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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of
March, 1999, by and between SUPERIOR SPORTCARD AUCTIONS, LLC, a Delaware
limited liability company (the "Company"), and XXXX XXXXXXXXX, an
individual (the "Executive").
WITNESSETH:
A. The Company is engaged in the business of selling, primarily
in-person or by telephonic auctions or by means of electronic commerce, over the
internet, (i) sports trading card and (ii) sports memorabilia and sports
collectibles, including but not limited to game-used baseballs, footballs,
basketballs, hockey pucks, sports gear and player uniforms or other items that
have a value in excess of the customary retail prices of similar types of unused
or new items, because of their prior use in sports events or games or because
they have been autographed by or are associated with well-known athletes or
other sports celebrities or are associated with well known sports events
(collectively, "Sports Collectibles").
B. The Company, which is an indirect wholly-owned subsidiary of
Collectors Universe, Inc., a Delaware corporation ("CUI"), desires to employ
Executive as President of the Company, and Executive desires to accept and serve
in such position with the Company, pursuant to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of each party to the other set forth herein, the
Company and the Executive, intending to be legally bound, hereby agree as
follows:
1. Employment.
1.1 Position with the Company. The Executive is hereby
employed as the President of the Company, and the Executive accepts such
employment, on the terms and conditions set forth in this Agreement. In that
position, Executive shall be responsible for (a) obtaining the Company's
requirements for sports trading cards and Sports Collectibles for resale to the
public, and (b) performing such other duties as are assigned to Executive by the
Chairman of the Company (the "Chairman") or by the Managers of the Company (the
"Management Committee").
1.2 Responsibilities. Except as otherwise provided in Exhibit
A hereto (which, by this reference is made an integral part of this Section 1),
Executive agrees that during the Executive's employment hereunder:
(a) He shall devote his full business time and all of
his skills and efforts to the diligent and timely performance of the
responsibilities and duties described in Section 1.1 hereof; and
(b) He shall not serve as an officer, director,
employee, consultant or advisor to any other business or otherwise engage in any
other business activities (other than personal investing); provided, however,
that the Executive may serve as a director of another corporation so long as (i)
such corporation does not compete, directly or indirectly, with the Company or
any of its Affiliates (as defined in Subsection 11.8 hereof), (ii) such services
do not adversely affect Executive's ability to perform his duties under this
Agreement, and (iii) such service is first approved by the Management Committee
of the Company.
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1.3 No Conflicting Duties. Executive hereby represents and
warrants that, except as provided in Exhibit A hereto, he is under no
contractual or other commitments (written or oral) that are inconsistent with
his obligations set forth in this Agreement, including, but not limited to, any
employment, services, consulting, non-competition, trade secret or
confidentiality agreements. Without limiting the generality of the foregoing,
Executive represents that none of the information that he needs or will use in
performing his duties hereunder belongs to any other person or entity.
2. Term. The term of this Agreement and Executive's employment
hereunder shall be approximately three (3) years, commencing on March, 1999
(the "Employment Commencement Date") and ending on December 31, 2001; provided,
however, that this Agreement and Executive's employment hereunder shall be
subject to earlier termination as provided in Section 7 hereof.
3. Compensation.
3.1 Base Salary. As compensation for all services to be
rendered by Executive to the Company, or any of its Affiliates, whether under
this Agreement or otherwise, the Company shall pay to the Executive a base
salary of One Hundred Twenty Thousand Dollars ($120,000) each year during the
term of this Agreement (the "Annual Base Salary"). The Annual Base Salary shall
be paid in periodic installments on a regular basis in accordance with the
Company's normal payroll procedures and policies.
3.2 Incentive Compensation. During the term of this Agreement
Executive shall become entitled to earn bonus compensation on the following
terms and conditions:
(a) Bonus Schedule. Set forth below are the Company's
respective net earnings goals for each of 1999, 2000, 2001 (the "Earnings
Goals"). If the Company's net earnings, determined in accordance with generally
accepted accounting principles, consistently applied ("GAAP"), in any such year
equal or exceed the Earnings Goal for such year Executive shall receive bonus
compensation for such year, as is indicated in the table below:
Year Earnings Goal Bonus Amount
---- ------------- ------------
1999 $ 640,000 $100,000
2000 $ 750,000 $100,000
2001 $1,000,000 $100,000
(b) It shall be a condition precedent to the payment
of any annual bonus pursuant to Paragraph 3.2(a) that Executive shall have been
employed with the Company or any parent corporation or subsidiary of CUI or of
the Company for the entire calendar year (except in 1999 when he shall be
employed from the date hereof), to and including the last day of such year, and
Executive shall not be entitled to receive a partial or pro-rated bonus pursuant
to Paragraph 3.2(a) for any partial year of employment hereunder.
(c) In the event that the Company's net earnings for
any such calendar year are less than the Earnings Goal for such year, Executive
shall not be entitled to receive a partial or pro-rated bonus pursuant to
Paragraph 3.2(a) computed on the basis of the ratio of the Company's actual net
earnings to the Earnings Goal or otherwise; provided, however, that, in such
event the Management Committee, in its sole and absolute discretion, may elect
(but it shall not have any obligation) to award a discretionary bonus to
Executive on such basis and on such terms and conditions as it deems
appropriate.
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(d) The net earnings of the Company for each such
calendar year will be determined, on an accrual basis and in accordance with
GAAP, by CUI's Chief Financial Officer, who shall communicate that determination
in a written report to the Company's Management Committee. A true and correct
copy of such report shall be furnished to Executive, together with payment of
any bonus earned under Paragraph 3.2(a) within 15 days after that report is
received by the Management Committee. If the Executive disagrees with such
determination, he shall notify the Chairman of CUI, in writing, not later than
ten (10) days following the receipt of such report, specifying in reasonable
detail the nature of his disagreements and the Chairman and the Executive shall,
in good faith, use their reasonable efforts to resolve such dispute within the
next succeeding ten (10) days. If they are unable to resolve such dispute the
matter will be submitted for resolution to an accounting firm mutually selected
by the Chairman and the Executive. The determination of such accounting firm
shall be final, non-appealable and binding on the Executive, the Company and
CUI. The fees of such accountants shall be paid by the non-prevailing party with
respect to such dispute.
3.3 Participation in Fringe Benefit Programs. During his
employment with the Company, the Executive shall be entitled to participate in
all employee benefit plans or programs (including vacation time, sick leave and
holidays, but excluding any incentive or bonus compensation plans or programs
other than that described in Section 3.2 above) generally available to all
employees of Company, to the extent that his position, title, tenure, salary,
age, health and other qualifications make him eligible to participate therein.
The Executive's participation in any such plan or program shall be subject to
the provisions, rules and regulations thereof that are generally applicable to
all participants therein. Notwithstanding the foregoing, participation by
Executive in any stock option or equity compensation plan shall be determined
solely by the Board of Directors of CUI or any committee thereof, in its sole
and absolute discretion.
3.4 Expense Reimbursement. In accordance with Company's
policies established from time to time, the Company will pay or reimburse
Executive for all reasonable and necessary out-of-pocket expenses incurred by
him in the performance of his duties under this Agreement, subject to the
presentment to the Company of reports and receipts identifying the amounts and
business purposes of such expenses and the payees thereof.
3.5 Waiver of Certain Fees. If, during the term of this
Agreement, Executive consigns to the Company, for resale by it, any sports
trading cards or Sports Collectibles that are owned personally by him or by his
spouse or children, the Company will waive the commission that is customarily
charged, in the ordinary course of business, by the Company to owners of
consigned products on their sale by the Company.
4. Confidential Information and Company Property.
4.1 Confidential Information.
(a) Unless the Management Committee provides its
express prior written consent to the contrary, during the term of this Agreement
and at all times thereafter Executive shall hold in strict confidence and shall
not disclose to any person or entity, and Executive shall not use, other than
for the sole benefit of the Company and CUI, any Confidential Information of the
Company or CUI or any of their Affiliates (collectively, including CUI and the
Company, the "member companies of the CUI Group"). For purposes hereof,
"Confidential Information of the member companies of the CUI Group shall mean
any (i) financial statements or other financial information or data (historical
or prospective) of or relating to any of the member companies of the CUI Group
or any customer of any of the member
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companies of the CUI Group that has not been publicly disclosed by the owner of
such information, (ii) software used in any of the businesses of the member
companies of the CUI Group, (iii) manufacturing or marketing data and any other
information relating to any technique, process, formula, software, invention,
developmental or experimental work, work in progress, business methods or trade
secrets of any of the member companies of the CUI Group, (iv) information
relating to customers or clients of any of the member companies of the CUI Group
(including, without limitation, any customer or client list or lists of customer
or client sources), (v) information relating to the supply sources for sports
trading cards and Sports Collectibles obtained for the Company or any of the
other members of the CUI Group, (vi) business or marketing plans of any of the
member companies of the CUI Group and (vii) any other proprietary, confidential
or secret information belonging or relating to any of the member companies of
the CUI Group or any of their products or services or other business activities.
