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EXHIBIT 10.22
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of December 14, 1998, between WORLD ACCESS, INC., a Delaware
corporation f/k/a WAXS INC. (the "Company"), and XXXXXX X. XXXX (the
"Employee"), an individual resident of the State of Georgia.
1. Term. The term (the "Term") of this Agreement shall begin on
the date hereof (the "Effective Date") and shall continue in effect for a period
of three (3) years from the Effective Date (the "Initial Term"); provided,
however, the Term shall be extended automatically for an additional year (each
an "Additional Term") on each anniversary of the Effective Date unless either
party hereto gives written notice to the other party not to so extend at least
ninety (90) days prior thereto, in which case no further extension shall occur;
provided further, however, that notwithstanding any such notice by the Company
not to extend, the Term shall not expire prior to the expiration of twenty-four
(24) months after the occurrence of a Change in Control (as hereinafter
defined).
2. Employment and Duties. The Employee shall serve as the
Chairman of the Company's board of directors, reporting only to the board, and
shall have such powers and duties as may from time to time be prescribed by the
board, provided that such duties are consistent with the Employee's position as
a senior executive of the Company. The Company shall provide the Employee with a
private office, secretarial and administrative assistance, office equipment,
supplies and other facilities and services suitable to the Employee's position.
3. Salary. For all services to be rendered by the Employee
pursuant to this Agreement, the Company hereby agrees to pay the Employee a base
salary at an annual rate of $625,000.00 per year (the "Base Salary"), payable in
accordance with the Company's payroll practices in effect from time to time. Any
increase in Base Salary or other compensation granted by the compensation
committee of the Company's board of directors shall in no way limit or reduce
any other obligation of the Company hereunder. Once established at an increased
specified rate, the Base Salary hereunder shall not thereafter be reduced, and
the term Base Salary used in this Agreement shall refer to the Base Salary as so
increased.
4. Bonus. In addition to his Base Salary, in the discretion of
the Company's board of directors, the Employee may be awarded for each calendar
year during the Term an annual bonus (an "Annual Bonus") either pursuant to a
bonus or incentive plan of the Company or otherwise on terms no less favorable
than those awarded to other executive officers of the Company.
5. Benefits. The Employee shall be entitled to all benefits and
conditions of employment provided by the Company to its executive officers,
including, without limitation, insurance, participation in the Company's
vacation policy, and participation in any stock option or incentive compensation
plans, pension, profit sharing or other retirement plans, subject (in each case)
to the terms of such plans and any provisions, rules, regulations and laws
applicable to such plans.
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6. Most Favorable Terms. Notwithstanding anything herein to the
contrary, each of the Base Salary, Annual Bonus and benefits, including, without
limitation, the grant of any stock options, warrants or stock appreciation
rights and any amounts payable upon termination of employment or other rights or
benefits accruing in connection therewith, to which the Employee is entitled
pursuant to the terms of this Agreement shall be at least as favorable to the
Employee as the highest of each of the salary, bonus and benefits payable by the
Company to the Company's Chief Executive Officer or to Xxxx X. Xxxxxxxx in
whatever capacity (whether pursuant to an employment agreement or otherwise).
7. Reimbursement for Business Expenses. The Employee shall be
reimbursed for all reasonable out-of-pocket business expenses incurred by him in
the direct performance of his duties during his employment with the Company
pursuant to the terms of this Agreement and in accordance with the Company's
policies in effect from time to time. All requests for reimbursement shall be
substantiated by invoices and other pertinent data reasonably satisfactory to
the Company.
8. Performance. The Employee shall devote all of his working time
and efforts to the business and affairs of the Company and to the diligent,
faithful and competent performance of the duties and responsibilities assigned
to him pursuant to this Agreement, except for vacations, weekends and holidays.
Notwithstanding the foregoing, the Employee may render charitable, civic and
outside board services so long as such services do not materially interfere with
the Employee's ability to discharge his duties, including, without limitation,
such outside services as the Employee is currently performing.
