EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered as of this 1st day
of September, 1997 by and between Ursus Telecom Corporation, a Florida
corporation ("Employer"), and Xxxxxxx XxXxxx ("Employee").
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the operation of a telecommunications
business (the "Business") and desires to employ the Employee in the capacity
described herein; and
WHEREAS, the Employee desires to accept such employment under the terms
and conditions provided herein,
NOW, THEREFORE, in consideration of the premises, and mutual promises
hereinafter set forth, and other good and valuable consideration in hand and
received, the parties hereto hereby agree as follows:
1. Employment. Upon and subject to the terms, conditions and other
provisions of this Agreement, the Employer hereby employs the Employee and the
Employee hereby accepts employment and agrees to exercise and perform faithfully
and to the best of his ability on behalf of the Employer, those duties described
on the "Job Description Memorandum" attached hereto and made a part hereof as
Exhibit A. Employee shall likewise perform such other duties for Employer, or
any subsidiary, affiliate, or division of the Employer as the Employer may
reasonably request.
2. Employee's Services and Duties. During the term of this Agreement, the
Employee shall observe and conform to the policies and directions promulgated
from time to time by the Employer and devote his full business time, energy,
ability, attention and skill to his employment hereunder; provided, however, the
Employer expressly acknowledges and agrees that the Employee may continue to
perform services for VCSI provided that doing so does not create a conflict of
interest or unreasonably interfere with the Employee's performance of his duties
hereunder. The services to be performed by the Employee hereunder may be
changed, expanded or adjusted from time to time at the reasonable request of the
Employer, provided that such services shall at all times be consistent with
those described in Section 1 hereof. The Employee shall perform the services
contemplated under this Agreement at such location or locations as the Employer
may from time to time reasonably direct, but Employee shall primarily be based
in Florida. Employee shall, however, travel to other locations at such time as
may be appropriate for the performance of his duties and as reasonably directed
by Employer. Employee acknowledges that the performance of his duties shall
include extensive foreign travel; provided, however, that in the event that
Employee is required to travel for a period of greater than 28 consecutive
calendar days, then during the next 21 consecutive calendar days he will not be
required to travel for more than 10 calendar days (whether or not consecutive)
unless upon the last day of such travel Employee then works in Florida for the
next 21 consecutive calendar days.
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3. Term. Unless sooner terminated as provided in this Agreement, the term
of the Employee's employment by the Employer pursuant to this Agreement shall
commence on September 1, 1997 and shall continue until August 31, 1999;
provided, however, such term shall automatically be extended for additional
one-year periods (i.e., September 1 through the next August 31) unless either
the Employee or the Employer gives the other written notice of his or its
respective desire not to extend such term on or before June 30, 1999 and/or each
respective June 30th thereafter.
4. Compensation and Other Matters. As compensation in full for the
services to be rendered by the Employee hereunder, the Employer shall pay, and
the Employee shall accept, the compensation set forth on the Job Description
Memorandum, which compensation shall be subject to all applicable federal, state
and local withholding taxes and paid in accordance with the Employer's payroll
policy. Employee will not accept any rebates, "kickbacks" or other third party
payments unless all such amounts are immediately remitted in full to Employer
upon receipt by Employee. The Employee also shall receive such additional
compensation and benefits as set forth in Exhibit A and as the Employer may
provide to its employees in the Employer's Employee Manual, which currently
provides, without limitation, (i) family medical and dental coverage, (ii) life
insurance in the amount of $100,000, (iii) short and long term disability
insurance, (iv) accidental death and dismemberment insurance, (v) vacation, (vi)
holidays and (vii) sick leave; provided, however, the Employee expressly
acknowledges and agrees that the Employer may, in its sole and absolute
discretion, add to, delete from or otherwise change such Employee Manual and/or
compensation and benefits at any time. The Employee is also eligible for a
discretionary bonus in December 1997 and any respective December thereafter as
Employer may determine in its sole and absolute discretion, but Employer shall
not be obligated to provide any such bonus to Employee during the term hereof.
5. Certain Business Expenses. The Employer shall reimburse the Employee
for all ordinary, necessary and reasonable expenses incurred by Employee in the
course of performing his duties and obligations hereunder and paid by the
Employee on behalf of the Employer, to the extent reasonable and necessary in
the good faith judgment of Employer. Such reimbursement shall be made upon the
prompt presentation by the Employee of an itemized written request for
reimbursement thereof. The itemized request shall be supported by documentation
and be submitted on forms approved by Employer.
