September 4, 2000
Xxxx Xxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Dear Xx. Xxxxx:
Hotel Reservations Network, Inc., a Delaware corporation (the "COMPANY")
and you hereby agree as follows:
1. Effective September 5, 2000 (the "INITIAL TERMINATION DATE"), you
and the Company agreed that your employment as Chief Financial and Strategic
Officer of the Company shall terminate. Accordingly, effective as of such date,
you hereby resign from all positions you then occupy as an officer or director
of the Company and any subsidiary or affiliate of the Company. During the period
from September 6, 2000 through September 15, 2000, or such earlier date as the
Company elects (the "SUBSEQUENT TERMINATION DATE"), the Company agrees to employ
you, and you agree to be employed by the Company, subject to the terms,
conditions and provisions of this Agreement.
(a) Through the Subsequent Termination Date, your current salary of
$180,000 per annum will be paid to you, in accordance with the Company's payroll
practice as in effect from time to time.
(b) Through the Subsequent Termination Date, you will be entitled to
continue to participate in any welfare, health and life insurance and pension
benefit and incentive programs as may be adopted from time to time by the
Company on the same basis as that provided senior executives of the Company.
(c) During the period from the Initial Termination Date through the
Subsequent Termination Date, you agree to assist the Company in its reasonable
requests in connection with the transfer of your prior responsibilities as Chief
Financial and Strategic Officer to other persons.
(d) In partial consideration of your assistance with the transition of
your prior responsibilities as Chief Financial and Strategic Officer to other
persons, your agreement to provide assistance as described in Section 2(b), and
your execution of the Release of Claims provided in Section 8 hereof, the
Company shall pay to you a bonus, payable upon December 31, 2000, in the amount
of $50,000.
(e) During the period from the Initial Termination Date through the
Subsequent Termination Date, the Company shall reimburse you for all
reasonable and necessary expenses incurred by you in performing your duties for
the Company, including, without limitation, your duties under paragraph 1(c)
above, on the same basis as senior executives of the Company and in accordance
with the Company's policies as in effect from time to time.
(f) Upon request, the Company will provide any potential new employers
with positive references and positive letters of recommendation regarding your
employment with the Company. In addition, the Company will provide you with a
letter of recommendation on Company letterhead from the Company CEO on or before
the Subsequent Termination Date.
2. (a) Following the Subsequent Termination Date, and PROVIDED that
you execute and deliver to the Company the Release of Claims in substantially
the form attached to your Employment Agreement dated December 12, 1999, the
Company will pay you during the Assistance Period (as defined below) at your
current salary rate of $180,000 per year in accordance with the Company's
payroll practice as in effect from time to time until the earlier of (x) March
15, 2001 or (y) your employment by a third party (such period being the
"ASSISTANCE PERIOD"). Your rights under COBRA to continue your medical benefits
and welfare benefits under the Company's group plans after the Subsequent
Termination Date will be set forth in a separate letter. Continuation of your
medical benefits pursuant to COBRA during the Assistance Period shall be at the
expense of the Company and shall thereafter be at your own expense.
(b) You agree that during the Assistance Period you will be available
by telephone to assist the Company in its reasonable requests in regard to the
transfer of your prior responsibilities. The Company agrees that such requests
will not interfere with any employment held by you after the Subsequent
Termination Date.
(c) The Company shall provide you with four tourist class round trip
tickets on Delta Airlines or one of its partners from D/FW International
Airport, Dallas Love Field, Chicago X'Xxxx or Chicago Midway to anywhere within
the continental United States. The tickets shall be issued on or before the
Subsequent Termination Date.
3. The Company acknowledges and agrees that your right to purchase 25,000
shares of the Company's Class A common stock, par value $0.01 (the "COMMON
STOCK"), pursuant to options granted to you under the Employment Agreement dated
December 12, 2000, between you and the Company shall be, and hereby is,
immediately and fully vested on the Initial Termination Date, in accordance with
the terms of such Employment Agreement, and subject to the limitations therein.
Except as otherwise stated herein, such options shall continue to be governed in
all respects by the terms and conditions of the Company's 2000 Stock Plan and
the Stock Option Award Agreement entered into by the Company and you (including,
without limitation, the exercise price).
4. The provisions of this Agreement are not intended to, nor shall they
be construed to, require that you mitigate the amount of any payment by the
2
Company to you provided for in this Agreement by seeking, accepting or
performing other employment.
5. The Company shall have the right to deduct from all payments under
this Agreement, whether in cash, stock or other property, amounts required to be
withheld by the Company under applicable tax laws.
