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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT made as of May 15, 1997 between NORTH CAROLINA MOTOR
SPEEDWAY, INC., a North Carolina corporation (the "Company"), and XXX.
XXXXX XXXXXX XXXXXXXXX, a resident of Ellerbe, North Carolina
("Employee").
WITNESSETH:
WHEREAS, the parties hereto desire to provide for the continuation of
Employee's employment by the Company upon the consummation of a merger between
the Company and Penske Acquisition, Inc. ("Penske"), a wholly owned subsidiary
of Penske Motorsports, Inc. ("PMI") (the "Merger").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Employment.
The Company agrees to employ the Employee and the Employee agrees to
enter into the employ of the Company on the terms and conditions hereafter set
forth.
2. Capacity and Duties.
The Employee shall be employed as Secretary of the Company and shall
perform such duties and have such responsibilities as normally attributed to a
secretary and treasurer of a North Carolina corporation. The Employee shall
perform her responsibilities in the same manner as she has acted prior to the
acquisition by Penske and in accordance with the direction and supervision of
the Board of Directors of the Company. She shall devote such time, skill,
energies, business judgment, knowledge and best efforts to the business of the
Company and the performance of such executive, administrative and operational
duties on behalf of the Company and its affiliates, appropriate to the offices
she holds or shall hold hereunder, as the Board of Directors of the Company may
request and Employee shall agree. Employee's primary business activity is that
of President of a separate corporation and the requirement that the Employee
devote her time to the business of the Company shall not preclude her from
undertaking that or any other business and personal activities that do not,
singly or in the aggregate, materially impair her ability to fulfill her
responsibilities under this Agreement.
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3. Term.
The term of the Employee's employment hereunder shall be for the a
period of five (5) years, commencing on the date of the consummation of the
Merger, and ending on the date prior to the fifth anniversary of that date (the
"Initial Expiration Date"), unless such term is terminated earlier by or
pursuant to Section 9. The term of employment shall be automatically renewed
for successive one-year terms, unless written notice of termination is given by
either party not less than ninety (90) days prior to the end of the initial
five-year, or the then current one-year, term (the "Extended Expiration Date").
4. Compensation.
(a) Salary. The Company shall pay or cause to be paid to the
Employee a salary of TWENTY-FIVE THOUSAND DOLLARS ($25,000) per year, payable
in equal semi-monthly installments (the "Base Salary"). The Base Salary shall
be reviewed prior to each anniversary date of this Agreement by the Board of
Directors of the Company and the Base Salary shall be increased in the
discretion of the Board.
(b) Bonuses. Employee shall receive an annual bonus payable at
the discretion of the Board of Directors, or any committee thereof, based upon
the Employee's performance and individual contributions to the Company.
5. Expenses. The Company shall reimburse Employee, to the extent not
otherwise paid for by the Company or one of its affiliates, for reasonable and
necessary out-of-pocket expenses, including, without limitation, entertainment,
travel and similar expenses incurred by her in performing the duties set forth
in Section 2 hereof. Employee shall present an itemized account of such
expenses, supported by such documentation as is required under the Internal
Revenue Code of 1986, as amended, to support the deductibility of such expenses
for federal income tax purposes.
6. Benefits and Vacations.
(a) Plans. The Employee shall be entitled to participate in any
and all employee benefit plans as may be in effect for executives of the
Company to the extent that she is eligible for
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participation therein and coverage thereunder. Such right of participation in
any such plan and the degree or amount thereof shall be subject, however, to
generally applicable Company policies and to action by the Company's Board of
Directors or any administrative or other committee or to any other
administrative or managerial determination provided in or contemplated by such
plan, it being agreed that this Agreement is not intended to impair the right
of any committee or other group or person concerned with the administration of
such plan to exercise in good faith the full discretion reposed in him or them
by such plan. Notwithstanding the foregoing, the employee benefits provided to
Employee shall be equal to those benefits provided to comparable executive
officers of PMI.
(b) Vacation. The Employee shall be entitled to three (3) weeks
annual paid vacation during each year of this Agreement. Employee shall also
be entitled to the same paid holidays, sick and personal time as are available
to all other employees in accordance with the policies of the Company.
