Exhibit 10.2
GlobalOptions, Inc.
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
January 29, 2004
Xx. Xxxxxx X. Xxxxxxxx
000 X. 00xx Xxxxxx
Xxxxx 00
Xxx Xxxx, XX 00000
Dear Xxxxxx:
This letter sets forth our agreement on matters relating to your
employment and becoming a member of the Board of Directors with GlobalOptions,
Inc. (the "Company").
1 . EMPLOYMENT, TERM. The Company agrees to employ you and you hereby
agree to be employed as an executive officer with the specific title of Chairman
and to serve as a member of the Board of Directors (the "Board") and Chairman of
the Board. Your employment shall commence on or before February 1, 2004 (the
"Commencement Date"), and you agree to accept the appointment to the Board and
upon the vote of the shareholders, the appointment as the Chairman of the Board
on about February 1, 2004 (the "Effective Date"). As Chairman of the Board, you
shall report to the Board and shall have such responsibilities and perform such
duties appropriate to such position as the Board shall determine. Your initial
responsibilities shall be (i) to develop new business for the Company; (ii) to
develop new sources of capital for the Company, (iii) to redevelop and
reengineer the Company's business strategy; and (iv) to establish an office in
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the city of New York for the Company, and it is agreed that the Company shall
provide such office space within 90 days from the Commencement Date. You shall
devote a substantial amount of your working time and efforts to the business of
the Company, and the Company accepts and supports your continued participation
in the non-Company activities set forth on Exhibit A attached hereto, as well as
future non-competitive activities, subject to Board approval, which approval
shall not unreasonably be withheld. The initial term of your employment with the
Company shall be for a period of three (3) years (the "Term of Employment" or
"Term"), commencing upon the Commencement Date. The Term of Employment shall be
automatically renewed for successive one-year periods after the initial Term
unless the Company or you give notice to the other at least 60 days prior to the
otherwise scheduled expiration of the Term that it or you, as the case may be,
do not want the Term to continue beyond such scheduled expiration.
2. SALARY. Your salary shall be at the annual rate of $200,000 payable
in accordance with the normal payroll practices of the Company. Thereafter, you
shall be entitled to an annual merit salary increase to be determined by the
Compensation Committee of the Board (the "Compensation Committee"), based on
annual reviews and Company performance.
3. INCENTIVES.
A. ANNUAL BONUS. In addition to your salary, you shall have an
annual performance bonus opportunity equal to at least [4] times your salary,
payable in the form of cash, equity or a combination of cash and equity that
will be competitive in the marketplace, as determined by the compensation
committee of the Company. The annual performance bonus opportunity, after 2004,
will be based on your achieving pre-determined target performance objectives,
established by written agreement between you, the Compensation Committee and the
Board of Directors at the beginning of each calendar year and assessed by the
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Compensation Committee at the end of each calendar year. All bonuses shall be
paid not later than sixty (60) days following the end of the applicable year in
which such bonuses are earned. The performance bonus for 2004 shall be based
upon achieving certain goals in raising, financing and generating revenues (as
set forth in Schedule A to Exhibit B, attached hereto.) The performance bonus
for 2004 shall be in the form of a grant of stock options effective on the
Commencement Date, which is attached hereto as Exhibit B, representing the right
to purchase up to seven hundred and fifty thousand shares of the common stock of
the Company ("Common Stock") pursuant to the Global Options, Inc. 2002 Stock
Option Plan ("Stock Option Plan"), which is attached hereto as Exhibit C, at a
price of $0.35 per share (the "Performance Stock Options"). Subject to the terms
and conditions of Sections 6, 7, 8, 9, and 10 of this Agreement, the vesting
period for the Performance Stock Options shall have a vesting period of three
(3) years, and on each monthly anniversary of the Commencement Date, one
thirty-sixth of the Performance Stock Options shall vest, provided, however, the
vesting period may be accelerated upon achieving certain goals set forth in
Exhibit B, attached.
B. LONG TERM INCENTIVES. You shall be entitled to participate in
all long-term incentive plans and programs for executive officers of the
Company, as determined by the Compensation Committee.
