EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
15th day of March, 1999 by and between Princeton TeleCom Corporation, a Delaware
corporation, with an office at 000 Xxxx Xxxxxx, Xxxxxxxxx Xxx Xxxxxx 00000 (the
"Company"), and Xxxxxx Xxxxxxx, an individual currently residing at 00 Xxxxxxxx
Xxxxxx, Xxxxxxx, P.A. 18974 ("Executive").
RECITALS
The Company desires to provide certain incentive to Executive to remain in
the Company's employ. The Company and the Executive desire that Company employs
the Executive as President and Chief Operating Officer.
NOW THEREFORE, each of the Company and Executive, intending to be legally
bound, hereby mutually covenant and agree as follows:
ARTICLE I
Employment and Term
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1.1 Employment. The Executive shall be employed as President and Chief
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Operating Officer, and Executive hereby accepts such employment. In addition,
Executive agrees that he will serve in any similar capacity on behalf of any
existing or future subsidiary of the Company as reasonably requested by the CEO.
1.2 Term. The Term shall commence on the March 23, 1999 (the "Effective
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Date") and shall end on the earlier of (i)one week after the fourth anniversary
of the Effective Date; and (ii) the date of any Termination.
1.3 Duties. The Executive shall serve as President and Chief Operating
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Officer and shall be directly responsible for the duties and responsibilities
commensurate with his position as set forth in Section 1.1 hereof or as may be
assigned by the CEO from time to time; provided, however, that any such powers,
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duties and responsibilities assigned by the CEO are commensurate with such
position. The Executive shall use his best efforts and devote all of his
business time, attention and energy in performing his duties hereunder.
Notwithstanding the foregoing, nothing in this Agreement shall restrict
Executive from managing his personal investments, personal business affairs and
other personal matters, or serving on civic or charitable boards or committees,
if such activities do not interfere with the performance of his duties hereunder
or conflict with the Company's interests.
ARTICLE II
Compensation and Benefits
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2.1 Base Salary and Bonus. For all services performed by Executive for the
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Company and its subsidiaries hereunder, the Company shall pay Executive an
annual base salary of $200,000.00 ("Base Salary") in accordance with the
Company's regular payroll practices. The Base Salary may be increased and future
bonuses may be given in the sole and absolute discretion of the CEO.
2.2 Stock Options. On this date, Executive is hereby granted an option to
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purchase 100,000 shares of Common Stock of the Company, in accordance with the
terms of the stock option agreement ("Option Agreement") of even date.
Executive may be entitled to receive further grants of stock options in amounts
determined by the CEO in its sole and absolute discretion.
2.3 Other Benefits. In addition to the foregoing, Executive shall also be
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entitled to the following:
(a) Participation in Benefit Plans. Executive shall be entitled to
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participate in and receive benefits under all present and future life, accident,
disability, medical, pension, and savings plan and all similar benefits made
available to managers of the Company. Executive shall also be entitled to
participate in all other welfare and benefit plans maintained by the Company
and/or its subsidiaries, as the case may be, for their respective employees
generally.
(b) Vacation. Executive shall be entitled to vacation and
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paid holidays consistent with the Company's practices as adopted from time to
time (but in no event less than four weeks vacation).
(c) Expenses. The Company shall reimburse Executive for reasonable
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travel, out of pocket business expenses incurred by Executive in the performance
of his duties hereunder, provided appropriate documentation supporting such
expenses is submitted in accordance with the Company's governing policies.
ARTICLE III
Covenants and Representations
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3.1 Non-Interference. During the Term and a period of two years
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thereafter, Executive agrees not to solicit or encourage any employee of the
Company who is employed in an employee, managerial, administrative or
professional capacity or who possesses Confidential Material to leave the
employment of the Company.
3.2 Nondisclosure of Confidential Material. (a) In the performance of
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his duties hereunder, Executive shall have access to confidential records and
information, including, but not limited to, information relating to (i) any
Intellectual Property or (ii) the Company's business
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practices, finances, developments, customers, affairs, marketing or purchasing
strategy or other secret information (collectively, clauses (i) and (ii) of this
Section 3.2(a) are referred to as the "Confidential Material").
(b) All Confidential Material shall be disclosed to Executive in
confidence. Except in performing his duties hereunder, Executive shall not,
during the Term and at all times thereafter, disclose or use any Confidential
Material.
(c) All records, files, drawings, documents, equipment and other
tangible items containing Confidential Material shall be the Company's exclusive
property, and upon termination of this Agreement, or whenever requested by the
Company, Executive shall promptly deliver to the Company all of the Confidential
Material (and copies thereof) that may be in Executive's possession or control.
