SEPARATION OF EMPLOYMENT AND RELEASE AGREEMENT
Exhibit 10.23
This Separation of Employment and Release Agreement (this “Agreement”) is made by and between
Global Telecom & Technology, Inc., a Delaware corporation with its principal place of business in
McLean, Virginia, on behalf of itself and its subsidiaries and divisions (collectively, “Employer”
or “Company”), and Xxxxx Xxxxx (“you” or “Employee”, together with Employer, the “Parties”). The
Effective Date of this Agreement will be eight (8) days after its execution by the Employee, if
Employee does not revoke acceptance within seven (7) days after Employee executes this Agreement.
WHEREAS, the Parties to this Agreement wish to set forth clearly the terms and conditions of
Employee’s separation from employment with Employer; and
WHEREAS, Employee’s separation of employment with Employer shall be effective as of the date
set forth below;
NOW THEREFORE, in consideration of the mutual covenants set forth herein and for other
valuable consideration, the receipt and sufficiency of which are acknowledged, Employee and
Employer, intending to be legally bound, agree as follows:
| 1. | Separation. You acknowledge that your separation from Employer shall be October 31,
2008 (the “Separation Date”). As of the Separation Date, you will no longer be required to fulfill
any of the duties and responsibilities associated with your position nor are you authorized to act
on behalf of the Employer or direct the activities of any of Employer’s employees. By executing
this Agreement, you acknowledge and agree that this Agreement shall supersede the Employment
Agreement that you signed with Employer dated January 22, 2007 (“Employment Agreement”) and, except
for your continuing obligations in Sections 4, 6, 7.7, 7.8 (except the second sentence), and 8, the
remainder of the Employment Agreement shall no longer have any force or effect including, without
limitation, Sections 5 and 7 (except Section 7.7 and the first sentence of Section 7.8). You shall
be ineligible for, and not be entitled to receive, any bonus payment related to Employer’s 2008
bonus program. |
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| 2. | Severance Payment. |
| (a) | In consideration for Employee signing this Agreement, including the release of
claims set forth in Section 3 below, your covenants and obligations set forth in this
Agreement and your continued performance of your obligations set forth in this
Agreement and the Employment Agreement as noted above, upon the Effective Date of this
Agreement, you shall be entitled to the following benefits: (i) the seventy thousand
(70,000) shares of Global Telecom & Technology, Inc.(“GTT”) restricted common stock
that you were granted in February, 2008 shall become fully vested as of February 1,
2009. Although you shall have the right to use some of the shares of vested restricted
stock to offset the taxes you owe as a result of the vesting of the shares, you agree
and acknowledge that you shall be personally and fully responsible |
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and liable for payment of all taxes associated with the vesting of the shares of GTT
common stock; and (ii) as of the Separation Date, you are not entitled to any
additional Company matching benefits under the Company’s 401(k) Plan but any
matching amounts already contributed by the Company as of the Separation Date shall
continue to vest in accordance with the terms of the Company’s 401(k) Plan until
January 22, 2009. You shall also be paid for any earned but unused vacation days
that have accrued as of the Separation Date. The payment for unused vacation days
will be in accordance with the Company’s regularly scheduled payroll processing,
will be directly deposited in your designated bank account, and will be subject to
standard payroll deductions and withholdings. |
| (b) | The Company will hire you as an employee at an annualized salary of $200,000
commencing the day after the Separation Date and continuing in effect for six (6)
months from the Effective Date. You will not accrue vacation or leave time after the
Separation Date. At the end of the first six (6) month period, you shall have an
option to continue work for GTT at an annualized salary of $200,000 for an additional
period that is not to exceed six (6) months (“Extension Period”). You can exercise
this extension unless you are working for another employer at an annualized salary of
$150,000 or more. During the Extension Period, if you accept a position with another
employer at an annualized salary of $150,000 or more, you will provide notice to GTT
and terminate this agreement. The final date of your employment with the company after
the six month period following the Separation Date and any Extension Period shall be
the “Final Separation Date”. Company may not terminate your employment prior to the
Final Separation Date except for “Cause”. For purposes of this agreement, the Company
shall have “Cause” to terminate your employment only if: (i) you commit an act of
fraud, embezzlement, misappropriation of funds, or dishonesty, (ii) you are grossly
negligent or engage in willful misconduct in the performance of your duties hereunder,
and fails to remedy such breach within ten (10) days of receiving written notice
thereof from the Company, provided, however, that no act, or failure to act, by you
shall be considered “grossly negligent” or an act of “willful misconduct” unless
committed without good faith and without a reasonable belief that the act or omission
was in or not opposed to the Company’s best interest; (iii) you are convicted of a
felony or a crime of moral turpitude; or (vi) you have a drug or alcohol dependency. |
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| (c) | You agree, understand, and acknowledge that the vesting of the restricted shares of GTT common stock as well as any other promises made to you hereunder
represent the sole consideration for signing and performing this Agreement and not
salary, wages or benefits to which you were already entitled. Up until the Final
Separation Date you will be eligible to continue participation in the Company’s
medical and dental plans. After the Final Separation Date, Employee or Employee’s
covered dependents may elect to pay for COBRA medical and dental insurance continuation
coverage for Employee and/or Employee’s covered dependents for the time period and |
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under such conditions as are provided by COBRA. You will be responsible for any and
all COBRA coverage insurance payments (if you so elect) after the Final Separation
Date; provided, however, that you will be eligible to purchase COBRA continuation
coverage at the rate applicable to active GTT employees for six (6) months from the
Final Separation Date followed by twelve (12) months of COBRA coverage at the full
rate. You are not entitled to any Company matching benefits under the Company’s
