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AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is
dated as of September 20, 2007, between Gary C. Granoff
(“Executive”), Ameritrans Capital Corporation
(“Ameritrans”), and Elk Associates Funding
Corporation (“Elk”) (collectively, Ameritrans and
Elk are hereinafter referred to as the
“Employer”).
WHEREAS, Executive is presently employed by
Ameritrans as Chairman of the Board of Directors, Chief
Executive Officer and Chief Financial Officer pursuant to an
Employment Agreement dated December 31, 2002, (the
“2002 Agreement”); and
WHEREAS, Executive is presently employed by Elk
as President, Chief Executive Officer and Chairman of the Board
of Directors pursuant to the 2002 Agreement; and
WHEREAS, the Employer and Executive desire to
restate and amend certain terms of the 2002 Agreement.
NOW, THEREFORE, in consideration of the promises
and the mutual covenants hereinafter set forth and other good
and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as
follows:
1.
Employment of
Executive.
Employer hereby
agrees to employ Executive, and Executive hereby agrees to be
and remain in the employ of Employer, upon the terms and
conditions hereinafter set forth.
2.
Employment
Period.
Subject to the
earlier termination as provided in section 5, the term, of
Executive’s employment under this Agreement shall be
effective as of the date of execution hereof (the
“Effective Date”), and shall continue until
June 30, 2011 (the “Initial Employment
Period”). Unless Employer or Executive give notice
of non-renewal at least six (6) months prior to the expiration
of the Initial Employment Period, the term of this Agreement
shall be extended for a one (1) year period beyond the end of
the Initial Employment period on the same terms and conditions
in effect under this Agreement at the time of extension and
providing for an annual base salary equal to the Base Salary (as
hereinafter defined) in effect at the time of renewal, plus an
annual increase each year thereafter during the renewal term of
the greater of (i) four percent (4%) or (ii) the increase in the
consumer Price Index during each such year (the Initial
Employment Period and all extensions thereof are hereafter
referred to as the “Employment Period”).
Unless Employer or Executive give notice of non-renewal at
least three (3) months prior to the expiration of the Employment
Period (for any given one year extension), the term of this
Agreement shall be extended for additional one (1) year periods
beyond the end of the Employment Period on the same terms and
conditions in effect under this Agreement at the time of
extension and providing for an annual base salary equal to the
Base Salary (as hereinafter defined) in effect at the time of
renewal, plus an annual increase during the renewal year of the
greater of (i) four percent (4%) or (ii) the increase
in the Consumer Price Index during such year (the Initial
Employment Period, the Employment Period and any extensions
thereof are hereafter referred to as the “Employment
Period”). The parties agree that any Bonus (as
hereinafter defined) payable during any renewal period shall be
paid solely in the discretion of the Board of Directors of
Employer (the “Board”). If either Employer or
Executive elects not to renew the Agreement by providing the
other party with a notice of non-renewal, then the Agreement
shall terminate on June 30, 2011, and the consulting
agreement between Employer and Executive in the from attached
hereto as Exhibit A (the “Consulting Agreement”),
shall automatically become effective.
3.
Duties and
Responsibilities.
3.1.
General
During the Employment Period,
Executive shall have the title of Chairman, CEO and CFO of
Ameritrans and President, Chairman and CEO of Elk and shall have
duties commensurate with his office and title of Ameritrans and
Elk. The Company may, in its discretion, employ a
qualified person to be CFO, in which event Executive shall give
up such duties thereafter; however, employment of a CFO other
than Executive shall not reduce salary or benefits of Executive
as set forth in Section hereof. Executive shall
report directly to and take direction from the Board.
Executive understands that he will be required to work
with and coordinate certain business activities with other
executives of the Employer in connection with certain projects
as directed by the Board. Executive shall devote all of
his business time and expend his best efforts, energies, and
skills to the Employer’ provided, however, that (i) during
the Employment Period, Executive shall be permitted to establish
and report to an office located in any state in which a
substantial amount of Employer's business is conducted, and (ii)
Executive shall be allowed to devote such reasonable time as he
deems necessary to his personal and family business matters and
to fulfill his duties as a member of the Board of Trustees of
George Washington University and as a member of the investment
committee of the Board of Trustees, (iii) Member of the
Board of Trustees of Parker Jewish Institute and the Investment
Committee of the Board of Trustees, and (iv) Executive
shall be permitted to serve as an officer and director of, or as
“of counsel” and shall devote only nominal time to
Granoff, Walker & Forlenza PC (“GW&F”) so
long as such time, attention and duties in (ii), (iii)and (iv)
above, do not (A) interfere with his duties and responsibilities
to Employer or (B) violate his obligations under Sections 7 and
8, herein, or any duty, consistent with his status with
Employer, as he may be assigned from time to time by the
Board.
4.
Compensation and Related
Matters.
4.1.
