POMEROY IT SOLUTIONS, INC.
EMPLOYMENT AGREEMENT
THIS
AGREEMENT is made and entered into this day
of
,
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------------
2005, by and between POMEROY IT SOLUTIONS, INC. ("Company"), a Delaware
corporation, and
KEVIN GREGORY ("Employee").
W I T N E S S E T H:
WHEREAS, the Company
desires to employ Employee and Employee desires to be
employed by
the Company;
WHEREAS, the
parties desire to enter into an Employment Agreement to
provide responsibilities, duties, benefits, and compensation for
Employee;
NOW,
THEREFORE,
in consideration of
the foregoing premises and the mutual
covenants herein
set forth, the parties hereby covenant
and agree as follows:
1.
Employment. The Company agrees to employ the Employee, and
the
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Employee agrees
to be employed by the Company, upon the following
terms and
conditions.
2.
Term. The initial term
of Employee's employment pursuant to this
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Agreement shall
begin on the January 3, 2006 ("effective date"), and
shall
continue for
a period of three (3)
years thereafter, unless terminated earlier
pursuant to
the provisions of Section 10, provided
that Sections 8, 9, 10(b),
11, if applicable, and
12, if applicable, shall survive the termination of such
employment and shall expire in accordance with the terms set forth
therein.
3.
Renewal Term.
The
term of Employee's employment shall
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automatically renew
for additional consecutive renewal terms of one
(1) year
unless either
party gives written notice of his/its intent not to
renew the
terms of the Agreement ninety (90) days prior to the expiration
of the then
expiring term.
Employee's base salary for each renewal term shall be
negotiated
and mutually
agreed upon by and
between the Company and Employee. However, in
no event shall Employee's annual base
salary for any renewal term be less than
the base salary in effect for the prior year.
4.
Duties.
Employee shall serve as Chief Financial Officer. Employee
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shall be responsible
to and report directly to Steve Pomeroy, the President and
Chief Executive
Officer of the
Company. Employee shall devote his best efforts
and substantially
all his time during normal business hours
to the diligent,
faithful and
loyal discharge of the duties of his employment
and towards the
proper, efficient
and successful conduct of the Company's affairs.
Employee
further agrees
to refrain during the term of this Agreement from
making any
sales of competing services or products or
from profiting from any transaction
involving computer
services or products for his account without the
express
written consent
of Company.
5.
Compensation. For all
services rendered by
the Employee under
this
------------
Agreement, Employee
shall receive compensation based on the
compensation plan
attached hereto and incorporated herein by reference as Exhibit
"A".
(a)
Signing Bonus - The
Company hereby agrees to provide Employee
with a signing bonus, in the form of 50,000 fully vested stock
options, as
additional consideration for his execution of and agreement to the
terms of this
Agreement. Employee
understands that the
Company's award of such stock options
is contingent upon his execution of this Agreement with the Company
and that the
award shall
be made on the
effective date hereof as follows: Employee shall be
awarded the
right to acquire 50,000 shares of common
stock, .01 par value, of
Pomeroy IT
Solutions,
Inc., which shall be fully vested and subject to
the
conditions contained
in the Pomeroy IT Solutions, Inc., Non-Qualified and
Incentive Stock
Option Plan and the Award Agreement. The term of the
Award
Agreement shall
be five (5) years. Such award of the
stock options to acquire
the common
stock of Pomeroy IT Solutions, Inc., shall be at
the fair market
value of such common stock as of the applicable date. For
purposes of this
Agreement, the
fair market value as of the applicable date shall mean
with
respect to
the common shares, the
average between the high and low bid and ask
prices for
such shares on the
over-the-counter market on the last business day
prior to the date on
which the value is to be determined (or the next preceding
date on which sales occurred if there were no sales on such
date).
