Exhibit 10.10
November 24, 2003
CONFIDENTIAL
Xxxxxx Xxxxxxx
[Home address]
Re: Termination of Employment with Cotelligent, Inc. and its Affiliates
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Dear Xxx:
This letter ("Letter Agreement") is intended to confirm the arrangements
regarding the termination of your employment relationship with Cotelligent Inc.
(the "Company") and its affiliates, as follows:
1. Termination Date. Your employment with the Company was terminated as of
August 15, 2003 (the "Termination Date"). You acknowledge that you have
been paid for all salary and unused vacation earned by you up to and
including the Termination Date.
2. Severance Benefits. Pursuant to the Amended and Restated Employment
Agreement between you and the Company, dated January 25, 2000, as amended
by the Compensation Committee on October 2, 2002 (the "Employment
Agreement"), the Company will provide you with the separation benefits
described below:
(a) Severance Pay. Subject to paragraph 4 below, you will receive a
lump-sum severance payment equal to $1,132,950.24 ("Severance Pay") as
soon as practicable following the Termination Date.
(b) COBRA. In the event you elect continuation coverage under COBRA as
described in paragraph 6 below, the Company will reimburse you for the
COBRA premiums you pay for continuation of your group health insurance
coverage for a period of up to 18 months.
(c) Stock Options. Any stock options that have been granted to you under
the Company's stock option plans that are not vested as of the
Termination Date will become accelerated and vested as of the
Termination Date.
3. Additional Payments and Benefits.
(a) Cash Payment. The Company agrees to pay you an additional amount of
$500,000, payable upon or as soon as practicable following the
Company's receipt of your written confirmation that you have not
revoked the your acceptance of this Letter Agreement within the
Revocation Period set forth in paragraph 7(c) below.
(b) Option Extension. The Company agrees to extend the exercisability of
your stock options until 12:01 AM November 15, 2005, subject to
earlier termination pursuant to the applicable plan document. You
agree that the following accurately represents all of your stock
options:
Grant Date Number of Shares Exercise Price
---------- ---------------- --------------
9/21/01 250,000 $ 0.25
(c) Conditions. Your right to receive, and if already made or provided, to
retain, the payments and benefits set forth in paragraphs 3(a) and (b)
are conditional upon: (i) your acceptance of the terms of this Letter
Agreement within the forty-five (45) day period set forth at the end
of this Letter Agreement and your nonrevocation of such within the
Revocation Period set forth in paragraph 7(c) of this Letter
Agreement, (ii) your continued compliance with the provisions of
paragraph 3 of the Employment Agreement, and (iii) you making yourself
available to the Company until August 15, 2004 to provide consulting
services or otherwise provide assistance to the Company, provided that
in no event shall you be required to provide services or other
assistance that would require a time commitment in excess of 10 hours
in any calendar month.
4. Repayment of Loans to the Company. The amount of your after-tax Severance
Pay as provided for in paragraph 2(a) will be reduced by a total of
$618,303, representing the unpaid balance of the relocation advance
received to you by the Company in 1996 as well as the unpaid principal and
interest of 5 additional loans made to you by the Company in 1999 (three
dated August 11, 1999, one dated September 30, 1999 and one dated November
23, 1999) to cover margin calls on your brokerage account.
5. LSPP. The Company reduced the principal and accrued interest on your note
to the Company dated October 1, 1999 (the "Note") used in connection with
the purchase of 736,842 shares of the Company's common stock (the "LSPP
Shares") under the Company's 1999 Leveraged Stock Purchase Plan (the
"LSPP") to $184,210.50 (the market value of the LSPP Shares on the
Termination Date), effective as of the
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Termination Date, with interest accruing on such amount after the
Termination Date at the rate set forth in the Note. The Note became payable
on October 15, 2003, 60 days following the Termination Date. In accordance
with the terms of the Note and related Pledge Agreement, the Company has,
on October 15, 2003, in satisfaction of the Note, perfected its security
interest in the LSPP Shares by taking possession of and legal title to such
shares.
6. Cessation of all other Compensation and Benefits. You have ceased to
actively participate in all Company benefit plans and programs as of the
Termination Date. Your vested account under the Company's 401(k) plan will
be distributed to you in accordance with the terms of the plan. Specific
information will be provided to you about your rights to elect continuation
coverage under COBRA and/or any applicable state statutes for the Company's
group health insurance plan. As noted in paragraph 2(b) above, the Company
will pay for your COBRA premiums for the entire 18 month period, provided
that you sign, without revocation this Letter Agreement within the
applicable time periods as described herein. Thereafter, under California
law, you are entitled to continue coverage under the group health insurance
plan for an additional 18 months, for a total of 36 months, at your own
expense. This additional coverage will end if you do not make monthly
premium payments or, it can end earlier if so provided by the statute.
7. Release.
(a) For good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, you hereby irrevocably and unconditionally
remise, release, waive and forever discharge the Company and Releasees
(as defined below) with respect to any and all claims, demands,
liabilities, actions, causes of action, suits, debts, charges,
complaints, obligations, promises, agreements, controversies, damages
and expenses (including attorneys' fees and costs actually incurred)
arising out of facts which occurred prior to the execution of this
Letter Agreement (other than those relating to the enforcement of the
terms of this Letter Agreement), including but not limited to any
claims arising from or in connection with your status as a stockholder
or your employment relationship with the Company or the severance of
that relationship, including but not limited to claims for breach of
contract, fraud or misrepresentation, and claims arising from any
alleged violation of any federal, state, or local statutes, ordinances
or common law, including but not limited to Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment
Act of 1967 ("ADEA"), as amended, the Worker Readjustment and
Retraining Notification Act of 1988, the Employee Retirement Income
Security Act of 1974 the Americans with Disabilities Act, the
California Fair Employment and Housing Act, and the California Labor
Code. Attached as Exhibit A to this Letter Agreement is the requisite
notice under the ADEA. For purposes of this Letter Agreement, the term
"the Company and Releasees" includes the Company, its direct or
indirect subsidiaries, insurers, direct or indirect corporate parents,
affiliates, its and
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their past, present and future predecessors, successors and assigns,
and its and their current, former and future officers, directors,
employees, representatives, agents, and attorneys, in their official
and/or individual capacities, jointly and individually.
(b) For the purposes of implementing a full and complete release and
discharge of claims, you expressly acknowledge that this Letter
Agreement is intended to include in its effect, without limitations,
all the claims described in the preceding paragraphs, whether known or
unknown, suspected or unsuspected, and that this Letter Agreement
contemplates the extinction of all such claims, including claims for
attorney's fees. You expressly waive any right to assert after the
execution of this Letter Agreement that any such claim, demand,
obligation, or cause of action has, through ignorance or oversight,
been omitted from the scope of the Letter Agreement. You expressly
waive any and all rights and benefits conferred upon you by the
provisions of Section 1542 of the Civil Code of California which
provides as follows:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor.
(c) You may revoke your acceptance of this offer within seven (7) days
after the date on which you sign this letter (the "Revocation
Period"). To be effective, your revocation must be in writing, signed
and dated no later than seven days from the date on which you signed
and dated your acceptance of this offer, and your written revocation
must be received by the Company by close of business on the seventh
day after the date on which you signed and dated the acceptance of
this offer. This Letter Agreement will not be effective or enforceable
unless and until the Revocation Period has expired without your having
exercised your right of revocation.
(d) This release in this paragraph 7 will not apply with respect to your
participation as a class member in any class action or derivative
action against the Company where you are not a named defendant. You
agree that you shall in no way initiate or encourage the initiation of
the filing of any action referred to in the preceding sentence.
8. Employment Agreement. You acknowledge that your Employment Agreement shall
be of no further force and effect; provided, however, that as provided in
paragraph 5 thereof, the provisions of paragraph 3 (Restrictive Covenants
(reduced to a period of 1 year following the Termination Date per paragraph
5(d) thereof)), 6 (Return of Company Property), 7 (Inventions), 8 (Trade
Secrets), 9 (Indemnification) and 10 (No Prior Agreements) shall remain in
effect in accordance with their terms.
