EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement (this “Agreement”) is effective as of September 1 2007 (the
“Effective Date”), and is made by and between PREMIER EXHIBITIONS, INC., a Florida corporation (the
“Company”), and XXXXX XXXXXXXX, an individual residing at (the “Executive’’).
WITNESSETH:
WHEREAS, the Company desires to employ Executive in accordance with the terms and conditions
contained in this Agreement and wishes to ensure the availability of the Executive’s services to
the Company;
WHEREAS, the Executive desires to accept such employment and render his services in accordance
with the terms and conditions contained in this Agreement;
WHEREAS, the Executive and the Company desire to enter into this Agreement, which will fully
recognize the contributions of the Executive and assure harmonious management of the Company’s
affairs.
NOW, THEREFORE, in consideration of the promises and the mutual covenants set forth in this
Agreement, and intending to be legally bound, the Company and the Executive agree as follows:
1. Term of Employment
(a) Offer/Acceptance. The Company hereby offers employment to the Executive, and the
Executive hereby accepts employment subject to the terms and conditions set forth in this
Agreement. The Company represents and warrants to Executive that this Agreement and all
transactions contemplated herein has been duly approved by the Company’s Board of Directors.
(b) Term. The term of this Agreement shall commence the Effective Date and shall
remain in effect for a period of five (5) years thereafter (the “Term”).
2. Duties.
(a) General Duties. Commencing on the Effective Date, the Executive shall serve as
President and Chief Executive Officer with duties and responsibilities that are customary for such
executives and any other duties and responsibilities specifically assigned to him by the Chairman..
Subject to applicable law and shareholder approval, during the Term, Executive shall be entitled
to a seat on the Company’s Board of Directors. The Company and the Executive shall enter into an
indemnification Agreement with respect to the Executive’s services as an officer and board member.
(b) Best Efforts. The Executive covenants to use his best efforts to perform his
duties and discharge his responsibilities pursuant to this Agreement in a competent, diligent, and
faithful manner. The Executive shall devote substantially all of his business time, energy and
experience to the performance of his duties hereunder, and shall not engage in any other business
activities, as an employee, director, consultant or in any other capacity, whether or not he
receives compensation therefor, without the prior written consent of the Company’s Board of
Directors; provided, however, that the Executive may (i) manage his own passive investments (with
appropriate disclosure to the Board) and (ii) serve on civic, charitable or non-profit boards or
committees, so long as any of such activities do not interfere with the performance of the
Executive’s responsibilities to the Company under this Agreement.
1
(c) Location of Employment. The Executive shall work at the Company’s headquarters,
which is currently located at 0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000, Xxxxxxx, XX 00000. In the event
that the Company moves its headquarters to a metropolitan area without a major international
metropolitan airport, such relocation without the Executive’s consent may be deemed termination
without Cause in the Executive’s sole and unfettered discretion.
3. Compensation and Expenses.
(a) Initial Bonuses. The Company will pay the Executive an initial bonus of nine
hundred fifty-one thousand nine hundred twenty three dollars ($951,923.00), to be earned and paid
on October 15, 2007, provided the Executive is still employed with the Company on that date. The
Company will pay the Executive an additional bonus of one million dollars ($1,000,000.00), to be
earned and paid on June 1, 2008, provided the Executive is still employed with the Company on that
date.
(b) Base Salary. For the services of the Executive to be rendered by him under this
Agreement, the Company will pay the Executive an annual base salary of six hundred twenty-five
thousand dollars ($625,000.00)(the “Base Salary”), which shall be subject to increase as set forth
in subsection (c) below. The Base Salary shall be prorated over the time that the Executive
performs services under this Agreement in any calendar year during which this Agreement shall
become effective after January 1st thereof or shall terminate before December 31st thereof. The
Company shall pay the Executive the Base Salary in twenty-six (26) equal installments payable every
two weeks, in accordance with the Company’s standard payroll practices, and subject to applicable
deductions and withholdings.
(c) Base Salary Adjustment. The Base Salary shall be subject to a minimum cumulative
salary increase of five percent (5%) effective on each Anniversary Date.
(d) Performance Bonus. The Compensation Committee of the Company’s Board of Directors
(the “Compensation Committee”) will approve and notify the Executive of an incentive bonus program
on a going forward basis which takes into account the Executive’s performance and which will be
based upon reasonable and pre-determined criteria and benchmarks. In the event that the Company
and/or the Executive meet(s) these pre-determined objectives and criteria, the Executive shall be
entitled to receive an annual bonus of not less than three hundred fifty thousand dollars
($350,000.00).
