Employment Agreement - You Bet! Inc. and Russell Fine
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of this 6th
day of December, 1995 by and between You Bet!, Inc., a Delaware corporation
("Company") and Russell Fine ("Executive"), in connection with Company's
engagement of Executive's personal services as Executive Vice President.
1. EMPLOYMENT; DUTIES AND ACCEPTANCE:
(a) Employment by Company.
Company hereby engages Executive, and Executive
hereby agrees to provide to Company the services of Executive, as Executive
Vice President of the Company on the terms and conditions of this Agreement.
In such capacity Executive will report to, and serve under the direction and
subject to the control of Company's Board of Directors and President.
Throughout the Term of this Agreement Executive shall, subject to the
provisions contained herein, devote substantially all of his work time to the
employment described hereunder.
(b) Location of Employment:
Executive shall render his services at Company's offices at
12121 Wilshire Boulevard, 14th Floor, Los Angeles, California 90025; provided,
however, that Executive agrees to render his services at such other locations
from time-to-time as the proper performance of Executive's duties may
reasonably require. Notwithstanding the foregoing, Company's principal offices
shall remain in Southern California, and Executive need not relocate to render
his duties hereunder.
2. TERM:
The term of Executive's employment hereunder shall be
for a period of four (4) years commencing as of December 6, 1995 and ending on
November 30, 1999 (the "Term") unless sooner terminated pursuant to Section 7
hereof ("Termination Sections").
3. COMPENSATION AND BENEFITS:
(a) Salary.
During the first year of the Term, Executive shall
receive a salary (the "Annual Salary") at the rate of $120,000 per annum. The
parties hereto shall in good faith, renegotiate the compensation payable to
Executive for each successive one year period commencing upon the initial rate
of the Term through the end of the Term and for the Option Period, after having
given due consideration to the performance of the Company and cost of
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living increases, provided that in no event shall the Annual Salary exclusive
of the Bonus (as defined below) payable to Executive be less than the Annual
Salary paid during the prior year of the Term hereof. Executive's Annual
Salary shall be payable in accordance with the Company's normal payment
policies. Such salary shall be less such deductions as shall be required to be
withheld by applicable law and regulations and shall be pro-rated for any
period that does not constitute a full twelve (12) month period.
(b) Bonus.
There will be no fixed bonuses. Bonuses may be
offered from time to time at the discretion of the Board of Directors of the
Company.
4. PARTICIPATION IN EXECUTIVE BENEFIT PLANS;
AUTOMOBILE ALLOWANCE:
(a) Fringe Benefits.
Executive shall be permitted during the Term to
participate in any group life, medical, hospitalization, dental, and disability
plans, including, but not limited to proposed life insurance policies, and
any other plans and benefits, if any, generally maintained by Company for
executives of the stature and rank of Executive during the Term hereof, each in
accordance with the terms and conditions of such plans (collectively referred
to herein as "Fringe Benefits"); provided, however, that Company shall not be
required to establish or maintain any such Fringe Benefits.
(b) Automobile Allowance.
(i) Company shall continue to provide Executive
with an automobile allowance of $500 per month. Alternatively, at Executive's
option, Executive shall require Company to lease Employee a vehicle of
Employee's choice of an aggregate expense, including interest and taxes, of not
more than $500 per month. The reasonable cost of any down payment on such
lease shall not be considered in connection with such calculation.
(ii) Company shall pay all business related
operating expenses of the automobile including registration, gas, oil and
repairs.
(iii) Company shall procure and maintain an
automobile liability insurance policy on the automobile, with coverage
including Executive in the minimum amounts of Five Hundred Thousand Dollars
($500,000.00) combined single limit.
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(c) Vacation.
Executive shall accrue, in addition to sick days and
days on which Company is closed, paid vacation days at the rate of one and
one-quarter (1 1/4) days per month up to a maximum of fifteen (15) work days
(three (3) work weeks). Under no circumstances can Executive accrue more
vacation than twenty (20) work days (the "Ceiling"). Thus, once the maximum
amount of paid vacation time is accrued or earned, no further vacation time is
accrued or earned until after vacation is taken and the amount of Executive's
accrued vacation time goes below the Ceiling as stated above. At that point,
Executive will start to accrue vacation time again until Executive reaches the
Ceiling. Subject to the requirements of Executive's office, Executive shall be
entitled to annual vacation in accordance with the vacation policy of Company.
(d) Expenses.
