EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of May 21st, 2007, is made, with effective date as
May 1, 2007 and entered into between MotorSports Emporium, Inc., a Nevada
corporation and its subsidiaries (the "COMPANY"), and Xxxxxxx Xxxxx, a resident
of Los Angeles, California USA (the "EXECUTIVE"). The Company and the Executive
agree as follows:
ARTICLE 1
EMPLOYMENT, DUTIES AND ACCEPTANCE
1.1 Employment by the Company. The Company agrees to employ the Executive
as the Chief Executive officer of Motorsports Emporium Inc. for the duration of
the Employment Term (as defined in SECTION 2 below), to render such services and
to perform such duties as are normally associated with and inherent in the
executive capacity in which the Executive will be serving, as well as such other
duties, which are not inconsistent with the Executive's position as an executive
of the Company.
1.2 Acceptance of Employment by the Executive. The Executive accepts such
employment for the Employment Term and agrees to render the services required of
him under SECTION 1.1. During the Employment Term, the Executive shall devote
his full business time, attention and energy to the business of the Company and
the performance of his duties under this Agreement. The foregoing shall not,
however, prohibit the Executive from making and managing personal investments,
or from engaging in civic or charitable activities that do not materially impair
the performance of his duties under this Agreement. If appointed or elected, as
applicable, the Executive also shall serve during all or any part of the
Employment Term as any other officer and/or as a director of the Company or any
of its subsidiaries or affiliates, without any additional compensation other
than that specified in this Agreement.
1.3 Place of Performance. The Executive shall be based in the State of CA
and nothing in this Agreement shall require the Executive to relocate his base
of employment or principal place of residence from the State of CA
1.4 Termination of Existing Contracts. The Executive agrees that all other
agreements and contracts, whether written or oral, relating to the employment of
the Executive by the Company shall be terminated effective as of the
commencement of the Employment Term.
ARTICLE 2
EMPLOYMENT TERM
2.1 Initial Term. The term of the Executive's employment under this
Agreement (the "EMPLOYMENT Term") shall commence on the date hereof by, and
shall continue through and expire on April 30th, 2010 (the "EXPIRATION DATE"),
unless earlier terminated as provided in this Agreement.
ARTICLE 3
COMPENSATION AND OTHER BENEFITS
3.1 Annual Salary. As compensation for services to be rendered under this
Agreement, the Company shall pay the Executive a starting salary (the "ANNUAL
SALARY" payable on monthly basis, on or before the third day of each calendar
month) at a rate of $150,000 per annum for the remaining portion for the year of
2007; $180,000 per annum for the year 2008; and $210,000 per annum for the year
of 2009 and $240,000 per annum for the remaining term of this agreement. The
Executive shall also be entitled to receive an annual incentive bonus (a) in the
amount of not less than 1.8% of the total collected sales amount made from the
operation of the Company during this agreement (payable within thirty (30) days
after the end of each fiscal year) and will receive the same percentage of
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amount for two years continuously after termination of this Agreement, and (b)
other incentive bonus in an amount as deemed appropriate by the Compensation
Committee of the Company, subject to review every 6 months.
Other Compensations are offered to the Executive upon signing of this
Agreement, including:
(A) Preferred Stock: Two Hundred Thousand (200,000.) shares of the
company's Preferred C Stock, which is currently issued and outstanding
to the Executive, and is convertible to the Company's Common Stock
according to the following terms:
1. Eligible for conversion to Company Common Stock on April 30,
2009, unless Mandatory Conversion is required for any reason as
set forth herein below.
2. Each share of Preferred C Stock will convert to $5.00 worth of
the Company common stock, which will be determined by taking the
average closing bid price (ACBP) for the common stock for the 20
days prior to conversion. For example, if the ACBP is $0.10,
Executive will receive 50 shares of common stock for each share
of Preferred C Stock. If the ACBP is $1.00, Executive will
receive five share of common stock for each share of Preferred C
Stock.
3. Mandatory Conversion. The Preferred C stock will convert to
Common stock any time sooner than April 30, 2009 upon a Funding
Event. The Funding Event shall be defined as any financing for
the Company of $1.5 million or more that requires the Company's
Preferred Shares to be converted to common.
(B) Stock Option Participation. The Executive shall receive stock options
to acquire company stock according to the terms of the Company's
Option Plan.
3.2 Automobile Allowance. The Executive will also be provided with a
monthly car allowance.
3.3 Participation in Employee Benefit Plans. The Executive shall be
permitted, during the Employment Term, if and to the extent he meets and
continues to meet all applicable eligibility requirements, to participate in any
group life, hospitalization or disability insurance plan, health program,
pension plan, similar benefit plan or other "fringe benefits" of the Company.
3.4 Executive Support. The Company shall provide to the Executive office
facilities, furniture and equipment, secretarial and support personnel and other
management level support services as the Executive shall reasonably require in
connection with the performance of his duties under this Agreement.
