EXHIBIT 10.5
EMPLOYMENT CONTRACT
Agreement made, effective as of March 25, 2000 by and between IAM Group, Ltd., a
corporation duty organized and existing under the laws of the State of New York,
with a place of business at 00 Xxxxx Xxxxxx, Xxxx xx Xxx Xxxx, Xxxxxx of New
York, State of New York, hereinafter referred to as "EMPLOYER", and Xxx
Xxxxxxxx, residing at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000, hereinafter
referred to as "BLAUFARB".
RECITALS
The parties recite and declare:
A. EMPLOYER is a HOLDING COMPANY, and owns several subsidiary
corporations engaged in the manufacturing, distribution and sales of
private and labeled apparel and accessories, under exclusive and non
exclusive licensing agreements with the National Football League
("NFL") and its associates or affiliates, Professional Bowlers
Association ("PBA") and other sports and non sports entities; and
X. XXXXXXXX represents he has been engaged in national sales activities
in the apparel industry, holding executive positions as NATIONAL SALES
MANAGER and/or VICE PRESIDENT OF SALES; and
C. It is the parties desire to enter into contract wherein BLAUFARB
shall be appointed as Vice President of Sales for EMPLOYER with overall
management and control of all EMPLOYER sales relating to the
manufacture and marketing of apparel.
For the reasons set forth above, and in consideration of the
mutual covenants and promises of the parties set forth in this
Agreement and intending to be legally bound, EMPLOYER and BLAUFARB
agree as follows:
1. Definitions: For purposes of this Agreement the following
definitions shall apply:
1.1. "Products" shall mean the products produced by
EMPLOYER including private label, and licensed
apparel and accessories for the National Football
League ("NFL") and the Professional Bowlers
Association ("PBA").
1.2. "Territory" shall mean the following: The united
States, Western Europe, Eastern Europe, Asia,
Australia, Canada and South America.
1.3. "Customers" shall mean customers that buy solely
within the Territory (whether or not shipment is
within the territory), exclusive of internet sales
made through the employer's wholly owned subsidiary,
Guardian Internet Solution Inc.'s e-commerce mall.
2. Hiring. EMPLOYER hereby hires BLAUFARB, and BLAUFARB hereby
agrees to act as Vice-President of Sales, and National Sales
Manager for EMPLOYER with respect to the Products in the
Territory. BLAUFARB shall faithfully and diligently perform the
duties typically performed by a VP-Sales and National Sales
Manager for EMPLOYER. BLAUFARB shall be entitled to all benefits
generally available to other executives and employees of the
EMPLOYER, including stock options or warrants if offered by the
EMPLOYER. At present, benefits are limited to company paid
family medical health insurance provided XXXXXXXX'x spouse is
not covered under a separate policy. EMPLOYER shall reimburse
BLAUFARB monthly for all reasonable and actual expenses incurred
in the performance of his duties under this Agreement not to
exceed $40,000 per year, provided that such expense is in strict
accordance with the relevant monthly line item of a written
budget that has been approved in advance, in writing, by an
officer of EMPLOYER. XXXXXXXX'X annual salary under this
Agreement shall be the Compensation, payable in accordance with
and at the same times as EMPLOYER'S ordinary payroll procedures.
3. Compensation. EMPLOYER shall pay BLAUFARB compensation for
each 12-month contract period during the term of this Agreement
in the amount of $175,000 per annum, payable as set forth below.
4. Additional Compensation. EMPLOYER shall pay BLAUFARB first
12- month contract period during the amount of $20,000, payable
as set forth below.
5. Special Compensation EMPLOYER shall pay BLAUFARB special
compensation after the first Calendar year during the term of
this Agreement in an amount of One (1%) percent of NFL sales
over $5,000,000. After the second Calendar year during the term
of this Agreement the special compensation shall be One (1%)
percent of Employer's NFL sales, over $10,000,000. After the
third Calendar year during the term of this agreement the
special compensation shall be One (1%) of Employer's NFL sales
over 20,000,000. After each Calendar year of this Agreement,
Employer shall pay to BLAUFARB within 90 days the special
compensation for such period. Any non NFL sales shall be
compensated by mutual agreement between the parties which must
be reduced to writing prior to expiration of the 2nd contract
year.
6. Term of Employment. This Agreement shall be for a period of
three (3) years commencing on or about April 1, 2000, or sooner
if Blaufarb can do so, and ending on or about March 31, 2003,
unless sooner terminated as provided herein.
