EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Agreement is dated as of February 1, 1997 (the "Agreement"), by and
between The Score Board, Inc., a New Jersey corporation with offices at 0000
Xxx Xxxxxxxx Xxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 ("Employer"), and Xxxx X.
Xxxxx, residing at 000 Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Employee").
W I T N E S S E T H:
WHEREAS, Employer engages in the manufacture, distribution and marketing of
sports and entertainment memorabilia, trading cards and other products; and
WHEREAS, Employee has experience and expertise in corporate, marketing,
operational and financial matters; and
WHEREAS, Employee desires to accept employment by Employer upon the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth and for other good and valuable consideration, the parties
hereto, intending to be legally bound hereby, agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and conditions hereinafter set forth,
effective February 1, 1997.
2. TERM. The term of this Agreement shall commence February 1, 1997 and
expire January 31, 1999 (the "Initial Term"). After the Initial Term, this
Agreement will automatically renew for consecutive one-year terms (each one-year
term being subject to this renewal provision and being collectively referred to
herein as the "Renewal Term") unless either party delivers to the other written
notice of its desire not to renew at least thirty (30) days prior to the end of
the then current contract year. The Initial Term and the Renewal Term, if any,
are hereinafter referred to collectively as the "Term."
3. DUTIES.
(a) Employee is hereby employed as President and Chief Operating Officer of
Employer. Employee's powers and duties shall be as may be determined by
Employer's Board of Directors, to whom Employee will report, and as are
generally consistent with Employer's Bylaws and the capacities in which Employee
serves.
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(b) During the term of this Agreement, Employee shall devote as much time
as is reasonably necessary in the performance of his duties, and faithfully and
diligently serve and further the interests of Employer according to the best of
his ability. Employee may, however, continue to act as Chairman of The
Outsourcing Partnership, L.L.C. ("Outsourcing"), subject to the following
conditions: (i) Employee will not have any day-to-day responsibility for the
management of Outsourcing; (ii) Employee will not be a full-time employee of,
nor will he receive any salary or other remuneration based on services performed
from, Outsourcing; and (iii) any action taken by Employee in his role as
Chairman of Outsourcing will not conflict with or detract from the performance
of his duties to Employer. Employee covenants and agrees that he will abide by
the foregoing conditions, and further covenants and agrees that if either he or
Outsourcing is presented with a business opportunity in Employer's line of
business, Employee will immediately disclose such opportunity to both the Chief
Executive Officer and General Counsel of Employer. Employer shall have the
opportunity to evaluate such opportunity and, in its sole discretion, determine
whether or not Employee or Outsourcing may pursue the opportunity.
4. COMPENSATION.
(a) SALARY. For all services rendered to Employer by Employee during the
Initial Term of this Agreement, Employer shall pay Employee an annual salary of
$210,000, such amount to be payable in accordance with Employer's practices for
payment of salaries to its employees. Employee's performance will be reviewed
upon conclusion of the first year of the Initial Term; Employer may, in the
exercise of its reasonable business judgment based upon Employee's performance,
increase Employee's salary for the second year of the Initial Term. During the
Renewal Term of this Agreement, if any, the annual salary shall be as may be
mutually agreed upon by the parties by written amendment to this Agreement.
(b) STOCK OPTIONS.
(i) Employer hereby grants to Employee a non-incentive stock option
to purchase 200,000 shares of Employer's Common Stock pursuant to Employer's
1992 Stock Incentive Plan, as amended (the "Plan"). The purchase price of the
shares of Common Stock underlying the option shall be $2.00. The term of the
option will expire January 31, 2002. The option will become exercisable at the
times and in the installments set forth below:
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Number of Shares
Date Vesting on Said Date
---- --------------------
February 1, 1998 50,000
February 1, 1999 50,000
February 1, 2000 50,000
February 1, 2001 50,000
(ii) On June 1, 1997, Employer shall grant to Employee a non-
incentive stock option to purchase 50,000 shares of Employer's Common Stock
pursuant to the Plan at a purchase price equal to the closing price per share of
Employer's Common Stock, as reported by the National Association of Securities
Dealers Automated Quotation System/National Market System ("NASDAQ"), on such
date, provided that Employee's employment has not previously been terminated.
