EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this 31st day of May 1996, at Geneva,
Switzerland by and between VIRTUAL TELECOM S.A. a Swiss corporation
(hereinafter "Company"), and Xxxxxx XXXXX (hereinafter "Employee").
RECITALS
WHEREAS, the Company engages as a service provider in telecommunications
services and as an information provider in electronic publishing industries;
and
WHEREAS, the Employee is experienced in the business of the company and has
served as Financial Analyst and Portfolio Manager in the Investment Services
Industry; and,
WHEREAS, the Company desires to continue to employ the Employee and the
Employee desires to continue serving the Company, on the terms and conditions
provided herein;
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Company hereby agrees to hire and employ Employee as Chief Executive
Officer of the Company, and the Employee agrees to accept such
employment under and subject to all of the terms, conditions and
provisions hereof for a period of five (5) years from the date hereof,
which period will be subject to renewal for up to three (3) additional
three (3) year terms a provided in Section 9 hereof. Employee's duties
shall be designated by Company's Board of Directors and shall be
subject to such reasonable policies and directions as may be
established or given by the Company from time to time.
2. Employee agrees further to well and faithfully serve Company and to
devote substantially his full -time attention and energies to such
service. During the term hereof, the Employee will not have any
affiliation, direct or indirect with any other business entity which
competes with the business of the Company.
3. Company agrees to pay Employee compensation for his services hereunder
for each year of the term at the minimum rate of SFr 96'000.- (approx.
$80'000.- ) per annum. Said compensation shall be payable in equal
weekly, monthly or semi-monthly payments or otherwise as has been the
Company's past practice, commencing upon execution of this Agreement.
The above stated minimum salary shall be increased automatically each
year of the term by a factor equal to the increases in the Consumer
Price Index for Switzerland (Geneva). Effective each yearly
anniversary of the date hereof, the above stated minimum salary shall
be multiplied by a fraction of the numerator of which is the CPI for
the month of July of that year and the denominator is the CPI for the
month of July of the previous year. Company and Employee agrees that
with regard to any year of the term for which Company grants Employee
an increase in salary in excess of the salary for that year of the
term which would prevail through application of the above formula, the
formula will not be applied for such year of the term.
4. Incentive compensation in the form of bonuses or other cash or non-cash
incentives shall be considered for Employee by Company annually based
upon Company's earnings before income taxes or such other performance
standards as are established by Company's Board of Directors. The
performance standards applicable for the first year of the term are
set forth in Schedule "A" hereto.
5. Company will provide Employee with disability insurance coverage (or
reimburse Employee for his cost therefor) in an amount of at least
equal to sixty percent (60%) of the Employee's minimum salary as set
forth in paragraph 3 above.
6. Company agrees to provide Employee with a monthly allowance of $600
during the term for expenses and operating costs incurred by Employee
in carrying out his responsibilities. In addition Company will cover
expenses incurred in the operating of an office from the Employee's
home.
7. Company will provide Employee with paid vacation consistent with the
Company's polices and practices, but no less than four (4) weeks per
year. Employee will participate in all other so-called fringe benefits
afforded by Employer to other employees.
8.
a) If Employee shall be rendered incapable, by illness or by other cause,
from complying with the terms, conditions and provisions on his part
to be kept, observed and performed then Employee and Company shall be
subject to the terms and conditions of Swiss invalidity insurance and
such Swiss laws applying thereto.
b) This Agreement may be terminated by Company for "Cause", as
hereinafter set forth, after delivery to the Employee of written
notice which identifies such cause and establishes an effective date
of termination. In the event of the death of Employee during the term
of this Agreement, the sum payable to him for services rendered to the
date of his death and any sums payable thereafter shall be paid to his
authorized personal representative.
c) The employment of Employee shall further be terminable by the Company
for "Cause" upon determination at any time that Employee has engaged
in any act of dishonesty whatsoever arising out of performance or
failure to perform his duties hereunder. Such acts of dishonesty shall
include pilferage, embezzlement, unfair competition and other similar
acts.
d) In addition to the foregoing "Cause" will include, but not limited to:
i) Employee's adjudication as an incompetent;
ii) Employee's persistent or excessive use of drugs or alcohol to an
extent that such use is substantiated by reliable objective
evidence and significantly interferes with the proper
performance of his duties hereunder;
iii) Employee's conviction of any criminal act, including without
limitation, misappropriation of corporate funds and property,
provided, however that conviction of a misdemeanor shall not be
grounds for termination unless such misdemeanor shall have
involved misappropriation of corporate funds or property, fraud
or other activity which bears directly upon Employee's ability
to faithfully perform his duties hereunder;
iv) Employee's breach of any term of this Agreement, unless cure of
such breach is promptly commenced upon receipt of written notice
specifying the breach, authorizing by Company's Board of
Directors and served by any officer of Company and such cure is
either completed by Employee not later then thirty (30) days
thereafter, or if such cure cannot be completed in thirty (30)
days, if diligently undertaken by Employee within said thirty
(30) days and pursued to completion as soon as thereafter is
possible; or
v) Employee's commission of any act constituting gross negligence
in the performance of his duties hereunder or willful
misconduct, or after notice to such effect, Employee's
commission of another act constituting negligence or
insubordination.
