TERMINATION AGREEMENT
This Termination Agreement, made as of this 30th day of September,
1997 by and between U.S. WATS, INC., a New York corporation with offices at
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 (the
"Company") and XXXXX X. X'XXXX, residing at 00 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000 (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive are parties to an Executive
Employment Agreement made as of the 16th day of December, 1996, amended as of
January 10, 1997 (as so amended, the "Employment Agreement"); and
WHEREAS, the Company and the Executive are desirous of terminating
the Employment Agreement effective immediately;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company and the Executive agree that the Execu
tive's employment by the Company is terminated as of September 30, 1997 and
that Execu tive's resignation from the Company's board of directors will be
tendered and accepted on the day this Agreement is executed by all parties.
Executive shall sign promptly upon request all documents reasonably required
to transition his duties and responsibilities to other persons designated by
the Company.
2. Severance. Notwithstanding the termination of Executive's
employment with the Company, the Company shall pay the Executive the sum of
$66,666.68 upon execution of this Termination Agreement, in two (2) equal
installments of $33,333.34 due on October 10, 1997 and December 1, 1997.
3. Options. All of the stock options granted by the Company to
Executive, whether or not those stock options have vested, shall terminate as
of the date hereof, except that options to purchase up to 100,000 shares of
the Company's Common Stock at an exercise price of $1.03125 per share, granted
to Executive pursuant to an Amended and Restated Stock Option Agreement dated
as of January 10, 1997, shall continue in effect until March 31, 1998. The
common stock issuable upon exercise of such stock options shall be registered
with the Securities and Exchange Commission in order to permit public sale of
such shares. The options not exercised shall terminate on March 31, 1998.
4. Confidentiality. The provisions of section 8 of the Employment
Agreement shall survive this Termination Agreement.
5. Indemnification. The Company agrees to indemnify fully and
hold harmless Executive from any claim or liability resulting from claims of
third parties arising out of the performance of his duties under the
Employment Agreement, including the litigation pending in the United States
District Court for the Eastern District of Pennsylvania captioned Xxxx Xxxxxx
v. U.S. Wats, Inc., Civil Action No. 97-4051. The Company's obligations
hereunder shall include all expenses of defending Executive in connection with
any such claim or liability, as well as providing Executive with counsel
reasonably acceptable to him and to the Company. Nothing in this paragraph
shall obligate the Company to indemnify or hold harmless Executive for claims
or liability arising out of deliberate wrongdoing by Executive as determined
by a court of competent jurisdiction. The Company shall advance the expenses
of defending Executive until such time as a court of competent jurisdiction
determines that Executive has engaged in deliberate wrongdoing. Executive
shall promptly repay the Company all expenses advanced on his behalf upon a
finding by a court of competent jurisdiction that he has engaged in deliberate
wrongdoing. Nothing in this paragraph shall be deemed to affect any coverage
or obligation under any directors' and officers' liability insurance policy
maintained by the Company for the benefit of officers and directors of the
Company, including Executive.
6. Repayment. Executive shall pay to the Company upon execution
hereof the sum of $1,100. Executive will further return to the Company all
computers, cellular telephones, pagers, safety deposit box keys and other
property of the Company that are in his possession.
7. Release. The Company and the Executive each waive, release and
forever discharge one another of and from any and all past or present causes
of action, suits, agreements or other claims which one may have against the
other upon or by reason of any matter, cause or thing whatsoever arising out
of Executive's employment by the Company and each promises not to file a
lawsuit to assert such claims; provided, however, that this release shall not
apply to the obligations set forth in this Termination Agreement.
8. Business Goodwill. At all times following the date hereof,
Executive shall make no comments or take any other actions, direct or
indirect, that will reflect adversely on the Company or its officers,
directors, employees or agents in such capacity or adversely affect their
respective business reputations or goodwill. At all times following the date
hereof, the Board of Directors, each director and each officer of the Company
and Xxxxxxx Xxxxxx and Xxxxx Xxxxx shall make no comments or take any other
actions, direct or indirect, that will reflect adversely on Executive or
adversely affect his business reputation or goodwill.
9. Entire Agreement. This Termination Agreement contains the
entire agreement of the parties.
10. Applicable Law. This Termination Agreement shall be construed
according to the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this
Termination Agreement the day and year aforesaid.
U.S. WATS, INC.
By:_________________________________
____________________________________
Xxxxxxx Xxxxxx
____________________________________
Xxxxx X. Xxxxx
____________________________________
Xxxxx X. X'Xxxx
