EXHIBIT 10.2
December 12, 2005
Mr. Michael El-Hillow
5916 Watson Drive
Fort Collins, CO 80528
Dear Mr. El-Hillow,
1. General. Effective January
3, 2006, MTM Technologies, Inc. (the "Company")
hereby employs
you (the "Executive"), and the Executive accepts employment
by the Company
as Senior Vice President and Chief Financial Officer of the
Company. The
Executive shall be employed by the Company on an "at-will"
basis and the
Company and the Executive shall have the right to terminate
this Letter
Agreement ("Agreement") at any time upon thirty (30) days
written notice
to the other party.
2. Duties and Status. During
the period that the Executive is employed by the
Company (the
"Employment Period"), the Executive shall report directly to
the Chief
Executive Officer of the Company and exercise such authority,
perform such
executive duties and functions and discharge such executive
responsibilities
as are reasonably associated with the Executive's
position,
consistent with the responsibilities assigned to officers of
companies
comparable to the Company, commensurate with the authority
vested
in the Executive
pursuant to this Agreement and consistent with the By-laws
of the Company.
The Executive will render such business and professional
services in the
performance of his duties, consistent with the Executive's
position within
the Company, as shall reasonably be assigned to him by the
Chief Executive
Officer of the Company. During the Employment Period, the
Executive shall
devote substantially all of his business time and his full
skill and
efforts to the business of the Company.
3. Compensation; Benefits and
Expenses .
a. Salary. During the
Employment Period, the Company shall pay to the
Executive, as compensation for the performance of his duties
and
obligations under this Agreement, a base salary at the rate of
$290,000 per annum, payable in arrears not less frequently than
monthly in accordance with the normal payroll practices of the
Company. The Executive's base salary shall be subject to review
each
year for possible increase by the Board in its sole discretion, but
in
no event shall such base salary be decreased from its then
existing
level during the Employment Period.
b. Bonus. In addition to the
base salary payable to the Executive
hereunder, the
Executive also shall be entitled to receive additional
compensation, at such times and in such amounts, as shall be
determined in the sole discretion of the Board and the
Compensation
Committee thereof, consistent with the management bonus plan of
the
Company in effect from time to time for senior executives, if
any.
c. Stock Options. Subject to
the approval of the Board and the
Compensation Committee thereof, the Executive shall be entitled
to
receive awards under any stock option or equity based incentive
compensation plan or arrangement adopted by the Company during
the
Employment Period for which senior executives are eligible. The
level
of the Executive's participation in any such plan or arrangement
shall
<PAGE>
be determined in the sole discretion of the Board and the
Compensation
Committee thereof.
d. Vacation and Sick Leave. The
Executive shall be entitled to four (4)
weeks paid vacation time per calendar year and such paid sick leave
as
is in accordance with the normal Company policies and practices
in
effect from time to time for senior executives; provided,
however,
that no more
than two weeks of such vacation time may be used
consecutively, and provided, further, that any accrued but
unused
vacation time and paid sick leave remaining at the end of each
calendar year shall be forfeited.
e. Other Benefits. During the
Employment Period, the Executive shall be
entitled to participate in all of the employee benefit plans,
programs
and arrangements of the Company in effect during the Employment
Period
which are generally available to the most senior executives of
the
Company (including, without limitation, 401(k) and group
medical
insurance plans), subject to and on a basis consistent with the
terms,
conditions and overall administration of such plans, programs
and
arrangements.
f. Expenses. In addition to any
amounts payable to the Executive pursuant
to this Section 3, the Company shall reimburse the Executive
upon
production of accounts and vouchers or other reasonable evidence
of
payment by the Executive, all in accordance with the Company's
regular
procedures in effect from time to time, all reasonable and
ordinary
expenses as shall have been incurred by him in the performance of
his
duties hereunder.
