Exhibit 10.11
November 15, 1998
EMPLOYMENT & EXPATRIATE ASSIGNMENT AGREEMENT
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between Xxxxxxx Xxxxx Xxxxxx & Tanning Technology Corporation
This letter specifies the terms and conditions of employment which will be
provided to you as a full-time employee of Tanning Technology Corporation while
on expatriate assignment in London. Your job title will be Vice President of
European Operations and Business Development. You will continue to report to
Xxxxx Tanning, President & CEO. You will be treated as an U.S. employee on
expatriate assignment in England for the duration of your expatriate assignment.
Before you depart on an international assignment an expatriate agreement is
required. The following programs are provided to help you and family assimilate
into the culture of the host country and to aid in the continuity of your
established lifestyle. This document specifies the additional terms and
conditions of employment which will be provided to you as a full-time employee
of Tanning Technology corporation while on expatriate assignment in London. In
the event of conflict, the terms of this Agreement will control.
I. EXPATRIATE ASSISTANCE PROGRAMS
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1. Legal Documentation. Tanning Technology Corporation will pay all fees
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related to completing the necessary documentation and obtaining of permits
to support your entry and ability to work in Europe. Tanning will pay all
fees related to completion of necessary documentation and obtaining of
permits to support your dependants entry and residence in Europe.
2. Physicals and Vaccinations. You and your dependents are advised to obtain
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vaccinations and inoculations legally or medially required by England as
well as for those anticipated for travel through other countries. These
costs will be paid directly or reimbursed to you by Tanning.
3. Dependent Education Assistance. Tanning will reimburse you for the
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additional cost of schooling your children if the host country public school
system does not provide a comparable educational curriculum and school year
as the U.S., or meet the special educational needs of your dependents.
Tanning will reimburse you for the costs of tutoring in addition or as an
alternative to tuition costs in the event your dependent(s) are unable to
gain admission to a suitable school during the term of your assignment.
If there is a suitable school within reasonable commuting distance, Tanning
will reimburse your registration fees, tuition, books, uniforms and
transportation expenses for your dependents in grades equivalent to
kindergarten through high school (K-12). Tanning will not reimburse you for
post-high school equivalent education tuition, fees, books, room and board,
and other college expenses.
If there is not an adequate school within a reasonable commuting distance,
Tanning will reimburse school commuting costs (preferred), or room and board
costs for residence at a suitable school (in addition to registration fees,
tuition, books and uniforms).
If you choose to send your children to a school in the U.S., you will be
reimbursed for education expenses up to the amount which would have been
spent for education at the nearest suitable school at the assignment
location (London).
Tanning will also pay for the professional service fees of referral and
assistance agencies required to identify and secure enrollment or tutoring
services for your children.
4. Maintenance Assistance. Tanning will pay up to $400 per month for receipted
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costs used for performing routine maintenance and caretaking services at
your Denver residence while you are on assignment in London. This assistance
will be provided for the duration of your foreign-service assignment.
5. Home Leave. You and your family members are eligible for a home leave trip
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after every three months of expatriate service. You and your dependants of
your family will be provided with company paid round-trip, coach class
airfares between London, England and the United States. Home leave is not in
addition to regular vacation time. Time allowed for home leave will be three
weeks (21 calendar days, including weekends and travel time). Additional
time-off requires the approval of a company officer. Home leave trips
(airfare) not taken within a calendar year period will be on a "use or
loose" basis. The first home leave may be taken in conjunction with the 1998
Christmas holiday. The second home leave may be taken in conjunction with
the Spring term school break.
Only business expenses you incur during periods of time spent on authorized
Company business during home leave will be reimbursed. Lodging, meals and
other expenses for accompanying legal dependents will be your
responsibility.
6. Unforeseen Events. If serious illness or death of a family member should
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occur during the assignment, special provisions for leave time and
extraordinary expenses will be considered.
II. EXPATRIATE COMPENSATION PROGRAMS
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Compensation. The objective of Tanning's expatriate compensation program is to
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allow you reasonable continuity in your purchasing power in England compared
with the U.S. The elements of your compensation program will include:
. Base salary
. Bonus
. International service premium
. Goods and services differential
. Housing differential
. Stock Options
. Income Tax preparation
Both premiums and differentials are paid to you during the assignment. These
payments cease upon repatriation or retirement, upon a move to an assignment
location where these payments are
inappropriate, when you of the Company terminates the assignment, or when you
goes on local payroll.
