1
AMENDED AND RESTATED
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (this
"Agreement") is made and entered into this 21st day of September, 1999, by and
between AXISTEL COMMUNICATIONS, INC., a Delaware corporation ("Employer") and
XXXXXX X. XXXXXX ("Employee").
RECITALS:
WHEREAS, Employer and Employee entered into that certain Employment and
Noncompetition Agreement dated as of October 28, 1998 (the "Prior Agreement");
and
WHEREAS, of even date herewith, Employer has merged with a wholly owned
subsidiary of eVentures Group, Inc., a Delaware corporation ("Parent), pursuant
to which Employer is the surviving entity and a wholly owned subsidiary of
Parent (the "Merger"); and
WHEREAS, in connection with the consummation of the Merger, Employer
and Employee have agreed to amend and restate in its entirety the Prior
Agreement, which is hereby superseded in its entirety by this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants set forth in this Agreement, the parties hereto hereby agree as
follows:
1. EMPLOYMENT; DUTIES. Employer hereby employs Employee, and Employee
hereby accepts such employment. Employee's principal duties will consist of
serving as the Chief Executive Officer of Employer and providing services
consistent with such position. In addition, Employee shall perform such other
duties and services for and on behalf of Employer generally consistent with the
foregoing as may from time to time be determined by the Board of Directors of
Parent (the "Board"). Employee shall also be designated as a Managing Director
of Communications Holdings of Parent. Employee shall devote his full and
undivided business time, attention and efforts to Employer's business and to the
performance of Employee's duties under this Agreement. Employee shall faithfully
perform all duties assigned to him under this Agreement to the best of
Employee's abilities. In the performance of Employee's duties hereunder,
Employee agrees to report to the Board. The Board's current plan is that upon
consummation of the Merger, the telecommunications business activities of
Parent, currently conducted by Employer and e.Volve Technologies Group, Inc.
(f/k/a Orix Global Communications, Inc.), will be operated by Employee and the
other officers and employees of Employer from Employer's current offices located
in the State of New Jersey, but subject to the supervision and authority of the
Board. Employer covenants and agrees that, during the Term (as hereinafter
defined) hereof, Employer shall not relocate the principal office of Employer to
a
EMPLOYMENT AND NONCOMPETITION AGREEMENT - PAGE 1
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geographical location outside of a 50 mile radius from the current office of
Employer and that Employee shall be allowed to perform his services under this
Agreement at such principal office of Employer.
2. COMPENSATION. Employee acknowledges and agrees that as of the date
of this Agreement, the Company does not owe him any compensation (other than
accrued and unpaid base salary through the date hereof under the Prior
Agreement) and that he is only entitled to the compensation set forth below for
his services rendered hereunder after the date hereof.
(a) Employee shall be entitled to receive an annual salary
("Base Salary") of $180,000 as full compensation for all the services
rendered by Employee during each fiscal year of the Term (as hereafter
defined) of Employee's employment and paid in accordance with the
customary payroll practices of Employer.
(b) For each fiscal year or portion thereof during the Term,
Employee shall be eligible for discretionary bonuses payable by
Employer on such terms and conditions, subject to such standards, as
shall be determined, in good faith, from time to time in the discretion
of the Board.
(c) Employee's compensation shall be reviewed at least
annually by the Board and any appropriate increases may be made to the
Base Salary in the sole discretion of the Board.
(d) The Employee shall be entitled to receive prompt
reimbursement for all reasonable business and entertainment expenses
incurred by him in performing services hereunder, provided that the
Employee properly accounts therefor to the Board. The Employee shall
obtain the approval of the Board prior to incurring any single
expenditure in excess of $5,000.
(e) The Employee shall receive only such standard employment
benefits as are available to general employees of Employer, such as
life, health, dental, and short term and long term disability plans,
and a policy for vacation, personal time off, and sick leave
(collectively, the "Standard Benefit Plans").
(f) The Employee shall be entitled to reasonable vacation
consistent with his position.
(g) Any payments or benefits to which the Employee may be
entitled under this Section 2 in respect of any fiscal year during
which the Employee is employed by Employer for less than the entire
such fiscal year shall, unless otherwise provided herein or in the
applicable plan or arrangement, be prorated in accordance with the
number of days in such fiscal year during which he is so employed.
