Exhibit 10.13
EMPLOYMENT AGREEMENT
---------------------
THIS EMPLOYMENT AGREEMENT is made this 10th day of February, 1998, between
Computer Hardware Maintenance Company, Inc., a Pennsylvania corporation (the
"Company"), and Xxxxxxx Xxxxxxxxxxxx (the "Executive").
WHEREAS, the Executive is currently employed by the Company; and
WHEREAS, as a result of the proposed business combination pursuant to that
certain Agreement and Plan of Organization among Condor Technology Solutions,
Inc. ("Condor"), its acquisition subsidiary, the Company and its stockholders
(the "Business Combination"), the Company will become a wholly-owned
subsidiary of Condor; and
WHEREAS, the parties hereto wish to enter into an employment agreement to
employ the Executive as the President and Chief Executive Officer of the
Company following the Business Combination, and to set forth certain
additional agreements between the Executive and the Company.
NOW, THEREFORE, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:
1. TERM.
The Company will employ the Executive, and the Executive will serve the
Company, under the terms of this Agreement for an initial term of three (3)
years, commencing on the closing date of Condor's initial public offering of
Common Stock (which also is intended to be the effective date of the Business
Combination). Effective as of the expiration of such initial three-year term
and as of each anniversary date thereof, the term of this Agreement shall be
extended for an additional 12-month period unless, not later than two months
prior to each such respective date, either party shall have given notice to
the other party that the term shall not be so extended. Notwithstanding the
foregoing, the Executive's employment hereunder may be earlier terminated, as
provided in Section 4 hereof. The term of this Agreement, as in effect from
time to time in accordance with the foregoing, shall be referred to herein as
the "Term." The period of time between the commencement and the termination
of the Executive's employment hereunder shall be referred to herein as the
"Employment Period."
2. EMPLOYMENT.
(a) POSITION AND REPORTING. The Company hereby employs the Executive for
the Employment Period as its President and Chief Executive Officer on the
terms and conditions set
1
forth in this Agreement.
(b) AUTHORITY AND DUTIES. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such
responsibilities as are reasonably associated with the Executive's position,
commensurate with the authority vested in the Executive's position, pursuant
to this Agreement and consistent with the By-Laws of the Company. Without
limiting the generality of the foregoing, the Executive shall report directly
and be responsible to the President and Chief Executive Officer of Condor and
the Board of Directors of the Company (the "Board"). During the Employment
Period, the Executive shall devote his full business time, skill and efforts
to the business of the Company. Notwithstanding the foregoing, the Executive
may (i) make and manage passive personal business investments of his choice
(in the case of publicly-held corporations, not to exceed one percent (1%) of
the outstanding voting stock) and serve in any capacity with any civic,
educational or charitable organization, or any trade association, without
seeking or obtaining approval by the Board, provided such activities and
service do not materially interfere or conflict with the performance of his
duties hereunder and (ii) with the approval of the Board, which shall not be
unreasonably be withheld, serve on the boards of directors of other
corporations.
3. COMPENSATION AND BENEFITS.
(a) SALARY. During the Employment Period, the Company shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $220,000 per annum,
payable in arrears not less frequently than monthly in accordance with the
normal payroll practices of the Company. Such base salary shall be subject to
review each year for possible increase by the Board of the Company, but shall
in no event be decreased from its then-existing level during the Employment
Period.
(b) ANNUAL BONUS. During the Employment Period, the Executive shall have
the opportunity to earn an annual bonus in accordance with an annual bonus
program to be established by the Board of Directors of Condor for senior
executives of Condor and its subsidiaries, including the Company. The payment
of any annual bonus under any such program shall be contingent upon the
achievement of certain corporate and/or individual performance goals
established by the Board of Directors of Condor in its discretion and shall
not exceed an amount equal to the Executive's base salary.
(c) OTHER BENEFITS. During the Employment Period, the Executive shall be
entitled to participate in all of the employee benefit plans, programs and
arrangements in effect during the Employment Period that are generally
available to senior executives of the Company, subject to and on a basis
consistent with the terms, conditions and overall administration of such
plans, programs and arrangements. In addition, during the Employment Period,
the Executive shall be entitled to fringe benefits and perquisites comparable
to those of other senior executives of the Company, including, but not
limited to, four (4) weeks of paid vacation per year.
2
(d) BUSINESS EXPENSES. During the Employment Period, the Company shall
reimburse the Executive for all documented reasonable business expenses
incurred by the Executive in the performance of his duties under this
Agreement, in accordance with the Company's policies.
