EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
1st day of June, 2005, between SUPERIOR GALLERIES, INC., a Delaware Corporation
(the "Company"), and XXXXX XXXXXX, with reference to the following:
Company desires to employ Xx. Xxxxxx as its Executive Vice President
and Chief Sales Officer and Xx. Xxxxxx desires to accept such employment, on the
terms and conditions set forth hereinafter in this Agreement.
NOW, THEREFORE, in consideration of the respective promises of each
party made to the other in this Agreement and other good and valuable
consideration, the receipt of which is hereby acknowledged by each of the
parties, it is agreed as follows:
1. EMPLOYMENT AS EXECUTIVE VICE PRESIDENT AND CHIEF SALES OFFICER
1.1 EMPLOYMENT AS EXECUTIVE VICE PRESIDENT AND CHIEF SALES
OFFICER. The Company hereby employs Xx. Xxxxxx as Executive Vice President and
Chief Sales Officer, and Xx. Xxxxxx hereby accepts such employment and agrees to
serve in that position, on a full time basis, in accordance with the terms and
subject to the conditions contained in this Agreement. Xx. Xxxxxx'x employment
will be pursuant to a co-employment agreement with Administaff.
1.2 NO CONFLICTING DUTIES. Xx. Xxxxxx hereby represents and
warrants that he is under no contractual or other commitments (written or oral)
that are inconsistent with his obligations set forth in this Agreement or which
would interfere with the performance of his duties hereunder, including, but not
limited to, any employment, services or consulting agreements or commitments or
any non-competition, trade secret or confidentiality or similar agreements.
1.3 NONSOLICITATION COVENANT. The Company wishes to protect its
legitimate business interests and Xx. Xxxxxx has, and recognizes that he will
continue to have, access to significant confidential, proprietary or trade
secret information of the Company during the course of his employment including,
but not limited to, names and relationships with clients and potential clients.
Based on the foregoing, for the term of this Agreement and for an additional one
(1) year after termination Xx. Xxxxxx'x employment, Xx. Xxxxxx shall not,
without the Company's prior written approval: (a) solicit business from any
person or entity which was a client or prospective client of the Company at any
time during Xx. Xxxxxx'x employment; (b) entice, induce or encourage any other
person to engage in any activity which, were it done by Xx. Xxxxxx directly,
would violate any provision hereof.
2. COMPENSATION. Xx. Xxxxxx'x compensation for all services rendered
to the Company or to any affiliate of the Company shall be as follows:
2.1 BASE SALARY AND BONUSES. Xx. Xxxxxx'x base salary shall be
$200,000 per year, subject to annual increase based on the Consumer Price Index,
and payable in accordance with the Company's usual pay schedule for officer
salaries. In addition, Xx. Xxxxxx shall receive
(a) a signing bonus of $25,000 payable in the two pay periods
immediately following his 30th day of employment hereunder, and
refundable in the event he resigns or is terminated for cause
within one year of commencing employment;
(b) a bonus of up to 150% of his base salary based upon the Company's
performance in accordance with the attached spreadsheet.
2.2 EMPLOYEE BENEFITS. Health insurance coverage under the
Company's group plan, on the same terms and conditions as other SUPERIOR
employees and participation in all other employee benefit plans and programs in
which all full time employees are generally entitled to participate.
2.3 VACATION AND SICK DAYS. Xx. Xxxxxx shall be entitled to 15
days paid vacation and six sick/personal days per year in accordance with the
Company's employee handbook.
2.4 REIMBURSEMENT OF EXPENSES/DUES. Xx. Xxxxxx shall be entitled
to be reimbursed promptly for his reasonable out-of-pocket expenses incurred in
the performance of his duties for the Company, and for professional dues and
subscriptions relating to said duties, in accordance with and subject to the
Company's expense reimbursement policies. The Company shall pay for Xx. Xxxxxx'x
PNG membership, and will provide Xx. Xxxxxx the use of a cellular telephone and
laptop computer with wireless access.
2.5 MOVING ALLOWANCE. The Company shall reimburse Xx. Xxxxxx for
up to $10,000 of actual expenses relating to his move to California, provided
said move is completed no later than August 31, 2006. Until August 31, 2006 or
the completion of his move (whichever is sooner), Xx. Xxxxxx shall be permitted
to work remotely on two days (Monday or Friday) per month, with Saturdays or
Sundays worked at trade shows to be added to this allowance on a one-for-one
basis. If Xx. Xxxxxx does not complete his move to California by August 31,
2006, he shall lose all right to remote working days or moving allowance.
