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CONDITIONAL AMENDMENT TO EMPLOYMENT AGREEMENT
This Conditional Amendment to Employment Agreement (the "AMENDED
AGREEMENT") by and among TravelNow.com Inc., a Delaware corporation with
principal offices at 318 Park Central Square-Suite 306, Springfield, Missouri
65806 (the "COMPANY"), Chris Kuhn, an individual and resident of the State of
Missouri ("EXECUTIVE"), and, solely with respect to the provisions of Section 6
hereof, Hotel Reservations Network, Inc., a Delaware corporation ("PARENT"),
shall be effective as of the consummation of the Offer, as such term is defined
in that certain Agreement and Plan of Merger dated as of the date hereof by and
among Parent, Wonsub, Inc., a Delaware corporation and wholly-owned subsidiary
of Parent ("Sub"), and the Company (the "MERGER AGREEMENT").
RECITALS
A. The Company entered into an employment agreement with Executive in
July 1999, as it may have been amended, providing for Executive's employment
with the Company on certain terms and conditions (the "ORIGINAL Agreement").
B. As of the date hereof, the Company, Parent and Sub have entered
into the Merger Agreement, a condition of which is that the Executive enter
into this Amended Agreement providing for the amendment and replacement of the
Original Agreement with this Amended Agreement.
C. All capitalized terms referred to in this Amended Agreement that
are not otherwise defined herein shall have the meanings given to them in the
Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as follows:
1. AMENDMENT AND REPLACEMENT. Upon the Effective Date (as defined
below), this Amended Agreement shall amend and replace in its entirety the
Original Agreement and the Original Agreement shall have no further force or
effect.
2. EFFECTIVE DATE. This Amended Agreement shall become effective as of
the consummation of the Offer provided for in the Merger Agreement (the
"EFFECTIVE DATE").
3. EMPLOYMENT. The Company hereby agrees to employ Executive as its
Chief Information Officer, subject to the supervision and direction of the
Company's Board of Directors.
4. TERM. This Amended Agreement shall continue in full force and
effect until terminated pursuant to Section 8 below.
5. COMPENSATION. As Chief Information Officer, Executive will receive
a salary of $10,834 per month, which will be paid semi-monthly in accordance
with the Company's normal payroll procedures. As a Company employee, Executive
is also eligible to receive certain employee benefits, including medical and
dental insurance benefits. The Company may change such benefits from time to
time.
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6. ESCROW OF CERTAIN PAYMENT. Pursuant to Section 8.1(4)(c) of the
Original Agreement, Executive becomes entitled to certain specified payments,
payable over time as provided therein, on the consummation of the Offer and the
Closing of the Merger (the "SPECIAL PAYMENTS"). In partial consideration for
Executive entering into this Amended Agreement, the Company agrees to make a
lump sum payment of the Special Payments into an escrow account on the date of
the consummation of the Offer. The Company, Executive and Parent will select a
financial institution to serve as escrow agent and execute an escrow agreement
prior to the date of the consummation of the Offer. The escrow agreement will
provide for the payment of the Special Payments to Executive on the 180th day
following the Closing of the Merger Parent agrees to advance to the Company, in
the form of a loan, an amount of funds sufficient to fund the total amount of
the Special Payments upon request of the Company following the consummation of
the Offer.
7. TERMS AND CONDITIONS. As an employee of the Company and by
executing this Amended Agreement, Executive agrees that the provisions of the
Employment Terms Supplement (a copy of which is attached hereto and
incorporated herein) are a part of this Amended Agreement and Executive agrees
to the provisions thereof. As additional evidence of such agreement, Executive
is executing the Employment Terms Supplement simultaneously with the execution
of this Amended Agreement.
8. TERMINATION. Executive's employment with the Company shall
terminate upon Executive's death, disability, or resignation from the Company.
