EXHIBIT 10.1
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") dated as of February 1, 2006, by and
between INNODATA ISOGEN, INC., a Delaware corporation (the "Company"), and JACK
S. ABUHOFF (the "Executive").
WITNESSETH
1. Employment. The Company hereby employs the Executive as its President
and Chief Executive Officer for and during the Term of this Agreement (as set
forth in Paragraph 4 below). The Executive hereby accepts such employment with
the Company under the terms and conditions set forth in this Agreement.
2. Duties and Authorities of the Executive. Throughout the Term, the
Executive shall have such duties and authorities as shall be consistent with his
position as President and Chief Executive Officer of the Company, as may be
reasonably assigned to him from time to time by the Board of Directors of the
Company (the "Board"), and he shall report solely and directly to the Board.
3. Full Business Time. Throughout the Term, the Executive agrees to devote
substantially all of his professional time and efforts to the performance of his
duties hereunder. Provided that such activities do not violate any term or
condition of this Agreement, or materially interfere with the performance of his
duties hereunder, or create a conflict of interest, nothing herein shall
prohibit the Executive from (a) participating in other business activities
approved in advance in writing by the Board in accordance with any terms and
conditions of such approval, (b) engaging in charitable, civic, fraternal or
trade group activities, (c) investing his personal assets in other entities or
business ventures, subject to any policies of the Company applicable to all
executive personnel of the Company, or (d) serving on the board of directors of
another entity, provided that such service is approved in advance in writing by
the Board.
4. Term. The term of this Agreement shall commence on February 1, 2006 and
end on February 1, 2009 (the "Term"), unless terminated earlier pursuant to this
Agreement. In the event that the Executive's employment continues beyond the
Term of this Agreement without the parties executing a new written agreement,
nothing herein shall be construed as an automatic, constructive renewal of this
Agreement for any specified term.
5. Compensation.
(a) Base Compensation. The Company shall pay the Executive an
annualized base salary ("Base Salary") at the rate of Three Hundred Sixty-Nine
Thousand Dollars and No Cents ($369,000.00), subject to annual review by the
Board to be coterminous with the annual reviews of the Company's other senior
executives but no later than March of each calendar year during the Term (with
the first such review being no later than March 2006) for discretionary
increases to be applicable for the twelve (12) consecutive month period
commencing on the respective next April 1 (the first such increase, if any,
commencing April 1, 2006) as determined by the Company's Board of Directors in
its sole and absolute discretion; provided, however, that the Executive shall be
entitled to receive annual Base Salary increases at least equal to the annual
percentage change in the Consumer Price Index, for all urban consumers for all
items (U.S. City
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Average, Not Seasonally Adjusted), as compiled by the Census Bureau and Bureau
of Labor Statistics and published in the Statistical Abstract of the United
States for the calendar year preceding the effective date of the adjustment.
Base Salary payments shall be paid in accordance with the Company's regular
payroll practices, subject to deduction for applicable U.S. federal, state and
local withholding taxes.
(b) Cash Incentive Compensation. For each calendar year during the
Term, the Executive shall be eligible to receive a cash bonus ("Bonus") as long
as the Executive's work performance while employed by the Company is
satisfactory (as determined by the quantitative objectives as established below)
in an amount, if any, to be determined in the sole and absolute discretion of
the Company's Compensation Committee. The Bonus for each such calendar year will
be payable in accordance with the general policies and procedures for payment of
incentive compensation to senior executive personnel of the Company. The amount
of Bonus will be conditioned on the attainment of certain quantitative
objectives established by the Compensation Committee of the Board (the
"Compensation Committee") in its sole and absolute discretion and communicated
thereby in writing to the Executive at least ten (10) days prior to the
beginning of the applicable calendar year. The Compensation Committee will also
determine and advise the Executive in writing prior to the beginning of the
applicable calendar year, of his "target" Bonus amount for such year, which
shall not be less than 50% of the annual rate of the Executive's then Base
Salary (the "Bonus Target") in effect for the calendar year for which the Bonus
is to be determined. Executive's eligibility for, participation in, and the
terms and conditions of any Bonus hereunder shall be set forth in separate
official Bonus plan documents, the terms and conditions of which shall
exclusively govern the payment of any Bonus described in this paragraph. Bonus
payments shall be subject to deduction for applicable U.S. federal, state and
local withholding taxes.
(c) Equity-Based Incentive Compensation. The Executive shall be
granted stock options under the Company's stock incentive plans from time to
time, which stock options shall be "incentive stock options" (within the meaning
of Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code")), to the maximum extent permissible under Section 422(d) of the Code.
