FORM OF CONSULTING AGREEMENT
Exhibit
10.19
FORM
OF
This
Consulting Agreement (“Agreement”),
dated as of __________, 2009, is by and between Grande Communications Networks
LLC, a Delaware limited liability company and successor-in-interest to Grande
Communications Networks, Inc. (the “Company”),
and Xxx X. Xxxxxxxxx (“Xxxxxxxxx”). In
the event the Transaction (as defined herein) is not consummated, this Agreement
shall be null and void.
RECITALS
WHEREAS, this Agreement shall
become effective contemporaneously with the consummation of the Transaction (the
“Effective
Time”); the transactions contemplated by the Recapitalization Agreement
dated as of August 27, 2009, by and among ABRY Partners VI, L.P., Grande
Communications Networks, Inc., Grande Communications Holdings, Inc., ABRY
Partners, LLC, Grande Investment L.P., and Grande Parent LLC are referred to as
the “Transaction”;
WHEREAS, Xxxxxxxxx has served
as Chief Executive Officer of Grande Communications Networks, Inc., pursuant to
the terms of an Employment Agreement, effective as of December 31, 2005, as
amended (the “Employment
Agreement”);
WHEREAS, the Company will
terminate Xxxxxxxxx’x employment relationship at the Effective
Time;
WHEREAS, after termination of
such employment relationship, the Company desires to engage the service of
Xxxxxxxxx as a consultant and Xxxxxxxxx desires to accept such engagement upon
the terms and conditions hereinafter set forth; and
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1.
Termination
and Consulting Services.
(a) The
Company and Xxxxxxxxx acknowledge and agree that Xxxxxxxxx’x employment with the
Company is terminated by the Company without Cause (as defined in the Employment
Agreement) at the Effective Time pursuant to Section 10(b)(2) of the Employment
Agreement. As a result, the Company acknowledges and agrees that upon
the Effective Time it will be obligated to commence Severance Pay and Benefit
Continuation (as such terms are defined in the Employment Agreement) to
Xxxxxxxxx pursuant to Section 10(b)(5) of the Employment Agreement.
(b) From
the day following the Effective Time until the 180th day following the Effective
Time (such 180th day, the “Consulting End
Date”, and such period, the “Consulting
Services Period”), Xxxxxxxxx shall render such consulting services (the
“Services”)
to the Company as may reasonably be requested by the Company from time to
time. Notwithstanding anything to the contrary in this Agreement, the
parties intend that the average level of bona fide services to be provided by
Xxxxxxxxx during the Consulting Services Period shall be equal to or less than
20% of the average level of the bona fide services provided by Xxxxxxxxx during
the 36-month period immediately preceding the Effective
Time. Xxxxxxxxx shall not incur any travel or other expenses in
performing the Services unless approved in advance by the Chief Executive
Officer of the Company. Xxxxxxxxx may engage in other services,
employment or occupation during the Consulting Services Period as long as such
services, employment or occupation are not contrary to the provisions of this
Agreement and do not materially interfere with his duties and obligations
hereunder. Xxxxxxxxx shall comply with all applicable laws in
providing Services and shall provide such Services in accordance with industry
standards.
2.
Payment. As
consideration for the provision of the Services in accordance with this
Agreement, a lump sum of $112,500 (less payroll taxes and other applicable
withholdings and deductions) (the “Consulting
Bonus”) will be payable to Xxxxxxxxx in accordance with and subject to
the terms and conditions of this Section
2. Payment of the Consulting Bonus under this Section 2 is subject
to execution and delivery of a release executed by Xxxxxxxxx on or after the
Consulting End Date on a form prepared by the Company (the “Release”).