4. SIGN-ON OPTION GRANT. Upon your execution of this Agreement (the
"Effective Date"), the Company will grant to you options (the "Sign-on
Options"), attached hereto as Exhibit D, to purchase seven hundred and fifty
thousand (750,000) shares of Common Stock with an exercise price of $.35 per
share pursuant to the Stock Option Plan, representing approximately 5% of the
outstanding shares of Common Stock on a fully diluted basis, as of the Effective
Date. Subject to the terms and conditions of Sections 6, 7, 8, 9 and 10 of this
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Agreement, the Sign-on Options shall have a vesting period of three years, and
on each monthly anniversary of the Effective Date, one thirty-sixth of the
Sign-on Options shall vest.
5. EMPLOYEE BENEFITS- BUSINESS EXPENSES. You shall be entitled to
participate in all employee benefit plans and programs offered by the Company to
its senior management from time to time in effect, including reimbursement for
parking in an amount not to exceed $500 per month, 401(k) plans and group
insurance plans such as life, disability, health, medical and dental, subject to
the provisions of such plans and programs from time to time in effect. You shall
be entitled to four (4) weeks of paid vacation each year, accrued monthly.
Unused vacation days at the end of a calendar year will not be accrued or rolled
forward into subsequent years. The Company will reimburse you for all customary
and reasonable travel and business expenses incurred by you in the performance
of your duties according to normal corporate policy and agreed-upon budgets.
6. TERMINATION OF EMPLOYMENT. TERMINATION DUE TO DEATH AND
DISABILITY.
A. In the event that your employment with the Company is
terminated by the Company by reason of death or disability (as hereinafter
defined) during the Term, you (or, in case of your death, your estate) shall be
entitled to the following:
(i) in a lump sum within ninety (90) days of such
termination (at your highest annualized rate of salary in effect during the
one-year period ending on the effective date of termination), an amount equal to
the salary accrued to the date of termination;
(ii) a pro-rata bonus for the year in which tear iination
occurs, based on the actual achievement of the predetermined objectives for the
year of termination times a fraction which is the number of days from the
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beginning of the applicable year to the date of termination of employment
divided by 365 ("Pro-rata Annual Bonus") payable not later than ninety (90) days
following the end of the year in which the termination occurred;
(iii) if termination occurs prior to January 1, 2005, the
Performance Stock Options will vest pro-rata based on attainment of the
performance goals set forth in Exhibit B at the end of 2004, with all vested
options remaining exercisable for a period of ninety(90) days from the date of
termination of employment;
(iv) all vested options, including Sign-on Options and in
the case of termination following December 31, 2004, the Performance Stock
Options, will remain exercisable for a period of ninety (90) days from the date
of termination; and all unvested options shall be forfeited and
(v) rights under the other benefit plans and programs of the
Company in accordance with the terms of such plans and programs as then in
effect.
B. For purposes of this Agreement, "Disability" shall mean your
failure by reason of sickness, accident or physical or mental disability to
substantially perform the duties and responsibilities of your employment with
the Company for a period of six (6) months in any period of twelve (12)
consecutive months.
7. TERMINATION FOR CAUSE.
A. The Company may terminate your employment at any time for
Cause, effective upon the giving of written notice describing the Cause and
providing you an opportunity to be heard before the Board, in which event, you
shall be entitled to the following:
(i) your salary at the then current rate through the date of
termination;
(ii) participation in employee benefit plans and programs
shall cease upon the effective date of termination of employment; provided,
however, that the Company shall assure that you receive after such termination
all benefits provided by the terms of such plans and programs or required by
law;
(iii) unexercised Performance Stock Options and Options are
forfeited on the date of termination, and
(iv) if the Company's stock is not publicly traded on an
established exchange on the date of your termination, the Company shall have an
absolute right to buy back any stock purchased by you which you hold on the date
of termination at the same purchase price of said stock paid by you or in the
case of options, the exercise price .
