8-K
Dominari Holdings Inc. (DOMH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest eventreported): May 1, 2023
Dominari HoldingsInc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-05576 | 52-0849320 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
7255^th^ Avenue**, 23^rd^Floor**
New York, NY 10022
(703) 992-9325
**(**Address, including Zip Code and Telephone Number, including
Area Code, of Principal Executive Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.0001 par value | DOMH | The Nasdaq Capital<br> Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or CertainOfficers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective as of May 1, 2023 (the “Effective Date”), Matthew B. McCullough, 37, was appointed as the General Counsel of Dominari Holdings Inc. (the “Company”). Mr. McCullough has served as the Company’s outside legal counsel since January 1, 2023. Prior to joining the Company, Mr. McCullough was a corporate lawyer with Ellenoff Grossman & Schole LLP in New York, New York beginning in July 2015. In his prior role, his practice was focused on representing issuers, underwriters, placement agents, and institutional investors in debt and equity capital markets transactions. He received his Bachelor of Science in Business Administration with a concentration in Finance, cum laude, from Ramapo College of New Jersey. Mr. McCullough received his Juris Doctorate, cum laude, from Brooklyn Law School in 2013. He is admitted to practice law in the State of New York and is a member of the New York Bar Association. He has no family relationship with any of the executive officers or directors of the Company. There are no arrangements or understandings between Mr. McCullough and any other person pursuant to which he was appointed as an officer of the Company.
In accordance with the terms of Mr. McCullough’s Employment Agreement with the Company, dated as of May 1, 2023 (the “Employment Agreement”), he will serve as the Company’s General Counsel for an initial term of five (5) years. Mr. McCullough’s base salary is $350,000 per year, subject to regular annual review, payable in accordance with the standard payroll practices of the Company, and subject to all withholdings and deductions, as required by law. The Employment Agreement also provides for a grant of nonqualified stock options to him under and subject to the terms of the Company’s 2022 Equity Incentive Plan (the “2022 EIP”) to purchase shares of the Company’s common stock with a fair market value (as determined under the 2022 EIP) on the grant date of $100,000, on or before May 31, 2023. The options have not yet been granted. Upon grant, the options will vest in equal amounts over a period of three (3) years on the anniversary of the grant date, subject to certain rights of acceleration upon a change of control and as otherwise provided in the Employment Agreement. Mr. McCullough is also entitled to an annual bonus, as determined by the Company’s Compensation Committee, in its sole discretion. Annual bonuses and all stock-based compensation are subject to certain clawback rights as provided in the Employment Agreement.
In addition to the foregoing, within thirty (30) days of the Effective Date, Mr. McCullough will receive a payment of $100,000 in the form of a five-year annually amortizing loan with interest at the mid-term applicable federal rate (the “Loan Agreement”). All remaining payments under the Loan Agreement will become immediately due and payable in the event Mr. McCullough’s employment with the Company is terminated by him or the Company, either voluntarily or involuntarily, at any time prior to the loan having been paid in full. Concurrent with each monthly anniversary of the loan and provided that Mr. McCullough remains an employee of the Company at such time, he will receive a bonus payment equal to the current payment then owed under the Loan Agreement, less applicable withholding taxes.
Mr. McCullough is also entitled to the payment or reimbursement of all reasonable out-of-pocket expenses. and is also provided with all health and other benefits provided by the Company to its senior executive employees.
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The Employment Agreement also provides for customary events of termination of employment and provides that in the event of termination as a result of Mr. McCullough’s death or disability, Mr. McCullough is entitled to severance consisting of (i) six (6) months of his then current base salary; (ii) payment on a pro-rated basis of an annual bonus for the year of termination (which shall be deemed to equal 50% of his then current base salary); (iii) any unpaid annual bonus earned for the prior year; and (iv) any other payments earned in connection with any bonus plan to which Mr. McCullough was a participant as of the date of death or disability. In the event of termination of Mr. McCullough’s employment (i) as a result of the non-renewal of the Employment Agreement by the Company at the end of the then current term, (ii) by Mr. McCullough, for Good Reason (as such term is defined in the Employment Agreement), or (iii) by the Company, without Cause (as such term is defined in the Employment Agreement), then Mr. McCullough is entitled to the same severance as provided above. Additionally, if termination is by Mr. McCullough, for Good Reason, or by the Company, without Cause, or upon a change in control, then all equity grants held by Mr. McCullough will immediately vest.
The above description of the Employment Agreement, the Loan Agreement, and the Bonus Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, the Loan Agreement, and the Bonus Agreement filed herewith as Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3.
Item 9.01. Financial Statements and Exhibits.
Set forth below is a list of Exhibits included as part of this Current Report.
| Exhibit No. | Description |
|---|---|
| 10.1* | Employment Agreement, made and entered into as of May 1, 2023, by and between Dominari Holdings Inc. and Matthew B. McCullough |
| 10.2* | Loan Agreement, made and entered into as of May 1, 2023, by and between Dominari Holdings Inc. and Matthew B. McCullough |
| 10.3* | Bonus Agreement, made and entered into as of May 1, 2023, by and between Dominari Holdings Inc. and Matthew B. McCullough |
| 104 | Cover Page Interactive<br> Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: May 5, 2023 | DOMINARI HOLDINGS INC. | |
|---|---|---|
| By: | /s/ Anthony Hayes | |
| Name: | Anthony Hayes | |
| Title: | Chief Executive Officer |
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exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered effective as of May 1, 2023 (the “Effective Date”), by and between Dominari Holdings, Inc., a Delaware corporation with offices at 725 5^th^ Avenue, New York, NY 10022 (the “Corporation”), and Matthew B. McCullough, an individual residing in the State of New York (the “Executive”), under the following circumstances:
RECITALS:
A. The Corporation desires to secure the services of the Executive upon the terms and conditions hereinafter set forth;
B. The Executive desires to render services to the Corporation upon the terms and conditions hereinafter set forth; and
C. The Corporation and the Executive desire for this Agreement to constitute and embody their full and complete understanding and agreement with respect to the Executive’s employment by the Corporation and supersede, as of the date hereof, all prior understandings and agreements, whether oral or written, between them with respect to such employment.
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Corporation hereby employs the Executive, and the Executive hereby accepts employment as an executive of the Corporation, subject to the terms and conditions set forth in this Agreement.
2. Duties and Place of Employment. The Executive shall serve as the General Counsel of the Corporation, and all the Corporation’s wholly owned subsidiaries, with such duties, responsibilities, and authority as are commensurate and consistent with his position, and such other duties, responsibilities and authority as may be, from time to time, reasonably assigned to him by the Chief Executive Officer of the Corporation (the “CEO”) or the Board of Directors of the Corporation (the “Board”). The Executive shall report directly to the CEO and the Board. During the Term (as defined in Section 3), the Executive shall devote his full business time and efforts to the performance of his duties hereunder unless otherwise authorized by the CEO or the Board. Notwithstanding the foregoing, the expenditure of reasonable amounts of time by the Executive for the making of passive personal investments, the conduct of private business affairs, and charitable and professional activities shall be allowed, provided such activities do not materially interfere with the services required to be rendered to the Corporation hereunder and do not violate the confidentiality provisions set forth in Section 8 below. The Executive shall perform his services for the Corporation at the Corporation’s offices at 725 Fifth Avenue, New York, NY 10022 or such other location as mutually agreed to by the parties.
