EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") between Cotelligent Group,
Inc. ("Cotelligent"), a Delaware corporation, and Xxxxxxx X. Xxxxxxxxxx
('Employee") is hereby entered into and effective as of the _26_ day of January,
1998, (the "Effective Date"). This Agreement hereby supersedes any other
employment agreements or understandings, written or oral, between Cotelligent
and Employee.
R E C I T A L S
The following statements are true and correct:
Cotelligent and its operating subsidiaries are engaged primarily in
the business of providing information technology consulting services.
References herein to "Cotelligent" are intended to include Cotelligent and its
operating subsidiaries, as may be applicable in the circumstances.
Employee will be employed hereunder by Cotelligent in a confidential
relationship wherein Employee, in the course of his employment with Cotelligent,
will become familiar with and aware of information as to Cotelligent's
customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by Cotelligent, and future plans with
respect thereto, all of which will be established and maintained at great
expense to Cotelligent; this information is a trade secret and constitutes the
valuable good will of Cotelligent.
Therefore, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:
A G R E E M E N T S
1. Employment and Duties.
(a) Cotelligent hereby employs Employee as Senior Vice President, Chief
Financial Officer and Treasurer. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of a Senior Vice
President, Chief Financial Officer and Treasurer and will report directly to the
Chief Executive Officer. Additional or different duties, titles or positions,
however, may be assigned to Employee or may be taken from Employee from time to
time by the Chief Executive Officer, provided that any such changes are
consistent and compatible with Employee's experience, background and managerial
skills. Employee hereby accepts this employment upon the terms and conditions
herein contained and, subject to paragraph 1(c) agrees to devote his time,
attention and efforts to promote and further the business of Cotelligent.
(b) Employee shall faithfully adhere to, execute and fulfill all lawful
policies established by Cotelligent.
(c) Employee shall not, during the term of his employment
hereunder, be engaged in any other business activity pursued for gain, profit
or other pecuniary advantage if such activity interferes with Employee's duties
and responsibilities hereunder. The foregoing limitations shall not be
construed as prohibiting Employee from making personal investments in such form
or manner as will neither require his services in the operation or affairs of
the companies or enterprises in which such investments are made nor violate the
terms of paragraph 3 hereof.
2. Compensation. For all services rendered by Employee, Cotelligent
shall compensate Employee as follows:
(a) Base Salary. Beginning on such date, the base salary payable to
Employee shall be $200,000 (two hundred thousand dollars) per year, payable on a
regular basis in accordance with Cotelligent's standard payroll procedures but
not less than monthly. On at least an annual basis, the Chief Executive Officer
will review Employee's performance and may make increases to such base salary
if, in its reasonable discretion, any such increase is warranted. Such
recommended increase would, in all likelihood, require approval by the Board of
Directors or a duly constituted committee thereof.
(b) Incentive Bonus Plan. For each fiscal year during the term of
this Agreement, Employee will be eligible to receive a bonus of up to fifty
percent (50%) of his base salary based upon achievement of agreed upon yearly
goals and other criteria.
(c) Stock Options. Cotelligent hereby confirms that the Board has
granted to Employee an option to purchase 100,000 (one hundred thousand) shares
of Cotelligent's common stock ("Cotelligent Common Stock"), at a price per share
equal to $20.00 (twenty dollars) per share, the value of Cotelligent Common
Stock on January 26, 1997. Subject to the last sentence of subsection 5(d)
hereof, Employee's stock options shall vest and become exercisable as follows:
33,333 (thirty-three thousand three hundred thirty-three) shares on the
Effective date of this Agreement; 33,333 (thirty-three thousand three hundred
thirty-three) shares on the first anniversary of the Effective Date; and, 33,334
(thirty-three thousand three hundred thirty-four) shares on the second
anniversary of the Effective Date. Any vested options shall be exercisable in
whole or in part at any time for a period ending seven (7) years after the date
hereof. If, while these options are outstanding, Cotelligent shall effect a
subdivision, consolidation or other increase or reduction of the number of
shares of Cotelligent Common Stock outstanding, without receiving compensation
therefore at fair value in money, services or property, then the number of
shares of Cotelligent Common Stock held under option and the option exercise
price shall be proportionately adjusted.
