AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT, amended and restated as of February 15, 1997,
between TresCom International, Inc., a Florida corporation ("Employer"), and
Xxxxxx X. X'Xxxxx (the "Executive").
RECITALS
WHEREAS, the Employer and the Executive have entered into an
Employment Agreement, dated as of October 1, 1995, and the parties are desirous
of amending and restating such agreement as set forth below;
ACCORDINGLY, in consideration of the mutual covenants and
agreements contained in this Agreement, the parties agree as follows:
l. EMPLOYMENT AND DUTIES. Employer hereby employs Executive
and Executive hereby accepts employment as President and Chief Executive Officer
of Employer and, if Employer so elects, as an executive officer or director of
any of the direct or indirect subsidiaries of Employer (the "Subsidiaries").
Executive agrees to serve without additional remuneration in such capacities for
the Subsidiaries of Employer, with responsibilities and authority commensurate
with the nature of Executive's responsibility and authority with Employer as the
Board of Directors of Employer (the "Board of Directors") may from time to time
request, subject to appropriate authorization by the Subsidiaries involved and
any limitations under applicable law. Executive shall perform such duties and
have such powers and authority as the Board of Directors shall determine,
commensurate with Executive's position as an executive officer of Employer. The
Executive's failure to discharge an order or perform a function because the
Executive reasonably and in good faith believes such would violate a law or
regulation or be dishonest shall not be deemed a breach by him of his
obligations or duties hereunder.
2. SERVICES AND EXCLUSIVITY OF SERVICES.
2.1. So long as this Agreement shall continue in
effect, Executive shall devote his full business time and energy to the
business, affairs and interests of Employer and its Subsidiaries and matters
related thereto and shall faithfully and diligently endeavor to promote such
business, affairs and interests.
2.2. Executive may serve as a director or in any other
capacity of any business enterprise, including an enterprise whose activities
may involve or relate to the business of the Employer and its Subsidiaries,
provided that such service is expressly approved by the Board of Directors
of the Employer. Executive may make and manage personal business
investments of his choice (provided such investments are in businesses which do
not compete with Employer and its Subsidiaries or such investments satisfy the
standards set forth in the proviso to Section 6.1.1. and, in either case, do not
require any services on the part of Executive in the affairs of the companies in
which such investments are made) and may serve in any capacity with any civic,
educational or charitable organization, or any governmental entity or trade
association, without seeking or obtaining approval by the Board of Directors of
Employer, provided such activities and service do not materially interfere or
conflict with the performance of his duties hereunder.
3. COMPENSATION, EXPENSES AND OTHER BENEFITS.
3.1. BASE SALARY. During the Term (as defined in
Section 4.1), the Executive shall receive a base salary at an annual rate of
$231,000.00 per annum (the "Base Salary"). The Base Salary shall be paid in
substantially equal installments consistent with the Employer's normal payroll
schedule, but in no event less frequently than bi-weekly, subject to applicable
withholding and other taxes. The Executive's Base Salary shall be reviewed at
least annually and may be increased but may not be decreased.
3.2. BONUS. In addition to the Base Salary, the
Executive shall also be eligible to receive an annual bonus (the "Bonus")
equal to 40% of the Base Salary. The amount of the Bonus shall be determined by
the Board of Directors of Employer and shall be based on the financial and
operating performance of Employer. The Board of Directors may, in its sole and
absolute discretion, award additional bonuses to Executive on any other basis as
it deems appropriate from time to time.
3.3. STOCK OPTIONS. Executive shall be entitled to
receive grants of stock options, which options will be subject to the terms
and conditions of Employer's Second Amended and Restated 1994 Stock Option Plan
(the "Stock Option Plan") and any related stock option agreement (the "Stock
Option Agreement"), in amounts determined by the Board of Directors (or a
committee thereof) in its sole and absolute discretion.
3.4. EXPENSES. Employer shall promptly reimburse
Executive for all reasonable expenses incurred by him in connection with the
performance of his services under this Agreement upon presentation of
appropriate documentation in accordance with Employer's and its Subsidiaries'
customary procedures and policies applicable to its and their senior executives.
3.5. LIFE INSURANCE. Employer shall obtain a life
insurance policy on the life of Executive in the face amount equal to 200% of
the Executive's then current Base Salary naming Executive or his designee as
the beneficiary. Employer shall obtain a disability policy covering the
Executive in the event he becomes disabled, in a monthly amount equal to 60% of
Executive's then-current monthly Base Salary.
