Exhibit 10.43
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April 1,
2002, is by and between IDT Corporation, a Delaware corporation (the "Company"),
and Xxxxxx X. Xxxxx (the "Executive").
WHEREAS, in recognition of the Executive's experience and abilities,
the Company desires to assure itself of the continued employment of the
Executive in accordance with the terms and conditions provided herein;
WHEREAS, the Executive wishes to continue to perform services for the
Company in accordance with the terms and conditions provided herein; and
NOW, THEREFORE, in consideration of the promises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to be employed by and
perform services for the Company, on the terms and conditions set forth herein.
2. Term. This Agreement is for the five (5) year period (the "Term")
commencing on April 1, 2002, and terminating on the fifth anniversary of such
date, or upon the Executive's earlier death or other termination of employment
pursuant to Section 7 hereof; provided, however, that commencing on March 31,
2007 and each anniversary thereafter, the term shall automatically be extended
for one additional year beyond its otherwise scheduled expiration unless, not
later than ninety (90) days prior to any such anniversary, either party hereto
shall have notified the other party in writing that such extension shall not
take effect.
3. Position. During the Term, the Executive shall serve as the Chairman
of the Board of Directors of the Company.
4. Duties and Reporting Relationship. During the Term, the Executive
shall devote 100% of his normal business time and, on a full time basis, use his
skills and render services to the best of his abilities on behalf of the
Company. The Executive shall report directly to the Board of Directors of the
Company.
5. Place of Performance. The Executive shall perform his duties and
conduct his business at the offices of the Company, located in Newark, New
Jersey, except for required travel on the Company's business.
6. Compensation and Related Matters.
(a) Annual Base Salary. The Company shall pay to the Executive an
annual base salary (the "Base Salary") at a rate not less than Two Hundred Fifty
Thousand Dollars ($250,000.00), less applicable taxes, such salary to be paid in
conformity with the Company's payroll policies relating to its senior executive
officers. During the Term, the Executive's Base Salary shall be increased, if
necessary, so that the Base Salary is not less than the highest paid employee(s)
of the Company or any of the Company's controlled entities.
(b) Employee Benefit Plans. During the Term, the Executive shall be
entitled to participate in those incentive plans, programs, and arrangements
which are available to other senior executive officers of the Company (the
"Benefits Plans"). The Executive shall be provided benefits under the Benefit
Plans substantially equivalent, in the aggregate, to the benefits provided to
other senior executive officers of the Company and on substantially similar
terms and conditions.
(c) Pension and Welfare Benefits. During the Term, the Executive shall
be eligible to participate in the pension and retirement plans (the "Pension
Plans") provided to other senior executive officers of the Company, and
participate fully in all health benefits, insurance programs and other similar
executive welfare benefit arrangements available to other senior executive
officers of the Company and shall be provided benefits under such plans and
arrangements substantially equivalent, in the aggregate, to the benefits
provided to other senior executive officers of the Company and on substantially
similar terms and conditions. Notwithstanding the foregoing, during the Term,
the Company shall provide the Executive with life and disability insurance at a
benefit level no less favorable to the Executive than the benefit level provided
to him as of the date of this Agreement.
(d) Fringe Benefits and Perquisites. During the Term, the Company shall
provide to the Executive all of the fringe benefits and perquisites that are
provided to other senior executive officers of the Company, and the Executive
shall be entitled to receive any other fringe benefits or perquisites that
become available to other senior executive officers of the Company subsequent to
the date hereof. The benefits described herein include, but are not limited to,
an automobile leased for the Executive by the Company, the make and model of
which is consistent with that being used by the Executive on the execution date
of this Agreement.
(e) Business Expense. The Executive will be reimbursed for all ordinary
and necessary business expenses incurred by him in connection with his
employment (including without limitation, expenses for travel and entertainment
incurred in conducting or promoting business for the Company) upon submission by
the Executive of receipts and other documentation in accordance with the
Company's normal reimbursement procedures.
7. Termination. The Executive's employment hereunder may be terminated
without breach of the Agreement only under the following circumstances:
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(a) Death.