Furthermore, so long
as Employee remains employed by the Company
during the term of
this Agreement, he shall be awarded (a) the right to acquire
25,000 shares of common stock, $.01 par value, of Pomeroy IT
Solutions, Inc., at
the end of the first year of the initial term of
this Agreement; and (b) the
right to acquire 25,000 shares of
<PAGE>
common stock,
$.01 par value, of
Pomeroy IT Solutions, Inc., at the end of the
second year
of the initial term of this
Agreement. Employee
acknowledges and
understands that
any such stock options
awarded to him hereunder at the end of
the first and second year of the initial term of this Agreement
shall be subject
to a three (3) year vesting schedule
and any other conditions contained in the
Pomeroy IT
Solutions,
Inc., Non-Qualified
and Incentive Stock Option Plan and
the Award Agreement. Such award of the stock options to acquire the
common
stock of Pomeroy IT Solutions, Inc., shall
be at the fair market value of such
common stock
as of the applicable date. For purposes of this Agreement,
the
fair market
value as of the applicable date shall mean with
respect to the
common shares, the
average between the high and low bid and ask prices for such
shares on the over-the-counter market on the last business day
prior to the date
on which the value is to be determined (or the next
preceding date on which
sales occurred
if there were no sales on such date).
(b)
Employee hereby
acknowledges that
Company reserves the right
to modify,
alter, or amend such pay plan, at any
time, in the event there are
changes in the Company's business model due to events which
include, but are not
necessarily limited
to mergers, acquisitions, corporate
re-organization/re-structure, material changes to industry standards or
practices which affect the Company. Any and all such modifications
shall be made
by mutual agreement of the parties, reduced
to writing as an amendment to this
Agreement and
signed by both parties. So long as any such modifications,
alterations or
amendments
to the compensation
plan provided in this Section 5
and Exhibit
A hereto are agreed to in writing by the
parties same shall not
constitute a
breach of this Agreement or otherwise
qualify as a default event
hereunder.
6.
Fringe Benefits.
During the term of
this Agreement, Employee shall
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be entitled
to the following benefits:
(a)
Health Insurance - During the term of this Agreement, Employee
shall be provided with the standard medical health and insurance coverage
maintained by Company on its employees.
(b)
Vacation -
Employee shall be
entitled each year to three (3)
weeks vacation,
during which time his compensation will be paid in
full, in
accordance with the Company's standard written policy for same.
(c)
Retirement Plan
- Employee shall participate, after
meeting
eligibility requirements, in any qualified retirement plans and/or
welfare plans
maintained by the Company during the term of this Agreement.
(d)
Automobile Allowance -
Company shall provide Employee with an
automobile allowance
as provided for on
Exhibit A hereto in the sum of $900.00
per month during the term of this Agreement.
Employee shall be responsible for
all maintenance
and repairs to such vehicle and for any insurance
coverage
relating thereto.
(e)
Communications Allowance - Company shall provide Employee with
a communication
allowance as provided for on Exhibit A hereto in the sum
of
$250.00 per
month during the term of this Agreement. Said communication
allowance is intended
to defray or offset expenses incurred by Employee for use
of any and all remote communication devices in the course and scope of
Employee's employment
hereunder,
including,
but not limited to, mobile
telephones, hand-held
wireless devices and/or Internet access.
(f)
Moving Allowance
- The Company shall
provide Employee with a
moving allowance
of up to a maximum of $65,000.00. The allowance shall
be
provided to
Employee as follows:
(i) up to $15,000.00 for expenses directly related to and
incurred incident
to Employee's travel, lodging and meal expenses for
house
hunting related activities in the Greater Cincinnati area and for a
professional
moving company
to transport Employee's personal property from his current
Michigan residence
to his new residence in the Greater
Cincinnati area.
All
such expenses
shall be documented, substantiated, and
directly billed to the
Company by
a third party in order for such
expenses to be paid for under this
Section 6(f)(i).
Employee
understands, agrees and acknowledges that he shall
be responsible
for obtaining three (3) competitive bids for the
professional
moving services
contemplated hereunder
, that Employee shall provide copies of
such bids to Company and that Employee shall
contract the services of the best
and lowest
professional bidder.
