Exhibit 10.1
CONFIDENTIAL SEPARATION AND GENERAL RELEASE AGREEMENT
This Confidential Separation and General Release Agreement (this “Agreement”) is made and entered into as of May 15, 2023 by and among Brent Pearson (“Executive”) and Great Elm Group, Inc. (“GEG”), on behalf of itself and its subsidiaries, and their parent, successor, predecessor, affiliate and related entities (collectively, the “Company”). References to the “Parties” means the Executive and the Company.
RECITALS
WHEREAS, Executive is currently employed as Chief Financial Officer (“CFO”) and Chief Accounting Officer (“CAO”) of GEG;
WHEREAS, Executive has tendered his resignation effective as of the date hereof from his role as CFO and CAO of GEG and as an officer and director, as applicable, from each subsidiary of GEG; provided, Executive shall remain an active non-executive employee of GEG until the Separation Date (as defined below); and
WHEREAS, the Company has agreed to accept Executive’s resignation under the terms and conditions set forth in this Agreement in exchange for Executive’s execution of this Agreement, including the general release of claims provided herein.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1.Resignation and Transition Period.
(a)The Parties agree that, except as set forth in paragraph 10 below, this Agreement supersedes the Offer Letter between Executive and the Company dated December 29, 2020 and is intended to fully and finally resolve all matters or issues relating to Executive’s employment and directorship relationship with and separation from the Company, including, but not limited to, Section 9(e) of the Offer Letter.
(b)Executive’s employment with the Company will terminate effective upon the earliest to occur of (i) Executive taking a position with another company, (ii) October 31, 2023 and (iii) Executive’s election, in his sole discretion, to accelerate the termination of his employment with GEG by providing written notice to GEG thereof (the earliest to occur of clauses (i), (ii) and (iii), the “Separation Date”).
(c)Between now and the Separation Date, Executive will continue as an active employee of the Company but will focus on providing Transition Services to GEG during the Transition Period. Transition Services shall include transition training and responsiveness to questions related to Executive’s responsibilities including but not limited to tax matters, post transaction support on DME and Forest, audit and general inquiries. Executive is expected to carry out the Transition Services in a work from home capacity. The period between the date of this Agreement and the Separation Date is the “Transition Period”. During the Transition Period, Executive will continue to receive Executive’s current base salary at the rate in effect on the date
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hereof less applicable withholding for taxes and other deductions in accordance with the Company’s customary payroll practices, and Executive will continue to be eligible to participate in the Company’s employee benefits plans. Executive also agrees that during the Transition Period, he will not say or do anything purporting to bind the Company or any of its affiliates without the express permission of the Company. Executive understands and agrees that Executive will continue to owe the Company a duty of loyalty and abide by applicable Company policies and procedures through the Transition Period, including, but not limited to, all obligations pertaining to confidentiality and non-solicitation. The Parties agree that in the event the Executive may elects to shorten the Transition Period as set forth above, the Executive will make himself reasonably available for questions through October 31 2023.
2.Consideration. In consideration for the execution and non-revocation of this Agreement by Executive, and execution of the Further Release annexed hereto as Exhibit A, and compliance with the terms made herein, the Company agrees as follows:
(a)Separation Payment. The Company will pay Executive a payment of (i) $87,500, less applicable withholdings and deductions, on June 30, 2023.
2,083 of Executive’s unvested Shares awarded pursuant to the February 5, 2021 Grant, 2,615 of Executive’s unvested Shares awarded pursuant to the September 24, 2021 Grant, and 19,976 of Executive’s unvested Shares awarded pursuant to the September 20, 2022 will vest on June 30, 2023.
(c)GEG Options. Executive acknowledges and agrees that Executive was granted options to purchase shares of the Company’s Common Stock (the “Options”) pursuant to the Company’s 2016 Long-Term Incentive Plan (the “Plan”) and applicable Award Agreements. In consideration for the execution and non-revocation of this Agreement and compliance with the terms herein, the Company agrees that Executive is fully vested in the following Options: (a) 40,000 pursuant to the November 7, 2018 Award Agreement, (b) 20,000 pursuant to the May 14, 2019 Award Agreement, (c) 20,000 pursuant to the July 30, 2019 Award Agreement, and (d) 9,208 pursuant to the September 24, 2021 Award Agreement. Notwithstanding anything to the contrary in the Plan or the applicable Award Agreements; Executive shall be permitted to exercise the foregoing Options for a period of one year following the Separation Date.
(d)Unvested Securities. For the avoidance of doubt, except as expressly set forth herein, all unvested options and shares of common stock of GEG and its subsidiaries shall terminate on the date hereof.
(e)Sufficiency of Consideration. The Parties agree that the payments being made to Executive in this paragraph 2 are good and sufficient consideration for this Agreement. Executive understands and agrees that he would not receive the monies and/or benefits specified in this paragraph 2 above, without Executive’s agreement to execute the Agreement, and without his fulfillment of the promises contained herein.
3.Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Executive or
made on Executive’s behalf under the terms of this Agreement. Executive acknowledges and agrees that Executive is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Executive further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Executive’s failure to pay or delayed payment of federal or state taxes, or (b) damages sustained by the Company by reason of any such claims, including attorneys’ fees and costs.
4.General Release and Waiver of Claims.
(i)In exchange for the consideration provided in the Agreement, Executive, knowingly, voluntarily, unconditionally and irrevocably, hereby compromise, settle, waive, and release the Company and its predecessors, parent and subsidiary organizations, affiliates, and partners, and their past, present, and future officers, directors, shareholders, investors, agents, attorneys, and employees (in their individual and corporate capacities) (collectively, the “Released Parties”) from any and all past, present, or future claims, demands, obligations, or causes of action, whether based on tort, contract, statutory or other theories of recovery for anything that has occurred up to and including the Effective Date of the Agreement. Such claims include those Executive may have or has against the Released Parties, or which may later accrue to or be acquired by Executive against the Released Parties, whether or not directly or indirectly related to the employment relationship between the Company and Executive.
