Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") between Cotelligent, Inc.
("Cotelligent"), a Delaware corporation, and Xxxxxx X. Xxxxxx ("Employee") is
hereby entered into effective as of the 19th day of December, 2000 ("Effective
Date").
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, Cotelligent, through its operating
subsidiaries, is engaged primarily in the business of providing information
technology consulting and outsourcing services to organizations with complex
information system and technology operations. References herein to the
"Cotelligent Group" are intended to include Cotelligent and its operating
subsidiaries, as may be applicable in the circumstances.
Employee is and will be employed hereunder by Cotelligent in a confidential
relationship wherein Employee, in the course of his employment with Cotelligent,
is and 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 goodwill of Cotelligent.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and die 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 its Chief Financial Officer. As
such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a chief financial officer and will report solely and
directly to the Chief Executive Officer. Employee hereby accepts this employment
upon the terms and conditions herein contained and, subject to Section 1(c),
agrees to devote his time, attention and efforts to promote and further the
business of the Cotelligent Group.
(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. This foregoing limitation 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
Section 3 hereof.
2. Compensation
For all services rendered by Employee, Cotelligent shall compensate
Employee as follows:
(a) Base Salary. Beginning on the Effective Date, the base salary payable
to Employee shall be $180,000 per year, payable on a regular basis in accordance
with Cotelligent's standard payroll procedures but not less than monthly.
Cotelligent and Employee agree that this annual base salary is the same as that
received by Employee while employed by Cotelligent immediately prior to his
promotion to Chief Financial Officer, and is less than the average annual base
salary paid to chief financial officers in companies comparable to Cotelligent.
The amount of such average annual base salary paid to chief financial officers
in comparable companies, but in any event an amount no less than Employee's
actual annual base salary at the relevant time, shall be referred to in this
Agreement as the "Market Base Salary", which the parties agree for calendar year
2001 is $200,000. The Chief Executive Officer shall adjust Employee's
compensation to the Market Base Salary when he determines it appropriate in
light of the Company's operating performance to increase executive officer
compensation to market. Such salary increase would, in all likelihood, require
approval by the Board or a duly constituted Committee thereof.
(b) Incentive Bonus. For fiscal year 2001 and subsequent fiscal years
during the Employee's employment with Cotelligent hereunder, Employee shall be
eligible to receive annual incentive bonuses of up to fifty percent (50%) of
the amount of his base salary based upon such factors as the Board, or a duly
constituted committee thereof, shall determine in its discretion, including but
not limited to the Employee's individual performance and the Company's
performance.
(c) 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 other 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) The applicable number of days of paid time off pursuant to the
Cotelligent Paid Time Off policy.
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(4) Such 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. Restrictive Covenants
(a) Employee will not, during the period of his employment by or with any
member of the Cotelligent Group and for a period of one (1) year immediately
following the termination of his employment, 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) call upon, or cause others to call upon, any person who is, at
that time, within 100 miles of where Cotelligent or where any of its
subsidiaries conducts business (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;
(ii) call upon, or cause others to 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;
(iii) call upon, or cause others to call upon, any prospective
acquisition candidate, on Employee's own behalf or on behalf of any competitor
in the computer consulting and/or software application business, which candidate
was either called upon by Cotelligent (including its subsidiaries) or for which
Cotelligent (including its subsidiaries) made an acquisition analysis, for the
purpose of acquiring such entity; or
(iv) 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 covenants 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 one of the foregoing
covenants 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 covenants may be
enforced by Cotelligent (including its subsidiaries) in the event of breach by
him, by injunctions and restraining orders.
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(c) It is agreed by the parties that the foregoing covenants in this
Section 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 of such new location 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 engage in similar activities or business in locations the
operation of which, under such circumstances, do not violate another provision
of this Section 3, Employee shall not be chargeable with a violation of this
Section 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 Section 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 Section 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,
will not constitute a defense to the enforcement by Cotelligent (including its
subsidiaries) of such covenants. It is specifically agreed that the period of
one (1) year stated at the beginning of this Section 3, during which the
agreements and covenants of Employee made in this Section 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 Section 3.
4. Term, Termination, Rights on Termination
The term of this Agreement shall begin on the Effective Date and continue
for one year (the "Initial Term"). On the first anniversary of the Effective
Date the term shall be extended for two additional years unless at least sixty
(60) days prior to any such anniversary either party gives notice in writing to
the other that the Agreement will not be so extended. Thereafter, the term
shall be extended an additional year on each subsequent anniversary of the
Effective Date unless at least sixty (60) days prior to any such anniversary
either party gives notice in writing to
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the other that the Agreement will not be so extended an additional year. This
Agreement and Employee's employment may be terminated in any one of the
following ways:
(a) 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 which materially and adversely
affects the operations or reputation of Cotelligent (including its
subsidiaries); (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); or (4) Employee's conviction of a
felony crime. In the event of a termination for good cause, as enumerated above,
Employee shall have no right to any severance compensation.