(b) The foregoing restrictions with respect to the
disclosure of Confidential Information shall not apply to (i) the communication,
to competitors of the Company, of information that is required to be
communicated to them in order to effectuate purchases or sales of Sports
Collectibles by or for the account of the Company; (ii) the sharing of purchase
and sale prospects between the Company and Superior Sports Cards, Inc., which
makes direct sales of Sports Collectibles other than by means of auctions
("SSC"); (iii) information which is or becomes, other than as a result of a
breach of this Agreement, generally available to the public; or (iv) the
disclosure of information required pursuant to a subpoena or other legal
process; provided that the Executive shall notify the Company, in writing, of
the receipt of any such subpoena or other legal process requiring such
disclosure immediately after receipt thereof and the Company shall have a
reasonable opportunity to quash such subpoena or other legal process or to
obtain appropriate protective orders prior to any disclosure by the Executive.
4.2 Other Company Property. Upon termination of his employment
for any reason whatsoever, Executive shall promptly return and deliver to the
Company (i) all documents, records, notebooks, work papers and all similar
repositories containing any Confidential Information of any of the member
companies of the CUI Group or any other information belonging to or concerning
any of the member companies of the CUI Group or any of their respective
customers or suppliers, whether prepared by Executive, the Company, CUI or
anyone else, and (ii) all other property of any of the member companies in
Executive's possession, such as but not limited to, computers, printers and
other computer accessories, software products, telephones, pagers and other
communication devices, furniture and keys.
5. Covenants Against Actions Damaging the CUI Group.
5.1 Executive agrees that, during the term of this Agreement
or at any time thereafter, he will not (i) make any claim that he has any right,
interest or title, of any kind or nature whatsoever, in or to any of the assets
of the Company or any of the other member companies of the CUI Group, or any
improvements or enhancements thereto or derivative works derived or developed
therefrom, or in or to any products, methods, practices, processes, discoveries,
ideas, inventions, software, improvements, enhancements, devices, creations,
business plans or systems relating to any of the respective businesses of, or
used, developed, invented or discovered by, any of the member companies of the
CUI Group or by Executive at any time during his employment either with Company
or any of the other member companies of the CUI Group, or (ii) disclose any of
such matters to any third party. Executive further agrees that, at the request
of the Company or CUI, at any time during or after his employment with Company,
he will assign to the Company or to such other member company of the CUI Group
that is designated by the Company or CUI, all rights, title and interests that
he may have in or to any inventions, works of authorship, software,
developments, improvements, enhancements or trade secrets, patents, copyrights
or other proprietary or intellectual property that he may develop during the
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course of his employment with the Company or any of the other member companies
of the CUI Group and will execute, acknowledge and deliver to the Company or CUI
such documents and instruments as the Company or CUI may reasonably require to
evidence or effectuate all such assignments.
5.2 Executive further agrees that during the term of this
Agreement, and for a period of two (2) years following the termination (for any
reason) of his employment with Company, he shall not, whether for himself or on
behalf of or in conjunction with any third party, (i) hire any employee of the
Company, CUI or any Affiliate thereof, or induce or entice any such employee to
leave his employment with Company, CUI or any Affiliate, and (ii) attempt to
induce any person that, at the time of or within the 12 months immediately
preceding the termination of his employment, was a customer of or supplier to
the Company, CUI or any of their Affiliates to cease doing business, or to
reduce the volume of business that such customer or supplier had been doing,
with Company, CUI or any such Affiliate. Notwithstanding the foregoing, if
Executive's employment with the Company is terminated, then, he may hire any
employee of the Company who, prior to the date hereof, was employed by Superior
SportsCard, Inc. and is hereafter hired by the Company.
6. Non-Competition.
6.1 Executive agrees that he will not engage, either directly
or indirectly, in any Competitive Activities (as hereinafter defined) at any
time during the term of this Agreement.
