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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
Amended and Restated Employment Agreement dated as of May 26, 1998,
between Xxxxxxx Xxxxxx ("Employee") and Global Discount Travel Services LLC (the
"Company").
WHEREAS, Employee executed an employment agreement effective May 26,
1998 (the "Original Agreement"), setting forth the terms of Employee's
employment with the Company; and
WHEREAS, the parties hereto wish to amend and restate the Original
Agreement to clarify certain terms thereof.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and conditions hereinafter set forth, the
Company hereby employs Employee and Employee hereby accepts employment as
Controller of the Company.
2. Salary. The Company will pay Employee a base salary of $110,000 per
year ("Base Salary"), payable on a bi-weekly basis effective May 1, 1998.
3. Stock Options.
(a) Employee is granted an option to purchase a membership
interest in the Company entitling Employee to a one tenth of one percent (0.1%)
interest in the profits and distributions of the Company for a total cash price
of $200,000. Such option shall vest on May 26, 2004, provided that Employee
remains employed with the Company through such date, and such option may be
exercised by Employee for a period of ninety (90) days following such vesting
date.
In the event of Employee's termination of employment for any reason (including,
without limitation, involuntary termination by the Company, resignation by the
Employee or death) prior to an IPO (as defined below) and prior to May 26, 2004,
such option to purchase a membership interest in the Company shall terminate and
be of no further effect.
(b) If the Company (or an entity which owns substantially all
of the assets of or membership interests in the Company) completes an initial
public offering (the "IPO") of common stock ("Common Stock") during Employee's
employment with the Company, any outstanding option to purchase a membership
interest in the Company shall be converted into and be deemed to constitute a
non-qualified stock option to purchase 39,433 shares of Common Stock for a cash
exercise price of $5.0719 per share (with the number of shares and exercise
price being subject to equitable adjustment in the event of a stock split, stock
dividend, recapitalization or other similar change in capitalization affecting
the Common Stock). Employee and the Company acknowledge and
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agree that the foregoing number of shares of Common Stock subject to such option
and exercise price are calculated based upon an assumed capitalization of
39,433,263 shares of Common Stock outstanding upon completion of the IPO, which
includes shares issuable upon exercise of the underwriters' over-allotment
option and options issued to employees as of the IPO date.
(c) Stock options to purchase shares of Common Stock shall
vest in equal semi-annual installments over a period of four years, with the
first installment vesting on the six-month anniversary of the IPO date. Vested
stock options may be exercised starting on the six-month anniversary of the IPO
and ending five years from the date of the IPO.
(d) If, following an IPO, the Company (i) ceases operation,
(ii) consummates a "going private" transaction, (iii) is sold to a private
company or (iv) is sold to a public company, any unvested options to purchase
Common Stock shall become vested immediately prior to the effective date of any
such transaction. Upon any such transaction, Employee shall receive upon
exercise of outstanding options to purchase Common Stock such consideration per
share as shareholders of Common Stock are entitled to receive pursuant to such
transaction unless, in the case of a sale to a public company, provisions are
made in the transaction for the assumption of the outstanding options or the
substitution of the outstanding options for options of a publicly-traded
successor corporation or a publicly-traded parent thereof (with appropriate
adjustments as to the number and kind of shares and exercise price as to prevent
dilution or enlargement of rights).
(e) Stock options to purchase shares of Common Stock may be
purchased through the use of a broker-dealer sale and remittance procedure
pursuant to which Employee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or all of
the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale transaction.
4. Termination.
(a) In the event that Employee's employment is terminated
other than (i) by reason of Employee's resignation or death or (ii) by the
Company for "Cause", (A) Employee shall be entitled only to Employee's annual
base salary for the period of time Employee worked during the applicable year,
(B) Employee's unvested stock options to purchase Common Stock shall become
immediately vested, and (C) all vested stock options to purchase Common Stock
shall be exercisable for 12 months after termination of employment. For purposes
of the foregoing, a buyer's failure immediately following a transaction
described in Section 3(d) above to offer Employee a position comparable to the
position held by Employee immediately prior to such transaction shall be deemed
to be a termination by the Company other than for Cause. For purposes of this
Agreement, "Cause" is defined as (1) Employee's willful misconduct, (2) gross
neglect of Employee's obligation to the business of the Company, (3) Employee's
conviction of a crime involving moral turpitude or
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dishonesty or (4) Employee's disability that prevents him from performing the
essential functions of Employee's job for in excess of six (6) months.
(b) In the event that Employee dies, (i) Employee shall be
entitled only to Employee's annual base salary for the period of time Employee
worked during the applicable year, (ii) Employee's vested stock options to
purchase Common Stock shall be exercisable for 12 months after death and (iii)
all unvested stock options to purchase Common Stock shall expire on the date of
death.
(c) In the event that Employee resigns, (i) Employee shall be
entitled only to Employee's annual base salary for the period of time Employee
worked during the applicable year, (ii) at any time before the first anniversary
of the IPO, Employee agrees to forfeit all vested stock options and unvested
stock options to purchase Common Stock and (iii) at any time after the first
anniversary of the IPO, (A) Employee's unvested stock options to purchase Common
Stock shall expire on the date Employee notifies the Company of Employee's
resignation and (B) Employee's vested stock options to purchase Common Stock
shall expire three months after the date Employee notifies the Company of
Employee's resignation.
