Exhibit 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is dated as of May 31,
2003, by and between AMAZING SAVINGS HOLDING LLC, a Delaware limited liability
company (the "Employer"), and XXXXX XXXXXXXX (the "Executive").
RECITALS
The Employer desires to employ the Executive, and the Executive
wishes to accept such employment, upon the terms and subject to the conditions
set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT TERMS AND DUTIES
1.1 EMPLOYMENT
The Employer hereby employs the Executive, and the Executive hereby
accepts employment by the Employer, upon the terms and subject to the conditions
set forth in this Agreement.
1.2 TERM
This Agreement shall be effective as of the Effective Date (as such
term is defined below in Section 6.13) and shall continue through December 31,
2008, unless earlier terminated as hereinafter provided, provided that this
Agreement automatically shall be extended as of such fifth anniversary and each
three-year anniversary thereafter for a period of three years unless either
party gives notice to the contrary in writing to the other at least ninety (90)
days before the end of the applicable period (such initial five-year period,
plus, if renewed, such additional three-year periods, if any, shall hereinafter
be referred to collectively as the "Employment Period").
1.3 DUTIES
The Executive shall serve as the Senior Vice President -
Merchandising of the Employer and shall have such duties, authority and status
as is customary to such position. The Executive shall (a) devote all or
substantially all of his business time, attention, skill and energy to the
business of the Employer, and (b) serve the Employer, diligently under the
direction of the President of the Employer in the advancement of the best
interests of the Employer. It is understood and agreed that (a) the Executive
will not report to any employee of the Employer other than the President of the
Employer and Xxxxxxx Xxxxxx (as long as he is an executive of Employer), (b) the
Executive will work at the principal office of the Employer, and that such
principal office of the Employer will be located (A) in South Plainfield, New
Jersey or (B) either within a 10 mile radius of South Plainfield, New Jersey or
within a 50-mile radius of Monsey, New York but in either event outside of New
York City or Long Island and (c) the Executive will not be required to work on
the Sabbath or any Jewish holidays under Orthodox law and (b) for purposes
hereof, the "business of the Employer" (with respect to which the Executive
shall perform services) includes, as and to the extent required, the business of
subsidiaries of the Employer (including, without limitation, Odd Job Stores,
Inc.). The organizational chart of Employer, which is subject to change, is
contemplated to be set forth on Exhibit A.
2. COMPENSATION AND BENEFITS
2.1 COMPENSATION
(A) BASE SALARY. The Executive shall be paid an annual base salary at
the rate of (i) Three Hundred Twenty Thousand and 00/100 Dollars ($320,000.00)
commencing on the Effective Date through the first anniversary of such date; and
(ii) one hundred and five percent (105%) of the prior year's annual base salary
for each 12-month period thereafter (such annual base salary, as then in effect,
together with the Additional Salary described in Section2.1(b) below, the
"Salary"), which shall be payable in equal periodic installments in accordance
with the Employer's customary payroll practices, but in no event less frequently
than twice each month. Employer shall deduct from the base salary, income tax
withholdings and social security deductions. If the Employer shall acquire a
majority of the shares of Odd Job Stores, Inc. or merges or consolidates into or
with Odd Job Stores, Inc., Employer and Executive will negotiate options in Odd
Job Stores, Inc. to be granted to Executive as part of Executive's compensation.
(B) ADDITIONAL SALARY. (i) In addition to the base salary, the
Executive shall be paid an additional salary (the "Additional Salary") subject
to and in accordance with the provisions of this Section 2.1(b). Net Income of
the Employer shall be determined for each of the following periods (each a
"Period"): (1) the Effective Date through December 31, 2003, (2) January 1, 2004
through December 31, 2004, (3) January 1, 2005 through December 31, 2005, and
(4) each succeeding calendar year during the term hereof. If Net Income of the
Employer for any Period shall be positive then promptly after the calculation of
such Net Income of the Employer for such Period, the Executive will be paid
compensation as Additional Salary equal to $55,000, provided that (1) with
respect to the first Period and the last Period (if it consists of less than 12
months) said amount of $55,000 will be prorated, (2) commencing with calendar
year 2008 said amount of $55,000 will increase 5% per annum and (3) if (I) Net
Income of the Employer for the Period ending December 31, 2003 is not positive
and/or Net Income of the Employer for the Period ending December 31, 2004 is not
positive and/or due to the provisions of Section 2.1(b)(ii) the Executive does
not receive the full Additional Salary for one or both of said first two Periods
and (II) the Net Income for the Period ending December 31, 2005 is positive,
then in addition to the Additional Salary payable for the Period ending December
31, 2005, the Executive will also be entitled to receive Additional Salary for
such prior Period(s) when Net Income of the Company was not positive or was
insufficient to pay the total Additional Salary, subject, however to the
provisions of Section 2.1(b)(ii) below. As used herein, the term "Net Income of
the Employer" shall mean net income of the Employer (A) before acquisition debt
service, but after debt service incurred in the ordinary course of business for
operating expenses (whether a term or revolving facility); (B) before federal,
state and local taxes, amortization, depreciation and other non-cash expenses,
(C) without including extraordinary non-recurring expenses (including without
limitation, severance payments to employees and one time extraordinary charges)
and (D) after deducting a management fee to Ascend Retail Investment LLC in
amount of $1,000,000.
