EMPLOYMENTAGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), made this 29th day of October 2009, between Secure America Acquisition Corporation (the “Company”) and Philip Callaghan (“Executive”).

 

WHEREAS, the Company has entered into a Contribution Agreement, dated September 2, 2009 (the “Contribution Agreement”), whereby the Company has agreed to contribute the Contribution Property (as defined in the Contribution Agreement) in exchange for the issuance of a certain percentage of the membership interests of Ultimate Escapes Holdings, LLC (“Ultimate Escapes”), all as more fully set forth in the Contribution Agreement (such transaction is the “Contribution” and the effective date of such Contribution is the “Closing Date”);

 

WHEREAS, Executive is currently a member of one of the members of Ultimate Escapes (or an affiliate of such member of Ultimate Escapes), and subject to the closing of the transactions contemplated by the Contribution Agreement, such transactions are of substantial benefit to Executive; and

 

WHEREAS, prior to the Contribution, Executive has been employed by Ultimate Escapes as its Senior Vice President and Chief Financial Officer, and following the Contribution, Executive and the Company desire that Executive be employed by the Company, on such terms and subject to such conditions as are set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

 

1.           Term of Employment.  The Company hereby agrees to employ Executive, and Executive agrees to work for the Company, upon the terms set forth in this Agreement, for the period commencing as of the Closing Date (the “Commencement Date”) and ending on the one (1) year anniversary of the Commencement Date, unless sooner terminated in accordance with the provisions of Section 4 or extended as hereinafter provided (such period, as it may be extended or terminated, is the “Agreement Term”). Beginning on the first anniversary of the Commencement Date, and on each anniversary of the Commencement Date thereafter, the Agreement Term shall extend for an additional one year period from the then current expiration date of the Agreement Term unless, at least 60 days prior to the first anniversary of the Commencement Date or 60 days prior to the anniversary of each Commencement Date thereafter, either Executive or the Company provides written notice to the other party electing not to extend the Agreement Term.

2.           Title; Capacity.  The Company will employ Executive, and Executive agrees to work for the Company, as its Senior Vice President and Chief Financial Officer (“CFO”) to perform the duties and responsibilities inherent in such position and such other duties and responsibilities as the Company’s Chief Executive Officer, shall from time to time reasonably assign to him.  Upon any termination of employment, Executive shall be deemed to have resigned and, if required by the Chief Executive Officer or the Board of Directors (the “Board”), Executive hereby agrees to immediately execute a resignation letter to the Chief Executive Officer or the Board.

 

3.           Compensation and Benefits.

 

3.1.        Salary. The Company shall pay Executive an annual base salary of $375,000, less applicable payroll withholdings (the “Base Salary”), which shall be payable in accordance with the Company’s customary payroll practices. Thereafter, the Base Salary shall be subject to annual review and increase as determined by the Board on the anniversary of the Commencement Date each year of the Agreement Term.

 

3.2.        Bonus.  During each year of the Agreement Term, Executive shall be eligible to receive a cash bonus (such bonus is referred to as the “Bonus”) and such bonus, if any, shall be determined in the sole discretion of the Board and based on such factors as the Board establishes.  Additionally, Executive may receive a pro-rated Bonus, if one is awarded, for any portion of a year in which Executive was employed by the Company, provided, however, that Executive shall not be entitled to any bonus in the event that Executive is terminated for “Cause” (as such term is defined below).  Any such Bonus shall be payable at such times as bonuses are paid to other executives of the Company, but not later than 60 days after the end of each fiscal year of the Company.

 

3.3.        Equity.  Executive shall be eligible to receive equity incentives, in an amount to be determined by the Board, or a committee thereof, in its sole discretion, which equity incentives shall be granted to Executive and shall vest ratably as determined by the Board.  Any such incentives shall and may be further accelerated or forfeited as set forth in an equity agreement entered into between the parties in connection with this Agreement.

 

3.4.        Fringe Benefits.  Executive shall be entitled to participate in all benefit programs that the Company establishes and makes available to its senior executives at the CFO level or lower.  Executive shall also be entitled to take fully paid vacation in accordance with Company policy, which shall be no more than four (4) weeks per calendar year.

 

3.5.        Reimbursement of Expenses.  The Company shall reimburse Executive for such reasonable and necessary business expenses incurred by Executive while Executive is employed by the Company, which are directly related to the furtherance of the Company’s business.  Executive must submit any request for reimbursement no later than ninety (90) days following the date that such business expense is incurred in accordance with the Company’s reimbursement policy regarding same and business expenses must be substantiated by appropriate receipts and documentation. The Company may request additional documentation or a further explanation to substantiate any business expense submitted for reimbursement, and retains the discretion to approve or deny a request for reimbursement.  If a business expense reimbursement is not exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), any reimbursement in one calendar year shall not affect the amount that may be reimbursed in any other calendar year and a reimbursement (or right thereto) may not be exchanged or liquidated for another benefit or payment.  Any business expense reimbursements subject to Section 409A of the Code shall be made no later than the end of the calendar year following the calendar year in which such business expense is incurred by Executive.

3.6.         Indemnification and Directors and Officers Insurance.  The Company shall indemnify Executive to the same extent as the Company indemnifies its officers and directors under its charter and bylaws.  The Company shall purchase and maintain in full force and effect at all times during Executive’s employment and for a period of eighteen (18) months thereafter, policies of directors and officers insurance covering Executive for all actions Executive takes on the Company’s behalf during Executive’s employment.

 

4.           Termination of Employment Period.  The Agreement Term shall terminate upon the earlier to occur of any of the following:

 

4.1.        Termination of the Agreement Term.  At the expiration of the Agreement Term, but only if appropriate notice is provided pursuant to Section 1.

 

4.2.        Termination for Cause.  At the election of the Company, for Cause.  For the purposes of this Section 4.2, “Cause” for termination shall be deemed to exist upon the occurrence of any of the following:

 

4.2.1.     a determination by the Chief Executive Officer or the Board of Directors that Executive has engaged in dishonesty, gross negligence or misconduct that is injurious to the Company or its affiliates;

 

4.2.2.     Executive’s conviction or entry of nolo contendere (or international equivalent) to any felony or crime involving moral turpitude, fraud or embezzlement of Company property;

 

4.2.3.     Executive’s material breach of this Agreement, which, if curable, has not been cured by Executive within thirty (30) calendar days after Executive shall have received written notice from the Company stating with reasonable specificity the nature of such breach; or

 

4.2.4.     Executive’s material breach of any of the terms of the restrictive covenants set forth in Section 6 below, which, if curable, has not been cured by Executive within thirty (30) calendar days after Executive shall have received written notice from the Company stating with reasonable specificity the nature of such breach.

 

4.3.         Termination by the Company Without Cause.  At the election of the Company, without Cause, at any time, upon 30 days notice to Executive.

4.4.        Death or Disability.  The Agreement shall terminate upon Executive’s death or disability.  If Executive shall be disabled so as to be unable to perform the essential functions of Executive’s position under this Agreement with or without reasonable accommodation, the Chief Executive Officer or the Board may remove Executive from any responsibilities and/or reassign Executive to another position with the Company during the period of such disability, and Executive will continue to receive the same Base Salary and benefits then in effect set forth in this Agreement for a period of twelve (12) months, and such reassignment shall not trigger a Good Reason termination as provided herein.  Notwithstanding any such removal or reassignment, Executive’s employment may be terminated by the Company at any time thereafter.  Nothing in this Section 4.4 shall be construed to waive Executive’s rights, if any, under existing law, including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.  Notwithstanding the foregoing, if and only to the extent that Executive’s disability is a trigger for the payment of deferred compensation, as defined in Section 409A of the Code, “disability” shall have the meaning set forth in Section 409A(a)(2)(C) of the Code.

 

4.5.        Voluntary Termination by Executive.  At the election of Executive, upon not less than 30 days’ prior written notice by Executive to the Company.

 

4.6.        Voluntary Termination by Executive for Good Reason.  At the election of Executive, for Good Reason (as defined herein), at any time upon 30 days’ prior written notice by Executive.  As used in this Agreement, “Good Reason” means if the Company, without Executive’s written consent, fails to cure any one or more of the events or circumstances listed below within ten (10) calendar days after receiving written notice from Executive:

 

4.6.1.     any failure by the Company to pay Executive the compensation and benefits to which Executive is entitled in any material way, including any reduction of more than twenty five percent (25%) in compensation including Base Salary, or payments and benefits to which Executive is entitled under this Agreement including, without limitation, the obligation to purchase and keep in force a policy of directors and officers liability insurance; or

 

4.6.2.     any other material breach by the Company of the material terms of this Agreement.

 

5.           Effect of Termination.

 

5.1.        Termination for Cause, at the Election of Executive.  In the event that Executive’s employment is terminated for Cause pursuant to Section 4.2 or at the election of Executive pursuant to Section 4.5 the Company shall have no further obligations under this Agreement other than to pay to Executive the compensation and benefits, including payment for accrued but untaken vacation days, otherwise payable to Executive under Section 3 through the last day of Executive’s actual employment by the Company (“Accrued Obligations”).

5.2.        Termination by the Company Without Cause, by Executive for Good Reason or for Death or Disability.  In the event that the Company terminates Executive’s employment without Cause pursuant to Section 4.3, Executive terminates Executive’s employment for Good Reason, pursuant to Section 4.6, or by death or disability pursuant to Section 4.4, the Company, in addition to the Accrued Obligations, shall continue to pay to Executive his annual Base Salary then in effect for a period of six (6) months on a regular payroll basis.  In addition, the Company shall continue Executive’s coverage under and its contributions towards Executive’s health care, dental, disability and life insurance benefits on the same basis as immediately prior to the date of termination, except as provided below, for six (6) months from the last day of Executive’s employment; provided, however, continuation coverage under the Company’s health and dental policies is subject to Executive’s valid election for such continuation coverage in accordance with section 4980B of the Code.  If the Company is not able to provide Executive benefit continuation coverage under the plans as set forth above, the Company shall pay Executive an amount equal to the employer portion of the applicable premiums for the relevant period.  Notwithstanding the foregoing, subject to any overriding laws, the Company shall not be required to provide any health care, dental, disability or life insurance benefit otherwise receivable by Executive if Executive is actually covered or becomes covered by an equivalent benefit (at the same cost to Executive, if any) from another source.  Any such benefit made available to Executive shall be reported to the Company.  The benefits provided for in this Section 5.2 are conditioned upon the execution and delivery by Executive of a release of all claims against the Company in conformance with applicable law and in form and substance satisfactory to the Company (the “Release”) no later than 45 days following Executive’s termination.  To the extent required by Section 409A of the Code, the first installment of such Base Salary in the amount of three (3) months’ Base Salary shall be payable on the first business day following the effective date of termination, and the remainder shall be payable in accordance with the Company’s regular payroll procedures thereafter.  If Section 409A of the Code is not applicable at the time of such termination, such Base Salary continuation shall commence immediately after the date of the Release.

 

5.3.        Separation from Service.  Notwithstanding anything set forth in Sections 4 and 5 of this Agreement, a termination of employment shall be deemed not to have occurred until such time as Executive incurs a “separation from service” with the Company in accordance with Section 409a(a)(2)(A)(v) of the Code and the applicable provisions of Treasury Regulation Section 1.409A-3.

 

6.           Non-disclosure and Non-competition.

 

6.1.        Proprietary Information.

 

6.1.1.     Executive agrees that all information and know-how, whether or not in writing, of a private, secret or confidential nature concerning the Company’s business or financial affairs (collectively, “Proprietary Information”) is and shall be the exclusive property of the Company.  By way of illustration, but not limitation, Proprietary Information may include inventions, products, processes, methods, techniques, formulas, designs, drawings, slogans, tests, logos, ideas, practices, projects, developments, plans, research data, financial data, personnel data, computer programs and codes, and customer and supplier lists.  Executive will not disclose any Proprietary Information to others outside the Company except in the performance of Executive’s duties or use the same for any unauthorized purposes without written approval by an officer of the Company, either during or after Executive’s employment, unless and until such Proprietary Information has become public knowledge or generally known within the industry without the fault of Executive, or unless otherwise required by law.