(d) In the event that Employee is terminated by the Company
for Cause, (i) Employee shall be entitled only to Employee's annual base salary
for the period of time Employee worked during the applicable year, (ii) at any
time before the first anniversary of the IPO, Employee agrees to forfeit all
vested stock options and unvested stock options to purchase Common Stock and
(iii) at any time after the first anniversary of the IPO, (A) Employee's
unvested stock options to purchase Common Stock shall expire on the date of
termination and (B) Employee's vested stock options to purchase Common Stock
shall expire three months after the date of termination.
5. Non-Compete; Non-Disclosure; Non-Solicitation; Inventions.
(a) For a period of six months (the "Restricted Period") from
the date on which your employment with the Company terminates for any reason
("Termination"), Employee will not, anywhere, directly or indirectly, own,
manage, operate, control, be employed by, participate in, provide consulting
services to, or be connected in any manner with the ownership, management,
operation or control of any entity (collectively, "Involved") which is engaged
in the Internet travel business, except that Employee may own, for investment
purposes only, up to 1% of the capital stock or indebtedness of any company
whose capital stock is publicly traded. An entity shall not be considered
substantially engaged in the Internet travel business if less than 5% of its
gross sales are derived from Internet travel revenues. However, even if the
entity does have less than 5% of its gross sales derived from Internet travel
revenues, Employee shall not be directly Involved in the development or growth
of such entity's Internet travel business during the applicable period. In the
event that Termination was due to the resignation by Employee, Employee further
agrees that Employer shall have the option (the "Extension Option") to extend
the Restricted Period for an additional six month period (the "Additional
Restricted Period"). In the event that Employer elects to exercise the Extension
Option, Employer shall pay to Employee during the period commencing on
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the first day of the Additional Restricted Period and ending on the last day of
the Additional Restricted Period, on a monthly basis, an amount equal to
one-twelve (1/12th) of Employee's Base Salary.
(b) For a period of 12 months from Termination, Employee
agrees not to contact or solicit any person known by Employee to be an employee
of the Company or any of its affiliates or to have been employed by the Company
or any of its affiliates within the prior 90 days for the purpose of inducing
such employees to leave such employ.
(c) During the term of this Agreement and at all times
thereafter, Employee shall hold in a fiduciary capacity for the benefit of the
Company and its affiliates all secret or confidential information, knowledge or
data relating directly to the business of the Company or its affiliates, and
their respective businesses, including but not limited to trade secrets, (i)
obtained by Employee during Employee's employment by the Company and (ii) not
otherwise in the public knowledge. Employee shall not, without prior written
consent of the Company, except to the extent compelled pursuant to the order of
a court or other body having jurisdiction over such matter or based upon the
advice of counsel communicate or divulge any such information, knowledge or data
to anyone other than the Company and those designated by the Company; provided,
however, that Employee will assist the Company, at the Company's expense, in
obtaining a protective order, other appropriate remedy or other reliable
assurance that confidential treatment will be accorded such information
disclosed pursuant to the terms of this Agreement.
(d) All processes, technologies and inventions (collectively,
"Inventions"), including new contributions, improvements, ideas, discoveries,
trademarks and trade names, conceived, developed, invented, made or found by
Employee, alone or with others, during the period of Employee's employment by
the Company, whether or not patentable and whether or not conceived, developed,
invented, made or found on the Company's time or with the use of the Company's
facilities or materials, shall be the property of the Company and shall be
promptly and fully disclosed by Employee to the Company. Employee shall perform
all necessary acts (including, without limitation, executing and delivering any
confirmatory assignments, documents or instruments requested by the Company) to
vest title to any such Invention in the Company and to enable the Company, at
its expense, to secure and maintain domestic and/or foreign patents or any other
rights for such Inventions.
(e) Employee is scheduled to receive stock options under this
agreement which will benefit Employee based upon the performance of the
Company's business. Employee represents to the Company that the enforcement of
the restrictions contained in this section would not be unduly burdensome to
Employee. Employee agrees that the remedy at law for any breach by Employee of
the provisions of this section may be inadequate and that the Company shall be
entitled to injunctive relief. This section constitutes an independent and
separable covenant that shall be enforceable notwithstanding any right or remedy
that the Company may have under any other provision of this Agreement or
otherwise.
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6. Miscellaneous.
(a) This agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
previous written, and all previous or contemporaneous oral, negotiations,
understandings, arrangements, and agreements.
(b) The headings in this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
(c) This Agreement and all of the provisions hereof shall
inure to the benefit of and be binding upon the legal representatives, heirs,
distributees, successors (whether by merger, operation of law or otherwise) and
assigns of the parties hereto; provided, however, that Employee may not delegate
any of Employee's duties hereunder, and may not assign any of Employee's rights
hereunder, without the prior written consent of the Company.
(d) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
(e) If any section, paragraph, term or provision of this
Agreement shall be held or determined to be unenforceable, the balance of this
Agreement shall nevertheless continue in full force and effect unaffected by
such holding or determination. In addition, in any such event, the parties agree
that it is their intention and agreement that any such section, paragraph, term
or provision which is held or determined to be unenforceable, as written, shall
nonetheless be in force and binding to the fullest extent permitted by law as
though such section, paragraph, term or provision had been written in such a
manner and to such an extent as to be enforceable under the circumstances.
(f) This Agreement will be interpreted and the rights of the
parties determined in accordance with the laws of the United States applicable
thereto and the internal laws of the State of New York applicable to an
agreement executed, delivered and performed therein without giving effect to the
choice-of-law rules thereof or any other principle that could require the
application of the substantive law of any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GLOBAL DISCOUNT TRAVEL SERVICES LLC
By: Global Partner, Inc., Manager
By: ________________________________
Xxxx Xxxxxx
Vice President
________________________________
Xxxxxxx Xxxxxx
SS# _______________
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