EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of October 1, 1999, between GLOBAL
TECHNOLOGIES, LTD. (f.k.a. Interactive Flight Technologies, Inc.) ("Company")
and Xxxxx X. Xxxxx ("Executive").
W I T N E S S E T H:
Company wishes to employ Executive and Executive wishes to enter into the
employ of Company on the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Executive agree as follows:
1. Employment. Company hereby employs Executive and Executive hereby
accepts employment by Company for the period and upon the terms and conditions
contained in this Agreement.
2. Office and Duties.
(a) The Executive is engaged hereunder as the Company's Chairman of the
Board and Chief Executive Officer and agrees to perform the duties and services
incident to that position. The Executive will report to the Board of Directors
of Company on a regular basis.
(b) Throughout the term of this Agreement, Executive shall devote
substantially all of his working time, energy, skill and best efforts to the
performance of his duties hereunder in a manner which will faithfully and
diligently further the business and interests of Company. The foregoing shall
not be construed, however, as preventing the Executive from investing his assets
in such form or manner as will not require services on the part of the Executive
in the operations of the business in which such investment is made that would
materially interfere with his obligations hereunder, and provided such business
is not in competition with the company or, if in competition, such business has
a class of securities registered under the Securities Exchange Act of 1934 and
the interest of Executive therein is solely that of an investor owning not more
than 5% of any class of the outstanding equity securities of such business.
3. Term. This Agreement shall be for a term of thirty-six (36) months,
commencing as of October 1, 1999, and ending on September 30, 2002, unless
sooner terminated as hereinafter provided. This Agreement shall terminate at the
end of the original term, provided, however, that the parties hereto shall, at
least sixty (60) days prior to the end of the term hereof, use their best
efforts to determine whether the Agreement will be renewed or negotiated.
4. Compensation.
(a) In recognition and consideration of the contributions that Executive
has made to the Company during the period from September 15, 1998 to September
30, 1999, during which period of time Executive received no compensation from
the Company, Executive shall be paid Two Hundred and Fifty Thousand Dollars
($250,000). For all services to be rendered by
Executive to Company pursuant to this Agreement, Executive shall receive an
annual base salary of Two Hundred and Fifty Thousand Dollars ($250,000), payable
in accordance with Company's regular payroll practices in effect from time to
time.
(b) In addition to Executive's base salary, Company shall pay to
Executive, on April 30 and October 31 for the preceding six-month periods ending
on March 31 and September 30 of each year during the term of this Agreement,
such bonuses or other additional compensation as the Board of Directors may
determine based upon the achievement of the goals assigned to Executive as set
forth in a Board-approved Business Plan or as may otherwise be determined or
agreed to by the Board. Subject to the achievement of the assigned goals, the
total and aggregate bonuses to be paid to Executive in any year during the term
of this Agreement should not be less than twenty percent (20%) of Executive's
annual salary.
(c) Throughout the term of this Agreement and as long as they are kept
in force by Company, Executive shall be entitled to participate in and receive
the benefits of any profit sharing or retirement plans and any health, life,
accident or disability insurance plans or programs made available to other
similarly situated executives of Company. Specifically, Executive shall be
provided family medical and dental coverage at Company's expense. Executive
shall be entitled to four (4) weeks paid vacation during each year of the term
of this Agreement. Company shall pay Executive for any unused vacation at
December 31st of each year.
(d) Company will provide Executive with an automobile allowance of $1000
per month and Company will reimburse Executive for all reasonable expenses
incurred by Executive in connection with the performance of Executive's duties
hereunder, including mobile phone and club memberships, upon receipt of vouchers
therefor and in accordance with Company's regular reimbursement procedures and
practices in effect from time to time.
