EXHIBIT 10I
EMPLOYMENT AGREEMENT
AGREEMENT ("Agreement") dated as of December 6, 2000 by and between
AutoInfo, Inc., a Delaware corporation ("Auto") and Harry M. Wachtel, an
individual residing at 10324 El Caballo Court, Del Rey, Florida 33446
("Wachtel")
WHEREAS, Wachtel is currently the President of Sunteck Transport Co., Inc.
("Sunteck") and UbidFreight.com, Inc.;
WHEREAS, Auto, Sunteck and Wachtel have entered into and are consummating
the transactions contemplated pursuant to that certain Agreement and Plan of
Reorganization, dated June 22, 2000, providing for the merger of Target
Acquisition Corporation ("TAC") with and into Sunteck ("Merger Agreement");
WHEREAS, Auto desires to assure itself of the benefit of Wachtel's
services and experience for the period of time provided in this Agreement; and
WHEREAS, Wachtel is willing to enter into an agreement to that end with
Auto upon the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto hereby agree as follows:
1. Employment. Auto hereby employs Wachtel as its President and Chief
Executive Officer and Wachtel hereby accepts such employment and agrees to
perform his duties and responsibilities hereunder in accordance with the terms
and conditions hereinafter set forth. As an inducement to Wachtel's execution
hereof, Auto shall have taken appropriate corporate action such that upon
consummation of the transactions contemplated by the Merger Agreement, Wachtel
shall be the Chairman of the Board of Directors of Auto (the "Board"). The Board
shall use its best efforts to vote or recommend to the stockholders of Auto, as
appropriate, that during the Employment Term or any Renewal Term: (i) Wachtel be
nominated for election as a director of Auto at each meeting of stockholders
held for the election of directors, (ii) Wachtel be elected to and continued in
the office of Chief Executive Officer and President of Auto and such of its
subsidiaries as he may select, (iii) Wachtel be elected to and continued on the
board of directors of each subsidiary of Auto and (iv) if the Board of Auto or
any of its subsidiaries shall appoint an executive committee (or similar
committee authorized to exercise the general powers of the Board) Wachtel be
elected to and continued on such committee.
2. Duties and Responsibilities. Wachtel shall be the Chief Executive
Officer and President of Auto. Wachtel shall report to and be subject to the
direction of the Board and Wachtel shall perform such duties as may be assigned
to him from time to time by the Board; provided, that such duties shall be of a
nature consistent with the dignity and authority of the
positions of President and Chief Executive Officer. During the Employment Term
Wachtel shall, subject to Auto's vacation policy, devote substantially all of
his normal business time and attention to the businesses of Auto and its
subsidiaries and affiliates and shall perform such duties in a businesslike
manner, all for the purpose of advancing the business of Auto and its
subsidiaries and affiliates. Nothing contained in this Agreement shall be deemed
to prohibit Wachtel from devoting a nominal amount of his time to his (and his
family's) personal investments, provided, however, that, in case of conflict,
the performance of Wachtel's duties under this Agreement shall take precedence
over his activities with respect to such investments.
3. Term. The term of this Agreement shall commence on the date hereof and
shall continue through December 31, 2003 (the "Employment Term") and shall
automatically renew for successive one (1) year terms (each, a "Renewal Term"),
unless either party otherwise notifies the other in writing within ninety (90)
days prior to the expiration of such term or unless terminated prior thereto in
accordance with the terms and provisions hereof.
4. Compensation. Auto shall pay to Wachtel a salary at the rate of
$175,000 per year ("Base Compensation"), payable in accordance with Auto's
customary payroll policy in effect from time to time, but in no event any less
often than monthly, less withholding required by law and other deductions agreed
to by Wachtel. Wachtel's Base Compensation shall be subject to review on an
annual basis, on each anniversary of the date hereof and such Base Compensation
may be increased on an annual basis during the Employment Term or Renewal Term
in the sole discretion of the Board.
