Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") between Cotelligent, Inc.
("Cotelligent"), a Delaware corporation, and Xxxxxx Xxxxxx ('Employee") is
hereby entered into and effective as of April 1, 2000 (the "Effective Date").
This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between Cotelligent and Employee.
R E C I T A L S
The following statements are true and correct:
Cotelligent and its operating subsidiaries are engaged primarily in the
business of providing information technology consulting services. References
herein to "Cotelligent" are intended to include Cotelligent and its operating
subsidiaries, as may be applicable in the circumstances.
Employee will be employed hereunder by Cotelligent in a confidential
relationship wherein Employee, in the course of his employment with Cotelligent,
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 good will of 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) Cotelligent hereby employs Employee as Vice President, Professional
Services. As such, Employee shall have responsibilities, duties and authority
reasonably accorded to and expected of a Vice President, Professional Services
and will report directly to the President and Chief Executive Officer, or such
other senior executive as the President and Chief Executive Officer may appoint.
Additional or different duties, titles or positions, however, may be assigned to
Employee or may be taken from Employee from time to time by the President,
provided that any such changes are consistent and compatible with Employee's
experience, background and managerial skills and any new position is of equal or
higher level. 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 Cotelligent.
(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. The foregoing limitations 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
paragraph 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 $250,000 (two hundred and fifty thousand dollars) per year,
payable on a regular basis in accordance with Cotelligent's standard payroll
procedures but not less than monthly.
(b) Incentive Bonus Plan. Employee shall be eligible to receive an annual
bonus at the discretion of the Cotelligent Compensation Committee.
(c) Stock Options. Cotelligent has granted Employee a nonqualified option
to purchase 25,000 shares of the Company with an exercise price equal to 100% of
the fair market value of the underlying stock on the date of grant which shall
vest 25% a year beginning on the first anniversary of the date of grant.
(d) 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 Cotelligent executives.
(2) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of
his services
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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) Three (3) weeks paid vacation for each year (pro-rated for any
partial year).
(4) Cotelligent 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 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
Cotelligent, 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 Cotelligent (including its subsidiaries), within 100 miles
of where Cotelligent or where any of its subsidiaries conducts business
(the "Territory");
(ii) call upon any person who is, at that time, within 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;
(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 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; or
(iv) call upon any prospective acquisition candidate, on Employee's
own
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behalf or on behalf of any competitor in the computer consulting and
contract programming business, which candidate was either called upon by
Cotelligent (includes its subsidiaries) or for which Cotelligent (including
its subsidiaries) made an acquisition analysis, for the purpose of
acquiring such entity.
(v) 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 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 Cotelligent
(including its subsidiaries) as a result of a breach of the foregoing covenant,
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 covenant may be enforced by
Cotelligent (including its subsidiaries) 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 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 from such new location and from
directly competing with such new business 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 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
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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
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 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 Cotelligent
(including its subsidiaries), whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Cotelligent (including its
subsidiaries) 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.
(f) Employee shall not be deemed in violation of this paragraph 3 if he
becomes employed by the transferee entity in a "Divestiture" as defined in
paragraph 4(b) hereof.
4. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the Effective Date and continue on an at-will basis. This
Agreement and Employee's employment may be terminated in any one of the
followings ways:
(a) With 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
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 dishonesty, fraud
or misconduct with respect to the business or affairs of Cotelligent (including
its subsidiaries); (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.
(b) Without Good Cause. Employee will be entitled to a lump sum payment equal
to one (1) times the Employee's annual rate of base salary, as in effect on
the date of employment termination, if he is terminated without good cause
or quits with "good reason". In addition,
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any and all stock options which shall have been granted to Employee by
Cotelligent shall immediately vest without further action by Employee and
notwithstanding the terms of any such option grant. "Good Reason" means
Employee's position or duties have been materially diminished (excluding a
change in reporting relationship contemplated by paragraph 1(a)), his Base
Salary has been reduced or he is required to relocate outside of the Bay
Area. Notwithstanding the foregoing, Employee will not be entitled to
severance if he is terminated without good cause on or within the 45 days
preceding of the closing date of Cotelligent's transfer of all or a
significant portion of the stock or assets of Cotelligent's Professional
Services Division to a third party by merger, consolidation, acquisition,
sale, sale of securities or assets, exchange of assets, joint venture or
any other business combination transaction ("Divestiture").
(c) Voluntary Termination. At any time after the Effective Date, Employee may
terminate this Agreement effective thirty (30) days after written notice is
provided to Cotelligent. If Employee resigns or otherwise terminates his
employment without cause pursuant to this paragraph 4(c), Employee shall
receive no severance compensation.
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.
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 and material trade
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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. 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.
9. 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, 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.
10. 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 employment 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.
11. Notice. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To Cotelligent: Cotelligent, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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To Employee: Xx. Xxxxxx Xxxxxx
00 Xxx Xxxxxxx
Xxxxxx, XX 00000
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 10.
11. 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 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.
12. Arbitration. Any unresolved dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a 1 arbitrator 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 good cause or quit with good reason and is entitled to
severance, as provided in paragraph 3(b) or that Cotelligent has otherwise
materially breached this Agreement. A decision by the arbitrator shall be final
and binding. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by Cotelligent.
13. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of California.
14. 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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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COTELLIGENT, INC.
By: _________________________________
Its:_________________________________
EMPLOYEE:
By: _________________________________
Xxxxxx Xxxxxx
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