(d) The foregoing restrictions shall not apply if (i) such
Confidential Material has been publicly disclosed (not due to a breach by
Executive of his obligations hereunder or by breach of any other person of a
fiduciary or confidential obligation to the Company) or (ii) Executive is
required to disclose Confidential Material by or to any court of competent
jurisdiction or any governmental or quasi-governmental agency, authority or
instrumentality of competent jurisdiction; provided, however, that Executive
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shall, prior to any such disclosure. immediately notify the Company of such
requirement: provided, further, that the Company shall have the right, at its
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expense, to object to such disclosures and to seek confidential treatment of any
Confidential Material to be so disclosed on such terms as it shall determine.
3.3 Non-Competition. (a) The Executive shall not, during the Term, Control
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any Person which is engaged, directly of indirectly, or Participate in any
business that is competitive with the Company's electronic xxxx payment,
electronic xxxx presentment or electronic xxxx publishing business (including
the solicitation of any customer of the Company on behalf of any Competitor or
any other business, directly, indirectly on behalf of himself or any other
Person) (collectively, "Competitive Activities"); provided, however that nothing
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in this Agreement shall preclude Executive from owning less than 5% of any class
of publicly traded equity of any Person engaged in any Competitive Activity.
(b) Upon Termination, the Executive shall not, for himself or any
third party, directly or indirectly, for a period of one year following the date
of such Termination engage in Competitive Activities. The foregoing sentence
shall not apply in the event that Executive's employment is terminated due to a
Change in Control.
3.4 Employee Inventions and Ideas
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(a) Executive hereby agrees to assign to the Company, without further
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consideration, his entire right, title and interest (within the United States
and all foreign jurisdictions), to any Intellectual Property created, conceived,
developed or reduced to practice by Executive (alone or with others) free and
clear of any lien or encumbrance. If any Intellectual Property shall be deemed
patentable or otherwise registrable, Executive shall assist the Company (at its
expense) in obtaining letters patent or other applicable registration therein
and shall execute all documents and do all things (including testifying at the
Company's expense) necessary or appropriate to obtain letters patent or other
applicable registration therein and to vest in the Company, or any affiliate
specified by the CEO.
(b) Should Company be unable to secure Executive's signature on any
document necessary to apply for, prosecute, obtain or enforce any patent,
copyright or other right or protection relating to any Intellectual Property for
any reason, Executive hereby irrevocably designates and appoints the Company and
each of its duly authorized officers and agents as Executive's agent and
attorney-in-fact to act for and on Executive's behalf and stead and to execute
and file any such document and to do all other lawfully permitted acts to
further the prosecution, issuance and other enforcement of patents, copyrights
or other rights or protections with the same effect as if executed and delivered
by Executive.
3.5 Enforcement.
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(a) Executive acknowledges that violation of any covenant or agreement
set forth in Sections 3.1, 3.2, 3.3 or 3.4 would cause the Company irreparable
damage for which the Company cannot be reasonably compensated in damages in an
action at law, and, therefore, upon any breach by Executive of this Sections
3.1, 3.2, 3.3 or 3.4, the Company shall be entitled to make application to a
court of competent jurisdiction for equitable relief by way of injunction or
otherwise (without being required to post a bond). This provision shall not,
however, be construed as a waiver of any of the rights which the Company may
have for damages, and all of the Company's rights and remedies shall be
unrestricted.
(b) If any provision of this Agreement, or application thereof to any
person, place or circumstance, shall be held by a court of competent
jurisdiction or be found in an arbitration proceeding to be invalid,
unenforceable or void, the remainder of this Agreement and such provisions as
applied to any other person, place and circumstance shall remain in full force
and effect. It is the intention of the parties hereto that the covenants
contained herein shall be enforced to the maximum extent (but no greater extent)
in time, area, and degree of participation as is permitted by the law of the
jurisdiction whose law is found to be applicable to the acts allegedly in breach
of this agreement, and the parties hereby agree that the court making any such
determination shall have the power to so reform the Agreement.
(c) The Executive understands that the provisions of this Article III
may limit his ability to earn a livelihood in a business similar to the business
of the Company but nevertheless agrees and hereby acknowledges that (i) such
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of the Company; (ii) such provisions
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contain reasonable limitations as to time and the scope of activity to be
restrained; and (iii) the consideration provided under this Agreement,
including, without limitation, any amounts or benefits provided under Article IV
hereof, is sufficient to compensate Executive for the restrictions contained in
this Article III. In consideration of the foregoing and in light of Executive's
education, skills and abilities, Executive agrees that he will not assert, and
it should not be considered, that any provisions of this Article III prevented
him from earning a living or otherwise are void, voidable or unenforceable or
should be voided or held unenforceable.