(ii)In addition, Executive specifically agrees to release and waive any claims for wrongful termination, discrimination, harassment or retaliation under federal, state or local law or regulation, and any other claims arising in any way from Executive’s hire, employment, benefits, compensation (including any and all claims salary, wages, bonus, commissions, incentive compensation, vacation and severance that may be legally waived and released), termination, or separation from employment with the Company, and any conduct by the Company, through the Effective Date of the Agreement. Executive hereby expressly waives and releases any and all claims or rights arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, as amended (ADA), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA) (to the extent permitted by law), the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, the Executive Retirement Income Security Act (ERISA) (excluding claims for vested benefits), Sections 1981 through 1988 of U.S.C. Tile 42, the Fair Credit Reporting Act (FCRA), the Worker Adjustment and Retraining Notification Act (WARN), the National Labor Relations Act (NLRA), the Age Discrimination in Employment Act, as amended by the Older Workers Benefits Protection Act (ADEA), the Uniform Services Employment and Reemployment Rights Act (USERRA), the Rehabilitation Act, the Genetic Information Nondiscrimination Act (GINA), the Families First Coronavirus Response Act (FFCRA), the Immigration Reform and Control Act (IRCA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Occupational Safety and Health Act (OSHA), the Executive (whistleblower) civil protection provisions of the Corporate and Criminal Fraud Accountability Act (Sarbanes-Oxley Act), any other federal, state, local or foreign law (statutory, regulatory, or otherwise) that may be legally waived and released, and any and all claims arising under common law, tort, contract, and quasi-contract law, including but not limited to claims of breach
of an express or implied contract, tortious interference with contract or prospective business advantage, breach of the covenant of good faith and fair dealing, promissory estoppel, detrimental reliance, invasion of privacy, nonphysical injury, personal injury or sickness or any other harm, wrongful or retaliatory discharge, fraud, defamation, slander, libel, false imprisonment, and negligent or intentional infliction of emotional distress, claims arising by virtue of his status as a stockholder, and any and all claims for compensatory or punitive damages, attorneys’ fees, costs or other expenses. The identification of specific statutes is for purposes of example only, and the omission of any specific statute or law will not limit the scope of this general release in any manner.
(iii) For the avoidance of doubt, the Parties agree that Executive shall be entitled to receive his matching contribution under the Company’s 401(k) plan for calendar year 2023 at the same time as other employees of the Company calculated in a manner consistent with past practices.
(iv) Further, the Parties agree that Executive shall be reimbursed for approved out of pocket business expenses provided that submission is made through the Company’s T&E system within 30 days of the date of this Agreement.
5.Representations by Executive. Subject to paragraph 7, Executive represents that (a) he has no complaint, charge, or claim pending against the Released Parties, either individually or in concert with any other person or entity, with any court, agency, board, department, or other body or office, and, to his knowledge, no other person or entity has initiated or, to the extent within his control, will initiate any such proceeding on his behalf, and (b) he will not, to the fullest extent permitted by law, whether directly or indirectly or whether individually or collectively, initiate, assert, file, prosecute, maintain, commence, institute, sponsor, assist, advise, represent, or facilitate any complaint, action, proceeding, investigation, arbitration, lawsuit, or claim or any legal, equitable, or administrative proceeding of any nature, concerning any of the claims released in this Agreement against the Released Parties. Executive further represents that he has been paid, fully and accurately, all remuneration owed to him as a result of his employment with the Company, or the termination of that employment, including, but not limited to, all salary, wages, overtime, vacation pay, bonus pay, profit-sharing, stock options, stock, expenses, termination benefits, commissions, or any other compensation, with the sole exception of the consideration set forth in this Agreement.
6.ADEA Waiver. Executive acknowledges that he is knowingly and voluntarily waiving and releasing any rights Executive may have under the federal Age Discrimination in Employment Act (“ADEA Waiver”) and that the consideration given for the ADEA Waiver is in addition to anything of value to which Executive is already entitled. Executive furthers acknowledges that: (a) ADEA Waiver does not apply to any claims that may arise after Executive signs this Agreement; (b) Executive should consult with an attorney prior to executing this Agreement; (c) Executive has 21 calendar days within which to consider this Agreement (although he may choose to execute it earlier); (d) Executive has 7 calendar days following the execution of the Agreement to revoke it; and (e) the Agreement will not be effective until the eighth day after Executive signs it, provided that Executive has not revoked it (“Effective Date”). To revoke the Agreement, Executive must email to Renee Fricks a written notice of revocation at rfricks@greatelmcap.com, prior to the end of the 7-day period. Executive agrees that any
modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original 21-day consideration period (the last day of such consideration period, the “Deadline”). Executive acknowledges that his consent to this Agreement is knowing and voluntary. The offer will be automatically withdrawn if Executive does not sign the Agreement by the Deadline.
7.Matters Not Waived. Notwithstanding paragraphs 5 and 6 of this Agreement, Executive is not waiving, releasing, or giving up any claim for workers’ compensation or unemployment benefits, savings plan benefits, or any claim that cannot be legally waived. Executive is also not waiving his right to file or participate in an investigative proceeding with or to provide information to the government and any federal, state, or local governmental agency (“Agency”), including, by way of example only, the Equal Employment Opportunity Commission, the Securities and Exchange Commission, or the National Labor Relations Board. Executive is, however, to the fullest extent permitted by law, waiving his right to accept, recover, or retain any individualized monetary relief or other individual remedies from the Company in connection with any waived claim or any charge filed with an Agency, regardless of whether Executive or another party files such a claim or charge, and if Executive recovers such relief, he will assign, and hereby does assign, to the Company his right and interest to such relief to the fullest extent permitted by law. This Agreement does not affect, however, Executive’s right to receive and retain an award from an Agency for information provided to an Agency. In addition, the Executive’s right to indemnification, whether by virtue of his former service as an executive officer or as a member of the Board, for all periods arising prior to the Effective Date will continue in full force and effect.
