EXHIBIT 10.4
EXECUTION COPY
EMPLOYMENT AGREEMENT
GREG C. MOSHER
THIS EMPLOYMENT AGREEMENT (this “
Agreement ”) is entered into as of August __,
2008, by and among Workflow Management, Inc., a Delaware
corporation (the “ Company ”), Enterprise
Acquisition Corporation, a Delaware corporation (the “
Parent ” and, together with the Company, the “
Employer ”), which will become the Company’s
parent as described in the Recitals below, and Greg C. Mosher
(“ Employee ”).
Recitals
A. Employee and the Company are parties
to that certain Amended and Restated Employment Agreement dated
November 18, 2005 (the “ Prior Employment
Agreement ”), pursuant to which Employee has, among other
responsibilities, served as Chief Executive Officer and Chairman of
the Company.
B. Employee is a party to several
agreements (all such agreements are, collectively, the “
Prior Stock Agreements ”) pursuant to which Employee
was granted, under various terms and conditions, stock or options
to purchase stock of WF Holdings, Inc. and of WF Capital Holdings,
Inc. (“ Capital Holdings ”).
C. The Employer and Employee desire to
enter into this Agreement to supersede and replace the Prior
Employment Agreement and the Prior Stock Agreements, effective upon
and subject to the closing of the acquisition by the Parent of all
of the capital stock of Capital Holdings, pursuant to that certain
Agreement and Plan of Merger (the “ Workflow Merger
”), dated as of August 23, 2008, among the Parent, Capital
Holdings, and several other parties (the “ Merger
Agreement ”). The effective date of the Workflow
Merger shall be the effective date of this Agreement and shall be
referred to herein as the “ Effective Date .”
Should the Workflow Merger contemplated by the Merger
Agreement not be consummated, the Prior Employment Agreement and
the Prior Stock Agreements shall each remain in full force and
effect and this Agreement shall be void and without
effect.
D. Contemporaneously with the
consummation of the Workflow Merger, Employee will receive the
merger consideration set forth in Article II of the Merger
Agreement in the form of common stock, par value $0.0001, of
the Parent (such stock is the “ Merger Consideration
Stock ”).
E. Effective as of the Effective Date,
the Employer desires to continue to employ Employee, and Employee
is willing to continue to be employed by the Employer, upon the
terms and subject to the conditions set forth herein.
Agreement
NOW, THEREFORE, in consideration of the
mutual promises and obligations contained herein, intending to be
legally bound hereby, the Employer agrees to employ Employee, and
Employee hereby agrees to be employed by the Employer, upon the
following terms and conditions:
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ARTICLE I
EMPLOYMENT AND COMPENSATION
1.01 Office and Duties .
Employee is hereby employed as President and Chief Executive
Officer of the Company and each of the Company’s subsidiaries
(the Company’s subsidiaries, the Employer and the
Employer’s subsidiaries are, collectively, the “
Employer Group ”) and shall serve as Chairman of the
Company’s Board of Directors (the “ Board
”) and the Board of Directors of each subsidiary of the
Company. In addition, Employee shall serve as Chief Executive
Officer of the Parent, and the Parent and the board of directors of
the Parent (the “ Parent Board ”) shall take all
commercially reasonable efforts (including without limitation
nominating Employee) so that Employee is a director and the
Chairman of the Parent Board. In such capacity, Employee
shall (a) report to the Parent Board, (b) oversee the recruitment
and hiring of staff and executive personnel for the Employer Group,
(c) subject to the direction and control of the Parent Board,
supervise all business activities and affairs of the Employer
Group, and (d) perform such other duties as reasonably assigned by
the Parent Board consistent with the Employee’s position.
