AMENDED & RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.21
AMENDED
& RESTATED EMPLOYMENT AGREEMENT
This Amended & Restated Employment
Agreement (this “Agreement”) is made and entered
into effective as of November 1, 2018 (the “Effective
Date”), by and between Super League Gaming, Inc., a Delaware
corporation (“COMPANY”), and Xxx Xxxx, an individual
(“EXECUTIVE”). This Agreement shall amend and supersede
that certain prior Employment Agreement dated June 16,
2017.
WITNESSETH:
WHEREAS, COMPANY
and EXECUTIVE deem it to be in their respective best interests to
enter into an agreement providing for COMPANY’s employment of
EXECUTIVE pursuant to the terms herein stated.
NOW,
THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, it is hereby agreed as
follows:
1.
Term. COMPANY hereby amends and extends EXECUTIVE’s
employment term with the COMPANY to conclude on December 31, 2021
(“Term”). Unless COMPANY or EXECUTIVE provides written
notice that this Agreement shall be allowed to expire and the
employment relationship thereby terminated at least thirty (30)
days prior to the expiration of the Term or any Renewal Term (as
defined herein), this Agreement shall continue in effect for
successive periods of one (1) year (each such one (1) year period
being a “Renewal Term”; collectively, the Term and all
Renewal Terms under this Agreement being the “Employment
Term”).
2.
Duties and Titles. EXECUTIVE’s position with COMPANY shall be
Chief Executive Officer, President and Chairman. EXECUTIVE shall do
and perform all services reasonably necessary or advisable to
accomplish the objectives of the COMPANY’s Board of
Directors. EXECUTIVE shall report to the Board. EXECUTIVE reserves
the right to resign for Good Reason (as defined
below).
3.
Devotion of Time to Company’s Business. EXECUTIVE shall be a
full-time EXECUTIVE of COMPANY and shall devote such substantial
and sufficient amounts of her productive time, ability, and
attention to the business of COMPANY during the Employment Term of
this Agreement as may be reasonable and necessary to accomplish the
objectives and complete the tasks assigned to EXECUTIVE. EXECUTIVE
may devote reasonable time to activities other than those required
under this Agreement, including activities involving professional,
charitable, community, educational, religious and similar types of
organizations, speaking engagements, membership on the boards of
directors of other organizations and similar types of activities to
the extent that such activities do not inhibit or prohibit the
performance of services under this Agreement.
4.
Uniqueness of Services. EXECUTIVE hereby acknowledges that the
services to be performed by her under the terms of this Agreement
are of a special and unique value. Accordingly, the obligations of
EXECUTIVE under this Agreement are non-assignable.
5. Compensation
of EXECUTIVE.
a. Base
Annual Salary. Subject to other specific provisions in this
Agreement, as compensation for services hereunder, EXECUTIVE shall
receive a Base Annual Salary of $400,000 payable in accordance with
the Company’s ordinary payroll practices. On each anniversary
date hereof, EXECUTIVE’s Base Annual Salary will be reviewed
and may be increased at the sole discretion of the COMPANY’S
Board of Directors.
b.
Cash Bonuses. EXECUTIVE shall be entitled to receive (i) a cash
bonus of $100,000 upon the close of a fully subscribed $10,000,000
private placement of 9% Secured Convertible Promissory Notes, (ii)
a cash bonus of $250,000 upon the close of the COMPANY’s
initial public offering (“IPO”) or private financing
(occurring subsequent to September 1, 2018) of not less than
$15,000,000; (iii) $150,000, payable in three increments of $50,000
upon achieving (a) 200,000 registered members, (b) a total of four
(4) large brand sponsors (minimum of $250,000 of annual
sponsorship) from date of commencement of CEO role, and (c) license
of a total of four (4) tier 1 esports game titles from date of
commencement of CEO role, and (d) cash bonuses as may be determined
from time to time by the Company’s Board of Directors and
Compensation Committee.
c.
