1
EXHIBIT 10.15
AGREEMENT
AGREEMENT dated as of December 8, 1998, between Xxxxx Xxxxxxxx
("Xxxxxxxx"), and Long Distance International Inc., a Florida corporation (the
"Corporation").
Preliminary Statements
A. The Corporation and Xxxxxxxx are parties to an Employment
Agreement dated as of July 1, 1995 (the "Employment Agreement") pursuant to
which the Corporation agreed to employ Xxxxxxxx, and Xxxxxxxx agreed to serve,
as the Corporation's President and Co-Chief Executive Officer ("Co-CEO").
Xxxxxxxx also is a director of the Corporation.
B. The Corporation and Xxxxxxxx desire to redefine Xxxxxxxx'x
duties and to provide for an orderly transition to new senior executive
management and, upon the appointment of a successor chief executive officer, the
Corporation desires to retain Xxxxxxxx'x services, and Xxxxxxxx desire to
continue to provide services, as a director of and consultant to the
Corporation.
C. The parties desire to terminate the Employment Agreement as of
the date hereof and enter into a new agreement in order to reflect the
foregoing.
In consideration of the foregoing and the terms, conditions and mutual
covenants contained in this Agreement, the parties hereby agree to amend and
modify the terms of the Employment Agreement and to restate the Employment
Agreement in its entirety as follows:
Section 1. Engagement
(a) Xxxxxxxx hereby relinquishes voluntarily his titles
and positions as Co-CEO and President of the Corporation as of the date hereof.
The Corporation hereby agrees to continue to retain Xxxxxxxx, and Xxxxxxxx
hereby agrees to continue to be retained, as consultant of the Corporation
during the Term (as defined below). As a consultant to the Corporation,
Xxxxxxxx, in such capacity, shall be deemed to provide services to the
Corporation as an independent contractor.
(b) During the Term, Xxxxxxxx shall serve as a director
on the Board of Directors and shall have the non-executive title and position as
Vice Chairman of the Board of Directors. Xxxxxxxx shall not be entitled to
additional consideration (i.e., directors' fees) for serving as a director.
(c) During the Term, Xxxxxxxx will provide his services
to the Corporation primarily at the Corporation's executive offices in Fort
2
Lauderdale, Florida, but will be available to travel as the needs of his duties
and responsibilities require. Xxxxxxxx may provide his services to the
Corporation from time to time at the Corporation's other offices and from
Xxxxxxxx'x home office.
Section 2. Term
The term shall begin as of the date hereof shall terminate on December
31, 2001 (the "Term"). Notwithstanding the foregoing, the provision of
Xxxxxxxx'x services hereunder are subject to termination prior to expiration of
the Term in accordance with Section 7.
Section 3. Duties
(a) During the Term, Xxxxxxxx'x duties and
responsibilities shall consist of such special projects and assignments as
Xxxxxxxx and the Board of Directors or senior executive management shall
mutually agree from time to time. Such special projects may be supervised by the
Chief Executive Officer. Initially, Xxxxxxxx will assist the Vice President of
Carrier Sales in the procurement of customers and vendors to create profitable
wholesale and carrier business.
(b) Xxxxxxxx shall assist the Corporation in identifying
and attracting a qualified successor chief executive officer of the Corporation.
Upon the appointment of a successor chief executive officer, Xxxxxxxx agrees to
cooperate in providing for an orderly transition in the senior executive
management of the Corporation.
(c) Xxxxxxxx shall report to, and be under the direction
of, the Board. In the performance of his duties hereunder, Xxxxxxxx shall
coordinate with, and keep advised, the chief executive officer of the
Corporation.
Xxxxxxxx agrees that he shall devote as much of his business time and attention
as is reasonably necessary to fulfill his duties and responsibilities pursuant
to this Agreement.
Section 4. Compensation
4.01 In consideration of the services to be rendered by Xxxxxxxx
under this Agreement, the Corporation shall pay, and Xxxxxxxx shall be entitled
to receive from the Corporation, the compensation provided for in this Section
4. The Base Compensation (as defined herein) and other compensation and benefits
provided for herein may be increased by the Board.
