TERMINATION AGREEMENT
This Termination Agreement, made as of this 17th day of October,
1997 by and between U.S. WATS, INC., a New York corporation with offices at
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 (the
"Company") and XXXXXXXXXXX XXXXXXX, residing at 000 Xxx Xxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive are parties to an Executive
Employment Agreement made as of the 3rd day of March, 1997 (the "Employment
Agree ment"); and
WHEREAS, the Company and the Executive are desirous of terminating
the Employment Agreement effective immediately;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, intending to be legally bound, the parties hereto
agree as follows:
1. Employment. The Company and the Executive agree that the Execu
tive's employment by the Company is terminated as of October 17, 1997.
Executive shall sign promptly upon request all documents reasonably required
to transition his duties and responsi bilities to other persons designated by
the Company.
2. Severance. Notwithstanding the termination of Executive's
employment with the Company, the Company shall pay the Executive the sum of
$52,000 upon execution of this Termination Agreement, in two (2) equal
installments of $26,000 due on October 20, 1997 and December 12, 1997.
3. Options. All of the stock options granted by the Company to
Executive, whether or not those stock options have vested, shall terminate as
of the date hereof, except that options to purchase up to 56,667 shares of the
Company's Common Stock at an exercise price of $1.219 per share, granted to
Executive pursuant to a Stock Option Agreement dated as of March 3, 1997,
shall continue in effect until April 15, 1998. The common stock issuable upon
exercise of such stock options shall be registered with the Securities and
Exchange Commission in order to permit public sale of such shares. The
options not exercised shall terminate on April 15, 1998.
4. Confidentiality. The provisions of section 8 of the Employment
Agreement shall survive this Termination Agreement, except for section
8.1(iii). Nothing in this Termination Agreement shall be deemed to prohibit
Executive from engaging in or becoming interested in or associated with any
other person, corporation, firm, partnership or other entity engaged in a
business which is competitive with any business conducted or contemplated by
the Company, provided that Executive shall not disclose or utilize in such
activity any confidential information of the Company.
5. Indemnification. The Company agrees to indemnify fully and
hold harmless Executive from any claim or liability resulting from claims of
third parties arising out of the performance of his duties under the
Employment Agreement. The Company's obliga tions hereunder shall include all
expenses of defending Executive in connection with any such claim or
liability, as well as providing Executive with counsel reasonably acceptable
to him and to the Company. Nothing in this paragraph shall obligate the
Company to indemnify or hold harmless Executive for claims or liability
arising out of deliberate wrongdoing by Executive as determined by a court of
competent jurisdiction. The Company shall advance the expenses of defending
Executive until such time as a court of competent jurisdiction deter mines
that Executive has engaged in deliberate wrongdoing. Executive shall promptly
repay the Company all expenses advanced on his behalf upon a finding by a
court of competent jurisdiction that he has engaged in deliberate wrongdoing.
Nothing in this paragraph shall be deemed to affect any coverage or obligation
under any insurance policy maintained by the Company for the benefit of
Executive.
6. Return of Company Property. Executive shall return to the
Company all computers, cellular telephones, pagers, safety deposit box keys
and other property of the Company that are in his possession. Executive shall
further return to the Company all memoranda, notes, records, reports and other
information, whether preserved on paper or on a computer or computer disk (and
all copies thereof) relating to the businesses of the Company, which Executive
obtained while employed by, or otherwise serving or acting on behalf of the
Company and which he may possess or have under his control.
7. Disability Insurance. Executive shall pay to the Company
$1,200 upon execution of this Termination Agreement. Company shall convey to
Executive all of its right, title and interest in a certain disability
insurance policy on Executive, including the right, if any, to any return
premium on termination thereof.
8. Release. The Company and the Executive each waive, release and
forever discharge one another of and from any and all past or present causes
of action, suits, agreements or other claims which one may have against the
other upon or by reason of any matter, cause or thing whatsoever arising out
of Executive's employment by the Company and each promises not to file a
lawsuit to assert such claims; provided, however, that this release shall not
apply to the obligations set forth in this Termination Agreement.
9. Business Goodwill. At all times following the date hereof,
Executive shall make no comments or take any other actions, direct or
indirect, that will reflect adversely on the Company or its officers,
directors, employees or agents in such capacity or adversely affect their
respective business reputations or goodwill. At all times following the date
hereof, the Board of Directors, each director and each officer of the Company
and Xxxxxxx Xxxxxx and Xxxxx Xxxxx shall make no comments or take any other
actions, direct or indirect, that will reflect adversely on Executive or
adversely affect his business reputation or goodwill.
10. Entire Agreement. This Termination Agreement contains the
entire agreement of the parties.
11. Applicable Law. This Termination Agreement shall be construed
according to the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed this
Termination Agreement the day and year aforesaid.
U.S. WATS, INC.
By:_________________________________
____________________________________
Xxxxxxx Xxxxxx
____________________________________
Xxxxx X. Xxxxx
____________________________________
Xxxxxxxxxxx Xxxxxxx