Base Salary
. From the Effective Date through
June 30, 2008, Employee shall be paid at the annual rate of
$372,800 which includes the minimum bonus referred to in the
2002 Agreement. Such annual rate shall be paid in monthly
installments of $31,400. Commencing July 1, 2008,
during the Employment Period, (each such fiscal year, an
“Employment Year”), Employer shall pay to Executive
a base salary equal to $376,275 for the first Employment Year,
$391,325 for the second Employment Year, and $406,975 for the
third Employment Year (with respect to each Employment Year, the
“Base Salary”). The Base Salary shall be
payable in accordance with the normal payroll procedures of
Employer.
4.2.
Annual Bonus
For each fiscal year during the
Employment Period (each, a “Bonus Year”), Executive
shall be eligible to receive a bonus based on the achievement of
corporate and/or individual performance objectives set by the
Board for such bonus Year (a “Bonus”), which Bonus
shall not be less than $15,000 for each Bonus year during the
Initial Employment period, payable monthly in arrears, and
thereafter, if this Agreement is extended for additional one (1)
year periods, at the discretion of the Board. The Bonus
for each Bonus Year shall be payable promptly following the
determination of the Board thereof, but in no even later than 45
days after the end of such year.
4.3.
Other Benefits
. During the Employment Period, subject
to, and to the extent Executive is eligible under their
respective terms, Executive shall be entitled to receive up to
an aggregate of $49,300 allocated by Executive as he shall
determine in his sole discretion for the following:
(i) reimbursement of Executive for the cost of the annual
premiums on life insurance on Executive’s life,
(ii) the lease of a car, (iii) parking for
Executive’s automobile in Manhattan, (iv) tolls and
gas for the automobile in connection with commuting to work,
(v) automobile insurance for one car (vi) use of a
cell phone and home telephone for business purposes,
(vii) reimbursement for the premium on Executive’s
disability or long-term care policy, (viii) reimbursement
of a portion of Executive’s country club dues. In
addition, the Company shall pay the Executives family medical
health insurance premiums under the Company's current plan or
future plans of equivalent scope and benefit, plus any increases
that may arise in future years. Employer will also make
regular contributions to Executive’s SEP IRA account equal
to 15% of Executive Base Salary and Bonus, subject to
limitations under the plan and reimburse Executive for expenses
incurred in connection with travel, meals, and incidentals
relating to activities as a trustee of The George Washington
University and the Parker Jewish Institute.
4.4.
Expenses Reimbursement
. Employer shall reimburse Executive for
all business expenses reasonably incurred by him in the
performance of his duties under this Agreement upon his
presentation of signed and itemized accounts of such
expenditures, all in accordance with Employer’s procedures
and policies as adopted and in effect from time to time and
applicable to its senior management employees.
4.5.
Vacations
. Executive shall be entitled to 30
business days vacation for each calendar year during the
Employment period, which vacations shall be taken at such time
or times as shall not unreasonably interfere with
Executive’s performance of his duties under this
Agreement. Time spent on services performed as a trustee
shall be considered business-related.
4.6.
Stock Options
In order to provide further
incentive to Executive and align the interests of Executive with
those of the stockholders of Employer, Employer shall grant to
Executive, from time to time, options to purchase shares of
common stock of Employer (the "Common Stock"), in an amount
determined by the Company's board of directors or committee
thereof, as the case may be. The options shall be granted
pursuant to the Employer's existing Stock Option Plan consistent
with the terms and conditions therein. The options shall
have such other terms and conditions as set forth in a stock
option agreement. Employer shall use reasonable efforts to
register the sale of Common Stock underlying the option granted
to Executive pursuant to a Registration Statement on Form S-8,
provided that Form S-8 is available to Employer under the
Securities Act of 1933 and the rules and regulations of the
Securities and Exchange Commission at the time Executive
exercises such options.
4.7.
Office Space: Resources
. Employer shall provide Executive with
sufficient office space, furnishings, equipment, computer
resources, and supplies considered reasonable and necessary for
Executive to carry out his duties.
4.8.
Life Insurance . Upon non-renewal
of this Agreement, or termination for any reason Employer shall
assign to Executive, or his assigns, that certain William Penn
Universal Life Insurance Policy, inclusive of the then current
cash account; except that if Executive is terminated for Cause
pursuant to Section 5.2, Employer shall assign to Executive, or
his assigns, that certain William Penn Universal Life Insurance
Policy, provided that Executive reimburses Employer for the then
current cash account under the policy.
5.
Termination of Employment
Period.
5.1.
Termination Without Cause: Voluntary
Termination by Executive
. Employer may, by notice to Executive at
any time during the Employment Period, terminate the Employment
Period without Cause (as defined below). The effective
date of such termination of Executive from Employer shall be the
date that is thirty (30) days following the date on which such
notice is given, except as otherwise specifically provided
herein. Executive may, by notice to Employer at any time
during the Employment Period, voluntarily resign from Employer
and terminate the Employment Period. The effective date of
such termination of Executive from Employer shall be the date
that is thirty (30) days following the date on which such notice
is given.
