EXHIBIT 10.60
EMPLOYMENT AGREEMENT-PRESIDENT/CEO-HTS
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT, made and entered into as of the day of
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, 2004, by and between Hickory Travel Systems, Inc., a Delaware
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corporation with its principal office and place of business located at Saddle
Brook, New Jersey ("Employer") and, L. Xxxxxxx Xxxxxx, an individual residing at
Chicago, Illinois (the "Employee").
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WITNESSETH
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WHEREAS, the Employer desire to employ Employee in the capacities
hereinafter stated, and the Employee desires to enter into the employ of the
Employer in such capacities for the period and on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is hereby agreed by the Employer and the Employee as follows:
1. Employment Period. The Employer hereby agrees to employ the
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Employee as its President and Cheif Executive Officer and the Employee, in such
capacity, agrees to provide services to the Employer for the period beginning on
the date first above written (the "Commencement Date") and ending on the 3rd
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anniversary of the Commencement Date (the "Employment Period"). The Employment
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Period is to be a Revolving 3 year Term defined as an Initial Term for 3 years
which automatically renews for a 3 year term every 12 months unless terminated
pursuant to this Agreement.
2. Performance of Duties. The Employee agrees that during the
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Employment Period, while he is employed by the Employer, he shall devote his
full time, energies and talents exclusively to serving in the capacity of
President and Chief Executive Officer and or in other capacities as deemed
appropriate by the Employer. In this capacity the Employee will serve at the
direction of the Board of Directors of the Employer. Employee has been provided
a copy of the Employer's Corporate Governance Policies & Procedures. By
execution hereof, Employee agrees to faithfully perform his duties in compliance
therewith. The Employee will, during normal working hours, devote his full-time
efforts in the best interests of the Employer, and to perform the duties
assigned to him by the aforementioned Board of Directors (the "Board")
faithfully, efficiently and in a professional manner; provided further that,
without the Board's consent (which consent shall not be unreasonably
withheld(1)), the Employee shall not:
(a) serve as or be a consultant to or employee, officer, agent or director
of any corporation, partnership or other entity other than the Employer or any
of its affiliates as directed or approved by the Board other than civic,
charitable, or other public service organizations(2); or
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(1)For purposes of this Agreement the terms "unreasonably withheld" and
"reasonable" when delimiting the actions of the Employer shall mean that the
Employer is committed to being commercially reasonable in light of its business
activities, plans and policies. In addition, the Employer may not withhold its
reply to an Employee request for an unreasonable length of time.
(2) Whle Employee may serve such public spirited organizations, Employee shall
not make commitments of his time or that of his co-employees to such an extent
that he or they are unable to fulfill their duties to the Employer.
(b) have more than a three percent (3%) ownership interest in any
enterprise other than the Employer or any of its affiliates if such ownership
interest would have a material adverse effect upon the ability of the Employee
to perform his duties hereunder in the reasonable opinion of the Board upon full
disclosure to the Board.
3. Compensation. Subject to the terms and conditions of this
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Agreement, during the Employment Period, the Employee shall be compensated by
the Employer for his services as follows:
(a) He shall receive, for each 12-consecutive month period beginning on the
Commencement Date and each anniversary thereof, a base salary ("Base Salary")
that is not less than $150,000.00 per year, payable in substantially equal
monthly or more frequent installments and subject to normal and customary tax
withholding as directed by the Employee and other deductions. During the
Employment Period the Employee's salary rate shall be reviewed by the Board on
or before each anniversary of the Commencement Date to determine whether an
adjustment in his rate of compensation is appropriate, which determination shall
be within the sole discretion of the Board.
(b) He shall be eligible, in the sole discretion of the Board, to receive
an annual incentive-based bonus based on his individual performance in the
achievement of the goals and objectives set by agreement with the Board in
advance of such year;.
(c) He shall be a participant in the following employee benefit plans
maintained by the Employer at the absolute discretion of the Board(3) on
substantially the same terms and conditions as other employees of the Employer
in comparable positions: stock option plan, stock warrants plan, group life
insurance, group medical and dental insurance for him and his immediate family,
long-term disability, vacation (1.5 weeks at 2 times the Base Salary rate per
week per $75,000 of Base Salary or part thereof) and sick days.
(d) He shall be entitled to receive the following perquisites: The Employer
shall provide key man life term insurance on the life of Employee (in addition
to any policy required by creditors of Employer) equal to 8 times the Base
Salary in effect at the time. Employee may designate a beneficiary for 50% of
the policy benefits. Employee shall not be subject to income taxes on the
premiums.
