Exhibit 10.4
MTM TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made this 21st day of
May, 2004 by and between MTM Technologies, Inc., a New York corporation (the
"Company"), and Xxxxxx X. Xxxxxxx (the "Executive").
WHEREAS, the parties hereto have previously entered into an employment
agreement to employ the Executive dated September 1, 1996, as most recently
amended through September 1, 2002;
WHEREAS, the parties hereto wish to enter into a new employment
agreement to employ the Executive as Executive Vice President of the Company and
to set forth the terms and conditions of such employment; and
WHEREAS, in connection with the execution of this Agreement, the
Executive and the Company have entered into a side letter agreement (attached
hereto as Exhibit A) providing for (i) a monthly automobile allowance in the
amount of $1,800 to be paid by the Company to the Executive for the period
specified therein, and (ii) the assignment of a term life insurance policy on
the life of the Executive and currently owned by the Company, and any cash
surrender value thereon, to the Executive.
NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, and for other good and valuable consideration
the receipt and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment Period.
The Company hereby employs the Executive, and the Executive agrees to
serve the Company, under the terms of this Agreement for a term of three (3)
years (the "Initial Term") commencing as of the date of this Agreement (the
"Commencement Date"). Notwithstanding the foregoing, the Executive's employment
hereunder may be earlier terminated, subject to Section 4 hereof. On each
anniversary of the Commencement Date following the Initial Term, the term of
this Agreement shall automatically be extended for an additional period of
twelve (12) months; provided, however, that either party hereto may elect not to
extend this Agreement by giving written notice to the other party at least
twelve (12) months prior to any such anniversary date. The Initial Term and any
renewal periods thereafter, until the termination of the Executive's employment
hereunder, shall be referred to herein as the "Employment Period."
2. Duties and Status.
The Company hereby engages the Executive as Executive Vice President
of the Company on the terms and conditions set forth in this Agreement. During
the Employment Period, the Executive shall report directly to the Chief
Executive Officer of the Company and exercise such authority, perform such
executive duties and functions and discharge such executive responsibilities as
are reasonably associated with the Executive's position, consistent
with the responsibilities assigned to officers of companies comparable to the
Company, commensurate with the authority vested in the Executive pursuant to
this Agreement and consistent with the By-laws of the Company. The Executive's
primary duty shall be mergers and acquisitions integration. During the
Employment Period, the Executive shall devote substantially all of his business
time and his full skill and efforts to the business of the Company.
3. Compensation; Benefits and Expenses.
(a) Salary. Subject to this Section 3(a), 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 $265,000 per annum, payable in arrears not less frequently than
monthly in accordance with the normal payroll practices of the Company for its
executive officers. The Executive's base salary shall be subject to review each
year for possible increase by the Board of Directors of the Company (the
"Board") in its sole discretion , but in no event shall such base salary be
decreased from its then existing level during the Employment Period.
(b) Annual Bonus. In addition to the base salary payable to the
Executive hereunder, the Executive also shall be entitled to receive additional
compensation, at such times and in such amounts, as shall be determined in the
sole discretion of the Board and the Compensation Committee thereof in
consultation with the Executive, consistent with the management bonus plan of
the Company in effect from time to time for senior executives, if any.
(c) Stock Options. The Executive shall be entitled to receive awards
under any stock option or equity based incentive compensation plan or
arrangement adopted by the Company during the Employment Period for which senior
executives are eligible. The level of the Executive's participation in any such
plan or arrangement shall be determined in the sole discretion of the Board and
the Compensation Committee thereof in consultation with the Executive.
(d) Vacation and Sick Leave. The Executive shall be entitled to five
(5) weeks paid vacation time per calendar year and such paid sick leave as is in
accordance with the normal Company policies and practices in effect from time to
time for senior executives; provided, however, that no more than two weeks of
such vacation time may be used consecutively, and provided, further, that any
accrued but unused vacation time and paid sick leave remaining at the end of
each calendar year shall be forfeited.
(e) Other Benefits. During the Employment Period, the Executive shall
be entitled to participate in all of the employee benefit plans, programs and
arrangements of the Company in effect during the Employment Period which are
generally available to the most senior executives of the Company (including,
without limitation, 401(k) and group medical insurance plans), subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans, programs and arrangements.
