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Exhibit 10.3
EMPLOYMENT AGREEMENT
DATED AS OF NOVEMBER _____, 1998
BETWEEN
TECH 2000 WORLDWIDE, INC.
AND
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TABLE OF CONTENTS
Page
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1. EMPLOYMENT.............................................................................................. 1
2. FULL TIME OCCUPATION.................................................................................... 1
3. COMPENSATION AND OTHER BENEFITS......................................................................... 1
(a) Salary......................................................................................... 1
(b) Bonus.......................................................................................... 1
(c) Stock Options.................................................................................. 1
(d) Fringe Benefits................................................................................ 2
(e) Reimbursement.................................................................................. 2
4. TERM OF EMPLOYMENT...................................................................................... 2
(a) Employment Term................................................................................ 2
(b) Termination Under Certain Circumstances........................................................ 2
(i) Death................................................................................. 2
(ii) Disability............................................................................ 2
(iii) Unilateral Decision of Employer....................................................... 2
(iv) Unilateral Decision by Employee....................................................... 2
(v) For "Cause\........................................................................... 2
(c) Result of Termination.......................................................................... 3
5. COMPETITION AND CONFIDENTIAL INFORMATION................................................................ 3
(a) Interests to be Protected...................................................................... 3
(b) Non-Competition................................................................................ 3
(c) Non-Solicitation of Employees.................................................................. 3
(d) Confidential Information....................................................................... 3
(e) Return of Books and Papers..................................................................... 4
(f) Disclosure of Information...................................................................... 4
(g) Assignment..................................................................................... 4
(h) Equitable Relief............................................................................... 4
(i) Restrictions Separable......................................................................... 4
6. MISCELLANEOUS........................................................................................... 4
(a) Notices........................................................................................ 4
(b) Indulgences; Waivers........................................................................... 5
(c) Controlling Law................................................................................ 5
(d) Binding Nature of Agreement.................................................................... 5
(e) Execution in Counterpart....................................................................... 5
(f) Provisions Separable........................................................................... 5
(g) Entire Agreement............................................................................... 5
(h) Paragraph Headings............................................................................. 5
(i) Number of Days................................................................................. 5
7. SUCCESSORS AND ASSIGNS.................................................................................. 6
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of the _____ day of November, 1998, by and between ACTION INTERACTIVE,
INC., an Arizona corporation ("Employer"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Employee").
RECITALS
WHEREAS, Employee currently serves as President and Chief
Executive Officer of Tech 2000 Worldwide, Inc., a Massachusetts corporation
("Tech 2000"); and
WHEREAS, Employer is a wholly owned subsidiary of Action
Performance Companies, Inc., an Arizona Corporation ("Action"); and
WHEREAS, Tech 2000 is to be merged with and into Employer
pursuant to an Agreement and Plan of Reorganization of even date herewith by and
among Action, Employer, Tech 2000, and the shareholders of Tech 2000; and
WHEREAS, Employer desires to employ Employee, and Employee
desires to accept such employment, upon the terms and conditions contained
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth in this Agreement, the parties hereto agree as
follows:
1. EMPLOYMENT.
Employer hereby employs Employee, and Employee hereby accepts
such employment, as its Vice President of New Media and in such other capacities
and for such other duties and services as shall from time to time be mutually
agreed upon by Employer and Employee.
2. FULL TIME OCCUPATION.
Employee shall devote Employee's entire business time,
attention, and efforts to the performance of Employee's duties under this
Agreement, shall serve Employer faithfully and diligently, and shall not engage
in any other employment while employed by Employer.
3. COMPENSATION AND OTHER BENEFITS.
(a) SALARY. Employer shall pay to Employee, as full
compensation for the services rendered by Employee during Employee's employment
under this Agreement, a salary at a rate of $150,000 per annum (the "Base
Salary") to be paid in equal weekly installments, or in such other periodic
installments upon which Employer and Employee shall mutually agree. The Base
Salary shall be reviewed annually and may be increased by Employer in the sole
discretion of Employer's management authorized to make such decisions or
Employer's Board of Directors.
(b) BONUS. Employee shall be eligible to receive an
annual bonus in an amount up to 30% of the Base Salary determined in accordance
with Employer's management bonus plan.