9. Non-Disclosure of Proprietary Information; Non-Competition;
Non-Solicitation.
9.1. Confidential Information; Trade Secrets. As used in
this Agreement, the term "Confidential Information" shall mean
valuable, non-public, competitively sensitive data and information
relating to the Company's business or the business of any entity
affiliated with the Company, other than Trade Secrets (as defined
below). "Confidential Information" shall include, among other things,
information specifically designated as a Trade Secret that is,
notwithstanding the designation, determined by a court of competent
jurisdiction not to be a "trade secret" under applicable law. As used
in this Agreement, the term "Trade Secrets" shall mean information or
data of or about the Company or any entity affiliated with the Company,
including, without limitation, technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial plans,
product plans, or lists of actual or potential customers or suppliers,
that (i) derive economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from their disclosure
or use; and (ii) are subject of efforts that are reasonable under the
circumstances to maintain their secrecy. To the extent that the
foregoing definition is
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inconsistent with a definition of "trade secret" under applicable law,
the foregoing definition shall be deemed amended to the extent
necessary to render it consistent with applicable law.
9.2. Non-Disclosure. The Employee will be exposed to Trade
Secrets and Confidential Information as a result of his employment by
the Company as provided in this Agreement. The Employee acknowledges
and agrees that any unauthorized disclosure or use of any of the Trade
Secrets or Confidential Information of the Company would be wrongful
and would likely result in immediate and irreparable injury to the
Company. In consideration of the Employee's right to employment (or
continued employment) under the terms of this Agreement, except as
appropriate in connection with the performance of his obligations under
this Agreement, the Employee shall not, without the express prior
written consent of an officer of the Company other than the Employee,
redistribute, market, publish, disclose or divulge to any other person
or entity, or use or modify for use, directly or indirectly, in any way
for any person or entity (i) any Confidential Information during the
Term of this Agreement and for a period of two (2) years after the
final date of the Term of this Agreement; and (ii) any Trade Secrets at
any time (during or after the Term of this Agreement) during which such
information or data shall continue to constitute a "trade secret" under
applicable law. The Employee agrees to cooperate with any reasonable
confidentiality requirements of the Company. The Employee shall
immediately notify the Company of any unauthorized disclosure or use of
any Trade Secrets or Confidential Information of which the Employee
becomes aware.
9.3. Non-Competition. The Employee shall not, either
directly or indirectly, alone or in partnership, be connected or
concerned with or participate in any other competing business or
pursuit during any employment by the Company, except that the Employee
may own up to three percent of the outstanding securities of a
competing business the securities of which are registered with the
Securities and Exchange Commission if such company is subject to the
periodic reporting requirements of the Securities Exchange Act of 1934,
as amended (the "1934 Act").
9.4. Non-Solicitation. For a period of one (1) year
immediately following any termination of the Employee's employment, the
Employee will not solicit, or participate in any solicitation of, the
customers, suppliers, employees or representatives of the Company (or
any of its subsidiaries or affiliated companies) to breach any contract
with the Company, terminate any relationship with the Company or leave
the Company. For purposes of this Agreement, customers shall be limited
to actual customers or actively-sought prospective customers of the
Company or any subsidiary or affiliate of the Company with whom the
Employee has had substantial contact during the Term of this Agreement.
10. Certain Definitions.
10.1. Accrued Compensation. For purposes of this Agreement,
"Accrued Compensation" shall mean an amount which shall include all
amounts earned or accrued through the "Termination Date" (as
hereinafter defined) but not paid as of the Termination Date,
including, without limitation, (i) Base Salary, (ii) reimbursement for
reasonable and necessary expenses
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incurred by the Employee on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, (iv) bonuses,
including, without limitation, any Annual Bonus, and incentive
compensation, and (v) all other amounts to which the Employee is
entitled under any compensation plan of the Company at the times such
payments are due.
10.2. Base Amount. For purposes of this Agreement, "Base
Amount" shall mean the Employee's annual Base Salary at the highest
rate in effect on, or at any time during the ninety (90) day period
prior to, the Termination Date and shall include all amounts of the
Employee's Base Salary that are deferred under any qualified and
non-qualified employee benefit plans of the Company or any other
agreement or arrangement.
