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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT effective as of the 1st day of June, 1999, between
STYLING TECHNOLOGY CORPORATION, a Delaware corporation (the "Employer"), and XXX
X. XXXXXXX, an individual who resides at the address appearing below (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Executive is desirous of continuing to be
employed by the Employer and the Employer desires to continue to employ the
Executive; and
WHEREAS, the Employer wishes to enter into an agreement with
the Executive governing the terms and conditions of his continued employment,
and the Executive is willing to continue to be employed on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereby agree as follows:
1. EMPLOYMENT. The Employer shall continue to employ the
Executive, and the Executive shall continue in the employ of the Employer, from
and after the date first set forth above (the "Effective Date") on the terms and
subject to the conditions set forth in this Agreement. The Executive shall serve
in the position of Chairman of the Board, President and Chief Executive Officer
of the Employer with authority, duties and responsibilities commensurate with
his authority, duties and responsibilities immediately prior to the Effective
Date, plus any additional duties and responsibilities upon which the Employer
and the Executive may agree from time to time. The Executive shall devote his
best efforts to the business of the Employer.
2. TERM. The term of this Agreement shall initially be five
(5) years commencing on the Effective Date hereof, and thereafter shall be
automatically renewed for successive five (5) year terms, provided that the
employment of the Executive may be terminated at any time after the Effective
Date in accordance with paragraph 5.
3. LOCATION. The Executive shall not be required to relocate
his primary place of employment outside Maricopa County, Arizona. The Executive
shall, however, also travel to other locations at such times as may be
reasonably necessary for the performance of his duties under this Agreement. Any
such travel undertaken by the Executive shall be at the Employer's expense, and
when travelling on business relating to the performance of his duties under this
Agreement the Executive shall be entitled to first class air transportation and
first class hotel accommodations.
4. COMPENSATION. During the Executive's period of employment,
the Executive shall be compensated by the Employer as follows:
(a) Annual Salary. The Executive shall be paid an
annual salary at a rate computed on the basis of Three Hundred
Seventy-Five Thousand Dollars
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($375,000) per year commencing from and after the Effective Date. As of
July 1, 2001, and each July 1 thereafter, the Executive's annual salary
shall be reviewed and, if appropriate based upon merit or other
factors, increased by the Compensation Committee of the Board of
Directors of the Employer (the "Board"). The Executive's salary shall
be paid in accordance with the Employer's normal payroll cycle and
policies.
(b) Employee Benefits. The Executive shall be
entitled to participate in any and all retirement benefit, welfare
benefit and other employee benefit plans or programs, which are from
time to time maintained by the Employer for its senior executives, in
accordance with the provisions of such plans or programs as from time
to time in effect. The Executive shall also be entitled to the benefits
set forth in Schedule A attached hereto and made a part of this
Agreement.
(c) Business Expenses. The Executive shall be
reimbursed, in a manner consistent with the policies of the Employer,
for all reasonable business expenses incurred in the performance of his
duties pursuant to this Agreement, to the extent such expenses are
substantiated in writing, are approved by the Employer, and are
consistent with the general policies of the Employer relating to the
reimbursement of expenses of its senior executives. Except as otherwise
provided in this Agreement, expenses for items reasonably deemed to be
personal by the Employer shall not be reimbursed by the Employer and
are the sole responsibility of the Executive.
(d) Deduction and Withholding. All compensation and
benefits to or on behalf of the Executive pursuant to this Agreement
shall be subject to such deductions and withholding as may be agreed to
by the Executive or required by applicable law.
(e) Indemnification and Insurance. The Employer
shall, to the fullest extent permitted or required by Section 145 of
the Delaware General Corporation Law, including any amendments thereto
(but in the case of any such amendment, only to the extent such
amendment permits or requires the Employer to provide broader
indemnification rights than prior to such amendment), indemnify the
Executive against any and all Liabilities (as defined below), and
advance any and all reasonable Expenses (as defined below), incurred by
him in any Proceeding (as defined below). The rights to indemnification
hereunder shall not be deemed exclusive of any other rights to
indemnification against Liabilities or the advancement of Expenses
which the Executive may be entitled under any other written agreement,
Board resolution, vote of shareholders, the Delaware General
Corporation Law or otherwise.
