EXHIBIT 10.34
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT, dated as of the 16th day of
September, 1999 (the "Agreement"), by and between 800 TRAVEL SYSTEMS, INC., a
Florida corporation, (the "Company") with its principle corporate office located
at 0000 Xxxx Xxxxxxx, Xxxxx, Xxxxxxx 00000, and XXXXXX X. XXXXXX ("Employee")
residing at 000 000xx Xxxxxx Xxxx, Xxxxxxxxx Xxxxxx, XX 00000.
WHEREAS, the Company is presently engaged in the business of
providing travel related services, primarily air transportation reservation
services;
WHEREAS, the Employee has had many years of experience as a
senior management employee and has the experience and skills to serve as the
Chief Financial Officer of the Company;
WHEREAS, the Company wishes to assure itself of the continued
services of Employee for the period provided in this Agreement and the Employee
is willing to serve in the employ of the Company for such period upon the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties, intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT
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The Company hereby agrees to continue to employ the Employee
upon the terms and conditions herein contained, and the Employee hereby agrees
to accept such employment for the term described below. The Employee agrees to
serve as the Company's Chief Financial Officer, and to perform the duties and
functions customarily performed by the Chief Financial Officer during the term
of this Agreement. In such capacity, the Employee shall report only to the
Company's Chief Executive Officer, President and Board of Directors ("Board"),
and shall have such powers, responsibilities and duties consistent with and
customarily assigned to the position of Chief Financial Officer as the Chief
Executive Officer and Board may assign to him.
Throughout the term of this Agreement, the Employee shall
devote his best efforts and substantially all of his business time and services
to the business and affairs of the Company. Neither the principle place of
business of the Company nor Employee will be relocated outside of the
Hillsborough and Pinellas County metropolitan area.
2. TERM OF AGREEMENT
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The two (2) year initial term of Employee's employment under
this Agreement shall commence as of September 8, 1999 (the "Effective Date").
After the expiration of such initial two (2) year employment period, the term of
the Employee's employment hereunder shall automatically be extended without
further action by the parties for successive one (1) year renewal terms,
provided that if either party gives the other party at least thirty (30) days
advance written notice of his or its intention to not renew this Agreement for
an additional term, the Agreement shall terminate upon the expiration of the
current term.
Notwithstanding the foregoing, the Company shall be entitled
to terminate this Agreement immediately, subject to a continuing obligation to
make any payments required under Section 5 below, if the Employee (i) becomes
disabled as described in Section 5(b), (ii) is terminated for Cause, as defined
in Section 5(c), or (iii) voluntarily terminates his employment before the
current term of this Agreement expires, as described in Section 5(d).
3. SALARY AND BONUS
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(a) SALARY. The Employee shall receive a base salary of
not less than $86,000.00 per annum during the First Contract Year. As used in
this Agreement, the "First Contract Year" means the period commencing on the
Effective Date and ending on September 8, 2000; the "Second Contract Year" means
the one year period immediately following the First Contract Year. In the Second
Contract Year the Employee shall be paid a base salary computed by the following
formula: ($86,000 + ($86,000 multiplied by the percentage increase in the
consumer price index + 5%)). For example if the consumer price index increased
5%, Employee's salary would be $94,600 computed as ($86,000 + ($86,000 x 10%)).
This base salary shall be payable in installments consistent with the Company's
normal payroll schedule.
(b) BONUS. The Employee shall also be eligible to receive
an annual incentive bonus from the Company for each fiscal year of the Company
during the term of this Agreement, in an amount up to 20 percent of his annual
base salary in effect on the last day of the year, with the actual amount of
such bonus to be determined by the Compensation Committee of the Company's
Board.
4. ADDITIONAL COMPENSATION AND BENEFITS
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The Employee shall receive the following additional
compensation and welfare and fringe benefits:
(a) STOCK OPTIONS. The Employee shall be granted common
stock options with respect to 10,000 shares of common stock of the Company or
its successor pursuant to the terms of the Company's Stock Option Plan with
options to vest in two installments with the first installment vesting in six
months from the Effective Date and with the second installment vesting within
fifteen (15) months from the Effective Date, provided, however, the options
granted shall vest so long as Employee is employed by the Company. The first
installment shall be for 5,000 options and the second installment shall be for
5,000 options. The options may be exercised in accordance with the Stock Option
Plan, but no later than 10 years from the date hereof, at which time such
options shall lapse. The exercise price of the stock options shall be $5.00 per
share. During the remaining term of the Agreement, any additional stock option
awards under a proposed Stock Option Plan shall be at the discretion of the
Compensation Committee of the Company's Board of Directors.
