EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 18th day
of June 1999 (the "Agreement") by and between Total Sports Inc. ("Employer" or
the "Company") and Xxxxx Xxxxxxxxx ("Executive").
RECITALS
WHEREAS, Both the Company and Executive desire to continue their
employment relationship and are willing to do so upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants of the parties set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
IT IS HEREBY AGREED AS FOLLOWS:
AGREEMENT
1. Employment. Subject to and upon the terms and conditions
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herein provided, the Employer hereby agrees to employ the Executive and the
Executive hereby agrees to be employed by the Employer for the term of this
Agreement, which term shall begin as of the Agreement Date and shall continue
until terminated as provided herein.
2. Executive Responsibilities. In the performance of Executive's
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responsibilities, Executive shall be subject to all of Employer's policies,
rules and regulations applicable to Company Executives of comparable status.
Executive shall perform duties consistent with Executive's knowledge, experience
and position with the Company. In performing such duties, Executive shall be
subject to and shall abide by all policies and procedures developed by Employer
for comparable Executives of the Company.
During the Term, Executive shall devote his entire business time,
energies, skills and attention to the affairs and activities of Employer and the
discharge of his duties and responsibilities.
3. Compensation.
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3.1 Base Salary. In consideration for the services provided
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hereunder, Employer shall pay to Executive an annual base salary of $110,000
(the "Base Salary"). The Base Salary shall be payable in conformity with
Employer's customary payroll practices. Such Base Salary shall be subject to
periodic review and adjustment in the sole discretion of the Company's Board of
Directors (the "Board").
3.2 Bonus. During the Term of this Agreement, Executive shall
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be eligible to receive certain incentive payments ("Bonus Compensation") based
upon the achievement by the Company of certain established performance
milestones. Such milestones and the amounts of
any resulting Bonus Compensation payable to Executive shall be determined by the
Board in its sole discretion.
3.3 Additional Compensation. In addition to Base Salary and
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any Bonus Compensation, Executive shall be eligible for the following additional
compensation.
a. Executive, at Employer's expense, shall be eligible to
participate in all Executive benefit plans as may be provided by
Employer from time to time to its Executives on the same basis as other
Executives of the Company are eligible, subject to and to the extent
that Executive is eligible under such benefit plans in accordance with
their respective terms.
b. Executive shall be eligible to participate in any stock
option, purchase or other equity compensation plans of the Company on
the same basis as other Executives of the Company are eligible. Grants
of stock options under Employer's existing stock option programs are
discretionary.
c. Executive shall be eligible to participate in any annual
or long-term cash bonus plan that is offered to other Executives of the
Company on the same basis as such other Executives are eligible.
d. Executive shall be entitled to reasonable periods of paid
vacation, personal and sick leave during the Term in accordance with
Employer's policies regarding vacation and leaves for executive
Executives of the Company.
e. During the Term, Employer shall provide the Executive
with health insurance, in scope and coverage equivalent to that
provided to other Executives of the Company.
4. Term. The term of this Agreement shall commence and this
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Agreement (the "Term") shall be effective as of the date hereof (the "Effective
Time")) and shall continue for a term of [three (3) years], unless sooner
terminated as provided herein. Subject to the terms hereof, this Agreement and
Executive's employment hereunder may be terminated by either party prior to the
expiration of the Term, for any reason and with or without prior notice. In
addition, this Agreement shall terminate immediately upon the Executive's death
and may be terminated upon a determination that Executive has become permanently
disabled, as defined in Section 5.4 hereof.
5. Termination.
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5.1 For Cause By Employer. During the Term, Employer may
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terminate Executive's employment under this Agreement at any time for "Cause."
For purposes of this Agreement, "Cause" means:
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a. Executive's conviction of any crime (whether or not
involving Employer) that constitutes a felony in the jurisdiction
involved (other than unintentional motor vehicle felonies);
b. any act of theft, fraud or embezzlement, or any other
willful misconduct or dishonest behavior by Executive in connection
with Executive's work with Employer;
c. Executive's continuing failure or refusal to perform
Executive's reasonably assigned duties (consistent with past practice
of the Company) under this Agreement in accordance with Section 2
(other than due to his incapacity due to illness or injury), provided
that such failure or refusal continues uncorrected for a period of
thirty (30) days after Executive shall have received written notice
stating the nature of such failure or refusal; or
d. Executive's violation of any of Executive's material
obligations contained in this Agreement or that certain Nondisclosure
and Developments Agreement previously executed by Executive.
