Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (Agreement) by and between XxxxxxXxx.xxx Inc., a
Florida corporation with principal offices at 000 Xxxx Xxxxxxx Xxxxxx-Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxx 00000(xxx Company),and Xxxxx Xxxx, 000 Xxxxxxxxx Xxx,
Xxxxxxxx, Xxxxxxxx 00000 (Executive) shall be effective on July 12, 1999.
RECITALS
A. The Company desires to be assured of the association and services of
Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and the
Company is willing to employ Executive, upon the terms, covenants and conditions
hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. The Company hereby employs Executive as its Chief
Information Officer (CIO), subject to the supervision and direction of its
President and Company's Board of Directors.
2. Term. The term of this Agreement shall be for a period of five (5) years
commencing on the effective date of this Agreement, unless terminated earlier
pursuant to Section 8. below; provided, however, that Executive's obligations in
Section 7. below shall continue in effect after such termination.
3. Compensation; Reimbursement.
3.1. Base Salary. For all services rendered by Executive under this
Agreement, the Company shall pay Executive a base salary of One Hundred Thirty
Thousand Dollars ($130,000.00) per annum, payable bi-weekly in equal
installments (the "Base Salary"). The amount of the Base Salary may be increased
at any time and from time to time by the Board of Directors of the Company, and
shall be adjusted annually to reflect changes in the Consumer Price Index for
the statistical area in which the residence of Executive is located. No such
change shall in any way abrogate, alter, terminate or otherwise affect the other
terms of this Agreement.
3.2. Bonus/Loan. The Company will extend to Executive a non-interest
bearing loan ("Bonus/Loan") of Eighty Thousand Dollars ($80,000.00) on the first
Anniversary Date ("Anniversary Date") of this Agreement (provided Executive has
remained in the continuous full-time employment of the Company from the date of
this Agreement until the first Anniversary Date of this Agreement). The
Anniversary Date of this Agreement shall be July 12 of each year following the
year of this Agreement, e.g., July 12 is the First Anniversary Date. Executive
agrees to execute a written instrument evidencing this indebtedness at the time
the Bonus/Loan is made in the form of the Promissory Note ("Note") which is
attached hereto and labeled Exhibit A. Provided that Employee remains in the
continuous full-time employment of the Company from the date of this Agreement
until the Second Anniversary Date of this Agreement, the Bonus/Loan of Eighty
Thousand Dollars ($80,000.00) will be forgiven, marked paid in full by the
Company and returned to the Employee. At the time of the forgiveness of the
indebtedness or such other time as the Company's accounting firm deems
advisable, the Company will pay, i.e., gross-up, on behalf of Employee all
withholding and other state and federal income taxes (but not federal or state
gift or estate taxes as those would be the sole responsibility of Executive's
estate) as required by applicable federal and state law. In the event Executive
is terminated for cause or voluntarily leaves the employment of the Company
prior to the Second Anniversary Date of this Agreement, the Bonus/Loan amount of
Eighty Thousand Dollars ($80,000.00) will be repaid to the Company in accordance
with the terms of the Note. In the event Executive (1) dies or becomes
permanently incapacitated as provided in Section 8.1(2) of this Agreement or (2)
is terminated for reasons other than cause, then in either of those events, the
Bonus/Loan will be forgiven at the time of the issuance of the permanent
incapacity certification or at the time of termination. Executive agrees that
the Company at its election may secure an appropriate life insurance policy on
Executive's life with the Company as the named beneficiary and Executive will
submit to the medical exam required by the insurer to secure such life insurance
policy.
3.3. Additional Benefits. In addition to the Base Salary and the
Bonus/Loan, Executive shall be entitled to all other benefits of employment
provided to other employees of the Company including hospitalization, sick leave
and paid vacation and holidays.
