Exhibit 10.1
EMPLOYMENT AGREEMENT
Parties: Global Sports, Inc.,
a Delaware corporation ("Employer")
0000 Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, XX 00000
Xxxxxx Xxxxxxx ("Executive")
Date: April 23, 2002
Background: Employer and its subsidiaries are in the business of developing and
operating e-commerce businesses for retailers, branded manufacturers, media
companies, television networks and professional sports organizations (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 Executive
accepts such employment, subject to all of the terms and conditions of this
Agreement, for a term beginning on April 23, 2002 and ending on December 31,
2005, unless sooner terminated in accordance with other provisions hereof.
2. Position and Duties. Executive will serve as Executive Vice President,
Merchandising, and in such capacity will have supervision and control over, and
responsibility for, formulating and directing Employer's overall buying and
merchandising strategy and overseeing the execution of all buying and
merchandising programs. Executive will report to, and be subject to the
direction of, Employer's Chief Executive Officer. Executive will 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 Employer's
Chief Executive Officer or Board of Directors. Executive will 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. Compensation, Benefits and Expenses.
3.1 Base Salary. Employer will pay to Executive a minimum annual base
salary ("Base Salary") of Two Hundred Sixty-two Thousand Five Hundred Dollars
($262,500). The Base Salary will be payable in accordance with Employer's normal
payroll practices, subject
to payroll deductions and required withholdings. The Base Salary will be
reviewed annually by Employer and will be subject to such annual increases as
may be agreed upon by Employer's Chief Executive Officer.
3.2 Bonuses. In addition to his Base Salary, for each year of this
Agreement, Executive will be eligible to receive an incentive bonus in an amount
to be determined by Employer's Chief Executive Officer.
3.3 Benefits. Executive will be entitled to participate and will 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 management level
personnel, 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 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 annual 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 annual Base Salary or $10,500 for calendar year 2001. Executive
acknowledges that Executive's participation in the employee benefit plans or
programs of Employer are subject to the terms and conditions of such plan or
programs and that Employer may change its plans or programs, including those
referred to in the prior sentence, at any time. In addition, Employer will
provide Executive with the following other benefits at Employer's expense: (i)
automobile allowance not the exceed $500 per month, which includes automobile
insurance, and (ii) cell phone and cell phone account.
3.4 Vacation. Executive will accrue three (3) weeks of paid vacation
per year, in addition to such paid holidays, personal days and days of paid sick
leave as are generally permitted to employees of Employer.
3.5 Expenses. Employer will reimburse Executive for all actual,
ordinary, necessary and reasonable expenses incurred by Executive in the course
of his performance of services hereunder. Executive will properly account for
all such expenses.
4. Termination.
4.1 Termination by Death. If Executive dies, then this Agreement will
terminate immediately, and Executive's rights to compensation and benefits
hereunder will terminate as of the date of death, except that Executive's heirs,
personal representatives or estate will be entitled to any unpaid portion of
Executive's salary and 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.
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4.2 Termination by Disability. If, as a result of Injury or Sickness,
Executive is unable to perform the essential duties of his employment on a
full-time basis, Executive will continue to receive his Base Salary and the
benefits and vacation provided for in Sections 3.3 and 3.4 (to the extent
Executive continues to be eligible therefor under the terms of such benefit
plans or programs) for a period of one hundred eighty (180) days following the
Onset of Disability (as defined in this Section 4.2). Any amounts due to
Executive under this Section 4.2 will be reduced, dollar-for-dollar, by any
amounts received by Executive under any disability insurance policy or plan
provided to Executive and paid for by Employer. "Onset of Disability" means the
first day on which Executive is unable to perform the essential duties of his
employment on a full-time basis by reason of Injury or Sickness. If Executive's
inability to perform the essential duties of his employment on a full-time basis
continues for more than one hundred eighty (180) days after the Onset of
Disability or for periods aggregating more than one hundred eighty (180) days
during any twelve (12) month period, then Employer may, upon written notice to
Executive, terminate Executive's employment, and Executive's rights to
compensation and benefits hereunder, except that Executive will be entitled to
any unpaid portion of his Base Salary and 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 4.2, the following terms will have
the following meanings: (i) "Injury" means bodily impairment resulting directly
from an accident and independent of all other causes; (ii) "Sickness" means an
illness (including Mental Illness, as defined below), disease, or pregnancy,
including complications of pregnancy, which require treatment by a Physician;
(iii) "Mental Illness" means any psychological, behavioral or emotional disorder
or ailment of the mind, including physical manifestations of psychological,
behavioral or emotional disorders, but excluding demonstrable, structural brain
damage; and (iv) "Physician" means a practitioner of the healing arts, which the
Employer's disability insurance carrier is required by law to recognize, who is
properly licensed, and practicing within the scope of that license.
