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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated and effective as of April 1, 1999, by and
between PRECISION RESPONSE CORPORATION, a corporation organized and existing
under the laws of the State of Florida (hereinafter referred to as "Employer"),
and XXXXXXX X. XXXXX, XX. (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employer is a Florida corporation engaged in interactive
customer service and marketing through the integration of its teleservicing,
Internet, database management and marketing and fulfillment capabilities;
WHEREAS, Employer desires to continue to employ Employee upon the
terms and conditions set forth below and Employee desires to continue such
employment upon such terms and conditions; and
WHEREAS, Employer and Employee desire to set forth in writing the
terms and conditions of their agreements and understandings with respect to
Employee's employment by Employer.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT
Employer hereby employs Employee, and Employee hereby accepts
employment by Employer, upon the terms and conditions set forth in this
Employment Agreement.
2. TERM
Subject to the provisions for earlier termination set forth
in Section 9 hereof, this Employment Agreement shall commence as of the date
hereof and shall continue until 5:00, p.m., March 31, 2002 (the "Initial
Employment Term"), with the Initial Employment Term to be automatically renewed
and extended for consecutive additional one year periods unless, at least sixty
(60) days prior to the expiration of the Initial Employment Term or any one
year renewal period thereof, either party hereto delivers to the other party
hereto written notice of such party's termination of this Employment Agreement
at the expiration of the Initial Employment Term or any one year renewal period
thereof (as the case may be). The Initial Employment Term together with any or
all one year renewal periods thereof are hereinafter collectively referred to
as the "Employment Term".
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3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
Employee represents and warrants to Employer that Employee is
free to continue employment with Employer as contemplated herein and has no
other written or oral obligations or commitments of any kind or nature which
would in any way interfere with Employee's continuation of employment pursuant
to the terms hereof or the full performance of Employee's obligations hereunder
or the exercise of Employee's best efforts in Employee's employment hereunder
or which would otherwise pose any conflict of interest.
4. DUTIES AND EXTENT OF SERVICES
A. Duties. Employee's duties and responsibilities
hereunder shall be those reasonably assigned to him from time to time by
Employer, consistent with the following: Employee shall, unless and until
otherwise determined by Employer, serve as Employer's Executive Vice
President-Business Development, and shall, subject to the direction of
Employer's Chief Executive Officer, have overall responsibility to supervise
and conduct Employer's day-to-day business development and client development
matters and such other duties and responsibilities as Employer's Chief
Executive Officer shall from time to time assign. In addition, unless and until
otherwise determined by Employer, Employee shall serve as President of
XXXXXXXXXX.XXX, Inc., a Delaware corporation and wholly-owned subsidiary of
Employer, and shall have with respect to such subsidiary such duties and
responsibilities as are normally and customarily assigned to, and are
consistent with acting as, the President of a company. Employee shall report
directly to Employer's Chief Executive Officer. Employee shall devote
substantially all of his work efforts to perform the duties and
responsibilities properly assigned to Employee hereunder or pursuant hereto to
the best of his abilities. However, Employee may devote a reasonable amount of
his time to civic, community or charitable activities and, with the prior
approval of the Chairman of the Board or Chief Executive Officer of Employer,
to serve as a director of other corporations or in a similar capacity with
other types of entities and as a member of committees of boards of directors of
such other corporations or comparable governing bodies of such other entities
and undertake other activities not expressly mentioned in this paragraph.
Employee may invest his personal assets as he deems appropriate so long as such
investments do not interfere with Employee's performance of the duties and
responsibilities properly assigned to him pursuant to this Employment
Agreement.
B. Rules and Regulations. Employee agrees to abide by the
rules and regulations of Employer promulgated by Employer from
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time to time with respect and applicable to Employer's senior executives
generally, provided that copies of such rules and regulations are provided to
Employee. Such rules and regulations are all hereby incorporated by reference
and made a part of this Employment Agreement.
C. Place of Service. Employee shall render his services
initially in northern Miami-Dade County, Florida, and shall not be obligated to
maintain his office in any place other than northern Miami-Dade County (i.e.,
not any further south in Miami-Dade County than the location of Employer's
executive offices as of the date of this Employment Agreement), Broward County
or Palm Beach County, Florida; provided, however, that Employee shall be
obligated to travel as necessary to fulfill his duties and responsibilities.