(e) He shall be entitled to a share of the profits of Employer in an amount
not to exceed $2,700,000 over the life of this Employment Contract. Profits
shall be determined pursuant to the GAAP rules of accounting.
(f) He shall be reimbursed by the Employer for all reasonable business,
promotional, travel and entertainment expenses incurred or paid by him during
the employment period in the performance of his services under this Agreement
that are consistent with the Employer's policies in effect from time to time,
provided that the Employee furnishes to the Employer appropriate documentation
in a timely fashion as required by the Internal Revenue Code in connection with
such expenses and shall furnish such other documentation and accounting as the
Employer may from time to time reasonably request.
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(3)Although the Board has the right to determine the benefit plans availed to
all employees, those plans offered and accepted by Employee when availed by the
Employer shall remain in effect as to the Employee for 1 year following the year
in which the Employer discontinues or reduces the benefit.
(g) Employer shall provide an insured automobile for Employee's use during
the Employment Period at the rate of 1 car every 3 years. The value and type of
vehicle shall be consistent with the class of vehicle historically provided to
Employee's position, to wit: a value of $80,000. In that the services required
of Employee are indefinite as to time of day and day of week, and, in that
Employee is 'on call' for Employer's purposes for services for which an
automobile is necessary, the company use element is deemed to be seven (7) days
and seven (7) nights per week.
4. Compensation Due Upon Termination. Except as otherwise provided
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under the employee benefit plans maintained by the Employer in which the
Employee participates in accordance with Subparagraph 3(c), the Employee's right
to compensation for periods after the date his employment with the Employer
terminates shall be determined in accordance with the following:
(a) Discharge Without Cause. In the event the Employer terminates
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the Employee's employment under this Agreement without cause (as defined in
Subsection (c) below), the Employee shall be entitled to receive:
(i) payment of his entire salary as it is customarily paid
(as of the date of termination) in accordance with the provisions of
Subparagraph 3(a) for 36 months; and
(ii) payment of any incentive compensation payments that
otherwise would have been payable to the Employee under Subparagraph 3(b)
through the date his employment with the Employer terminates; payable when such
payments would otherwise be paid; for partial years, the Employee shall be
entitled to the proportionate share bearing the same ratio as the number of
months or part thereof the Employee worked to a full year times the bonus
amounts for a full year;
At the discretion of the Employer, payments may either be made in
accordance with the Employer's then existing pay cycle practice or in a lump sum
amount. Payment of any and all monies due under this provision will be made only
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when the Employee has signed and returned the Employer's waiver and release.
(b) Voluntary Resignation. The Employer shall have no obligation
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to make payments to the Employee in accordance with the provisions of Paragraph
3 for periods after the date on which the Employee's employment with the
Employer terminates due to the Employee's voluntary resignation.
(c) Discharge for Cause. The Employer shall have no obligation to
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make payments to the Employee in accordance with the provisions of Paragraph 3
for periods after the Employee's employment with the Employer is terminated on
account of the Employee's discharge for cause. For purposes of this
Subparagraph 4(c), the Employee shall be considered discharged for "cause" if he
is discharged by the Employer on account of the occurrence of one or more of the
following events occurring during the Employment Period:
(i) the Employee uses alcohol, narcotics or other controlled
substances to the extent that it objectively prevents Employee from efficiently
performing services for the Employer;
(ii) the Employee discloses confidential information in
violation of Section 5; discharge by virtue of this sub-Section shall deprive
the Employee of all rights to all bonuses, stock warrants previously issued or
owed, or any other plan offered and funded by the Employer; or
(iii) the Employee engages in activity in violation of
Section 5; discharge by virtue of this sub-Section shall deprive the Employee
of all rights to all bonuses, stock warrants previously issued or owed, or any
other plan offered and funded by the Employer; or
(iv) the Employee engages in theft, dishonesty, fraud or
embezzlement from Employer, its affiliates or partners; discharge by virtue of
this Subsection shall deprive the Employee of all rights to all bonuses, stock
warrants previously issued or owed, or any other plan offered and funded by the
Employer; or
(v) the Employer is directed by regulatory or governmental
authorities to terminate the employment of the Employee or the Employee engages
in activities that cause actions to be taken by regulatory or governmental
authorities that have a material adverse effect on the Employer; or
(vi) the Employee is convicted of a felony (other than a
felony resulting from a traffic violation) involving any crime of moral
turpitude or any crime involving the Employer or any of its affiliates; or
(vii) the Employee is proven to have engaged in or continues
to engage in sexual harassment of or sexually inappropriate behavior with any
employee of the Employer or is proven to have commited any act which otherwise
creates an offensive work environment for other employees of the Employer; or
(viii) the Employee materially disregards his duties under
this Agreement after (A) notice has been given to the Employee by the Board or
their designee that it views the Employee to be flagrantly disregarding his
duties under this Agreement and (B) the Employee has been given a period of 30
days after such notice to cure such misconduct (provided that no such notice or
cure period shall be required if Employee's disregard of his duties has
materially and adversely affected the Employer); or
(ix) any event of egregious misconduct, or pattern of
conduct, to the extent that, in the reasonable judgment of the Boards, the
Employee's credibility and reputation no longer conform to the desired standard
of the Employer's employees; or
(x) the Employee commits an act of fraud against the Employer
or violates a duty of loyalty to the Employer or violates Section 2; or
(xi) the Employee makes or attempts to make an enforceable
commitment to a third party in behalf of the Employer or its affiliates and
partners without following the Employer's Corporate Governance Policies &
Procedures or in violation of an explicit directive from Employer.
