Contract
EMPLOYMENT
AGREEMENT, dated August 20, 2007 by, and between DCAP
Management Corp., a New York corporation (the
“Company”) and a wholly owned subsidiary of DCAP Group, Inc.
(the “Parent”), and Xxxx Xxxxxxx (the
“Employee”).
RECITALS
WHEREAS,
the Company and the Employee desire to enter into an employment agreement,
which
will set forth the terms and conditions upon which the Employee shall be
employed by the Company and upon which the Company shall compensate the
Employee.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, the parties hereto have agreed, and do hereby agree,
as
follows:
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1.
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EMPLOYMENT;
TERM
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1.1 The
Company will employ the Employee in its business, and the Employee will work
for
the Company therein, as its President for a term commencing as of August
20,
2007 (the “Effective Date”) and terminating on August 20, 2009 (the “Expiration
Date”), subject to earlier termination as hereinafter provided (the employment
period, as earlier terminated or as extended as provided for herein, being
referred to as the “Term”).
1.2 This
Agreement will automatically renew for a one-year term upon its initial
expiration unless (a) the Employee has voluntarily terminated his employment,
or
(b) the Employee's employment has been earlier terminated as provided in
this
Agreement, or (c) the Company provides to the Employee not less than one
year's
prior express written notice that this Agreement is not to be
renewed.
1.3 Upon
the
expiration of the Term or the termination of the Employee’s employment with the
Company for any reason whatsoever, he shall be deemed to have resigned all
of
his positions as an employee, officer and director of the Company, the Parent
and of each and every subsidiary thereof.
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2.
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DUTIES
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2.1 During
the Term, the Employee shall serve as the Company’s President and shall perform
duties of an executive character consisting of administrative and managerial
responsibilities on behalf of the Company of the type and nature generally
assigned to operating officers and such further duties of an executive character
as shall, from time to time, be delegated or assigned to him by the Chief
Executive Officer or the Board of Directors of the Company or Parent consistent
with the Employee’s position.
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3.
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DEVOTION
OF TIME
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3.1 During
the Term, the Employee shall expend all of his working time for the Company;
shall devote his best efforts, energy and skill to the services of the Company
and the promotion of its interests; and shall not take part in activities
detrimental to the best interests of the Company. The Employee shall
be permitted to engage in charity work, tend to personal financial and legal
affairs and, subject to the prior written consent of the Company, serve on
the
Board of Directors of other business organizations, provided that such
activities do not interfere with his full-time services to the
Company.
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4.
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COMPENSATION
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4.1 For
all
services to be rendered by the Employee during the Term, and in consideration
of
the Employee’s representations and covenants set forth in this Agreement, the
Employee shall be entitled to receive from the Company compensation as set
forth
in Paragraphs 4.2, 4.3 and 4.4 below.
4.2 During
the Term, the Employee shall be entitled to receive a salary at the rate
of two
hundred twenty thousand dollars ($220,000) per annum (the “Base
Salary”). The Employee shall be entitled to increases in the Base
Salary and other potential additional compensation as may be determined from
time to time by the Board of Directors of the Company in its sole
discretion. All amounts due hereunder shall be payable in accordance
with the Company’s standard payroll practices.
4.3 (a) During
the first twelve (12) month period of the Term only, the Employee also shall
be
eligible to receive a commission payment in connection with the generation
and
collection of initial franchise fees during such twelve (12) month
period. The potential commission payment (which is a percentage
amount of the initial franchise fees actually paid to or for the benefit
of the
Company) due to the Employee shall be determined by reference to the following
schedule:
Amount
of Initial Franchise Fees
Actually
Collected Commission
Percentage
less
than
$150,000 0%
$150,000
- $500,000
17.5%
and a special
payment
of
$26,250
(the "Special Payment")
$501,000
-
$1,000,000
20.0%
$1,000,001
+ 22.5%
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In
the event that there is a commission
payment due to the Employee based upon the foregoing parameters, the amount
of
such payment shall be equal to the product of the applicable amount of initial
franchise fees actually collected and the applicable commission
percentage. In the event that the aggregate amount of the initial
franchise fees for such twelve (12) month period is between $150,000 and
$500,000, the Employee, in addition to 17.5% of such initial franchise fees,
shall be entitled to the Special Payment of $26,250.
