EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated July 28, 2000 is entered
into by and between Xxx Xxxxxxxx ("Executive") and Hotel Reservation Network,
Inc., a Delaware corporation (the "Company").
WHEREAS, the Company desires to establish its right to the services of
Executive, in the capacity described below, on the terms and conditions
hereinafter set forth, and Executive is willing to accept such employment on
such terms and conditions.
NOW THEREFORE, in consideration of the mutual agreements hereinafter
set forth, Executive and the Company have agreed and do hereby agree as follows:
1A. EMPLOYMENT. The Company agrees to employ Executive as Chief Financial and
Strategic Officer and Executive accepts and agrees to such employment. During
Executive's employment with the Company, Executive shall do and perform all
services and acts necessary or advisable to fulfill the duties and
responsibilities as are commensurate and consistent with Executive's position
and shall render such services on the terms set forth herein. During Executive's
employment with the Company, Executive shall report directly to the Chief
Executive Officer (hereinafter referred to as the "Reporting Officer").
Executive shall have such powers and duties with respect to the Company as may
reasonably be assigned to Executive by the Chief Executive Officer, to the
extent consistent with Executive's position and status. Executive agrees to
devote all of Executive's working time, attention and efforts to the Company and
to perform the duties of Executive's position in accordance with the Company's
policies as in effect from time to time. Executive's principal place of
employment shall be the Company's offices located in Dallas, Texas.
2A. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence on
September 1, 2000 and shall continue for a period of one (1) year and shall be
automatically and repeatedly renewed for successive one (1) year periods
thereafter, unless (i) sooner terminated in accordance with the provisions of
Section 1 of the Standard Terms and Conditions attached hereto; or (ii) either
party delivers written notice of non-renewal to the other prior to the last 60
days of any such annual period.
3A. COMPENSATION.
(a) BASE SALARY. During the Term, the Company shall pay Executive an
annual base salary of $180,000 (the "Base Salary"), payable in equal biweekly
installments or in accordance with the Company's payroll practice as in effect
from time to time. For all purposes under this Agreement, the term "Base Salary"
shall refer to Base Salary as in effect from time to time.
(b) DISCRETIONARY BONUS. During the Term, Executive shall be eligible
to receive discretionary bonuses on the same basis as others reporting to the
Chief Executive Officer and persons otherwise regarded as senior management. Any
bonus may be payable in cash, Common Stock (as defined below) or any combination
of the two.
(c) STOCK OPTIONS. In consideration of Executive's entering into this
Agreement and as an inducement to join the Company, Executive shall be granted,
under the Company's 2000 Stock Plan (the "Plan"), an incentive or non-qualified
stock option (the "Option") to purchase 100,000 shares of the Company's Class A
Common Stock, $.01 par value per share (the "Common Stock"), subject to the
approval of the Compensation Committee of the Board of Directors of the Company.
The date of grant of the Option shall be the later of (x) the Effective Date and
(y) the date on which the grant is approved by such Compensation Committee. The
exercise price of the Option shall equal the last reported sales price of the
Common Stock in the over-the-counter market (or such other market on which the
Common Stock is then traded) on the date preceding the date of grant. Such
Option shall vest and become exercisable over a four (4) year term, with
twenty-five percent (25%) or 25,000 shares of the Option becoming exercisable on
the first anniversary of the Effective Date and an additional 1/36th of the
75,000
share balance of the Option becoming exercisable on the first day of each month
during the Term. The Option shall expire upon the earlier to occur of (i) ten
years from the date of grant (the "Option Term") or (ii) except as otherwise
provided in the Option award agreement, 90 days following the termination of
Executive's employment with the Company for any reason. Other than acceleration
of the vesting of the Option following a Change in Control, the Option shall not
otherwise become vested and exercisable as a result of the termination or
non-renewal of this Agreement (or the termination of Executive's employment with
the Company) for any reason. In the event of a Change in control (as such is
defined in the Plan), in addition to any options that have already vested, there
also shall be vested, at the time of such Change in Control, 50% of then
unvested options referred to above.
(d) BENEFITS. From the Effective Date through the date of termination
of Executive's employment with the Company for any reason, Executive shall be
entitled 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 to similarly situated Executives of
the Company. Without limiting the generality of the foregoing, Executive shall
be entitled to the following benefits:
(i) Reimbursement for Business Expenses. During the Term, the
Company shall reimburse Executive for all reasonable and necessary expenses
incurred by Executive in performing Executive's duties for the Company, on the
same basis as similarly situated Executives and in accordance with the Company's
policies as in effect from time to time.
(ii) Vacation. During the Term, Executive shall be entitled to
no less than two (2) weeks of paid vacation per year, in accordance with the
plans, policies, programs and practices of the Company applicable to similarly
situated Executives of the Company generally.
(iii) Relocation Expenses. The company shall reimburse
Executive for reasonable moving expenses incurred in connection with Executive's
relocation from Delray Beach, Florida to Dallas, Texas. The Company shall
reimburse Executive, to the extent applicable, such additional amounts (the "Tax
Gross-Up") as shall be necessary to make the Executive whole on a net after-tax
basis for all Taxes (as defined herein), if any, required to be paid by the
Executive with respect to all taxable income he receives pursuant to the
provisions of this Section 3A(d)(iii). The term "Taxes" means all federal, state
and local income, employment and capital gains taxes. Notwithstanding the
foregoing, the aggregate amount of reimbursement by the Company pursuant to
Section 3A(d)(iii), before taking into account the Tax Gross-Up, shall not
exceed $40,000.
4A. NOTICES. All notices and other communications under this Agreement shall be
in writing and shall be given by first-class mail, certified or registered with
return receipt requested or hand delivery acknowledged in writing by the
recipient personally, and shall be deemed to have been duly given three days
after mailing or immediately upon duly acknowledged hand delivery to the
respective persons named below:
If to the Company: Hotel Reservations Network, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention:
With copy to:
USA Networks, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to the Executive: Xxx Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Either party may change such party's address for notices by notice duly given
pursuant thereto.
5A. GOVERNING LAW; JURISDICTION. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the internal laws of the State of Texas without reference to
the principles of conflicts of laws. Any and all disputes between the parties
which may arise pursuant to this Agreement will be heard and determined before
an appropriate federal court in Texas, or, if not maintainable therein, then in
an appropriate Texas state court. The parties acknowledge that such courts have
jurisdiction to interpret and enforce the provisions of this Agreement, and the
parties consent to, and waive any and all objections that they may have as to,
personal jurisdiction and/or venue in such courts.
6A. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument. Executive expressly understands and
acknowledges that the Standard Terms and conditions attached hereto are
incorporated herein by reference, deemed a part of this Agreement and are
binding and enforceable provisions of this Agreement. References to "this
Agreement" or use of the term "hereof" shall refer to this Agreement and the
Standard Terms and Conditions attached hereto, taken as a whole.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and delivered by its duly authorized officer and Executive has executed
and delivered this Agreement on July 28, 2000.
HOTEL RESERVATIONS NETWORK, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Title: President
/s/ Xxx Xxxxxxxx
---------------------------------
Xxx Xxxxxxxx