The hiring of all officers and senior level management within
the Employer Group (which shall include presidents and principal
financial officers of the Employer Group and each of its principal
business units) shall be recommended by Employee, and, if so
approved by the Parent Board, Employee shall make all offers of
employment to such Employer Group personnel. Employee shall
use Employee’s best efforts and abilities on a full business
time basis in the performance of Employee’s duties hereunder
and shall not be actively involved in any other trade or business
(as an employee or in any other capacity); provided, that, so long
as such activities do not materially interfere with
Employee’s performance of Employee’s duties and
responsibilities under this Agreement, Employee may continue to
serve in a non-executive capacity on the board of directors of the
entities previously disclosed to the Parent Board and on any other
board of directors approved in advance by the Board. Employee
agrees to serve as a member of the board or as an officer of any
direct or indirect affiliate of the Employer at no additional
compensation to Employee. Employee agrees that
Employee’s duties shall be performed substantially at the
Company’s principal place of business in Stamford,
Connecticut; provided that Employee acknowledges that performance
of Employee’s duties will require a reasonable amount of
travel in view of the fact that the Company’s main operations
are not located in Greenwich, Connecticut.
1.02 Term . Subject to the
terms and provisions of Article III hereof, Employee’s
employment hereunder shall commence as of the Effective Date and
shall continue for an initial period of five years from such date
(the “ Initial Term ”) and shall thereafter be
automatically extended for one or more additional one-year periods
(each, a “ Renewal Period ”), unless the Parent
Board provides at least six (6) months, or Employee provides at
least forty-five (45) days, written notice to the other prior to
the expiration of the Initial Term, or the Parent Board or Employee
provides at least forty-five (45) days written notice prior to the
expiration of any Renewal Period, as the case may be, of an
intention not to renew such employment or unless such employment is
sooner terminated during such Initial Term or any Renewal Period as
permitted by this Agreement. The Initial Term and any Renewal
Period(s), as the same may be sooner terminated, shall be
collectively referred to herein as the “ Term
.”
1.03 Base Salary . During
the Term and for all services rendered by Employee during the Term,
the Employer shall pay Employee a base salary at the rate of
$1,250,000 per annum (such base salary, as subject to increase from
time to time as set forth below, the “ Base Salary
”), payable
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in installments in accordance with the
Employer’s policies and practices from time to time, but no
less frequently than monthly. The Base Salary shall be
reviewed annually by the compensation committee of the Parent Board
(the “ Compensation Committee ”) and may be
adjusted upwards at any time in the sole discretion of the
Compensation Committee.
1.04 Bonus . With respect to
each fiscal year of the Parent ending during the Term, Employee
shall be eligible to receive an annual incentive bonus (the “
Incentive Bonus ”) in an amount equal to 100% of his
Base Salary, subject to the achievement of performance goals
established by the Compensation Committee in its sole discretion;
provided, however, that the Employee will at least receive 40% of
the Incentive Bonus during each applicable fiscal year (the “
Minimum Annual Bonus ”). The Incentive Bonus
shall be payable within thirty (30) days after completion of the
audit for the Parent’s fiscal year for which such annual
bonus relates, but in no event later than two and one-half (2
½) months following the end of such fiscal year.
Employee must be employed by the Employer on the last day of
the fiscal year to receive the Incentive Bonus; provided, however,
that with respect to the fiscal year in which Employee’s
employment is terminated other than by the Employer for Cause or by
Employee other than for Good Reason, he shall receive an amount
equal to the product of the Incentive Bonus he would have received
had he remained employed on the last day of such fiscal year
multiplied by the percentage of days during the fiscal year prior
to the Termination Date during which he was employed, such amount
to be paid at the same time as the Incentive Bonus would have been
paid to Employee if he had remained employed on the last day of
such fiscal year.
1.05 Expenses . The Employer
shall reimburse Employee for all reasonable out-of-pocket expenses
incurred by Employee in the ordinary course of the Employer’s
business and properly incurred and reported to the Employer in
accordance with its expense reimbursement policies and procedures.
Notwithstanding anything herein to the contrary or otherwise,
except to the extent any expense, reimbursement or in-kind benefit
provided pursuant to this Section 1.05 does not constitute a
“deferral of compensation” within the meaning of
Section 409A : (a) the amount of expenses eligible for
reimbursement or in-kind benefits provided to Employee during any
calendar year will not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided to Employee in any other
calendar year, (b) the reimbursements for expenses for which
Employee is entitled to be reimbursed shall be made on or before
the last day of the calendar year following the calendar year in
which the applicable expense is incurred and (c) the right to
payment or reimbursement or in-kind benefits hereunder may not be
liquidated or exchanged for any other benefit.
