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Exhibit 10.2
Execution Version
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of January
7,
2005 by and between GMH Holding Company, a Delaware corporation
(the "Company"),
and Gerard Parker ("Executive").
WHEREAS, this Agreement is being entered into in connection with
the
consummation of the transactions contemplated by the Agreement and
Plan of
Merger dated as of December 23, 2004 (as amended from time to time,
the "Merger
Agreement") by and between Gallarus Media Holdings, Inc.
("Gallarus"), the
Company, GMH Acquisition Corp., and solely for certain limited
purposes, ABRY
Partners, LLC. Capitalized terms used herein and not otherwise
defined have the
meanings assigned to such terms in Section 14 hereof.
In consideration of the mutual covenants contained herein and
other
good and valuable consideration, the receipt and sufficiency of
which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company will employ Executive, and Executive
accepts employment with the Company, upon the terms and conditions
set forth in
this Agreement, for the period beginning on the date of the closing
of the
merger contemplated by the Merger Agreement and ending as provided
in Section 5
(the "Employment Period").
2. Position and Duties. During the Employment Period, Executive
will
serve as the Chief Financial Officer of the Company and its
Subsidiaries, and
render such managerial, supervisory and other executive services to
the Company
and its Subsidiaries as are from time to time necessary in
connection with the
management and affairs of the Company and its Subsidiaries, in each
case subject
to the authority of the Board of Directors of the Company (the
"Board").
Executive will devote his best efforts and substantially all of his
business
time and attention (except for permitted vacation periods and
reasonable periods
of illness or other incapacity) to the business and affairs of the
Company and
its Subsidiaries. Executive will report directly to the Chief
Executive Officer.
Executive will perform his duties and responsibilities to the best
of his
abilities in a trustworthy and businesslike manner.
3. Salary and Benefits.
(a) Salary. During the Employment Period, the Company will pay
Executive an amount equal to $250,000 per annum (as in effect from
time to time,
the "Salary") as compensation for services. The Salary will
increase per annum
by an amount equal to 5% of the annual amount of the Salary in
effect prior to
such increase, effective on the first day of January of each year,
starting on
January 1, 2006. The Salary will be payable in regular installments
in
accordance with the general payroll practices of the Company and
its
Subsidiaries.
(b) Benefits. During the Employment Period, the Company shall
provide
Executive with family health and dental, life, long-term disability
and
Directors' and Officers' liability insurance and other benefits
offered under
such plans as the Board may establish or maintain from time to time
for senior
executive officers of the Company and its Subsidiaries
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(collectively, the "Benefits"). Executive shall be entitled to four
(4) weeks of
paid vacation each year.
(c) Reimbursement of Expenses. During the Employment Period,
the
Company will reimburse Executive for all reasonable out-of-pocket
expenses
incurred by him in the course of performing his duties under this
Agreement
which are consistent with the Company's policies in effect from
time to time
with respect to travel, entertainment and other business expenses.
Reimbursement
by the Company for the expenses set forth above will be subject to
the Company's
requirements with respect to reporting and documentation of such
expenses.
