EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT is made and entered into as of this 17th day of September,
2010, by and between The Empire Sports & Entertainment, Co., a Nevada
corporation with offices at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx
00000 (the “Corporation”), and
Xxxxx Xxxx, an individual residing at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 (the “Executive”), under
the following circumstances:
RECITALS:
A. The
Corporation desires to secure the services of the Executive upon the terms and
conditions hereinafter set forth; and
B. The
Executive desires to render services to the Corporation upon the terms and
conditions hereinafter set forth.
NOW,
THEREFORE, the parties mutually agree as follows:
1. Employment. The
Corporation hereby employs the Executive and the Executive hereby accepts
employment as an executive of the Corporation, subject to the terms and
conditions set forth in this Agreement.
2. Duties. The Executive
shall serve as the Executive Vice President of the Corporation, or a position
similar in function and responsibility, with such duties, responsibilities and
authority as are commensurate and consistent with his position, as may be, from
time to time, assigned to him by the Board of Directors of the Corporation. The
Executive shall report directly to the Board of Directors of the Corporation.
During the term of this Agreement, the Executive shall devote his full business
time and efforts to the performance of his duties hereunder unless otherwise
authorized by the Board of Directors. Notwithstanding the foregoing, the
expenditure of reasonable amounts of time by the Executive for the making of
passive personal investments, the conduct of private business affairs and
charitable and professional activities shall be allowed, provided such
activities do not materially interfere with the services required to be rendered
to the Corporation hereunder and do not violate the restrictive covenants set
forth in Section
10 below.
3. Term of Employment.
The term of the Executive’s employment hereunder, unless sooner terminated as
provided herein (the “Initial Term”), shall
be for a period of one (1) year commencing on the date the CD is received by the
escrow agent pursuant to Section 4(f) below (the “Effective Date”). The
term of this Agreement shall automatically be extended for additional terms of
one (1) year each (each a “Renewal Term”),
unless either party gives prior written notice of non-renewal to the other party
no later than sixty (60) days prior to the expiration of the Initial Term
(“Non-Renewal
Notice”), or the then current Renewal Term, as the case may be. For
purposes of this Agreement, the Initial Term and any Renewal Term are
hereinafter collectively referred to as the “Term.”
4. Compensation of
Executive.
(a) During
the Term, the Corporation shall pay the Executive as compensation for his
services hereunder, in accordance with the Corporation’s standard payroll
practices, the sum of $150,000 per annum (the “Base Salary”), less
such deductions as shall be required to be withheld by applicable law and
regulations. The Corporation shall review the Base Salary on an annual basis and
shall make adjustments in its sole discretion.
(b) In
addition to the Base Salary set forth in Section 4(a) above, the Executive shall
be entitled to such bonus compensation (in cash, capital stock or other
property) as a majority of the members of the Board of Directors of the
Corporation may determine from time to time in their sole
discretion.
(c) The
Corporation shall pay or reimburse the Executive for all reasonable
out-of-pocket expenses actually incurred or paid by the Executive in the course
of his employment, upon submission of itemized expense statements, consistent
with the Corporation’s policy for reimbursement of expenses from time to
time. Reimbursable expenses shall include itemized bills for required
computer software, and tolls and parking in connection with his commute to work
in New York City. If the Corporation provides its president and chief executive
officer access to a company credit card, then the Executive shall have the same
access.
(d) Beginning
on or before March 1, 2011, as part of Executive’s compensation, the Corporation
shall provide the Executive with group health and dental insurance coverage for
him and his family. The Executive shall also be entitled to
participate in such pension, profit sharing and all other benefits and plans as
the Corporation provides to its senior executives. All benefits
described in this Section 4(d) shall be referred to collectively herein as the
“Benefit
Plans”.
(e) Executive
is hereby granted options to purchase 250,000 shares of the Corporation’s common
stock, at a per share exercise price of $0.60 (the “Options”). The
Options shall vest and become exercisable in equal installments on the first
three (3) anniversaries of the Effective Date. Executive shall be
eligible for such additional grants of stock options or awards of restricted
stock under the Corporation’s equity compensation plans as the Board of
Directors shall determine in its sole discretion.
(f) The
Corporation shall obtain a three-month certificate of deposit valued at $60,000
(the “CD”), to
be used as security for the Corporation’s payment obligation to the Executive
under Section 6(e) below, in accordance with the terms in this Agreement. Upon
expiration of the CD, the Corporation shall continue to obtain new three-month
CDs (or have the previous CD rollover) until the earlier of (A) one year from
the Effective Date and (B) the payment of the obligation to the Executive (such
earlier date, the “CD
Obligation Date”). The Corporation shall be entitled to (i)
any and all interest earned on the CD and (ii) return of the CD following the CD
Obligation Date. The CD shall be held in escrow by Xxx Xxxxxxx, Esq., 000 X.
