EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of July 22, 1996, among Xxxxxxx Xxxxxxxx
(the "Executive") and INTERTECH/PENTA GROUP, INC. (formerly known as PIC
Acquisition Corp.), a New York corporation (the "Company") and Complete
Management,Inc.("Complete").
WHEREAS, the Executive is presently the Co-President of the business
acquired by the Company in connection with a merger all pursuant to an agreement
dated even date herewith, (the "Acquisition Agreement"); and
WHEREAS, the Company is a wholly-owned subsidiary of COMPLETE MANAGEMENT,
INC., a New York corporation ("Complete"), and
WHEREAS, the Company desires to assure itself of the benefit of the
Executive's services and experience for a period of time; and
WHEREAS, the Executive is willing to enter into an agreement to that end
with the Company upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term
of employment of the Executive under this Employment Agreement shall be for the
period commencing on the date hereof and terminating on December 31, 2000. (Such
term of employment is herein sometimes called the "Employment Term").
2. Services to be Rendered. The Company hereby agrees to employ the
Executive as Chief Executive Officer of the Company, subject to the terms,
conditions and provisions of this Employment Agreement and consistent with the
terms of the Acquisition
Agreement. The Executive hereby accepts such employment and agrees to devote his
full time and attention to rendering services to the Company under this
Employment Agreement and consistent with the terms of the Acquisition Agreement.
The Company acknowledges that the Executive has entered into this Employment
Agreement in reliance on the Company's representation that, and the Company
agrees that, he will have authority over and responsibility for the day-to-day
operations as set forth in Section 7A of the Acquisition Agreement. Except for
routine travel incidental to the business of the Company, Executive's services
shall be performed at the primary premises of the Company at 000 Xxxxxxxxx
Xxxxx, Xxxxxxx, X.X.
3. Compensation.
(a) In payment for services rendered to the Company under this Employment
Agreement, the Company shall pay the Executive a salary of $160,000 per year
during the term of this Agreement. Such salary shall be paid in accordance with
Complete's normal practice for its executives (but in no event less frequently
than on the 1st and 16th day of each month).
(b) Commencing on July 1, 1997 and on July 1 of each of each succeeding
year during the Employment Term, the Executive's salary for the immediate
succeeding twelve month period shall be increased by a percentage equal to the
percentage, if any, that the CPI (as hereinafter defined) shall have increased
during the 12 months ending on the May 31 immediately preceding such year (i.e.,
on July 1, 1997 Executive's salary shall be multiplied by a fraction the
numerator of which shall be the CPI for May 1997 and the denominator of which
shall be the CPI for May 1996; provided that such computations shall not result
in a salary decrease). The salary so adjusted will prevail for the immediately
succeeding employment year.
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CPI shall mean the Consumer Price Index for Urban Consumers, All Items
(1982-84=100) for New York, Northern New Jersey and Long Island as published
monthly by the United States Bureau of Labor Statistics.
(c) Except as otherwise provided herein, the Executive shall be entitled to
participate, to the extent he qualifies, in any bonus or other incentive
compensation, profit-sharing or retirement plans, life or health insurance plans
or other benefit plans maintained by the Company consistent with the past
practices of Intertech Corporation and Penta Automation Resources, Inc., upon
such terms and conditions as are made available to executives of the Company,
generally. The Executive shall also be entitled to those benefits set forth on
Schedule A hereto.
(d) The Executive shall be entitled to reimbursement of all reasonable,
ordinary and necessary business related expenses incurred by him in the course
of his duties as set forth on Schedule A.
(e) The Executive shall be entitled to 6 full weeks of paid vacation during
each calendar year which shall be taken in accordance with the procedures of the
Company in effect from time to time.
(f) As soon as practicable after the date hereof, Complete will grant to
the Executive options to purchase 20,000 shares of its Common Stock, exercisable
at the market price of such shares on the date of grant and permitting
"cashless" exercise, subject to shareholder approval of an amendment of the
Complete Management, Inc. 1995 Stock Option Plan increasing the number of shares
for which Complete may grant options thereunder (the "Amendment") The options
granted under this paragraph will be "incentive stock options" to the maximum
extent permitted by the Internal Revenue Code. Complete will submit the
Amendment to its shareholders for approval at the
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first shareholders meeting held after the date hereof but in no event later than
May 31, 1997.
4. Termination.
(a) This Agreement shall terminate upon the happening of any of the
following events:
(i) the death of the Executive.
