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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated and effective as of October 6, 1998, 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 XXXXX X. XXXXX (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employer is a Florida corporation engaged in the
teleservicing, database management and marketing and fulfillment
business;
WHEREAS, Employer desires to continue to employ Employee upon the terms
and conditions set forth below and Employee desires to accept such continued
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 on the date hereof
and shall continue until 5:00, p.m., March 31, 2001 (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 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 accept 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 acceptance 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 Employee from time to time by Employer,
consistent with the following: Employee shall, unless and until otherwise
determined by Employer, serve as Employer's Senior Vice President-Operations,
and shall, subject to the direction of Employer's President, have responsibility
to oversee and supervise all activities relating to Employer's day-to-day
operations including those related to teleservices, information services and
fulfillment services. Employee shall report directly to Employer's President and
Executive Vice President. Employee agrees to devote Employee's full and
exclusive time, skill, attention and energy diligently and competently to
perform the duties and responsibilities properly assigned to Employee hereunder,
or pursuant hereto.
B. RULES AND REGULATIONS. Employee agrees to abide by the
rules and regulations of Employer promulgated by Employer from time to time with
respect and applicable to Employer's similarly-situated employees generally,
which are all hereby incorporated by reference and made a part of this
Employment Agreement.
5. COMPENSATION
A. BASE COMPENSATION. Subject to the provisions of Section 9
of this Employment Agreement, Employer shall pay salary to Employee ("Salary")
based upon the following rates: (i) $225,000 per annum retroactively from March
1, 1998 through and inclusive of March 31, 1999; provided, that, to the extent
that the retroactive commencement of such rate results in Employee not having
received the full amount of the Salary from March 1, 1998 through the date
hereof, Employer shall pay Employee any deficiency through the date hereof as
soon as practical hereafter; (ii) $250,000 per annum from April 1, 1999 through
and inclusive of March 31, 2000; (iii) $275,000 per annum from April 1, 2000
through and inclusive of March 31, 2001; and (iv) $275,000 per annum through the
expiration of the Employment Term unless otherwise mutually agreed in writing
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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
the amount of which shall be determined by Employer in its sole and absolute
discretion pursuant to Employer's then existing bonus plan (the "Bonus Amount").
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 Employee's performance during the entire year 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.
6. FRINGE BENEFITS AND EXPENSES
A. EMPLOYEE BENEFITS. Employee shall be entitled to such
benefits and fringe benefits (such as health, dental, life and disability
insurance) as are made available by Employer from time to time, in Employer's
sole discretion, to all other similarly-situated employees 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, and provided that the types and amounts of expenses
incurred are consistent with, in Employer's judgment, Employer's policies and
practices.
7. VACATIONS
Employee shall be entitled to four (4) weeks vacation each
full year of the Employment Term, with full compensation (and Employee shall 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.
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8. FACILITIES
Employer shall provide and maintain (or cause to be provided
and maintained) such facilities, equipment, supplies and personnel as it
reasonably deems 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 later defined) and receiving written notice of termination from Employer to
that effect. Employee may terminate Employee's employment under this Employment
Agreement without being in breach hereunder by giving written notification of
Employee's resignation to Employer which shall specify a resignation date no
earlier than sixty (60) days following the date of delivery of such notice of
resignation.
B. DEFINITIONS OF CAUSE AND DISABLED. For purposes of this
Employment Agreement, "Cause" shall mean and include: (i) commission of a
felony, or commission of acts of fraud, dishonesty, or the like; (ii) habitual
drunkenness during business hours or at Employer's premises; (iii) illicit use
of drugs during business hours or at Employer's premises; (iv) abandonment of
employment duties; (v) gross negligence in the performance of employment duties;
(vi) an act or omission on the part of Employee not directed by Employer which
results in or contributes to Employer being sanctioned or penalized by any
governmental or quasi-governmental authority or body, or any stock exchange or
body regulating or governing publicly-traded companies (including the NASD);
(vii) insubordination; or (viii) breach by Employee of this Employment Agreement
which, if curable, is not cured by Employee within thirty (30) days following
Employee's receipt of written notice thereof. Employee shall be deemed
"Disabled" for purposes of this Agreement (a) if, in the reasonable judgment of
Employer, 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 ninety (90) days, or (b) if Employee is
adjudicated as an incompetent or has a guardian appointed to handle Employee's
affairs.
