EXHIBIT 10.4
XXX XXXXXX'X EMPLOYMENT AGREEMENT WITH SDSDC
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered this 17th day of July,
2000, in San Diego County, San Diego, California, by and between SAN DIEGO
SOCCER DEVELOPMENT CORPORATION, a California corporation, hereinafter referred
to as "Employer" or "Parent Company," and XXX XXXXXX, hereinafter referred to as
"Employee."
RECITALS AND DEFINITIONS
A. WHEREAS, Employer is a publicly traded entity on the over the
counter pink sheets and is primarily in the business of developing and
promoting soccer-related businesses in the United States;
B. WHEREAS, Employer currently owns, in its entirety, a second
division professional soccer franchise in the United Soccer Leagues, Inc.
(hereinafter referred to as the "USL") called the San Diego Flash;
C. WHEREAS, Employee, in his capacity as founder, has been acting
as Chief Executive Officer and President of San Diego Soccer Development
Corporation since October of 1998;
D. WHEREAS, Employer, in its overall mission to expand its soccer
related holdings and business development is contemplating the acquisition
of two additional second division professional franchises, also part of the
USL and acquiring the entirety of the Riverside County Elite (hereinafter
referred to as the "Acquisition and Merger");
E. WHEREAS, after the merger of the above referenced professional
soccer franchises by San Diego Soccer Development Corporation, each
franchise will be owned and operated as a separate California corporation.
Each franchise corporation will be a wholly
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owned subsidiary of San Diego Soccer Development Corporation, which will
change its name to reflect its national presence and its status as the
parent holding corporation "Parent Company" for the four franchise
corporations. The name "Soccer Development Corporation of America" shall
be the name of the new holding corporation that will own and operate the
San Diego Flash franchise;
F. WHEREAS, based on the anticipated changes to the corporate
structure of the Parent Company, a restructuring to the management of the
Parent Company has been agreed to per Unanimous Written Consent of the
Directors on this same date of June 1, 2000. The Parent Company/Employer
now desires to formalize the employment of Xxx Xxxxxx by entering this
employment agreement ("Agreement") that reflect the changes in the
management structure as implemented by the Board of Directors.
G. WHEREAS, Employee agrees to be employed by Employer throughout
the term of this agreement and further desires to formalize the management
structure as implemented by the Board of Directors.
AGREEMENT
NOW, THEREFORE, by and in consideration of the mutual covenants and
promises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Employer and Employee agree as follows:
EMPLOYMENT TITLE: Employer employs Employee on the terms and conditions stated
in this Agreement to perform the functions as Chief Executive Officer
("CEO") and President from June 1, 2000 through the earlier date of
November 30, 2000, or the effective date of the Acquisition and Merger.
At which time Xxx Xxxxxx shall be given the title of President of the
subsidiary corporation that will operate the San Diego Flash franchise.
If the Board resolves to hire a CEO and President for the Parent
Company, Xxx Xxxxxx shall have the opportunity to submit his formal
application, in writing for the position of CEO and President of the
Parent Company based on his experience, education, expertise
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and performance under this contract. If the Board resolves that Xxx
Xxxxxx is not the most qualified of the applicants to hold the position
of CEO and President of the new holding company, then Xxx Xxxxxx will
automatically assume the position as President of the San Diego Flash
subsidiary franchise for the remainder of the term of this Agreement.
The naming of a new CEO and President for the Parent Corporation by the
Board of Directors shall not in any manner affect Xxx Xxxxxx'x rights
under this Agreement.
TERM OF EMPLOYMENT. The term of Employee's employment shall be three (3)
calendar years commencing on the first day of June, 2000 and continuing
until May 31, 2003. Employer and Employee will have the option to renew
this contract for an additional three (3) year term as more
specifically set forth in paragraph 4 below.
OPTION TO RENEW CONTRACT. Employer and Employee may exercise the option to
extend the terms of this agreement for two additional years, by
executing a mutually agreed upon letter of intent to extend employment,
prior to April 30, 2003. Upon the execution of said letter of intent,
Employee and Employer shall discuss, at that time, renewed terms for
compensation for Employee's services. Employee shall grant Employer
thirty days (30) of exclusivity after the letter of intent is signed,
in order to present and discuss new terms for a renewed contract term.
DUTIES AND RESPONSIBILITIES.
Employee's responsibilities, duties and obligations under this
Agreement, regardless of his title during the term of this
Agreement, shall be governed by the discretion of the Board of
Directors of the Parent Company. Employee shall perform his
responsibilities, duties and obligations and report directly
to the Board of Directors of the Parent Company.
Employee, regardless of his title, shall not have any authority over
any operational or management issues of the Parent Corporation
or any of its subsidiary corporations. Employee shall deliver
possession and control of all revenue and monetary controls to
the Chief Operating Officer and shall relinquish all controls
over management issues.