(c) Withholding. The Employee acknowledges that certain payments
provided for herein are subject to withholding and other taxes.
7. [RESERVED]
8. Indemnification.
(a) Notwithstanding the termination of Employee's employment under
Section 9 of this Agreement, it is confirmed that, with respect to all periods
during which Employee shall be employed by the Company, (i) the Company shall
indemnify and reimburse expenses to the fullest extent permitted by the
indemnification and expenses to reimbursement provisions of Company's
Certificate of Incorporation and By-Laws in effect as of the date of this
Agreement, provided that such coverage is not prohibited under the provisions
of the applicable General Corporation Law; and (ii) the Company shall use its
best efforts to maintain in effect its Directors' and Officers' Indemnification
Insurance policies (under which Employee shall be deemed an "insured" to the
fullest extent provided in them) and to purchase substitute policies in form
and content substantially similar to those presently in force during all
periods open under the applicable statutes of limitations. The
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Company shall promptly provide Employee with copies of all such policies and
any notice of cancellation of them.
(b) In addition to the foregoing, as authorized by the Company's
Certificate of Incorporation and By-Laws in effect as of the date of this
Agreement, the Company further agrees, to the extent not prohibited by the
applicable General Corporation Law, to defend Employee by legal counsel
reasonably acceptable to Employee in any threatened or pending action, suit or
proceeding as to which Employee may be entitled to indemnification under this
Agreement. In this regard, payment in advance by the Company of all expenses
incurred or to be incurred by Employee in defending or investigating each and
every such action, suit or proceeding which has been instituted and is pending
on the date of this Agreement or which shall subsequently be instituted is
authorized by the Board of Directors of the Company, and Employee agrees to
repay such advanced amounts in the event it is ultimately determined that
Employee is not entitled to be indemnified by the Company as authorized under
its Certificate of Incorporation and By-Laws, in accordance with the provisions
of the Company's By-Laws and the applicable General Corporation Law. As
regards any decision to provide interim indemnification as to any action, suit
or proceeding not already referred to in this subparagraph, Employee will be
given the same consideration in the reaching of any such decision as shall be
given to any person who is a director or officer of the Company at the time of
such decision.
(c) The Company further agree to notify Employee of all threatened
or pending actions, suits, or other proceedings by or against the Company to
which Employee is named a party, and to be filed in connection with it, and
shall otherwise keep Employee reasonably informed of the status of such actions
and any offers of settlement.
9. Termination.
Notwithstanding Section 3, the term of the Employee's employment
hereunder shall terminate on the earliest of the (i) termination date provided
for under Section 3 or (ii) under any of the paragraphs of this Section 9.
(a) Death. In the event of the Employee's death, the Employee's
employment shall terminate automatically, effective as
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of the date of death, and the Company shall pay to her estate the salary that
otherwise would have been paid to the Employee pursuant to Section 4(a) up to
the end of the fiscal quarter in which she died.
(b) Disability. If the Employee, due to physical or mental
illness, shall be disabled to perform the essential functions of her employment
hereunder, with or without reasonable accommodation, for a period of one
hundred eighty (180) days (a "disability"), then either the Employee or the
Company may by notice terminate the Employee's employment under this Agreement
effective as of a date 30 days after the date such notice is given. The
Employee's compensation prior to such termination, shall be reduced by the
amount of any disability or similar benefits to which she is entitled,
notwithstanding anything contained elsewhere in this Agreement to the contrary.
The Company shall pay Employee for the remaining term of this Agreement from
the date of termination to the Initial Expiration Date or the Extended
Expiration Date, as applicable, disability compensation equal to sixty percent
(60%) of Employee's salary as of the date of termination. At the Company's
option, the Company may procure an insurance policy for the benefit of Employee
to provide this disability compensation. The obligation to pay disability
compensation shall terminate upon the death of Employee.
(c) By Company for Cause. The Employee's employment may be
terminated effective immediately by the Company for "cause" by notice of
termination to the Employee. "Cause" for such termination shall be limited to
convictions of a felony, malfeasance in office or a material breach by the
Employee of the covenants contained in this Agreement or of Employee's gross
negligence or wilful misconduct in the performance of her duties, which breach
continues for 30 days following receipt of written notice given by the
Company's Board of Directors specifying the breach and requesting that the
Employee correct the same.