(e) Expenses. In addition to any compensation received pursuant to this Section 3,
the Company shall reimburse the Executive for all reasonable, ordinary and necessary travel,
entertainment and other expenses incurred in connection with the performance of his duties under
this Agreement, provided that the Executive properly accounts for such expenses to the Company in
accordance with the Company’s policies and practices.
(i) The Company agrees to pay all of the Executive’s reasonable moving expenses (including,
without limitation, any and all extraordinary costs associated with the moving of the Executive’s
artwork) associated with his relocation to Atlanta, Georgia.
(ii) The Company agrees to pay the reasonable costs of commensurate temporary housing for the
Executive and the Executive’s spouse, upon their relocation to Atlanta, the duration of such
payments not to exceed six months.
(f) Stock Options. Subject to the approval of the Compensation Committee, on the
Effective Date or as soon as administratively practicable thereafter, the Company shall grant the
Executive a stock option to purchase 625,000 shares of the common stock of the Company (the
2
“Option”). The Option shall vest, subject to the Executive’s continued employment with the Company
through the applicable vesting date, as follows: 100,000 shares on the first anniversary of the
date of grant (each annual anniversary of a date of grant, an “Anniversary Date”); 125,000 shares
shall vest pro rata on a monthly basis until the second Anniversary Date; 130,000 shares shall
vest pro rata on a monthly basis until the third Anniversary Date; 135,000 shares shall vest pro
rata on a monthly basis until the fourth Anniversary Date; and the remaining 135,000 shares shall
vest pro rata on a monthly basis until the fifth Anniversary Date. The per-share exercise price
for the Option shall be equal to the closing bid price of such shares on the date of grant. The
Option shall have a term of ten (10) years from the date of grant. The Option shall re represented
by a stock option agreement, the terms of which shall be consistent with this subsection, and shall
contain such other terms as are consistent with the Company’s award of stock options.
(g) Restricted Stock. Subject to the approval of the Compensation Committee, on the
Effective Date or as soon as administratively practicable thereafter, the Company shall grant the
Executive 625,000 shares of the common stock of the Company, which shares shall be restricted and
subject to forfeiture (the “Restricted Stock”). The Restricted Stock shall vest, subject to the
Executive’s continued employment with the Company through the applicable vesting date, as follows:
100,000 shares on the first Anniversary Date; 125,000 shares shall vest pro rata on a monthly basis
until the second Anniversary Date; 130,000 shares shall vest pro rata on a monthly basis until the
third Anniversary Date; 135,000 shares shall vest pro rata on a monthly basis until the fourth
Anniversary Date; and the remaining 135,000 shares shall vest pro rata on a monthly basis until the
fifth Anniversary Date. The Restricted Stock shall re represented by a restricted stock agreement,
the terms of which shall be consistent with this subsection, and shall contain such other terms as
are consistent with the Company’s award of restricted stock.
(h) Registration Rights. Company and Executive shall promptly negotiate in good faith
the terms and conditions of a mutually acceptable registration rights agreement, pursuant to which
and company stock or options to purchase Company stock shall be registered for resale consistent
with the purposes and intentions of this Agreement.
4. Benefits.
(a) Personal Days. For each calendar year during the Term, the Executive shall be
entitled to six (6) paid personal days.
(b) Vacation. For each calendar year during the Term, the Executive shall be entitled
to five (5) weeks of vacation (which shall accrue and vest, except as may be hereinafter provided
to the contrary, on each January lst thereof) without loss of compensation or other benefits to
which he is entitled under this Agreement. Notwithstanding the foregoing, the Executive
acknowledges and agrees that he will be responsible for ensuring that his duties and
responsibilities as President and Chief Executive Officer during any such vacation are not
neglected. The Executive shall take his vacation at such times as the Executive may select and the
affairs of the Company or any of its subsidiaries or affiliates may permit.
(c) Employer Benefit Programs. In addition to the compensation to which the Executive
is entitled pursuant to the provisions of Section 3 above, during the Term the Executive will be
entitled to participate in any stock option plan, stock purchase plan, pension or retirement plan,
and insurance or other employee benefit plan that is maintained at that time by the Company for its
employees, including programs of life, disability, basic medical and dental, and supplemental
medical and dental insurance.
