EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made this 10TH day of
NOVEMBER, 1995, between COMMUNICATION TELESYSTEMS INTERNATIONAL, a California
Corporation, having its principal office at 0000 Xx Xxxxx Xxxxxxx Xxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, (hereinafter referred to as "CTS")
and XXXXXXX X. XXXXXXXXXX of L5R1, Xxxx Xxxxxxxx, Xxxxxxxx 00000 (hereinafter
referred to as "Employee").
In consideration of the mutual promises of the parties hereto, and other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT: CTS hereby agrees to hire Employee as an employee of CTS,
commencing on DECEMBER 21, 1995 (the "Commencement Date").
2. GENERAL DUTIES OF EMPLOYEE: Employee shall have the title of Director
of Network Operations for CTS.
3. CONDUCT OF EMPLOYEE: Employee shall use her best efforts to promote
the interests of CTS and shall refrain from any acts which may adversely
affect the reputation or business of CTS. Employee shall adhere to all laws
and ethical standards applicable to her conduct as an Employee for CTS, shall
abide by and observe all rules, regulations and policies of CTS presently in
effect and any amendments and additions thereto made from time to time and
shall perform in a manner consistent with generally accepted procedures for
her profession.
4. COMPENSATION: As Employee's sole and complete compensation, CTS will
pay to Employee, subject to the conditions and limitations set forth in this
Agreement and all applicable withholding requirements and authorized
deductions, the following compensation:
(a) SALARY: CTS shall pay Employee a salary of Seven Thousand Nine
Hundred Sixteen Dollars and Sixty Seven Cents ($7,916.67) per month.
(b) HEALTH INSURANCE: Employee shall participate in such medical
programs or plans that are generally available to employees of CTS, after the
standard ninety (90) day waiting period required for all employees.
(c) VACATION: Employee shall be entitled to ten (10) business days
of vacation per year.
(d) BONUS INCENTIVES: Employee shall also be eligible for certain
bonus incentives in the amounts and subject to the conditions set forth in
Addendum "A" to this Agreement.
1
BJ EDS
------- -------
Initial Initial
(e) MOVING EXPENSES: CTS shall reimburse Employee for reasonable
moving expenses not to exceed Ten Thousand Dollars ($10,000.00), incurred in
connection with her permanent relocation to the San Diego, California
metropolitan area pursuant to this Agreement.
5. ADVANCES: CTS may, in its sole discretion, make payments to Employee
as advances on compensation expected to become earned pursuant to this
Agreement. Employee agrees that each such advance constitutes a personal
indebtedness of Employee to CTS, repayable by Employee in full immediately
upon demand by CTS, until such time as the compensation on which the advance
is made becomes fully earned.
6. COMPENSATION CHANGES: Notwithstanding any other provision contained in
this Agreement, the rates and terms of salary and other compensation payable
to Employee by CTS are subject to change by CTS, upon ten (10) days prior
written notice to Employee.
7. RECORDS TO REMAIN PROPERTY OF CTS: All records of CTS, all records
pertaining or relating to clients of CTS, and all records and documents
prepared or generated by Employee, CTS or any other person or entity in
connection with the performance of Employee under this Agreement, including
but not limited to account cards, invoice copies, customer lists, leads and
all documents and containing the names or addresses of or information
relating to clients who have done business with CTS, are and shall remain the
property of CTS at all times during the term of Employee's employment with
CTS, and after termination of such employment for any reason. None of such
records, nor any part of them may be used by Employee either in original form
or in computerized, duplicated, or copied from except for the purpose of
conducting the business of CTS and the names, addresses, and other
information and data in such records are not to be transmitted verbally, in
writing, or in computerized form by Employee except in the ordinary course of
conducting business for CTS. All of said records or any part of them are the
sole proprietary information of CTS and shall be treated by Employee as
confidential information of CTS. In the event of the termination of
Employee's employment with CTS for any reason, Employee shall return to CTS
all such records and any copies or summaries thereof in computerized,
duplicated, copied or any other form.
