EXHIBIT 10(C)
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of September 10, 1998 by
and between EssxSport Corp., a Nevada corporation ("Employer"), and Xxxxx
Xxxxxxxx ("Employee").
RECITALS:
WHEREAS, Employer desires to retain the services of Employee, and Employee
desires to provide services to Employer in accordance with the terms,
conditions, and provisions of this Agreement; and
NOW, THEREFORE, in consideration of the covenants and agreements of the parties
herein contained, the parties to this Agreement agree as follows:
1. Term. Subject to the terms and conditions set forth in this Agreement,
Employer hereby employs Employee, and Employee hereby accepts such employment
from Employer, for a period commencing on September 10, 1998 (the "Effective
Date") and expiring on January 30, 2009, except as otherwise provided herein.
2. Duties. Employee will be employed as an Executive President and the Chief
Executive Officer of Employer, and in such capacity will perform the normal
duties associated with such position and such other reasonable duties as may be
assigned from time to time by the Board of Directors of Employer consistent with
that of an Executive President or a Chief Executive Officer. During the term of
this Agreement, Employee shall devote his full time, attention, and energies to
the business of Employer to discharge his duties faithfully, diligently, to the
best of his abilities, and in a manner consistent with any and all policies and
guidelines as may be established by Employer from time to time. Employee shall
report solely to the Board of Directors.
3. Compensation.
(a) Subject to the terms and conditions of this Agreement and as compensation
for the performance of his services hereunder, Employer will pay Employee a
fixed salary at a minimum annual rate of $48,000 (such initial rate is
referred to herein as the "Initial Salary," and as it may be adjusted
upward from time to time as provided by the Board of Directors of Employer,
is referred to herein as "Salary"). Employee's Salary will accrue and be
payable to Employee in accordance with the payroll practices of Employer
for senior executives in effect from time to time during the term of this
Agreement.
(b) Employee shall be entitled to receive an annual formula bonus equal to an
amount up to fifty percent (50%) of the Salary based upon attainment of
objectives identified in a business plan for Employer to be adopted by the
Board of Employer.
At its sole discretion the Board of Directors of Employer may develop such other
incentive compensation arrangements, including but not limited to additional
bonus incentives, as may be determined to be appropriate for the conduct of
Employer's business and Employee's duties in connection therewith.
(c) All payments to Employee pursuant to this Agreement will be subject to
deduction and withholding authorized or required by applicable law. Employee
shall also be paid amounts as shall equal the federal and state, if applicable,
income taxes (i.e., gross-up for income taxes) which will be payable by Employee
relating to the reimbursement of expenses as set forth in Section 4 hereof.
4. Employee Benefits; Reimbursement of Expenses. During the term of this
Agreement, Employer shall provide such fringe benefits, including paid sick
leave, paid holidays, participation in health, dental, and life insurance plans,
and other employee benefit plans which are regularly maintained by Employer for
its senior executive officers in accordance with the policies of Employer in
effect from time to time. Notwithstanding the foregoing, Employee shall be
entitled to a minimum of four (4) weeks of paid vacation each year of this
Agreement. In addition, during the term of this Agreement, at Employee's option,
Employer shall reimburse Employee for the cost of liability and collision
insurance on such automobile and all maintenance and gasoline purchases.
Employer will also reimburse Employee for his travel and entertainment, and
other business expenses incurred in connection with his employment under this
Agreement in accordance with the policies of Employer in effect from time to
time. During the term of this Agreement, Employer will also pay the premiums for
a $100,000 term life insurance policy.
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5. Confidentiality.
(a) From the Effective Date of this Agreement and in consideration for the
promises made by Employee herein, including promises made by Employee in Section
6 below, Employer promises and agrees to provide Employee certain confidential
information consistent with the job duties of an individual in his position
including, without limitation, customer, supplier, product and distributor
lists, trade secrets, plans, manufacturing techniques, sales, marketing and
expansion strategies, financial records (including business plans, financial
statements, etc.), and technology and processes of Employer and/or its
affiliates, as they may exist from time to time, and information concerning the
products, services, production, development, technology and all technical
information, procurement and sales activities and procedures, promotion and
pricing techniques and credit and financial data concerning customers of, and
suppliers to, Employer and/or its affiliates (collectively "Confidential
Information").
