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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into as of the 1st day of August, 1999, by and
between REZ, INC., formerly known as REZSOLUTIONS, INC., a Delaware corporation
(the "Company"), and I. XXXXXXX XXXXXX (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is essential and in the best interest of the Company and its
stockholders to enter into this Agreement to retain the services of the
Executive and to ensure his continued dedication and efforts; and
WHEREAS, in order to induce the Executive to enter into employment by
the Company, the Company desires to provide the Executive with certain benefits
during the term of his employment and, in the event his employment is
terminated, to provide the Executive with the benefits and payments described
herein.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. EMPLOYMENT TERM.
The "Employment Term" shall commence on August 1, 1999 (the "Effective
Date") and shall expire on the third (3rd) anniversary of the Effective Date;
provided, however, that on each anniversary of the Effective Date, the
Employment Term shall automatically be extended for one (1) year unless either
the Company or the Executive shall have given written notice to the other at
least ninety (90) days prior thereto that the Employment Term shall not be so
extended.
2. EMPLOYMENT.
(a) Subject to the provisions of Section 8 hereof, the Company agrees
to continue to employ the Executive and the Executive agrees to remain in the
employ of the Company during the Employment Term. During the Employment Term,
the Executive shall be employed as the PRESIDENT AND CHIEF EXECUTIVE OFFICER of
the Company. The Executive shall perform the duties, undertake the
responsibilities and exercise the authority customarily performed, undertaken
and exercised by persons situated in a similar executive capacity. He shall also
promote, by entertainment or otherwise, the business of the Company.
(b) During the Employment Term, excluding periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during usual business hours to the business and
affairs of the Company to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder. The Executive may (1) serve on corporate,
civil or charitable boards or committees, (2) manage personal investments, (3)
deliver lectures and teach at educational institutions, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities hereunder and (4) retain his status as an employee
of Xxxx Elsevier, Inc., or an affiliate thereof, solely for purposes of
retaining pension compensation or other benefits. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such activities
(or the conduct of activities similar in nature and scope thereto) subsequent to
the Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.
3. COMPENSATION.
(a) Base Salary. Beginning on January 1, 2000, the Company agrees to
pay or cause to be paid to the Executive an annual base salary of Two Hundred
Seventy-Five Thousand Dollars ($275,000.00), and as may be increased from time
to time by the Executive Committee of the Board (the "Executive Committee") and,
if the Executive Committee shall no longer exist, by the Compensation Committee
of the Board (the "Compensation Committee")(hereinafter referred to as the "Base
Salary"). Such Base Salary shall be payable in accordance with the Company's
customary practices applicable to its executives. From the Effective Date
through December 31, 1999,
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Executive shall receive no Base Salary but shall instead receive salary payments
pursuant to the Employee Lease Agreement dated July 16, 1998, between the
Company and Xxxx Elsevier, Inc.
(b) Annual Bonus. In addition to Base Salary, the Executive may be
awarded, for each fiscal year ending during the Employment Term, an annual
discretionary bonus (the "Annual Bonus") in accordance with the terms and
conditions of the bonus plan approved by the by the Executive Committee and, if
the Executive Committee shall no longer exist, by the Compensation Committee.
Any actual payment or award under such annual bonus plan, and the size of any
payment or award, will be in accordance with the terms of the plan. Each such
Annual Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus.
4. EMPLOYEE BENEFITS.
During the Employment Term and beginning on the Effective Date, the
Executive shall be entitled to participate in all employee benefit plans,
practices and programs maintained by the Company and made available to employees
generally, including, without limitation, all pension, retirement, profit
sharing, savings, medical, hospitalization, disability, dental, life or travel
accident insurance benefit plans; provided, however, that for the purposes of
this Section 4, all benefits provided pursuant to the pension plan schedule
which appears as Exhibit "C" to that certain Share Exchange Agreement dated as
of October 9, 1997, among the Company, Xxxx Elsevier Inc., a Massachusetts
corporation ("Xxxx"), Utell International Group Ltd., a company duly
incorporated under the laws of England and Wales ("UIGL"), and Anasazi Inc., a
Delaware corporation ("Anasazi") shall not be considered. Unless otherwise
provided herein, the compensation and benefits under, and the Executive's
participation in, such plans, practices and programs shall be on the same basis
and terms as are applicable to employees of the Company generally, but in no
event on a basis less favorable in terms of benefit levels and coverage than
offered to other similarly situated executives of the Company. The Company may
reduce benefit levels if such changes are part of broad-based changes in the
Company's benefit programs offered generally to all employees. Notwithstanding
the foregoing, nothing herein shall obligate the Company to adopt such plans,
practices or programs.
