EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of this 1st
day of June, 1996 by and between Globalink, Inc. with address of 0000 Xxx
Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Globalink" or the "Company") and Xxxxx X.
Xxxxxxx with home address at 0000 00xx Xxxxxx, XX, Xxxxxxxxxx, XX 00000
("Executive").
WHEREAS, Globalink desires to have the benefits of Executive's
knowledge and expertise as a full-time employee without the distraction of
employment related uncertainties and considers such employment in the best
interests of the Company and its shareholders, and Executive desires to be
employed full time by the Company; and
WHEREAS, Globalink and Executive desire to enter into an Agreement
reflecting terms under which Executive will be employed by the Company for a
three (3) year period which commenced on June 1, 1996.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, subject only to the approval of the Compensation Committee of
the Board of Directors, the parties agree as follows:
1. Term. This Agreement will remain in effect for a period of three (3)
years and will be renewed automatically for succeeding periods of one year
unless sooner terminated as provided in sections 6 and 7 below, unless either
party provides not less than thirty (30) days notice prior to the end of the
term of its or his desire to terminate this Agreement at the end of the term.
2. Nature of Employment. Executive shall be employed as the Chairman of
the Board of Directors and Chief Executive Officer of Globalink with full power
and authority as determined by the Board of Directors of Globalink. Executive
agrees to diligently and faithfully perform such reasonable duties and serve in
such capacities as the Board of Directors of the Company shall determine from
time to time.
3. Compensation for Services. As consideration to Executive under this
Agreement, Globalink shall compensate Executive as follows:
(a) Base salary. Executive shall receive a base salary of Two
Hundred Thousand ($200,000) per year, or such other greater sum by way of base
salary as the Globalink Board of Directors may determine from time to time.
(b) Incentive Compensation and Bonus.
(i) Stock options to purchase 120,000 shares of the
Company's common stock at $8.625, the market price on June 1,
1996, per share to be granted at commencement of employment.
The options shall vest at thirty-three and one-third percent
(33-1/3% or 40,000 shares) per year on the first, second and
third anniversaries of the date of commencement of the
Executive's employment. The
vested options shall be exercisable for a period of five years
from the date of vesting.
The options are cancelable upon the Executive's termination
from Globalink for cause as defined in 6 (a) below.
Furthermore, the options shall inure to the benefit of the
Executive's heirs and designees.
(ii) Upon the accomplishment of certain objectives by
the Executive as set forth in Exhibit A, attached hereto, the
Executive shall be entitled to an initial bonus of up to
$100,000.
(iii) Other incentive compensation shall be at the
discretion of the Board of Directors.
(c) Globalink shall lease an automobile for the exclusive use
of the Executive. The monthly lease payments shall not exceed
$1,000 per month for the length of this Employment Contract.
(d) Benefits. Executive shall be entitled to all other
benefits normally accorded to full time employees of Globalink
so long as he remains an employee of Globalink.
(e) Reimbursement. Executive shall be reimbursed within
fifteen (15) days for all properly documented Globalink
business expenses incurred by Executive. To the extent
permitted by applicable law, Globalink, shall treat these
expenses as senior in the right of payment to any other
obligation of Globalink.
4. Responsibility of Executive. The responsibilities of Executive
under this Agreement are as follows:
(a) Executive agrees to serve Globalink for the term of
employment specified in Section 1 above. Executive agrees to (i) devote his full
business time to the business and affairs of Globalink, (ii) use his best
efforts to promote the interests of Globalink, and (iii) perform faithfully and
efficiently the responsibilities assigned to him by the Board of Directors.
(b) During the term of this Agreement, Executive shall not
perform services for any person or entity that competes directly or indirectly
with the Company. Executive agrees to disclose to the Board of Directors any
non-Company activities for which Executive receives compensation for services
rendered.
(c) Executive agrees to abide by general company policies as
the same are duly adopted by the Board of Directors from time to time, so long
as such policies do not conflict with the terms and conditions of this
Agreement.
