1
EMPLOYMENT CONTRACT
BIKERS DREAM, INC., a California corporation, located at 0000 Xxxxxxx Xxx,
Xxxxx Xxx, Xxxxxxxxxx 00000, hereinafter referred to as the Employer, and
XXXXXXX X. XXXXXX of Milwaukee, Wisconsin, hereinafter referred to as the
Employee, in consideration of the mutual promises made herein, agree as
follows:
ARTICLE 1. TERM OF EMPLOYMENT
Specified Term
Section 1.01. The Employer hereby employs Employee and Employee hereby
accepts employment with Employer for a period of five (5) years beginning on
March 1, 1995.
Earlier Termination
Section 1.02. This agreement may be terminated earlier as hereinafter
provided.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
Title and Description of Duties
Section 2.01. Employee shall serve as Executive Vice President and Vice
President/Retail Operations and Merchandising of Bikers Dream, Inc. In that
capacity, Employee shall do and perform all services, acts, or things necessary
or advisable to fulfill the duties of a corporate Vice President with
management responsibilities in retailing, merchandising, store planning,
franchise operations and international marketing and distribution of Employer's
products and services. However, Employee shall at all times be subject to the
direction of the President, and to the policies established by the Board of
Directors, of Employer.
Loyal and Conscientious Performance of Duties
Section 2.02. Employee agrees that to the best of his ability and
experience he will at all times loyally and conscientiously perform all of the
duties and obligations required of him either expressly or implicitly by the
terms of this agreement.
Devotion of Entire Time to Employer's Business
Section 2.03. (a) Employee shall devote his entire productive time,
ability, and attention to the business of Employer during the term of this
contract.
(b) During the term of this agreement, Employee shall not engage in
any other business duties or pursuits whatsoever. Furthermore, during the term
of this agreement, Employee shall not, whether directly or indirectly, render
any services of a commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of Employer's President.
BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.15
2
(c) This agreement shall not be interpreted to prohibit Employee from
making passive personal investments or conducting private business affairs if
those activities do not interfere with the services required under this
agreement. However, Employee shall not, directly or indirectly, acquire, hold,
or retain any interest in any business competing with or similar in nature to
the business of Employer.
Competitive Activities
Section 2.04. During the term of this contract Employee shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of Employer.
Uniqueness of Employee's Services
Section 2.05. Employee hereby represents and agrees that the services
to be performed under the terms of this contract are of a special, unique,
unusual, extraordinary, and intellectual character that gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law. Employee therefore expressly agrees that
Employer, in addition to any other rights or remedies which Employer may
possess, shall be entitled to injunctive and other equitable relief to prevent
or remedy a breach of this contract by Employee.
Indemnification for Negligence or Misconduct
Section 2.06. Employee shall indemnify and hold Employer harmless from
all liability for loss, damage, or injury to persons or property resulting from
the negligence or misconduct of Employee.
Trade Secrets
Section 2.07. (a) The parties acknowledge and agree that during the
term of this agreement and in the course of the discharge of his duties
hereunder, Employee shall have access to and become acquainted with information
concerning the operation of Employer, including without limitation, marketing,
franchise information, financial information, personnel, sales, planning, and
other information that is owned by Employer and regularly used in the operation
of Employer's business and that this information constitutes Employer's trade
secrets.
(b) Employee agrees that he shall not disclose any such
trade secrets, directly or indirectly, to any other person or use them in any
way, either during the term of this agreement or at any other time thereafter,
except as is required in the course of his employment with Employer.
(c) Employee further agrees that all files, records,
documents, equipment, and similar items relating to Employer's business,
whether prepared by Employee or others, are and shall remain exclusively the
property of Employer and that they shall be removed from the premises of
Employer only with the express prior consent of Employer's President.
2
3
Physical Examinations
Section 2.08. Employee agrees to submit himself annually for physical
examination by a physician selected by Employer for insurance purposes.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
General Description
Section 3.01. Employer shall provide Employee with the compensation,
incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.
