EMPLOYMENT AGREEMENT ("Agreement"), dated as of October 1, 1998,
between The Translation Group, Ltd., a Delaware Corporation with an office at 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, (the "Company"), and Xxxx
Xxxxxxxx ("Employee") residing at 00 Xxxxx Xxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxx
00000.
WHEREAS, the Company is desirous of employing Employee to further the
business purposes of the Company; and
WHEREAS, Employee is desirous of being employed by the Company on the
terms provided herein;
NOW, THEREFORE, the Company and Employee agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Employee on a full
time basis as Chief Operating Officer of the Company; and Employee hereby agrees
to accept such employment and perform the duties of such office and to be under
the direction and control of the Board of Directors of the Company. Employee
shall devote his best efforts to the business of the Company and to promoting
its best interest. The Company may provide Employee with such Employee
perquisites as may be deemed by the Company to be commensurate with Employee's
position with the Company.
2. TERM OF EMPLOYMENT. Subject to the provisions for termination
hereinafter provided, the term of Employee's employment hereunder shall begin on
October 1, 1998, and shall extend until September 30, 2001.
3. COMPENSATION.
(a) The Company shall pay to the Employee a salary at a rate of
$100,000.00 per year, payable in accordance with the normal
payroll practices of the Company. Provided that Employee's salary
will be increased to $145,000.00 in the second year in the event
that the Company receives $5,000,000 cumulative financing during
the first twelve months of this Agreement; and, Employee's salary
will be increased to $175,000.00 in the third year in the event
that the Company receives $5,000,000 cumulative financing and is
listed on NASDAQ or AMEX: The base salary shall be reviewed
annually by the Board of Directors of the Company who may make
recommendations to the Compensation Committee for additional
increases.
(b) Bonus Schedule. In addition to his base salary, Employee shall
be entitled to receive 300,000 stock options of the Company at an
exercise price of $5.00 per share in accordance with the
following provisions:
i. 100,000 vest immediately upon signing this Agreement.
ii. 100,000 vest upon $5,000,000 cumulative financing during the
first twelve months of this Agreement, or upon sale of the
Company, or change of control of the Company.
iii. 100,000 vest upon NASDAQ or AMEX listing, or upon sale of
the Company, or change of control of the Company.
iv. A bonus of 1% of new financing, with a minimum cumulative
financing of $5,000,000 during the first twelve months of
this Agreement.
v. In the stock option grant, the Company, in addition to
normal exercise provisions, will provide for "non-cash
exchange" of option exercise.
(c) All compensation payable to Employee under this Agreement is
stated in a gross amount and will be subject to all applicable
withholding taxes, or other normal payroll deductions, and any
other amounts required by law to be withheld.
4. EXPENSES.
(a) During the term of this Agreement, the Company shall reimburse
Employee for all reasonable Company related travel, entertainment
and other business expenses reasonably necessary and appropriate
for the performance of his duties hereunder, provided that
Employee submits receipts and other expense records to the
Company in accordance with the Company's general reimbursement
policy then in effect for Employee and other employees of the
Company.
(b) During the term of this Agreement, the Company will pay Employee
an annual vehicle allowance of $6,000.00 in equal monthly
payments of $500.00. Employee will be personally responsible for
maintaining detailed business and personal use of vehicle logs of
mileage and expenses, sufficient to satisfy the requirement of
the Internal Revenue Service.
5. EMPLOYEE BENEFIT PLANS
(a) During the term of Employee's employment under this Agreement,
Employee shall be entitled to participate, to the extent he
and/or members of his family are eligible, in all employee
benefit plans in effect for Employees of the Company during the
term of this Agreement. Also, the Company shall purchase on the
life of Employee (I) life insurance in an amount equal to 2 1/2
times his then current annual base salary naming Employee's
designee as beneficiary.
(b) During the term of Employee's employment, Employee shall be
entitled to four weeks paid vacation, as well as paid holidays
given by the Company to its employees. Vacation time cannot be
carried over and accrued to the next year but must be taken in
the year earned, unless the Company determines, in case of
unusual and mitigating circumstances, to permit carryover of
vacation time.