3.5 Reimbursement of Business Expenses. The Executive may incur reasonable,
ordinary and necessary business expenses in the course of the performance of his
duties under this Agreement, including expenses for travel, food and
entertainment. The Company shall reimburse the Executive for all such business
expenses if (a) the expenses are incurred by the Executive in accordance with
the Company's business expense reimbursement policy, if any, as may be
established and modified by the Company from time to time, and (b) the Executive
provides to the Company a record of and appropriate receipts for (i) the amount
of the expense, (ii) the date, place and nature of the expense, (iii) the
business reason for the expense and (iv) the names, occupations and other data
concerning individuals entertained sufficient to establish their business
relationship to the Company.
ARTILE 4
TERMINATION
4.1 Termination upon Death. If the Executive dies during the Employment
Term, this Agreement shall terminate, except that the Executive's legal
representatives, successors, heirs or assigns shall be entitled to receive the
Annual Salary, the Additional Compensation and other accrued benefits, if any,
earned up to the date of the Executive's death; PROVIDED THAT, if any Additional
Compensation or other benefits are governed by the provisions of any written
employee benefit plan or policy of the Company, any written agreement
contemplated there under or any other separate written agreement entered into
between the Executive and the Company, the terms and conditions of such plan,
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policy or agreement shall control in the event of any discrepancy or conflict
with the provisions of this Agreement regarding such Additional Compensation or
other benefit upon the death, termination or disability of the Executive.
4.2 Termination for Cause. At any time during the Employment Term, the
Company shall have the right, exercisable by serving notice effective in
accordance with its terms, to terminate the Executive's employment under this
Agreement and discharge the Executive for Cause. If such right is exercised, the
Company's obligation to the Executive shall be limited to the payment of any
unpaid Annual Salary, Additional Compensation and other benefits, if any,
accrued up to the effective date specified in the Company's notice of
termination (which date shall not be retroactive). As used in this SECTION 4.2
and elsewhere in this Agreement, the term "CAUSE" shall mean that a majority of
the Board shall have determined that (a) the Executive has willfully and
persistently failed or refused to follow the reasonable policies and directives
established by the Board and such failure or refusal continues for ten (10) days
after notice from the Company, (b) the Executive has wrongfully misappropriated
money or other assets or properties of the Company or any subsidiary or
affiliate of the Company, (c) the Executive has been convicted of any felony or
other serious crime, or (d) the Executive's employment performance has been
substantially impaired by chronic alcoholism or drug addiction.
4.3 Termination upon Disability. If during the Employment Term the
Executive becomes physically or mentally disabled, whether totally or partially,
as evidenced by the written statement of a competent physician licensed to
practice medicine in the United States, so that the Executive is unable to
substantially perform his services hereunder for a period of six consecutive
months, the Company may at any time after the last day of the six consecutive
months of disability, by written notice to the Executive, terminate the
Executive's employment hereunder. If such right is exercised, the Company shall
continue to pay to the Executive at each pay period the amount of Annual Salary
in effect at the date of termination of his employment for the remainder of the
Employment Term.
4.4 Voluntary Termination. At any time before the Employment Term expires,
the Executive shall have the right, exercisable by serving notice effective in
accordance with its terms, to resign and terminate the Executive's employment
under this Agreement. If such right is exercised, the Company's obligation to
the Executive shall be limited to the payment of any unpaid Annual Salary, if
any, accrued up to the effective date specified in the Executive's letter of
resignation (which date shall not be retroactive). Any Additional Compensation
earned by the Executive shall be payable under the terms of the Company's
benefit plans or restricted share agreement pursuant to which such Additional
Compensation was issued.
4.5 Termination of this Agreement by the Company. At anytime before the
Employment Agreement expired, the Company shall have the option to buy out this
Agreement, to terminate the Executive's employment with this Agreement. If such
right of option is exercised, the Company is responsible to make the full
payment of the unpaid total amount from the effective date of termination to the
"EXPIRATION DATE" specified in this Agreement.
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OTHER PROVISIONS
4.6 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, five days after the date of deposit in the United States mail, as
follows:
If to the Company, to: The Board of Directors
Motorsports Emporium, Inc.
0000 X. Xxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxxxx, XX 00000
Represented By: Mr. Xxxxx Xxxx/Director
If to the Executive, to: Xx. Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxx Xxxxx,
Xxxxxxx Xxx, XX 00000
Either party may change its address for notice hereunder by notice to the
other party.
4.7 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties with respect to its subject matter and
supersedes all prior agreements, written or oral, with respect thereto; PROVIDED
THAT nothing herein shall in any way limit the obligation, rights or liabilities
of the parties under any written stock option agreement separately entered into
by the parties.
4.8 Waivers and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.
4.9 Governing Law; Venue. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without
reference to principles governing choice or conflicts of law.
4.10 Assignment. This Agreement, and any rights and obligations hereunder,
may not be assigned by any party hereto without the prior written consent of the
other party, except that the Company may assign this Agreement to any of its
subsidiaries or affiliates without the Executive's consent provided such
assignment does not diminish any of the Executive's benefits or rights, or
increase in any material respect any of the Executive's obligations, hereunder.
4.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.12 Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
Motorsports Emporium Inc.
A Nevada corporation
By: /s/ Xxxxx Xxxx
-----------------------------
Name: Xxxxx Xxxx
Title: Director
Date: May 31, 2007
EXECUTIVE:
/s/ Xxxxxxx Xxxxx
--------------------------------
Xxxxxxx Xxxxx
Date: May 31, 2007
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