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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 1, 1998 by and between Bikers Dream, Inc., a
California corporation, and its affiliated companies (collectively, the
"Company" "Corporate Group"), and Xxxxxx X. Xxxxxxx, an individual, residing at
XXXXXXXXXXXXXXXXXXXXXXXXX, California XXXXXXXXXX ("Executive").
W I T N E S S E TH:
WHEREAS, the Company is in the business of manufacturing, retailing, selling,
distributing, and servicing of heavyweight motorcycles, parts, and accessories
(the "Business");
WHEREAS, the Company wishes to avail itself of the advice and services of
Executive, and Executive wishes to be employed by the Company;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
set forth herein, the parties hereto agree as follows:
1. Retention and Term. Subject to the terms and conditions of this
agreement, the Company agrees to employ Executive, and Executive hereby
accepts employment by the Company, as its General Counsel, commencing on
the date hereof and continuing for a period of three (3) years (the
"Term"), unless extended or earlier terminated pursuant to this
Agreement.
2. Duties.
(a) During the Term, Executive shall render his services to the
Company as General Counsel, and shall have such powers and shall
perform such duties as usually pertain to such office and as may
reasonably be requested by the Company commensurate with his
position and consistent with the requirements of this Agreement.
Executive shall report directly to the President and CEO of the
Company. Executive's performance shall be periodically reviewed
to assess Executive's performance for the purpose of determining
such matters as salary increases, additional stock option
awards, bonuses, etc.
(b) Executive agrees to devote his full working time and efforts to
the business and affairs of the Corporate Group, subject to the
following with respect to the "Initial Period," and hold such
offices in members of the Corporate Group to which he shall
accept, such acceptance not to be unreasonably withheld and to
which from
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time to time he may be elected or appointed, provided that they
are of the same character and of at least the same degree of
responsibility as the offices in the Company he shall hold
pursuant to the terms of this Agreement.
(c) The Initial Period will run from the effective date hereof until
Executive informs the Company that he has reached a point, with respect to his
former private law practice, that he is able to devote his full-time efforts to
the affairs of the Company. Until such time, Executive will devote half-time to
the affairs of the Company, with his compensation therefore adjusted
proportionally. Thereafter, Executive will devote his full-time efforts to the
affairs of the Company and his compensation will increase to the annual amount
set forth herein.
3. Compensation.
(a) Salary. During the Term, unless otherwise stated, the Company
shall pay to Executive an annual salary of $150,000 payable in
monthly installments of $12,500. Executive's performance will be
reviewed annually and his salary adjusted based on such review
and the Company's financial condition.
(b) Executive shall be eligible to participate in such bonus plans,
stock grants and/or stock option plans applicable to executive
officers of the Company as may be established by the Board from
time to time, pursuant to the terms of such plans.
4. Benefits.
(a) Executive shall be entitled to health and hospitalization
benefits without a waiting period, unless such benefits are
already covered. In addition, Executive shall be entitled to
disability and such other benefits as are made available from
time to time to any executive employee of the Company. The
Company's Director & Officer Liabilities Insurance shall be
extended to the Executive.
(b) Executive shall be entitled to reimbursement for all normal and
reasonable travel, entertainment and other expenses necessarily
incurred by him in the performance of his duties hereunder, in
all cases in accordance with Internal Revenue Service
guidelines. Executive shall submit on a timely basis such
itemized accounts of such expenses, together with such vouchers
or receipts for individual expense items, as the Company may
from time to time require under its established policies and
procedures.
(c) Executive shall be entitled to two non-consecutive weeks'
vacation each calendar year during the Term. No compensation
shall be paid to Executive for any vacation not taken in respect
of any calendar year, and Executive shall not be
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entitled to carry over into any succeeding year any vacation
time unused in the prior year.
5. Termination on Death. If Executive dies during the Term, this Agreement
shall thereupon immediately terminate.
