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EXHIBIT 10.10
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT made as of the 1st day of February, 2000 (the
"Effective Date") between XXXXXXX X. XXXXXX (hereinafter referred to as
"Employee") and TRX, Inc., a Georgia corporation (hereinafter referred to as
the "Company").
WITNESSETH:
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company; and
WHEREAS, the parties intend to supersede all prior correspondence,
letters, and negotiations between them with the terms set forth herein;
NOW, THEREFORE, it is hereby agreed as follows:
1. Employment of Employee. The Company hereby employs Employee for a
period of three (3) years commencing on the Effective Date of this Employment
Contract (the "Initial Term"). Employee agrees to such employment on the terms
and conditions herein set forth and agrees to devote his best efforts to his
duties under this Employment Contract and to perform such duties diligently and
efficiently and in accordance with the directions of the Company.
2. Duties. The Employee shall be employed as Executive Vice President
- Administration of the Company, reporting directly to the Chief Executive
Officer of the Company. As Executive Vice President-Administration, the
Employee shall have such duties as are customarily performed by individuals
acting in such a position, as well as any specific related duties and
responsibilities as may be assigned to him by the Chief Executive Officer of
the Company.
Further, upon approval by the Board of Directors, the Employee shall
become the Corporate Secretary for the Company and shall serve in such capacity
for the Term of this Employment Agreement.
The Employee shall devote substantially all of his business time,
attention, and energies to the Company, shall act at all times in the best
interests of the Company, and shall not during the term of this Employment
Contract be engaged in any other business activity, whether or not such
business is pursued for gain, profit, or other pecuniary advantage.
Notwithstanding the foregoing, this Employment Contract shall not be construed
as preventing Employee from investing his personal assets in any form or manner
that will not require any services by Employee in the operation of the affairs
of the business in which such investments are made; provided; however, that
Employee shall not be permitted to make any investment in any business
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competing with the business of the Company. Further, notwithstanding the
foregoing provisions, this Employment Contract shall not be construed as
preventing the Employee from serving as a member of the board of directors of
any company as long as such service has been approved by the Chief Executive
Officer and such service does not distract the Employee from his duties
hereunder.
3. Compensation and Benefits.
(a) Base Salary. Employee's annual salary during the first twelve (12)
months of the term of this Employment Contract shall be $150,000 (the "Base
Salary"). The Base Salary shall be paid by the Company monthly in arrears or in
accordance with the Company's regular payroll practice. Pursuant to the
Employee's satisfactory performance reviews, the Employee's Base Salary shall
increase by a minimum of five percent (5%) on each anniversary date of the
Effective Date of this Agreement.
(b) Annual Discretionary Bonus. Employee shall be eligible for an
annual discretionary bonus under the terms and conditions of a short-term
incentive compensation program to be approved and adopted by the Board of
Directors. The Chief Executive Officer of the Company shall determine the
amount of the Employee's annual discretionary bonus, if any, based on both the
performance of the Company and the performance of the Employee; provided,
however, that to receive the bonus, Employee must be an "active employee in
good standing" on the date that the bonus is paid. For purposes of this
Employment Contract, an "active employee in good standing" shall mean that
Employee (i) has not terminated employment with the Company for any reason;
(ii) is not on probation of any kind from the Company; (iii) has not given
notice under this Employment Contract pursuant to Section 5 hereof; and (iv)
has not received written notice from the Company pursuant to Section 5 hereof.
(c) Long-Term Incentive Compensation. Upon an initial public offering
of the Company's common stock, the Company shall grant to Employee a
nonqualified stock option to purchase 40,000 shares of the Company's common
stock, at an exercise price of the price at which the initial public offering
of the stock is made, issued under the Company's 2000 Stock Incentive Plan.
