Exhibit 10.11
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 15th day of September, 1995, by and between
International Telecommunications Group, Ltd., a Delaware corporation (the
"Corporation") and Xxxxxx Xxxxxx ("Xxxxxx").
WITNESSETH:
WHEREAS, the Corporation wishes to employ Xxxxxx, and Xxxxxx wishes to be
employed by the Corporation, on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions contained herein, the parties hereto agree as follows:
1. Position and Responsibilities.
1.1. The Corporation hereby employs Xxxxxx to serve in an executive
capacity as Vice Chairman of the Board of the Corporation. Subject to the
direction and authorization of the Board of Directors of the Corporation, Xxxxxx
shall perform such functions and undertake such responsibilities as are
customarily associated with such a position provided, however, that Xxxxxx shall
only perform services under this Agreement within the United States. Except as
contemplated by the Employment Agreement dated as of September 15, 1995 between
Xxxxxx and RSL Communications, Ltd., a Bermuda corporation (the "RSL Employment
Agreement"), Xxxxxx shall hold, for no additional consideration, such
directorships and executive officerships in the Corporation and any subsidiary
or affiliate to which, from time to time, he may be elected or appointed during
the term of this Agreement.
1.2. Xxxxxx shall devote his full time and best efforts to the
business and affairs of the Corporation and to the promotion of its interests
provided, however, that nothing contained herein shall preclude Xxxxxx from
fulfilling his obligations under the RSL Employment Agreement.
1.3. Xxxxxx will do such travelling as may reasonably be required in
the performance of his duties hereunder, consistent with his level of travel
during the twelve months prior to the date hereof.
2. Term.
2.1. The term of this Agreement shall commence on the date hereof and
terminate on December 31, 1998, unless sooner terminated as provided in this
Agreement. The term shall automatically be extended for successive one-year
periods, on the same terms and conditions as herein provided, unless either
Xxxxxx or the Corporation gives written notice to the contrary to the other
party by September 30 of the year of the then expiration date of this Agreement.
The term of this Agreement and any extension thereof is herein referred to as
the "Term."
2.2. Notwithstanding the provisions of Section 2.1 hereof, the
Corporation shall have the right, on written notice to Xxxxxx given by any
Director of the Corporation pursuant to a determination by a majority of the
Board of Directors of the Corporation, to terminate this Agreement for Cause (as
defined herein), such termination to be effective on the date on which notice is
given or as of such later date otherwise specified in the notice. The
Corporation shall give such notice only after
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opportunity has been afforded to Xxxxxx to make a presentation to a meeting of
the Board regarding his conduct or actions.
2.3. For purposes of this Agreement, the term "Cause" shall mean fraud
or dishonesty or acts of gross negligence in the course of providing his
services herein which are injurious to the Corporation; willful
misrepresentation to shareholders or directors which is injurious to the
Corporation; a willful failure without reasonable justification to comply with a
reasonable written order of the Board of Directors; a willful and material
breach of this Agreement; or the conviction of a felony.
2.4. Xxxxxx shall have the right, on 30 days prior written notice to
the Corporation, to terminate this Agreement for Good Reason, such termination
to be effective 30 days after the occurrence of a Good Reason event. For
purposes of this Agreement, the term "Good Reason" shall mean any of the
following:
(a) The assignment to Xxxxxx by the Corporation of duties inconsistent
with, or a material reduction in the nature of, Xxxxxx'x responsibilities as
Vice Chairman of the Board of the Corporation;
(b) A failure by the Corporation to comply with any of the material
terms of this Agreement, which shall not have been cured within 30 days after
written notice thereof; or
(c) Xxxxxx shall no longer be Vice Chairman of the Board of the
Corporation (except by reason of Sections 2.2, 4.1 or 4.2).