(d) Executive Perquisites, Benefits and Other Compensation. Employee shall
be entitled to receive additional benefits and compensation from Cotelligent in
such form and to such extent as specified below:
(1) Participation for Employee in coverage for Employee and his dependent
family members under health, hospitalization, disability, dental, life and other
insurance plans that Cotelligent may have in effect from time to time, benefits
provided to Employee under this clause (1) to be at least equal to such benefits
provided to Cotelligent executives.
(2) Reimbursement for all business travel and other out-of-pocket expenses
reasonably incurred by Employee in the performance of his services pursuant to
this Agreement. All reimbursable expenses shall be appropriately documented in
reasonable detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with Cotelligent's expense reporting
policy.
(3) Four (4) weeks paid vacation for each year during the period of
employment ending on the anniversary of the date on which the period of
employment commenced (pro-rated for any year in which Employee is employed for
less than a full year).
(4) Cotelligent shall provide an automobile allowance of $500 per month.
(5) Cotelligent shall provide Employee with other executive perquisites as
may be available to or deemed appropriate for Employee by the Board and
participation in all other Cotelligent-wide employee benefits as available from
time to time.
3. Non-Competition Agreement.
(a) Employee will not, during the period of his employment by or with
Cotelligent, and for a period of two (2) years immediately following the
termination of his employment under this Agreement, for any reason whatsoever,
directly or indirectly, for himself or on behalf of or in conjunction with any
other person, persons, company, partnership, corporation or business of whatever
nature:
(i) engage, as an officer, director, shareholder, owner, partner, joint
venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, in any business
selling any products or services in direct competition with Cotelligent
(including its subsidiaries), within 100 miles of where Cotelligent or where any
of its subsidiaries conducts business (the "Territory");
(ii) call upon any person who is, at that time, within the Territory, an
employee of Cotelligent (including its subsidiaries) in a sales representative
or managerial capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of Cotelligent (including its
subsidiaries), provided that Employee shall be permitted to call upon and hire
any member of his or her immediate family;
iii) call upon any person or entity which is, at that time,
or which has been, within one (1) year prior to that time, a customer of
Cotelligent (including its subsidiaries) within the Territory for the purpose of
soliciting or selling products or services in direct competition with
Cotelligent (including its subsidiaries) within the Territory; or
(iv) call upon any prospective acquisition candidate, on Employee's own
behalf or on behalf of any competitor in the computer consulting and contract
programming business, which candidate was either called upon by Cotelligent
(includes its subsidiaries) or for which Cotelligent (including its
subsidiaries) made an acquisition analysis, for the purpose of acquiring such
entity.
(v) disclose customers, whether in existence or proposed, of
Cotelligent (including its subsidiaries) to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever except to the
extent that Cotelligent (including its subsidiaries) has in the past disclosed
such information to the public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Employee from acquiring as an investment not more than one percent
(1%) of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to Cotelligent
(including its subsidiaries) as a result of a breach of the foregoing covenant,
and because of the immediate and irreparable damage that could be caused to
Cotelligent (including its subsidiaries) for which it would have no other
adequate remedy, Employee agrees that the foregoing covenant may be enforced by
Cotelligent (including its subsidiaries) in the event of breach by him, by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
paragraph 3 impose a reasonable restraint on Employee in light of the activities
and business of Cotelligent (including its subsidiaries) on the date of the
execution of this Agreement and the current plans of Cotelligent; but it is also
the intent of Cotelligent and Employee that such covenants be construed and
enforced in accordance with the changing activities and business of Cotelligent
throughout the term of this covenant. For example, if, during the term of this
Agreement, Cotelligent (including its subsidiaries) engages in new and different
activities, enters a new business or establishes new locations for its current
activities or business in addition to or other than the activities or business
enumerated under the Recitals above or the locations currently established
therefore, then Employee will be precluded from soliciting the customers or
employees of such new activities or business or from such new location and from
directly competing with such new business within 100 miles of its operating
location(s) through the term of this covenant.