(b) Cause. The Company may terminate the Executive's employment
hereunder for "Cause." For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder (i) upon the
Executive's conviction for the commission of an act or acts constituting a
felony under the laws of the United States or any state thereof, or (ii) upon
the Executive's willful and continued failure to substantially perform his
duties hereunder (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness), after written notice has been
delivered to the Executive by the Company, which notice specifically identifies
the manner in which the Executive has not substantially performed his duties,
and the Executive's failure to substantially perform his duties is not cured
within ten (10) business days after notice of such failure has been given to the
Executive. For purposes of this Section 7 (b), no act or failure to act on the
Executive's part shall be deemed "willful" unless done or omitted to be done, by
the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
(c) Termination by the Executive. The Executive may terminate his
employment hereunder for "Good Reason." "Good Reason" shall mean the occurrence
(without the Executive's express written consent) of any one of the following
acts by the Company, or failure by the Company to act:
(i) a material breach of the Agreement by the Company;
(ii) the assignment to the Executive of any duties inconsistent
with the Executive's status as a senior executive officer of the
Company or a substantial adverse alteration in the nature or status of
the Executive's responsibilities; or
(iii) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying
the requirement of paragraph (d) below; for purposes of this Agreement,
no such purported termination shall be effective.
(iv) a reduction in Executive's annual Base Salary;
(v) a significant reduction in Executive's positions, duties,
responsibilities or reporting lines from those described in Section 4
hereof;
(vi) relocation of Executive's principal place of employment
outside of the Newark, New Jersey area; or
(vii) a "Change in Control" of the Company, as defined above.
The Executive's right to terminate the Executive's employment for Good Reason
shall not be affected by the Executive's incapacity due to physical or mental
illness. The Executive's continued employment shall not constitute consent to,
or a waiver of rights with respect to any act or failure to act constituting
Good Reason hereunder. Notwithstanding the foregoing, a termination shall not be
treated as a Termination for Good Reason if the Executive shall have consented
in writing to the occurrence of the event giving rise to the claim of
Termination for Good Reason.
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(d) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than termination under
Section 7(a) hereof) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 12 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claims to
provide a basis for termination of the Executive's employment under the
provision so indicated. Further, a Notice of Termination for Cause is required
to include a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board at a meeting of the
Board (after reasonable notice to the Executive and an opportunity for the
Executive, together with the Executive's counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the Executive was guilty
of conduct set forth in the definition of Cause herein, and specifying the
particulars thereof.
(e) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death, or
(ii) if the Executive's employment is terminated pursuant to paragraph (c) or
(d) above, the date specified in the Notice of Termination; provided, however,
that if within thirty (30) days after any Notice of Termination is given the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined. If within fifteen (15) days
after any Notice of Termination is given, or if later, prior to the Date of
Termination (as determined without regard to the Section 7(e)), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal, therefrom has expired and no appeal has been perfected); provided
further that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
(f) Compensation During Dispute. If a purported termination occurs
during the term of this Agreement, and such termination is disputed in
accordance with Section 7(e) hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, Base Salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given, until the dispute is finally resolved. Amounts paid under this
Section 7(f) are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement.
8. Compensation Upon Termination or During Disability.
(a) Death. In the event that Executive's employment is terminated
pursuant to Section 7(a) hereof, then as soon as practicable thereafter, the
Company shall pay the Executive's Beneficiary (as defined in Section 11(b)
hereof), as the case may be, (i) all unpaid amounts, if any, to which the
Executive was entitled as of the Date of Termination under Section 6(a) hereof
and (ii) all unpaid amounts to which the Executive was then entitled under the
Benefit Plans, the Pension Plans and any other unpaid employee benefits,
perquisites or other reimbursements (the amounts set forth in clauses (i) and
(ii) above being hereinafter referred to as the "Accrued Obligation"). In
addition, the Company shall pay Executive's estate a lump sum payment equal to
12 months of Executive's Base Salary (at the rate in effect on the date of his
death).
(b) Termination for Cause; Voluntary Termination Without Good Reason.