5. Bonus. In addition to the Base Compensation provided for in Paragraph 4
of this Agreement, Wachtel shall during the Employment Term participate in
Auto's then existing and effective profit sharing and bonus plans. Furthermore,
Wachtel shall receive such other bonuses as determined in the sole discretion of
the Board; provided, however, that for the year ending December 31, 2001, 2002
and 2003, in no event shall such bonus be less than an amount equal to ten
percent (10%) of Auto's consolidated combined pre-tax profit, excluding the
effect of any non-cash compensation based upon the issuance of stock options and
/ or warrants, (the "Operating Profit"), in excess of $250,000 and up to
$1,250,000. Commencing with the quarter ending March 31, 2002, an amount equal
to five percent (5%) of the Operating Profit in excess of $62,500 for such
quarter then ended shall be paid, within fifty (50) days of the close of such
quarter, as an advance against the bonus for that calendar year. Such cumulative
interim advances shall be applied against the bonus as computed for the years
ended December 31, 2002 and 2003. In the event the advances paid to Wachtel
during 2002 and 2003 exceed the annual bonus payable to Wachtel based upon
Auto's actual Operating Profit for the years ended December 31, 2002 and 2003,
Wachtel shall promptly reimburse Auto an amount equal to the difference between
the amount of advances received during such year and the actual bonus, if any,
payable for such year.
6. Principal Office. Wachtel shall render his services hereunder at Auto's
executive offices, to be located within the 25 mile radius of Boca Raton,
Florida. If Auto's executive offices shall be relocated to any location outside
of the 25 mile radius of Boca Raton, Florida Auto shall reimburse Wachtel for
any and all reasonable moving expenses actually incurred by him.
7. Expenses and Benefits.
(a) Auto shall reimburse Wachtel for all reasonable out-of-pocket
expenses incurred by him in connection with the performance of his duties
hereunder, including, without limitation, expenses in connection with cellular
telephones or other wireless communications, travel and entertainment and the
purchase of materials related to Auto's industry, upon presentation of
appropriate documentation therefor. Subject to the foregoing, Wachtel will be
entitled to business-class travel and accommodations while traveling in
connection with Auto's business.
(b) Auto recognizes that Wachtel will be required to incur
significant travel in rendering services to Auto hereunder and in connection
therewith Auto shall during the Employment Term provide Wachtel with an
automobile allowance of $1,000.00 per month which the parties agree shall be
used to pay all of the expenses associated with the operation of an automobile
including, without limitation, maintenance, repair and insurance costs.
(c) Wachtel shall be entitled to participate, to the extent he
qualifies, in such life insurance, hospitalization, disability and other medical
insurance plans or programs as are generally made available to executive
officers of Auto. In the event that Wachtel determines not to participate in any
of such plans, Auto shall reimburse him for the cost of the monthly premiums for
such plans in an amount equal to Auto's cost for such plans.
(d) Wachtel shall be entitled to participate, subject to
classification requirements, in other benefit plans, such as pension, stock
purchase, stock option, savings, bonus and profit sharing plans, which are from
time to time applicable to Auto's executive officers.
(e) During the Employment Term and any Renewal Term, Wachtel shall
be entitled to four (4) weeks of fully paid vacation per annum. Wachtel will be
entitled to his regular compensation on all regularly scheduled Auto holidays.
(f) Auto shall indemnify Wachtel (and his legal representatives or
other successors) to the fullest extent permitted by the laws of the State of
Delaware and its existing certificate of incorporation and by-laws, and Wachtel
shall be entitled to the protection of any insurance policies Auto may elect to
maintain generally for the benefit of its officers and/or executives, against
all costs, charges and expenses whatsoever incurred or sustained by him (or his
legal representatives or other successors) in connection with any action, suit
or proceeding to which he (or his legal representatives or other successors) may
be made a party by reason of his being or having been an officer and/or
executive of Auto and its subsidiaries and affiliates.
8. Termination and Termination Benefits.
(a) Termination by Auto.
(i) Notwithstanding any provision contained herein, Auto may
terminate this Agreement at any time during the Employment Term for "cause". For
purposes of this
Agreement, "cause" shall mean (a) the continuing failure (after receipt of
written notice from Auto) by Wachtel to substantially perform his duties
hereunder for any reason other than total or partial incapacity due to
Disability (as hereinafter defined) which failure to perform demonstrably causes
harm to Auto, (b) gross negligence or willful misconduct on the part of Wachtel
in the performance of his duties hereunder that demonstrably causes harm to
Auto, and (c) the conviction of Wachtel, by a court of competent jurisdiction,
of a felony or other crime involving moral turpitude. Termination pursuant to
this subsection 8(a)(i) shall be effective immediately upon giving Wachtel
written notice thereof stating the reason or reasons therefor with respect to
clause (c) above, and 30 days after receipt of written notice thereof from Auto
to Wachtel specifying the (x) acts or omissions constituting the failure, gross
negligence or willful misconduct and (y) harm to Auto and requesting that they
be remedied with respect to clauses (a) and (b) above, but only if Wachtel has
not substantially cured such failure, gross negligence or willful misconduct
within such 30 day period. In the event of a termination pursuant to this
subsection 8(a)(i), Auto shall pay Wachtel his Base Compensation and employee
benefits that have actually accrued to the date of termination. Any stock
options granted by Auto to Wachtel which have not vested by the date of such
termination shall terminate on such date; any vested stock options which have
not been exercised by Wachtel by such date shall remain exercisable for ninety
(90) days from such termination date.