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7. Termination. Unless terminated earlier pursuant to the
provisions of this Agreement this Agreement shall terminate on
or about March 31, 2003. This Agreement may also terminate at
the option of the EMPLOYER, if the NFL licenses are canceled or
not renewed by the National Football League. Notwithstanding
anything to the contrary in the preceding sentence, at any time
that Good cause(as defined below) exists or has arisen, EMPLOYER
may, at its election, terminate this Agreement by so notifying
BLAUFARB in writing, in which event such termination shall be
effective immediately. For purposes of this Paragraph, "Good
cause" shall mean the existence or occurrence of any of the
following: (a) any gross neglect of duty, (b) if BLAUFARB is
convicted of a felony, (c) if BLAUFARB files for any protection
under the federal bankruptcy laws (or any such proceeding is
filed against BLAUFARB and is not dismissed within 90 days of
such filing), (d) the occurrence or existence of any facts that
constitute grounds for termination pursuant to New York State
Law, (e) if BLAUFARB commits theft, larceny, embezzlement,
fraud, any acts of dishonesty, illegality, or moral turpitude,
(f) If BLAUFARB otherwise materially breaches any provision of
this Agreement (g) the death of BLAUFARB, and/or (h) if BLAUFARB
becomes materially disabled to such an extent that BLAUFARB is
precluded form performing the duties set forth in this Agreement
of a period of 90 consecutive days, or 120 days in the aggregate
during any one-year period upon termination of this Agreement,
(i) BLAUFARB shall return to Company all property belonging to
EMPLOYER, including without limitation all Confidential
Material, promotional material, advertising information,
samples, price lists and similar items, and (ii) EMPLOYER shall
have no obligation to make any further payment to BLAUFARB,
except for amounts earned pursuant to this Agreement by BLAUFARB
prior to such termination, which amounts EMPLOYER shall pay to
BLAUFARB upon the later of (A) XXXXXXXX'x returning to EMPLOYER
all such property, and (B) such amounts are actually due and
payable by EMPLOYER to BLAUFARB.
This agreement may also be terminated at the option of the EMPLOYER if the NFL
licenses owned by EMPLOYER or its subsidiaries are canceled or not renewed by
the National Football League.
BLAUFARB may likewise terminate this Agreement by giving EMPLOYER ten (10) days
advance written notice for GOOD CAUSE which shall be limited to failure of
BLAUFARB and EMPLOYER to reach a written agreement as to the amount of -
reasonable compensation.. which BLAUFARB is to receive from EMPLOYER as to
non-NFL sales as previously referred to in Paragraph 5 above.
In the event any matter relating to GOOD CAUSE termination shall become a matter
of dispute or controversy, the parties hereto agree to submit the same to
arbitration by the American Arbitration Association or such other arbitration
method as they may agree. Arbitration shall be a prerequisite to any right of
legal action or equitable action or suit
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7(a). Alcohol and drug testing. BLAUFARB agrees to submit to
random alcohol and drug testing, to be paid for by EMPLOYER. In
the event BLAUFARB refuses to submit to such testing, EMPLOYER
may consider this grounds for termination in accordance with
paragraph 7 above.
8. Schedule of Payments. A) During the first period of this
Agreement, EMPLOYER shall pay BLAUFARB and additional
compensation as follows:
12-month contract compensation to
April 1, 2000 to Dec.31, 2000 $15,000 per month payable in cash
or, at the Company's option, payable in part by issuing
unrestricted "S-8" shares of the Company provided Company is a
reporting Corporation on the OTCBB. If any compensation paid
during this period is paid in shares, EMPLOYER, In addition to
issuing said shares to BLAUFARB, shall reimburse BLAUFARB for
his actual documented costs and expenses to redeem said shares,
if held more then 3 months after issuance. The value of each
share shall be established in accordance with the terms of the
S-8 Registration filed with the SEC.
Jan. 1,2001 to
March 31, 2001 $60,000 payable in cash in equal weekly or
bimonthly installments in accordancE with EMPLOYER'S normal
payroll procedures.
B) During the second and third 12-month this Agreement, EMPLOYER
shall compensation as follows:
April 1, 2001 to
March 31, 2003 $175,000 per annum payable in cash in equal
Weekly or bi-monthly installments in accordance with Employer's
normal payroll procedures.
9. Xxxxxxxx'x Representations. BLAUFARB represents he has the
ability and experience to develop and manage a marketing and
sales program; that based on reasonable assumptions made by him,
his personal sales, exclusive of EMPLOYER'S sales, for NFL
products should reach $2,000,000 at the end of the first
Calendar period of this Agreement, ending December 31, 2000;
$5,900,000 at the end of the second Calendar period, ending
December 31, 2001; and $9,800,000 at the end of the third
Calendar period, ending December 31, 2002.
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10. Revisions in Compensation and Special Compensation. The
Parties agree that in the event XXXXXXXX'x personal NFL sales
are less than ($2,000,000.00) for the Calendar year ending
December 31, 2000, that XXXXXXXX'x Compensation for his
subsequent contract year beginning on or about April 1, 2001,
shall be reduced from the amount specified in Paragraph 8 (b)
above to One Hundred Fifty Thousand Dollars ($150,000.00)
payable weekly or bi-monthly or whatever the normal payroll
procedures are for Employer at that time.
If in the calendar years ending December 31, 2001 XXXXXXXX'x personal NFL sales
are less than 90% of the assumptions outlined in Paragraph 9 above, i.e.
$5,900,000.00, BLAUFARB agrees to reduce his compensation payable in the
contract year beginning on or about April 1, 2002 as follows:
80-90% of projections 160,000
70-79% of projections 145,000
0-69% of projections 130,000
If XXXXXXXX'x personal NFL sales in the period ending
December31, 2001 exceed $5,900,000 plus any shortfall of projected sales for the
period ending December 31,2000 (e.g. Assuming 1.7 million of personal sales as
of December 31, 2000 and 6.2 million of personal sales as of December 31, 2001),
BLAUFARB shall receive Make-up Compensation of $25,000.00 ($175,000 regular
salary having been reduced to $150,000 per first subparagraph above).
If XXXXXXXX'x personal NFL sales in the period ending December
31, 2002 exceed $9,800,000, plus any shortfall of projected sales for the
periods ending December 31,2000 and/or December 31, 2001 (e.g. Assuming 1.7
million of personal sales as of December 31, 2000, 5.2 million of personal sales
as of December 31, 200W and 10.8 million of personal sales as of December 31,
2002), BLAUFARB shall receive Make-up Compensation of $40,000 ( $175,000 regular
salary having been reduced to $150,000 per first subparagraph above, plus
$175,000 regular salary having been reduced to $160,000 per second subparagraph
above). Likewise, BLAUFARB, shall receive Make-up Compensation following any
other possible permutations of make-up of projected personal sales in Calendar
Year 2002 from shortfalls in personal sales occurring in either the first and/or
second Calendar Years that have caused XXXXXXXX'x Contract Year regular
Compensation to be reduced in either the Contract Years beginning on or about
either April 1,2001 and/or April 1,2002.
If BLAUFARB is entitled to any Make-up Compensation as outlined herein above,
said Make-up Compensation shall be paid to BLAUFARB within 90 days of the end of
the then current contract year, i.e. March 31, 2002 and/or March 31, 2003.
11. Representations and Warranties. BLAUFARB hereby represents
and warrants that this Agreement will not cause or require BLAUFARB to breach
any obligation to, or agreement or confidence with, any other person.
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12. Confidentiality. BLAUFARB hereby acknowledges that
EMPLOYER has made (and/or may during the term of this Agreement make) available
to BLAUFARB certain customer lists, products design information, performance
standards and other confidential and/or proprietary information of EMPLOYER or
licensed to EMPLOYER, including without limitation trade secrets and copyrighted
materials (collectively, the "Confidential Material"). Except as essential to
XXXXXXXX'x obligations as a Sales Manager of EMPLOYER with respect to the
Products in accordance with this Agreement, neither BLAUFARB nor any agent
officer, representative or independent contractor of or retainer by BLAUFARB
shall make any disclosure of this Agreement, the terms of this Agreement or any
of the Confidential Material. BLAUFARB shall notify each person to whom such
disclosure is made that such disclosure is made in confidence and shall be kept
in confidence by such person.
13. Governing Law. This Agreement shall be governed construed
in accordance with the laws of the State of New York.
14. Further Assurances. Each party to this Agreement shall
execute all instruments and documents and take all actions as may be reasonably
required to effectuate this Agreement.