The amounts of such grants shall be determined by the Compensation Committee in
its sole and absolute discretion; provided, however, that each such stock option
shall provide for an exercise price equal to the fair market value at the time
of the grant of the underlying shares subject thereto, and the terms of any
stock option shall be at least equivalent to the terms of any options granted to
the next highest ranking executive of the Company, at the time of any grant to
the Executive. Executive's eligibility for participation, and the terms and
conditions of any stock options hereunder shall be set forth in separate
official stock option plan documents, the terms and conditions of which shall
exclusively govern the award, vesting, exercise and all other aspects of the
stock options described in this Paragraph. As provided in Paragraph 7(e)(i)(C)
or upon the occurrence of a "Change of Control" (as defined below), all then
outstanding stock options and all other equity-based or equity-related
compensation rights or entitlements theretofore granted or awarded to the
Executive by the Company, including but not limited to those stock options
granted to the Executive under this Paragraph 5(c), shall automatically and
immediately become fully vested and exercisable and relieved of any and all
otherwise applicable transfer restrictions, lock-up or performance requirements
and other
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restrictions and/or contingencies of any kind. For purposes hereof, a "Change of
Control" shall be deemed to have occurred as of the earliest of any of the
following to occur during the Term:
(i) The closing of a transaction by the Company or any person
(other than the Company, any subsidiary of the Company or any
employee benefit plan of the Company or of any subsidiary of the
Company) (a "Person"), together with all "affiliates and
"associates" (within the meanings of such terms under Rule 12b-2 of
the Securities Exchange Act of 1934, as amended) (the "Exchange
Act") of such Person, shall be the beneficial owner of thirty
percent (30%) or more of the Company's then outstanding voting stock
("Beneficial Ownership");
(ii) A change in the constituency of the Board such that,
during any period of thirty-six (36) consecutive months, at least a
majority of the entire Board of Directors of the Company shall not
consist of Incumbent Directors. For purposes of this paragraph,
"Incumbent Directors" shall mean individuals who at the beginning of
such thirty-six (36) month period constitute the Board, unless the
election or nomination for election by the shareholders of the
Company of each such new director was approved by a vote of a
majority of the Incumbent Directors;
(iii) The Company enters into an agreement of merger,
consolidation, share exchange or similar transaction with any other
corporation other than a transaction which results in the Company's
voting stock immediately prior to the consummation of such
transaction continuing to represent (either by remaining outstanding
or by being converted into voting stock of the surviving entity) at
least two-thirds (2/3rds) of the combined voting power of the
Company's or such surviving entity's outstanding voting stock
immediately after such transaction; or
(iv) The Board approves a plan of liquidation or dissolution
of the Company or an agreement for the sale or disposition by the
Company (in one transaction or a series of transactions) of all or
substantially all of the Company's assets.
6. Employee Benefits.
(a) Throughout his employment during the Term, the Company shall
provide the Executive and all of his dependents with group medical and dental
insurance in amounts of coverage available to senior executives of the Company
with employee payment obligations on the same terms as such other senior
executives. However, if the Executive does not meet the requirements of the
Company's insurance underwriters, which requirements shall be uniformly
applicable to all of the Company's senior executive personnel, the Company shall
not provide the Executive with such insurance but, in lieu thereof, the Company
shall pay to the Executive the amounts it would otherwise have paid for the
insurance premiums on the Executive's behalf had the Executive met such
requirements.
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(b) The Executive shall be entitled to four (4) weeks paid vacation
for each twelve (12) consecutive-month period occurring during the Term, which
vacation shall be taken by the Executive in accordance with the reasonable
business requirements of the Company. Two (2) weeks of vacation time per each
twelve (12) consecutive-month period may be carried over from one period to the
next. The Executive's vacation shall accrue at the rate of one (1) week per
calendar quarter during the Term. The Executive shall be entitled to payment for
any accrued, but unused vacation, upon the termination of his employment with
the Company; provided that in no event shall the amount of such payment exceed
payment for six (6) weeks of accrued, but unused, vacation.
(c) Throughout the Term, the Executive shall be entitled to
participate in all welfare benefit and tax-qualified and nonqualified retirement
plans maintained by the Company, to the extent that such participation is made
available to other senior executives of the Company, and he shall also be
entitled to all other perquisites and pension, welfare benefits and retirement
benefits which are made available to any senior officer of the Company. In
addition, subject to the Executive's ability to satisfy any reasonably
applicable medical requirements, throughout the Term, solely at its own expense,
the Company shall pay for a Five Million Dollar ($5,000,000.00) term life
insurance policy on the Executive's life (the Executive shall determine the
beneficiary/beneficiaries under such coverage and the Executive's insurance
trust shall be the owner of such policy at all times) and long-term disability
coverage for the Executive providing at least 66 2/3% of salary until age 65
that is non-cancelable and guaranteed renewable. Further, as of the first day of
the Term, the Company shall establish a non-qualified retirement plan for the
benefit of the Executive, the terms of which shall be mutually agreed upon by
the Executive and the Company, under which the Executive shall accrue a
retirement benefit throughout the Term. The Executive's eligibility for,
participation in, and the terms and conditions of such plans shall be set forth
in separate official plan documents, the terms and conditions of which shall
exclusively govern.
(d) Throughout the Term, the Executive shall be entitled to prompt
reimbursement for his expenses incurred in the performance of his employment for
the Company under this Agreement.
(e) During the Term, the Executive shall be entitled to
reimbursement for an annual executive health assessment of one (1) to three (3)
days by a provider of his choice; provided, however, that in no event shall
reimbursement under this paragraph exceed Five Thousand Dollars and No Cents
($5,000.00) per annum, without prior written approval from the Compensation
Committee.
7. Termination. Notwithstanding any other provision in this Agreement,
during the Term:
(a) Death. If the Executive dies, this Agreement shall automatically
terminate as of the date of the Executive's death.
(b) Disability. If the Executive is unable to perform his duties
hereunder as a result of any physical or mental disability (i) which continues
for one hundred and eighty (180)
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consecutive days or (ii) for two hundred and forty-five (245) days in any three
hundred and sixty-five (365) consecutive-day period, then the Company may
terminate this Agreement upon thirty (30) days' written notice to the Executive,
provided that the Executive's Base Salary and Bonus shall continue to accrue
ratably and be payable for ninety (90) days after the date of the Executive's
termination. Any bonus paid to the Executive under this Paragraph shall be
prorated based upon Executive's active duty with the Company and conditioned on
the attainment of the quantitive objectives established by the Compensation
Committee in accordance with Paragraph 5(b).