(b) MEDICAL INSURANCE. The Company shall provide the
Employee with the health insurance coverage plan offered to employees in the
Company's Employee Manual.
(c) EDUCATIONAL LEAVE AND EXPENSES. Company shall
reimburse the Employee for expenses incurred by the Employee while attending
continuing education courses in accordance with the Company's Employee Manual.
(d) VACATION. The Employee shall be entitled to up to
three (3) weeks of vacation during his first year of employment and three (3)
weeks for each year thereafter during the term of this Agreement.
(e) BUSINESS EXPENSES. The Company shall reimburse the
Employee for all reasonable expenses he incurs in promoting the Company's
business, including expenses for travel, entertainment of business associates
cellular telephone and similar items, upon presentation by the Employee from
time to time of an itemized account of such expenditures.
(f) CAR ALLOWANCE. Employee shall be entitled to a car
allowance of $250.00 per month payable by the Company to cover Employee's
reasonable travel expenses. In addition, Employee shall be entitled to
reimbursement from the Company for his annual auto insurance premium not to
exceed $2,000 per year.
(g) EQUITY PERFORMANCE BONUSES. Employee shall be
eligible to receive performance bonuses at the discretion of the Compensation
Committee in the form of grants of Company common stock.
In addition to the benefits provided pursuant to the preceding
paragraphs of this Section 4, the Employee shall be eligible to participate in
such other executive compensation and retirement plans of the Company as are
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applicable generally to other officers, and in such other non-compensatory
welfare benefit plans, programs, practices and policies of the Company as are or
may be generally applicable in the future to other key employees.
5. PAYMENTS UPON TERMINATION
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(a) INVOLUNTARY TERMINATION. If the Employee's employment
is involuntarily terminated by the Company during the term of this Agreement as
a result of Employee's death or pursuant to paragraphs (b) or (c) hereof,
Employee shall be entitled to receive his base salary accrued through the date
of such involuntary termination. The Employee shall also receive any
nonforfeitable benefits already earned and payable to him under the terms of any
deferred compensation, incentive or other benefit plan maintained by the
Company, payable in accordance with the terms of the applicable plan.
If the termination is not for death, disability as described
in paragraph (b), for Cause as described in paragraph (c) or a voluntary
termination by the Employee as described in paragraph (d), the Company shall be
obligated to make a series of twelve monthly payments to the Employee (the
"Severance Payments"), each monthly payment to be equal to one-twelfth (1/12th)
of the Employee's annual base salary, as in effect on the date of such
termination, which Severance Payments shall be made notwithstanding that
Employee obtains a replacement position with any new employer (including a
position as an officer, employee, consultant, or agent, or self-employment as a
partner or sole proprietor).
(b) DISABILITY. The Company shall be entitled to
terminate this Agreement, if the Board determines that the Employee has been
unable to attend to his duties for at least ninety (90) days because of a
medically diagnosable physical or mental condition, and has received a written
opinion from a physician acceptable to the Board that such condition prevents
the Employee from resuming full performance of his duties and is likely to
continue for an indefinite period. Upon such termination, the Company shall pay
to Employee a monthly disability benefit equal to one-twenty-fourth (1/24th) of
his current annual base salary at the time he became permanently disabled.
Payment of such disability benefit shall commence on the last day of the month
following the date of the termination by reason of permanent disability and
cease with the earliest of (i) the month in which the Employee returns to active
employment, either with the Company or otherwise, (ii) the end of the initial
term of this Agreement, or the current renewal term, as the case may be, or
(iii) the sixth month after the date of the termination. Any amounts payable
under this Section 5(b) shall be reduced by any amounts paid to the Employee
under any long-term disability plan or other disability program or insurance
policies maintained or provided by the Company. The Employee is unaware of any
existing medical factors for which he has been diagnosed which are likely to
create an event of disability during this term.
(c) TERMINATION FOR CAUSE. If the Employee's employment
is terminated by the Company for Cause, the amount the Employee shall be
entitled to receive from the Company shall be limited to his base salary accrued
through the date of termination, and any nonforfeitable benefits already earned
and payable to the Employee under the terms of deferred compensation or
incentive plans maintained by the Company.
