CONSULTING AGREEMENT
Exhibit 10.14
This
Consulting Agreement (“Agreement”),
dated as of September 14, 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 Xxxxxxx X. Xxxxxxx (“Xxxxxxx”). 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 upon the date (the “Effective
Date”) of the consummation of 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 (the “Transaction”);
WHEREAS, Xxxxxxx has served as
Chief Financial Officer of Grande Communications Networks, Inc., pursuant to the
terms of an Employment Agreement, entered into between Xxxxxxx and Grande
Communications Networks, Inc., dated as of June 28, 2006, as amended (the “Employment
Agreement”);
WHEREAS, the Company intends
to terminate Xxxxxxx’x employment relationship sixty (60) days following the
Effective Date;
WHEREAS, after termination of
such employment relationship, the Company desires to engage the service of
Xxxxxxx as a consultant and Xxxxxxx desires to accept such engagement upon the
terms and conditions hereinafter set forth.
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.
Change
in Position. In connection with the consummation of the
Transaction, the Company will change Xxxxxxx’x title and position with the
Company. The Company acknowledges and agrees that such change in
title and position involves a material diminution in Xxxxxxx’x duties and
responsibilities with the Company and will constitute a “Good Reason
Termination” under the Employment Agreement. By entering into this Agreement,
the Company acknowledges and agrees that Xxxxxxx has provided the Company with
written notice of the occurrence of this condition that may constitute a Good
Reason Termination within ninety days of its initial occurrence, as required
under Section 9(b)(3) of the Employment Agreement. The Company does
not intend to cure this condition that constitutes Good Reason Termination and
hereby waives its right to cure such condition as is otherwise provided under
Section 9(b)(3) of the Employment Agreement. In the event that
Xxxxxxx provides sixty days notice of his intent to terminate employment within
one year of the Effective Date as required under Section 9(b)(3) of the
Employment Agreement, the Company agrees to fulfill its obligations under the
Employment Agreement under Section 9(b)(5) for Severance Pay (as defined under
the Employment Agreement), provided all other conditions thereunder to receipt
of Severance Pay have been satisfied. Xxxxxxx agrees that, at any
time after the date hereof, the Company may terminate Xxxxxxx’x employment and,
upon such termination, shall be responsible for all obligations associated with
such termination as set forth under the Employment Agreement.
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2.
Termination and
Consulting Services.
(a)
The Company intends to terminate Xxxxxxx’x employment
with the Company without Cause (as defined in the Employment Agreement) as of
the date that is sixty (60) days following the Effective Date (the “Termination
Date”) pursuant to Section 9(b)(2) of the Employment
Agreement. As a result, the Company acknowledges and agrees that it
will be obligated to commence Severance Pay and Benefit Continuation (as such
terms are defined in the Employment Agreement) to Xxxxxxx pursuant to Section
9(b)(5) of the Employment Agreement.
(b)
From the day following the Termination Date until the
120th day following the Termination Date (such 120th day, the “Consulting End
Date”, and such period, the “Consulting
Services Period”), Xxxxxxx shall render 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
Xxxxxxx during the Consulting Services Period shall be equal to or less than 20%
of the average level of the bona fide services provided by Xxxxxxx during the
36-month period immediately preceding the Termination Date. Xxxxxxx
shall not incur any travel or other expenses in performing the Services unless
approved in advance by the Chief Executive Officer of the
Company. Xxxxxxx 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. Xxxxxxx shall comply with all applicable laws in providing
Services and shall provide such Services in accordance with industry
standards.
3.
Payment. As
consideration for the provision of the Services, a lump sum of $112,500, less
payroll taxes and other applicable withholdings and deductions (the “Consulting
Bonus”) will be payable to Xxxxxxx in accordance with and subject to the
terms and conditions of this Section
3. Payment of the Consulting Bonus under this Section 3 is subject
to execution and delivery of a release executed by Xxxxxxx on or after the
Consulting End Date on a form prepared by the Company (the “Release”).
The Consulting Bonus will be paid to Xxxxxxx in a single payment within ten (10)
business days following the eighth (8th) day after Xxxxxxx signs and delivers
the Release; provided that if Xxxxxxx 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, Xxxxxxx 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) Xxxxxxx is in material breach of Section 10 of the Employment
Agreement or the post-employment obligations under Employee Confidentiality
Information and Invention Assignment Agreement between Executive and the Company
dated as of July 12, 2000 (the “Confidentiality
Agreement”); (2) the Company terminates this Agreement for Cause, or (3)
Xxxxxxx 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 Xxxxxxx of a felony or a crime involving moral
turpitude or the commission of any other act involving dishonesty, disloyalty or
fraud; (ii) conduct by Xxxxxxx tending to bring the Company into substantial
public disgrace or disrepute; (iii) failure of Xxxxxxx to perform (in any
material respect) his obligations under this Agreement, his obligations under
the Confidentiality Agreement, or the reasonable directives of the Chief
Executive Officer or the Board, provided, that the Chief Executive Officer or
the Board shall give Xxxxxxx notice of such failure and Xxxxxxx 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 Xxxxxxx in providing the Services; or (v) any substance abuse of
Xxxxxxx in any manner interferes with the performance of the
Services. For purposes of this Agreement, “Disability”
shall mean Xxxxxxx 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.
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4.
Independent
Contractor. Nothing herein contained shall be deemed to create
an agency, joint venture, partnership or franchise relationship between the
parties hereto. Xxxxxxx 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. Xxxxxxx 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. Xxxxxxx
shall be solely responsible for any and all tax obligations of Xxxxxxx arising
from or relating to Section 3 of this
Agreement. Notwithstanding the above, the Company has the right to
withhold amounts from the payment provided in Section 3 if in fact
the Company determines that it is otherwise obligated to withhold such amounts
under applicable laws.
5.
Cancellation
of Stock Options. Xxxxxxx 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. Xxxxxxx
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.
6.
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 Xxxxxxx 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 Xxxxxxx’x separation from service (with
the first such payment being a lump sum equal to the aggregate payments and/or
benefits Xxxxxxx 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.
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7.
Parachute
Limitations. Notwithstanding any other provision of this
Agreement or of any other agreement, contract, or understanding heretofore or
hereafter entered into by Xxxxxxx 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 Xxxxxxx,
whether or not such compensation is deferred, is in cash, or is in the form of a
benefit to or for Xxxxxxx (a “Benefit
Arrangement”), if Xxxxxxx 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 Xxxxxxx under this Agreement, all
Other Agreements, and all Benefit Arrangements, would cause any payment or
benefit to Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx under
any Other Agreement or any Benefit Arrangement would cause Xxxxxxx to be
considered to have received a Parachute Payment under this Agreement that would
have the effect of decreasing the after-tax amount that Xxxxxxx would receive as
described in clause (ii) of the preceding sentence, then Xxxxxxx shall have the
right, in Xxxxxxx’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.
8.
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.
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(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.
(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 Xxxxxxx, 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 Date provided above.
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GRANDE
COMMUNICATIONS NETWORKS LLC
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By
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/s/
W.K.L. “Xxxxx” Xxxxxxxx, Jr.
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Name:
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W.K.L.
“Xxxxx” Xxxxxxxx, Jr.
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Chief
Operating Officer
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/s/
Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Address:
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