10.3. Cause. For purposes of this Agreement, a termination
of employment is for "Cause" if the Employee has been convicted of a
felony or a felony prosecution has been brought against the Employee or
if the termination is evidenced by a resolution adopted in good faith
by two-thirds (2/3) of the Company's board of directors that the
Employee (i) intentionally and continually failed substantially to
perform his reasonably assigned duties with the Company (other than a
failure resulting from the Employee's incapacity due to physical or
mental illness or from the Employee's assignment of duties that would
constitute "Good Reason" (as hereinafter defined)) which failure
continued for a period of at least thirty (30) days after a written
notice of demand for substantial performance has been delivered to the
Employee specifying the manner in which the Employee has failed
substantially to perform, or (ii) intentionally engaged in illegal
conduct or gross misconduct which results in material economic harm to
the Company; provided, however, that (A) where the Employee has been
terminated for Cause because a felony prosecution has been brought
against him and no conviction or plea of guilty or plea of nolo
contendere or its equivalent results therefrom, then said termination
shall no longer be deemed to have been for Cause and the Employee shall
be entitled to all the benefits provided by Section 11.1(i) hereof from
and after the date on which the prosecution of the Employee has been
dismissed or a judgement of acquittal has been entered, whichever shall
first occur; and (B) no termination of the Employee's employment shall
be for Cause as set forth in clause (ii) above until (x) there shall
have been delivered to the Employee a copy of a written notice setting
forth that the Employee was guilty of the conduct set forth in clause
(ii) and specifying the particulars thereof in detail, and (y) the
Employee shall have been provided an opportunity to be heard in person
by the Company's board of directors (with the assistance of the
Employee's counsel if the Employee so desires). No act, or failure to
act, on the Employee's part shall be considered "intentional" unless
the Employee has acted or failed to act with a lack of good faith and
with a lack of reasonable belief that the Employee's action or failure
to act was in the best interests of the Company. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted
by the Company's board of directors or upon the instructions of any
senior officer of the Company or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the
Company. Any termination of the Employee's employment by the Company
hereunder shall be deemed to be a termination other than for Cause
unless it meets all requirements of this Section 10.3.
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10.4. Change in Control. For purposes of this Agreement, a
"Change in Control" shall have occurred if:
(i) a majority of the directors of the Company
shall be persons other than persons: (A) for whose election
proxies shall have been solicited by the Company's board of
directors, or (B) who are then serving as directors appointed
by the Company's board of directors to fill vacancies on the
board of directors caused by death or resignation (but not by
removal) or to fill newly-created directorships;
(ii) a majority of the outstanding voting power
of the Company shall have been acquired or beneficially owned
(as defined in Rule 13d-3 under the 1934 Act or any successor
rule thereto) by any person (other than the Company, a
subsidiary of the Company or the Employee) or Group (as
defined below), which Group does not include the Employee; or
(iii) there shall have occurred:
(A) a merger or consolidation of the Company
with or into another corporation (other than (1) a
merger or consolidation with a subsidiary of the
Company or (2) a merger or consolidation in which (a)
the holders of voting stock of the Company
immediately prior to the merger as a class continue
to hold immediately after the merger at least a
majority of all outstanding voting power of the
surviving or resulting corporation or its parent and
(b) all holders of each outstanding class or series
of voting stock of the Company immediately prior to
the merger or consolidation have the right to receive
substantially the same cash, securities or other
property in exchange for their voting stock of the
Company as all other holders of such class or
series);
(B) a statutory exchange of shares of one or
more classes or series of outstanding voting stock of
the Company for cash, securities or other property;
(C) the sale or other disposition of all or
substantially all of the assets of the Company (in
one transaction or a series of transactions); or
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(D) the liquidation or dissolution of the
Company;
unless more than twenty-five percent (25%) of the voting stock
(or the voting equity interest) of the surviving corporation
or the corporation or other entity acquiring all or
substantially all of the assets of the Company (in the case of
a merger, consolidation or disposition of assets) or of the
Company or its resulting parent corporation (in the case of a
statutory share exchange) is beneficially owned by the
Employee or a Group that includes the Employee.
