Current Report — Form 8-K Filing Table of Contents
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Check
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Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On
January 24, 2008, YTB International, Inc. (the “Company”)
entered
into employment agreements, effective as of January 1, 2008, with each of (i)
J.
Scott Tomer, Chief Executive Officer of the Company, (ii) J. Lloyd Tomer,
Chairman of the Board of Directors of the Company and (iii) J. Kim Sorensen,
President of the Company (collectively, the “Executive
Employment Agreements”
and
collectively, the “Executive
Officers”).
The
Executive Employment Agreements supersede the employment agreements of Messrs.
J. Scott Tomer and J. Kim Sorensen that were effective January 1, 2005 and
had
been scheduled to terminate on December 31, 2009.
On
January 30, 2008, the Company also entered into an employment agreement
(the
“Clagg
Employment Agreement”),
effective as of January 1, 2008, with John D. Clagg, the Company’s Chief
Financial Officer and Treasurer. The Clagg Employment Agreement supersedes
Mr.
Clagg’s previous employment agreement with the Company that was effective as of
December 1, 2005 and had been scheduled to terminate on December 31,2009.
Executive
Employment Agreements: J. Scott Tomer, J. Lloyd Tomer, and J. Kim
Sorensen
Under
their respective Executive Employment Agreements, the Executive Officers will
serve in their positions for five-year terms, earning starting annual base
salaries (in fiscal 2008) of $325,000, which shall increase in increments of
$25,000 for each successive year under the agreements. Each Executive Employment
Agreement automatically renews for additional one year terms at the then-current
base salary upon the expiration of the initial term or any successor term if
either party does not provide notice of non-renewal at least 90 days prior
to
such expiration.
Each
of
the Executive Officers
will be
eligible for a cash bonus equal to a percentage of the Company’s net pre-tax
income for each year in which such income surpasses certain thresholds, in
the
following percentages: (i) 2.0%, if the net pre-tax income of the Company
is at least $500,000, but less than $1,500,000; (ii) 2.25%, if the net
pre-tax income of the Company is at least $1,500,000 but less than $ 3,000,000;
and (iii) 2.5%, if the net pre-tax income of the Company is at least
$3,000,000.
Beyond
providing for compensation payable to the Executive Officers in their roles
as
such, the Executive Employment Agreements acknowledge the Executive Officers’
existing ownership of overrides on RTA sales and monthly fees as follows: (i)
each of J. Scott Tomer and J. Kim Sorensen owns an override on the RTA sales
and
monthly fees generated by Representative position #2 of the Company’s
YourTravelBiz.com subsidiary’s sales organization equal to 50% of the monthly
commissions and overrides earned by said position #2, paid on a
monthly
basis;
and
(ii) J. Lloyd Tomer owns an override on the RTA sales and monthly fees generated
by Representative position #1 of the Company’s YourTravelBiz.com subsidiary’s
sales organization equal to 100% of the monthly commissions and overrides earned
by said position #1, paid on a monthly
basis.
In
consideration of employment by the Company pursuant to the terms of the
Executive Employment
Agreements, the Executive Officers are
subject
to non-competition and non-solicitation restrictions for the entire duration
of
their respective Executive Employment Agreements and for a period of two years
thereafter. In the event of the termination, by the Company, of the employment
of any of the Executive Officers without cause, such Executive Officer will
be
paid his base
salary for the remaining term of his Executive Employment Agreement, in
accordance with the Company’s customary payroll practices, as if such employment
had not been terminated.
Clagg
Employment Agreement
Under
the
Clagg Employment Agreement, Mr. Clagg will remain the Company’s Chief Financial
Officer and Treasurer for a five year term at a
starting
annual base salary (in fiscal 2008) of $300,000, which shall increase in
increments of $25,000 for each successive year under the agreement. The
agreement automatically renews for additional one year terms at the then-current
base salary upon the expiration of the initial term or any successor term if
either party does not provide notice of non-renewal at least 90 days prior
to
such expiration.
Beyond
base salary, under the Clagg Employment Agreement, Mr. Clagg
was
also awarded an incentive stock option to purchase 300,000 shares of the
Company’s Class A Common Stock, which shall vest in five equal installments of
60,000 shares-- on the effective date of the Clagg Employment Agreement and
the
first four anniversaries thereof. Mr. Clagg will furthermore be eligible for
a
bonus equal to two percent (2%) of the Company’s net pre-tax income for each
year under the Clagg Employment Agreement in which the Company’s net pre-tax
income equals or exceeds $4,000,000, subject to the determination of the
Compensation Committee of the Company’s Board of Directors. Such bonus shall be
payable in the form of a restricted stock award.
In
consideration of his employment by the Company pursuant to the terms of the
Clagg
Employment Agreement, Mr.
Clagg
is subject to non-competition and non-solicitation restrictions for the entire
duration of the agreement and for a period of two years thereafter. In the
event
of termination, by the Company, of Mr. Clagg’s employment without cause, Mr.
Clagg is to be paid his base
salary for the remaining term of the Clagg Employment Agreement, in accordance
with the Company’s customary payroll practices, as if such employment had not
been terminated.
Copies
of
the form of Executive Employment Agreements and the Clagg Employment Agreement
are annexed to this Current Report on Form 8-K as Exhibits 10.1 through 10.4
hereof.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
No.
Description
10.1
Form
of Employment Agreement, dated as of January 1, 2008, by and between
YTB
International, Inc. and J. Scott Tomer.
10.2
Form
of Employment Agreement, dated as of January 1, 2008, by and between
YTB
International, Inc. and J. Lloyd Tomer.
10.3
Form
of Employment Agreement, dated as of January 1, 2008, by and between
YTB
International, Inc. and J. Kim Sorensen.
10.4
Form
of Employment Agreement, dated as of January 1, 2008, by and between
YTB
International, Inc. and John D.
Clagg.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
