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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
AGREEMENT made as of May 15, 1997 between NORTH CAROLINA MOTOR
SPEEDWAY, INC., a North Carolina corporation (the "Company"), and XXX. XX
XXXXXX XXXXXX, a resident of Xxxxxxxx, 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 President and Chief Executive
Officer of the Company and shall perform such duties and have such
responsibilities as normally attributed to a president and chief executive
officer 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.
The requirement that the Employee devote her time to the business of the
Company shall not preclude her from undertaking 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 ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000) 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) Stock Options. Employee shall be entitled to participate in
the stock option plans of PMI as may be awarded from time to time at the
discretion of the Company's Board of Directors.
(c) 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.
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(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 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. Board Memberships.
For as long as this Agreement is in effect, Employee shall be entitled
to be elected to serve as a director of the Company and to be nominated as one
of PMI's slate of management nominees to serve as a director of PMI. PSH Corp.
will vote its shares in PMI in favor of Employee's election as a director.
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 or serve as a director
under Section 7 of this Agreement, (i) the Company or PMI, as applicable, shall
indemnify and reimburse expenses to the fullest extent permitted by the
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indemnification and expenses to reimbursement provisions of Company's or PMI'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 and PMI shall
use their best efforts to maintain in effect their 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
Company and PMI 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 or
PMI's Certificate of Incorporation and By-Laws in effect as of the date of this
Agreement, the Company and PMI further agree, 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 or PMI 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 or PMI, 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 or PMI as
authorized under its Certificate of Incorporation and By-Laws, in accordance
with the provisions of the Company's or PMI'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 or PMI at the time of such decision.
(c) The Company and PMI further agree to notify Employee of all
threatened or pending actions, suits, or other proceedings by or against the
Company or PMI to which Employee is named a party, and to be filed in
connection with it, and shall otherwise keep
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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 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
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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
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.
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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 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
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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, 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
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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 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.
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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
if to the Employee, to:
Xxx. Xx XxXxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, 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.
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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).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
North Carolina Motor Speedway, Inc.
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
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Title: Executive Vice President
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ATTEST:
By: /s/ Xxxxx Xxxxxxxxx Xxxxxx
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Xxxxx Xxxxxxxxx Xxxxxx, Secretary
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[CORPORATE SEAL]
/s/ Xx XxXxxx Xxxxxx (SEAL)
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Xx XxXxxx Xxxxxx
As an inducement for Xxx. Xx XxXxxx Xxxxxx 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
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Dated: August 5, 1997 Penske Motorsports, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx,
Vice President
Dated: August 5, 1997 PSH Corp.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx,
Vice Chairman
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