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EXHIBIT 10.3
TOURJETS AIRLINE CORPORATION
CONSULTING & EMPLOYMENT AGREEMENT
THIS CONSULTING AND EMPLOYMENT AGREEMENT is between Tourjets Airline
Corporation a Florida corporation ("Tourjets" or the "Company"), its successors
and assigns and Xxxxx Xxxxxx "Xxxxxx").
WHEREAS, Xxxxxx has agreed to serve as Tourjets Chairman, Chief
Executive Officer and President as of June 01, 2000.
NOW, THEREFORE, Tourjets and Xxxxxx, in consideration of the foregoing
and other mutual covenants and promises contained herein, the sufficiency of
which are hereby acknowledged, hereby agree as follows:
1. ACCEPTANCE OF EMPLOYMENT.
Subject to the terms and conditions set forth below, Tourjets agrees to
employ Xxxxxx and Xxxxxx accepts such employment.
2. TERM.
The period of employment shall be from June 01, 2000, through December
31, 2006, unless further extended or sooner terminated as hereinafter set forth.
In the absence of notice, this Agreement shall be renewed on the same terms and
conditions for five years from the date of expiration. If Xxxxxx wishes to renew
this Agreement on different terms, Xxxxxx shall give written notice to the
Company 180 days before the expiration of this agreement. If the Company does
not wish to renew this Agreement at its expiration, or wishes to renew on
different terms, the Company by the majority of its directors shall give written
notice to Xxxxxx no later than 180 days before expiration of the current
contract.
3. POSITION AND DUTIES.
Xxxxxx shall continue to serve as Chairman, Chief Executive Officer and
President for the duration of this contract. Xxxxxx' responsibilities may not be
modified in a way that would be inconsistent with the status of Chief Executive
Officer without the consent of Xxxxxx. Following a Change of Control (as
hereinafter defined), Xxxxxx' responsibilities may not be changed without mutual
agreement. Xxxxxx agrees to render his services to the best of his abilities and
will comply with all policies, rules and regulations of the company and will
advance and promote to the best of his ability the business and welfare of the
Company. Xxxxxx shall devote his working time, attention, knowledge and skills
to the business and interests of Tourjets. Xxxxxx agrees to accept assignments
on behalf of Tourjets or affiliated companies commensurate with his
responsibilities hereunder.
4. COMPENSATION AND RELATED MATTERS.
(a) FIRST YEAR: Xxxxxx shall receive a consulting fee of $180,000 per
annum (paid monthly) until such time as Tourjets will receive FAA Part 121
Operating Authority. Tourjets may defer and aggregate the amount owed to Xxxxxx
at no interest expense until such time as Tourjets has receives its initial
funding. Tourjets may cancel the consulting portion of this agreement prior to
receiving FAA Part 121 Operating Authority by giving Xxxxxx a ten (10) day
written notice. After Tourjets receives FAA Part 121 Operating Authority Xxxxxx
shall receive a one-time payment of $371,250 within 10 days. Subsequently,
Xxxxxx will become a full time employee of Tourjets and receive a minimum salary
of $225,000 per annum payable in accordance with the payroll procedures for
Tourjets salaried employees in effect during the term of this Agreement.
(b) SECOND, THIRD, FOURTH and FIFTH YEAR BASE SALARY. Xxxxxx shall receive a
minimum salary of no less than the previous year base salary plus a minimum
increase of 10% over the prior year. Further, the company's compensation
committee shall recommend and approve an additional increase of the base salary
based on its review each year at least 30 days before the anniversary date of
his employment.
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(c) ELIGIBILITY FOR BONUS. Xxxxxx shall be eligible to receive an
annual bonus pursuant to Tourjets management incentive compensation plan and
successor plans, as the Board of Directors may adopt form time to time.
(d) STOCK OPTIONS. Xxxxxx will be eligible to participate and purchase
Tourjets Common Stock, pursuant to a Stock Option Plan (the "Plan") if and when
available. In the event of a Change in Control as defined below, all Options
shall be immediately exercisable.
(e) BUSINESS EXPENSES. Xxxxxx shall be entitled to reimbursement of
reasonable business related expenses from time to time consistent with Tourjets
policies, including, without limitation, submitting in a timely manner
appropriate documentation of such expenses.
(f) FRINGE BENEFITS. Xxxxxx shall be entitled to participate in all
employee benefit plans made available from time to time to all executives of
Tourjets in accordance with the terms of such plans. In the event this Agreement
is terminated by either party for any reason other than death or for cause,
Xxxxxx may participate in Tourjets health and other benefit programs for a
period of two years from the date of Xxxxxx' termination, or until Xxxxxx
obtains comparable coverage, whichever is earlier.