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9. Entire Agreement. Except as expressly provided in paragraph 8 above, you
acknowledge that this Letter Agreement supersedes all previous and
contemporaneous communications, agreements and understandings, whether oral
or written, between you, on the one hand, and the Company or any of its
affiliates, on the other hand, including, but not limited to the Letter
Agreement dated September 30, 2003 provided to you by the Company, and
constitutes the sole and entire agreement between you and the Company
pertaining to the subject matter hereof.
10. Withholding. The Company shall have the right to withhold from any amount
payable to you hereunder an amount necessary in order for the Company to
satisfy any withholding tax obligation it may have under applicable law and
to the extent such obligations cannot be satisfied through withholding, you
agree to pay the Company the amount necessary to satisfy such obligations.
11. Notices. Any notice required or permitted to be given under this Letter
Agreement shall be in writing and given by hand delivery or by certified or
registered United States mail, postage prepaid, and shall be effective on
the date delivered by hand or mailed, in the case of the Company, to its
usual business address from time to time, and in your case, to your most
recent home address as shown on the records of the Company.
12. Severability. If any provision of this Letter Agreement is declared or
determined by any court to be illegal or invalid, validity of the remaining
parts, terms or provisions shall not be affected thereby and said illegal
or invalid part, term or provision shall be deemed not to be a part of this
Letter Agreement.
13. Miscellaneous; Choice of Law. This Letter Agreement may be executed in
several counterparts, each or which shall be deemed to be an original but
all of which together will constitute one and the same instrument. This
Letter Agreement constitutes the entire agreement, and supersedes all prior
agreements, of the parties hereto relating to the subject matter hereof,
except for those terms of your Employment Agreement which continue beyond
the Termination Date, and there are no written or oral terms or
representations made by either party other than those contained herein and
therein. This Letter Agreement cannot be modified, altered or amended
except by a writing signed by all the parties. No waiver by either party of
any provision or condition of this Letter Agreement at any time shall be
deemed a waiver of such provision or condition at any prior or subsequent
time or of any provision or condition at the same or any prior or
subsequent time. This Letter Agreement shall be governed by and construed
in accordance with the domestic laws of the State of California, without
giving effect to any choice of law or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of California.
14. Acknowledgement.
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(a) You acknowledge that you are fully aware of your right to discuss any
and all aspects of this matter with an attorney of your choice, that
the Company has advised you of that right, that you have carefully
read and fully understand all of the provisions of this Letter
Agreement and that you are voluntarily entering into this Letter
Agreement.
(b) By signing this Letter Agreement, you acknowledge and agree that: (1)
you are fully aware of your right to discuss any and all aspects of
this matter with an attorney of your choice, and that the Company has
advised you of that right; (2) entered into this Letter Agreement
knowingly and voluntarily; (3) you have carefully read and understand,
the entire Letter Agreement (including the information in Attachment
A); and (4) the Company has provided you with information in writing
(see Attachment A) about: (i) the class, unit or group covered by the
offer of an opportunity to enter into an agreement and release in
exchange for severance benefits; (ii) the eligibility factors for the
offer of an opportunity to enter into an agreement and release in
exchange for severance payments; (iii) any time limits applicable to
the offer of an opportunity to enter into an agreement and release in
exchange for severance benefits; (iv) the job titles and ages of all
individuals who are eligible for the opportunity to enter into an
agreement and release in exchange for severance benefits; and (v) the
job titles and ages of all individuals who are not eligible for the
opportunity to enter into an agreement and release in exchange for
severance benefits.
Please indicate your acceptance to the terms of this Letter Agreement by
returning a signed and dated copy no later than 46 days from the date you
received it.
Sincerely,
COTELLIGENT, INC.
/s/ Xxxxx Xxxxxxx
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By:
ACCEPTED AND AGREED:
Signed: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Date: November 25, 2003
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