EXHIBIT 10.03
FORGIVABLE PROMISSORY NOTE
$25,000.00 Canton, Massachusetts
November 24, 1997
FOR VALUE RECEIVED, the undersigned, JAMES D. LEE ("Payor"), promises
to pay to the order of J. Baker, Inc., a Massachusetts corporation, at 555
Turnpike Street, Canton, Massachusetts 02021 ("Lender"), the principal sum of
Twenty Five Thousand Dollars ($25,000.00), or so much thereof as may be
outstanding all upon the terms and provisions herein ("Principal Amount").
If Payor remains employed by Lender, or by any company directly or indirectly
controlled by Lender through the following dates, the outstanding Principal
Amount of this Note shall automatically be reduced to the amount indicated:
Date Outstanding Principal Amount
Prior to 1st year anniversary from July 1, 1997 Full Amount of Loan
1st year anniversary from July 1, 1997 $20,000.00
2nd year anniversary from July 1, 1997 $15,000.00
3rd year anniversary from July 1, 1997 $10,000.00
4th year anniversary from July 1, 1997 $ 5,000.00
5th year anniversary from July 1, 1997 $ 0.00
If Payor remains employed by Lender through July 1, 2002, this Note shall
automatically be canceled and no amount shall be due hereunder.
If at any time prior to July 1, 2002, Payor is no longer employed by Lender for
any reason whatsoever (including, without limitation, resignation, termination,
layoff, death, disability or wrongful discharge), the outstanding Principal
Amount of this Note shall be immediately due and payable on the last day of
Payor's employment. Notwithstanding the foregoing, in the specific instance
where Lender eliminates Payor's position with Lender and does not reassign Payor
into another position with Lender, this Note will be forgiven and does not have
to be repaid. All payments due Lender pursuant to this Note shall be made by
certified check to Lender. At such time as Payor is no longer employed by
Lender, interest on the outstanding Principal Amount shall accrue and be payable
on the last day of each month, in arrears, at an interest rate per annum of nine
percent (9%). Interest will be computed on the basis of a 360-day year,
compounded monthly.
Nothing contained herein shall be construed as creating an employment contract
and Payor's employment with Lender and Lender's employment of Payor shall be
at-will and terminable at any time by either Lender or Payor, with or without
cause.
For as long as Payor remains employed by Lender, this Note shall not bear any
interest. However, IRS regulations require, with respect to non-interest bearing
loans (or below market loans) in excess of $10,000.00 between an employer and an
employee, that the amount of foregone interest (that is, interest which has not
been charged by the lender) be treated as taxable compensation income to the
Payor.
Payor shall be responsible for any federal, state or local taxes which may be
payable as a result of the forgiveness of the loan whereas this forgiveness
shall be considered taxable income. Payor should seek the advice of his or her
own tax advisor as to the tax consequences of this loan.
Lender is hereby authorized at any tine and from time to time to set off and
apply any and all indebtedness owing by Lender to Payor (including unpaid wages
and earned but unpaid vacation pay) and other assets or properties of Payor at
any time held in the possession, custody or control of Lender against any and
all of the outstanding Principal Amount and interest due under this Note.
Without limiting the foregoing, Payor hereby grants to Lender a continuing
security interest in and to all such indebtedness, assets and properties in the
possession of Lender.
Payor hereby waives presentment, demand for payment, protest and notice of
protest, and any or all other notices or demands in connection with the
delivery, acceptance and performance of this Note. No waiver of or modification
to this Note or any part hereof shall be effective unless contained in writing,
signed by the party against whom enforcement is sought. No delay or omission of
Lender in exercising any right or remedy hereunder shall constitute a waiver of
any such right or remedy. A waiver on one occasion shall not operate as a bar to
or waiver of any such right or remedy on any future occasion.
This Note shall inure to the benefit of Lender and its successors and assigns.
This Note shall be binding upon Payor and its successors.
This Note shall be deemed to be under seal and shall be governed and construed
according to the laws of the Commonwealth of Massachusetts without reference to
the principles of conflict of law thereof.
/s/ James D.Lee
[ Employee Name ]
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[ Employee Address ]
/s/Alan I. Weinstein
Authorized Corporate Signature
November 24, 1997
Date