{"id":39288,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-internet-travel-network-and-kenneth-r.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-internet-travel-network-and-kenneth-r","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-internet-travel-network-and-kenneth-r.html","title":{"rendered":"Employment Agreement &#8211; Internet Travel Network and Kenneth R. Pelowski"},"content":{"rendered":"<pre> \n                            Internet Travel Network\n                              445 Sherman Avenue\n                             Palo Alto, CA 94306\n\n                                March 25, 1999\n\nMr. Kenneth R. Pelowski\n3 Brady Place\nMenlo Park, CA 94025\n\nDear Ken:\n\n          Internet Travel Network (the \"Company\") is pleased to offer you\nemployment on the following terms:\n\n          1.   Position. You will serve in a full-time capacity as Chief\nOperating Officer and Chief Financial Officer of the Company. You will report to\nthe Company's Chief Executive Officer. By signing this letter agreement, you\nrepresent and warrant to the Company that you are under no contractual\ncommitments inconsistent with your obligations to the Company.\n\n          2.   Salary and Bonus. You will be paid a salary at the annual rate of\n$175,000, payable in semi-monthly installments in accordance with the Company's\nstandard payroll practices for salaried employees. This salary will be subject\nto adjustment pursuant to the Company's employee compensation policies in effect\nfrom time to time. You will also have the opportunity to earn a cash bonus of up\nto $50,000 per year.\n\n          3.   Stock Options. Subject to the approval of the Company's Board of\nDirectors or its Compensation Committee, you will be granted a nonstatutory\nstock option to purchase 500,000 shares of the Company's Common Stock. The\nexercise price per share will be equal to $1.00. The option will be subject to\nthe terms and conditions applicable to options granted under the Company's 1996\nStock Incentive Plan (the \"Plan\"), as described in the Plan and the applicable\nstock option agreement. The option will be immediately exercisable, but the\npurchased shares will be subject to repurchase by the Company at the exercise\nprice in the event that your service terminates before you vest in the shares.\nExcept as provided in Paragraph 4 below, you will vest in 12.5% of the option\nshares when you complete the sixth month of continuous service and the balance\nwill vest in equal monthly installments over the next 42 months of continuous\nservice, as described in the applicable stock option agreement. You may pay the\nexercise price of the option with a full-recourse promissory note secured by the\noption shares. The note will have a five-year term (but will be due 180 days\nafter your employment terminates, if earlier), will bear interest at the\nApplicable Federal Rate and will provide for principal and interest to be\npayable in a lump sum on the due date.\n\n          4.   Accelerated Vesting After Change in Control. If the Company is\nsubject to a Change in Control (as defined in the Plan) before your service with\nthe Company\n\n \nMr. Kenneth R. Pelowski                                           March 25, 1999\n                                                                          Page 2\n\nterminates, and if you are subject to an involuntary discharge within 18 months\nafter that Change in Control, then all of your option shares will be vested. For\npurposes of this Paragraph 4, you will be deemed to have been discharged by the\nCompany if you resign within 18 months after a Change in Control and after the\nCompany has notified you that your annual base salary will be materially\nreduced, that there will be a material adverse change in your title or duties,\nor that your principal place of employment will be relocated by more than 35\nmiles. For purposes of this Paragraph 4, you will also be deemed to have been\ndischarged by the Company if you resign within 18 months after a Change in\nControl because James J. Hornthal is serving as a member of the board of\ndirectors or an officer of the Company, of its parent corporation or of the\nsuccessor corporation in a merger with the Company.\n\n          5.   Internet Purchasing Opportunity. As you know, you and I had\ndiscussed prior to my joining the Company the possibility of our launching a\nseparate company focused on internet purchasing. I am aware that you had devoted\ntime to pursuing the opportunity after I joined the Company and that your\njoining the Company will prevent you from independently pursuing the\nopportunity. You have agreed that in connection with your joining the Company\nyou will not continue to pursue this opportunity. In addition, you have agreed\nthat you will assign to the Company any intellectual property that you\nindependently developed relating to the opportunity. You will transfer to the\nCompany any of such intellectual property relating to the internet purchasing\ncompany that you have independently developed in consideration of 125,000\nunvested shares of the Company's Common Stock. The details of this purchase are\ndescribed in Exhibit A attached hereto.\n\n          6.   Parachute Excise Tax Gross-Up. If you become subject to the\nexcise tax applicable to excess parachute payments under section 4999 of the\nInternal Revenue Code of 1986, as amended, then the Company will reimburse you\nfor that tax (subject to certain limitations). The details of the gross-up\npayment are described in Exhibit B attached hereto.\n\n          7.   