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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
AGREEMENT entered into as of the 1st day of June, 1997 by and
between 800 Travel Systems, Inc., a Delaware corporation ("Company") with an
office at 0000 Xxxx Xxxxxxx, Xxxxx, Xxxxxxx 00000 and Xxxxxx Xxxxxxxx
("Employee") an individual residing at [address].]
WHEREAS, Company desires to employ Employee in the capacity and under the
terms set forth below and Employee desires to be employed by Company in that
capacity and on those terms;
NOW, THEREFORE, it is agreed as follows:
1. Employment; Position; Duties.
(a) Company hereby employs Employee, and Employee hereby accepts employment
by Company, on the terms and conditions set forth in this Agreement. During the
Term of this Agreement (as defined below) Employee shall serve as the Vice
President-Marketing of the Company, subject to the direction of the Chief
Operating Officer of the Company, and in connection therewith shall perform his
duties in accordance with the instructions and policies of the Chief Operating
Officer.
(b) The duties of Employee shall be those customarily associated with a
director of marketing of a company engaged in operations similar to those of the
Company as more fully determined by the Board of Directors of the Company (the
"Board").
(c) During the Term, Employee shall devote his entire working time and
attention to the business and affairs of the Company and shall use his best
efforts to promote the business
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of the Company. During the term of his employment hereunder, Employee shall have
no interest in or perform any material service for any other business entity
whether or not competitive with Company, except that the aforesaid prohibition
against ownership shall not apply to either inactive investments in public
companies whose stock is traded on a national securities exchange or actively
traded over the counter or passive investments in entities not competitive with
Company.
(d) Employee will report to the Chief Operating Officer and will provide
him with such written reports relating to the Company's business as he may
request.
2. Term. The term of Employee's employment (the "Term") shall be for a
period of approximately three years commencing on the Effective Date (as
hereinafter defined) and ending, notwithstanding the Effective Date, on December
31, 1999. The "Effective Date" means the date on which the currently
contemplated initial public offering of common stock of Company (the IPO) is
consummated. Anything contained herein to the contrary notwithstanding, Employee
acknowledges that this Agreement is being entered into in contemplation of the
aforesaid IPO and that, if such IPO does not become effective, for any reason
whatsoever, this Agreement shall be of no force or effect.
In the event that Employee continues in the full-time employ of Company
after the end of the Term, such continued employment shall be on a year-to-year
basis subject to the terms and conditions hereof. As used in this Agreement, the
"First
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Contract Year" means the period commencing on the Effective Date and ending on
June 30, 1998 the "Second Contract Year" means the one-year period immediately
following the First Contract Year; and the "Third Contract Year" means the
one-year period immediately following the Second Contract Year. Each subsequent
July 1st occurring during the period in which Employee is employed by the
Company shall be deemed to commence a new contract year.
3. Compensation; Benefits.
(a) In consideration of the services to be rendered by Employee hereunder,
Company shall pay Employee the following compensation:
(i) in the First Contract Year a base salary at the rate of $45,000
per annum;
(ii) in the Second Contract Year the Employee shall be paid a base
salary equal to $45,000 plus an amount equal to $45,000 times (the
percentage increase in the Consumer Price Index from June 1, 1997 to June
1, 1998 plus 5%). Thus, if the percentage increase in the CPI was 5%,
commencing July 1, 1998, Employee's salary would be $49,500 ($45,000 +
($45,000 x .10));
(iii) in the Third Contract Year the Employee shall be paid a base
salary equal to his salary rate for the Second Contract Year plus an amount
equal to his salary rate for the Second Contract Year times the percentage
increase in the Consumer Price Index from June 1, 1998 to June 1, 1999 plus
5%.
(b) Company shall reimburse Employee promptly upon presentation of receipts
or other satisfactory documentation for
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all reasonable expenses incurred by him in the furtherance of and
in connection with his employment hereunder.
(c) Company shall provide Employee with such medical and disability
insurance as it makes available to its executives generally on substantially the
same terms and conditions as such insurance is made available to other
executives.
(d) Employee shall be entitled to twice (2) weeks vacation in each calendar
year during the Term, such vacation to be taken at times not inconvenient to
Company.
