EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 1st day of
January, 2005 (the "Effective Date"), between Infocrossing, Inc., a Delaware
corporation (the "Company"), and Robert Wallach ("the Executive");
WHEREAS, the Company and the Executive now desire to enter into the
Agreement in order to memorialize the terms and conditions of the Executive's
relationship with the Company.
WHEREAS, on August 23, 2004, the Company granted to the Executive options
to purchase three hundred fifty thousand (350,000) shares of the Company's
common stock (the "Options").
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto agree as follows:
1. Employment.
(a) During the Full-Time Term (as defined below), the Company will
employ the Executive to render services as the Vice-Chairman, President and
Chief Operating Officer ("COO") of the Company.
(b) Except as otherwise provided in Section 4(c) below, during the
Part-Time Term and the Reduced Part-Time Term (both as defined below) the
Executive will no longer serve as the President and COO but shall continue
to serve as Vice-Chairman; provided, that at any time the Executive is not
serving as the Vice-Chairman, President or COO, the Executive shall render
such other services in a senior executive capacity as determined by the
Board of Directors of the Company and as reasonably agreed to in writing by
the Executive.
(c) During the Term, the Company shall nominate the Executive to serve
as a member of the Board of Directors of the Company whenever his seat is
subject to re-election; provided, however, that the Executive, in his sole
discretion, may elect not to be a member of the Board of Directors of the
Company (it being understood that such an election shall have no effect on
the Executive's rights under this Agreement except that in such event the
Executive shall resign as Vice-Chairman).
2. Position and Duties.
The Executive shall have such responsibilities, perform such duties and
have such authority as is consistent with his position with the Company,
reporting to, and subject only to the direction and control of, the Chairman of
the Company and the Board of Directors of the Company. The Executive's services
shall be exclusive to the Company, except that the Executive may engage in
charitable and community activities and give attention to his outside investment
interests so long as such activities do not interfere with the performance of
his duties hereunder. The Executive may also serve as a member of the board of
directors of other unaffiliated corporations.
3. Place of Employment.
The Executive shall be employed (subject to necessary and appropriate
business related travel), at the Company's offices in Leonia, New Jersey.
4. Term.
(a) The term of the Executive's employment with the Company under this
Agreement shall be for a continuous period of seven (7) years (the "Term")
commencing on the Effective Date and shall end at the close of business on
December 31, 2011.
(b) The Executive shall provide the services in Section 1 on a
full-time basis for the first two (2) years of the Term (the "Full-Time
Term").
(c) The Executive shall provide the services in Section 1 on a
part-time basis (up to thirty (30) hours per week) for the third, fourth
and fifth years of the Term (the "Part-Time Term").
(d) The Executive shall provide the services in Section 1 on a reduced
part-time basis (up to twenty (20) hours per week) for the final two (2)
years of the Term (the "Reduced Part-Time Term").
(e) Notwithstanding subsections (c) and (d) above, at any time during
the Part-Time Term or the Reduced Part Time Term the Board may request in
writing that the Executive continue or resume the duties described in
Section 1(a) above for such period as the Board shall determine, not to
extend beyond December 31, 2011 (the "Extended Duties Term"). If the
Executive accepts such duties his employment shall be on a full-time basis
during the Extended Duties Term.
5. Compensation and Benefits.
(a) Base Salary.
(i) During the Full-Time Term, the Company shall pay the
Executive one hundred percent (100%) of the Base Salary (as defined
below). During the Part-Time Term, the Company shall pay the Executive
seventy-five percent (75%) of the Base Salary. During the Reduced
Part-Time Term, the Company shall pay the Executive fifty percent
(50%) of the Base Salary. During the Extended Duties Term, the Company
shall pay the Executive one hundred percent (100%) of the Base Salary.
The amount of Base Salary for any period determined calculated as
provided in the preceding sentence shall be the "Applicable Base
Salary" for such period. The Applicable Base Salary shall be payable
to the Executive in installments on the Company's normal payroll
dates.