3. Term of Employment. The term of this Agreement shall commence on the Effective Date and shall be for five (5) years (the “Initial Term”) and automatically be extended for additional terms of one (1) year each (each a “Renewal Term”) unless either party gives prior written notice of non-renewal to the other party no later than ninety (90) days prior to the expiration of the Initial Term (“Non-Renewal Notice”), or the then current Renewal Term, as the case may be. For purposes of this Agreement, the Initial Term and any Renewal Term are hereinafter collectively referred to as the “Term.”
4. Compensation of Executive.
(a) The Corporation shall pay the Executive as compensation for his services hereunder, in equal installments during the Term on accordance with the Corporation’s payroll practices the sum of $350,000 per annum (the “Base Salary”), less such deductions as shall be required to be withheld by applicable law and regulations. The Board, or the Compensation Committee of the Board (the “Compensation Committee”), shall review the Base Salary annually and shall have the right but not the obligation to make such adjustments to the Base Salary as it deems appropriate in its discretion.
(b) In addition to the Base Salary, the Executive shall be entitled to receive an annual bonus from the Corporation (“Annual Bonus”) in an amount determined by the Board in its sole discretion. Annual Bonuses shall be paid by the Corporation to the Executive after the applicable year end, but not later than March 15 following such year end, in cash or in shares of the Corporation’s common stock at the Corporation’s discretion, it being understood that the Board’s determinations concerning attainment of any financial targets associated with any Annual Bonus calculation shall not be made until following the completion of the Corporation’s annual audit and public announcement of such results and shall be paid promptly following the Corporation’s announcement of earnings, but in no event later than December 31 of the year following the year for which the Annual Bonus is being paid (and if the Executive was employed on April 15^th^ of the year following the year to which such Annual Bonus relates, then the Executive shall be entitled to the Annual Bonus for such year, even if he is not employed by the Corporation on the date on which such Annual Bonus is paid).
(c) The Board shall approve a grant of nonqualified stock options to the Executive under and subject to the terms of the Corporation’s 2022 Equity Incentive Plan (the “2022 EIP”) to purchase shares of the Corporation’s common stock with a Fair Market Value (as determined under the 2022 EIP) on the Grant Date of one hundred thousand dollars ($100,000) (the “Option Grant”). The Option Grant shall be completed within thirty (30) days of the Effective Date (the “Grant Date”), shall be for a per share exercise price equal to the Fair Market Value of a share of stock on the Grant Date, and shall vest on a pro rata basis on each of the first three (3) annual anniversaries of the Grant Date. Notwithstanding the foregoing, the Option Grant shall immediately vest in full if during the Term there is (i) a Change in Control Transaction, (ii) a termination of the Executive’s services hereunder by the Corporation other than for “Cause” (as hereinafter defined), (iii) a termination by the Executive for Good Reason (as hereinafter defined), or (iv) as a result of the Executive’s death or Total Disability (as hereinafter defined).
(d) Within thirty (30) days of the Effective Date, the Executive will receive a payment of $100,000 in the form of a five-year annually amortizing loan with interest at the mid-term applicable federal rate (the “Loan”). The Executive will be required to execute a promissory note evidencing the Loan (the “Note”) substantially in the form attached hereto as Exhibit A. All remaining payments under the Note will become immediately due and payable in the event that the Executive’s employment with the Corporation is terminated by the Executive or by Corporation, either voluntarily or involuntarily, at any time prior to the Loan having been paid in full. The benefits and obligations of this Agreement and the Note shall inure to the benefit of and be binding upon the Corporation’s successors and assigns, including but not limited to those that arise from a Change in Control Transaction (as defined hereunder). Concurrent with each monthly anniversary of the Loan and provided that the Executive remains an employee of the Corporation at such time, the Executive will receive a bonus payment equal to the current payment then owed under the Note, less applicable withholding taxes as more fully described in the Bonus Agreement attached hereto as Exhibit B. In the event that the Executive’s employment is terminated due to his death or Total Disability (as defined hereunder), neither the Executive nor his beneficiaries will be entitled to any such bonus payments that would have accrued subsequent to such termination. In the event of either of these two termination events only, the Corporation agrees to pay the Executive or his estate, as applicable, within thirty (30) days after such event, a lump sum payment sufficient to satisfy the remaining balance on the Note.
(e) If the Corporation engages in an unbrokered (e.g., “friends and family”) offering of its securities, the Executive shall be entitled to participate in such offering in such manner as the Compensation Committee, in its discretion, shall decide.
(f) The Corporation shall pay or reimburse the Executive for all reasonable out-of-pocket expenses actually incurred or paid by the Executive in the course of his employment, consistent with the Corporation’s written policy for reimbursement of expenses applicable to similarly situated employees of the Corporation.
(g) The Executive shall be entitled to participate in such pension, profit sharing, group insurance, hospitalization, and group health and benefit plans and all other benefits and plans, including perquisites (e.g., cell phone), if any, as the Corporation provides to its employees generally, including group family health insurance coverage, which shall be paid by the Corporation (the “Benefit Plans”).
(h) The Corporation shall maintain directors’ and officers’ insurance during the Term and for a period of at least six (6) years thereafter.
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Termination.
(a) This Agreement and the Executive’s employment hereunder shall terminate upon the first to occur of the following events:
(i) the Executive’s death:
(ii) the Executive’s Total Disability;
(iii) the expiration of the Initial Term of this Agreement or any Renewal Term thereof, if either party has provided a timely Non-Renewal Notice in accordance with Section 3;
(iv) at the Executive’s option, upon ninety (90) days prior written notice to the Corporation;
(v) at the Executive’s option, for Good Reason, as defined in Section 5(e)
(vi) at the Corporation’s option, for Cause, as defined in Section 5(e); and
(vii) at the Corporation’s option, upon ninety (90) days prior written notice to the Executive, without Cause.
(b) For purposes of this Agreement, the Executive shall be deemed to have incurred a “Total Disability” if the Executive has failed to perform his regular and customary duties to the Corporation for a period of 180 days out of any 360-day period and if before the Executive has become “Rehabilitated” (as herein defined), a majority of the members of the Board, exclusive of the Executive if he is then serving as a member of the Board, determine that the Executive is mentally or physically incapable or unable to continue to perform his regular and customary duties of employment. As used herein, the term “Rehabilitated” shall mean such time as the Executive is willing, able, and commences to devote his time and energies to the affairs of the Corporation to the extent and in the manner that he did so prior to his Total Disability.
