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EXHIBIT 10.6
EXECUTIVE COMPENSATION AGREEMENT
BY THIS EXECUTIVE COMPENSATION AGREEMENT (the "Agreement") made and
entered into this 1st day of March, 1998, SUPERSHUTTLE INTERNATIONAL, INC., a
Delaware corporation (the "Company") and R. XXXXX XXXX ("Executive"), state,
confirm and agree as follows:
I. RECITALS
1.1 The Company is engaged in the business of providing transportation
services to airports and travelers in various cities in the United States ("the
Business"). The Company anticipates that its Business may be conducted on a
nationwide basis in the future. All locations in which material portions of the
Company's Business are, or may during the term of Executive's employment by the
Company be, conducted are hereinafter collectively referred to as the "Market
Area."
1.2 Executive is a key employee of the Company, having substantial
knowledge and expertise in, and having personal relationships affecting, the
operations, business contacts, trade secrets, marketing strategies and other
confidential matters of critical significance to the conduct of the Company's
Business and its future prospects (the "Trade Secrets"). The loss of Executive
during the term of this Agreement, or the aid or assistance to any competitor of
the Company by Executive or direct competition of Executive respecting the
Company's Business within the Market Area would materially and irreparably
injure the Company.
1.3 The Company desires to hire Executive, and Executive desires to accept
such employment, on the terms and conditions hereinafter set forth.
II. AGREEMENTS
2.1 Employment. the Company hereby employs Executive, and Executive hereby
accepts such employment from the Company, on the terms and conditions set forth
in this Agreement.
2.2 Term. The term of this Agreement shall commence on March 1, 1998, and
shall continue, unless sooner terminated, until February 28, 2001.
2.3 Duties. Executive agrees to serve the Company in his present capacity
as President and Chief Executive Officer during the term of this Agreement.
Executive further agrees to use his best efforts, and apply his skill and
experience, to the proper performance of his duties hereunder and to the
business and affairs of the Company. Executive agrees to serve the Company
faithfully, diligently and to the best of his ability. The principal location
from which Executive will serve the Company and perform his duties hereunder
shall be Phoenix, Arizona.
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2.4 Compensation. For all services rendered by Executive in any capacity
during his employment under this Agreement, including, without limitation,
services as a director, officer or member of any committee of the Board of
Directors (the "Board") of the Company or any subsidiary or affiliate of the
Company, the Company shall compensate Executive as follows:
(a) Base Compensation. Commencing upon March 1, 1998, the Company
shall pay Executive an annual base salary of not less than $175,000 (the "Base
Salary") during the term hereof. Executive's Base Salary may be increased by the
Company during the term of this Agreement based upon the Executive's and the
Company's performance. Notwithstanding the foregoing, in the case of substantial
and persistent deterioration of the Company's performance the Company may reduce
Executive's Base Salary consistent with similar salary reductions of other
Company officers until the Company's performance improves. Executive's Base
Salary shall be paid by the Company in bi-weekly installments commensurate with
the Company's normal employee pay days.
(b) Incentive Compensation. Executive shall be entitled to
participate in any incentive compensation plan either currently in effect or as
may be established from time to time by the Board of Directors of the Company,
for which Executive, as an officer of the Company, may be eligible to
participate.
(c) Additional Benefits. Executive shall have the right as an
employee of the Company to participate in all employee benefit and welfare
programs, plans and arrangements (including, without limitation, pension,
profit-sharing, supplemental pension and other retirement plans, insurance,
hospitalization, medical and disability benefits, travel or accident insurance
plans) and any other fringe benefits offered by the Company to its employees as
set forth in the Company's employee handbook, and compensation received by
Executive hereunder shall be in addition to the foregoing.
2.5 Termination.
(a) Death. In the event of the Executive's death during the term of
this Agreement, this Agreement shall thereupon terminate and the Company shall
pay to the Executive's beneficiary or estate, as that term is hereinafter
defined, the pro rata portion of the Executive's salary which was earned but
unpaid at the date of the Executive's death. In addition, all of the Executive's
vested unexercised stock options for the purchase of the Company's capital stock
shall be exercisable by Executive's beneficiary or estate in accordance with the
terms of the plans and agreements pursuant to which such options were granted.
