EMPLOYMENT AGREEMENT
May 10, 2001
The parties to this agreement are Platinum Acquisition Corp., a Texas
corporation (the "Company"), and Xxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
The Executive is an executive officer of Platinum Communications, Inc., a
Texas corporation ("Platinum"). Pursuant to the Agreement and Plan of Merger
among Direct Insite Corp., a Delaware corporation ("Direct Insite"), the
Company, Platinum, the Executive and Xxx Xxxxxxx (the "Merger Agreement"),
Platinum will merge with and into the Company. As contemplated by, and as a
condition to the closing pursuant to, the Merger Agreement, the Company and the
Executive have agreed upon the terms of Executive's employment with the Company.
It is therefore agreed as follows:
1. Employment. Effective upon the Closing (as defined in the Merger
Agreement), the Company shall employ the Executive, and the Executive hereby
accepts such employment by the Company, for the period commencing on such
Closing and ending on the third anniversary of the date of such Closing, unless
extended or earlier terminated as set forth herein (the "Term").
2. Positions and Duties. The Executive shall be Vice President -- Sales of
the Company and shall have responsibility for the sales of the Company
consistent with those responsibilities at Platinum prior to the closing of the
transactions contemplated by the Merger Agreement. The Executive shall perform
his duties pursuant to this section 2 consistent with the directives of the
Chief Executive Officer and Board of Directors of the Company, in the best
interests of the Company and Direct Insite, to the best of the Executive's
ability and in a diligent manner. The Executive shall devote his full skills and
efforts and his entire business time during normal office hours to the
performance of those duties and to the furtherance of the interests of the
Company and Direct Insite. All of such duties and responsibilities shall be
subject to policies, guidelines and procedures as may be specified by the Board
of Directors of the Company from time to time. All of the Executive's duties
hereunder shall be performed in the offices of the Company as currently or in
the future located within the Dallas area and he shall not be required to
relocate outside the Dallas area; provided that he shall travel from time to
time as may be reasonably required in the performance of such duties, and that
in the event that such current offices are substantially reduced in size and
scope, then the Executive will commute to an alternative location as reasonably
requested by the Company at the Company's reasonable expense.
3. Remuneration.
(a) The Executive shall receive a base salary of $125,000 per annum,
payable in accordance with the Company's customary practice.
(b) In addition to the bonus referred to in section 3(c) below, the
Executive shall be entitled to receive bonuses in the sole discretion of the
Board of Directors of the Company.
(c) The Executive shall earn, in addition to any other compensation
pursuant to this Agreement, a bonus with respect to the period from the date of
Closing through April 30, 2002 (the "Bonus Period") in an aggregate amount of up
to $135,000 (the "Maximum Bonus") as follows:
(i) The Company shall pay to the Executive, and the Executive shall
have earned hereunder, an amount equal to one-third of the Maximum Bonus in
the event that both (A) the cash receipts of the Company during the Bonus
Period received pursuant to the Company's written agreement with Vitcom
Corporation ("Vitcom") in payment under ordinary and arms-length practices
for products and/or services actually rendered to Vitcom during the Bonus
Period shall equal or exceed $350,000, and (B) the cash receipts of the
Company during the Bonus Period from customers of the Company who were not
customers of the Company, Platinum or Direct Insite prior to the date
hereof (excluding any and all cash receipts from International Business
Machines Corporation and its affiliates ("IBM"), and including only such
cash receipts from Vitcom to the extent the amount thereof exceeds the
aggregate cash receipts of the Company, Platinum and Direct Insite from
Vitcom during the one-year period ending o the date hereof) in payment
under ordinary and arms-length practices for products and/or services
actually rendered during the Bonus Period shall equal or exceed $500,000;
and
(ii) The Company shall pay to the Executive, and the Executive shall
have earned hereunder, an amount equal to one-third of the Maximum Bonus in
the event that the consolidated gross revenue (excluding any and all
revenue associated with the processing of data traffic as contemplated by
the Statement of Work of March 2001 with IBM) of Direct Insite (including
the Company) during the Bonus Period shall equal or exceed $6.2 million,
determined in accordance with Section 3(d) below; and
(iii) The Company shall pay to the Executive, and the Executive shall
have earned hereunder, an amount equal to one-third of the Maximum Bonus in
the event that either (A) the consolidated gross revenue (excluding any and
all revenue associated with the processing of data traffic as contemplated
by the Statement of Work of March 2001 with IBM) of Direct Insite
(including the Company) during the Bonus Period shall equal or exceed $7.2
million, determined in accordance with Section 3(d) below, or (B) during
the Bonus Period Direct Insite or any of its subsidiaries enters into an
arms-length, binding and enforceable contract with IBM with respect to the
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provision to IBM of billing and rating products and/or services; provided,
however, that in the event that one-third of the Maximum Bonus is earned
pursuant to this clause (iii) as a result of the satisfaction of clause (B)
above, then (x) such one-third of the Maximum Bonus shall not be payable
hereunder unless and until a like amount of cash receipts are received by
Direct Insite under such contract, and (y) in the event that the portions
of the Maximum Bonus contemplated by clauses (i) and (ii) above also are
earned, the Company shall pay to the Executive, and the Executive shall
have earned hereunder, at the same time such one-third of the Maximum Bonus
is paid, an additional bonus (in excess of the Maximum Bonus) in the amount
of $50,000; and
(iv) Notwithstanding anything to the contrary herein, (A) in no event
shall the amount payable pursuant to this Section 3(c) exceed the Maximum
Bonus, except as provided in clause (y) of clause (iii) above, and (B)
neither Direct Insite nor any of its subsidiaries shall be required to
devote any extraordinary expense or resources of a "business development"
nature to facilitate the achievement of any of the bonus thresholds
referred to in this Section 3(c), it being agreed that such achievements
are to be accomplished principally through the efforts of the Executive.
