Exhibit 10.3
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT dated as of the ___ day of August, 2003
between XxxxxxxxxXxx.xxx, Inc., a Delaware corporation ("FragranceNet") and
TELESCENTS, INC., a New York corporation which is a wholly owned subsidiary,
(collectively, the "Company") and Xxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H :
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WHEREAS, the Company desires to employ the Executive in an
executive capacity and to be assured of his services in such capacity, on the
terms and conditions hereinafter set forth; and
WHEREAS, the Executive is willing to accept such employment on
such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the Company and the Executive hereby
agree as follows:
1. Employment, Term.
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1.1 Employment. The Company agrees to employ the
Executive,and the Executive agrees to serve in the employ of the Company, for
the term set forth in Section 1.2, in the positions and with the
responsibilities, duties and authority set forth in Section 2 and on the other
terms and conditions set forth in this Agreement.
1.2 Term. The term of the Executive's employment under
this Agreement shall commence on the date hereof and shall continue until
terminated in accordance with Section 6 of this Agreement.
2. Position, Duties.
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The Executive shall serve as President, Chief Operating
Officer of the Company. The Executive shall have such responsibilities and
duties consistent with such executive positions as shall be assigned to him from
time to time by the Board of Directors of the Company. The Executive shall
devote his full time and attention of his business time and attention to the
performance of his responsibilities and duties hereunder. The Executive shall
also serve as President and Chief Operating Officer of the Company.
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3. Salary, Incentive Bonus.
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3.1 Salary. The Company shall pay to the Executive a base
salary, initially at the rate of $290,000 per annum, payable in accordance with
the standard payroll practices of the Company. In addition the Executive shall
be entitled to full medical and dental coverage. The Executive's base salary
shall be increased annually by an amount equal to the incentive bonus earned by
the Executive in the prior fiscal year pursuant to Section 3.2, such increase to
take effect on the date of payment of such incentive bonus.
3.2 Incentive Bonus. (a) In addition to the base salary
provided for in Section 3.1, the Company shall pay to the Executive an incentive
bonus with respect to each fiscal year of the Company ending during the term of
this Agreement in an amount equal to one percent (1%) of Sales in excess of
Target Sales. For purposes of this Agreement: "Sales" shall mean sales of the
Company as shown in the audited financial statements of the Company for the
applicable fiscal year; and "Target Sales" shall mean (a) for the fiscal year of
the Company ending March 31, 2003, $10,000,000 and (b) for the fiscal year of
the Company ending March 31, 2004 and each subsequent fiscal year, Sales for the
fiscal year of the Company immediately preceding such year.
(b) In the event of the termination of employment of
the Executive by the Company without Cause or the Executive's voluntary
withdrawal (as defined in Section 6), or by reason of the death or Disability
(as defined in Section 6) of the Executive, the Executive (or his estate or
other legal representative) shall be entitled to a bonus for the fiscal year
in which such termination takes place in an amount equal to the product of (i)
the bonus for such fiscal year determined pursuant to Section 3.2(a), multiplied
by (ii) a fraction, the numerator of which is the number of days from the
beginning of such fiscal year to the date of termination, and the denominator
of which is 365.
(c) The bonus payable to the Executive (or his estate
or other legal representative) for any fiscal year of the Company pursuant to
this Section 3.2, shall be paid by the Company within thirty (30) days of
receipt by the Company of the audited financial statements of the Company for
such fiscal year.
4. Expense Reimbursement.
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During the term of this Agreement, the Company shall reimburse
the Executive for all reasonable and necessary out-of-pocket expenses incurred
by him in connection with the performance of his duties hereunder, upon the
presentation of proper accounts therefor in accordance with the Company's
policies.
5. Benefits.
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During the term of this Agreement, the Executive will be
eligible to participate in all employee benefit plans and programs offered by
the Company from time to time to its employees, subject to the provisions of
such plans and programs as in effect from time to time.
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6. Termination of Employment.
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6.1 General. Either the Company or the Executive may
terminate the employment of the Executive on thirty (30) days' advance written
notice to the other.
6.2 Termination Without Cause or Voluntary Withdrawal. In
the event that the Executive's employment with the Company shall be terminated
by the Company without Cause (as hereinafter defined), or as a result of the
Executive's death or Disability (as hereinafter defined) or the Executive's
voluntary withdrawal, the Company shall pay the Executive severance in the form
of salary continuation (determined at 75% of the Executive's highest rate of
salary with the Company in effect during the one-year period ending on the date
of termination), plus health insurance benefits (based upon the benefits paid in
the last year preceding Termination, disability or withdrawal) payable through
the regular payroll of the Company, for the Applicable Period (as hereinafter
defined) commencing on the date of termination of the Executive's employment.