(f) Signing Bonus. In addition to any other payments to the Executive
under this Agreement, the Executive shall be paid a fee of $300,000 for entering
into this Agreement, which shall be paid as follows: (i) $100,000 upon the
execution of this Agreement, and (ii)
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$200,000 to be deposited into a "rabbi trust" (substantially in the form
attached hereto as Exhibit B) and paid to the Executive in $100,000 increments
on each of the first and second anniversaries of the date of the this Agreement,
provided that, the Executive's employment has not been terminated by the Company
for "cause," as defined in Section 4(a) hereof (except as provided in the
following sentence), or by the Executive without "good reason," as defined in
Section 4(b) hereof, as of each respective anniversary date. Solely for the
purposes of the proviso in the preceding sentence, the term "cause" shall
exclude the events described in Section 4(a)(iv) hereof, provided that, such
conviction or plea (i) shall not be in connection with the Executive's
performance of his duties hereunder and (ii) shall not materially injure the
Company or adversely affect its reputation. Any termination of the Executive's
employment due to death or Permanent and Total Disability (as defined in Section
4(d) hereof) shall in no manner effect the Company's or the rabbi trust's
obligation to make payments due to the Executive under this Section 3(f).
(g) Non-Compete Payment. As additional consideration for the Executive
potentially limiting his future employment opportunities and compensation by
agreeing to the non-competition provisions of Section 7(d) of this Agreement,
the Executive will receive an additional payment of $300,000 upon the execution
of this Agreement.
(h) Expenses. In addition to any amounts payable to the Executive
pursuant to this Section 3, the Company shall reimburse the Executive upon
production of accounts and vouchers or other reasonable evidence of payment by
the Executive, all in accordance with the Company's regular procedures in effect
from time to time, all reasonable and ordinary expenses as shall have been
incurred by him in the performance of his duties hereunder.
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) the Executive's failure to substantially perform his services
hereunder which results in material harm to the Company, including the
failure to comply in any material manner with the policies and rules of the
Company or the directives of the Chief Executive Officer of the Company; or
(ii) the Executive's performance of any material act of fraud or
dishonesty in connection with the performance of his duties hereunder; or
(iii) the Executive's gross negligence or willful misconduct in the
performance of his duties hereunder; or
(iv) the Executive's conviction for, or plea of nolo contendere to, a
felony or misdemeanor resulting in a jail sentence or any crime involving
moral turpitude; or
(v) any material breach by the Executive of the obligations set forth
below in Section 7.
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(b) Termination for Good Reason. The Executive shall have the right at
any time to terminate his employment with the Company for any 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 reduction by the Company of the Executive's base salary; or
(ii) a material diminution during the Employment Period in the
Executive's duties or responsibilities, as set forth in Section 2 hereof;
or
(iii) the relocation, without the Executive's prior written consent,
of the Executive's principal work location beyond 50 miles from its current
location.
(c) Notice and Opportunity to Cure. Notwithstanding the provisions of
Sections 4(a) and 4(b) hereof, 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 reasonable specificity the reason for the termination
("breach") and (2) if such breach is susceptible of cure or remedy, a period of
thirty 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 thirty
days, in which case the period for remedy or cure shall be extended for a
reasonable time (not to exceed an additional thirty days) provided the breaching
party has made and continues to make a diligent effort to effect such remedy or
cure. Notwithstanding anything to the contrary contained herein, the right to
cure set forth in this Section 4(c) shall not apply if there are habitual or
repeated breaches by either party.
(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 Board if the Executive shall be
rendered incapable of performing his duties to the Company by reason of any
medically determined physical or mental impairment for a period of either (i)
six (6) or more consecutive months from the first date of the Executive's
absence due to the disability or (ii) nine (9) months during any eighteen (18)
month period (a "Permanent and Total Disability"). If the Employment Period is
terminated by reason of Permanent and Total Disability of the Executive, the
Company shall give 30 days' advance written notice to that effect to the
Executive. Until the effective date of the termination as a result of a
Permanent and Total Disability, the Company shall continue to pay to the
Executive the compensation set forth in Section 3 hereof; provided, however,
that to the extent that the Executive receives payments pursuant to any
disability insurance policy for which the Company pays the premium, the Company
may deduct the amounts received by the Executive pursuant to that policy from
the compensation payable to him.
5. Consequences of Termination.
(a) Without Cause or for Good Reason. In the event of a termination of
the Executive's employment during the Employment Period by the Company other
than for "cause"
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(as provided for in Section 4(a) hereof) or by the Executive for "good reason"
(as provided for in Section 4(b) hereof) or as a result of death or Permanent
and Total Disability (as provided for in Section 4(d) hereof), the Company shall
provide to the Executive (or his legal representative) (i) the rights, payments
and benefits payable at such times as set forth herein, and (ii) a release and
waiver of claims in favor of the Executive, substantially in the form attached
hereto as Exhibit C, as consideration for the execution and non-revocation by
the Executive of a release agreement in favor of the Company and its
shareholders and their respective directors, officers and employees,
substantially in the form attached hereto as Exhibit D:
(i) Salary. A continuance of his salary at one hundred percent (100%)
of his then current base salary, as a severance payment, for a period equal
to the greater of (i) one (1) year from the date of termination of the
Executive's employment or (ii) the period ending on the last day of the
Initial Term (the "Severance Period"). The Executive, in his sole
discretion, shall have the right to demand and receive such severance
payments as a single, lump-sum cash payment. Any payments pursuant to this
Section 5(a)(i) shall be in lieu of any other severance benefits to which
the Executive is entitled pursuant to any other severance plans, programs,
arrangements, or policies of the Company.
(ii) Options. The impact of the Executive's termination of employment
on the stock options held by the Executive (including, without limitation,
the maximum period that any such option shall remain exercisable) shall be
governed by the applicable stock option plan and agreement. Notwithstanding
the foregoing, any stock options granted to the Executive on or after the
Commencement Date shall provide that, upon termination of the Executive's
employment by the Company other than for "cause" (as provided for in
Section 4(a) hereof) or by the Executive for "good reason" (as provided for
in Section 4(b) hereof), any unvested shares subject to such options shall
become fully vested and immediately exercisable in connection with such
termination.
(iii) Other Benefits. During the Severance Period, the Executive will
be entitled to a continuance of any applicable automobile allowance
arrangement on the same basis as the Executive was entitled to participate
immediately prior to the Severance Period. In addition, should the
Executive elect COBRA health care continuation coverage in connection with
a termination covered under this Section 5(a), he shall pay for such COBRA
coverage at the rate, as in effect from time, that actively-employed
executives of the Company pay for medical coverage and the Company shall be
responsible for the remainder of the COBRA premium. If the Severance Period
exceeds the period during which the Executive receives COBRA coverage, the
Company shall pay the Executive a monthly cash allowance equal to the rate,
as in effect from time to time, that the Company contributes towards the
medical coverage for actively-employed executives of the Company. In the
event that the Executive is covered under substitute benefit plans of
another employer prior to the expiration of the Severance Period, the
Company will no longer be obligated to continue the respective coverages
provided for in this Section 5(a)(iii).
(b) Other Termination of Employment. In the event that the Executive's
employment with the Company is terminated during the Employment Period by the
Company for
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"cause" (as provided for in Section 4(a) hereof), or by the Executive other than
for "good reason" (as provided for in Section 4(b) hereof), the Company shall
pay the Executive (or his legal representative) any earned but unpaid salary
amounts and any unreimbursed expenses through the Executive's final date of
employment with the Company, and the Company shall have no further obligations
to the Executive, except under the plans, programs and arrangements described in
Section 3(e) hereof in accordance with the terms of such plans.
(c) 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, excise tax and other
payroll deductions as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation.
(d) No Other Obligations. The benefits payable to the Executive under
this Agreement are not in lieu of any benefits payable under any employee
benefit plan, program or arrangement of the Company, except as provided
specifically herein, and upon termination, the Executive will receive such
benefits or payments, if any, as he may be entitled to receive pursuant to the
terms of such plans, programs and arrangements. Except for the obligations of
the Company provided by this Agreement (including, without limitation, pursuant
to the preceding sentence hereof), the Company shall have no further obligations
to the Executive upon his termination of employment.
