CHAMPIONSHIP AUTO RACING TEAMS, INC.
EMPLOYMENT AGREEMENT
XXXXXXXXXXX X. XXXX
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This Employment Agreement (the "Agreement") is entered into as of December
18, 2001 by and between Championship Auto Racing Teams, Inc., a Delaware
corporation ("Company") and Xxxxxxxxxxx X. Xxxx ("Pook").
In consideration of the promises below, the parties agree as follows.
1. TITLE. Pook shall hold the title of President and Chief Executive
Officer.
2. DUTIES.
2.1. GENERAL DUTIES. Pook shall undertake and render services as may
from time to time be assigned to him by the Board of Directors or their
designees. The duties shall be reasonably consistent with Pook's experiences and
shall include control and responsibility for the day to day operation and
activities of the Company, reporting directly to the Board of Directors, subject
to the Bylaws of the Company and of CART, Inc.
2.2. OUTSIDE ACTIVITIES. Pook shall devote his full time to the
performance of his duties, and agrees that his first duty of loyalty is to
Company. Except with the express written consent of the Board of Directors, Pook
shall not, directly or indirectly, alone or as a member of any partnership, or
as an officer, director or employee of any other corporation, partnership or
other organization, be actively engaged in any other duties or pursuits which
interfere or compete with the performance of his duties under this Agreement.
Pook is specifically permitted to remain available to Dover Downs Entertainment,
Inc. for a reasonable transition period to assist in a transfer of his knowledge
to other employees relative to existing operations and future ventures.
3. TERM. This Agreement shall commence on December 18, 2001 and continue in
force for three years until December 31, 2004, (the "Employment Period") unless
sooner terminated by either party pursuant to Section 5 or Section 6 of this
Agreement and except as provided in Section 6.3 of this Agreement.
4. COMPENSATION. As payment in full for services rendered to Company, Pook
shall be entitled to receive from Company, and Company shall pay to Pook, salary
and benefits as follows.
4.1 SALARY. Company shall initially pay to Pook base salary at a rate
of $375,000 per annum, for December 18, 2001 through 2002 ("Base Salary")
payable bi-weekly or at such other time or times as Company may allow or
provide to other similarly situated employees in accordance with policies
adopted from time to time by the Board of
Directors. Base Salary for any partial period of employment shall be prorated.
All compensation shall be subject to deductions or withholding for taxes. Pook's
salary shall be renewed annually by the Board or a committee thereof and will
receive a minimum increase equal to the Consumer Price Index all items ("CPI").
4.2 BONUS. Annually, commencing for the year 2002, the Company shall
pay Pook a Bonus, which shall be based on established objective goals to be
agreed upon by the Company's Compensation Committee and Pook.
4.3 INITIAL BONUS. Pook shall be paid an initial bonus of $120,000,
payable on or before December 31, 2001.
4.4 FRINGE BENEFITS. Pook shall be entitled to annual vacation of five
(5) weeks per year and to receive employee and fringe benefits including but not
limited to any compensation plan such as an incentive stock option, restricted
stock or stock purchase plan or any employee benefit plan such as a thrift,
pension, profit sharing, medical disability, $500,000 group term life insurance
policy, accident, plan program or policy (the Company's "Plans") as Company may
allow or provide to other similarly situated employees in accordance with
policies adopted from time to time by the Board of Directors. Each year, the
Company shall also reimburse Pook for his cost of a whole life insurance policy
in the amount of $450,000 (split dollar policy is acceptable).
4.5 EXPENSE REIMBURSEMENT. Company shall: (a) reimburse Pook for
expenses necessarily and reasonably incurred by him for travel and entertainment
which amounts shall be consistent with the size and profitability of the Company
and within the amounts budgeted for such expenses, including first or business
class air travel for flights over two hours. Pook shall submit such proofs of
expense for which reimbursement is claimed in writing as the Company may
reasonably require. Company shall also reimburse or pay directly for all travel
expenses for Pook's spouse to travel to events or to Troy, Michigan in an amount
not to exceed $25,000 per annum; (b) provide use of a Company automobile or a
monthly allowance of $600, (c) pay for up to 30 days hotel accommodations for
the first 30 days of employment and (d) pay for the costs of a one bedroom
apartment through April 30, 2002.
4.6 SICKNESS AND DISABILITY. Except as set forth in Section 5 and
Section 6, Pook shall receive 80% of Pook's compensation for any period of
illness or incapacity during the term of this Agreement up to a maximum of 8
months.
4.7 HOLIDAYS. Pook shall be entitled to holidays recognized as State
and/or National holidays and as Company may allow or provide in accordance with
policies adopted from time to time by the Board of Directors.
