EXHIBIT 10.1
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of January 1,
1998, by and between URSUS TELECOM CORPORATION, a Florida corporation (the
"Company"), and LUCA GIUSSANI ("Giussani").
In consideration of the mutual covenants contained herein, the
parties hereto agree as follow:
1. Term. The Company hereby employs Giussani as the Chief Executive
Officer of the Company, and Giussani agrees to serve the Company as such, upon
the terms and conditions hereof for the period commencing on the date hereof
and, unless Giussani's employment under the Agreement is otherwise terminated in
accordance with the provisions hereof, ending on December 31, 2002.
2. Duties. (a) Giussani shall serve as the Company's Chief Executive
Officer, with such duties and authority as are generally incident to such
position. Giussani will hold such senior offices and/or such directorships in
the Company and/or any subsidiaries or affiliates of the Company to which, from
time to time, he may be elected or appointed; provided that the offices to which
Giussani may be so elected or appointed shall not be inconsistent with his
duties and authority as aforesaid.
(b) Giussani agrees that he will devote substantially all of
his time and attention to the affairs of the Company and use his best
efforts to promote the business and interests of the Company and that he
will not engage, directly or indirectly, in any other business or
occupation during the term of employment hereunder. It is understood,
however, that the foregoing will not prohibit Giussani from engaging in
personal investment activities for himself and his family which do not
detrimentally interfere with the performance of his duties hereunder.
3. Compensation. The Company will pay Giussani an annual salary
("Base Salary") at the rate of $450,000 per year, payable in equal, bi-weekly
installments in accordance with customary payroll practices for senior
executives of the Company for all services to be rendered hereunder, including,
without limitation, all services to be rendered by him as an officer and/or
director of the Company and its subsidiaries and affiliates.
Commencing with its fiscal year beginning on April 1, 1998, the
Company shall pay Giussani a bonus ("Annual Bonus") dependent upon the Company's
annual earnings before interest, taxes, depreciation, amortization and bonuses
or similar cash compensation paid to Giussani and the other officers or key
employees of the Company that receive bonus
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compensation based on this or a similar formula ("EBITDAB"), on a consolidated
basis as reflected on the Company's annual financial statements as certified by
the Company's independent public accountants and filed with the Securities and
Exchange Commission on the Company's Annual Report on Form 10-K. For each fiscal
year during the term of this Agreement in which EBITDAB equals or exceeds $5
million, the Annual Bonus payable to Giussani shall equal ten percent (10%) of
Base Salary, and shall be increased by an additional five percent (5%) of Base
Salary for each $1 million of EBITDAB in excess of the first $5 million;
provided, however, that the maximum Annual Bonus for any fiscal year shall be
100% of Base Salary for EBITDAB of $23 million or more. Any Annual Bonus shall
be paid to Giussani in equal quarterly installments based on EBITDAB for the
current fiscal year through the end of such quarter, based on the Company's
unaudited financial statements as reported on Form 10-Q, subject to continuing
adjustment for each fiscal year's EBITDAB. To the extent any Annual Bonus is
payable for any period in which Giussani was not employed for the full fiscal
year, the Annual Bonus shall be prorated based on the actual number of months,
or portions thereof, during the fiscal year Giussani was employed by the
Company.
Nothing contained herein shall prohibit the Board of Directors of
the Company, in its sole discretion, from increasing the compensation payable to
Giussani pursuant to this Agreement by way of increased Base Salary, Annual
Bonus, or otherwise and/or making available to Giussani other benefits in
addition to those to which he is entitled hereunder.
Giussani and the Company agree that the bonuses paid to Giussani
through December 31, 1997 comprise the entire bonus to which he is entitled in
respect of the fiscal year ended March 31, 1998, and Giussani hereby waives any
other claims for compensation from the Company accruing prior to January 1,
1998.
The Company shall grant Giussani 150,000 options on its Common Stock
at the public offering price and subject to the consummation of the initial
public offering of the Company, half vesting at issuance and the remaining
vesting on January 1, 1999.
4. Expenses. Giussani shall be entitled to reimbursement by the
Company, in accordance with the Company's policies then applicable to senior
executives, against appropriate vouchers or other receipts for travel,
entertainment and other business expenses reasonably incurred by him in the
performance of his duties hereunder.
