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CONSULTING AGREEMENT
DATED AS OF JANUARY 1, 1997
BETWEEN
ACTION PERFORMANCE COMPANIES, INC.
AND
JOHN BICKFORD
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TABLE OF CONTENTS
Page
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1. Engagement.......................................................... 1
(a) The Engagement............................................. 1
(b) Duties of Consultant....................................... 1
2. Extent of Duties.................................................... 1
3. Compensation........................................................ 1
(a) Fixed Compensation......................................... 1
(b) Reimbursement.............................................. 1
4. Term of Engagement.................................................. 1
(a) Engagement Term............................................ 1
(b) Termination Under Certain Circumstances.................... 1
5. Competition and Confidential Information............................ 2
(a) Interests to be Protected.................................. 2
(b) Non-Competition............................................ 2
(c) Non-Solicitation of Employees.............................. 3
(d) Confidential Information................................... 3
(e) Return of Books and Papers................................. 3
(f) Equitable Relief........................................... 3
(g) Restrictions Separable..................................... 3
6. Miscellaneous....................................................... 3
(a) Notices.................................................... 3
(b) Indulgences................................................ 4
(c) Controlling Law............................................ 4
(d) Binding Nature of Agreement................................ 4
(e) Execution in Counterparts.................................. 5
(f) Provisions Separable....................................... 5
(g) Entire Agreement........................................... 5
(h) Paragraph Headings......................................... 5
7. Successors And Assigns.............................................. 5
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CONSULTING AGREEMENT
AGREEMENT made as of the 1st day of January, 1997, by and between
ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation (hereinafter called
"Company") and JOHN BICKFORD (hereinafter called "Consultant").
W I T N E S S E T H:
Company desires to engage Consultant and Consultant desires to accept
such engagement, all on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth in this Agreement, the parties hereto agree as follows:
1. Engagement.
(a) The Engagement. Company hereby engages Consultant and
Consultant hereby accepts such engagement as an independent contractor to
perform the duties set forth in this Agreement.
(b) Duties of Consultant. During Consultant's engagement by
Company pursuant to this Agreement, Consultant shall render such advice and
recommendations to Company as Company may reasonably request with respect to
representing Company in the motorsports community, creating new marketing and
promotional campaigns, and advising Company with respect to the motorsports
industry.
2. Extent of Duties. Consultant shall devote such of Consultant's
business time, attention and efforts as are reasonably necessary to the
performance of Consultant's duties under this Agreement, shall perform such
duties faithfully and diligently, and shall not engage in same or similar
activities for himself or any other person, firm, or entity while engaged by
Company.
3. Compensation.
(a) Fixed Compensation. Company shall pay to Consultant as
full compensation for the duties performed by Consultant during Consultant's
engagement under this Agreement, a fee at a rate of $100,000 per annum to be
paid in equal monthly installments, or in such other periodic installments upon
which Company and Consultant shall mutually agree.
(b) Reimbursement. Company shall reimburse Consultant for all
travel and entertainment expenses and other ordinary and necessary business
expenses incurred by Consultant in connection with the business of Company and
Consultant's duties under this Agreement; provided, however, that Consultant
shall not incur such expenses in an amount in excess of $1,000 during any month
without written authorization from Company. The term "business expenses" shall
not include any item not deductible by Company for federal income tax purposes.
To obtain reimbursement, Consultant shall submit to Company receipts, bills or
sales slips for the expenses incurred. Reimbursements shall be made by Company
monthly within 30 days of presentation by Consultant of evidence of the expenses
incurred.
4. Term of Engagement.
(a) Engagement Term. The term of Consultant's engagement
hereunder shall commence on January 1, 1997 and shall continue until December
31, 2000, and from year to year thereafter, unless and until terminated by
either party giving written notice to the other not less than 60 days prior to
the end of the then current term.
(b) Termination Under Certain Circumstances. Notwithstanding
anything to the contrary herein contained:
(i) Consultant's engagement shall be automatically
terminated, without notice, effective upon the date of Consultant's death;
(ii) If Consultant shall fail, for a period of more
than 30 consecutive days, or for 30 days within any 60 day period, to perform
any of Consultant's duties under this Agreement as the result of illness or
other incapacity, Company, at its option, upon notice to Consultant, may
terminate Consultant's engagement effective on the date of that notice;
(iii) If Consultant shall breach or violate any of
the provisions of this Agreement, or fail to perform in a manner reasonably
satisfactory to Company any of the duties required of Consultant and such
breach, violation or failure shall continue for a period of 30 days after
Company shall have given Consultant written notice specifying the nature thereof
in reasonable detail, Company, at its option, upon notice to Consultant, may
terminate Consultant's engagement effective on the date of that notice.