(c) STOCK OPTIONS. Employee shall be granted
qualified stock options under one of Action's stock option plans to purchase a
total of 20,000 shares of Action's Common Stock at any time or from time to time
within six years of the date of grant, such options to vest one-third on each of
the first, second, and third anniversaries of the date of grant, provided,
however, that such options shall vest and become exercisable on the foregoing
dates only if Employee's employment with Employer, Action, or any other wholly
owned subsidiary of Action has not terminated prior to such dates. The exercise
price for such options shall equal the closing sales price of Action's Common
Stock on the Nasdaq National Market as of the date of this Agreement. Any
options granted
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pursuant to this Section 3(c) that have not vested prior to the termination of
Employee's employment with Employer will be forfeited immediately upon the
termination of employment for any reason.
(d) FRINGE BENEFITS. Employee shall be entitled to
participate in any group insurance, pension, retirement, vacation, expense
reimbursement or other plans, programs, or benefits approved by Employer's Board
of Directors and made available from time to time to employees of Employer with
similar responsibilities during the term of Employee's employment hereunder. The
foregoing shall not obligate Employer to adopt or maintain any particular plan,
program, or benefit.
(e) REIMBURSEMENT. Employer shall reimburse Employee
for all travel and entertainment expenses and other ordinary and necessary
business expenses incurred by Employee in connection with the business of
Employer and Employee's duties under this Agreement pursuant to Employer's
reimbursement policy, a copy of which is attached as Exhibit A hereto.
4. TERM OF EMPLOYMENT.
(a) EMPLOYMENT TERM. The term of this Agreement shall
be for a period of three years commencing as of the date hereof.
(b) TERMINATION UNDER CERTAIN CIRCUMSTANCES.
Notwithstanding anything to the contrary herein contained:
(i) DEATH. Employee's employment shall be automatically terminated, without
notice, effective upon the date of Employee's death.
(ii) DISABILITY. Employer may, at its option
and upon written notice to Employee, terminate Employee's employment as a result
of "Total and Permanent Disability" (as defined below) effective on the date of
that notice. For purposes of this Agreement, the term "Total and Permanent
Disability" shall mean such physical or mental condition of Employee that
renders Employee incapable of performing Employee's duties for a period of more
than 90 consecutive days or for 90 days within any 180-day period; provided,
however, that Employee shall not be terminated for Total and Permanent
Disability until a qualified and independent (i.e., having no prior affiliations
with Employer, or Employee, Action or any Action affiliate) medical specialist
provides written confirmation, after examination, that Employee is totally and
permanently incapacitated such that Employee can no longer perform Employee's
duties hereunder. In the event that Employee is a "qualified individual with a
disability," as defined in the Americans With Disabilities Act, Employer shall
not terminate Employee's employment hereunder if Employee is able to perform the
essential functions of Employee's job with reasonable accommodation from
Employer.
(iii) UNILATERAL DECISION OF EMPLOYER.
Employer may, at its option, upon written notice to Employee, terminate
Employee's employment effective on the date of that notice.
(iv) UNILATERAL DECISION BY EMPLOYEE.
Employee may, at his option and upon written notice to Employer, terminate
Employee's employment effective on the date of that notice.
(v) FOR "CAUSE". Employer may, at its option
and upon written notice to Employee, terminate Employee's employment for "Cause"
(as defined below) effective on the date of that notice. For purposes of this
Agreement, the term "Cause" shall mean (i) the failure or inability (other than
as a consequence of any illness, accident or other disability, as confirmed by
competent medical evidence) of Employee to perform Employee's duties hereunder
for a period in excess of 60 days in a manner reasonably satisfactory to
Employer's Board of Directors, provided the decision of the Board of Directors
is not arbitrary or capricious and is not made in bad faith; or (ii) "Serious
Misconduct" of Employee (as defined below). For purposes of this Agreement, the
term "Serious Misconduct" shall mean embezzlement or misappropriation of
corporate funds; acts of Dishonesty (as defined below); activities harmful to
the reputation of Employer (other than as a consequence of good faith decisions
made by Employee in the normal performance of Employee's duties hereunder); the
conviction of or the plea by Employee to any criminal felony offense (other than
those arising within the scope of Employee's employment hereunder, of which
offenses Employee was not personally aware or did not personally and knowingly
order in violation of the law, and other than a traffic or other offense that in
the sole discretion of the Board of Directors of
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Employer does not affect Employee's position as an Employee of Employer) or any
criminal felony offense involving dishonesty or moral turpitude; the refusal to
perform the duties assigned to Employee pursuant to this Agreement (unless such
duties shall be unlawful); or the breach of any of the terms or conditions
contained in this Agreement. For purposes of this Agreement, the term
"Dishonesty" shall mean the varnishing of any information, reports, documents or
certificates by Employee to Employer which Employee knew or reasonably should
have known to be false or misleading.