(e) Reduction for "Parachute Payments". Notwithstanding anything in
this Agreement to the contrary, any amounts payable hereunder to the Executive
in connection with a change in control, as well as any other "parachute
payments," as such term is defined under Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), payable under any other plans, agreements
or policies of the Company, shall be reduced to the extent necessary to assure
that the Executive does not become subject to the excess parachute payment
excise tax under Section 4999 of the Code and the Company does not lose all or
part of its compensation deduction for such payments.
6. Indemnity.
The Company shall, during his employment with the Company and
thereafter, indemnify the Executive to the fullest extent permitted by law and
by its Certificate of Incorporation and By-laws and shall assure that the
Executive is covered by the Company's directors' and officers' insurance
policies and any other insurance policies that protect employees, as in effect
from time to time.
7. Restrictive Covenants.
(a) Proprietary Information.
(i) The Executive agrees that all information and know-how, whether or
not in writing, of a private, secret or confidential nature concerning the
business or financial affairs of the Company or any of the Company's
Affiliates is and shall be the exclusive property of the Company or the
Company's Affiliates. Such information and know-how shall include, but not
be limited to, inventions, products, processes, methods, techniques,
formulas, compositions, compounds, projects, developments, plans, research
data,
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clinical data, financial data, personnel data, computer programs, and
customer and supplier lists (collectively, "Proprietary Information.").
Except in connection with, and on a basis consistent with, the performance
of his duties hereunder, the Executive shall not disclose any Proprietary
Information to others outside the Company or the Company's Affiliates or
use the same for any unauthorized purposes without written approval by the
Board, either during or after the Employment Period.
(ii) The Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings,
customer lists, customer solicitations or other written, photographic, or
other tangible material containing Proprietary Information, whether created
by the Executive or others, which shall come into his custody or
possession, shall be and are the exclusive property of the Company or the
Company's Affiliates to be used by the Executive only in the performance of
his duties for the Company. The Executive agrees to deliver to the Company
upon the expiration of the Employment Period such material containing
Proprietary Information.
(iii) The Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (i)
and (ii) above, also extends to such types of information, know-how,
records and tangible property of customers of the Company or the Company's
Affiliates or suppliers to the Company or the Company's Affiliates or other
third parties who may have disclosed or entrusted the same to the Company
or the Company's Affiliates or to the Executive in the course of the
Company's business.
(iv) Notwithstanding the foregoing, such Proprietary Information shall
not include information which (A) is or becomes generally available or
known to the public, other than as a result of any disclosure by the
Executive in violation hereof; or (B) is or becomes available to the
Executive on a non-confidential basis from any source other than the
Company, other than any such source that the Executive knows is prohibited
by a legal, contractual, or fiduciary obligation to the Company from
disclosing such information.
(v) Other than in connection with any requirements pursuant to
applicable "whistleblower" statutes, in the event that the Executive is
requested pursuant to, or becomes compelled by, any applicable law,
regulation, or legal process to disclose any Proprietary Information, the
Executive shall provide the Company with prompt written notice thereof so
that the Company may seek a protective order or other appropriate remedy
or, in the Company's sole and absolute discretion, waive compliance with
the terms hereof. In the event that no such protective order or other
remedy is obtained, or the Company waives compliance with the terms hereof,
the Executive shall furnish only that portion of such Proprietary
Information which the Executive is advised by counsel is legally required.
The Executive will cooperate with the Company, at the Company's sole cost
and expense, in its efforts to obtain reliable assurance that confidential
treatment will be accorded such Proprietary Information.
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(b) Developments.
(i) The Executive shall make full and prompt disclosure to the Company
of all inventions, improvements, discoveries, methods, developments,
software, and works of authorship, whether patentable or not, which are
created, made, conceived or reduced to practice by the Executive or under
his direction or jointly with others during the Employment Period, whether
or not during normal working hours or on the premises of the Company or the
Company's Affiliates (collectively, "Developments").
