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EXHIBIT 10.8
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT made as of the 1st day of December, 1999 (the
"Effective Date") between XXXXXXX X. XXXXX, III (hereinafter referred to as
"Employee") and WT TECHNOLOGIES, INC., a Georgia corporation (hereinafter
referred to as the "Company").
WITNESSETH
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company, and
WHEREAS, the parties intend to supersede all prior correspondence,
letters, and negotiations between them with the terms set forth herein;
NOW, THEREFORE, it is hereby agreed as follows.
1. Employment of Employee. The Company hereby employs Employee for a
period of three (3) years commencing on the Effective Date of this Employment
Contract (the "Initial Term"). Employee agrees to such employment on the terms
and conditions herein set forth and agrees to devote his best efforts to his
duties under this Employment Contract and to perform such duties diligently and
efficiently and in accordance with the directions of the Company.
2. Duties and Residence. The Employee shall be employed as President
and Chief Executive Officer of the Company, reporting directly to the Chairman
of the Board of the Company. As President and Chief Executive Officer, the
Employee shall have overall, day-to-day management responsibilities of the
Company, in addition to any specific related duties and responsibilities as may
be assigned to him by the Chairman of the Board of the Company.
Further, upon approval by the Board of Directors, the Employee shall
become a member of the Board of Directors of the Company, with full voting
privileges, and shall serve in such capacity for the Term of this Employment
Agreement.
During the Term of this Employment Contract, Employee shall be
permitted to retain his primary residence in Charlottesville, Virginia. The
Employee shall be accessible during normal business day working hours, shall be
available to travel at the direction of the Chairman and shall regularly visit
the Company's locations as he deems necessary to properly manage the Company.
The Employee shall devote substantially all of his business time, attention,
and energies to the Company, shall act at all times in the best interests of the
Company, and shall not during the term
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of this Employment Contract be engaged in any other business activity, whether
or not such business is pursued for gain, profit, or other pecuniary advantage.
Notwithstanding the foregoing, this Employment Contract shall not be construed
as preventing Employee from investing his personal assets in any form or manner
that will not require any services by Employee in the operation of the affairs
of the business in which such investments are made; provided, however, that
Employee shall not be permitted to make any investment in any business competing
with the business of the Company. Further, notwithstanding the foregoing
provisions, this Employment Contract shall not be construed as preventing the
Employee from serving as a member of the board of directors of any company as
long as such service has been approved by the Chairman of the Board and such
service does not distract the Employee from his duties hereunder.
3. Compensation and Benefits.
(a) Base Salary. Employee's annual salary during the first twelve (12)
months of the term of this Employment Contract shall be $250,000 (the "Base
Salary"). The Base Salary shall be paid by the Company monthly in arrears or in
accordance with the Company's regular payroll practice. Pursuant to the
Employee's satisfactory performance reviews, the Employee's Base Salary shall
increase by a minimum of five percent (5%) on each anniversary date of the
Effective Date of this Agreement.
(b) Signing Bonus. In recognition of the loss of income the Employee
will suffer from the forfeiture of stock rights with his former employer, the
Company agrees to pay the Employee a one-time signing bonus of $250,000. This
bonus shall be payable in a lump sum cash payment to the Employee (assuming that
the Employee is employed by the Company on that date) on the first payroll
period of the year 2000.
(c) Annual Discretionary Bonus. Employee shall be eligible for an
annual discretionary bonus under the terms and conditions of a short-term
incentive compensation program to be approved and adopted by the Board of
Directors. The Chairman of the Board of the Company shall determine the amount
of the Employee's annual discretionary bonus, if any, based on both the
performance of the Company and the performance of the Employee, provided,
however, that to receive the bonus, Employee must be an "active employee in good
standing" on the date that the bonus is paid. For purposes of this Employment
Contract, an "active employee in good standing" shall mean that Employee (i) has
not terminated employment with the Company for any reason; (ii) is not on
probation of any kind from the Company; (iii) has not given notice under this
Employment Contract pursuant to Section 5 hereof; and (iv) has not received
written notice from the Company pursuant to Section 5 hereof.
