EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is
entered into effective as of May 1st , 2009
by and between Xxxxx Xxxxxxx (“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 continue an employment relationship, on the terms, conditions and
covenants set forth in this Agreement;
NOW, THEREFORE, in consideration of
Employee’s continued 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.
Role. Employee agrees to employment with the Company, and the
Company hereby employs Employee, in the position of Executive Vice
President / Chief Operating 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 CEO of the Company from time to time.
It is also understood that during the term of this agreement that Employee
reports to President and CEO of the company.
(a) Additional Duties - Employee’s will
also function as a senior business development officer of the company, which
involves finding new leads and opportunities for the company and cultivating
those relationships with customers, partners, and prospects for the
company.
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:
(a) The
Company shall pay Employee (i) base compensation (the "Salary") for
services rendered in the amount of Two Hundred Seventy Five Thousand Dollars
($275,000) per annum payable on a semi-monthly basis.
(b) The
Employee will receive an incentive as follows:
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1.
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When
Employee is billed out to a CSI client, then Employee will receive an
additional incentive payment equal to 10 % of his hourly billable rate
billed to that client. This payment will be included in the Gross Profit
calculation.
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2.
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Employee
shall receive 1.5 % of the gross revenue of any new business, leads,
opportunities brought in to CSI by Employee generated by business partner
SAP, or any sales cycles supported by Employee, which result in
new recognized revenue. These revenue opportunities will
require CEO approval before they will be eligible for
payment.
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3.
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Employee
shall receive 2.5% of net income of the Company for the period beginning
on May 1st
2009 ending December 31st
2009 provided that net income is greater than $ 133,000
dollars. For the purpose of calculating net income for the incentive
payment in this Section 3(b)(3), depreciation expense included in the
Employee’s net income shall be added back. Payment of this incentive will
be by March 31st
2010 at the discretion of the CFO. Net income is calculated
using GAAP and certified by the CFO of the Company. Thereafter,
this incentive payment will be based on the annual net income of the
Company and paid if net income is in excess of $200,000 and payable at the
CFO’s discretion on March 31 of such successive year. If the
contract is not renewed, then payment will be based on net income from
January 1, 2010 thru termination, assuming it exceeds an average of $
16,667 per month for the duration of the employment period,
payable at the CFO’s descretion upon non renewal or contract
termination.
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Incentives
other than those in subsection (b) above will be calculated monthly and paid
when CSI receives payment from the client/customer, the payment of the incentive
will be in the normal month-end payroll cycle in the month
received payment from the client. If the client does not pay the
invoice within 90 days of billing, then the commission for that invoice will
deducted from the current month-end salary and incentive payment.
Any
disputes in the interpretation of the above incentive plan shall be adjudicated
by the compensation committee of the Board of Directors of the company, whose
decision is final
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4.
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Benefits.
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(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 days, if any, will be scheduled in advance
subject to requirements of the Company. Such personal days must be
taken during the calendar year and cannot be carried forward into the next
year.
(b)
Employee shall be
entitled to twenty five (25) paid vacation days each year.
(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.
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(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
reimburse car payments up to $1,200.00 dollars per month for
one car that is used for Company business. In addition all actual expenses
for insurance, gas, oil, tolls, parking, car maintenance and any lease mileage
overage will be reimbursed with proper documentation presented to the CFO. The
Employee shall be responsible for payment of any federal or state income tax
imposed upon these benefits, if any. The Employee must pay all invoices
directly and submit an expense report in order to be reimbursed for these
expenses.
(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 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 April 31, 2010
(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 by its terms that continue after such termination, 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)
Death or
Disability. This Agreement shall automatically termiante 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.
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(b) Termination
with Notice by Either Party. The Company or Employee may terminate
this Agreement for any reason or no reason upon sixty (30) days prior written
notice to the other. The Company shall pay Employee a lump sum of
$35,000 at the date of termination.
(c)
At the date of termination, the
employee’s incentive plan shall terminate including all vested rights in such
plan as described in Section 3 (b). Payments due under such plan, if any due up
until the date of termination, shall be paid within 30 days from date of
termination.
6.
Ommitted
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, 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, computers,
data files, 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. (a)
Non-Solicitation of
Customers. During employee’s employment and for a period of one (1)
year following the date of any voluntary or involuntary termination of
Employee’s employment for any reason by either Employee or Employer, Employee
agrees not to , directly or indirectly, contact, solicit, divert, appropriate or
call upon with the intent of doing business with the customers or clients of
Employer with whom Employee has had material contact during the final year
of Employee’s employment with Employer if the purpose of such activity is either
(1) solicit these customers or clients or (2) to otherwise encourage any such
customer or client to discontinue , reduce, or adversely alter the amount of its
business with Employer.
b) Non-Piracy of Employees and
Independent Contractors. During Employee’s employment and for a period of
one (1) year following the date of any voluntary or involuntary termination of
Employee’s employment for any reason by either Employee or Employer, Employee
covenants and agrees that Employee shall not, directly or indirectly,
solicit, recruit, or hire or oth erwise assist anyone in soliciting, recruiting,
or hiring, any employee or independent contractor of Employer who performed work
for Employer within the final year of Employee’s employment with
Employer.
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.
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.
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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 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.
21. Arbitration clause -
In the event of any dispute between the parties which arises under this
Agreement, such dispute shall be settled by arbitration in accordance with the
rules for commercial arbitration of the American Arbitration Association (or a
similar organization) in effect at the time such arbitration is initiated., A
list of arbitrators shall be presented to the Claimant and Respondent from which
one will be chosen using the applicable rules. The hearing shall be conducted in
New Jersey, unless both parties consent to a different location. The decision of
the arbitrator shall be final and binding upon all Parties.
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The
prevailing party shall be awarded all of the filing fees and related
administrative costs. Administrative and other costs of enforcing an arbitration
award, including the costs of subpoenas, depositions, transcripts and the like,
witness fees, payment of reasonable attorney's fees, and similar costs related
to collecting an arbitrator's award, will be added to, and become a part of, the
amount due pursuant to this Agreement. Any questions involving contract
interpretation shall use the laws of New Jersey. An arbitrator's decision may be
entered in any jurisdiction in which the party has assets in order to collect
any amounts due hereunder.
The
undersigned have executed this Agreement as of the date first forth
above.
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CONVERSION
SERVICES INTERNATIONAL, INC.
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By:
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Name:
Xxxx Xxxxx
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Title:
President and Chief Executive Officer
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Xxxxx
Xxxxxxx
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