1.06 Employee Benefits . At
all times during the Term, Employee shall be entitled to employee
benefits in accordance with the benefit programs and policies of
the Employer generally available to executive employees as adopted
from time to time by the Board (including, without limitation, any
disability insurance policy for senior executives of the Employer
and the Executive Health Reimbursement Program). As Chief
Executive Officer, Employee shall be entitled to five weeks of
vacation during each calendar year. Upon termination of
Employee’s employment with the Employer, Employee shall no
longer be eligible for coverage under the Employer’s benefit
programs, except that Employee may elect coverage under the
Employer’s medical or dental insurance plans for the maximum
period permitted by Section 4980B of the Internal Revenue Code of
1986, as amended (the “ Code ”).
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1.07 Director and Officer Insurance
and Indemnification . The Employer shall obtain and pay
the premiums for a director and officer insurance policy with scope
and amounts of coverage consistent with coverage provided to other
members of the Board and shall name Employee as an insured under
the policy with the same coverage as other current and former
directors and officers of Parent. The Employer shall further
indemnify and hold harmless Employee under the Employer’s
certificate of incorporation and by-laws in effect from time to
time to the fullest extent permitted under applicable law.
Notwithstanding anything to the contrary in the foregoing
policy, certificate of incorporation, or by laws, in the event of
indemnification of Employee, Employee shall be advanced his
attorney’s legal fees and costs; provided that the Company
shall have the right to select legal counsel, subject to
Employee’s approval (not be unreasonably
withheld).
1.08 Withholdings and Taxes .
All payments made to Employee hereunder shall be subject to
all necessary withholding obligations as required by applied law.
1.09 Section 409A .
(a) It is the intent of the parties to
this Agreement that no payments under this Agreement be subject to
the additional tax on deferred compensation imposed by Section 409A
of the Internal Revenue Code of 1986, as amended from time to time,
and its implementing regulations and guidance (“ Section
409A ”). To the extent that parties determine that
the Employee would be subject to the additional 20% tax imposed on
certain deferred compensation arrangements pursuant to
Section 409A as a result of any provision of this Agreement,
such provision shall be deemed amended in the manner that, in the
parties’ judgment, fulfills the intent of the parties and
avoids application of such additional tax, and the parties hereby
agree to promptly execute any amendment reasonably necessary
to implement Section 1.09.
(b) Except as otherwise specifically
provided, amounts payable under this Agreement, other than those
expressly payable on a deferred or installment basis, will be paid
as promptly as practicable after earned or vested and, in any
event, within two and one-half (2 ½) months after the end of
the first calendar year in which such amounts are no longer subject
to substantial risk of forfeiture, as such term is defined in
Section 409A.
(c) Notwithstanding any other provision
of this Agreement, if Employee is a “specified
employee” within the meaning of Section 409A, any payments to
be made upon Separation from Service (as defined below), will be
delayed at least six months from Employee’s Termination Date,
but only to the extent such payments constitute "deferred
compensation" under Section 409A.
(d) With respect to payments under this
Agreement, for purposes of Section 409A, each severance payment and
COBRA continuation reimbursement payment will be considered one of
a series of separate payments. Notwithstanding any other provision
of this Agreement, Employee’s Termination Date shall occur
when Employee's "separation from service" occurs pursuant to
Section 409A (" Separation from Service "). Furthermore, for
purposes of this Agreement the terms "termination of service",
"termination of employment" and other terms to that effect shall
mean Separation from Service.
