4
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of
June 1, 1998, between EXECUTIVE TELECARD, LTD., a Colorado
corporation with principal offices located in Denver, Colorado
(the "Company"), and Xxxxx Xxxxxxxxx (the "Executive").
WHEREAS, the parties desire to enter into this Agreement
setting forth the terms and conditions for the relationship of the
Executive with the Company.
NOW, THEREFORE, it is AGREED as follows:
1. Term. The Executive is hereby contracted as Vice
President of Marketing of the Company, for a period commencing on
June 1, 1998 and ending on December 31, 1998. This contract can be
extended at any time during its term by the mutual agreement of
the parties for a period ending on December 31, 2000. As Vice
President of the Company, the Executive shall render executive,
policy, and other management services to the Company of the type
customarily performed by persons serving in such capacities. The
Executive shall be responsible for the management of the marketing
and sales functions of the Company, and the Executive's duties
shall include the supervision of all aspects of such activities of
the Company. The Company's employees in the marketing and sales
departments shall be subject to the Executive's orders and
direction. The Executive shall report directly to the Company's
Chairman and Chief Executive Officer, and shall also perform such
duties as the Chairman and Chief Executive Officer of the Company
may from time to time reasonably direct.
2. Location of Services. During the term of this
agreement, the Executive shall perform services at the Company's
various offices and, in particular, he will spend at least 50% of
his time at the principal offices of the Company, currently
located in Denver, Colorado.
3. Fees. The Company shall pay the Executive a
monthly fee of $12,000. The monthly Fee shall not be decreased at
any time during the term of this Agreement.
4. Bonuses. The Executive shall be eligible to earn a
performance bonus if he remains as an Executive through the term
of this agreement. If goals are met or exceeded for the Bonus
Period, the Executive shall earn a bonus equal to 100% of total
monthly fees. If goals are met or exceeded the Executive shall
earn a bonus equal to $84,000. If only certain of such goals are
met, or goals are met only in part, for such Bonus Period, the
Executive shall earn a bonus equal to an amount to be recommended
by the Chief Executive and determined by the Board of Directors,
in its sole discretion, but not less than $21,000. Bonus shall be
payable to the Executive by February 1, 1999. The Board of
Directors may, in its sole discretion, award additional or greater
bonuses to the Executive based upon achievement of other Company
objectives during the Bonus Period.
5. Participation in Employee Benefit Plans. (NA)
The Executive shall promptly be reimbursed for any expenses which
he may incur in connection with his services hereunder in
accordance with the Company's normal reimbursement policies as
established from time to time.
6. Stock Options. Subject to approval by the
Compensation Committee of the Board of Directors, the Executive
shall be granted options to purchase an aggregate of 25,000 shares
of the Company's common stock, at an exercise price to be equal to
80% of the closing price of the Company's common stock as listed
on The Nasdaq National Market on the day preceding the date of
this agreement.
(i) options to purchase 25,000 shares shall vest
50% on the 60th day after the date hereof and
50% on December 31, 1998.
Each of the options will have a term of five years
from the date of grant. To the extent eligible, the options will
be issued as incentive stock options within the meaning and
subject to the limitations of Section 422 of the Internal Revenue
Code. Vesting of all options will immediate in the event that the
current Chairman and Chief Executive Officer (Xxxxxxxxxxx X.
Xxxxx) ceases to be the Chief Executive Officer of the Company.
7. Standards. The Executive shall perform the duties
and responsibilities under this Agreement in accordance with such
reasonable standards as may be established from time to time by
the Company's Chairman and Chief Executive Officer. The
reasonableness of such standards shall be measured against
standards for executive performance generally prevailing in the
Company's industry.
8. Voluntary Absences; Vacations. (NA)
9. Disability. (NA)
10. Termination of Agreement.
(a) The Chairman or the Board of Directors may
terminate the agreement at any time, subject
to payment of the compensation described
below.
(b) Within the first 4 months of the agreement,
50% of fees due through term plus minimum
bonus amount of $21,000.
After 4 months, 100% of fees due through term
and bonus amount of $21,000.
11. Restrictive Covenants.
(a) During the term of this Agreement and for a
period of 6months after termination of agreement the Executive
shall not at any time (i)compete on his own behalf or on behalf of
any other person or entity, with the Company or any of its
affiliates within all territories in which the Company does
business with respect to the business of the Company or any of its
affiliates as such business shall be conducted on the date hereof
or during the employment of the Executive under this Agreement;
(ii) solicit or induce, on his own behalf or on behalf of any
other person or entity, any employee of the Company or any of its
affiliates to leave the employ of the Company or any of its
affiliates; or (iii) solicit or induce, on his own behalf or on
behalf of any other person or entity, any customer of the Company
or any of its affiliates to reduce its business with the Company
or any of its affiliates.
(b) The Executive shall not at any time during or
subsequent to his employment by the Company, on his own behalf or
on behalf of any other person or entity, disclose any proprietary
information of the Company or any of its affiliates to any other
person or entity other than on behalf of the Company or in
conducting its business, and the Executive shall not use any such
proprietary information for his own personal advantage or make
such proprietary information available to others for use, unless
such information shall have come into the public domain other than
through unauthorized disclosure.
(c) The ownership by the Executive of not more
than 5% of a corporation, partnership or other enterprise shall
not constitute a violation hereof.
(d) If any portion of this Section 11 is found by
a court of competent jurisdiction to be invalid or unenforceable,
but would be valid and enforceable if modified, this Section 11
shall apply With such modifications necessary to make this Section
11 valid and enforceable. Any portion of this Section 11 not
required to be so modified shall remain in full force and effect
and not be affected thereby. The Executive agrees that the Company
shall have the right of specific performance in the event of a
breach by the Executive of this Section 11.
12. No Assignments. This Agreement is personal to each
of the parties hereto. No party may assign or delegate any rights
or obligations hereunder without first obtaining the written
consent of the other party hereto. However, in the event of the
death of the Executive all rights to receive payments hereunder
shall become rights of the Executive's estate.
13. Other Contracts. The Executive, during the term of
this Agreement, may from time to time engage in other paid
consultant activities, for the following entities: The Management
Network Group, Duke Power and Sovereign Communications. The
assignments, if any, will not impact performance and will be
cleared for approval with the Chairman.
14. Amendments or Additions. No amendments or
additions to this Agreement shall be binding unless in writing and
signed by all parties hereto.
15. Section Headings. The section headings used in
this Agreement are included solely for convenience and shall not
affect, or be used in connection with, the interpretation of this
Agreement.
16. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability
of any provision shall not affect the validity or enforceability
of the other provisions hereof.
17. Governing Law. This Agreement shall be governed by
the laws of the State of Colorado (other than the choice of law
rules thereof).
EXECUTIVE TELECARD, LTD.
By:
Xxxxx Xxxxxxxxx
