Exhibit No. 7
American Sports History Incorporated
1998 Form 10-KSB
File No. 00-00000-00
EMPLOYMENT CONTRACT
FOR
CHIEF EXECUTIVE OFFICER
American Sports History, Inc., a Nevada Corporation, whose
address is 00-0 Xxxxxxxx Xx., Xxxxxxx, Xxx Xxxxxx, 00000,
hereinafter referred to as Employer, and Xxxxxxx X. Xxxxxxx, an
individual whose address is 00-0 Xxxxxxxx Xx., Xxxxxxx, Xxx
Xxxxxx, 00000, hereinafter referred to as Employee.
WITNESSETH:
WHEREAS,
Employer seeks to employ Employee as Chairman of the Board and
Chief Executive Officer (CEO) to manage, preside, direct and
supervise the company at the direction of the Board of Directors.
WHEREAS,
Employee is desirous of performing the job as Chairman of the
Board and Chief Executive Officer and is willing to commit to
perform such functions such as fund raising, directing mergers
and acquisitions and to hire, manage, direct, promote, and
supervise the employees and efforts as dictated by the Board of
Directors.
NOW THEREFORE, in consideration of the foregoing and mutual
promises herein set forth, the parties hereby agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT - RENEWAL
Specified Period
Section 1.01. Employer hereby employs Employee and
Employee hereby accepts employment with Employer for a period of
five (5) years beginning on December 15, 1995 and terminating on
December 15, 2000.
Automatic Renewal
Section 1.02. This agreement shall be renewed
automatically for succeeding terms of two (2) years unless either
party gives notice to the other at least ninety (90) days prior
to the expiration of the current term.
"Employment Term" Defined
Section 1.03. As used herein, the phrase "employment
term" refers to the entire period of employment of Employee by
Employer hereunder, whether for the periods provided above, or
whether terminated earlier as hereinafter provided or extended by
mutual agreement between Employer and Employee.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
General Duties
Section 2.01. Employee shall serve as the President, Chief
Executive Officer and Chairman of the Board of Directors of
Employer. In his capacity as Chairman, President and Chief
Executive Officer, Employee shall do and perform all services,
acts, or things necessary or advisable to manage and conduct the
business of Employer, including the hiring and firing of all
employees other than the officers elected by the Board of
Directors, subject to all times to the policies set by Employer's
Board of Directors, and to the consent of the Board of Directors
at such time only when required by the terms of this contract.
Matters Requiring Consent of Board of Directors
Section 2.02. Employee shall not, without specific
approval of Employer's Board of Directors do or contract to do
any of the following:
(a) Borrow on behalf of Employer during any one fiscal
year an amount in excess of $2 million dollars.
(b) Purchase capital equipment for amounts in excess of
$1 million dollars unless approved by the Board of Directors.
(c) Sell any single capital asset of Employer having a
market value in excess of $1,000,000.00 or a total of capital
assets during a fiscal year having a market value in excess of
$5,000,000.00.
(d) Terminate the services of any other officer of
Employer or hire any replacement of any officer whose services
have been terminated if that officer falls within the ambit of
one whose employment requires approval by the Board of Directors.
(e) Commit Employer to the expenditure of more than
$5,000,000.00 or amount equal to 10% of the prior fiscal years
gross revenues, whichever is more, in the development and sale of
new products or services.
Devotion to Employer's Business
Section 2.03. (a) Employee shall devote adequate time,
ability, and attention to the business of the Employer during the
term of this contract when required.
(b) The expenditure of reasonable amounts of time for
educational, charitable, or professional activities shall not be
deemed a breach of this agreement if those activities do not
materially interfere with the services required under this
agreement and shall not require the prior written consent of
Employer's Board of Directors.
(c) This agreement shall not be interpreted to prohibit
Employee from making personal investments or conducting private
business affairs or private consulting or business ventures if
those activities do not materially interfere with the services
required under this agreement. However, after this date,
Employee shall not directly or indirectly acquire a significant
interest in any business competing directly with the business of
Employer. Employer acknowledges that Employee has and intends to
continue other active business interests subject to the terms of
Section 2.03 and 2.04.
Competitive Activities
Section 2.04. During the term of this contract Employee
shall not, directly, either as an employee, employer, consultant,
agent, principal, partner, significant stockholder, corporate
officer, director, or in any other individual or representative
capacity, engage or participate in any business that is in direct
competition with the business of Employer.
