Exhibit 10.1
EXECUTION VERSION
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered into
as of the 4 th day of June, 2009 (the
“Commencement Date”) by and between Carmike Cinemas,
Inc. (“Carmike”) and S. David Passman III
(“Executive”).
R E C I T A L S
WHEREAS , Carmike desires to employ Executive and to
have the benefit of his skills and services, and Executive desires
to accept employment with Carmike, on the terms and conditions set
forth herein.
NOW, THEREFORE
, in consideration of the mutual
promises, terms, covenants, and conditions set forth herein, and
the performance of each, the parties hereto, intending to be
legally bound, agree as follows:
AGREEMENTS
§ 1.
Term
The term of this Agreement shall
begin on the Commencement Date and shall end on June 4, 2012
(the “ Initial Term ”), unless extended or
earlier terminated in accordance with the terms of this Agreement
(the Initial Term and any extension or earlier termination thereof
is referred to as the “ Term ”). If not earlier
terminated, the Term automatically shall be extended for one
additional year on the second anniversary of the Commencement Date
and for one additional year on each anniversary of the Commencement
Date thereafter unless Carmike, at least ninety (90) days
before any such anniversary date, gives written notice to Executive
that there will be no such extension. Should the Term expire,
Executive shall be employed at-will.
§ 2. Position and
Duties
Carmike hereby employs Executive as
its President and Chief Executive Officer. Executive shall have
such responsibilities, duties, and authority as assigned to him
from time to time by Carmike’s Board of Directors (the
“ Board ”). Executive shall fulfill his duties
and responsibilities in a reasonable and appropriate manner and in
compliance with Carmike’s policies and practices and the laws
and regulations that apply to Carmike’s operation and
administration. During the Term, Executive shall devote his full
business time and attention to the business and affairs of Carmike
and shall not be engaged in, or employed by or provide services to,
any other business enterprise without the written approval of the
Board; provided, however , that nothing herein shall be
construed as precluding Executive from devoting a reasonable amount
of time to civic, charitable, or similar activities, so long as
such activities do not interfere with the performance of
Executive’s duties hereunder.
§ 3.
Compensation
For all services rendered by
Executive, Carmike shall compensate Executive as
follows:
3.1 Base Salary . As of the
Commencement Date, the gross annual salary payable to Executive
shall be Six Hundred Thirty Thousand Dollars ($630,000.00) per year
payable on a regular basis in accordance with Carmike’s
standard payroll policies and procedures (the “Base
Salary”). The Base Salary shall be reviewed and subject to
adjustment by the Compensation and Nominating Committee of the
Board (the “Committee”) on an annual basis.
3.2 Perquisites, Benefits, and
Other Compensation . Effective immediately on the Commencement
Date, Executive shall be eligible for the same perquisites and
benefits as are made available to other senior executive employees
of Carmike (including, without limitation, mutually agreed upon
club memberships in Columbus, Georgia, and participation in
Carmike’s deferred compensation plan), as well as such other
perquisites or benefits as may be specified from time to time by
the Board or the Committee. Carmike reserves the right at any time
and from time to time to change, amend, or terminate any such
perquisites and benefits as Carmike in its discretion deems
appropriate or necessary under the circumstances.
3.3 Annual Bonus . Executive
shall be eligible for an annual bonus each calendar year during the
Term, starting with the 2009 calendar year (January
1-December 31, 2009) in an amount equal to 0%-150% of Base
Salary, with a target bonus equal to 50% of Base Salary
(“Annual Bonus”). The Annual Bonus shall be determined
by the Committee based upon Executive’s achievement of
performance goals established by the Committee (following
consultation with Executive), and shall be at all times subject to
the provisions of the Carmike Cinemas, Inc. Annual Executive Bonus
Program (as amended from time to time) (“Bonus
Program”). For 2009, there shall be no pro-ration of the
Annual Bonus based upon Executive’s being employed for only a
portion of the calendar year.
3.4 Stock Option Grant . On
the Commencement Date, the Committee shall grant Executive options
to purchase 200,000 shares of Carmike’s common stock, at a
strike price equal to the fair market value of one share of Carmike
common stock as of the date of grant, subject to the terms and
conditions of the Carmike Cinemas, Inc. 2004 Incentive Stock Plan
(as amended and restated effective as of May 22, 2008), and
Carmike’s standard Stock Option Agreement. The stock options
granted pursuant to this Agreement shall vest as follows: 66,667
options shall vest on the first anniversary of the Commencement
Date, 66,667 options shall vest on the second anniversary of the
Commencement Date, and 66,666 options shall vest on the third
anniversary of the Commencement Date; provided, however ,
that Executive must have remained continuously employed by Carmike
through such dates for the options to vest as described
herein.
