Exhibit No. 12
American Sports History Incorporated
Form 10-KSB
File No. 00-00000-00
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of December 31, 1999, by and
between AMERICAN SPORTS HISTORY INCORPORATED, a Nevada
corporation, (the "Company"), and XXXXXXX X. XXXXXXX, residing
at 00-0 Xxxxxxxx Xx., Xxxxxxx, Xxx Xxxxxx, 00000 ("Executive").
W I T N E S S E T H:
WHEREAS, the Company presently employees Executive
pursuant to the terms of the Employment Agreement, dated January
1, 1996 (the "1996 Agreement"), by and between the Company and
Executive;
WHEREAS, the Company and Executive wish to terminate
the 1996 Agreement, enter into certain other arrangements
regarding shares owned by Executive in the Company's common
stock, par value $.01 per share (the "Common Stock"), and options
granted to Executive in shares of the Common Stock and
outstanding compensation owed to Executive by the Company; and
WHEREAS, the Company wishes to continue to avail itself
of the advice and services of Executive, and Executive wishes to
continue to be employed by the Company;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements set forth herein, the parties agree as
follows:
1. Termination of 1996 Agreement, Return of Shares,
Cancellation of Debt/Issuance of Note and Stock Options.
1.1 Termination of 1996 Agreement. Effective as of
the date hereof (the "Effective Date"), the 1996 Agreement is
hereby terminated and of no further force and effect.
1.2 Return of Stock. Executive agrees to return to
the Company his stock certificates evidencing Executive's
ownership of 1 million shares of the Common Stock on the
Effective Date, together with such instruments of transfer
and such other documents as the Company may reasonably request
to evidence such return. Such shares shall be canceled by the
Company and returned to authorized but unissued shares of the Common Stock.
1.3 Cancellation of Debt/Issuance of Note. Of the
$566,892 in amounts owed to Executive by the Company on September
30, 1999, $316,892 is hereby canceled and the remaining $250,000
shall be evidenced by a note in the form attached hereto as
Exhibit A.
1.4 Stock Options. The Company and Executive
acknowledge that under the Company's 1998 Stock Incentive Plan,
the Company granted to Executive options permitting Executive to
purchase 1.2 million shares of the Common Stock. Any other
options or warrants to purchase the Common Stock of the Company
granted or purported to be granted to Executive,
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including the
options granted under the Company's 1996 Stock Option Plan (the
"1996 Stock Option Plan"), are canceled and of no force and
effect.
1.5 Release. Except as otherwise provided in this
Agreement, Executive releases and discharges the Company from all
actions, causes of action, obligations, liabilities, suits,
debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions,
claims and demands whatsoever, in law or equity (collectively,
"Claims"), which Executive ever had, now has or hereafter can,
shall or may have against the Company for, upon, or by reason of
any matter, cause or thing whatsoever from the beginning of the
world to the date hereof whether or not he now knows of such
Claims, including, without limitation, any Claims under the 1996
Agreement and the 1996 Stock Option Plan. Without limiting the
foregoing, it is understood and agreed that the effect of this
release is not limited by any territorial limitation of any kind
and applies in all jurisdictions whatsoever.
2. Employment and Term.
2.1 Employment. Subject to the terms and conditions
of this Agreement, the Company agrees to employ Executive, and
Executive agrees to serve the Company, as an Chairman of the
Board. Subject to the supervision and direction of the Chief
Executive Officer ("CEO"), Executive shall assist in the
management of the day-to-day operations of the Company.
Executive shall also carry out such other duties and
responsibilities as pertain to his position or as shall otherwise
be agreed from time to time by Executive and the CEO. Executive
shall report to the CEO.
2.2 Term. The term of this Agreement (the "Term")
shall commence on the Effective Date and shall continue through
the third anniversary of such date.
2.3 Policies. The Company shall advise Executive of
its general corporate policies and procedures as to travel,
entertainment and other expenses and accounting and internal
controls, and Executive shall comply with such policies.