5. COMPENSATION
A. Base Compensation. Subject to the provisions of
Section 9 of this Employment Agreement, Employer shall pay salary to Employee
("Salary") at a rate of $300,000 per annum through the expiration of the
Employment Term unless otherwise mutually agreed in writing by the parties
hereto. Employer may decide, in its sole discretion, to increase (but not to
decrease) the Salary at any time during the Employment Term. Salary shall be
payable in accordance with Employer's normal payroll practices for its
employees and shall be subject to payroll deductions and tax withholdings in
accordance with Employer's usual practices and as required by law.
B. Bonus Compensation. Employee shall receive an annual
bonus in an amount to be determined by the Compensation Committee of the Board
of Directors of Employer in its sole and absolute discretion (the "Bonus
Amount"). Subject to the provisions regarding payment upon termination or
expiration of employment set forth in Section 9 hereof, each annual Bonus
Amount shall be paid on or before March 31 of each year of the Employment Term.
The Bonus Amount payable on or before each March 31 shall be based upon the
operating results of Employer and Employee's performance during the calendar
year (or the portion thereof in which Employee was employed hereunder)
immediately preceding such March 31. Each Bonus Amount shall be subject to
payroll deductions and tax withholdings in accordance with Employer's usual
payroll practices and as required by law.
C. Stock Option Plans. On or before December 31 of each
year (beginning December 31, 1999) during the Employment Term (or, with respect
to the final year of this Employment Agreement,
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upon the effective date of termination of Employee's employment if such
effective date is a date other than December 31) (each, an "Option Grant
Date"), Employer through the Compensation Committee of Employer shall cause to
be granted to Employee options to purchase that number of shares of Employer's
voting common stock which is at least equal to five percent (5%) of the
aggregate number of shares for which options for Employer's common stock were
granted since the last Option Grant Date (or, with respect to the first Option
Grant Date, since January 1, 1999) to Employer's employees and to Employer's
non-employee directors under any stock option plans (including incentive stock
option plans) of Employer, but excluding, in calculating the aggregate number
of shares for which options were granted, any stock options awarded to Xxxx
Xxxxxx, Xxxxx Xxxxxxx and/or Xxxxxxx X. Xxxxxx pursuant to a provision in their
respective employment agreements with Employer substantially the same as this
Subsection C. The terms (including price and vesting and/or exercise dates) of
the options granted to Employee shall be as determined by the Committee but
shall be comparable to the terms upon which options were generally granted to
other employees of Employer during the applicable period, subject to any
differences required under applicable tax laws with respect to incentive stock
options granted to Employee. In all events, the options granted to Employee
shall provide that Employee shall have at least ninety (90) days following
termination of Employee's employment for any reason other than death and that
Employee's personal representative or other legal representative shall have at
least one (1) year following Employee's death to exercise any or all of the
outstanding options granted to Employee to the extent they were exercisable on
the date of such termination of employment or, if Employee's employment is
terminated for reasons other than (i) Employee's death, Disability (as defined
in Section 9.B.) or voluntary resignation (but not Constructive Termination, as
defined in Section 9.B.) or (ii) for Cause (as defined in Section 9.B.), to
exercise any or all of such outstanding options (which shall all then be deemed
exercisable and fully vested, notwithstanding any stated vesting schedules) in
full. Furthermore and notwithstanding anything to the contrary contained
herein, all of the outstanding options of Employee shall be fully vested and
immediately exercisable (a) no later than the date of the expiration of the
Initial Employment Term or (b) upon a Change in Control (as defined in Section
9.F.).
6. FRINGE BENEFITS AND EXPENSES
A. Employee Benefits. Employee shall be entitled to such
benefits and fringe benefits (such as individual and family health, dental,
life and disability insurance and qualified and
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unqualified pension, profit sharing and deferred compensation plans) as are
made available by Employer from time to time, in Employer's sole discretion, to
Employer's senior executives generally.
B. Expenses. Employer shall reimburse Employee for
Employee's reasonable out-of-pocket costs and expenses incurred in connection
with the performance of Employee's duties and responsibilities hereunder,
subject to Employee's presentation of appropriate documentation and, if
requested, justification therefor.
C. Automobile. Employer shall provide to Employee an
automobile allowance of $850.00 per month during the Employment Term in order
to defray Employee's automobile expenses incurred in the performance of his
duties, but shall not be obligated to provide Employee with an automobile.