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(ii) Notwithstanding the foregoing, if the aggregate Additional
Salary for the Executive plus the aggregate Additional Salary for Xxxx
Xxxxxxxxxx payable during any Period (the "Applicable Period"), if not for the
provisions of this clause (ii) and, the provisions of Section 2.1(b) in Xx.
Xxxxxxxxxx'x employment agreement with the Executive, shall exceed Net Income of
the Employer for the Period immediately preceding the Applicable Period, then
the aggregate Additional Salary payable to the Employee during the Applicable
Period shall equal one-half of the Net Income of the Employer for the Period
immediately preceding the Applicable Period.
(C) BONUS COMPENSATION. In addition to the Salary, within 105 days
after the end of each calendar year during the Employment Period, the Executive
shall receive bonus compensation (which shall consist of a cash bonus and/or
options or warrants to purchase ownership interests in the Employer) as the
compensation committee of the Employer shall determine. The compensation
committee of the Employer shall initially consist of Xxxxxxx Xxxxxx and Xxxxxxx
Xxxxxx.
(D) BENEFITS. During the Employment Period, the Executive shall be
entitled to (i) all of the benefits received by the Executive under his prior
employment with Amazing Savings Holding LLC including, without limitation,
comprehensive medical and dental insurance for the Executive and the members of
his or her immediate family, (ii) a leased car and (iii) such other benefits as
the Employer shall hereafter from time to time make available to one or more of
its senior executive officers. In addition, during the Employment Period, the
Employer shall reimburse the Executive for (A) the use and maintenance of a cell
telephone and (B) membership in an "airline lounge program" maintained by an
airline selected by the Executive in his sole discretion, provided, however,
that the Employer's obligation to reimburse the Executive pursuant to this
subsection (B) shall not exceed $500 annually. If the Executive flies west of
Chicago on company business, the Executive will be entitled to fly first-class.
The benefits to which the Executive is entitled pursuant to this Section 2.1(d)
are hereinafter referred to as the "Benefits".
(E) EXPENSES. The Employer shall pay on behalf of the Executive (or
reimburse the Executive for) reasonable expenses incurred by the Executive at
the request of, or on behalf of, the Employer in the performance of the
Executive's duties pursuant to this Agreement, and in accordance with the
Employer's employment policies. The Executive shall file expense reports with
respect to such expenses in accordance with the Employer's policies.
3. VACATIONS AND HOLIDAYS
The Executive shall be entitled to four weeks paid vacation during
each calendar year in accordance with the vacation policies of the Employer in
effect for its executive officers from time to time. The Executive shall also be
entitled to paid holidays for all Jewish holidays under Orthodox Jewish law and
the paid Federal or New York State holidays for employees of the Employer as set
forth in the Employer's policies.
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4. TERMINATION
4.1 EVENTS OF TERMINATION
The Executive's employment and all of Executive's rights under this
Agreement or otherwise as an employee of the Employer shall terminate (except as
otherwise provided in this Section 4), or be subject to termination, prior to
the expiration of the Employment Period as follows:
(A) The Executive's employment hereunder shall terminate upon the
death of the Executive.