As used herein, the term "beneficiary or estate" means the person or
persons designated by the Executive in the last written notice delivered to the
Company during his lifetime, or in the absence of such written notice, such
person or persons designated by the Executive in his last will and testament
specifically to receive Executive's benefits under the terms of this Agreement,
or, in the absence of both written notice and such a designation, the
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Executive's estate. In the event that the Executive should during his lifetime
designate a person or persons other than his wife as beneficiary or
beneficiaries in such written notice, such notice to be valid must contain the
signed consent of the Executive's spouse.
(b) Permanent Disability. In the event the Executive should become
permanently disabled during the term of this Agreement, then this Agreement
shall terminate. For the purposes hereof, "permanent disability" shall mean that
disability resulting from injury, disease or other cause, whether mental or
physical, which incapacitates the Executive from performing his normal duties as
an employee, which appears to be permanent in nature and contemplates the
continuous, necessary and substantially complete loss of all professional
activities.
(c) Partial Disability. If the Executive should become partially
disabled, the Company shall be entitled to his salary as provided herein for a
period of ninety (90) days following the commencement of such disability. At the
end of such ninety (90) day period, if the Executive remains partially disabled,
his salary shall be reduced according to the amount of time Executive is able to
devote to the Company's business.
(d) Temporary Disability. In the event the Executive should become
disabled, and such disability is not partial, as defined above, such disabled
Executive shall be entitled to his salary for a period of ninety (90) days. If
such temporary disability continues longer than such ninety (90) day period,
then Executive shall be deemed to have become permanently disabled for the
purposes of this Agreement at the end of said ninety (90) day period.
(e) Voluntary Withdrawal. The Executive may voluntarily terminate
his employment hereunder by giving at least thirty (30) days prior written
notice to the Board of his intention to withdraw. Such notice shall specify the
end of a calendar month as the termination date. Any unexplained absence for a
period of 30 consecutive days shall be deemed to be a voluntary termination of
employment. In the event Executive voluntarily terminates his employment
hereunder, he shall be entitled to a severance payment equal to the lesser of
$60,000 or the remaining Base Salary due under this Agreement. Notwithstanding
the foregoing, if Executive voluntarily terminates his employment hereunder for
Good Reason (as defined below) Executive shall be entitled to the severance
benefits payable under Subsection (f) below. "Good Reason" shall mean, without
Executive's express written consent, the failure of the Board of Directors of
the Company to elect Executive as President and Chief Executive Officer of the
Company or the assignment to Executive of any duties inconsistent with
Executive's status as an executive officer of the Company or a substantial
adverse alteration in the nature or status of Executive's responsibilities from
those in effect upon the date hereof.
(f) Dismissal. The Company may terminate Executive's employment
under this Agreement at any time for any reason whatsoever by giving at least
thirty (30) days written notice to the Executive at his address as listed on the
Company's records specifying the effective date of termination. In the event of
dismissal, payments for compensation and charges for
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expenses shall be prorated to the date of termination. Upon the termination of
Executive's employment following Executive's conviction of a crime constituting
a felony, Executive shall not be entitled to any severance benefits. Upon the
termination of Executive's employment if such termination is other than for
Disability or for the reason stated in the immediately preceding sentence,
Executive shall be entitled to the benefits below:
(i) The Company shall pay Executive's full base salary through
the Termination Date (as defined below) at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which Executive
is entitled under any compensation or benefit plan of the Company, at the
time such payments are due, including a lump sum cash payment for all
unused vacation time which Executive has accrued as of the Termination
Date;
(ii) In lieu of any further salary payments to Executive for
periods subsequent to the Termination Date, the Company shall pay to
Executive as severance pay a lump sum severance payment (the "Severance
Payment") equal to two (2) times either (i) the Annual Compensation (as
defined below) which was payable to Executive by the Company for the year
immediately preceding the Termination Date, or (ii) the average of the
Annual Compensation which was payable to Executive by the Company for the
two (2) years preceding the Termination Date, whichever is greater. Annual
Compensation is Executive's Base Salary and any annual bonus that was paid
to Executive by the Company and the amount of income from Executive's
exercise of non-qualified stock options, if any, determined without any
reduction for any deferrals of such salary or such bonus under any
deferred compensation plan (qualified or unqualified) and without any
reduction for any salary reductions used for making contributions to any
group insurance plan of the Company or its affiliates;
(iii) All of the Executive's stock options for the purchase of
the Company's capital stock that are presently vested and exercisable
shall be exercisable by Executive for period of one (1) year following the
effective date of termination of Executive's employment; and
(iv) If Executive's employment shall be terminated as above
set forth then, for a twenty-four (24) month period after such
termination, the Company shall arrange to provide Executive with life,
disability, accident and health insurance benefits substantially similar
to those which Executive is received immediately prior to the Notice of
Termination. Benefits otherwise receivable by Executive pursuant to this
Subsection (iv) shall be reduced to the extent comparable benefits are
actually received by Executive during the twenty-four (24) month period
following Executive's termination, and any such benefits actually received
by Executive shall be reported by Executive to the Company.
