Exhibit 10.29
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of February 8, 2000 (the "EFFECTIVE DATE"), is
made by and between iBasis, Inc., a Delaware corporation with its principal
place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"EMPLOYER"), and Xxxxxxx Xxxxxxxxx (the "EMPLOYEE").
Section 1. FREEDOM TO CONTRACT.
The Employee represents that he is free to enter into this Agreement,
and that he has not made and will not make any agreements in conflict with this
Agreement. The Employee will not, and the Employer will not require the Employee
to, disclose to the Employer, or use for the Employer's benefit, any trade
secrets or confidential information now or hereafter in the Employee's
possession which is the property of any other party.
Section 2. EMPLOYMENT.
The Employer hereby continues to employ the Employee, and the Employee
hereby accepts his continued employment by the Employer, upon the terms and
conditions set forth herein.
Section 3. EFFECTIVE DATE AND TERM.
This Agreement shall take effect as of the Effective Date, and shall
continue in full force and effect until terminated in accordance with Section 6
herein.
Section 4. TITLE AND DUTIES; EXTENT OF SERVICES.
The Employee shall promote the business and affairs of the Employer as
Senior Vice President of Worldwide Sales of the Employer, with responsibility
for performing such duties consistent with such position as the Chief Executive
Officer of the Employer (the "CEO") or the Board of Directors of the Employer
(the "BOARD") may from time to time designate. Except as otherwise provided in
this Agreement and except for vacations and absences due to temporary illness,
the Employee shall devote his full time and efforts to the business and affairs
of the Employer, provided that, with the Employer's prior written consent the
Employee may engage in such other business activities outside the scope of his
employment hereunder as in the reasonable judgment of the Employer will not
materially adversely affect the Employee's ability to perform his obligations
under this Agreement.
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Section 5. COMPENSATION AND FRINGE BENEFITS.
Section 5.1. BASE SALARY. In consideration of the services rendered by
the Employee under this Agreement, the Employer shall pay the Employee an
initial base salary (the "Base Salary") at an annual rate of One Hundred
Eighty-five Thousand Dollars ($185,000), payable in arrears bi-weekly (or on
such other payment schedule as the Employer shall have reasonably implemented
with respect to the payment of its other salaried employees), such Base Salary
being subject to increase at the discretion of the CEO or the Board.
Section 5.2. PERFORMANCE BONUS. On an annual basis, the CEO or the
Board shall establish, objective written performance goals for the Employee.
Upon the attainment of such performance goals, in addition to his Base Salary,
the Employee shall be entitled to a cash bonus in an amount determined in the
discretion of the CEO or the Board. Any such performance bonus shall be due and
payable within ninety (90) days after the end of the calendar year to which it
relates.
Section 5.3. FRINGE BENEFITS. The Employee shall be entitled to such
life insurance, health insurance and other employee fringe benefits as may be
offered or generally made available by the Employer to its executive officers.
Section 5.4. RELOCATION BENEFITS.
(a) The Employee shall be entitled to $70,000 for relocation
expenses in connection with the Employee's relocation of his residence from New
York to the Boston, Massachusetts metro area (the "BOSTON AREA"). Prior to
relocation of the Employee's family and household goods to Boston, the
Employer's standard policy regarding transportation, lodging and per diem
amounts shall apply to Employee's expense reimbursement.
(b) In connection with the Employee's relocation to the Boston
Area, the Employer will guaranty a bridge loan to the Employee in the aggregate
principal of up to $500,000 for a period up to six months, provided that the
Employee has purchased a primary residence in the Boston Area prior to the sale
of the Employee's existing primary residence in New York. In connection with any
such bridge loan pursuant to this Section 5.4, the Employer will pay the
Employee's interest payments on such loan during the six month is guaranteed by
the Employer.
Section 6. TERMINATION; CHANGE OF CONTROL.