(c) For purposes of this Agreement, the term “Change in Control Transaction” means the sale of the Corporation to an un-affiliated person or entity or group of unaffiliated persons or entities pursuant to which such party or parties acquire (i) shares of capital stock of the Corporation (A) representing at least fifty percent (50%) of the outstanding capital stock or (B) sufficient to elect a majority of the Board or of the board of directors of the Corporation (whether by merger, consolidation, sale, or transfer of shares (other than a merger where the Corporation is the surviving corporation and the shareholders and directors of the Corporation immediately prior to the merger constitute a majority of the shareholders and directors, respectively, of the surviving corporation (or its parent)) or (ii) all or substantially all of the Corporation’s assets determined on a consolidated basis.
(d) For purposes of this Agreement, the term “Cause” shall mean (i) any material breach of this Agreement by Executive or material, gross, and willful misconduct on the part of the Executive in connection with his duties hereunder, in all cases that is not cured within fourteen (14) days after receipt of notice thereof (to the extent such breach is capable of being cured), or (ii) the Executive’s conviction of or entering of a guilty plea or a plea of no contest with respect to a felony or any crime involving fraud, larceny, or embezzlement resulting in material harm to the Corporation by the Executive.
(e) For purposes of this Agreement, the term “Good Reason” shall mean that the Executive has resigned due to (i) a material diminution of duties inconsistent with the Executive’s title, authority, duties, and responsibilities (including, without limitation, a change in the chain of reporting) prior to such diminution or (ii) any material violation by the Corporation of its obligations (including, without limitation, its compensation obligations) under this Agreement; provided that the Executive has given written notice to the Corporation within ninety (90) days of the Executive’s knowledge of the initial occurrence of such event, and the Corporation has failed to cure such acts within thirty (30) days of receipt of such notice, if curable, and the Executive must then terminate his employment within thirty (30) days following the expiration of such cure period for the termination to be on account of Good Reason.
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Effects of Termination.
Upon termination of employment for any reason, whether by the Executive or the Corporation, the Executive shall be paid accrued but unpaid compensation and vacation pay through the date of termination and any other benefits accrued to him under any Benefit Plans outstanding at the date of termination and the reimbursement of documented, unreimbursed expenses incurred on or prior to such date, all paid as promptly as practicable and in accordance with applicable law (collectively, “Base Benefits”), and the Executive shall have any conversion rights available under the Benefit Plans and as otherwise provided by law, including the Consolidated Omnibus Budget Reconciliation Act and any similar state law or regulation (“COBRA”).
The following provisions apply to specified termination events. Any Annual Bonus (including any pro-rated Annual Bonus) payable pursuant to the following provisions shall be paid at the same time that it would have been paid if the Executive’s employment had not terminated.
(a) Upon termination of the Executive’s employment pursuant to Section 5(a)(i) or (ii), in addition to the Base Benefits, the Executive or his estate or beneficiaries, as applicable, shall be entitled to the following severance benefits: (i) six (6) months of Base Salary at the then current rate, payable in a lump sum, less withholding of applicable taxes, within thirty (30) days of the date of termination; (ii) if the Executive elects continuation coverage for group health coverage pursuant to COBRA, then for a period of six (6) months following the Executive’s termination, he will be obligated to pay only the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums (if any) for coverage for the respective plan year and, to the extent required by any applicable nondiscrimination rules, the Company’s share of such premiums (the “Employer-Provided COBRA Premium”) shall be treated as taxable income to the Executive, and (iii) payment on a pro-rated basis of any Annual Bonus or other payments earned in connection with any bonus plan to which the Executive was a participant as of the date of his death or Total Disability. This Section 6(a) shall not terminate or otherwise interfere with any right to disability payments to which the Executive may be entitled.
(b) Upon termination of the Executive’s employment pursuant to Section 5(a)(iii) where the Corporation has offered to renew the term of the Executive’s employment for an additional one (1) year period and the Executive chooses not to continue in the employ of the Corporation, the Executive shall be entitled to receive only the Base Benefits, and upon the execution by the Executive of a general release of claims in such form acceptable to the Corporation, the payment on a pro-rated basis of any Annual Bonus, or other payments earned in connection with any bonus plan to which the Executive was a participant as of the date of the Executive’s termination of employment. In the event the Corporation tenders a Non-Renewal Notice to the Executive, then the Executive shall be entitled to the same severance benefits as if the Executive’s employment was terminated pursuant to Section 5(a)(vi); provided, however, if such Non-Renewal Notice was triggered due to the Corporation’s statement that the Executive’s employment was terminated due to Section 5(a)(v), then payment of the severance benefits under this sentence will be contingent upon a determination as to whether termination was properly for Cause.
(c) Upon termination of the Executive’s employment pursuant to Section 5(a)(v) or 5(a)(vii), in addition to the Base Benefits, the Executive shall be entitled upon the execution by the Executive of a general release of claims in such form acceptable to the Corporation, to the following severance benefits: (i) six (6) months Base Salary at the then current rate, to be paid in a single lump sum payment not later than thirty (30) days following such termination, less withholding of all applicable taxes; (ii) if the Executive elects continuation coverage for group health coverage pursuant to COBRA, then for a period of six (6) months following the Executive’s termination he will be obligated to pay only the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums (if any) for coverage for the respective plan year and, to the extent required by any applicable nondiscrimination rules, the Employer-Provided COBRA Premium shall be treated as taxable income to the Executive; and (iii) payment on a pro-rated basis of any Annual Bonus or other payments earned in connection with any bonus plan to which the Executive was a participant as of the date of the Executive’s termination of employment. In addition, any equity grants to Executive shall be immediately vested upon termination of Executive’s employment pursuant to Section 5(a)(v) or (vii).
(d) Upon termination of the Executive’s employment pursuant to Section 5(a)(iv), in addition to the Base Benefits, the Executive shall be entitled upon the execution by the Executive of a general release of claims in such form acceptable to the Corporation, to the following severance benefits: (i) accrued and unpaid Base Salary and vacation pay through the date of termination, less withholding of applicable taxes; and (ii) if the Executive elects continuation coverage for group health coverage pursuant to COBRA, then, for a period of one (1) month following the Executive’s termination, he will be obligated to pay only the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums (if any) for coverage for one month of the respective plan year and, to the extent required by any applicable nondiscrimination rules, the Employer-Provided COBRA Premium shall be treated as taxable income to the Executive.
(e) Upon termination of the Executive’s employment pursuant to Section 5(a)(vi), the Executive shall only be entitled to the Base Benefits.
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Any payments required to be made hereunder by the Corporation to the Executive shall continue to the Executive’s beneficiaries in the event of his death until paid in full.
7. Vacations. The Executive shall be entitled to three (3) weeks of paid vacation per year. The Executive shall take his vacation at such time or times as the Executive and the CEO shall determine is mutually convenient. Any vacation not taken in one (1) year shall accrue, up to a maximum of six (6) weeks of vacation and shall carry over to the subsequent year.
