Exhibit 10-11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), made effective the 17th day of
March, 2003 (the "Effective Date") by and among ODD JOB STORES, INC., an Ohio
corporation (the "Company"), and STEVEN FURNER (the "Employee"), is to evidence
the following agreements and understandings:
WITNESSETH:
WHEREAS, the Employee was appointed as interim Chief Executive Officer of
the Company on December 2, 2002.
WHEREAS, the Company desires to formalize the employment relationship and
employ Employee as its Chief Executive Officer, and Employee wishes to accept
such employment, on the terms contained herein.
NOW, THEREFORE, the parties agree as follows:
1. Duties. The Employee, in his capacity as Chief Executive Officer,
shall faithfully perform for the Company the duties of said office and shall
perform such other duties of an executive, managerial or administrative nature
as shall be specified and designated from time to time by the Company's Board
of Directors (the "Board of Directors"). In his capacity as an officer of the
Company, the Employee shall have the executive authority, responsibilities and
duties typically held and executed by a Chief Executive Officer of a publicly
held corporation. Without limiting the foregoing, all officers and employees
and all operations and divisions of the Company shall report to Employee or his
designees and the Employee shall report solely to the Board of Directors and
its committees. The Employee shall devote substantially all of his business
time and effort to the performance of his duties hereunder.
2. Compensation.
2.1 Salary. While Employee is employed full-time by the company
as Chief Executive Officer, the Company shall pay the Employee a salary at the
rate of Five Hundred Thousand Dollars ($500,000) per annum (the "Annual
Salary"). The Annual Salary shall be payable in accordance with the Company's
standard payroll practices, less such deductions as shall be required to be
withheld by applicable law and regulations.
2.2 Annual Bonus. Subject to the terms, conditions and
limitations set forth below, the Employee shall be entitled to receive an
annual bonus (the "Annual Bonus") commencing with the fiscal year ending
December 31, 2003. The maximum Annual Bonus for any fiscal year shall be Two
Hundred Fifty Thousand Dollars ($250,000). For the fiscal year ending December
31, 2003, the Annual Bonus shall be awarded in accordance with the schedule set
forth on Exhibit A hereto (the "Bonus Criteria"). For each succeeding fiscal
year thereafter, for so long as Employee remains employed by the Company as
Chief Executive Officer, the Annual Bonus shall be awarded in such amounts and
to the extent the Company reaches the then-applicable Bonus Criteria as
determined by the Compensation Committee of the Board of Directors prior to the
end of the first quarter of such fiscal year, after consulting with the
Employee, and attached to this Agreement as a replacement to Exhibit A. The
Annual Bonus for each fiscal year shall be paid in full to the Employee as soon
as practicable (but not later than thirty (30) days) after the Company's
audited financial statement for such fiscal year is available to the Company.
2.3 Special Bonus. In the event of a Change in Control (as
defined in Section 5 hereof) closing on or before December 31, 2004, the
Employee shall be paid a one-time bonus (the "Special Bonus") in the amount of
Three Hundred Thousand Dollars ($300,000). The Special Bonus shall be paid to
the Employee in a single lump sum payment as soon as practicable (but in no
event later than 30 days) after the closing date of any such Change in Control.
2.4 Benefits. The Employee shall be permitted during the time
that the Employee is employed by the Company as Chief Executive Officer (the
"Term") to participate in any group life, hospitalization or disability
insurance plans, health programs, pension plans or similar benefits that may be
available to other senior executives of the Company generally, on the same
terms as such other executives, in each case to the extent that the Employee is
eligible under the terms of such plans or programs. Without limiting the
foregoing, the benefits include term life insurance in an amount equal to one
times Employee's Annual Salary, up to $500,000. The Company agrees to purchase
additional group term life insurance or disability insurance in the amounts
determined by the Employee, provided that the maximum annual aggregate premiums
for such additional insurance shall not exceed $10,000. The Employee shall
also be entitled to receive vacation of four (4) weeks per year.
2.5 Expenses. The Company shall pay or reimburse the Employee
for all reasonable expenses actually incurred or paid by the Employee during
the Term in the performance of the Employee's services under this Agreement.
