EXHIBIT 10.31
AGREEMENT
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This AGREEMENT ("Agreement") is made and entered into as of the 1st day of
July, 2000 (the "Effective Date"), by and between HADRON, INC., a New York
corporation (the "Company"), and X.X. XXXXXXX ("Xxxxxxx").
RECITALS
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WHEREAS, Xxxxxxx is employed as Chairman of the Company pursuant to that
certain Employment Agreement dated as of July 1, 1998, as amended March 30, 2000
(the "Employment Contract"); and
WHEREAS, the Company desires to hire Xxxxxxx, and Xxxxxxx desires to be
hired, to perform consulting services on a part-time basis relating to
acquisitions, strategic planning and other areas in which Xxxxxxx has experience
and expertise, and to amend and restate his Employment Contract.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. Change of Status. Xxxxxxx hereby agrees as of the Effective Date that
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his employment with the Company shall be part-time. Xxxxxxx agrees that if
elected by the Stockholders of the Company, he will continue to serve as a
member and Chairman of the Board of Directors of the Company and be compensated
in such capacity as are other members of the Board of Directors of the Company.
This Consulting Agreement amends and supersedes the Employment Contract.
2. Services. Xxxxxxx will report directly to the Chief Executive Officer
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of the Company (the "CEO"). Xxxxxxx will provide the following services, as
requested by the Board of Directors or the CEO, and also to perform those
services normally associated with or incidental to those requested services
(collectively, "the Services"):
(a) Consulting relating to mergers, acquisitions, joint ventures
and/or finance;
(b) Consulting and assistance with sales, marketing, human resources
and/or recruiting;
(c) Strategic planning; and
(d) Any other services as reasonably requested by Company which are
agreed to by Xxxxxxx.
Xxxxxxx shall make himself available to perform services during regular
business hours as requested in advance by the Board of Directors or the CEO.
There shall be no minimum number of hours of services to be performed by
Xxxxxxx. Xxxxxxx shall not be required to work more than
90 hours per quarter in performance of the Services. Xxxxxxx hereby agrees to
perform the Services in accordance with the terms and conditions of this
Agreement.
3. Responsibilities and Covenants of Xxxxxxx.
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(a) Xxxxxxx shall comply with and adhere to all directives, policies
and procedures of Company and the officers of the Company.
(b) Xxxxxxx shall perform, and document the performance of, the
Services in accordance with reasonable standards of diligence and care and
Company's policies, programs and procedures. Xxxxxxx shall create and maintain
records documenting the Services utilizing forms provided by Company for such
documentation, to the extent such forms are available.
(c) Unless expressly authorized by the Board of Directors or CEO of
the Company, Xxxxxxx shall have no right or authority at any time to make any
contract or binding promise of any nature on behalf of Company, whether oral or
written.
(d) When necessary, the Company shall provide Xxxxxxx with an office
and office support, but Xxxxxxx shall not be required to report to work at the
Company's premises on a regular basis. The Company shall provide Xxxxxxx with
access to a conference room or other facility where Xxxxxxx may meet with
customers or employees of the Company in performance of the Services.
4. Compensation.
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(a) Base Fee. For the Services performed hereunder by Xxxxxxx,
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Company shall pay Xxxxxxx $11,866.67 per month, payable on the first day of each
month. Company shall be obligated to pay this amount to Xxxxxxx for a period of
twenty-four (24) months from the Effective Date, irrespective of whether this
Agreement is terminated for any reason.
(b) Expenses. Company shall reimburse Xxxxxxx for reasonable travel
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expenses for travel requested by the Board of Directors or the CEO, in
accordance with Company's travel and reimbursement policies. Company shall also
reimburse Xxxxxxx for Company-related long-distance phone calls, car mileage for
local travel, and entertainment expenses which have been pre-approved by the
Board of Directors or the CEO.
(c) Benefits. The Company shall continue to provide health insurance
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to Xxxxxxx in the manner and form that health and dental insurance was provided
to him immediately prior to the Effective Date and Xxxxxxx shall reimburse
Company $284.70 per month for the cost of such health and dental insurance. The
Company shall not provide, and shall have no obligation to provide, Xxxxxxx with
any other benefits.