6. Covenant of Non-Disclosure. The Employee acknowledges that, because of
his employment hereunder, he will be in a confidential relationship with the
Employer and will have access to confidential information and trade secrets of
Employer concerning the Business. The parties recognize and acknowledge that the
Business is very sophisticated and technical, and that Employer has developed,
and over the course of time, will develop, substantial goodwill, valuable
relationships with customers, trade secrets and particular means or methods of
conducting the Business, all of which are worthy of protection. Employee
recognizes and acknowledges that during the term of his employment with the
Employer he may acquire knowledge of valuable trade secrets, confidential
matters, and proprietary information concerning the Business and its existing
and potential customers (collectively, the "Confidential Information"). Such
Confidential Information includes, without limitation, lists of the Employer's
customers and potential customers, lists of the Employer's suppliers and
potential suppliers, lists of the Employer's agents and potential agents,
information contained within the Employer's books and records, the Employer's
customer management software program, the methods of operating the Business,
information concerning the telecommunications industry as same relates to the
Employer, the names of other business contacts of the Employer, the
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Employer's pricing practices and information concerning prices at which the
Employer purchases supplies and services. The Employee hereby agrees to maintain
the confidentiality of all Confidential Information to which Employee is exposed
while employed by the Employer and at all times thereafter, and agrees that he
will not, directly or indirectly, at any time
(a) disclose such Confidential Information to any natural or legal person
(collectively, "Persons"), other than authorized employees or agents of the
Employer, for any reason or purpose whatsoever, or
(b) under any circumstances make use of any Confidential Information for his own
purposes or for the benefit of any Person other than the Employer or its
affiliates. To this effect, Employee agrees that none of the Employer's written
Confidential Information, including, but not limited to any printed material,
material in process and customer lists or records, may be copied or removed from
the Employer's premises by Employee or any other Person at the direction of or
with the permission of the Employee, unless authorized by the Chief Executive
Officer of the Employer.
7. Covenant of Employer's Proprietary Interest in Property.
7.1 Any patents, inventions, discoveries, applications or processes,
software and computer programs devised, planned, applied, created, discovered,
or invented by the Employee in the course of his employment under this Agreement
or which pertain to any aspect of the Business, or its subsidiaries, affiliates
or customers, shall be the sole and absolute property of the Employer, and the
Employee shall make a prompt report thereof to the Employer and promptly execute
any and all documents reasonably requested to assure the Employer the full and
complete ownership thereof.
7.2. All records, files, lists, drawings, software, such as the Employer's
customer management software program, documents, equipment and similar items
relating to the Business which Employee shall prepare for, or receive from the
Employer, shall remain the Employer's sole and exclusive property. Upon
termination of employment under this Agreement the Employee shall return
promptly to the Employer all property of the Employer in the Employee's
possession, and the Employee represents that he will not copy, or cause to be
copied, printed, summarized or compiled any software, documents or other
materials owned by the Employer.
8. Covenant of Non-Competition.
8.1 During the term of this Agreement and for a period of one (1) year
thereafter, Employee shall not directly or indirectly, including, without
limitation, through entities he controls, solely or jointly with others,
(i) carry on or engage or participate in any business the same as or
substantially similar to or in competition with the Business,
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(ii) render any services to or, directly or indirectly, have any interest (other
than an interest of 5% or less of a publicly traded company) as a shareholder,
owner, partner (general or limited), agent, consultant, lender or guarantor or
any other interest, in any entity or business engaged in the rendering of
services which are similar to those rendered by Employer in its operation of the
Business, or
(iii) otherwise engage in competition with the Business.
8.2 The parties hereto acknowledge that the Business is currently proposed
to be conducted, and will be conducted by the Employer in the locations
specified in Exhibit B hereto (the "Territory"). The covenants and other
provisions contained in this Section 8 shall cover the activities of Employee in
every part of the Territory. In the view of the foregoing, the parties hereto
agree that the Territory is reasonable in scope.