(ii) During the first year of the Term, "Base Salary" shall be
four hundred fifty-five thousand eight hundred fourteen dollars and
seventy-eight cents ($455,814.78). On each anniversary of the
Effective Date during the Term, the Base Salary shall be increased by
an amount equal to the greater of (A) the annual percentage increase,
if any, in the cost of living, as set forth in the United States
Bureau of Labor Statistics Consumer Price Index - All Urban Consumers
(CPI-U) New York All Items, 1982-84=100 or (B) as the Board of
Directors of the Company, or duly authorized committee thereof (either
the full Board of Directors or such duly authorized committee, the
"Board"), shall otherwise determine.
(b) Bonus. For each Bonus Year, as defined below, during the Term
(including the Full-Time Term, the Part-Time Term and the Reduced Part-Time
Term) the Executive shall be entitled to a bonus (the "Bonus"). The target
Bonus shall equal one hundred percent (100%) of the Applicable Base Salary
for that Bonus Year, and shall be awarded based upon achievement of
performance goals to be determined by the Board and communicated to the
Executive during the first quarter of the applicable Bonus Year, or in the
absence of such goals based on achievement against the Company's budgeted
performance for the Bonus Year. The Board may, in good faith, adjust the
actual Bonus as it deems necessary in view of the Company's overall
financial condition notwithstanding such performance. The Board may pro
rate the Bonus for any partial year of employment to reflect the period of
actual employment during that Bonus Year. The Bonus as determined for each
Bonus Year during the Term shall be paid to the Executive not later than
two and one-half (2 1/2) months following the end of such year. "Bonus
Year" shall mean a calendar year.
Notwithstanding the above, the Company shall have the right to defer
payment of that portion, if any, of the Executive's Bonus which is not
deductible by the Company (the "Excess Portion") for purposes of U.S.
Federal income tax solely on account of the application Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"), until the
earlier of (i) six (6) months following the date the Executive "separates
from service" (as defined for purposes of Section 409A of the Code), (ii)
the date of the Executive's death, or (iii) the date of the Executive's
"disability" (as defined for purposes of Section 409A of the Code). If the
Board elects to provide for such deferral, (i) any amounts deferred shall
be fully vested and non-forfeitable at all times, (ii) any amounts deferred
shall bear interest at a rate that is no less than the Company's cost of
borrowed funds (i.e., the rate charged from time to time by the Company's
principal lender for unsecured financing), such interest to be paid as and
when the related deferred amount is paid and (iii) at the request of the
Executive deferred amounts shall be placed in a "rabbi trust" as described
in Internal Revenue Service Revenue Procedure 92-64, 1992-2 C.B. 422.
(c) Options. No grants of options will be made to the Executive for
two (2) years from the Effective Date. Thereafter, the Board agrees to
consider, in good faith, additional annual grants of stock options.
6. Executive Benefits.
(a) Vacation and Other Leave. The Executive shall be entitled to at
least six (6) weeks paid vacation, and such other holiday, sick leave,
personal days and other "leave" benefits commensurate with his position as
a senior executive officer of the Company and in accordance with the
Company's regular policies.
(b) Group Medical, Life and Disability Insurance. The Executive shall
be entitled to participate, at the Company's expense, in all of the
Company's group health, life and disability insurance plans generally
provided to its senior executives from time to time and shall be entitled
to participate in any other benefit plans on the same basis as applicable
to other executives of the Company. Any disability insurance policy shall
provide for continuation of disability benefits regardless of whether the
beneficiary is receiving the benefit in Section 7(e) below.
(c) Life Insurance. The Company shall be exclusively responsible for
obtaining and paying the premiums on a life insurance policy in the amount
of $500,000 with respect to the Executive, and the Executive shall have the
right to designate or change from time to time the beneficiary or
beneficiaries. The Executive hereby consents to the maintenance by the
Company of such life insurance policy and agrees to cooperate with the
Company in obtaining such policy by completing necessary applications and
submitting to necessary medical examinations.
