EMPLOYMENT AGREEMENT
Exhibit
10.
THIS
EMPLOYMENT AGREEMENT (this
“Agreement”) is made
as of the 1st day of
January, 2005 (the “Effective
Date”) by and
between Acceris Communications Inc., a Florida corporation (the “Company”), and
Xxxx X. Xxxxxxxx (“Executive”).
The
Executive is skilled in business and financial matters and possesses knowledge
of the business, products and operations of the Company. The parties hereto
believe that it is in their respective interests to enter into an employment
agreement whereby, for the consideration specified herein, Executive shall
provide the services specified herein. Certain definitions are set forth in
Section
7 of this
Agreement.
The
parties hereto agree as follows:
Section
1. Employment.
(a)
Employment
Period. The
Company agrees to employ Executive and Executive accepts such employment for the
period (the ‘Employment
Period”)
beginning as of the Effective Date and ending upon (a) the first anniversary of
the Effective Date or (b) such earlier date upon which the employment of the
Executive shall terminate in accordance with Section
2 herein
(the date of termination being hereinafter called the “Termination
Date”). The
Employment Period may be extended by written agreement of the parties hereto.
Any employment of Executive by the Company following the expiration of the
Employment Period shall be “at will” and may be terminated by the Company at any
time without any liability other than the payment of any base salary and earned
bonus through the effective date of termination.
(b) Position
and Duties.
(i) During
the Employment Period, Executive shall serve as the Vice President of
Accounting, Controller and Chief Accounting Officer of the Company and the
Executive shall report to the Chief Financial Officer of the Company. Executive
shall perform all duties and shall have all powers which are commonly incident
to his office as well as all powers that are delegated to Executive by the Chief
Financial Officer.
(ii) Executive
shall devote his best efforts and his full business time and attention to the
business and affairs of the Company, except for permitted vacation periods in
accordance with the Company’s policy, periods of illness or other incapacity,
and reasonable time spent with respect to civic and charitable activities,
provided that none of such activities shall materially interfere with
Executive’s duties to the Company or its Subsidiaries.
(c) Salary.
Bonus and Benefits.
(i) During
the Employment Period, the Company will pay Executive a base salary at the rate
of $150,000 per annum (the “Annual
Base Salary”). The
Annual Base Salary shall be paid in such installments as is the policy of the
Company with respect to executive officers of the Company.
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(ii) Commencing
with the Effective Date, Executive shall be eligible for a discretionary annual
bonus of up to twenty-five percent (25%) of Executive’s Annual Base Salary (the
“Bonus”). The amount of any Bonus to be awarded shall be determined pursuant to
the Acceris Management System, based on performance criteria established at the
beginning of each fiscal year, and the timing of such award and the payment of
any such Bonus shall be consistent with the practice of the Company.
(iii)
Executive shall be entitled to participate in all employee stock option, pension
and welfare benefit plans, programs and practices maintained by the Company for
its employees generally in accordance with the terms of such plans, programs and
practices as in effect from time to time, and in any other insurance, pension,
retirement or welfare benefit plans, programs and practices which the Company
generally provides to its executives from time to time.
(d) Expenses. The
Company shall pay, or reimburse the Executive (at the Company’s option), in
accordance with policies established by the Company, for all reasonable and
necessary expenses and other disbursements incurred by the Executive for or on
behalf of the Company in the performance of his duties hereunder, including,
without limitation, travel on behalf of or in connection with his services for
the Company in a manner customary for the Company’s senior executives, including
food and lodging expenses while the Executive is away from home performing
services for the Company.
(e) Workplace
and Work Schedule.
Executive’s workplace shall be the Company’s office in Pittsburgh, Pennsylvania.
Executive shall be entitled to such holidays as are established by the policies
of the Company. Executive shall be entitled to three (3) weeks (or more, in
accordance with the Company’s vacation policy) of vacation per year, which may
be taken in various periods, subject to the Company’s needs.
Section
2. Termination
Of Employment.
(a) Death
or Disability. The
Company may terminate the Executive’s employment hereunder due to the
Executive’s death or Disability. If the Executive dies during the Employment
Period, the Termination Date shall be deemed to be the date of the Executive’s
death.
(b) Cause. The
Company may terminate the employment of Executive hereunder at any time for
Cause (such termination being referred to herein as a “Termination
for Cause”) by
giving the Executive written notice of such termination, with such termination
to take effect as of the date of such notice.
