ex10_1.htm


    
      

    

     

    Exhibit
      10.1

     

    
      EMPLOYMENT
        AGREEMENT

      


      This
        Employment Agreement (the “Agreement”) made this 12th day of
        October,
        2007 and effective as of the 15th day of
        October,
        2007 (the “Effective Date”) between POMEROY IT SOLUTIONS, INC.,
        a Delaware Corporation (the “Company”) and KEITH R. COOGAN (the
“Executive”).

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Company desires to employ the Executive as President and Chief Executive
        Officer of the Company;

       

      WHEREAS,
        the Company and the Executive desire to enter into the Agreement as to the
        terms
        of his employment by the Company;

       

      NOW
        THEREFORE, in consideration of the foregoing, of the mutual promises
        contained herein and of other good and valuable consideration, the receipt
        and
        sufficiency of which are hereby acknowledged, the parties hereto hereby agree
        as
        follows:

      


      1.           
        Position/Duties.

       

      
        	
                 

              	
                (a)

              	
                Executive
                  shall serve as the President and Chief Executive Officer of the
                  Company.  In this capacity, Executive shall have such duties,
                  authorities and responsibilities commensurate with the duties,
                  authorities
                  and responsibilities of persons in similar capacities in similar
                  size
                  companies and such other duties and responsibilities as the Board
                  of
                  Directors of the Company (“Board”) shall from time to time assign to him
                  consistent with the Executive’s position as President and Chief Executive
                  Officer of the Company.

              


      

       

      
        	
                 

              	
                (b)

              	
                During
                  the Employment Term (as defined in Section 2), the Executive shall
                  devote
                  substantially all his business time and efforts to the business
                  and
                  affairs of the Company and the performance of his duties
                  hereunder.   The Executive, who currently serves as a
                  member of the Board of Directors of Titanium Metals Corporation
                  and Kronos
                  Worldwide Inc., shall not accept any other outside directorships
                  of
                  business enterprises during the Employment Term without the consent
                  of the
                  Board.  In addition, Executive shall not render services of a
                  business, professional or commercial nature to any other person,
                  firm or
                  corporation, whether for compensation or otherwise, during the
                  Employment
                  Term.

              


      

       

      
        	
                 

              	
                (c)

              	
                Executive’s
                  primary workplace shall be the Company’s offices in Hebron, Kentucky,
                  except for usual and customary travel on the Company’s
                  business.  Pursuant to the provisions of Section 7(d), Executive
                  will lease temporary housing in the Greater Cincinnati/Northern
                  Kentucky
                  area during the Employment Term.  Company acknowledges that
                  Executive will be commuting to Company’s headquarters from Plano, Texas
                  during the term of this Agreement.  Executive shall be permitted
                  to work in Plano, Texas, for  such periods of time as may be
                  agreed upon by Executive and the Board, but in no event less than
                  one day
                  each week.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
                 

              	
                (d)

              	
                Upon
                  the Effective Date, Executive shall be appointed a member of the
                  Company’s
                  Board of Directors to serve without compensation until the next
                  Annual
                  Shareholders Meeting of the Company.  Thereafter, during the
                  remaining Employment Term, the Board or, if applicable, a committee
                  thereof, shall nominate the Executive for re-election as a member
                  of the
                  Board at the expiration of each then-current
                  term.

              


      

       

      
        	
                 

              	
                (e)

              	
                Executive
                  further agrees to serve without additional compensation as an Officer
                  and
                  Director of any direct or indirect subsidiaries and affiliates
                  of the
                  Company as the Company, acting through the Board, may request from
                  time to
                  time.  In addition, it is agreed that the Company may deem the
                  Executive to be an employee of one of its subsidiaries for payroll
                  purposes but said arrangement shall not relieve the Company of
                  its
                  obligations hereunder.

              


      

       

      2.           
        Term of Employment.

       

      This
        Agreement shall be in effect beginning on the Effective Date and terminating
        upon the earlier of (a) three years, two months and twenty-one days (October
        15,
        2007 – January 5, 2011) (the “Initial Term”) or (b) the Date of Termination as
        defined in Section 8(g).  The period of time from the Effective Date
        through the Initial Term and any Renewal Term, as defined in Section 3, or
        the
        Date of Termination, as applicable, is referred to as the “Employment
        Term”.

       

      3.           
        Renewal Term.

       

      The
        term
        of Executive’s employment and this Agreement shall 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.  Executive’s Base Salary for each Renewal Term shall be
        negotiated and mutually agreed upon by and between the Company and Executive;
        however, in no event shall Executive’s Base Salary for any Renewal Term be less
        than the Base Salary in effect for the prior year.

       

      4.           
        Base Salary.

       

      During
        each fiscal year of the Company during the Initial Term of this Agreement,
        the
        Company agrees to pay Executive a base salary (“Base Salary”) at an annual rate
        of Four Hundred Eighty Thousand Dollars ($480,000.00).  For the period
        commencing October 15, 2007 and ending January 5, 2008, Executive shall be
        paid
        the sum of Forty Thousand Dollars ($40,000.00) per month, which amount shall
        be
        prorated for any partial month.  Said Base Salary shall be payable in
        accordance with the regular payroll practices of the Company, but not less
        frequently than monthly.  Executive’s Base Salary shall be subject to
        an annual review by the Board or a committee thereof (and may be increased,
        but
        not decreased, from time to time by the Board).

       

      
        
          
          

        

        
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      5.           
        Bonuses.

       

      For
        the
        period October 15, 2007 through January 5, 2008, Executive shall be paid
        a bonus
        of Ninety-Two Thousand Five Hundred Dollars ($92,500.00), payable on or after
        January 5, 2008 but not later than January 15, 2008.  The Compensation
        Committee will begin work with Executive in December 2007 (and each ensuing
        December thereafter) to implement a bonus plan for Executive with the Company
        for the next ensuing fiscal year of the Company.  The Executive shall
        have the opportunity to earn both a quarterly and annual targeted bonus measured
        against financial criteria consisting primarily of NPBT (as defined below)
        (as
        determined by the Board or a committee thereof), of at least Three Hundred
        Seventy Thousand Dollars ($370,000.00), with a potential bonus in excess
        of such
        amount for achievement above target and a reduced bonus for achievement below
        target, all in accordance with the applicable bonus plan.  Two-thirds
        (2/3) of the potential targeted bonus shall be based on achievement of quarterly
        criteria and one-third (1/3) shall be allocated to annual
        attainment.  The bonus plan shall provide that under-performance in
        one quarter can be made up in subsequent quarters on a year-to-date
        basis.  The quarterly and annual bonuses payable to Executive during
        the Employment Term shall be fully paid in cash.

       

      For
        purposes of this Agreement, the Net Profit Before Taxes (“NPBT”) shall be
        determined on a consolidated basis computed without regard to the bonus payable
        to Executive pursuant to this Section 5, shall exclude any gains or losses
        realized by Company on the sale or other disposition of its assets other
        than in
        the ordinary course of business and shall exclude any extraordinary one-time
        charges taken by the Company.  NPBT shall be determined by the
        independent accountant regularly retained by the Company, subject to the
        foregoing provisions of this subparagraph and in accordance with generally
        accepted accounting principles.  Said determination and payment of
        such bonus shall be made no later than the fifteenth (15th) day
        of the third
        (3rd) month
        following the end of the Company’s taxable year, and the determination by the
        accountant shall be final, binding and conclusive on all parties
        hereto.  In the event the audited financial statements are not issued
        before the fifteenth (15th) day
        of the third
        (3rd) month
        following the end of the Company’s taxable year, Company shall make the payment
        due hereunder, if any, based on its best reasonable estimate of any liability
        hereunder, which amount shall be recorded and shall be reconciled by both
        parties once the audited financial statements are issued but in no event
        later
        than the end of the calendar year in which the Company’s taxable year
        ends.  Any quarterly bonus determination shall be determined on a
        consolidated basis by the independent accountant regularly retained by the
        Company subject to the foregoing provisions of this paragraph and in accordance
        with generally accepted accounting principles.  Any amount due
        hereunder shall be paid within fifteen (15) days of the filing of Form 10-Q
        by
        the Company for the respective quarter, but in no event later than the fifteenth
        (15th) day
        of
        the third (3rd)
        month following the end of the Company’s taxable year.

