EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
January 1, 1998 by and between WorldPort Communications, Inc. a Delaware
Corporation ("WorldPort" or the "Company"), and Xx. Xxxx X. Xxxxx (hereinafter
referred to as the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to have the benefit of the Executive's efforts
and services;
WHEREAS, the Executive is willing to commit himself to serve the Company,
on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the Executive
wish to enter into an employment agreement on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "ACCRUED BENEFITS" shall mean the amount payable not later
than ten (10) days following an applicable Termination Date, which shall be
equal to the sum of the following amounts:
(i) All salary earned or accrued through the Termination
Date;
(ii) Reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and
necessary expenses incurred by the Executive through the Termination
Date;
(iii) Any and all other cash benefits previously earned
through the Termination Date and deferred at the election of the
Executive or pursuant to any deferred compensation plans then in
effect;
(iv) All other payments and benefits to which the Executive
may be entitled under the terms of any benefit plan of the Company or
otherwise, including, but not limited to, any bonus declared by the
Board, any compensation for earned, but unused, vacation days, and any
unpaid automobile allowance.
(b) "AFFILIATE" shall have the same meaning as given to that
term in Rule 12b-2 of Regulation 12B promulgated under the Securities
Exchange Act of 1934, as amended.
(c) "BOARD" shall mean the Board of Directors of the Company
(d) "DISABILITY" shall mean a physical or mental condition
whereby the Executive is unable to perform on a full-time, continuous basis
the customary duties of the Executive under this Agreement.
(e) "NOTICE OF TERMINATION" shall mean the notice described in
Section 9 hereof;
(f) "TERMINATION DATE" shall mean, except as otherwise provided
in Section 8 hereof,
(i) The Executive's date of death;
(ii) Thirty (30) days after the delivery of the Notice of
Termination terminating the Executive's employment on account of
Disability pursuant to Subsection 8(b) hereof, unless the Executive
returns on a full-time basis to the performance of Executive's duties
prior to the expiration of such period;
(iii) Thirty (30) days after the delivery of the Notice
of Termination if the Executive's employment is terminated by the
Executive voluntarily; and
(iv) Fifteen (15) days after the delivery of the Notice of
Termination if the Executive's employment is terminated by the Company
for any reason other than death or Disability.
2. EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive hereby
agrees to serve the Company, on the terms and conditions set forth herein.
3. TERM.
The Company's employment of the Executive under the provisions of this
Agreement shall commence on the date hereof and end on the second anniversary of
the Closing, unless further extended or sooner terminated as hereinafter
provided. On the second anniversary of the Closing and on the last day of
January of each year thereafter, the term of the Executive's employment shall,
unless sooner terminated as hereinafter provided, be automatically extended for
an additional one year period from the date thereof unless, at least thirty (30)
days before such date, the Company shall have delivered to the Executive or the
Executive shall have delivered to the Company written notice that the term of
the Executive's employment hereunder will not be extended beyond its existing
duration.
4. POSITIONS AND DUTIES.
The Executive shall serve as Chairman and Chief Executive Officer of
WorldPort Communications, Inc. and in such additional capacities as may be
reasonably assigned to the Executive by the Board. In his capacity as Chairman
and Chief Executive Officer of the Company, the Executive shall have such
duties, responsibilities and authority as are usual and customary for executives
who hold the same or a substantially similar position with companies of
comparable size in the same industry as the Company. In connection with any
capacities, the Executive shall have such duties, responsibilities and authority
as may from time to time be reasonably assigned to the Executive by the Board.
The Executive shall devote substantially all the Executive's working time and
efforts to the business and affairs of the Company.
5. PLACE OF PERFORMANCE.
In connection with the Executive's employment by the Company, the Executive
shall be based in Chicago, Illinois except for required travel on Company
business, and except as otherwise agreed-to between the Executive and the
Company.
6. COMPENSATION AND RELATED MATTERS.
(a) Commencing on the date hereof, and during Executive's
employment, the Company shall pay to the Executive an annual salary of
$300,000 per annum payable at a rate of $16,666 per month for the first 12
months ($19,166 for the second 12 months) and $8,333 per month, in accrual,
for the first 12 months ($9,583 for the second 12 months) for the purchase
of shares in the Company, at a share price of $2.00, up to a maximum of
108,000 shares. The Board, in its sole discretion, may increase the annual
salary of the Executive based upon satisfactory performance and the
Executive's salary may be increased from time to time in accordance with
normal business practices of the Company at the full discretion of the
Board.