(c) Without
Cause. The
Company may terminate the employment of the Executive at any time during the
Employment Period without Cause by giving the Executive written notice of such
termination, with such termination to take effect as of the date of such
notice.
(d) Good
Reason,
Executive may terminate his employment hereunder for Good Reason by providing
written notice to the Company within 45 days of his knowledge of the event
constituting Good Reason. Notwithstanding the foregoing provisions to the
contrary, in no event shall the Executive terminate his employment hereunder for
Good Reason without providing the Company with at least fifteen (15) days’ prior
written Notice of Termination given by the Executive to the Company and an
opportunity for the Company to cure within that fifteen (15) day period the Good
Reason which the Executive believes provides him with grounds to terminate his
employment.
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(e) Notice
of Termination. Any
termination pursuant to this Section
2 shall be
communicated to Executive or the Chief Financial Officer, as applicable, by
Notice of Termination.
Section
3. Effect Of Termination
Of Employment.
(a) Death
or Disability. Upon
the termination of Executive’s employment hereunder due to death or Disability
pursuant to Section
2(a), neither
Executive nor his beneficiary or estate shall have any further rights or claims
against the Company under this Agreement, except the right to receive (i) the
unpaid portion, if any, of the Annual Base Salary provided for in Section
1,
computed on a pro rata basis to the Termination Date (based on the actual number
of days elapsed over a year of 365 or 366 days, as applicable), (ii) the unpaid
portion, if any, of the Bonus and (iii) reimbursement for any expenses for which
Executive shall not have been reimbursed as provided for in Section
1 (such
amounts being collectively referred to as “Accrued
Compensation”).
(b) Cause. Upon a
termination of Executive’s employment hereunder by the Company for Cause
pursuant to Section
2(b), neither
Executive nor his beneficiary or estate shall have any further rights or claims
against the Company under this Agreement, except the right to receive (i) the
unpaid portion, if any, of the Annual Base Salary provided for in Section
1,
computed on a pro rata basis to the Termination Date (based on the actual number
of days elapsed over a year of 365 or 366 days, as applicable) and (ii)
reimbursement for any expenses for which the Executive shall not have been
reimbursed as provided for in Section
1.
(c) Without
Cause. Upon a
termination of Executive’s employment hereunder by the Company without Cause
pursuant to Section
2(c), neither
Executive nor his beneficiary or estate shall have any further rights or claims
against the Company under this Agreement, except the right to
receive:
(i) any
Accrued Compensation;
(ii) off
payroll, an amount equal to the amount of the Annual Base Salary, payable in
accordance with Section
1
(c)(i),
Executive would have received for the period commencing on the Termination Date
and ending six months after the Termination Date; and
(iii)
provided that Executive has met, as of the Termination Date, the performance
criteria established with respect to the Bonus for the fiscal year in which the
Termination Date occurs, the pro rata portion of the Bonus for such fiscal year
(based on the actual number of days elapsed from the beginning of the fiscal
year to the Termination Date), the timing of the payment of any such Bonus to be
consistent with the past practice of the Company.
(d) Upon a
termination of the Executive’s employment hereunder by the Executive for Good
Reason pursuant to Section
2(d), neither
the Executive nor his beneficiary or estate shall have any further rights or
claims against the Company under this Agreement, except the right to
receive:
(i) any
Accrued Compensation; and
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(ii) off
payroll, an amount equal to the amount of the Annual Base Salary, payable in
accordance with Section
1(c)(i),
Executive would have received for the period commencing on the Termination Date
and ending six months after the Termination Date.
(e) Release. Executive
acknowledges and agrees that the payments provided for in Sections
3(c)(ii) and 3(d)(ii)
constitute liquidated damages for any claim of breach of contract under this
Agreement as it relates to termination of his employment during the Employment
Period without Cause pursuant to Section
2(c) or with
Good Reason pursuant to Section
2(d).
