<PAGE>
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") between Cotelligent, Inc.
("Cotelligent"), a Delaware corporation, and Jeffrey B.Van Horn ("Employee") is
hereby entered into and effective as of the 10th day of July, 2000 ("Effective
--
Date").
R E C I T A L S
---------------
The following statements are true and correct:
As of the date of this Agreement, Cotelligent, through its operating
subsidiaries, is engaged primarily in the business of providing information
technology consulting and outsourcing services to organizations with complex
information system and technology operations. References herein to
"Cotelligent" are intended to include Cotelligent and its operating
subsidiaries, as may be applicable in the circumstances.
Employee is and will be employed hereunder by Cotelligent in a confidential
relationship wherein Employee, in the course of his employment with Cotelligent,
is and will become familiar with and aware of information as to Cotelligent's
customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by Cotelligent, and future plans with
respect thereto, all of which will be established and maintained at great
expense to Cotelligent; this information is a trade secret and constitutes the
valuable goodwill of Cotelligent.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
-------------------
1. Employment and Duties.
---------------------
(a) Cotelligent hereby employs Employee as Executive Vice President, Chief
Financial Officer and Treasurer. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of an executive vice
president, chief financial officer and treasurer and will report solely and
directly to the Chief Executive Officer. Employee hereby accepts this employment
upon the terms and conditions herein contained and, subject to Section 1(c)
agrees to devote his time, attention and efforts to promote and further the
business of Cotelligent.
(b) Employee shall faithfully adhere to, execute and fulfill all lawful
policies established by Cotelligent.
(c) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require his services in the operation or affairs of the companies
or enterprises in which such investments are made nor violate the terms of
Section 3 hereof.
2. Compensation. For all services rendered by Employee, Cotelligent
------------
shall compensate Employee as follows:
<PAGE>
(a) Base Salary. Beginning on the Effective Date, the base salary payable
to Employee shall be $300,000 per year, payable on a regular basis in accordance
with Cotelligent's standard payroll procedures but not less than monthly. After
90 days of employment and upon the successful accomplishment of certain goals
and objectives to be agreed upon between Employee and the Chief Executive
Officer, Employee's base salary shall be increased to $325,000 per year.
Thereafter, on at least an annual basis, the Chief Executive Officer will review
Employee's performance and may increase such base salary if, in his reasonable
discretion, any such increase is warranted. Such salary increase would, in all
likelihood, require approval by the Board or a duly constituted committee
thereof.
(b) Incentive Bonus. For fiscal year 2001 and subsequent fiscal years
during the Employee's employment with Cotelligent hereunder, Employee shall be
eligible to receive annual incentive bonuses of up to one hundred percent (100%)
of the amount of his base salary based upon such factors as the Board, or a duly
constituted committee thereof, shall determine in its discretion, including but
not limited to the Employee's individual performance and the Company's
performance.
(c) Executive Perquisites, Benefits and Other Compensation. Employee
shall be entitled to receive additional benefits and compensation from
Cotelligent in such form and to such extent as specified below:
(1) Participation for Employee in coverage for Employee and his
dependent family members under health, hospitalization,
disability, dental, life and other insurance plans that
Cotelligent may have in effect from time to time, benefits
provided to Employee under this clause (1) to be at least equal
to such benefits provided to other Cotelligent executives.
(2) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of
his services pursuant to this Agreement. All reimbursable
expenses shall be appropriately documented in reasonable detail
by Employee upon submission of any request for reimbursement, and
in a format and manner consistent with Cotelligent's expense-
reporting policy.
(3) Thirty-five days of paid time off pursuant to the Cotelligent
Paid Time Off policy.
(4) Cotelligent shall reimburse Employee for reasonable moving
expenses incurred by Employee to move his residence from San Jose
to a residence closer to the San Francisco Bay Area, including
the following:
(i) Cost of national carrier to move household goods from San
Jose to his new residence; and
(ii) Cost of packing in San Jose and unpacking in his new
residence of household goods.
(5) Such other executive perquisites as may be available to or deemed
appropriate for Employee by the Board and participation in all
other Cotelligent-wide employee benefits as available from time
to time.