This option shall become exercisable in twenty percent (20%) increments on each
of the first four anniversaries of the Effective Date, with the final increment
becoming exercisable on date six months after the fourth anniversary of the
Effective Date. To the maximum extent possible, this option shall be granted as
an ISO, with the remainder of the grant as an NQSO. The options described in
this paragraph shall be subject to the terms and conditions of the Company's
2000 Stock Incentive Plan. [In the event the Company has formally engaged an
underwriter for an initial public offering and then, prior to such public
offering and prior to the grant of the 40,000 share option to the Employee,
substantially all of the stock or assets of the Company is sold, the Company
agrees to treat the Employee as if he held the option for 40,000 shares of the
Company's common stock at the time of such sale.] In addition, the Company
agrees to instruct the committee administering the 2000 Stock Incentive Plan to
permit the Employee to transfer, at his election, one or both of the above
stock options to an immediate family member, a trust (with beneficiaries of
only immediate family members), or a family limited partnership (with general
partners and limited partners of only immediate family
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members). Such stock options referenced herein shall be adjusted for any stock
splits as to the number of shares which occur after the Effective Date herein.
(d) Employee Benefits. The Company shall provide Employee medical
coverage and other employee benefits substantially similar to, and on the same
basis as, the coverage provided to employees of the Company.
(e) Vacation. The Employee shall be entitled to four (4) weeks of paid
vacation per calendar year; provided, however, that if this Employment Contract
is not in effect for any full calendar year; Employee shall have only a pro
rata portion of such paid vacation during that calendar year.
(f) Automobile Allowance. The Employee shall receive a monthly
allowance of $500.00 in cash to assist him in obtaining and maintaining an
automobile for his business use. The Employee shall be responsible for any and
all costs and liabilities, including insurance, related to such automobile.
4. Personnel Policies. Employee shall conduct himself at all times in
a businesslike and professional manner as appropriate for a person in his
position and shall represent the Company in all respects as complies with good
business and ethical practices. In addition, Employee shall be subject to and
abide by the policies and procedures of the Company applicable to personnel of
the Company, as adopted from time to time.
5. Business Expenses. Employee shall be reimbursed monthly by the
Company for ordinary, necessary and reasonable expenses incurred by him in the
performance of his duties for the Company, provided that Employee shall first
document said business expenses in the manner generally required by the Company
under its policies and procedures, and in any event, the manner required to
meet applicable regulations of the Internal Revenue Service relating to the
deductibility of such expenses.
6. Termination and Renewal.
(a) Termination Due to Death or Discharge for Good Cause. This
Employment Contract shall terminate immediately upon the death of Employee or
upon the discharge of Employee for "good cause". For the purposes of this
Employment Contract, "good cause" means any act of fraud or dishonesty (whether
or not in connection with the Company's Business as hereinafter defined),
competing with the Business of the Company either directly or indirectly, the
breach of any provision of this Employment Contract by Employee, failure to
comply with the decisions of the Company, failure to discharge Employee's duty
of loyalty to the Company, or any other matter constituting "good cause" under
the laws of the State of Georgia. In the event of termination under this
section, any earned but unpaid Base Salary and any other benefits provided
herein shall be paid to Employee up to the effective date of termination of
this Employment Contract for whatever reason, including the death of Employee,
and not thereafter,
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subject to the specific provisions of subsection 2(c).
(b) Termination Due to Disability. This Employment Contract also shall
terminate immediately upon written notice to Employee if Employee shall at any
time be unable to perform the essential functions of his job hereunder, by
reason of a physical or mental illness or condition, with or without reasonable
accommodation, for a continuous period of three (3) consecutive calendar
months. In the event of termination due to disability under this section, any
earned but unpaid Base Salary and any other benefits provided herein shall be
paid to Employee up to the effective date of termination of this Employment
Contract for whatever reason, including the death of Employee, and not
thereafter, subject to the specific provisions of subsection 2(c).
(c) Termination by the Company Without Cause. If the Company
terminates this Employment Contract without Cause during the Initial Term, the
Company shall pay the Employee any earned but unpaid Base Salary accrued
through the date of termination plus the Base Salary and benefits due the
Employee for the remainder of the Initial Term. In the event the Company
terminates the Employment Contract without Cause after the end of the Initial
Term but during the Term of this Agreement, the Company shall either give the
Employee six (6) months' advance notice of such termination or pay to the
Employee an amount equal to six (6) months' of Base Salary, in addition to any
earned but unpaid Base Salary accrued through the date of termination. In
addition to the foregoing, in the event of a termination of the Employee's
employment by the Company without Cause, the stock options described in Section
3(d) hereof (to the extent previously granted) shall immediately become
exercisable.
