EMPLOYMENT AGREEMENT
AGREEMENT,
dated as of the 26th
day of
June, 2007, by and between Pinpoint Recovery Solutions Corp., a Delaware
corporation with principal executive offices at 0000 Xxxxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx 00000 (the "Company"), and Xxxxx Xxxxxxx,
residing at 0000 Xxxxx Xxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxx 00000
("Employee").
WHEREAS
the Company is engaged in the business of obtaining state and federal
unemployment tax recoveries and related tax refunds for corporate clients (the
"Business"); and
WHEREAS
Employee shall serve as President and Chief Executive Officer of the Company,
and Employee and the Company are desirous of formalizing their understanding
for
Employee's employment, all upon the terms and subject to the conditions
hereinafter provided.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment.
The
Company agrees to employ Employee, and Employee agrees to be employed by the
Company, upon the terms and subject to the conditions of this
Agreement.
2. Term.
The
term
of this Agreement shall be for a period of five (5) years commencing on the
date
hereof (the "Commencement Date") and ending on June 25, 2012, unless sooner
terminated as hereinafter provided (the "Term").
3. Duties;
Best Efforts; Indemnification.
(a) Employee
shall serve as President and Chief Executive Officer of the Company, and shall
report directly to such person or persons as may be designated by the Board
of
Directors of the Company (the "Board"). Employee shall generally oversee,
supervise and manage the day-to-day business, affairs, operations, strategy
and
assets of the Company and perform other normal duties, responsibilities,
functions and authority associated with the position of president and chief
executive officer of a corporation comparable to the Company, subject in each
case to the power and authority of the Board. During the Term, Employee shall
also have such other powers and duties as may be from time to time prescribed
by
the Board or its designees which are consistent with Employee's position and
duties hereunder.
(b) Employee
shall perform his duties, responsibilities and functions to the Company to
the
best of his abilities and in a manner consistent with the offices of president
and chief executive officer and shall comply with the lawful policies and
procedures of the Company. In performing his duties and exercising his authority
under this Agreement, Employee shall support and implement the lawful business
and strategic plans approved from time to time by the Board and shall support
and cooperate with the Company's efforts to expand its businesses and operate
profitably and in conformity with law and the business and strategic plans
approved by the Board. Employee shall devote all of his business time, attention
and energies, on a full time and exclusive basis, to the business and affairs
of
the Company and shall not during the Term be engaged in any other business
activities, whether or not such business activities are pursued for gain, profit
or other pecuniary advantage, without Board consent; provided, however, that,
it
shall not be a violation of this Agreement for Employee to (i) serve
on
corporate,
civic or charitable boards or committees or (ii) manage passive personal
investments, in either case so long as any such activities do not interfere
with
the performance of his responsibilities as an employee of the Company in
accordance with this Agreement or adversely affect or negatively reflect upon
the Company.
4. Compensation
and Benefits.
(a) The
Company shall pay to Employee a base salary (the "Base Salary") at a rate of
$160,000 per annum, payable in accordance with the Company's payroll practices
for its executive employees. The Board will review the Base Salary for possible
increase not less than annually during the Term.
(b) In
addition to Base Salary, Employee may, at the discretion of the Board, be
granted stock options or share appreciation rights under plans adopted by the
Board for the benefit of the executives and key management personnel of the
Company.
(c) Employee
may, at the discretion of the Board, be granted bonus compensation, payable
in
accordance with the Company's payroll practices for its executives and key
management personnel.
(d) Employee
shall be entitled to participate in or receive benefits under any pension plan,
health and accident plan or any other employee benefit plan or arrangement
made
available now or in the future by the Company to other executives and key
management personnel of the Company, as determined by the Board.
(e) The
Company shall promptly pay to Employee the approved reasonable expenses incurred
by him in the performance of his duties hereunder in accordance with the
Company's policies in effect from time to time, including, without limitation,
those incurred in connection with business related travel or entertainment,
or,
if such expenses are paid directly by Employee, shall promptly reimburse him
for
such payment, provided that Employee provides proper documentation thereof
in
accordance with the Company's policy. In addition, the Company shall provide
Employee, at the Company's expense, with the use of a leased recent model
automobile of Employee's choosing and the Company shall reimburse Employee
for
up to $ per
month
for lease payments incurred in connection with leasing such
automobile.