4. Termination Without Cause or
for Good Reason. Notwithstanding any other
term of this
Agreement, in the event of a termination of the Executive's
employment on or
before the fourth (4th) anniversary date of this Agreement
(x) by the
Company other than for "cause" (as defined in Section 4(d)
hereof) or (y)
by the Executive for "good reason" (as defined in Section
4(e) hereof) or
(z) as a result of death or Permanent and Total Disability
(as defined in
Section 4(g) hereof), in each case the Company shall provide
to the Executive
(or his legal representative) (i) the rights, payments and
benefits payable
at such times as set forth herein, and (ii) a release and
waiver of claims in
favor of the Executive, substantially in the form
attached hereto
as Exhibit A, as consideration for the execution and
non-revocation
by the Executive of a release agreement in favor of the
Company and its
shareholders and their respective directors, officers and
employees,
substantially in the form attached hereto as Exhibit B:
a. Salary. A continuance of his
salary at one hundred percent (100%) of
his then current base salary, as a severance payment, for a
period
equal to one (1) year from the date of termination of the
Executive's
employment (the "Severance Period"). Any payments pursuant to
this
Section 4(a) shall be in lieu of any other severance benefits to
which
the Executive is entitled pursuant to any other severance
plans,
programs, arrangements, or policies of the Company.
b. Options. The impact of the
Executive's termination of employment on
the stock options held by the Executive shall be governed by
the
applicable stock option plan and agreement. Notwithstanding the
foregoing, any stock options granted to the Executive on or after
the
date hereof shall provide that, upon termination of the
Executive's
employment by the Company other than for "cause" or by the
Executive
for "good reason", any unvested shares subject to such options
shall
become fully vested and immediately exercisable in connection
with
such termination
and shall remain exercisable up to and including the
termination date of such options.
2
<PAGE>
c. Other Benefits. During the
Severance Period, the Executive will be
entitled to a continuance of coverage under all health, life,
disability and similar employee benefit plans and programs of
the
Company on the same basis as the Executive was entitled to
participate
immediately prior to the Severance Period, provided that the
Executive's continued participation is possible under the
general
terms and provisions of such plans and programs. In the event that
the
Executive's participation in any such plan or program is barred
for
any reason, the Company shall arrange to provide the Executive
with
benefits substantially similar to those which the Executive
would
otherwise have been entitled to receive under such plans and
programs
from which his continued participation is barred; provided,
however,
that the aggregate cost of providing benefits to the Executive
pursuant to this Section 4(c) shall not be materially increased as
a
result of providing such alternative coverage. In the event that
the
Executive is covered under substitute benefit plans of another
employer prior to the expiration of the Severance Period, the
Company
will no longer be obligated to continue the respective
coverage's
provided for in this Section 4(c).
d. Cause. For purposes of this
Agreement and subject to the Executive's
opportunity to cure as provided in Section 4(f) hereof, the
Company
shall have "cause" to terminate the Executive's employment
hereunder
if such termination shall be the result of:
i. the Executive's failure to comply in any material manner with
the
reasonable policies and rules of the Company or the directives
of
the Board; or
ii. the Executive's performance of any material act of fraud or
dishonesty in connection with the performance of his duties
hereunder; or
iii. the Executive's gross negligence or willful misconduct in
the
performance of his duties hereunder; or
iv. the Executive's conviction for, or plea of nolo contendere to,
a
felony or misdemeanor resulting in a jail sentence or any crime
involving moral turpitude; or
v. any material breach by the Executive of the obligations set
forth
below in Section 10.
e. Good Reason. For purposes of
this Agreement and subject to the
Company's opportunity to cure as provided in Section 4(f) hereof,
the
Executive shall have "good reason" to terminate his employment
hereunder if such termination shall be the result of:
i. a reduction by the Company of the Executive's base salary;
ii. a material diminution in the Executive's duties or
responsibilities, as set forth in Sections 1 and 2 hereof; or
iii. the relocation, without the Executive's prior written consent,
of
the Executive's principal work location beyond 50 miles from
its
current location.
