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Exhibit 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered this ____ day of
________________, 1997, by and between Championship Auto Racing Teams, Inc., 000
X. Xxx Xxxxxx Xxxx, Xxxxx 000, Xxxx, XX 00000, ("Employer") and Xxxx Xxxxx, 0000
Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000 ("Employee").
WITNESSETH:
WHEREAS, Employee has substantial expertise in commercial marketing and
promotional activities;
WHEREAS, the Employer desires to retain Employee as Executive Vice
President, Marketing;
WHEREAS, Employee is willing to serve the Employer in that capacity
upon the terms and conditions set forth herein; and
WHEREAS, the parties are desirous of reducing the terms and conditions
of such employment to a written agreement.
NOW THEREFORE, in consideration of the foregoing, the mutual covenants
and promises herein contained and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I - EMPLOYMENT
The Employer hereby employs Employee and Employee agrees to be so
employed in the capacity of Executive Vice President, Marketing, in accordance
with the terms and conditions of this Agreement and the Employer's Employee
Handbook, provided, however, that where there is any conflict between the
Employee Handbook and this Agreement, the terms of this Agreement shall apply.
Employment shall be for the term of two (2) years beginning May 12, 1997, unless
earlier terminated or extended as provided herein. No later than six (6) months
prior to the end of the initial term hereof, the parties will commence and
continue good faith discussions for forty five (45) days regarding the renewal
of this Agreement on terms acceptable to both parties. In the event mutually
agreeable terms are not agreed for such renewal, this Agreement shall terminate
in accordance with its stated term.
ARTICLE II - DUTIES
Employee's duties will be assigned by the Employer's Chief Executive
Officer, and will include overall supervision of the Employer's marketing
division. Employee agrees to perform such functions and any other functions
requested by the Employer that are consistent with Employee's position as
Executive Vice President, Marketing. Employee shall report directly to the Chief
Executive Officer of the Employer. Employee shall devote his full business time,
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energies and best efforts to the performance thereof, to the exclusion of all
other business activities, except such other activities as the Employer may
consent to in writing, and for normal passive investment activities.
ARTICLE III - COMPENSATION AND BENEFITS
A. The Employer shall pay Employee an annual base salary of One Hundred
Eighty Five Thousand ($185,000.00) Dollars during the first year of this
Agreement, and Two Hundred Thousand ($200,000.00) Dollars during the second year
of this Agreement.
B. In addition to the annual base salary, Employee shall also receive
an incentive compensation bonus on an annual basis, in an amount to be
recommended by the Employer's Chief Executive Officer, and approved by the
Employer's Compensation Committee. The Employer's Chief Executive Officer shall
develop forthwith a specific bonus plan which will provide the criteria and
formula to be applied in evaluating Employee's performance. The goals to be met
by Employee as formulated in the bonus plan shall be quantitative, definite,
qualifiable and reasonably attainable.
C. Such additional incentive compensation bonus shall not be less than
Forty Thousand ($40,000.00) Dollars for the first year of this Agreement, and
shall not exceed twenty (20%) percent of Employee's annual base salary for the
second year of this Agreement.
D. Additional incentive compensation bonuses shall be calculated and
paid within thirty (30) days following the end of each calendar year during this
Agreement.
E. Except as otherwise provided in this Agreement, Employee shall be
entitled to participate in the fringe benefit programs generally available to
the most senior executives (other than the Chief Executive Officer) of the
Employer.
F. Employee shall be entitled to three (3) weeks of paid vacation
during each completed year of employment with the Employer.
G. The Employer shall pay, either directly or by reimbursement, upon
presentation of appropriate vouchers, all travel, business, and entertainment
expenses reasonably incurred in the performance by Employee of his duties
hereunder. For such purpose, Employee shall submit to the Employer reports of
such expenses and other disbursements once in each calendar month, and in a
manner consistent with the Employer's travel and expense reimbursement policy.
H. Upon the expiration of this Agreement, or the earlier termination of
Employee's employment, as provided herein, Employee shall only be entitled to
such compensation and benefits as shall have actually been earned or accrued as
of such time, except as otherwise expressly stated in this Agreement.
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ARTICLE IV - RELOCATION
A. Upon the execution hereof, Employee shall establish forthwith his
primary residence in the Detroit, Michigan area. The Employer shall pay or
reimburse Employee for the actual and reasonable moving expenses incurred by
Employee in relocating to the Detroit, Michigan area. Employee shall obtain at
least three (3) estimates in this regard, and the Employer shall select the
company to provide such service.
B. The Employer shall pay or reimburse Employee for (i) the cost of
reasonable temporary lodging expenses in the Detroit, Michigan area and (ii) the
cost of necessary commuting by air to Florida, up to Four Thousand ($4,000.00)
Dollars, until such time as Employee is able to dispose of his Florida residence
or ninety (90) days after the execution hereof, whichever occurs sooner.
C. The Employer shall pay or reimburse Employee for certain relocation
expenses that are incurred by Employee, including all brokerage commissions and
closing costs incurred in connection with the sale of Employee's Florida
residence, and fifty (50%) percent of the closing costs and points (maximum of
two (2) incurred in connection with the acquisition of a permanent residence in
the Detroit, Michigan area. The Employer shall also pay all fees and expenses
incurred in utilizing a professional independent relocation company, as well as
an advancement of the equity to be realized upon the sale of Employee's Florida
residence, to enable Employee to acquire a residence in the Detroit, Michigan
area prior to the closing on the sale of Employee's Florida residence. The
Employer shall contract directly with the relocation company, and the document
containing the terms of such arrangement shall be attached hereto.
