 11/21/01 9,474 10/27/99 10,068 12/06/00 9,474 11/10/99 9,474 12/20/00 9,474 11/24/99 9,474 12/08/99 9,474 12/22/99 9,474
2 3 In the event Employer fails to timely pay any of the installments of the Guaranteed Income on the respective dates set forth in the above schedule, such installment sum(s) then payable shall bear interest at the highest nonusurious rate permitted by Florida law from the date due and payable through and including the date Employee receives such sum(s) in full. Any past due installment of Guaranteed Income (together with any interest due thereon, if any) may, at the sole option of Employee, be offset by any account(s) payable from Employee to Employer in connection with Employee's purchaser(s) of "Inventory" (as hereinafter defined) as set forth in SUBPARAGRAPH (E) below. Within one hundred five (105) days following the expiration of each of the foregoing calendar years (i.e., calendar years 1999, 2000 and 2001), Employee shall provide Employer with copies of Employee's Federal and State income tax statements/returns for the then completed calendar year, together with payment (the "Overage Payment") of that amount by which Employee's taxable earned income including, without limitation, income, salaries and wages derived from whatever source (but specifically excluding any and all dividend income, interest income, income from the exercise of stock options [warrants or similar instruments], portfolio income or other income or gains [of all character and nature] from investments) and "Net Operating Income" (as hereinafter defined) derived from "Employee's Business Activities" (as hereinafter defined) for the then completed calendar year exceeds the sum of Two Hundred Sixty Thousand Four Hundred Sixty-Six Dollars ($260,466.00); provided that the Overage Payment shall be capped at Two Hundred Sixty Thousand Four Hundred Sixty-Six Dollars ($260,466.00) per calendar year for each of said calendar years 1999, 2000 and 2001. Notwithstanding the above, ordinary income from the exercise of stock options (other than those of Employer) shall be deemed to be wages but only to the extent that such income exceeds Five Hundred Thousand Dollars ($500,000) and Employee's employment with new employer terminated during the year of recognizing the income from the stock options for tax purposes. "Employee's Business Activities" shall be defined as any and all business activities or ventures owned, operated or controlled, directly or indirectly, either individually or as a partner or stockholder or otherwise, by Employee, his spouse, lineal descendants or beneficiaries under his Last Will and Testament or trusts for his benefit or any of the foregoing. "Net Operating Income" shall be defined as Employee's share of all revenues derived from Employee's Business Activities, less and excepting therefrom (i) all related costs and expenses (no matter how same may be characterized for tax and/or generally accepted accounting principles ["GAAP"] accounting purposes, i.e. capitalized or expensed, in whole or in part) pertaining to the generation of said revenues, including debt service and priority returns on capital investments, if any, (ii) all costs and expenses for health, medical and dental care insurance coverage for Employee and his dependents, a life insurance policy which will provide a death benefit in the amount of Two Million Fifty Thousand and No/100 Dollars ($2,050,000.00), which shall contain a cost of living adjustment endorsement and a long term disability insurance policy which shall provide the highest rate of compensation/benefits then available, a ninety (90)-day waiting period and benefits payable to the age of seventy-five 3 4 (75), automobile payments (lease or own), insurance, fuel, maintenance, cellular and mobile telephones, repairs and upkeep therefore, (iii) allocable depreciation and amortization (calculated in accordance with GAAP); provided that any disbursements made by Employee in connection with Employee's Business Activities other than those pertaining to capital assets shall be characterized as operating costs even though they may be required to be capitalized for tax or GAAP accounting purposes, and (iv) the Employee's share of federal self employment taxes. 2 Employer has granted Employee stock options to purchase four hundred twenty-nine thousand (429,000) shares of Perfumania, Inc. common stock ("Options") currently trading on the NASDAQ bulletin board under the symbol "PRFM". Effective October 29, 1998 and based on the closing Market Price of Perfumania, Inc. Common Stock as of October 29, 1998, Employer shall convert all of said options into shares of Perfumania, Inc. Common Stock at a conversion price for each share equal to zero dollars ($0.00). Further, Employer shall cause the original stock certificates contemplated by the immediately preceding sentence to be delivered to Employee as soon as reasonably practicable. 