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Exhibit 10.21
April 10, 1998
Xx. Xxxxxx Xxxxxx
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxx 00000
Dear Xxxxxx:
The following shall constitute the Employment Agreement by and between
Cleveland Indians Baseball Company Limited Partnership, an Ohio limited
partnership (the "Club"), and you and shall, upon acceptance by you, replace
your existing contract dated January 9, 1995.
1. TERM.
(a) Subject to the terms and conditions set forth below, the
Club agrees to employ you as Executive Vice President/Business of the
Club, for the period commencing on January 1, 1998 and ending December
31, 2002, subject to subsections (b), (c), (d) and (e) below.
(b) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2003, at a salary of
$425,000 for 2003. Such option may be exercised by written notice
personally delivered or mailed to you at the Club's offices on or
before December 31, 2001.
(c) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2004 at a salary of
$450,000 for 2004. Such option may be exercised by written notice
personally delivered or mailed to the Club's offices on or before
December 31, 2002.
(d) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2005 at a salary of
$475,000 for 2005. Such option may be exercised by written notice
personally delivered or mailed to the Club's offices on or before
December 31, 2003.
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(e) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2006 at a salary of
$500,000 for 2006. Such option may be exercised by written notice
personally delivered or mailed to the Club's offices on or before
December 31, 2004.
(f) Your salary shall be payable each calendar year in
twenty-four equal semi-monthly installments.
2. SALARY.
(a) SALARY. Subject to the adjustment described in paragraph
2(c), your salary as Executive Vice President/Business during the
period of your employment under this Agreement shall be as follows,
less the amounts deferred pursuant to paragraph (b) of this Section 2:
January 1, 1998 to December 31, 1998 at the rate of $300,000
per year.
January 1, 1999 to December 31, 1999 - $325,000
January 1, 2000 to December 31, 2000 - $350,000
January 1, 2001 to December 31, 2001 - $375,000
January 1, 2002 to December 31, 2002 - $400,000
Option Years:
January 1, 2003 to December 31, 2003 - $425,000
January 1, 2004 to December 31, 2004 - $450,000
January 1, 2005 to December 31, 2005 - $475,000
January 1, 2006 to December 31, 2006 - $500,000
(b) DEFERRED COMPENSATION PLAN. On or before December 1 of the
year immediately preceding any calendar year, you may elect to defer
the payment of not more than 50% of the salary otherwise payable under
subsection (a) of this Section 2 and 100% of any bonus payments for
such calendar year, and
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on June 15 of such calendar year (or, if later, the date that any bonus
payment would otherwise have been payable), the Club shall deposit such
deferred compensation in a trust, the earnings on which are not
currently taxable for federal income tax purposes, which shall be
established by the Club to provide deferred compensation to you in
accordance with this subsection (b) (the "Deferred Compensation
Account"); a copy of such trust is attached hereto as Exhibit I.
Notwithstanding the foregoing, if you terminate employment, die or
become "permanently disabled" (as defined under Section 8) during a
calendar year, the amount to be credited to the Deferred Compensation
Account for that year shall be equal to the portion of the deferred
amount that you actually earned through the date of your termination of
employment, death or permanent disability. The fair market value of the
Deferred Compensation Account, as determined under clause (i) of this
subsection (b), shall be paid by the Club to you, or in the case of
your death, to your beneficiary within 60 days following the earlier of
(a) the date of your death or permanent disability or (b) termination
of your employment with the Club.
(i) INVESTMENT POLICY. Any deferred compensation
amounts credited to the Deferred Compensation Account pursuant
to this subsection (b) and all income attributable to such
amounts (net of expenses) shall be held in a segregated
investment account within the Trust and shall be invested and
reinvested accordance with the Trust agreement until such time
as the entire fair market value of Deferred Compensation
Account is paid by the Club to you, or your beneficiary, as
applicable in accordance with Subsection (b)(i) above.
(ii) DEATH BENEFITS. You shall be entitled to
designate a beneficiary (or beneficiaries) who shall be
entitled to receive that portion of your undistributed
Deferred Compensation Account, as determined under the first
paragraph of this subsection (b) if you die before receiving
the total value of the Deferred Compensation Account. The
designation of a beneficiary (or beneficiaries) must be made
in writing on a form substantially similar to the form
attached as Exhibit II to this Agreement and delivered to the
Club. You may change or revoke a beneficiary designation by
filing a new designation or notice of revocation with the
Club. If you fail to designate a beneficiary or if no
designated beneficiary survives you, the Club will pay any
amounts payable pursuant to this subsection (b) to your
surviving spouse, and to your personal representative if there
is no surviving spouse.
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(iii) HARDSHIP. Regardless of the date on which
payment of the deferred compensation under this subsection (b)
otherwise is to be paid, in the event of your hardship,
payment of all or a portion of the fair market value of the
Deferred Compensation Account can be accelerated by the Club's
determination of hardship. The Club shall have sole discretion
as to whether a hardship has occurred and, if so, also shall
have sole discretion to determine the amount of deferred
compensation that may be distributable to you in order to
alleviate that hardship. For this purpose, hardship shall mean
any emergency or necessity affecting your personal or family
affairs having a significant adverse financial effect.
