EMPLOYMENT AGREEMENT
Exhibit 10.3
This Employment Agreement is entered into as of December 9, 2005 (the “Effective Date”), by
and between Travelzoo Inc., a Delaware corporation (the “Company”) with principal corporate offices
at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, and Xxxxx Xxx, whose address is
currently xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (“Employee”). The Company and Employee are
collectively referred to herein as “the Parties.”
WHEREAS, the Company desires to retain Employee as Director of Finance, and Employee desires
to perform such service for the Company, on the terms and conditions as set forth herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
it is mutually agreed by the parties as follows:
1. Duties and Scope of Employment.
(a) Position. Employee shall be employed as Director of Finance.
(b) Duties. During the term of Employee’s employment with the Company, Employee
shall devote his full time, skill and attention to his duties and responsibilities, which
Employee shall perform faithfully, diligently and competently, and Employee shall use his
best efforts to further the business of the Company. During the term of the Agreement,
Employee agrees not to actively engage in any other employment, occupation or consulting
activity for any direct or indirect remuneration without the prior approval of the Company,
except that this provision shall not be interpreted to prohibit Employee from involvement in
any charitable or community activity/organization that he is currently involved in and that
does not materially interfere with his ability to perform his duties under this Agreement.
Employee shall be permitted, to the extent such activities do not materially and adversely
affect the ability of Employee to fully perform his duties and responsibilities hereunder, to
(i) manage Employee’s personal, financial and legal affairs, (ii) serve on civic or
charitable boards or committees, and (iii) with the consent of the Board of Directors (which
consent shall not be unreasonably withheld), serve as a member of the board of directors of
any noncompeting business.
2. Nature of Employment. Employee agrees not to leave or discontinue his employment
with the Company during the first six (6) months of his employment. Employee understands that if he
resigns during the first six (6) months of employment in violation of this Agreement, he shall only
receive the “Salary” (as defined below) and benefits earned as of the date of termination.
Similarly, the Company agrees not to terminate Employee during the first six (6) months of
employment with the Company, except for cause as defined in paragraph 2(b). After the six month
period has ended, Employee will become an “at-will” employee which means that the employment
relationship may be terminated at any time, with or without cause, at the option of either the
Company or Employee, upon two weeks’ written notice to the other party. Employee acknowledges that
his obligations set forth in certain sections of this Agreement, including but not limited to
Section 5, survive the termination of his employment from the Company.
(a) Termination by Company without Cause. If Employee is terminated by the
Company without Cause (as defined in paragraph 2(b)) after the initial six months of
employment, Employee shall receive his salary and benefits earned through the date of
termination.
(b) Termination for Cause. If Employee is terminated for “Cause” as defined
herein at any time, Employee will receive only payment of his salary and benefits through the
date of termination. For purposes of this Agreement, “Cause” is defined as (i) gross
misconduct by Employee that is materially injurious to the Company’s business; (ii) the
commission by Employee of a felony; or (iii) the willful failure or refusal of the Employee,
following receipt of an explicit directive from the Company, to comply with the material
terms of this Agreement.
3. Compensation and Fringe Benefits.
(a) Salary. Employee will receive a salary at the annualized rate of
$130,000.00 (One Hundred Thirty Thousand Dollars) (the “Salary”), which shall be paid
periodically in accordance with normal Company payroll practices and
subject to the usual and applicable required withholdings. Employee understands and
agrees that neither his job performance nor promotions, commendations, bonuses or the like
from the Company give rise to or in any way serve as the basis for modification, amendment,
or extension, by implication or otherwise, of this Agreement.
(b) Vacation and Holiday Pay. Employee shall receive three (3) weeks of paid
vacation per year, which accrues over the course of the year. In addition, the Company
provides eight (8) paid holidays each year, along with two (2) “floating holidays” which can
be used by Employee at any time.
(c) Other Benefits. Employee will be entitled to participate in or receive such
benefits under the Company’s employee benefit plans and policies and such other benefits
which may be made available as in effect from time to time and as are provided to similarly
situated employees of the Company, subject in each case to the generally applicable terms and
conditions of the plans and policies in question.
(d) Sign-On Bonus. Employee will receive a sign-on bonus of $10,000 (Ten
Thousand Dollars) payable within two weeks of the first day of employment. The sign-on bonus
is subject to tax withholdings. Should Employee leave the Company during the initial six (6)
months of employment, in violation of this agreement, Employee will be required to pay back
the sign-on bonus within two (2) weeks after date of termination.
