Exhibit 10.7
SEPARATION AGREEMENT AND
GENERAL RELEASE
This Separation Agreement and
General Release (“Separation Agreement”) is entered
into by and between VICTOR PYNN (“Employee”) ,
and TRX INC., a Georgia corporation
(“TRX”) , effective as of the Effective Date as
defined herein.
WHEREAS, Employee has been an
employee of TRX pursuant to an employment agreement dated
April 5, 2004, as amended on April 27, 2005 and as
further amended on December 12, 2008 (collectively the
“Employment Agreement”); and
WHEREAS, Employee desires to
terminate his employment relationship with TRX, and TRX has agreed
to such termination; and
WHEREAS, Employee and TRX wish to
memorialize in writing the terms upon which the employment
relationship is being terminated;
THEREFORE, Employee and TRX agree as
follows:
1. Termination of Employment
. Employee’s employment with TRX shall end effective
February 2, 2009 (the “Termination
Date”).
2. Compensation and Benefits
.
(a) Severance payments . If
Employee executes the General Release attached as Exhibit A on or
after the Termination Date (but no later than 30 days after the
Termination Date), TRX shall pay to Employee severance pay in the
total amount of Fifty-Four Thousand Five Hundred and Twenty Dollars
($54,520.00) , less applicable tax withholdings,
representing a continuation of Employee’s current base salary
from the Termination Date through April 5, 2009. For
compliance with Section 409A of the Internal Revenue Code of
1986, because Pynn is a “specified employee” of TRX for
purposes of Code Section 409A, no severance pay amounts shall
be paid to Pynn before the date that is six (6) months
following the Termination Date. On the date that is six
(6) months following the Termination Date, Pynn shall be paid
a lump sum amount representing the amounts that would have been
paid under this section during the 6-month delay period up through
April 5, 2009 but for the delay provision.
(b) Health insurance .
Employee’s health insurance coverage shall continue through
the Termination Date. Thereafter, Employee shall be eligible for
COBRA continuation of Employee’s health insurance coverage at
Employee’s own expense to the extent required by law and
permitted by the applicable health insurance plan or
policy.
(c) Automobile Allowance . If
Employee executes the General Release attached as Exhibit A on or
after the Termination Date (but no later than 30 days after the
Termination Date), TRX will pay to employee two monthly payments of
$1,000 each, less applicable tax withholdings, in lieu of his
automobile allowance. These payments shall be paid to Employee in a
lump sum amount on the date that is six (6) months following
the Termination Date.
(d) Paid Time Off (PTO) . On
the date that is six (6) months following the Termination
Date, TRX shall pay to Employee a payment for any accrued but
unused PTO time, less applicable tax withholdings. Employee shall
not be entitled to any additional pay for unused
holidays.
(e) Stock options . Any stock
options previously granted to Employee shall be governed by the
terms of the applicable stock option agreement and stock option
plan.
(f) Other compensation and
benefits . Except as otherwise expressly stated herein, all
employee benefits provided by TRX shall cease as of the Termination
Date. Employee acknowledges that he shall not be entitled to any
salary, bonuses, or other compensation or benefits other than those
expressly stated in this Separation Agreement. Notwithstanding the
foregoing, if the TRX Board of Directors approves a bonus to be
paid out to Employee specifically (or to a class of employees of
TRX that would have included Employee, such as senior executives of
TRX, had he still been within the employ of TRX, pro rated for his
length of time in such class during 2008) under the TRX Executive
Annual Incentive Plan (“EAIP”) for 2008, to the extent
that Employee was otherwise eligible for such a bonus under the
EAIP and under the terms of his employment contract as of the
Termination Date, this sub-section (f) shall not preclude
Employee from receiving such bonus. To the extent any such bonus is
due to Employee in accordance with this sub-section, such bonus
shall be paid to Employee on the date that is six (6) months
following the Termination Date.
3. Release . As a condition
precedent to Employee receiving the separation payments described
in sections 2(a), 2(b) and 2(c), Employee must execute a release,
in substantially the form attached hereto as Exhibit A (the
“Release”). The Release shall be signed by Employee no
earlier than the Termination Date (but no later than 30 days after
the Termination Date).
4. Representations by
Employee .
(a) Employee represents and warrants
to the TRX Parties that Employee has read this Separation Agreement
and fully understands the effect hereof, that Employee executes
this Separation Agreement of Employee’s own free will and
accord for the consideration set forth herein, and that Employee is
not relying on any representations whatsoever of TRX, other than
those set forth herein, as an inducement to enter into this
Separation Agreement.
(b) Employee has had the opportunity
to discuss this Separation Agreement with an attorney if Employee
so chooses, and Employee has been encouraged by TRX to do
so.
(c) Employee further represents and
warrants to the TRX Parties that no litigation or other proceeding
has been filed or is pending by the Employee Parties against the
TRX Parties; that no person or entity other than Employee has or
has had any interest in the matters released herein; that Employee
has the sole right, capacity, and exclusive authority to execute
this Separation Agreement; and that Employee has not sold,
assigned, transferred, conveyed or otherwise disposed of any of the
claims, demands, obligations, or causes of action released in the
Release.
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5. Attorney’s fees . In
any subsequent litigation or other proceeding to enforce the terms
of this Separation Agreement, whether initiated by Employee or TRX,
the prevailing party shall be entitled to recover its reasonable
attorneys’ fees and costs, expert witness fees and costs, and
court costs, from the other party. The reimbursement of any such
fees and costs shall be paid no later than March 15 of the
year following the calendar year during which the other party is
finally determined to be the prevailing party by the court or other
tribunal.
6. Restrictive Covenants
.
(a) Return of Property .
Employee hereby represents and warrants that, no later than the
Termination Date, Employee has or will have returned to TRX all
documents or other property (including copies thereof) of any
nature which relate to or contain information concerning TRX or the
TRX Parties, or its or their customers and business associates, as
well as any other equipment or property belonging to
TRX.
(b) Nondisparagement . For a
period of two (2) years following the Termination Date (such
period referred to as the “Restricted Period”),
Employee will not make any statements that are derogatory or
disparaging towards TRX or its management, products, or
services.
(c) Confidentiality .
Employee acknowledges and agrees that, during Employee’s
employment with TRX, Employee has been exposed to substantial
amounts of confidential and valuable information relating to the
business of TRX and TRX’s products, services, intellectual
property, customers, and employees. During the Restricted
Per