       

      
        
          
          

        

        
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      In
        the
        event that Company acquires during any applicable fiscal year a company that
        had
        gross revenues in excess of Twenty-Five Million Dollars ($25,000,000.00)
        for its
        most recently concluded fiscal year, Company and Executive shall in good
        faith
        determine whether any adjustments to the NPBT criteria, whether upward or
        downward, shall be made in order to reflect the effect of such acquisition
        on
        the operations of the Company.

       

      6.           
        Equity Awards.

       

      (a)           Stock
        Options.

       

      
        	
                 

              	
                (i)

              	
                Upon
                  the Effective Date of this Agreement, Executive shall be awarded
                  an option
                  to acquire Two Hundred Forty (240,000) shares of the common stock
                  of the
                  Company under the Company’s Amended and Restated 2002 Stock Incentive Plan
                  (“Plan”) at the fair market value of such common shares as of the date
                  of
                  the award.  For purposes of this Agreement, the fair market
                  value as of the applicable date shall mean, with respect to the
                  common
                  shares, the closing sales price of a share of the Company’s common stock
                  on the over-the-counter market on the last market trading 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).  Seventy-Five Thousand (75,000) shares shall vest upon
                  the Effective Date of Executive’s employment and Fifty-Five Thousand
                  (55,000) shares shall vest on each of the first three annual anniversaries
                  of the Effective Date. The term of the award set forth above shall
                  be for
                  a period of five (5) years from the date of such award.  A copy
                  of the Award Agreement is attached hereto as Exhibit A.  The
                  options to be granted incident hereto shall be non-qualified stock
                  options
                  and shall not be treated by the Company or the Executive as an
                  incentive
                  stock option for federal income tax
                  purposes.

              


      

       

      
        	
                 

              	
                (ii)

              	
                In
                  the event a Change In Control (as defined in Section 10) occurs
                  after the
                  six month anniversary of the Effective Date but before the first
                  annual
                  anniversary of the Effective Date, an additional Forty-Five Thousand
                  (45,000) shares shall vest immediately prior to the Change In
                  Control.  In the event a Change In Control occurs on or after
                  the first annual anniversary of the Effective Date, but before
                  the third
                  (3rd)
                  annual anniversary of the Effective Date, then all Two Hundred
                  Forty
                  Thousand (240,000) shares shall be fully vested immediately prior
                  to the
                  Change In Control.

              


      

       

      
        	
                 

              	
                (iii)

              	
                In
                  addition, on each annual anniversary of the Effective Date, Executive
                  shall be awarded an option to acquire Seventy-Five Thousand (75,000)
                  shares of the common stock of the Company at the fair market value
                  of such
                  common shares as of the date of the award.  Eighteen Thousand
                  Seven Hundred and Fifty (18,750) of such shares shall vest at the
                  time of
                  the award of such option and Eighteen Thousand Seven Hundred and
                  Fifty
                  (18,750) shares shall vest on each of the first three annual anniversaries
                  of such grant.  The term of such award shall be for a period of
                  five (5) years from the date of grant of each such award.  In
                  the event a Change In Control occurs before the third (3rd)
                  annual
                  anniversary of the date of such grant, then all Seventy-Five Thousand
                  (75,000) shares shall be fully vested immediately prior to the
                  Change In
                  Control.  Any subsequent annual award shall be subject to these
                  terms.

              


      

       

      
        
          
          

        

        
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      (b)           Restricted
        Stock.

       

      
        	
                 

              	
                (i)

              	
                Upon
                  the Effective Date of this Agreement, the Company shall grant Executive
                  an
                  equity award of Eighty Thousand (80,000) shares of restricted stock
                  under
                  the Plan.  Said restricted stock shall vest and the restrictions
                  thereon shall lapse in full on the third (3rd)
                  annual
                  anniversary of the Effective Date. In the event a Change In Control
                  occurs
                  after the six month anniversary of the Effective Date, but before
                  the
                  first annual anniversary of the Effective Date, Fifty Percent (50%)
                  of
                  said restricted stock shall vest and the restrictions thereon shall
                  lapse
                  immediately prior to the Change In Control.  In the event a
                  Change In Control occurs on or after the first annual anniversary
                  of the
                  Effective Date, but before the third (3rd)
                  annual
                  anniversary of the Effective Date, One Hundred Percent (100%) of
                  such
                  restricted stock shall fully vest and the restrictions thereon
                  shall lapse
                  immediately prior to the Change In Control.  A copy of the
                  Restricted Stock Award Agreement is attached hereto as Exhibit
                  B.

              


      

       

      
        	
                 

              	
                (ii)

              	
                In
                  addition, Executive shall receive on the second annual anniversary
                  of the
                  Effective Date (the “Grant Date”), a grant of restricted shares that shall
                  be based on the increase in the per share value of the Company’s common
                  stock from the Effective Date to the Grant Date based on the following
                  formula:  Executive shall be entitled to One Thousand (1,000)
                  restricted shares for each ten (10) cent per share increase in
                  the fair
                  market value of the Company’s common stock from the Effective Date to the
                  Grant Date.  For purposes of this Agreement, the fair market
                  value of the common stock as of the Effective Date shall be the
                  fair
                  market value utilized for the strike price for the stock option
                  award made
                  to Executive under Section 6(a)(i).  For purposes of this
                  Agreement, the fair market value as of the Grant Date shall be
                  determined
                  by taking the average of the closing sales prices of a share of
                  the
                  Company’s common stock as reported for each of the market trading days
                  within the ninety (90) day period (ending on the first market trading
                  date
                  prior to the Grant Date) preceding the Grant
                  Date.

              


      

       

      For
        example, if the fair market value of the common stock of Company on the
        Effective Date was Eight Dollars ($8.00) per share and the fair market value
        on
        the Grant Date was Eleven Dollars ($11.00) per share, Executive would be
        entitled to a grant of Thirty Thousand (30,000) restricted shares ($11.00
        -
        $8.00 = $3.00 ÷ .10 x 1,000 = 30,000 shares of restricted stock), which
        restricted shares shall be fully vested and shall not be subject to any risk
        of
        forfeiture on or after such second annual anniversary of the Effective
        Date.

       

      
        
          
          

        

        
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                (iii)

              	
                Notwithstanding
                  anything herein to the contrary, in the event of the death, Disability,
                  termination by the Company with Cause or resignation by the Executive
                  without Good Reason or in the event of a Change In Control as defined
                  in
                  Section 10 occurring prior to the second annual anniversary of
                  the
                  Effective Date, Executive shall not be entitled to a grant of performance
                  restricted shares pursuant to Section 6(b)(ii), it being the intent
                  of the
                  parties that Executive must be employed by the Company on the second
                  annual anniversary of the Effective Date in order for any performance
                  restricted shares to be issued under Section
                  6(b)(ii).  Notwithstanding anything contained herein, if
                  Executive’s employment is terminated by the Company without Cause or by
                  Executive for Good Reason prior to the second annual anniversary
                  of the
                  Effective Date, Executive shall be granted the performance restricted
                  shares described in Section 6(b)(ii) on the second annual anniversary
                  of
                  the Effective Date; provided that in lieu of issuing such restricted
                  shares, the Company shall have the option to pay Executive an amount
                  in
                  cash equal to the fair market value of such restricted shares as
                  of the
                  second annual anniversary of the Effective Date.  Any payment in
                  lieu of issuing restricted shares shall be made on the second annual
                  anniversary of the Effective Date.

              


      

       

      
        	
                 

              	
                (iv)

              	
                Executive
                  acknowledges that the grants of restricted shares made or to be
                  made
                  hereunder shall be in lieu of any other grant of restricted shares
                  that
                  may be made to senior management as part of their pay
                  plan.

              


      

       

      
        	
                 

              	
                (c)

              	
                Adjustments
                  to Number of Shares.  The provisions of this Section 6 shall
                  be appropriately adjusted for any stock splits, reverse splits,
                  stock
                  dividends, combinations or reclassifications of the Company’s common
                  stock, or any other similar increases or decreases in the number
                  of issued
                  shares of such common stock effected without receipt of consideration
                  by
                  the Company.

              


      

      


      
        	
                 

              	
                (d)

              	
                Representations
                  and Warranties of the Company.  The Company represents and
                  warrants to Executive that (i) the shares he acquires pursuant to
                  options and restricted stock awards as provided for in this Agreement
                  will
                  be issued under the Plan; (ii) the Plan and the options and
                  restricted stock awards to be made hereunder are covered under
                  a Form S-8
                  registration statement (the effectiveness of which shall continue
                  to be
                  maintained so that Executive can resell the shares he receives
                  pursuant to
                  options and restricted stock awards pursuant to this Agreement
                  on a
                  current basis once exercised or vested, as applicable), (iii) there
                  are currently, and will continue to be, adequate shares available
                  under
                  the Plan for the issuance of stock pursuant to all options and
                  the
                  restricted stock awards provided for in this Agreement; and (iv) the
                  Plan permits the contemplated provisions of such
                  grants.