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 or quits
Employee's employment,
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Employer shall pay to Employee, within thirty (30) days following the date of
such termination or resignation, subject to Employer's right to set off any
damages resulting from Employee's termination with Cause or resignation effected
without giving the required notice, the Salary, if any, accrued and unpaid
through the date of termination, 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; 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,
including, without limitation, any accrued or unpaid Bonus Amount.
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 time), within thirty (30) days following the date of
Employee's death or termination, the Salary, 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.
E. COMPENSATION UPON TERMINATION WITHOUT CAUSE. In the event
that Employer (or its successor) terminates Employee's employment under this
Employment Agreement without Cause (including, without limitation, upon a Change
in Control as hereinafter defined), Employee's sole and exclusive compensation
and remedy hereunder shall be to receive from Employer, and Employer shall pay
and provide, (i) the amount of Salary, if any, accrued and unpaid through the
date of termination, and the amounts and items payable or to be provided under
Section 6 through the date of termination, payable within thirty (30) days
following termination of employment, (ii) the Salary and the amounts and items
payable or to be provided under Section 6.A. that Employee would have received
during the one year period following the date of termination of Employee's
employment, as and when it would have been payable or been provided if Employee
had remained an employee of Employer for such additional one year period,
provided, however, that with respect to any such benefits Employer shall have
the right, if unable to provide to Employee or Employer otherwise elects, in its
sole discretion, to pay Employee the monetary equivalent of any such benefits in
lieu of providing same to
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Employee, and (iii) an amount equal to the average of the Bonus Amount paid to
Employee during the Employment Term, which amount shall be payable in twelve
equal consecutive monthly installments commencing one month from the date of
termination. Employee shall not be entitled to the foregoing severance set forth
in items (ii) and (iii) above to the extent that Employee receives or is
entitled to receive compensation or benefits from new employment with respect to
employment services rendered during such period. For purposes of this Subsection
E., (x) a "Change in Control" means that (1) 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, (2) 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 beneficially owning the highest number of issued and
outstanding shares of common stock of Employer or its successor, or (3) neither
Xxxx Xxxxxx nor Xxxxx Xxxxxxx occupies the position of Chairman of the Board,
Chief Executive Officer or President of Employer; (y) "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 principally for the benefit of
him, his family members and/or lineal descendants; and (z) "Immediate family
members" mean, with respect to Xxxx Xxxxxx or Xxxxx Xxxxxxx, his spouse,
children, parents, siblings or other lineal descendants.
F. 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,
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Employee shall fully cooperate in Employer's efforts, including submitting to
medical exams 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 software programs, 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, Chief Executive Officer or President 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 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,
software programs or discs, tapes or similar containers of software, manuals,
data, books, records, materials or documents of any kind or description for any
purpose unconnected with the strict 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
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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 known to and 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 at any time during Employee's employment with 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,
programmer, information services employee (including, without limitation,
network or other information services 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 or the two-year period commencing on the date of termination of
Employee's employment, or (ii) for as long as Employee is employed by Employer
and for a period of 12 months after the date Employee ceases for any reason to
be employed by Employer, Employee shall not, directly or indirectly, engage in
any venture, enterprise, activity or business, passively or actively, as an
owner, consultant, adviser, participant, employee, agent or in any other
capacity, competitive with the business of Employer anywhere within the
continental United States. 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.
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
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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, by Employee's partners, agents,
representatives, servants, employers or employees and/or by any Third Parties.
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 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
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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).
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 President, if mailed to Employer, and to Employee's then current residence,
if mailed to Employee.
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, Employer shall remain liable for all
of its obligations hereunder.
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17. ENTIRE AGREEMENT
This Employment Agreement constitutes 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
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.
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22. INDEPENDENT COUNSEL
EMPLOYER STRONGLY RECOMMENDS TO EMPLOYEE THAT EMPLOYEE RETAIN
INDEPENDENT LEGAL COUNSEL TO ADVISE EMPLOYEE WITH RESPECT TO THIS EMPLOYMENT
AGREEMENT BEFORE EMPLOYEE SIGNS IT.
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 Xxxxxxx
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Xxxxx Xxxxxxx, President
EMPLOYEE:
/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
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