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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, is made and entered into as of the third
day of January, 1995, by and between SFMT, Inc., a Delaware corporation (the
"Corporation"), and Xxxxxx X. Xxxxxxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Employee has substantial experience in the
telecommunications industry in soles and marketing; and
WHEREAS, the Corporation desires to employ the Employee, and the
Employee desires to be employed by the Corporation, in accordance with the terms
and provisions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Employment
(a) The Corporation hereby employs the Employee, and the Employee hereby
accepts such employment, on the terms, and subject to the conditions herein
contained.
(b) The Employee shall by secondment agreement be assigned to work at
SFMT-Hermes ("SFMT-Hermes"), a subsidiary of the Corporation, or Hermes Europe
Railtel B.V. ("Hermes Europe"), a subsidiary of SFMT-Hermes, as the Vice
President and Director of Sales and Marketing of Hermes Europe. In his capacity
as Vice President and Director of Sales and Marketing of Hermes Europe, the
Employee shall report to and shall perform such duties and exercise such power
and authority as may from time to time be delegated to him by Managing Director
of Hermes Europe.
(c) The Employee shall devote all of his business time and attention and
his best efforts to the performance of his duties pursuant to this Employment
Agreement.
(d) Initially, the Employee shall be required to reside in Brussels and
work from the Corporation's or Hermes' offices in Brussels. The Corporation
reserves the right to require that the Employee will move to and reside in and
operate from the offices of the Corporation's or Hermes Europe in another city
within the region in which Hermes Europe operates.
2. Term. The initial term of the employment of the Employee under this
Employment Agreement shall be Two (2) years, commencing on January 3, 1995, and
continuing, unless sooner terminated pursuant to Section 9 to and including
January 2, 1997. Thereafter this Agreement shall be automatically renewed
annually for successive one year periods, unless either party hereto shall
deliver written notice in accordance with Section 9 to the other party at least
three (3) months prior to the date of termination of the initial term or any
extension or renewal thereof (the "Term") of its desire to terminate such
employment (a "Notice of Termination").
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3. Compensation.
(a) During the initial Term, the Employee shall be paid a salary at the
rate of One Hundred Sixty Thousand Dollars ($160,000) per annum, payable in
accordance with the Corporation's customary payroll practices for employees.
(b) Thereafter, at the end of each year Chief Executive Officer of the
Corporation shall review the salary of the Employee, and shall make such
adjustments to such salary as the Chief Executive Officer shall, in its sole and
absolute discretion, deem appropriate.
(c) For the purposes of this Agreement, "Salary" shall mean any payment by
the Corporation to the Employee pursuant to this Section 3.
4. Bonus.
(a) After the Employee has been employed by the Corporation for a period
of eighteen (18) months, and as additional compensation to the Employee
hereunder, the Employee will be assessed for eligibility to receive a
discretionary bonus (the "Bonus") in respect of the initial employment period.
Subject to the provisions of Section 4(b), the initial target for such Bonus,
based on the achievement by Hermes Europe of the objectives shall be thirty
percent (30%) of the Salary of the Employee earned during the initial employment
period. The first bonus shall be in respect of two years ("the Initial Bonus"),
payable in accordance with Section 4(c). The potential Initial Bonus shall be
subject to the achievement of the performance objectives set forth in the
approved Hermes Europe Business Plan.
(b) The formula or other method for determining the Bonus for the Employee
in each subsequent fiscal year shall be determined by the Corporation and shall
be based upon the performance of Hermes Europe in such fiscal year as compared
with the Hermes Europe approved business plan for such fiscal years. The amount
of the Bonus paid to the Employee in respect of any fiscal year of the
Corporation shall be subject to the sole and absolute discretion of Chief
Executive Officer of the Corporation. The objectives for each fiscal year and
the amount of bonus for successful completion of objectives (as a percentage of
base salary or other formula declared for the period) shall be established
during the period between twelve (12) and fifteen (15) months prior to the
fiscal year for which such objectives apply (e.g., October 1 - December 31, 1994
for fiscal year 1996).
