Exhibit 10.3
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") made and entered into as of May 1, 1999
by and between Fantasy Sports Net, Inc., a New York corporation (the "Company"),
and Xxxxx Xxxxx (the "Executive").
The Executive is being employed by the Company as an executive officer. The
parties desire to enter into an employment agreement and to set forth herein the
terms and conditions of the Executive's continued employment by the Company and
its subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and the mutual benefits to be derived here from, the Company and
the Executive agree as follows:
1. Employment.
(a) Duties. The Company shall employ the Executive, on the terms set forth
in this Agreement, as its Secretary-Treasurer. The Executive accepts such
employment with the Company and shall perform and fulfill such duties as are
assigned to him hereunder consistent with his status as a senior executive of
the Company devoting his best efforts and a substantial portion of his time and
attention to the performance and fulfillment of his duties and to the
advancement of the interests of the Company, subject only to the direction,
approvals, control and directives of the Company's Board of Directors (the
"Board"). Nothing contained herein shall be construed, however, to prevent the
Executive from trading in or managing, for his own account and benefit, in
stocks, bonds, securities, real estate, commodities or other forms of
investments (subject to law and Company policy with respect to trading in
Company securities). Without any additional consideration, Executive shall also
serve as an officer of any or all subsidiaries of the Company. Unless otherwise
indicated by the context, the term "Company" shall include the Company and all
its subsidiaries.
(b) Place of Performance. In connection with his employment by the Company,
the Executive shall be based at the Company's principal place of business in New
York, except when required for travel in Company business.
(c) Nomination as Director. The Company agrees that it will nominate the
Executive as a member of the Board of Directors each year during the term of
this Agreement and will use its best efforts to ensure that the Executive is
elected to the Board of Directors.
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2. Term. The Executive's employment under this Agreement shall commence as
of May 1, 1999 (the "Commencement Date") and shall, unless sooner terminated in
accordance with the provisions hereof, continue uninterrupted until April 30,
2002 ("Term"). As used herein "Year" shall refer to a twelve month period ending
April 30th. Unless notice of non-renewal is given by either party at least sixty
(60) days prior to the end of the Term or prior to the end of any Year
thereafter, the Term of this Agreement shall be automatically extended for an
additional period of one year.
3. Compensation. Executive shall receive a "Base Salary" during the Term.
For the period May, 1999 through April, 2000, the Base Salary shall be at the
rate of $30,000 per annum with increases, subject to a semi-annual review by the
Board of Directors.
4. Insurance.
(a) Health Insurance and Other Benefits. During the Term, the Executive
shall be entitled to all employee benefits generally offered by the Company to
its executive officers and key management employees, including, without
limitation, all pensions, profit sharing, retirement, stock option, salary
continuation, deferred compensation, disability insurance, hospitalization
insurance, major medical insurance, medical reimbursement, survivor income, life
insurance or any other benefit plan or arrangement established and maintained by
the Company, subject to the rules and regulations then in effect regarding
participation therein.
(b) Keyman Insurance. The Company may obtain keyman life insurance upon the
life of the Executive in amounts to be determined from time to time by Executive
and the Company.
5. Expenses.
(a) Reimbursement of Expenses. The Executive shall be reimbursed for all
items of travel, entertainment and miscellaneous expenses that the Executive
reasonably incurs in connection with the performance of his duties hereunder,
provided the Executive submits to the Company such statements and other evidence
supporting said expenses as the Company may reasonably require.
(b) Automobile Allowance. The Executive shall be reimbursed for the
expenses of owning or leasing an automobile suitable for his position and
consistent with Company practices, including the expenses of operating, insuring
and parking such automobile, provided the Executive submits to the Company such
statements and other evidence supporting such expenses as the Company may
require.
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6. Vacation. The Executive shall be entitled to not less than four (4)
weeks of vacation in any calendar year. Any unused vacation time in a year shall
be accumulated and increase the amount of vacation time in subsequent years.
7. Termination of Employments.
(a) Death or Total Disability. In the event of the death of the Executive
during the Term, this Agreement shall terminate as of the date of the
Executive's death. In the event of the Total Disability (as that term is defined
below) of the Executive for sixty (60) days in the aggregate during any
consecutive nine (9) month period during the Term, the Company shall have the
right to terminate this Agreement by giving the Executive thirty (30) days'
prior written notice thereof, and upon the expiration of such thirty (30) day
period, the Executive's employment under this Agreement shall terminate. If the
Executive shall resume his duties within thirty (30) days after receipt of such
a notice of termination and continue to perform such duties for four (4)
consecutive weeks thereafter, this Agreement shall continue in full force and
effect, without any reduction in Base Salary and other benefits, and the notice
of termination shall be considered null and void and of no effect. Upon
termination of this Agreement under this Paragraph 7(a), the Company shall have
no further obligations or liabilities under this Agreement, except to pay to the
Executive's estate or the Executive, as the case may be, (i) the portion, if
any, that remains unpaid of the Base Salary for the Year in which termination
occurred, but in no event less than six (6) months' Base Salary; and (ii) the
amount of any expenses reimbursable in accordance with Paragraph 4 above, and
any automobile allowance due under Paragraph 5 above; and (iii) any amounts due
under any Company benefit, welfare or pension plan. Except as otherwise provided
by their terms, any stock options not vested at the time of the termination of
this Agreement under this Paragraph 7(a) shall immediately become fully vested.
