EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into effective as
of July 22, 2005 (the "Effective Date") by and between Xxxxxxx XxXxxxxx,
residing at [address] ("Employee"), and Conversion Services International, Inc.,
a Delaware corporation, with offices at 000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxx
Xxxxxx 00000 (the "Company").
WITNESSETH:
WHEREAS, the Company is engaged in the business of data warehousing, data
management, and business intelligence consulting; and
WHEREAS, the Company and Employee are willing to commence an employment
relationship, on the terms, conditions and covenants set forth in this
Agreement;
NOW, THEREFORE, in consideration of Employee's commencement of employment
with the Company, the mutual covenants contained herein and other good and
valuable consideration, the receipt of which the Company and Employee hereby
acknowledge, Employee and the Company agree, as follows:
1. Position. Employee agrees to employment with the Company, and the
Company hereby employs Employee, in the position of Senior Vice President - Data
Warehousing of the Company. Employee further agrees to perform the job duties
and to carry out the responsibilities of that position, as such duties and
responsibilities are set forth on Exhibit "A" attached hereto and made a part
hereof for all purposes, as well as such other duties and responsibilities
mutually agreed to, by Employee and Company. Company may not significanly change
Employee's position, title or duties/responsibilties without his approval.
2. Employee's Effort. Employee shall perform his duties in the capacity as
an employee and in such capacity shall spend his full working time and best
efforts, skill and attention to his position and to the business and interests
of the Company.
3. Salary and Benefits.
(a) The Company (i) shall provide Employee with base compensation
(the "Salary") for services rendered in the amount of Two Hundred Twenty Five
Thousand Dollars ($250,000) per annum payable on a semi-monthly basis (which
base compensation may be increased by the Board of Directors of the Company, or
a committee thereof, in its sole discretion), (ii) shall provide Employee with
an annual bonus, if any, as may be determined by the Board of Directors of the
Company, or a committee thereof, in its sole discretion.
(b) On each year's anniversary of this Agreement during the Initial
Term (i.e., on July 21, 2006, 2007 and 2008), Employee may earn an additional
sum up to $75,000 if the revenue influenced by Employee on behalf of the Company
(from any clients and customers, and not just clients and customers of the
former MAI) during that 12 month period equals at least the previous 12 month
period's revenue. If this threshhold is not met, the Company nevertheless agrees
to pay Employee a proportionate amount of the $75,000 amount.
(c)The Employee will be entitled to participate in any bonus plan,
incentive compensation program, or other employee benefit of the Company, such
opportunity being equitable with others at the Senior Vice President title.
Amount of bonus and incentive compensation will be determined by the Board of
Directors of the Company or a committee thereof, in its sole discretion, beyond
equitable levels of Senior Vice Presidents of the Company. Further, Employee
will be entitled to receive full employee benefits according to the regular
policies and procedures of the Company.
4. Benefits.
(a) Employee will be entitled to at least nine (9) paid holidays and
two (2) personal days each calendar year. The Company will notify Employee on or
about the beginning of each calendar year with respect to the holiday schedule
for the coming year. Personal holidays, if any, will be scheduled in advance
subject to requirements of Company and will not be unreasonably withheld. Such
holidays must be taken during the calendar year and cannot be carried forward
into the next year.
(b) Employee shall be entitled to twenty (20) paid vacation days
each calendar year of employment, and if unused it may be carried forward into
subsequent years up to a maximum of five (5) days. It is expected that vacation
days will be selected and utilized by Employee in his discretion without
necessity of prior, Company approval.
(c) Employee shall be entitled to sick leave and emergency leave
according to the regular policies and procedures of the Company. Additional sick
leave or emergency leave over and above paid leave provided by the Company, if
any, shall be unpaid and shall be granted at the discretion of the Board of
Directors of the Company.
(d) The Company agrees to include and keep, during this Agreement,
Employee in the group medical, dental, and hospital plan of the Company and
provide group life insurance for Employee, all of the foregoing in accordance
with standard Company policy to Employee. Employee shall be responsible for
payment of any federal or state income tax imposed upon these benefits.
(e) Employee shall be entitled to participate in any pension or
profit sharing plan, incentive stock option plan or any other type of plan
adopted by Company for the benefit of its officers and/or regular employees at a
level similar to other Senior Vice Presidents of the Company.
(f) The Company will provide to Employee the use of an automobile of
Employee's choice at a monthly lease or loan payment price including insurance
not to exceed One thousand one hundred fifteen Dollars ($1,115.00). The Company
will pay all additional automobile operating expenses incurred by Employee in
the performance of Employee's company duties, including, but not limited to,
fuel costs.