8. LIMITATIONS ON EMPLOYEE'S USE OF PROPRIETARY INFORMATION: Employee
shall not at any time, or in any manner, directly or indirectly divulge,
disclose or communicate to any other person, firm or corporation, nor shall
Employee use for her own benefit other than in
2
BJ EDS
------- -------
Initial Initial
connection with the performance of Employee's duties under this Agreement:
(i) any of the names, addresses, telephone numbers of or other data relating
to clients of CTS, prospective customers of CTS or persons, firms or
corporations to whom Employee may have provided services in her capacity as a
representative of CTS or to whom other representatives of CTS have provided
such services at any time; (ii) any of the records or documents referred to
in Paragraph 9 of this Agreement; or (iii) any other information acquired by
Employee as a consequence of her employment with CTS.
9. INVENTIONS: All improvements, discoveries, inventions, designs,
documents or other data related to the Company's business (whether or
not deemed patentable) conceived, developed, made, perfected, acquired, or
first reduced to practice, in whole or in part, during off-duty hours and
away from the Company's premises as well as in the regular course of
employment by Employee during development and research, of the Company or its
subsidiaries and affiliates shall be promptly disclosed to the Company, and
Employee shall hereby assign and transfer her right, interest and title
thereto and such improvements, discoveries, inventions, designs, documents,
or other data shall become the property of the Company. During the term of
Employee's employment and anytime thereafter, upon request of the Company,
Employee will join and render assistance in any proceedings, and execute any
papers necessary to file and prosecute applications for, and to acquire,
maintain and enforce letters, patent, trademarks, registrations and/or
copyrights, both domestic and foreign, with respect to such improvements,
discoveries, inventions, designs, documents, or other data as required for
vesting title to same in the Company.
10. COMPENSATION AFTER TERMINATION OF EMPLOYMENT: Employee shall have no
further right to salary or any other compensation after termination of
Employee's employment with CTS, irrespective of the time, manner or cause of
such termination.
11. TERMINATION OF EMPLOYMENT: EMPLOYEE AND CTS SHALL AT ALL TIMES HAVE
THE RIGHT TO TERMINATE EMPLOYEE'S EMPLOYMENT WITH CTS, WITH OR WITHOUT CAUSE,
BY ORAL OR WRITTEN NOTIFICATION TO THE OTHER PARTY.
12. ASSIGNMENT: Neither this Agreement nor any other benefits to accrue
hereunder shall be assigned or transferred by Employee, either in whole or in
part (except a transfer effective upon the death of Employee of any payments
due hereunder), without the written consent of CTS, and any purported
assignment in violation hereof shall be void.
13. INDEMNITY: CTS and Employee shall have such indemnity rights
3
BJ EDS
------- -------
Initial Initial
and obligations as provided by California law. Additionally, CTS and Employee
shall indemnify, defend and hold harmless each other from, against and with
respect to any claim, liability, obligation, loss, damage, assessment,
judgement, cost or expense (including without limitation, reasonable
attorneys' fees and costs and expenses reasonably incurred in investigating,
preparing, defending against or prosecuting any litigation or claim), in any
action, suit, proceeding or demand, of any kind or character, arising out of
or in any manner, incident, relating or attributable to any breach of this
Agreement.
14. CHOICE OF LAW: This Agreement is executed and intended to be
performed in the State of California and the laws of the State of California
shall govern its interpretation and effect.
15. PARTIAL INVALIDITY: If any term, provision, covenant, or condition
of this Agreement is held by a Court of competent jurisdiction to be invalid,
void or unenforceable, the rest of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated. In the
event any provision contained in Paragraphs 7, 8 or 9 of this Agreement
should ever be deemed to exceed the law in any respect, then the parties
hereto agree that such provision shall be amended automatically to provide
CTS with the maximum protection permitted by law.
16. ENTIRE AGREEMENT: This Agreement contains the entire agreement
between the parties concerning the subject matter of this Agreement. It
supersedes all negotiations, statements, promises, or understandings, if any,
made prior to the execution of this Agreement. Any such negotiations,
promises, or understandings shall not be used to interpret or constitute this
Agreement.
17. GENDER: As used in this Agreement, the masculine, feminine or neuter
gender, and the singular or plural number, shall each be deemed to include
the others whenever the context so indicates.