(f) Employee
shall be entitled to paid vacation days in each calendar year determined by
the
Company from time to time, but not less than four (4) weeks in any calendar
year, subject to the Company's vacation policies for its executives and key
management personnel. Vacation shall be prorated in any calendar year of the
Term during which Employee is employed hereunder for less than an entire year
in
accordance with the number of days in such year during which he is so employed.
Employee shall also be entitled to all paid holidays given by the Company to
its
executives and key management personnel.
(g)
The
Company may, at its discretion, subscribe for and maintain, on behalf of the
Company, life insurance, key-man insurance (which shall be for an amount no
less
than $750,000) and long-term disability insurance with respect to Employee,
in
such amount and upon such terms or conditions as the Company may deem
reasonable. Employee shall cooperate with the Company in connection with the
obtaining of any such policies, including, without limitation, the submission
to
physical examination and blood testing by a physician or other medical
professional selected by the Company.
5. Termination.
Employee's
employment hereunder shall be terminated upon Employee's death or Disability
or
Employee's voluntarily leaving the employ of the Company, and may be terminated
by the Company as follows:
(a)
For
Cause. The Company shall have the right to terminate Employee's employment
for
"Cause." A termination for "Cause" is a termination evidenced by a resolution
adopted by the Board finding that Employee has:
(i) engaged
in negligence or misconduct in connection with or arising out of the performance
of his duties hereunder that had a detrimental effect on the
Company;
(ii) been
under the influence of drugs (other than prescription medicine or other
medically-related drugs to the extent that they are taken in accordance with
their directions) or alcohol during the performance of his duties under this
Agreement, or while under the influence of drugs or alcohol, engaged in
inappropriate conduct;
(iii) engaged
in behavior that would constitute grounds for liability for sexual harassment
(as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines
or
any other applicable state regulatory body) or, in the reasonable opinion of
the
Board, other egregious conduct violative of laws governing the workplace;
or
(iv) committed
any act of fraud, larceny, misappropriation of funds or embezzlement or been
charged with a felony or a crime of moral depravity; or
(v)
materially
breached any of the provisions of this Agreement (in a manner not covered by
any
of subparagraphs (i) through (iv) if this Section 5(a)) if such breach is not
cured within twenty (20) days after written notice thereof has been given to
the
Employee by the Company.
(b)
For
Disability. The Company shall have the right to terminate Employee's employment
as a result of Employee's "Disability." For purposes of this Agreement, a
termination for "Disability" shall be deemed to occur if Employee has been
unable to substantially perform his duties hereunder for 90 consecutive days
or
for 90 days in any 180 day period by reason of any physical or mental illness
or
injury.
(c)
Employee agrees to make himself available and to cooperate in any reasonable
examination by a reputable independent physician selected by the Company for
the
purpose of determining disability pursuant to Section 5(b).
6. Effect
of Termination.
(a) Death
or
Disability. In the ' event of the termination of Employee's employment
as a result of his death or Disability, the Company shall:
(i) pay
to
Employee or his estate, as the case may be, the Base Salary plus accrued and
unpaid bonus, if any, in accordance with Section 4(c) through the date of his
death or Disability (pro rated for any partial month); and
(ii) reimburse
Employee, or his estate, as the case may be, for any expenses
pursuant to Section 4(e).
(b)
For
Cause by the Company, by Employee voluntarily or upon expiration of the Term.
In
the event that Employee's employment is terminated by the Company for Cause
or
by Employee voluntarily or upon expiration of the Term, the Company
shall
(i) pay
to
Employee the Base Salary plus accrued and unpaid bonus, if any, in accordance
with Section 4(c) through the date of such termination (pro rated for any
partial month); and
(ii) reimburse
Employee for any expenses pursuant to Section 4(e);
and
Employee shall have no further entitlement to any other compensation or benefits
from the Company, except as set forth herein.
(c)
Other
than as a result of Employee's death, Disability or voluntary resignation or
by
the Company for Cause. In the event that Employee's employment is terminated
other than by reason of his death or Disability, or by Employee voluntarily,
upon expiration of the Term, or for Cause, then, subject to receipt of a release
(the "Release") of the Company and its directors, officers and employees and
their respective successors and assigns of claims of Employee against them
arising out of or by reason of his termination of employment hereunder, the
Company shall:
(i)
pay to Employee the Base Salary plus accrued and unpaid bonus, if any, in
accordance with Section 4(c) through the date of such termination (pro rated
for
any partial month);
and (ii)
reimburse
Employee for any expenses pursuant to Section 4(e);
(iii)
pay
Employee the Base Salary plus benefits in accordance with Section 4(d), for
a
period commencing on the thirtieth day after receipt by the Company of the
Release and ending on the earlier to occur of (A) the last day of the Term
(as
if such termination had not occurred) or (B) the date that shall be seven (7)
months after the date of receipt of the Release, provided, that all such
payments shall be payable in accordance with the Company's normal payroll
practices for its executives and key management personnel.