Notwithstanding the foregoing, if Executive is entitled to the payments set
forth in Section
3(c)(ii) or
Section
3(d)(ii) of this
Agreement, Executive shall execute and agree to be bound by an agreement, in
form and substance satisfactory to the Company (the “Release”), relating to the
waiver and general release of any and all claims arising out of or relating to
Executive’s employment and termination of employment, and the Company shall have
no obligation to make the payments contemplated under Section
3(c)(ii) or
Section
3(d)(ii), as the
case may be if Executive fails to execute such Release or seeks to revoke such
Release. In addition, if Executive should violate or threaten to violate the
terms of Section
4 of this
Agreement, the continuing obligations of the Company to make the payments
contemplated under Section
3(c)(ii) or
Section
3(d)(ii), as the
case may be, shall immediately terminate.
(f) Mitigation.
Notwithstanding the foregoing and subject to the limitations on competition
hereunder, the amount of any payment by the Company provided for in Section
3(c)(ii) or
Section
3(d)(ii), as the
case may be, shall be reduced by the amount of any compensation earned by the
Executive from a competitor of the Company or any Subsidiary during the period
such payment is to be made by the Company.
Section
4. Confidentiality.
(a) Executive
agrees that at all times, both during and for two years after Executive’s
employment by the Company, Executive will hold in a fiduciary capacity for the
benefit of the Company and not use or disclose to any third party any trade
secret, or other information, knowledge or data not generally known to the
public which Executive may have learned, discovered, developed, conceived,
originated, prepared or received during or as a result of Executive’s employment
by the Company or any Subsidiary or Affiliate with respect to the operations,
businesses, affairs, products, services, technology, intellectual properties,
Agents, customers, clients, pricing of products or services, policies,
procedures, accounts, personnel, concepts, format, style, techniques or software
of the Company or any Subsidiary or Affiliate of the Company (“Proprietary
Information”).
Executive agrees that Company’s Proprietary Information includes, without
limitation, the business or other needs, requirements, preferences or other
information relating to Agents and customers of the Company or any Subsidiary or
Affiliate of the Company, acquisition targets of the Company or any Subsidiary
or Affiliate of the Company and all information or data collected by the Company
with reference thereto. Executive agrees to comply with any and all procedures
which the Company may adopt from time to time to preserve the confidentiality of
any trade secret or other non-public proprietary, information, knowledge or
data; that the absence of any legend indicating the confidentiality of any
materials will not give rise to an inference that the contents thereof or
information derived there from are not confidential; that immediately following
the termination of Executive’s employment by the Company, Executive will return
to Company all materials, except for Executive’s personal items, provided to
Executive by the Company during the term hereof, all works created by Executive
or others during the term of Executive’s employment hereunder and all copies
thereof; and that the Company may, in its sole discretion, upon or after
termination of Executive’s employment by the Company, notify Executive’s new
employer, clients or other parties that Executive has had access to certain
trade secrets, information, knowledge or data which Executive is under a
continuing obligation not to use or disclose. Notwithstanding the foregoing, the
limitations imposed on Executive pursuant to this Section
4(a) shall
not apply to Executive’s (i) compliance with legal process or subpoena or (ii)
statements in response to inquiry from a court or regulatory body; provided,
that Executive gives the Company reasonable prior written notice of such
process, subpoena or request.
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(b) In order
to protect the Proprietary Information, Executive agrees that for a period of
twelve (12) months following the expiration or termination of Executive’s
employment hereunder, Executive will not, directly or indirectly, for
Executive’s own account or as a partner, joint venturer, employee, agent, or
consultant: (a) employ as an employee, engage as an independent contractor or
agent or otherwise retain or solicit or seek to so employ, engage, retain or
solicit any person who, during any portion of the two (2) years prior to the
date of expiration or termination of Executive’s employment was, directly or
indirectly, employed as an employee, engaged as an independent contractor or
Agent or otherwise retained by the Company or any Subsidiary or Affiliate of the
Company, save and except that Executive may employ former employees of the
Company’s finance department whose employment has been terminated by the
Company; or (b) induce any person or entity (except for individuals considered
to be clerical or secretarial staff) to leave his or her employment with the
Company, terminate an independent contractor or Agent relationship with the
Company or terminate or reduce any contractual relationship with Company or any
Subsidiary or Affiliate of the Company or (c) directly or indirectly induce or
influence any Agent, customer, supplier, or other person that has a business
relationship with the Company or any Subsidiary or Affiliate of the Company to
discontinue or reduce the extent of such relationship. Notwithstanding the
foregoing, the parties agree that Executive shall not be deemed to have violated
the provisions of this Section
4(b) in the
event that any Person of which Executive is a partner, joint venturer, employee,
agent or consultant takes any action that would otherwise violate the terms of
this Section
4(b), so
long as such action is taken without the knowledge of Executive and not with
respect to any Person identified by Executive to the Person taking such
action.