(e) The Company shall grant to Executive options to purchase up to an
aggregate of One Million (1,000,000) shares of the Company's common stock, par
value $.01 per share ("Common Stock"). One quarter of the options shall vest as
of the date hereof. Another quarter of the options will vest, subject to certain
conditions, as follows: eighty-three thousand three hundred thirty-four (83,334)
on October 8, 2000; eighty-three thousand three hundred thirty-three (83,333) on
October 8, 2001; and eighty-three thousand three hundred thirty-three (83,333)
on October 8, 2002. The balance of the options shall vest, subject to the
achievement of certain performance milestones and certain other conditions, as
follows: one hundred sixty-six thousand, six hundred sixty-seven (166,667) on
October 8, 2000; one hundred sixty-six thousand, six hundred sixty-six (166,666)
on October 8, 2001; and one hundred sixty-six thousand, six hundred sixty-six
(166,666) on October 8, 2002. The exercise price of the options shall be equal
to the closing sale price (or closing bid if no sales were reported) of a share
of Common Stock as reported by the Nasdaq National Market on October 7, 1999 (or
the next trading day in the event there is no trading on such date). The options
shall be for a term of ten (10) years from the date of the grant of such
options.
5. Disability. If Executive becomes unable to perform his duties hereunder
due to partial or total disability or incapacity resulting from a mental or
physical illness, injury or any other cause ("Disability"), Company will
continue the payment of Executive's base salary at its then current rate for a
period of twelve (12) weeks following the date Executive is first unable to
perform his duties due to such disability or incapacity. Thereafter, Company
shall have no obligation for
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base salary or other compensation payments to Executive during the continuance
of such disability or incapacity, except as provided in the Company's disability
policy, if any.
6. Death. If Executive dies, all payments hereunder shall cease at the end
of the month in which Executive's death shall occur and Company shall have no
further obligations or liabilities hereunder to Executive's estate or legal
representative or otherwise.
7. Termination of Company's Business. If (i) Company shall discontinue the
business operation in which Executive is employed, Company may immediately
terminate Executive's employment upon written notice, or (ii) there is a Change
in Control (as hereinafter defined), and as a result of such Change in Control,
the Executive is terminated without Cause (as defined in Paragraph 8 below) or
leaves for Good Reason (as hereinafter defined), then, on the occurrence of any
of such events, Company shall have no further obligations or liabilities
hereunder to Executive, except Company shall (A) pay Executive an amount equal
to two times the remaining base salary due the Executive for the then current
term, but in no event shall Executive receive less than his base salary for one
year, to be paid in accordance with the regular payroll practices of Company;
and (B) continue to provide Executive with family medical and dental coverage
for a period of 12 months. In addition, in the event of termination of the
Executive pursuant to this Paragraph, the restrictions of subparagraph 11(a)
shall terminate.
(a) Change in Control. The term "Change in Control" shall mean a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A issued under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") as in effect as of the date hereof, or
if Item 6(e) is no longer in effect, any subsequent regulation issued under the
Exchange Act for a similar purpose, whether or not the Company is subject to
such reporting requirements; provided that, without limitation, such a change in
control shall be deemed to have occurred if:
(i) any "person" is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company's
then outstanding securities;
(ii) during any period of two consecutive years (not including any
period prior to the date of the Agreement), individuals who at the beginning of
such period constitute the Board of Directors, and any new director, whose
election by the Board or nomination or election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for elections was previously approved, cease for any
reason to constitute a majority of the Board; or
(iii) the business of the Company is disposed of by the Company
pursuant to a liquidation, sale of assets of the Company, or otherwise.
(b) Good Reason. "Good Reason" shall mean the occurrence after a Change
in Control of any of the following events without the Executive's express
written consent:
(i) any change in the Executive's title, authorities,
responsibilities (including reporting responsibilities), which represent a
demotion from his status, title, position or responsibilities (including
reporting responsibilities) as in effect immediately prior to the Change in
Control; the assignment to him of any duty or work responsibilities which, in
his reasonable
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judgment, are inconsistent with such status, title, position or work
responsibilities; or any removal of the Executive from or failure to appoint or
reelect him to any of such positions, except in connection with the termination
of his employment for Disability, retirement or Cause, as a result of the
Executive's death or by him other than for Good Reason;
(ii) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased from time
to time; or
(iii) the failure of the Company to obtain a satisfactory agreement
from any successor or assign of the Company to assume and agree to perform this
Agreement.