It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with Cotelligent (including its
subsidiaries), or similar activities or business in locations the operation of
which, under such circumstances, does not violate clause (i) of this paragraph
3, and in any event such new business, activities or location are not in
violation of this paragraph 3 or of Employee's obligations under this paragraph
3, if any, Employee shall not be chargeable with a violation of this paragraph 3
if Cotelligent (including its subsidiaries) shall thereafter enter the same,
similar or a competitive (i) business, (ii) course of activities or (iii)
location, as applicable.
(d) The covenants in this paragraph 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
(e) All of the covenants in this paragraph 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against Cotelligent
(including its subsidiaries), whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Cotelligent (including its
subsidiaries) of such covenants. It is specifically agreed that the period of
two (2) years stated at the beginning of this paragraph 3, during which the
agreements and covenants of Employee made in this paragraph 3 shall be
effective, shall be computed by excluding from such computation any time during
which Employee is in violation of any provision of this paragraph 3.
4. Place of Performance.
(a) Employee understands that he may be required by the Board to
relocate from his residence in the San Francisco Bay Area to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement. In such event, Cotelligent will pay all relocation costs
to move Employee, his immediate family and their personal property and effects.
Such costs may include, by way of example, but are not limited to, pre-move
visits to search for a new residence, investigate schools or for other purposes;
temporary lodging and living costs prior to moving into a new permanent
residence; duplicate home carrying costs; all closing costs on the sale of
Employee's residence in the San Francisco Bay Area and on the purchase of a
comparable residence in the new location; and added income taxes that Employee
may incur if any relocation costs are not deductible for tax purposes.
The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of any relocation, with an
understanding that Employee will use his best efforts to incur only those costs
which are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of Cotelligent and
the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the Board of
Cotelligent to relocate and Employee refuses, such refusal shall not constitute
"cause" for termination of this Agreement under the terms of paragraph 5(c).
5. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue for three (3) years (the "Initial
Term"), and, unless terminated sooner as herein provided, shall continue
automatically thereafter on a year-to-year basis on the same terms and
conditions contained herein. This Agreement and Employee's employment may be
terminated in any one of the followings ways:
(a) Death. The death of Employee shall immediately terminate this
Agreement with no severance compensation due to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been absent from his full-time duties
hereunder for four (4) consecutive months, then thirty (30) days after receiving
written notice (which notice may occur before or after the end of such four (4)
month period, but which shall not be effective earlier than the last day of such
four (4) month period), Cotelligent may terminate Employee's employment
hereunder provided Employee is unable to resume his full-time duties at the
conclusion of such notice period. Also, Employee may terminate his employment
hereunder if his health should become impaired to an extent that makes the
continued performance of his duties hereunder hazardous to his physical or
mental health or his life, provided that Employee shall have furnished
Cotelligent with a written statement from a qualified doctor to such effect and
provided, further, that, at Cotelligent's request made within thirty (30) days
of the date of such written statement, Employee shall submit to an examination
by a doctor selected by Cotelligent who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the conclusion of
Employee's doctor. In the event this Agreement is terminated pursuant to this
paragraph 5(b) Employee shall receive from Cotelligent, in a lump-sum payment
within ten (10) days of the effective date of termination, the base salary at
the rate then in effect for whatever time period is remaining under the Initial
Term of this Agreement or for one (1) year, whichever amount is greater.
(c) Good Cause. Cotelligent may terminate the Agreement ten (10) days
after written notice to Employee for good cause, which shall be: (1) Employee's
willful, material and irreparable breach of this Agreement; (2) Employee's gross
negligence in the performance or intentional nonperformance (continuing for ten
(10) days after receipt of written notice of need to cure) of any of Employee's
material duties and responsibilities hereunder; (3) Employee's willful
dishonesty, fraud or misconduct with respect to the business or affairs of
Cotelligent (including its subsidiaries) which materially and adversely affects
the operations or reputation of Cotelligent (including its subsidiaries); (4)
Employee's conviction of a felony crime; or (5) chronic alcohol abuse or illegal
drug abuse by Employee. In the event of a termination for good cause, as
enumerated above, Employee shall have no right to any severance compensation.
