Document:

exv4w1

 

Exhibit 4.1

SEVERANCE AGREEMENT AND GENERAL RELEASE

     This Severance Agreement and General Release is entered into by the parties, DIRT Motor
Sports, Inc., a Delaware corporation (“the Company”), and Joseph Dickey (“Dickey”). The parties
hereby agree as follows:

     1.     Effective June 30, 2006, the employment of Joseph Dickey by the Company shall be terminated
by mutual consent of the parties and the Employment Agreement between them dated February 1, 2005
shall be considered complete and of no further force or legal effect. In consideration of the
severance payment of Seventy Five Thousand Dollars ($75,000.00) payable in ten(10) installments of
seven thousand five hundred dollars ($7,500.00) payable bi-weekly with the first payment due July
14, 2006 and the final payment due November 17, 2006, and for other good and valuable consideration
outlined below, the sufficiency of which is hereby acknowledged, Dickey does release and forever
discharge, for his heirs, personal representatives and assigns, the Company, its agents, servants,
officers, employees, subsidiaries, affiliated companies, parent organizations and directors of and
from all claims, demands, actions, charges or causes of action, known or unknown, arising from his
employment with the Company, save and except for any claims Dickey may possess against Paul Kruger
in his individual capacity.

     In addition to the severance payments, the Company agrees to provide Dickey with the
following:

	 	(a)	 	75,000 shares of Common Stock in the Company, in exchange for
the options held by Dickey to purchase 300,000 shares of Common Stock of the
Company. This exchange is the subject of a separately executed agreement.
	 
	 	(b)	 	The Company shall provide to Dickey the same health insurance
he has maintained with the Company through September 30, 2006 by either
allowing Dickey to remain listed on the payroll until such time (without
compensation or other benefits other than the health insurance benefits as
outlined herein) or by providing him the monetary equivalent of the COBRA
payments Dickey will be obliged to undertake to maintain coverage.
	 
	 	(c)	 	A positive letter of recommendation from the Company president
in a form and language mutually agreeable to the parties. This letter will
form the basis of any response to employment reference inquiries concerning
Dickey after his departure from the Company.
	 
	 	(d)	 	Removal of any negative information in Dickey’s personnel file,
if such exists. Dickey shall be provided a copy of the file for review and he
shall identify of information he considers negative and the Company shall
remove any information designated.

     2.     As further consideration, Dickey agrees that during the time that he is receiving severance
payments, he will not directly or indirectly, solicit existing customers of the Company nor will he
own an interest in or work as an employee for any business which is competitive to the Company for
a period of one (1) year from the date of execution of this Agreement. Dickey agrees that these
provisions are an integral and essential part of this Agreement, are considered to be fair,
reasonable and necessary for the protection of legitimate business interests of the

 

Company and are an essential and necessary part of the compensation and benefits under this
Agreement.

     3.     Both parties agree that they will not at any time in the future defame, disparage or make
statements which could embarrass or cause harm to the other party’s name and reputation or the
names and reputation of any of its officers, directors or representatives.

     4.     Dickey understands and agrees that the continued payment of the above referenced payments
by the Company shall be contingent on his execution of this Agreement and his on-going compliance
with all other obligations under this Agreement.

     5.     This Agreement is to be construed pursuant to the laws of the State of Oklahoma and is
considered confidential by both parties. Its terms shall be disclosed only on an absolute need-to-know basis. Should any provision of this Agreement become legally unenforceable, no other
provision shall be affected, and this Agreement shall be construed as if it had never included the
unenforceable provision.

     6.     This Agreement represents the full understanding between Dickey and the Company. In
signing this Release, the parties do not rely upon any promise, representation or other inducement
that is not expressed in this Agreement. This Agreement may be modified only in writing signed by
the parties and may not be modified by any oral agreement. The prevailing party in any action to
enforce this Agreement shall be entitled to its costs and attorneys’ fees.

     7.     The signers of this document acknowledge they are of lawful age and are legally competent
to execute this Agreement and before doing so they have fully informed themselves of its contents
by reading and understanding it. In entering into this Agreement, they are not under any
compulsion or coercion.

	 	 	 	 	 
	 	 	 
	 	/s/ Joe Dickey
 	 
	 	Joseph Dickey 	 
	 
	 	Dated:  	June 30, 2006	 	 
	 
	 	 	 
	 	/s/ Brian Carter
 	 
	 	Representative of DIRT Motor Sports, Inc. 	 
	 
	 	Dated:  	June 30, 2006exv4w2

 

Exhibit 4.2

STOCK OPTION EXCHANGE AGREEMENT

     This Exchange Agreement (this “Agreement”) is dated as of June 30, 2006, by and among
Dirt Motor Sports, Inc., a Delaware corporation, successor to Boundless Motor Sports Racing Inc., a
Colorado corporation (the “Company”), and Joe Dickey, the holder of stock options to
purchase shares of the Company’s Common Stock (the “Holder”).