Common Stock Purchase Warrant. EXECUTIVE is hereby granted a common
stock purchase warrant (“Restricted Grant”), in the
amount of Seven Hundred Fifty Thousand (750,000) shares,
exercisable at $3.60 per share for a period of ten (10) years, and
subject to the following vesting schedule: (i) 25% upon issuance;
(ii) 50% upon close of the COMPANY’s IPO or an additional
private financing (occurring subsequent to September 1, 2018) of
not less than $15,000,000; and (iii) 25% on the one-year
anniversary of the IPO or the one-year anniversary of an additional
private equity financing of not less than $15,000,000 (occurring
subsequent to September 1, 2018).
d.
Stock Option Grant. EXECUTIVE is hereby issued an option to
purchase 500,000 shares of common stock (the “Option
Grant”), exercisable at $3.60 per share for a period of ten
(10) years and subject to the following vesting schedule: (i) 50%
upon close of the COMPANY’s IPO or an additional private
equity financing (occurring subsequent to September 1, 2018) of not
less than $15,000,000; (ii) 25% upon achievement of 300,000
registered members; and (iii) 25% upon achievement of 400,000
registered members. The Option Grant shall be issued pursuant to
the COMPANY’s 2014 Amended and Restated Stock Option and
Incentive Plan.
e.
Vesting Acceleration. All outstanding common stock purchase
warrants previously issued in favor of EXECUTIVE, as well as those
issued in Section 5.c hereinabove, shall immediately vest upon a
“change of control” of the COMPANY. Change of control
is defined as a sale of all or substantially all of the assets of
the COMPANY, or a merger, sale of shares or other transaction
whereby the voting shareholders of the COMPANY, collectively, prior
to the close of such transaction do not hold a majority voting
interest in the COMPANY on a post-transaction basis.
f.
Health Insurance. EXECUTIVE and her dependents shall be entitled to
participate in the health insurance plan offered to COMPANY
employees, and the Company will pay 90% of the premium related
thereto.
g.
401(k). EXECUTIVE will be permitted to participate in the
Company’s 401(k) Plan upon the Board of Directors electing to
institute it.
h.
Business Expenses. COMPANY will reimburse EXECUTIVE for all
reasonable business expenses directly incurred in performing
EXECUTIVE’s duties and promoting the business of
COMPANY.
6.
Termination of Employment.
a. In
the event COMPANY should terminate EXECUTIVE’s employment
other than for “Cause” as defined in Section 6(b) below
or EXECUTIVE resigns for “Good Reason” as defined in
Section 6(c) below (either such termination a “Severance
Termination”), EXECUTIVE shall receive the
following:
x. Xxxxxxxxx
Termination shall result in the following payment on effective date
of termination:
(a) Payment of all
Accrued Obligations (defined in Section 6(d) below);
(b) Cash equal to the
greater of (I) Annual Salary for one and one-half (1.5) years; or
(II) Annual Salary for the remaining Term of the Agreement;
and
(c) Full vesting of all
unvested securities issued in the name of EXECUTIVE.
b.
COMPANY shall have the right to terminate EXECUTIVE’s
employment at any time for Cause by giving EXECUTIVE written notice
of the effective date of termination. For the purposes of this
Agreement, “Cause” shall mean:
i.
Fraud, misappropriation, embezzlement or any other action of
material misconduct against COMPANY or any of its affiliates or
subsidiaries;
ii
.
Substantial willful failure to render services in accordance with
the provisions of this Agreement (for which purpose, no act or
omission to act will be “willful” if conducted in good
faith or with a reasonable belief that such conduct was in the best
interests of COMPANY), provided that:
(a) a
written demand for performance has beendelivered to
EXECUTIVE at least ten (10) days prior to termination identifying
the manner in which COMPANY believes that EXECUTIVE has failed to
perform; and
(b)
EXECUTIVE has
thereafter failed to remedy such failure to
perform;
iii
.
Material violation of any law, rule or regulation of any
governmental or regulatory body material to the business of
COMPANY;
iv
.