(B) The Executive's employment hereunder shall terminate 15 days
after the Employer gives a notice of termination to the Executive at any time
after the Executive shall be deemed to have become Disabled unless the Executive
resumes his duties prior to the termination date specified in the Employer's
written notice of termination. For purposes of this Agreement, the Executive
shall be deemed to have become "Disabled" if, for medical reasons, the Executive
is unable to perform his or her duties hereunder for one hundred eighty (180)
consecutive days, as determined in accordance with this Section 4.1(b). The
Disability of the Executive shall be determined by a medical doctor (the
"Medical Doctor") selected by the Managing Member of the Employer. The Executive
shall submit to a reasonable number of examinations by the Medical Doctor and
the Executive hereby authorizes the disclosure and release to the Employer of
the Medical Doctor's determination and all supporting medical records (the
"Medical Information"). The Employer agrees to treat any Medical Information
disclosed to it hereunder as strictly confidential and to only use such
information as may be reasonably necessary for the determination of whether the
Executive has become Disabled. If the Executive is not legally competent, the
Executive's legal guardian or duly authorized attorney-in-fact shall act in the
Executive's stead for the purposes of submitting the Executive to the
examinations and for providing the authorization of disclosure required under
this Section 4.1(b).
(C) The Employer may, at any time, terminate Executive's employment
hereunder for Cause. For purposes of this Agreement, "Cause" shall mean the
Executive's willful and repeated failure to perform any of his material duties
hereunder which is not remedied within thirty (30) days after receipt of a
written notice from the Company authorized by the Managing Member of the
Employer specifically describing such failure and demanding the cure thereof.
(D) The Employer may terminate the Executive's employment upon 15
days notice if the Executive is convicted of any felony (i) which involves the
money or property of the Employer, (ii) which involves moral turpitude or (iii)
which materially and adversely affects the Executive's ability to perform its
duties hereunder.
(E) The Executive may, at any time, terminate his or her employment
hereunder for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the Employer has breached its material obligations under this Agreement and
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has failed to cure such breach within 30 days after receipt of a written notice
from the Executive specifically describing such failure and demanding the cure
thereof.
(F) The Executive may terminate his or her employment if (i) (1) the
Employer shall, directly or indirectly, sell all or substantially all of its
assets (other than in the ordinary course of its business), or (2) Employer
ceases to be controlled, directly or indirectly, by Xxxxxxx Xxxxxx, Xxxxxxx
Xxxxxx and members of their family, and (ii) the Executive's duties or
responsibilities are materially diminished.
4.2 TERMINATION PAY
(A) Effective upon the termination of Executive's employment
hereunder, the Employer shall be obligated to pay the Executive (or, in the
event of his or her death, his or her Designated Beneficiary (as defined below))
his or her Salary only through the date of such termination, subject however to
the provisions of Section 4.2(c). For purposes of this Agreement, the
Executive's "Designated Beneficiary" shall be such individual beneficiary or
trust, located at such address, as the Executive may designate by notice to the
Employer from time to time or, if the Executive fails to give notice to the
Employer of such a beneficiary, the Executive's estate. Notwithstanding the
preceding sentence, the Employer shall have no duty, in any circumstances, to
attempt to open an estate on behalf of the Executive, to determine whether any
beneficiary designated by the Executive is alive or to ascertain the address of
any such beneficiary, to determine the existence of any trust, to determine
whether any Person purporting to act as the Executive's personal representative
(or the trustee of a trust established by the Executive) is duly authorized to
act in that capacity or to locate or attempt to locate any beneficiary, personal
representative or trustee if no such notice with respect thereto has been given
by Executive to Employer. For purposes of this Agreement, a "Person" shall mean
any individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization or governmental body.
(B) The Executive's accrual of, or participation in plans providing
for the Benefits shall cease on the date of termination of this Agreement and
the Executive shall be entitled to accrued Benefits pursuant to such plans only
as provided in such plans. The Executive shall not receive, as part of his or
her termination pay pursuant to this Section 4, any payment or other
compensation for any vacation, holiday, sick leave or other leave unused on the
date the notice of termination is given under this Agreement.
(C) Notwithstanding anything in this Section 4.2 to the contrary, if
the employment of the Executive shall terminate (i) because the Employer gave a
notice to the Executive pursuant to Section 1.2 electing not to renew the then
applicable five or three year employment period, (ii) pursuant to Section 4.1(e)
or (iii) pursuant to Section 4.1(f), Employer shall pay to the Executive twelve
(12) monthly payments on the first day of the month following the month in which
the Executive's employment terminates and on the first day of each month
thereafter through and including the 12th month after the month in which the
termination occurs, an amount equal to the sum of (A) Executive's monthly Salary
in effect immediately prior to the date of termination and (B) the monthly
amount of all premiums and other costs which would otherwise be incurred by
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Employer to maintain in full force and effect for the continued benefit of the
Executive and Executive's dependents, all life, health and disability insurance
programs of Employer immediately prior to the date of termination.