(b) During the Executive's employment, the Executive shall
receive an annual performance bonus equal to 50% of the Executive's monthly
salary.
(c) During the Executive's employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing services hereunder,
including all business, travel, and living expenses while away from home on
business or at the request of and in the service of the Company, provided
that such expenses are incurred and accounted for in accordance with the
Company's policies and procedures.
(d) The Executive shall be entitled to the number of vacation
days in each calendar year, and to compensation for earned but unused
vacation days, determined in accordance with the Company's vacation plan or
policy. The Executive shall also be entitled to all paid holidays provided
by the Company to its other executives.
(e) The Executive shall be entitled to such other benefits,
including, but not limited to, medical insurance, life insurance, and
disability insurance determined in accordance with the Company's benefit
plan or policy.
(f) Commencing on the date hereof, the Executive shall be granted
500,000 (five hundred thousand) shares of the Company's common stock under
the Company's Long Term Incentive Plan.
(g) During the Executive's employment, the Executive shall receive a
monthly car allowance of $400.
7. OFFICES.
The Executive agrees to serve without additional compensation, if elected
or appointed thereto, as a member of the Board or as a member of the board of
directors of any subsidiary of the Company; provided, however, that the
Executive is indemnified for serving in any and all such capacities to the
fullest extent provided by applicable law.
8. TERMINATION
(a) As a result of death: If the Executive shall die during the
term of this Agreement, the Executive's employment shall terminate on the
Executive's date of death, and the Executive's surviving spouse, or the
Executive's estate if the Executive dies without a surviving spouse, shall
be entitled to the Executive's Accrued Benefits as of the Termination Date.
(b) As a result of Disability: If, as a result of the
Executive's Disability, the Executive shall have been unable to perform the
Executive's duties hereunder on a full-time, continuous basis for two (2)
consecutive months or for an aggregate of three (3) months within any
twelve (12) month period and if within thirty (30) days after the Company
provides the Executive with a Termination Notice, the Executive shall not
have returned to the performance of the Executive's duties on a full-time
basis, the Company may terminate the Executive's employment, subject to
Section 9 hereof. During the term of the Executive's Disability prior to
termination, the Executive shall continue to receive all salary and
benefits payable under Section 6 hereof, including participation in all
employee benefit plans, programs, and arrangements in which the Executive
was entitled to participate immediately prior to the Disability; provided,
however, that the Executive's continued participation is permitted under
the terms and provisions of such plans, programs, and arrangements. In the
event that the Executive's participation in any such plan, program, or
arrangement is barred as the result of such Disability, the Executive shall
be entitled to receive an amount equal to the contributions, payments,
credits, or allocations which would have been paid by the Company to the
Executive, to the Executive's account, or on the Executive's behalf under
any such plan, program, or arrangement. In the event the Executive's
employment is terminated on account of the Executive's Disability in
accordance with this Section 8, the Executive shall receive the Executive's
Accrued Benefits as of the Termination Date and shall remain eligible for
all benefits provided by any long-term disability program of the Company in
effect at the time of such termination. The payment of the Accrued
Benefits by the Company to the Executive shall be in addition to, and not
in lieu of, any benefits payable by reason of the Executive's Disability to
the extent provided under any long-term disability program of the Company
in effect at the time of the Executive's termination, or under any
disability insurance policy, or otherwise.
(c) Termination Without Cause: Either party to this Agreement
may terminate the Executive's employment hereunder without cause at any
time upon notice to the other party, and upon any such termination, the
Executive shall be entitled to receive his Accrued Benefits. In the event
that the Company terminates the Executive's employment pursuant to this
Subsection 8(c), the Executive shall receive from the Company on the
Termination Date a lump-sum cash payment (the "Severance Payment"), as
severance, in an amount equal to one hundred percent (100%) of the greater
of (i) the Executive's annual salary at the time of such termination, or
(ii) the Executive's annual salary, as set forth in Subsection 6(a) hereof.