For purposes of this Agreement:
(1) "Liabilities" shall include, without
limitation, judgments, amounts incurred in settlement, fines,
penalties and, with respect to any employee benefit plan, any
excise tax or penalty incurred in connection therewith, and
any and all liabilities of every type or nature whatsoever.
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(2) "Expenses" shall include, without
limitation, any and all expenses, fees, costs, charges,
attorneys' fees and disbursements, other out-of-pocket costs,
reasonable compensation for time spent by the Executive in
connection with the Proceeding for which he is not otherwise
compensated by the Employer or any third party, and any and
all other direct or indirect costs of any type or nature
whatsoever.
(3) "Proceeding" shall include, without
limitation, any threatened, pending or completed action,
claim, litigation, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative,
whether predicated on foreign, federal, state or local law,
whether brought under and/or predicated upon the Securities
Act of 1933, as amended (the "Securities Act"), and/or the
Securities Exchange Act of 1934, as amended, and/or their
respective state counterparts and/or any rule or regulation
promulgated thereunder, whether a derivative action and
whether formal or informal.
The Employer shall supplement the foregoing rights to
indemnification by the purchase of insurance on behalf of its officers
and directors, including the Executive, in the amount of no less than
Ten Million Dollars ($10,000,000) against Liabilities and/or the
advancement of Expenses.
5. TERMINATION.
(a) Termination for Cause. The Employer may terminate
the Executive's employment for Cause (as defined below) immediately
upon notice to the Executive. Such notice shall specify in reasonable
detail the nature of the Cause. For purposes of this Agreement, "Cause"
shall mean a material unremedied breach of this Agreement or a
conviction of a felony committed against the Employer; provided,
however, the Executive shall be provided with at least thirty (30)
days' prior notice of, and an opportunity within the thirty (30) days
to cure, any grounds for terminating his employment for Cause
hereunder. The existence of Cause shall be determined in good faith by
the Board at a duly held meeting thereof. In the event of the
involuntary termination by the Employer of his employment for Cause,
the Executive shall be entitled to receive as compensation only his
salary and benefits as accrued through the effective date of such
termination.
(b) Termination Other Than for Cause. The Employer
may terminate the Executive's employment for any reason, upon at least
sixty (60) days' prior notice to the Executive, in which event the
Executive's employment shall terminate as of the effective date of
termination. In the event of the involuntary termination by the
Employer of his employment other than for Cause, the Executive shall be
entitled to receive as compensation: (1) his salary and benefits as
accrued through the effective date of such termination, (2) an amount
equal to the Executive's then current salary for a period of five (5)
years (in accordance with the Employer's normal payroll cycle and
policies), which amount shall be payable in a single sum on
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his employment termination date, (3) continuation, at the Employer's
expense, of all employee benefits during the period described in
subparagraph (2) hereof, except to the extent that he becomes eligible
for any equivalent benefits provided by another employer, and (4) an
amount equal to five (5) times any incentive compensation paid to him
for the fiscal year immediately preceding the fiscal year in which his
employment termination date occurs, which amount shall be payable in a
single sum on his employment termination date. If continuation coverage
is not available for any reason beyond the control of the Employer for
any employee benefits for any portion of the period described in
subparagraph (2), then the Employer shall pay the cash equivalent of
such coverage to the Executive for the remaining portion of such
period. The amount of the cash equivalent shall be determined in good
faith by the Board.
(c) Voluntary Termination for Good Reason. The
Executive may voluntarily terminate his employment for Good Reason (as
defined below) at any time upon at least sixty (60) days' prior notice
to the Employer, in which event the Executive's employment shall
terminate as of the effective date of termination. For purposes of this
Agreement, "Good Reason" shall mean the Employer's material unremedied
breach of this Agreement or any adverse change, without the Executive's
written consent, in his authority, duties, responsibilities, position,
status, geographic location or working conditions from his authority,
duties, responsibilities, position, status, geographic location or
working conditions in effect immediately prior to the Effective Date;
provided, however, the Employer shall be provided with at least thirty
(30) days' prior notice of, and an opportunity within the thirty (30)
days to cure, any grounds for the Executive terminating his employment
for Good Reason hereunder. The existence of Good Reason shall be
determined in good faith by the Executive. In the event of his
voluntary termination of employment for Good Reason, the Executive
shall be entitled to all of the compensation and benefit payments
described in paragraph 5(b).
