Exhibit 10.16
EMPLOYMENT AGREEMENT
This employment agreement ("AGREEMENT") is dated October 31, 2005, and is
between SENDTEC ACQUISITION CORP., a Delaware corporation (the "COMPANY"), and
Xxxx Xxxxx (the "EXECUTIVE").
RECITALS
The Company is engaged in the development, sales and support of online and
offline marketing services (the "BUSINESS"). The Company is purchasing
substantially all of the business and assets of SendTec, Inc. ("SENDTEC"). In
connection with this purchase (the "ACQUISITION"), the Company has offered
employment to certain key employees of SendTec, including the Executive.
The Executive has agreed to join the Company as one of its employees. Both
the Company and the Executive are in accord that the terms and conditions of
Executive's employment by the Company ought to be set forth in writing, and this
Agreement has been prepared for that purpose.
It is intended that this Agreement shall become immediately and
automatically effective upon consummation of the transactions contemplated in
connection with the Acquisition (the "CLOSING").
The parties hereto therefore agree as follows:
1. EMPLOYMENT.
a. The Company agrees to employ the Executive, and the Executive
agrees to be employed by the Company, in accordance with the terns and
conditions of this Agreement. The Executive shall devote all of his business
time, attention, and energies exclusively to the business of the Company and
shall not, while employed by the Company, be engaged in any other business
activity, whether or not such business activity is pursued for gain, profit or
other pecuniary advantage; provided, however, the Executive shall not be
prevented from (i) investing savings or other assets in such form or manner as
shall not require any services on the part of the Executive, nor, if approved in
advance in writing by the Company, from (ii) serving as a member of the Board of
Directors of other entities that do not compete with the Company, or (iii)
participating in professional, civic and governmental organizations provided
that the activities referenced in clauses (i), (ii) and (iii) above do not,
individually or in the aggregate, (A) interfere with the performance of
Executive's duties hereunder or (B) violate or conflict with the provisions of
Sections 11 and 12 hereof.
b. The Executive affirms and represents that he is under no
obligation to any former employer or other party that is in any way inconsistent
with, or that imposes any restriction upon, the Executive's acceptance of
employment hereunder with the Company, the employment of the Executive by the
Company, or the Executive's undertakings under this Agreement.
2. TERM OF THIS AGREEMENT. Unless earlier terminated as provided in this
Agreement, the term of this Agreement shall commence on the date hereof and
shall continue until the fifth anniversary hereof and thereafter may be renewed
for additional one-year terms (each a "TERM") unless written notice is given by
either party hereto to the other party of his or its desire not to renew this
Agreement at least 90 days prior to the end of the then current Term.
3. POSITION AND DUTIES. During the Term, the Executive shall serve as
President of the Company and in so doing, shall faithfully perform such duties
and responsibilities ordinarily associated with his position as the President
and the Board of Directors of the Company shall from time to time determine and
shall be subject to periodic performance evaluations and reviews by the Chief
Executive Officer and the Board of Directors. The Executive shall perform his
duties principally at the offices of the Company located in St. Petersburg,
Florida, or such other places as the Chief Executive Officer and Board of
Directors may reasonably determine, with such travel to such other locations as
the Chief Executive Officer and the Board of Directors may reasonably prescribe.
4. COMPENSATION.
a. SALARY. As compensation for the performance by the Executive of
the services to be performed by him hereunder, the Executive shall be paid an
annual salary of THREE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($325,000, such
amount, together with any increases thereto as may be determined from time to
time by the Board of Directors in its sole discretion, but subject to the
provisions of this Agreement, being hereinafter referred to as "SALARY"). Any
Salary payable hereunder shall be paid in regular intervals in accordance with
the Company's payroll practices in effect from time to time.
b. BONUS. The Company shall pay to the Executive such incentive
compensation and bonuses, if any, (i) as the Board of Directors in its absolute
discretion may determine to award the Executive, and (ii) to which the Executive
may become entitled pursuant to the terns of any incentive compensation or bonus
program, plan or agreement from time to time in effect and applicable to the
Executive.