3.6. Resume. The statements in Executive's resume previously provided to
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the Company are true and correct.
3.7 Each of the covenants and representations in this Article III is given
by Executive as part of the consideration for this Agreement and as an
inducement to the Company to enter into this Agreement and to accept the
obligations hereunder.
ARTICLE IV
Termination
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4.1 Termination of Agreement. Except for those provisions of this
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Agreement that survive Termination, this Agreement shall terminate upon any
Termination.
4.2 Procedures Applicable to Termination.
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(a) Termination for Cause. The Executive may be terminated for Cause,
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upon at least 15 days prior written notice from the CEO to Executive.
(b) Resignation for Good Reason. The Executive may terminate his
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employment for Good Reason upon at least 15 days' prior written notice from
Executive to the CEO and the Chief Financial Officer of his intent to resign for
Good Reason.
(c) Termination Without Cause. The Executive may be terminated
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without Cause upon at least 15 days' prior written notice from the CEO to
Executive.
4.3 Obligations of the Company upon Termination.
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(a) Salary and Bonus and Other Benefits. Upon any Termination, the
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Company shall pay to Executive, the following:
(i) all accrued but unpaid Salary in a lump sum within 10 days
after the date of Termination; and
(ii) all benefits accrued by Executive as of the date of
Termination under
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all qualified and nonqualified retirement, pension, profit sharing and similar
plans of the Company to such extent, in such manner and at such time as are
provided under the terms of such plans and arrangements.
(b) Termination without Cause or Resignation for Good Reason. If the
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Board terminates Executive's employment without Cause, or if Executive resigns
for Good Reason, in addition to the amounts payable under Section 4.3(a) hereof:
the Company shall pay Executive $200,000.00 in a lump sum within thirty (30)
days after the date of Termination, or in equal monthly installments over a 12
month period, in the Company's discretion. If the Executive terminates his
employment as a result of a Change in Control, the Company shall pay Executive
the sum of $400,000.00 (instead of $200,000.00 as set forth in the preceding
sentence) in a lump sum within thirty (30) days of Termination, or in equal
monthly installments over a 12 month period, in the Company's discretion.
(c) Termination for Cause or Resignation without Good Reason. If the
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Board terminates Executive's employment for Cause, or if Executive resigns
without Good Reason, Executive shall only be entitled to the amounts payable
under Section 4.3(a) hereof.
(d) Exclusivity. Any amount payable to Executive pursuant to this
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Article IV and any rights of Executive under the Stock Option Agreement shall be
Executive's sole remedy upon a Termination, and Executive waives any and all
rights to pursue any other remedy at law or in equity; provided, however, that
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Executive does not hereby waive any right provided under any federal, state or
local law or regulation relating to employment discrimination.
ARTICLE V
Definitions
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The following terms used in this Agreement shall have the meanings set forth
below.
5.1 "Cause" shall mean Executive's (i) violation of Section 1.3 hereof,
which violation has not been cured within 15 days of the date that written
notice thereof is received by Executive from the CEO; (ii) repeated failure to
follow the directions of the CEO; (iii) violation of Section 3.1, 3.2, 3.3 or
3.4 hereof; (iii) a misrepresentation in Section 3.6 hereof: (iv) wilful
misconduct, gross negligence or dishonesty in the performance of his duties
hereunder; (vi) conviction or formal indictment of any felony or a misdemeanor
involving fraud, misrepresentation, dishonesty or moral turpitude; (vii)
Executive's failure to devote his full business time to the Company's business,
for any reason, including illness or disability; (viii) Executive's death, (ix)
a Termination by Executive other than for Good Reason; or (x) failure to meet or
exceed the standards, as set forth in resolutions of the Compensation Committee
of the Board of Directors.
5.2 "Change in Control" shall mean at such time as (i) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the total voting
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power of the then outstanding voting stock of the Company on a fully diluted
basis or (ii) individuals who at the beginning of any period of two consecutive
calendar years constituted the Board (together with any new directors whose
election by the Board or whose nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of those members of
the Board then still in office who either were members of the Board at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board then in office.
5.3 "CEO" shall mean the Chief Executive Officer of the Company.
5.4 "Common Stock" shall mean the common stock par value $.01 a share, of
the Company.
5.5 "Control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through ownership of voting securities, by contract or
otherwise.