              


      

       

      
        
          
          

        

        
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      7.           
        Fringe Benefits.

       

      During
        the Employment Term, Executive shall be entitled to the following
        benefits:

       

      
        	
                 

              	
                (a)

              	
                Insurance.  Executive
                  shall be provided with standard medical, health, and other insurance
                  coverage in accordance with the plans from time to time maintained
                  by the
                  Company for its senior management
                  employees.

              


      

       

      
        	
                 

              	
                (b)

              	
                Vacation.  Executive
                  shall be entitled each year to four (4) weeks of vacation, during
                  which
                  his compensation will be paid in full; provided, however, Executive
                  shall
                  not take more than two weeks of vacation consecutively without
                  the prior
                  written consent of the Board.

              


      

       

      
        	
                 

              	
                (c)

              	
                Insurance
                  During the Term of Employment Agreement.  Company shall
                  maintain on the life of the Executive, provided he is insurable
                  at
                  standard rates, a term life insurance policy in the amount of One
                  Million
                  Dollars ($1,000,000.00).  Executive shall have the right to
                  designate the beneficiary of such policy.  Executive agrees to
                  take any and all physicals that are necessary incident to the issuance
                  and/or renewal of said policy.  In addition, Executive agrees to
                  take any and all physicals necessary incident to the procurement
                  of Key
                  Man insurance upon his life by Company.  In the event that
                  Executive is not insurable at standard rates during the term of
                  this
                  Agreement, but Executive is able to procure rated coverage, Executive
                  has
                  the right to procure coverage at a lower amount of insurance, the
                  cost of
                  which is equivalent to the standard term rate cost of One Million
                  Dollars
                  ($1,000,000.00) in coverage.  In the event Executive is not
                  insurable, then Company shall, within thirty (30) days following
                  the date
                  that Executive is determined to be uninsurable, pay Executive an
                  amount
                  equal to the projected cost of the contemplated term insurance
                  of One
                  Million Dollars ($1,000.000.00) at standard rates.  In the event
                  that Executive should die prior to the insurance being obtained
                  hereunder
                  or in the event insurance cannot be obtained for medical reasons,
                  Company
                  shall have no obligation to Executive or his beneficiary for payment
                  of
                  any of the death benefit amount upon Executive’s death.  Company
                  and Executive agree to use diligent efforts after the Effective
                  Date to
                  obtain the coverage upon Executive’s life
                  hereunder.

              


      

       

      
        	
                 

              	
                (d)

              	
                Housing
                  Allowance.  Company shall provide Executive with a housing
                  allowance of up to Two Thousand Five Hundred Dollars ($2,500.00)
                  per month
                  to be paid on the first of every month.  The Executive shall
                  enter into a lease agreement that shall provide housing for Executive
                  near
                  the Company’s headquarters during the Employment Term, provided that the
                  term of such lease shall not exceed six months at any time.  In
                  the event the Executive terminates his employment with the Company
                  following a Change In Control or with Good Reason, or the Company
                  terminates his employment with the Company without Cause, and he
                  thereafter vacates the leased premises, the Company shall reimburse
                  the
                  Executive for any lease termination expense or for all remaining
                  obligations under the lease within ten (10) days after the date
                  Executive
                  submits such expenses to the
                  Company.

              


      

       

      
        
          
          

        

        
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                (e)

              	
                Automobile
                  Allowance.  Company shall provide Executive with an
                  automobile allowance of Nine Hundred Dollars ($900.00) per month
                  to be
                  paid on the first of every month.

              


      

       

      
        	
                 

              	
                (f)

              	
                Travel
                  Allowance.  Company shall provide Executive with a travel
                  allowance of Four Thousand Five Hundred Dollars ($4,500.00) per
                  month to
                  be paid on the first of every
                  month.

              


      

       

      
        	
                 

              	
                (g)

              	
                Expenses.   During
                  the Employment Term, Executive shall be entitled to receive prompt
                  reimbursement for all reasonable and customary travel and entertainment
                  expenses or other out-of-pocket business expenses incurred by Executive
                  in
                  preparing for and fulfilling the Executive’s duties and responsibilities
                  hereunder, including all expenses for (i) travel while away from home
                  on business or at the request or in the service of the Company
                  (but
                  excluding any commuting expenses covered by Section 7(f)), (ii)
                  mobile
                  phone service, (iii) email, fax and long distance communications
                  expenses in respect of the Executive’s home office in Plano, Texas, and
                  (iv) legal fees and expenses related to the negotiation and
                  preparation of this Agreement and the documents referred to herein
                  in an
                  amount not to exceed Twenty Thousand Dollars ($20,000.00); provided
                  that
                  such expenses are incurred and accounted for in accordance with
                  the
                  policies and procedures established by the Company.  Executive
                  shall use reasonable best efforts to take advantage of advance
                  purchase
                  pricing for airplane tickets.  Amounts reimbursable pursuant to
                  this subparagraph (g) shall be paid upon the earlier of (i) thirty
                  (30)
                  days after Executive’s submission of a request for reimbursement and (ii)
                  the fifteenth (15th)
                  day of the
                  third (3rd)
                  month of
                  the Company’s fiscal year following the year in which the expense was
                  incurred.

              


      

       

      
        	
                 

              	
                (h)

              	
                Benefit
                  Plans.  Executive shall participate, after meeting
                  eligibility requirements, in any qualified retirement plans and/or
                  welfare
                  plans maintained by the Company during the Employment
                  Term.

              


      

       

      8.           
        Termination.

       

      Executive’s
        employment hereunder and the Employment Term shall be terminated under the
        first
        of the following to occur:

       

      
        	
                 

              	
                (a)

              	
                Death.  The
                  Executive’s employment hereunder shall automatically terminate upon the
                  death of the Executive.

              


      

       

      
        	
                 

              	
                (b)

              	
                Disability.  The
                  Executive’s employment hereunder shall terminate upon written notice by
                  the Company to the Executive, of termination due to
                  Disability.  For purposes of this Agreement, “Disability” or
                  “Disabled” shall mean the Executive’s incapacity due to physical or mental
                  illness to substantially perform his duties and the essential functions
                  of
                  his position, with or without reasonable accommodation on a full-time
                  basis for One Hundred Eighty (180) days (including weekends and
                  holidays)
                  in any Three Hundred Sixty-Five (365) day period.  The existence
                  or non-existence of a physical or mental injury, infirmity or incapacity
                  shall be determined by an independent physician mutually agreed
                  to by the
                  Company and the Executive (provided that neither party shall unreasonably
                  withhold their consent).

              


      

       

      
        
          
          

        

        
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                (c)

              	
                Cause.
                  The Company may terminate the Executive’s employment hereunder for
                    Cause.  For purposes of this Agreement, the Company shall have
                  “Cause” to terminate the Executive’s employment hereunder
                  upon:

              


      

       

      
        	
                 

              	
                (i)

              	
                The
                  conviction of Executive of a felony or other crime involving theft,
                  misappropriation of funds, fraud or moral
                  turpitude;

              


      

       

      
        	
                 

              	
                (ii)

              	
                The
                  engaging by Executive in conduct which is demonstrably and materially
                  injurious to the Company, monetarily or otherwise, including but
                  not
                  limited to any material misrepresentation related to the performance
                  of
                  his duties, misappropriation, fraud, including with respect to
                  the
                  Company’s accounting and financial statements, embezzlement or conversion
                  by Executive of the Company’s or any of its subsidiaries’ property in
                  connection with Executive’s duties or in the course of the Executive’s
                  employment with the Company;

              


      

       

      
        	
                 

              	
                (iii)

              	
                Executive’s
                  gross negligence or gross misconduct in carrying out his duties
                  hereunder
                  resulting, in either case, in material harm to the Company;
                  or

              


      

       

      
        	
                 

              	
                (iv)

              	
                Any
                  act or omission constituting a material breach by the Executive
                  of any
                  material provision of this
                  Agreement.