5. STOCK OPTIONS. The Executive shall be eligible to participate in the
Company's stock option plans to the extent approved by the Board of Directors,
pursuant to the terms and conditions of such plans.
6. FRINGE BENEFITS. The Company shall provide the Executive with the
following fringe benefits as part of his compensation:
a. INSURANCE. The Executive and his dependents shall be provided
with all group insurance benefits, including disability insurance, as provided
to other senior executives of the Company in accordance with the provisions of
any such insurance policies as the same may be in effect from time to time.
b. VACATION, SICK DAYS AND PERSONAL DAYS. The Executive shall be
entitled to four weeks paid vacation per year and holidays in accordance with
Company policy. Vacation shall be taken at times when reasonably appropriate
given the Executive's responsibilities and consistent with the needs of the
Company. At termination, the Executive shall be entitled to compensation for all
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accrued but unused vacation days. In addition, the Company shall provide the
Executive with such paid sick leave and personal days as are provided from time
to time to other Company senior executives; provided, however, that in the event
of termination of employment, the Executive shall not be entitled to any
compensation for accrued, unused personal days and sick days.
c. REIMBURSEMENT OF BUSINESS EXPENSES. The Executive's reasonable
and necessary out-of-pocket business expenses incurred by the Executive in the
performance of his duties hereunder shall be reimbursed in accordance with
Company policy.
d. 401(K) PLAN. The Executive shall be eligible to participate in
the Company's 401(k) plan as available to other senior executives of the Company
in accordance with its terms and federal law.
e. OTHER COMPANY BENEFITS. During the Term, the Executive shall be
entitled to participate in each Company employee benefit plan to the same extent
that such employee benefit plan is generally available to other senior
executives of the Company.
7. INDEMNITY. The Executive shall be entitled to indemnification in all
instances in which the Executive is acting within the scope of his authority to
the fullest extent permitted by the Company's certificate of incorporation and
bylaws, and applicable law, from and against any damages or liabilities,
including reasonable attorney's fees; provided, however, that the Executive
shall not be entitled to indemnification for damages or liabilities which result
from or arise out of the Executive's willful misconduct or gross negligence.
8. DIRECTORS AND OFFICERS INSURANCE. During the Term, the Company agrees
to maintain directors and officers' insurance in an amount of at least
$3,000,000.
9. TERMINATION OF AGREEMENT.
a. RESIGNATION BY EXECUTIVE. The Executive may elect to terminate
this Agreement, and resign employment, with or without Good Reason, as that term
is defined below, by delivering sixty (60) days advance written notice of
reigna6on to the Company. Upon receipt of such notice, the Company may require
the Executive to work the sixty (60) days of the notice period, or at its
option, may wave some or all of the notice, and release the Executive prior to
the notice date. In the event of a resignation without Good Reason, the
Executive shall not be entitled to any payments, salary continuation, severance
or other benefits, except for: (i) his salary to the extent accrued and unpaid
through the Executive's termination date; (ii) payment for unused vacation days
to the extent accrued through the Executive's termination date; and (iii) any
reasonable business expenses incurred prior to termination, but not reimbursed
as of the date of termination, that are due and owing pursuant to the Company's
business expense reimbursement policy; and (iv) health insurance continuation
benefits under COBRA, at his own election and sole expense. In the event of a
resignation with Good Reason, the Executive shall be entitled to all of the
compensation and benefits paid in connection with a resignation without Good
Reason, and he shall receive, in addition, Severance Payments, as defined below.
