EMPLOYMENT AGREEMENT
Exhibit 10.1
Employment Agreement effective as of the 15th day of August, 2005, by and between Action
Performance Companies, Inc., an Arizona corporation (“Employer”) and Xxxxxxx X. Xxxx
(“Executive”). For purposes of paragraphs 8, 9, and 10 of this Agreement, the term “Employer”
shall include each of Employer’s subsidiaries and operating divisions.
WITNESSETH:
Employer desires to employ Executive, and Executive desires to accept such employment, all on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:
1. Position and Duties. Executive shall be employed as the Executive Chairman of Employer and
shall report only to the Board of Directors of Employer (the “Board”). It is anticipated that
Executive will have primary responsibility for: (1) dealing with the financial community, (2)
analyzing strategic alternatives, and (3) supervising the management team. Executive shall serve
Employer faithfully, loyally, honestly, and to the best of his ability. Executive shall spend the
equivalent of one week per month at Employer facilities and will be available daily from his
residence or other location during regular business hours for consultation with other senior
executives. This Agreement, however, shall not preclude Executive from (a) serving on the board of
directors of not more than five other companies (that do not compete with Employer), (b) serve on
the governing body of a reasonable number of trade associations or charitable organizations, (c)
engaging in charitable activities and community affairs, and (d) managing his personal investments
and affairs, provided that such activities do not conflict or materially interfere with the
effective discharge of his duties and responsibilities to Employer and to the extent Employer does
not reasonably object to any service by Executive on behalf of any such third party.
2. Term of Employment. The term of Executive’s employment hereunder shall commence on the
date hereof and shall continue until December 31, 2007 (the “Initial Term”) and from year to year
thereafter (each a “Renewal Term”), unless and until terminated by either party giving written
notice to the other not less than sixty (60) days prior to the end of the then current term, unless
earlier terminated under the terms of this Agreement.
3. Compensation and Other Benefits.
(a) Base Salary. Employer shall pay to Executive a base salary at a rate of One Hundred
Eighty Thousand Dollars ($180,000) per annum to be paid in equal monthly installments, or in such
other periodic installments upon which Employer and Executive shall mutually agree. On at least an
annual basis, the Compensation Committee of the Board shall review Executive’s base salary and may
increase but not decrease Executive’s base salary in the committee’s discretion.
(b) Stock Options. Employer will grant to Executive options to acquire 100,000 shares of
Employer’s common stock at an exercise price equal to the closing market
price of Action Performance Companies, Inc. on the effective date of this Agreement. Such
option grant will be subject to the specific terms and conditions with respect to vesting and other
matters as set forth in a separate stock option agreement to be entered into between Employer and
Executive.
(c) Benefit Plans. Executive shall be entitled to participate in any benefit plans maintained
by Employer, including, but not limited to, retirement plans, disability plans, life insurance
plans, and health and dental plans available to other executive employees of Employer, subject to
any restrictions, including waiting periods, specified in the plans.
(d) Other Benefits. Executive shall also receive (i) reimbursement for reasonable annual tax
and financial consulting fees, (ii) reimbursement for the costs of an annual physical by the doctor
of his choice, and (iii) reimbursement for reasonable legal and accounting fees and expenses
incurred by Executive in connection with this Agreement, all of which shall be subject to a gross
up, which means that Executive will receive an additional payment in an amount such that after
Executive’s payment of taxes on that additional payment, a sufficient sum remains to pay
Executive’s tax liability resulting from such reimbursement.
(e) Vacations. Executive shall also be entitled to four (4) weeks of paid vacation each
calendar year, with such vacations to be scheduled and taken by Executive in his discretion,
provided no such vacation shall interfere with the performance of Executive’s duties hereunder and
no unused vacation may be carried over to a succeeding calendar year.
(f) Business Expenses. Employer shall reimburse Executive for any and all necessary,
customary, and usual expenses, properly receipted in accordance with Employer’s policies, incurred
by Executive on behalf of Employer. If Executive is required to travel in the performance of his
duties under this Agreement, Executive shall be entitled to use any plane maintained by Employer or
to fly first class on commercial flights at his election at Employer’s cost. Employer shall also
reimburse Executive for hotels and meals relating to his service to Employer.
