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EMPLOYMENT CONTRACT FOR SENIOR EXECUTIVE
Bikers Dream, Inc., a California corporation, located at 0000 Xxxxxxx
Xxx, Xxxxx Xxx, Xxxxxxxxxx 00000, hereinafter referred to as Employer, and
Xxxxxxx X. Xxxxxxx, hereinafter referred to as Employee, in consideration of
the mutual promises made herein, agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
Specified Period
Section 1.01. Employer hereby employs Employee and Employee hereby
accepts employment with Employer for a period of Five (5) years beginning on
September 25, 1995 and terminating on September 24, 2000. This Agreement shall
thereafter be renewed annually, unless a party shall have given 30 days' notice
to the other of intention not to renew.
"Employment Term" Defined
Section 1.02. As used herein, the phrase "employment term" refers to
the entire period of employment of Employee by Employer hereunder, whether for
the periods provided above, or whether terminated earlier as hereinafter
provided or extended automatically or by mutual agreement between Employer and
Employee.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
General Duties
Section 2.01. Employee shall serve as the Senior Vice President and
Chief Financial, Operating and Administrative Officer of Bikers Dream, Inc. In
the aforesaid capacities as Senior Vice President of Bikers Dream, Inc.,
Employee shall do and perform all services, acts, or things necessary or
advisable to manage and conduct the financial activities, operations and
administration of Employer.
Specific Duties and Authority
Section 2.02. Employee shall have the authority to approve or
disapprove all cash disbursements, except for ongoing contractual obligations
in existence at the date of hire, develop and approve budgets and business and
Corporate planning, manage human resources, oversee all operations, and
administration of staff and systems. Employee shall work with and report to
the president and Board of Directors of the corporation, which shall comprise
the only elements of superior authority in Employer corporation.
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BIKERS DREAM, INC.
FORM SB-2
EXHIBIT 10.23
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Matters Requiring Consent of Board of Directors
Section 2.03. Employee shall not without specific approval of
Employer's Board of Directors, do or contract to do any of the following:
(1) Borrow on behalf of Employer during any one fiscal year an
amount in excess of $100,000.
(2) Permit any customer of Employer to become indebted to Employer
in an amount in excess of $100,000.
(3) Purchase capital equipment for amounts in excess of
$10,000,00.
(4) Sell any single capital asset of Employer having a market
value in excess of $10,000 or a total of capital assets during a fiscal year
having a market value in excess of $30,000.
(5) Terminate the services of any other officer of Employer or
hire any replacement of any officer whose services have been terminated.
Devotion to Employer's Business
Section 2.04. (a) Employee shall devote his entire productive time,
ability, and attention to the business of Employer during the term of this
contract.
(b) Employee shall not engage in any other business duties or
pursuits whatsoever, or directly or indirectly render any services of a
business, commercial, or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of Employer's Board of Directors.
(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 materially interfere with the services required
under this agreement.
Competitive Activities
Section 2.05. 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 2.06. Employee hereby represents and agrees that the services
to be performed under
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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 that 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 Misconduct
Section 2.07. Employee shall indemnify and hold Employer harmless from
all liability for loss, damage, or injury to persons or property resulting from
the misconduct of Employee. Misconduct shall include acts involving moral
turpitude, illegal acts, or acts outside of Employee's authority which cause
damage to Employer.
Trade Secrets
Section 2.08. (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, customer
lists, financial, personnel, sales, and other information that is owned by
Employer and regularly used in the operation of Employer's business, and that
such information constitutes Employer's trade secrets.
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or 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 hereunder.
(c) Employee acknowledges and agrees that the sale or unauthorized
use or disclosure of any of Employer's trade secrets obtained by Employee
during the course of his employment under this agreement, including information
concerning Employer's current or any future and proposed work, services, or
products, the facts that any such work, services, or products are planned, under
consideration, or in production, as well as any descriptions thereof,
constitute unfair competition. Employee promises and agrees not to engage in
any unfair competition with Employer, either during the term of this agreement
or at any other time thereafter.
(d) Employee further agrees that all files, records, documents,
specifications, 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 written consent of Employer's Board of
Directors.
Services as Consultant
Section 2.09. Following Employee's retirement, and if the employment
term has not been terminated for cause, Employee shall make his advice and
counsel available to Employer for three months, at not less than one half of
his previous year's compensation. The parties agree that this
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advice and counsel shall not entail full time service and shall be consistent
with Employee's retirement status.