The term "Total Disability" as used herein, shall mean a mental or physical
condition which in the reasonable opinion of an independent medical doctor
selected by the Company renders the Executive unable or incompetent to carry out
the material duties and responsibilities of the Executive under this Agreement
at the time the disabling condition was incurred. In the event the Executive
disagrees with such opinion, the Executive may, at his sole expense, select an
independent medical doctor and, in the event that doctor disagrees with the
opinion of the doctor selected by the Company, they shall select a third
independent medical doctor, and the three doctors shall, by majority vote,
determine whether the employee has suffered Total Disability. The expense of the
third doctor shall be shared equally by the Company and the Executive.
Notwithstanding the foregoing, if the Executive is covered under any policy of
disability insurance under Paragraph 3(c) above, under no circumstances shall
the definition of Total
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Disability be different from the definition of that term in such policy.
(b) Discharge for Cause. The Company may discharge the Executive for
"Cause" upon notice and thereby immediately terminate his employment under this
Agreement. For purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment if the Executive, in the reasonable
judgment of the Company, (i) materially breaches any of his agreements, duties
or obligations under this Agreement and has not cured such breach or commenced
in good faith to correct such breach within thirty (30) days after notice; (ii)
embezzles or converts to his own use any funds of the Company or any client or
customer of the Company; (iii) converts to his own use or unreasonably destroys,
intentionally, any property of the Company, without the Company's consent; (iv)
is convicted of a crime; (v) is adjudicated an incompetent; or (vi) is
habitually intoxicated or is diagnosed by an independent medical doctor to be
addicted to a controlled substance (any disagreement of Executive shall be
resolved using the procedure provided in Paragraph 7(a) above).
(c) Termination by Executive. Executive may terminate this Agreement for
the failure by the Company to comply with the material provisions of this
Agreement which failure is not cured within thirty (30) days after notice ("Good
Reason").
(d) No Mitigation. The Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, not shall the amount of any payment provided for in
this Agreement be reduced by any compensation earned by the Executive as the
result of his employment by another employer.
8. Restrictive Covenant.
(a) Competition. As used herein "Company Business" shall mean any business
which the Company is actively pursuing or actively considering while the
executive was employed by the Company provided that upon termination or
execution of this agreement the term "Company Business" shall refer to any
arrangement or contract or relation of the Company or any subsidiary existing or
actually pursued at the time of termination or expiration of the Agreement. The
Executive undertakes and agrees that during the term of this Agreement and for a
period of two years after the date of termination or expiration of this
Agreement he will not compete, directly or indirectly, with respect to a Company
Business or participate as a director, officer, employee, agent, consultant,
representative or otherwise, or as a stockholder, partner or joint venturers, or
have any direct or indirect financial interest, including, without limitation,
the interest of a creditor, in any business competing with respect to a Company
Business. Executive acknowledges that such prospects
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represent a corporate opportunity or are the property of the Company and
Executive should have no rights with respect to such properties on projects.
Executive further undertakes and agrees that during the term of the Agreement
and for a period of one year after the date of termination or expiration of this
Agreement he will not, directly or indirectly employ, cause to be employed, or
solicit for employment any of Company's or its subsidiaries' employees.
Notwithstanding the foregoing, the provisions of the Paragraph 7(a) shall not
apply to termination by the Executive pursuant to Section 7(c) or by the Company
without cause.
(b) Scope of Covenant. Should the duration, geographical area or range or
proscribed activities contained in Paragraph 8(a) above be held unreasonable by
any court of competent jurisdiction, then such duration, geographical area or
range of proscribed activities shall be modified to such degree as to make it or
them reasonable and enforceable.
(c) Non-Disclosure of Information.
(i) The Executive shall (i) never, directly or indirectly, disclose to any
person or entity for any reason, or use for his own personal benefit, any
"Confidential Information" (as hereinafter defined) either during his employment
with the Company or following termination of that employment for any reason (ii)
at all times take all precautions necessary to protect from loss or disclosure
by him of any and all documents or other information containing, referring or
relating to such Confidential Information, and (iii) upon termination of his
employment with the Company for any reason, the Executive shall promptly return
to the Company any and all documents or other tangible property containing,
referring or relating to such Confidential Information, whether prepared by him
or others.
(ii) Notwithstanding any provision to the contrary in this Paragraph 8(c),
this paragraph shall not apply to information which the Executive is called upon
by legal process regular on its face (including, without limitation, by subpoena
or discovery requirement) to disclose or to information which has become part of
the public domain or is otherwise publicly disclosed through no fault or action
of the Executive.
(iii) For purposes of this Agreement, "Confidential Information" means any
information relating in any way to the business of the Company disclosed to or
known to the Executive as a consequence of, result of, or through the
Executive's employment by the Company which consists of technical and
nontechnical information about the Company's products, processes, computer
programs, concepts, forms, business methods, data, any and all financial and
accounting data, marketing, customers, customer lists, and services and
information corresponding thereto acquired by the Executive during the term of
the Executive's employment by
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the Company. Confidential Information shall not include any of such items which
are published or are otherwise part of the public domain, or freely available
from trade sources or otherwise.