(d) Voluntary Termination by the Employee due to Relocation. If the
Company requires the Employee to relocate his office from the Atlanta
metropolitan area, the Employee may voluntarily terminate this Agreement upon
30 days' advance written notice. Upon such a voluntary termination due to
relocation, any outstanding stock options held by the Employee shall
immediately become exercisable.
(e) Voluntary Termination by the Employee. If the Employee terminates
this Employment Contract within the Initial Term for any reason other than as
provided in subsection (d) hereof, he shall be liable to the Company for any
and all expenses, costs and other damages of the Company resulting therefrom.
In the event the Employee terminates this Employment Contract after the Initial
Term but during the Term of this Agreement for any reason other than as
provided in subsection (d) hereof, the Employee shall either give the Company
six (6) months' advance written notice of such termination or pay to the
Company an amount equal to any and all expenses, costs and other damages of the
Company resulting from the lack of such notice.
(f) Termination Upon Expiration of Term. If not otherwise terminated
hereunder, the Employment Agreement shall terminate at the end of the Initial
Term; however, prior to the expiration of the Initial Term, the Company and the
Employee may elect, in writing, to renew this Agreement for successive two (2)
year terms (which successive terms, if elected, shall together with the Initial
Term constitute the "Term" of the Agreement).
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7. Restrictive Covenants.
(a) Covenants to Prior Employers. Upon execution of this Agreement,
the Employee hereby represents that he is not a party to, subject to or
otherwise covered by any agreement or understanding (written or oral) with a
prior employer, other than WorldTravel Partners I, LLC, that would restrict or
in any manner limit the performance of his duties under this Agreement.
Employee acknowledges that he has been instructed by the Company not to reveal
or use any trade secret information from any former employer or reveal or use
confidential information in violation of any agreement with any former
employer.
(b) Acknowledgment of Damage Resulting From Employee's Competition
with the Company. Employee understands and acknowledges that the Company and
its related entities are engaged in the business of providing travel
arrangement, reservation, ticketing and related services and products (the
"Business"), and that because of his position with the Company, he has or will
obtain (i) intimate knowledge of the Business and including, but not limited
to, knowledge of "Confidential Information" (as hereinafter defined), and (ii)
knowledge of and relationships with the customers and suppliers used in
connection with the Business of the Company and its related entities. Employee
agrees and acknowledges that such knowledge, access, and relationships are such
that if Employee were to compete with the Company or its related entities
engaged in the Business, by engaging in the Business within the Restricted
Territory (as hereinafter defined) at any time during the two (2) year period
from the date of Employee's termination of employment with the Company, the
Company or its related entities would suffer harm, and the benefits that the
parties bargained for under this Employment Contract would be severely and
irreparably damaged. Further, Employee acknowledges and agrees that this
Employment Contract, and the covenants not to solicit or compete contained
herein, were a fundamental element of the transactions contemplated by this
Employment Contract and that the transactions contemplated therein would not
have been consummated in the absence of this Section 7. Employee agrees that
the covenants contained in this Section 6 are reasonable and necessary to
protect the confidentiality of the Trade Secrets, and other "Confidential
Information" concerning the Company acquired by Employee.
For purposes of this Employment Contract, "Trade Secret" shall be as
defined by applicable state law. The provisions of this Section shall be
interpreted so as to protect those trade secrets and "Confidential
Information," and to secure for the Company the exclusive benefits of the work
performed on behalf of the Company by the Employee under this Employment
Contract, and not to unreasonably limit his ability to engage in employment and
consulting activities in noncompetitive areas which do not endanger the
Company's legitimate interests expressed in this Employment Contract. Employee
also understands and agrees that the Company can reasonably amend the
definition of the Business or the scope of the Business at any time upon notice
to Employee. For purposes of this Agreement, the term "Restricted Territory"
shall mean the United States of America, which the parties agree is a
reasonable and necessary geographical limitation due to the nature of the
Business.