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2.5. If this Agreement shall be terminated by the Corporation other
than pursuant to Sections 2.2, 4.1 or 4.2 hereof or by Xxxxxx pursuant to
Section 2.4 hereof, then the Corporation shall continue to pay to Xxxxxx the
salary to which Xxxxxx is entitled pursuant to this Agreement for the Term and
shall continue for such time to pay for the benefits (other than the use of an
automobile) provided in Section 3.2 of this Agreement.
3. Salary.
3.1. The Corporation shall pay to Xxxxxx for the services to be
rendered by Xxxxxx hereunder a salary at the rate of $210,000 per annum. The
salary shall be payable in equal monthly installments of $17,500 each. Such
salary will be reviewed at least annually and shall be increased (but not
decreased) by the Board of Directors of the Corporation in such amount as
determined in its sole discretion, but in no event shall such increase be less
than an amount equal to the product of the prior year's salary and the prior
year's U.S. Consumer Price Index increase. The Board of Directors in its sole
discretion may grant to Xxxxxx an annual bonus from time to time.
3.2. Xxxxxx shall be entitled to participate in, and receive benefits
from any employee benefit plans of the Corporation or any subsidiary which may
be in effect at any time during this Agreement. He shall be entitled to
participate in medical and long-term disability insurance programs (providing,
in his case, for monthly payments of at least 50% of the monthly salary payments
set forth in Section 3.1 above) which, if not in
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effect on the date of this Agreement, shall be promptly put in place by the
Corporation. In addition, the Corporation shall purchase $1,000,000 of term life
insurance on the life of Xxxxxx, with the beneficiaries to be named by Xxxxxx,
shall lease an automobile of Xxxxxx'x choice (with monthly lease, insurance and
parking charges to be borne by the Corporation of not in excess of $1,250) for
use by Xxxxxx, and shall pay Xxxxxx'x reasonable legal expenses in connection
with the negotiation and preparation of this Agreement.
3.3. The Corporation agrees to reimburse Xxxxxx for all reasonable and
necessary business expenses incurred by him on behalf of the Corporation in the
course of his duties hereunder upon the presentation by Xxxxxx of appropriate
vouchers therefor.
4. Death: Incapacity.
4.1. If, during the Term, because of illness or other incapacity,
Xxxxxx shall fail for a period of 180 consecutive days, or for shorter periods
aggregating more than 180 days during any twelve month period, to render the
services contemplated hereunder, then the Corporation, at its option, may
terminate this Agreement by notice from the Corporation to Xxxxxx, effective on
the giving of such notice.
4.2. In the event of the death of Xxxxxx during the Term, this
Agreement shall terminate on the date of such death.
4.3. In the event of termination pursuant to this Section 4, all
amounts accrued to the date of termination shall
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be promptly paid to Xxxxxx or his legal representatives, as the case may be.
5. Other Activities During Agreement.
5.1. Xxxxxx agrees to devote his full business time to performing
services under this Agreement; provided, however, that Xxxxxx shall be entitled
to four weeks of paid vacation each year.
5.2. (a) Subject to the provisions of Section 5.2(b), for a one-year
period after the end of the Term, neither Xxxxxx nor any entity in which he may
be interested as a partner, trustee, director, officer, employee, shareholder,
option holder, lender of money or guarantor (each, a "Xxxxxx Affiliate"), shall
be engaged directly or indirectly in the business of international long distance
telecommunication services engaged in by the Corporation in any country where
the Corporation, or any subsidiary, conducts such business at any time during
the Term (a "Competitive Activity"); provided, however, that the foregoing shall
not be deemed to prevent Xxxxxx from (i) investing in not more than 5% of the
outstanding securities of a public company or (ii) fulfilling his obligations
under the RSL Employment Agreement. It is understood and agreed that any
opportunity directly or indirectly related to any business engaged in by the
Corporation in any country where the Corporation conducts such business at any
time during the Term shall be deemed a corporate opportunity of the Corporation
and Xxxxxx shall promptly make such opportunity available exclusively to the
Corporation.