3. Compensation.
3.1 Salary. During the Term, the Company shall pay to
Executive, in equal installments in accordance with the Company's
policies, a salary of $90,000 per annum as Chairman of the Board.
Until such time as the Company is able to raise sufficient funds
to permit the payment of salaries in cash to all officers of the
Company, the Company shall be permitted to make salary payments
to Executive in the Common Stock on the same basis as it makes
salary payments to other similarly situated executives employed
by the Company.
3.2 Health, Dental and Disability Insurance. At such
time as health insurance is available to other executives
employed by the Company, Executive and his family, to the extent
that Executive and each family member is eligible under the
applicable plan or policy, shall be provided with health and/or
dental insurance, as the case may be, comparable to that
maintained by the Company for its executives generally. Until
such time, it shall be Executive's responsibility to provide
health coverage for him and his family.
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3.3 Expense Reimbursement. Executive shall be
required to obtain specific approval of his expenditures for
travel, entertainment and lodging from the CEO. Subject to the
foregoing, Executive shall be entitled to reimbursement for
normal and reasonable travel, entertainment and other expenses
which are incurred by him in the performance of his duties
consistent with the Company's expense policies and procedures.
The Company shall pay or reimburse Executive for such expenses
upon presentation, within a reasonable time after such expenses
are incurred, of an itemized account of such expenses, together
with such vouchers or receipts for individual expense items as
the Company may from time to time require under its normal
policies and procedures.
3.4 Time Off. Executive shall be entitled to [__]
paid work days per year to be used in accordance with the
policies of the Company then in effect.
4. Termination for Certain Causes.
4.1 Termination for Cause. In the event of
Executive's (i) continuing gross neglect (after written warning)
or willful misconduct in the performance of his duties, (ii)
breach of any provision of Sections 5 or 6, (iii) conviction for
a felony (iv) drunkenness or illegal use of drugs which
interferes with the performance of his duties under this
Agreement and which continues after written warning, or (v)
performance is determined to be unacceptable or incompatible with
Company goals and objectives, this Agreement and Executive's
employment may be terminated by the Company without prior notice;
provided, that, in the case of termination pursuant to clause
(v), the Company shall provide Executive with 60 days' prior
written notice outlining Executive's performance deficiencies.
If, within such 60 day period, Executive's performance fails to
substantially correct the deficiencies outlined in such notice,
to the satisfaction of the Company, the Company may, on such 60th
day, terminate Executive's employment hereunder.
4.2 Termination Without Cause. This Agreement may be
terminated without cause by the Company in the Company's sole
discretion. Such termination shall require at least 180 days'
prior written notice to Executive. In the event of termination
by the Company pursuant to this Section 4.2, the Executive will
immediately be relieved of all duties and responsibilities;
provided, that, Company shall pay to Executive the compensation
specified in Section 3.1 for the 180 day period immediately
following the delivery of such notice.
4.3 Termination on Account of Death or Disability. If
Executive, due to physical or mental disability or incapacity, is
unable substantially to perform his duties hereunder for a period
of 90 consecutive days or more, the Company shall have the right
to terminate Executive's employment hereunder on 30 days' prior
written notice. If Executive is able to and recommences
rendering services and performing his duties hereunder within
such 30day notice period, such notice shall be vitiated. In
addition, in the event of Executive's death or disability,
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Executive or his personal representatives shall be entitled to
receive all earned but unpaid compensation through the date of
termination of his employment.
