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EXHIBIT 10.34
SENIOR MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of May 3, 1999, between GLOBAL VACATION GROUP,
INC., a New York corporation (the "COMPANY"), and XXX X. XXXXXX ("EXECUTIVE").
RECITALS
A. The Company and Executive desire to enter into an agreement
pursuant to which Executive will be employed as the Executive Vice President and
Chief Financial Officer of the Company on the terms and conditions set forth in
this Agreement.
B. Certain definitions are set forth in Section 4 of this Agreement.
AGREEMENT
The parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby engages Executive to serve as
Executive Vice President and Chief Financial Officer of the Company, and
Executive agrees to serve the Company, during the Service Term (as defined in
Section 1(d) hereof) in the capacities, and subject to the terms and conditions,
set forth in this Agreement.
(a) SERVICES. During the Service Term, Executive, as Executive
Vice President and Chief Financial Officer of the Company, shall have all the
duties and responsibilities customarily rendered by Executive Vice Presidents
and Chief Financial Officers of companies of similar size and nature and as may
be delegated from time to time by the Board in its sole discretion or the
Company's Chief Executive Officer. Executive will devote his best efforts and
substantially all of his business time and attention (except for vacation
periods and periods of illness or other incapacity) to the business of the
Company and its Affiliates. Notwithstanding the foregoing, and provided that
such activities do not interfere with the fulfillment of Executive's obligations
hereunder, Executive may (A) serve as a director or trustee of any charitable or
non-profit entity or (B) own up to 3% of the outstanding voting securities of
any publicly-held company. Unless the Company and Executive agree to the
contrary, Executive's place of employment shall be at the Company's principal
executive offices in Washington, D.C. and at the Company's offices in Long
Island, New York; provided, however, that Executive will travel to such other
locations of the Company and its Affiliates as may be reasonably necessary
and/or as required by the Board in its sole discretion in order to discharge his
duties hereunder.
(b) SALARY, BONUS AND BENEFITS.
(i) SALARY AND BONUS. During the Service Term, the Company will
pay Executive a base salary (the "ANNUAL BASE SALARY") as the Board may
designate from time to time, at the rate of not less than $200,000 per
annum; provided, however, that the Annual Base Salary shall be subject to
review annually by the Board for upward increases thereon. The Executive
will be eligible to receive an annual bonus in an amount not to exceed 100%
of Executive's Annual Base Salary for such year, as determined by the Board
based upon the Company's achievement of budgetary and other objectives set
by the Board in consultation with the Executive, which objectives shall be
reasonable in light of the Company's past year's performance and shall be
communicated to Executive by the Board prior to the start of the Company's
fiscal year. Executive's Annual Base Salary and bonus for any partial year
(i.e., 1999) will be prorated based upon the number of days elapsed in such
year.
(ii) BENEFITS. During the Service Term, Executive will be
entitled to such other benefits approved by the Board and made available to
the Company's senior executives, including participation in the Company's
healthcare plan. In addition, Executive will receive a luxury class car to
be provided by Alamo Rent-a-Car on a leased basis during the Service Term.
Executive shall also be eligible to receive four weeks paid vacation per
annum.
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(iii) OPTIONS. Executive, upon approval of the Stock Option
Committee of the Board of Directors, shall receive a stock option grant for
the purchase of 150,000 shares of the Common Stock of the Company. In
addition, Executive shall be eligible for additional grants, subject to the
approval of the Stock Option Committee, to the extent he remains an
employee of the Company on the dates and in the amounts listed below:
May 4, 2000 .................... 75,000 shares
May 4, 2001 .................... 50,000 shares
May 4, 2002 .................... 25,000 shares
All options shall vest annually over a four-year period and
shall expire not later than the tenth anniversary of the date of grant. The
terms and conditions of the stock options shall otherwise be those set
forth under the Company's stock option plan and shall be consistent with
the terms contained in stock option agreements provided to other key
executives of the Company.
(c) TERMINATION.
(i) EVENTS OF TERMINATION. Executive's employment with the
Company shall cease upon:
(A) Executive's death.
(B) Executive's voluntary retirement.
(C) Executive's disability, which means his incapacity due
to physical or mental illness such that he is unable to perform the
essential functions of his previously assigned duties for a period of six
months in any twelve month period and such incapacity has been determined
to exist by either (x) the Company's disability insurance carrier or (y) by
the Board in good faith based on competent medical advice in the event that
the Company does not maintain disability insurance on the Executive.