10.5. Group. For purposes of this Agreement, "Group" shall
mean any two or more persons acting as a partnership, limited
partnership, syndicate, or other group acting in concert for the
purpose of acquiring, holding or disposing of voting stock of the
Company.
10.6. Disability. For purposes of this Agreement,
"Disability" shall mean a physical or mental infirmity which impairs
the Employee's ability to substantially perform his duties with the
Company for a period of one hundred eighty (180) consecutive days and
the Employee has not returned to his full time employment prior to the
Termination Date as stated in the "Notice of Termination" (as
hereinafter defined).
10.7. Good Reason.
10.7.1. For purposes of this Agreement, "Good
Reason" shall mean a good faith determination by the Employee,
in the Employee's sole and absolute judgment, that any one or
more of the following events has occurred, without the
Employee's express written consent:
(i) the assignment to the Employee of
any duties inconsistent with the Employee's position
(including, without limitation, status, titles and
reporting requirements), authority, duties or
responsibilities as in effect immediately prior to
the date hereof, or any other action by the Company
that results in a material diminution in such
position, authority, duties or responsibilities,
excluding for this purpose isolated and inadvertent
action not taken in bad faith and remedied by the
Company promptly after receipt of notice thereof
given by the Employee;
(ii) a reduction by the Company in the
Employee's Base Salary, as the same may be increased
from time to time, or a change in the eligibility
requirements or performance criteria under any bonus,
incentive or compensation plan, program or
arrangement under which the Employee is covered
immediately prior to the Termination Date which
adversely affects the Employee;
(iii) any failure to pay the Employee any
compensation or benefits to which he is entitled
within five (5) days of the date due;
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(iv) the Company's requiring the
Employee to be based anywhere other than within fifty
(50) miles of the Employee's job location as of the
date hereof, except for reasonably required travel on
the Company's business which is not greater than such
travel requirements prior to the date hereof;
(v) the taking of any action by the
Company that would materially adversely affect the
physical conditions existing in or under which the
Employee performs his employment duties;
(vi) the insolvency or the filing (by
any party, including the Company) of a petition for
bankruptcy by the Company;
(vii) any purported termination of the
Employee's employment for Cause by the Company which
does not comply with the terms of Section 10.3
hereof; or
(viii) any breach by the Company of any
provision of this Agreement.
10.7.2. The Employee's right to terminate his
employment pursuant to this Section 10 shall not be affected
by his incapacity due to physical or mental illness.
10.8. Notice of Termination. For purposes of this
Agreement, "Notice of Termination" shall mean a written notice of
termination from the Company of the Employee's employment which
indicates the specific termination provision in this Agreement relied
upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated.
10.9. Termination Date. For purposes of this Agreement,
"Termination Date" shall mean, in the case of the Employee's death, his
date of death, in the case of the Employee's voluntary termination, the
last day of employment, and in all other cases (other than in the case
of a successor or an assignee, which is provided for in Section 15.1
hereof), the date specified in the Notice of Termination; provided,
however, that if the Employee's employment is terminated by the Company
for Cause or due to Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice
of Termination is given to the Employee; and provided further that in
the case of Disability the Employee shall not have returned to the
full-time performance of his duties during such period of at least
thirty (30) days.
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11. Benefits and Payments Upon Termination of Employment.
11.1. Compensation and Benefits. If, during the term of
this Agreement, the Employee's employment with the Company shall be
terminated, the Employee shall be entitled to the following
compensation and benefits in the following circumstances:
(i) If the Employee's employment with the
Company shall be terminated (A) by the Company for Cause or
Disability or (B) by reason of the Employee's death, then the
Company shall pay to the Employee all Accrued Compensation.