The Consulting Bonus will be paid to Xxxxxxxxx in a single payment within ten
(10) business days following the eighth (8th) day after Xxxxxxxxx signs and
delivers the Release; provided that if Xxxxxxxxx revokes the Release within such
eight (8) day period or does not execute and deliver the Release to the Company
within thirty (30) business days after the Consulting End Date, Xxxxxxxxx will
not be entitled to any Consulting Bonus under this
Agreement. Notwithstanding anything in this Agreement to the
contrary, the Company shall have no obligation to make any payment under this
Agreement if (1) Xxxxxxxxx is in material breach of Section 11 of the Employment
Agreement; (2) the Company terminates this Agreement for Cause, or (3) Xxxxxxxxx
is no longer available to perform Services prior to the Consulting End Date due
to his death or Disability. For purposes of this Agreement, “Cause”
shall mean (i) the commission by Xxxxxxxxx of a felony or a crime involving
moral turpitude or the commission of any other act involving dishonesty,
disloyalty or fraud, (ii) conduct by Xxxxxxxxx tending to bring the Company into
substantial public disgrace or disrepute, (iii) failure of Xxxxxxxxx to perform
(in any material respect) his obligations under this Agreement or the reasonable
directives of the Chief Executive Officer or the Board, provided, that the Chief
Executive Officer or the Board shall give Xxxxxxxxx notice of such failure and
Xxxxxxxxx shall have thirty (30) days to cure such failure, which if such
failure is not cured during said thirty (30) day period, the Company shall have
the immediate right to terminate the Services under this Agreement; (iv) gross
negligence or willful misconduct by Xxxxxxxxx in providing the Services; or (v)
any substance abuse of Xxxxxxxxx in any manner interferes with the performance
of the Services. For purposes of this Agreement, “Disability”
shall mean Xxxxxxxxx has become mentally or physically incapacitated to the
extent that he is unable to perform the Services under this Agreement for a
period of three (3) months, as determined by the Company following consultation
with and the advice of his attending or family physician or other qualified
physician.
3.
Independent
Contractor. Nothing herein contained shall be deemed to create
an agency, joint venture, partnership or franchise relationship between the
parties hereto. Xxxxxxxxx acknowledges that, with respect to the
provision of Services during the Consulting Services Period, he will be an
independent contractor, will not be an agent or employee of the Company or any
affiliated entity, will not be entitled to any Affiliated Entity employment
rights or benefits (except as expressly provided herein) and will not be
authorized to act on behalf of the Company or any affiliated
entity. Xxxxxxxxx further acknowledges and agrees that, with respect
to the provision of Services during the Consulting Services Period, he waives
any and all rights he has, or may have, against the Company or any affiliated
entity under the Employee Retirement Income Security Act of
1974. Xxxxxxxxx shall be solely responsible for any and all tax
obligations of Xxxxxxxxx arising from or relating to Section 2 of
this Agreement. Notwithstanding the above, the Company has the right
to withhold amounts from the payment provided in Section 2 if in fact
the Company determines that it is otherwise obligated to withhold such amounts
under applicable laws.
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4.
Cancellation
of Stock Options. Xxxxxxxxx hereby acknowledges receipt of the
Cancellation Notice from the Board of Directors of the Company, whereby the
Board of Directors communicated its intent to terminate all options in
connection with the Transaction pursuant to Section 15(c)(iii) of the Grande
Communications Holdings, Inc. 2000 Stock Incentive Plan. Xxxxxxxxx
further acknowledges and agrees that it is his sole responsibility to exercise
the vested portion of any options under the Plan that he holds by the
Cancellation Date (as defined in the Cancellation Notice) and that any such
vested options that are not so exercised will expire upon the Cancellation
Date.
5.
409A.
Notwithstanding any provision of this Agreement to the contrary, if all or any
portion of the payments and/or benefits under this Agreement are determined to
be have been made upon a separation from service and are determined to be
“nonqualified deferred compensation” subject to Xxxxxxx 000X xx xxx Xxxxxx
Xxxxxx Internal Revenue Code of 1986, as amended (the “Code”), and the
Company determines that Xxxxxxxxx is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and the final regulations promulgated
thereunder (the “Treasury Regulations”) and other guidance issued thereunder,
then such payments and/or benefits (or portion thereof) shall be paid no earlier
than the first day of the seventh month following Xxxxxxxxx’x separation from
service (with the first such payment being a lump sum equal to the aggregate
payments and/or benefits Xxxxxxxxx would have received during such six-month
period if no such payment delay had been imposed.) For purposes of
this Section 5,
“separation from service” will have the meaning as set forth in Section
1.409A-1(h) of the Treasury Regulations, including the default presumptions
thereunder.
6.