(d) Long-Term Incentive Compensation. As of the Effective Date, the
Employee shall receive a nonqualified stock option to purchase 350,000 shares of
the Company's common stock at a discounted exercise price of $5.00 per share,
issued under the Company's 1999 Stock Incentive Plan. This option shall become
exercisable in twenty percent (20%) increments on each of the first four
anniversaries of the Effective Date, with the final increment becoming
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exercisable on date six months after the fourth anniversary of the Effective
Date. In addition, immediately prior to or contemporaneously with an initial
public offering of the Company's common stock, the Employee shall receive an
incentive stock option to purchase 150,000 shares of the Company's common stock
at a per share exercise price equal to the initial public offering price, which
option shall also be issued under the Company's 1999 Stock Incentive Plan. The
options described in this paragraph shall be subject to the terms and conditions
of the Company's 1999 Stock Option Plan. In the event the Company has formally
engaged an underwriter for an initial public offering and then, prior to such
public offering and prior to the grant of the 150,000 share option to the
Employee, substantially all of the stock or assets of the Company is sold, the
Company agrees to treat the Employee as if he held the option for 150,000 shares
of the Company's common stock at the time of such sale. In addition, the Company
agrees to instruct the committee administering the 1999 Stock Incentive Plan to
permit the Employee to transfer, at his election, one or both of the above stock
options to an immediate family member, a trust (with beneficiaries of only
immediate family members), or a family limited partnership (with general
partners and limited partners of only immediate family members).
(e) Employee Benefits. The Company shall provide Employee medical
coverage and other employee benefits substantially similar to, and on the same
basis as, the coverage provided to employees of the Company.
(f) Vacation. The Employee shall be eligible for one week of paid
vacation during the year 1999. Thereafter, the Company agrees that Employee
shall be entitled to five (5) weeks of paid vacation per calendar year;
provided, however, that if this Employment Contract is not in effect for any
full calendar year; Employee shall have only a pro rata portion of such paid
vacation during that calendar year.
(g) Automobile Allowance. The Employee shall receive a monthly
allowance of $500.00 in cash to assist him in obtaining and maintaining an
automobile for his business use. The Employee shall be responsible for any and
all costs and liabilities, including insurance, related to such automobile.
(h) Good Standing. Employee understands and agrees that he must be an
active Employee in good standing of the Company on the date any of the payments
in his Section 2 become due and payable in order to receive such payments.
4. Personnel Policies. Employee shall conduct himself at all times in a
businesslike and professional manner as appropriate for a person in his position
and shall represent the Company in all respects as complies with good business
and ethical practices. In addition, Employee shall be subject to and abide by
the policies and procedures of the Company applicable to personnel of the
Company, as adopted from time to time.
5. Business Expenses. Employee shall be reimbursed monthly by the
Company for ordinary, necessary and reasonable expenses incurred by him in the
performance of his duties for the Company, provided that Employee shall first
document said business expenses in the manner
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generally required by the Company under its policies and procedures, and in any
event, the manner required to meet applicable regulations of the Internal
Revenue Service relating to the deductibility of such expenses.
6. Termination and Renewal.
(a) Termination Due to Death or Discharge for Good Cause. This
Employment Contract shall terminate immediately upon the death of Employee or
upon the discharge of Employee for "good cause". For the purposes of this
Employment Contract, "good cause" means any act of fraud or dishonesty (whether
or not in connection with the Company's Business as hereinafter defined),
competing with the Business of the Company either directly or indirectly, the
breach of any provision of this Employment Contract by Employee, failure to
comply with the decisions of the Company, failure to discharge Employee's duty
of loyalty to the Company, or any other matter constituting "good cause" under
the laws of the State of Georgia. In the event of termination under this
section, any earned but unpaid Base Salary and any other benefits provided
herein shall be paid to Employee up to the effective date of termination of
this Employment Contract for whatever reason, including the death of Employee,
and not thereafter, subject to the specific provisions of subsection 2(c).
(b) Termination Due to Disability. This Employment Contract also shall
terminate immediately upon written notice to Employee if Employee shall at any
time be unable to perform the essential functions of his job hereunder, by
reason of a physical or mental illness or condition, with or without reasonable
accommodation, for a continuous period of three (3) consecutive calendar
months. In the event of termination due to disability under this section, any
earned but unpaid Base Salary and any other benefits provided herein shall be
paid to Employee up to the effective date of termination of this Employment
Contract for whatever reason, including the death of Employee, and not
thereafter, subject to the specific provisions of subsection 2(c).