6. TERMINATION
(A) DEATH. Employee's employment hereunder shall terminate upon his
death and all obligations of the Company to the Employee will
cease as of the date of the Employee's death.
(B) DISABILITY. If, as a result of Employee's incapacity due to
physical or mental illness then Employee shall be deemed to be
disabled. Employee's employment hereunder shall terminate upon
his disability and all obligations of the Company to the Employee
expect provisions of the stock options will cease as of the date
of the Employee's disability. Provided that for purposes of this
subsection, "incapacity" shall mean any physical or mental
illness which substantially interferes with Employee's ability to
fulfill his duties under this Agreement.
(C) OTHER REASON. Any other reason other than cause under (d) below
or for reasons under (a) or (b) above.
(D) CAUSE. The Company may terminate Employee's employment hereunder
for Cause. For the purpose of this Agreement, the Company shall
have "Cause" to terminate Employee's employment hereunder upon
(I) Employee's conviction or, plea of "no contest" to, any
felony; (ii) material acts of fraud, dishonesty, misappropriation
of funds or property of the Company for Employee's own use or
embezzlement of any property of the company; or (iii) any
material breach by Employee of any specific provision of this
Agreement.
(E) NOTICE OF TERMINATION. Any termination by the Company pursuant to
subsections (b), (c) or (d) above shall be communicated by
written Notice of Termination to the Employee.
(F) DATE OF TERMINATION. The effective date of termination shall be
the date Notice of Termination is given.
7. COMPENSATION UPON TERMINATION.
(a) If Employee's employment shall be terminated pursuant to
subsection (d) above, he shall receive only his salary to the
Date of Termination.
(b) If Employee is terminated pursuant to subsections (a) or (b)
above, the Employee will be entitled to receive, as severance
compensation, an amount equal to one (1) month of Employee's
annual base salary, bonuses earned as of the date of termination
and one (1) month of benefits.
(c) If Employee is terminated under subsection 6(c) above, the
Employee shall be entitled to receive the greater of either one
year's current pay and benefits or the remaining term of the
Agreement. The termination salary amount will be paid as a lump
sum at termination. Employee will retain vested stock options.
8. RESULTS OF THE EMPLOYEE'S SERVICES. The Company will be entitled to and
will own all the results and proceeds of the Employee's services under
this Agreement, including, without limitation, all rights throughout the
world to any copyright, patent, trademark or other right and to all
ideas, inventions, products, programs, procedures, formats, and other
materials of any kind created or developed or worked on by the Employee
during his employment by the Company.
9. CONFIDENTIALITY. Employee hereby acknowledges that certain information
and materials relating to the Company, its product and the various
phases of their operations including, without limitation, trade secrets,
formulas, know-how, specifications, drawings, consumer, distributorship
and supplier lists, books, manuals and other data (collectively,
"Confidential Materials"), heretofore or hereafter obtained by or
entrusted to him in the course of his association with the Company
(whether prior to or after the date hereof), is or will be of a
confidential or proprietary nature, which (a) may become the public
domain or (b) through no fault of the Employee becomes in the public
domain or is generally known. Employee shall, at all times, both during
and after the term of this Agreement, hold all of the Confidential
Materials in strictest confidence and not use for his own benefit or of
the benefit of any other person or directly or indirectly disclose or
suffer the disclosure of any of the Confidential Materials to any
person, firm, corporation, association or other entity to whom any
Confidential Materials have been disclosed or are threatened to be
disclosed by Employee, directly or indirectly, (other than in the
ordinary course of business of the Company), without the Company's prior
written consent. Upon the termination of Employee's employment, Employee
shall return all Confidential Materials to the Company.
10. NON-SOLICITATION. During this Agreement and for a period of one (1)
year following the conclusion of this Agreement (the "Limited Period"),
Employee shall not, directly or indirectly, hire, solicit, or encourage
to leave the employ of the Company or any affiliate entity, any person
employed by the company or any affiliated entity.
11. ENFORCEMENT OF CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION
AGREEMENTS. Employee hereby acknowledges that the Company will not have
an adequate remedy at law in the event of any breach by him or any
provision of Section 9 or 10 of this Agreement and that the Company will
suffer irreparable damage and injury as a result of any such breach.