4.02 The Corporation shall pay Xxxxxxxx a base amount of annual
compensation during the Term of $160,000 (the "Base Compensation"), payable in
equal weekly installments. If any amount of the Base Compensation is not paid by
the Corporation as provided in this Section, or is not requested or demanded by
Xxxxxxxx, payment of such amount of the Base Compensation shall not be deemed to
be waived by
2
3
Xxxxxxxx but shall accrue and remain due and payable by the Corporation promptly
upon demand by Xxxxxxxx. The obligation of the Corporation to pay such amount to
Xxxxxxxx shall remain in effect and binding on the Corporation. Subject to
Section 7, the obligation of the Corporation to pay Xxxxxxxx any Base
Compensation due on account of any period during the Term shall survive any
termination of this Agreement and shall remain in effect after such termination.
4.03 The Board of Directors of the Corporation shall review
Xxxxxxxx'x performance from time to time (and in no event less than once
annually), and, in its sole discretion, may award Xxxxxxxx a bonus based on such
performance review.
Section 5. Benefits
5.01 The Corporation will carry and maintain in full force and
effect during the Term, at its own expense and with financially sound and
reputable insurance companies, directors and officers liability insurance in
such amount, with such deductibles and covering such risks as is customarily
carried by companies engaged in the same or similar businesses and with the same
or similar risk profile.
5.02 Xxxxxxxx shall be entitled to a private office at the
executive offices of the Corporation, including an office in the executive suite
of the new premises to which the Corporation will be relocating, and shall
further be entitled to receive secretarial and other support services normally
offered by the Corporation to its senior executives. It is understood that for
so long as Xxxxxxxx Xxxxxxxxx is providing services to the Corporation, Xxxxxxxx
Xxxxxxxxx and Xxxxxxxx shall share a secretary.
5.03 Xxxxxxxx shall be entitled to participate in all retirement,
medical, dental or insurance benefits that the Corporation may make available to
its executive or administrative employees, on terms no less favorable than are
provided to such employees, including all stock option, incentive, pension,
retirement and benefits plans and arrangements and all medical, disability,
hospital, health and life insurance plans and arrangements, and to the extent
such benefits are not available to Xxxxxxxx because he is not an employee, the
Corporation shall cause the equivalent benefits to be made available to
Xxxxxxxx. Xxxxxxxx and his wife and children shall be entitled to participate in
any group health insurance plans adopted or maintained by the Corporation, on
terms no less favorable than are provided to the Corporation's executive and
administrative employees and their immediate families, as such plans may be
approved, modified and in effect from time to time. If Xxxxxxxx and his wife and
children are not entitled to participate in any plans because Xxxxxxxx is not an
employee, the Corporation shall cause benefits substantially equivalent to those
provided under any such plans to be made available to Xxxxxxxx, his wife and
children on substantially equivalent terms to the terms under any such plans.
5.04 If Xxxxxxxx'x services are terminated for any reason, either
by the Corporation or Xxxxxxxx, Xxxxxxxx shall have the right to purchase from
the Corporation any insurance policies on his life owned by the Corporation for
a price equal
3
4
to the cash surrender value of the policies at the date of termination, plus
prepaid premiums. Such right shall be exercised by Xxxxxxxx by written notice to
the Corporation given not later than sixty (60) days after such termination. The
purchase price for such policies provided for in this Section 5.04 shall be paid
by Xxxxxxxx to the Corporation upon the giving of such notice.
5.05 Xxxxxxxx shall be entitled to take paid vacation and personal
days on terms no less favorable than are provided to the Corporation's
executives, but in no event less than twenty (20) business days of vacation and
five (5) personal days annually during the Term with full payment of his Base
Compensation and other compensation and benefits by the Corporation under this
Agreement during such days. Xxxxxxxx shall receive as paid days off all national
holidays that the Corporation recognizes and observes.
Section 6. Expenses
The Corporation shall reimburse Xxxxxxxx for all reasonable business
expenses incurred by Xxxxxxxx during the Term in the furtherance of the
performance of his duties pursuant to Section 3 of this Agreement, including
expenses of travel, meals, equipment, supplies and lodging. It is understood
that Xxxxxxxx may attend approximately four (4) trade shows each year in
connection with his duties and responsibilities in the Wholesale and Carrier
Businesses.