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b. TERMINATION OF AGREEMENT BY THE COMPANY FOR GOOD CAUSE. The
Company may, immediately and unilaterally, terminate the Executive's employment
at any time during the Term for Good Cause, as defined below, through written
notice to the Executive. In the event of a termination for Good Cause, the
Executive shall not be entitled to any payments, salary continuation, severance
or other benefits, except for: (i) his salary to the extent accrued and unpaid
through the Executive's termination date; (ii) payment for unused vacation days
to the extent accrued through the Executive's termination date; and (iii) any
reasonable business expenses incurred prior to termination, but not reimbursed
as of the date of termination, that are due and owing pursuant to the Company's
business expense reimbursement policy; and (iv) health insurance continuation
benefits under COBRA, at his own election and sole expense. The Executive's
right to exercise a vested employee option shall terminate on the date of his
termination for Good Cause by the Company or his resignation without Good
Reason.
c. TERMINATION OF AGREEMENT BY THE COMPANY FOR REASONS OTHER THAN
GOOD CAUSE. The Company may terminate the Executive's employment under this
Agreement at any time during the Term without Good Cause by giving ten (10) days
advance written notice to the Executive of the Company's election to terminate.
During such ten (10) day period, the Executive agrees to be available on a
full-time basis in the benefit of the Company to assist the Company in making
the transition to a successor, among other things. In the event of a termination
without Good Cause, the Executive shall be entitled to all of the compensation
and benefits paid in connection with a termination for Good Cause, and he shall
receive, in addition, Severance Payments, as defined below.
d. TERMINATION BY DEATH OF THE EXECUTIVE. This Agreement shall be
terminated by the death of the Executive as of the date of death. In the event
of the death of the Executive, the Company's obligations hereunder shall
automatically cease and terminate; provided, however, that within thirty (30)
days of the Exclusive's death, the Company shall pay to the Executive's heirs or
personal representatives his accrued but unpaid salary, and compensation for any
unused accrued vacation, and any reasonable business expense reimbursement due
pursuant to Company policy.
e. DEFINITION OF GOOD CAUSE. The term "GOOD CAUSE," as used in this
Agreement shall mean:
(1) The Executive's inability to perform his duties hereunder
due to Physical or mental Disability (as below);
(2) The Executive's indictment for, conviction of, or the
entering of a plea of nolo contender with respect to, a felony;
(3) The Executive's abuse of illegal controlled substances;
(4) The Executive's as of moral turpitude or fraud, his
embezzlement of funds or other assets of the Companies (as hereinafter defined)
or his acceptance of a bribe or kickback;
(5) The failure, refusal or neglect of the Executive to render
services to the Company in accordance with his obligations under this Agreement,
or gross negligence of the Executive in the performance of such duties, which is
not cured within seven days after written notice of same to the Executive
identifying such failure, refusal or neglect of services in question;
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(6) Failure of the Executive to obey the reasonable and lawful
orders and policies of the Board of Directors that are consistent with the
provisions of this Agreement, which is not cured within seven days after written
notice of same to the Executive identifying such failure; or
(7) A material breach of any provision of this Agreement by
the Executive, which is not cured within seven days after written notice of same
to the Executive identifying such breach.
f. DEFINITION OF GOOD REASON. The term "GOOD REASON," as used in
this Agreement, shall mean:
(1) A material breach of this Agreement by the Company, which
is not cured within seven days after written notice of same to the Company
identifying such breach.
(2) Requiring the Executive to be principally based at any
office or location more than 50 miles from the office to which he was primarily
assigned at the time of execution of this Agreement;
(3) A termination of the Executive's employment by Executive
for any reason at all, or no reason, within six months of a change of control of
the Company (a "CHANGE OF CONTROL"). For the purposes of this Agreement, a
Change of Control shall be deemed to have occurred on the earliest of the
following: the date of (i) a merger or consolidation of the Company with or into
another unaffiliated corporation, in which the Company is not the continuing or
surviving corporation or pursuant to which any common shares of the Company
would be converted into cash, securities, or other property of another
corporation, other than a merger of the Company in which holders of Company
common shares immediately prior to the merger have the same proportionate
ownership of common shares of the surviving corporation immediately after the
merger, or (ii) a sale or other disposition of substantially all the assets of
the Company.