5.2 Without Cause by Employer. During or after the Term,
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Employer may terminate Executive's employment under this Agreement at any time
and for any reason without Cause. If Employer terminates Executive's employment
pursuant to the provisions of this Section 5.2 during the Term, Executive shall,
in addition to all accrued but unpaid Base Salary and Bonus Compensation through
the date of termination, continue to receive the Base Salary being paid to him
immediately prior to such termination and the benefits provided for in Sections
3.3(a) (except pension, profit-sharing, disability and 401(k) plans) and 3.3(e)
(collectively, the "Severance Payment") for the remainder of the Term (the
"Severance Period"). Executive shall also receive payment for all accrued but
unused vacation pay as of the date of termination. Notwithstanding the
foregoing, if Executive secures employment with another employer during the
Severance Period, then the benefits portion of the Severance Payment shall be
reduced by the amount of other benefits payable to Executive pursuant to such
new employment. In the event of any such termination, Executive shall be
entitled to the applicable Severance Payment set forth above and no further
severance or other compensation benefits. For purposes of this Agreement,
termination "without cause" shall mean the voluntary termination by Executive of
Executive's employment with the Company in the event of (a) a diminution in the
responsibilities of Executive or (b) a reduction in Base Salary of Executive.
5.3 By Executive. During the Term, Executive may voluntarily
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terminate Executive's employment by giving Employer written notice no less than
two (2) weeks in advance of the effective date of such termination. Except as
set forth above in Section 5.2, if Executive voluntarily terminates Executive's
employment pursuant to the provisions of this Section 5.3 or dies, Executive (or
his estate) shall not be entitled to receive any compensation or benefits for
the period following the date of such termination or death other than the
proceeds of, or payment of any benefits under, any pension plans or other
similar plans in effect on the date thereof. In the event of any such
termination, Executive (or Executive's estate) shall be entitled to accrued and
unpaid salary and vacation through the termination date and no further severance
or other compensation benefits.
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5.4 Termination for Disability. During the Term, Executive's
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employment may be terminated by either party in the event Executive suffers a
physical or mental disability (as defined below) which in the reasonable opinion
of Employer renders him substantially unable to perform his duties under this
Agreement. Executive shall be deemed to be permanently disabled in the event
that Executive has been unable, for a period of ninety (90) consecutive days or
one hundred eighty (180) nonconsecutive days during any 360-day period, to
perform the services contemplated hereby as a result of incapacity caused by a
physical or mental illness or injury. If Executive is terminated under this
Section 5.4, Executive shall be entitled to such benefits as are generally
available under Employer's disability insurance policies, if any.
6. Possession. Executive agrees that upon termination of this
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Agreement, or upon request by Employer, Executive shall turn over to Employer
all documents, files, office supplies and any other material or work product in
Executive's possession or control which were created pursuant to or derived from
Executive's services to Employer.
7. Noncompetition.
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7.1 Noncompetition Provisions. Executive recognizes and agrees
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that Employer has many substantial, legitimate business interests that can be
protected only by Executive agreeing not to compete with Employer or its
subsidiaries under certain circumstances. These interests include, without
limitation, Employer's contacts and relationships with its customers, Employer's
reputation and goodwill in the industry, the financial and other support
afforded by Employer, and Employer's rights in its confidential information.
Executive therefore agrees that during his employment with the Company and for
the greater of (i) the one (1) year period of time following the termination of
such employment, regardless of the manner or cause of such termination or (ii)
the period during which Executive is receiving severance payments pursuant to
this Agreement, Executive will not, without the prior written consent of
Employer, engage in any of the following activities within the countries of
North America (the "Protected Zones"), relating to the Protected Businesses (as
defined below):
a. engage in, manage, operate, control or supervise, or
participate in the management, operation, control or supervision of,
any business or entity which provides products or services competitive
with those being developed, manufactured, marketed, sold or otherwise
provided by Employer or its subsidiaries as of the date hereof,
including but not limited to, any business or entity providing sports
related content, information or programming over the Internet (the
"Protected Businesses") in the Protected Zones;
b. have any ownership or financial interest, directly or
indirectly, in any entity in the Protected Zones engaged in the
Protected Businesses, including, without limitation, as an individual,
partner, shareholder (other than as a shareholder of a publicly-owned
corporation in which Executive owns less than 1% of the outstanding
shares of such corporation), officer, directly, Executive, principal,
agent or consultant;
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c. solicit, acquire or conduct any Protected Business from or
with any customers of Employer or its subsidiaries (as defined below)
in the Protected Zones;
d. solicit any of the Executives or independent contractors of
Employer or its subsidiaries or induce any such persons to terminate
their employment or contractual relationships with any such entities or
take action contrary to the best interest of the Company; or
e. serve as an officer or director of, or hold an equity
interest in, any entity engaged in any of the Protected Businesses in
the Protected Zones.
