1
EXHIBIT 10.1.13
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT effective October 2, 1997 (the
"Agreement") by and between WHEELS SPORTS GROUP, INC. (the "Company") with
principal offices located at 1368 Salisbury Road, Mocksville, North Carolina
27028 and ROBERT BOVE (the "Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company hereby employs the Executive in the
position described on Schedule 1 hereto as an executive officer of the Company.
The Executive accepts such employment and agrees to perform the duties and
responsibilities assigned to him pursuant to this Agreement.
2. Position and Responsibilities. The Executive shall hold the
position with the Company which is specified on Schedule 1, which is attached
hereto and incorporated herein by reference. The Executive shall exert his
best efforts and devote full time and attention to the affairs of the Company.
The Executive shall perform the duties set forth on Schedule 1 while employed
as an executive officer, and such further duties (consistent with the
Executive's position as an officer of the Company and his other duties and
responsibilities) as may be determined and assigned to him from time-to-time by
the Chief Executive Officer or the Board of Directors of the Company, and shall
have full authority and responsibility with respect thereto, subject to the
general direction, approval and control of the Board of Directors and to the
restrictions, limitations and guidelines set forth by the Board of Directors in
resolutions adopted in the minutes of the Board of Directors meetings, copies
of which will be provided to the Executive from time to time and will be
incorporated herein by reference.
3. Board of Directors. The Executive shall at all times discharge
his duties in consultation with and under the supervision of the Board of
Directors of the Corporation. The Executive shall make his principal office at
the corporate headquarters of the Company in Mocksville, North Carolina, or at
such other place or places as the Executive may designate with the Company's
approval, which shall not be unreasonably withheld.
4. Term of Employment. The term of the Executive's employment under
this Agreement shall be deemed to have commenced on __________________, 1997
and shall continue for a three-year period until ___________________, 2000,
subject to extension as hereinafter provided or termination pursuant to the
provisions set forth hereafter. Provided that Executive is in compliance with
all of his obligations
2
hereunder, the term of Executive's employment shall be automatically extended
for an additional one-year term upon expiration of the initial three-year term
or any renewal term, as the case may be, unless either party hereto receives 90
days' prior written notice from the other electing not to extend the
Executive's employment.
5. Compensation. Commencing on the effective date of this Agreement,
the Company shall pay to the Executive as compensation for his services a base
salary of not less than the amount specified on Schedule 1, payable semi-
monthly, or such higher salary as may be from time to time approved by the
Board of Directors. Upon the parties' execution of this Agreement, the
Executive shall be entitled to receive options granted under the Company's 1996
Omnibus Stock Option Plan in accordance with the terms of Schedule 1 hereto.
The Executive shall receive such additional compensation and/or bonuses or
stock options as may be voted to him at the sole discretion of the Compensation
Committee of the Board of Directors.
6. Expense Reimbursement. The Company will reimburse the Executive,
at least monthly, for all reasonable and necessary expenses incurred by him in
carrying out his duties under this Agreement. The Executive shall present to
the Treasurer each month an account of such expenses in such form as is
reasonably required by the Board of Directors. Such expenses shall include
attorneys' fees and disbursements of Executive in connection with any legal
proceedings (including, but not limited to, arbitration), whether or not
instituted by the Company or Executive, relating to the interpretation or
enforcement of any provision of this Agreement; provided, however, that in the
case of any such proceeding to which the Company and the Executive are adverse
parties, the losing party shall reimburse the prevailing party for all costs
and expenses, including attorneys' fees and disbursements, incurred by the
prevailing party in defense or prosecution of any such proceeding. Prior to
advancing costs and expenses to Executive, the Board of Directors shall have
the right to obtain an agreement, and to require acceptable security therefor,
from Executive requiring him to repay Company for the same should it be
determined that Executive is not entitled to payment of such costs and
expenses.
In addition, the Company shall reimburse the Executive for all reasonable
relocation expenses incurred in relocating the Executive and his family from
California to North Carolina upon the presentation of an itemized account of
such expenses. A list of expenses eligible for reimbursement is set forth on
Schedule 1.
2
3
7. Medical and Dental Coverage. The Executive, his wife, and those
children who qualify will be entitled to participate in the Company's employee
group medical and other group insurance programs on the same basis as other
executives of the Company.