              


      

       

      Notwithstanding
        the foregoing, in the event the basis for a termination for Cause is under
        subsections 8(c)(iii) or (iv) above, Executive shall not be deemed to have
        been
        terminated for Cause unless and until there shall have been delivered to
        him a
        copy of a resolution of the Board asserting that he has engaged in the conduct
        set forth above in Sections 8(c)(iii) or (iv) (as interpreted and enforced
        consistently with the Company’s treatment of all other executives and senior
        management) and specifying the particulars thereof in detail, and Executive
        shall not have cured such conduct to the reasonable satisfaction of the Board
        within thirty (30) days after receipt of such resolution.

       

      
        	
                 

              	
                (d)

              	
                Without
                  Cause.  Upon written notice by the Company to the Executive
                  of an involuntary termination without Cause, other than for death
                  or
                  Disability.

              


      

       

      
        	
                 

              	
                (e)

              	
                Good
                  Reason.  Upon written notice by the Executive to the Company
                  of the termination of his employment hereunder for Good
                  Reason.  “Good Reason” shall mean Executive’s resignation from
                  employment within ninety (90) days after the occurrence of one
                  of the
                  events hereinafter enumerated; provided, however, that Executive
                  must
                  provide written notice to the Company within thirty (30) days after
                  the
                  occurrence of the event allegedly constituting Good Reason and
                  the Company
                  shall have thirty (30) days after such notice is given to
                  cure:  (i) a material diminution in Executive’s authority,
                  duties or responsibilities without Executive’s written consent; (ii) a
                  material diminution in Executive’s  Base Salary or targeted
                  annual bonus at any time during the Employment Term without Executive’s
                  written consent; (iii) a requirement that Executive report to an
                  officer
                  or employee of the Company instead of reporting directly to the
                  Board and
                  (iv) any other action or inaction that constitutes a material breach
                  by
                  Company of this Agreement.

              


      

       

      
        
          
          

        

        
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                (f)

              	
                Voluntary
                  Termination.  If Executive terminates employment with
                  Company without Good Reason, Executive agrees to provide the Company
                  with
                  thirty (30) days prior written notice.  Company, in its sole
                  discretion, following its receipt of such written notice from Executive
                  may accelerate the termination of Executive’s employment and the right to
                  any further compensation to a date prior to the thirtieth (30th)
                  day after
                  such written notice is given.

              


      

       

      
        	
                 

              	
                (g)

              	
                Date
                  of Termination.  For purposes of this Agreement, “Date of
                  Termination” shall mean (i) if Executive is terminated as Chief Executive
                  Officer/President by the Company for Disability, thirty (30) days
                  after
                  written notice of such determination is given to Executive (provided
                  that
                  Executive shall not have returned to perform his duties on a full
                  time
                  basis during such thirty (30) day period); (ii) if Executive’s employment
                  is terminated by the Company for any other reason, the date on
                  which a
                  written notice of termination is given, provided that, in the case
                  of the
                  termination for Cause under Sections 8(c)(iii) or (iv), Executive
                  shall
                  not have cured the matter or matters stated in the Notice of Termination
                  within the thirty (30) day period provided in Section 8(c)(iii)
                  or (iv);
                  (iii) if Executive terminates his employment for Good Reason, the
                  date of
                  Executive’s resignation, provided that the notice and cure provisions in
                  Section 8(e) have been complied with; (iv) if Executive terminates
                  employment for other than Good Reason, the date specified in Executive’s
                  notice in compliance with Section 8(f) or, (v) in the event of
                  Executive’s
                  death, the date of death.

              


      

       

      
        	
                 

              	
                (h)

              	
                Notice
                  of Termination.  Any termination of Executive’s employment
                  by the Company or by Executive under this Section 8 (other than
                  in the
                  case of death) shall be communicated by a written notice (“Notice of
                  Termination”) to the other party hereto, indicating the specific
                  termination provision in this Agreement relied upon. If the termination
                  provision relied upon requires notice and an opportunity to cure,
                  then the
                  Notice of Termination shall set forth in reasonable detail any
                  facts and
                  circumstances claimed to provide a basis for termination of Executive’s
                  employment under the provisions so indicated.   The Notice
                  of Termination shall specify a date of termination and shall be
                  delivered
                  within the time period set forth in the various paragraphs of this
                  Section
                  8, as applicable (the “Notice
                  Period”).

              


      

       

      
        	
                 

              	
                (i)

              	
                Compliance
                  with 409A.  To the extent any payment under Section 9 is
                  subject to Section 409A of the Internal Revenue Code of 1986, as
                  amended
                  (the “Code”) or exempt therefrom solely by virtue of the separation pay
                  plan exceptions under Treasury Regulations Section 1.409A-1(b)(9),
                  a
                  termination of Executive’s employment will not be deemed to occur unless
                  such termination constitutes a separation from service under Section
                  409A
                  of the Code and the regulations promulgated
                  thereunder.

              


      

       

      
        
          
          

        

        
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      9.           
        Compensation Upon Termination.

       

      
        	
                 

              	
                (a)

              	
                Disability.  In
                  the event the Employment Term ends on account of Executive’s Disability,
                  the Company shall pay or provide Executive (i) any unpaid Base
                  Salary
                  through the date of termination and any accrued vacation in accordance
                  with Company policy; (ii) any unpaid bonus earned with respect
                  to any
                  fiscal year or any fiscal quarter ending on or preceding the date
                  of
                  termination; and (iii) reimbursements for any unreimbursed expenses
                  incurred through the date of termination (collectively “Accrued
                  Amounts”).  In addition, Executive shall receive any Prorata
                  Bonus as hereinafter defined.  For purposes hereof, a “Prorata
                  Bonus” shall be determined by calculating a prorata portion of the
                  Executive’s targeted bonus for the performance year in which the
                  Executive’s termination occurs (determined by multiplying the amount the
                  Executive would have received had his employment continued through
                  the end
                  of the performance year, assuming 100% achievement of the targeted
                  amount,
                  by a fraction, the number of which is the number of days during
                  the
                  performance year of termination that the Executive is employed
                  by the
                  Company and the denominator of which is Three Hundred Sixty-Five
                  (365)).  The Accrued Amounts and Prorata Bonus shall be paid
                  within ten (10) days after the Date of Termination.  In
                  addition, Executive shall be entitled to the
                  following:

              


      

       

      
        	
                 

              	
                (i)

              	
                an
                  amount equal to his then-applicable full Base Salary minus Eighty-Four
                  Thousand Dollars ($84,000) (or such other amount as may be available
                  to
                  Executive pursuant to any salary continuation benefits under an
                  accident
                  and health benefit plan sponsored by the Company) to be paid within
                  ten
                  (10) days after the Date of Termination;
                  and

              


      

       

      
        	
                 

              	
                (ii)

              	
                Executive
                  shall be entitled to any rights he may have under the Consolidated
                  Omnibus
                  Budget Reconciliation Act of 1985, as amended (“COBRA”). Company shall
                  reimburse Executive for any premium for COBRA health, dental, and
                  vision
                  coverage paid by Executive (including coverage for Executive’s family) for
                  a period of one (1) year after the Date of Termination.  To the
                  extent permitted by the terms of any other welfare benefit program
                  sponsored by the Company and to the extent such coverage can be
                  provided
                  in a manner that will not result in a violation of Code Section
                  409A
                  (based upon applicable regulations and other published guidance
                  thereunder), Executive shall continue to be eligible to participate
                  in any
                  other welfare benefit program sponsored by the Company for a period
                  of one
                  (1) year following the Date of
                  Termination.

              


      

       

      
        	
                 

              	
                (b)

              	
                Death.  In
                  the event of Executive’s death, the Executive’s estate (or to the extent a
                  beneficiary has been designated in accordance with a program, the
                  beneficiary under such program) shall be entitled to any Accrued
                  Amounts
                  and a Prorata Bonus (as defined in Section 9(a).  Such Accrued
                  Amounts and Prorata Bonus shall be paid within ten (10) days after
                  the
                  date of Executive’s death.

              


      

       

      
        
          
          

        

        
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                (c)

              	
                Termination
                  for Cause or Without Good Reason.  If the Executive’s
                  employment should be terminated (i) by the Company for Cause, or
                  (ii) by
                  the Executive without Good Reason, Company shall pay to the Executive
                  any
                  Accrued Amounts within ten (10) days after the Date of
                  Termination.

