Exhibit 10.3
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is made this ______ day of
_________________, 2001, by and between Decorate, Inc., a Missouri corporation
("Corporation"), and Xxx X. Xxxxx ("Employee").
WHEREAS, the Corporation is engaged in the manufacturing and marketing
of innovative and fashion-forward decorative accessories, accent furniture,
lamps and wall decor; and
WHEREAS, in accordance with the provisions of that certain Agreement
and Plan of Merger dated May _____, 2001, by and among GuildMaster, Inc., a
Missouri corporation ("GuildMaster"), JB Express, Inc., a subsidiary of the
Corporation ("JBE"), Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, Xxx X. Xxxxx, and the
Corporation, of even date herewith, GuildMaster has merged with and into JBE,
and following the merger JBE shall operate the business conducted by GuildMaster
prior to the merger; and
WHEREAS, the Corporation desires to retain the services of the Employee
in the capacity of its President;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Employment. The Corporation agrees to employ the Employee
and the Employee agrees to accept the employment described in this Agreement.
Section 2. Duties. The Employee shall serve as President of the
Corporation, with such duties as are customarily associated with such position.
The Employee shall be responsible for day-to-day operations, strategic planning,
and implementation of the Corporation's business.
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Section 3. Extent of Services. The Employee shall devote the majority
of his working time, attention, and energies to the performance of his duties
described herein. The Employee shall at all times faithfully and to the best of
his ability perform his duties under this Agreement. The duties shall be
rendered at the Corporation's office in Springfield, Missouri, or at such other
place or places and at such times as the needs of the Corporation may from
time-to-time dictate.
Section 4. Term. The Term of this Agreement shall begin on
__________________, 2001 ("Effective Date"), and shall continue for a three (3)
year period (the "Term"). The parties presently anticipate that the employment
relationship may continue beyond this three (3) year term, however, this
Agreement shall not give the Employee any enforceable right to employment beyond
this Term.
Section 5. Compensation.
5.1 Base Compensation. The Employee will receive a base salary of One
Hundred Sixty Thousand Dollars ($160,000.00)per year, payable in equal monthly
installments during the Term of this Agreement. Bonuses will be paid, if at all,
in the sole discretion of the Board of Directors.
5.2. Benefits. The Employee and his immediate family shall receive
medical insurance and other fringe benefits provided to full time employees of
the Corporation.
5.3 Expenses. The Corporation shall reimburse the Employee for
reasonable out-of-pocket expenses incurred by the Employee in fulfilling his
duties. The Corporation shall provide the Employee with suitable office
facilities, equipment, supplies and staff.
5.4 Equity Compensation. In the event the Employee is employed by the
Corporation pursuant to the terms of this Agreement as of the second (2nd)
anniversary date of this Agreement (hereinafter referred to as the
"Determination Date"), as of the Determination Date the Corporation shall issue
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to the Employee shares of Common Stock of the Corporation, fully paid and
non-assessable ("Bonus Shares") having a market value as of the Determination
Date of not less than the following amounts, based upon the cumulative pre-tax
profits of JBE as of the Determination Date:
--------------------------------------- --------------------------------------
Cumulative Pre-Tax Profits of JBE Market Value of Bonus Shares
as of Determination Date to be Issued to Employee
--------------------------------------- --------------------------------------
Less than $700,000.00 -0-
--------------------------------------- --------------------------------------
$700,000.00 - $899,999.00 $100,000.00
--------------------------------------- --------------------------------------
$900,000.00 - $1,099,999.00 $150,000.00
--------------------------------------- --------------------------------------
$1,100,000.00 or More $250,000.00
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The issuance of the Bonus Shares to the Employee shall be governed by
the following general terms and conditions:
5.4.1 Bonus Shares shall be promptly issued to the Employee
after the Determination Date and a certificate or certificates for the
Bonus Shares shall be issued in the Employee's name. The Employee shall
thereupon be a shareholder of all of the shares represented by said
certificate or certificates. As such, the Employee will have all of the
rights of a shareholder with respect to such shares, including the
right to vote them and to receive all dividends and other distributions
with respect to them.
5.4.2 In the event that as of the Determination Date the
shares of the same class as the Bonus Shares are then listed on an
exchange, the Corporation shall take such action as shall be necessary
to cause any Bonus Shares issued pursuant to this Agreement and not
previously listed on said exchange to be listed on said exchange. The
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Corporation may require that, in acquiring any Bonus Shares, the
Employee agree with, and represent to, the Corporation that the
Employee is acquiring such Bonus Shares for the purpose of investment
and with no present intent to transfer, sell or otherwise dispose of
such shares except for such distribution by a legal representative as
shall be required by will or the laws of any jurisdiction in winding up
the estate of the Employee. Such shares shall be transferable
thereafter only if, in the opinion of counsel (who shall be
satisfactory to the Corporation), such transfer at such time complies
with applicable securities laws.