Office and Staff
Section 3.02. Employee will maintain his office in his home in
Milwaukee, Wisconsin until such time as Employer may transfer Employee, which
shall not occur until January 1, 1996 or thereafter upon 60 days notice. If
and when such transfer occurs, Employer will provide Employee with suitable
office facilities. Employer will supply to Employee a laptop computer
equivalent to a NEC Versa E 486/DX 75 MHZ, 340 Mg HD 8 Mg ram, 14400 internal
modem, a suitable camera, cellular phone and pager, which items will remain the
property of Employer and will be returned in the event of termination of
employment for any reason. Employer will also supply Employee with equipment
for his home office, including, but not limited to, a fax machine, filing
cabinet, copier and the like, which equipment will remain the property of
Employer and will be returned in the event of termination for any reason.
Section 3.03. Employee may hire an administrative assistant, project
coordinator, field representative. and other support staff as deemed necessary
by Employer and Employee, at the expense of Employer; however, hiring of
personnel may occur only with the prior approval from time to time of the
President of Employer.
Indemnification of Losses of Employee
Section 3.04. Employer shall indemnify Employee for all losses
sustained by Employee in direct consequence of the discharge of his duties on
Employer's behalf.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Annual Salary
Section 4.01. (a) As compensation for the services to be rendered by
Employee hereunder, Employer shall pay Employee an annual salary at the rate
per annum of $108,000.00 payable in equal semi-monthly installments on the
fifth (5th) and twentieth (20th) days of each month during the period of
employment, prorated for any partial employment period.
(b) Employee may receive such annual increases in salary
as are determined by Employer's Board of Directors in its sole discretion.
3
4
Tax Withholding
Section 4.02. Employer shall have the right to deduct or withhold from
the compensation due to Employee hereunder any and all sums required for
federal income and Social Security taxes and all state or local taxes now
applicable or that may be enacted and become applicable in the future.
ARTICLE 5. EMPLOYEE INCENTIVES
Cash Bonus Based on New Store Openings
Section 5.01. (a) Employer shall pay to Employee a cash bonus of
$2,750.00 contemporaneously with the opening of each new Bikers Dream store,
whether corporate or franchise, during the term of Employee's employment with
Employer, with the exception of the Dallas, Texas store, which is nearing
completion and opening at the time of execution hereof.
Restricted Stock Bonus
Section 5.02. (a) As additional compensation, Employer agrees to
transfer to Employee each year during the employment term, on a pro-rata
quarterly basis, the 10,000 shares of Employer's common stock for fiscal 1995,
15,000 shares for fiscal 1996, 20,000 shares for fiscal 1997, 25,000 shares for
fiscal year 1998, and 30,000 shares for fiscal 1999, which may be increased by
the Board of Directors based on performance.
(b) All shares transferred to Employee pursuant to this
section shall be subject to the restriction that they must be sold back to
Employer at book value, or current fair market value, whichever is greater, if
the employment term is terminated for any reason whatsoever, except the death
of Employee, prior to the completion of the term of the employment specified
herein. The stock repurchase shall be at the option of Employer, and shall be
consummated within ninety (90) days of termination.
ARTICLE 6. EMPLOYEE BENEFITS
Annual Vacation
Section 6.01. Employee shall be entitled to one week vacation time for
each four months continuous service with pay. Employee may be absent from his
employment for vacation only at such times as Employer's President shall
determine from time to time. In the event that Employee is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he shall be deemed to have waived any entitlement to vacation time for
that year.
Group Medical Insurance
Section 6.04. Employer agrees to continue, by direct payment of
reimbursement, Employee's present group medical insurance coverage at $350.00
per month, to a maximum of $600.00 per month, at the same benefit level as at
present, if premiums are increased.
4
5
ARTICLE 7. BUSINESS EXPENSES
Business Expenses
Section 7.01. (a) Employer shall promptly reimburse Employee for all
reasonable business expenses incurred by Employee in promoting the business of
Employer, including expenditures for entertainment and travel. The meal budget
for Employee shall be a per diem of $35.00 while traveling. Frequent flyer
awards for the first year of employment shall be the property of Employer.
