EXHIBIT 10.41
October 16, 2000
Xxxxxxx X. Xxxxxxx, Esq.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxx:
The purpose of this letter is to set forth the agreement (this
"Agreement") between you and Viatel, Inc. ("Parent") and its subsidiaries
(collectively hereinafter referred to as "Viatel") regarding your resignation
from Parent as a director, officer and employee and from each Viatel subsidiary
as a director and/or officer.
As we have discussed, Viatel desires to obtain your (i) release of all
claims against Viatel and (ii) 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 have agreed to the foregoing as consideration for Viatel's commitment to
provide to you the severance and other benefits set forth in paragraphs 2 and 4
of this Agreement. Based on these considerations, we have agreed as follows:
1. RESIGNATION. Effective as of October 31, 2000 (the "Effective
Date"), your resignation as a director, officer and employee of Parent and as a
director and/or officer of each Viatel subsidiary is accepted.
2. PAYMENTS AND BENEFITS. Parent will provide you with the following
payments and benefits:
(a) SEVERANCE PAYMENTS. On the Effective Date, Viatel shall pay you a
cash lump sum payment equal to $702,000. Such amount shall be wired to the
following account:
Chase Manhattan Bank
ABA #000-000-000
F/B/O Xxxxx Xxxxxx Inc.
A/C # 066-198038
F/F/C Xxxxxxx Xxxxxxx
A/C # 401-32045-18-940
(b) SALARY. On the Effective Date, Viatel shall pay you a cash lump sum
payment equal to the amount, if any, of accrued but unpaid base salary and
vacation. These amounts shall also be wired to the account set forth above.
(c) BENEFIT PLAN PARTICIPATION. Viatel shall continue to maintain any
health, disability, accidental death and disability, business travel and life
insurance coverage to which you were entitled immediately prior to the date
hereof, and Viatel will continue to pay the employer portion of the applicable
premium, until December 31, 2000, 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, other than the Viatel
Employee Stock Purchase Plan through which you shall be entitled to participate
through the end of the first participation.
(d) 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.
(e) COMPUTER. You shall be entitled to take your computer and U.S.
cellular phone. All phone bills following the Effective Date shall be payable by
you.
(f) 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 date hereof.
3. CONSULTING.
(a) CONSULTING SERVICES. You shall perform such consulting services as
may be reasonably requested in writing by Viatel to assist in transitioning your
current duties and responsibilities. Such services shall not exceed eight (8)
hours per week during the one-year period commencing on the Effective Date and
ending October 31, 2001 (the "Consulting Period"). Such services shall be
rendered during normal business hours, Monday through Friday, national and New
York State holidays excepted. These consulting services shall be performed in
the executive offices of Viatel located in New York City or such other place as
shall be mutually agreed. Notwithstanding the foregoing, you also agree to
perform such services in Europe, provided that such services are rendered no
more frequently than once per calendar quarter and for no more than three
business days per trip. Viatel will assist you with regard to planning your
travel arrangements and will pay for your business expenses associated with any
such business trip (which shall include business-class airfare). Viatel will
reimburse you for all unpaid business expenses incurred or paid by you in
connection with the performance of your consulting services, upon presentation
of appropriate documentation in accordance with Viatel's customary procedures
and policies applicable to its executives.
(b) AUTHORITY. You will have no authority to bind, make any commitment
on behalf of, or otherwise act on behalf of Viatel, in any manner whatsoever on
or after the Effective Date. You agree not to take any action, which would cause
any third party to assume that you have any such authority.
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4. OPTIONS AND RESTRICTED STOCK.
(a) You currently hold the below options (the "Options") to purchase a
total of 307,343 shares of Viatel common stock, $.01 par value per share (the
"Common Stock"), and 65,984 shares of restricted Common Stock (the "Restricted
Stock").
Options Exercise Price
1 $5.85
40,200 $9.00
26,000 $5.00
30,000 $5.50
4,123 $43.00
42,500 $10.25
38,519 $22.875
126,000 $49.313
(a) VESTING PROVISIONS. Viatel and you hereby agree that the Options
and the Restricted Stock set forth above that are not otherwise vested on the
Effective Date shall immediately vest and become exercisable on such date.
(b) EXERCISE PERIOD. The exercise period for the Options shall be
extended to the end of the Consulting Period. If you fail to exercise any of the
Options by the end of the Consulting Period, all unexercised Options shall be
automatically forfeited.
(c) REPRESENTATIONS AND WARRANTIES. (i) All shares of Common Stock
subject to the Options and all shares of Restricted Stock vested hereunder are
validly registered on a Form S-8 (registration statement) previously filed with
the Securities and Exchange Commission, (ii) on or after the date hereof, you
may sell, without restriction, any shares of Common Stock acquired upon exercise
of Options or by the vesting of shares of Restricted Stock, except with respect
to the volume trading limitations under Rule 144 to the extent required therein,
and (iii) you will not be an "insider" under Section 16(a) of the Securities
Exchange Act of 1934 (the "Exchange Act") and, accordingly, you will not be
subject to the restrictions under Sections 16(a) and (b) of the Exchange Act
with regard to activities or transactions after the Effective Date.
5. YOUR RELEASE.
(a) In consideration of the payments and benefits provided to you under
this Agreement, you 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 you 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
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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).
Notwithstanding the foregoing, the foregoing release shall not apply to
any payment, compensations, benefits or other rights to which you are entitled
under this Agreement.