Conviction or a guilty plea or nolo contendere plea to a
felony;
v
.
Repeated and persistent material failure to abide by the policies
established by COMPANY after written warning from
COMPANY;
vi
.
Any acts of violence or threats of violence made by EXECUTIVE
against COMPANY or anyone associated with COMPANY’s
business;
vii
.
The solicitation or acceptance of payment or gratuity from any
existing or potential customer or supplier of COMPANY without the
prior written
consent
of COMPANY’s Board of Director’s; or
viii
.
Drug dependency or habitual insobriety.
c. EXECUTIVE
shall have the right to terminate employment at any time with Good
Reason by giving COMPANY written notice of the effective date of
termination. For the purposes of this Agreement, “Good
Reason” shall mean:
i. Any
material adverse change in EXECUTIVE’s title, duties or
responsibilities (including reporting
responsibilities);
ii. Any
reduction of EXECUTIVE’s Base Annual Salary;
iii. Any
relocation, without EXECUTIVE’s written consent, of
EXECUTIVE’s principal office of employment by more than 35
miles from the location applicable on the Effective Date;
or
iv. Any
failure of COMPANY to assign, or a successor of COMPANY to assume,
the obligations of COMPANY under this Agreement.
d.
In the event of termination for Cause by COMPANY or termination
without Good Reason by EXECUTIVE, EXECUTIVE shall be paid
EXECUTIVE’s Base Annual Salary and accrued vacation through
the effective date of termination on the date of termination,
EXECUTIVE’s business expenses incurred through the date of
termination in accordance with Section 3(g), and EXECUTIVE’s
accrued and vested employee benefits pursuant to Section 3(e)
and (f) in accordance with the applicable benefit plan
(collectively, all such amounts under this sentence being the
“Accrued Obligations”). After the effective date of
Termination, EXECUTIVE shall not be entitled to accrue or vest in
any further salary, severance pay, stock options, benefits, fringe
benefits or entitlements; provided that EXECUTIVE shall retain the
right to exercise the portion of the Warrant that has vested as of
the effective date of termination as provided above.
e.
COMPANY may terminate EXECUTIVE’s employment in the event
that: (i) EXECUTIVE fails or is unable to perform EXECUTIVE’s
duties due to injury, illness or other incapacity for one hundred
eighty (180) days in any twelve (12) month period (except that
EXECUTIVE may be entitled to disability payments pursuant to
COMPANY’s disability plan, if any); or (ii) Death of
EXECUTIVE.
7.
Covenant of Confidentiality. All documents, records, files,
manuals, forms, materials, supplies, computer programs, trade
secrets and other information which comes into EXECUTIVE’s
possession from time to time during EXECUTIVE’s employment by
COMPANY and/or any of COMPANY’s subsidiaries or affiliates,
shall be deemed to be confidential and proprietary to COMPANY and
shall remain the sole and exclusive property of COMPANY. EXECUTIVE
acknowledges that all such confidential and proprietary information
is confidential and proprietary and not readily available to
COMPANY’s business competitors. On the effective date of the
termination of the employment relationship or at such other date as
specified by COMPANY, EXECUTIVE agrees that she will return to
COMPANY all such confidential and proprietary items (including, but
not limited to, Company marketing material, business cards, keys,
etc.) in her control or possession, and all copies thereof, and
that she will not remove any such items from the offices of
COMPANY.
8.
Covenant of Non-Disclosure. Without the prior written approval of
COMPANY EXECUTIVE except as required to discharge EXECUTIVE’s
duties under this Agreement, EXECUTIVE shall keep confidential and
not disclose or otherwise make use of any of the confidential or
proprietary information or trade secrets referred to in Section 7
nor reveal the same to any third party whomsoever, except as
required by law.
9.
Covenant of Non-Solicitation. During the Employment Term of this
Agreement and for a period of two (2) years following the effective
date of termination, EXECUTIVE, either on EXECUTIVE’s own
account or for any person, firm, Company or other entity, shall not
solicit, interfere with or induce, or attempt to induce, any
EXECUTIVE of COMPANY, or any of its subsidiaries or affiliates to
leave their employment or to breach their employment agreement, if
any, with COMPANY.
