CIO Employment Agreement - DEREK J. REYNOLDS

EMPLOYMENT AGREEMENT

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EMPLOYMENT AGREEMENT, dated as of October 8, 1996, by and between PRECISION RESPONSE CORPORATION, a corporation organized and existing under the laws of the State of Florida (hereinafter referred to as "Employer"), and DEREK J. REYNOLDS (hereinafter referred to as "Employee").





W I T N E S S E T H:

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WHEREAS, Employer is a Florida corporation engaged in the teleservicing, database management and marketing and fulfillment business;



WHEREAS, Employer desires to employ Employee upon the terms and conditions set forth below and Employee desires to accept employment upon such terms and conditions; and



WHEREAS, Employer and Employee desire to set forth in writing the terms and conditions of their agreements and understandings with respect to Employee's employment by Employer.



NOW, THEREFORE, the parties agree as follows:



1. EMPLOYMENT

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Employer hereby employs Employee, and Employee hereby accepts employment by Employer, upon the terms and conditions set forth in this Employment Agreement.



2. TERM

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A. Subject to the provisions for earlier termination set forth in Section 9 hereof, Employee's term of employment under this Employment Agreement shall commence on October 28, 1996 and shall continue until 5:00, p.m., October 27, 1999 (the "Employment Term").



B. The Employment Term shall, on October 21, 1999, and each October 21st thereafter, automatically extend for an additional one-year period, unless, at least 90 days prior to October 28, 1999, or any subsequent October 28, as the case may be, either party gives to the other written notice of intent not so to renew.



3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES

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Employee represents and warrants to Employer that Employee is free to accept employment with Employer as contemplated herein and has no other written or oral obligations or commitments which would interfere with Employee's acceptance of employment pursuant to the terms hereof or the full performance of Employee's obligations hereunder.



4. DUTIES AND EXTENT OF SERVICES

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Employee's duties and responsibilities hereunder shall be those reasonably assigned to Employee from time to time by Employer. Employee shall, unless and until otherwise determined by Employer, serve as Employer's Senior Vice President-Information Services (which shall be effective upon appointment of Employee to such office by Employer's Board of Directors) and chief information officer, and shall, on an active, full-time basis, subject to the direction of Employer's Chief Executive Officer, President, and Chief Operating Officer, have overall responsibility to supervise and conduct Employer's day-to-day software and information technology development, support and operations. Employee shall report directly to Employer's Chief Operating Officer, or as otherwise directed from time to time by Employer's Chief Executive Officer or President.



5. COMPENSATION

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A. Base Compensation. Subject to the provisions of Section 9 of this Employment Agreement, Employer shall pay salary to Employee ("Salary") based upon the rate of $250,000 per annum. Employer may decide, in its sole discretion, to increase (but not to decrease) the Salary at any time during the Employment Term. Salary shall be payable in accordance with Employer's normal payroll practices for its employees and shall be subject to payroll deductions and tax withholdings in accordance with Employer's usual practices and as required by law.



B. Bonus Compensation. Employee shall receive an annual bonus the amount of which shall be determined by Employer in its discretion (the "Bonus Amount"). Each annual Bonus Amount shall be paid on or before March 31 of each year of the Employment Term. The Bonus Amount payable on or before each March 31 shall be













based upon Employee's performance during the entire calendar year immediately preceding such March 31. Each Bonus Amount shall be subject to payroll deductions and tax withholdings in accordance with Employer's usual payroll practices and as required by law. Assuming that Employee remains an employee of Employer through December 31, 1996, Employee shall receive a Bonus Amount of $15,000 in respect of the 1996 year.



6. FRINGE BENEFITS AND EXPENSES

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A. Employee Benefits. Employee shall be entitled to such benefits and fringe benefits (such as individual and family health, dental, life and disability insurance) as are made available by Employer from time to time, in Employer's sole discretion, to all other similarly-situated employees generally.



B. Expenses. Employer shall reimburse Employee for Employee's reasonable out-of-pocket costs and expenses incurred in connection with the performance of Employee's duties and responsibilities hereunder, subject to Employee's presentation of appropriate documentation and, if requested, justification therefor, and provided that the types and amounts of expenses incurred are consistent with, in Employer's judgment, Employer's policies and practices.



C. Auto. Employer shall provide to Employee an automobile allowance of $500.00 per month during the Employment Term in order to defray Employee's automobile expenses incurred in the performance of Employee's duties, but shall not be obligated to provide Employee with an automobile.



D. Relocation Expenses. Employer agrees to reimburse to Employee the following expenses to the extent reasonably incurred by Employee in moving himself and his family and their personal property and effects from Sugar Land, Texas to south Florida:



(i) Up to a maximum reimbursement of $50,000 for the following costs and expenses: (a) packing and moving household goods and automobiles; (b) real estate commissions and other reasonable and customary closing costs relating to the sale by Employee of his primary residence in Sugar Land, Texas (other than prorations of taxes, interest and similar items and any













repairs Employee is obligated to make in connection with the sale); (c) reasonable and customary closing costs associated with the purchase of a residence in south Florida (other than prorations of taxes, interest and similar items, repair or renovation costs and loan points or discounts); and (d) reasonable travel expenses (including costs of transportation and hotel) of Employee and Employee's family in connection with the relocation;



(ii) For a period of 120 days following the date of this Employment Agreement or until Employee and his family have relocated to a primary residence in south Florida, whichever period is shorter, reimbursement for the reasonable temporary living expenses of Employee and his family;



(iii) reimbursement of Employee's reasonable travel expenses in connection with visiting his family in Texas until his family has relocated to south Florida (up to one (1) visit per month through July 1997); and



(iv) reimbursement of Employee's income tax liability, if any, attributable to his receipt of any of the foregoing relocation expenses.