The Executive shall be under no obligation to seek other employment or otherwise
to mitigate the Company's obligation to make such severance payment to the
Executive. The severance provided for in this Section 6 shall be in lieu of, and
no severance shall be payable to the Executive under, any other severance plan
or policy of the Company. The Company shall also pay to the Executive any
incentive bonus payable pursuant to Section 3 of this Agreement, at the time
prescribed by such Section. In addition, the Company shall pay on the date
within 7 days of the date of termination any outstanding loans, interest on
loans, or otherwise, due to the Executive from the Company. The Company shall,
during the Applicable Period, continue to provide the Executive with health
insurance benefits on the same basis, including any Company-paid premiums, as
such benefits are provided to employees of the Company. The Executive's rights
under the other benefit plans and programs of the Company shall be determined in
accordance with the terms of such plans and programs as then in effect. In the
event of such termination neither the Executive nor the Company shall have any
further rights or obligations under this Agreement, except as set forth in
Sections 7, 8, 9 and 10 of this Agreement. For purposes of this Section 6.2,
"Applicable Period" shall mean a period of one year.
6.3 Definition. For purposes of this Agreement: "Cause" shall
mean (a) any act of willful misappropriation by the Executive against the
Company or (b) the Executive's indictment, conviction or plea of guilty or nolo
contendere with respect to any crime involving moral turpitude or a felony which
was involving the Company; and "Disability" shall mean the Executive's failure
by reason of sickness, accident or physical or mental disability to
substantially perform the duties and responsibilities of the Executive's
employment with the Company for a cumulative period of three (3) months in any
period of twelve (12) consecutive months.
6.4 Resignation of all Positions. Upon termination of the
employment of the Executive with the Company, the Executive shall be deemed to
have resigned all of his positions as an officer, director and trustee of any
benefit plan of the Company or any subsidiary of the Company.
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7. Confidential Information.
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7.1 Nondisclosure. The Executive shall, during the term of
this Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential information (as hereinafter
defined).
7.2 Confidential Information Defined. For the purposes hereof,
the term "confidential information" shall mean all information acquired by the
Executive in the course of the Executive's employment with the Company in any
way concerning the products, projects, activities, business or affairs of the
Company and its Parent or subsidiaries or its or their customers, including,
without limitation, all information concerning trade secrets and the products or
projects of the Company and its subsidiaries and/or any improvements therein,
all sales and financial information concerning the Company and its subsidiaries,
all customer and supplier lists, all information concerning projects in research
and development or marketing plans for any such products or projects, and all
information in any way concerning the products, projects, activities, business
or affairs of customers of the Company or its subsidiaries which is furnished to
the Executive by the Company or its subsidiaries or any of their agents or
customers, as such; provided, however, that the term "confidential information"
shall not include information which (a) becomes generally available to the
public other than as a result of a disclosure by the Executive, (b) was
available to the Executive on a non-confidential basis prior to his employment
with the Company or (c) becomes available to the Executive on a non-confidential
basis from a source other than the Company or its subsidiaries or any of their
agents or customers provided that such source is not bound by a confidentiality
agreement with the Company or its subsidiaries or any of such agents or
customers.
8. Intellectual Property.
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The Executive agrees that all inventions and copyrightable or
patentable material, and all trade secrets, processes, know-how, practices,
designs, technologies and methods which the Executive may make or develop during
the period of the Executive's employment with the Company relating to the
business of the Company shall belong to and shall be owned by the Company,
whether the Executive shall make or develop them individually or jointly with
others or on the Executive's own time or on the time of the Company. The
Executive agrees that, upon the request of the Company and without further
consideration, the Executive shall expressly assign to the Company all of the
Executive's right, title and interest in and to each such invention, material,
trade secret, process, know-how, practice, design, technology and method and
shall sign all papers and do all other acts necessary, at the Company's expense,
to assist the Company to obtain patents or copyrights on or otherwise to perfect
the Company's right, title and interest in and to each such invention, material,
trade secret, process, know-how, practice, design, technology and method in any
and all countries.
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9. Post-Employment Restriction.
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In order to induce the Company to enter into this Agreement,
and in consideration of his employment hereunder and the severance provisions of
this Agreement, the Executive agrees, for the benefit of the Company, that he
will not, during the period of his employment with the Company and thereafter,
employ or entice or endeavor to solicit the employment of any person who was an
employee of the Company at any time, either for his own account or for any
individual, firm or corporation.