(ii) The Executive agrees to assign and does hereby assign to the
Company (or any entity designated by the Company) all his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. The Executive also
hereby waives all claims to moral rights in any Developments.
(iii) Notwithstanding anything to the contrary contained herein, the
provisions of Sections 7(b)(i) and 7(b)(ii) hereof shall not apply to
Developments which consist of products (and not of services) which do not
relate to the present or planned business or research and development of
the Company or the Company's Affiliates and which are made and conceived by
the Executive not during normal working hours, not on the premises of the
Company or the Company's Affiliates and not using the tools, devices,
equipment or personnel of the Company or the Company's Affiliates or
Proprietary Information.
(iv) The Executive agrees to cooperate fully with the Company or the
Company's Affiliates, both during and after the Employment Period, with
respect to the procurement, maintenance and enforcement of copyrights and
patents (both in the United States and foreign countries) relating to
Developments. The Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations,
oaths, formal assignments, assignment of priority rights, and powers of
attorney, which the Company or the Company's Affiliates may deem reasonably
necessary or desirable in order to protect their rights and interests in
any Development.
(c) Other Agreements. The Executive represents that his performance of
all the terms of this Agreement and as an employee of the Company does not and
will not breach any agreement, other than agreements with the Company's
Affiliates, (i) to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with the
Company, (ii) to refrain from competing, directly or indirectly, with the
business of his previous employer or any other party, and (iii) to refrain from
soliciting the employment of any employees of his previous employer or any other
party.
(d) Non-Competition and Non-Solicitation. During the Executive's
employment hereunder and for a period of: (i) two (2) years thereafter upon the
Executive's termination of employment by giving notice of non-renewal as set
forth in Section 1 hereto, (ii) one (1) year thereafter upon the Company's
termination of the Executive's employment by giving notice of non-renewal as set
forth in Section 1 hereto, or (iii) two (2) years thereafter upon the
Executive's termination of employment for any reason other than those set forth
in (i) and
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(ii), without the prior written consent of the Company, the Executive shall not
engage (whether as an employee, consultant, director or independent contractor)
in any Business Activities on behalf of any person, firm or corporation, and the
Executive shall not acquire any financial interest (except for equity interests
in publicly-held companies that will not be significant and that, in any event,
will not exceed five percent (5%) of equity of that company) in any entity which
engages in Business Activities within 200 miles of any of the Company's offices
in operation on the Commencement Date and within 100 miles of any office of the
Company established after the Commencement Date. During the period that the
above noncompetition restriction applies, the Executive shall not, without the
written consent of the Company: (i) solicit any employee of the Company or any
of the Company's Affiliates to terminate his employment, or (ii) solicit any
customers, partners, resellers, vendors or suppliers of the Company on behalf of
any individual or entity other than the Company or its Affiliates. As used
herein, the term "Business Activities" shall mean conduct of business as a
middle market information technology service provider focused on network
management and monitoring, LAN-WAN broadband, security, storage, and messaging.
(e) Enforcement. The Company shall be entitled to seek a restraining
order or injunction in any court of competent jurisdiction to prevent any
continuation of any violation of the provisions of this Section 7.
(f) Affiliates. For purposes hereof, the Company's Affiliates shall
mean any individual or entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with the
Company. For purposes of this definition, "control" means the power to direct
the management and policies of another, whether through the ownership of voting
securities, by contract or otherwise.
8. Notice.
All notices, requests and other communications pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given, if
delivered in person against receipt therefor, or by overnight courier, or sent
by express, registered or certified mail, postage prepaid, addressed as follows:
If to the Executive: Xxxxxx X. Xxxxxxx
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00 Xxxxxx Xxxx
-----------------------------
Xxx Xxxx, Xxx Xxxx 00000
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If to the Company: MTM Technologies, Inc.
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000 Xxxxxxxxx Xxx
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Xxxxxx Xxxxxxx, Xxx Xxxx 00000
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Attn: Chief Executive Officer
-----------------------------
Either party may, by written notice to the other, change the address to which
notices to such party are to be delivered or mailed.