3. STOCK OPTIONS. Employer hereby grants to Employee non-qualified
stock options (the "Stock Options") to purchase 425,000 shares of Common Stock
of Parent. Such Stock Options shall be granted pursuant to Parent's customary
Stock Option Plan substantially in the form attached hereto as Exhibit A,
together with the form of Stock Option Grant attached hereto as
EMPLOYMENT AND NONCOMPETITION AGREEMENT - PAGE 2
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Exhibit B. Subject to ratification by the Board, the Stock Options shall, to the
maximum extent permitted by the Internal Revenue Code, be classified as
Incentive Stock Options pursuant to the terms of the Stock Option Plan. The
exercise price for such Stock Options shall be $10.00 per share of Common Stock.
The Stock Options granted hereunder shall vest as follows: (x) 141,166 shares
(1/3) shall vest on September __, 2000; (y) 141,67 shares (1/3) shall vest on
September __, 2001; and (z) 141,667 shares (1/3) shall vest on September __,
2002; provided, however, such Stock Options shall vest in full upon the
occurrence of (A) any Change of Control of Parent (as such term is defined in
the Stock Option Plan), (B) any termination of Employee's employment hereunder
without Cause pursuant to Section 5(d) below or (C) the failure of Employer to
make a Qualifying Extension Offer (as hereafter defined) upon the expiration of
the Term. Notwithstanding any provision of the Stock Option Plan or Stock Option
Grant to the contrary, to the extent provisions contained therein are
inconsistent or conflict with the terms and provisions of this Agreement, the
terms and provisions of this Agreement shall control. To the extent this
Agreement does not specifically address an issue or term raised in the Stock
Option Plan or Stock Option Grant, then the provisions and terms of the Stock
Option Plan or Stock Option Grant will apply.
4. EMPLOYMENT TERM. The term of Employee's employment hereunder shall
commence on September __, 1999, and shall continue for twenty-four (24) months
thereafter (for a Term ending September __, 2001), unless earlier terminated in
accordance with the terms of this Agreement (the "Term"). This Agreement may be
renewed by mutual agreement of Employer and Employee at the end of the Term for
additional one (1) year periods. Upon the expiration of the initial Term,
Employer agrees to offer to extend the Term for one (1) additional year (for a
Term ending September __, 2002) on substantially identical terms as set forth
herein at the Base Salary applicable at the time of expiration of the initial
Term, but without a requirement for the issuance of any additional Stock Options
to Employee (a "Qualifying Extension Offer").
5. REASON FOR EMPLOYMENT TERMINATION. The Employee's employment
hereunder may be terminated under the following circumstances:
(a) MUTUAL AGREEMENT. Termination by mutual agreement between
the Employee and Employer.
(b) DEATH OR DISABILITY. Employment shall terminate upon the
death or permanent disability of the Employee. For purposes of this
Agreement, "Disability" occurs if the Employee is unable to perform
duties on a full-time basis because of mental or physical incapacity,
including, without limitation, alcoholism or drug abuse, which requires
a leave of absence in excess of 90 days during any calendar year. In
the event the Employee is a Qualified Individual with a Disability, as
defined in the Americans with Disabilities Act, Employer shall not
terminate the Employee's employment hereunder if the Employee is able
to perform the essential functions of the Employee's job with
reasonable accommodation from Employer.
(c) CAUSE. For purposes of this Agreement, Employer shall have
"Cause" to terminate the Employee's employment hereunder only upon:
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(i) The willful and continued failure by the Employee
to substantially perform his duties as outlined hereunder
after written demand for substantial performance is delivered
by the Board;
(ii) The engaging by the Employee in criminal conduct
or conduct constituting moral turpitude that is materially
injurious to Employer, monetarily or otherwise;
(iii) The continued willful insubordination of the
Employee after written demand by the Board is delivered to the
Employee specifically identifying the insubordination;
(iv) The embezzlement or misappropriation by the
Employee of the funds of Employer;
(v) Acts of dishonesty or other intentional acts
(including any breach of the Employee's covenants contained in
this Agreement or the Stockholders Agreement dated the date
hereof to which Employee and Employer are each parties) that
cause material adverse harm to Employer (other than as a
consequence of good faith decisions made by the Employee in
the normal performance of the Employee's duties hereunder);
and/or
(vi) Employee is convicted of a felony which carries
a minimum prison sentence upon conviction of one (1) year or
longer.
(d) TERMINATION WITHOUT CAUSE. Notwithstanding any provisions
of this Agreement to the contrary, Employer may terminate the
Employee's employment for any reason, or for no reason, other than
those specified in the foregoing paragraphs (a), (b) or (c) at any time
during the Term effective upon delivery of two (2) day's notice by
Employer.
(e) TERMINATION BY THE EMPLOYEE WITH NOTICE. The Employee may
terminate this Agreement (voluntary resignation) at any time during the
Term effective upon thirty (30) days written notice to the Board.