D. Directors' and Officers' Liability Insurance. Employer
will endeavor to maintain Employer's directors' and officers' liability
insurance at least at the same level of coverage as in effect as of the date
hereof.
7. VACATIONS Employee shall be entitled to six weeks
vacation each full year of the Employment Term (prorated for any partial year),
with full compensation, which, to the extent unused, may be carried over from
year to year (provided, however, that Employee shall not be entitled to be
compensated for any unused vacation days upon termination of employment). The
periods during which Employee will be absent from work for vacation shall be at
the reasonable discretion of Employer.
8. FACILITIES
Employer shall provide and maintain (or cause to be provided
and maintained) such facilities, equipment, supplies and personnel as are
reasonably necessary for Employee's performance of Employee's duties and
responsibilities under this Employment Agreement.
9. TERMINATION OF EMPLOYMENT
A. Termination Events. Employee's employment under this
Employment Agreement may be terminated by Employer only as follows: with or
without Cause (as hereinafter defined), effective upon the delivery of written
notice to Employee; upon Employee's death; or upon Employee becoming Disabled
(as hereinafter defined) and receiving written notice of termination from
Employer to that
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effect within ninety (90) days after being deemed Disabled. Employee may
terminate Employee's employment under this Employment Agreement without being
in breach hereunder by giving written notification of (i) Employee's
resignation to Employer which shall specify a resignation date no earlier than
ninety (90) days following the date of delivery of such notice of resignation
or (ii) Constructive Termination (as hereinafter defined) of Employee's
employment under this Employment Agreement (subject to the provisions of
Section 9.B. hereof relating to Constructive Termination). Employee's
employment under this Employment Agreement shall be terminated upon expiration
of the Employment Term pursuant to Section 2 hereof.
B. Definitions of Cause, Disabled and Constructive
Termination. For purposes of this Employment Agreement, "Cause" shall mean: (i)
commission of a felony, or commission of acts of fraud, embezzlement or the
like on or with respect to Employer; (ii) habitual drunkenness during business
hours or at Employer's premises; (iii) use of illicit drugs during business
hours or at Employer's premises; (iv) abandonment of employment duties (other
than by reason of death or becoming Disabled); or (v) material breach by
Employee of this Employment Agreement having a material adverse effect on
Employer or its businesses, operations or financial condition, which breach, if
curable, is not cured by Employee within thirty (30) days following Employee's
receipt of written notice thereof (such notice shall specify in reasonable
detail the nature of the material breach and the curative steps, if curable,
required to be taken). Employee shall be deemed "Disabled" for purposes of this
Employment Agreement (a) if Employee is unable, due to physical, mental or
emotional illness or injury, to perform substantially all of Employee's duties
and responsibilities for Employer for a continuous period of one hundred and
twenty (120) days, or (b) if Employee is adjudicated as an incompetent or has a
guardian appointed to handle Employee's affairs. If clause (a) above applies,
Employee shall be deemed Disabled on the last day of the 120 day period. If
clause (b) above applies, Employee shall be deemed Disabled on the date of
adjudication as an incompetent or the appointment of the guardian, whichever
occurs first. For purposes of this Employment Agreement, "Constructive
Termination" shall mean: (x) Employer has delegated to another or others a
material portion of Employee's duties or responsibilities provided for in
Section 4.A. hereof (and shall include, without limitation, removal of Employee
from the office of Executive Vice President - Business Development of Employer
even if Employee's day-to-day duties are to remain substantially the same),
other than and excluding (1) for Cause and (2) any or all of Employee's duties
and responsibilities related to XXXXXXXXXX.XXX, Inc. (including, without
limitation, removal of Employee from the
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office of President of XXXXXXXXXX.XXX, Inc.), and Employer fails to confirm in
writing, and implement, the reinstatement of such material portion of
Employee's duties and responsibilities and/or office to Employee within thirty
(30) days after receipt by each of the Chairman of the Board and Chief
Executive Officer of Employer of Employee's written notice of protest (as
provided in the next sentence), (y) Employer attempts, without Employee's prior
written consent, to relocate Employee's office outside the location specified
in Section 4.C. hereof, or (z) the position of Chairman of the Board or Chief
Executive Officer of Employer becomes vacant for any reason and either (1) the
vacancy is filled by a person other than Xxxx X. Xxxxxx, Xxxxx Xxxxxxx,
Employee or another person not an employee of Employer immediately prior to
becoming the Chairman of the Board or Chief Executive Officer of Employer or
(2) the vacancy is not filled within sixty (60) days of the date of such
vacancy. In the event of Constructive Termination of Employee's employment
under this Employment Agreement, Employee may terminate Employee's employment,
provided that he has given written notice of protest to each of the Chairman of
the Board and Chief Executive Officer of Employer within thirty (30) days of
the occurrence of the event causing the Constructive Termination setting forth
the manner in which the Constructive Termination has occurred (and such
Constructive Termination is not timely corrected, as provided in the case of a
Constructive Termination under clause (x) of the preceding sentence).