The term of the option will expire June 1, 2002. The option will become
exercisable at the times and in the installments set forth below:
Number of Shares
Date Vesting on Said Date
---- --------------------
June 1, 1998 12,500
June 1, 1999 12,500
June 1, 2000 12,500
June 1, 2001 12,500
(iii) On June 1, 1998, Employer shall grant to Employee a non-
incentive stock option to purchase 50,000 shares of Employer's Common Stock
pursuant to the Plan at a purchase price equal to the closing price per share of
Employer's Common Stock, as reported by NASDAQ, on such date, provided that
Employee's employment has not previously been terminated. The term of the
option will expire June 1, 2003. The option will become exercisable at the
times and in the installments set forth below:
Number of Shares
Date Vesting on Said Date
---- --------------------
June 1, 1999 12,500
June 1, 2000 12,500
June 1, 2001 12,500
June 1, 2002 12,500
Except as otherwise provided herein, vesting of all options after the Initial
Term is subject to the renewal of this Agreement for the appropriate Renewal
Terms. If this Agreement is not renewed but Employee remains an employee of
Employer, the options granted hereunder will vest and be exercisable in
accordance with the Plan.
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Any options not previously exercised will become void upon, and will not be
exercisable after, termination of Employee's employment pursuant to Section 8(c)
or termination of this Agreement by Employee pursuant to Section 8(f) hereof.
In the event that Employee's employment is terminated pursuant to Sections
8(a), (b), (d) or (e), or by Employer pursuant to Section 8(f), all options that
have not vested as of the date of termination shall be immediately canceled, and
shall not be exercisable; those options that have vested shall be exercisable in
accordance with the Plan.
If a Change of Control (as defined below), occurs prior to February 1,
1998, the option granted under paragraph 4(b)(i) will immediately vest and be
exercisable with respect to the shares otherwise vesting on February 1, 1998 and
February 1, 1999. If a Change of Control occurs on or after February 1, 1998,
all options granted or to be granted under paragraphs 4(b)(i), (ii) and (iii)
will immediately vest and be exercisable. A "Change of Control" is deemed to
have taken place if (i) any person or group of affiliated or related persons
acting in concert, or any corporation, partnership or other entity (hereinafter
referred to as a "Party") becomes the beneficial owner (as defined below) of
shares of Common Stock or voting securities of Employer having in excess of 20%
and less than 30% of the total number of votes that may be cast for the election
of directors, unless the Board of Directors, within twenty (20) days from the
date such Party becomes such beneficial owner, determines that the purpose of
such ownership is investment only without any intention of influencing the
management, business or affairs of Employer; or (ii) a Party becomes the
beneficial owner of shares of Employer having 30% or more of the total number of
votes that may be cast for the election of directors; or (iii) as the result of,
or in connection with, any cash tender or exchange offer, merger or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions, those persons who were directors of Employer
before the transaction and were otherwise unaffiliated with any Party to the
transaction other than Employer shall cease to constitute a majority of the
Board of Directors of Employer or any successor to Employer. For purposes
hereof, the terms "beneficial owner" or "beneficial ownership" means the actual
ownership of shares of Common Stock or voting securities of Employer, with no
consideration given to any shares of Common Stock or voting securities issuable
upon exercise, conversion or exchange of any other securities.
(c) BENEFITS. Employee shall be entitled to participate in and to receive
such health and medical insurance and other benefits, including but not limited
to any pension, profit sharing, disability or similar plan now existing or
established hereafter (to the extent that he is eligible under the general
provisions thereof), as are generally made available to employees of Employer.
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(d) VACATIONS. Employee shall be entitled to three (3) weeks paid vacation
during each year of the Term. Vacations shall be scheduled at a time which is
mutually convenient to Employer and Employee. Unused vacation days will be
forfeited and will not accrue to subsequent years of the Term.
(e) REIMBURSEMENT OF EXPENSES. Employee shall be entitled to reimbursement
of all reasonable business expenses actually and properly incurred by Employee
in the discharge of Employee's duties hereunder, following submission to
Employer of satisfactory documentation therefor.
