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Exhibit 10(iv)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 28, 2001, by and between
FanZ Enterprises, Inc. a Delaware Corporation (the "Company") and Xxxxxxx X.
Xxxxxxxxxx (the "Employee").
W I T N E S S E T H:
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WHEREAS, the Company owns and operates racing and merchandising
operating entities that will compete in National Association of Stock Car Racing
("NASCAR") sanctioned events;
WHEREAS, this agreement is contingent upon the breaking of escrow for a
successful public offering of the Company in an amount of at least $10 million;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
1. EMPLOYMENT. Upon the terms and subject to the conditions of this
Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company as its Chief Financial Officer ("CFO") and
in such other capacities as the parties may mutually agree.
2. TERM OF EMPLOYMENT. The initial term of this Agreement (the "Initial
Term") shall commence on the day after escrow is broken on the Company's Initial
Public Offering in an amount of at least $10 million (the "Commencement Date")
and shall continue in effect through the third anniversary of the Commencement
Date (the "Termination Date"); PROVIDED, HOWEVER, that commencing on the
Termination Date and each anniversary thereafter, the term of this Agreement
shall automatically be extended for one (1) additional year (each an "Additional
Term" and collectively with the Initial Term, the "Term of this Agreement")
unless, (a) this Agreement is earlier terminated pursuant to Section 7, or (b)
not later than forty-five (45) days prior to the Termination Date or the end of
any Additional Term, as applicable, the Company or the Employee shall have given
written notice to the other that such party does not wish to extend the term of
this Agreement.
3. DUTIES; EXTENT OF SERVICES.
(a) DUTIES. During the Term of this Agreement, the Employee shall serve
as the CFO of the Company and shall perform the duties, undertake the
responsibilities and exercise the authority customarily performed, undertaken
and exercised by a person in such position in the business in which the Company
is engaged. The Employee shall report to and carry out the lawful directions of
the Board of Directors of the Company (the "Board") that are consistent with his
title and position. Subject to the vote of shareholders, the Employee shall
serve on the Board and the Board of Directors of all subsidiaries of the Company
as directed by the Company. The Employee shall report directly to the President
of the Company.
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(b) EXTENT OF SERVICES. Except during illness and permitted vacation
periods, during the Term of this Agreement, the Employee shall: (i) devote his
full-time and attention to the business of the Company and its subsidiaries and
affiliates; (ii) use his best efforts to promote the interests of the Company;
and (iii) execute such duties not inconsistent with his position as may be
assigned to him by the Board from time to time.
4. COMPENSATION.
In consideration of the services rendered by the Employee hereunder and provided
that the Employee has substantially performed all of his obligations provided
for herein, the Company will pay to the Employee a base salary (the "Base
Salary") at the rate of $175,000 per year, accruing on a daily basis based on
actual days employed. The Base Salary may not be reduced without the prior
consent of the Employee. Increases in the Employee's compensation above the Base
Salary will be in accordance with the Company's policies as determined from time
to time by the Board. For purposes of this Agreement, the Employee's Base
Salary, any bonuses payable to the Employee and any other compensation payable
by the Company to the Employee is hereafter referred to as "Salary". Employee's
Salary will be paid in accordance with the Company's normal payroll practices
and procedures for compensation of the type being paid.
5. BONUS AND INCENTIVE COMPENSATION. In addition to the Base Salary,
the Employee shall be entitled to receive an annual or periodic incentive
compensation pursuant to the terms and conditions of the Company Bonus and
Incentive Compensation Plan. The Bonus and Incentive Compensation Plan will be
completed within ninety (90) days after the conclusion of the fund raising.
6. OTHER EMPLOYEE BENEFITS.
(a) During the Term of this Agreement, the Employee shall be entitled
to: (i) participate in all employee insurance and other fringe benefit programs,
including, without limitation, life, health, dental and accident insurance plans
and long term disability now or hereafter maintained by the Company for
executive or other salaried personnel for which the Employee is eligible; and
(ii) participate in a 401(k) plan with terms similar to those applicable to
executives of the Company.
(b) The Company, in accordance with Company procedures, shall pay all reasonable
and necessary documented travel and other business expenses incident to the
rendering of services by the Employee hereunder pursuant to the practices and
policies of the Company. If any such expenses are paid first by the Employee,
the Company shall reimburse him upon presentation of expense accounts and
appropriate documentation in accordance with customary procedures of the
Company.
