EMPLOYMENT
AGREEMENT
This
Employment Agreement (the "Agreement"), entered into effective as of the 30th
day of May, 2007, by and between
RICK'S
CABARET INTERNATIONAL, INC.
,
a Texas
corporation (the "Company"), and
PHIL
MARSHALL
("Executive").
W
I T N E S S E T H:
WHEREAS,
Company
desires to employ Executive as provided herein; and
WHEREAS,
Executive desires to accept such employment.
NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.
Employment.
Company
hereby employs Executive and Executive hereby accepts employment with Company
upon the terms and conditions hereinafter set forth.
2.
Duties.
Subject
to the power of the Board of Directors of Company to elect and remove officers,
Executive will serve the Company as its Chief Financial Officer and will
faithfully and diligently perform the services and functions relating to such
office or otherwise reasonably incident to such office, provided that all such
services and functions will be reasonable and within Executive's area of
expertise. Executive will, during the term of this Agreement (or any extension
thereof), devote his full business time, attention and skills and best efforts
to the promotion of the business of Company. The foregoing will not be construed
as preventing Executive from making investments in other businesses or
enterprises provided that (a) Executive agrees not to become engaged in any
other business activity that interferes with his ability to discharge his duties
and responsibilities to Company and (b) Executive does not violate any other
provision of this Agreement.
3.
Term.
Subject
to the terms and conditions hereof, the term of employment of Executive will
commence as of the date hereof (the "Commencement Date") and will end on that
date in the year 2009, unless earlier terminated by either party pursuant to
the
terms hereof. The term of this Agreement is referred to herein as the
"Term."
4.
Compensation
and Benefits During the Employment Term.
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(a)
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Salary
.
Commencing upon the date of this Agreement, Executive will be paid
an
annual base salary of $175,000, payable bi-weekly (the "Salary").
At any
time and from time to time the Salary may be increased for the remaining
portion of the term if so determined by the Board of Directors of
Company
after a review of Executive's performance of his duties
hereunder.
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(b)
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Bonus
.
As further compensation, Executive will be eligible for bonuses as
determined from time to time by the Board of
Directors.
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Employment
Agreement - Page 1
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(c)
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Expenses.
Upon submission of a detailed statement and reasonable documentation,
Company will reimburse Executive in the same manner as other executive
officers for all reasonable and necessary or appropriate out-of-pocket
travel and other expenses incurred by Executive in rendering services
required under this Agreement.
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(i)
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Medical,
Dental and Vision Benefits.
During this Agreement, Executive and his dependents will be entitled
to
receive such group medical, dental and vision benefits as Company
may
provide to its other executives, provided such coverage is reasonably
available, or be reimbursed if Executive is carrying his own similar
insurance.
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(ii)
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Benefit
Plans.
The Executive will be entitled to participate in any benefit plan
or
program of the Company which may currently be in place or implemented
in
the future.
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(iii)
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Other
Benefits.
During the Term, Executive will be entitled to receive, in addition
to and
not in lieu of base salary, bonus or other compensation, such other
benefits and normal perquisites as Company currently provides or
such
additional benefits as Company may provide for its executive officers
in
the future.
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(e)
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Vacation
.
Executive will be entitled to two weeks paid vacation each year of
this
Agreement.
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5.
Confidentiality
and Non-Competition.
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(a)
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Confidentiality.
In
the course of the performance of Executive's duties hereunder, Executive
recognizes and acknowledges that Executive may have access to certain
confidential and proprietary information of Company or any of its
affiliates. Without the prior written consent of Company, Executive
shall
not disclose any such confidential or proprietary information to
any
person or firm, corporation, association, or other entity for any
reason
or purpose whatsoever, and shall not use such information, directly
or
indirectly, for Executive's own behalf or on behalf of any other
party.
Executive agrees and affirms that all such information is the sole
property of Company and that at the termination and/or expiration
of this
Agreement, at Company's written request, Executive shall promptly
return
to Company any and all such information so requested by
Company.