(d) Stock Options. Cotelligent shall grant to Employee an option to
purchase 200,000 (two hundred thousand) shares of Cotelligent's common stock
("Cotelligent Common Stock"), at a price per share equal to the market price on
the close of trading on the trading day prior to the Effective Date. Employee's
stock options shall vest and become exercisable as follows: 50,000 (fifty
thousand) shares immediately upon the Effective Date; 37,500 (thirty-seven
thousand five hundred) shares on the first anniversary of the Effective Date;
37,500 (thirty-seven thousand five hundred) shares on the second anniversary of
the Effective Date; 37,500
<PAGE>
(thirty-seven thousand five hundred) shares on the third anniversary of the
Effective Date; and 37,500 (thirty-seven thousand five hundred) shares on the
fourth anniversary of the Effective Date. The options are granted pursuant to
the terms of the Cotelligent 1998 Long Term Incentive Plan.
3. Non-Competition Agreement.
-------------------------
(a) Employee will not, during the period of his employment by or with
Cotelligent, and for a period of one (1) year immediately following the
termination of his employment at any time after the completion of one year of
employment under this Agreement, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other person,
persons, company, partnership, corporation or business of whatever nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales
representative, in any business selling any products or services in direct
competition with Cotelligent (including its subsidiaries), within 100 miles
of where Cotelligent or where any of its subsidiaries conducts business
(the "Territory");
(ii) call upon, or cause others to call upon, any person who is, at
that time, within the Territory, an employee of Cotelligent (including its
subsidiaries) in a sales representative or managerial capacity for the
purpose or with the intent of enticing such employee away from or out of
the employ of Cotelligent (including its subsidiaries), provided that
Employee shall be permitted to call upon and hire any member of his or her
immediate family;
(iii) call upon, or cause others to call upon, any person or entity
which is, at that time, or which has been, within one (1) year prior to
that time, a customer of Cotelligent (including its subsidiaries) within
the Territory for the purpose of soliciting or selling products or services
in direct competition with Cotelligent (including its subsidiaries) within
the Territory;
(iv) call upon, or cause others to call upon, any prospective
acquisition candidate, on Employee's own behalf or on behalf of any
competitor in the computer consulting and contract programming business,
which candidate was either called upon by Cotelligent (including its
subsidiaries) or for which Cotelligent (including its subsidiaries) made an
acquisition analysis, for the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of
Cotelligent (including its subsidiaries) to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever except to the
extent that Cotelligent (including its subsidiaries) has in the past
disclosed such information to the public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than one percent (1%)
of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to Cotelligent
including its subsidiaries as a result of a breach of the foregoing covenant,
and because of the immediate and irreparable damage that could be caused to
Cotelligent including its subsidiaries for which it would have no other adequate
remedy, Employee agrees that the foregoing covenant may be enforced by
Cotelligent including its subsidiaries in the event of breach by him, by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
Section 3 impose a reasonable restraint on Employee in light of the activities
and business of Cotelligent (including its subsidiaries) on the date of
<PAGE>
the execution of this Agreement and the current plans of Cotelligent; but it is
also the intent of Cotelligent and Employee that such covenants be construed and
enforced in accordance with the changing activities and business of Cotelligent
throughout the term of this covenant. For example, if, during the term of this
Agreement, Cotelligent (including its subsidiaries) engages in new and different
activities, enters a new business or establishes new locations for its current
activities or business in addition to or other than the activities or business
enumerated under the Recitals above or the locations currently established
therefore, then Employee will be precluded from soliciting the customers or
employees of such new activities or business or from such new location and from
directly competing with such new business within 100 miles of its operating
location(s) through the term of this covenant.
It is further agreed by the parties hereto that, in the event that Employee
shall cease to be employed hereunder, and shall enter into a business or pursue
other activities not in competition with Cotelligent (including its
subsidiaries), or similar activities or business in locations the operation of
which, under such circumstances, does not violate clause (a)(i) of this Section
3, and in any event such new business, activities or location are not in
violation of this Section 3 or of Employee's obligations under this Section 3,
if any, Employee shall not be chargeable with a violation of this Section 3 if
Cotelligent (including its subsidiaries) shall thereafter enter the same,
similar or a competitive (i) business, (ii) course of activities or (iii)
location, as applicable.