4. Expenses. The Company will pay or reimburse Employee for reasonable travel,
entertainment or other expenses incurred by Employee in the furtherance of or in connection with
the performance of Employee’s duties hereunder in accordance with the Company’s established
policies.
5. Certain Covenants.
(a) Intellectual Property Rights.
(i) Employee agrees that the Company will be the sole owner of any and all of
Employee’s “Discoveries” and “Work Product,” hereinafter defined, made during the term
of his employment with the Company, whether pursuant to this Agreement or otherwise.
For purposes of this Agreement, “Discoveries” means all inventions, discoveries,
improvements, and copyrightable works (including, without limitation, any information
relating to the Company’s software products, source code, know-how, processes, designs,
algorithms, computer programs and routines, formulae, techniques, developments or
experimental work, work-in-progress, or business trade secrets) made or conceived or
reduced to practice by Employee during the term of his employment by the Company,
whether or not potentially patentable or copyrightable in the United States or
elsewhere. For purposes of this Agreement, “Work Product” means any and all work
product relating to Discoveries.
(ii) Employee shall promptly disclose to the Company all Discoveries and Work
Product. All such disclosures must include complete and accurate copies of all source
code, object code or machine-readable copies, documentation, work notes, flow-charts,
diagrams, test data, reports, samples, and other tangible evidence or results
(collectively, “Tangible Embodiments”) of such Discoveries or Work Product. All
Tangible Embodiments of any Discoveries or Work Project will be deemed to have been
assigned to the Company as a result of the act of expressing any Discovery or Work
Product therein.
(iii) Employee hereby assigns and agrees to assign to the Company all of his
interest in any country in any and all Discoveries and Work Product, whether such
interest arises under patent law, copyright law, trade-secret law, semiconductor chip
protection law, or otherwise. Without limiting the generality of the preceding
sentence, Employee hereby authorizes the Company to make any desired changes to any
part of any Discovery or Work Product, to combine it with other materials in any manner
desired, and to withhold Employee’s identity in connection with any distribution or use
thereof alone or in combination with other materials. This assignment and assignment
obligation applies to all Discoveries and Work Product arising during Employee’s
employment with the Company (or its predecessors), whether pursuant to this Agreement
or otherwise. Employee’s agreement to assign to the Company any of his rights as set
forth in this Section 5(a)(iii) applies to all inventions other than an invention (a)
in which no equipment, supplies, facility or trade secret information of the Company
was used (b) was developed entirely upon Employee’s own time (c) does not relate to
Company business or to the Company’s actual or anticipated research or development and
(d) does not result from any work performed by Employee for the Company.
(iv) At the request of the Company, Employee shall promptly and without additional
compensation execute any and all patent applications, copyright registration
applications, waivers of moral rights, assignments, or other instruments that the
Company deems necessary or appropriate to apply for or obtain Letters Patent of the
United States or any foreign country, copyright registrations or otherwise to protect
the Company’s interest in such Discovery and Work Product, the expenses for which will
be borne by the Company. Employee hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as his agents and attorneys-in-fact
to, if the Company is unable for any reason to secure Employee’s signature to any
lawful and necessary document required or appropriate to apply for or execute any
patent application, copyright registration application, waiver of moral rights, or
other similar document with respect to any Discovery and Work Product (including,
without limitation, renewals, extensions, continuations, divisions, or continuations in
part), (i) act for and in his behalf, (ii) execute and file any such document, and
(iii) do all other lawfully permitted acts to further the prosecution of the same legal
force and effect as if executed by him; this designation and appointment constitutes an
irrevocable power of attorney coupled with an interest.
(v) To the extent that any Discovery or Work Product constitutes copyrightable or
similar subject matter that is eligible to be treated as a “work made for hire” or as
having similar status in the United States or elsewhere, it will be so deemed. This
provision does not alter or limit Employee’s other obligations to assign intellectual
property rights under this Agreement.
(vi) The obligations of Employee set forth in this Section 5 (including, without
limitation, the assignment obligations) will continue beyond the termination of
Employee’s employment with respect to Discoveries and Work Product conceived or made by
Employee alone or in concert with others during Employee’s employment with the Company,
whether pursuant to this Agreement or otherwise. Those obligations will be binding
upon Employee, his assignees permitted under this Agreement, executors, administrators,
and other representatives.
(b) Exposure to Proprietary Information.