f. Cure Rights. Notwithstanding
the provisions of Sections 4(d) and 4(e)
hereof, it shall be a condition precedent to the Company's right
to
terminate the Executive's employment for "cause" and the
Executive's
right to terminate his employment for "good reason" that (1) the
party
3
<PAGE>
seeking the termination shall first have given the other party
written
notice stating with reasonable specificity the reason for the
termination ("breach") and (2) if such breach is susceptible of
cure
or remedy, a period of thirty (30) days from and after the giving
of
such notice shall have elapsed without the breaching party
having
effectively cured or remedied such breach during such 30-day
period,
unless such breach cannot be cured or remedied within thirty days,
in
which case the period for remedy or cure shall be extended for
a
reasonable time (not to exceed an additional thirty (30) days)
provided the breaching party has made and continues to make a
diligent
effort to effect such remedy or cure. Notwithstanding anything to
the
contrary contained herein, the right to cure set forth in this
Section
4(f) shall not apply if there are habitual or repeated breaches
by
either party.
g. Permanent and Total
Disability. The Employment Period shall be
terminated by the death of the Executive. The Employment Period may
be
terminated by the Board if the Executive shall be rendered
incapable
of performing his duties to the Company by reason of any
medically
determined physical or mental impairment for a period of either
(i)
six (6) or more consecutive months from the first date of the
Executive's absence due to the disability or (ii) nine (9)
months
during any eighteen
(18) month period (a "Permanent and Total
Disability"). If the Employment Period is terminated by reason
of
Permanent and Total Disability of the Executive, the Company
shall
give thirty (30) days' advance written notice to that effect to
the
Executive. Until the effective date of the termination as a result
of
a Permanent and Total Disability, the Company shall continue to pay
to
the Executive the compensation set forth in Section 3 hereof;
provided, however, that to the extent that the Executive
receives
payments pursuant to any disability insurance policy for which
the
Company pays the premium, the Company may deduct the amounts
received
by the Executive
pursuant to that policy from the compensation payable
to him.
5. Other Termination of
Employment. In the event that the Executive's
employment with
the Company is terminated during the Employment Period by
the Company for
"cause", or by the Executive other than for "good reason",
the Company
shall pay the Executive (or his legal representative) any
earned but
unpaid salary amounts and any un-reimbursed expenses through
the
Executive's
final date of employment with the Company, and the Company
shall have no
further obligations to the Executive, except under the plans,
programs and
arrangements described in Section 3(e) hereof in accordance
with the terms
of such plans.
6. Withholding of Taxes. All
payments required to be made by the Company to
the Executive
under this Agreement shall be subject to the withholding of
such amounts, if
any, relating to tax, excise tax and other payroll
deductions as
the Company may reasonably determine it should withhold
pursuant to any
applicable law or regulation.
7. No Other Obligations. The
benefits payable to the Executive under this
Agreement are
not in lieu of any benefits payable under any employee
benefit plan,
program or arrangement of the Company, except as provided
specifically
herein, and upon termination, the Executive will receive such
benefits or
payments, if any, as he may be entitled to receive pursuant to
the terms of
such plans, programs and arrangements. Except for the
obligations of
the Company provided by this Agreement (including, without
limitation,
pursuant to the preceding sentence hereof), the Company shall
have no further
obligations to the Executive upon his termination of
employment.
8. Reduction for "Parachute
Payments". Notwithstanding anything in this
Agreement to the
contrary, any amounts payable hereunder to the Executive
in connection
with a change in control, as well as any other "parachute
payments," as such
term is defined under Section 280G of the Internal
4
<PAGE>
Revenue Code of
1986, as amended (the "Code"), payable under any other
plans,
agreements or policies of the Company, shall be reduced to the
extent necessary
to assure that the Executive does not become subject to
the excess
parachute payment excise tax under Section 4999 of the Code and
the Company does
not lose all or part of its compensation deduction for
such payments.
9. Indemnity. The Company
shall, during his employment with the Company and
thereafter,
indemnify the Executive to the fullest extent permitted by law
and by its
Certificate of Incorporation and By-laws and shall assure that
the Executive is
covered by the Company's directors' and officers'
insurance
policies and any other insurance policies that protect
employees,
as in effect
from time to time.
10. Restrictive Covenants .
a. Proprietary Information.
i. The Executive agrees that all information and know-how,
whether
or not in writing, of a private, secret or confidential nature
concerning the business or financial affairs of the Company or
any of the Company's Affiliates is and shall be the exclusive
property of the Company or the Company's Affiliates. Such
information and know-how shall include, but not be limited to,
inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans,
research
data, clinical data, fina