401(k) Plan as of the Separation Date but any matching amounts contributed by the
Company as of the Separation Date shall continue to vest in accordance with the
terms of the Company’s 401(k) Plan until January 22, 2009 |
| (d) | You further represent and warrant that no other inducements, promises,
agreements or arrangements exist between you and Employer regarding your separation
from employment with Employer. |
| 3. | Release by You. |
| (a) | By our mutual signatures below, the Parties have agreed that: (i) Company will have no further
obligations to make payments of money in the form of salary, bonus, or otherwise, benefit
contributions, transfers of stock or other things of value (including, but not limited to,
perquisites) except as provided in this Agreement; and (ii) the Company shall have no liability
with respect to the termination of your employment except as expressly set forth herein. |
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| (b) | In exchange for the benefits set forth herein, you (for yourself, your heirs, assigns or
executors) release and forever discharge Employer, any of its affiliates, successors, assigns,
insurers or attorneys, and its and their directors, officers, contractors, agents and employees
from any and all claims, suits, demands, causes of action, contracts, covenants, obligations,
debts, costs, expenses, attorneys’ fees, liabilities of whatever kind or nature in law or equity,
by statute or otherwise, whether now known or unknown, vested or contingent, suspected or
unsuspected, and whether or not concealed or hidden, which have existed or may have existed, or
which do exist, on or before the Separation Date, of any kind, which relate in any way to your
employment with Employer or the termination of that employment (“Claims”), except (i) those arising
out of the performance of this Agreement, (ii) your rights under the employee benefit plans of
Employer that by their terms are available to terminated employees; (iii) your rights to accrued,
unused vacation; and (iv) any rights or claims that may arise after the Separation Date. |
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| (c) | The released Claims include, without limiting the generality of the foregoing language, any and
all claims that Employer has violated any statute, public policy or common law including, without
limitation, claims for retaliatory discharge; negligent hiring, retention or supervision;
defamation; intentional or negligent infliction of emotional distress and/or mental anguish;
intentional interference with contract; negligence; detrimental reliance; loss of consortium to you
or any member of your family and/or promissory estoppel. The release also includes any and all
claims of employment discrimination under any local, state or federal law or ordinance, including,
without limitation, Title VII or the Civil Rights Act of 1964 and all of its amendments, the Civil
Rights Act of 1991, the Family Medical Leave Act, the Delaware or Virginia Discrimination Laws, the
Virginia |
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Fair Employment and Housing Act (as amended), the Employee Retirement Income Security Act, the
Equal Pay Act, the Americans with Disabilities Act of 1990, and, including any Claims of age
discrimination under the Age Discrimination in Employment Act, as amended, or any Claims alleging
any legal restriction on the Company’s right to terminate its employees, any Claims Employee has
relating to Employee’s rights to or against any of the Company’s benefits plans, or personal injury
Claims, including, without limitation, wrongful discharge, fraud, breach of contract, defamation,
tortious interference with business expectancy or contract, intentional or negligent
misrepresentation, constructive discharge, or infliction of emotional distress. |
| (d) | In signing this release, you acknowledge that you intend that it shall be effective as a bar to
each and every one of the Claims hereinabove mentioned or implied. You expressly consent that this
release shall be given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state
statute that expressly limits the effectiveness of a general release of unknown, unsuspected and
unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned
or implied. You acknowledge and agree that this release is an essential and material term of this
Agreement and, without such release, Employer would not have made available to you the benefits
provided for herein. You further agree that, in the event you bring any Claim in which you seek
damages against Employer, or any of its affiliates, successors, assigns, insurers or attorneys,
and/or its and their directors, officers, contractors, agents and employees, this release shall
serve as a complete defense to such Claims, and Employer will be (i) relieved of its obligations to
make any continued payment under this Agreement or provide any of the benefits hereunder (except as
required by law), and (ii) entitled to recover all payments previously made by Employer under this
Agreement (except as prohibited by law). Excepted from this release are any claims which cannot be
waived by law, including the right to file a charge with or participate in an investigation
conducted by the Equal Employment Opportunity Commission (“EEOC”) and any claims for unemployment
benefits under applicable state law. You are, however, waiving any right to a monetary recovery
should the EEOC or any agency pursue any claim on your behalf. |
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| (e) | By signing this Agreement, you acknowledge that: |
| (i) | you have carefully read and fully understand all of the provisions of this Agreement as well
as the significance and consequences of this Agreement; |
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| (ii) | you knowingly and voluntarily agree to all of the terms set forth in this Agreement; |
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| (iii) | you knowingly and voluntarily agree to be legally bound by this Agreement and acknowledge
that you will sign this Agreement only after full reflection and analysis; |
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| (iv) | you have had an opportunity to consult with, and are hereby advised to consult with, an
attorney prior to signing this Agreement; |
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| (v) | you acknowledge that all compensation, rights, and benefits including, without limitation,
personal time off, sick pay, vacation pay, and leave as provided by the Family Medical Leave
Act, have been paid and/or exercised in full without interference, and that no outstanding
claims for compensation or benefits exist. |
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If you revoke this Agreement in any manner, it will no longer be binding on you or Employer and you
will not be entitled to any of the benefits set forth herein except for COBRA insurance
continuation benefits as described above.