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(g) Employee shall be entitled to reimbursement for all reasonable
expenses, including travel, entertainment, broadband, and cell phone expense
incurred by Employee in the performance of Employee's duties. Employee will
maintain records and written receipt as required by the Company policy and
reasonably requested by the Board of Directors of the Company to substantiate
such expenses.
5. Term; Termination. This Agreement and the status and obligations of
Employee thereunder as an employee of the Company (except as provided for below)
shall extend for an Initial Term (herein so called) of three (3) years from the
Effective Date, such Initial Term to cease and terminate effective upon the
close of business on July 21, 2008 (the "Expiration Date") unless earlier
terminated pursuant to this Section 5 or further extended by the parties hereto
in writing in a separate instrument; provided, however, that upon such date said
termination shall not affect any rights that may have been specifically granted
to Employee by the Board of Directors of the Company or a designated committee
thereof pursuant to any of the Company's retirement plans, supplementary
retirement plans, profit sharing and savings plans, healthcare, 401(k) or any
other employee benefit plans sponsored by the Company, it being understood that
no such rights are granted hereunder. In addition, notwithstanding the expiry or
termination of this Agreement pursuant to this Section 5 or otherwise,
Employee's rights and obligations under Sections 7 through 12 inclusive of this
Agreement shall survive such termination or expiration of this Agreement in
accordance with the terms of such Sections.
(a) Termination with Notice by Either Party. After the expiration of
the Initial Term, either party may terminate this Agreement for any reason or no
reason upon fifteen (15) days prior written notice. At any time during the
Initial Term, or during any extended term, Company may terminate Employee for
Good Cause, subject to the applicable cure periods set forth below. In case of
termination of Employee, Company agrees to pay Employee for compensation earned
thru the termination date. If Employee is terminated without Good Cause , the
Company shall pay Employee severance compensation the greater of (i) the
remainder of Employee's compensation during the Initial Term, calculated at the
rate of Salary in effect as of the date immediately preceding the date of
termination and the cost of premiums for any Company sponsored insurance policy
(or the cash equivalent), or (ii) his Salary plus cost of premiums for any
Company sponsored insurance policy (or cash equivalent) for twelve (12) months.
(b) Termination for Good Cause. "Good Cause" means any one or more
of the following:
(1) a continuing material breach or continuing material
default by Employee of the material terms of this Agreement (except any such
breach or default which is caused by the physical disability or death of
Employee) which remains uncured after twenty (20) days following Employee's
receipt from the Company of written notice specifying such breach or default;
(2) gross negligence or willful misfeasance by Employee or the
breach of fiduciary duty by Employee in the performance of his duties as an
employee hereunder, which remains uncured after ten (10) days following
Employee's receipt from the Company of written notice specifying such action or
omission;
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(3) the commission by Employee of an act of fraud,
embezzlement or any other crime in connection with Employee's duties; or
(4) conviction of Employee of a felony or any other crime that
would materially interfere with the performance of Employee's duties hereunder.
In the event of a termination for Good Cause, the Company will pay
Employee the Salary earned and expenses reimbursable under this Agreement
incurred through the date of Employee's termination.
6. Change in Control and Other Grounds Entitling Employee to Terminate.
(a) "Change in Control" shall mean (a) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions) of all or
substantially all of the assets of the Company; (b) individuals who, as of the
date hereof, consitute the entire Board of Directors of the Company, as
applicable (the "Incumbent Directors," as applicable) cease for any reason to
constitute at least a majority of the Board of Directors of the Company, as
applicable, provided that any individual becoming a director subsequent to the
date hereof whose election was approved by a vote of all of the then Incumbent
Directors shall be, for the purposes of this provision, considered as though
such individual were an Incumbent Director, as the case may be; (c) any
consolidation or merger or other business combination of the Company with any
other entity where the stockholders of the Company, as applicable, immediately
prior to the consolidation or merger or other business combination would not,
immediately after the consolidation or merger or other business combination,
beneficially own, directly or indirectly, shares representing more than fifty
percent (50%) of the combined voting power of all of the outstanding securities
of the entity issuing cash or securities in the consolidation or merger or other
business combination (or its ultimate parent corporation, if any); (d) a third
person, including a person defined in Section (13)(d)(3) of the Exchange Act,
becomes the benefical owner (as defined in Section (13)(d)(3) of the Exchange
Act) directly or indirectly of shares of the Company representing fifty percent
(50%) or more of the total number of votes that may be cast for the election of
the Board of Directors of the Company; or (e) the Board of Directors of the
Company adopts a resolution to the effect that a "Change In Control" has
occurred for purposes of this Agreement.