5. Confidentiality and Non-Disclosure Agreement. Executive
acknowledges that the software technology, the business information and
techniques used, developed and acquired by the Company ("Confidential
Information") are among its most valuable assets and such Confidential
Information was compiled with the expenditure of incalculable time, effort and
expense. Executive further acknowledges that by reason of his employment by the
Company, he will have access to Confidential Information of the Company and that
the value of such information may be destroyed by disclosure to anyone outside
the employ of the Company. Consequently, the Executive hereby agrees that he
will not at any time, without the express written consent of the Company: (i)
disclose, directly or indirectly, any Confidential Information (as defined
below) to anyone outside the employ of the Company, or (ii) use, directly or
indirectly, any Confidential Information for the benefit of anyone other than
the Company.
"Confidential Information" as used herein means all information of a
business or technical nature disclosed to, learned or developed by Executive in
the course of his employment by the Company, which information relates to the
Company or the business of any other person, firm, corporation or other entity
which consults with the Company in connection with the Business which is not
generally known in the software industry. Confidential Information shall
include, but is not limited to, information and knowledge pertaining to the
software technology, linguistic algorithms, developments, improvements, methods
of operation, sales and profit figures, customer and client lists, credit and
other financial information about the Company or its customers, and
relationships between the Company and its customers, clients and others who have
business dealings with the Company.
6. Termination by the Company. The Board of Directors may
terminate the employment of Executive at any time with or without cause, and in
such event the following shall apply:
(a) In the event of termination by Globalink for cause, all
salary and other benefits paid or provided to Executive hereunder shall cease as
of the date of termination, and the Company shall have no further obligations to
Executive. For purposes of this Section 6 (a), termination "for cause" shall be
defined as:
(i) any willful and material breach or violation of
any of Executive's covenants, duties, or obligations under
this Agreement (including Executive's resignation without
cause) or any willful or material neglect of or failure to
refusal to perform any of such covenants, duties, or
obligations, which is not cured within five days after the
receipt by Executive of notice of such breach or violation;
(ii) any willful or material misconduct which is
reasonably deemed to be injurious to the Company, including,
without limitation, misconduct involving fraud or dishonesty
in the performance of such covenants, duties or obligations;
(iii) the development by Executive of any drug,
alcohol, or other substance abuse problem, or the conviction
of a crime involving moral turpitude; or
(iv) any willful violation or willful refusal to obey
the reasonable lawful directives and instructions of the Board
of Director, which is not cured within five days after the
receipt by Executive of notice of such breach or violation.
For the purposes of this definition, no act or omission of
Executive shall be considered "willful" unless Executive was not acting in good
faith and did not have a reasonable belief that such action or omission was in
the best interest of the Company.
(b) In the event of termination by Globalink without cause,
except as provided in Section 6 (c) hereof, the Company agrees to provide
Executive with the following:
(i) Executive shall receive an amount equal to
twenty-four (24) months' base salary plus the value of his
benefits accrued at the time of termination that the Executive
would have received under this Agreement but for such
termination. Such amount shall be payable to Executive
bi-monthly installments over a period of twenty-four (24)
months following termination. The Company will also pay the
incentive compensation described in Section 3 (b).
(ii) The definition of termination without cause
shall include, but not be limited to, any termination relating
to a continuous disability or incapacity of Executive which
prevents him from performing his duties for a period of not
less than three (3) months as determined by any independent,
licensed medical doctor.
(c) Globalink shall be entitled to terminate this Agreement
upon a finding of the Board of Directors that Executive has willfully failed to
observe or perform his obligations or duties as specifically set forth in
Section 4 hereof, provided that the Board of Directors has first notified
Executive on two separate occasions of such failure and has given Executive at
least thirty (30) days after each such occasion to remedy such willful breach of
duty. In the event of a termination under this Section 6 (c), Globalink shall
provide Executive with one-half of all amounts payable under Section 6 (b).