18. OUTSIDE EMPLOYMENT: During the term of Employee's employment with
CTS, Employee shall not engage in any other employment or outside business
activity without the prior written consent of CTS.
19. VENUE: The venue of any civil action, arbitration or other legal
proceeding between Employee, on one hand, and CTS and/or its officers,
directors and employees, on the other hand, arising out of or relating to
this Agreement, the employment of Employee by CTS, the termination of
Employee's employment with CTS, or any other dealings between Employee and
CTS, lies only in San Diego, California, and Employee and CTS waive any right
they have under any statute or law
4
BJ EDS
------- -------
Initial Initial
to cause such action or proceeding to be transferred to any other venue.
20. AMENDMENT AND WAIVER: The terms of this Agreement may be amended,
modified or eliminated, or the observance or performance of any term,
covenant or provision herein may be omitted or waived (either generally or in
a particular instance, and either prospectively or retroactively) only by a
writing signed by Employee and CTS. The waiver by CTS of any breach by
Employee of any term or provision of this Agreement shall not be construed as
a waiver of any subsequent breach.
21. SURVIVAL OF PROVISIONS: The provisions contained in Paragraphs 7, 8,
9, 13, 19 and 25 of this Agreement, and the other provisions hereof to the
extent applicable, shall survive the termination of Employee's employment
with CTS.
22. INUREMENT: This Agreement shall be binding upon and inure to the
benefit of all heirs, assigns (to the extent permitted) and successors in
interest of the parties hereto.
23. HEADLINES: The titles and headlines herein are for convenience only
and shall not be used to interpret this Agreement.
24. EFFECTIVE DATE: This Agreement shall be effective as of the date
written on the first page hereof.
25. ARBITRATION: Any claim or controversy between Employee, on one hand,
and CTS and/or its officers, directors, or other employees, on the other
hand, arising out of or relating to this Agreement, Employee's employment
with CTS, the termination of Employee's employment with CTS or any other
dealings between Employee and CTS, shall be settled by arbitration before the
American Arbitration Association ("AAA") in accordance with the AAA's
commercial arbitration rules in effect at the time such arbitration is
commenced. The award in any arbitration proceeding between Employee and CTS
shall be binding and final, and may be entered in any court of competent
jurisdiction specified in Paragraph 19 of this Agreement.
5
BJ EDS
------- -------
Initial Initial
IT IS SO AGREED:
THIS IS A BINDING LEGAL AGREEMENT WHICH SETS FORTH THE TERMS AND
CONDITIONS OF YOUR EMPLOYMENT, INCLUDING COMPENSATION MATTERS. READ
THIS AGREEMENT CAREFULLY BEFORE SIGNING IT.
THIS AGREEMENT ALSO CONTAINS AN ARBITRATION AGREEMENT, WHICH YOU
SHOULD STUDY CAREFULLY. ARBITRATION IS GENERALLY FINAL AND BINDING
ON THE PARTIES. BY AGREEING TO ARBITRATION, YOU ARE WAIVING YOUR
RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO A JURY
TRIAL. PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND
DIFFERENT FROM COURT PROCEEDINGS. ADDITIONALLY, THE ARBITRATORS'
AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
REASONING AND ANY PARTY'S RIGHT TO APPEAL OR SEEK MODIFICATION OF
RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------------------
(Signature)
Xxxxxxx X. Xxxxxxxxxx
--------------------------------------------------
(Print Name)
CTS:
Communication TeleSystems International
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Its:
---------------------------------------------
6
BJ EDS
------- -------
Initial Initial
ADDENDUM "A"
STOCK OPTION AGREEMENT
CTS grants Employee a non-qualified stock option to purchase a total of One
Thousand Four Hundred (1,400) shares of common stock of Communication
TeleSystems International ("the Company") (the "Shares"). The option to
acquire the Shares is granted upon the following terms and conditions:
1. The exercise price for each share of common stock is $2.00.
2. The following amount of options will vest as follows if the Employee
is employed by the Company on the following dates:
a. 1,400 shares on the date one (1) year after the Commencement Date
of your employment with CTS.
