Exhibit 10.24
iDine Rewards Network, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000-0000
September 25, 2002
Xx. Xxxxxx Xxxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Re: Employment Contract
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Dear Xxxxxx:
On behalf of iDine Rewards Network, Inc. (the "Company"), we are very pleased
to offer you the position of President and Chief Executive Officer. In this
position, you will report directly to the Board of Directors.
The terms of our offer include the following:
1. Duties and Responsibilities - As President and Chief Executive Officer,
you will be responsible for the day-to-day management and operating decisions of
the Company. In addition, you will have full responsibility for all personnel
decisions and for the execution of the Company's business plan, consistent with
the authority granted by the Company's by-laws. The primary situs of your work
will be Miami, Florida unless otherwise directed by the Board of Directors.
Pending relocation to Southeast Florida as provided for below, the Company shall
reimburse you for the reasonable expenses of commuting weekly between your
current home and Miami as well as lodging and a rental car in Miami during the
work week.
2. Board Seat - You will continue to hold your seat on the Board of Directors
during your employment hereunder.
Xx. Xxxxxx Xxxxxxxxx
September 25, 2002
Page 2
3. Starting Date - You will start employment concurrent with the resignation
of the current President and CEO of the Company.
4. Base Salary - Your annual base salary is $500,000 and is paid periodically
in accordance with the Company's payroll practices. Your compensation (both base
salary and target bonus) will be reviewed to determine increase, if any, at the
end of 2003 and annually thereafter.
5. Annual Bonus - Commencing with fiscal year 2003, your annual target cash
bonus opportunity shall be up to 100% of your base salary. Based upon the
achievement of specific goals to be set and agreed to between you and the Board
of Directors by the end of 2002 and annually each year thereafter for so long as
this Agreement remains in effect, you may earn from zero up to 100% of your
annual target bonus amount. Any bonus award for a fiscal year shall be
calculated and paid during the first fiscal quarter of the following fiscal
year. Your bonus, if any, for the period through the end of 2002 shall be in the
discretion of the Board of Directors.
6. Incentive Compensation - Subject to the terms and conditions of the
Company's existing 1996 Long Term Incentive Plan, as amended ("LTIP") and the
further provisions of this Paragraph 6, you will receive an option to purchase
1,000,000 shares of the Company's common stock at a price per share equal to the
10-day trailing average of the closing price per share as of the starting date
of your employment. The option shall vest over 4 years, with the first 25%
vesting on September 30, 2003, and another 25% vesting on each September 30/th/
thereafter. To the extent vested, the option shall remain exercisable by you for
ten years following the date of the grant (subject to reasonable trading
restrictions during Executive's employment hereunder as
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September 25, 2002
Page 3
promulgated by the Board of Directors within 60 days after the date of this
Agreement), or in the event of the termination of your employment for the period
provided in the LTIP. All unvested options shall terminate upon the termination
of your employment for any reason. In the reasonable discretion of the Board of
Directors, within 60 days after the date of this Agreement, the incentive
compensation provided for in this Paragraph 6 may be modified, in whole or in
part, so long as the result is substantially equivalent in value to that which
is provided for above.
7. Employee Benefits - In addition to all normal Company benefit plans, you
will participate in the following Executive Benefit Plan:
. Severance Arrangements - If your employment is terminated by the Company
for any reason other than "Cause" (as defined below), disability or
death: (i) you will receive your annual bonus (to the extent actually
achieved) for that fiscal year prorated for that year based on the
portion of active employment for the year; (ii) you will receive payments
equal to twelve months base salary, plus an amount equal to the average
of your annual bonus (if any) for each of the prior full fiscal years up
to three such years (paid pursuant to Company's normal payroll
practices); (iii) you will have the option to continue coverage in the
Company's health care plan for the statutory period provided by COBRA and
the Company will pay for your costs associated with such participation;
and (iv) prior to the second anniversary of your starting date, the
Company will provide accelerated vesting of your options on a pro rata
basis (using the actual period elapsed from your start date to the date
of termination divided by two years).
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September 25, 2002
Page 4
The Company will require that you sign and comply with a Termination
Agreement as a condition of receiving severance benefits. The Termination
Agreement will include a Non-compete Agreement (as described in Paragraph 9
below), a general mutual release of liability and a covenant not to xxx the
Company or any affiliated company or any officer, director or employee
thereof (except with respect to compliance with this Agreement). You will be
deemed to have been terminated without Cause if there is any material
diminution of the scope of your duties and responsibilities or a reduction in
your base salary, target bonus, bonus plan parameters and a reduction, not
applicable to executive employees generally, in employee welfare benefits (it
being understood that the changes, if any, in employee welfare benefits shall
be viewed in their entirety and not on a plan by plan basis).