              


      

       

      
        	
                 

              	
                (d)

              	
                Termination
                  Without Cause or For Good Reason.  If Executive’s employment
                  is terminated by the Company without Cause or the Executive terminates
                  his
                  employment for Good Reason, Executive shall be entitled to receive
                  from
                  the Company all Accrued Amounts through the Date of Termination
                  and a
                  Prorata Bonus (as defined in Section 9(a).  Such Accrued Amounts
                  and Prorata Bonus shall be paid within ten (10) days after the
                  Date of
                  Termination.  Contingent upon Executive delivering to the
                  Company a release in the form attached hereto as Exhibit C, and
                  the
                  expiration of all revocation periods related thereto, Executive
                  shall be
                  entitled to the following:

              


      

       

      
        	
                 

              	
                (i)

              	
                within
                  ten (10) days following the Date of Termination, the Company shall
                  pay
                  Executive an amount equal to the Executive’s then-applicable full Base
                  Salary, the targeted bonus amount for the year in which the Termination
                  without Cause or for Good Reason occurs minus the amount of the
                  Prorata
                  Bonus determined under Section 9(d), and the targeted bonus amounts
                  for
                  the remaining balance of the Initial Term or any Renewal Term;
                  provided
                  that if Executive’s targeted bonus amount has not been determined for any
                  period of the remainder of the Initial Term or any Renewal Term
                  as of the
                  Date of Termination, it shall be deemed for the remainder of the
                  Initial
                  Term or any Renewal Term to be on the terms most recently determined,
                  based upon 100% achievement of the targeted amount, and all applicable
                  criteria shall be deemed to have been satisfied for the remainder
                  of the
                  Initial Term or any Renewal Term (including the year in which the
                  Date of
                  Termination occurs) to achieve the targeted bonus amounts; and
                  provided
                  further that in no event shall the payment of Base Salary be for
                  a period
                  of less than one year, even if less than one year remains in the
                  Initial
                  Term or any Renewal Term as of the Date of Termination;
                  and

              


      

      


      
        	
                 

              	
                (ii)

              	
                Executive
                  shall be entitled to his COBRA rights under the Company’s group health
                  plans and Company shall reimburse Executive for any premiums paid
                  by
                  Executive for COBRA health, dental, and vision coverage (including
                  coverage for Executive’s family) for the balance of the Initial Term or
                  any Renewal Term or the period that Executive is eligible for coverage
                  pursuant to COBRA, whichever is less.  If the period of COBRA
                  coverage expires prior to the expiration of the Initial Term or
                  any
                  Renewal Term, the Company shall provide Executive with an insurance
                  policy
                  or policies that provide benefits comparable to the health, dental,
                  and
                  vision coverage provided to Executive and his family immediately
                  prior to
                  the expiration of the period of COBRA coverage, provided he and
                  his family
                  are insurable at standard or reasonably standard rates. The Company
                  will
                  provide such policies through the remainder of the Initial Term
                  or any
                  Renewal Term or, if earlier, the last day of the second calendar
                  year
                  following the calendar year of the Date of Termination or until
                  Executive
                  obtains employment that offers similar or improved benefits.  The
                  Executive shall notify the Company within thirty (30) days after
                  becoming
                  eligible for coverage of any such benefits.  To the extent
                  permitted by the terms of any other welfare benefit program sponsored
                  by
                  the Company and to the extent such coverage can be provided in
                  a manner
                  that will not result in a violation of Code Section 409A (based
                  upon
                  applicable regulations and other published guidance thereunder),
                  Executive
                  shall continue to be eligible to participate in any other welfare
                  benefit
                  program sponsored by the Company for the remainder of the Initial
                  Term or
                  any Renewal Term; and

              


      

       

      
        
          
          

        

        
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            -

          
            

          

        

        
          
          

        

         

      

      
        	
                 

              	
                (iii)

              	
                all
                  of Executive’s options to purchase stock of the Company and all restricted
                  stock that has been granted to him shall be fully vested, effective
                  as of
                  the date of the termination of his
                  employment.

              


      

       

      No
        amounts paid under this Section 9 will be reduced by any earnings that Executive
        may receive from any other source.

      


      10.          Change
        In Control Benefits.

       

      
        	
                 

              	
                (a)

              	
                For
                  purposes of this Agreement, “Change In Control”
                  shall mean the first to occur of any of the following
                  events:

              


      

       

      
        	
                 

              	
                (i)

              	
                any
                  “person” (as defined in Section 13(d) and 14(d) of the Securities Exchange
                  Act of 1934, as amended (the “Exchange Act”),
                  excluding for this purpose, (A) the Company or any subsidiary
                  of
                  the Company, or (B) any employee benefit plan of the Company or
                  any
                  subsidiary of the Company, or any person or entity organized, appointed
                  or
                  established by the Company for or pursuant to the terms of any
                  such plan,
                  which acquires beneficial ownership of voting securities of the
                  Company,
                  is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
                  Exchange Act), directly or indirectly of securities of the Company
                  representing more than fifty percent (50%) of the combined voting
                  power of
                  the Company’s then outstanding securities; provided, however, that no
                  Change In Control will be deemed to have occurred as a result of
                  a change
                  in ownership percentage resulting solely from an acquisition of
                  securities
                  by the Company; or

              


      

       

      
        	
                 

              	
                (ii)

              	
                persons
                  who, as of the Effective Date constitute the Board (the “Incumbent
                  Directors”) cease for any reason, including
                  without limitation, as a result of a tender offer, proxy contest,
                  merger
                  or similar transaction, to constitute at least a majority thereof,
                  provided that any person becoming a director of the Company subsequent
                  to
                  the Effective Date shall be considered an Incumbent Director if
                  such
                  person’s election or nomination for election was approved by a vote of
                  at
                  least fifty percent (50%) of the Incumbent Directors; but provided
                  further, that any such person whose initial assumption of office
                  is in
                  connection with an actual or threatened election contest relating
                  to the
                  election of members of the Board or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a “person” (as
                  defined in Section 13(d) and 14(d) of the Exchange Act) other than
                  the
                  Board, including by reason of agreement intended to avoid or settle
                  any
                  such actual or threatened contest or solicitation, shall not be
                  considered
                  an Incumbent Director; or

              


      

       

      
        
          
          

        

        
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                (iii)

              	
                consummation
                  of a reorganization, merger or consolidation or sale or other disposition
                  of at least eighty percent (80%) of the assets of the Company (a
                  “Business Combination”), unless, in each case, following
                  such Business Combination, all or substantially all of the individuals
                  and
                  entities who were the beneficial owners of outstanding voting securities
                  of the Company immediately prior to such Business Combination beneficially
                  own, directly or indirectly, more than fifty percent (50%) of the
                  combined
                  voting power of the then outstanding voting securities entitled
                  to vote
                  generally in the election of directors of the company resulting
                  from such
                  Business Combination (including, without limitation, a company
                  which, as a
                  result of such transaction, owns the Company or all or substantially
                  all
                  of the Company’s assets either directly or through one or more
                  subsidiaries) in substantially the same proportions as their ownership,
                  immediately prior to such Business Combination, of the outstanding
                  voting
                  securities of the Company; or

              


      

       

      
        	
                 

              	
                (iv)

              	
                approval
                  by the stockholders of the Company of a complete liquidation or
                  dissolution of the Company.

              


      

       

      
        	
                 

              	
                (b)

              	
                Upon
                  a Change In Control of the Company, the Executive shall be entitled
                  to
                  receive the following:

              


      

       

      
        	
                 

              	
                (i)

              	
                The
                  Company shall pay or provide to the Executive the Accrued Amounts
                  within
                  ten (10) days after the Change In
                  Control.

              


      

       

      
        	
                 

              	
                (ii)

              	
                In
                  addition, all of Executive’s stock options and restricted shares shall
                  vest according to the terms contained in the respective award agreement(s)
                  executed incident to the grant of such options or restricted
                  shares.

              


      

       

      
        	
                 

              	
                (iii)

              	
                Within
                  ten (10) days following the Change In Control, the Company shall
                  pay
                  Executive an amount equal to the Executive’s full Base Salary, the
                  targeted bonus amount for the year in which the Change In Control
                  occurs,
                  and the targeted bonus amounts for the remaining balance of the
                  Initial
                  Term or any Renewal Term; provided that if Executive’s targeted bonus
                  amount has not been determined for any period of the remainder
                  of the
                  Initial Term or any Renewal Term as of the Change In Control, it
                  shall be
                  deemed for the remainder of the Initial Term or any Renewal Term
                  to be on
                  the terms most recently determined, based upon 100% achievement
                  of the
                  targeted amount, and all applicable criteria shall be deemed to
                  have been
                  satisfied for the remainder of the Initial Term or any Renewal
                  Term
                  (including the year in which the Change In Control occurs) to achieve
                  the
                  targeted bonus amounts; and provided further that in no event shall
                  the
                  payment of Base Salary be for a period of less than one year, even
                  if less
                  than one year remains in the Initial Term or any Renewal Term as
                  of the
                  Change In Control.