5. EXECUTIVE BENEFITS.
During the Employment Term, the Executive shall be entitled to
participate in all executive benefit or incentive compensation plans maintained
or established by the Company for the purpose of providing compensation and/or
benefits to executives of the Company including, but not limited to, any
supplemental retirement, salary continuation, stock option, deferred
compensation, supplemental medical or life insurance or other bonus or incentive
compensation plans; provided, however, the grant of a stock option in any year
is not guaranteed, and will be dependent on the Board's evaluation of the
Executive's performance. Unless otherwise provided herein, the compensation and
benefits under, and the Executive's participation in, such plans shall be on the
same basis and terms as other similarly situated executives of the Company. No
additional compensation provided under any of such plans shall be deemed to
modify or otherwise affect the terms of this Agreement or any of the Executive's
entitlements hereunder. Notwithstanding the foregoing, nothing herein shall
obligate the Company to adopt such plans, practices or programs.
6. OTHER BENEFITS.
(a) Fringe Benefits and Perquisites. During the Employment Term, the
Executive shall be entitled to all fringe benefits and perquisites (e.g.,
company cars, club dues, physical examinations, financial planning and tax
preparation services) generally made available by the Company to its executives.
Unless otherwise provided herein, the fringe benefits and perquisites provided
to Executive shall be on substantially the same basis and terms as other
similarly situated executives of the Company.
(b) Expenses. The Executive shall be entitled to receive reimbursement
of all expenses reasonably incurred by him in connection with the performance of
his duties hereunder or for promoting, pursuing or otherwise furthering the
business or interests of the Company in accordance with the accounting
procedures and expense reimbursement policies of the Company as it shall adopt
from time to time.
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7. VACATION AND SICK LEAVE. During the Employment Term, at such reasonable times
as the Board shall in its discretion permit, the Executive shall be entitled
without loss of pay, to absent himself voluntarily from the performance of his
employment under this Agreement, provided that:
(a) The Executive shall be entitled to annual vacation in accordance
with the policies as periodically established by the Board.
(b) The Executive shall be entitled to sick leave (without loss of pay)
in accordance with the Company's policies as in effect from time to time.
8. TERMINATION. During the Employment Term, the Executive's employment hereunder
may be terminated under the following circumstances:
(a) Cause. The Company may terminate the Executive's employment for
"Cause." A termination of employment is for "Cause" if the Executive:
(1) has been convicted of or plead guilty to a felony; or
(2) intentionally engaged in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise
or from which he derives an improper material personal
benefit; provided, however, that no termination of the
Executive's employment shall be for Cause as set forth in this
clause (2) until:
(i) there shall have been delivered to the Executive
a copy of a written notice setting forth that the
Executive was guilty of the conduct set forth in this
clause (2) and specifying the particulars thereof in
reasonable detail; and
(ii) the Executive shall have been provided an
opportunity to be heard by the Board (with the
assistance of the Executive's counsel if the
Executive so desires). No act, nor failure to act, on
the Executive's part, shall be considered
"intentional" unless he has acted, or failed to act,
with an absence of good faith and without a
reasonable belief that his action or failure to act
was in the best interest of the Company.
(3) commits gross malfeasance or intentionally fails to
perform the duties of the Executive's position; provided,
however, the Company shall first notify the Executive in
writing stating with reasonable specificity the action or
inaction of the Executive which forms the basis for such
notice and the Executive fails to cure such malfeasance or
failure within ten (10) days of the date of such notice.
(4) violates any valid non-competition or non-disclosure
agreement or the Company's xxxxxxx xxxxxxx policy, if any.
