EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is
entered into effective as of October 16, 2010 by and between Xxxxxxx Xxxxxx
(“Employee”)
and Conversion Services International, Inc. (the “Company”).
WHEREAS, the Company is engaged in the
business of data warehousing 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 Vice President and Chief Financial Officer of the
Company. The Employee shall report directly to the Chief Executive
Officer of the Company. Employee further agrees to perform the job
duties and to carry out the responsibilities of that position, and such other
duties and responsibilities traditionally associated with such position, as
determined by the Board of Directors of the Company from time to
time.
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. Employee shall perform his duties principally at the
offices of the Company in East Hanover, New Jersey.
3. Salary.
(a) The
Company shall pay Employee (i) base compensation (the “Salary”) for services
rendered in the amount of Two Hundred Twenty Five Thousand Dollars ($225,000)
per annum payable on a semi-monthly basis (which base compensation may be
increased but not decreased by the Board of Directors of the Company, in its
sole discretion), and (ii) annual bonus, if any, as may be determined by the
Board of Directors of the Company, in its sole discretion.
(b) Employee
will be entitled to participate in any bonus plan, incentive compensation
program or incentive stock option plan or other employee benefits of the Company
and which are available to the five highest paid executives of the Company, on
the same terms and at the same level of participation as the five highest paid
executives 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 the Company. 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 year, and if unused due
to the requirements of the Company’s business may be carried forward into
subsequent years.
(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 or
any committee thereof.
(d) The
Company agrees to include Employee in the group medical and hospital plan of the
Company and provide group life insurance for Employee at no charge to Employee
in the amount of the Salary during this Agreement. 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 the Company for
the benefit of its officers and/or regular employees.
(f) The
Company will provide to Employee an automobile allowance in the amount of $400
per month which will be paid once per month in the regular semi-monthly payroll
cycle. Employee will be responsible for payment of all payroll taxes associated
with this benefit.
(g) Employee
shall be entitled to reimbursement for all reasonable expenses, including travel
and entertainment, 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 cease and terminate effective upon the close of business on October 15,
2012 (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.
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(a) Death
or Disability. This Agreement shall automatically terminate upon the
death or disability of Employee and all his rights hereunder, including the
rights to receive compensation and benefits, except as otherwise required by
law.
(b) Termination
with Notice by Either Party. The Company or Employee may terminate
this Agreement for any reason or no reason upon thirty (30) days prior written
notice to the other. In case of termination by the Company, with the
exception of Good Cause (as herein defined), the Company shall pay Employee
severance compensation, 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) for (i) twelve
(12) months if termination occurs during the twelve month period beginning
October 16, 2010 and ending on October 15, 2011, or (ii) six (6) months if
termination occurs during the twelve month period beginning on October 16, 2011
and ending on October 15, 2012.
(c) Termination for Good
Cause. “Good Cause” means any
one or more of the following as determined by the vote of the Company’s Board of
Directors:
(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 (if affirmatively determined by the Board of Directors of the Company)
in the performance of his duties as an employee hereunder;
(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 Base
Salary earned and expenses reimbursable under this Agreement incurred through
the date of Employee’s termination. Employee shall continue to
receive the same health benefits that he was receiving prior to such termination
for (i) twelve (12) months if termination occurs during the twelve month period
beginning October 16, 2010 and ending on October 15, 2011, or (ii) six (6)
months if termination occurs during the twelve month period beginning on October
16, 2011 and ending on October 15, 2012.
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6. Change in Control and Other
Grounds Entitling Employee to Terminate. “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 (the “Incumbant Directors”)
cease for any reason to constitute at least a majority of the Board of Directors
of such company, provided that any individual becoming a director subsequent to
the date hereof whose election was approved by a vote of at least a majority of
the then Incumbant Directors shall be, for the purposes of this
provision, considered as though such individual were an incumbant director; (c)
any consolidation or merger or other business combination of the Company with
any other entity where the stockholders of the Company 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 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 Securites
Exchange Act of 1934, as amended (the “Exchange Act”),
becomes the benefical owner (as defined in Section (13)(d)(3) of the Exchange
Act) directly or indirectly of securites of the Company representing fifty
percent (50%) or more of the total number of votes that may be cast for the
election of the directors of the Company; or (e) the Board of Directors of the
Company by vote of a majority of all the directors, adopts a resolution to the
effect that a “Change in Control” has occurred for purposes of this
Agreement.
(a) 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 such
termination without Good Cause occurs following a Change in Control, 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
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, paid in semi-monthly installments based upon the Company’s normal
payroll cycle for employees over the subsequent (i) twelve (12) months if
termination occurs during the twelve month period beginning October 16, 2010 and
ending on October 15, 2011, or (ii) six (6) months if termination occurs during
the twelve month period beginning on October 16, 2011 and ending on October 15,
2012.
(b) Upon
a Change in Control, 100% of all unvested stock options and/or restricted shares
held by Employee shall immediately vest.
(c) Further,
any of the following shall constitute a termination by the Company without Good
Cause entitling Employee to elect to terminate his employment hereunder and to
receive his severance compensation and other rights and benefits pursuant to
Section 5 as if he were terminated by the Company without Good Cause: (i) the
relocation of Employee by the Company more than 50 miles from East Hanover, New
Jersey; (ii) 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 Employee of
written notice specifying such breach or default; or (iii) if Employee shall no
longer hold the position of Vice President and Chief Financial Officer of the
Company unless there is Good Cause for the removal of Employee from such
position.
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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 therafter, 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 dischage of his
duties thereunder. 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, (d) is required to be disclosed by Employee to any government agency
or person to whom disclosure is required by judicial or administrative process,
(e) was in his possession or known to him prior to the commencement of his
employment by the Company, or (f) is of a general nature pertaining to the
computer services industry.
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.
9. Competition. Employee
will not do any of the following, either directly or indirectly, during
Employee’s employment with the Company and during the period of (i) twelve
months after Employee’s cessation of employment with the Company, anywhere in
the world, if Employee’s termination of employment is effective during the
twelve month period beginning October 16, 2010 and ending on October 15, 2011,
or (ii) six (6) months after Employee’s cessation of employment with the
Company, anywhere in the world, if Employee’s termination of employment is
effective during the twelve month period beginning October 16, 2011 and ending
on October 15, 2012 . In the event that Employee improperly competes
with the Company in violation of this Section, the period during which he
engages in such competition shall not be counted in determining the duration of
the relevant non-compete restriction, based on the timeframe defined
above:
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(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.
(b) Employee
shall not engage in any Competitive Activity; whether as an owner, manager,
consultant, or employee, provided, however, that during
his employment by the Company and during his non-compete period following
departure from the Company, 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, which permission shall be granted unless the Board of Directors
reasonably determines that doing so is likely to have an adverse financial
effect on the Company.
(c) Employee
shall not solicit or perform services in connection with any Competitive
Activity for any prior or current 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.
Employee and
the Company agree that the phrase “Employee’s cessation of employment with the
Company” as used in this Agreement, refers to any separation from his employment
at the Company either voluntarily or involuntarily, either with cause or without
cause, or whether the separation is at the behest of the Company or
Employee. 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.
(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 five highest paid executives of
the Company.
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.
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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.
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.
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 Delaware 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.
[Signature
Page Follows]
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The
undersigned have executed this Agreement as of the date first set forth
above.
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CONVERSION
SERVICES INTERNATIONAL, INC.
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By:
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/s/ Xxxx Xxxxx
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Name:
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Xxxx
Xxxxx
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Title:
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President
and Chief Executive Officer
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/s/ Xxxxxxx Xxxxxx
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Xxxxxxx
Xxxxxx
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