EXHIBIT 10.18
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “
Agreement ”) is entered into as of April 24,
2008, by and between PRO BRAND INTERNATIONAL, INC., a
Georgia corporation (the “ Company ”),
GRANAHAN MCCOURT ACQUISITION CORPORATION , a Delaware
corporation (“ Parent ”) and GEN CHU
(“CECILIA”) SHOU (“ Executive
”). In consideration of the mutual covenants and
agreements set forth herein, the parties agree as
follows:
1.
Purpose and Effective Date . On or about the date
hereof, the Company and Parent entered into or will enter into an
Agreement and Plan of Merger (the “ Merger Agreement
”), pursuant to which a wholly owned subsidiary of Parent
will merge into the Company and the Company will be the surviving
corporation (the “ Merger ”). The purpose
of this Agreement is to terminate all prior employment agreements
and similar arrangements between the Company, and any of its
affiliates, and Executive relating to the subject matter of this
Agreement, to recognize Executive’s significant contributions
to the overall financial performance and success of the Company, to
protect the Company’s business interests through restrictive
covenants, and to provide a single, integrated document which shall
provide the basis for Executive’s continued employment by
Parent and the Company. This Agreement will be effective upon
the closing of the Merger (the “ Effective Date
”). If, for any reason, the Merger is not completed or
effectuated, this Agreement shall be void and any prior agreements
relating to Executive’s employment with the Company shall
remain in effect.
2.
Employment and Duties . Subject to the terms and
conditions of this Agreement, the Company employs Executive to
serve as President. Executive accepts such employment and
agrees to undertake and discharge the duties, functions and
responsibilities commensurate with the aforesaid position and such
other duties and responsibilities as may be prescribed from time to
time by the Board of Directors of the Company (the “
Board ”) and/or the Chief Executive Officer (the
“ CEO ”). Executive shall devote
substantially all of her business time, attention and effort to the
performance of her duties hereunder and shall not engage in any
business, profession or occupation, for compensation or otherwise
without the express written consent of the Board, other than
personal, personal investment, charitable, or civic activities or
other matters that do not conflict with Executive’s
duties.
3.
Term . The term of Executive’s employment
pursuant to this Agreement shall commence on the Effective Date
and, unless terminated as set forth in Section 9, continue for
a period of three (3) years ending on the third anniversary of
the Effective Date (the “ Employment Term
”). On such third anniversary, the Employment Term
shall terminate unless the parties mutually agree to extend the
Employment Term. If Executive is employed by the Company
beyond the expiration of the Employment Term, Executive’s
employment with the Company shall be “at-will.”
Notwithstanding any termination of the Employment Term or
Executive’s employment, Sections 9 and 10 shall remain in
effect until all obligations and benefits that accrued prior to
termination are satisfied.
4.
Salary . During the Employment Term, the Company shall
pay Executive an annual base salary, before deducting all
applicable withholdings, of no less than $240,000 per year, payable
at the time and in the manner dictated by the Company’s
standard payroll policies. Such minimum annual base salary
may be periodically reviewed and increased (but not
decreased without Executive’s express
written consent) at the discretion of the Compensation Committee of
the Board of Directors of Parent (the “ Compensation
Committee ”) to reflect, among other matters, cost of
living increases and performance results (such annual base salary,
including any increases pursuant to this Section 4, the
“ Annual Base Salary ”).
5.
Other Compensation and Fringe Benefits .
(a)
Executive shall be entitled to participate in all benefit, pension,
savings, welfare, perquisite and other plans or arrangements that
the Company may establish from time to time for its senior
executive officers, subject to the terms and conditions of such
plans or arrangements. Such plans or arrangements shall be no
less favorable to Executive than those provided to Executive by the
Company as of December 31, 2007.
(b)
Executive shall be eligible to receive an annual incentive bonus
opportunity for each calendar year included in the Employment Term,
with such opportunity to be earned based upon attainment of
performance objectives established by the Compensation Committee
after consultation with the Company’s Chief Executive Officer
(“ Annual Bonus ”). Executive’s
target Annual Bonus shall be no less than 50% of Executive’s
Annual Base Salary (the target is referred to as the “
Annual Bonus Opportunity ”). Executive’s
Annual Bonus Opportunity may be periodically reviewed and increased
(but not decreased without Executive’s express written
consent) at the discretion of the Compensation Committee. The
Annual Bonus shall be paid no later than the March 15
th first following the calendar year to which the Annual
Bonus relates. Unless provided otherwise herein or the
Compensation Committee determines otherwise, no Annual Bonus shall
be paid to Executive unless Executive is employed by the Company,
or an affiliate thereof, on the Annual Bonus payment date.