7. VACATIONS

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Employee shall be entitled to three (3) weeks vacation each full year of the Employment Term, with full compensation (provided, however, that Employee shall not be entitled to be compensated for any unused vacation days upon termination of employment). The periods during which Employee shall be absent from work for vacation shall be at the reasonable discretion of Employer.



8. FAIR MARKET VALUE STOCK OPTIONS

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Employer agrees that Employer shall, on the date Employee commences employment hereunder, grant to Employee stock options (the "FMV Stock Options") each to acquire one (1) share of Employer's common stock (200,000 FMV Stock Options in total), pursuant to the Precision Response Corporation 1996 Incentive Stock Plan (the "Plan") and the Stock Option Agreement attached as Exhibit "A" to this Employment Agreement (the "FMV Stock Option Agreement").















9. TERMINATION OF EMPLOYMENT

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A. Termination Events. Employee's employment under this Employment Agreement may be terminated by Employer only as follows: with or without Cause (as hereinafter defined), effective upon the delivery of written notice to Employee; upon Employee's death; or upon Employee becoming Disabled (as later defined) and receiving written notice of termination from Employer to that effect. Employee may terminate Employee's employment under this Employment Agreement without being in breach hereunder by giving written notification of Employee's resignation to Employer which shall specify a resignation date no earlier than ninety (90) days following the date of delivery of such notice of resignation.



B. Definitions of Cause and Disabled. For purposes of this Employment Agreement, "Cause" shall mean and include: (i) commission of a felony, or commission of acts of fraud, dishonesty, or the like; (ii) habitual drunkenness during business hours or at Employer's premises; (iii) illicit use of drugs during business hours or at Employer's premises; (iv) abandonment of employment duties; (v) negligence in the performance of employment duties; (vi) an act or omission on the part of Employee not directed by Employer which results in or contributes to Employer being sanctioned or penalized by any governmental or quasi-governmental authority or body, or any stock exchange or body regulating or governing publicly-traded companies (including the NASD); (vii) insubordination; or (viii) breach by Employee of this Employment Agreement which, if curable, is not cured by Employee within ten (10) days following Employee's receipt of written notice thereof. Employee shall be deemed "Disabled" for purposes of this Agreement (a) if, in the reasonable judgment of Employer, Employee is unable, due to physical, mental or emotional illness or injury, to perform substantially all of Employee's duties and responsibilities for Employer for a continuous period of ninety (90) days, or (b) if Employee is adjudicated as an incompetent or has a guardian appointed to handle Employee's affairs.



C. Effect of Termination For Cause or Employee's Resignation. In the event that Employee's employment under this Employment Agreement is terminated by Employer with Cause, or because Employee resigns from or quits Employee's employment, Employer shall pay to Employee, within thirty (30) days following













the date of such termination or resignation, the Salary, if any, accrued and unpaid through the date of termination, and shall pay and provide to Employee the amounts and items payable and to be provided under Section 6 through the date of such termination; and Employee shall not be entitled to any other compensation, remuneration or other sums provided for in this Employment Agreement or to which Employee might otherwise be entitled hereunder or at law or in equity, including, without limitation, any accrued or unpaid Bonus Amount.



D. Compensation Upon Death or Disability. Upon the death of Employee, or termination of employment because Employee is Disabled, Employer shall pay to Employee, Employee's legal guardian or the legal representative of Employee's estate (or heir as designated by the legal representative of Employee's estate at such time), within thirty (30) days following the date of Employee's death or termination, the Salary, if any, accrued and unpaid through the date of termination; and Employee (or such legal guardian, legal representative or any heirs) shall not be entitled to any other compensation, remuneration or other sums provided for in this Employment Agreement or to which Employee might otherwise be entitled hereunder or at law or in equity.



E. Compensation Upon Termination Without Cause. In the event that Employer terminates Employee's employment under this Employment Agreement without Cause, Employee's sole and exclusive compensation and remedy hereunder shall be to receive from Employer, and Employer shall pay and/or provide, (i) the amount of Salary, if any, accrued and unpaid through the date of termination, and the amounts and items payable and to be provided under Section 6 through the date of termination, payable within thirty (30) days following termination of employment, (ii) the Salary that Employee would have received during the period following termination through the expiration of the period ending on the 365th day following the date of termination of Employee's employment or the expiration of the Employment Term (whichever is less), as and when it would have been payable or provided if Employee had remained an employee of Employer for such additional 365-day period or until expiration of the Employment Term (as applicable), and (iii) "out placement" services for a period of thirty (30) days following the date of termination. Employee shall not be entitled to the foregoing severance to th ...