8.No Admission of Liability. Nothing in this Agreement shall constitute or be treated as an admission by the Company or Released Parties of any liability, wrongdoing, or violation of law.
9.Cooperation. The Parties agree that certain matters in which Executive will be or was involved during his employment may necessitate his cooperation in the future. Accordingly, following the Separation Date, to the extent reasonably requested by the Company and subject to Executive’s professional commitments, Executive will cooperate with the Company in connection with matters arising out of Executive’s service to the Company, such cooperation to include without limitation the providing of truthful testimony in any hearing or trial as requested by the Company or any affiliate of the Company; provided, however, that the Company will make reasonable efforts to minimize disruption of Executive’s other activities.
10.Continuing Obligations. At all times in the future, Executive will remain bound by and agree to comply with Section 9 (a-d) of the Offer Letter and the CIAA, which are incorporated herein by reference.
11.Breach. In the event that Executive breaches any of his obligations under this Agreement or as otherwise imposed by law, the Company will be entitled to recover all relief provided by law or equity, including recovery of benefits or other consideration paid or provided under this Agreement.
12.Non-Disparagement. To the fullest extent permitted by law and except as otherwise provided in this Agreement, Executive agrees that he will not disparage or encourage or induce others to disparage the Company or any of the Released Parties. To the fullest extent permitted by law and except as otherwise provided in this Agreement, the Company agrees that the Board and the executive leadership team will not disparage or encourage or induce others to disparage the Executive and will so instruct the Board and the executive leadership team. For the purpose of this Agreement, “disparage” includes, without limitation, making comments or statements online, or to any person or entity that would adversely affect in any manner (a) the conduct of the business of the Company, the Executive, or any of the Released Parties (including, but not limited to, any business plans or prospects) or (b) the reputation of the Company, Executive or any of the Released Parties. A breach of this provision will be deemed to be a material breach of this Agreement. Nothing in this Agreement prohibits the Company or Executive from providing truthful information as required or permitted by law, including in a legal proceeding or a government investigation.
13.Arbitration Agreement. Executive and the Company agree that any and all claims or disputes arising out of or relating to this Agreement shall be resolved by final, binding and confidential arbitration before a single arbitrator in Boston, Massachusetts (or another mutually agreeable location) conducted under the Judicial Arbitration and Mediation Services (JAMS) Streamlined Arbitration Rules & Procedures, which can be reviewed at http://www.jamsadr.com/rules-streamlined-arbitration/. Before engaging in arbitration, Executive and the Company agree to first attempt to resolve the dispute informally or with the assistance of a mediator. Executive and the Company each acknowledge that by agreeing to this arbitration procedure, Executive and the Company waive the right to resolve any such dispute, claim or demand through a trial by jury or judge or by administrative proceeding. The arbitrator, and not a court, shall also be authorized to determine arbitrability, except as provided herein. The arbitrator may in his or her discretion award attorneys’ fees and costs to the prevailing party. All claims or disputes must be submitted to arbitration on an individual basis and not as a representative, class and/or collective action proceeding on behalf of other individuals. Any issue concerning the validity of this representative, class and/or collective action waiver must be decided by a Court and if for any reason it is found to be unenforceable, the representative, class and/or collective action claim may only be heard in Court and may not be arbitrated. Claims will be governed by their applicable statutes of limitations. This arbitration agreement does not cover any action seeking only emergency, temporary or preliminary injunctive relief (including a temporary restraining order) in a court of competent jurisdiction in accordance with applicable law to protect a party’s confidential or trade secret information. This arbitration agreement shall be governed by and construed and interpreted in accordance with the Federal Arbitration Act.
14.Governing Law. Except as to the arbitration provision, this Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts.
15.Entire Agreement. Executive agrees that this Agreement and the documents specifically incorporated herein by reference, constitute the entire agreement and understanding between Executive and the Company or any affiliate of the Company, with respect to the subject matter hereof and supersedes all prior and contemporaneous written or oral agreements, discussions, representations, warranties or understandings between Executive and the Company or any affiliate of the Company, including, but not limited to, any offer letter and any incentive
compensation agreement entered into by and between Executive and the Company; provided, however, that nothing in this Agreement modifies, supersedes, voids, or otherwise alters the documents specifically identified in this Agreement (except as expressly modified herein), or any other continuing obligations Executive owes the Company which survive the termination of employment. This Agreement may be modified only in a written document signed by Executive and a duly authorized officer of the Company.
16.Severability. The provisions of this Agreement are severable. If any provision of this Agreement is held invalid or unenforceable, such provision shall be deemed deleted from this Agreement and such invalidity or unenforceability shall not affect any other provision of this Agreement, the balance of which will remain in and have its intended full force and effect; provided, however that if such invalid or unenforceable provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to have been modified so as to be valid and enforceable to the maximum extent permitted by law.
17.Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one agreement. Executive and the Company agree that execution via DocuSign or a similar service, or of a scanned image, shall have the same force and effect as execution of an original, that an electronic signature or scanned image of a signature shall be deemed an original and valid signature, and that the Agreement may not be challenged on the basis of such signatures.
