MUTUAL RELEASE AND SEPARATION AGREEMENT
THIS MUTUAL RELEASE AND SEPARATION AGREEMENT (this "Agreement") is made as
of the 10th day of August, 2005, by XXXXX X. XXXXXX, an individual ("Xxxxxx"),
and GLOBETEL COMMUNICATIONS CORP., a Delaware corporation ("GlobeTel").
Preliminary Statements
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Xxxxxx has been employed by GlobeTel as Vice President of Network
Operations pursuant to a certain Key Executive Employment Agreement dated
October 15, 2002 (the "Employment Agreement"). In connection with Xxxxxx'x
employment, GlobeTel has granted Xxxxxx the option to purchase shares of common
stock of GlobeTel as set forth in that certain Option Agreement dated as of
December 31, 2004 (the "Option Agreement").
Xxxxxx and GlobeTel wish to resolve and to settle all issues between them
relating to the employment of Xxxxxx by GlobeTel, including without limitation,
all issues relating to salary and bonus payable to Xxxxxx, as hereinafter set
forth.
W I T N E S S E T H:
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NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1. Preliminary Statements. The foregoing Preliminary Statements are
true and form a part of this Agreement.
2. Severance. GlobeTel shall pay to Xxxxxx:
(a) the sum of Fifty Five Thousand and 00/100 Dollars ($55,000.00)
in cash, an amount equal to six months salary under the Employment Agreement,
concurrently with the execution and delivery of this Agreement;
(b) the sum of Fifty Five Thousand and 00/100 Dollars ($55,000.00)
in freely tradable shares of common stock of GlobeTel, an amount payable in lieu
of bonus for 2005 (the "Bonus Shares"), the value of which shall be based on the
fair market value for a share of common stock measured by the closing sale price
for a share of common stock at the close of trading on August 19, 2005 as
reported on the principal securities exchange on which shares of common stock
are listed (the "Fair Market Value"). The Bonus Shares shall be delivered by
GlobeTel to Xxxxxx'x brokerage account as set forth in Schedule 2(b) before the
close of business on August 24, 2005, without restrictive legend, or other
restriction on transfer, and shall be freely tradable without registration under
the Securities Act of 1933, as amended (the "Securities Act). GlobeTel agrees to
pay all taxes and governmental charges applicable to the issuance of the Bonus
Shares, other than income taxes payable by Xxxxxx in connection therewith; and
(c) the sum of Three Hundred Sixty Thousand and 00/100 Dollars
($360,000) payable in three installments of shares of common stock of GlobeTel,
as a settlement and separation payment (the "Settlement Shares"), the value of
which shall be based on the Fair Market Value for a share of common stock at the
close of trading on the last trading day prior to issuance. The Settlement
Shares shall be delivered by GlobeTel to Xxxxxx'x brokerage account as set forth
in Schedule 2(b) in accordance with the following schedule:
Issuance Date No Later Than Fair Market Value of Payment in Shares
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August 24, 2004 $122,400
January 4, 2006 $118,800
August 1, 2006 $118,800
The Settlement Shares shall be freely tradable without registration under the
Securities Act or other restriction on transfer when issued. GlobeTel agrees to
pay all taxes and governmental charges applicable to the issuance of the
Settlement Shares, other than income taxes payable by Xxxxxx in connection
therewith.
3. Treatment of Stock Options.
(a) Xxxxxx may either:
(i) exercise all of his options (the "Options") to purchase
shares of common stock ("Option Shares") concurrently with the exercise and
delivery of this Agreement; or
(ii) exercise the Options in whole or part from time to time
at any time during the option period set forth in the Option Agreement.
(b) GlobeTel hereby amends the Option Agreement to delete any
reference to the GlobeTel Stock Option Plan, including but not limited to, any
provision providing that the Option Agreement incorporates any terms of the
GlobeTel Stock Option Plan that requires a holder of Options to exercise such
options prior to the end of the option term in the event of termination of
employment, and to confirm that the Options may be exercised at any time or from
time to time during the option term set forth in the Option Agreement. GlobeTel
agrees to take such actions as may be necessary to facilitate the exercise of
the Options and the issuance of Option Shares during the option term set forth
in the Option Agreement, including, without limitation, the delivery of the
Options Shares to Xxxxxx'x brokerage account as set forth on Schedule 2(b)
following exercise of the Options.