              


      

       

      
        
          
          

        

        
          -
            14
            -

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                (iv)

              	
                If
                  Executive’s employment is terminated by the Company without Cause or the
                  Executive terminates his employment for Good Reason upon the Change
                  In
                  Control, Executive shall be entitled to the benefits set forth
                  in Section
                  9(d)(ii).

              


      

       

      
        	
                 

              	
                (v)

              	
                Anything
                  in this Agreement to the contrary notwithstanding, in the event
                  that it is
                  determined that any payment (other than the Gross-Up payments provided
                  for
                  in this subsection) or distribution by the Company or any of its
                  affiliates to or for the benefit of the Executive, whether paid
                  or payable
                  or distributed or distributable pursuant to the terms of this Agreement
                  or
                  otherwise pursuant to or by reason of any other agreement, policy,
                  plan,
                  program or arrangement, including without limitation any stock
                  option or
                  similar right, or the lapse or termination of any restriction on
                  or the
                  vesting or exercisability of any of the foregoing (a “Payment”), would be
                  subject to the excise tax imposed by Section 4999 of the Internal
                  Revenue Code of 1986, as amended (the “Code”) (or any successor provision
                  thereto) by reason of being considered “contingent on a change in
                  ownership or control” of Company or any of its affiliates, within the
                  meaning of Section 280G of the Code (or any successor provision
                  thereto) or to any similar tax imposed by state or local law, or
                  any
                  interest or penalties with respect to such tax (such tax
                  or  taxes, together with any such interest and penalties, being
                  hereafter collectively referred to as the “Excise Tax”), then the
                  Executive will be entitled to receive an additional payment or
                  payments
                  (collectively, a “Gross-Up Payment”).  The Gross-Up Payment will
                  be in an amount such that, after payment by the Executive of all
                  taxes
                  (including any interest or penalties imposed with respect to such
                  taxes),
                  including any Excise Tax imposed upon the Gross-Up Payment, the
                  Executive
                  retains an amount of the Gross-Up Payment equal to the Excise Tax
                  imposed
                  upon the Payment.  For purposes of determining the amount of the
                  Gross-Up Payment, the Executive will be considered to pay (1) federal
                  income taxes at the highest rate in effect in the year in which
                  the
                  Gross-Up Payment will be made and (2) state and local income taxes at
                  the highest rate in effect in the state or locality in which the
                  Gross-Up
                  Payment would be subject to state or local tax, net of the maximum
                  reduction in federal income tax that could be obtained from deduction
                  of
                  such state and local taxes.  The Gross-Up Payment shall be made
                  to Executive on or as soon as practicable following the date of
                  the
                  closing of the transaction resulting in such change in control,
                  and in no
                  event later than the end of the calendar year next following the
                  calendar
                  year in which Executive pays the Excise
                  Taxes.

              


      

       

      
        
          
          

        

        
          -
            15
            -

          
            

          

        

        
          
          

        

      

       

      The
        determination of whether an Excise Tax would be imposed, the amount of such
        Excise Tax, and the calculation of the amounts referred to above will be
        made by
        the Company’s regular independent accounting firm (as in effect immediately
        prior to the transaction that gives rise to the Excise Tax) at the expense
        of
        the Company or, at the election of Executive, another nationally recognized
        independent accounting firm, which shall provide detailed supporting
        calculations.

       

      11.          Confidentiality,
        Competition, etc.

       

      
        	
                 

              	
                (a)

              	
                Confidentiality.  The
                  Executive agrees that he shall not, directly or indirectly, make
                  available, sell, disclose or otherwise communicate to any person,
                  other
                  than in the course of the Executive’s employment and for the benefit of
                  the Company (as determined by the Executive in good faith), either
                  during
                  the period of the Executive’s employment or at any time thereafter, any
                  nonpublic, proprietary or confidential information, knowledge or
                  data
                  relating to the Company, any of its subsidiaries, affiliated companies
                  or
                  businesses, which shall have been obtained by the Executive during
                  the
                  Executive’s employment by the Company. The foregoing shall not apply to
                  information that (i) was known to the public prior to its disclosure
                  to
                  the Executive; (ii) becomes known to the public subsequent to disclosure
                  to the Executive through no wrongful act of the Executive or any
                  representative of the Executive; or (iii) the Executive is required
                  to
                  disclose by applicable law, regulation or legal process (provided
                  that the
                  Executive provides the Company with prior notice of the contemplated
                  disclosure and reasonably cooperates with the Company at its expense
                  in
                  seeking a protective order or other appropriate protection of such
                  information). Notwithstanding clauses (i) and (ii) of the preceding
                  sentence, the Executive’s obligation to maintain such disclosed
                  information in confidence shall not terminate where only portions
                  of the
                  information are in the public
                  domain.

              


      

       

      
        	
                 

              	
                (b)

              	
                Nonsolicitation.
                  During the Executive’s employment with the Company and for the one (1)
                  year period thereafter, the Executive agrees that he will not,
                  directly or
                  indirectly, individually or on behalf of any other person, firm,
                  corporation or other entity, knowingly solicit, aid or induce (i)
                  any
                  managerial level employee of the Company or any of its subsidiaries
                  or
                  affiliates to leave such employment in order to accept employment
                  with or
                  render services to or with any other person, firm, corporation
                  or other
                  entity unaffiliated with the Company or knowingly take any action
                  to
                  materially assist or aid any other person, firm, corporation or
                  other
                  entity in hiring any such employee (provided, that the foregoing
                  shall not
                  be violated by general advertising not targeted at Company employees
                  nor
                  by serving as a reference for an employee with regard to an entity
                  with
                  which the Executive is not affiliated), or (ii) any customer of
                  the
                  Company or any of its subsidiaries or affiliates to purchase goods
                  or
                  services then sold by the Company or any of its subsidiaries or
                  affiliates
                  from another person, firm, corporation or other entity or assist
                  or aid
                  any other persons or entity in identifying or soliciting any such
                  customer
                  (provided, that the foregoing shall not apply to any product or
                  service
                  which is not covered by the noncompetition provision set forth
                  In Section
                  11(c), below).

              


      

       

      
        
          
          

        

        
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                (c)

              	
                Noncompetition. The
                  Executive acknowledges that he performs services of a unique nature
                  for
                  the Company that are irreplaceable, and that his performance of
                  such
                  services to a competing entity that (i) is a value added reseller
                  of
                  computer hardware or software or (ii) provides product services,
                  consulting services and professional services, including but not
                  limited
                  to advisory services, deployment services, staffing services and
                  information technology outsourcing services (collectively, “Infrastructure
                  Solutions Services”) will result in irreparable harm to the Company.
                  Accordingly, during the Executive’s employment hereunder, and, except as
                  provided in Section 11(h), for the one (1) year period thereafter,
                  the
                  Executive agrees that the Executive will not, directly or indirectly,
                  own,
                  manage, operate, control, be employed by (whether as an employee,
                  consultant, independent contractor or otherwise, and whether or
                  not for
                  compensation), or render services to, any person, firm, corporation
                  or
                  other entity, in whatever form, that is (i) a value added reseller of
                  computer hardware or software or (ii) an Infrastructure Solution
                  Services provider, and, in either case, provides goods or services
                  primarily to customers in North America.  This Section 11(c)
                  shall not prevent the Executive from (i) owning not more than one
                  percent
                  (1%) of the total shares of all classes of stock outstanding of
                  any
                  publicly traded entity that is a value added reseller of computer
                  hardware
                  or software, (ii) rendering services to charitable organizations,
                  as such
                  term is defined in Section 501(c) of the Code, or (iii) directly
                  or
                  indirectly owning, managing, operating, controlling, or being employed
                  by
                  (whether as an employee, consultant, independent contractor or
                  otherwise,
                  and whether or not for compensation), or rendering services to,
                  any
                  person, firm, corporation or other entity, in whatever form, that
                  is in
                  any of the following businesses: (A) developing computer software
                  (but not such a developer that sells software directly to end users),
                  (B)
                  selling computer hardware or software to persons or entities other
                  than
                  end users, and (C) providing consulting services to clients in
                  industries
                  to which the Company has not provided Infrastructure Solution Services
                  during the year preceding termination of the Executive’s employment with
                  the Company.

