EMPLOYMENT AGREEMENT ("Agreement"), dated as of April 1, 2000 between
The Translation Group, Ltd., a Delaware Corporation with an office at 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, (the "Company"), and Xxxxxxx
Xxxxxx residing at 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000
("Employee").
WHEREAS, the Company is desirous of engaging 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 consultant to Xxxxx X. Xxxxxx or the acting CEO of the Company, as
the case may be, and Employee hereby agrees to accept such employment. Employee
shall report to and be under the direction and control of Xxxxx X. Xxxxxx or the
acting CEO of the Company, as the case may be. Employee shall devote his best
efforts to the business of the Company and to promoting its best interest. The
Company shall furnish Employee with an office, secretarial help and other
facilities and services as are suitable to his position and adequate for the
performance of his duties in accordance with the provisions of this Agreement.
2. TERM OF EMPLOYMENT. Subject to the provisions for termination
hereinbelow, the term of Employee's employment hereunder shall begin on April 1,
2000, and shall extend until April 1, 2002. Provided that the term of Employee's
employment will automatically be extended for a period of one (1) additional
year upon the completion of 3(c)(ii) hereinbelow.
3. COMPENSATION.
(a) The Company shall pay to the Employee a salary at a rate of
$125,000.00 per year, payable in accordance with the normal payroll practices of
the Company. The base salary shall be adjusted annually based upon the Consumer
Price Index, as published in the Wall Street Journal on the first Monday
subsequent to the anniversary of the date hereof. In addition, 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.
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(b) BONUS. Employee shall also be paid a performance bonus equal to
50% of his base salary provided that the Company meets its operating goals as
reasonably set by the Board of Directors. Any performance bonuses earned shall
be paid within 60 days from the end of the term in which such bonus was earned.
(c) STOCK OPTIONS AND WARRANTS. In addition to his base salary,
Employee shall be entitled to receive 100,000 stock options and 100,00 warrants
of the Company in accordance with the following provisions:
(i) 100,000 warrants shall vest immediately upon signing this
Agreement at a price of .01 per warrant at an exercise price of $5.00 per share
with a five- year term.
(ii) 100,000 incentive stock options shall vest upon the Company
and/or any subsidiary of the Company securing cumulative gross financing of
$4,000,000.
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 executives and other employees of the Company. (b) In
addition, during the term of this Agreement, the Company will, at its option,
either provide Employee with a vehicle comparable to the one he currently
operates or pay Employee equivalent monthly vehicle allowance as well as
insurance, maintenence and repairs. Employee will be personally responsible for
maintaining detailed business and personal use vehicle logs of mileage and
expenses, sufficient to satisfy the requirements of the Internal Revenue
Service.
5. BENEFITS.
(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
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eligible, in all employee benefit plans in effect for employees of the Company.
In addition, the Company shall reimburse Employee or pay directly to medical
providers and/or for medical services, at Employee's discretion, up to $25,000
per year relating to the well-being of Employee for expenses not covered by the
Company's health benefit plans including, but not limited to, co-payments,
deductibles, pharmaceuticals, dental, natural medicine practice any other
non-covered expense. 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, and (ii) disability insurance in an amount so that Employee, after
taking into account the effect of taxes, will receive an amount so that
Employee, after taking into account the effect of taxes, will receive an amount
equal to his then current annual base salary (or as close thereto as the
insurance company will permit) and, in both cases, 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 a 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.
(b) DISABILITY. If, as a result of Employee's incapacity due to
physical or mental illness as determined by the insurance carrier for the
disability insurance policy obtained by the Company in accordance with
subsection 5(a)(ii) then Employee shall be deemed to be permanently disabled and
the Company shall give Employee Notice of Termination (as hereinafter defined)
which shall take effect ninety (90) days after the date it is sent to Employee.
(c) 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, or plea
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of "no contest" to any felony during the term of this Agreement; (ii) acts of
fraud, 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.
(d) NOTICE OF TERMINATION. Any purported termination by the Company
pursuant to subsections (b) or (c) shall be communicated by written Notice of
Termination to the Employee. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Employee's Employment under the provision indicated.
(e) DATE OF TERMINATION. The effective date of termination shall
be:
(i) If Employee's Employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that Employee
shall not have returned to the performance of his duties on a full-term basis
during such thirty (30) day period);
(ii) If Employee's Employment is terminated pursuant to
paragraph (c) above, the date specified in the Notice of Termination, though not
earlier than the date of such Notice; and
(iii) If Employee's Employment is terminated for any other
reason, the date on which a Notice of Termination is given.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) If Employee's Employment shall be terminated by reason of his
death, the Company shall pay to his estate, the salary which would otherwise be
payable to Employee up to the second anniversary, (or third anniversary if this
Agreement is extended pursuant to Section 3(c)(ii) hereinabove), of the date on
which his death occurs and any bonus payments or stock options already earned or
substantially earned.