The
Special Payment amount of $26,250
will be paid to the Employee within 30 days of the Employee passing the $150,000
threshold, provided that the Company has enough cash on hand (to be analyzed
on
a deal to deal basis) to make the Special Payment to the Employee. If
the Company does not have enough cash on hand (after being analyzed on a
deal to
deal basis) to make the Special Payment to the Employee within 30 days of
the
Employee passing the $150,000 threshold, the Company will make such payment
as
soon as it has enough cash on hand to make the Special Payment.
With
respect to any payments to be made
under this Paragraph 4.3 after the Special Payment, such commission payments
will be made within 30 days of the annual anniversary of the Effective Date,
provided that the Company has enough cash on hand at such time to make the
payments. Again, each commission will be analyzed on a deal to deal
basis (i.e. cash paid to the Company vs. receipt of promissory notes with
no
payments made). If the Company does not have enough cash on hand
(after being analyzed on a deal to deal basis) to make such payments to the
Employee within 30 days of the annual anniversary of the Effective Date,
the
Company will make such payments as soon as it has enough cash on
hand. If a commission payment has not been paid by the second
anniversary of the Effective Date due to a lack of available cash on hand
to
make such payment, such commission shall be deemed to be forfeited and the
Company shall have no obligation to pay such forfeited commission.
(b) Notwithstanding
the foregoing, the Employee shall not be entitled to any commission payments
from franchise sales that do not generate collected initial franchise
fees. In the event that the Board of Directors of the Company
determines that there is substantial revenue derived from such franchise
sales
without collected initial franchise fees, the Board of Directors of the Company
will take such circumstances into consideration in determining whether the
Employee should be paid a bonus or other commission payment in connection
with
such franchise sales.
4.4 Subject
to the following sentence, any bonus or other commission payment to be made
to
the Employee by the Company for any period of time after the initial twelve
(12)
month period of the Term shall be governed by the Parent’s corporate and
executive bonus plan, which the Company anticipates will be in effect on
or
prior to the start of the second twelve (12) month period of the
Term. In the event that the Parent’s corporate and executive bonus
plan is not in effect by July 31, 2008, any bonus or other commission payment
to
be made to the Employee for any period of time during the Term shall be governed
by the provisions of Section 4.3 above, until such time as the Parent’s
corporate and executive bonus plan is put into effect, if ever.
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5.
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REIMBURSEMENT
OF EXPENSES
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5.1 Subject
to Section 5.3 hereof, the Company shall pay directly, or reimburse the Employee
for, all reasonable and necessary expenses and disbursements incurred by
the
Employee for and on behalf of the Company in the performance of his duties
during the Term.
5.2 The
Employee shall submit to the Company, not less than once in each calendar
month,
reports of such expenses and disbursements in form normally used by the Company
and receipts with respect thereto and the Company’s obligations under Paragraph
5.1 hereof shall be subject to compliance therewith.
5.3 During
the Term and, in the event of an Entitlement Termination (as hereinafter
defined), during the Entitlement Restrictive Covenant Period (as hereinafter
defined), the Employee shall be entitled to receive a monthly automobile
allowance of one thousand dollars ($1,000) for any and all expenses related
to
the Employee’s automobile (i.e. lease payments, insurance, gas, tolls, parking,
etc.). Except for reimbursement of directly related automobile
expenses (i.e. parking and tolls) incurred by the Employee while fulfilling
his
duties and responsibilities to the Company, but which are outside of the
Employee’s normal day to day usage of his automobile, the Employee will not be
entitled to any additional or alternative reimbursement for any other automobile
related expenses.
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6.
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DISABILITY;
INSURANCE
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6.1
If, during the Term, the Employee, in the opinion of a majority of all of
the
members of the Board of Directors of the Company (excluding the Employee
if he
is a member), as confirmed by competent medical evidence, shall become
physically or mentally incapacitated to perform his duties for the Company
hereunder (“Disabled”) for a continuous period, then for the first six (6)
months of such period he shall receive his full salary. In no event,
however, shall the Employee be entitled to receive any payments under this
Paragraph 6.1 beyond the expiration or termination date of this
Agreement. Effective with the date of his resumption of full
employment, the Employee shall be re-entitled to receive his full
salary. If such illness or other incapacity shall endure for a
continuous period of at least nine (9) months or for at least two hundred
fifty
(250) business days during any eighteen (18) month period, the Company shall
have the right, by written notice, to terminate the Employee’s employment
hereunder as of a date (not less than thirty (30) days after the date of
the
sending of such notice) to be specified in such notice. The Employee
agrees to submit himself for appropriate medical examination to a physician
of
the Company’s designation as necessary for purposes of this Paragraph
6.1.
