Exhibit 10.6

 

GREAT AMERICAN GROUP, INC.

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered
into as of May 19, 2014, between Great American Group, Inc., a Delaware
corporation (the “Company”‘), and Andrew Gumaer (“Executive”).

 

RECITALS

 

A.           Pursuant to the Acquisition Agreement (“Acquisition Agreement”)
dated as of May 19, 2014, by and among the Company and the other parties named
therein, the Company shall acquire the Seller Companies (the “Transaction”).
Nothing in this Agreement is intended to supersede or alter the terms of the
Acquisition Agreement. Capitalized terms used herein that are not otherwise
defined shall have the meanings assigned them in the Acquisition Agreement.

 

B.           Executive and the Company are parties to that certain Employment
Agreement dated as of July 31, 2009 (the “Original Agreement”), and they now
desire to amend, restate and supersede the Original Agreement by entering into
this Agreement.

 

B.           As a condition and material inducement for the each of the Company
and the other parties to the Transaction to enter into the Acquisition Agreement
and consummate the Transaction, the parties wish to provide for Executive’s
continued employment with the Company following the consummation of the
Transaction in accordance with the terms of this Agreement.

 

Agreement

 

NOW THEREFORE, in consideration of the mutual promises contained in this
Agreement and for other good and valuable consideration, the sufficiency of
which is hereby agreed, the Company and Executive agree as follows:

 

1.              Position and Responsibilities; Term.

 

(a)          Term. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the First Closing (the “Effective
Date”) and ending on the third anniversary of the Effective Date (the
“Employment Period”). Commencing on the second anniversary of the Effective Date
and on each anniversary thereafter, the Employment Period shall be automatically
extended for one year terms, unless either Executive or the Company gives the
other party not less than 90 days’ prior written notice of the intention to not
extend this Agreement.

 

 

 

 

(b)          Position and Duties.         During the Employment Period,
Executive shall serve as the Chief Executive Officer of Great American Group,
LLC, a wholly-owned subsidiary of the Company and shall have the typical duties,
responsibilities, functions and authority associated with such position, subject
to the power and authority of the Company’s Board of Directors. In addition,
during the Employment Period, Executive shall serve as a member of the Board of
Directors of the Company. Executive shall abide by the rules, regulations, and
practices as adopted or modified from time to time in the Company’s sole
discretion.

 

(c)          Other Activities. Except upon the prior written consent of the
Company, Executive will not, during the term of this Agreement, (i) accept any
other employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that might interfere
with Executive’s duties and responsibilities hereunder or create a conflict of
interest with the Company; provided, however, that Executive may serve on civic
or charitable boards or engage in charitable activities without remuneration if
doing so is not inconsistent with, or adverse to, Executive’s employment
hereunder.

 

2.             Compensation and Benefits.

 

(a)          Base Salary. In consideration of the services to be rendered under
this Agreement, the Company shall pay Executive a salary at the rate of
Three-Hundred-Thousand Dollars ($300,000.00) per year (“Base Salary”). The Base
Salary shall be paid in accordance with the Company’s regularly established
payroll practice. Executive’s Base Salary will be reviewed from time to time in
accordance with the established procedures of the Company for adjusting salaries
for similarly situated employees and may be adjusted in the sole discretion of
the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”).

 

(b)          Discretionary Annual Bonus. Within 60 days after the end of each
fiscal year during the Employment Period, including the fiscal year ending
December 31, 2014, the Compensation Committee shall evaluate Executive’s
performance in light of factors that such committee deems relevant. Based on
this evaluation, Executive will be eligible to receive an annual bonus award for
performance in each fiscal year. The amount of the annual bonus, if any, shall
be determined in the sole discretion of the Compensation Committee and shall be
paid in accordance with the Company’s regularly established payroll practice
within 75 days of the end of the relevant fiscal year.

 

(c)          Equity Incentive Awards. Executive shall be entitled to the grant
of equity incentives at the discretion of the Compensation Committee.

 

(d)          Business Expenses. During the Employment Period, the Company shall
reimburse Executive for all reasonable business expenses incurred by him in the
course of performing his duties and responsibilities under this Agreement which
are consistent with the Company’s policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject to the
Company’s requirements with respect to reporting and documentation of such
expenses. Notwithstanding the foregoing, Executive shall be entitled to
reimbursement for the cost of first class air travel for any domestic or
international travel reasonably related to Executive’s duties.

 

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(e)          Benefits. In addition to the Base Salary and any annual bonuses or
other compensation payable to Executive pursuant to this Section 2, Executive
shall be entitled to participate in all of the Company’s employee benefit
programs for which senior executive employees of the Company and its
Subsidiaries are generally eligible on terms and conditions no less favorable
than offered to such other senior employees. Executive will be entitled to paid
vacation days and paid holidays in accordance with the normal vacation policy
and applicable paid holiday policy of the Company, provided that in no event
shall Executive be entitled to less than twenty (20) paid vacation days per
year.

