EXHIBIT 10.5
XXXXXX XXXXXXXXXX'X EMPLOYMENT AGREEMENT WITH SDSDC
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made and entered this 1st day of June, 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 XXXXXX XXXXXXXXXX, 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
Vice President and General Manager 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
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
separate California corporation. Each franchise corporation will be a wholly
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 changes to the corporate structure of the
Parent Company, a restructuring of 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 Xxxxxx Xxxxxxxxxx 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:
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
EMPLOYMENT TITLE. Employer employs Employee on the terms and conditions stated
in this Agreement to perform the functions as Chief Operating Officer
(C.O.O.) from June 1, 2000 through the earlier date of November 30,
2000 or the effective date of the Acquisition and Merger. At which
time, the Board of Directors shall determine who shall be the Chief
Operating Officer of the Parent Company.
CHIEF OPERATING OFFICER OF PARENT COMPANY. On the earlier to occur of
November 30, 2000 or the effective date of the Acquisition and Merger,
the Board of Directors of the Parent Company shall resolve as to
whether to hire a new C.O.O. for the Parent Company. If the Board
resolves that Xxxxxx Xxxxxxxxxx is not qualified to hold the said
position of C.O.O. of the Parent Company and the Board further resolves
to hire a new C.O.O. in place and stead of Xxxxxx Xxxxxxxxxx, Xxxxxx
Xxxxxxxxxx shall automatically assume the position of Vice-President
and Director of Soccer Operations of the San Diego Flash subsidiary
franchise for the remainder of the term of this Agreement. The naming
of a new C.O.O. for the Parent Company by the Board of Directors shall
not in any manner affect Xxxxxx Xxxxxxxxxx'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 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 three (3) 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, 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 shall fully engage all of his efforts in complying with his
employment scope and the tasks and performance objectives that
are more fully set forth in the attached Addendum "A"
Employment Scope Description, which is incorporated herein and
made a part hereof by this reference.
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
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 materially 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 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 and Employer's operations. Employee shall be
expected to devote whatever time is necessary to ensure the timely
completion of Employee's responsibilities and duties. Employee does
disclose that he is a licensed attorney and has been practicing law the
past six years in California, and based on the existing practice,
Employee has commenced the winding down of his law practice. However,
due to legal obligations imposed by the Courts, Employee will be
required to complete client matters related to trial within the next
three months. Employer understands and accepts that Employee is not
taking on new clients and that he is winding down his law practice
during the next 90 days and that said winding down will not take any
substantial time from his duties under this contract. Further, as part
of his prior obligations, Employee has reserved a one-week stay in New
York during the week between July 3, 2000 through July 7, 2000 for a
symposium that has been fully pre-paid. That Employee will use one week
of his two-week vacation time for the absence.
PROMOTION OF COMPETING ORGANIZATION: Notwithstanding the disclosures in
paragraph 6 above, 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 competitive with 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 that 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
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
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 of 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:
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:
Any misconduct by Employee that is deemed materially injurious to the
Corporation;
Employee's conviction of any felony involving moral turpitude or
personal dishonesty.
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
SEVERANCE PAYMENTS UPON TERMINATION WITHOUT CAUSE: In the event this Agreement
is terminated by Employer under Paragraphs 5(a), 5(b) and 5(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) and
5(c), 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:
EMPLOYER: EMPLOYEE:
BOARD OF DIRECTORS XXXXXX XXXXXXXXXX
San Diego Soccer Development Corp. 00000 Xxxx Xxxx, #0000
0000 Xxxxxx Xxxxxx, Xxxxx 00 Xxx Xxxxx, XX 00000
Xxx Xxxxx, XX 00000
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
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 and 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.
GOVERNINGLAW: 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 or
authorized representative of each party herein.
WAIVER: The failure of the Employer to 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 or 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.
AGREED AND EXECUTED AS OF THE DAY AND YEAR FIRST WRITTEN ABOVE:
EMPLOYER:
San Diego Soccer Development Corporation
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
By: /s/ Xxxxxx Xxxxxxx
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Title: Chairman
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EMPLOYEE:
/s/ Xxxxxx Xxxxxxxxxx
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XXXXXX XXXXXXXXXX
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EMPLOYMENT AGREEMENT _______________ _______________
EMPLOYER EMPLOYEE
ADDENDUM "A"
EMPLOYMENT SCOPE DESCRIPTION
The following is the employment scope description for Xxxxxx Xxxxxxxxxx
pursuant to the herein Employment Agreement dated June 1,2000. Xxxxxx Xxxxxxxxxx
shall be responsible for the performance and discharge the following duties,
obligations, responsibilities and performance objectives during the term of his
agreement:
1. PRIOR TO NOVEMBER 30, 2000 OR ACQUISITION AND MERGER: Xxxxxx Xxxxxxxxxx
shall be responsible for the management of all business operations of San
Diego Soccer Development Corporation from June 1, 2000 through November 30,
2000. Xxxxxxxxxx shall maintain his role as Director of Soccer Operations
between June 1, 2000 through November 30,2000 over the San Diego Flash
Franchise and non-paid consultant to the Riverside County Elite Franchise,
wherein Xxxxxxxxxx shall be responsible for all coaching and player matters
for the Flash and the Elite.
2. AFTER NOVEMBER 30, 2000 OR ACQUISITION AND MERGER: If after November 30,
2000, the Parent Company does not retain Xxxxxxxxxx as C.O.O., Xxxxxxxxxx
shall be automatically appointed Vice President and Director of Soccer
Operations for the San Diego Flash franchise, wherein Xxxxxxxxxx shall
retain discretion player personnel matters. Said duties shall include the
overseeing, selection and management of the entire coaching staff and the
signing and formation of the Flash player rosters.
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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: Xxxxxx Xxxxxxxxxx shall be
paid $6,000 (Six Thousand U. S. 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: Xxxxxx Xxxxxxxxxx shall be
paid $6,600 (Six Thousand Six Hundred U. S. Dollars) per month
payable the tenth day of each calendar month, starting June 1,
2001 and continuing through May 31, 2002.
C. JUNE 1, 2002 THROUGH MAY 31, 2003: Xxxxxx Xxxxxxxxxx shall be
paid $7,200 (Seven Thousand Two Hundred U. S. Dollars) per
month payable the tenth 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, Xxxxxx
Xxxxxxxxxx will receive an option to purchase 150,000 shares of
restricted stock at $.25 per share in San Diego Soccer Development
Corporation or the company's then successor name.
3. SUCCESS FEES: As an officer of the company, Xxxxxx Xxxxxxxxxx will
receive an option to purchase 300,000 common stock at $.75 per share in
San Diego Soccer Development Corporation or the company's then
successor name for recognition of Sam'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. This 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.
4. CELLULAR PHONE: Xxx 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 outlined under this
agreement.
5. 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.
6. 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.
7. EXPENSE CREDIT CARD: As soon as the Employer generates sufficient
capital, the Board will approve providing 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.
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8. 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.
9. 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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