1. Base salary. Your base salary rate of pay (for bonus calculation purposes)
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will continue at $250,000.00 per year. Your base salary and bonus payments
will be governed by the U.S. (your home country) salary administration
program. Xxxxx Tanning (your immediate supervisor) will be responsible for
reviewing your performance and initiating the salary reviews and processing
any necessary salary change authorizations. Unless tax and legal
implications prohibit, you will be able to specify the portion of
compensation to be paid in local currency and the portion to be paid in home
country currency.
2. Bonus. Your existing U.S. bonus plan structure will continue under the same
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1998 format for 1999.
3. International Service Premium. In addition to your base salary, you will
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receive a 15% foreign-service premium. This premium will be paid as an
increment to your base salary in the amount of $3,625.00 per month (15% of
base salary plus $500 per month for incidentals). This payment is an
incentive which is intended as an offset for the problems inherent in making
an international move, breaking home ties and adjusting to the assignment
country's culture, etc. This premium will be paid in local currency monthly
beginning November 1, 1998.
4. Goods and Services Allowance. Based upon cost of living data research by
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Organizational Resource Counselors, Inc. you will be entitled to a "Goods
and Services" allowance $4,802.14 (US$57,625.71 on an annualized basis).
This allowance will be paid to you in a monthly increment to your base
salary in the amount of $4,802.14. This Goods & Services allowance (G&S) is
designed to provide sufficient local currency with which to buy goods and
services comparable to those normally purchased in the U.S. Your G&S
allowance will be reviewed periodically, updated when appropriate and may
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increase or decrease as conditions change. This allowance will be paid in
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local currency monthly beginning on November 1, 1998.
In situations where the G&S is negative, the Company will assume a zero G&S
differential..
5. Housing Allowance. Based upon cost of living data research by
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Organizational Resource Counselors, Inc. you will be entitled to a "housing
allowance" of up to (Pounds)4,500 per month (paid directly from the Company
to your designated landlord) plus utilities. Local housing costs will be
reviewed on a regular basis, updated when appropriate, and may increase or
decrease as conditions change.
6. Rental Furniture. Due to the interim nature of this assignment, Tanning
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will not transport household furniture to host country. If suitable
furnished housing is not available, Tanning will rent furniture (or
otherwise acquire) suitable for a similar lifestyle as maintained in the
home country.
7. Insurance Allowance. You will be entitled to an "insurance allowance for
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personal property and liability for your leased housing and cars in the host
country.
6. Tax Equalization. It is Tanning's policy to use the tax equalization
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approach for expatriates. When tax equalization is applied, you neither bear
the burden of any additional taxation nor
reap any windfall as a consequence of the international expatriate
assignment. The Tanning tax equalization guideline is designated to ensure
that your income, personal property, employment or other tax cost, while an
expatriate, will approximate what your tax cost would have been in the U.S.
for your salary and bonus income. This equalization will be determined by
outside, independent tax specialists retained by you and paid for by
Tanning.
Cost-of-living differentials, housing, insurance, education and car
assistance plans are "tax protected" by Tanning which means that Tanning
will absorb home country (U.S.) and host country tax obligations for the
value of these payments to you (if applicable, meaning treated as "in kind"
personal income to you). Tanning will "tax equalize" your foreign service
premium payments which means that Tanning will absorb tax obligations you
incur in your assignment country which are in excess of the tax you would
have paid for the equivilent income in the U.S.
Private income and spousal income are not included in the tax equalization
program. The equalization program does not cover wealth, property, estate,
value added, sales or other similar taxes that are not directly associated
with income from your employment with Tanning.
7. Tax Counseling and Tax Return Preparation. Tanning will pay for one pre-
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transfer counseling session with a designated tax consultant. This session
is to be scheduled prior to departure and is intended to provide you with an
opportunity to assess the tax consequences arising from the assignment. In
addition to the pre-assignment tax counseling session, you should meet with
(at Tanning's expense) an approved England tax consultant within 30 days
after arriving in England. In order to ensure that taxes are filed promptly
and consistently within the laws of the home and host countries, you should
be discussing tax-filing obligations with the tax consultant during your
consultation session. Tanning will pay the cost of preparing home and host
country tax returns for tax years 1998, 1999 and future years if this
addendum is extended. Tax filling data will be kept strictly confidential
between you and our designated tax advisor.
