AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
Exhibit 10.1
This Amendment No. 1 to Employment Agreement (this “Amendment”) is made and
entered into on July 1, 2008, by and between Global Traffic Network, Inc., a Nevada corporation
located at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000 (the “Company”), and
Xxxxxxx X. Xxx III, with a mailing address of 0000 Xxxxxx Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx 00000
(the “Employee”).
BACKGROUND
A. Global Traffic Network, Inc., a Delaware corporation and predecessor to the Company
(“Global Delaware”), and Employee have previously entered into that certain Employment
Agreement effective as of March 29, 2006 (the closing date of the Global Delaware’s initial public
offering) (the “Agreement”).
B. Global Delaware changed its state of incorporation on February 26, 2008 pursuant to a
merger of Global Delaware with and into the Company, with the Company remaining as the surviving
corporation to the merger and successor in interest to Global Delaware’s rights and obligation
under the Agreement.
C. The Company and Employee desire to amend certain provisions of the Agreement pursuant to
this Amendment.
AGREEMENT
Now, Therefore, in consideration of the foregoing facts, the mutual covenants set
forth herein and for other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Company and Employee, intending to be legally bound, hereby agree to amend
the Agreement as follows:
1. Amendment to Salary and Bonus Provisions. Sections 4, 5 and 7 of the Agreement
shall be amended in their entireties to read as follows:
4. Salary. The Company shall pay Employee an annual salary of $400,000.00
through June 30, 2008. Commencing July 1, 2008, the amount of Employee’s annual
salary shall be increased to $450,000.00. Thereafter, and throughout the term of
this Agreement, Employee’s annual salary shall be increased by $50,000 on July 1 of
each year, provided that certain profit levels as determined by the Board or the
Compensation Committee thereof have been achieved. Payment of Employee’s salary
shall be made in accordance with the Company’s normal payroll business practices.
5. Bonus. During the term of this Agreement, Employee shall be
entitled to receive an annual performance-based bonus (the “Bonus”), in an amount
up to 50.0% of his previous year’s annual salary, for each of fiscal 2009, 2010 and
2011. The amount of the Bonus, if any, will be determined and paid based upon
satisfaction of certain operating profit goals to be determined by the Board or the
Compensation Committee thereof for the applicable fiscal year. Subject to Employee
remaining an
active employee of the Company through the end of the applicable fiscal year,
the Bonus, if any, for such
fiscal year will be paid not later than the
15th day of the third month after the end of the calendar year in which
the Bonus has been earned.
7. Other Benefits. Employee shall be entitled to participate in or
receive benefits under any employee-benefit plan made available by the Company in
the future to its employees based in the United States (including without
limitation medical, dental and life insurance benefits), subject to and on a basis
consistent with the terms, conditions and overall administration of such plans.
Nonetheless, in its sole discretion the Company may amend or terminate any such
employee-benefit plan providing benefits generally to its employees. Employee shall
be entitled to an aggregate of four weeks of paid vacation in each calendar year.
Notwithstanding the foregoing, unless and until the Company elects to provide its
United States based employees (including Employee) with medical insurance, the
Company shall pay Employee $1,000 per month in lieu providing Employee with such
benefit.
2. Termination Upon Material Breach by Company. Section 9(c) the Agreement shall be
amended in its entirety to read as follows:
(c) by Employee in the event of a material breach of this Agreement by the
Company; provided, however, that: (i) Employee has provided written notice to the
Board of the existence of such breach within a period not to exceed ninety (90)
days following its initial occurrence; (ii) the Company has failed to cure such
breach within a period of (30) days following the Board’s receipt of such notice
from Employee; and (iii) Employee terminates his employment with the Company within
a period of time not to exceed thirty (30) days following the expiration of the
Company’s cure period under subsection (ii) above.
3. Timing of Severance Payments. Two new paragraphs are hereby inserted at the end
of Section 9, reading as follows:
Except as provided in the following paragraph, the Company shall make all
Severance Payments due pursuant to this Section 9 at the times and in the manner
that Employee’s salary would have been paid but for the termination of Employee’s
employment and shall otherwise comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated
thereunder (“Section 409A”).
If, as of the date Employee’s employment is terminated: (a) the Company’s
common stock is publicly traded (as determined under Section 409A), (b) Employee is
a “specified employee” (as determined under Section 409A), and (c) any Severance
Payments due pursuant to this Section 9 would exceed the sum of the applicable
limited separation pay exclusions as determined pursuant to Section 409A, then
payment of the excess amount shall be delayed until the first regular payroll date
of the Company following the
six month anniversary of the date of Employee’s employment termination (or, if
earlier, the date of his or her death), and shall include a lump sum equal to the
aggregate amounts that Employee would have received had payment of this excess
amount commenced following the date of Employee’s employment termination as provided
in this Section 9. If Employee continues to perform any services for the Company
(as an employee or otherwise) after the date of Employee’s employment termination,
such six month period shall be measured from the date of Employee’s “separation from
service” as defined pursuant to Section 409A.
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4. Compliance with Section 409A. A new Section 16 is hereby added to the Agreement,
reading as follows:
16. Compliance with Section 409A. To the extent any provision of this
Agreement may be deemed to provide a benefit to Employee that is treated as
non-qualified deferred compensation pursuant to Section 409A, such provision shall
be interpreted in a manner that qualifies for any applicable exemption from
compliance with Section 409 or, if such interpretation would cause any reduction of
benefit(s), such provision shall be interpreted (if reasonably possible) in a manner
that complies with Section 409A and does not cause any such reduction.
5. Survival. A new Section 17 is hereby added to the Agreement, reading as follows:
17. Survival. The rights and obligations set forth in Section 9 of
this Agreement, the restrictions set forth in Sections 10 and 11 of this Agreement,
and the provisions of Sections 14, 15 and 16 of this Agreement shall survive the
termination of Employee’s employment with the Company.
6. Miscellaneous. This Amendment and the Agreement embody the entire agreement and
understanding of the parties hereto in respect of the subject matter contained herein. This
Amendment supersedes all prior agreements and the understandings between the parties with respect
to the subject matter contained herein. Except as otherwise expressly provided in this Amendment,
or unless the context otherwise requires, all capitalized terms used herein have the meanings
ascribed to them in the Agreement. Except as expressly set forth herein, this Amendment shall not
by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same agreement. Signatures delivered by facsimile and other means of
electronic communication shall be valid and binding to the same extent as original signatures.
Signature Page Follows
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In Witness Whereof, the parties have executed this Amendment No. 1 to Employment
Agreement on this 1st day of July, 2008.
| COMPANY: GLOBAL TRAFFIC NETWORK, INC. |
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| By: | /s/ Xxxxx X. Xxxx | |||
| Xxxxx X. Xxxx, Chief Operating Officer and | ||||
| Chief Financial Officer | ||||
| EMPLOYEE: |
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| /s/ Xxxxxxx X. Xxx III | ||||
| Xxxxxxx X. Xxx III | ||||
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