              


      

       

      
        	
                 

              	
                (d)

              	
                Nondisparagement. Each
                  of the Executive and the Company (for purposes hereof, “the Company” shall
                  mean only (i) the Company by press release or other formally released
                  announcement and (ii) the executive officers and directors thereof
                  and not
                  any other employees) agrees that during the Employment Term and
                  for five
                  (5) years thereafter not to make any public statements that disparage
                  the
                  other party, or in the case of the Company, its respective affiliates,
                  employees, officers, directors, products or
                  services.  Notwithstanding the foregoing, statements made in the
                  course of sworn testimony in administrative, judicial or arbitral
                  proceedings (including, without limitation, depositions in connection
                  with
                  such proceedings) shall not be subject to this Section 11(d). This
                  provision shall also not cover normal competitive statements which
                  do not
                  cite the Executive’s employment by the
                  Company.

              


      

       

      
        
          
          

        

        
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                (e)

              	
                Equitable
                  Relief and Other Remedies. The parties acknowledge and agree that the
                  other party’s remedies at law for a breach or threatened breach of any of
                  the provisions of this Section would be inadequate and, in recognition
                  of
                  this fact, the parties agree that, in the event of such a breach
                  or
                  threatened breach, in addition to any remedies at law, the other
                  party,
                  without posting any bond, shall be entitled to obtain equitable
                  relief in
                  the form of specific performance, temporary restraining order,
                  a temporary
                  or permanent injunction or any other equitable remedy which may
                  then be
                  available.

              


      

       

      
        	
                 

              	
                (f)

              	
                Reformation.
                  If it is determined by a court of competent jurisdiction in any
                  state that
                  any restriction in this Section 11 is excessive in duration or
                  scope or is
                  unreasonable or unenforceable under the laws of that state, it
                  is the
                  intention of the parties that such restriction may be modified
                  or amended
                  by the court to render it enforceable to the maximum extent permitted
                  by
                  the law of that state.

              


      

       

      
        	
                 

              	
                (g)

              	
                Survival
                  of Provisions. The obligations contained in this Section 11 shall
                  survive the termination or expiration of the Executive’s employment with
                  the Company and shall be fully enforceable
                  thereafter.

              


      

       

      
        	
                 

              	
                (h)

              	
                Non-Competition
                  Not Applicable.  The one (1) year non-competition provision
                  set forth in Section 11(c) commencing on the date of Executive’s
                  termination of employment shall not be applicable if the Executive’s
                  employment with the Company is terminated without Cause pursuant
                  to
                  Section 8(d), by the Executive for Good Reason pursuant to Section
                  8(e),  or if Company does not renew this Agreement upon the
                  expiration of the Initial Term of this Agreement or any Renewal
                  Term;
                  provided, however, such one (1) year non-competition provision
                  shall be
                  applicable in any such instance if the Company elects in writing
                  to
                  compensate Executive pursuant to Section 11(i) of this
                  Agreement.

              


      

      


      
        	
                 

              	
                (i)

              	
                Optional
                  Payment for Non-Competition.  In the event that (i) the
                  Company does not renew this Agreement upon the expiration of the
                  Initial
                  Term of this Agreement or any Renewal Term with notice to Executive
                  of
                  such nonrenewal at least thirty (30) days prior to the expiration
                  of the
                  Initial Term or any Renewal Term, (ii) if Company terminates Executive’s
                  employment with the Company without Cause, or (iii) Executive terminates
                  his employment for Good Reason, and Company provides Executive
                  notice of
                  its intent to exercise its option under this Section 11(i) on or
                  before
                  the Date of Termination, Company shall have the option to pay Executive
                  an
                  amount equal to his Base Salary that was in effect prior to such
                  non-renewal or other termination as set forth above within ten
                  (10) days
                  after the Date of Termination in consideration for Executive not
                  competing
                  with Company for a period of twelve (12) months from the Date of
                  Termination for any of the reasons set forth
                  above.

              


      

       

      
        
          
          

        

        
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      12.          Continued
        Availability and Cooperation.

       

      
        	
                 

              	
                (a)

              	
                Following
                  termination of the Executive’s employment with the Company, the Executive
                  shall cooperate fully with the Company and with the Company’s counsel in
                  connection with any present and future actual or threatened litigation,
                  administrative proceeding or investigation involving the Company
                  that
                  relates to events, occurrences or conduct occurring (or claimed
                  to have
                  occurred) during the period of the Executive’s employment by the Company.
                  Cooperation will include, but is not limited
                  to:

              


      

       

      
        	
                 

              	
                (i)

              	
                making
                  himself reasonably available for interviews and discussions with
                  the
                  Company’s counsel as well as for depositions and trial
                  testimony;

              


      

       

      
        	
                 

              	
                (ii)

              	
                if
                  depositions or trial testimony are to occur, making himself reasonably
                  available and cooperating in the preparation therefore, as and
                  to the
                  extent that the Company or the Company’s counsel reasonably
                  requests;

              


      

       

      
        	
                 

              	
                (iii)

              	
                refraining
                  from impeding in any way the Company’s prosecution or defense of such
                  litigation or administrative proceeding;
                  and

              


      

       

      
        	
                 

              	
                (iv)

              	
                cooperating
                  fully in the development and presentation of the Company’s prosecution or
                  defense of such litigation or administrative
                  proceeding.

              


      

       

      The
        Company will reimburse the Executive for reasonable travel, lodging, telephone
        and similar expenses, as well as reasonable attorneys’ fees (if independent
        legal counsel is necessary), incurred in connection with any cooperation,
        consultation and advice rendered under this Agreement after the Executive’s
        termination of employment; provided that (i) Executive shall not be required
        to
        make himself available for such purposes for more than three days in any
        calendar month, (ii) the Company and the Executive must mutually agree on
        which
        days the Executive will make himself available, and (iii) the Company shall
        pay
        in advance to the Executive (a) all reasonably anticipated travel and other
        expenses, subject to subsequent submission of supporting documentation and,
        if
        applicable, the refund by the Executive of any remaining balance of the advance
        after he has been reimbursed fully for the actual expenses incurred, and
        (b) a
        per diem, not accountable, of $2,500 per day.

       

      13.          Dispute
        Resolution.

       

      
        	
                 

              	
                (a)

              	
                In
                  the event that the parties are unable to resolve any controversy
                  or claim
                  arising out of or in connection with this Agreement or breach thereof,
                  either Party shall refer the dispute to binding arbitration, which
                  shall
                  be the exclusive forum for resolving such claims. Such arbitration
                  will be
                  administered by Judicial Arbitration and Mediation Services, Inc.
                  (“JAMS”)
                  pursuant to its Employment Arbitration Rules and Procedures and
                  governed
                  by Kentucky law. The arbitration shall be conducted by a single
                  arbitrator
                  selected by the parties according to the rules of JAMS. In the
                  event that
                  the parties fail to agree on the selection of the arbitrator within
                  thirty
                  (30) days after either party’s request for arbitration, the arbitrator
                  will be chosen by JAMS. The arbitration proceeding shall commence
                  on a
                  mutually agreeable date within ninety (90) days after the request
                  for
                  arbitration, unless otherwise agreed by the parties, and shall
                  be
                  conducted in the Commonwealth of
                  Kentucky.

              


      

       

      
        
          
          

        

        
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                (b)

              	
                The
                  parties agree that each will bear their own costs and attorneys’ fees. The
                  arbitrator shall not have authority to award attorneys’ fees or costs to
                  any party.

              


      

       

      
        	
                 

              	
                (c)

              	
                The
                  arbitrator shall have no power or authority to make awards or orders
                  granting relief that would not be available to a party in a court
                  of law.
                  The arbitrator’s award is limited by and must comply with this Agreement
                  and applicable federal, state, and local laws. The decision of
                  the
                  arbitrator shall be final and binding on the
                  parties.

              


      

       

      
        	
                 

              	
                (d)

              	
                Notwithstanding
                  the foregoing, no claim or controversy for injunctive or equitable
                  relief
                  contemplated by or allowed under applicable law pursuant to Section
                  11 of
                  this Agreement will be subject to arbitration under this Section
                  13, but
                  will instead be subject to determination in a court of competent
                  jurisdiction in the state of the place of performance, which court
                  shall
                  apply Kentucky law consistent with Section 13 of this Agreement,
                  where
                  either party may seek injunctive or equitable
                  relief.