Executive's employment with the Company constitutes at-will employment and may
be terminated by either party any any time; provided, however, that in the
event that the Company terminates Executive's employment without Cause (as
defined below), then the Company shall pay to Executive as severance, a monthly
amount equal to the Executive's regular monthly salary as it existed
immediately prior to such termination for a period of three (3) months
following such termination. Provided, however, that as a condition to receiving
any such severance, Executive shall have executed and delivered, and shall not
have revoked, a release of claims substantially in the form of Exhibit 1
attached to this Amended Agreement. As used herein, the term "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 the
Company; (iii) a material breach by Employee of any of the covenants made by
Employee under the terms of this Amended Agreement (including the Employment
Terms Supplement); or (iv) the willful and gross neglect by Employee of the
material duties required by this Amended Agreement.
9. AMENDMENT. The terms of this Amended Agreement shall not be
amended, altered or changed except by a written agreement executed by
Executive, the Company and Parent.
10. ENTIRE AGREEMENT. This Amended Agreement shall, together with the
Employment Terms Supplement, constitute the entire agreement between Executive
and the Company relating to the terms of Executive's employment, and supersedes
the Original Agreement and any other employment agreements or promises made to
Executive by anyone, whether oral or written.
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IN WITNESS WHEREOF, the parties hereto have executed this Amended
Agreement and agree that it will be effective as provided in Section 2 of this
Amended Agreement.
EMPLOYEE: COMPANY:
TRAVELNOW.COM INC.
/s/ Chris Kuhn By: /s/ H. Whit Ehrler
---------------------------------- ----------------------------------
Chris Kuhn ------------------,---------------
HOTEL RESERVATIONS NETWORK, INC.
(solely with respect to the provisions of Section 6 of this Amended Agreement)
By: /s/ Mel Robinson
------------------------------
DATE: January 3, 2001
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EXHIBIT 1
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 Conditionally Amended Employment Agreement dated January __,
2001 (as amended and in effect from time to time, the "EMPLOYMENT AGREEMENT")
between TravelNow.com, 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: [____________________]
-------------------------------
Date Signed: [____________________]
--------------------------------------------
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EMPLOYMENT TERMS SUPPLEMENT
FOR
CHRIS KUHN
The execution of this Employment Terms Supplement is a condition of my
employment with TravelNow.com Inc., its subsidiaries, affiliates, parent
corporation, successors or assigns (together the "COMPANY"), and in
consideration of the terms of my employment between myself and the Company, I
agree to the terms hereof.
1. CONFIDENTIAL INFORMATION AND TRAINING.
A. COMPANY INFORMATION. The Company promises to provide me
with access to certain confidential information during the course of my
employment that will allow me to perform my job duties. I agree at all times
during the term of my employment and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company, or to
disclose to any person, firm or corporation without written authorization of
the Board of Directors of the Company, any Confidential Information of the
Company. I understand that "CONFIDENTIAL INFORMATION" means any Company
proprietary information, technical data, trade secrets or know-how, including,
but not limited to, research, product plans, products, services, customer lists
and customers (including, but not limited to, customers of the Company on whom
I called or with whom I became acquainted during the term of my employment),
markets, software, developments, inventions, processes, formulas, technology,
designs, drawings, engineering, hardware configuration information, marketing,
finances or other business information disclosed to me by the Company, either
directly or indirectly, in writing, orally or by drawings or observation of
parts or equipment. I further understand that Confidential Information does not
include any of the foregoing items which have become publicly known and made
generally available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved or improvements or
new versions thereof.
B. FORMER EMPLOYER INFORMATION. I agree that I will not,
during my employment with the Company, improperly use or disclose any
proprietary information or trade secrets of any former or concurrent employer
or other person or entity and that I will not bring onto the premises of the
Company any unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by such
employer, person or entity.
C. THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive from third parties their confidential
or proprietary information subject to a duty on the Company's part to maintain
the confidentiality of such information and to use it only for certain limited
purposes. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third party.
