10.7
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated July 30, 1999, is
made and entered by and among Vacation Emporium Corporation, a Nevada
corporation, (the "Company"), and Xxxxx X. Xxxxxxx (the "Executive").
RECITALS
A. The Company has entered into a non-binding letter of intent with
Xxxxxxx X. Xxxxx ("Xxxxx") describing the intent of the parties that the Company
acquire from Xxxxx all of the issued and outstanding shares of capital stock of
Wall Street Strategies, Inc., a Delaware Corporation ("WSS"; such acquisition
(or prepared acquisition) referred to herein as the "WSS Acquisition").
B. It is the desire of the Company to be assured of the management
services of the Executive by employing Executive in the capacity and on the
terms as set forth below.
C. The Executive desires to commit himself to serve the Company on
the terms herein provided.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:
1. Employment. The Company shall employ the Executive, and the
Executive shall enter the employ of the Company, for the period commencing
October 1, 1999 (the "Commencement Date") and ending at the close of business on
September 30, 2002, unless sooner terminated in accordance with the provisions
of this Agreement or otherwise (the "Term"). Upon expiration of the Term, except
as expressly set forth herein, this Agreement and all of its provisions shall
terminate and shall cease to have any force or effect.
2. Position and Duties.
(a) During the Term, the Executive agrees to serve as Chief
Operating Officer of the Company and shall have such duties, functions,
responsibilities and authority as may be determined by the board of directors of
the Company.
(b) During the Term, the Executive shall devote all of his
working time, attention, skill and efforts to the business and affairs of the
Company and its subsidiaries (including, upon completion, if any, of the WSS
Acquisition, WSS), shall use his best efforts to promote the success of the
businesses of the Company and its subsidiaries and shall not enter the employ of
or serve as a consultant to, or in any way perform any services (with or without
compensation) for, any other person, firm, corporation, partnership, limited
liability company, group, association or organization or other entity where such
conduct would be
inconsistent with, in competition with, or prevent, hinder or restrict the
Executive from carrying out, his duties to the Company.
3. Compensation and Related Matters.
(a) Annual Base Salary. During the Term, the Executive shall
receive a salary of $175,000 per annum (the "Annual Base Salary"). The Annual
Base Salary will be payable in accordance with the Company's policies in effect
from time to time, but, in no event, will such Annual Base Salary be payable
less frequently than in monthly installments.
(b) Expenses. The Company shall reimburse the Executive for
reasonable business expenses incurred by the Executive in the performance of his
duties under this Agreement upon evidence of payment by Executive of such
expenses and otherwise in accordance with Company policies then in effect, as
such policies may change from time to time.
(c) Benefits. During the Term, the Executive shall be entitled
to participate in or receive benefits under any employee health, life and
disability plan generally made available by the Company to its salaried
employees and to the extent applicable such other benefits made available to its
executive employees, as they may change from time to time, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plan or arrangement.
(d) Incentive Bonus. Commencing with his performance in the
current fiscal year, the Executive shall be entitled to earn an annual incentive
bonus of up to 40% of the Annual Base Salary, pro rated for a short fiscal year,
if applicable, based upon annual sales goals for such fiscal year as approved by
the board of directors of the Company. The board of directors will determine the
sales goals for the current fiscal year within 60 days after the Commencement
Date and, with respect to subsequent fiscal years during the Term will determine
sales goals for such years within 60 days after the start of such years. The
Company will determine whether, and will provide Executive with written notice
as to whether the sales goals for a given fiscal year have been achieved within
60 days after the end of such fiscal year and, if and to the extent the
applicable sales goals have been achieved in respect of such fiscal year, will
pay the applicable incentive bonus within 10 business days after the date of
such written notice.
(e) Stock Options. Simultaneously herewith, the Company shall
grant to Executive options under the Company's 1996 Compensatory Stock Option
Plan to acquire 526,923 shares of Company common stock (the "Options"). The
Options shall become vested in nine consecutive equal quarter annual
installments commencing on the nine month anniversary of the Commencement Date
provided on each such vesting date the Executive is then employed by the
Company.