5. TERMINATION OF EMPLOYMENT. The following provisions shall apply in the
event of termination of Pook's employment for any reason other than a
termination that occurs concurrent with or subsequent to a Change in Control as
defined in Section 6.1.
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5.1. RIGHT TO TERMINATE BY COMPANY. Company may terminate Pook's
employment, through its Board of Directors, without cause upon 30 days' written
Notice of Termination (as defined in Section 7 of this Agreement) or immediately
upon Notice of Termination for Cause. The term "Cause" when referring to
termination by Company means only the following and any other termination shall
be without Cause: (i) Pook's gross dereliction of his duties; (ii) theft or
misappropriation of any property of Company by Pook; (iii) conviction of Pook of
a felony or of any crime involving dishonesty or moral turpitude; or (iv)
violation by Pook of the provisions of this Agreement; provided that,
termination for violation by Pook of the provisions of this Agreement shall
occur only after 60 days' advance written notice by Company to Pook containing
reasonably specific details of the alleged breach failure of Pook to cure the
same within such 60 day period.
5.2. TERMINATION FOR DEATH OR DISABILITY. Pook's employment shall
terminate upon the earliest of the events specified below:
(i) the death of Pook:
(ii) the Date of Termination (as defined in Section 7) specified in a
written Notice of Termination by reason of physical or mental condition of Pook
which shall substantially incapacitate him from performing his principal duties
("Disability") delivered by the Board of Directors to Pook at least 30 days
prior to the specified Date of Termination, which shall be any date after the
expiration of any 120 consecutive days during all of which Pook shall be unable,
by reason of his Disability, to perform his principal duties, provided however,
that such Notice of Termination shall be null and void if Pook fully resumes the
performance of his duties under this Agreement prior to the Date of Termination
set forth in the Notice of Termination.
5.3. RIGHT TO TERMINATE BY POOK. Pook may terminate his employment for
good reason or without good reason upon 60 days' written Notice of Termination.
The term "Good Reason" when referring to termination by Pook means a material
breach by Company of its obligations under this Agreement, or as provided in
Section 6.4, including the payment of money, and only after 60 days' advance
written notice of Termination containing reasonably specific details of the
alleged breach and failure to cure the same within such 60 day period.
Termination for any other reason shall be without Good Reason.
5.4. RESULTS OF TERMINATION BY COMPANY.
(i) TERMINATION FOR CAUSE. On the Date of Termination for Cause of
Pook's employment by Company, Company shall pay the Base Salary then in effect
through the Date of Termination.
(ii) TERMINATION WITHOUT CAUSE. On the Date of Termination Without
Cause of Pook's employment by Company during 2002, Company shall pay Pook 75% of
his Base Salary (as adjusted by the CPI increase) then in effect throughout the
Employment Period and Company shall maintain in full force and effect, for the
continued benefit of Pook and Pook's dependents for a period terminating on the
earliest of (a) the expiration of the Employment
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Period or (b) the commencement date of equivalent benefits from a new employer,
all life, accidental death, medical and dental insurance plans or programs in
which Pook was entitled to participate immediately prior to the Date of
Termination, provided that Pook's continued participation is possible under the
general terms and provisions of such plans and Pook continues to pay an amount
equal to his regular contribution for such participation, if any. If Pook is
terminated during 2003, the payment to Pook shall be 80% of Base Salary, as
adjusted, and if terminated during 2004, 100% of Base Salary, as adjusted and
all other provisions of this section shall remain the same.
5.5. RESULTS OF TERMINATION FOR DEATH OR DISABILITY.
(i) DEATH OF POOK. If Pook's employment is terminated due to the death
of Pook, Company shall pay the Base salary due Pook through the date on which
death occurs;
(ii) DISABILITY OF POOK. If Pook's employment is terminated due to the
disability of Pook as described in Section 5.2 (ii) of this of this Agreement,
Company shall continue to pay Pook his Base Salary for the 90-day period
following the specified Date of Termination. After this 90 period, Company
agrees to pay to Pook during each month for the next six months an amount equal
to the difference between Pook's monthly Base Salary and the amount which Pook
receives or is entitled to receive from any long term disability insurance
coverage provided for Pook by Company. If Pook's disability occurs in the course
of his duties hereunder due to accident or injury, Pook shall receive his Base
Salary and fringe benefits throughout the remaining Employment Period.
5.6. RESULTS OF TERMINATION BY POOK.
(i) TERMINATION WITHOUT GOOD REASON. Upon Pook's termination without
Good Reason of his employment, Company shall pay the Base Salary due Pook
through the Date of Termination.
(ii) TERMINATION FOR GOOD REASON. Upon Pook's termination of his
employment for Good Reason, Company shall make the same payments to Pook as
Company would be obligated to make under 5.4 (ii) of this Agreement if Pook's
employment was terminated without Cause by Company.