D. SPECIALIZED TRAINING. The Company promises to provide me
with specialized training and instructions that will allow me to perform my job
duties.
2. INVENTIONS.
A. INVENTIONS RETAINED AND LICENSED. I have attached hereto,
as Schedule 1, a list (if any) describing all inventions, original works of
authorship, developments, improvements, and trade secrets which were made by me
prior to my employment with the Company (collectively referred to as "PRIOR
INVENTIONS"), which belong to me, which relate to the Company's proposed
business, products or research and development, and which are not assigned to
the Company hereunder; as indicated on Schedule 1, or, if no such list is
attached, I represent there are no such Prior Inventions. If in the course of
my employment with the Company, I incorporate into a Company product, process
or machine a Prior Invention owned by me or in which I have an interest, the
Company is hereby granted and shall have a nonexclusive, royalty-free, paid up,
irrevocable, perpetual, worldwide license to
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make, have made, modify, use and sell such Prior Invention as part of or in
connection with such product, process or machine. I will not be entitled to any
compensation for such grant.
B. ASSIGNMENT OF INVENTIONS. I agree that I will promptly
make full written disclosure to the Company, will hold in trust for the sole
right and benefit of the Company, and hereby assign to the Company, or its
designee, all my right, title, and interest in and to any and all inventions,
original works of authorship, developments, concepts, improvements, designs,
discoveries, ideas, software design, software coding, charts, drawings, work
papers, programs, manuals, data, trademarks or trade secrets, whether or not
patentable or registrable under copyright or similar laws, to the extent they
relate to the Company's business, products, services or projects assigned to me
by the Company, which I may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice, during
the period of time I am in the employ of the Company (collectively referred to
as "INVENTIONS") and I further acknowledge that all Inventions which are made
by me (solely or jointly with others) within the scope of and during the period
of my employment with the Company and which are protectible by copyright are
"works made for hire," as that term is defined in the United States Copyright
Act. I understand and agree that the decision whether or not to commercialize
or market any Invention developed by me solely or jointly with others is within
the Company's sole discretion and for the Company's sole benefit and that no
royalty will be due to me as a result of the Company's efforts to commercialize
or market any such Invention.
C. INVENTIONS ASSIGNED TO THE UNITED STATES. I agree to
assign to the United States government all my right, title, and interest in and
to any and all Inventions whenever such full title is required to be in the
United States by a contract between the Company and the United States or any of
its agencies.
D. MAINTENANCE OF RECORDS. I agree to keep and maintain
adequate and current written records of all Inventions made by me (solely or
jointly with others) during the term of my employment with the Company. The
records will be in the form of notes, sketches, drawings, and any other format
that may be specified by the Company. The records will be available to and
remain the sole property of the Company at all times.
E. PATENT AND COPYRIGHT REGISTRATIONS. I agree to assist the
Company, or its designee, at the Company's expense, in every proper way to
secure the Company's rights in the Inventions and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto in any and
all countries, including the disclosure to the Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments and all other instruments which the Company
shall deem necessary in order to apply for and obtain such rights and in order
to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and
any copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue after the termination of this Agreement. If the Company is unable
because of my mental or physical incapacity or for any other reason to secure
my signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions or original
works of authorship assigned to the Company as above, then I hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents
as my agent and attorney in fact, to act for and in my behalf and stead to
execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by me.
3. CONFLICTING EMPLOYMENT. I agree that, during the term of my
employment with the Company, I will not engage in any other employment,
occupation, consulting or other business activity directly related to the
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business in which the Company is now involved or becomes involved during the
term of my employment, nor will I engage in any other activities that conflict
with my obligations to the Company.
4. RETURNING COMPANY DOCUMENTS. I agree that, at the time of
leaving the employ of the Company, I will deliver to the Company (and will not
keep in my possession, recreate or deliver to anyone else) any and all devices,
records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items developed
by me pursuant to my employment with the Company or otherwise belonging to the
Company, its successors or assigns, including, without limitation, those
records maintained pursuant to paragraph 2(d).
5. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the
employ of the Company, I hereby grant consent to notification by the Company to
my new employer about my rights and obligations under this Agreement.
6. NON-SOLICITATION OF EMPLOYEES. I agree that for a period of
one (1) year immediately following the termination of my relationship with the
Company, for any reason, I shall not, either directly or indirectly, solicit,
induce, recruit or encourage any of the Company's employees to leave their
employment, or take away such employees, or attempt to solicit, induce,
recruit, encourage or take away employees of the Company, either for myself or
for any other person or entity, or otherwise hire as an employee or a
consultant, for myself or any other person or entity, any such employee of the
Company. For the purposes of this paragraph, a person is considered as an
employee of the Company while they are employed by the Company and for a period
of sixty (60) days after the termination of their employment with the Company.
7. NON-SOLICITATION OF SUPPLIERS. I agree that for a period of
one (1) year immediately following the termination of my employment
relationship with the Company, for any reason, I shall not, either directly or
indirectly solicit, induce, recruit or encourage any of the hotels, affiliates,
or commercially linked websites doing business with the Company to limit,
curtail, or stop doing business with the Company or to attempt to divert
business directed by such parties to the Company to any other person or entity.
8. NON-COMPETE PROVISION.
A. COVENANT. In consideration for the Company's promises to
me in Section 1 above and in order to be eligible to participate in the
Company's stock option plan, and other good and valuable consideration, I agree
that during my employment and for a period of one (1) year following the
termination of my employment with the Company, for whatever reason, I will not
in any manner (other than for the Company), directly or by assisting others,
engage in, have an equity or profit interest in, or render services of any kind
or nature to any business that Competes (as defined below) with the Company.
Notwithstanding anything herein to the contrary, nothing in this Agreement
shall prevent or prohibit me from owning not more than 5% of a class of equity
securities issued by any entity listed on any national securities exchange or
interdealer quotation system.
B. DEFINITIONS. For purposes of this Section 8, the term
"COMPETES" with the Company shall mean any one or more of the following
activities:
(i) offering to locate or book hotel rooms or time-based
lodging in any hotel or facility located in a Protected City
(as defined below) using the world wide web of the internet
("World Wide Web");
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(ii) offering to locate or book hotel rooms or time-based
lodging in any hotel or facility located in any
Protected City using a telephone call center;
(iii) offering to book or arrange, directly or through other
parties, any airline or cruise line travel arrangements
using the World Wide Web or a telephone call center;
(iv) offering to book or arrange, directly or through other
parties, any rental car reservations in any Protected
City using the World Wide Web or a telephone call
center; or
(iii) engaging in any other business activities (other than
those described in (b)(i) through (b)(iv) above) which are
conducted, offered or provided by the Company during your
employment and as to which you are involved, to the extent
your activities are in the same markets or states as those
engaged in by the Company.
As used herein in this Section 8, the term "PROTECTED CITY" shall mean any city
in which the Company offers to locate or book hotel rooms, either directly
through the Company, or indirectly through links to any other parties during
your employment.
C. COVERAGE. I acknowledge that the Company markets its
products and services to persons throughout the United States through
advertising and through its World Wide Web sites, and I agree that this
non-compete provision is necessary to protect the Company against any business
which Competes with the Company.
9. REMEDIES. I acknowledges that (a) it would be difficult to
calculate damages to the Company or its subsidiaries or affiliates from any
breach of my obligations under this Agreement, (b) that injuries to Company and
its subsidiaries or affiliates from any such breach would be irreparable and
impossible to measure, and (c) that the remedy at law for any breach or
threatened breach of Employee's obligations under this Agreement would
therefore be an inadequate remedy and, accordingly, Company shall, in addition
to all other available remedies (including without limitation seeking such
damages as it can show it and its subsidiaries or affiliates have sustained by
reason of such breach or the exercise of all other rights it has under this
Agreement), be entitled to injunctive and other similar equitable remedies.
