Three Nussdorf Nominees Join Reconstituted Six Member Board
Parlux Welcomes Neil Katz As Interim CEO
FORT LAUDERDALE, Fla. and RONKONKOMA, N.Y., Feb. 6 /PRNewswire/ --
Parlux Fragrances, Inc. (Nasdaq: PARL) and Glenn Nussdorf today jointly
announced that they have reached an amicable resolution of their disputes.
Mr. Nussdorf has terminated his solicitation of consents from Parlux
stockholders to replace Parlux's directors, and Parlux has dismissed with
prejudice its lawsuit against Mr. Nussdorf, his nominees and certain
Nussdorf-controlled companies.
The parties' settlement provides for the immediate resignation from the
Parlux Board of Ilia Lekach. In addition, because the parties' settlement
calls for equal representation on the Parlux Board by the current
independent directors and Mr. Nussdorf's nominees, Jaya Kader Zebede, one
of the current independent directors, has offered her resignation in order
to facilitate the transition. Frank A. Buttacavoli, has also agreed to
resign as a director to allow for such equal representation, but will
continue to serve as Parlux's Executive Vice President, Chief Operating
Officer and Chief Financial Officer. The parties' settlement provides for
the immediate appointment to the Parlux Board of three of Mr. Nussdorf's
nominees, Neil Katz, Anthony D'Agostino and Robert Mitzman. The Parlux
Board now consists of six directors, Glenn Gopman, Esther Egozi Choukroun,
David Stone, and Messrs. Katz, D'Agostino and Mitzman.
The parties' settlement also provides for the immediate appointment of
Neil Katz as the interim Chief Executive Officer of Parlux. Neil Katz
previously served as President and Chief Executive Officer of Gemini
Cosmetics, Inc. and President of Liz Claiborne Cosmetics, the prestige
fragrance division of the Liz Claiborne Corporation. The reconstituted
Parlux Board will conduct a search for a highly qualified permanent CEO,
and will consider Neil Katz for such position along with other candidates.
Mr. Lekach, who was instrumental in negotiating the terms of the
settlement, has ceased to serve as Parlux's Chief Executive Officer. Mr.
Lekach will continue to serve Parlux as a consultant and to assist with
fragrance brand licenses and international distribution of Parlux products
for a period of four years, and has agreed not to compete with Parlux in
the fragrance business for a period of four years.
Mr. Lekach will receive $1.2 million as severance pay and an additional
$1.2 million for his consulting services and non-competition covenants. In
addition, at Mr. Nussdorf's request, Mr. Lekach has agreed to a substantial
reduction in the amount of the severance payments and warrants contemplated
by his employment agreement in the event that a change in control had
occurred as a result of Mr. Nussdorf's consent solicitation. Under the
terms of the agreement, Mr. Lekach will receive 500,000 warrants to
purchase the Company's common stock at an exercise price of $1.1654, and
Mr. Lekach will receive no other compensation under his employment
agreement.
At the request of Mr. Lekach and the Parlux Board, Mr. Nussdorf and his
affiliates have agreed, subject to certain exceptions, that for a period of
two years he will not make any proposal to acquire Parlux, unless such
proposal is to acquire all shares, at a value of not less than $11 per
share. Mr. Nussdorf also has agreed not to engage in any proxy or consent
solicitations prior to the earlier of 60 days before the 2008 annual
meeting of stockholders or eighteen months from the date of the settlement
agreement. Mr. Lekach has agreed to customary standstill provisions for a
period of four years. Parlux has agreed to reimburse Mr. Nussdorf for $1
million of his expenses incurred in connection with the consent
solicitation and the litigation.
Glenn Gopman, a continuing director of Parlux, said: "We are pleased
this dispute has been resolved and Parlux is able to avoid further cost and
disruption. The settlement will enable the reconstituted Board of Directors
and management to devote their full attention to Parlux's business. We wish
to thank Mr. Lekach for his efforts in bringing this matter to an amicable
resolution, and we welcome our three new directors and look forward to
working with them."
Glenn Nussdorf said: "My consent solicitation was about performance at
Parlux, and the value of the shares which I and every other Parlux
stockholder own. It was never about me. With a reconstituted Board of
Directors and with Neil Katz serving as interim CEO, I am satisfied that I
have achieved our goals. Our settlement agreement demonstrates the
commitment of the Parlux Board to addressing stockholder interests in a
positive way."
About Parlux Fragrances, Inc.
Parlux Fragrances, Inc. is a manufacturer and international distributor
of prestige products. It holds licenses for Paris Hilton fragrances,
watches, cosmetics, sunglasses, handbags and other small leather
accessories in addition to licenses to manufacture and distribute the
designer fragrances of GUESS?, XOXO, Ocean Pacific (OP), Maria Sharapova,
Andy Roddick, baby Gund and Fred Hayman Beverly Hills.
SOURCE Parlux Fragrances, Inc.
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Related links:
http://www.parlux.com
CONTACT:
Dan Katcher or Steve Frankel, both of Joele
Frank, Wilkinson Brimmer Katcher, +1-212-355-4449
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