C. Effect of Termination For Cause or Employee's
Resignation. In the event that Employee's employment under this Employment
Agreement is terminated by Employer with Cause, or because Employee resigns
from Employee's employment, Employer shall pay to Employee, within thirty (30)
days following the date of such termination or resignation, (i) the Salary, if
any, accrued and unpaid through the date of such termination or resignation,
and (ii) if the Bonus Amount of Employee for the prior year has been declared
by Employer, but not yet paid to Employee, the Bonus Amount for such prior
year, and shall pay and provide to Employee the amounts and items payable and
to be provided under Section 6 through the date of such termination or
resignation; and Employee shall not be entitled to any other compensation,
remuneration or other sums provided for in this Employment Agreement or to
which Employee might otherwise be entitled hereunder or at law or in equity.
D. Compensation Upon Death or Disability. Upon the death
of Employee, or termination of employment because Employee is Disabled,
Employer shall pay to Employee, Employee's legal guardian or the legal
representative of Employee's estate (or heir as designated by the legal
representative of Employee's estate at such
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time), within thirty (30) days following the date of Employee's death or
termination, the Salary and Bonus Amount, if any, accrued and unpaid through
the date of termination and shall pay and provide to Employee, Employee's legal
guardian or the legal representative of Employee's estate the amounts and items
payable and to be provided under Section 6 through the date of such
termination; and Employee (or such legal guardian, legal representative or any
heirs) shall not be entitled to any other compensation, remuneration or other
sums provided for in this Employment Agreement or to which Employee might
otherwise be entitled hereunder or at law or in equity (except with respect to
benefits which become payable under any employee benefit plans of Employer as a
result of Employee's death or disability). In the event that death or
termination of employment as a result of Employee becoming Disabled occurs
during a year and prior to any Bonus Amount of Employee being declared by
Employer for such year, the Bonus Amount under this Subsection D. for such
partial year of employment shall be prorated through the date of such death or
termination based upon the prior year's Bonus Amount.
E. Compensation Upon Termination Without Cause or
Constructive Termination or Expiration. In the event that Employer (or its
successor) terminates Employee's employment under this Employment Agreement
without Cause (other than in connection with or in contemplation of a Change in
Control (as hereinafter defined) as provided in Subsection F. below), Employee
terminates his employment as a result of the occurrence of a Constructive
Termination to the extent and in the manner permitted hereunder or upon
expiration of the Employment Term pursuant to the terms of Section 2,
Employee's sole and exclusive compensation and remedy hereunder shall be to
receive from Employer, and Employer shall pay to Employee, (i) the amount of
Salary and Bonus Amount, if any, accrued and unpaid through the date of
termination or expiration, and the amounts and items payable or to be provided
under Section 6 through the date of termination or expiration, payable within
thirty (30) days following the date of termination or expiration of employment,
and (ii) (A) in the case of termination without Cause or Constructive
Termination, an amount in cash equal to the sum of (1) the Salary that Employee
would have received during the greater of (x) the one year period following the
date of such termination of Employee's employment and (y) the remainder of the
Initial Employment Term (if such termination occurs during the Initial
Employment Term) and (2) $150,000 or (B) in the case of expiration of the
Employment Term pursuant to Section 2 hereof as a result of Employer delivering
to Employee a written notice of termination of this Employment Agreement, an
amount in cash equal to the Salary for one (1) full year. Such cash amount
payable under clauses (A) or (B) above shall be payable one-half (1/2) within
thirty (30)
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days following the date of termination of employment or expiration and the
balance (the other one-half (1/2)) payable in equal consecutive monthly
installments over the period that Employee was entitled to be paid the Salary
under clauses (A) or (B) above (as the case may be), with the first such
installment payable sixty (60) days following the date of termination of
employment or expiration and each subsequent installment payable on the same
day of each successive month until payment is made in full. In the event that
termination of employment without Cause, as a result of Constructive
Termination or upon expiration of this Employment Agreement occurs during a
year and prior to any Bonus Amount of Employee being declared by Employer for
such year, the Bonus Amount under this Subsection E. for such partial year of
employment shall be prorated through the date of such termination based upon
the prior year's Bonus Amount. Notwithstanding anything to the contrary
contained in this Subsection E., if termination of employment without Cause, as
a result of Constructive Termination or upon expiration of this Employment
Agreement occurs before a Change in Control and this Subsection E. is followed
by the parties, but within one hundred eighty (180) days thereafter with
respect to termination of employment without Cause or as a result of
Constructive Termination or within one hundred twenty (120) days thereafter
with respect to expiration of this Employment Agreement a Change in Control
occurs, then Subsection F. shall supersede this Subsection E. and the balance
of the unpaid amounts of the severance and other payments required under
Subsection F. shall be immediately (but in all events within thirty (30) days
after such Change in Control) paid by Employer (or its successor) to Employee.