B. For purposes of this Agreement, "Cause" shall mean (i) you are
convicted of a felony involving moral turpitude; or (ii) in carrying out your
duties, you engage in conduct that constitutes willful gross neglect or willful
gross misconduct resulting in either case, in material economic harm to the
Company, unless you believed in good faith that such action or non-action was
in, or not opposed to, the best interest of the Company.
8. TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.
A. The Company may terminate your employment without Cause or you
may terminate your employment hereunder for Good Reason, effective upon the
giving of written notice thereof and in the event you are terminating your
employment for Good Reason, providing the Company 15 days to cure such Good
Reason, in which event you shall be entitled to the following:
(i) salary through the date of termination, payable within
ninety (90) days of such termination;
(ii) a Pro-rata Annual Bonus for the year of termination,
payable not later than ninety (90) days following the end of the year;
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(iii) fifty percent (50%) of the unvested Sign-on Options
will vest and become exercisable on the date of termination with all vested
options remaining exercisable for a period of ninety (90) days from the date of
termination and all unvested options being forfeited;
(iv) regardless of whether termination occurs prior to (or
after) January 1, 2005, vesting of Performance Stock Options will be determined
at the end of 2004 in accordance with attainment of the goals set forth in
Schedule A to Exhibit B and
(v) other benefits in accordance with applicable plan and
programs of the Company.
B. For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events without your consent: (i) the Company
demotes you from the officer or director positions referred to in Section 1
hereof or materially diminishes your duties, (ii) you are not elected or
reelected to the position of Director and Chairman (iii) the Company fails to
pay you your salary or bonuses as provided in Sections 2 and 3 after being given
a reasonable opportunity to cure such failure; (iv) the Company fails to renew
your employment agreement at the end of the Term; (v) a material reduction in
your base Salary or annual bonus opportunity as a percentage of Salary; (vi) a
change in the reporting structure as set forth in Section 1 of this Agreement;
(vii) the relocation of your principal place of employment to a location other
than metropolitan area of New York City; (viii) the failure of the Company to
obtain the assumption in writing of its obligation to perform under this
Agreement by any successor to all or substantially all of the assets of the
Company within fifteen (15) days after the merger, consolidation, sale or
similar transaction; (ix) a material breach by the Company of any provision of
this Agreement; or (x) in the event of a Change of Control (as defined below) of
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the Company (except an IPO), you are not offered the same position in the
Company, subsequent to the Change of Control.
9. VOLUNTARY TERMINATION WITHOUT GOOD REASON OR NOTICE OF NON-RENEWAL.
You may terminate your employment hereunder other than for Good Reason effective
thirty (30) days after giving written notice to the Company or you may give
Notice of Non-Renewal in accordance with Section 1 of this Agreement, in which
event you shall be entitled to the following:
(i) your salary at the then current rate, and
(ii) participation in employee benefit plans shall cease
upon the effective date of termination of employment; provided, however, that
the Company shall assure that you receive after such termination all benefits
provided by the terms of such plans or required by law.
10. CHANGE OF CONTROL.
A. For purposes of this Agreement, the term "Change of Control"
shall mean: (i) the sale, transfer, exchange, conveyance or other disposition
(other than by way of merger, consolidation, recapitalization or
reorganization), in one or a series of related transactions, of all or
substantially all of the assets of the Company or more than fifty percent (50%)
of the combined voting power of the outstanding securities of the Company held
by persons who are stockholders of the Company on the date hereof to any person
or entity; (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; or (iii) a merger or consolidation of the Company
with or into another corporation or entity or a recapitalization or
reorganization of the Company if, immediately upon the consummation of such
merger, consolidation, reorganization or recapitalization, the holders of the
outstanding voting securities of the Company, determined immediately prior to
such merger, consolidation, reorganization or recapitalization do not
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immediately thereafter own more than fifty percent (50%) of the combined voting
power of the merged, consolidated, reorganized or recapitalized company's
outstanding securities entitled to vote generally in the election of directors.