5.6 "Good Reason" shall mean any (i) reduction in Executive's Base Salary
or material diminution in Executive's authority, duty, responsibility, function
or position with the Company (which diminution continues after 15 days of the
date that written notice thereof is given by Employee), (ii) either the failure
by the Company to continue any material benefit or compensation plan, life
insurance plan, health and accident plan, disability plan (or plan providing
Executive with substantially similar benefits) in which Executive is
participating or the material reduction by the Company of Executive's benefits
under any such plan, or (iii) upon a Change in Control of the Company. Good
Reason shall not include the Company taking any of the above actions for
"Cause."
5.7 "Intellectual Property" shall mean any idea, process, trademark,
service xxxx, trade or business secret, invention, technology, computer program
or hardware, original work of authorship, design, formula, discovery, patent or
copyright, application, record, design, plan or specification and any
improvement, right or claim related to the foregoing.
5.8 "Participation" shall mean the direct or indirect participation in any
Competitive Activity, whether as an operator, manager, consultant, and whether
individually or jointly.
5.9 "Person" shall mean any individual or entity, whether a
governmental or other agency or political subdivision thereof or otherwise.
5.10 "Term" shall have the meaning set forth in Section 1.2 hereof and
shall include any renewal or extension as set forth therein.
5.11 "Termination" shall mean termination of Executive's employment
with the Company for any reason, including (i) with or without Cause, (ii)
resignation by Executive with or without
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Good Reason (including a voluntary resignation) or (iii) upon the expiration of
the Term.
ARTICLE VI
Miscellaneous
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6.1 Employee Acknowledgment. The Executive acknowledges that he has
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consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement and has been advised to do so by the
Company, and that he has read and understands the Agreement, is fully aware of
its legal effect, and has entered into it freely based on his own judgment.
6.2 Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of Executive's heirs and representatives and the Company's successors
and assigns. The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of
assets or stock, liquidation, or otherwise), by agreement in form and substance
reasonably satisfactory to Executive, to assume performance of this Agreement in
the same manner that the Company would have been required to perform this
Agreement if no such succession had taken place. Regardless of whether such
agreement is executed, this Agreement shall be binding upon any successor of the
Company in accordance with the operation of law.
6.3 Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given as
follows: (i) upon delivery if notice is hand delivered; (ii) the next business
day if notice is sent by reliable guaranteed next business courier (e.g. federal
express) delivery charges prepaid; or (iii) upon receipt if notice is sent by
mail within the continental United States by first class certified mail, return
receipt requested, postage prepaid addressed Company, Attention CEO and Chief
Financial Officer, and the Executive at the addresses set forth on the first
page of this Agreement. Any such address may be changed by written notice sent
to the other party at the last recorded address of that party.
6.4 Tax Withholding. The Company shall provide for the withholding of any
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taxes required to be withheld under federal, state and local law (other than the
employer's portion of such taxes) with respect to any payment in cash and/or
other property made by or on behalf of the Company to or for the benefit of
Executive under this Agreement or otherwise. The Company may, at its option; (i)
withhold such taxes from any cash payments owing from the Company to Executive,
(ii) require Executive to pay to the Company in cash such amount as may be
required to satisfy such withholding obligations and/or (iii) make other
satisfactory arrangements with Executive to satisfy such withholding
obligations.
6.5 No Assignment; No Third Party Beneficiaries. Except as otherwise
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expressly provided in Section 6.2 hereof, this Agreement is not assignable by
any party, and no payment to be made hereunder shall be subject to alienation,
sale, transfer, assignment, pledge, encumbrance or other charge. Except for the
Company and its existing and future subsidiaries, no Person shall be
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or deemed to be, a third party beneficiary of this Agreement.
6.6 Execution in Counterparts. This Agreement may be executed by the
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parties hereto in one or more counterparts, each of which shall be deemed to be
an original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
6.7 Jurisdiction and Governing Law. Jurisdiction over disputes with
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regard to this Agreement shall be exclusively in the courts of the State of New
Jersey, and this Agreement shall be construed and interpreted in accordance with
and governed by the laws of the State of New Jersey as applied to contracts
capable of being wholly performed in such State.
6.8 Entire Agreement: Amendment. This Agreement and the Schedules and
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Exhibits attached hereto embody the entire understanding of the parties hereto,
and supersede all prior agreements regarding the subject matter hereof. No
change, alteration or modification hereof may be made except in a writing,
signed by both of the parties hereto.
6.9 Headings. The headings in this Agreement are for convenience of
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reference only and shall not be construed as part of this Agreement or to limit
or otherwise affect the meaning hereof.
6.10 Survival. Notwithstanding anything to the contrary herein, Article
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III, Section 4.3 and Article VI of this Agreement shall survive termination of
this Agreement or Termination for any reason whatsoever.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day first written above.
Princeton TeleCom Corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxx, CEO
Executive
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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