If, for any reason whatsoever, you are not employed by the Company on any
of the indicated dates, you shall not earn any options as of that date.
Additionally, nothing herein shall alter the at-will nature of your
employment with Company and that Company at all times shall have the right to
terminate your employment, with or without cause.
3. Subject to Paragraph 5 herein, any options which you receive in
accordance with the schedule set forth in Paragraph 2 above may be exercised
at any time on or before the earliest of the following dates ("Expiration
Date"): April 5, 2002; or sixty (60) days after written notice and demand for
exercise given by company, which may be given by Company only in the event of
a merger or acquisition. No partial exercise of such option may be for less
than 100 full shares. In no event shall the Company be required to transfer
fractional shares to the Employee.
4. The option granted under this Agreement shall be exercisable within
the time period stated herein, by the delivery of written notice of intent to
exercise to the Secretary of the Company, accompanied by payment in cash to
the Company of the full purchase price of the shares which the Employee
elects to purchase. The Company shall not be required to transfer or deliver
any certificate or certificates for shares of the Company's common shares
purchased upon exercise of the option granted under this Agreement until all
then applicable requirements of law have been met.
5. Any option and all rights granted by this Agreement, to the extent
those rights have not been exercised, or otherwise expired will terminate and
become null and void on April 5, 2002. If the Employee dies, the person or
persons to whom his vested rights under this Agreement shall pass, whether by
will or by the applicable laws of descent and distribution, may exercise all
options which had vested as of the date of Employee's death. Such exercise
must be made by the earliest of the following dates: (i) within one (1) year
after Employee's death; (ii) April 5, 2002; or (iii) sixty (60) days after
notice and demand for exercise given by company.
1
BJ EDS
------- -------
Initial Initial
Notwithstanding the above, Employee's rights to all options received by
Employee which have not been exercised, and all rights granted by this
Agreement shall in all events terminate and become null and void if Employee
is employed either as an employee or consultant by any company, joint
venture, partnership or individual which the Company determines is in
competition with the Company.
6. During the lifetime of the Employee the options and all rights granted
in this Agreement shall be exercisable only by the Employee, and except as
Paragraph 5 otherwise provides, the options and all rights granted under this
contract shall not be transferred, assigned, pledged, or hypothecated in any
way (whether by operation of law or otherwise), and shall not be subject to
execution, attachment, or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate, or otherwise dispose of such option or of such
rights contrary to the provisions in this Agreement, or upon the levy of any
attachment or similar process upon such option or such rights, such option
and such rights shall immediately become null and void.
7. Upon the sale of all or substantially all of the assets of the Company
or change in control or seventy percent (70%) of the outstanding voting
shares of the Company (excluding any such change in control resulting from
transfers in trust or to related or affiliated parties), all non-vested
options shall immediately vest.
8. In the event of any change in the common shares of the Company subject
to the option granted hereunder, through merger, consolidation,
reorganization, recapitalization, stock split, stock dividend, or other
change in the corporate structure, appropriate adjustment shall be made by
the Company, without consideration, in the number of shares subject to such
option and the price per share. Upon the dissolution or liquidation of the
Company, the option granted under this Agreement shall terminate and become
null and void. Employee shall have the right immediately prior to such
dissolution or liquidation to exercise all options granted hereunder
(including non-vested) to the full extent not before exercised.
9. Neither the Employee nor his executor, administration, heirs, or
legatees, shall be or have any rights or privileges of a shareholder of the
Company in respect of the shares transferable upon exercise of the option
granted under this Agreement, unless and until certificates representing such
shares shall have been endorsed, transferred, and delivered and the
transferee has caused his name to be entered as the shareholder of record on
the books of the Company.
10. THE SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION CERTIFICATE ARE
PRECLUDED FROM TRANSFERABILITY WITHOUT WRITTEN AUTHORIZATION FROM THE COMPANY.
11. The Company does not attempt to advise you any consequences arising
from your acquisition of the Shares through the exercise of the option. For
tax consequences to you, please consult with your tax advisor.
2
BJ EDS
------- -------
Initial Initial