For purposes of this Section 7, customers of Employer or its subsidiaries shall
include those customers to whom Employer or its subsidiaries was providing
products or services at the termination of Executive's employment, or had
proposals outstanding for the provision of services, at the time of such
termination.
7.2 Separate Covenants. The parties understand and agree that
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the noncompetition agreement set forth in this Section 7 shall be construed as a
series of separate covenants not to compete: one covenant for each country,
state and province within the Protected Zone, one for each separate line of
business of Employer, and one for each month of the noncompetition period. If
any restriction set forth in this Section 7 is held by a court of competent
jurisdiction to be unenforceable with respect to one or more geographic areas,
lines of business and/or months of duration, then Executive agrees, and hereby
submits, to the reduction and limitation of such restriction to the minimal
effect necessary so that the provisions of this Section 7 shall be enforceable.
7.3 Limitation. Nothing contained in this Agreement attached
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shall prohibit Executive from utilizing Executive's skill, acumen or experience
after a termination of employment with Employer in any business not in violation
of this Section 7 at any location not in violation of this Section 7.
8. Saving Provision. Employer and Executive agree and stipulate
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that the agreements set out in Section 7 above are fair and reasonably necessary
for the protection of the business, goodwill, confidential information, and
other protectable interests of Employer in light of all of the facts and
circumstances of the relationship between Executive and Employer. In the event a
court of competent jurisdiction should decline to enforce those provisions, they
shall be deemed to be modified to restrict Executive to the maximum extent which
the court shall find enforceable; however, in no event shall the above
provisions be deemed to be more restrictive to Executive than those contained
herein.
9. Injunctive Relief. Executive acknowledges that the breach or
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threatened breach of any of the nondisclosure or noncompetition covenants
contained herein would give rise to irreparable injury to Employer which injury
would be inadequately compensable in money damages. Accordingly, Employer may
seek and obtain a restraining order and/or injunction prohibiting the breach or
threatened breach of any provision, requirement or covenant of this Agreement,
in addition to and not in limitation of any other legal remedies which may be
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available. Executive further acknowledges and agrees that the agreements set out
above are necessary for the protection of Employer's legitimate goodwill and
business interests and are reasonable in scope and content.
10. Enforcement. The provisions of this Agreement shall be enforceable
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notwithstanding the existence of any claim or cause of action against Employer
by Executive or against Executive by Employer, whether predicated on this
Agreement or otherwise.
11. Governing Law. This Agreement, the employment relationship
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contemplated herein and any claim arising from such relationship, whether or not
arising under this Agreement, shall be governed by and construed in accordance
with the internal laws of the State of North Carolina, without regard to
conflict of law principles.
12. Waiver of Breach. The waiver of any breach of any provision of
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this Agreement or failure to enforce any provision hereof shall not operate or
be construed as a waiver of any subsequent breach by any party.
13. Modification. This Agreement may be modified, and the rights,
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remedies and obligations contained in any provision hereof may be waived, only
in accordance with this Section. No waiver by either party or any breach by the
other or any provision hereof shall be deemed to be a waiver of any later or
other breach thereof or as a waiver of any other provision of this Agreement.
This Agreement may not be waived, changed, discharged or terminated orally or by
any course of dealing between the parties, but only by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought. No modification or waiver by Employer shall be effective without the
consent of at least a majority of the members of the Board of Directors of
Employer then in office at the time of such modification or waiver.
14. Entirety. This Agreement, including any exhibits hereto, as it may
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be amended pursuant to the terms hereof, represents the complete and final
agreement of the parties and shall control over any other statement,
representation or agreement by Employer (e.g., as may appear in employment or
policy manuals).
16. Survival. The provisions of this Agreement relating to post-
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termination compensation (including, without limitation, the Severance Payment
and related rights), confidentiality and noncompetition shall survive the
expiration or termination of this Agreement.
17. Severability. Without in any way limiting the provisions of
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Section 7.2, in case any one or more of the provisions contained in this
Agreement for any reason shall be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed and
reformed to the maximum extent permitted by law.
18. Binding Effect; Successors. This Agreement shall inure to the
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benefit of Executive and Executive's heirs, successors, personal representatives
and assigns. Executive acknowledges that the services to be rendered by
Executive thereunder are unique and personal
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in nature. Accordingly, Executive may not assign any of Executive's rights or
delegate any of Executive's duties or obligations under this Agreement. The
Company shall have the right to assign or transfer this Agreement to any
successor of all of its business or assets, provided, however, that the Company
shall require any such successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "Company" and "Employer" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law or otherwise.
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement effective as of the day and year first set forth above.
EMPLOYER:
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TOTAL SPORTS INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
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Title: President
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EXECUTIVE:
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/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
