EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of the 1st day of December, 2001 by and
between DIRECT INSITE CORP., a Delaware corporation (hereinafter the "Company")
and XXXXXXX XXXXXXX, an individual residing at
___________________________________ (hereinafter called "Xxxxxxx").
W I T N E S S E T H:
WHEREAS, the Company desires to enter into an Employment Agreement with
Xxxxxxx (the "Agreement"); and
WHEREAS, Xxxxxxx desires to enter into this Agreement with the Company;
NOW, THEREFORE, it is agreed as follows:
1. Prior Agreements Superseded. This Agreement supersedes any employment,
consulting or other agreements, oral or written, entered into between Xxxxxxx
and the Company prior to the date of this Agreement except for stock options and
stock grants previously granted to Xxxxxxx, which stock options and grants shall
continue in full force and effect.
2. Employment. The Company hereby agrees to employ Xxxxxxx, and Xxxxxxx
hereby agrees to serve, as President of the Company with commensurate
responsibilities and to perform such services as directed by the Board of
Directors. Xxxxxxx'x employment hereunder shall be on a full-time basis and
Xxxxxxx shall not engage in any other business, except with the prior approval
of the Board of Directors of the Company. Xxxxxxx shall serve in similar
capacities of such of the subsidiary corporations of the Company as may be
selected by the Board of Directors without additional compensation.
Notwithstanding the foregoing, it is understood that the duties of Xxxxxxx
during the performance of employment shall not be inconsistent with his position
and title as President of the Company.
3. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, the term of this Agreement shall end on January 1, 2004.
4. Compensation. For all services rendered by Xxxxxxx under this Agreement,
compensation shall be paid to Xxxxxxx during the period of employment as
follows:
(a) Xxxxxxx shall be paid at the annual rate of One Hundred
Seventy-Five Thousand ($175,000) Dollars.
1
(b) Xxxxxxx shall be eligible to participate in the Company's stock
option and stock purchase plans to the extent determined in the discretion
of the Board of Directors of the Company or committee thereof.
(c) Xxxxxxx shall be entitled to receive an annual bonus at the
discretion of the Board of Directors.
(d) Xxxxxxx shall be furnished with office space and secretarial
service and facilities commensurate with his position and adequate for the
performance of his duties.
(e) Xxxxxxx shall be entitled to fully participate in all benefit
programs generally available to executive employees of the Company
throughout the term of this Agreement, including but not limited to medical
benefits.
(f) Xxxxxxx shall be entitled to receive an automobile allowance not
to exceed $1,000 per month, which shall cover the use of an automobile,
insurance and related expenses.
(g) Xxxxxxx shall be entitled to four (4) weeks of vacation and sick
leaves consistent with current practice of the Company.
5. Expenses. Xxxxxxx shall be reimbursed for all out-of-pocket expenses
reasonably incurred by him in the performance of his duties hereunder. Expense
reports, with receipts and justifications, must be submitted to the Chairman of
the Board of Chief Financial Officer for approval.
6. Severance Benefits. Xxxxxxx shall be entitled to the severance benefits
provided for in subsection (c) hereof in the event of the termination of his
employment by the Company without cause or in the event of a voluntary
termination of employment by Xxxxxxx for good reason. Xxxxxxx and the Company
acknowledge that the foregoing provisions of this paragraph 6 are reasonable and
are based upon the facts and circumstances of the parties at the time of
entering into this Agreement, and with this Agreement, and with due regard to
future expectations.
(a) The term "cause" shall mean:
(i) Xxxxxxx'x willful and continued failure to substantially perform
his duties under this Agreement (other than any such failure resulting from
his incapacity due to physical or mental illness) after demand for
substantial performance is delivered to Xxxxxxx by the Chairman of the
Board of the Company which specifically identifies the manner in which the
Board believes Xxxxxxx has not substantially performed his duties.
2
(ii) Xxxxxxx'x failure to refuse to follow directions from the
Company's Board of Directors provided that Xxxxxxx'x compliance with any
such direction would not be illegal or unlawful.
(iii) Any act or fraud, embezzlement or theft committed by Xxxxxxx
whether or not in connection with his duties or in the course of his
employment.
(iv) Any willful disclosure by Xxxxxxx of confidential information or
trade secrets of the Company or its affiliates.
