Exhibit 10.1

 

July 18, 2016

 

 

Mr. Richard S. Chernicoff

4309 Forest Avenue SE

Mercer Island, WA  98040

 

Dear Rich:

 

This offer letter (this “Offer Letter”) confirms the terms of your service, on an interim basis, as Chief Executive Officer of Great Elm Capital Group, Inc. (the “Company”)

 

	
1.
    	
 
    	
Title. You   will serve as the Company’s President and Chief Executive Officer on an   interim basis reporting directly to the board of directors of the Company   (the “Board”).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You will continue to serve on the   Board, but, while you serve as interim CEO, the Company will regard you as an   employee director.
    
	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Employment Location. You   are expected to relocate the Company’s headquarters to Boston by the end of   September 2016. Significant travel is expected in the performance of   your duties. Subject to applicable IRS guidelines, the Company will reimburse   your reasonable out-of-pocket costs in connection with commuting with the   goal of your relocating to Boston within the year.
    
	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Employment Start Date. Subject   to completion of immigration formalities, your employment with the Company   will begin on the date hereof.
    
	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Base Salary. Your   annual base salary will be $200,000, less applicable withholdings and   deductions, commencing upon your start date and paid in accordance with   standard U.S. payroll practices.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For so long as you serve as Chief   Executive Officer of the Company and the Company does not have an in-house   General Counsel, your annual base pay will be increased by $100,000.
    
	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Bonus.
    
	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
The compensation committee of the   Board (the “Compensation Committee”) will consider on an annual basis whether   to award you a bonus. The Company has not set any bonus target and you   acknowledge that this bonus is completely discretionary and may therefore be   zero. For the period from your start date to December 31, 2016, you will   be entitled to a guaranteed bonus of $60,000.
    
	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
The Company will pay you as soon   as practicable after the date hereof, $100,000 in consideration of your work   on the PanOptis transaction.
    
	
 
    	
 
    	
 
    
	
(c)
    	
 
    	
If, as and when the merger of   Full Circle with and into Great Elm Capital Corp. occurs, the Company will   pay you a $150,000 transaction bonus.
    
	
 
    	
 
    	
 
    
	
(d)
    	
 
    	
You and the Compensation   Committee may negotiate additional transaction related bonuses in the future,   but the Company has no commitment to do so.
    
	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Equity Incentives.   The Compensation Committee has awarded you options to purchase 1.4% of the   Company’s fully diluted capitalization at a price equal to 110% of the   closing price of the Company’s common stock on the date of this Agreement.   The terms of such option are set forth in the award agreement (the “Option   Agreement”), including, but not limited to, vesting monthly over two years.
    
	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Employee Health and Welfare   Benefits. You will be offered benefits on a most   favored nation’s basis with those offered to other employees of the Company   and its subsidiaries.
    


 











 

	
8.
    	
 
    	
Business Expenses. The   Company will reimburse your out of pocket expenses incurred in connection   with your service, subject to the Company’s policies as in effect from time   to time, and applicable IRS guidelines.
    
	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Termination. Your   employment with the Company is “at will” and may be terminated at any time by   the Company or by you. Inasmuch as your appointment is on an interim basis,   you will not be entitled to any severance.
    
	
 
    	
 
    	
 
    
	
10.
    	
 
    	
General Provisions.
    
	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
You will enter into the Company’s   standard employee confidentiality and invention assignment before beginning   employment.
    
	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
You are required to certify that   you are a citizen of the U.S., a noncitizen national of the U.S., a lawful   permanent resident, or an alien authorized to work in the U.S before   beginning employment.
    
	
 
    	
 
    	
 
    
	
(c)
    	
 
    	
You are expected to devote a   substantial majority of your business hours to service of the Company under   this Agreement. Subject to the Company’s code of ethics as in effect from   time to time, you may continue your outside board service and consulting   arrangements. You agree that your outside consulting arrangements will not   materially interfere with your devotion to the Company’s business.
    
	
 
    	
 
    	
 
    
	
(d)
    	
 
    	
This Offer Letter and the matters   covered hereby will be governed by and construed under the laws of the State   of Delaware applicable to contracts made in and wholly to be performed in the   State of Delaware.
    
	
 
    	
 
    	
 
    
	
(e)
    	
 
    	
Any dispute under this Offer   Letter will be exclusively arbitrated before a single JAMS arbitrator in New   York modifying JAMS rules to reduce cost and increase speed of   resolution to the maximum extent permitted under JAMS rules and   applicable law. The arbitrator shall determine which party was the prevailing   party in the dispute taken as a whole and costs as well as reasonable   attorneys’ fees shall be assessed against the losing party.
    
	
 
    	
 
    	
 
    
	
(f)
    	
 
    	
This Offer Letter and the Award   Agreement constitute our entire agreement with respect to your employment as   interim CEO of the Company and no prior negotiations, drafts, arrangements or   understandings with respect thereto shall be of any effect.
    
	
 
    	
 
    	
 
    
	
(g)
    	
 
    	
If any provision of this   Agreement is held by a court of competent authority to be unenforceable, the   parties intend that (i) the remaining provisions of this Agreement shall   be enforced in accordance with their terms and (ii) the court shall   substitute a replacement provision that is enforceable that, as closely as   possible, accomplishes the purposes intended by such original provision.
    


 

If this Offer Letter correctly sets forth the terms of our agreement, please sign and return this Offer Letter whereupon it shall become our binding agreement.

 

	
Very truly   yours,
    	
 
    
	
 
    	
 
    
	
/s/ Peter A.   Reed
    	
 
    
	
Peter A.   Reed
    	
 
    
	
Chairman,   Compensation Committee of the Board of Directors of
    	
 
    
	
Great Elm   Capital Group, Inc.
    	
 
    
	
 
    	
 
    
	
ACCEPTED AND   AGREED TO AS OF THE DATE FIRST WRITTEN ABOVE:
    	
 
    
	
 
    	
 
    
	
/s/ Richard   S. Chernicoff
    	
 
    
	
Richard S.   Chernicoff