(c) RESULT OF TERMINATION. In the event of the
termination of Employee's employment pursuant to Sections 4(b)(i) or (ii) above,
Employee's estate or Employee, as the case may be, shall be entitled to receive
an amount equal to Employee's Base Salary as provided in Section 3(a) above for
a period of six months after such termination. In the event of the termination
of Employee's employment pursuant to Section 4(b)(iii) above, Employee shall
continue to receive Employee's Base Salary for the remainder of the term of this
Agreement. In the event of the termination of Employee pursuant to Section
4(b)(iv) or (v) above, Employee shall receive no further compensation under this
Agreement.
5. COMPETITION AND CONFIDENTIAL INFORMATION.
(a) INTERESTS TO BE PROTECTED. As used in this
Section 5, the term "Employer" shall include Employer, Action, and any of
Action's other wholly or partially owned subsidiaries as of the date of this
Agreement or formed or acquired after the date of this Agreement. The parties
acknowledge that Employee will perform essential services for Employer, its
employees, and its stockholders during the term of Employee's employment with
Employer. Employee will be exposed to, have access to, and work with, a
considerable amount of Confidential Information (as defined below). The parties
also expressly recognize and acknowledge that the personnel of Employer have
been trained by, and are valuable to, Employer and that Employer will incur
substantial recruiting and training expenses if Employer must hire new personnel
or retrain existing personnel to fill vacancies. The parties expressly recognize
that it could seriously impair the goodwill and diminish the value of Employer's
business should Employee compete with Employer in any manner whatsoever. The
parties acknowledge that this covenant has an extended duration; however, they
agree that this covenant is reasonable and it is necessary for the protection of
Employer, its stockholders, and employees. For these and other reasons, and the
fact that there are many other employment opportunities available to Employee if
he should terminate his employment, the parties are in full and complete
agreement that the following restrictive covenants are fair and reasonable and
are entered into freely, voluntarily, and knowingly. Furthermore, each party was
given the opportunity to consult with independent legal counsel before entering
into this Agreement.
(b) NON-COMPETITION. During the term of Employee's
employment with Employer and for the period ending two years after the
termination of Employee's employment with Employer, regardless of the reason
therefor, Employee shall not (whether directly or indirectly, as owner,
principal, agent, stockholder, director, officer, manager, employee, partner,
participant, or in any other capacity) engage or become financially interested
in any "Competitive Business" (as defined below) conducted within the Restricted
Territory (as defined below). As used herein, the term "Competitive Business"
shall mean any business relating to the design, creation, development,
implementation, maintenance, or distribution of, or consulting services related
to, Internet web-sites and related content relating to or associated with
motorsports or automobile racing. Because Employee's duties involve services
related to the "World Wide Web," as used herein the term "Restricted Territory"
shall mean the world.
(c) NON-SOLICITATION OF EMPLOYEES. During the term of
Employee's employment and for a period of two years after the termination of
Employee's employment with Employee, regardless of the reason therefor, Employee
shall not directly or indirectly, for himself, or on behalf of, or in
conjunction with, any other person, company, partnership, corporation, or
governmental entity, seek to hire or hire any of Employer's personnel or
employees for the purpose of having any such employee engage in services that
are the same as or similar or related to the services that such employee
provided for Employer.
(d) CONFIDENTIAL INFORMATION. Employee shall maintain
in strict secrecy all confidential or trade secret information relating to the
business of Employer (the "Confidential Information") obtained by Employee in
the course of Employee's employment, and Employee shall not, unless first
authorized in writing by Employer, disclose to, or use for Employee's benefit or
for the benefit of, any person, firm, or entity at any time either during or
subsequent to the term of Employee's employment, any Confidential Information,
except
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as required in the performance of Employee's duties on behalf of Employer. For
purposes hereof, Confidential Information shall include without limitation any
materials, trade secrets, knowledge, or information with respect to management,
operational, or investment policies and practices of Employer; any business
methods or forms; any names or addresses of customers or suppliers or data on
customers or suppliers; and any business policies or other information relating
to or dealing with the management, operational, or investment policies or
practices of Employer.
(e) RETURN OF BOOKS AND PAPERS. Upon the termination
of Employee's employment with Employer for any reason, Employee shall deliver
promptly to Employer all files, lists, books, records, manuals, memoranda,
drawings, and specifications; all cost, pricing, and other financial data; all
other written or printed materials that are the property of Employer (and any
copies of them); and all other materials that may contain Confidential
Information relating to the business of Employer, which Employee may then have
in Employee's possession, whether prepared by Employee or not.
