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Exhibit 10.12
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 5th day of
January, 1999, by and between Long Distance International Inc., a Florida
corporation with offices at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx,
XX 00000 (together with its successors and assigns permitted under this
Agreement, the "Company"), and Xxxxx Xxxx, 000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000
(the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Executive and to
enter into an agreement embodying the terms of such employment (this
"Agreement") and the Executive desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt of which is mutually acknowledged, the Company and the Executive
(individually a "Party" and together the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" of a person or other entity shall mean a
person or other entity that directly or indirectly controls, is controlled by,
or is under common control with the person or other entity specified.
(b) "Base Salary" shall mean the salary provided for in
Section 4 below or any increased salary granted to the Executive pursuant to
Section 4.
(c) "Board" shall mean the Board of Directors of the
Company.
(d) "Cause" shall mean:
(i) the Executive is convicted of a crime
involving moral turpitude;
(ii) the Executive is guilty of willful gross
neglect or willful gross misconduct in carrying out his duties under this
Agreement, resulting, in either case, in material economic harm to the Company,
unless the Executive believed in good faith that such act or failure to act was
in the best interests of the Company;
(iii) the breach by Executive of his fiduciary
duty for personal gain of himself or others (other than the Company and it
Affiliates); and
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(iv) the material breach by Executive of this
Agreement.
(e) "Change in Control" shall mean the occurrence of any
of the following events:
(i) An acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act") (an "Entity") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of either (A) the then outstanding shares of Stock of the Company (the
"Outstanding Company Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); excluding,
however, the following: (1) any acquisition directly from the Company, other
than an acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the Company,
(2) any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 1(e);
(ii) A change in the composition of the Board
such that the individuals who, as of the effective date of this Agreement,
constitute the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this definition, any individual
who becomes a member of the Board subsequent to the effective date of this
Agreement, whose election, or nomination for election, by the Company's
stockholders was approved by a vote of at least a two-thirds majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; and
provided, further however, that any such individual whose initial assumption of
office occurs as a result of or in connection with either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an Entity other than the
Board shall not be so considered as a member of the Incumbent Board;
(iii) A merger, reorganization or consolidation to
which the Company is a party or a sale or other disposition of all or
substantially all of the assets of the Company (each, a "Corporate
Transaction"); excluding however, such a Corporate Transaction pursuant to which
(A) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a
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corporation or other person which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries (a "Parent Company")) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Company Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Entity (other than the Company, any employee benefit
plan (or related trust) of the Company, such corporation resulting from such
Corporate Transaction (or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, such Parent Company)
will beneficially own, directly or indirectly, 50% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction (or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, such Parent Company) or
the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors unless such
ownership resulted solely from ownership of securities of the Company prior to
the Corporate Transaction, and (C) individuals who were members of the Incumbent
Board will immediately after the consummation of the Corporate Transaction
constitute at least a two-thirds majority of the members of the board of
directors of the corporation resulting from such Corporate Transaction (or, if
reference was made to equity ownership of any Parent Company for purposes of
determining whether clause (A) above is satisfied in connection the applicable
Corporate Transaction, of the Parent Company); or
(iv) The approval by the stockholders of the
Company of a plan of complete liquidation or dissolution of the Company.
(f) "Constructive Termination Without Cause" shall mean
termination by the Executive of his employment at his initiative following the
occurrence of any of the following events without his consent:
(i) a reduction in the Executive's then current
Base Salary or target bonus opportunity as a percentage of Base Salary or
long-term performance incentive or the termination or material reduction of any
material employee benefit or perquisite enjoyed by him (other than as part of an
across-the-board reduction applicable to all executive officers of the Company);
(ii) the failure to elect or reelect the
Executive to any of the positions described in Section 3 or the removal of him
from any such position;
(iii) a material diminution in the Executive's
duties or the assignment to the Executive of duties which are materially
inconsistent with his duties or which materially impair the Executive's ability
to function as the Chief Executive Officer of the Company; or
(iv) the failure of the Company to obtain the
assumption in
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writing of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company within 15 calendar days after a
merger, consolidation, sale or similar transaction.
Following written notice from the Executive, as described above, the Company
shall have 15 calendar days in which to cure. If the Company fails to cure, the
Executive's termination shall become effective on the 16th calendar day
following the written notice.