15. Venue and Jurisdiction. For purposes of venue and
jurisdiction, this Agreement shall be deemed made and to be performed in the
City of New York, State of New York.
16. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one document
17. Expenses. If either party breaches any provision of this
agreement, the other non-breaching party shall have the right to xxx for damages
and/or injunctive relief for such breach. The prevailing party in such
litigation shall be entitled to recover from the unsuccessful party in such
litigation all costs, expenses, and actual attorney's fees relating to or
arising for the enforcement or interpretation of, or any litigation, arbitration
or mediation relating to or arising from any violation of this Agreement
18. Modification. This Agreement may be modified only by
written instrument executed by both parties to this Agreement. EMPLOYEE shall
agree to any modification of this Agreement if Federal or State Agencies, Rules,
Regulations or laws recommend or require such modification, except that
paragraphs 0, 0, 0, 0 & 0 xxxxxx xx modified without EMPLOYEE'S consent.
19. Headings. The headings of the Paragraphs of this Agreement
have been included only for convenience, and shall not be deemed in any manner
to modify or limit any of the provisions of this Agreement or be used in any
manner in the interpretation of this Agreement.
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20. Prior Understandings. This Agreement contains the entire
agreement between the parties to this Agreement with respect to the subject
matter of this Agreement is intended as a final expression of such parties'
agreement with respect to such terms as are included in this Agreement is
intended as a complete and exclusive statement of the terms of such agreement
and supersedes all negotiations, stipulations, understandings, agreements,
representations and warranties, if any, with respect to such subject matter,
which precede or accompany the execution of this Agreement.
21. Interpretation. Whenever the context so requires in this
Agreement all words used in the singular shall be construed to have been used in
the plural (and vice versa), each gender shall be construed to include any other
genders, and the word "person" shall be construed to include a natural person, a
corporation, a firm, a partnership, a joint venture, a trust an estate or any
other entity.
22. Partial Invalidity. Each provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law. If any
provision of this Agreement or the application of such provision to any person
or circumstance shall, to any extent be invalid or unenforceable, the remainder
of this Agreement or the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected by such invalidity or unenforceability, unless such
provision or such application of such provision is essential to this Agreement.
23. Successors in Interest and Assigns. BLAUFARB shall not
assign or delegate to any other person any rights or obligations under this
Agreement Subject to such restriction on transferability, this Agreement shall
be binding upon and shall inure to the benefit of the successors-in-interest and
assigns of each party to this Agreement Nothing in this Paragraph shall create
any rights enforceable by any person not a party to this Agreement except for
the rights of the successors-in-interest and assigns of each party to this
Agreement unless such rights are expressly granted in this Agreement to other
specifically identified persons. BLAUFARB has been advised that the EMPLOYER is
in the process of being acquired by Helsinki Capital Partners, Inc., in which
event this Agreement will be assigned to the new entity.
24. Notices. All notices or other communications required or
permitted to be given to a party to this Agreement shall be in writing and shall
be personally delivered, sent by registered or certified mail, postage prepaid,
return receipt requested, or sent by an overnight express courier service that
provides written confirmation of delivery, to such party at is address set forth
above in the introductory Paragraph of this Agreement. Each such notice or other
communication shall be deemed given, delivered and received upon its actual
receipt except that if it is sent by mail in accordance with this Paragraph,
then it shall be deemed given, delivered and received three days after the date
such notice or other communication is deposited with the United States Postal
Service or overnight express courier service in accordance with this Paragraph.
Any party to this Agreement may give a notice of change of its address to the
other party to this Agreement.
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25. Waiver. Any waiver of a default under this Agreement must
be in writing and shall not be a waiver of any other default concerning the same
or any other provision of this Agreement No delay or omission in the exercise of
any right or remedy shall impair such right or remedy or be construed as a
waiver. A consent to or approval of any act shall not be deemed to waive or
render unnecessary consent to or approval of any other or subsequent act.
26. Receipt of Copy. BLAUFARB hereby acknowledges that he has
received a signed copy of this Agreement
IN WITNESS WHEREOF the parties hereto have executed this
agreement as of the day and year herein above stated.
FOR THE EMPLOYEE:
By: /s/ XXX XXXXXXXX
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Xxx Xxxxxxxx
FOR THE EMPLOYOR:
By: /s/ XXXX XXXXXXXX
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Xxxx Xxxxxxxx, President
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