1. Term of Employment.
3.1 At Will Employment. Subject to and in accordance with the
terms set forth below, Employee's employment by the Company is "At Will" and
employment can be terminated at any time by either party for any reason.
3.2 Effect of Termination. Except as otherwise provided in this
Agreement, in the event of Employee's termination of employment with the
Company for whatever reason or in the event of Employee's Voluntary
Resignation, Employee shall have no right to receive any compensation or
benefit hereunder on and after the date of such termination or Voluntary
Resignation (the "Termination Date"), other than: (a) Annual Salary and other
benefits earned and accrued under this Agreement up to the Termination Date
(specifically excluding any portion of the Annual Bonus); and (b) reimbursement
under this Agreement for expenses incurred prior to the Termination Date.
1. Covenants of the Employee.
4.1. Non-Compete. During the period commencing on the Effective
Date and ending on the date twelve (12) months following the Termination Date
(the "Restricted Period"), the Employee shall not in the United States of
America render any services to or become interested in as a partner, officer,
director, shareholder, member, principal, agent, employee, consultant or in any
other relationship or capacity with any of the following direct competitors of
the Company or their affiliates: Big Lots, Inc.; Value City Department Stores,
Inc.; Dollar General, Inc., Family Dollar, Inc and Dollar Tree, Inc.
Notwithstanding the above, the Employee may own, directly or indirectly, solely
as an investment, securities of any such entity provided that Employee: is not
a controlling person of, or a member of a group which controls, such entity;
and such ownership does not exceed four percent (4%) or more of any class of
securities of such person or entity.
4.2 Confidentiality. As a consequence of Employee's employment
with the Company, Employee will receive and deal with confidential information
and business methods, including, but not limited to, advertisers, venues,
innovative proprietary technology and content, processes, programs, records,
reports, financial data, market data, marketing plans, unique business
practices, pricing techniques, relationships with customers and providers of
services, and other information relating to the Company's product development
and operations (collectively, the "Confidential Information").
During the Term, and from and after the Termination Date, the Employee
shall keep secret and retain in strictest confidence all Confidential
Information, and shall not disclose, rely on or otherwise use for his benefit
or the benefit of others, except in connection with the business and affairs of
the Company and its subsidiaries and affiliates, and shall not disclose the
Confidential Information to anyone outside of the Company or its subsidiaries
and affiliates, except with the Company's express written consent, except for
Confidential Company Information that: (a) is at the time of receipt or
thereafter becomes publicly known through no wrongful act of the Employee; (b)
is received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement; or (c) was previously known
by the Employee before being employed by the Company. Upon demand by the
Company, and in any event within three days following termination of Employee's
employment with the Company for any reason, Employee will surrender to the
Company all Confidential Information and all other original and facsimile
records, documents and data in his possession or under his control pertaining
to the Company.
Notwithstanding the foregoing, Employee may disclose Confidential
Information of the Company in order to comply with: (i) a subpoena issued by a
court having jurisdiction over Employee; or (ii) a written request made by any
regulatory authority or taxing authority having authority over such Employee;
provided, however, that prior to compliance with such request, Employee will
give notice to the Company to allow the Company to attempt to quash or limit
such subpoena or request.
4.3 Non-Solicitation. During the Restricted Period, the Employee
shall not, without the Company's prior written consent, directly or indirectly,
knowingly solicit, recruit or encourage to leave the employment of the Company
or its subsidiaries or affiliates, any employee of the Company, such
subsidiaries or affiliates, or hire any employee who has left the employment of
the Company, its subsidiaries or affiliates after the Effective Date within one
year of the termination of such employee's employment with the Company, its
subsidiaries or affiliates.