Notwithstanding anything contained in this Agreement to the contrary, no failure
to perform by the Executive after a Notice of Termination is given by the
Executive shall constitute Cause for purposes of this Agreement.
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(b) Disability. The Company may terminate the Executive's employment
after having established the Executive's Disability. For purposes of this
Agreement, "Disability" means a physical or mental infirmity which impairs the
Executive's ability to substantially perform his material duties under this
Agreement which continues for a period of at least ninety (90) consecutive days.
The Executive shall be entitled to the compensation and benefits provided for
under this Agreement for any period during the Employment Term and prior to the
establishment of the Executive's Disability during which the Executive is unable
to work due to a physical or mental infirmity. Notwithstanding anything
contained in this Agreement to the contrary, until the Termination Date
specified in a Notice of Termination (as each term is hereinafter defined)
relating to the Executive's Disability, the Executive will be entitled to return
to his position with the Company as set forth in this Agreement in which event
no Disability of the Executive will be deemed to have occurred.
(c) Good Reason.
(1) The Executive may terminate his employment for "Good
Reason." For purposes of this Agreement, "Good Reason" shall
mean the occurrence of any of the events or conditions
described in Subsections (i) through (vii) hereof:
(i) If the Executive shall cease to be the President
and Chief Executive Officer of the Company (or any
successor or parent thereof) or if he shall not be
elected to the Company's Board or upon the assignment
to the Executive of any material duties or
responsibilities which are inconsistent with his
position or responsibilities; or any removal of the
Executive from or failure to reappoint or reelect him
to any of such offices or positions, except during a
period of disability or in connection with the
termination of his employment for Disability, Cause,
as a result of his death, or by the Executive other
than for Good Reason;
(ii) a reduction in the Executive's Base Salary or
any failure to pay the Executive any compensation or
benefits to which he is entitled within thirty (30)
days of the date due;
(iii) the Company requiring the Executive to be based
at any place outside a one hundred (100) mile radius
from the Company's location in Phoenix, Arizona,
except for reasonably required travel on the
Company's business;
(iv) a voluntary termination by the Executive
pursuant to a Notice of Termination delivered to the
Company within the thirty day period commencing on
the first anniversary of a Change In Control.
(v) any material breach by the Company of any
provision of this Agreement: provided, however, the
Executive shall first notify the Company in writing
stating with reasonable specificity the breach by the
Company and the Company fails to cure such breach
within ten (10) days of the date of such notice;
(vi) any purported termination of the Executive's
employment for Cause by the Company which is found by
a court of competent jurisdiction or an arbitrator
not to comply with the terms of Section 8(a); or
(vii) the failure of the Company to obtain an
agreement, reasonably satisfactory to the Executive,
from any successor or assign of the Company to assume
and agree to perform this Agreement, as contemplated
in Section 14 hereof.
(2) The Executive's right to terminate his employment pursuant
to this Section 8(c) shall not be affected by his incapacity
due to physical or mental illness.
(d) Voluntary Termination. Upon thirty (30) days prior written notice,
either the Executive or the Company may voluntarily terminate the Executive's
employment hereunder at any time; provided, however, in the event of any such
termination by the Company, the Company shall pay to the Executive the amounts
set forth in Section 9(c) hereof.
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9. COMPENSATION UPON TERMINATION. Upon termination of the Executive's employment
during the Employment Term, the Executive shall be entitled to the following
benefits:
(a) If the Executive's employment with the Company shall be terminated
by the Company for Cause or by the Executive other than for Good Reason, the
Company shall pay the Executive all amounts earned or accrued through the
Termination Date but not paid as of the Termination Date, including:
(1) Base Salary,
(2) reimbursement for reasonable and necessary expenses
incurred by the Executive on behalf of the Company during the
period ending on the Termination Date,
(3) vacation pay, and
(4) sick leave (collectively, "Accrued Compensation").