(d) Termination as a result of cause. The Company may terminate the
Executive for cause, upon the occurrence of any one or more of the
following acts or omissions:
(i) The determination in a binding and final judgment, order, or
decree by a court or administrative agency of competent jurisdiction,
that the Executive has engaged in fraudulent conduct, and the
determination by the Board, in its sole discretion, that such
fraudulent conduct has a significant adverse impact on the Company;
(ii) The conviction of the Executive on a felony or misdemeanor
involving moral turpitude (as evidenced by a binding and final
judgment, order, or decree of a court of competent jurisdiction) and
the determination by the Board, in its sole discretion, that such
conviction has a significant adverse impact on the Company;
(iii) The refusal by the Executive to perform the
Executive's duties or responsibilities (unless significantly changed
without the Executive's consent) and after notice from the Company to
the Executive, the Executive's continuing refusal to perform his
duties or responsibilities during the 48-hour period following the
giving of such notice;
(iv) The performance by the Executive of his duties or
responsibilities in a manner constituting gross negligence (unless
such duties or responsibilities have been significantly changed
without the Executive's consent).
(v) In the event of termination for cause, as set forth above,
the Executive will be entitled to receive his Accrued Benefits, but
will not be entitled to the Severance Payment, except as otherwise
provided by Delaware law.
9. TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of Termination to
the Executive, if such Notice of Termination is delivered by the Company, and to
the Company, if such Notice of Termination is delivered by the Executive. The
Notice of Termination shall indicate the specific termination provision in this
Agreement relied upon and shall set forth the Termination Date.
10. NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes, the
manufacturing of products, or the performance of services, which involve
experimental and inventive work and that the success of its business depends
upon the protection of such processes, products, and services by patent,
copyright, or secrecy and that the Executive has had, or during the course of
Executive's engagement as an employee or consultant may have, access to
Proprietary Information, as hereinafter defined, of the Company and that the
Executive has furnished, or during the course of the Executive's engagement may
furnish, Proprietary Information to the Company, the Executive agrees that:
(a) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not patentable or
copyrightable, and any other information of a secret, proprietary,
confidential, or generally undisclosed nature relating to the Company, its
products, customers, processes, and services, including information
relating to testing research, development, manufacturing, marketing, and
selling, disclosed to the Executive or otherwise made known to the
Executive as a consequence of or through the Executive's engagement by the
Company (including information originated by the Executive) in any
technological area previously developed by the Company or developed,
engaged in, or researched, by the Company during the term of the
Executive's engagement, including, but not limited to, trade secrets,
processes, products, formulae, apparatus, techniques, know-how, marketing
plans, data, improvements, strategies, forecasts, customer lists, and
technical requirements of customers, unless such information is in the
public domain to such an extent as to be readily available to the
Company's competitors.
(b) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information, and the Executive hereby
assigns all rights that the Executive might otherwise possess in any
Proprietary Information to the Company. Except as required in the
performance of the Executive's duties to the Company, the Executive will
not at any time during or after the term of the Executive's engagement,
which term shall include any time in which the Executive may be retained by
the Company as a consultant, directly or indirectly use, communicate,
disclose, or disseminate any Proprietary Information.
(c) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary Information made or
compiled by the Executive at any time or made available to the Executive
prior to or during the term of Executive's engagement by the Company,
including any and all copies thereof, shall be the property of the Company,
shall be held by the Executive in trust solely for the benefit of the
Company, and shall be delivered to the Company by the Executive on the
termination of the Executive's engagement or at any other time on the
request of the Company.
(d) The Executive will not assert any rights under any
inventions, copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or acquired by
the Executive prior to the Executive's being engaged by the Company or
during the term of the Executive's engagement if based on or otherwise
related to Proprietary Information.
11. ASSIGNMENT OF INVENTIONS.
(a) For purposes of this Section 11, the term "Inventions" shall
mean discoveries, concepts, and ideas, whether patentable or copyrightable
or not, including, but not limited to, improvements, know-how, data,
processes, methods, formulae, and techniques, as well as improvements
thereof, or know-how related thereto, concerning any past, present, or
prospective activities of the Company, which the Executive makes,
discovers, or conceives (whether or not during the hours of the Executive's
engagement or with the use of the Company's facilities, materials, or
personnel), either solely or jointly with others during the Executive's
engagement by the Company or any Affiliate of the Company and, if based on
or related to Proprietary Information, at any time after termination of
such engagement. All Inventions shall be the sole property of the Company,
and the Executive agrees to perform the provisions of this Section 11 with
respect thereto without the payment by the Company of any royalty or any
consideration therefor, other than the regular compensation paid to the
Executive in his capacity of as an employee or consultant.
(b) The Executive shall maintain written notebooks in which the
Executive shall set forth, on a current basis, information as to the
Inventions, describing in detail the procedures employed and the results
achieved, as well as information as to any studies or research projects
undertaken on the Company's behalf. The written notebooks shall at all
times be the property of the Company and shall be surrendered to the
Company upon termination of the Executive's engagement or, upon request of
the Company, at any time prior thereto.