(b) During any period that Employee fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, Employee
shall continue to receive his full salary at the rate then in effect for such
period until his permanent disability status
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is established pursuant to subsection 6(b) hereof.
(c) If Employee is terminated for Cause, he shall receive only his
salary to the Date of Termination.
(d) If Employee is terminated due to permanent disability (pursuant
to subsection 6(b)), if the insurance proceeds received pursuant to subsection
5(a)(ii) are not sufficient to replace Employee's after tax salary, for the
remainder of the term of this Agreement the Company shall supplement the
insurance proceeds by an amount necessary to place Employee in the same after
tax position as he would have been had he not been disabled. The Company shall
also pay Employee his salary during any period between the time he is terminated
pursuant to subsection 6(e)(i) and the time payments begin under the insurance
policy.
(e) If Employee is terminated without Cause by the Company,
Employee will be entitled to receive, as liquidated damages, a lump sum payment
equal to the aggregate amount of all payments due Employee during the term of
this Agreement, but in no event less then one year's compensation at the then
current rates. Such payment shall be made in full within thirty (30) days of
such termination.
8. LIFE INSURANCE FOR BENEFIT OF COMPANY. Employee agrees that the
Company in its discretion may apply for and procure in its own name and for its
own benefit life insurance upon the life of Employee in any amount or amounts
considered advisable; and that Employee shall have no right, title or interest
therein; and Employee further agrees to submit to any medical or other
examination (and submit to tests and supply any specimens as requested in
connection therewith) and to execute and deliver any application or other
instrument in writing reasonably necessary to effectuate such insurance.
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
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will be of a confidential or proprietary nature, not generally known to the
Company's competitors, and that the Company would likely be economically or
otherwise disadvantaged or harmed by the direct or indirect disclosure of any of
the Confidential Materials. 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. Subject to the provisions of Section 11, during
this Agreement and for a period of two (2) years following the conclusion of
this Agreement (the "Limited Period"), Employee shall not, directly or
indirectly, (i) 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 or (ii) participate in the solicitation of any business of any type
presently conducted or which may from time to time be conducted by the Company
or any affiliated entity during the Limited Period from any person or entity
which was, or which from time to time may be, a customer of the Company or any
affiliated entity during the Limited Period.
11. NON-COMPETITION. During the Limited Period, Employee shall not be
employed or interested, directly or indirectly, as an officer, director,
stockholders (excepting less than one (1%) percent interest in a publicly traded
company), employee, partner, individual proprietor, investor or Employee, or in
any other manner or capacity whatsoever, in any business that involves the
production, distribution or marketing of products or services, or otherwise
competitive with, any product or service currently, or which from time to time
may be, produced, distributed or marketed by the Company or any affiliated
entity during the Limited Period, in any place in which the Company or any
affiliated entity at the time of such termination conducts such a business,
without the prior written approval of the
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Company; PROVIDED, HOWEVER, that if any provision of Section 10 or this Section
11 would be held to be unenforceable because of the scope, duration or area of
its applicability, the court making such determination shall have the power to,
and shall, modify such scope, duration or area, or all of them, to the minimum
extent necessary to make such modified form. The above notwithstanding, Employee
shall be entitled to (i) remain on the Board of Directors of any corporations in
which he currently has such a position and (ii) advise or counsel other persons
or entities, provided, such activities are not competitive with the Company and
Employee's name is not publicly associated with such entities or activities.
12. 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 his or any
provision of Section 9, 10, or 11 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, 10, or 11 of this Agreement, Employee hereby consents to
the granting of a temporary restraining order, 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. Notwithstanding anything herein to the contrary, Employee shall have no
obligation or liability under Sections 11 or 12 of this Agreement upon
termination of this Agreement by the Company without cause.
13. 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:
Xxxxxxx Xxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
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IF, TO THE COMPANY:
The Translation Group, Ltd.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention:Xxxxx X. Xxxxxx or the acting CEO
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.
14. 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 attorney's fees.
15. 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 12), 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. If the parties are
unable to agree upon the appointment of an arbitrator, then the arbitration
shall take place in the City closest to Haddonfield, New Jersey in which the AAA
has an office before a panel of three arbitrators selected in accordance with
the Arbitration Rules. 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
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the manner set forth in Section 13 of this Agreement or in any other manner
permitted by applicable law.
16. MISCELLANEOUS.
(a) This Agreement sets forth the entire understanding between the
parties as to the subject matter hereof and superseds 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 internal 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,
provided that Employee shall assume the positions as negotiated between the
Company and any such other entity it consolidated or merges with. This Agreement
calls for the provision of personal services and, accordingly, shall not be
assignable by Employee. 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
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competent jurisdiction, the remainder of this Agreement shall not be affected
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: ______________________________
Name: Xxxxx X. Xxxxxx
Title: CEO
BY: ____________________________________
Xxxxxxx Xxxxxx, Employee
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