In the event that the Employer believes it has cause to terminate the
Employment of Employee(4) , it shall notify him in writing of the offense and
any cure action available to the Employee. If there is no cure action permitted,
or Employee does not agree with the allegation of prohibited conduct, Employee
may seek the appointment of an ad hoc committee to review the allegations and
positions of the Parties. The Employer shall create a five member committee
comprised of disinterested officers and directors of the Employer. The Committee
shall elect its Chairperson by majority vote, including the vote of the elected
member. The Committee shall set its calendar and agenda, take oral and written
evidence as guided by outside corporate counsel, conduct discreet and fair
inquiries while at all times maintaining respect for the Employee, his
co-workers and the decorum of the Employer. A written or taped record shall be
maintained by the Committee with a copies available to all committee members and
the Employee. The Committee shall issue a written finding supported by a
majority of the members sitting at the time such findiung is issued that shall
be binding upon the Employer but only binding upon the Employee upon his
consent. The finding shall summarize the facts, the allegations and the evidence
deemed most reliable. The finding shall include a dispositive statement of the
opinion of the Committee as to the requested relief of each Party and shall
support their findings with the evidence adduced during their inquiry. Employee
shall be entitled to full compensation during the pendency of the Committee's
review. Employee may elect to continue to work provided that the Employer
consents thereto. In the event that Employee does not consent to the Committee's
Report, that fact shall not vitiate the termination but shall leave the Employee
to his other remedies.
(d) Disability. The Employer shall have no obligation to make
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payments to the Employee in accordance with the provisions of Section 3 for
periods extending beyond 6 months after the date the Employee's employment with
the Employer terminates on account of permanent disability(5). These payments of
salary are uneffected by those payments as may be available to the Employee
resulting from insurance coverage specific to disability. For purposes of this
Subparagraph 4(d), determination of whether the Employee is disabled shall be
determined in accordance with the Employer's long term disability plan and
applicable law. Employer may require Employee to obtain a second physicians
certificate of disability from a physician of Employer's choosing. The opinion
of Employer's chosen physician shall control this Section. Employee's election
to apply for and accept workers' compensation cash benefits will relieve the
Employer of the obligation to pay the 6 months salary. A termination due to
disability does not deny Employee payments due and owing on other accounts as of
such date such as his proportional bonuses. In the event of termination due to
disability, Employer shall maintain all insurances on Employee and his family
for 24 months.
(e) Death. The Employer shall have no obligation to make payments
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to the Employee in accordance with the provisions of Section 3 for periods after
the date of the Employee's death, except payments due and owing as of such date.
However, the Employer shall continue to pay a Xxxxxxxxx Xxxxx Benefit to the
Employee's next of kin(6) in the amount equivalent to the Employee's gross
salary for a period of not less than 6 months or longer until such time as the
Employer has paid to his next of kin, or estate as the law may require, the
entire amount owed under all plans, insurance policies and bonus provisions(7).
Employer shall continue all medical insurances for the covered dependents of
Employee after Termination as a result of death for 24 months.
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(4)The procedure detailed in this Section shall also apply to disciplinary
actions not seeking termination.