(c) The Company shall reimburse the Employee for reasonable moving
expenses in accordance with the Company policy, which will be created within
sixty (60) days after the Commencement Date.
7. TERMINATION PROVISIONS.
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(a) EVENTS OF TERMINATION. The Term of this Agreement, the right of the
Employee to receive his Salary, and any and all other rights of Employee under
this Agreement, or otherwise as an employee of the Company, will terminate
(except as otherwise provided in this Section 7):
(i) upon the death of the Employee (as provided in Section 7(d) below);
(ii) upon the Disability of the Employee (as provided in Section 7(c)
below);
(iii) for "Cause" (as provided in Section 7(b) below);
(iv) at the end of the Initial Term, or any Additional Term (as
provided in Section 2(b) above);
(v) by action of the Company without "Cause" (as provided in Section
7(e) below); or
(vi) by action of the Employee (as provided in Section 7(f) below).
(b) TERMINATION FOR CAUSE. The Board (upon a Majority vote, excluding
the Employee's vote) may terminate the Employee's employment for "Cause", as
hereinafter defined, at any time during the Term of this Agreement, effective
immediately upon written notice by the Company to the Employee. If the
Employee's employment is terminated for Cause, the Employee shall be entitled to
receive only the unpaid portion of Employee's Salary (but excluding any bonuses)
then in effect that has accrued to the date of termination. For purposes of this
Agreement, "Cause" shall mean: (i) dishonesty of the Employee that is materially
detrimental to the best interests of either the Company or any of its
subsidiaries or affiliated companies; (ii) Employee's gross negligence or
willful and continued failure to substantially perform duties pursuant to or
arising under or related to this Agreement after receiving written notice from
the Board outlining such deficiencies; (iii) the Employee's commission of fraud,
misrepresentation, theft or embezzlement relating to the Company's assets, (iv)
the Employee's intentional violation of any local, State, and/or Federal law
and/or regulation that materially impacts the Company; (v) willful violation of
Company policy resulting in material harm to the Company or any of its
subsidiaries or affiliates; or (vi) Employee's conviction of a felony or any
other crime involving moral turpitude or dishonesty. For the purposes of this
Agreement, no act or failure to act will be "willful" unless it is done, or
omitted to be done, in bad faith without reasonable belief that the action or
omission was in the best interest of the Company.
(c) TERMINATION BY REASON OF DISABILITY. If at any time during the Term
of this Agreement, the Board reasonably determines that the Employee has been or
will be unable to perform his duties under this Agreement, as a result of
Disability (as defined herein), the Company may terminate the Employee's
employment upon thirty (30) days written notice to the Employee. If the
Employee's employment is terminated by reason of Disability, the Employee shall
be entitled to receive only the unpaid portion of any Salary accrued through the
date of such termination (including any unpaid bonus accrued through the date of
termination). For purposes
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of this Agreement, the Employee will be deemed to have a "Disability" if, for
physical or mental reasons, the Employee is unable to perform his duties under
this Agreement for a period of 120 consecutive days, or 180 days during any
twelve (12) month period, as determined in accordance with this Section 7(c). A
medical doctor selected by written agreement of the Company and the Employee,
upon the request of either party, will determine the "Disability" of the
Employee. If the Company and the Employee cannot agree on a medical doctor, each
of them will select a medical doctor and the two medical doctors will select a
third medical doctor who will determine whether the Employee had a Disability.
The determination of the medical doctor selected under this Section 7(c) shall
be binding on both the Company and the Employee. The Employee must submit to a
reasonable number of examinations by, and cooperate with, the medical doctor
making the determination of Disability under this Section, and the Employee
hereby authorizes the disclosure and release to the Company of such
determination and all supporting medical records.
(d) TERMINATION BY REASON OF DEATH. The Employee's employment hereunder
shall automatically terminate on the date of his death. If the Employee's
employment is so terminated by his death, the Employee's estate shall be
entitled to receive only the unpaid portion of the Salary through the date of
the Employee's death (including any accrued and unpaid bonuses as of the date of
the Employee's death).
(e) TERMINATION WITHOUT CAUSE. The Board may terminate the Employee's
employment hereunder at any time for any reason without Cause in which case the
Employee shall be entitled to receive the then unpaid Salary that has accrued
through the effective date of the termination and severance equal to double the
annual Salary in effect at the time of such Termination, over a severance period
equal to one (1) year. All severance is to be paid in accordance with the
Company's normal payroll practice. If the Employee is terminated without cause,
the Employee will be eligible to continue his existing benefits, for the same
cost and expense to the Employee as in effect immediately prior to such
Termination, for the one (1) year severance period.
