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.
 
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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.
 
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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
demand for performance is delivered or sent to the Company specifically
identifying the manner in which the Company has not performed.
 
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7.           Non-Disclosure; Non-Competition; Non-Solicitation.  The Company
covenants and agrees that it will provide to the Employee all Confidential
Information (as defined below) of the Company reasonably necessary to permit the
Employee to fulfill his duties and responsibilities hereunder. The Employee
acknowledges that, as a consequence of his employment by the Company, the
Employee will be furnished and have access to substantially all Confidential
Information of the Company. The Employee further acknowledges that (i) any
public disclosure of the Confidential Information will have an adverse effect on
the Company and its business, (ii) the Company will suffer irreparable injury if
the Employee breaches any of the terms of this Section 7, (iii) the Company will
be at a substantial competitive disadvantage if it fails to acquire and maintain
exclusive ownership of the Confidential Information or the Employee fails to
abide by the restrictions provided for in this Section 7, (iv) the scope of the
protective restrictions provided for in this Section 7 are reasonable when
taking into account the Employee’s access to Confidential Information, the
importance of such Confidential Information to the Company and the uniqueness of
the services provided by Employee, (v) the compensation being paid to the
Employee pursuant to this Agreement and the post-employment rights of the
Employee hereunder are sufficient inducement for the Employee to agree to the
terms hereof, (vi) Employee is to receive meaningful consideration as a selling
stockholder of the Wilhelmina Companies under the Purchase Agreement and
accordingly such capacity is an important consideration in determining the
substance and scope of the provisions of this Section 7, (vii) the provisions of
this Section 7 are reasonable and necessary to protect the business and
interests of the Company, to prevent the improper use or disclosure of the
Confidential Information and to provide the Company with exclusive ownership of
all such Confidential Information, (viii) the terms of this Section 7 preclude
the Employee from engaging in the conduct of the business of the Company for a
reasonable period and (ix)the Employee provides services to the Company that are
unique.
 
a.           Non-Disclosure Agreement.  Employee agrees that he will not (i)
disclose to any person, either directly or indirectly, any Confidential
Information, unless and solely to the extent that such Confidential Information
is required to be disclosed by law or pursuant to a final judicial order or
decree, (ii) use for his own account or use, cause, facilitate or allow any
third party to use Confidential Information in any way, or (iii) remove any
Confidential Information or any copy, summary or compilation of any kind of any
Confidential Information from the premises of the Company or the premises of any
Company’s customers, other than (in the case of (i) and (iii)) in reasonable
furtherance of the performance of Employee’s duties under this Agreement.
 
b.           Work Product.  All records and documents embodying any Confidential
Information or pertaining to the existing or contemplated scope of the Company’s
business, whether conceived, prepared or developed by the Employee, the Company
or otherwise, either alone or with others (“Work Product”), shall be the sole
property of the Company.
 
c.           Return of Materials.  Upon termination of his employment for any
reason, the Employee shall promptly deliver to the Company all materials in any
medium containing, referring to or derived from any Confidential Information or
Work Product of the Company, together with all other manuals, letters, notes,
reports, data, tables and calculations which are the property of the Company,
which are in the Employee’s possession or under his control.
 
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d.           Non-Competition Agreement.  The Employee covenants and agrees that
during the Term and, subject to Section 7(j), for a period of one (1) year
following the Term (notwithstanding, in either case, any earlier termination of
the employment of Employee for any reason), the Employee will not, directly or
indirectly (other than Employee’s activities as a representative of the Company
solely for the benefit of the Company) (i) own, engage in, manage, operate,
join, control, or participate in the ownership, management, operation, or
control of, or be connected as a stockholder, director, officer, employee,
agent, partner, joint venturer, member, beneficiary, or otherwise with, any
“Competing Business” (defined below) anywhere in the “Restricted Territories”
(defined below); (ii) induce any customers of the Company to patronize any
Competing Business; (iii) solicit or accept any Competing Business from any
customer of the Company; (iv) request or advise any customers of the Company to
withdraw, curtail or cancel such customer’s business with the Company; or (v)
disclose to any other person, firm or corporation engaged in any Competing
Business the names or addresses of any of the customers, models or other Talent
(as defined in the Purchase Agreement) of the Company.  For purposes of this
Agreement, the term “Competing Business” is defined to mean any activity or
business that is or would be competitive with the business conducted by the
Company at the time of termination of the Employee’s employment with the
Company; provided that it is understood that “Competing Business” shall include
any “Representation Business” (as defined in the Purchase Agreement). The term
“Restricted Territories” is defined to mean any location in which the Company
conducts, or is authorized to conduct, its business throughout the world.
 
e.           Non-Solicitation Agreement.  During the Term and, subject to
Section 7(j), for a period of one (1) year following the Term (notwithstanding,
in either case, any earlier termination of the employment of Employee for any
reason), the Employee will not, either on his own behalf or on behalf of any
Competing Business, directly or indirectly (i) solicit or induce, or in any
manner attempt to solicit or induce any person employed by, or an agent of, the
Company to terminate such person’s employment or agency, as the case may be,
with the Company, (ii) solicit or induce, or in any manner attempt to solicit or
induce, any models or other Talent, to terminate or modify any contract,
arrangement or relationship with the Company, or any prospective model or other
Talent not to enter into a contract, arrangement or relationship with the
Company, or (iii) solicit, divert, or attempt to solicit or divert, or otherwise
accept as a supplier or customer, any person which sells any products or
services of, furnishes products or services to, or receives products or services
from the Company, nor will the Employee attempt to induce any such supplier or
customer to cease being (or any prospective supplier or customer not to become)
a supplier or customer of the Company.
 
f.           Modification of Restrictions.  The Employee agrees that if an
arbitrator or a court of competent jurisdiction determines that the length of
time or any other restriction, or portion thereof, set forth in this Section 7
is overly restrictive and unenforceable, the arbitrator or court shall reduce or
modify such restrictions to those which it deems reasonable and enforceable
under the circumstances, and as so reduced or modified, the parties hereto agree
that the restrictions of this Section 7 shall remain in full force and effect.
The Employee further agrees that if an arbitrator or court of competent
jurisdiction determines that any provision of this Section 7 is invalid or
against public policy, the remaining provisions of this Section 7 and the
remainder of this Agreement shall not be affected thereby, and shall remain in
full force and effect.
 
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g.           Injunctive Relief.  In the event of any pending, threatened or
actual breach of any of the covenants or provisions of this Section 7, as
determined by an arbitrator or a court of competent jurisdiction, it is
understood and agreed by the Employee that the remedy at law for a breach of any
of the covenants or provisions of this Section 7 may be inadequate and,
therefore, the Company shall be entitled to a restraining order or injunctive
relief in addition to any other remedies at law and in equity, as determined by
an arbitrator or a court of competent jurisdiction. The Employee waives any
bond, surety, or other security that might be required of the Company as a
condition of any such restraining order or injunctive relief.
 
h.           Confidential Information Defined.  For purposes of this Agreement,
“Confidential Information” means any proprietary information, and any
information which the Company reasonably considers to be proprietary, pertaining
to the Company’s past, present or prospective business secrets, methods or
policies, earnings, finances, security holders, lenders, key employees, nature
of services performed by sales personnel or bookers, procedures, standards and
methods, information relating to arrangements with suppliers, the identity and
requirements of arrangements with customers, models or other Talent, the type,
volume or profitability of services or products for customers, drawings,
records, reports, documents, manuals, techniques, information, data, statistics,
trade secrets and all other information of any kind or character relating to the
Company, whether or not reduced to writing; provided, however, that Confidential
Information does not include information which is generally available to the
public (other than as a result of (a) Employee’s breach of this Agreement or (b)
any third party’s breach of any confidentiality obligation or duty to the
Company, which obligation or duty Employee was or reasonably should have been
aware of).
 
i.           Affiliates.  Any reference to the Company in this Section 7 shall
be deemed to include the Company, its parent corporation, its subsidiaries and
any other entity controlled by or under common control with such parent or
subsidiaries.
 
j.           Application Following the Term.  Following the Term, except in the
event Employee’s employment was earlier terminated for “Cause” (by the Company)
or without “Good Reason” (by the Employee)), the covenants set forth in Section
7(d) and Section 7(e) shall terminate and have no effect as of the Payment End
Date.  For purposes of the foregoing, the “Payment End Date” shall mean the date
during the one (1) year period following the Term when the Company ceases paying
the Employee compensation at the same base salary rate and upon on the same pay
schedule as if the Employee continued to be employed by the Company under this
Agreement during such period.
 
8.           Applicable Law and Venue.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. ALL OBLIGATIONS OF THE
PARTIES CREATED HEREUNDER ARE DEEMED PERFORMABLE IN NEW YORK, AND ANY ACTION TO
ENFORCE OR CONSTRUE THE TERMS OF THIS AGREEMENT SHALL BE BROUGHT IN A STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN NEW YORK.
 