(c) The Executive shall apply, at the Company's request and
expense, for United States and foreign letters patent or copyrights, either
in the Executive's name or otherwise as the Company shall desire.
(d) The Executive hereby assigns to the Company all of the
Executive's rights to the Inventions and to applications for United States
and/or foreign letters patent or copyrights and to United States and/or
foreign letters patent or copyrights granted in respect of the Inventions.
(e) The Executive shall acknowledge and deliver promptly to the
Company, without charge to the Company, but at its expense, such written
instruments (including applications and assignments) and do such other
acts, such as giving testimony in support of the Executive's inventorship,
as may be necessary in the opinion of the Company to obtain, maintain,
extend, reissue, and enforce United States and/or foreign letters patent
and copyrights relating to the Inventions and to vest the entire right and
title thereto in the Company or its nominee. The Executive acknowledges and
agrees that any copyright developed or conceived of by the Executive during
the term of the Executive's employment which is related to the business of
the Company shall be a "work for hire" under the copyright law of the
United States and other applicable jurisdictions.
(f) The Executive represents that the Executive's performance of
all of the terms of this Agreement and as an employee of or consultant to
the Company does not and will not breach any trust existing prior to the
Executive's employment by the Company. The Executive agrees not to enter
into any agreement, either written or oral, in conflict herewith and
represents and agrees that the Executive has not brought and will not bring
with the Executive to the Company or use in the performance of the
Executive's responsibilities at the Company any materials or documents of a
former employer which are not generally available to the public, unless the
Executive has obtained written authorization from the former employer for
their possession and use, and the Executive has provided a copy of such
written authorization to the Company.
(g) No provision of this Section 11 shall be deemed to limit the
restrictions applicable to the Executive under Section 10 hereof.
12. SHOP RIGHTS.
The Company shall also have the royalty-free right to use in its business,
and to make, use, and sell products, processes, and/or services derived from any
inventions, discoveries, concepts, and ideas, whether or not patentable,
including, but not limited to, processes, methods, formulas, and techniques, as
well as improvements thereof or know-how related thereto, concerning any past,
present, or prospective activities of the Company, which are not within the
scope of Inventions as defined in Section 11 hereof, but which are conceived or
made by the Executive during the period that the Executive is engaged by the
Company with the use or assistance of the Company's facilities, materials, or
personnel.
13. NON-COMPETE.
The Executive hereby agrees that during the Executive's employment, and for
a period of six months from the termination thereof, the Executive will not,
without the written consent of the Company:
(a) Within any jurisdiction or marketing area in which the
Company or any subsidiary thereof is doing business, own, manage, operate,
or control any Business, provided, however, that for purposes of this
Subsection 13(a), ownership of securities of not in excess of five percent
(5%) of any class of securities of a public company shall not be considered
as owning, managing, operating, or controlling any Business; or
(b) Within any jurisdiction or marketing area in which the
Company or any subsidiary thereof is doing business, act as, or become
employed as, an officer, director, employee, consultant or agent of any
Business; or
(c) Solicit any Business for, or sell any products that are in
competition with the Company's products to, any company, which is a
customer or client of the Company or any of its subsidiaries as of the
Termination Date; or
(d) Solicit the employment of, or hire, any full time employee
employed by the Company or its subsidiaries as of the Termination Date.
The term "Business," as used in this Section 13, shall mean any person
or entity which is an international facilities-based telecommunications
carrier or any of the services which are necessarily provided by an
international facilities-based telecommunications carrier to its customers.
14. REMEDIES AND JURISDICTION.
(a) The Executive hereby acknowledges and agrees that a breach
of the agreements contained in Section 13 of this Agreement will cause
irreparable harm and damage to the Company, that the remedy at law for the
breach or threatened breach of the agreements set forth in Section 13 of
this Agreement will be inadequate, and that, in addition to all other
remedies available to the Company for such breach or threatened breach
(including, without limitation, the right to recover damages), the Company
shall be entitled to injunctive relief for any breach or threatened breach
of the agreements contained in Section 13 of this Agreement.
(b) All claims, disputes and other matters in question between
the parties arising under this Agreement, except those pertaining to
Section 13 hereof, shall, unless otherwise provided herein, be decided by
arbitration in the State of Delaware in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association (including such procedures governing selection of the specific
arbitrator or arbitrators), unless the parties otherwise agree. The
Company shall pay the costs of any such arbitration. The award by the
arbitrator or arbitrators shall be final, and judgment may be entered upon
it in accordance with applicable law in any state or federal court having
proper jurisdiction.