(e) INDEMNIFICATION. During the Employment Period and thereafter, the
Company or Condor shall indemnify the Executive to the fullest extent
permitted by applicable law, and the Executive shall be entitled to the
protection of any insurance policies the Company or Condor may elect to
maintain generally for the benefit of the directors and officers of the
Company, with respect to all costs, charges and expenses, including
attorneys' fees, whatsoever incurred or sustained by the Executive in
connection with any action, suit or proceeding (other than any action, suit
or proceeding brought by or in the name of the Company or Condor against the
Executive) to which he may be made a party by reason of being or having been
a director, officer or employee of the Company or Condor or his serving or
having served any other enterprise as a director, officer or employee at the
request of the Company or Condor.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE. The Company may terminate the Executive's
employment hereunder for cause. For purposes of this Agreement and subject to
the Executive's opportunity to cure as provided in Section 4 (c) hereof, the
Company shall have "cause" to terminate the Executive's employment hereunder
if such termination shall be the result of:
(i) willful fraud or dishonesty in connection with the Executive's
performance hereunder that results in material harm to the Company or
Condor;
(ii) the failure by the Executive to substantially perform his
duties hereunder that results in material harm to the Company or Condor; or
(iii) the conviction for, or plea of NOLO CONTENDERE to, a charge of
commission of a felony.
(b) TERMINATION FOR GOOD REASON. The Executive shall have the right at
any time to terminate his employment with the Company at any time and for any
good reason. For purposes of this Agreement and subject to the Company's
opportunity to cure as provided in Section 4 ( c) hereof, the Executive shall
have "good reason" to terminate his employment hereunder if such termination
shall be the result of:
(i) a material diminution during the Employment Period in the
Executive's duties or responsibilities as set forth in Section 2 hereof;
3
(ii) a material breach by the Company of the compensation and
benefits provisions set forth in Section 3 hereof;
(iii) a notice of termination by the Executive under Section 4 (c)
hereof within 12 months following the occurrence of a Change in Control
(as defined in Section 4 (e) hereof);
(iv) a material breach by the Company of any other term of this
Agreement; or
(v) Condor shall cause the Company, without the consent of the
Executive, to relocate the Executive's principal work location to an
area which is more than 50 miles outside the greater Langhorne,
Pennsylvania area.
(c) NOTICE AND OPPORTUNITY TO CURE. Notwithstanding the foregoing, it
shall be a condition precedent to the Company's right to terminate the
Executive's employment for "cause" and the Executive's right to terminate his
employment for "good reason" that (1) the party seeking the termination shall
first have given the other party written notice stating with specificity the
reason for the termination ("breach"); (2) if the Executive is terminated for
"cause," the Company provides the Executive an opportunity to appear before
the Board to answer such grounds for termination; and (3) if such breach is
susceptible of cure or remedy, a period of 30 days from and after the giving
of such notice shall have elapsed without the breaching party having
effectively cured or remedied such breach during such 30-day period, unless
such breach cannot be cured or remedied within 30 days, in which case the
period for remedy or cure shall be extended for a reasonable time (not to
exceed an additional 30 days), provided the breaching party has made and
continues to make a diligent effort to effect such remedy or cure.
(d) TERMINATION UPON DEATH OR PERMANENT AND TOTAL DISABILITY. The
Employment Period shall be terminated by the death of the Executive. The
Employment Period may be terminated by the Company if the Executive shall be
rendered incapable of performing his duties to the Company by reason of a
"disability," defined as either (i) any medically determined physical or
mental impairment that can be expected to result in death or that can be
expected to last for a period of six or more consecutive months from the
first date of the Executive's absence, or (ii) due to a total and permanent
"disability" that can be expected to last for a period of six or more
consecutive months from the first date of the Executive's absence, as such
term is defined in the Company's long term disability insurance policy or
contract as may be in effect from time to time for the benefit of employees
of the Company (either, a "Disability"). If the Employment Period is
terminated by reason of a Disability of the Executive, the Company shall give
30 days' advance written notice to that effect to the Executive. If the
existence of a Disability hereunder is in dispute, it shall be resolved by
two physicians, one appointed by the Executive and one appointed by the
Company. If the two physicians
4
so selected cannot agree as to whether or not the Executive has a Disability,
the two physicians so selected shall designate a third physician and a
majority of the three physicians so selected shall determine whether or not
the Executive has a Disability.