(g) Signing Bonus. Upon execution of this Agreement by Employee and Executive, Executive will
be entitled to a signing bonus of $7,000.00, less applicable withholding taxes.
4. Termination by Employer.
(a) Termination for Cause. Employer may terminate Executive’s employment under this Agreement
for Cause at any time upon written notice to Executive. For purposes of this Agreement, “Cause”
shall be limited to discharge resulting from a determination by the Board that Executive (i) has
been convicted of a felony, involving dishonesty, fraud, theft, or embezzlement; (ii) has
repeatedly failed or refused, after written notice from Employer along with failure of Executive to
cure within thirty (30) days of receipt of such notice, in a material respect to follow reasonable
policies or directives established by Employer; (iii) has willfully and persistently failed, after
written notice from Employer within thirty (30) days of receipt of such notice, to attend to
material duties or obligations imposed upon him under this Agreement; or (iv) has performed an act
or failed to act for which if he were prosecuted and convicted, would
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constitute a felony involving One Thousand Dollars ($1,000) or more of money or property of
Employer. The existence of “Cause” shall be determined by the Board acting in good faith after
prior notice to Executive and after providing Executive with an opportunity to be heard. If
Executive’s employment is terminated for Cause, Executive shall receive no Severance Benefits
pursuant to paragraph 7.
(b) Termination without Cause. Employer also may terminate Executive’s employment under this
Agreement without Cause at any time upon written notice to Executive. In the event Executive’s
employment is terminated by Employer without Cause, Executive shall receive the Severance Benefits
pursuant to paragraph 7.
5. Termination by Executive. Executive may terminate his employment under this Agreement with
or without “Good Reason” in accordance with the provisions of this paragraph 5.
(a) Termination for Good Reason. Executive may terminate his employment under this Agreement
for “Good Reason” by giving written notice to Employer within sixty (60) days, or such longer
period as may be agreed to in writing by Employer, of Executive’s receipt of notice of the
occurrence of any event constituting “Good Reason,” as described below. Executive shall have “Good
Reason” to terminate his employment under this Agreement upon the occurrence of any of the
following events:
(i) Any reduction in Executive’s status, duties, authority, or compensation;
(ii) Executive is demoted to a position of less stature or importance within Employer than the
position described in paragraph 1;
(iii) Executive is assigned duties inconsistent with the positions, duties, responsibilities,
or status of the Executive Chairman of Employer;
(iv) Upon an event of a “Change of Control” of Employer, provided that a change of control
shall not be considered to have taken place for purposes of this Agreement in the event the Change
of Control shall have been specifically approved by the Board and the provisions of this Agreement
remain in full force and effect as to Executive and Executive suffers no reduction in Executive’s
status, duties, authority, or compensation.
(b) Change of Control. For the purposes of this paragraph 5, the term “Change in Control” of
Employer shall mean a Change in Control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 as in effect on the date of this Agreement or, if Item 6(e) is no longer in effect, any
regulations issued by the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934 that serve similar purposes; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if and when
(i) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) directly or indirectly of equity securities of
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Employer representing thirty percent (30%) or more of the combined voting power of Employer’s
then-outstanding equity securities;
(ii) during the term of this Agreement, individuals who, at the beginning of such period,
constituted the Board of Directors of Employer (the “Original Directors”), cease for any reason to
constitute at least a majority thereof unless the election or nomination for election of each new
director was approved (an “Approved Director”) by the unanimous vote of the Board constituted
entirely of Existing Directors and/or Approved Directors;
(iii) a tender offer or exchange offer is made whereby the effect of such offer is to take
over and control Employer, and such offer is consummated for the equity securities of Employer
representing twenty percent (20%) or more of the combined voting power of Employer’s
then-outstanding voting securities;
(iv) Employer is merged, consolidated, or enters into a reorganization transaction with
another person and, as the result of such merger, consolidation, or reorganization, less than 75
percent (75%) of the outstanding equity securities of the surviving, or resulting person shall then
be owned in the aggregate by the former stockholders of Employer; or
(v) Employer transfers substantially all of its assets to another person or entity which is
not a wholly owned subsidiary of Employer.
