Exhibit 10(aj)
EMPLOYMENT AGREEMENT
Agreement dated as of May 18, 2000 (the "Effective Date"), by and
between TOTAL-TEL USA COMMUNICATIONS, INC., a New Jersey corporation, (the
"Company" or "Employer") , with offices at 000 Xxxxx Xxxx, Xxxxxx Xxxxx, Xxx
Xxxxxx 00000 and A. Xxxx Xxxxx Jr., 0000 Xxx Xxxxx Xxxx, Xxxxxxx, XX 00000
("Executive").
WITNESSETH
WHEREAS, the Company and Executive desire to enter into this Employment
Agreement (the "Agreement") in order to set forth the terms and conditions of
Executive's employment effective May 18, 2000 intending to supersede any prior
employment agreement, written or oral, whether with the Company or any of its
subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
1. Duties and Responsibilities.
The duties and responsibilities of Executive shall be of a senior
executive and managerial nature as the same shall be assigned to him, from time
to time, by the Board of Directors of the Employer. Executive recognizes that,
during the period of his employment hereunder, he owes an undivided duty of
loyalty to Employer and agrees to devote all of his business time and attention
to the performance of said duties and responsibilities and to use his best
efforts
to promote and develop the business of Employer and its affiliates. It is the
intention of the Employer that Executive shall be appointed President and Chief
Executive Officer of the Employer to serve at the pleasure of Employer's Board
of Directors. During the employment period as hereinafter defined, Executive
shall serve as an officer and/or director of Employer and/or any of its
affiliates, if elected, and shall serve as a member of any committee of any such
Board of Directors to which he may be elected or appointed, without additional
compensation.
2. Employment period. For a period commencing on the Effective Date
hereof and ending on the second anniversary of the Effective Date hereof (the
"Employment Period"), Employer hereby employs Executive in the executive and
managerial capacities herein set forth. Executive agrees, pursuant to the terms
hereof, to serve in said capacities for the Employment Period. This Agreement
and the Employment Period shall be automatically extended for additional one (1)
year periods (each a "successive Employment Period") unless a party, by written
notice as herein provided, notifies the other party by a date which is not less
than ninety (90) days prior to the expiration of the Employment Period or any
successive Employment Period that there shall be no extension or further
extension of this Agreement.
3. Compensation.
(a) For all services performed by Executive for the company during
the Employment period or any Successive Employment period, the Company shall pay
Executive, in accordance with the
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normal pay practice of the Company, a base Salary of $300,000 per annum, payable
not less frequently than in equal monthly installments, which may be increased
annually, effective as of an anniversary of the date hereof during the
Employment Period or any Successive Employment Period, at the sole discretion of
the Board of Directors.
(b) During each year of the Employment Period and any Successive
Employment Period, Executive shall be eligible to receive a bonus ("Bonus") in
an amount not to exceed one hundred (100%) percent of his then effective base
Salary predicated upon Employer's attainment of annual Revenue and Earnings
Targets as well as management goals determined by the Board of Directors for
each twelve month period ending April 30 covered by the Employment Period and
any Successive Employment Period, after good faith negotiations with Executive
to be completed within sixty (60) days after the commencement of each such
fiscal year. Executive will be guaranteed a minimum bonus payment of $150,000.00
during the first year of this agreement.
(c) Executive may also receive other bonus payment determined at the
sole discretion of the Board of Directors ("Discretionary Bonus")
(d) The Bonus compensation, if any, to be paid pursuant to paragraph
3(b) shall be paid as promptly as practible following the availability of the
financial statements of the Company relating to the applicable period, but in no
event later than one hundred twenty (120) days after the end of the applicable
twelve-month period.
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(e) During the Employment Period, Executive shall be entitled to
perquisites, including, without limitation, a private office, secretarial,
computer and other support services and facilities consistent with his position.
Executive shall be entitled to business class airline travel on flights over
four (4) hours duration while engaged in Company business.