6.2
The obligations of the Company under this Paragraph 6 may be satisfied, in
whole
or in part, by payments to the Employee under disability insurance provided
by
the Company.
6.3
Notwithstanding the foregoing, in the event, at the time of any apparent
incapacity, the Company has in effect a disability policy with respect to
the
Employee, the Employee shall be considered Disabled for purposes of Paragraph
6.1 only if he is considered disabled for purposes of the policy.
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7.
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RESTRICTIVE
COVENANTS
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7.1 (a) The
services of the Employee are unique and extraordinary and essential to the
business of the Company, especially since the Employee shall have access
to the
Company’s customer lists, trade secrets and other privileged and confidential
information essential to the Company’s business. Therefore, the
Employee agrees that, if the term of his employment hereunder shall expire
or
his employment shall at any time terminate for any reason whatsoever, with
or
without Cause (as hereinafter defined) and with or without Good Reason (as
hereinafter defined), the Employee will not at any time during the one year
period commencing with the date on which the Employee ceases to be employed
by
the Company because this Agreement has expired or this Agreement has been
terminated by either party for any reason whatsoever (the “Cessation Date”) (the
“Restrictive Covenant Period”), without the prior written consent of the
Company, directly or indirectly, anywhere within five (5) miles of the location
of any office of the Company or any franchisee thereof, whether individually
or
as a principal, officer, employee, partner, shareholder, member, manager,
director, agent of, or consultant or independent contractor to, any
entity,
(i) engage
or
participate in a business which, as of the Cessation Date, is similar to
or
competitive with, directly or indirectly, that of the Company, including,
without limitation, those businesses of the Parent described in its Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2006 (collectively,
the “Current Businesses”) and shall not make any investments in any such similar
or competitive entity, except that the foregoing shall not restrict the Employee
from (A) acquiring up to one percent (1%) of the outstanding voting stock
of any
entity whose securities are listed on a stock exchange or Nasdaq or (B) engaging
or participating in a business other than a Current Business (a “New Business”)
if the revenues of such New Business for the preceding fiscal year are less
than
one percent (1%) of the consolidated revenues of the Parent for such preceding
fiscal year;
(ii) cause
or
seek to persuade any director, officer, employee, customer, client, account,
agent or supplier of, or consultant or independent contractor to, the Company,
or others with whom the Company has a business relationship (collectively
“Business Associates”), to discontinue or materially modify the status,
employment or relationship of such person or entity with the Company, or
to
become employed in any activity similar to or competitive with the activities
of
the Company;
(iii) cause
or
seek to persuade any prospective customer, client, account or other Business
Associate of the Company (which at or about the Cessation Date was then actively
being solicited by the Company) to determine not to enter into a business
relationship with the Company or to materially modify its contemplated business
relationship;
(iv) hire,
retain or associate in a business relationship with, directly or indirectly,
any
director, officer or employee of the Company; or
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(v) solicit
or cause or authorize to be solicited, or accept, for or on behalf of him
or any
third party, any business from, or the entering into of a business relationship
with, (A) others who are, or were within one (l) year prior to the
Cessation Date, a customer, client, account or other Business Associate of
the
Company, or (B) any prospective customer, client, account or other Business
Associate of the Company which at or about the Cessation Date was then actively
being solicited by the Company.
The
foregoing restrictions set forth in this Paragraph 7.1(a) shall apply likewise
during the Term.
(b) Notwithstanding
the foregoing, in the event that the Employee’s employment is terminated by the
Company without Cause, or by the Employee for Good Reason, or ceases following
a
non-renewal of this Agreement beyond the Expiration Date (or, if this Agreement
is renewed for a one year period beyond the Expiration Date pursuant to
Paragraph 1.2, beyond such additional one-year period) (i.e., this Agreement
is
not renewed for a one-year term upon its initial expiration or, if renewed
for a
one-year period pursuant to Paragraph 1.2, it is not further renewed upon
its
expiration after such additional one-year period) (in each case, an “Entitlement
Termination”), then the Restrictive Covenant Period shall instead be the six (6)
month period commencing with the Cessation Date (the “Entitlement Restrictive
Covenant Period”), except that, in such event, the Company may, upon written
notice given to the Employee within one (1) month following the Cessation
Date,
extend the Entitlement Restrictive Covenant Period from six (6) months to
one
(1) year (an “Extension”).