(f) DISCRETIONARY COMPENSATION. In addition to the foregoing, Employee
shall be entitled to participate, to the extent determined by Employer's Board
of Directors, in such officer/executive bonus plans as may be adopted by
Employer.
5. CONFIDENTIALITY. Employee agrees that any and all knowledge and
information concerning Employer, its affairs, its subsidiaries and affiliates
and their affairs obtained by Employee during the course of Employee's
employment by Employer shall be deemed Confidential Information (as hereinafter
defined) which shall be held inviolate, and that Employee will not disclose the
same to any other persons, including but not limited to competitors of Employer,
at any time during or after the Term. Employee agrees, upon expiration or
earlier termination of this Agreement, to immediately surrender and deliver to
Employer all books, forms, records, designs, contracts and all other papers and
writings relating to Employer and all other property belonging to Employer, it
being understood and agreed that the same are the sole property of Employer.
As used herein, the term "Confidential Information" means:
(a) any data or information that is sensitive material and not generally
known to the public, including but not limited to trade secrets, contracts with
third parties, sales and marketing information, financial data, lists of actual
or potential customers, customer account records, training and operations
materials and memoranda, personnel records, pricing and financial information
relating to the business, accounts, customers, clients, agents and suppliers of
any of the foregoing, possible acquisitions, mergers and/or business
combinations, and internal performance results relating to past, present or
future business activities of Employer, its subsidiaries and affiliated
companies and the customers, clients, agents and suppliers of any of the
foregoing; and
(b) any other information designated "Confidential" by Employer, its
subsidiaries and affiliated companies.
Employee's obligations under this Section 5 shall survive expiration or
termination of this Agreement.
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6. RESTRICTIVE COVENANTS.
(a) IN-TERM. Except as provided in Section 3(b), during the term of
Employee's employment Employee shall not, directly or indirectly, alone or as a
member of a partnership, or as an officer, director, stockholder, partner,
employee or agent of any other corporation or entity, be engaged in or concerned
with any other duties or pursuits whatsoever requiring Employee's personal
services, nor shall Employee actively engage in or acquire any passive interest
in any business which may be deemed to be directly competitive with the type of
business conducted by Employer.
(b) AFTER-TERM. For a period of one (1) year following the Term (or the
earlier termination of this Agreement), Employee shall not, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or be
connected in any manner with the ownership, management, operation or control of
any business that: (i) enters into contracts, agreements or understandings with
individual athletes for the purpose of acquiring autographs or the right or
license to commercially exploit the indicia of such athletes on trading cards,
prepaid telephone calling cards or any other collectible product; (ii)
manufactures prepaid telephone calling cards or trading cards; or (iii) offers
for sale, sells or distributes trading cards, prepaid telephone calling cards or
autographed memorabilia.
7. ADHERENCE TO COMPANY POLICIES. Employee recognizes Employer's policy
to refrain from accepting from, or soliciting, offering or paying to, any of
Employer's customers or suppliers, their agents or representatives, any monies,
services or other consideration ("Prohibited Activities") for the purpose of (a)
selling or offering to sell product or (b) obtaining or seeking to obtain
product or components comprising products sold by Employer, other than pursuant
to legal contracts and arrangements entered into by Employer. Employee
recognizes that, in furtherance of this policy, Employer prohibits employees,
representatives and affiliates from conducting any Prohibited Activities.
Employee hereby agrees to adhere to and promote adherence to this policy, and to
inform Employer of any incidents and activities in violation of this policy.
8. TERMINATION. This Agreement, and Employee's employment hereunder,
shall terminate:
(a) upon expiration of the Term described in Section 2 hereof; or
(b) upon the mutual written agreement of Employer and Employee; or
(c) at any time for "cause," which shall mean (i) any material breach by
Employee of his obligations hereunder, including without limitation his
obligations under Sections 5, 6 or 7 of this Agreement, and (ii) conduct of
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Employee involving any type of disloyalty to Employer or willful misconduct with
respect to Employer, including without limitation fraud, embezzlement or
dishonesty in the course of his employment, or conviction of a felony or a crime
involving moral turpitude;
(d) upon permanent disability (Employee's failure to perform the duties
assigned to him for a period of 90 consecutive days or 90 days during any
consecutive 365 day period) of Employee;
(e) upon the death of Employee; or
(f) thirty days (30) after delivery of written notice by one party to the
other of its intention to terminate this Agreement.