10.
Covenant of Cooperation. EXECUTIVE agrees to cooperate with COMPANY
in any litigation or administrative proceedings involving any
matters with which EXECUTIVE was involved during her employment by
COMPANY. COMPANY shall reimburse EXECUTIVE for reasonable expenses
incurred in providing such assistance.
11.
Covenant Against Competition.
a.
Scope and Term. During the Term of this Agreement and for an
additional period ending one (1) year after the effective date of
termination or expiration of this Agreement, whichever occurs
first, EXECUTIVE shall not directly or indirectly engage in or
become a partner, officer, principal, EXECUTIVE, consultant,
investor, creditor or stockholder of any business, proprietorship,
association, firm, corporation or any other business entity which
is engaged or proposes to engage or hereafter engages in any
business which competes with the business of COMPANY and/or any of
COMPANY's subsidiaries or affiliates in any geographic area in
which COMPANY conducts business at the time of the termination or
expiration of the employment relationship.
12. Rights
to Inventions.
a.
Inventions Defined. “Inventions” means discoveries,
concepts, and ideas, whether patentable or not, relating to any
present or contemplated activity of COMPANY, including without
limitation devices, processes, methods, formulae, techniques, and
any improvements to the foregoing.
b.
Application. This Section 11 shall apply to all Inventions made or
conceived by EXECUTIVE, whether or not during the hours of her
employment or with the use of COMPANY facilities, materials, or
personnel, either solely or jointly with others, during the Term of
her employment by COMPANY and for a period of one (1) year after
any termination of such employment. This Section 12 does not apply
to any invention disclosed in writing to COMPANY by EXECUTIVE prior
to the execution of this Agreement.
c.
Assignment. EXECUTIVE hereby assigns and agrees to assign to
COMPANY all of her rights to Inventions and to all proprietary
rights therein, based thereon or related thereto, including without
limitation applications for United States and foreign letters
patent and resulting letters patent.
d. Reports.
EXECUTIVE shall inform COMPANY promptly and fully of each
Invention by a written report, setting forth in detail the
structures, procedures, and methodology employed, and the results
achieved (“Notice of Invention”). A report shall also
be submitted by EXECUTIVE upon completion of any study or research
project undertaken on COMPANY’s behalf, whether or not in
EXECUTIVE’s opinion a given study or project has resulted in
an Invention.
e.
Patents. At COMPANY’s request and expense, EXECUTIVE
shall
execute such documents and provide such assistance as may be deemed
necessary by COMPANY to apply for, defend or enforce any United
States and foreign letters patent based on or related to such
Inventions.
13.
Remedies. Notwithstanding any other provision in this Agreement to
the contrary, EXECUTIVE acknowledges and agrees that if EXECUTIVE
commits a material breach of the Covenant of Confidentiality
(Section 7), Covenant of Non-Disclosure (Section 8), Covenant of
Non-Solicitation (Section 9), Covenant of Cooperation (Section 10),
Covenant Against Competition (Section 11) or Rights to Inventions
(Section 12), COMPANY shall have the right to have the obligations
of EXECUTIVE specifically enforced by any court having jurisdiction
on the grounds that any such breach will cause irreparable injury
to COMPANY and money damages will not provide an adequate remedy.
Such equitable remedies shall be in addition to any other remedies
at law or equity, all of which remedies shall be cumulative and not
exclusive. EXECUTIVE further acknowledges and agrees that the
obligations contained in Sections 7 through 12, of this Agreement
are fair, do not unreasonably restrict EXECUTIVE’s future
employment and business opportunities, and are commensurate with
the compensation arrangements set out in this
Agreement.
14.
Survivability. Sections 7 through 13, of this Agreement, and
Section 6 to the extent required to give effect thereto, shall
survive termination of the employment relationship and this
Agreement.