3
5. Termination.
(a) Termination for Cause. The Company may terminate the Executive’s employment
pursuant to this Agreement for “Cause” upon the occurrence of any of the following events:
(i) the Executive is convicted of a crime involving moral turpitude, dishonesty, fraud, or is
found guilty or liable for any other securities related offense; or
(ii) the Executive engages in conduct that constitutes willful gross neglect or willful gross
misconduct in carrying out his duties under this Agreement resulting, in either case, in material
economic harm to the Company (which such conduct must be proven by the Company based on
substantial, verifiable, evidence or admitted in writing by the Executive); or
(iii) the Executive fails to perform any material obligation set forth in this Agreement and
such failure is not cured by the Executive within such reasonable time as may be necessary (not
less than 30 days) after written notice to the Executive by the Company.
Upon any termination for Cause, and subject to the provisions of Section 3(a) above, the
Executive shall have no right to compensation, bonus, severance, or other reimbursement pursuant to
this Agreement or otherwise, except that the Executive shall be entitled to all guaranteed
compensation, and all stock options, restricted stock and other securities instruments and benefits
that have accrued and/or vested as of the date of termination.
(b) Death or Disability. This Agreement and the Company’s obligations hereunder will
terminate upon the death or disability of the Executive. For purposes of this Section 5(b),
“disability” shall mean that for a period of six (6) months in any twelve-month period, the
Executive is incapable of substantially fulfilling the duties set forth in this Agreement because
of physical, mental or emotional incapacity resulting from injury, sickness or disease as
determined by an independent physician mutually acceptable to the Company and the Executive. Upon
any termination of this Agreement due to death or disability, the Company will pay the Executive or
his legal representative, as the case may be, his Base Salary (which may include any accrued but
unused vacation time) at such time pursuant to Section 3(a) through the date of such termination of
employment (or, if terminated as a result of a disability, until the date upon which the disability
policy maintained pursuant to Section 4(b)(ii) begins payment of benefits), plus any other
compensation that may be due and unpaid.
(c) Voluntary Termination. Prior to any other termination of this Agreement, the
Executive may, on thirty (30) day’s prior written notice to the Company given at any time,
terminate his employment with the Company. Upon any such termination, the Company shall pay the
Executive his Base Salary at such time pursuant to Section 3(a) through the date of such
termination of employment (which shall include any vested and accrued but unused vacation time).
(d) Termination without Cause. If the Company terminates the Executive’s employment
for any reason other than “Cause” as defined in Section 5(a) above, and if Executive signs a
release of claims in a form and manner satisfactory to the Company, Executive shall be entitled to
all of the consideration listed below in this paragraph. Executive shall be entitled to a lump-sum
payment equal to one year of the Executive’s Base Salary. Such payment shall be made on the date
that is six months following the date of the termination or as soon as administratively practicable
thereafter. In addition, the Option and the Restricted Stock detailed in Sections 3(f) and 3(g)
above shall continue to vest and accrue in accordance with the schedules provided for in Sections
3(f) and 3(g) above, respectively, and the requirements thereunder of continued employment through
the dates of vesting shall be waived. For the sake of clarity, it is expressly acknowledged and
agreed that Executive shall have no duty to mitigate
4
damages with respect to any termination without Cause, and that Company shall not be entitled to
offset or credit any earnings (through cash or equity compensation) of Executive against the value
of the Options and Restricted Stock that will continue to vest following a termination without
Cause, nor shall Company be entitled to cease or terminate the vesting of such Options or
Restricted Stock in the event that Executive earns any compensation after a termination without
Cause during the aforementioned vesting schedule.
6. Restrictive Covenants.
(a) Competition with the Company. The Executive covenants and agrees that, during the
Term of this Agreement, the Executive will not, without the prior written consent of the Company,
directly or indirectly (whether as a sole proprietor, partner, stockholder, director, officer,
employee or in any other capacity as principal or agent), compete with the Company.
Notwithstanding this restriction, the Executive shall be entitled to invest in stock of other
competing public companies so long as his ownership is less than five percent (5%) of such
company’s outstanding shares.
(b) Disclosure of Confidential Information. The Executive acknowledges that during
his employment he will gain and have access to confidential information regarding the Company and
its subsidiaries and affiliates. The Executive acknowledges that such confidential information as
acquired and used by the Company or any of its subsidiaries or affiliates constitutes a special,
valuable and unique asset in which the Company or any of its subsidiaries or affiliates, as the
case may be, holds a legitimate business interest. All records, files, materials and confidential
information (the “Confidential Information”) obtained by the Executive in the course of his
employment with the Company shall be deemed confidential and proprietary and shall remain the
exclusive property of the Company or any of its subsidiaries or affiliates, as the case may be.