(d) Without Cause. Employee may only be terminated without cause by
Cotelligent during the Initial Term hereof if such termination is approved by at
least sixty-six percent (66%) of the members of the Board. Should Employee be
terminated by Cotelligent without cause, Employee shall receive from
Cotelligent, the base salary at the rate then in effect for whatever time period
is remaining under the Initial Term of this Agreement or for one (1) year,
whichever amount is greater (the "Payment Term"); it is specifically understood
and agreed that, in the event Employee's employment is terminated without cause,
Cotelligent shall in all circumstances, during the Payment Term, be required to
pay Employee at an annual rate equal to Employee's most recent annual base
salary, regardless of whether Employee has obtained other employment following
such termination and Employee shall be under no duty to mitigate such amount or
take any action to lessen Cotelligent's liability for such payment, which is
intended to be absolute. Further, any termination without cause by Cotelligent
shall operate to shorten the period set forth in paragraph 3(a) and during which
the terms of paragraph 3 apply to one (1) year from the date of termination of
employment.
Employee shall be deemed to have been terminated without cause by Cotelligent if
Employee shall be assigned any duties materially inconsistent with, or
Employee's responsibilities shall be significantly limited, or Employee shall be
significantly demoted, in any case so as not to be serving in a Senior Vice
President, Chief Financial Officer and Treasurer capacity to Cotelligent (and
its subsidiaries and affiliates), and the continuance thereof for a period of 5
business days after written notice from Employee that he is unwilling to accept
such changes in duties or responsibilities. In the event Employee is terminated
without cause, any and all options which shall have been granted to Employee by
Cotelligent shall immediately vest without further action by Employee and
notwithstanding the terms of any such option grant.
At any time after the commencement of employment, Cotelligent or Employee may,
without cause, terminate this Agreement and Employee's employment, effective
thirty (30) days after written notice is provided to the other party. If
Employee resigns or otherwise terminates his employment without cause pursuant
to this paragraph 5(d), Employee shall receive no severance compensation.
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(e) Change in Control of Cotelligent. Refer to paragraph 12 below.
Upon termination of this Agreement for any reason provided above, Employee shall
be entitled to receive all compensation earned and all benefits and
reimbursements due through the effective date of termination. Additional
compensation subsequent to termination, if any, will be due and payable to
Employee only to the extent and in the manner expressly provided above or in
paragraph 12. All other rights and obligations of Cotelligent and Employee under
this Agreement shall cease as of the effective date of termination, except that
Cotelligent's obligations under paragraph 9 herein and Employee's obligations
under paragraphs 3, 6, 7, 8 and 10 herein shall survive such termination in
accordance with their terms.
If termination of Employee's employment arises out of Cotelligent's failure to
pay Employee on a timely basis the amounts to which he is entitled under this
Agreement or as a result of any other breach of this Agreement by Cotelligent,
as determined by a court of competent jurisdiction or pursuant to the provisions
of paragraph 16 below, Cotelligent shall pay all amounts and damages to which
Employee may be entitled as a result of such breach, including interest thereon
and all reasonable legal fees and expenses and other costs incurred by Employee
to enforce his rights hereunder. Further, none of the provisions of paragraph 3
shall apply in the event this Agreement or the Employee's employment hereunder
is terminated as a result of a breach by Cotelligent.
6. Return of Company Property. All records, designs, patents, business
plans, financial statements, financial records, manuals, memoranda, lists and
other property delivered to or compiled by Employee by or on behalf of
Cotelligent (including its subsidiaries) or their representatives, vendors or
customers which pertain to the business of Cotelligent (including its
subsidiaries) shall be and remain the property of Cotelligent (including its
subsidiaries) and be subject at all times to their discretion and control.
