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EXHIBIT 10.4
ENTEX INFORMATION SERVICES, INC. RETENTION AGREEMENT
This Agreement is entered into as of November 17, 1997, by and between ENTEX
Information Services, Inc. (the "Company") and Xxxx X. Xxxxxxxxx (the
"Executive"), a key employee of the Company, for the purpose of providing a
financial incentive for the Executive to remain with the Company. To encourage
the Executive to provide continuing services to the Company and to provide for
reasonable compensation in the event that the Executive's employment is
terminated as a result of a Change of Control or restructuring of the Company,
the parties agree as follows:
1. TERM OF AGREEMENT
This Agreement will be in effect from the date hereof until 24 months following
a "Change of Control" of the Company. If no Change of Control has occurred by
November 30, 1998, this Agreement will expire on that date.
2. TERMINATION PAYMENT
If a Change of Control Termination of the Executive's employment occurs during
the term of this Agreement, then the Executive shall be entitled to receive a
termination payment from the Company (the "Termination Payment"). The amount of
the Termination Payment shall be equal to the product of 12 times the
Executive's Target Total Monthly Compensation. The Target Total Monthly
Compensation shall be the sum of (i) 1/12 of the Executive's base salary as of
the date of termination and (ii) 1/12 of the annual target bonus under any
compensation plan in which the Executive participates assuming 100% achievement
of all bonus objectives. The Termination Payment will be made at regular
intervals on the payroll dates of the Company or any successor to the Company,
beginning with the month following the month in which a Change of Control
Termination occurs. The Executive shall also receive the full base salary and
target bonus for the month in which the Change of Control Termination occurs.
In addition, the Executive's participation (including dependent coverage) in
any life, disability, health and dental plans shall be continued, or equivalent
benefits provided by the Company, for a period of up to 12 months. The levels
of coverage and the Executive's contributions for such coverage will be those
in effect immediately prior to the Change of Control Termination.
The foregoing provisions of this Section 2 shall apply unconditionally and
shall not be affected by the Executive's death, disability or acceptance of
another position except that benefits provided under life, disability, health
or dental plans will terminate 90 days after the Executive has obtained other
employment which provides for such benefits. The Executive hereby agrees to
notify the Company promptly upon obtaining such other employment.
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3. OUTPLACEMENT
If a Change of Control Termination of the Executive's Employment occurs during
the term of this Agreement, the Executive shall be entitled to outplacement
services provided by a mutually acceptable outplacement service provider, with
a value not to exceed $10,000.
4. MISCELLANEOUS PROVISIONS
4.1 Employment at Will
The company and the Executive acknowledge that the Executive's employment is at
will, as provided by applicable law. If the Executive's employment terminates
for any reason other than a Change of Control Termination, then the Executive
shall only be entitled to such severance pay and benefits (if any) to which the
Executive may be entitled under the Company's then-existing termination
policies and practices and benefit plans and policies at the time of
termination.
4.2 Withholding Taxes
Any payments or distributions under the Agreement shall be subject to reduction
to the extent required to satisfy any withholding tax obligation imposed by
federal, state, local or foreign law.
4.3 Company's Successors
This Agreement shall be binding upon and inure to the benefit of the Company
and any successor of the Company (including, without limitation, any
corporation or other entity which directly or indirectly acquires all or
substantially all of the assets or shares of the Company, whether by merger,
consolidation, sale, or otherwise) but shall not otherwise be assignable by the
Company. The Company shall require that any such successor expressly assume
this Agreement and become obligated to perform all of the terms and conditions
hereof.
4.4 Executive's Successors
The terms of this Agreement shall be enforceable by and inure to the benefit of
the Executive's heirs and estate in the event of his/her death.
4.5 Indemnification
ENTEX hereby acknowledges and agrees that it shall remain subject to the
Indemnification Agreement dated August 1, 1996 between it and the
Executive after a Change of Control Termination.
5. DEFINITIONS
5.1 "Change of Control" means the transfer of ownership or control of more
than 50% of all of the assets or shares of the Company, whether by tender
offer, merger, consolidation, sale of assets or contested election or any
combination of the foregoing transactions.
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5.2 "Change of Control Termination" means a Change of Control followed by (i)
the termination of the Executive's employment other than for Cause or as a
result of the Executive's death, disability, or voluntary resignation; (ii) a
reduction of the Executive's base compensation and target bonus below the base
compensation and target bonus in effect immediately preceding the Change of
Control; (iii) a reduction to a level not materially consistent with that
existing immediately preceding the Change of Control in the level of authority
or scope of the responsibilities of the Executive; or (iv) a relocation of the
office at which the Executive is expected to perform his/her responsibilities
greater than 35 miles from the location of the office immediately preceding the
Change of Control.
5.3 "Cause" means (i) a continued and willful failure by the Executive to
substantially perform the Executive's duties which failure constitutes a gross
neglect of his or her duties, (ii) the commission by the Executive of an act of
fraud or embezzlement or an act which the Executive knew to be in gross
violation of his/her duties to the Company; or (iii) a felony conviction of or
plea by the Executive.
6. OTHER AGREEMENTS
This Agreement supersedes any and all agreements between the Company and the
Executive relating to payments upon termination of employment after a Change of
Control, whether oral or written.
7. AMENDMENTS
This Agreement may be amended only by written instrument signed by the Company
and the Executive.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
In Witness Whereof, the parties hereto have executed this Agreement as of the
day and year first above written.
ENTEX Information Services, Inc.
By: /s/ Xxxx X. XxXxxxx, Xx.
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Xxxx X. XxXxxxx, Xx.
Executive:
/s/ Xxxx X. Xxxxxxxxx
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