| 4. | Additional Agreements. |
| (a) | By signing this Agreement you agree that, by the Separation Date, you shall
immediately return to the Employer all Employer documents (and all copies thereof) and
other Employer property that Employer asks to be returned, including, but not limited
to, Employer files, notes, drawings, records, business plans and forecasts, financial
information, specifications, computer-recorded information, tangible property including,
but not limited to, computers and computer accessories, computer manuals, credit cards,
cellular phones and any other wireless devices, fax machines, printers, entry cards,
identification badges and keys; and, any materials of any kind on any storage media that
contain or embody any proprietary or confidential information of Employer (and all
reproductions thereof). You agree to promptly coordinate return of Employer property
with Xxxxx XxXxx, General Counsel. |
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| (b) | Employer agrees to reimburse you for properly submitted expense reports relating
to authorized and legitimate business expenses incurred prior to your Final Separation
Date. |
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| (c) | Employer will indemnify and hold you harmless, to the fullest extent allowed by
applicable law, for any and all claims brought by a third party which result from your
employment with the Employer, including payment of your costs and reasonable attorneys’
fees. |
| 5. | Confidentiality of this Agreement. |
| (a) | Both during and after your employment you acknowledge and reaffirm your
continuing obligations under, and intent to be bound by all terms and conditions of,
the Non-Sales Personnel Employment, Invention Assignment, Non-Solicitation, &
Confidentiality Agreement signed by you.. In that agreement, you agreed, among other
things, not to use or disclose any confidential or proprietary information of Employer
and to refrain from certain solicitation and competitive activities. A copy of the
Non-Sales Personnel Employment, Invention Assignment, Non-Solicitation, &
Confidentiality Agreement is attached hereto. Please familiarize yourself with the
agreement that you signed and, if you have any doubts or questions as to your
obligations and/or the scope of the restrictions in that agreement, please immediately
contact Xxxxx XxXxx, General Counsel, to assess your compliance. |
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| (b) | Employee shall respect the confidences of the Company and its customers and shall
not at any time during or after Employee’s employment with the Company, directly or |
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indirectly, divulge or disclose for any purpose or use for Employee’s own benefit any
confidential information that Employee obtained or had access to as a result of
Employee’s employment with the Company. Employee covenants that Employee shall not,
without the written consent of the Company, disturb or interfere with the business
relationships and negotiations of the Company or its affiliates with its existing or
prospective customers, suppliers and/or other third parties. |
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| (c) | Employee shall not use any computer access code or password belonging to the
Company and agrees that Employee will not access any computer or database in possession
or control of the Company. |
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| (d) | The contents of this Agreement, including but not limited to its financial terms,
are strictly confidential. By signing this Agreement, you agree and represent that you
will maintain the confidential nature of this Agreement, except (i) to legal counsel,
tax and financial planners, and immediate family who agree to keep it confidential, and
to the Internal Revenue Service; (ii) to potential or future employers; (iii) as
otherwise required by law, in which case you shall notify Employer in writing in
advance of disclosure; and (iv) as necessary to enforce this Agreement. |
| 6. | Mutual Nondisparagement. You and Employer agree that you shall not, verbally or in
writing, disparage in any manner or context you, Employer, and Employer’s attorneys,
directors, managers, partners, employees, agents and affiliates, in any manner likely to be
harmful to you, them or their business, business reputation or personal reputation; provided
that you and Employer will respond accurately and fully to any question, inquiry or request
for information when required by legal process. |
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| 7. | Assignment. |
| (a) | This Agreement shall be binding upon and inure to the benefit of the Employer
and any successor or assign of Employer. You may not assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of Employer. |
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| (b) | The Parties agree that no interest or right you have or any of your
beneficiaries has to receive payment or to receive benefits under this Agreement shall
be subject in any manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind, except as required by law.