(ii) If, during the Employment Term, Wachtel shall be unable
substantially to perform the duties required of him pursuant to the provisions
of this Employment Agreement due to any physical or mental disability which is
in existence for a period of ninety (90) consecutive days or for any one hundred
and eighty (180) days, in either case in any twelve (12) consecutive months
during the term hereof, Auto shall have the right to terminate Wachtel's
employment pursuant to this Employment Agreement by giving not less than thirty
(30) days' written notice to Wachtel, at the end of which time Wachtel's
employment shall be terminated; provided, however, that if Wachtel commences to
perform the duties required by this Agreement within such 30-day period and
performs such services for 25 out of 30 of the ensuing business days, then such
notice shall be void. Wachtel shall retain his status and continue to receive
his full compensation (including Base Compensation and Incentive Compensation
and Bonus, if any) hereunder during the period prior to any termination
hereunder because of a Disability. As used in this Employment Agreement, the
term "Disability" shall mean the inability of Wachtel to perform his duties
under this Employment Agreement by reason of a medical disability, including
mental or physical illness, as certified by a physician or specialist appointed
by Wachtel and reasonably acceptable to Auto or, if Wachtel is or is alleged to
be mentally disabled, appointed by Wachtel's designee or legal representative.
Upon the occurrence of such termination, Auto shall have no further obligations
hereunder, except that Wachtel shall be entitled to (a) receive payment of his
Base Compensation through the date of termination, (b) a pro-rata share of
Incentive Compensation and Bonus, if any, to which Wachtel would have been
entitled for the year in which such Disability occurs, (c) immediate
acceleration and exercisability of any stock options which had been previously
granted to Wachtel but had not yet become exercisable as of the date of such
termination, which options, together with any other exercisable options shall
remain exercisable until the first anniversary of such termination and (d)
receive employee benefits pursuant to Section 7(c) hereof, to the extent
available, for the remainder of the Employment Term or Renewal Term; provided,
however, that any
compensation to be paid to Wachtel pursuant to this subsection 8(a)(ii) shall be
offset against any payments received by Wachtel pursuant to any policy of
disability insurance the premiums of which are paid for by Auto. Nothing herein
shall be construed to violate any Federal or State law including the Family and
Medical Leave Act of 1993, 27 U.S.C.S. ss.2601 et seq., and the Americans With
Disabilities Act, 42 U.S.C.S. ss.12101 et seq.
(b) Termination by Wachtel
(i) Wachtel may terminate this Agreement at any time during
the Employment Term or Renewal Term for "Good Reason" upon 30 days' written
notice to Auto (during which period Wachtel shall, if requested in writing by
Auto, continue to perform his duties as specified under this Agreement). "Good
Reason" shall mean: (a) Auto's failure to make any of the payments or provide
any of the material benefits to Wachtel under this Agreement; (b) a material
reduction in Wachtel's duties or authority; or (c) Auto shall breach any
material term of this Agreement; provided, however, that Auto has not cured, or
made substantial efforts to cure, any such events within the aforementioned 30
day period.
(ii) If there shall occur a "Change in Control" (as
hereinafter defined) of Auto, Wachtel shall have the right to terminate his
employment pursuant to this Agreement by written notice to Auto, which
termination shall be deemed a termination without cause by Auto. A "Change in
Control" shall be deemed to occur upon (a) the sale by Auto of all or
substantially all of its assets to any person (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934), (b) the consolidation
or merger of Auto with any person as a result of which merger Auto is not the
surviving entity and with respect to which persons who were the stockholders of
Auto immediately prior to such consolidation or merger do not, immediately
thereafter own more than 50% of the combined voting power entitled to vote
generally in the election of directors of the consolidated or merged company's
then outstanding voting securities or (c) a tender offer, merger, consolidation,
sale of assets or contested election or any combination of the foregoing
transactions in which the persons who were directors of Auto immediately before
the transaction cease to constitute a majority of the Board of Directors of Auto
or any successor to Auto. An "affiliate" shall mean any person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, any other person.
