EMPLOYMENT
AGREEMENT , dated
September 24, 2004 by, and between DCAP GROUP,
INC. , a Delaware corporation (the
“Company”), and JACK WILLIS (the
“Employee”).
RECITALS
WHEREAS
, the Company and the Employee
desire to enter into an employment agreement which will set forth
the terms and conditions upon which the Employee shall be employed
by the Company and upon which the Company shall compensate the
Employee.
NOW,
THEREFORE , in
consideration of the foregoing and the mutual covenants hereinafter
set forth, the parties hereto have agreed, and do hereby agree, as
follows:
1.1
The Company will employ the Employee
in its business, and the Employee will work for the Company
therein, as its Chief Operating Officer for a term commencing as of
October 18, 2004 (the “Effective Date”) and terminating
on the third anniversary of the Effective Date (the
“Expiration Date”), subject to earlier termination as
hereinafter provided (the employment period, as earlier terminated
or as extended as provided for herein, being referred to as the
“Term”).
1.2 This Agreement will automatically renew for a
one-year term upon its initial expiration and at the end of each
renewal period, unless (a) the Employee has voluntarily terminated
his employment, or (b) the Employee's employment has been earlier
terminated as provided in this Agreement, or (c) the Company
provides to the Employee not less than one year's prior express
written notice that this Agreement is not to be renewed.
1.3 Upon the expiration of the Term or the
termination of the Employee’s employment with the Company for
any reason whatsoever, he shall be deemed to have resigned all of
his positions as an employee, officer and director of the Company
and of each and every subsidiary thereof.
2.1
During the Term, the Employee shall
serve as the Company’s Chief Operating Officer and shall
perform duties of an executive character consisting of
administrative and managerial responsibilities on behalf of the
Company of the type and nature generally assigned to chief
operating officers and such further duties of an executive
character as shall, from time to time, be delegated or assigned to
him by the Chief Executive Officer or the Board of Directors of the
Company consistent with the Employee’s position.
3.1
During the Term, the Employee shall
expend all of his working time for the Company; shall devote his
best efforts, energy and skill to the services of the Company and
the promotion of its interests; and shall not take part in
activities detrimental to the best interests of the Company. The
Employee shall be permitted to engage in charity work, tend to
personal financial and legal affairs and, subject to the prior
written consent of the Company, serve on the Board of Directors of
other business organizations, provided that such activities do not
interfere with his full-time services to the Company.
4.1
For all services to be rendered by
the Employee during the Term, and in consideration of the
Employee’s representations and covenants set forth in this
Agreement, the Employee shall be entitled to receive from the
Company compensation as set forth in Paragraph 4.2.
4.2
During the Term, the Employee shall
be entitled to receive a salary at the rate of two hundred thousand
dollars ($200,000) per annum (“Base Salary”). The
Employee shall be entitled to such additional compensation as may
be determined from time to time by the Board of Directors of the
Company in its sole discretion. All amounts due hereunder shall be
payable in accordance with the Company’s standard payroll
practices.
5.
REIMBURSEMENT OF
EXPENSES
5.1
The Company shall pay directly, or
reimburse the Employee for, all reasonable and necessary expenses
and disbursements incurred by the Employee for and on behalf of the
Company in the performance of his duties during the
Term.
5.2 The Employee shall
submit to the Company, not less than once in each calendar month,
reports of such expenses and disbursements in form normally used by
the Company and receipts with respect thereto and the
Company’s obligations under Paragraph 5.1 hereof shall be
subject to compliance therewith.
5.3
During the Term, the Employee shall
be entitled to receive a monthly automobile allowance of seven
hundred fifty dollars ($750).
6.1 If, during the
Term, the Employee, in the opinion of a majority of all of the
members of the Board of Directors of the Company (excluding the
Employee if he is a member), as confirmed by competent medical
evidence, shall become physically or mentally incapacitated to
perform his duties for the Company hereunder
(“Disabled”) for a continuous period, then for the
first six (6) months of such period he shall receive his full
salary. In no event, however, shall the Employee be entitled to
receive any payments under this Paragraph 6.1 beyond the expiration
or termination date of this Agreement. Effective with the date of
his resumption of full employment, the Employee shall be
re-entitled to receive his full salary. If such illness or other
incapacity shall endure for a continuous period of at least nine
(9) months or for at least two hundred fifty (250) business days
during any eighteen (18) month period, the Company shall have the
right, by written notice, to terminate the Employee’s
employment hereunder as of a date (not less than thirty (30) days
after the date of the sending of such notice) to be specified in
such notice. The Employee agrees to submit himself for appropriate
medical examination to a physician of the Company’s
designation as necessary for purposes of this Paragraph
6.1.
6.2
The obligations of the Company under
this Paragraph 6 may be satisfied, in whole or in part, by payments
to the Employee under disability insurance provided by the
Company.
6.3 Notwithstanding the
foregoing, in the event, at the time of any apparent incapacity,
the Company has in effect a disability policy with respect to the
Employee, the Employee shall be considered Disabled for purposes of
Paragraph 6.1 only if he is considered disabled for purposes of the
policy.
