Exhibit 10.8
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this 12th day of December,
1999, by and between Hotel Reservations Network, Inc. ("COMPANY") and Xxxx Xxxxx
("EMPLOYEE").
The following recitals are true and constitute the basis for this
Agreement:
A. Company desires to establish its right to the services of Employee
in the capacity described below and on terms and conditions
hereinafter set forth, and Employee is willing to accept such
employment on those same terms and conditions; and
B. Ancillary to this Agreement and as a condition to Company entering
into this Agreement, Company and Employee have agreed to enter
into a Noncompetition, Nonsolicitation and Confidentiality
Agreement of even date herewith.
NOW THEREFORE, in consideration of the mutual agreements hereinafter
set forth, Employee and Company have agreed and do hereby agree as follows:
1. TERM. This Agreement shall remain in effect for one (1) year from
the Effective Date and shall be automatically and repeatedly renewed for
successive one (1) year periods thereafter (the "TERM"), unless sooner
terminated in accordance with the provisions of Section 4 of this Agreement, or
unless either party shall give a written notice of non-automatic renewal to the
other prior to the last 30 days of any such annual period, which notice shall
not be effective prior to the end of the then current term. The Effective Date
shall be the first date of employment hereunder and shall be mutually agreed to
by the parties and shall in no event be more that 30 days after the date of this
Agreement.
2. POSITION AND RESPONSIBILITIES. Company agrees to employ Employee
as Chief Financial and Strategic Officer, and Employee accepts and agrees to
such employment. During Employee's employment with Company, Employee shall do
and perform all services and acts necessary or advisable to fulfill the duties
and responsibilities as are commensurate and consistent with Employee's position
and shall render such services on the terms set forth herein. During Employee's
employment with Company, Employee shall report directly to the Chief Executive
Officer. Employee shall have such powers and duties with respect to Company as
may reasonably be assigned to Employee by the Chief Executive Officer, to the
extent consistent with Employee's position and status. Employee agrees to devote
all of Employee's working time, attention and efforts to Company and to perform
the duties of Employee's position in accordance with Company's policies as in
effect from time to time.
3. COMPENSATION. As compensation for all services to be performed by
Employee under this Agreement during the Term, Company shall compensate Employee
as follows:
A. SALARY. During the Term, Company shall pay to Employee an
annual base salary of $180,000 (the "BASE SALARY"), payable in equal biweekly
installments payable in arrears or in accordance with Company's payroll practice
as in effect from time to time. The Base Salary shall be reviewed by the Company
annually for appropriate increases; any such increases shall be in the sole
discretion of the Company. For all purposes under this Agreement, the term Base
Salary shall refer to Base Salary, including adjustments thereto, if any, as may
be made from time to time.
B. DISCRETIONARY BONUS. During the Term, Employee shall be
eligible to receive discretionary annual bonuses on the same basis as peer
employees of Company.
C. STOCK OPTION. In consideration of Employee's entering into
this Agreement and as an inducement to join Company, Employee shall be granted
under Company's 1999 Stock Option Plan
(the "PLAN"), an incentive or non-qualified stock option (the "OPTION"), as the
case may be, to purchase an aggregate of 100,000 shares of Company's Class A
common stock, par value $0.01 per share (the "COMMON STOCK"). The date of grant
of the Option shall be the date on which the Common Stock is first offered to
the public pursuant to an effective registration statement. The exercise price
of the Option shall be at the per share price at which the Common Stock is first
offered to the public pursuant to an effective registration statement filed with
the Securities and Exchange Commission. The Option shall vest and become
exercisable over a four (4) year term, with twenty-five percent (25%) or 25,000
shares of the Option becoming exercisable on the first anniversary of the
Effective Date and an additional 1/36th of the 75,000 share balance of the
Option becoming exercisable on the first day of each month during the Term,
commencing on January 1, 2001. In the event of a Change of Control (as such term
is defined in the Plan), in addition to any options that have already vested,
there also shall be vested, at the time of such Change in Control, fifty percent
(50%) of then unvested options referred to above. The Option shall expire upon
the earlier to occur of (x) ten (10) years from the Effective Date or (y) except
as otherwise provided in the Stock Option Award Agreement to be entered into by
and between Employee and Company, ninety (90) days following the termination of
Employee's employment with Company for any reason.
D. BENEFITS AND PERQUISITES. During the Term, Employee shall
be entitled to participate in any welfare, health and life insurance and pension
benefit and incentive programs as may be adopted from time to time by Company on
the same basis as that provided to other senior executives of Company. Without
limiting the generality of the foregoing, Employee shall be entitled to the
following benefits during the Term: (a) paid vacation during each year of the
Term in accordance with the policies of Company in effect from time to time and
(b) reimbursement of all reasonable and necessary expenses incurred by Employee
in performing Employee's duties for Company, on the same basis as similarly
situated employees and in accordance with Company's policies as in effect from
time to time.