8. Disclosure of Confidential Information. The Executive recognizes, acknowledges and agrees that he will have access to secret and confidential information regarding the Corporation and its affiliates, including but not limited to, its products, formulae, patents, sources of supply, customer dealings, data, know-how, and business plans, provided such information is not in or does not hereafter become part of the public domain, or become known to others through no fault of the Executive. The Executive acknowledges that such information is of great value to the Corporation, is the sole property of the Corporation, and has been and will be acquired by him in confidence. In consideration of the obligations undertaken by the Corporation herein, the Executive will not, at any time, during or after the Term of his employment hereunder, reveal, divulge, or make known to any person any information acquired by the Executive during the course of his employment, which is treated as confidential by the Corporation, and not otherwise in the public domain. Notwithstanding the foregoing, nothing in this Section 8 shall prohibit the Executive from providing information or testimony if ordered by a court of competent jurisdiction, governmental authority or stock exchange to disclose such information, provided that in such circumstance, if legally permissible and practicable, the Executive shall provide prompt written notice of such order to the Corporation to enable the Corporation to seek a protective order prior to making such disclosure of such information. The provisions of this Section 8 shall survive the termination of the Executive’s employment hereunder. All references to the Corporation in Sections 8 and 9 hereof shall include affiliates of the Corporation.
9. Clawback Rights. All Annual Bonuses, and any and all stock-based compensation (such as options, restricted stock units and other equity awards) (collectively, the “Clawback Benefits”) shall be subject to “Clawback Rights” as follows. During the period that the Executive is employed by the Corporation and upon the termination of the Executive’s employment and for a period of three (3) years thereafter, if there is a restatement of any financial results from which any Clawback Benefits to Executive shall have been determined, the Executive agrees to repay any amounts that were determined by reference to any financial results of the Corporation that were later restated (as defined below), to the extent the Clawback Benefits paid exceed the Clawback Benefits that would have been paid, based on the restatement of the Corporation’s financial information. All Clawback Benefits resulting from such restated financial results shall be retroactively adjusted by the Compensation Committee to take into account the restated results, and any excess portion of the Clawback Benefits resulting from such restated results shall be immediately surrendered to the Corporation and if not so surrendered within ninety (90) days of the revised calculation being provided to the Executive by the Compensation Committee following a publicly announced restatement, the Corporation shall have the right to take any and all actions to effectuate such adjustment. The calculation of the revised Clawback Benefits shall be determined by the Compensation Committee in good faith and in accordance with any applicable laws, rules, and regulations. All determinations by the Compensation Committee with respect to the Clawback Rights shall be final and binding on the Corporation and the Executive. The Clawback Rights shall terminate following a Change in Control Transaction, subject to applicable laws, rules, and regulations. For purposes of this Section 9, a restatement of financial results that requires a repayment of all or a portion of the Clawback Benefits shall mean a restatement resulting from material noncompliance of the Corporation with any financial reporting requirement under the federal securities laws and shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements or requirements that were not in effect on the date the financial statements were originally prepared (“Restatements”). The parties acknowledge that it is their intention that the foregoing Clawback Rights as relates to Restatements conform in all respects to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd-Frank Act and any and all rules and regulations promulgated thereunder from time to time. Accordingly, the terms and conditions of this Agreement shall be deemed automatically amended from time to time to the extent required to assure compliance with the Dodd-Frank Act or any applicable rules or regulations enacted thereunder that may be adopted by the Securities and Exchange Commission or any stock exchange on which the securities of the Corporation are listed.
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Section 409A.
(a) The provisions of this Agreement are intended to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a manner consistent with the requirements for avoiding taxes, interest or penalties under Section 409A. The Corporation and the Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions that are necessary, appropriate, or desirable to avoid imposition of any additional tax, penalties or income recognition prior to actual payment to the Executive under Section 409A; provided however, that the Corporation has no obligation to indemnify the Executive or hold the Executive harmless from any adverse tax consequences related to any failure to comply with Section 409A.
(b) To the extent that the Executive will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; provided, that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect, and (iii) such payments shall be made on or before the last day of the taxable year following the taxable year in which Executive incurred the expense.
(c) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination constitutes a “Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,” “termination of employment,” or like terms shall mean Separation from Service.
(d) Each payment that is made within the terms of the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment is intended to be a payment upon an involuntary separation from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et seq., to the maximum extent permitted by that regulation, with any amount that is not exempt from Section 409A being subject to Section 409A.
(e) Notwithstanding anything to the contrary in this Agreement, if the Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination, then only that portion of the severance and benefits payable to the Executive pursuant to this Agreement, if any, and any other severance payments or separation benefits that may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit (as defined herein) may be made within the first six (6) months following the Executive’s termination of employment in accordance with the payment schedule applicable to each payment or benefit. Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit otherwise due to Executive on or within the six (6) month period following the Executive’s termination will accrue during such six (6) month period and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of the Executive’s termination of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if the Executive dies following termination but prior to the six (6) month anniversary of the Executive’s termination date, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of the Executive’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.
(f) Each payment and benefit payable under this Agreement, including any payment or benefit that is required to be aggregated with such payment and benefit under Section 409A, is hereby designated as a separate payment, and will not collectively be treated as a single payment, as provided in Treasury Regulation Section 1.409A-2(b)(2)(iii).
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(g) For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (i) to the amounts payable prior to March 15 following the year in which Executive’s employment termination date occurs, plus (ii) the lesser of two (2) times: (A) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Corporation’s taxable year preceding the Corporation’s taxable year which includes Executive’s date of termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1); or (B) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s Separation from Service occurs.
11. Miscellaneous.
(a) The Executive acknowledges that the services to be rendered by him under this Agreement are of a special, unique, and extraordinary character and that it would be difficult or impossible to replace such services. Accordingly, the Executive agrees that any breach or threatened breach by him of Section 8 or 9 of this Agreement shall entitle the Corporation, in addition to all other legal remedies available to it, to apply to any court of competent jurisdiction to seek to enjoin such breach or threatened breach. The parties understand and intend that each restriction agreed to by the Executive hereinabove shall be construed as separable and divisible from every other restriction, that the unenforceability of any restriction shall not limit the enforceability, in whole or in part, of any other restriction, and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. In the event that any restriction in this Agreement is more restrictive than permitted by law in the jurisdiction in which the Corporation seeks enforcement thereof, such restriction shall be limited to the minimum extent permitted by law. The remedy of injunctive relief herein set forth shall be in addition to, and not in lieu of, any other rights or remedies that the Corporation may have at law or in equity.
(b) Neither the Executive nor the Corporation may assign or delegate any of their rights or duties under this Agreement without the express written consent of the other; provided however, that the Corporation shall have the right to delegate its obligation of payment of all sums due to the Executive hereunder, provided that such delegation shall not relieve the Corporation of any of its obligations hereunder.