3 In the event Employee owns and operates a business similar to, or in competition with, the business of Employer's retail division (i.e., retail sale of fragrances, cosmetics and bath and body products) within three (3) years from the date hereof ("Competing Business"), Employer shall sell to Employee, (i) inventory reasonably required to initially open and properly stock such products for said Competing Business ("Initial Inventory") at Employer's cost (based upon the method utilized by Employer to determine cost as of the Effective Date) plus fifteen percent (15%), and (ii) inventory reasonably required to re-stock said Competing Business after the initial opening ("Re-Stock Inventory") at Employer's cost (based upon the method utilized by Employer to determine cost as of the Effective Date) plus twenty percent (20%) (Initial Inventory and Re-Stock Inventory are hereinafter collectively referred to as "Inventory"). To the extent Employer merges or combines with Parlux Fragrances, Inc. ("Parlux"), costs shall be determined by taking the same percentage off retail that Employer currently pays Parlux and adding thereto either fifteen percent (15%) or twenty percent (20%), whichever is applicable. Employee shall have one hundred eighty (180) days within which to pay any invoices from Employer in connection with Initial Inventory and ninety (90) days within which to pay any invoices from Employer in connection with Re-Stock Inventory. Any past due invoices in connection with Employee's purchaser(s) of Inventory shall be offset by any Guaranteed Income payable to Employee as set forth in SUBPARAGRAPH (A) above; provided Employer gives written notice to Employee, and Employee does not satisfy said sums due and owing in connection with the past due invoice(s) then in question within fifteen (15) days of the receipt of said notice. In the event Employer shall offset any such Guaranteed Income, as set forth in the immediately preceding sentence, Employer shall send written notice to Employee identifying the application against the then due Guaranteed Income set forth in SUBPARAGRAPH (A) above. Employee shall resell all Inventory purchased by Employee only in Employee's Competing Business, and Employee shall absolutely not wholesale any Inventory. Notwithstanding the foregoing, Employee shall be entitled to Wholesale any goods obtained from any source other than from Employer. Employee shall have no return privileges on any Inventory, except for Inventory received by Employee in damaged condition. 4 5 Notwithstanding anything contained herein to the contrary, (i) Employee shall be under no obligation to purchase any Inventory, (ii) Employer shall only be obligated to sell Inventory to Employee subject to availability and/or to the extent available after Employer has, in its sole and absolute discretion, completely fulfilled the good faith inventory stocking requirements of its retail division, (iii) Employee shall not have the right to purchase any Inventory which is subject to resale restrictions or other restrictive agreements, whether oral or written, between Employer and the manufacturers or distributors of said Inventory, and (iv) Employer shall be under no obligation to sell any Inventory to Employee beyond that date which is three (3) years from the date of this Agreement. 4 Employer shall provide Employee with a list(s) of Employer's suppliers, vendors, and lessors pertaining to Employer's retail business through and including January 1, 1999. Employee acknowledges that said list(s) is highly confidential, the disclosure of which he knows, or should know, will be materially damaging to Employer's business. As such, Employee agrees that he shall forever maintain strictly confidential, and shall not disclose to any person, such list(s), as well as any material confidential information obtained by Employee during Employee's Employment with respect to any of the Company's customers, suppliers, creditors, lenders, investment bankers, financial information, and methods of marketing, distribution and sales, the disclosure of which he knows or should know will be materially damaging to the Company. It is recognized and hereby acknowledged by Employer and Employee that any breach or violation by Employee of any or all of the covenants or agreements set forth above may cause irreparable harm or damage to Employer's business, the monetary amount of which may be virtually impossible to ascertain. As a result, Employee agrees that Employer shall be entitled to an injunction issued by any court of competent jurisdiction enjoining and restraining any and all breaches or violations of such covenants by Employee or his associates, affiliates, partners, employees, agents or designees, either directly or indirectly, and that such right to an injunction shall be cumulative and in addition to whatever other remedies Employer may possess at law or in equity. Nothing contained herein shall be construed to prevent Employer from seeking and recovering from Employee damages sustained by it as a result of any breach or violation by Employee of any of