(f) Office and Supplies. The Executive shall be provided an
office at WSS' principal office, office furniture, secretarial support and
office supplies provisions commensurate with his office.
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(g) Vacation. The Executive shall be entitled to twenty
business days of annual vacation to be used each year (and not carried over) at
times mutually convenient to the Company and Executive.
(h) Relocation Allowance. The Company will reimburse Executive
for actual relocation expenses up to a maximum of $10,000, as reasonably
substantiated by Executive. Reimbursable relocation expenses shall include,
without limitation, charges by moving company, rental security deposit and
rental agent commissions, as applicable.
(i) Deductions and Withholdings. All amounts payable or which
become payable hereunder shall be subject to all deductions and withholding
required by law.
4. Termination. This Agreement may be terminated under the following
circumstances:
(a) Death. The Executive's employment hereunder shall
terminate upon his death. In the case of the Executive's death, the Company
shall pay to the Executive's beneficiaries or estate, as appropriate, promptly
after his death, the then current accrued but unpaid Annual Base Salary,
incentive bonus (provided such incentive bonus and the sales goals on which such
bonus are based shall be pro rated for the portion of the fiscal year during
which the Executive was employed and, provided further, no such bonus shall be
payable in respect of a fiscal year in which Executive has completed less than
six (6) months of service ) and all expenses for which he is entitled to be
reimbursed pursuant to Section 3 through the date of his termination. The
Executive and his beneficiaries and estate, as appropriate, shall be entitled to
no other compensation under this Agreement following, or as a result of, a
termination under these circumstances.
(b) Disability.
(i) If a Disability (as defined below) of the Executive
occurs during the Term, the Company may give the Executive written notice of its
intention to terminate his employment. In such event, the Executive's employment
with the Company shall terminate on the effective date specified in such notice.
In the case of a termination as a result of a Disability, the Company shall pay
to the Executive promptly after his termination the then current accrued but
unpaid Annual Base Salary, incentive bonus (provided such incentive bonus and
the sales goals on which such bonus are based shall be pro rated for the portion
of the fiscal year during which the Executive was employed and, provided
further, no such bonus shall be payable in respect of a fiscal year in which
Executive has completed less than six (6) months of service ), and all expenses
for which he is entitled to be reimbursed pursuant to Section 3 through the date
of his termination. The Executive and his beneficiaries and estate, as
appropriate, shall be entitled to no other compensation under this Agreement
following, or as a result of, a termination under these circumstances.
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(ii) For the purpose of this subsection 4(b),
"Disability" shall mean the Executive's inability to perform his normal duties
as Chief Operating Officer of the Company, with or without reasonable
accommodation, due to a mental or physical impairment for a period of at least
three (3) consecutive months or four (4) months in the aggregate in any twelve
(12) month period. The Executive agrees to submit to a reasonable number of
examinations by a medical doctor selected by the Company and reasonably
acceptable to the Executive (or his legal representative) making the
determination of disability under this Section 4(b)(ii), and the Executive
hereby authorizes the disclosure and release to the Company of such
determination and all supporting medical records.
(c) Termination by the Company for Cause.
(i) The Company may terminate the Executive's employment
hereunder for Cause (as defined below) at any time upon written notice to the
Executive. In such event, the Executive's employment shall terminate on the
effective date specified in such notice. In the case of the Executive's
termination for Cause, the Company shall promptly pay to the Executive his then
current accrued but unpaid Annual Base Salary and all expenses for which he is
entitled to be reimbursed pursuant to Section 3 through the date of his
termination. The Executive and his beneficiaries shall be entitled to no other
compensation under this Agreement following, or as a result of, a termination
under these circumstances.