For purposes of this paragraph, no act or failure to act on Xxxxxxx'x part
shall be considered "willful" unless done, or omitted to be done, by Xxxxxxx not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Company. Notwithstanding the foregoing, Xxxxxxx shall
not be deemed to have been terminated for cause unless and until there shall
have been delivered to him a copy of a notice of termination from the Chairman
of the Board of the Company after reasonable notice to Xxxxxxx and an
opportunity for Xxxxxxx with his counsel to be heard before the Board of
Directors of the Company finding that in the good faith opinion of such Board of
Directors Xxxxxxx was guilty of the conduct set forth in clauses (i), (ii) ,
(iii) or (iv) of this paragraph and specifying the particulars thereof in
detail.
(b) For these purposes, Xxxxxxx shall have "good reason" to terminate this
Agreement if the Company removes Xxxxxxx from the position of President at any
time during the term of this Agreement.
(c) The severance benefits under this section in the event of termination
without cause or by Xxxxxxx for "good reason", shall consist of the continued
payment to Xxxxxxx for the remaining term of this Agreement of the annual salary
provided in Section 4(a) hereof plus the immediate vesting of all outstanding
options.
7. Death. In the event of Xxxxxxx'x death during the term of this
Agreement, Xxxxxxx'x legal representative shall be entitled to receive his per
annum base salary as provided in paragraph 4(a) of this Agreement to the last
day of the calendar quarter following the calendar quarter in which Xxxxxxx'x
death shall have occurred.
8. Non-Competition.
(a) Xxxxxxx agrees that, during the term of this Agreement, he will not,
without the prior written approval of the Board of Directors of the Company,
directly or indirectly, through any other individual or entity, (a) become an
officer or employee of, or render any services [including consulting services]
to, any competitor of the Company, (b) solicit, raid, entice or induce any
customer of the Company to cease purchasing goods or services from the Company
3
or to become a customer of any competitor of the Company, and Xxxxxxx will not
approach any customer for any such purpose or authorize the taking of any such
actions by any other individual or entity, or (c) solicit, raid, entice or
induce any employee of the Company, and Xxxxxxx will not approach any such
employee for any such purpose or authorize the taking of any such action by any
other individual or entity.
(b) During the term hereof and at all times thereafter, Xxxxxxx shall not
disclose to any person, firm or corporation other than the Company any trade
secrets, trade information, techniques or other confidential information of the
business of the Company, its methods of doing business or information concerning
its customers learned or acquired by Xxxxxxx during Xxxxxxx'x relationship with
the Company and shall not engage in any unfair trade practices with respect to
the Company.
9. Enforcement.
(a) The necessity for protection of the Company and its subsidiaries
against Xxxxxxx'x competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of the
uniqueness of Xxxxxxx'x talent and his importance to the Company. Accordingly,
Xxxxxxx agrees that, in addition to any other relief to which the Company may be
entitled, the Company shall be entitled to seek and obtain injunctive relief
(without the requirement of any bond) for the purpose of restraining Xxxxxxx
from any actual or threatened breach of the covenants contained in paragraph 8
of this Agreement.
(b) If for any reason a court determines that the restrictions under
paragraph 8 of this Agreement are not reasonable or that consideration therefor
in adequate, the parties expressly agree and covenant that such restrictions
shall be interpreted, modified or rewritten by such court to include as much of
the duration and scope identified in paragraph 8 as will render the restrictions
valid and enforceable.
10. Notices. Any notice to be given to the Company or Xxxxxxx hereunder
shall be deemed given if delivered personally, telefaxed or mailed by certified
or registered mail, postage prepaid, to the other party hereto at the following
addresses:
To the Company: Direct Insite Corp.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Copy to: Xxxxx X. Xxxxxxxxx, Esq.
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
To Xxxxxxx: Xxxxxxx Xxxxxxx
4
Either party may change the address to which notice may be given hereunder by
giving notice to the other party as provided herein.
11. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, and upon Xxxxxxx,
his heirs, executors, administrators and legal representatives.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties except as specifically otherwise indicated herein.
13. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
DIRECT INSITE CORP.
/s/ Xxxxxx Xxxxxx
By: __________________________________
/s/ Xxxxx X. Xxxxxxxxx
------------------------------------
XXXXXXX XXXXXXX
Employee