(g) "Disability" shall mean the Executive's inability,
due to physical or mental incapacity, to substantially perform his duties and
responsibilities under this Agreement as determined by a medical doctor selected
by the Company and the Executive. If the Parties cannot agree on a medical
doctor, each Party shall select a medical doctor and the two doctors shall
select a third who shall be the approved medical doctor for this purpose.
(h) "Effective Date" shall mean as of the date hereof.
(i) "Fair Market Value" shall mean in respect of any
security, asset or other property, the price at which a willing seller would
sell and a willing buyer would buy such security, asset or other property having
full knowledge of the facts, in an arm's-length auction transaction without time
constraints, and without being under any compulsion to buy or sell. The Fair
Market Value of a share of Stock as of any time shall be determined as of the
last day of the most recent calendar month which ended prior to such time, shall
be determined without giving effect to any discount for a minority interest, to
any lack of liquidity of the Stock or to the fact that the Company may have no
class of equity security registered under the Exchange Act and shall be based on
the Fair Market Value of the Company as of such day divided by the number of
outstanding shares of Stock determined as of such time. The Fair Market Value of
the Company shall be determined on a going concern basis, and on the basis that
the management and other key employees of the Company and its subsidiaries will
continue to be employed indefinitely.
(j) "Pro Rata" shall mean a fraction, the numerator of
which is the number of days that the Executive was employed in the applicable
performance period and the denominator of which shall be the number of days in
the applicable performance period.
(k) "Stock" shall mean the Common Stock of the Company.
(l) "Term of Employment" shall mean the period specified
in Section 2 below (including any extension as provided therein).
2. Term of Employment.
The Term of Employment shall begin on the Effective Date, and
shall extend until twenty-four (24) months from the Effective Date.
Notwithstanding the foregoing, the
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Term of Employment may be earlier terminated by either Party in accordance with
the provisions of Section 9.
3. Position, Duties and Responsibilities.
(a) Commencing on the Effective Date and continuing for the
remainder of the Term of Employment, the Executive shall be employed as the
Chief Executive Officer of the Company and be responsible for the general
management of the affairs of the Company. The Executive, in carrying out his
duties under this Agreement, shall report to the Board. The Executive further
agrees to accept election, and to serve during all or any part of the Term of
Employment as a director of the Company and of any subsidiary or affiliate of
the Company, and as an executive officer of any subsidiary or affiliate of the
Company without any compensation therefor other than as set specified in this
Agreement, if elected to any such position by the shareholders or by the Board
of Directors of the Company or any subsidiary or affiliate, as the case may be.
During the Term of this Agreement, the Executive shall devote his full business
time and attention to the business and affairs of the Company and shall use his
best efforts, skills and abilities to promote its interests.
(b) Nothing herein shall preclude the Executive from (i)
serving on the boards of a reasonable number of trade associations and/or
charitable organizations, (ii) engaging in charitable activities and community
affairs, and (iii) managing his personal investments and affairs, provided that
such activities set forth in this Section 3(b) do not materially interfere with
the proper performance of his duties and responsibilities under Section 3(a).
(c) During the Term of Employment, the headquarters of the
Company shall be located in London and in the Fort Lauderdale/Miami Metropolitan
Area. During the Term of Employment, the headquarters of LDI Carrier Sales
Division shall be in New York City. Executive shall be available to the Company
at both of its headquarters on business days during the week and shall be
available to travel as the needs of the business require.
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4. Base Salary.
The Executive shall be paid an annualized Base Salary, payable
in accordance with the regular payroll practices of the Company, of $280,000.
The Base Salary shall be reviewed annually for increase in the discretion of the
Board.
5. Incentive Award.
During the Term of Employment,
(a) in 1999 the Executive shall participate in an incentive
award plan which shall be based on the achievement of certain performance
targets to be determined and mutually approved by the Company and Executive
within 30 days after the signing of this Agreement with respect to the 1999
year, and shall be determined by the Compensation Committee and the Board of
Directors with respect to the 2000 year ("Performance Targets"). In 1999, the
Executive shall have a target bonus opportunity of up to $150,000, payable in
that amount if the Performance Targets established for the 1999 year are met (or
a lesser amount if some but not all of the Performance Targets are met).
(b) in 1999, the Executive shall be entitled to an incentive
award in addition to the award set forth in Section 5(a) above, in an amount
equal to $150,000, if the Company completes a financing transaction (other than
a loan) in the 1999 year resulting in gross proceeds payable to the Company in
excess of $50,000,000; provided, that the Executive shall not be entitled to
payment of the incentive award in this Section 5(b) in the event Executive is
terminated for any reason whatsoever or resigns, notwithstanding anything
contained herein.