5.7. OTHER COMPANY POLICIES. Upon termination of Pook's employment for
any reason, Pook will be entitled to any additional rights pursuant to policies
of Company regarding employment termination established by the Board of
Directors from time to time.
5.8. TERMINATION OF COMPANY'S OBLIGATION. If at any time within the 24
month period following termination of Pook's employment without Cause by Company
pursuant to Section 5.1 of this Agreement or termination by Pook for Good Reason
pursuant to Section 5.3 of this Agreement, Pook breaches any of his obligations
under Sections 8, 9, 10, 11 and 12 of this Agreement, then Company's obligation
to make payments under Sections 5.4 (ii) or 5.6 (ii) of this Agreement shall
cease as of the date such breach occurs.
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6. CHANGE IN CONTROL
6.1. CHANGE IN CONTROL AND PROPOSED CHANGE IN CONTROL DEFINED.
(i) No benefits shall be payable to Pook pursuant to this Section 6
unless there shall have been a Change in Control of the Company as set for the
below. For purposes of this Agreement a "Change in Control" shall mean a Change
in Control of Company of a nature that would be required to be reported in
response to Item 1 (a) of the Current Report on Form 8- K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"); provided that, without limitation, such a
Change in Control shall be deemed to have occurred at such time as:
(a) any Person, as such term is used in Section 13 (d) and 14
(d) of the Exchange Act (other than Company, any trustee or other
fiduciary holding securities under an employee benefit plan of Company,
or any company owned, directly or indirectly, by the stockholders of
Company in substantially the same proportions as their ownership of
stock of Company) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 25% or
more of the combined voting power of Company's outstanding securities;
(b) individuals who constitute the Board on the date hereof
(the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for
election by Company's shareholders, was approved by a vote of at least
a majority of the directors comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of Company in which
such person is named as a nominee for director, without objection to
such nomination) shall be, for purposes of this clause (b), considered
as though such person were a member of the Incumbent Board.
(c) the stockholders of Company approve a merger or
consolidation of Company with any other company, other than (1) a
merger or consolidation which would result in the voting securities of
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding by or being converted into voting
securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of Company or such surviving
entity outstanding immediately after such merger or consolidation or
(2) a merger or consolidation effected to implement a recapitalization
of Company (or similar transition) in which no "Person" (as defined
above) acquires more than 50% of the combined voting power of the
Company's then outstanding securities; or
(d) the stockholders of Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by
Company of all or substantially all of Company's assets.
Notwithstanding anything in the foregoing to the contrary, no Change in
Control shall be deemed to have occurred for purposes of this Agreement by
virtue of any transaction which
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results in Pook, or a group of Persons which includes Pook, acquiring, directly
or indirectly, 50% or more of the combined voting power of the Company's
outstanding securities.
(ii) For purposes of this Agreement, a "Proposed Change in Control" of
Company shall be deemed to have occurred if:
(a) Company enters in an agreement, the consummation of which
would result in the occurrence of a Change in Control of Company;
(b) any person (including Company) publicly announces an
intention to take or to consider taking actions which if consummated
would constitute a change in Control of Company;
(c) any person (other than a trustee or other fiduciary
holding securities under an employee benefit plan of Company, or a
company owned, directly or indirectly, by the stockholders of Company
in substantially the same proportions as their ownership of stock of
Company), who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 25% or more of
the combined voting power of Company's then outstanding securities,
increases his beneficial ownership of such securities through either
successive or simultaneous acquisition by a total of 3 percentage
points or more over the percentage so owned by such person prior to
such acquisition; or
(d) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Proposed Change in Control of Company has
occurred.
6.2. CONTINUED EMPLOYMENT. If a Proposed Change in Control occurs prior
to the expiration of this Agreement, Pook agrees that he will remain in the
employ of Company until the earliest of (a) a date which is 180 days from the
occurrence of such Proposed Change in control of Company, (b) the termination of
Pook's employment by reason of death or Disability as defined in Section 5.2 of
this Agreement, or (c) the date on which Pook first becomes entitled under this
Agreement to receive the benefits provided in Section 6.5 of this Agreement.
If a Proposed Change in Control occurs prior to the expiration of this
Agreement, Company agrees that it will not terminate Pook's employment without
Cause until the earliest of (a) a date on which the Board adopts a resolution to
the effect that the actions leading to such Proposed Change in control have been
abandoned or terminated, (b) the termination of Pook's employment by reason of
Death or Disability as defined in Section 5.2 of t his Agreement, or (c) the
date on which Pook first becomes entitled under this Agreement to receive the
benefits provided in Section 6.5 of this Agreement.