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9. Dispute Resolution; Mediation and Arbitration.
Except as specifically provided herein, any dispute or controversy
arising under or in connection with this Agreement shall be, upon the demand of
either party, subject to a non-binding mediation proceeding before a mediator on
the panel of the CPR Institute for Dispute Resolution, such mediator to be
agreed upon by the parties. If a mediator is not agreed upon or if mediation is
not successful, the matter shall be settled exclusively by arbitration,
conducted before a single arbitrator mutually selected by the parties, in the
State of New York, in accordance with the rules of the American Arbitration
Association then in effect. If the parties are unable to agree on a single
arbitrator, each party shall select an arbitrator and the two arbitrators
selected by the parties shall select a third arbitrator. If three arbitrators
are selected, they shall act by majority vote. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Each party shall bear their
own costs and expenses of any such mediation or arbitration proceeding and shall
split evenly any common costs; provided, however, that if the dispute concerns
the issue of termination for "cause" or resignation for "good reason," the
non-prevailing party shall pay for all of the prevailing party's costs and
expenses, including legal fees relating to such mediation or arbitration
proceeding.
10. Waiver of Breach.
Any waiver of any breach of this Agreement shall not be construed to
be a continuing waiver or consent to any subsequent breach on the part either of
the Executive or of the Company.
11. 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) 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 Company's assets, 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; and (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 them hereunder.
As used in this Agreement, the term "Company" shall be deemed to refer to any
such successor or assign of the Company referred to in the preceding sentence.
12. Severability.
To the extent any provision of this Agreement or portion thereof shall
be invalid or 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.
13. 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.
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14. Governing Law.
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New York, without giving effect to the
choice of law principles thereof.
15. Entire Agreement.
This Agreement constitutes the entire agreement by the Company and the
Executive with respect to the subject matter hereof and except as specifically
provided herein, 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 (including, without limitation, the employment agreement
dated September 1, 1996, and all amendments thereto). This Agreement may be
amended or modified only by a written instrument executed by the Executive and
the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of May 21, 2004.
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
MTM TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Print Name: Xxxxxxx X. Xxxxxx
Print Title:
------------------
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Exhibit A
, 2004
---------------
Xx. Xxxxxx X. Xxxxxxx
c/o MTM Technologies, Inc.
000 Xxxxxxxxx Xxx
Xxxxxx Xxxxxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxx:
Reference is hereby made to the Employment Agreement between you and
MTM Technologies, Inc. dated as of the date hereof and all defined terms set
forth in such Employment Agreement are incorporated herein.
In connection with your entering into the Employment Agreement, you
and the Company hereby covenant and agree as follows:
1. Auto Allowance. As of the Commencement Date, you agree to assume
the Company's obligation under the automobile lease (the "Lease")
which the Company maintained for your benefit prior to the
Commencement Date and the Company will have no further
obligations or liabilities with respect to the Lease. In
consideration for your assumption of such obligations, the
Company will provide to you a monthly automobile allowance of
$1,800. Such allowance will be provided until the earlier of (i)
the 18-month anniversary of the Commencement Date or (ii) the
date your employment with the Company is terminated. You
acknowledge that (i) notwithstanding the provisions of Section
3(h) of the Employment Agreement, during the 18-month period
starting on the Commencement Date, the Company will not provide
any further reimbursement or allowance for automobile-related
expenses, and (ii) you will be required to provide the Company
with documentation concerning the extent to which the automobile
subject to the Lease is being used for business purposes.
2. Life Insurance. As of the Commencement Date, the Company will
assign to you the life insurance policy (the "Policy") which the
Company maintained for your benefit prior to the Commencement
Date, as well as any cash
A-1
surrender value thereof, and the Company will have no further
obligations or liabilities with respect to the Policy.
3. Tax Withholding. You hereby acknowledge that all payments
required to be made by the Company to you under this Agreement,
and all actions taken by the Company hereunder, shall be subject
to the withholding of such amounts, if any, relating to tax,
excise tax and other payroll deductions as the Company may
reasonably determine it should withhold pursuant to any
applicable law or regulation.
