EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 28th day
of October, 1996 by and between Xxxxxxx Deposition Service, Inc., a
California corporation, with offices at 0000 Xxxxx Xxxxxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000 (the "Corporation") and Xxxxxx Xxxxxx, residing at
00000 Xxxxxxx Xxxxx, Xxxxxx, XX 00000 (the "Employee").
W I T N E S S E T H :
WHEREAS, in order to induce the Corporation to acquire
the assets of a corporation in which the Employee is a
stockholder, the Employee has agreed to enter into this Agreement; and
WHEREAS, the Corporation desires to
employ the Employee and the Employee desires to accept such
employment upon the terms and conditions contained in this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained in this Agreement, the parties agree as follows:
1. TERM OF EMPLOYMENT
Subject to the terms and conditions set forth in this Agreement, the
Corporation hereby agrees to employ the Employee, and the Employee accepts such
employment, as chief operating officer of the M & M Division of the Corporation
(the "Division") beginning on the date hereof and continuing for a period of
three years or until earlier terminated as provided herein. The Employee shall
not be required to relocate outside of Orange County, without his prior consent.
2. DUTIES
2.1 Subject to the direction of the Chairman of the Board of
Directors or Board of Directors of the Corporation, the Employee shall
perform such duties and discharge such responsibilities, commensurate with the
Employee's position, including hiring and firing of Division personnel, salary
structure of Division personnel, client contact and collection of Division
invoices, responsibilities for Division reporting staff and pay schedules, fee
schedules for Division clients, making normal capital expenditures for the
operation of the Division and calendar matters and assignment of reporters with
respect to the Division. The Employee agrees to perform such duties and
discharge such responsibilities in a faithful manner and to the best of his
ability. The Employee agrees to devote his full business time and attention to
the business and affairs of the Corporation and its subsidiaries and to use his
best efforts to promote the interest of the Corporation and its subsidiaries.
The Employee further agrees that he will not engage in any outside business
concerns or activities other than limited activities outside the Corporation
which do not materially detract from the operation of the Division (including
managing personal investments and real estate activities presently engaged in by
the Employee), without the written consent of the Corporation's Board of
Directors.
2.2 The Board of Directors of the Corporation reserves
the right from time to time to assign to the Employee additional duties and
responsibilities, commensurate with the Employee's position. All such
assignments and delegations of duties and responsibilities shall be made by the
Board of Directors of the Corporation in good faith and shall not materially
affect the general character of the work to be performed by the Employee. The
Employee shall hold such officerships in the Corporation and any subsidiary to
which, from time to time, he may be appointed during the term of this Agreement.
3. COMPENSATION
So long as the Employee is employed by the Corporation, the
Corporation agrees that:
3.1 The Employee shall receive an
annual base salary at the rate of $97,000 per annum, payable in accordance with
the Corporation's normal payroll practices. The Corporation shall deduct or
withhold from such payments, and from all other payments made to the Employee
pursuant to this Agreement, all amounts which may be required to be deducted or
withheld under any applicable law now in effect or which may become effective
during the term of this Agreement (including but not limited to Social Security
contributions and income tax withholdings). Any salary and other compensation to
be paid to the Employee hereunder may be paid by subsidiaries of the
Corporation, and not by the Corporation, in such proportion as shall be
allocated among them by the Corporation and such subsidiary.
3.2 The Employee shall be entitled to participate in, and
receive benefits from, any insurance, medical (including medical coverage
for his wife), disability, bonus, incentive compensation, stock option or other
employee benefit plan, if any are adopted, of the Corporation or any subsidiary
which may be in effect at any time during the course of his employment by the
Corporation and which shall be generally available to the Employee on terms no
less favorable than to other employees of the Corporation or its subsidiaries.
3.3 The Board of Directors of the
Corporation in its sole discretion may grant to the Employee a bonus at any time
and from time to time. It is anticipated that any such bonus shall be based on
the profitability and results of operations of the business unit in which the
Employee shall be actively involved. On the date hereof, the Corporation is
herewith paying to the Employee the amount of $144,000 as a bonus for entering
into this Agreement, less any amounts required by law to be deducted or withheld
from such payment.
3.4 The Employee shall be entitled to five weeks of paid vacation
each year.
