SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “ Agreement ”) dated as of June 24,
2009 between Global Employment Holdings, Inc., a Delaware
corporation (“ Holdings ”), Global
Employment Solutions, Inc., a Colorado corporation (“
GES ,” and together with Holdings, the “
Company ”), and Howard Brill (“
Employee ”).
WHEREAS, Employee, Holdings and GES are parties
to an Amended and Restated Employment Agreement, dated as of
July 15, 2006 (the “ Old Employment
Agreement ”); and
WHEREAS, the Company and Employee desire to
amend and restate the Old Employment Agreement, providing for the
continued employment of Employee as Chief Executive Officer and
President of Holdings and GES, upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual
undertakings contained herein, the parties agree as
follows:
1.1 Employment . Holdings and GES agree
to continue to employ Employee, and Employee hereby accepts
continued employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on
June 24, 2009 (the “ Effective Date
”) and ending as provided in Section 1.4 (the “
Employment Period ”).
1.2 Position
and Duties .
(a) During the Employment Period, Employee
shall serve as President and Chief Executive Officer of Holdings
and GES. Employee shall report directly to the Boards of Directors
of Holdings and GES.
(b) Employee shall be responsible for the
operation and performance of the Company and shall have the
responsibilities and carry out the customary functions of a
President and Chief Executive Officer.
(c) Employee shall devote his best efforts
and full business time and attention (except for reasonable amounts
of time devoted to civic and charitable causes, permitted vacation
periods and reasonable periods of illness or other incapacity) to
the business and affairs of the Company and its Subsidiaries.
Employee shall perform his duties and responsibilities to the best
of his abilities in a diligent, trustworthy, businesslike and
efficient manner.
(d) The President and Chief Executive
Officer’s duties and responsibilities shall be those
customary of a President and Chief Executive Officer including, but
not limited to: (1) planning, developing and establishing the
policies and directives of the Company; (2) maintaining the
position as the top executive officer in the Company, reporting
only to the Boards of Directors of Holdings and GES;
(3) overseeing and developing organizational policies and
coordinating divisions and departments; (4) overseeing the
entire budget or all components of the budget of the Company;
(5) directing and planning the formulation of financial
programs to provide funding for new or continued operations;
(6) overseeing and directing the planning and development of
industrial, labor and public relations policies; and
(7) overseeing and making decision concerning the day-to-day
operations of the Company.
(e) In the event the Board of Directors of
Holdings (the “ Board ”) requires, upon a
formal resolution duly adopted by the Board, that Employee
personally guarantee any Company loans, obligations or other
indebtedness, purchase additional securities in the Company or make
any other personal commitment for the benefit of the Company
outside the scope of the Employee’s employment hereunder,
such action shall be deemed a material diminution of the
Employee’ authority, duties and responsibilities.
1.3 Salary,
Bonus and Benefits .
(a) During the Employment Period,
Employee’s base salary (the “ Base Salary
”) shall be $475,000 per annum, which salary shall be payable
in regular installments in accordance with the Company’s
general payroll practices. The Base Salary shall increase
automatically on the first day of each calendar year by the same
percentage as the increase, if any, in the most recent annual
average U.S. Total Consumer Price Index from the annual average
U.S. Total Consumer Price Index for the immediately prior calendar
year. The Compensation Committee (the “ Compensation
Committee ”) of the Board shall annually review
Employee’s Base Salary relative to that paid to chief
executive officers of other similarly sized and situated companies;
provided, however, the Compensation Committee shall not reduce the
Base Salary.
(b) During the Employment Period, Employee
shall be entitled to participate in all of the Company’s
employee benefit programs for which similarly situated employees of
the Company and its Subsidiaries are generally eligible. In
addition, Executive shall be entitled to a monthly car allowance of
$1,500. Employee shall be entitled to six weeks paid vacation per
fiscal year during the Employment Period (which vacation time shall
be prorated for any partial fiscal year); provided, however, that
only two weeks of any unused vacation may be carried forward to the
next succeeding fiscal year. The benefits described in this
Section 1.3(b) shall be collectively referred to herein as
“ Benefits ”.