6.4
The Company agrees to obtain a
disability insurance policy on behalf of the Employee (subject to
the Employee’s satisfying any requirements therefor) and
maintain such policy in effect during the Term. Such policy (which
shall be in addition to the Company’s group policy for its
employees) shall provide for such amount of annual coverage as may
be obtained for a premium of $6,500 per annum with respect
thereto.
7.1
(a) The services of the Employee are
unique and extraordinary and essential to the business of the
Company, especially since the Employee shall have access to the
Company’s customer lists, trade secrets and other privileged
and confidential information essential to the Company’s
business. Therefore, the Employee agrees that, if the term of his
employment hereunder shall expire or his employment shall at any
time terminate for any reason whatsoever, with or without Cause (as
hereinafter defined) and with or without Good Reason (as
hereinafter defined), the Employee will not at any time during the
one year period commencing with the date on which the Employee
ceases to be employed by the Company (the “Cessation
Date”) (the “Restrictive Covenant Period”),
without the prior written consent of the Company, directly or
indirectly, (I) anywhere within five (5) miles of the location of
any office of the Company or any franchisee thereof or (II) with
respect to the Company’s premium finance business and any
other business with respect to which the Company requires a license
to operate, within any state in which the Company has a license to
operate, in each case at the Cessation Date, whether individually
or as a principal, officer, employee, partner, shareholder, member,
manager, director, agent of, or consultant or independent
contractor to, any entity,
(i)
engage or participate in a business
which, as of the Cessation Date, is similar to or competitive with,
directly or indirectly, that of the Company and shall not make any
investments in any such similar or competitive entity, except that
the foregoing shall not restrict the Employee from acquiring up to
one percent (1%) of the outstanding voting stock of any entity
whose securities are listed on a stock exchange or Nasdaq or from
providing services to an insurance company whose then annual
premiums exceed $1 billion;
(ii)
cause or seek to persuade any
director, officer, employee, customer, client, account, agent or
supplier of, or consultant or independent contractor to, the
Company, or others with whom the Company has a business
relationship (collectively “Business Associates”), to
discontinue or materially modify the status, employment or
relationship of such person or entity with the Company, or to
become employed in any activity similar to or competitive with the
activities of the Company;
(iii)
cause or seek to persuade any
prospective customer, client, account or other Business Associate
of the Company (which at or about the Cessation Date was then
actively being solicited by the Company) to determine not to enter
into a business relationship with the Company or to materially
modify its contemplated business relationship;
(iv)
hire, retain or associate in a
business relationship with, directly or indirectly, any director,
officer or employee of the Company; or
(v)
solicit or cause or authorize to be
solicited, or accept, for or on behalf of him or any third party,
any business from, or the entering into of a business relationship
with, (A) others who are, or were within one (l) year prior to the
Cessation Date, a customer, client, account or other Business
Associate of the Company, or (B) any prospective customer, client,
account or other Business Associate of the Company which at or
about the Cessation Date was then actively being solicited by the
Company.
The foregoing
restrictions set forth in this Paragraph 7.1(a) shall apply
likewise during the Term.
(b) Notwithstanding the foregoing, in the event
that the Employee’s employment is terminated by the Company
without Cause, or by the Employee for Good Reason, or ceases
following a non-renewal of this Agreement (in each case, an
“Entitlement Termination”), then the Restrictive
Covenant Period shall instead be the six (6) month period
commencing with the Cessation Date (the “Entitlement
Restrictive Covenant Period”), except that, in such event,
the Company may, upon written notice given to the Employee within
one (1) month following the Cessation Date, extend the Entitlement
Restrictive Covenant Period from six (6) months to one (1) year (an
“Extension”).
(c) During the initial six (6) months of the
Entitlement Restrictive Covenant Period, the Employee shall be
entitled to receive from the Company an amount per annum equal to
two-thirds (2/3) of his Base Salary (payable over such six (6)
month period), less all amounts the Employee is entitled to receive
from the Company pursuant to Paragraph 11.5 hereof for such period
and/or from third parties in consideration of services rendered,
directly or indirectly, by the Employee to or for the third parties
during such period (the “Initial Restrictive Covenant
Amount”). During the second six (6) months of the Entitlement
Restrictive Covenant Period (if an Extension notice is given by the
Company), the Employee shall be entitled to receive from the
Company an amount per annum equal to his Base Salary (payable over
such six (6) month period), less all amounts the Employee is
entitled to receive from the Company pursuant to Paragraph 11.5
hereof for such period and/or from third parties in consideration
of services rendered, directly or indirectly, by the Employee to or
for the third parties during such period (together with the Initial
Restrictive Covenant Amount, the “Restrictive Covenant
Amount”). Notwithstanding the foregoing, in the event of an
Entitlement Termination, the Company may elect to release the
Employee from the restrictions set forth in clause (i) of Paragraph
7.1 (a) hereof during the Entitlement Restrictive Covenant Period
by written notice to such effect given to the Employee at least
three (3) months prior to the Cessation Date (in the event of an
Entitlement Termination relating to a non-renewal of this
Agreement) or within thirty (30) days following the Cessation Date
(with respect to any other Entitlement Termination) . In the event
the Company sends such notice, it shall be relieved of its
obligation to pay any portion of the Restrictive Covenant
Amount.
7.2
The Employee agrees to disclose
promptly in writing to the Chief Executive Officer of the Company
all ideas, processes, methods, devices, business
|