8. Participation in Home Country Benefit Plans. You will be covered by the
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benefit plans provided to full-time U.S. employees. If during expatriation,
the employee is able to continue participation in the home country social
security and benefit plans, you must do so. In the even your home country
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benefit plan coverage cannot be extended to England, arrangements for
obtaining reasonably similar levels of coverage through other means will be
provided in each of healthcare, disability and life insurance benefit plans.
If you incur duplicate costs, you will be reimbursed for any mandatory
contributions to England benefit programs on a "tax protected" basis.
Health Care Plan Participation. The company is committed to maintaining
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equivilent levels of coverage in the U.K. compared to the U.S. Our health
care plan allows for continuing coverage for up to a one year period for
employees and dependents residing outside the U.S. For incidental medical
expenses it is best to pay them direct and send claims to us for processing
and reimbursement. For larger expense items many doctors will accept delayed
payment (when you receive reimbursement from our plan). If there are issues
with payment timing the company will provide advance payment on your behalf
and then reconcile with you when final payments are processed. We will
examine the impact of costs to you and take measures appropriate to keep
cost exposures comparable to what you would experience using the plan in the
U.S.
9. Maintaining Home country Social Security Benefits. You will be responsible
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for maintaining your participation in the U.S. social security benefit plans
during your expatriate assignment to England. Lapses in contributions could
reduce the value of your social security benefits that are eventually
available at the time of your retirement. Maintaining this participation
through payroll deductions (split pay arrangement) or personally directed
contributions to the appropriate government agency is strongly encouraged.
If you keep your U.S. social security contributions current you will be
reimbursed for the value of the social security contributions required in
England (since it is highly unlikely you will realize any future social
security benefits from England due to the temporary nature of your
assignment). Because you will be reimbursed for contributions to host
country government plans, any benefits payable from these plans will revert
to Tanning.
III. RELOCATION & TRANSPORTATION ASSISTANCE
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1. Transportation to/from England. Tanning will provide round-trip airfare for
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you and your dependants from Denver, Colorado to your assignment in England
at the start and end of your assignment. Tanning will provide airfare for
your spouse to finalize schooling and housing arrangements in October, 1998.
2. Movement of Household Goods. Tanning will assume reasonable expenses for
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the limited shipment of personal effects necessary to support day-to-day
living requirements in London. Due to the temporary nature and intent of
this type of assignment household goods should be limited to items essential
for daily living requirements that cannot be reasonably obtained in London.
Household goods are to be limited because Tanning will provide for furnished
accommodations in the foreign service environment.
Special packing or importation costs and insurance for shipment of objects
of unusual value such as antiques, works of art, etc., will not be borne by
the Company. In general, furniture items will not be shipped to the
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assignment location. In cases where you does not ship furniture and
furnished housing is unavailable in the assignment location, a furniture
rental or acquisition allowance will be provided.
2. Storage of Goods in U.S. Tanning will reimburse you for household goods
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placed in storage in the U.S.
3. Transportation in England. You will be provided with two cars for use
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during the term of your assignment. These cars should be obtained in a
manner consistent with the company's car allowance and lease program. The
intent of this transportation allowance is to assist you in leasing a car
for yourself and your spouse in England at a reasonable cost.
IV. MISCELLANIOUS PROVISIONS
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1. Term of Assignment. This expatriate assignment will be from November 15,
1998 through June 31, 1999. It may be extended upon mutual agreement of the
parties.
2. Repatriation. At the conclusion of your assignment you will be repatriated
to the U.S. (Denver) in a Corporate Executive position. Tanning will assume
reasonable expenses for the shipment of personal effects and moving of your
family back to Denver, Colorado upon the conclusion of this assignment.
Tanning has made a good faith effort to estimate the component costs of elements
of this overall package. While the cost of individual components within this
overall package may vary from established estimates, the overall package of
benefits is capped at a cost of $215,000 through the period ending 6/31/99, but
exclusive of tax equalization expenses. Extensions on the term of your
assignment will not be subject to the caps established above. To accept this
Employment & Expatriate Agreement, please review, sign and return this document
by fax (000-000-0000) or courier to Tanning Technology Corporation, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (telephone: 000-000-0000).
Tanning Technology Corporation offers a challenging and rewarding environment
with the opportunity for accelerated career development. We very much look
forward to an anticipated long-term and mutually beneficial association.
Sincerely, Accept:
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Xxxxx Xxxxxx
Xxxx Tanning
VP of Administration & Treasurer Date:
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Date:
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