8. Medical Examination. The Executive agrees to submit himself for
physical examination on one occasion per year as requested by the Company for
the purpose of the Company's obtaining life insurance on the life of the
Executive for the benefit of the Company; provided, however, that the Company
shall bear the entire cost of such examinations and shall pay all premiums on
any key man life insurance obtained for the benefit of the Company as
beneficiary or with respect to any other designated beneficiary.
9. Automobile or Automobile Allowance. The Company will provide the
Executive with an automobile or with a monthly automobile allowance in the
amount of $500 for the duration of his employment with the Company under this
Agreement.
10. Vacation Time. The Executive shall be entitled to take three (3)
weeks paid vacation per calendar year. Such vacation may not be taken in any
greater than consecutive two (2) week increments. Vacation not used by the
Executive during the calendar year will be carried forward up to a maximum of
eight (8) weeks accrual going forward.
11. Benefits Payable on Disability. If the Executive becomes disabled
from properly performing services hereunder by reason of illness or other
physical or mental incapacity, the Company shall continue to pay the Executive
his then current salary hereunder for the first twelve (12) months of such
continuous disability commencing with the first date of such disability.
In the event the Company purchases Disability Insurance covering any of
its executive officers, and if the Executive qualifies for such coverage, then
during the term of this Agreement the Company shall purchase and maintain a
policy of Disability Insurance which, after twelve (12) continuous months of
disability, will pay up to $7,000 per month of the Executive's salary until
Executive reaches the age of 65. The Company has no obligation to supplement
or augment disability payments made under any such disability policy or plan or
make any other payment in connection with such disability.
If the Company is unable to obtain a policy of Disability Insurance, the
Company shall pay up to $5,000 per month to the Executive for a twelve (12)
month period from the twelfth to the twenty-fourth month from the first date of
such disability.
3
4
12. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the term of his employment
under this Agreement, he will engage in no other business activities
directly or indirectly, which are competitive with or which might place
him in a competing position to that of the Company, or any affiliated
company.
(b) The Executive realizes that during the course of his
employment, Executive will have produced and/or have access to
confidential business plans, information, business opportunity records,
notebooks, data, formula, specifications, trade secrets, customer lists,
account lists and secret inventions and processes of the Company and its
affiliated companies. Therefore, during or subsequent to his employment
by the Company, or by an affiliated company, the Executive agrees to hold
in confidence and not to directly or indirectly disclose or use or copy
or make lists of any such information, except to the extent authorized by
the Company in writing. All records, files, business plans, documents,
equipment and the like, or copies thereof, relating to Company's
business, or the business of an affiliated company, which Executive shall
prepare, or use, or come into contact with, shall remain the sole
property of the Company, or of an affiliated company, and shall not be
removed from the Company's or the affiliated company's premises without
its written consent, and shall be promptly returned to the Company upon
termination of employment with the Company and its affiliated companies.
The restrictions and obligations of Executive set forth in this Section
12(b) shall not apply to (i) information that is or becomes generally
available and known to the sports trading card industry or the fantasy
game industry (other than as a result of a disclosure directly or
indirectly by Executive in violation of this Agreement); (ii) information
that was known to Executive prior to Executive's employment by the
Company or its predecessor; or (iii) information that is obtained by the
Executive from a third party who was not bound by a contractual, legal or
fiduciary duty of confidentiality to the Company or to any other party
with respect to such information.
(c) Because of his employment by the Company, Executive will
have access to trade secrets and confidential information about the
Company, its business plans, its business accounts, its business
opportunities, its expansion plans into other geographical areas and its
methods of doing business. Executive agrees that for a period of one (1)
year after termination or expiration of his employment (except if
termination is as a result of termination by Executive with cause under
Section 16), he will not, directly or indirectly, compete with the
Company in the business of designing, marketing and/or distributing
NASCAR merchandise, collectible NASCAR-related sports trading cards and
related products within the United States.
4
5
(d) In the event a court of competent jurisdiction finds any
provision of this Section 12 to be so overbroad as to be unenforceable,
then such provision shall be reduced in scope by the court, but only to
the extent deemed necessary by the court to render the provision
reasonable and enforceable, it being the Executive's intention to provide
the Company with the broadest protection possible against harmful
competition.