(f) TERMINATION UPON EXPIRATION OF TERM. Employment shall
terminate upon expiration of the Term.
6. COMPENSATION UPON TERMINATION. The Employee shall be entitled to the
following compensation from Employer (in lieu of all other sums owed or payable
to the Employee hereunder) upon the termination of employment during the Term of
this Agreement.
(a) TERMINATION FOR CAUSE. In the event Employer terminates
Employee's employment hereunder for Cause during the Term of this
Agreement, then Employee's employment hereunder shall immediately
terminate, and Employee shall only receive the
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Base Salary prorated through the effective date of termination of
Employee's employment.
(b) VOLUNTARY RESIGNATION. Notwithstanding anything contained
in this Agreement to the contrary, Employee may resign and terminate
Employee's employment hereunder subject only to the requirement that
Employee shall provide Employer with a minimum of thirty (30) days
prior written notice. In such event, Employee shall only receive the
unpaid Base Salary prorated through the effective date of Employee's
resignation.
(c) DEATH. In the event of the death of Employee during the
Term of this Agreement, this Agreement and Employee's employment
hereunder shall terminate as of the date of the death of Employee, and
his estate or personal representative shall be entitled to receive the
unpaid Base Salary, prorated for the period of Employee's employment to
the date of his death and a one time payment of $10,000.
(d) DISABILITY. If the Employee's employment is terminated as
a result of Disability (as defined in Section 5 above), the Employee
will continue to be provided long term disability benefits (if any) in
accordance with Employer's then existing Standard Benefit Plan. In
addition, Employer will pay to the Employee the remaining unpaid pro
rata portion of the Base Salary through the date of Disability.
(e) PAYMENT UPON TERMINATION WITHOUT CAUSE OR BY FAILURE TO
MAKE A QUALIFYING EXTENSION OFFER. In the event Employee's employment
hereunder is terminated for reasons other than (x) for Cause, (y) as a
result of the voluntary resignation of Employee or (z) as a result of
Employee's death or Disability (i.e., termination without Cause), then,
in such event, Employee shall be entitled to receive the Base Salary
then in effect for the remainder of the Term hereunder. In addition,
if, upon expiration of the Term on September __, 2001, Employer fails
to make a Qualifying Extension Offer to Employee, then, in such event,
Employee shall be entitled to receive the Base Salary then in effect
for a period of six (6) months. In each instance, such payments shall
be made at such times as if Employee's employment hereunder had not
terminated. In addition, in the event of a termination of employment
without Cause, the contractual restriction on Employee's ability to
sell any shares of Parent common stock set forth in the Registration
Rights Agreement executed contemporaneously herewith among Parent and
certain of its stockholders shall terminate and cease to apply to
Employee.
(f) SUSPENSION. Employer shall have the right to suspend
Employee with full pay and benefits for any period of time the Board of
Directors of Employer deems necessary or appropriate to investigate
Employee's conduct.
7. COVENANT NOT TO COMPETE. During the Restricted Period (as defined
below) (or such lesser period to the maximum extent permitted by applicable
law), Employee agrees that Employee will not, directly or indirectly (including,
without limitation, as a partner, shareholder, director, officer or employee of,
or lender or consultant to, any other person, firm or other entity), in any
capacity, within, into or from the Restricted Territory (as defined below)
engage or cause
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others to engage in the business that Parent, Employer and/or its subsidiaries
or affiliates is engaged in at the time of termination, or any aspect thereof of
(consisting, as of the date hereof, principally of the services described in
Parent's Disclosure Letter dated on or about the date hereof) (the "Business"),
unless first authorized in writing by Parent, which authorization may be
withheld in the sole and absolute discretion of Parent. For purposes of this
Agreement, "Restricted Period" means the period of Employee's employment
hereunder and the following applicable period after the date of termination of
Employee's employment for the following reasons: (i) if Employee voluntarily
resigns, a period equal to two (2) years after the date of such resignation;
(ii) for any termination without Cause, the remaining Term of this Agreement
(i.e., the time period in which Employee is making payments under Section 6(e)
above); (iii) as a result of Employer failing to make a Qualifying Extension
Offer, six (6) months after the date of termination (i.e., the time period in
which Employer is making payments under Section 6(e) above); provided, at
Employer's option, Employer may extend such payments for an additional six (6)
month period in which event the Restricted Period shall be extended for such six
(6) month additional period; (iv) for any termination with Cause, a period equal
to three (3) years after the date of such termination; and (v) for any other
termination, including Employee's failure to accept a Qualifying Extension Offer
at the end of the Term, a period of two (2) years after the date of termination
or non-renewal. For purposes of this Agreement, the term "Restricted Territory"
shall mean that the Business of Employer has been initiated in any area of the
world (or such lesser territory to the maximum extent permitted by applicable
law). If Employee violates any obligations under this Section 7, then the time
periods hereunder shall be extended by the period of time equal to that period
beginning when the activities constituting such violation commenced and ending
when the activities constituting such violation terminate. Any efforts made by
Employee to consummate sales of services or goods for and on behalf of the
Employer to any competitors of Employer during the term of this Agreement shall
not violate the provisions of this Section 7.