15. INDEMNIFICATION.
The Company agrees to indemnify and hold the Executive harmless from and
against any and all losses, liabilities, or costs (including, but not limited
to, reasonable attorney's fees), which the Executive may sustain, incur, or
assume as a result of, or relative to, any allegation, claim, civil or criminal
action, proceeding, charge, or prosecution, which may be alleged, made,
instituted, or maintained against the Executive or the Company, jointly or
severally, arising out of or based upon the Executive's employment with the
Company, to the fullest extent permitted by applicable law including, but not
limited to, any injury to person(s) or damage to property or business by reason
of any cause whatsoever, regardless of whether any such injury or damage is
caused by negligence on the part of the Executive. THIS INDEMNITY PROVISION IS
INTENDED TO INDEMNIFY THE EXECUTIVE (A) AGAINST THE CONSEQUENCES OF HIS OWN
NEGLIGENCE OR FAULT, REGARDLESS OF WHETHER THE EXECUTIVE IS SOLELY NEGLIGENT OR
CONTRIBUTORILY, PARTIALLY, JOINTLY, COMPARATIVELY, OR CONCURRENTLY NEGLIGENT
WITH ANY OTHER PERSON, AND (B) AGAINST ANY LIABILITY OF THE EXECUTIVE BASED ON
APPLICABLE DOCTRINE OF STRICT LIABILITY. Not withstanding the foregoing, the
Company will not, however, indemnify the Executive for any claims, liabilities,
losses, damages or expenses that result solely from bad faith, gross negligence
or willful misconduct by the Executive.
16. ATTORNEYS' FEES.
The Company shall reimburse the Executive for any and all costs incurred by
the Executive in connection with any legal proceedings in connection with the
Executive's rights or obligations under this Agreement, including reasonable
attorneys' fees, together with interest thereon as provided by applicable law.
17. SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators, heirs, or beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive under
this Agreement shall be paid to the Executive's surviving spouse, if the
Executive dies without a surviving spouse, to the Executive's estate. This
Agreement shall inure to the benefit of, be binding upon, and be enforceable by
or against, any successor, surviving or resulting corporation, or other entity
or any assignee of the Company to which all or substantially all of the business
and assets of the Company is transferred whether by merger, consolidation,
exchange, assignment, sale, lease, or other disposition or action.
18. ENFORCEMENT.
The provisions of this Agreement shall be regarded as divisible, and if any
of such provisions or any part hereof is declared invalid or unenforceable by a
court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or the parts hereof and the applicability thereof
shall not be affected thereby.
19. AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except by
written instrument executed by both the Company and the Executive.
20. SURVIVABILITY.
The provisions of Sections 10, 11, 12, 13 and 15 hereof and the provisions
hereof relating to the payment of the Accrued Benefits and the Severance Payment
shall survive the termination of this Agreement.
21. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the Executive and
the Company with respect to the subject matter hereof and supersedes all prior
oral or written agreements, negotiations, commitments, and understandings with
respect thereto.
22. GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of the Executive
and the Company hereunder shall be governed by and construed in accordance with
the laws of the State of Delaware without giving effect to the provisions,
principles, or policies thereof relating to choice of law or conflict of laws.
23. NOTICE.
Notices given pursuant to this Agreement shall be in writing and shall be
deemed given when received, and if mailed, shall be mailed by United States
registered or certified mail, return receipt requested, postage prepaid, if to
the Company, to:
WorldPort Communications, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
with a copy to corporate counsel for the Company to:
XxXxxxxxx, Will & Emory
Attn: Xxxxx Xxxxxx
000 Xxxx Xxxxxx Xx.
Xxxxxxx, XX 00000
000-000-0000
or to such other address as the Company shall have given to the Executive or, if
to the Executive, to:
Xxxx X. Xxxxx
000 Xxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
000-000-0000
or to such other address as the Executive shall have given to the Company.
24. NO WAIVER.
No waiver by either party at any time of any breach by the other party of,
or any failure by the other party to comply with, any condition or provision of
this Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or at any prior
or subsequent time.
25. HEADINGS.
The headings herein contained are for reference only and shall not affect
the meaning or interpretation of any provision of this Agreement.
26. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and the Executive has executed this Agreement, on
the date and year first above written.
THE COMPANY:
WORLDPORT COMMUNICATIONS, INC.
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
EXECUTIVE:
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