Proprietary Information and Inventions Agreement. Like all\nCompany employees, you will be required, as a condition to your employment with\nthe Company, to sign the Company's standard Proprietary Information and\nInventions Agreement, a copy of which is attached hereto as Exhibit C.\n\n          8.   Period of Employment. Your employment with the Company will be\n\"at will,\" meaning that either you or the Company will be entitled to terminate\nyour employment at any time and for any reason, with or without cause. Any\ncontrary representations which may have been made to you are superseded by this\noffer. This is the full and complete agreement between you and the Company on\nthis term. Although your job duties, title, compensation and benefits, as well\nas the Company's personnel policies and procedures, may change from time to\ntime, the \"at will\" nature of your employment may only be changed in an express\nwritten agreement signed by you and a duly authorized officer of the Company.\n\n          9.   Outside Activities. While you render services to the Company, you\nwill not engage in any other gainful employment, business or activity without\nthe written consent of\n\n \nMr. Kenneth R. Pelowski                                           March 25, 1999\n                                                                          Page 3\n\nthe Company. While you render services to the Company, you also will not assist\nany person or organization in competing with the Company, in preparing to\ncompete with the Company or in hiring any employees of the Company.\n\n          10.  Withholding Taxes. All forms of compensation referred to in this\nletter are subject to reduction to reflect applicable withholding and payroll\ntaxes.\n\n          11.  Indemnification. The Company hereby indemnifies you in the event\nthat Preview Travel, Inc. (\"Preview\") asserts any claim against you with respect\nto your employment with the Company, provided that you comply with (a) this\nletter agreement, (b) the Proprietary Information and Inventions Agreement\nbetween you and the Company and (c) the Employee Proprietary Information\nAgreement between you and Preview. The Company, at its discretion, may either at\nits own expense engage counsel to defend you in any legal action brought by\nPreview that is covered by this Paragraph 11 or reimburse you for the reasonable\nfees and costs of counsel whom you retain to defend you in any legal action\nbrought by Preview that is covered by this Paragraph 11.\n\n          12.  Entire Agreement. This letter and the Exhibits attached hereto\ncontain all of the terms of your employment with the Company and supersede any\nprior understandings or agreements, whether oral or written, between you and the\nCompany.\n\n          13.  Amendment and Governing Law. This letter agreement may not be\namended or modified except by an express written agreement signed by you and a\nduly authorized officer of the Company. The terms of this letter agreement and\nthe resolution of any disputes will be governed by California law.\n\n          We hope that you find the foregoing terms acceptable. You may indicate\nyour agreement with these terms and accept this offer by signing and dating both\nthe enclosed duplicate original of this letter and the enclosed Proprietary\nInformation and Inventions Agreement and returning them to me. As required by\nlaw, your employment with the Company is also contingent upon your providing\nlegal proof of your identity and authorization to work in the United States.\nThis offer, if not accepted, will expire at the close of business on March __,\n1999.\n\n          We look forward to having you join us on _________ __, 1999.\n\n \nMr. Kenneth R. Pelowski                                           March 25, 1999\n                                                                          Page 4\n\n\n          If you have any questions, please call me at 650.614.6300.\n\n                                         Very truly yours,\n\n                                         Internet Travel Network\n\n                                         By:___________________________________\n                                         Chief Executive Officer\n\nI have read and accept this employment offer:\n\n\n____________________________________________\nSignature of Kenneth R. Pelowski\n\nDated: March __, 1999\n\n\nAttachments\n\nExhibit A:  Summary of Stock Purchase and Stock Purchase Agreement\nExhibit B:  Parachute Excise Tax Gross-Up Provisions\nExhibit C:  Proprietary Information and Inventions Agreement\n\n \nMr. Kenneth R. Pelowski                                           March 25, 1999\n                                                                          Page 5\n\n\nExhibit A\n\n             Summary of Stock Purchase and Stock Purchase Agreement\n\n \nMr. Kenneth R. Pelowski                                           March 25, 1999\n                                                                          Page 6\n\n\nExhibit B\n\n                   Parachute Excise Tax Gross-Up Provisions.