6.2 In addition, if Executive's employment is terminated
without Cause pursuant to Paragraph 7.2 hereof, and Executive engages in any
Competitive Activities, or breaches any of his obligations under Sections 4 or 5
of this Agreement, at any time during the Severance Period (as hereinafter
defined in Section 8.2 below), then, Executive's right to receive Severance
Compensation, and any other amounts under this Agreement (including any amounts
otherwise payable under Section 8 hereof), shall terminate automatically and
without the necessity of any further action on the part of the Company or
Executive.
6.3 For purposes of this Section 6, Executive shall be deemed
to be engaged in "Competitive Activities" in violation of this Agreement if he
engages, either directly or indirectly, in or participates or provides any
assistance (financial, advisory or other and whether as employee, employer,
consultant, agent, principal, partner, stockholder, lender, officer, director,
manager, or in any other representative capacity) in or to any person,
corporation, or other business entity that engages or is proposing to engage in,
any business or business activities that compete with or are substantially
similar to the business or business activities of the Company or CUI, or any of
the other member companies of the CUI Group, in any city or county within the
United States in which any of the member companies of the CUI Group is engaging
in its business. Notwithstanding the foregoing, however, Executive's ownership
of up to one percent (1%) of the outstanding shares of any class of equity
securities of any corporation that are listed for trading on the New York or
American Stock Exchanges or on the NASDAQ Stock Market shall not constitute a
breach of this Section 6.
6.4 In furtherance and not in limitation of the foregoing
provisions of this Section 6, should the duration or geographical extent of, or
business activities covered by any provision of this Section 6, or any of the
provisions of Sections 4 or 5 of this Agreement, be in excess of that which is
valid and enforceable under applicable law, then such provision shall be
construed to cover only the maximum duration, extent or activities (as the case
may be) which may validly and enforceably covered under applicable law. The
Executive acknowledges the uncertainty of the law in this respect and expressly
stipulates that such provisions shall be given the construction which renders
its provisions
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valid and enforceable to the maximum extent (not exceeding its express terms)
possible under applicable law.
7. Termination Prior to Expiration of the Term.
7.1 Terminations Other than without Cause.
(a) Disability. Executive's employment shall
terminate immediately, without notice, upon the Executive's becoming totally
disabled. For purposes of this Agreement, the term "totally disabled" or "total
disability" means an inability of Executive, due to a physical or mental
illness, injury or impairment, to perform a substantial portion of his duties
for a period of 120 or more consecutive days, or for an aggregate of 180 days
(whether or not consecutive) in any 12-month period, as determined by Company's
Management Committee.
(b) Death of Executive. Executive's employment shall
terminate immediately, without notice, upon the death of Executive.
(c) Termination for Cause. The Company may terminate
Executive's employment at any time for "Cause" (as hereinafter defined)
immediately upon written notice to Executive. For purposes hereof "Cause" shall
exist and the Company shall be entitled to terminate Executive's employment
pursuant to this Paragraph 7.1(c), if:
(i) Executive has committed a material
breach of his duty of loyalty to Company or CUI or has violated any
conflict of interest policy of CUI or the Company; or
(ii) Executive has committed an act or has
failed to act, where such act or failure to act constitutes intentional
misconduct, a reckless disregard of the consequences of such act or
failure to act, or gross carelessness by Executive; or
(iii) Executive has committed, or is charged
with the commission of, an act that, under applicable law or government
regulations, could be held to constitute the commission of a felony, or
the commission of a misdemeanor involving moral turpitude, or could
subject the Company, CUI or any Affiliate to civil or criminal
penalties or fines or civil liabilities; or
(iv) Executive commits a breach of any of
his covenants contained in any of Sections 4, 5 or 6 hereof; or
(v) Executive commits any other breach of
this Agreement, or of any duties assigned to Executive by the Chairman
or Management Committee, which is willful on the part of Executive, or
Executive habitually neglects his duties under this Agreement, and
fails to cure such breach or neglect of duties within fifteen (15) days
following written notice thereof from the Management Committee or if
there are more than two (2) instances of any such breach or of any
habitual neglect of duties in any period of 12 consecutive months, even
if remedied within a period of fifteen (15) days after notice thereof
from the Management Committee.
