EMPLOYMENT AGREEMENT
Exhibit 10.2
AGREEMENT,
dated as of the 25th day of August, 2005, by and between WQN, INC., a
Delaware corporation with an office located at 00000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
(the “Company”), and XXXXX X. XXXXXXX, an individual (the “Employee”).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has determined that it is in the best interests
of the Company to employ the Employee and the Employee desires to be employed by the Company; and
WHEREAS, the Company and the Employee desire to set forth in this Agreement the terms and
conditions of the Employee’s employment.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby employs and engages the Employee to serve as the Chief Financial Officer of
the Company, and the Employee hereby accepts such employment with the Company, on the terms and
conditions herein set forth. The Employee’s conduct and performance shall be consistent with what
would be expected of senior executives at other institutions of similar size and type. Except as
otherwise provided herein, the Employee shall devote such business time, attention, and skill to
the business of the Company and perform such responsibilities as are customary for an employee
holding a Chief Financial Officer position and that are assigned to the Employee by the Board of
Directors in accordance with the standards and policies that the Company may from time to time
establish. The Employee shall use his reasonable best efforts to further the interests of the Company, and to
discharge diligently his duties and responsibilities to the Company under this Agreement. As of
the date of this Agreement, the Employee represents that he is not subject to any legal obligations
or restrictions that would prevent or limit the Employee from performing his responsibilities under
this Agreement. Notwithstanding the foregoing, this
Agreement shall not be construed or applied to prevent the Employee from engaging in any other
business or investment activities, including those which may be similar to the investments or
business of the Company.
2. COMMENCEMENT; TERM OF AGREEMENT
2.01 The term of employment hereunder shall commence effective as of the date of the closing
of the Company’s asset sale to VOIP, Inc. (the “Commencement Date”), and shall continue until the
third anniversary of the Commencement Date (the “Employment Period”) unless terminated sooner
pursuant to the express provisions hereof.
3. DUTIES
3.01 During the Employment Period, the Employee shall be employed in an executive capacity as
the Chief Financial Officer of the Company, with the authority and responsibilities appropriate and
customary to such position.
3.02 The Employee shall report and be responsible to the Board of Directors of the Company.
3.03 On the date hereof, and at each annual meeting of stockholders during which the Employee
is serving as the Chief Financial Officer of the Company, the Company shall cause the Employee to
be nominated to the Board of Directors of the Company and shall use its reasonable best efforts to
have the Employee elected to the Board of Directors of the Company.
4. COMPENSATION
4.01 The Employee shall be eligible to receive compensation in accordance with resolutions
adopted by the Board of Directors, including fees payable to the members of the
Board of Directors (so long as, and to the extent that, Employee is a director of the Company).
Further, upon the Commencement Date, the Company shall grant to the Employee, pursuant to the
Company’s 2001 Stock Option Plan, a 10-year stock option (“Option”)
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to purchase 220,000 shares of
the Company’s common stock at an exercise price of $1.41 per share. Such options shall vest as follows: (i) one-third on the date hereof, (ii) one-third on the
first anniversary date of this Agreement; provided that the Employee is then in the employ of the
Company, and (iii) the remainder on the second anniversary date of this Agreement, provided that
the Employee is then in the employ of the Company. However, if the Employee’s employment is
terminated pursuant to Section 5.04 hereof or if the Employee leaves the employ of the Company for
Good Reason, the Option shall fully vest and the Employee shall have one (1) year thereafter to
exercise the Option.
For purposes of this Agreement, “Good Reason” shall mean the following:
(a) a material default or breach by the Company of any obligation, representation, warranty,
covenant or agreement made by the Company herein, including, but not limited to: (i) a reduction of
the duties of the Employee; (ii) a change in the reporting responsibility of the Employee to the
Board of Directors or (iii) the Company’s failure to maintain in full force and effect Directors &
Officers Insurance in accordance with Section 4.02(i) of this Agreement; or
(b) the Company requiring the Employee to be based anywhere other than the New York City, New
York metropolitan area, except for required travel on business; or
(c) a material default or breach by the Company, of the Management Agreement by and between
the Company and WQN Capital Advisors, LLC (the “Management Company”),
dated on or about the date
hereof (the “Management Agreement”) (a termination in accordance with
Section 11 of the Management
Agreement shall not constitute a material default or breach by the Company).