(b) It is also agreed that this Agreement shall not be admissible in
any further proceedings between us except in a proceeding relating to a breach
of the provisions of this Agreement.
(c) 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 5(c) only in exchange for consideration in
addition to anything of value to which you are already entitled.
(d) You agree and understand that you shall not construe or treat any
aspect of this Agreement as any admission of liability of any Viatel Persons.
6. 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.
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7. 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.
Notwithstanding the foregoing, if such services are outside the scope of the
consulting arrangement provided above, you will be entitled to: (i) reasonable
notice from Viatel of Viatel's request hereunder; (ii) full reimbursement by
Viatel of your documented costs and expenses incurred in connection with your
cooperation hereunder (including, without limitation, your reasonable attorneys'
fees and expenses); (iii) payment by Viatel for your actual time spent
cooperating with Viatel, as described herein, at any hourly rate of $350.00 per
hour; and (iv) be indemnified and held harmless by Viatel for your actions taken
in accordance with this paragraph.
8. CONFIDENTIALITY. You acknowledge that you have been provided access
to confidential 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); and (d)
information generally known to the public or in the industries related to
Viatel's business (other than through a breach of this Agreement). Nothing
herein shall prevent you from using your general skills, general industry
knowledge and experience.
9. NON-COMPETE. You acknowledge that Viatel has invested substantial
time, money and resources in the development and retention of its Confidential
Information and further acknowledge that during the course of your employment
with Viatel you have had access to Confidential Information. You acknowledge and
agree that any and all "goodwill" associated with any customer, account or
business partner of Viatel existing as of the Effective Date belongs exclusively
to Viatel, including, but not limited to, any goodwill created as a result of
direct or indirect contacts or relationships between you and any such customers,
accounts or business partners. In recognition of this, you covenant and agree
that, except as otherwise set forth herein, for a period of eighteen (18) months
after the Effective Date, within Western Europe (or for such lesser area or such
lesser period as may be determined by a court of competent jurisdiction to be a
reasonable limitation on the competitive activity of any executive), you
(whether as an employee, agent, servant, owner, partner, consultant, independent
contractor, representative, stockholder or in any other capacity whatsoever) may
not, without the prior written consent of the Board of Directors of Viatel:
(a) participate in any business that develops or offers products or
services competitive in any way to the actual business of Viatel of developing,
operating or expanding a facilities-based telecommunications voice or data
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network within any country in any European Union member state, Switzerland or
any country (excluding the Americas) in which Viatel currently has a switch or
point of presence for either origination or termination of voice or data
transmissions or in which Viatel is so engaged in business or proposes to be so
engaged in business in accordance with its strategic business plan current at
the Effective Date; and
(b) directly or indirectly, solicit or attempt to solicit any customer
of Viatel to cease doing business with Viatel or reduce its relationship with
Viatel.
10. NON-SOLICITATION. For a period of eighteen (18) 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.
11. NON-DISPARAGEMENT. You and Viatel will not at any time, and Viatel
shall use its best efforts to ensure that Viatel Persons 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 adverse publicity) of the other party. In no
event shall any public statements be made about Viatel or you without the prior
written consent of the other party. You and Viatel also each agree that you will
not assist in any litigation or investigation against the other party except as
required by law.
12. NON-DISCLOSURE. You 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 the other party, 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, or in any proceeding to enforce the terms
of this Agreement. The parties hereto shall mutually agree in writing on the
terms of any statement or communication about the circumstances surrounding your
termination including, without limitation, the terms of any press release or
memo to any officer or employee of Viatel.
13. NO WAIVER. This Agreement constitutes the entire agreement and
understanding between you and Viatel and supersedes any prior agreement or
understanding, oral or written, between the parties, including, but not limited
to your existing employment agreement with Parent (except as specifically
referred to herein). None of the provisions of this Agreement can be waived or
modified except in writing signed by both 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.
14. 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
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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.
15. REVOCATION. You acknowledge and agree that by signing this
Agreement, you understand that you voluntarily waive the right to revoke this
Agreement during the seven (7) day period following the execution of this
Agreement.
16. MISCELLANEOUS. If Viatel fails to pay any amounts provided
hereunder or either party otherwise breaches any provision of this Agreement,
either in whole or in part, then the non-breaching party shall be entitled to
recover from the other party, in addition to the 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.
17. INDEMNIFICATION; D&O INSURANCE. 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 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. Viatel will continue
to maintain Directors' & Officers' Liability Insurance (the "D&O Insurance") for
you until the sixth anniversary of the Effective Date in an amount no less than
the same amount currently provided to Viatel's directors and officers.
18. 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, YOU WILL HAVE
WAIVED ANY RIGHT YOU MAY HAVE TO BRING A LAWSUIT OR 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.
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19. BINDING EFFECT. We both understand that this Agreement is not
binding upon either of us until we each accept it, which acceptance is to be
evidenced by Viatel's execution on the signature page and your countersignature
where indicated.
20. 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 you: at
the address set forth above, and to Viatel at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. A copy of any notice to you shall also be sent to Xxxxx X.
Xxxxxxxxx, Esq., Salans Xxxxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Your signature below signifies your voluntary acceptance of the terms
hereof. Please execute below and return one copy of this Agreement.
Sincerely,
VIATEL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Accepted and Agreed:
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxx
