SPORTAN UNITED INDUSTRIES
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EMPLOYMENT AGREEMENT
This agreement is effective as of July 1, 2000.
PARTIES. The parties to this agreement are Xxxxx X. Xxxxxxx of Huntsville,
Texas and Sportan United Industries, Inc., a Texas corporation, whose present
address for services is 0000 Xxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxx 00000.
RECITALS:
1. Xxxxxxx wishes to contribute absolutely certain relationships with known
civic personages, and his certain title and interest in certain projects in
progress, his contacts, name and reputation into Sportan, in exchanged for
shares of Sportan and signing bonus.
2. Xxxxxxx wishes to enter into an employment contract with Sportan in order
to make operational said projects in progress and the future business of
the Company.
Now, therefore, in consideration of the terms and conditions herein set
forth, it is hereby agreed.
AGREEMENTS
1. Sportan issues Xxxxxxx a warrant to purchase 250,000 shares of common
stock at an exercise price of $ .10 per share, expiring July 1, 2005.
2. Sportan grants Xxxxxxx a signing bonus to be paid on demand for
$100,000.00. The balance to be booked as loan earning 12% interest until
paid.
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SPORTAN UNITED INDUSTRIES
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EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
Parties are Xxxxx X. Xxxxxxx (Executive) and Sportan United Industries, Inc.
(Employer).
RECITALS:
Executive wishes to be employed by Employer and Employer wishes to employ
Executive. Employer desires assurance of the continued associates and services
of Executive in order to retain his experience, skills, abilities, background
and knowledge and is therefore willing to engage his services on the terms and
conditions set forth below.
Now, therefore in consideration of the terms and conditions herein set forth it
is hereby agreed.
AGREEMENT:
1. EMPLOYEE'S DUTIES AND AUTHORITY
1.1. Executive shall be the CEO of Employer, and shall provide services and
conduct the business of Employer in full compliance with the laws of
whatever States the Company is doing business, with Employer's By-Laws
and policies and directives set by the Board of Directors (herein
referred to as the "Board").
2. RESTRICTIONS ON OUTSIDE BUSINESS ACTIVITIES
2.1. During his employment, Executive shall devote as much of his energies,
interest, abilities and productive time to the performance of his
agreement and shall in his opinion be satisfactory for the success of
the Employer. The Employer would expect that the Executive would 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. Notwithstanding the foregoing, Executive is
specifically authorized to engage in reasonable technical consulting
services, which require his unique skills and contracts as he sees
fit.
2.2. During the employment term, Executive shall not, directly or
indirectly, whether as a partner, employee, creditor, shareholder, or
otherwise; promote, participate or engage in any activity, which would
damage or otherwise be directly competitive with Employer's business
without written notification to the Board.
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EMPLOYMENT AGREEMENT
3. CONSULTING SERVICES
3.1. Following the employment term (unless terminated for cause), Executive
agrees to provide his services as an advisor and consultant to
Employer so that Employer may benefit from his experience. During this
time, Executive shall be an independent contractor and Employer shall
only request Executive's services at such times and places which are
in the best interest of Employer and Executive, and do not reasonably
interfere with Executive's other business commitments which he may
have accepted during that period. While an advisor and consultant,
Executive shall be entitled to continue to receive all executive
benefits provided for in this agreement. During the consulting term
and for a period of three (3) years thereafter, Executive shall not
compete, directly or indirectly, with Employer in the business of the
Company. In exchange for this commitment to provide consulting
services as described in this paragraph, the Executive will be
guaranteed a minimum of 65 days of consulting fees per year for a
period of five (5) years from the date of termination, for a fee of
not less than his average daily cash salary at the time of
termination, but not less than $1000 per day.
4. TERM OF EMPLOYMENT
4.1. Subject to earlier termination as provided in this agreement,
Executive shall be employed for a term beginning July 01, 2000 and
ending June 30, 2003.
5. PLACE OF EMPLOYMENT
5.1. Unless the parties agree otherwise in writing, Executive shall perform
his services primarily from offices in Huntsville, Texas.
The Executive, subject to acceptance by the Board, will approve any
relocation of the Executive's headquarters.
6. COMPENSATION
6.1. Executive's base annual salary during the term of the agreement shall
be $102,000 or as otherwise agreed to by the Board from time to time,
provided that:
6.1.1. Executive's base salary shall be not less than the base salary
set forth herein above in this paragraph, and
6.1.2 At the discretion of the Board, the base salary may be paid as
follows: in cash, never less than 50% of the full salary, with
the balance in promissory notes at 100% of the remaining unpaid
cash value of his salary bearing interest at 12% per annum
until paid and in shares of Company common stock ("Shares")
representing the remaining unpaid cash value of his salary,
valued at the current fair market value.
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EMPLOYMENT AGREEMENT
6.1.3. In addition, to his base salary, Executive shall receive the
following compensation:
1) An option to purchase 750,000 shares of Company common
stock at an exercise price equal to the fair market
value of the shares on the date of grant, expiring in
five years, vesting as follows: (i) 250,000 shares on
July 1, 2001, (ii) 250,000 shares on July 1, 2002, and
(iii) 250,000 shares on July 1, 2003.
2) A bonus of payable in cash or shares the Company's
choice equal to 1% of the Company revenues plus 2% of
the Company's net income, payable at the end of each
year.
3) A bonus payable in cash or shares at his choice equal
3% of all funding secured into Sportan.
6.1.4. Executive's base salary shall be reviewed by the Board at
intervals of not less than 12 months to determine what
adjustments should be made, if any, with consideration being
given to the scope and level of his responsibilities, his
performance and Sportan's financial condition. Executive's
salary may be increased, but not reduced without Executive's
consent. Executive understands that the payment of cash
compensation for his services depends on Sportan's acquisition
of sufficient operating capital through various means.
6.1.5. If Executive is terminated without cause, prior to the end of
this agreement, then any accrued salary payable during the term
of this agreement shall become immediately due and payable and
shall be an amount not less than two (2) years annual salary at
the then current rate of compensation. If Employer is still
unable to pay Executive's accrued compensation in whole or in
part due to lack of funds, such unpaid compensation shall
accrue with interest at 12% per annum for the date of
termination and become all due and payable upon receipt of
sufficient funds, but not later than 12 months following
Executive's termination.
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EMPLOYMENT AGREEMENT
7. DEATH OR DISABILITY COMPENSATION
7.1. If Executive dies or becomes permanently disabled so that he is unable
to substantially perform the duties prescribed herein, payment of
salary as specified in Section 6 for the remainder of the employment
term shall be provided. Employer agrees to pay Executive or his
estate, the then current salary payable of the remaining term of this
agreement, or for a period of two (2) years, whichever first occurs.
If Employer is unable to pay Executive's termination compensation due
to lack of funds, such compensation shall accrue with interest at 10%
per annum and become all due and payable by Employer upon receipt of
sufficient funds, but not later than 12 months following Executive's
termination. If all of said compensation cannot be paid at one time,
Employer may make payments as funds become available.
8. EXECUTIVE BONUS
8.1. Employer shall pay Executive the bonus set forth in Section 6.1.3 (2)
three months after the close of Employer's fiscal year. Net income
shall be defined for purposes of this provision as net income after
all expenses of every nature have been considered, but before taxes,
as determined by the firm of certified public accountants retained by
Employer and in accordance with sound accounting principals.
9. EXECUTIVE BENEFITS
9.1. During the employment term, Executive shall be entitled to be paid
vacation of 30 working days per year. Employer agrees to include
Executive under Employers group life insurance coverage in an amount
not less than two (2) times Executive's annual salary and to include
Executive and his family under Employer's group medical insurance
coverage and dental coverage commencing November 1, 2000.
10. EXPENSES
10.1.During the employment term, Employer shall pay for or promptly
reimburse Executive for reasonable business expenses incurred in
connection with Employer's business, including travel expenses, food
lodging and rental vehicle while away from home.
11. INDEMNIFICATION BY EMPLOYER
11.1.Employer shall, to the maximum extent permitted by law, indemnify and
hold Executive harmless against expenses, including reasonable
attorney's fees and costs, judgments, fines, settlements, and other
amounts actually and reasonable incurred in connection with any
proceeding arising by reason of Executive's employment by Employer.
Employer shall pay directly or advance to Executive any expenses
incurred in defending any such proceeding. Employer shall use its best
efforts to obtain liability insurance for Directors and Officers
during the term of this contract.
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EMPLOYMENT AGREEMENT
12. TERMINATION
12.1.Either Employer or Executive may terminate this agreement at any time
without notice if the other commits any material act of dishonesty,
discloses confidential information, is guilty of gross carelessness or
misconduct, or unjustifiably neglects his or its duties under this
agreement, or acts in any way that has a direct, substantial, and
adverse effect on either's business reputation. If the Employer is the
guilty entity, the Executive will be entitled to the benefits
specified as if he were terminated without cause, as provided in
Section 6 Salary.
13. TERMINATION THROUGH CHANGE OF CONTROL OF COMPANY
13.1.If a change of control of Sportan should occur during the term of
this agreement, the provisions of this paragraph will become
operative. For the purpose of this agreement, a Change of Control of
Sportan shall be deemed to have occurred if (a) any "persons" (defined
for this purpose as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) directly or indirectly of securities
of Sportan representing more than 35% of the combined voting power of
Sportan's then outstanding securities, or (ii) during any period of 24
consecutive months, individuals who, at the beginning of such period
constitute the Board of Sportan cease to constitute at lease a
majority thereof, unless the election, or the nomination of election
to Sportan's shareholders, of each new director is made by directors
still in office who were directors at the beginning of the period or
directors elected and nominated as set forth herein.
13.2.If, within two (2) years after a Change of Control of Sportan, either
(1) Executive's employment is terminated by Sportan for any reason
other than disability or cause, or (2) Executive terminates his
employment for Good Cause, Sportan shall pay Executive the following,
not later than the 15th day after the date Executive's employment is
terminated:
13.2.1. A lump sum severance payment equal to 1.5 times the sum of (a)
Executive's base annual salary at the highest rate in effect
during the year immediately preceding the date on which
Executive's employment is terminated, and (b) the greater of the
amount of any incentive, bonus or other cash (non salary)
compensation that was paid to Executive during the twelve months
immediately preceding the Change of Control, and
13.2.2. A cash payment equal to the amount by which the greater of (a)
the closing price of Sportan's common stock on the day before the
date of Executive's employment terminates, or (b) the highest bid
and asked for price during the twelve months immediately
preceding the date of the Executive's employment termination, or
(c) the amount to which the highest price per share actually paid
in connection with the Change of Control of Sportan exceeds the
per share exercise of each stock option held by Executive on the
day before the date Executive's employment terminates, multiplied
by the number of shares covered by each such option, in exchange
for which payment Executive will surrender all such options to
Sportan without exercising them. At the Executive's option, the
company will buy back all or part of his shares.
13.2.3. Executive may terminate his employment for Good Reason within
two (2) years after a Change of Control of Sportan if:
13.2.4. Sportan reduces Executive's base annual salary as in effect on
the day preceding the Change of Control of Sportan, or
13.2.5. Sportan fails to continue in effect any compensation,
benefits, perquisites, stock options, or any other plan that was
in effect and which Executive was participating in or was
entitled to participate in on the day preceding the Change of
Control of Sportan, or
13.2.6. Sportan fails to continue to provide Executive with an office
an appropriate support services at least equivalent to those
provided on the day preceding the Change of Control of Sportan,
or
13.2.7. Sportan modifies the nature and status of Executive's
responsibilities from those in effect immediately prior to the
Change of Control of Sportan without an appropriate increase in
salary, or
13.2.8. Sportan requires Executive, without his consent, to be based
anywhere other than the metropolitan area in which Executive's
office is located immediately prior to the Change of Control of
Sportan.
14. TERMINATION BY RESIGNATION
14.1.Executive may terminate this agreement by giving Employer ninety days
prior written notice of resignation, with an agreement to step down
earlier if an adequate replacement can be found in shorter period of
time. This termination is independent and exclusive of the criteria
specified under Section 13, Termination through Change of Control of
the Company.
15. NON DISCLOSURE OF CONFIDENTIAL INFORMATION
00.0.Xx the course of his employment, Executive may have access to
confidential information and trade secrets relating to Employer's
business. Except as required in the course of his employment by
Employer, Executive will not, without Employer's prior consent, either
during this employment or consulting period by Employer or for five
(5) years after termination of that employment, provide directly or
indirectly to any third person any such confidential information or
trade secrets. Executive also agrees to execute any non-disclosure
agreement as may be required from time to time.
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EMPLOYMENT AGREEMENT
16. ARBITRATION
16.1.Any controversy or claim arising out of or relating to this
agreement, or breach of this agreement, shall be settled by binding
and non-appealable arbitration in accordance with the Commercial
Arbitration rules of the American Arbitration Association in Houston,
Texas. There shall be three arbitrators, one to be chosen by each
party, and the third arbitrator to be chosen by each of the said
arbitrators. Each party shall pay the fees of its selected arbitrator
and attorneys, the expenses of its witnesses, and all other expenses
connected with presenting its case. Other costs of the arbitration
including administrative fees, the fee of the third arbitrator, and
all other fees and costs, shall be come equally by the parties. The
prevailing party may, in the decision of the majority of the panel of
arbitrators, be awarded its or his costs, in whole or in part.
17. INTEGRATION
17.1.This agreement contains the entire agreement between the parties and
supersedes all prior oral and written agreements, understandings,
commitments and practices between the parties, including all prior
employment agreements, whether or not fully performed by Executive
before the date of this agreement. No amendments to this agreement may
be made except by Board approval and with the concurrence of the
Executive all of which must be in writing signed or otherwise ratified
by both parties.
18. LAW GOVERNING AGREEMENT
18.1.The formation, construction and performance of this agreement shall
be construed in accordance with the laws of the State of Texas.
19. NOTICE
19.1.Any notice to Employer required or permitted under this agreement
shall be given in writing to Employer, either by personal services or
by registered or certified mail, postage prepaid, addressed to the
Chairman of the Board of Directors at its principal place of business.
Any such notice to Executive shall be given in a like manner and
addressed to Executive at his home address.
19.2.For the purpose of determining compliance with any time limit in this
agreement, a notice shall be deemed to have been duly given (a) on the
date of service, if served personally on the part to whom the notice
is to be given. If the Executive is also the Chairman of the Board,
the Executive will provide the required information to all Board
members. The Secretary will document the Board's decisions and
responses and sign agreements between the parties in the name of the
Chairman.
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EMPLOYMENT AGREEMENT
20. PARTIAL INVALIDITY
20.1.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.
SPORTAN UNITED INDUSTRIES XXXXX X. XXXXXXX
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Signature Signature
BY: BY: XXXXX X. XXXXXXX
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TITLE: TITLE: CHIEF EXECUTIVE OFFICE "CEO"
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