(d) Other Benefits. The Executive shall be entitled to participate in
any and all other benefit programs and arrangements made generally
available from time to time by the Company to its senior officers and other
employees of the Company.
7. Other.
(a) Reimbursement; Vouchers. The Company shall reimburse the Executive
for all reasonable business expenses incurred by the Executive in
connection with his employment hereunder. The Executive shall submit to the
Company such vouchers or expense statements satisfactorily evidencing such
expenses as may be reasonably requested by the Company.
(b) Automobile. The Company shall provide the Executive with the use
of a current model automobile owned or leased by the Company of the same or
equivalent type and class as currently provided to the Chairman of the
Company and the Company shall pay for and/or reimburse the Executive for
all maintenance and repairs thereon as well as for gasoline, tolls and
parking expenses for business use of such automobile for the Company, upon
submission of such documentation as may be reasonably required by the
Company.
(c) Office; Telephone. The Executive shall be furnished with office
facilities and services suitable to his position with the Company, as well
as at the Company's expense, business use of cellular telephone(s),
beeper(s), a second telephone line at the Executive's residence and high
speed internet access at the Executive's residence.
(d) Health Club. The Company shall purchase membership, at a
reasonable rate, for the Executive at a health club of the Executive's
choice and shall pay related expenses.
(e) Retirement. The Executive shall be eligible for the following
benefits:
(i) A supplemental retirement benefit commencing on January 1,
2010 (the "Retirement Benefit Commencement Date") and continuing for
the remainder of the Executive's life and providing semi-monthly
payments of five thousand dollars ($5,000.00) (the "Normal Retirement
Benefit"). Unless the Executive elects otherwise as provided below,
the actual benefit shall be a benefit commencing on the Retirement
Benefit Commencement Date, providing semi-monthly payments for the
greater of (A) the Executive's life, or (B) ten (10) years in an
amount that is the actuarial equivalent (as determined by the Board
based on the advice of a nationally recognized actuarial consulting
firm) of the Normal Retirement Benefit.
Subject to advice of counsel that such election will not violate
Section 409A of the Code, the Executive may elect to receive the
Retirement Benefit in the form of a lump sum, a joint and 100%
survivor benefit, or such alternative form of benefit as the Board
shall determine.
(ii) The Company shall provide the Executive and his Spouse, for
the remainder of their respective lives, health, life, disability,
dental and vision insurance benefits (the "Insurance Benefits")
substantially equivalent to the benefits provided to the Company's
Chief Executive Officer (or in the absence of a Chief Executive
Officer, the highest compensated individual then employed by the
Company) and his or her spouse (or in the absence of a spouse, the
benefits to which such spouse would otherwise be eligible) from time
to time, provided, however, that to the extent applicable, such
coverage shall be strictly supplemental and secondary to and not in
lieu of the benefits received by, or that could have been received by,
the Executive and/or his Spouse as a consequence of their coverage
under Medicare, as amended from time to time (determined as if the
Executive and his Spouse have elected any optional coverage for which
they are eligible, regardless of whether either actually elects such
coverage). The term "Spouse" shall mean the person to whom the
Executive is espoused on the date on which benefits commence.
8. Termination.
The Executive's employment may be terminated by either party at any time,
subject to the provisions of this Section 8.