the covenants or agreements contained herein. Employee expressly acknowledges the adequacy of the Settlement Package as consideration for the matters set forth in this Agreement. The parties hereto acknowledge that the sums required to be paid to Employee under SUBPARAGRAPH (A) above shall be paid in gross and reportable by Employer to Employee on Form 1099, and shall not be subject to withholding taxes. (e) In consideration of the Settlement Package, except as contemplated by any of Employee's Business Activities in which the terms and provisions of PARAGRAPH 4(E) hereof shall be or have been 5 6 applicable, which activities are expressly permitted and shall in no event be a violation of the terms and provisions of this PARAGRAPH 5 and as otherwise provided below in this Paragraph, Employee shall not, during the period ending three (3) years from the Effective Date, (i) participate in the management of, or act as a consultant for, or an employee of, or directly or indirectly perform services (as an employee, manager, consultant, independent contractor, advisor or otherwise) for, any entity that is engaged in any facet of business that is in competition with, or that has a reasonable possibility of materially affecting in an adverse manner the sales, profits or financial condition of, the business currently conducted by Employer (as of the Effective Date) (the "Conducted Business"), or (ii) sell, transfer or otherwise dispose of any Competing Business to any entity that is engaged in any facet of business that is in competition with, or that has a reasonable possibility of materially affecting in a material and adverse manner the sales, profits or financial condition of, the Conducted Business. Furthermore, during the period ending two (2) years from the date hereof, Employee shall not, without Employer's prior written consent, which consent may be withheld by Employer in its sole and absolute discretion, (i) solicit or otherwise encourage employees or agents to commence employment or obtain any interest in any business competitive with the Conducted Business or with which Employee is involved, unless such employees have not worked for Employer, or received compensation from Employer for a period of at least one (1) year, or (ii) solicit any customers of Employer. Notwithstanding anything contained herein to the contrary, the provisions of this paragraph shall not apply in the event of a change of majority ownership or control of Employer or in the event Employer's retail division is sold or spun off to an entity not controlled by the Falic or Lekach families. Notwithstanding anything contained herein to the contrary, Employee shall have the right to pursue and effectuate any transaction(s) for the benefit of Employee's Business Activities utilizing the offering of securities (including debt and/or equity instruments), regardless of the legal and accounting structure of said transaction(s), provided after the consummation of such transaction, Employee remains in the surviving enterprise (including parent, sister or affiliate thereof) as management or as a controlling party. (f) The parties agree that this Agreement does not constitute an admission of any violation by Employer of the laws identified in PARAGRAPH 2 above. This Agreement is offered in settlement of any and all claims involving Employer and Employee. (g) Employer and Employee agree to keep the terms of this Agreement strictly confidential and not to disclose the same to third parties, except that: 1 Employer and/or Employee may disclose the same as necessary to secure professional, legal, accounting, tax or other financial advice or as otherwise required by law or mandated by a court having competent jurisdiction; 2 Employer may disclose the same as necessary to arrange for execution of this Agreement and delivery of the Settlement Package hereunder; and 3 Employer may disclose the same as necessary to prevent prosecution of an action in contravention hereof 6 7 4 Employee may disclose the same as necessary to secure financing in connection with Employee's Business Activities or other investment opportunities. (h) (a) employer covenants and agrees that: (a) if any of the sums of money herein referred to are not promptly and fully paid to employee when due and payable; or (b) if any of the stipulations, agreements, conditions or covenants contained in this Agreement (other than as provided in Paragraph 8 [a]) are not duly performed, complied with and abided by within ten (10) days after written notice from Employee to Employer that such performance was due; and/or (c) if a receiver be appointed for the Employer or for any part of the assets of the Employer; or (d) in the event any representation made herein be materially untrue; or (e) upon any order or decree of a court of competent jurisdiction appointing a receiver, liquidator or trustee of the Employer or of any of the Employer's properties and the failure to discharge and vacate such order or decree within thirty (30) days