6.3. TERM OF AGREEMENT. If a Change in Control occurs prior to the
expiration of this Agreement, this Agreement shall continue in effect for a
period of not less than twenty-four (24) months beyond the month in which the
Change in Control shall have occurred provided
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that (i) such Change in Control shall have occurred prior to the end of the
Employment Period and (ii) if Pook's employment has not been terminated pursuant
to Section 5 of this Agreement prior to the occurrence of such Change in
Control.
6.4. TERMINATION FOLLOWING CHANGE IN CONTROL. If a Change in Control
shall have occurred, Pook shall be entitled to the benefits provided in Section
6.5 of this Agreement upon the termination of his employment within twenty-four
(24) months after such Change in Control has occurred, unless such termination
is (a) because of Pook's death, (b) by the Company for Cause, (c) because of
Pook's Disability or (d) by Pook other than for Good Reason (as all such
capitalized terms are hereinafter defined.).
(i) DISABILITY. Termination by Company of Pook's employment based on
Disability shall have the meaning as defined in Section 5.2 of this Agreement.
(ii) TERMINATION BY COMPANY FOR CAUSE. Company may terminate Pook's
employment for Cause, through its Board of Directors, immediately upon Notice of
Termination. Termination by Company of Pook's employment for Cause shall have
the meaning as defined in Section 5.1 of this Agreement.
(iii) TERMINATION BY POOK FOR GOOD REASON. Pook may terminate his
employment for Good Reason upon 90 day's written Notice of Termination.
Termination by Pook of his employment for Good Reason shall have the meaning
defined in Section 5.3 of this Agreement and, for the purposes of this Section
6, shall have the following additional meanings:
(a) a change in Pook's status, position(s) or responsibilities
as an officer of Company which, in his reasonable judgment, does not
represent a promotion from his status, title, position(s) and
responsibilities as in effect immediately prior to the Change in
Control, or the assignment to him of any duties or responsibilities
which, in his reasonable judgment, are inconsistent with such status,
title or position(s), or any removal of him from or any failure to
reappoint or reelect him to such position(s), except in connection with
the termination of his employment by Company for Cause, for Disability
or as result of Pook's death or by Pook for Good Reason as defined in
Section 5.3 of this Agreement:
(b) a reduction by Company in Pook's Base Salary as in effect
immediately prior to the Change in Control;
(c) the failure by Company to continue in effect any Plan (as
defined in Section 4.4 of this Agreement) in which he is participating
at the time of the Change in Control (or Plans providing him with at
least substantially similar benefits) other than as a result of the
normal expiration of any such Plan in accordance with its terms in
effect at the time of the Change in Control, or the taking of any
action, or the failure to act, by Company which would adversely affect
his continued participation in any of such Plans on at least as
favorable a basis to him as is the case on the date of the Change in
Control or which would materially reduce his benefits in the future
under any of such Plans or deprive him of any material benefit enjoyed
by him at the time of the Change in Control;
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(d) Company's requiring Pook to be based anywhere other than
where Pook's office is located immediately prior to the Change in
Control except for required travel on Company's business to an extent
substantially consistent with the business travel obligations which
Pook undertook on behalf of the Company prior to the Change in Control;
(e) the failure by Company to obtain from any Successor (as
hereinafter defined) the assent to this Agreement contemplated by
Section 6.6 of this Agreement; and
(f) any purported termination by Company of Pook's employment
is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 7.1 of this Agreement which purported
termination shall not be effective for purposes of this Agreement.
(iv) TERMINATION BY COMPANY WITHOUT CAUSE. Company may terminate Pook's
employment, through its Board of Directors, without Cause upon 90 days' written
Notice of Termination. Termination by Company of Pook's employment without Cause
shall have the meaning as defined in Section 5.1 of this Agreement.
(v) TERMINATION BY POOK WITHOUT GOOD REASON. Pook may terminate his
employment without Good Reason upon 90 days' written Notice of Termination.
Terminating by Pook of Pook's employment without Good Reason shall have the
meaning defined in Section 5.3 of this Agreement.
6.5. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(i) COMPENSATION UPON DISABILITY. During any period following a Change
in Control that Pook fails to perform his duties as a result of Disability,
Company shall make the payments set forth in Section 5.5 (ii) of this Agreement.
(ii) COMPENSATION UPON TERMINATION BY COMPANY FOR CAUSE. If Pook's
employment shall be terminated by Company for Cause following a Change in
Control, Company shall make the payments set forth in Section 5.4(i) of this
Agreement.
