1
Exhibit 10.22
February 5, 1998
Xx. Xxxxxx X. X'Xxxx
000 Xxxxxxxxx Xxxxxxx
Xxxx Xxxx, Xxxx 00000
Dear Xxx:
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 October 25, 1994.
1. TERM.
(a) Subject to the terms and conditions set forth below, the
Club agrees to employ you as Vice President for Baseball Operations and
Assistant General Manager of the General Partner 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
$450,000.00 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 1, 2001. If the Club exercises this option, the Club
will notify you on or before September 30, 2002 whether or not you will
be promoted to Executive Vice President/General Manager as of January
1, 2003. If you are to be promoted to the position of Executive Vice
President/General Manager as of January 1, 2003, your employment with
the Club shall continue in accordance with the terms and conditions of
this Contract. If the Club declines to promote you to the position of
Executive Vice President/General Manager at that time, you may (1)
during the period commencing on October 1, 2002 and ending on December
1, 2002, seek other employment opportunities and (2) terminate this
Contract as of December 31, 2002 by providing written notice to the
Club no later than December 1, 2002. If you do not elect to terminate
this Contract, your
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Page 2
employment will continue in accordance with the terms and conditions of
this contract.
(c) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2004 at a salary of
$500,000.00 for 2004. Such option may be exercised by written notice
personally delivered or mailed to the Club's offices on or before
December 1, 2002. If the Club exercises this option and you have not
been previously promoted to the position of Executive Vice
President/General Manager, the Club will notify you on or before
September 30, 2003 whether or not you will be promoted to Executive
Vice President/General Manager as of January 1, 2004. If you are to be
promoted to the position of Executive Vice President/General Manager as
of January 1 2004, your employment with the Club shall continue in
accordance with the terms and conditions of this Contract. If the Club
declines to promote you to the position of Executive Vice
President/General Manager at that time, you may (1) during the period
commencing on October 1, 2003 and ending on December 1, 2003, seek
other employment opportunities and (2) terminate this Contract as of
December 31, 2003 by providing written notice to the Club no later than
December 1, 2003. If you do not elect to terminate this Contract, your
employment will continue in accordance with the terms and conditions of
this contract.
(d) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2005 at a salary of
$525,000.00 for 2005. Such option may be exercised by written notice
personally delivered or mailed to the Club's offices on or before
December 1, 2003. If the Club exercises this option and you have not
been previously promoted to the position of General Manager, the Club
will notify you on or before September 30, 2004 whether or not you will
be promoted to Executive Vice President/General Manager as of January
1, 2005. If you are to be promoted to the position of Executive Vice
President/General Manager as of January 1 2005, your employment with
the Club shall continue in accordance with the terms and conditions of
this Contract. If the Club declines to promote you to the position of
Executive Vice President/General Manager at that time, you may (1)
during the period commencing on October 1, 2004 and ending on December
1, 2004, seek other employment opportunities and (2) terminate this
Contract as of December 31, 2004 by providing written notice to the
Club no later than December 1, 2004. If you do not elect to terminate
this Contract, your employment will continue in accordance with the
terms and conditions of this contract.
(e) The Club shall have the unilateral option to extend the
term of this Agreement through December 31, 2006 at a salary of
$550,000.00 for 2006. Such option may be exercised by written notice
personally delivered or mailed to the Club's offices on or before
December 1, 2004. If the Club
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exercises this option and you have not been previously promoted to the
position of Executive Vice President/General Manager, the Club will
notify you on or before September 30, 2005 whether or not you will be
promoted to Executive Vice President/General Manager as of January 1,
2006. If you are to be promoted to the position of Executive Vice
President/General Manager as of January 1 2006, your employment with
the Club shall continue in accordance with the terms and conditions of
this Contract. If the Club declines to promote you to the position of
Executive Vice President/General Manager at that time, you may (1)
during the period commencing on October 1, 2005 and ending on December
1, 2005, seek other employment opportunities and (2) terminate this
Contract as of December 31, 2005 by providing written notice to the
Club no later than December 1, 2005. If you do not elect to terminate
this Contract, your employment will continue in accordance with the
terms and conditions of this contract.
(f) Your salary shall be payable each calendar year in
twenty-four equal semi-monthly installments.
2. SALARY.
(a) SALARY. Your salary as Vice President for Baseball
Operation and General Manager 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
$300,000.00 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 - $450,000
January 1, 2004 to December 31, 2004 - $500,000
January 1, 2005 to December 31, 2005 - $525,000
January 1, 2006 to December 31, 2006 - $550,000
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(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 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 10)
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, in ten installments
commencing on the first business day of January of the calendar year
following the earlier of (a) the date of your death or permanent
disability or (b) the later of (i) termination of your employment with
the Club or (ii) your fifty-fifth (55) birthday. The payments will be
computed in accordance with the following schedule:
Percentage of
Fair Market Value
Payment of Deferred
NUMBER COMPENSATION ACCOUNT
1 10%
2 11.11%
3 12.5%
4 14.28%
5 16.67%
6 20%
7 25%
8 33.33%
9 50%
10 100%
(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
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February 5, 1998
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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.
(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
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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.
3. LIFE INSURANCE. The Club understands that you may acquire life
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.
Reimbursement will be made with respect to the option years only if the
option for such year has been exercised.
4. 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 one-half (50%) of a 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. The amount of the bonus will be increased to
100% of a full player's share for any Championship Season in which you are the
Executive Vice President/General Manager of the Club.
5. 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.
6. 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 expenses incurred in connection
with your use of an automobile which will be provided by the Club for your
exclusive use.
7. JOB DESCRIPTION. During the term of your employment, you shall
faithfully perform the duties and have the responsibilities of Assistant General
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Manager and Vice-President for Baseball Operations of the Club, subject to the
control and direction of the President and Chief Executive Officer, if any, the
Chairman of the Board, the Board of Directors, the Executive Vice President and
General Manager of the Club and its General Partner. You agree to devote your
full time, energies, talent, and best efforts exclusively to your duties as
Assistant General Manager and Director of Baseball Operations 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; provided
however, if the Club does not exercise an option to extend the term of the
Contract as described in Paragraph 1, you shall be entitled to discuss, during
the remaining term of this Contract, such other employment opportunities that
may be available to you following the end of the term of this Contract.
8. 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.
9. 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 9, 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 of the General Partner of the Club,
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 9, 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.
10. 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 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.
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11. 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.
12. 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).
13. 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.
14. INJUNCTIVE AND EQUITABLE RELIEF. Because during the course of 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.
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15. 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.
16. 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.
17. 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.
Very truly yours,
CLEVELAND INDIANS BASEBALL
COMPANY LIMITED PARTNERSHIP
By: Its General Partner, Cleveland
Baseball Corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
ACCEPTED:
/s/ Xxxxxx X. X'Xxxx
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Date: February 5, 1998
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