EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT is made and entered into as of this
31
st day
of August, 2007, by and between CUSTOMER ACQUISITION NETWORK
HOLDINGS, INC., a Delaware corporation with offices at 401 E. Las
Olas Boulevard, Suite 1560, Fort Lauderdale, Florida 33301 (the
“
Corporation ”),
and Michael Katz, an individual residing at 310 E. 53
rd Street,
Suite 11A, New York, New York 10022 (the “
Executive ”),
under the following circumstances:
RECITALS:
A.
The
Corporation desires to secure the services of the Executive
upon the terms and conditions hereinafter set forth;
and
B.
The
Executive desires to render services to Desktop Interactive,
Inc. d/b/a InterCLICK.com (“
InterClick ”),
a subsidiary of the Corporation upon the terms and conditions
hereinafter set forth.
NOW,
THEREFORE, the parties mutually agree as follows:
1.
Employment. The
Corporation hereby employs the Executive and the Executive hereby
accepts employment as an executive of the Corporation, subject to
the terms and conditions set forth in this Agreement.
2.
Duties. The
Executive shall serve as the President of InterClick, with such
duties, responsibilities and authority as are commensurate and
consistent with his position, as may be, from time to time,
assigned to him by the Board of Directors (the “
Board ”)
or Chief Executive of the Corporation. The Executive shall report
directly to the Chief Executive Officer of the Corporation. During
the Term (as defined in Section 3), the Executive shall devote his
full business time and efforts to the performance of his duties
hereunder unless otherwise authorized by the Board. Notwithstanding
the foregoing, the expenditure of reasonable amounts of time by the
Executive for the making of passive personal investments, the
conduct of private business affairs and charitable and professional
activities shall be allowed, provided such activities do not
materially interfere with the services required to be rendered to
the Corporation hereunder and do not violate the restrictive
covenants set forth in
Section 9 below.
3.
Term of Employment. The
term of the Executive’s employment hereunder, unless sooner
terminated as provided herein (the “
Initial Term ”),
shall be for a period of three (3) years commencing on the date
hereof (the “
Commencement Date ”).
The term of this Agreement shall automatically be extended for
additional terms of one (1) year each (each a “
Renewal Term ”)
unless either party gives prior written notice of non-renewal to
the other party no later than sixty (60) days prior to the
expiration of the Initial Term (“
Non-Renewal Notice ”),
or the then current Renewal Term, as the case may be. For purposes
of this Agreement, the Initial Term and any Renewal Term are
hereinafter collectively referred to as the “
Term .”
4.
Compensation of Executive .
(a)
The
Corporation shall pay the Executive a signing bonus of $75,000
by wire transfer of immediately available funds to an account
designated by the Executive upon execution of this Agreement
by the Company and Executive and upon the contemporaneous
closing of the merger of InterClick with and into a wholly
owned subsidiary of the Company (the “
Closing Date ”).
(b)
The
Corporation shall pay the Executive as compensation for his
services hereunder, in equal semi-monthly or bi-weekly
installments during the Term, the sum of $250,000 per annum
(the “
Base Salary ”),
less such deductions as shall be required to be withheld by
applicable law and regulations. The Corporation shall review the
Base Salary on an annual basis and has the right but not the
obligation to increase it, but has no right to decrease the Base
Salary.
(c)
In
addition to the Base Salary set forth in Section 4(b) above,
the Executive shall be entitled to receive an annual cash
bonus in an amount equal to thirty percent (30%) of his
then-current Base Salary based upon the achievement of
performance targets with respect to the InterClick business to
be mutually agreed upon by the Executive and a majority of the
Board] (the “
Bonus Target ”);
provided, however ,
that in the event that the InterClick business’s performance
for any fiscal year is greater than seventy-five percent (75%) but
less than one hundred percent (100%) of the applicable Bonus
Target, the Executive shall be entitled to the percentage of the
annual bonus determined by linear interpolation (
i.e .,
achievement of eighty-seven and one-half percent (87.5%) of the
applicable Bonus Target would result in an annual bonus under this
Section 4(c) of fifteen percent (15%) of the Executive’s Base
Salary);
provided further, however ,
that in the event the parties are unable to agree to a mutually
acceptable Bonus Target at any time during the Term, the Executive
shall receive a guaranteed annual bonus for any such fiscal year of
not less than fifteen percent (15%) of the Base Salary. In his sole
discretion, the Executive may elect to receive such annual bonus in
capital stock at the basis determined by the Board in good
faith.