8. Termination For Cause. Company may discharge the Executive and thereby
terminate his employment hereunder for the following reasons (for "Cause"):
(a) habitual intoxication;
(b) habitual illegal drug use or drug addiction;
(c) conviction of a felony, materially adversely affecting Company where
such conviction significantly impairs the Executive's ability to perform his
duties hereunder;
(d) while acting in his capacity as Executive of Company, knowingly
engaging in any unlawful activity which could materially adversely affect the
Company;
(e) gross insubordination, gross negligence, or willful and knowing
violation of any expressed direction or regulation established by Company which
is materially injurious to the business or reputation of Company;
(f) misappropriation of corporate funds or other acts of dishonesty;
(g) the Executive's material breach of this Agreement in any other
respect.
In the event that Company discharges the executive for Cause, Company
shall pay to Executive the portion, if any, of the Executive's base salary for
the period up to the date of termination which remains unpaid. The Company shall
have no further obligation or liability under this Agreement.
9. Termination Without Cause. In the event Company terminates this
Agreement without Cause at any time, the Company's sole liability for
compensation to Executive shall be to pay the Executive two times the remaining
balance of the base salary due the Executive for the remainder of the then
current term to be paid in accordance with the regular payroll practices of
Company, and to provide Executive with family medical and dental coverage for
the same period. In addition, in the event of termination of the Executive
pursuant to this Paragraph, the restrictions of subparagraph 11(a) shall
terminate.
10. Company Property. All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, customer sales analyses, invoices, price lists or
information, samples, budgets, business plans, strategic plans, financing
applications, reports, memoranda, correspondence, financial statements, and any
other materials or data of any kind furnished to Executive by Company or
developed by Executive on
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behalf of Company or at Company's direction or for Company's use or otherwise in
connection with Executive's employment hereunder, are and shall remain the sole
and confidential property of Company; if Company requests the return of any such
materials at any time during or at or after the termination of Executive's
employment, Executive shall immediately deliver the same to Company.
11. Noncompetition, Trade Secrets, Etc.
(a) During the term of this Agreement and for a period of one (1) year
after the termination of his employment with Company for any reason whatsoever,
Executive shall not directly or indirectly induce or attempt to influence any
executive of Company to terminate his or her employment with Company and shall
not engage in (as a principal, partner, director, officer, agent, executive,
consultant or otherwise) or be financially interested in any business operating
within the geographical area described in Exhibit "A", attached hereto, which is
involved in business activities which are the same as, similar to, or in
competition with business activities carried on by Company, or being definitely
planned by Company, at the time of the termination of Executive's employment.
However, nothing contained in this Paragraph 11 shall prevent Executive from
holding for investment no more than five percent (5%) of any class of equity
securities of a company whose securities are traded on a national securities
exchange or on the NASDAQ System.
(b) During the term of this Agreement and at all times thereafter,
Executive shall not use for his personal benefit, or disclose, communicate or
divulge to, or use for the direct or indirect benefit of any person, firm,
association or company other than the Company, any material referred to in
Paragraph 10 above or any information regarding the business methods, business
policies, procedures, techniques, research or development projects or results,
trade secrets, or other knowledge or processes of or developed by the Company or
any names and addresses of customers or clients, any data on or relating to
past, present or prospective customers or clients, or any other confidential
information relating to or dealing with the business operations or activities of
Company, made known to Executive or learned or acquired by Executive while in
the employ of Company.
(c) Any and all reports, plans, budgets, writings, inventions,
improvements, processes, procedures and/or techniques which Executive may make,
conceive, discover or develop, either solely or jointly with any other person or
persons, at any time during the term of this Agreement, whether during working
hours or at any other time and whether at the request or upon the suggestion of
the Company or otherwise, which relate to or are useful in connection with any
business now or hereafter carried on or contemplated by the Company, including
developments or expansions of its present fields of operations, shall be the
sole and exclusive property of Company. Executive shall make full disclosure to
Company of all such reports, plans, budgets, writings, inventions, improvements,
processes, procedures and techniques, and shall do everything reasonably
necessary or desirable to vest the absolute title thereto in Company. Executive
shall write and prepare all specifications and procedures regarding such
inventions, improvements, processes, procedures and techniques and otherwise aid
and assist Company so that Company can prepare and present applications for
copyright or Letters Patent therefor and can secure such copyright or Letters
Patent wherever possible, as well as reissues, renewals, and extensions thereof,
and can obtain the record title to such copyright or patents so that Company
shall be the sole and absolute owner thereof in all countries in which it may
desire to have copyright or patent protection. Executive shall not be entitled
to any additional or special compensation or reimbursement regarding any and all
such writings, inventions, improvements, processes, procedures and techniques.