8.3 It is the intent of the parties hereto that this Section 8 be enforced
to the fullest extent permissible under the laws of Florida or any other
applicable jurisdiction. Each of the parties hereto recognizes that the duration
of the covenants and territorial restrictions contained in this Section 8 are
properly required for the adequate protection of the Business being established
by Employer and Employer's conduct of the Business thereafter. Accordingly, to
the extent that any covenant in this Section 8 or a portion thereof or other
provision contained in this Section 8 shall be deemed to be illegal,
unenforceable, or unreasonable with respect to any part of the Territory or the
duration of any covenant, such covenant shall be reformed such that the
restrictions imposed upon Employee is equal to the maximum restriction that
would be permissible under applicable law. Moreover, each provision of this
Section 8 is intended to be severable, and in the event that any one or more of
the provisions contained in this Section 8 shall for any reason be adjudicated
to be illegal, invalid, or unenforceable, the same shall not affect the
legality, validity, or enforceability of any other provision of this Section 8,
but this Section 8 shall be construed as if such illegal, invalid or
unenforceable provision had not been contained therein. The provisions of this
Section 8 shall be interpreted in a reasonable manner to effect the intentions
of the parties and this Section 8.
9. Enforcement of Covenants.
The parties hereto acknowledge that
(i) the covenants and the restrictions contained in Section 6, 7 and 8 are
necessary, fundamental, and required for the protection of the Business;
(ii) such covenants relate to matters which are of a special, unique, and
extraordinary character that gives each of such covenants a special, unique and
extraordinary value; and
(iii) a breach of any such covenants or any other provisions of said Sections 6,
7 or 8 will result in loss of goodwill, other irreparable harm and damages to
the Employer which cannot be adequately compensated by a monetary award.
Accordingly, it is expressly agreed that in addition to all other remedies
available at law or in equity, Employer shall be entitled to the immediate
remedy of a temporary restraining order, preliminary injunction, or such other
form of injunctive or equitable relief as may be used by any court of competent
jurisdiction to restrain or enjoin any of the parties hereto from a breach or
threatened breach of any such covenants or provisions or to specifically enforce
the provisions of Sections 6, 7 and 8. Said remedies may be obtained without
proof of the actual damages that have been or will be caused to the Employer by
such breach.
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Furthermore, nothing contained in Sections 6, 7 or 8, or in this Section 9 shall
be construed to limit in any way the remedies of Employer whether hereunder or
under applicable law.
10. Employee and Employer Representation and Warranty. The Employee
warrants and represents to the Employer, and covenants with the Employer that
the execution, delivery and performance of this Agreement by the Employee does
not conflict with or violate nay provision of, or constitute a default under,
any agreement, judgment, award or decree to which the Employee is a party or by
which the Employee is bound. The Employer agrees to use its best efforts to have
its Board of Directors ratify an IRS qualified incentive stock option plan as
reflected in Exhibit A. Subject to the terms of the Employer's then existing
directors and officers liability insurance (which currently is in the amount of
$3 million dollars but which Employee acknowledges Employer may add to, delete
from or otherwise change at any time at Employee's sole and absolute
discretion). Employee will be covered by same in accordance with its terms.
Subject to the terms of the Employer's then existing by laws and in accordance
with applicable law, Employee will be indemnified for good faith actions engaged
in by him in the performance of his duties hereunder. To address Employee's
concern that in his foreign travel he might be kidnapped or wrongfully
imprisoned or detained, the Employer will inquire about the availability of
commercial insurance to cover salary and benefit continuation if such events
occur. In the event that Employer, its sole and absolute discretion, decides to
obtain such insurance for its employees, then, subject to the terms of such
insurance, the Employee will be covered by same.
11. Termination for Cause. The Employee's employment hereunder may be
terminated immediately upon written notice, by the Employer for "cause", as set
forth below. The Employee shall have no right to receive compensation for any
period commencing after the date of termination for cause. For purposes of this
agreement, the term "cause" shall mean (i) the Employee's conviction of a felony
or acts of fraud, misappropriation, embezzlement or willful damage of, or to,
any property of the Employer, or its direct or indirect subsidiaries or
affiliates, (ii) the Employee's breach of any of the terms or conditions of this
Agreement, (iii) conduct by the Employee which intentionally and adversely
affects the Business or financial condition of the Employer, or its affiliates
or (iv) the Employee is disabled and unable to perform substantially his duties
hereunder for a period of 120 consecutive calendar days or 180 non-consecutive
calendar days during any 12 month period.
12. Death During Employment. If the Employee dies during the term of his
employment under this Agreement, Employer shall pay to the estate of the
Employee the compensation which would otherwise be payable to the Employee up to
the date of death, and the Employer shall have no further obligation under this
Agreement.