B. Notwithstanding anything to the contrary in this Agreement,
upon a Change of Control of the Company, all stock options shall vest
immediately upon such Change of Control and all performance conditions for any
performance stock options shall be deemed to be met.
C. In the event that the aggregate of all payments or benefits
made or provided to, or that may be made or provided to, you under this
Agreement and under all other plans, programs and arrangements of the Company
(the "AGGREGATE PAYMENT") is determined to constitute a "parachute payment," as
such term is defined in Section 280G(b)(2) of the Internal Revenue Code, the
Company shall pay you, prior to the time any excise tax imposed by Section 4999
of the Internal Revenue Code ("EXCISE TAX") is payable with respect to such
Aggregate Payment, an additional amount which, after the imposition of all
income and excise taxes thereon, is equal to the Excise Tax on the Aggregate
Payment.
11. NO MITIGATION, NO OFFSET. In the event of any termination of your
employment hereunder, you shall be under no obligation to seek other employment
and except in the event of a termination by the Company for Cause there shall be
no offset against amounts or benefits due you under this Agreement on account of
any claims asserted by the Company or any remuneration or benefits attributable
to any subsequent employment that you may obtain.
12. INDEMNIFICATION AND LIABILITY INSURANCE. The Company hereby agrees
during, and after termination of your employment to indemnify you and hold you
harmless, both during the Term and thereafter, to the fullest extent permitted
9 CONFIDENTIAL
by law and under the certificate of incorporation and by-laws of the Company
against and in respect of any and all actions, suits, proceedings, claims,
demands, judgments, costs, expenses (including reasonable attorneys' fees),
losses, amounts paid in settlement to the extent approved by the Company, and
damages resulting from your good faith performance of your duties as an officer
or director of the Company or any affiliate. The Company shall reimburse you for
expenses incurred by you in connection with any proceeding hereunder upon
written request from you for such reimbursement and the submission by you of the
appropriate documentation associated with these expenses. Such request shall
include an undertaking by you to repay the amount of such advance or
reimbursement if it shall ultimately be determined that you are not entitled to
be indemnified hereunder against such costs and expenses. The Company shall use
commercially reasonable efforts to obtain and maintain directors' and officers'
liability insurance covering you to the same extent as the Company covers its
other officers and directors.
13. CONFIDENTIALITY. You agree, during the term of this Agreement and
at all times thereafter, to treat as confidential and not to intentionally
disclose, publish or otherwise make available to the public or to any
individual, firm or corporation (other than to an employee or professional
advisor of the Company, or to your legal counsel for the purpose of securing
personal advice), or use any confidential material (as hereinafter defined),
except as required in the performance of your duties under this Agreement or
except when required to do so by a court of law, by any governmental agency
having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
or actual jurisdiction to order you to divulge, disclose or make accessible such
information. You agree that all confidential material is the exclusive property
of the Company, and you agree to return such material to the Company promptly
10 CONFIDENTIAL
upon the termination of your service as an officer and director of the Company.
For purposes hereof, the term "confidential material" shall mean all information
concerning the products, projects, activities, business or affairs of the
Company acquired by you in the course of providing services to the Company;
provided, however, that the term "confidential material" shall not include
information which (i) becomes generally available to the public other than as a
result of an unauthorized disclosure by you, (ii) was available to you on a
non-confidential basis prior to your service with the Company, (iii) becomes
available to you on a non-confidential basis from a source other than the
Company, provided that such source is not bound by a confidentiality agreement
with the Company, or (iv) pertains to your own compensation and payroll
arrangements.
14. NONCOMPETITION. You agree that, in consideration of your
employment with the Company, you will not, other than in the course of
performing your duties hereunder or as agreed by the Company in writing, during
the period of your employment with the Company and for a one (1) year period
thereafter, engage, directly or indirectly, whether as principal, agent,
distributor, representative, consultant, employee, partner, stockholder, limited
partner or other investor (other than an investment of not more than (i) five
percent (5%) of the stock or equity of any corporation the capital stock of
which is publicly traded or (ii) five percent (5%) of the ownership interest of
any limited partnership or other entity) or otherwise, with any company or
entity (x) that renders any of the services provided by the company at the time
your employment is terminated, (y) that is a customer or (z) that is targeted by
the company to provide services pursuant to its written business plans as
approved by the Board of Directors.