5. NON-COMPETITION AND NON-INTERFERENCE
5.1 COVENANTS OF THE EXECUTIVE
(A) NON-COMPETITION. The Executive shall not, for a period commencing
on the date hereof and ending on the Applicable Outside Date (the
"Post-Employment Period"), engage or invest in, own, manage, operate, finance,
control or participate in the ownership, management, operation, financing or
control of, or be employed by any retail closeout business or wholesale closeout
business in the United States which is in competition with the business being
conducted or imminently planned to be conducted by Employer during the
Employment Period (while he or she is an employee) or at the time of his or her
termination (during the Post-Employment Period). Notwithstanding the foregoing,
the restrictions on the Executive's activities described above shall not be
deemed to include the Executive's direct or indirect ownership of any equity
securities in a publicly-traded business entity which does not, and will not
with the passage of time, result in the Executive's obtaining, directly or
indirectly, more than five percent (5%) of the relevant class of equity security
or "control" (as such term is used in the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder) of such entity.
(B) NON-SOLICITATION. The Executive shall not, whether for the
Executive's own account or for the account of any other Person, at any time
during the Employment Period and the Post-Employment Period (i) solicit, employ
or otherwise engage as an employee, independent contractor or otherwise, any
person who during the Employment Period is an employee of the Employer, or in
any manner induce or attempt to induce any then current employee of the Employer
to terminate his or her employment with the Employer or (ii) solicit any entity
which was a vendor of the Employer during the Employment Period with respect to
the purchase of closeout goods.
(C) EXCEPTION. Notwithstanding anything herein to the contrary, the
restrictions described in clauses (a) and (b) above shall not apply at any time
after the Employer defaults in its obligations under Section 4.2(c) if such
default remains uncured for 30 days after written notice from the Executive.
(D) APPLICABLE OUTSIDE DATE. As used herein, the term "Applicable
Outside Date" shall mean (i) the one year anniversary of the date on which
Executive's employment terminates hereunder, if this Agreement terminates (1) as
a result of the Employer or the Executive giving a notice pursuant to Section
1.2 electing not to renew the term of this Agreement or (2) pursuant to Sections
4.1(b) or 4.1(f); and (ii) the three year anniversary of the date on which the
Executive's employment terminates hereunder (two year anniversary, if on the
date the Executive's employment terminates Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and
members of their family do not control (directly or indirectly) Employer), with
respect to the covenants set forth in Section 5.1(a) and Section 5.1(b) relating
to the retail closeout business, and the two year anniversary of the date on
which the Executive's employment terminates hereunder (one year anniversary, if
on the date the Executive's employment terminates Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx
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and members of their family do not control (directly or indirectly) Employer),
with respect to the covenants set forth in Section 5.1(a) and Section 5.1(b)
relating to the wholesale closeout business, if this Agreement terminates
pursuant to Sections 4.1(c) or 4.1(d), provided that if as of the date the
Executive's employment terminates hereunder more than 25% of the Employer's
gross revenue is derived from the wholesale closeout business (it being
understood that sales by Employer to XxxxxXxxxx.xxx LLC shall be deemed sales
derived from the retail closeout business) the Applicable Outside Date shall
mean the three year anniversary of the date on which the Executive's employment
terminates hereunder (two year anniversary, if on the date the Executive's
employment terminates Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and members of their family
do not control (directly or indirectly) Employer), with respect to the covenants
set forth in Section 5.1(a) and Section 5.1(b) relating to the wholesale
closeout business.
6. GENERAL PROVISIONS
6.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be suffered by
the Employer as a result of a violation, or threatened violation, of any of the
provisions of this Agreement (including, without limitation, any provision of
Section 5) would be irreparable and that an award of monetary damages to the
Employer for such a breach would be an inadequate remedy. Consequently, the
Employer shall have the right, in addition to any other rights it may have, to
obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement, and the
Employer shall not be obligated to post bond or other security in seeking such
relief.