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The payments provided for in this subparagraph (f) shall
be made not later than the fifth day following the Termination date;
provided, however, that if the amount of such payment cannot be finally
determined on or before such day, the Company shall pay to Executive on
such day an estimate, as determined in good faith by the Company, of the
minimum amount of such payments and shall pay the remainder of such
payments as soon as the amount thereof can be determined but in no event
later than the thirtieth day after the Date of Termination. In the event
that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the
Company to Executive payable on the fifth day after demand by the Company.
Notwithstanding the foregoing, the Company may elect to pay any amounts
due under Subsection (f)(ii) in monthly installments for the two (2) year
period in accordance with the Company's normal pay days;
(g) Change in Control. In the event the Company terminates
Executive's employment or Executive voluntarily terminates his employment
following a Change in Control (as defined below), Executive shall be entitled to
the benefits set forth in Section 2.5(f)(i) and (ii). In addition, all of
Executive's stock options for the purchase of the Company's capital stock shall
vest, to the extent not already vested, and shall be exercisable by Executive
for a period of ninety (90) days following the effective date of termination of
Executive's employment. "Change in Control" shall mean and shall be deemed to
have occurred if, after the date of this Agreement, any "person" (as such term
is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or any successor provision thereto) shall become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act or
any successor provision thereto) in a single transaction or series of related
transactions of securities of the Company resulting in a fifty-one percent (51%)
or more change in the combined voting power of the Company's outstanding
securities as of the date of this Agreement.
2.6 Covenant Not to Compete.
(a) Non-Compete. Executive shall during the term or extended term of
this Agreement, and for a period of two (2) years thereafter, exercise his best
good faith efforts to pursue and protect the Trade Secrets from disclosure or
access to, or use by, any competitor or potential competitor of the Company and
its subsidiaries. Executive shall not during the term or extended term of this
Agreement, and for a period of two (2) years thereafter, (a) induce or encourage
any other employee of the Company or its subsidiaries to become employed by or
to provide any Trade Secrets to any competitor or potential competitor of the
Company or its subsidiaries; (b) during the term or extended term of this
Agreement, and or a period of two (2) years thereafter, own, directly or
indirectly, manage, serve as an officer, director or partner of, or otherwise
(whether actively or by passive investment) become associated with any person or
entity engaged in a business in competition with the Company's business in the
Market Area. The foregoing covenants by Executive shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of the
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Executive against the Company whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of said
covenants. If any of the covenants of Executive set forth in this paragraph
shall be deemed too broad to be enforceable by judicial process, then such
covenants shall be reduced to such levels as shall be so enforceable and shall
be enforced as reduced. Notwithstanding the foregoing, in the event this
Agreement expires by its terms, Executive shall not be subject to the two (2)
year non-compete provisions hereof.
(b) Remedies. Executive expressly agrees and acknowledges that this
covenant not to compete is necessary for the Company's and its affiliates'
protection because of the nature and scope of their business and his position
with the Company. Further, Executive acknowledges that, in the event of his
breach of his covenant not to compete, money damages will not sufficiently
compensate the Company for its injury caused thereby, and he accordingly agrees
that, in addition to such money damages, he may be restrained and enjoined from
any continuing breach of this covenant not to compete without any bond or other
security being required of any court. Executive acknowledges that any breach of
this covenant not to compete would result in irreparable damage to the Company.