(iii) COMPENSATION UPON TERMINATION BY COMPANY WITHOUT CAUSE OR BY POOK
FOR GOOD REASON. If, within twenty-four (24) months after a Change in Control
shall have occurred Pook's employment by Company shall be terminated (a) by
Company without cause or (b) by Pook for Good Reason based on an event occurring
concurrent with or subsequent to a Change in Control, then, at the time
specified in Subsection (vii), Pook shall be entitled, without regard to any
contrary provisions of any Plan, to the benefits as provided below:
(a) the Company shall pay Pook his full Base Salary through
the Date of Termination at the rate in effect just prior to the time a
Notice of Termination is given plus any benefits or awards (including
both cash and stock components) which pursuant to the terms of any
Plans have been earned or become payable, but which have not yet
8
been paid to Pook (including amounts which previously had been deferred
at Pook's request);
(b) as severance pay and in lieu of any further salary for
periods subsequent to the Date of Termination, Company shall pay to
Pook at the time specified in subsection (vii), a single lump sum
severance payment (the "Severance Payment") in an amount in cash equal
to three times Pook's annual Base Salary at the rate in effect just
prior to the time a Notice of Termination is given;
(c) Company shall maintain in full force and effect, for the
continued benefit of Pook and Pook's dependents for a period
terminating on the earliest of (x) two years after the Date of
Termination or (y) the commencement date of equivalent benefits from a
new employer all life, accidental death, medical and dental insurance
plans or programs in which Pook was entitled to participate immediately
prior to the Date of Termination, provided that Pook's continued
participation is possible under the general terms and provisions of
such plans and Pook continues to pay an amount equal to his regular
contribution for such participation, if any. If, at the end of two
years after the Termination Date Pook has not previously received or is
not then receiving equivalent benefits from a new employer, Company
shall arrange, at its sole cost and expense, to enable Pook to convert
Pook and Pook's dependents' coverage under such plans to individual
policies or programs upon the same terms as employees of company may
apply for such conversions. In the event that Pook's participation in
any such plan is barred, Company at its sole cost and expense, shall
arrange to have issued for the benefit of Pook and Pook's dependents
individual policies of insurance providing benefits substantially
similar (on an after-tax basis) provided that, Company shall be
responsible for the payment of such benefits (on an after tax basis) to
those which Pook otherwise would have been entitled to receive under
such plans pursuant to this paragraph (c) or, if such insurance is not
available at a reasonable cost to Company, Company shall otherwise
provide Pook and Pook's dependents equivalent benefits (on an after tax
basis) for a period not to exceed five years following the end of the
two years after the Termination Date. Pook shall not be required to pay
any premiums or other charges in an amount greater than that which Pook
would have paid in order to participate in such plans.
Company shall pay Pook for any vacation time earned but not
taken at the Date of Termination, at an hourly rate equal to Pook's
annual Base Salary as in effect immediately prior to the time a Notice
of Termination is given divided by 2080.
Company shall pay to Pook all legal fees and expenses incurred
by Pook as a result of such termination, including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination in seeking to obtain or enforce any right or benefit
provided by this Section 6 of this Agreement (other than any such fees
or expenses incurred in connection with any such claim which is
determined to be frivolous) or in connection with any tax audit or
proceeding to the extent attributable to the application of section
4999 of the Internal Revenue Code of 1986, as amended (the "Code").
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(iv) COMPENSATION UPON TERMINATION BY POOK WITHOUT GOOD REASON. If
Pook's employment shall be terminated by Pook without Good Reason following a
Change in Control, Company shall make the payments set forth in Section 5.6(ii)
of this Agreement.
(v) NO OFFSETS OR REDUCTIONS. Except as specifically provided above,
the amount of any payment provided for in this Section 6.5 shall not be reduced
offset or subject to recovery by Company by reason of any compensation earned by
Pook as the result of employment by another employer after the Date of
Termination, or otherwise. Pook's entitlements under Section 6.5 of this
Agreement are in addition to, and not in lieu of, any rights, benefits or
entitlements Pook may have under the terms or provisions of any Plan.
(vi) COMPANY'S DEDUCTION OF PAYMENT. Notwithstanding anything in the
foregoing to the contrary, Company shall not be obligated to pay any portion of
any amount otherwise payable to Pook pursuant to this Agreement if the payment
would cause any amount to be paid by Company to Pook to not be reasonably
deductible by the Company solely by operation of Section 280G of the Internal
Revenue Code of 1986, as amended, or any equivalent successor provision of law.
