Exhibit 10.7
ARINCO COMPUTER SYSTEMS INC.
20 Dayton Avenue
Greenwich, CT 06830
June 12, 2000
Mr. Frank Gallagi
218 Mill River Road
Fairfield, CT 06430
Dear Mr. Gallagi:
I am pleased to submit to you the following offer of employment with
Arinco Computer Systems Inc., a New Mexico corporation (the "COMPANY").
1. TITLE; DUTIES. At the commencement of your employment, the Company
shall employ you and you shall accept employment as Managing Director and Chief
Financial Officer of the Company and you shall have such authority and perform
such duties of an executive and managerial nature as are consistent with such
title and status. You shall devote substantial business time, skill and efforts
to the performance of your duties to the Company. However, the Company is aware
that you are now engaged, and from time to time hereafter may become engaged, in
other businesses, ventures and opportunities and that you intend to devote a
substantial amount of time to such businesses, ventures and opportunities. The
Company expressly consents to such activities and agrees that such activities
shall not constitute a breach of this Letter Agreement.
2. COMMENCEMENT; AT-WILL EMPLOYMENT. Your employment shall commence,
and this Letter Agreement shall become effective as of the date hereof. You
shall be an at-will employee and, accordingly, your employment by the Company
may be terminated by the Company or by you at any time for any reason or for no
reason.
3. SALARY. During your employment, you will be paid a base salary at an
annual rate of $84,000, payable in bi-weekly installments, subject to adjustment
at the discretion of the Board of Directors of the Company. During your
employment, you shall also be entitled to payment of or reimbursement for all
reasonable and properly documented out-of-pocket expenses incurred or paid by
you in connection with the performance of your duties hereunder and in
accordance with the general expense reimbursement policy of the Company then in
effect.
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4. BENEFITS. During your employment, you shall be entitled to
participate in the employee benefit plans and programs, if any, which are
maintained by the Company for similarly situated employees of the Company.
5. BUSINESS OPPORTUNITY ALLOCATION. You acknowledge that you have read
the Business Opportunity Allocation and Miscellaneous Services Agreement by and
between the Company and Pangea dated as of the Closing Date (the "BOA
AGREEMENT"). During your employment, and for so long as you are a Pangea
Affiliate (as defined in the BOA Agreement), you shall observe all requirements
and obligations imposed on the Pangea Affiliates pursuant to the BOA Agreement,
including the referral, through Pangea, of investment opportunities meeting the
Referral Requirements (as defined in the BOA Agreement) to the Company in
accordance with Section 1 of the BOA Agreement. The Company hereby renounces any
interest it may have in any Other Opportunity (as defined in the BOA Agreement)
and renounces any expectancy that any Other Opportunity be offered to it, such
that, as a result of such renunciation, you (A) shall have no duty to
communicate or present such Other Opportunity to the Company, shall have the
right to hold such Other Opportunity for your or your affiliates' (and the
respective officers, directors, agents, shareholders, members, partners, or
subsidiaries of such affiliates) own account, or to recommend, assign or
transfer such Other Opportunity to persons other than the Company and (B) shall
not breach any duty you may have to the Company by reason of the fact that you
pursue or acquire such Other Opportunity for yourself, direct, assign or
transfer such Other Opportunity to another person, or do not communicate
information regarding such Other Opportunity to the Company.
6. INDEMNIFICATION. The Company shall indemnify, in the manner and to
the fullest extent permitted by applicable law and the by-laws of the Company,
you (or your estate) in the event you (or your estate) were or are a party to,
or are threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the Company,
and whether civil, criminal, administrative, investigative or otherwise, by
reason of the fact that you are or were a director, officer, employee, or agent
of the Company, or are or were serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including reasonable
attorneys' fees) ("EXPENSES"), judgments, fines and amounts paid in settlement
actually and reasonably incurred by you (or your estate) in connection with such
action, suit or proceeding (including, without limitation, in connection with
the defense or settlement of such action, suit or proceeding). To the extent and
in the manner provided by applicable law, any such Expenses shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding,
even if you are alleged to have not met the applicable standard of conduct
required under this Section 6 or are alleged to have committed conduct such
that, if true, you (or your estate) would not be entitled to indemnification
under this Section 6, upon receipt of an undertaking, which need not be secured,
by or on behalf of you (or your estate) to repay such amount, if it shall
ultimately be determined that you (or your estate) are not entitled to be
indemnified by the Company as authorized in this Section. The Company's
obligations under this
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Section 6 shall survive any termination of this Letter Agreement or any
termination of your employment.