(4) A material change in the Business of the Company, without
the Executive s concurrence; or
(5) Any material adverse change in the Executive's position or
duties and responsibilities, including any failure to elect Executive as
President of the Company, reporting to the Chief Executive Officer of the
Company.
g. DEFINITION OF DISABILITY. The term "DISABILITY," as used in this
Agreement, shall mean the Executive's inability to perform his duties for a
period of 90 days or more, consecutive or non-consecutive, in any twelve-month
period, due to mental or physical disability or incapacity, as determined by a
physician selected by the Company and reasonably acceptable to the Executive or
to the Executive's legal representative, such agreement as to acceptability not
to be unreasonably withheld or delayed. Any refusal by the Executive to submit
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to a medical examination for the purpose of determining the existence of a
Disability shall constitute conclusive evidence of the Executive's Disability.
10. SEVERANCE. If the Company terminates this Agreement pursuant to
Section 9(c) without Good Cause, or if the Executive resigns pursuant to Section
9(a) for Good Reason, then the Company shall continue to pay the Executive his
Salary for a period of twelve months from the date of termination ("SEVERANCE
PERIOD") in regular intervals in accordance with the Company's payroll practices
in effect from time to time ("SEVERANCE PAYMENTS"). Severance Payments shall not
include any other compensation for fringe benefits which would have been
received by or granted to the Executive had this Agreement continued during the
Severance Period. Severance Payments shall be treated as Salary for tax
purposes, and taxes will be withheld from Severance Payments just as if it were
Salary.
11. RESTRICTIVE COVENANTS.
a. During the term of the Executive's employment with the Company
and for the one-year period following such employment, Executive shall not,
directly or indirectly:
(1) Solicit, hire, retain, induce or attempt to solicit, hire,
or retain or induce any employee or consultant of any of the Companies to leave
the employ or lessen the relationship between any of the Companies and any
employee or consultant thereof;
(2) call on or contact any supplier or customer of the
Companies or any agent of the Companies for the purpose of soliciting, diverting
or taking away or lessening any relationship with any such supplier, customer or
agent from the Companies;
(3) hire, engage, send any work to, place orders with, or in
any manner be associated or engage in any activity with any supplier,
contractor, subcontractor, distributor, customer, investor or business relation
of any of the Companies if such action by him have an adverse effect on the
business, assets, financial condition or prospects of any of the Companies, or
interfere with the relationship between any such person or entity of any of the
Companies;
(4) engage or participate in any business or line of business
that competes with the Business conducted by the Companies or under
consideration by the Companies or perform, provide or offer any products and/or
services of a kind or type developed, produced, marketed, sold, offered,
provided, performed or otherwise exploited by the Companies or engage in
business with, or provide advice or services to, any person or entity which
directly or indirectly competes with any of the Companies in the Business;
provided, however, that in the event the Company has committed a material breach
of this Agreement by failing to pay Salary due under the Agreement, or by
failing to pay Severance Payments under the Agreement, and where such breach has
not been cured by the Company within two weeks after written notice of same to
the Company, then the Executive shall be relieved of the obligations imposed by
this Section 11.
(5) engage in business with, or provide advice or services to,
any person or entity which directly or indirectly competes with the Business or
any other line of business of the Companies.