(d)
This
Section 6 sets forth the only obligations of the Company with respect to the
termination of Employee's employment with the Company, and Employee acknowledges
that upon the termination of his employment, he shall not be entitled to any
payments or benefits which are not explicitly provided in this Agreement. Except
as set forth in section 6(c)(iii) above, any and all payments to Employee or
his
estate, as the case may be, of the Base Salary plus accrued and unpaid bonus,
if
any, and accrued and unpaid expenses, if any, shall be paid within fifteen
(15)
days of the termination of Employee's employment.
7. Covenant
Regarding Innovations and Copyrights.
(a)
Employee hereby acknowledges that all Innovations (as defined below) created
by
Employee (either working alone or as part of a group) that are used, useful
or
useable in connection with the Business or future business of the Company which
(i) were or will be made using equipment, supplies, facilities or trade secret
information of the Company, or (ii) were or will be developed at least in part
on the Company's time, or (iii) relate at the time of conception or reduction
to
practice thereof either to the Business or the future business of the Company
or
to the Company's actual or demonstrably anticipated research or development,
or
(iv) result from any work that Employee performs or performed for the Company,
were created
at
the
request of the Company pursuant to this Agreement or other arrangement (written
or unwritten) between the Company and Employee. The term "Innovations" shall
include all of the results and proceeds of Employee's services under this
Agreement, whether patentable, copyrightable, subject to trademark registration,
or not, written, created, developed or produced by Employee (either working
alone or as part of a group).
(b) Employee
hereby acknowledges that the Innovations were specifically ordered or
commissioned by the Company. Employee hereby irrevocably assigns to the Company
all right, title and interest in and to all Innovations and other intellectual
property derived therefrom, such assignment to be effective when first capable
of being so assigned, transferred or vested. To the extent that any Innovation
is or shall be a copyrightable work, Employee agrees that such Innovation
constitutes and shall constitute a work-made-for-hire as defined in the United
States Copyright Act of 1976; that the Company is and shall be the author of
said work-made-for hire and the owner of all rights in and to such Innovation
throughout the world, in perpetuity and in all languages, for all now known
or
hereafter existing uses, media and forms, including, without limitation, the
copyrights therein and thereto throughout the world for the initial term and
any
and all extensions and renewals thereof; and that the Company or its designees
shall have the right to make such changes therein and such uses thereof as
it
may deem necessary or desirable. To the extent that such copyrightable
Innovation is not recognized as a work-made-for-hire, Employee hereby
irrevocably assigns, transfers and conveys to the Company or its designees,
without reservation, all of his right, title and interest throughout the world
in perpetuity in such Innovation, including, without limitation, all rights
of
copyright and copyright renewal in such Innovation or any part thereof, and
all
rights to exclusively or non-exclusively license or sublicense the
foregoing.
(c) By
execution hereof, Employee hereby irrevocably constitutes and appoints the
Company or its designee with full power of substitution, to be Employee's true
and lawful attorney to execute, acknowledge, swear and file all instruments
and
documents, and to take any action which shall be deemed necessary, appropriate
or desirable to effectuate the terms of this Section 7. The powers of attorney
granted herein shall be deemed to be coupled with an interest and shall be
irrevocable and survive the occurrence of Employee's death, disability or
bankruptcy.
8. Protection
of Confidential Information.
Employee
acknowledges and agrees that he will not divulge to anyone (other than the
Company and its affiliates or any persons employed or designated by the Company
or in connection with the Employee's duties hereunder) any knowledge or
information of any type whatsoever of a confidential nature relating to the
business of the Company, its clients or any of its affiliates, including,
without limitation, all types of trade secrets (unless readily ascertainable
from public or published information or trade sources). Employee further agrees
not to disclose, publish or make use of any knowledge or information of a
confidential nature without prior written consent of the Company. The provisions
of this Section 8 shall apply both during the time that Employee is employed
by
the Company and thereafter.