(c) All Bonuses in respect of any fiscal year of the Hermes Europe shall
be paid within thirty (30) days after the issuance of the audited financial
statements of Hermes Europe for such fiscal year.
5. Equity Participation
(a) SFMT-Hermes has adopted a Stock Option Plan (the "Option Plan") for
its senior executives. Subject to the provisions of the Plan, SFMT-Hermes shall
grant to the Employee options to purchase shares of Capital Stock of SFMT-Hermes
("Capital Stock"). The number of shares of Capital Stock which shall be subject
to the option shall be an amount equal to one and one-half percent (1.5%) of the
outstanding shares of SFMT-Hermes to be determined at January 2, 1996. The
options granted to the Employee shall be granted and vest as follows:
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(i) options to purchase 33.33% (one-third) of the shares of Capital
Stock shall be granted on January 3, 1996 and vest as at the close of
business on January 2, 1997;
(ii) options to purchase 33.33% (one-third) of the shares of Capital
Stock shall be granted on January 3, 1997 and vest as at the close of
business of January 2,1998; and
(iii) options to purchase 33.33% (one-third) of the shares of
Capital Stock shall be granted on January 3, 1998 and vest as at the close
of business on January 2, 1999.
6. Benefits.
(a) During the Term, the Employee shall be entitled to receive such
benefits and to participate in such employee group benefit plans as are
generally provided by the Corporation, or made available by the Corporation, to
its executive officers, including without limitation, but subject to the
conditions imposed by the carriers, any medical, health, disability and life
insurance policies.
(b) During the Term, the Corporation or Hermes Europe shall provide to the
Employee, at the Corporation's expense, use of a late model automobile
appropriate in the geographic location of Employee's residence, and acceptable
to the Corporation.
(c) During the Term, the Corporation or Hermes Europe shall provide
business class transportation to and from the United States for one trip per
annum for Employee and Employee's immediate family living with Employee in
Brussels.
(d) During the initial first Two (2) years of the Term, the Corporation or
Hermes Europe shall provide to the Employee a furnished residence in Brussels.
The Corporation or Hermes Europe shall provide for the relocation of Employee's
household goods to Brussels from their location in either Paris or New Jersey;
provided, Employee notifies the Corporation in writing prior to January 2, 1996
of Employee's election to have such household goods moved; provided, however,
that neither the Corporation nor Hermes Europe shall provide for the relocation
of Employee's household goods if either the Corporation or Employee provides a
Notice of Termination in accordance with Section 2 of this Agreement on or
before July 2, 1996, or the employment of the Employee is otherwise terminated.
In the event that Employee elects to have his household goods moved, the
Corporation or Hermes Europe shall provide an unfurnished apartment in the city
in which Employee is required to reside. Any relocation costs and expenses shall
be in accordance with the Corporation's policies for relocation expenses;
provided, however, that such costs and expenses shall not exceed Employee's
Salary for one month.
(e) The Corporation or Hermes Europe shall pay to the Employee during the
Term an amount per annum as shall compensate the Employee for tax equalization
in connection with the requirement that the Employee reside outside the United
States for so long as the Employee is required to live outside the United
States. Such tax equalization shall apply to Salary and Bonus and any other
payments made to Employee deemed taxable in the foreign jurisdiction where
Employee is required to reside. SFMT will also be responsible for the
preparation and filing of your domestic and international income taxes.
(f) The Employee shall be paid an amount equal to Seven percent (7%) of
the Employee's Salary as a cost of living adjustment in connection with
requirement that the Employee reside in Brussels for so long as the Employee is
required to live in Brussels.
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7. Expense Reimbursement
(a) During the Term, the Corporation shall reimburse the Employee for all
reasonable expenditures actually and necessarily paid or incurred by the
Employee in the course of and pursuant to the business of the Corporation. Such
reimbursement shall be subject to the submission to the Corporation by the
Employee of appropriate documentation and/or vouchers, and shall be made in
accordance with the customary procedures of the Corporation for expense
reimbursement, as may from time to time be established.
(b) Should the Corporation provide Employee with a credit card, Employee
acknowledges complete personal responsibility for all charges made on such
credit card. Any charges received by the Corporation for expenses not documented
on a approved expense report may be deducted by the Corporation from the
Executives payroll check. Upon termination of this Agreement, non approved
charges shall be deducted from the last payroll check issued to the Employee.
8. Vacation. In each fiscal year of the Corporation during the Term, the
Employee shall be entitled to Four (4) weeks vacation time, which shall not be
cumulative from year to year without the prior written consent of the
Corporation or unless the Employee shall be unable to take such vacation due to
Employee's duties under this Agreement; provided, however, that to the extent
the Employee cannot take vacation time during the Term due to his
responsibilities under this Agreement, upon termination, Employee shall be
entitled to be compensated for accrued but unused vacation time.
9. Termination.
(a) Notwithstanding anything to the contrary contained in this Agreement,
the Corporation shall at all times have the right to terminate this Agreement
and the employment of the Employee hereunder for "Cause" by written notice to
the Employee in accordance with Section 15. For the purpose of this Agreement,
the term "Cause" shall mean any action of the Employee or any failure to act by
the Employee which constitutes:
(i) fraud, embezzlement or any felony in connection with the
Employee's duties as an executive officer of the Corporation or any
subsidiary or affiliate of the Corporation, or willful misconduct or the
commission of any other act which causes or may reasonably be expected to
cause substantial economic or reputational injury to the Corporation or
any such subsidiary or affiliate of the Corporation, including any
violation of the Foreign Corrupt Practices Act, as described in Section 13
of this Agreement;
(ii) continuing conflict of interest or continuing failure to follow
reasonable directions or instructions of the Board of Directors or Chief
Employee Officer of the Corporation. A conflict of interest or a failure
to follow directions of the Board of Directors or the Chief Employee
Officer of the Corporation shall be deemed to be continuing if the
Employee shall have received written notice thereof and shall have not
terminated the conflict of interest or failure to follow directions within
Thirty (30) days after receipt of such notice; or
(iii) an extended period of absence by the Employee from the
performance of the obligations of the Employee provided hereunder, which
absence shall be for a reason other than a disability, and which has not
been approved in writing advance by the Board of
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Directors or the Chief Employee Officer of the Corporation.
(b) Notwithstanding anything to the contrary contained in this Agreement,
the Corporation, by written notice to the Employee, shall at all times have the
right to terminate this Agreement and the employment of the Employee hereunder
if the Employee shall experience a "Total Disability." For the purpose of this
Agreement, the term "Total Disability" shall mean any mental or physical
illness, condition, disability or incapacity as shall:
(i) prevent the Employee from reasonably discharging his services
and employment duties hereunder;
(ii) be attested to in writing by a physician acceptable to the
Corporation; and
(iii) continue during any period of Three (3) consecutive months or
for periods aggregating three months in any twelve-month period.
A Total Disability shall be deemed to have occurred on the last day of
such applicable three-month period.
(c) This Agreement shall terminate automatically upon the date of the
death of the Employee.
10. Payments upon Termination.
(a) If the Corporation shall terminate the employment of the Employee
under this Agreement pursuant to Section 9 (a) hereof, or if the employment of
the Employee hereunder shall be terminated by the Employee other than in
accordance with Section 2 hereof, then, in any such event, the Corporation shall
have no obligation to pay to the Employee his Salary or any other compensation
or benefits provided under this Agreement for any period after the date of such
termination, or to pay any Bonus for the year in which such termination occurs;
provided, however, that the Corporation shall pay all Salary earned by the
Employee prior to the date of such termination and the reimbursement of all
expenses incurred by the Employee prior to the date of such termination in
accordance with Section 7 hereof. Upon a termination pursuant to Section 9 (a)
or by the Employee, all options and restricted shares granted to Employee
pursuant to Section 5 shall immediately be canceled and no further options shall
vest.