(c) At the end of each fiscal year during
the Employment Period, Employee shall be eligible to receive a
bonus based on Holdings’ achieving annual EBITDA target
amounts (“ EBITDA Bonus ”) and
performance criteria (“ Performance Bonus
”) established annually by the Compensation Committee.
Promptly after the Company’s receipt of an annual audit
generated by the Company’s accountants, but in no case later
than 120 days after the Company’s fiscal year-end, the
Company shall calculate and notify Employee of the bonus earned in
the preceding fiscal year. Except as provided under
Section 1.4(b) and 1.4(d), Employee must be employed with the
Company or its Subsidiaries as of the end of a fiscal year to be
eligible for the bonus for such fiscal year. For purposes of this
Section 1.3(c), for any fiscal year, “
EBITDA ” shall be calculated using the
definition of “Consolidated EBITDA” in the
Company’s Senior Secured Convertible Notes issued on
March 31, 2006, as amended and as may be further amended from
time to time, (1) plus, to the extent not already added back,
all transaction costs associated with the Company’s 2006
recapitalization that were paid in such year, (2) plus or
minus, to the extent not already added back or deducted, any
revenues or expenses, respectively, recorded with respect to the
warrants issued on March 31, 2006, (3) plus or minus, to
the extent not already added back or deducted, any revenues or
expenses, respectively, that are unrelated to the Company’s
operations prior to March 31, 2006 and (4) minus, to the
extent not already deducted, the bonus to be paid to Employee for
such year.
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(d) The Company shall reimburse Employee
for all reasonable out-of-pocket expenses incurred by him in the
course of performing his duties under this Agreement upon
completion of an expense report in accordance with the
Company’s and its Subsidiaries’ reimbursement,
reporting and documentation policies in effect from time to time
with respect to travel, entertainment and other business
expenses.
(a) This Employment Period shall commence
on the Effective Date and terminate on the earlier to occur of
(i) the date of Employee’s death or Disability,
(ii) the date terminated by the Board for Cause,
(iii) the date terminated by the Board without Cause,
(iv) the date of voluntary resignation by Employee,
(v) the date terminated by Employee for Good Reason, or
(vi) June 30, 2013 if either party provides at least
30 days notice prior to June 30, 2013 that the Employment
Period will not be extended for an additional one year term. The
Employment Period will automatically be extended for additional
one-year periods unless either party provides written notice to the
other party at least 30 days prior to the end of the
then-current Employment Period of his or its intent not to extend
the Employment Period.
(b) The Company shall have the right to
terminate the Employment Period and this Agreement upon the death
(without any requirement for notice) or at any time upon written
notice to Employee in the event of the Disability of Employee. In
the event Employee’s employment hereunder is terminated
pursuant to this Section 1.4(b), all of Employee’s
rights to his Base Salary and Benefits shall immediately terminate
as of the date of such termination, except that Employee (or, in
the event that Employee’s employment hereunder is terminated
due to Employee’s death, Employee’s heirs, personal
representative or estate) shall be entitled to: (i) any earned
and unpaid portion of his Base Salary, (ii) a pro rata portion
of any bonus earned for the year in which such termination occurs
and accrued and unpaid Benefits up to the date of termination (less
all deductions or offsets for amounts owed by Employee to the
Company or its Affiliates), (iii) an amount equal to the Base
Salary, payable within five days of the date of termination, and
(iv) continue to receive for one year following the date of
termination health insurance benefits under the Company’s
health insurance plan for himself and his dependants or other
covered family members in the case of disability, and his dependant
or other covered family members in the case of death; provided,
however, that such benefits shall discontinue if Employee is
otherwise eligible for health insurance benefits from another
provider.
(c) The Company shall have the right to
terminate the Employment Period and this Agreement for Cause at any
time upon written notice to Employee. Employee shall have the right
to terminate the Employment Period at any time by giving the
Company 30 days written notice. Upon such termination, all of
Employee’s rights to his Base Salary and Benefits shall
immediately terminate as of such date of termination except that
Employee shall be entitled to any earned and unpaid portion of his
Base Salary and accrued and unpaid Benefits up to the date of
termination (less all deductions or offsets for amounts owed by
Employee to the Company or its Affiliates).