If Executive terminates this Agreement and his employment for Good Reason, Executive shall be
entitled to receive Severance Benefits pursuant to paragraph 7.
(c) Termination Without Good Reason. Executive also may terminate his employment without Good
Reason at any time by giving written notice to Employer. If Executive terminates his employment
under this Agreement without Good Reason, Executive shall not receive Severance Benefits pursuant
to paragraph 7.
6. Death or Disability.
(a) Death. Executive’s employment shall terminate automatically on Executive’s death. Any
compensation or other amounts due to Executive for services rendered prior to his death shall be
paid to Executive’s surviving spouse, or if Executive does not leave a surviving spouse, to
Executive’s estate. No other benefits shall be payable to Executive’s heirs pursuant to this
Agreement, but amounts may be payable pursuant to any life insurance or other benefit plans
maintained by Employer.
(b) Disability. In the event Executive becomes “Disabled,” Executive’s employment hereunder
and Employer’s obligation to pay Executive’s Base Salary shall continue for a period of twelve (12)
months from the date of Executive’s initial absence due to such Disability and, in the event
Executive becomes “Disabled” during the first year of his employment with Employer. Executive
shall also receive any additional compensation to which Executive may be entitled pursuant to
paragraph 3 (less any amounts payable to Executive pursuant to any long-term disability insurance
policy paid for by Employer). If at the end of the
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twelve (12) month period, Executive has not recovered from such Disability, Executive’s
employment hereunder shall automatically cease and terminate. Executive shall be considered
“Disabled” or to be suffering from a “Disability” for purposes of this paragraph 6(b) if, in the
judgment of a licensed physician selected by the Board and confirmed by a licensed physician
designated by Executive, and after any reasonable accommodations required by applicable law, he is
unable to perform the essential functions of his position due to a physical or mental impairment,
and such incapacity is expected to continue for a period of at least twelve (12) consecutive months
from the date of the initial absence due to such incapacity. The determination by such physicians
shall be binding and conclusive for all purposes. If the physician selected by the Board and the
physician selected by Executive cannot agree, the two (2) physicians shall select a third (3rd)
physician. The decision of the third (3rd) physician concerning Executive’s Disability then shall
be binding and conclusive on all interested parties.
7. Severance Benefits. If during the Initial Term or any Renewal Term, Executive’s employment
under this Agreement is terminated without Cause by Employer pursuant to paragraph 4(b) prior to
the last day of the Initial Term or any Renewal Term, or if Executive elects to terminate his
employment for Good Reason pursuant to paragraph 5(a), Executive shall receive the “Severance
Benefits” provided by this paragraph. In addition, Executive also shall receive the Severance
Benefits if his employment is terminated due to Disability pursuant to paragraph 6(b).
(a) Effective Date. The Severance Benefits shall begin immediately following the effective
date of termination of employment and shall continue to be payable for a period of twenty four
months (24) following the effective date, in all events except as set forth in paragraph 6(b).
(b) Benefits. The Executive’s Severance Benefits shall consist of two (2) times the
Executive’s then base salary and bonus compensation. The Company will pay this amount to Executive
in a lump sum, within 10 days of termination. Executive’s bonus compensation shall be the greater
of (i) the amount paid to him as bonus or incentive compensation for the prior year, and (ii) an
amount estimated to be due him under any then current bonus program. By way of example, if
Executive was paid a bonus of $100,000 for the prior year, and is estimated to earn a $60,000 bonus
in the year of termination, he would be paid $200,000 as his bonus payout upon termination. The
Severance shall also consist of the continuation for two (2) years of any health, life, disability,
or other insurance benefits that Executive was receiving as of the Change of Control date, but only
to the extent permitted under the policies for such benefits. If a particular insurance benefit
may not be continued for any reason, Employer shall pay to the Executive in a lump sum an amount
estimated in good faith for him to obtain comparable coverage for the two (2) year post-termination
period. Notwithstanding the above, at all times under the terms of this Section 7(b), the cash
portion of the Executive’s Severance Benefit shall be paid no later than the date that is two and
one-half months after the end of the later of (i) the Employer’s fiscal year, or (ii) the calendar
year, in which the payments are no longer subject to a substantial risk of forfeiture, as
determined in accordance with the guidance promulgated under Section 409A of the Internal Revenue
Code of 1986, as amended (“Code”).