(c) Covenant Not to Compete with the Company. Employee agrees that,
during the term of his employment under this Employment Contract and for a
period of two (2) years following the termination of his employment under this
Employment Contract for whatever
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reasons, with or without "good cause" or otherwise, Employee will not, directly
or indirectly, expressly or tacitly, for himself or on behalf of any entity
anywhere within the Restricted Territory, (i) act as an officer, manager,
advisor, executive, controlling shareholder, or consultant to any business in
which his duties at or for such business include oversight of or actual
involvement in providing services which are competitive with the services or
products being provided or which are being produced or developed by the Company
or its related entities, or are under investigation by the Company or its
related entities at the termination of this Employment Contract, (ii) recruit
investors on behalf of an entity which engages in activities which are
competitive with the services or products being provided or which are being
produced or developed by the Company or its related entities, or are under
investigation by the Company or its related entities at the termination of this
Employment Contract, or (iii) become employed by such an entity in any capacity
which would require Employee to carry out, in whole or in part, the duties
Employee has performed for the Company or its related entities which are
competitive with the services or products being provided or which are being
produced or developed by the Company or its related entities, or are under
active investigation by the Company or its related entities at the termination
of this Employment Contract.
(d) Nonsolicitation of Customers. During Employee's employment with
the Company, Employee shall not, directly or indirectly without the Company's
prior written consent, contact or solicit any customers or clients of the
Company of its related entities, or prospective customers with whom the Company
or its related entities have solicited business within the last twelve (12)
months and with whom Employee had material contact ("Customers"), for business
purposes unrelated to furthering the Business of the Company or its related
entities. For a period of two (2) years following termination of Employee's
employment with the Company, Employee shall not, directly or indirectly, (i)
contact, solicit, divert or take away, any Customer for purposes of, or with
respect to, selling a product or service which competes with the Business, or
(ii) take any affirmative action in regard to establishing or continuing a
relationship with a Customer for purposes of making or which directly or
indirectly results in, a sale of a product or service which competes with the
Business.
(e) Nonsolicitation of Employees. Employee shall not at any time
within two (2) years after the termination of his employment, directly or
indirectly, solicit, employ, or endeavor to entice away from the Company or its
related entities any person who is or has been an employee of the Company or
its related entities during the Employee's employment or during the two-year
nonsolicitation period.
(f) Confidentiality. Employee hereby acknowledges and agrees that
during the Employment Contract, Employee will have access to Trade Secrets and
"Confidential Information" of the Company or its related entities, Employee
also acknowledges that Employee will not disclose or use, directly or
indirectly, any Trade Secrets Employee obtains during the course of Employee's
employment related to the Business for two (2) years from the date of
Employee's termination of employment with the Company. Employee also recognizes
that the services performed by Employee hereunder are special, unique and
extraordinary and that by reason of Employee's employment with the Company,
Employee will receive, develop, or otherwise acquire "Confidential Information"
(as hereinafter defined). Except as required by the pursuit of Employee's
duties with the Company or as it is authorized in writing by the Company,
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Employee acknowledges that Employee will not disclose or use, directly or
indirectly, any Confidential Information related to the Business during the
course of Employee's employment and for a period of two (2) years after the
date of Employee's termination under this Employment Contract.
The term "Confidential Information" shall mean and include any
information, data and know-how relating to the Business of the Company or its
related entities that is disclosed to Employee by the Company or known to
Employee as a result of Employee's relationship with the Company and not
generally within public domain (whether constituting a Trade Secret or not),
including without limitation, all administrative procedures, product
development and technical data, sales and/or marketing information, customer
account records, payment plans, training and operations material, memoranda and
manuals, personnel records, pricing information, and financial information
concerning or relating to the Business and/or the Customers, employees and
affairs of the Company or its related entities.
(g) Severability of Agreement Provisions. In the event any or all of
the covenants of this Section 7 are deemed overly broad, the parties hereto
agree that the covenants shall be enforced to the extent that they are not
overly broad.
8. Products, Notes, Records and Software. All memoranda, notes,
records and other documents and computer software made or compiled by Employee
or made available to him during the term of this Employment Contract concerning
the Business of the Company or its related entities, including, without
limitation, all customer data, billing information, service data, and other
technical material of the Company or its related entities, shall be the
Company's property and shall be delivered to the Company within two (2) days of
the termination of this Employment Contract.
9. Ownership of Inventions.
(a) Disclosure to Company. Employee agrees to disclose promptly, in
writing, to the Company's Board of Directors any patentable or unpatentable,
copyrightable or uncopyrightable, idea, invention, work of authorship
(including, but not limited to computer programs, software and documentation),
formula, device, improvement, method, process or discovery (each, an
"Invention") which relates to the Company's business that Employee conceives,
makes, develops, or works on, in whole or in part, solely or jointly with
others during the term of Employee's employment regardless of whether (i) such
invention was conceived, made, developed or worked on during Employee's regular
hours of employment or his time away from work; (ii) the Invention was made at
the suggestion of the Company; or (iii) the Invention was reduced to drawing,
written description, documentation, models or other tangible form.