Section 6.1. TERMINATION OF EMPLOYMENT. The Employee's employment
hereunder shall terminate upon the Employee's death or Permanent Disability. For
purposes of this Agreement, "Permanent Disability" shall mean the
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Employee's inability to perform his duties hereunder for a continuous period of
three (3) months or a total of more than six (6) months in any twelve (12) month
period by reason of his physical or mental illness or incapacity. In the event
of any dispute concerning the existence of a Permanent Disability, such question
shall be determined by a licensed physician selected by the Employer and
reasonably acceptable to the Employee, whose determination shall be final and
binding upon the parties. The Employee shall submit to such examinations and
furnish such information as such physician may reasonably request. The
Employee's employment hereunder may also be terminated:
(a) By the Employee at any time upon at least thirty (30) days
prior written notice to the Employer; or
(b) By the Employer at any time upon at least thirty (30) days
prior written notice to the Employee; or
(c) By the Employee at any time for good reason, including but
not limited to:
(i) failure of the Employer to continue to employ the
Employee as Senior Vice President of Worldwide Sales of the
Employer; or
(ii) material diminution of the Employee's
responsibilities, duties or authorities as Senior Vice
President of Worldwide Sales of the Employer, or assignment to
the Employee of any responsibilities or duties inconsistent
with such positions; or
(iii) failure of the Employer to pay and provide to
the Employee the compensation provided for herein; or
(iv) requiring the Employee to be permanently based
anywhere other than the principal executive offices of the
Employer (excluding business-related travel to an extent
reasonably consistent with past practice); or
(d) By the Employer at any time for cause, including but not
limited to:
(i) the Employee's gross negligence or willful
misconduct with respect to the business and affairs of the
Employer; or
(ii) the Employee's material breach of this
Agreement; or
(iii) the commission by the Employee of an act
involving moral turpitude or fraud; or
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(iv) the Employee's conviction of any felony.
The provisions of Sections 6.2, 6.3, 7, 8, 9 and 10 shall survive any
termination of the Employee's employment hereunder and shall continue in effect
until such time as all obligations of the parties described therein have been
satisfied.
Section 6.2. COMPENSATION FOLLOWING TERMINATION; SEVERANCE PAY;
ACCELERATION OF STOCK OPTIONS.
(a) If the Employee terminates his employment pursuant to
Section 6.1(a) hereof, or if such employment is terminated by the death
or Permanent Disability of the Employee, the Employee shall not be
entitled to compensation, severance pay or fringe benefits beyond the
date upon which he ceases to be employed hereunder (the "EMPLOYMENT
TERMINATION DATE") except as may be otherwise provided in any then
existing insurance or health benefit programs of the Employer.
(b) If, within the six (6) month period following the
occurrence of an Acquisition or Change in Control (each as defined
below), the Employer terminates the employment of the Employee pursuant
to Section 6.1(b) hereof or the Employee terminates his employment
pursuant to Section 6.1(c) hereof, then:
(i) the Employee shall be entitled for a period of nine
(9) months from the Employment Termination Date, to continue to
receive payment of his Base Salary (as in effect on the Employment
Termination Date) at the same rate and on the same schedule as if
the Employee were still employed by the Employer during such
period; PROVIDED, HOWEVER, that each such payment shall be subject
to dollar-for-dollar reduction for any cash amounts received by
the Employee or accrued for his benefit from any successor
employer or other entity as payment for services rendered during
such nine (9) month period. During such nine (9) month period, the
Employer shall also continue to provide the Employee with such
health benefits as were provided to the Employee immediately prior
to the Employment Termination Date (or substantially comparable
benefits if a continuation of benefits is not permitted under then
existing insurance or health benefit programs of the Employer),
such benefits to be provided to the same extent and under the same
terms and conditions as if the Employee were still employed by the
Employer during such period. Except as specifically provided in
this Section 6.2(b), the Employee shall not be entitled to any
fringe benefits following the Employment Termination Date.
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(ii) each option to acquire shares of capital stock of the
Employer and each share of restricted capital stock of the
Employer then held by the Employee shall automatically and without
further action become fully vested, and each such option shall
remain exercisable until the expiration of such option or until it
sooner terminates in accordance with its terms; PROVIDED, HOWEVER,
that nothing in this Section 6.2(b) shall be applied so as to
restrict, impair or reduce in any way any other right that the
Employee may have from time to time with respect to the
acceleration of vesting of any option to acquire shares of capital
stock of the Employer or share of restricted capital stock of the
Employer then held by the Employee.
(c) If the Employer terminates the employment of the Employee
for cause pursuant to Section 6.1(d) hereof, the Employee shall not be
entitled to compensation, performance bonus or fringe benefits
hereunder beyond the Employment Termination Date.
(d) For purposes of this Section 6.2, the term "Acquisition"
shall mean:
(i) a merger, consolidation or similar transaction in
which securities possessing more than 50% of the total
combined voting power of the Employer's outstanding securities
are transferred to a person or persons different from the
persons who held those securities immediately prior to such
transaction, or
(ii) the sale, transfer, or other disposition of all
or substantially all of the Employer's assets to one or more
persons (other than any wholly owned subsidiary of the
Employer) in a single transaction or series of related
transactions.