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(c) Exceptions to Benefits. If Executive voluntarily terminates this Agreement and his
employment without Good Reason prior to the end of the Initial Term or any Renewal Term, or if
Employer terminates the Agreement and Executive’s employment for Cause, no Severance Benefits shall
be paid to Executive. No Severance Benefits are payable in the event of Executive’s death while in
the active employ of Employer.
(d) Future Employment. The payment of Severance Benefits shall not be affected by whether
Executive seeks or obtains other employment. Executive shall have no obligation to seek or obtain
other employment, and Executive’s Severance Benefits shall not be impacted by Executive’s failure
to mitigate.
8. Covenant-Not-to-Compete.
(a) Interests to be Protected.
(i) Customers. The parties acknowledge that during the term of his employment under this
Agreement, Executive will perform essential services for Employer, its employees, and shareholders,
and for customers of Employer. Therefore, Executive will be given an opportunity to meet, work
with, and develop close working relationships with Employer’s customers on a first-hand basis and
will gain valuable insight as to the customers’ operations, personnel, and need for services. In
addition, Executive will be exposed to, have access to, and be required to work with, a
considerable amount of Employer’s Confidential and Proprietary Information.
(ii) Employees. The parties also expressly recognize and acknowledge that the personnel of
Employer have been trained by, and are valuable to Employer, and that if Employer must hire new
personnel or retrain existing personnel to fill vacancies it will incur substantial expense in
recruiting and training such personnel. The parties expressly recognize that should Executive
compete with Employer in any manner whatsoever, it could seriously impair the goodwill and diminish
the value of Employer’s business.
(iii) Extended Duration. The parties acknowledge that this covenant has an extended duration;
however, they agree that this covenant is reasonable and it is necessary for the protection of
Employer, its shareholders and employees.
(iv) Fair and Reasonable. For these and other reasons, and the fact that there are many other
employment opportunities available to Executive if his employment with Employer should terminate,
the parties are in full and complete agreement that the following restrictive covenants (which
together are referred to as the “Covenant-Not-To-Compete”) are fair and reasonable and are freely,
voluntarily, and knowingly entered into. Further, each party has been given the opportunity to
consult with independent legal counsel before entering into this Agreement.
(b) Devotion to Employment. Executive shall devote substantially all his business time and
efforts to the performance of his duties on behalf of Employer during the term of his employment
under this Agreement. During his term of employment, Executive shall not at any time or place or
to any extent whatsoever, either directly or indirectly, without the express written consent of
Employer, engage in any outside employment, or in any activity competitive
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with or adverse to Employer’s business or affairs, whether alone or as partner, officer,
director, employee, shareholder of any corporation or as a trustee, fiduciary, consultant or other
representative. This is not intended to prohibit Executive from engaging in nonprofessional
activities, such as personal investments or conducting to a reasonable extent private business
affairs, which may include other boards of directors’ activity, so long as they do not conflict
with Employer’s business. Participation to a reasonable extent in civic, social, or community
activities is encouraged.
(c) Non-Solicitation of Customers. During the term of Executive’s employment with Employer
under this Agreement and for a period of twenty-four (24) months after the termination of
employment with Employer under this Agreement, regardless of who initiates the termination and for
whatever reason, Executive shall not directly or indirectly, for himself, or on behalf of, or in
conjunction with, any other person, company, partnership, corporation, or governmental entity, in
any manner whatsoever, call upon, contact, encourage, handle, or solicit customers of Employer with
whom he has worked as an employee of Employer at any time prior to termination, or at the time of
termination, for the purpose of soliciting or selling such customer the same, similar, or related
services that he provided on behalf of Employer.
(d) Non-Solicitation of Executives. During the term of Executive’s employment with Employer
under this Agreement and for a period of twenty-four (24) months after the termination of
employment with Employer under this Agreement, regardless of who initiates the termination and for
whatever reason, Executive shall not directly or indirectly, for himself, or on behalf of, or in
conjunction with, any other person, company, partnership, corporation, or governmental entity, seek
to hire, and/or hire any of Employer’s personnel or employees for the purpose of having such
employee engage in services that are the same, similar, or related to the services that such
employee provided for Employer.
