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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, is made and entered into as of the third day of
January, 1995, by and between SFMT, Inc., a Delaware corporation (the
"Corporation"), and Xxxxxx X. Xxxxxxxxxx (the "Employer").
W I T N E S S E T H:
WHEREAS, the Employee has substantial experience in the
telecommunications industry in soles and marketing; and
WHEREAS, the Corporation desires to employ the Employee, and the
Employee desires to be employed by the Corporation, in accordance with the terms
and provisions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Employment
(a) The Corporation hereby employs the Employee, and the Employee
hereby accepts such employment, on the terms, and subject to
the conditions herein contained.
(b) The Employee shall be secondment agreement be assigned to work
at SFMT-Hermes ("SFMT-Hermes"), a subsidiary of the
Corporation, or Hermes Europe Railtel B.V. ("Hermes Europe"),
a subsidiary of SFMT-Hermes, as the Vice President and
Director of Sales and Marketing of Hermes Europe. In his
capacity as Vice President and Director of Sales and Marketing
of Hermes Europe, the Employee shall report to and shall
perform such duties and exercise such power and authority as
may from time to time be delegated to him by Managing Director
of Hermes Europe.
(c) The Employee shall devote all of his business time and
attention and his best efforts to the performance of his
duties pursuant to this Employment Agreement.
(d) Initially, the Employee shall be required to reside in
Brussels and work from the Corporation's or Hermes' offices in
Brussels. The Corporation reserves the right to require that
the Employee will move to and reside in and operate from the
offices of the Corporation's or Hermes Europe in another city
within the region in which Hermes Europe operates.
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2. Term. The initial term of the employment of the Employee under this
Employment Agreement shall be two (2) years, commencing on January 3,
1995, and continuing, unless sooner terminated pursuant to Section 9 to
and including January 2, 1997. Thereafter this Agreement shall be
automatically renewed annually for successive one year periods, unless
either party hereto shall deliver written notice in accordance with
Section 9 to the other party at least three (3) months prior to the
date of termination of the initial term or any extension or renewal
thereof (the "Term") of its desire to terminate such employment (a
"Notice of Termination").
3. Compensation.
(a) During the initial Term, the Employee shall be paid a salary
at the rate of One Hundred Sixty Thousand Dollars ($160,000)
per annum, payable in accordance with the Corporation's
customary payroll practices for employees.
(b) Thereafter, at the end of each year Chief Executive Officer of
the Corporation shall review the salary of the Employee, and
shall make such adjustments to such salary as the Chief
Executive Officer shall, in its sole and absolute discretion,
deem appropriate.
(c) For the purposes of this Agreement, "Salary" shall mean any
payment by the corporation to the Employee pursuant to this
Section 3.
4. Bonus.
(a) After the Employee has been employed by the Corporation for a
period of eighteen (18) months, and as additional compensation
to the Employee hereunder, the Employee will be assessed for
eligibility to receive a discretionary bonus (the "Bonus) in
respect of the initial employment period. Subject to the
provisions of Section 4(b), the initial target for such Bonus,
based on the achievement by Hermes Europe of the objectives
shall be thirty percent (30%) of the Salary of the Employee
earned during the initial employment period. The first bonus
shall be in respect of two years (the "Initial Bonus"),
payable in accordance with Section 4(c). The potential Initial
Bonus shall be subject to the achievement of the performance
objectives set forth in the approved Hermes Europe Business
Plan.
(b) The formula or other method for determining the Bonus for the
Employee in each subsequent fiscal year shall be determined by
the Corporation and shall be based upon the performance of
Hermes Europe in such fiscal year
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as compared with the Hermes Europe approved business plan for
such fiscal years. The amount of the Bonus paid to the
Employee in respect of any fiscal year of the Corporation
shall be subject to the sole and absolute discretion of Chief
Executive Officer of the Corporation. The objectives for each
fiscal year and the amount of bonus for successful completion
of objectives (as a percentage of base salary or other formula
declared for the period) shall be established during the
period between twelve (12) and fifteen (15) months period to
the fiscal year for which such objectives apply (e.g., October
1 - December 31, 1994 for fiscal year 1996).