(d) Compensation Upon Termination By the Company. Except as
provided in Sections 9(a) and 9(b), Employee shall receive compensation upon
termination as follows: in the event that the Company terminates Employee's
Employment under this Agreement other than for cause as provided in Section
9(c), Employee shall be entitled to receive the full amount of all compensation
set forth in Section 4 and all fringe benefits in Section 6 for the remaining
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term of this Agreement. In the event that Employee is terminated for cause,
Employee shall be entitled to receive compensation and benefits through the
date of termination.
(e) Termination by Employee.
(i) If Employee shall voluntarily resign from employment by the
Company prior to the expiration of this Agreement, any compensation payable to
Employee under Section 4 shall be prorated through the date of termination.
(ii) If the Board of Directors reduces Employee's job
responsibilities to something less than those described in Section 2, Employee
may, upon thirty days written notice, terminate this Agreement at her option.
Employee's determination that her job responsibilities have been so reduced
shall be final. In the event Employee opts to terminate her employment
pursuant to this Subsection 9 (e) (ii), Employee shall be entitled to all
compensation set forth in Section 4 and all the fringe benefits set forth in
Section 6 for the remaining term of this Agreement.
10. Representation by the Employee.
The Employee hereby represents and warrants to the Company that the
execution of this Agreement and the performance of her duties and obligations
hereunder will not breach or be in conflict with any other agreement to which
she is a party or by which she is bound and that she is not now subject to any
covenant against competition or similar covenant that would affect the
performance of her duties hereunder.
11. Confidentiality; Non-Compete.
(a) Except as required in Employee's duties to the Company, or as
authorized in writing by the Board, Employee will not at any time, either
during or after employment with the Company, disclose or use, directly or
indirectly, any Confidential Information of which Employee gains knowledge
during employment by the Company under this Agreement, and Employee will retain
all such information in trust in a fiduciary capacity for the sole use and
benefit of the Company. Confidential Information includes information that is
not available through sources outside the Company, PMI or their
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subsidiaries or affiliates and that is treated as confidential by the Company,
PMI or their subsidiaries or affiliates, whether now owned or hereafter
obtained, concerning plans, marketing and sales methods, materials, processes,
procedures, devices utilized by the Company, PMI or either of their respective
subsidiaries or affiliates, business forms, prices, plans for development of
new products or services and expansion into new areas or markets, internal
operations, and any variations, trade secrets, proprietary information and
other confidential information of any type together with all written, graphic,
and other materials relating to all or any part of the same. Employee
acknowledges that the Confidential Information is valuable, special and unique
to the respective businesses and on which such businesses depend, and is
proprietary to the Company, PMI, and their respective subsidiaries and other
affiliates. Employee further acknowledges that the Company wishes to protect
such Confidential Information by keeping it secret and confidential for the
sole use and benefit of the Company and PMI. Employee further agrees to take
all steps necessary, and all steps reasonably requested by the Board, to insure
that all such Confidential Information is kept secret and confidential for the
sole use and benefit of the Company, PMI, and their respective subsidiaries and
other affiliates.
(b) Upon termination of this Agreement or at any other time the
Board may in writing so request, Employee will promptly deliver to the Company
all materials concerning any Confidential Information, copies thereof, and any
other materials of the Company, PMI, or their respective subsidiaries and other
affiliates which are in Employee's possession or under Employee's control, and
Employee will not make any copy, portion, or extract thereof.
(c) During (i) the period of Employee's employment with the
Company, or (ii) the period ending on the Initial Expiration Date or the
Extended Expiration Date if the term of employment has been extended while
Employee was employed by the Company, whichever is the last to end, Employee
will not, directly or indirectly, affiliate or seek to affiliate (including as
an employee, director, shareholder, joint venturer, partner, consultant or
agent) with, or receive any compensation or remuneration from, any person or
entity, whose business is the operation of events sanctioned by the National
Association for Stock Car Racing, Inc. ("NASCAR") or by an entity in direct
competition with NASCAR for stock car racing (the "Business") except that
Employee may own securities issued by PMI,
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Penske or affiliates or less than one percent of the outstanding publicly held
securities of any issuer engaged in the Business.