In consideration for Employer's promises herein, Employee acknowledges and
agrees that all Confidential Information previously provided or known to
Employee in the course of his employment with Employer and all such Confidential
Information made available and provided to Employee pursuant to the terms of
this Agreement will be received in strict confidence and will be used only for
the purposes of performing his duties pursuant to this Agreement and that no
such Confidential Information will otherwise be used or disclosed by Employee
during or after the term of this Agreement without the prior written consent of
Employer. Employee acknowledges and agrees that upon termination of Employee's
employment hereunder for any reason, Employee will leave and/or return all
Confidential Information and other documents, records, notebooks, customer
lists, mailing lists, business proposals, contracts, agreements, and other
repositories containing information concerning Employer or its financial
condition or business (including all copies thereof) in Employee's possession,
whether prepared by Employee or others, will remain with or be returned to
Employer. Notwithstanding the foregoing, this Section shall be inoperative as to
any portion of the Confidential Information which (i) is or becomes generally
available to the public other than as a result of a disclosure by Employee or
(ii) becomes available to Employee on a non-confidential basis and not in
contravention of Employer's rights or applicable law from a source (other than
Employer) which Employee reasonably believes is entitled to possess and disclose
it.
(b) Employee acknowledges and agrees that all manuals, drawings, blueprints,
letters, notes, notebooks, financial records (including, without limitation,
budgets, business plans and financial statements), reports, computers, computer
equipment, computer disks, hard drives, electronic storage devices, books,
procedures, forms, documents, records or paper, or copies thereof, pertaining to
the operations or business of Employer made or received by Employee or made
known to him in any way in connection with his employment activities or
otherwise and any other Confidential Information is and will be the exclusive
property of Employer. Employee agrees not to copy or remove any of the above
from the premises and custody of Employer, or disclose the contents thereof to
any other person or entity except in the ordinary course of business consistent
with Employer's policies. Employee acknowledges that all such papers and records
will at all times be subject to the control of Employer, and Employee agrees to
surrender the same upon request of Employer, and will surrender such no later
than any termination or expiration of this Agreement.
6. Non-competition. Employee covenants and agrees that, during the period
Employee is employed by Employer, and if Employee's employment is terminated
pursuant to Section 8(a) or Employee resigns for any reason (other than as a
result of a Constructive Discharge), for a period of one year thereafter,
Employee will not directly or indirectly compete with Employer in the United
States. For the purposes of this Section 6, the following terms shall have the
meanings indicated below:
(a) The term "compete" shall mean, with respect to the business of Employer,
engaging in or attempting to engage in the direct mail marketing with the use of
a catalog of sports related equipment to institutional customers or any other
business which generates more than 10% of Employer's revenues at the time of
termination, either alone or with any individual, partnership, corporation, or
association.
(b) The words "directly or indirectly" as they modify the word "compete" shall
mean: (i) acting as an agent, representative, consultant, officer, director, or
employee of any entity or enterprise which is competing (as defined in this
Section 6) with the business of Employer; (ii) participating in any such
competing entity or enterprise as an owner, partner, limited partner, joint
venture, creditor, or stockholder (except as a stockholder holding less than a
five percent (5%) interest in a corporation whose shares are actively traded on
a regional or national securities exchange or in the over-the-counter market);
(iii) communicating to any such competing entity or enterprise any competitive
non-public information concerning any past, present, or identified prospective
client or customer of, or supplier to, Employer; (iv) soliciting the customers,
distributors, dealers, or independent sales persons of Employer or its
Affiliates (as defined below) as of Employee's termination date; or (v)
recruiting, hiring, or assisting others in
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recruiting or hiring (collectively referred to as "Recruiting Activity") any
person who is, or within the 12-month period immediately preceding the date of
any such Recruiting Activity was, an employee of Employer or its Affiliates. For
the purposes of this Agreement, the term "Affiliates" shall mean all
subsidiaries of Employer and each entity in which Employer is an equity investor
(or was an equity investor within the 12-month period preceding the date
Affiliate status is determined) which controls, is controlled by, or under
common control with Employer.
(c) Employee understands and agrees that the scope of this covenant by Employee
contained in this Section is reasonable as to time, area, and persons and is
necessary to protect the proprietary and legitimate business interest of the
Employer, and but for such covenant by Employee the Employer would not have
agreed to enter into the transactions contemplated by this Agreement. Employee
agrees that this covenant is reasonable in light of the compensation and other
consideration Employer has agreed to provide Employee pursuant to this
Agreement. It is further agreed that such covenant will be regarded as divisible
and will be operative as to time, area, and persons to the extent that it may be
so operative.
7. Injunctive Relief. If Employee breaches any of the provisions of Sections 5
or 6 hereof, Employer shall be entitled to specific performance, injunctive
relief, or such other legal and/or equitable remedies as may be appropriate.
Nothing contained herein shall be construed as prohibiting Employer from
pursuing any other remedies available to it for such breach of any of the terms
and provisions of this Agreement, nor limiting its right to the recovery of
damages from Employee or any other person or entity for the breach or violation
of any provision of this Agreement, whether such remedy be at law or in equity.