(c) This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to the Executive’s employment by the Corporation, supersedes, as of the date hereof, all prior understandings and agreements, whether oral or written, between the Executive and the Corporation with respect to such employment, and shall not be amended, modified, or changed except by an instrument in writing executed by the party to be charged. The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of this Agreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent time.
(d) This Agreement shall inure to the benefit of, and be binding upon and enforceable against, the parties hereto and their respective successors, heirs, beneficiaries, and permitted assigns.
(e) The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
(f) All notices, requests, demands, and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid, or by private overnight mail service (e.g. Federal Express) to the party at the address set forth above or to such other address as either party may hereafter give notice of in accordance with the provisions hereof. Notices shall be deemed given on the sooner of the date actually received or the third business day after sending.
(g) This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without reference to principles of conflicts of laws and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located in the State of New York.
(h) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one of the same instrument. The parties hereto have executed this Agreement as of the Effective Date, and may be delivered by electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and so delivered shall be deemed to have been duly and validly executed and delivered and be valid and effective for all purposes.
[Signature Pages Follow]
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| DOMINARI HOLDINGS INC. | |
|---|---|
| By: | /s/ Christopher Devall |
| Name: | Christopher Devall |
| Title: | Chief Operating Officer |
| EXECUTIVE | |
| --- | |
| /s/ Matthew B. McCullough | |
| Matthew B. McCullough |
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Exhibit 10.2
EXHIBIT A
LOAN AGREEMENT
This Loan Agreement (this “Agreement”) is dated as of May 1, 2023 (the “Effective Date”) and is entered into by and between Dominari Holdings Inc. (“Dominari”) and Matthew B. McCullough (“Executive”).
WHEREAS, Executive has requested that Dominari make a loan to Executive (the “Loan”). Dominari has agreed to make the Loan, in an amount that has been agreed upon by Dominari and Executive, as set forth herein (the “Loan Amount”), subject to the terms and conditions set forth in this Agreement and provided that Executive agrees to repay the Loan in accordance with this Agreement and otherwise agrees to comply with Executive’s obligations under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and valuable considerations, the receipt, sufficiency and adequacy of which are hereby acknowledged, Dominari and Executive agree as follows:
- Loan.
1.1. Amount and Condition to Loan. Upon Executive executing and delivering to Dominari this Agreement and the Loan Schedule and Acknowledgement specifying the Loan Amount (the “LSA”), which is attached hereto as Appendix A and is hereby incorporated by reference herein, Dominari shall lend the Loan Amount to Executive.
1.2. Interest Rate. The Loan Amount shall bear interest at the rate of 3.57% per annum (the current mid-term Applicable Federal Rate (AFR) published by the Internal Revenue Service) and shall be fixed for the term of the Loan as of the Effective Date (the “Interest Rate”). Interest shall be calculated on the basis of a year of 365 days and the actual number of days elapsed.
1.3. Repayment of Loan.
(a) Executive shall pay a loan payment amount of principal and interest (the “Payment”), which will be charged to or due from the Executive each month, as set forth in the attached Loan Amortization Schedule (the “Schedule”), which Schedule is incorporated herein. Except as otherwise provided herein, the due dates of the first and last Payments are as set out in the LSA. As long as the Executive is employed with Dominari, each Payment will be offset in equal monthly installments from any salary, commission, bonus, award, or any other compensation of the Executive as defined in Section 409A of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder(“Section 409A”), as outlined in the Schedule, provided that any such offset is done in accordance with applicable law and does not result in the Executive receiving wages that are less than the minimum wage or any applicable minimum wage threshold, or in contravention of other any governing requirements under federal, state or local law. Notwithstanding the foregoing, to the fullest extent permitted by law, Executive additionally authorizes Dominari to offset the Payments, as outlined in the Schedule, on a monthly basis in advance of when they are due from any aftertax proceeds from salary, commission, bonus, award, or other compensation payable to Executive, other than deferred compensation as defined in Section 409A. All amounts prepaid to Dominari shall be applied as Payments.
(b) Executive may at any time during the term of this Agreement repay the outstanding Loan Amount, together with all accrued and unpaid interest and all other amounts outstanding hereunder, including, without limitation, those set forth in the LSA and Schedule, and terminate this Agreement without penalty. Any such payment shall be made in cash in U.S. dollars by wire transfer to an account of Dominari identified in writing to Executive by Dominari. Upon Executive’s payment in cash in U.S. dollars of the Loan, all accrued interest thereon and all other amounts due with respect thereto hereunder, Executive will have paid in full the Loan and no longer be required to make any further Payments.
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- Representations and Warranties, Agreements.
2.1. Executive will comply with all the terms and conditions of this Agreement and any other documents executed pursuant hereto, and will, if requested by Dominari, execute all instruments and perform all other acts necessary or desired by Dominari in its sole discretion to consummate the terms and transactions contemplated hereby.
2.2. Executive has the full capacity and authority to enter into this Agreement and to comply with these provisions.
2.3. There is no material action, suit, proceeding, inquiry or investigation, at law or in equity, before any court, public body, or applicable regulatory body, pending or, to the best of Executive’s knowledge, threatened which seeks to restrain or enjoin Executive from entering into or complying with the Agreement, or Executive’s employment with Dominari and any activities in connection therewith.
2.4. To the extent permitted by law, Executive hereby releases and holds Dominari and its affiliates harmless from any claim arising out of Executive’s actions or omissions in connection with the Loan, including but not limited to Executive’s activities financed by this Loan. This Section 2.4 shall survive the termination of this Agreement.
2.5. Executive is solvent (which means Executive is able to pay Executive’s debts as they come due) and no proceeding under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution of substantially all assets, composition or other relief with respect to Executive’s debts has been initiated on a voluntary or involuntary basis in the last ten (10) years or is contemplated by Executive as of the Effective Date.
2.6. Executive has disclosed to Dominari all material facts and has not failed to disclose any material fact that could cause any representations or warranty made herein to be materially misleading.
- Event of Default. The occurrence of any one or more of the following events will, at the option of Dominari, constitute an event of default (each, an “Event of Default”) hereunder:
(a) Executive’s breach of or other failure to perform any terms of this Agreement, Executive’s Employment Agreement with Dominari (the “Executive Agreement”), or any other agreement entered into by Executive and Dominari or any affiliate thereof;
(b) Any warranty, representation or other statement made by, or on behalf of, Executive contained in this Agreement or in any information furnished in compliance with or in reference to this Agreement or the Executive Agreement is deemed by Dominari in its sole discretion to be false or misleading;
(c) Executive’s employment with Dominari terminates, for any reason whatsoever, including but not limited to Dominari termination of the relationship at any time, including with respect to Executive’s death or permanent disability, except to the extent provided in Section 14.1 below, while any part of the Loan, including accrued interest, remains outstanding;
(d) Executive’s failure to remain registered as described in Section 7 below or is indicted for any crime under applicable law;
(e) Executive’s bankruptcy, insolvency, the appointment of a receiver for any part of Executive’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceedings under bankruptcy or insolvency laws by or against Executive; or
(f) Executive does not pay any amounts due under Section 1.3 hereof, and Dominari in its discretion declares an Event of Default for such failure to pay under Section 1.3 hereof.
