Exhibit 10.49
TRANSITION
AGREEMENT
THIS TRANSITION AGREEMENT (this
“Agreement”) is made by and among Jameson Inns, Inc.
(the “Company”) and Martin D. Brew
(“Executive”).
PURPOSE
Executive is employed by Company as
its Treasurer and Chief Accounting Officer pursuant to that certain
Employment Agreement dated as of February 19, 2004 (the
“Employment Agreement”). Company and Executive have
mutually agreed that Executive will continue in his current
position through April 1, 2006, at which time his employment
with the Company will terminate and he will begin a one-year
consulting arrangement which will allow the Company to call upon
the talents, services and expertise of Executive following the
termination of Executive’s employment. Therefore, in order to
achieve a final and amicable resolution of these relationships and
positions in all respects and in consideration of the mutual
covenants and promises set forth below, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
COVENANTS AND OBLIGATIONS OF
COMPANY
1.1. Employment Duties and
Responsibilities Through April 1, 2006 . For the
remainder of the period ending April 1, 2006, Executive will
continue as an officer and employee of the Company pursuant to the
terms of his Employment Contract. During that period, it is
anticipated that he will spend approximately 90% of his time
leading the internal
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Company project to bring it into compliance with
the requirements of Section 404 of the Sarbanes-Oxley Act of
2002 (the “SOX Project”) and approximately 10% of his
time working with the accounting and financial reporting personnel
of the Company to facilitate a smooth and efficient transition of
his duties as Treasurer and Chief Accounting Officer. The SOX
Project will entail the development and documentation of the
systems, processes, controls and timetable, including planned
allocation of resources, necessary or appropriate for the Company
to achieve sustained compliance with the requirements of
Section 404 of the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated pursuant thereto. In this regard,
Executive will work with the Company’s internal staff,
outside consultants, independent accountants and counsel, provide
monthly reports to the Company’s Board of Directors and will
attend the meetings of the Audit Committee of the Board of
Directors. With respect to his non-SOX Project responsibilities,
Executive will participate in formal and informal meetings with the
other accounting, human resources and other appropriate personnel,
review the Company’s proposed filings with the Securities and
Exchange Commission and otherwise perform such other tasks and
projects as may be assigned by the Chief Executive Officer or
President of the Company.
1.2 Compensation .
Executive’s Base Salary is increased to $150,000 per annum
effective June 1, 2005. In addition, Executive will be
eligible to receive a cash bonus based upon the results of the SOX
Project as reflected in the Annual Report on Form 10-K filed by the
Company with the Securities and Exchange Commission for the year
ended December 31, 2005 (the “2005 10-K”), as
follows:
a. If the management assessment
reported in the 2005 10-K does not contain a disclosure of any
material weaknesses, and the registered public accounting
firm’s attestation report delivered in connection with its
review of management’s assessment of the Company’s
internal control over financial reporting confirms such assessment,
Executive will be entitled to receive a bonus of $50,000;
or
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b. If the management assessment is
reported in the 2005 10-K and the Company’s registered public
accounting firm does provide an attestation report sufficient to
allow the filing of the 2005 10-K on a timely basis (including any
automatic extension permitted by Rule 12b-25) notwithstanding the
reporting of one or more material weaknesses, Executive will be
entitled to receive a bonus of $35,000 if the Chief Executive
Officer or the President makes a determination that Executive has
performed his duties and responsibilities relating to the SOX
Project in an adequate and competent manner.
Any bonus payable pursuant to this
Section 1.2 shall be paid no later than March 31,
2006.
1.3 Termination of
Employment : The Company and Executive mutually agree that
Executive’s employment with Company will terminate effective
as of the close of business on April 1, 2006 (the
“Termination Date”). Executive will become a consultant
to the Company effective April 2, 2006 as contemplated by
Section 1.4 below. Executive will receive his regular Base
Salary through the Termination Date. For purposes of the Employment
Agreement, the termination of Executive’s employment shall be
considered a
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voluntary resignation other than for Good
Reason. The confidentiality and non-solicitation covenants of
Executive in Sections 13 and 14 of the Employment Agreement are
hereby amended to provide that they shall continue in effect for a
period of one year following the termination of Executive’s
consulting arrangement contemplated by Section 1.4.
1.4. Consulting
Arrangement : From and after the Termination Date until
April 1, 2007 (the “Consulting Period”), Executive
will be engaged as a consultant to the Company.
a. Executive’s duties as a
consultant will include:
i. Reviewing and evaluating the test
results of the financial reporting cycle consisting of the closing
of the financial records and reporting process for the first
quarter of 2006, which is scheduled to be completed by the end of
April of 2006;
ii. Working with management on the
2006 management letter from the Company’s registered public
accounting firm and its related impact on the Company’s
disclosures in its 10-K report for 2006;
iii. Attending meetings of the Audit
Committee of the Board of Directors at which the 2006 financial
statements, audit of those financial statements and assessment of
the Company’s internal control over financial accounting are
discussed;
iv. Reviewing and providing
management input on drafts of the proxy statement and related
materials prepared in connection with the 2006 annual
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meeting of the shareholders of the
Company, the quarterly reports on Form 10-Q for each of the first
three fiscal quarters of 2006 and the Form 10-K report for 2006,;
and
v. Being available for discussion
and consultation with the Chief Executive Officer, President and
Board members on significant topics and matters affecting the
Company.
Executive will not be required to
work at the headquarter
