EXHIBIT 10.3
Consulting Agreement
This Agreement (this “Agreement”) is made effective for all purposes and in all
respects as of this 20 day of February, 2006, by and between DIRT MotorSports,
Inc., a Delaware Corporation with offices at 2500 S. McGee, Suite 147, Norman,
Oklahoma 73072 (the “Corporation”), and Tom Deery, an individual residing at 30
Talaquah Boulevard., Ormond Beach, Florida 32174 (“Deery”).
WHEREAS, the Corporation desires to engage Deery to perform the duties of
Interim President.
WHEREAS, Deery desires to be so engaged by the Corporation; and
WHEREAS, the Corporation and Deery desire to set forth in writing the terms and
conditions of their agreements and understandings.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein
contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:

  1.   Duties of Interim President. Deery shall perform the duties of Interim
President reporting to the Company’s CEO. During the term of this Agreement,
Deery agrees to commit a substantial majority of his time in the performance of
his duties as the Company’s Interim President, although both parties acknowledge
that Deery may be involved on a limited basis in certain unrelated business
activities. Deery agrees to perform his work on behalf of the Company in a
prompt, efficient and professional manner. If Deery desires to be considered for
the Corporation’s permanent President and Chief Executive Officer position,
Deery shall provide formal written notice to the Corporation and comply with the
formal search process as determined in the sole discretion of Corporation.    
2.   Term of Engagement. The term of Deery’s engagement hereunder (the “Term”)
shall commence as of the date hereof and shall continue for a period of six
(6) months at which time this Agreement shall automatically renew under the same
terms and conditions for an additional three (3) months unless the Corporation
or Deery provide written notice to the other of its intent not to renew on or
before 30 days prior to the scheduled termination date. Notwithstanding the
foregoing, the termination of this Agreement for any reason shall not terminate
or in any way affect Deery’s covenants and obligations set forth in sections 6,
7, 8 and 12 hereof.     3.   Compensation. The Corporation shall pay Deery a
monthly cash fee of FIFTEEN THOUSAND DOLLARS ($15,000). During the Term, the
Corporation shall not be obligated to pay for, or keep in effect, any
hospitalization, health, life or other insurance for the benefit of Deery, to
pay any employment or similar taxes, to make any tax withholdings or to provide
benefits that the Corporation provides to its employees. Deery shall be eligible
to receive a cash or stock bonus in an amount and at times to be determined by
the Corporation in its sole discretion.     4.   Stock Options/Restricted Stock.
Upon the execution of this Agreement, Deery shall be granted five year options
to purchase 50,000 shares of the Corporation’s common stock at a price of $4.00
per share in accordance within the Corporation’s existing 2004 Long-Term
Incentive Plan. 25,000 of such options shall vest upon execution of this
Agreement and 25.000 of such options shall vest on the six month anniversary of
this Agreement. Deery shall be issued 50,000 restricted common

 

--------------------------------------------------------------------------------

 

      shares upon execution of the Agreement which shall vest on the six month
anniversary of the Agreement.     5.   Expenses Incurred. During the Term, the
Corporation shall pay or promptly reimburse Deery for all reasonable travel,
telephone and other business expenses paid or incurred by Deery in connection
with the performance of Deery’s duties hereunder, upon presentation of expense
statements, vouchers or other evidence of expenses providing the detail required
by the Corporation.     6.   Treatment of Information.

  A.   Deery acknowledges that Deery shall or may be making use of, viewing and
adding to confidential information of a special and unique nature and value
relating to such matters as the Corporation’s trade secrets, agreements,
formats, methods, programs, documentation, manuals, white papers, other
confidential reports and communications and lists of and information relating to
promoters, customers and prospects (“Confidential Information”). Deery further
acknowledges that any information and materials received by the Corporation from
third parties in confidence shall be included in the definition of Confidential
Information. Deery agrees that Deery shall not directly or indirectly, disclose,
divulge, reveal, report, publish, transfer or use, for any purpose whatsoever,
any Confidential Information to any third party. As any breach by Deery of its
covenants and agreements in this section may cause irreparable injury to the
Corporation that cannot be redressed by the payment of monies, the Corporation
shall be entitled to enjoin any such threatened or continuing violation. Deery
acknowledges that Corporation holds all right, title, and interest in and to all
tangible and intangible incidents of the Confidential Information, including,
without limitation, all trade secrets, copyrights, patent rights and derivative
works pertaining thereto, and that this Agreement conveys to Deery only a
limited right to use the Confidential Information in the course of performing
this Agreement. Such right is fully revocable in accordance with the provisions
of this Agreement. Deery further agrees that, except for such right of use, it
shall not assert any right, title, or interest in or to the Confidential
Information and shall hold all Confidential Information in strict confidence.  
  B.   Confidential Information shall not include information which is or
becomes publicly available without breach of (i) this Agreement, (ii) any other
agreement or instrument to which the Corporation is a party or a beneficiary or
(iii) any duty owed to the Corporation by Deery or any third party; provided,
however, that Deery hereby acknowledges and agrees that if Deery shall seek to
disclose, divulge, reveal, report, publish, transfer or use any Confidential
Information to any third party, Deery shall bear the burden of proving that any
such information shall have become publicly available without any such breach.
Disclosure of Confidential Information shall not be prohibited if such
disclosure is directly pursuant to a valid and existing order of a court or
other governmental body or agency; provided, however, that (i) Deery shall first
have given prompt notice to the Corporation of any such possible or prospective
order (or proceeding pursuant to which any such order may result) and (ii) the
Corporation shall have been afforded a reasonable opportunity to prevent or
limit any such disclosure. Deery agrees to return all Confidential Information
in Deery’s possession or under Deery’s control at the request of the Corporation
or, in the absence of such a request, upon the termination of this Agreement.

