THIS
EMPLOYMENT AGREEMENT (“Agreement”) dated as of the 15th
day of August, 2005 (the “Effective Date”) is made and
entered into by and between enherent Corp., and its affiliates,
associated companies, subsidiaries, parent, divisions or related
entities (collectively “Company”), a Delaware
corporation, having a principal place of business at 192 Lexington
Avenue, New York, New York 10016 and Karl Brenza
(“Employee”), an individual residing at 26 Cherry
Street, Katonah, New York, 10536.
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1.
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TITLE. The Company hereby employs Employee,
as chief financial officer (“CFO”). Employee will be
based in the metropolitan New York/New Jersey area. The Company
will provide Employee with an office and appropriate computer and
communications at its offices in that area and Employee hereby
accepts employment in such capacity and subject to the conditions
set forth in this Agreement.
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2.
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TERM. The initial term of this Agreement
is for three (3) years, commencing on the Effective Date
reflected above (the “Initial Term”). This Agreement
shall automatically renew for subsequent one-year terms, unless and
until terminated by either party in accordance with the provisions
of Section 8. The entire period this Agreement remains in
effect is referred to as the “Employment
Period”.
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Subject to the provisions of
Section 8 allowing the Employee to resign for Good Reason, it
is expressly understood and agreed that any changes in the
Employee’s duties, location or title will not constitute a
breach or termination of this Agreement. At the option of the
parties, such changes may be incorporated into an
“Addendum” to this Agreement. Failure to so incorporate
such changes will not affect the validity of, or the enforceability
of, the other terms herein.
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3.
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COMPENSATION.
The Company shall pay to
Employee the following compensation, subject to applicable
withholdings, for all the services to be rendered by Employee in
any capacity:
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a. Base
salary. Effective as of
the date hereof, Employee shall be entitled to receive a base
salary of one hundred and eighty thousand dollars ($180,000) per
year (“Annual Base Salary”) payable on a semi-monthly
basis or in accordance with Company’s then current policies
and procedures. The term “Annual Base Salary” shall
after the first year of this Agreement refer to the Annual Base
Salary as increased as set forth below.
b. Effective
August 15, 2006, Employee shall be entitled to receive a base
salary of one hundred and ninety eight thousand dollars ($198,000),
per year payable on a semi-monthly basis in accordance with
Company’s then current policies and procedures. Effective
August 15, 2007, Employee shall be entitled to receive a base
salary of two hundred seventeen thousand eight hundred dollars
($217,800), per year payable on a semi-monthly basis in accordance
with Company’s then current policies and
procedures.
c. Paid Time
Off. Employee shall be
entitled to receive fifteen (15) days paid vacation each year,
and to six (6) personal and sick days. Otherwise, entitlement
to and use of such paid time off shall be in accordance with the
Company’s Employee Handbook.
d. Annual
Cash Bonus. For each year
of the Term, the Executive shall participate in an annual cash
bonus plan per the terms of Attachment A hereto.
e. Equity
Based Compensation. Company shall grant to Employee restricted stock
equal to one percent (1%) of the outstanding shares of enherent
Corp. Common Stock on the date of grant in accordance with the
terms of the Restricted Stock Agreement to be executed between the
parties. Such restricted stock shall vest as follows: one-half on
the date that is six (6) months from the Effective Date of
this Agreement; and one-half on the first anniversary date of this
Agreement (“Restricted Stock Vesting Schedule”). In
addition, the Company shall grant to Employee options to purchase
the equivalent of two percent (2%) of the outstanding shares of
enherent Common Stock on the date of grant in accordance with
the Stock Option Award Agreement to be executed between the
parties. For the purpose of determining the number of option shares
to be awarded, restricted stock awarded under this Agreement shall
not be considered outstanding. Such options will vest as follows:
one-eighth on a quarterly basis, on the first day of each quarter,
starting with the fourth quarter 2006 (“Option Vesting
Schedule”). In the event Employee is terminated without
Cause, the Restricted Stock and Option Vesting Schedules set forth
above shall be accelerated by six (6) months. In the event of
a Change of Control (as herein defined), any unvested options to
purchase Company Stock or restricted stock granted to Employee
shall become fully vested and exercisable. Employee shall retain
any vested options , including those that have vested as a result
of acceleration, upon the termination of employment for any reason
other than for Cause (as herein defined) and any vested options
shall remain exercisable for a three (3) year period from the
date of termination (but not later than the applicable expiration
date). Employee shall retain any vested Restricted Stock, including
stock that has vested as a result of acceleration, upon termination
of employment for any reason.
f.
Benefits. Employee shall
be eligible for the Company’s benefits during the Employment
Period in accordance with the terms of any employee plans,
policies, and practices of the Company applicable to executive
employees generally, which may include retirement program, 401(k),
defined benefits and cafeteria plans, a group life insurance plan,
salary continuation program for a surviving spouse of key
employees, disability plan for key employees, medical and health
plans, vacation policies and other present or equivalent successor
plans and practices of the Company for which officers, or
dependents and beneficiaries, generally are eligible, and to all
payments or other benefits under any such plan or practice after
the period of employment as a result of participation in such
plan or practice during the Employment Period.
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4.
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JOB DESCRIPTION AND
DUTIES. A
copy of the CFO job description is attached to this Agreement.
