EXHIBIT 10.5
FORM OF EMPLOYMENT AGREEMENT
This agreement ("Agreement") is made effective the date set forth at
the end of this Agreement by and between ARAMEX INTERNATIONAL LIMITED, a
Bermuda corporation (the "Corporation") and the employee named at the end of
this Agreement (the "Executive").
In consideration of the mutual covenants herein contained, the
parties agree as follows:
1. POSITION AND RESPONSIBILITIES.
1.1 The Executive shall serve in the position and capacity
identified on Exhibit A attached to this Agreement and shall perform the
duties commensurate with such capacity for the Corporation and for any
subsidiary or affiliate of the Corporation, if applicable. The Company shall
also take all steps within the Company's control to cause the Executive to be
a member of the Board of Directors of the Company. The Executive shall not be
assigned any duties inconsistent with his position as identified on Exhibit A
hereto.
1.2 The Executive shall devote such time to the business and
affairs of the Corporation and to the promotion of its interests as is
necessary or advisable.
2. EMPLOYMENT TERM.
2.1 The initial term of employment shall be for a period of two
years, commencing with the effective date hereof, unless sooner terminated as
provided in this Agreement. This Agreement shall be renewed annually for a
term of one year unless the Corporation or the Executive gives notice to the
other of termination at least 30 days prior to
the expiration of the initial term, or any successive term, as the case may
be. Each of the Executive and the Corporation at his or its sole discretion
and without any reason, may elect not to renew this Agreement at the end of
the initial term or any successive term.
2.2 Notwithstanding the provisions of paragraph 2.1 above, the
Corporation shall have the right to terminate the Executive's employment for
Cause (as defined in paragraph 2.3 below); provided, however, that the
Executive shall not be deemed to have been terminated for Cause unless and
until the Board of Directors at a meeting duly called and held for that
purpose shall have determined that the Executive committed an act falling
within the definition of Cause and specifying the basis for such
determination.
2.3 For purposes of this Agreement, the term "Cause" shall mean the
Executive's: (a) engagement in gross misconduct materially injurious to the
Corporation; (b) knowing and willful neglect or refusal to attend to the
material duties assigned to him by the Board of Directors of the Corporation,
which is not cured within 30 days after written notice; (c) intentional
misappropriation of property of the Corporation to the Executive's own use;
(d) commission of an act of fraud or embezzlement; or (e) conviction for a
crime (excluding minor traffic offenses).
2.4 Any purported termination of the Executive's employment by the
Corporation hereunder shall be communicated by a Notice of Termination to the
Executive in accordance with paragraph 15. For purposes of this Agreement, a
"Notice of Termination" shall mean a written notice which shall indicate
those specific termination provisions in this Agreement relied upon and which
sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provisions so indicated.
2
2.5 For purposes of this Agreement the date of termination shall
be: (a) if this Agreement is terminated by the Corporation for Incapacity (as
defined in paragraph 4.1 below), the date on which a Notice of Termination is
given, (b) if the Executive's employment is terminated by the Corporation for
any other reason (other than death), the date on which a Notice of
Termination is given or (c) if the Executive terminates his employment for
any reason, the date on which he gives the Corporation notice of such
termination.
3. COMPENSATION.
3.1 The Corporation shall pay to the Executive for the services to
be rendered by the Executive hereunder a salary for the initial term of
employment under this Agreement at the rate per annum set forth on Exhibit A
to this Agreement. The salary shall be payable less frequently than monthly
in accordance with the Company's regular policies. Such salary will be
reviewed at least annually after the initial term and may be increased by the
Board of Directors of the Corporation, based upon the recommendations of the
Executive Compensation Committee of the Board of Directors.
3.2 The Executive shall receive a cash bonus with respect to each
whole year of the Corporation during which he is employed hereunder,
commencing with the year ending December 31, 1996, in an amount to be to be
determined by the Board of Directors of the Corporation.
3.3 The Executive shall be entitled to participate in, and receive
benefits from, any vacation, holiday, insurance, medical, disability, or
other employee benefit plan of the Corporation which may be in effect at any
time during the course of his employment by the Corporation and which shall
be generally available to senior executives of the Corporation occupying
positions of comparable status or responsibility. During the term hereof, the
3
Company shall provide for the Executive's use a Company automobile and
shall pay all maintenance and operating expenses related thereto, including,
without limitation, depreciation and full risk insurance costs. In addition,
the Company shall obtain comprehensive health and travel insurance for the
Executive and his immediate family.