(vii) TIME OF PAYMENT. The payments provided for in Subsection (iii)
shall be made not later than the fifth day following the Date of Termination;
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, Company shall pay to Pook on such day an
estimate, as determined in good faith by Company, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the thirtieth day after the
Date of Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by Company to Pook payable on the fifth day after demand
therefor by Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
6.6. SUCCESSORS; BINDING AGREEMENT.
(i) SUCCESSORS. Company will 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 Company to expressly assume
and agree to perform Company's obligations under this Agreement in the same
manner and to the same extent that Company would be required to perform it if
not such succession had taken place. Failure of Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle Pook to compensation from
Company in the same amount and on the same terms to which Pook would be entitled
hereunder if Pook terminated his employment for Good Reason following a Change
in Control of Company, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any Successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
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(ii) BINDING AGREEMENT. This Agreement shall inure to the benefit of
and be enforceable by Pook and Pook's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Pook should die while any amount would still be payable to him
hereunder if Pook had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Pook's devisee, legatee or other designee or, if there be no such designee, to
Pook's estate.
6.7. ARBITRATION. Any dispute or controversy arising under or in
connection with Section 6 of this Agreement shall be settled exclusively by
arbitration in California by three arbitrators in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrators' award in any court having jurisdiction; provided, however, that
Pook shall be entitled to seek specific performance of Pook's right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with the Agreement. Company shall bear all costs
and expenses arising in connection with any arbitration proceeding pursuant to
this Section 6.7.
6.8. SURVIVAL. The respective obligations of, and benefits afforded to,
Company and Pook as provided in Section 6.5, 6.6 and 6.7 of this Agreement shall
survive termination of this Agreement.
6.9. TERMINATION OF COMPANY'S OBLIGATION. If at any time within the 24
month period following termination of Pook's employment without Cause by Company
pursuant to Section 6.4(iv) or termination by Pook for Good Reason pursuant to
Section 6.4(iii) of this Agreement, Pook breaches any of his obligations under
Sections 8, 9, 10, 11, and 12 of this Agreement, then Company's obligation to
make payments under Section 6.5(iii) shall cease as of the date such breach
occurs.
7. DEFINITIONS. For purposes of Section 5 and Section 6 of this Agreement,
Notice of Termination and Date of Termination shall have the following meanings:
7.1. NOTICE OF TERMINATION. Any purported termination by Company or by
Pook pursuant to Section 5 or Section 6 of this Agreement shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Section 18.3 of this Agreement. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and, except in the event of termination
by Pook without Good Reason or termination by Company without Cause, such Notice
of Termination shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Pook's employment under the
provisions so indicated.
7.2. DATE OF TERMINATION. "Date of Termination" following a termination
of Pook's employment by Company or Pook pursuant to Section 5 or Section 6 of
this Agreement shall mean (i) if Pook's employment is to be terminated for
Disability, thirty (30) days after Notice of Termination is delivered by the
Board to Pook provided that such notice shall be given only after the expiration
of any 120 consecutive days during all of which Pook shall be unable by reason
of his disability to perform his principal duties (provided that such Notice of
Termination
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shall be null and void if Pook fully resumes the performance of Pook's duties
under this Agreement prior to the Date of Termination as set forth in the
Notice); (ii) if Pook's employment is to be terminated by company for cause, the
date on which a Notice of Termination is given; and (iii) if Pook's employment
is terminated by Pook with Good Reason or without Good Reason or by Company
without Cause, the date specified in the Notice of Termination, which shall be a
date no earlier than thirty (30) days after the date on which Notice of
Termination pursuant to Section 5 is given and no earlier than ninety (90) days
after the date on which a Notice of Termination pursuant to Section 6 is given,
unless an earlier date has been agreed to by the party receiving the Notice of
Termination either in advance of, or after, receiving such Notice of
Termination. Notwithstanding anything in the foregoing to the contrary, if the
party receiving the Notice of Termination pursuant to Section 6 has not
previously agreed to the termination, then within thirty (30) days after any
Notice of Termination is given, the party receiving such Notice of Termination
may notify the other party that a dispute exists concerning the termination, in
which event the Date of Termination shall be the date set either by mutual
written agreement of the parties or by the arbitrators in a proceeding as
provided in Section 6.7 of this Agreement.
8. CONFIDENTIALITY.
8.1. DEFINITION OF CONFIDENTIAL INFORMATION. As used in this Agreement,
the term "Confidential Information" means: (a) proprietary information of
Company; (b) information marked or designated by Company as confidential; (c)
information, whether or not in written form and whether or not designated as
confidential, which is known to Pook as being treated by Company as
confidential; and (d) information provided to Company by third parties which
Company is obligated to keep confidential. Confidential Information includes but
is not limited to, discoveries, ideas, designs, drawings, specifications,
techniques, models, devises, data, formula, programs, documentation, processes,
know-how, customer lists, marketing plans, and financial and technical
information.
8.2. ACKNOWLEDGMENT OF RECEIPT OF CONFIDENTIAL INFORMATION. Pook
acknowledges that in the course of performing his duties for Company he will
have access to Confidential Information, the ownership and confidential status
of which are highly important to company, and Pook agrees in addition to the
specific covenants contained herein to comply with all Company policies and
procedures for the protection of such Confidential Information.