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b. In connection with the foregoing provisions of this Section 11,
the Executive represents that his experience, capabilities and circumstances are
such that such provisions will not prevent him from earning a livelihood. The
Executive further agrees that the limitations set forth in this Section 11
(including, without limitation, time limitations) constitute the "legitimate
business interests" of the Companies within the meaning of Florida Statutes
542.335 and are hereby conclusively agreed to be legally sufficient to support
such covenants. Such "legitimate business interests" include but are not
necessarily limited to trade secrets; valuable confidential business or
professional information that does not legally qualify as trade secrets;
substantial relationships with specific prospective or existing customers or
clients; customer or client good will associated with an ongoing business, by
way of trade name, trademark, service xxxx or "trade dress", in a specific
geographic location and a specific marketing or trade area; and extraordinary or
specialized training. It is further acknowledged and agreed that all such
restrictive covenants set forth above are reasonably necessary to protect the
legitimate business interests of the Companies and are not overbroad or
unreasonable. It is acknowledged and agreed that the Company is specifically
relying upon the foregoing statements in entering into this Employment
Agreement. It is understood that the covenants made by the Executive in this
Section 11 (and in Section 12 hereof) shall survive the expiration or
termination of this Agreement.
12. CONFIDENTIAL INFORMATION. The Executive hereby covenants, agrees and
acknowledges as follows:
a. The Executive has and will have access to and will participate in
the development of or be acquainted with confidential or proprietary information
and trade secrets related to the business of the Company and any present and
future subsidiaries or affiliates of the Company (collectively with the Company,
the "COMPANIES"), including but not limited to (i) customer lists; the identity,
lists or descriptions of any new customers, referral sources or organizations;
financial statements; cost reports or other financial information; contract
proposals or bidding information; business plans; training and operations
methods and manuals; personnel records; software programs; email databases;
reports and correspondence; and management systems policies or procedures,
including related forms and manuals; (ii) information pertaining to future
developments such as future marketing or acquisition plans or ideas, and
potential new business and (iii) all other tangible and intangible property that
are used in the business and operations of the Companies. The information and
trade secrets relating to the business of the Companies described hereinabove in
this paragraph (a) are hereinafter referred to collectively as the "CONFIDENTIAL
INFORMATION," provided that the term Confidential Information shall not include
any information (x) that is or becomes generally publicly available (other than
as a result of violation of this Agreement by the Executive or the violation of
an agreement of like tenor by any other person or entity) or (y) that the
Executive receives on a nonconfidential basis from a source (other than the
Companies or their representatives) that is not known by her to be bound by an
obligation of secrecy or confidentiality to any of the Companies.
b. The Executive shall not disclose, use or make known for his or
another's benefit any Confidential Information or use such Confidential
Information in any way, except as is in the best interests of the Companies in
the performance of the Executive's duties under this Agreement. The Executive
may disclose Confidential Information when required by a third party and
applicable law or judicial process, but only after providing (i) immediate
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notice to the Company at any third party's request for such information, which
notice shall include the Executive's intent with respect to such request, and
(ii) sufficient opportunity for the Company to challenge or limit the scope of
the disclosure on behalf of the Companies, the Executive or both.
c. Upon termination of his employment with the Company for any
reason, the Executive shall forthwith return to the Company all Confidential
Information in whatever form maintained (including, without limitation, computer
discs and other electronic media).
13. REMEDIES. The Executive acknowledges that a remedy at law for any
breach or threatened breach of the provisions of Sections 11 or 12 hereof would
be inadequate, that the Company would be irreparably injured by such breach and
that, therefore, the Company shall be entitled to injunctive relief in addition
to any other available rights and remedies in case of any such breach or
threatened breach, without the necessity of posting a bond or proving damages.
14. SEVERABILITY. In the event that any court of competent jurisdiction
shall finally hold that any provision of Section 11 or 12 hereof is void or
constitutes an unreasonable restriction against the Executive, Section 11 or 12,
as the case may be, shall not be rendered void, but shall apply with respect to
such extent as such court may judicially determine constitutes a reasonable
restriction under the circumstances, and, in such connection, the parties hereto
authorize any such court to modify or sever any such provision, including
without limitation, any such provision relating to duration and geographical
area, to the extent deemed necessary or appropriate by such court. If any part
of this Agreement other than Section 11 or 12 is held by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part by reason of any rule of law or public policy, such part shall be deemed
to be severed from the remainder of this Agreement for the purpose only of the
particular legal proceedings in question and all other covenants and provisions
of this Agreement shall in every other respect continue in full force and effect
and no covenant or provision shall be deemed dependent upon any other covenant
or provision.