(b) If the Executive's employment with the Company shall be terminated
by the Company for Disability or by reason of the Executive's death, the Company
shall pay the Executive all amounts earned or accrued through the Termination
Date but not paid as of the Termination Date, including the Accrued
Compensation. In addition, the Company shall pay to the Executive or his
beneficiaries the following:
(1) the Base Salary for a period of one (1) year from the date
of such Disability or death, and
(2) an amount equal to the "Pro Rata Bonus" (as hereinafter
defined). The "Pro Rata Bonus" is an amount equal to the
target bonus amount the Executive would have been entitled to
in the fiscal year which includes the Termination Date (the
"Bonus") multiplied by a fraction, the numerator of which is
the number of days in such fiscal year through the Termination
Date and the denominator of which is 365. The Executive's
entitlement to any other compensation or benefits shall be
determined in accordance with the Company's employee benefit
plans and other applicable programs and practices then in
effect.
(c) If the Executive's employment with the Company shall be terminated
(other than by reason of death) by the Company other than for Cause or
Disability or by the Executive for Good Reason, the Company shall pay to the
Executive the following:
(1) the Company shall pay the Executive all Accrued
Compensation and a Pro Rata Bonus;
(2) the Company shall continue to pay the Executive as
severance pay and in lieu of any further compensation for
periods subsequent to the Termination Date, an amount equal to
the sum of (A) the Executive's monthly Base Salary in effect
for the month immediately preceding the Termination Date and
(B) the Bonus, for a period of twenty-four (24) months
following the Termination Date;
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(3) during the twelve (12) month period immediately following
the Termination Date (the "Continuation Period"), the Company
shall at its expense continue on behalf of the Executive and
his dependents and beneficiaries the life insurance,
disability, medical, dental and hospitalization benefits
provided (i) to the Executive immediately prior to the Notice
of Termination or (ii) to other similarly situated executives
who continue in the employ of the Company during the
Continuation Period. The coverage and benefits (including
deductibles and costs) provided in this Section 9(c)(3) during
the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries, than the most
favorable of such coverages and benefits provided to the
Executive during any of the periods referred to in clauses (i)
and (ii) above. The Company's obligation hereunder with
respect to the foregoing benefits shall terminate in the event
the Executive obtains any such benefits (regardless of level
and scope of coverage) pursuant to a subsequent employer's
benefit plans. This Section 9(c)(3) shall not be interpreted
so as to limit any benefits to which the Executive, his
dependents or beneficiaries may be entitled under any of the
Company's employee benefit plans, programs or practices
following the Executive's termination of employment, including
without limitation, retiree medical and life insurance
benefits;
(4) the restrictions on any outstanding stock options
(including restricted stock and granted performance shares or
units) granted to the Executive under any stock option plans
or under any other incentive plan or arrangement shall lapse
and such incentive award shall become 100% vested, all stock
options and stock appreciation rights granted to the Executive
shall become immediately exercisable and shall become 100%
vested, and all performance units granted to the Executive
shall become 100% vested;
(5) prior to the initial public offering of shares of common
stock of the Company pursuant to an effective registration
statement under the Securities Act of 1933, as amended (an
"IPO"), the Executive shall have the right, but not the
obligation, exercisable within thirty (30) days of the
Termination Date, to require the Company to purchase, for
cash, any shares of common stock of the Company which were
received by the Executive at the time of the merger of Cactus
Acquisition, Inc., a Delaware corporation (a subsidiary of the
Company) ("Cactus") and Anasazi, (the "Securities") at a price
equal to the Fair Market Value of such shares on the
Termination Date; and
(6) the Company shall reimburse to the Executive the costs of
any outplacement services incurred by Executive, up to a
maximum amount of Fifteen Thousand Dollars ($15,000.00).
(d) The amounts provided for in Sections 9(a), 9(b)(2) , 9(c)(1) and
9(c)(5) shall be paid within thirty (30) days after the Executive's Termination
Date; provided, however, in the event of the determination of the Fair Market
Value of a security pursuant to Section 10(a)(4) hereof, payment of the Fair
Market Value thereof pursuant to Section 9(c)(5) hereof shall occur not later
than fifteen (15) days after the date of such determination. Expenses incurred
by Executive under Section 9(c)(6) shall be paid within ninety (90) days of the
receipt by the Company of a claim for reimbursement submitted by the Executive.
(e) The Executive hereby acknowledges that full payment and/or
performance by the Company of its obligations as set forth in Sections 9(b) or
9(c) hereof shall be in lieu of any other remedy or cause of action the
Executive may have, either at law or in equity as a result of the termination of
the Executive's employment pursuant to such Sections.