(c) All
processes, improvements, formulations, ideas, inventions, designs and
discoveries, whether patentable or not (collectively “Discoveries”) and all
patents, copyrights, trademarks, and other intangible rights (collectively
“Intellectual
Property Rights”) that
may be conceived or developed by Executive either alone or with others, during
the Employment Period or any extension or renewal thereof, whether or not
conceived or developed during working hours, and with respect to which any
equipment, supplies, facilities, or trade secret information of the Company or
any Subsidiary or Affiliate of the Company was used, or that related to the
business of the Company or any Subsidiary or Affiliate of the Company or to the
Company’s or any Subsidiary’s or Affiliate’s actual or demonstrably anticipated
research and development, or that result from any work performed by Executive
for the Company, shall be the sole property of the Company. As provided in
Section 2870 of the California Labor Code, the requirement to assign inventions
hereunder shall not apply to an invention that Executive develops entirely on
his own time without using the Company’s or any Subsidiary’s or Affiliate’s
equipment, supplies, facilities, or trade secret information,
5
except
for those inventions that either (a) relate, at the time of conception or
reduction to practice of the invention to the Company’s or any Subsidiary’s or
Affiliate’s business, or actual or demonstrably anticipated research or
development of the Company or any Subsidiary or Affiliate of the Company; or (b)
result from any work performed by Executive for the Company or any Subsidiary or
Affiliate of the Company. Executive shall take all action and execute and
deliver all agreements, assignments and other documents, including, without
limitation, all patent applications and assignments, requested by the Company or
any Subsidiary or Affiliate of the Company to establish the rights of the
Company or any Subsidiary or Affiliate of the Company under this Section
4(c) and to
vest in the Company or any Subsidiary or Affiliate of the Company title to all
Discoveries and Intellectual Property Rights which are the property of the
Company or any Subsidiary or Affiliate of the Company under this Section
4(c).
Executive shall disclose to the Company all Discoveries and Intellectual
Property Rights conceived during the term of employment which Executive believes
meet the criteria set forth in California Labor Code Section 2870, whether or
not the property of the Company or any Subsidiary or Affiliate of the Company
under the terms of the preceding sentence, provided that such disclosure shall
be received by the Company in confidence to the extent it pertains to
Discoveries and Intellectual Property Rights which are not the property of the
Company under this Section
4(c).
(d) Because
the breach or attempted or threatened breach of this Section
4 may
result in immediate and irreparable injury to the Company for which the Company
may not have an adequate remedy at law, the Company shall be entitled, in
addition to all other remedies, to a decree of specific performance thereof and
to a temporary and permanent injunction enjoining such breach, without posting
bond or furnishing similar security. The parties’ obligations under this
Section
4 shall
survive any termination of Executive’s employment or this
Agreement.
Section
5. Acknowledgments
By Executive.
Executive
understands that the restrictions contained in Section
4 herein
may limit the ability of Executive to earn a livelihood in a competing business,
but Executive nevertheless believes that Executive has received and will receive
sufficient consideration and other benefits as an employee of the Company and as
otherwise provided hereunder to clearly justify such restrictions which, in any
event (given the education, skills and ability of Executive), Executive does not
believe would prevent him from earning a livelihood
Section
6. Tax
Withholding.
The
Company may withhold from any compensation or severance payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
Section
7. Definitions.
“Affiliate” of any
particular Person means (i) any other Person controlling, controlled by, or
under common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities, by
contract, or otherwise, and (ii) if such Person is a partnership, any partner
thereof.
“Agent” means
any Person which has received or is entitled to receive a commission from the
Company related to the sale or marketing of the Company’s products or
services.
6
“Board” means
the Board of Directors of the Company.
“Cause” means
(i) Executive’s conviction of, or plea of guilty or nolo
contendere to, a
crime constituting a felony, (ii) gross misconduct by the Executive that is
materially inconsistent with the terms hereof, (iii) material failure by the
Executive to perform his duties, which nonperformance continues after written
notice thereof and a fifteen (15) day chance to cure, (iv) the Executive’s
material breach of this Agreement, (v) habitual drug or alcohol use which
impairs the ability of Executive to perform his duties hereunder, (vi)
unauthorized breach of the company’s code of Conduct, (vi) Executive’s engaging
in fraud, embezzlement or any other illegal conduct with respect to the Company
which acts are harmful to, either financially, or to the business reputation of,
the Company or (vii) breach of the fiduciary duty owed by Executive to the
Company or of any of its Subsidiaries or Affiliates.