Trade Secrets
Section 2.05. (a) The parties acknowledge and agree that
during the term of this agreement in the course of the discharge
of his duties hereunder, Employee shall have access to and become
acquainted with information concerning the operation and
processes of Employer, including without limitation, financial,
personal, sales, scientific and other information that is owned
by Employer and regularly used in the operation of Employer's
business, and that such information constitutes Employer's trade
secrets.
(b) Employee specifically agrees that he shall not
knowingly or willfully misuse, misappropriate, or disclose any
such trade secrets, directly or indirectly, to any other person
or use them in any way, either during the term of this agreement
or at any other time thereafter, except as is required in the
course of his employment hereunder or as requested by a
governmental agency with proper authority.
(c) Employee acknowledges and agrees that the sale or
unauthorized use or disclosure of any of Employer's trade secrets
obtained by Employee during the course of his employment under
this agreement, including information concerning Employer's
current or any future and proposed work, services, or products
the facts that any such work, services, or products are planned,
under consideration, or in production, as well as any
descriptions thereof, constitute unfair competition. Employee
promises and agrees not to engage in any unfair competition with
Employer during the term of this agreement.
(d) Employee further agrees that all files, records,
documents, drawings, specifications, equipment, and similar items
relating to Emloyer's business, whether prepared by Employee or
others, are and shall remain exclusively the property of Employer
and that they shall be removed from the premises of Employer only
in the ordinary course of business for Employee to perform the
services under this agreement.
Services as Consultant
Section 2.06. Following the employment term or Employee's
retirement, and if the employment term has not been terminated
for cause, Employee shall make his advice and counsel available
to Employer for such a period as Employer and Employee agree
upon. The Terms of such services to be negotiated at such time
as required. The parties agree that the advice and counsel shall
not entail full-time service and shall be consistent with
Employee's retirement status.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
General Description
Section 3.01. Employer shall provide Employee with the
compensation, incentives, benefits, and business expense
reimbursement specified elsewhere in this agreement.
Office and Staff
Section 3.02. Employer shall provide Employee with private
offices, full-time secretary, office assistants and equipment,
supplies, telephones, and other facilities and services suitable
to Employee's position and adequate for the performance of his
duties. The location of offices and suitability shall be as
mutually agreed upon by the Board of Directors and Employee from
time to time.
Indemnification of Losses of Employee
Section 3.03. Employer shall defend, indemnify, and hold
harmless Employee from and against any loss, liability, cost, or
expense, including, but not limited to all attorney's fees, which
may be incurred by Employee in connection with his employment,
affiliation or otherwise with Employer or its subsidiaries and
affiliates. If Employer has not adequately provided for such
defense when required, Employee shall be fully reimbursed for all
reasonable cost of attorney(s) that may be employed or retained
for the defense and/or counsel of Employee.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Section 4.01. (a) As compensation for the services to be
performed hereunder, employee shall receive a salary at the rate
of $200,000.00 per annum, payable not less than once per month
during the employment term, plus 1% of the gross revenues,
payable quarterly.
(b) Employee may receive additional increases in salary as
may be determined by Employer's Board of Directors in its sole
discretion. Year 2= $250,000.00; Year 3 = $300,000.00, Year 4 =
$300,000.00, Year 5 = $500,000.00
Deferred Compensation
Section 4.02. If Employee remains in the employ of Employer
until age 65, or an earlier retirement on mutual written consent
of both Employee and Employer, Employer agrees to pay to Employee
additional compensation, commencing with his first full month of
retirement, at the annual rate of 80 percent of the highest
annual salary when he has received up to age 65, payable in equal
monthly installments on the last day of each month during
Employee's entire lifetime. If employee is disabled as
referenced in Paragraph 4.03, then he shall be considered having
been employed for this paragraph until age 65, at which time he
shall be deemed qualified for retirement and receive full
benefits pursuant to section 4.02.
Salary Continuation During Disability
Section 4.03. In addition to benefits that might be
available under workers compensation laws, if Employee for any
reason whatsoever becomes disabled so that he is unable to
perform all the duties prescribed herein, Employer agrees to pay
Employee 80 percent of Employee's annual salary, payable in the
same manner as provided for the payment of salary herein, for the
next fifteen (15) fiscal years. Should Employee's disability
arise out of the course and scope of employment or related in any
way (in the broadest definition), the salary continuation
provided for herein shall be at a rate of 90 percent of
Employee's salary until age 66. Employer shall have the option
of satisfying those salary continuation benefits by purchase of a
disability or other insurance policy providing equal or greater
benefits of Employee. Employer is not relieved of its
obligations in the event of nonpayment by the issuer of any such
insurance.
