Exhibit 10.4
Cotelligent Group Inc.
Post Effective Amendment to
Form S-1 on Form S-4
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and among Cotelligent Group,
Inc., a Delaware corporation ("Cotelligent"), BFR Co., Inc. (the "Subsidiary"),
a wholly-owned subsidiary of Cotelligent, and Xxxxxxx X. Xxxxxxxxx ("Employee")
is hereby entered into and effective as of the 20th day of February, 1996, the
date of the consummation of the initial public offering of the common stock of
Cotelligent ("Effective Date"). This Agreement hereby supersedes any other
employment agreements or understandings, written or oral, among the Subsidiary,
Cotelligent and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Subsidiary is engaged primarily in the
business of providing computer consulting and contract programming services.
Employee is employed hereunder by the Subsidiary in a confidential relationship
wherein Employee, in the course of his employment with the Subsidiary, has and
will continue to become familiar with and aware of information as to the
Subsidiary's and Cotelligent's customers, specific manner of doing business,
including the processes, techniques and trade secrets utilized by the Subsidiary
and Cotelligent, and future plans with respect thereto, all of which has been
and will be established and maintained at great expense to the Subsidiary and
Cotelligent; this information is a trade secret and constitutes the valuable
good will of the Subsidiary and 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) The Subsidiary hereby employs Employee as President. As such,
Employee shall have responsibilities, duties and authority reasonably accorded
to and expected of a President and will report directly to the Board of
Directors of the Subsidiary (the "Board"). 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 the Subsidiary.
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(b) Employee shall faithfully adhere to, execute and
fulfill all lawful policies established by the Subsidiary.
(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 or her 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,
the Subsidiary shall compensate Employee as follows:
(a) Base Salary. Effective on the Effective Date, the base salary
payable to Employee shall be $150,000 per year, payable on a regular basis in
accordance with the Subsidiary's standard payroll procedures but not less than
monthly. On at least an annual basis, the Board 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 or a duly constituted committee
thereof.
(b) Incentive Bonus Plan. For fiscal year 1996 and subsequent fiscal
years, Employee shall be eligible to participate in the Cotelligent Compensation
Plan, which sets forth the criteria under which Employee and other officers and
key employees will be eligible to receive bonus awards.
(c) Executive Perquisites, Benefits and Other Compensation.
Employee shall be entitled to receive additional benefits and
compensation from the Subsidiary 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 the Subsidiary or 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
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reasonable detail by Employee upon submission of any
request for reimbursement, and in a format and manner
consistent with the Subsidiary'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 the full year).
(4) The Subsidiary shall reimburse Employee $500 per
month for expenses incurred in connection with the
leasing or acquisition of an automobile.
(5) The Subsidiary 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 Subsidiary-wide or
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
the Subsidiary, 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 the Subsidiary or Cotelligent or any of the
Subsidiaries thereof, within 100 miles of where the Subsidiary or any
of its subsidiaries conducts business (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of the Subsidiary or Cotelligent (including the
respective subsidiaries thereof) 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 the Subsidiary or
Cotelligent (including the respective subsidiaries thereof), provided
that Employee shall be permitted to call upon and hire any member of
his or her immediate family;
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(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 the Subsidiary or Cotelligent (including the respective subsidiaries
thereof) within the Territory for the purpose of soliciting or selling
products or services in direct competition with the Subsidiary or
Cotelligent within the Territory;
(iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor in the computer
consulting and contract computer programming business, which candidate
was either called upon by the Subsidiary or Cotelligent (including the
respective subsidiaries thereof) or for which the Subsidiary or
Cotelligent made an acquisition analysis, for the purpose of acquiring
such entity;
(v) disclose customers, whether in existence or proposed, of
the Subsidiary or Cotelligent (including the respective subsidiaries
thereof) or any subsidiary thereof to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever except to
the extent that the Subsidiary or Cotelligent (including the respective
subsidiaries thereof) 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 the
Subsidiary and Cotelligent as a result of a breach of the foregoing covenant,
and because of the immediate and irreparable damage that could be caused to the
Subsidiary and Cotelligent for which they would have no other adequate remedy,
Employee agrees that the foregoing covenant may be enforced by Cotelligent or
the Subsidiary 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 the Subsidiary or Cotelligent (including Cotelligent's other
subsidiaries) on the date of the execution of this Agreement and the current
plans of Cotelligent (including Cotelligent's other subsidiaries); but it is
also the intent of the Subsidiary and Employee that such covenants be construed
and enforced in accordance with the changing activities, business and locations
of the Subsidiary and Cotelligent (including Cotelligent's other subsidiaries)
throughout the term of this covenant. For example,
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if, during the term of this Agreement, the Subsidiary or Cotelligent (including
Cotelligent's other 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 then-established 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 the Subsidiary or
Cotelligent (including Cotelligent's other 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 the Subsidiary or Cotelligent (including
Cotelligent's other 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 the Subsidiary or
Cotelligent, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Cotelligent or the Subsidiary 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.
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(a) Employee understands that he may be requested by the Board or
Cotelligent to relocate from his present residence to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement or as part of a promotion or other increase in duties and
responsibilities. In such event, if Employee agrees to relocate, the Subsidiary
will pay all reasonable 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 present residence 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 the 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 the Subsidiary and
the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the Board 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), the Subsidiary may terminate Employee's employment
hereunder provided Employee is unable to resume his full-time duties at the
conclusion of
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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 the Subsidiary with a written
statement from a qualified doctor to such effect and provided, further, that, at
the Subsidiary'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 the Subsidiary 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 the Subsidiary, 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. The Subsidiary 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 the Subsidiary or Cotelligent which materially and adversely
affects the operations or reputation of the Subsidiary or Cotelligent; (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 the
Subsidiary during the Initial Term hereof if such termination is approved by at
least sixty-six percent (66%) of the members of the Board of Directors of
Cotelligent. Should Employee be terminated by the Subsidiary without cause,
Employee shall continue to receive from the Subsidiary or 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 by the Subsidiary without cause,
the Subsidiary 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 the Subsidiary's liability for such payment,
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which is intended to be absolute. Further, any termination without cause by the
Subsidiary 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.
