Employment Agreement

EXHIBIT 10.76

EMPLOYMENT AGREEMENT

DATED AS OF DECEMBER 10, 2004

BETWEEN

ACTION PERFORMANCE COMPANIES, INC.

AND

FRED W. WAGENHALS


TABLE OF CONTENTS Page 1. Position and Duties 1 2. Term of Employment 1 3. Compensation and Other Benefits 1 (a) Base Salary 1 (b) Bonus 2 (c) Stock Options 2 (d) Benefits 2 (e) Vacations 2 (f) Business Expenses 2 4. Termination by Employer 2 (a) Termination for Cause 2 (b) Termination without Cause 3 5. Termination by Executive 3 (a) Termination for Good Reason 3 (b) Change of Control 3 (c) Termination Without Good Reason 4 6. Death or Disability 4 (a) Death 4 (b) Disability 5 7. Severance Benefits 5 (a) Effective Date 5 (b) Benefits 5 (c) Exceptions to Benefits 5 (d) Future Employment 6 8. Covenant-Not-to-Compete 6

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TABLE OF CONTENTS Page (a) Interests to be Protected 6 (b) Devotion to Employment 6 (c) Non-Solicitation of Customers 7 (d) Non-Solicitation of Executives 7 (e) Competing Business 7 (f) Limitation and Judicial Amendment 7 (g) Injunctive Relief, Damages and Forfeiture 8 (h) Survival 8 9. Confidential Information 8 10. Indemnity by Employer 8 (a) Generally 8 (b) Expenses 8 (c) Proceeding 8 (d) Payment of Executive Expenses 9 11. Miscellaneous 9 (a) Notices 9 (b) Indulgences 9 (c) Controlling Law 10 (d) Binding Nature of Agreement 10 (e) Execution in Counterpart 10 (f) Provisions Separable 10 (g) Entire Agreement 10 (h) Paragraph Headings 10 (i) Number of Days 10 (j) Successors and Assigns 10

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EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of the 10th day of December, 2004 by and between ACTION PERFORMANCE COMPANIES, INC. , an Arizona corporation (" Employer" ) and FRED W. WAGENHALS (" Executive" ). For purposes of paragraphs 8, 9, and 10 of this Agreement, the term " Employer" shall include each of Employer' s subsidiaries and operating divisions.

W I T N E S S E T H:

Executive currently serves as Chairman of the Board, President, and Chief Executive Officer of Employer pursuant to the terms of an employment agreement dated as of July 31, 2000 (the " 2000 Agreement" ).

Employer desires to continue to employ Executive, and Executive desires to accept such continued employment, all on the terms and conditions hereinafter set forth.

This Agreement shall replace the 2000 Agreement in all respects.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants set forth in this Agreement, the parties hereto agree as follows:

1. Position and Duties . Executive shall be employed as the Chairman of the Board, President, and Chief Executive Officer of Employer and shall report only to the Board of Directors of Employer (the " Board" ). Executive shall devote substantially all of his business time to the business of Employer and serve Employer faithfully, loyally, honestly, and to the best of his ability. This Agreement, however, shall not preclude Executive from (a) serving on the board of directors of not more than three other companies that do not compete with Employer, (b) serve on the governing body of a reasonable number of trade associations or charitable organizations, (c) engaging in charitable activities and community affairs, and (d) managing his personal investments and affairs, provided that such activities do not conflict or materially interfere with the effective discharge of his duties and responsibilities to Employer and to the extent Employer does not reasonably object to any service by Executive on behalf of any such third party.

2. Term of Employment . The term of Executive' s employment hereunder shall commence on the date hereof and shall continue until December 31, 2007 (the " Initial Term" ) and from year to year thereafter (each a " Renewal Term" ), unless and until terminated by either party giving written notice to the other not less than sixty (60) days prior to the end of the then current term, unless earlier terminated under the terms of this Agreement.

3. Compensation and Other Benefits.

(a) Base Salary . Employer shall pay to Executive a base salary at a rate of Eight Hundred Thousand Dollars ($800,000) per annum to be paid in equal monthly installments, or in such other periodic installments upon which Employer and Executive shall mutually agree. On at least an annual basis, the Compensation Committee of the Board shall


review Executive' s base salary and may increase but not decrease Executive' s base salary in the committee' s discretion.

(b) Bonus . Executive shall be entitled to participate in all bonus programs maintained for executives of Employer. The amount of any bonuses under such programs or otherwise shall be determined by the Compensation Committee of the Board.

(c) Stock Options . Executive shall be entitled to participate in all stock option and comparable programs available to executives of Employer. The granting of any stock options and the provisions thereof shall be determined by the Compensation Committee of the Board.