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The
provisions of this Section 5 shall not, however, prohibit Executive from
disclosing to others or using in any manner information that:
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(i)
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has
been published or has become part of the public domain other than
by acts,
omissions or fault of
Executive;
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Employment
Agreement - Page 2
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(ii)
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has
been furnished or made known to Executive by third parties (other
than
those acting directly or indirectly for or on behalf of Executive)
as a
matter of legal right without restriction on its use or disclosure;
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(iii)
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was
in the possession of Executive prior to obtaining such information
from
Company in connection with the performance of this Agreement;
or
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(iv)
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is
required to be disclosed by law.
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(b)
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Non-Competition.
Executive agrees that he will not, for himself, on behalf of, or
in
conjunction with any person, firm, corporation or entity, either
as
principal, employee, shareholder, member, director, partner, consultant,
owner or part-owner of any corporation, partnership or any other
type of
business entity, directly or indirectly, own, manage, operate, control,
be
employed by, participate in, or be connected in any manner with the
ownership, management, operation, or control of any establishment
which
has live female nude or semi-nude entertainment (“Adult Entertainment
Business”) or is in any business similar to or competitive with the Adult
Entertainment Business presently conducted by the Company anywhere
in the
United States within a twenty (20) mile radius of any Adult Entertainment
Business of the Company or any Adult Entertainment Business of the
Company
under construction, under contract, in development or leased by or
to the
Company, for a period of one year (the “Non-Compete Period”) from the
termination of this Agreement. However, in the event of the termination
of
Executive's employment pursuant to Section 7(d) or 7(f), the Non-Compete
Period shall be six months.
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Executive
agrees not to hire, solicit or attempt to solicit for employment by Executive
or
any company to which he may be involved, either directly or indirectly, any
party who is an employee or independent contractor of the Company or any entity
which is affiliated with the Company, or any person who was an employee or
independent contractor of the Company or any entity which is affiliated with
the
Company within the one year period immediately following the termination of
this
Agreement.
Executive
acknowledges that he has carefully read and considered all provisions of this
Agreement and agrees that:
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(i)
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Due
to the nature of the Company's business, the foregoing covenants
place no
greater restraint upon Executive than is reasonably necessary to
protect
the business and goodwill of the Company;
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(ii)
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These
covenants protect the legitimate interests of the Company and do
not serve
solely to limit the Company's future
competition;
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(iii)
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This
Agreement is not an invalid or unreasonable restraint of
trade;
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Employment
Agreement - Page 3
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(iv)
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A
breach of these covenants by Executive would cause irreparable damage
to
the Company;
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(v)
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These
covenants are reasonable in scope and are reasonably necessary to
protect
the Company's business and goodwill which the Company has established
through its own expense and effort;
and
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(vi)
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The
signing of this Agreement is necessary as part of the consummation
of the
transactions described in the preamble.
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6.
Indemnification.
The
Corporation shall to the full extent permitted by law or as set forth in the
Articles of Incorporation and the Bylaws of the Company, indemnify, defend
and
hold harmless Executive from and against any and all claims, demands,
liabilities, damages, loses and expenses (including reasonable attorney's fees,
court costs and disbursements) arising out of the performance by him of his
duties hereunder except in the case of his willful misconduct.
7.
Termination.
This
Agreement and the employment relationship created hereby will terminate (i)
upon
the death or disability of Executive under section 7(a) or 7(b); (ii) with
cause
under Section 7(c); (iii) for good reason under Section 7(d); (iv) upon the
voluntary termination of employment by Executive under Section7(e); or without
cause under Section 7(f).
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(a)
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Disability.
The Company shall have the right to terminate the employment of the
Executive under this Agreement for disability in the event Executive
suffers an injury, illness, or incapacity of such character as to
substantially disable him from performing his duties without reasonable
accommodation by the Company hereunder for a period of more than
one
hundred eighty (180) consecutive days upon the Company giving at
least
thirty (30) days written notice of
termination.
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(b)
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Death.
This Agreement will terminate on the Death of the
Executive.
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(c)
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With
Cause.
The Company may terminate this Agreement at any time because of (i)
Executive's material breach of any term of the Agreement, (ii) the
determination by the Board of Directors in the exercise of its reasonable
judgment that Executive has committed an act or acts constituting
a felony
or other crime involving moral turpitude, dishonesty or theft or
fraud; or
(iii) Executive's gross negligence in the performance of his duties
hereunder, provided, in each case, however, that the Company shall
not
terminate this Agreement pursuant to this Section 7(c) unless the
Company
shall first have delivered to the Executive, a notice which specifically
identifies such breach or misconduct and the executive shall not
have
cured the same within fifteen (15) days after receipt of such
notice.