4. Performance Bonus and Other Bonus.
(a) For the fiscal year ended March 31, 2005, Executive shall
be
eligible to receive (i) a bonus (the "2005 Performance Bonus I") in
an amount
not to exceed 17.5% of the average Salary in effect during such
fiscal year
based on the degree to which the Company's EBITDA for such fiscal
year meets
$26,741,000 ("Target I" and (ii) a bonus (the "2005 Performance
Bonus II") in an
amount not to exceed 11.66% of the average Salary in effect during
such fiscal
year based on the degree to which the Company's EBITDA for such
fiscal year
meets Budget Target (as defined in Section 4(c) below), in each
case as follows:
<TABLE>
<CAPTION>
AMOUNT OF 2005 PERFORMANCE BONUS I OR II
PERCENTAGE OF TARGET I OR BUDGET TARGET (AS APPLICABLE) (AS A
% OF THE AVERAGE SALARY
(AS APPLICABLE)
ACTUALLY ACHIEVED
IN EFFECT DURING SUCH FISCAL YEAR)
---------------------------------------
-----------------------------------------------
<S>
<C>
Less than 90%
0%
At least 90% but no more than 100%
(% of Target I or Budget Target (as applicable)
Actually Achieved - 90%)/2
Greater than 100% but no more than 120% 6.66% + (% of Target I or
Budget Target (as
applicable) Actually Achieved - 100%)/4
Greater than 120%
11.66%
</TABLE>
(b) For each fiscal year of the Employment Period, other than
the
fiscal year ended March 31, 2005, Executive shall be eligible to
receive a bonus
("Performance Bonus") in an amount not to exceed 50% of the average
Salary in
effect during such fiscal year based on the degree to which the
Company's EBITDA
for such fiscal year meets the Performance Bonus Target (as defined
in Section
4(c) below) as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
PERFORMANCE BONUS AMOUNT OF PERFORMANCE BONUS
(AS A % OF THE AVERAGE
TARGET
ACTUALLY ACHIEVED
SALARY IN EFFECT DURING SUCH FISCAL YEAR)
--------------------------------
--------------------------------------------------
<S>
<C>
Less than 90%
0%
At least 90% but less than 100%
6.66%
At least 100% but less than 110%
16.66%
At least 110% but less than 120%
33.33%
At least 120% or greater
50%
</TABLE>
2
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In calculating EBITDA for purposes of this subsection (b), any
businesses
acquired during the relevant period will be given effect as though
such
acquisition had occurred at the beginning of the relevant
period.
(c) Any 2005 Performance Bonus I, 2005 Performance Bonus II, or
Performance Bonus earned by Executive shall be paid promptly after
delivery to
the Board of the audited financial statements for the fiscal year
in question.
As used herein, the term "Budget Target" shall mean EBITDA in the
amount set
forth in the annual budget adopted by the Board for the fiscal year
ended March
31, 2005. As used herein, the term "Performance Bonus Target" shall
mean EBITDA
in the amount set forth in the annual budget adopted by the Board
after
consultation with Executive for the fiscal year in question.
5. Termination.
(a) The Employment Period will commence upon consummation of
the
merger contemplated by the Merger Agreement and will continue until
the earlier
of: (i) the fifth anniversary of the date hereof; (ii) Executive's
resignation,
death or disability or other incapacity (as reasonably determined
by the Board
in good faith, such determination being based upon the report of a
physician
selected by the Board and reasonably acceptable to Executive if
Executive so
requests. In such event, Executive agrees to make himself
reasonably available
for examination by the physician selected by the Board); or (iii)
the giving of
notice of termination by the Company or a majority of the members
of the Board
(A) for Cause or (B) for any other reason or for no reason (a
termination
described in this clause (iii) (B) being a termination by the
Company "Without
Cause"); provided, however, that, notwithstanding anything to the
contrary
contained herein, in the event the Merger Agreement is terminated
without
consummation of the merger thereunder, this Agreement will
automatically
terminate without any liability or obligation on the part of either
party
hereunder. For the purposes of this Agreement, "Cause" shall mean
(a) conviction
of, or a plea of guilty or no-contest or similar plea with respect
to, a felony
or the commission of any act or omission involving actual fraud or
embezzlement
with respect to the Company or any of its Subsidiaries, (b) conduct
bringing the
Company or any of its Subsidiaries into substantial public disgrace
or
disrepute, (c) willful misconduct or breach of fiduciary duty with
respect to
the Company or any of its Subsidiaries or (d) material breach of
Section 2, 7 or
8 of this Agreement (provided, that to the extent a material breach
of Section 2
of this Agreement may be cured, Executive shall have 20 business
days to cure
such breach from the date on which the Board delivers written
notice to
Executive reasonably identifying such breach).