(c) in 2000, the Executive shall have a target bonus
opportunity of up to $300,000, the amount of which and the criteria for which
shall to be determined by the Compensation Committee and Board of Directors of
the Company, in their discretion. The Executive shall be paid his incentive
awards no later than other senior executives of the Company are paid their
incentive awards.
6. Stock Awards.
(a) General. On the Effective Date, the Company shall grant
the Executive a stock option award described in this Section 6.
(b) Stock Option Award. As of the Effective Date, the Company
shall grant the Executive a ten-year stock option award, substantially in the
form attached to this Agreement as Exhibit A, to purchase 3,000,000 shares of
Stock. The exercise price shall be the Fair Market Value on the Effective Date,
which the Board has fixed as of the date of grant at $3.55 per share. The award
shall vest as provided in Exhibit A.
7. Employee Benefit Programs.
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During the Term of Employment, the Executive shall be entitled
to participate in all employee pension and welfare benefit plans and programs
made available to the Company's senior level executives or to its employees
generally, as such plans or programs may be in effect from time to time,
including, without limitation, pension, profit sharing, savings and other
retirement plans or programs, 401(k), medical, dental, hospitalization,
short-term and long-term disability and life insurance plans, accidental death
and dismemberment protection, travel accident insurance, and any other pension
or retirement plans or programs and any other employee welfare benefit plans or
programs that may be sponsored by the Company from time to time, including any
plans that supplement the above-listed types of plans or programs, whether
funded or unfunded. The Executive's participation shall be based on, and the
calculation of all benefits shall be based on, the assumptions that the
Executive has met all service-period or other requirements for such
participation provided that no such assumptions shall be made as to a
tax-qualified plan if such assumption would jeopardize the tax-qualified status
of such plan.
8. Reimbursement of Business and Other Expenses; Perquisites;
Vacations.
(a) The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Agreement
and the Company shall promptly reimburse him for all business expenses incurred
in connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy. The Company shall pay all
reasonable legal fees and expenses incurred by the Executive in connection with
the negotiation of the Executive's employment arrangements with the Company.
(b) During the Term of Employment, the Executive shall be
entitled to participate in each of the Company's perquisites in accordance with
the terms and conditions of such arrangements as they are in effect from time to
time for the Company's chief executive officer.
(c) The Executive shall be entitled to reimbursement for
reasonable moving expenses (excluding any brokers' fees or financing expenses)
in the event he relocates to Florida or London in furtherance of his duties
hereunder.
(d) The Executive shall be entitled to four (4) weeks
paid vacation per year of employment, which shall accrue and otherwise be
subject to the Company's vacation policy for senior executives.
9. Termination of Employment.
(a) Termination Due to Death. In the event that the
Executive's employment is terminated due to his death, his estate or his
beneficiaries, as the case may be, shall be entitled to the following benefits:
(i) Base Salary through the end of the month in
which death
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occurs; and
(ii) annual incentive award for the year in which
the Executive's death occurs, based on the original target award performance for
such year, payable in a single installment promptly after his death.
(b) Termination Due to Long-Term Disability. In the event
that the Executive's employment is terminated due to his long-term Disability,
he shall be entitled to the following benefits:
(i) disability benefits in accordance with any
long-term disability program then in effect for senior executives of the
Company;
(ii) Base Salary through the end of the month in
which long- term disability benefits commence; and
(iii) annual incentive award for the year in which
the Executive's termination occurs, based on the original target award for such
year, payable in a single installment promptly after his termination.
In no event shall a termination of the Executive's
employment for long-term Disability occur until the Party terminating his
employment gives written notice to the other Party in accordance with Section 23
below.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take
effect unless the provisions of this paragraph (i) are complied with. The
Executive shall be given written notice by the Board of the intention to
terminate him for Cause, such notice (A) to state in detail the particular act
or acts or failure or failures to act that constitute the grounds on which the
proposed termination for Cause is based and (B) to be given within six months of
the Board learning of such act or acts or failure or failures to act. The
Executive shall have ten calendar days after the date that such written notice
has been given to the Executive in which to cure such conduct, to the extent
such cure is possible. If he fails to cure such conduct, the Executive shall
then be entitled to a hearing before the Board. Such hearing shall be held
within 15 calendar days of such notice to the Executive. If, within five
calendar days following such hearing, the Executive is furnished written notice
by the Board confirming that, in its judgment, grounds for Cause on the basis of
the original notice exist, he shall thereupon be terminated for Cause.