5.4.3 The cumulative pre-tax profits of JBE means the
non-consolidated gross income of JBE through all periods commencing as
of the merger of GuildMaster into JBE, and ending as of the
Determination Date, less all administrative, selling and operating
expenses of every character allocable to JBE as determined in
accordance with generally accepted accounting principals, consistently
applied. The determination of the certified public accountants of the
Corporation as to the cumulative pre-tax profits of JBE shall be
conclusive and binding upon the Corporation and the Employee.
5.4.4 In the event that as of the Determination Date the
shares of the same class as the Bonus Shares are then listed on an
exchange, the "market value" of the Bonus Shares to be issued to the
employee shall be the purchase price on the NASDAQ for the ten (10)
days preceding the Determination Date, or if not then traded or listed
on that system, on the securities trading system or stock exchange on
which the stock is then primarily traded or listed; or if the stock is
not traded or listed on an exchange the average of the reported high
and low price on the Determination Date.
5.4.5 If the Employee dies prior to the Determination Date
while in the employ of the Corporation, the Corporation shall issue to
his estate (or designated beneficiary as provided in Section 5.4.6
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hereof) following the Determination Date a prorata portion of the Bonus
Shares which would have been issued to the Employee had the Employee
remained employed by the Corporation until the Determination Date. The
prorata portion shall be determined by a fraction, the numerator of
which shall be the number of months the Employee was employed by the
Corporation between the date hereof and the Determination Date, and the
denominator of which shall be the number of months between the date
hereof and the Determination Date.
5.4.6 The Employee may file with the Corporation a designation
of a beneficiary or beneficiaries on a form to be provided by the
Corporation, which designation may be changed or revoked by the
Employee's sole action, provided that the change or revocation is filed
with the Corporation on a form provided by it. In the event Bonus
Shares are issuable to the Employee pursuant to the terms and
conditions of this Agreement, but the Employee dies prior to the
issuance of the Bonus Shares, any Bonus Shares to be issued to the
Employee may be delivered to the beneficiary or beneficiaries so
designated by the Employee or, if no beneficiary has been designated or
survives the Employee, shall be delivered to, or in accordance with the
directions of, the surviving spouse of the Employee, or, if there is no
surviving spouse, the personal representative of the Employee's estate.
Section 6. Termination.
6.1 For Cause. The Corporation may terminate the Employee's employment
at any time "for cause" with immediate effect upon delivering written notice to
the Employee. For purposes of this Agreement, "for cause" shall include: (a)
embezzlement, theft, larceny, material fraud, or other acts of dishonesty; (b)
conviction of or entrance of a plea of guilty or nolo contendere to a felony or
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other crime which has or may have a material adverse effect on the Employee's
ability to carry out his duties under this Agreement or upon the reputation of
the Corporation; and (c) any material breach of any of the Employee's
obligations hereunder not cured within fifteen (15) days after written notice
thereof to Employee. Upon termination for cause, the Corporation's sole and
exclusive obligation will be to pay the Employee his compensation earned through
the date of termination, and the Employee shall not be entitled to any
compensation after the date of termination.
6.2 Upon Death. In the event of the Employee's death during the Term of
this Agreement, the Corporation shall be obligated to pay to the Employee's
spouse, if living, or their beneficiary as directed in writing by Employee, the
full amount of compensation due under the balance of the Term of this Agreement,
whether earned or not. Employee's compensation for the full three (3) year Term
shall be secured by Corporation in the event of employee's death, through the
acquisition of a Key-Man Life Insurance Policy (the "Policy") on the life of the
Employee with the Corporation as beneficiary in a death benefit amount not less
than the compensation still unpaid for the remainder of the Term. The Policy
shall be secured from a not less than AA rated Insurance Company as determined
by the Standard & Poors rating system. All expenses associated with the Policy
shall be paid by the Corporation. Payment of the full compensation due in the
event of death shall be paid within ninety (90) days of Employee's death.
6.3 Upon Disability. The Corporation may terminate the Employee's
employment upon the Employee's total disability. The Employee shall be deemed to
be totally disabled if he is unable to perform his duties under this Agreement
by reason of mental or physical illness or accident for a period of three (3)
consecutive months. Upon termination by reason of the Employee's disability, the
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Corporation shall be obligated to pay to Employee all remaining compensation due
to Employee over the full term of this Agreement whether earned or not earned.