Likewise, all correspondence, reports, records, charts, advertising materials
and other similar data pertaining to the business, activities or future plans of
Cotelligent (including its subsidiaries) which is collected by Employee shall be
delivered promptly to Cotelligent without request by it upon termination of
Employee's employment.
7. Inventions. Employee shall disclose promptly to Cotelligent any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
activities of Cotelligent and which Employee conceives as a result of his
employment by Cotelligent. Employee hereby assigns and agrees to assign all his
interests therein to Cotelligent or its nominee. Whenever requested to do so by
Cotelligent, Employee shall execute any and all applications, assignments or
other instruments that Cotelligent shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect Cotelligent's interest therein.
8. Trade Secrets. Employee agrees that he will not, during or after the
term of this Agreement with Cotelligent, disclose the specific terms of
Cotelligent's relationships or agreements with its significant vendors or
customers or any other significant and material trade secret of Cotelligent,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever other than as required by law
or to attorneys or accountants or other agents of the Company.
9. Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by Cotelligent
against Employee), by reason of the fact that he is or was performing services
under this Agreement, then Cotelligent shall indemnify and hold harmless the
Employee against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Employee in
connection therewith. In the event that both Employee and Cotelligent are made a
party to the same third-party action, complaint, suit or proceeding, Cotelligent
agrees to engage competent legal representation, and Employee agrees to use the
same representation, provided that if counsel selected by Cotelligent shall have
a conflict of interest that prevents such counsel from representing Employee,
Employee may engage separate counsel and Cotelligent shall pay all attorneys'
fees and costs of such separate counsel. Further, while Employee is expected at
all times to use his best efforts to faithfully discharge his duties under this
Agreement, Employee cannot be held liable to Cotelligent for errors or omissions
made in good faith where Employee has not exhibited gross, willful and wanton
negligence and misconduct or performed criminal and fraudulent acts which
materially damage the business of Cotelligent.
10. No Prior Agreements. Employee hereby represents and warrants to
Cotelligent that the execution of this Agreement by Employee and his employment
by Cotelligent and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity. Further, Employee agrees to indemnify Cotelligent for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against Cotelligent based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.
11. Assignment; Binding Effect. Employee understands that he has been
selected for employment by Cotelligent on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
12. Change in Control.
(a) Employee understands and acknowledges that Cotelligent may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of Cotelligent hereunder.
(b) In the event of a pending Change in Control (as defined below)
wherein Cotelligent and Employee have not received written notice at least five
(5) business days prior to the anticipated closing date of the transaction
giving rise to the Change in Control from the successor to all or a substantial
portion of Cotelligent's business and/or assets that such successor is willing
and able as of the closing to assume and agree to perform Cotelligent's
obligations under this Agreement in the same manner and to the same extent that
Cotelligent is hereby required to perform, then such Change in Control shall be
deemed to be a termination of this Agreement by Cotelligent without cause and
the applicable portions of paragraph 5(d) will apply; however, under such
circumstances, the amount of the severance payment due to Employee (a) shall be
payable in a lump-sum payment on the effective date of the termination and (b)
shall be triple the amount calculated under the terms of paragraph 5(d) and the
non-competition provisions of paragraph 3 shall not apply whatsoever.
(c) In the case of any Change in Control, Employee may, at his sole
discretion, elect to terminate this Agreement by providing written notice to
Cotelligent at least two (2) business days prior to the anticipated closing of
the transaction giving rise to the Change in Control. In such case, the
applicable provisions of paragraph 5(d) will apply as though Cotelligent had
terminated the Agreement without cause; however, under such circumstances, the
amount of the severance payment due to Employee (a) shall be payable in a
lump-sum payment on the effective date of the termination and (b) shall be two
times the amount calculated under the terms of paragraph 5(d) and the
non-competition provisions of paragraph 3 shall all apply for a period of two
(2) years from the effective date of termination.
