This Agreement is effective as of January 1, 1997, (the "Effective Date") by and between Frank F. Ferola (the
"Employee") and The Stephan Company (the "Company").
WHEREAS, the Company recognizes the Employee's past and potential contribution to the growth and success
of the Company and desires to assure the Company of the Employee's employment in an executive capacity as
President, Chief Executive Officer and Chairman of the Board of Directors of the Company and to compensate
him therefore; and
WHEREAS, the Employee is desirous of continuing to be employed by the Company and committing himself to
serve the Company in accordance with the terms herein provided;
NOW THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the
parties contained herein, the parties agree as follows:
1. Position. Responsibilities and Term of Employment.
1.1 Employment and Duties. Subject to the terms and conditions of this Agreement, the Company employs the
Employee to serve in an executive and managerial capacity as the President, Chief Executive Officer and
Chairman of the Board of Directors of the Company and the Employee accepts such employment and agrees to
perform such reasonable responsibilities and duties commensurate with such position as set forth in the Certificate
of Incorporation and the Bylaws of the Company.
1.2 Initial Term. Subject to the provisions of this Agreement, the initial term of this Agreement shall be three (3)
years, commencing with the Effective Date hereof.
1.3 Renewals of Term. This Agreement shall be renewed for successive terms of three (3) years each if, at least
(30) days prior to the end of each term of this Agreement, Employee gives notice of his election to renew this
Agreement for another term.
2.1 Annual Base Salary. During the term of this Agreement, the Company shall pay Employee an annual base
salary, before deducting all applicable withholdings, of $425,000 per year, payable