thereof; or (f) upon any order or decree of any court adjudicating the Employer bankrupt or insolvent or sequestering any of the Employer's property and the failure to discharge and vacate such order or decree within thirty (30) days thereof; or (g) upon the filing by the Employer of a petition in bankruptcy under the provisions of any bankruptcy law, or any insolvency acts; or (h) the acquiescence in or consent by the Employer to the filing of any bankruptcy petition against it under any such law; or (i) the admission in writing by the Employer of its inability to pay its debts generally as they become due; or (j) if a petition in bankruptcy is filed against the Employer and such proceeding or petition is not dismissed within thirty (30) days; or (k) if the Employer has filed a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any other applicable law or statute of the United States or any state thereof, then, upon the happening of any one or more of the aforementioned events, the same shall be considered a default ("Default") of this Agreement. Upon such Default, the then aggregate sum(s) of Guaranteed Income fully earned but then remaining unpaid, with interest accrued on such sums at the highest nonusurious rate permitted by applicable law (from the dates such sums were due through and including the date of repayment in full), shall become due and payable forthwith or thereafter, at the option of the Employee, as fully and completely as if all the said sums of money were originally stipulated to be paid on such day, anything in this Agreement to the contrary notwithstanding; and thereupon or thereafter, at the option of the Employee, without notice or demand, suit at law or in equity may be prosecuted as if all monies secured hereby had matured prior to its institution. Further, in the event of a Default, Employer shall be liable to Employee for all attorneys' fees, paralegals' fees and court costs through all trial, appellate and administrative levels incurred by Employee, whether or not litigation results. In that regard, in the event of a Default, in addition to any and all remedies available at law and/or in equity, Employee shall have no further obligation to deliver to Employer any Overage Payment, the term and provisions of PARAGRAPH 5 hereof shall be void, AB INITIO, and at Employee's option, Employee shall be entitled to pursue any dispute in a court of competent jurisdiction or elect to utilize binding arbitration as contemplated by PARAGRAPH 12 hereof. (b) Employee covenants and agrees that: (a) if any of the sums of money with regard to Inventory purchased are not timely paid in accordance with the custom established between the parties, and Employee is not disputing such sums claimed to be due and owing to Employer; or (b) if a receiver be appointed for the Employee or for any part of the assets of the Employee; or (c) in the event any representation made herein be materially untrue; or (d) upon any order or decree of any 7 8 court adjudicating the Employee bankrupt or insolvent or sequestering any of the Employee's property and the failure to discharge and vacate such order or decree within thirty (30) days thereof; or (e) the acquiescence in or consent by the Employee to the filing of any bankruptcy petition against it under any such law; or (f) the admission in writing by the Employee of its inability to pay its debts generally as they become due; or (g) if a petition in bankruptcy is filed against the Employee and such proceeding or petition is not dismissed within thirty (30) days; or (h) if the Employee has filed a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any other applicable law or statute of the United States or any state thereof; then, upon the happening of any one or more of the aforementioned events, the same shall be considered a default ("Default") of this Agreement. Upon such Default, Employer shall have the right to set-off such sums then due against that portion of the Guaranteed Income then payable and the Employer's obligation to sell future Inventory to Employee shall terminate. (i) Employer hereby represents and warrants to Employee that Employer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Florida; has the full corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder (without limiting the generality of the foregoing, the board of directors of Employer have duly authorized the execution, delivery and performance of this Agreement by Employer); and this Agreement constitutes the valid and legally binding obligation of Employer, enforceable in accordance with its terms and conditions; and the execution and delivery of this Agreement, or the consummation of the transactions contemplated hereby, will not violate any applicable law which Employer is subject, violate any provision of the articles of incorporation or bylaws of Employer. (j) Employee has carefully read the foregoing Agreement, knows and understands the contents thereof and its binding legal effect. He signs the same