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(d)
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Good
Reason.
The Executive may terminate his employment for "Good Reason"
if:
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Employment
Agreement - Page 4
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(i)
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he
is assigned, without his express written consent, any duties materially
inconsistent with his positions, duties, responsibilities, or status
with
the Company as of the date hereof, or a change in his reporting
responsibilities or titles as in effect as of the date hereof; provided,
however, that Executive must provide the Company with written notice
of
his dispute of such re-assignment of duties or change in his reporting
responsibilities under this Section 7(d)(i) and give the Company
opportunity to cure such inconsistency. If such dispute is not resolved
within thirty (30) days, the Company shall submit such dispute to
arbitration under Section 14.
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(ii)
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his
compensation is reduced;
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(iii)
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the
Company does not pay any material amount of compensation due hereunder
and
then fails either to pay such amount within ten (10) days of written
notice or to contest in good faith such notice. Further, if such
contest
is not resolved within thirty (30) days, the Company shall submit
such
dispute to arbitration under Section
14.
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(e)
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Voluntary
Termination
.
The Executive may terminate his employment
voluntarily.
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(f)
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Without
Cause
.
The Company may terminate this Agreement without
cause.
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8.
Obligations
of Company Upon Termination.
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(a)
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In
the event of the termination of Executive's employment pursuant to
Section
7 (a), (b), (c) or (e), Executive will be entitled only to the
compensation earned by him hereunder as of the date of such termination
(plus life insurance or disability benefits if applicable and provided
for
pursuant to Section 4(c)).
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(b)
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In
the event of the termination of Executive’s employment pursuant to Section
7 (d) or (f), Executive will be entitled to receive one lump sum
payment
of $15,000.
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9.
Waiver
of Breach.
The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any subsequent breach by any
party.
10.
Costs
.
If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party will be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to
which
he or it may be entitled.
11.
Notices
.
Any
notices, consents, demands, requests, approvals and other communications to
be
given under this Agreement by either party to the other will be deemed to have
been duly given if given in writing and personally delivered or within two
days
if sent by mail, registered or certified, postage prepaid with return receipt
requested, as follows:
Employment
Agreement - Page 5
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If
to Company:
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Rick's
Cabaret International, Inc.
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10959
Cutten Road
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Houston,
Texas 77066
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Attention:
Eric Langan, CEO/President
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If
to Executive:
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Phil
Marshall
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Notices
delivered personally will be deemed communicated as of actual
receipt.
12.
Entire
Agreement
.
This
Agreement and the agreements contemplated hereby constitute the entire agreement
of the parties regarding the subject matter hereof, and supersede all prior
agreements and understanding, both written and oral, among the parties, or
any
of them, with respect to the subject matter hereof.
13.
Severability.
If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws effective during this Agreement, such provision
will be fully severable and this Agreement will be construed and enforced as
if
such illegal, invalid or unenforceable provision never comprised a part hereof;
and the remaining provisions hereof will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or
by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
14.
Arbitration.
If a
dispute should arise regarding this Agreement the parties agree that all claims,
disputes, controversies, differences or other matters in question arising out
of
this relationship shall be settled finally, completely and conclusively by
arbitration in Houston, Texas in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). The governing
law
of this Agreement shall be the substantive law of the State of Texas, without
giving effect to conflict of laws. A decision of the arbitrator shall be final,
conclusive and binding on the Company and Executive. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, a representative of the Company, the Company's attorneys,
and advisors to or witnesses for any party. The matters submitted to
arbitration, the hearings and proceedings and the arbitration award shall be
kept and maintained in the strictest confidence by Executive and the Company
and
shall not be discussed, disclosed or communicated to any persons except as
may
be required for the preparation of expert testimony. On request of any party,
the record of the proceeding shall be sealed and may not be disclosed except
insofar, and only insofar, as may be necessary to enforce the award of the
arbitrator and any judgement enforcing an award. The prevailing party shall
be
entitled to recover reasonable and necessary attorneys' fees and costs from
the
non-prevailing party and the determination of such fees and costs and the award
thereof shall be included in the claims to be resolved by the arbitrator
hereunder.