(d) Voluntary Termination Other Than for Good Reason.
The Executive may voluntarily terminate his employment other than for
Good Reason at any time upon at least sixty (60) days' prior notice to
the Employer, in which event the Executive's employment shall terminate
as of the effective date of termination. In the event of his voluntary
termination of employment other than for Good Reason, the Executive
shall be entitled to receive only his salary and benefits as accrued
through the effective date of such termination and COBRA continuation
coverage benefits.
(e) Death or Disability. The Executive's employment
pursuant to this Agreement shall terminate automatically on the date of
the Executive's death or disability. No compensation shall be payable
after the Executive's death or disability other than the Executive's
salary and benefits as accrued through the date of his death or
disability, whichever is applicable, and any employee benefits, such as
disability insurance proceeds, provided pursuant to paragraph 4(b) in
the event of the Executive's death or disability; provided, however,
that the Executive (or, in the event of his death, his estate) shall be
entitled to receive a pro rata portion of any incentive compensation
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that would be payable to him (but for his death or disability) for the
fiscal year in which his death or disability occurs, which pro rata
portion shall be based upon the ratio that the part of such fiscal year
during which he was employed bears to the entire fiscal year.
For purposes of this Agreement, the term "disability"
means a physical or mental condition that prevents the Executive from
performing the essential functions of his position with or without
reasonable accommodations.
(f) Administrative Leave. In the event of the
Employer's involuntary termination of the Executive's employment for
Cause, or the Executive's voluntary termination of his employment other
than for Good Reason, the Employer may place the Executive on paid
administrative leave and/or bar or restrict his access to the
Employer's facilities, contemporaneously with or at any time after the
delivery of the termination notice.
(g) No Duty to Mitigate. Except as expressly provided
herein, the obligation of the Employer to pay any salary, benefits or
other amounts to the Executive pursuant to this paragraph 5 shall not
be dependent upon, or otherwise affected by, whether or not the
Executive seeks or obtains any other employment after the termination
of his employment for any reason or otherwise makes any effort to
mitigate the effects of such termination.
(h) Avoidance of Duplicate Severance Benefits. In the
event of the involuntary termination by the Employer of the Executive's
employment other than for Cause, or the Executive's termination of his
employment for Good Reason after a Change of Control (as defined in the
Change of Control Agreement dated as of June 1, 1999, between the
Employer and the Executive (the "Change of Control Agreement")), the
amount of any severance benefits payable under subparagraph 5(b) or
5(c) of this Agreement shall be reduced on a dollar-for-dollar basis to
the extent of any severance benefits paid by the Employer to the
Executive as a condition precedent to the Change of Control pursuant to
paragraph 1(a) of the Change of Control Agreement.
6. OPTION AND REGISTRATION RIGHTS.
(a) Option. In the event of a termination of
employment of the Executive due to his death, his Beneficiary (as
defined below) shall be entitled to put to the Employer any or all of
the Executive's shares of common stock of the Employer (the "Shares")
at any time and from time to time during the twelve (12) month period
immediately following his death. In such event, his Beneficiary shall
exercise the put by providing thirty (30) days' prior notice to the
Employer, which notice shall specify the number of Shares being put to
the Employer. The Employer shall be obligated to purchase the put
Shares within the thirty (30) days at their aggregate closing market
price as of the date of the put notice; provided that:
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(1) the Employer shall not have any
obligation to purchase any put Shares to the extent that the
aggregate purchase price of all of the Shares put to the
Employer pursuant to this paragraph 6 would exceed Five
Million Dollars ($5,000,000); or
(2) the Employer shall not have any
obligation to purchase any put Shares to the extent that the
Employer is, or by reason of the purchase would become,
insolvent or such purchase would result in an event of default
under any loan or financing document to which the Employer is
a party or under which the Employer is obligated to any person
or entity.