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(d) Executive acknowledges that the restrictions contained in the
foregoing subparagraphs (a), (b) and (c), in view of the nature of the business
in which Company is engaged, are reasonable and necessary in order to protect
the legitimate interests of Company, and that any violation thereof would result
in irreparable injuries to Company, and Executive therefore acknowledges that,
in the event of his violation of any of these restrictions, Company shall be
entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief as well as damages and an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which Company may be entitled.
(e) If the period of time or the area specified in subparagraph (a)
above should be adjudged unreasonable in any proceeding, then the period of time
shall be reduced by such amount of time or the area shall be reduced by the
elimination of such portion thereof or both so that such restrictions may be
enforced in such area and for such time as is adjudged to be reasonable. If
Executive violates any of the restrictions contained in such subparagraph (a),
the restrictive period shall not run in favor of Executive from the time of the
commencement of any such violation until such time as such violation shall be
cured by Executive to the satisfaction of Company.
12. Prior Agreements. Executive represents to Company (a) that there are no
restrictions, agreements or understandings whatsoever to which Executive is a
party which would prevent or make unlawful his execution of this Agreement or
his employment hereunder, (b) that his execution of this Agreement and his
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which he is a party or by which he is bound
and (c) that he is free and able to execute this Agreement and to enter into
employment by Company.
13. Indemnification. Company shall maintain a Directors and Officers Errors
and Omission Policy with a minimum coverage of Fifteen Million Dollars
($15,000,000). Any deductible and all other costs and expenses which may be
incurred by Executive as a result of his acting in his capacity as an Officer of
the Company shall be paid by Company.
14. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
(b) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the State of Delaware,
notwithstanding any conflict-of-laws doctrines of any jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
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(c) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by courier service such as FedEx or by other messenger) against
receipt or upon actual receipt of registered or certified mail, postage prepaid,
return receipt requested, addressed as set forth below:
(i) If to Company:
Global Technologies, Ltd.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: President
(ii) If to Executive:
Xxxxx X. Xxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
In addition, notice by mail shall be by air mail if posted outside of the
continental United States. Either party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this subparagraph for the giving of
notice.
(d) Exhibits. All Exhibits attached hereto are hereby incorporated by
reference into, and made a part of, this Agreement.
(e) Binding Nature of Agreement; No Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns, except that no party
may assign or transfer its rights nor delegate its obligations under this
Agreement without the prior written consent of the other parties hereto.
(f) Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
(g) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(h) Entire Agreement. This Agreement (together with the Stock Option
Grant Agreement between the Company and Executive dated October 8, 1999)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements
and understandings, inducements or conditions, express
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or implied, oral or written, except as herein contained. The express terms
hereof control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
(i) Paragraph Headings. The Paragraph and subparagraph headings in this
Agreement have been inserted for convenience of reference only; they form no
part of this Agreement and shall not affect its interpretation.
(j) Gender, Etc. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
(k) Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
Holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or Holiday, then the final day shall be deemed to be the next
day which is not a Saturday, Sunday or Holiday. For purposes of this Agreement,
the term "Holiday" shall mean a day, other than a Saturday or Sunday, on which
national banks with branches in the Commonwealth of Pennsylvania are or may
elect to be closed.
(l) Expenses of the Parties. Company shall be responsible for up to
$4,000 in legal expenses incurred in the negotiation and preparation of this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered in Philadelphia, Pennsylvania, as of the date first above written.
GLOBAL TECHNOLOGIES, LTD.
By: Xxxxx X. Xxx
-------------------------------
XXXXX X. XXX, President and COO
EXECUTIVE:
Xxxxx X. Xxxxx
-----------------------------------
XXXXX X. XXXXX
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EXHIBIT "A"
Under Paragraph 11, Noncompetition, Trade Secrets, Etc., the geographic
area shall be as follows:
Worldwide
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