EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the 11th day of August, 1997 (the
"Effective Date"), is made by and between VIP Calling, Inc., a Delaware
corporation with its principal place of business at 000 Xxxxxxxxx Xxxxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Employer"), and Xxxxxx XxxxxxXxxx, an
individual residing at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Employee").
Section 1. FREEDOM TO CONTRACT.
The Employee represents that he is free to enter into this Agreement,
and that he has not made and will not make any agreements in conflict with this
Agreement. The Employee will not, and the Employer will not require the Employee
to, disclose to the Employer, or use for the Employer's benefit, any trade
secrets or confidential information now or hereafter in the Employee's
possession which is the property of any other party.
Section 2. EMPLOYMENT.
The Employer hereby employs the Employee, and the Employee hereby
accepts his employment by the Employer, upon the terms and conditions set forth
herein.
Section 3. EFFECTIVE DATE AND TERM.
This Agreement shall take effect as of the Effective Date, and shall
continue in full force and effect until terminated in accordance with Section 6
herein.
Section 4. TITLE AND DUTIES; EXTENT OF SERVICES.
The Employee shall promote the business and affairs of the Employer as
Vice President of the Employer, with responsibility for performing such duties
consistent with such position as the Board of Directors of the Employer (the
"Board") and/or the Chief Executive Officer of the Employer may from time to
time designate. Except as otherwise provided in this Agreement and except for
vacations and absences due to temporary illness, the Employee shall devote his
full time and efforts to the business and affairs of the Employer, provided
that, with the Employer's prior written consent the Employee may engage in such
other business activities outside the scope of his employment hereunder as in
the reasonable judgment of the Employer will not materially adversely affect the
Employee's ability to perform his obligations under this Agreement.
Section 5. COMPENSATION AND FRINGE BENEFITS.
Section 5.1. BASE SALARY. In consideration of the services rendered by
the Employee under this Agreement, the Employer shall pay the Employee an
initial base salary (the "Base Salary") at an annual rate of One Hundred Fifteen
Thousand Dollars ($115,000), payable in arrears bi-weekly (or on such other
payment schedule as the Employer shall have reasonably implemented with respect
to the payment of its other salaried employees), such Base Salary being subject
to increase at the discretion of the Board.
Section 5.2. PERFORMANCE BONUS. On an annual basis, the Board shall
establish, objective written performance goals for the Employee. Upon the
attainment of such performance goals, in addition to his Base Salary, the
Employee shall be entitled to a cash bonus in an amount determined in the
discretion of the Board. Any such performance bonus shall be due and payable
within ninety (90) days after the end of the calendar year to which it relates.
Section 5.3. FRINGE BENEFITS. The Employee shall be entitled to such
life insurance, health insurance and other employee fringe benefits as may be
offered or generally made available by the Employer to its executive officers.
Section 6. TERMINATION; CHANGE OF CONTROL.
Section 6.1. TERMINATION OF EMPLOYMENT. The Employee's employment
hereunder shall terminate upon the Employee's death or Permanent Disability. For
purposes of this Agreement, "Permanent Disability" shall mean the Employee's
inability to perform his duties hereunder for a continuous period of three (3)
months by reason of his physical or mental illness or incapacity. In the event
of any dispute concerning the existence of a Permanent Disability, such question
shall be determined by a licensed physician selected by the Employer and
reasonably acceptable to the Employee, whose determination shall be final and
binding upon the parties. The Employee shall submit to such examinations and
furnish such information as such physician may reasonably request. The
Employee's employment hereunder may also be terminated:
(a) By the Employee at any time upon at least thirty (30) days prior
written notice to the Employer; or
(b) By the Employer at any time upon at least thirty (30) days prior
written notice to the Employee; or
(c) By the Employee at any time for good reason, including but not
limited to:
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(i) failure of the Employer to continue to employ the Employee as
Vice President of the Employer; or
(ii) material diminution of the Employee's responsibilities, duties
or authorities as Vice President of the Employer, or assignment to the
Employee of any responsibilities or duties inconsistent with such
positions; or
(iii) failure of the Employer to pay and provide to the Employee the
compensation provided for herein; or
(iv) requiring the Employee to be permanently based anywhere other
than the principal executive offices of the Employer (excluding
business-related travel to an extent reasonably consistent with past
practice); or
(d) By the Employer at any time for cause, including but not limited
to:
(i) the Employee's gross negligence or willful misconduct with
respect to the business and affairs of the Employer; or
(ii) the Employee's material breach of this Agreement; or
(iii) the commission by the Employee of an act involving moral
turpitude or fraud; or
(iv) the Employee's conviction of any felony.