In no event, however,
shall the allowance for
the above referenced expenses exceed $15,000.00.
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<PAGE>
(ii) Up to $50,000.00 in the form of
reimbursement to Employee
for real estate agent/broker commissions
related to or arising out of the sale
of Employee's current
Michigan residence and closing costs incurred by Employee
incident to
the closing on the sale of his current
Michigan residence and/or
closing and financing
costs incurred by Employee incident to the closing on the
purchase of
his new residence in the Greater Cincinnati area. All such
commissions and/or
closing costs must be submitted to Company
by Employee for
reimbursement, along
with copies of Settlement Statements or other closing
documents that
substantiate
Employee's
claim for reimbursement under this
Section 6(f)(ii).
In addition, the Company understands that Employee
shall
provide it
with a statement of such amounts, along with an analysis that
includes the grossed
up tax effect on such sums in order for Employee to claim,
subject to the $50,000.00 cap stated above, reimbursement from the
Company under
this Section
6(f)(ii) for the taxes on the underlying
reimbursements made to
Employee hereunder
for commission, closing and financing costs.
In no event
shall the reimbursement that Employee is eligible for under this Section
6(f)(ii) exceed
$50,000.00.
(iii) In the event Employee voluntarily terminates his
employment with
Pomeroy within one (1) year from the date of this
Agreement,
Employee understands, acknowledges and agrees that he must
reimburse Pomeroy, in
full, for all payments made to or on behalf of Employee
by the Company under
this Section
6(f).
(g)
Country Club
Membership
- Subject to the CEO's final
approval, Employee
shall be entitled to select and join a club of his choice in
the Greater Cincinnati/Northern Kentucky area. The Company shall be
responsible
for the payment of the
initiation fee charged by such club incident to Employee
becoming a
member so long as such
membership has been approved by the CEO. In
addition, the
Company shall be responsible for the recurring
membership dues
charged for
Employee to be a member of the club. Employee understands and
acknowledges that
the membership shall be established in the name of the
Company, but shall be
designated as a membership established for the benefit of
and use by Employee.
Any and all rights and interest in the membership shall be
vested in the Company. Employee shall be responsible for any and all
other
expenses or
costs associated with the club membership, including, but not
limited to charges for
food, beverages, greens fees, cart fees, and court time,
unless such
expenses are incurred for business purposes and are otherwise
reimbursable by
the Company under the
Company's standard expense reimbursement
policy.
(h)
Life Insurance - If
applicable, Company shall maintain on the
life of Employee, provided he is insurable at standard rates a term life
insurance policy in the amount provided for on Exhibit A hereto.
Employee shall
have the right to
designate the beneficiary of such policy. Employee agrees to
take any and all physicals that are necessary
incident to the issuance and/or
renewal of
said policy. In addition, Employee agrees to take any and all
physicals that are necessary incident to the procurement of key
person insurance
upon his life by Company. In the even that Employee is not insurable at
standard rates
during the term of this Agreement, but Employee is able
to
procure rated
coverage, Employee shall have the right to procure coverage for
a
lower amount of
insurance, the cost of which is equivalent to the standard term
rate cost of the
amount of coverage stated on Exhibit A. In the event Employee
is not insurable, then Company shall pay Employee an amount equal to the
projected cost
of the contemplated term insurance in the amount stated on
Exhibit A at standard rates.
(i)
Employee shall be
responsible for any and all taxes, owed, if
any, on the fringe benefits provided to him pursuant to this
Section 6.
7.
Expenses. During
the term of Employee's employment hereunder,
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Employee shall
be entitled to receive prompt reimbursement for all other
reasonable and
customary expenses incurred by Employee in fulfilling
Employee's
duties and
responsibilities hereunder, provided that such expenses are
incurred
and accounted for in
accordance with the policies and procedures established by
Company and such
expenses should not otherwise be paid for directly by Employee
incident to the home office/commu