(c) Termination by the Company for Cause. The Company may by action
of the Board (of which action the Executive shall have not less than fifteen
(15) days' prior written notice and at which Board meeting the Executive shall
be entitled to be heard), terminate the Executive's employment with the Company
for cause. Termination "for cause" shall mean termination by the Company upon
written notification to the Executive on account of one or more of the following
reasons:
(i) The Executive's conviction by a court of competent
jurisdiction in the United States of a felony or a crime (including
a nolo contendere plea) including, in the good faith determination
of the Company fraud, dishonesty or moral turpitude;
(ii) The Executive's willful refusal to perform his lawful
duties under this Agreement or his willful misconduct with respect
to such duties, after prior written notice to the Executive of the
particular details thereof and a period of thirty (30) days has
elapsed for the Executive to reasonably correct such refusal or
misconduct, and the Executive's failure to reasonably cure such
refusal or misconduct by the end of such period, provided that no
such cure period shall apply if the Board reasonably determines in
good faith that such refusal or misconduct is not susceptible to
reasonable cure, and provided further that if any such refusal or
misconduct is determined by the Board in good faith to not be
susceptible to reasonable cure within such thirty (30) day period,
such period shall be extended for not more than one hundred and
eighty (180) additional days provided that during such period the
Executive diligently prosecutes such reasonable cure; or
(iii) The Executive's breach of the covenants set forth in
Paragraphs 8, 9 and 10 of this Agreement.
(d) In addition to any other payments and continued benefits
pursuant to Paragraph 7(e), upon the Executive's resignation or upon either of
the terminations identified in Paragraphs 7(a) or (b) above, the Executive or
his estate shall be entitled to receive his Base Salary, a pro rata portion of
any Bonus for which he is eligible under Paragraph 5(b) based upon the
Executive's performance of his objectives through the date of his resignation or
termination and the reimbursement of all of his incurred but unreimbursed
reasonable business expenses as provided under Paragraph 6(d), in each case to
the date of the Executive's resignation or termination. Upon the Executive's
termination "for cause" pursuant to Paragraph 7(c) above, the
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Executive shall be entitled to receive his Base Salary and reimbursement of all
incurred and unreimbursed expenses as provided under Paragraph 6(d), in each
case to the date of the Executive's termination. In the event that Executive is
terminated "for cause" pursuant to Paragraph 7(c) above, Executive shall not be
entitled to receive any Bonus under Paragraph 5(b) (on a pro rata or other
basis).
(e) (i) The Company may terminate the Executive's employment under
this Agreement without cause at any time, provided that, in such case, or
should the Term end without the Company tendering to the Executive a new
employment agreement at least comparable in the aggregate in its terms to
this Agreement to be effective within a reasonable period of time
following the end of the Term, or should the Executive terminate his
employment upon thirty (30) days notice at any time after the six (6)
month anniversary of a Change of Control, the Company shall (A) pay the
Executive an amount equal to (I) his then Base Salary for the greater of
(a) twenty-four (24) months (thirty-six (36) months if the Executive
terminates his employment upon thirty (30) days notice at any time after
the six (6) month anniversary of a Change of Control), or (b) the number
of months then remaining in the then Term, and (II) two hundred percent
(200%) (three hundred percent (300%) if the Executive terminates his
employment upon thirty (30) days notice at any time after the six (6)
month anniversary of a Change of Control) of the amount of the Executive's
then Bonus Target, (B) continue to maintain the Executive's (and as
applicable, his dependents') medical benefits, dental benefits, life
insurance, long-term disability insurance and non-qualified retirement
plan benefit accruals for the greater of (I) the remainder of the then
Term, or (II) for twenty-four (24) months (thirty-six (36) months if the
Executive terminates his employment upon 30 day's notice at any time after
the six month anniversary of a Change of Control), or in the event that
the Company's underwriting or other plan terms do not permit this, to
provide the Executive in lieu thereof, with periodic payments over such
twenty-four (24) or thirty-six (36) month benefit, as applicable, with the
amounts it otherwise would have paid for the insurance premium or benefits
contributions had the Executive met such underwriting or other plan
requirements and (C) cause all of the Company stock options and all other
equity-based or equity-related compensation rights or entitlements
theretofore granted or awarded to the Executive, including but not limited
to those stock options referred to in Paragraph 5(c), to become fully
vested and exercisable, regardless of the otherwise applicable
vesting/exercise schedule(s) in connection therewith, and relieved of any
and all otherwise applicable transfer restrictions, lock-up or performance
requirements and other restrictions and/or contingencies of any kind. Any
payments made pursuant to this Paragraph 7(e)(i) shall be made in equal
periodic payments on a monthly basis. The severance benefit payable to the
Executive pursuant to clause (i)(A) of this Paragraph 7(e) (and clause
(i)(B) of this Paragraph 7 (e) to the extent that the applicable plan
underwriting or other plan terms do not permit post-employment benefit
coverage or accruals and payments to Executive in lieu of premiums or
benefit contributions are required by clause (i)(B) that may cause
Executive to incur additional income taxes and/or penalties under Section
409A of the Code), shall be paid on a monthly basis in substantially equal
installments, in the sole discretion of the Company, either (x) over the
period commencing no later than thirty (30) days following the date of the
termination of the Executive's employment hereunder and ending no later
than the date which the Company reasonably believes will preclude the
Executive from incurring additional income taxes and/or penalties pursuant
to Section 409A of the Code, or (y) over the
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period commencing no later than thirty (30) days following the date of the
termination of the Executive's employment hereunder and continuing for the
applicable period set forth in said clause (i)(A). In addition, the
Company shall pay to the Executive, after written notice thereof to the
Board, within a reasonable period of time of the Executive's becoming
liable for the payment of any tax, penalty and/or interest incurred by him
under Section 409A of the Code in connection with the payment of his
severance benefit under this Paragraph 7(e)(i) (including by reason of the
Executive's resignation pursuant to Paragraph 7(e)(ii)), the amount
necessary for the Executive to pay all such amounts incurred by him under
said Section 409A (the "409A Liability Payment"), plus all additional
federal, state and local income and payroll taxes incurred by the
Executive on account of such 409A Liability Payment to him by the Company
(the "Gross-Up Payment"). The determination of the existence and the
amount of the 409A Liability Payment and Gross-Up Payment shall be based
upon the opinion of tax counsel selected by the Company and reasonably
acceptable to the Executive, whose fees and expenses shall be paid by the
Company. The Executive and the Company shall each reasonably cooperate
with the other in connection with any administrative or judicial
proceedings concerning the existence or amount of any 409A Liability
Payment, and the Executive agrees to take all actions reasonably requested
by the Company relating to any Internal Revenue Service claim with respect
to any such 409A Liability Payment to allow the Company to timely contest
such claim, at the Company's sole discretion and expense.