Employee shall fully engage all of his efforts in complying with his
employment work scope, tasks and specific performance
objectives that are more fully set forth in the attached
Addendum "A" Employment Work Scope Description, which is
incorporated herein and made a part hereof by this reference.
EMPLOYEE'S BEST EFFORT. During his employment, Employee shall devote his full
energies, interest, abilities, and productive time to the performance
of this Agreement and shall not, without Employer's prior written
consent, render to others services of any kind for compensation, or
engage in any other business activity that would interfere with the
performance of his duties under this Agreement. Subject to the sole
discretion of the Employer, Employee shall diligently and faithfully
use Employee's best efforts and skills
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to promote the Employer's best interests. As a member of management
for Employer, Employee's exact working hours and the total number
of hours Employee works each week may surpass normal business hours
depending upon the demands of Employer. Employee shall be expected
to devote whatever time is necessary to ensure the timely completion
of Employee's responsibilities and duties.
PROMOTIONOF COMPETING ORGANIZATION. During the employment term, Employee shall
not, directly or indirectly, whether as a partner, Employee, creditor,
shareholder, or otherwise, promote, participate, or engage in any
activity or other business that is competitive with this Employer's
business. During the course of his employment, Employee shall not
compete, directly or indirectly with this Employer in the field of
organizing, promoting, directing and supervising the promotion of any
other professional soccer organization.
COMPENSATION. Employer shall pay to Employee the compensation package more
specifically set forth in Addendum "B" to this Agreement. The terms and
conditions set forth in Addendum "B" are incorporated herein as if set
forth in full.
Confidential Information and Trade Secrets.
During the course of his employment, Employee shall have access to
trade secrets and other confidential information which is of a
special and unique nature, the value of which would be
destroyed by disclosure to any person or entity not directly
affiliated with the team owned and operated by the Employer.
Such trade secrets and confidential information include, but
are not limited to, customer lists, customer agreements, price
lists, marketing plans, research reports and studies, sales
materials, merchandising aids, books, and the identity and
purchasing preferences of Employer's clients, business
partners, customers and suppliers. Accordingly, Employee
agrees that without the prior express written consent of the
Board of Directors of Employer, Employee shall not, either
during the term of this Agreement or at any time thereafter,
disclose any such trade secrets or confidential information,
directly or indirectly, to anyone not affiliated directly with
the management of the Employer's business operations. Employee
further agrees that he shall never use any trade secrets or
confidential information for the benefit of anyone other than
the Employer, without the prior written consent of the Board
of Directors of Employer.
All books, files, customer lists, records, documents, brochures, office
equipment, keys and any other items relating to the Employer's
business which have been or shall be prepared, possessed or
controlled by Employee are, and shall forever remain, the sole
and exclusive property of the Employer. Accordingly, Employee
shall surrender any and all such material to the Employer
immediately upon the request by the employer or upon the
termination of this Agreement, whichever occurs earlier.
TERMINATION. This Agreement shall automatically terminate for "cause" on the
occurrence of any of the following events:
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Failure to materially perform and discharge his responsibilities,
duties and obligations under this Employment Agreement or the
material breach of any term under the Employment Agreement or
material breach of any term under the Employment Agreement.
Any misconduct by Employee that is deemed materially injurious to the
Corporation;
Employee's conviction of any felony involving moral turpitude or
personal dishonesty;
Failure to meet the performance requirements as set forth in the
Addendum "B" Compensation Package;
Or failure to provide full written disclosure of all known liabilities,
debts, stock control issues and potential lawsuits known by
Xxx Xxxxxx prior to signing this Agreement as set forth in
Addendum "C" are incorporated herein as if set forth in full.
SEVERANCE PAYMENTS UPON TERMINATION WITHOUT CAUSE. In the event this Agreement
is terminated by Employer under Paragraphs 5(a), 5(b), 5(c), 5(d),
5(e), and Addendum "C" of this Agreement, and only under those
paragraphs, Employer shall not be obligated to pay any severance pay to
Employee. Further, in the event that termination occurs under the terms
of Paragraphs 5(a), 5(b), 5(c), 5(d) and 5(e), all benefits then
received by Employee, shall also cease upon Employee's receipt of any
Notice of Termination. Termination by Employer for any other reason,
shall require employer to continue to pay Employee the compensation and
benefits set forth in Addendum "B" for the duration and completion of
the term of this Agreement, which does not include the option year
unless termination occurs during the option term of this Agreement.
ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or breach of this Agreement, shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction. There
shall be three arbitrators, one to be chosen directly by each party at
will, and the third arbitrator to be selected by the two arbitrators so
chosen. Each party shall pay the fees of the arbitrator he selects and
of his own attorneys, and the expenses of his witnesses and all other
expenses connected with presenting his case. Other costs of the
arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the third arbitrator, and
all other fees and costs, shall be borne equally by the parties.