 

(f)          Indemnification. The Company agrees that it shall defend,
indemnify, and hold Executive harmless to the fullest extent permitted by
applicable law from and against any and all liabilities, costs and claims, and
all expenses actually incurred by Executive in connection therewith by reason of
the fact that Executive is or was employed by the Company, served as a director
of the Company, or otherwise provided services to the Company including, without
limitation, all costs and expenses actually and reasonably incurred by Executive
in defense of litigation arising out of Executive’s employment hereunder. All
amounts payable to Executive or on Executive’s behalf under this subsection (f)
shall be paid to Executive or on Executive’s behalf immediately on Executive
incurring such liability. The Company shall maintain directors’ and officers’
insurance on such terms as determined by the Company, naming Executive as an
additional insured. The Company shall use commercially reasonable efforts to
ensure that the directors’ and officers’ insurance shall provide for a tail
period of not less than six years post-employment.

 

3.             Termination.

 

(a)          At-Will Termination by the Company. Executive’s employment with the
Company shall be “at-will” at all times. The Company may terminate Executive’s
employment with the Company at any time, without any advance notice, for any
reason or no reason at all, notwithstanding anything to the contrary contained
in or arising from any statements, policies or practices of the Company relating
to the employment, discipline or termination of its employees. Upon and after
such termination, all obligations of the Company under this Agreement shall
cease, except as otherwise provided herein.

 

(b)          At-Will Termination by Executive. Executive may terminate
employment with the Company at any time for any reason or no reason at all, upon
four weeks’ advance written notice. During such notice period Executive shall
continue to diligently perform all of Executive’s duties hereunder. The Company
shall have the option, in its sole discretion, to make Executive’s termination
effective at any time prior to the end of such notice period. Thereafter all
obligations of the Company shall cease, except as otherwise provided herein.

 

(c)          Effect of Termination. Upon termination of Executive’s employment,
Executive shall be deemed to have resigned from all offices and directorships
then held with the Company. Following any termination of employment, Executive
shall cooperate with the Company in the winding up of pending work on behalf of
the Company and the orderly transfer of work to other employees. If the
Employment Period is terminated for any reason, then Executive shall be entitled
to receive his Base Salary through the date of termination or expiration,
together with any vested retirement or other benefits accrued on or prior to
such termination, accrued life, disability insurance benefits and accrued but
untaken vacation days and other amounts owing hereunder as of the date of such
termination that have not yet been paid, including, but not limited to
unreimbursed business expenses. Any outstanding equity or equity-based awards
granted to Executive prior to the date of termination or expiration shall be
subject to the terms and conditions of the applicable plan and award agreement.

 

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(d)          No Other Benefits. Except as otherwise expressly provided herein,
Executive shall not be entitled to any other salary, bonuses, employee benefits
or compensation from the Company or its Subsidiaries after the termination of
Executive’s employment by the Company for any reason and all of Executive’s
rights to salary, bonuses, employee benefits and other compensation hereunder
which would have accrued or become payable after the termination of the
Employment Period shall cease upon such termination, other than those expressly
required under applicable law (such as COBRA).

 

4.           Confidential Information.

 

(a)          Protection of Confidential Information. Executive acknowledges that
confidential and proprietary information is important to the continued success
of the Company and its Subsidiaries and Affiliates. All confidential and
proprietary information now existing or developed in the future is referred to
in this Agreement as “Confidential Information.” Confidential Information
includes all information (whether remembered or embodied in a tangible or
intangible form) (i) related to the Company’s or its Subsidiaries’ or
Affiliates’ current or potential business, and (ii) not generally or publicly
known. Confidential Information includes, without specific limitation:
information and data obtained by Executive during the course of his performance
under this Agreement concerning the business and affairs of the Company and its
Subsidiaries and Affiliates; information concerning acquisition opportunities in
or reasonably related to the Company’s or its Subsidiaries’ or Affiliates’
business which Executive becomes aware of during his employment; the identity of
current or prospective customers of the Company or its Subsidiaries or
Affiliates; Company and Subsidiary strategic, marketing and expansion plans;
Company and Subsidiary financial and business plans; Company and Subsidiary
employee lists and telephone numbers; new and existing Company and Subsidiary
programs and services; and information concerning Company and Subsidiary prices
and terms. Executive shall not disclose to any unauthorized person or use for
his own account any Confidential Information without the prior written consent
of the Company. Confidential Information shall not include information which
(i) becomes generally known to and available for use by the public other than as
a result of Executive’s acts or omissions to act, (ii) is established by
Executive to have been known by Executive on the date hereof or thereof,
(iii) is disclosed by the Company to a third party with no obligation to keep
the Confidential Information confidential, other than inadvertent disclosures
which the Company takes reasonable steps to remedy, (iv)  is received by
Executive from a third party without restriction and without breach of any
obligations of non-disclosure, or (v) is required to be disclosed pursuant to
any applicable law or court order. Executive agrees to deliver to the Company at
the end of the Employment Period, or at any other time the Company may request
in writing, all memoranda, notes, plans, records, reports, studies and other
documents, whether in paper or electronic form (and copies thereof), relating to
the business of the Company or its Subsidiaries or Affiliates (including,
without limitation, all Confidential Information) that he may then possess or
have under his control.