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, as escrow agent. In the
event the Corporation is obligated to make the payment set forth in Section
6(e)(ii), then the Corporation shall promptly either pay the Executive $60,000
in cash or take the necessary actions to allow for the Executive to receive the
funds underlying the CD.
5. Termination.
(a) This
Agreement and the Executive’s employment hereunder shall automatically terminate
upon the happening of any of the following events:
(i) upon
the Executive’s death;
(ii) upon
the Executive’s “Total Disability” (as herein defined);
(iii) upon
the expiration of the Initial Term of this Agreement or any Renewal Term
thereof, if either party has provided a timely notice of non-renewal in
accordance with Section 3, above;
(iv) at
the Executive’s option, in the event of an act by the Corporation, defined in
Section 5(c), below, as constituting “Good Reason” for termination by the
Executive; and
(v) at
the Corporation’s option, in the event of an act by the Executive, defined in
Section 5(d), below, as constituting “Cause” for termination by the
Corporation.
(b) For
purposes of this Agreement, the Executive shall be deemed to be suffering from a
“Total
Disability” if the Executive has failed to perform his regular and
customary duties to the Corporation for a period of 120 days out of any 360-day
period and if before the Executive has become “Rehabilitated” (as herein
defined) a majority of the members of the Board of Directors of the Corporation,
exclusive of the Executive, vote to determine that the Executive is mentally or
physically incapable or unable to continue to perform such regular and customary
duties of employment. As used herein, the term “Rehabilitated” shall
mean such time as the Executive is willing, able and commences to devote his
time and energies to the affairs of the Corporation to the extent and in the
manner that he did so prior to his Disability.
(c) For
purposes of this Agreement, the term “Good Reason” shall
mean that the Executive has resigned due to (i) any diminution of duties
inconsistent with Executive’s title, authority, duties and responsibilities;
(ii) any reduction of or failure to pay Executive compensation provided for
herein, except to the extent Executive consents in writing to any reduction,
deferral or waiver of compensation, which non-payment continues for a period of
fifteen (15) days following written notice to the Corporation by Executive of
such non-payment; (iii) any relocation of the principal location of Executive’s
employment more than 50 miles from the Corporation’s current headquarters
without Executive’s prior written consent; (iv) any material change in the
Executive’s title, job description or duties; (v) any material violation by the
Corporation of its obligations under this Agreement that is not cured within
thirty (30) days after receipt of notice thereof; (vi) a request by an executive
of the Corporation to take an action that would subject Executive to be
terminated for Cause; or (vii) if a crime is committed by an executive or agent
of the Corporation.
(d) For
purposes of this Agreement, the term “Cause” shall mean
material, gross and willful misconduct on the part of the Executive in
connection with his employment duties hereunder or commission of a felony or act
of dishonesty resulting in material harm to the Corporation by the
Executive.
6. Effects of
Termination.
(a) Upon
termination of the Executive’s employment pursuant to Section 5(a)(i) [death],
the Executive’s estate or beneficiaries shall be entitled to the following
severance benefits: (i) continued provision for a period of six (6) months
following the Executive’s death of benefits under Benefit Plans extended from
time to time by the Corporation to its senior executives; and (ii) payment on a
prorated basis of any bonus or other payments earned in connection with the
Corporation’s then-existing bonus plan in place at the time of
termination.
(b) Upon
termination of the Executive’s employment pursuant to Section 5(a)(ii)
[disability], the Executive shall be entitled to the following severance
benefits: (i) continued provision for a period of one (1) year following the
Executive’s Total Disability of Benefit Plans extended from time to time by the
Corporation to its senior executives; and (ii) payment on a prorated basis of
any bonus or other payments earned in connection with the Corporation’s
then-existing bonus plan in place at the time of termination. The Corporation
may credit against such amounts any proceeds paid to Executive with respect to
any disability policy maintained for his benefit.
(c) Upon
termination of the Executive’s employment pursuant to Section 5(a)(iii)
[non-renewal], where the Corporation has offered to renew the term of the
Executive’s employment for an additional one (1) year period and the Executive
chooses not to continue in the employ of the Corporation, the Executive shall be
entitled to receive: (i) accrued but unpaid compensation through the date of
termination; and (ii) payment on a prorated basis of any bonus or other payments
earned in connection with the Corporation’s then-existing bonus plan in place at
the time of termination. In the event the Corporation tenders Non-Renewal Notice
to the Executive, then the Executive shall be entitled to the same severance
benefits as if the Executive’s employment were terminated pursuant to Section
5(a)(iv) [good reason]; provided, however, if such
Non-Renewal Notice was triggered due to the Corporation’s statement that the
Executive’s employment was terminated due to Section 5(a)(v) [cause], then
payment of severance benefits will be contingent upon a determination as to
whether termination was properly for “Cause.”