ARTICLE V - TERMINATION OF EMPLOYMENT
The employment of Employee under this Agreement may be terminated in
accordance with any of the following:
A. By Employee's death, or if in the reasonable opinion of the Chief
Executive Officer of the Employer, Employee shall by reason of ill health or
incapacity, physical or mental, be or become unable to perform the duties as
prescribed hereunder, for a consecutive period of sixty (60) days or an
aggregate total of ninety (90) days;
B. By either party for reasonable cause; termination shall be deemed
for reasonable cause if the non-terminating party commits or incurs any of the
following:
i) dishonesty in dealing with the other party, or any
related third party;
ii) conviction of a felony;
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iii) Employee's repeated failure or refusal after warning
to fulfill his obligations under this Agreement; or
iv) conduct relating to or involving the Employer or the
Employer's business tending in the reasonable
judgment of the terminating party to bring the
terminating party, or any sponsor of the Employer,
into material disrepute; or
C. By mutual written agreement.
ARTICLE VI - NON-COMPETITION
Employee agrees that so long as he is in the employ of the Employer and
for a period of twelve (12) months thereafter, he will not directly or
indirectly (i) participate as an owner, stockholder, manager, agent, consultant,
director or employee of a United States domiciled professional motor racing
sanctioning body, league or series, or any affiliated organization, provided,
however, that ownership of one (1) percent or less of the outstanding shares of
a publicly traded corporation shall not constitute a violation of this
provision; or (ii) attempt to induce any employee of the Employer to render
services for any other employer.
ARTICLE VII - CONFIDENTIAL INFORMATION
Employee acknowledges that all manuals, systems, procedures, rules and
regulations, business methods and any other communications and documents, trade
names, drawings, engineering or other data, photographs, samples, literature and
all sales aids of any kind furnished by the Employer, or otherwise obtained by
Employee, which are not in the public domain, are confidential information and
shall not be used in any manner without the prior written consent of the
Employer. Upon the termination or expiration of this Agreement, all
aforementioned and described items that have come into the possession of
Employee shall be returned to the Employer. The restrictions contained in this
Article VII shall continue in effect for three (3) years after the termination
of this Agreement, or until such time as such confidential information shall
cease to be confidential and shall become part of the public domain.
ARTICLE VIII - GOVERNING LAW
The validity, interpretation and performance of this Agreement shall be
governed and construed by the laws of the State of Michigan.
ARTICLE IX - REMEDY FOR BREACH
Employee acknowledges that breach of this Agreement by him may result
in irreparable injury to the Employer, and agrees that the Employer shall be
entitled to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages
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for any breach of this Agreement, or to enforce the specific performance of this
Agreement by Employee, or to enjoin Employee from activities in violation of
this Agreement.
ARTICLE X - ARBITRATION
Except as provided in Article IX above, in the event any dispute arises
from or relating to Employee's employment with the Employer, including, but not
limited to, any claim regarding termination of employment, harassment, or
violation of policy, which cannot be resolved informally, such dispute must be
submitted to arbitration and resolved by a single arbitrator in accordance with
the Commercial Arbitration Rules of the American Arbitration Association located
in Southfield, Michigan. The award or decision rendered by the Arbitrator will
be final, binding and conclusive and judgment may be entered upon such award by
any court having proper jurisdiction. Further, any dispute or claim shall be
deemed waived by Employee unless arbitration is demanded by him within ninety
(90) days of the occurrence giving rise to the dispute or claim.
ARTICLE XI - SEVERABILITY
The provisions of this Agreement are severable and, in the event that
any court of competent jurisdiction shall determine that the covenants herein
contained are invalid as to any part of the period or any part of the territory
covered hereby, such covenant shall nevertheless be enforceable as to the
balance of such period or territory.
ARTICLE XII - MODIFICATION
This Agreement contains the entire agreement of the parties hereto with
respect to its subject matter, and no representations, inducements, promises, or
agreements, oral or otherwise, not embodied herein shall be of any force or
effect. This Agreement may be modified only upon the written consent of the
parties hereto.
ARTICLE XIII - NOTICES
All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
To the Employer: To the Employee:
Mr. Xxxxxx Xxxxx, Chief Executive Officer Mr. Xxxx Xxxxx
Championship Auto Racing Teams, Inc.
000 X. Xxx Xxxxxx Xxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
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With a Copy to: With a Copy to:
Xxxxxxx X. Xxxxx, Esq. Xxxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx X Moses & Singer, LLP
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ARTICLE XIV - INDEMNIFICATION
The Employer shall indemnify and hold Employee harmless
against any and all claims, liabilities, demands, causes of action,
judgments, settlements and expenses, including, without limitation,
reasonable costs of investigations and legal counsel fees which may be
imposed on Employee due to, arising from, connected with or in any way
relating to Employee as long as such claim, etc., arises either
directly or indirectly from any act or omission of Employee occurring
in the scope of his employment by the Employer. The indemnification
contained herein shall remain in full force and effect and survive the
expiration or termination of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the day and year first above written.
CHAMPIONSHIP AUTO RACING
TEAMS, INC.
Xxxxxx Xxxxx, Chief Executive Officer Xxxx Xxxxx, Individually
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