(ii) In the event the Executive suffers a mental or physical illness,
injury, incapacity or other disability of such nature or character so
that the Executive is unable to substantially perform the duties
required of him hereunder for a period of more than ninety (90) days
within a period of one hundred and eighty (180) consecutive days (the
expiration of the 180 day period being the date of disability).
(iii) The Company may terminate the Executive's employment for Cause
(as defined in subparagraph (b) below) upon compliance with the
provisions of subparagraph (c).
(iv) The Executive may terminate his employment for "Good Reason" (a)
if the Company or Complete, as applicable, materially breaches any
material provision of this Agreement which causes or may cause harm to
the Executive or (b) if the Company or Complete, as applicable,
breaches any material provision of the Acquisition Agreement or the
Registration Rights Agreement or if the Billing and Collection
Agreement between the Company and Complete is terminated for reasons
other than a default by the Company.
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(b) "Cause" shall mean (i) if the Executive engages in an act of theft,
fraud, embezzlement or other similar intentional act against the Company (ii)
the Executive's material breach of any material term of this Employment
Agreement which causes or may cause harm that is materially injurous to the
Company or (iii) the Executive's willful and repeated misconduct or gross and
repeated negligence which is materially injurious to the Company, monetarily or
otherwise.
(c) Termination for Cause shall be effected by the Company only if the
Company has delivered to the Executive a notice of termination which specifies
such Cause in reasonable detail and which gives the Executive at least thirty
(30) days to cure the circumstances giving rise to such notice of termination
and if, in the reasonable opinion of the Board of Directors of the Company, such
non-compliance has not been cured, Executive's employment with the Company shall
be deemed terminated as of the date notifies Executive in writing of its
determination.
(d) Termination for Good Reasons shall be effected by the Executive only if
the Executive has delivered to the Company a notice of termination which
specifies such Good Reason in reasonable detail and which gives the Company at
least thirty (30) days to cure the circumstances giving rise to such notice of
termination and if, such non-compliance has not been cured Executive's
employment with the Company shall be deemed terminated as of expiration of the
notice period.
(e) (i) In the event of termination of the Executive's employment pursuant
to Section 4(a) (i) or (ii), the Executive shall be paid his base salary through
the date of death or disability, as applicable. In addition, the Executive, or
his estate, as applicable, shall (A) continue to be paid (in accordance with the
terms of each of the Acquisition Agreements), the Additional Consideration (as
defined in and
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pursuant to each of the Acquisition Agreements); and (B) shall receive the
benefits set forth on Schedule A.
(ii) In the event of termination of the Executive's employment pursuant to
Section 4(a) (iii), the Executive shall be paid his base salary calculated as if
the Executive's employment had not terminated through the last day of the year
in which such termination occurs. In addition, the Executive shall be paid (in
accordance with the terms of each of the Acquisition Agreements as applicable),
the Additional Consideration as defined in and pursuant to each of the
Acquisition Agreements earned through the last day of the year in which such
termination occurs.
(iii) In the event of termination of the Executive's employment pursuant to
Section 4(a) (iv), the Executive shall be paid the full amount of his base
salary calculated as if the Executive's employment had not terminated and this
Agreement was performed through its term. In addition, the Executive shall be
paid (in accordance with the terms of each of the Acquisition Agreements as
applicable), dentire amount of the Additional Consideration in full (i.e.
$5,000,000 less prior payments as defined in the Acquisition Agreement), and
shall receive full medical coverage, for himself and his family (on such terms
as are in effect directly prior to such termination), at the Company's sole
expense, for the period of time between the date of termination through December
31, 2000.
In addition, in the event of termination of the Executive's employment for
any reason whatsoever, the provisions of Section 3(f) shall survive such
termination.
5. Covenant Not to Compete.
(a) For the period beginning on the Closing Date (as defined in the
Acquisition Agreement) and ending December 31, 2000 unless earlier terminated
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pursuant to the provisions hereof or in the Acquisition Agreements (the
"Non-Compete Period"), the Executive hereby covenants and agrees with the
Company that, unless acting as an officer, employee or consultant to the
Company, or an affiliate of the Company, or with the Company's prior written
consent, such Executive will not anywhere (i) compete, directly or indirectly,
with the Company or any of its affiliates in the business or activities in which
the Company is engaged during his employment with the Company (the "Company's
Business") in any state in which the Company is then doing business; (ii)
directly or indirectly, on his own behalf or in behalf of or as an employee or
agent of any other person or entity, contact or approach any person or business,
wherever located, for the purpose of competing with the Company in the Company's
Business; (iii) participate as a director, officer, consultant, or partner of,
or have any other direct or indirect financial interest in, any enterprise which
engages in the Company's Business; provided, however, that the Executive may own
up to two (2%) percent of the capital stock of any corporation except that
Executive may oun up to two (2%) of complete required to file reports pursuant
to the Securities Exchange Act of 1934 that is in competition with the Company's
Business; or (iv) participate as an employee, agent, representative or
consultant in, or render any services to, any enterprise in which he has
responsibilities for activities which compete, directly or indirectly, with the
Company's Business.