(d) Indemnification. The Company shall continue to indemnify Xxxxxxx
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for his activities as an officer, director and employee of the Company to the
fullest extent provided under the Articles of Incorporation and By-Laws of the
Company, as they exist on the Effective Date, and extend to Xxxxxxx the
indemnification permitted under Article VII, Section 7 of the Company's By-Laws.
This obligation of indemnification shall survive any termination of this
Agreement.
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5. Term and Termination. The term of this Agreement shall commence as of
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the Effective Date, and shall continue for a period of twenty-four (24) months
from the Effective Date, except as earlier terminated in accordance with the
following paragraph. The provisions of Sections 4(a), 4(d), 5, and 6 shall
survive any termination of this Agreement.
If Company fails to make a payment when due, and such failure continues for
a period of twenty (20) business days after the Company's receipt from Xxxxxxx
of notice of such failure, then Xxxxxxx shall have the right to terminate this
Agreement and the remaining unpaid obligations of Company shall, at Xxxxxxx'x
option, become due and payable immediately. In the event that Xxxxxxx retains
counsel to assist in the collection of such unpaid obligations, the Company
shall reimburse all reasonable attorney's fees, costs and necessary
disbursements incurred by Xxxxxxx in connection with such collection. The right
to terminate shall be in addition to any remedies at law or equity to which the
parties may be entitled.
6. Outstanding Obligations of Company to Xxxxxxx.
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(a) Company has executed a Note, payable to Xxxxxxx in the original
principal amount of $430,000, dated as of February 15, 2000. Company and
Xxxxxxx acknowledge that the outstanding principal balance of such Note is
$230,000. Company shall continue to be liable under such Note and shall make
any and all payments to Xxxxxxx as are required pursuant to such Note.
(b) Company shall pay Xxxxxxx for unused vacation time accrued as of
the Effective Date. As of July 1, 2000 such unused vacation time equals 39.602
hours multiplied by the rate of $89.75 per hour to equal $3,554.28.
(c) Xxxxxxx and Xxxxxx Xxxxx Xxxxxxx have executed an Amended and
Restated Guaranty of Payment, dated as of April 12, 2000, in favor of United
Bank (the "Guaranty"). As a condition to this Agreement becoming effective, the
Company must have caused such Guaranty to be terminated and released. The
Company shall indemnify Xxxxxxx for any and all claims, losses or expenses
(including reasonable attorney's fees) incurred by Xxxxxxx and Xxx. Xxxxxxx
arising from such Guaranty.
(d) Company shall pay to Xxxxxxx $79,536.00, which represents all
amounts due to him under Xxxxxxx'x deferred compensation plan, by making twelve
(12) equal monthly payments to Xxxxxxx in the amount of $6,955.54 commencing one
(1) month after the Effective Date.
7. Status of Xxxxxxx. Except as expressly provided in this Agreement,
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with respect to the Services, Company shall have no responsibility for the
payment to or on behalf of Xxxxxxx of any fringe benefits, professional
liability insurance premiums, contributions to insurance and pension or other
deferred compensation plans nor will Company have any responsibility for the
filing of any documents, forms and returns pertinent to all of the foregoing.
8. Restrictive Covenants.
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(a) During the term of this Agreement, Xxxxxxx will not, either
directly or indirectly, solicit or transact business with a Client which is
likely to adversely affect Company
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or induce, solicit or attempt in any manner to cause or persuade any Client of
the Company to cease, to not increase or to decrease the volume of business
which such Client has customarily done or contemplated doing with the Company or
any of its affiliates. For the purposes of the Agreement, "Client" shall include
any person, entity or facility, or their affiliates, with which the Company or
any of its affiliates has contracted or for which the Company or any of its
affiliates has provide services at any time during the twelve (12) month period
prior to the Effective Date. Client also includes any and all prospective
Clients of the Company or its affiliates, with which the Company or any of its
affiliates as negotiated for the provision of services or products within the
twelve (12) month period prior to the Effective Date.
(b) During the term of this Agreement, Xxxxxxx will not, either
directly or indirectly, employ, solicit for employment, or suggest to any other
person or entity that they or it employ or solicit for employment any employee
of the Company or any of its affiliates.
