Exhibit 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into as the 10th day of
November, 2008, by and among Wilhelmina International
Ltd., a New York corporation (the “Company”), New
Century Equity Holdings, Inc., a Delaware corporation (the
“Parent”), and Sean Patterson (the
“Employee”), an individual.
Recitals:
WHEREAS , the Employee is currently employed pursuant to
that certain employment agreement dated August 1, 2003, including
Exhibits A and B thereto (the “2003 Agreement”), by and
among Employee, Wilhelmina Models, Inc., a New York corporation,
Wilhelmina Artist Management, LLC, a New York limited liability
company, and the Company (collectively, the “Wilhelmina
Entities”);
WHEREAS , on August 25, 2008, the Wilhelmina Entities,
certain related entities, their equity holders and Parent entered
into an Agreement covering the merger (the “Merger”) of
a wholly-owned subsidiary of Parent with the Company and the
purchase (the “Purchase”) by the Parent of the
Wilhelmina Entities and certain other related entities (the
“Purchase Agreement”);
WHEREAS , Parent and Company wish that the Employee be
retained as President of the Company in the event of the
consummation of the Merger and the Purchase, and the Employee
desires to be so retained;
WHEREAS , the parties desire, and have agreed, to set
forth in this Agreement their entire agreement and understanding
with respect to the Employee’s employment by the Company, to
become effective in the event of the consummation of the Merger and
the Purchase and on the date of the consummation of the Merger and
the Purchase (the “Effective Date”); and
NOW, THEREFORE , in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Parent, the Company
and the Employee agree as follows:
Agreement:
1.
Appointment and Duties . The Company employs the
Employee on the terms and conditions set forth herein, and the
Employee accepts such employment. The Employee shall serve as
President of the Company, and shall perform all duties and
functions reasonably appurtenant to such position and as directed
by the Chief Executive Officer, President or Board of Directors of
the Parent. The Parent, acting through its Chief
Executive Officer, President or Board of Directors, may from time
to time redefine the title and duties of the Employee in
furtherance of the business of the Company and/or its affiliated
companies. The Employee shall perform his duties in accordance
with, and shall at all times strictly adhere to, all rules,
regulations and policies as may be adopted from time to time by the
Company and/or Parent, provided such rules, regulations and
policies do not violate applicable law.
2.
Full Time Employment . The Employee agrees that,
during the term of his employment by the Company, he will devote
his full working time, attention and energies to the diligent
performance of his duties as an employee of the Company consistent
with past practice. The Employee shall not, without the
prior written consent of the Parent, directly or indirectly, at any
time during the term of his employment with the Company: (a) accept
employment with or render services of a business, professional or
commercial nature to any other individual, corporation,
partnership, governmental authority or other entity; (b) engage in
any business venture or business activity which the Company may in
good faith consider to be competitive with or adverse to the
business of the Company, whether alone, as a partner, or as an
officer, director, employee or shareholder or otherwise (except
that the ownership of not more than five per cent of the stock or
other equity interest of any publicly traded corporation or other
entity shall not be deemed a violation hereof); or (c) engage in
any venture or activity which the Company may in good faith
consider to interfere with Employee’s performance of his
duties hereunder; provided, however, that Employee may, as a
passive investor, invest his own assets (subject to the limitation
contained in clause (b) above) and engage in civic, community and
religious activities provided such activities do not interfere with
his duties as an employee of the Company.
3.
Compensation . All compensation shall be payable
to the Employee in accordance with the Company’s customary
payroll practices and shall be subject to withholding for federal
and state income taxes, social security payments and similar
deductions, as required by applicable law.
a.
Salary . The Employee shall receive a salary of
$475,000 per year. Such salary shall be reviewed annually and may
be increased, but not decreased, in the sole discretion of the
Board of Directors of the Parent.
b.
Bonus . The Employee shall be entitled to an
annual bonus equal in amount to 7.5% of the excess of actual
calendar year (i.e., full year 2009, 2010 or 2011, as applicable)
EBITDA (earnings before interest, taxes, depreciation and
amortization) of the Wilhelmina Entities over
$4,000,000. The timing of the payment of the foregoing
bonus shall be consistent with the Company’s customary
practices with respect to the timing of bonus payments to its
employees, provided that payment of such bonus shall be made no
earlier than following final determination of actual calendar year
EBITDA based on the Company’s annual audit. The parties
understand and agree that Employee’s 2008 year bonus will be
in accordance with the terms of the 2003 Agreement.