6. Termination for Certain Causes. In the event of Executive's (a)
malfeasance, gross neglect or willful misconduct in the performance of
his duties under this Agreement, b) failure to perform substantially his
obligations under this Agreement (other than by reason of death or
disability contemplated by Section 4(e) or (5) or (c) act of fraud,
gross dishonesty or harassment against the Company or any of its
employees, which default under clause (a) or b) (if susceptible to cure)
continues uncured 30 days after written notice from the Company to
Executive, this Agreement and Executive's employment hereto terminated
by the Company without notice except as contemplated by this sentence.
6.a. Other Termination. In the event Executive's employment is terminated for
any other reason, Executive will be entitled to six (6) months
severance, if then employed for one (1) year or less, and one (1) year
severance if then employed for more than one (1) year.
7. Payments Upon a Change in Control.
(a) On the date of any termination of Executive's employment
hereunder arising pursuant to a Change in Control (as
hereinafter defined), if there exists no basis for termination
pursuant to Section 6 of this Agreement, the Company shall pay
to Executive an amount equal to six (6) month's salary, as
determined according to the amount paid to Executive at the time
of termination, payable on a monthly basis.
b) A "Change in Control" shall occur when:
(i) any person (as such term is used in Sections 3(a)(9) and
13d(3) of the Securities Exchange Act of 1934 as in
effect on the date hereof, herein called the "Act"),
other than a person beneficially owning (as such term is
used in Section (d)(1) of the Act) 15% or more of the
voting securities of the Company on May 1, 1998 or any
person substantially all of the equity of which is owned
by the persons who beneficially owned the voting
securities of the Company on May 1, 1998, becomes the
beneficial owner, directly or indirectly, of securities
representing at least 25% of the combined voting power
of the then outstanding securities of the Company;
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(ii) During any period of twenty-four consecutive months
(commencing before or after the date of this Agreement),
individuals who, at the beginning of such period
constituted the Company's Board of Directors, cease for
any reason to constitute at least a majority thereof,
unless the election, or the nomination for election, of
each new director (A) was approved by a vote of at least
two-thirds of the directors then still in office who
were directors at the beginning of the period or B) was
pursuant to an arrangement the same or substantially
similar to any arrangement pursuant to which such new
director's predecessor was nominated;
(iii) unless theretofore approved by a vote of at least two
thirds of the Continuing Directors (as hereinafter
defined), there is the approval by the stockholders of
the Company of any merger or consolidation, or any sale,
lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of
transactions) of any assets of the Company or any
subsidiary with or to (A) any Interested Stockholder
hereinafter defined) or B) any other person which is, or
after such transaction would be, an Affiliate (as
hereinafter defined) of an Interested Stockholder; or
(iv) there is the approval by the stockholders of the Company
of any plan or proposal for the Company to be Acquired
(as hereinalter defined) or for the liquidation or
dissolution of the Company.
(c) The Company shall be considered to be "Acquired" only if the
owners of their respective voting securities immediately prior
to the effective date of any sale, reorganization, merger,
consolidation, liquidation or similar transaction will not own
immediately thereafter, as a result of having owned such voting
securities, securities representing a majority of the combined
voting power of the then outstanding securities of the Company
or the entity that then owns, directly or indirectly, the
Company or all or substantially all of its assets.
(d) "Interested Stockholder" shall mean any person (other than the
Company, any subsidiary thereof, any person owning any voting
securities of the Company on May 1, 1998 or any person
substantially all of the equity of which is owned by the persons
beneficially owned the voting securities of the Company on May
1, 1998) who or which:
(i) is the beneficial owner, directly or indirectly, of
securities representing 10% or more of the combined
voting power of the then outstanding securities of the
Company;
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(ii) is an Affiliate of the Company, and at any time within
the two year period immediately prior to the date in
question was the beneficial owner, directly or
indirectly, of securities representing 10% or more of
the combined voting power of the then outstanding
securities of the Company;
(iii) is an assignee of or has otherwise succeeded to any
voting securities of the Company which were at any time
within the two year period immediately prior to the date
in question beneficially owned by an Interested
Stockholder, if such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(e) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Act.