 

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(b)          Third Party Information. Executive understands that the Company and
its Subsidiaries and Affiliates will receive from third parties confidential or
proprietary information (“Third Party Information”) subject to a duty on the
Company’s and its Subsidiaries’ and Affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During the Employment Period and thereafter, and without in any way
limiting the provision of Section 4(a) above, Executive will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than personnel of the Company or its Subsidiaries and Affiliates who need to
know such information in connection with their work for the Company or such
Subsidiaries and Affiliates) or use, except in connection with his work for the
Company or its Subsidiaries and Affiliates, Third Party Information unless
expressly authorized by the third party or by the Company in writing.

 

5.            Intellectual Property, Inventions and Patents. Executive
acknowledges that all discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports,
patent applications, and copyrightable work (whether or not including any
confidential information) and all registrations or applications related thereto,
all other proprietary information and all similar or related information
(whether or not patentable) which relate to the Company’s actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive (whether alone or
jointly with others) while employed by the Company or any of its Subsidiaries
(“Work Product”), belong to the Company.

 

6.              Executive’s Representations. Executive hereby represents and
warrants to the Company that, except as previously disclosed in writing to the
Company (i) the execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
Executive is a party or by which he is bound, (ii) Executive is not a party to
or bound by any employment agreement, noncompete agreement or confidentiality
agreement with any other person or entity and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and
binding obligation of Executive, enforceable in accordance with its terms.
Executive hereby acknowledges and represents that he has consulted with
independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.

 

7.              Survival. Sections 4 through 15 shall survive and continue in
full force in accordance with their terms notwithstanding the expiration or
termination of the Employment Period. If the Acquisition Agreement is terminated
in accordance with its terms prior to the First Closing, this Agreement shall be
void ab initio.

 

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8.            Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the
recipient at the address below indicated:

 

 

Notices to Executive:

 

At the address on file with the Company.

 

Notices to the Company:

 

Great American Group, Inc.

21860 Burbank Blvd.

Suite 300 South

Woodland Hills, CA 91367

Attention: Chief Executive Officer
Facsimile: (818) 884-2976

Email: agumaer@greatamerican.com

 

With a copy to:

 

Morrison & Foerster LLP

12531 High Bluff Drive, Suite 100

San Diego, CA 92130

Attention: Scott Stanton

Facsimile: (858) 523-5941

Email: sstanton@mofo.com

 

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.

 

9.            Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any action in. any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

 

10.          Complete Agreement. This Agreement embodies the complete agreement
and understanding among the parties with respect to, and supersedes and preempts
any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
Without limiting the foregoing, this Agreement supersedes and replaces the
Original Agreement, which shall be deemed terminated and of no further force or
effect upon the occurrence of the First Closing.

 

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11.          No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.

 

12.          Counterparts. This Agreement may be executed in separate
counterparts (including by means of facsimile or electronic transmission in
portable document format (pdf)), each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.

 

13.         Assignment; Binding Effect. The performance of Executive is personal
hereunder, and Executive agrees that Executive shall have no right to assign and
shall not assign or purport to assign any rights or obligations under this
Agreement. This Agreement may be assigned by the Company, and nothing in this
Agreement shall prevent the consolidation, merger or sale of the Company or a
sale of any or all or substantially all of its assets. Subject to the foregoing
restriction on assignment by Executive, this Agreement shall inure to the
benefit of and be binding upon each of the parties; the affiliates, officers,
directors, agents, successors and assigns of the Company; and the heirs,
devisees, legal representatives, executors and administrators of Executive.

 

14.          Choice of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the laws of the State of
California without giving effect to any choice of law or conflict of law rules
or provisions (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California.

 

15.         Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive. No course of conduct or course of dealing or failure or delay by any
party hereto in enforcing or exercising any of the provisions of this Agreement
shall affect the validity, binding effect or enforceability of this Agreement or
be deemed to be an implied waiver of any provision of this Agreement.

 

*        *        *        *        *

 

[Signature page immediately follows.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Employment Agreement as of the date first written above.

 

 

  Great American Group, Inc.       By: /s/ Phillip J. Ahn   Name: Phillip J. Ahn
  Its: Chief Financial Officer and     Chief Operating Officer       Executive:
      /s/ Andrew Gumaer   Andrew Gumaer

 

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