Exhibit 10.20
EMPLOYMENT AGREEMENT
Parties: Global Sports, Inc.,
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a Delaware corporation ("Employer")
0000 Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, XX 00000
Jordan X. Xxxxxxx ("Executive")
000 Xxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Date: February 9, 2000
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Background: Employer and its subsidiaries are in the business of selling
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sporting goods over the Internet (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 February 23, 2000 and
ending on February 22, 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 Financial Officer and in such capacity shall have
supervision and control over, and responsibility for, the financial, accounting
and human resources 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 be an
executive officer of the Company and shall be a member of all committees of the
Company's executive officer level management. 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,
provided that Executive's principal place of
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employment shall at all times during the term hereof be located within 25 miles
of the border of the City of Philadelphia, PA.
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 $150,000, 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 such incentive bonus and/or
option grants as may be determined by the CEO, subject to approval of the Board.
Executive shall receive a cash bonus of $25,000 upon commencement of Executive's
employment.
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 25% of the amount of Executive's
contribution up to a maximum contribution by Executive equal to 6% of
Executive's Base Salary.
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
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upon presentation of acceptable proof of payment, reimburse Executive for the
following costs incurred by Executive in connection with Executive's relocation,
in a total amount not to exceed $30,000: (i) interim housing and automobile
expenses incurred prior to Executive's relocation; (ii) moving expenses; and
(iii) interim personal travel for Executive between Executive's present home in
Los Angeles, California and King of Prussia, Pennsylvania prior to Executive's
relocation to the King of Prussia, Pennsylvania area.
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 attend to the regular affairs of Employer on
a full time basis by reason of physical or mental incapacity, sickness or
infirmity. If Executive's 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.
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
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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.
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 upon such
termination a lump sum payment in an amount equal to 75% of Executive's annual
Base Salary for the year in which such termination occurred, and, for nine
months after such termination, Employer shall provide Executive with all
benefits (or substantially equivalent benefits) under any benefit plans or
programs of Employer applicable to Executive immediately prior to the
termination of his employment under this Section 5.4.
5.5 Termination by Executive. Subject to the next sentence of this
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Section 5.5, Executive may, upon ninety (90) days prior written notice to
Employer, resign his employment for any reason, in which case 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. Executive may, upon thirty (30) days prior written
notice to Employer, resign his employment if Executive is demoted, removed or
not re-elected to any of his positions or offices, there is a material
diminishment of Executive's title, position, responsibilities, or authorities,
Executive no longer reports to the CEO, or Xxxxxxx X. Xxxxx is no longer CEO of
the Company, in which case Employer shall pay Executive upon such termination a
lump sum payment in an amount equal to 75% of Executive's annual Base Salary for
the year in which such termination occurred, and, for nine months after such
termination, Employer shall provide Executive with all benefits (or
substantially equivalent benefits) under any benefit plans or programs of
Employer applicable to Executive immediately prior to the termination of
Executive's employment under this sentence of Section 5.5; provided, however,
that if Executive determines to terminate his employment because Xxxxxxx X.
Xxxxx is no longer CEO of the Company, Executive must do so within ninety (90)
days after Xxxxxxx X. Xxxxx ceases to be CEO of the Company.
5.6 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 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.
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
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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:
(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 derives more than 50% of its revenues from the sale of sporting goods and
recreational products over the internet, provided, however, that this Section
8(b) shall only be applicable if Employer terminates Executive's employment with
Cause or Executive resigns his employment for any reason (other than as set
forth in the second sentence of Section 5.5).
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
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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 the federal courts in the Eastern District
of Pennsylvania in any and all actions between the parties arising hereunder.
12. Legal Fees. Employer shall pay the reasonable legal fees and expenses
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of Executive in connection with the negotiation and execution of this Agreement
up to a maximum amount of $5,000. In connection with the enforcement of any
right or 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
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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 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
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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/ Jordan X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxx Jordan X. Xxxxxxx
Title: President
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