4.
Other Programs and Benefits . The Employee shall
be entitled to participate in other programs and benefits provided
by the Company (including, without limitation, group insurance
plans and profit sharing plans) to the same extent as other
employees of the Company similarly situated. Without limiting the
generality of the foregoing, the Company shall provide health
insurance benefits for the Employee comparable to those provided as
of the date hereof. The Company shall reimburse Employee for or, as
permitted by applicable law, advance to the Employee, reasonable
business expenses incurred by Employee in the performance of his
duties pursuant to this Agreement consistent with past
practices. Such reimbursement or advance shall be made
upon receipt of expense or advance report forms, in accordance with
the Company’s standard policy. Employee shall be entitled to
five (5) weeks vacation per year.
5.
Term . Except as provided in Section 6, this
Agreement shall commence on the Effective Date and shall continue
until the third anniversary of the Effective Date and thereafter at
the will of the parties (the three year period following the
Effective Date, plus any extension thereafter, the
“Term”). The provisions of Section 7, 8, and 11 shall
survive any expiration of this Agreement at the end of
Term.
6.
Termination . In the event the employment of
Employee is terminated prior to the expiration of the Term either
by (i) the Company with Cause (as defined below) or without Cause
or (ii) the Employee for Good Reason (as defined below) or without
Good Reason, all provisions of this Agreement (other than the
provisions of Sections 7, 8 and 11 and this Section 6) shall
thereupon terminate; provided that, in the event that the Employee
is terminated by the Company without Cause or is terminated by the
Employee for Good Reason, the Employee shall continue to receive
the compensation provided for in Section 3(a) for any remaining
portion of the Term. The foregoing payments provided herein are in
lieu of any and all other benefits or claims which the Employee
might assert against the Company, and may be conditioned, at the
Company’s option, upon the Employee’s execution of a
full and complete release of the Company from any and all
liabilities arising in connection with this employment by the
Company or the termination thereof, other than the Company’s
applicable obligation to make the payments set forth in Section
3(a), to the extent provided above, and other than the
Company’s and the Parent’s obligation to indemnify,
defend and hold harmless the Employee in accordance with the
certificate of incorporation and by-laws of such entities and
applicable law. Such payments shall be made to the
Employee in accordance with the Company’s customary payroll
practices and shall be subject to withholding for federal and state
income taxes, social security payments and similar deductions, as
required by applicable law. Termination of employment
pursuant to the circumstances described in the first sentence of
this Section 6 shall be effective only upon valid written notice of
such by the Company or the Employee. All provisions of
this Agreement (other than the provisions of Sections 7, 8 and 11
and this Section 6) shall also terminate upon the death of the
Employee, Employee’s resignation without Good Reason or, at
the Company’s option, upon the disability of the Employee
which disability prevents Employee from fully performing his duties
under this Agreement on a full time basis for any ninety (90) days
during a twelve (12) month period.
For purposes of
this Agreement: (a) “Cause” shall mean any of the
following, as determined in the good faith judgment of the Board of
Directors of the Parent: (i) the Employee’s conviction of, or
the entry of a pleading of guilty or nolo contendere with respect
to, any felony involving moral turpitude or otherwise materially
and adversely affecting his ability to perform effectively
hereunder, (ii) the violation by the Employee of any of the
provisions of Section 7 hereof which has or is likely to have an
adverse effect on the Company or the Parent, (iii) the engagement
by the Employee in any act of fraud or dishonesty resulting or
intended to result in gain or personal enrichment of the Employee
at the expense of the Company or any of its subsidiaries or
affiliates or (iv) the failure or refusal by the Employee to
perform any of his other material duties or obligations hereunder
(other than any such failure resulting from the Employee’s
incapacity due to physical or mental disability or illness), which
failure is not cured within twenty (20) days after a written demand
for performance is delivered or sent to the Employee specifically
identifying the manner in which the Employee has not performed; and
(b) “Good Reason” shall mean (i) reduction in the
Employee’s Base Salary during the term hereof; (ii) the
Company requiring the Employee to be based outside of New York, New
York or (iii) the Company’s material breach of any of the
provisions of this Agreement which material breach is not cured
within twenty (20) days after a written
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