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- Remedies. Upon the occurrence of any Event of Default, Dominari shall have the right, at any time thereafter, to pursue any of the following remedies separately, successively or simultaneously:
(a) Discharge Dominari’s responsibilities to Executive under this Agreement and declare the outstanding balance of the Loan, any accrued interest on the Loan, and any or all other indebtedness then owing by Executive to Dominari immediately due and payable without presentation, demand for payment, notice of dishonor, protest, or notice of protest of any kind, all of which Executive hereby expressly waives, and institute proceedings for collection. Upon the occurrence of an Event of Default, interest shall accrue on all outstanding principal and interest under this Loan at a rate of ten percent (10%) per annum (the “Default Rate”); and
(b) File for arbitration (or suit if appropriate) under such terms and procedures as determined by Dominari in its sole discretion, and obtain judgement and, in conjunction with any action, Dominari may seek ancillary remedies provided by law, including levy of attachment and garnishment, and any and all attorneys’ fees, expenses and costs.
- Additional Remedies. Upon an Event of Default, Executive acknowledges and agrees that:
(a) Dominari shall be entitled to any costs of collection, including reasonable internal and external attorneys’ fees and the cost of defending any counterclaims. Said cost of collection shall include all incidental legal expense, travel costs, and forum costs, including such costs described in Section 6 below;
(b) Dominari reserves the right, without foreclosing any other remedy that may be available to it, to withhold and set off or deduct any indebtedness or amounts due hereunder against any compensation of any kind earned by Executive from Dominari or any of its affiliates but not yet paid to Executive to the fullest extent permissible under applicable law, along with any assets of Executive (individually, jointly with others, or in any other capacity) held at Dominari under this Agreement, all in accordance with applicable law; and
(c) Executive will execute a reaffirmation of the Loan under this Agreement prior to any discharge of debt under any bankruptcy or insolvency proceeding and file the reaffirmation, along with all required disclosures and statement of current income and expenses with the relevant court.
- Cost and Expenses. Executive will pay to Dominari all costs and expenses reasonably incurred by Dominari for the purpose of maintaining, preserving, or enforcing its rights hereunder, including:
(a) the cost of collection;
(b) costs of obtaining money damages; and
(c) fees for the services of internal and/or external attorneys, professionals and experts used by Dominari for any purpose related to this Agreement and/or the Loan, including consultation, drafting documents, sending notices, or instituting, prosecuting or defending litigation or arbitration, whether out of court, in trial, on appeal, in bankruptcy, or otherwise.
All costs and expenses shall be payable by Executive to Dominari upon demand and shall bear interest at the Default Rate from demand until paid in full.
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Registration. Executive understands and agrees that the Loan hereunder is conditioned on Executive being licensed to practice law in the State of New York and in good standing with the New York State Bar Association.
Set Off. Executive hereby grants to Dominari a right of deduction or set off for the Loan upon any and all moneys, securities, and other property of Executive and the proceeds thereof, now or hereafter held or received by or in transit to, Dominari, or at any affiliated entities, from or for Executive, to the fullest extent permissible under and subject to applicable law, and also upon any and all deposits (general or special) and credits of Executive at Dominari, or at any affiliated entities, at any time existing, subject to applicable law. Upon the occurrence of an Event pf Default, Executive hereby expressly authorizes Dominari to at any time and from time to time, without notice to Executive and within its sole discretion, to deduct, set off, appropriate, and apply any or all items referred to in this Section 8 against the Loan, including any interest due thereon.
Integration. Except to the extent referred to in the Executive Agreement, this Agreement (including the LSA and the Schedule, the terms of which are each hereby incorporated by reference and made a part hereof, any amendments, exhibits and addendums attached hereto) contains all of the agreements, representations and understandings made between the parties with respect to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of any kind, whether written or oral, and of every nature between them.
Consent to Injunctive Relief and/or Prejudgment Writ of Garnishment. Executive warrants, covenants, and agrees the Dominari shall have no adequate remedy at law for a breach of or violation of the covenants contained in this Agreement. Executive consents to the issuance of a temporary restraining order or a preliminary or permanent injunction, without the posting of a bond or other security, to prohibit or enjoin the breach of any provisions of this Agreement, or to maintain the status quo pending the outcome of any arbitration proceeding or lawsuit which may be initiated. Executive consents to a prejudgment writ of garnishment in court for any assets held (individually, jointly with others, or in any other capacity) outside of Dominari. Executive agrees that Dominari does not waive any remedy at law in its efforts to secure injunctive relief and/or a prejudgment writ of garnishment if it files suit in court, and specifically does not waive its right to arbitration of this Agreement. Executive also understands that Dominari may also be entitled to monetary damages, including, but not limited to, reasonable attorney’s fees, expenses and costs, in the event of a breach or violation of this Agreement by Executive, or any collection of this Agreement, in court and/or in arbitration.
Modification. This Agreement may not be modified except in writing signed by both parties. Oral modifications of this Agreement are void and unenforceable.
Termination. This Agreement (other than Sections 6 and 13, which shall survive) shall terminate upon Executive’s payment in full of the Loan Amount in accordance with Section 1.3 above.
Choice of Law. This Agreement shall be interpreted in accordance with the laws of the State of New York, without regard or giving effect to the conflict of laws principals or provisions of the State of New York law and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located in the State of New York.
Assignment.
14.1. Executive may not assign Executive’s rights or obligations under this Agreement.
14.2. Dominari may pledge, transfer and assign its rights, responsibilities and obligations in, to and under this Agreement, without the consent of any person, including without Executive’s consent.
Not an Employment Contract. Executive expressly acknowledges that this Agreement is not an employment contract or an agreement to employ Executive for a specified period of time or a promise of continued employment with Dominari for any period of time whatsoever. Any such rights, if any, are contained exclusively in the Executive Agreement.
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Severability; Usury.
16.1. Should any part of this Agreement for any reason be declared by any court (or arbitration panel) of competent jurisdiction to be legally invalid, void or unenforceable, such decision shall not affect the validity of the remaining portions of this Agreement, which remaining portions shall continue in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated therefrom, it being the intent of the parties that they would have executed the remaining portions of this Agreement without including any such part or portion which may for any reason be declared invalid, void or unenforceable.
16.2. If at any time and for any reason whatsoever, the interest rate payable on the Loan, including without limitation if the interest rate payable is the Default Rate, shall exceed the minimum rate of interest permitted to be charged by Dominari to Executive under applicable law, such interest rate shall be reduced automatically to the maximum rate of interest permitted to be charged under applicable law.