Cause shall be deemed to include, in addition to the above, such conduct
which the courts of Geneva, Switzerland recognize at the time of any such
conduct as being sufficient grounds to constitute cause for dismissal or
termination of employment.
e) In the event that this Agreement is terminated by Company for a reason
other than Employee's death or disability or "Cause", Employee shall
receive, in equal monthly installments over the remainder of the term,
the balance of the compensation owed the Employee hereunder. The
amounts payable pursuant to this paragraph 8 (e) will be reduced by
the amount of any compensation received or to be received by Employee
with respect to any other employment during the term hereof. Upon
request from time to time, employee will furnish the Company with a
true and complete certificate specifying any such compensation due to
or received by Employee.
f) If Employee should desire of his own volition to terminate this
Agreement, then the decision of the majority of Company's Board of
Directors shall be binding as to the terms and conditions of such
Employee's termination.
g) The parties hereto agree that the foregoing termination benefits shall
be the sole and exclusive obligation of Company with respect to any
such termination of Employee
and the same are accepted by Employee in lieu of any and all other
rights hereunder or as provided by law.
2. The term of this Agreement shall be subject to extension for up to three
(3) additional three (3) year renewal terms on the following terms and
conditions. No later than ninety (90) days prior to the expiration of the
initial term hereof and no later than sixty (60) days prior to the
expiration of any renewal term hereof, Company shall notify Employee in
writing to the effect that Company desires to extend the term of this
Agreement for an additional three (3) year period. Timely delivery of such
notice shall serve to renew this Agreement, as provided above. In the event
no such notice is delivered then this Agreement shall be automatically
renewed at the end of the then current year of the term. The employment of
Employee during any renewal term shall be on the same terms and conditions
as are applicable for the initial term,
3. This Agreement shall not be transferable or assignable by Employee, nor
shall Employee's interest herein be transferred or assigned by operation of
law, and any assignment or attempted assignment, transfer, mortgage,
hypothecation, or pledge of this Agreement or of his interest herein by
Employee, shall be null and void and, at the option of the Company, this
Agreement may be forthwith terminated and canceled for such, cause.
4. Employee agrees at all times during the term of this Agreement to conduct
himself in such manner as not to injure or adversely reflect on the credit
standing, reputation or the business of the Company.
5. Subject to the terms and conditions which may be set forth in a
Non-Disclosure and Secrecy Agreement with Company (the form of which is
attached hereto as Exhibit "A") which Employee agrees to execute as
additional consideration for this Agreement, Employee agree that he will
not disclose to any person or use (except for the sole and exclusive
benefit of the Company) information obtained by him during the period of
his employment as to the plans, network designs, software, processes,
business methods, names of customers, partnering or strategic alliance
arrangements, financial statements or any other trade secrets or other
confidential or proprietary information owned by or respecting the
Company, its business or properties. Nothing herein contained shall
authorize Employee to make use of any confidential or proprietary
information of Company after termination of this agreement without written
prior consent of Company. The terms and conditions set forth in any
NonDisclosure and Secrecy Agreement between Employee and Company shall be
incorporated herein and become a part of this Agreement.
6. All notices, requests demands and other communications provided for by this
Agreement shall be in writing and (unless other wise specifically provided
for herein) shall be deemed to have been given at the time when postmarked
by a post office or dated for airway xxxx number purposes by a courier
service, addressed to the address of the parties stated below or to such
changed address as such party may have fixed by notice:
TO COMPANY: VIRTUAL TELECOM INC.
0000 Xxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxx
COPY TO: VIRTUAL TELCOM X.X.
xxx xx xxxxx
XX 0000
Xxxxxx 00
Xxxxxxxxxxx
and COPY TO: XXXXX & FERRY (ATTORNEYS AT LAW)
00xx xxxxx
Xxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
XXX
TO EMPLOYEE: Xxxxxx XXXXX
00X, xx.-xx Xxxxxxxxx
0000 Xxxxxxx/XX
Xxxxxxxxxxx
7. This agreement sets forth the entire agreement and understanding between
the parties as to the subject matter hereof and merges and supersedes all
prior discussions, agreements and understandings of every kind and nature
between them and no party hereto shall be bound by any conditions,
definition, warranty or representations other than expressly provided for
in this Agreement or as may be on a date subsequent to the date hereof duly
set forth in writing signed by the party hereto which is to be bound
thereby. This Agreement shall not be changed, modified or amended except by
a writing signed by the party to be charged.
8. This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of Delaware irrespective
of the fact that one or more of the parties hereto may become residents of
another state and without giving effect to principles of conflicts of laws.
9. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective representatives, heirs, successors
and assigns.
10. In the event that any provision of this Agreement shall be held to be
invalid, the same shall not effect, in any respect whatsoever, the validity
of the remainder of this Agreement.
11. This Agreement may be executed in any number of counterparts each of which
shall be deemed to be an original and all of which, when taken together,
shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date written above.
"Employee"
Xxxxxx XXXXX
/s/ Xxxxxx Xxxxx
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"Company"
VIRTUAL TELECOM, INC.
By: /s/ (Illegible)
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Its: CEO
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