Exhibit 10.12
SEVERANCE AND EMPLOYMENT AGREEMENT
1. Recitals
(a) This Severance and Employment Agreement ("Agreement") is
between Odd Job Store, Inc. (the "Company"), and _________
(the "Employee") dated March 27, 2003. This Agreement is in
addition to, and not in lieu of, any other employment
agreement between the Company and Employee.
(b) The address of the Company is 200 Helen Street, South
Plainfield, New Jersey 07080. The address of the Employee is
_________________________________.
(c) The Employee is currently employed by the Company in the
capacity of __-________________________, and the Employee is
one of the key employees of the Company.
(d) In consideration of the mutual promises contained herein and
other good and valuable consideration, the Employee and the
Company have entered into this Agreement.
2. Term of Agreement
The Term of this Agreement shall commence on the date hereof and continue
until March 31, 2005; provided, however, that if a Change in Control (as
defined in Section 3 below) occurs prior to March 31, 2005, the termination
date of the Agreement shall be the second anniversary of such Change in Control
(the "Term of Agreement").
3. Change in Control
No benefit shall be payable hereunder (and Sections 4 through 10 and 18
shall not be applicable) unless a change in control of the Company shall have
occurred within the Term of Agreement and the Employee's employment by the
Company shall have been terminated within two years thereafter. For purposes
of this Agreement, a "change in control" of the Company shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (or any similar item or successor
schedule) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred if and at such times as (i) any
"person" (as such term is used in Section 13(d)(3) and 14(d)(2) of the Exchange
Act) becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 50% or more of the voting power of the Company's then
outstanding securities (excluding any current owner of 50% or more of the
outstanding stock) or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the Company's
shareholders, of each new director during such two year period was approved by
the affirmative vote of at least two-thirds of the directors then still in
office who were directors at the beginning of said two-year period. The date
on which the change in control occurs shall be known as the "Change in Control
Date."
4. Notice of Termination
Any termination of the Employee's employment by the Company or the
Employee shall be communicated by written Notice of Termination to the other
party thereto and shall specify the date of termination and indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision so indicated.
5 Compensation
The Employee shall be entitled, while employed by the Company, to receive
for the remainder of the Term of Agreement an annual base salary (the "Base
Salary"), payable in equal semi-monthly, bi-weekly, or weekly installments, at
an annual rate at least equal to the aggregate annual base salary payable to
the Employee as of the Effective Date. The Base Salary may be increased (but
may not be decreased) at any time and from time to time by action of the Board
of Directors of the Company, any committee thereof, or any individual having
authority to take such action, in accordance with the Company's regular
practices. Any increase in the Base Salary shall not serve to limit or reduce
any other obligation of the Company hereunder. In the event of termination of
employment, the Employee shall be entitled to the severance provided in
Sections 7, 8, 9 or 10, as applicable.
6. Benefit Plans
(a) The Company agrees to continue in effect any perquisite,
benefit or compensation plan (including its annual bonus
plan, long-term incentive plan, section 401(k) plan, dental
plan, life insurance plan, health and accident plan, or
disability plan), in which the Employee is participating as
of the date prior to the Effective Date (collectively
referred to as the "Benefit Plans"); or to maintain plans
providing substantially similar benefits, unless the
continuation of any such plan (or similar plan) would not, in
the good faith discretion of the Company, be an economically
reasonable decision, taking into account all facts and
circumstances;
(b) Other than as provided in paragraph (a), the Company agrees
not to take any action that would adversely affect the
Employee's participation in, or materially reduce the
benefits under, any of the Benefit Plans or deprive the
Employee of any material fringe benefit currently enjoyed;
and
(c) The Company agrees to provide the Employee with the number of
paid vacation days to which he or she is entitled on the
basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect on the date
hereof.
1. Termination for Cause
(a) The Company may terminate the Employee's employment for
Cause. For the purposes of this Agreement, the Company shall
have "Cause" to terminate employment hereunder only (i) if
termination shall have been the result of an act or acts of
dishonesty by the Employee constituting a felony and
resulting or intended to result directly or indirectly in
substantial gain or personal enrichment at the expense of the
Company; or (ii) upon the willful and continued failure by
the Employee substantially to perform his or her duties with
the Company (other than any such failure resulting from
incapacity due to mental or physical illness) after a demand
in writing for substantial performance is delivered by the
Company, which demand specifically identifies the manner in
which the Company believes that the Employee has not
substantially performed his or her duties, and such failure
results in demonstrably material injury to the Company. The
Employee's employment shall in no event be considered to have
been terminated by the Company for Cause if such termination
took place as the result of (i) bad judgment or negligence,
or (ii) any act or omission without intent of gaining
therefrom directly or indirectly a profit to which the
Employee was not legally entitled, or (iii) any act or
omission believed in good faith to have been in or not
opposed to the interest of the Company, or (iv) any act or
omission in respect of which a determination be made that the
Employee met the applicable standard of conduct prescribed
for indemnification or reimbursement or payment of expenses
under the Regulations of the Company or the laws of the State
of Ohio, in each case as in effect at the time of such act or
omission.
(b) If the Employee's employment shall be terminated for Cause,
the Company shall pay the Employee his or her full base
salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given and the Company
shall have no further obligations to the Employee under this
Agreement.
1. Termination for Death or Disability
(a) The Company may terminate this Agreement on account of the
Employee's death or for "Disability" if the Employee is
"Disabled." For purposes of this Agreement, the Employee
shall be considered Disabled only if, as a result of his or
her incapacity due to physical or mental illness, he or she
shall have been absent from his or her duties with the
Company on a full-time basis for a period of ninety (90)
consecutive days.
(b) If the Company terminates this Agreement on account of the
Employee's death or because the Employee is Disabled, the
Company shall pay to the Employee (or his or her successors)
the amounts, and provide to the Employee the benefits,
specified in Sections 5 and 6 through the Date of
Termination.
1. Termination of Employment by the Employee for Good Reason
(a)The Employee may terminate his or her employment for Good Reason. For
purposes of this Agreement, Good Reason will exist if any one or more
of the following occur:
(i) Failure by the Company to honor any of its obligations
under Sections 5, 6, or 8; or
(ii) A material adverse change in the nature or scope of the
functions, responsibilities or duties attached to the
position with the Company which the Employee held
immediately prior to the Effective Date, without the
prior written consent of the Employee, which is not
remedied within 10 calendar days after receipt by the
Company of written notice from the Employee of such
change; or
(iii) A determination by the Employee made in good faith that
as a result of a change in control following the
Effective Date there has been a change in circumstances
that significantly affects his or her position,
including without limitation a material change in the
scope of the business or other activities for which he
or she was responsible immediately prior to the
Effective Date, he or she has been rendered
substantially unable to carry out, has been
substantially hindered in the performance of, or has
suffered a substantial reduction in, any of the
authorities, powers, functions, responsibilities or
duties attached to the position held by the Employee
immediately prior to the Effective Date, which
situation is not remedied within 10 calendar days after
written notice to the Company from the Employee of such
determination; or
(iv) The Company shall relocate its principal executive
offices, or require the Employee to have his or her
principal location of work changed, to any location
which is in excess of 50 miles from the location
thereof immediately prior to the Effective Date or to
travel away from his or her office in the course of
discharging his or her responsibilities or duties
hereunder significantly more (in terms of either
consecutive days or aggregate days in any calendar
year) than was required of him or her prior to the
Effective Date without, in either case, his or her
prior written consent.
1. Compensation Upon Certain Terminations
(a) If the Company shall terminate the Employee's employment other than
pursuant to Sections 7 or 8 hereof or if the Employee shall terminate his or
her employment for Good Reason pursuant to Section 9 hereof, then the Company
shall pay to the Employee in a lump sum on the fifth business day following the
Date of Termination, the following amounts:
(i) If the termination occurs within the period commencing
on the Change in Control Date and ending on the date
six (6) months after the Change in Control ___ (__)
months of Employee's then current base salary; or
(ii) If the termination occurs within the period commencing
six (6) months and a day after the Change in Control
Date and ending on the second anniversary of the Change
of Control Date, one-half of the benefit payable under
clause (i) above; provided, however, that no severance
payment under this clause (ii) shall be less than three
(3) months of Employee's then current base salary.