10. GENERAL PROVISIONS.
A. GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This
agreement will be governed by the laws of the State of Delaware, without regard
to the choice of law provision, statutes, regulations or principles of this or
any other jurisdiction. I hereby expressly consent to the personal jurisdiction
of the state and federal courts located in Texas for any lawsuit filed there
against me by the Company arising from or relating to this Agreement.
B. ENTIRE AGREEMENT. This agreement sets forth the entire
agreement and understanding between the Company and me relating to the subject
matter herein and supersedes all prior discussions and/or agreements between
us. No modification of or amendment to this agreement, nor any waiver of any
rights under this agreement, will be effective unless in writing signed by the
party to be charged. Any subsequent change or changes in my duties, salary or
compensation will not affect the validity or scope of this agreement.
C. SEVERABILITY. If one or more of the provisions in this
agreement are deemed void by law, then the remaining provisions will continue
in full force and effect.
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D. SUCCESSORS AND ASSIGNS. This agreement will be binding
upon my heirs, executors, administrators and other legal representatives and
will be for the benefit of the Company, its successors, and its assigns.
E. CONFLICT OF INTEREST GUIDELINES. I agree to diligently
adhere to the Conflict of Interest Guidelines attached as Exhibit "A" hereto.
January 3, 2001 /s/ Chris Kuhn
---------------------------------
Chris Kuhn
TRAVELNOW.COM INC.
By: /s/ H. Whit Ehrler
----------------------------------
----------------------------------
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EXHIBIT A
TRAVELNOW.COM INC.
CONFLICT OF INTEREST GUIDELINES
It is the policy of TraveNow.com Inc. (the "Company") to conduct its
affairs in strict compliance with the letter and spirit of the law and to
adhere to the highest principles of business ethics. Accordingly, all officers,
employees and independent contractors must avoid activities which are in
conflict, or give the appearance of being in conflict, with these principles
and with the interests of the Company. The following are potentially
compromising situations which must be avoided. Any exceptions must be reported
to the Chief Executive Officer and written approval for continuation must be
obtained.
1. Revealing confidential information to outsiders or misusing
confidential information. Unauthorized divulging of information is a violation
of this policy whether or not for personal gain and whether or not harm to the
Company is intended. (The Employment Terms elaborate on this principle and are
binding agreements.)
2. Accepting or offering substantial gifts, excessive entertainment,
favors or payments which may be deemed to constitute undue influence or
otherwise be improper or embarrassing to the Company.
3. Participating in civic or professional organizations that might
involve divulging confidential information of the Company.
4. Initiating or approving personnel actions affecting reward or
punishment of employees or applicants where there is a family relationship or
is or appears to be a personal or social involvement.
5. Initiating or approving any form of personal or social harassment
of employees.
6. Investing or holding outside directorship in suppliers, customers,
or competing companies, including financial speculations, where such investment
or directorship might influence in any manner a decision or course of action of
the Company.
7. Borrowing from or lending to employees, customers or suppliers.
8. Acquiring real estate of interest to the Company.
9. Improperly using or disclosing to the Company any proprietary
information or trade secrets of any former or concurrent employer or other
person or entity with whom obligations of confidentiality exist.
10. Unlawfully discussing prices, costs, customers, sales or markets
with competing companies or their employees.
11. Making any unlawful agreement with distributors with respect to
prices.
12. Improperly using or authorizing the use of any inventions which
are the subject of patent claims of any other person or entity.
13. Engaging in any conduct which is not in the best interest of the
Company.
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Each officer, employee and independent contractor must take every
necessary action to ensure compliance with these guidelines and to bring
problem areas to the attention of higher management for review. Violations of
this conflict of interest policy constitute grounds for immediate termination
of employment.
Employment Agreement Page 11