3.4 The Corporation agrees promptly to reimburse the Executive for
all reasonable and necessary business expenses incurred by him on behalf of
the Corporation in the course of his duties hereunder upon the presentation
by the Executive of appropriate evidence thereof.
4. DEATH; INCAPACITY.
4.1 If, during the Employment Term hereunder, because of illness or
other incapacity, the Executive shall fail for a period of six (6)
consecutive months ("Incapacity"), to render the services contemplated
hereunder, then the Corporation, at its option, may terminate the Employment
Term hereunder by notice to the Executive, effective on the giving of such
notice; provided, however, that the Executive shall be entitled to continue
to receive 60% of his salary hereunder for a two-year period of time from the
Notice of Termination.
4.2 In the event of the death of the Executive during the
Employment Term, the Employment Term hereunder shall terminate on the date of
death of the Executive; provided, however, that the Executive (or his estate)
shall be entitled to any benefits accrued under the Corporation's death,
disability or other benefit plan and shall be entitled to receive a lump sum
payment equal to his then annual salary.
4
5. SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT.
5.1 If the Executive's employment with the Corporation shall be
terminated (a) by the Corporation other than pursuant to paragraph 2.2 or
paragraph 4, or (b) by the Executive for Good Reason (as defined in paragraph
5.2 below), then the Corporation shall:
(i) pay to Executive as severance pay, payable at the time of
termination, an amount equal to three (3) times his then annual salary,
except that such payment shall be reduced to the extent necessary so that no
portion of such payment will be treated as an "excess parachute payment" (as
defined in Section 280G of the Internal Revenue Code of 1986) and
(ii) arrange to provide Executive, for a twelve-month period
(or such shorter period as Executive may elect), with disability, accident
and health insurance substantially similar to those insurance benefits which
Executive is receiving immediately prior to the earlier of a Major Event, if
any, or the date of termination to the extent obtainable upon reasonable
terms; provided, however, if it is not so obtainable the Corporation shall
pay to the Executive in cash the annual amount paid by the Corporation for
such benefits during the previous year of the Executive's employment.
5.2 For purposes of this Agreement, the term "Good Reason" shall
mean any of the following:
(i) a Major Event;
(ii) the assignment to the Executive by the Corporation of
duties inconsistent with, or a substantial alteration in the nature or status
of, Executive's responsibilities on the later of the date of this Agreement
or on the last date on which such responsibilities are increased;
5
(iii) a reduction by the Corporation in the Executive's base
salary as in effect on the later of the date of this Agreement or the last
date on which such base salary is increased;
(iv) a relocation of the Corporation's principal executive
offices to a location outside Amman, Xxxxxx area, or the relocation by the
Corporation of the Executive to any place other than the principal executive
offices of the Corporation, except for required travel by the Executive on
the Corporation's business;
(v) any material breach by the Corporation of any material
provision of this Agreement; provided, however, that the Executive shall give
written notice to the Corporation which shall indicate those specific
provisions in this Agreement relied upon and which shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
such termination;
(vi) any failure by the Corporation to obtain the assumption
of this Agreement by any successor or assign of the Corporation; or
(vii) any purported termination of the Executive's employment
by the Corporation which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 2.4 above, and for purposes of this
Agreement, no such purported termination shall be effective.
5.3 For purposes of this Agreement, a "Major Event" shall be
deemed to have occurred if (i) there shall be consummated any consolidation
or merger of the Corporation in which the Corporation is not the continuing
or surviving corporation or pursuant to which shares of the Corporation's
common stock would be converted into cash, securities or other property,
other than a merger of the Corporation in which the holders of the
Corporation's common stock
6
immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger; (ii)
there shall be consummated any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of the Company; (iii) proceedings or actions for the
liquidation or dissolution of the Company are initiated by the Company; or
(iv) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) (other than persons who beneficially own more than 30% of the capital
stock of the Company on a fully diluted and as converted basis outstanding as
of the date hereof) becomes the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended ("Exchange Act")),
directly or indirectly, of 30% or more of the Company's outstanding capital
stock on a fully diluted and as converted basis at such time; provided,
however, that a "Major Event" shall not be deemed to have occurred solely by
reason of the consummation of a firmly underwritten public offering by the
Company of common stock registered under the Securities Act of 1933, as
amended.