(d) Benefit Plans . Executive shall be entitled to participate in any benefit plans maintained by Employer, including, but not limited to, retirement plans, disability plans, life insurance plans, and health and dental plans available to other executive employees of Employer, subject to any restrictions, including waiting periods, specified in the plans.

(e) Other Benefits Executive shall also receive (i) reimbursement for reasonable annual tax and financial consulting fees, (ii) reimbursement for the costs of an annual physical by the doctor of his choice, and (iii) reimbursement for reasonable legal and accounting fees and expenses incurred by Executive in connection with this Agreement, all of which shall be subject to a gross up, which means that Executive will receive an additional payment in an amount such that after Executive' s payment of taxes on that additional payment, a sufficient sum remains to pay Executive' s tax liability resulting from such reimbursement.

(f) Vacations . Executive shall also be entitled to four (4) weeks of paid vacation each calendar year, with such vacations to be scheduled and taken by Executive in his discretion, provided no such vacation shall interfere with the performance of Executive' s duties hereunder and no unused vacation may be carried over to a succeeding calendar year.

(g) Business Expenses . Employer shall reimburse Executive for any and all necessary, customary, and usual expenses, properly receipted in accordance with Employer' s policies, incurred by Executive on behalf of Employer. If Executive is required to travel in the performance of his duties under this Agreement, Executive shall be entitled to use any plane maintained by Employer or to fly first class on commercial flights at his election at Employer' s cost.

4. Termination by Employer .

(a) Termination for Cause . Employer may terminate Executive' s employment under this Agreement for Cause at any time upon written notice to Executive. For purposes of this Agreement, " Cause" shall be limited to discharge resulting from a determination by the Board that Executive (i) has been convicted of a felony, involving dishonesty, fraud, theft, or embezzlement; (ii) has repeatedly failed or refused, after written notice from Employer along with failure of Executive to cure within thirty (30) days of receipt of such notice, in a material respect to follow reasonable policies or directives established by Employer; (iii) has willfully and persistently failed, after written notice from Employer within thirty (30) days of receipt of such notice, to attend to material duties or obligations imposed upon him under this Agreement; or

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(iv) has performed an act or failed to act for which if he were prosecuted and convicted, would constitute a felony involving One Thousand Dollars ($1,000) or more of money or property of Employer. The existence of " Cause" shall be determined by the Board acting in good faith after prior notice to Executive and after providing Executive with an opportunity to be heard. If Executive' s employment is terminated for Cause, Executive shall receive no Severance Benefits pursuant to paragraph 7.

(b) Termination without Cause . Employer also may terminate Executive' s employment under this Agreement without Cause at any time upon written notice to Executive. In the event Executive' s employment is terminated by Employer without Cause, Executive shall receive the Severance Benefits pursuant to paragraph 7.

5. Termination by Executive . Executive may terminate his employment under this Agreement with or without " Good Reason" in accordance with the provisions of this paragraph 5.

(a) Termination for Good Reason . Executive may terminate his employment under this Agreement for " Good Reason" by giving written notice to Employer within sixty (60) days, or such longer period as may be agreed to in writing by Employer, of Executive' s receipt of notice of the occurrence of any event constituting " Good Reason," as described below. Executive shall have " Good Reason" to terminate his employment under this Agreement upon the occurrence of any of the following events:

(i) Any reduction in Executive' s status, duties, authority, or compensation.

(ii) Executive is demoted to a position of less stature or importance within Employer than the position described in paragraph 1;

(iii) Executive is assigned duties inconsistent with the positions, duties, responsibilities, or status of the Chief Executive Officer of Employer;

(iv) Executive is required to relocate to an employment location that is more than twenty-five (25) miles from his current employment location, which the parties agree is Employer' s present corporate headquarters; or

(v) Upon an event of a " Change of Control" of Employer, provided that a change of control shall not be considered to have taken place for purposes of this Agreement in the event the Change of Control shall have been specifically approved by the Board and the provisions of this Agreement remain in full force and effect as to Executive and Executive suffers no reduction in Executive' s status, duties, authority, or compensation.

(b) Change of Control . For the purposes of this paragraph 5, the term " Change in Control" of Employer shall mean a Change in Control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 as in effect on the date of this Agreement or, if Item 6(e) is no longer in effect, any regulations issued by the Securities and Exchange Commission

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pursuant to the Securities Exchange Act of 1934 that serve similar purposes; provided that, without limitation, such a Change in Control shall be deemed to have occurred if and when

(i) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the " beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) directly or indirectly of equity securities of Employer representing thirty percent (30%) or more of the combined voting power of Employer' s then-outstanding equity securities;

(ii) during the term of this Agreemen ...