The Executive will not, except in connection with and as required by his performance of his duties
under this Agreement, for any reason use for his own benefit or the benefit of any person or entity
with which he may be associated, disclose any Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever without the prior
consent of the Board of Directors of the Company, unless such information previously shall have
become public knowledge through no action by or omission of the Executive. Confidential
Information shall exclude Executive’s knowledge, expertise, know-how or business acumen, as well as
his personal files whether developed or acquired prior to or during the Term.
(c) Subversion, Disruption or Interference. At no time during the term of this
Agreement shall the Executive, directly or indirectly, interfere, induce, influence, combine or
conspire with, or attempt to induce, influence, combine or conspire with, any of the employees of,
or consultants to, the Company to terminate their relationship with or compete with or ally against
the Company or any of its subsidiaries or affiliates in the business in which the Company or any of
its subsidiaries or affiliates is then engaged in.
(d) Enforcement of Restrictions. The parties hereby agree that any violation by the
Executive of the covenants contained in this Section 6 will likely cause irreparable damage to the
Company or its subsidiaries and affiliates and may, as a matter of course, be restrained by process
issued out of a court of competent jurisdiction, in addition to any other remedies provided by law.
7. Change of Control.
(a) A “ Change of Control” shall mean the occurrence of any one of the following events:
5
(i) during the term of this Agreement, a majority of the Directors on the Board as of the
Effective Date (the “Incumbent Board”) no longer comprises a majority of the Board of Directors of
the Company; provided that any person becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s shareholders, was approved by a vote of at
least three-quarters (3/4) of the directors comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person is named as a
nominee for director without objection to such nomination) shall be, for purposes of this Section
7(a)(i), considered as though such person were a member of the Incumbent Board; or
(ii) any “person,” as such term is used in Sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934, as amended (other than the Executive or entities controlled by the
Executive), becomes a “beneficial owner,” as such term is used in Rule 13d-3 promulgated under that
act, of twenty-five percent (25%) or more of the voting power of the Company; or
(iii) all or substantially all of the assets or business of the Company is disposed of
pursuant to a merger, consolidation or other transaction (unless the shareholders of the Company
immediately prior to such merger, consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the voting power of the Company, all
of the voting power or other ownership interests of the entity or entities, if any, that succeed to
the business of the Company);
(b) The Company and the Executive hereby agree that if the Executive is in the employ of the
Company on the date on which a Change of Control occurs (the “Change of Control Date”), the Company
will continue to employ the Executive and the Executive will remain in the employ of the Company
for the period commencing on the Change of Control Date and ending on the expiration of the Term,
to exercise such authority and perform such executive duties as are commensurate with the authority
being exercised and duties being performed by the Executive immediately prior to the Change of
Control Date.
(c) During the remaining Term after the Change of Control Date, the Company will (i) continue
to honor the terms of this Agreement, including the Base Salary and other compensation set forth in
Section 3 above, (ii) continue employee benefits as set forth in Section 4 above at levels in
effect on the Change of Control Date; and (iii) immediately vest and accrue all outstanding stock
options, restricted stock and other securities instruments as detailed in Section 3 above (all
subject to such reductions as may be required to maintain such plans in compliance with applicable
federal law regulating employee benefits in the wake of a change of control).
(d) If during the remaining Term on or after the Change of Control Date there shall have
occurred a material reduction in the Executive’s compensation or employment related benefits, a
material change in the Executive’s status, working conditions or management responsibilities, or a
material change in the business objectives or policies of the Company, and the Executive
voluntarily terminates employment within ninety (90) days of any such occurrence, or the last in a
series of occurrences, then the Executive shall be entitled to receive, subject to the provisions
of subsection (e) below, a lump-sum cash payment equal to 299% of the Executive’s Base Salary in
effect on the Change of Control Date, which payment shall be made on the date that is six months
following the date of the termination or as soon as administratively practicable thereafter.