The provisions of Sections 6.2, 6.3, 7, 8, 9 and 10 shall survive any
termination of the Employee's employment hereunder and shall continue in effect
until such time as all obligations of the parties described therein have been
satisfied.
Section 6.2. COMPENSATION FOLLOWING TERMINATION; SEVERANCE PAY.
(a) If the Employee terminates his employment pursuant to Section
6.1(a) hereof, or if such employment is terminated by the death or
Permanent Disability of the Employee, the Employee shall not be entitled
to compensation, severance pay or fringe benefits beyond the date upon
which he ceases to be employed hereunder (the "Employment Termination
Date") except as may be otherwise provided in any then existing insurance
or health benefit programs of the Employer.
(b) If the Employer terminates the employment of the Employee
pursuant to Section 6.1(b) hereof or if the Employee terminates his
employment
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pursuant to Section 6.1(c) hereof, the Employer shall be entitled for a
period of twelve (12) months from the Employment Termination Date, to
continue to receive payment of his Base Salary (as in effect on the
Employment Termination Date) at the same rate and on the same schedule as
if the Employee were still employed by the Employer during such period;
PROVIDED, HOWEVER, that each such payment shall be subject to
dollar-for-dollar reduction for any cash amounts received by the Employee
or accrued for his benefit from any successor employer or other entity as
payment for services rendered during such twelve (12) month period.
During such twelve (12) month period, the Employer shall also continue to
provide the Employee with such health benefits as were provided to the
Employee immediately prior to the Employment Termination Date (or
substantially comparable benefits if a continuation of benefits is not
permitted under then existing insurance or health benefit programs of the
Employer), such benefits to be provided to the same extent and under the
same terms and conditions as if the Employee were still employed by the
Employer during such period. Except as specifically provided in this
Section 6.2(b), the Employee shall not be entitled to any fringe benefits
following the Employment Termination Date.
(c) If the Employer terminates the employment of the Employee for
cause pursuant to Section 6.1(d) hereof, the Employee shall not be
entitled to compensation, performance bonus or fringe benefits hereunder
beyond the Employment Termination Date.
Section 6.3. ACCELERATION OF STOCK OPTIONS AND RESTRICTED STOCK.
(a) Immediately prior to the occurrence of an Acquisition or Change
in Control (each as defined below), each option to acquire shares of
capital stock of the Employer and each share of restricted capital stock
of the Employer then held by the Employee shall automatically and without
further action become fully vested, and each such option shall remain
exercisable until the expiration of such option or until it sooner
terminates in accordance with its terms.
(b) For purposes of Section 6.3(a), the term "Acquisition" shall mean:
(i) a merger, consolidation or similar transaction in which
securities possessing more than 50% of the total combined voting power
of the Employer's outstanding securities are transferred to a person
or persons different from the persons who held those securities
immediately prior to such transaction, or
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(ii) the sale, transfer, or other disposition of all or
substantially all of the Employer's assets to one or more persons
(other than any wholly owned subsidiary of the Employer) in a single
transaction or series of related transactions.
(c) For purposes of Section 6.3(a), the term "Change in Control"
shall mean a change in ownership or control of the Employer effected
through either of the following transactions:
(i) any person or related group of persons (other than the
Employer or a person that directly or indirectly controls, is
controlled by, or is under common control with the Employer) directly
or indirectly acquires beneficial ownership (determined pursuant to
Rule 13d-3 promulgated under the Securities Xxxxxxxx Xxx 0000, as
amended) of securities possessing more than 50% of the total combined
voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Employer's stockholders,
or
(ii) over a period of 36 consecutive months or less, there is a
change in the composition of the Board such that a majority of the
Board members (rounded up to the next whole number, if a fraction)
ceases, by reason of one or more proxy contests for the election of
Board members, to be composed of individuals who either (A) have been
Board members continuously since the beginning of such period, or (B)
have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
the preceding clause (A) who were still in office at the time such
election or nomination was approved by the Board.
Section 7. INTELLECTUAL PROPERTY MATTERS.