(b) Demand Registration. In the event that the
Beneficiary exercises the put described in paragraph 6(a), but either
the Beneficiary cannot put all of the Shares, or the Employer cannot
purchase all of the put Shares, by reason of the limitation imposed by
subparagraph 6(a)(1) or (2), the Beneficiary may demand in writing that
the Employer file a registration statement (the "Demand Registration
Statement") under the Securities Act of 1933 with the Securities and
Exchange Commission (the "Commission") covering the proposed sale to
the public of the specified number of his Shares. Within forty-five
(45) days of its receipt of such a demand, the Employer, at its
expense, shall prepare and file with the Commission (and any
appropriate state securities authorities) a registration statement on
Form X-0, X-0 or S-3 (or the successors to such Forms) covering the
proposed offer and sale of all Shares to be registered pursuant to the
Demand Registration Statement.
(1) The Employer in its discretion may
effect the public offering of the Shares to be covered by the
Demand Registration Statement through either (i) a shelf
offering on a Form S-2 or S-3 (or any successor or similar
Form) registration statement (provided that the Employer is
then eligible to utilize such Form under the Securities Act),
with sales of the Shares registered thereunder to be effected
though normal brokers' transactions or in transactions on the
NASDAQ National Market or on any national securities exchange
or other market on which the shares of common stock of the
Employer are listed or traded or in a privately negotiated
transaction or (ii) a firmly underwritten offering utilizing
one or more underwriters chosen by the Employer after
consulting with the Beneficiary and considering such factors
as the underwriting discount proposed by, and the reputation
and market presence of, such underwriters.
(2) The Employer shall use its best efforts
to have the Demand Registration Statement declared effective
under the Securities Act by the Commission (and under
applicable state securities laws by all appropriate state
securities authorities) as soon as practicable after the
filing thereof and to maintain the effectiveness thereof for a
period of no longer than ninety (90) days (or until all of the
Shares covered thereby have been sold, if such sales are
completed before the end of such ninety (90) days period).
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7. BENEFICIARY DESIGNATION. The Executive may designate a
beneficiary to receive any remaining compensation under paragraph 5 in the event
of the Executive's death after the commencement of payment of any compensation
(the "Beneficiary"),to exercise the put option under paragraph 6 in the event of
the Executive's death prior to the end of the twelve (12) month period
immediately following his employment termination date, and to exercise the
demand registration right under paragraph 6. Such designation shall be made by
filing a written designation with the Board in such form as the Board or its
Compensation Committee may provide and may be changed by the Executive from time
to time by similar action. If no such designation is made by the Executive or if
the Executive is not survived by his designated Beneficiary, any remaining
compensation under paragraph 5 at the time of the Executive's death shall be
paid to the Executive's estate and the put option and/or demand registration
right may be exercised under paragraph 6 by the personal representative of the
Executive's estate.
8. COVENANT NOT TO COMPETE.
(a) Scope. During the term of his employment with the
Employer and for a period of sixty (60) months thereafter (the
"Noncompetition Period"), except as authorized in writing by the Board,
the Executive shall not, directly or indirectly, render services to,
assist, participate in the affairs of, or otherwise be connected with,
any person or business enterprise, except the Employer (which person or
enterprise is engaged in, or is planning to engage in, any business
that is in any respect competitive with the business of the Employer),
in any capacity that
(1) would utilize the Executive's services
with respect to such business which sells products similar to
those of the Employer within any state or possession of the
United States, or any substantially comparable political
subdivision of any other country, wherein the Employer sold or
actively attempted to sell its products within a twelve (12)
month period immediately prior to the termination of the
Executive's employment with the Employer, irrespective of
where the Executive renders such services,
(2) would utilize the Executive's services
in selling any products similar to those of the Employer to
any person or entity to which the Employer sold or actively
attempted to sell its products during the twelve (12) month
period immediately prior to the termination of the Executive's
employment with the Employer, irrespective of where the
Executive renders such services, or
(3) would reasonably be expected to utilize
any trade secrets acquired by the Executive during the term of
his employment by the Employer.
Notwithstanding anything in this subparagraph 8(a) to the contrary, the
Executive shall not be prohibited from owning or operating any beauty
salons at any time and at any location.