(d) In the event of a hostile takeover of the Company,
Executive shall receive an amount equal to three multiplied by one year's base
salary plus the value of his other employment benefits. All non-vested stock
options shall immediately vest and shall be exercisable as set forth in
paragraph 3 (b) (i) above.
(e) In the event of a change in control, Executive shall
receive an amount equal to one year's base salary plus the value of his other
employment benefits and all non-vested stock options shall immediately vest and
shall be exercisable, as set forth in paragraph 3 (b) (i) above.
A "change in control" with respect to Globalink shall be
deemed to have occurred if (i) substantially all the assets of the Company are
sold, other than any such transaction following which the stockholders of the
Company prior to the transaction retain at least a majority of the voting equity
securities of the surviving or successor corporation; (ii) the Company is merged
or consolidated with, or becomes a subsidiary of, another corporation, other
than any such transaction following which the stockholders of the Company prior
to the transaction retain at least a majority of the voting equity securities of
the surviving or successor corporation; (iii) any "person" or "group" of persons
(as such terms are used in Section 13(d) of the Securities Exchange Act of 1934,
as amended), other than the Company or a subsidiary of the Company, and other
than persons currently holding greater than 10% of the outstanding voting
securities becomes the "beneficial owner" (as defined in Rule 13d-3 under the
1934 Act), directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding
securities, or (iv) during any period of two consecutive years during the term
of this Agreement, individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reasons to constitute at
least a majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds of the sum of the directors (i) then
in office who were directors at the beginning of the period and (ii) directors
approved by two-thirds of the directors then in office.
7. Resignation by Executive. Executive may terminate this
Agreement and his employment with Globalink for cause, in which event Executive
and Globalink shall have such rights and obligations as would apply if this
Agreement had been terminated under Section 6 (b). For purposes of this Section
6, Executive's termination "for cause" shall be defined as termination for
Globalink's willful or permanent breach of its obligations under this Agreement.
If, however, Executive terminates this Agreement and his employment with the
Company without cause, resignation shall be deemed termination for cause under
Section 6 (a) and all such rights and obligations thereunder shall apply.
8. Governing Law. The Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia.
9. Severability. If any court of competent jurisdiction should
find any provision of this Agreement invalid or unenforceable, for any reason,
the remaining portion or portions hereof shall nevertheless by valid,
enforceable and carried into effect, unless to do so would clearly violate the
present legal and valid intention of the parties hereto.
10. Entire Agreement. This Agreement constitutes the
entire understanding between the parties with respect to the subject matter
hereof, superseding all prior negotiations and agreements. This Agreement may
not be amended except in writing executed by the parties hereto.
11. Effect on Successors in Interest. This Agreement
shall inure to the benefit of and be binding upon heirs, administrators,
executors, successors and assigns of each of the parties hereto.
12. Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal
delivery, including by facsimile, or by recognized courier (such as Federal
Express), or three (3) business days after deposit in the United States Mail, by
registered or certified mail, addressed to a party at its address shown below or
at such other address or facsimile number as such party may designate in writing
to the other party pursuant to this Section.
13. Assignment. Globalink shall have the right to assign this
agreement and to delegate all of its rights, duties and obligations hereunder,
whether in whole or in part to any parent, affiliate, successor, or subsidiary
organization or company of Globalink or corporation with which Globalink may
merge or consolidate or which acquires by purchase or otherwise all or
substantially all of Globalink assets, subject to the provisions of Section 6
(d), but such assignment shall not release Globalink from its obligations under
this agreement.
14. Good Faith. The parties will deal with each holder in good
faith with respect to this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be signed by a duly authorized officer, and Executive has signed this Agreement
as of the date and year written above.
The Company:
Globalink, Inc.
0000 Xxx Xxxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
BY:_______________________________
Executive:
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