4. REIMBURSEMENT FOR EXPENSES
The Corporation or its subsidiaries shall reimburse the Employee for up
to $12,000 per year of expenses which the Employee may from time to time
reasonably incur on behalf of the Corporation, without the Corporation's prior
approval, in the performance of his responsibilities and duties under this
Agreement; provided that the Employee shall be required to account to the
Corporation for such expenses in the manner prescribed by the Corporation.
In recognition of Employee's need for an automobile for business purposes, the
Corporation will reimburse the Employee directly for such expenses, up to
$1,000 per month.
5. TERMINATION OF EMPLOYMENT BY REASON OF DEATH
If the Employee shall die during the term of this Agreement, this Agreement
shall terminate automatically as of the date of his death and the Corporation
shall pay to the Employee's legal representatives the compensation which would
otherwise be payable to the Employee up to the end of the month in which his
death occurs and no more.
6. TERMINATION OF EMPLOYMENT BY REASON OF DISABILITY
If the Employee shall become temporarily disabled during the term of this
Agreement, all of the Employee's rights under this Agreement shall continue
until such time as the Employee either returns to work or is deemed "permanently
disabled" (as hereinafter defined in Section 6.1).
6.1 If the Employee shall be deemed permanently disabled, the Employee's
employment shall immediately terminate at such time that the Employee is deemed
to be permanently disabled. The Employee shall be deemed permanently disabled
for purposes of this Agreement if: (i) in the opinion of the Board of Directors,
the Employee is unable to render full-time service to the Corporation pursuant
to the terms of this Agreement for three consecutive months, or (ii) in the
opinion of the Board of Directors, the Employee is unable to render full-time
service to the Corporation pursuant to the terms of this Agreement for four
months out of any twelve consecutive month period.
7. TERMINATION OF EMPLOYMENT FOR CAUSE
The Corporation may immediately terminate the Employee's employment in the
event that the Employee shall do or cause to be done any act which constitutes
"cause" (as hereinafter defined) for termination. For purposes of this
Agreement, cause shall be deemed to mean a material breach by the Employee of
this Agreement, neglect or refusal to attend to the material duties assigned to
him by the Chairman of the Board or Board of Directors of the Corporation, gross
negligence or wilful misconduct in the performance of his duties, dishonesty to
the Corporation (including, without limitation, conviction of a crime in any
court which could have the effect of causing the termination or suspension of
any license which the Corporation holds), conviction of a felony or excessive
absenteeism not related to disability. Should the Employee's employment be
terminated by the Corporation for cause, the Corporation's only obligation shall
be to pay the Employee his salary and other compensation under Sections 3.1 and
3.2 of this Agreement which has accrued as of the date of such termination.
Nothing contained in this Article 7 shall in any way waive, restrict or
prejudice the Corporation's rights and remedies in equity and at law against the
Employee with respect to the matter for which the Employee's employment under
this Agreement is terminated for cause.
8. TERMINATION BY EMPLOYEE
8.1 The Employee may terminate his employment hereunder if (a) during the
first twelve months after the date hereof, Esquire Communications Ltd.
("Esquire") shall be in default in the payment of principal or accrued interest
on the promissory note dated the date hereof in the original principal amount of
$2,512,700 (the "Note") and such default remains uncured for a period of at
least 180 days or (b) subsequent to the first anniversary of the date hereof
Esquire shall be in default in the payment of principal or accrued interest on
the Note and such default remains uncured for a period of at least 60 days. Upon
such termination, the provisions of Section 10 shall be terminated and of no
further force or effect.
8.2 The Employee may terminate this Agreement and his employment
hereunder for the following reasons:
(a) Without Employee's express written
consent, the assignment to Employee of any duties which would constitute a
material reduction in Employee's authority or responsibilities as contemplated
by Section 2 hereof;
(b) Failure by the Corporation to comply with any material
provision of Section 3 hereof, which is not remedied by the Corporation promptly
after receipt of notice thereof given by the Employee;
(c) The Corporation's requiring Employee to be based at any office or
location outside of Orange County, California, except for travel assignments
which are reasonably required for the full discharge of Employee's
responsibilities; or
(d) Any termination by the Corporation of Employee's employment
otherwise than as permitted by this Agreement.