Nor may such interest or right to receive payment or distribution be taken voluntarily
or involuntarily, for the satisfaction of the obligations or debts of, or other claims
against you or your beneficiaries, including for alimony, except to the extent required
by law. |
| 8. | No Admissions. This Agreement shall not be construed as an admission of any breach
of obligation, wrongdoing, or liability either by Employer, or any of its affiliates,
successors, assigns, insurers or attorneys, or any of its or their directors, officers, agents
or employees. |
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| 9. | Amendments. This Agreement cannot be amended without the prior written consent of
you and Employer. |
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| 10. | Complete Agreement. This Agreement contains the entire agreement between you
and Employer regarding the matters set forth herein and supersedes all prior and
contemporaneous offers, agreements, arrangements, or understandings, whether written or
oral, relating to, arising out of, or in connection with, your separation of employment
from Employer |
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| 11. | Governing Law; Severability. THIS AGREEMENT SHALL BE INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF XXXXXXX, WHENEVER POSSIBLE, AND THE EXCLUSIVE VENUE FOR ANY
DISPUTE ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE THE STATE OR FEDERAL COURTS IN
FAIRFAX COUNTY, VIRGINIA. EACH PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN A MANNER
AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION SHALL BE HELD TO BE
PROHIBITED OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE ONLY TO THE
EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING OR AFFECTING THE REMAINDER
OF SUCH PROVISION OR ANY OF THE REMAINING PROVISIONS OF THIS AGREEMENT. |
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| 12. | Construction. The various titles of the sections herein are used solely for
convenience and shall not be used for interpreting or construing any word, clause, section,
paragraph, or subparagraph of this Agreement. The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against any Party. |
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| 13. | Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the
same Agreement. |
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| 14. | Miscellaneous. EMPLOYEE ACKNOWLEDGES THAT THE COMPANY HAS EXPLAINED THAT
EMPLOYEE’S EXECUTION OF THIS AGREEMENT AND RELEASE MUST BE KNOWING AND VOLUNTARY. EMPLOYEE
FURTHER ACKNOWLEDGES EMPLOYEE HAS AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO REVIEW THIS
AGREEMENT AND RELEASE, AND TO CONSULT WITH AN ATTORNEY OF EMPLOYEE’S CHOICE, AND TO
CONSIDER SIGNING THIS AGREEMENT AND RELEASE. |
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EMPLOYEE UNDERSTANDS THAT: (i) EMPLOYEE HAS SEVEN (7) CALENDAR DAYS AFTER EMPLOYEE SIGNS
THIS AGREEMENT AND RELEASE TO REVOKE EMPLOYEE’S DECISION TO EXECUTE A RELEASE OF ANY CLAIMS
EMPLOYEE |
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HAS OR MAY HAVE; (ii) RECOVATION SHALL ONLY BE EFFECTIVE IF WRITTEN NOTICE OF REVOCATION IS
RECEIVED ON OR BEFORE THE SEVENTH (7TH) CALENDAR DAY AFTER THE EXECUTION DATE BY
XX. XXXXX XxXXX, GENERAL COUNSEL, GLOBAL TELECOM & TECHNOLOGY, INC., 0000 XXXXXXXX XXXXX,
XXXXX 000, XxXXXX, XXXXXXXX 00000; AND (iii) IF EMPLOYEE REVOKES THIS AGREEMENT IN THIS
MANNER, THIS AGREEMENT WILL NO LONGER BE BINDING ON EMPLOYEE OR EMPLOYER AND EMPLOYEE
SHALL NOT BE ENTITLED TO THE BENEFITS SET FORTH HEREIN EXCEPT FOR COBRA BENEFITS; AND (iv)
THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED. |
Please indicate your agreement to all of the above terms and conditions by signing and returning an
originally executed Agreement to Xxxxx XxXxx, General Counsel, Global Telecom & Technology, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000, XxXxxx, Xxxxxxxx 00000.
| Sincerely, Global Telecom & Technology, Inc. |
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| By: | /s/ Xxxxx XxXxx | |||
| Print Name: | Xxxxx XxXxx | |||
| Print Title: | General Councel | |||
| AGREED TO AND ACCEPTED BY: |
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| Signature: | /s/ Xxxxx Xxxxx | |||
| Xxxxx Xxxxx | ||||
| Dated: | October 31, 2008 | |||
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