15. NONSOLICITATION. You agree that for a period of one (1) year
following the termination of your employment with the Company, you will not,
without the prior written consent by the Company, solicit or entice away, or
11 CONFIDENTIAL
endeavor to solicit or entice away, from the Company (i) any customer of the
Company or (ii) any employee of the company or (iii) any corporation, individual
or firm in which the Company is, or has been during the last twelve (12) months
of your employment with the Company, in active negotiations in becoming a
customer, either for your own account or for any individual, firm or corporation
with which you are associated.
16. EQUITABLE RELIEF. In the event of a breach by you of any of the
provisions of Sections 14 or 15 of this Agreement, you hereby consent and agree
that the Company shall be entitled to seek an injunction or similar equitable
relief from any court of competent jurisdiction restraining you from committing
or continuing any such breach or granting specific performance of any act
required to be performed by you under any of such provisions, without the
necessity of showing any actual damage or that money damages would not afford an
adequate remedy and without the necessity of posting any bond or other security.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies at law or in equity which it may have with respect to any such
breach.
17. LEGAL FEES. The Company agrees to pay your personal legal fees
relating to, and upon the execution of, this Agreement up to a maximum of
$25,000.
18. LOCATION OF SERVICES. The Company's headquarters will be in
Washington DC. The Company will be opening a New York City office. You will be
expected to spend time in both offices as agreed by you and the Board of
Directors.
19. STOCK PURCHASE. For a period of ninety (90) days from the
Effective Date, you shall have a right to purchase up to two million (2,000,000)
shares of common stock of the Company at a price of $0.50 per share.
12 CONFIDENTIAL
20. PUT/CALL RIGHTS. In the event your employment with the Company is
terminated for any reason other than for Cause, and if the Company is not
publicly traded on an established stock exchange at such time, you (or your
estate) shall have a right to Put to the Company any stock of the Company you
own at the date of termination, and the Company shall redeem such stock from you
at a price equal to fair market value; or, in the event of such Termination,
other than for Cause, the Company shall have a right to Call upon you (or your
estate) and you (or your estate) shall sell to the Company the stock of the
Company you own at the date of termination to the Company at a price equal to
fair market value. The term fair market value for this Section shall mean the
highest price at which the Company has sold its stock in a bona-fide transaction
of more than $5 million dollars with an unaffiliated third party purchaser(s) in
the twelve (12) months preceding the date of termination. If no such sale has
taken place, the parties shall mutually agree upon an independent appraiser to
determine such fair market value of the stock. Payment for the stock, under this
Section, shall be made at the later of (i) one hundred and eighty (180) days
from the date of termination or (ii) the date of final fair market value
appraisal. In the event a Put is exercised by you (or your estate), under this
Section, and if the Company is unable to make full payment at the date of such
Put exercise due to an unreasonable financial burden to the Company, the Company
shall have up to five years to make payments to you in equal quarterly
installments with interest at the rate equal to prime rate announced from time
to time by Citibank, N.A. ("Interest") Provided, further, the Company shall have
a right, if it is unable to make such quarterly payment, to defer one quarter
payment each year, until such time it has sufficient capital to make such
payment, but in no event later than the expiration of the fifth year, with the
deferred payment accruing Interest.
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21. REPRESENTATIONS AND COVENANTS.
(a) You represent and warrant that you have the free and unfettered
right to enter into this Agreement and to perform your obligations under it and
that you know of no agreement between you and any other person, firm or
organization, or any law or regulation, that would be violated by the
performance of your obligations under this Agreement. You agree that you will
not use or disclose any confidential or proprietary information of any prior
employer in the course of performing your duties for the Company or any of its
Affiliates.