(e) DEFINITION OF CHANGE IN CONTROL. A "Change in Control" shall be
deemed to have occurred if:
(i) there shall be consummated any consolidation or merger of Condor in
which Condor is not the continuing or surviving corporation or pursuant to
which shares of Condor's capital stock are converted into cash, securities or
other property other than a consolidation or merger of Condor in which the
holders of Condor's voting stock immediately prior to the consolidation or
merger shall, upon consummation of the consolidation or merger, own at least
50% of the voting stock of the surviving corporation, or any sale, lease,
exchange or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of Condor; or
(ii) any person (as such term is used in Sections 13(d) and 14 (d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") ) shall
after the date hereof become the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of securities of
Condor representing 35% or more of the voting power of all then outstanding
securities of Condor having the right under ordinary circumstances to vote in
an election of the Board (including, without limitation, any securities of
Condor that any such person has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options, or
otherwise, which shall be deemed beneficially owned by such person); or
(iii) individuals who at the date hereof constitute the entire Board and
any new directors whose election by the Board, or whose nomination for
election by Condor's stockholders, shall have been approved by a vote of at
least a majority of the directors then in office who either were directors at
the date hereof or whose election or nomination for election shall have been
so approved (the "Continuing Directors") shall cease for any reason to
constitute a majority of the members of the Board; or
(iv) the sale by Condor of the majority of the capital stock of the
Company or all or substantially all of the assets of the Company, or the
liquidation or dissolution of the Company.
5. CONSEQUENCES OF TERMINATION.
(a) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. In the event of
termination of the Executive's employment hereunder by the Company without
"cause" (other than upon death or Disability) or by the Executive for "good
reason" (each as defined in Section 4 hereof), the Executive shall be
entitled to the following severance pay and benefits:
5
(i) SEVERANCE PAY - severance payments in the form of continuation of
the Executive's base salary as in effect immediately prior to such
termination over the longer of: (A) the then-remaining Term hereof; or (B) 12
months (the "Severance Period").
(ii) BENEFITS CONTINUATION - continuation for the Severance
Period of coverage under the group medical care, disability and life
insurance benefit plans or arrangements in which the Executive is
participating at the time of termination; PROVIDED, HOWEVER, that the
Company's obligation to provide such coverages shall be terminated if
the Executive obtains comparable substitute coverage from another
employer at any time during the Severance Period. The Executive shall
be entitled, at the expiration of the Severance Period, to elect
continued medical coverage in accordance with section 4980B of the
Internal Revenue Code of 1986, as amended (or any successor provision
thereto); and
(iii) STOCK OPTIONS - all options to purchase shares of
Condor's Common Stock held by the Executive immediately prior to
termination of employment shall become immediately vested and
exercisable and, subject to the terms of Condor's 1997 Long-Term
Incentive Plan, shall remain exercisable for the duration of the
Severance Period.
(b) OTHER TERMINATIONS. In the event of termination of the Executive's
employment hereunder for any reason other than those specified in Section
5(a) hereof, the Executive shall not be entitled to any severance pay,
benefits continuation or stock option rights contemplated by the foregoing,
except as may otherwise be provided under the applicable benefit plans or
award agreements relating to the Executive.
(c) ACCRUED RIGHTS. Notwithstanding the foregoing provisions of this
Section 5, in the event of termination of the Executive's employment
hereunder for any reason, the Executive shall be entitled to payment of any
unpaid portion of his base salary through the effective date of termination,
and payment of any accrued but unpaid rights solely in accordance with the
terms of any incentive bonus, stock option or employee benefit plan or
program of the Company.
6. CONFIDENTIALITY.
The Executive agrees that he will not at any time during the Term hereof or
at any time thereafter for any reason, in any fashion, form or manner, either
directly or indirectly, divulge, disclose or communicate to any person, firm,
corporation or other business entity, in any manner whatsoever, any
confidential information or trade secrets concerning the business of the
Company or Condor, including, without limiting the
6
generality of the foregoing, the techniques, methods or systems of its
operation or management, any information regarding its financial matters, or
any other material information concerning the business of the Company or
Condor, its manner of operation, its plans or other material data. The
provisions of this Section 6 shall not apply to (i) information that is
public knowledge other than as a result of disclosure by the Executive in
breach of this Section 6; (ii) information disseminated by the Company or
Condor to third parties in the ordinary course of business; (iii) information
lawfully received by the Executive from a third party who, based upon inquiry
by the Executive, is not bound by a confidential relationship to the Company
or Condor; or (iv) information disclosed under a requirement of law or as
directed by applicable legal authority having jurisdiction over the Executive.
7. INVENTIONS.
The Executive is hereby retained in a capacity such that the Executive's
responsibilities include the making of technical and managerial contributions
of value to Company or Condor. The Executive hereby assigns to the Company
all right, title and interest in such contributions and inventions made or
conceived by the Executive alone or jointly with others during the Employment
Period that relate to the business of the Company or Condor. This assignment
shall include (a) the right to file and prosecute patent applications on such
inventions in any and all countries, (b) the patent applications filed and
patents issuing thereon, and (c) the right to obtain copyright, trademark or
trade name protection for any such work product. The Executive shall promptly
and fully disclose all such contributions and inventions to the Company and
assist the Company and Condor in obtaining and protecting the rights therein
(including patents thereon) in any and all countries; PROVIDED, HOWEVER, that
said contributions and inventions will be the property of the Company,
whether or not patented or registered for copyright, trademark or trade name
protection, as the case may be. The Executive hereby agrees to execute any
documentation requested by the Company or Condor to be so executed if such
request is made in order to carry out the purpose and terms of this
paragraph. Inventions conceived by the Executive that are not related to the
business of the Company or Condor will remain the property of the Executive.