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10. DEFINITIONS.
(a) Fair Market Value. For the purposes of this Agreement, the "Fair
Market Value" of a security shall be determined as follows:
(1) the Fair Market Value of the security shall be the price
established, determined in good faith, in the most recently
completed arm's-length transaction between the Company and a
person other than an affiliate of the Company, the closing of
which shall have occurred within the six month period
immediately preceding such Termination Date; or
(2) if no transaction shall have occurred within such
six-month period, the Fair Market Value of the security shall
be determined by reference to the price established by the
Board within the six (6) months preceding the Termination Date
for the purpose of granting any options under an incentive
stock option plan maintained by the Company; or
(3) if the Board has failed to establish such price within
such six month period, the Fair Market Value of the security
shall be determined by negotiation, in good faith, between the
Executive and the Company; or
(4) in the event the Executive and the Company have been
unable to agree under Section 10(a)(3) above within thirty
(30) days of the Termination Date as to the Fair Market Value
of the security, the Executive and the Company shall mutually
select, at the expense of the Company, a nationally recognized
firm possessing expertise in the valuation of similar
companies who shall render its opinion to the Company and the
Executive as to the Fair Market Value of the security.
(b) Notice of Termination. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement, if any, relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. Any
purported termination by the Company or by the Executive shall be communicated
by written Notice of Termination to the other. For purposes of this Agreement,
no such purported termination of employment shall be effective without such
Notice of Termination.
(c) Termination Date, Etc. For purposes of this Agreement, "Termination
Date" shall mean in the case of the Executive's death, his date of death, or in
all other cases, the date specified in the Notice of Termination subject to the
following:
(1) If the Executive's employment is terminated by the Company
for Cause, the date of the Notice of Termination;
(2) If the Executive's employment is terminated by the Company
due to Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date
the "Notice of Termination is given to the Executive, provided
that the Executive shall not have returned to the full-time
performance of his duties during such period of at least
thirty (30) days; and
(3) If the Executive's employment is terminated for Good
Reason, the date specified in the Notice of Termination shall
not be more than sixty (60) days from the date the Notice of
Termination is given to the Company.
(d) Change in Control. For purposes of this Agreement, a "Change in
Control" shall mean any of the following events:
(1) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities")
by any "Person" (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) other than Xxxx or UIGL or
any parent, subsidiary or affiliate of the foregoing
(collectively referred to as "Utell"), immediately after which
such Person has "Beneficial Ownership" (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than
fifty percent
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(50%) of the combined voting power of the Company's then
outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained by
(A) the Company or (B) any corporation or other Person of
which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
"Subsidiary") (ii) the Company or its Subsidiaries, or (iii)
any Person in connection with a Non-Control Transaction" (as
hereinafter defined);
(2) An acquisition (other than directly from the Company) of
the Voting Securities of the Company by Utell, immediately
after which Utell has Beneficial Ownership of more than
eighty-five percent (85%) of the combined voting power of the
Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a
"Non-Control Acquisition shall not constitute an acquisition
which would cause a Change in Control;
(3) The individuals who, as of the date this Agreement is
approved by the Board are members of the Board (the "Incumbent
Board"), cease for any reason to constitute at least
two-thirds of the members of the Board; provided, however,
that if the election, or nomination for election by the
Company's common stockholders, of any new director was
approved by a vote of the members of the Board designated to
grant such approval under Section 12 of the Company's Bylaws,
such new director shall, for purposes of this Plan, be
considered as a member of the Incumbent Board; provided,
however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy
Contest; or
(4) Approval by stockholders of the Company of:
(i) A merger, consolidation or reorganization
involving the Company, unless such merger,
consolidation or reorganization is a "Non-Control
Transaction." A "Non-Control Transaction" shall mean
a merger, consolidation or reorganization of the
Company where:
(A) the stockholders of the Company,
immediately before such merger,
consolidation or reorganization, own
directly or indirectly immediately following
such merger, consolidation or
reorganization, at least seventy percent
(70%) [sixty percent (60%) after an IPO] of
the combined voting power of the outstanding
voting securities of the corporation
resulting from such merger or consolidation
or reorganization (the "Surviving
Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization;
(B) the individuals who were members of the
Incumbent Board immediately prior to the
execution of the agreement providing for
such merger, consolidation or reorganization
constitute at least two-thirds (a majority
after an IPO) of the members of the board of
directors of the Surviving Corporation, or a
corporation beneficially directly or
indirectly owning a majority of the Voting
Securities of the Surviving Corporation; and
(C) no Person other than (i) the Company,
(ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part
thereof) maintained by the Company, the
Surviving Corporation, or any Subsidiary, or
(iv) any Person who, immediately prior to
the merger, consolidation or reorganization
had
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Beneficial Ownership of thirty percent (30%)
or more of the then outstanding Voting
Securities), has Beneficial Ownership of
thirty percent (30%) or more of the combined
voting power of the Surviving Corporation's
then outstanding voting securities.