“Disability” means a
physical or mental infirmity which impairs Executive’s ability to perform
substantially his duties for a total period exceeding six (6) months during the
Employment Period or for a period of four (4) consecutive months. Disability
shall be determined by a physician acceptable to both the Company and Executive,
or, if the Company and Executive cannot agree upon a physician within 15 days
after the Company claims that Executive is suffering from a Disability, by a
physician selected by two physicians, one designated by each of the Company and
Executive. Executive’s failure to submit to any physical examination by any such
physician after such physician has given reasonable notice of time and place of
such examination shall be conclusive evidence of Executive’s inability to
perform his duties hereunder.
“Good
Reason” means,
during the Employment Period and without Executive’s consent:
(i) a
material diminution of Executive’s title, reporting structure, position or
responsibilities or
(ii) a
reduction in, or failure to pay, Executive’s Annual Base Salary or any reduction
in the benefits being required to be provided herein or any other material
breach of this Agreement.
“Notice
of Termination” means a
written notice which indicates the Termination Date, the specific termination
provision in this Agreement relied upon, and the facts and circumstances, if
any, claimed to provide a basis for such termination.
“Person” means
an individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof
“Subsidiary” means
any corporation or other entity of which the securities having a majority of the
ordinary voting power in electing the board of directors are, at the time as of
which any determination is being made, owned by the Company either directly or
through one or more Subsidiaries.
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Section
8. Notices.
Any
notice provided for in this Agreement must be in writing and must be either
personally delivered, mailed by first class mail (postage prepaid and. return
receipt requested) or sent by reputable overnight courier service’ (charges
prepaid) to the recipient at the address below indicated:
If to
Company:
0000
Xxxxxxxx Xxxx Xxxxxx
Xxx
Xxxxx, Xxxxxxxxxx 00000
|
Attention: |
Chief
Executive Officer |
If to
Executive:
000
Xxxxxx Xxxx Xxxxx
Xxxxxxxxx
Xxx., XX 00000
or such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending party. Any notice
under this Agreement will be deemed to have been given when so delivered or sent
or, if mailed, five days after deposit in the U.S. mail.
Section
9. General
Provisions.
(a) Severability.
Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(b) Complete
Agreement. This
Agreement, those documents expressly referred to herein and other documents of
even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
(c) Counterparts. This
Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement.
(d) Successors
and Assigns. Except
as otherwise provided herein, this Agreement shall bind and inure to the benefit
of and be enforceable by Executive, the Company and their respective successors
and assigns; provided that the
rights and obligations of Executive under this Agreement shall not be
assignable.
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(e) Choice
of Law. This
Agreement will be governed by and construed in accordance with the internal laws
of the State of Delaware, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
(f) Remedies. Except
as provided in Section
4(d) hereof,
if any contest or dispute arises between the parties with respect to this
Agreement, such contest or dispute shall be submitted to binding arbitration for
resolution in New York City in accordance with the rules and procedures of the
American Arbitration Association then in effect. The decision of the arbitrator
shall be final and binding on both parties, and any court of competent
jurisdiction may enter judgment upon the award. Each party shall pay its own
legal fees and expenses incurred in connection therewith.
(g) Amendment
and Waiver. The
provisions of this Agreement may be amended and waived only with the prior
written consent of the Company and Executive.
(h) Insurance. The
Company, at its discretion, may apply for and procure in its own name and for
its own benefit life and/or disability insurance on Executive in any amount or
amounts considered available. Executive agrees to cooperate in any medical or
other examination, supply any information, and to execute and deliver any
applications or other instruments in writing as may be reasonably necessary to
obtain and constitute such insurance. Executive hereby represents that he has no
reason to believe that his life is not insurable at rates now prevailing for
healthy men of his age.
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement on
the date noted below.
By:
_________________________________ Date:
_____________________
Name:
Xxxx
Xxxxxxxx
Its: Chief
Financial Officer
______________________________________ Date:
_____________________
Xxxx X.
Xxxxxxxx
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