8. Termination. (a) Employer may terminate Employee's employment for Cause (as
defined herein), in writing, stating the reasons for termination with Cause
within fifteen (15) days of the date of termination. Notwithstanding the
foregoing and with respect to Section 8(g)(iv), Employer may terminate
Employee's employment for Cause only if such Cause is not cured within 10 days
following Employee's receipt of written notice thereof by Employer to Employee.
If Employee's employment is terminated for Cause, Employee will be paid Salary
to the date of such termination notice and shall be paid Salary for all accrued
but unused personal, vacation, and sick days (less all amounts required to be
withheld or deducted there from and all undisputed amounts owed or due by
Employee to Employer).
(b) If Employee terminates his employment with Employer other than as a result
of a Constructive Discharge and, if during the term of this Agreement set forth
in Section 1 Employer has not materially breached any provision of this
Agreement, Employee will be paid only Salary as has been earned to the date of
termination and for all accrued but unused personal, vacation, and sick days
(less all amounts required to be withheld or deducted there from and all amounts
owed or due by Employee to Employer).
(c) If no other provision in this Section 8 is applicable and if this Agreement
terminates pursuant to the expiration of the term set forth in Section 1,
subject to Section 8(b), Employee will be paid only Salary as has been earned to
the date of termination and for all accrued but unused personal, vacation, and
sick days (less all amounts required to be withheld or deducted there from and
all amounts owed or due by Employee to Employer) or such longer period as he is
entitled pursuant to the provisions of Section 8(b) and/or Section 9.
(d) If Employee dies or is disabled, as determined by his physician, so that he
is unable to work for six consecutive months during the term hereof, this
Agreement will terminate, and Employer will (i) pay to the estate of Employee,
or Employee, as the case may be, the Salary which would otherwise be payable to
Employee up to the end of the month in which his death or such six-month period
occurs and for all accrued but unused personal, vacation, and sick days (less
all amounts required to be withheld or deducted there from and all amounts owed
or due by Employee to Employer), and (ii) provide to Employee's dependents
(including spouse) and to Employee, in the case of such a disability, for a
period of at least two years after Employee's death or disability and at no
charge to such dependents or Employee, health and accident insurance with
coverage no less than the coverage available during such time to Employer's
senior executive officers. Notwithstanding the foregoing, Employer's obligations
under this Section shall be reduced by the amounts obtained by Employee under
any applicable disability insurance policy.
(e) If this Agreement or the employment of Employee is terminated, except as
otherwise specifically set forth herein, Employee will not be obligated to
mitigate his damages nor the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, and the acceptance of
employment elsewhere after termination shall in no way reduce the amount of
Salary due hereunder.
(f) For the purposes of this Agreement, "Cause" shall mean that Employee shall
have committed:
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(i) an intentional material act of fraud or embezzlement in connection with his
duties or in the course of his employment with Employer;
(ii) an intentional wrongful material damage to property of Employer;
(iii) an intentional wrongful disclosure of material secret processes or
material confidential information of Employer; or (iv) an intentional and
continued failure to perform his duties as Executive President and Chief
Executive Officer (other than any such failure resulting from incapacity due to
physical injury or illness or mental illness as such is provided for in Section
9).
For purposes of this Agreement, no act or failure to act, on the part of
Employee, shall be deemed "intentional" unless done, or omitted to be done, by
the Employee in bad faith and without reasonable belief that his action or
omission was in the best interest of the Employer.
(g) For the purposes of this Agreement, "Constructive Discharge" means a change
in office, title, or position from that reasonably associated with being an
Executive President and Chief Executive Officer, other than a promotion; a
change in reporting of Employee to any person other than the Board of Directors
of Employer; a required relocation to a location in excess of thirty (30) miles
of Employer's current principal location; a reduced Salary; a material
diminution in responsibilities; or any other material breach of this Agreement
by Employer.
(i) The provisions of this Section 8 shall survive the termination of this
Agreement.
9. Disability. If Employee is unable to perform his assigned duties by reason
of illness, injury, or incapacity (other than as a result of abuse of drugs,
alcohol, or other substances), he will be entitled to receive such disability
benefits as are provided by Employer's disability policies for its other senior
executive officers.