(f) "Continuing Director" means any member of the Company's Board of
Directors who is unaffiliated with the Interested Stockholder
and was a member of the board prior to the time that the
Interested Stockholder became an Interested Stockholder and any
successor or a Continuing Director who is unaffiliated with the
Interested Stockholder and is recommended to succeed a
Continuing Director by a vote of at least two-thirds of the
Directors then on the Board.
8. Confidentiality.
(a) Executive understands and acknowledges that, as a result of
Executive's employment with the Company, he shall necessarily
become informed of, and shall have access to, confidential
information of the Company's products, including, without
limitation, inventions, trade secrets, technical information,
know-how, plans, specifications, marketing plans and
information, pricing information, identity of customers and
prospective customers, identity of suppliers, and that such
information, even though it may have been or may be developed or
otherwise acquired by Executive, is the exclusive property of
the Company, to be held by Executive in a fiduciary capacity and
solely for the Company's benefit. Executive shall not at any
time, either during or subsequent to his employment hereunder,
reveal, represent (transfer or otherwise disclose to any person,
Company or other entity, or use, any of the Company's
confidential information which Executive, in the exercise of
reasonable diligence knows to be confidential, without the
written consent of the members of the Company other than
Executive), except for use on behalf of the Company in
connection with the Business and except for such information
which legally and legitimately is or becomes of general public
knowledge from authorized sources other than Executive. The duty
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of confidentiality does not apply to generic legal knowledge or
expertise acquired during the period of employment or legal
strategies or techniques employed during this time. This
obligation of confidentiality is in addition to the obligation
that an attorney owes to a client as to confidential
communications.
b) Upon the termination of his employment with the Company for
reason, Executive shall promptly deliver to the Company all
drawings, manuals, letters, notebooks, reports and copies
thereof and all other materials, including, without limitation
those of a secret or confidential nature, relating to the
Business which are in Executive's possession or control. The
Company shall reimburse Executive for any packing or moving
costs reasonably incurred by Executive in connection with the
foregoing delivery. This does not apply to legal forms or
pleadings used or developed by Executive.
(c) For purposes of this Section 8 and Sections 9 and 10, the term
includes the Company, any predecessor company, and any of their
respective affiliates (including, without limitation,
distributors, licensees, subsidiaries and joint ventures).
9. Developments.
(a) Executive shall disclose promptly and fully, in writing whenever
possible, to the Company and to its designated representatives
and agents, all ideas, devices, inventions, improvements,
developments, computer software, product marks and designations,
information and know-how, whether or not patentable,
copyrightable or otherwise protectable relating in any way to
the Business (referred to together herein as "Developments"),
which Executive conceived or made or may conceive or make,
whether solely or jointly with others.
(i) while Executive is or has been employed with the Company
or its predecessors, whether during or out of the usual
hours of work; and
(ii) within one year after termination of Executive's
employment with the Company.
All of such Developments required to be disclosed to the Company are referred to
herein as the "Proprietary Developments." Executive agrees that all of
Executive's right, title and interest in and to the Proprietary Developments
shall be deemed to be held by Executive in a fiduciary capacity and solely for
the Company's benefit, shall be the sole and exclusive property of the Company
and shall be subject to the confidentiality provisions of this Agreement as
confidential
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information of the Company. This does not apply to general legal expertise,
knowledge, techniques or strategies.
(b) Executive, when requested to do so, either during or after his
tenure with the Company, shall, for no additional compensation
(except as contemplated Section 7(d)):
(i) assign and convey to the Company in writing Executive's
entire right, title and interest in and to the
Proprietary Developments to the extent not owned by the
Company as a matter of law from the time of their
creation;
(ii) execute, acknowledge and deliver all such instruments of
assignment, transfer and conveyance, and any such
further instruments and documents, in form and substance
satisfactory to the Company, as the Company shall
reasonably deem necessary or advisable to evidence the
vesting in the Company of all right, title and interest
of Executive in and to the Proprietary Developments;
(iii) assist the Company and its designated representatives
and agents preparing patent, copyright or other
applications, domestic and foreign, covering the same
and sign and deliver all such applications and
assignments thereof to the Company and;
(iv) generally, give all information and testimony, sign all
papers and do all things which may be needed or
reasonably requested by the Company to the end that the
Company may obtain, extend, reissue, maintain and
enforce United States and foreign patents or copyrights
or other rights or registrations covering the
Proprietary developments.