NOTICE. Any notice provided for in this Agreement shall be in writing and shall
be deemed to have been properly served or given, if sent by certified
mail, postage paid, to the following addresses or any succeeding
addresses thereto.
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BOARD OF DIRECTORS XXX XXXXXX
San Diego Soccer Development Corp. __________________________
0000 Xxxxxx Xxxxxx, Xxxxx 00 __________________________
Xxx Xxxxx, Xxxxxxxxxx 00000
ASSIGNMENT. By signing this Agreement, Employee acknowledges the services
rendered by Employee are unique and personal. Accordingly, employee may
not assign any rights or delegate any duties or obligations under this
Agreement. However, the rights and obligations of the Employer under
this Agreement shall inure to the benefit of any shall be binding upon
any successors and assigns of the Employer.
SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect. If any provision is held invalid or
unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other
circumstances.
GOVERNING LAW. This Agreement has been entered in San Diego, the State of
California. The substantive and procedural laws of the State of
California shall govern the interpretation and enforcement of this
Agreement.
ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement between
the parties and any prior understanding or representation of any kind
preceding the date of this Agreement shall not be binding upon either
party except to the extent incorporated by this Agreement.
MODIFICATION OF AGREEMENT. A modification of this Agreement or additional
obligations assumed by either party in connection with this Agreement
shall be binding only if evidenced in writing signed by each party to
authorized representative of each party herein.
WAIVER. The failure of the Employer t exercise any right or remedy upon any
breach or default set forth in this Agreement, or delay by the Employer
in exercising any such right or remedy, shall not operate as a waiver.
No waiver of any type shall be binding upon the Employer unless
evidenced by a writing signed by the entire Board of Directors of
Employer.
ATTORNEYS FEES AND COSTS. In the event that any proceeding is commenced
involving the interpretation of enforcement of the provisions of this
Agreement, the party prevailing in such proceeding shall be entitled to
recover reasonable attorneys' fees and costs.
TITLES. The titles of the various sections herein are intended solely for
convenience of reference, and are not intended and shall not be deemed
for any purpose whatsoever to modify, explain, summarize or place any
construction upon any of the provisions of this Agreement, and shall
not affect the meaning or interpretation of this Agreement.
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AGREED AND EXECUTED AS OF THE DAY AND YEAR FIRST WRITTEN ABOVE:
EMPLOYER
San Diego Soccer Development Corporation
By: /s/ Xxxxxx Xxxxxxx
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Title: Chairman
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EMPLOYEE
/s/ Xxx Xxxxxx
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XXX XXXXXX
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ADDENDUM "A"
EMPLOYMENT WORK SCOPE DESCRIPTION
The following is the employment scope description for Xxx Xxxxxx
pursuant to the herein Employment Agreement dated June 1, 2000. Xxx Xxxxxx shall
be responsible for the performance and discharge the following duties,
obligations, responsibilities and performance objectives during the term of this
agreement.
1. PRIVATE PLACEMENT MEMORANDUM COORDINATION. Xxx Xxxxxx, shall assist in
coordinating the completion of the Private Placement Memorandum currently
being drafted by Employer's professional associates and Securities Counsel.
Xxx Xxxxxx shall work in concert with the Employers professional associates
and Securities Counsel in the preparation of monthly reports to the Board
of Directors regarding the status, drafting and final completion of the
Private Placement Memorandum. The Board of Directors shall approve the
finalized Private Placement Memorandum prior to the solicitation of any
shareholder thereunder.
2. CAPITAL FORMATION. Xxx Xxxxxx shall be responsible for raising Five Hundred
Thousand U.S. Dollars ($500,000) per 12 month period under this agreement
starting June 1, 2000. Said capital shall be raised by legal means, under
the supervision and direction of the Board of Directors in the form of the
PPM stock offerings by the publicly traded holding corporation, currently
known as San Diego Soccer Development Corporation. Due to the commitments
and time necessary to perform the capital raising objectives of Employer in
addition the necessity to make presentations in the field to prospective
investors away from company offices, Xxx Xxxxxx will need to work out of
his home office to perform such duties and obligations and will have an
office at the company headquarters, and will be present in the company
offices only when necessary to perform his obligations, responsibilities
and duties under this agreement.
3. INVESTOR RELATIONS. Xxx Xxxxxx shall continue to nurture and enhance
relations between existing shareholders of Employer and further promote
Employer's position as a publicly traded company to existing and future
shareholders.
4. MEZZANINE/BRIDGE FINANCING. Xxx Xxxxxx, at the discretion and direction of
the Board of Directors, may be requested to solicit and secure
mezzanine/bridge financing during the term of this agreement, until the
Parent Company Board of Directors approves the PPM Offering.