(ii) For all purposes of this Agreement, including but not
limited to the Executive's entitlement to the payments and continued
benefits pursuant to Paragraph 7(e)(i), the Executive shall be
deemed to have been terminated by the Company without cause if (A)
the Company breaches any of its material obligations under this
Agreement, (B) the Company purports to terminate this Agreement
prior to the end of the Term other than "for cause" pursuant to
Paragraph 7(c), (C) without the Executive's prior written consent,
the Company relocates the Executive's regular office location by
more than 50 miles from its location as of the date hereof, or (D)
the Company assigns duties to the Executive which are not consistent
with his office set forth in Paragraph 1 or requires him to report
to any person or entity other than the Board, but in each case only
if within ninety (90) days after the Executive first has actual
knowledge of the occurrence of such action or event, the Executive
gives notice to the Company of his intention to terminate his
employment hereunder, the Company does not revoke or reasonably cure
any such action or event within thirty (30) days after the date of
such notice, and the Executive resigns his employment within thirty
(30) days thereafter.
(f) In order to receive the benefits pursuant to Paragraph 7(e)(i),
the Executive shall be required to execute a separation agreement and release
substantially similar to the separation agreement and release attached hereto as
Exhibit "A" upon his separation from employment with the Company.
8. Confidentiality Agreement and Ownership of Information.
(a) Executive agrees that during the course of employment with the
Company, Executive has and will come into contact with and have access to
various forms of Confidential Information and Trade Secrets, which are the
property of the Company. This information relates both to the Company, its
customers and its employees. Such Confidential Information and Trade
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Secrets include, but are not limited to: (i) financial and business information,
such as information with respect to costs, commissions, fees, profits, sales,
markets, mailing lists, strategies and plans for future business, new business,
product or other development, potential acquisitions or divestitures, and new
marketing ideas; (ii) product and technical information, such as product
formulations, new and innovative product ideas, methods, procedures, devices,
machines, equipment, data processing programs, software, software codes,
computer models, and research and development projects; (iii) marketing
information, such as the identity of the Company's customers, distributors and
suppliers and their names and addresses, the names of representatives of the
Company's customers, distributors or suppliers responsible for entering into
contracts with the Company, the amounts paid by such customers to the Company,
specific customer needs and requirements, and leads and referrals to prospective
customers; and (iv) personnel information, such as the identity and number of
the Company's employees, their salaries, bonuses, benefits, skills,
qualifications, and abilities. Executive acknowledges and agrees that the
Confidential Information and Trade Secrets are not generally known or available
to the general public, but have been developed, compiled or acquired by the
Company at its great effort and expense. Confidential Information and Trade
Secrets can be in any form: oral, written or machine readable, including
electronic files.
(b) During the Term and for as long as such information shall remain
Confidential Information or Trade Secrets of the Company (except, during the
course of his employment with the Company, if in furtherance of the Company's
business):
(i) The Executive will not disclose to any person or entity,
without the Company's prior consent, any Confidential Information or
Trade Secrets of the Company, whether prepared by him or others.
(ii) The Executive will not remove Confidential Information or
Trade Secrets of the Company from the premises of the Company
without the prior written consent of the Company.
(c) (i) Upon his resignation or the termination of his
employment with the Company for whatever reason, with or
without cause, or at any other time the Company so requests,
the Executive will promptly deliver to the Company all
originals and copies (whether in note, memo or other document
form or on video, audio or computer tapes or discs or
otherwise) of (A) Confidential Information or Trade Secrets of
the Company that is in his possession, custody or control,
whether prepared by him or others, and (B) all records,
designs, patents, plans, manuals, memoranda, lists and other
property of the Company delivered to the Executive by or on
behalf of the Company or by its customers, and all records
compiled by the Executive which pertain to the business of the
Company, whether or not confidential. All such material shall
be and remain the property of the Company and shall be subject
at all times to its discretion and control.
(ii) Information shall not be deemed Confidential Information
or Trade Secrets if:
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(A) such information was available to the public prior
to disclosure thereof by the Executive,
(B) such information shall, other than by an act or
omission on the Executive's part, be or become available to
the public or lawfully made available by a third party to the
public without restrictions as to disclosure;
(C) such information is approved for disclosure to the
public by prior written consent from the Board, and the terms
of any said written consent shall govern its disclosure; or
(D) such information was already in the lawful
possession of the Executive prior to his receipt of such
information from the Company.
(iii) Notwithstanding the foregoing, Confidential or Trade
Secret information of the Company may be disclosed where required by
law or order of a court of competent jurisdiction, provided that, to
the extent reasonably practicable, the Executive first gives to the
Board reasonable prior notice of such disclosure and affords the
Company, to the extent reasonably practicable, the reasonable
opportunity for the Company to obtain protective or similar orders,
where available.
