Employment Agreement - Michael Miller

EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT, dated as of April 14,1999 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 MICHAEL P. MILLER (hereinafter referred to as "Employee").


W I T N E S S E T H:


WHEREAS, Employer is a Florida corporation engaged in interactive customer service and marketing through the integration of its teleservicing, Internet, database management and marketing and fulfillment capabilities;


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


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


2. TERM


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 April 26, 1999 and shall continue until 5:00, p.m., April 25, 2001 (the "Employment Term").


B. The Employment Term shall on April 25, 2001 automatically extend for an additional one-year period, unless prior to January 25, 2001 either party gives to the other written notice of intent not so to renew.


3. EMPLOYEE'S REPRESENTATIONS AND WARRANTIES


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 2


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


Employee's duties and responsibilities hereunder shall be those reasonably assigned to Employee from time to time by Employer consistent with this Section. 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 and President, have overall responsibility to supervise and conduct Employer's day-to-day software, Internet and information technology development, support and operations. Employee shall report directly to Employer's President, or as otherwise directed from time to time by Employer's Chief Executive Officer or President.


5. COMPENSATION


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 $185,000 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 sole and absolute discretion in a manner consistent with Employer's then current bonus plan which may be amended from time to time, but shall not exceed forty percent (40%) of Employee's Salary, except at the sole discretion of Employer (the "Bonus Amount"). Each annual Bonus Amount shall be paid on or before April 30th of each year of the Employment Term. The Bonus Amount payable on or before each April 30th shall be based upon Employee's performance during the calendar year immediately preceding such April 30th. 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.


6. FRINGE BENEFITS AND EXPENSES


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.


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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. Relocation Expenses.


(i) Employer agrees to reimburse to Employee, based on properly documented receipts, a maximum amount of $65,000 (and further subject to the category maximums hereinafter set forth) for the following relocation expenses to the extent reasonably incurred by Employee in moving himself and his family and their personal property and effects from Pacific Palisades, California to south Florida:


(a) Up to a maximum reimbursement of $15,000 for packing and moving household goods;


(b) Up to a maximum reimbursement of $10,000 for airfare and automobile rental expenses incurred by Employee and his immediate family in commuting from Pacific Palisades, California to south Florida in connection with house hunting, employment related matters prior to commencement of the Employment Term and after the commencement of the Employment Term for family purposes until Employee has completed the relocation of his family to south Florida; and


(c) Up to a maximum reimbursement of $40,000 for temporary living expenses and other housing costs of Employee and his family while in the process of relocating to south Florida, and for reasonable and customary closing costs relating to the sale by Employee of his primary residence in Pacific Palisades, California, and the purchase by Employee of a residence in south Florida including, but not limited to, real estate commissions and financing fees.


(ii) Upon execution of this Agreement by Employer and Employee, Employer shall advance to Employee the sum of $20,000 for the relocation expenses to be incurred and documented in accordance with subsection (i) of this Section 6.C.; and


(iii) If Employee is not employed by Employer, for any reason other than termination without Cause (as hereinafter defined), continuously for at least the one year period commencing with Employee's first day of employment pursuant to this Agreement, Employee shall repay Employer any and all amounts paid to Employee for relocation expenses pursuant to subsection (i) of this Section 6.C., up to and including $65,000.


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7. VACATION, PERSONAL AND SICK DAYS


Employee shall be entitled to 29 days of paid time off ("PTO") for vacation, personal and sick days each full year of the Employment Term, with full compensation (provided, however, that Employee shall not be entitled to be compensated for any unused PTO days upon termination of employment). The PTO days are exclusive of any Employer recognized holidays. The periods during which Employee shall be absent from work for vacation shall be at the reasonable discretion of Employer. In addition, any PTO days to be used during the first ninety (90) days of the Employment Term shall require prior approval of the President.


8. FAIR MARKET VALUE STOCK OPTIONS


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 (60,000 FMV Stock Options in total), pursuant to the Precision Response Corporation Amended and Restated 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


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


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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.A. and B. 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 and declared Bonus Amount, 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 (or its successor) terminates Employee's employment under this Employment Agreement without Cause (including, without limitation, upon a Change in Control, as hereinafter defined), Employee's sole and exclusive compensation and remedy hereunder shall be to receive from Employer, and Employer shall pay and provide, (i) the amount of Salary and declared Bonus Amount, if any, accrued and unpaid through the date of termination, and the amounts and items payable or to be provided under Section 6.A. and B. 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 of Employee's employment through the expiration of the period ending on the 180th 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 been provided if Employee had remained an employee of Employer for such additional 180-day period or until expiration of the Employment Term (as applicable). Employee shall not be entitled to the foregoing severance set forth in item (ii) above to the extent that


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Employee receives or is entitled to receive compensation or benefits from new employment with respect to employment services rendered during such period. For purposes of this Subsection E., (x) a "Change in Control" means that (1) neither Mark Gordon (for these purposes, counting all common stock directly or indirectly beneficially owned by Mark Gordon's Affiliates) nor David Epstein (for these purposes, counting all common stock directly or indirectly beneficially owned by David Epstein's Affiliates) beneficially owns at least 10% of the issued and outstanding common stock of Employer or its successor, (2) neither Mark Gordon (for these purposes, counting all common stock directly or indirectly beneficially owned by Mark Gordon's Affiliates) nor David Epstein (for these purposes, counting all common stock directly or indirectly beneficially owned by David Epstein's Affiliates) is the stockholder beneficially owning the highest number of issued and outstanding shares of common stock of Employer or its successor, or (3) neither Mark Gordon nor David Epstein occupies the position of Chairman of the Board, Chief Executive Officer or President of Employer; (y) "Affiliate" means, with respect to Mark Gordon or David Epstein, an immediate family member of his, a trust principally for his benefit and/or the benefit of his family members and/or ...