Please acknowledge your agreement to the matters set forth herein by
signing a copy of this letter in the space indicated below and returning such
signed copy to my attention. Once again, we look forward to your continued
employment with the Company.
Sincerely,
---------------------
Name:
Title:
on behalf of the Company
Acknowledged and agreed
as of the date hereof:
-----------------------
Xxxxxx X. Xxxxxxx
A-2
Exhibit B
RABBI TRUST
B-1
Exhibit C
RELEASE OF CLAIMS AND COVENANT NOT TO XXX
This RELEASE OF CLAIMS AND COVENANT NOT TO XXX is executed and
delivered by MTM Technologies, Inc., a New York corporation (the "Company"), to
Xxxxxx X. Xxxxxxx (the "Executive").
Pursuant to the provisions of Section 5(a) of the employment agreement
between the Company and the Executive dated _______________, 2004 (the
"Employment Agreement") the Company hereby agrees as follows:
The Company and its affiliates release and forever discharge the
Executive from, and covenant not to xxx or proceed against the Executive on the
basis of, any and all past or present causes of action, suits, agreements or
other claims which the Company or its affiliates have against the Executive upon
or by reason of any matter, cause or thing whatsoever, including, but not
limited to, any matters arising out of his employment by the Company and the
cessation of said employment. This release shall not, however, constitute a
waiver of any of the Company's rights under the Employment Agreement. The
Company hereby covenants that it has not transferred or assigned to any person
or entity any of the claims that are subject to this release and covenant.
This RELEASE OF CLAIMS AND COVENANT NOT TO XXX is executed by the
Company and delivered to the Executive on _______________, 20___.
MTM TECHNOLOGIES, INC.
By:
--------------------------------
Print Name:
------------------------
Print Title:
-----------------------
C-1
Exhibit D
RELEASE AGREEMENT
This RELEASE AGREEMENT (the "Agreement") is made as of
_______________, 20___ by and between MTM Technologies, Inc., a New York
corporation (the "Company"), and Xxxxxx X. Xxxxxxx (the "Executive").
Recitals:
A. The Company and the Executive are parties to an Employment
Agreement dated _______________, 2004 (the "Employment Agreement"). Capitalized
terms that are not otherwise defined herein shall have the meanings ascribed to
such terms in the Employment Agreement.
B. Effective as of _______________, 20___ (the "Separation Date"), the
Executive's employment with the Company was or will be terminated.
C. The Company is not obligated to pay the Executive any additional
compensation or benefits other than that which has been earned as of the
Executive's Separation Date and other than that which is set forth in the
Employment Agreement. This Agreement is the Release Agreement referenced in the
Employment Agreement and the payment of the severance benefits set forth in the
Employment Agreement is conditioned upon the execution and delivery by the
Executive of this Agreement.
Agreement:
NOW, THEREFORE, in return for good and valuable consideration and in
consideration of the premises and the mutual promises made hereafter, the
Executive and the Company agree as follows:
1. Employment Agreement. Subject to the terms and conditions of the
Employment Agreement; (a) the Company agrees to pay the Executive the severance
payments and to otherwise comply with the provisions of the Employment
Agreement, as the case may be, and (b) the Executive agrees to comply with the
restrictive covenants in Section 7 of the Employment Agreement and to otherwise
comply with the provisions of the Employment Agreement.
2. Acknowledgment. The Executive and the Company acknowledge that the
amounts to be paid pursuant to the Employment Agreement are in excess of any
earned wages or benefits due and owing the Executive through his Separation
Date.
