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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
AUGUST 3, 1998
BEAUTICONTROL COSMETICS, INC.
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 0-14449 75-2036343
(State of incorporation) (Commission File No.)(IRS Employer Identification No.)
2121 MIDWAY ROAD
CARROLLTON, TEXAS 75006
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 458-0601
NO CHANGE
(Former name or former address, if change since last report)
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ITEM 5. OTHER EVENTS
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STOCK PURCHASE AGREEMENT
GENERAL
Pursuant to a Stock Purchase Agreement (the "Purchase Agreement") dated
as of July 31, 1998 and executed on August 3, 1998, by and among BeautiControl
Cosmetics, Inc., a Delaware corporation (the "Company"), Jim Sowell Construction
Co., Inc., a Texas corporation ("Sowell"), Jinger L. Heath ("Mrs. Heath") and
Richard W. Heath ("Mr. Heath" and together with Mrs. Heath, the "Heaths"), the
Company issued 1,200,000 shares ("Shares") of common stock, par value $0.10 per
share (the "Common Stock") to Sowell. The aggregate purchase price of the Shares
was $9,912,000.
RIGHT OF PARTICIPATION IN FUTURE EQUITY FINANCINGS
The terms of the Purchase Agreement provide that, in addition to the
acquisition of the Shares, for so long as Sowell is the legal and beneficial
holder of at least 1,200,000 shares of Common Stock Sowell has a right of
participation with regard to any of the Company's future financings obtained
through the cash sale of (i) any additional shares of capital stock of the
Company; (ii) securities convertible into capital stock of the Company; or (iii)
securities carrying the right to purchase additional shares of capital stock of
the Company. If any of the above transactions takes place, Sowell may
participate in such manner as to retain its current proportionate ownership in
the Company, provided that such participation is on terms no less favorable to
the Company than the terms of the financing being obtained. Notwithstanding the
foregoing, no such right of participation extends to capital stock issued by the
Company pursuant to any of the Company's stock option plans.
BOARD REPRESENTATION
Pursuant to the Purchase Agreement, for so long as Sowell is the legal
and beneficial owner of at least 1,200,000 shares of Common Stock, the Company
and Mr. Heath have agreed to use their best efforts to cause Mr. James E.
Sowell, Chief Executive Officer of Sowell, to be elected to the Board of
Directors of the Company.
REGISTRATION OF SHARES
In addition, as soon as practicable after the signing of the Purchase
Agreement, the Company (at its expense) shall use its best efforts to cause the
registration of the Shares under the Securities Act of 1933, as amended (the
"Securities Act"). The registration will be on such appropriate registration
form as may be selected by the Company and will permit the disposition of the
Shares in accordance with the intended method of disposition furnished to the
Company in writing by Sowell. In addition, the Company (at its expense) will use
its best efforts to cause the registration of the Shares in such states as may
be reasonably requested by Sowell. The Company has agreed to indemnify Sowell
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of a material fact contained in the
registration statement for the Shares, or any prospectus or preliminary
prospectus or any amendment or supplement thereto, or any omission or alleged
omission to state a material fact required to be stated or necessary to make the
statements therein (in case of a prospectus or preliminary prospectus, in light
of the circumstances under which they were made) not misleading, except insofar
as the same is (i) contained in any information furnished to the Company by
Sowell expressly for use in such registration statement or prospectus, or (ii)
caused by the failure to deliver a copy of any prospectus or any amendments or
supplements thereto included in the registration statement after the Company has
furnished Sowell with a sufficient number of copies of the same. Sowell has
agreed to indemnify the Company, its directors, officers, agents, employees and
each person who controls the Company (within the meaning of the Securities
Exchange Act of 1934, as amended) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of a
material fact contained in the information
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furnished by Sowell to the Company and included in the registration statement
for the Shares, or any prospectus or preliminary prospectus or any amendment or
supplement thereto contained therein or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in case of a prospectus or preliminary prospectus, in
light of the circumstances under which they were made) not misleading.