(d)
The
Corporation shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses actually incurred or paid by
the Executive in the course of his employment, consistent with
the Corporation’s policy for reimbursement of expenses
from time to time.
(e)
The
Executive shall be entitled to participate in such pension,
profit sharing, group insurance, hospitalization, and group
health and benefit plans and all other benefits and plans,
including perquisites, if any, as the Corporation provides to
its senior executives (the “
Benefit Plans ”).
(f)
In
addition to the Base Salary and the bonus compensation, the
Executive shall receive options to purchase 300,000 shares of
the Corporation’s Common Stock. The option agreement
with respect to such options shall provide for such options to
vest twenty-five percent (25%) on each anniversary of the date
hereof and shall permit the Executive at least twelve (12)
months after the Executive’s death or Total Disability
(as defined in Section 5(a)(ii)) and at least three (3) months
after the Executive’s termination of employment for any
other reason to exercise such options and, other than such
restrictions, neither the options nor any shares of Common
Stock obtained upon exercise thereof shall be subject to
forfeiture or to the Company’s or other
stockholders’ right to repurchase. The options shall
fully vest upon the Executive’s termination pursuant to
Sections 5(a)(i), 5(a)(ii), 5(a)(iii) (provided that the
Corporation provided a Non-Renewal Notice) or 5(a)(v) or by
the Corporation or InterClick without “Cause” (as
defined in Section 5(d)) or upon a Change in Control
Transaction. The exercise price per share for such options
will be $1.00 per share, subject to adjustment for dividends,
splits, reclassifications and similar
transactions.
(g)
The
Corporation shall execute and deliver in favor of the
Executive an indemnification agreement on the same terms and
conditions entered into with the other officers and directors
of the Corporation. Such agreement shall provide for the
indemnification of the Executive for the term of his
employment and for a period of at least six (6) years
thereafter. The Corporation shall maintain directors’
and officers’ insurance during the Term and for a period
of at least six (6) years thereafter.
5.
Termination.
(a)
This
Agreement and the Executive’s employment hereunder shall
terminate upon the happening of any of the following
events:
(i)
upon
the Executive’s death;
(ii)
upon
the Executive’s “Total Disability” (as
herein defined);
(iii)
upon
the expiration of the Initial Term of this Agreement or any
Renewal Term thereof, if either party has provided a timely
notice of non-renewal in accordance with Section 3,
above;
(iv)
at
the Executive’s option, upon ninety (90) days prior
written notice to the Corporation;
(v)
at
the Executive’s option, in the event of an act by the
Corporation, defined in Section 5(c), below, as constituting
“Good Reason” for termination by the Executive;
and
(vi)
at
the Corporation’s option, in the event of an act by the
Executive, defined in Section 5(d), below, as constituting
“Cause” for termination by the
Corporation.
(b)
For
purposes of this Agreement, the Executive shall be deemed to
be suffering from a “
Total Disability ”
if the Executive has failed to perform his regular and customary
duties to the Corporation for a period of 180 days out of any
360-day period and if before the Executive has become
“Rehabilitated” (as herein defined) a majority of the
members of the Board, exclusive of the Executive, vote to determine
that the Executive is mentally or physically incapable or unable to
continue to perform such regular and customary duties of
employment. As used herein, the term “
Rehabilitated ”
shall mean such time as the Executive is willing, able and
commences to devote his time and energies to the affairs of the
Corporation to the extent and in the manner that he did so prior to
his Total Disability.
(c)
For
purposes of this Agreement, the term “
Good Reason ”
shall mean that the Executive has resigned due to (i) any
dim
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