(f) Executive shall also be entitled to the following benefits:
(i) 4 weeks (20 business days) of paid vacation for each twelve (12)
months of the Employment Period, or such greater period as may be approved from
time to time by the Company's its Board of Directors or the Compensation
Committee thereof; however, Executive shall not compensated for any unused
vacation days;
(ii) paid holidays as provided to the Company's other executive
employees;
(iii) participation in such employee benefit plans to which executive
employees of the Company, their dependents and beneficiaries generally are
entitled during the Employment Period and any Successive Employment Period,
including, without limitation, health insurance, disability and life insurance,
pension and profit sharing plans and other present or equivalent successor plans
and practices of the Company for which executive employees, their dependents and
beneficiaries are eligible and, in addition to the foregoing,
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such stock options or other equity incentives as the Company's Board of
Directors, in its sole discretion, may at any time grant or award to Executive;
and
(iv) reimbursement of Executive's business and professional dues.
(g) The executive shall be granted a stock option to purchase the
Company's Common Stock which shall vest on various anniversary dates; if the
Executive is still employed on those dates. Details of this option grant are set
forth on ADDENDUM A of this agreement.
4. Reimbursement of Expenses. The Company recognizes that Executive,
in performing Executive's functions, duties and responsibilities under this
Agreement, may be required to spend sums of money in connection with those
functions, duties and responsibilities for the benefit of the Company and,
accordingly, shall reimburse Executive for travel and other out-of-pocket
expenses reasonably and necessarily incurred in the performance of his
functions, duties and responsibilities hereunder upon submission of written
statements and/or bills in accordance with the then regular procedures of the
Company.
5. Disability. In the event that Executive shall be unable to
perform because of illness or incapacity, physical or mental, all the functions,
duties and responsibilities to be performed by him hereunder for a consecutive
period of three (3) months or four (4) months during any consecutive twelve (12)
month period during the Employment Period or any Successive Employment Period,
the Company may terminate this Agreement effective on or after the expiration of
such period (the "Disability Period") upon written notice to Executive
specifying the termination date (the "Disability Termination Date"). Executive
shall be entitled to receive his base Salary and a pro-rated portion of any
Bonus
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earned to the Disability Termination Date. Disability under this paragraph,
shall be determined by a physician who shall be selected by the Company and
reasonably approved by the Executive. Such approval shall not be unreasonably
withheld or delayed, and a physician shall be deemed to be approved unless he or
she is disapproved in writing by the Executive within ten (10) days after his or
her name is submitted. The Company may obtain disability income insurance for
the benefit of Executive in such amounts as the Company may determine.
6. Death. Life Insurance. In the event of the death of Executive
during the Employment Period or a Successive Employment Period, this Agreement
and the employment of Executive hereunder shall terminate on the date of death
of Executive. Executive's heirs or legal representatives shall be entitled to
receive his base Salary and a pro-rated portion of any Bonus earned to the date
of his death.
7. Termination.
(a) The Company may discharge Executive for cause at any time. Cause
for discharge shall include (I) a material breach of this Agreement by Executive
and if such breach is not cured within thirty (30) days following written notice
by the Company to Executive of such breach, assuming such breach may be cured;
(ii) Executive is convicted of any act or course of conduct involving moral
turpitude; or (iii) Executive engages in any act or course of conduct
constituting an abuse of office or authority which significantly adversely
affects the business or
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reputation of the Company. Any written notice by the Company to Executive
pursuant to this paragraph 7(a) shall set forth in reasonable detail the facts
and circumstances claimed to constitute the cause. If, during the Employment
Period or any Successive Employment Period, Executive is discharged for cause,
the Company, without any limitation on any remedies it may have at law or
equity, shall have no liability for base Salary or any other compensation and
benefits to Executive after the date of such discharge.