8. NON-COMPETITION.
The Executive agrees that he shall not during the Employment Period and, if
applicable, the Severance Period, without the approval of the Board, directly
or indirectly, alone or as partner, joint venturer, officer, director,
employee, consultant, agent, independent contractor or stockholder (other
than as provided below) of any company or business, engage in any
"Competitive Business" within the United States. For purposes of the
foregoing, the term "Competitive Business" shall mean any business involved
in providing information technology solutions, including, but not limited to,
desktop services, software development, systems design and integration, large
scale survey research, recruiting and comprehensive marketing and sales,
which is in direct competition with the Company or Condor in any community in
which the
7
Company or Condor is doing business. Notwithstanding the foregoing, the
Executive shall not be prohibited during the non-competition period
applicable above from acting as a passive investor where he owns not more
than one percent (1%) of the issued and outstanding capital stock of any
publicly-held company. During the period that the above non-competition
restriction applies, the Executive shall not, without the written consent of
Condor, solicit or encourage any employee of the Company or Condor or any
current or future subsidiary or affiliate thereof to terminate his or her
employment.
9. BREACH OF RESTRICTIVE COVENANTS.
The parties agree that a breach or violation of Section 6, 7 or 8 hereof will
result in immediate and irreparable injury and harm to the innocent party,
which party shall have, in addition to any and all remedies of law and other
consequences under this Agreement, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the
obligation hereunder.
10. NOTICES.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to the Company, to:
COMPUTER HARDWARE MAINTENANCE COMPANY, INC.
0000 XXXXX XXXXXXXXX XXXX
X.X. XXX 0000
XXXXXXXXX, XX 00000-0000
(b) If to the Executive, to:
XXXXXXX XXXXXXXXXXXX
0000 XXXXXXXX XXXX
XXXXXXX, XX 00000
or to such other address as a party hereto shall designate to the other party
by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.
8
11. ARBITRATION: LEGAL FEES.
Except as provided in Section 9 hereof, any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in McLean, Virginia in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The Company shall
reimburse the Executive for all reasonable legal fees and costs and other
fees and expenses that the Executive may incur in respect of any dispute or
controversy arising against the Company under or in connection with this
Agreement; PROVIDED, HOWEVER, that the Company shall not reimburse any such
fees, costs and expenses if the fact finder determines that an action brought
by the Executive was substantially without merit or the Executive is
otherwise unsuccessful in such an action.
12. WAIVER OF BREACH.
Any waiver of any breach of the Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part of either
the Executive or of the Company.
13. NON-ASSIGNMENT: SUCCESSORS.
Neither party hereto may assign his or its rights or delegate his or its
duties under this Agreement without the prior written consent of the other
party; PROVIDED, HOWEVER, that (i) subject to the rights of the Executive
under Section 4(b) hereof, this Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the Company upon any sale of
all or substantially all of the assets of the Company, or upon any merger,
consolidation or reorganization of the Company with or into any other
corporation, all as though such successors and assigns of the Company and
their respective successors and assigns were the Company; (ii) this Agreement
shall inure to the benefit of and be binding upon the heirs, assigns or
designees of the Executive to the extent of any payments due to the Executive
hereunder; and (iii) this Agreement shall inure to the benefit of Condor. As
used in this Agreement, the term "Company" shall be deemed to refer to any
such successor or assign or the Company referred to in the preceding sentence.
14. WITHHOLDING OF TAXES.
All payments required to be made by the Company to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any,
relating to tax, and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
15. SEVERABILITY.
To the extent any provision of this Agreement or portion thereof shall be
invalid or
9
unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
16. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
17. GOVERNING LAW.
This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the State of Virginia.
18. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement by the Company and the
Executive with respect to the subject matter hereof and supersedes any and
all prior agreements or understandings between the Executive and the Company
with respect to the subject matter hereof, whether written or oral. This
Agreement may be amended or modified only by a written instrument executed by
the Executive and the Company.
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of
February 4., 1998.
COMPUTER HARDWARE MAINTENANCE
COMPANY, INC.
By:
--------------------------
Name:
Title:
THE EXECUTIVE
/s/ Xxxxxxx Xxxxxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
11