(c) Termination by the Company Without Cause. If the Company terminates
this Employment Contract without Cause during the Initial Term, the Company
shall pay the Employee any earned but unpaid Base Salary accrued through the
date of termination plus the Base Salary and benefits due the Employee for the
remainder of the Initial Term. In the event the Company terminates the
Employment Contract without Cause after the end of the Initial Term but during
the Term of this Agreement, the Company shall either give the Employee six (6)
months' advance notice of such termination or pay to the Employee an amount
equal to six (6) months' of Base Salary, in addition to any earned but unpaid
Base Salary accrued through the date of termination. In addition to the
foregoing, in the event of a termination of the Employee's employment by the
Company without Cause, the stock options described in Section 3(d) hereof (to
the extent previously granted) shall immediately become exercisable.
(d) Voluntary Termination by the Employee. If the Employee terminates
this Employment Contract within the Initial Term, he shall be liable to the
Company for any and all expenses, costs and other damages of the Company
resulting therefrom. In the event the Employee terminates this Employment
Contract after the Initial Term but during the Term of this
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Agreement, the Employee shall either give the Company six (6) months' advance
notice of such termination or pay to the Company an amount equal to any and all
expenses, costs and other damages of the Company resulting from the lack of
such notice.
(e) Termination Upon Expiration of Term. If not otherwise
terminated hereunder, the Employment Agreement shall terminate at the end of
the Initial Term; however, prior to the expiration of the Initial Term, the
Company and the Employee may elect, in writing, to renew this Agreement for
successive two (2) year terms (which successive terms, if elected, shall
together with the Initial Term constitute the "Term" of the Agreement).
7. Restrictive Covenants.
(a) Covenants to Prior Employers. Upon execution of this
Agreement, the Employee hereby represents that he is not a party to, subject to
or otherwise covered by any agreement or understanding (written or oral) with
a prior employer that would restrict or in any manner limit the performance of
his duties under this Agreement. Employee acknowledges that he has been
instructed by the Company not to reveal or use any trade secret information
from any former employer or reveal or use confidential information in violation
of any agreement with any former employer.
(b) Acknowledgment of Damage Resulting From Employee's Competition
with the Company. Employee understands and acknowledges that the Company and
its related entities are engaged in the business of providing travel
arrangement, reservation, ticketing and related services and products (the
"Business"), and that because of his position with the Company, he has or will
obtain (i) intimate knowledge of the Business and including, but not limited to,
knowledge of "Confidential Information" (as hereinafter defined), and (ii)
knowledge of and relationships with the customers and suppliers used in
connection with the Business of the Company and its related entities. Employee
agrees and acknowledges that such knowledge, access, and relationships are such
that if Employee were to compete with the Company or its related entities
engaged in the Business, by engaging in the Business within the Restricted
Territory (as hereinafter defined) at any time during the two (2) year period
from the date of Employee's termination of employment with the Company, the
Company or its related entities would suffer harm, and the benefits that the
parties bargained for under this Employment Contract would be severely and
irreparably damaged. Further, Employee acknowledges and agrees that this
Employment Contract, and the covenants not to solicit or compete contained
herein, were a fundamental element of the transactions contemplated by this
Employment Contract and that the transactions contemplated therein would not
have been consummated in the absence of this Section 7. Employee agrees that the
covenants contained in this Section 6 are reasonable and necessary to protect
the confidentiality of the Trade Secrets, and other "Confidential Information"
concerning the Company acquired by Employee.
For purposes of this Employment Contract, "Trade Secret" shall be as
defined by applicable state law. The provisions of this Section shall be
interpreted so as to protect those trade secrets and "Confidential
Information," and to secure for the Company the exclusive benefits of the work
performed on behalf of the Company by the Employee under this
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Employment Contract, and not to unreasonably limit his ability to engage in
employment and consulting activities in noncompetitive areas which do not
endanger the Company's legitimate interests expressed in this Employment
Contract. Employee also understands and agrees that the Company can reasonably
amend the definition of the Business or the scope of the Business at any time
upon notice to Employee. For purposes of this Agreement, the term "Restricted
Territory" shall mean the United States of America, which the parties agree is
a reasonable and necessary geographical limitation due to the nature of the
Business.