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/s/ Brent Pearson |
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Execution Date |
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May 15, 2023 |
Brent Pearson |
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By: |
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/s/ Adam Kleinman |
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Execution Date |
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May 15, 2023 |
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Adam Kleinman |
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President and Secretary |
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Exhibit A
Further Release (To Be Signed on or After the Separation Date)
Brent Pearson (“Executive”) and Great Elm Group, Inc. (“GEG”), on behalf of itself and its subsidiaries, and their parent, successor, predecessor, affiliate and related entities (collectively, the “Company”). acknowledge and agree that Executive’s employment ended effective _________________ (the “Separation Date”). In consideration of (i) Executive’s executing and not revoking this Further Release, and (ii) Executives’ compliance and continued compliance with the terms and conditions of the Separation Agreement entered into between you and the Company on ______________, 2023 (the “Separation Agreement”), in addition to the payments and benefits set forth in the Separation Agreement, the Company agrees to pay you final earnings and provide active employee benefits through the Separation Date as Consideration for this Further Release.
18.General Release and Waiver of Claims.
(i)In exchange for the consideration provided in the Separation Agreement and this Further Release, Executive, knowingly, voluntarily, unconditionally and irrevocably, hereby compromise, settle, waive, and release the Company and its predecessors, parent and subsidiary organizations, affiliates, and partners, and their past, present, and future officers, directors, shareholders, investors, agents, attorneys, and employees (in their individual and corporate capacities) (collectively, the “Released Parties”) from any and all past, present, or future claims, demands, obligations, or causes of action, whether based on tort, contract, statutory or other theories of recovery for anything that has occurred up to and including the Effective Date of the Further Release. Such claims include those Executive may have or has against the Released Parties, or which may later accrue to or be acquired by Executive against the Released Parties, whether or not directly or indirectly related to the employment relationship between the Company and Executive.
(ii)In addition, Executive specifically agrees to release and waive any claims for wrongful termination, discrimination, harassment or retaliation under federal, state or local law or regulation, and any other claims arising in any way from Executive’s hire, employment, benefits, compensation (including any and all claims salary, wages, bonus, commissions, incentive compensation, vacation and severance that may be legally waived and released), termination, or separation from employment with the Company, and any conduct by the Company, through the Effective Date of this Further Release. Executive hereby expressly waives and releases any and all claims or rights arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, as amended (ADA), the Family and Medical Leave Act (FMLA), the Fair Labor Standards Act (FLSA) (to the extent permitted by law), the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, the Executive Retirement Income Security Act (ERISA) (excluding claims for vested benefits), Sections 1981 through 1988 of U.S.C. Tile 42, the Fair Credit Reporting Act (FCRA), the Worker Adjustment and Retraining Notification Act (WARN), the National Labor Relations Act (NLRA), the Age Discrimination in Employment Act, as amended by the Older Workers Benefits Protection Act (ADEA), the Uniform Services Employment and Reemployment Rights Act (USERRA), the Rehabilitation Act, the Genetic Information Nondiscrimination Act (GINA), the Families First Coronavirus Response Act (FFCRA), the Immigration Reform and Control Act (IRCA), the Consolidated Omnibus Budget
Reconciliation Act (COBRA), the Occupational Safety and Health Act (OSHA), the Executive (whistleblower) civil protection provisions of the Corporate and Criminal Fraud Accountability Act (Sarbanes-Oxley Act), any other federal, state, local or foreign law (statutory, regulatory, or otherwise) that may be legally waived and released, and any and all claims arising under common law, tort, contract, and quasi-contract law, including but not limited to claims of breach of an express or implied contract, tortious interference with contract or prospective business advantage, breach of the covenant of good faith and fair dealing, promissory estoppel, detrimental reliance, invasion of privacy, nonphysical injury, personal injury or sickness or any other harm, wrongful or retaliatory discharge, fraud, defamation, slander, libel, false imprisonment, and negligent or intentional infliction of emotional distress, claims arising by virtue of his status as a stockholder, and any and all claims for compensatory or punitive damages, attorneys’ fees, costs or other expenses. The identification of specific statutes is for purposes of example only, and the omission of any specific statute or law will not limit the scope of this general release in any manner.
19.Representations by Executive. Subject to paragraph 7, Executive represents that (a) he has no complaint, charge, or claim pending against the Released Parties, either individually or in concert with any other person or entity, with any court, agency, board, department, or other body or office, and, to his knowledge, no other person or entity has initiated or, to the extent within his control, will initiate any such proceeding on his behalf, and (b) he will not, to the fullest extent permitted by law, whether directly or indirectly or whether individually or collectively, initiate, assert, file, prosecute, maintain, commence, institute, sponsor, assist, advise, represent, or facilitate any complaint, action, proceeding, investigation, arbitration, lawsuit, or claim or any legal, equitable, or administrative proceeding of any nature, concerning any of the claims released in this Further Release against the Released Parties. Executive further represents that he has been paid, fully and accurately, all remuneration owed to him as a result of his employment with the Company, or the termination of that employment, including, but not limited to, all salary, wages, overtime, vacation pay, bonus pay, profit-sharing, stock options, stock, expenses, termination benefits, commissions, or any other compensation, with the sole exception of the consideration set forth in this Further Release.
20.ADEA Waiver. Executive acknowledges that he is knowingly and voluntarily waiving and releasing any rights Executive may have under the federal Age Discrimination in Employment Act (“ADEA Waiver”) and that the consideration given for the ADEA Waiver is in addition to anything of value to which Executive is already entitled. Executive furthers acknowledges that: (a) ADEA Waiver does not apply to any claims that may arise after Executive signs this Further Release; (b) Executive should consult with an attorney prior to executing this Further Release; (c) Executive has 21 calendar days within which to consider this Further Release (although he may choose to execute it earlier); (d) Executive has 7 calendar days following the execution of the Further Release to revoke it; and (e) the Further Release will not be effective until the eighth day after Executive signs it, provided that Executive has not revoked it (“Effective Date”). To revoke the Further Release, Executive must email to Renee Fricks a written notice of revocation at rfricks@greatelmcap.com, prior to the end of the 7-day period. Executive agrees that any modifications, material or otherwise, made to this Further Release do not restart or affect in any manner the original 21-day consideration period (the last day of such consideration period, the “Deadline”). Executive acknowledges that his consent to this Further
Release is knowing and voluntary. The offer will be automatically withdrawn if Executive does not sign the Further Release by the Deadline.
