EXHIBIT 10.17
EMPLOYMENT AGREEMENT
Parties: Global Sports, Inc.,
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a Delaware corporation ("Employer")
0000 Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, XX 00000
Xxxx Xxxxx ("Executive")
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Date: May 30, 2000
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Background: Employer and its subsidiaries are in the business of developing
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and operating e-commerce sporting goods businesses for traditional sporting
goods retailers, general and specialty merchandisers, Internet companies and
media companies (the "Business"). Employer desires to employ Executive, and
Executive desires to accept such employment, on the terms and conditions stated
below.
INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual
agreements stated below, Executive and Employer agree as follows:
1. Employment and Term. Employer hereby employs Executive, and
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Executive accepts such employment, subject to all of the terms and conditions of
this Agreement, for a term of four (4) years beginning on May 29, 2000 and
ending on May 28, 2004, unless sooner terminated in accordance with other
provisions hereof.
2. Position and Duties. Executive shall serve as Executive Vice
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President and Chief Operating Officer and in such capacity shall have
supervision and control over, and responsibility for, the operations,
fulfillment, customer service, management information systems, content
management and strategy functions of Employer. It is expected that Executive
eventually will be responsible for the merchandising functions of Employer.
Executive shall report to, and be subject to the direction of, Employer's Chief
Executive Officer (the "CEO"), as well as Employer's Board of Directors (the
"Board"). Executive shall also have such other responsibilities and duties
consistent with his present duties and current position with Employer, as may
from time to time be prescribed by the CEO or the Board. Executive shall devote
all of his working time, energy, skill and best efforts to the performance of
his duties hereunder in a manner which will faithfully and diligently further
the business and interests of Employer.
3. Place of Employment. Executive's principal place of employment will
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be at the Employer's principal executive office located at 0000 Xxxxx Xxxxxx,
Xxxx xx Xxxxxxx, XX, or at such other location as the Employer shall specify.
4. Compensation, Benefits and Expenses.
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4.1 Compensation. Employer shall pay to Executive an annual base
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salary ("Base Salary") in the amount of $250,000, payable in accordance with
Employer's normal payroll practices. The Base Salary shall be reviewed annually
by Employer and shall be subject to annual increases in accordance with
Employer's annual performance review procedures.
4.2 Bonuses. In addition to his Base Salary, for each year of this
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Agreement, Executive shall be eligible to receive an incentive bonus in an
amount up to $50,000, based on goals determined by the CEO and Executive.
4.3 Benefits. Executive shall be entitled to participate and shall
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be included in all equity incentive, stock option, stock purchase, profit
sharing, savings, bonus, health insurance, life insurance, group insurance,
disability insurance, pension, retirement and other benefit plans or programs of
Employer now existing, or established hereafter, and offered to its executive
officers, subject to the terms and provisions thereof. Employer and Executive
acknowledge that the employee benefit plans and programs provided by Employer at
the commencement date of this Agreement will consist of: (i) fully paid health
and dental insurance benefits for Executive and his family members; (ii) long-
term disability insurance providing for a monthly benefit equal to 60% of
Executive's monthly Base Salary up to a maximum monthly benefit of $10,000 until
the earlier of Executive's death or attainment of age 65; (iii) term life
insurance providing a death benefit equal to 1 1/2 times Base Salary up to a
maximum death benefit of $250,000; and (iv) Employer's 401K Plan providing for a
matching contribution by Employer equal to 50% of the amount of Executive's
contribution up to a maximum contribution by Executive equal to the lesser of 6%
of Executive's Base Salary or $10,500 for calendar year 2000.
4.4 Automobile. Employer shall pay to Executive an automobile
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allowance of $1,000 per month, which will include the cost of leasing or
purchasing an automobile, insurance, operation and maintenance.
4.5 Vacation. Executive shall be entitled to three (3) weeks of
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vacation during each year, in addition to such paid holidays, personal days and
days of paid sick leave as are generally permitted to employees of Employer.
4.6 Expenses. Employer shall reimburse Executive for all actual,
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ordinary, necessary and reasonable expenses incurred by Executive in the course
of his performance of services hereunder. Executive shall properly account for
all such expenses.