Tax Withholding
Section 4.04. Employer shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and
all sums required for federal income and Social Security taxes
and all state or local taxes now applicable or that may be
enacted and become applicable in the future.
ARTICLE 5. EMPLOYEE INCENTIVES
Section 5.01. (a) Employer agrees to pay Employee a bonus
in the form of a percentage of profits according to the following
terms: 5% of all pretax profits over $200,000.00 for fiscal year
1996; 5% of all pretax profits in excess of $1.0 million for
fiscal year 1997; 5% of all pretax profits in excess of $1.5
million for fiscal year 1998; 5% of all pretax profits in excess
of $2 million for fiscal year 1999; and 5% for all pretax profits
in excess of $2.5 million for fiscal year 2000; and 5% of all
pretax profits in excess of $3 million for the fiscal year 2001
pro rata.
(b) If the employment term is terminated by Employer for
cause, and is so deemed to be so in a court of law, Employee
shall not be entitled to any portion of the annual profit-sharing
payment for the fiscal year in which that termination occurs.
However, if this contract should expire or be terminated for
reasons other than cause, Employee shall be entitled to a pro
rata portion of the annual profit-sharing payment based on the
number of months during the fiscal year that he was employed.
(c) For the purpose of determining the amount of the
annual profit-sharing bonus, the pretax profits of Employer shall
be determined by the firm of independent certified accountants
then employed by Employer. Pretax profits for this calculation
only shall be made prior to payment of bonus. (Section 5.01(a))
and minus allocations paid to any affiliate organization.
Stock Option Bonus
Section 5.02. (a) Employee is hereby granted a one time
option to acquire 2,000,000 shares of Employers preferred stock @
$.01 each. Employee is granted an additional annual option to
acquire 1,000,000 shares of Employer's common stock for each year
of employment pursuant to this agreement. Employee is granted an
additional option to purchase an additional 1,000,000 shares of
the Employers common stock, for every one (1) million dollars of
pretax profit as reported. Employee has a right to exercise
these options in whole or in part. Employee shall pay an
exercise price on pre share basis in an amount equivalent to the
lowest bid price as quoted publicly during the year in which the
option were earned. The number of shares subject to this option
shall be proportionately adjusted for any change in the stock
structure of the Employee, because of share dividends,
recapitalization, reorganizations, mergers, or otherwise. The
option is assignable and may be exercised during the term of
employment under this agreement, provided however, that in the
event that the employment under this agreement if terminated by
Employer for reasons other than cause against Employee, Employee
shall retain the right to exercise any unused portion of the
option until two (2) years after the termination date provided by
this contract. The option may be exercised in whole and in part,
but may only be exercised in lots of 5,000 shares. Employee
shall not have any of the rights of, nor be treated as a
shareholder with respect to the shares subject to this option
until he has exercised that option and has become the shareholder
of record of these shares.
ARTICLE 6. EMPLOYEE BENEFITS
Annual Vacation
Section 6.01. Employee shall be entitled to fifteen (15)
working days vacation time each year without loss of
compensation. In the event that Employee is unable for any
reason to take the total amount of vacation time authorized
herein during any year, he may accrue that time and add it to
vacation time for any following year OR may receive a cash
payment therefor in an amount equal to the amount of annual
salary attributable to that period of time. Additionally, for
each year of this contract, five (5) working days vacation shall
be added to the annual vacation until a maximum of thirty (30)
working days are attained.
Illness
Section 6.02. Employee shall be entitled to twenty (20)
days per year as sick leave with full pay. Sick leave may be
accumulated up to a total of one hundred (100) days which may be
taken or the Employer will pay Employee for sick days unused and
accumulated upon termination.
Automobile Allowance
Section 6.03. Employer shall provide Employee with an
automobile allowance payable in monthly increments of $1,000.00
each month.
Death Benefits
Section 6.04. If Employee should die during the employment
term or after his retirement and if Employee has surviving spouse
at that time, Employer agrees to pay the spouse the sum of
$10,000.00 per month for five (5) years. If Employer does not
have a surviving spouse at the time of death, Employer agrees to
pay Employee's designee or estate the sum of $250,000.00 within
sixty days (60) of certified proof of death.
Medical Coverage
Section 6.05. Employer agrees to maintain insurance and
include Employee and eligible family members in the coverage of
all medical, major medical hospital, dental, and eye care.