For purposes of this Agreement, the term "Cause" shall be limited to (i) any
action by the Employee involving disloyalty to the Company, such as
embezzlement, fraud, misappropriation of corporate assets or a breach of the
covenants set forth in Sections 9 and 10 below; or (ii) the Employee being
indicted or otherwise charged with a felony; or (iii) the Employee being
convicted of any lesser crime or offense committed in connection with the
performance of his duties hereunder or involving moral turpitude; (iv) the
intentional and willful failure by the Employee to substantially perform his
duties hereunder as directed by the Chief Executive Officer (other than any such
failure resulting from the Employee's incapacity due to physical or mental
disability); (v) acts with respect to the property of the Company which
constitute larceny, fraud, theft, embezzlement or the acceptance of a bribe or
kickback; (vi) willful misrepresentation of a material matter to the Board; or
(vii) reckless disregard of his responsibilities under this Agreement.
(d) VOLUNTARY TERMINATION BY THE EMPLOYEE. If the
Employee resigns or otherwise voluntarily terminates his employment before the
end of the current term of this Agreement upon sixty (60) days written notice to
the Company, the amount the Employee shall be entitled to receive from the
Company shall be limited to his base salary accrued through the date of
termination, and any nonforfeitable benefits already earned and payable to the
Employee under the terms of any deferred compensation or incentive plans of the
Company.
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6. EFFECT OF CHANGE IN CORPORATE CONTROL
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(a) In the event of a Change in Corporate Control as defined
below, the vesting of any stock options or other awards granted to the Employee
under the terms of any Stock Option Plan shall become immediately vested in full
and, in the case of stock options, exercisable in full.
In addition, if, at any time during the period of twelve (12)
consecutive months following the occurrence of a Change in Corporate Control as
defined below, the Employee is involuntarily terminated (other than for Cause,
death or disability) by the Company, the Employee shall be entitled to the
Severance Payments described in Section 5(a) above plus annual bonus paid to the
Employee with respect to the last fiscal year of the Company ending prior to the
Change in Corporate Control with the condition that should the Company structure
a standard Change in Corporate Control plan for the executive staff of the
Company, Employee shall be granted the same terms and conditions of that plan
which in no event shall be of lesser value to Employee than the terms and
conditions outlined in this immediate paragraph.
(b) For purposes of this Agreement, a "Change in Corporate
Control" shall include any of the following events:
(1) The acquisition in one or more transactions of
more than fifty percent of the Company's outstanding Common Stock by
any corporation, or other person or group (within the meaning of
Section 14(d)(3) of the Securities Exchange Act of 1934, as amended);
(2) Any merger or consolidation of the Company into
or with another corporation in which the Company is not the surviving
entity, or any transfer or sale of substantially all of the assets of
the Company or any merger or consolidation of the Company into or with
another corporation in which the Company is the surviving entity and,
in connection with such merger or consolidation, a majority of the
outstanding shares of Common Stock shall be changed into or exchanged
for other stock or securities of any other person, or cash, or any
other property.
(3) Any election of persons to the Board of Directors
which causes a majority of the Board of Directors to consist of persons
other than persons who are associated with the Company via contract as
of the date of this Agreement .
(4) Any person, group of persons or entity, purchases
at least fifty percent (50%) of the Company's Common Stock.
(c) Notwithstanding anything else in this Agreement, the
amount of severance compensation payable to the Employee as a result of a Change
in Corporate Control under this Section 6, or otherwise, shall be limited to the
maximum amount the Company would be entitled to deduct pursuant to Section 280G
of the Internal Revenue Code of 1986, as amended.
7. DEATH
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This Agreement shall automatically terminate upon Employee's
death. Upon termination of this Agreement due to Employee's death, any shares
and options granted to Employee shall be deemed vested and able to be exercised
by Employee's estate. If the Employee dies during the term of this Agreement,
the Company shall pay to the beneficiary designated by the Employee in
accordance with the terms of any applicable plan or plans of the Company's may
have instituted.
8. WITHHOLDING
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The Company shall, to the extent permitted by law, have the
right to withhold and deduct from any payment hereunder any federal, state or
local taxes of any kind required by law to be withheld with respect to any such
payment.