(d) For purposes of applying paragraph 5 under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due Employee must be paid in
full by Cotelligent at or prior to such closing. Further, Employee will be
given sufficient time and opportunity to elect whether to exercise all or any
of his vested options to purchase Cotelligent Common Stock, including any
options with accelerated vesting under the provisions of Cotelligent's 1995
Long-Term Incentive Compensation Plan, such that he may convert the options to
shares of Cotelligent Common Stock at or prior to the closing of the transaction
giving rise to the Change in Control, if he so desires.
(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person or entity, other than Cotelligent or an
employee benefit plan of Cotelligent, acquires directly or indirectly
the Beneficial Ownership (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended) of any voting security of the
Cotelligent and immediately after such acquisition such person or
entity is, directly or indirectly, the Beneficial Owner of voting
securities representing 50% or more of the total voting power of all of
the then-outstanding voting securities of Cotelligent;
(ii) the individuals (A) who, as of the effective date of the
Company's registration statement with respect to its initial public
offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination
for election, to the Board was approved by a vote of at least
two-thirds (2/3) of the Original Directors then still in office (such
directors becoming "Additional Original Directors" immediately
following their election) or (C) who are elected to the Board and whose
election, or nomination for election, to the Board was approved by a
vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors also
becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of Cotelligent shall approve a merger,
consolidation, recapitalization, or reorganization of Cotelligent, a
reverse stock split of outstanding voting securities, or if any such
transaction is consummated and stockholder approval is not sought or
obtained, other than any such transaction which would result in at
least 75% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being Beneficially Owned by at least 75% of the holders of
outstanding voting securities of Cotelligent immediately prior to the
transaction, with the voting power of each such continuing holder
relative to other such continuing holders not substantially altered in
the transaction; or
(iv) the stockholders of Cotelligent shall approve a plan of
complete liquidation of Cotelligent or an agreement for the sale or disposition
by Cotelligent of all or a substantial portion of Cotelligent's assets (i.e.,
50% or more of the total assets of Cotelligent).
(f) Employee must be notified in writing by Cotelligent at any time if
a Change in Control becomes likely or probable.
(g) Employee shall be reimbursed by Cotelligent or its successor
for any excise taxes that Employee incurs under Section 4999 of the Internal
Revenue Code of 1986, as a result of any Change in Control. Such amount will
be due and payable by Cotelligent or its successor within ten (10) days after
Employee delivers a written request for reimbursement accompanied by a copy of
his tax return(s) showing the excise tax actually incurred by Employee.
13. Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with Cotelligent or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between
Cotelligent and Employee and of all the terms of this Agreement, and it cannot
be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of Cotelligent and Employee, and no term of this Agreement may be waived except
by writing signed by the party waiving the benefit of such term.
14. Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To Cotelligent: Cotelligent Group, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
To Employee: Xx. Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000-0000
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change
in accordance with this paragraph 14.
15. Severability; Headings. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
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16. Arbitration. Any unresolved dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in San Francisco, California,
in accordance with the rules of the American Arbitration Association then in
effect. The arbitrators shall not have the authority to add to, detract from, or
modify any provision hereof nor to award punitive damages to any injured party.
The arbitrators shall have the authority to order back-pay, severance
compensation, vesting of options (or cash compensation in lieu of vesting of
options), reimbursement of costs, including those incurred to enforce this
Agreement, and interest thereon in the event the arbitrators determine that
Employee was terminated without disability or good cause, as defined in
paragraphs 5(b) and 5(c), respectively, or that Cotelligent has otherwise
materially breached this Agreement. A decision by a majority of the arbitration
panel shall be final and binding. Judgment may be entered on the arbitrators'
award in any court having jurisdiction. The direct expense of any arbitration
proceeding shall be borne by Cotelligent.
17. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of California.
18. Counterparts. This Agreement may be executed simultaneously
in two (2) or more counterparts each of which shall be deemed an original and
all of which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
COTELLIGENT GROUP, INC.
By:/s/Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman & Chief
Executive Officer
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxxxx
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