7.2 Termination Without Cause. The Company may terminate
Executive's employment for any reason, other than one of the reasons enumerated
in Paragraphs 7.1(a), 7.1(b) or 7.1(c) hereof, or for no reason whatsoever, at
any time effective upon written notice to Executive. Any
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such termination pursuant to this Section 7.2 shall constitute a "termination
without Cause" to which Section 8.2 hereof shall be applicable. In the event
that the Company commits a material breach of this Agreement and fails to cure
such breach within thirty (30) days of its receipt of a written notice from
Executive specifying the nature of such breach, Executive's sole right and
remedy shall be (i) to terminate this Agreement effective on ten (10) days'
prior written notice to the Company, and (ii) to receive the compensation set
forth in Section 8.2 hereof, to the same extent and with the same consequences
as if such breach by the Company constituted a termination of Executive's
employment by the Company without Cause.
8. Compensation upon the Termination of the Executive's Employment by
the Company.
8.1 Termination due to Disability or Death or for Cause. In
the event that the Executive ceases to be employed by the Company by reason of
the termination of Executive's employment by the Company pursuant to Paragraph
7.1(a), Paragraph 7.1(b) or Paragraph 7.1(c) above, then, he shall not be
entitled to any compensation, nor shall the Company have any obligation to pay
any sum or have any liability to Executive whether as compensation for his
services or as a result of such termination of employment, or otherwise, other
than (i) the portion of his then current Annual Base Salary which has accrued
through, but was unpaid as of, the date of such termination of employment; and
(ii) if and to the extent unpaid as of the effective date of such termination of
employment, any bonus earned for the calendar year immediately preceding the
year in which such termination occurred. Without limiting the foregoing, in the
event of a termination of Executive's employment pursuant to Paragraph 7.1(a),
Paragraph 7.1(b) or Paragraph 7.1(c), Executive shall not be deemed to have
earned and shall not be entitled to receive any bonus compensation for or in
respect of the calendar year in which such termination occurred.
8.2 Termination By the Company Without Cause. In the event
that Executive ceases to be employed by the Company by reason of the termination
of Executive's employment by Company without Cause pursuant to Section 7.2 above
(including a termination of Executive's employment by Executive due to a
material breach of this Agreement by the Company which goes uncured), Executive
shall not be entitled to any compensation, nor shall the Company have any
obligation to pay any sum or have any liability to Executive whether as
compensation for his services or as a result of such termination of employment,
or otherwise, other than (i) the portion of his then current Annual Base Salary
which has accrued through, but was unpaid as of, the date of such termination of
employment, (ii) if and to the extent unpaid as of the effective date of such
termination of employment, any bonus earned for the calendar year immediately
preceding the year in which such termination occurred, and (iii) severance
payments in an aggregate amount (the "Severance Amount") equal to the lesser of
(A) one year's Annual Base Salary (as then in effect) or (B) the result obtained
by multiplying one-twelfth (1/12th) of Executive's then current Annual Base
Salary by the number of months then remaining in the term of this Agreement (the
"Severance Period"). Without limiting the foregoing, in the event of a
termination of Executive's employment pursuant to Section 7.2, Executive shall
not be deemed to have earned and shall not be entitled to receive any bonus
compensation for or in respect of the calendar year in which such termination
occurred.
8.3 Timing of Payments and Withholding. All payments required
to be made by the Company to the Executive pursuant to this Section 8,
including, but not limited to any Severance Amount that may become payable
pursuant to Section 8.2, shall be paid in accordance with the Company's normal
payroll procedures and policies and will be subject to withholding of all
payroll and similar taxes required, under applicable law to be withheld by the
Company. In addition, if the Executive becomes entitled to receive the Severance
Amount pursuant to Section 8.2, such Amount shall
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be paid during the Severance Period in installments in the same amounts and at
the same times as the installments of his Annual Base Salary would have been
paid hereunder had he been employed by the Company for the remainder of the
Severance Period and had voluntarily resigned his employment at the end of such
Severance Period.
9. Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the prior written consent of the other party,
except that the Company may, without the consent of the Executive, assign its
rights and obligations under this Agreement to (i) CUI, (ii) an Affiliate of the
Company or of CUI, or (iii) to any unaffiliated corporation, firm or other
business entity with or into which the Company may merge or consolidate, or to
which the Company may sell or transfer all or substantially all of its assets.