(c) During
the initial six (6) months of the Entitlement Restrictive Covenant Period,
the
Employee shall be entitled to receive from the Company an amount per annum
equal
to his Base Salary at the Cessation Date (payable over such six (6) month
period), less all amounts the Employee is entitled to receive from the Company
pursuant to Paragraph 11.5 hereof for such period and/or from third parties
in
consideration of services rendered, directly or indirectly, by the Employee
to
or for the third parties during such period (the “Initial Restrictive Covenant
Amount”). (For purposes of clarity, if the Base Salary at the
Cessation Date is $110,000 for such six month period, the base Initial
Restrictive Covenant Amount will be $110,000). During the second six
(6) months of the Entitlement Restrictive Covenant Period (if an Extension
notice is given by the Company), the Employee shall be entitled to receive
from
the Company an amount per annum equal to his Base Salary at the Cessation
Date
(payable over such six (6) month period) (as clarified above), less all amounts
the Employee is entitled to receive from the Company pursuant to Paragraph
11.5
hereof for such period and/or from third parties in consideration of services
rendered, directly or indirectly, by the Employee to or for the third parties
during such period (the “Restrictive Covenant
Amount”). Notwithstanding the foregoing, in the event of an
Entitlement Termination, the Company may elect to release the Employee from
the
restrictions set forth in clause Paragraph 7.1 hereof during the Entitlement
Restrictive Covenant Period by written notice to such effect given to the
Employee at least six (6) months prior to the Cessation Date (in the event
of an
Entitlement Termination relating to a non-renewal of this Agreement) or within
thirty (30) days following the Cessation Date (with respect to any other
Entitlement Termination) . In the event the Company sends such
notice, it shall be relieved of its obligation to pay any portion of the
Restrictive Covenant Amount with the exception of that portion of the thirty
(30) days following the Cessation Date prior to the date on which the notice
is
given.
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(d) In
the event that the Employee terminates this Agreement upon the happening
of a
Change in Control (as such term is hereinafter defined), then, in accordance
with the provisions of Paragraph 11.6 hereof, this Agreement shall be cancelled
and of no further force and effect and the Employee shall not be subject
to the
restrictions contained in this Paragraph 7.1.
7.2 The
Employee agrees to disclose promptly in writing to the Chief Executive Officer
of the Company all ideas, processes, methods, devices, business concepts,
inventions, improvements, discoveries, know-how and other creative achievements
(hereinafter referred to collectively as “discoveries”), whether or not the same
or any part thereof is capable of being patented, trademarked, copyrighted,
or
otherwise protected, which the Employee, while employed by the Company,
conceives, makes, develops, acquires or reduces to practice, whether acting
alone or with others and whether during or after usual working hours, and
which
are related to the Company’s business or interests, or are used or usable by the
Company, or arise out of or in connection with the duties performed by the
Employee. The Employee hereby transfers and assigns to the Company
all right, title and interest in and to such discoveries (whether conceived,
made, developed, acquired or reduced to practice on or prior to the Effective
Date or during his employment with the Company), including any and all domestic
and foreign copyrights and patent and trademark rights therein and any renewals
thereof. On request of the Company, the Employee will, without any
additional compensation, from time to time during, and after the expiration
or
termination of, the Term, execute such further instruments (including, without
limitation, applications for copyrights, patents, trademarks and assignments
thereof) and do all such other acts and things as may be deemed necessary
or
desirable by the Company to protect and/or enforce its right in respect of
such
discoveries. All expenses of filing or prosecuting any patent,
trademark or copyright application shall be borne by the Company, but the
Employee shall cooperate, at the Company’s expense, in filing and/or prosecuting
any such application.
7.3 (a) The
Employee represents that he has been informed that it is the policy of the
Company to maintain as secret all confidential information relating to the
Company, including, without limitation, any and all knowledge or information
with respect to secret or confidential methods, processes, plans, materials,
customer lists or data, or with respect to any other confidential or secret
aspect of the Company’s activities, and further acknowledges that such
confidential information is of great value to the Company. The
Employee recognizes that, by reason of his employment with the Company, he
will
acquire confidential information as aforesaid. The Employee confirms
that it is reasonably necessary to protect the Company’s goodwill, and,
accordingly, hereby agrees that he will not, directly or indirectly (except
where authorized by the Chief Executive Officer or Board of Directors of
the
Company), at any time during the term of this Agreement or thereafter divulge
to
any person, firm or other entity, or use, or cause or authorize any person,
firm
or other entity to use, any such confidential information.
(b) The
Employee agrees that he will not, at any time, remove from the Company’s
premises any drawings, notebooks, software, data or other confidential
information relating to the business and procedures heretofore or hereafter
acquired, developed and/or used by the Company, except where necessary in
the
fulfillment of his duties hereunder.