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(b) If, during the period of one year after the Term, Xxxxxx or a
Xxxxxx Affiliate proposes to engage in what may be a Competitive Activity,
Xxxxxx shall so notify the Corporation in a writing which shall fully set forth
and describe in detail the nature of the activity which may be a Competitive
Activity, the names of the companies or other entities with or for whom such
activity is proposed to be undertaken, and whether it is proposed to be engaged
in by Xxxxxx or by a Xxxxxx Affiliate (the "Section 5 Notice"). If, within 30
days after receipt by the Corporation of a Section 5 Notice, the Corporation
shall fail to notify Xxxxxx that it deems the proposed activity to be a
Competitive Activity, then Xxxxxx shall be free to engage in the activities
described in the Section 5 Notice without violation of this Section 5.2. If,
however, the Corporation, within such period, notifies Xxxxxx that the proposed
activities constitute a Competitive Activity, then (i) Xxxxxx shall not engage
in any Competitive Activity for a one-year period following the Term, and (ii)
the Corporation shall pay to Xxxxxx, during such one-year period, in equal
monthly installments, an amount equal to his salary for the last year of the
Term pursuant to Section 3.1 of this Agreement.
5.3. Xxxxxx shall not at any time during this Agreement or after the
termination hereof directly or indirectly divulge, furnish, use, publish or make
accessible to any person or entity any Confidential Information (as hereinafter
defined) other than in connection with the performance of his duties hereunder.
It is the specific intent of the Corporation and
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Xxxxxx that each and all of the provisions set forth hereinabove shall be valid
and enforceable as specifically set forth hereinabove; and that Xxxxxx
acknowledges that the Corporation's remedies at law are likely to be inadequate,
and Xxxxxx consents to the application of the equitable remedies of specific
performance to enforce the Corporation's rights hereunder. Further, should any
person seek to legally compel Xxxxxx (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demands or
otherwise) to disclose any Confidential Information, Xxxxxx shall provide the
Corporation with prompt notice followed up in writing so that the Corporation
may seek a protective order or other appropriate remedy, failing which Xxxxxx
shall be entitled to make such disclosure as is legally required. In any event
Xxxxxx shall use his best efforts with the advice of counsel to furnish only
that portion of the Confidential Information which is legally required and, with
the cooperation of the Corporation, will exercise his best efforts to obtain
reliable assurance that confidential treatment will be accorded information so
disclosed. In the event of a breach or a threatened breach by Xxxxxx of the
provisions of this Section 5.3, the Corporation may, in addition to any other
remedies it may have, obtain injunctive relief in any court of appropriate
jurisdiction to enforce this Section 5.3. The provisions of this Section 5.3
shall survive the expiration or termination, for any reason, of this Agreement
and shall be separately enforceable. Any records of Confidential Information
prepared by Xxxxxx or which come into Xxxxxx'x
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possession during the Term are and remain the property of the Corporation
and upon termination of this Agreement all such records and copies thereof shall
be either left with or returned to the Corporation.
5.4. The term "Confidential Information" shall mean information
disclosed to Xxxxxx or known, learned, created or observed by him as a
consequence of or through this Agreement, not generally known in the relevant
trade or industry or known to Xxxxxx prior to his employment by the Corporation,
about the Corporation's business activities, services and processes, including
but not limited to information concerning advertising, sales promotion,
publicity, sales data, research, telecommunications technology, finances,
accounting, methods, processes, business plans (including prospective or pending
licensing applications or investments in license holders or applicants), client
or supplier lists and records, potential client or supplier lists, and client or
supplier billing.
6. Indemnification.
6.1. The Corporation will indemnify Xxxxxx and pay on his behalf all
Expenses (as defined below) incurred by Xxxxxx in any proceeding (as defined
below), whether the Proceeding which gave rise to the right of indemnification
pursuant to this Agreement occurred prior to or after the date of this
Agreement. This indemnification shall not apply if it is determined by a court
of competent jurisdiction in a Proceeding that any losses, claims, damages or
liabilities arose primarily out of the gross negligence, willful misconduct or
bad faith of Xxxxxx.