(c) Covenant Not to Compete with the Company. Employee agrees that,
during the term of his employment under this Employment Contract and for a
period of two (2) years following the termination of his employment under this
Employment Contract for whatever reasons, with or without "good cause" or
otherwise, Employee will not, directly or indirectly, expressly or tacitly, for
himself or on behalf of any entity anywhere within the Restricted Territory,
(i) act as an officer, manager, advisor, executive, controlling shareholder, or
consultant to any business in which his duties at or for such business include
oversight of or actual involvement in providing services which are competitive
with the services or products being provided or which are being produced or
developed by the Company or its related entities, or are under investigation by
the Company or its related entities at the termination of this Employment
Contract, (ii) recruit investors on behalf of an entity which engages in
activities which are competitive with the services or products being provided
or which are being produced or developed by the Company or its related
entities, or are under investigation by the Company or its related entities at
the termination of this Employment Contract, or (iii) become employed by such
an entity in any capacity which would require Employee to carry out, in whole
or in part, the duties Employee has performed for the Company or its related
entities which are competitive with the services or products being provided or
which are being produced or developed by the Company or its related entities,
or are under active investigation by the Company or its related entities at the
termination of this Employment Contract.
(d) Nonsolicitation of Customers. During Employee's employment with
the Company, Employee shall not, directly or indirectly without the Company's
prior written consent, contact or solicit any customers or clients of the
Company of its related entities, or prospective customers with whom the Company
or its related entities have solicited business within the last twelve (12)
months and with whom Employee had material contact ("Customers"), for business
purposes unrelated to furthering the Business of the Company or its related
entities. For a period of two (2) years following termination of Employee's
employment with the Company, Employee shall not, directly or indirectly, (i)
contact, solicit, divert or take away, any Customer for purposes of, or with
respect to, selling a product or service which competes with the Business, or
(ii) take any affirmative action in regard to establishing or continuing a
relationship with a Customer for purposes of making or which directly or
indirectly results in, a sale of a product or service which competes with the
Business.
(e) Nonsolicitation of Employees. Employee shall not at any time
within two (2) years after the termination of his employment, directly or
indirectly, solicit, employ, or endeavor to entice away from the Company or its
related entities any person who is or has been an employee of the Company or
its related entities during the Employee's employment or during the two-year
nonsolicitation period.
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(f) Confidentiality. Employee hereby acknowledges and agrees that
during the Employment Contract, Employee will have access to Trade Secrets and
"Confidential Information" of the Company or its related entities, Employee
also acknowledges that Employee will not disclose or use, directly or
indirectly, any Trade Secrets Employee obtains during the course of Employee's
employment related to the Business for two (2) years from the date of
Employee's termination of employment with the Company. Employee also recognizes
that the services performed by Employee hereunder are special, unique and
extraordinary and that by reason of Employee's employment with the Company,
Employee will receive, develop, or otherwise acquire "Confidential Information"
(as hereinafter defined). Except as required by the pursuit of Employee's
duties with the Company or as it is authorized in writing by the Company,
Employee acknowledges that Employee will not disclose or use, directly or
indirectly, any Confidential Information related to the Business during the
course of Employee's employment and for a period of two (2) years after the
date of Employee's termination under this Employment Contract.
The term "Confidential Information" shall mean and include any
information, data and know-how relating to the Business of the Company or its
related entities that is disclosed to Employee by the Company or known to
Employee as a result of Employee's relationship with the Company and not
generally within public domain (whether constituting a Trade Secret or not),
including without limitation, all administrative procedures, product
development and technical data, sales and/or marketing information, customer
account records, payment plans, training and operations material, memoranda and
manuals, personnel records, pricing information, and financial information
concerning or relating to the Business and/or the Customers, employees and
affairs of the Company or its related entities.
(g) Severability of Agreement Provisions. In the event any or all of
the covenants of this Section 7 are deemed overly broad, the parties hereto
agree that the covenants shall be enforced to the extent that they are not
overly broad.
8. Products, Notes, Records and Software. All memoranda, notes,
records and other documents and computer software made or compiled by Employee
or made available to him during the term of this Employment Contract concerning
the Business of the Company or its related entities, including, without
limitation, all customer data, billing information, service data, and other
technical material of the Company or its related entities, shall be the
Company's property and shall be delivered to the Company within two (2) days of
the termination of this Employment Contract.
9. Ownership of Inventions.
(a) Disclosure to Company. Employee agrees to disclose promptly, in
writing, to the Company's Board of Directors any patentable or unpatentable,
copyrightable or uncopyrightable, idea, invention, work of authorship
(including, but not limited to computer programs, software and documentation),
formula, device, improvement, method, process or discovery (each, an
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"Invention") which relates to the Company's business that Employee conceives,
makes, develops, or works on, in whole or in part, solely or jointly with
others during the term of Employee's employment regardless of whether (i) such
invention was conceived, made, developed or worked on during Employee's regular
hours of employment or his time away from work; (ii) the Invention was made at
the suggestion of the Company; or (iii) the Invention was reduced to drawing,
written description, documentation, models or other tangible form.
