EXHIBIT 10.3
EMPLOYMENT AGREEMENT
BETWEEN xXXxX*s INC.
AND
XXXX XXXXXXXXX
DATED AS OF NOVEMBER 25, 1996
xXXxX*s INC. (the "Company"), a Delaware corporation, and Xxxx
Xxxxxxxxx (the "Executive") agree as follows:
1. Employment and Duties
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(a) The Company shall employ the Executive, and the Executive shall
serve the Company, as the chief financial officer of the Company. The Executive
shall use his best efforts to promote the interests of the Company, and shall
perform his duties faithfully and diligently, consistent with sound business
practices.
(b) The Executive shall devote substantially his full business time to
the performance of his duties for the Company (it being understood, however,
that nothing in this agreement or otherwise shall be deemed to restrict the
Executive from being a passive investor in businesses that are not competitive
with the Company).
2. Term of Employment
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Subject to Section 2, the Executive shall continue to be employed by
the Company under this agreement until the close of business on July 21, 2001.
3. Compensation
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(a) As compensation for all services to be rendered by the Executive
during his employment under this agreement, the Executive shall be entitled to a
base salary at the rate of $100,000 a year (payable in equal installments at
least twice a month), subject to increases as provided in sections 3(b) and
3(c).
(b) The base salary referred to in section 3(a) shall be increased on
each anniversary of this agreement by the percentage increase in the consumer
price index (all items) of the United States Bureau of Labor Statistics for New
York, New York, during the immediately preceding 12-month period; if the
consumer price index ceases to be published, then a successor index, or, if
there is none, the most nearly comparable index, shall be used.
(c) The Company may, in the sole and absolute discretion of the board
of directors, from time to time increase the Executive's base salary and award
the Executive such bonuses as it considers appropriate.
4. Termination
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The Executive's employment shall terminate upon his death, and may be
terminated (a) at the option of the Company (i) as a result of his disability,
if, in the good faith determination of the Company's board of directors, such
disability has prevented the Executive from substantially performing his duties
and obligations under this agreement during any period of nine consecutive
calendar months and the Company gives notice to the Executive not earlier than
30 days
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and not later than 90 days after the expiration of the nine months (in which
case the employment under this agreement shall terminate when that notice is
given), or (ii) for Cause (as defined below), or (b) at the option of the
Executive, as a result of a Constructive Discharge (as defined below) by the
Company. Upon termination of employment for death or disability or a result of
a Constructive Discharge by the Company, the Company shall continue to pay the
Executive (or his estate or any other person designated by the Executive in
writing to the Company) the full amount of the Executive's base salary (as
determined under sections 3(a) and 3(b)) at the time of his termination until
July 21, 2001. Upon termination by the Company for Cause, the Company shall
have no further obligation to pay compensation expenses and fringe benefits to
the Executive pursuant to section 3.
As used in this agreement, "Cause" shall mean (i) failure by the
Executive to report to work for any significant period of time other than for
reasonable personal excuses; (ii) willful or repeated refusal by the Executive
to perform such material duties as may be delegated or assigned and that are
commensurate with the Executive's position with the Company; (iii) any criminal
conduct by the Executive; or (iv) negligence in the performance of the
Executive's duties to the Company. "Constructive Discharge" shall mean a
material breach by the Company of any material provision of this agreement,
after notice by the Executive to the Company of such breach and failure by the
Company to cure the breach promptly thereafter.
5. Expenses; Fringe Benefits
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During the employment of the Executive under this agreement:
(a) The Company shall reimburse the Executive, on presentation of
vouchers or other evidence of such expenses in accordance with the policies of
the Company, for all reasonable business expenses incurred by him in the
performance of his duties for the Company.
(b) The Company shall provide the Executive with medical insurance,
disability insurance and life insurance under policies no less favorable to the
Executive than the ones currently in effect. In addition, the Company may
obtain key-man term life insurance on the life of the Executive, and the Company
shall be the beneficiary under such policy.
(c) The Executive shall be entitled to 3 weeks vacation each year.
6. Non-Competition; Confidentiality
--------------------------------
(a) The Executive may not at any time during his employment under this
agreement, and within one year after the termination of his employment, for any
reason, engage or become interested in (as owner, lender, stockholder, partner,
director, officer, employee, consultant or otherwise) any business that is in
competition with the business conducted by the Company anywhere in any state in
the United States in which the Company has engaged in such business.
(b) During the Executive's employment under this agreement, and for a
period of one year after the termination of his employment for any
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reason, the Executive shall not on his own behalf, or on behalf of any other
person or enterprise, hire, solicit or encourage to leave the employment of the
Company any individual who was an employee of the Company or its affiliates
during the Executive's employment by the Company.
(c) The Executive shall not, at any time during or after his
employment under this agreement, disclose to any third party, except in the
performance of his duties under this agreement or as may be required by law, any
confidential matter regarding the Company's customers, suppliers, trade secrets
or business.
(d) The Executive acknowledges that the remedy at law for breach of
the provisions of this section 6 would be inadequate and that, in addition to
any other remedy the Company may have for breach of this section 6, the Company
shall be entitled to an injunction restraining any such breach or threatened
breach, without any bond or other security being required.
7. Effectiveness. This agreement shall become effective upon the
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completion of an underwritten initial public offering of the Company's Common
Stock (an "IPO"); however, if an IPO is not completed by February 28, 1997, this
agreement shall be null and void. This agreement, when it becomes effective,
shall supersede and terminate all prior agreements among the parties (and, in
the case of the Company, its predecessors) relating to the subject matter of
this agreement, including, without limitation, the agreement between dELiA'S
LLC, a New York limited liability company, and the Optionee dated as of July 22,
1996 (the "Original
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Agreement"). If this agreement does not become effective by February 28, 1997,
the Original Agreement shall remain in effect.
8. Miscellaneous
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(a) The failure of a party to this agreement to insist on any occasion
upon strict adherence to any term of this agreement shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this agreement. Any waiver must be
in writing.
(b) All notices and other communications under this agreement shall be
in writing and shall be deemed given when delivered personally or mailed by
registered mail, return receipt requested, to a party at his or its address as
follows (or at such other address as a party may designate in any notice under
this agreement):
If to the Executive:
Xxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
If to the Company:
xXXxX*s Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
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With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
(c) This agreement shall be assigned to and shall inure to the benefit
of any successor to substantially all the assets and business of the Company as
a going concern, whether by merger, consolidation, liquidation or sale of
substantially all the assets of the Company or otherwise, and the Company shall
cause any such successor to assume the Company's obligations under this
agreement (but no such assignment shall relieve the Company of its obligations
under this agreement).
(d) This agreement constitutes the entire understanding of the parties
with respect to the subject matter of this agreement, cannot be changed or
terminated except by a written agreement executed by the parties and shall be
governed by the law of the State of New York applicable to agreements made and
to be performed therein.
* * *
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xXXxX*s INC.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Chairman of the Board
XXXX XXXXXXXXX
/s/ Xxxx Xxxxxxxxx
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AGREED (as to Paragraph 7):
DELIA'S LLC
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Executive Manager
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