Employer agrees to maintain the coverage at a minimum of health
benefits as set forth above to cover all doctors, hospital, and
associated cost minus a maximum annual $1,000.00 contribution by
Employee.
Life Insurance
Section 6.06. (a) Employer agrees to obtain a life
insurance policy on the life of Employee if reasonably insurable
in the face amount of $2,000,000.00. Employer further agrees to
make that insurance policy payable to the beneficiary or
beneficiaries designated by Employee. Employer agrees to pay all
premiums on the policy during the term of employment provided
herein or any extension to this agreement. At time of
retirement, or disability, Employer shall assign all rights and
interest in the policy to the Employee at no additional cost.
(b) Employee agrees to submit to a physical examination
at any time requested by Employer for the purpose of Employer's
obtaining "keyman" life insurance on the life of Employee for the
benefit of Employer; provided, however, that Employer shall bear
the entire cost of the examination and any resulting insurance
associated thereto.
ARTICLE 7. BUSINESS EXPENSES
Use of Credit Card
Section 7.01. (a) All business expenses reasonably incurred
by Employee in promoting and supervising the business of Employer
including expenditures for entertainment, gifts and travel, are
to be paid for, insofar as possible, by the use of credit cards
in the name of Employer which will be furnished to Employee and
paid for by Employer.
(b) Employee shall document expenses to a reasonably
practicable extent.
Reimbursement of Other Business Expenses
Section 7.02. Employer shall promptly reimburse Employee
for all other reasonable business expenses incurred by Employee
in connection with the business of Employer.
ARTICLE 8. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 8.01. (a) Employer reserves the right to terminate
this agreement if Employee willfully and substantially breaches
or habitually neglects the duties which he is required to perform
under the terms of this agreement and is so found to have done so
in a U.S. court of law in accordance with the laws of California.
(b) Employer may at its option terminate this agreement
for the reasons stated in this section by giving thirty (30) days
written notice of intent to terminate to Employee without
prejudice to any other remedy to which Employer may be entitled
either at law, in equity, or under this agreement subject to
provisions of Section 8.01 c, d, and e.
(c) The notice of intent to terminate required by this
section shall specify the grounds for the termination and shall
be supported by a statement of (all) relevant facts.
(d) Termination under this section shall be considered "for
cause" for the purposes of this agreement, if upheld by a court
of law as defined herein.
(e) If notification of intent to terminate is given to
Employee, then Employee shall have sixty (60) days after the
effective date of notice of intent to terminate to cure any
sustantiated deficiency. If deficiency is cured, then notice of
intent shall be null an void at such time. A sixty (60) day
extension is automatically given when and if requested by
Employee, if more time is required to substantiate or evaluate
the cause for which the original notice of intent to terminate
was given.
Termination Without Cause
Section 8.02. (a) This agreement shall be terminated upon
the death of Employee.
(b) Employer reserves the right to terminate this agreement
not less than twelve (12) months after Employees suffers any
physical or mental disability that would prevent the performance
of the duties under this agreement. Such a termination shall be
effected by giving sixty (60) days' written notice of termination
to Employee. Termination pursuant to this provision shall not
prejudice Employee's rights to continue compensation pursuant to
Section 4.02 and 4.03 of this agreement.
(c) Termination under this section shall not be considered
"for cause" for the purposes of this agreement.
Effect of Merger, Transfer of Assets, or Dissolution
Section 8.03. This agreement shall not be terminated by any
merger, transfer, voluntary or involuntary dissolution of
Employer for any reason.
Employer Breach or Voluntary Termination
Section 8.04. Notwithstanding any provision of this
agreement, if Employer breaches or voluntarily terminates this
agreement and such breach of voluntary termination is upheld by
binding arbitration, the entire agreement will be considered
fully vested and employer shall pay Employee a minimum amount
equal to four (4) years annual salary at the then current rate of
compensation or the total amount due under this contract
whichever is greater within thirty (30) days. All stock options
and bonuses of any and all kind pursuant to Section 5 shall
remain in full force and effect. Failure to pay within the time
period shall cause an additional breach of the contract and all
sums due shall immediately accumulate interest in the total sum
due at the maximum interest rate allowable by the governing law.
Termination by Employee
Section 8.05. Employee may terminate his obligations under
this agreement by giving Employer at least six (6) months notice
in advance. If Employer doesn't with Employee to remain for any
portion thereof, then Employer must pay for the same as if the
Employee worked the entire extent of the notice period.