13. Termination for Cause by the Company. During the term of this
Agreement there can be no termination of the Executive by the Company except
for "Termination for Cause" as outlined below:
(a) Notwithstanding anything herein to the contrary the Company
may, without liability, terminate the Executive's employment hereunder
for cause at any time upon written notice from the Board of Directors
specifying such cause, and thereafter the Company's obligations hereunder
shall cease and terminate; provided, however, that the Company shall pay
the Executive two (2) weeks pay and that such written notice shall not be
delivered until after the Board of Directors shall have given the
Executive written notice specifying the conduct alleged to have
constituted such cause and the Executive has failed to cure such conduct,
if curable, within fifteen (15) days following receipt of such notice.
(b) "Termination for Cause" consists of one or more of the
following:
i) A willful breach of duty by the Executive during the
course of his employment; and
ii) Disloyal, dishonest or illegal conduct of the
Executive in the performance of his duties under this Agreement.
14. Termination by the Executive without Cause. The Executive,
without cause, may terminate this Agreement upon 90 days' prior written notice
to the Company. In such event, the Executive shall be required to render the
services required under this Agreement during such 90-day period unless
otherwise directed by the Board of Directors. Compensation for vacation time
not taken by Executive shall be paid to the Executive at the date of
termination.
15. Termination by the Executive with Cause. The Executive may
terminate his employment with the Company at any time, upon 30-days' prior
written notice and opportunity for the Company to remedy any non-compliance, by
reason of (i) the Company's material failure to perform its duties pursuant to
this Agreement, (ii) any material diminishment in the duties and
responsibilities, working facilities, or compensation provided for under this
Agreement, or (iii) Executive's location of employment is moved
5
6
more than 50 miles from where it is on the date of this Agreement; provided
that such termination takes place within 90 days after receipt by Executive of
written notice of such relocation. Executive shall be entitled to all base
salary and benefits specified herein for the remaining term of this Agreement.
16. Termination upon Death of Executive. In addition to any other
provision relating to termination, this Agreement shall terminate upon the
Executive's death. In such event, the Company shall reimburse all outstanding
expenses and pay a severance allowance equal to six months' salary to the
Executive's estate.
17. Lump Sum Compensation. In the event of the occurrence of a
"Triggering Event" which shall be defined to include a non-negotiated (i)
change in ownership of 50% or more of the outstanding shares of the Company
subsequent to the Company's initial public offering, or (ii) merger,
consolidation, reorganization or liquidation of the Company, the Executive
shall receive lump sum compensation equal to 1.0 times his annual salary and
incentive or bonus payments, if any, as shall have been paid to the Executive
during the Company's most recent 12-month period within 30 days of the
Triggering Event. If the total amount of the change of control compensation
were to exceed three (3) times the Executive's base amount (the average annual
taxable compensation of the Executive for the five (5) years preceding the year
in which the change of control occurs), the Company and the Executive may agree
to reduce the lump sum compensation to be received by Executive in order to
avoid the imposition of the golden parachute tax as provided in the Tax Reform
Act of 1984, as amended by the Tax Reform Act of 1986.
In the event the Executive is required to hire counsel to negotiate on
his behalf in connection with his termination or resignation from the Company
upon the occurrence of a Triggering Event, or in order to enforce the
obligations of the Company as provided in this Paragraph, the Company shall
reimburse to the Executive all reasonable attorneys' fees and disbursements
which may be expended by the Executive in seeking to enforce the terms hereof.
Such reimbursement shall be paid every 30 days after the Executive provides
copies of invoices from the Executive's counsel to the Company. However, such
invoices may be redacted to preserve the attorney-client privilege, client
confidentiality or work product.
18. Arbitration. Any controversy, dispute or claim arising out of, or
relating to, this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Charlotte, North
Carolina in accordance with the Rules of the American Arbitration Association
then existing. This Agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law of the State of North Carolina. The award
rendered by the arbitrators shall be final and judgment may
6
7
be entered upon the award in any court of the State of North Carolina having
jurisdiction of the matter.
19. General Provisions.
(a) The Executive's rights and obligations under this Agreement
shall not be transferrable by assignment or otherwise, nor shall
Executive's rights be subject to encumbrance or to the claims of the
Company's creditors. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of
its property or assets.
(b) This Agreement constitutes the entire Agreement between the
parties hereto in respect of the employment of the Executive by the
Company and supersedes any and all other agreements either oral or in
writing between the parties hereto with respect to the employment of the
Executive.
(c) Executive shall have no duty to mitigate the payment due him
from Company pursuant to this Agreement and any money earned by Executive
from other sources after his employment with the Company terminates shall
not reduce the amount owed him by the Company pursuant to this Agreement.