(e) As additional consideration for such services as may be rendered
hereunder the Company has issued to Employee 50,000 shares of its Common Stock.
The Employee agrees not to sell or otherwise transfer 45,000 of such shares
prior to the second anniversary of the Effective Date without the prior written
consent of the Company. Upon request, the Employee shall enter into a "lock-up"
agreement with the underwriter of the IPO confirming his agreement not to
transfer 45,000 of his shares prior to the second anniversary of the Effective
Date without the consent of the underwriter. Employee shall be released from the
transfer restriction contained in this paragraph upon termination of this
Agreement.
(f) Pursuant to the terms of the Company's Stock Option Plan (the "Plan")
the Company shall grant to Employee options to purchase 12,500 shares of the
Company's Common Stock at a price of $5.00 per share. The right to exercise such
options shall vest in equal increments on June 1, 1998, and June 1, 1999.
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The terms and conditions of such options to be fully set forth in a Stock Option
Agreement to be issued in accordance with the Plan.
(g) Prior to the second anniversary of the Effective Date the Company shall
register for sale under the Securities Act of 1933 the shares referenced in
subparagraph (e) and the shares underlying the options referenced in
subparagraph (f).
4. Termination.
(a) This Agreement may be terminated by Company for cause (as defined
below) immediately upon written notice thereof to Employee. Upon termination for
cause, Company shall not be obligated to make any further payment to Employee
under this Agreement, but the provisions of paragraph 6 shall survive any such
termination. For the purposes of this Agreement, the phrase "for cause" shall
mean Employee's (i) conviction of the willful violation of any law, rule or
regulation, other than minor violations (which, through lapse of time or
otherwise, is not subject to appeal); (ii) acts with respect to the property of
the Company which constitute larceny, fraud, theft, embezzlement or the
acceptance of a bribe or kick back; (iii) willful misconduct as an employee of
Company; (iv) willful misrepresentation of a material matter to the Board; or
(v) reckless disregard of his responsibilities under this Agreement.
(b) If as a result of Employee's incapacity due to physical or mental
illness, he shall have been absent from his duties with Company on a continuous
basis for more than ninety days
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or for more than ninety working days during any nine month period, Company may
upon thirty days prior written notice, terminate Employee's employment for
"disability". Upon any such termination, except as otherwise required by law,
Employee's rights to receive salary or other compensation or benefits hereunder
shall terminate as of the date set forth in such notice.
(c) This Agreement shall terminate automatically upon Employee's death.
(d) In the event that Employee remains employed by the Company for the full
Term of this Agreement but Company determines that it does not intend to offer
to employ Employee on substantially the same or better terms after the end of
the Term, the Company shall, not less than 45 days prior to the end of the Term,
provide written notice to Employee of such determination. Notwithstanding the
provisions of paragraph 1(c) of this Agreement, after receipt of such a notice,
for the duration of the Term, Employee shall be permitted to devote a reasonable
amount of his working time and attention to making arrangements for his
employment after the Term, however, nothing contained herein shall diminish
Employee's continuing obligation, during the balance of the Term, to use his
best efforts to promote the business of the Company.
5. No Conflicting Agreement. Employee represents and warrants that he is
not subject to any employment agreement, restrictive covenant, agreement or
contract which might limit the performance of his duties and responsibilities
hereunder. Employee
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further represents and warrants that he has made no commitment of any kind
whatsoever inconsistent with the provisions of this Agreement and that he is
under no disability of any kind which would prevent him from entering into this
Agreement and performing all of his obligations hereunder.