Section 7. Termination
7.01 By the Corporation for Cause. The Corporation shall have the
right to terminate the services of Xxxxxxxx hereunder for Cause (as defined in
this Section 7.01), upon sixty (60) days' prior written notice to Xxxxxxxx.
"Cause" under this Agreement shall mean any of the following:
i) any material breach of this Agreement by Xxxxxxxx or any
material and intentional illegal conduct by Xxxxxxxx, unless
such breach or conduct is cured within such sixty (60) day
period;
ii) any intentional and material act of fraud, embezzlement,
larceny or conversion by the Consultant affecting the
Corporation; or
iii) absence of Xxxxxxxx from the performance of his duties
hereunder for more than ninety (90) consecutive business days,
other than absence caused by vacation or Disability (defined
in Section 7.02 below) of Xxxxxxxx and other than absence that
occurs due to causes beyond the control of Xxxxxxxx that are
deemed by the Board, in its reasonable discretion, to be
reasonable causes for such absence.
7.02 By Either Party upon Xxxxxxxx'x Disability. Either party shall
have the right to terminate the services of Xxxxxxxx hereunder in the event of
Xxxxxxxx'x
4
5
Disability (as defined in this Section 7.02), upon ninety (90) days'
prior written notice to the other party. "Disability" hereunder shall mean any
physical or mental incapacity, injury, disability or illness of Xxxxxxxx that
shall give rise to any substantial impairment of his effective performance of
his obligations or duties under this Agreement for any continuous period of 180
days or that shall give rise to any absence of the Employee from the performance
of his duties or obligations hereunder for any continuous period of 180 days
(any such physical or mental incapacity, injury, disability or illness, a
"Disability").
7.03 Death. In the event that Xxxxxxxx shall die during the Term,
the services of Xxxxxxxx hereunder shall be deemed to have terminated as of the
date of death without any requirement for the giving of written notice by either
party.
7.04 By Xxxxxxxx for Good Reason. (a) Xxxxxxxx shall have the right
to terminate his services hereunder for Good Reason (as defined in this Section
7.04), by giving the Corporation thirty (30) days' prior written notice of such
termination. "Good Reason" hereunder shall mean any material breach of this
Agreement by the Corporation unless such breach is cured within such thirty (30)
day period.
7.05 Upon a Change of Control. If any Change of Control (as defined
below) shall occur at any time during the Term, then Xxxxxxxx'x services
hereunder shall terminate and the Corporation shall promptly pay Xxxxxxxx an
amount equal to the compensation that would have been payable to Xxxxxxxx
through the end of the Term pursuant to Sections 4.02 of this Agreement.
For purposes hereof, a "Change of Control" shall occur or be deemed to occur if
any of the following events occur:
i) Any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than a group including any of Xxxxx Xxxxxxxx, Xxxxxxxx
Xxxxxxxxx, Advent International Corp. or any of their respective affiliates (a
"Person") is or becomes the "beneficial owner" (as defined in Rule 13(d)(3)
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 50% or more of the combined voting power of the
Corporation's then outstanding voting securities entitled to vote generally in
the election of directors (the "Outstanding Corporation Voting Securities");
provided however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (A) any redemption by the
Corporation, (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any Person controlled by the
Corporation, or (C) any acquisition by any Person pursuant to a transaction
which complies with clauses (A), (B) and (C) of paragraph (ii) below;
ii) The majority of the stockholders of the Corporation approve a
reorganization, merger or consolidation of the Corporation with any other Person
or the sale or other disposition of all or substantially all of the assets of
the Corporation (a "Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respec-
5
6
tively, of the Outstanding Corporation Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the Person resulting
from such Business Combination (including, without limitation, a Person which as
a result of such transaction owns the Corporation or all or substantially all of
the Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership of the Outstanding
Corporation Voting Securities immediately prior to such Business Combination,
(B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Corporation
or such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 50% or more of, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the Board of
Directors of the corporation resulting from such Business Combination were
members of the Board of Director at the time of the execution of the initial
agreement, or of the action of the board, providing for such Business
Combination.