Waivers. Executive waives presentment, protest and notice of dishonor of any negotiable or commercial paper to which it is or may become a party, that may at any time come into the hands of Dominari shall not, by any act, delay, omission, or otherwise, be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by Dominari, and then only to the extent therein set forth. A waiver by Dominari of any rights or remedy on any one occasion shall not be construed as a bar to, or waiver of, any such right or remedy which Dominari would otherwise have on any subsequent occasion.
Further Assurances. Executive agrees to execute any further documents, and to take any further actions, reasonably requested by Dominari to effectuate the rights granted to Dominari herein.
Waiver of Garnishment of Wages. If Executive is a head of a family, Executive hereby knowingly, voluntarily, and intentionally waives any exemption Executive may have for attachment or garnishment of Executive’s disposable earnings in excess of $500.00 or a minimum amount per week or in excess of any other applicable threshold, and agrees that upon an Event of Default, Dominari may attach or garnish such disposable earnings, subject to any applicable federal, state or local law limitations. If Executive is not a head of a family, Executive understands the Dominari may attach or garnish Executive’s disposable earnings, subject only to any applicable federal, state of local law limitations. For those purposes, Executive’s “disposable earnings” means any earnings remaining after the deduction of any amounts required by law to be withheld.
Miscellaneous. In this Agreement, the terms “include”, “including” and “includes” are deemed to be followed by the words “without limitation”. The terms “hereof”, “hereunder” and “herein” shall refer to this Agreement as a whole and not to any particular section.
Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original and all of which together will be deemed one and the same document.
Confidentiality. THE EXISTENCE OF THE LOAN THAT IS THE SUBJECT OF THIS AGREEMENT SHALL BE KEPT IN STRICTEST CONFIDENCE BY EXECUTIVE AND SHALL NOT BE DISCLOSED EXCEPT IN RESPONSE TO A WRITTEN INQUIRY FROM A SELF REGULATORY ORGANIZATION, A PROPERLY ISSUED JUDICIAL PROCESS, A SUBPOENA FROM AN ARBITRATION PANEL OR FOR THE LIMITED PURPOSES OF ALLOWING EXECUTIVE TO PREPARE REQUIRED TAX REPORTING FORMS AND TO RESPOND TO INQUIRIES FROM STATE OR FEDERAL TAX AUTHORITIES.
Notice. In the event that Executive is served with judicial process, as subpoena from an arbitration panel or any other forum, or a written inquiry from any self-regulatory organization seeking disclosure of matters relating to the grant of existence of the Loan that is the subject of this Agreement, Executive shall immediately provide written notice of such process to Dominari in order that Dominari may seek to protect its interest in preserving the confidentiality of such matters. Nothing in this Agreement shall prohibit or limit Executive from initiating communications with, or responding to an inquiry from, any regulatory authority or governmental agency or entity, to report possible violations of federal law or regulation, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. No prior authorization from Dominari shall be required to make any such reports or disclosures and no notice is required to Dominari that such reports or disclosures have been made.
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Executive represents, warrants and acknowledges that, as of the Effective Date, (i) Executive has read and understands and consents to all of the terms and conditions of this Agreement, (ii) Executive had the opportunity to consult with independent legal counsel regarding the terms of this Agreement and that the execution of this Agreement is a voluntary act; and (iii) that Executive’s signature binds Executive to the terms of this Agreement.
| DOMINARI HOLDINGS INC. | |
|---|---|
| By: | /s/ Christopher Devall |
| Name: | Christopher Devall |
| Title: | Chief Operating Officer |
| MATTHEW B. MCCULLOUGH | |
| By: | /s/ Matthew B. McCullough |
| Title: | General Counsel |
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Appendix A
Loan Schedule and Acknowledgement
Dominari and Executive, as of the Effective Date, hereby agree and acknowledge the terms set forth below relating to the Loan set forth in the Agreement,. This Loan Schedule and Acknowledgement is hereby incorporated by reference in and forms a part of this Agreement. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Agreement.
| 1. | Loan Amount: one hundred thousand dollars ($100,000.00) |
|---|---|
| 2. | First Month of Payor Deductions: May 2023 |
| --- | --- |
| 3. | Last Month of Payor Deductions: May 2028 |
| --- | --- |
| DOMINARI HOLDINGS INC. | |
| --- | --- |
| By: | /s/ Christopher Devall |
| Name: | Christopher Devall |
| Title: | Chief Operating Officer |
Executive represents, warrants and acknowledges that, as of the Effective Date, (i) Executive has read and understands and consents to all of the terms and conditions of this Loan Schedule and Acknowledgement, (ii) Executive had the opportunity to consult with independent legal counsel regarding the terms of this Loan Schedule and Acknowledgement and that the execution of this Loan Schedule and Acknowledgement is a voluntary act; and (iii) that Executive’s signature binds to the terms of the Agreement.
Loan receipt agreed and acknowledged, and schedule accepted:
| MATTHEW B. MCCULLOUGH | |
|---|---|
| By: | /s/ Matthew B. McCullough |
| Title: | General Counsel |
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Loan Amortization Schedule
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Exhibit 10.3
EXHIBIT B
EXECUTIVE BONUS AGREEMENT
This Executive Bonus Agreement (this “Agreement”) is dated as May 1, 2023 (the “Effective Date”) and is entered into by and between Dominari Holdings Inc. (“Dominari”) and Matthew B. McCullough (the “Executive”).
WHEREAS, Executive has entered into a Employment Agreement with Dominari, dated as of May 1, 2023 (the “Executive Agreement”), wherein Dominari and Executive memorialized the terms under which the Executive shall conduct legal activities as an employee of Dominari; and
WHEREAS, In addition to the compensation to be paid to Executive under the Executive Agreement, Dominari wishes to pay a monthly bonus to Executive, as more particularly described herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and valuable considerations, the receipt, sufficiency and adequacy of which are hereby acknowledged, Dominari and Executive agree as follows:
Bonus. Dominari shall pay monthly to Executive the bonus amount (each a “Bonus Payment”), over the period and commencing on the date, set forth in Schedule A - Payment Information and Timing attached hereto, which forms a part of this Agreement and hereby is incorporated by reference herein. Schedule A may be updated periodically by Dominari in its sole direction.
Registration. Executive understands and agrees that payment of any Bonus Payment under this Agreement is conditioned on Executive satisfying all registration and licensing requirements, and all employment and other terms, as described in the Executive Agreement. Failure of Executive to satisfy said requirements and terms for any reason shall discharge all obligations of Dominari under this Agreement.
Timing of Payments. Bonus Payments will be made monthly during the first payroll period of the month. The Bonus Payments shall commence and the first Bonus Payment shall be made in the first payroll period of the second month of the second fiscal quarter of Executive’s employment with Dominari (as set forth in Schedule A).
Eligibility. Executive understands and agrees that certain conditions must be met on each payment date in order for him to be eligible for each Bonus Payment. Conditions of eligibility as of each of those dates are:
(a) Executive must satisfy all registration and licensure requirements, as described in Section 2 hereof.
(b) Executive continues to act in the capacity of internal legal counsel for Dominari (or one or more of its affiliates), and there has been no event of death or Disability of Executive.