9. Non-Competition Provision.
(a) Executive acknowledges and agrees that the Company is engaged in
a highly competitive business and that by virtue of Executive's position and
responsibilities with the Company and Executive's access to the Confidential
Information and Trade Secrets, engaging in any business which is directly
competitive with the Company will cause it great and irreparable harm.
(b) Accordingly, Executive covenants and agrees that so long as
Executive is employed by the Company and for a period of twelve (12) months
after such employment is terminated, whether voluntarily or involuntarily,
Executive will not, without the express written consent of the Board, directly
or indirectly, own, manage, operate or control, or be employed in any capacity
similar to the position(s) held by Executive with the Company, by any company or
other for-profit entity engaged in the business of content management and
publishing systems, editorial, abstracting, imaging, digitization, data
conversion and XML services or any other business competitive with the Company's
business at the time of Executive separation from employment. In recognition
that the Company's business includes the sale of its products and services
throughout the world, this restriction shall apply on a worldwide basis. The
foregoing shall not prohibit Executive from owning not in excess of five percent
(5%) of the outstanding stock of any company, which is a reporting company under
the Securities Exchange Act of 1934.
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10. Non Interference Provisions.
(a) While employed by the Company and for a period of twelve (12)
months following the Executive's termination or resignation from employment with
the Company for any reason, the Executive will not, without the prior written
consent of the Board, directly or indirectly, solicit, divert or appropriate or
attempt to solicit, divert or appropriate any customers or clients of the
Company who or which were customers or clients of the Company at the time of the
termination of the Executive's employment from the Company and with whom the
Executive had contact during his employment with the Company and/or about whom
the Executive possesses Confidential or Trade Secret information, for purposes
of the Executive's offering to such customers or clients of the Company products
or services which are directly competitive to the products and services offered
by the Company as of the date of the Executive's termination or resignation from
employment with the Company for any reason.
(b) While employed by the Company and for a period of twelve (12)
months following the Executive's termination or resignation from employment with
the Company for any reason, the Executive will not, without the prior written
consent of the Board, whether as an owner, partner, employee, consultant,
broker, contractor or otherwise, and whether personally or through other
persons, hire as an employee or retain the services of any employee or other
person with whom the Executive had contact during his employment with the
Company about whom the Executive possesses Confidential Information and/or Trade
Secrets as a result of the Executive's employment with the Company; provided,
however, that the foregoing prohibition shall specifically not apply to the
Executive's executive assistant(s).
(c) The foregoing shall not prohibit the Executive from owning not
in excess of five percent (5%) of the outstanding stock of any company which is
a reporting company under the Securities Act of 1934.
11. Enforcement.
(a) Since monetary damages may be inadequate and the Company may be
irreparably harmed if the provisions of Paragraphs 8, 9, 10, and 12 are not
specifically enforced, the Company shall be entitled, among other remedies, to
seek an injunction from a court of competent jurisdiction (without the necessity
of posting a bond or other security) restraining any violation of either
Paragraphs 8, 9, 10 or 12 by the Executive and any person or entity to whom
Executive provides or proposes to provide any services or information in
violation of such Paragraphs.
(b) If any provision contained in Paragraphs 8, 9, 10 or 12 is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained herein. The courts enforcing Paragraphs 8, 9, 10 or 12 shall be
entitled to modify the duration and scope of any restriction contained herein to
the extent such restriction would otherwise be unenforceable, and such
restriction as modified shall be enforced.
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12. Inventions.
(a) The Executive shall disclose promptly to the Company any and all
inventions, improvements and valuable discoveries, whether patentable or not,
which are conceived or made by the Executive solely or jointly with another
during his employment for the Company and which are related to the business or
activities of the Company or which the Executive conceives during and as a
direct result of his employment by the Company, and the Executive hereby assigns
and agrees to assign all his interests therein to the Company or its nominee.
Whenever reasonably requested to do so by the Company, the Executive shall
execute any and all applications, assignments or other instruments that the
Company shall deem necessary to apply for and obtain Letters Patent of the
United States or any foreign country or to otherwise protect the Company's
interest therein.
(b) Executive further covenants and agrees that the Company shall be
entitled to shop rights with respect to any invention and development conceived
or made by Executive during the period of his employment by the Company that is
not related in any manner to the business of the Company but which was conceived
or made on the Company's time or with the use of the Company's facilities or
materials.
(c) Executive further covenants and agrees that it shall be
conclusively presumed as against Executive that the following shall belong to
the Company: (i) any invention and development described in a patent service
mark, trademark or copyright application or disclosed in any manner to a third
person; and (ii) any computer program, modification of any computer program, or
systems technique for processing data conceived or made by Executive during the
period of his employment by the Company which is disclosed, used or described by
Executive or any person with whom Executive has any business, financial or
confidential relationship within one (1) year after leaving the employ of the
Company.
13. Use of General Abilities. Nothing contained in this Agreement shall
restrict the Executive after the termination or resignation from his employment
under this Agreement from using his general business, organizational and
financial abilities, and the exertion of his efforts, in the prosecution and
development of any business, so long as the specific non-compete and other
provisions of this Agreement are not thereby violated.