(d) Upon
termination of the Executive’s employment pursuant to Section 5(a)(v) [cause],
the Executive shall be entitled to receive accrued but unpaid compensation
through the date of termination.
(e) Upon
termination of the Executive’s employment (A) pursuant to Section 5(a)(iv) [good
reason], or (B) by the Corporation without Cause, the Executive shall be
entitled to the following severance benefits: (i) the accrued but unpaid
compensation through the date of termination; (ii) if termination occurs within
the first year of employment, the amount represented by the CD (which amount is
in exchange for Executive’s continued compliance with the covenants and
restrictions hereunder after termination); (iii) the bonus the Executive would
have earned pursuant to this Agreement, to be paid upon the date of termination
of employment in monthly installments, less withholding of all applicable taxes;
and (iv) continued provision for a period of one (1) year after the date of
termination of the benefits under Benefit Plans extended from time to time by
the Corporation to its senior executives.
7. Accelerated
Vesting.
(a) Upon
termination of the Executive’s employment pursuant to Sections 5(a)(i) [death]
or (ii) [disability], all unvested Options shall immediately expire effective
the date of termination of employment and all vested Options, to the extent
unexercised, shall expire twelve (12) months after the termination of
employment.
(b) If
the Executive’s employment is terminated pursuant to Section 5(a)(iii)
[non-renewal], where the Corporation has offered to renew the term of the
Executive’s employment for an additional one (1) year period and the Executive
chooses not to continue in the employ of the Corporation, all unvested Options
shall immediately expire effective the date of termination of employment and
vested Options, to the extent unexercised, shall expire three (3) months after
the termination of employment.
(c) If
the Executive’s employment is terminated (A) by the Corporation without Cause,
(B) the Corporation tendered the Executive a Non-Renewal Notice for any reason
other than for Cause or (C) pursuant to Section 5(a)(iv) [good reason], all
unvested Options shall immediately vest and become exercisable effective the
date of termination of employment, and, to the extent unexercised, shall expire
twelve (12) months after any such event.
(d) If
the Executive’s employment is terminated pursuant to 5(a)(v) [cause], all
Options, whether or not vested, shall immediately expire effective the date of
termination of employment.
(e) The
Corporation shall cause all future agreements, certificates or other documents
evidencing any grant of options or award of stock to the Executive to contain
the foregoing provisions and shall agree to amend all existing agreements,
certificates or other documents evidencing any grant of options or award of
stock to the Executive to contain the foregoing provisions.
8. Vacations. The
Executive shall be entitled to the same number of vacation days and holidays,
during which period his salary shall be paid in full, as the Corporation’s chief
executive officer and chairman receive. The Executive shall take his vacation at
such time or times as the Executive and the Corporation shall determine is
mutually convenient. Any vacation not taken in one (1) year shall not accrue,
provided that if vacation is not taken due to the Corporation’s business
necessities, up to two (2) weeks’ vacation may carry over to the subsequent
year.
9. Disclosure of Confidential
Information. The Executive recognizes, acknowledges and agrees that he
has had and will continue to have access to secret and confidential information
regarding the Corporation, including but not limited to, its products, formulae,
patents, sources of supply, customer dealings, data, know-how and business
plans, provided such information is not in or does not hereafter become part of
the public domain, or become known to others through no fault of the Executive.
The Executive acknowledges that such information is of great value to the
Corporation, is the sole property of the Corporation, and has been and will be
acquired by him in confidence. In consideration of the obligations undertaken by
the Corporation herein, the Executive will not, at any time, during or after his
employment hereunder, reveal, divulge or make known to any person, any
information acquired by the Executive during the course of his employment, which
is treated as confidential by the Corporation, and not otherwise in the public
domain. The provisions of this Section 9 shall survive the termination of the
Executive’s employment hereunder. All references to the Corporation in Section 9
and Section 10 hereof shall include any subsidiary or parent of the
Corporation.
10. Covenant Not To Compete or
Solicit.
(a) The
Executive recognizes that the services to be performed by him hereunder are
special, unique and extraordinary. The parties confirm that it is reasonably
necessary for the protection of the Corporation that the Executive agree, and
accordingly, the Executive does hereby agree, that he shall not, directly or
indirectly, at any time during the “Restricted Period” within the “Restricted
Area” (as those terms are defined in Section 10(e) below):
(i) except
as provided in Subsection (c) below, engage in any line of business in which the
Corporation was engaged or had a formal plan to enter during the period of
Executive’s employment with the Corporation, including but not limited to the
business of coordinating music festivals and sporting events promotions, either
on his own behalf or as an officer, director, stockholder, partner, consultant,
associate, employee, owner, agent, creditor, independent contractor, or
co-venturer of any third party; or
(ii) solicit
to employ or engage, for or on behalf of himself or any third party, any
employee, vendor, or agent of the Corporation.