5. RELINQUISHMENT OF ALL BINDING AUTHORITY. Xxx Xxxxxx, pursuant to this
Agreement and the Unanimous Consent of the Directors of San Diego Soccer
Development Corporation, shall relinquish all authority to bind Employer to
any financial commitment, unless otherwise set forth in this Agreement.
6. RELINQUISHMENT OF ALL MANAGEMENT/OPERATIONAL CONTROL. Xxx Xxxxxx, by
entering this agreement has fully relinquished all managerial and
operational authority and control to the
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designated Chief Operating Officer of the Employer. Such relinquishment
includes turning all accounting and revenue related accounts and matters
to the Chief Operating Officer and removing himself from all such financial
and operational decision-making process.
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ADDENDUM "B"
COMPENSATION PACKAGE
1. BASE SALARY: The following base salary shall be paid in accordance with
company payroll procedures and with applicable tax withholding requirements:
A. JUNE 1, 2000 THROUGH MAY 31, 2001: Xxx Xxxxxx shall be paid
$7,000 (Seven Thousand Dollars) per month payable the tenth
day of each calendar month, starting June 1, 2000 and
continuing through May 31, 2001.
B. JUNE 1, 2001 THROUGH MAY 31, 2002: Provided that Xxx Xxxxxx
has satisfied his Employer's performance objectives for the
previous twelve month period, as more fully set forth in
Addendum "A" hereto, Xxx Xxxxxx shall be paid $7,600 (Seven
Thousand Six Hundred U.S. Dollars) per month payable the first
day of each calendar month, starting June 1, 2001 and
continuing through May 31, 2002.
C. JUNE 1, 2002 THROUGH MAY 31, 2003: Provided that Xxx Xxxxxx
has satisfied his Employers performance objectives for the
previous twelve month period, as more fully set forth in
Addendum "A" hereto, Xxx Xxxxxx shall be paid $8,200 (Eight
Thousand Two Hundred U.S. Dollars) per month payable the first
day of each calendar month, starting June 1, 2002 and
continuing through May 31, 2003.
2. STOCK OPTION BONUS FOR 1999: Upon the signing of this Agreement, Xxx
Xxxxxx will receive an option to purchase 200,000 shares of restricted stock at
$.25 per share in San Diego Soccer Development Corporation or the Company's then
successor name. The option will have a cashless feature and said option will
expire on the sooner of the expiration of this employment contract or its
termination for cause.
3. STOCK BONUS FOR EQUITY CAPITAL: Xxx Xxxxxx shall receive a .15%
(Fifteen percent) common share stock bonus for capital raised above $500,000 for
each calendar year as set forth in his performance objectives. For example: If
Xxx Xxxxxx PERSONALLY raises $750,000 during any 12 month performance period of
this employment contract, he shall be entitled to receive 37,500 shares of
restricted stock in San Diego Soccer Development Corporation or the company's
then successor name.
4. SUCCESS FEES: As an officer of the company, Xxx Xxxxxx will receive an
option to purchase 300,000 common shares of the Company's restricted stock at
$.75 per share for recognition of Yan's role in the successful completion of the
"roll-up merger" for the acquisition of the OC Waves, Bay Area Seals, and
Riverside Elite, including completion of the merger with Roller Coaster through
an SB-2 filing, and raising a minimum of $5-million into the merged entity
through a PPM. The option will have a cashless feature and said option will
expire on the sooner of the expiration of this employment contract or its
termination for cause.
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5. CELLULAR PHONE: Yan will receive a cellular phone paid for by Employer
for his use during the term of this Agreement that is to be used exclusively to
support his performance objectives per this Agreement.
6. MEDICAL COVERAGE: A medical plan is being reviewed at this time in
order to provide a menu of benefits. As soon as the Employer generates
sufficient capital, the Board will approve providing the Employee medical plan
benefits.
7. DENTAL COVERAGE: A dental plan is being reviewed at this time in order
to provide a menu of benefits. As soon as the Employer generates sufficient
capital, the Board will approve providing the Employee dental plan benefits.
8. EXPENSE CREDIT CARD: As soon as the Employer generates sufficient
capital, the Board will approve providing the Employee with an expense credit
card for $1,000 to cover all out of pocket expenses related to the performance
of his duties under this agreement, including all travel related expenses
incurred in the discharging of his duties.
9. OFFICER AND DIRECTOR LIABILITY COVERAGE: As soon as the Employer
generates sufficient capital, the Board will approve acquiring insurance that
will name the Employee as additional insured under the employer's coverage.
10. VACATION: Employee shall be entitled to receive 10 business vacation
days paid by Employer, during the year in which none of the soccer franchises
are actively playing.
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