3.6. OTHER BENEFITS. Executive shall be eligible to
participate in any accident, health, medical, disability, pension, savings and
any other employee benefit plans (other than any stock option or similar plans)
that may from time to time be provided by the Employer to its executive
personnel.
3.7. VACATION. Executive shall be entitled to
reasonable vacations during each year of the Term (as defined in Section 4.1
hereof), the timing and duration thereof to be determined by mutual agreement
between Executive and the Employer.
4. TERM AND TERMINATION.
4.1. TERM. The term of Employee's employment
hereunder shall be for a period of twenty eight (28) months (the "Term")
from the date of this Agreement (the "Effective Date"), unless earlier
terminated as hereinafter set forth.
4.2. TERMINATION.
4.2.1. Employer may, at its election, subject
to the provisions of Section 4.3 hereof, terminate Executive's employment
hereunder as follows:
(i) for "Cause" upon notice of such termination to
Executive;
(ii) for "Non-Performance" upon 30 days' notice to Executive
of such termination;
(iii) upon the death of Executive; or
(iv) upon 10 days' notice to Executive if Executive becomes
"Disabled".
4.2.2. As used in this Agreement, the
following terms shall have the meanings ascribed to them below:
(i) "Cause" shall mean (A) a determination by the Board of
Directors that Executive has ceased materially to perform his
duties hereunder (other than as a result of his incapacity due
to physical or mental illness or injury), which failure
amounts to an intentional and extended neglect of his duties
hereunder, (B) Executive's having been convicted of a felony,
(C) fraud, embezzlement or misappropriation of funds of
Employer by Executive, or (D) a willful and material breach by
Executive of his obligations hereunder, which breach is not
cured within ten (10) days after notice of same is given to
Executive by Employer.
(ii) "Non-Performance" shall mean (A) a determination by the
Board of Directors that the Performance Standards (defined
below) have not been met or
(B) the commencement by Employer or any of its material
Subsidiaries of a voluntary case or proceeding under any
bankruptcy or similar laws or the filing of an involuntary
petition against Employer or any of its material Subsidiaries
under any such laws which is not dismissed or stayed within 90
days of filing. The "Performance Standards" shall be deemed
not to have been met if either (x) the consolidated net
revenues of Employer, as determined in accordance with
generally accepted accounting principles consistently applied
("GAAP") and using Employer's customary accounting practices,
or (y) EBDIAT (defined below), in each case, for any period
consisting of four consecutive fiscal quarters commencing not
earlier than the first anniversary of the date of this
Agreement, is less than 80% of the amount projected as the
consolidated net revenues or EBDIAT, as the case may be, of
Employer for such period, on a cumulative basis, based on the
annual operating plan for Employer approved by the Board of
Directors (the "Annual Operating Plan") or Annual Operating
Plans with respect to the applicable period.
(iii) "EBDIAT" shall mean, for the relevant accounting period,
an amount equal to the sum of (I) consolidated net income (or
loss) of Employer for such period determined in accordance
with GAAP, and using the Company's customary accounting
practices, excluding any extraordinary, unusual or
non-recurring gains (or losses), plus (II) all amounts
deducted in computing such net income (or loss) in respect of
interest, depreciation, amortization and taxes based upon or
measured by income.
(iv) "Disabled" or "Disability" shall mean the physical or
mental incapacity of, or injury to, Executive such that he is
unable to perform the services required of him hereunder and
such inability to perform continues for a period in excess of
six months and is continuing at the time notice is given.
(v) "Termination Without Cause" shall mean any termination of
employment of Executive (A) by the Employer for reasons other
than (a) as set forth in Section 4.2.1(i) through (iv) and (b)
by the Executive for Good Reason, or (B) by the Executive
following the willful and material breach by Employer of its
obligations under Section 1 of this Agreement, which breach is
not cured within 30 days of notice of such breach to the Board
of Directors.