(g) PERSONNEL POLICIES, CONDITIONS AND BENEFITS. Except as otherwise
provided herein, Xxxxxx' employment shall be subject to the personnel policies
and benefits plans which apply generally to Tourjets employees as the same may
be interpreted, adopted, revised or deleted from time to time, during the term
of this Agreement, by Tourjets in its sole discretion. While this Agreement is
in effect, Xxxxxx shall accrue paid vacation at the rate of one month per year.
(h) INDEMNIFICATION; Tourjets shall provide (or cause to be provided)
to Xxxxxx indemnification against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlements in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of Tourjets) by reason of his being or having been an officer, director or
employee of Tourjets or any affiliated entity, advance expenses (including
attorneys' fees) incurred by Xxxxxx in defending any such civil, criminal,
administrative or investigative action, suit or proceeding and maintain
directors' and officers' liability insurance coverage (including coverage for
securities-related claims) upon substantially the same terms and conditions as
set forth in the Indemnification Agreement between Xxxxxx and Tourjets Airline
Corporation (the "Indemnity Agreement").
5. TERMINATION OF EMPLOYMENT.
a) DEATH. Xxxxxx' employment hereunder shall terminate upon his death,
in which event Tourjets shall pay all outstanding obligation and have no further
obligation to Xxxxxx or his estate with respect to compensation, other than the
disposition of life insurance and related benefits and accrued and unpaid base
salary and incentive compensation, if any, for periods prior to the date of
termination pursuant to the terms of the respective employee benefits and
incentive compensation plans then in effect.
b) BY TOURJETS FOR DISABILITY. If Xxxxxx is unable, or fails, to
perform services pursuant to this agreement through illness or physical or
mental disability and such failure or disability shall exist for twelve (12)
consecutive months, then Tourjets may terminate this Agreement upon written
notice to Xxxxxx, in which event Tourjets shall pay all outstanding obligation
as listed in under Section 4.(a) & (b) and have no obligation to Xxxxxx with
respect to compensation. If Xxxxxx becomes entitled to Social Security benefits
payable on account of disability, he will be deemed conclusively to be disabled
for purposes of this Agreement.
c) BY TOURJETS FOR CAUSE. (i) Except under the circumstances set forth
in 5(c)(ii) below, the unanimous vote of the Board of Directors may terminate
this Agreement for Cause. "Cause" shall be defined as (A) sustained performance
deficiencies which are communicated to Xxxxxx in written performance appraisals
and/or other written communications (including, but not limited to memos and/or
letters) by the Board of Directors, (B) gross misconduct, including significant
acts or omissions constituting dishonesty, intentional wrongdoing and
malfeasance, directly relating to the business of Tourjets, (C) commission of a
felony or any crime involving fraud or dishonesty, or (D) a material breach of
this Agreement. (ii) In the event of a Change of Control, as defined below,
Xxxxxx may only be terminated for Cause pursuant to a resolution duly adopted by
the affirmative vote of a majority of the entire membership of the Board, at a
meeting of the Board finding that, in the good faith opinion of the Board,
Xxxxxx was guilty of conduct set forth in 5(c)(i)(A), or (B), provided, however,
that Xxxxxx may not be terminated for Cause hereunder unless: (1) Xxxxxx
receives prior written notice of Tourjets intention to terminate this Agreement
for Cause and the specific reasons therefore; and (2) Xxxxxx has an opportunity
to be heard by Tourjets Board and be given, if the acts are correctable, a
reasonable opportunity to correct the act or acts (or non-action) giving rise to
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such written notice. If the Board, by resolution duly adopted by the affirmative
vote of a majority of the entire membership of the Board, finds that Xxxxxx
fails to make such correction after reasonable opportunity to do so, this
Agreement may be terminated for Cause in which event Tourjets shall pay all
outstanding obligation as listed in 4. and have no obligation to Xxxxxx with
respect to compensation under Section 4(a)&(b) of this Agreement.