Company will reimburse Executive for actual and
necessary travel and accommodation costs, entertainment and other business
expenses incurred as a necessary part of discharging the Executive's duties
hereunder, subject to receipt of reasonable and appropriate documentation by
Company.
5. CERTAIN COVENANTS OF EXECUTIVE:
Without in any way limiting or waiving any right or remedy
accorded to Company or any limitation placed upon Executive by law, Executive
agrees as follows:
(a) Non-Compete.
Company and Executive acknowledge that this
Employment Agreement is being entered into in furtherance of that certain sale
of stock from Executive and others to Continental Embassy Acquisition Inc., (as
contemplated by that certain Agreement and Plan of Reorganization between the
Company and Continental Embassy Acquisitions, Inc. dated November 30, 1995),
and that the Company's and Executive's agreement as further set forth in this
paragraph 5(a) is in furtherance and is related to such sale of stock
transaction. Provided that Company is (other than in furtherance of a plan of
liquidation) at all times relevant hereto actively carrying on the Business of
the Company (as defined below), Executive agrees that during the Term of this
Agreement, and, for an additional period of Three (3) years after the Term
hereof, but not beyond November 30, 2000, Executive shall not within any county
or similar political subdivision of the United States or any other county in
which the Company or any other Protected Company (as hereafter defined) has
during the past two years or does during the term hereof directly or
indirectly, in any form, capacity or manner, participate in activities which
are competitive with the Business of the Company (as defined below), or of
those
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divisions, subsidiaries and affiliated companies of Company (each of which,
including Company, is referred to as a "Protected Company") or have a direct
monetary interest in or invest capital in any competitor company of Company,
whether such interest be by way of (i) ownership, (ii) stock interest, (iii)
financing, (iv) lending arrangements, or (v) in any other form or of any other
nature. Upon the execution of this Agreement and during the Term hereof,
Executive shall disclose to Company any stock owned by him and his family in
any company competitive with a Protected Company; provided, however, (i)
Executive shall not be prohibited from investing in any competitive company, as
aforesaid, the stock of which is publicly traded so long as his and his
family's ownership collectively is nominal and for investment purposes only and
(ii) this covenant not to compete shall apply for only a one year period
following the date of termination of Executive's employment relationship with
the Company if Executive is terminated for any reason other than provided
hereunder. For purposes hereof, the term "Business of the Company" shall mean
the development and sale of proprietary, interactive software which will
provide individual personal computer users with both race handicapping and
other sports oddsmaking information and, in certain instances, the ability to
place bets on horse racing and other sports contests, as well as recreational
games and contests related to such information. Executive hereby agrees to
indemnify and hold Company harmless from any and all damages, liabilities,
costs, losses and expenses (including legal costs and reasonable attorneys'
fees) arising out of or connected with any claim, demand or action which is
based upon a breach by Executive of the foregoing restriction.
(b) Confidential Information.
Executive agrees that, neither during the Term nor at
any time thereafter shall the Executive (i) disclose to any person, firm, or
corporation not employed by any Protected Company or not engaged to render
services to any Protected Company or (ii) use for the benefit of himself, or
others, any confidential information of any Protected Company obtained by the
Executive prior to the execution of this Agreement, during the Term or any time
thereafter, including, without limitation, "know-how" trade secrets, details of
supplier's, manufacturer's, distributor's contracts, pricing policies,
financial data, operational methods, marketing and sales information or
strategies, product development techniques or plans or any strategies relating
thereto, technical processes, designs and design projects, and other
proprietary information of any Protected Company; provided, however, that this
provision shall not preclude the Executive from (x) upon advice of counsel,
making any disclosure required by any applicable law or (y) using or disclosing
information known generally to the public (other than information known
generally to the public as a result of any violation of this Section 5.b. by or
on behalf of the Executive.
(c) Property of Company.
Any interest in trademarks, servicemarks, copyrights,
copyright applications, patents, patent applications, slogans, developments and
processes which the
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Executive, during the Term, may develop relating to the Business of the Company
in which the Company may then be engaged and any memoranda, notes, lists,
records and other documents (and all copies thereof) made or compiled by the
Executive or made available to the Executive concerning the business of any
Protected Company shall belong and remain in the possession of any Protected
Company, and shall be delivered to the Company promptly upon the termination of
the Executive's employment with Company or at any other time on request.
(d) Executive will not, during the Term hereof and for a
period of one (1) year after the Term hereof induce any person who is an
executive, officer or agent of the Company, to terminate relationship with the
Company.
6. OTHER PROVISIONS;
(a) Rights and Remedies Upon Breach.