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. Employer shall provide Employee with a private office,
stenographic help, office equipment, supplies, and other facilities and
services, suitable to Employee's position and adequate for the performance of
his duties.
Indemnification of Losses of Employee
Section 3.03. 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 performed
hereunder, Employee shall receive a salary at the rate of $185,000 per annum
payable not less than bi-monthly during the employment term.
(b) Employee shall receive such annual increases in salary, if
any, as may be determined by Employer's Board of Directors in its sole
discretion at a meeting the agenda of which includes compensation of officers.
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.
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ARTICLE 5. EMPLOYEE INCENTIVES
Bonus
Section 5.01. Employee shall receive a sum equivalent to five percent
(5%) of the first $1 million net profits after tax of Employer, and two percent
(2%) of the second $1 million of net profits after tax of Employer, computed
for purposes of quantifying this bonus without its inclusion as an expense
item. For purposes of this computation, the opinion of the Employee's
independent accountants shall be binding on the parties. The bonus will be
paid to Employee within 60 days of the end of each fiscal year during the term
or any extension hereof.
Stock Options
Section 5.02. Employee will be granted stock options outside of
Employer's Incentive Stock Options Plan in the aggregate amount of 300,000
shares, exercisable at $2.50 per share at any time within two years of the
expiration date of all options. 50,000 of the stock options shall vest upon
execution of this agreement and commencement of employment, and 50,000 shall
vest on each anniversary of the date hereof for five years. Options granted
pursuant to this Agreement shall expire on September 25, 2002.
ARTICLE 6. EMPLOYEE BENEFITS
Annual Vacation
Section 6.01. Employee shall be entitled to five weeks vacation time
each year, with an increase of one week for each three years of service.
Vacation will vest throughout the year beginning as of the date of employment,
with 1/24 being earned each semi-monthly payroll period. The Employee shall
have the right to buyback vacation up to two weeks a year. Any accrued,
vested and unused vacation at the termination of employment for any reason will
be due and payable as compensation at the time of termination without loss of
other elements of compensation. In the event that Employee is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he may accumulate that time and add it to vacation time for any following
year, not to exceed 10 weeks in the aggregate.
Medical Coverage
Section 6.02. Employer agrees to, within 5 months of hire, include
Employee in the coverage of its medical, major medical, hospital, dental, and
eye care insurance. This shall include a flex spending account, and a PPO or
HMO option; a "cafeteria" plan will be provided if practical.
Life Insurance
Section 6.03. (a) Employer agrees to obtain a term life insurance
policy on the life of Employee in the face amount of $500,000. Employer
further agrees to make that insurance policy
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payable to the beneficiary or beneficiaries designated by Employee. Employer
agrees to pay all premiums on the policy during the term of employment provided
herein.
(b) Employee agrees to submit to a physical examination at any
time requested by Employer for the purpose of Employer's obtaining life
insurance on the life of Employee for the benefit of Employer; provided,
however, that Employer shall bear the entire cost of that examination. Employer
shall pay for an annual physical examination at a physician/institution of
Employee's choosing.
ARTICLE 7. BUSINESS EXPENSES
Reimbursement of Business Expenses
Section 7.01. (a) Employer shall promptly reimburse Employee for all
reasonable business expenses incurred by Employee in connection with the
business of Employer.
(b) 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 each such expenditure as an income tax
deduction.
ARTICLE 8. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 8.01. (a) Employer reserves the right to terminate this
agreement if Employee wilfully breaches or habitually neglects the duties which
he is required to perform under the terms of this agreement; or commits such
acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude
as 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
all relevant facts.
(d) Termination under this section shall be considered "for cause"
for the purposes of this agreement.
Termination Without Cause
Section 8.02. (a) If Employee is terminated by Employer during the
first 12 months of
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employment without cause, Employee shall be entitled to severance pay equal to
one year's compensation, incremented by one additional month for each month of
service, not to exceed a total of 24 months, payable in the same manner as if
Employee remained employed by Employer.
Effect of Merger, Transfer of Assets, Dissolution, other termination.
Section 8.03. (a) At the option of Employee, 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.