(ii) If the Employee's employment with the
Company shall be terminated by the Company pursuant to Section
14.2 hereof, then the Employee shall be entitled to the
following:
(A) the Company shall pay the Employee all
Accrued Compensation;
(B) the Company shall pay the Employee as
severance pay and in lieu of any further compensation
for periods subsequent to the Termination Date an
amount in cash equal to two (2) times the Base
Amount;
(C) for twenty-four (24) months or such
longer period as may be provided by the terms of the
appropriate program, practice or policy, the Company
shall, at its expense, continue on behalf of the
Employee and his dependents and beneficiaries the
life insurance, disability, medical, dental and
hospitalization benefits generally made available to
the Company's executive officers at any time during
the 90-day period prior to the Termination Date or at
any time thereafter, provided that (1) the Company's
obligation hereunder with respect to the foregoing
benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a
subsequent employer's benefit plans, in which case
the Company may reduce the coverage of any benefits
it is required to provide the Employee hereunder as
long as the aggregate coverages and benefits of the
combined benefit plans are no less favorable to the
Employee than the coverages and benefits required to
be provided hereunder, and (2) this clause (C) shall
not be interpreted so as to limit any benefits to
which the Employee or his dependents or beneficiaries
may be entitled under any of the Company's employee
benefit plans, programs or practices following the
Employee's termination of employment, including,
without limitation, retiree medical and life
insurance benefits;
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(D) the restrictions on any outstanding
incentive awards (including, without limitation,
restricted stock and granted performance shares or
units) under any incentive plan or arrangement shall
lapse and such incentive award shall become 100%
vested, all stock options, warrants and stock
appreciation rights granted to the Employee on or
prior to the date of this Agreement shall become
immediately exercisable and 100% vested and,
notwithstanding anything to the contrary contained in
the plan, agreement or other instrument relating to
such stock option, warrant or stock appreciation
rights with regard to the period of time within which
such stock option, warrant or stock appreciation
rights must be exercised following the Employee's
termination of employment or provision of services to
the Company, all such stock options, warrants and
stock appreciation rights may be exercised at any
time and from time to time until the one (1) year
anniversary of the Termination Date, and all
performance units granted to the Employee shall
become 100% vested; and
(E) the Company shall, at its sole expense
as incurred, provide for a twenty-four (24) month
period following the Termination Date the Employee
with reasonable office space and secretarial
assistance.
(iii) If the Employee's employment with the
Company shall be terminated by the Employee pursuant to
Section 14.3 hereof, then (A) the restrictions on any
outstanding incentive awards (including, without limitation,
restricted stock and granted performance shares or units)
under any incentive plan or arrangement shall lapse and such
incentive award shall become 100% vested, all stock options,
warrants and stock appreciation rights granted to the Employee
on or prior to the date of this Agreement shall become
immediately exercisable and 100% vested and, notwithstanding
anything to the contrary contained in the plan, agreement or
other instrument relating to such stock option, warrant or
stock appreciation rights with regard to the period of time
within which such stock option, warrant or stock appreciation
rights must be exercised following the Employee's termination
of employment or provision of services to the Company, all
such stock options, warrants and stock appreciation rights may
be exercised at any time and from time to time until the one
(1) year anniversary of the Termination Date, and all
performance units granted to the Employee shall become 100%
vested, and (B) the Company shall, at its sole expense as
incurred, provide for a twenty-four (24) month period
following the Termination Date the Employee with reasonable
office space and secretarial assistance.
(iv) The amounts provided for in subsections
11.1(i) and 11.1(ii)(A) and (B) shall be payable to the
Employee in substantially equal bi-weekly installments for a
twenty-four (24) month period commending on the Termination
Date and otherwise in accordance with the Company's payroll
practices in effect from time to time.
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(v) The Employee shall not be required to
mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, and no
such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any
subsequent employment, except as provided in subsection
11.1(ii)(C).