(c) All Bonuses in respect of any fiscal year of the Hermes Europe
shall be paid within thirty (30) days after the issuance of
the audited financial statements of Hermes Europe for such
fiscal year.
5. Equity Participation.
(a) SFMT-Hermes has adopted a Stock Option Plan (the "Option
Plan") for its senior executives. Subject to the provisions of
the Plan, SFMT-Hermes shall grant to the Employee options to
purchase shares of Capital Stock of SFMT-Hermes ("Capital
Stock"). The number of shares of Capital Stock which shall be
subject to the option shall be an amount equal to one and
one-half percent (1.5%) of the outstanding shares of
SFMT-Hermes to be determined at January 2, 1996. The options
granted to the Employee shall be granted and vest as follows:
(i) options to purchase 33.33% (one-third) of the shares
of Capital Stock shall be granted on January 3, 1996
and vest as at the close of business on January 2,
1997;
(ii) options to purchase 33.33% (one-third) of the shares
of Capital Stock shall be granted on January 3, 1997
and vest as at the close of business of January 2,
1998; and
(iii) options to purchase 33.33% (one-third) of the shares
of Capital Stock shall be granted on January 3, 1998
and vest as at the close of business on January 2,
1999.
6. Benefits.
(a) During the Term, the Employee shall be entitled to receive
such benefits and to participate in such employee group
benefit plans as are generally provided by the Corporation, or
made available by the Corporation, to its executive officers,
including without limitation, but subject to the
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conditions imposed by the carriers, any medical, health,
disability and life insurance policies.
(b) During the Term, the Corporation or Hermes Europe shall
provide to the Employee, at the Corporation's expense, use of
a late model automobile appropriate in the geographic location
of Employee's residence, and acceptable to the Corporation.
(c) During the Term, the Corporation or Hermes Europe shall
provide business class transportation to and from the United
States for one trip per annum for Employee and Employee's
immediate family living with Employee in Brussels.
(d) During the initial first two (2) years of the Term, the
Corporation or Hermes Europe shall provide to the Employee a
furnished residence in Brussels. The Corporation or Hermes
Europe shall provide for the relocation of Employee's
household goods to Brussels from their location in either
Paris or New Jersey; provided, Employee notifies the
Corporation in writing prior to January 2, 1996 of Employee's
election to have such household goods moved; provided,
further, that neither the Corporation nor Hermes Europe shall
provide for the relocation of Employee's household goods if
either the Corporation or Employee provides a Notice of
Termination in accordance with Section 2 of this Agreement on
or before July 2, 1996, or the employment of the Employee is
otherwise terminated. In the event that Employee elects to
have his household goods moved, the Corporation or Hermes
Europe shall provide an unfurnished apartment in the city in
which Employee is required to reside. Any relocation costs and
expenses shall be in accordance with the Corporation's
policies for relocation expenses; provided, however, that such
costs and expenses shall not exceed Employee's Salary for one
month.
(e) The Corporation or Hermes Europe shall pay to the Employee
during the Term an amount per annum as shall compensate the
Employee for tax equalization in connection with the
requirement that the Employee reside outside the United States
for so long as the Employee is required to live outside the
United States. Such tax equalization shall apply to Salary and
Bonus and any other payments made to Employee deemed taxable
in the foreign jurisdiction where Employee is required to
reside. SFMT will also be responsible for the preparation and
filing of your domestic and international income taxes.
(f) The Employee shall be paid an amount equal to Seven percent
(7%) of the Employee's Salary as a cost of living adjustment
in connection with
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requirement that the Employee reside in Brussels for so long
as the Employee is required to live in Brussels.
7. Expense Reimbursement.
(a) During the Term, the Corporation shall reimburse the Employee
for all reasonable expenditures actually and necessarily paid
or incurred by the Employee in the course of and pursuant to
the business of the Corporation. Such reimbursement shall be
subject to the submission to the Corporation by the Employee
of appropriate documentation and/or vouchers, and shall be
made in accordance with the customary procedures of the
Corporation for expense reimbursement, as may from time to
time be established.
(b) Should the Corporation provide Employee with a credit card,
Employee acknowledges complete personal responsibility for all
charges made on such credit card. Any charges received by the
Corporation for expenses not documented on a approved expense
report may be deducted by the Corporation from the Executives
payroll check. Upon termination of this Agreement, non
approved charges shall be deducted from the last payroll check
issued to the Employee.
8. Vacation. In each fiscal year of the Corporation during the Term, the
Employee shall be entitled to Four (4) weeks vacation time, which shall
not be cumulative from year to year without the prior written consent
of the Corporation or unless the Employee shall be unable to take such
vacation due to Employee's duties under this Agreement; provided,
however, that to the extent the Employee cannot take vacation time
during the Term due to his responsibilities under this Agreement, upon
termination, Employee shall be entitled to be compensated for accrued
but unused vacation time.
9. Termination.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the Corporation shall at all time have the right to
terminate this Agreement and the employment of the Employee
hereunder for "Cause" by written notice to the Employee in
accordance with Section 15. For the purpose of this Agreement,
the term "Cause" shall mean any action of the Employee or any
failure to act by the Employee which constitutes:
(i) fraud, embezzlement or any felony in connection with
the Employee's duties as an executive officer of the
Corporation or any subsidiary or affiliate of the
Corporation, or willful misconduct or the commission
of any other act which causes or may reasonably be
expected to cause substantial economic or
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reputational injury to the Corporation or any such
subsidiary or affiliate of the Corporation, including
any violation of the Foreign Corrupt Practices Act,
as described in Section 13 of this Agreement;
(ii) continuing conflict of interest or continuing failure
to follow reasonable directions or instructions of
the Board of Directors or Chief Executive Officer of
the Corporation. A conflict of interest or a failure
to follow directions of the Board of Directors or the
Chief Employee Officer of the Corporation shall be
deemed to be continuing if the Employee shall have
received written notice thereof and shall have not
terminated the conflict of interest or failure to
follow directions within Thirty (30) days after
receipt of such notice; or
(iii) an extended period of absence by the Employee from
the performance of the obligations of the Employee
provided hereunder; which absence shall be for a
reason other than a disability, and which has not
been approved in writing advance by the Board of
Directors or the Chief Employee Officer of the
Corporation.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Corporation, by written notice to the Employee,
shall at all times have the right to terminate this Agreement
and the employment of the Employee hereunder if the Employee
shall experience a "Total Disability." For the purpose of this
Agreement, the term "Total Disability" shall mean any mental
or physical illness, condition, disability or incapacity as
shall:
(i) prevent the Employee form reasonably discharging his
services and employment duties hereunder;
(ii) be attested to in writing by a physician acceptable
to the Corporation; and
(iii) continue during any period of Three (3) consecutive
months or for periods aggregating three months in any
twelve-month period.
A Total Disability shall be deemed to have occurred on the last day of
such applicable three-month period.
(c) This Agreement shall terminate automatically upon the date of
the death of the Employee.
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10. Payments upon Termination.
(a) If the Corporation shall terminate the employment of the
Employee under this Agreement pursuant to Section 9(a) hereof,
or if the employment of the Employee hereunder shall be
terminated by the Employee other than in accordance with
Section 2 hereof, then, in any such event, the Corporation
shall have no obligation to pay to the Employee his Salary or
any other compensation or benefits provided under this
Agreement for any period after the date of such termination
and the reimbursement of all expenses incurred by the Employee
prior to the date of such termination in accordance with
Section 7 hereof. Upon a termination pursuant to Section 9(a)
or by the Employee, all options and restricted shares granted
to Employee pursuant to Section 5 shall immediately be
canceled and no further options shall vest.
(b) If the employment of the Employee hereunder shall terminate
pursuant to Sections 9(b) or (c) hereof, if the employment of
the Employee shall be terminated by the Corporation in
accordance with Section 2 hereof, or if the Employee shall be
terminated by the Corporation other than in accordance with
the provisions of this agreement, the Corporation shall pay to
the Employee or his Estate, as the case may be, the Salary and
Bonus for the fiscal year in which such termination occurs,
prorated for the number of weeks during which the Employee was
employed by the Corporation during such fiscal year.
(c) In the event that the Corporation terminates the employment of
the Employee by delivering notice in accordance with Section
2, or for any reason other than those set forth in Section 9
above, the Employee shall receive as severance an amount equal
to the greater of (i) three (3) months salary, and (ii) the
amount of salary that would have been payable to the Employee
from the date of Notice of Termination until the end of the
Term, had the Corporation not delivered such Notice of
Termination. Such severance pay shall be paid in equal monthly
installments, commencing, the month following such
termination, and shall be payable in accordance with the
Corporation's customary practices for employees.
(d) In the event that the employment of the Employee is terminated
due to a Total Disability or the death of the Employee in
accordance with Section 9(b) or 9(c) hereof, then the Employee
or his designated beneficiary, as the case may be, shall be
entitled to receive such amounts as are provided for in any
disability policy of life insurance policy provided by the
Corporation for the benefit of the Employee.
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11. Covenants of the Employee. In order to induce the Corporation to enter
into this Agreement and employ and Employee hereunder, the Employee
hereby covenants and agrees as follows:
(a) During the Term and for a period of twelve (12) months
thereafter, the Employee shall not, without the prior written
consent of the Corporation:
(i) directly or indirectly acquire or own in any manner
any interest in any person, firm, partnership,
corporation, association or other entity which
competes with the Corporation or any of its
affiliates; or
(ii) be employed by, or serve as an employee, agent,
officer, director of, any person, firm, partnership,
corporation association which competes with the
Corporation or any of its affiliates or subsidiaries.
(b) The Employee shall not at any time, other than in the ordinary
course of business of the Corporation, when and if required,
disclose, directly or indirectly, to any person, firm,
corporation, partnership, association or other entity, any
confidential information relating to the Corporation or any of
its affiliates or subsidiaries, or any information concerning
the financial condition, suppliers customers, lessors,
lessees, sources of leads for and methods of obtaining new
business or the methods generally of doing and operating the
respective businesses of the Corporation, its affiliates and
subsidiaries, except to the extent that such information is a
matter of public knowledge or is required to be disclosed by
law or judicial or administrative process.
(c) During the Term and for a period of twelve (12) months
thereafter, the Employment shall not, without the prior
written consent of the Corporation, directly or indirectly
through any other individual or entity:
(i) solicit, entice, persuade or induce any individual
who currently is, or at any time during the Term
shall be, an employee of the Corporation, or any of
its affiliates, to terminate or refrain from renewing
or extending such person's employment with the
Corporation or such subsidiary or affiliate, or to
become employed by or enter into contractual
relations with any other individual or entity, and
the Employee shall not approach any such employee for
any such purpose or authorize or knowingly cooperate
with the taking of any such actions by any other
individual or entity; or
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(ii) except in accordance with the Employee's duties
hereunder on behalf of the Corporation, solicit,
entice, persuade, or induce any individual or entity
which currently is, or at any time during the Term
shall be, a customer, supplier, lessor or lessee of
the corporation, or any of its subsidiaries of
affiliates, to terminate or refrain from renewing or
extending its contractual or other relationship with
the Corporation or such subsidiary or affiliate, and
the Employee shall not approach any such customer,
supplier, lessor or lessee for such purpose or
authorize or knowingly cooperate with the taking of
any such actions by any other individual or entity.
12. Specific Performance. The Employee acknowledges that a breach or
violation by the Employee of the covenants or agreements contained in
Section 11 of this Agreement would cause irreparable harm and damage
tot he Corporation if such provisions are not specifically enforced,
the monetary amount of which would be impossible to ascertain.
Therefore, the performance and to obtain an injunction from any court
of competent jurisdiction enjoining and restraining any breach or
violation of any or all of the covenants and agreements contained in
Section 11 of this Agreement by the Employee and/or his employees,
associates, partners or agents, or entities controlled by one or more
of them, either directly or indirectly. Such remedies shall be
cumulative and not exclusive and shall be in addition to whatever other
rights or remedies the Corporation shall have for damages for a breach
by the Employee of the covenants or agreements contained in Section 11
or elsewhere in this Agreement.
13. Foreign Corrupt Practices Act. The Employee agrees to comply in all
respects with the U.S. Foreign Corrupt Practices Act of 1977 (the
"FCPA"), as amended, which provides generally that: under no
circumstances will foreign officials, representatives, political
parties or holders of public offices be offered, promised or paid any
money, remuneration, things of value, or provided any other benefit,
direct or indirect, in connection with obtaining or maintaining
contracts or orders hereunder. The Executive's failure to comply in all
respects with the provisions of the FCPA shall constitute a material
breach by him of his obligations hereunder and shall entitle SFMT to
terminate this Agreement immediately. A copy of the Corporation's FCPA
policy is annexed hereto as Exhibit A.
14. No Delegation. The Employee shall not delegate his employment
obligations under this Agreement to any other person.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and sent by facsimile, with appropriate
confirmation of receipt, certified mail, return receipt requested, or
overnight courier to the following addresses:
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If to the Corporation: SFMT, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: 000-000-0000
If to the Employee 0 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving notice thereof to the other party hereto in the manner herein provided.
Notices shall be deemed given at the time of receipt.
16. Deductions and Withholding. The Employee acknowledges and agrees that
the Company shall be entitled to withhold from the Employee's
compensation hereunder, including Salary and Bonus and other payments
made pursuant to the Agreement, all applicable taxes that are due to
the appropriate jurisdictions, and pay this withholding to the
appropriate tax authorities, consistent with the tax equalization
treatment described in Section 6(e) herein. Tax equalization, applied
in the context of monthly withholding, shall be reconciled at year end.
17. Binding Effect. This Agreement shall e for the benefit of the binding
upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where
applicable, assigns.
18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, understandings and arrangements,
both oral and written, between the parties hereto with respect to such
subject matter. This Agreement may not be modified, amended, altered or
rescinded in any manner, except by written instrument signed by both of
the parties hereto; provided, however, that the waiver by any party of
compliance by any other party with respect to any provision hereof or
of any breach by such other party need be signed only by the party
waiving such provision or breach; provided, further, that the waiver by
either party hereto of a breach or compliance with any provision of
this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or compliance.
19. Severability. In case any one or more of the provisions of this
Agreement shall be held by any court of competent jurisdiction so be
illegal, invalid or unenforceable in any respect such provision shall
be of no force and effect, but the illegality, invalidity or
unenforceability of such provision shall have no effect upon
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and shall not impair the enforceability of any other provision of this
Agreement, but this Agreement shall be construed as if such illegal,
invalid or unenforceable provision had never been contained herein.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within New York.
21. Arbitration. Any and all disputes, controversies and claims arising out
of or relating to this Agreement, shall be settled and determined by
arbitration conducted before a panel of three arbitrators in New York
in accordance with the rule of the American Arbitration Association
then in effect. The arbitrators' award shall be final and binding upon
the Corporation and the Employee, and judgment confirming such
arbitration may be entered thereon in any court having jurisdiction
over such proceedings.
22. Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any manner the
meaning or interpretation of this Agreement.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
SFMT, INC.
by: /s/ Xxxx Xxxxxxxxx
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/s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