RESTRICTIONS ON THE PURCHASE OF ADDITIONAL SHARES OF COMMON STOCK
The Purchase Agreement also allows Sowell to purchase from third
parties additional shares only up to the greater of (i) 391,000 shares of Common
Stock or (ii) a number of shares of Common Stock such that Sowell and its
affiliates own no more than 26.75% of the then outstanding shares of Common
Stock. Moreover, if Sowell acquires any additional shares of Common Stock in
blocks of 10,000 shares or more, Sowell must notify the Company, and the Company
has the option to purchase up to 50% of such block of additional shares within
72 hours of the Company's receipt of notice from Sowell. The Purchase Agreement
provides that, except as described above, neither Sowell nor its affiliates may
acquire any other options, proxies or any other rights with respect to
additional shares of Common Stock without the prior written consent of the
Company and Mr. Heath.
CO-SALE RIGHTS
The Purchase Agreement grants to Sowell co-sale rights with respect to
a proposed transfer of shares of Common Stock by the Heaths such that as a
result of such a transfer, the Heaths would own a percentage of the
then-outstanding shares of Common Stock less than (i) 26.75%, or (ii) if the
percentage of shares of Common Stock owned by Sowell is less than 26.75%, less
than that percentage owned by Sowell. In such an event, the number of shares of
Common Stock to be included in the transfer by Sowell will be determined by
multiplying (x) the total number of shares of Common Stock that are held by
Sowell by (y) a fraction (A) the numerator of which is the number of shares to
be transferred and (B) the denominator of which is the total number of shares of
Common Stock owned by the Heaths. If Sowell elects to exercise the right of
co-sale, the amount of shares of Common Stock to be transferred shall be sold to
the proposed purchaser in lieu of a corresponding amount of shares proposed to
be transferred by the Heaths. The co-sale right does not apply to certain
permitted transfers within the Heath's family group; however, any subsequent
transfers by a transferee of such shares is subject to the right of co-sale.
PROXY
Moreover, Sowell granted an irrevocable proxy (the "Proxy") to Mr.
Heath to vote the Shares on all matters (except that, in the event of Mr.
Heath's death or incapacity, Mrs. Heath shall serve as proxy). The Proxy
terminates (i) with respect to any Shares sold by Sowell or any of its
affiliates to a third party that is not an affiliate of Sowell or (ii) with
respect to all Shares held by Sowell at such time as the Heaths are no longer
employed by the Company or if the Heaths hold less than an aggregate of 20% of
the then-outstanding shares of Common Stock.
ITEM 7. EXHIBITS.
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4.1 Stock Purchase Agreement dated as of July 31, 1998 among
BeautiControl Cosmetics, Inc., Jim Sowell Construction Co.,
Inc., Richard W. Heath and Jinger L. Heath.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BEAUTICONTROL COSMETICS, INC.
Date: August 20, 1998 By: /s/ M. Doug Tucker
------------------------------------
Name: M. Douglas Tucker
Title: Senior Vice President-Finance, Chief
Financial Officer and Secretary
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EXHIBITS
4.1 Stock Purchase Agreement dated as of July 31, 1998 among BeautiControl
Cosmetics, Inc., Jim Sowell Construction Co., Inc., Richard W. Heath
and Jinger L. Heath.
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Exhibit 4.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of July 31,
1998, among BeautiControl Cosmetics, Inc., a Delaware corporation (the
"Company"), Jim Sowell Construction Co., Inc., a Texas corporation ("Sowell"),
Richard W. Heath ("Heath"), and Jinger L. Heath ("Mrs. Heath").
RECITALS
Sowell wishes to purchase shares of common stock, par value $0.10 per
share (each a share of "Common Stock"), of the Company and the Company wishes
to issue and sell to Sowell shares of Common Stock.
Sowell and the Company each acknowledge that this Agreement is an
integral part of the transactions relating to Sowell's purchase of the shares
of Common Stock and that each party has received adequate consideration for
entering into this Agreement and performing its respective obligations
hereunder.
AGREEMENT
Based on the foregoing and the mutual promises contained herein, the
parties agree as follows:
1. Sowell Representation Regarding Shares. As of the date of
this Agreement (and prior to the purchase of Common Stock contemplated hereby)
Sowell and any Affiliate (as defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) own an aggregate of
343,300 shares of Common Stock.