4.4 Rights and Remedies upon Breach. If the Employee breaches,
or threatens to commit a breach of, any of the provisions of this Section 4
(the "Restrictive Covenants"), the Company shall have the following rights and
remedies (upon compliance with any necessary prerequisites imposed by law upon
the availability of such remedies), each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights and
remedies shall be in addition to, and not in lieu of any other rights and
remedies available to the Company under law or in equity:
(a) The right and remedy to have the Restrictive
Covenants specifically enforced (without posting
bond) by any court having equity jurisdiction,
including, without limitation, the right to an
entry against the Employee of restraining orders
and injunctions (preliminary, mandatory,
temporary and permanent) against violations,
threatened or actual, and whether or not then
continuing, of such covenants, it being
acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury
to the Company and that money damages will not
provide an adequate remedy to the Company.
(b) The right and remedy to require the Employee to
account for and pay over to the Company all
compensation, profits, monies, accruals,
increments or other benefits (collectively,
"Benefits") derived or received by him as the
proximate result, i.e., actual damages, of a
breach of the Restrictive Covenants, and the
Employee shall account for and pay over such
Benefits to the Company.
5. Definitions.
5.1 "Cause" means (i) the conviction by the Employee of a felony
or of a crime of moral turpitude or dishonesty involving the Company (other
than pursuant to actions taken at the direction or with the approval of the
Board of Directors); (ii) the Employee's engagement in (A) willful misconduct,
(B) willful or gross neglect, (C) fraud, (D) misappropriation or (E)
embezzlement in the performance of his duties hereunder; or (iii) the
Employee's breach in any material respect of any of the terms and provisions of
this Agreement.
5.2 "Change in Control" means the occurrence while Employee is
employed full time by the Company as Chief Executive Officer of any of the
following events:
(a) the Company merges or consolidates with any other entity
and, as a result of such merger or consolidation, less
than 51% of the voting power of the then-outstanding
voting securities of the surviving or resulting entity
immediately after such transaction are directly or
indirectly beneficially owned in the aggregate by the
former shareholders of the Company immediately prior to
such transaction.
(b) A person or group acting in concert within the meaning of
Section 3(a)(9) or 13(d)(3) (as in effect on the Effective
Date) of the Securities Exchange Act of 1934 becomes the
beneficial owner (as defined in Rule 13d-3) of 50% or more
of the voting power of the then outstanding voting
securities of the Company.
5.3 "Voluntary Resignation" means Employee's unilateral act of
voluntarily terminating his employment relationship with the Company.
6. Other Provisions.
6.1 Severability. The Employee acknowledges and agrees that (i)
he has had an opportunity to seek advice of counsel in connection with this
Agreement and (ii) the Restrictive Covenants are reasonable in geographical and
temporal scope and in all other respects. If it is determined that any of the
provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.
6.2 Blue-Pencilling. If any court determines that any of the
covenants contained in this Agreement, including, without limitation, any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, the duration or scope of such
provision, as the case may be, shall be reduced so that such provision becomes
enforceable and, in its reduced form, such provision shall then be enforceable
and shall be enforced.
a.1 Enforceability; Jurisdictions. The Company and the Employee
intend to and hereby confer jurisdiction to enforce the
Restrictive Covenants upon the courts of any jurisdiction within
the geographical scope of the Restrictive Covenants. If the
courts of any one or more of such jurisdiction hold the
Restrictive Covenants wholly unenforceable by reason of breadth
of scope or otherwise, it is the intention of the Company and
the Employee that such determination not bar or in any way
affect the Company's right to the relief provided above in the
courts of any other jurisdiction within the geographical scope
of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions,
such Restrictive Covenants as they relate to each jurisdictions
being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of res
judicata.
6.4 Directors & Officers Insurance. During the Term, the
Employee shall be covered by the Company's directors' and officers' insurance
policy to the same extent as other officers and directors. Further, for a
period following the Termination Date consistent with the Company's policies
with respect to other senior management of the Company, the Company shall, to
the extent it retains in effect directors' and officers' liability insurance,
maintain for Employee coverage for acts or omissions occurring prior to the
Termination Date.
a.1 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered
personally, sent by facsimile or other electronic transmission
or sent by certified, registered or express mail, postage
prepaid. Any such notice shall be deemed given when so
delivered personally or sent by electronic transmission or, if
mailed, five days after the date of deposit in the United States
mails as follows:
(a) If to the Company, to:
Robert Horne
Chairman, Compensation Committee
c/o ZS Fund L.P.