At any time after the commencement of employment, Employee may, without cause,
terminate this Agreement and Employee's employment, effective thirty (30) days
after written notice is provided to the Subsidiary. If Employee resigns or
otherwise terminates his employment without cause pursuant to this paragraph
5(d), Employee shall receive no severance compensation.
(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, the Subsidiary
and Employee under this Agreement shall cease as of the effective date of
termination, except that the Subsidiary'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 the Subsidiary'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 the
Subsidiary, as determined by a court of competent jurisdiction or pursuant to
the provisions of paragraph 16 below, the Subsidiary 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 the
Subsidiary.
6. Return of Subsidiary 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
the Subsidiary, Cotelligent or their representatives, vendors or customers which
pertain to the business of the Subsidiary or Cotelligent shall be and remain the
property of the Subsidiary or Cotelligent, as the case may be, and be subject at
all times to their discretion and
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control. Likewise, all correspondence, reports, records, charts, advertising
materials and other similar data pertaining to the business, activities or
future plans of the Subsidiary or Cotelligent which is collected by Employee
shall be delivered promptly to the Subsidiary without request by it upon
termination of Employee's employment.
7. Inventions. Employee shall disclose promptly to Cotelligent and the
Subsidiary 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 the Subsidiary or Cotelligent and which
Employee conceives as a result of his employment by the Subsidiary. Employee
hereby assigns and agrees to assign all his interests therein to the Subsidiary
or its nominee. Whenever requested to do so by the Subsidiary, Employee shall
execute any and all applications, assignments or other instruments that the
Subsidiary shall deem necessary to apply for and obtain Letters Patent of the
United States or any foreign country or to otherwise protect the Subsidiary's
interest therein.
8. Trade Secrets. Employee agrees that he will not, during or after the
term of this Agreement with the Subsidiary, disclose the specific terms of the
Subsidiary's or Cotelligent's relationships or agreements with their respective
significant vendors or customers or any other significant and material trade
secret of the Subsidiary or 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 Subsidiary.
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 the
Subsidiary or Cotelligent against Employee), by reason of the fact that he is or
was performing services under this Agreement, then the Subsidiary 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 the Subsidiary are made a party to the same third-party
action, complaint, suit or proceeding, the Subsidiary or 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 the Subsidiary or Cotelligent
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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 the
Subsidiary or 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 the Subsidiary.
10. No Prior Agreements. Employee hereby represents and warrants to the
Subsidiary that the execution of this Agreement by Employee and his employment
by the Subsidiary 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 the Subsidiary 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 the Subsidiary 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 the Subsidiary 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) Unless he elects to terminate this Agreement pursuant to (c) below,
Employee understands and acknowledges that the Subsidiary may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Subsidiary hereunder.
(b) In the event of a pending Change in Control (as defined below)
wherein the Subsidiary 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 the Subsidiary's business and/or assets that such successor is
willing and able as of the closing to assume and agree to perform the
Subsidiary's obligations under this Agreement in the same manner and to the same
extent that the Subsidiary is hereby required to perform, then such Change in
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Control shall be deemed to be a termination of this Agreement by the Subsidiary
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 any Change in Control situation, Employee may, at his sole
discretion, elect to terminate this Agreement by providing written notice to the
Subsidiary at least five (5) 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 the Subsidiary 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 the Subsidiary 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 Stock Option
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
Subsidiary 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 the Subsidiary;
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(ii) the individuals (A) who, as of the effective date of
Cotelligent's registration statement with respect to its initial public
offering, constitute the Board of Directors of Cotelligent (the
"Original Directors") or (B) who thereafter are elected to the Board of
Directors of Cotelligent and whose election, or nomination for
election, to the Board of Directors of Cotelligent 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 of Directors of Cotelligent and whose election, or nomination for
election, to the Board of Directors of Cotelligent 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 of
Directors of Cotelligent;
(iii) the stockholders of Cotelligent shall approve a merger,
consolidation, recapitalization, or reorganization of Cotelligent, a
reverse stock split of outstanding voting securities, or consummation
of any such transaction if 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 the Subsidiary or
Cotelligent at any time that the Subsidiary or Cotelligent or any member of the
Board of Directors of Cotelligent anticipates that a Change in Control may take
place.
(g) Employee shall be reimbursed by the Subsidiary 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 the Subsidiary or its successor within ten (10) days after Employee
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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 the Subsidiary 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 the Subsidiary 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 the Subsidiary 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 the Subsidiary: BFR Co., Inc.
00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxxxxx
with a copy to: Cotelligent Group, Inc.
000 Xxxxxxxxxx Xxxxxx-Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxx
To Employee: Xx. Xxxxxxx X. Xxxxxxxxx
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
with a copy to: Xxxxxx and Xxxxxx
00 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxx XxXxxxx, Esq.
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
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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.
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 the Subsidiary 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 the Subsidiary.
17. Governing Law. This Agreement shall in all respects be
construed according to the laws of the State of Delaware.
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.
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NY02/231539.4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BFR CO., INC.
By:____________________________
Name:
Title:
EMPLOYEE:
----------------------------
Xxxxxxx X. Xxxxxxxxx
COTELLIGENT GROUP, INC.
By:____________________________
Name:
Title:
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NY02/231539.4
