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EXHIBIT 10.45
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of October 31, 1994 between GALILEO
INTERNATIONAL PARTNERSHIP, a partnership organized under the laws of the State
of Delaware and doing business at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxx (the "Company"), and XXXXX X. XXXXXXX, an individual residing at 00000
Xxxxxxxx Xxxx Xxxx, Xx. Xxxxx, Xxxxxxxx ("Executive").
W I T N E S S E T H :
WHEREAS, the Company is a partnership of major international airlines
and is engaged in the travel services and computer reservation systems business
in the United States, the United Kingdom and elsewhere in the world; and
WHEREAS, the Company wishes to employ Executive and Executive wishes to
be so employed;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. EMPLOYMENT; POSITION AND RESPONSIBILITIES. The Company agrees to
employ Executive, and Executive agrees to serve, as President and Chief
Executive Officer of the Company. In such capacity, Executive shall have
authority and responsibility, subject to control and direction by the Board of
Directors (the "Board"), to administer and manage the business of the Company.
Executive shall also serve as a non-voting member of the Board. Executive will
be located at the Rosemont, Illinois office of the Company or at such other
location as the Board may designate as the principal office of the Company.
Executive acknowledges that his employment hereunder will require substantial
travel.
2. OBLIGATIONS OF EXECUTIVE. During the Term of this Agreement (as
hereinafter defined) Executive agrees that he will devote substantially all of
his time, attention and energies to the business of Employer; that he will
exercise the highest degree of loyalty and conduct in the performance of his
duties, and that he will do nothing that xxxxx, directly or indirectly, the
business or reputation of the Company.
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3. COMPENSATION.
(a) Executive's salary during the Term of this Agreement (as
hereinafter defined) shall be at the rate of $420,000 per annum, commencing on
the date first above written. The Board will review Executive's salary on an
annual basis and increases will be at the discretion of the Board taking into
account Executive's individual job performance.
(b) Executive will participate, on a basis comparable to other
executives of the Company, in the Company's annual management incentive
compensation plan (the "MIP"), a copy of which has been furnished to Executive.
The terms of the MIP will apply to Executive except as otherwise provided by
this Agreement. Nothing in this Agreement shall prevent the Company from
changing the MIP or from reducing or terminating annual incentive compensation
payments thereunder altogether, provided that the changes, reductions or
terminations are applicable to executives of the Company generally.
(c) Executive will participate in the Company's long term incentive
plan (the "LTIP") when the pending revision of the LTIP is adopted by the Board
and becomes effective. For each of the LTIP vesting years (which may be two and
shall not be more than three), Executive will receive $150,000 payable at the
same time that payments under the MIP are made to executives of the Company for
the preceding year. Nothing in this Agreement shall prevent the Company from
changing the LTIP or from reducing or terminating long-term incentive
compensation payments thereunder, provided that the changes, reductions or
terminations are applicable to executives of the Company generally.
(d) Executive shall be entitled to paid annual vacation, personal
leave and holidays during each calendar year during his employment in
accordance with the policies of the Company. Executive will participate in
health, welfare (including disability) and defined benefit and contribution
retirement plans, including but not limited to the pension plan and 401(k)
savings plan, that are maintained by the Company on the same basis as such
benefits are generally available to employees of the Company in the United
States, and subject to the right of the Company to change, reduce or terminate
such plans or benefits in respect of employees generally.
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(e) Executive will be reimbursed for reasonable business, travel and
relocation expenses in accordance with the normal policies of the Company
including dues, fees and expenses associated with membership in professional,
business and civic organizations in which Executive's participation is in the
interest of the Company. The Company will also reimburse Executive for one club
membership (i.e., initial fees and dues); will provide Executive with an
airfare allowance of up to $21,000 per year based upon ID50 tickets on partner
airlines, and will provide to Executive a cellular telephone for business use
and a monthly car allowance based on a three year lease of a $45,000 automobile
(until the expiration of its lease in 1995, Executive's car will be the top of
the range Lexus currently under lease to the Company). The benefits and
payments described in this subparagraph shall not include an income tax
grossup, and Executive will be responsible for any tax on their value.
Executive's expenses will be accounted for and reimbursed through the Company's
normal expense reporting and approval process and his expense reports will also
be reviewed annually by the Board or a committee or designee of the Board.
4. TERMINATION. This Agreement shall extend for a Term commencing on
the date first above written and ending on a Termination Date which shall be 15
days after written notice to terminate it is given by the Company to the
Executive or by the Executive to the Company, provided that this Agreement may
be terminated effective immediately by the Company for Cause, by the Executive
for Good Reason as herein provided, in which event the date on which notice of
termination is given shall be the Termination Date.