(d) For purposes of Section 3(c), the consolidated gross revenue of Direct
Insite shall be that amount as determined under and in accordance with the terms
and provisions of Section 2.4(b) of the Merger Agreement.
(e) Pursuant to the existing or any subsequent stock option plan (the
"Plan") of Direct Insite, promptly following the Closing under the Merger
Agreement, the Executive shall receive options (the "Options") to purchase 8,000
shares of the common stock of Direct Insite. The Options shall be non-qualified
stock options, exercisable at a price no greater than the fair market value of
such common stock on the date the Options are granted. The Options shall vest
and become exercisable with respect to one-third of the shares covered thereby
on each of the three successive anniversaries of the date hereof during the term
hereof in accordance with the terms and provisions of the Plan, as may be
amended from time to time, and shall otherwise be subject to the terms and
conditions of a stock option contract relating thereto in the form generally
used for stock option grants by Direct Insite. Notwithstanding any other term or
provision of this Agreement to the contrary, the Executive understands and
agrees that upon or after the Executive's termination of employment hereunder
for any reason, the Options shall only be exercisable if and to the extent that
they had become exercisable before such termination and shall remain exercisable
only to the extent provided by the Plan.
(f) Direct Insite, by its signature below, guarantees performance by Direct
Insite of the Company's payment obligations under this section 3.
4. Benefits; Expenses. During the Term, the Executive (i) shall be entitled
to such health, medical, insurance and fringe benefits as are available
generally to similar-level employees of the Company (or their counterparts at
Direct Insite); and (ii) shall be reimbursed for all reasonable and necessary
expenses incurred in connection with the business of the Company, upon the
submission of appropriate documentation with respect thereto.
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5. Continuation, Termination, Death and Disability.
(a) The Term may be extended beyond the initial period set forth in section
1 hereof as mutually agreed upon by the Company and the Executive.
(b) The Company may terminate this agreement and the Executive's employment
hereunder at any time for "Cause", which shall mean (i) the commission of fraud
or embezzlement on the part of the Executive, (ii) a breach by the Executive of
section 6 of this agreement, (iii) the conviction of the Executive of, or the
pleading by the Executive of guilty or no contest to, (x) any felony or (y) any
crime involving moral turpitude on his part and/or (iv) a material failure by
the Executive to discharge his duties, responsibilities and obligations under
this agreement after the Executive shall have been notified in writing of such
failure and shall have had a reasonable time to cure the same. In the event of
the termination during the Term by the Company of the Executive's employment
hereunder for Cause, the Executive shall be entitled to receive his base salary
accrued but not paid through the date of termination; provided that, in the
event that such termination is made pursuant to the terms of clause (iv) above,
then the Executive also shall be entitled to any bonus earned in accordance with
the provisions of Section 3(c) hereof with respect to the year in which such
termination occurs up to a maximum amount of $37,500.
(c) In the event of the death or disability (as determined in accordance
with the disability insurance policy then in place and applicable to the
Executive or, in the absence of any such policy, as determined in the opinion of
a duly licensed physician selected by the Company and reasonably acceptable to
the Executive that because of physical or mental illness, the Executive has
become substantially unable to perform the duties and responsibilities required
of him hereunder for a period of six months) of the Executive during the Term,
the Executive's employment shall terminate as of the date of death or the date
of notice from the Company to the Executive terminating his employment due to
his disability and the Executive's estate or the Executive, as the case may be,
shall be entitled to receive all base salary accrued but not paid through the
date of death or disability, as the case may be, plus his pro rata portion of
any bonus earned in accordance with the provisions of Section 3(c) hereof (such
pro-ration to be based on the portion of the Bonus Period elapsed upon such
termination).
6. Confidentiality; Nonsolicitation; Noncompetition.
(a) The Executive acknowledges the time and expense incurred by Direct
Insite and the Company and their respective predecessors and affiliates in
connection with developing proprietary and confidential information in
connection with their business and operations. The Executive agrees that he will
not divulge, communicate, use to the detriment of Direct Insite or the Company
or any of their subsidiaries or affiliates (collectively the "Companies") or for
the benefit of any other person, firm or entity, or misappropriate in any way,
any confidential information or trade secrets relating to the Companies or any
of their businesses including, without limitation, business strategies,
operating plans, acquisition strategies (including the identities of (and any
other information concerning) possible acquisition candidates), pro forma
financial information, market analyses, acquisition terms and conditions,
personnel information, trade processes, manufacturing methods, know-how,
customer lists and relationships, supplier lists, or other non-public
proprietary and confidential information relating to the Companies; provided
that the following will not constitute such confidential information or trade
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secrets for purposes of this agreement: (a) information which is or becomes
generally available to the public other than as a result of its disclosure,
directly or indirectly, by the Executive, and (b) information which is required
to be and actually is disclosed by the Company solely as required by law.