(b) Made For Hire Status of the Inventions. It is expressly agreed
that the Inventions created by Employee hereunder shall be considered specially
ordered or commissioned "works made for hire", as such term is defined under
the United States Copyright Act of 1976, as amended (the "Act"), and that such
works and the copyright interests therein and thereto shall
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belong solely and exclusively to the Company and shall be considered the
property of the Company for purposes of this Agreement. To the extent that such
works do not constitute "works made for hire" under the Act, Employee, in
consideration of $1.00 and other good and valuable consideration, the receipt
and adequacy of which hereby are acknowledged, hereby irrevocably assigns to
the Company, its successors and assigns, without royalty or any other further
consideration, (i) all rights, title and interests in and to the copyrights of
the Inventions and all renewals and extensions of the copyrights that may be
secured under existing or future laws, and (ii) all other rights, title and
interests he may have in the Inventions. Accordingly, the Company will have the
right to register, in the office of the Registrar of Copyrights of the United
States, the Inventions in the Company's name as the owner and author of such
Inventions. Employee shall, upon request by the Company and at the Company's
expense, promptly execute, acknowledge or deliver any documents or instruments
deemed reasonably necessary by the Company to document, enforce, protect or
otherwise perfect the Company's copyright and other interests in the
Inventions.
(c) Assignment to Company. Without limiting the generality or effect
of any other provision of this Agreement, Employee agrees to assign to the
Company without royalty or any other further consideration his entire right,
title and interest in and to any Invention Employee is required to disclose
hereunder.
(d) Records. Employee agrees to make and maintain adequate and current
written records of all Inventions covered by this Agreement. These records
shall be and remain the property of the Company.
(e) Patents and Proprietary Rights. Employee agrees to assist the
Company in obtaining, maintaining, and enforcing patents and other proprietary
rights in connection with any Invention covered this Agreement for which the
Company has or obtains any right, title or interest. Employee further agrees
that his obligations under this subsection shall continue beyond the
termination of the term of this Agreement, but if Employee is called upon to
render such assistance after the termination of the term of this Agreement,
Employee shall be entitled to a fair and reasonable rate of compensation for
such assistance. Employee shall, in addition, be entitled to reimbursement of
any out-of-pocket expenses incurred at the request of the Company relating to
such assistance.
(f) Other Assignments or Contracts. Employee represents that there are
no other contracts to assign inventions that are now in existence between the
Employee and any former employer or other person or entity. Employee further
represents that he has no other employments or undertakings which might
restrict or impair his performance of this Agreement.
10. Applicable Law. This Employment Contract is being executed in the
State of Georgia and shall be construed and enforced in accordance with the
laws of said jurisdiction.
11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Employment Contract by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
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12. Successors and Assigns. This Employment Contract shall inure to
the benefit of the Company, its subsidiaries and affiliates, and their
respective successors and assigns. This Employment Contract and benefits
hereunder are personal to Employee and may not be assigned or transferred by
Employee.
13. Entire Agreement. This instrument contains the entire agreement of
the parties and supersedes all prior agreements regarding Employee's employment
by the Company, including, but not limited to, oral discussions, letter
agreements, or any other document concerning the possibility of employment with
the Company. This Employment Contract may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, changes, modification, extension, or discharge is sought.
14. Invalidity of any Provision. It is the intention of the parties
hereto that the provisions of this Employment Agreement shall be enforced to
the fullest extent permissible under the laws and public policies of each state
and jurisdiction in which such enforcement is sought, but that the
unenforceability (or the modification to conform with such laws or public
policies) of any provision hereof shall not render unenforceable or impair the
remainder of this Employment Agreement which shall be deemed amended to delete
or modify, as necessary, the invalid or unenforceable provisions. The parties
further agree to alter the balance of the Employment Agreement in order to
render the same valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Contract under seal as of the date first above shown.
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
COMPANY
TRX, INC.
By: /s/ Xxxxxxx X. Xxxxx III
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Title: President & CEO
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