9. Restriction
of Competition; Interference; and Non-Solicitation.
(a)
As a
significant inducement to the Company to enter into and perform its obligations
under this Agreement, during the Term and until the first anniversary of the
termination or expiration of the Term or any extension hereof, Employee will
not, for any reason, either directly or indirectly, alone or in association
with
others:
(i) solicit,
or permit any person or entity directly or indirectly to solicit,
any individual who at the time of the solicitation is, or who within the one
(1)
year
period
prior to such solicitation was, an employee of the Company to leave the employ
of the Company or terminate his or her employment relationship with the Company,
or hire or attempt to hire or induce, any employee or employees of the Company
to terminate their employment with, or otherwise cease their relationship with,
the Company;
(ii) solicit,
divert or take away, or attempt to divert or to take away, the business or
patronage of any of the clients, customers, vendors or accounts, or prospective
clients, customers, vendors or accounts of the Company;
(iii) engage,
or assist others in organizing or engaging, any place in the United States
in
any business which offers, promotes, develops, or engages in services that
are
competitive with the Business, or products or services which are marketed or
under active development by the Company during the Term (a "Competing
Business"), whether such engagement shall be as a director, officer, employee,
consultant, advisor, agent, lender, guarantor, surety, investor, promoter,
stockholder, shareholder, partner, member or other owner, affiliate or other
participant in any Competing Business, or allow Employee's name to be used
in
connection with a Competing Business, provided that Employee shall not be deemed
to engage in a Competing Business solely by reason of passive ownership of
less
than 5% of the outstanding stock of any publicly traded entity;
(iv) assist
others in organizing or engaging in any Competing Business in any capacity
or
manner described in clause (iii) above;
(v) induce
any client, customer, vendor, agent or other person or entity with whom or
which
the Company has a business relationship, contractual or otherwise, to terminate
or alter such business relationship; or
(vi)
take
any action reasonably likely to cause injury to the relationship between the
Company or any of its respective employees and any client, lessor, lessee,
vendor, supplier, customer, distributor, employee, consultant or other business
associate of the Company or any of its affiliates as such relationship relates
to the Company's conduct of business.
(b)
In
addition, neither during the Term nor at any time thereafter shall Employee
disparage the Company, any director, officer, employee or shareholder of the
Company, or any affiliate of any such director, officer, employee or shareholder
of the Company by making (or causing -others to make) any oral or written
statements or representations that could reasonably be construed to be a false
and misleading statement of fact or a libelous, slanderous or disparaging
statement of or concerning any of the aforementioned persons.
10. Specific
Remedies.
(a)
It is
understood by Employee and the Company that the covenants contained in this
Section 10 and in Sections 7, 8 and 9 hereof are essential elements of this
Agreement and that, but for the agreement of Employee to comply with such
covenants, the Company would not have agreed to enter into this Agreement.
The
Company and Employee have independently consulted with their respective counsel
and have been advised concerning the reasonableness and propriety of such
covenants with specific regard to the nature of the business conducted by the
Company and all interests of the Company. Employee agrees that the covenants
of
Sections 7, 8 and 9 are reasonable and valid. If Employee commits a breach
of
any of the provisions of Sections 7, 8 or 9 hereof, such breach shall be deemed
to be grounds for termination for Cause. In addition, notwithstanding the
provisions of Sections 8 and 9, Employee acknowledges that the Company will
have
no adequate remedy at law if he violates any of the terms hereof. Employee
therefore understands and agrees that the Company shall have without prejudice
as to any other remedies:
(i) the
right
upon application to any court of proper jurisdiction to a temporary restraining
order, preliminary injunction, injunction, specific performance or
other
equitable relief and
(ii) the
right
to apply to any court of proper jurisdiction, to require Employee to account
for
and pay over all compensation, profits, monies, accruals, increments and other
benefits (collectively the "Benefits") derived or received by Employee as a
result of any transaction constituting a breach of any of the provisions of
Sections 8 or 9, and, if a court so orders, Employee hereby agrees to account
for and pay over such Benefits to the Company.
11. Independence;
Severability and Non-Exclusivity.