13. Notices. All notices, requests, demands, communications, statements or
other documents which one party shall be required or shall desire to give to
another hereunder shall be in writing and shall be given by the parties by
personal delivery by nationally recognized overnight courier, or by certified
mail, return receipt requested, with all postage or other charges prepaid. Each
such notice, demand, communication, statement, or other document shall be
conclusively deemed to have been given when personally delivered by hand or by
courier, or seventy-two (72) hours after the date of mailing, as the case may
be. The addresses of the parties shall be the following until such time as
written notice of any change is provided to either party as aforesaid.
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If to the Employer:
Ursus Telecom Corporation
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Luca Giussani
If to the Employee:
Xxxxxxx XxXxxx
000 X. [xxxxxxxxx] Xxx.
Xxxxxxx, XX 00000
14. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof.
15. Entire Understanding. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the employment of the
Employee by the Employer, and supersedes all prior agreements, representations
and understandings, both written and oral, between the parties hereto with
respect to the subject matter hereof. Both parties acknowledge, agree and assume
equal responsibility for the drafting of this Agreement.
16. Amendments. This Agreement may not be modified or changed except by a
written instrument signed by all of the parties hereto.
17. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Florida.
18. Assignment. This Agreement shall not be assigned or assignable by
operation of law or otherwise, without the prior written consent of the party,
except that, without such consent from Employee, Employer may assign this
Agreement or any interest therein, by operation of law or otherwise, to any
successor to all or substantially all of its stock or assets, or any direct or
indirect subsidiary.
19. Severability. If any provision of this Agreement shall be deemed
invalid, unenforceable or illegal, then notwithstanding such invalidity,
unenforceability or illegality the remainder of this Agreement shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
EMPLOYEE:
/s/ Xxxxxxx XxXxxx
-------------------------------
EMPLOYER:
URSUS TELECOM CORPORATION
By: /s/ Luca Giussani SEPT. 1st, 1997
-------------------------------
Luca Giussani
Chief Executive Officer
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EXHIBIT A - JOB DESCRIPTION MEMORANDUM
The position of Vice President of Agency Relations shall include the oversight
of all of the Company's foreign Agency and Representative operations both in the
United States and overseas, Agency interface, data processing and management
systems relative to Agency and Representative processing, and other systems and
relationships as is deemed appropriate by the Company's Chief Operating Officer
and its Board of Directors. The Employee will be proposed to the Employer's
Board of Directors for consideration and election as an Officer of the Employer.
For any period for which Employee is elected to be an Officer of the Employer
during the term of Employee's Employment Agreement, he agrees to serve in such
capacity without receiving any additional compensation or benefits.
Compensation shall be One Hundred and Thirty Thousand Dollars per year
($130,000.00) paid in 26 equal installments paid every other Friday or pursuant
to the Company's payroll policy. Additionally, you will be provided with family
health coverage at the expense of the Company under the Employers Group HMO
Plan, as well as certain other benefits which are afforded to others in your
employment classification.
Starting Bonus: $40,000 when you arrive in Sunrise as an incentive bonus.
Relocation: the Company will pay the reasonable hard costs of relocating your
household to the Sunrise Florida area. This will include moving of your
household goods via truck based on the lowest of three (3) estimates, shipment
or "hiking" of up to two "2" vehicles based on the lowest of three (3)
estimates, airfare at the lowest available cost for you and your immediate
family, and up to two (2) weeks of temporary housing in the Sunrise Florida
area.
Stock Options: At the time of execution of the Employment Agreement, the Company
has no stock option plan. However, it is contemplated that the Company will
adopt and its Board of Directors will ratify an IRS qualified incentive stock
option plan ("Plan"). If a Plan is ratified you will be issued IRS qualified
incentive stock purchase options for shares equal to two percent (2%) of the
Company's outstanding common stock at the time of the execution of this
Agreement, at an option price and subject to a vesting schedule to be determined
at the sole discretion of the Company and its Board of Directors, subject to the
limitations of any appropriate law, statute or rule, subject to any dilution
resulting from the issuance of shares to anyone subsequent to the execution date
of the Employment Agreement but prior to the option issuance and exercise, and
in compliance with and subject to any limitations set forth and agreed to
between the Company and any interested underwriter or investment banking
organization in association with a public or private offering of the Company's
securities.
Reporting: You shall report to the Company's Chief Operating officer unless
otherwise notified in writing of a change in the reporting structure by the
Company's Chief Executive Officer or the Company's Board of Directors.
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EXHIBIT B - TERRITORY
The State of Florida