10. Binding Nature.
(a) Employer will require any successor and any corporation or other legal
person, which is in control of such successor (as "control" is defined in
Regulation 230.405 or any successor rule or regulation promulgated under the
Securities Act of 1933, as amended) to all or substantially all of the business
and/or assets of Employer (by purchase, merger, consolidation, or otherwise), by
agreement in form and substance reasonably satisfactory to Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Employer would be required to perform it if no such
succession had taken place. Failure of Employer to obtain such agreement prior
to the effectiveness of any such succession will be a material breach of this
Agreement by Employer. Notwithstanding the foregoing, any such assumption shall
not, in any way, affect or limit the liability of the Employer under the terms
of this Agreement or release the Employer from any obligations hereunder. As
used in this Agreement, "Employer" shall mean Employer as hereinbefore defined
and any successor to its business and/or all or part of its assets as aforesaid
which executes and delivers the agreement provided for in this Section 11 or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law.
(b) This Agreement and all the rights of Employee under this Agreement will
inure to the benefit of and will be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, devisees, and
legatees.
(c) Except as set forth above, neither this Agreement, nor any of the rights,
interests or obligations hereunder shall be assigned by either party hereto,
whether by operation of law or otherwise, without the prior written consent of
the other party, nor is this Agreement intended to confer upon any other person
other than the parties hereto any rights or remedies hereunder.
11. Severability. If any provision of this Agreement is declared or found to be
illegal, unenforceable, or void, in whole or in part, then both parties will be
relieved of all obligations arising under such provision, but only to the extent
of the portion of the provision which is illegal, unenforceable, or void. The
intent and agreement of the parties to this Agreement is that this Agreement
will be deemed amended by modifying and/or reforming any such illegal,
unenforceable, or void provision to the extent necessary to make it legal and
enforceable while preserving its intent, or if such is not possible, by
substituting there for another provision which is legal and enforceable and
achieves the same objectives. Notwithstanding the foregoing, if the remainder of
this Agreement will not be affected by such declaration or finding and is
capable of substantial performance, then each provision not so affected will be
enforced to the extent permitted by law.
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12. Waiver. No delay or omission by either party to this Agreement to exercise
any right or power under this Agreement will impair such right or power or be
construed as a waiver thereof. A waiver by either of the parties to this
Agreement of any of the covenants to be performed by the other or any breach
thereof will not be construed to be a waiver of any succeeding breach thereof or
of any other covenant contained in this Agreement. All remedies provided for in
this Agreement will be cumulative and in addition to and not in lieu of any
other remedies available to either party at law, in equity, or otherwise.
13. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas without giving effect to any
principle of conflict-of-laws which would require the application of the law of
any other jurisdiction. All parties hereto hereby irrevocably submit to the
nonexclusive jurisdiction of the state and federal courts of the State of Texas
and agree and consent that service of process may be made upon it in any
proceeding arising out of this Agreement by service of process as provided by
Texas law. All parties hereto agree that the venue for any and all suits,
actions or proceedings arising out of or relating to this Agreement shall be
brought solely in a Court of competent jurisdiction sitting in Dallas, Dallas
County, Texas.
All parties hereto hereby irrevocably waive, to the fullest extent permitted by
law, any objection which such party may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in the District Court of Dallas County, State of Texas, or in
the United States District Court for the Northern District of Texas, and hereby
further irrevocably waive any claims that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
14. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee: Xxxxx Xxxxxxxx XX Xxx 000000 Xxxxxx, Xxxxx 00000
If to Employer: EssxSport Corp. Attention: Board Of Directors XX Xxx 000000
Xxxxxx, Xxxxx 00000 or to such other address as either party may have furnished
to the other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
15. Attorneys' Fees. If any arbitration or civil action, whether at law or in
equity, is necessary to enforce or interpret any of the terms of this Agreement,
the prevailing party will be entitled to reasonable attorneys' fees, court
costs, and other reasonable expenses of litigation, in addition to any other
relief to which such party may be entitled.
16. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
17. Entire Agreement. This Agreement and the Severance Agreement constitute the
entire agreement between the parties to this Agreement with respect to the
subject matter of this Agreement and there are no understandings or agreements
relative to this Agreement which are not fully expressed in this Agreement
(other than the Severance Agreement). All prior agreements between the parties
with respect to the subject matter of this Agreement whether oral or written,
are expressly superseded by this Agreement. No change, waiver, or discharge of
this Agreement will be valid unless in writing and signed by the party against
which such change, waiver, or discharge is to be enforced. In addition, the
parties hereto expressly acknowledge and agree that no other agreement nor any
breach of or default under any other agreement (other than the Severance
Agreement) shall have any effect on the rights and obligations of the parties
hereto, including, without limitation, under any employment or other agreement
between Employee and EssxSport Corp.
IN WITNESS WHEREOF, the parties of this Agreement have executed and delivered
this Agreement on the date first above written.
EMPLOYER: EssxSport Corp.
Secretary /s/ Xxxxxxx Xxxxxx
EMPLOYEE: /s/ Xxxxx Xxxxxxxx
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