(e) Competing Business. During the term of Executive’s employment with Employer under this
Agreement and for a period of twenty-four (24) months after the termination of employment with
Employer under this Agreement, regardless of who initiates the termination and for whatever reason,
Executive shall not, directly or indirectly, for himself, or on behalf of, or in conjunction with,
any other person, company, partnership, corporation, or governmental entity, in any manner
whatsoever, engage in the same or similar business as Employer, which would be in direct
competition with any Employer line of business, in any geographical service area where Employer
engaged in business at time of termination. For the purposes of this provision, the term
“competition” shall mean directly or indirectly engaging in or having a substantial interest in a
business or operation which has been, is, or will be, providing the same products provided by
Employer; provided, however the ownership of not more than 5% by Executive of a publicly held
corporation shall not constitute competition which is prohibited by this paragraph 8(e).
(f) Limitation and Judicial Amendment. Notwithstanding any other provision of this Agreement,
the provisions contained in paragraphs 8(c), 8(d), and 8(e) shall not apply for more than twelve
(12) months after Executive no longer receives Severance Benefits under this Agreement. If the
scope of any provision of this Agreement is found by the Court to be too broad to permit
enforcement to its full extent, then such provision shall be enforced to the
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maximum extent permitted by law. The parties agree that the scope of any provision of this
Agreement may be modified by a judge in any proceeding to enforce this Agreement, so that such
provision can be enforced to the maximum extent permitted by law. If any provision of this
Agreement is found to be invalid or unenforceable for any reason, it shall not affect the validity
of the remaining provisions of this Agreement.
(g) Injunctive Relief, Damages and Forfeiture. Due to the nature of Executive’s position with
Employer, and with full realization that a violation of this Agreement will cause immediate and
irreparable injury and damage, which is not readily measurable, and to protect Employer’s
interests, Executive understands and agrees that in addition to instituting legal proceedings to
recover damages resulting from a breach of this Agreement, Employer may seek to enforce this
Agreement with an action for injunctive relief, to cease or prevent any actual or threatened
violation of this Agreement on the part of Executive.
(h) Survival. The provisions of this paragraph shall survive the termination of Executive’s
employment to the extent necessary to enforce such provisions.
9. Confidential Information. During the course of his employment under this Agreement,
Executive will become exposed to a substantial amount of confidential and proprietary information,
including, but not limited to, financial information, annual reports, audited and unaudited
financial reports, operational budgets and strategies, methods of operation, customer lists,
strategic plans, business plans, marketing plans and strategies, new business strategies, merger
and acquisition strategies, management systems programs, computer systems, personnel and
compensation information and payroll data, and other such reports, documents, or information
(collectively the “Confidential and Proprietary Information”). In the event his employment is
terminated by either party for any reason, Executive agrees that he will not take with him any
copies of such Confidential and Proprietary Information in any form, format, or manner whatsoever
(including computer print-outs, computer tapes, floppy disks, and CD roms) nor will he disclose the
same in whole or in part to any person or entity, in any manner either directly or indirectly.
Excluded from this Agreement is information that is already disclosed to third parties and is in
the public domain or that Employer consents to be disclosed, with such consent to be in writing.
The provisions of this paragraph shall survive the termination of this Agreement.
10. Indemnity by Employer.
(a) Generally. Unless Executive is covered by an indemnity agreement covering the directors
and executive officers of Employer, Employer shall indemnify Executive to the fullest extent
permitted or required by the laws of the state of Arizona of and from any “Expenses” incurred by
Executive in any “Proceeding.”
(b) Expenses. For purposes of this paragraph 10, “Expenses” shall mean and include all
expense, liability, and loss, including expenses of investigations, judicial or administrative
proceedings or appeals, attorney, accountant and other professional fees and disbursements,
judgments, fines, and amounts paid in settlement.
