Exhibit 99.4
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 25th day of January, 2006, by and among Lawrence
Consulting Group, Inc., a Delaware corporation with its principal office at Two
Lakeside Drive West, Lawrence, New York 11559 ("LCG"), Plaza Consulting Group, a
Puerto Rico corporation with its principal office at 373 Mendez Vigo, Suite 110,
Dorado, Puerto Rico 00646 (the "Company"), and Elizabeth Plaza, residing at 363
Dorado Beach East, Dorado, Puerto Rico 00646-2096 ("Executive").
W I T N E S S E T H:
WHEREAS, the Company has engaged Executive as its president and chief
executive officer and desires to continue to obtain the benefits of Executive's
knowledge, skill and ability in connection with managing the operations of the
Company and to continue to employ Executive on the terms and conditions
hereinafter set forth; and
WHEREAS, pursuant to an agreement and plan of reorganization (the "Merger
Agreement") dated October 31, 2005, by and among LCG, Plaza Acquisition Corp., a
Puerto Rico corporation, the Company and Executive, the Company became the
wholly-owned subsidiary of LCG on or about the date of this Agreement; and
WHEREAS, LCG desires to engage Executive to serve at its president and
chief executive officer on and subject to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement, the parties agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions hereinafter set forth, LCG and the
Company hereby employ Executive as president and chief executive officer during
the Employment Term, as hereinafter defined. As president and chief executive
officer of LCG, Executive shall have the duties and responsibilities associated
with the president and chief executive officer of a public corporation. In
addition, Executive will assist LCG and the Company in identifying and training
her successor. Executive shall report to LCG's board of directors (the "Board").
Executive shall also perform such other duties and responsibilities as may be
determined by the Board, as long as such duties and responsibilities are
consistent with those of the president and chief executive officer.
(b) During the Employment Term, LCG shall include Executive as one of the
board of directors' nominees for election as a director, and, if elected as a
director, Executive shall serve as chair of the board. Additionally, Executive
shall serve as a director of the Company or any of its subsidiaries, if elected,
and in such executive capacity or capacities with respect to any affiliate of
LCG or the Company to which she may be elected or appointed, provided that such
duties are consistent with those of LCG's and the Company's president and chief
executive officer. Executive shall receive no additional compensation for
services rendered pursuant to this Section 1(b). An affiliate of LCG or the
Company shall mean any person who controls, is controlled by or is under common
control with LCG or the Company, as the case may be.
(c) The "Employment Term" shall mean the period commencing on the date of
this Agreement and ending eighteen (18) months from the date of this Agreement,
unless terminated earlier pursuant to Section 5 of this Agreement.
(d) Immediately following the Employment Term, unless this Agreement is
terminated by LCG or the Company pursuant to Section 5 of this Agreement,
Executive shall serve as a consultant to the Company during the Consulting Term.
The "Consulting Term" shall mean the eighteen (18) month period immediately
following the expiration or termination of the Employment Term. The Employment
Term and the Consulting Term are collectively referred to as the "Term."
(e) During the Consulting Term, Executive shall serve as a consultant to
the Company and shall report to such executive officer as shall be designated by
LCG's chief executive officer. The nature of Executive's services during the
Consulting Term shall be as mutually agreed upon by LCG's chief executive
officer and Executive, and may include services relating to the Company's
strategy for marketing its services and developing its business plan, expanding
the Company's client base and expanding the Company's and its affiliate's
operations into new geographic regions. Executive shall be required to devote
such time to her services for LCG and the Company as she may determine as long
as Executive devotes at least 40 hours per month to her services for the Company
and LCG, it being understood that the services being rendered during the
Consulting Term shall not be Executive's principal activity and that Executive
may engage in such business, charitable and personal activities as she may
determine, subject to the provisions of Sections 6, 7 and 8 of this Agreement.
