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EXHIBIT 10.42
January 30, 2001
Xxxxxx Xxxx
0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxx:
The purpose of this letter is to set forth the agreement between you
and Viatel, Inc. ("Parent") and its subsidiaries and any of their predecessors
including without limitation, Destia Communications, Inc. (collectively
hereinafter referred to as "Viatel") regarding your resignation from Parent as a
director, officer and employee and as a director or officer of any subsidiary of
Parent. This Agreement supersedes prior agreements among the parties, including
(i) the Employment Agreement dated as of August 27, 1999 between you and Viatel
(the "Employment Agreement"), (ii) the Stockholders Agreement, dated as of
August 27, 1999, among Stockholders (as defined therein), Parent, Viatel
Acquisition Corp. and Destia Communications, Inc. and (iii) the Tolling
Agreement, effective as of November 21, 2000, in their entirety and such
agreements are of no further force and effect.
As we have discussed, in addition to your resignation (as described
above) Viatel desires to obtain (i) the Stockholders release of all claims
against Viatel, (ii) a standstill agreement as provided herein, and (iii) the
Stockholders agreement to maintain the confidentiality of business information
of Viatel of which you have become aware during the course of your employment
with Viatel and as a member of Parent's Board of Directors. You and the other
Stockholders have agreed to the foregoing as consideration for Viatel's
commitment to provide to you the benefits set forth in paragraph 2 below. Based
on these considerations, the parties have mutually agreed as follows:
1. RESIGNATION. Effective as of January 30, 2001 (the "Effective
Date"), your resignation as a director, officer and employee of Parent and as a
director or officer of each of Parent's subsidiaries is accepted.
2. PAYMENTS AND BENEFITS. Parent will provide you with the following
payments and benefits:
(a) SEVERANCE PAYMENTS. On the Effective Date, Viatel (i) will cancel
your existing note to Viatel in the amount of $234,000 (evidencing a loan
originally made by Destia Communications, Inc. (now known as Viatel
Communications, Inc.)), and (ii) will pay you two months' salary in addition to
the salary that will be paid pursuant to section 2(b). The amounts specified in
section 2(a)(ii) will be wired to an account specified by you in writing.
(b) SALARY. On the Effective Date, Viatel shall pay you a lump sum cash
payment equal to the amount, if any, of accrued but unpaid base salary due to
you pursuant to the Employment Agreement and in accordance with Viatel's normal
payroll policies. These amounts shall be wired to an account specified by you in
writing.
(c) RESTRICTED STOCK. On the Effective Date, Viatel will vest the
32,000 shares of restricted stock granted to you in December 1999 and will
deliver stock certificates representing such shares to you without any
restricted legend or other impairment of their negotiability.
(d) STOCK. On the Effective Date, Viatel will deliver to you and the
other Stockholders stock certificates of Viatel representing in the aggregate
3,527,492 shares (the "Shares") without any restricted legend or other
impairment of their negotiability in exchange for your and the other
Stockholders share certificates in the same aggregate amount. By executing this
Agreement, Viatel also hereby represents that there are no stop transfers in
place, and no such transfer orders that would prevent you or the other
Stockholders from selling, transferring, pledging, encumbering, assigning or
otherwise disposing of the shares will be put in place.
(e) SOFTWARE LICENSE/TRADENAME USE. Within twenty (20) days from the
Effective Date, Viatel will deliver to you a license agreement pursuant to which
Parent will license to you, on a nonexclusive, irrevocable, perpetual, worldwide
basis, the software developed by Viatel to run its "Presto" prepaid product. In
addition, within such twenty (20) day period, Parent will also deliver to you an
agreement granting you a similar right to use the "Presto" tradename/trademark.
Viatel will also negotiate in good faith with you an agreement to sell to you
certain excess hardware and other assets, at a reasonable discounted price, that
are necessary to enable you to operate a business utilizing the Presto prepaid
product. Such agreements will not be subject to the confidentiality provisions
contained in section 7 herein. In addition, until execution of the agreements
described in this section, Viatel will continue to operate its existing Presto
business.