5.4 (a) The Executive shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor, except to the extent provided in paragraph 5.1
above, shall the amount of any payment provided for under this Agreement be
reduced by any compensation earned by the Executive as a result of employment
by another employer or by retirement benefits after the date of termination,
or otherwise.
(b) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's existing rights, or rights which would accrue solely
as a result of the passage of time, under any benefit plan of the
Corporation, or other contract, plan or arrangement.
7
8. NON-COMPETITION.
8.1 From and after the date hereof to and including the first (1st)
anniversary of the date of termination of this Agreement, the Executive shall
not directly or indirectly become employed by any person, corporation,
partnership or other entity which is primarily engaged in, the business of
international express delivery, in each case in the Territory. The term
"Territory" shall mean any county or city in which the Corporation then
conducts its business. The Executive shall be deemed directly or indirectly
to engage in a business if he participates therein as a director, officer,
stockholder, employee, agent, consultant, manager, salesman, partner or
individual proprietor, or as an investor who has made advances or loans,
contributions to capital or expenditures for the purchase of stock, or in any
capacity or manner whatsoever; provided, however, that the foregoing shall
not be deemed to prevent the Executive from investing in securities if such
class of securities in which the investment is so made constitutes no more
than 10% of the voting stock of any company's securities.
9. OPTIONS. Exhibit A describes the options to be granted to
Executive, if any.
10. ARBITRATION. Any dispute, controversy or claim arising under
or in connection with this Agreement, or the breach hereof, shall be settled
exclusively by arbitration in accordance with the rules then in effect of the
International Chamber of Commerce. Judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof. Any
arbitration held pursuant to this Section 10 shall take place in Bermuda.
Should either party hereto, or any heir, personal representative, successor
or assign of either party hereto, resort to litigation or arbitration to
enforce this Agreement, the party or parties prevailing in such litigation
shall be entitled, in addition to such other relief as may be
8
granted, to recover its or their reasonable attorney's fees and costs in such
litigation or arbitration from the party or parties against whom enforcement
was sought.y
11. SUCCESSOR TO THE COMPANY. (a) The Corporation will require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Corporation, by agreement expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to
perform it if no such succession or assignment had taken place. As used in
this Agreement, "Corporation" shall mean the Corporation as hereinabove
defined and any successor or assign to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
paragraph 11 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, heirs, distributees, devises and legatees. If the Executive
should die while any amounts are still payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's estate. This Agreement shall
not otherwise be assignable by the Executive.
12. NO THIRD PARTY BENEFICIARIES. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person
not a party to this Agreement, except as provided in paragraph 11 hereof.
9
13. HEADINGS. The headings of the paragraphs hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof nor
to affect the meaning thereof.
14. INTERPRETATION. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. If, moreover, any
one or more of the provisions contained in this Agreement shall for any
reason be held to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed by limiting and reducing it, so as
to be enforceable to the extent compatible with the applicable law as it
shall then appear.
15. NOTICES. All notices under this Agreement shall be in writing
and shall be deemed to have been given at the time when delivered personally
or by facsimile transmission, sent by recognized overnight courier service,
or mailed by registered or certified mail, addressed to the address set forth
at the end of this Agreement, or to such changed address as such party may
have fixed by notice; provided, however, that any notice of change of address
shall be effective only upon receipt.
16. WAIVERS. If either party should waive any breach of any
provision of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision
of this Agreement.
17. COMPLETE AGREEMENT; AMENDMENTS. The foregoing is the entire
agreement of the parties with respect to the subject matter hereof and
supersedes in its entirety any letter agreements or other writings by and
among the Executive and the Corporation. This Agreement
10
may not be amended, supplemented, cancelled or discharged except by written
instrument executed by both parties hereto.
18. GOVERNING LAW. This Agreement is to be governed by and
construed in accordance with the laws of Bermuda, without giving effect to
principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date set forth below, and the parties acknowledge that this Agreement
memorializes their agreement since the effective date set forth below.
ARAMEX INTERNATIONAL LIMITED EXECUTIVE
By: __________________________ ______________________________
Authorized Representative
Address for Notices: Address for Notices:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Effective Date of Agreement: ________________________
Execution Date: ________________________
Name of Executive: ________________________
11
EXHIBIT A
Xxxxxxx Xxxxxxx
Chairman of the Board
Annual Base Salary: U.S. $85,000.00
