EMPLOYMENT AGREEMENT
Exhibit
10.3
This
Employment Agreement (the "Agreement") is made and entered into effective as of
February 1, 2005, by and between Boundless Motor Sports Racing, Inc., a Colorado
corporation ("Employer"), and Xxxxx Xxxxxx ("Employee").
WITNESSETH:
WHEREAS,
Employer desires to employ Employee as provided herein, and Employee desires to
accept such employment; and
WHEREAS,
Employee shall, as an employee of Employer, have access to confidential
information with respect to Employer and its affiliates;
NOW
THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Employment. Employer
hereby employs Employee, and Employee hereby accepts employment with Employer,
upon the terms and conditions hereinafter set forth.
2. Duties. Subject to
the power of the Board of Directors of Employer (the "Board") to elect and
remove officers, Employee shall serve Employer as Chief Financial Officer of
Employer, and shall perform, faithfully and diligently, the services and
functions relating to such office or otherwise reasonably incident to such
office as may be designated from time to time by the Chief Executive Officer of
Employer (the "CEO") or the Board. Employee shall report directly to the CEO.
Employee shall be based in Dallas, Texas, but shall travel as required by his
duties under this Agreement. Employer acknowledges and agrees that Employee's
previous employer temporarily employs Employee, on a contract basis. Employer
acknowledges that Employee may devote approximately 20% of his time to his
duties as a contract employee for the previous employer. However, Employee shall
use his best efforts to terminate the contract employment on or before June 30,
2005.
3- Term. Unless earlier
terminated pursuant to Section 6 below, the term of this Agreement shall
commence as of the date hereof, and shall end on February 1, 2008; provided,
however, that the term shall automatically renew for an additional one-year
period at the end of the original three-year term and any additional one-year
term, unless either party gives written notice to the other party, at least
ninety (90) days prior to the end of the applicable term, of such party's
termination of this Agreement at the end of the applicable term. As used herein,
"Term" shall mean the original term and any additional renewal
term(s).
4. Compensation. As
compensation for services rendered under this Agreement, during the Term
Employee shall be entitled to receive the compensation as provided in Exhibit A attached
hereto. In addition, Employer shall reimburse Employee for all reasonable and
necessary out-of-pocket travel and other expenses incurred by Employee in
rendering services required under this Agreement, in accordance with Employer's
then current reimbursement policy.
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5. Confidentiality.
(a) Acknowledgment of
Proprietary Interest. Employee recognizes the proprietary interest of
Employer and its affiliates in any Trade Secrets (as hereinafter defined) of
Employer and its affiliates. Employee acknowledges and agrees that any and all
Trade Secrets currently known by Employee or learned by Employee during the
course of his engagement by Employer or otherwise, whether developed by Employee
alone or in conjunction with others or otherwise, shall be and is the property
of Employer and its affiliates. Employee further acknowledges and understands
that his disclosure of any Trade Secrets will result in irreparable injury and
damage to Employer and its affiliates. As used herein, "Trade Secrets" means all
confidential and proprietary information of Employer and its affiliates, now
owned or hereafter acquired, including, without limitation, information derived
from reports, investigations, experiments, research, work in progress, drawings,
designs, plans, proposals, codes, marketing and sales programs, client lists,
client mailing lists, financial projections, cost summaries, pricing formula,
and all other concepts, ideas, materials, or information prepared or performed
for or by Employer or its affiliates and information related to the business,
products or sales of Employer or its affiliates, or any of their respective
customers, other than information which is otherwise publicly
available.
(b) Covenant Not-to-Divulge
Trade Secrets. Employee acknowledges and agrees that Employer and its
affiliates are entitled to prevent the disclosure of Trade Secrets. As a portion
of the consideration for the employment of Employee and for the compensation
being paid to Employee by Employer, Employee agrees at all times during the Term
and thereafter to hold in strict confidence and not to disclose or allow to be
disclosed to any person, firm or corporation, other than to persons engaged by
Employer and its affiliates to further the business of Employer and its
affiliates, and not to use except in the pursuit of the business of Employer and
its affiliates, the Trade Secrets, without the prior written consent of
Employer, including Trade Secrets developed by Employee.
(c) Return of Materials at
Termination. In the event of any termination or cessation of his
employment with Employer for any reason whatsoever, Employee will promptly
deliver to Employer all documents, data and other information pertaining to
Trade Secrets. Employee shall not retain any documents or other information, or
any reproduction or excerpt thereof, containing or pertaining to any Trade
Secrets.
(d) Competition Purine:
Employment. Employee agrees that during the Term, neither he, nor any of
his affiliates, will directly or indirectly: (i) compete with Employer or its
affiliates in the dirt track racing, promotion and/or sanctioning businesses
(the "Business"); or (ii) act as an officer, director, employee, consultant,
shareholder, equityholder, advisor or agent of any person or entity which is in
competition with Employer; provided, however, that this Section 5(d) shall not
prohibit Employee or any of his affiliates from purchasing or holding an
aggregate equity interest of up to 1% in any publicly-traded company which is in
competition with Employer. Furthermore, Employee agrees that during the Term, he
will undertake no planning for the organization of any business activity
competitive with the Business, and Employee
will not combine or conspire with any other employees of Employer and its
affiliates for the purpose of the organization of any such competitive business
activity.