(ii) For purposes of this Agreement, the Company shall
have "Cause" to terminate Executive's employment hereunder in the event of (A)
the Executive personally receiving a material benefit in money, property or
services from the Company or its subsidiaries or from another person dealing
with the Company or its subsidiaries in violation of applicable law or material
Company policy previously made known to the Executive, (B) an act of fraud,
conversion, misappropriation or embezzlement by the Executive or his conviction
of or entering a guilty plea or plea of no contest with respect to, a felony,
the equivalent thereof, or any other crime with respect to which imprisonment is
a possible punishment, (C) any other breach by the Executive of this Agreement
in any material respect, which is not cured by the Executive within thirty days
after receipt of written notice from the Company, (D) a knowing violation by
Executive of a law relating to the Company's business, (E) a knowing violation
by Executive of a written material Company policy or (F) issuance of any order,
judgment or decree permanently or preliminarily enjoining or otherwise limiting
Executive (i) from engaging in the business of an investment adviser,
underwriter, broker or dealer in securities or (ii) engaging in any type of
business activity in connection with the purchase or sale of any security or
commodity in connection with any violation of federal or state securities or
commodities laws by Executive.
(d) Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder without Cause upon written notice
to the Executive. In such event, the Executive's employment shall terminate on
the effective date specified in such notice. In the event the Executive's
employment hereunder is terminated by the Company without Cause, the Company
shall pay to the Executive his then current accrued but unpaid Annual Base
Salary and expenses to which he is entitled pursuant to Section 3 through the
date of his termination. In addition, the Executive shall receive
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continuation of his Annual Base Salary, benefits and incentive bonus as
specified in paragraph 3 above, through the balance of the Term. The Executive
and his beneficiaries shall be entitled to no other compensation under this
Agreement following, or as a result of, a termination under these circumstances.
(e) Mutual Agreement. The Executive's employment may be
terminated by written mutual agreement of the Executive and the Company at any
time.
5. Confidential and Proprietary Information.
(a) The parties agree and acknowledge that during the course
of the Executive's employment, the Executive will be given and will have access
to and be exposed to "Confidential Information" (as defined below) in written,
oral, electronic and other form regarding the Company and its business units,
divisions and subsidiaries and business, equipment, products and employees. For
purposes of this Agreement, "Confidential Information" means any information
relating to the business or affairs of the Company or its subsidiaries
(including, following completion, if any, of the WSS Acquisition, WSS),
including but not limited to information relating to financial statements,
business plans, forecasts, purchasing plans, customer and subscriber identities,
potential customers and subscribers, employees, suppliers, partners, allies,
equipment, programs, strategies and information, analyses, profit margins or
other proprietary information used by the Company or its subsidiaries in
connection with the conduct of their respective and collective businesses. The
Executive agrees to use such information only for purposes of carrying out his
duties for the Company and not for any other purpose, including, without
limitation, not in any way or for any purpose detrimental to the Company or its
subsidiaries. Confidential Information hereunder does not include any
information which (i) is already in or subsequently enters the public domain,
other than as a result of any direct or indirect action or inaction by the
Executive, (ii) is already in the Executive's possession and was received by
Executive from a source other than the Company provided that such information is
not known to the Executive to be subject to another confidentiality agreement or
other obligation of secrecy or confidentiality (whether pursuant to contract,
legal or fiduciary obligation or duty or otherwise) to the Company or any other
person or entity, or (iii) becomes available to the Executive on a
nonconfidential basis from a source other than the Company, provided that such
source is not known by the Executive to be subject to a confidentiality (whether
pursuant to a contract, legal or fiduciary obligation or duty or otherwise) to
the Company or any other person or entity.
(b) In recognition of the Company's need to protect its
legitimate business interests and in consideration of the rights granted to
Executive in this Agreement, Executive hereby agrees that with regard to any
Confidential Information, at all times during the term of Executive's employment
with the Company (whether pursuant to this Agreement, on an "at will" basis or
otherwise) and for a period of three (3) years thereafter Executive shall regard
and treat all such information as strictly confidential and wholly owned by the
Company and shall not, for any reason or in any fashion, either directly or
indirectly, use or reproduce any such Confidential Information or disclose,
transfer, assign, disseminate or otherwise communicate any such Confidential
Information to any person or entity for any
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purpose other than in accordance with this Agreement or pursuant to the
instructions of a duly authorized representative of the Company.