5. Competition and Confidential Information.
(a) Interests to be Protected. The parties acknowledge that
Consultant will perform essential services for Company, its employees, and its
shareholders during the term of Consultant's engagement with Company. Consultant
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 Company have been trained by,
and are valuable to, Company and that Company will incur substantial recruiting
and training expenses if Company 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 Company's business
should Consultant compete with Company 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
Company, its stockholders, and employees. For these and other reasons, and the
fact that there are many other engagement opportunities available to Consultant
if he should terminate his engagement, 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 later of (i) 12 months of the
date of this Agreement or (ii) the term of Consultant's engagement with Company
and for the period ending six months after the termination of Consultant's
engagement with Company (voluntarily by Company or with cause by Consultant),
Consultant 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 conducted within the Restricted Territory (as defined
below) or otherwise circumvent any license agreement of Company relating to the
business of Company. As used herein, the term "competitive business" shall mean
(i) the design and manufacture of collectible die-cast and pewter miniature
replicas of motorsports vehicles and the design and manufacture of licensed
apparel, souvenirs, and other motorsports consumer items, including t-shirts,
hats, jackets, mugs, key chains, and drink bottles, in each case to be
distributed and sold through collector and fan clubs, wholesale distribution,
authorized retail dealers, trackside events, and promotional programs for
corporate sponsors; (ii) the development of marketing and product promotional
programs for corporate sponsors of motorsports, featuring Company's die-cast
replicas or other products as premium awards, intended to increase brand
awareness of the products or services of the corporate sponsors; and (iii) the
design, manufacture, and sale of motorsports- related products (consisting of
die cast miniature replicas of motorsports vehicles and motorsports-related
apparel and souvenirs) specifically designed for the mass-merchandise market;
and the term "Restricted Territory" shall mean any state in which Company or its
subsidiaries sells products or provides services during Consultant's engagement
hereunder. Company acknowledges that Consultant's ownership or operation of
Chase Raceway, L.L.C., Racing for Kids, L.L.C., Motorsports by Mail, Inc., Race
World, L.L.C., American Motorsports Marketing, Inc., and any other company
authorized in writing by Company, as such enterprises currently are conducted,
shall not be deemed "competitive businesses."
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(c) Non-Solicitation of Employees. During the term of
Consultant's engagement and for a period of 12 months after the termination of
Consultant's engagement with Company, regardless of the reason therefor,
Consultant 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 Company's or its subsidiaries'
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 Company or its subsidiaries.
(d) Confidential Information. Consultant shall maintain in
strict secrecy all confidential or trade secret information, whether patentable
or not, relating to the business of Company and its subsidiaries (the
"Confidential Information") obtained by Consultant in the course of Consultant's
engagement, and Consultant shall not, unless first authorized in writing by
Company, disclose to, or use for Consultant's benefit or for the benefit of any
person, firm, or entity at any time either during or subsequent to the term of
Consultant's engagement, any Confidential Information, except as required in the
performance of Consultant's duties on behalf of Company and its subsidiaries.
For purposes hereof, Confidential Information shall include without limitation
any engineering drawings, or other reproductions or materials of any kind; any
trade secrets, knowledge or information with respect to processes, inventions,
formulae, machinery, manufacturing techniques and know-how and to the
management, operational, marketing, licensing, and distribution policies and
practices of Employer and its subsidiaries; any business methods or forms; any
names or addresses of customers or data on customers or suppliers; and any
business policies or other information relating to or dealing with the
purchasing, production, sales, or distribution policies or practices of Company
or its subsidiaries or relating to or dealing with the management, operational,
or investment policies or practices of Company or its subsidiaries.
(e) Return of Books and Papers. Upon the termination of
Consultant's engagement with Company for any reason, Consultant shall deliver
promptly to Company all samples or demonstration models, catalogues, files,
lists, books, records, manuals, memoranda, drawings, and specifications; all
cost, pricing, and other financial data; all customer, licensee, and supplier
information; all other written or printed materials that are the property of
Company or its subsidiaries (and any copies of them); and all other materials
that may contain Confidential Information relating to the business of Company or
its subsidiaries, which Consultant may then have in his possession, whether
prepared by Consultant or not.
(f) Equitable Relief. In the event a violation of any of the
restrictions contained in this Section is established, Company 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 Company may be entitled. In the event of a violation
of any provision of subsections (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.
(g) 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
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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 Company:
2401 West First Street
Tempe, Arizona 85281
Attention: Fred W. Wagenhals
Phone: (602) 517-3710
Fax: (602) 967-1403
with a copy given in the manner
prescribed above, to:
O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears, P.A.
One East Camelback Road
Phoenix, Arizona 85012
Attention: Robert S. Kant, Esq.
Phone: (602) 263-2606
Fax: (602) 263-2900
(2) If to Consultant:
1094 Berkley Place
Concord, North Carolina 28027
with a copy given in the manner
prescribed above, to:
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246-1900
Attention: Stokley G. Caldwell, Jr., Esq.
Phone: (704) 377-8332
Fax: (704) 378-4000
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
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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 Counterparts. 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.
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 Consultant hereunder involve the performance of
personal services, such obligations shall not be delegated by Consultant. For
purposes of this Agreement successors and assigns shall include, but not be
limited to, any individual, corporation, trust, partnership, or other entity
that acquires a majority of the stock or assets of Company by sale, merger,
consolidation, liquidation, or other form of transfer. 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 this Agreement in the same manner and
to the same extent that Company would be required to perform it if no such
succession had taken place. Without limiting the foregoing, unless the context
otherwise requires, the term "Company" includes all subsidiaries of Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ACTION PERFORMANCE COMPANIES, INC.
By:______________________________________________
Its:_____________________________________________
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John Bickford
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