6.2 REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE
The Executive represents and warrants to the Employer that the
execution and delivery by the Executive of this Agreement do not, and the
performance by the Executive of the Executive's obligations hereunder shall not,
with or without the giving of notice or the passage of time, or both (a) violate
any judgment, writ, injunction or order of any court, arbitrator or governmental
agency applicable to the Executive; or (b) conflict with, result in the breach
of any provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which the Executive is or may
be bound. The Executive represents that he or she is not bound by any agreement
or any other existing or previous business relationship which conflicts with, or
may conflict with, the performance of his or her obligations hereunder or
prevent the full performance of his or her duties and obligations hereunder
6.3 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power or privilege under this Agreement shall
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege shall preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law (a)
no claim or right arising out of this Agreement may be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
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writing signed by the other party, (b) no waiver that may be given by a party
shall be applicable except in the specific instance for which it is given and
(c) no notice to or demand on one party shall be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement.
6.4 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns, heirs and
legal representatives. Neither the Employer nor the Executive may assign its
rights under this Agreement without the prior written consent of the other
party. The duties and covenants of the Executive under this Agreement, being
personal, may not be delegated. This Agreement shall become effective upon the
Effective Date. If Employer shall merge into or consolidate with or enter into
another form of business combination with any other entity (including, without
limitation, Odd Job Stores, Inc.), the surviving entity (or parent entity if the
Employer were to become a subsidiary of Odd Job Stores, Inc. or another entity
in connection with the business combination) will automatically assume all of
the obligations of Employer hereunder and Employer shall perform his duties
hereunder for such successor entity and, notwithstanding anything to the
contrary contained in this Section 6.4, this Agreement may be assigned to such
successor entity.
6.5 NOTICES
All notices, consents, waivers and other communications under this
Agreement shall be made in writing and shall be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) or when
received by the addressee or delivery is refused by addressee, if sent by a
nationally recognized overnight delivery service (receipt requested) or
certified mail, return receipt requested, in each case to the appropriate
addresses set forth below (or to such other addresses as a party may designate
by notice to the other parties):
If to the Employer:
Amazing Savings Holding LLC
00 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
With copies to:
Xxxxxx Capital Group
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
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If to the Executive:
Xxxxx Xxxxxxxx
0 Xxx Xxxxx
Xxxxxx, XX 00000
6.6 ENTIRE AGREEMENT; AMENDMENTS
This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof. This Agreement may not be amended orally, but only by an
agreement in writing signed by the parties hereto.
6.7 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to conflicts of laws
principles.
6.8 JURISDICTION
Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought against either
of the parties in the courts of the State of New York, County of New York or, if
it has or can acquire jurisdiction, in the United States District Court for the
Southern District of New York, and each of the parties hereto hereby consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding, and waives any objection to venue laid therein.
6.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and shall not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words used in this
Agreement shall be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms. This Agreement has been jointly drafted by
the respective representatives of the Employer and the Executive and no party
shall be considered as being responsible for such drafting for the purpose of
applying any rule construing ambiguities against the drafter or otherwise. No
draft of this Agreement shall be taken into account in construing this
Agreement.
6.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement
shall remain in full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree shall remain in full force and
effect to the extent not held invalid or unenforceable.
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6.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original copy of this Agreement and all of which,
when taken together, shall be deemed to constitute one and the same agreement.
6.12 NO BROKER
The parties represent that no Person has acted as a broker or job
placement agent in connection with this Agreement.
6.13 EFFECTIVE DATE
As used herein, the term "Effective Date" shall mean the date on
which Employer acquires 66 2/3% or more of the outstanding shares of Odd Job
Stores, Inc., an Ohio Corporation ("OJS"), provided that upon the termination of
the tender offer for OJS, this Agreement will be null and void. On the Effective
Date the existing employment agreement dated May 1, 2002 between the Employer
and the Executive will terminate.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
EMPLOYER:
AMAZING SAVINGS HOLDING LLC
By: Amazing Savings/J.B.S.
Liquidators, Inc., Managing Member
prior to the effective date of the
second amended and restated limited
company agreement of Employer
By: /s/ Xxx Xxxxxxxxx
--------------------------------
Name: Xxx Xxxxxxxxx
Title: President
By: Ascend Retail Partners LLC, Member
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Member
By: Ascend Retail Investment LLC,
Managing Member from and after the
effective date of the second amended
and restated limited company
agreement of Employer
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Member
EXECUTIVE:
/s/ Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx
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