(f) DISCLOSURE OF INFORMATION. Employee shall
disclose promptly to Employer, or its nominee, any and all ideas, designs,
processes, and improvements of any kind relating to the business of Employer,
whether patentable or not, conceived or made by Employee, either alone or
jointly with others, during working hours or otherwise, during the entire period
of Employee's employment with Employer or within six months thereafter.
(g) ASSIGNMENT. Employee hereby assigns to Employer
or its nominee, the entire right, title, and interest in and to all inventions,
discoveries, and improvements, whether patentable or not, that Employee may
conceive or make during Employee's employment with Employer, or within six
months thereafter, and which relate to the business of Employer.
(h) EQUITABLE RELIEF. In the event a violation of any
of the restrictions contained in this Section 5 is established, Employer shall
be entitled to preliminary and permanent injunctive relief as well as damages
and an equitable accounting of all earnings, profits, and other benefits arising
from such violation, which right shall be cumulative and in addition to any
other rights or remedies to which Employer may be entitled. In the event of a
violation of any provision of subsection (b), (c), (f), or (g) of this Section,
the period for which those provisions would remain in effect shall be extended
for a period of time equal to that period beginning when such violation
commenced and ending when the activities constituting such violation shall have
been finally terminated in good faith.
(i) RESTRICTIONS SEPARABLE. If the scope of any
provision of this Agreement (whether in this Section 5 or otherwise) is found by
a Court to be too broad to permit enforcement to its full extent, then such
provision shall be enforced to the maximum extent permitted by law. The parties
agree that the scope of any provision of this Agreement may be modified by a
judge in any proceeding to enforce this Agreement, so that such provision can be
enforced to the maximum extent permitted by law. Each and every restriction set
forth in this Section 5 is independent and severable from the others, and no
such restriction shall be rendered unenforceable by virtue of the fact that, for
any reason, any other or others of them may be unenforceable in whole or in
part.
6. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands, and
other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given, made, and received (i) if
personally delivered, on the date of delivery, (ii) if by facsimile
transmission, upon receipt, (iii) if mailed, three days after deposit in the
United States mail, registered or certified, return receipt requested, postage
prepaid, and addressed as provided below, or (iv) if by a courier delivery
service providing overnight or "next-day" delivery, on the next business day
after deposit with such service addressed as follows:
(1) If to Employer:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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with a copy given in the manner
prescribed above, to:
▇'▇▇▇▇▇▇, Cavanagh, Anderson,
▇▇▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(2) If to Employee:
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Either party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 6 for the giving of notice.
(b) INDULGENCES; WAIVERS. Neither any failure nor any
delay on the part of either party to exercise any right, remedy, power, or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power, or privilege preclude
any other or further exercise of the same or of any other right, remedy, power,
or privilege, nor shall any waiver of any right, remedy, power, or privilege
with respect to any occurrence be construed as a waiver of such right, remedy,
power, or privilege with respect to any other occurrence. No waiver shall be
binding unless executed in writing by the party making the waiver.
(c) CONTROLLING LAW. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement, shall be
governed by and construed in accordance with the laws of the state of Arizona,
notwithstanding any Arizona or other conflict-of-interest provisions to the
contrary.
(d) BINDING NATURE OF AGREEMENT. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors, and assigns, except that
no party may assign or transfer such party's rights or obligations under this
Agreement without the prior written consent of the other party.
(e) EXECUTION IN COUNTERPART. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of the parties reflected hereon as the
signatories.
(f) PROVISIONS SEPARABLE. The provisions of this
Agreement are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or unenforceable
in whole or in part.
(g) ENTIRE AGREEMENT. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements and conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(h) PARAGRAPH HEADINGS. The paragraph headings in
this Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
(i) NUMBER OF DAYS. In computing the number of days
for purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays, and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday, or holiday, then the final day shall be
deemed to be the next day that is not a Saturday, Sunday, or holiday.
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7. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto; provided that because the
obligations of Employee hereunder involve the performance of personal services,
such obligations shall not be delegated by Employee. For purposes of this
Agreement, successors and assigns of Employer shall be limited to any
individual, corporation, trust, partnership, or other entity that acquires a
majority of the stock or assets of Employer by sale, merger, consolidation,
liquidation, or other form of transfer. Employer 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 Employer to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Employer would be required to perform it if no such
succession had taken place. Without limiting the foregoing, unless the context
otherwise requires, the term "Employer" includes all subsidiaries of Employer.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
ACTION INTERACTIVE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: President
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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