(ii) In the event the Company terminates the
Executive's employment for Cause:
(A) he shall be entitled to Base Salary through
the date of the termination; and
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(B) all outstanding options, whether or not
exercisable, shall be forfeited.
(d) Termination without Cause or Constructive Termination
without Cause. In the event the Executive's employment is terminated by the
Company without Cause, other than due to Disability or death, or in the event
there is a Constructive Termination without Cause, the Executive shall be
entitled to the following benefits:
(i) Base Salary through the date of termination;
(ii) Base Salary, at the annualized rate in
effect on the date of termination, for a period of 12 months following such
termination, provided that, at the Executive's option, the Company shall pay him
the present value of such salary continuation payments in a lump sum (using as
the discount rate the applicable Federal rate specified under Section 1274 of
the Internal Revenue Code of 1986, as amended (the "Code"), for short-term
Treasury obligations as published by the Internal Revenue Service for the month
in which such termination occurs);
(iii) a Pro Rata annual incentive award for the
year in which termination occurs, based on his original target award for such
year, payable when annual incentive awards are paid to other senior executives
(or in a lump sum in accordance with the proviso in Section 9(d)(ii));
(iv) an annual incentive award for a period of 12
months following the date of termination, based on his original target award for
the year in which termination occurs and payable in equal monthly installments
over the 12-month period of Base Salary continuation payments pursuant to
Section 9(d)(ii) (or in a lump sum in accordance with the proviso in
Section 9(d)(ii));
(v) all outstanding vested options shall remain
exercisable until the end of their originally scheduled terms;
(vi) the Executive shall be entitled to continued
participation in all medical, dental, vision and hospitalization insurance
coverage and in other employee benefit plans or programs in which he was
participating on the date of his termination until the earlier of:
(A) 12 months following the date of termination
and
(B) the date, or dates, he receives equivalent
coverage and benefits under the plans and programs of a subsequent employer. The
Executive shall promptly advise the Company of any such subsequent employment
and the benefits he receives in connection therewith.
(e) Voluntary Termination; Retirement.
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A termination of employment by the Executive on his
own initiative, other than a termination due to death or Disability or a
Constructive Termination without Cause or retirement following the end of the
Term of Employment, shall have the same consequences as provided in Section
9(c)(ii) for a termination for Cause. A voluntary termination under this Section
9(e) shall be effective 30 calendar days after prior written notice is received
by the Company.
(f) Consequences of a Change in Control.
If, following a Change in Control, the Executive's
employment is terminated by the Company without Cause, other than due to
Disability or death, or there is a Constructive Termination without Cause, the
Executive shall be entitled to the benefits provided in Section 9(d) above.
(g) Other Termination Benefits. In the case of any of the
foregoing terminations, the Executive or his estate shall also be entitled to:
(i) the balance of any incentive awards due for
performance periods which have been completed, but which have not yet been paid;
(ii) any expense reimbursements due the
Executive; and
(iii) other benefits, if any, in accordance with
applicable plans and programs of the Company.
(h) No Mitigation; No Offset. In the event of any
termination of employment under this Section 9, the Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain.
(i) Nature of Payments. Any amounts due under this
Section 9 are in the nature of severance payments considered to be reasonable by
the Company and are not in the nature of a penalty.
10. Confidentiality.
(a) The Executive agrees that he will not, at any time
during the Term of Employment or thereafter, disclose or use any trade secret,
proprietary or confidential information of the Company or any subsidiary or
affiliate of the Company, obtained during the course of his employment, except
as required in the course of such employment or with the written permission of
the Company or, as applicable, any subsidiary or affiliate of the Company or as
may be required by law, provided that, if the Executive receives legal process
with regard to disclosure of such information, he shall promptly notify the
Company and cooperate with the Company in seeking a protective order.
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(b) The Executive agrees that at the time of the
termination of his employment with the Company, whether at the instance of the
Executive or the Company, and regardless of the reasons therefor, he will
deliver to the Company, and not keep or deliver to anyone else, any and all
notes, files, memoranda, papers and, in general, any and all physical matter
containing information, including any and all documents significant to the
conduct of the business of the Company or any subsidiary or Affiliate of the
Company which are in his possession, except for any documents for which the
Company or any subsidiary or Affiliate of the Company has given written consent
to removal at the time of the termination of the Executive's employment and his
personal rolodex, phone book and similar items.