10. Equitable Relief.
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In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 7, 8 or 9 of this Agreement, the Executive
hereby consents and agrees that the Company shall be entitled to an injunction
or similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have.
11. Successors and Assigns.
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11.1 Of the Company. The Company shall require any successors
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place. As used in this Section, the "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law and this Agreement shall be binding upon, and
inure to the benefit of, the Company, as so defined.
11.2 Of the Executive. The Executive may not assign this
Agreement or any part thereof; provided, however, that nothing herein shall
preclude one or more beneficiaries of the Executive from receiving any amount
that may be payable following the occurrence of his legal incompetency or his
death and shall not preclude the legal representative of his estate from
receiving such amount or from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of intestacy, to the
person or persons entitled thereto under the laws of intestacy applicable to his
estate. The term "beneficiaries", as used in this Agreement, shall mean a
beneficiary or beneficiaries so designated to receive any such amount or, if no
beneficiary has been so designated, the legal representative of the Executive
(in the event of his incompetency) or the Executive's estate.
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12. Governing Law.
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This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the laws of the State of New
York applicable to contracts to be performed entirely within such state. In the
event that a court of any jurisdiction shall hold any of the provisions of this
Agreement to be wholly or partially unenforceable for any reason, such
determination shall not bar or in any way affect the Company's right to relief
as provided for herein in the courts of any other jurisdiction. Such provisions,
as they relate to each jurisdiction, are, for this purpose, severable into
diverse and independent covenants.
13. Entire Agreement.
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This Agreement contains all the understandings and
representations between the parties hereto pertaining to the subject matter
hereof and supersedes all undertakings and agreements, whether oral or in
writing, if any there be, previously entered into by them with respect thereto.
14. Amendment, Modification, Waiver.
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No provision of this Agreement may be amended or modified
unless such amendment or modification is agreed to in writing and signed by the
Executive and by a duly authorized representative of the Company other than the
Executive. Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition at
the same or any prior or subsequent time, nor shall the failure of or delay by
either party hereto in exercising any right, power or privilege hereunder
operate as a waiver thereof to preclude any other or further exercise thereof or
the exercise of any other such right, power or privilege.
15. Arbitration.
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Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall, except as provided in Section 10, be
settled by arbitration in accordance with the rules of the American Arbitration
Association then in effect and judgment upon such award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be held in New York, New York. The arbitration award shall
include attorneys' fees and costs to the prevailing party.
16. Notices.
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Any notice to be given hereunder shall be in writing and
delivered personally or sent by certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or at
such other address as such party may subsequently designate by like notice:
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To the Company:
Chairman
XxxxxxxxxXxx.Xxx.
000 Xxxxx Xxxxxxx, Xxxxxxxxx, XX 00000
To the Executive:
Xxxxx X. Xxxxx
000 Xxxxx Xxxxxxx, Xxxxxxxxx, XX 00000
17. Severability.
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Should any provision of this Agreement be held by a court or
arbitration panel of competent jurisdiction to be enforceable only if modified,
such holding shall not affect the validity of the remainder of this Agreement,
the balance of which shall continue to be binding upon the parties hereto with
any such modification to become a part hereof and treated as though originally
set forth in this Agreement. The parties further agree that any such court or
arbitration panel is expressly authorized to modify any such unenforceable
provision of this Agreement in lieu of severing such unenforceable provision
from this Agreement in its entirety, whether by rewriting the offending
provision, deleting any or all of the offending provision, adding additional
language to this Agreement, or by making such other modifications as it deems
warranted to carry out the intent and agreement of the parties as embodied
herein to the maximum extent permitted by law. The parties expressly agree that
this Agreement as so modified by the court or arbitration panel shall be binding
upon and enforceable against each of them. In any event, should one or more of
the provisions of this Agreement be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and if such provision or provisions are not
modified as provided above, this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been set forth herein.
18. Withholding.
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Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or his
beneficiaries, including his estate, shall be subject to withholding of such
amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company, may, in its sole discretion,
accept other provision for payment of taxes as permitted by law, provided it is
satisfied in its sole discretion that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.
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19. Survivorship.
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The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
20. Titles.
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Titles of the sections and paragraphs of this Agreement are
intended solely for convenience and no provision of this Agreement is to be
construed by reference to the title of any section or paragraph.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
XXXXXXXXXXXX.XXX, INC.
By
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Chairman
TELESCENTS, INC.
By
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Chairman
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Xxxxx X. Xxxxx