(b) The
Executive hereby agrees that he will not, directly or indirectly, for or on
behalf of himself or any third party, at any time during the Term and during the
Restricted Period, solicit any customers of the Corporation with respect to
products or services competitive with products or services then being sold by
the Corporation.
(c) If
any of the restrictions contained in this Section 10 shall be deemed to be
unenforceable by reason of the extent, duration or geographical scope thereof,
or otherwise, then the court making such determination shall have the right to
reduce such extent, duration, geographical scope, or other provisions hereof,
and in its reduced form this Section shall then be enforceable in the manner
contemplated hereby.
(d) This
Section 10 shall not be construed to prevent the Executive from owning, directly
or indirectly, in the aggregate, an amount not exceeding five percent (5%) of
the issued and outstanding voting securities of any class of any corporation
whose voting capital stock is traded or listed on a national securities exchange
or in the over-the-counter market.
(e) The
term “Restricted
Period,” as used in this Section 10, shall mean the period of the
Executive’s actual employment hereunder, plus twelve (12) months after the date
the Executive is actually no longer employed by the Corporation. The term “Restricted Area” as
used in this Section 10 shall mean the continental United States, including,
without limitation, any and all cities other geographic areas in which the
Corporation offers its services or has taken steps to commence operations or
does provides services in such city or area.
(f) The
provisions of this Section 10 shall survive the termination of the Executive’s
employment hereunder and until the end of the Restricted Period as provided in
Section 10(e) hereof, except in the event that this Agreement is terminated
pursuant to Section 5(a)(iv) [good reason], in which case such provisions shall
not survive termination of this Agreement. In no event shall the terms of
Section 10 be enforceable, should the Corporation be in material default of its
obligations to the Executive at the time of his termination of employment by the
Corporation.
11. Miscellaneous.
(a) The
Executive acknowledges that the services to be rendered by him under the
provisions of this Agreement are of a special, unique and extraordinary
character and that it would be difficult or impossible to replace such services.
Accordingly, the Executive agrees that any breach or threatened breach by him of
Sections 9 or 10 of this Agreement shall entitle the Corporation, in addition to
all other legal remedies available to it, to apply to any court of competent
jurisdiction to seek to enjoin such breach or threatened breach. The parties
understand and intend that each restriction agreed to by the Executive
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which the
Corporation seeks enforcement thereof, such restriction shall be limited to the
extent permitted by law. The remedy of injunctive relief herein set forth shall
be in addition to, and not in lieu of, any other rights or remedies that the
Corporation may have at law or in equity.
(b) Neither
the Executive nor the Corporation may assign or delegate any of their rights or
duties under this Agreement without the express written consent of the other;
provided however that the Corporation shall have the right to delegate its
obligation of payment of all sums due to the Executive hereunder, provided that
such delegation shall not relieve the Corporation of any of its obligations
hereunder.
(c) This
Agreement constitutes and embodies the full and complete understanding and
agreement of the parties with respect to the Executive’s employment by the
Corporation, supersedes all prior understandings and agreements, whether oral or
written, between the Executive and the Corporation, and shall not be amended,
modified or changed except by an instrument in writing executed by the party to
be charged. The invalidity or partial invalidity of one or more provisions of
this Agreement shall not invalidate any other provision of this Agreement. No
waiver by either party of any provision or condition to be performed shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or any prior or subsequent time.
(d) This
Agreement shall inure to the benefit of, be binding upon and enforceable
against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
(e) The
headings contained in this Agreement are for convenience of reference only and
shall not affect in any way the meaning or interpretation of this
Agreement.
(f) All
notices, requests, demands and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
when personally delivered, sent by registered or certified mail, return receipt
requested, postage prepaid, or by private overnight mail service (e.g. Federal
Express) to the party at the address set forth above or to such other address as
either party may hereafter give notice of in accordance with the provisions
hereof. Notices shall be deemed given on the sooner of the date actually
received or the third business day after sending.
(g) This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without reference to principles of conflicts of
laws and each of the parties hereto irrevocably consents to the jurisdiction and
venue of the federal and state courts located in the State of New York, City of
New York.
(h) This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one of the same instrument. The parties hereto have executed this Agreement as
of the date set forth above.
CORPORATION:
THE
EMPIRE SPORTS & ENTERTAINMENT, CO.
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By:
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/s/ Xxxxxxx
Xxxxxx
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Title:
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Chief Executive Officer
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EXECUTIVE: Xxxxx
Xxxx
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/s/ Xxxxx
Xxxx
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Signature
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