11. Noncompetition.
(a) Subject to the provisions of Section 11(b) below and
notwithstanding any other provisions of this Agreement, any and all payments
(except those made from Company-sponsored tax-qualified pension or welfare
plans), benefits or other entitlements to which the Executive may be eligible in
accordance with the terms hereof, may be forfeited, whether or not in pay
status, at the discretion of the Company, if the Executive at any time during
the term of his employment and for a period of one (1) year thereafter without
the consent of the Company (i) "establishes a relationship with a competitor" or
"engages in an activity" which is in conflict with or adverse to the interest of
the Company, all within the meaning of the Non-Competition Guideline referred to
below (a "Competitive Activity"), or (ii) directly or indirectly, (A) induces or
encourages any employee of the Company or any subsidiary or affiliate of the
Company to leave employment with the Company or such subsidiary or affiliate, or
(B) employs, hires or establishes a business with, or causes or encourages any
third person to employ, hire, or establish a business with, any person who has,
within the period of one year preceding such action by the Executive, employed
by the Company or any subsidiary or affiliate of the Company. The payments,
benefits and other entitlements hereunder are being made in part in
consideration of the obligations of this Section 11 and in particular the
post-employment payments, benefits and other entitlements are being made in
consideration of, and dependent upon, compliance with this Section 11(a) and, to
the extent set forth in Section 11(e), the Release and Agreement referred to in
Section 11(e). Exhibit B is a copy of the Non-Competition Guideline.
(b) Anything in Section 11(a) to the contrary
notwithstanding, no forfeiture or cancellation shall take place with respect to
any payments, benefits or entitlements hereunder or under any other award
agreement, plan or practice unless the Company shall have first given the
Executive written notice of its intent to so forfeit, or cancel or pay out and
Executive has not, within 30 calendar days of giving such notice, ceased such
unpermitted Competitive Activity, provided that the foregoing prior notice
procedure shall not be required with respect to (x) a Competitive Activity which
the Executive initiated after the Company had informed the Executive in writing
that it believed such Competitive Activity violated Section 11(a) or the
Non-Competition Guideline, (y) any Competitive Activity regarding local,
regional or long distance telephone services or other
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products or services which are part of a line of business which represents more
than 5% percent of the Company's consolidated gross revenues for its most recent
completed fiscal year at the time the Competitive Activity commences.
(c) Nothing in this Section 11 shall prohibit the Executive
from being a passive owner of not more than one percent of the outstanding
common stock, capital stock and equity of any firm, corporation or enterprise so
long as the Executive has no active participation in the management of business
of such firm, corporation or enterprise.
(d) If the restrictions stated herein are found by a court to
be unreasonable, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area and that the court shall revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law.
(e) Any payments or benefits made pursuant to Section 9 are:
(1) subject to the provisions, restrictions and limitations of Section 11(a)
above, but not otherwise subject to offset or mitigation, (2) subject to the
Executive's signing a Release and Agreement not to xxx the company in the form
of Exhibit C hereto with such changes therein or additions thereto as needed
under then applicable law to give effect to the intent of the Release and
Agreement and (3) receipt of Executive's resignation from all offices,
directorships and fiduciary positions with the Company, its Affiliates and their
respective benefit plans. Notwithstanding the due date of any post-employment
payment, any amounts due under Section 9 shall not be due until after the end of
any applicable revocation period with regard to the Release and Agreement.
(f) In no event shall the Executive be required to repay to
the Company any amount previously received by the Executive from the Company,
except to the extent required by the Non-Competition Guideline.
12. Resolution of Disputes.
(a) Mediation/Arbitration. Subject to Section 12(b), any
disputes arising under or in connection with this Agreement shall be resolved by
third party mediation of the dispute and, failing that, by binding arbitration,
to be held in Florida, in accordance with the rules and procedures of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Each
Party shall bear his or its own costs of the mediation, arbitration or
litigation, except that the Company shall bear all such costs if the Executive
prevails in such mediation, arbitration or litigation on any material issue.