A `material diminution' in the scope of your duties and responsibilities
shall be deemed to have occurred when the Company has failed to elect or
reelect you as a member of the Board of Directions or removes you from such
position (in any such case, other than for Cause), or has assigned you duties
which are materially inconsistent with your duties as the President and CEO.
"Cause" shall mean (a) your willful failure to substantially perform the
duties hereunder, (b) your willful failure to follow a written, lawful order
or written directive from the Board of Directors or Chairman of the Board of
Directors, or (c) your conviction of a felony of any kind or any misdemeanor
involving moral turpitude. Your receipt of any severance payments or benefits
hereunder shall be conditioned upon your compliance with the non-compete
provisions below.
Xx. Xxxxxx Xxxxxxxxx
September 25, 2002
Page 5
. Change of Control - Upon a Change of Control event as defined in the
LTIP, or in the event Xxxxxx Xxxx is no longer Chairman of the Board of
Directors of the Company (other than by reason of death or disability),
and for a period of one year after such date, if you are terminated by
the Company other than for Cause, disability or death, (i) the lump sum
severance payment will be eighteen months base salary from the separation
date plus the greater of the guaranteed bonus for that year (if any) or
the pro rata portion of the full bonus potential for that year, (ii) any
options not theretofore vested shall vest, and (iii) you shall be
entitled, for a 12-month period (or shorter if you receive coverage and
benefits under the plans and program of a subsequent employer) to
continue participation in employee welfare benefit plans in which you
were participating on the termination date. You shall be deemed to have
been terminated without Cause if, after a Change of Control, there is any
material diminution of the scope of your duties and responsibilities or a
reduction in your base salary, target bonus, bonus plan parameters and a
reduction, not applicable to executive employees generally, in employee
welfare benefits (it being understood that the changes, if any, in
employee benefits shall be viewed in their entirety and not on a plan by
plan basis).
. Annual Physical Examination - You shall be entitled to a comprehensive
physical on an annual basis at Company expense.
8. Relocation Benefits - If requested by the Board of Directors and as a
condition of this offer, you shall relocate your permanent residence to
Southeast Florida. Until requested to relocate, the Company shall reimburse you
for reasonable expenses for commuting between your
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September 25, 2002
Page 6
current home and Miami, Florida. To assist you in this relocation, the Company
will provide the following relocation benefits:
. Temporary Housing - The Company will reimburse you for temporary living
costs for your family for a period up to 90 days from the date of the
request by the Board.
. Househunting Trips - The Company will reimburse reasonable airfare, hotel,
car rental and meal expenses for you and your spouse.
. Sale of Present Residence - The Company will reimburse you for all closing
costs in connection with the sale of your residence in Palo Alto,
California. If within 90 days from the date you make your present
residence available for sale no satisfactory offers are received, the
Company will facilitate the purchase of your home on terms satisfactory to
you and the Company. Such purchase may be facilitated through a third
party relocation company.
. Closing Costs on Purchase of New Home - The Company will reimburse you for
all closing costs in connection with the purchase of a home in Southeast
Florida.
. Movement of Household Goods - The Company will reimburse you for the costs
of transporting your household goods from Palo Alto, California to
Southeast Florida.
. Reimbursement Gross Up - Reimbursement of any relocation costs incurred
will be grossed up to cover applicable taxes.
9. Non-Compete - In the event you voluntarily or involuntarily leave the
Company's employ, for a period of one year following your termination date or,
if longer, for as long as you are receiving severance payments and benefits as
provided above, you will not directly or indirectly (i) be employed by, invest
in (except less than 5% of a publically traded company),
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September 25, 2002
Page 7
have an interest in or perform work as a director, officer, independent
contractor, partner or consultant for any business in which the Company or any
of its wholly owned, directly or indirectly, affiliates is engaged at such date
in any geographic region in which the Company conducts business or as to which
the Company has currently targeted for expansion; or (ii) on behalf of yourself
or any business with which you may be associated, offer employment or a
consulting relationship to any person who is an employee of or a consultant to
the Company or any of its wholly owned, directly or indirectly, affiliates.
10. Confidentiality - You shall treat as confidential and not disclose to any
person not affiliated with the Company all non-public and proprietary
information and data about the business, operations, employees, programs, plans
and financial results, projections and budgets of the Company and its affiliates
which are disclosed to you during your employment. This confidentiality
agreement shall survive the termination of your employment for any reason.
On behalf of the entire Board of Directors, we are delighted to offer you the
President and CEO position, Xxxxxx, and we look forward to your joining our
team. If you have any questions, please contact me directly at 000-000-0000.
Sincerely,
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Xxxxxx Xxxx, Chairman of the Board
Agreed and Accepted:
By:
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Xxxxxx Xxxxxxxxx
Date: September 25, 2002