(d) The covenants in this Section 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
(e) All of the covenants in this Section 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against Cotelligent
(including its subsidiaries), whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Cotelligent (including its
subsidiaries) of such covenants. It is specifically agreed that the period of
one (1) year stated at the beginning of this Section 3, during which the
agreements and covenants of Employee made in this Section 3 shall be effective,
shall be computed by excluding from such computation any time during which
Employee is in violation of any provision of this Section 3.
4. Term; Termination; Rights on Termination. The term of this Agreement
----------------------------------------
shall begin on the Effective Date and continue for one year (the "Initial
Term"). On the first anniversary of the Effective Date the term shall be
extended for two additional years unless at least sixty (60) days prior to any
such anniversary either party gives notice in writing to the other that the
Agreement will not be so extended an additional year. Thereafter, the term shall
be extended an additional year on each subsequent anniversary of the Effective
Date unless at least sixty (60) days prior to any such anniversary either party
gives notice in writing to the other that the Agreement will not be so extended
an additional year. This Agreement and Employee's employment may be terminated
in any one of the following ways:
(a) Good Cause. Cotelligent may terminate the Agreement ten (10) days
after written notice to Employee for good cause, which shall be: (1) Employee's
willful, material and irreparable breach of this Agreement; (2) Employee's gross
negligence in the performance or intentional nonperformance (continuing for ten
(10) days after receipt of written notice of need to cure) of any of Employee's
material duties and responsibilities hereunder which materially and adversely
affects the operations or reputation of Cotelligent (including its
subsidiaries); (3) Employee's willful dishonesty, fraud or misconduct with
respect to the business or affairs of Cotelligent (including its subsidiaries)
which materially and adversely affects the operations or reputation of
Cotelligent (including its subsidiaries); (4) Employee's conviction of a felony
crime. In the event of a termination for good cause, as enumerated above,
Employee shall have no right to any severance compensation.
(b) Without Cause. Should Employee be terminated without cause by
Cotelligent or Cotelligent fails to extend this Agreement without cause,
Employee shall receive, in one lump-sum payment payable as soon as
<PAGE>
practicable after the effective date of termination (x) if the termination date
is within the Initial Term, an amount which shall equal (i) one times Employee's
most recent base annual salary plus (ii) one times Employee's most recent annual
bonus (the "Termination Payment") or (y) if the termination date is subsequent
to the Initial Term, an amount which shall equal two times the Termination
Payment. It is specifically understood and agreed that, in the event Employee's
employment is terminated without cause, Cotelligent shall in all circumstances
be required to pay the Termination Payment to Employee, regardless of whether
Employee has obtained other employment following such termination and Employee
shall be under no duty to mitigate such amount or take any action to lessen
Cotelligent's liability for such payment, which is intended to be absolute.
Further, any termination without cause by Cotelligent shall operate to shorten
the period set forth in Section 3(a) and during which the terms of Section 3, if
applicable, apply to six (6) months from the date of termination of employment.
Any group health continuation coverage that Cotelligent is required to offer
under the Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA") shall
be offered upon termination and Cotelligent shall pay the cost of such COBRA
coverage.
Employee shall be deemed to have been terminated without cause by Cotelligent if
(i) Cotelligent breaches Section 2(a) of this Agreement (ii) Employee shall be
assigned any duties materially inconsistent with, or Employee's responsibilities
shall be significantly limited, or Employee shall be significantly demoted, in
any case so as not to be serving in a Chief Financial Officer capacity to
Cotelligent and its subsidiaries and affiliates, and the continuance thereof for
a period of five (5) business days after written notice from Employee that he is
unwilling to accept such changes in duties or responsibilities.
In the event Employee is terminated without cause pursuant to this Section 4(b),
Employee's options shall become fully vested and Employee shall have,
notwithstanding anything to the contrary contained in any relevant option
agreements, ninety (90) days within which to exercise any vested options, after
which any options not exercised by Employee would be forfeited; provided,
--------
however, if Employee is terminated without cause pursuant to this Section 4(b)
-------
within one (1) year following a Change in Control (as defined in Section 11(e)
hereunder), Employee shall have, notwithstanding anything to the contrary
contained in any relevant option agreements, one (1) year within which to
exercise any vested and outstanding options, to the extent permitted by the
underlying agreements governing the Change in Control, after which any options
not exercised by Employee would be forfeited.
