EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective as of the
date
of the execution of the Purchase Agreement, as defined below, (such
date, the
"Effective Date"), between DEBT RESOLVE, INC., a Delaware
corporation (the
"Company"), and BRUCE GRAY (the "Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to retain the services of the
Executive
and to that end desires to enter into a contract of employment with
him, upon
the terms and conditions herein set forth; and
WHEREAS, the Executive desires to be employed by the Company upon
such
terms and conditions;
NOW, THEREFORE, in consideration of the premises and of the
mutual
benefits and covenants contained herein, the parties hereto,
intending to be
bound, hereby agree as follows:
1. APPOINTMENT
AND TERM
Subject to the terms hereof, the Company hereby employs the
Executive,
and the Executive hereby accepts employment with the Company, all
in accordance
with the terms and conditions set forth herein, for a period of
three (3) years
commencing on the first business day following the closing date
(the
"Commencement Date") of the acquisition by the Company of all of
the outstanding
limited liability membership interests of Creditors Interchange
Receivable
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Management, LLC ("CIRM") contemplated by the Securities Purchase
Agreement,
dated as of April 30, 2007 (the "Purchase Agreement"), and ending
on the third
anniversary of such date (the "Expiration Date"), unless the
parties mutually
agree in writing upon a later date or the Executive's employment
hereunder is
automatically extended as provided in Section 7(g) hereof. The
Executive shall
(i) serve as a Executive Vice President of the Company, (ii) be
appointed to the
Board of Directors of the Company (the "Board") effective upon the
Commencement
Date and (iii) serve as CEO and President of CIRM, as a
wholly-owned subsidiary
of the Company, and shall report directly to the Company's CEO,
James Burchetta,
and, in addition, report directly to the Board to the extent
requested by the
Board. If the Securities Purchase Agreement is terminated without
the occurrence
of the contemplated acquisition, then the Agreement becomes null
and void.
2. DUTIES
(a) Executive will be responsible for the operations of CIRM, as
a
wholly-owned subsidiary of the Company, and shall have such
operational duties,
authority and responsibilities commensurate with running a
wholly-owned
subsidiary of the Company, including, but not limited to management
of the
operations, personnel, profit and loss and budget of CIRM as well
as manage
future acquisitions of ARM platforms.
(b) The Company agrees that all department and management level
employees of CIRM (e.g., Human Resources, Systems, Compliance,
Client Relations)
shall continue to report directly to Executive. CIRM and CIRM's
employees shall
work directly with the Company's corporate personnel staff on
issues pertaining
to public company-wide compliance, as well as on mutually
agreed-upon goals.
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(c) During the term of this Agreement, the Executive shall,
unless
prevented by incapacity, devote substantially all of his time,
attention and
ability to the discharge of his duties hereunder and to the
faithful and
diligent performance of such duties and the exercise of such powers
as may be
assigned to or vested in him by the Board and/or the Chief
Executive Officer of
the Company, such duties to be consistent with his position. The
Executive shall
obey the lawful and reasonable directions of the Board and Chief
Executive
Officer and shall use his diligent efforts to promote the interests
of the
Company and to maintain and promote the reputation thereof.
(d) The Executive shall not, during his term of employment (except
as a
representative of the Company or with the prior written consent of
the Chief
Executive Officer), be directly or indirectly engaged or concerned
or interested
in any other business or commercial activity, except through
ownership of an
interest of not more than five percent (5%) in any entity that does
not compete
with the Company.
(e) Notwithstanding the foregoing provisions, the Executive shall
be
entitled to serve in various leadership capacities in civic,
charitable and
professional organizations or managing the Executive's personal and
family
passive investments; provided in each case, and in the aggregate,
that such
activities do not materially conflict or interfere with the
performance of the
Executive's duties hereunder. The Executive recognizes that his
primary and
paramount responsibility is to the Company.
(f) The Executive shall be based in the Buffalo, New York area,
except
for required travel on the Company's business.
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3.