(iv) Upon termination of this Agreement for any reason, the Executive shall
turn over to the Company all tangible property then in the Executive's
possession or custody which belongs or relates to the Company. The Executive
shall not retain any copies or reproductions of computer programs,
correspondence, memoranda, reports, notebooks, drawings, photographs, or other
documents which constitute Confidential Information.
9. Arbitration.
(a) Any and all other disputes, controversies and claims arising out of or
relating to this Agreement, or with respect to the interpretation of this
Agreement, or the rights or obligations of the parties and their successors and
permitted assigns, whether by operation of law or otherwise, shall be settled
and determined by arbitration in New York City, New York pursuant to the then
existing rules of the American Arbitration Association ("AAA") for commercial
arbitration.
(b) In the event that the Executive disputes a determination that Cause
exists for terminating his employment hereunder pursuant to Paragraph 7(b), or
the Company disputes the determination that Good Reason exists for the
Executive's termination of this Agreement pursuant to Paragraph 7(c), either
party disputing this determination shall serve the other with written notice of
such dispute ("Dispute Notice") within thirty (30) days after the date the
Executive is terminated for Cause or the date the Executive terminates this
Agreement for Good Reason. Within fifteen (15) days thereafter, the Executive or
the Company, as the case may be, shall, in accordance with the Rules of the AAA,
file a petition with the AAA for arbitration of the dispute, the costs thereof
to be shared equally by the Executive and the Company unless an order of the AAA
provides otherwise. If the Executive serves a Dispute Notice upon the Company,
an amount equal to the portion of the Base Salary Executive would be entitled to
receive hereunder shall be placed by the Company in an interest-bearing escrow
account mutually agreeable to the parties or the Company shall deliver an
irrevocable letter of credit for such amount plus interest containing terms
mutually agreeable to the parties. If the AAA determines that Cause existed for
the termination, the escrowed funds and accrued interest shall be paid to the
Company. However, in the event the AAA determines that the Executive was
terminated without Cause or that Executive resigned for Good Reason, the
escrowed funds and accrued interest shall be paid to the Executive.
(c) Any proceeding referred to in Paragraph 9(a) or (b) shall also
determine Executive's entitlement to legal fees as well
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as all other disputes between the parties relating to Executive's employment.
(d) The parties covenant and agree that the decision of the AAA shall be
final and binding and hereby waive their right to appeal therefrom.
10. Indemnity. The Company shall indemnify and hold Executive harmless from
all liability to the full extent permitted by the laws of its state of
incorporation.
11. Miscellaneous.
(a) Notices. Any notice, demand or communication required or permitted
under this Agreement shall be in writing and shall either be hand-delivered to
the other party or mailed to the addresses set forth below by registered or
certified mail, return receipt requested or sent by overnight express mail or
courier or facsimile to such address, if a party has a facsimile machine. Notice
shall be deemed to have been given and received when so hand-delivered or after
three (3) business days when so deposited in the U.S. Mail, or when transmitted
and received by facsimile or sent by express mail properly addressed to the
other party. The addresses are:
To the Company: Fantasy Sports Net, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0-X
Xxxxxx Xxxxxxx, Xxx Xxxx 00000
(000) 000-0000 (telecopier)
To the Executive: Xxxxx Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
The foregoing addresses may be changed at any time by notice given in the manner
herein provided.
(b) Integration; Modification. This Agreement constitutes the entire
understanding and agreement between the Company and the Executive regarding its
subject matter and supersedes all prior negotiations and agreements, whether
oral or written, between them with respect to its subject matter. This Agreement
may not be modified except by a written agreement signed by the Executive and a
duly authorized officer of the Company.
(c) Enforceability. If any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such
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provision had been originally incorporated herein as so modified or restricted,
or as if such provision had not been originally incorporated herein, as the case
may be.
(d) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties, including and their respective heirs, executors,
successors and assigns, except that this Agreement may not be assigned by the
Executive.
(e) Waiver of Breach. No waiver by either party of any condition or of the
breach by the other of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one (1) or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition, or the breach of any other term or covenant set
forth in this Agreement. Moreover, the failure of either party to exercise any
right hereunder shall not bar the later exercise thereof with respect to other
future breaches.
(f) Governing Laws. This Agreement shall be governed by the internal laws
of the State of New York.
(g) Headings. The headings of the various sections and paragraphs have been
included herein for convenience only and shall not be considered in interpreting
this Agreement.
(h) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
(i) Due Authorization. The Company represents that all corporate action
required to authorize the execution, delivery and performance of this Agreement
has been duly taken.
IN WITNESS WHEREOF, this Agreement has been executed by the Executive and,
on behalf of the Company, by its duly authorized officer on the day and year
first above written.
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XXXXX XXXXX
FANTASY SPORTS NET, INC.
By:
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Xxxxxxx Xxxxxx
President and Director
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