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9.           Attorney Fees.  If any action at law or in equity, including an
action for injunction or declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, each party shall pay their own legal fees and
all of their costs and expenses of litigation.
 
10.           Non-Waiver.  The failure by the Company or Parent to complain of
any act or omission on the part of the Employee, no matter how long the same may
continue, shall not be deemed to be a waiver by the Company or Parent of any of
its rights under this Agreement. The waiver by the Company or Parent at any
time, expressed or implied, of any breach or attempted breach of this Agreement
shall not be deemed a waiver or a consent to any subsequent breach or attempted
breach of the same or any other type. If any action by the Employee shall
require the consent or approval of the Company or Parent, such consent to or
approval of the Company or Parent to such action on any one occasion shall not
be deemed a consent to or approval of any other action on the same or any
subsequent occasion.
 
11.           Provisions Severable.  Should any term or provision of this
Agreement for any reason be held to be or declared illegal, invalid, void or
unenforceable either in its entirety or in a particular application, the
remainder of this Agreement shall nonetheless remain in full force and effect
and, if the subject, term or provision is deemed to be illegal, invalid, void or
unenforceable only with respect to a particular application, such term or
provision shall remain in full force and effect with respect to all other
applications. In the event that any of the terms or provisions of this Agreement
shall be held to be or declared illegal, invalid, void or unenforceable solely
by virtue of the fact that such term or provision exceeds the permissible bounds
of applicable law with respect to its scope or duration, this Agreement shall be
deemed amended, modified and reformed to the extent necessary to reduce the
scope or duration of such term or provision to that permissible under applicable
law, and the parties request that any court examining such issue employ great
latitude in reforming this Agreement so as to make this Agreement, as reformed,
valid and enforceable.
 
12.           Entire Agreement.  This Agreement constitutes the entire
understanding of the parties and supersedes all prior understanding or
agreements, whether written or oral, between the parties with respect to the
subject matter of this Agreement. Except as provided herein, no amendment,
modification or alteration of the terms of this Agreement shall be binding
unless in writing, dated subsequent to the date of this Agreement, and executed
by all parties hereto.
 
13.           Binding Effect and Assignment.  Each and all of the covenants,
terms and provisions contained herein shall be binding upon and inure to the
benefit of the respective successors, heirs, and legal representatives of the
Company and the Employee. This Agreement may not be assigned by either party
without the prior written consent of the other party.
 
14.           Notice.  All notices, requests, demands or other communications
required or permitted to be given or made under this Agreement shall be deemed
to have been duly given immediately upon personal delivery or mailing by first
class, certified mail, postage prepaid. Any party may change the address to
which notices, requests, demands or other communications to such party shall be
mailed or sent by giving notice to the other parties in the manner provided
herein. The addresses of the parties for purposes of this Agreement are as set
forth on the signature page hereof.
 
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15.           Headings.  No heading or caption contained in this Agreement shall
be considered in interpreting any of its terms or provisions.
 
16.           Execution in Counterparts.  This Agreement and any amendment may
be executed in any number of counterparts, either by the parties or their duly
authorized attorney-in fact, with the same effect as if all parties had signed
the same document.
 
17.           Effectiveness.  Notwithstanding anything to the contrary, the
terms and provisions of this Agreement shall become effective upon the
consummation of the Purchase, and, if not earlier expired or terminated, the
2003 Agreement (including any extension thereof) shall thereupon terminate in
its entirety, and the parties shall no longer have any obligations
thereunder.  In the event that the Purchase Agreement is terminated, this
Agreement shall terminate in its entirety and shall no longer have any force and
effect.
 
[Signature Page Follows]
 
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IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to
be executed to be effective as of the Effective Date hereinabove set forth.
 
PARENT:
 
New Century Equity Holdings, Inc.
   
/s/ Mark E. Schwarz
Mark E. Schwarz
   
Notice Address:
 
New Century Equity Holdings, Inc.
200 Crescent Court
Suite 1400
Dallas, Texas 75201
Attn: CEO
   
COMPANY:
 
Wilhelmina International Ltd.
   
/s/ Dieter Esch
   
Notice Address:
 
Wilhelmina International Ltd.
300 Park Avenue South
New York, New York 10010
   
EMPLOYEE:
 
/s/ Sean Patterson
Sean Patterson
   
Notice Address:
 
 

 
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