EXHIBIT 10.19
PREVIEW TRAVEL, INC.
EMPLOYMENT TRANSITION AGREEMENT
This Employment Transition Agreement (the "Agreement") is made by and
between Preview Travel, Inc. (the "Company") and Xxx X. Xxxxxxxxxxx
("Employee"), effective as of April 1, 1998 (the "Effective Date").
WHEREAS, Employee is presently serving as an executive officer of the
Company;
WHEREAS, the Company and Employee have mutually agreed to (i) terminate
Employee's status as an executive officer of the Company; and (ii) transition
Employee into a position wherein he provides certain services as a non-executive
employee of the Company.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee hereby agree as follows:
1. Duties and Scope of Employment Relationship. Employee hereby resigns
-------------------------------------------
from the position of President of News Travel Network, Inc. effective as of the
date of this Agreement. The Company shall employ the Employee as a full-time
sales representative of the Company reporting to Xxxxxxx X. Xxxxxxxx, Executive
Vice President of Finance and Administration and Chief Financial Officer of the
Company, for a period commencing with the Effective Date and terminating on
September 30, 1998 (the "Term"). During the Term, the sole duty of Employee
shall be to submit reports to the Company on a monthly basis summarizing any
proposed and/or negotiated licenses for all NTN programs and non-NTN programs
that Employee represents pursuant to that certain Television Program
Representation Agreement between Employee and the Company dated April 1, 1998
(the "Representation Agreement").
2. Employee Benefits. During the Term, Employee shall be eligible to
-----------------
participate in the employee benefit plans maintained by the Company to the full
extent provided for under those plans and except as otherwise specifically
provided for herein. Notwithstanding the foregoing, the Company shall provide
the Employee with health benefits substantially similar to those he currently
receives under the Company's employee benefit plans for a period of two (2)
years from the Effective Date.
3. Compensation and Fringe Benefits. During the Term, Employee shall
--------------------------------
receive a salary from the Company in the amount of $500 per month. Such salary
shall be paid periodically in accordance with normal Company payroll practices
and subject to the usual required withholding. Employee shall be eligible for
all other benefits Employee currently receives from the Company including, but
not limited to, an IATAN card and the continued vesting of Employee's
outstanding stock options. If Employee is terminated for Cause (as defined in
Section 6 hereof) or if Employee
-1-
voluntarily terminates his employment relationship prior to the end of the Term
of this Agreement, such benefits shall be canceled.
4. Mutual Release of Claims. Employee agrees that the foregoing
------------------------
consideration represents settlement in full of all outstanding obligations owed
to Employee by the Company, other than the obligations set forth in this
Agreement and in the Representation Agreement. Employee and the Company, on
behalf of themselves, and their respective heirs, executors, officers,
directors, employees, investors, shareholders, administrators, predecessor and
successor corporations, and assigns, hereby fully and forever release each other
and their respective heirs, executors, officers, directors, employees,
investors, shareholders, administrators, predecessor and successor corporations,
and assigns, of and from any claim, duty, obligation or cause of action relating
to any matters of any kind, whether presently known or unknown, suspected or
unsuspected, that any of them may possess arising from any omissions, acts or
facts that have occurred up until and including the effective date of this
Agreement including, without limitation,
(a) any and all claims relating to or arising from Employee's
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to, or arising from, Employee's right
to purchase, or actual purchase of shares of stock of the Company, other than
those set forth in Section 3 of this Agreement;
(c) any and all claims for wrongful discharge of employment; breach
of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage; and
defamation;
(d) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, and the California
Fair Employment and Housing Act;
(e) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(f) any and all claims for attorneys' fees and costs.
The Company and Employee agree that the release set forth in this section shall
be and remain in effect in all respects as a complete general release as to the
matters released. This release does not extend to any obligations incurred
under this Agreement or the Representation Agreement.
-2-
5. Expenses. During the Term, Employee shall be responsible for his own
--------
travel, entertainment and other expenses incurred by him in the furtherance of
or in connection with the performance of Employee's duties hereunder, provided,
however, that the Company shall provide to Employee office space and reasonable
office services at no cost to Employee through December 31, 1998.
6. Termination for Cause. The Company may terminate Employee's employment
---------------------
for cause by giving Employee thirty (30) days' advance notice in writing. For
the purposes of this Agreement, "Cause" is defined as (i) Employee's conviction
of a felony, (ii) a willful act by Employee which constitutes gross misconduct
and which is injurious to the Company, (iii) Employee's continued substantial
violations of his employment duties which are demonstrably willful and
deliberate on Employee's part after Employee has received a written demand for
performance from the Company which specifically sets forth the factual basis for
the Company's belief that Employee has not substantially performed his duties,
or (iv) Employee's breach of the non-compete provisions set forth in Sections 8
and 9 hereof. In the event the Company wishes to terminate Employee's
employment pursuant to (ii) or (iii) above, Employee shall be given an
opportunity to cure such misconduct or violation. If such misconduct or
violation is not cured by Employee to the Company's satisfaction during the
thirty (30) days following the Company's notice of termination to Employee,
Employee's employment shall terminate immediately upon the expiration of such
thirty (30) day period.