(d) Employee acknowledges and agrees that the covenants and
undertakings contained in this Section 11 relate to matters which are of a
special, unique and extraordinary character and that a violation of any of the
terms hereof will cause irreparable injury to the Company, and PMI, the amount
of which will be impossible to estimate or determine and which cannot be
adequately compensated. Therefore, Employee agrees that the Company, and PMI,
shall be entitled, as a matter of course, to an injunction, restraining order,
or other equitable relief from any court of competent jurisdiction, restraining
any violation or threatened violation of any of such terms by Employee and such
other persons as the court shall order.
(e) Employee agrees that the covenants and undertakings in this
Section 11 shall survive the termination of this Agreement.
(f) Employee agrees to reimburse the Company and PMI for any and
all costs incurred by either in securing their rights and remedies pursuant to
this Section 11, including, without limitation, reasonable attorneys' fees
actually incurred.
(g) Rights and remedies provided for in this Section 11 are
cumulative and shall be in addition to right and remedies otherwise available
to the Company and PMI under other agreement or applicable law.
12. No Assignment.
This Agreement is personal and shall in no way be subject
to assignment, except by the Company incident to the sale of all or
substantially all of its business (whether by asset sale, stock sale or
merger). Any attempt by one party to assign this Agreement in any other
circumstances without the prior written consent of the other party shall be
null and void.
13. Enforceability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a duly authorized court of competent
jurisdiction, then the remainder of this
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Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
14. Notices.
All notices and other communications required or permitted to be given
hereunder shall be given by delivering the same in hand or by mailing the same
by certified or registered mail, return receipt requested, postage prepaid, as
follows:
if to the Company, to:
North Carolina Motor Speedway, Inc.
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
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if to the Employee, to:
Xxx. Xxxxx XxXxxx Xxxxxxxxx
X.X. XxXxxx Trucking Company, Inc.
0000 X. X.X. Xxx. 000
Xxxxxxx, XX 00000
(or to such other address as either party shall have furnished to the other by
like notice).
A notice shall be effective as of the date of such delivery or mailing, as the
case may be.
15. Entire Agreement.
This Agreement constitutes the only agreement and understanding
between Company and the Employee in relation to the subject of the Employee's
employment by Company; and there are no promises, representations, conditions,
provisions or terms related thereto other than those set forth herein. This
Agreement supersedes all previous understandings, agreements and
representations, written or oral, between Company and the Employee regarding
the Employee's employment by Company.
16. Governing Law.
This contract shall be construed under and be governed in all respects
by the internal laws, and not the laws pertaining to choice or conflicts of
laws, of the State of North Carolina.
17. Waiver; Amendment.
No waiver in any instance by either party of any provision of this
Agreement shall be deemed a waiver by such party of such provision in any other
instance or a waiver of any other provision hereunder in any instance. This
Agreement cannot be amended, supplemented or otherwise modified except in a
writing signed by Company, and by the Employee (so long as she shall be
employed by Company).
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
North Carolina Motor Speedway, Inc.
By: /s/ Xx XxXxxx Xxxxxx
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Name: Xx XxXxxx Xxxxxx
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Title: President
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ATTEST:
By: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, Executive Vice President
[CORPORATE SEAL]
/s/ Xxxxx XxXxxx Xxxxxxxxx (SEAL)
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Xxxxx XxXxxx Xxxxxxxxx
As an inducement for Xxx. Xxxxx XxXxxx Xxxxxxxxx to enter into this
employment agreement, Penske Acquisition, Inc., Penske Motorsports, Inc. and
PSH Corp. do hereby affirm and adopt the obligations set forth in the foregoing
Agreement, by their duly authorized representatives.
Dated: August 5, 1997 Penske Acquisition, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx,
Vice President
Dated: August 5, 1997 Penske Motorsports, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx,
Vice Chairman
Dated: August 5, 1997 PSH Corp.
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By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxxx,
Vice President
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