11.2. No Severance. The severance pay and benefits provided
for in this Section 11 shall be in lieu of any other severance or termination
pay to which the Employee may be entitled under any Company severance or
termination plan, program, practice or arrangement; provided, however, if the
Employee would be entitled to the severance pay and benefits under that certain
Severance Protection Agreement dated as of November 1, 1997 by and between World
Access, Inc. and the Employee (the "Severance Protection Agreement"), then the
severance pay and benefits provided for in the Severance Protection Agreement
shall be in lieu of the severance pay and benefits provided for in this Section
11.
11.3. Other Compensation and Benefits. The Employee's
entitlement to any other compensation or benefits shall be determined in
accordance with the Company's employee benefit plans and other applicable
programs, policies and practices then in effect.
12. Excise Tax Payments.
12.1. Excise Tax. Notwithstanding anything contained herein
to the contrary, if any portion of the payments and benefits provided hereunder
and benefits provided to, or for the benefit of, the Employee under any other
plan or agreement of the Company (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or would be nondeductible by the Company pursuant to
Section 280G of the Code, the Payments shall be reduced (but not below zero) if
and to the extent necessary so that no portion of any Payment to be made or
benefit to be provided to the Employee shall be subject to the Excise Tax or
shall be nondeductible by the Company pursuant to Section 280G of the Code (such
reduced amount is hereinafter referred to as the "Limited Payment Amount").
Unless the Employee shall have given prior written notice specifying a different
order to the Company to effectuate the Limited Payment Amount, the Company shall
reduce or eliminate the Payments by first reducing or eliminating those payments
or benefits, if any, which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with payments
or benefits which are to be paid the farthest in time from the Determination (as
hereinafter defined). Any notice given by the Employee pursuant to the
immediately preceding sentence shall take precedence over the provisions of any
other plan, arrangement or agreement governing the Employee's rights and
entitlements to any benefits or compensation.
12.2. Initial Determination. An initial determination as to
whether the Payments shall be reduced to the Limited Payment Amount and the
amount of such Limited Payment Amount shall be made by a nationally-recognized
accounting firm selected by the Company and
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reasonably acceptable to the Employee (the "Accounting Firm"). The Accounting
Firm shall provide its determination (the "Determination"), together with
detailed supporting calculations and documentation, to the Company and the
Employee within thirty (30) days of the Termination Date and if the Accounting
Firm determines that no Excise Tax is payable by the Employee with respect to a
Payment or Payments, it shall furnish the Employee with an opinion reasonably
acceptable to the Employee that no Excise Tax will be imposed with respect to
any such Payment or Payments. Within ten (10) days of the delivery of the
Determination to the Employee, the Employee shall have the right to dispute the
Determination (the "Dispute"). If there is no Dispute, the Determination shall
be binding, final and conclusive upon the Company and the Employee subject to
the application of Section 12.3 below.
12.3. Final Determination. As a result of the uncertainty
in the application of Sections 4999 and 280G of the Code, it is possible that
the Payments to be made to, or provided for the benefit of, the Employee either
have been made or will be made by the Company which, in either case, will be
inconsistent with the limitations provided in Section 12.1 (hereinafter referred
to as an "Excess Payment" or "Underpayment", respectively). If it is established
pursuant to a final determination of a court of competent jurisdiction or an
Internal Revenue Service (the "IRS") proceeding which has been finally and
conclusively resolved that an Excess Payment has been made, such Excess Payment
shall be deemed for all purposes to be a loan to the Employee made on the date
the Employee received the Excess Payment, and the Employee shall repay the
Excess Payment to the Company on demand (but not less than ten (10) days after
written notice is received by the Employee), together with interest on the
Excess Payment at the "Applicable Federal Rate" (as defined in Section 1274(d)
of the Code) from the date of the Employee's receipt of such Excess Payment
until the date of such repayment. In the event that it is determined by (i) the
Accounting Firm, the Company (which shall include the position taken by the
Company, or together with its consolidated group, on its federal income tax
return) or the IRS, (ii) pursuant to a determination by a court of competent
jurisdiction, or (iii) upon the resolution, to the Employee's satisfaction, of
the Dispute, that an Underpayment has occurred, the Company shall pay an amount
equal to the Underpayment to the Employee within ten (10) days of such
determination or resolution, together with interest on such amount at the
Applicable Federal Rate from the date such amount would have been paid to the
Employee until the date of payment.