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9. PROTECTION OF CONFIDENTIAL INFORMATION
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The Employee agrees that he will keep all confidential and
proprietary information of the Company or relating to its business (including,
but not limited to, information regarding the Company's customers, pricing
policies, methods of operation, proprietary computer programs and trade secrets)
confidential, and that he will not (except with the Company's prior written
consent), while in the employ of the Company or thereafter, disclose any such
confidential information to any person, firm, corporation, association or other
entity, other than in furtherance of his duties hereunder, and then only to
those with a "need to know." The Employee shall not make use of any such
confidential information for his own purposes or for the benefit of any person,
firm, corporation, association or other entity (except the Company) under any
circumstances during or after the term of his employment. The foregoing shall
not apply to any information which is already in the public domain, or is
generally disclosed by the Company or is otherwise in the public domain at the
time of disclosure.
The Employee recognizes that because his work for the Company
will bring him into contact with confidential and proprietary information of the
Company, the restrictions of this Section 9 are required for the reasonable
protection of the Company and its investments and for the Company's reliance on
and confidence in the Employee.
10. NON-COMPETITION; CONFIDENTIALITY
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(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 one year 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 one year after the termination of his employment hereunder,
employ or attempt to employ or assist anyone 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 one year 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 in the same industry as
that engaged in by the Company from time to time. By way of example and not by
way of limitation, if the Company is then engaged in the business of booking
travel reservations through a centralized telephone call center, Employee will
not be deemed to be engaged in a Competing Business solely by virtue of becoming
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employed in a business that sells general merchandise through a centralized
telephone call center. 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
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 known 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.
11. INJUNCTIVE RELIEF
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The Employee acknowledges and agrees that it would be
difficult to fully compensate the Company for damages resulting from the breach
or threatened breach of the covenants set forth in Sections 9 and 10 of this
Agreement and accordingly agrees that the Company shall be entitled to temporary
and injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, to enforce such provisions in any action
or proceeding instituted in the United States District Court for the Western
District of Florida or in any court in the State of Florida having subject
matter jurisdiction. This provision with respect to injunctive relief shall not,
however, diminish the Company's right to claim and recover damages. In addition,
any action or proceeding brought to enforce any provision of this Paragraph 11,
the prevailing party shall be entitled to recover from the non-prevailing party
the former's reasonable costs of enforcement, including legal fees.
It is expressly understood and agreed that although the
parties consider the restrictions contained in this Agreement to be reasonable,
if a court determines that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction on the activities of
the Employee, no such provision of this Agreement shall be rendered void but
shall be deemed amended to apply as to such maximum time and territory and to
such extent as such court may judicially determine or indicate to be reasonable.
12. MASTRINI DEPARTURE
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Notwithstanding anything herein to the contrary, if at any
time during the term of this Agreement, Xxxx Xxxxxxxx shall cease to be employed
by the Company as its Chief Executive Officer, Employee may through notice
within ninety (90) days thereof, terminate this Agreement. Any such termination
by Employee pursuant to this paragraph shall be deemed an involuntary
termination for which the Severance Payments described in Section 5(a) herein
shall be paid to Employee.
13. SEPARABILITY
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If any provision of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
14. ASSIGNMENT
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This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of the Employee and the assigns and successors
of the Company, but neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Employee.
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15. ENTIRE AGREEMENT
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This Agreement represents the entire agreement of the parties
and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Employee. The Agreement may be
amended at any time by mutual written agreement of the parties hereto.
16. GOVERNING LAW
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This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of Florida, other than the conflict of
laws provisions of such laws.
17. ARBITRATION
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Subject to the Company's right to seek injunctive relief for
any violations of the covenants set forth in Sections 9 and 10 of this
Agreement, any controversy or claim arising out of this Agreement, or the breach
thereof, other than a claim for injunctive relief shall be settled by binding
arbitration in accordance with the Rules of the American Arbitration Association
which shall occur in Tampa, Florida or at such other location as may be mutually
agreed to by the parties.
18. NOTICES
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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 Company has caused this Agreement to
be duly executed, and the Employee has hereunto set his hand, as of the day and
year first above written.
ATTEST: 800 TRAVEL SYSTEMS, INC.
By:
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Secretary Xxxx Xxxxxxxx, Chief Executive Officer
WITNESS: EXECUTIVE:
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Xxxxxx X. Xxxxxx
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