(b) Without Good Cause. Should Employee be terminated without good cause by
Cotelligent or Cotelligent fails to extend this Agreement without good cause,
Employee shall receive, in one lump-sum payment payable as soon as practicable
after the effective date of termination the following amount: (i) one (1) times
Employee's then current Market Base Salary plus (ii) one (1) times Employee's
most recent annual bonus (the "Termination Payment"). Any amounts payable to
Employee pursuant to this Section 4(b) shall be contingent upon Employee's
execution of an effective general release of claims in the form determined by
Cotelligent, which in any event shall be substantially in the form attached to
this Agreement as Exhibit A. It is specifically understood and agreed that, in
the event Employee's employment is terminated without good cause, Employee
executes such general release of claims, Cotelligent shall in all circumstances
be required to pay the Termination Payment to Employee, 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 good cause by Cotelligent shall operate to
shorten the period set forth in Section 3(a) and during which the terms of
Section 3, if applicable, apply to six (6) months from the date of termination
of employment.
Any group health continuation coverage that Cotelligent is required to
offer under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
shall be offered upon termination and Cotelligent shall pay the cost of such
COBRA coverage.
Employee shall be deemed to have been terminated without good cause by
Cotelligent if (i) Cotelligent breaches Section 2(a) of this Agreement; (ii)
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 Chief Financial
Officer capacity to Cotelligent and its subsidiaries and affiliates, and the
continuance thereof for a period of five (5) business days after written notice
from Employee that he is unwilling to accept such changes in duties or
responsibilities; (iii) Cotelligent moves Employee's primary business location
so as to increase Employee's round-trip commute by more than thirty
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(30) miles from the distance in effect on the Effective Date (disregarding any
changes in the location of Employee's principal residence subsequent to the
Effective Date) without Employee's written consent; (iv) any successor to
Cotelligent refuses or fails to assume Cotelligent's obligations under this
Agreement; or (v) Cotelligent decreases Employee's annual base salary, annual
target bonus opportunity as described in Section 2(b), or the dollar value of
the package of perquisites, benefits and other compensation (including those
items enumerated in Section 2(c)), taken as a whole, except when any reduction
described in this clause (v) is part of a program affecting Cotelligent's
officers or workforce generally.
In the event Employee is terminated without good cause pursuant to this
Section 4(b), Employee's stock options and other stock awards shall become fully
vested and exercisable and Employee shall have, notwithstanding anything to the
contrary contained in any relevant option or stock award agreements, one hundred
eighty (180) days within which to exercise any vested options, after which any
options not exercised by Employee would be forfeited; provided, however, if
Employee is terminated without good cause pursuant to this Section 4(b) upon or
within one (1) year following a Change in Control (as defined in Section 11(e)
hereunder), Employee shall have, notwithstanding anything to the contrary
contained in any relevant option or stock award agreements, one (1) year within
which to exercise any vested and outstanding options, to the extent permitted by
the underlying agreements governing the Change in Control, after which any
options not exercised by Employee would be forfeited.
At any time after the Effective Date, Employee may, without good cause,
terminate this Agreement and Employee's employment, effective thirty (30) days
after written notice is provided to Cotelligent. If Employee voluntarily resigns
or otherwise terminates his employment without good cause pursuant to this
Section 4(b), (i) Employee shall receive no severance compensation and (ii)
notwithstanding anything to the contrary contained in any relevant option or
stock award agreements, Employee shall have ninety (90) days within which to
exercise any previously vested and outstanding options, after which any such
options not exercised by Employee will be forfeited.
(c) Change in Control of Cotelligent. Refer to Section 11 below.
(d) Other Provisions. Upon termination of this Agreement for any reason
described above in this Section 4, 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 Section 11. 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
Section 8 herein and Employee's obligations under Sections 3, 5, 6, 7 and 9
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
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competent jurisdiction or pursuant to the provisions of Section 15 below,
Cotelligent shall pay all amounts and damages to which Employee may be entitled
as a result of such breach, including arbiters 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 Section 3 shall apply in the event
this Agreement or the Employee's employment hereunder is terminated as a result
of a breach by Cotelligent.
5. 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.
6. 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.
Employee understands the provisions of California Labor Code 2870.
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
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(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
7. 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 or 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.
8. 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 for a member of the
Cotelligent Group (whether or not 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.
9. 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.
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10. 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 Section 11 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.
11. Change in Control.
(a) Employee understands and acknowledges that Cotelligent may be
acquired by, 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 separate 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 good cause
and the applicable portions of Section 4(b) 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)
the restrictive covenants and other provisions of Section 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 Section 4(b) will apply as though Cotelligent had
terminated the Agreement without good 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 of this Agreement and
(b) the restrictive covenants and other provisions of Section 3, if applicable,
shall all apply for a period of six months from the effective date of
termination of this Agreement.