4.02 The Employee shall be entitled, during the Employment Period, to, (i) Director’s and
Officer’s Insurance, in an initial amount equal to that which is normal and customary for a
business the type of which the Company is engaged in, which amount shall be reviewed by the Board
of Directors and the Employee from time to time, and (ii) the maximum indemnification by
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the Company
that may be provided for officers/directors under the laws of the Company’s state of incorporation
and the Company’s certificate of incorporation and bylaws.
5. TERMINATION
5.01 The Employee’s employment hereunder shall terminate automatically and without notice upon
the death of the Employee or the Employee voluntarily leaving the employ of the Company.
5.02 The Company may terminate the Employee’s employment hereunder, upon written notice to the
Employee, in the event of the Employee’s Incapacity. For the purpose of this Agreement, Incapacity
shall be deemed to refer to and include (i) the suffering of any mental or physical illness,
disability or incapacity to the extent that the Employee shall be unable to perform his duties
pursuant to this Agreement and such illness, disability or incapacity shall be deemed by a licensed
physician chosen by the Company to be of a permanent nature, or (ii) the Employee shall not have
performed his duties hereunder on a full-time basis for a continuous period of 90 days or a period
of 150 days in any one year period, and the Company, and its option, elects to treat such illness,
disability or incapacity as permanent in nature.
5.03 The Company may terminate the Employee’s employment hereunder, upon written notice to the
Employee, for Cause. For purposes of this Agreement, “Cause” shall mean the following:
(a) the Employee’s conviction of a felony in a court of law of any crime or offense involving
money; or
(b) the Employee’s failure or refusal to substantially perform his duties hereunder (other
than any such failure or refusal resulting from his Incapacity or the failure to meet specific
growth and profit targets), or the Employee’s failure or refusal to carry out the reasonable
business directives of the Board of Directors, or the willful taking of any action by the Employee
which results in material damage to the Company, or the material default or breach by the
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Employee of any obligation, representation, warranty, covenant or agreement made by the Employee herein;
provided, however, that the Company shall have given the Employee written notice of
any such Cause for termination pursuant to this Section 5.03(b) and the Employee shall have failed
to cure such Cause within fifteen (15) days after the date of such notice. If the Cause for
termination is cured within the fifteen (15) day period, it shall be deemed for all purposes that
Cause for termination has not occurred; or
(c) the Board of Directors of the
Company determines in good faith that the Employee, as a
member or manager of the Management Company, has caused a material breach or default by the
Management Company of the Management Agreement.
5.04 The Company or the Employee may terminate the Employee’s employment hereunder without Cause.
6. SURVIVAL
The covenants and agreements contained in or made pursuant to this Agreement shall survive the
Employee’s termination of employment, irrespective of any investigation made by or on behalf of any
party.
7. ENTIRE AGREEMENT; MODIFICATION
This Agreement sets forth the entire understanding of the parties with respect to the subject
matter hereof, supersedes all existing agreements between them concerning such subject matter, and
may be modified, supplemented or discharged only by a written instrument duly executed by each
party.
8. NOTICES
Any notices or other communication required or permitted to be given hereunder shall be in
writing and shall be mailed by certified or registered mail, return receipt requested, or
personally delivered against receipt to the party to whom it is to be given at the address of such
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party set forth in the preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 8). Any notice or other
communication given by certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party’s address which shall be deemed given at the time of receipt
thereof.
9. WAIVER
Any waiver by either party of a breach of any provision of this Agreement shall not operate as
or be construed to be a waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or deprive that party of
the right thereafter to insist upon strict adherence to that term or any other term of this
Agreement. Any waiver must be in writing.
10. BINDING EFFECT
The Employee’s rights and obligations under this Agreement shall not be transferable by
assignment or otherwise, such rights shall not be subject to commutation, encumbrance, or the
claims of the Employee’s creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of the Employee, his
heirs, executors, and administrators, and shall be binding upon and inure to the benefit of the
Company and its successors and assigns.
11. HEADINGS
The headings in this Agreement are solely for the convenience of reference and shall be given
no effect in the construction or interpretation of this Agreement.
12. COUNTERPARTS; GOVERNING LAW
This Agreement may be executed in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. This
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Agreement
shall be governed by and construed in accordance with the laws of the State of New York, without
giving effect to any doctrine pertaining to the conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year above
written.
/s/ Xxxxx
X. Xxxxxxx |
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| XXXXX X. XXXXXXX | ||||
| WQN, INC. | ||||
By: |
/s/ Xxxxxx Xxxxxx | |||
| Xxxxxx Xxxxxx, Chairman | ||||
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