(b) Specific Performance. Since a breach in the provisions of
Sections 10 and 11 could not adequately be compensated by money damages, the
Company shall be entitled, in addition to any other right and remedy available
to it, to an injunction restraining such breach or a threatened breach, and in
either case no bond or other
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security shall be required in connection therewith, and Executive hereby
consents to the issuance of such injunction. Executive agrees that the
provisions of Sections 10 and 11 are necessary and reasonable to protect the
Company in the conduct of its business.
13. Indemnification.
(a) The Company agrees that if the Executive is made a party,
or is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a director, officer or employee of the Company or is
or was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Executive's alleged action in
an official capacity while serving as a director, officer, member, employee or
agent, the Executive shall be indemnified and held harmless by the Company to
the fullest extent legally permitted or authorized by the Company's certificate
of incorporation or bylaws or resolutions of the Company's Board of Directors
or, if greater, by the laws of the State of Florida, against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or other liabilities or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee or agent of
the Company or other entity and shall inure to the benefit of the Executive's
heirs, executors and administrators. The Company shall advance to the Executive
all reasonable costs and expenses incurred by him in connection with a
Proceeding within 20 calendar days after receipt by the Company of a written
request for such advance. Such request shall include an undertaking by the
Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and
expenses.
(b) Neither the failure of the Company (including its board of
directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of any proceeding concerning payment of
amounts claimed by the Executive under Section 13(a) above that indemnification
of the Executive is proper because he has met the applicable standard of
conduct, nor a determination by the Company (including its board of directors,
independent legal counsel or stockholders) that the Executive has not met such
applicable standard of conduct, shall create a presumption that the Executive
has not met the applicable standard of conduct.
(c) The Company agrees to continue and maintain a directors'
and officers' liability insurance policy covering the Executive to the extent
the Company provides such coverage for its other executive officers.
14. Key-Person Life Insurance
Executive agrees that the Company may, in its discretion,
apply for and
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procure in its own name and for its own benefit, or for the benefit of
creditors, life insurance on the life of Executive in any amount or amounts
which the Company may deem advisable, and the Executive shall have no right,
title or interest therein. Executive further agrees to submit to any medical or
other reasonable examination and to execute and deliver any application or other
written instrument as may be reasonably necessary or appropriate to effectuate
the purposes and provisions of this Section 14. Executive has no reason to
believe that his life is not insurable with a reputable insurance company at
rates now prevailing in the City of New York for healthy men of his age.
15. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, heirs (in the case of the
Executive) and assigns. Rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it reasonably can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law.
16. Representation.
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person, firm or organization. The Executive represents that the
performance of his obligations under this Agreement will not violate any
agreement between him and any other person, firm or organization that would be
violated by the performance of his obligations under this Agreement.
17. Entire Agreement.
This Agreement contains the entire understanding and agreement
between the Parties concerning the subject matter hereof and supersedes all
prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, between the Parties with respect thereto.
18. Amendment or Waiver.
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No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and an authorized
officer of the Company. No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement to be performed
by such other Party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time. Any waiver
must be in writing and signed by the Executive or an authorized officer of the
Company, as the case may be.
19. Severability.
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by law
so as to achieve the purposes of this Agreement.
20. Survivorship.
Except as otherwise expressly set forth in this Agreement, the
respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive's employment. This Agreement itself (as
distinguished from the Executive's employment) may not be terminated by either
Party without the written consent of the other Party.
21. References.
In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
22. Governing Law/Jurisdiction.
This Agreement shall be governed in accordance with the laws
of New York without reference to principles of conflict of laws.
23. Notices.
All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (a) delivered
personally, (b) sent by certified or registered mail, postage prepaid, return
receipt requested or (c) delivered by overnight courier (provided that a written
acknowledgment of receipt is obtained by the overnight courier) to the Party
concerned at the address indicated below or to such changed address as such
Party may subsequently give such notice of:
If to the Company:
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Long Distance International Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Human Resources
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If to the Executive:
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
24. Headings.
The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
25. Counterparts.
This Agreement may be executed in two or more counterparts.
26. Conditions.
The effectiveness of this Agreement is conditioned upon the
following:
(i) there being no agreement between the
Executive and any prior employer that interferes or could interfere with his
employment with the Company unless such agreement is to the satisfaction of the
Company waived by such prior employer; and
(ii) the Executive passes a physical examination
to the satisfaction of the Company in accordance with its policy on
pre-employment physical examinations.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
LONG DISTANCE INTERNATIONAL INC.
By:_____________________________________
Xxxx Xxxxx, Director
By resolution of the Board
_______________________________
Xxxxx Xxxx
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