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(c) The
Employee agrees that, upon the expiration or termination of this Agreement
or
the termination of his employment with the Company for any reason whatsoever,
he
shall promptly deliver to the Company any and all drawings, notebooks, software,
data and other documents and material, including all copies thereof, in his
possession or under his control relating to any confidential information
or
discoveries, or which is otherwise the property of the Company.
(d) For
purposes hereof, the term “confidential information” shall mean all information
given to the Employee, directly or indirectly, by the Company and all other
information relating to the Company otherwise acquired by the Employee during
the course of his employment with the Company, other than information which
(i)
was in the public domain at the time furnished to, or acquired by, the Employee,
or (ii) thereafter enters the public domain other than through disclosure,
directly or indirectly, by the Employee or others in violation of an agreement
of confidentiality or nondisclosure.
7.4 For
purposes of this Paragraph 7, the term “Company” shall mean and include the
Company, the Parent and any and all subsidiaries and affiliates entities
of the
Parent or Company in existence from time to time.
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8.
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VACATIONS;
LEAVE
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8.1 The
Employee shall be entitled to an aggregate of three (3) weeks vacation time
for
each twelve (12) month period during the Term commencing on the Effective
Date,
the time and duration thereof to be determined by mutual agreement between
the
Employee and the Chief Executive Officer of the Company. Any vacation
time not used by the end of the Term shall be forfeited without
compensation. In addition, the Employee shall not be entitled to
carry over or use any vacation time that is unused as of the end of any twelve
(12) month period during the Term. Further, the Employee shall be
entitled to the number of sick, personal, family, etc. days off during each
twelve (12) month period of the Term as set forth in the Parent’s employee
handbook.
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9.
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PARTICIPATION
IN EMPLOYEE BENEFIT PLANS; STOCK
OPTIONS
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9.1 The
Employee shall be accorded the right to participate in and receive benefits
under and in accordance with the provisions of any pension, profit sharing,
insurance, medical and dental insurance or reimbursement (with family coverage)
or other plan or program of the Company either in existence as of the Effective
Date or thereafter adopted for the benefit generally of its executive
employees. Notwithstanding the foregoing, the Employee shall not be
responsible for the payment of any premiums due with respect to any medical
and
dental insurance plan or program adopted by the Company during the Term and,
in
the event of an Entitlement Termination, during the Entitlement Restrictive
Covenant Period.
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9.2 On
the
Effective Date, pursuant to the Company’s 2005 Equity Participation Plan (the
“Plan”) and a Stock Option Agreement in, or substantially in, the form attached
hereto as Exhibit A, the Company will grant to the Employee the right and
option
to purchase up to Fifty-Nine Thousand Five Hundred
Twenty-Four (59,524) Common Shares of the Company upon the terms set
forth in the Stock Option Agreement (the “Options”). The Company
represents that the shares of common stock underlying the Options (the “Option
Shares”) are included within a currently effective registration statement on
Form S-8 filed with the Securities and Exchange Commission on or about March
31,
2006. The Company agrees to continue to include the Option Shares in
such registration statement or any successor registration statement which
registers shares underlying options issued or to be issued pursuant to the
Plan,
as may be amended, supplemented and modified from time to time.
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10.
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SERVICE
AS OFFICER AND
DIRECTOR
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10.1 During
the Term, the Employee shall, if elected or appointed, serve as (a) an officer
of the Parent, Company and/or any subsidiaries of the Parent or Company in
existence or hereafter created or acquired and (b) a director of the Company
and/or any such subsidiaries of the Company in existence or hereafter created
or
acquired, in each case without any additional compensation for such
services. In the event the Parent or Company has in effect during the
Term a director and officer liability insurance policy, the Parent or Company
will include the Employee therein as a named insured.
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11.
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EARLIER
TERMINATION
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11.1 The
Employee’s employment hereunder shall automatically terminate upon his death,
may terminate at the option of the Company in the event of Cause, and may
terminate at the option of the Employee for Good Reason.
11.2 The
Employee’s employment may be terminated by the Company at any time during the
Term upon written notice for Cause. As used in this Agreement,
“Cause” shall mean the Employee’s commission of any act in the performance of
his duties constituting common law fraud, a felony or other gross malfeasance
of
duty, the Employee’s commission of any act involving moral turpitude which may
reasonably be expected to result in material damage to the Company, any willful
breach of any material representation, warranty or covenant on the Employee’s
part herein set forth (which breach, if curable, is not cured by the Employee
within ten (10) days of the Employee’s receipt of written notice thereof from
the Company), or the Employee’s willful engagement in misconduct which is
materially injurious to the Company, the Parent or any of its
subsidiaries.
