EXHIBIT 10.J
EMPLOYMENT AGREEMENT
AGREEMENT ("Agreement") dated as of January 1, 2007 by and between
AutoInfo, Inc., a Delaware corporation ("Auto") and William I. Wunderlich, an
individual residing at 7565 NW 125th Way, Parkland, Florida 33076 ("Wunderlich")
WHEREAS, Wunderlich is currently the chief financial officer of Auto;
WHEREAS, Auto desires to assure itself of the benefit of Wunderlich's
services and experience for the period of time provided in this Agreement; and
WHEREAS, Wunderlich 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 Wunderlich as its chief financial
officer and Wunderlich 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. Wunderlich shall be the chief financial
officer of Auto. Wunderlich shall report to and be subject to the direction of
the Board and Wunderlich 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 position of chief financial
officer. During the Employment Term Wunderlich 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 Wunderlich 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 Wunderlich'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 Wunderlich 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 Wunderlich.
5. Bonus. In addition to the compensation provided for in Paragraph 4 of
this Agreement, during the Employment Term Auto shall pay to Wunderlich (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 Wunderlich shall be entitled to quarterly advances in the cumulative amount
equal to ninety percent (90%) of the
1
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, Wunderlich 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
Wunderlich. 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 $675,000.
6. Principal Office. Wunderlich 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 Wunderlich
for any and all reasonable moving expenses actually incurred by him.
7. Expenses and Benefits.
(a) Auto shall reimburse Wunderlich 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, Wunderlich will
be entitled to business-class travel and accommodations while traveling in
connection with Auto's business.
(b) Auto recognizes that Wunderlich will be required to incur
significant travel in rendering services to Auto hereunder and in connection
therewith Auto shall during the Employment Term provide Wunderlich 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) Wunderlich 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 Wunderlich 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) Wunderlich 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, Wunderlich shall be entitled to four
(4) weeks of fully paid vacation per annum. Wunderlich will be entitled to his
regular compensation on all regularly scheduled Auto holidays.
(f) Auto shall indemnify Wunderlich (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
Wunderlich shall be entitled to the protection of any
2
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 Wunderlich 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
Wunderlich in the performance of his duties hereunder that demonstrably causes
harm to Auto, and (c) the conviction of Wunderlich, 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
Wunderlich 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 Wunderlich 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 Wunderlich 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 Wunderlich his Base
Compensation and Employee Benefits that have actually accrued to the date of
termination. Any stock options granted by Auto to Wunderlich 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 Wunderlich by such date shall
remain exercisable for ninety (90) days from such termination date.
(ii) If, during the Employment Term, Wunderlich 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
Wunderlich's employment pursuant to this Employment Agreement by giving not less
than thirty (30) days' written notice to Wunderlich, at the end of which time
Wunderlich's employment shall be terminated; provided, however, that if
Wunderlich 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. Wunderlich 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
Wunderlich 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 Wunderlich and reasonably acceptable to
Auto or, if
3
Wunderlich is or is alleged to be mentally disabled, appointed by Wunderlich's
designee or legal representative. Upon the occurrence of such termination, Auto
shall have no further obligations hereunder, except that Wunderlich 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 Wunderlich 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 Wunderlich 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 Wunderlich pursuant to this subsection 8(a)(ii) shall
be offset against any payments received by Wunderlich 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 Wunderlich
(i) Wunderlich may terminate this Agreement at any time during
the Employment Term for "Good Reason" upon 30 days' written notice to Auto
(during which period Wunderlich 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 Wunderlich under this Agreement; (b) a material reduction
in Wunderlich'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, Wunderlich 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 Wunderlich's employment hereunder is terminated by
(a) Auto without cause or (b) Wunderlich for Good Reason, Auto shall pay to
Wunderlich 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 Wunderlich 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
4
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) Wunderlich may terminate this Agreement at any time
during the Employment Term without Good Reason upon sixty (60) days written
notice to Auto. If Wunderlich terminates his employment without Good Reason,
Auto shall pay Wunderlich his Base Compensation and Employee Benefits that have
actually accrued to the date of termination. Any stock options granted by Auto
to Wunderlich 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 Wunderlich 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 Wunderlich's service with Auto terminates by reason
of his death, Auto shall have no further obligations hereunder, except that
Wunderlich'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 Wunderlich 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
Wunderlich 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 Wunderlich'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) Wunderlich 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 Wunderlich after termination of his
employment.
9. Non-Competition. Wunderlich 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 Wunderlich without Good Reason or
(ii) the period after his employment hereunder is terminated and during which
Wunderlich 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 Wunderlich 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 Wunderlich 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
5
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. Wunderlich
acknowledges and agrees that the foregoing covenant is an essential element of
this Agreement and that, but for the agreement of Wunderlich 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 Wunderlich under this
Agreement.
10. Confidential Information. Wunderlich 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, Wunderlich 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 Wunderlich, (b)
that is or becomes available to Wunderlich without obligation of confidence from
a source having the legal right to disclose such information, (c) that is
already in the possession of Wunderlich in documented form without an obligation
of confidence and was not received by Wunderlich as a result of Wunderlich's
prior relationship with Auto or (d) in the opinion of Wunderlich's counsel, that
is required to be disclosed by applicable law or legal process as long as
Wunderlich promptly notifies Auto of such pending disclosure. In addition,
Wunderlich 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 Wunderlich's death during the term of this
Agreement, Auto shall make all COBRA medical premium payments for Wunderlich'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. Wunderlich 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,
Wunderlich will take such actions and execute and deliver such documents that
may be reasonably required in connection with the obtaining of such insurance.
Wunderlich acknowledges that Auto, and its stockholders have an insurable
interest in his life.
13. Opportunities. During his employment with Auto, Wunderlich 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
6
hereto, except that the duties and responsibilities of Wunderlich hereunder
which are of a personal nature shall neither be assigned nor transferred in
whole or in part by Wunderlich. This Agreement shall not be modified or amended
except by a written instrument duly executed by Auto and Wunderlich.
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 Wunderlich
addressed to: William I. Wunderlich
7565 NW 125th Way
Parkland, Florida 33076
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.
[SIGNATURE PAGE TO FOLLOW]
7
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/ Harry M. Wachtel
--------------------
Name: Harry M. Wachtel
Title: President
/s/ William I Wunderlich
------------------------
William I. Wunderlich
8