Recitals:

     WHEREAS, the Holder currently hold stock options issued under the Company’s 2004 Long Term
Incentive Plan as amended (the “Plan”) to purchase an aggregate of 300,000 shares of Common Stock
of the Company, par value $.01 per share at an exercise price of $3.65 per share (the “Stock
Options”); and

     WHEREAS, subject to the terms and conditions set forth herein, the Company desires to cancel
and retire the Stock Options and the Holders are willing to exchange the Stock Options for an
aggregate of 75,000 shares of the Company’s Common Stock, par value $.01 per share (the “Common
Shares”) issued under the Plan and subject to such Plan and subject to certain restrictions in
Section 3 below; and

     WHEREAS, the Company is duly authorized to enter into this agreement and issue the Common
Stock contemplated herein in accordance with the Plan.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby agreed and acknowledged, the parties hereby agree as follows:

AGREEMENT:

     1.     Securities Exchange.

              (a)     The Holder agrees to deliver to the Company the Stock Options in exchange for the Common
Shares and the Company agrees to issue and deliver the Common Shares to the Holders in exchange for
the Stock Options.

              (b)     The exchange under this Agreement (the “Exchange”) shall occur simultaneously with
the execution of this agreement.

              (c)     Upon the Exchange, the Company shall cause to issue to the Holder an aggregate of 75,000
Common Shares and shall instruct the Company’s transfer agent to deliver a certificate to the
Holder evidencing the Common Shares which shall bear a legend, restricting their transfer or sale
subject to Section 3, as set forth on Exhibit A hereto.

     2.     Acceptance of the Plan. The Common Shares issued are subject to all of the
applicable terms and provisions of the Plan, and such terms and provisions are incorporated by
reference herein. The Company hereby waives the forfeiture provisions of 6.d.(ii) of the Plan or
as otherwise modified in this Agreement.

 

 

     3.     Restricted Transfer or Sale of Shares. The Common Shares issued shall be
restricted in their trading Subject to the provisions of Section 6(d) of the Plan, unless otherwise
restricted; the Common Shares shall become freely tradable upon the occurrence of the one of the
following events, whichever occurs first:

        (a)     January 1, 2008.

        (b)     the day immediately prior to a Change in Control of the Company. A “Change in
Control” means the occurrence of one or more of the following events:

        (i)     Any person within the meaning of Section 13(d) and 14(d) of the Securities Exchange
Act or 1934, as amended (the “Exchange Act”), other than the Company (including its
subsidiaries, directors or executive officers) has become the beneficial owner, within the
meaning of Rule 13d-3 under the Exchange Act, of 50 percent or more of the combined voting
power of the Company’s then outstanding Common Stock or equivalent in voting power of any
class or classes of the Company’s outstanding securities ordinarily entitled to vote in
elections of directors (“voting securities”);

        (ii)     Shares representing 50 percent or more of the combined voting power of the
Company’s voting securities are purchased pursuant to a tender offer or exchange offer
(other than an offer by the Company or its subsidiaries or affiliates);

        (iii)     As a result of, or in connection with, any tender offer or exchange offer, merger
or other business combination, sale of assets or contested election, or any combination of
the foregoing transactions (a “Transaction”), the persons who were directors of the Company
before the Transaction shall cease to constitute a majority of the Board of Directors of the
Company or of any successor to the Company;

        (iv)     Following the date hereof, the Company is merged or consolidated with another
corporation and as a result of such merger or consolidation less than 50 percent of the
outstanding voting securities of the surviving or resulting corporation shall then be owned
in the aggregate by the former shareholders of the Company; or

        (v)     The Company transfers more than 50 percent of its assets, or the last of a series
of transfers results in the transfer of more than 50 percent of the assets of the Company,
to another entity that is not wholly-owned by the Company. For purposes of this subsection
(b), the determination of what constitutes 50 percent of the assets of the Company shall be
made by the Board of Directors of the Company, as constituted immediately prior to the
events that would constitute a change of control if 50 percent of the Company’s assets were
transferred in connection with such events, in its sole discretion.

OR

        (c)     upon the discretion of the Board of Directors with Holder’s consent.

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     4.     Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof and supersedes all prior and/or
contemporaneous oral or written proposals or agreements relating thereto all of which are merged
herein. This Agreement may not be amended or any provision hereof waived in whole or in part,
except by a written amendment signed by both of the parties.

     5.     Counterparts. This Agreement may be executed by facsimile signature and in
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument, IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.

	 	 	 	 	 
	 	DIRT MOTOR SPORTS, INC.

 	 
	 	By:  	/s/ Brian Carter
 	 
	 	 	Name:  	Brian Carter 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	HOLDER:

 	 
	 	By:  	/s/ Joe Dickey
 	 
	 	 	Name:  	Joe Dickey 	 
	 	 	 	 
	 

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