5. NonCompetition.
(a) Executive agrees, for the Non-Competition Period
(as defined in Section 5(b)), that he shall not, in the States of
New Jersey and New York and in any other area in the United
States in which the Company conducts its business, during the Non-
Competition Period (or for such lesser area or such lesser period
as may be determined by a court of competent jurisdiction to be a
reasonable limitation on the competitive activity of Executive),
directly or indirectly:
(i) engage, for or on behalf of himself or
any person or entity other than the Company in the
business of the Company as conducted during the
Non-Competition Period (the "Business");
(ii) solicit or attempt to solicit business
for services offered by the Company from any
parties who are clients of the Company during the
Non-Competition Period or to whom the Company
makes proposals for services during the Non-
Competition Period;
(iii) otherwise divert or attempt to
divert from the Company any business involving the
Business during the Non-Competition Period;
(iv) solicit or attempt to solicit for any
business endeavor any employee of the Company; or
(v) render any services as a joint venturer,
partner, consultant or otherwise to, or have any
interest as a stockholder, partner, member, lender
or otherwise in, any person or entity which is
engaged in activities which, if performed by
Executive, would violate this Section 5.
The foregoing shall not prevent Executive from purchasing or
owning (i) up to 5% of the voting securities of any corporation,
the securities of which are publicly-traded, or (ii) any interest
in any entity which is not also engaged in the Business.
Executive shall, during the Term, direct any business
opportunities relating to the Business that may come to his
attention to the Company. References to the Company in this
Section 5 shall also be deemed to refer to their respective
divisions and subsidiaries.
(b) For the purposes of this Agreement, the "Non-
Competition Period" means, from the Effective Date until the
fifth anniversary of such date.
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6. Confidentiality.
6.1 General. At all times after the date hereof,
Executive shall not, in any capacity other than as an employee of
the Company, disclose or use any information respecting the
Company or its respective businesses and affairs that is treated
as confidential by the Company; provided, however, that such
obligation shall not apply to any information (i)to the extent
that it is or becomes part of public or industry knowledge from
authorized sources other than Executive or (ii)which Executive is
required by law to disclose (but only to the extent required to
be so disclosed).
6.2 Return of Materials. On the termination of his
employment by the Company for any reason, Executive shall
promptly deliver to the Company all material of a confidential
nature (whether or not marked as such), including, without
limitation, budgets, financial statements or projections,
drawings, manuals, letters, notes, notebooks, reports and
customer and suppliers lists, and all copies or summaries
thereof, relating to the Company's business or affairs which are
in Executive's possession or control.
6.3 Remedies and Survival. Because the Company would
not have an adequate remedy at law to protect their businesses
from any breach of the provisions of Sections 5 or 6, the Company
shall be entitled, in the event of such a breach or threatened
breach thereof by Executive, to injunctive relief, in addition to
such other remedies and relief that would be available to the
Company. In the event of such a breach, in addition to any other
remedies, the Company shall be entitled to receive from Executive
payment of, or reimbursement for, its reasonable attorneys' fees
and disbursements incurred in successfully enforcing any such
provision; provided, that Executive shall be entitled to receive
from the Company payment of, or reimbursement for, his reasonable
attorneys' fees and disbursements incurred in any proceeding
commenced by the Company pursuant to this Section 7 in which the
Company is not successful. The provisions of Sections 5 and 6
and of this Section 7 shall survive any termination of this
Agreement.
7. Arbitration.
7.1 General. Any controversy or claim arising out of
or relating to this Agreement shall be finally resolved by
arbitration pursuant to the Commercial Arbitration Rules of the
American Arbitration Association; provided, however, that this
Section 8.1 shall not in any way affect the right of the Company
to seek injunctive relief or any other remedies pursuant to
Section 7. Any such arbitration shall take place in New York,
New York, before three arbitrators, one of which shall be
appointed by the Company, one by Executive and the third by the
arbitrators so appointed; provided, however, that the parties may
by mutual agreement designate a single arbitrator. The parties
further agree that (i)the arbitrators shall be empowered to
include arbitration costs and attorney fees in the award to the
prevailing party in such proceedings and (ii)the award in such
proceedings shall be final and binding on the parties. The
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arbitrators shall apply the law of the State of New York,
exclusive of conflict of laws principles, to any dispute.
Judgment on the arbitrators' award may be entered in any court
having the requisite jurisdiction. Nothing in this Agreement
shall require the arbitration of disputes between the parties
that arise from actions, suits or proceedings instituted by third
parties.