7. Death of Executive. If Employee dies during the Term of this
------------------
Agreement, this Agreement shall terminate immediately; provided, however, that
Employee's estate shall be permitted to exercise any vested stock options held
by Employee prior to his death in accordance with the terms of the stock option
plan and stock option agreements pursuant to which such stock options were
granted.
8. Covenant Not to Compete.
------------------------
(a) Covenant Not to Compete. Until the end of the Term, Employee will
-----------------------
not directly or indirectly engage in (whether as an employee, consultant,
proprietor, partner, director or otherwise), or have any ownership interest in,
or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a "Restricted Business" in
a "Restricted Territory" (as such terms are defined in Section 9 hereof). It is
agreed that ownership of no more than 2% of the outstanding voting stock of a
publicly traded corporation shall not constitute a violation of this provision.
(b) Representations. The parties intend that the covenant contained
---------------
in Section 8(a) shall be construed as a series of separate covenants, one for
each county, city and state (or analogous entity) and country of the Restricted
Territory. Except for geographic coverage, each such separate covenant shall be
deemed identical in terms to the covenant contained in the preceding paragraphs.
If, in any judicial proceeding, a court shall refuse to enforce any of the
separate covenants (or any part thereof) deemed included in said paragraphs,
then such unenforceable
-3-
covenant (or such part) shall be deemed eliminated from this Agreement for the
purpose of those proceedings to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced.
(c) Reformation. In the event that the provisions of this Section 8
-----------
should ever be deemed to exceed the time or geographic limitations, or the scope
of this covenant, permitted by applicable law, then such provisions shall be
reformed to the maximum time or geographic limitations, as the case may be,
permitted by applicable laws.
(d) Reasonableness of Covenants. Employee represents that he (i) is
---------------------------
familiar with the covenants not to compete, and (ii) is fully aware of his
obligations hereunder, including, without limitation, the reasonableness of the
length of time, scope and geographic coverage of these covenants.
9. Definitions. As used herein, the terms listed below shall have the
-----------
following meanings:
(a) Restricted Business. "Restricted Business" means the design,
-------------------
marketing or support of online travel services.
(b) Restricted Territory. "Restricted Territory" means worldwide.
--------------------
10. Arbitration and Equitable Relief.
--------------------------------
(a) The parties hereto agree that any dispute or controversy arising
out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof shall be settled by arbitration to be held in San Francisco County,
California, in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to rules of conflict of law. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. The parties hereto hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in California for any action or proceeding arising from or relating to
this Agreement and/or relating to any arbitration in which the parties are
participants.
(c) The Company and Employee shall each pay one-half of the costs and
expenses of such arbitration, and shall separately pay its counsel fees and
expenses.
-4-
(d) THE PARTIES HERETO HAVE READ AND UNDERSTAND SECTION 10, WHICH
DISCUSSES ARBITRATION. THE PARTIES HERETO UNDERSTAND THAT BY SIGNING THIS
AGREEMENT, THEY AGREE TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO,
OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THEIR
RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO
ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO,
THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD
FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR
STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE
SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
11. Enforcement. In the event of any action to enforce the terms of this
-----------
Agreement, the prevailing party in such action shall be entitled to such party's
reasonable costs and expenses of enforcement including, without limitation,
reasonable attorneys' fees.
12. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of (a) the heirs, executors and legal representatives of Employee upon
Employee's death and (b) any successor of the Company. Any such successor of
the Company shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" shall include any
person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Employee to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Employee following termination without cause. Any attempted assignment,
transfer, conveyance or other disposition (other than as aforesaid)
-5-
of any interest in the rights of Employee to receive any form of compensation
hereunder shall be null and void.
13. Notices. All notices, requests, demands and other communications
-------
called for hereunder shall be in writing and shall be deemed given if delivered
personally or three (3) days after being mailed by registered or certified mail,
return receipt requested, prepaid and addressed to the parties or their
successors in interest at the following addresses, or at such other addresses as
the parties may designate by written notice in the manner aforesaid:
If to the Company: Preview Travel, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
If to Executive: Xxx X. Xxxxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
14. Severability. In the event that any provision hereof becomes or is
------------
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
15. Entire Agreement. This Agreement, the Representation Agreement, the
----------------
stock option agreements between Employee and the Company and any written
proprietary information agreement between Employee and the Company represent the
entire agreement and understanding between the Company and Employee concerning
Employee's employment relationship with the Company, and supersede and replaces
any and all prior agreements and understandings concerning Employee's employment
relationship with the Company. In the event that there is any conflict between
the provisions of this Agreement and any other agreement or benefit plan between
Company and Employee regarding Employee's right to participate in any stock
option or other stock related benefit agreement between the Company and
Employee, the provisions of this agreement shall govern.
16. No Oral Modification. This Agreement may only be amended in writing
--------------------
signed by Employee and the Company.
17. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of California.
18. Acknowledgment. Employee acknowledges that he has had the
--------------
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
-6-
19. Tax Treatment. Executive acknowledges that the Company makes no
-------------
representations regarding the tax treatment of amounts payable hereunder.
-7-
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first set forth above.
PREVIEW TRAVEL, INC.
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------
By: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President, Finance and
Administration and Chief Financial Officer
XXX X. XXXXXXXXXXX
/s/ Xxx X. Xxxxxxxxxxx
-------------------------
Signature