In rendering services during the Consulting Term, LCG and the Company shall not
require Executive to perform services which would unreasonably interfere with
her other business, charitable and personal activities or which would require
her to return from or change her plans for any vacations, and, if she so elects,
Executive may perform such services from her residence. During the Consulting
Term, Executive shall not be an officer of LCG or the Company; however, she may
continue to serve as a director for the balance of her then current term and, if
elected as a director thereafter, she shall serve as a director without
additional compensation.
2. Executive's Performance. Executive hereby accepts the employment and
consultancy contemplated by this Agreement. During the Term, Executive shall
perform her duties diligently, in good faith and in a manner consistent with the
best interests of LCG and the Company, and, during the Employment Term, she
shall devote substantially all of her business time to the performance of her
duties under this Agreement.
3. Compensation and Other Benefits.
(a) For her services during the Employment Term, the Company shall pay
Executive a salary ("Salary") at the annual rate of $250,000. During the
Consulting Term, the Company shall pay Executive compensation ("Consulting
Compensation") at the annual rate of $75,000. All Salary and Consulting
Compensation payments shall be payable in such installments as the Company
regularly pays its executive officers, but not less frequently than
semi-monthly.
(b) In addition to Salary, Executive shall receive the following benefits
during the Employment Term:
(i) Such insurance, including major medical health insurance and life
insurance, as the Company provides its executive officers, which benefits will
not be less than the insurance benefits provided by LCG to its executive
officers.
(ii) Vacation in accordance with Company policy.
(iii) Eligibility to participate in such pension and other benefit plans
that are available to executive officers of the Company or LCG.
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(iv) A company automobile, provided, that the total costs for the
automobile, including lease payments, insurance, maintenance and any other costs
and expenses relating to the automobile shall not exceed $2,069 per month.
(c) During the Employment Term, Executive shall be eligible for such
discretionary bonuses and stock options or other equity-based incentives as
shall be determined by LCG's compensation committee; provided, however, that her
bonus shall not be less than 4% nor more than 50% of her Salary and any such
bonus shall be paid within 30 days of the completion of the audit for the year
for which the bonus relates.
(d) During the Consulting Term, Executive shall be entitled to the
benefits set forth in Section 3(b)(i) and, to the extent that consultants may
participate in such pension and other benefit plans, the plans set forth in
Section 3(b)(iii) of this Agreement.
4. Reimbursement of Expenses. The Company shall reimburse Executive, upon
presentation of proper expense statements, for all authorized, ordinary and
necessary out-of-pocket expenses reasonably incurred by Executive during the
Term in connection with the performance of her services pursuant to this
Agreement in accordance with the Company's expense reimbursement policy.
Executive's expenses shall include reasonable expenses relating to her
continuing education, as reasonably determined by the Company's board of
directors.
5. Termination of Employment.
(a) This Agreement and Executive's employment and consulting relationship
hereunder shall terminate immediately upon her death.
(b) This Agreement and Executive's employment and consulting relationship
pursuant to this Agreement, may be terminated by the Executive or LCG or the
Company on not less than 30 days' written notice in the event of Executive's
Disability. The term "Disability" shall mean any illness, disability or
incapacity of the Executive which prevents her from substantially performing her
regular duties for a period of two consecutive months or three months, even
though not consecutive, in any twelve month period; provided, however, that any
maternity leave or other condition covered by the Puerto Rico Fair Labor
Standards law shall not be counted toward such three or two month periods.
(c) The Company may terminate this Agreement and Executive's employment
and consulting relationship pursuant to this Agreement immediately for Cause, in
which event no further compensation shall be payable to Executive subsequent to
the date of such termination. The date of termination shall be the date of the
notice from the LCG or the Company stating that Executive's employment is
terminated for Cause. The term "Cause" shall mean:
(i) repeated failure of Executive to perform material instructions from
the Board, or, if Executive does not report to the Board, from the officer to
whom Executive reports, provided that such instructions are reasonable and
consistent with Executive's duties as set forth in Section 1 of this Agreement,
or any other failure or refusal by Executive to perform her duties required by
said Section; provided, however, that Executive shall have received notice from
the Board specifying the nature of such failure in reasonable detail and
Executive shall have failed to cure the failure within five business days after
receipt of such notice.
(ii) a breach of Sections 6, 7 or 8 of this Agreement;
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(iii) a breach of trust whereby Executive obtains personal gain or benefit
at the expense of or to the detriment of LCG or the Company or any of their
affiliates;
(iv) any fraudulent or dishonest conduct by Executive or any other conduct
by Executive which damages LCG, the Company or any of their affiliates or their
property, business or reputation.
(v) a conviction of, or guilty plea or plea of nolo contendere by, of
Executive of (x) any felony or (y) any other crime involving fraud, theft,
embezzlement or use or possession of illegal substances; or
(vi) the admission by Executive of any matters set forth in Section
5(c)(v) of this Agreement.
(d) Executive's resignation prior to the expiration of the Term shall be
treated in the same manner as a termination for Cause.
(e) In the event that the Company and LCG terminate this Agreement and
Executive's employment and consulting relationship other than for reasons set
forth in Sections 5(a), 5(b) or 5(c):
(i) The Company shall pay to Executive within 30 days after the date of
her termination an amount equal to the her Salary for the balance, if any, of
the Employment Term and her Consulting Compensation for the balance of the
Consulting Term;
(ii) The Company will provide Executive with the benefits set forth in
Section 3(b)(i) until the earlier of (x) the date the Term would have expired if
this Agreement had not been terminated pursuant to this Section 5(e), or (y) the
date Executive has insurance coverage provided by another employer.
(iii) If the termination of Executive's employment shall have occurred
during the Employment Term, the Company shall pay to Executive, at the time that
bonuses are awarded to executive officers, such percentage of the bonus that
would otherwise have been given to Executive for the fiscal year in which such
termination occurred based on percentage that the number of whole or partial
months during the fiscal year that she was employed by the Company bears to the
total number of whole or partial months during which she would have been
employed during such fiscal year if her employment had not been terminated.
(iv) The restrictions set forth in Section 7(a) of this Agreement shall
terminate immediately.
6. Trade Secrets and Proprietary Information.
(a) Executive recognizes and acknowledges that the Company, through the
expenditure of considerable time and money, has developed and will continue to
develop in the future information concerning customers, clients, marketing,
products, services, business, research and development activities and
operational methods of the Company and its customers or clients, contracts,
financial or other data, technical data or any other confidential or proprietary
information possessed, owned or used by the Company, the disclosure of which
could or does have a material adverse effect on the Company, its businesses, any
business in which it proposes to engage, its operations, financial condition or
prospects and that the same are confidential and proprietary and considered
"confidential
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information" of the Company for the purposes of this Agreement. In consideration
of her employment during the Employment Term and her engagement as a consultant
during the Consulting Term, Executive agrees that she will not, during or after
the Term, without the consent of the Board make any disclosure of confidential
information to any person, partnership, corporation or entity either during or
after the Term, except that nothing in this Agreement shall be construed to
prohibit Executive from using or disclosing (a) if such disclosure is necessary
in the normal course of the Company's business in accordance with policies or
instructions or authorization from the Board, (b) Executive can demonstrate that
such information shall have (i) become public knowledge other than by or as a
result of disclosure by a person not having a right to make such disclosure,
(ii) been developed by Executive independent of any of the Company's
confidential or proprietary information or (iii) been disclosed to Executive by
a person not subject to a confidentiality agreement with or other obligation of
confidentiality to the Company.
(b) In the event that any confidential information is required to be
produced by Executive pursuant to legal process, Executive shall give the
Company notice of such legal process within a reasonable time, but not later
than ten business days prior to the date such disclosure is to be made, unless
Executive has received less notice, in which event Executive shall immediately
notify the Company. The Company shall have the right to object to any such
disclosure, and if the Company objects (at the Company's cost and expense) in a
timely manner so that Executive is not subject to penalties for failure to make
such disclosure, Executive shall not make any disclosure until there has been a
court determination on the Company's objections. If disclosure is required by a
court order, final beyond right of review, or if the Company does not object to
the disclosure, Executive shall make disclosure only to the extent that
disclosure is required by the court order, and Executive will exercise
reasonable efforts at the Company's expense, to obtain reliable assurance that
confidential treatment will be accorded the Confidential Information.