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(d) The Company shall have the right to
terminate the Employment Period and this Agreement without Cause at
any time upon written notice to Employee and Employee shall have
the right to terminate the Employment Period and this Agreement for
Good Reason at any time upon written notice to the Company. If the
Employment Period is terminated without Cause or for Good Reason,
Employee shall be entitled to (i) continue to receive for one
year following the date of termination health insurance benefits
under the Company’s health insurance plan for himself and his
dependants or other covered family members; provided that the
Employee elects COBRA continuation coverage and provided further
that such benefits shall discontinue if Employee is otherwise
eligible for health insurance benefits from another provider,
(ii) an amount equal to two times the Base Salary, payable
within five days of the date of termination, (iii) an amount
equal to the EBITDA Bonus and Performance Bonus paid for the
previous fiscal year, if any, payable within five days of the date
of termination; and (iv) a pro rata portion of any EBITDA
Bonus and Performance Bonus earned through the end of the most
recent fiscal quarter (A) with respect to the EBITDA Bonus,
based upon Holdings’ achieving its EBITDA target amounts in
accordance with Holdings’ budget through such fiscal quarter,
and (B) with respect to the Performance Bonus, the Employee
achieving the performance criteria established by the Compensation
Committee for such fiscal quarter. If a Sale of the Company occurs
and Employee either (1) is terminated by the purchaser
substantially simultaneously with the Sale of the Company or
(2) voluntarily terminates his employment because the
purchaser offers employment on terms that are not substantially the
same or more favorable to Employee than the terms provided in this
Agreement, as determined by the Employee and the Company under an
objectively reasonable standard, Employee shall be entitled to
receive (x) following termination, 18 months health
insurance benefits under the Company’s health insurance plan
for himself and his dependants or other covered family members,
provided that the Employee elects COBRA continuation coverage and
provided further that such benefits shall discontinue if Employee
is otherwise eligible for health insurance employed from another
provider, (y) an amount equal to two and one-half times the
Base Salary, payable within five days of the date of termination,
and (z) an amount equal to the EBITDA Bonus and Performance
Bonus paid for the previous fiscal year, if any, payable within
five days of the date of termination. If a Sale of the Company
occurs and Employee is offered employment substantially on the same
or more favorable terms as contained in this Agreement, no payments
under this Agreement shall be owing to Employee other than for
earned and unpaid Base Salary through the closing date of the Sale
of the Company. Employee hereby agrees that no severance
compensation shall be payable in the event Employee’s
employment is terminated under Section 1.4(a)(i), (ii),
(iv) or (vi), or the expiration of any mutually agreed upon
extensions of this Agreement, and Employee waives any claim for
severance or other compensation in such event. The payment of any
severance compensation under this Section 1.4(d) is
conditioned upon Employee entering into the Company’s
standard form release agreement, a copy of which is attached
hereto. If Employee is terminated other than for Cause, Employee
shall be released from the provisions of Section 5 (“
Employee Lockup ”) of the Noncompetition
Agreement entered into as of March 31, 2006 by and between the
Company and Employee.
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(e) If the Company exercises its right not
to renew or extend the Employment Period under Section 1.4(a),
then Employee shall be entitled to (1) continue to receive for
one year following the date of expiration of the Employment Period
health insurance benefits under the Company’s health
insurance plan for himself and his dependants or other covered
family members; provided, however, that such benefits shall
discontinue if Employee is otherwise eligible for health insurance
benefits from another provider, and (2) an amount equal to the
Base Salary, payable within five days of the date of
expiration.
(f) Except as expressly set forth in this
Section 1.4, all compensation and other benefits shall cease
to accrue upon termination of the Employment Period.
(g) In the event this Agreement is
terminated due to Employee’s death or Disability, by the
Company without Cause or by Employee for Good Reason, then the
Company shall cause the repayment of any loans in which Employee is
the primary obligor (other than any sub de
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