3.5 Restricted Stock Grant .
On the Commencement Date, the Committee shall grant Executive
50,000 shares of restricted common stock, subject to the terms and
conditions of the Carmike Cinemas, Inc. 2004 Incentive Stock Plan
(as amended and restated effective as of May 22, 2008), and
Carmike’s standard Restricted Stock Agreement. The restricted
stock granted pursuant to this Agreement shall vest as follows:
16,667 shares shall vest on the first anniversary of the
Commencement Date, 16,667 shares shall vest on the second
anniversary of the Commencement Date, and 16,666 shares shall vest
on the third anniversary of the Commencement Date; provided,
however , that Executive must have remained continuously
employed by Carmike through such dates for the shares to vest as
described herein.
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3.6 Vacation . Executive
shall be eligible for four (4) weeks of vacation per year,
subject to Carmike’s vacation practices and procedures, as
amended from time to time, pro-rated for 2009.
3.7 Withholdings . All
compensation and benefits payable to Executive pursuant to this
Agreement shall be subject to withholdings for taxes and other
amounts required by law to be withheld.
§ 4. Expense
Reimbursement
4.1 Reimbursement . Carmike
shall reimburse Executive for (or, at Carmike’s option, pay)
all reasonable and proper business travel and other out-of-pocket
expenses incurred by Executive in the performance of his duties and
responsibilities to Carmike during the Term. All reimbursable
expenses shall be appropriately documented in reasonable detail by
Executive upon submission of any request for reimbursement, and in
a format and manner consistent with Carmike’s expense
reporting and reimbursement policies. All approved expenses shall
be paid within a reasonable time (not later than the last day of
the calendar year following the calendar year in which an expense
was incurred following the presentation of appropriate invoices to
Carmike). Any expenses paid during any calendar year will not
affect the expenses paid by Carmike in another calendar year.
Executive’s right to reimbursement of expenses is not subject
to liquidation or exchange for another benefit.
4.2 Automobile Allowance .
Executive shall be entitled to reimbursement for automobile
expenses, subject to Carmike’s normal automobile allowance
policies and procedures for senior executives, as amended from time
to time.
4.3 Apartment Allowance .
Executive shall be entitled to reimbursement for reasonable
expenses incurred to lease an apartment in Columbus, Georgia, up
to, but not exceeding $3,500 per calendar month, until Executive
permanently relocates his residence to Columbus, Georgia (or its
immediate vicinity). If any expense reimbursed pursuant to this
section § 4.3 is considered taxable income to Executive,
Carmike shall compensate Executive for any income taxes owed by
Executive related to such reimbursement, such that after such
income taxes have been paid, the apartment expenses are fully
reimbursed by Carmike.
§ 5. Place of
Performance
Executive shall carry out his duties
and responsibilities principally in and from Carmike’s
headquarters, which currently is in Columbus, Georgia. Executive
acknowledges and agrees his position may involve business travel
and/or work from temporary work site locations as necessary and
appropriate.
§ 6.
Definitions
6.1 Cause . The term
“Cause” for purposes of this Agreement:
(a) shall before the beginning or
after the end of Executive’s Protection Period
mean:
(1) Executive is convicted of,
pleads guilty to, or confesses or otherwise admits to any felony or
any act of fraud, misappropriation or embezzlement or Executive
otherwise engages in a fraudulent act or course of
conduct;
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(2) There is any act or omission by
Executive involving malfeasance or negligence in the performance of
Executive’s duties and responsibilities for Carmike, or the
exercise of Executive’s powers as an executive of Carmike,
where such act or omission is reasonably likely to materially and
adversely affect Carmike’s business;
(3) (A) Executive breaches any of
the provisions of § 8 or (B) Executive violates any
provision of any code of conduct adopted by Carmike which applies
to Executive and any other Carmike employee if the consequence to
such violation for any employee subject to such code of conduct
ordinarily would be a termination of his or her employment by
Carmike; and
(4) any determination that
“Cause” exists under this § 6.1(a) shall be
made in good faith by the affirmative vote of at least a majority
of the members of the Board then in office at a meeting called and
held for purposes of making such determination.