(b) For a period of one year after the Non Compete Period Executive will
not (i), directly or indirectly, hire, solicit or encourage to leave the
employment of Complete or any of its affiliates, any employee of Complete or any
of its affiliates who work in or perform services for the Company's Business,
including any person who has left the employment of Complete or any of its
affiliates during the six months
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preceding the end of the Non Compete Period, or (ii) solicit business from or
provide billing and collection services to any entity that was a customer of the
Company during the Non Compete Period.
(c) Notwithstanding the foregoing, if during the Employment Term, the
Executive is terminated by the Company other than for Cause, or is terminated by
the Executive for Good Reason the covenants set forth in this Sections 5(a) and
(b) and 7 and the covenants set forth in Sections 7.03 and 7.05 of the
Acquisition Agreements shall from and after the date of such termination be of
no further force and effect; provided, however, that the Company shall still
have rights against the Executive for any violation of such covenants prior to
such date.
6. Confidential Information. Such Executive shall keep secret and retain in
strictest confidence, and shall not use for the benefit of itself or others, all
confidential matters relating to the Company's Business, including, without
limitation, customer lists, operational methods and other business affairs
relating to the Company's Business known by the Executive and, except as
otherwise required by law, shall not disclose them to anyone, except with
Complete's express prior written consent.
7. Employees of Complete. Such Executive shall not at any time during the
Non-Compete Period, directly or indirectly, hire, solicit or encourage to leave
the employment of the Company, any employee of the Company, or hire any such
employee who has left the employment of the Company within nine months of the
termination of such employee's employment.
8. Acknowledgment; Severability. The Executive acknowledges that the
restrictions contained in Sections 6, 7 and 8 are reasonable and necessary to
protect the
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business and interests of the Company and that any violation of these
restrictions will cause substantial and irreparable injury to the Company.
Therefore, the Executive agrees that the Company is entitled, in addition to any
other remedies, to preliminary and permanent injunctive relief to secure
specific performance, and to prevent a breach or contemplated breach, of
Sections 6, 7 and 8. The restrictions set forth herein shall be construed as
independent covenants, and the existence of any claim or cause of action against
the Company, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the restrictions
contained in Sections 6, 7 and 8. In the event that the provisions of Sections
6, 7 and 8 should ever be deemed to exceed the time or geographic limitations or
any other limitations permitted under applicable laws, then such provisions
shall be deemed reformed to the maximum extent permitted by applicable laws.
9. Non-Assignability. Except as otherwise provided herein, this Employment
Agreement may not be assigned by either the Company or the Executive.
10. Notices. All notices, requests, demands and other communications which
are required to be or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when (a) delivered in person, (b) the
day following dispatch by an overnight courier service (such as Federal Express
or UPS, etc.) or (c) five (5) days after dispatch by certified or registered
first class mail, postage prepaid, return receipt requested, to the party to
whom the same is so given or made:
If to the Company: Intertech/Penta Group, Inc.
c/o Complete Management, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxxx, Chairman of the Board
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with a copy to: Morse, Zelnick, Rose & Lander, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
If to the Executive
with a copy to:
11. Governmental Regulation. Nothing contained in this Employment Agreement
shall be construed so as to require the commission of any act contrary to law,
and wherever there is any conflict between any provision of this Employment
Agreement and any statute, law, ordinance, order or regulation, the latter shall
prevail, but in such event any such provision of this Employment Agreement shall
be curtailed and limited only to the extent necessary to bring it within the
legal requirements.
12. Governing Law. This Employment Agreement shall be governed by and
construed in accordance with the laws of New York.
13. Entire Agreement; Amendment. This Employment Agreement together with
the Acquisition Agreement sets forth the entire understanding of the parties in
respect of the subject matter contained herein and supersedes all prior
agreements, arrangements and understanding relating to the subject matter
hereof. This Agreement may only be amended by a written agreement signed by both
parties hereto or their duly authorized representatives.
14. Guaranty. Complete hereby guarantees all of the obligations of the
Company under this Employment Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
INTERTECH/PENTA GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxxx, President
/s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxx
COMPLETE MANAGEMENT, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
X. Xxxxxxxx,
COO
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