11.3 The
Employee’s employment may be terminated by the Employee at any time during the
Term for Good Reason. As used in this Agreement, “Good Reason” shall
mean (a) any breach of any material covenant on the Company’s part (which
breach, if curable, is not cured by the Company within ten (10) days of the
Company’s receipt of written notice thereof from the Employee), (b) a material
dimunition in the Employee’s duties and responsibilities (other than following
an event constituting Cause) in his capacity as President of the Company,
or (c)
a requirement by the Company that the Employee be based at any office or
location that is more than fifty (50) miles outside of (i) New York City,
Albany, New York and Philadelphia, Pennsylvania and (ii) the triangle formed
by
joining the midpoints of such cities.
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11.4 Upon
termination of the Employee’s employment by the Company for Cause or by the
Employee without Good Reason, the Company shall have no further obligations
to
the Employee, and the Employee shall be entitled to no further compensation
from
the Company, except for any pro-rata amounts due to the Employee at such
date of
termination, as provided for in Paragraphs 4.2 and 4.3 hereof. In the
event of the termination of the Employee’s employment by the Company for Cause
or by the Employee without Good Reason, the amount to be paid to the Employee
pursuant to this Paragraph 11.4 shall constitute the sole and exclusive remedy
of the Employee, and the Employee shall not be entitled to any other or further
compensation, rights or benefits hereunder or otherwise.
11.5 In
the event of the termination of the Employee’s employment by the Company during
the Term without Cause or by the Employee for Good Reason, as liquidated
damages, the Employee shall be entitled to receive the compensation to which
he
would have been entitled until the expiration of the Term pursuant to Paragraphs
4.2 and 4.3 hereof, less all amounts the Employee is entitled to receive
from
third parties in consideration of services rendered, directly or indirectly,
by
the Employee to or for the third parties until the expiration of the
Term. Such
compensation shall be payable to the Employee in accordance with the Company’s
standard payroll practices as if his employment had continued. The
amount to be paid to the Employee pursuant to this Paragraph 11.5, and the
potential amounts to be paid to the Employee pursuant to Paragraph 7.1, shall
constitute the sole and exclusive remedy of the Employee, and the Employee
shall
not be entitled to any other or further compensation, rights or benefits
hereunder or otherwise.
11.6 The
Employee may terminate this Agreement at any time within forty-five (45)
days
after a Change in Control, upon ten (10) days prior written notice to the
Company. Upon termination of the Employee’s employment by the Company
due to a Change in Control, the Company shall have no further obligations
to the
Employee, and the Employee shall be entitled to no further compensation from
the
Company, except for any pro-rata amounts due to the Employee at such date
of
termination, as provided for in Paragraphs 4.2 and 4.3 hereof. In the
event of the termination of the Employee’s employment by the Company by the
Employee due to a Change in Control, the amount to be paid to the Employee
pursuant to this Paragraph 11.6 shall constitute the sole and exclusive remedy
of the Employee, and the Employee shall not be entitled to any other or further
compensation, rights or benefits hereunder or otherwise. For the
purposes of this Agreement, the term “Change in Control” shall mean, except in
connection with, or in relation to, a capital revising transaction:
(a) the
transfer, through one transaction or a series of related transactions, either
directly or indirectly, or through one or more intermediaries, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934) of 50% or more of either the then outstanding shares
of
common stock or the combined voting power of the Parent’s then outstanding
voting securities entitled to vote generally in the election of directors,
or
the last of any series of transfers that results in the transfer of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934) of 50% or more of either the then outstanding shares
of
common stock or the combined voting power of the Parent’s then outstanding
voting securities entitled to vote generally in the election of
directors;
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(b) approval
by the shareholders of the Parent of a merger or consolidation, with respect
to
which persons who were the shareholders of the Parent immediately prior to
such
merger or consolidation do not, immediately thereafter, own more than 50%
of the
combined voting power entitled to vote generally in the election of directors
of
the merged or consolidated company’s then outstanding voting securities, or a
liquidation or dissolution of the Parent or the sale of all or substantially
all
of the assets of the Parent;
(c) the
transfer, through
one transaction or a series of related transactions, of more than
50% of the assets of the Parent, or the last of any series
of
transfers that results in the transfer of more than 50% of the assets of
the
Parent. For purposes of this paragraph, the determination of what
constitutes more than 50% of the assets of the Parent shall be determined
based
on the most recent financial statement prepared by the Parent’s independent
accountants; or
(d) during
any calendar
year, individuals who at the beginning of such year constituted the Board
of
Directors of the Parent and any new director or directors whose election
by the
Board of Directors was approved by a vote of a majority of the directors
then
still in office who either were directors at the beginning of the year or
whose
election or nomination for election was previously so approved, cease for
any
reason to constitute a majority thereof provided, however, that this provision
will not be triggered in the event the Employee votes or causes other
stockholders to vote their shares to cause said change to the directorship
of
the Parent.