(vi) "Good Reason" shall mean the occurrence, without
Executive's express written consent, of any of the following
circumstances following a Change in Control unless such
circumstances are fully corrected prior to the date of
termination specified in the termination notice given in
respect thereof (A) the failure of Executive to be retained as
an employee in a senior executive position; (B) a reduction by
the Employer in Executive's salary payable pursuant to Section
3.1 hereof; or (C) a relocation of Executive's office to a
location more than fifty (50) miles from the current executive
office of the Employer and (i) a failure to
make Executive whole for all losses and costs reasonably
incurred in connection with the relocation including, but not
limited to, moving expenses, forfeited bonds, fees or escrows
to clubs or other organizations and losses from the sale of
Executive's personal residence and (ii) the failure of
Employee to obtain an agreement in form and substance
reasonably satisfactory to Executive from any successor to
provide employment to Executive in the capacity of a senior
executive, at his then current Base Salary, for a period of at
least two years from the date of the Change in Control.
(vii) "Change in Control" shall be deemed to have occurred if:
(A) any "person", as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (other than the Employer, any trustee or
other fiduciary holding securities under any employee benefit
plan of the Employer or any company owned, directly or
indirectly, by the shareholders of the Employer in
substantially the same proportions as their ownership of the
Employer's common stock, $0.0419 par value per share (the
"Common Stock"), of the Employer), becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Employer representing
30% or more of the combined voting power of all classes of the
Employer's then outstanding voting securities; (B) during any
period of two consecutive calendar years individuals who at
the beginning of such period constitute the Board of
Directors, cease for any reason to constitute at least a
majority thereof, unless the election or nomination for the
election by the Employer's shareholders of each new director
was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the two-year period or whose election or
nomination for election was previously so approved; (C) the
shareholders of the Employer approve a merger or consolidation
of the Employer with any other corporation or legal entity,
other than a merger or consolidation that would result in the
voting securities of the Employer outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting
power of the voting securities of the Employer or such
surviving entity outstanding immediately after such merger or
consolidation; PROVIDED, HOWEVER, that a merger or
consolidation effected to implement a recapitalization of the
Employer (or similar transaction) in which no person acquires
more than 30% of the combined voting power of the Employer's
then outstanding securities shall not constitute a Change in
Control of the Employer; or (D) the shareholders of the
Employer approve a plan of complete liquidation of the
Employer or an agreement for the sale or disposition by the
Employer of all or substantially all of the Employer's assets.
4.3. RIGHTS UPON TERMINATION.
4.3.1. Upon any termination of this Agreement
for Cause, Employer shall pay to Executive, within 10 days following such
termination, any unpaid Base Salary through the date of termination specified
in the termination notice and shall reimburse Executive for reasonable business
expenses incurred prior to the date of termination, subject to the provisions
of Section 3.4. hereof.
4.3.2. Upon any termination of this Agreement
for Non-Performance, Employer shall pay to the Executive any unpaid Base Salary
through the date of termination specified in the termination notice, plus an
amount equal to an additional 12-months' Base Salary (such additional amount,
the "Severance Payment"), and shall reimburse Executive for reasonable business
expenses incurred prior to the date of termination, subject to the provisions of
Section 3.4. hereof. Employer shall pay all such amounts within 10 days
following such termination, provided, that, at Employer's option, the Severance
Payment may be made in equal monthly installments over the 12-month period
following the date of termination specified in the termination notice.
4.3.3. Upon termination of this Agreement
because of the death or Disability of Executive, Employer shall pay to Executive
or Executive's estate, any unpaid Base Salary and Bonus accrued through the date
of termination specified in the termination notice, plus an additional amount
equal to the Severance Payment, and shall reimburse Executive (or his estate)for
reasonable business expenses incurred prior to the date of termination, subject
to the provisions of Section 3.4. hereof. Employer shall pay such amounts within
10 days following such termination, provided, that, at Employer's option, the
Severance Payment may be made in equal monthly installments over the 12-month
period subsequent to the date of termination specified in the termination
notice.
4.3.4. Upon a Termination Without Cause, if, as
of the time of such termination, the Performance Standards shall have been met,
Employer shall pay to Executive any unpaid Base Salary and Bonus accrued through
the date of termination specified in the termination notice, plus an additional
amount (the "Additional Payment") equal to the unpaid Base Salary for the
balance of the Term and shall reimburse Executive for reasonable business
expenses incurred prior to the date of termination, subject to the provisions of
Section 3.4. hereof. Employer shall pay such amounts within 10 days
following such termination, provided, that, at Employer's option, the Additional
Payment may be made in equal monthly installments over the 12-month period
following the date of termination specified in the termination notice. If,
as of the time of a Termination Without Cause, the Performance Standards shall
not have been met, then Employer shall pay to Executive the amounts set forth
in Section 4.3.2 hereof at the times specified therein.