At any time after the commencement of employment, Employee may, without cause,
terminate this Agreement and Employee's employment, effective thirty (30) days
after written notice is provided to Cotelligent. If Employee voluntarily
resigns or otherwise terminates his employment without cause pursuant to this
Section 4(b), (i) Employee shall receive no severance compensation and (ii)
notwithstanding anything to the contrary contained in any relevant option
agreements, Employee shall have ninety (90) days within which to exercise any
previously vested and outstanding options, after which any such options not
exercised by Employee would be forfeited.
(c) Change in Control of Cotelligent. Refer to Section 11 below.
Upon termination of this Agreement for any reason provided above, Employee shall
be entitled to receive all compensation earned and all benefits and
reimbursements due through the effective date of termination. Additional
compensation subsequent to termination, if any, will be due and payable to
Employee only to the extent and in the manner expressly provided above or in
Section 11. All other rights and obligations of Cotelligent and Employee under
this Agreement shall cease as of the effective date of termination, except that
Cotelligent's obligations under Section 8 herein and Employee's obligations
under Sections 3, 5, 6, 7 and 9 herein shall survive such termination in
accordance with their terms.
If termination of Employee's employment arises out of Cotelligent's failure to
pay Employee on a timely basis the amounts to which he is entitled under this
Agreement or as a result of any other breach of this Agreement by Cotelligent,
as determined by a court of competent jurisdiction or pursuant to the provisions
of Section 16 below, Cotelligent shall pay all amounts and damages to which
Employee may be entitled as a result of such breach,
<PAGE>
including interest thereon and all reasonable legal fees and expenses and other
costs incurred by Employee to enforce his rights hereunder. Further, none of the
provisions of Section 3 shall apply in the event this Agreement or the
Employee's employment hereunder is terminated as a result of a breach by
Cotelligent.
5. Return of Company Property. All records, designs, patents, business
--------------------------
plans, financial statements, financial records, manuals, memoranda, lists and
other property delivered to or compiled by Employee by or on behalf of
Cotelligent (including its subsidiaries) or their representatives, vendors or
customers which pertain to the business of Cotelligent (including its
subsidiaries) shall be and remain the property of Cotelligent (including its
subsidiaries) and be subject at all times to their discretion and control.
Likewise, all correspondence, reports, records, charts, advertising materials
and other similar data pertaining to the business, activities or future plans of
Cotelligent (including its subsidiaries) which is collected by Employee shall be
delivered promptly to Cotelligent without request by it upon termination of
Employee's employment.
6. Inventions. Employee shall disclose promptly to Cotelligent any and
----------
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
activities of Cotelligent and which Employee conceives as a result of his
employment by Cotelligent. Employee hereby assigns and agrees to assign all his
interests therein to Cotelligent or its nominee. Whenever requested to do so by
Cotelligent, Employee shall execute any and all applications, assignments or
other instruments that Cotelligent shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect Cotelligent's interest therein.
7. Trade Secrets. Employee agrees that he will not, during or after the
-------------
term of this Agreement with Cotelligent, disclose the specific terms of
Cotelligent's relationships or agreements with its significant vendors or
customers or any other significant and material trade secret of Cotelligent,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever other than as required by law
or to attorneys or accountants or other agents of the Company.
8. Indemnification. In the event Employee is made a party to any
---------------
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by Cotelligent
against Employee), by reason of the fact that he is or was performing services
under this Agreement, then Cotelligent shall indemnify and hold harmless the
Employee against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, as actually and reasonably incurred by Employee in
connection therewith. In the event that both Employee and Cotelligent are made
a party to the same third-party action, complaint, suit or proceeding,
Cotelligent agrees to engage competent legal representation, and Employee agrees
to use the same representation, provided that if counsel selected by Cotelligent
shall have a conflict of interest that prevents such counsel from representing
Employee, Employee may engage separate counsel and Cotelligent shall pay all
attorneys' fees and costs of such separate counsel. Further, while Employee is
expected at all times to use his best efforts to faithfully discharge his duties
under this Agreement, Employee cannot be held liable to Cotelligent for errors
or omissions made in good faith where Employee has not exhibited gross, willful
and wanton negligence and misconduct or performed criminal and fraudulent acts
which materially damage the business of Cotelligent.