6. Non-Competition; Confidentiality.
(a) Employee covenants and agrees with Company that he will not, directly
or indirectly:
(i) while he is in Company's employ and at any time after the
termination of his employment hereunder, disclose or use or otherwise
exploit for his own benefit or the benefit of any other person (other than
for the benefit of Company) any Confidential Information (as hereinafter
defined) disclosed to Employee or of which Employee becomes aware by reason
of his employment with Company;
(ii) while he is in Company's employ and through the period ending two
years after the termination of his employment hereunder, solicit or divert
or appropriate to any Competing Business (as hereinafter defined), directly
or indirectly, or attempt to solicit or divert or appropriate to any such
Competing Business, any person or entity who was a customer or client of
Company at any time during the last six months of Employee's employment
hereunder;
(iii) while he is in Company's employ and through the period ending
two years after the termination of his employment hereunder, employ or
attempt to employ or assist anyone
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else in employing any person who, at any time within the period commencing six
months prior to the date of the termination of Employee's employment by Company
and ending one year after the date of such termination, was, is or shall be an
employee of Company (whether or not such employment is full time or is pursuant
to a written contract with Company); and
(iv) while he is in Company's employ and through the period ending
ninety days after his employment hereunder, as an individual or as agent,
employee, partner, officer, director, owner or independent contractor of
any person or entity, engage in any Competing Business, directly or
indirectly.
(b) Employee agrees that upon the termination of his employment (whether
voluntarily or involuntarily) he will not take with him or retain without the
Company's written authorization, and will promptly deliver to Company, originals
and all copies of all papers, files or other documents containing any
Confidential Information and all other property belonging to Company.
(c) For purposes of this Paragraph, the term "Competing Business" means any
business located within the United States providing services substantially
similar to those provided by the Company from time to time. The term
"Confidential Information" means any and all data and information relating to
the business of the Company (whether constituting a trade secret or not) which
is or has been disclosed to Employee or of which Employee becomes aware as a
consequence of or through his
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relationship with the Company and which has value to the Company and is not
generally known by its competitors. Confidential Information shall not include
any data or information that has been voluntarily disclosed to the public by
Company (except where such public disclosure has been made by Employee without
authorization) or that has been independently developed and disclosed by others,
or that otherwise enters the public domain through lawful means.
If a court of competent jurisdiction determines that any of the provisions
related to the right of Employee to compete with Company upon termination of his
employment or to use information made know to him during the course of his
employment by Company are not enforceable because of their length or territorial
scope, Company and Employee agree that such court may limit the term or scope of
such provision to such extent as is necessary to render it enforceable and that
such provision, as so revised, shall be enforceable.
(d) Employee acknowledges that irreparable loss and injury would result to
Company upon the breach of any of the covenants contained in this paragraph 6
and that damages arising out of such breach would be difficult to ascertain.
Employee agrees that, in addition to all other remedies available at law or at
equity, Company may petition and obtain from a court of law or equity both
temporary and permanent injunctive relief to prevent a breach by Employee of any
covenant contained in this Paragraph 6 and that in any action or proceeding
brought to enforce any provision of this Paragraph 6, the prevailing party shall
be
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entitled to recover from the non-prevailing party the former's reasonable costs
of enforcement, including legal fees.
7. Severance. In the event that any provision (or any portion of any
provision) of this Agreement shall be held to be void or unenforceable, the
remaining provisions of this Agreement (and the balance of any provisions held
void or unenforceable in part only) shall continue in full force and effect,
unless dependent upon an unenforceable or void provision.
8. Resignation. Upon the termination of his employment for any reason
Employee shall be deemed to resign as an officer and director of Company and its
affiliates, if then so acting.
9. Assignment; Successors. This Agreement may not be assigned by Employee,
but may be assigned by Company to any successor in interest to its business.
This Agreement shall inure to the benefit of and shall be binding upon Company,
its successors and assigns, and Employee, his heirs, legal representatives,
executors and assigns.
10. Complete Agreement; Governing Law. This Agreement contains the full and
complete understanding and agreement of the parties and supersedes all prior
agreements and understanding between the parties with respect to the subject
matter hereof. This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey applicable to agreements made and
wholly performed within said State, and may not be modified, amended, terminated
or discharged orally.
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11. Waiver; Estoppel. No waiver by either party of any breach of any
provision of this Agreement shall be deemed a waiver of any preceding or
succeeding breach of such provision or of a other provision herein contained.
12. Notices. Any notices hereunder shall be in writing and delivered at the
addresses set forth above, or to such other address or addresses as may
hereafter be furnished in writing by one party to the other, by certified mail,
return receipt requested, or by telecopier. All such notices shall be deemed
effective upon receipt.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
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Xxxxxx Xxxxxxxx
800 TRAVEL SYSTEMS, INC.
By:___________________________
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