7.06 In the event of any termination of Xxxxxxxx'x services
hereunder by the Corporation with Cause under Section 7.01, the Corporation
shall pay Xxxxxxxx all of his Base Compensation and other compensation, and
shall continue to provide to Xxxxxxxx all benefits provided for in this
Agreement, through the end of the sixty-day notice period specified in Section
7.01, which compensation and benefits shall be paid or provided to Xxxxxxxx at
the times specified in Section 4.
7.07 In the event of the termination of Xxxxxxxx'x services
hereunder due to Xxxxxxxx'x Disability pursuant to Section 7.02 or Xxxxxxxx'x
death pursuant to Section 7.03, the Corporation shall pay to Xxxxxxxx or to his
heirs, administrators or estate, as the case may be, twice the amount of the
Base Compensation that would have been payable to Xxxxxxxx through the end of
the Term during which such termination occurs. Such payment shall not be deemed
to be liquidated damages in connection with any breach by the Corporation of
this Agreement and shall not affect or be deemed to release or waive any other
rights or remedies of Xxxxxxxx in connection with any such breach. All
compensation required to be paid on any termination of services under this
Section 7.07 shall be paid by the Corporation to Xxxxxxxx no later than the
earlier of the end of the notice period required in connection with such
termination or sixty (60) days after the death of Xxxxxxxx.
7.08 In the event of any termination of Xxxxxxxx'x services
hereunder by the Corporation without Cause or by Xxxxxxxx for Good Reason, the
Corporation shall immediately pay Xxxxxxxx an amount equal to the compensation
that would have been payable to Xxxxxxxx through the end of the Term under
Sections 4.02 of this Agreement.
7.09 In the event of any termination of Xxxxxxxx'x services
hereunder by Xxxxxxxx for a reason other than Good Reason or Disability, the
Corporation shall pay
6
7
Xxxxxxxx the amount of his compensation and benefits through the effective date
of such termination within ten (10) days thereof.
7.10 The Corporation shall pay all legal fees and expenses incurred
by Xxxxxxxx in connection with any litigation or proceeding relating to the
payment of any compensation or amounts referred to in this Section, provided
that Xxxxxxxx prevails in part or all of such litigation or proceeding.
Section 8. Miscellaneous
8.01 This Agreement shall be governed by and interpreted and
enforced in accordance with the law of the State of Florida applicable to
contracts negotiated, entered into and to be performed in that State, without
regard to the choice or conflicts of law principles of such State. The parties
hereto consent to the jurisdiction of the federal and state courts located in
Broward County, Florida over the parties hereto and over any disputes, actions,
proceedings or claims relating to or arising in connection with this Agreement.
8.02 If any part of this Agreement is held to be unenforceable or
invalid under, or in conflict with, the applicable law of any jurisdiction, then
the unenforceable, invalid or conflicting part shall be narrowed or replaced, to
the extent possible, by a judicial construction in such jurisdiction that
effectuates the intent of the parties regarding this Agreement and the
unenforceable, invalid or conflicting part, and such part shall be deemed to be
amended by such construction. Notwithstanding the unenforceability, invalidity
or conflict with applicable law of any part of this Agreement, the remaining
parts shall be valid, enforceable and binding on the parties.
8.03 This Agreement shall be binding upon, enforceable by and shall
inure to the benefit of each of the parties and their respective permitted
successors. This Agreement and all rights and obligations hereunder are personal
to Xxxxxxxx and shall not be assignable or delegable, and any purported
assignment or delegation in violation hereof shall be null and void. Any person,
firm or corporation succeeding to the business of the Corporation by merger,
consolidation, purchase of assets or otherwise, shall assume by contract or
operation of law the obligations of the Corporation hereunder; provided,
however, that the Corporation shall, notwithstanding such assumption or
assignment, remain liable and responsible for the fulfillment of the terms and
conditions of the Agreement on the part of the Corporation.
