EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") dated June 1, 1999 is between
Garden Ridge Management, Inc., a Delaware corporation (the "Company"), and
Xxxxxx Xxxxxxx (the "Executive").
WHEREAS, the retail and business operations are conducted by and through
the Company and the Company is indirectly owned by Garden Ridge Corporation, a
Delaware corporation ("Garden Ridge"); and
WHEREAS, the Company desires to retain the services of the Executive as
Chairman of Garden Ridge, and the Executive desires to be retained in such
capacity, all upon the terms and subject to the conditions set forth in this
Agreement.
Accordingly, the parties agree as follows:
1. TERM. The term of the Executive's employment hereunder shall commence
on June 1, 1999 (the "Effective Date") and shall continue until the third
anniversary thereof (the "Term"), unless sooner terminated pursuant to Section 7
of this Agreement.
2. EMPLOYMENT. As of the Effective Date, the Company agrees to employ the
Executive and the Executive accepts such employment upon the terms and
conditions of this Agreement. The Executive shall devote to the business of
Garden Ridge such amount of time as determined by the Board of Directors;
PROVIDED, HOWEVER, that the Executive shall be permitted to (i) make personal
investments, (ii) engage in charitable activities and (iii) serve as a member of
the board of directors of corporations other than Garden Ridge and its
subsidiaries, in all cases, to the extent that such activities do not materially
interfere with his duties hereunder.
3. DUTIES. The Executive is employed to serve at all times during the Term
as Chairman of Garden Ridge. He shall do and perform such duties and render such
services as customarily performed by a person in such capacity, subject always
to the policies of the Board of Directors of the Company of Garden Ridge (the
"Board of Directors"). Notwithstanding anything to the contrary herein, all
references to the rights, duties and obligations of the Executive hereunder,
including without limitation the duties of the Executive in serving as Chairman
hereunder, shall relate to the Executive in his capacity as an officer of Garden
Ridge, and shall not refer to any right, duty or obligation of the Executive in
the Executive's capacity as a director of the Company, Garden Ridge or any of
their respective affiliates.
4. COMPENSATION. As compensation for all the services to be rendered
pursuant to this Agreement, the Company shall pay the Executive a base
compensation of $350,000 per annum (the "Base Compensation") payable in
accordance with the regular payroll practices for executives of the Company;
PROVIDED, HOWEVER, that the Executive's Base Compensation shall be appropriately
prorated in the case of a partial year.
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5. EXECUTIVE BENEFITS.
5.1 FACILITIES, SERVICES AND AMENITIES. The Executive shall not
maintain an office at the Company's facilities, but the Company shall provide
the Executive with office facilities and a secretary at a location determined by
the Executive, and other services and amenities substantially similar to the
existing practices of the Company.
5.2 FRINGE BENEFIT PLAN. During the Term, the Executive shall be
entitled to participate in all plans and receive all rights and benefits for
which he shall be eligible under any pension, deferred compensation, health,
hospitalization, disability or group life insurance or other so-called "fringe"
benefit plan which the Company provides for its executives generally. After the
Term and until the Executive reaches age 65, the Executive shall be entitled to
participate, at his expense, in all plans and receive all rights and benefits
for which he shall be eligible under any pension, deferred compensation, health,
hospitalization, disability or group life insurance or other so-called "fringe"
benefit plan which the Company provides for its executives generally.
5.3 VACATION. The Executive shall be entitled to paid vacation
pursuant to the Company's existing vacation policy.
6. BUSINESS EXPENSES. The Company shall pay or reimburse the Executive for
all reasonably incurred travel, hotel, entertainment and other business expenses
upon presentation by him of an itemized account of such expenditures in
accordance with the Company's procedures.
7. TERMINATION.
7.1 EVENTS OF TERMINATION.
7.1.1 The Company may terminate this Agreement prior to the
last day of the Term upon the occurrence of any one or more of the following
events:
(a) the death of the Executive;
(b) a determination of the Disability (as hereinafter
defined) of the Executive;
(c) any material violation by the Executive of the
non-compete or confidentiality covenants set forth in Section 8 of
this Agreement;
(d) a material and willful violation of this Agreement
or any lawful direction of the Board of Directors consistent with
this Agreement;
(e) the commission by the Executive of a willful or
grossly negligent act in bad faith that causes material harm to the
Company as determined by a majority of the Board of Directors;
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(f) a final, unappealable conviction of the Executive in
a court of law of any crime or offense resulting in imprisonment, or
that involves fraud, theft, or embezzlement from the Company, except
as may result from actions or omissions to act that were directed by
the Board of Directors; or
(g) any drug, alcohol or other substance addiction on
the part of the Executive;
PROVIDED, HOWEVER, that termination of this Agreement under clauses (b) through
(g) shall be made upon written notice to the Executive by the Company,
specifying in reasonable detail the reason therefor. The term Disability shall
mean, with respect to the Executive, that due to physical or mental infirmity,
whether total or partial, the Executive is substantially unable to perform his
services hereunder, as determined by the Company's disability carrier, for a
period of six months in the aggregate during any twelve month period.
7.1.2 The Company may terminate this Agreement for any reason
other than the events listed in Sections 7.1.1(c) through (g); PROVIDED,
HOWEVER, that in such event the Executive shall be entitled to receive the
amounts described in Section 7.2.2.
7.1.3 If the Executive resigns or terminates this Agreement
for any reason, the Executive shall be entitled to receive the amounts described
in Section 7.2.2.
7.1.4 If the Executive resigns or terminates this Agreement
because of a willful breach by the Company of its obligations under this
Agreement that continues after notice to the Board of Directors and reasonable
opportunity to cure such breach or because of instructions by the Board of
Directors to perform an unlawful act, then in addition to the Executive being
entitled to receive the amounts described in Section 7.2.2, the Executive shall,
notwithstanding the provisions of Sections 7.2.2 or 8.1, be released from any
obligations under Section 8.1.
7.2 EFFECT OF TERMINATION.
7.2.1 In the event of a termination of this Agreement under
Sections 7.1.1(a) and 7.1.1(c) through (g), the Executive shall be entitled to
receive, within fifteen days of such termination (a) any portion of the Base
Compensation relating to the period prior to the date of such termination which
has not been paid, and (b) all reimbursements due the Executive from the Company
for expenses specified in Section 6 which have not been paid.
7.2.2 In the event of a termination of this Agreement under
Sections 7.1.1(b), 7.1.2, 7.1.3 or 7.1.4, the Executive shall be entitled to
receive the Base Compensation that would have been payable to the Executive
through the end of the Term had this Agreement otherwise not been terminated
hereunder; PROVIDED, HOWEVER, that if the Executive violates at any time the
non-compete or confidentiality covenants set forth in Section 8 of this
Agreement (except to the extent that the Executive may have been released from
such covenants pursuant to Section 7.1.4 if such provision is applicable), the
Executive shall have no right thereafter to receive any compensation or benefit
hereunder.
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7.2.3 In the event of a termination of this Agreement prior to
the end of the Term, the rights and benefits identified in Section 5.2 shall
continue until the end of the Term.
7.2.4 If the Company terminates this Agreement, the Executive
or his legal representative, as the case may be, shall have no claim against the
Company and this Agreement shall become null and void and have no further force
or effect, except that this Section 7.2 and Section 8 shall survive any such
termination.
8. CERTAIN COVENANTS OF THE EXECUTIVE.
8.1 NON-COMPETE AGREEMENT. During the Term and for a period ending
on the second anniversary of the end of the Term (the "Restricted Period"), the
Executive covenants and agrees that he shall not, directly or indirectly, (a)
engage in any business that competes with Garden Ridge (as hereinafter defined)
within the United States, or (b) contact or solicit any of the suppliers of
Garden Ridge for the purpose of causing or attempting to cause any such person
to change materially its relationship with Garden Ridge. As used in this Section
8.1, a business shall be considered to "compete with Garden Ridge" only if more
than 30% of the sales revenues of such business is attributable to the retail
sale of goods which are the same or substantially similar to those categories of
goods being offered for sale by Garden Ridge at retail as of the end of the Term
(or, if being determined as of any time prior to the end of the Term, than as of
such time).
8.2 CONFIDENTIAL INFORMATION. During the Term and at all times
thereafter, the Executive covenants and agrees that he shall keep secret and
retain in strictest confidence, and shall not use for the benefit of himself or
others except in connection with the business and affairs of Garden Ridge and
its affiliates, all confidential matters of Garden Ridge, if any, including,
without limitation, trade secrets, customer lists, financial data and other
proprietary information of Garden Ridge and all information about Garden Ridge
(financial or otherwise), learned by the Executive heretofore or hereafter, and
shall not disclose them to any person outside Garden Ridge, either during or
after employment by Garden Ridge, except as required in the course of performing
duties hereunder or with Garden Ridge express written consent.
8.3 REMEDIES. If the Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Section 8.1 or 8.2, the Company
shall have the right and remedy (in addition to, and not in lieu of, any other
rights or remedies available to the Company under law or in equity) (i) to have
the provisions of this Agreement specifically enforced by a court having
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to Garden Ridge and that money
damages will not provide an adequate remedy to Garden Ridge for any breach
thereof, and (ii) to require the Executive to account for and pay over to the
Garden Ridge all compensation, profits, monies or other benefits derived or
received by the Executive as a result of any breach of any of the provisions of
Section 8.1 or 8.2, and the Executive hereby agrees to account for and pay over
all such amounts to the Company.
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8.4 LIMITATION ON LIABILITY. Notwithstanding anything to the
contrary contained in this Agreement, the Executive shall be liable to the
Company under this Agreement solely for a breach of any of the provisions of
Section 8.1 or 8.2, and the Executive shall have no obligations or liability for
any breach of or default in any other provisions hereof including, without
limitation, the Executive shall have no liability hereunder in the event the
Executive resigns or terminates this Agreement for any reason.
9. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if delivered personally to the
Executive or sent by certified or registered mail to his residence at 00 Xxxxx
Xxxxx Xxxxxx Xxxx, Xxxxx 00, Xxxxxxx, Xxxxx 00000 in the case of the Executive,
or to the principal office of the Company at 00000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-0000 in the case of the Company, or to such other address
as either party may hereafter notify the other.
10. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach by that party.
11. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas applicable to agreements made and
to be performed entirely within such state.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties in respect of the Executive's employment and employment compensation.
13. SECTION HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
14. SEVERABILITY. If any provision or any portion of any provision of this
Agreement shall be arbitrated or adjudicated to be invalid or unenforceable
under law, the parties hereto agree that the remainder of this Agreement shall
not be affected thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
GARDEN RIDGE MANAGEMENT, INC.
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx, Chief Executive Officer
/s/ XXXXXX XXXXXXX
Xxxxxx Xxxxxxx
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