Payment of such compensation shall be made to Employee at such times as would be
paid if Employee were not disabled and still employed (i.e. monthly installments
over the remaining term of this Agreement).
6.4 Without Cause. The Corporation may terminate the Employee's
employment without cause at any time during the term of this Agreement, and in
such event, Corporation shall be obligated to pay to Employee all remaining
compensation due to Employee over the full Term of this Agreement whether earned
or not earned, within thirty (30) days from Termination.
6.5 Voluntary Termination by Employee. In the event Employee
voluntarily terminates his employment with Corporation during the Term of this
Agreement, the Corporation's sole and exclusive obligation will be to pay the
Employee his compensation earned through the date of Termination.
Section 7. Covenant Not to Compete.
7.1 Covenant. During Employee's employment with Corporation and in the
event Employee voluntarily terminates his employment with Corporation during the
Term of this Agreement, for a period of two (2) years after the termination
date, the Employee shall not:
7.1.1 directly or indirectly, either individually or as a
principal, partner, agent, employee, employer, joint venturer, or as a
director or officer of any corporation or association, or in any other
manner or capacity whatsoever, engage in, assist or have any active
interest in a business located anywhere in the United States of America
that engages in the manufacturing or importing of innovative and
fashion-forward decorative accessories, accent furniture, lamps and
wall decor, or that otherwise competes with or is substantially similar
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in concept, design, format, or otherwise to the business conducted by
Corporation on the date hereof or at any time during the term of this
covenant, or that provides goods or services, purchases from, or does
business in any manner with Corporation.
7.1.2 directly or indirectly, either individually or as a
principal, partner, agent, employee, employer, joint venturer, or as a
director or officer of any corporation or association, or in any other
manner or capacity whatsoever, (a) divert or attempt to divert from
Corporation any business with any customer or account with which
Employee had any contact or association, which was under the
supervision of Employee, or the identity of which was learned by
Employee as a result of Employee's employment with the Corporation; or
(b) induce any salesperson, distributor, supplier, vendor,
manufacturer, representative, agent jobber or other person transacting
business with the Corporation, or to represent, distribute or sell
services or products in competition with services or products of the
Corporation; or (c) induce or cause any employee of the Corporation to
leave the employ of the Corporation.
Section 8. Waiver. The waiver by the Corporation of the breach of any
provision of this Agreement by the Employee shall not operate or be construed as
a waiver of any subsequent breach by the Employee.
Section 9. Notices. Any notices permitted or required under this
Agreement shall be deemed given upon the date of personal delivery or
forty-eight (48) hours after deposit in the United States mail, postage fully
prepaid, return receipt requested, addressed to the Corporation at:
Decorate, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx X
Xxxxxxxxxxx, Xxxxxxxx 00000
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and addressed to the Employee at:
Xxx X. Xxxxx
__________________________
__________________________
or at any other address as any party may, from time to time, designate by notice
given in compliance with this Section.
Section 10. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri.
Section 11. Titles and Captions. All section titles or captions
contained in this Agreement are for convenience only and shall not be deemed
part of the context nor effect the interpretation of this Agreement.
Section 12. Entire Agreement. This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.
Section 13. Agreement Binding. This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of the parties hereto.
Section 14. Attorney Fees. In the event an arbitration, suit or action
is brought by any party under this Agreement to enforce any of its terms, or in
any appeal therefrom, it is agreed that the prevailing party shall be entitled
to reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
Section 15. Computation of Time. In computing any period of time
pursuant to this Agreement, the day of the act, event or default from which the
designated period of time begins to run shall be included, unless it is a
Saturday, Sunday, or legal holiday, in which event the period shall begin to run
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on the next day which is not a Saturday, Sunday or legal holiday, in which event
the period shall run until the end of the next day thereafter which is not a
Saturday, Sunday, or legal holiday.
Section 16. Pronouns and Plurals. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular,
or plural as the identity of the person or persons may require.
Section 17. Presumption. This Agreement or any section thereof shall
not be construed against any party due to the fact that said Agreement or any
section thereof was drafted by said party.
Section 18. Further Action. The parties hereto shall execute and
deliver all documents, provide all information and take or forbear from all such
action as may be necessary or appropriate to achieve the purposes of this
Agreement.
Section 19. Parties in Interest. Nothing herein shall be construed to
be the benefit of any third party, nor is it intended that any provision shall
be for the benefit of any third party.
Section 20. Savings Clause. If any provision of this Agreement, or the
application of such provision of any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
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DECORATE, INC.
By:
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"Corporation"
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Xxx X. Xxxxx
"Employee"
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