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Exhibit 10.20
Employment Agreement
THIS EMPLOYMENT AGREEMENT, is made and entered into as of the first
day of April, 1996, by and between GTS Group, Inc., a Delaware corporation (the
"Corporation"), and Xxxxxxx X. Xxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive has substantial experience operating
international telecommunications ventures; and
WHEREAS, the Corporation desires to employ the Executive, and the
Executive 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 Executive, and the
Executive hereby accepts such employment, on the terms, and subject to the
conditions herein contained.
(b) The Executive shall be Senior Vice President - Asia. In this
capacity as Senior Vice President - Asia, the Executive shall report to and
perform such duties and exercise such power and authority as may from time to
time be delegated to the Executive by the Chief Executive Officer and the Board
of Directors.
(c) The Executive shall devote all of the Executive's business
time and attention and dedicate with the Executive's best efforts toward the
fulfillment and execution, including performance criteria, of the Executive's
defined duties pursuant to this Employment Agreement.
2. Term.
(a) The initial term of the employment of the Executive under this
Employment Agreement shall be three years commencing on April 1, 1996, and
continuing, unless sooner terminated pursuant to Section 9.
(b) Thereafter this Agreement shall be automatically renewed
annually, unless either party hereto shall deliver written notice in accordance
with Section 15 to the other party at least 180 days prior to the date
termination of the initial term or any extension or renewal there (the "Term")
of its desire to terminate such employment (a "Notice of Termination").
3. Compensation.
(a) During the initial 12 month consecutive period of service, the
Executive shall be paid a salary at the rate of two hundred thirty one thousand
eight dollars ($231,008) per annum, payable in accordance with the
Corporation's customary payroll practices for Executives.
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(b) At the end of each fiscal year the Corporation shall review
the salary of the Executive, and shall make such adjustments to base salary as
the Corporation 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 Executive pursuant to this Section 3.
4. Bonus Opportunities.
(a) As additional compensation opportunities for the Executive
hereunder, the Corporation shall provide to the Executive a bonus program which
allows for possible incentive compensation (the "Bonus") in respect of each
fiscal year of the Corporation. Subject to the provisions of Section 4(b), the
basis for such bonus, shall be based on performance achievements by the
Corporation and the Executive. Incentive award opportunities may range up to
30% of the Salary of the Executive in any fiscal year. The Bonus plan will be
reviewed and adjusted on an annual basis, if deemed appropriate, by the
Corporation in coordination with the Compensation Committee of the Board of
Directors in its sole and absolute discretion.
(b) The formula or other methods for determining the Bonus for the
Executive in each fiscal year shall be determined by the Corporation in
coordination with the Compensation Committee of the Board of Directors, and
shall be based upon the performance of the Corporation and the Executive in
such fiscal year as compared with the projected expected performance of the
Corporation for such fiscal years. The actual amount of the Bonus paid to the
Executive in respect to the performance of any fiscal year of the Corporation
shall be subject to the sole and absolute discretion of the Board of Directors
of the Corporation.
(c) All bonuses with respect to any fiscal year of the Corporation
shall be paid as soon as practical subsequent to the issuance of the
consolidated financial statements of the Corporation.
5. Stock Option Plan.
(a) The Corporation has adopted the 1992 Stock Option Plan, as
amended (the "Plan") for its employees. Subject to the provision of the Plan,
a copy of which is annexed hereto as Exhibit A, and the execution and delivery
of an option agreement (the "Option Agreement"), in the form annexed hereto as
Exhibit B, the Executive is eligible for the Corporation to grant to the
Executive options to purchase Common Stock of the Corporation ("Common Stock").
The specific number and terms of the options are presented in the Plan and the
Option Agreement annexed hereto.
(b) In the event that the Corporation establishes one or more
additional stock option plans for its Executives, the Executive may be eligible
to receive options under such plans, as determined by the Compensation
Committee of the Board of Directors of the Corporation.
6. Benefits. During the Term, the Executive 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 Executives, including without limitation, but
subject to the conditions imposed by the carriers, any medical, health,
disability and life insurance policies.
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(a) Additional Benefits. The Corporation shall pay to the
Executive an amount equal to $15,000 per annum as additional compensation for
all periods during the Term in which the Executive shall be based outside of
the United States of America.
7. Expense Reimbursement.
(a) During the Term, the Corporation shall reimburse the Executive
for all reasonable expenditures actually and necessarily paid or incurred by
the Executive 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
Executive 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 Executive with a credit card,
Executive acknowledges complete personal responsibility for all charges made on
such credit card. Any charges received by the Corporation for expenses not
documented on an approved expense report may be deducted by the Corporation
from the Executive's payroll check. Upon termination of this Agreement, non
approved charges shall be deducted from the last payroll check issued to the
Executive.