(e) Competition Following
Employment. Employee agrees that for a period of one-year after the
termination or cessation of his employment for Employer for any reason
whatsoever, neither he, nor any of his affiliates, will directly or indirectly:
(i) compete with Employer or its affiliates in the Business; (ii) act as an
officer, director, employee, consultant, equityholder, lender, advisor or agent
of any person or entity which is in competition with Employer; or (iii)
undertake or plan for the organization of any business activity in competition
with Employer, and Employee will not combine or conspire with any other
employees of Employer or its affiliates for the purpose of the organization of
any such competitive business activity; provided, however, that this Section
5(e) shall not prohibit Employee or any of his affiliates from purchasing or
holding an aggregate equity interest of up to 1% in any publicly-traded company
which is in competition with Employer.
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6. Termination. This
Agreement and the employment relationship created hereby shall terminate upon
the occurrence of any of the following events (each, a "Termination Event"):
(a) The
expiration of the Term;
(b) The death
of Employee;
(c) The
Excessive Absence (as hereinafter defined) of Employee;
(d) Written
notice to Employee from Employer of termination for Just Cause (as hereinafter
defined);
(e) Written
notice to Employee from Employer of termination for any reason other than
subparts (a), (b), (c) or (d) above;
(f) Written
notice to Employer from Employee of termination for any reason other than
Constructive Termination (as hereinafter defined); or
(g) Written
notice to Employer from Employee of termination for Constructive
Termination.
In the
event of the termination of Employee's employment pursuant to (a), (b), (c), (d)
or (f), then Employee shall be entitled to only the compensation earned by
Employee as of, and payable for the period prior to, the date of such
Termination Event. In the event of the termination of Employee's employment
pursuant to (e) or (g) above, Employee shall continue to receive the salary
provided for in Exhibit A as if no
termination had occurred for a period equal to the greater of (i) one year or
(ii) for the remainder of the then current term. Notwithstanding anything to the
contrary in this Agreement, the provisions of Section 5 above shall survive any
termination, for whatever reason, of Employee's employment under this
Agreement.
For
purposes of this Section 6 the following terms have the following
meanings:
"Constructive
Termination" shall mean: (a) a material reduction in Employee's duties and
responsibilities without Employee's consent; (b) if Employee's title of "Chief
Financial Officer is terminated (except for Just Cause); (c) any breach by
Employer of any of the material terms of, or the failure to perform any material
covenant contained in this Agreement and following written notice thereof from
Employee to Employer, Employer does not cure such breach or failure within
fifteen (15) days thereafter; provided, however, that Employer will not be
entitled to cure any such breach or failure more than one time in any
consecutive three month period; (d) a required relocation by Employee from the
Dallas, Texas metroplex; or (e) a reduction in Employee's salary without
Employee's prior written consent.
"Excessive
Absence" of Employee shall mean his inability, for whatever reason other than
disability, to perform his duties under this Agreement for a continuous period
of 60 days or for 120 days out of a continuous period of 240 days.
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"Just
Cause" shall mean (a) the failure of Employee to diligently or effectively
perform his duties under this Agreement, and Employee does not cure such failure
within fifteen (15) days following notice thereof from Employer; provided,
however, that Employee will not be entitled to cure failures under this
subclause (a) more than one time in any consecutive three month period, (b) the
commission by Employee of any act involving moral turpitude or the commission by
Employee of any act or the suffering by Employee of any occurrence or state of
facts, which renders Employee incapable of performing his duties under this
Agreement, or adversely affects or could reasonably be expected to adversely
affect Employer's business reputation, (c) any material breach by Employee of
any of the terms of, or the failure to perform any material covenant contained
in, this Agreement, and Employee does not cure such breach or failure within ten
days following notice thereof from Employer; provided, however, that Employee
will not be entitled to cure any breach or failure under this subclause (c) more
than one time in any consecutive three month period or (d) the violation by
Employee of instructions or policies established by Employer with respect to the
operation of its business and affairs or Employee's failure to carry out the
reasonable instructions of the Board of Directors or CEO.
7. Remedies. Employee
recognizes and acknowledges that in the event of any default in, or breach of
any of, the terms, conditions or provisions of this Agreement (either actual or
threatened) by Employee, Employer's and its affiliates remedies at law shall be
inadequate. Accordingly, Employee agrees that in such event, Employer and its
affiliates shall have the right of specific performance and/or injunctive relief
in addition to any and all other remedies and rights at law, in equity or
provided herein, and such rights and remedies shall be cumulative.
8. Acknowledgments.
Employee acknowledges and recognizes that the enforcement of any of the
provisions set forth in Section 5 above by Employer and its affiliates will not
interfere with Employee's ability to pursue a proper livelihood. Employee
recognizes and agrees that the enforcement of this Agreement is necessary to
ensure the preservation and continuity of the business and good will of Employer
and its affiliates.