(b) shall during Executive’s
Protection Period mean:
(1) Executive is convicted of,
pleads guilty to, or confesses or otherwise admits to any felony or
any act of fraud, misappropriation or embezzlement or Executive
otherwise engages in a fraudulent act or course of conduct which
has a material and adverse effect on Carmike;
(2) There is any act or omission by
Executive involving malfeasance or gross negligence in the
performance of Executive’s duties and responsibilities for
Carmike, or the exercise of Executive’s powers as an
executive of Carmike, where such act or omission actually has a
material and adverse effect on Carmike’s business;
(3) (A) Executive breaches any of
the provisions of § 8 and such breach has a material and
adverse effect on Carmike or (B) Executive violates any
provision of any code of conduct adopted by Carmike which applies
to Executive and any other Carmike employee if the consequence to
such violation for any employee subject to such code of conduct
clearly would have been a termination of his or her employment by
Carmike; provided, however,
(4) No such act or omission or event
shall be treated as “Cause” under this Agreement unless
(A) Executive has been provided a detailed, written statement
of the basis for Carmike’s belief such act or omission or
event constitutes “Cause” and an opportunity to meet
with the Board (together with
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Executive’s counsel if
Executive chooses to have Executive’s counsel present at such
meeting) after Executive has had a reasonable period in which to
review such statement and, if the allegation is under
§ 6.1(b)(2) or § 6.1(b)(3), has had at least a
thirty (30) day period to take corrective action and
(B) the Board after such meeting (if Executive meets with the
Board) and after the end of such thirty (30) day correction
period (if applicable) determines reasonably and in good faith and
by the affirmative vote of at least two thirds of the members of
the Board then in office at a meeting called and held for such
purpose that “Cause” does exist under this
Agreement.
6.2 Change in Control . The
term “Change in Control” for purposes of this Agreement
shall mean:
(a) a “change in
control” of Carmike of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A for a proxy
statement filed under Section 14(a) of the Exchange Act as in
effect on the date of this Agreement;
(b) a “person” (as that
term is used in Section 14(d)(2) of the Exchange Act) becomes
the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) directly or indirectly of securities representing 45% or more
of the combined voting power for election of directors of the then
outstanding securities of Carmike;
(c) the individuals who at the
beginning of any period of two consecutive years or less (starting
on or after the date of this Agreement) constitute Carmike’s
Board cease for any reason during such period to constitute at
least a majority of Carmike’s Board, unless the election or
nomination for election of each new member of the Board was
approved in advance by vote of at least two-thirds of the members
of such Board then still in office who were members of such Board
at the beginning of such period;
(d) the shareholders of Carmike
approve any reorganization, merger, consolidation or share exchange
as a result of which the common stock of Carmike shall be changed,
converted or exchanged into or for securities of another
organization or any dissolution or liquidation of Carmike or any
sale or the disposition of 50% or more of the assets or business of
Carmike; or
(e) the shareholders of Carmike
approve any reorganization, merger, consolidation or share exchange
with another corporation unless (i) the persons who were the
beneficial owners of the outstanding shares of the common stock of
Carmike immediately before the consummation of such transaction
beneficially own more than 60% of the outstanding shares of the
common stock of the successor or survivor corporation in such
transaction immediately following the consummation of such
transaction and (ii) the number of shares of the common stock
of such successor or survivor corporation beneficially owned by the
persons described in § 6.2(e)(i) immediately following
the consummation of such transaction is beneficially owned by each
such person in substantially the same proportion that each such
person had beneficially owned shares of Carmike common stock
immediately before the
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consummation of such transaction,
provided (iii) the percentage described in
§ 6.2(e)(i) of the beneficially owned shares of the
successor or survivor corporation and the number described in
§ 6.2 (e)(ii) of the beneficially owned shares of the
successor or survivor corporation shall be determined exclusively
by reference to the shares of the successor or survivor corporation
which result from the beneficial ownership of shares of common
stock of Carmike by the persons described in § 6.2(e)(i)
immediately before the consummation of such transaction.
6.3 Code . The term
“Code” for purposes of this Agreement shall mean the
Internal Revenue Code of 1986, as amended.
6.4 Confidential or Proprietary
Information . The term “Confidential or Proprietary
Information” for purposes of this Agreement shall mean any
secret, confidential, or proprietary information of Carmike that
does not constitute a Trade Secret, and which has not become
generally available to the public by the act of one who has the
right to disclose such information without violating any right of
Carmike.
6.5 Disability . The term
“Disability” for purposes of this Agreement means that
Executive is unable as a result of a mental or physical condition
or illness to perform the essential functions of Executive’s
job at Carmike even with reasonable accommodation for any
consecutive 180-day period, all as reasonably determined by the
Board.
6.6 Change Effective Date .
The term “Change Effective Date” for purposes of this
Agreement shall mean the earlier of (1) the date which
includes the “closing” of the transaction which makes a
Change in Control effective if the Change in Control is made
effective through a transaction which has a “closing”
or (2) the date a Change in Control is first reportable in
accordance with applicable law as effective to the Securities and
Exchange Commission if the Change in Control is made effective
other than through a transaction which has a
“closing”.
6.7 Exchange Act . The term
“Exchange Act” for purposes of this Agreement shall
mean the Securities Exchange Act of 1934, as amended.
6.8 Good Reason . The term
“Good Reason” for purposes of this Agreement shall
mean:
(a) there is a reduction during
Executive’s Protection Period in Executive’s base
salary from Carmike or there is a reduction during
Executive’s Protection Period in Executive’s combined
opportunity to receive any incentive compensation and bonuses from
Carmike without Executive’s express written
consent;
(b) there is a reduction during
Executive’s Protection Period in the scope, i