Section 8.06. This agreement may be terminated forthwith by
Employee in the event that Employer is placed into receivership,
bankruptcy, or insolvency proceedings that are commenced by or
against Employer, or if an assignment for the benefit of
creditors occurs, or upon the voluntary winding up or liquidation
of its business by Employer thereto, whether or not with the aid
and assistance of any court.
Termination by Mutual Consent
Section 8.07. Employment may be terminated by the Board of
Directors for any reason whatsoever, as long as this Agreement
remains in effect for the duration of the term with not material
adverse changes to the Employee.
ARTICLE 9. GENERAL PROVISIONS
Section 9.01. Any notices to be given hereunder by either
party to the other shall be in writing any may be transmitted by
personal delivery or by mail, registered or certified, postage
prepaid with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses appearing in the
introductory paragraph of this agreement, but each party may
change that address by written notice in accordance with this
section. Notices delivered personally shall be deemed
communicated as of the date or actual communication, mailed
notices shall be deemed communicated as of the date of
acknowledged and signed receipt by the receiving party.
Governing Law; Arbitration
Section 9.02. This agreement, entered into in Las Vegas,
Nevada shall be governed by the laws of the United States of
America and the State of Nevada, without reference to conflict of
law principles. Any dispute or disagreement arising between
Employer and Employee in connection with any interpretation of
the terms of this agreement or the compliance or noncompliance
therewith, or the validity or enforceability thereof, which is
not satisfied to the mutual satisfaction of Employer and Employee
within sixty (60) days (or such longer period as may be mutually
agreed upon) from the date that either party informs the other in
writing that such dispute or disagreement exists, shall be
finally settled, under the Commercial Arbitration Rules of
American Arbitration Association in effect on the date that such
notice is given. The arbitration proceedings shall be conducted
in Las Vegas, Nevada. The arbitration award shall be final and
binding upon the parties, and judgment may be entered thereon,
upon the application of either party, by any court having
jurisdiction. Each party shall bear the cost of preparing and
presenting its case, and the
cost of the arbitration, including fees and expenses of the
arbitrator(s), will be shared equally by the parties unless the
award otherwise provides.
Section 9.03. If any action at law or in equity is
necessary to enforce or interpret the terms of this agreement,
the prevailing party shall be entitled to reasonable attorney's
fees, costs, and necessary disbursements in addition to any other
relief to which that party may be entitled. This provision shall
be construed as applicable to the entire contract.
General Terms and Conditions
Section 9.04. This agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto
with respect to the employment of Employee by Employer and
contains all of the covenants and agreements between the parties
with respect to that employment if any manner whatsoever. Each
party to this agreement acknowledges that no representation,
inducements, promises, or agreements, orally or otherwise have
been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement,
statement, or promise not contained in this agreement shall be
valid or binding on either party.
Section 9.05. The provisions of this agreement Sections
3.03, 4.02, 4.03, 5.01, 5.02, 6.04 and 6.06, shall survive the
termination of this agreement other than if justified termination
for cause pursuant to Section 8.01.
Section 9.06. Any consent required under this agreement
shall not be unreasonably withheld or delayed.
Modifications
Section 9.07. Any modification of this agreement will be
effective only if it is in writing and signed by the party to be
charged.
Effect of Waiver
Section 9.08. The failure of either party to insist on
strict compliance with any of the terms, covenants, or conditions
of this agreement by the other party shall not be deemed a waiver
of that term, covenant, or condition. nor shall any waiver or
relinquishment of any right or power at any one time or times be
deemed a waiver or relinquishment of that right or power for all
or any other times.
Section 9.09. Both parties agree that any breach of this
agreement by the other party may cause irreparable damage that,
in the event of such breach, in addition to any and all remedies
at law, such party shall have the right to injunctive relief,
specific performance, or other equitable relief to prevent the
continuous violations of these terms.
Partial Invalidity
Section 9.10. If any provision in this agreement is held by
a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in
any way.
Sums Due Deceased Employee
Section 9.11. If Employee dies prior to the expiration of
the terms of his employment, any sums that may be due him from
Employer under this agreement as of the date of death shall be
paid to Employee's executors, administrators, heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement to be effective, valid, and binding upon the parties,
their successors and assigns as of the date below as executed by
their duly authorized representatives.
Accepted and Agreed:
American Sports History, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx, President & CEO
Employer Authorized Signature
Date: 1/2/96
By: /s/ Xxxxxxx X. Xxxxxxx
Employee Signature
Xxxxxxx X. Xxxxxxx
Date: 1/2/96