on his own free will and act, and it is his intention that he be legally bound hereby. (k) If any provisions in this Agreement are held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way. (1) In the event of any proceeding arising hereunder, venue shall be in Dade County, Florida, and Florida law shall apply. Employer and Employee hereby knowingly, voluntarily and intentionally waive any right to a jury trial with respect to any claims arising in connection with the employment relationship and/or this Agreement. In the event of any litigation hereunder, the prevailing party shall be entitled to court costs and reasonable attorneys' fees at trial and all appellate levels. (m) Notwithstanding anything contained herein to the contrary, to the extent permitted by Florida law, the parties hereto agree to have any and all disputes arising under this Agreement settled by arbitration by the American Arbitration Association ("AAA"), or its successor organization, in the City of Miami, Florida. Within ten (10) days following the occurrence of any such dispute, each party shall designate one member of the AAA to sit on the arbitration panel. The two designated arbiters shall have ten (10) days from the date the last of said two arbiters is selected to either reach a final settlement of the dispute or to designate a third member of the AAA as a panel member. If the two 8 9 designated arbiters reach a final settlement of the dispute within said ten (10) day period, they shall immediately notify the parties in writing of the terms of the settlement. If the two designated arbiters designate a third panel member, the three-member panel shall have ten (10) days from the date of the designation of the third panel member to reach a final settlement of the dispute. Said panel shall immediately notify the parties in writing of the terms of the settlement. The settlement reached by arbitration shall be final, binding and non-appealable. A judgment upon the settlement may be entered in any court, federal or state, having jurisdiction thereover. The cost of arbitration and all expenses and costs incurred in connection with enforcement and/or collection of any remedy shall be borne by the prevailing party. (n) Employer and Employee agree that this Agreement sets forth all the promises and agreements between them and supersedes all prior and contemporaneous agreements, understandings, inducements or conditions, expressed or implied, oral or written, except as herein contained. (o) Employee shall have the unconditional right to assign this Agreement, in whole or in part, to: (i) any partnership, corporation, trust or other entity which is owned or controlled by Employee or Susan Rudd Friedman or (ii) any partnership, corporation, trust or other entity in which a partnership, corporation, trust or other entity which is owned or controlled by an affiliate of any person or entity set forth in (i) above. In that regard, in the event the assignment shall relate to the right to collect the Guaranteed Income, the entity receiving such assignment shall receive the Form 1099 associated with such income received during that calendar year. (p) In the event of the death of Employee, this Agreement shall continue and remain in force and effect, however, the Employee's Business Activities shall, for all purposes hereinafter during the term of this Agreement, remain fixed as they existed on the date of death of Employee. The benefits and burdens of this Agreement shall inure to the estate of Employee and the disposition of this asset shall be made in accordance with applicable law. [SIGNATURE PAGE TO FOLLOW] 9 10 IN WITNESS WHEREOF, Employer and Employee have caused this Agreement to be executed on the date set forth above. WITNESSES: EMPLOYER: PERFUMANIA, INC., a Florida corporation By: /s/ Simon Falic - -------------------------------- ---------------------------------- Simon Falic CFO By: /s/ Ron A. Friedman - -------------------------------- ---------------------------------- Ron A. Friedman - -------------------------------- The undersigned hereby joins in and consents to this Agreement to acknowledge and agree to be bound by the terms and provisions of PARAGRAPH 5 hereof, and as a third party beneficiary of the benefits contemplated in this Agreement. By: /s/ Susan Rudd Friedman ----------------------------------- Susan Rudd Friedman 10 11 STATE OF FLORIDA ) ) SS: COUNTY OF DADE ) I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument was acknowledged before me by Simon Falic, the Chairman and Chief Executive Officer of Perfumania, Inc., freely and voluntarily under authority duly vested in him by said corporation. He is personally known to me or he has produced as identification. WITNESS my hand and official seal in the County and State last aforesaid this day of , 1998. ---------------------------------------- Notary Public, State of Florida at Large My Commission Expires: ---------------------------------------- Typed, printed or stamped name of Notary Public