(c) Executive is employed by Dominari and the Executive Agreement has not been terminated or voided, has not expired, and continues to govern the relationship between Dominari and Executive.
(d) Executive has not had any sanctions, fines, probations, or other censures levied by any regulatory body or agency, has complied with all practices and Policies and Procedures of Dominari. and all other terms of Executive’s employment with Dominari including the Executive Agreement, and is otherwise is in good and satisfactory standing with Dominari and any applicable regulatory or governing agency or entity, during the immediately preceding three (3)-month period, as determined by Dominari in its sole discretion.
(e) Other factors that may render Executive eligible or ineligible, as determined by Dominari in its sole and absolute discretion.
Additional Conditions. Executive understands and agrees that the Bonus Payments will not be paid to Executive if Executive is no longer employed by Dominari for any reason, or if there has been a death or Disability of Executive. Executive understands and agrees that in the event that Executive is not eligible or becomes ineligible for a Bonus Payment, the Bonus Payment will not be paid then or at any time thereafter, even if Executive is eligible for Bonus Payments in subsequent Bonus Payment periods.
Income Taxes. Executive expressly understands and agrees that all bonus payments are considered earned income in the year paid. Accordingly, Executive understands and agrees that Executive will be liable for all applicable taxes in connection with such earned income, and Dominari or its affiliates may withhold and pay over to any governmental authority any amounts it is obligated to withhold and deduct under law. Executive further agrees that any tax liability or other adverse tax consequences to Executive resulting from this Agreement, including the Bonus Payments hereunder, shall be the sole responsibility of, and will be borne entirely by, Executive, and Dominari shall have no responsibility nor liability whatsoever for same.
Performance Duties. It is a condition to Executive’s entitlement to Bonus Payments hereunder that Executive will comply with the rules and regulations of the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”), applicable regulatory agencies, self-regulatory organizations, local, state, and federal laws and the policies, plans and procedures of Dominari.
Termination. Dominari shall have the right to terminate this Agreement (immediately and without notice) upon the occurrence of the insolvency of, appointment of a receiver for, assignment for the benefit of creditors by, or the commencement of a proceeding under bankruptcy or insolvency law by or against, Executive, the termination of the Loan Agreement with Dominari dated as of the Effective Date (the “Loan Agreement”), or a breach of this Agreement or any other agreement Executive has entered into with Dominari, as determined by Dominari in its sole and absolute discretion.
Not an Employment Contract. Executive expressly acknowledges that this Agreement is not an employment contract, an agreement to employ Executive for a specific period of time, or a promise of continued employment with Dominari for any period of time whatsoever.
Integration. This Agreement (including Schedule A) contains all of the agreements, representations and understandings made between the parties with respect to the subject matter hereof, and supersedes all prior discussions, agreements, and understandings of any kind, whether written or oral, and of every nature between them.
Modifications. Except as otherwise provided herein, this Agreement may not be modified except in writing signed by both parties. Oral modifications of this Agreement are void and unenforceable.
Choice of Law. This Agreement shall be interpreted in accordance with the laws of the State if New York, without regard or giving effect to the conflict of laws principals or provisions of the State of New York law and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located in the State of New York.
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Assignment. Executive may not assign Executive’s rights or obligations under this Agreement. Dominari may assign this Agreement, including its rights, responsibilities, and obligations herein, without Executive’s consent. Notwithstanding the foregoing, Executive in the event of Executive’s permanent disability or Executive’s estate in the event of Executive’s death, and upon approval by Dominari, in its sole discretion, may assign and transfer the Executive’s remaining rights and obligations, if any, under this Agreement.
Waivers. Dominari’ failure to enforce a breach of any term of this Agreement shall not be construed to be a waiver of any subsequent or any breach, and no waiver shall be deemed made, unless the same is so acknowledged by Dominari in writing. Further, Dominari’s failure to exercise any right under this Agreement (or its partial exercise of any such right) shall not constitute a waiver if the right to exercise the same or any other right at another time.
Conflict. In the event of any conflict between the terms and conditions set forth in this Agreement and those set forth in the Executive Agreement or the Loan Agreement, the terms and conditions of this Agreement shall control.
Miscellaneous. In this Agreement, the terms “include”, “including” and “includes” are deemed to be followed by the words “without limitation”. The terms “hereof”, “hereunder” and “herein” shall refer to this Agreement as a whole and not to any particular section.
Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original and all of which together will be deemed one and the same document.
Confidentiality. THE EXIXTENCE OF THE BONUS THAT IS THE SUBJECT OF THIS AGREEEMNT SHALL BE KEPT IN STRICTEST CONFIDENCE BY EXECUTIVE AND SHALL NOT BE DISCLOSED EXCEPT IN RESPONSE TO A WRITTEN INQUIRY FROM A SELF REGULATORY ORGANIZATION, A PROPERLY ISSUED JUDICIAL PROCESS, A SUBPOENA FROM AN ARBITRATION PANEL OR FOR THE LIMITED PURPOSES OF ALLOWING EXECUTIVE TO PREPARE REQUIRED TAX REPORTING FORMS AND TO RESPOND TO INQUIRIES FROM STATE OR FEDERAL TAX AUTHORITIES.
Notice. In the event that Executive is served with judicial process, a subpoena from an arbitration panel or any other forum, or a written inquiry from any self-regulatory organization seeking disclosure of matters relating to the grant of existence of the Bonus Payments that are the subject of this Agreement, Executive shall immediately provide written notice of such process to Dominari in order that Dominari may seek to protect its interest in preserving the confidentiality of such matters. Nothing in this Agreement shall prohibit or limit Executive from initiating communications with, or responding to an inquiry from, any regulatory authority or governmental agency or entity, to report possible violations of federal law or regulation, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. No prior authorization from Dominari shall be required to make any such reports or disclosures and no notice is required to Dominari that such reports or disclosures have been made.
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Executive represents, warrants and acknowledges that, as of the Effective Date, (i) Executive has read and understands and consents to all of the terms and conditions of this Agreement, (ii) Executive has had the opportunity to consult with independent legal counsel regarding the terms of this Agreement and that the execution of this Agreement is a voluntary act; and (iii) that Executive’s signature binds Executive to the terms of this Agreement.
| /s/ Matthew B. McCullough | |
|---|---|
| Matthew B. McCullough, as Executive | |
| DOMINARI HOLDINGS INC. | |
| --- | --- |
| By: | /s/ Christopher Devall |
| Name: | Christopher Devall |
| Title: | Chief Operating Officer |
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SCHEDULE A
Payment Information and Timing
| 1. | Monthly<br> Bonus Payment Amount: {Bonus amount in words} ($______) |
|---|---|
| 2. | Period: For a period of sixty (60) months |
| --- | --- |
| 3. | Commencement of Bonus Payments: The second<br> month of the second fiscal quarter of Executive’s employment with Dominari. |
| --- | --- |
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