14. Excise Tax Gross-Up Payment. If any payment to the Executive by the
Company, whether or not under this Agreement ("Payment"), becomes subject to the
tax (the "Excise Tax") imposed by Section 4999 of the Code, the Company shall,
as soon as reasonably practicable thereafter after written notice thereof to the
Board, make an additional cash payment to the Executive (the "Gross-Up
Payment"). The Gross-up Payment shall equal the amount, if any, needed to ensure
that the net Payments (including the Gross-up Payment) actually received by
Executive after the imposition of federal and state income and excise taxes
(including any interest or penalties imposed by the Internal Revenue Service),
is equal to the amount that Executive would have netted after the imposition of
federal and state income taxes had the Payments not been subject to the taxes
imposed by Section 4999. The determination of whether any Payment is subject to
the Excise Tax shall be based upon the opinion of tax counsel selected by the
Company and reasonably acceptable to the Executive, whose fees and expenses
shall be
11
paid by the Company. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal, state and local income
taxes at the highest marginal rate of income taxation applicable to any
individual residing in the jurisdiction in which the Executive resides in the
calendar year in which the Gross-Up Payment is to be made. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of the Executive's employment
hereunder, the Executive shall repay to the Company, at the time that the amount
of such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income tax imposed on the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income tax imposed on the Gross-Up Payment being repaid
by the Executive to the extent that such repayment results in a reduction in
Excise Tax and/or a federal, state and local income tax deduction) plus interest
on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the termination of the Executive's
employment hereunder (including by reason of any payment the existence or amount
of which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) at the time that the amount of such excess is finally determined. The
Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to any Payment, and
the Executive agrees to take all actions reasonably requested by the Company
relating to any Internal Revenue Service claim with respect to any such Excise
Tax liability to allow the Company to timely contest such claim, at the
Company's sole discretion and expense.
15. General Provisions.
(a) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered (i) on the date personally delivered, or (ii) one day after
properly sent by Federal Express or other reasonable overnight courier service,
addressed to the respective parties at the following addresses:
To the Company:
Amy Agress, Esq.
General Counsel
Innodata Isogen, Inc.
Three University Plaza
Hackensack, NJ 07601
To the Executive:
Jack S. Abuhoff
Innodata Isogen, Inc.
Three University Plaza
12
Hackensack, NJ 07601
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto as provided above. A copy
of each notice to the Executive shall be forwarded to Dana Scott Fried, Esq.,
Brown Raysman Millstein Felder & Steiner LLP, 900 Third Avenue, New York, NY
10022. A copy of each notice to the Company shall be forwarded to John A. Snyder
II, Esq., Jackson Lewis LLP, 59 Maiden Lane, New York, NY 10038. All such copies
shall be given in the manner provided for notices in this Paragraph 15(a).
(b) Severability. If any provision contained in this Agreement shall
be determined to be void, illegal or unenforceable, in whole or in part, then
the other provisions contained herein shall remain in full force and effect as
if the provision which was determined to be void, illegal, or unenforceable had
not been contained herein.
(c) Waiver, Modification and Integration. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach of any party. This Agreement
contains the entire agreement of the parties concerning employment and
supersedes any and all other inconsistent agreements, either oral or in writing,
between the parties hereto with respect to the employment of the Executive by
the Company, except for any official employee benefit plan documents between the
parties, the terms and conditions of which shall be controlling. This Agreement
may not be modified, altered or amended except by written agreement of both of
the parties hereto.
(d) Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Company and its successors and permitted assigns,
and upon the Executive, his heirs and his executors and administrators. The
Company shall not be entitled to assign the Executive's duties hereunder without
the other's prior written consent, which consent shall not be unreasonably
withheld. The Executive's duties under this Agreement shall not be assigned by
the Executive.
(e) Jurisdiction, Etc. All disputes hereunder shall be exclusively
determined and resolved by binding arbitration conducted pursuant to the rules
of the American Arbitration Association in New York City. Service of process
shall be effective when forwarded in the manner provided for notices in
Paragraph 15(a). Trial by jury is hereby waived by both of the parties to this
Agreement. The prevailing party in any dispute shall be entitled to recover
reasonable attorneys' fees and costs from the other.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey, without regard to its
conflicts of law provisions.
(g) Counsel Fees. The Company shall pay, or reimburse to the
Executive, the fees and expenses of personal counsel for their professional
services rendered to the Executive in
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preparing this Agreement and any other agreement or benefit plan entered into or
adopted in connection therewith. However, in no event shall reimbursement under
this paragraph exceed Fifteen Thousand Dollars and No Cents ($15,000.00),
without the prior approval of the Compensation Committee. However, the Company
will not agree to pay, or reimburse to the Executive, the fees and expenses of
his personal counsel for professional services rendered in connection with
enforcement of this Agreement (or any other agreement or benefit plan entered
into or adopted in connection therewith), except as otherwise provided by
Paragraph 15(e).
(h) Indemnification. The Company shall indemnify the Executive to
the full extent permitted by applicable Delaware law for all liabilities
incurred by the Executive in connection with his execution of his duties under
this Agreement. Further, the Company shall obtain and maintain in full force and
effect directors and officers' liability insurance from established and
reasonable insurers in reasonable amounts as the Board shall determine and, in
all such policies, the Executive shall be named as an insured party.
(i) Survival. The obligations of the parties hereto under Paragraphs
7, 8, 9, 10, 11, 12, 14 and 15 of this Agreement shall survive the termination
of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
INNODATA ISOGEN, INC.