3.4. Reimbursement. Executive shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of Executive's duties under this
Agreement (1) so long as such expenses constitute business deductions from
taxable income for the Company and are excludable from taxable income to the
Executive under the governing laws and regulations of the Internal Revenue Code
[provided, however, that Executive shall be entitled to full reimbursement in
any case where the Internal Revenue Service may, under Section 274(n) of the
Internal Revenue Code, disallow to the Company 20% of meals and entertainment
expenses]; and, (2) to the extent such expenses do not exceed the amounts
allocable for such expenses in budgets that are approved from time to time by
the Company. The reimbursement of Executive's business expenses shall be upon
monthly presentation to and approval by the President of the Company of valid
receipts and other appropriate documentation for such expenses.
4. Scope of Duties.
4.1. Assignment of Duties. Executive shall have such duties as may be
assigned to Executive from time to time by the Company's President or the
Company's Board of Directors commensurate with Executive's experience and
responsibilities in the position for which Executive is employed pursuant to
Section 1. above and these duties shall be exercised by Executive subject to the
control and supervision of the President and the Board of Directors of the
Company.
4.2. General Specification of Duties. Executive's duties shall include, but
not be limited to, the duties, functions and responsibilities generally
associated with the head of an operating division or subsidiary, including: (1)
executing on behalf of the Company, in his capacity as CIO all documents as
requested by the Company; (2) employing and discharging all employees for which
Executive is responsible; (3) establishing procedures for implementing the
policies established by the Company; (4) ensuring the areas of Executive's
responsibility are operated in compliance with all legal requirements as a fully
reporting public company under the Securities Exchange Act of 1934; and, (5)
preparation of all reports which the Company bases the preparation of its
affiliate reports, financial statements, tax returns and other similar items
whether such reports are in written, electronic or other media format.
The foregoing specifications are not intended as a complete itemization of
the duties which Executive shall perform and undertake on behalf of the Company
in satisfaction of Executive's employment obligations under this Agreement.
4.3. Annual Plan.
(1) Executive shall submit to the Company for its approval, not later
than (30) days after the end of the Company's fiscal year an annual
business plan for the area of Executive's responsibility (the "Annual
Plan"). The Annual Plan shall be revised by Executive and submitted to the
Company for its review and approval from time to time during each year to
reflect changes in the Annual Plan because of operations or otherwise.
(2) During each year Executive, in the performance of Executive's
duties under this Agreement, shall use Executive's best efforts to comply
or cause compliance with the matters set forth in the Annual Plan and shall
not (except for emergency expenditures or special circumstances requiring
an unanticipated expenditure) deviate materially from any budget category
set forth in the Annual Plan, incur any material additional expense or
change materially any aspect of the Annual Plan without the approval of the
President of the Company.
4.4. Executive's Devotion of Time. Executive agrees to devote Executive's
full time, abilities and energy to the faithful performance of the duties
assigned to Executive and to the promotion and forwarding of the business
affairs of the Company, and not to divert any business opportunities from the
Company to Executive or to any other person or business entity.
4.5. Conflicting Activities.
(1) Executive shall not, during the term of this Agreement, be engaged
in any other business activity without the prior consent of the Board of
Directors of the Company; provided, however, that this restriction shall
not be construed as preventing Executive from investing his personal assets
in investments in business entities which are not in competition with the
Company or its affiliates, or from pursuing business opportunities as
permitted by Section 4.5.(2).
(2) Executive hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best
interests of the Company and with Executive's duties under this Agreement.
Should Executive discover a business opportunity that relates to the
current or anticipated future business of the Company, he shall first offer
such opportunity to the Company. Should the Board of Directors of the
Company not exercise its right to pursue this business opportunity within a
reasonable period of time, not to exceed sixty (60) days, then Executive
may develop the business opportunity for Executive; provided, however, that
such development may in no way conflict or interfere with the duties owed
by Executive to the Company under this Agreement. Further, Executive may
develop such business opportunities only on Executive's own time, and
Executive may not use any service, personnel, equipment, supplies,
facility, or trade secrets of the Company in the development of those
business opportunities. As used herein, the term "business opportunity"
shall not include business opportunities involving investment in publicly
traded stocks, bonds or other securities, or other investments of a
personal nature.
5. Stock Option. The Board of Directors has authorized the granting to
Executive of a non-statutory stock option ("Option") to purchase shares of
common stock of the Company ("Stock") upon the terms and conditions set forth in
a written Stock Option Agreement (a form of said agreement is attached to this
Agreement as Exhibit B) pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act").
6. Benefits. So long as this Agreement is in effect, Executive shall at all
times be entitled to benefits equal to those provided to other chief operating
officers of the Company's operating divisions or subsidiaries. These benefits
shall include, without limitation, the Company's maintenance at its cost of a
life insurance policy and disability policy on Executive payable to Executive
and/or Executive's legal representative or heirs as applicable, in amounts
reasonably agreed to by Executive and the Company.
7. Confidentiality of Trade Secrets and Other Materials.
7.1. Trade Secrets. Other than in the performance of Executive's duties
hereunder, Executive agrees not to disclose, either during the term of
Executive's employment by the Company or at any time thereafter, to any person,
firm or corporation any information concerning the business affairs, the trade
secrets or the customer lists or similar information of the Company. Any
technique, method, process or technology used by the Company shall be considered
a "trade secret" for the purposes of this Agreement.
7.2. Ownership of Trade Secrets; Assignment of Rights. Executive hereby
agrees that all know-how, documents, reports, plans, proposals, marketing and
sales plans, client lists, client files and materials made by Executive in the
course of Executive's employment or by the Company are the property of the
Company and shall not be used by Executive in any way adverse to the Company's
interests. Executive shall not deliver, reproduce or in any way allow such
documents or things to be delivered or used by any third party without specific
direction or written consent of the President of the Company. Executive hereby
assigns to the Company any rights which Executive may have in any such trade
secret or proprietary information.
7.3 Agreement Not To Compete. Executive agrees not to directly or
indirectly solicit or have any contact with any, (1) of the Company's travel
suppliers, (2) GDS systems or (3) of the Company's employees, affiliates or
customers, for two years after termination of employment.
8. Termination.
8.1. Basis for Termination.
(1) Executive's employment hereunder may be terminated at any time by
mutual agreement of the parties.
(2) "Permanent Incapacity" means mental or physical incapacity, or
both, which renders Executive unable to substantially perform the material
duties owed by Executive to the Company as provided in this Agreement and
that such Incapacity will continue for six (6) months. If in the judgment
of the Board of Directors of the Company Executive is permanently
incapacitated, the Board of Directors shall give Notice of Permanent
Incapacity to the Executive or Executive's representative stating that in
the Board of Director's judgment the Executive is permanently
incapacitated. If Executive fails to rebut the Notice of Permanent
Incapacity within fifteen (15) days by providing a certification issued by
the Executive's personal physician that the Executive is not permanently
incapacitated, the judgment of the Board of Directors is deemed final, and
Executive's employment shall be terminated effective the date of the Notice
of Permanent Incapacity. If in response to the Board of Directors Notice of
Permanent Incapacity Executive's personal physician issues a written
certification that Executive is not permanently incapacitated, Executive
agrees to submit to a medical examination by a physician selected by the
Board of Directors. If the physician selected by the Board of Directors
certifies that Executive is not permanently incapacitated, then Executive
shall not be terminated under this Section 8.1(2). If the physician
selected by the Board of Directors certifies that Executive is permanently
incapacitated, then Executive's employment shall be terminated effective as
of the date of the Notice of Permanent Incapacity.
(3) Executive's employment may be terminated by the Company "with
cause," effective upon delivery of written notice to Executive given at any
time (without any necessity for prior notice) if any of the following shall
occur:
(a) any action by Executive which would be grounds for
termination under any applicable state or federal law which law covers
any willful breach of duty or habitual neglect of duty;
(b) any material acts or events constituting (i) a felony
criminal conviction; (ii) any other criminal conviction involving
Executive's lack of honesty or moral turpitude; (iii) drug or alcohol
abuse; or, (iv) acts of dishonesty, gross carelessness or gross
misconduct.
(4) Executive's employment may be terminated by the Company "without
cause" (for any reason or no reason at all) at any time by giving Executive
sixty (60) days prior written notice of termination, which termination
shall be effective on the sixtieth (60th) day following such notice.