(c) All physical property and all notes, memoranda, files,
records, writings, documents and other materials of any and every nature,
written or electronic, which the Executive shall prepare, use or come into
contact with in the course of his employment with the Company and which relate
to or are useful in any manner to the business now or hereafter conducted by the
Company and its subsidiaries are and shall remain the sole and exclusive
property of the Company. The Executive shall not remove from the Company's or
its subsidiaries' premises any such physical property, the original or any
reproduction of any such materials or the information contained therein, except
and solely for the purposes of carrying out his duties to the Company and all
such property, materials and information in his possession or under his custody
or control upon the termination of his employment with the Company shall be
immediately turned over to the Company.
(d) The provision of this Section 5 shall survive any
termination of this Agreement or the Executive's employment with the Company.
6. No Solicitation of Customers or Executives.
(a) Executive will not, directly or indirectly during the Term
of and for a period of one (1) year following the termination of this Agreement:
(i) persuade or attempt to persuade any person or entity
which is or was a customer, client or supplier of the Company during the term of
this Agreement or on the date of which Executive's employment is terminated to
cease doing business with the Company, or to reduce the amount of business it
does with the Company;
(ii) persuade or attempt to persuade any employee of the
Company, or any individual who was an employee of the Company during the one (1)
year period prior to the termination of this Employment Agreement, to leave the
Company's employ, or to become employed by any person or entity other than the
Company; or
(iii) engage in or market any business competitive with
the business of the Company, enter the employ of or render any services to, any
person engaged in such activities, or become interested in any such person in
any capacity, including without limitation, as an individual, partner,
shareholder, investor, officer, director, principal, agent, trustee or
consultant; provided, however, he may own, directly or indirectly, solely as an
investment, securities of any person traded on any national securities exchange
if he is not a controlling person of, or a member of a group which control such
person and does not, directly or indirectly, own 5% or more of any class of
securities of such person.
(b) The provisions of this Section 6 shall survive any
termination of this Agreement or the Executive's employment with the Company.
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7. Injunctive Relief. The Executive acknowledges that (a) the
provisions of Sections 5 and 6 are valid and enforceable and are reasonable and
necessary to protect the legitimate interests of the Company and its business
and (b) any violation of Sections 5 or 6 will result in irreparable injury to
the Company, the exact amount of which will be difficult to ascertain, and that
the remedies at law for any such violation would not be reasonable or adequate
compensation to the Company for such a violation. Accordingly, the Executive
agrees that if the Executive violates the provisions of Sections 5 or 6, in
addition to any other remedy which may be available at law or in equity, the
Company will be entitled to specific performance and injunctive relief, without
the necessity of posting a bond or other security, and without the necessity of
proving actual damages.
8. Assignment; Successors and Assigns. The Executive agrees that he
will not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, any rights or obligations under this Agreement,
nor shall the Executive's rights be subject to encumbrance of the claims of
creditors. Any purported assignment, transfer, delegation, disposition or
encumbrance in violation of this Section 8 shall be null and void and of no
force or effect. Nothing in this Agreement shall prevent the consolidation or
merger of the Company with or into any other entity, or the sale by the Company
of all or any portion of its respective properties or assets, or the assignment
by the Company of this Agreement and the performance of its obligations
hereunder to any subsidiary of the Company, (including, upon completion, if any,
of the WSS Acquisition, WSS), or any successor in interest or any other
affiliated entity, and the Executive hereby consents to any and all such
assignments. Subject to the foregoing, this Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any
person or entity other than those enumerated above.
9. Choice of Law; Venue. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York. The Executive
irrevocably consents to the service of any and all process in any action or
proceeding arising out of or relating to this Agreement by the mailing of copies
of such process to such Executive at the address specified in Section 12. The
parties hereto irrevocably submit to the jurisdiction of the United States
District Court for the Southern District of New York or any state court located
in New York County, State of New York over any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby. Each
party hereby irrevocably agrees that all claims in respect of such dispute or
proceeding may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum in
connection therewith.