(c) Xxxxxxx hereby acknowledges that breach of any covenant contained
in Section 8 would cause irreparable injury to Company. Therefore, Xxxxxxx
hereby agrees that the covenants contained in this section may be specifically
enforced through injunctive relief; however, the right to injunctive relief
shall not preclude Company from obtaining any other legal remedy available to
it. If any action at law or in equity is necessary for Company to enforce the
provisions of this Agreement and Company prevails in such action, Company shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which it may be entitled.
9. Record Retention. Xxxxxxx shall keep records of all services performed
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and costs incurred under this Agreement, consistent with Company policy.
10. Mutual Release.
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(a) Except for Company's obligations under this Agreement, the
Company's continuing obligation to Xxxxxxx as an officer and director of the
Company, and the Company's obligations to Xxxxxxx under any option, warrant or
retirement plan, Xxxxxxx hereby releases, acquits and forever discharges the
Company and its successors, assigns, agents, directors, officers, owners,
employees, representatives, attorneys, subsidiaries, and affiliates, and all
persons acting by, through, under, or in concert with any of the foregoing (the
"Company Released Parties"), from any and all claims, demands, actions,
obligations or liabilities whatsoever, whether known or unknown, which Xxxxxxx
ever had or may now have against the Company Released Parties or any of them,
including, without limitation, any claims, demands or liabilities related to or
arising out of Xxxxxxx'x employment by the Company or termination of such
employment.
(b) Except for Xxxxxxx'x obligations under this Agreement, Xxxxxxx'x
continuing obligations as an officer and director of Company and Xxxxxxx'x
obligations under any option, warrant or retirement plan, Company hereby
releases, acquits and forever discharges Xxxxxxx and his successors, assigns,
agents, representatives and attorneys, and all persons acting by, through, under
or in concert with any of the foregoing (the "Xxxxxxx Released Parties"), from
any and all claims, demands, actions, obligations or liabilities whatsoever,
whether known or unknown, which Company ever had or may not have against the
Xxxxxxx Released Parties or any of them,
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including, without limitation, any claims, demands or liabilities related to or
arising out of Xxxxxxx'x employment by the Company.
12. General Provisions.
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(a) This Agreement, and the rights and obligations of the parties
hereunder, shall be governed by and interpreted in accordance with the laws of
the Commonwealth of Virginia.
(b) Any notice required or permitted to be given hereunder shall be
either hand-delivered, sent by telephone facsimile, sent by overnight express
courier service or sent by United States mail (registered or certified, return
receipt requested) to the parties at the following address: (i) if to Xxxxxxx,
to 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, (000-000-0000 fax) and (ii)
if to Company, to Hadron, Inc., 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000, Attn: Chief Executive Officer, or to such other address as
either party may designate to the other by written notice given in accordance
herewith. Notice shall be deemed to have been given when delivered or, if sent
by United States mail, within three (3) days of deposit in the mail (properly
addressed, with postage prepaid thereon).
(c) This Agreement may be modified, waived, or discharged only by a
writing, signed by Xxxxxxx and a duly authorized officer of Company.
(d) This Agreement may not be assigned by Xxxxxxx; however, in the
event of Xxxxxxx'x death, Xxxxxxx'x rights under this Agreement shall pass to
Xxxxxxx'x estate or heirs. This Agreement shall be binding upon Company and
Xxxxxxx, and shall inure to the benefit of Company and Xxxxxxx, and their
respective personal and legal representatives, heirs, successors and assigns.
(e) This Agreement sets forth and is intended to be an integration of
all of the promises, agreements, conditions, understandings, covenants,
warranties and representations among the parties with respect to the subject
matter hereof and there are no promises, agreements, conditions, understandings,
covenants, warranties or representations, oral or written, express or implied,
among the parties, with respect to the subject matter hereof other than as set
forth herein. Any and all prior agreements among the parties, with respect to
the subject matter hereof, are hereby superseded.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
Xxxxxxx and by a duly authorized representative of Company, effective as of the
date first written above.
HADRON, INC.
By:______________________________________
Xxx X. Xxxxx, Chief Executive Officer
X.X. XXXXXXX
_________________________________________
X.X. Xxxxxxx
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