If the Executive breaches, or threatens to commit a
breach of, any of the provisions of Section 5 hereof (the "Restrictive
Covenants"), the Company shall have the following rights and remedies, each of
which rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company at law
or in equity.
(b) Accounting.
The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as a result of any transactions constituting a breach
of any of the Restrictive Covenants, and the Executive shall account for and
pay over such Benefits to the Company.
(c) Severability of Covenants.
If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
(d) Blue-Pencilling.
If any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision and, in its reduced form, such
provision shall then be enforceable.
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(e) Enforceability in Jurisdictions.
The parties intend to and hereby confer jurisdiction
to enforce the Restrictive Covenants upon the courts of any jurisdiction within
the geographical scope of such Restrictive Covenants. If the courts of any one
or more of such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination not bar or in any way affect Company's right to
the relief provided in this Section 6 in the courts of any other jurisdiction
within the geographical scope of such Restrictive Covenants, as to breaches of
such Restrictive Covenants in such other respective jurisdictions, such
Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
(f) Injunctive Relief.
Executive agrees and understands that the remedy at
law for any breach by Executive of the provisions of Paragraph 5 hereof may be
inadequate and that damages resulting from such breach may not be susceptible
to being measured in monetary terms. Accordingly, it is acknowledged that upon
Executive's breach of any provision of Paragraph 5 hereof, the Company shall be
entitled to seek to obtain from any court of competent jurisdiction injunctive
relief to prevent the continuation of such breach. Nothing contained herein
shall be deemed to limit the Company's remedies at law or in equity for any
breach of the provisions of Paragraph 5 hereof which may be available to the
Company.
7. TERMINATION:
(a) Termination Upon Death or Disability.
If during the Term, Executive should (i) die or (ii)
Executive becomes so physically or mentally disabled whether totally or
partially, that Executive is unable to perform the duties, functions and
responsibilities required hereunder for (aa) a period of three (3) consecutive
months or (bb) shorter periods aggregating to four (4) months within any period
of twelve (12) months ("Disability"), then in such event, Company may, at any
time thereafter, by written notice to Executive, terminate Executive's
employment hereunder. Executive agrees to submit to reasonable medical
examinations upon the request of Company. The existence of Executive's
disability for the purposes of this Agreement shall be determined by a
reputable physician selected by Company who is experienced in the relevant
field of medicine. If Executive's services are terminated, as aforesaid,
Executive or the designated beneficiary of Executive, shall be entitled to
receive Executive's base salary, accrued share of the Bonus for that Fiscal
Year and accrued automobile allowance and unused vacation (hereinafter
collectively referred to as "Fringe Benefits"), if any, earned through the date
of Executive's termination and continuing thereafter for an additional period
of six (6) months.
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(b) No Duty to Mitigate.
In the event that Executive's services to Company are
terminated for any reason prior to the completion of the Term hereof, or in the
event that Executive terminates this Agreement based upon the Company's
material failure to perform its obligations hereunder, Executive shall have no
duty, either express or implied, to mitigate any damages hereunder and the
Company shall remain liable for all compensation (whether salary, bonus or
other benefits) provided for under the terms of this Agreement. Any
compensation earned by Executive in any capacity after the date of such
termination shall not reduce or mitigate the amounts payable by the Company
hereunder. Nothing herein shall be deemed to imply that the Company has the
right to terminate Executive's services.
(c) Designation of Beneficiary.
The parties hereto agree that the Executive shall
designate, by written notice to the Company, a beneficiary to receive the
payments described in Section 7 in the event of his death and the designation
of any such beneficiary may be changed by the Executive from time to time by
written notice to the Company. In the event the Executive fails to designate a
beneficiary as herein provided, any payments which are to be made to the
Executive's designated beneficiary under Section 7 shall be made to the
Executive's widow, if any, during her lifetime. If the Executive has no
designees or widow, such payments shall be paid to the Executive's estate.
8. CHANGE OF CONTROL
(a) In the event there has been a "Change of Control" (as
defined below) of the Company, Executive shall have the right, but not the
obligation, to consider such event to be a termination of this agreement, in
which event Executive shall be entitled to rely on the rights afforded to him
under Section 7(b) above.
(b) For purposes of this Agreement, "Change of Control"
shall mean
(i) any sale of all or substantially all of the
assets of the Company; or
(ii) any stock sale, merger or other business
combination in which the members of the management of the Company are either
(i) no longer affiliates of the surviving entity, (ii) no longer in control of
the surviving entity or (iii) no longer own in excess of 20% of the
outstanding stock of such surviving entity.