F. Compensation Upon a Change in Control. Notwithstanding
the provisions of Subsection E. above, in the event that (i) Employer (or its
successor) terminates Employee's employment under this Employment Agreement
without Cause within one hundred eighty (180) days before or after a Change in
Control (as hereinafter defined), (ii) Employee terminates his employment to
the extent and in the manner permitted under this Employment Agreement as a
result of the occurrence of a Constructive Termination within one hundred
eighty (180) days before or after a Change in Control or (iii) Employer (or its
successor)(but not Employee) delivers to Employee a written notice of
termination pursuant to Section 2 terminating this Employment Agreement at the
expiration of the Employment Term and such expiration occurs within one hundred
and twenty (120) days before or one hundred eighty (180) days after a Change in
Control, Employee's sole and exclusive compensation and remedy hereunder shall
be to receive from Employer (or its successor), and Employer (or its successor)
shall pay to Employee within thirty (30) days following the date of termination
of employment or expiration, (a) the amount of Salary and Bonus
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Amount, if any, accrued and unpaid through the date of termination of
employment or expiration, and the amounts and items payable or to be provided
under Section 6 through the date of termination of employment or expiration,
and (b) a lump sum severance payment in cash equal to 2.99 times an amount
equal to the average of the sum of the annual Salary and Bonus Amount paid to
Employee each year during the Employment Term. For purposes of this Subsection
F., (1) a "Change in Control" means that (x) neither Xxxx Xxxxxx (for these
purposes, counting all common stock directly or indirectly beneficially owned
by Xxxx Xxxxxx'x Affiliates) nor Xxxxx Xxxxxxx (for these purposes, counting
all common stock directly or indirectly beneficially owned by Xxxxx Xxxxxxx'x
Affiliates) beneficially owns at least 10% of the issued and outstanding common
stock of Employer (or its successor); (y) neither Xxxx Xxxxxx (for these
purposes, counting all common stock directly or indirectly beneficially owned
by Xxxx Xxxxxx'x Affiliates) nor Xxxxx Xxxxxxx (for these purposes, counting
all common stock directly or indirectly beneficially owned by Xxxxx Xxxxxxx'x
Affiliates) is the stockholder of Employer (or its successor) beneficially
owning the highest number of issued and outstanding shares of common stock of
Employer (or its successor); or (z) Xxxx Xxxxxx and/or Xxxxx Xxxxxxx do not
occupy the positions of Chairman of the Board and Chief Executive Officer of
Employer (or its successor); (2) "Affiliate" means, with respect to Xxxx Xxxxxx
or Xxxxx Xxxxxxx, an immediate family member of his, a trust principally for
his benefit and/or the benefit of his family members and/or lineal descendants,
or a family limited partnership or any other entity the direct or indirect
beneficial or pecuniary owners of which are principally him, his immediate
family members and/or trusts or other entities principally for the benefit of
him, his family members and/or lineal descendants; and (3) "Immediate family
members" mean, with respect to Xxxx Xxxxxx or Xxxxx Xxxxxxx, his spouse,
children, parents, siblings or other lineal descendants. For purposes of clause
(a) of this Subsection F., any Bonus Amount for a partial year of employment
shall be prorated through the date of such termination or expiration(based upon
the prior year's Bonus Amount, if any) and for purposes of clause (a) or clause
(b) of this Subsection F., if Employee has not previously earned a Bonus Amount
under this Employment Agreement, the Bonus Amount shall be deemed to be
$225,000. Nothing in this Subsection F. shall be deemed to limit Employee's
rights as provided under Subsection E. with respect to a termination without
Cause or Constructive Termination occurring more than 180 days before or more
than 180 days after a Change in Control or an expiration of this Employment
Agreement occurring more than 120 days before or more than 180 days after a
Change in Control.