The Company will pay Xx. Xxxxxx'x initial airfare from Dallas to
Los Angeles upon commencement of his employment, and will pay for up to two
round trip airfares for Xx. Xxxxxx'x spouse from Dallas to Los Angeles for the
purpose of a residence search.
2.6 TAXES AND WITHHOLDINGS. All compensation and benefits payable
to Xx. Xxxxxx under this Agreement shall be paid net of any employment taxes or
withholding required pursuant to applicable law or under any employee benefit
plans or programs in which Xx. Xxxxxx or his dependents participate.
3. GRANT OF STOCK AND STOCK OPTIONS. The Company shall grant Xx. Xxxxxx
25,000 shares of the Company's restricted voting stock vesting quarterly or
annually (at Xx. Xxxxxx'x option) over a four-year period. Should the Company
register stock for other stockholders during the period of Xx. Xxxxxx'x
employment, it shall make best efforts to register stock for Xx. Xxxxxx as well.
In addition, the Company shall grant options to purchase a total of 100,000
shares of the Company's Common Stock (the "Options") at an option purchase price
to be closing price of the Company's Common Stock as traded on the
Over-the-counter Bulletin Board on day the Board of Directors approves said
options, said options vesting in equal amounts over four years under and
pursuant to the Company's 2003 Omnibus Stock Option Plan (the "Plan"). On or
after the vesting of any portion of this Option in accordance herewith, and
until termination of the right to exercise this Option in accordance with
Section 3.1 below, the portion of this Option which has vested prior to such
termination may be exercised in whole or in part by Xx. Xxxxxx upon delivery of
the following to the Company at its principal executive offices of a written
notice to exercise along with a check in the amount of the option purchase price
multiplied by the number of shares being purchased.
3.1 TERMINATION OF OPTIONS. The Options granted hereby may be
exercised until the later of (a) 5 years from the date of vesting; (b) 30 days
following termination of Xx. Xxxxxx'x employment with the Company.
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4. INDEMNIFICATION AND D&O LIABILITY INSURANCE. The Company agrees that
it shall indemnify and hold Xx. Xxxxxx harmless against any liability, claim or
cost resulting from any claims against him for acts or omissions occurring in
the course of his employment with the Company, PROVIDED, HOWEVER, that this
obligation shall not extend to wrongful acts of Xx. Xxxxxx which are determined
by a trier of fact to have been intentional or grossly negligent. To the extent
that the indemnification provisions of the Company's by-laws differ materially
from this Section 4, the by-laws shall control. Notwithstanding the foregoing,
the Company agrees that during the term of this Agreement it shall maintain
directors and officers liability insurance covering Xx. Xxxxxx, in an amount and
under such terms and conditions as are typical for a company such as the
Company.
5. TERM AND TERMINATION.
5.1 TERM. The term of Xx. Xxxxxx'x employment under this Agreement
shall be three (3) years commencing on the date of this Agreement, unless Xx.
Xxxxxx'x employment is sooner terminated pursuant to provisions hereinafter set
forth in this Section 5 or unless Xx. Xxxxxx'x employment is extended by mutual
agreement of the parties.
5.2 TERMINATION WITHOUT CAUSE. The Company shall be entitled at
any time to terminate Xx. Xxxxxx'x employment without Cause (as defined below),
effective on fifteen (15) days prior written notice to Xx. Xxxxxx. Xx. Xxxxxx'x
employment with the Company also shall terminate in the event and on the
occurrence of his disability or his death. In the event of any such termination
of Xx. Xxxxxx'x employment pursuant to this Section 5.2, the Company shall (a)
continue to pay Xx. Xxxxxx his base salary for a period of three (3) months from
the effective date of the termination (the "Severance Period"), and (b) continue
medical insurance coverage for him (and for his dependents if they also were
covered at the time of such termination), on the terms in effect at the time of
such termination, for the Severance Period. In the event that Xx. Xxxxxxx
XxXxxxxx is neither the Company's Chairman of the Board nor its Chief Executive
Officer at the time Xx. Xxxxxx is terminated under this Section 5.2, the
Severance Period shall be six (6) months.