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(b) Compliance With Applicable Laws. This Agreement
shall not reduce any obligation of the Executive to comply with any
applicable laws relating to trade secrets.
(c) Reform. If a court of competent jurisdiction
should declare any or all of this Agreement unenforceable because of
any unreasonable restriction of duration and/or geographical area in
subparagraph 8(a), then such court shall have the express authority to
reform subparagraph 8(a) to provide for reasonable restrictions and/or
to grant the Employer such other relief, at law or in equity, as are
reasonably necessary to protect the interests of the Employer.
9. RESPONSIBILITIES UPON TERMINATION. Upon the termination of
his employment by the Employer for whatever reason and irrespective of whether
or not such termination is voluntary on his part, the Executive shall promptly
deliver to the Employer all data, designs, drawings, plans, manuals, notes,
memoranda, work sheets, specifications, customer lists, supplier lists, computer
programs, and all other materials which are or have become the property of the
Employer and all copies or reproductions of any such materials (whether or not
such copies or reproductions are the property of the Employer).
10. SEPARATE AGREEMENTS. The covenants of the Executive
contained in paragraphs 8 and 9 of this Agreement shall be construed as separate
agreements independent of any other agreement, claim or cause of action of the
Executive against the Employer, whether predicated on this Agreement or
otherwise, and no other agreement, claim or cause of action asserted by the
Executive shall constitute a defense to the enforcement by the Employer of these
covenants. The covenants contained in this Agreement are necessary to protect
the legitimate business interests of the Employer. Damages for the violation of
any such covenants will not give full and sufficient relief to the Employer. In
the event of any violation of any such covenants, the Employer shall be entitled
to (a) injunctive relief against the continued violation thereof and (b) its
actual damages; provided, however, the Employer may not set off against any such
damages, or otherwise withhold payment of, any amounts that the Employer is
obligated to pay to the Executive under this Agreement or any other agreement
between the Employer and the Executive.
11. NO SOLICITATION OF EMPLOYEES. The Executive shall not,
during his employment with the Employer (except in the normal course of the
Employer's business) and for a period of twenty-four (24) months after the
termination of his employment hereunder by the Employer for Cause or by the
Executive other than for Good Reason, directly or indirectly induce any
executive of the Employer or any affiliate of the Employer to resign or sever
his or her employment relationship with the Employer or any affiliate of the
Employer.
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12. GENERAL.
(a) Survival. The rights and obligations of the
parties hereto shall survive the term of the Executive's employment
under this Agreement to the extent that any performance is required
under this Agreement after the expiration or termination of such term.
(b) Notices. All notices, demands and other
communications provided for by this Agreement shall be in writing and
shall be deemed to have been given at the time the same is delivered in
person or is mailed by registered or certified mail addressed as
follows:
To the Employer: Styling Technology Corporation
0000 Xxxx Xxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Secretary
To the Executive: 0000 Xxxxx Xxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Either party wishing to change the address to which notices, requests,
demands and other communications under this Agreement are to be sent
shall give written notice of such change to the other party.
(c) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Employer, its
successors and assigns, and the Executive, his heirs, executors,
administrators and legal representatives. The Employer shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Employer to assume its obligations under this
Agreement in the same manner and to the same extent that the Employer
would be required to perform it if no such succession had taken place.
The Executive shall not have the right to transfer, assign, or delegate
this Agreement or any of his rights or obligations hereunder without
the prior written consent of the Employer.
(d) Governing Law. This Agreement shall be governed
by the laws of the State of Arizona.
(e) Waiver. The waiver or failure of either party to
insist in any one or more instances upon performance of any term,
covenant or condition of this Agreement shall not be construed as a
waiver of future performance of any such term, covenant or condition,
but the obligations of either party with respect to such term, covenant
or condition shall continue in full force and effect. No course of
dealing shall be implied or arise from any waiver or series of waivers
of any right or remedy hereunder.