(D) Termination by the Company by the delivery to Executive
of a written notice from the Board that Executive has been terminated
("NOTICE OF TERMINATION") with or without Cause or with Performance Cause.
"CAUSE" shall mean:
(1) Executive's (aa) conviction of a felony or
Executive's commission of any other act or omission involving
dishonesty or fraud with respect to the Company or any of its
Affiliates or any of their customers, vendors or suppliers or
involving harassment or discrimination with respect to the
employees of the Company or its Subsidiaries, (bb)
misappropriation of funds or assets of the Company for personal
use or (cc) engaging in any conduct relating to the Company's
business or involving moral turpitude that actually brought the
Company or any of its Affiliates into public disgrace or
disrepute;
(2) Executive's continued substantial and repeated
neglect of his duties, after written notice thereof from the
Board, and such neglect has not been cured within 30 days after
Executive receives notice thereof from the Board;
(3) Executive's gross negligence or willful misconduct
in the performance of his duties hereunder that results, or is
reasonably expected to result, in material damage to the Company;
or
(4) Executive's engaging in conduct constituting a
breach of Sections 2 or 3 hereof within 15 days of any
notice of default thereof from the Company.
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"PERFORMANCE CAUSE" shall mean Executive's termination within 90
days after the Company's failure to achieve at least 75% of its
budgeted net income as determined in accordance with generally
accepted accounting principles for any four consecutive fiscal
quarters for which financial statements are available and such
failure is reasonably expected to continue for at least two
additional fiscal quarters thereafter; provided, however, that
the Board shall determine in good faith if any adjustments
thereto are necessary or appropriate to account for extraordinary
or nonrecurring events (including but not limited to Acts of God,
substantive travel industry events (e.g., materially adverse tax
or regulatory changes), travel industry strikes, wars, terrorism)
or other circumstances that should be included or disregarded in
order to fairly determine whether the Company has failed to
achieve such budgeted net income; and provided, however, that in
no fiscal year will budgeted income growth be greater than 30%.
In order for the termination to be effective: Executive must be
notified in writing (which writing shall specify the cause in
reasonable detail) of any termination of his employment for Cause
or Performance Cause. Executive will then have the right, within
ten days of receipt of such notice, to file a written request for
review by the Company. In such case, Executive will be given the
opportunity to be heard, personally or by counsel, by the Board
and a majority of the Directors must thereafter confirm that such
termination is either for Cause or Performance Cause. If the
Directors do not provide such confirmation, the termination shall
be treated as other than for Cause or Performance Cause.
Notwithstanding anything to the contrary contained in this
paragraph, Executive shall have the right after termination has
occurred to appeal any determination by the Board to arbitration
in accordance with the provisions of Section 3(g) hereof.
The delivery by the Company of notice to Executive that
it does not intend to renew this Agreement as provided in Section
1(d) shall constitute a termination by the Company without Cause
unless such notice fulfills the requirements of Section
1(c)(i)(D)(1), (2), (3) or (4) above.
(E) Executive's voluntary resignation by the delivery
to the Board of at least 45 days written notice from Executive
that Executive has resigned with or without Good Reason. "GOOD
REASON" shall mean Executive's resignation from employment with
the Company within 45 days after the occurrence of any one of the
following:
(1) the failure of the Company to pay an
amount owing to Executive hereunder after Executive has
provided the Company with written notice of such failure and
such payment has not thereafter been made within 15 days of
the delivery of such written notice; or
(2) the relocation of Executive from his work
location in Washington, D.C. or Long Island, New York area
without his consent.
The delivery by the Executive of notice to the Company
that he does not intend to renew this Agreement as provided in
Section 1(d) shall constitute a resignation by the Executive
without Good Reason unless such notice fulfills the requirements
of Section 1(c)(i)(E)(1) or (2) above.
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(ii) RIGHTS ON TERMINATION.
(A) In the event that termination is by Executive with
Good Reason or by the Company without Cause (including by
operation of the last paragraph of Section 1(c)(i)(D)) or
Performance Cause, the Company will continue to pay Executive a
monthly portion of the Annual Base Salary plus a monthly portion
of the Executive's bonus for the prior year for a period equal to
twelve-months commencing on the date of termination on regular
salary payment dates. In the event that termination is by the
Company for Performance Cause, the Company will continue to pay
Executive a monthly portion of the Annual Base Salary for a
period equal to three-months commencing on the date of
termination on regular salary payment dates. The payments to
Executive pursuant to the foregoing two sentences are referred to
as the "SEVERANCE PAYMENTS."