4. TERMINATION OF EMPLOYEES EMPLOYMENT.
A. DEATH. In the event Employee's employment hereunder is
terminated by reason of Employee's death, Company shall pay Employee's
designated beneficiary or beneficiaries, within thirty (30) days of Employee's
death in a lump sum in cash, Employee's Base Salary through the end of the month
in which death occurs and any Accrued Obligations (as defined below). As used in
this Agreement, the term "ACCRUED OBLIGATIONS" shall mean the sum of (i) any
portion of Employee's Base Salary through the date of death or termination of
employment for any reason, as the case may be, which has not yet been paid and
(ii) any compensation previously earned but deferred by Employee (together with
any interest or earnings thereon) that has not yet been paid.
B. DISABILITY. If, as a result of Employee's incapacity due to
physical or mental illness ("DISABILITY"), Employee shall have been absent from
the full-time performance of Employee's duties with Company for a period of two
(2) consecutive months and, within thirty (30) days after written notice is
provided to Employee by the Company in accordance with Section 6 of this
Agreement, Employee shall not have returned to the full-time performance of
Employee's duties, Employee's employment under this Agreement may be terminated
by Company for Disability. During any period prior to such termination during
which Employee is absent from the full-time performance of Employee's duties
with Company due to Disability, Company shall continue to pay Employee's Base
Salary at the rate in effect at the commencement of such period of Disability,
offset by any amounts payable to Employee under any disability insurance plan or
policy provided by Company. Upon termination of Employee's employment due to
Disability, Company shall pay Employee within thirty (30) days of such
termination (i) Employee's Base Salary through the end of the month in which
termination occurs in a lump sum in cash, offset by any amounts payable to
Employee under any disability insurance plan or policy provided by Company and
(ii) any Accrued Obligations.
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C. TERMINATION FOR CAUSE. Company may terminate Employee's
employment under this Agreement for Cause (as defined below) at any time prior
to the expiration of the Term. As used herein, "CAUSE" shall mean (i) the
conviction of Employee for the commission of any misdemeanor involving fraud,
misappropriation or embezzlement or the plea of guilty or nolo contendere to, or
indictment for, the commission of any felony offense by Employee; (ii) a
material breach by Employee of a fiduciary duty owed to Company; (iii) a
material breach by Employee of any of the covenants made by Employee under the
terms of this Agreement, that certain Noncompetition, Nonsolicitation and
Confidentiality Agreement of even date herewith by and between Employee and
Company or the Company's policies and procedures; or (iv) the willful and gross
neglect by Employee of the material duties required by this Agreement .
As to any item which forms the basis of a Company determination of
"Cause" which are subject to correction or cure, Employee shall be given 10 days
written notice of such basis. Such notice shall contain reasonable detail
concerning the basis of a determination that Cause for termination exists. If
the basis for a Cause determination is subject to correction, elimination, or
cure by Employee, then Employee shall have 10 days following such written notice
to cure the basis for the Cause determination. If such cure is successful, then
the Company shall not have Cause for termination as to the cured item. Provided,
however, that the Company shall not be required to provide an additional 10 day
notice and cure opportunity as to any item which is substantially identical to a
previously cured item which was the subject of an earlier written notice under
this paragraph. In the event of Employee's termination for Cause, this Agreement
shall terminate without further obligation by Company, except for the payment of
any Accrued Obligations.
D. TERMINATION OTHER THAN FOR DEATH, DISABILITY OR
CAUSE-SEVERANCE. If Employee's employment is terminated by Company for any
reason other than Employee's death, for Disability or Cause during the Term, or
by notice of non-automatic renewal under Section 1, above, then Company shall
provide Employee with the following:
(i) if Company shall have consummated an initial public
offering of its Common Stock as of Employee's termination date,
then upon such termination not less than 25,000 shares of the
above-referenced Options shall be vested (it being understood that
more than 25,000 may have become vested under the option
agreements if the termination occurs beyond the first anniversary
of the Effective Date); or
(ii) if Company shall not have consummated an initial public
offering of its Common Stock as of Employee's termination date,
Company shall pay Employee the then current Base Salary for a
period of one (1) year after Employee's termination date payable
over the year following such termination. The amount of any
severance payments to be received by Employee under this Section
4D(ii) shall be reduced by the amount of salary received by
Employee from any other employer.
