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EXHIBIT 10.2
August 3, 1999
Xx. Xxxxxxx X. Xxxxxxxx
Dear Xxx:
The following should constitute the employment agreement by and between
Cleveland Indians Baseball Company, Inc., an Ohio Corporation, (The Club) and
you, and shall, upon acceptance by you, serve as an Employment Contract dated
August 3, 1999.
1. TERM
A. Subject to the terms and conditions set forth below, The Club
agrees to employ you as Vice President of Finance, for a
period commencing on the date of your acceptance as set forth
below and ending December 31, 2001, subject to subsection B
below.
B. The Club shall have the unilateral option to extend the term
of this Agreement through December 31, 2002 at a salary of
$204,000.00 for the year 2002. Such option may be exercised by
written notice personally delivered to you at The Club's
offices on or before December 31, 2000.
C. Your salary shall be paid each calendar year in twenty-four
(24) equal semi-monthly installments.
2. SALARY
A Your salary as Vice President of Finance under this Agreement
shall be as follows:
January 1, 1999 through December 31, 1999 at the rate of
$162,000.00 per year.
January 1, 2000 through December 31, 2000 at the rate of
$175,000.00 per year.
January 1, 2001 through December 31, 2001 at the rate of
$189,000.00 per year.
Option Year: January 1, 2002 through December 31, 2002
$204,000.00.
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B. DEFERRED COMPENSATION PLAN. On or before December 1 of the
year immediately preceding any calendar year, you may elect to
defer the payment of not more than 50% of the salary otherwise
payable under subsection (A) of this Section 2 and 100% of any
bonus payments for such calendar year and on June 15 of such
calendar year (or, if later, the date that any bonus payment
would otherwise have been payable), the Club shall deposit
such deferred compensation in a trust, the earnings of which
are not currently taxable for federal income tax purposes,
which shall be established by the Club to provide deferred
compensation to you in accordance with this subsection (B)
(the "Deferred Compensation Account"); a copy of such trust is
attached hereto as Exhibit I. Notwithstanding the foregoing,
if you terminate employment, die or become "permanently
disabled" (as defined under Section 10) during a calendar
year, the amount to be credited to the Deferred Compensation
Account for that year shall be equal to the portion of the
deferred amount that you actually earned through the date of
your termination of employment, death or permanent disability.
The fair market value of the Deferred Compensation Account, as
determined under clause (i) of this subsection (B), shall be
paid by the Club to you, or in the case of your death, to your
beneficiary, in ten installments, commencing on the first
business day of January of the calendar year following the
earlier of (a) the date of your death or permanent disability
or (b) the later of (i) termination of your employment with
the Club or (ii) your fifty-fifth (55) birthday. The payments
will be computed in accordance with the following schedule.
Percentage of
Fair Market Value
Payment of Deferred
Number Compensation Account
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1 10%
2 11.11%
3 12.5%
4 14.28%
5 16.67%
6 20%
7 25%
8 33.33%
9 50%
10 100%
(i) INVESTMENT POLICY. Any deferred compensation
payments credited to the Deferred Compensation
Account pursuant to this subsection (B) and all
income attributable to such amounts (net of expenses)
shall be invested and reinvested in accordance with
the trust agreement described herein until such time
as the Deferred Compensation Account is paid by the
Club to you, or your beneficiary, as applicable.
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(ii) DEATH BENEFITS. You shall be entitled to designate a
beneficiary (or beneficiaries) who shall be entitled
to receive that portion of your undistributed
Deferred Compensation Account, as determined under
the first paragraph of this subsection (B) if you
die before receiving the total value of the Deferred
Compensation Account. The designation of a
beneficiary (or beneficiaries) must be made in
writing on a form substantially similar to the form
attached as Exhibit II to this Agreement and
delivered to the Club. You may change or revoke a
beneficiary designation by filing a new designation
or notice of revocation with the Club. If you fail
to designate a beneficiary or if no designated
beneficiary survives you, the Club shall pay any
amounts payable pursuant to this subsection (B) to
your surviving spouse, and to your personal
representative if there is no surviving spouse.
(iii) HARDSHIP. Regardless of the date on which payment of
the deferred compensation under this subsection (B)
otherwise is to be paid, in the event of your
hardship, payment of all or a portion of the fair
market value of the Deferred Compensation Account
can be accelerated by the Club's determination of
hardship. The Club shall have sole discretion as to
whether a hardship has occurred and if so, also
shall have sole discretion to determine the amount
of deferred compensation that may be distributable
to you in order to alleviate that hardship. For this
purpose, hardship shall mean any emergency or
necessity affecting your personal or family affairs
having a significant adverse financial effect.
(iv) NO FORFEITURE OF DEFERRED COMPENSATION. All deferred
compensation credited to the Deferred Compensation
Account shall be nonforfeitable.
(v) DEBITING OF DEFERRED COMPENSATION ACCOUNT. Once an
amount of deferred compensation has been paid, such
amount shall be debited from the Deferred
Compensation Account and shall cease to exist.
(vi) PARTICIPANT'S RIGHTS ARE UNFUNDED AND UNSECURED.