(iii) If Wachtel's employment hereunder is terminated by (a)
Auto without cause, (b) Wachtel for Good Reason or (c) Wachtel within six months
after a Change in Control, Auto shall pay to Wachtel (i) his Base Compensation
and Incentive Compensation and Bonus, if any, calculated on a pro rata basis to
the date of termination and (ii) from and after the effective date of
termination of this Agreement and for what would have been the remainder of the
Employment Term or any Renewal Term if not so terminated, (A) all Base
Compensation and Incentive Compensation amounts and other payments as such
payments would have been made to Wachtel had this Agreement not been terminated,
and (B) all employee benefits pursuant to Section 7(c) hereof. In the event of
such termination, any stock options granted by Auto to Wachtel which have not
yet vested by the date of such termination shall immediately vest and become
exercisable, which options, together with any other exercisable options shall
remain exercisable until the later to occur of (x) the first anniversary of such
termination or (y) the scheduled expiration date of such options (with respect
to nonqualified stock options) or, in the event any such options are incentive
stock options, until ninety (90) days after of such termination.
(iv) Wachtel may terminate this Agreement at any time during
the Employment Term or Renewal Term without Good Reason upon sixty (60) days
written notice to Auto. If Wachtel terminates his employment without Good
Reason, Auto shall pay Wachtel his Base Compensation and employee benefits that
have actually accrued to the date of termination. Any stock options granted by
Auto to Wachtel which have not vested by the date of such termination shall
terminate on such date; and any vested stock options which have not been
exercised by Wachtel by such termination date shall remain exercisable for
ninety (90) days from such date, at which time such options shall terminate to
the extent they have not been previously exercised.
(d) In the event Wachtel's service with Auto terminates by reason of
his death, Auto shall have no further obligations hereunder, except that
Wachtel's estate shall be entitled to (i) receive payment of (a) his Base
Compensation and employee benefits through the end of the third month following
the month in which such death occurs, (b) a pro-rata share of Incentive
Compensation and Bonus, if any, to which Wachtel would have been entitled for
the year in which such death occurs and (ii) immediate acceleration and
exercisability of any stock options which had been previously granted to Wachtel
but had not yet become exercisable as of the date of such termination, which
options, together with any other exercisable options, shall remain exercisable
by Wachtel's estate until the later to occur of (x) the first anniversary of
such termination or (y) the scheduled expiration date of any such options.
(e) Wachtel shall not be required to mitigate the amount of any
payments provided for by this Agreement by seeking employment or otherwise, nor
shall the amount of any payment or benefit provided in this Agreement be reduced
by any compensation or benefit earned by Wachtel after termination of his
employment.
9. Non-Competition. Wachtel covenants and agrees that during his
employment hereunder and for (i) the one (1) year period after his employment
hereunder is terminated by Auto for cause pursuant to Section 8(a)(i) or
Disability pursuant to Section 8(a)(ii) or by Wachtel without Good Reason or
(ii) the period after his employment hereunder is terminated and during which
Wachtel receives his Base Compensation pursuant to the terms of Section
8(b)(iii) hereof, he will not, without the prior written consent of Auto, (a)
compete with the business of Auto or any of its subsidiaries or affiliates (as
such business is operated as of the date of termination of this Agreement) and,
in particular, he will not without such consent, directly or indirectly, own,
manage, operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or be connected as a director,
officer, employee, partner, consultant or agent with, any business in
competition with or similar to the business of Auto or any of its subsidiaries
or affiliates (as such business is operated as of the date of termination of
this Agreement); provided, however, that Wachtel may own up to five (5%) percent
of the capital stock of any publicly traded corporation in competition with the
business of Auto or any of its
subsidiaries or affiliates, and (b) divert, take away or interfere with or
attempt to divert, take away or interfere with any present or former employee or
customer of Auto or any of its subsidiaries or affiliates. In the event Auto
determines not to renew this Agreement, the provisions of this Section 9 shall
no longer be applicable; provided, however, that for the one (1) year period
following the expiration of this Agreement Wachtel shall not divert, take away
or interfere with or attempt to divert, take away or interfere with any present
or former employee or customer of Auto or any of its subsidiaries or affiliates.
