EMPLOYMENT AGREEMENTEmployee Retention Agreement |
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GRANAHAN MCCOURT ACQUISITION CORP | PRO BRAND INTERNATIONAL, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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EXHIBIT 10.19
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 JAMES CROWNOVER (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 Executives significant contributions to the overall financial performance and success of the Company, to protect the Companys business interests through restrictive covenants, and to provide a single, integrated document which shall provide the basis for Executives 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 Executives 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 Chief Operating Officer. 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 his business time, attention and effort to the performance of his 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 Executives duties.
3. Term. The term of Executives 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, Executives employment with the Company shall be at-will. Notwithstanding any termination of the Employment Term or Executives 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 Companys standard payroll policies. Such minimum annual base salary may be periodically reviewed and increased (but not
decreased without Executives 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 Companys Chief Executive Officer (Annual Bonus). Executives target Annual Bonus shall be no less than 50% of Executives Annual Base Salary (the target is referred to as the Annual Bonus Opportunity). Executives Annual Bonus Opportunity may be periodically reviewed and increased (but not decreased without Executives express written consent) at the discretion of the Compensation Committee. The Annual Bonus shall be paid no later than the March 15th 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 Parents equity incentive plans with periodic equity grants comparable to those made to other similarly situated top executives of Parent.
(d) Subject to Executives 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). Beginning on the first day of the first calendar month following the Effective Date and on the first day of each calendar month thereafter for a total of 36 months, the Company shall pay Executive a cash, lump sum amount equal to $34,166.66, less applicable withholdings. A termination of Executives employment prior to any payment date shall not impact, or in any way alter or release the Companys 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 Executives position and in accordance with the Companys 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 Companys 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 his reasonable travel, lodging, entertainment, promotion and other ordinary and necessary business expenses to the extent such reimbursement is permitted under the Companys expense reimbursement policy.
9. Termination of Employment. The Company or Executive may terminate Executives 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 Executives employment. The Employment Term shall terminate automatically upon Executives death.
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(a) Notice of Termination. Any purported termination of Executives 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 Executives 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 Executives death or the date specified in the Notice of Termination (but in no event shall such date be earlier than the thirtieth (30th) 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 Executives 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) Executives conviction of, or plea of guilty or nolo contendere to, a felony, (ii) willful violation or gross neglect of Executives 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 Executives employment by the Company based upon Executives entitlement to long-term disability benefits under the Companys long-term disability plan or policy, as in effect on the Date of Termination, or if no such policy, based on Executives 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 Executives express written consent) any of the following:
(i) a material diminution in Executives Annual Base Salary;
(ii) a material diminution in Executives 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 Executives 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.
Executives 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 Executives 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 Executives 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 Companys 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 15th 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 Executives 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) Executives Annual Base Salary in effect immediately prior to the Date of Termination (disregarding any reduction in Annual Base Salary to which Executive did not expressly consent in writing); and (B) the greater of the target Annual Bonus Opportunity in the year in which the Date of Termination occurs or the average Annual Bonus paid to Executive by the Company for the three (3) years preceding his termination of employment;