(e) For purposes of this Section 6.2, the term "Change in
Control" shall mean a change in ownership or control of the Employer
effected through either of the following transactions:
(i) any person or related group of persons (other
than the Employer or a person that directly or indirectly
controls, is controlled by, or is under common control with
the Employer) directly or indirectly acquires beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under
the Securities Xxxxxxxx Xxx 0000, as amended) of securities
possessing more than 50% of the total combined voting power of
the Company's outstanding securities pursuant to a tender or
exchange offer made directly to the Employer's stockholders,
or
(ii) over a period of 36 consecutive months or less,
there is a change in the composition of the Board such that a
majority of the
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Board members (rounded up to the next whole number, if a
fraction) ceases, by reason of one or more proxy contests for
the election of Board members, to be composed of individuals
who either (A) have been Board members continuously since the
beginning of such period, or (B) have been elected or
nominated for election as Board members during such period by
at least a majority of the Board members described in the
preceding clause (A) who were still in office at the time such
election or nomination was approved by the Board.
Section 7. INTELLECTUAL PROPERTY MATTERS.
Section 7.1. INVENTIONS. All discoveries, inventions, improvements,
techniques, trademarks and innovations, whether or not patentable or subject to
copyright protection (including all data and records pertaining thereto), which
the Employee may invent, discover, originate or make during the term of his
employment with the Employer either alone or with others and whether or not
during working hours or by the use of facilities of the Employer, and which
relate to, or are, or may likely be useful in connection with the business of
the Employer ("INVENTIONS"), shall be the exclusive property of the Employer.
The Employee shall promptly and fully disclose Inventions to the Employer and
shall promptly record Inventions in such form as the Employer may request.
Section 7.2. ASSIGNMENTS. The Employee shall assign to the Employer all
right, title and interest to all Inventions reduced to writing, drawings or
practice by or for the Employee during the term of his employment. The Employee
shall execute upon the Employer's request at any time, and at the Employer's
sole expense, any applications, assignments and other documents that the
Employer may deem necessary or desirable to protect or perfect its rights,
including any patent rights in Inventions, and shall assist the Employer, at the
Employer's sole expense, in obtaining, defending and enforcing its rights
thereon. The Employee hereby appoints the Employer his attorney-in-fact for
purposes of effecting any assignments hereunder.
Section 7.3. CONFIDENTIAL INFORMATION. The Employee acknowledges that
all information acquired by the Employee from the Employer, its customers,
suppliers or others, or developed by the Employee alone or in conjunction with
others during the term of his employment which relate directly or indirectly to
the present or potential business of the Employer, including but not limited to
any ideas, formulae, processes, know-how, data, test results, raw materials,
prospective products or services, techniques, models, computer programs, plans,
schedules, sketches, notebooks drawings, process sheets, customer or supplier
lists, and financial information ("CONFIDENTIAL INFORMATION"), is a valuable and
unique asset of the Employer for the Employer's sole benefit. Except as set
forth below, the Employee shall not, at any time during or after the term of his
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employment, use for himself or others, or disclose or communicate to any person,
firm, corporation, association, or other entity for any reason or purposes
whatsoever (other than to Directors, officers and employees of the Employer in
the regular course of the Employer's business or to others subject to
appropriate confidentiality restrictions), any Confidential Information without
the prior written consent of the Employer; PROVIDED, HOWEVER, that the
confidentiality and nondisclosure provisions of this Section 7.3 shall not apply
to (i) a disclosure of any Confidential Information which, as of the time of
such disclosure, or thereafter, shall have become a part of the public knowledge
through no fault of the Employee, (ii) a disclosure of Confidential Information
by the Employee to a governmental entity in fulfillment of a legal obligation of
the Employee to such governmental authority, (iii) Confidential Information that
the Employee can establish was lawfully in his possession at the time of
disclosure by Employer and was not acquired, directly or indirectly, from
Employer and (iv) Confidential Information which Employee lawfully receives from
a third party, provided, however, that such Confidential Information was not
obtained by said third party, directly or indirectly, from the Employer.
Section 7.4. PROPRIETARY ITEMS. All originals, copies and summaries of
manuals, memoranda, notes, photographs, notebooks, records, reports, plans,
drawings and other documents or items of any kind concerning any matters
affecting or relating to the present or potential business of the Employer,
whether or not they contain Confidential Information, are, and shall continue to
be, the property of the Employer, and all of such documents or items in the
possession or control of the Employee shall be delivered to the Employer by the
Employee immediately upon the Employer's request or termination of the
Employee's employment hereunder.
Section 8. NON-COMPETITION.
