TERMINATION AGREEMENT
This Termination Agreement, made as of this 15th day of October,
1997 by and between U.S. WATS, INC., a New York corporation with offices at
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 (the
"Company") and XXXX X. XXXXXX, residing at 00000 Xxxxxxxxx Xxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000 (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive are parties to an Executive
Employment Agreement made as of the 10th day of January, 1997 (the "Employment
Agreement"); and
WHEREAS, the Company and the Executive are desirous of terminating
the Employment Agreement effective immediately;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto agree as follows:
1. Employment. The Company and the Executive agree that the Execu
tive's employment by the Company is terminated as of October 15, 1997.
Executive shall sign promptly upon request all documents reasonably required
to transition his duties and responsi bilities to other persons designated by
the Company.
2. Severance. Notwithstanding the termination of Executive's
employment with the Company, the Company shall pay the Executive the sum of
$54,000 upon execution of this Termination Agreement, in two (2) equal
installments of $27,000 due on October 17, 1997 and December 12, 1997.
3. Options. All of the stock options granted by the Company to
Executive, whether or not those stock options have vested, shall terminate as
of the date hereof, except that options to purchase up to 56,667 shares of the
Company's Common Stock at an exercise price of $1.25 per share, granted to
Executive pursuant to a Stock Option Agreement dated as of January 10, 1997,
shall continue in effect until April 15, 1998. The common stock issuable upon
exercise of such stock options shall be registered with the Securities and
Exchange Commission in order to permit public sale of such shares. The
options not exercised shall terminate on April 15, 1998.
4. Confidentiality. The provisions of section 8 of the Employment
Agreement shall survive this Termination Agreement, except for section
8.1(iii). Nothing in this Termination Agreement shall be deemed to prohibit
Executive from engaging in or becoming interested in or associated with any
other person, corporation, firm, partnership or other entity engaged in a
business which is competitive with any business conducted or contemplated by
the Company, provided that Executive shall not disclose or utilize in such
activity any confidential information of the Company.
5. Indemnification. The Company agrees to indemnify fully and
hold harmless Executive from any claim or liability resulting from claims of
third parties arising out of the performance of his duties under the
Employment Agreement. The Company's obliga tions hereunder shall include all
expenses of defending Executive in connection with any such claim or
liability, as well as providing Executive with counsel reasonably acceptable
to him and to the Company. Nothing in this paragraph shall obligate the
Company to indemnify or hold harmless Executive for claims or liability
arising out of deliberate wrongdoing by Executive as determined by a court of
competent jurisdiction. The Company shall advance the expenses of defending
Executive until such time as a court of competent jurisdiction deter mines
that Executive has engaged in deliberate wrongdoing. Executive shall promptly
repay the Company all expenses advanced on his behalf upon a finding by a
court of competent jurisdiction that he has engaged in deliberate wrongdoing.
Nothing in this paragraph shall be deemed to affect any coverage or obligation
under any insurance policy maintained by the Company.
6. Return of Company Property. Executive will return to the
Company all computers, cellular telephones, pagers, safety deposit box keys
and other property of the Company that are in his possession, other than the
automobile described in paragraph 7. Executive shall further return to the
Company all memoranda, notes, records, reports and other information, whether
preserved on paper or on a computer or computer disk (and all copies thereof)
relating to the businesses of the Company, which Executive obtained while
employed by, or otherwise serving or acting on behalf of the Company and which
he may possess or have under his control.
7. Automobile. Executive shall be solely responsible for
terminating the lease for the Mercedes Benz automobile the Company leased for
his benefit. The Company agrees to cooperate with Executive to terminate the
lease. Executive shall provide evidence reasonably satisfactory to the
Company on or before November 15, 1997 that the lease has been terminated
without cost or liability to the Company.
8. Release. The Company and the Executive each waive, release and
forever discharge one another of and from any and all past or present causes
of action, suits, agreements or other claims which one may have against the
other upon or by reason of any matter, cause or thing whatsoever arising out
of Executive's employment by the Company and each promises not to file a
lawsuit to assert such claims; provided, however, that this release shall not
apply to the obligations set forth in this Termination Agreement.
9. Business Goodwill. At all times following the date hereof,
Executive shall make no comments or take any other actions, direct or
indirect, that will reflect adversely on the Company or its officers,
directors, employees or agents in such capacity or adversely affect their
respective business reputations or goodwill. At all times following the date
hereof, the Board of Directors, each director and each officer of the Company
and Xxxxxxx Xxxxxx and Xxxxx Xxxxx shall make no comments or take any other
actions, direct or indirect, that will reflect adversely on Executive or
adversely affect his business reputation or goodwill.
10. Entire Agreement. This Termination Agreement contains the
entire agreement of the parties.
11. Applicable Law. This Termination Agreement shall be construed
according to the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this
Termination Agreement the day and year aforesaid.
U.S. WATS, INC.
By:_________________________________
____________________________________
Xxxxxxx Xxxxxx
____________________________________
Xxxxx X. Xxxxx
____________________________________
Xxxx X. Xxxxxx