15. General
Provisions.
a.
Arbitration. Any controversy involving the construction,
application, enforceability or breach of any of the terms,
provisions, or conditions of this Agreement, including without
limitation, claims for breach of contract, violation of public
policy, breach of implied covenant, intentional infliction of
emotional distress or any other alleged claims which are
not settled by mutual agreement of the parties, shall be submitted
to final and binding arbitration before a single arbitrator in
accordance with the rules of the American Arbitration Association
with respect to employment disputes in Los Angeles County,
California. The cost of the arbitrator shall be borne by COMPANY,
and each party shall be responsible for such party’s own
attorneys’ fees and litigation costs (other than costs of
arbitrator). In consideration of each party’s agreement to
submit to arbitration any and all disputes that arise under this
Agreement, each party agrees that the arbitration provisions of
this Agreement shall constitute her/its exclusive remedy and each
party expressly waives the right to pursue redress of any kind in
any other forum. The parties further agree that the arbitrator
acting hereunder shall not be empowered to add to, subtract from,
delete or in any other way modify the terms of this Agreement.
Notwithstanding the foregoing, any party shall have the limited
right to seek equitable relief in the form of a temporary
restraining order or preliminary injunction in a
court
of competent jurisdiction to protect itself from actual or
threatened irreparable injury resulting from an alleged breach of
this Agreement pending a final decision in
arbitration.
b.
Authorization. COMPANY and EXECUTIVE each represent and warrant to
the other that it has the authority, power and right to deliver,
execute and fully perform the terms of this Agreement.
c.
Entire Agreement. EXECUTIVE understands and acknowledges that this
document constitutes the entire agreement between EXECUTIVE and
COMPANY with regard to EXECUTIVE’s employment by COMPANY and
EXECUTIVE’s post-employment activities concerning COMPANY.
This Agreement supersedes any and all other written and oral
agreements between the parties with respect to the subject matter
hereof. Any and all prior agreements, promises, negotiations, or
representations, either written or oral, relating to the subject
matter of this Agreement not expressly set forth in this Agreement
are of no force and effect. This Agreement may be altered, amended,
or modified only in writing signed by all of the parties hereto.
Any oral representations or modifications concerning this
instrument shall be of no force and effect.
d.
Severability. If any term, provision, covenant, or condition of
this Agreement is held by a court or other tribunal of competent
jurisdiction to be invalid, void, or unenforceable, the remainder
of such provisions and all of the remaining provisions hereof shall
remain in full force and effect to the fullest extent permitted by
law and shall in no way be
affected, impaired,
or invalidated as a result of such decision.
e.
Governing Law. Except to the extent that federal law may preempt
California law, this Agreement and the rights and obligations
hereunder shall be governed, construed and enforced in accordance
with the laws of the State of California.
f.
Taxes. All compensation payable hereunder is gross and shall be
subject to such withholding taxes and other taxes as may be
provided by law. EXECUTIVE shall be responsible for the payment of
all taxes attributable to the compensation provided by this
Agreement except for those taxes required by law to be paid or
withheld by COMPANY.
g.
Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of COMPANY. EXECUTIVE may not
sell, transfer, assign, or pledge any of her rights or interests
pursuant to this Agreement. In the event of EXECUTIVE’s
death, EXECUTIVE’s estate shall succeed to all rights of
EXECUTIVE as effective at such time (including under Sections 5(d),
5(e) and 6).
h.
Waiver. Either party’s failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a
waiver of any such provision or provisions, or prevent that party
thereafter from enforcing such provision or provisions and each and
every other provision of this Agreement.
i.
Captions. Titles and headings to sections in this Agreement are for
the purpose of reference only and shall in no way limit, define, or
otherwise affect any provisions contained therein.
j.
Breach - Right to Cure. A party shall be deemed in breach of this
Agreement only upon the failure to perform any obligation under
this Agreement after receipt of written notice of breach and
failure to cure such breach within ten (10) days thereafter;
provided, however, such notice shall not be required where a breach
or threatened breach would cause irreparable harm to the other
party and such other party may immediately seek equitable relief in
a court of competent jurisdiction to enjoin such
breach.
k. All
notices, demands and all other communications required or otherwise
provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered either personally, by
reputable overnight courier or three (3) business days after
deposit via United States certified or registered mail, return
receipt requested, postage prepaid, addressed as
follows:
If to
EXECUTIVE:
At
EXECUTIVE’s last known address shown on the Company’s
payroll records
If to
the Company:
Attn:
Xxxxx Xxxxxxxxxxx, Co-Founder & CPO
0000
Xxxxxxxx Xxx.
Xxxxx
Xxxxxx, XX 00000
or to
such other address as any party may have furnished to the other in
writing in accordance with this Agreement, except that notices of
change of address shall be effective only upon
receipt.
16.
Acknowledgement. EXECUTIVE acknowledges that he has been given a
reasonable period of time to study this Agreement before signing
it. EXECUTIVE certifies that he has fully read, has received an
explanation of, and completely understands the terms, nature, and
effect of this Agreement. EXECUTIVE further acknowledges that he is
executing this Agreement freely, knowingly, and voluntarily and
that EXECUTIVE’s execution of this Agreement is not the
result of any fraud, duress, mistake, or undue influence
whatsoever. In executing this Agreement, EXECUTIVE does not rely on
any inducements, promises, or representations by COMPANY other than
the terms and conditions of this Agreement.
17.
Section 409A. The parties intend that all payments and benefits
under this Agreement comply with Section 409A of the Code and the
regulations promulgated thereunder (collectively “Section
409A”) and, accordingly, to the maximum extent permitted,
this Agreement shall be interpreted in a manner in compliance
therewith. To the extent that any provision hereof is modified in
order to comply with Section 409A, such modification shall be made
in good faith and shall, to the maximum extent reasonably possible,
maintain the original intent and economic benefit to EXECUTIVE and
COMPANY of the applicable provision without violating the
provisions of Section 409A. No amount shall be payable pursuant to
Section 6 or otherwise upon a termination of EXECUTIVE’s
employment unless such termination constitutes a “separation
from service” with COMPANY under Section 409A. To the maximum
extent permitted by applicable law, amounts payable to EXECUTIVE
pursuant to such Sections herein shall be made in reliance upon the
exception for certain involuntary terminations under a separation
pay plan or as short-term deferral under Section 409A. To the
extent that reimbursements or other in-kind benefits under this
Agreement constitute nonqualified deferred compensation, (i) all
expenses or other reimbursements hereunder shall be made on or
prior to the last day of the taxable year following the taxable
year in which such expenses were incurred by EXECUTIVE, (ii) any
right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and (ii) no such
reimbursement, expenses eligible for reimbursement, or in-kind
benefits provided in any taxable year shall in any way affect the
expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year. For purposes of Section 409A,
EXECUTIVE’s right to receive installment payments pursuant to
this Agreement shall be treated as a right to receive a series of
separate and distinct payments. Any other provision of this
Agreement to the contrary notwithstanding, in no event shall any
payment or benefit under this Agreement that constitutes
nonqualified deferred compensation for purposes of Section 409A be
subject to offset by any other amount unless otherwise permitted by
Section 409A.
18.
Effective Only Upon Execution by Authorized Officer of COMPANY;
Counterparts. This Agreement shall have no force or effect and
shall be unenforceable in its entirety until it is executed by a
duly authorized officer of COMPANY and such executed Agreement is
delivered to EXECUTIVE. This Agreement may be executed in
counterparts, each being an original and all such counterparts
together constituting one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have read, understood, and
voluntarily executed this Agreement as of the day and year first
above written.
EXECUTIVE
COMPANY
/s/ Xxx
Xxxx
By: /s/ Xxxxx
Xxxxxxxxxxx
Xxx
Xxxx
Xxxxx Xxxxxxxxxxx
Co-Founder, CTO
& CPO