The obligations of Company to Employee under this Section 4D are conditioned
upon Employee signing a release of claims in the form of Exhibit "A" attached
hereto (the "RELEASE") within twenty-eight (28) days of the date on which notice
of termination is given and upon such Release remaining in full force and effect
thereafter. The severance payment under Section 4D(ii) will be in the form of
salary continuation, payable in accordance with the normal payroll practices of
Company and will begin at Company's next regular payroll period following the
effective date of the Release, but shall be retroactive to the date of such
termination. In the event of Employee's termination for other than Employee's
Death, for Disability or Cause after the first twelve (12) months of the Term,
this Agreement shall terminate
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without further obligation by Company, except for
the payment of any Accrued Obligations (which shall be paid within 30 days of
termination).
E. NOTICE OF TERMINATION. Any termination by Company pursuant
to Section 4B, 4C or 4D shall be communicated by a Notice of Termination (as
defined below). 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 Employee's
employment under the provision so indicated. For purposes of this Agreement, no
such purported termination by Company shall be effective without such Notice of
Termination.
5. SOLE AGREEMENT. Other than with respect to the Noncompetition,
Nonsolicitation and Confidentiality Agreement to be entered into by and between
Employee and Company, Employee hereby acknowledges the termination of any and
all employment or consulting agreements between him and Company not expressly
set forth herein, and any affiliates of Company, and releases Company and all
affiliates of Company from any and all obligations that it or they might
otherwise have had to Employee under any employment or consulting agreement
between Company or any affiliates of Company and Employee, including, but not by
way of limitation, any obligations of Company or its affiliates to pay Employee
accrued but unpaid compensation of any sort whatsoever.
6. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be given by first-class mail, certified or
registered with return receipt requested, telecopy or hand delivery acknowledged
in writing by the recipient personally and shall be deemed to have been duly
given three days after mailing or immediately upon duly acknowledged hand
delivery or telecopy to the respective persons named below:
If to Company: Hotel Reservations Network, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Telecopy: 214.265.0974
If to Employee: Xxxx Xxxxx
0000 Xxxxxxxxxxx
Xxxxxx, XX 00000
Telecopy: ___.___.____
7. ASSIGNMENT. This Agreement may not be assigned or transferred by
the Employee, in whole or in part, without the prior written consent of Company,
and any assignment in violation of this Section shall be void. Company shall
have the right to assign this Agreement and any of its rights hereunder to any
of its affiliates or as a part of a sale or transfer of the stock, assets or
business of Company or any substantial portion thereof.
8. INTERPRETATION; SEVERABILITY OF INVALID PROVISIONS. All rights and
restrictions contained hereunder may be exercised and shall be applicable and
binding only to the extent that they do not violate any applicable laws and are
intended to be limited to the extent necessary to render this Agreement legal,
valid and enforceable. If any term of this Agreement shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, the
remaining terms shall remain in full force and effect. The existence of any
claim by Employee against Company, whether predicated on this Agreement or
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otherwise, shall not constitute a defense to enforcement by Company of any or
all such provisions or covenants.
9. RELIEF. The parties acknowledge that a breach or threatened breach
of any of the terms of this Agreement by Employee would result in material and
irreparable damage and injury to Company, and that it would be difficult or
impossible to establish the full monetary value of such damage. Therefore,
Company shall be entitled to injunctive relief by a court of appropriate
jurisdiction in the event of Employees's breach or threatened breach of any of
the terms hereunder. Company's right to an injunction will not prohibit Company
from pursuing other remedies, including the recovery of damages.
10. AGREEMENT BINDING. This Agreement shall inure to the benefit of
Company and its successors, assignees and designees and shall be binding upon
Employee and Employee's heirs, executors, administrators and personal
representatives.
11. NONWAIVER. No failure on the part of either Employee or Company to
exercise, and no delay by either Employee or Company in exercising any right,
power, or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy by either
Employee or Company preclude any other or further exercise thereof or the
exercise by such party of any other right, power or remedy. No express waiver or
assent by either Employee or Company of any breach of or default in any term or
condition of this Agreement by the other party shall constitute a waiver of or
an assent to any succeeding breach of or default in the same or any other term
or condition hereof.
12. AMENDMENTS AND MODIFICATIONS. This Agreement may be amended or
modified only by a writing signed by the Employee and the Chief Executive
Officer of Company.
13. GOVERNING LAW. The validity and effect of this Agreement shall be
construed under, governed by and enforced in accordance with the laws of the
State of Texas, without regard to the choice of law provisions, statutes,
regulations or principles of this or any other jurisdiction.