(i) As used in this Agreement, “Proprietary Information” means all information of
a business or technical nature that relates to the Company including, without
limitation, all information about software products whether currently released or in
development, all inventions, discoveries, improvements, copyrightable work, source
code, know-how, processes, designs, algorithms, computer programs and routines,
formulae and techniques, and any information regarding the business of any customer or
supplier of the Company or any other information that the Company is required to keep
confidential. Notwithstanding the preceding sentence, the term “Proprietary
Information” does not include information that is or becomes publicly available through
no fault of Employee, or information that Employee learned prior to the Effective Date.
(ii) In recognition of the special nature of his employment under this Agreement,
including his special access to the Proprietary Information, and in consideration of
his employment pursuant to this Agreement, Employee agrees to the covenants and
restrictions set forth in Section 5 of this Agreement.
(c) Use of Proprietary Information; Restrictive Covenants.
(i) Employee acknowledges that the Proprietary Information constitutes a
protectible business interest of the Company, and covenants and agrees that during the
term of his employment, whether under this Agreement or otherwise, and after the
termination of such employment, he will not, directly or indirectly, disclose, furnish,
make available or utilize any of the Proprietary Information, other than in the proper
performance of his duties for the Company.
(ii) Employee will not, during the term of this Agreement or, for a period of one
year thereafter (the “Restricted Period”), anywhere within the United States (the
“Restricted Territory”), directly or indirectly (whether as an owner, partner,
shareholder, agent, officer, director, employee, independent contractor, consultant, or
otherwise):
1. perform services for, or engage in, any business that develops or sells
products or services which are competitive with any products or services sold
or developed by the Company (the “Products”);
2. except on behalf of the Company, solicit any person or entity who is,
or was at any time during the twelve-month period immediately prior to the
termination of Employee’s employment with the Company, a customer of the
Company for the sale of the Products or any product or service of a type then
sold by the Company for which Employee provided any assistance in planning,
development, marketing, training, support, or maintenance; or
3. solicit for employment any person who is, or was at any time during the
twelve-month period immediately prior to the termination of Employee’s
employment with the Company, an employee of the Company.
(d) Scope/Severability. The Parties acknowledge that the business of the
Company is and will be national and international in scope and thus the covenants in
this Section 5 would be particularly ineffective if the covenants were to be limited to
a particular geographic area of the United States. If any court of competent
jurisdiction at any time deems the Restricted Period unreasonably lengthy, or the
Restricted Territory unreasonably extensive, or any of the covenants set forth in this
Section 5 not fully enforceable, the other provisions of this Section 5, and this
Agreement in general, will nevertheless stand and to the full extent consistent with
law continue in full force and effect, and it is the intention and desire of the
parties that the court treat any provisions of this Agreement which are not fully
enforceable as having been modified to the extent deemed necessary by the court to
render them reasonable and enforceable and that the court enforce them to such extent
(for example, that the Restricted Period be deemed to be the longest period permissible
by law, but not in excess of the length provided for in Section 5(c), and the
Restricted Territory be deemed to comprise the largest territory permissible by law
under the circumstances).
(e) Return of Company Materials upon Termination. Employee acknowledges that
all records, documents, and Tangible Embodiments containing or of Proprietary
Information prepared by Employee or coming into his possession by virtue of his
employment by the Company are and will remain the property of the Company. Upon
termination of his employment with the Company, Employee shall immediately return to
the Company all such items in his possession and all copies of such items.
6. Equitable Remedies.
(a) Employee acknowledges and agrees that the agreements and covenants set forth in
Sections 5(a), (b), (c), (d) and (e) are reasonable and necessary for the protection of the
Company’s business interests, that irreparable injury will result to the Company if Employee
breaches any of the terms of said covenants, and that in the event of Employee’s actual or
threatened breach of any such covenants, the Company will have no adequate remedy at law.
Employee accordingly agrees that, in the event of any actual or threatened breach by him of
any of said covenants, the Company will be entitled to immediate injunctive and other
equitable relief, without bond and without the necessity of showing actual monetary damages.
Nothing in this Section 6 will be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach, including the recovery
of any damages that it is able to prove. Employee agrees that notwithstanding the
arbitration provision in Section 11, the Company may apply to a court of competent
jurisdiction, in accordance with Section 11(c) of this Agreement, to obtain the equitable
relief referenced in this Section 6.
(b) Each of the covenants in Sections 5(a), (b), (c), (d) and (e) will be construed as
independent of any other covenants or other provisions of this Agreement.
(c) In the event of any judicial determination that any of the covenants in Sections
5(a), (b), (c), (d), and (e) are not fully enforceable, it is the intention and desire of the
parties that the court treat said covenants as having been modified to the extent deemed
necessary by the court to render them reasonable and enforceable, and that the court enforce
them to such extent.