2. Purchase of Common Stock. Simultaneously with the execution
and delivery of this Agreement, Sowell shall purchase from the Company, and the
Company will issue and sell to Sowell, 1,200,000 shares (the "Shares") of
Common Stock. In consideration of such purchase, Sowell shall (upon execution
of this Agreement) wire $9,912,000 in immediately available funds to the bank
account designated by the Company. As soon as practicable after the date
hereof, the Company shall cause its transfer agent to deliver to Sowell a stock
certificate representing the Shares.
3. Representations of the Company. The Company represents and
warrants to Sowell that (i) the issuance of the Shares will not violate the
Company's Certificate of Incorporation or Bylaws, both as amended to date, (ii)
the issuance of the Shares has been authorized by the Company's Board of
Directors, (iii) assuming payment therefor in accordance with this Agreement,
upon issuance the Shares will be validly issued, fully paid, and nonassessable,
and (iv) the Shares will be free and clear of all liens and encumbrances other
than pursuant to applicable securities laws.
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4. Right of Participation in Future Equity Financings. For so
long as Sowell is the legal and beneficial holder of at least 1,200,000 shares
of Common Stock, the Company shall not sell for cash any additional shares of
capital stock of the Company, or securities convertible into, or carrying the
right to purchase additional shares of capital stock of the Company, unless the
Company first permits Sowell the opportunity to participate in such financing
so that, in connection with any such participation, Sowell is able to maintain
its current proportionate ownership in the Company. Sowell's participation in
any such financing must be on terms no less favorable to the Company than the
terms of the proposed financing offered by the financing source. Sowell's
opportunity to participate in any such financing shall remain open for the
20-day period following written notice from the Company to Sowell that the
Company intends to undertake a financing. Sowell's intention to participate in
any such financing must be communicated in writing to the Company within such
20-day period. Notwithstanding the foregoing, no such right of participation
shall extend to capital stock issued by the Company pursuant to any of the
Company's stock option plans.
5. Board Representation. For so long as Sowell is the legal and
beneficial owner of at least 1,200,000 shares of Common Stock, the Company and
Heath shall use their best efforts to cause Mr. James E. Sowell to be elected
to the Board of Directors of the Company.
6. Registration of Shares. As soon as practicable after the date
of this Agreement, the Company (at its expense) shall use its best efforts to
cause the registration of the Shares by filing a registration statement
relating to the offer or sale of the Shares under the Securities Act of
1933, as amended (the "Securities Act"), and in accordance with the terms and
provisions set forth in Exhibit "A" to this Agreement.
7. Purchase of Additional Common Stock. In addition to the
Shares and the 343,300 shares of Common Stock already owned by Sowell, Sowell
shall be entitled to purchase from persons or entities other than the Company
additional shares of Common Stock (the "Additional Shares") not to exceed the
greater of (i) 391,100 shares of Common Stock or (ii) such additional shares of
Common Stock so that, together with all other shares of Common Stock owned by
Sowell and all Affiliates, such shares do not exceed 26.75% of the
then-outstanding shares of Common Stock. Except for the Additional Shares,
neither Sowell nor any Affiliate shall purchase or otherwise acquire, obtain an
option to purchase, receive a proxy for, or gain any other rights with respect
to, any additional shares of Common Stock without the prior written approval of
the Company and Heath.
8. Concurrent Purchases. If Sowell purchases any of the
Additional Shares described in Section 7 in blocks of 10,000 or more shares,
then immediately after any such purchase Sowell shall provide written notice to
the Company. Upon receipt of such notice and for the following 72 hours, the
Company shall have the option to purchase up to 50% of such Additional Shares.
Such option may be exercised by providing to Sowell written notice, within such
72-hour period, of the desire to exercise such option.