8.3 If the Employee terminates this
Agreement for the reasons set forth in Section 8.1 or 8.2 hereof or if the
Corporation terminates Employee's employment other than for Cause or disability,
the Corporation shall be obligated to make payments to Employee equal to
Employee's salary in effect at the date of termination for the balance of the
term of this Agreement, without limitation to any other rights to which Employee
my be entitled as a matter of law. Notwithstanding the foregoing, the amounts
Employee is entitled to receive pursuant to this Section 8.3 shall be reduced by
the amount of any compensation which Employee may receive, in respect of the
period covered by this Section 8.3 from any company or other entity engaged in
the court reporting business which is in direct competition with the Corporation
or any of its subsidiaries, regardless of whether such compensation is received
as an employee, consultant or otherwise. Termination of this Agreement by
Employee for the reasons set forth in Sections 8.1 or 8.2 shall not impair or in
any other way adversely affect the right to enforce his rights under the Note.
8.4 Any termination by the
Corporation for Cause or for disability or by the Employee for the reasons set
forth in Section 8.1 or 8.2 shall be communicated by Notice of Termination to
the other party given in accordance with Section 12 hereof. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision so
indicated and (iii) if the termination date is other than the date of receipt of
the notice, specified the termination date of this Agreement (which date shall
not be more than 15 days after the giving of such notice). "Date of Termination"
means the date of receipt of the Notice of Termination or the date specified
therein, as the case may be.
9. CONFIDENTIALITY
During the course of his employment
as an employee of the Corporation, the Employee has had, and will have, access
to and will gain knowledge with respect to all of the lines of business of the
Corporation, including service information, information concerning customers,
court reporters, and other valuable information relating to the development,
marketing and sale of services of the Corporation ("Confidential Information").
The parties also agree that covenants by the Employee not to make unauthorized
disclosures of the Confidential Information and not to use the Confidential
Information after the termination of the Employee's employment with the
Corporation in a business in competition with that of the Corporation are
essential to the growth and stability of the business of the Corporation.
Accordingly, Employee agrees that, except as required by his duties under this
Agreement, he shall not take, use, or disclose to anyone in documentary form or
through electronic media or otherwise, at any time during or after the term of
this Agreement, any Confidential Information obtained by him in the course of
his employment with the Corporation.
10. NON-COMPETITION
10.1 During the term of this Agreement and for a period of 24
months from the date of the termination of this Agreement in accordance
with its terms, the Employee agrees that he shall not directly or indirectly,
for his own account or as agent, employee, officer, director, trustee,
consultant or shareholder of any corporation or a member of any firm or
otherwise, anywhere within 100 miles of metropolitan Santa Ana, California and
within 100 miles of any office of the Corporation engage or attempt to engage in
any business activity which is the same as, substantially similar to or directly
competitive with the Corporation.
10.2 During the term of this Agreement and for
a period of 24 months from the date of termination of this Agreement in
accordance with its terms, the Employee agrees that he shall not, directly or
indirectly, for his own account or as agent, employee, officer, director,
trustee, consultant or shareholder of any corporation, or member of any firm or
otherwise, employ or solicit the employment or retention of any court reporter
retained by the Corporation or any employee of the Corporation.
10.3 The Employee acknowledges and agrees that the foregoing
territorial and time limitations and restrictive covenants are reasonable
and properly required for the adequate protection of the business and affairs of
the Corporation, and in the event any such territorial or time limitation is
found to be unreasonable by a court of competent jurisdiction, the Employee
agrees and submits to the reduction of either said territorial or time
limitation or both, to such an area or period as the court may determine to be
reasonable.
11. RIGHTS TO DISCOVERIES
The Employee agrees that all ideas, inventions, trademarks and other
developments or improvements conceived, developed or acquired by the Employee
during the term of this Agreement, whether or not during working hours, at the
premises of the Corporation or elsewhere, alone or with others, that are within
the scope of the Corporation's business operations or that relate to any work or
projects of the Corporation shall be the sole and exclusive property of the
Corporation. The Employee agrees to disclose promptly and fully to the
Corporation all such ideas, inventions, trademarks or other developments and, at
the request of the Corporation, the Employee shall submit to the Corporation a
full written report thereof regardless of whether the request for a written
report is made after the termination of this Agreement. The Employee agrees that
during the term of this Agreement and thereafter, upon the request of the
Corporation and at its expense, he shall execute and deliver any and all
applications, assignments and other instruments which the Corporation shall deem
necessary or advisable to transfer to and vest in the Corporation the Employee's
entire right, title and interest in and to all such ideas, inventions,
trademarks or other developments and to apply for and to obtain patents or
copyrights for any such patentable or copyrightable ideas, inventions,
trademarks and other developments.