5. Executive Benefits. Giussani shall be entitled to a paid vacation
of four (4) weeks. Such vacation shall be taken at such time or times during the
applicable year as may be determined by Giussani subject to the Company's
reasonable business needs. Giussani shall be entitled to participate in, and
receive benefits under, any pension, profit sharing, insurance, hospitalization,
medical, disability, stock purchase, stock option, stock ownership or other
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employee benefit plan, program or policy of the Company which may be in effect
at any time during the course of his employment by the Company and which shall
be generally available to senior executives of the Company occupying positions
of comparable status or responsibility, subject to the terms of such plans,
programs or policies. Notwithstanding the foregoing, the Company may, in its
discretion, at any time and from time to time, change or revoke any of its
employee benefits plans, programs or policies in accordance with the terms
thereof, and Giussani shall not be deemed, solely by virtue of this Agreement,
to have any vested interest in the continuation of any such plans, programs or
policies; provided, however, that nothing in this Agreement shall affect or
impair any vested rights of Giussani under the terms of any such plan, program
or policy. The Company shall provide Giussani, at the expense of the Company,
with an automobile reasonably appropriate to Giussani's position, as determined
by the Company, for use by Giussani in connection with the performance of his
duties hereunder.
6. Withholding. All payments required to be made by the Company
hereunder to Giussani shall be subject to the withholding of such amounts
relating to taxes and other governmental assessments as the Company may
reasonably determine it should withhold pursuant to any applicable law, rule or
regulation.
7. Death; Permanent Disability. In the event of the death of
Giussani during the term of this Agreement, this Agreement shall terminate. If
during the term of this Agreement Giussani fails because of illness or other
incapacity to perform the services required to be performed by him hereunder for
any consecutive period of more than 120 days, or for shorter periods aggregating
more than 180 days in any consecutive twelve-month period (any such illness or
incapacity being hereinafter referred to as a "permanent disability"), then the
Company, in its discretion, may at any time thereafter terminate this Agreement
upon not less than 10 days' written notice thereof to Giussani, and this
Agreement shall terminate and come to an end upon the date set forth in said
notice as if said date were the termination date of this Agreement; provided,
however, that no such termination shall be effective if prior to the date when
such notice is given, Giussani's illness or incapacity shall have terminated and
he shall be physically and mentally able to perform the services required
hereunder and shall have taken up and be performing such duties.
If Giussani's employment shall be terminated by reason of his death
or permanent disability, Giussani or his estate, as the case may be, shall be
entitled to receive (i) any earned and unpaid salary accrued through the date of
termination, (ii) a pro rata portion of any annual bonus which Giussani would
otherwise have been entitled to receive pursuant to any bonus plan or
arrangement for senior executives of the Company and (iii) subject to the terms
thereof, any benefits which may be due to Giussani on the date of termination
under the provisions of any employee benefit plan, program or policy.
8. Termination for Cause. The Company may at any time during the
term of
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this Agreement, by written notice, terminate the employment of Giussani for
cause, the cause to be specified in the notice. For purposes of this Agreement,
"cause" shall mean (i) any willful misconduct of Giussani in connection with the
performance of any of his duties hereunder, including without limitation
misappropriation of funds or property of the Company, securing or attempting to
secure personally any profit in connection with any transaction entered into on
behalf of the Company or any willful and intentional act having the effect of
injuring the reputation, business or business relationships of the Company; (ii)
willful failure, neglect or refusal to perform Giussani's material duties
hereunder that is not cured within 20 days after the Company notifies Giussani
thereof; (iii) breach of any material covenants contained in this Agreement that
is not cured within 20 days after the Company notifies Giussani thereof; and
(iv) conviction (or nolo contendere plea) in connection with a felony relating
in any way to the business or affairs of the Company, or which would be required
to be disclosed in any filing or report with the U.S. Securities and Exchange
Commission. The determination of whether "cause" exists shall only be made at a
meeting of the Board of Directors of which Giussani receives notice and an
opportunity to address the Board on such matter. Termination for cause shall be
effective upon the giving of such notice and Giussani shall be entitled to
receive (i) any earned and unpaid salary accrued through the date of termination
and (ii) subject to the terms thereof, any benefits which may be due to Giussani
on such date under the provisions of any employee benefit plan, program or
policy. Giussani hereby disclaims any right to receive a pro rata portion of any
annual bonus with respect to the fiscal year in which such termination for
"Cause" occurs.