(a) Death or Disability. In the event of the Executive's death or
Disability, the Executive (or his estate or representative) shall be
entitled to receive within thirty (30) days following termination (i) all
compensation and benefits accrued to the "Date of Termination" as defined
below, (ii) a lump sum amount equal to the lesser of (A) two times the
Applicable Base Salary in effect on termination of employment, or (B) the
Applicable Base Salary which would otherwise be paid through the end of the
Term (calculated, if such termination occurs during the Extended Duties
Term, as though the Extended Duties Term lasts through the end of the
Term), and (iii) target Bonus for the year of termination (calculated as if
the Executive had remained in employment through the end of the applicable
Bonus Year) pro-rated to reflect the number of days of employment during
the year. In addition, (i) the Executive, or if applicable under the
particular benefit elected as provided above, the Executive's Spouse or the
Executive's estate, shall be entitled to a retirement benefit, calculated
as of the date immediately preceding the Date of Termination, commencing on
the earlier of (A) the Executive's death, (B) the Retirement Benefit
Commencement Date, (C) the date that is six (6) months following the date
the Executive "separates from service" (as defined for purposes of Section
409A of the Code), or (D) the Executive's "disability" (as defined for
purposes of Section 409A of the Code), in an amount equal to the Normal
Retirement Benefit (determined as if the Executive had terminated his
employment on the immediately preceding such death or Disability and
without actuarial adjustment on account of any accelerated commencement),
(ii) the Executive and/or his Spouse shall be entitled to the immediate
commencement of the Insurance Benefits, (iii) any unvested (or
unexercisable) stock options or unvested shares of restricted stock shall
become immediately vested (and exercisable), (iv) all Options shall
continue to be exercisable for the remainder of their original term, and
(v) any other stock options shall continue to be exercisable for one (1)
year following the Date of Termination.
For purposes of this Agreement "Disability" shall have the meaning set
forth in the applicable long-term disability plan maintained by the Company
which covers the Executive, or if no such policy is available, an
incapacity due to mental or physical illness or injury which prevents
Executive from substantially performing the duties required of Executive
hereunder and which will be more likely than not to extend beyond the end
of the Employment Term in the opinion of a physician selected by the
Company and reasonably acceptable to the Executive or the Executive's legal
representative.
(b) Termination for Cause or Without Good Reason. In the event the
Executive's employment is terminated by the Company for "Cause," or by the
Executive other than for "Good Reason," both as defined below, (i) the
Executive shall be entitled to all compensation and benefits accrued to the
Date of Termination, (ii) the Executive shall be entitled to a retirement
benefit, which shall commence on the Retirement Benefit Commencement Date
in an amount equal to the Normal Retirement Benefit, (iii) all stock
options shall expire unless specifically otherwise provided under the Plan
or the terms of any applicable agreement, and (iv) the Company shall have
no further obligation other than as provided in Section 8(f) below.
"Cause" shall mean: (A) the Executive is convicted of, or pleads nolo
contendere to, a felony; (B) the Executive willfully and continually fails
to substantially perform his duties hereunder (other than as a result of
incapacity due to physical or mental injury or illness), after the Board
delivers a written demand for substantial performance to the Executive that
specifies the manner in which the Board believes the Executive has failed
substantially to perform his duties hereunder and the Executive shall not
have corrected such failure (if correction is reasonably possible) within
fourteen (14) business days after his receipt of such demand (or, if such
failure cannot be corrected immediately, correction has commenced and is
diligently pursued until such failure is corrected); or (C) the Executive
engages in willful misconduct in the performance of his duties hereunder
that is demonstrably and materially injurious to the Company. No action, or
failure to act, by the Executive shall be considered "willful" if it is
done by the Executive in good faith and with the reasonable belief that his
action or omission was in the best interest of the Company.