8.04 This Agreement may be amended only by a writing signed by both
parties hereto. This Agreement constitutes the entire agreement among parties
hereto relating to the subject matter of this Agreement. Neither any failure nor
any delay on the part of any party to this Agreement in exercising any right,
power or privilege hereunder shall operate as a waiver of any rights of any such
party, unless such waiver is explicitly expressed by a writing executed by such
party and delivered to the other parties, nor shall a single or partial exercise
of any right preclude any other or further exercise of any other right, power or
privilege accorded to any party to this Agreement.
7
8
8.05 (a) All notices permitted or required hereunder shall be in
writing and shall be delivered by hand, by recognized, national, overnight
courier or by deposit in the United States mail, postage prepaid, by registered
or certified mail, return receipt requested, addressed to the Corporation or
Xxxxxxxx, as the case may be, at the address of such party set forth below:
i) if to the Corporation to:
Long Distance International Inc.
000 Xxxxx Xxxxxxx Xxxxxx - Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
ii) if to Xxxxxxxx to:
Xxxxx Xxxxxxxx
0000 X.X. 00xx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
(b) Notices given by mail shall be deemed effective on the
earlier of the date shown on the proof of receipt of such mail or, unless the
recipient proves that the notice was received later or not received, three (3)
days after the date of mailing thereof. Other notices shall be deemed given on
the date of receipt. Any party hereto may change the address specified above by
written notice to the other parties hereto.
8.06 The headings appearing in this Agreement are for convenience
in reference only and shall not affect the meaning or interpretation of this
Agreement.
8.07 This Agreement may be executed in multiple counterpart copies,
each of which shall be considered an original and all of which shall be deemed
to be one and the same agreement.
8.08 The provisions of Sections 5.04, 6, 7, 8.01 and 8.09 of this
Agreement shall survive any termination of this Agreement and shall remain in
effect after any such termination.
8.09 (a) Xxxxxxxx fully and unconditionally releases and discharges
all claims and causes of action which he or his heirs, personal representatives,
or assignees ever had, now have, or hereafter may have against the Corporation,
its subsidiaries and, when acting as such, their respective officers, directors,
employees, counsel, agents, and stockholders, in each case past, present, or as
they may exist at any time after this date, and each person, if any, who
controls, controlled, or will control any of them within the meaning of Section
15 of the Securities Act of 1933, as amended, or Section 20(a) of the Securities
Exchange Act of 1934, as amended, arising out of, based upon, or in connection
with the Employment Agreement and the employment of Xxxxxxxx thereunder, except
for (i) any unpaid compensation and benefits pursuant to
8
9
Section 4 of the Employment Agreement, (ii) any employee benefits pursuant to
Section 5 of the Employment Agreement, (iii) any unreimbursed business expenses
pursuant to Section 6 of the Employment Agreement, and (iv) all stock options
granted to Xxxxxxxx under the Long Distance International Inc. 1994 Stock Option
Plan and the Long Distance International Inc. 1997 Stock Option Plan and the
related Stock Option Agreements.
(b) The Corporation fully and unconditionally releases and
discharges all claims and causes of action which the Corporation or its
successors or assigns ever had, now have, or hereafter may have against
Xxxxxxxx, his heirs, personal representatives, or assigns, and when acting as
such, their counsel and agents, in each case past, present, or as they may exist
at any time after this date, arising out of, based upon, or in connection with
the Employment Agreement and the employment of Xxxxxxxx thereunder.
(c) Nothing in this Section 8.09 shall be construed as a
release, waiver or settlement of any rights, claims, causes of action, remedies,
duties, obligations, or liabilities under any other agreements to which both the
Corporation and Xxxxxxxx are a party, including, without limitation, the
Shareholders Agreement, dated as of July 22, 1994, the Shareholders Agreement
dated as of September, 1994, and the Preemptive Rights Agreement dated as of
July 18, 1997.
9
10
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
LONG DISTANCE INTERNATIONAL INC.
By:
-----------------------------------------
Xxxx Xxxxx, by resolution of
the Board of Directors of
the Corporation
-----------------------------------------
Xxxxx Xxxxxxxx
10