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1.10 Promissory Note. The
remaining outstanding principal balance of that certain Promissory
Note, dated November 30, 2005, from Greg Mosher to the Company in
the original principal amount of $1,000,000 and an Amended and
Restated Promissory Note, dated November 30, 2005, from Greg Mosher
to WF Holdings in the original principal amount of $1,352,872
(collectively, the “ Promissory Notes ”) and any
accrued and unpaid interest thereon shall be forgiven in full
immediately prior to the effective time of the Workflow Merger and,
within five (5) business days following the Effective Date, the
Employer shall pay in cash to Employee an amount sufficient to make
Employee whole on an after tax basis for any federal income tax
imposed pursuant to Section 61 of the Code, and state and local
income taxes incurred by Employee with respect to such forgiveness
and such payment (the “ Promissory Note Tax Gross-Up
Amount ”). Without limiting the foregoing, for
avoidance of doubt, it is understood that Employee shall not be
made whole with respect to any tax imposed pursuant to Section 4999
of the Code. The Promissory Note Tax Gross-Up Amount shall be
calculated at Employer’s cost and expense by Employer’s
independent auditors (the “ Auditor ”), and its
determination of the Promissory Note Tax Gross-Up Amount shall be
final and binding upon both Employee and the Employer. The
Employer and Employee shall each provide the Auditor with such
information as it may reasonably request in order to calculate the
Promissory Note Tax Gross-Up Amount. In calculating the
Promissory Note Tax-Gross Up Amount, Employee shall be deemed (a)
to pay federal income taxes at the highest marginal rate of federal
income taxation for the calendar year in which the Promissory Note
Tax Gross-Up Amount is to be paid, and (b) to pay any applicable
state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Promissory Note Tax
Gross-Up Amount is to be paid, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes if paid in such year.
ARTICLE II
RESTRICTED STOCK AND RESTRICTED STOCK UNIT
GRANTS
2.01 Restricted Stock Grant .
On the Effective Date, the Compensation Committee shall grant
to Employee (“ Initial Grant ”) a number of
shares of the common stock of the Parent (“ Parent Common
Stock ”), such that immediately following the Initial
Grant, the sum of the shares in respect of the Initial Grant plus
the Merger Consideration Stock owned by Employee equals 6% of
fully-diluted Parent Common Stock (calculated excluding outstanding
stock warrants and stock granted pursuant to the stock incentive
plan to be adopted by Employer in connection with the Workflow
Merger) as of the Effective Date. On the Effective Date, the
Compensation Committee shall also grant Employee a number of
restricted stock units equal to 2% of fully-diluted Parent Common
Stock as of the Effective Date (the “ RSUs
”).
2.02 Vesting . The RSUs shall vest
and thereby become non-forfeitable in three (3) equal installments
on each of the first, second and third anniversaries of the
Effective Date, provided Employee is employed by the Employer on
such dates (each such date, the “ RSU Vesting Date
”). Notwithstanding the foregoing, any unvested RSUs
shall automatically vest and become non-forfeitable upon the
earlier (such date, the “ Accelerated Vesting Date
”) of (a) a Change in Control Event (“ Change in
Control Event ” shall have the meaning set forth in
Section 409A of the Code) that occurs while Employee is employed by
the Employer or (b) a termination of Employee’s employment by
the Employer without Cause or by Employee for Good Reason (each, a
“ Qualifying Termination ”).
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Any unvested RSUs shall be automatically
forfeited upon the termination of Employee’s employment with
the Employer other than due to a Qualifying Termination. The
agreement evidencing the grant of RSUs shall provide for the right
to receive dividend equivalents and shall provide the Employee with
the right to require the Company to reduce the number of RSUs
otherwise deliverable to the Employee to cover minimum required
withholdings. The Company shall promptly remit the amounts of
such withholding to the appropriate taxing authority. The
Company shall take all actions necessary such that there is no
prohibition on the Company from withholding sufficient number of
shares otherwise deliverable to the Employee in order to satisfy
any withholding obligations that may arise in connection with the
settlement of the RSUs.
2.03 Settlement of
RSUs . The RSUs shall be settled in Parent Common Stock
within three (3) business days following the earlier of the
applicable RSU Vesting Date or the Accelerated Vesting Date.
2.04 Governing Plan .
T he RSU grant shall be made pursuant to, and shall be
subject to the terms and conditions of the Parent’s 2008
Omnibus Incentive Plan and the restricted stock unit agreement
pursuant to which the RSUs will be granted. In the event of
any conflict between the terms of this Article II and the terms of
such plan or restricted stock unit agreement, the terms of this
Article II shall control.