In view of the unique nature of the business of the Employer and the
need of the Employer to maintain its competitive advantage in the industry
through the protection of its trade secrets and proprietary information, the
Employee agrees that during the term of his employment with the Employer and for
a period of one (1) year thereafter, the Employee shall not, directly or
indirectly, within the United States of America or its Territories or
Possessions or within any other country in which the Employer or any affiliate
of the Employer is engaged in or actively contemplating engaging in any activity
described below (i) engage in, (ii) own greater than a 5% interest in, be
employed by, or consult for, or act as an advisor to, any business, person or
entity which engages in, or (iii) otherwise participate in any way in, research,
development, manufacturing, marketing, selling or licensing activities, or in
any other activity, that may reasonably be deemed by the Employer to be in
competition with any activity in which the Employer or any subsidiary of the
Employer is then, or is then contemplating becoming, engaged in the field of
internet telephony. If at any
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time the foregoing provisions shall be deemed to be invalid or unenforceable or
are prohibited by the laws of the state or place where they are to be performed
by reason of being vague or unreasonable as to duration or place of performance,
this section shall be considered divisible and shall become and be immediately
amended to include only such time and such area as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
this Agreement; and the Employee and the Employer expressly agree that this
section, as so amended, shall be valid and binding as though any invalid or
unenforceable provision had not been included herein. The Employee further
agrees that during, and for a period of one (1) year after termination of, the
Employee's employment hereunder, he shall not solicit, or arrange to have any
other person or entity solicit, any person or entity engaged by the Employer as
an employee, customer, supplier, or consultant or advisor to, the Employer to
terminate such party's relationship with the Employer. The time periods provided
for in this Section 8 shall be extended for a period of time in which Employee
is in violation of any of the provisions of this Section 8.
Section 9. REMEDIES.
The Employer and Employee agree and acknowledge that the rights and
obligations set forth under this Agreement are of a unique and special nature
and that each party is, therefore, without an adequate legal remedy in the event
of the other party's violation of the covenants set forth in this Agreement. The
Employer and Employee agree, therefore, that the covenants made under this
Agreement shall be specifically enforceable in equity, in addition to all other
rights and remedies, at law or in equity or otherwise (including termination of
employment) that may be available to the parties.
Section 10. PROVISIONS OF GENERAL APPLICATION.
Section 10.1. DISPUTES. In the event of any dispute touching or
concerning this Agreement, the parties will submit to the exclusive jurisdiction
and venue of any court of competent jurisdiction sitting in Suffolk County,
Massachusetts, and the parties agree to comply with all requirements necessary
to give such court jurisdiction over the parties and the controversy. EACH PARTY
HEREBY WAIVES ANY RIGHT TO A JURY TRIAL AND TO CLAIM OR RECOVER PUNITIVE
DAMAGES.
Section 10.2. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed, interpreted and
determined in accordance with the internal substantive laws of the Commonwealth
of Massachusetts (excluding choice of law or conflict of law provisions).
Section 10.3. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which,
taken together,
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shall constitute one and the same document. In making proof of this Agreement it
shall not be necessary to produce or account for more than one such counterpart.
Section 10.4. OTHER AGREEMENTS. This Agreement represents the entire
understanding and agreement between the parties as to the subject matter hereof
and supersedes all prior or concurrent oral or written agreements relating
thereto.
Section 10.5. AMENDMENT. This Agreement may be amended only by a
written document executed in one or more counterparts by each of the parties
hereto.
Section 10.6. WAIVER. No consent to or waiver of any breach or default
in the performance of any obligation hereunder shall be deemed or construed to
be a consent to or waiver of any other breach or default in the performance of
any of the same or any other obligation hereunder. Failure on the part of either
party to complain of any act or failure to act of the other party or to declare
the other party in default, irrespective of the duration of such failure, shall
not constitute a waiver of rights hereunder and no waiver hereunder shall be
effective unless it is in writing, executed by the party waiving the breach or
default hereunder.
Section 10.7. ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
This Agreement may be assigned by the Employer to any Affiliate (as hereinafter
defined) or to a successor to the portion of its business to which this
Agreement relates (whether by purchase or otherwise). For purposes of this
Agreement, "Affiliate" shall mean any person or entity which, directly or
indirectly, controls or is controlled by or is under common control with the
Employer and, for the purposes of this definition, "control" (including the
terms "controlled by" and "under common control with"), shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of another, whether through the
ownership of voting securities or holding of office in another, by contract or
otherwise. The Employee may not assign or transfer any of his rights or
obligations under this Agreement.
Section 10.8. HEADINGS. The headings of sections and subsections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Agreement or to affect the meaning of any of
its provisions.
Section 10.9. SEVERABILITY. If any provision of this Agreement shall,
in whole or in part, prove to be invalid for any reason, such invalidity shall
affect only the portion of such provision which shall be invalid, and in all
other respects this Agreement shall stand as if such invalid provisions, or the
invalid portion thereof, had not been a part hereof.
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IN WITNESS WHEREOF, this Agreement has been executed by the Employer,
by its duly authorized officer, and by the Employee, as of the Effective Date.
IBASIS, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: President
EMPLOYEE
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