(c) Termination Without Cause or for Good Reason. In the event the
Executive's employment is terminated by the Company other than for Cause,
or is terminated by the Executive for Good Reason, the Executive shall be
entitled to receive within thirty (30) days following termination (i) all
compensation and benefits accrued to the Date of Termination, (ii) a lump
sum amount equal to the Applicable Base Salary which would otherwise be
paid through the end of the Term (calculated, if such termination occurs
during the Extended Duties Term, as though the Extended Duties Term lasts
through the end of the Term), and (iii) target Bonus for the year of
termination (calculated as if the Executive had remained in employment
through the end of the applicable Bonus Year) pro-rated to reflect the
number of days of employment during the year. In addition, (i) the
Executive shall be entitled to a retirement benefit commencing on the
earlier of (A) the Retirement Benefit Commencement Date, or (B) the date
that is six (6) months following the date the Executive "separates from
service" (as defined for purposes of Section 409A of the Code), in an
amount equal to the Normal Retirement Benefit (without actuarial adjustment
on account of accelerated commencement), (ii) the Executive and his Spouse
shall be entitled to the immediate commencement of the Insurance Benefits,
(iii) any unvested (or unexercisable) stock options or unvested shares of
restricted stock shall become immediately vested (and exercisable), (iv)
all stock options, including the Options, shall continue to be exercisable
for the remainder of their original term, and (v) the Executive shall be
entitled to the benefits described in Section 6(c) and Section 7(b) above
for the remainder of the Term.
"Good Reason" shall mean any of the following: (i) involuntary loss of
Executive's title or position (including as a director) other than for
Cause, (ii) a material diminution in the nature or scope of the Executive's
duties or responsibilities or the assignment of any duties or
responsibilities materially inconsistent with his position at the Company,
(iii) the relocation of the Executive's principal office to a location more
than 25 miles from its current location, or (iv) the failure of the
Company, after five days notice, to comply with any of the terms contained
in Section 5, Section 6 or Section 7 of the Agreement.
(d) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than pursuant to
paragraph (a) above) shall be communicated by a written notice to the other
party. For purposes of this Agreement, a "Notice of Termination" shall mean
a notice which shall indicate the specific provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Any purported termination not
satisfying the requirements of this subsection (d) shall not be effective.
(e) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death,
or by reason of his Disability, the date all of the conditions to
constitute a Disability have occurred, or, if upon expiration of the Term,
the last day of the Term, (ii) if the Executive's employment is terminated
for Cause, the date specified in the Notice of Termination, and (iii) if
the Executive's employment is terminated for any other reason, the date
which is seven (7) days after the date on which the Notice of Termination
is given.
(f) Other Benefits. In addition to the foregoing, upon termination of
the Executive's employment for any reason whatsoever (including Cause), the
Executive shall receive such other benefits, if any, as may be provided to
him under the terms of any employee benefit, incentive, option, stock award
and other plans or programs of the Company in which he may be, or have
been, a participant.
(g) No Mitigation. The Executive shall have no obligation to take any
action to mitigate or offset any amounts payable by the Company pursuant to
this Section 8 by seeking other employment or otherwise, nor shall the
amount of any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the date of termination of the Executive's employment or
otherwise.
(h) Continuation of Agreement Provisions. The termination of the
Executive's employment for any reason whatsoever shall not operate to
terminate this Agreement as an entirety or to adversely affect the
respective continuing rights and obligations of the parties, all of which
shall survive the effective date of such termination of employment in
accordance with their respective terms.
(i) Obligations. The Company's obligations hereunder shall be absolute
and unconditional and shall not be affected by any circumstances,
including, without limitation, any setoff, counterclaim, recoupment,
defense or other right which the Company may have against the Executive or
anyone else. All amounts payable by the Company hereunder shall be paid
without notice or demand. Each and every payment made hereunder by the
Company shall be final and the Company will not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reason whatsoever.