(b) Further, a Change in Control in the Company resulting in a
material adverse change in duties, responsibilities or role, or reporting
relationships of Employee will be treated as a termination by the Company
without Good Cause if Employee so elects to treat such as a termination. If such
termination without Good Cause occurs following a Change in Control, the
Employee will be entitled to elect to terminate his employment hereunder and to
receive his severance compensation and other rights and benefits pursuant to
Section 5(a) as if he were terminated by the Company without Good Cause and
expenses reimbursable under this Agreement incurred through the date of
Employee's termination, in one lump sum.
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(c) Upon a Change in Control and/or a termination of Employee
without Good Cause, 100% of all unvested stock options and/or restricted shares
held by Employee shall immediately vest with all restrictions being immediately
released, Company will apply best efforts to register all remaining shares with
the Securities and Exchange Commission thus resulting in the shares becoming
free and tradable.
(d) Further, any of the following shall constitute a termination by
the Company without Good Cause, if Employee elects to treat such as a
termination, entitling Employee to elect to terminate his employment hereunder
and to receive his severance compensation and other rights and benefits pursuant
to Section 5(a) as if he were terminated by the Company without Good Cause: (i)
there shall be a continuing material breach or continuing material default by
the Company of the material terms of this Agreement which remains uncured after
twenty (20) days following the Company's receipt from the Employee of written
notice specifying such breach or default; or (ii) if Employee shall no longer
hold the position of Senior Vice President - Data Warehousing of the Company
unless there is Good Cause for the removal of Employee from such position.
7. Confidentiality. Employee shall keep confidential, except as the
Company may otherwise consent in writing, and not disclose or make any use of
except for the benefit of the Company, at any time either during the term of
this Agreement or thereafter, any trade secrets, knowledge, data or other
information of the Company relating to the products, processes, know how,
technical data, designs, formulas, test data, customer lists, business plans,
marketing plans and strategies, and product pricing strategies or other subject
matter pertaining to any business of the Company or any of its clients,
customers, consultants, licensees or affiliates which Employee may produce,
obtain or otherwise learn of during the course of Employee's performance of
services (collectively "Confidential Information"). Employee shall not deliver,
reproduce, or in any way allow any such Confidential Information to be delivered
to or used by any third parties without the specific direction or consent of a
duly authorized representative of the Company, except in connection with the
discharge of his duties hereunder. The terms of this paragraph shall survive
termination of this Agreement. Notwithstanding anything to the contrary herein,
Employee shall not have any obligation to keep confidential any information (and
the term "Confidential Information" shall not be deemed to include any
information) that (a) is generally available to the public through no fault or
wrongful act of Employee in breach of the terms hereof, (b) is disseminated by
the Company or any of its affiliates publicly without requiring confidentiality,
(c) is required by law or regulation to be disclosed by Employee, or (d) is
required to be disclosed by Employee to any government agency or person to whom
disclosure is required by judicial or administrative process.
8. Return of Confidential Material. Upon the completion or other
termination of Employee's services for the Company, Employee shall promptly
surrender and deliver to the Company all records, materials, equipment,
drawings, documents, notes and books and data of any nature pertaining to any
invention, trade secret or Confidential Information of the Company or to
Employee's services, and Employee will not take with him any description
containing or pertaining to any Confidential Information, knowledge or data of
the Company which Employee may produce or obtain during the course of his
services. The terms of this paragraph shall survive termination of this
Agreement.
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9. Competition.
Employee shall not own, manage, operate, control, consult for, be an
officer or director of, work for, or be employed in any capacity by any company
or any other business, entity, agency or organization which engages in
Competitive Activity during his employment by the Company. However, employee may
serve as a director or consultant of an entity that is either a Company
licensee, or, for non-licensees, in such capacity as the Board of Directors of
the Company has granted him written permission.
Employee will not do any of the following, either directly or indirectly,
during Employee's employment with the Company and during the period of two (2)
year after Employee's cessation of employment with the Company, anywhere in the
United States. Notwithstanding the foregoing, Employee shall not be bound by any
of the provisions of this Section 9 if he terminates this Agreement as provided
by Section 6(c) or 6(d) herein. In the event that Employee improperly competes
with the Company and/or CSI in violation of this Section, the period during
which he engages in such competition shall not be counted in determining the
duration of the two (2) year non-compete restriction:
(a) For purposes of this Agreement, "Competitive Activity" shall
mean any activity relating to, in respect of or in connection
with, directly or indirectly, the data warehousing and
business intelligence consulting business of existing, active
Company clients or customers on the date of termination.