(iv) NO FORFEITURE OF DEFERRED COMPENSATION. All
deferred compensation credited to the Deferred Compensation
Account shall be nonforfeitable.
(v) DEBITING OF DEFERRED COMPENSATION ACCOUNT. Once
an amount of deferred compensation has been paid, such amount
shall be debited from the Deferred Compensation Account and
shall cease to exist.
(vi) PARTICIPANT'S RIGHTS ARE UNFUNDED AND UNSECURED.
Notwithstanding the creation of the trust described herein,
all deferred compensation benefits under this subsection (b)
are unfunded for purposes of the Employee Retirement Income
Security Act of 1974, as amended. Your (or your beneficiary's)
right to receive a distribution hereunder shall be an
unsecured claim against the general assets of the Club, and
neither you nor your beneficiary shall have any rights in or
against any amounts credited hereunder or any other specific
assets of the Club or the trust referred to herein. Any
deferred compensation benefits payable hereunder to you or
your beneficiary may be payable out of the trust established
by the Club, or may be payable from the general assets of the
Club.
(vii) ANTI-ASSIGNMENT. No right or deferred
compensation payment under this subsection (b) shall be
subject to alienation, sale or assignment.
(c) INFLATION ADJUSTMENT. If the salary amount for any year
during the term of this Agreement, including any option year if the
applicable option has
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been exercised is less than an amount equal to (i) $300,000, multiplied
by (ii) one (1) plus the percentage increase in the CPI for the period
commencing on January 1, 1998 and ending on the day before the
beginning of the year for which the salary amount is applicable, then
the salary shall be adjusted to equal the amount computed pursuant to
this paragraph 2(c). Any adjustment made pursuant to this paragraph
shall not be taken into account to compute the salary amount for any
other year. CPI shall mean the Consumer Price Index for Urban Wage
Earners and Clerical Workers, All Items, as published by the U.S.
Department of Labor, Bureau of Statistics. If the manner in which the
CPI is determined by the Bureau of Labor Statistics shall be
substantially revised, including, without limitation, a change in the
base index year, an adjustment shall be made in such revised index that
would produce results reasonably equivalent to those that would have
been obtained if such CPI had not been so revised. If the CPI shall
become unavailable to the public because its publication is
discontinued or otherwise, or if equivalent data is not readily
available to make the adjustment referred to in the preceding sentence,
then a comparable index published by an agency of the United States
government that reflects changes in the cost of living or purchasing
power of the consumer dollar shall be substituted or, if no such index
is available, then a comparable index published by a major United
States bank or other financial institution shall be used.
3. POST SEASON BONUS. In the event that the Club participates in a
division playoff series, league championship series or the World Series during
any championship season during the term of this Agreement, including either
option year if the applicable option has been exercised, you shall be entitled
to receive a bonus equal to a full player's share payable to the Club's players
as determined pursuant to Major League Rule 45(b)(2) as the same shall be
amended from time to time.
4. GROUP PLAN. In addition to all of the other rights and benefits
under this Agreement, you shall be eligible to participate in any current or
future plan which may be provided by the Club for the benefit of its executives
or employees, provided you qualify, and subject to such plan's or program's
terms and conditions. You may participate in, among other things, any and all
group life insurance policies, plans, and medical and health benefits maintained
by or on behalf of the Club to the fullest extent possible in accordance with
the terms and provisions thereof.
5. EXPENSES. You shall be entitled to incur on behalf of the Club
reasonable and necessary expenses in connection with your duties, in accordance
with the Club's customary practice, including the following: Expenses incurred
in
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connection with your business use of an automobile which will be provided by
the Club for your exclusive use; travel expenses, consistent with the Club's
customary policy, incurred by you on Club business trips.
6. JOB DESCRIPTION. During the term of your employment, you shall
faithfully perform the duties and have the responsibilities of Executive Vice
President/Business of the Club, subject to the control and direction of the
President, Chief Executive Officer, the Chairman of the Board and the Board of
Directors of the Club and its General Partner. You agree to devote your full
time, energies, talent, and best efforts exclusively to your duties as Executive
Vice President/Business and to such other duties as may be assigned to you as
provided above. You agree that the Club will not grant permission to any other
Major League Baseball Club to discuss other employment opportunities with you
during the term of this Contract. This paragraph shall not be construed in a
manner that would prohibit you from participation in charitable and civic
activities or organizations; provided that such participation is disclosed to
Club and the Club does not object to such participation.
7. PUBLIC CONTACT. You agree to conduct yourself with propriety and
with due regard to public convention and morals, and agree not to engage in
conduct which is detrimental to or contrary to the rules of the Club, the League
and/or professional baseball, and you further agree to abide by and be subject
to the discipline of the Commissioner of Baseball and to his decisions rendered
in accordance with the Professional Baseball Agreement.
8. DEATH OR DISABILITY. Your death or permanent disability during the
term of this Agreement shall immediately terminate this Agreement. For the
purposes of this Section 8, permanent disability is defined as any condition
caused by an accident, sickness or otherwise, which, in the reasonable judgment
of the President and Chief Executive Officer of the Club, if any, the Chairman
of the Board or the Board of Directors, disables, or may in the future disable,
you from substantially performing the duties and services required under this
Agreement for a period of 120 days, whether consecutive or non-consecutive, in
any 12-month period. Upon termination of this Agreement pursuant to this Section
8, you shall be entitled to no compensation or any of the other rights or
benefits provided in this Agreement not already earned as of the date of such
termination or otherwise required by law.
9. TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. In the event that
you fail to observe and comply with the provisions of this Agreement in any
material respect or in the event of your fraud or dishonesty in the performance
of your duties, the Club may discharge you prior to the expiration of the term
of this
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Agreement by giving you written notice, which notice shall state the specific
facts upon which the discharge is based. In the event of such discharge, you
shall be entitled to no compensation or any of the other rights or benefits
provided in this Agreement not already earned as of the date of such discharge
or termination, except as otherwise required by law. Both parties agree,
however, that you shall have no right to terminate this Agreement voluntarily.
10. TERMINATION WITHOUT CAUSE. You agree that, should you be discharged
from your duties without cause, you are obligated to seek and, if offered,
accept other comparable employment, either from another Major League Club or
from some other baseball or non-baseball employer. In the event that you are so
discharged without cause, you will receive not less than five days written
notice of such discharge. The compensation due by the Club under this Agreement
will be reduced by any compensation which you receive from such other employment
following such termination. The amount to be deducted includes, but is not
limited to, compensation of any kind for services, including salary, bonuses,
fees, commissions, payments in kind, and similar items, and the reasonable value
of services rendered by you should you become self-employed following
termination.
11. REPRESENTATIONS AND ADDITIONAL COVENANTS.
(a) You hereby represent that you are free to accept
employment with the Club as contemplated hereunder, and that such
employment will not violate the terms of any other agreement or
instrument to which terms you are subject.
(b) You hereby represent that you do not directly or
indirectly, own stock or any other financial interest in the ownership
or earnings of any Major League Club, and you agree that you will not
hereafter acquire or hold any such interest except in accordance with
Major League Rule 20(e).
12. CONFIDENTIALITY. The parties agree that the terms of this Agreement
and all of the conversations and negotiations regarding your employment with the
Club are in strictest confidence and shall be and will remain confidential and
not subject to public disclosure of any kind without our mutual consent or as
may be required by law. In addition, you agree to maintain the confidentiality
of all business information of the Club which you acquire during your employment
hereunder, and to preserve such information for the exclusive benefit of the
Club.
13. INJUNCTIVE AND EQUITABLE RELIEF. Because during the course of
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your employment under this Agreement you will gain an intimate knowledge of the
business, activities and affairs of the Club, and because of the special, unique
and extraordinary services you are capable of performing for the Club or one of
its competitors, you recognize that the services to be rendered by you hereunder
are of a character giving them a peculiar value, the loss of which cannot be
adequately or reasonably compensated for by damages. You therefore agree that if
you fail to comply with any of the provisions of this Agreement, in addition to
the remedies and procedures provided elsewhere in this Agreement, the Club shall
be entitled to obtain immediate injunctive or other equitable relief to restrain
you from failing to fulfill your obligations hereunder or from becoming
affiliated, directly or indirectly, with any of the Major League Clubs or their
respective minor league affiliates, without prejudice to any other remedies to
which the Club may be entitled under law.
14. BINDING EFFECT. This Agreement shall be binding upon, and shall
inure to the benefit of, both you and the Club. This Agreement may not be
assigned or transferred without the consent of both parties.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties, and supersedes in its entirety any prior agreements,
arrangements and understandings between the parties with respect to the subject
matter hereof, and no amendment hereof shall be deemed valid unless in writing
and signed by the parties hereto.
16. GOVERNANCE. This Agreement is subject to and is governed by, all
applicable rules and regulations of Major League Baseball and the American
League of Professional Baseball Clubs, and any rules or regulations which the
Club may announce from time to time.
17. LIFE INSURANCE. The Club understands that you may acquire life
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insurance policy to insure receipt of proceeds based upon the unpaid portion of
the salary amounts set forth in paragraph 2. Each year during the term of this
Contract, including any option years if the applicable option has been
exercised, The Club will reimburse you for the cost of such policy in an amount
not to exceed the annual premium based upon preferred issued rates for a term
insurance policy with a death benefits equal to $1,250,000.
Very truly yours,
CLEVELAND INDIANS BASEBALL
COMPANY LIMITED PARTNERSHIP
By: Its General Partner, Cleveland
Baseball Corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
ACCEPTED:
/s/ Xxxxxx Xxxxxx
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Date: May 11, 1998
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