Parachute
Limitations. Notwithstanding any other provision of this Agreement
or of any other agreement, contract, or understanding heretofore or hereafter
entered into by Xxxxxxxxx with the Company or any affiliate of the Company,
except an agreement, contract, or understanding hereafter entered into that
expressly modifies or excludes application of this paragraph (an “Other
Agreement”), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to Xxxxxxxxx,
whether or not such compensation is deferred, is in cash, or is in the form of a
benefit to or for Xxxxxxxxx (a “Benefit
Arrangement”), if Xxxxxxxxx is a “disqualified individual,” as defined in
Section 280G(c) of the Internal Revenue Code of 1986, as amended, (the
“Code”), any payment (or portion thereof) under this Agreement shall not be made
(i) to the extent that such payment, taking into account all other rights,
payments, or benefits to or for Xxxxxxxxx under this Agreement, all Other
Agreements, and all Benefit Arrangements, would cause any payment or benefit to
Xxxxxxxxx under this Agreement to be considered a “parachute payment” within the
meaning of Section 280G(b)(2) of the Code as then in effect (a “Parachute
Payment”) and (ii) if, as a result of receiving a Parachute Payment, the
aggregate after-tax amounts that Xxxxxxxxx would receive from the Company under
this Agreement, all Other Agreements, and all Benefit Arrangements would be less
than the maximum after-tax amount that Xxxxxxxxx could receive without causing
any such payment or benefit to be considered a Parachute Payment. In
the event that the receipt of any such right to payment under this Agreement, in
conjunction with all other rights, payments, or benefits to or for Xxxxxxxxx
under any Other Agreement or any Benefit Arrangement would cause Xxxxxxxxx to be
considered to have received a Parachute Payment under this Agreement that would
have the effect of decreasing the after-tax amount that Xxxxxxxxx would receive
as described in clause (ii) of the preceding sentence, then Xxxxxxxxx shall have
the right, in Xxxxxxxxx’x sole discretion, to designate those rights, payments,
or benefits under this Agreement, any Other Agreements, and any Benefit
Arrangements that should be reduced or eliminated so as to avoid having the
payment or benefit under this Agreement be deemed to be a Parachute
Payment.
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7.
Miscellaneous.
(a) No
Assignment. Neither this Agreement nor any right, interest or
obligation hereunder may be assigned (by operation of law or otherwise) by
Employee without the prior written consent of the Company and any attempt to do
so will be void.
(b) Amendments. This
Agreement cannot be modified or amended except by a written agreement executed
by all parties hereto.
(c) Waiver of Provisions;
Remedies Cumulative. Any waiver of any term or condition of
this Agreement must be in writing, and signed by all of the parties
hereto. The waiver of any term or condition hereof shall not be
construed as either a continuing waiver with respect to the term or condition
waived, or a waiver of any other term or condition hereof. No party
hereto shall by any act (except by written instrument pursuant to this Section),
delay, indulgence, omission or otherwise be deemed to have waived any right,
power, privilege or remedy hereunder or to have acquiesced in any default in or
breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of any party hereto, any
right, power, privilege or remedy hereunder shall operate as a waiver
thereof.
(d) Survival. All
provisions of this Agreement which by their terms are intended to survive
termination or expiration of this Agreement shall survive such termination or
expiration in accordance with their terms.
(e) Severability;
Interpretation. Any provision of this Agreement that is found
in a final judicial determination by a court of competent jurisdiction to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability (but shall
be construed and given effect to the extent possible), without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
(f)
Governing
Law/Venue. This
Agreement shall be construed and interpreted in accordance with the laws of the
State of Texas. The sole and exclusive venue for any dispute arising
out of this Agreement shall be in a court of competent jurisdiction located in
Xxxxxx County, Texas.
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(g) Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original but all of which together will constitute one and the same
instrument. This Agreement will become effective when one or more
counterparts have been signed by each party and delivered to the other party,
which delivery may be made by exchange of copies of the signature page by .pdf
or other facsimile transmission.
(h) Notices. Any
notice required or permitted to be given under this Agreement shall be deemed
properly given if in writing and personally delivered or mailed by certified
U.S. mail, postage prepaid with return receipt requested, in the case of notices
mailed to Xxxxxxxxx, at the address set forth below or, in the case of notices
to the Company, to its principal office at 000 Xxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxx
00000, to the attention of its President.
(i)
Entire
Agreement. This instrument contains the entire agreement of
the parties relating to the subject matter hereof and supersedes all prior
agreements and arrangements, both written and oral, with respect to the subject
matter hereof.
[Signature
page follows]
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IN
WITNESS WHEREOF, the parties have executed this Agreement to be effective for
all purposes as of the Effective Time.
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GRANDE
COMMUNICATIONS NETWORKS LLC
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By:
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Xxxxxxx
X. Xxxxxxx, Chief Financial Officer
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Xxx
X. Xxxxxxxxx
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Address:
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Signature
Page to Xxxxxxxxx Consulting Agreement