4. Retention and Assignment of Ownership of Certain Property.
GlobeTel hereby assigns to Xxxxxx all right, title and interest that it may have
in the SysteMax Workstation, HP printer, HP laptop and cell phone, and their
respective peripheral equipment, in the possession of Xxxxxx. Xxxxxx shall
delete or cause to be deleted any and all proprietary information, trade secrets
or any other information or programs on said equipment that are the property of
GlobeTel. This shall include any work-product of Xxxxxx that was created on
behalf of GlobeTel or at GlobeTel's expense.
5. Transferability of Settlement Shares, Bonus Shares and Option
Shares.
(a) GlobeTel agrees to register, or otherwise cause the
Settlement Shares, the Bonus Shares and the Option Shares (collectively, the
"Shares") to be freely tradable without the need for registration, under the
Securities Act of 1933, as amended (the "Securities Act"), at the time of
issuance of such Shares.
(b) If, at any time, GlobeTel shall file a registration
statement registering shares of common stock GlobeTel shall include in such
registration statement, at its sole cost and expense, all of the Settlement
Shares and Option Shares, and any other Shares that (x) have not previously been
registered for resale by Xxxxxx under the Securities Act and (y) may not be
freely transferred without registration under the Securities Act, and
immediately upon effectiveness of such registration statement and the issuance
of such Shares, all such Shares shall be freely tradable by Xxxxxx without
further restriction. Notwithstanding the foregoing, if the shares being
registered on any such registration statement relate to an underwritten offering
and the managing underwriters of such offering determine that the total amount
of shares of common stock that GlobeTel or any selling shareholder intends to
include in such offering would adversely effect the success of the offering,
then the amount of Shares shall be reduced pro rata, or excluded in their
entirety, to the extent recommended by such managing underwriters.
(c) GlobeTel shall cooperate to permit the transfer of the
Shares by Xxxxxx in accordance with this Agreement, including, without
limitation, by providing appropriate instructions and opinions to GlobeTel's
transfer agent to facilitate transfer, and by providing Xxxxxx and his counsel
and any stock broker employed by Xxxxxx, as well as any prospective transferee
of Shares, with such affidavits, certificates and legal opinions as they may
reasonably request to facilitate transfer of the Shares.
6. Effect of Sale. In the event that GlobeTel, its subsidiary,
Sanswire Networks LLC, or any material proprietary technology of GlobeTel or its
subsidiaries is sold or otherwise transferred or disposed of (each a "Sale
Event"), GlobeTel shall take all actions necessary to:
(i) immediately issue all outstanding installments of
Settlement Shares;
(ii) cause any Shares that (x) have not previously been
registered under the Securities Act and (y) may not be transferred without
registration under the Securities Act, including, without limitation, by filing
a registration statement under the Securities Act registering such Shares to
become freely tradable by Xxxxxx within fifteen (15) days of the Sales Event;
and
(iii) in the case of a merger or other sale of GlobeTel,
ensure that Xxxxxx receives consideration for Shares held by him that is equal
or greater in value to the consideration payable to any other holders of shares
of common stock.
7. Mutual Release. In consideration of the agreements and mutual
promises made herein, GlobeTel, on the one hand, and Xxxxxx, on the other hand,
hereby mutually release and forever discharge each other, from all actions,
suits, debts, dues, sums of money, accounts, covenants, contracts,
controversies, agreements, trespasses, damages, judgments, claims, demands and
all other liabilities and obligations whatsoever, in law or in equity, known or
unknown, existing or which may arise in the future, and fixed or contingent
(each a "Claim"), that the parties ever had, now has or hereafter, can, shall or
may have, from any matter, cause or thing whatsoever, from the beginning of the
world through the date hereof, other than the parties' respective obligations
under this Agreement and the other agreements contemplated hereby. The parties
represent that no portion of any Claim has been assigned or transferred by
subrogation or otherwise to any other person, firm, or entity.