After any such assignment by the Company, the Company shall be discharged from
all further liability hereunder and such assignee shall thereafter be deemed to
be the Company for the purposes of all provisions of this Agreement including
this Section 9.
10. Injunctive Relief. The Executive is being employed by the Company
due to his knowledge of the industry in which the Company conducts business and
his substantial experience and his record of achievement with his prior
employers within such industry. The parties acknowledge, and Executive agrees,
that for these reasons, it would be difficult to compensate the Company or CUI
fully for the damages they would incur if Executive were to violate or breach
any of his material obligations under this Agreement, which shall include,
without limitation, the Executive's obligations under Sections 4, 5 and
Subsection 6.1 hereof. Accordingly, the Executive specifically agrees that each
of the Company and CUI, individually or jointly, shall be entitled to temporary,
preliminary and permanent injunctive relief to halt a breach or to prevent a
threatened breach of this Agreement by Executive and to the remedy of specific
enforcement of Executive's obligations under this Agreement, without any
obligations on the part of the Company or CUI either (i) to join the other in
any proceeding brought to obtain such relief or remedies and (ii) to post a bond
or cash or other security in connection therewith. Nothing herein, however,
shall diminish the right of the Company and the right of CUI to claim and
recover monetary damages in addition to injunctive relief and specific
performance.
11. Miscellaneous.
11.1 Governing Law. This Agreement is deemed to have been made
in the State of Michigan, and its interpretation, its construction and the
remedies for its enforcement or breach are to be applied pursuant to, and in
accordance with, the laws of the State of California for contracts made and to
be performed in that state. Notwithstanding the foregoing, in the event any
party hereto chooses or is required to initiate any legal action or proceeding
to enforce its rights hereunder, such action or proceeding shall be brought and
maintained exclusively in the Superior Court for the County of Orange, in
California and each party agrees to accept, and not to challenge, the
jurisdiction of such court over the parties and the subject matter of such
action or proceeding or the convenience of the forum and to accept and not to
challenge the adequacy of service by certified or registered mail. The
prevailing party in any such action or proceeding shall be entitled to recover
its reasonable attorneys fees and disbursements, expert witness fees and
disbursements and other costs of suit from the non-prevailing party. TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY EXPRESSLY WAIVES
ITS RIGHT TO A JURY TRIAL IN ANY SUCH ACTION OR PROCEEDING, IRRESPECTIVE OF
WHICHEVER PARTY MAY BRING ANY SUCH ACTION OR PROCEEDING.
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11.2 Prior Agreements.
(a) This Agreement contains the entire agreement of
the parties relating to Executive's employment with the Company and supersedes
all prior or concurrent agreements and understandings with respect thereto
between them, and the parties hereto have made no agreements, representations or
warranties relating to such employment which are not set forth herein. Executive
further acknowledges and agrees that, except as otherwise provided in Paragraph
11.2(b) hereof, there are no agreements or understandings between him and CUI
regarding his employment or any of the other matters contained in this
Agreement.
(b) Concurrently herewith Executive and CUI are
entering into an Acquisition Agreement (the "Acquisition Agreement"), which
provides for the sale by Executive to CUI of Executive's entire ownership
interest in the Company and a Non-Competition Agreement (the "Non-Competition
Agreement") on which CUI is and will be relying in entering into, and paying to
Executive the consideration for such ownership interest in the Company pursuant
to, the Acquisition Agreement. Notwithstanding anything to the contrary
contained in this Section 11.2, nothing in this Agreement shall diminish or
adversely affect any of the rights of CUI or any of the obligations of Executive
under the Acquisition Agreement or the Non-Competition Agreement. Executive
acknowledges and agrees that (i) he has received separate consideration for his
covenants and agreements under the Acquisition Agreement and such
Non-Competition Agreement and (ii) each of the Acquisition Agreement and the
Non-Competition Agreement are obligations of his that are separate and
independent of his obligations under this Agreement and (iii) each of the
Acquisition Agreement and the Non-Competition Agreement shall survive the
execution and delivery of this Agreement and any termination of this Agreement
or Executive's employment with the Company.
11.3 Withholding Taxes. The Company may withhold from any
salary and benefits payable under this Agreement all federal, state, city or
other taxes or amounts as shall be required to be withheld pursuant to any law
or governmental regulation or ruling.