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G. Key-Man Insurance. In the event that Employer has
obtained or obtains a key-man insurance policy (the "Policy") on the life of
Employee, Employer shall be the sole owner thereof and all proceeds payable in
respect thereof shall be the property solely of Employer. In the event that
Employee's employment terminates for any reason other than Employee's death,
Employee may request that the Policy be assigned to Employee by giving written
notice to Employer to that effect. Subject to obtaining any requisite consent
from the insurer, Employer shall, if Employee has so requested, assign the
Policy to Employee subject to Employee's reimbursement to Employer of any
premiums paid by Employer which relate to any period following the date of
termination of Employee's employment, and the cash value, if any, of the
Policy. In the event that Employer desires to obtain any such Policy, Employee
shall fully cooperate in Employer's efforts, including submitting to medical
examinations and tests and executing and delivering applications and
information statements.
10. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
A. Confidential Information. Employee acknowledges that
Employee has been informed by Employer of Employer's policy to maintain as
secret and confidential all information and materials relating to (i) the
financial condition, operations, business and interests of Employer, (ii) the
systems, know-how, records, products, services, cost information, inventions,
computer and Internet software, marketing and sales techniques and/or programs,
methods, methodologies, manuals, lists and other trade secrets from time to
time acquired, sold, developed, maintained and/or used by Employer, and (iii)
the nature and terms of Employer's relationships with its clients, suppliers,
lenders, underwriters, vendors, consultants, independent contractors,
attorneys, accountants and employees (all such information and materials being
hereinafter collectively referred to as "Confidential Information"). Employee
further acknowledges that such Confidential Information is of great value to
Employer and has been developed by Employer as a result of substantial effort
and expense. Therefore, Employee understands that it is reasonably necessary to
protect Employer's good will, trade secrets and business interests that
Employee agree and, accordingly, Employee does hereby agree, that Employee will
not directly or indirectly (except where authorized by the Board of Directors,
Chairman of the Board or Chief Executive Officer of Employer for the benefit of
Employer and/or as required in the course of employment) at any time hereafter
divulge or disclose for any purpose to any persons, firms, corporations or
other entities (hereinafter referred to collectively as "Third Parties"), or
use or cause or authorize any
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Third Parties to use, any such Confidential Information, except as otherwise
required by law.
B. Employer's Materials. In accordance with the
foregoing, Employee furthermore agrees that (i) Employee will at no time retain
or remove from the premises of Employer any products, prototypes, drawings,
notebooks, computer or Internet software or discs, tapes or similar containers
of software, manuals, data, books, records, materials or documents of any kind
or description of Employer or related to its business for any purpose
unconnected with the performance of Employee's duties with Employer and (ii)
upon the cessation or termination of Employee's employment with Employer for
any reason, Employee shall forthwith deliver or cause to be delivered up to
Employer any and all drawings, notebooks, software programs or discs, tapes or
similar containers of software, manuals, data, books, records, materials and
other documents and materials in Employee's possession or under Employee's
control relating to any Confidential Information or any other material or thing
which is the property of Employer.