4.7 Relocation and Interim Housing Allowance. Executive agrees to
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relocate to the King of Prussia, Pennsylvania area and, provided that Executive
does so, Employer shall upon presentation of acceptable proof of payment,
reimburse Executive for the following costs incurred by Executive in connection
with the relocation of Executive and Executive's family, in a total amount not
to exceed $50,000: (i) interim housing and automobile expenses incurred prior to
the relocation of Executive and Executive's family; (ii) moving expenses; (iii)
interim personal travel for Executive and Executive's family between Executive's
present home in Massachusetts and King
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of Prussia, Pennsylvania prior to Executive's relocation to the King of Prussia,
Pennsylvania area; and (iv) real estate commissions, transfer taxes and other
closing costs on the sale of Executive's current home in Massachusetts and the
purchase of a new home in Pennsylvania.
5. Termination.
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5.1 Termination by Death. If Executive dies, then this Agreement
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shall terminate immediately, and Executive's rights to compensation and benefits
hereunder shall terminate as of the date of death, except that Executive's
heirs, personal representatives or estate shall be entitled to any unpaid
portion of Executive's Base Salary, accrued benefits up to the date of
termination and any benefits which are to be continued or paid after the date of
termination in accordance with the terms of the corresponding benefit plans or
programs.
5.2 Termination by Disability. If Executive becomes Totally
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Disabled, Executive shall continue to receive all of his compensation and
benefits in accordance with Section 3 for a period of six (6) months following
the Onset of Disability (as defined in this Section 5.2). Any amounts due to
Executive under this Section 5.2 shall be reduced, dollar-for-dollar, by any
amounts received by Executive under any disability insurance policy or plan
provided to Executive by Employer. "Onset of Disability" means the first day on
which Executive shall be unable to perform the important duties of his
employment on a Full-time or part-time basis by reason of Injury or Sickness.
If Executive's Total Disability continues for more than six (6) consecutive
months after the Onset of Disability or for periods aggregating more than six
(6) months during any twenty-four (24) month period, then Employer may, upon
thirty (30) days prior written notice, terminate Executive's employment, and
Executive's rights to compensation and benefits hereunder, except that Executive
shall be entitled to any unpaid portion of his Base Salary, accrued benefits up
to the date of termination and any benefits which are to be continued or paid
after the date of termination in accordance with the terms of the corresponding
benefit plans or programs. For the purposes of this Section 5.2, the terms
"Totally Disabled", "Total Disability", "Injury", "Sickness" and "Full-time"
shall have the meanings given to those terms in the Company's Long Term
Disability Group Insurance Policy.
5.3 Termination for Cause. Employer may, upon thirty (30) days
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prior written notice to Executive, terminate Executive's employment, and
Executive's rights to compensation and benefits hereunder, for Cause (as defined
in this Section 5.3), except that Executive shall be entitled to any unpaid
portion of his Base Salary, accrued benefits up to the date of termination and
any benefits which are to be continued or paid after the date of termination in
accordance with the terms of the corresponding benefit plans or programs.
"Cause" shall exist if (i) Executive is grossly negligent or engages in willful
misconduct in the performance of his duties under this Agreement, (ii) Executive
is convicted of a crime constituting a felony under the laws of the United
States or any state thereof, or (iii) Executive willfully breaches this
Agreement in a material respect; but only if, in the case of clause (i) or
(iii), Executive is given written notice specifying, in reasonable detail, the
nature of the alleged neglect, misconduct, or breach and either (A) Executive
had a reasonable opportunity to take remedial action but failed or refused to do
so, or (B) an opportunity to take remedial action would not have been meaningful
or appropriate under the circumstances.
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5.4 Termination Without Cause. Employer may, upon thirty (30) days
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prior written notice to Executive, terminate Executive's employment, and
Executive's rights to compensation and benefits hereunder, for any reason
Employer deems appropriate, in which case Employer shall pay Executive, in
accordance with Employer's normal payroll practices, six (6) months of
Executive's Base Salary for the year in which such termination occurred and will
reimburse Executive for the costs specified in Section 4.7 in connection with
Executive's relocation outside of the greater Philadelphia metropolitan area in
an amount not to exceed $50,000.