12. NOTICES
All notices and other communications given pursuant to this Agreement shall
be deemed to have been properly given or delivered at the time when hand
delivered, when received if sent by telecopier or by same day or overnight
recognized commercial courier service, or three days after being mailed, by
certified mail, postage prepaid, addressed to the appropriate party, at the
address for such party set forth at the beginning of this Agreement. Any party
may from time to time designate by written notice given pursuant to this Article
12 any other address or party to which any such notice or communication or
copies thereof shall be sent.
13. EQUITABLE RELIEF
The Employee acknowledges that the Corporation will suffer damages
incapable of ascertainment in the event that any of the provisions of Articles
9, 10 or 11 hereof are breached and that the Corporation will be irreparably
damaged in the event that the provisions of Articles 9, 10 or 11 are not
enforced. Therefore, should any dispute arise with respect to the breach or
threatened breach of Articles 9, 10 or 11 of this Agreement, the Employee agrees
and consents, that in addition to any and all other remedies available to the
Corporation, an injunction or restraining order or other equitable relief may be
issued or ordered by a court of competent jurisdiction restraining any breach or
threatened breach of Articles 9, 10 or 11 of this Agreement. The Employee agrees
not to assert in any such action that an adequate remedy exists at law.
14. COSTS AND EXPENSES
All expenses, including, without limitation, attorney's fees
and expenses incurred in connection with any legal proceeding arising as a
result of a breach or threatened breach of this Agreement shall be borne by the
losing party to the fullest extent permitted by law and the losing party hereby
agrees to indemnify and hold the other party harmless from and against all such
expenses.
15. MISCELLANEOUS
This Agreement shall be governed by the internal
domestic laws of the State of California without reference to conflict of laws
principles. This Agreement shall be binding upon and inure to the benefit of the
legal representatives, successors and assigns of the parties hereto (provided,
however, that the Employee shall not have the right to assign this Agreement in
view of its personal nature). All headings and subheadings are for convenience
only and are not of substantive effect. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior negotiations, understandings and writings (or any part
thereof) whether oral or written between the parties hereto relating to the
subject matter hereof. There are no oral agreements in connection with this
Agreement. Neither this Agreement nor any provision of this Agreement may be
waived, modified or amended orally or by any course of conduct but only by an
agreement in writing duly executed by both of the parties hereto. If any
article, section, portion, subsection or subportion of this Agreement shall be
determined to be unenforceable or invalid, then such article, section, portion,
subsection or subportion shall be modified in the letter and spirit of this
Agreement to the extent permitted by applicable law so as to be rendered valid
and any such determination shall not affect the remainder of this Agreement,
which shall be and remain binding and effective as against all parties hereto.
For purposes of this Agreement, all references to the Corporation shall include
all subsidiaries of the Corporation.
16. INDEMNIFICATION
The Corporation shall indemnify and hold Employee harmless to the maximum
extent permitted by applicable law against judgments, fines, damages, amounts
paid in settlement and reasonable attorney's fee and costs incurred by the
Employee, in connection with the defense of or as a result of any action or
proceeding (or appeal of any action or proceeding or any investigation which
might result in any such action or proceeding) in which the Employee is made or
is threatened to be made party by reason of his actions within the scope of his
duties and authority as a director, officer or employee of the Corporation or
any of its subsidiaries or affiliates. To the maximum extent permitted by
applicable law, the Corporation will pay the reasonable costs and expenses in
defending any such action or proceeding as such costs and expenses are incurred.
In the event it is determined in such investigation, action or proceeding (or
appeal thereof) that he is guilty or at fault and not entitled to
indemnification, Employee shall reimburse the Corporation for all such costs and
expenses it expended on his behalf.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
---------------------------------
XXXXXX XXXXXX
XXXXXXX DEPOSITION SERVICE, INC.
By:______________________________
GUARANTEE
Esquire Communications Ltd. hereby guarantees the
performance of all of the obligations of Xxxxxxx Deposition Service, Inc.
under this Agreement.
ESQUIRE COMMUNICATIONS LTD.
By:____________________________
