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 terminate ...
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