In the event that the provisions of this Section 9 should ever be deemed to
exceed the time or geographic limitations or any other limitations permitted by
applicable law, then such provisions shall be deemed reformed to the maximum
permitted by applicable law. Wachtel acknowledges and agrees that the foregoing
covenant is an essential element of this Agreement and that, but for the
agreement of Wachtel to comply with the covenant, Auto would not have entered
into this Agreement, and that the remedy at law for any breach of the covenant
will be inadequate and Auto, in addition to any other relief available to it,
shall be entitled to temporary and permanent injunctive relief without the
necessity of proving actual damage. The provisions of this Section 9 shall no
longer be applicable if (x) Auto ceases to have any business activities or (y)
Auto fails, after the termination hereof, to make any of the payments of Base
Compensation to Wachtel under this Agreement.
10. Confidential Information. Wachtel recognizes and acknowledges that the
customer lists, patents, inventions, copyrights, methods of doing business,
trade secrets and proprietary information of Auto including, without limitation,
as the same may exist from time to time, are valuable, special and unique assets
of the business of Auto. Except in the ordinary course of business or as
required by law, Wachtel shall not, during or after the Employment Term,
disclose any such list of customers or any part thereof, any such patents,
inventions, copyrights, methods of doing business, trade secrets or proprietary
information, other than information (a) already in the public domain or that
becomes public knowledge otherwise than by an act or omission of Wachtel, (b)
that is or becomes available to Wachtel without obligation of confidence from a
source having the legal right to disclose such information, (c) that is already
in the possession of Wachtel in documented form without an obligation of
confidence and was not received by Wachtel as a result of Wachtel's prior
relationship with Auto or (d) in the opinion of Wachtel's counsel, that is
required to be disclosed by applicable law or legal process as long as Wachtel
promptly notifies Auto of such pending disclosure. In addition, Wachtel
specifically acknowledges and agrees that the remedy at law for any breach of
the foregoing shall be inadequate and that Auto, in addition to any other relief
available to them, shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damage.
11. COBRA. In the event of Wachtel's death during the term of this
Agreement, Auto shall make all COBRA medical premium payments for Wachtel's
family for the longer of (i) one year from the date of his death and (ii) the
remainder of the Employment Term or Renewal Term.
12. Life Insurance. Wachtel agrees that at any time and from time to time
during the Employment Term or any Renewal Term, he will, at the request and at
the expense of Auto, cooperate with Auto in obtaining insurance on his life up
to $3 Million for the benefit of Auto
and/or its stockholders. At the request of Auto, Wachtel will take such actions
and execute and deliver such documents that may be reasonably required in
connection with the obtaining of such insurance. Wachtel acknowledges that Auto,
and its stockholders have an insurable interest in his life.
13. Opportunities. During his employment with Auto, Wachtel shall not take
any action which might divert from Auto or any of its subsidiaries or affiliates
any opportunity which would be within the scope of any of the present businesses
of Auto or any of its subsidiaries or affiliates.
14. Contents of Agreement, Parties in Interest, Assignment, etc. This
Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Wachtel hereunder which are of a
personal nature shall neither be assigned nor transferred in whole or in part by
Wachtel. This Agreement shall not be modified or amended except by a written
instrument duly executed by Auto and Wachtel.
15. Severability. If any term or provision of this Agreement shall be held
to be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.
16. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or by a nationally
recognized overnight courier service, or five (5) days after dispatch by
registered or certified mail, postage prepaid, return receipt requested, to the
party to whom the same is so given or made:
If to Auto
addressed to: AutoInfo, Inc.
c/o Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10178
Attn: Kenneth S. Rose, Esq.
If to Wachtel
addressed to: Harry M. Wachtel
10324 El Caballo Court
Del Rey, Florida 33446
or at such other address as the one party shall specify to the other party in
writing.
17. Counterparts and Headings.This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all which
together shall constitute one and the same instrument. All headings are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
18. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Florida, without regard to the conflicts of laws
principles.
19. Arbitration. Any disputes arising hereunder shall be submitted to
arbitration before a single arbitrator in Palm Beach County, Florida under the
rules and regulations of the American Arbitration Association. Any award in such
arbitration proceeding may be enforced in any court of competent jurisdiction.
20. Costs of Enforcement. Each of the parties hereto shall pay all
reasonable fees and expenses (including attorneys' fees) incurred by the other
party in any contest or dispute arising under this Agreement or in enforcing his
or its rights hereunder if such other party is the prevailing party in any such
contest, dispute or enforcement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
AUTOINFO, INC.
By: /s/ William I. Wunderlich
----------------------------
Name: William I. Wunderlich
Title: Chief Financial Officer
/s/ Harry M. Wachtel
---------------------------------
Harry M. Wachtel