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(f) Severability. Each provision of this Agreement
shall be interpreted where possible in a manner necessary to sustain
its legality and enforceability. If any provision of this Agreement
shall be unenforceable or invalid under applicable law, such provision
shall be limited to the minimum extent necessary to render the same
enforceable or valid. The unenforceability of any provision of this
Agreement in a specific situation, or the unenforceability of any
portion of any provision of this Agreement in a specific situation,
shall not affect the enforceability of (1) that provision or portion of
provision in another situation or (2) the other provisions or portions
of provisions of this Agreement if such other provisions or the
remaining portions could then continue to conform with the purposes of
this Agreement and the terms and requirements of applicable law.
(g) Amendments. This Agreement shall not be amended
orally, but only by a written instrument executed by each party to this
Agreement.
(h) Headings. The headings used in this Agreement are
for convenience only, shall not be deemed to constitute a part hereof,
and shall not be deemed to limit, characterize or in any way affect the
construction or enforcement of the provisions of this Agreement.
(i) Disputes. In any dispute between the Executive
and the Employer concerning whether either party has breached any of
his or its obligations under this Agreement, the prevailing party shall
be entitled to payment from the other party for any and all expenses,
including attorneys' fees and expenses, incurred by the prevailing
party in connection with such dispute
(j) Entire Agreement. This Agreement embodies the
entire agreement and understanding between the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings between the Employer and the Executive with respect to
the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
STYLING TECHNOLOGY EXECUTIVE
CORPORATION
By: /s/ Xxxxxxx X. Xxxx /s/ Xxx X. Xxxxxxx
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Its: Executive Vice President Xxx X. Xxxxxxx
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SCHEDULE A
BENEFITS
The capitalized terms herein shall have the same meanings as
the capitalized terms in the Employment Agreement dated as of June 1, 1999,
between Styling Technology Corporation and Xxx X. Xxxxxxx (the "Employment
Agreement").
1. CHANGE OF CONTROL. The Executive shall be entitled to his
rights and benefits under the Change of Control Agreement.
2. NONQUALIFIED DEFERRED COMPENSATION. The Executive shall be
entitled to his rights and benefits under the Nonqualified Deferred Compensation
Agreement dated as of the date hereof between the Employer and the Executive.
3. LIFE INSURANCE. The Employer shall purchase and pay the
premiums on a whole life insurance policy on the life of the Executive, subject
to a "split dollar" arrangement. The minimum death benefit under such whole life
policy shall be One Million Five Hundred Thousand Dollars ($1,500,000), and the
premiums shall be paid by the Employer so that such policy will be paid up
within twelve (12) years. In addition, the Employer shall purchase and pay the
premiums on a term insurance policy of the life of the Executive. The minimum
death benefit under such term policy shall be Three Million Dollars
($3,000,000), and the Executive may designate the beneficiaries. Such policies
shall be in addition to and exclusive of any insurance policy that the Employer
may obtain on the life of the Executive for which the Employer is or will be the
beneficiary and any insurance policy maintained by the Employer pursuant to
paragraph 4(b) of the Agreement.
4. COUNTRY CLUB. The Employer shall reimburse the Executive
for the annual dues and fees incurred with respect to any country club, provided
that the amount of such reimbursement shall not exceed Fifteen Thousand Dollars
($15,000) per calendar year.
5. AUTOMOBILE ALLOWANCE. The Executive shall be entitled to
payment of a monthly automobile allowance in the amount of Two Thousand Dollars
($2,000).
6. FAMILY TRAVEL. The Employer shall reimburse the Executive
for the expenses incurred by the Executive for first class air transportation
and first class hotel accommodations for the Executive's spouse and two children
for their travel in conjunction with his travel relating to the performance of
his duties pursuant to the Employment Agreement (not to exceed two trips in any
calendar year between Phoenix, Arizona, and any business destination of the
Executive).
7. TAX AND ESTATE PLANNING SERVICES. The Employer shall pay
any expenses incurred by the Executive in connection with individual income tax
return preparation and related tax and estate planning and accounting services
for him, provided that the amount of such payment shall not exceed Twenty-Five
Thousand Dollars ($25,000) per calendar year.
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8. VACATION. The Executive shall be entitled to eight (8)
weeks' paid vacation for each twelve (12) consecutive months of employment with
the Employer. Such vacation shall not be cumulative and shall be taken by the
Executive in his discretion, provided that any such vacation shall not interfere
with the performance of his duties pursuant to the Employment Agreement.