If the Executive's employment is terminated by the Company for Cause or by the
Executive other than for Good Reason, then the Company shall pay all Accrued
Obligations to the Executive and the Company shall have no further obligations
to the Executive under this Agreement.
(c) Termination Without Cause; Termination for Good Reason. If the
Company shall terminate the Executive's employment, other than for Cause, or the
Executive shall terminate his employment for Good Reason, then;
(i) the Company shall pay to the Executive, within ten (10) days
after the Date of Termination, the Accrued Obligations; and
(ii) the Company shall pay the Executive a Severance Benefit as
defined hereunder.
Severance Benefit means the sum of Executive's minimum
Base Salary for the remainder of the Term, but in no event
less than twelve (12) months.
9. Non-Disclosure. The parties hereto agree, recognize and acknowledge
that during the Term the Executive shall obtain knowledge of confidential
information regarding the business and affairs of the Company. It is therefore
agreed that the Executive will respect and protect the confidentiality of all
confidential information pertaining to the Company, and will not (i) without the
prior written consent of the Company, (ii) unless required in the course of the
Executive's employment hereunder, or (iii) unless required by applicable law,
rules, regulations or court, government or regulatory authority order or decree,
disclose in any fashion such confidential information to any person (other than
a person who is a director of, or who is employed by, the Company or any
subsidiary or who is engaged to render services to the Company or any
subsidiary) at any time during the Term.
10. Covenant Not to Compete.
(a) Executive hereby agrees that for a period of one (1) year following
the termination of this Agreement (other than a termination of the Executive's
employment (i) by the Executive for Good Reason or (ii) by the Company other
than for Cause)(the "Restricted Period") the Executive shall not, directly or
indirectly, whether acting individually or through any person, firm,
corporation, business or any other entity:
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(i) engage in, or have any interest in any person, firm,
corporation, business or other entity (as an officer,
director, employee, agent, stockholder, or other security
holder, creditor, consultant or otherwise) that engages in any
business activity where a substantial aspect of the business
of the Company is conducted, or planned to be conducted, at
any time during the Restricted Period, which business activity
is the same as, similar to or competitive with the Company as
the same may be conducted from time to time;
(ii) interfere with any contractual relationship that may exist
from time to time of the business of the Company, including,
but not limited to, any contractual relationship with any
director, officer, employee, or sales agent, or supplier of
the Company; or
(iii) solicit, induce or influence, or seek to induce or influence,
any person who currently is, or from time to time may be,
engaged or employed by the Company (as an officer, director,
employee, agent, or independent contractor) to terminate his
or her employment or engagement by the Company.
(b) Notwithstanding anything to the contrary contained herein,
Executive, directly or indirectly, may own publicly traded stock constituting
not more than five percent (5%) of the outstanding shares of such class of stock
of any corporation if, and as long as, Executive is not an officer, director,
employee or agent of, or consultant or advisor to, or has any other relationship
or agreement with such corporation.
(c) Executive acknowledges that the non-competition provisions
contained in this Agreement are reasonable and necessary, in view of the nature
of the Company and his knowledge thereof, in order to protect the legitimate
interests of the Company.
11. Successors; Binding Agreement.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to the Executive, to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall mean
the Company as hereinafter defined and any successor to its business and/or
assets as aforesaid that executes and delivers the agreement provided for in
this Section 11 or that otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
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(b) This Agreement and all rights of the Executive hereunder shall
insure to the benefit of and be enforced by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributee,
devisee, and legatees. If the Executive should die while any amounts should
still be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate (any of which is referred
to herein as a "Beneficiary").
12. Notice. For purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage paid, addressed as follows:
If to the Company:
IDT Corporation
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
If to the Executive:
Xxxxxx X. Xxxxx
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and such other officer of the Company as may
be specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto, or compliance with any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the state of New Jersey without regard to its conflicts of law
principles.
14. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability if
any such other provision of this Agreement, which shall remain in full force and
effect.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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16. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes any and all other prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto, and in
prior agreements of the parties hereto in respect to the subject matter
contained herein is hereby terminated and canceled.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
IDT CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
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