(c)
Executive shall be eligible to participate in Parent’s equity
incentive plans with periodic equity grants comparable to those
made to other similarly situated top executives of Parent.
(d)
Subject to Executive’s continued employment through the date
the relevant EBITDA target is satisfied and subject to such other
terms and conditions determined by the Compensation Committee to be
necessary or appropriate, Executive shall, in the sole discretion
of the Compensation Committee, be entitled to an additional bonus
if, following the acquisition by Parent or the Company of another
company or business or the assets of another company or business,
the EBITDA targets established by the Compensation Committee
related to such acquired business are satisfied.
6.
Management Retention Bonus .
(a)
Subject to Section 6(b), as consideration for entering into
this Agreement and in addition to any other salary, bonus,
compensation or benefits to which Executive may be entitled,
Executive shall be entitled to the following retention
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management bonus payments (the “
Management Retention Bonus ”). On each of the
first and second anniversaries of the Effective Date, the Company
shall pay Executive a cash, lump sum amount equal to $940,000, less
any applicable withholdings. A termination of
Executive’s employment prior to any payment date shall not
impact, or in any way alter or release the Company’s
obligation to pay, the Management Retention Bonus as provided
above, unless Executive is terminated by the Company for Cause
pursuant to clause (i), (ii) or (iii) of the definition
of “Cause” in Section 9(d) of this Agreement
(but excluding a termination for Cause as defined in
Section 9(d)(iv)), in which case, the Company shall have no
further obligation to pay any unpaid portion of the Management
Retention Bonus.
(b)
Notwithstanding anything contained in this Agreement to the
contrary if any portion of the Management Retention Bonus would
constitute a “parachute payment” under section 280G of
the Internal Revenue Code of 1986, as amended (the “
Code ”), and the regulations promulgated thereunder,
then, notwithstanding anything in this Agreement to the contrary,
unless the shareholder approval described below is obtained, the
Management Retention Bonus shall be reduced (but not below zero) to
the extent necessary to cause the payments thereof not to be
“parachute payments” under section 280G of the Code and
Executive shall have no further rights or claims with respect to
the reduced portion. Prior to the Closing Date, the Company
shall seek shareholder approval in accordance with
Section 280G(b)(5) of the Code of that portion of the
Management Retention Bonus that would, absent such shareholder
approval, be subject to the imposition of an excise tax under
Section 4999 of the Code or that would not be deductible by
reason of Section 280G of the Code. The Company shall
give Parent a reasonable opportunity to comment on the forms of
such consent and any related documentation sent to shareholders for
this purpose.
7.
Vacation . For and during each calendar year within
the Employment Term, Executive shall be entitled to reasonable paid
vacation periods consistent with Executive’s position and in
accordance with the Company’s standard policies, or as the
Board may approve; provided, however, that for each calendar year,
Executive shall be entitled to no less than four (4) weeks of
paid vacation. In addition, Executive shall be entitled to
such holidays consistent with the Company’s standard
policies.
8.
Expense Reimbursement . In addition to the
compensation and benefits provided herein, the Company shall, upon
receipt of appropriate documentation, reimburse Executive each
month for her reasonable travel, lodging, entertainment, promotion
and other ordinary and necessary business expenses to the extent
such reimbursement is permitted under the Company’s expense
reimbursement policy.
9.
Termination of Employment . The Company or Executive
may terminate Executive’s employment at any time and for any
reason in accordance with Section 9(a) below. The
Employment Term shall be deemed to have ended on the last day of
Executive’s employment. The Employment Term shall
terminate automatically upon Executive’s death.
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(a)
Notice of Termination . Any purported termination of
Executive’s employment (other than by reason of death) shall
be communicated by written Notice of Termination (as defined
herein) from one party to the other in accordance with the notice
provisions contained in Section 27. For purposes of this
Agreement, a “ Notice of Termination ” shall
mean a notice that indicates the Date of Termination (as that term
is defined in Section 9(b)) and, with respect to a termination
due to Cause (as that term is defined in Section 9(d)),
Disability (as that term is defined in Section 9(e)) or Good
Reason (as that term is defined in Section 9(f)), sets forth
in reasonable detail the facts and circumstances that are alleged
to provide a basis for such termination. A Notice of
Termination from the Company shall specify whether the termination
is with or without Cause or due to Executive’s
Disability. A Notice of Termination from Executive shall
specify whether the termination is with or without Good
Reason.