REMUNERATION
(a) Base Salary. As compensation for his services pursuant hereto,
the
Executive shall be paid a base salary during his employment
hereunder at the
salary of $400,000 per year. This amount shall be subject to all
applicable
withholding and other taxes and shall be payable in equal periodic
installments
in accordance with the usual payroll practices of the Company. The
Chief
Executive Officer and the Compensation Committee of the Board of
the Company,
shall review the compensation of the Executive annually, and in
their sole
discretion, may from time to time authorize increases in the base
salary of the
Executive. The Executive's base salary may only be reduced at the
direction of
the Compensation Committee of the Board of the Company.
(b) Annual Bonus. The Executive shall be eligible to receive a
bonus
(the "Annual Bonus"), which shall be determined in accordance with
Exhibit A
attached hereto. No modifications to Exhibit A hereof shall be made
without the
prior written approval of each of (i) the Executive, (ii) the CEO,
and (iii) the
Compensation Committee of the Board.
(c) Stock Options. The Executive shall be granted stock options
(the
"Stock Options"), which entitle him to purchase 400,000 shares of
common stock,
par value $.001 per share, of the Company at an exercise price
equal to the
price at of the Company's common stock on the close of trading on
the day upon
which the Purchase Agreement is executed, which options shall vest,
(1) as to
33% of such shares, on the first anniversary of the Effective Date,
(2) as to
33% of such shares, on the second anniversary of the Effective
Date, and (3) as
to 34% of such shares, on the third anniversary of the Effective
Date, and in
each case pursuant to a customary stock option agreement which will
contain the
terms pertaining to the Stock Options
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contained in this Section 3(c), which the Executive and the Company
shall enter
into within five (5) days after the execution of this Agreement.
Except as
otherwise expressly provided in this Agreement, the Stock Options
will expire
ten years after they are granted. Further, the Executive shall be
entitled to
participate in the Company's stock option grant program for the
grant of stock
options, on the same basis as other executives of the Company,
which plan the
Company shall use best efforts to have in place by December of
2007.
(d) The Company shall cause CIRM to adhere to its current policy
of
providing to Executive a car allowance, use of a cell phone, laptop
computer,
Blackberry Wireless Handheld Device, and reimbursement for gas
expenses and
mileage during business trips.
(e) Except as provided above, and in Sections 4, 6, and 7 hereof,
the
Executive shall not be entitled to receive any additional
compensation,
remuneration or other payments from the Company.
4. HEALTH
INSURANCE AND OTHER FRINGE BENEFITS.
The Company agrees that the current level of health, dental,
medical
and other plans or benefits currently provided to the Executive by
CIRM shall be
maintained by the Company for at least the term of this Agreement.
The Company
further agrees that the costs associated with Executive's (i)
health insurance
with prescription drug coverage, (ii) dental insurance, (iii)
long-term
disability insurance, (iv) short-term disability insurance and (v)
life
insurance shall continue to be paid for him by CIRM.
Notwithstanding the
immediately preceding sentence, if during the term of this
Agreement the Company
procures insurance coverage for the Company's employees that
provide more
favorable terms than those provided to
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the Executive, then the Executive shall be entitled to participate
in the more
favorable insurance coverage. Further, if and to the extent that
the Company
wishes to find a lower cost provider with respect to plans or
benefits provided
to the Executive (even if such lower cost provider shall provide
the same level
of benefits), the Company agrees to obtain the prior written
consent of the
Executive prior to changing providers of plans or benefits provided
to the
Executive. In addition to the foregoing, the Executive shall
participate on an
equitable basis in any other plans, programs and benefits of the
Company, if
any, to the extent his position, tenure, salary, age, health or
other
qualifications make him eligible to participate. Furthermore, to
the extent
permitted by applicable law, in the event that the Company changes
the health
care provider at CIRM, then the Company will provide CIRM with
sufficient funds
to permit CIRM employees to obtain health care coverage through the
prior health
care provider, provided that this provision will not bestow any
rights upon any
third-party beneficiaries.