14. NO CONFLICTING AGREEMENT. Employee represents and warrants that he
is not party to any agreement, contract or understanding which would prohibit
him from entering into this Agreement or performing fully his obligations
hereunder.
15. WITHHOLDING. Company shall make such deductions and withhold such
amounts from each payment and benefit made or provided to Employee under this
Agreement, as may be required from time to time by applicable law, governmental
regulation or order.
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16. ARBITRATION.
(a) Any and all disputes arising out of or in connection with
the negotiation, execution, interpretation, performance or non-performance of
this Agreement, shall be referred to and solely and finally resolved by
arbitration. The place of arbitration shall be Dallas, Texas or such other
location as the parties may agree in writing. The arbitration tribunal shall
consist of three arbitrators. The parties shall each nominate one arbitrator and
the third arbitrator shall be appointed, all in accordance with the Rules (as
defined below). The parties hereby renounce all recourse to litigation and agree
(i) that no reference shall be made to any court on a point of law and (ii) that
the award of the arbitration tribunal shall be final and subject to no judicial
review. The arbitration tribunal shall conduct the proceedings in accordance
with the arbitration rules of the American Arbitration Association (the "RULES),
which Rules are deemed to be incorporated by reference to this clause. The
arbitration tribunal shall decide the issues submitted to them in accordance
with (A) the language and commercial purposes of this Agreement, and (B) what is
just and equitable under the circumstances, provided that all substantive
questions of law shall be determined under the laws of the State of Texas.
(b) The parties agree to facilitate the arbitration by: (i)
making available to one another and to the arbitration tribunal for examination,
inspection and extraction all documents, books, records and personnel under
their control determined by the arbitration tribunal to be relevant to the
dispute; (ii) conducting arbitration hearings to the greatest extent possible on
successive days; and (iii) observing strictly the time periods established by
the Rules, or by the arbitration tribunal, for submission of evidence or briefs.
(c) Judgment on the award of the arbitration tribunal may be
entered in any court having jurisdiction over the party against which
enforcement of the award is being sought. All deposits and other costs (other
than fees of counsel) incurred in conducting the arbitration shall be borne
equally by the parties or as otherwise determined by the tribunal. Each party
shall be solely responsible for its own attorneys fees incurred in connection
with the arbitration.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one instrument.
IN WITNESS WHEREOF, Company has caused this Agreement to be executed by
its duly authorized officer, and Employee has executed this Agreement, as of the
date first written above.
HOTEL RESERVATIONS NETWORK, INC. EMPLOYEE
By:
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Xxxxx Xxxxxx, Chief Executive Officer Xxxx Xxxxx
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EXHIBIT "A"
RELEASE OF CLAIMS
FOR AND IN CONSIDERATION OF the special payments and benefits to be
provided in connection with the termination of my employment in accordance with
the terms of the Employment Agreement dated as of December __, 1999 (as amended
and in effect from time to time, the "EMPLOYMENT AGREEMENT") between Hotel
Reservations Network, Inc. ("COMPANY"), and me, I, on my own behalf and on
behalf of my personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees and all others connected
with me, hereby release and forever discharge Company and each of its respective
affiliates and all of their respective past and present officers, directors,
stockholders, controlling persons, employees, agents, representatives,
successors and assigns and all of others connected with any of its employees,
agents, representatives, successors and assigns and all others connected with
any of them (all collectively, the "RELEASED PARTIES"), both individually and in
their official capacities, from any and all rights, liabilities, claims,
demands, and causes of action of any type (collectively, "CLAIMS") which I have
had in the past, now have, or might now have, through the date of my signing of
this Release of Claims, in any way resulting from, arising out of or connected
with my employment or its termination or pursuant to any federal, state, foreign
or local employment law, regulation or other requirement (including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, and the fair employment
practices laws of the state or states in which I have been employed by Company,
each as amended from time to time); provided, however, that the foregoing
release shall not apply to any right explicitly set forth in the Employment
Agreement to special payments and benefits to be provided in connection with the
termination of my employment.
In signing this Release of Claims, I acknowledge that I have had at
least 21 days from the date of notice of termination of my employment to
consider the terms of this Release of Claims and that such time has been
sufficient; that I am encouraged by Company to seek the advice of an attorney
prior to signing this Release of Claims; and I am signing this Release of Claims
voluntarily and with a full understanding of its terms.
I understand that I may revoke this Release of Claims at any time
within seven days of the date of my signing by written notice to Company and
that this Release of Claims will take effect only upon the expiration of such
seven-day revocation period and only if I have not timely revoked it.
Intending to be legally bound, I have signed this Release of Claims as
of the date first written above.
Signature:
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Xxxx Xxxxx
Date Signed:
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