9. Change in Control.
(a) In the event that there is a Change in Control, as defined below,
the Executive shall be entitled to terminate employment voluntarily for any
reason within ninety (90) days of the Change in Control. If the Executive
elects to terminate his employment he shall receive within ninety (90) days
following the Date of Termination: (i) all compensation and benefits
accrued through the Date of Termination, (ii) a lump sum amount equal to
the Applicable Base Salary which would otherwise be paid through the end of
the Term (in the amount in effect on the day immediately preceding the date
on which the Change in Control occurs and calculated, if such termination
occurs during the Extended Duties Term, as though the Extended Duties Term
lasts through the end of the Term) and (iii) target Bonus for the year of
termination (calculated as if the Executive had remained in employment
through the end of the applicable Bonus Year). In addition, (i) the
Executive shall be entitled to a retirement benefit commencing on the
earlier of (A) the Retirement Benefit Commencement Date, or (B) the date
that is six (6) months following the date the Executive "separates from
service" (as defined for purposes of Section 409A of the Code), or (C) the
occurrence an event described in Section 409A(a)(2)(A)(v), in an amount
equal to the Normal Retirement Benefit (without actuarial adjustment on
account of accelerated commencement), (ii) the Executive and his Spouse
shall be entitled to the immediate commencement of the Insurance Benefits,
(iii) any unvested (or unexercisable) stock options or unvested shares of
restricted stock shall become immediately vested (and exercisable), (iv)
all options shall continue to be exercisable for the remainder of their
original term, (v) the benefits in Section 6 and Section 7(a) - (d) shall
terminate, and (vi) the Company's requirement to nominate the Executive to
serve on the Board pursuant to Section 8 shall cease.
(b) If, following a Change in Control, as defined below, the
Executive's employment terminates, and a good faith dispute arises with
respect to the Executive's rights under this Agreement, all reasonable
costs incurred by the Executive in good faith in enforcing his rights under
this Agreement (including without limitation reasonable attorney's fees, so
long as the Executive ultimately receives a favorable award or judgment
with respect to any material claim made in such proceeding) shall be borne
by the Company.
(c) "Change in Control" of the Company shall mean a Change in Control
of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Act or any
successor thereto, provided that without limiting the foregoing, a Change
in Control of the Company also shall mean the occurrence of any of the
following events:
(i) any "person" (as defined under Section 3(a)(9) of the Act) or
"group" of persons (as provided under Section 13d-3 of the Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 or otherwise
under the Act), directly or indirectly (including as provided in Rule
13d-3(d)(1) of the Act), of capital stock of the Company the holders
of which are entitled to vote for the election of directors ("voting
stock") representing that percentage of the Company's then outstanding
voting stock (giving effect to the deemed ownership of securities by
such person or group, as provided in Rule 13d-3(d)(1) of the Act, but
not giving effect to any such deemed ownership of securities by
another person or group) equal to or greater than twenty-five percent
(25%) of all such voting stock;
(ii) during any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period constituted the Board
of Directors of the Company (including for this purpose any new
director whose election or nomination for election by the Company's
shareholders was approved by a vote of at least a majority of the
directors then still in office who were directors at the beginning of
such period) cease for any reason to constitute at least a majority of
the Board of Directors of the Company (excluding any Board seat that
is vacant or otherwise unoccupied); or
(iii) there shall be consummated any consolidation, merger, stock
for stock exchange or similar transaction (collectively, "Merger
Transactions") involving securities of the Company in which holders of
voting stock of the Company immediately prior to such consummation
own, as a group, immediately after such consummation, voting stock of
the Company (or, if the Company does not survive the Merger
Transaction, voting securities of the corporation surviving such
transaction) having less than fifty percent (50%) of the total voting
power in an election of directors of the Company (or such other
surviving corporation).
(d) In the event it shall be determined that any payment or
distribution of any type by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (the "Total Payments"), would
be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are collectively referred to
as the "Excise Tax"), then the Company shall, within thirty days following
the Executive's incurrence thereof, pay the Executive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Total Payments.