Employment
Agreement - Page 6
15.
Captions.
The
captions in this Agreement are for convenience of reference only and will not
limit or otherwise affect any of the terms or provisions hereof.
16.
Gender
and Number.
When the
context requires, the gender of all words used herein will include the
masculine, feminine and neuter and the number of all words will include the
singular and plural.
17.
Execution
.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
18.
Company
Authorization.
The
Company represents that the Board of Directors has approved this
Agreement.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
day and year first above written.
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COMPANY:
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RICK'S
CABARET INTERNATIONAL, INC.
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By:
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/s/
Eric Langan
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Eric
Langan, CEO/President
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EXECUTIVE:
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By:
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/s/
Phil Marshall
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Phil
Marshall
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Employment
Agreement - Page 7
FOR
IMMEDIATE RELEASE
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RICK’S
CABARET INTERNATIONAL, INC. NAMES PHILLIP MARSHALL
AS
CHIEF FINANCIAL OFFICER
HOUSTON
- (May
30, 2007) -
Rick’s
Cabaret International, Inc
.
(NASDAQ:
RICK), operator of upscale gentlemen’s clubs, said it has named veteran
accountant
Phillip
Marshall
as its
Chief
Financial Officer
.
He
assumes his new duties today.
Mr.
Marshall, a Certified Public Accountant licensed in Texas, will be based at
the
company’s Houston headquarters and will also supervise financial management
systems at the company’s 14 clubs in four states. He first became acquainted
with Rick’s Cabaret when he audited the company as a partner at
Jackson
& Rhodes
in
Dallas.
“We
are
delighted that Phil Marshall will assume the CFO position at Rick’s Cabaret,”
said company president and
Chief
Executive Officer Eric Langan
,
who had
been acting CFO. “As we continue to acquire more clubs and expand operations,
our accounting needs are becoming increasingly sophisticated. With his 34 years
of experience as a CPA and his familiarity with our company, he is the ideal
person for the job.”
Most
recently Mr. Marshall was controller of
Dorado
Exploration, Inc
.,
an oil
and gas exploration and production company, and previously was chief financial
officer of
CDT
Systems, Inc
.,
a
publicly held water technology company. He began his public accounting career
with the international accounting firm,
KMG
Main Hurdman
,
where
he managed the firm’s fifth largest audit practice. After its merger with
Peat
Marwick
,
forming
KPMG
,
he
served as an audit partner for several years. After leaving KPMG, Mr. Marshall
was partner in charge of the audit practice at Jackson & Rhodes in Dallas,
where he specialized in small publicly held companies.
About
Rick’s Cabaret:
Rick’s
Cabaret International, Inc. (NASDAQ: RICK) operates upscale adult nightclubs
serving primarily businessmen and professionals that offer live adult
entertainment, restaurant and bar operations. The company owns and operates
or
licenses adult nightclubs in New York City, New Orleans, Charlotte, Houston,
Minneapolis and other cities under the names "Rick's Cabaret," "XTC" and “Club
Onyx.” No sexual contact is permitted at any of these locations. Rick’s Cabaret
also owns the adult Internet membership Web site, couplestouch.com, and a
network of online adult auction sites under the flagship URL naughtybids.com.
Rick’s Cabaret common stock is traded on NASDAQ under the symbol RICK. For
further information contact
[email protected]
.
Forward-looking
Statements:
This
document contains forward-looking statements that involve a number of risks
and
uncertainties that could cause the company’s actual results to differ materially
from those indicated in this document, including the risks and
uncertainties associated with operating and managing an adult business, the
business climates in New York City and elsewhere, the success or lack thereof
in
launching and building the company’s businesses in New York City and elsewhere,
risks and uncertainties related to the operational and financial results of
our
Web sites, conditions relevant to real estate transactions, and numerous other
factors such as laws governing the operation of adult entertainment businesses,
competition and dependence on key personnel. Rick's has no obligation to update
or revise the forward-looking statements to reflect the occurrence of future
events or circumstances. For further information go to
www.ricks.com
.