(c) Executive shall, upon expiration or termination of the Term, or
earlier at the request of the Company, turn over to the Company or destroy all
documents, papers, computer disks or other material in Executive's possession or
under Executive's control which may contain or be derived from confidential
information. To the extent that any confidential information is on Executive's
hard drive or other storage media, she shall, upon the request of the Company,
cause either such information to be erased from her computer disks and all other
storage media or otherwise take reasonable steps to maintain the confidential
nature of the material.
(d) Executive further realizes that any trading in LCG's common stock or
other securities or aiding or assisting others in trading in LCG's common stock
or other securities, including disclosing any non-public information concerning
LCG and the Company to a person who uses such information in trading in LCG's
common stock or other securities, constitutes a violation of federal and state
securities laws. Executive will not engage in any transactions involving LCG's
common stock or other securities while in the possession of material non-public
information.
(e) For the purposes of Sections 6, 7, 8 and 9 of this Agreement, the term
"Company" shall include LCG, the Company, their subsidiaries and affiliates.
7. Covenant Not To Solicit or Compete.
(a) During the period from the date of this Agreement until two years
following the date on which Executive's employment or consulting relationship is
terminated, Executive will not, directly or indirectly:
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(i) persuade or attempt to persuade any person or entity which is or was a
customer, client or supplier of the Company to cease doing business with the
Company, or to reduce the amount of business it does with the Company (the terms
"customer" and "client" as used in this Section 7 to include any potential
customer or client to whom the Company submitted bids or proposals, or with whom
the Company conducted negotiations, during the term of Executive's employment or
consulting relationship hereunder or during the twelve (12) months preceding the
termination of her employment or consulting relationship, as the case may be);
(ii) solicit for herself or any other person or entity other than the
Company the business of any person or entity which is a customer or client of
the Company, or was a customer or client of the Company within one (1) year
prior to the termination of her employment or consulting relationship;
(iii) persuade or attempt to persuade any employee of the Company, or any
individual who was an employee of the Company during the one (1) year period
prior to the lawful and proper termination of this Agreement, to leave the
Company's employ, or to become employed by any person or entity other than the
Company; or
(iv) engage in any business in the United States whether as an officer,
director, consultant, partner, guarantor, principal, agent, employee, advisor or
in any manner, which directly competes with the business of the Company as it is
engaged in at the time of the termination of this Agreement, unless, at the time
of such termination or thereafter during the period that the Executive is bound
by the provisions of this Section 7, the Company ceases to be engaged in such
activity, provided, however, that nothing in this Section 7 shall be construed
to prohibit the Executive from owning an interest of not more than five (5%)
percent of any public company engaged in such activities.
(b) Executive will not, during or after the Term, make any disparaging
statements concerning the Company, its business, officers, directors and
employees that could injure, impair, damage or otherwise affect the relationship
between the Company, on the one hand, and any of the Company's employees,
suppliers, customers, clients or any other person with which the Company has or
may conduct business or otherwise have a business relationship of any kind and
description. The Company will not make any disparaging statements concerning
Executive; provided, however, that this sentence shall not be construed to
prohibit the Company from giving factual information concerning Executive in
response to inquiries that the Company believes are bona fide.
(c) The Executive acknowledges that the restrictive covenants (the
"Restrictive Covenants") contained in Sections 6 and 7 of this Agreement are a
condition of her employment and her consulting relationship are reasonable and
valid in geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part of any of the
Restrictive Covenants, is invalid or unenforceable, the remainder of the
Restrictive Covenants and parts thereof shall not thereby be affected and shall
remain in full force and effect, without regard to the invalid portion. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable because of the geographic or temporal scope of such
provision, such court shall have the power to reduce the geographic or temporal
scope of such provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable.