15. DEVELOPMENTS.
The Executive shall promptly disclose to the Company all processes,
trademarks, inventions, improvements, discoveries and other information related
to the Business of the Company (collectively "DEVELOPMENTS") conceived,
developed or acquired by him alone or with others during the Term, whether or
not conceived during regular working hours, or through the use of Company time,
material or otherwise. All such Developments shall be the sole and exclusive
property of the Company, and upon request the Executive shall deliver to the
Company all drawings, sketches, models and other data and records relating to
such Developments. In the event any such Developments shall be deemed by the
Company to be patentable, the Executive shall, at the expense of the Company,
assist the Company in obtaining a patent or patents thereon and execute all
documents and do all other things necessary or proper to obtain letters patent
and to vest the Company with full title thereto. The Executive represents and
covenants that as of the date hereof there are no Developments the Executive
conceived prior to execution of this Agreement, which are not owned by the
Company and which relate in any way to the Business.
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16. NOTICES. All notices required to be given or delivered by this
Agreement shall be in writing and shall be deemed to have been given when (i)
delivered personally, (ii) sent by nationally recognized express courier service
(charges prepaid) (iii) mailed by certified or registered mail, return receipt
requested and postage prepaid or (iv) sent by facsimile to the parties at their
respective addresses and/or facsimile numbers set forth below or to such other
address or number as either party shall have designated in writing to the other
party hereto. The date of the giving of such notices delivered personally or by
courier shall be the date of their delivery and the date of giving of such
notices by certified or registered mail shall be the date that is five days
after the posting of the mail:
IF TO THE COMPANY:
SendTec Acquisition Corp.
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Fax (000) 000-0000
Attn. CEO
IF TO THE EXECUTIVE:
Xxxx Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
17. WAIVER AND AMENDMENT. Failure to insist upon strict compliance with
any of the terms, covenants or conditions hereof shall not operate or be
construed as a waiver of any subsequent term, covenant or provision nor shall
any waiver or relinquishment of any right or power hereunder at any one or more
times be deemed a waiver or relinquishment of such right or power at any other
time or times. This Agreement may be amended only by a writing signed by the
Executive and by a duly authorized representative of the Company.
18. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, legal
representatives and assigns. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive or his beneficiaries or legal
representation without the prior written consent of the Company; provided,
however, that nothing in this Section 18 shall preclude the Executive from
designating a beneficiary to receive any benefit payable upon his death or
incapacity.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, except that body of law
relating to choice of laws. In addition, any legal suit, action or proceeding
arising out of or relating to this Employment Agreement shall be instituted
exclusively in the federal or state courts in the state of Florida, Broward
County, and each party waives any objection to the venue of any such suit,
action or proceeding and the right to assert that such forum is not a convenient
forum, and irrevocably consents to the jurisdiction of such federal or state
courts in the state of Florida, Broward County, in any such suit, action or
proceeding.
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20. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties hereto and supersedes any prior agreements, contracts,
understandings or arrangements, whether oral or written, regarding the subject
matter hereof.
21. SURVIVAL OF PROVISIONS. Neither the termination of this Agreement, nor
the Executive's employment hereunder, shall terminate or affect in any manner
any provision of this Agreement that is intended by its terms to survive such
termination, including without limitation, the provisions of Sections 7, 11 and
12.
22. ATTORNEY'S FEES. In any action or proceeding, legal or equitable,
brought under or pursuant to this Agreement, the prevailing party shall be
entitled to seek all costs and expenses incurred by such party, including
reasonable attorneys' fees and expenses.
23. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
SENDTEC ACQUISITION CORP:
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: CEO
/s/ Xxxx Xxxxx
------------------------------------
Xxxx Xxxxx
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