6. (a) You shall continue to be bound by the Noncompetition,
Nonsolicitation and Confidentiality Agreement executed in connection with your
Employment Agreement
7. (a) You further agree and covenant that:
(i) unless required by law, you shall not disclose the terms and
conditions of this Agreement to anyone other than your immediate family, tax
advisor, legal counsel or a governmental taxing authority; provided that if you
are asked about the terms of your separation from the Company you may say that
you and the Company have agreed to a fair severance arrangement;
(ii) you shall not make any untruthful and disparaging statements
about the Company or any of its affiliates to any clients, competitors,
suppliers, employees or former employees of the Company or any of its affiliates
or other persons (including but not limited to the press or other media).
(b) The Company shall not (i) disseminate the terms and conditions of
this Agreement to employees of the Company generally or (ii) make any untruthful
and disparaging statements about you to any of the Company's clients,
competitors, suppliers, employees or prospective employees, your prospective
employers or other persons (including but not limited to the press or other
media). The Company shall have the right to issue press releases in connection
with this Agreement. Any description of your separation from the Company in such
press release shall be consistent with the description in Section 1 hereof. The
Company agrees to provide you with a copy of any such press release, to consider
your comments prior to its issuance, and to make any reasonable changes to such
press release as you may request.
8. Prior to the Subsequent Termination Date, you shall execute the
Release of Claims substantially in the form attached as Exhibit A to your
Employment Agreement. For and in consideration of the promises made by you
herein and other good and valuable consideration, the Company hereby releases,
waives and forever discharges you and your heirs, successors and assigns from
any and all actions or claims under any local, state or federal law, for any
type of claim, demand or action whatsoever, arising out of or in connection with
your employment with the Company, other than claims to enforce the terms of this
agreement.
9. This Agreement and all matters or issues related hereto shall be
governed by the laws of the State of Texas applicable to contracts entered into
and performed therein. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any
3
provision of this Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement. The Company hereby consents to, and you
hereby submit your person to, the jurisdiction of the state courts of the State
of Texas sitting in Dallas County, and the United States District Court for the
Northern District of Texas, for the purposes of the enforcement of this
Agreement. All disputes under this Agreement will be determined in the Federal
or State courts within the State of Texas sitting in Dallas County.
10. (a) This Agreement is personal in its nature and the parties shall
not, without the prior written consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; PROVIDED, HOWEVER, the
provisions hereof shall inure to the benefit of, and be binding upon, (i) each
successor of the Company or any of its affiliates, whether by merger,
consolidation or transfer of all or substantially all of its assets and (ii)
your heirs, legatees, executors, administrators and legal representatives.
(b) This Agreement and, as to the Option, the Company's 2000
Stock Option Plan and the Stock Option Award Agreement referenced herein,
contain the entire understanding of the parties hereto relating to the subject
matter herein contained and supersede all prior agreements or understandings
between the parties hereto with respect thereto, including, without limitation,
the Employment Agreement, dated December 12, 1999, between you and the Company,
and can be changed only by a writing signed by both parties hereto. No waiver
shall be effective against either party unless in writing and signed by the
party against whom such waiver shall be enforced.
11. All notices and other communications hereunder shall be deemed to
be sufficient if in writing and delivered in person or by a nationally
recognized courier service or duly sent by facsimile, addressed, if to you, to
the address set forth above; and if to the Company, to Hotel Reservations
Network, Inc., 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attn:
Chief Executive Officer, Facsimile No. 214.265.0974, or such other address as
you or the Company, as the case may be, may have last furnished to the other by
notice in writing. Each notice delivered in person or by overnight courier shall
be deemed given when delivered or when delivery is attempted and refused. Each
notice delivered by facsimile transmission, shall be deemed delivered on the
date on which the sender receives confirmation that such was received by the
addressee if during business hours or on the next business day if not.
12. This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
BY SIGNING THIS AGREEMENT, YOU STATE THAT:
(a) YOU HAVE READ THIS AGREEMENT AND HAVE HAD SUFFICIENT TIME TO
CONSIDER ITS TERMS;
4
(b) YOU UNDERSTAND ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS;
(c) YOU AGREE WITH EVERYTHING IN THIS AGREEMENT;
(d) YOU ARE AWARE OF YOUR RIGHT TO CONSULT WITH AN ATTORNEY
BEFORE SIGNING THIS AGREEMENT AND HAVE BEEN ADVISED OF SUCH RIGHT;
(e) YOU HAVE SIGNED THIS AGREEMENT KNOWINGLY AND VOLUNTARILY; AND
(f) THIS AGREEMENT INCLUDES A RELEASE BY YOU OF ALL KNOWN AND
UNKNOWN CLAIMS.
If the foregoing correctly sets forth our understanding, please sign
one copy of this Agreement and return it to the undersigned, whereupon this
letter shall constitute a binding agreement between us.
Sincerely,
HOTEL RESERVATIONS NETWORK, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxx Xxxxx
--------------------------------------------
Xxxx Xxxxx
5