|
12.
|
INJUNCTIVE
RELIEF; REMEDIES
|
12.1 The
Employee acknowledges and agrees that, in the event he shall violate or threaten
to violate any of the restrictions of Paragraph 3 or 7 hereof, the Company
will
be without an adequate remedy at law and will therefore be entitled to enforce
such restrictions by temporary or permanent injunctive or mandatory relief
in
any court of competent jurisdiction without the necessity of proving
damages.
12.2 The
Employee agrees further that the Company shall have the following additional
rights and remedies:
(i) The
right and remedy to require the Employee to account for and pay over to the
Company all profits derived or received by him as the result of any transactions
constituting a breach of any of the provisions of Paragraph 7.1, and the
Employee hereby agrees to account for and pay over such profits to the Company;
and
11
(ii) The
right to recover attorneys’ fees incurred in any action or proceeding in which
it seeks to enforce its rights under Paragraph 7 hereof and is successful
on any
grounds.
12.3 Each
of
the rights and remedies enumerated above shall be independent of the other,
and
shall be severally enforceable, and all of such rights and remedies shall
be in addition to, and not in lieu of, any other rights and remedies available
to the Company under law or in equity.
12.4 The
parties hereto intend to and hereby confer jurisdiction to enforce the covenants
contained in Paragraph 7.1 upon the courts of any jurisdiction within the
geographical scope of such covenants (a “Jurisdiction”). In the event
that the courts of any one or more of such Jurisdictions shall hold such
covenants unenforceable by reason of the breadth of their scope or otherwise,
it
is the intention of the parties hereto that such determination not bar or
in any
way affect the Company’s right to the relief provided above in the courts of any
other Jurisdiction, as to breaches of such covenants in such other respective
Jurisdictions, the above covenants as they relate to each Jurisdiction being,
for this purpose, severable into diverse and independent covenants.
|
13.
|
NO
RESTRICTIONS
|
13.1 The
Employee hereby represents that neither the execution of this Agreement nor
his
performance hereunder will (a) violate, conflict with or result in a breach
of
any provision of, or constitute a default (or an event which, with notice
or
lapse of time or both, would constitute a default) under the terms, conditions
or provisions of any contract, agreement or other instrument or obligation
to
which the Employee is a party, or by which he may be bound, or (b) violate
any
order, judgment, writ, injunction or decree applicable to the
Employee. In the event of a breach hereof, in addition to the
Company’s right to terminate this Agreement, the Employee shall indemnify the
Company and hold it harmless from and against any and all claims, losses,
liabilities, costs and expenses (including reasonable attorneys’ fees) incurred
or suffered in connection with or as a result of the Company’s entering into
this Agreement or employing the Employee hereunder.
|
14.
|
ARBITRATION
|
14.1 Except
with regard to Paragraph 12.1 hereof and any other matters that are not a
proper
subject of arbitration, all disputes between the parties hereto concerning
the
performance, breach, construction or interpretation of this Agreement or
any
portion thereof, or in any manner arising out of this Agreement or the
performance thereof, shall be submitted to binding arbitration, in accordance
with the rules of the American Arbitration Association. The
arbitration proceeding shall take place at a mutually agreeable location
in
Nassau County, New York or such other location as agreed to by the
parties. Further, either party shall be entitled to rely upon the
advice and counsel of expert(s) in the area of employment law in connection
with
any such arbitration.
14.2 The
award
rendered by the arbitrator shall be final, binding and conclusive, shall
be
specifically enforceable, and judgment may be entered upon it in accordance
with
applicable law in the appropriate court in the State of New York, with no
right
of appeal therefrom.