7.2 Consent to Jurisdiction; Service of Process. Each
party irrevocably submits to the jurisdiction and venue of the
arbitration described in Section 8.1 and to the jurisdiction and
venue of the federal and state courts sitting in New York County,
New York, for the enforcement of any judgment on the arbitrators'
award, and waives any objection it may have with respect to the
jurisdiction of such arbitrations or courts or the inconvenience
of such forums or venues. The Company appoints Salans Xxxxxxxxx
Xxxxxxxxx Xxxxxxx & Xxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx Xxxxxxx, Esq., and Executive appoints
_______________________________________________________,
Attention: ___________, as their respective attorneys-in-fact and
authorized agents solely to receive on their behalf, service of
any demands for, or any notice with respect to, arbitration
hereunder or any service of process. Service on either of such
attorneys-in-fact may be made by registered or certified mail or
by personal delivery, in any case return receipt requested, and
shall be effective as service on the Company or Executive, as the
case may be. Nothing herein shall be deemed to affect any right
to serve any such demand, notice or process in any other manner
permitted under applicable law.
8. Entire Agreement; Amendments; No Waivers. This
Agreement sets forth the entire understanding of the parties with
respect to its subject matter and merges and supersedes all prior
and contemporaneous understandings of the parties with respect to
its subject matter. No provision of this Agreement may be waived
or modified, in whole or in part, except by a writing signed by
each of the parties. Failure of any party to enforce any
provision of this Agreement shall not be construed as a waiver of
its rights under such or any other provision. No waiver of any
provision of this Agreement in any instance shall be deemed to be
a waiver of the same or any other provision in any other
instance.
9. Communications. All notices, consents and other
communications given under this Agreement shall be in writing and
shall be deemed to have been duly given (a) when delivered by
hand or by Federal Express or a similar overnight courier to, (b)
five days after being deposited in any United States post office
enclosed in a postage prepaid registered or certified mail
envelope addressed to, or (c) when successfully transmitted by
facsimile (with a confirming copy of such communication to be
sent as provided in (a) or (b) above) to, the party for whom
intended, at the address or facsimile number for such party set
forth below, or to such other address or facsimile number as may
be furnished by such party by notice in the manner provided
herein; provided, however, that any notice of change of address
or facsimile number shall be effective only upon receipt.
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If to the Company or : with a copy to:
American Sports History Incorporated Salans Xxxxxxxxx
Xxxxxxxxx Xxxxxxx & Xxxxxx
00 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx Attention: Xxxxxxx
Xxxxxxx, Esq.
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
If to Executive:
Xx. Xxxxxxx X. Xxxxxxx
00-0 Xxxxxxxx Xx.
Xxxxxxx, Xxx Xxxxxx 00000
10. Successors and Assigns. This Agreement shall be
binding on, enforceable against and inure to the benefit of, the
parties and their respective successors and permitted assigns,
and nothing herein is intended to confer any right, remedy or
benefit upon any other person. No party may assign its rights or
delegate its obligations under this personal Agreement without
the express written consent of the other parties; provided,
however, that on the sale or transfer of all or substantially all
of the assets and business of the Company to another party, or
the merger or consolidation of the Company with another entity,
this Agreement shall inure to the benefit of, and be binding on,
both Executive and the party purchasing such assets, business and
goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such
other party were the Company, without the need for any consent
from Executive; provided, further, however, that no such
assignment contemplated by the foregoing proviso shall relieve or
discharge the Company of any liabilities under this Agreement
without the express written agreement of Executive.
11. Governing Law. This Agreement shall in all
respects be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and fully
to be performed in such state, without giving effect to conflicts
of law principles.
