EMPLOYMENT AGREEMENT
This
Employment Agreement (the “Agreement”)
is
entered into effective as of October 15, 2007 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 Thousand Dollars ($200,000)
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)
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, 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, 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 twelve (12)
months.
(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 twelve (12) months following such
termination.
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.
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(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 12 month period immediately following the
date
of termination.
(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.
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.
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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 twelve months
after Employee’s cessation of employment with the Company, anywhere in the
world. 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 twelve
(12)
month 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.
(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.
5
(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.
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.
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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 forth
above.
| CONVERSION SERVICES INTERNATIONAL, INC. | ||
| |
|
|
| By: | /s/ | |
|
Name: Xxxxx Xxxxxx |
||
| Title: President and Chief Executive Office | ||
| |
|
|
| /s/ | ||
|
Xxxxxxx
Xxxxxx
|
||
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