Termination for any reason set forth in subparagraphs (a) through (d) above
shall be effected by written notice thereof delivered by the appropriate party
and shall be effective as of the date of termination specified in such notice.
Upon termination of this Agreement pursuant to subparagraphs (a) through
(d), neither party shall have any further obligation to the other, except that
(i) Employee shall remain bound by the provisions of Sections 5 and 6 hereof and
(ii) Employer shall be obligated to pay Employee any base salary accrued up to
the date of termination. Upon termination of this Agreement pursuant to
subparagraph (e), Employer shall be obligated to pay to Employee's estate any
base salary accrued up to the date of termination. Upon termination of this
Agreement pursuant to subparagraph (f), neither party shall have any further
obligation to the other, except that: (i) Employee shall remain bound by the
provisions of Sections 5 and 6 hereof; (ii) Employer shall be obligated to pay
Employee any base salary accrued up to the date of termination; and (iii) if the
Agreement was terminated by Employer (and not by Employee), Employer shall be
obligated to pay Employee an amount equal to three month's base salary, such
amount to be payable over a three month period in accordance with Employer's
practices for payment of salaries to its employees.
9. REMEDIES FOR BREACH OF CONFIDENTIALITY OR RESTRICTIVE COVENANTS. In
recognition of the special and unique nature of the services to be rendered by
Employee under this Agreement, and the nature of the Confidential Information to
which Employee will gain access during the Term, notwithstanding any other
provision of this Agreement, in the event of Employee's actual or threatened
breach of the provisions of Section 5, 6 or 7 of this Agreement, Employer shall
be entitled to seek an injunction restraining Employee therefrom. Nothing in
this Section 9 shall be construed as prohibiting Employer from pursuing any
other available legal, equitable and administrative remedies for such breach or
threatened breach, including, without limitation, the recovery of damages from
Employee.
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10. NOTICES. Any notice or other written instrument required or permitted
to be given, made or sent hereunder shall be in writing, signed by the party
giving or making the same, and shall be deemed delivered on the date sent if
hand-delivered or one day after the date sent by registered or certified mail or
through courier delivery service to the other party hereto at the address set
forth on the first page of this Agreement. Notices to Employer should be sent
to the attention of the General Counsel. Any party hereto shall have the right
to change the place to which any such notice or writing shall be sent by a
similar notice sent in like manner to the other party hereto.
11. WAIVER OF BREACH. The waiver of either party of a breach by the other
party of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by such party. No waiver shall be valid unless
in writing and signed by an authorized officer of Employer or by Employee, as
applicable.
12. ASSIGNMENT. Employer and Employee acknowledge that the relationship
established hereby is unique and personal and that neither Employer nor Employee
may assign or delegate any of their respective rights and/or obligations
hereunder without the prior written consent of the other party.
13. INVALID PROVISION(S). If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the Term, such provision shall be fully severable and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision, but shall continue
to be legal, valid and enforceable, and the parties hereto agree to be bound by
and perform the same, as thus modified.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
15. GOVERNING LAW; JURISDICTION; VENUE; DISPUTES. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New
Jersey, without regard to the conflicts of laws provisions thereof. Employer
and Employee agree that any action or proceeding arising out of or relating to
this Agreement may be brought only in a court located in Camden County, New
Jersey, and both parties agree to submit to and accept the jurisdiction and
venue of the aforesaid courts.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, between the parties hereto. This Agreement may not be changed, modified or
amended, except by an agreement in writing signed by the parties hereto.
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17. NO OTHER REPRESENTATIONS. No representation, promise or inducement
has been made by any party that is not embodied in this Agreement, and no party
shall be bound by or liable for any alleged representation, promise or
inducement not so set forth.
18. CAPTIONS. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of February 1, 1997.
THE SCORE BOARD, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------
Xxxxx X. Xxxxx
Chairman, The Score Board, Inc.
Compensation Committee
/s/ Xxxx X. Xxxxx
-------------------------
XXXX X. XXXXX
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