Section 7.1. INVENTIONS. All discoveries, inventions, improvements,
techniques, trademarks and innovations, whether or not patentable or subject to
copyright protection (including all data and records pertaining thereto), which
the Employee may invent, discover, originate or make during the term of his
employment with the Employer either alone or with others and whether or not
during working hours or by the use of facilities of the Employer, and which
relate to, or are, or may likely be useful in connection with the business of
the Employer ("Inventions"), shall be the exclusive property of the Employer.
The Employee shall promptly and fully disclose Inventions to the Employer and
shall promptly record Inventions in such form as the Employer may request.
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Section 7.2. ASSIGNMENTS. The Employee shall assign to the Employer all
right, title and interest to all Inventions reduced to writing, drawings or
practice by or for the Employee during the term of his employment. The Employee
shall execute upon the Employer's request at any time, and at the Employer's
sole expense, any applications, assignments and other documents that the
Employer may deem necessary or desirable to protect or perfect its rights,
including any patent rights in Inventions, and shall assist the Employer, at the
Employer's sole expense, in obtaining, defending and enforcing its rights
thereon. The Employee hereby appoints the Employer his attorney-in-fact for
purposes of effecting any assignments hereunder.
Section 7.3. CONFIDENTIAL INFORMATION. The Employee acknowledges that
all information acquired by the Employee from the Employer, its customers,
suppliers or others, or developed by the Employee alone or in conjunction with
others during the term of his employment which relate directly or indirectly to
the present or potential business of the Employer, including but not limited to
any ideas, formulae, processes, know-how, data, test results, raw materials,
prospective products or services, techniques, models, computer programs, plans,
schedules, sketches, notebooks drawings, process sheets, customer or supplier
lists, and financial information ("Confidential Information"), is a valuable and
unique asset of the Employer for the Employer's sole benefit. Except as set
forth below, the Employee shall not, at any time during or after the term of his
employment, use for himself or others, or disclose or communicate to any person,
firm, corporation, association, or other entity for any reason or purposes
whatsoever (other than to Directors, officers and employees of the Employer in
the regular course of the Employer's business or to others subject to
appropriate confidentiality restrictions), any Confidential Information without
the prior written consent of the Employer; PROVIDED, HOWEVER, that the
confidentiality and nondisclosure provisions of this Section 7.3 shall not apply
to (i) a disclosure of any Confidential Information which, as of the time of
such disclosure, or thereafter, shall have become a part of the public knowledge
through no fault of the Employee, (ii) a disclosure of Confidential Information
by the Employee to a governmental entity in fulfillment of a legal obligation of
the Employee to such governmental authority, (iii) Confidential Information that
the Employee can establish was lawfully in his possession at the time of
disclosure by Employer and was not acquired, directly or indirectly, from
Employer and (iv) Confidential Information which Employee lawfully receives from
a third party, provided, however, that such Confidential Information was not
obtained by said third party, directly or indirectly, from the Employer.
Section 7.4. PROPRIETARY ITEMS. All originals, copies and summaries of
manuals, memoranda, notes, photographs, notebooks, records, reports, plans,
drawings and other documents or items of any kind concerning any matters
affecting or relating to the present or potential business of the Employer,
whether or not they contain Confidential Information, are, and shall continue to
be, the
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property of the Employer, and all of such documents or items in the
possession or control of the Employee shall be delivered to the Employer by
the Employee immediately upon the Employer's request or termination of the
Employee's employment hereunder.
Section 8. NON-COMPETITION.
In view of the unique nature of the business of the Employer and the
need of the Employer to maintain its competitive advantage in the industry
through the protection of its trade secrets and proprietary information, the
Employee agrees that during the term of his employment with the Employer and for
a period of one (1) year thereafter, the Employee shall not, directly or
indirectly, within the United States of America or its Territories or
Possessions or within any other country in which the Employer or any affiliate
of the Employer is engaged in or actively contemplating engaging in any activity
described below (i) engage in, (ii) own greater than a 5% interest in, be
employed by, or consult for, or act as an advisor to, any business, person or
entity which engages in, or (iii) otherwise participate in any way in, research,
development, manufacturing, marketing, selling or licensing activities, or in
any other activity, that may reasonably be deemed by the Employer to be in
competition with any activity in which the Employer or any subsidiary of the
Employer is then, or is then contemplating becoming, engaged in the field of
internet telephony. If at any time the foregoing provisions shall be deemed to
be invalid or unenforceable or are prohibited by the laws of the state or place
where they are to be performed by reason of being vague or unreasonable as to
duration or place of performance, this section shall be considered divisible and
shall become and be immediately amended to include only such time and such area
as shall be determined to be reasonable and enforceable by the court or other
body having jurisdiction over this Agreement; and the Employee and the Employer
expressly agree that this section, as so amended, shall be valid and binding as
though any invalid or unenforceable provision had not been included herein. The
Employee further agrees that during, and for a period of one (1) year after
termination of, the Employee's employment hereunder, he shall not solicit, or
arrange to have any other person or entity solicit, any person or entity engaged
by the Employer as an employee, customer, supplier, or consultant or advisor to,
the Employer to terminate such party's relationship with the Employer. The time
periods provided for in this Section 8 shall be extended for a period of time in
which Employee is in violation of any of the provisions of this Section 8.