8. Inventions and Discoveries. Executive agrees promptly to disclose in
writing to the Company any invention, design, system, process, development or
other discovery or intellectual property (collectively, "inventions and
discoveries") conceived, created or made by her during the Term, whether created
or developed by herself or with others, whether during or after working hours,
in any
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business in which the Company is then engaged or which otherwise relates to any
product or service dealt in by the Company and such inventions and discoveries
shall be the Company's sole property, regardless of whether such inventions and
discoveries are otherwise treated as work performed for hire and regardless of
whether such inventions and discoveries are or can be patented, registered or
copyrighted. Upon the Company's request, Executive shall execute and assign to
the Company all applications for copyrights, trademarks and letters patent of
the United States and such foreign countries as the Company may designate, and
Executive shall execute and deliver to the Company such other instruments as the
Company deems necessary to vest in the Company the sole ownership of all rights,
title and interest in and to such inventions and discoveries, as well as all
copyrights and/or patents. Executive shall also give the Company all assistance
it may reasonably require, including the giving of testimony in any suit,
action, investigation or other proceeding in connection with the foregoing.
9. Injunctive Relief. Executive agrees that her violation or threatened
violation of any of the provisions of Sections 6, 7 or 8 of this Agreement shall
cause immediate and irreparable harm to the Company. In the event of any breach
or threatened breach of any of said provisions, Executive consents to the entry
of preliminary and permanent injunctions by a court of competent jurisdiction
prohibiting Executive from any violation or threatened violation of such
provisions and compelling Executive to comply with such provisions. This Section
9 shall not affect or limit, and the injunctive relief provided in this Section
9 shall be in addition to, any other remedies available to the Company at law or
in equity or in arbitration for any such violation by Executive. In the event an
injunction is issued against any such violation by Executive, the period
referred to in Section 7 of this Agreement shall continue until the later of the
expiration of the period set forth therein or one (1) month from the date a
final judgment enforcing such provisions is entered and the time for appeal has
lapsed. Subject to Section 7(c) of this Agreement, the provisions of Sections 6,
7, 8 and 9 of this Agreement shall survive any termination of this Agreement and
Executive's employment and consulting relationship pursuant to this Agreement.
10. Indemnification. LCG and the Company shall provide Executive with
payment of legal fees and indemnification to the maximum extent permitted by
LCG's or the Company's, as the case may be, certificate of incorporation,
by-laws and applicable law.
11. Representations by the Parties.
(a) Executive represents, warrants, covenants and agrees that she has a
right to enter into this Agreement, that she is not a party to any agreement or
understanding, oral or written, which would prohibit performance of her
obligations under this Agreement, and that she will not use in the performance
of her obligations hereunder any proprietary information of any other party
which she is legally prohibited from using.
(b) The Company represents, warrants and agrees that it has full power and
authority to execute and deliver this Agreement and perform its obligations
hereunder.
12. Miscellaneous.
(a) Executive will cooperate with LCG and the Company in connection with
the Company's application to obtain key-person life insurance on her life, on
which LCG and/or the Company will be the beneficiary. Such cooperation shall
include the execution of any applications or other documents requiring her
signature and submission of insurance applications and submission to a physical.
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(b) Any notice, consent or communication required under the provisions of
this Agreement shall be given in writing and sent or delivered by hand,
overnight courier or messenger service, against a signed receipt or
acknowledgment of receipt, or by registered or certified mail, return receipt
requested, or telecopier or similar means of communication if receipt is
acknowledged or if transmission is confirmed by mail as provided in this Section
12(b), to the parties at their respective addresses set forth at the beginning
of this Agreement or by telecopier to LCG at (516) 374-5393, the Company at
(787) 796-5168, or to Executive at (787) 278-0290, with notice to LCG or the
Company being sent to the attention of the individual who executed this
Agreement on its behalf. Any party may, by like notice, change the person,
address or telecopier number to which notice is to be sent. If no telecopier
number is provided for Executive, notice to her shall not be sent by telecopier.