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Execution Date |
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Brent Pearson |
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By: |
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Adam Kleinman |
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General Counsel |
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Exhibit 10.2
May 15th, 2023
Keri Davis
VIA EMAIL
KDavis@greatelmcap.com
Dear Keri,
This offer letter (the “Offer Letter”) sets forth the terms of your employment as of May 15th, 2023 (the “Effective Date”) as Chief Financial Officer of Great Elm Group, Inc. (“GEG”) and Great Elm Capital Corp., Inc. (“GECC”) and together with each other subsidiary of GEG, collectively or individually, as the context may require (the “Company”). By accepting this offer, this agreement supersedes and replaces that certain employment letter between you and Great Elm Capital Management, Inc. executed on 5/9/2019 and any other previous agreements with the Company.
1.Title. Your title will be Chief Financial Officer for GEG and GECC. In this position, you will report to Nichole Milz, Chief Operating Officer, and the Board of Directors of GEG and GECC (the “Board”).
3.Compensation. You will receive an annual salary of $240,000 (“Base Salary”). You will be paid on a monthly payroll cycle (the 15th of each respective month). Your position is considered exempt under the administrative exemption classification.
4.Discretionary Bonus Plan. Additionally, you will be eligible to participate in Great Elm’s Discretionary Bonus Plan. The Plan year is July 1st through June 30th and such bonuses are paid on an annual basis on or around September 15 (“Discretionary Bonus Plan”). Your target bonus under the Plan will be up to $190,000 for a full 12 months of employment service in this capacity, of which the target will be 50% cash and 50% equity, all subject to applicable tax withholdings. Equity will be granted in a mix of Restricted Shares of GEG stock and GECC stock owned by GEG, issued at the Board’s sole discretion, both subject to a vesting schedule. For the avoidance of doubt, the target bonus for the 2023 fiscal year will be prorated based on time served in this expanded role and time served in your former role as CFO of GECC.
It is understood and agreed that the Discretionary Bonus Plan and cycles discussed in this Section 4 are not a contractual entitlement or expectation that a bonus will be received. If Great Elm, in its discretion, makes a bonus payment in respect to a particular bonus year, such an award does not imply any expectation or entitlement in respect of future bonus years or any other periods. Great Elm retains the sole right to modify the payment schedule of the Discretionary Bonus Plan in its discretion and all determinations by Great Elm regarding the interpretation and application of such program shall be final and binding.
5.At any time during your employment, or upon the termination of your employment with Great Elm, Great Elm may deduct from any compensation amounts due you from Great Elm any money owed by you to Great Elm or any of its affiliates. Such sums, include, without limitation,
repayment of loans or advances made to you by Great Elm or any of its affiliates, overpayment of compensation or other benefits received by you from Great Elm, the cost of any damage to or loss of Great Elm’s property caused by you, and any loss suffered by Great Elm or any of its affiliates as a result of reasonable evidence of your dishonesty or fraud.
6.“At Will” Employment. The employment relationship between you and Great Elm is “at will.” This means that, except as set forth in the Notice Period provision included in your Terms of Employment, either you or Great Elm can terminate the employment relationship at any time with or without notice and with or without cause. This at will relationship between you and us cannot be changed or modified except as provided in the Terms of Employment. No representation by an employee or representative can change this policy or establish an employment contract or any term thereof.
7.Location. This position will be based in the Waltham, MA office, located at 800 South Street, Suite 230, Waltham, MA 02453.
8.Paid Time Off. Executives with Great Elm do not accrue paid time off. Professional time off may be taken as needed and we expect our professionals to act responsibly with regards to time off (vacation, sick, personal).
9.Employee Health & Welfare Benefits. You will be eligible to participate in the employee health and welfare benefit programs and 401(k) plan of Great Elm as of your date of hire. You recognize that Great Elm has the right, in its sole discretion, to amend, modify or terminate its benefit programs without creating any rights to you.
10.Compliance, Legal & Operations. You agree to comply with the policies and procedures of the Compliance, Legal and Operations departments, as interpreted at the discretion of Compliance, Legal and/or Operations department professionals, which includes but is not limited to trading standards, trading terms and language, and accounts that Great Elm approves for opening and dealing.
11.Your employment is contingent upon your execution of the attached Terms of Employment.
Please acknowledge your agreement with the above terms and conditions and return the executed copy to Great Elm via email, facsimile or mail as follows:
c/o Olivia Pine
Vice President, HR
3801 PGA Boulevard, Suite 603
Palm Beach Gardens, Florida 33410
Email: opine@greatelmcap.com Fax: 561.214.7998
Davis, K. Employment Letter
5/15/2023
We are pleased to have you join us and we are confident you will make an important contribution. Should you have any questions, please feel free to call Olivia Pine at any time 561.214.7942.
Sincerely,
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/s/ Adam Kleinman |
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/s/ Olivia Pine |
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Adam Kleinman |
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Olivia Pine |
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President |
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Vice President, Human Resources |
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/s/ Keri Davis |
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May 15, 2023 |
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Keri Davis |
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Davis, K. Employment Letter
5/15/2023
GREAT ELM CAPITAL MANAGEMENT, INC.
TERMS OF EMPLOYMENT
Subject to your agreement to these terms, we welcome you as an employee of Great Elm Capital Management, Inc. (the “Company”). Like most other organizations, we have certain policies essential to maintaining our high professional standards and protecting our valuable confidential and trade secret information. As a condition of your employment with the Company, please read this agreement (hereinafter “Agreement”) carefully and then sign it where indicated to confirm that you understand and agree to it.