5.2.
By Employer for Cause
. Employer may, at any time during the
Employment Period, by notice to Executive, terminate the
Employment period for “Cause.” As used herein,
“Cause” shall mean (i) fraud or acts of gross
negligence or gross misconduct on the part of Executive in the
course of his employment, (ii) substantial and continued failure
by Executive to perform his duties hereunder, (iii) use of
alcohol by Executive or his illegal use of drugs (including
narcotics, (which in either case is, or could reasonably be
expected to become, materially injurious to the reputation or
business of Employer or which impairs, or could reasonably be
expected to impair, the performance of Executive’s duties
hereunder, (iv) Executive’s conviction by a court of
competent jurisdiction of, or pleading “guilty” or
“no contest” to, (x) a felony, or (y) any other
criminal charge (other than minor traffic violations) which has
or could reasonably be expected to have a material adverse
impact on Employer’s reputation and standing in the
community, or (v) Executive’s violation of any of the
provisions of Sections 7 or 8 herein. Any notice given by
Employer pursuant to this Section 5.2 shall specify in writing
in reasonable detail the event or the nature of
Executive’s action or inaction that is the cause for
giving such notice. Executive will have 30 days to cure,
to the reasonable satisfaction of employer, any action or
inaction charged by Employer for Cause under (ii) or (v), above,
the Employment period shall terminate immediately upon notice by
Employer of termination for Cause and the reason therefore,
unless such actions or inactions can be cured and Executive has
satisfactorily cured such actions or inactions.
5.3.
By Executive for Good Reason
.
(a)
Executive may, at any time during the Employment
period by notice to Employer, terminate the Employment period
under this Agreement for “Good Reason” (as defined
below). For the purposes hereof, Executive shall have
“Good Reason” to terminate employment with Employer
on account of any of the following events without
Executive’s consent: (i) any reduction in the Base
Salary; (ii) the failure of Employer to provide employee
benefits consistent with Section 4.3, herein; (iii) any
requirement by Employer that Executive report to anyone other
than the Board; or (iv) a “Change in Control” (as
defined below); provided , however , that the
circumstances set forth in this Section 5.3 shall not be Good
Reason if within 30 days of notice by Executive to Employer,
Employer cures such circumstances. The effective date of
such termination of Executive from Employer shall be the date
that is thirty (30) days following the date on which such notice
is given.
(b)
For purposes of this Section 5.3, a
“Change in Control” shall be deemed to have taken
place if any “Person) (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934 (the
“Exchange Act”) and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) becomes a “beneficial
owner” (as defined in Rule 13-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation
representing 50% or more of the combined voting power of
Employer’s then outstanding securities eligible to vote
for the election of the Board (the “voting
Securities”);’ provided , however ,
that the event described in this paragraph (b) shall not be
deemed to be a change in Control by virtue of any of the
following acquisitions: (i) any Employer or any subsidiary
of employer in which Employer owns more than 50% of the combined
voting power of such entity (a “Subsidiary”), (ii)
by any employee benefit plan (or related trust) sponsored or
maintained by Employer or any Subsidiary, (iii) by any
underwriter temporarily holding Employer’s Voting
Securities pursuant to an offering of such Voting Securities, or
(vi) pursuant to any acquisition by Executive or any group or
persons including Executive (or any entity controlled by
Executive or any group of persons including Executive).
0.1.
Disability
. During the Employment Period, if, as a
result of physical or mental incapacity or infirmity, Executive
shall be unable to perform his duties under this Agreement for
(i) a continuous period of at least 180 days, or (ii) periods
aggregating at least 180 days during any period of 12
consecutive months (each, a “Disability Period”),
and at the end of the Disability Period there is no reasonable
probability that Executive can promptly resume his duties
hereunder, Executive shall be deemed disabled (the
“Disability”) and Employer, by notice to Executive,
shall have the right to terminate the Employment Period for
Disability at, as of, or after the end of the Disability Period.
The existence of the Disability shall be determined by a
reputable, licensed physician selected by Executive in good
faith, whose determination shall be final and binding on the
parties. Executive shall cooperate in all reasonable
respects to enable an examination to be made by such physician.
0.2.
Death
. The Employment period shall end on the
date of Executive’s death.
0.3.
Any termination under this Section 5 shall act
as a notice of non-renewal of this Agreement pursuant to Section
2 herein.
1.
Termination
Compensation
1.1.
Termination Without Cause by Employer
. If the Employment Period is terminated
by Employer without Cause pursuant to the provisions of Section
5.1 hereof, Employer will pay to Executive a lump-sum payment in
an amount equal to (i) Executive’s Base Salary through the
date of termination and an amount equal to the sum of the Base
Salary multiplied by the number of years (and fractional
portions there
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