(b)
Date of Termination . For purposes of this Agreement,
“ Date of Termination ” shall mean the date of
Executive’s death or the date specified in the Notice of
Termination (but in no event shall such date be earlier than the
thirtieth (30 th ) day following the date the Notice of
Termination is given). For the avoidance of doubt, following
the delivery of a Notice of Termination by the Company for a reason
other than Cause, death or Disability or by Executive for Good
Reason, and prior to the Date of Termination, Executive shall
continue to provide services to the Company by devoting not less
than 20% of the average time that Executive had devoted to
Executive’s duties to the Company during the 36 months
immediately prior to the delivery of such Notice of Termination,
and shall cease to provide services to the Company on the Date of
Termination.
(c)
No Waiver . The failure to set forth any fact or
circumstance in a Notice of Termination, which fact or circumstance
was not known to the party giving the Notice of Termination when
the notice was given, shall not constitute a waiver of the right to
assert such fact or circumstance in an attempt to enforce any right
under or provision of this Agreement.
(d)
Cause . For purposes of this Agreement, a termination
for “ Cause ” means a termination by the Company
based upon: (i) Executive’s conviction of, or
plea of guilty or nolo contendere to, a felony, (ii)
willful violation or gross neglect of Executive’s
material duties and responsibilities that results in material
detriment to the Company, (iii) Executive engages in
conduct involving fraud or dishonesty that results in material
detriment to the Company, or (iv) Executive materially
breaches the terms of this Agreement in a manner that results in
material detriment to the Company.
(e)
Disability . For purposes of this Agreement, a
termination based upon “ Disability ” means a
termination of Executive’s employment by the Company based
upon Executive’s entitlement to long-term disability benefits
under the Company’s long-term disability plan or policy, as
in effect on the Date of Termination, or if no such policy, based
on Executive’s inability to engage in any substantial gainful
activity by reason of any medically determinable physical or
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mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, as determined by the Board in good
faith.
(f)
Good Reason . For purposes of this Agreement, a
termination for “ Good Reason ” means a
termination by Executive during the Employment Term based upon the
occurrence (without Executive’s express written consent) any
of the following:
(i)
a material diminution in Executive’s Annual Base Salary;
(ii)
a material diminution in Executive’s authority, duties, or
responsibilities;
(iii)
a requirement that Executive have a reporting relationship other
than as set forth in Section 2, if such change would result in
a material diminution in the authority, duties or responsibilities
of the person to whom the Executive is required to report;
(iv)
a material change in the geographic location of Executive’s
principal place of employment (excluding reasonable and customary
business travel on Company business); or
(v)
a material breach by the Company of any of its obligations under
this Agreement.
Executive’s
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting
Good Reason hereunder; provided, however, that no such event
described above shall constitute Good Reason unless:
(1) Executive gives Notice of Termination to the Company
specifying the condition or event relied upon for such termination
within ninety (90) days of the initial existence of such condition
or event; and (2) the Company fails to cure the condition or
event constituting Good Reason within thirty (30) days following
receipt of Executive’s Notice of Termination.
10.
Obligations of the Company Upon Termination .
(a)
Termination by the Company for a Reason Other than Cause, Death
or Disability and Termination by Executive for Good Reason .
If Executive’s employment is terminated during the
Employment Term by: (1) the Company for any reason other than
Cause, Death or Disability; or (2) Executive for Good
Reason:
(i)
the Company shall pay Executive the following (collectively, the
“ Accrued Obligations ”): (A)
within five (5) business days after the Date of
Termination, any earned but unpaid Annual Base Salary; (B)
within a reasonable time following submission of all
applicable documentation and in accordance with the Company’s
expense reimbursement policy, any expense reimbursement payments
owed to Executive for expenses incurred prior to the Date of
Termination; (C) no later than March 15th of the
year in which the Date of Termination occurs, any earned but unpaid
Annual Bonus payments relating to the prior calendar year; and
(D) no
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later than March 15 th of the
calendar year following the year in which the Date of Termination
occurs, a prorated Annual Bonus based upon the actual Annual Bonus
that would have been earned by Executive for the year in which the
Date of Termination occurs (based upon the actual
satisfaction of the applicable performance measures, but ignoring
any requirement that Executive must be employed on the payment
date; and provided, that, if the Compensation Committee elects to
exercise any permitted discretion to reduce Executive’s
actual Annual Bonus, the discretion applied to Executive shall be
the same as the discretion applied to other senior executives of
Parent or the Company whose employment did not terminate)
multiplied by the percentage of the calendar year completed before
the Date of Termination;
(ii)
the Company shall pay Executive, within thirty (30) business days
after the Date of Termination, a lump-sum payment equal to 200% of
the sum of: (A) Executive’s Annual Base Salary in effect
immediately prior to the Date of Termination (disregarding any
reduction in Annual Base Salary to which
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