(b) If the employment of the Employee hereunder shall terminate pursuant
to Sections 9 (b) or (c) hereof, if the employment of the Employee shall be
terminated by the Corporation in accordance with Section 2 hereof, or if the
Employee shall be terminated by the Corporation other than in accordance with
the provisions of this Agreement, the Corporation shall pay to the Employee or
his Estate, as the case may be, the Salary and Bonus for the fiscal year in
which such termination occurs, prorated for the number of weeks during which the
Employee was employed by the Corporation during such fiscal year.
(c) In the event that the Corporation terminates the employment of the
Employee by delivering notice in accordance with Section 2, or for any reason
other than those set forth in Section 9 above, the Employee shall receive as
severance an amount equal to the greater of (i) three (3) months salary, and
(ii) the amount of salary that would have been payable to the Employee form the
date of Notice of Termination until the end of the Term, had the Corporation not
delivered such Notice of Termination. Such severance pay shall be paid in equal
monthly installments,
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commencing the month following such termination, and shall be payable in
accordance with the Corporation's customary practices for employees.
(d) In the event that the employment of the Employee is terminated due to
a Total Disability or the death of the Employee in accordance with Section 9
(b) or 9 (c) hereof, then the Employee or his designated beneficiary, as the
case may be, shall be entitled to receive such amounts as are provided for in
any disability policy or life insurance policy provided by the Corporation for
the benefit of the Employee.
11. Covenants of the Employee. In order to induce the Corporation to enter
into this Agreement and employ the Employee hereunder, the Employee hereby
covenants and agrees as follows:
(a) During the Term and for a period of Twelve (12) months thereafter, the
Employee shall not, without the prior written consent of the Corporation:
(i) directly or indirectly acquire or own in any manner any interest
in any person, firm, partnership, corporation, association or other entity
which competes with the Corporation or any of its affiliates or
subsidiaries; or
(ii) be employed by, or serve as an employee, agent, officer,
director of, any person, firm, partnership, corporation association which
competes with the Corporation or any of its affiliates or subsidiaries.
The foregoing provisions of this Section 11(a) shall not prevent the Employee
from acquiring and/or owning not more than nine per cent of the equity or debt
securities of any company which has securities listed for trading on a
recognized securities exchange or are regularly traded in the National
Association of Securities Dealers Automated Quotation System.
(b) The Employee shall not at any time, other than in the ordinary course
of business of the Corporation, when and if required, disclose, directly or
indirectly, to any person, firm, corporation, partnership, association or other
entity, any confidential information relating to the Corporation or any of its
affiliates or subsidiaries, or any information concerning the financial
condition, suppliers, customers, lessors, lessees, sources of leads for and
methods of obtaining new business or the methods generally of doing and
operating the respective businesses of the Corporation, its affiliates and
subsidiaries, except to the extent that such information is a matter of public
knowledge or is required to be disclosed by law or judicial or administrative
process.
(c) During the Term and for a period of twelve (12) months thereafter, the
Employee shall not, without the prior written consent of the Corporation,
directly or indirectly through any other individual or entity:
(i) solicit, entice, persuade or induce any individual who currently
is, or at any time during the Term shall be, an employee of the
Corporation, or any of its affiliates, to terminate or refrain from
renewing or extending such person's employment with the Corporation or
such subsidiary or affiliate, or to become employed by or enter into
contractual relations with any other individual or entity, and the
Employee shall not approach any such employee for any such purpose or
authorize or knowingly cooperate with the taking of any such actions by
any other individual or entity; or
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(ii) except in accordance with the Employee's duties hereunder on
behalf of the Corporation, solicit, entice, persuade, or induce any
individual or entity which currently is, or at any time during the Term
shall be, a customer, supplier, lessor or lessee of the Corporation, or
any of its subsidiaries of affiliates, to terminate or refrain from
renewing or extending its contractual or other relationship with the
Corporation or such subsidiary or affiliate, and the Employee shall not
approach any such customer, supplier, lessor or lessee for such purpose or
authorize or knowingly cooperate with the taking of any such actions by
any other individual or entity.