(a) If Executive terminates his employment under this Agreement without
Good Reason, or if the Company terminates his employment for Cause, the Company
shall have no financial obligation to Executive other than to pay his base
salary through the Termination Date, and Executive's participation in employee
benefit plans of the Company shall cease as of such Termination Date. The
Company shall give Executive written notice of a termination for Cause.
(i) For purposes of this Agreement, "Cause" shall mean: (A) any act or
omission that constitutes a material breach by Executive of, or material
misrepresentation or omission under this Agreement; (B) the commission by
Executive of a dishonest, illegal or wrongful act (1) involving fraud,
misrepresentation or moral turpitude, (2) causing damage to the Company or
(3) involving potential damage to the business and reputation of the
Company; (C) Executive's willful and
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repeated absence from his employment; or (D) Executive's willful failure
or refusal to perform specific and reasonable directives of the Company;
or (E) material and prolonged deficiencies in Executive's performance of
his assigned duties and responsibilities. In respect of events described
in clauses (C), (D) and (E) above, the Company shall give Executive
notice, reasonable as to time, place and manner in the circumstances
(notwithstanding that such notice may not comply with Section 9), and an
opportunity to cure the absence, failure, refusal or disregard in
question, provided that such absence, failure, refusal or disregard is
reasonably susceptible of cure in the circumstances.
(ii) For purposes of this Agreement, "Good Reason" shall mean
the occurrence of any of the following events, provided Executive has
not given Cause for termination or become Disabled: (A) the Company
shall have defaulted in its obligation to pay compensation to Executive
when, as and if due within 10 business days of written notice to the
Company that such payment was not made when due, or (B) the Company
shall have failed or refused to appoint and maintain Executive in a job
having the responsibilities and authority as set forth in Section 1
hereof (except that assignment of Executive to different job duties
based on the Board's assessment of his job performance, or appointment
of other executives to senior positions due to the Board's assessment of
a need to supplement Executive's skills or efforts, shall not constitute
"Good Reason" where Executive's compensation is not thereby reduced).
Executive shall give written notice to the Company of a termination by
him for Good Reason.
(b) If the Company terminates this Agreement without Cause, or if
Executive terminates this Agreement with Good Reason, then the Company shall
pay compensation to Executive as follows:
(1) Promptly after the Termination Date the Company will pay Executive
a lump sum equal to the total of (x) the balance of his base salary, at its rate
in effect at the Termination Date, for 12 months plus (y) an amount equal to a
reasonable estimate of the amount of annual incentive compensation he would
have received under the MIP attributable to such 12-month period assuming 100%
target achievement on his part, and
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(2) Commencing 12 months after the Termination Date and for a period of
12 months thereafter, the Company will pay Executive's salary on a monthly basis
plus a monthly amount equal to a reasonable estimate of the amount of annual
incentive compensation Executive would have received under the MIP attributable
to such month assuming 100% target achievement on his part. Such monthly
payments shall be reduced by any income Executive may generate by engaging
during such period in other employment or business activities (not including
investments). Executive shall have a duty to seek opportunities to generate such
other income in mitigation of the Company's obligation to make monthly payments
to him hereunder.
(3) In the event of a termination of this Agreement without Cause or
for Good Reason, the Company shall provide group insurance benefits to Executive
pursuant to Section 3(d) of this Agreement for 12 months after the Termination
Date. To the extent the terms of its plans so permit, the Company will continue
for the same period Executive's participation in any defined benefit and defined
contribution retirement plans, including any pension and 401(k) savings plan,
that are maintained by the Company.
(c) If Executive dies or becomes incapable by reason of Disability of
performing his duties under this Agreement, the Company will pay to Executive,
or to a person duly authorized to act on his behalf or to his estate, the sum of
(i) any unpaid salary accrued to the date of death or the Disability Date and
(if death or Disability occurs after June 30 of any year) (ii) an amount equal
to a reasonable estimate of the amount Executive would have received as annual
incentive compensation under the MIP for that year, prorated on the basis of a
ratio of the number of days in such year prior to the date of death or the
Disability Date to 360. Payment of such amount shall satisfy all obligations of
the Company to Executive under this Agreement, but in the case of Disability
Executive's employment hereunder shall continue for the purpose of continuing
his eligibility to receive medical, disability and other benefits pursuant to
Section 3(d) for 12 months after the Disability Date. For purposes of this
Agreement, "Disability" shall mean the inability of Executive, by reason of
physical or mental illness or injury, to perform his duties for more than a
total of 12 consecutive weeks during any 12-month period (such 12 weeks must be
consecutive, but shall not include vacations); the last day of such 12
consecutive week period is referred to herein as the "Disability Date". The
Company shall give Executive or
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a person duly authorized to act on his behalf written notice of a termination
based on Disability.