8.3. OWNERSHIP. Pook acknowledges that all Confidential Information is
and shall continue to be the exclusive property of Company, whether or not
prepared in whole or in part by him and whether or not disclosed to or entrusted
to him in connection with employment by Company.
8.4. ACKNOWLEDGMENT OF IRREPARABLE HARM. Pook acknowledges that any
disclosure of Confidential Information will cause irreparable harm to Company.
8.5. COVENANT OF NONDISCLOSURE. Pook agrees not to disclose
Confidential Information, directly or indirectly, under any circumstances or by
any means, to any third person without the express written consent of Company.
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8.6. COVENANT OF NONUSE. Pook agrees that he will not copy, transmit,
reproduce, summarize, quote, or make any commercial or other use whatsoever of
Confidential Information, except as may be necessary to perform work done by him
for Company.
8.7. SAFEGUARD OF CONFIDENTIAL INFORMATION. Pook agrees to exercise the
highest degree of care in safeguarding Confidential Information against loss,
theft, or other inadvertent disclosure and agree generally to take all steps
necessary or requested by Company to insure maintenance of confidentiality.
8.8. EXCLUSIONS. This Agreement shall not apply to the following
information: (a) information now and hereafter voluntarily disseminated by
Company to the public or which otherwise becomes part of the public domain
through lawful means; (b) information already known to Pook as documented by
written records which predate this Agreement; (c) information subsequently and
rightfully received from third parties and not subject to any obligation of
confidentiality; (d) information independently developed by Pook.
8.9. WORK MADE FOR HIRE. Pook agrees that all creative work, including
computer programs or models, prepared or originated by him for Company or during
or within the scope of his employment by Company which may be subject to
protection under Federal copyright Law, constitutes "work made for hire," all
rights to which are owned by Company; and, in any event, Pook assigns to Company
all intellectual property rights in such work whether by right of copyright,
trade secret or otherwise and whether or not subject to protection by copyright
laws.
9. COMPANY OWNERSHIP OF INVENTIONS.
9.1. COMPANY OWNERSHIP. Pook agrees that all inventions, discoveries,
improvements, trade secrets, formula, techniques, processes, know-how and
computer programs, whether or not patentable, and whether or not reduced to
practice, conceived or developed during his employment by Company, either alone
or jointly with others, which relate to or result from the actual or anticipated
business, work, research, or investigation of Company or any affiliated company,
or which result to any extent from use of Company or any affiliated company's
premises or property, shall be owned exclusively by the Company, Pook hereby
assigns to Company all his right, title and interest in all such inventions, and
Pook agrees that company shall be the sole owner of all domestic and foreign
patents or other rights pertaining thereto, and further agree to execute all
documents which Company reasonably determines to be necessary or convenient for
use in applying for, perfecting, or enforcing patents or other intellectual any
assignments, patent applications, or other documents which may be requested by
Company. Notwithstanding the above, this provision does not apply to an
invention for which no equipment, supplies, facilities, or trade secret of
Company was used and which was developed entirely on Pook's own time, unless (a)
the invention relates (i) directly to the business of Company, or (ii) to
Company's actual or demonstrably anticipated research or development, or (b) the
invention results from any work performed by Pook for Company.
9.2. POOK INVENTIONS. All inventions, if any, of Pook made prior to
Pook's employment by Company are excluded from the scope of this Agreement and a
complete list of
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such inventions, if any, is attached to this Agreement as Exhibit X. Xxxx agrees
to disclose to Company at the time of employment or thereafter, all inventions
being developed by Pook for the purposes of determining Pook or Company rights
to the invention.
10. VENTURES. If Pook, during the term of this Agreement, is engaged in or
associated with the planning or implementing of any project, program or venture
involving Company and any third party or parties, all rights in the project,
program or venture shall belong to Company, and Pook shall not be entitled to
any interest therein or to any commission, finder's fee or other compensation in
connection therewith other than the salary to be paid to Pook as provided in
this Agreement.
11. COVENANT OF GOOD FAITH. Pook agrees that the subject of this Agreement
involves sensitive matters which go to the very heart of the corporate existence
and well-being of Company and that it may be difficult for Company to protect
adequately its interest through agreement or otherwise. Pook agrees to exercise
the highest degree of good faith in his dealings with Company and to refrain
from any actions which might reasonably be deemed to be contrary to its
interests.
12. DELIVERY OF MATERIALS. Upon termination of his employment status, Pook
will deliver to Company all materials, including without limitation documents,
records, drawings, prototypes, models and schematic diagrams, which describe,
depict, contain, constitute, reflect, record or in any way relate to inventions
or Confidential Information, which are in Pook's possession or under his
control, whether or not the materials were prepared by Pook.