9. Resignation for Good Reason. Giussani may at any time during the
term of this Agreement, by written notice, terminate his employment for good
reason, the reason to be specified in the notice. For purposes of this
Agreement, "good reason" shall exist if (i) the Company materially fails to
comply with any of the provisions of this Agreement, other than isolated,
insubstantial or inadvertent failures not occurring in bad faith and which are
remedied by the Company promptly after receipt of notice thereof given by
Giussani, or (ii) the Company shall diminish Giussani's title, duties, base
salary or benefits.
10. Payments Upon Termination. If during the term of this Agreement,
Giussani's employment is terminated (i) by the Company without "cause" or (ii)
by Giussani for any "good reason," the Company shall pay to Giussani the Base
Salary at the rate in effect at the time notice of termination is given,
together with any applicable Annual Bonuses payable under the terms of this
Agreement and other rights and benefits Giussani may have under employee
benefits plans and programs of the Company in existence as of the date of such
termination, all for the greater of (x) the balance of the term of this
Agreement or (y) the twelve month period following the date of such termination.
11. Payments Upon Change of Control. During the term of this
Agreement, if there is a Change of Control (as hereinafter defined) and the
Company takes any action which
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would entitle Giussani to terminate his employment for "good reason," as such
term is defined in Section 9 hereof (a "Triggering Event"), then Giussani may at
his election, at any time within one year after any such Triggering Event,
terminate this Agreement (a "Voluntary Termination"), and Giussani shall be
entitled to the following compensation, in addition to the other compensation
and bonuses provided for herein:
(a) in lieu of any further salary payments to Giussani for
periods subsequent to the date of Voluntary Termination, the Company shall
pay as severance payment to Giussani, no later than the fifth day
following the date of Voluntary Termination, a lump-sum severance payment
of three years' base includible compensation, equal to the maximum tax
deduction that the Company is eligible to receive under the applicable
"golden parachute" regulations; and
(b) the Company shall provide Giussani with all employee
benefits and programs of the Company which Giussani was entitled to
receive or participate in immediately prior to the effective date of the
Voluntary Termination for the thirty six (36) month period following the
date of such Voluntary Termination.
For the purposes of this Agreement, "Change of Control" shall mean
the occurrence of any of the following events:
(i) any "person" or "group" (as such terms are used
under Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
Amended (the "Exchange Act"), whether or not such Sections are applicable)
is or becomes, whether by means of any issuance or direct or indirect
transfer of securities, merger, consolidation, liquidation, dissolution or
otherwise, the "beneficial owner" (as that term is used under Rules 13d-3
and 13d-5 under the Exchange Act, whether or not such rules are
applicable, except that a "person" or "group" shall be deemed to have
"beneficial ownership" of all shares that he or it has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time or otherwise), directly or indirectly through one or more
intermediaries, of 35% or more of the total voting power represented by
all of the voting stock of the Company; or
(ii) directly or indirectly, a transfer, sale, lease or
other disposition of all or substantially all of the assets of the Company
and its subsidiaries taken as a whole to any "person" or "group" (as such
terms are used un Sections 13(d) and 14(d) of the Exchange Act, whether or
not such sections are applicable), excluding any disposition to or among
the Company and/or one or more of its subsidiaries; or
(iii) any "person" or "group" (as such terms are used
under Sections 13(d) and 14(d) of the Exchange Act, whether or not such
sections are
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applicable) otherwise obtains the right or power (through any arrangement,
contract, proxy or other means) to elect or designate a majority of the
members of the Board of Directors of the Company then in office, without
regard to whether such right or power is exercised or invoked and without
taking into account the necessity of a special or annual stockholders
meeting or the taking of other procedural actions to exercise or invoke
such right or power.