12. Specific Performance. The Employee acknowledges that a breach or
violation by the Employee of the covenants or agreements contained in Section 11
of this Agreement would cause irreparable harm and damage to the Corporation if
such provisions are not specifically enforced, the monetary amount of which
would be impossible to ascertain. Therefore, the Corporation shall be entitled
to enforce such provisions in a court of equity by a decree of specific
performance and to obtain an injunction from any court of competent jurisdiction
enjoining and restraining any breach or violation of any or all of the covenants
and agreements contained in Section 11 of this Agreement by the Employee and/or
his employees, associates, partners or agents, or entities controlled by one or
more of them, either directly or indirectly. Such remedies shall be cumulative
and not exclusive and shall he in addition to whatever other rights or remedies
the Corporation shall have for damages for a breach by the Employee of the
covenants or agreements contained in Section 11 or elsewhere in this Agreement.
13. Foreign Corrupt Practices Act. The Employee agrees to comply in all
respects with the U.S. Foreign Corrupt Practices Act of 1977 (the "FCPA"), as
amended, which provides generally that: under no circumstances will foreign
officials, representatives, political parties or holders of public offices be
offered, promised or paid any money, remuneration, things of value, or provided
any other benefit, direct or indirect, in connection with obtaining or
maintaining contracts or orders hereunder. The Executive's failure to comply in
all respects with the provisions of the FCPA shall constitute a material breach
by him of his obligations hereunder and shall entitle SFMT to terminate this
Agreement immediately. A copy of the Corporation's FCPA policy is annexed hereto
as Exhibit A.
14. No Delegation. The Employee shall not delegate his employment
obligations under this Agreement to any other person.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and sent by facsimile, with appropriate
confirmation of receipt, certified mail, return receipt requested, or overnight
courier to the following addresses:
If to the Corporation: SFMT, Inc.
000 Xxxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: 000-000-0000
If to the Employee: 0 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
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Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving notice thereof to the other party hereto in the manner herein provided.
Notices shall be deemed given at the time of receipt.
16. Deductions and Withholding. The Employee acknowledges and agrees that
the Company shall be entitled to withhold from the Employee's compensation
hereunder, including Salary and Bonus and other payments made pursuant to the
Agreement, all applicable taxes that are due to the appropriate jurisdictions,
and pay this withholding to the appropriate tax authorities, consistent with the
tax equalization treatment described in Section 6(e) herein. Tax equalization,
applied in the context of monthly withholding, shall he reconciled at year end.
17. Binding Effect. This Agreement shall be for the benefit of and binding
upon the parties hereto and their respective heirs, personal representatives,
legal representatives, successors and, where applicable, assigns.
18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, both oral and
written, between the parties hereto with respect to such subject matter. This
Agreement may not be modified, amended, altered or rescinded in any manner,
except by written instrument signed by both of the parties hereto; provided,
however, that the waiver by any party of compliance by any other party with
respect to any provision hereof or of any breach by such other party need be
signed only by the party waiving such provision or breach; provided, further;
that the waiver by either party hereto of a breach or compliance with any
provision of this Agreement shall not operate nor be construed as a waiver of
any subsequent breach or compliance.
19 Severability. In case any one or more of the provisions of this
Agreement shall be held by any court of competent jurisdiction so be illegal,
invalid or unenforceable in any respect, such provision shall be of no force and
effect, but the illegality, invalidity or unenforceability of such provision
shall have no effect upon and shall not impair the enforceability of any other
provision of this Agreement, but this Agreement shall be construed as if such
illegal, invalid or unenforceable provision had never been contained herein.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within New York.
21. Arbitration. Any and all disputes, controversies and claims arising
out of or relating to this Agreement, shall be settled and determined by
arbitration conducted before a panel of three arbitrators in New York in
accordance with the rules of the American Arbitration Association then in
effect. The arbitrators' award shall be final and binding upon the Corporation
and the Employee, and judgment confirming such arbitration may be entered
thereon in any court having jurisdiction over such proceedings.
22. Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any manner the meaning or
interpretation of this Agreement.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which taken together
shall constitute one and the same
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instrument
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
SFMT, INC.
by: [Illegible]
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Xxxxxx X. Xxxxxxxxxx
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