120 West 45th Street, Suite 2600
New York, New York 10036
with a copy to:
Marc H. Morgenstern, Esq.
Kahn Kleinman, A Legal Professional Association
Erieview Tower, Suite 2600
1301 East Ninth Street
Cleveland, Ohio 44114-1824
(b) If to the Employee to:
Mr. Steve Furner
Chief Executive Officer
Odd Job Stores
200 Helen Street
South Plainfield, NJ 07080
Any such person may by notice given in accordance with this Section to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
a.1 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, with
respect thereto, which shall become null and void and of no
further force and effect on the Effective Date.
a.2 Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof
may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any
rights, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any
such right, power or privilege nor any single or partial
exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other
such right, power or privilege.
a.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio
without regard to principles of conflicts of law.
a.4 Assignment. This Agreement, and the Employee's rights and
obligations hereunder, may not be assigned by the Employee; any
purported assignment by the Employee in violation hereof shall
be null and void. In the event of any sale, transfer or other
disposition of all or substantially all of the Company's assets
or business, whether by merger, consolidation or otherwise, the
Company may assign this Agreement and its rights hereunder.
a.5 Indemnification.
(a) The Employee represents and warrants to the Company that the
Employee's execution, delivery and performance of this Agreement does not
and will not violate, conflict with or constitute a default (with notice
or lapse of time or both) under any written agreement or instrument to
which the Employee is a party.
(a) Subject to the provisions of this Section 6.10, to the fullest
extent permitted by law, the Company shall indemnify the
Employee if he is a party or is threatened to be made a party to
any legal proceeding (other than a legal proceeding against the
Employee by the Company) (a "Proceeding"), threatened or
pending, whether civil, criminal, administrative or
investigative, by reason of his service to the Company as a
director, officer, trustee, employee or agent, or service at the
written request of the Company as a director, officer, trustee,
employee or agent of another corporation, partnership, joint
venture, trust or enterprise, against the Employee's reasonable
attorneys' fees and disbursements, reasonable out-of-pocket
travel expenses to and from the forum of the Proceeding and
judgments, fines and amounts paid in settlement in connection
with the Proceeding. Such attorneys' fees and expenses shall be
paid by the Company as they are incurred upon receipt, in each
case, of an undertaking by the Employee to repay such amounts if
it is ultimately determined, as provided below, that the
Employee is not entitled to indemnification hereunder. The
Employee shall not settle any Proceeding without the prior
written consent of the Company unless, as a condition thereof,
the Company receives a full and unconditional release of all
liability in respect of the Proceeding. The Employee shall
provide the Company with prompt written notice of any Proceeding
in respect of which he is entitled to indemnification hereunder,
provided that the Employee shall not lose his rights to
indemnification hereunder for failure to give such notice unless
the Company is prejudiced by such failure.
(b) The indemnification provided for in Section 6.10(b) (1) shall
apply in all cases except where the Employee did not act or
failed to act in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Company or where the Employee's action or failure to act
constituted gross negligence or willful misconduct, or, with
respect to any criminal action or proceeding, where he did not
have reasonable cause to believe his conduct was lawful
(collectively, the "Standard of Care") and (ii) may be denied by
the Company only if a court of competent jurisdiction determines
that the Employee did not meet the Standard of Care.
(c) The indemnification provided by this Section shall survive
termination of the Employee's employment with the Company.
(d) The provisions of this Section 6.10 shall not be deemed to be
exclusive of any other rights to which the Employee may be
entitled under applicable law or any other written agreement
between the Company and the Employee.
a.1 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors,
permitted assigns, heirs, executors and legal representatives.
a.2 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed
and delivered shall be an original but all such counterparts
together shall constitute one and the same instrument. Each
counterpart may consist of two copies hereof each signed by one
of the parties thereto.
a.3 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 4.1, 4.2, 4.3, and
6.10 shall survive termination of this Agreement.
a.4 Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed their names as of the
day and year first above written.
____________________________ ODD JOB STORES, INC.
STEVEN FURNER
By:
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Print Name:
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Its:
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