9. Notices. Any notices,
consents, demands, requests, approvals and other communications to be given
under this Agreement by either party to the other shall be deemed to have been
duly given if given in writing and personally delivered or sent by facsimile
transmission, courier service, overnight delivery service or by mail, registered
or certified, postage prepaid with return receipt requested, as
follows:
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If
to Employer:
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Boundless
Motor Sports Racing, Inc.
0000
XxXxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn:
Chief Executive Officer
Fax:
(000)000-0000
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with
a copy to:
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Xxxxxxx
X. Xxxxxxx, Esq.
Xxxxxxx
Xxxxxx L.L.P.
0000
X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
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If
to Employee:
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Xxxxx
Xxxxxx
0000
Xxxxxx Xxxx Xxxxx
Xxxxxx,
Xxxxx 00000
(972)
335-3287
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Notices
delivered personally or by facsimile transmission, courier service or overnight
delivery shall be deemed communicated as of actual receipt; mailed notices shall
be deemed communicated as of three days after the date of mailing.
10. Entire Agreement.
This Agreement contains the entire agreement of the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written between the parties hereto with respect to the
subject matter hereof. No modification or amendment of any of the terms,
conditions or provisions herein may be made otherwise than by written agreement
signed by the parties hereto.
11. Governing Law and
Venue. THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
OKLAHOMA, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.
12. Parties Bound. This
Agreement and the rights and obligations hereunder shall be binding upon and
inure to the benefit of Employer and Employee, and their respective heirs,
personal representatives, successors and assigns. Employer shall have the right
to assign this Agreement to any affiliate or to its successors or assigns. The
terms "successors" and "assigns" shall include any person, corporation,
partnership or other entity that buys all or substantially all of Employer's
assets or all of its stock, or with which Employer merges or consolidates. The
rights, duties or benefits to Employee hereunder are personal to him, and no
such right or benefit may be assigned by Employee. The parties hereto
acknowledge and agree that Employer's affiliates
are third-party beneficiaries of the covenants and agreements of Employee set
forth in Section 5 above.
13. Estate. If Employee
dies prior to the payment of all sums owed, or to be owed, to Employee pursuant
to Section 4 above, then such sums, as they become due, shall be paid
to
Employee's
estate.
14. Enforceability. If,
for any reason, any provision contained in this Agreement should be held invalid
in part by a court of competent jurisdiction, then it is the intent of each of
the parties hereto that the balance of this Agreement be enforced to the fullest
extent permitted by applicable law. Accordingly, should a court of competent
jurisdiction determine that the scope of any covenant is too broad to be
enforced as written, it is the intent of each of the parties that the court
should reform such covenant to such narrower scope as it determines
enforceable.
15. Waiver of Breach. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach by any
party.
16. Captions. The
captions in this Agreement are for convenience of reference only and shall not
limit or otherwise affect any of the terms or provisions hereof.
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17. Costs. If any action
at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and necessary disbursements in addition to any other relief to which he or
it may be entitled.
18. Affiliate. An
"affiliate" of any party hereto shall mean any person controlling, controlled by
or under common control with such party.
19. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same
instrument, but only one of which need be produced.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.
BOUNDLESS
MOTOR SPORTS RACING, INC.
/s/ Xxxx X.
Xxxxxx
Xxxx X.
Xxxxxx
Chief
Executive Officer
/s/ Xxxxx
Xxxxxx
Xxxxx Xxxxxx
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EXHIBIT
A
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1.
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Annual Salary:
Annual salary will be at the rate of $180,000 per year, subject to
periodic adjustment at the discretion of the
Board.
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2.
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Bonuses:
Employee shall be entitled to receive bonuses as may be determined by the
Board from time to time, in its sole
discretion.
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3.
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Benefits:
Employee shall be entitled to receive such group benefits as Employer may
provide to its other employees at comparable salaries and responsibilities
to those of Employee (pro rated for partial
years).
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4.
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Automobile
allowance: Employee shall receive a per month
automobile allowance from Employer.
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5.
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Equipment:
Employer shall provide Employee with office equipment including but not
limited to a laptop computer, cellular phone/wireless
PDA.
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6.
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Vacation:
Employee shall receive four (4) weeks paid vacation annually. Unused
vacation shall accumulate over the term of the Agreement and be paid to
Employee at the termination of the Agreement at the Employee's annual
salary rate effective immediately prior to the termination of the
Agreement.
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7.
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Stock Options:
Employee shall be entitled to receive grants of stock options as may be
determined by the Board from time to time, in its sole discretion. The
Employer shall grant to Employee an option to purchase 300,000 shares of
the Employer's common stock at an exercise price of $3.65 (market price on
November 5, 2004). Such options shall become exercisable as follows:
75,000 upon the effective date of this Agreement; 75,000 on February 1,
2006; 75,000 on February 1, 2007; and 75,000 on February 1, 2008. If
Employee is terminated or the Employment Agreement is not renewed, whether
with or without cause, or if said Agreement otherwise expires, any of such
options which have not vested as of the date of such termination shall
become immediately
exercisable.
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