13. SUBPOENAS. If Pook is served with any subpoena or other compulsory
judicial or administrative process calling for production of Confidential
Information or if Pook is otherwise required by law or regulation to disclose
Confidential Information, Pook will immediately, and prior to production or
disclosure, notify Company and provide it with such information as may be
necessary in order that Company may take such action as it deems necessary to
protect its interest.
14. REMEDIES. Pook acknowledges that breach of Sections 8, 9, 10, 11, 12,
13, 15 and 16 of this Agreement will cause irreparable harm to the Company and
if Pook fails to abide by these obligations, Company will be entitled to
specific performance, including immediate issuance of a temporary restraining
order of preliminary injunction enforcing this Agreement, and to judgment for
damages caused by Pook's breach, and to the rights and duties of Company and
Pook, respectively, under this Agreement are in addition to, and not in lieu of,
those rights and duties afforded to and imposed upon them by law or at equity.
15. TERMINATION CERTIFICATE. Upon termination of this Agreement, Pook will
give a written statement in the form attached hereto as Exhibit A to Company
certifying that he has complied with his obligations under Sections 9, 11 and 12
and acknowledging his continuing obligations under Section 8 to preserve and
confidentiality of Company's confidential or secret knowledge or information,
and under Section 13 to notify Company if he is served with a subpoena.
16. OTHER OBLIGATIONS. Pook acknowledges that Company from time to time may
have agreements with other persons or with various governmental agencies that
impose obligations or restrictions on Company regarding inventions or creative
works made during the course of work
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thereunder or regarding the confidential nature or such work. Pook agrees to be
bound by all such obligations and restrictions of which he is informed by
Company and to take all action necessary to discharge the obligations of Company
thereunder.
17. DURATIONS. The obligations set forth in Sections 8, 9, 10, 11, 12 and
13 of this Agreement will continue beyond the term of Pook's employment by
Company for two years following such termination.
18. GENERAL PROVISIONS.
18.1. SEVERABILITY. The provisions of this Agreement are severable and
if any provision hereof is held to be invalid, illegal, or unenforceable in any
respect, it shall be enforced to the maximum extent permissible, and the
remaining provision of the agreement shall not be affected thereby and in full
force and effect.
18.2. ATTORNEY'S FEES/APPLICABLE LAW/VENUE. Except as provided in
Section 6.5(iii)(E), in any action or suit arising out of this Agreement, the
prevailing party shall be entitled to recover all reasonable attorneys' fees and
expenses of litigation, including fees on appeal or in connection with any
petition for review. The rights and obligations of the parties under this
Agreement shall in all respects be governed by the laws of the State of Michigan
exclusive of choice of law rules.
18.3. NOTICE. Any notice provided for hereunder may be delivered to the
designated recipient either by personal delivery or by certified mail, return
receipt requested. If mailed, the notice when enclosed in an envelope properly
addressed to the proposed recipient at his address last of record with the
notifying party and deposited postage paid in a mail depository of the United
States post office, shall be deemed given when so mailed. Notice to Company
shall be so delivered or addressed to an officer of Company other than Pook.
18.4. ASSIGNMENT. Pook acknowledges that the services to be rendered
are unique and personal. This Agreement may not be assigned by Pook.
18.5. SUCCESSORS OF COMPANY. This Agreement shall inure to the benefit
of and shall be binding upon Company, its successors, or assigns.
18.6. WAIVER. Company may waive any obligation Pook has under this
Agreement, but such waiver will not affect Company's right to require strict
compliance with the Agreement in the future.
18.7. ENTIRE AGREEMENT. THIS AGREEMENT SUPERSEDES ALL PREVIOUS
AGREEMENTS, ORAL OR WRITTEN, BETWEEN COMPANY AND POOK AND CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES, AND UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT,
NO MODIFICATION OR WAIVER OF ANY OF THE PROVISIONS OR ANY FUTURE REPRESENTATION,
PROMISE, OR ADDITION SHALL BE BINDING UPON THE PARTIES UNLESS MADE IN WRITING
AND SIGNED BY BOTH PARTIES.
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IN WITNESS WHEREOF, the parties have executed this contract on the date
first set forth above.
NOTICE TO POOK
THIS AGREEMENT MAY REQUIRE TRANSFER TO YOUR EMPLOYER OF CERTAIN INVENTIONS
OR WORKS OF AUTHORSHIP. YOU MAY WISH TO CONSULT YOUR LEGAL COUNSEL FOR ADVICE.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By:_________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
POOK
______________________________________
Xxxxxxxxxxx X. Xxxx
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