Each
of
the rights enumerated in Sections 7, 8 or 9 hereof and the remedies enumerated
in Section 10 hereof shall be independent of the others and shall be in addition
to and not in lieu of any other rights and remedies available to the Company
at
law or in equity. If any provision of this Agreement, or any part of any of
them, is hereafter construed or adjudicated to be invalid or unenforceable,
the
same shall not affect the remainder of the covenants or rights or remedies
which
shall be given full effect without regard to the invalid portions. If any
covenant set forth herein is held to be invalid or unenforceable because of
the
duration of such provision or the area covered therebv the parties agree that
the court making such determination shall have the, power to reduce the duration
and/or area of such provision and in its reduced form said provision shall
then
be enforceable. No such holding of invalidity or unenforceability in one
jurisdiction shall bar or in any way affect the Company's right to the relief
provided in Section 10 or otherwise in the court of any other state or
jurisdiction within the geographical scope of such covenants as to breaches
of
such covenants in such other respective states or jurisdictions, such covenants
being, for this purpose, severable into diverse and independent
covenants.
12. Conflicting
Agreements.
Employee
hereby represents that he is not bound by the terms of any agreement with any
previous employer, or with any other party, that would impair his right or
ability to enter the employ of the Company or perform fully his obligations
pursuant to this Agreement. Employee further represents and warrants that his
performance of all the terms of this Agreement and as an executive of the
Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence or
in
trust prior to his employment with the Company.
13. Successors;
Binding Agreement.
This
Agreement is personal to Employee and without the prior written consent of
the
Company shall not be assignable by Employee otherwise than by will or the laws
of descent and distribution. The Company shall be permitted to freely assign
its
rights, interests and obligations to any parent, subsidiary or affiliate, or
to
any other third party, which acquires all or substantially all of the stock
or
assets of the Company. This Agreement shall inure to the benefit of and be
enforceable by Employee's legal representatives.
14. Notices.
Any
notice or other communications required or permitted hereunder shall be in
writing and shall be deemed effective (i) upon personal delivery, if delivered
by hand and followed by
Notice
by
mail or facsimile transmission, (ii) three (3) days after the date of deposit
in
the mails if mailed by certified or registered mail (return receipt requested),
or (iii) on the next business day, if mailed by an overnight mail service to
the
parties or sent by facsimile transmission,
To
the
Company:
00
Xxxx
00xx Xxxxxx, Xxxxx 00X
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxx
Facsimile
No.: (000) 000-0000
with
copies to:
Xxxxxx
Xxxxxx Rosenman LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Facsimile
No. (000) 000-0000
To
Employee:
Xxxxx
Xxxxxxx
0000
Xxxxx Xxxx Xxxxx
Xxxxxx
Xxxxx, Xxxxxxx 00000 Facsimile:
with
copies to:
Johnson,
Pope, Xxxxx, Xxxxxx & Xxxxx LLP
000
Xxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxx, Esq.
Fax:
(000) 000-0000
or
at
such other address or telecopy number (or other similar number) as either party
may from time to time specify to the other. Any notice, consent or other
communication required or permitted to be given hereunder shall be deemed to
be
given on the date of mailing, personal delivery or telecopy or conclusively
other similar means (provided the appropriate answer back is received) thereof
and shall be presumed to have been received on the second business day following
the date of mailing or, in the case of personal delivery or telecopy or other
similar means, the day of delivery thereof, except that a change of address
shall not be effective until actually received.
15. Headings.
The
headings of this Agreement are for convenience of reference only and shall
not
affect in any manner any of the terms and conditions hereof.
16. Acts
and Documents.
The
parties agree to do, sign and execute all acts, deeds, documents and corporate
proceedings necessary or desirable to give full force and effect to this
Agreement.
17. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one and the same
agreement.
18. Modifications
and Waivers.
No
term,
provision or condition of this Agreement may be modified or discharged unless
such modification or discharge is authorized by the Board of Directors of the
Company and is agreed to in writing and signed by Employee. No waiver by either
party hereto of any breach by the other party hereto of any term, provision
or
condition of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any
prior or subsequent time.
19. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter herein and supersedes all prior agreements, negotiations
and
discussions between the parties hereto, there being no extraneous agreements.
This Agreement may be amended only in writing executed by the parties hereto
affected by such amendment.
20. Law
Governing.
Except
as
otherwise explicitly noted, this Agreement shall, be governed by and construed
in accordance with the laws of the State of New York (without giving effect
to
the principles of conflicts of law).
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
on
the day and year set forth above.
Xxxxx
Xxxxxxx
By:
Name:
Title:
