Exhibit 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") made as of this 31st day of
October 2001 by and between The A Consulting Team, Inc., a New York corporation
with its principal place of business at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("TACT") and Xxxxxx Xxxxxxxx (the "Employee").
WHEREAS, Employee has enjoyed a successful career in the information
technology sector, and is a seasoned executive with public company experience;
and
WHEREAS, TACT desires to employ the Employee and the Employee is
willing to undertake such employment, and the parties hereto wish to set forth
certain terms of the Employee's employment with TACT;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties hereto do agree as follows:
1. Employment. TACT hereby employs Employee, and Employee hereby accepts
such employment, as President and Chief Operating Officer
("collectively hereinafter Executive") of TACT, upon the terms and
subject to the conditions contained herein. As an Executive, Employee
shall have full authority and direct responsibility for day-to-day
operations of TACT and shall report to the Chief Executive Officer.
2. Duties.
A. The Employee shall perform all duties commensurate with the
Employee's position and which are assigned by the Chief
Executive Officer of TACT, or his designee. Employee will be
based in the metropolitan New York area, and TACT will provide
Employee with an office and appropriate computer and
communications at its offices in that area.
B. Throughout Employee's employment hereunder, the Employee shall
devote Employee's full time, attention, knowledge and skills
during normal business hours in furtherance of the business of
TACT and will faithfully, diligently, and to the best of
Employee's ability, perform the duties described above and
further TACT's best interests.
C. During Employee's employment, the Employee shall not knowingly
engage, and shall not knowingly solicit any employees of TACT,
or its subsidiaries or other affiliates to engage, in any
commercial activities which are in any way in competition with
the activities of TACT, or which in any way materially
interface with the performance of Employee's duties or
responsibilities to TACT.
D. The Employee shall at all times be subject to, observe and
carry out such reasonable rules, regulations, policies,
directions and restrictions as TACT, consistent with
Employee's rights and duties under this Agreement, may from
time to time establish and those imposed by law, provided that
the same are generally applicable to all similarly situated
employees.
3. Employee Covenants. In order to induce TACT to enter into this
Agreement, the Employee hereby agrees as follows:
A. Except when she is directed to do otherwise by Chief Executive
Officer of TACT, his designee, or any successor to him, and
except as required by law, court order or subpoena, the
Employee shall keep confidential and shall not divulge to any
other person or entity, during the term of the Employee's
employment or thereafter, any of the business secrets or other
confidential information regarding TACT or its subsidiaries
(i) which have not otherwise become public knowledge, (ii)
which are already known to Employee or learned by Employee
form independent sources, or which have been disclosed by TACT
to others without substantial restriction on further
disclosure.
B. All papers, books and records of every kind and description
relating to the business and affairs of TACT, whether or not
prepared by the Employee, shall be the sole and exclusive
property of TACT, and Employee shall surrender them to TACT at
any time upon request by the Chief Executive Officer.
C. During the term of employment by TACT or one of its subsidiary
companies, Employee shall devote substantially all of
Employee's time, attention and energies during normal working
hours to the performance of the business of TACT, and Employee
shall not, directly or indirectly, alone or as a partner,
officer, director, employee, stockholder, consultant or agent
of any other corporation, partnership or other business
organization, be actively engaged in or concerned with any
other duties or pursuits which materially interfere with the
performance of Employee's duties as an Employee of TACT.
4. Compensation. As full compensation for Employee's services hereunder
and in exchange for Employee's promises contained herein, TACT shall
compensate the Employee in the manner set forth below. The amounts set
forth below shall be subject to any withholding or other deductions
required by law.
A. For the period beginning on October 31, 2001 and ending
October 31, 2004, Employee shall receive a biweekly salary of
$11,458.33 ($275,000 per year), paid in accordance with TACT
policy. TACT in its sole discretion may increase Employee's
salary during the term of this Agreement.
B. Commissions and Bonuses.
Employee shall be eligible to receive commissions and annual
bonuses in accordance with the incentive compensation plan
that will be jointly developed between Employee and TACT.
C. Vacation. Employee shall be entitled to sick days and personal
days in accordance with TACT's then current PTO policy.
D. Benefits. Employee shall be eligible for TACT's customary
group benefits programs.
E. Stock Options. Upon approval by the Board of Directors, TACT
has or will grant to Employee options to purchase shares of
TACT Common Stock in accordance with the terms of TACT's Stock
Option and Award Plan and Employee's Stock Option Award
Agreement(s). In addition, Employee will be eligible to
receive additional stock option grants in amounts to be
determined by the Board of Directors on each anniversary of
this Agreement, provided, Employee meets the financial goals
jointly established between TACT and Employee.
5. Non-competition.
A. In any event, for a period of one (1) year after the
termination of this Agreement or for a period of one (1) year
after cessation of Employee's employment with TACT for any
reason (including termination of employment by TACT without
Cause), whichever period is longer, Employee shall not,
directly or indirectly, alone, or as a partner, officer,
director, employee, stockholder, consultant or agent of any
other corporation, partnership or other business organization,
knowingly solicit the employment of, or hire, any employee of
TACT, or any TACT subsidiary, or cause any such employee to
terminate the employee's relationship with TACT, or any TACT
subsidiary, without the prior written approval of TACT.
Employee acknowledges and agrees that Employee's employment
may extend beyond the termination date of this Agreement, and
that Employee's obligations hereunder begin upon termination
of employment, and not upon the expiration date of this
Agreement.
B. In any event, for a period of one (1) year after the
termination of this Agreement or for a period of (1) year
after cessation of Employee's employment with TACT for any
reason (including termination of employment by TACT without
Cause), whichever period is longer, Employee shall not,
directly or indirectly, alone, or as a partner, officer,
director, employee, stockholder, consultant or agent of any
other corporation, partnership or other business organization,
knowingly solicit any of the accounts of TACT with which
customers Employee was directly involved unless such
solicitation is undertaken on behalf of a business venture
which does not compete, directly or indirectly, with the
products or services owned, sold, manufactured, marketed,
provided or developed by TACT and its subsidiaries during
Employee's employment with TACT. For the purposes of this
subsection, a business shall be deemed to be in competition
with TACT and its subsidiaries only if the products or
services of such business are substantially similar in
purpose, function or capability to the products or services
then being developed, manufactured, marketed, provided or sold
by TACT or a TACT subsidiary. Employee acknowledges and agrees
that Employee's employment may extend beyond the termination
date of this Agreement, and that Employee's obligations
hereunder begin upon termination of employment, and not upon
the expiration date of this Agreement. The parties agree that
the provisions of Section 5 regarding Non-Competition shall
not apply to Employee's existing relationships with the
clients listed on Attachment A if Employee's employment
terminates for any reason during the first twelve months of
Employee's employment. Thereafter, the provisions of this
paragraph will apply to Employee in all respects including
those customers listed on Attachment A.
C. If TACT terminates this Agreement without Cause, the
provisions of this Paragraph 5 shall be enforceable against
the Employee only if TACT pays Employee the compensation set
forth in Paragraph 4.A above for a period of one (1) year.
D. The parties agree that the Employee's services are unique, and
that any breach or threatened breach of the provisions of this
Agreement will cause irreparable injury to TACT and that money
damages will not provide an adequate remedy. Accordingly, TACT
shall, in addition to other remedies provided by law, but
subject nonetheless to the terms and conditions of this
Agreement, be entitled to such equitable and injunctive relief
as may be necessary to enforce the provisions of this
Agreement against the Employee or any person or entity
participating in such breach or threatened breach. Nothing
contained herein shall be construed as prohibiting TACT from
pursuing any other and additional remedies available to it, at
law or in equity, for such breach or threatened breach
including any recovery of damages from the Employee and the
immediate termination of Employee's employment.
The provisions of this Section 5 shall survive termination of this Agreement.
6. Duration and Termination.
A. Duration. The term of this Agreement shall commence on October
31, 2001, and shall terminate on October 31, 2004, unless
earlier terminated pursuant to the provisions hereof.
B. Termination Upon Death of Employee. This Agreement shall
immediately terminate, and all rights, benefits and
obligations hereunder shall cease, in the event of Employee's
death, except such rights of Employee which have accrued as of
the date of death.
C. Termination Upon Disability of Employee. In the event that a
mutually acceptable physician determines that the Employee is
unable to substantially perform Employee's usual and customary
duties under this Agreement for more than three (3) months in
any calendar year, this Agreement shall immediately terminate
and all rights, benefits and obligations hereunder shall
cease, except such rights of Employee which have accrued as of
the date of disability. In such event, the provisions of
Paragraph 5 shall not be enforceable against Employee.
D. Termination by the Company for Reasons Other Than Cause. In
the event of the termination of this Agreement by TACT for any
reason other than "Cause" (as hereinafter defined), the
Employee shall be entitled (without any obligation on the part
of the Employee to mitigate damages) to continuation of the
salary provided in Paragraph 5 Subpart (C). Continuation of
the salary and the benefits hereunder shall not constitute
continuation of employment for the purposes of Paragraph 5.
E. Termination By Employee. In the event TACT has willfully and
materially breached its obligations under this Agreement, and
if such breach continues unremedied for fifteen (15) days
after written notice thereof to TACT specifying the breach and
requesting that it be remedied, Employee shall have the right
to terminate this Agreement. In such event, the provisions of
Paragraph 5 shall not be enforceable against Employee unless
TACT pays Employee the compensation set forth in Paragraph 4.A
above for a period of one (1) year. Employee may also
terminate Employee's employment for "Good Reason" (as defined
below) during the term of this Agreement. For purposes of this
Agreement, Good Reason shall mean a direct or indirect change
in the ownership or control of Company by purchase, merger,
consolidation, reorganization, lease, exchange, transfer or
sale of all or substantially all of the assets and/or
outstanding stock of the Company (in one transaction or a
series of transactions) or taking the Company private or any
other business transaction involving Company or any
combination of the foregoing transactions which results in any
material demotion of Employee and/or material reduction in
Employee's authority or responsibilities or physical
relocation of Employee's position outside the New York/New
Jersey area.
In the event Employee terminates this Agreement for Good
Reason, the provisions of Paragraph 5 shall not be enforceable
against Employee unless TACT pays Employee the compensation
set forth in Paragraph 4A above for a period of one (1) year.
F. Termination by Company for Cause. The Company shall have the
right to terminate this Agreement in any of the following
events, each of which shall constitute "Cause". Termination
under this subsection (F) shall be without damages or
liability to the Employee for compensation and other benefits
which would have accrued hereunder after termination; provided
however, and notwithstanding anything to the contrary herein,
any rights and benefits of Employee which have accrued prior
to such termination shall not be affected by such termination.
Cause is defined as:
(i) the Employee's willful and material breach in
respect of her duties under this Agreement if
such breach continues unremedied for fifteen
(15) days after written notice thereof to the
Employee specifying the acts constituting and
requesting that they be remedied;
(ii) fraud committed in connection with Employee's
employment, or theft, misappropriation or
embezzlement of TACT;
(iii) a conviction, plea of nolo contendere, plea to
a lessor charge in lieu of a felony, of a
felony, a crime involving fraud or
misrepresentation, or any other crime, the
effect of which is likely to materially
adversely affect TACT;
(iv) intentional violation of any Law which results
in material liability to TACT; and
(v) abuse of alcohol or other drugs, or the
illegal use of drugs, which materially
interferes with the performance by Employee of
Employee's duties hereunder.
7. Successors and Assigns. The rights and obligations of TACT hereunder
shall run in favor of and shall be binding upon TACT, its successors,
assigns, nominees or other legal representatives. Termination of
Employee's employment shall not operate to relieve Employee of any
remaining obligations hereunder. Employee acknowledges that TACT may
assign its obligation under this Agreement to a TACT subsidiary without
the consent of Employee, provided however that the assignee agrees to
be bound by the terms and conditions of this Agreement; and provided
further that TACT in the event of any such assignment shall not be
relieved of its obligations under this Agreement. Employee may not
assign Employee's rights and obligations hereunder.
8. Notices. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly
given upon receipt if delivered by hand, sent by telecopier or courier,
or three (3) days after such communication is mailed within the
continental United States by first class certified mail, return receipt
requested, postage prepaid, to the other party, in each case addressed
as follows:
A. if to TACT, to Chief Executive Officer, The A Consulting Team,
Inc., 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and
B. if to the Employee, to Xxxxxx Xxxxxxxx, 0 Xxxxxxx Xxxx, Xxx.
0000, Xxxx Xxx, Xxx Xxxxxx 00000.
Addresses may be changed by written notice sent to the other party at
the last recorded address of that party.
9. Severability. If any provisions of this Agreement shall be adjudged by
any court of competent jurisdiction to be invalid or unenforceable for
any reason, such judgment shall not affect, impair or invalidate the
remainder of this Agreement.
10. Prior Understanding. This Agreement embodies the entire understanding
of the parties hereto, and supersedes all other oral or written
agreements or understandings between them regarding the subject matter
hereof. No change, alteration or modification hereof may be made except
in writing, signed by both parties hereto. The headings in this
Agreement are for convenience and reference only and shall not be
construed as part of this Agreement or to limit or otherwise affect the
meaning hereof.
11. Execution in Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which shall be deemed to be
original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
12. Choice of Laws. Jurisdiction over disputes with regard to this
Agreement shall be exclusively in the courts of the State of New
Jersey, and this Agreement shall be construed in accordance with and
governed by the laws of the State of New Jersey without giving effect
to principles of conflicts of law thereunder.
13. Attorney Fees. In the event of any litigation between the parties
hereto, the prevailing party shall be entitled to all of its costs
incurred in such litigation, including reasonable attorney's fees.
14. Nonwaiver. The waiver of any violation or breach of this Agreement by
either party hereto shall not be deemed to be a waiver of any
continuing violation or breach or a waiver of any other violation or
breach of this Agreement.
SIGNATURE PAGE FOLLOWS
Signature Page
EMPLOYMENT AGREEMENT
Xxxxxx Xxxxxxxx
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE A CONSULTING TEAM, INC. EMPLOYEE
By: /s/ Xxxxxx XxxXxx /s/ Xxxxxx Xxxxxxxx
Xxxxxx XxxXxx Xxxxxx Xxxxxxxx
Its: Chairman and Chief Executive Officer