By: /s/ Stephen Agress
--------------------------------
Name: Stephen Agress
Title: Vice President- Finance
JACK S. ABUHOFF
/s/ Jack S. Abuhoff
-------------------
15
AGREEMENT AND GENERAL RELEASE
INNODATA ISOGEN, INC. ("Employer") [Address] and Jack Abuhoff [Address],
his heirs, executors, administrators, successors, and assigns (collectively
referred to throughout this Agreement and General Release as "Executive"), agree
that:
1. Last Day of Employment. Executive's last day of employment with
Employer is/was ___________________ (the "Termination Date"). Without regard to
whether Executive executes this Agreement and General Release, in accordance
with the terms of the Employment Agreement between Executive and Employer dated
as of ________________ (the "Employment Agreement"), Executive shall be paid, or
shall have been paid, by no later than the next regularly-scheduled pay period
following the Termination Date, all Base Salary (as defined in the Employment
Agreement) accrued through the Termination Date, accrued but unused vacation
days through the Termination Date and business expenses incurred through the
Termination Date. In accordance with the terms of the Employment Agreement,
Executive shall be paid, or shall have been paid all Bonus (as defined in the
Employment Agreement) accrued through the Termination Date, in accordance with
the general policies and procedures for payment of incentive compensation to
senior executive personnel of Employer, without regard to whether Executive
executes this Agreement and General Release. [May be modified to reflect any
additional benefits or monies owed to Executive as of the Termination Date.]
2. Consideration. In accordance with the terms of the Employment Agreement
and as consideration for this Agreement and General Release and Executive's
compliance with Paragraphs 8, 9, 10 and 12 of the Employment Agreement, Employer
agrees:
a. to provide Executive with the monies and benefits set forth in
Section 7(e)(i) of the Employment Agreement within the time period required by
Paragraph 7(e)(i) after receiving the letter from Executive in the form attached
hereto as Exhibit "A" as follows; and
b. [other consideration, if any].
3. No Consideration Absent Execution of this Agreement. Executive
understands and agrees that he would not receive the monies and/or benefits
specified in Section 2 above, except for his execution of this Agreement and
General Release and the fulfillment of the promises contained herein and in
Paragraphs 8, 9, 10 and 12 of the Employment Agreement. Employer reserves the
right to commence litigation to enforce Executive's compliance with Paragraphs
8, 9, 10 and 12 of the Employment Agreement, in addition to Executive's
compliance with the promises set forth in this Agreement and General Release.
4. General Release of Claims. Executive knowingly and voluntarily releases
and forever discharges, to the full extent permitted by law, Employer, its
parent corporation, affiliates, subsidiaries, divisions, predecessors,
successors and assigns and the current and former employees, officers, directors
and agents thereof, individually and in their corporate capacities, and their
employee benefit plans and programs and their administrators and fiduciaries
(collectively referred to throughout the remainder of this Agreement and General
Release as "Releasees"), of and from any and all claims, known and unknown,
asserted and unasserted, Executive has or may have against Releasees as of the
date of execution of this Agreement and General Release arising out of his
employment or the termination of his employment with Employer, including, but
not limited to, any alleged violation of:
o Title VII of the Civil Rights Act of 1964, as amended;
o The Civil Rights Act of 1991;
o Sections 1981 through 1988 of Title 42 of the United States Code, as
amended;
o The Employee Retirement Income Security Act of 1974, as amended;
o The Immigration Reform and Control Act, as amended;
o The Americans with Disabilities Act of 1990, as amended;
o The Age Discrimination in Employment Act of 1967, as amended;
o The Workers Adjustment and Retraining Notification Act, as amended;
o The Occupational Safety and Health Act, as amended;
o The Sarbanes-Oxley Act of 2002;
o the New York State Constitution and amendments thereto;
o the New York State Human Rights Law;
o the New York Executive Law, Art. 15 ss. 290 et seq.;
o the New York Minimum Wage Law;
o the New York Labor Law, Art. 19, ss. 657 et seq.;
o the New York Wage and Hour Laws and the New York Wage Payment Laws;
o the New York Labor Laws, Art. 6, ss.ss. 190-199 et seq.;
o the New York City Human Rights Law;
o the New York City Admin. Code ss. 8-101 et seq.;
o the New York City Civil Rights Act;
2
o the New York Non-Discrimination for Legal Activities Law;
o the New York Labor Law ss. 201-d;
o the New York Whistleblower Law, Labor Law ss. 740, et seq.;
o the New York Occupational Safety and Health Laws;
o the New York Workers' Compensation Laws;
o New Jersey Law Against Discrimination - N.J. Rev. Stat. ss.10:5-1 et
seq.;
o New Jersey Statutory Provision Regarding Retaliation/Discrimination
for Filing a Workers' Compensation Claim - N.J. Rev. Stat.
ss.34:15-39.1 et seq.;
o New Jersey Family Leave Act - N.J. Rev. Stat. ss.34:11B-1 et seq.;
o New Jersey Smokers' Rights Law - N.J. Rev. Stat. ss.34:6B-1 et seq.;
o New Jersey Equal Pay Act - N.J. Rev. Stat. ss.34:11-56.1 et seq.;
o New Jersey Genetic Privacy Act - N.J. Rev. Stat. Title 10, Ch. 5,
ss.10:5-43 et seq.;
o New Jersey Conscientious Employee Protection Act (Whistleblower
Protection) - N.J. Stat. Ann. ss.34:19-3 et seq.;
o The New Jersey Wage Payment and Work Hour Laws;
o The New Jersey Public Employees' Occupational Safety and Health Act-
N.J. Stat. Ann. ss.34:6A-25 et seq.;
o New Jersey Fair Credit Reporting Act;
o New Jersey laws regarding Political Activities of Employees, Lie
Detector Tests, Jury Duty, Employment Protection, and
Discrimination;
o Any other federal, state or local civil or human rights law or any
other local, state or federal law, regulation or ordinance;
o Any public policy, contract, tort, or common law; or
o Any claim for costs, fees, or other expenses including attorneys'
fees.
Nothing herein shall prevent Employee from seeking to enforce the terms of the
Employment Agreement or this Agreement and General Release or from seeking to
obtain benefits to which he is lawfully entitled under the terms of any Employer
benefit plan of which he is a participant. This Agreement and General Release
shall not constitute a waiver of rights to the extent such waiver is prohibited
by law.