(b) Each such expenditure shall be reimbursable only if
it is of a nature qualifying it as a proper deduction on the federal and state
income tax return of Employer.
(c) Each such expenditure shall be reimbursable only if
Employee furnishes to Employer adequate records and other documentary evidence
required by federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of that expenditure as an
income tax deduction.
Relocation Expenses
Section 7.02. In the event that Employee is relocated/transferred,
Employer will pay all reasonable relocation expenses of Employee, including,
but not limited to, movers, vehicle mover, temporary lodging, and travel
expense, but excluding purchase of any residence of Employee. In addition,
Employer will reimburse initial moving expenses at the outset of employment,
not to exceed $1,000.00.
ARTICLE 8. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 8.01. (a) Employer reserves the right to terminate this
agreement if employee (1) wilfully breaches or habitually neglects the duties
which he is required to perform under the terms of this agreement, or (2)
commits acts of dishonesty, fraud, misrepresentation, or other acts of moral
turpitude, that would prevent the effective performance of his duties.
(b) Employer may at its option terminate this agreement
for the reasons stated in this section by giving written notice of termination
to Employee without prejudice to any other remedy to which Employer may be
entitled either at law, in equity, or under this agreement.
(c) The notice of termination required by this section
shall specify the ground for the termination and shall be supported by a
statement of relevant facts.
(d) Termination under this section shall be considered
"for cause" for the purposes of this agreement.
5
6
Termination Without Cause
Section 8.02. (a) This agreement shall be terminated upon the death of
Employee.
(b) Employer reserves the right to terminate this
agreement within three (3) months after Employee suffers any physical or mental
disability that would prevent the performance of his duties under this
agreement. Such a termination shall be effected by giving ten (10) days'
written notice of termination to Employee.
(c) Termination under this section shall not be
considered "for cause" for the purposes of this agreement.
Effect of Merger, Transfer of Assets, or Dissolution
Section 8.03. (a) This agreement shall not be terminated by any
voluntary or involuntary dissolution of Employer resulting from either a merger
or consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.
Termination by Employee
Section 8.04. Employee may terminate his obligations under this
agreement by giving Employer at least four (4) months notice in advance.
Effect on Compensation
Section 8.05. In the event that this agreement is terminated prior to
the completion of the term of employment specified herein, Employee shall be
entitled to the compensation earned by and vested in him prior to the date of
termination as provided for in this agreement, computed pro rata up to and
including that date. Employee shall be entitled to no further compensation as
of the date of termination.
Section 8.06. In the event Employee is terminated without cause,
Employee shall be entitled to severance compensation equivalent to 75% of his
base pay for a period equivalent to the number of months of completed service,
not to exceed a period of 24 months, and payable semi-monthly for the duration
of that period.
ARTICLE 9. GENERAL PROVISIONS
Notices
Section 9.01. Any notices to be given by either party to the other
shall be in writing and may be transmitted either by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written
6
7
notice in accordance with this section. Notices delivered personally shall be
deemed communicated as of the date of actual receipt; mailed notices shall be
deemed communicated as of the date of mailing.
Arbitration
Section 9.02. (a) Any controversy between Employer and Employee
involving the construction or application of any of the terms, provisions, or
conditions of this agreement shall on the written request of either party
served on the other be submitted to arbitration. Arbitration shall comply with
and be governed by the provisions of the California Arbitration Act, or shall
be submitted to an alternative dispute resolution panel.
(b) Employer and Employee shall each appoint one person
to hear and determine the dispute. If the two persons so appointed are unable
to agree, then those persons shall select a third impartial arbitrator whose
decision shall be final and conclusive upon both parties.
(c) The cost of arbitration shall be borne by the losing
party or in such proportions as the arbitrators decide.
Attorneys' Fees and Costs
Section 9.03. If any legal action is necessary to enforce or interpret
the terms of this agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire contract.