STATE OF FLORIDA ) ) SS: COUNTY OF DADE ) I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument was acknowledged before me by Ron A. Friedman, who is personally known to me or he has produced as identification. WITNESS my hand and official seal in the County and State last aforesaid this day of , 1998. ---------------------------------------- Notary Public, State of Florida at Large My Commission Expires: ---------------------------------------- Typed, printed or stamped name of Notary Public 11 12 STATE, OF FLORIDA ) ) SS: COUNTY OF DADE ) I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument was acknowledged before me by Susan Rudd Friedman, who is personally known to me or she has produced as identification. WITNESS my hand and official. seal in the County and State last aforesaid this day of , 1998. ---------------------------------------- Notary Public, State of Florida at Large My Commission Expires: ---------------------------------------- Typed, printed or stamped name of Notary Public 12 EX-10.10.F 7 SEPARATION AGREEMENT - FALIC 1 Exhibit 10.10(f) SEPARATION AGREEMENT THIS SEPARATION AGREEMENT ("Agreement"), executed this 29th day of January, 1999, by and between SIMON FALIC ("Employee") and PERFUMANIA, INC., a Florida corporation, its subsidiaries and affiliates (Perfumania, Inc. and its subsidiaries and affiliates are hereinafter collectively referred to as "the Company"). WITNESSETH WHEREAS, Employee was employed by the Company and/or its predecessor from the inception of the Company through January 29, 1999 ("Employee's Employment"); WHEREAS, Employee's relationship with the Company as is being severed, effective January 29, 1999; and WHEREAS, Employee is hereby tendering his resignation as Chief Financial Officer, Chief Operating Officer and a member of the Board of Directors of the Company, effective January 29, 1999; and WHEREAS, the Company and Employee wish to resolve all outstanding and other matters relating to or in any manner connected with Employee's Employment. NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. The above recitals are true and correct and are incorporated herein by this reference. 2. On the date of this Agreement, Employee shall return to the Company any and all documents, lists, data, confidential information, trade secrets, equipment or other property in his possession belonging to the Company or relating, in any manner, to the Company's relationship with Employee, except for those required for the Consulting Services (as hereinafter defined). 3. Employee hereby releases the Company and the Company's predecessors, shareholders, officers, directors, agents and/or employees, from any charge of discrimination and all claims or causes of action including, but not limited to, any claim or cause of action arising out of, under, or relating to Employee's Employment, the severance of his employment relationship, the Civil Rights Act of 1871 (42 U.S. C. Sec. 1981), the Labor Management Relations Act of 1947, the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, the Occupational Safety and Health Act of 1970, the Rehabilitation Act of 1973, the Health Maintenance Organization Act of 1973, the Employee Retirement Income Security Act of 1974, the Immigration Reform and Control Act of 1986, the Americans with Disabilities Act of 1990, the Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, Executive Order 11141, Executive Order 11246, Executive Order 11375, Chapter 760 of the Florida Statutes, the Florida Civil Rights Act of 1992, Chapter 11A of the Dade County Code and/or any other state, federal or local law. 2 4. Employee acknowledges and represents that he suffered no workplace injury during the period of his employment. 5. In consideration of the matters contained herein, the Company shall compensate Employee as follows (the "Settlement Package"): (a) The Company shall pay to Employee the following sums corresponding to Employee's salary for a three (3) year period (the "Salary Payments"): January 29, 1999 - January 28, 2000: $318,347.00 per annum January 29, 2000 - January 28, 2001: $334,264.00 per annum January 29, 2001 - January 28, 2002: $350,977.00 per annum The foregoing sums shall be paid in equal consecutive biweekly installments (i.e., every other week in accordance with the Company's customary payroll practices); provided, however, that in the event of a change of control of the Company, the Company shall immediately pay Employee the entire balance of the Salary Payments then outstanding in one lump sum payment. (b) In consideration of a one-time fee of Three Hundred Thousand Dollars ($300,000.00) payable by the Company to Employee simultaneously with the execution hereof, Employee shall perform such consulting services on behalf of the Company (the "Consulting Services") as the Company may from time to time request over a period of thirty-six (36) months from the date hereof, provided, however, that (i) in no event shall Employee be required to devote to such Consulting