11. COVENANT-NOT-TO-COMPETE
In view of (a) the Confidential Information to be obtained by
or disclosed to Employee, and (b) the consideration payable to Employee under
this Employment Agreement, and as a material inducement to Employer to enter
into this Employment Agreement, Employee covenants and agrees that, (i) for as
long as Employee is employed by Employer and for a period of 24 months after
the date Employee ceases for any reason to be employed by Employer, Employee
shall not, directly or indirectly, (A) sell any products or services sold or
offered by Employer to any person or entity who is or was a client of Employer
and for or to whom Employer is performing services or selling products or for
or to whom Employer has performed services or sold products at any time during
the one-year period ending on Employee's termination of employment or (B)
solicit the services of, or hire, directly or indirectly, whether on Employee's
own behalf or on behalf of others, any managerial or executive employee,
account manager or other sales or marketing employee, programmer, information
services employee (including, without limitation, network or other information
services or Internet operation employee) or database management or marketing
employee of Employer who was or is employed by Employer at any time during the
two-year period ending on the date of termination of Employee's employment, and
(ii) for as long as Employee is employed by Employer and thereafter for the
Severance Period (as hereinafter defined), Employee shall not, directly or
indirectly, engage in any venture, enterprise, activity or business, passively
or actively, as an owner, consultant,
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adviser, participant, employee, agent or in any other capacity, competitive
with the business of Employer anywhere within the continental United States;
provided, however, that nothing in this Section 11 shall prohibit Employee from
owning as a passive investor beneficially and/or of record less than 5% of the
outstanding equity securities of any entity whose equity securities are
registered under the Securities Exchange Act of 1934, as amended, or are listed
for trading on any United States or foreign stock exchange. Employee
acknowledges that the business of Employer is national in scope, that one can
effectively compete with such business from anywhere in the continental United
States, and that, therefore, such geographical area of restriction is
reasonable in the circumstances to protect Employer's trade secrets and other
legitimate business interests. For purposes of this Section 11, the "Severance
Period" shall mean: (x) in the case of a termination of Employee's employment
as a result of Employee becoming Disabled or a termination of Employee's
employment with Cause or as a result of the resignation of employment by
Employee or in the case of the expiration of the Employment Term resulting from
the election of Employee or Employer not to renew, a period of 12 months after
the termination date of Employee's employment with Employer; and (y) in the
case of termination of Employee's employment without Cause or as a result of
the occurrence of a Constructive Termination, the greater of (1) a period of 12
months after the termination date of Employee's employment with Employer or (2)
the remainder of the Initial Employment Term (if such termination occurs during
the Initial Employment Term).
12. EMPLOYER'S REMEDIES FOR BREACH OF SECTIONS 10 AND 11
Employee covenants and agrees that if Employee shall violate
or breach any of Employee's covenants or agreements provided for in Section 10
or 11 hereof, Employer shall be entitled to an accounting and repayment of all
profits, compensation, commissions, remunerations and benefits which Employee
directly or indirectly has realized and realizes as a result of, growing out of
or in connection with any such violation or breach. In addition, in the event
of a breach or violation or threatened or imminent breach or violation of any
provisions of Section 10 or 11 hereof, Employer shall be entitled to a
temporary and permanent injunction or any other appropriate decree of specific
performance or equitable relief from a court of competent jurisdiction in order
to prevent, prohibit or restrain any such breach or violation or threatened or
imminent breach or violation by Employee. Employer shall be entitled to such
injunctive or other equitable relief in addition to any ascertainable damages
which are suffered, together with reasonable attorneys' and paralegals' fees
and costs and other costs incurred in connection with any such litigation, both
before
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and at trial and at all tribunal levels. It is understood that resort by
Employer to such injunctive or other equitable relief shall not be deemed to
waive or to limit in any respect any other rights or remedies which Employer
may have with respect to such breach or violation.
13. REASONABLENESS OF RESTRICTIONS
A. Reasonableness. Employee acknowledges that any breach
or violation of Section 10 or 11 hereof will cause irreparable injury and
damage and incalculable harm to Employer and that it would be very difficult or
impossible to measure all of the damages resulting from any such breach or
violation. Employee further acknowledges that Employee has carefully read and
considered the provisions of Sections 10, 11 and 12 hereof and, having done so,
agrees that the restrictions and remedies set forth in such Sections
(including, but not limited to, the time period, geographical and types of
restrictions imposed) are fair and reasonable and are reasonably required for
the protection of the business, trade secrets, interests and good will of
Employer.
B. Severability. Employee understands and intends that
each provision and restriction agreed to by Employee in Sections 10, 11 and 12
hereof shall be construed as separate and divisible from every other provision
and restriction. In the event that any one of the provisions of, or
restrictions in, Sections 10, 11 and/or 12 hereof shall be held to be invalid
or unenforceable, and is not reformed by a court of competent jurisdiction
(which a court, in lieu of striking a provision entirely, is urged by the
parties to do), the remaining provisions thereof and restrictions therein shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable provisions or restrictions had not been included. In the event
that any such provision relating to time period, geographical and/or type of
restriction shall be declared by a court of competent jurisdiction to exceed
the maximum or permissible time period, geographical or type of restriction
such court deems reasonable and enforceable, said time period, geographical
and/or type of restriction shall be deemed to become and shall thereafter be
the maximum time period or geographical area and/or type of restriction which
such court deems reasonable and enforceable.