CONFIDENTIALITY / TRADE SECRET INFORMATION.
(a) Company Information. You agree at all times during the term of your employment with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which you obtain or create. You further agree not to make copies of, remove, or otherwise transmit, by email or other manner such Confidential Information except as authorized by the Company. You understand that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom you called or with whom you became acquainted during your employment), investment strategy, portfolio information, valuation data, marketing plans, operations or business plans prices and costs, markets, software, developments, inventions, notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to you by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by you during the period of your employment, whether or not during working hours. You understand that “Confidential Information” includes, but is not limited to, information pertaining to any aspects of the Company’s business which is either information not known by actual or potential competitors of the Company or is proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise. You further understand that Confidential Information does not include any of the foregoing items which has become publicly and widely known and made generally available or readily ascertainable through no wrongful act of yours or of others who were under confidentiality obligations as to the item or items involved.
(b) Former Employer Information. You represent that your performance of all terms of this Agreement as an employee of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by you in confidence or trust prior or subsequent to the commencement of your employment with the Company, and you will not disclose to the Company, or induce the Company to use, any inventions, confidential or proprietary information or material belonging to any previous employer or any other party.
(c) Third Party Information. You recognize that the Company has received, and in the future will receive, confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it
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only for certain limited purposes. You agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out your work for the Company consistent with the Company’s agreement with such third party.
Nothing in this Agreement is intended to, or should be interpreted as preventing, prohibiting or discouraging you from bringing to the attention of federal, state, or local government officials, any regulatory agency, such as the Securities and Exchange Commission, or any self-regulatory organization (SRO), any information which you believe concerns a possible violation of law, regulation or SRO regulation, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Company to make any such reports or disclosures and you are not required to notify the Company that you have made such reports or disclosures. You understand and acknowledge that the federal Defend Trade Secrets Act (“DTSA”) provides that an individual shall not be held criminally or civilly liable for the disclosure of a trade secret that is made (i) in confidence to a government official or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, you understand and acknowledge that the DTSA provides that an individual who files a retaliation lawsuit against an employer for reporting a suspected violation of law may disclose a trade secret to his/her attorney and use the trade secret information in court, but only if the individual (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.
RETURNING COMPANY DOCUMENTS. You agree that, at the time of termination of your employment with the Company, you will deliver to the Company (and will not keep in your possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any aforementioned items developed by you pursuant to your employment or otherwise belonging to the Company, its successors or assigns. You further agree that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.
INSIDE INFORMATION/INSIDER TRADING. As a condition of your employment, you will be required to agree to the Company’s standard Insider Trading Policy which defines the trading window outside of which you, or persons related to you, may not trade in Company Securities.
CODE OF ETHICS. We have adopted a Code of Ethics and Conduct with respect to our obligations to our clients. As a condition of your employment with the Company, you hereby agree to follow that Code of Ethics and all other policies and procedures of the Company.
NOTICE PERIOD. You recognize and agree that it is reasonable and necessary for the Company to protect its Confidential Information and Trade Secrets and to provide a smooth transition in the event that your employment with the Company is terminated. Consequently, you agree that you will provide the Company with ninety (90) days prior written notice (the “Notice”)
Davis, K. Employment Letter
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of your intention to terminate your employment with the Company (the “Notice Period”). During the Notice Period, you will: (a) remain an employee of the Company; (b) be paid at the current base salary rate per month, less applicable withholdings and deductions; and (c) continue to be eligible to receive benefits pursuant to the Company’s applicable benefit plans. However, after you have provided the Notice, you will no longer be eligible to receive any commission, bonus, or other discretionary incentive payments or awards, even if the Notice Period includes the date on which a commission, bonus, or other discretionary incentive payment or award would have been paid to you had you not provided the Notice. During the Notice Period, the Company may choose to discontinue or otherwise limit your access to information, and the Company may, at its sole discretion, elect to (a) require you to continue to perform your regular duties, or (b) require you to discontinue your regular duties, including prohibiting you from further entry to any of the Company’s premises. If the Company requires you to discontinue your regular duties during the Notice Period, you will advise the Company of any changes to your personal email address, home address, or home telephone number, so that the Company may contact you if needed. The Company may also reduce the term of the Notice Period by accelerating the termination of your employment to an earlier date that the Company selects in its sole discretion, and payment of all compensation and benefits shall cease as of such earlier termination date.
NO SOLICITATION OF EMPLOYEES. To meet the demands of our clients, the Company invests substantial time and resources in identifying for hire and training quality Employees. For the purpose of this Agreement, “Employee” means an individual currently employed by the Company or previously employed by the Company within the last 180 days. In addition, the identities, compensation information and skill set of the Company’s Employees constitutes Confidential Information and Trade Secrets. In recognition of our investment, and to protect the Company’s Confidential Information and Trade Secrets, you agree that while you are employed by us, and for one (1) year after you cease being employed by us, regardless of the reason, you will not, whether on your own behalf or on behalf of or in conjunction with any other person, directly or indirectly, in any manner, solicit, induce, recruit or encourage any Employee to leave the Company’s employment.
NO SOLICITATION OF CLIENTS AND PROSPECTIVE CLIENTS. To protect the Confidential Information and Trade Secret information regarding the Company’s customers, clients, borrowers, investors, business, patronage or order of the Company (collectively, “Clients”) and prospective Clients, including their identities, you agree that while you are employed by the Company and for (a) one (1) year thereafter beginning with the date any applicable Notice Period begins you will not, directly or indirectly, as a principal, agent, contractor, employee, employer, partner or shareholder (other than as an owner of 2% or less of a public corporation) or in any other capacity, solicit, divert or otherwise take away from the Company (or attempt to solicit, divert or otherwise take away from the Company) any business of a current or prospective Client (i) with whom you have had personal contact or dealings on behalf of the Company during the two (2) year period prior to your termination of employment, (ii) with whom employees reporting to you have had personal dealings or contact on behalf of the Company during the two (2) year period prior to your termination of employment, (iii) for whom you have had direct or indirect responsibility during the two (2) year period prior to your termination of employment with the Company.