10. Severability of Provisions. In the event that any provision or
any portion thereof should ever be adjudicated by a court of competent
jurisdiction to exceed the limitations permitted by applicable law, as
determined by such court in such action, then such
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provisions will be deemed reformed to the maximum limitations permitted by
applicable law, the parties hereby acknowledging their desire that in such event
such action be taken. In addition to the above, the provisions of this Agreement
are severable, and the invalidity or unenforceability of any provision or
provisions of this Agreement or portions thereof will not affect the validity or
enforceability of any other provision, or portion of this Agreement, which will
remain in full force and effect as if executed with the unenforceable or invalid
provision or portion thereof eliminated. Notwithstanding the foregoing, the
parties hereto affirmatively represent and acknowledge that this Agreement and
each of its provisions is enforceable in accordance with its terms, and
expressly agree not to challenge the enforceability of the Agreement or any of
its provisions in the future. The parties hereto are expressly relying upon this
representation and acknowledgment in determining to enter into this Agreement.
11. Warranty. As an inducement to the Company to enter into this
Agreement, the Executive represents and warrant to the Company that he is not a
party to any other agreement or obligation for personal services, and that there
exists no impediment or restraint, contractual or otherwise, on his power, right
or ability to enter into this Agreement and to perform his duties and
obligations hereunder.
12. Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method upon receipt of telephonic or electronic confirmation; the day after it
is sent, if sent for next day delivery to a domestic address by recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case notice
shall be sent to:
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If to the Executive, addressed to:
Xxxxx X. Xxxxxxx
000 Xxxxx Xxxx Xxxxx Xxxxx
Xxx. 000
Xxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxx Xxxx, Esq.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0 Xxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Company, addressed to:
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn:Xxxxxx X. Xxxxx
or to such other place and with such other copies as either party may designate
as to itself or himself by written notice to the others.
13. Cumulative Remedies. All rights and remedies of either party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other right or remedies.
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
15. Entire Agreement; Amendments and Waivers. This Agreement is
intended by the parties to be, and is, the complete, exclusive and final
expression of their agreement with respect to the subject matter hereof.
Moreover, this Agreement supersedes, and may not be contradicted by, or modified
or supplemented by, evidence of any prior or contemporaneous agreement as to the
subject matter hereof, and no extrinsic evidence whatsoever may be introduced in
any judicial, administrative or other legal proceeding to vary the terms of this
Agreement. This Agreement supersedes any and all severance agreements that
Executive has or had with the Company, and any and all such severance agreement
shall be null
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and void, and of no force or effect. No amendment, supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by each party to be bound thereto. No waiver of any of the provisions of
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed or be construed as a further, continuing or subsequent waiver of
any such provision or as a waiver of any other provision of this Agreement. No
failure to exercise and no delay in exercising any right, remedy or power
hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.
16. Representation of Counsel; Mutual Negotiation. Each party has
had the opportunity to be represented by counsel of its choice in negotiating
this Agreement. This Agreement shall therefore be deemed to have been negotiated
and prepared at the joint request, direction and construction of the parties, at
arm's-length, with the advice and participation of counsel, and shall be
interpreted in accordance with its terms without favor to any party.
17. Consultancy. Between the date hereof and the Commencement Date
(the "Consulting Period"), Executive agrees to provide the Company with general
business consulting services as reasonably requested by the Company, including
without limitation consulting services in connection with the proposed
acquisition of WSS, the integration of WSS' business into the Company, the
preparation and execution of a business plan for the Company and WSS,
acquisitions, financing, strategic alliances and partnerships and other matters
relating to the business and proposed business of the Company and WSS. Executive
shall not be required to provide such consulting services in any particular
location and further shall not be required to provide the Company with more than
20 hours of consulting services per month during the Consulting Period. The
Company shall reimburse the Executive for all reasonable business expenses
incurred by the Executive in the performance of such consulting duties during
the Consulting Period upon evidence of payment by the Executive of such expenses
and otherwise in accordance with Company policies then in effect, as such
policies may change from time to time.
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18. Termination Prior to Commencement Date. If the WSS Acquisition
is not completed by September 30, 1999, either party hereto may terminate this
Agreement upon written notice to the other, and in such event, this Agreement
shall be of no further force and effect and neither party shall have any
liability to the other under or in respect of this Agreement, other than as
specified in Section 17 hereof which section shall survive such termination.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
EMPLOYEE
/s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx
VACATION EMPORIUM CORPORATION
By: /s/ Xxx Xxxx
----------------------------
Name: Xxx Xxxx
Title: Chairman
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