Services more than ten percent (10%) of the time that Employee was required to work while employed by the Company, and (ii) Employee's obligation to perform such Consulting Services shall immediately end upon a change of control of the Company. (c) Employee may continue to participate in any health, disability or life insurance plan, retirement plan or other employee benefit plan maintained or implemented by the Company, to the extent Employee is eligible to participate under the terms or requirements of such plan. Employee expressly acknowledges the adequacy of the Settlement Package as consideration for the matters set forth herein. Wherever applicable, the Settlement Package will be subject to withholding of taxes; therefore, the net amounts actually received by Employee may be less than the amounts set forth above. 6. The Company shall use its best efforts to release Employee from any liability or contingent liability on any note, loan guaranty or other obligation made by Employee to or for the benefit of the Company. Upon the expiration or earlier termination or modification of the outstanding bank loan from LaSalle National Bank to the Company, Employee shall be released from any liability or contingent liability in connection therewith. 2 3 7. The parties agree that this Agreement does not constitute an admission of any violation by the Company of the laws identified in Paragraph 3 above. This Agreement is offered in settlement of any and all claims involving the Company and Employee and is without prejudice to the Company. 8. The Company and Employee agree to keep the terms of this Agreement strictly confidential and not to disclose the same to third parties, except that: (a) The Company and/or Employee may disclose the same as necessary to secure legal and tax advice or as otherwise required by law; (b) The Company may disclose the same as necessary to arrange for execution of this Agreement and delivery of the Settlement Package hereunder; and (c) The Company may disclose the same as necessary to prevent prosecution of an action in contravention hereof. 9. Employee has carefully read the foregoing Agreement, knows and understands the contents thereof and its binding legal effect. He signs the same of his own free will and act, and it is his intention that he be legally bound hereby. 10. If any provisions in this Agreement are held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way. 11. In the event of any proceeding arising hereunder, venue shall be in Dade County, Florida, and Florida law shall apply. 12. The Company and Employee agree that this Agreement sets forth all the promises and agreements between them and supersedes all prior and contemporaneous agreements, understandings, inducements or conditions, expressed or implied, oral or written, except as herein contained. 3 4 IN WITNESS WHEREOF, the Company and Employee have caused this Agreement to be executed on the date set forth above. WITNESSES: THE COMPANY: PERFUMANIA, INC., a Florida corporation /s/ Illegible By: /s/ Ilia Lekach - --------------------------------- ------------------------------- Ilia Lekach Chairman & CEO /s/ Illegible - --------------------------------- EMPLOYEE: --------- /s/ Illegible By: /s/ Simon Falic - --------------------------------- ------------------------------- Simon Falic /s/ Illegible - -------------------------------- STATE OF FLORIDA ) ) SS: COUNTY OF DADE ) I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgements, the foregoing instrument was acknowledged before me by Ilia Lekach, the Chairman and Chief Executive Officer of Perfumania, Inc., freely and voluntarily under authority duly vested in him by said corporation. He is personally known to me or he has produced ____________ as identification. WITNESS my hand and official seal in the County and State last aforesaid this 29 th day of January, 1999. /s/ Teresita Bermudez ---------------------------------------- Notary Public, State of Florida at Large My Commission Expires: /s/ Teresita Bermudez ---------------------------------------- Typed, printed or stamped name of Notary Public ccc: OFFICIAL NOTARY SEAL TERESITA BERMUDEZ NOTARY PUBLIC STATE OF FLORIDA COMMISSION NO. 595222 MY COMMISSION EXP. 0CT. 22, 2000 4 5 STATE OF FLORIDA ) ) SS: COUNTY OF DADE ) I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgements, the foregoing instrument was acknowledged before me by Simon Falic, who is personally known to me or he has produced _______________________ as identification. WITNESS my hand and official seal in the County and State last aforesaid this 29th day of January, 1999. /s/ Teresita Bermudez ---------------------------------------- Notary Public, State of Florida at Large My Commission Expires: Teresita Bermudez ---------------------------------------- Typed, printed or stamped name of Notary Public ccc OFFICIAL NOTARY SEAL TERESITA BERMUDEZ NOTARY PUBLIC STATE OF FLORIDA COMMISSION NO. 595222 MY COMMISSION EXP. 0CT. 22, 2000 5 -----END PRIVACY-ENHANCED MESSAGE-----