(e) The amounts payable to the Executive under any other compensation arrangement maintained
by the Company that became payable after payment of the lump-sum provided for in subsection (d)
above upon or as a result of the exercise by the Executive of rights which are
6
contingent on the Change of Control (and would be considered a “parachute payment” under Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder),
shall be reduced to the extent necessary so that such amounts, when added to such lump-sum and such
other amounts deemed “parachute payments” for purposes of Section 280G of the Code, do not exceed
299% of the Executive’s “average annual compensation” (within the meaning of Section 280G of the
Code) for the five-year period preceding the date of the Change of Control.
8. Assignability. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the Company, provided
that such successor or assign shall acquire all or substantially all of the assets and business of
the Company.
9. Severability. If any provision of this Agreement is deemed to be invalid or
unenforceable or is prohibited by the laws of the state or jurisdiction where it is to be
performed, this Agreement shall be considered divisible as to such provision and such provision
shall be inoperative in such state or jurisdiction and shall not be part of the consideration
moving from either of the parties to the other. The remaining provisions of this Agreement shall be
valid and binding.
10. Notice. Notices given pursuant to the provisions of this Agreement shall be sent
by certified mail, postage prepaid, or by overnight courier to the following addresses:
| To the Company: | 0000 Xxxxxxxxx Xxxx, XX Xxxxx 0000 Xxxxxxx, XX 00000 Attention: Xxxxx Xxxxxxx, Esq. |
|||
| To the Executive: | c/o Goldring Hertz and Xxxxxxxxxxxx, LLP 000 Xxxxx Xxxxxxx Xxxxx Xxxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxx, Esq |
Either party may, from time to time, designate any other address to which any such notice to
it or him shall be sent. Any such notice shall be deemed to have been delivered upon the earlier
of actual receipt or four days after deposit in the mail, if by certified mail.
11. Indemnification. The Company and the Executive acknowledge that the
Executive’s services as an officer of the Company exposes the Executive to risks of personal
liability arising from, and pertaining to, the Executive’s participation in the management of the
Company. The Company shall defend, indemnify and hold harmless the Executive from any actual cost,
loss, damages, attorneys’ fees, or liability suffered or incurred by the Executive arising out of,
or connected to, the Executive’s services as an officer of the Company or any of its current,
former, or future subsidiaries to the fullest extent allowed by law. The Company will not have any
obligation to the Executive under this Section for any loss suffered if the Executive voluntarily
pays, settles, compromises, confesses judgment for, or admits liability with respect to without the
approval of the Company. Within thirty (30) days after the Executive receives notice of any claim
or action which may give rise to the application of this section, the Executive shall notify the
Company or its counsel in writing of the claim or action with a copy thereof. The Executive’s
failure to timely notify the Company of the claim or action will relieve the Company from any
obligation to the Executive under this section. The Executive will reasonably assist the Company
in the defense of any action. The Company will not indemnify Executive for any intentional acts or
7
misconduct engaged in by Executive, including, but not limited to, any acts which could result in
cause termination pursuant to Section 5(a) above.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida and the sole and exclusive venue for any
litigation arising out of this contract will be the circuit court in Hillsborough County, Florida.
(b) Waiver/Amendment. The waiver by any party to this Agreement of a breach of any
provision hereof by any other party shall not be construed as a waiver of any subsequent breach by
any party. No provision of this Agreement may be terminated, amended, supplemented, waived or
modified other than by an instrument in writing signed by the party against whom the enforcement of
the termination, amendment, supplement, waiver or modification is sought.
(c) Entire Agreement. This Agreement represents the entire agreement between the
parties with respect to the subject matter hereof and replaces and supersedes any prior agreements
or understandings.
(d) Facsimiles/PDF’s/Counterparts. This Agreement may be executed in counterparts,
all of which shall constitute one and the same instrument. Facsimile copies and electronic
Portable Document Format files of executed signature pages will be deemed original for all
purposes.
(e) Section 409A of the Code. This Agreement and the benefits provided hereunder are
intended to be exempt from or to comply with the requirements of Section 409A of the Code, and
shall be interpreted and administered consistent with such intent. To the extent required for
compliance with the requirements of Section 409A of the Code, references in this Agreement to a
termination of employment shall mean a “separation of service” with the meaning of Section 409A of
the Code.
IN WITNESS WHEREOF, the Company and the Executive have duly executed this Agreement as of the
date first above written.
| COMPANY: PREMIER EXHIBITIONS, INC. |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Its: Chairman | ||||
| EXECUTIVE: |
||||
| /s/ Xxxxx Xxxxxxxx | ||||
| Xxxxx Xxxxxxxx | ||||
8