(f) RESIGNATION. The Employee may at any time resign from his
employment.
(i) Without reason, the Employee may resign from his employment
upon thirty (30) days written notice to the Company. In the event of such
resignation, the Employee shall be entitled to receive the unpaid portion of
Salary (excluding Bonuses) that has accrued through the date of his resignation.
If the Employee resigns, the Employee will be eligible to continue his health
benefits for the Term of this Agreement.
(ii) With Good Reason, the Employee may resign from his employment.
In such instance the resignation shall be treated as a Termination Without Cause
and the Employee shall be entitled to receive the same severance, benefits and
conditions as outlined in Section 7(e) above. "Good Reason" shall mean that,
without the Employee's consent, the Company has:
A. caused a material reduction in the Employee's title,
status, authority or responsibility with the Company;
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B. decreased the Employee's Base Salary; or
C. permitted a Change of Control in the Company.
A "Change of Control" shall mean (i) the consummation of a
merger, consolidation or other corporate reorganization of the
Company with or into another entity in which more than 50% of
the combined voting power is transferred to an unaffiliated
entity or the securities of the surviving entity outstanding
immediately after such merger, consolidation or other
reorganization are owned by a person or persons who were not
stockholders of the Company immediately prior to such merger,
consolidation or reorganization; or (ii) the sale, transfer or
other disposition of all, or substantially all, of the
Company's assets. The transaction shall not constitute a
Change of Control if its sole purpose is to change the state
of incorporation, create a holding company that will be owned
in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction
or for the estate planning purposes of the current owners of
the majority of the Company's stock.
(g) BENEFITS. Unless otherwise noted to the contrary herein, the
Employee's accrual of, or participation in plans providing for, any benefits
(including vacation, holiday, sick leave, etc.) (collectively "Benefits") will
cease at the effective date of the termination of this Agreement, and the
Employee will be entitled to accrued Benefits pursuant to such plans only as
provided in such Plans.
8. COVENANTS OF THE EMPLOYEE.
(a) NON-COMPETITION. From the Commencement Date and until the first
anniversary of the date of the termination of the Employee's employment
hereunder, the Employee shall not, directly or indirectly, have a financial
interest in or render services to or on behalf of (whether as a director,
officer, employee, agent, consultant, partner, owner, independent contractor or
otherwise) any entity that competes with the Company, or personally engage in
any activity, which competes with the Company, or any of its subsidiaries or
affiliates, in the motorsports industry.
(b) NON-SOLICITATION OF CLIENTS, SUPPLIERS, DISTRIBUTORS AND EMPLOYEES
OF THE COMPANY. From the Commencement Date until the second anniversary of the
date of the termination of this Agreement, the Employee shall not solicit, and
shall not assist any business or entity in soliciting, (1) any person or entity
who was a client, supplier, sponsor or distributor of the Company, or any of its
subsidiaries or affiliates, at any time prior to the date of such termination or
(2) for employment or employ any person (as an employee, consultant or
otherwise) who is on the date of termination, or who was at any time during the
six (6) months prior to the date of termination, employed in a professional or
managerial position by the Company or any of its subsidiaries or affiliates.
(c) CONFIDENTIALITY. The Employee agrees and acknowledges that the
Confidential Information (as defined below) of the Company and its subsidiaries
and affiliates is
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valuable, special and unique to their respective businesses; that such
businesses depend on such Confidential Information; and that the Company wishes
to protect such Confidential Information by keeping it confidential for the
exclusive use and benefit of the Company and its subsidiaries and affiliates.
Based on the foregoing, the Employee agrees to undertake the following
obligations with respect to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential Information in
trust for the exclusive use and benefit of the Company and its subsidiaries and
affiliates;
(ii) the Employee agrees that, except as required by applicable law or
as authorized in writing by the Board, he will not at any time during or after
the termination of his employment hereunder, disclose to any third party,
directly or indirectly, any Confidential Information of the Company or any of
its subsidiaries or affiliates;
(iii) the Employee agrees to take all reasonable steps necessary, or
reasonably requested by the Company, to ensure that all Confidential Information
is kept confidential for the exclusive use and benefit of the Company and its
subsidiaries and affiliates; and
(iv) the Employee agrees that, upon termination of his employment
hereunder, or at any other time, the Company may in writing so request that he
promptly deliver to the Company all materials constituting Confidential
Information (including all copies thereof) that are in his possession or under
his control.
