EMPLOYMENT AGREEMENT
This Agreement made effective as of January 27, 2006, ("Agreement") and
is made by and between PREMIER EXHIBITIONS, INC., a Florida corporation
("Company"), and XXXXX XXXXXXX, a resident of the State of Virginia
("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/Effective Date. 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.
(b) Term. The term of this Agreement shall commence on the
date first indicated above ("Effective Date") and shall remain in effect for a
period of three (3) years thereafter ("Term").
2. Duties.
a. General Duties. The Executive shall serve as Vice President and Chief Legal
Counsel of the Company with duties and responsibilities that are customary for
such executives and any other duties and responsibilities specifically assigned
to him by the Board of Directors of the Company.
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.
c. Location of Employment: The Executive shall perform his duties hereunder at
his office at 000 Xxxxxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxxx, Xx. 00000. The
Executive shall travel to Premier's headquarters at 0000 Xxxxxxxxx Xxxx, XX,
Xxxxx 0000, Xxxxxxx, XX 00000 when necessary to perform his duties and
obligations herein.
3. Compensation and Expenses.
(a) 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 $173,250 (the "Base Salary") which shall be subject to
increase as set forth in subsection (b) below.
The Company shall pay the Executive his Base Salary in equal
installments no less than semi-monthly.
(b) Base Salary Adjustment. The Base Salary shall be subject
to an percentage increase on each anniversary of the Effective Date during the
Term, such increase to be determined at Premier's discretion.
(c) Bonus. At the discretion of the Company, Executive shall
be entitled to receive quarterly, semi-annual or annual cash bonuses and shall
be entitled to additional stock option and/or stock grants.
(d) 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 office 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.
(g) Stock Options. In addition to the stock options already
granted to the Executive, the Executive or his assigns is entitled to options to
purchase 100,000 shares of the common stock of Company. Options to acquire
100,000 shares of common stock shall vest over a twenty-four month period. The
exercise price for all options granted to Executive hereunder shall be $3.65 per
common share, which is the closing bid price of such shares as of January 27,
2006. The options shall have an exercise period of ten (10) years from the date
of this Agreement and shall contain a cashless exercise provision.
4. Benefits.
(a) Vacation. For each calendar year during the Term, the Executive
shall be entitled to reasonable vacation time without loss of
compensation or other benefits to which he is entitled under this
Agreement. 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.
(b) Health Insurance. Executive shall be entitled to a payment of
$125/month as compensation for his "concierge" service medical
fee. Such payment shall allow for normal increases over time as
necessary to cover the cost of the fee.
In the event that the health insurance coverage currently
extended to Executive and his family through Norfolk Southern
Corp. is terminated, the Company shall pay the annual premium for
health insurance for the Executive and his family through the
term of this agreement. The Executive shall have the option, in
his discretion, to choose his health insurance plan.
(b) 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.
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 any other crime relating to the Company; or
(ii) the Executive engages in conduct that constitutes willful gross
neglect or willful gross misconduct in carrying out his duties
under this Employment Agreement, resulting, in either case, in
material economic harm to the Company; 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 thirty days after written notice to Executive by Company.
Upon any termination for cause, the Executive shall have no
right to compensation, bonus, severance, or other reimbursement
pursuant to this Agreement or otherwise, except that Executive shall be
entitled to all compensation and benefits that have accrued 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
Executive's employment for any reason other than "Cause" as defined in Section
5(a) above, Executive shall be entitled to an immediate lump sum payment equal
to not less than 100% of the Executive's Base Salary until the Executive's first
anniversary date, 200% of the Executive's Base Salary on or after the
Executive's first anniversary date, and 299% of the Executive's Base Salary on
or after the Executive's second anniversary date.
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, Executive shall be entitled to invest in stock of other
competing public companies so long as his ownership is less than 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.
(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 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:
(i) during the term of this Agreement, three of the five members of
the Board of Directors, a majority as of the Effective Date, no
longer comprise a majority of the Board of Directors of the
Company; 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 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 Executive hereby agree that if 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. If after a Change
of Control, the Executive is requested, and, in his sole and absolute
discretion, consents to change his principal business location, the Company will
reimburse the Executive for his relocation expenses, including without
limitation, moving expenses, temporary living and travel expenses for a time
while arranging to move his residence to the changed location, closing costs, if
any, associated with the sale of his existing residence and the purchase of a
replacement residence at the changed location, plus an additional amount
representing a gross-up of any state or federal taxes payable by Executive as a
result of any such reimbursements. If the Executive shall not consent to change
his business location, the Executive may continue to provide the services
required of him hereunder in Virginia Beach, Virginia and the Company shall
continue to pay office expenses for the Executive at that location commensurate
with the Company's office 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 Base Salary and other compensation set forth in Section 3 hereof, and
(ii) continue employee benefits as set forth in Section 4 hereof at levels in
effect on the Change of Control Date (but subject to such reductions as may be
required to maintain such plans in compliance with applicable federal law
regulating employee benefits).
(d) If during the remaining Term on or after the Change of
Control Date there shall have occurred a material reduction in Executive's
compensation or employment related benefits, a material change in 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 subparagraphs (e) and (f)
below, a lump-sum cash payment equal to 299% of Executive's current Base Salary
in addition to any other compensation that may be due and owing to the Executive
under Section 3 hereof.
(e) The amounts payable to the Executive under any other
compensation arrangement maintained by the Company which became payable after
payment of the lump-sum provided for in paragraph (d), upon or as a result of
the exercise by Executive of rights which are contingent on a Change of Control
(and would be considered a "parachute payment" under Internal Revenue Code 280G
and regulations thereunder), shall be reduced to the extent necessary so that
such amounts, when added to such lump-sum, do not exceed 299% of the Executive's
Base Salary (as computed in accordance with provisions of the Internal Revenue
Code of 1986, as amended and any regulations promulgated thereunder) for
determining whether the Executive has received an excess parachute payment. Any
such excess amount shall be deferred and paid in the next tax year.
(f) In the event of a proposed Change in Control, the Company
will allow the Executive to participate in all meetings and negotiations related
thereto.
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. The Executive
may assign his rights to compensation under this Agreement to a corporation,
partnership, or trust controlled by the Executive.
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, or
telecopier to the following addresses:
To the Company: 0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, XX 00000
To the Executive: 0000 Xxxxxx Xxxx
Xxxxxxxx Xxxxx, Xx. 00000
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 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
state courts of Hillsborough County, Florida.
(b) No Xxxxxxx Xxxxxxx. Executive acknowledges that he will come into
possession of material non-public information about the Company. Accordingly, he
will not trade (or cause or encourage in any fashion any third party to trade)
in any securities of the Company while in possession of any such non-public
information regarding the Company and shall further abide by all black-out
periods, window periods, and other sales restrictions that the Company may
reasonably impose.
(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) Counterparts. This Agreement may be executed in counterparts, all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have duly executed this
Employment Agreement as of the date first above written.
COMPANY:
PREMIER EXHIBITIONS, INC.
By:
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Its:
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EXECUTIVE:
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