7. INSURANCE. During your employment, the Company shall maintain
liability and director's and officer's insurance provided by a reputable insurer
in amounts appropriate for a public company engaged in business (in nature and
size) like the Company's business on your behalf.
8. MISCELLANEOUS.
(a) NOTICES. Any notice, payment, demand or communication
required or permitted to be given by any provision of this Letter Agreement
shall be in writing and shall be deemed to have been delivered, given and
received for all purposes (i) if delivered personally, with a copy transmitted
by telephonic facsimile, to the party or to an officer of the party to whom the
same is directed or (ii) whether or not the same is actually received, if sent
by registered or certified mail, postage and charges prepaid, with a copy
transmitted by telephonic facsimile addressed as follows:
If to the Company:
Arinco Computer Systems Inc.
20 Dayton Avenue
Greenwich, CT 06830
Telephone: 203-661-4431
Facsimile: 203-661-1331
Attention: Chief Executive Officer
If to Employee:
Frank Gallagi
218 Mill River Road
Fairfield, CT 06430
Any such notice shall be deemed to be delivered, given and received as of the
date so delivered, if delivered personally, or as of the date on which the same
was deposited in a regularly maintained receptacle for the deposit of United
States mail, addressed and sent as aforesaid.
(b) GOVERNING LAW. This Letter Agreement shall be governed by,
and interpreted in accordance with, the laws of the State of New York applicable
to agreements made and to be performed entirely within such State.
(c) COUNTERPART EXECUTION. This Letter Agreement may be
executed in any number of counterparts with the same effect as if all of the
parties hereto
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had signed the same document. All counterparts shall be construed together and
shall constitute one agreement.
(d) AMENDMENTS. This Letter Agreement may only be amended upon
the written consent of all of the parties hereto.
(e) ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This
Agreement and the BOA Agreement represent the entire understanding of the
parties hereto with reference to the transactions contemplated hereby and
supersedes any and all other oral or written agreements heretofore made. Except
as provided in Section 6, nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
(f) SUCCESSORS AND ASSIGNS. The Company may assign this Letter
Agreement to a successor, affiliate or subsidiary, provided that no such
assignment shall relieve the Company of its obligation hereunder. This Letter
Agreement is a personal contract and your rights and interests hereunder may not
be sold, transferred, assigned, pledged, encumbered, or hypothecated by you,
except as otherwise expressly permitted by the provisions of this Letter
Agreement. Nothing in this Section 8(f) shall preclude (i) you from designating
a beneficiary to receive any benefit payable hereunder upon your death, or (ii)
the executors, administrators, or other legal representatives of yours or your
estate from assigning any rights hereunder to distributees, legatees,
beneficiaries, testamentary trustees or other legal heirs of yours. This Letter
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(g) SEVERABILITY. If any provision of this Letter Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Letter Agreement or the
application of such provision to such person or circumstances other than those
to which it is so determined to be invalid and unenforceable, shall not be
affected thereby, and each other provision hereof shall continue to be valid and
shall be enforceable to the fullest extent permitted by law.
(h) HEADINGS. All descriptive headings of sections and
paragraphs in this Letter Agreement are intended solely for convenience, and no
provision of this Letter Agreement is to be construed by reference to the
heading of any section or paragraph.
(i) WITHHOLDINGS. All payments to you under this Letter
Agreement shall be reduced by all applicable tax withholding required by
federal, state or local law.
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(j) TERMINATION OF AGREEMENT. This Letter Agreement shall
terminate and have no further force and effect if the Purchase Agreement is
terminated.
If the foregoing is acceptable, please indicate your agreement by
signing in the space designated below.
Sincerely,
ARINCO COMPUTER SYSTEMS INC.
By: /s/ Cary S. Fitchey
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Name: Cary S. Fitchey
Title: President and Chief Executive
Officer
AGREED AND ACCEPTED BY:
/s/ Frank Gallagi
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Frank Gallagi