(b) (1) After a Change in Control (as defined below) of the Company
has occurred, all of Executive's stock options, stock appreciation rights,
restricted stock grants or stock bonuses and similar benefits shall be deemed to
vest in full on the effective date of such Change of Control, notwithstanding
any provision to the contrary in any applicable agreement or plan. If the
Company (or any successor thereto) terminates Executive's employment with the
Company within six (6) months after the Change in Control, Executive shall be
entitled to receive the sum of (1) his base Salary (but in no event less than
six (6) month's base Salary) , Bonus compensation, if any, pro-rated to the date
of termination, incentive stock compensation, benefits, perquisites and awards,
including, without limitation, immediate vesting of benefits and awards under
the Company's stock option, stock appreciation, restricted stock, stock bonus or
similar plan to the extent not theretofore vested and any Company pension or
retirement plan or program, accrued through the date Executive's
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employment with the Company would otherwise terminate pursuant to the terms
hereof (the "Termination Date"). ___ Notwithstanding the foregoing, if Executive
is offered an employment agreement ("New Agreement") by the Company within sixty
(60) days after the Change in Control having a term of not less than twelve (12)
months on terms substantially similar to those provided herein, Executive shall
not be entitled to the Termination Compensation unless within three (3) months
after Executive's acceptance of the New Agreement, Executive determines to sever
his employment relationship with the Company, in which event, the Executive
shall be entitled to the Termination Compensation. The amount of the Termination
Compensation shall be computed, at the expense of the Company, by the
independent public accountants regularly employed by the Company immediately
prior, to the Change in Control (the "Accountants"), whose computation shall be
conclusive and binding upon Executive and the Company in the absence of manifest
error.
(2) For purposes hereof, a "Change in Control" shall be deemed to
have occurred if: (i) any "person" or "group" (as such terms used in Sections
(3),3(a) (9) and 13(d) of the Securities Exchange Act of 1934, as amended (the
"Act")) other than Xxxx Xxxxxxxx, Revision LLC or any or their respective
affiliates and except for an employee stock ownership trust (or any of the
trustees thereof), becomes a "beneficial owner" (as such term is used in Rule
lad-s promulgated under the Act), after the date hereof, directly or indirectly,
of securities of the
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Company representing fifty (50%) percent or more of the combined voting power of
the Company1s then outstanding securities; (ii) a change in "control" of the
Company (as the term 'control") is defined in Rule 12b-2 or successor rule
promulgated under the Act) shall have occurred; (iii) the majority of the Board
of Directors, as such entire Board of Directors is composed as of the date
hereof, no longer serve as directors of the Company, except that there shall not
be counted toward such majority who no longer serve as directors Executive, if
elected, a director of the Company or any director who ceased to serve either
prior to the date of a Change in Control, for any reason, or at any other time
due to voluntary resignation (other than in connection with an event described
in (iv) or (v) below), death, disability or termination for cause; (iv) the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) the shareholders of the
Company approve a merger or consolidation of the Company with any other company,
other than a merger or consolidation which would result in the combined voting
power of the Company's voting securities outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty (50%) percent of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consoldation;
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provided, however, that no change in control shall be deemed to have occurred in
any plan of liquidation, sale of assets, merger or consolidation provided in
(iv) and (v) above is not consummated. Notwithstanding the foregoing, any
transaction involving a leveraged buyout or other acquisition of the Company
which would otherwise constitute a Change in Control, in which Executive
participates in the surviving or successor entity (other than solely as an
employee or consultant, shall not constitute a Change in Control).
(b)(3) Notwithstanding anything in this Agreement to the contrary,
Executive shall have the right, prior to the receipt by him of any amounts due
thereunder, to waive the receipt thereof or, subsequent to the receipt by him of
any amounts due hereunder, to treat some or all of such amounts as a loan from
the Company which Executive shall repay to the Company, within ninety (90) days
from the date of receipt, with interest at the rate provided in Section 7872 of
the Internal Revenue Code of 1986, as amended (the "Code") . Notice of any such
waiver or treatment of amounts received as a loan shall be given by Executive to
the Company in writing and shall be binding upon the Company.