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NON-COMPETITION.
(i) You understand that the nature of your position gives you access to and knowledge of Confidential Information and Trade Secrets that places you in a position of trust and confidence with the Company. You further understand and acknowledge that the Company’s ability to reserve its Confidential Information and Trade Secrets for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company, and that improper use or disclosure by you is likely to result in unfair or unlawful competitive activity.
(ii) Because of the Company’s legitimate business interest as described in this Agreement and the good and valuable consideration offered to you, the receipt and sufficiency of which is acknowledged, during your employment and for a period of six (6) months beginning on the earlier of the date any applicable Notice Period begins or date of termination, the Employee agrees and covenants not to engage in Prohibited Activity.
(iii) For purposes of this non-compete clause, “Prohibited Activity” is activity in which you contribute your knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, contractor, agent, partner, director, stockholder, officer, volunteer, intern, or any other similar capacity to a “Competitive Enterprise.” “Competitive Enterprise” means any business, regardless of size or the form of the business, that (a) engages in investment strategies or any other business activities similar to any of those engaged by the Company, or (b) owns or controls a significant interest in any entity that engages in any investment strategies or any other business activities similar to any of those engaged in by the Company.
(iv) Nothing herein shall prohibit the Employee from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that the Employee is not a controlling person of, or a member of a group that controls, such corporation.
ENFORCEMENT/ DAMAGES. While employed by the Company and for a period of one (1) year thereafter, you will disclose to the Company, the name and address of any new employer or business affiliation within seven (7) days of accepting such position of employment or business affiliation. You also will provide the Company with any reasonably requested information about the nature of any new position so that the Company can evaluate compliance with this Agreement. Because your breach of this Agreement may cause the Company irreparable harm for which money is inadequate compensation, you agree that the Company will be entitled to injunctive relief to enforce this Agreement, in addition to actual damages, punitive damages and other available remedies. Further, in the event that the Company brings an action to enforce the Confidentiality/Trade Secret Information, Notice Period, and No Solicitation of Employees, Clients and Prospective Clients provisions of this Agreement, you will be liable for reasonable attorneys' fees and costs incurred by the Company in connection with the enforcement of this Agreement.
Davis, K. Employment Letter
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ASSIGNMENT. To advise our Clients we must perform extensive investment analysis. This analysis requires the application of many analytical tools and inventions. Some of these tools and inventions are developed during the course and scope of our work and are designed for internal use only. You agree that you will promptly disclose in writing to the Company all discoveries, developments, designs, ideas, improvements, inventions, formulas, processes, techniques, know-how, and data (whether or not patentable or registrable under copyright or similar statutes) made, conceived, reduced to practice, or learned by you (either alone or jointly with others) during the period of your employment, that are related to or useful in the business of the Company, or which result from tasks assigned to you by the Company, or from the use of premises owned, leased, or otherwise acquired by the Company. You acknowledge and agree that all such inventions and tools belong to and shall be the sole property of the Company and shall be inventions and tools of the Company subject to the provisions of this Agreement. You assign to the Company all right, title, and interest you may have or may acquire in and to all such inventions.
“AT WILL” EMPLOYMENT. The employment relationship between you and the Company is “at will.” This means that, except as set forth in the Notice Period provision above, either you or the Company can terminate the employment relationship at any time with or without notice and with or without cause. This at will relationship between you and us cannot be changed or modified except as provided in an express written agreement stating that the at-will relationship has been changed, and signed by a member of the Office of the President. No representation by an employee or representative can change this policy or establish an employment contract or any term thereof. This is the full and complete agreement between you and the Company on this subject.
AMENDMENT AND BINDING EFFECT. This Agreement may not be amended except by an instrument in writing signed by both parties. This Agreement shall be binding on your heirs, executors, administrators, and other legal representatives and assigns, and is for the benefit of the Company and its successors, assigns, subsidiaries or related entities, including Great Elm Capital Corp. and Great Elm Group.
SEVERABILITY. While the provisions contained in this Agreement are considered by you and the Company to be reasonable in all circumstances, it is recognized that some provision may fail to technical reasons. Accordingly, it is hereby agreed and declared that if any one or more of such provisions shall, either by itself or themselves or taken with others, be adjudged to be invalid as exceeding what is reasonable in all circumstances for the protection of the interest of the Company, but would be valid if any particular restrictions or provisions were deleted or restricted or limited in a particular manner, then the said provisions shall apply with any such deletions, restrictions, limitations, reductions, curtailments, or modifications as may be necessary to make them valid and effective and the remaining provisions shall be unaffected thereby.
ARBITRATION. You and the Company each voluntarily promise and agree to arbitrate any dispute or claim between you, on the one hand, and the Company on the other hand, during, regarding, relating to or arising out of in any way your employment with the Company and you knowingly thereby waive any right to a jury trial or court proceedings. You and the Company recognize that arbitration is a more efficient means of resolving any disputes and, therefore, the mutual promises to arbitrate by you and the Company, constitute adequate consideration for
Davis, K. Employment Letter
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each other and for this agreement to arbitrate. The parties further agree that such binding arbitration pursuant to this agreement shall be the sole and exclusive remedy for resolving any such claims or disputes. Although the decision of the arbitrator shall be the sole and exclusive remedy for any dispute, the decision may be subject to enforcement by a court.