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(c) Proceeding. For purposes of this paragraph 10, “Proceeding” shall mean and include any
threatened, pending, or completed action, suit, or proceeding, whether brought in the right of
Employer or otherwise, and whether of a civil, criminal, administrative, or investigative nature,
in which the Executive may be or may have been involved as a party, witness or otherwise, by reason
of the fact that the Executive is or was an officer of Employer or is or was serving at the request
of Employer as a director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, whether or not serving in such capacity at the time any
liability or expense is incurred for which indemnification may be provided under this Agreement.
(d) Payment of Executive Expenses. Employer shall pay the Expenses incurred by Executive in
any Proceeding in advance of the final disposition of the Proceeding at the written request of
Executive, if Executive (i) furnishes Employer with a written affirmation of Executive’s good faith
belief that he is entitled to indemnification by Employer; and (ii) furnishes Employer with a
written undertaking to repay the advance to the extent that it is ultimately determined that
Executive is not entitled to be indemnified by Employer. Such undertaking shall be an unlimited
general obligation of Executive, but need not be secured. Advances pursuant to this paragraph 10
shall be made no later than twenty (20) days after Employer’s receipt of the affirmation and
undertakings set forth above and shall be made without regard to the Executive’s ability to repay
the amount advanced and without regard to Executive’s ultimate entitlement to indemnification under
this Agreement.
11. Miscellaneous.
(a) Notices. All notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly given upon (a)
personal delivery, (b) transmitter’s confirmation of the receipt of a facsimile or e-mail
transmission, (c) confirmed delivery by a standard overnight carrier, or (d) the expiration of
three business days after the day when mailed via United States Postal Service by certified or
registered mail, return receipt requested, postage prepaid at the following addresses:
(i) If to Employer:
Action Performance Companies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
(ii) If to Executive:
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Xxxxx, Xxxxxxx 00000
Either party may alter the address to which communications are to be sent by giving notice of
such change of address in conformity with the provisions of this paragraph for the giving of
notice.
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(b) Indulgences. Neither any failure nor any delay on the part of either party to exercise
any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power, or privilege preclude any other
or further exercise of the same or of any other right, remedy, power, or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power, or privilege with respect to any other occurrence.
(c) Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance, and enforcement, shall be governed by and construed in accordance with
the laws of the state of Arizona, notwithstanding any Arizona or other conflict-of-interest
provisions to the contrary.
(d) Binding Nature of Agreement. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives, successors, and
permitted assigns.
(e) Execution in Counterpart. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of the parties reflected hereon as the signatories.
(f) Provisions Separable. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.
(g) Entire Agreement. This Agreement contains the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings, inducements, and conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing.
(h) Paragraph Headings. The paragraph headings in this Agreement are for convenience only;
they form no part of this Agreement and shall not affect its interpretation.
(i) Number of Days. In computing the number of days for purposes of this Agreement, all days
shall be counted, including Saturdays, Sundays, and holidays; provided, however, that if the final
day of any time period falls on a Saturday, Sunday, or holiday, then the final day shall be deemed
to be the next day which is not a Saturday, Sunday, or holiday.
(j) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto; provided that because the obligations of
Executive hereunder involve the performance of personal services, such obligations shall not be
delegated by Executive. For purposes of this Agreement, successors and
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assigns shall include, but not be limited to, any individual, corporation, trust, partnership,
or other entity that acquires a majority of the stock or assets of Employer by sale, merger,
consolidation, liquidation, or other form of transfer. Employer shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of Employer to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Employer would be required to
perform it if no such succession had taken place. Without limiting the foregoing, unless the
context otherwise requires, the term “Employer” includes all subsidiaries of Employer.
(k) Code Section 409A. If any payments under this Agreement are subject to the provisions of
Code Section 409A, it is intended that the Agreement will comply fully with and meet all the
requirements of Code Section 409A.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| EMPLOYER: | ||||
| ACTION PERFORMANCE COMPANIES, INC., | ||||
| an Arizona corporation | ||||
| By: | /s/ Xxxxx Xxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxx | |||
| Its: | Chief Financial Officer | |||
| EXECUTIVE: | ||||
| /s/ Xxxxxxx X. Xxxx | ||||
| Xxxxxxx X. Xxxx | ||||
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