(b) In the event of any such merger or consolidation or transfer
of assets, Employer's rights, benefits, and obligations hereunder shall be
assigned to the surviving or resulting corporation or the transferee of
Employer's assets.
(c) If Employee does not wish to continue his employment with a
corporation other than Employer which is not the surviving corporation in a
merger, Employee shall be entitled to severance pay equal to one years total
compensation, incremented by one additional month for each month of service,
not to exceed a total of 24 months.
Termination by Employee
Section 8.04. Employee may terminate his obligations under this
agreement by giving Employer at least one months notice in advance.
Death of Employee
Section 8.05. This Agreement shall be terminated upon the death of
Employee.
ARTICLE 9. GENERAL PROVISIONS
Notices
Section 9.01. Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted 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 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 five days after date of
mailing.
Arbitration
Section 9.02. (a) Any controversy between Employer and Employee
involving the
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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.
(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 representation,
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 on either party.
Modifications
Section 9.05. Any modification of this agreement will be effective
only if it is in writing and signed by the party to be charged.
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 be 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.
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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 Decreased 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 September 11, 1995, at Santa Ana, California.
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EMPLOYER
Bikers Dream, Inc.
By: /s/ XXXXXX XXXXXXXX
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Xxxxxx Xxxxxxxx, President
EMPLOYEE
By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
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AMENDMENT TO EMPLOYMENT CONTRACT FOR
SENIOR VICE PRESIDENT, CHIEF FINANCIAL,
OPERATING AND ADMINISTRATIVE OFFICER
THIS AMENDMENT is to that certain Employment Contract by and between
Bikers Dream, Inc., a California corporation, ("Employer") and Xxxxxxx X.
Xxxxxxx, Senior Vice President, Chief Financial, Operating and Administrative
Officer, ("Employee"), which became effective on September 25, 1995.
A) Stock Options
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Article 5, Section 5.02 relating to Employee incentives, is deleted in
its entirety and the following language substituted therefor:
"Employee will be granted stock options in the aggregate amount of
300,000 shares, exercisable at $2.50 per share at any time within two
years of the expiration date of all options. 240,000 of these options
are granted under the Employer's Incentive Stock Options Plan, and
60,000 of these options are outside of the Employer's Incentive Stock
Options Plan. 50,000 of the stock options shall vest upon execution of
this agreement and commencement of employment, and 50,000 shall vest
each anniversary of the date hereof for five years. At each option
vesting date, 80% of the options will be under the Employer's
Incentive Stock Options Plan, and the balance will be outside of the
Employer's Incentive Stock Options Plan. All options granted pursuant
to this Agreement shall expire on September 25, 2002."
Employer
Bikers Dream, Inc. Dated: 10/5/95
------------------
By: /s/ XXXXXX XXXXXXXX By:
----------------------------- -----------------------------
Xxxxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx
President & CEO Senior Vice President, Chief
Financial Operating and
Administrative Officer
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AMENDMENT TO EMPLOYMENT CONTRACT FOR
SENIOR VICE PRESIDENT, CHIEF FINANCIAL,
OPERATING AND ADMINISTRATIVE OFFICER
THIS AMENDMENT is to that certain Employment Contract by and between
Bikers Dream, Inc., a California corporation, ("Employer") and Xxxxxxx X.
Xxxxxxx, Senior Vice President, Chief Financial, Operating and Administrative
Officer, ("Employee"), which became effective on September 25, 1995.
A) Stock Options
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Article 5, Section 5.02 relating to Employee incentives, is deleted in
its entirety and the following language substituted therefor:
"Employee will be granted stock options in the aggregate amount of
300,000 shares, exercisable at $2.50 per share at any time within two
years of the expiration date of all options. 240,000 of these options
are granted under the Employer's Incentive Stock Options Plan, and
60,000 of these options are outside of the Employer's Incentive Stock
Options Plan. 50,000 of the stock options shall vest upon execution
of this agreement and commencement of employment, and 50,000 shall
vest each anniversary of the date hereof for five years. At each
option vesting date, 80% of the options will be under the Employer's
Incentive Stock Options Plan, and the balance will be outside of the
Employer's Incentive Stock Options Plan. All options granted pursuant
to this Agreement shall expire on September 25, 2002."
Employer
Bikers Dream, Inc. Dated: 10/5/95
---------
By: By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx
President & CEO Senior Vice President, Chief
Financial Operating and
Administrative Officer