8. NONSOLICITATION. During the Employee's employment hereunder, and for
a period of twenty-four (24) months from and after the date of termination of
Employee's employment for any reason, except as set forth below (or such lesser
period to the maximum extent permitted by applicable law), Employee agrees that
Employee shall not, directly or indirectly, for himself or on behalf of, or in
connection with, any person, firm or other entity other than Employer, solicit
or cause others to solicit (i) the business or patronage of any person, firm or
other entity with whom Employer has or had a business relationship (as a
customer, supplier or otherwise) or with whom Employer has proposed entering
into a business relationship (as a customer, supplier or otherwise), or (ii) any
person who, on the date hereof and on the date of termination of Employee's
employment hereunder, was an employee or consultant of Employer, or any of its
subsidiaries or their affiliates, for employment or as an independent contractor
with any person or entity, unless first authorized in writing by Employer, which
authorization may be withheld in Employer's sole and absolute discretion;
provided, however, that in the event Employee is terminated without Cause or he
does not receive a Qualifying Extension Offer, the provisions of this Section 8
shall only apply for so long as Employer continues to pay Employee the
applicable amounts specified in Section 6(e) above.
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9. CONFIDENTIALITY. In addition to Employee's obligations as a
stockholder of Employer pursuant to that certain Stockholders Agreement, dated
the date hereof, by and Employer and the stockholders of Employer, from and
after the date hereof, Employee shall not communicate or divulge to, or use for
the benefit of, any person, firm or other entity other than Employer, any of the
trade secrets, business and/or marketing plans, or any proprietary or
confidential information with respect to Employer, its subsidiaries or their
affiliates, and their business, financial condition, business operations or
methods or business prospects. The preceding sentence shall not apply to
information which (i) is, was or becomes generally known or available to the
public or the industry other than as a result of a disclosure by Employee in
violation of this Agreement, or (ii) is required to be disclosed by law.
Employee shall advise Employer, in writing, of any request, including a subpoena
or similar legal inquiry, to disclose any such confidential information, so that
Employer may, at its option, seek appropriate legal relief. Employee is aware of
no obligations, legal or otherwise, inconsistent with the terms of this
Agreement or with his undertaking employment with Employer. Employee will not
disclose to Employer, or use to induce Employer to use, any proprietary
information or trade secrets of others. Employee represents that he has returned
all property and confidential information belonging to all prior employers.
10. RETURN OF EMPLOYER PROPERTY. Immediately upon the expiration or
earlier termination of this Agreement, Employee shall return to Employer any and
all property of Employer, including, but not limited to, all documents,
agreements, schedules, statements, customer lists, supplier lists, plans,
designs, parts and equipment, that is in the possession or control (direct or
indirect) of Employee.