(f) BENEFIT PLAN PARTICIPATION. Viatel shall continue to maintain any
health, disability, accidental death and disability, business travel and life
insurance coverage and other health and benefit plans and programs to which you
were entitled immediately prior to the date hereof, and Viatel will continue to
pay the employer portion of the applicable premium through March 31, 2001,
provided, however, that any such benefits or payments shall cease if you receive
similar benefits from a subsequent employer. On or after such date, you may
elect COBRA coverage for up to an 18-month period or such longer period as
provided in COBRA, at your own expense. Except as otherwise provided herein, you
will not be entitled to any compensation or benefits (or any reimbursement
therefore) or to participate in any employee benefit programs of Viatel on or
after the date hereof.
(g) 401(K) RETIREMENT PLANS. You will be entitled to elect at any time
on or after the Effective Date, a distribution of any vested accrued benefits
under any 401(k), pension or other type of retirement plan sponsored or
maintained by Viatel in accordance with the terms of such plans.
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(h) DATA LINE. You will be entitled to retain one of the T-1 data lines
that are currently in service at your home for a period of one year from the
Effective Date at no cost to you.
(i) NO OTHER COMPENSATION OR BENEFITS. Except as otherwise provided
herein, you will not be entitled to any compensation or benefits (or any
reimbursement therefor) or to participate in any employee benefit program of
Viatel on or after the Effective Date.
3. STOCKHOLDERS' RELEASE.
(a) Except as otherwise provided herein, in consideration of the
payments and benefits provided to you under this Agreement, you and the other
Stockholders hereby release and discharge Viatel, its affiliates and with
respect to any actions, omissions, matter or events relating to Viatel or its
affiliates, their respective partners, directors, officers, employees and agents
(collectively, "Viatel Persons") from and against any and all claims, actions,
causes of action, damages, liabilities, promises, debts, compensation, losses,
obligations, costs or expenses of any kind or nature, whether known or unknown,
which the Stockholders ever had, now have or hereafter may have, against each or
any of the Viatel Persons , including, but not limited to, those arising from or
related to your employment relationships with Viatel or the termination of such
employment, any alleged violation of any covenant of good faith and fair dealing
relative to your employment or any applicable labor or employer-employee
statute, regulation or ordinance, whether federal, state or local (including, by
way of specificity but not of limitation, Title VII of the Civil Rights Act of
1964, the Americans with Disabilities Act, the Civil Rights Act of 1991, any
amendments to such acts and any and all state and local discrimination laws)(the
"Claims").
Notwithstanding the foregoing, the forgoing release shall not apply to
(i) any payment, compensations, benefits or other rights to which you are
entitled under this Agreement; (ii) any and all rights to indemnification from
Viatel (including expenses) provided in paragraph 15 herein or otherwise; and
(iii) any and all Claims that you and the other Stockholders may hereinafter
have by reason of your or the other Stockholders' status as stockholders of
Viatel that are tied to occurrences after the date of this Agreement.
(b) SPECIFIC RELEASE OF ADEA CLAIMS. In consideration of the payments
and benefits provided to you under this Agreement, you hereby release and
forever discharge the Viatel Persons from any and all claims, actions and causes
of action that you may have as of the date you sign this Agreement arising under
the Federal Age Discrimination in Employment Act of 1967, as amended, and the
applicable rules and regulations promulgated thereunder ("ADEA"). By signing
this Agreement, you hereby acknowledge and confirm the following: (i) you were
advised by Viatel in connection with your termination to consult with an
attorney of your choice prior to signing this Agreement and to have such
attorney explain to you the terms of this Agreement, including, without
limitation, the terms relating to your release of claims arising under ADEA,
(ii) you have been given a period of not fewer than twenty-one (21) days to
consider the terms of this Agreement and to consult with any attorney of your
choosing with respect thereto, and (iii) you are providing the release and
discharge set forth in this Section 3(c) only in exchange for consideration in
addition to anything of value to which you are already entitled.
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(c) You and the other Stockholders agree and understand that neither
you nor the other Stockholders shall construe or treat any aspect of this
Agreement as any admission of liability of any Viatel Persons.
4. VIATEL RELEASE.
(a) The Viatel Persons jointly and severally, all and singularly,
release and discharge you from any and all claims, actions, causes of action,
damages, liabilities, promises, debts, compensations, losses, obligations, costs
or expenses of any kind or nature, whether known or unknown, which any of the
Viatel Persons ever had, now have or hereafter may have against you, including,
but not limited to, those arising from or related to your employment
relationships with Viatel or the termination of such employment, any alleged
violation of any covenant of good faith or fair dealing, all common law claims
now existing or hereafter recognized, claims for negligence, breach of fiduciary
duty, interference with actual or prospective contractual relations,
misrepresentation, promissory estoppel, equitable estoppel, breach of contract
or any other type of claim. Viatel does not waive or release any rights set
forth in this Agreement.
(b) It is agreed and understood that the Viatel Persons shall not
construe or treat any aspect of this Agreement as any admission of liabilities
on your part.
5. STANDSTILL AGREEMENT. Stockholders' agrees that, until the earlier
of two years after the Effective Date or until you, the other Stockholders or
any other person or affiliate to which you or the other Stockholders transfer
the Shares own in the aggregate less than 3% of Viatel's common stock on a fully
diluted basis, neither you nor any of your affiliates will, directly or
indirectly, unless in any such case specifically invited in writing to do so by
the board of directors of Parent (i) individually or together with one or more
persons or entities, acquire, offer to acquire or agree to acquire, or
participate in the financing of any acquisition of, beneficial ownership of any
securities of Parent entitled to vote in the general election of directors
(other than securities distributed generally to all holders of a class of
securities), or securities convertible into or exchangeable or exercisable for
such securities (other than stock options) (collectively, "Securities"); (ii)
initiate, propose, engage or otherwise participate in the solicitation of
stockholders or their proxies for approval of one or more stockholder proposals
(including, without limitation, the election of directors, any amendment to the
charter or bylaws, or any business combination transaction) with respect to
Parent; (iii) otherwise act alone or in concert with any other person or entity
to seek to influence or control the management, board of directors, policies or
affairs of Parent, or to solicit, propose or encourage any other person or
entity with respect to any form of business combination transaction with Parent
or any subsidiary of Parent, or to solicit, make or propose or encourage any
other person or entity with respect to, or announce an intent to make, any
tender offer or exchange offer for any Securities; (iv) request Parent or its
board of directors, officers, employees or agents, to amend or waive, or seek
any modification to, any provision of this section 5; or (v) take any action
designed to, or which can reasonably be expected to, require Parent to make a
public announcement regarding any of the matters referred to in this section 5.
Notwithstanding the forgoing, the provisions of this section shall be reinstated
during the two year period referred to above, if you or your affiliates increase
share ownership in Parent to a level which is in excess of the 3% threshold.
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6. COOPERATION. From and after the date hereof, you will use all
reasonable efforts to cooperate with Viatel and its respective directors,
officers, attorneys and representatives in connection with the conduct of any
action, proceeding, investigation or litigation involving Viatel, solely with
respect to events or actions which occurred when you were employed by Viatel. In
such matters, you agree to provide, in response to reasonable requests: (i)
truthful testimony and information relating to Destia Communications, Inc. and
its subsidiaries and affiliates; and (ii) any documents relating to such
entities that may be in your possession, custody, or control (excluding
privileged communications between you and attorneys retained by you and
excluding matters and claims arising under this Agreement and any
indemnification contemplated by section 15), to Viatel and its respective
directors, officers, attorneys, experts, or consultants in connection with any
action, suit, proceeding, investigation, or litigation involving, or instituted
by, or on behalf of, Viatel.
7. CONFIDENTIALITY. You acknowledge that you have been provided access
to information regarding Viatel (including, but not limited to, network design,
sales records, operational systems, customer lists, costs and specifications of
Viatel products and services, know-how, trade secrets, personnel information,
research products, development plans or projects, investments, marketing and
other company strategies and other proprietary information) which constitutes
valuable, special and unique property of Viatel (the "Confidential
Information"). You agree that you will not, at any time or for any reason or
purpose whatsoever, make use of, divulge or otherwise disclose, directly or
indirectly, any of the Confidential Information to any person or use any of such
information without Viatel's express prior written authorization, which may be
withheld at Viatel's election; provided, however, that the foregoing limitation
shall not apply to: (a) the extent as may be required by law; (b) comply with
any legal process or subpoena (following advance notice to Viatel), (c)
statements in response to authorized inquiry from a court or regulatory body
(following advance notice to Viatel); (d) information generally known to the
public or in the industries related to Viatel's business (other than through a
breach of this Agreement); and (e) Confidential Information provided to you in
connection with the grant of the license and tradename contemplated by section
2(e) above. Nothing herein shall prevent you from (i) using your general skills,
general industry knowledge and experience, (ii) knowledge gained by you in
connection with the development and operation of the product and related
business being licensed to you as contemplated by section 2(e), and (iii) the
use of the license contemplated by Section 2(e) to compete directly with Viatel
for the provision of telecommunications services.