10. Confidentiality; Non-Solicitation.
(a) During the Term of this Agreement and for two (2) years after the
last day of the Term of this Agreement, the Executive shall not use for
competitive purposes, or divulge to any other person, firm or corporation
(otherwise than in furtherance of the business purposes of the Company, or
any of its subsidiary or affiliated companies), any confidential
information of the Company. "Confidential Information" shall mean all
information of a confidential nature, and may include information contained
in the current and potential customer lists, marketing and business plans
and financial records of the Company, and specifications of proprietary
products under development and not yet marketed or sold by the Company;
provided, that confidential information shall not include (and the
restrictions of this Section 10(a) shall not apply to) any information
which: (i) is at the time of disclosure, part of the public domain or
thereafter through no action of the Executive in violation of this
Agreement, becomes a part of the public domain or is generally known in the
computer outsourcing industry through no violation of this Agreement; (ii)
information which has been publicly disclosed by the Company or any parent,
subsidiary or affiliated corporation in public announcements, press
releases or in publicly available governmental filings; or (iii) is
required to be disclosed by court order or compliance with governmental
requirements or legal process.
(b) During the Term of this Agreement and for two (2) years after the
last day of the Term of this Agreement, the Executive shall not, on behalf
of himself or any other person, firm or entity (i) solicit any person
employed by the Company or any of its subsidiaries at the time of the
Executive's termination, for employment by the Executive or any other
person, firm or entity or (ii) solicit any client of the Company or any of
its subsidiaries at or prior to the time of the Executive's termination for
the provision of computer outsourcing services by any person, firm or
entity other than the Company and its subsidiaries.
(c) The Executive agrees that damages at law would not be an adequate
remedy for violation of the covenants set forth in this Section 10 by the
Executive, and he therefore agrees that these covenants may be specifically
enforced against him in any court of competent jurisdiction.
11. Merger or Reorganization.
This Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company or by any merger or consolidation where the Company
is not the surviving or resulting corporation, or upon any transfer of all or
substantially all of the assets of the Company. In the event of any such merger
or consolidation or transfer of assets, the provisions of this Agreement shall
be binding and shall inure to the benefit of the surviving or resulting
corporation or the corporation to which such assets shall be transferred, and
the Company shall require the successor to the Company as the Executive's
employer (whether such succession is direct or indirect, by purchase, merger,
consolidation or otherwise, to all or a substantial portion of the business
and/or assets of the Company) to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, the term "Company" shall mean the Company as hereinbefore defined and
any successor to all or a substantial portion of its business and/or assets as
aforesaid.
12. Arbitration.
Any controversy or claim arising out of or relating to this Agreement, the
breach thereof or the coverage of this arbitration provision shall be settled by
arbitration which shall be in accordance with the Commercial Arbitration Rules
of the American Arbitration Association as such rules shall be in effect on the
date of delivery of demand for arbitration. The arbitration of such issues,
including the determination of the amount of any damages suffered by either
party hereto by reason of the acts or omissions of the other, shall be to the
exclusion of any court of law. The decision of the arbitrators or a majority of
them shall be final and binding on both parties and their respective heirs,
executors, administrators, successors and assigns. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction.
There shall be three arbitrators, one to be chosen directly by each party at
will and the third arbitrator to be selected by the two arbitrators so chosen.
Such arbitration shall take place in New York, New York. Each party shall pay
the fees of the arbitrator selected by him and of his own attorneys and the
expenses of his witnesses and all other expenses connected with the presentation
of his case; provided that if the Executive is the prevailing party, all such
expenses shall be borne by the Company. All other costs of the arbitration,
including the cost of the third arbitrator, the record or transcripts thereof,
if any, administrative fees, and all other fees and costs shall be borne by the
Company.
Nothing contained herein shall be construed or interpreted to preclude the
Company prior to, or pending the resolution of, any matter subject to
arbitration from seeking injunctive relief in any court for any breach or
threatened breach of any of the Executive's agreements in Section 10 hereof.
13. Non-Assignability.
The obligations of the Executive hereunder are personal and may not be
assigned or transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer.
14. Amendment.
This Agreement contains the entire agreement of the parties. It may not be
changed orally but only by a written agreement executed by both of the parties
hereto.