The Employee further agrees that, if requested by the Company, to
return any Confidential Information pursuant to subparagraph (iv) above, he will
not make or retain any copy or extract from such materials.
(d) For purposes of this SECTION 8, "Confidential Information" means
any and all information developed by or for the Company and any of its
subsidiaries or affiliates of which the Employee gains or has acquired knowledge
by reason of his employment with the Company that is (i) not generally known in
any industry in which the Company or any of its subsidiaries or affiliates is or
may become engaged or (ii) not otherwise publicly available (other than by a
breach by another person of its confidentiality obligations to the Company).
Subject to the foregoing, Confidential Information includes, but is not limited
to, any and all information developed by or for the Company or any of its
subsidiaries or affiliates concerning plans, marketing and sales methods,
customer lists, materials, processes, business forms, procedures, devices, plans
for development of products, services or expansion into new areas or markets,
internal operations, any trade secrets and proprietary information of any type
owned by the Company or any of its subsidiaries or affiliates, together with all
written, graphic and other materials relating to all or any part of the same.
9. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns. Neither this
Agreement nor any right or interest hereunder may be assigned by the Employee,
his beneficiaries, or legal representatives without the prior written consent of
the Board.
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10. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered by hand, mailed by
first-class registered or certified mail, postage prepaid and return receipt
requested, or delivered by overnight courier addressed as follows:
(i) If to the Company:
By Mail
FanZ Enterprises, Inc.
0000-X Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx X. XxXxxxxx XX
Or by fax
978/383-8296
Or by Electronic mail
xxxxx@xxxxx.xxx
(ii) If to the Employee:
Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Or by fax
561/658-3212-
Or by Electronic mail
Xxxxx00@xxxxx.xxx
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
11. GOVERNING LAW; EXPENSES.
(a) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of law principles thereof.
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(b) EXPENSES. All costs and expenses (including attorneys' fees)
incurred in connection with any claim, dispute or litigation pertaining to this
Agreement shall be paid by the party incurring such expenses, unless otherwise
determined by a court of law or arbitration.
12. ENTIRE AGREEMENT. Except as provided in Section 18 of this
Agreement, this Agreement contains the entire agreement of the parties and their
affiliates relating to the subject matter hereof and supersedes all prior
agreements, representations, warranties and understandings, written or oral,
with respect thereto.
13. SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons, property or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall remain
valid and enforceable to the fullest extent permitted by law.
14. REMEDIES.
(a) INJUNCTIVE RELIEF. The Employee acknowledges and agrees that the
covenants and obligations of the Employee contained in SECTION 7 hereof relate
to special, unique and extraordinary matters and are reasonable and necessary to
protect the legitimate interests of the Company and its subsidiaries and
affiliates and that a breach of any of the terms of such covenants and
obligations may cause the Company irreparable injury for which adequate remedies
at law are not available. Therefore, the Employee agrees that the Company shall
be entitled to an injunction, restraining order, or other equitable relief from
any court of competent jurisdiction, restraining the Employee from any such
breach.
(b) REMEDIES CUMULATIVE. The Company's rights and remedies under this
SECTION 14 are cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity.
15. WITHHOLDING TAXES. The Company may deduct any federal, state or
local withholding or other taxes from any payments to be made by the Company
hereunder in such amounts that the Company may reasonably determine are required
to deduct under applicable law.
16. AMENDMENTS, MISCELLANEOUS, ETC. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by all parties to this Agreement.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and shall be the valid and binding agreement of the parties when
such counterparts have been duly executed and delivered by each party hereto.
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18. INCORPORATION BY REFERENCE. The terms and conditions of that
"Option Agreement" dated February 28, 2001 by and among the parties hereto, are
hereby incorporated by reference and made a part of this agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
FanZ Enterprises, Inc.
By: /s/ Xxxxxxxxx X. XxXxxxxx XX
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Name: Xxxxxxxxx X. XxXxxxxx XX
Title: President
/s/ Xx. Xxxxxxx X. Xxxxxxxxxx
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Xx. Xxxxxxx X. Xxxxxxxxxx
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