d) BY TOURJETS FOR OTHER THAN CAUSE. In the event the Board terminates
this Agreement for reasons other than Cause or Disability as defined in
sub-paragraph (b), (c) above, Tourjets will pay to Xxxxxx within ten (10) days
of notice of termination (or, in the case of incentive bonus compensation, if
any, within ten (10) days of determination of amounts payable under the
applicable bonus plan) the greater of one years base salary, or the undiscounted
remainder under this contract, in each case including deferred salary and/or
bonus compensation, if any, payable under this Agreement. In addition, all
granted but unvested Options shall become immediately registered and
exercisable. In the event that any payment to Xxxxxx under this paragraph is
subject to any federal or state excise tax and withholding tax, Tourjets shall
pay to Xxxxxx an additional amount equal to the excise tax and withholding tax
imposed including additional federal and state income and excise taxes as a
result of the payments under this paragraph, and such payment will be made when
the excise tax and income taxes are due; provided, however, that Xxxxxx agrees
to assist Tourjets by using his best efforts to structure matters so that any
payment to Xxxxxx under this paragraph is not subject to any federal or state
excise tax. Whether an excise tax is payable, and the amount of the excise tax
and additional income taxes payable, shall be determined by Xxxxxx'x accountant
and Tourjets shall hold Xxxxxx harmless from any and all taxes, penalties, and
interest that may become due as a result of the failure to properly determine
that an excise tax is payable or the correct amount of the excise tax and
additional income taxes, together with all legal and accounting fees reasonably
incurred by Xxxxxx in connection with any dispute with any taxing authority with
respect to such determinations and/or payments.
e) BY XXXXXX FOR GOOD REASON. Xxxxxx may terminate his employment
hereunder (for purposes of this Agreement "Good Reason") after giving at least
30 days notice in the event that, without Xxxxxx' consent, (i) Tourjets
relocates its general and administrative offices or Xxxxxx' place of employment
to an area other than the Miami/Ft. Lauderdale Standard Metropolitan Statistical
Area, (ii) he is assigned any duties inconsistent with Section 3 hereof, (iii)
Tourjets reduces his annual base salary as in effect on the date hereof or as
the same may be increased from time to time, except as provided in Section
4(a),(b) above; (iv) Tourjets fails, without Xxxxxx' consent, to pay Xxxxxx any
portion of his current compensation, or to pay him any portion of an installment
of deferred compensation under any deferred compensation program of Tourjets,
within seven (7) days of the date such compensation is due; (v) Tourjets fails
to continue in effect any compensation plan in which Xxxxxx participates which
is material to Xxxxxx' total compensation, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or to continue Xxxxxx' participation therein (or in such
substitute or alternative Plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of Xxxxxx'
participation relative to other participants; (vi) Tourjets fails to continue to
provide Xxxxxx with benefits substantially similar to those enjoyed by Xxxxxx
under any of Tourjets pension, life insurance, medical, health and accident, or
disability plans in which Xxxxxx was participating, Tourjets takes any action
which would directly or indirectly materially reduce any of such benefits or
deprive Xxxxxx of any material fringe benefit enjoyed by Xxxxxx; (vii) Tourjets
terminates, or proposes to terminate, Xxxxxx' employment hereunder contrary to
the requirements of Section 5(c) hereof (for purposes of this Agreement, no such
termination or purported termination shall be effective); or (viii) the Board
approves the liquidation or dissolution of Tourjets prior to the end of this
Agreement. In the event that Xxxxxx decides to terminate this Agreement and his
employment with Tourjets or any successor in interest in accordance with the
provisions of this Section 5(e), Tourjets shall have the same obligations as set
forth in Section 5(d) hereof. Any other payments due or actions required under
this paragraph shall be made as lump sums or taken within 10 days of termination
of the Agreement.
f) BY XXXXXX FOR OTHER THAN GOOD REASON. Notwithstanding the above,
Xxxxxx may upon giving reasonable notice, not to be less than 30 days, terminate
this Agreement without further obligation on the part of Xxxxxx or Tourjets.
g) CHANGES OF CONTROL. For purposes of this Agreement, a "Change of
Control" includes the occurrence of any one or more of the following events: (i)
any Person, other than the Company, is or becomes the Beneficial Owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), directly or indirectly, of securities of Tourjets representing
more than 50% of the combined voting power of Tourjets then outstanding
securities; or (ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board of Tourjets and any new
director (other than a director designated by a Person who has entered into an
agreement with Tourjets to effect a transaction described in clause (i), (iii)
or (iv) or this Section 5 (g)) whose election by the Board of
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Tourjets or nomination for election by the stockholders of Tourjets was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or (iii) the shareholders of Tourjets approve a
merger or consolidation of Tourjets with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of Tourjets
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or being converted into voting securities of the surviving
entity), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of Tourjets or any of its
affiliates, at least 50% of the combined voting power of the voting securities
of Tourjets or such surviving entity outstanding immediately after such merger
or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of Tourjets (or similar transaction) in which no Person
acquires more than 50% of the combined voting power of Tourjets then outstanding
securities; or (iv) the shareholders of Tourjets approve a plan of complete
liquidation of Tourjets or an agreement for the sale or disposition by Tourjets
of all or substantially all of Tourjets assets.
