exv10w3



 






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