(ii) A complete liquidation or dissolution of the
Company; or
(iii) An agreement for the sale or other disposition
of all or substantially all of the assets of the
Company to any Person (other than a transfer to a
Subsidiary or a parent in a Non-Control Transaction).
(5) Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely: (i) because any Person (the
"Subject Person") acquired Beneficial Ownership of more than
the permitted amount of the then outstanding Voting Securities
as a result of the acquisition of Voting Securities by the
Company which, by reducing the number of Voting Securities
then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a
Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur; or (ii)
by virtue of an IPO.
11. EXCISE TAX PAYMENTS.
(a) In the event that the Company determines that a portion of any
payment or benefit to the Executive or for his benefit payable or distributable
pursuant to the terms of this Agreement will be deemed to be an "excess
parachute payment" within the meaning of Section 280G(b)(1) of the Internal
Revenue Code of 1986, as amended (the "Code") (a "Payment" or "Payments"), then
the Company shall have the right to reduce the Payment by the amount of such
excess.
(b) An initial determination as to whether all or a portion of a
Payment represents an excess parachute payment and the amount thereof shall be
made at the Company's expense by its accounting firm (the "Accounting Firm").
The Accounting Firm shall provide its determination (the "Determination"),
together with detailed supporting calculations and documentation to the Company
and the Executive within ten (10) days of the Termination Date. Within ten days
of the delivery of the Determination to the Executive, the Executive shall have
the right to dispute the Determination.
12. UNAUTHORIZED DISCLOSURE. During the period that the Executive is actively
employed by the Company and thereafter, the Executive shall not make any
Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean disclosure by the Executive without the consent of the
Board (other than pursuant to a court order) to any person, other than an
employee, consultant, auditor, attorney or director of the Company or a person
to whom disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of his duties as an executive of the Company or as
may be legally required, in violation of any valid standard nondisclosure
agreement (or similar document) executed by the Executive; provided, however,
that such term shall not include the use or disclosure by the Executive, without
consent, of any information known generally to the public (other than as a
result of disclosure by him in violation of this Section 12) or any information
not otherwise considered confidential and material by a reasonable person
engaged in the same business as that conducted by the Company.
13. NONCOMPETITION.
(a) Except with the prior written consent of the Company authorized by
a resolution adopted by the Board, for the period beginning upon the date hereof
and ending on: (i) in the event of the termination of the Executive's employment
by the Executive for Good Reason pursuant to Section 8(c) or by the Company
pursuant to Section 8(d) hereof and the Executive is receiving payments from the
Company pursuant to Section 9(c)(2) hereof, the date on which the last such
payment is received; or (ii) in the event of the voluntary termination of the
Executive's employment by the Executive pursuant to Section 8(d) hereof, the
date which is nine (9) months from
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the Termination Date; or (iii) in the event of the termination of the
Executive's employment for any other reason, the Termination Date, Executive
shall not directly or indirectly as owner, partner, joint venturer, stockholder,
employee, broker, agent, principal, trustee, corporate officer, director,
licensor, or in any capacity whatsoever engage in, become substantially
financially interested in, employed by or have any connection with, any business
engaged principally in the development of hospitality central reservation or
property management systems software or provision of hospitality central
reservation and property management services in any country where the Company or
any of its subsidiaries is then engaged in such businesses; provided, however,
that Executive may own any securities of any corporation which is engaged in
such business and is publicly owned and traded but in an amount not to exceed at
any one time one percent of the class of a publicly traded stock or securities
of such corporation.