Entire Agreement
Section 9.04. This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer, and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made by
any party, or anyone acting on behalf of any party, which are not embodied
herein, and that no other agreement, statement, or promise not contained in
this agreement shall be valid or binding.
Modifications
Section 9.05. Any modification of this agreement will be effective
only if it is in writing signed by the party to be charged.
7
8
Effect of Waiver
Section 9.06. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of any right or power at any
one time or times b e deemed a waiver or relinquishment of that right or power
for all or any other times.
Partial Invalidity
Section 9.07. If any provision in this agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
Law Governing Agreement
Section 9.08. This agreement shall be governed by and construed in
accordance with the laws of the State of California.
Sums Due Deceased Employee
Section 9.09. If Employee dies prior to the expiration of the term of
his employment, any sums that may be due him from Employer under this agreement
as of the date of death shall be paid to Employee's executors, administrators,
heirs, personal representatives, successors, and assigns.
Executed on February 8, 1995 at Santa Ana, California.
EMPLOYER
Bikers Dream, Inc.
By /s/ XXXXXX XXXXXXXX
-------------------------------
Xxxxxx Xxxxxxxx, President
EMPLOYEE
/s/ XXXXXXX X. XXXXXX
-------------------------------
Xxxxxxx X. Xxxxxx
8
9
AMENDMENT TO EMPLOYMENT CONTRACT FOR
EXECUTIVE VICE PRESIDENT
THIS AMENDMENT is to that certain Employment Contract by and between
Bikers Dream, Inc., a California Corporation, ("Employer") and Xxxxxxx Xxxxxx,
Executive Vice President, ("Employee") entered, which became effective on
March 1, 1995.
A) Cash Bonus Based on New Store Openings
Article 5, Section 5.01 relating to Employee incentives, is deleted in
its entirety and the following language substituted therefor:
"Employer shall pay to Employee a cash bonus of $2,750.00
contemporaneously with the opening of each Bikers Dream Store, as to
company owned stores (not including repurchased franchises), and as to
franchise stores, 20% of the franchise fee received by Employer."
B) Stock Options
Article 5, Section 5.02(a), relating to Restricted Stock Bonuses is
deleted in its entirety and the following language substituted
therefor: "As additional incentive compensation, Employer grants to
Employee stock options under its Incentive Stock Option Plan, vesting
on a pro-rata quarterly basis, 10,000 shares of Employer's common
stock for fiscal 1995, 15,000 shares for fiscal 1996, 20,000 shares
for fiscal year 1997, 25,000 shares for fiscal year 1998, and 30,000
shares for fiscal year 1999. Such stock options are granted at a
price of $1.50 per share, the fair market value of the stock on the
date of adoption of the Plan, April 4, 1995."
Stock Option grants may be increased by the Board of Directors in its
sole discretion.
Section 5.02(b) is deleted in its entirety, and the following language
substituted therefore: "Employee will be entitled to cash bonuses at
the time the Stock Options indicated in Section B above are exercised.
The net amount of the bonuses will be equal to the number of shares
exercised under the Stock Option times the Option price of
$1.50/share. The Employer will be responsible for payment of the
Federal, State, FICA, Medicaid and SDI taxes on this bonus."
1
10
C) Officer and Directors Liability Insurance
The company will cover Employee under Employer's Director's and
Officer's liability insurance in equal comparable amounts to that
coverage provided to other officers and directors of Employer when
such coverage is available.
D) To the extent this Amendment shall be inconsistent with the Employment
Agreement of May 11, 1995, this document shall prevail.
E) In all other respects, the Employment Agreement on May 11, 1995
between the parties hereto is confirmed and ratified in its entirety.
Employer
Bikers Dream, Inc. Dated: 29 Sept. 95
-------------------------------
By: /s/ XXXXXX XXXXXXXX By: /s/ XXXXXXX XXXXXX
----------------------------------- ----------------------------------
Xxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx,
President and CEO Executive Vice President
2