5.5 Procedure Upon Termination. Upon termination of his employment,
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Executive shall promptly return to Employer all documents (including copies) and
other materials and property of Employer, or pertaining to its business,
including without limitation contracts, files, manuals, letters, reports and
records in his possession or control, no matter from whom or in what manner
acquired.
6. Discoveries. Executive shall communicate to Employer, in writing
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when requested, and preserve as confidential information of Employer, all
inventions, marketing concepts, software ideas and other ideas or designs
relating to the business of the Employer which are conceived, developed or made
by Executive, whether alone or jointly with others, at any time during the term
of Executive's employment with Employer, which relate to the business or
operations of Employer or which relate to methods, designs, products or systems
sold, leased, licensed or under development by Employer (such concepts, ideas
and designs are referred to as "Executive's Discoveries"). All of Executive's
Discoveries shall be Employer's exclusive property, and Executive shall, at
Employer's expense, sign all documents and take such other actions as Employer
may reasonably request to confirm its ownership thereof.
7. Nondisclosure. At all times after the date of this Agreement, except
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with Employer's express prior written consent or in connection with the proper
performance of services under this Agreement, Executive shall not, directly or
indirectly, communicate, disclose or divulge to any Person, or use for the
benefit of any Person, any confidential or proprietary knowledge or information,
no matter when or how acquired, concerning the conduct or details of the
business of Employer, including, but not limited to, (i) marketing methods and
strategies, pricing policies, product strategies and methods of operation, (ii)
software source code, software design concepts (including visual expressions and
system architecture), technical documentation and technical know-how, (iii)
budget and other non-public financial information, and (iv) expansion plans,
management policies and other business strategies and policies. For purposes of
this Section 7, confidential information shall not include any information which
is now known by the general public, which becomes known by the general public
other than as a result of a breach of this Agreement by Executive or which is
independently acquired by Executive.
8. Non-Competition. Executive acknowledges that Employer's business is
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highly competitive. Accordingly, for a period of one (1) year after the date
of such termination, except with Employer's express prior written consent,
Executive shall not, directly or indirectly, in any capacity, for the benefit of
any Person:
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(a) Communicate with or solicit any Person who is or during such
period becomes an employee, consultant, agent or representative of Employer or
its subsidiaries in any manner that interferes or might interfere with such
Person's relationship with Employer or any such subsidiary or in an effort to
obtain such Person as an employee, consultant, agent or representative of any
other Person; or
(b) Establish, own, manage, operate or control, or participate in the
establishment, ownership, management, operation or control of, or be a director,
officer, employee, agent or representative of, or be a consultant to, any Person
which conducts a business competitive with all or a material part of the
Business.
9. Consideration and Enforcement of Covenants. Executive expressly
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acknowledges that the covenants contained in Sections 6, 7 and 8 of this
Agreement ("Covenants") are a material part of the consideration bargained for
by Employer and, without the agreement of Executive to be bound by the
Covenants, Employer would not have agreed to enter into this Agreement.
Executive acknowledges that any breach by Executive of any of the Covenants will
result in irreparable injury to Employer for which money damages could not
adequately compensate. If there is such a breach, Employer shall be entitled,
in addition to all other rights and remedies which Employer may have at law or
in equity, to have an injunction issued by any competent court enjoining and
restraining Executive and all other Persons involved therein from continuing
such breach. The existence of any claim or cause of action which Executive or
any such other Person may have against Employer shall not constitute a defense
or bar to the enforcement of any of the Covenants. If Employer must resort to
litigation to enforce any of the Covenants which has a fixed term, then such
term shall be extended for a period of time equal to the period during which a
breach of such Covenant was occurring, beginning on the date of a final court
order (without further right of appeal) holding that such a material breach
occurred or, if later, the last day of the original fixed term of such Covenant.
If any portion of any Covenant or its application is construed to be invalid,
illegal or unenforceable, then the other portions and their application shall
not be affected thereby and shall be enforceable without regard thereto. If any
of the Covenants is determined to be unenforceable because of its scope,
duration, geographical area or similar factor, then the court making such
determination shall have the power to reduce or limit such scope, duration, area
or other factor, and such Covenant shall then be enforceable in its reduced or
limited form. The provisions of Sections 6, 7 and 8 shall survive the
termination of this Agreement.