(a) For purposes of this section 8.1(4), a Material Diminishment
in connection with Executive's (i) title, job duties or
responsibilities, or (ii) overall compensation and benefits package,
or (iii) a requirement that Executive must move from Monument,
Colorado as a condition of future employment, or (iv) the sale of all
or substantially all of the Company's assets, or (v) any sale, merger
or consolidation of the Company following which a majority of the
voting equity securities of the Company or any surviving entity is
controlled by another person, group or legal entity, shall be deemed
to be a termination by the Company without cause hereunder.
(b) A Material Diminishment of Executive's obligations owed to
the Company by Executive in this Agreement shall be deemed a
termination of the Executive's employment without cause. In the event
of a Material Diminishment of Executive's obligations under Section
8.1(4)(a)(i), (ii) or (iii) of this Agreement, Executive shall give
sixty (60) days notice of such fact to the Company which notice shall
include Executive's "Statement of Correction." Executive's Statement
of Correction shall include the duties which upon restoration by the
Company will cure the Material Diminishment of Executive's obligation.
If the Company fails to make appropriate restoration of any of the
rights or duties enunciated in Section 8.1(4)(a)(i), (ii) or (iii) of
this Agreement as set forth in Executive's Statement of Correction,
Executive and the Company shall submit the issue of Material
Diminishment for arbitration in accordance with the rules of the
American Arbitration Association which are appropriate to determine
whether there has or has not been a Material Diminishment. There shall
be a panel of three arbitrators. Each arbitrator shall be a member in
good standing of the American Arbitration Association. The Company
shall select an arbitrator, and the Executive shall select an
arbitrator; and, the two arbitrators selected shall select a third
neutral arbitrator. If the arbitrators make a finding of fact that
there was a Material Diminishment, then the Executive shall be deemed
to have been terminated without cause as provided in Section 8.1(4) of
this Agreement. Accordingly, the Company shall bear all reasonable and
necessary costs and fees (including attorney fees) incurred in
connection with the arbitration. If the arbitrators make a finding of
fact that there was not a Material Diminishment, all reasonable and
necessary costs and fees (including attorney fees) incurred in
connection with the arbitration shall be borne by Executive.
(c) If Executive's employment under this Agreement is so
terminated, the Company shall (a) make a lump sum cash payment to
Executive within ten (10) days after termination of an amount equal to
(i) Executive's Base Salary for the balance of the year in which
termination occurs, (ii) any un-reimbursed expenses accruing to the
date of termination; and, (b) make a lump sum cash payment equal to
Executive's annual Base Salary, as increased pursuant to Section 3.1.,
on each Anniversary Date of this Agreement for the balance of the term
specified in Section 2. For purposes of this provision, Executive's
annual Base Salary and the remaining portion of the term of the
Agreement shall be calculated as of the termination date. After the
Company's termination of Executive under this provision, the Company
shall not be obligated to provide the benefits to Executive described
in Section 3.4. (except as may be required by law).
(5) Executive may terminate Executive's employment hereunder by giving
the Company thirty (30) days prior written notice, which termination shall
be effective on the (30th) day following such notice.
8.2. Payment Upon Termination. Upon termination under Sections 8.1.(1),
(2), (3), or (5), the Company shall pay to Executive within ten (10) days after
termination an amount equal to the sum of (1) Executive's Base Salary accrued to
the date of termination; and, (2) un-reimbursed expenses accrued to the date of
termination. After any such termination, the Company shall not be obligated to
compensate Executive, Executive's estate or representatives except for the
foregoing compensation then due and owing, nor provide the benefits to Executive
described in Section 3.4. (except as provided by law).
8.3. Dismissal from Premises. At the Company's option, Executive shall
immediately leave the Company's premises on the date notice of termination is
given by either Executive or the Company.
9. Injunctive Relief. The Company and Executive hereby acknowledge and
agree that any default under Section 7. above will cause damage to the Company
in an amount difficult to ascertain. Accordingly, in addition to any other
relief to which the Company may be entitled, the Company shall be entitled to
such injunctive relief as may be ordered by any court of competent jurisdiction
including, but not limited to, an injunction restraining any violation of
Section 7. above and without the proof of actual damages.