8. NON-SOLICITATION. For a period of twenty-four (24) months from the
Effective Date, you shall not to solicit, induce, counsel, advise or encourage
either directly or indirectly, any employee of Viatel who is employed in an
executive, managerial, professional or non-clerical administrative capacity to
leave the employment of Viatel. In addition, you agree that you will not, either
directly or indirectly, contact or attempt to contact any non-employee director
of Parent for any reason or any employee director at other than their office
number for any reason involving Viatel.
9. NON-DISPARAGEMENT. You and Viatel will not at any time, and you and
Viatel shall use their best efforts to ensure that the other Stockholders and
Viatel Persons, respectively, will not at any time, make any statement, whether
written or oral, or take any other action which is intended, or could reasonably
be expected to, disparage, defame or harm the reputation (or otherwise cause
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adverse publicity) of the other parties. In no event shall any public statements
be made about Viatel or Viatel Persons on the one hand and you and the other
Stockholders on the other, without the prior written consent of Viatel or you,
respectively. You and the other Stockholders also each agree that you will not
assist in any litigation or investigation against Viatel or any Viatel Person,
except as required by law.
10. NON-DISCLOSURE. You, the other Stockholders and Viatel agree that
the terms and conditions of this Agreement are confidential and that each will
not, without the express prior written consent of Viatel or you, as applicable,
in any manner publish, publicize, disclose or otherwise make known or permit or
cause to be known such terms and conditions to anyone (other than such party's
prospective or current lenders, financial advisors and legal advisors, who shall
agree to be bound by this paragraph prior to disclosure of the terms and
conditions hereof to such persons), except as required by law, rule or
regulation of any self regulatory organization, including The Nasdaq, or in any
proceeding to enforce the terms of this Agreement. Notwithstanding the
foregoing, the parties hereto will agree upon a mutually agreeable press release
concerning this Agreement.
11. NO WAIVER. This Agreement constitutes the entire agreements and
understandings among the parties and, effective immediately upon execution,
supercedes any and all prior agreement or understanding, oral or written,
between the parties, including, but not limited to your existing employment
agreement with Parent and the Stockholders Agreement (except as specifically
referred to herein). None of the provisions of this Agreement can be waived or
modified except in writing signed by the parties. This Agreement shall be
binding upon and inure to the benefit of you and your heirs, legal
administrators and assigns and Viatel's successors and assigns (whether by
merger, consolidation, purchase, reorganization, sale of stock, sale of assets,
liquidation or otherwise). Furthermore, there are no agreements, covenants or
understandings other than those contained herein except as govern the
compensation and benefit plans and arrangements set forth herein.
12. SEVERABILITY. If any term or provision of this Agreement shall be
held invalid or unenforceable, the remaining terms and provisions of this
Agreement shall not be affected thereby and (i) such provision shall be reformed
to the minimum extent necessary to be valid while preserving the intent of the
parties as expressed herein, or (ii) if such provision cannot be so reformed,
such provision shall be severed from this Agreement and an equitable adjustment
shall be made to this Agreement (including, without limitation, addition of
necessary further provisions to this Agreement) so as to give effect to the
intent as so expressed and the benefits so provided. Neither such holding nor
such reformation nor severance shall affect or impair the legality or
enforceability of any other provision of this Agreement.
13. REVOCATION. You and the other Stockholders acknowledge and agree
that by signing this Agreement each of you understand that each of you
voluntarily waives the right to revoke this Agreement during the seven (7) day
period following the execution of this Agreement.
14. RECOVERY OF CERTAIN COSTS. If Viatel fails to pay any amounts
provided hereunder or any party otherwise breaches any provision of this
Agreement, either in whole or in part, then the non-breaching party (Viatel in
the case of a breach by any Stockholder and you in the event of a beach by
Viatel) shall be entitled to recover from the other party, in addition to the
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recovery of its damages and/or other relief, any costs, including reasonable
attorneys' fees, incurred or reasonably expected to be incurred in instituting,
prosecuting or defending any action arising by reason of such failure or the
breach of this Agreement.
