EXHIBIT (d)(6)
EMPLOYMENT AGREEMENT
In consideration of Xxxxx X. Xxxxx'x ("Employee") continued employment
with CART, Inc. ("CART"), and, in particular, CART's agreement to continue
Employee's employment through the announced potential acquisition by Open Wheel
Racing Series LLC ("OWRS") of CART (the "Merger") for a minimum of nine (9)
months following the Effective Time of the Merger, Employee, CART and
Championship Auto Racing Teams, Inc. ("CHAMP") hereby agree as follows:
1. PRIOR AGREEMENT SUPERSEDED. The parties agree that upon execution of
this Employment Agreement, the prior Employment Agreement between Employee and
CHAMP dated December 14, 2002 (the "prior Employment Agreement" attached hereto
as Exhibit A) shall be superseded, and subject to paragraph 2 below, all duties
and obligations of the parties under the prior Employment Agreement are
extinguished and the prior Employment Agreement is void and of no force and
effect as of the date of this Agreement. This means that Employee and CHAMP
agree that all agreements and obligations under the prior Employment Agreement
regarding any past or future compensation, bonuses, or reimbursements whether
upon termination, change in control, death, disability, for cause or no cause,
or otherwise, or that the parties' duties and obligations under the prior
Employment Agreement would survive or be binding on any successors of CHAMP are
null and void, and may not be enforced by either party against the other.
2. EFFECT OF TERMINATION OF MERGER. In the event the merger agreement
between CHAMP and OWRS is terminated, this Employment Agreement shall be void
and the parties agree that the prior Employment Agreement shall be automatically
revived without further action of the parties, and the prior Employment
Agreement will govern Employee's and CART's duties and obligations to each other
as if this Employment Agreement had never existed.
3. BREACH OF THIS EMPLOYMENT AGREEMENT. If either party breaches the terms
of this Employment Agreement, including the parties' agreement to void the prior
Employment Agreement without either party owing any further duties or
obligations to the other, the prevailing party shall be entitled to recover all
reasonable attorney's fees and costs of litigation, including fees and costs on
appeal or in connection with any petition for review.
4. STOCK DIVESTITURE. As a condition of Employee's continued employment
with CART, Employee has, or will by the date of his execution of this Agreement,
divest himself of all stock options that have already vested.
5. TITLE AND DUTIES. CART shall employ Employee as its Chief Operating
Officer, reporting to the Interim CEO, or such other person as the Board of
Directors may designate. As Chief Operating Officer, Employee shall perform his
or her duties faithfully and to the best of Employee's ability, and Employee
shall devote all of his business time, energy and skill to the affairs of CART
and shall discharge his responsibilities in a manner commensurate with
Employee's position.
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6. EMPLOYMENT AT WILL. Employee is an "at will" employee of CART, and
Employee's employment may be terminated at any time by either CART or Employee
for any reason or no reason, by the giving of written notice to the other party,
subject to the terms and conditions of this Employment Agreement.
7. COMPENSATION. Until the Effective Time of the Merger between CART and
OWRS, Employee shall continue to receive his current base salary. Upon the
Effective Time of the Merger, the following shall become effective:
(a) BASE SALARY. For services rendered by Employee pursuant to this
Agreement, Employee shall receive a salary of $210,000, payable in
accordance with CART's normal payroll practices.
(b) BONUS. Employee is not guaranteed any bonus. However, to the extent
a management bonus plan or management incentive plan is developed
following the merger, Employee shall participate in any such plan(s)
adopted by CART on terms comparable to other senior officers of
CART.
(c) FRINGE BENEFITS. Employee shall be eligible to participate in such
of CART's benefit plans as are now generally available or later made
generally available to senior officers of CART, including, without
limitation, medical, dental, life, and disability insurance plans.
To the extent Employee has already been granted the use of an
automobile at CART's expense, Employee shall be able to continue
such use consistent with any automobile use plan or policy adopted
by CART.
(d) VACATION. Employee shall be entitled to 4 weeks of vacation per year
or to that amount of vacation per year generally available or later
made generally available to senior officers of CART. Unused vacation
may be accrued by Employee up to a maximum of six weeks, when it
will cease accruing until Employee reduces the accrued, unused
amount through use of vacation time.
(e) EXPENSE REIMBURSEMENT. CART will reimburse Employee for all
reasonable, ordinary and necessary travel, entertainment and other
expenses incurred by the Employee in conjunction with his or her
services to CART, in accordance with CART's then-existing expense
reimbursement and/or travel policies.
8. DEFINITIONS. For purposes of the Agreement, the following terms shall
have the following meanings:
(a) "ACCRUED COMPENSATION" shall mean any accrued Total Cash Compensation,
any benefits under any plan of CART in which Employee is a participant to the
full extent of Employee's rights under such plans, any accrued vacation pay, and
any appropriate business expenses incurred by the Employee in connection with
the performance of Employee's duties hereunder, all to the extent unpaid on the
date of termination.
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(b) "BASE SALARY" shall have the meaning set forth in Section 7(a) above.
(c) "DISABILITY TERMINATION" means termination by CART of Employee's
employment by reason of the Employee's incapacitation due to disability.
