EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 6, 1995 by and between AutoInfo Finance of
Virginia, Inc., a Virginia corporation ("AI Finance") and Robert E. Upton, Jr.
residing at 421 West Bute Street, Unit 402, Norfolk, Virginia 23510 ("Upton").
WHEREAS, Upton is currently a shareholder in and the President and Chief
Operating Officer of Falk Finance Company, Inc. ("FFC"); and
WHEREAS, in connection with its acquisition of the business of FFC, AI
Finance desires to assure itself of the benefit of Upton's services and
experience for a period of time; and
WHEREAS, Upton is willing to enter into an agreement to that end with the
Company upon the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Employment. AI Finance hereby employs Upton as its President and Chief
Operating Officer and Upton hereby accepts such employment and agrees to perform
his duties and responsibilities hereunder in accordance with the terms and
conditions hereinafter set forth.
2. Duties and Responsibilities. Upton shall be the Chief Operating Officer
of AI Finance during the Employment Term (as defined below). Upton shall report
to and be subject to the direction of the President of AutoInfo, Inc. and Upton
shall perform such duties as may be assigned to him from time to time by the
President of AutoInfo, Inc. During the Employment Term Upton shall, subject to
the Company's vacation policy, devote substantially all of his normal business
time and attention to the businesses of AI Finance and its subsidiaries and
affiliates and shall perform such duties in a diligent, trustworthy, loyal,
businesslike and efficient manner, all for the purpose of advancing the business
of AI Finance and its subsidiaries and affiliates. Nothing contained in this
Agreement shall be deemed to prohibit Upton 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 Upton'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 until November 30, 2000, unless terminated prior thereto in
accordance with the terms and provisions hereof (the "Employment Term").
4. Compensation. AI Finance shall pay to Upton a salary at the rate of
$140,000 per year, payable in such manner as AI Finance shall determine, but in
no event any less often than monthly, less withholding required by law and other
deductions agreed to by Upton. Upton's annual salary may be increased during the
Employment Term in the sole discretion of the Board of Directors of the Company
(the "Board"). In addition, on the date hereof, or as soon thereafter as
practicable, AutoInfo, Inc. ("Auto") shall grant to you a non-qualified stock
option to purchase up to 375,000 shares of Auto Common Stock at $3.00 per share,
pursuant to the terms and conditions of the Stock Option Agreement annexed
hereto as Exhibit A, which provides, inter alia, for performance related
vesting.
5. Bonus. In addition to the compensation provided for in Paragraph 4 of
this Agreement, Upton shall during the Employment Term on an annual basis
receive as a bonus a payment equal to one-eighth (1/8) of one percent of the
outstanding performing net receivable portfolio (as hereinafter defined)
computed on an annualized basis. This bonus, if any, shall be paid quarterly in
arrears. For the purposes of this provision the outstanding "net receivable
portfolio" shall mean all interest bearing finance receivables not greater than
ninety (90) days in contractual arrears. Furthermore Upton shall receive such
other bonuses as determined in the sole discretion of the Board.
6. Expenses and Benefits.
(a) AI Finance shall, consistent with AI Finance's policy of reporting
and reimbursement of business expenses, reimburse Upton for such other ordinary
and necessary entertainment and business related expenses as shall be incurred
by Upton in the course of the performance of his duties under this Agreement.
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(b) AI Finance recognizes that Upton will be required to incur
significant travel in rendering services to AI Finance hereunder and in
connection therewith AI Finance shall during the Employment Term provide Upton
with an automobile, consistent with Upton's current vehicle, and AI Finance
shall reimburse Upton for all of the reasonable expenses associated with the
operation of such automobile including, without limitation, fuel, maintenance,
repair and insurance costs.
(c) Upton 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 AI
Finance which shall be consistent with the programs and benefits currently
offered to Upton.
7. Termination.
(a) AI Finance shall have the right to terminate this Agreement for
disability in the event Upton suffers any illness or incapacity of such
character as to substantially disable him from performing his duties hereunder
for a period of more than sixty (60) consecutive business days in any one
calendar year upon AI Finance giving at least five (5) days written notice of
its intention to so terminate. If Upton shall resume his duties hereunder within
ten (10) days following the receipt of such notice and shall perform such duties
for fifty (50) days of the next sixty (60) consecutive days thereafter, the
Employment Term shall continue without interruption and such notice of intention
to terminate shall have no further force or validity. In the event of a
termination of this Agreement, AI Finance shall pay to Upton his salary as
provided for in Section 9 hereof for a ninety day period following such
termination.
(b) This Agreement shall terminate upon the death of Upton.