(d) For purposes of applying Section 4 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 1998 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.
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(e) A "Change in Control" shall be deemed to have occurred in the event
of any one of the following:
(i) The consummation of a merger or consolidation of Cotelligent with
or into another entity or any other corporate reorganization, if more than 50%
of the combined voting power of the continuing or surviving entity's securities
outstanding immediately after such merger, consolidation or other reorganization
is owned, directly or indirectly, by persons who were not stockholders of
Cotelligent immediately prior to such merger, consolidation or other
reorganization (including for this purpose any increase in ownership in
connection with such merger, consolidation or other reorganization by a person
who was a stockholder of Cotelligent immediately prior to such merger,
consolidation or other reorganization);
(ii) The sale, exchange, lease, transfer or other disposition of all
or substantially all of the Company's assets;
(iii) A change in the composition of the Board, as a result of which
fewer than one-half of the directors are directors who either (x) had been
directors of Cotelligent on the date 24 months prior to the date of the change
in composition that may constitute a Change in Control (the "original
directors") or (y) were elected, or nominated, with the affirmative votes of at
least a majority of the aggregate of the original directors who were still in
office at the time of the election or nomination and the directors whose
election or nomination was previously so approved; or
(iv) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended). directly or indirectly, of securities of Cotelligent
representing at least 30% of the total voting power represented by Cotelligent's
then outstanding voting securities. For purposes of this Paragraph (iv), the
term "person" shall have the same meaning as when used in sections 13(d) and
14(d) of such Exchange Act but shall exclude:
(x) A trustee or other fiduciary holding securities under an
employee benefit plan of Cotelligent or a subsidiary of Cotelligent; and
(y) A corporation owned directly or indirectly by the
stockholders of Cotelligent in substantially the same proportions as their
ownership of the common stock of Cotelligent.
A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of Cotelligent's incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held Cotelligent's securities immediately before such transactions.
(f) Employee must be notified in writing by Cotelligent at any time if a
Change in Control becomes likely or probable.
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(g) Cotelligent shall pay to Employee an amount that, on an after-tax
basis (including federal income, employment, excise and social security taxes,
state and local income and employment taxes, and any other applicable taxes),
equals any excise tax that is determined to be payable by Employee pursuant to
Section 4999 (or any successor provision) of the Internal Revenue Code of 1986,
as amended (and any interest or penalties related to the imposition of such
excise tax) at any time, by reason of both entitlements under this Agreement
(including any and all payments under this Section 11(g)) and entitlements
outside of this Agreement that are described in Section 280G(b)(2)(A)(i) of the
Code (or any successor provision) with reference to Cotelligent. For purposes of
this Section 11(g), Employee shall be deemed to pay federal, state and local
income taxes at the highest marginal rate of taxation. Such amount will be made
payable by Cotelligent or its successor within ten (10) days after Employee
delivers a written request for reimbursement accompanied by a statement from a
nationally recognized legal, consulting or accounting firm as may be agreed to
by the parties setting forth the amount owed pursuant to this Section 11(g).
Cotelligent shall pay all fees and costs incurred by Employee releated to the
preparation, delivery and resolution of such written request for reimbursement.
12. 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.
13. Notice
Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:
To Cotelligent: Cotelligent, Inc.
00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
To Employee: Xxxxxx Xxxxxx
0000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Notice shall be deemed given upon personal delivery or 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
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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 Section 13.
14. Severability; Headings; Changes in Law
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 Section 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.
Any references in this Agreement to statutes, regulations, or other laws, or any
portion thereof, shall be deemed to include any amendments or succeeding
provisions.
15. 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 and other stock awards (or cash compensation in lieu of
vesting of options and other stock awards), reimbursement of costs, including
those incurred to enforce this Agreement, and interest thereon in the event the
arbitrators determine that Employee was terminated without good cause, as
defined in Section 4(a), 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.
16. Attorney's Fees
Cotteligent agrees that it shall be financially responsible for the payment
of any attorney's fees and related costs incurred by Employee in the course of
negotiating or preparing this Agreement (including any amendments, exhibits,
supplemental documents, related documents, or superceding agreements) or
subsequently in advising Employee of, or assisting Employee in the defense of,
his rights under this Agreement (including any amendments, exhibits,
supplemental documents, related documents, or superceding agreements).
17. Governing Law
This Agreement shall in all respects be construed according to the laws of
the State of California.
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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
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman, Chief Executive Officer &
President
EMPLOYEE:
/S/ Xxxxxx X. Xxxxxx
---------------------------------------------
Chief Financial Officer
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