(B) If the Company terminates Executive's employment
for Cause, if Executive retires or if Executive resigns without
Good Reason (including by operation of the last paragraph of
Section 1(c)(i)(E)), the Company's obligations to pay any
compensation or benefits under this Agreement will cease
effective as of the date of termination. Executive's right to
receive any other health or other benefits will be determined
under the provisions of applicable plans, programs or other
coverages.
(C) If Executive's employment terminates because of
Executive's death or disability, the Company will pay Executive
or his estate an amount, if any, equal to his bonus for the
current year prorated to reflect the number of days Executive has
worked during the year in which he dies or becomes disabled (such
amount to be paid after the end of such year when bonuses are
normally paid to other senior executives of the Company).
Notwithstanding the foregoing, the Company's obligation to Executive
for severance pay or other rights under either subparagraphs (A) or (B) above
(the "SEVERANCE PAY") shall cease if Executive is in violation of the provisions
of Sections 2 or 3 hereof. Until such time as Executive has received all of his
Severance Payments, he will be entitled to continue to receive any health, life,
accident and disability insurance benefits provided by the Company to Executive
under this Agreement. If Executive dies or is permanently disabled, then
Executive or his estate shall be entitled to any disability income or life
insurance payments from any insurance policies paid for by the Company or its
Affiliates as specified in such policies.
(d) TERM OF EMPLOYMENT. Unless Executive's employment under this
Agreement is sooner terminated as a result of Executive's termination in
accordance with the provisions of Section 1(c) above, Executive's employment
under this Agreement shall commence as of May 3, 1999 and shall terminate on the
third anniversary of said date (the "SERVICE TERM"); provided, however, that
Executive's employment under this Agreement, and the Service Term, shall be
automatically renewed for one-year periods commencing on the third anniversary
of said date and, thereafter, on each successive anniversary of such date unless
either the Company or Executive notifies the other party in writing within sixty
(60) days prior to any such anniversary that it or he desires to terminate
Executive's employment under this Agreement. All references herein to "SERVICE
TERM" shall include any renewals thereof after the third anniversary of the date
hereof.
2. CONFIDENTIAL INFORMATION AND GOODWILL; INVENTIONS. Executive
acknowledges and agrees that:
(a) As a necessary function of Executive's employment hereunder,
Executive will have access to and utilize Confidential Information which
constitutes a valuable and essential asset of the Company's business.
(b) The Confidential Information, observations and data obtained by
him during the course of his performance under this Agreement concerning the
business and affairs of the Company are the property of the Company, including
information concerning the acquisition opportunities in or reasonably related to
the Business of which Executive becomes aware during the Service Term.
Therefore, Executive agrees that he will
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not disclose to any unauthorized person or use for his own account any of the
Confidential Information without the Board's written consent. Executive agrees
to deliver to the Company at the termination of his employment, or at any other
time the Company may request, all memoranda, notes, plans, records, reports and
other documents (including copies thereof) relating to the Company, the Business
or any other Confidential Information.
(c) All inventions, innovations, developments, improvements, methods,
designs, analyses, drawings, software, reports and all similar or related
information (whether or not patented or patentable) developed by Executive
during the Service Term which (i) directly or indirectly relate to the Company
or its Affiliates or the Business, or (ii) result from any work performed by
Executive while employed by the Company or its Affiliates shall belong to the
Company and its Affiliates. Executive shall promptly disclose all such
inventions to the Board and perform all actions reasonably requested by the
Board (whether during or after the Service Term) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
3. NONCOMPETITION AND NONSOLICITATION.
(a) NONCOMPETITION. Executive acknowledges that in the course of his
employment with the Company he will become familiar with the Company's and its
Affiliates' trade secrets and with other confidential information concerning the
Company and that his services will be of special, unique and extraordinary value
to the Company and its Affiliates. Therefore, Executive agrees that, during the
Service Term and for a period of one (1) year after termination thereof
(collectively, the "NONCOMPETE PERIOD"), he shall not directly or indirectly
own, manage, control, participate in, consult with, render services for, or in
any manner engage in any business competing with the business of the Company and
its Subsidiaries or any businesses with which the Company or its Subsidiaries
have firm plans to engage in at the time of the termination of the Executive's
employment with the Company.