5. VACATION
The Executive shall be entitled to four (4) weeks vacation (in
addition
to the usual national holidays) during each contract year during
which he serves
hereunder. Such vacation shall be taken at such time or times as
reasonably
requested by the Executive. Vacation not taken during a calendar
year may not be
carried forward.
6. REIMBURSEMENT
FOR EXPENSES
The Executive shall be reimbursed for reasonable and necessary
documented business expenses incurred in connection with the
business of the
Company in accordance with practices and policies established by
the Company.
With respect to credit cards used for business, travel (including
mileage and
gas reimbursement) and other business use in connection
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with discharging duties and obligations for CIRM, Executive agrees
to adhere to
the Company's internal policies to assure that there is compliance
with all
applicable rules and regulations (including without limitation,
regulations
promulgated pursuant to the Sarbanes-Oxley Act of 2002) and the use
of business
credit cards only for business purposes.
7.
TERMINATION
(a) This Agreement shall terminate in accordance with the terms
of
Section 7(b) hereof; provided, however, that such termination shall
not affect
the obligations of the Executive pursuant to the terms of Sections
8 and 9
hereof.
(b) This Agreement shall terminate on the Expiration Date; or
as
follows:
(i) Upon the written notice to the Executive by the Company at
any
time, because of (v) the willful and material malfeasance,
dishonesty or
habitual drug or alcohol abuse by the Executive demonstrably
related to or
demonstrably affecting the performance of his duties; (w) the
Executive's
continuing and intentional breach, non-performance or
non-observance of any of
the terms or provisions of this Agreement, but only after notice by
the Company
of such breach, nonperformance or nonobservance and the failure of
the Executive
to cure such default within thirty (30) days after the Company's
delivery of
such notice; (x) the conduct by the Executive which the Board in
good faith
determines could reasonably be expected to have a material adverse
effect on the
business, assets, properties, results of operations, financial
condition,
personnel or prospects of the Company (within each category, taken
as a whole),
but only after notice by the Company of such conduct and the
failure of the
Executive to cure same within thirty (30) days after the Company's
delivery of
such notice; (y) upon the Executive's conviction of a felony, any
crime
involving moral turpitude (including,
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without limitation, sexual harassment) related to or affecting the
performance
of his duties or any act of fraud, embezzlement, theft or willful
breach of
fiduciary duty against the Company; or (z) the determination,
during the
one-year period following the Closing under, and as defined in, the
Purchase
Agreement, that the representations made by the Executive in
Section 4 of the
Purchase Agreement contained any material misrepresentations
(clauses (v)-(z),
collectively referred to as "Cause") .
(ii) In the event the Executive, by reason of physical or
mental
disability, shall be unable to perform the services required of him
hereunder
with or without reasonable accommodation for a period of more than
90
consecutive days, or for more than a total of 120 non-consecutive
days in the
aggregate during any period of twelve (12) consecutive calendar
months, on the
91st consecutive day, or the 121st day, as the case may be. The
Executive
agrees, in the event of any dispute under this Section 7(b)(ii),
and after
written notice by the Board, to submit to a physical examination by
a licensed
physician practicing in Western New York selected by the Board, and
reasonably
acceptable to the Executive.
(iii) In the event the Executive dies while employed pursuant
hereto, on the last day of the month in which his death occurs.
(iv) Upon sixty (60) days' written notice by the Executive to
the
Company, in the event that the Company (A) shall not comply with
any material
provision of this Agreement and shall not have cured any such
failure within
thirty (30) days after written notice of such noncompliance has
been given by
the Executive to the Company, (B) shall assign to the Executive any
duties that
are materially inconsistent with his status or that materially
diminish his
duties, responsibilities, or authority hereunder, (C) reduces the
Executive's
Base
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Salary, (D) diminishes the Executive's then title, or (E) or causes
the
Executive to relocate outside of Buffalo, New York.
(v) Upon sixty (60) days' prior written notice by the Company
to
the Executive, without Cause.
(c) Termination for Cause. If this Agreement is termina