  7.   Ownership of Information. Deery covenants and agrees that all right,
title and interest in any findings, agreements, reports, marks, inventions,
writings, disclosures, discoveries, developments

 

--------------------------------------------------------------------------------

 

      and improvements written, invented, made or conceived by Deery in the
course of or arising out of this Agreement (hereinafter referred to as “Work
Product”) shall remain the sole and exclusive property of Corporation and shall
be a work made for hire. Deery agrees to disclose all Work Product to
Corporation and agrees to execute any instruments and to do all other things
reasonably requested by the Corporation (both during and after Deery’s
engagement by the Corporation) in order to vest more fully in the Corporation
all ownership rights in Work Product. Deery shall have written confidentiality
and assignment of intellectual property rights agreements in place with any of
its employees, agents, contractors or Deerys who do any work related to this
Agreement so as to make this Agreement enforceable against such its employees,
agents, contractors or Deerys.     8.   Indemnification. Deery agree to
indemnify Corporation and pay all Corporation damages and all other costs
associated with third party claims for claims arising out of Deery’s negligent
performance or actions under this Agreement.     9.   No Prior Agreements. Deery
represents that Deery’s performance under this Agreement do not and shall not
breach any fiduciary or other duty or any covenant, agreement or understanding
(including, without limitation, any agreement relating to any proprietary
information, knowledge or data acquired by Deery in confidence, trust or
otherwise prior to Deery’s engagement by the Corporation) to which Deery is a
party or by the terms of which Deery may be bound. Deery covenants and agrees
that Deery shall not disclose to the Corporation, or induce the Corporation to
use, any such proprietary information, knowledge or data belonging to any
previous employer or client or others.     10.   Independent Contractor. Deery
shall at all times be an independent contractor hereunder, but shall be
permitted in his capacity as Interim Chief Executive Officer of the Company to
represent the Corporation, make personnel decisions and act on the Corporation’s
behalf, or to bind or obligate the Corporation. Deery shall not be treated as an
employee for Federal tax purposes. While Deery shall be permitted to approve
Corporation expenditures up to $25,000, any fees or expenditures over said sum
shall be approved additionally by the Chief Financial Officer of the
Corporation. The Corporation shall have the authority to increase said limit as
appropriate in its sole discretion. Deery hereby represents and warrants to the
Corporation that Deery is an independent contractor for Federal, state and local
tax purposes. Further, Deery hereby covenants and agrees to pay any and all
Federal, state and local taxes required by law to be paid by an independent
contractor, including, without limitation, any taxes imposed by the Self
Employment Contribution Act.     11.   Insurance. Deery shall be covered by the
Corporation’s Director’s Officer and Liability Insurance in his capacity as
Interim President.     12.   Governing Law and Venue. In view of the fact that
the principal office of the Corporation is located in Oklahoma, the construction
and interpretation of this Agreement shall at all times and in all respects be
governed by the substantive laws of Oklahoma, without regard to its rules
regarding conflicts of law. Any legal action taken by either party shall take
place in the State of Oklahoma and the parties hereby submit to the exclusive
jurisdiction of the same. In the event of any legal action or claim concerning
the terms of this Agreement or the performance of any party under the terms of
this Agreement, all reasonable legal fees, costs and expenses of the prevailing
party relating to such legal action or claim shall promptly be paid by the other
party.     13.   Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and received by courier service (with proof of
service) or certified or registered mail (return receipt requested,

 

--------------------------------------------------------------------------------

 

      first-class postage prepaid), in the case of Deery, to Deery’s address as
shown on the Corporation’s records, and, in the case of the Corporation, to its
principal office.     14.   General. This Agreement contains the entire
agreement and understanding by and between parties with respect to the subject
matter hereof, and no representations, promises, agreements or understandings,
written or oral, not herein contained shall be of any force or effect. No change
or modification hereof shall be valid or binding unless the same is in writing
and signed by the party intended to be bound. This Agreement shall be binding
upon, and shall inure to the benefit of, the Corporation and Deery, and their
respective successors. However, Deery may not assign this Agreement or any
duties hereunder without the express written authorization of Corporation. The
provisions of this Agreement shall be deemed severable, and the invalidity or
unenforceability of any one or more of the provisions hereof shall not affect
the validity and enforceability of the other provisions hereof. The headings and
other captions in this Agreement are for convenience and reference only and
shall not be used in interpreting, construing or enforcing any of the provisions
of this Agreement. Neither party shall be liable for the failure to perform its
obligations under this Agreement due to events beyond such party’s reasonable
control including, but not limited to, strikes, riots, wars, fire, acts of God
or acts in compliance with any applicable law, regulation or order (whether
valid or invalid) of any court or governmental body. No waiver of any provision
of this Agreement shall be valid unless the same is in writing and signed by the
party against whom such waiver is sought to be enforced; moreover, no valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of this Agreement at such time or shall be deemed a valid
waiver of such provision at any other time.

IN WITNESS WHEREOF, the Corporation and Deery have duly executed this Agreement
intending to be bound thereby.

     
DIRT MotorSports, Inc.
  Tom Deery
 
   
By: /s/ Paul A. Kruger
  By: /s/Tom Deery
 
   
Print Name: Paul A. Kruger
  Print Name: Tom Deery
 
   
Date: 2/20/2006
  Date: 2/24/2006