(b) The Company represents that (i) the execution of this Agreement
and the granting of the benefits and awards hereunder have been authorized by
the Company, including, where necessary, by the Board and its Shareholders, (ii)
the execution, delivery and performance of this Agreement does not violate any
law, regulation, order, decree, agreement, plan or corporate governance document
of the Company and (iii) upon the execution and delivery of this Agreement, it
shall be the valid and binding obligation of the Company enforceable against it
in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
22. SEVERABILITY. Should any provision of this Agreement be held by a
court or arbitration panel of competent jurisdiction to be enforceable only if
modified, such holding shall not affect the validity of the remainder of this
Agreement, the balance of which shall continue to be binding upon the parties
hereto with any such modification to become a part hereof and treated as though
originally set forth in this Agreement.
23. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
all the understandings and representations between you and the Company
pertaining to the subject matter hereof and supersedes prior undertakings and
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agreements, whether oral or written, if any there be, previously entered into by
you and the Company with respect thereto.
24. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder, including, without limitation, Section 12 (indemnification and
liability insurance), Section 13 (confidentiality), Section 14
(non-competition); Section 15 (non-solicitation), Section 16 (equitable relief),
and Section 29 (arbitration), shall survive any expiration of the Term,
including expiration thereof upon your termination of employment for whatever
reason, to the extent necessary to the intended preservation of such rights and
obligations.
25. AMENDMENTS. No provision of this Agreement may be amended or
modified unless such amendment or modification is agreed to in writing and
signed by you and by a duly authorized representative of the Company.
26. NOTICES. Any notice to be given hereunder shall be in writing, and
delivered personally or sent by telecopier, by certified mail return receipt
requested, or overnight courier addressed to the party concerned at the address
indicated below or at such other address as such party may subsequently
designate by like notice:
If to the Company:
GlobalOptions, Inc.
0000 X Xxxxxx X.X. Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Dr. Xxxx Xxxxxxxxxxx
Telecopier No.: (000) 000-0000
15 CONFIDENTIAL
If to you:
Xx. Xxxxxx X. Xxxxxxxx
000 X. 00xx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
27. WITHHOLDING. Anything to the contrary notwithstanding, all
payments required to be made by the Company hereunder to you shall be subject to
withholding of such amounts relating to taxes as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
28. CONSTRUCTION. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the District of
Columbia applicable in the case of agreements made and entirely performed in
such jurisdiction, without regard to conflict of law principles.
29. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, your employment or termination thereof shall, except as
provided in Section 16 hereof, be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in
effect and judgment upon such award rendered by the arbitrator maybe entered in
any court having jurisdiction thereof The arbitration shall be held in the
District of Columbia.
30. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
heirs and assigns. For purposes of this Section 30, a successor to the Company
shall be limited to an entity which shall have acquired all or substantially all
16 CONFIDENTIAL
of the business and/or assets of the Company and shall have assumed (whether by
agreement or operation of law) the Company's rights and obligations under this
Agreement. None of your rights or obligations under this Agreement may be
assigned or transferred by you other than your rights to compensation and
benefits, which may be transferred only by will, operation of law or in
accordance with Section 31 below.
31. BENEFICIARIES/REFERENCES. You shall be entitled, to the extent
permitted under applicable plans, agreements or law, to select and change a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following your death by giving the Company written notice thereof. In
the event of your death or a judicial determination of your incompetence,
reference in this Agreement to you shall be deemed, where appropriate, to refer
to your beneficiary, estate or legal representative.
32. COUNTERPARTS. This Agreement may be executed in counterparts,
including by facsimile, all of WHICH together shall constitute one agreement
binding on the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.
* * *
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If the foregoing accurately sets forth our agreement, please indicate
your acceptance hereof by signing the enclosed counterpart of this letter and
return such counterpart to the Company.
Very truly yours,
GlobalOptions, Inc.
By: /s/ Xxxx X. Xxxxxxxxxxx
---------------------------------
Dr. Xxxx Xxxxxxxxxxx
CEO
Agreed and Accepted
on 1/29, 2004
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Xx. xxxxxx X. Xxxxxxxx
18 CONFIDENTIAL