5.3 TERMINATION FOR CAUSE. The Company may terminate Xx. Xxxxxx'x
employment for Cause at any time effective on written notice to him. In the
event of a termination for Cause, the Company's sole obligation and liability to
Xx. Xxxxxx shall be to pay Xx. Xxxxxx any unpaid salary, together with any
unused vacation, accrued to the effective date of such termination. For purposes
of this Agreement, "Cause" shall be defined as the occurrence of any of the
following: (a) Xx. Xxxxxx'x conviction of an act that, under applicable law or
government regulations, constitutes a felony or a misdemeanor involving moral
turpitude; (b) Xx. Xxxxxx'x breach or violation of any confidentiality covenants
with the Company, or of any conflict of interest or ethics policies from time to
time adopted by the Board of Directors and made applicable generally to the
officers of the Company, which continues unremedied for a period of ten (10)
days following written notice thereof to Xx. Xxxxxx from the Company or which is
not susceptible to cure; (c) Xx. Xxxxxx'x breach or violation of any of his
material covenants or obligations in this Agreement which continues unremedied
for a period of thirty (30) days following written notice thereof to Xx. Xxxxxx
from the Company or which is not susceptible to cure.
5.4 EXCLUSIVITY OF REMEDIES. In the event of any termination of
Xx. Xxxxxx'x employment by the Company, and whether such termination is or is
not for Cause, then the respective rights and remedies and the respective
obligations of the parties hereto set forth in this Section 5 shall constitute
the exclusive rights, remedies and obligations of the parties, and each party
disclaims any other rights or remedies it or he (as the case may be) would, but
for the provisions of this Section, have under applicable law by reason of such
termination of employment or the acts or omissions that led to such termination
of employment.
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6. MISCELLANEOUS.
6.1 ENTIRE AGREEMENT/AMENDMENT. This Agreement (including any
co-employment agreement with Administaff) shall constitute the entire agreement
of the parties with respect to its subject matter, and shall supersede any other
prior or contemporaneous written, oral or implied agreements or understandings
between the parties. This Agreement may be amended at any time, but only by a
written instrument signed by both parties.
6.2 NO ASSIGNMENT. No party may transfer or assign any of its
rights or obligations under this Agreement and any attempt to do so shall be
null and void; PROVIDED, HOWEVER, that the Company shall be entitled, without
the necessity of having to obtain the consent of Xx. Xxxxxx, to assign this
Agreement and delegate its duties hereunder to any corporation or other entity
that acquires a majority or more of the outstanding common stock of the Company
or all or substantially all of the assets of the Company, whether by purchase,
merger, consolidation or otherwise.
6.3 BINDING ON SUCCESSORS. Subject to Section 6.2 above, this
Agreement shall be binding on the parties and their respective heirs, legal
representatives and successors and assigns.
6.4 HEADINGS. Section, subsection and paragraph headings are for
convenience of reference only and shall not affect the meaning or have any
bearing on the interpretation of any provision of this Agreement.
6.5 SEVERABILITY. If any provision of this Agreement or of the
Employee Confidentiality Agreement is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions hereof or thereof (as the case may be) shall not be affected or
impaired in any way.
6.6 GOVERNING LAW/ARBITRATION AND WAIVER OF JURY TRIAL. This
Agreement is made in and shall be construed and interpreted according to and
enforced under the internal laws of the State of California, excluding its
choice of law rules and principles. Any dispute between the parties relating to
this Agreement shall be resolved exclusively by binding arbitration in
accordance with the rules of commercial arbitration of the American Arbitration
Association in Los Angeles County, California and the determination of the
arbitrator in any such proceeding shall be final and binding on and
non-appealable by the parties. EACH PARTY DOES HEREBY EXPRESSLY AND IRREVOCABLY
WAIVE SUCH PARTY'S RIGHTS TO A TRIAL BY JURY IN ANY SUCH PROCEEDING, AND IN ANY
TRIAL OR OTHER PROCEEDING BETWEEN THE PARTIES RELATING IN ANY WAY TO THIS
AGREEMENT, AND EXPRESSLY AND IRREVOCABLY AGREES THAT THE TRIER OF FACT IN ANY
SUCH PROCEEDING SHALL BE THE ARBITRATOR.
6.7 AUTHORITY. The Company represents and warrants to Xx. Xxxxxx
that it has the requisite corporate power and authority, and Xx. Xxxxxx
represents and warrants to the Company that he has the legal capacity and right
to enter into this Agreement and to perform its or his respective obligations
under this Agreement. Each of the Company and Xx. Xxxxxx further represents and
warrants that its or his (as the case may be) execution, delivery and
performance of this Agreement does not and will not conflict with or violate any
contract, agreement or understanding, written or oral, to which it or he is a
party to which it or he is subject or bound.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and date first above written:
SUPERIOR GALLERIES, INC.
By: /s/ Xxxx Biberkraut /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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