8. Vacation. In each fiscal year during the Term, the Executive
shall be entitled to 4 weeks vacation time, which shall not be cumulative from
year to year without the prior written consent of the Corporation or unless the
Executive shall be unable to take such vacation due to Executive's duties under
the Agreement; provided, however, that to the extent the Executive cannot take
vacation time during the Term due to his responsibilities under this Agreement,
upon termination, Executive 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 times have the right to terminate
immediately this Agreement and the employment of the Executive hereunder for
"Cause" by written notice to the Executive in accordance with Section 15. For
the purpose of this Agreement, the term "Cause" shall mean any action of the
Executive or any failure to act by the Executive which constitutes:
(i) fraud, embezzlement or any felony in connection with
the Executive's duties as an Executive 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 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) a 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 Corporation shall
be deemed to be continuing if the Executive shall have received
written notice thereof and shall have not terminated the conflict of
interest or failure to follow directions within thirty days after
receipt of such notice;
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(iii) an extended period of absence by the Executive from
the performance of the obligations of the Executive provided
hereunder, which absence shall be for a reason other than a
disability, and which has not been approved in writing in advance
by the Corporation; or
(iv) a failure to meet minimum satisfactory performance
requirements for a performance period. For this purpose, the
Corporation and the Executive will agree in a separate, written
document to the terms of each performance period and the minimum
satisfactory performance requirements applicable to each such
performance period. This document may be modified or extended
only by the mutual consent of both parties.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Corporation, by written notice to the Executive, shall at
all times have the right to terminate this Agreement and the employment
of the Executive hereunder if the Executive 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 Executive from reasonably discharging
required services and employment duties hereunder;
(ii) be attested to in writing by a physician or a group
of physicians acceptable to the Corporation; and
(iii) continue during any period of three consecutive
months or for periods aggregating three months in any eighteen
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 Executive.
(d) The Executive may terminate the Agreement at any time by
giving 180 days' written notice to the Corporation in accordance with
Section 15. Upon giving such notice, the Executive shall be continued in
employment with the Corporation for the full 180 days) of the notice
period, be continued in employment with the Corporation without the
existence of an employment agreement, or at the discretion of the
Corporation may be paid his/her salary and have applicable benefits
hereunder continued for such 180 day period in lieu of continued
employment. Failure of the Executive to provide the full 180 days notice
shall be deemed a breach of the agreement by the Executive and permit
the Corporation to cease immediately the compensation and benefits
provided herein, and if deemed necessary, to take remedial action to
prohibit any further damages as may occur from the breach by the
Executive.
10. Payments Upon Termination.
(a) If the Corporation shall terminate the employment of the
Executive under this Agreement pursuant to Section 9(a) hereof, or if the
employment of the Executive hereunder shall be terminated by the Executive
other than in accordance with Section 2 or Section 9(d), then, in any such
event, the Corporation shall have no obligation to pay to the Executive base
salary or any other compensation or benefits provided under this Agreement for
any period after the date of such termination, or to pay any Bonus for the
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year in which such termination occurs; provided, however, that the Corporation
shall pay all Salary earned by the Executive prior to the date of such
termination and the reimbursement of all expenses incurred by the Executive
prior to the date of such termination in accordance with Section 7 hereof. Upon
termination pursuant to Section 9(a) or by the Executive other than in
accordance with Section 2 or Section 9(d), all options granted to the Executive
pursuant to Section 5 shall immediately be canceled and no further options
shall vest.
(b) If the employment of the Executive hereunder shall terminate
pursuant to subsections 9(b) or (c) hereof, if the employment of the Executive
shall be terminated by the Corporation in accordance with Section 2 hereof, or
if the Executive shall be terminated by the Corporation other than in
accordance with the provisions of this Agreement, the Corporation shall pay to
the Executive or the Executive's Estate, as the case may be, the Salary and
target Bonus for the fiscal year in which the termination occurs, prorated for
the number of weeks during which the Executive was employed by the Corporation
during such fiscal year.
(c) In the event that the Corporation terminates the employment of
the Executive by delivering notice in accordance with Section 2, or for any
reason other than those set forth in Section 9, the Executive shall receive as
severance an amount equal to number of months/days of the notice period, (e.g.,
six months Salary); provided, however, that in the event that the Executive is
subject to the covenants and agreements set forth in Section 11, the amount of
the severance payable to the Executive shall be equal to the number of
months/days during which the Executive remains subject to the covenants and
agreements set forth in Section 11. 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 payroll
practices for Executive officers.