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13. One Million Dollar Deduction Limit.
13.1. Section 162(m). Notwithstanding anything contained
herein to the contrary, if any portion of the Payments would be nondeductible by
the Company pursuant to Section 162(m) of the Code, the Payments to be made to
the Employee in any taxable year of the Company shall be reduced (but not below
zero) if and to the extent necessary so that no portion of any Payment to be
made or benefit to be provided to the Employee in such taxable year of the
Company shall be nondeductible by the Company pursuant to Section 162(m) of the
Code. The amount by which any Payment is reduced pursuant to the immediately
preceding sentence, together with interest thereon at the Applicable Federal
Rate, shall be paid by the Company to the Employee on or before the fifth
business day of the immediately succeeding taxable year of the Company, subject
to the application of the limitations of the immediately preceding sentence and
this Section 13. Unless the Employee shall have given prior written notice
specifying a different order to the Company to effectuate this Section 13, the
Company shall reduce or eliminate the Payments in any one taxable year of the
Company by first reducing or eliminating those payments or benefits which are
not payable in cash and then by reducing or eliminating cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Section 162(m) Determination (as hereinafter
defined). Any notice given by the Employee pursuant to the immediately preceding
sentence shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Employee's rights and entitlements to any
benefits or compensation.
13.2. Section 162(m) Determination. The determination as to
whether the Payments shall be reduced pursuant to Section 13.1 hereof and the
amount of the Payments to be made in each taxable year after the application of
Section 13.1 hereof shall be made by the Accounting Firm at the Company's
expense. The Accounting Firm shall provide its determination (the "Section
162(m) Determination"), together with detailed supporting calculations and
documentation, to the Company and the Employee within thirty (30) days of the
Termination Date. The Section 162(m) Determination shall be binding, final and
conclusive upon the Company and the Employee.
14. Termination. The Employee's employment hereunder may
be terminated without any breach of this Agreement only in accordance with this
Section 14.
14.1. Termination by the Company for Cause. The
Company may terminate the Employee's employment at any time
for Cause by providing to the Employee a Notice of
Termination, whereupon the Employee shall be entitled to all
of the benefits and payments provided for under Section 11
hereof.
14.2. Termination by the Company without Cause.
The Company may terminate the Employee's employment at any
time without Cause by providing to the Employee a Notice of
Termination, whereupon the Employee shall be entitled to all
of the benefits and payments provided for under Section 11
hereof.
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14.3. Termination by the Employee. The Employee's
employment may be terminated by the Employee at any time by providing
the Company with notice of such termination and specifying in the
notice the effective date of such termination, which shall not be less
than one hundred twenty (120) days after giving such notice, whereupon
the Employee's employment shall terminate on the date specified in such
notice and the Employee shall be entitled to all of the benefits and
payments provided for under Section 11 hereof; provided, however, that
following receipt of such notice, the Company may specify, in its
discretion, the date on which the Employee's employment shall terminate
so long as the date so specified is not more than one hundred twenty
(120) days after the date on which the Employee shall have given
notice, in which case the Employee's employment shall terminate on the
date so specified by the Company.
14.4. Termination Upon Disability. The Company may
terminate the Employee's employment upon the Disability of the Employee
by providing to the Employee a Notice of Termination, whereupon the
Employee shall be entitled to all of the benefits and payments provided
for under Section 11 hereof.
14.5. Death. In the event of the Employee's death during
his employment hereunder, the Employee's employment shall be
automatically terminated.