(v) This section does not apply to general legal advise
rendered which would be subject to the attorney-client
privilege that Bikers Dream, Inc. would otherwise enjoy.
(c) Executive hereby irrevocably nominates and appoints the Company
as his attorney-in-fact to sign and deliver all such papers, and
perform all such acts, mentioned in this Section 9, in the event
of Executive's absence, unavailability, refusal or death, such
and appointment hereby being granted with full authority in the
premises, and such be deemed coupled with a valuable interest
vested in the Company.
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(d) The Company shall bear all expenses which it causes to be
incurred in obtaining, extending, reissuing, maintaining and
enforcing such patents, copyrights or other rights or
registrations and investing and perfecting title thereto in the
Company, and shall pay Executive for any time which it may
require of him therefore subsequent to the termination of his
employment with the Company, such payment to be at an hourly
rate equivalent to that at which Executive is or was paid (at
her then-current or, if no longer employed by the Company the
most recent, salary) during his employment with the Company.
(e) In the event of the unenforceability of all or part of the
foregoing provisions of this Section 9, as determined by a court
of competent jurisdiction, Executive hereby transfers and
assigns to the Company such lesser interests in the Proprietary
Developments including, without limitation, any and all United
States and foreign patent rights and copy rights therein and
renewals thereof, as may be determined by such a court to be a
reasonable grant of interests under the circumstances, but, in
any event, and without limitation, Executive shall be deemed to
have granted to the Company not less than an irrevocable,
non-exclusive license with the right to sub-license others, to
manufacture, use, lease and sell the Proprietary developments
which have not been assigned to the Company under the provisions
of this Section 9 without payment of any royalty.
(f) Executive shall permit the use in a commercially reasonable
manner of his name or likeness in connection with any use of, or
other dealings by the Company in respect of any Proprietary
Developments during and after the period of his employment
hereunder.
10. Non-Competition. Executive agrees that, for the period commencing on the
date hereof and ending two (2) years after the termination of his
employment with the Company for any reason, he shall not, anywhere in
the United States of America (or lesser area or such lesser period as
may be determined by a court of competent jurisdiction; a reasonable
limitation on the competitive activity of Executive), directly or
indirectly;
(i) engage, as an independent contractor or otherwise, in any
activity for or on behalf of any person or entity in a line of
business competitive with the Business, any aspect thereof,
including any foreign person or entity that has a significant
distribution system within the United States of America, or
engage in any manner in the Business;
(ii) except for the benefit of the Company, solicit or attempt to
solicit business of entities who were customers of the Company
at any time within the prior two years (including prospective
customers solicited by the Company) for products or
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services the same or similar to those offered, sold, produced or
under development by the Company or dealt in by Executive,
during his employment therewith;
(iii) interfere with the Company, the Business or the conduct thereof
by the Company, or otherwise divert or attempt to divert from
the Company any business whatsoever;
(iv) solicit or attempt to solicit for any business endeavor any
employee of the Company;
(v) use the name of the Company or any name used by the Company or
any name similar to any thereof, or;
(vi) render any services as an officer, director, employee, partner,
consultant or otherwise to, or have any interest as a member,
stockholder, partner, lender or otherwise in, any person which
is engaged in activities which, if performed by Executive would
violate this Section 10.
11. Remedies and Survival. Because the Company does not have an adequate
remedy at law to protect its interest in its trade secrets, privileged,
proprietary or confidential information and similar commercial assets,
including, without limitation, any Proprietary Developments, or its
business from Executive's competition, the Company shall be entitled to
injunctive relief in addition to such other remedies and relief that
would, in the event of a breach in the provisions of Sections 8, 9 or
10, be available to the Company. The provisions 8, 9 and 10 and this
Section 11 shall survive any termination of Executive's employment with
the Company.
