EMPLOYMENT CONTRACT, dated as of August 26, 1997 between Euroweb
International Corp., formally Hungarian Teleconstruct Xxxx.,000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000 (the "Company") and Xxxxx X. Xxxxx (the "Employee").
Whereas the Company and Employee entered into an employment contract
dated as of February 1, 1994 which was modified on April 12, 1994, October 23,
1995, December 23, 1996, and May 6, 1997 (which contract together with the
modifications are hereinafter referred to as the "Agreement"); and
Whereas the Agreement provided for the grant of 35,000 non-qualified
options to purchase 35,000 shares of the Company's Common Stock ("Stock") at an
exercise price of $1 per share, which options have vested and the shares
underlying said options have been registered with the Securities and Exchange
Commission; and
Whereas the Board of Directors on August 26, 1997 agreed that this
Agreement shall be modified so as to extend the term of the Agreement from to
December 31, 2002 to December 31, 1995 and to provide for Xxxxx X. Xxxxx a split
dollar life insurance policy in the face amount of $2,000,000.
Whereas the Company and the Employee desire to restate the Agreement
so as to incorporate the aforesaid modifications into the Agreement:
Now, therefore, the parties agrees as follows:
1. Agreement dated as of August 26, 1997 between the Company and the
Employee is restated by the agreement set forth herein.
2. TERM:
The Company agrees to employ the Employee in an executive capacity as
Chief Financial Officer, Secretary, Treasurer and Director and Employee agrees
to serve on the terms and conditions of this Agreement for a period of seven
years ending December 31, 2005. The period during which Employee is employed
hereunder is hereinafter referred to as the "Employment Period."
3. DUTIES & SERVICES:
During the Employment Period, Employee shall be employed in the
business of the Company. In performance of his duties, Employee shall be subject
to the reasonable direction of the Board of Directors of the Company. Employee
agrees to perform his duties hereunder to the best of his abilities and to take
no action outside of the ordinary course of business that he is not specifically
authorized to take by the Board of Directors of the Company, and that the
foregoing shall constitute a material term of this Agreement. Employee shall be
based in New York but shall be available to travel as the needs of the business
reasonably require.
4. COMPENSATION:
As full compensation for his services hereunder, the Company shall pay
Employee, during the Employment Period, as follows:
A. A basic salary of $150,000 per year payable in monthly installments
at the rate of $12,500 per month for the term of this agreement.
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B. The Company has granted to the Employee as of February 1, 1994,
35,000 non-qualified options to purchase 35,000 shares of Common Stock of
the Company at the same exercise price of $1 per share. All options vested
as of October 23, 1995 and the shares underlying the options were
registered with the Securities and Exchange Commission under a Registration
Statement on Form S-8 on December 9, 1996.
The options have a 10-year exercise term. Employee's right to receive
shares will be adjusted when the option is exercised both as to number and
exercise price to account for stock splits or other forms of recapitalization.
C. The Company acknowledges that it has not paid any salary to
Employee for the months of July through December 1996 and that any unpaid
salary shall be a debt of the Company to be paid to Employee at the time of
termination of the Agreement.
D. The Company agrees to provide the employee forthwith with a split
dollar life insurance policy in the face amount of $2 million to be paid
for by the Company but to be structured in such a way that the Company is
paid back in full out of the proceeds of the policy all of its costs in
connection with the policy, including all premiums paid by the Company.
5. EXPENSES AND BENEFITS:
(a) The Company, consistent with its policy of reporting and
reimbursement of business expenses, reimburse Employee for such ordinary and
necessary business related expenses as shall be incurred by Employee in the
course of the performance of his duties under this Agreement
(b) Employee shall be eligible to participate to the extent that he
qualifies in all benefit plans, including without limitation, pension, term life
insurance, hospitalization, medical insurance and disability plans as are made
available from time-to-time to executives of the Company.
(c) Employee shall be entitled to three weeks of paid vacation
annually, and to accumulate unused vacation weeks to the end of this agreement.
6. REPRESENTATIONS & WARRANTIES OF EMPLOYEE
Employee represents and warrants to the Company that Employee is under
no contractual or other restriction which is inconsistent with the execution of
this Agreement or performance of his duties hereunder.
7. TERMINATION:
In the event of death or physical or mental incapacity, or in the
event Employee resigns from Company due to change in management or in the event
of the termination of Employee's employment by the Company for any reason other
than "Cause" as hereinafter defined, Employee or his estate or representative
shall be entitled to full payment of his salary for the balance of the Agreement
payable in a lump sum at the option of the Employee or of his estate or
representative or payable monthly in accordance with the terms of the Agreement
and to
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payment of any unpaid salary owed to Employee under this Agreement. In addition
on termination of the agreement, the Company agrees to pay up all premiums due
or to be due under the split dollar life insurance policy described in paragraph
4D above so that the policy is not cancelled or terminated prior to the death of
the employee.
A. Cause, for purposes of this Agreement, shall mean that the Employee
shall have committed an intentional art of fraud, embezzlement or theft in
connection with Employee's duties or in the course of his employment with
the Company or any Subsidiary
8. SURVIVAL:
The covenants, agreements, representations and warranties contained in
or made pursuant to this Agreement shall survive Employee's rightful termination
of employment.
9. MODIFICATIONS:
This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, supersedes all existing agreements between
the parties concerning such subject matter, and may be modified only by a
written instrument duly executed by such party.
10. NOTICES
Any notice or other communication permitted to be given hereunder
shall be in writing and shall be mailed by certified mail, return receipt
requested or delivered against receipt to the party to whom it is to be given at
the address of such party set forth in the preamble to this Agreement (or to
such other address as the party shall have furnished in writing and in
accordance with the provisions of this Section 10). Notice to the estate of
Employee shall be sufficient if addressed to Employee as provided in this
Section 10. Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.
11. WAIVER:
Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be waiver of any other breach
of such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this agreement. Any waiver must be in writing.
12. BINDING EFFECT:
Employee's rights and obligations under this agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
commutation, encumbrance or the claims of Employee's creditors and any attempt
to do any of the foregoing shall be void. The provisions of this Agreement shall
be binding upon and inure to the benefit of Employee and his heirs and personal
representative and shall be binding upon and inure to the benefit of the Company
and its successors and assigns.
13. NO THIRD PARTY BENEFICIARIES:
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This Agreement does not create and shall not be construed as creating
any rights enforceable by any person not a party to this Agreement.
14. HEADINGS:
The headings in this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
15. COUNTERPARTS, GOVERNING LAW:
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed and construed in accordance
with the laws of the Republic of Hungary without giving effect to conflict of
laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above-written.
EUROWEB INTERNATIONAL CORP.
BY: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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