(b) Made for Hire Status of the Inventions. It is expressly agreed that
the Inventions created by Employee hereunder shall be considered specially
ordered or commissioned "works made for hire", as such term is defined under the
United States Copyright Act of 1976, as amended (the "Act"), and that such works
and copyright interests therein and thereto shall belong solely and exclusively
to the Company and shall be considered the property of the Company for purposes
of this Agreement. To the extent that such works do not constitute "works made
for hire" under the Act, Employee, in consideration of $1.00 and other good and
valuable consideration, the receipt and adequacy of which hereby are
acknowledged, hereby irrevocably assigns to the Company, its successors and
assigns, without royalty or any other further consideration, (i) all rights,
title and interests in and to the copyrights of the Inventions and all renewals
and extensions of the copyrights that may be secured under existing or future
laws, and (ii) all other rights, title and interests he may have in the
Inventions. Accordingly, the Company will have the right to register, in the
office of the Registrar of the Copyrights of the United States, the Inventions
in the Company's name as the owner and author of such Inventions. Employee
shall, upon request by the Company and at the Company's expense, promptly
execute, acknowledge or deliver any documents or instruments deemed reasonably
necessary by the Company to document, enforce, protect or otherwise perfect the
Company's copyright and other interests in the Inventions.
(c) Assignment to Company. Without limitation the generality or effect
of any other provision of this Agreement, Employee agrees to assign to the
Company without royalty or any other further consideration his entire right,
title and interest in and to any Invention Employee is required to disclose
hereunder.
(d) Records. Employee agrees to make and maintain adequate and current
written records of all Inventions covered by this Agreement. These records shall
be and remain the property of the Company.
(e) Patents and Proprietary Rights. Employee agrees to assist the
Company in obtaining, maintaining, and enforcing patents and other proprietary
rights in connection with any Invention covered this Agreement for which the
Company has or obtains any right, title or interest. Employee further agrees
that his obligations under this subsection shall continue beyond the termination
of the term of this Agreement, but if Employee is called upon to render such
assistance after the termination of the term of this Agreement, but if Employee
is called upon to render such assistance after the termination of the term of
this Agreement, Employee shall be entitled a fair and reasonable rate of
compensation for such assistance. Employee shall, in addition, be entitled to
reimbursement of any out-of-pocket expenses incurred at the request of the
Company relating to such assistance.
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(f) Other Assignments or Contracts. Employee represents that there are no
other contracts to assign inventions that are now in existence between the
Employee and any former employer or other person or entity. Employee further
represent that he has no other employments or undertakings which might restrict
or impair his performance of this Agreement.
10. Applicable Law. This Employment Contract is being executed in the
State of Georgia and shall be construed and enforced in accordance with the laws
of said jurisdiction.
11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Employment Contract by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
12. Successors and Assigns. This Employment Contract shall inure to the
benefit of the Company, its subsidiaries and affiliates, and their respective
successors and assigns. This Employment Contract and benefits hereunder are
personal to Employee and may not be assigned or transferred by Employee.
13. Entire Agreement. This instrument contains the entire agreement of the
parties and supersedes all prior agreements regarding Employee's employment by
the Company, including, but not limited to, oral discussions, letter agreements,
or any other document concerning the possibility of employment with the Company.
This Employment Contract may not be changed orally but only by an agreement in
writing signed by the party against whom enforcement of any waiver, changes,
modification, extension, or discharge is sought.
14. Invalidity of any Provision. It is the intention of the parties hereto
that the provisions of this Employment Agreement shall be enforced to the
fullest extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provision hereof shall not render unenforceable or impair the remainder of this
Employment Agreement which shall be deemed amended to delete or modify, as
necessary, the invalid or unenforceable provisions. The parties further agree to
alter the balance of the Employment Agreement in order to render the same valid
and enforceable.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Contract under seal as of the date first above shown.
EMPLOYEE
/s/ Xxxxxxx X. Xxxxx, III
-----------------------------------
Xxxxxxx X. Xxxxx, III
COMPANY
WT TECHNOLOGIES, INC.
/s/ X. Xxxxxxxxx
-----------------------------------
Title: Chairman
(CORPORATE SEAL)
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