9. No Prior Agreements. Employee hereby represents and warrants to
-------------------
Cotelligent that the execution of this Agreement by Employee and his employment
by Cotelligent and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity. Further, Employee agrees to indemnify Cotelligent for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against Cotelligent based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.
<PAGE>
10. Assignment; Binding Effect. Employee understands that he has been
--------------------------
selected for employment by Cotelligent on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of Section 11 below,
this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties hereto and their respective heirs, legal representatives,
successors and assigns.
11. Change in Control.
-----------------
(a) Employee understands and acknowledges that Cotelligent may be merged
or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of Cotelligent hereunder.
(b) In the event of a pending Change in Control (as defined below) wherein
Cotelligent and Employee have not received written notice at least five (5)
business days prior to the anticipated closing date of the transaction giving
rise to the Change in Control from the successor to all or a substantial portion
of Cotelligent's business and/or assets that such successor is willing and able
as of the closing to assume and agree to perform Cotelligent's obligations under
this Agreement in the same manner and to the same extent that Cotelligent is
hereby required to perform, then such Change in Control shall be deemed to be a
termination of this Agreement by Cotelligent without cause and the applicable
portions of Section 4(b) will apply; however, under such circumstances, the
amount of the severance payment due to Employee (a) shall be payable in a lump-
sum payment on the effective date of the termination and (b) the non-competition
provisions of Section 3 shall not apply whatsoever.
(c) In the case of any Change in Control, Employee may, at his sole
discretion, elect to terminate this Agreement by providing written notice to
Cotelligent at least two (2) business days prior to the anticipated closing of
the transaction giving rise to the Change in Control. In such case, the
applicable provisions of Section 4(b) will apply as though Cotelligent had
terminated the Agreement without cause; however, under such circumstances, the
amount of the severance payment due to Employee (a) shall be payable in a lump-
sum payment on the effective date of the termination of this Agreement and (b)
the non-competition provisions of Section 3, if applicable, shall all apply for
a period of six months from the effective date of termination of this
Agreement.
(d) For purposes of applying Section 4 under the circumstances described
in (b) and (c) above, the effective date of termination will be the closing date
of the transaction giving rise to the Change in Control and all compensation,
reimbursements and lump-sum payments due Employee must be paid in full by
Cotelligent at or prior to such closing. Further, Employee will be given
sufficient time and opportunity to elect whether to exercise all or any of his
vested options to purchase Cotelligent Common Stock, including any options with
accelerated vesting under the provisions of Cotelligent's 1998 Long-Term
Incentive Compensation Plan, such that he may convert the options to shares of
Cotelligent Common Stock at or prior to the closing of the transaction giving
rise to the Change in Control, if he so desires.
(e) A "Change in Control" shall be deemed to have occurred if:
(i) The consummation of a merger or consolidation of Cotelligent
with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting
power of the continuing or surviving entity's securities
outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not
stockholders of Cotelligent immediately prior to such
merger, consolidation or other reorganization;
(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets;
<PAGE>
(iii) A change in the composition of the Board, as a result of
which fewer that one-half of the incumbent directors are
directors who either (x) had been directors of Cotelligent
on the date 24 months prior to the date of the event that
may constitute a Change in Control (the "original
directors") or (y) were elected, or nominated with the
affirmative votes of at least a majority of the aggregate
of the original directors who were still in office at the
time of the election or nomination and the directors whose
election or nomination was previously so approved; or
(iv) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of Cotelligent representing at
least 30% of the total voting power represented by
Cotelligent then outstanding voting securities. For
purposes of this Paragraph (iv), the term "person" shall
have the same meaning as when used in sections 13(d) and
14(d) of such Exchange Act but shall exclude:
(x) A trustee or other fiduciary holding securities under
an employee benefit plan of Cotelligent or a subsidiary
of Cotelligent; and
(y) A corporation owned directly or indirectly by the
stockholders of Cotelligent in substantially the same
proportions as their ownership of the common stock of
Cotelligent.
A transaction shall not constitute a Change in Control if
its sole purpose is to change the state of Cotelligent's
incorporation or to create a holding company that will be owned
in substantially the same proportions by the persons who held
Cotelligent's securities immediately before such transactions.
(f) Employee must be notified in writing by Cotelligent at any time if a
Change in Control becomes likely or probable.