15. Successors and Assigns.
15.1. Assumption and Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its successors and
assigns, and the Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) or assign, by agreement in form
and substance satisfactory to the Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession or assignment shall be a
breach of this Agreement and shall entitle the Employee to compensation from the
Company in the same amount and on the same terms as he would be entitled to
hereunder if his employment had been terminated pursuant to Section 14.2 hereof,
except that for purposes of implementing the foregoing, the date on which any
such succession or assignment becomes effective shall be deemed the Termination
Date hereunder. As used in the Agreement, Company shall mean the Company as
hereinbefore defined and any successor or assign that executes and delivers the
agreement provided for in this Section 15.1 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
15.2. Rights of Employee. This Agreement and all rights of
the Employee hereunder shall inure to the benefit of and be enforceable by the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Employee should
die while any amounts would still be payable to him hereunder if he had
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continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devise,
legatee or other designee or, if there be no such designee, to the Employee's
estate.
16. Injunctive Relief. The Company and the Employee agree that
damages are an inadequate remedy for, and that the Company or any successor to
the business of the Company would be irreparably harmed by, any breach of
Section 9 of this Agreement, and that the Company, any successor to the business
of the Company or any permitted assignee of the Company shall be entitled to
equitable relief in the form of a preliminary or permanent injunction upon any
breach of Section 9 hereof.
17. Notices. For the purpose of this Agreement, notices and all
other communications to either party hereunder provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person or mailed by first-class mail or airmail, postage prepaid, addressed:
If to the Employee:
Xx. Xxxxxx X. Xxxx
000 X. Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
If to the Company:
World Access, Inc.
000 X. Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
or to such other address(es) as either party may have furnished to the other
party in writing in accordance with this Section.
18. Miscellaneous. No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver (i) is agreed
to in writing and is signed by the Employee and a representative of the Company,
its successor or permitted assignee and (ii) has been approved by the board of
directors of the Company, its successor or any permitted assignee of the
Company. No waiver by either party to this Agreement at any time of breach by
the other party of, or compliance by the other party with, any condition or
provision of this Agreement to be performed by the other party shall be deemed
to be a waiver of similar or dissimilar provisions or conditions at the same or
any prior or subsequent time. No agreements or representations, oral or
otherwise, expressed or implied, with respect to the subject matter of this
Agreement have been made by either party that are not expressly set forth in
this Agreement.
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19. Validity. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of the other provisions of this Agreement, which other provisions shall remain
in full force and effect, nor shall the invalidity or unenforceability of a
portion of any provision of this Agreement affect the validity or enforceability
of the balance of such provision.
20. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
21. Headings. The headings of the paragraphs contained in this
document are for reference purposes only and shall not, in any way, affect the
meaning or interpretation of any provision of this Agreement.
22. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws, and not the choice
of law rules, of the State of Georgia.
23. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof, other than the provisions of
Section 9 hereof, shall, on the written request of one party served upon the
other, be settled by binding arbitration in Xxxxxx County, Georgia in accordance
with the commercial arbitration rules then recognized by the American
Arbitration Association, and judgment upon the award rendered may be entered and
enforced in any court having jurisdiction thereof.
24. Fees and Expenses. The Company shall pay all legal fees and
related expenses incurred by the Employee as they become due as a result of or
in connection with (i) the Employee's termination of employment (including,
without limitation, all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment), (ii) the Employee seeking to
obtain or enforce any right or benefit provided by this Agreement (including,
without limitation, any such fees and expenses incurred in connection therewith)
or by any other plan or arrangement maintained by the Company under which the
Employee is or may be entitled to receive benefits, (iii) the Employee's hearing
before the Company's board of directors as contemplated in Section 10.3 of this
Agreement, and (iv) any tax audit or proceeding to the extent attributable to
the application of any Excise Tax with respect to any Payment or Payments
hereunder, plus in each case interest on any delayed payment at the "Applicable
Federal Rate," as defined in Section 1274(d) of the Code, as then in effect.
25. Entire Agreement. Other than the Severance Protection
Agreement, which shall continue in full force and effect until the Termination
Date, this Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior agreements (if any), understandings and arrangements
(oral or written) between the parties hereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and delivered by its duly authorized officer, and the Employee has
executed and delivered this Agreement, all as of the date first written above.
WORLD ACCESS, INC.
By:
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Xxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
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XXXXXX X. XXXX