12. Insurance. Giussani agrees that the Company may (at the sole
cost of the Company) procure insurance on the life of Giussani, in such amounts
as the Company may in its discretion determine, and with the Company named as
the beneficiary under the policy or policies. Giussani agrees that upon request
from the Company he will submit to a physical examination and will execute such
applications and other documents as may be required for the procurement of such
insurance.
13. Non-Competition; Solicitation. (a) Giussani agrees that during
his employment with the Company and for a period of one year after Giussani
leaves the Company's employ for any reason, he shall not, without the written
consent of the Company, directly or indirectly, either individually or as an
employee, agent, partner, shareholder, consultant, option holder, lender of
money, guarantor or in any other capacity, participate in, engage in or have a
financial interest or management position or other interest in any business,
firm, corporation or other entity within the State of Florida if it competes
directly with any business operation conducted by the Company or its
subsidiaries or affiliates or any successor or assign thereof, nor will he
solicit any other person to engage in any of the foregoing activities.
Participation in the management of any business operation other than in
connection with the management of a business operation which is in direct
competition with the Company or its subsidiaries or affiliates or any successor
or assign thereof shall not be deemed to be a breach of this Section 10(a). The
foregoing provisions of this Section 13(a) shall not prohibit the ownership by
Giussani (as the result of open market purchase) of 5% or less of any class of
capital stock of a corporation which is regularly traded on a national
securities exchange or over-the-counter on the NASDAQ System.
(b) Giussani will not, without the written consent of the
Company, at any time during his employment with the Company and for a
period of one year after Giussani leaves the Company's employ for any
reason, solicit (or assist or encourage the solicitation of) any employee
of the Company or any of its subsidiaries or affiliates to work for
Giussani or for any business, firm, corporation or other entity in which
Giussani, directly or indirectly, in any capacity described in Section
13(a) hereof, participates or engages (or expects to participate or
engage) or has (or expects to have) a financial interest or management
position, except that this provision shall not affect Giussani's right,
after the termination of his employment for any reason, to solicit those
employees of the Company or its subsidiaries or affiliates with whom
Giussani has had a business or
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personal association prior to the original commencement of Giussani's
employment by the Company, to become associated with or work for an entity
with which Giussani is then associated or working with, in compliance with
the non-compete provisions of Section 13 (a) (e.g., for an employer not
within the State of Florida).
(c) If any of the covenants contained in this Section 13 or
any part thereof is held by a court of competent jurisdiction to be
unenforceable because of the duration of such provision, the activity
limited by or the subject of such provision and/or the area covered
thereby, then the court making such determination shall construe such
restriction so as to thereafter be limited or reduced to be enforceable to
the greatest extent permissible by applicable law.
14. Inventions, Etc. Giussani agrees that any and all systems,
work-in-progress, inventions, discoveries, improvements, compounds, formulae,
patents, copyrights and trademarks, made or developed by him, solely or jointly
with others, or otherwise, during the term of his employment by the Company, and
which may be useful in or relate to any business of the Company and/or any
subsidiary or affiliate of the Company shall be fully disclosed by Giussani to
the Chief Operating Officer of the Company, and shall be the sole and absolute
property of the Company, and the Company will be the sole and absolute owner
thereof. Giussani agrees that at all times, both during his employment and after
the termination of his employment, he will keep all of the same secret from
everyone except the Company and its duly authorized employees and will disclose
the same to no one except as required in good faith in the course of his
employment with the Company, or by law, or unless otherwise authorized in
writing by the Chief Operating Officer of the Company.
15. Patents. Giussani agrees, at the request of the Company, to make
application in due form for United States Letters Patent and foreign Letters
Patent on any of such systems, inventions, discoveries, improvements, compounds
and formulae referred to in Section 14 hereof, and to assign to the Company all
of his right, title and interest in and to said inventions, discoveries,
improvements, compounds, formulae and patent applications therefor or patents
thereon, and to execute at any and all times any and all instruments, and to do
any and all acts necessary, or which the Company may deem desirable, in
connection with such applications for Letters Patent, in order to establish and
perfect in the Company the entire right, title and interest in and to said
systems, inventions, discoveries, improvements, compounds, formulae and patent
applications therefor, or in the conduct of any proceedings or litigation in
regard thereto. It is understood and agreed that all costs and expenses,
including but not limited to reasonable attorneys' fees, incurred at the request
of the Company in connection with any action taken by an Giussani pursuant to
this Section 15, shall be borne by the Company.