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[If base salary, bonus, vacation pay, expense reimbursement and workplace
injury/leave issues are not in dispute, Innodata Isogen will seek affirmations
from Executive relating to these issues.]
5. Non-Disparagement.
(a) Executive agrees not to defame, disparage or demean Employer, its
officers and directors, in any manner whatsoever, provided that nothing
contained herein shall prevent Executive from providing truthful information
about the Company in connection with any legal proceeding or to the extent
compelled to do so by law.
(b) Employer's officers and directors agree not to defame, disparage or
demean Executive in any manner whatsoever, provided that nothing contained
herein shall prevent Employer from providing truthful information about
Executive in connection with any legal proceeding or to the extent compelled to
do so by law.
6. Confidentiality. Executive agrees not to disclose any information
concerning the consideration being paid to him under Section 2 hereof, except to
his immediate family members, tax advisor, financial advisor and attorneys.
7. Governing Law and Interpretation. This Agreement and General Release
shall be governed and conformed in accordance with the laws of the state in
which Executive was employed at the time of his last day of employment without
regard to its conflict of laws provision. In the event the Executive or Employer
breaches any provision of this Agreement and General Release, Executive and
Employer affirm that either may institute an action to specifically enforce any
term or terms of this Agreement and General Release. Should any provision of
this Agreement and General Release be declared illegal or unenforceable by any
court of competent jurisdiction and cannot be modified to be enforceable,
excluding the general release language, such provision shall immediately become
null and void, leaving the remainder of this Agreement and General Release in
full force and effect.
8. Nonadmission of Wrongdoing. The parties agree that neither this
Agreement and General Release nor the furnishing of the consideration for this
Release shall be deemed or construed at anytime for any purpose as an admission
by either party of any liability or unlawful conduct of any kind.
9. Amendment. This Agreement and General Release may not be modified,
altered or changed except upon express written consent of both parties wherein
specific reference is made to this Agreement and General Release.
4
10. Revocation. Executive may revoke this Agreement and General Release
for a period of seven (7) calendar days following the day he executes this
Agreement and General Release. Any revocation within this period must be
submitted, in writing, to ____________ [Identify Company representative] and
state, "I hereby revoke my acceptance of our Agreement and General Release." The
revocation must be personally delivered to _________________ [Identify Company
representative] or his designee, or mailed to ____________________ [Identify
Company representative] and postmarked within seven (7) calendar days of
execution of this Agreement and General Release. This Agreement and General
Release shall not become effective or enforceable until the revocation period
has expired and a letter in the form attached as Exhibit "A," dated and signed
no sooner than eight (8) days after Executive dates and signs this Agreement and
General Release, is received by [Identify Company representative.]. If the last
day of the revocation period is a Saturday, Sunday, or legal holiday in the
state in which Executive was employed at the time of his last day of employment,
then the revocation period shall not expire until the next following day which
is not a Saturday, Sunday, or legal holiday.
11. Entire Agreement. This Agreement and General Release sets forth the
entire agreement between the parties hereto with regard to the subject matter
hereof. Notwithstanding this Section, Paragraphs 8, 9, 10, 11, 12, 14 and 15 of
the Employment Agreement, as well as Paragraph 7 to the extent that payments to
Executive have not been made in accordance with Section 2 of this Agreement and
General Release, shall remain in full force and effect pursuant to Paragraph
15(i) of the Employment Agreement. Executive acknowledges that he has not relied
on any representations, promises, or agreements of any kind made to him in
connection with his decision to accept this Agreement and General Release,
except for those set forth in the Employment Agreement and this Agreement and
General Release.
12. Facsimile/Photocopy. A signed facsimile or photocopy of this Agreement
and General Release shall have the same force and effect as an original.
EXECUTIVE IS HEREBY ADVISED THAT HE HAS UP TO TWENTY-ONE (21) CALENDAR
DAYS TO REVIEW THIS AGREEMENT AND GENERAL RELEASE AND TO CONSULT WITH AN
ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE.
EXECUTIVE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO
THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE
ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD.
HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL
THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH "2" ABOVE,
EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS
AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS
HE HAS OR MIGHT HAVE AGAINST RELEASEES.
5
IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed
this Agreement and General Release as of the date set forth below:
EXECUTIVE INNODATA ISOGEN, INC.
- ------------------------------------ By:
JACK ABUHOFF ---------------------------------
[Name and Title of Person Signing]
Date: Date:
----------------------------- -------------------------------
6
Jack Abuhoff
[address]
Re: Agreement and General Release
Dear Mr. Abuhoff:
This letter confirms that on ________________ [date], I personally
delivered to you the enclosed Agreement and General Release. You have until
_______________ [21 days after receipt by employee. Add extra days if the 21st
day ends on a non-business day] to consider this Agreement and General Release,
in which you waive important rights, including those under the Age
Discrimination in Employment Act of 1967. To this end, we advise you to consult
with an attorney of your choosing prior to executing this Agreement and General
Release.
Very truly yours,
INNODATA ISOGEN, INC.
-------------------------
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EXHIBIT A
[Name]
Innodata Isogen, Inc.
[Address]
Re: Agreement and General Release
Dear _________________:
On ______________ [date] I executed an Agreement and General Release
between Innodata Isogen, Inc. and me. I was advised by Innodata Isogen, Inc., in
writing, to consult with an attorney of my choosing, prior to executing this
Agreement and General Release.
More than seven (7) calendar days have elapsed since I executed the
above-mentioned Agreement and General Release. I have at no time revoked my
acceptance or execution of that Agreement and General Release.
Very truly yours,
Jack Abuhoff
8