15. Notices.
All notices which a party is required or may desire to give to the other
party under or in connection with this Agreement shall be sufficient if given by
addressing same to the other party as follows:
If to the Executive to:
Robert Wallach
Infocrossing, Inc.
2 Christie Heights Street
Leonia, New Jersey 07605
With a copy to:
Stephan G. Bachelder, Esq.
22 Free St., Suite 201
Portland, ME 04101
If to the Company to:
Infocrossing, Inc.
2 Christie Heights Street
Leonia, New Jersey 07605
Attention: Chairman
or at such other place as may be designed in writing by like notice. Any notice
shall be deemed to have been delivered when addressed as required herein and
deposited, postage prepaid, in the United States Mail.
16. Indemnification.
The Company will indemnify the Executive (and his legal representatives,
heirs, estate or other successors) to the fullest extent permitted (including
payment of expenses in advance of final disposition of any proceeding) by the
laws of the jurisdiction of the incorporation of the Company as in effect at the
time of the subject act or omission, or by the certificate of incorporation and
by-laws of the Company as in effect at such time or on the date of this
Agreement, or by the terms of any indemnification agreement between the Company
and the Executive, whichever affords or afforded greatest protection to the
Executive, and the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of its directors and officers (and to the extent the Company maintains such an
insurance policy or policies, the Executive shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the
coverage available for a person serving or having served in the positions and
offices in which the Executive is serving or has served), against all costs,
charges and expenses whatsoever incurred or sustained by him (or his legal
representatives, heirs, estate or other successors) at the time such costs,
charges and expenses are incurred or sustained, in connection with any action,
suit or proceeding to which he (or his legal representatives, heirs, estate or
other successors) may be made a party by reason of his being or having been a
director, officer or employee of the Company or any subsidiary, or by reason of
his serving or having served any other enterprise as a director, officer or
employee at the request of the Company or any subsidiary.
17. Waiver; Modification.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Executive and the Company. No waiver by either party at any time of any breach
by the other party of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver or
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
18. Severability.
The various Sections of this Agreement are severable, and if any Sections
or an identifiable part thereof is held to be invalid or unenforceable by any
court of competent jurisdiction, then such invalidity or unenforceability shall
not affect the validity or enforceability of the remaining Sections or
identifiable parts thereof in this Agreement, and the parties hereto agree that
the portion so held invalid, unenforceable or void shall, if possible, be deemed
amended or reduced in scope, or otherwise be stricken from this Agreement, to
the extent required for the purposes of the validity and enforcement hereof.
19. Choice of Law.
This Agreement shall be governed by the laws of the State of New York,
without reference to such State's conflict of law rules.
20. Entire Agreement.
This Agreement sets forth the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior agreements
between the Company and the Executive, whether written or oral, relating to any
or all matters covered by, and contained or otherwise dealt with, in this
Agreement. No agreements or representations, oral or otherwise, express or
implied, have been made by either party with respect to the subject matter of
this Agreement, unless set forth expressly in this Agreement.
21. Beneficiaries; References.
The Executive shall be entitled to select (and change, to the extent
permitted under any applicable law) a beneficiary or beneficiaries to receive
any compensation or benefit payable hereunder following the Executive's death,
and may change such election by giving the Company written notice thereof. In
the event of the Executive's death, Disability or a judicial determination of
his incompetence, all references in the Agreement to the Executive shall be
deemed, where appropriate, to refer to his beneficiary, estate or other legal
representative.
22. Compliance With Section 409A of the Code.
It is intended that all applicable provisions of this Agreement comply with
the requirements of Section 409A of the Code, and this Agreement shall be
interpreted and operated in accordance with such requirements, where applicable.
23. Paragraph Headings.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
hereinabove set forth.
INFOCROSSING, INC.
By: /s/ ZACH LONSTEIN
Name: Zach Lonstein
Title: Chief Executive Officer
THE EXECUTIVE
By: ROBERT B. WALLACH
Name: Robert Wallach