9. Co-Sale Right.
(a) Co-Sale. At least ten (10) days prior to a proposed Transfer
(defined below) of shares of Common Stock by the Heaths such that as a result
of such Transfer the Heaths will own a percentage of the then-outstanding
shares of Common Stock less than (i) 26.75%, or (ii) if the percentage of
Common Stock owned by Sowell is less than 26.75%, less than that
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percentage owned by Sowell, the Heaths shall deliver a written notice (the
"Transfer Notice") to Sowell specifying in reasonable detail the number of
shares of Common Stock proposed to be transferred by the Heaths (the "Transfer
Shares"), the proposed purchase price and the other terms and conditions of the
Transfer. Upon receipt of such Transfer Notice, Sowell shall have the
irrevocable and exclusive right to sell that number of Shares of Common Stock
owned by Sowell to be included among the Transfer Shares determined by
multiplying (x) the total number of such Shares of Common Stock that are held
by Sowell by (y) a fraction (A) the numerator of which is the number of
Transfer Shares and (B) the denominator of which is the total number of shares
of Common Stock owned by the Heaths.
"Transfer" means any sale, transfer, encumbrance, gift, donation,
assignment, pledge, hypothecation, or other disposition of any shares of Common
Stock or any interest therein, whether voluntary or involuntary, and whether
during each of the Heaths' lifetimes or upon or after his or her death,
including, but not limited to, any Transfer by operation of law, by court
order, by judicial process, or by foreclosure, levy or attachment.
(b) Exercise of Right of Co-Sale. Any exercise of the right of
co-sale pursuant to Section 9(a) above shall be by a written notice (the
"Co-Sale Notice") delivered by Sowell to the Heaths within three (3) days after
his receipt of the Transfer Notice. A Co-Sale Notice shall state the amount of
Shares of Common Stock that Sowell is proposing to sell to the proposed
acquiror pursuant to his right of co-sale and that Sowell elects to sell such
Shares of Common Stock in accordance with the procedures set forth in this
Section 9. Failure to deliver a Co-Sale Notice shall be deemed conclusive
evidence of Sowell's intent to decline to exercise his right of co-sale. The
number of Shares of Common Stock which Sowell declines to sell pursuant to his
right of co-sale may be sold by the Heaths for their own account.
(c) Effect of Exercise of Co-Sale Rights. If Sowell elects to
exercise his right of co-sale in accordance with Section 9(b) above, the amount
of Sowell's Shares of Common Stock specified in the Co-Sale Notice and
calculated in accordance with Section 9(a) above shall be sold to the proposed
acquiror in lieu of a corresponding amount of Transfer Shares.
(d) Purchase of Co-Sale Shares. The Shares of Common Stock to be
sold by Sowell to the proposed acquiror pursuant to this Section 9 shall be
sold at the same price per share and upon the same terms and conditions as the
Transfer Shares.
(e) Inapplicability of Right of Co-Sale. The right of co-sale
granted pursuant to this Section 9 shall not apply to any Permitted Transfer
(defined below) by the Heaths but any shares of Common Stock transferred by the
Heaths in a Permitted Transfer shall remain subject to this Section 9 and, if
to be transferred to a proposed acquiror, shall be deemed to be included as
Transfer Shares for the purpose of the Transfer Notice and for the purpose of
clause (y)(A) of Section 9(a), and shall be deemed to be included as shares of
Common Stock owned by the Heaths for purposes of clause (y)(B) of Section 9(a).
"Permitted Transfer" means any Transfer of shares of Common Stock by
the Heaths to a person in the Heaths' Family Group (defined below); provided,
however that the terms and provisions of this Agreement shall continue to be
applicable to such shares of Common Stock after any such Transfer; and
provided, further, that the transferees of such shares of Common Stock shall
have agreed in writing to be bound by the provisions of this Agreement.
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"Family Group" means, with respect to any natural person, such
person's spouse and descendants (whether natural or adopted) and any trust,
limited partnership or limited liability company, solely or primarily for the
benefit of such person and/or such person's spouse, their respective
ancestors, descendants, or any charitable remainder trust or charitable unit
trust the income of which is primarily for the benefit of such person, such
person's spouse or descendants (whether natural or adopted) and the principal
of which is for the benefit of one or more charitable organizations.