h) "PERSON" DEFINED. For purposes of this Section, "Person" shall have
the meaning given in Section (3)(a)(9) of the Exchange Act, as modified and used
in Sections 13(d) and 14(d) thereof; however, a Person shall not include (i)
Tourjets Airline Corporation or any of their subsidiaries or affiliates; (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
Tourjets or any of their subsidiaries.
i) NOTICE OF TERMINATION. Termination of this Agreement by Tourjets or
termination of this Agreement by Xxxxxx shall be communicated by written notice
to the other party hereto; specifically indicating the termination provision
relied upon.
j) COMPANY PROPERTY. At the termination of Xxxxxx' employment, whether
voluntary or involuntary, Xxxxxx shall be able to retain all company property,
including without limitation all electronic and paper files and documents and
all copies thereof.
6. CONFIDENTIALITY.
(a) Xxxxxx recognizes and acknowledges that he will acquire during his
employment with Tourjets information that is confidential to Tourjets and that
represents valuable, special and unique assets of Tourjets ("Confidential
Information"). Such Confidential Information (whether or not reduced to tangible
form) includes, but is not limited to: trade secrets; financing documents and
information; financial data; new product information; copyrights; information
relating to schedules and locations; cost and pricing information; performance
features; business techniques; business methods; business and marketing plans or
strategies; business dealings and arrangements; business objectives; customer
information; sales information; acquisition, merger or business development
plans or strategies; research and development projects; legal documents and
information; personnel information; and any and all other information concerning
Tourjets business and business practices that is not generally known or made
available to the public or to Tourjets competitors or is not readily
ascertainable by other means, which, if misused or disclosed, could adversely
affect the business of Tourjets. Xxxxxx agrees that he will not, during
employment with Tourjets and for a period of six months following termination of
employment to disclose any Confidential Information to another corporation.
7. BENEFICIARY.
The Beneficiary of any payment due and payable at the time of Xxxxxx'
death, or otherwise due upon his death, shall be such person or persons as
Xxxxxx shall designate in writing to Tourjets. If no such beneficiary shall
survive Xxxxxx, any such payments shall be made to his estate.
8. INTELLECTUAL PROPERTY.
(a) Any improvements, new techniques, processes, inventions, works,
discoveries, products or copyrightable or patentable materials made or conceived
by Xxxxxx, either solely or jointly with other person(s), (1) during Xxxxxx'
period of employment by Tourjets, during working hours; (2) during the period
after termination of his employment during which he is retained by Tourjets as a
consultant; or (3) with use of Tourjets intellectual property or Confidential
Information, shall not be the sole and exclusive property of Tourjets without
royalty or other consideration to Xxxxxx.
(b) Xxxxxx agrees to inform Tourjets promptly and in full of such
intellectual property by a full written report setting forth in detail the
procedures used and the results achieved.
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9. NO WAIVER.
The failure of either party at any time to enforce any provisions of
this Agreement or to exercise any remedy, option, right, power or privilege
provided for herein, or to require the performance by the other party of any of
the provisions hereof, shall in no way be deemed a waiver of such provision at
the same or at any prior or subsequent time.
10. GOVERNING LAW.
All questions concerning the construction, validity, application and
interpretation of this Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to any
choice of law or conflict of law provision or rule (whether of Florida or any
other jurisdiction) that would cause the application of the law of any
jurisdiction other than Florida.
11. ARBITRATION.
Except as described in Section 6, above any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration, under the commercial arbitration rules of the American
Arbitration Association. The prevailing party in any such arbitration, or any
court action to enforce or vacate an arbitration award, shall be entitled to its
costs and reasonable attorneys fees from the other party.
12. VALIDITY.
The invalidity or unenforceability of any provision or provisions of
this Agreement shall not be deemed to affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. SUCCESSORS.
This Agreement shall inure to the benefit of and be binding upon
Tourjets, its successors and assigns, including any corporation or other
business entity which may acquire all or substantially all of Tourjets assets or
business, or within which Tourjets may be consolidated or merged, or any
surviving corporation in a merger involving Tourjets.
14. WAIVER OF MODIFICATION OF AGREEMENT.
No waiver or modification of this Agreement shall be valid unless in
writing and duly executed by both parties.
15. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
TOURJETS AIRLINE CORPORATION
/s/ Xxxxx Xxxxxx
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