(c) This Agreement shall in all respects be construed and interpreted in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Puerto Rico applicable to contracts executed and to be
performed wholly within such State, without regard to principles of conflicts of
laws except that the provisions of Section 10, as it relates to LCG, shall be
governed by the Delaware General Corporation law.
(d) Except for actions, suits, or proceedings taken pursuant to or under
Section 6, 7, 8 or 9 of this Agreement, any dispute concerning this Agreement or
the rights of the parties hereunder shall be submitted to binding arbitration in
San Juan, Puerto Rico before a single arbitrator jointly selected by the parties
under the rules of the American Arbitration Association. If the parties shall be
unable to agree upon an arbitrator, then each party shall designate one
arbitrator and the two arbitrators shall select a third arbitrator. The award of
the arbitrator shall be final, binding and conclusive on all parties, and
judgment on such award may be entered in any court having jurisdiction. The
arbitrator shall have the power, in his or her discretion, to award counsel fees
and costs to the prevailing party. The arbitrator shall have no power to modify
or amend any specific provision of this Agreement except as expressly provided
in Section 12(f) of this Agreement.
(e) Notwithstanding the provisions of Section 12(d) of this Agreement,
with respect to any claim for injunctive relief or other equitable remedy
pursuant to Section 9 of this Agreement or any claim to enforce an arbitration
award or to compel arbitration, the parties hereby (i) consents to the exclusive
jurisdiction of the United States District Court for the District of Puerto Rico
and the Puerto Rico courts located in San Juan, Puerto Rico, (ii) agree that any
process in any action commenced in such court under this Agreement may be served
upon it or her personally, either (x) by certified or registered mail, return
receipt requested, or by Federal Express or other courier service which obtains
evidence of delivery, with the same full force and effect as if personally
served upon such party in San Juan, Puerto Rico, or (y) by any other method of
service permitted by law, and (iii) waives any claim that the jurisdiction of
any such court is not a convenient forum for any such action and any defense of
lack of in personam jurisdiction with respect thereof. If an action may be
commenced pursuant to this Section 12(e), the complaint may, notwithstanding
Section 12(d) of this Agreement, include other claims against the other party,
even if such claims would otherwise be subject to arbitration pursuant to said
Section 12(e).
(f) If any term, covenant or condition of this Agreement or the
application thereof to any party or circumstance shall, to any extent, be
determined to be invalid or unenforceable, the remainder of this Agreement, or
the application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law, and any court or
arbitrator having jurisdiction may reduce the scope of any provision of this
Agreement, including the geographic and temporal restrictions set forth in
Section 7 of this Agreement, so that it complies with applicable law.
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(g) This Agreement constitute the entire agreement of the Company and
Executive as to the subject matter hereof, superseding all prior or
contemporaneous written or oral understandings or agreements, including any and
all previous employment agreements or understandings, all of which are hereby
terminated, with respect to the subject matter covered in this Agreement;
provided, however, that nothing in this Agreement shall be deemed to modify any
obligations which Executive may have pursuant to the Merger Agreement. This
Agreement may not be modified or amended, nor may any right be waived, except by
a writing which expressly refers to this Agreement, states that it is intended
to be a modification, amendment or waiver and is signed by both parties in the
case of a modification or amendment or by the party granting the waiver. No
course of conduct or dealing between the parties and no custom or trade usage
shall be relied upon to vary the terms of this Agreement. The failure of a party
to insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.
(h) No party shall have the right to assign or transfer any of its or her
rights hereunder except that LCG's and the Company's rights and obligations may
be assigned in connection with a merger of consolidation of LCG or the Company
or a sale by LCG or the Company of all or substantially all of its business and
assets.
(i) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, executors, administrators
and permitted assigns.
(j) The headings in this Agreement are for convenience of reference only
and shall not affect in any way the construction or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
LAWRENCE CONSULTING GROUP, INC.
By:
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Name:
Title:
PLAZA CONSULTING GROUP, INC.
By:
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Name:
Title:
EXECUTIVE:
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Elizabeth Plaza
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