10. Miscellaneous.
10.1. Transfer and Assignment. This Agreement is personal as to Executive
and Executive's rights herein shall not be assigned or transferred by Executive
without the prior written consent of the Company, subject to provisions in
section 8.1(4). None of Executives's duties herein may be delegated. This
Agreement shall be binding upon and inure to the benefit of all of the parties
hereto and their respective permitted heirs, personal representatives,
successors and assigns.
10.2. Severability. Nothing contained herein shall be construed to require
the commission of any act contrary to law. Should there be any conflict between
any provisions hereof and any present or future statute, law, ordinance,
regulation or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.
10.3. Controversy. In the event either party brings an action against the
other based on a controversy or claim arising out of or relating to this
contract, or breach thereof, or for the purpose of resolving any dispute
relating to the subject matter of this Agreement the parties agree that (1)if
the action is initiated by the Company, venue of the proceeding will be in
Denver, Colorado and the state or federal court in which the action is brought
will have exclusive jurisdiction over the parties and this Agreement will be
governed by and construed in accordance with the laws of the State of Missouri
applicable to contracts made and performed in Missouri without regard to
conflict of law principles; (2)if the action is initiated by Executive, venue of
the proceeding will be in Xxxxxx County, Missouri and the state or federal court
in which the action is brought will have exclusive jurisdiction over the parties
and this Agreement will be governed by and construed in accordance with the laws
of the State of Colorado applicable to contracts made and performed in Colorado
without regard to conflict of law principles.
10.4. Counterparts. This Agreement may be executed in several counter parts
and all documents so executed shall constitute one agreement, binding on all of
the parties hereto, notwithstanding that all of the parties did not sign the
original or the same counterparts.
10.5. Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, arrangements and understandings
with respect thereto. No representation, promise, inducement, statement or
intention has been made by any party hereto that is not embodied herein, and no
party shall be bound by or liable for any alleged representation, promise,
inducement or statement not so set forth herein.
10.6. Modification. This Agreement may be modified, amended, superseded or
canceled; and, any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
party or parties to be bound by any such modification, amendment, supersession,
cancellation or waiver.
10.7. Construction and Interpretation. In construing this Agreement, none
of the parties hereto shall have any term or provision construed against such
party solely by reason of such party having drafted the same.
10.8. Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this Agreement by
the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.
10.9. Cumulative Remedies. Each and all of the several rights and remedies
provided in this Agreement, or by law or in equity, shall be cumulative, and no
one of them shall be exclusive of any other right or remedy, and the exercise of
any one of such rights or remedies shall not be deemed a waiver of, or an
election to exercise, any other such right or remedy.
10.10. Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
10.11. Notices. Any notice under this Agreement must be in writing and then
telecopied (e.g., by facsimile), sent by express 24-hour guaranteed courier or
hand-delivery or served by depositing the same in the United States mail,
addressed to the party to be notified, postage-prepaid and registered or
certified with a return receipt requested. The addresses of the parties for the
receipt of notice shall be as follows:
If to the Company:
XxxxxxXxx.xxx Inc.
000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
ATTN: Xxxx Xxxxxx, President
If to Executive:
Xxxxx Xxxx
000 Xxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxx 00000
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery. Each party may change its address for notice by giving
notice in the manner provided above.
10.12. Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Executive and the
Company.
10.13. Right of Set-Off. Upon termination or expiration of this Agreement,
the Company shall have the right to set-off against the amounts due Executive
hereunder the amount of any outstanding Bonus/Loan or advance from the Company
to Executive.
10.14. Effective Date. This Agreement shall be effective as of the date set
forth on page 1 when signed by Executive and the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement and agree that it will be effective as provided in Section 10.14 of
this Agreement.
Executive
Xxxxx Xxxx
XxxxxxXxx.xxx Inc.
Xxxx Xxxxxx,
Co-Chief Executive Officer