Employee shall be deemed to be incapacitated due to disability if at the end of
any month Employee is unable to perform substantially all of his or her duties
under this Agreement in the normal and regular manner due to illness, injury or
mental or physical incapacity, and has been unable so to perform for either (i)
three consecutive full calendar months then ending, or (ii) 90 or more of the
normal working days during the 12 consecutive full calendar months then ending.
Nothing in this paragraph shall alter CART's obligations under applicable law,
which may, in certain circumstances, result in the suspension or alteration of
the foregoing time periods.
(d) "TERMINATION FOR CAUSE" means termination of Employee's employment by
CART by reason of the Employee's dishonesty or fraud, gross negligence in the
performance of his or her duties hereunder, material breach of this Agreement,
intentional engagement in acts seriously detrimental to CART's operations,
conviction of a felony involving moral turpitude, or violations of Employee's
duties as an employee or failure to perform Employee's duties fully and
satisfactorily, provided, however, that Employee must first receive written
notice of the performance deficiencies and given at least twenty (20) business
days to correct the deficiencies.
(e) "VOLUNTARY TERMINATION" means termination of Employee's employment by
the voluntary action of Employee other than by reason of a Disability
Termination or by Employee's death.
(f) "TERMINATION OTHER THAN FOR CAUSE" means termination of Employee's
employment by CART for any reason other than as specified in paragraphs (c),
(d), or (e) hereof.
9. CONDITIONS OF SEPARATION.
(a) TERMINATION OTHER THAN FOR CAUSE. Upon Termination Other Than For
Cause, CART shall provide Employee with 60 days' written notice of the
termination. Upon the issuance of the notice of termination (the "Notice Date"),
Employee shall be relieved of his duties and obligations as an Employee, and
shall have no authority to act on CART's behalf. CART will pay Employee's base
salary during the 60-day notice period in accordance with the normal payroll
schedule in effect at the time of termination. However, as of the Notice Date,
Employee shall no longer be eligible to participate in CART's incentive plan
programs, bonus programs, or 401(k) plans and will no longer accrue benefits
under CART's benefit plans, including vacation or sick time. The final date of
the notice period shall be considered Employee's Termination Date, and on the
Termination Date, CART shall pay Employee all Accrued Compensation, if any. In
the event Employee is terminated under this provision, during the transition of
Employee's duties, CART agrees to cooperate with Employee in his efforts to
obtain a "green card" in the event Employee has not already obtained a "green
card."
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(b) DISABILITY TERMINATION. CART shall have the right to effect a
Disability Termination by giving 60 days' written notice thereof to the
Employee. Upon Disability Termination CART shall pay Employee all Accrued
Compensation, if any, and at CART's option, CART may elect to pay Employee in
lieu of the 60 days' notice either upon the normal payroll schedule in effect at
the time of termination or in a lump sum payment.
(c) TERMINATION FOR CAUSE. Upon Termination For Cause, CART shall pay the
Employee Accrued Compensation, if any, through the date of termination.
10. SALE OR MERGER PRIOR TO JUNE 1, 2005. In the event Employee is still
employed by CART, and CART is sold or merged with another individual or entity
prior to June 1, 2005, CART agrees to pay Employee a sum equal to three times
his Base Salary (the "Merger Payment"). The Merger Payment shall be paid in
addition to any other sums due or owing under this Agreement, and shall be paid
to Employee within 30 days after the closing of the sale or merger. In addition,
if Employee is terminated in connection with such sale or merger, CART agrees to
continue Employee's benefits at the same benefit rate and with the same pre-tax
contribution by Employee for the earlier of (a) two years after Employee's
termination in connection with a sale or merger prior to June 1, 2005 or (b)
Employee's obtainment of benefits from another employer. In the event, however,
that at the time of the sale or merger, CART has discontinued its benefits plans
or Employee's participation in such plans is barred, CART shall, at its expense,
obtain a policy on behalf of Employee and his dependents substantially similar
to that in which Employee was enrolled prior to his termination. However,
nothing in this provision alters Employee's at-will status or otherwise
obligates CART to employ Employee through June 1, 2005. In addition, Employee
acknowledges that this provision applies only to a sale or merger that occurs
prior to June 1, 2005, and does not apply to a liquidation of CART's business.
11. NO KNOWLEDGE OF MISCONDUCT. By his signature below, Employee
represents and warrants that he is not aware of any claims, assertions or
accusations by third parties or employees that Employee has engaged in any
wrongful conduct, malfeasance, or violations of any laws or regulations,
including, but not limited to, conduct which could give rise to claims for
breach of contract, trademark infringement, violation of licensing or trade
agreements, defamation, tortious interference, unpaid wages or commissions,
discrimination, harassment, retaliation, and to the best of Employee's knowledge
and belief, Employee has not engaged in conduct that could support such claims.
12. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement represents the entire
understanding between the parties with respect to the subject matter of this
Agreement, and supersedes any and all prior and contemporaneous understandings,
agreements, plans, and negotiations, whether written or oral, with respect to
the subject matter hereof, including, without limitation, any understandings,
agreements, or obligations respecting any past or future compensation, bonuses,
reimbursements, or other payments to Employee by CART, including those set forth
in the prior Employment Agreement. All modifications to this Agreement must be
in writing and signed by CART and Employee.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
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Title: President
Date: Sept. 30th 2003
CART, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
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Title: President
Date: Sept. 30th 2003
/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
Date: Sept. 30th 2003