10. Indemnification. Executive shall be indemnified by Employer, to the
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maximum extent permitted under applicable law and the certificate of
incorporation and bylaws of Employer, for all acts of Executive as an officer
and/or director of Employer and/or any other company which Executive serves as
an officer and/or director at the request of Employer.
11. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the substantive laws (and not the choice of laws rules) of the
Commonwealth of Pennsylvania applicable to contracts made and to be performed
entirely therein. Each of the parties irrevocably consents to service of
process by certified mail, return receipt requested, postage prepaid, to the
address at which such party is to receive notice in accordance herewith. Each
of the parties irrevocably consents to the jurisdiction of the state courts in
Xxxxxxxxxx County, Pennsylvania and
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the federal courts in the Eastern District of Pennsylvania in any and all
actions between the parties arising hereunder.
12. Legal Fees. In connection with the enforcement of any right or
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remedy, or the obtaining of any benefit, under this Agreement, the non-
prevailing party shall pay all reasonable legal fees and expenses of the
prevailing party.
13. Notices. All notices, consents or other communications required or
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permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (i) when delivered personally, (ii) three
business days after being mailed by first class certified mail, return receipt
requested, postage prepaid, or (iii) one business day after being sent by a
nationally recognized express courier service, postage or delivery charges
prepaid, to the parties at their respective addresses stated on the first page
of this Agreement. Notices may also be given by prepaid telegram or facsimile
and shall be effective on the date transmitted if confirmed within 24 hours
thereafter by a signed original sent in the manner provided in the preceding
sentence. Either party may change its address for notice and the address to
which copies must be sent by giving notice of the new addresses to the other
party in accordance with this Section 13, provided that any such change of
address notice shall not be effective unless and until received.
14. Prior Agreements. Executive represents to Employer (i) that there
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are no restrictions, agreements or understandings whatsoever to which Executive
is a party which would prevent or make unlawful his execution of this Agreement
or his employment hereunder, (ii) that Executive's execution of this Agreement
and Executive's employment hereunder do not constitute a breach of any contract,
agreement or understanding, oral or written, to which Executive is a party or
which Executive is bound, and (iii) that Executive has full legal right and
capacity to execute this Agreement and to enter into employment by Employer.
15. Parties in Interest. This Agreement is for the personal services of
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Executive and shall not be assignable by either party without the express prior
written consent of the other party; provided, however, Employer shall require
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of Employer to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer would be required to perform if no such succession had
taken place; provided, further, that no such assumption or agreement by such
successor shall relieve Employer of any of its obligations under this Agreement.
Subject to the provisions of Section 5 and this Section 15, this Agreement shall
inure to the benefit of and bind each of the parties hereto and the successors
and assigns of Employer and the personal representatives, estate and heirs of
Executive.
16. Entire Understanding. This Agreement sets forth the entire
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understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous, oral or written, express or
implied, agreements and understandings.
17. Amendment and Waiver. This Agreement shall not be amended, modified
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or terminated unless in writing and signed by Executive and a duly authorized
representative of Employer other than Executive. No waiver with respect to this
Agreement shall be enforceable
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unless in writing and signed by the parties against which enforcement is sought
(which, in the case of the Employer, must be a duly authorized representative of
Employer other than Executive). Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence by construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
18. Section Headings. Any headings preceding the text of any of the
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Sections or Subsections of this Agreement are inserted for convenience of
reference only, and shall neither constitute a part of this Agreement nor affect
its construction, meaning, or effect.
19. Definitions. As used herein, the term "Person" means any individual,
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sole proprietorship, joint venture, partnership, corporation, association,
cooperative, trust, estate, government body, administrative agency, regulatory
authority or other entity of any nature.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first stated above.
GLOBAL SPORTS, INC.
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxx Xxxxx
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Name: Xxxxxxx X. Xxxxx Xxxx Xxxxx
Title: Chairman and
Chief Executive Officer
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