(b) Executive agrees that for a period of one year following
termination of employment with the Company, he/she will not solicit or in any
manner encourage employees of the Company, its subsidiaries or parent to leave
its employ. Executive further agrees during such period he/she will not offer or
cause to be offered employment to any person who is employed by the Company, its
subsidiaries or parent at any time during the six months prior to the
termination of his/her employment with the Company.
(c) In case any one or more of the terms contained in subsections (a)
or (b) of this Section shall for any reason become invalid, illegal, or
unenforceable, such invalidity, illegality or unenforceability shall not affect
any other terms herein, but such terms shall be deemed deleted and such deletion
shall not affect the validity of the other terms of this Section. In addition,
if any one or more of the terms contained in subsections (a) or (b) of this
Section shall for any reason be held to be excessively broad with regard to
time, duration, geographic scope or activity that term shall be construed in an
manner to enable it to be enforced to the extent compatible with applicable law.
14. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and assigns and the Company shall require any
successor or assign to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession or assignment had taken place. The term "Company"
as used herein shall include such successors and assigns. The term "successors
and assigns" as used herein shall mean a corporation or other entity acquiring
all or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
15. FEES AND EXPENSES. The Company shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as a result of the breach or default by the Company of the terms hereof.
16. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
17. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
subsidiaries and for which the Executive may qualify, nor shall anything herein
limit or reduce such rights as the Executive may have under any other agreements
with the Company or any of its subsidiaries. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any plan or
program of the Company or any of its subsidiaries shall be payable in accordance
with such plan or program, except as explicitly modified by this Agreement.
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18. SETTLEMENT OF CLAIMS. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any circumstances, including, without limitation, any set-off
(except against amounts actually owed by the Executive to the Company as
evidenced by promissory notes, loan agreements and similar documents executed by
the Executive), counterclaim, defense, recoupment, or other right which the
Company may have against the Executive or others.
19. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
20. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Arizona without giving
effect to the conflict of law principles thereof. Subject to Section 23 of this
Agreement, any action brought by any party to this Agreement shall be brought
and maintained in a court of competent jurisdiction in Maricopa County of the
State of Arizona.
21. SEVERABILITY. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
22. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto and supersedes all prior agreements, if any, understandings
and arrangements, oral or written, between the parties hereto with respect to
the subject matter hereof.
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23. ARBITRATION. Any dispute or controversy arising out of or relating to this
Agreement shall be determined and settled by arbitration in the City of Phoenix,
Arizona, in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association then in effect, and judgment upon the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction. Such arbitrator shall have no power to modify any of the
provisions of this Agreement, and his or her jurisdiction is limited
accordingly. A party requesting arbitration hereunder shall give ten (10) days'
written notice to the other party prior to requesting such arbitration. Unless
the arbitrator decides otherwise, the successful party in any such arbitration
shall be entitled to reasonable attorneys' fees and costs associated with such
arbitration. If the parties hereto cannot agree upon an arbitrator, then one
shall be appointed by the governing official of the Arizona Chapter of the
American Arbitration Association. Any arbitrator so appointed shall have
extensive experience in a profession connected with the subject matter of the
dispute. Whenever any action is required to be taken under this Agreement within
a specified period of time and the taking of such action is materially affected
by a matter submitted to arbitration, such period shall automatically be
extended by the number of days plus ten (10) that are taken for the
determination of that matter by the arbitrator.
IN WITNESS WHEREOF, the company has caused this agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
REZ, INC.
(formerly known as REZSOLUTIONS,
INC.), a Delaware corporation
By: /s/ W. XXXXXX XXXXXXXXXXX
-----------------------------
Title: Vice Chairman
--------------------------
ATTEST;
/s/ XXXXXXX X. XXXXXXXXX
-----------------------------
EXECUTIVE
By: /s/ I. XXXXXXX XXXXXX
General Counsel -----------------------------
----------------------
Name: I. Xxxxxx Xxxxxx
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