(b) Employee shall not solicit or perform services in connection
with any Competitive Activity for any current clients or
customers of the Company; or
(d) Employee shall not solicit for employment or employ any then
current employees employed by the Company without the
Company's consent.
Nothing in this Agreement shall preclude Employee from
employment at a not-for-profit or governmental institution, provided that no
for-profit business involved data warehousing and business intelligence
consulting, directly or indirectly, derives a benefit from Employee's
employment.
10. Other Obligations.
(a) Employee acknowledges that the Company from time to time may
have agreements with other persons, which impose obligations or restrictions on
the Company made during the course of work thereunder or regarding the
confidential nature of such work. Employee will be bound by all such obligations
and restrictions and will take all action necessary to discharge the obligations
of the Company thereunder, to the extent Employee is fully informed of such
obligations and restrictions ahead of time and such obligations and restrictions
are reasonable.
(b) All of Employee's obligations under this Agreement shall be
subject to any applicable agreements with, and policies issued by the Company to
which Employee is subject that are generally applicable to the executives of the
Company.
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(c) Employee will have reasonable autonomy to develop the Southwest
business for CSI and travel will not exceed 50%.
11. Trade Secrets of Others. Employee represents that his performance of
all the terms of this Agreement as employee to the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge or
data acquired by Employee in confidence or in trust, and Employee will not
disclose to the Company, or allow the Company to use, any confidential or
proprietary information or material belonging to any other person or entity.
Employee will not enter into any agreement, either written or oral, which is in
conflict with this Agreement.
12. Injunctive Relief. Employee acknowledges that any breach or attempted
breach by Employee of paragraphs 7 through 12 of this Agreement shall cause the
Company irreparable harm for which any adequate monetary remedy does not exist.
Accordingly, in the event of any such breach or threatened breach, the Company
shall be entitled to obtain injunctive relief, without the necessity of posting
a bond or other surety, restraining such breach or threatened breach.
Notwithstanding the foregoing, Employee shall not be liable for special damages
of any kind, including punitive damages, consequential damages or lost profits.
13. Modification. This Agreement may not be changed, modified, released,
discharged, abandoned or otherwise amended, in whole or in part, except by an
instrument in writing, signed by Employee and by the Company. Any subsequent
change or changes in Employee's relationship with the Company or Employee's
compensation shall not affect the validity or scope of this Agreement.
14. Entire Agreement. Employee acknowledges receipt of this Agreement, and
agrees that with respect to the subject matter thereof, it is Employee's entire
agreement with the Company, superseding any previous oral or written
communications, representations, understandings with the Company or any office
or representative thereof. Each party to the Agreement acknowledges that, in
executing this Agreement, such party has had the opportunity to seek the advice
of independent legal counsel, and has read and understood all of the terms and
provisions of the Agreement.
15. Severability. In the event that any paragraph or provision of this
Agreement shall be held to be illegal or unenforceable, the entire Agreement
shall not fall on account thereof, but shall otherwise remain in full force and
effect, and such paragraph or provision shall be enforced to the maximum extent
permissible.
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16. Successors and Assigns. This Agreement shall be binding upon
Employee's heirs, executors, administrators or other legal representatives and
is for the benefit of the Company, its successors and assigns.
17. Governing Law. This Agreement shall be governed by the laws of the
State of New Jersey except for any conflicts of law rules thereof that might
direct the application of the substantive law of another state.
18. Counterparts. This Agreement may be signed in counterparts and by
facsimile transmission, each of which shall be deemed an original and both of
which shall together constitute one agreement.
19. No Waiver. No waiver by either party hereto of any breach of this
Agreement by the other party hereto shall constitute a waiver of any subsequent
breach.
20. Notice. Any notice hereby required or permitted to be given shall be
sufficiently given if in writing and upon mailing by registered or certified
mail, postage prepaid, to either party at the address of such party or such
other address as shall have been designated by written notice by such party to
the other party.
The undersigned have executed this Agreement as of the date first forth
above.
CONVERSION SERVICES INTERNATIONAL, INC.
By:/s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title Executive Vice President and
Chief Operating Officer
/s/ Xxxxxxx XxXxxxxx
----------------------------------------
XXXXXXX XXXXXXXX
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
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