15. INDEMNIFICATION; D&O INSURANCE. (a) Viatel hereby agrees to
indemnify you against any and all expenses (including attorney's fees and
costs), liabilities, costs, damages, judgments, fines and amounts paid in
settlement, actually and reasonably hereinafter incurred by you, to the fullest
extent now or hereafter permitted by law, in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, brought or threatened to be brought against you
by reason of your performance as a director, officer, employee, consultant or
agent of Viatel. The rights of indemnification provided for herein shall not be
deemed exclusive of any other rights to which you may be entitled under Viatel's
By-laws or Certificate of Incorporation, and shall inure to the benefit of your
heirs, executors and administrators. Any expenses (including reasonable
attorney's fees and costs) incurred by you in connection with an event for which
indemnification is provided hereunder shall be paid promptly by Viatel in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by you to repay such amount if it shall ultimately be
determined that you are not entitled to be indemnified by Viatel as authorized
by law.
(b) Viatel hereby reaffirms that you shall continue to have those
indemnification rights provided for, and for the periods specified in, section
5(j) of the Merger Agreement between Parent, Viatel Acquisition Corp. and Destia
Communications, Inc. dated as of August 27, 1999.
(c) Viatel shall not exclude you from coverage under any directors and
officers insurance policy that it maintains generally for some or all of its
directors and officers.
16. TAX CONSEQUENCES. Viatel makes no representations or warranties
with respect to the tax consequences of any consideration provided to you by
Viatel under the terms of this Agreement nor otherwise. You shall be responsible
for all income taxes and similar taxes and payments due to governmental
authorities with respect to all consideration provided for hereunder which have
not been deducted by Viatel.
17. GOVERNING LAW AND CHOICE OF FORUM. PURSUANT TO TITLE 14 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, THE PARTIES HERETO AGREE THAT
(1) THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT FEDERAL LAW MAY GOVERN AND (2) THE
FORUM FOR ANY DISPUTE HEREUNDER SHALL BE IN ANY FEDERAL AND/OR STATE COURT
LOCATED IN NEW YORK COUNTY, AND THERE SHALL BE NO DEFENSE TO THE SELECTION OF
SUCH FORUM BASED ON JURISDICTION, VENUE OR CONVENIENCE. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH JURISDICTION OR INCONVENIENT FORUM.
PLEASE READ THIS AGREEMENT CAREFULLY. BY EXECUTING THIS AGREEMENT, EACH
OF THE STOCKHOLDERS WILL HAVE WAIVED ANY RIGHT IT MAY HAVE TO BRING A LAWSUIT OR
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MAKE ANY LEGAL CLAIM, KNOWN OR UNKNOWN, AGAINST VIATEL OR ANY VIATEL PERSONS
BASED ON ANY ACTIONS TAKEN BY VIATEL OR ANY VIATEL PERSONS ARISING FROM OR
RELATED TO YOUR EMPLOYMENT WITH VIATEL OR THE TERMINATION OF SUCH EMPLOYMENT, UP
TO THE DATE OF THE EXECUTION OF THIS AGREEMENT. WE RECOMMEND THAT YOU RETAIN
LEGAL COUNSEL TO ADVISE YOU WITH RESPECT TO THE TERMS OF THIS AGREEMENT AND THE
TERMINATION OF YOUR EMPLOYMENT WITH VIATEL.
18. BINDING EFFECT. The parties understand that this Agreement is not
binding upon the parties until each accepts it, which acceptance is to be
evidenced by their respective execution on the signature page hereof.
19. NOTICES. All notices, requests and demands to or upon the
respective parties must be in writing and may be served by personal delivery,
facsimile transmission or certified mail, return receipt requested. All such
notices, requests and demands shall be deemed to be made upon receipt to any
Stockholder: at the address set forth above, and to Viatel at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
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The signature of the parties below signifies their voluntary acceptance of the
terms hereof. Please execute below and return one copy of this Agreement.
Sincerely,
VIATEL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
VIATEL ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
VIATEL COMMUNICATIONS, INC.
(FORMERLY KNOWN AS DESTIA COMMUNICATIONS, INC.)
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
Accepted and Agreed:
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
/s/ Xxxxxx Xxxx
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AT ECON LTD. PARTNERSHIP
/s/ Xxxxxx Xxxx
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AT ECON LTD. PARTNERSHIP 2