4.3 Termination for Cause. Employer may, upon written notice to
Executive, terminate Executive's employment, and Executive's rights to
compensation and benefits hereunder, for Cause (as defined in this Section 4.3),
except that Executive will be entitled to any unpaid portion of his salary and
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" will exist if (i) Executive
is guilty of gross negligence or willful misconduct in the performance of his
duties for the Company, (ii) breaches or violates, in a material respect, any
agreement between the Executive and the Company or any of the Company's policy
statements regarding conflicts-of-interest, xxxxxxx xxxxxxx or confidentiality,
(iii) commits a material act of dishonesty or breach of trust, (iv) acts in a
manner that is inimical or injurious, in a material respect, to the business or
interests of the Company, or (v) is convicted of a felony.
4.4 Termination Without Cause. Employer may, upon thirty (30) days
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
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Employer will pay to Executive his Base Salary, in accordance with Employer's
normal payroll practices, for six (6) months after such termination.
4.5 Procedure Upon Termination. Upon termination of his employment,
Executive will promptly return to Employer all documents (including copies) and
other materials and property of Employer, or pertaining to its business,
including without limitation customer and prospect lists, contracts, files,
manuals, letters, reports and records in his possession or control, no matter
from whom or in what manner acquired.
5. Discoveries. Executive will communicate to Employer, in writing 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 will be
Employer's exclusive property, and Executive will, at Employer's expense, sign
all documents and take such other actions as Employer may reasonably request to
confirm its ownership thereof.
6. Nondisclosure. At all times after the date of this Agreement, except
with Employer's express prior written consent or in connection with the proper
performance of services under this Agreement, Executive will 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 6, confidential information will 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.
7. Non-Competition. Executive acknowledges that Employer's business is
highly competitive. Accordingly, for a period of one (1) year after the date of
the termination of Executive's employment with the Company, or, if Executive is
terminated without Cause, for a period of six (6) months after the date of such
termination, except with Employer's express prior written consent, Executive
will not, directly or indirectly, in any capacity, for the benefit of any
Person:
(a) Communicate with or solicit any Person who is or during such period
becomes an employee, consultant, agent or representative of Employer or any of
its subsidiaries in any manner which interferes or might interfere with such
Person's relationship with Employer
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or any such subsidiary, or in an effort to obtain any such employee, consultant,
agent or representative as an employee, consultant, agent or representative of
any other Person.
(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 any material part of the
Business.
8. Consideration and Enforcement of Covenants. Executive expressly
acknowledges that the covenants contained in Sections 5, 6 and 7 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 will 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 will 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 will 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 will not
be affected thereby and will 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
will have the power to reduce or limit such scope, duration, area or other
factor, and such Covenant will then be enforceable in its reduced or limited
form. The provisions of Sections 5, 6 and 7 will survive the termination of this
Agreement.
9. Applicable Law. This Agreement will be governed by and construed in
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 the federal courts in the Eastern District
of Pennsylvania in any and all actions between the parties arising hereunder.
10. Notices. All notices, consents or other communications required or
permitted to be given under this Agreement must be in writing and will be deemed
to have been duly given (i) when delivered personally, (ii) three (3) business
days after being mailed by first class certified mail, return receipt requested,
postage prepaid, or (iii) one (1) business day after being sent by a
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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 will be effective on the date transmitted if confirmed within twenty-four
(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 10, provided that any such
change of address notice will not be effective unless and until received.
11. Prior Agreements. Executive represents to Employer (i) that there 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. All
prior employment agreements between Executive and Employer are hereby terminated
as of the date hereof as fully performed on both sides.
12. Parties in Interest. This Agreement is for the personal services of
Executive and will not be assignable by Executive without the express prior
written consent of Employer. Subject to the provisions of Section 4 and this
Section 12, this Agreement will 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.
13. Entire Understanding. This Agreement sets forth the entire
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.
14. Amendment and Waiver. This Agreement will not be amended, modified 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 will be enforceable unless in writing and signed by the party 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 will operate as a waiver thereof, nor will 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 will any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy, power
or privilege with respect to any other occurrence.
15. Section Headings. Any headings preceding the text of any of the
Sections or Subsections of this Agreement are inserted for convenience of
reference only, and will neither constitute a part of this Agreement nor affect
its construction, meaning, or effect.
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16. Definitions. As used herein, the term "Person" means any individual,
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/ Xxxxxx Xxxxxxx
---------------------------- ------------------------
Xxxxxxx X. Xxxxx XXXXXX XXXXXXX
Chairman, President and
Chief Executive Office
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