Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into effective as
of March 26, 2004 by and between Xxxxxxxx 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 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. 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 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 the use of an automobile of
Employee's choice at a monthly leased price not to exceed $750. The Company
agrees to replace the automobile with a new one at Employee's request no more
often than once every two (2) years. The Company will pay all automobile
operating expenses incurred by Employee in the performance of Employee's Company
duties. The Company will procure and maintain in force an automobile liability
policy for the automobile with coverage, including Employee, in the minimum
amount of $1,000,000 combined single limit on bodily injury and property damage.
(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 March 25, 2007
(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
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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.
(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.
(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, in a lump sum payable on the date of termination,
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 the longer of (i) thirty six (36)
months or (ii) the period from the date of termination through the Expiration
Date.
(c) Termination for Good Cause. "Good Cause" means any one or more
of the following:
(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, or four (4) months from the
effective date of this Agreement, whichever is longer, in one lump sum. Employee
shall continue to receive the same health benefits that he was receiving prior
to such termination for twelve (12) months following such termination.
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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(a) 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, in one lump sum.
(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(a) 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, 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, 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 one (1) year 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 one (1) year 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 own, manage, operate, control, consult for,
be an officer or director of, work for, or be employed in any capacity by any
company or any other business, entity, agency or organization which engages in
Competitive Activity; 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
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Company licensee, or, for non-licensees, in such capacity as the Board of
Directors of the Company has granted him written permission.
(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.
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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 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/Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: President and Chief
Executive Officer
/s/Xxxxxxxx Xxxxxxx
-------------------------------
Xxxxxxxx Xxxxxxx
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