EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into this 13th day of April, 1998, by and between Xxxx Xxxxxx
(the "Employee") and Executive TeleCard, Ltd., a Delaware
corporation (the "Company").
WHEREAS, the Company wishes to engage the Employee as a
consultant, and the Employee has agreed to serve as a consultant,
in accordance with the terms and conditions set forth herein.
1. SCOPE OF SERVICES; LOCATION OF SERVICES
The Employee shall serve as principal financial advisor to the
Company and, in such capacity, shall provide his services to the
Company, for eight working days of his time per month, in the
development and implementation of a plan to finance the growth of
the Company (the "Financing Plan"), where the Financing Plan is
to be proposed by the Chief Executive Officer of the Company (the
"CEO") to the Board of Directors of the Company (the "Board") and
approved by the Board, as well as to assist with other financial
matters relating to the Company reasonably requested by the CEO
(the "Services"). In connection with the performance of the
Services, the Employee shall report to the CEO. During the term
of this Agreement, the Executive shall perform the Services at
the Company's various offices (particularly at its principal
office in Denver, Colorado).
2. COMPENSATION
a. The Company shall pay the Employee for the Services at a
rate of $8,000 per month (the "Monthly Fee") for working eight
days per month. If agreed between the Employee and the CEO that
the Employee will work for less than eight days per month, the
Company shall pay him a Monthly Fee that has been reduced on a
pro rata basis as determined by the CEO. The Monthly Fee is
payable biweekly in accordance with the normal periodic pay
period commencing April 13, 1998. The Company shall reimburse
the Employee for reasonable out-of-pocket expenses in accordance
with the Company's normal reimbursement policies for employee and
consultant expenses.
b. The Employee shall be eligible to receive a bonus at the end
of the one year period commencing on the date hereof of up to
$100,000 (the "Bonus"). The Bonus shall be based on the
achievement of certain financial performance targets, to be
determined by the CEO and the Board of Directors of the Company
and to be expressed in gross revenues and EBITDA (earnings before
interest, taxes, depreciation and amortization) (the "Performance
Targets"), and on the achievement of the goals of the Financing
Plan. The Bonus shall be payable as follows:
(i) If the Company meets one hundred percent (100%)
or more of the Performance Targets, the Employee shall receive
fifty percent (50%) of the Bonus.
(ii)If the Company meets at least seventy (70%) but
less than one hundred percent (100%) of the Performance Targets
(and therefore does not receive the 50% specified in clause (i)
(above), the Employee shall receive twenty-five percent (25%)
of the Bonus.
(iii) If the Company achieves the goals of the
Financing Plan, the Employee shall receive fifty percent (50%) of
the Bonus.
Additionally, in the event the Company outperforms the goals of
the Financing Plan, the Employee shall be eligible to receive an
additional bonus to be determined by the Compensation Committee
of the Board of Directors of the Company in its sole discretion.
The bonus earned by the Employee, if any, pursuant to this
Section 3(b) shall be payable on the 30th day following the one
year anniversary of the date hereof and shall be payable in a
single lump sum.
4. STOCK OPTIONS
In consideration of the Employee's acceptance of service
hereunder, the Employee shall be granted options to purchase an
aggregate of 75,000 shares of the Company's common stock, at an
exercise price to be equal to the closing price of the Company's
common stock as listed on The Nasdaq National Market on April 13,
1998 (the "Grant Date"), such option to vest upon (1) the first
anniversary of the Grant Date and (ii) meeting the goals of the
Financing Plan through March 1999, and such option to be subject
to the terms and conditions of the Company's 1995 Director Stock
Option and Appreciation Rights Plan and on terms to be set forth
in one of the Company's standard forms of stock option agreement
to be entered into between the Company and the Executive.
The term of such option shall be five years from the Grant Date.
5. BENEFITS
In addition to the benefits noted below, the Employee shall be
entitled to participate, on the same basis as executive employees
of the Company, in any stock option, stock purchase, pension,
thrift, profit-sharing, group life insurance, medical coverage,
education, or other retirement or employee pension or welfare
plan or benefits that the Company has adopted or may adopt for
the benefit of its employees. The Employee shall be entitled to
participate in any fringe benefits which are now or may be or
become applicable to the Company's executive employees generally.
Such employee benefits presently include the following: Medical
coverage, including health, dental and vision insurance,
commences at the beginning of the month following 30 days from
the date on which the Employee commences service with the
Company, and the Employee is responsible for 25% of the expense
of the Employee's medical coverage, with the Company responsible
for the remaining 75%. The Employee is eligible to participate
in the Company's 125 Flexible Spending Plan at the beginning of
the month following 30 days of service. The Employee's life
insurance is equal to two (2) times the Base Salary.