5. CONFIDENTIALITY. During and after the Term of this Agreement,
Executive covenants and agrees that, other than as required by law, he will not
disclose to anyone (including representatives of airlines that are partner
owners of the Company) without the Company's written consent, any confidential
materials, documents, records or other information of any type whatsoever
concerning or relating to the business and affairs of the Company that
Executive may have acquired in the course of his employment hereunder,
including but not limited to: (i) trade secrets of the Company; (ii) lists of
customers or clients of the Company; and (iii) information relating to methods
of doing business (including information concerning operations, technology and
systems) in use or contemplated use by the Company and not generally known
among competitors in the travel services and computer reservation systems
business.
6. NON-COMPETITION. (a) Executive acknowledges that the services he is
to render to the Company hereunder are special and unique in character, and
that their loss cannot be adequately compensated at law or by damages. In view
of (i) the unique value to the Company of the services to be provided by
Executive hereunder, (ii) the confidential information that Executive will
acquire in the course of his employment hereunder and (iii) as a material
inducement to the Company to enter into this Agreement and to pay Executive the
compensation and benefits provided for hereunder, Executive covenants and
agrees that during the Term of this Agreement, and for the longer of 12 months
after the Termination Date or such period thereafter as the Company continues
to pay monthly compensation to Executive hereunder, Executive will not
(A) manage, operate, control, participate in alone or in combination
with others, render financial or other assistance to or be connected in any
manner with the ownership, management, representation, operation or control of
or otherwise render service or assistance to any travel services and computer
reservation systems company, airline or multinational customer of the Company
or any affiliate thereof (each a "Travel Company") that is actively engaged in
or interested in developing and/or expanding a range of services comparable to
those provided by the Company as a partner, director, officer, employee, agent,
contractor or in any other capacity, or otherwise directly or indirectly assist
any Travel Company to compete in any manner with any business activity engaged
in or actively being pursued (with or
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without the assistance or involvement of Executive) by the Company at the time
of termination related to the travel services and computer reservation systems
business; or
(B) combine with a group of two or more other former employees of
the Company to compete with the Company in the travel services and computer
reservation systems business, or solicit employees of the Company to leave the
employ of such entity for the purpose of engaging together in any employment,
competitive with the Company or otherwise.
(b) Executive and the Company recognize that, as a result of the
globalization of markets and technology through advances in telecommunications
systems and the internationalization of the travel services and computer
reservation system business, the market for the afore-described business is not
susceptible to geographic definition. Consequently, and given the nature of the
position Executive will hold with the Company, Executive and the Company agree
that the restrictions contained in Section 6 upon the activities of Executive
are geographically unlimited and reasonable as such.
(c) It is the desire and intent of the parties that the provisions
of Section 5, of this Section 6 and of Section 7 below shall be enforced to the
fullest extent permissible under the laws and public policies of the State of
Illinois. If any particular provisions or portions of Section 5 or of this
Section 6 or Section 7 below shall be adjudicated to be invalid or
unenforceable, Section 5, this Section 6 and Section 7 below shall be deemed
amended to delete therefrom such provision or portion adjudicated to be invalid
or unenforceable, such amendment to apply only in the particular jurisdiction
in which such adjudication is made.
7. SYSTEMS AND TECHNOLOGY OWNERSHIP. Executive acknowledges and
agrees that during the Term of this Agreement he will disclose to the Company
all material products, ideas, processes, systems inventions and business plans
developed by him which relate, directly or indirectly, to the travel services
and systems business of the Company (collectively, the "Intellectual
Property"). Executive further agrees that any Intellectual Property so
developed will be the sole property of the Company and that Executive will, at
the Company's request and cost, do whatever is necessary to secure the rights
thereto by patent, copyright or otherwise to the Company. In connection with
the foregoing, Executive represents, warrants and covenants that any
Intellectual Property or other copyrightable or patentable subject matter that
Executive delivers to the Company has
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been or will be created solely by Executive or that at the time of delivery
thereof Executive will have the right to transfer such subject matter to the
Company for use in its travel services and computer reservation systems
business. Further, and not by way of limitation, Executive hereby assigns to the
Company all of his right, title and interest in and to any Intellectual
Property from the moment of creation thereof. This Section 7 shall not apply to
any Intellectual Property or invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was
developed entirely on the Executive's own time, unless (a) the Intellectual
Property or invention relates (i) to the business of the Company, or (ii) to
the Company's actual or demonstrably anticipated research or development, or
(b) the Intellectual Property or invention results from any work performed by
the Executive for the Company.