\n\n          (a)  Gross-Up Payment. If it is determined that any payment or\ndistribution of any type to or for the benefit of the employee by the Company,\nany of its affiliates, any person who acquires ownership or effective control of\nthe Company or ownership of a substantial portion of the Company's assets\n(within the meaning of section 280G of the Internal Revenue Code of 1986, as\namended (the \"Code\"), and the regulations thereunder) or any affiliate of such\nperson, whether paid or payable or distributed or distributable pursuant to the\nterms of this letter or otherwise (the \"Total Payments\"), would be subject to\nthe excise tax imposed by section 4999 of the Code or any interest or penalties\nwith respect to such excise tax (such excise tax and any such interest or\npenalties are collectively referred to as the \"Excise Tax\"), then the employee\nshall be entitled to receive an additional payment (a \"Gross-Up Payment\"). The\namount of the Gross-Up Payment shall be as follows:\n\n          (i)  If the Gross-Up Payment becomes payable in a taxable year of the\n     Company in which the Company has no taxable income (after taking into\n     account net operating loss carry-forwards), the Gross-Up Payment shall be\n     equal to the product of (A) 50% multiplied by (B) an amount calculated to\n     ensure that after payment by the employee of all taxes (and any interest or\n     penalties imposed with respect to such taxes), including any Excise Tax,\n     imposed upon the Gross-Up Payment, the employee retains an amount of the\n     Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.\n\n          (ii) If the Gross-Up Payment becomes payable in a taxable year of the\n     Company in which the Company has taxable income (after taking into account\n     net operating loss carry-forwards), the Gross-Up Payment shall be equal to\n     the excise tax imposed on the employee by section 4999 of the Code, without\n     regard to any taxes payable by the employee with respect to the Gross-Up\n     Payment.\n\n          (b)  Determination by Accountant. All determinations and calculations\nrequired to be made under this Exhibit B shall be made by an independent\naccounting firm selected by the employee from among the largest five accounting\nfirms in the United States (the \"Accounting Firm\"), which shall provide its\ndetermination (the \"Determination\"), together with detailed supporting\ncalculations regarding the amount of any Gross-Up Payment and any other relevant\nmatter, both to the Company and the employee within five days of the termination\nof the employee's employment, if applicable, or such earlier time as is\nrequested by the Company or the employee (if the employee reasonably believes\nthat any of the Total Payments may be subject to the Excise Tax). If the\nAccounting Firm determines that no Excise Tax is payable by the employee, it\nshall furnish the employee with a written statement that such Accounting Firm\nhas concluded that no Excise Tax is payable (including the reasons therefor) and\nthat the employee has substantial authority not to report any Excise Tax on the\nemployee's federal income tax return. If a Gross-Up Payment is determined to be\npayable, it shall be paid to the employee\n\n \nMr. Kenneth R. Pelowski                                           March 25, 1999\n                                                                          Page 7\n\n\nwithin five days after the Determination is delivered to the Company or the\nemployee. Any determination by the Accounting Firm shall be binding upon the\nCompany and the employee, absent manifest error. The Company shall pay the fees\nand costs of the Accounting Firm.\n\n          (c)  Over- and Underpayments. As a result of uncertainty in the\napplication of section 4999 of the Code at the time of the initial determination\nby the Accounting Firm hereunder, it is possible that Gross-Up Payments not made\nby the Company should have been made (\"Underpayment\"), or that Gross-Up Payments\nwill have been made by the Company which should not have been made\n(\"Overpayments\"). In either such event, the Accounting Firm shall determine the\namount of the Underpayment or Overpayment that has occurred. In the case of an\nUnderpayment, the amount of such Underpayment shall be promptly paid by the\nCompany to or for the benefit of the employee. In the case of an Overpayment,\nthe employee shall, at the direction and expense of the Company, take such steps\nas are reasonably necessary (including the filing of returns and claims for\nrefund), follow reasonable instructions from, and procedures established by, the\nCompany, and otherwise reasonably cooperate with the Company to correct such\nOverpayment.\n\n          (d)  Limitation on Parachute Payments. Any other provision of this\nExhibit B notwithstanding, if the Excise Tax could be avoided by reducing the\nTotal Payments by $45,000 or less, then the Total Payments shall be reduced to\nthe extent necessary to avoid the Excise Tax and no Gross-Up Payment shall be\nmade. If the Accounting Firm determines that the Total Payments are to be\nreduced under the preceding sentence, then the Company shall promptly give the\nemployee notice to that effect and a copy of the detailed calculation thereof.\nThe employee may then elect, in the employee's sole discretion, which and how\nmuch of the Total Payments are to be eliminated or reduced (as long as after\nsuch election no Excise Tax will be payable) and shall advise the Company in\nwriting of the employee's election within 10 days of receipt of notice. If no\nsuch election is made by the employee within such 10-day period, then the\nCompany may elect which and how much of the Total Payments are to be eliminated\nor reduced (as long as after such election no Excise Tax will be payable) and\nshall notify the employee promptly of such election.\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7637],"corporate_contracts_industries":[9525],"corporate_contracts_types":[9539,9544],"class_list":["post-39288","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-getthere-inc","corporate_contracts_industries-transportation__services","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39288"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39288"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39288"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}