The Employee is eligible to contribute to the Company's 401k
Plan. Upon commencing service with the Company, the
Employee is eligible to immediately roll over any of
Employee's preexisting 401k Plan holdings.
Additionally, if the Employee shall become disabled or
incapacitated to the extent that the Employee is unable to
perform the Employee's duties and responsibilities hereunder, the
Employee shall be entitled to receive disability benefits of the
type provided for executive employees of the Company.
6. INVENTIONS AGREEMENT
The Employee shall execute the Company's standard Proprietary
Information and Inventions Agreement (the "Inventions
Agreement"), which Inventions Agreement is incorporated herein by
reference; provided, however, that where this Agreement and the
Inventions Agreement provide terms, remedies and restrictions
which differ, the terms, remedies and restrictions most
beneficial to the Company shall apply.
7. RESTRICTIVE COVENANTS
a. During Employee's service under this Agreement and for a
period of six months after termination of such service other than
a termination by the Company without cause, the Employee 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 service of the Employee 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 Employee shall not at any time during or subsequent
to his service 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 Employee 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 Employee shall not, during the term of this
Agreement, have any other paid employment (other than with a
subsidiary of the Company) that is inconsistent with this
Agreement or that interferes with the Employee's ability to
perform his duties and responsibilities hereunder.
d. The ownership by the Employee of not more than 5% of a
corporation, partnership or other enterprise shall not constitute
a violation hereof.
e. If any portion of this Section 7 is found by a court of
competent jurisdiction to be invalid or unenforceable, but would
be valid and enforceable if modified, this Section 7 shall apply
with such modifications necessary to make this Section 7 valid
and enforceable. Any portion of this Section 7 not required to
be so modified shall remain in full force and effect and not be
affected thereby. The Employee agrees that the Company shall
have the right of specific performance in the event of a breach
by the Employee of this Section 7.
8. TERM AND TERMINATION
a. Services are to provided under this Agreement through March
31, 1999, unless sooner terminated in accordance with the
provisions set forth below or extended by written agreement of
the parties.
b. Either party may terminate this Agreement at its
convenience upon twenty (20) days written notice to the other
party.
c. Either party may terminate this Agreement in the event that
the other party fails to perform any material covenant or
otherwise breaches any material term of this Agreement (i)
immediately upon written notice to the other party if the
nonperformance or breach is incapable of cure, or (ii) upon the
expiration of twenty (20) days after such notice is the
nonperformance or breach is capable of cure and has not been
cured. Upon any termination pursuant to this paragraph, the non
breaching party shall have all remedies provided by law.
d. The Employee's engagement under this Agreement shall
terminate immediately upon the occurrence of any of the
following: (i) death, (ii) disability which precludes his
performance of the Services or (iii) willful misconduct injurious
to the material business interests of the Company.
e. The parties' respective rights and obligations under
Sections 6 and 7 shall survive the termination or expiration of
this Agreement.
9. MISCELLANEOUS
a. Entire Agreement. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter
hereof and supersedes all prior and contemporaneous agreements,
negotiations and understandings, oral or written. This Agreement
may be modified only by an instrument in writing duly executed by
both parties.
b. Assignment. This Agreement and the rights and obligations
hereunder shall not be assigned or otherwise transferred by
either party without the prior written consent of the other
party, and any purported assignment or other transfer without
such consent shall be void and of no force or effect.
c. Notices. All notices required or permitted hereunder shall
be in writing and shall be sent by nationally recognized
overnight courier service, telecopy or by registered or certified
mail, return receipt requested, as follows: if to the Employee,
to: Xxxx Xxxxxx, 00000 Xxxxxx Xxxx, Xxxxxxxxx,XX 00000 Telephone
No.: (000) 000-0000
if to the Company, to:
Executive TeleCard, Ltd., 0000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000 Facsimile No.: (000) 000-0000 Attention:
CEO
or to such other address as such party shall have designated by
notice hereunder. Unless otherwise specified, notices shall be
deemed given when the return receipt is received.
d. Waiver. Any waiver of any right or default hereunder shall
be effective only in the instance given and shall not operate as
or imply a waiver of any similar right or default on any
subsequent occasion.
e. Severability. No determination by a court of competent
jurisdiction that any term or provision of this Agreement is
invalid or otherwise unenforceable shall operate to invalidate or
render unenforceable any other term or provision of this
Agreement and all remaining provisions shall be enforced in
accordance with their terms.
f. Governing Law. This Agreement shall be governed by the
substantive laws of the State of Colorado. Each party
irrevocably consents to the personal jurisdiction of, and venue
in, the state and federal courts within the State of Colorado.
g. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the Employee has executed this Agreement and
the Company has caused this Agreement to be executed by its duly
authorized officer as of the date first set forth above.
XXXX XXXXXX
By:
EXECUTIVE TELECARD, LTD.
By:
Chairman and Chief Executive Officer