8. Liquidated Damages. In the event that GlobeTel breaches any of
its obligations hereunder, GlobeTel hereby agrees to pay as liquidated damages
for each individual breach, and not as a penalty, an amount equal to One Hundred
Fifty Percent (150%) of the Fair Market Value of the Shares, including, without
limitation, any (x) Option Shares issuable under the Option Agreement or (y)
Settlement Shares issuable under Section 2.(c) of this Agreement, not previously
disposed of by Xxxxxx as of the date of each breach. GlobeTel will upon demand
pay to Xxxxxx the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel, which Xxxxxx may incur in
connection with the exercise or enforcement of his rights under this Agreement
or the failure by GlobeTel to perform or observe any of the provisions of this
Agreement.
9. Miscellaneous
(a) Entire Agreement. This Agreement contains the entire
agreement and understanding of the parties, and supercedes all prior agreements
and understandings, written or oral; is irrevocable and may not be modified or
terminated except to the extent, if any, set forth in a writing signed by the
parties.
(b) Governing Law; Jurisdiction and Venue. This Agreement
shall be governed by and construed in accordance with Tennessee law without
giving effect to the choice of law provisions thereof. Any legal proceeding
arising out of or relating to this Agreement shall be brought in any state court
having jurisdiction located in Davidson County, Tennessee, or in the United
States District Court, Middle District of Tennessee. Each party consents to the
jurisdiction of such courts in any legal proceeding and waives any objection to
the laying of venue of any legal action in any such court.
(c) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be and constitute an original and one and
the same instrument. A copy or facsimile copy of this Agreement and any
signatures hereon shall be considered for all purposes as originals.
(d) Severability. If any term, provision or portion of this
Agreement is held to be unlawful, in conflict with federal, state or other
applicable law or otherwise enforceable, the remainder of this Agreement shall
continue in full force and effect to the same extent as if the illegal or
invalid provision was not included in this Agreement and the remainder of the
Agreement shall be enforced to give effect to the fullest extent legally
permissible the intent and purposes of the parties as evidenced by this
Agreement.
(e) Notices. Any notice or other communication required or
permitted hereunder shall be in writing and delivered at the addresses set forth
below, or mailed by registered or certified mail, return receipt requested,
postage prepaid, or by any courier service of recognized national standing,
addressed as follows, or to such other address or addresses as may be hereafter
furnished by one party to the other party in compliance with the terms hereof:
If to Xxxxxx, to:
Xxxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxx
Xxxxxxxxxxxxxx, XX 00000
With a copy to:
Xxxxx, McClosky, Smith,
Xxxxxxxx & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
If to GlobeTel, to:
GlobeTel Communications
0000 Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq., General Counsel
11. Effectiveness. This Agreement shall bind and benefit Xxxxxx and
GlobeTel but shall not become effective or enforceable in any respect until the
date executed and delivered by the each of the parties (the "Effective Date").
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties as of the dates set forth below.
Signed, sealed and delivered
in the presence of:
-------------------------------- -----------------------------------
Witness Xxxxx X. Xxxxxx
Date: , 2005
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Witness
STATE OF _______________ )
) ss:
COUNTY OF _____________ )
On this day of __________, 2005, before me a Notary Public, personally
appeared Xxxxx X. Xxxxxx who executed the above Mutual Release and Separation
Agreement, and acknowledged the same to be his free act and deed.
Personally Known: or Produced Identification: .
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Type of Identification Produced: .
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NOTARY PUBLIC
Sign
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State of __________ at Large
My Commission Expires:
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Serial Number, if any:
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GLOBETEL COMMUNICATIONS CORP., a
Delaware corporation
-------------------------------- By: -----------------------------------
Witness Name:
Title:
Date: , 2005
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Witness
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
On this __ day of __________, 2005, before me a Notary Public, personally
appeared _______________________________, as the ___________________________, of
GLOBETEL COMMUNICATIONS CORP., a Delaware corporation, who executed the above
Mutual Release and Separation Agreement, and acknowledged the same to be his
free act and deed, on behalf of the corporation and partnership.
Personally Known: or Produced Identification: .
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Type of Identification Produced: .
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NOTARY PUBLIC
Sign
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State of __________ at Large
My Commission Expires:
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Serial Number, if any:
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