Accordingly, in the event of Employee's breach or threatened breach of
any provision of Section 9 or 10 of this Agreement, Employee hereby
consents to the granting of a temporary restraining order, a preliminary
injunction and/or permanent injunction against him or any court of
competent jurisdiction prohibiting him from committing or continuing any
such breach or threatened breach, but no action for any such relief
shall be deemed to waive the right of the Company to an action for
damages.
12. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be
deemed to have been duly given when delivered, if personally delivered,
or three (3) days after being mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
IF, TO EMPLOYEE:
Xxxx Xxxxxxxx
00 Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
IF, TO THE COMPANY:
Board of Directors
The Translation Group, Ltd.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
WITH A COPY TO
Xxxxxxx X. Xxxxxx, Esquire
00 X. Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
or to such other address as a party may have furnished to the
other in writing in accordance herewith, except that notices
or change of address shall be effective only upon receipt.
13. EXPENSES OF LITIGATION; ARBITRATION. The Company and Employee each
hereby agree that in connection with any litigation or arbitration
arising under this Agreement that proceeds to judgment or an award, the
losing party of any claim arising thereunder shall pay to the prevailing
party all of its costs and expenses incurred in connection with the
prosecution or defense of such claim including, but not limited to, any
and all reasonable attorneys' fees.
14. ARBITRATION. Any and all controversies, claims or disputes arising out
of or relating to this Agreement, or the breach thereof (other than as
covered in Section 11), shall be solely and exclusively settled by
arbitration in accordance with the Commercial Arbitration Rules then in
effect (the "Arbitration Rules") of the American Arbitration Association
("AAA"). The arbitration shall take place in Haddonfield, New Jersey,
and the arbitrator shall be appointed by the mutual consent of the
parties. The arbitrator appointed by the parties or such panel, as the
case may be, is sometimes referred to herein as the "Arbitrator". Each
party hereby irrevocably consents to the sole and exclusive jurisdiction
and venue of the state and Federal courts located in the State of New
Jersey in connection with any matter arising out of the foregoing
arbitration or this Agreement, including but not limited to confirmation
of the award rendered by the Arbitrator and enforcement thereof by entry
of judgment thereon or by any other legal remedy. Service of process in
connection with any such arbitration or any proceeding to enforce an
arbitration award may be made in the manner set forth in Section 12 of
this Agreement or in any other manner permitted by applicable law.
15. .MISCELLANEOUS.
(a) This Agreement sets forth the entire understanding between the
parties as to the subject matter hereof and superseded all prior
agreements, arrangements and understandings, written or oral,
between them as to such subject matter. There have been no
promises, statements, representations or other inducements to
this Agreement other than as set forth herein.
(b) This Agreement may not be amended, nor may any provision be
modified or waived, except by an instrument duly executed by both
parties.
(c) Either party's failure at any time to require performance of any
of the terms, provisions or conditions hereof shall not affect
such party's right thereafter to enforce this Agreement or be
deemed a waiver of any succeeding breach.
(d) Paragraph headings contained in this Agreement have been inserted
for convenience or reference only, are not to be considered a
part of this Agreement and shall not affect the interpretation of
any provision hereof.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey applicable to contracts
made and to be wholly performed within said State.
(f) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns, including without
limitation, any corporation which may acquire all or
substantially all of the Company's assets and business or with or
into which the Company may be consolidated or merged. This
Agreement calls for the provision of personal services and,
accordingly, shall not be assignable by Employee except with
respect to (stock options). However, the restrictions of Section
9 shall be binding upon Employee's heirs, executors,
administrators and legal representatives.
(g) If any provision of this Agreement or the application of any
provision to this Agreement is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be effected except to the
extent necessary to delete such illegal, invalid or unenforceable
provision, unless such declaration shall substantially impair the
benefit of the remaining portions of this Agreement. IN WITNESS
WHEREOF, THIS Agreement has been executed by the Company and
Employee as of the date first written above.
THE TRANSLATION GROUP, LTD.
BY:______________________________(S)
Xxxxxxx X. Xxxxxx
President and CEO
BY:______________________________(S)
Xxxx Xxxxxxxx, Employee