12
14.3 The
losing party shall pay its or his own expenses of arbitration, the expenses
of
the arbitrator and the arbitration proceeding, as well as the arbitration
costs
and expenses incurred by the prevailing party (including all reasonable
attorney’s fees and expenses incurred in connection therewith) in any such
matter.
|
15.
|
ASSIGNMENT
|
15.1 This
Agreement, as it relates to the employment of the Employee, is a personal
contract and the rights and interests of the Employee hereunder may not be
sold,
transferred, assigned, pledged or hypothecated.
|
16.
|
NOTICES
|
16.1 Any
notice required or permitted to be given pursuant to this Agreement shall
be
deemed to have been duly given when delivered by hand or sent by certified
or
registered mail, return receipt requested and postage prepaid, overnight
mail or
courier or telecopier as follows:
If
to the
Employee:
Xxxx
X.
Xxxxxxx
00
Xxxx
Xxxxx Xxxx
Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telecopier
Number: (000) 000-0000
with
a
copy to:
Xxxxx,
Danzig, Scherer, Xxxxxx & Peretti LLP
Xxxxxxxxxxxx
Xxxxx
Xxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Telecopier
Number: (000) 000-0000
13
If
to the
Company:
c/o
DCAP
Group, Inc.
0000
Xxxxxxxx
Xxxxxxx,
Xxx Xxxx 00000
Attention:
Chief Executive Officer
Telecopier
Number: (000) 000-0000
with
a
copy to:
Certilman
Balin Xxxxx & Xxxxx, LLP
00
Xxxxxxx Xxxxxx
Xxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx
X. Xxxxx
Telecopier
Number: (000) 000-0000
or
at
such other address as any party shall designate by notice to the other party
given in accordance with this Paragraph 16.1.
|
17.
|
GOVERNING
LAW
|
17.1 This
Agreement shall be governed by, and construed and enforced in accordance
with,
the laws of the State of New York applicable to agreements made and to be
performed entirely in New York.
|
18.
|
WAIVER
OF BREACH; PARTIAL
INVALIDITY
|
18.1 The
waiver by either party of a breach of any provision of this Agreement shall
not
operate or be construed as a waiver of any subsequent breach. If any
provision, or part thereof, of this Agreement shall be held to be invalid
or
unenforceable, such invalidity or unenforceability shall attach only to
such provision and not in any way affect or render invalid or unenforceable
any
other provisions of this Agreement, and this Agreement shall be carried out
as
if such invalid or unenforceable provision, or part thereof, had been reformed,
and any court of competent jurisdiction or arbitrators, as the case may be,
are
authorized to so reform such invalid or unenforceable provision, or part
thereof, so that it would be valid, legal and enforceable to the fullest
extent
permitted by applicable law.
14
|
19.
|
ENTIRE
AGREEMENT
|
19.1 This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and there are no representations, warranties or
commitments except as set forth herein. This Agreement supersedes all
prior agreements, understandings, negotiations and discussions, whether written
or oral, of the parties hereto relating to the subject matter
hereof. This Agreement may be amended, and any provision hereof
waived, only by a writing executed by the party sought to be
charged. No amendment or waiver on the part of the
Company shall be valid unless approved by its Board of
Directors.
|
20.
|
COUNTERPARTS
|
20.1 This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, and all of which taken together shall constitute one
and the
same instrument.
|
21.
|
FACSIMILE
SIGNATURES
|
21.1 Signatures
hereon which are transmitted via facsimile shall be deemed original
signatures.
|
22.
|
REPRESENTATION
BY COUNSEL;
INTERPRETATION
|
22.1 The
Employee acknowledges that he has been represented by counsel in connection with
this Agreement. Accordingly, any rule or law or any legal decision that would
require the interpretation of any claimed ambiguities in this Agreement against
the party that drafted it has no application and is expressly waived by the
Employee. The provisions of this Agreement shall be interpreted in a
reasonable manner to give effect to the intent of the parties
hereto.
|
23.
|
HEADINGS
|
23.1 The
headings and captions under sections and paragraphs of this Agreement are
for
convenience of reference only and do not in any way modify, interpret or
construe the intent of the parties or affect any of the provisions of this
Agreement.
[Remainder
of page intentionally left blank. Signature page
follows.]
15
IN
WITNESS WHEREOF,
the undersigned have executed this Agreement as of the day and year above
written.
|
DCAP
MANAGEMENT CORP.
|
|||
|
|
By:
|
/s/ Xxxxx Xxxxxxxxx | |
| Xxxxx Xxxxxxxxx | |||
| Chief Executive Officer | |||
| /s/ Xxxx Xxxxxxx | |||
| Xxxx Xxxxxxx | |||