11.4 Amendments. No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed by the parties
hereto.
11.5 No Waiver. No term or condition of this Agreement shall
be deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
11.6 Severability. If, but only to the extent that, any
provision of this Agreement shall be invalid or unenforceable, then, subject to
the provisions contained in Section 6.4 hereof, such offending provision shall
be deleted from this Agreement, but only to the extent necessary to preserve the
validity and effectiveness of this Agreement to the fullest extent permitted
under applicable law.
11.7 Interpretation. This Agreement is the result of
arms-length negotiations between the parties hereto and no provision hereof,
because of any ambiguity found to be contained herein or otherwise, shall be
construed against a party because such party or its legal counsel was the
draftsman of that provision. Unless otherwise indicated elsewhere in this
Agreement, (a) the term "or" shall not be exclusive, (b) the term "including"
shall mean "including, but not limited to," (c) the terms "herein," "hereof,"
"hereto," "hereunder" and other terms similar to such terms shall refer to this
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Agreement as a whole and not merely to the specific section, subsection,
paragraph or clause where such terms may appear.
11.8 Affiliate. As used in this Agreement, the term
"Affiliate"(when used with reference to the Company or CUI, as the case may be)
means any corporation, association or other business entity (i) which owns or
controls more than 50% of the total voting power of the Company or CUI (as the
case may be) or, (ii) of which more than 50% of the shares of stock or other
ownership interests entitled to vote in the election of directors, managers, or
trustees thereof is owned or controlled, directly or indirectly, by the Company
or CUI (as the case may be), and in the case of the Company, includes CUI.
11.9 CUI as Third Party Beneficiary. CUI is an intended third
party beneficiary of the covenants and agreements of Executive hereunder and
shall be entitled to enforce such covenants and agreements independently of the
Company.
11.10 Counterpart Execution. This Agreement may be executed by
facsimile and in counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
"EXECUTIVE" SUPERIOR CARD AUCTIONS, LLC
a Delaware limited liability company
/s/ Xxxx Xxxxxxxxx By: /s/ Xxxxx Xxxx
-------------------------------- --------------------------------
Xxxx Xxxxxxxxx Xxxxx Xxxx, Chairman
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11
EXHIBIT A
CERTAIN EXCEPTIONS
Superior Sportcard Auctions, LLC, a Delaware limited liability company
(the "Company"), and Xxxx Xxxxxxxxx, an individual (the "Executive"), are
entering an Employment Agreement dated as of February 5, 1999 (the "Employment
Agreement"), of which this Exhibit A forms an integral part.
1. The Company hereby acknowledges that Executive owns all of the stock
and manages a corporation, under the name Superior SportCard, Inc. ("SSC"),
which sell sports trading cards and Sports Collectibles at trade shows and by
telephone, mail or by means of electronic commerce (the "SSC Business").
However, SSC does not conduct, and the SSC Business does not include the conduct
of, auctions at which sports trading cards or Sports Collectibles are sold.
2. Notwithstanding any provision to the contrary contained in the
Employment Agreement, it is agreed that Executive shall be entitled to continue
to own all of the shares of capital stock and to serve as the President of SSC
and to devote a portion of his business time to the management and conduct of
the SSC Business, without thereby violating or breaching his obligations to the
Company under the Employment Agreement, provided that and for so long as
Executive complies with the following covenants:
(a) Executive shall cause SSC to maintain its inventories of
sports trading cards and Sports Collectibles at amounts, determined in
accordance with GAAP, that will not at any time exceed $100,000 in the
aggregate, valued at cost;
(b) Executive shall cause SSC (i) to refrain from engaging in
the sale of Sports Collectibles by means of in-person or telephonic
auctions or by means of auctions that are conducted over the internet
or over any other medium of electronic commerce (whether in existence
on the date hereof or hereafter developed), and (ii) to make any
auction sales of Sports Collectibles solely through the auction
facilities or media of the Company or other member companies of the CUI
Group.
(c) The time that Executive's devotes to the management and
conduct of the SSC Business shall not unduly interfere with the
performance of Executive's duties to the Company under this Agreement.
3. Terms with initial capital letters contained in this Exhibit A shall
have the meanings given to them in the Employment Agreement unless such terms
are otherwise defined herein or by reference to a definition contained in
another agreement to which the Company or CUI and Executive are parties.
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