EXHIBIT 10I
EMPLOYMENT AGREEMENT
AGREEMENT ("Agreement") dated as of January 1, 2007 by and between
AutoInfo, Inc., a Delaware corporation ("Auto") and Harry M. Wachtel, an
individual residing at 17222 Bermuda Village Dr., Boca Raton, FL 33487
("Wachtel")
WHEREAS, Wachtel is currently the chairman, chief executive officer and
president of Auto and president of Sunteck Transport Co., Inc., a wholly owned
subsidiary of Auto ("Sunteck");
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. The board of directors of Auto (the
"Board") shall use its best efforts to vote or recommend to the stockholders of
Auto, as applicable, that during the Employment Term (as defined herein): (i)
Wachtel continue as chairman, chief executive officer and president of Auto,
(ii) Wachtel continue as president of Sunteck, (iii) Wachtel be elected to and
continue on the board of directors of each subsidiary of Auto as he may select
and (iv) if the Board or any of its subsidiaries shall appoint an executive
committee (or similar committee authorized to exercise the general powers of the
Board) that Wachtel shall be a member of any such committee.
2. Duties and Responsibilities. Wachtel shall be the chief executive
officer and president of Auto and president of Sunteck. 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, 2011 (the "Employment Term").
4. Compensation. Auto shall pay to Wachtel a salary at the rate of
$250,000 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.
1
5. Bonus. In addition to the compensation provided for in Paragraph 4 of
this Agreement, during the Employment Term Auto shall pay to Wachtel (i) annual
cash bonuses in an amount equal to ten percent (10%) of the first $1,250,000 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"), plus an additional five percent (5%) of any Operating
Profit in excess of $1,250,000 (the "Annual Bonus"). The Annual Bonus, if any,
for each year during the Employment Term shall be paid not later than March 31st
of the subsequent year, however, during each year of the Employment Term Wachtel
shall be entitled to quarterly advances in the cumulative amount equal to ninety
percent (90%) of the projected Annual Bonus based upon the Operating Profit of
the quarterly period then ended (the "Cumulative Advances") and shall be paid
within 45 (forty five) days of the close of each quarterly period. The
Cumulative Advances for any such year shall be applied against the Annual Bonus
for that year and in the event the Cumulative Advances paid during any such year
exceeds the actual Annual Bonus payable for that year, Wachtel shall promptly
reimburse Auto an amount equal to the difference between the amount of
Cumulative Advances received during such year and the actual Annual Bonus amount
payable for that year; and (ii) such other bonuses as determined in the sole
discretion of the Board based upon the achievement of specific objectives
mutually determined by the Board and Wachtel. Notwithstanding the foregoing, in
no event, subject to the sole discretion of the Board, shall the total annual
Base Compensation and Annual Bonus for any particular year exceed $750,000.
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 therefore. 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 $1,500.00 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.
2
(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, 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.
Collectively, the items referred to in paragraphs (b)-(f) of this Section
7 shall hereinafter be referred to as "Employee Benefits."
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 therefore 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'
3
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, Employee Benefits and Annual 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 any
bonus and profit sharing plans pursuant to Section 7(d) hereof and Annual 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 the benefits pursuant to Section 7(c)
hereof, to the extent available, for the remainder of the Employment 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 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 materially 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
4
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 or (b) Wachtel for Good Reason, Auto shall pay to Wachtel all
compensation, bonuses and benefits that he is entitled to under this Agreement
for the remainder of the Employment Term. 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
(i) for nonqualified stock options, until the later to occur of (x) the first
anniversary of such termination or (y) the scheduled expiration date of such
options; and (ii) for incentive stock options, until ninety (90) days after of
such termination.
(iv) Wachtel may terminate this Agreement at any time during
the Employment 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 (but not any bonus and profit sharing plans
pursuant to Section 7(d) hereof except as provided hereinafter) through the end
of the third month following the month in which such death occurs, (b) a
pro-rata share of any bonus and profit sharing plans pursuant to Section 7(d)
hereof and Annual 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 earlier 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
5
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 or (ii) the
remainder of the Employment Term.
12. Life Insurance. Wachtel agrees that at any time and from time to time
during the Employment 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.
6
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
405 Park Avenue, Suite 1401
New York, New York 10022
Attn: Kenneth S. Rose, Esq.
If to Wachtel
addressed to: Harry M. Wachtel
17222 Bermuda Village Dr.
Boca Raton, FL 33487
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.
7
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.
[SIGNATURE PAGE TO FOLLOW]
8
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: Executive Vice President
/s/ Harry M. Wachtel
--------------------------
Harry M. Wachtel
9