(g) Cotelligent shall pay to Employee an amount that, on an after-tax
basis (including federal income, excise and social security taxes, and state and
local income taxes), equals any excise tax that is determined to be payable by
Employee pursuant to Section 4999 of the Internal Revenue Code of 1986, as
amended (and any interest or penalties related to the imposition of such excise
tax), by reason of entitlements under this Agreement, as well as entitlements
outside of this Agreement that are described in Section 280G(b)(2)(A)(i) of the
Code. For purposes of this Section 11(g), Employee shall be deemed to pay
federal, state and local income taxes at the highest marginal rate of taxation.
Such amount will be due and payable by Cotelligent or its successor within ten
(10) days after Employee delivers a written request for reimbursement
accompanied by a statement from a nationally recognized consulting or accounting
firm as may be agreed to by the parties setting forth the amount owed pursuant
to this Section 11(g).
12. Place of Performance.
--------------------
(a) Employee understands that he may be requested by the Board to relocate
from his residence in the San Francisco Bay Area to another geographic location
in order to more efficiently carry out his duties and responsibilities under
this Agreement. In such event, Cotelligent will pay all relocation costs to move
Employee, his immediate family and their personal property and effects. Such
costs may include, by way of example, but are not limited to, pre-move visits to
search for a new residence, investigate schools or for other purposes; temporary
lodging and living costs prior to moving into a new permanent residence;
duplicate home carrying costs; all closing costs on the sale of Employee's
residence in the San Francisco Bay Area and on the purchase of a comparable
residence in the new location; and added income taxes that Employee may incur if
any relocation costs are not
<PAGE>
deductible for tax purposes. The general intent of the foregoing is that
Employee shall not personally bear any out-of-pocket cost as a result of any
relocation, with an understanding that Employee will use his best efforts to
incur only those costs which are reasonable and necessary to effect a smooth,
efficient and orderly relocation with minimal disruption to the business affairs
of Cotelligent and the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the Board of
Cotelligent to relocate and Employee refuses, such refusal shall not constitute
"cause" for termination of this Agreement under the terms of Section 4(a) and
Employee may be deemed to be terminated without cause under the terms of Section
4(b).
13. Complete Agreement. This Agreement is not a promise of future
------------------
employment. Employee has no oral representations, understandings or agreements
with Cotelligent or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between
Cotelligent and Employee and of all the terms of this Agreement, and it cannot
be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of Cotelligent and Employee, and no term of this Agreement may be waived except
by writing signed by the party waiving the benefit of such term.
14. Notice. Whenever any notice is required hereunder, it shall be given
------
in writing addressed as follows:
To Cotelligent: Cotelligent, Inc.
101 California Street-Suite 2050
San Francisco, California 94111
To Employee: Jeffrey B. Van Horn
2198 Sheffield Ridge Court
San Jose, CA 95138
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 14.
15. Severability; Headings. If any portion of this Agreement is held
----------------------
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
Section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
16. Arbitration. Any unresolved dispute or controversy arising under or
-----------
in connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in San Francisco, California,
in accordance with the rules of the American Arbitration Association then in
effect. The arbitrators shall not have the authority to add to, detract from,
or modify any provision hereof nor to award punitive damages to any injured
party. The arbitrators shall have the authority to order back-pay, severance
compensation, vesting of options (or cash compensation in lieu of vesting of
options), reimbursement of costs, including those incurred to enforce this
Agreement, and interest thereon in the event the arbitrators determine that
Employee was terminated without good cause, as defined in Section 4(a), or that
Cotelligent has otherwise materially breached this Agreement. A decision by a
majority of the arbitration panel shall be final and binding. Judgment may be
entered on the arbitrators' award in any court having jurisdiction. The direct
expense of any arbitration proceeding shall be borne by Cotelligent.
<PAGE>
17. Governing Law. This Agreement shall in all respects be construed
-------------
according to the laws of the State of California.
18. Counterparts. This Agreement may be executed simultaneously in two
------------
(2) or more counterparts each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COTELLIGENT, INC.
By: /S/ James R. Lavelle
--------------------
Name: James R. Lavelle
Title: Chairman, Chief Executive Officer &
President
EMPLOYEE:
/S/ Jeffrey B. Van Horn
-----------------------
Jeffrey B. Van Horn