(b) NONSOLICITATION. During the Noncompete Period and for a period of
one (1) year thereafter, Executive shall not directly or indirectly through
another entity (i) induce or attempt to induce any senior management employee of
the Company or any Subsidiary or, to the actual knowledge of the Executive, any
other employee of the Company or any Subsidiary, to leave the employ of the
Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof or (ii) induce or
attempt to induce any customer, supplier, vendor, licensee or other business
relation of the Company or any Subsidiary to cease doing business with the
Company or such Subsidiary, or to modify its business relationship with the
Company in a manner adverse to the Company or any Subsidiary, or in any way
disparage the Company or its Subsidiaries to any such customer, supplier,
vendor, licensee or business relation of the Company or any Subsidiary.
(c) ENFORCEMENT. The Executive understands and agrees the terms and
conditions of Executive's employment hereunder are in consideration for
Executive's covenants contained in Section 2 and 3 of this Agreement. If, at the
time of enforcement of Section 2 or 3 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing
the parties hereto agree that the maximum duration, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum duration, scope and area permitted by law.
Because Executive's services are unique and because Executive has access to
confidential information, the parties hereto agree that money damages would be
an inadequate remedy for any breach of this Agreement. Therefore, in the event a
breach or threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies existing in their favor,
apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce, or prevent any violations of,
the provisions hereof (without posting a bond or other security).
GENERAL PROVISIONS
4. DEFINITIONS.
"AFFILIATE" of any Person means any other Person which directly or
indirectly controls, is controlled by or is under common control with such
Person.
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"BOARD" means the Company's board of directors or the board of
directors or similar management body of any successor of the Company.
"BUSINESS" means any business of the Company or its Subsidiaries now
or hereafter engaged in, including without limitation the business of providing
travel products.
"COMPETITIVE ACTIVITY" means any business or activity of Executive or
any third party that is the same as the Business or competitive with the
Business.
"CONFIDENTIAL INFORMATION" means all confidential information and
trade secrets of the Company and its Affiliates including, without limitation,
the following: the identity, written lists, or descriptions of any customers,
referral sources or Organizations; financial statements, cost reports, or other
financial information; contract proposals or bidding information; business
plans; training and operations methods and manuals; personnel records; fee
structures; and management systems, policies or procedures, including related
forms and manuals. "Confidential Information" shall not include any information
or knowledge which: (a) is in the public domain other than by Executive's breach
of this Agreement or (b) is disclosed to Executive lawfully by a third party who
is not under any obligation of confidentiality.
"ORGANIZATION" means any organization that has contracted with the
Company for the performance of services in connection with the Business.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"SUBSIDIARY" means any corporation of which the Company owns
securities having a majority of the ordinary voting power in electing the board
of directors directly or through one or more subsidiaries.
5. NOTICES. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class United States
mail (postage prepaid, return receipt requested) or sent by reputable overnight
courier service (charges prepaid) or by facsimile to the recipient at the
address below indicated:
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If to the Executive:
Xxx X. Xxxxxx
c/o Global Vacation Group
0000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
If to the Company:
0000 Xxx Xxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxxxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
6. GENERAL PROVISIONS.
(a) EXPENSES. Each party shall bear his or its own expenses in
connection with the negotiation and execution of this Agreement and the
consummation of the transactions contemplated by this Agreement.
(b) SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) COMPLETE AGREEMENT. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company and their respective successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable.
(f) CHOICE OF LAW. This Agreement will be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
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(g) REMEDIES AND ARBITRATION. Each of the parties to this Agreement
will be entitled to enforce its rights under this Agreement to recover damages
and costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. Except for the remedies of the Company provided in Section 3(c) hereof,
the parties hereto agree to submit any disputes arising out of or relating to
this Agreement to binding arbitration in Washington, D.C. administered by the
American Arbitration Association under its Commercial Arbitration Rules, before
a panel of three arbitrators, and judgment on the award rendered by the
arbitrators may be entered into any court having jurisdiction thereof. The
prevailing party in any arbitration shall be entitled to recover its reasonable
attorneys' fees and costs from the other party or parties.
(h) AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive.
(i) BUSINESS DAYS. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or holiday in the
state in which the Company's chief executive office is located, the time period
shall be automatically extended to the business day immediately following such
Saturday, Sunday or holiday.
(j) TERMINATION. This Agreement (except for the provisions of Section
1) shall survive the termination of Executive's employment with the Company and
shall remain in full force and effect after such termination.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
GLOBAL VACATION GROUP, INC.
By:
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Xxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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XXX X. XXXXXX
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