Section 9. REMEDIES.
The Employer and Employee agree and acknowledge that the rights and
obligations set forth under this Agreement are of a unique and special nature
and that each party is, therefore, without an adequate legal remedy in the event
of the other party's violation of the covenants set forth in this Agreement. The
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Employer and Employee agree, therefore, that the covenants made under this
Agreement shall be specifically enforceable in equity, in addition to all other
rights and remedies, at law or in equity or otherwise (including termination of
employment) that may be available to the parties.
Section 10. PROVISIONS OF GENERAL APPLICATION.
Section 10.1. DISPUTES. In the event of any dispute touching or
concerning this Agreement, the parties will submit to the exclusive jurisdiction
and venue of any court of competent jurisdiction sitting in Suffolk County,
Massachusetts, and the parties agree to comply with all requirements necessary
to give such court jurisdiction over the parties and the controversy. EACH PARTY
HEREBY WAIVES ANY RIGHT TO A JURY TRIAL AND TO CLAIM OR RECOVER PUNITIVE
DAMAGES.
Section 10.2. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed, interpreted and
determined in accordance with the internal substantive laws of the Commonwealth
of Massachusetts (excluding choice of law or conflict of law provisions).
Section 10.3. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which,
taken together, shall constitute one and the same document. In making proof of
this Agreement it shall not be necessary to produce or account for more than one
such counterpart.
Section 10.4. OTHER AGREEMENTS. This Agreement represents the entire
understanding and agreement between the parties as to the subject matter hereof
and supersedes all prior or concurrent oral or written agreements relating
thereto.
Section 10.5. AMENDMENT. This Agreement may be amended only by a
written document executed in one or more counterparts by each of the parties
hereto.
Section 10.6. WAIVER. No consent to or waiver of any breach or default
in the performance of any obligation hereunder shall be deemed or construed to
be a consent to or waiver of any other breach or default in the performance of
any of the same or any other obligation hereunder. Failure on the part of either
party to complain of any act or failure to act of the other party or to declare
the other party in default, irrespective of the duration of such failure, shall
not constitute a waiver of rights hereunder and no waiver hereunder shall be
effective unless it is in writing, executed by the party waiving the breach or
default hereunder.
Section 10.7. ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.
This
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Agreement may be assigned by the Employer to any Affiliate (as hereinafter
defined) or to a successor to the portion of its business to which this
Agreement relates (whether by purchase or otherwise). For purposes of this
Agreement, "Affiliate" shall mean any person or entity which, directly or
indirectly, controls or is controlled by or is under common control with the
Employer and, for the purposes of this definition, "control" (including the
terms "controlled by" and "under common control with"), shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of another, whether through the
ownership of voting securities or holding of office in another, by contract or
otherwise. The Employee may not assign or transfer any of his rights or
obligations under this Agreement.
Section 10.8. HEADINGS. The headings of sections and subsections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Agreement or to affect the meaning of any of
its provisions.
Section 10.9. SEVERABILITY. If any provision of this Agreement shall,
in whole or in part, prove to be invalid for any reason, such invalidity shall
affect only the portion of such provision which shall be invalid, and in all
other respects this Agreement shall stand as if such invalid provisions, or the
invalid portion thereof, had not been a part hereof.
IN WITNESS WHEREOF, this Agreement has been executed by the Employer,
by its duly authorized officer, and by the Employee, as of the Effective Date.
VIP CALLING, INC.
By: /S/ XXXX XXXXXX
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Xxxx Xxxxxx
President and Chief Executive Officer
EMPLOYEE
/S/ XXXXXX XXXXXXXXXX
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Xxxxxx XxxxxxXxxx