12. Severability and Savings Clause. If any provision
of this Agreement is held to be invalid or unenforceable by any
court or tribunal of competent jurisdiction, the remainder of
this Agreement shall not be affected thereby, and such provision
shall be carried out as nearly as possible according to its
original terms and intent to eliminate such invalidity or
unenforceability. In this regard, the parties agree that the
provisions of Section 5, including, without limitation, the scope
of the territorial and time restrictions, are reasonable and
necessary to protect and preserve the Company's legitimate
interests. If the provisions of Section5 are held by a court of
competent jurisdiction to be in any respect unreasonable, then
such court may reduce the territory or time to which it pertains
or otherwise modify such provisions to the extent necessary to
render such provisions reasonable and enforceable.
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00. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
14. Construction. Headings used in this Agreement are
for convenience only and shall not be used in the interpretation
of this Agreement. References to Sections are to the Sections of
this Agreement. As used herein, the singular includes the plural
and the masculine, feminine and neuter gender each includes the
others where the context so indicates.
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IN WITNESS WHEREOF, the parties have duly executed
this Agreement as of the date first set forth above.
AMERICAN SPORTS HISTORY INCORPORATED
By___ /s/ Xxxxxxx X. Hefke____________________________
Name: Xxxxxxx X. Xxxxx
Title: President & Chief Executive Officer
_______/s/ Xxxxxxx X. Nerlino_________________________
Xxxxxxx X. Xxxxxxx
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PROMISSORY NOTE
$250,000 December 31,
0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, AMERICAN SPORTS HISTORY
INCORPORATED, a Nevada corporation ("Maker"), hereby promises to
pay to the order of XXXXXXX X. XXXXXXX ("Payee"), the principal
sum of TWO HUNDRED FIFTY THOUSAND United States Dollars
($250,000) on December 31, 2002. No interest shall be due and
payable on the unpaid principal balance of this Note. This Note
is the promissory note referred to in Section 1.3 of the
Employment Agreement, of even date herewith, between Maker and
Payee.
1. Optional Prepayment. Maker shall have the right
at any time and from time to time to prepay, in whole or in part,
the unpaid principal amount of this Note, without penalty or
premium.
2. Waiver. A delay by Payee in exercising a right or
remedy with respect to this Note shall not constitute a waiver
thereof; a waiver of a default, right or remedy shall not
constitute a waiver of a subsequent default, right or remedy; and
a single or partial exercise of a right or remedy shall not
preclude another or further exercise thereof or the exercise of
another right or remedy.
3. Miscellaneous.
(a) All payments under this Note shall be made to
Payee, by certified or official bank check to the order of Payee
or by wire transfer to Payee's account as Payee may from time to
time direct. If the principal amount payable hereunder becomes
due and payable on a Saturday, Sunday or public holiday in the
State of New York (a "Business Day"), the due date thereof shall
be extended to the next succeeding Business Day.
(b) Maker agrees to pay, and save Payee harmless
against, any liability for the payment of any costs and expenses,
including, without limitation, reasonable attorneys' fees and
disbursements, arising in connection with the enforcement by
Payee of any of its rights hereunder.
(c) This Note may not be amended or modified except in
a writing signed by Payee and Maker. If any provision of this
Note is held to be invalid or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
of this Note shall be unaffected thereby.
(d) Maker may not assign this Note or delegate its
obligations hereunder. This Note shall inure to the benefit of
Payee and its successors and assigns.
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(e) This Note in all respects shall be governed by and
construed in accordance with the laws of the State of New York
applicable to agreements made and fully to be performed in such
State, without giving effect to conflicts of law principles.
(f) Upon receipt of evidence reasonably satisfactory
to Maker of the loss, theft, destruction or mutilation of this
Note and, in the case of loss, theft or destruction, upon receipt
of indemnity or security reasonably satisfactory to Maker from
Payee or, in the case of mutilation, upon surrender of the
mutilated Note, Maker shall make and deliver a new Note of like
tenor in lieu of this Note.
IN WITNESS WHEREOF, the undersigned has caused
this Note to be duly executed as of the day and year first above
written.
AMERICAN SPORTS HISTORY INCORPORATED
By: /s/ Xxxxxxx X.Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President & Chief
Executive Officer
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