12. Indemnification. Executive shall indemnify, defend and hold harmless the
Company from and against, and reimburse the Company for, any loss,
damage, liability (including any liability by reason of any settlement
of a claim, action, suit or proceeding or expense (including reasonable
attorneys' fees and disbursements) arising out of or connected with (a)
any breach or inaccuracy of any covenant of Executive contained in this
A or in any other document simultaneously delivered pursuant to or in
connection with this agreement, or (b) any claim, action, allegation,
suit or proceeding asserted or instituted arising out of any matter or
thing covered by this Agreement or any document or agreement
simultaneously delivered pursuant to or in connection with Agreement.
13. Supersedes Prior Agreement. This Agreement merges any prior or
contemporaneous agreements or understandings with respect to its subject
matter and shall not be modified or terminated except by another
agreement in writing executed by the Company and Executive. Failure of a
party to enforce one or more of the provisions Agreement or to
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require at any time performance of any of the obligations hereof shall
not be construed to be a waiver of such provisions by such party nor to
in any way affect the validity of this Agreement or such party's right
thereafter to enforce any provision of this Agreement nor to preclude
such party from taking any other action at any time which it would
legally be entitled take.
14. Severability. If any provision of this Agreement is held to be invalid
or unenforceable by any court or tribunal of competent jurisdiction, the
remainder of this agreement shall not be affected by such judgment, and
such provision shall be carried out as nearly as possible according to
its original terms and intent to eliminate such invalidity or
unenforceability.
15. Successors and Assigns. Neither party shall have the right to a personal
Agreement, or any rights or obligations hereunder, without the consent
of the other party; provided, however, that upon the sale or transfer of
all or substantially all of the assets and business of the Company to
another party, or upon the merger or consolidation of the Company with
another Company, this Agreement shall inure to the benefit of, and be
binding upon both the Executive and the party purchasing such assets,
business and goodwill, or surviving such merger or consolidation, as the
case may be, in the same manner and to the same extent as though such
other party were the Company. Subject to the foregoing, this Agreement
shall inure to the benefit of, and bind, the parties hereto and their
legal representatives, heirs, successors or assigns.
16. Communications. All notices and other communications under Agreement
shall be in writing and shall be deemed to have been duly given at the
time when mailed in any United States post office enclosed in a
registered or certified postage-paid envelope and addressed as set forth
at the beginning of this Agreement, or to such other as any party may
specify by notice to the other parties, or delivered by Federal Express
similar overnight courier to such address; provided, however, that any
notice of change of address shall be effective only upon receipt.
17. Construction; Counterparts. The headings contained in this Agreement are
for convenience only and shall in no way restrict or otherwise affect
the construct provisions hereof. References in this Agreement to
Sections are to the sections of this agreement. This Agreement may be
executed in multiple counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
18. Governing Law; Consent to Jurisdiction. This Agreement shall be governed
by the laws of the State of California applicable to agreements made and
fully to be performed therein by residents thereof. Executive hereby
consents to the personal jurisdiction of the state and federal courts
located in the State of California in connection with disputes arising
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out of or in connection with this Agreement, and agrees that venue of
any proceeding and connection therewith shall lie exclusively in such
courts.
19. The Company acknowledges it is aware that Executive has been consulted,
in the past, by Xxxx Xxxxxxxx and his wife, Xxxxx Xxxxxxxx, on personal
legal matters and consents to Executive's continued representation of
Mr. and Xxx. Xxxxxxxx on personal legal matters, at their own cost and
expense.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of
the date first set forth above.
BIKERS DREAM, INC.
By: /s/ X. Xxxxxxxx
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Name: X. Xxxxxxxx
Title: CEO
EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxxx 12/4/98
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Name: Xxxxxx X. Xxxxxxx
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