4.3.5. Upon termination of this Agreement by
Executive for Good Reason, Employer shall pay to Executive any unpaid Base
Salary and Bonus accrued
through the date of termination specified in the termination notice, plus an
Additional Payment equal to the unpaid Base Salary for the balance of the Term
and shall reimburse Executive for reasonable business expenses incurred prior to
the date of termination, subject to the provisions of Section 3.4 hereof.
4.3.6. Notwithstanding the foregoing, Executive
may terminate his employment on his own initiative following a relocation of
Executive's office to a location more than fifty (50) miles from the current
executive office of the Employer if the executive has been offered the two year
employment agreement and reimbursement arrangement specified in the definition
of Good Reason (defined in Section 4.2.2 (vi) hereof). In such event, the
Employer shall pay to Executive an amount equal to 12-months' Base Salary, and
shall reimburse Executive for reasonable business expenses incurred prior to the
date of termination, subject to the provisions of Section 3.4 hereof. Employer
shall pay such amounts in a cash lump sum within 10 days following such
termination.
4.3.7. The parties agree that, prior to the
expiration of the Term, they will negotiate in good faith the continuation of
severance provisions based upon the principles set forth in this Section 4, it
being understood that the foregoing shall not in any way modify the rights and
obligations of the parties provided in this Section 4.
4.3.8. Upon any termination provided for in
this Agreement, any outstanding options granted to Executive shall be treated in
the manner set forth in the Stock Option Plan and the applicable Stock Option
Agreement.
4.3.9. Except as provided herein, Employer
shall have no further liability to Executive under this Agreement in respect of
any termination of this Agreement.
5. CONFIDENTIALITY. Executive agrees that he will not make use
of, divulge or otherwise disclose, directly or indirectly, any trade secret or
other confidential information concerning the business, operations, practices,
or financial condition of Employer or any of its Subsidiaries ("Confidential
Information"), which he may have learned as a result of his employment by the
Employer during the Term or as a shareholder, officer or director of Employer or
any of its Subsidiaries, except to the extent such use or disclosure is (a)
necessary to the performance of this Agreement and in furtherance of the best
interests of Employer and its Subsidiaries, (b) required by applicable law, (c)
authorized by Employer or its Subsidiaries, or (d) is of information which is in
the public domain through no unlawful act of the Executive or which the
Executive lawfully acquires subsequent to termination of his employment with the
Employer from any person not subject to a confidentiality obligation to the
Employer or its Subsidiaries. The Executive acknowledges and recognizes that the
Confidential Information is essential to the unique nature of the Employer's
business and for that reason, all such materials and information shall at all
times remain the exclusive property of the Employer. Upon the termination of
this Agreement, all such Confidential Information furnished and supplied to the
Executive during the Term shall be returned by the Executive to the Employer.
The Executive,
in the event of such termination, will not at any time impart to anyone or use
any such Confidential Information. The provisions of this Section 5 shall
survive the expiration, suspension or termination, for any reason, of this
Agreement.
6. RESTRICTIVE COVENANTS.
6.1. NON-COMPETITION.
6.1.1. The Executive agrees that he shall not,
until the first anniversary of the date this Agreement is terminated, without
the prior written consent of the Employer, directly or indirectly (whether as a
sole proprietor, partner, venturer, shareholder, director, officer, employee,
or in any other capacity as principal or agent or through any person,
corporation, partnership, entity or employee acting as nominee or agent)
conduct or engage in or be interested in or associated with any person, firm,
association, syndicate, partnership, company, corporation, or other entity
which conducts or engages in the telecommunications business in any geographic
areas in which Employer or any Subsidiary is then so engaged in business or
proposes to engage in business in accordance with its then-current strategic
plan, nor shall Executive interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise, between Employer or any of its
Subsidiaries, on the one hand, and any customer, supplier, lessor, lessee or
employee of the Employer or any of its Subsidiaries, on the other hand;
provided, however, that this Section 6.1.1. shall not prohibit the Executive
from owning beneficially or of record not more than 1% of the outstanding equity
securities of any entity whose equity securities are registered under the
Securities Act of 1933, as amended, or are listed for trading on any United
States or foreign stock exchange.