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6.2. The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, or any inquiry or investigation, whether
brought in the name of the Corporation or otherwise and whether of a civil,
criminal, administrative or investigative nature, and any threatened, pending or
completed action, suit or proceeding or any inquiry or investigation that Xxxxxx
in good faith believes might lead to the institution of any such action, suit or
proceeding or any such inquiry or investigation, in all cases by reason of the
fact that Xxxxxx is or was a director, officer, employee, agent or fiduciary of
the Corporation, or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, employee, trustee, fiduciary
or agent of another corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, whether or not he is serving in such capacity
at the time any liability or expense is incurred for which indemnification or
reimbursement can be provided under this Agreement.
6.3. The term "Expenses" shall include, without limitation thereto,
expenses (including, without limitation, attorneys' fees and expenses) of
investigations, judicial or administrative proceedings or appeals, damages,
judgments, fines, penalties or amounts paid in settlement by or on behalf of
Xxxxxx and any Expenses of establishing a right to indemnification under this
Agreement.
6.4. The Expenses incurred by Xxxxxx in any Proceeding shall be paid
by the Corporation as incurred and in advance of
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the final disposition of the Proceeding at the written request of Xxxxxx. Xxxxxx
hereby agrees and undertakes to repay such amounts if it shall ultimately be
decided in a Proceeding that he is not entitled to be indemnified by the
Corporation pursuant to this Agreement or otherwise.
6.5. The indemnification and advancement of Expenses provided by this
Agreement shall not be deemed exclusive of any other rights to which Xxxxxx may
be entitled under the Corporation's Articles of Incorporation or Bye-Laws, any
agreement, any vote of stockholders or disinterested directors, the laws under
which the Corporation was formed, or otherwise, and may be exercised in any
order Xxxxxx elects and prior to, concurrently with or following the exercise of
any other such rights to which Xxxxxx may be entitled, including pursuant to
directors and officers insurance maintained by the Corporation, both as to
action in official capacity and as to action in another capacity while holding
such office, and the exercise of such rights shall not be deemed a waiver of any
of the provisions of this Agreement. The provisions of this Section 6 shall
survive the expiration or termination, for any reason, of this Agreement and
shall be separately enforceable.
7. Assignment. The Corporation shall require any successor or assign
to all or substantially all the assets of the Corporation, prior to consummation
of any transaction therewith, to expressly assume and agree to perform in
writing this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession
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or assignment had taken place. This Agreement shall inure to the benefit of and
be binding upon the Corporation and its successors and assigns.
8. No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement, except as provided in Sections 4, 6 and 7 hereof.
9. Headings. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
10. Interpretation. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If, moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.
11. Notices. All notices under this Agreement shall be in writing and
shall be deemed to have been given at the time when mailed by registered or
certified mail or when delivered by hand or recognized overnight courier
service, addressed to the
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address below stated of the party to which notice is given, or to such changed
address as such party may have fixed by notice:
To the Corporation:
169 EAB Plaza - Xxxx Xxxxx
0xx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President
With a copy to:
Xxxxxx x. Xxxx, Esq.
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
To Xxxxxx:
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
provided, however, that any notice of change of address shall be effective only
upon receipt.
12. Waivers. If any party should waive any breach of any provision of
this Agreement, it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.
13. Complete Agreement; Amendments. The foregoing is the entire
agreement of the parties with respect to the subject matter hereof and may not
be amended, supplemented, canceled or discharged except by written instrument
executed by the parties hereto.
14. Governing Law. This Agreement is to be governed by and construed
in accordance with the laws of New York, without giving effect to principles of
conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD.
By: /s/ X. Xxxxxx
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AGREED AND ACCEPTED
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
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