(c) AI Finance may terminate this Agreement at any time with Reasonable
Cause upon five (5) days written notice to Upton. "Reasonable Cause" means (i)
conviction of a crime involving moral turpitude; (ii) Upton having engaged in
any activity in competition with AI Finance, without AI Finance's consent; (iii)
Upton having divulged any secret or confidential information of a material
nature belonging to AI Finance, without AI Finance's consent, except as required
by law; (iv) Upton's dishonesty or misconduct that is damaging or detrimental to
AI
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Finance in any material respect; or (v) Upton's breach of any material term of
this Agreement; provided, however, that notice under this provision shall not be
effective unless Upton shall have first received written notice from AI Finance
of the specific acts or omissions alleged to constitute a breach of any material
term of this Agreement, and such breach continues unremedied for a period of ten
(10) days after such notice.
(d) AI Finance may terminate this Agreement for Non-performance upon
two-hundred seventy (270) days notice to Upton on or before any March 31 during
the Employment Term commencing with March 31, 1997. "Non-performance" means AI
Finance's failure to achieve sixty (60%) percent of its "projected net income"
during the calendar year preceding any such termination notice.
8. Non-Competition. Upton covenants and agrees that during his employment
hereunder and for a period of two years after his employment hereunder is
terminated, he will not, without the prior written consent of AI Finance, (a)
compete with the business of AI Finance or any of its subsidiaries or affiliates
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 AI Finance or any of its
subsidiaries or affiliates; provided, however, that Upton may own up to two
percent of the capital stock of any publicly traded corporation in competition
with the business of AI Finance or any of its subsidiaries or affiliates, and
(b) divert, take away, interfere with or attempt to take away any present or
former employee or customer of AI Finance or any of its subsidiaries or
affiliates. Notwithstanding the foregoing, in the event that AI Finance
terminates this Agreement pursuant to Section 7(d) hereof, then the covenant and
agreement contained in (i) subparagraph (a) of this Section 8 shall be
applicable for a period of one year from such termination and (ii) subparagraph
(b) shall be applicable for a period of one year from such termination as it
relates to customers of AI Finance other than Charlie Falk's Auto Wholesale,
Inc. or any other entity affiliated with Charles E. Falk, Sr. or Charles E.
Falk, Jr.;
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provided however that the remaining revisions of this Section 8 shall continue
in full force and effect without modification In the event that the provisions
of this Section 8 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.
Upton acknowledges and agrees that the foregoing covenant is an essential
element of this Agreement and that, but for the agreement of Upton to comply
with the covenant, the Company would not have entered into this Agreement, and
that the remedy at law for any breach of the covenant will be inadequate and the
Company, 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.
9. Confidential Information. Upton recognizes and acknowledges that the
customer lists, patents, inventions, copyrights, methods of doing business,
trade secrets and proprietary information of AI Finance including, without
limitation, as the same may exist from time to time, are valuable, special and
unique assets of the business of AI Finance. Except in the ordinary course of
business or as required by law, Upton 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 which are not otherwise in the public domain to any person, firm,
corporation or other entity for any reason whatsoever. In addition, Upton
specifically acknowledges and agrees that the remedy at law for any breach of
the foregoing shall be inadequate and that AI Finance and the Company, 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.
10. Opportunities. During his employment with AI Finance, Upton shall not
take any action which might divert from AI Finance or any of its subsidiaries or
affiliates any opportunity which would be within the scope of any of the present
or future businesses of AI Finance or any of its subsidiaries or affiliates.
11. 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
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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 Upton hereunder which are of a personal nature shall neither
be assigned nor transferred in whole or in party by Upton. This Agreement shall
not be amended except by a written instrument duly executed by AI Finance and
Upton.
12. 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 extend 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.
13. 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 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 AI Finance
addressed to: AutoInfo Finance of Virginia , Inc.
1600 Route 208
Fair Lawn, New Jersey 07410
Attn: Chief Executive Officer
with a copy to: Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue, Suite 902
New York, New York 10178
Attn: Kenneth S. Rose, Esq.
If to Upton
addressed to: Mr. Robert E. Upton, Jr.
421 West Bute Street
Unit 402
Norfolk, Virginia 23510
or at such other address as the one party shall specify to the other party in
writing.
14. 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.
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15. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Virginia.
16. Arbitration. Any disputes arising hereunder shall be submitted to
arbitration before a single arbitrator in New York City 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.
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 FINANCE OF VIRGINIA , INC.
By: /s/ Scott Zecher
-------------------------------------
Scott Zecher, Chief Executive Officer
/s/ Robert E. Upton, Jr.
-------------------------------------
Robert E. Upton, Jr.
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