(d) In the event that the employment of the Executive is terminated
due to a Total Disability or the death of the Executive in accordance with
Section 9(b) or 9(c) hereof, then the Executive or his designated beneficiary,
as the case may be, shall receive such amounts as are provided for in the
disability policy or life insurance policy provided by the Corporation for the
benefit of the Executive.
11. Covenants of the Executive. In order to induce the Corporation to
enter into this Agreement and employ the Executive hereunder, the Executive
hereby covenants and agrees as follows:
(a) During the term and for a period of six months thereafter, the
Executive shall not, without the prior written consent of the Corporation,
directly or indirectly, own, acquire, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise with or use or permit his/her
name to be used in connection with:
(i) any business or enterprise engaged in the business of
communications, telecommunications and related industries operating in
the geographic area of Asia to include India, (this subparagraph shall
include any business operations and activities the Corporation will
expand into after the date this agreement is extended).
It is recognized by the Executive that the business of the Corporation
and its affiliates and the Executive's connection there with is or will be
involved in activity
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throughout the Geographic Area and that more limited geographical limitations
on this non-competition covenant are therefore not appropriate.
The foregoing provisions of this Section 11 (a) shall not prevent the
Executive from acquiring and/or owning not more than nine per cent of the
equity or debt securities of any company which has securities listed for
trading on a recognized securities exchange or are regularly traded in the
National Association of Securities Dealers Automated Quotation System.
(b) The Executive 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 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 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 six months thereafter, the
Executive 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
Executive 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
(ii) except in accordance with the Executive'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 or affiliates, to terminate or refrain from
renewing or extending its contractual or other relationship with the
Corporation or such subsidiary or affiliate, and the Executive 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.
(d) In the event that the Corporation terminates the employment of
the Executive by delivering notice in accordance with Section 2, or for any
reason other than those set forth in Section 9, the Corporation may, in its
sole discretion, elect to waive the application of the covenants and agreements
set forth in Section 11 to the Executive.
12. Specific Performance. The Executive acknowledges that a breach or
violation by the Executive of the covenants or agreements contained in Sections
11 and 13 of this Agreement would cause irreparable harm and damage to the
Corporation if such provisions are not specifically enforced, the monetary
amount of which would be impossible to ascertain. Therefore, the Corporation
shall be entitled to enforce such provisions in a court of equity by a decree
of specific performance and to obtain an
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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 Sections 11 and 13 of this Agreement by the Executive 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 Executive of the
covenants or agreements contained in Section 11 or elsewhere in this Agreement.
Notwithstanding anything herein to the contrary, the Corporation hereby
expressly reserves the right to seek damages and other economic remedies for a
breach by the Executive of the covenants or agreements contained in Section 11
or elsewhere in this Agreement.
13. Foreign Corrupt Practices Act . You agree to comply in all
respects with the U.S. Foreign Corrupt Practices Act of 1977 (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. Your failure to comply in all
respects with the provisions of the FCPA shall constitute a material breach by
you of your obligations hereunder and shall entitle Global TeleSystems Group,
Inc. to terminate this Agreement immediately. A copy of the Corporation's FCPA
policy is annexed hereto as Exhibit C.
14. No Delegation. The Executive shall not delegate his
employment obligations under this Agreement to any other person.
15. Notices. Any notice required or permitted must be approved by the
Corporation according to the terms of this Agreement and must be approved in
writing and with appropriate confirmation of receipt, certified mail, return
receipt requested, or overnight courier to the following addresses:
If to the Corporation: Global TeleSystems Group, Inc.
Attn: General Counsel
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx 00xx Xxxxx
XxXxxx, XX 00000 XXX
If to the Executive: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xx. 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. Renewal notices shall be deemed approved at the time when such are
approved by the Compensation Committee of Board at an official meeting.
16. Binding Effect. This Agreement shall be for the benefit of
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns.
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17. 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.
18. Severability. In case any one or more of the provisions of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
invalid or unenforceable in any respect, such provision shall be not force and
effect, but the illegality, invalidity or unenforceability 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.
19. Choice of Laws. The Executive and the Corporation intend and
hereby acknowledge that jurisdiction over disputes with regard to this
Agreement shall be exclusively in the courts of the Commonwealth of Virginia,
and this Agreement shall be governed by the laws of the Commonwealth of
Virginia as to the validity, interpretation, and enforcement thereof.
20. 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 Virginia in
accordance with the rules of the American Arbitration Association then in
effect. The arbitrators' award shall be final and binding upon the Corporation
and the Executive, and judgement confirming such arbitration may be entered
thereon in any court having jurisdiction over such proceedings.
21. 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.
22. 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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
Global TeleSystems Group, Inc.
By: /s/ [ILLEGIBLE]
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Title:
/s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
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