10. Proxy. Simultaneously with the execution of this Agreement,
Sowell will execute an irrevocable proxy in the form attached as Exhibit "B"
to this Agreement. The holder of the irrevocable proxy shall indemnify and
hold Sowell harmless against all losses, claims, damages, liabilities and
expenses incurred by Sowell in connection with or as a result of Sowell
executing the proxy pursuant to such irrevocable proxy which result from any
violations of applicable securities laws by the holder of the irrevocable
proxy.
11. Investment Representation. Sowell hereby represents and
warrants to the Company that (i) Sowell is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D and is acquiring the Shares for
its own account, for investment purposes only, and not with a view to the
resale or distribution of all or any part thereof, and (ii) Sowell understands
that the Shares have not been registered under the Securities Act, or the
securities laws of any state, and may not be offered or sold unless a
registration statement under the Securities Act and applicable state securities
laws shall have become effective with regard thereto, or an exemption from
registration under the Securities Act and applicable state securities laws is
available.
12. Legend. All certificates representing the Shares shall bear
the following legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any applicable state securities law. Such shares may not be
offered for sale, sold, transferred or pledged until so
registered or unless an exemption from registration exists for
such offer for sale, sale, transfer or pledge.
The Company may enter a stop transfer order with the Company's transfer agent
against the transfer of the Shares, except in compliance with the requirements
of this Agreement.
13. Specific Performance. In the event of a breach or threatened
breach by a party of any of its obligations or covenants contained in this
Agreement, each party acknowledges and agrees that such a breach or threatened
breach would cause irreparable injury to the other party for which an adequate
remedy is not available at law and that the other party, therefore, shall be
entitled to specific performance or other injunctive remedy for any such breach
or threatened breach. Such remedy shall not be deemed to be the exclusive
remedy for a breach of this Agreement, but shall be in addition to all other
remedies available at law or equity.
14. Successors and Assigns. All covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto. The proxy referred to in Section 9
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hereof shall apply only to shares of Common Stock owned by Sowell or an
Affiliate, and shall not apply to any bona fide third-party transferee.
15. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
16. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be an original, but all such
counterparts taken together shall constitute one and the same instrument. Any
counterpart may be delivered by facsimile.
17. Entire Agreement. This Agreement and the schedules and
exhibits and other writings and agreements specifically identified herein
contain the entire agreement between the parties with respect to the
transactions contemplated hereby and supersede all previous oral negotiations,
commitments, understandings and agreements.
18. Legal Fees and Expenses. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorney's
fees and court costs, in addition to any other recoveries allowed by law.
19. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered or mailed, first class postage prepaid:
if to the Company or the Heaths:
BeautiControl Cosmetics, Inc.
2121 Midway Road
Carrollton, Texas 75006
Attn: Richard W. Heath
Jinger L. Heath
With copy to:
David H. Oden, Esq.
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
if to Sowell:
Jim Sowell Construction Co., Inc.
3131 McKinney Avenue
Suite 200
Dallas, Texas 75204
Attn: James E. Sowell
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With copy to:
Jim Sowell Construction Co., Inc.
3131 McKinney Avenue
Suite 200
Dallas, Texas 75204
Attn: Steven Smathers, Esq.
Such addresses may be changed from time to time by written notice to the other
party.
20. Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.
21. Governing Law. All issues and questions concerning the
construction, validity, interpretation and enforceability of this Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any choice of law or conflict of laws rules
or provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
JIM SOWELL CONSTRUCTION CO., INC.
By: /s/ JAMES E. SOWELL
----------------------------------------
James E. Sowell, Chief Executive Officer
BEAUTICONTROL COSMETICS, INC.
By: /s/ RICHARD W. HEATH
----------------------------------------
Richard W. Heath, President
/s/ RICHARD W. HEATH
----------------------------------------------
Richard W. Heath, Individually
/s/ JINGER L. HEATH
----------------------------------------------
Jinger L. Heath, Individually
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EXHIBIT "A"
REGISTRATION OF THE SHARES
(a) Registration. The registration statement will be on such
appropriate registration form as may be selected by the Company and will permit
the disposition of the Shares in accordance with the intended method of
disposition furnished to the Company in writing by Sowell. In addition, the
Company (at its expense) will use its best efforts to cause the registration of
the Shares in such states as may be reasonably requested by Sowell in order for
Sowell to accomplish the intended method of distribution of the Shares.