Notwithstanding the creation of the trust described
herein, all deferred compensation benefits under
this subsection (B) are unfunded for purposes of the
Employee Retirement Income Security Act of 1974, as
amended. You (or your beneficiary's) right to
receive a distribution hereunder shall be an
unsecured claim against the general assets of the
Club or the trust referred to herein. Any deferred
compensation benefits payable hereunder to you or
your beneficiary may be payable out of the trust
established by the Club, or may be payable from the
general assets of the Club.
(vii) ANTI-ASSIGNMENT. No right or deferred compensation
payment under this subsection (B) shall be subject
to alienation, sale or assignment.
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C. Post Season Bonus. In the event that the Club participates in
a division playoff series, league championship series or the
World Series during any championship season during the term of
this Agreement, including either option year if the applicable
option has been exercised, you shall be entitled to receive a
bonus equal to one-quarter (25%) of a player's share payable
to the Club's players as determined pursuant to Major League
Rule 45(b)(2) as the same shall be amended from time to time.
3. GROUP PLAN
In addition to all other rights and benefits under this Agreement, you shall be
eligible to participate in current or future plans which may be provided by The
Club for the benefit of its employees, provided that you qualify, and subject to
such plans terms and conditions. You may participate in, among other things, any
and all group life insurance policies, plans, and medical and health benefits
maintained by or on behalf of The Club to the fullest extent possible in
accordance with the terms and provisions hereof.
4. EXPENSES
You will be entitled to incur on behalf of The Club reasonable and necessary
expenses in connection with your duties, in accordance with The Club's customary
practice including the following:
A. Expenses incurred in connection with your business use of an
automobile which will be provided by the Club for your
exclusive use;
B. Travel Expenses, consistent with The Club's customary
policies, incurred by you on approved Club business trips.
5. JOB DESCRIPTION
During the term of your employment, you shall faithfully perform the duties and
have the responsibilities of Vice President of Finance. You agree to devote your
full time energies, talent and best efforts exclusively to your duties as Vice
President of Finance and to such other duties that may be assigned to you by the
Executive Vice President of Business.
6. PUBLIC CONTACT
You agree to conduct yourself with propriety and due regards to public
convention and morals, and agree not to engage in conduct which is detrimental
to or contrary to the rules of the Cleveland Indians Baseball Company, Inc.,
Major League Baseball and the American League of Professional Baseball Clubs,
and you further agree to abide by and be subject to the discipline of the
Commissioner of Major League Baseball and his decisions rendered in accordance
with the Professional Baseball Agreement.
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7. DEATH OR DISABILITY
Your death or permanent disability during the term of this agreement shall
immediately terminate this agreement. For the purposes of this Section 7,
permanent disability is defined as any condition caused by an accident, sickness
or otherwise, which, in the reasonable judgment of the President and Chief
Executive Officer of the Club, if any, the Chairman of the Board or the Board of
Directors, disables, or may in the future disable, you from substantially
performing the duties and services required under this agreement for a period of
120 days, whether consecutive or non-consecutive, in any 12-month period. Upon
termination of this Agreement pursuant to this Section 7, you shall be entitled
to no compensation or any of the other rights or benefits provided in this
agreement not already earned as of the date of such termination or otherwise
required by law. Provided, however, that upon your death, your primary
beneficiary shall be entitled to six (6) month's continued compensation and
benefits provided in this Agreement to you as of the date of your death.
8. TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION
In the event that you fail to observe and comply with the provisions of this
Agreement in any material respect, or in the event of your fraud or dishonesty
in the performance of your duties, The Club may discharge you prior to the
expiration of this Agreement by giving you written notice, which notice shall
state the specific facts upon which the discharge is based. In the event of such
discharge, or if you terminate your employment hereunder voluntarily, you shall
be entitled to no compensation or any of the other rights or benefits provided
in this Agreement not already earned as of the date of such discharge or
termination, except as otherwise required by law. Both parties agree, however,
that you shall have no right to terminate this Agreement voluntarily.
9. TERMINATION WITHOUT CAUSE
You agree that should you be discharged from your duties without cause, you are
obligated to seek, and if offered, accept other comparable employment, either
from another Major League Club or from other Baseball or non-baseball employer.
In the event that you are so discharged without cause, you will receive not less
than five (5) days written notice of such discharge. The compensation due by The
Club under this Agreement will be reduced by any compensation which you receive
from such other employment following such termination. The amount to be deducted
includes, but is not limited to, compensation or any free services, including,
salary, bonuses, fees, commissions, payments in kind, and similar items, and the
reasonable value of service rendered by you should you become self-employed
following termination.
10. BINDING EFFECT
This Agreement shall be binding upon, and shall inure to the benefit of, both
you and The Club. This Agreement may not be assigned or transferred without
consent of both parties.
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11. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the parties and supersedes in
its entirety any prior Agreements, arrangements and understandings between the
parties with respect to the subject matter thereof, and no amendment hereof
shall be deemed valid unless in writing and signed by both parties hereto.
12. GOVERNANCE
This Agreement is subject to and is governed by, all applicable rules of Major
League Baseball and the American League of Professional Baseball Clubs, and any
rules and regulations which The Club may announce from time to time.
Very truly yours,
CLEVELAND INDIANS BASEBALL COMPANY, INC.
By: Xxxxxxx X. Xxxxxx
President & CEO Accepted:
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Signature Signature
August 3, 1999 August 3, 1999
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Date Date