Executive acknowledges that the remedy at law for any breach or threatened
breach of Section 2.6 will be inadequate and, accordingly, that the Company
shall, in addition to all other available remedies (including, without
limitation, seeking such damages as it can show it has sustained by reason of
such breach), be entitled to injunctive relief or specific performance.
2.7 Representations and Warranties. The Executive hereby represents and
warrants that the execution of this Agreement and the discharge of his
obligations hereunder will not breach or conflict with any other contracts,
agreements, covenants or understandings, either oral or written, between the
Executive and any other party or parties.
2.8 Assignment. This Agreement and the rights, interests and benefits
shall not be assigned, transferred, pledged or hypothecated in any way and shall
not be subject to execution, attachment or similar process. Any attempt to
assign, transfer, pledge or hypothecate or make any other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provision or the levy of any attachment or similar process thereupon, shall be
null and void and without effect and shall relieve the Company and Executive of
any and all liability hereunder.
2.9 Attorneys' Fees. In the event either party hereto institutes an action
or other proceeding to enforce any rights arising under this Agreement, the
party prevailing in such action or other proceeding shall be paid all reasonable
costs and attorneys' fees by the other party, such fees to be set by court and
not by the jury.
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2.10 Notices. Any notice or communication to be given under the terms of
this Agreement ("Notice") shall be in writing and delivered in person or
deposited, certified or registered, in the United States mail, postage prepaid,
addressed as follows:
If to the Company: SuperShuttle International, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board
If to Executive: R. Xxxxx Xxxx
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or at such other address as either party may from time to time designate by
Notice hereunder. Notices shall be effective upon delivery in person, or if
mailed at midnight on the third business day after the date of mailing.
2.11 Modifications and Amendments. This Agreement shall not be altered or
amended except by a written agreement signed by the parties hereto.
2.12 Entire Agreement. This Agreement constitutes and embodies the full
and complete understanding and agreement of the parties hereto and supersedes
all prior understandings or agreements whether oral or in writing.
2.13 Benefit and Binding Effect. Except as herein otherwise expressly
provided, this Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns, including any corporation, person or
other entity which may acquire all or substantially all of the assets of the
business of the Company or any other corporation with or into which the Company
is consolidated or merged, and the Executive and his heirs, executors,
administrators and legal representatives; provided, however, that the
obligations of Executive hereunder may not be delegated or assigned.
2.14 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona without regard to the conflicts
of laws principles thereof.
2.15 Headings; Interpretation; Gender. The paragraph headings used herein
are for convenience and reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Agreement. When used in
this Agreement, the term "including" shall mean without limitation by reason of
enumeration. Words used herein in the singular shall include the plural and
words used herein in the masculine gender shall include the feminine in all
cases where such would apply.
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2.16 Waiver. The failure of either party to insist, in any one or more
instances, upon strict performance of any of the terms or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right
granted hereunder or of the future performance of any such term, covenant or
condition, but the obligations of either party with respect thereto shall
continue in full force and effect.
2.17 Severability. In the event that any portion of this Agreement may be
held to be invalid or unenforceable for any reason whatsoever, it is agreed that
said invalidity or unenforceability shall not affect the other portions of this
Agreement and that the remaining covenants, terms and conditions, or portions
thereof, shall remain in full force and effect, and any court of competent
jurisdiction may so modify the objectionable provisions as to make it valid,
reasonable and enforceable.
2.18 Entire Agreement. This Agreement constitutes and embodies the full
and complete agreement and understandings of the parties with respect to the
Executive's employment with the Company and supersedes any and all other
agreements, either oral or written, between the parties hereto with respect to
the subject matter hereof.
2.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed a duplicate original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
_____ day of March, 1998.
SUPERSHUTTLE INTERNATIONAL, INC.
BY___________________________________
Its_______________________________
COMPANY
_____________________________________
R. Xxxxx Xxxx
EXECUTIVE
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