(5) Permanent Disability shall mean a disabling condition (as certified by a
licenced physician) that prevents Employee from fulfilling his duties as they
are defined by Employer for a period of 180 calendar days within any 210
calendar day period. Temporary disability is a disabling condition (as certified
by a licenced physician) that lasts for less than 150 days in any 180 calendar
day period. Employee shall remain entitled to the benefits of this Agreement
during Temporary Disability.
(6) Provided the Employee has kin.
(7) Employer shall not be obligated to liquidate stock or warrants owned by
Employee at the time of his death. Vested warrants shall be demised through the
Employee's estate. Employer's plans requiring annual review of Employer's
revenues or income shall be performed in the customary manner and the benefits
provided by this Section shall continue until such reviews are completed.
5. Covenants of Employee. The Employee covenants and agrees that:
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(a) Covenant against Competition. During the period commencing on
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the date hereof and ending one (1) years following the date upon which the
Employee shall cease to be an employee of the Company (the "Restricted Period"),
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the Employee shall not, within a 100 mile radius of any location of the Employer
or its affiliates (the "Restricted Area"), directly or indirectly, (1) engage in
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any business substantially similar to the actual or intended business carried on
by the Employer or its affiliates during the Employment Period and as of the
date of Employee's termination of employment with the Employer (the "Company
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Business") for the Employee's own account; (2) render any services to any person
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doing business in the Restricted Area (other than the Employer or its
affiliates) engaged in such activities; or (3) become interested in any such
person (other than the Employer or its affiliates) as a partner, shareholder,
member, principal, agent, consultant or in any other relationship or capacity;
provided, however, that notwithstanding the above, the Employee may own,
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directly or indirectly, solely as an investment, securities of any such person
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which are traded on any national securities exchange or NASDAQ if the Employee
(A) is not a controlling person of, or a member of a group which controls, such
person and (B) does not, directly or indirectly, own four point nine per cent
(4.9%) or more of any class of securities of such person. For purposes of this
entire Agreement, the term 'affiliates' shall mean any person, entity or
corporation that owns a controlling interest in Employer, or with which Employer
is doing business within a joint venture agreement, any entity partially owned
by Employer or any entity that Employer or one of its partially owned
subsidiaries is attempting to acquire or merge with or has attempted to acquire
or merge with in the previous six (6) months.
(b) Confidential Information. During the Restricted Period, the
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Employee shall keep secret and retain in strictest confidence, and shall not use
for his benefit or the benefit of others, except in connection with the business
and affairs of the Employer and its affiliates, all confidential matters
relating to the Company Business or to the Employer and its affiliates learned
by the Employee heretofore or hereafter directly or indirectly from the Employer
and its affiliates, including, without limitation, information with respect to
(a) operations, (b) sales figures, (c) profit or loss figures and financial
data, (d) costs, (e) customers, clients, and customer lists (including, without
limitation, credit history, repayment history, financial information and
financial statements), and (f) plans (the "Confidential Information") and shall
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not disclose such Confidential Information to anyone outside of the Employer and
its affiliates except with the Employer's express written consent and except for
Confidential Information which (1) is at the time of receipt or thereafter
becomes publicly known through no wrongful act of the Employee or (2) is
received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement. The Employee further agrees
that he shall not make any statement or disclosure that (a) would be prohibited
by applicable Federal or state laws and regualtions or (b) is intended or
reasonably likely to be detrimental to the Employer or any of its subsidiaries
or affiliates.
(c) Non-Solicitation. During the Restricted Period, the Employee
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shall not, without the Employer's prior written consent, directly or indirectly,
knowingly solicit or encourage to leave the employment of the Employer, any
employee of the Employer or hire any employee who has left the employment of the
Employer after the date of this Agreement within one (1) year of the termination
of such other employee's employment with the Employer.
(d) Records. All memoranda, notes, lists, records and other
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documents (and all copies thereof) made or compiled by the Employee or made
available to the Employee by the Company concerning the Company Business or the
Company shall be the Company's property and shall be delivered to the Company at
any time on request and in all cases, upon the termination of the Employee.
6. Rights and Remedies Upon Breach of Restrictive Covenants. If the
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Employee breaches, or threatens to commit a breach of, any of the provisions of
Section 5 (the "Restrictive Covenants"), the Employer shall have the following
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rights and remedies upon compliance with any necessary prerequisites imposed by
law or this Agreement upon the availability of such remedies. Each of these
rights and remedies shall be independent of the other and severally enforceable.