(b) Cooperation. Sowell shall cooperate with the Company in
connection with the registration of the Shares, and shall furnish the Company
such information relating to such registration as may be reasonably requested
by the Company, including information regarding the Shares and the intended
method of their distribution, and shall take all action as may be reasonably
requested by the Company in order to comply with the provisions of applicable
securities laws.
(c) Sowell Indemnification. The Company agrees to indemnify, to
the fullest extent permitted by law, Sowell against all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged untrue
statement of a material fact contained in the registration statement for the
Shares, or any prospectus or preliminary prospectus or any amendment or
supplement thereto, or any omission or alleged omission to state a material
fact required to be stated or necessary to make the statements therein (in case
of a prospectus or preliminary prospectus, in light of the circumstances under
which they were made) not misleading, except insofar as the same is (i)
contained in any information furnished to the Company by Sowell expressly for
use in such registration statement or prospectus, or (ii) caused by the failure
to deliver a copy of any prospectus or any amendments or supplements thereto
included in the registration statement after the Company has furnished Sowell
with a sufficient number of copies of the same.
(d) Company Indemnification. Sowell agrees to indemnify, to the
fullest extent permitted by law, the Company, its directors, its officers, its
agents and employees, and each person who controls the Company (within the
meaning of the Exchange Act) against all losses, claims, damages, liabilities
and expenses, caused by any untrue or alleged untrue statement of a material
fact contained in information furnished by Sowell to the Company and included
in the registration statement for the Shares, or any prospectus or preliminary
prospectus or any amendment or supplement thereto contained therein or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus or preliminary prospectus, in light of the circumstances under which
they were made) not misleading.
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EXHIBIT "B"
IRREVOCABLE PROXY
KNOW ALL MEN BY THESE PRESENTS, that pursuant to the provisions of Section 212
of the Delaware General Corporation Law, the undersigned hereby irrevocably
constitutes and appoints:
(i) Richard W. Heath, and (ii) upon his death or incapacity, Jinger L. Heath,
as its attorney-in-fact and proxy, to vote and otherwise act (by written
consent or otherwise) with respect to all shares of Common Stock, $0.10 par
value, of BeautiControl Cosmetics, Inc. held of record by the undersigned up to
1,200,000 shares (the "Shares") and all other stock dividends or distributions
issuable with respect to such Shares, whether now owned or acquired after the
date hereof, by the undersigned or any Affiliate (as defined by Rule 12b-2 of
the Securities Exchange Act of 1934, as amended) of the undersigned, which the
undersigned is entitled to vote at any meeting of stockholders (whether annual
or special and whether or not an adjourned or postponed meeting) or consent in
lieu of any such meeting or otherwise, on all matters.
The undersigned hereby affirms that this Irrevocable Proxy is given in
connection with, and pursuant to the terms of, the Stock Purchase Agreement
among BeautiControl Cosmetics, Inc., the undersigned, Richard W. Heath, and
Jinger L. Heath, dated July 20, 1998. The undersigned acknowledges that this
proxy is coupled with an interest and is irrevocable and shall not be
terminated by operation of law or upon the occurrence of any other event.
This proxy shall automatically terminate (i) with respect to any Shares sold or
otherwise transferred by the undersigned, or any Affiliate, to a third party
that is not an Affiliate of Sowell and (ii) with respect to all Shares held by
the undersigned at such time as the Heaths are no longer employees of the
Company or, as a result of the Heaths selling their shares of Common Stock, the
Heaths' holdings in the Company are less than an aggregate of 20% of the then-
outstanding shares of Common Stock.
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy as of
July 31, 1998.
JIM SOWELL CONSTRUCTION CO., INC.
By: /s/ JAMES E. SOWELL
----------------------------------
James E. Sowell
Chief Executive Officer
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STATE OF TEXAS )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me on August 3, 1998, by James
E. Sowell, the Chief Executive Officer of Jim Sowell Construction Co., Inc., a
Texas corporation, on behalf of said corporation.
/s/ BOBBIE MOULDER
--------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
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