(b) In the event of Executive's resignation (other than within 30
days
of a Good Reason Event), death, disability or other incapacity or
the
termination of the Employment Period for Cause or in connection
with a Sale of
the Company, Executive will not be entitled to receive his Salary
or any fringe
benefits or Performance Bonus for periods after the termination of
the
Employment Period but, in the case of death, disability or other
incapacity,
Executive will be entitled to receive a pro rata portion of his
Performance
Bonus for the period during which Executive was employed by the
Company at the
time the Performance Bonus would normally be paid and based upon
the Company's
actual performance for the relevant fiscal year. In the event the
Employment
Period is terminated by the Company Without Cause, or by Executive
within 30
3
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days after a Good Reason Event, then so long as Executive continues
to comply
with Sections 7, 8 and 9, Executive shall be entitled to receive
(i) severance
payments in an aggregate amount equal to two year's Salary based on
the Salary
in effect at the time the Employment Period is terminated and (ii)
Benefits at
the same level and on the same terms as they are provided from time
to time to
the Company's senior management employees, for a period equal to
two years from
the date of such termination. Any such severance payments paid to
Executive by
the Company will be paid in equal monthly installments; provided,
that Executive
shall be required to sign a release of all past, present and future
claims
against CVC and the NCI Companies as a condition to receiving such
payments and
benefits.
6. Resignation as Officer or Director. Upon the termination of
the
Employment Period, Executive will resign each position (if any)
that he then
holds as an officer or director of the Company or any of its
Subsidiaries
(including his membership on the Board).
7. Confidential Information. Executive acknowledges that the
information, observations and data that have been or may be
obtained by him
during his employment relationship with, or through his involvement
as a
stockholder or director of, the Company or any Subsidiary or
predecessor thereof
(each of the Company, any Subsidiary or affiliate or any such
affiliate
predecessor being an "NCI Company"), prior to and after the date of
this
Agreement concerning the business or affairs of the NCI Companies
(collectively,
"Confidential Information") are and will be the property of the NCI
Companies.
Therefore, Executive agrees that he will not disclose to any
unauthorized Person
or use for the account of himself or any other Person any
Confidential
Information without the prior written consent of the Company (by
the action of
the Board), unless and to the extent that such Confidential
Information has
become generally known to and available for use by the public other
than as a
result of Executive's improper acts or omissions to act, or is
required to be
disclosed by law. Executive will deliver or cause to be delivered
to the Company
at the termination of the Employment Period, or at any other time
the Company or
any of its predecessors or Subsidiaries may request, all memoranda,
notes,
plans, records, reports, computer tapes and software and other
documents and
data (and copies thereof) containing or relating to Confidential
Information or
the business of any NCI Company which he may then possess or have
under his
control.
8. Non-Compete, Non-Solicitation.
(a)
Non-Compete. Executive acknowledges that during his employment
relationship with, or through his involvement as a stockholder or
director of,
any NCI Company he has and will become familiar with trade secrets
and other
Confidential Information concerning such NCI Companies, and with
investment
opportunities relating to the Business, and that his services have
been and will
be of special, unique and extraordinary value to the foregoing
entities.
Therefore, Executive agrees that, during the Employment Period and
for a period
of two years thereafter (the "Noncompete Period"), he will not
directly or
indirectly own, manage, control, participate in, consult with,
render services
for, or in any other manner engage in any business, or as an
investor in or
lender to any business (in each case including on his own behalf or
on behalf of
another Person) which constitutes or is competitive with the
Business (as and
where the same is conducted or proposed to be conducted (if actions
have been
taken by any NCI Company to implement the proposed business) by the
NCI
Companies during the Employment Period, or as of the end of the
Employment
Period if the Employment Period has
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then ended). Nothing in this Section 8 will prohibit Executive from
being a
passive owner of less than 5% of the outstanding stock of a
corporation of any
class which is publicly traded, so long as Executive has no direct
or indirect
participation in the business of such corporation. By initialing in
the space
provided below, Executive acknowledges that he has read carefully
and had
the opportunity to consult with legal counsel regarding the
provisions of this
Section 8(a). _________ [INITIAL].
(b) Non-Solicitation. During the Noncompete Period, Executive will
not
directly or indirectly (i) induce or attempt to induce any
employee, any
individual who has agreed to be or within one year of such
solicitation,
employment, offer, retention, interference or enticement has been,
employed or
retained by any NCI Company, or any independent contractor
(including, without
limitation, any independent distributor or associate publisher) of
any NCI
Company to leave the employ or contracting relationship with such
entity, or in
any way interfere with the relationship between any such entity and
any employee
or full-time independent contractor thereof, or (ii) induce or
attempt to induce
any customer, supplier or other business relation of any NCI
Company to cease
doing business with such entity or in any way interfere with the
relationship
between any such