(d) The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part thereof are declared
invalid or unenforceable by a court of competent jurisdiction or in an
arbitration proceeding, the validity and enforceability of the remainder
of such provisions or parts thereof and the applicability thereof shall
not be affected thereby.
(e) This Agreement may not be amended or modified except by a
written instrument executed by Company and Executive.
(f) This Agreement and the rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the
State of North Carolina.
(g) Any notice required or permitted by this Agreement shall be
in writing and shall be sufficient if sent by registered mail, return
receipt requested, to the last known address of the party to whom such
notice is to be given. Any notice may be waived in writing by the party
entitled to receive it.
(h) This Agreement shall be binding upon and shall inure to the
benefit of and be enforceable by the parties hereto and their respective
heirs, representatives, successors and permitted assigns.
20. Construction. Throughout this Agreement the singular shall
include the plural, and the plural shall include the singular, and the
masculine and neuter shall include the feminine, wherever the context so
requires.
7
8
21. Text to Control. The headings of paragraphs and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
22. Authority. The officer executing this agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company.
23. Effective Date. This Agreement may be executed on the dates noted
below but shall only be effective on October 2, 1997.
FOR THE COMPANY: WHEELS SPORTS GROUP, INC.
DATED: October 3, 1997 By: /s/ Howard L. Correll, Jr.
-------------------------------------
Title: Chief Executive Officer
----------------------------------
FOR THE EXECUTIVE:
DATED: October 3, 1997 By: /s/ Robert Bove
-------------------------------------
Robert Bove
8
9
WHEELS SPORTS GROUP, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
SCHEDULE 1
DUTIES AND COMPENSATION
Executive: Robert Bove
Position: __________________________________
Base Salary: $144,000 per year, payable bi-weekly
Bonus: As determined by the Board of Directors and in accordance
with Company-wide bonus plan.
Term: _________________, 2000, subject to automatic one (1)
year extensions.
Options: Upon execution of this Agreement, the Executive shall be
entitled to receive options granted under the Company's
1996 Omnibus Stock Option Plan to purchase 10,000 shares
of Common Stock at an exercise price of fair market value
on October 2, 1997.
Duties and
Responsibilities: Responsible for sales and marketing for the Company's
trading card and collectibles operations.
Eligible
Reimbursement
Expenses: Such relocation expenses shall include, without
limitation, all moving, shipping, storage, handling and
transportation costs and expenses incurred by Executive
in moving the personal possessions of Executive and his
family from California to North Carolina, and all costs
and expenses (calculated on an after-tax basis),
including real estate agent or broker fees and
commissions and other closing costs and expenses incurred
or associated with the sale of Executive's personal
residence in California and the purchase of Executive's
personal residence in North Carolina. Executive and his
spouse shall be entitled to make two trips from
California to North Carolina for the purpose of obtaining
housing. The Company shall pay all costs and expenses
incurred by the Executive and his spouse in making such
trips, including air fare, ground transportation, lodging
and food. In the event the Executive and his spouse are
unable to purchase a personal residence in North
Carolina, the Company shall pay all rental charges,
including all utility expenses, incurred by Executive and
his family for the lease of a personal residence in North
Carolina for a period of up to two months. In the event
the Executive is unable to sell his personal residence in
California, beginning on a date mutually agreed upon by
Executive and the Company for
9
10
Executive to relocate to North Carolina and until such
personal residence is sold, the Company shall, at its
option, (i) make all payments of principal and interest
on all notes or other evidences of indebtedness relating
thereto and shall pay all property and other taxes and
assessments relating thereto or (ii) purchase the
Executive's personal residence for a sale price which is
equal to the sum of the price Executive paid therefor and
the cost of any documented improvements thereto
(collectively, the "Purchase Price"). In the event
Executive's personal residence in California is sold by
Executive for a sale price (the "Sale Price") which is
less than the Purchase Price, Company shall pay to the
Executive an amount in cash equal to the difference
between the Purchase Price and the Sale Price.
APPROVED:
THE COMPANY: EXECUTIVE:
By: /s/ Howard L. Correll /s/ Robert Bove
----------------------------------------- ------------------------------
Howard L. Correll, Jr., Chief Executive Robert Bove
Officer
Date: October 3, 1997 Date: October 3, 1997
10