Employee shall perform such work as may be required of Employee by
Company in accordance with the job description, as well as the
instructions, directions and control of Company and at such
reasonable time and places as Company may determine. At all times
during the Employment Period, Employee shall adhere to all the
rules and regulations that have been or that may hereafter be
established by Company for the conduct of its employees and
further, Employee shall adhere to all the provisions of the
Company’s handbook(s). If there is a conflict between this
Agreement and the Company’s handbook, this Agreement shall
control.
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5.
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BACKGROUND CHECK.
Employee hereby consents
to the conducting of a background check by Company and/or
Company’s broker, customer and/or client to the full extent
permitted by law. Such a background check may include, but shall
not be limited to, a judgment and public criminal record check,
fingerprinting, and drug and/or alcohol screening and shall be
conducted prior to this Agreement being executed by both parties.
The Employee agrees not to hold Company
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and/or its
customer(s) and/or client(s) liable for any claims in connection
with such checking or testing or the reporting of the results
thereof to Company.
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6.
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BUSINESS ACTIVITY.
Employee shall devote
full and complete attention and energies to the business of
Company, and shall not during the term of this Agreement be engaged
in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage
and whether or not said other business activity is directly,
indirectly or unrelated to the business activity of Company,
without the express written consent of Company. However, this shall
not be construed as preventing Employee from investing
Employee’s assets in such form or manner as will not require
any services on Employee’s part in the operation of the
affairs of the companies in which such investments are made;
provided, however, that any investment in any non-public companies
shall not be in companies having allied or related business
activities to Company.
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7.
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EXPENSES. The Company will reimburse Employee
for reasonable and customary expenses incurred by Employee in the
course of this employment provided that such expenses are
reimbursable by Company policy, and further, that such expenses are
authorized by Company and an accounting is made to Company, in
accordance with the procedures of Company.
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8.
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TERMINATION. The Employment Period may be
terminated as follows:
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a. either party
may terminate the Employment Period by giving written notice of
non-renewal to the other in accordance with Section 20, at
least ninety (90) days prior to the expiration of the Initial
Term or the expiration of any renewal term, and if such notice is
given, the Employment Period shall terminate as of the term’s
expiration date; and if the notice of non-renewal is from the
Company, Employee shall be entitled to receive as severance an
amount equal to three (3) months of Employee’s then
current Annual Base Salary and minimum bonus as defined in
Attachment A, if applicable (less all applicable and required
federal, state, local and authorized deductions), to be paid
pursuant to Company’s regular payroll schedule;
b. the
Employment Period shall automatically terminate (i) upon the
death or retirement of Employee, (ii) if Employee gives
written notice to the Company in accordance with Section 20 of
termination without Good Reason, or (iii) if the Employee
fails to render the services provided for hereunder for a
continuous period of sixty (60) days because of
Employee’s physical or mental disability;
c. the Company
may terminate the Employment Period without Cause by delivering
written notice to the Employee in accordance with Section 20,
and the Employment Period shall terminate upon delivery, in which
case Employee shall be entitled to receive as severance an amount
equal to six (6) months of Employee’s then current
Annual Base Salary and minimum bonus as defined in Attachment A, if
applicable(less all applicable and required federal, state, local
and authorized deductions);
d. the Employee
may terminate the Employment Period for Good Reason (as defined
below) by delivering written notice to the Company in accordance
with Section 20, and the Employment Period shall terminate
upon delivery, in which case Employee shall be entitled to receive
as severance an amount equal to nine (9) months of
Employee’s then current Annual Base Salary and minimum bonus
as defined in Attachment A, if applicable (less all applicable and
required federal, state, local and authorized deductions), to be
paid pursuant to Company’s regular payroll
schedule;
e. the Employee
may terminate the Employment Period in the event of a Change in
Control (as defined below) of the Company that occurs more than
sixty days prior to the expiration of a term or within six months
after the Change in Control, and that results in a reduction in
compensation or a material change in duties, title, or transfer to
a location greater than seventy five miles from the
Employee’s residence, during the term of this Agreement by
delivering written notice to the Company in accordance with
Section 20, and the Employment Period shall terminate upon
delivery,; in which case Employee shall be entitled to receive as
severance an amount equal to nine (9) months of
Employee’s then current base salary and minimum bonus as
defined in Attachment A, if applicable (less all applicable and
required federal, state, local and authorized deductions), to be
paid pursuant to Company’s regular payroll schedule;
or
f. the Company
may terminate the Employment Period with Cause by delivering
written notice to the Employee in accordance with Section 20,
and the Employment Period shall terminate upon delivery. For
purposes of this Section 8 “Cause” shall mean: (a)
Employee’s embezzlement, willful breach of fiduciary duty or
fraud with regard to the Company or any of the Company’s
assets or businesses, (b) Employee’s conviction of, or
pleading of guilty or nolo contendere, with regard to
a felony (other than a traffic violation) or to any other crime
involving moral turpitude or involving activity related to the
affairs of the Company, or (c) any other willful (and if, the
breach relates to performance of his duties, continued) breach by
Employee of a material provision of this Agreement that, if capable
of being cured, remains uncured for thirty (30) days after
written notice thereof is given to Employee. If the breach is not
curable, the Company may terminate without notice. In the event the
Company terminates the Employment Period for Cause, the
Company’s sole obligation is to pay Employee for that period
actually worked by Employee, subject to any direct financial loss
to the Company resulting from Employee’s breach. If within
60 days following the Employee’s termination of
employment the Company discovers circumstances which would have
permitted it to terminate the Employee’s employment for Cause
had such circumstances been known to the Company prior to the
Employee’s termi
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