(b) If the Company shall terminate the Employee's employment other than
pursuant to Sections 7 or 8 hereof or if the Employee shall terminate his
or her employment for Good Reason pursuant to Section 9 hereof, then the
Company shall continue in effect, at the Company's cost, the medical,
dental, life insurance, and health and accident plans in effect in which
the Employee is participating as of the Date of Termination for a period
of three months.
(c) It is the intention of the parties that this Agreement provides
special benefits to the Employee. If benefits shall be payable pursuant
to this Agreement due to a cause compensable under any employment
agreement or severance program applicable to Employee, benefits pursuant
to this Agreement shall be in lieu of, and not duplicative of,
corresponding benefits under such agreement or program.
1. Successors, Binding Agreement
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by agreement in form and substance
satisfactory to the Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Employee
to compensation from the Company in the same amount and on the same terms as
would apply if the Employee terminated his or her employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "Company" shall mean the Company as defined herein and
any successor to its business and/or assets as aforesaid that executes and
delivers the agreement provided for in this section or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.
This Agreement shall inure to the benefit of and be enforceable by the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Employee should
die while any amount would still be payable hereunder had the Employee
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to his or her devisee,
legatee, or other designee or, if there be no such designee, to his or her
estate.
2. Notice
Notices and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Company shall be directed to
the attention of the Secretary of the Company, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
3. Miscellaneous
No provisions of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in writing signed by
the Employee and the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which is not set forth expressly in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of New Jersey.
4. Validity
The invalidity or unenforceability of any one or more provisions of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
5. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
6. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Newark, New Jersey in
accordance with the rules of the American Arbitration Association then in
effect; provided that all arbitration expenses shall be borne by the Company.
Notwithstanding the pendency of any dispute or controversy concerning
termination or the effects thereof, the Company will continue to pay the
Employee his or her full compensation in effect immediately before any Notice
of Termination giving rise to the dispute was given and continue him or her as
a participant in all compensation, benefit and insurance plans in which he or
she was then participating, until the dispute is finally resolved. Amounts paid
under this paragraph are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement. Judgment may be entered on the arbitrators' award in any court
having jurisdiction; provided, however, that the Employee shall be entitled to
seek specific performance of his or her right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
7. Withholding of Taxes
The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes as shall be required pursuant to any
law or government regulation or ruling.
8. Legal Fees and Expenses
It is the intent of the Company that the Employee not be required to
incur the legal expenses associated with the enforcement of his or her rights
under this Agreement by litigation or other legal action in the event that the
Employee is the prevailing party in the dispute. Accordingly, if it should
appear to Employee that the Company has failed to comply with any of its
obligations under this Agreement or in the event the Company or any other
person takes any action to declare this Agreement void or unenforceable, or
institute any legal action to designed to deny, or to recover from, Employee
the benefits intended to be provided to Employee hereunder, the Company
irrevocably authorizes the Employee from time to time to retain counsel of his
or her choice, at the expense of the Company as hereafter provided, to
represent the Employee in connection with the interpretation or enforcement of
this Agreement, including the initiation or defense of any litigation or other
legal action, whether by or against the Company or any director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to the Employee's
entering into an attorney-client relationship with such counsel, and in that
connection the Company and the Employee agree that a confidential relationship
shall exist between the Employee and such counsel. The Company shall pay or
cause to be paid and shall be solely responsible for any and all attorneys' and
related fees and expenses incurred by the Employee under this Section 18;
provided, however, that Employee shall be obligated to reimburse the expense of
the Company for his or her counsel fees and related expenses that the Company
has paid on Employee's behalf in the event that Employee is not the prevailing
party in the dispute.
ODD JOB STORES, INC.
By:
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Name:
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Its:
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Dated: April ___, 2003 --------------------------------