16. Trade Secrets, Etc. Giussani agrees that he shall not, during or
after the
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termination of this Agreement, divulge, furnish or make accessible to any
person, firm, corporation or other business entity, any confidential
information, trade secrets, technical data or know-how relating to the business,
business practices, methods, products, processes, equipment, clients' prices or
other confidential or secret aspect of the business of the Company and/or any
subsidiary or affiliate, except as may be required in good faith in the course
of his employment with the Company or by law, without the prior written consent
of the Company, unless such information shall become public knowledge (other
than by reason of Giussani's breach of the provisions hereof).
17. Acceptance . Each of the Company and Giussani accepts all of the
terms and provisions of this Agreement and agrees to perform all of the
covenants on its or his part to be performed hereunder.
18. Equitable Remedies. Giussani acknowledges that he has been
employed for his unique talents and that his leaving the employ of the Company
would seriously hamper the business of the Company and that the Company will
suffer irreparable damage if any provisions of Sections 13, 14, 15 or 16 hereof
are not performed strictly in accordance with their terms or are otherwise
breached. Giussani hereby expressly agrees that the Company shall be entitled as
a matter of right to injunctive or other equitable relief, in addition to all
other remedies permitted by law, to prevent a breach or violation by Giussani
and to secure enforcement of the provisions of Sections 13, 14, 15 or 16 hereof.
Resort to such equitable relief, however, shall not constitute a waiver or any
other rights or remedies which the Company may have.
19. Indemnification. Giussani shall be entitled to the fullest
extent permitted by law to the benefit of indemnification of the assertion
against Giussani of any liability, damages, losses or expenses, including
reasonable attorneys' fees and costs, sustained by Giussani arising out of his
performance of duties as an employee of the Company. This provision shall
survive termination of this Agreement. The Company shall add Giussani as a
covered officer under any insurance policy (including Directors' and Officers'
insurance policies) that may be maintained by the Company covering the directors
and officers of the Company acting in their capacity as such. The Company will
use its reasonable efforts to maintain such coverage for a period of at least
two years after the termination of this Agreement.
20. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and there are no other terms other than
those contained herein. No variation hereof shall be deemed valid unless in
writing and signed by the parties hereto and no discharge of the terms hereof
shall be deemed valid unless by full performance of the parties hereto or by a
writing signed by the parties hereto. No waiver by the Company or Giussani of
any breach by the other party of any provision or condition of this Agreement
shall be deemed a waiver of a breach of a similar or dissimilar provision or
condition at the same time or any prior or subsequent time. This Agreement
supersedes and controls over all previous agreements
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between the Company and Giussani regarding his employment by the Company.
21. Severability. In case any provision in this Agreement shall be
declared invalid, illegal or unenforceable by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
22. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be deemed to have
been given at the time when mailed in the United States enclosed in a registered
or certified post-paid envelope, return receipt requested, and addressed to the
addresses of the respective parties stated below or to such changed addresses as
such parties may fix by notice:
If to the Company:
Ursus Telecom Corporation
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxx.
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
If to Giussani:
_____________________________
_____________________________
_____________________________
provided, however, that any notice of change of address shall be effective only
upon receipt.
23. Successors and Assigns. This Agreement is personal in its nature
and neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder (except
for an assignment or transfer by the Company to a successor as contemplated by
the following proviso); provided, however, that the provisions hereof shall
inure to the benefit of, and be binding upon, any successor of the Company,
whether by merger, consolidation, transfer of all or substantially all of the
assets of the
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Company, or otherwise, and upon Giussani, his heirs, executors, administrators
and legal representatives.
24. Governing Law. This Agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of the State
of Florida without giving effect to any principles of conflict of laws. In any
suit, action or proceeding arising out of or in connection with this Agreement,
the prevailing party shall be entitled, as a part of the judgment therein, to an
award of the reasonable attorneys' and other professionals' fees and costs
incurred in connection therewith.
25. Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
URSUS TELECOM CORPORATION
By:
-------------------------------
Name:
Title:
-----------------------------------
Luca Giussani
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