All of these rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Employer under law or in equity:
(a) The right and remedy to have the Restrictive Covenants
specifically enforced [without posting bond] by any court having equity
jurisdiction, including, without limitation, the right to an entry against the
Employee of restraining orders and injunctions (preliminary, mandatory,
temporary and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable injury to the
Employer and that money damages will not provide an adequate remedy to the
Employer or will not be collectible from the Employee. Such privelege does not
prohibit the Employer from seeking monetary damages.
(b) The right and remedy to require the Employee to account for
and pay over to the Employer all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
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him or his nominee or surrogate as the result of any transactions constituting a
breach of the Restrictive Covenants, and the Employee shall account for and pay
over such Benefits to the Employer.
7. Successors. This Agreement shall be binding on, and inure to the
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benefit of, the Employer and its successors and assigns and any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Employer's assets and business.
8. Re-Assignment. The Employer reserves the right to be able to
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re-assign the Employee to other duties within the Employer or to other
subsidiaries of Employer or its affiliates as it deems fit in its discretion or
as directed by any entity that owns or controls Employer. A re-assignment of
the Employee for the purposes of the Employer pursuant to this Section coupled
with a reduction in compensation without a reduction of time required or
responsibilities may constitute a "Discharge Without Cause' at the election of
Employee.
9. Nonalienation. The interests of the Employee under this Agreement
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are not subject to the claims of his creditors, other than the Employer, and may
not otherwise be voluntarily or involuntarily assigned, alienated or encumbered
except to the Employee's estate upon his death.
10. Severability; Blue Penciling.
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(a) The Employee acknowledges and agrees that (i) he has received,
read and understands this Agreement; (ii) he has had an opportunity to seek
advice of counsel in connection with this Agreement and (iii) the Restrictive
Covenants are reasonable in geographical and temporal scope and in all other
respects. If it is legally determined that any of the provisions of this
Agreement, including, without limitation, any of the Restrictive Covenants, or
any part thereof, is invalid or unenforceable, the remainder of the provisions
of this Agreement shall not thereby be affected and shall be given full effect,
without regard to the invalid portions.
(b) If any court of competent jurisdiction determines that any of
the covenants contained in this Agreement, including, without limitation, any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, the duration or scope of such
provision, as the case may be, shall be reduced so that such provision becomes
enforceable and, in its reduced form, such provision shall then be enforceable
and shall be enforced.
11. Waiver of Breach. The election by Employer to not declare Employee
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in default of this Agreement for a breach hereof does not consitute a waiver of
Employer's right to re-open a matter at a later date should that, or other
probited conduct, occur. The waiver by either the Employer or the Employee of a
breach of any provision of this Agreement shall not operate as or be deemed a
waiver of any subsequent breach by either the Employer or the Employee.
12. Notice. Any notice to be given hereunder by a party hereto shall
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be in writing and shall be deemed to have been given when received or, when
deposited in the U.S. mail, by prepaid certified or registered mail, 2 days
following the deposit inton the US Mail, to the following addresses.
a) to the Employee addressed as follows:
L. Xxxxxxx Xxxxxx, Personal
Care of HTS Holdings
Park 00 Xxxxx Xxxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
b) to the Employer addressed as follows:
Chief Financial Oficer
Hickory Travel Systems, Inc.
Park 00 Xxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
With a copy to:
Chief Executive Officer
American Leisure Holdings, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xx 00000
13. Amendment. a.) This Agreement may be amended or canceled by
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mutual agreement of the parties in writing without the consent of any other
person and no person, other than the parties hereto (and the Employee's estate
upon his death), shall have any rights under or interest in this Agreement or
the subject matter hereof.
b) Employee acknowledges that the Employer shall have the
right to alter or replace this form of Agreement from time to time as it sees
fit. Employer may not alter the financial terms of this Agreement when
converting to a replacement form.
14. Applicable Law. The provisions of this Agreement shall be
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construed in accordance with the internal laws of the State of New Jersey or the
state in which the majority of the services are performed in the event of a
re-location of Employer or Employee.
15. Survival of Provisions. All of the provisions of this Agreement
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shall terminate at the expiration of the Employment Period, except that
Subsections (a) and (c) of Section 5 shall terminate upon the expiration of the
Restricted Period, and Subsections 4(e) and (b) of Section 5 and Section 6 shall
survive indefinitely.
IN WITNESS WHEREOF, the Employee and the Employer have executed this
Employment Agreement as of the day and year first above written.
Witnesses Employee
/s/ L. Xxxxxxx Xxxxxx
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L. Xxxxxxx Xxxxxx
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Employer: Hickory Travel Systems, Inc.
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By:
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Its:
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