C. Survivability. The restrictions, acknowledgments,
covenants and agreements of Employee set forth in Sections 10, 11, 12 and 13 of
this Employment Agreement shall survive any termination of this Employment
Agreement or of Employee's employment (for any reason, including expiration of
the Employment Term).
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D. Definition of Employer. For purposes of Sections 10,
11, 12 and 13 of this Employment Agreement, the term "Employer" includes the
Employer and any parent corporation of Employer and all subsidiaries of
Employer and its parent corporation (if any).
14. LAW APPLICABLE
This Employment Agreement shall be governed by and construed
pursuant to the laws of the State of Florida.
15. NOTICES
Any notices required or permitted to be given pursuant to
this Employment Agreement shall be sufficient if in writing, and delivered
personally, by commercial courier service or sent by certified mail, return
receipt requested, and sent to Employer's executive offices, to the attention
of the Chief Executive Officer, if mailed to Employer, and to Employee's then
current residence, if mailed to Employee, and shall be effective only upon
actual receipt by the party to whom it is given.
16. SUCCESSION
This Employment Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives,
heirs, assignees and/or successors in interest of any kind whatever; provided,
however, that Employee acknowledges and agrees that Employee cannot assign or
delegate any of Employee's rights, duties, responsibilities or obligations
hereunder to any other person or entity. Employer shall have the right to
assign its rights and delegate its duties under this Employment Agreement,
provided that, in the event of any such assignment other than in connection
with a merger, consolidation or similar reorganization or the sale of all or
substantially all of the assets of Employer (or its successor), Employer shall
remain liable for all of its obligations hereunder.
17. ENTIRE AGREEMENT
This Employment Agreement, together with the Registration
Rights Agreement attached hereto as Exhibit "A", constitute the entire final
agreement between the parties with respect to, and supersedes any and all prior
and contemporaneous agreements between the parties hereto both oral and written
(including, without limitations, that certain employment agreement dated as of
May 15, 1996 between the parties, as amended by that certain Amendment to
Employment Agreement dated November 10, 1997 between the parties)
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concerning, the subject matter hereof and may not be amended, modified or
terminated except by a writing signed by the parties hereto.
18. SEVERABILITY
If any provision of this Employment Agreement shall be held
to be invalid or unenforceable, and is not reformed by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision and shall not in any way affect or render invalid or unenforceable
any other provision of this Employment Agreement, and this Employment Agreement
shall be carried out as if such invalid or unenforceable provision were not
herein contained.
19. NO WAIVER
A waiver of any breach or violation of any term, provision or
covenant herein contained shall not be deemed a continuing waiver or a waiver
of any future or past breach or violation. No oral waiver shall be binding.
20. ATTORNEYS' FEES
In the event that either of the parties to this Employment
Agreement institutes suit against the other party to this Employment Agreement
to enforce or declare any of their respective rights hereunder, the prevailing
party in such action shall be entitled to recover from the other party all
reasonable costs thereof, including reasonable attorneys' and paralegals' fees
and costs incurred before and at trial and at all tribunal levels, and whether
or not suit or any other proceeding is instituted.
21. COUNTERPARTS
This Employment Agreement may be executed in counterparts,
each of which shall be an original, but both of which together shall constitute
one and the same instrument.
22. INDEPENDENT COUNSEL
THE PARTIES HEREBY ACKNOWLEDGE THAT EACH OF THEM HAS HAD THE
OPPORTUNITY TO RETAIN AND TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL WITH
RESPECT TO, AND IN CONNECTION WITH ALL STAGES OF THE NEGOTIATION, PREPARATION
AND EXECUTION OF, THIS EMPLOYMENT AGREEMENT.
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands on
the day and year first above written.
EMPLOYER:
PRECISION RESPONSE CORPORATION, a
Florida corporation
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Chief Executive Officer
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx, Xx.
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XXXXXXX X. XXXXX, XX.
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