6.1.2. It is the desire and intent of the
parties that the provisions of this Section 6 shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
portion of this Section 6 shall be adjudicated to be invalid or unenforceable,
this Section 6 shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this paragraph in the particular jurisdiction in
which such adjudication is made.
7. INJUNCTIVE RELIEF. If there is a breach or threatened
breach of the provisions of Sections 5 or 6 of this Agreement, the Employer
shall be entitled to an injunction restraining the Executive from such breach.
Nothing herein shall be construed as prohibiting the Employer from pursuing any
other remedies for such breach or threatened breach.
8. INSURANCE. The Employer may, at its election and for its
benefit, insure the Employee against accidental loss or death, and the Executive
shall submit to such physical examination and supply such information as may be
reasonably required in connection therewith.
9. MISCELLANEOUS. This Agreement: (a) constitutes the
entire agreement of the parties with respect to its subject matter and
supersedes all previous agreements or
understandings, whether oral or written, including, but not limited to, the
Employment Agreement, dated October 1, 1995; (b) may not be amended or modified
except by a written instrument signed by all the parties; (c) is binding upon
and will inure to the benefit of the parties and their respective successors,
transferees, personal representatives, heirs, beneficiaries and permitted
assigns; (d) may not be assigned or the obligations of any party delegated
except with the prior written consent of all the parties; (e) may be executed in
duplicate originals; and (f) shall be governed by and interpreted in accordance
with the laws of the State of New York, without regard to its conflict of laws
rules.
10. NOTICES. Any notice required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been given
when delivered by hand delivery by independent courier service or when deposited
in the United States mail, by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Employee: Xxxxxx X. X'Xxxxx
00000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
If to the Employer: TresCom International, Inc.
000 Xxxx Xxxxxxx Xxxx., 00xx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as either party hereto may from time to time give
notice of to the other in the aforesaid manner. Any notice delivered in the
manner set forth in this Section 10 shall be deemed as of the date of delivery
in the case of hand delivery and five (5) business days after posting in the
case of mailing.
11. INDEMNIFICATION. Employer shall indemnify Executive, in
his capacity as an executive officer or director of Employer or any of its
Subsidiaries, to the full extent permissible under the laws of the State of
Florida, or of the state of incorporation of the relevant Subsidiary as the case
may be.
12. WAIVER. The failure of any party to exercise any right or
remedy under this Agreement shall not constitute a waiver of such right or
remedy, and the waiver of any violation or breach of this Agreement by a party
shall not constitute a waiver of any prior or subsequent violation or breach. No
waiver under this Agreement shall be valid unless in writing and executed by the
waiving party.
13. SEVERABILITY. If any provision of this Agreement is
determined by a court or other governmental authority to be invalid, illegal or
unenforceable, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement. Further, the provision that is determined to be invalid, illegal or
unenforceable shall be reformed and construed to the extent permitted by law so
that it will be valid, legal and enforceable to the maximum extent possible.
14. HEADINGS. The headings used in this Agreement are
included for the convenience of the parties for reference purposes only and are
not to be used in construing or interpreting this Agreement.
15. JURISDICTION AND VENUE. Any suit, action or proceeding
against any party to this Agreement arising out of or relating to this Agreement
or any transaction contemplated hereby may only be brought in any Federal or
State court located in the Borough of Manhattan, The City of New York, and each
such party thereby submits to the exclusive jurisdiction of such courts for the
purpose of any such suit, action or proceeding. To the extent that service of
process by mail is permitted by applicable law, each such party irrevocably
consents to the service of process in any such suit, action or proceeding in
such courts by the mailing of such process by registered or certified mail,
postage prepaid, at its address for notices provided for above. Each such party
irrevocably agrees not to assert any objection which it may ever have to the
laying of venue of any such suit, action or proceeding in any Federal or State
court located in the Borough of Manhattan, The City of New York, and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Each party to this Agreement agrees not to
bring any action, suit or proceeding against any other party arising out of or
relating to this Agreement or any transaction contemplated hereby except in a
Federal or State court in the Borough of Manhattan, The City of New York.
16. NO THIRD PARTY BENEFICIARIES. This Agreement shall not
be deemed to confer in favor of any third parties any rights whatsoever as a
third-party beneficiary.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
EMPLOYER:
TRESCOM INTERNATIONAL, INC.
By: ________________________
Title:
EXECUTIVE:
____________________________
Xxxxxx X. X'Xxxxx