7. Assignment. This Agreement shall be binding upon and inure to the benefit of (a)
the heirs, executors and legal representatives of Employee upon Employee’s death and (b) any
successor of the Company. Any such successor of the Company shall be deemed substituted for the
Company under the terms of this Agreement for all purposes. As used herein, “successor” shall
include any person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly, acquires all or substantially all of the
assets or business of the Company. None of the rights of Employee to receive any form of
compensation payable pursuant to this Agreement shall be assignable or transferable except through
a testamentary
disposition or by the laws of descent. Any attempted assignment, transfer, conveyance or
other disposition (other than as aforesaid) of any interest in the rights of Employee to receive
any form of compensation hereunder shall be null and void.
8. Notices. All notices, requests, demands and other communications called for
hereunder shall be in writing and shall be deemed given if delivered personally, one (1) day after
mailing via Federal Express overnight or a similar overnight delivery service, or three (3) days
after being mailed by registered or certified mail, return receipt requested, prepaid and addressed
to the parties or their successors in interest at the addresses listed above, or at such other
addresses as the parties may designate by written notice in the manner aforesaid.
9. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision.
10. Entire Agreement. This Agreement represent the entire agreement and understanding
between the Company and Employee concerning Employee’s employment relationship with the Company,
and supersede in their entirety any and all prior agreements and understandings concerning
Employee’s employment relationship with the Company.
11. Resolution of Disputes Regarding Employment.
(a) The Parties agree to submit any dispute or controversy arising out of, relating to,
or in connection with this Agreement, or the interpretation, validity, construction,
performance, breach, or termination thereof, to mediation. The Parties shall mutually select
the mediator and shall equally pay for the costs of the mediator.
(b) If and only if a mediation is unsuccessful, and the dispute or controversy is not
resolved within 30 days after a mediation, either party may submit the matter to binding
arbitration, to the extent permitted by law, to be held in or near San Jose, California in
accordance with the National Rules for the Resolution of Employment Disputes then in effect
of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions
or other relief in such dispute or controversy. The decision of the arbitrator shall be
final, conclusive and binding on the parties to the arbitration. Judgment may be entered on
the arbitrator’s decision in any court having jurisdiction. The arbitrator may award the
prevailing party in any such attorneys’ fees and costs incurred in connection therewith.
(c) The arbitrator shall apply California law to the merits of any dispute or claim,
without reference to rules of conflict of law. Employee hereby expressly consents to the
personal jurisdiction of the state and federal courts located in Santa Xxxxx County,
California or the Northern District of California for any action or proceeding arising from
or relating to this Agreement and/or relating to any arbitration in which the Parties are
participants.
(d) Employee understands that nothing in this Section modifies Employee’s at-will
status. Either the Company or Employee can terminate the employment relationship at any
time, with or without cause, subject only to the restrictions set forth in Section 2 above.
(e) Employee has read and understands Section 11, which discusses arbitration. Employee
understands that by signing this agreement, employee agrees to submit any future claims
arising out of, relating to, or in connection with this agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof to binding arbitration to
the extent permitted by law, and that this arbitration clause constitutes a waiver of
employee’s right to a jury trial and relates to the resolution of all disputes relating to
all aspects of the employer/employee relationship, including but not limited to, the
following claims:
(i) Any and all claims for wrongful discharge of employment; breach of
contract, both express and implied; breach of the covenant of good faith and fair
dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage; and
defamation;
(ii) Any and all claims for violation of any federal, state or municipal
statute, including, but not limited to the California Fair Employment and Housing
Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of
1967, the Americans with Disabilities Act of 1990, and the Fair Labor Standards
Act;
(iii) Any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination.
(f) The Parties may apply to any court of competent jurisdiction for a temporary
restraining order, preliminary injunction, or other interim or conservatory relief, as
necessary, without breach of this arbitration agreement and without abridgment of the powers
of the arbitrator.
12. No Oral Modification, Cancellation or Discharge. This Agreement may only be
amended, canceled or discharged in writing signed by Employee and the Company.
13. Governing Law. This Agreement shall be governed by the internal substantive laws,
but not the choice of law rules, of the State of California.
14. Acknowledgment. Employee acknowledges that he has had the opportunity to discuss
this matter with and obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the respective dates set
forth below.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY BOTH PARTIES.
| COMPANY: | ||||||
| TRAVELZOO INC. | ||||||
| By: | ||||||
| Title: | ||||||
| Date: | ||||||
| EMPLOYEE: | ||||||
| Xxxxx Xxx | ||||||
| Date: | ||||||