1. Claims Covered by This Agreement.
a. Claims and disputes covered by this agreement include all claims by you against the Company (as defined below), and all claims that the Company may have against you, whether or not arising out of your employment (or its termination), including, without limitation, those arising under:
1) Any federal, state, or local laws, regulations, or statutes prohibiting employment discrimination (such as, without limitation, race, sex, sexual orientation, gender identity, national origin, age, disability, medical condition, pregnancy, genetic information, religion), retaliation, or harassment of any kind.
2) Any alleged or actual agreement or covenant (oral, written, or implied) between you and the Company.
3) Any Company policy or compensation or benefit plan, unless the decision in question was made by an entity other than the Company.
4) Any public policy or tort.
5) Any federal, state, or other governmental law, statute, regulation, or ordinance.
6) Any other claim for personal, emotional, physical, or economic injury.
b. The only disputes between you and the Company which are not included within this mutual agreement to arbitrate are:
1) Any claim by you for workers’ compensation benefits or unemployment benefits.
2) Any claim by you for benefits under a Company employee benefit plan which provides its own arbitration procedure.
3) Any claims which, as a matter of law, cannot be subject to mandatory arbitration.
2. Class/ Collective Action Waiver; Provisional Remedies.
To the extent permitted by law, you agree that you may only bring claims under this Agreement in your individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding. You and the Company agree that nothing in this agreement is intended to prevent either you or the Company from obtaining emergency injunctive relief, or other provisional remedies from a court on the ground that the arbitration award to which you or the Company may be entitled may be rendered ineffectual without the injunctive or provisional
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relief. You agree to submit to the exclusive jurisdiction of any available federal or state court located in Boston, MA for such proceeding.
3. Arbitration Procedure.
a. A written request for arbitration will be served on the other party.
b. At the time a written arbitration request is made, the arbitration will be conducted in accordance with the then-current Employment Arbitration rules of the Judicial Arbitration and Mediation Services (“JAMS”), except as those Employment Arbitration Rules are modified by or inconsistent with the procedures below. A copy of the JAMS Employment Arbitration Rules can be accessed on the worldwide web at www.jamsadr.com or obtained from the Company’s Human Resources Department.
i. The arbitration will be held in the state and county of your primary employment at the time of the act giving rise to the dispute.
ii. The arbitrator’s fees will be paid by the Company. Each party will pay for the fees and expenses of its own attorneys, experts, witnesses, and preparation and presentation of evidence and post-hearing briefs unless the party prevails on a claim for which attorneys’ fees are recoverable by applicable statute or contract.
iii. The arbitrator shall be neutral and will have experience in arbitrating employment disputes. The arbitrator shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to, any claim that all or any part of this Agreement is void or voidable. The arbitrator shall have the authority to grant any party all remedies otherwise available by law, including injunctions, but the arbitrator shall not have the power to grant any remedy that would not be available in state or federal court. The arbitrator shall apply the applicable statute of limitations to any claim. The arbitrator may not consolidate more than one person’s claims and may not otherwise preside over any form of a representative or class proceeding.
iv. Discovery shall be conducted in accordance with the then-current Employment Arbitration rules of JAMS. The arbitration shall provide discovery adequate to give the parties access to documents and witnesses that are essential to the dispute.
v. Each party shall have the right to subpoena witnesses and documents for the arbitration.
vi. The Arbitrator shall render a written award and opinion that includes the essential findings and conclusions upon which the decision is based. The arbitrator’s decision must be issued no later than thirty (30) days after a dispositive motion is heard and/or an arbitration hearing has been completed. The arbitrator’s decision regarding the claims shall be final and binding upon the parties and shall be enforceable in any court having jurisdiction thereof.
vii. Any action to enforce or vacate the arbitrator’s award shall be governed by the Federal Arbitration Act if applicable, and otherwise by applicable state law.
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c. This is the complete agreement of the parties on the subject of arbitration of disputes of claims. This agreement shall survive the termination of your employment and can only be revoked or modified by a writing signed by you and a member of the Office of the President which specifically states an intent to revoke or modify this agreement to arbitrate. If any provision of this agreement to arbitrate is adjudged to be void or otherwise unenforceable in whole or in part, such adjudication shall not affect the validity of the remainder of such agreement.
4. Miscellaneous Provisions.
a. “Great Elm Capital Management, Inc.” or “the Company” means Great Elm Capital Management, Inc. and all related entities including Great Elm Capital Corp., Great Elm Group, Inc.; all current and former officers, employees, directors, agents, shareholders, partners, benefit plans, benefit plan sponsors, fiduciaries, administrators, or affiliates of any of the above; and all successors and assigns of any of the above.
b. These Terms of Employment and the Employment Letter, together with all of the Company’s policies and procedures relating to employees, as in effect from time to time (collectively, “Employment Documents”), constitute our entire agreement with respect to your employment with the Company and no prior negotiations, drafts, arrangements or understandings with respect thereto shall be of any effect. This is the complete agreement of the parties on the subjects contained herein, and it supersedes any prior or contemporaneous oral, written, or implied understanding on these subjects.
c. If any sentence, phrase, paragraph, subparagraph or portion of this Agreement is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining sentences, phrases, paragraphs, subparagraphs or portions of this Agreement.
d. You have the right to have this Agreement reviewed by a counsel of your own choice.
e. This agreement is not, and shall not be construed to create, any contract of employment, express or implied, nor does this agreement in any way alter the “at will” status of your employment.
Please refer to the Company’s complete policies and procedures governing your employment.
ASK FOR HELP. If you are ever unsure about whether some action would be consistent with our policies, you agree to ask us. Similarly, any time you encounter a situation and you are unsure what to do, you agree to tell us and ask for help.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
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GREAT ELM CAPITAL MANAGEMENT, INC. |
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By: |
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/s/ Adam Kleinman |
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Name: |
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Adam Kleinman |
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Title: |
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President |
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EMPLOYEE |
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/s/ Keri Davis |
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Keri Davis |
Davis, K. Employment Letter
5/15/2023