(b) From and after the date hereof and until two years after the
termination of the Executive's employment hereunder, the Executive shall not,
directly or indirectly, for himself or on behalf of any other person, firm or
entity, employ, engage or retain any person who at any time during the
then-preceding 12-month period shall have been an employee of any of the
Companies or contact any supplier, customer or employee of any of the Companies
for the purpose of soliciting or diverting any such supplier, customer or
employee from the Companies or otherwise interfering with the business
relationship of the Companies with any of the foregoing.
(c) From and after the date hereof and until two years after the
termination of the Executive's employment hereunder, the Executive shall not,
directly or indirectly, engage in, or serve as a principal, partner, joint
venturer, member, manager, trustee, agent, stockholder, director, officer or
employee of, or consultant or advisor to, or in any other capacity, or in any
manner own, control, manage, operate, or otherwise participate, invest, or have
any interest in, or be connected with, any person, firm or entity that engages
in, directly or indirectly, any activity that is competitive with any business
of the Companies as then conducted in the United States or Europe within 500
miles of any facility of the Companies or of any material customer of the
Companies; provided, however, that, notwithstanding the foregoing, the Executive
may own up to 2% of the voting securities of any publicly-traded company.
(d) The Executive acknowledges that his employment hereunder and agreements
herein (including the agreements of this section 6) are reasonable and necessary
for the protection of the Companies and are an essential inducement to the
Company's and Direct Insite's entering into the Merger Agreement and related
agreements. Accordingly, the Executive shall be bound by the provisions hereof
(including the provisions of this section 6) to the maximum extent permitted by
law, it being the intent and spirit of the parties that the foregoing shall be
fully enforceable. However, the parties further agree that, if any of the
provisions hereof shall for any reason be held to be excessively broad as to
duration, geographical scope, property or subject matter, such provision shall
be construed by limiting and reducing it so as to be enforceable to the extent
compatible with the applicable law as it shall herein pertain.
(e) The Executive acknowledges that the services to be rendered under the
provisions of this agreement are of a unique nature and that it would be
difficult or impossible to replace such services and that by reason thereof the
Executive agrees and consents that if he violates the provisions of this section
6, the Company, in addition to any other rights and remedies available under
this agreement or otherwise, shall be entitled to an injunction to be issued or
specific enforcement to be required (without the necessity of any bond)
restricting the Executive from committing or continuing any such violation.
7. Amendment and Modification. This agreement may not be amended, modified
or changed except in a writing signed by the party against whom such amendment,
modification or change is sought to be enforced.
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8. Waiver of Compliance; Consents. Except as otherwise provided in this
agreement, any failure of either of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Whenever this
agreement requires or permits consent by or on behalf of a party, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this section 8.
9. Notices. Any notice, demand, request or other communication which is
required, called for or contemplated to be given or made hereunder to or upon
any party hereto shall be deemed to have been duly given or made for all
purposes if (a) in writing and sent by (i) messenger or a recognized national
overnight courier service for next day delivery with receipt therefor or (ii)
certified or registered mail, postage paid, return receipt requested, (b) sent
by facsimile transmission with a written copy thereof sent on the same day by
postage paid first-class mail or (c) by personal delivery to such party at the
following address:
(a) If to the Company, to:
Direct Insite Corp.
00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
(b) If to the Executive, to:
The address set forth beneath his signature hereto.
with a copy to:
Fulbright & Xxxxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No. 000-000-0000
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10. Binding Effect. This agreement shall be binding upon and inure to the
benefit of the Executive and his heirs and legal representatives and the Company
and Direct Insite to the extent expressly provided herein and their respective
successors and assigns. Successors of the Company or Direct Insite,
respectively, shall include, without limitation, any person acquiring, directly
or indirectly, all or substantially all of the assets of the Company or Direct
Insite, respectively, whether by merger, consolidation, purchase, lease or
otherwise, and such successor shall thereof be deemed "the Company" or "Direct
Insite," as the case may be, for the purposes hereof.
11. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
12. Entire Agreement. This agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the matters set forth herein
and supersedes all prior agreements and understandings between the parties with
respect to those matters. There are no promises, representations, warranties,
covenants or undertakings other than those set forth herein.
PLATINUM ACQUISITION CORP.
By: /s/____________________________
Name:
Title:
/s/_____________________________
Xxx Xxxxxxx
Address:
__________________________________
__________________________________
__________________________________
Telecopier No.: (___) ___-____
AGREED AS TO SECTION 3(f):
DIRECT INSITE CORP.
By: /s/______________________
Name:
Title:
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