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9. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES:
(a) Right to Enter Into Agreement.
Executive has the unfettered right to enter into this
entire Agreement on all of the terms, covenants and conditions hereof; and
Executive has not done or permitted to be done anything which may curtail or
impair any of the rights granted to Company herein.
(b) Breach Under Other Agreement or Arrangement.
Neither the execution and delivery of this Agreement
nor the performance by Executive of any of his obligations hereunder will
constitute a violation or breach of, or a default under, any agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
(c) Services Rendered Deemed Special, Etc.
Executive acknowledges and agrees that the services
to be rendered by him hereunder are of a special, unique, extraordinary and
intellectual character which gives them peculiar value, the loss of which
cannot be adequately compensated for in an action at law and that a breach of
any term, condition or covenant hereof will cause irreparable harm and injury
to Company and in addition to any other available remedy Company will be
entitled to seek injunctive relief.
10. USE OF NAME:
Company shall have the right during the Term hereof to use
Executive's name, biography and approved likenesses in connection with
Company's business, including advertising their products and services; and
Company may grant such rights to others, but not for use as a direct
endorsement.
11. ARBITRATION:
Any dispute whatsoever arising out of or referable to this
Agreement, including, without limitation, any dispute as to the rights and
entitlements and performance of the parties under this Agreement or concerning
the termination of Executive's employment or of this Agreement or its
construction or its validity or enforcement, or as to the arbitrator's
jurisdiction, or as to the arbitrability of any such dispute, shall be
submitted to final and binding arbitration in Los Angeles, California by and
pursuant to the Labor Arbitration Rules of the American Arbitration Association
with discovery proceedings pursuant to Section 1283.05 of the California Code
of Civil Procedure. The arbitrator shall be entitled to award any relief which
might be available at law or in equity, including that of a provisional,
permanent or injunctive nature. The
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prevailing party in such arbitration as determined by the arbitrator, or in any
proceedings in respect thereof as determined by the person presiding, shall be
entitled to receive its or his reasonable attorneys' fees incurred in
connection therewith.
12. NOTICES:
(a) Delivery.
Any notice, consent or other communication under this
Agreement shall be in writing and shall be delivered personally, telexed, sent
by facsimile transmission or overnight courier (regularly providing proof of
delivery) or sent by registered, certified, or express mail and shall be deemed
given when so delivered personally, telexed, sent by facsimile transmission or
overnight courier, or if mailed two (2) days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at
such other address as a party may specify by notice in accordance with the
provisions hereof to the other):
(i) If to Fine, to his address at:
17607 Tramanto Drive
Pacific Palisades, Californai 90272
(ii)If to Company, to its address at:
You Bet!, Inc.
12121 Wilshire Boulevard, 14th Floor
Los Angeles, California 90025
Meyer & Vann
1999 Avenue of the Stars, 27th Floor
Los Angeles, CA 90067
(b) Change of Address.
Either party may change its address for notice
hereunder by notice to the other party in accordance with this Section 12.
13. RETENTION OF SHARES:
During the first year of the Term, Executive shall retain all
shares (the "Shares") of the Company and each other Protected Company
beneficially owned by Executive on the initial date of the Term, as well as all
shares of all issuers into which such Shares are converted or for which such
Shares are exchanged. During the second year of the Term, Executive shall
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retain all such Shares and any other shares so received on conversion of or
exchange for the Shares, other than 50,000 Shares or the equivalent thereof
received on conversion or exchange which Executive shall be free to sell or
otherwise dispose of in his discretion.
14. COMPLETE AGREEMENT; MODIFICATION AND TERMINATION:
This Agreement contains a complete statement of all the
arrangements between the parties with respect to the matters covered hereby
and, supersedes all existing agreement between the parties concerning such
matters. This Agreement may be amended, modified, superseded or canceled, and
the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor shall any waiver on the
part of any party of any such right or remedy, nor any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy.
15. GOVERNING LAW:
This Agreement shall be governed by and construed in
accordance with the law of the State of California applicable to agreements
entered into and performed entirely within such State.
16. HEADINGS:
The headings in this Agreement are solely for the convenience
of reference and shall not affect its interpretation.
WHEREFORE, the parties hereto have executed this Agreement as of the
day and year first above written.
By: __________________________
Russell Fine
Agreed to and Accepted:
You Bet!, Inc.,
a Delaware Corporation
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By:________________________
Its: ________________________
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