8. GOVERNING LAW. This Agreement is governed by and is to be
construed and enforced in accordance with the laws of the State of Illinois,
not including its conflict of laws principles. If, under such law, any portion
of this Agreement is at any time deemed to be in conflict with any applicable
statute, rule, judicial interpretation binding on the parties, regulation or
ordinance, such portion shall be deemed to be modified or altered to conform
thereto or, if that is not possible, to be omitted from this Agreement, and the
invalidity of any such portion shall not affect the force, effect or validity of
the remaining portions hereof.
9. NOTICES. All notices required to be given under this Agreement
shall be in writing and shall be deemed effective when received and shall be
delivered in person, or by facsimile transmission (with confirmation of
receipt), or by mail, postage prepaid, for delivery as registered or certified
mail addressed, (a) in the case of Executive, to him at his then current
business address with Employer, with a copy to Executive's residential address
as reflected above (or such other residential address as Executive may notify
the Company from time to time) or, (b) in the case of the Company, to the
Chairman of the Company or to such other person as the Company may designate in
writing to Executive.
10. RESOLUTION OF DISPUTES.
(a) The parties agree that all disputes arising under or in
connection with this Agreement (except to the extent specified in Section 10(b)
below), and any and all claims by Executive relating to his employment with the
Company including claims of discrimination arising under
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Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination
in Employment Act, the Americans with Disabilities Act and similar federal,
state and local legislation will be submitted to arbitration in Chicago,
Illinois before a panel of three arbitrators chosen under the rules of the
American Arbitration Association; provided, however, that any court with
jurisdiction over the parties may have jurisdiction over any action brought
with regard to or any action brought to enforce any violation or claimed
violation of Section 5, 6 or 7. The parties each hereby specifically submit to
the jurisdiction of any federal or state court located in the State of
Illinois and further agree that service of process may be made within or
without the State of Illinois by giving notice in the manner provided in
Section 9. Each party hereby waives any right to a trial by jury in any dispute
between them. In the event the principal offices of the Company are moved to a
State other than Illinois, arbitration of disputes hereunder shall take place
in such State, and the parties shall be deemed to have consented to personal
jurisdiction in such State.
(b) Executive recognizes that irreparable injury would be caused to the
Company, not adequately compensable by money damages, by Executive's violation
of any provision of Section 5, 6 or 7 of this Agreement. Executive further
agrees that in the event of any such violation or threatened violation the
Company or any of its direct or indirect subsidiaries or affiliates, in
addition to such other rights and remedies as may exist in its or their favor,
may apply to a court of law or equity to enforce the specific performance of
such provisions and, without notice to Executive, may apply for an injunction
or temporary restraining order against any act which would violate any such
provisions.
(c) The covenants of Executive contained in Sections 5, 6 and 7 of this
Agreement shall be construed as independent of all other provisions contained
in this Agreement.
11. Miscellaneous. (a) Executive represents and warrants to the Company
that Executive has no contracts or agreements of any nature that Executive has
entered into with any other person, firm or corporation that contain any
restraints on Executive's present or future services. Executive further
represents that he has brought to his employment hereunder, and will use in
connection with such employment, no customer lists or proprietary information
including computer software that was used by him or to which he had access by
reason of his prior employment and that is the property of his former employer.
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(b) Executive acknowledges and agrees that this Agreement constitutes
the entire understanding between the Company and Executive relating to the
employment of Executive by the Company or any direct or indirect subsidiary or
affiliate or partner of the Company, and supersedes all prior written and oral
agreements and understandings with respect to the subject matter of this
Agreement.
(c) This Agreement may be amended only by a subsequent written
agreement signed by Executive and the Company.
(d) No waiver by either party of or failure to assert any provision or
condition of this Agreement by him or it to be performed or right to be
exercised shall be deemed a waiver of such or similar or dissimilar provisions
and conditions or rights at the same time or any prior or subsequent time.
(e) This Agreement and all rights and obligations of Executive are
personal to Executive and shall not be assignable and any purported assignment
in violation hereof shall not be valid or binding on the Company.
(f) This Agreement may be signed in counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and day first above written.
GALILEO INTERNATIONAL PARTNERSHIP
By /s/ XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx
By
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Xxxxx Xxxxxxx
By
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Xxxxx Xxxxxxx
By
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Xxxxx X. Xxxxxxx
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