              


      

       

      14.         
        Other Agreements.

       

      No
        agreements (other than the exhibits hereto and agreements evidencing any
        grants
        of equity awards) or representations, oral or otherwise, express or implied,
        with respect to the subject matter hereof have been made by either party
        which
        are not expressly set forth in this Agreement. Each party to this Agreement
        acknowledges that no representations, inducements, promises, or other
        agreements, orally or otherwise, have been made by any party, or anyone acting
        on behalf of any party, pertaining to the subject matter hereof, which are
        not
        embodied herein, and that no prior and/or contemporaneous agreement, statement
        or promise pertaining to the subject matter hereof that is not contained
        in this
        Agreement shall be valid or binding on either party.

       

      15.          Withholding
        of Taxes.

       

      The
        Company will withhold from any amounts payable under this Agreement all federal,
        state, city or other taxes as the Company is required to withhold pursuant
        to
        any law or government regulation or ruling.

       

      16.          Successors
        and Binding Agreement.

       

      
        	
                 

              	
                (a)

              	
                The
                  Company will require any successor (whether direct or indirect,
                  by
                  purchase of assets or stock, merger, consolidation, reorganization
                  or
                  otherwise) to all or substantially all of the business or assets
                  of the
                  Company expressly to assume and agree to perform this Agreement
                  in the
                  same manner and to the same extent the Company would be required
                  to
                  perform if no such succession had taken place. This Agreement will
                  be
                  binding upon and inure to the benefit of the Company and any successor
                  to
                  the Company, including without limitation any persons acquiring
                  directly
                  or indirectly all or substantially all of the business or assets
                  of the
                  Company whether by purchase, merger, consolidation, reorganization
                  or
                  otherwise (and such successor shall thereafter be deemed the “Company” for
                  the purposes of this Agreement), but will not otherwise be assignable,
                  transferable or delegable by the Company, except that the Company
                  may
                  assign and transfer this Agreement and delegate its duties thereunder
                  to a
                  wholly owned Subsidiary; provided that following any such assignment
                  the
                  Company shall remain fully liable with respect to all of its obligations
                  under this Agreement.

              


      

       

      
        
          
          

        

        
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                (b)

              	
                This
                  Agreement will inure to the benefit of and be enforceable by the
                  Executive’s personal or legal representatives, executors, administrators,
                  successors, heirs, distributees and
                  legatees.

              


      

       

      
        	
                 

              	
                (c)

              	
                This
                  Agreement is personal in nature and neither of the parties hereto
                  shall,
                  without the consent of the other, assign, transfer or delegate
                  this
                  Agreement or any rights or obligations hereunder except as expressly
                  provided in Sections 16(a) and 16(b). Without limiting the generality
                  or
                  effect of the foregoing, the Executive’s right to receive payments
                  hereunder will not be assignable, transferable or delegable, whether
                  by
                  pledge, creation of a security interest, or otherwise, other than
                  by a
                  transfer by the Executive’s will or by the laws of descent and
                  distribution and, in the event of any attempted assignment or transfer
                  contrary to this Section 16(c), the Company shall have no liability
                  to pay
                  any amount so attempted to be assigned, transferred or
                  delegated.

              


      

       

      17.          Notices.

       

      All
        communications, including without limitation notices, consents, requests
        or
        approvals, required or permitted to be given hereunder will be in writing
        and
        will be duly given when hand delivered or dispatched by electronic facsimile
        transmission (with receipt thereof confirmed), or five (5) business days
        after
        having been mailed by United States registered or certified mail, return
        receipt
        requested, postage prepaid, or three (3) business days after having been
        sent by
        a nationally recognized overnight courier service such as Federal Express
        or
        UPS, addressed to the Company (to the attention of the General Counsel of
        the
        Company) at its principal executive offices and to the Executive at his
        principal residence, or to such other address as any party may have furnished
        to
        the other in writing and in accordance herewith, except that notices of changes
        of address shall be effective only upon receipt.

       

      18.          Governing
        Law and Choice of Forum.

       

      
        	
                 

              	
                (a)

              	
                This
                  Agreement will be construed and enforced according to the laws
                  of the
                  Commonwealth of Kentucky, without giving effect to the conflict
                  of laws
                  principles thereof.

              


      

       

      
        	
                 

              	
                (b)

              	
                To
                  the extent not otherwise provided for by Section 13 of this Agreement,
                  the
                  Executive and the Company consent to the jurisdiction of all state
                  and
                  federal courts located in Boone County, Kentucky, as well as to
                  the
                  jurisdiction of all courts of which an appeal may be taken from
                  such
                  courts, for the purpose of any suit, action, or other proceeding
                  arising
                  out of, or in connection with, this Agreement or that otherwise
                  arises out
                  of the employment relationship. Each party hereby expressly waives
                  any and
                  all rights to bring any suit, action, or other proceeding in or
                  before any
                  court or tribunal other than the courts described above and covenants
                  that
                  it shall not seek in any manner to resolve any dispute other than
                  as set
                  forth in this paragraph and Section 13 of this Agreement. Further,
                  the
                  Executive and the Company hereby expressly waive any and all objections
                  either may have to venue, including, without limitation, the inconvenience
                  of such forum, in any of such courts. In addition, each of the
                  parties
                  consents to the service of process by personal service or any manner
                  in
                  which notices may be delivered hereunder in accordance with this
                  Agreement.

              


      

       

      
        
          
          

        

        
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      19.          Validity/Severability.

       

       If
        any provision of this Agreement or the application of any provision is held
        invalid, unenforceable or otherwise illegal, the remainder of this Agreement
        and
        the application of such provision will not be affected, and the provision
        so
        held to be invalid, unenforceable or otherwise illegal will be reformed to
        the
        extent (and only to the extent) necessary to make it enforceable, valid or
        legal. To the extent any provisions held to be invalid, unenforceable or
        otherwise illegal cannot be reformed, such provisions are to be stricken
        herefrom and the remainder of this Agreement will be binding on the parties
        and
        their successors and assigns as if such invalid or illegal provisions were
        never
        included in this Agreement from the first instance.

       

      20.          Survival
        of Provisions.

       

      Notwithstanding
        any other provision of this Agreement, the parties’ respective rights and
        obligations under Sections 8, 9, 10, 11, 12, 13, 17, 18, 20, and 21 will
        survive
        any termination or expiration of this Agreement or the termination of the
        Executive’s employment with the Company.

       

      21.          Liability
        Insurance.

       

      The
        Company shall cover the Executive under directors and officers liability
        insurance both during and, while potential liability exists, after the term
        of
        this Agreement in the same amount and to the same extent as the Company covers
        its other officers and directors.  The Company shall provide a
        certificate of insurance confirming this coverage promptly upon receipt of
        a
        request for same from Executive.

       

      22.          Public
        Announcements.

       

      The
        Company shall give the Executive a reasonable opportunity to review and comment
        in advance on any public announcement (including any filing with a governmental
        agency or stock exchange) relating to this Agreement or the Executive’s
        employment by the Company.

       

      
        
          
          

        

        
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      23.          Compliance
        with Code Section 409A.

       

      This
        Agreement is intended to comply with the requirements of Code Section 409A
        and
        the regulations and guidance issued thereunder and shall be interpreted and
        administered in a manner consistent with that intent.  Any provision
        of this Agreement to the contrary notwithstanding, if Executive is a “specified
        employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the
        date of his separation from service with the Company, no distribution that
        is
        subject to and not otherwise exempt from Code Section 409A shall be made
        or
        commence under this Agreement sooner than six months from the date of
        Executive’s separation from service (or, if earlier, the date of the Executive’s
        death).  In such case, any payments that were otherwise required to be
        made within such six-month period shall be accumulated and paid in a single
        lump
        sum on the first day of the month immediately following the end of such
        six-month period.

      


       

      The
        remainder of this page is intentionally blank.

      


      Signature
        page to follow.

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the day and
        year
        first above written.

      
 

      
        	 	
                POMEROY
                  IT SOLUTIONS, INC.

              
	 	 	 
	 	 	 
	 	
                By:  /s/    Kevin
                  G. Gregory

              	 
	 	 	 
	 	 	 
	 	
                Kevin
                  Gregory

              	
                 

              
	 	
                Its: 
                  Chief
                  Executive Officer

              	
              
	 	 	 
	 	 	 
	 	
                /s/  Keith
                  R. Coogan

              	 
	 	 	 


      

       

       

      
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