11. SURVIVAL: REMEDIES; SEVERABILITY. Employee specifically
acknowledges that (a) Employer itself or through one or more of Employer's
subsidiaries currently operates, or will operate following the date hereof, in
the Restricted Territory; (b) Employer itself or through one or more of
Employer's subsidiaries or affiliates receives a significant amount of business
from and throughout the Restricted Territory; (c) Employer itself or through one
or more of Employer's subsidiaries or affiliates, plans to expand operations
within and throughout the Restricted Territory; and (d) the geographic
restrictions contained in Section 7 hereof, and the length of time restrictions
in Sections 7, 8 and 9 hereof are each necessary and reasonable and were
negotiated between Employer and Employee. The restrictions and obligations set
forth in Sections 7, 8, 9 and 10 hereof shall survive the expiration or
termination of this Agreement. The parties hereto hereby acknowledge and agree
that the restrictions and obligations set forth in Sections 7, 8, 9 and 10
hereof are reasonable and necessary, and that any violation thereof would result
in substantial and irreparable injury to Employer, and that Employer may not
have an adequate remedy at law with respect to any such violation. Accordingly,
Employee agrees that, in the event of any actual or threatened violation
thereof, Employer shall have the right and privilege to (x) obtain, without the
necessity of posting bond therefor, and in addition to any other remedies that
may be available, equitable relief, including temporary and permanent injunctive
relief, to cease or prevent any actual or threatened violation of any provision
hereof and (y) cease paying Employee any amounts pursuant to the terms hereof,
including, without limitation, the payments provided in Section 6(e) above;
provided, however, that in the event a final determination is made that either
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(x) Employee has not violated any of the terms hereof or (y) such violation has
not resulted in damages to Employer in excess of the withheld payments provided
in Section 6(e) above ("Damages"), then Employer shall promptly pay to Employee
such amounts that it withheld in excess of the aggregate of such Damages. Each
and every provision set forth in Sections 7, 8, 9 and 10 hereof is independent
and severable from the others, and no restriction will be rendered unenforceable
by virtue of the fact that, for any reason, any other or others of them may be
unenforceable in whole or in part. If any provision in this Agreement,
including, without limitation, those in Sections 7, 8, 9 and 10 hereof is
unenforceable for any reason whatsoever, that provision will be appropriately
limited and reformed to the maximum extent provided by applicable law. If the
scope of any restriction contained herein is too broad to permit enforcement to
its full extent, then such restriction shall be enforced to the maximum extent
permitted by law so as to be judged reasonable and enforceable, and the parties
agree that such scope may be modified by an arbitrator or judge in any
proceeding to enforce this Agreement. This includes, without limitation,
altering or enforcing only portions of the limits on activity restrictions, the
geographic scope, and/or the duration of the restrictions unless to do so would
be contrary to law or public policy.
12. MISCELLANEOUS.
(a) NOTICES. All notices or demands for performance required or
permitted to be given hereunder shall be in writing and shall be deemed given
when delivered in person, or three (3) business days after being placed in the
hands of a courier service (e.g., DHL or Federal Express) prepaid or faxed
provided that a confirming copy is delivered forthwith as herein provided,
addressed as follows:
If to Employer:
AxisTel Communications, Inc.
Xxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attn: President
If to Employee:
Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx 00, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal representatives, successors and permitted assigns. Except as set forth
herein, the provisions of this Agreement supersede any and all other agreements
or
EMPLOYMENT AND NONCOMPETITION AGREEMENT - PAGE 8
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understandings, whether oral or written, with respect to Employee's employment
by Employer, including without limitation, the Prior Agreement. Any amendments,
or alternative or supplementary provisions to this Agreement must be made in
writing and duly executed by the authorized representative or agent of each of
the parties hereto.
(c) NON-WAIVER. The failure in any one or more instances of a party to
insist upon performance of any of the terms, covenants or conditions of this
Agreement, to exercise any right or privilege conferred in this Agreement or the
waiver by said party of any breach of any of the terms, covenants or conditions
of this Agreement, shall not be construed as a subsequent waiver of any such
terms, covenants, conditions, rights or privileges, but the same shall continue
and remain in full force and effect as if no such forbearance or waiver had
occurred. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.
(d) COUNTERPARTS. This Agreement may be executed by facsimile signature
and in multiple counterparts, each of which shall be deemed to be an original,
and all such counterparts shall constitute but one instrument.
(e) APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONTROLLED AS
TO VALIDITY, ENFORCEMENT, INTERPRETATION, CONSTRUCTION, EFFECT AND IN ALL OTHER
RESPECTS BY THE INTERNAL LAWS OF THE STATE OF NEW JERSEY APPLICABLE TO CONTRACTS
MADE IN THAT STATE.
(f) CONSTRUCTION. The parties hereto acknowledge and agree that each
party has participated in the drafting of this Agreement and that the respective
legal counsel for the parties hereto have had the opportunity to review this
document and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be applied
to the interpretation of this Agreement. No inference in favor of, or against,
any party shall be drawn from the fact that one party has drafted any portion
hereof.
BOTH PARTIES HERETO HAVE READ THIS ENTIRE AGREEMENT CAREFULLY AND FULLY
UNDERSTAND THE LIMITATIONS THAT THIS AGREEMENT IMPOSES UPON THEM AND ACKNOWLEDGE
AND AGREE THAT THOSE LIMITATIONS ARE REASONABLE.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
EMPLOYER:
AXISTEL COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ XXXXXXXX XXXXXX
------------------------------------
Xxxxxxxx Xxxxxx, President and Chief
Operating Officer
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
XXXXXX X. XXXXXX
eVentures Group, Inc. hereby joins in this Agreement for the sole purpose of
agreeing to the grant of Stock Options pursuant to Section 3 above.
eVENTURES GROUP, INC.
By: /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: President & CEO
EMPLOYMENT AND NONCOMPETITION AGREEMENT - PAGE 10