4. It is intended that the "present value" of the payments and
benefits to Executive, whether under this Agreement or otherwise, which are
included in the computation of "parachute payments" shall not, in the aggregate,
exceed 2.99 times the "base amount" (the terms "present value", "parachute
payments"
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and "base amount" being determined in accordance with Section 380G of the Code)
- However, if Executive receives payments or benefits from the Company prior to
payment of the Termination Compensation which, when added to the Termination
Compensation, would, in the opinion of the Accountants, subject any of the
payments or benefits to Executive to the excise tax imposed by Section 4999 of
the Code, the Company shall be responsible for payment of such tax and shall
gross-up the payment to Executive, accordingly, so as to make the impact of such
tax neutral with respect to payments made to Executive.
8. Disclosure of Confidential Information. "Confidential
Information" means all information known by Executive, because of employment by
the Company, about the Company's business plans, present or prospective
customers, vendors, products, processes, services or activities, including the
costing and pricing of such services or activities. Confidential Information
does not include information generally known, other than through breach of a
confidentiality agreement with the Company, in the industry in which the Company
engages or may engage. Executive will not, during or after the Employment
Period, directly or indirectly, use or disclose any Confidential Information,
except in the performance of Executive's duties for the Company, or to other
persons as directed by the Company. Executive will use reasonable efforts to
prevent unauthorized use or disclosure of Confidential Information. Upon
termination of employment with the Company, Executive will deliver to the
Company all writings
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relating to or containing Confidential Information, including, without
limitation, notes, memoranda, letters, drawings, diagrams, and printouts,
including any tapes, discs or other forms of recorded information. If Executive
violates any provision of this paragraph during or after the Employment Period
or any Successive Employment Period, the Company specifically reserves the
right, in appropriate circumstances, to seek full indemnification from Executive
should the Company suffer any monetary damages or incur any legal liability to
any person as a result of the disclosure or use of confidential Information by
Executive in violation of this paragraph.
9. Restrictive Covenant. Upon termination of the Employment Period
or any Successive Employment Period, Executive shall not for a period of one (1)
year following the date of termination of the Employment Period or Successive
Employment Period, (herein the "Restriction Period"), directly or indirectly, in
any capacity, engage in or participate in the management, ownership or operation
of any business or activity which directly or indirectly competes with the
business conducted by the Company, except in the States of North and South
Dakota, Idaho, Montana and Alaska ___ Without limiting the generality of the
foregoing, during the Restriction Period, Executive shall not (i) employ or
solicit the employment of any person who was employed by the Company at the date
of termination of the Employment Period or Successive Employment Period, or
during the one (1) year prior thereto, or (ii) solicit any customer of the
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Company which produced Net Revenue for the Company in excess of $2,000 per month
during said one (1) year period. Executive recognizes and hereby acknowledges
that the restrictions imposed upon Executive in this paragraph are reasonable
and are necessary for the protection of the business of the Company; provided,
however, that Executive may own not more than five percent (5%) of the
outstanding securities of any class of any corporation engaged in any such
business, if such securities are listed on a national securities exchange or
regularly traded in the over-the- counter market by a member of a national
securities association.
10. Ownership of Inventions. Discoveries and Improvements.
Executive shall promptly disclose in writing to the Board of Directors of the
Company all inventions, discoveries, and improvements conceived, devised,
created, or developed by Executive in connection with his employment
(collectively, Invention"), and Executive shall transfer and assign to the
Company all right, title and interest in and to any such Invention, including
any and all domestic and foreign patent rights, domestic and foreign copyright
rights therein, and any renewal thereof. Such disclosure is to be made promptly
after the conception of each Invention, and each Invention is to become and
remain the property of the Company, whether or not patent or copyright
applications are filed thereon by the Company. Upon request of the Company,
Executive shall execute from time to time during or after the termination of
employment such further instruments including, without limitations, applications
for
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patents and copyrights and assignments thereof as may be deemed necessary or
desirable by the Company to effectuate the provisions of this paragraph.