2.05 Additional Bonus . The
parties recognize that the Initial Grant will cause Employee to
recognize “ordinary” taxable income under Section 61 of
the Code and similar state and/or local laws (collectively “
Income Tax ”). The Employer agrees that upon
each receipt by Employee of the shares underlying the Initial
Grant, the Employer shall make Employee whole by paying an
additional bonus (the “ Additional Bonus ”) such
that after payment of the Additional Bonus, Employee’s net
after-tax position with respect to Income Tax is the same as it
would have been had the Initial Grant been taxed at a long-term
capital gains rate (as in effect on the Effective Date) and not
ordinary income. Without limiting the foregoing and for
avoidance of doubt, it is understood that Employee shall not be
made whole with respect to any tax imposed pursuant to Section 4999
of the Code. The Additional Bonus shall be paid on the
Effective Date and will be calculated in the manner contemplated by
this Section 2.05. The amount of the Additional Bonus shall
be deducted from any amount that may otherwise be payable to
Employee under the Cash Bonus Plan described and defined in Section
6.23 of the Merger Agreement. In calculating the Additional
Bonus, Employee shall be deemed (a) to pay federal income taxes at
the highest marginal rate of federal income taxation for the
calendar year in which the Additional Bonus is paid, and (b) to pay
any applicable state and local income taxes at the highest marginal
rate of taxation for the calendar year in which the Additional
Bonus is paid, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local
taxes if paid in such year.
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ARTICLE III
TERMINATION
Employee’s employment shall
terminate upon the first to occur of the following:
3.01 Termination by the Employer for
Cause . The Employer may terminate Employee for “
Cause ” at any time by delivering to Employee written
notice of such termination (the effective date of the termination
of Employee’s employment is the “ Termination
Date ”). Such notice shall terminate
Employee’s employment and all obligations of the Employer
under this Agreement, except (a) any obligations with respect to
the payment of accrued and earned but unpaid Base Salary as of the
Termination Date, (b) the unpaid portions of the Promissory Note
Tax Gross-Up Amount and the Additional Bonus, and (c) vested
benefits, if any, owed to Employee under the terms of the employee
benefit plans referenced in Section 1.06 in accordance with their
terms, ((a), (b) and (c) are, collectively, the “ Accrued
Obligations ”). “ Cause ” shall
mean Employee’s (i) commission of an act which constitutes
common law fraud, embezzlement or a felony, or of any tortious or
unlawful act, in each case causing material harm to the business,
standing or reputation of the Employer Group, (ii) ongoing refusal
or the deliberate and consistent refusal to conform to or follow
any reasonable lawful policy adopted by the Parent Board,
(iii) material breach by Employee of this Agreement, or (iv) a
determination by the majority of the members of the Parent Board
that the Executive has breached his fiduciary duties to Employer;
provided, however, that none of the foregoing (i) through (iv)
shall constitute Cause unless and until Employee receives ten (10)
days’ prior written notice describing such act allegedly
constituting Cause, such act is not cured (to the extent curable)
within fourteen (14) days following such written notice, and
Employee was given an opportunity to appear before the Parent Board
with his counsel during such fourteen (14) day period.
3.02 Termination by Employee for Good
Reason . Employee may terminate his employment for Good
Reason. “ Good Reason ” shall mean,
without Employee’s express written consent, the occurrence of
any of the following circumstances unless, if correctable, such
circumstances are fully corrected within thirty (30) days of the
notice of termination from Employee to the Parent Board given in
respect thereof (which notice is given within ninety (90) days of
the occurrence):
(a) The assignment to Employee of duties
materially inconsistent with Employee’s position and status
hereunder, or an alteration, materially adverse to Employee, in the
nature of Employee’s duties, responsibilities, and
authorities, Employee’s positions or the conditions of
Employee’s employment from those specified in Section 1.01
(including without limitation his no longer serving as President or
Chief Executive Officer of the Company, on the Board, as Chief
Executive Officer of the Parent, or on the Parent
Board) or otherwise hereunder (other than inadvertent actions which
are promptly remedied); except the foregoing shall not constitute
Good Reason if occurring in connection with the term