3. Release. In exchange for the good and valuable consideration set
forth in Section 1 of this Agreement, the Executive, on behalf of himself, his
heirs, executors and assigns, releases, waives and discharges any and all manner
of action, causes of action, claims, rights, charges, suits, damages, debts,
demands, obligations, attorneys' fees, or any and all other liabilities or
claims of whatsoever nature, whether in law or in equity, known or unknown,
including, but not limited to, any claim and/or claim of damages or other relief
for tort, breach of
D-1
contract, personal injury, negligence, age discrimination under The Age
Discrimination In Employment Act of 1967, any alleged violation of the Civil
Rights Acts of 1964 and 1991, the Equal Pay Act of 1963, the Rehabilitation Act
of 1973, the Older Workers Benefit Protection Act of 1990, the Americans with
Disabilities Act of 1990, the Family and Medical Leave Act of 1993, any
employment discrimination prohibited by other federal, state or local laws,
including, but not limited to, sex, race, national origin, marital status, age,
handicap, height, weight, or religious discrimination, and any other claims for
unlawful employment practices which the Executive has claimed or may claim or
could claim in any local, state or federal forum, against the Company, its
shareholders and their respective directors, officers, employees, successors and
assigns, affiliates and all others, as a result of the Executive's employment
at, and separation of employment from, the Company; provided that, the Executive
and the Company retain the right to enforce this Agreement and the provisions of
Section 5(a) of the Employment Agreement. The Executive hereby covenants that he
has not transferred or assigned to any person or entity any of the claims that
are subject to this release and covenant.
4. Irrevocable Bar. The parties intend that this Agreement will
irrevocably bar any action or claim whatsoever by the Executive against the
Company for any resultant injuries or damages, whether known or unknown,
sustained or to be sustained, as a result of any of the Company's acts,
omissions and conduct having occurred up to the present date, including, but not
limited to, the Executive's employment with the Company and the termination of
that employment, other than those concerning this Agreement and the provisions
of Section 5(a) of the Employment Agreement.
5. Rights or Claims Arising After the Date Hereof. The Executive and
the Company understand that the Executive is not waiving rights or claims that
may arise as a result of any act, omission or conduct of the Company occurring
after the date this Agreement is executed.
6. Review of Agreement. The Executive understands and agrees that he
has read this Agreement carefully and understands all of its terms.
7. Advice to Consult Attorney. The Executive understands and agrees
that he is advised to consult with an attorney prior to executing this
Agreement.
8. Period within which to Consider Agreement. The Executive
understands and agrees that he has been given 21 days (or more) within which to
consider this Agreement.
9. Revocation. The Executive understands and agrees that he may revoke
this Agreement for a period of seven (7) calendar days following the execution
of this Agreement. Neither this Agreement nor the Company's obligations under
Section 5(a) of the Employment Agreement shall be effective until this
revocation period has expired (at which time such obligations shall be
effective, retroactive to the time contemplated in the Employment Agreement).
Without limiting the generality of the foregoing, the provisions of Section 7 of
the Employment Agreement (relative to restrictive covenants) shall not be
terminated or otherwise affected by any revocation of this Agreement. The
Executive understands that any revocation, to be effective, must be in writing
and received, within seven (7) days of execution of this Agreement, by the
Company at its principal executive offices.
D-2
10. Voluntary Action; No Reliance. In agreeing to sign this Agreement,
the Executive is doing so completely voluntarily and agrees that he has not
relied on any oral statements or explanations made by the Company or its
representatives.
11. Nondisclosure. Both parties agree not to disclose the terms of
this Agreement to any third party, except as is required by law, or as is
necessary for purposes of securing counsel from either parties' attorneys or
accountants.
12. No Disparaging Statements. The Executive and the Company agree not
to make any disparaging statements about the other.
13. Full Accord and Satisfaction. This Agreement is in full accord and
satisfaction and compromise of the claims of the Executive and the Company and
is not to be construed as an admission of liability on the part of the Company.
14. Miscellaneous. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof. This Agreement maybe executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and shall bind and shall
inure to the benefit of the parties hereto, and their respective successors and
assigns. Copies (photostatic, facsimile or otherwise) of this Agreement and
signatures hereto shall be deemed to be originals and may be relied on to the
same extent as the manually-signed originals. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
15. Entire Agreement, Modification. This Agreement contains the entire
agreement between the Executive and the Company with respect to the subject
matter hereof. Any modification of this Agreement must be made in writing and
signed by the Executive and an officer specifically authorized to do so by the
Board of Directors of the Company.
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D-3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
Witness:
----------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxx
MTM TECHNOLOGIES, INC.
By:
----------------------------------- --------------------------------
Print Name:
------------------------
Print Title:
-----------------------
D-4