11. Construction. If the provisions of paragraph 9 should be deemed
unenforceable, invalid, or overbroad in whole or in part for any reason, than
any court of competent jurisdiction designated in accordance with paragraph 13
is hereby authorized, requested, and instructed to reform such paragraph to
provide for the maximum competitive restraint upon Executive's activities (in
time, product, geographic area and customer or employee solicitation) which may
then be legal and valid.
12. Damages and Jurisdiction.
(a) Executive agrees that violation of or threatened violation of any
of paragraphs 9, 10 or 11 would cause irreparable injury to the Company for
which any remedy at law would be inadequate, and the Company shall be entitled
in any court of law or equity of competent jurisdiction to preliminary,
permanent and other injunctive relief against any breach or threatened breach of
the provisions contained in any of said paragraphs 9, 10 or 11 hereof, and such
compensatory and punitive damages as shall be awarded. Further, in the event of
a violation of the provisions of paragraph 10, the Restriction Period referred
to therein shall be extended for a period of time equal to the period that any
violation occurred.
13. Jurisdiction and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the
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State of New Jersey. The Company and Executive hereby each consents to the
jurisdiction of the Superior Court of the State of New Jersey for the County of
Passaic or the United States District Court for the District of New Jersey with
respect to any dispute arising under the terms of this Agreement and further
consents that any process or notice of motion therewith may be served by
certified or registered mail or personal service, within or without the State of
New Jersey, provided a reasonable time for appearance is allowed.
14. Indemnification. To the fullest extent permitted by and subject
to the Company's Certificate of Incorporation, By- Laws and New Jersey Law, the
Company shall indemnify and hold harmless the Executive against any losses,
damages or expenses (including reasonable attorney's fees) incurred by him or on
his behalf in connection with any threatened or pending action, suit or
proceeding in which he is or becomes a party by virtue of his employment by the
Company or any of its affiliates or by reason of his having served as a director
of any other corporation at the express request of the Company or by reason of
any action alleged to have been taken or omitted in such capacity.
15. Severability. If any provision of this Agreement is held to be
invalid, illegal, or unenforceable, that determination will not affect the
enforceability of any other provision of this Agreement, and the remaining
provisions of this Agreement will be valid and enforceable according to their
terms.
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16. Successors to the Company. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of the Company and
any successor of the Company, including, without limitation, any corporation
acquiring, directly or indirectly, all or substantially all of the assets of the
Company, whether by merger, consolidation, sale or otherwise (and such successor
shall thereafter be deemed embraced within the term (the "Company" for the
purposes of this Agreement) , but shall not otherwise be assignable by the
Company. The services to be provided by Executive hereunder may not be
delegated.
17. Miscellaneous.
(a) This Agreement constitutes the entire understanding of the
parties with respect to the subject hereof, may be modified only in writing, is
governed by laws of New Jersey, without giving effect to the principles of
conflict of laws thereof, and will be binding and inure to the benefit of
Executive and Executive's personal representatives, and the Company, its
successors and assigns.
(b) If Executive should die while any amount would still be payable
to him under this Agreement if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Executive's devisee, legatee or other designee or, if there be
no such designee, to his Estate.
(a) The failure of any of the parties hereto to enforce any provision
hereof on any occasion shall not be deemed
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to be a waiver of any provision or succeeding breach of such provision or any
other provision.
(d) Any notice under this Agreement shall be given by registered or
certified mail, return receipt requested, directed to the address set forth
above, unless notice of a new address has been sent pursuant to the terms of
this paragraph.
(e) In furtherance and not in limitation of the foregoing, this
Agreement supersedes any employment agreement, between the Company and Executive
and any such agreement hereby is terminated and is no longer binding on either
party.
18. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first mentioned.
COMPANY:
TOTAL-TEL USA COMMUNICATIONS,INC.
By: /s/ SalvatoreQuadrino
----------------------------
Title: Acting Chief Operating
Officer
EXECUTIVE:
---------------------------------
A. XXXX XXXXX, JR.
