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EXHIBIT 10.14
AGREEMENT
AGREEMENT dated as of December 8, 1998, between Xxxxxxxx Xxxxxxxxx
("Xxxxxxxxx"), and Long Distance International Inc., a Florida corporation (the
"Corporation").
Preliminary Statements
A. The Corporation and Xxxxxxxxx are parties to an Employment
Agreement dated as of July 1, 1995 (the "Employment Agreement") pursuant to
which the Corporation agreed to employ Xxxxxxxxx, and Xxxxxxxxx agreed to serve,
as the Corporation's Co-Chief Executive Officer. Xxxxxxxxx also is a director of
the Corporation.
B. The Corporation and Xxxxxxxxx desire to redefine Xxxxxxxxx'x
duties and to provide for an orderly transition to new senior executive
management and, upon the appointment of a successor chief executive officer, the
Corporation desires to retain Xxxxxxxxx'x services, and Xxxxxxxxx desire to
continue to provide services, as a director of and consultant to the
Corporation.
C. The parties desire to terminate the Employment Agreement as of
the date hereof and enter into a new agreement in order to reflect the
foregoing.
In consideration of the foregoing and the terms, conditions and mutual
covenants contained in this Agreement, the parties hereby agree to amend and
modify the terms of the Employment Agreement and to restate the Employment
Agreement in its entirety as follows:
Section 1. Engagement
(a) The Corporation hereby agrees to continue to employ
Xxxxxxxxx, and Xxxxxxxxx hereby agrees to continue to be employed, as CEO of the
Corporation during the Term (as defined below) until such earlier date during
the Term as a successor chief executive officer, including an acting chief
executive officer, of the Corporation shall be appointed by the Board of
Directors of the Corporation (the "Appointment Date").
(b) On the Appointment Date, without further action by
either the Corporation or Xxxxxxxxx, Xxxxxxxxx shall cease to serve as CEO of
the Corporation and Xxxxxxxxx shall be deemed to have relinquished voluntarily
his title and position as CEO of the Corporation. From and after the Appointment
Date until the expiration of the Term, the Corporation hereby agrees to retain,
and Xxxxxxxxx hereby agrees to be retained, as a consultant to the Corporation.
As a consultant to the Corporation, Xxxxxxxxx, in such capacity, shall be deemed
to provide services to the
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Corporation as an independent contractor.
(c) During the Term, Xxxxxxxxx shall serve as a director
on the Board of Directors and shall have the non-executive title and position as
Chairman of the Board of Directors. During the Term, Xxxxxxxxx also shall serve
as a member of the Executive and Investment Committees of the Board. Xxxxxxxxx
shall serve as a member of the Ad Hoc Executive Search Committee of the Board at
least until such time as a successor chief executive officer of the Corporation
is appointed by the Board. Xxxxxxxxx shall not be entitled to additional
compensation (i.e., directors' fees) for serving as a director.
(d) During the Term, Xxxxxxxxx will provide his services
to the Corporation at the Corporation's executive offices in Fort Lauderdale,
Florida, but will be available to travel as the needs of his duties and
responsibilities reasonably require.
Section 2. Term
The term shall begin as of the date hereof and shall terminate on
December 31, 2001 (the "Term"). Notwithstanding the foregoing, the provision of
Xxxxxxxxx'x services hereunder are subject to termination prior to expiration of
the Term in accordance with Section 7.
Section 3. Duties
(a) During the Term and until the Appointment date shall
have occurred, Xxxxxxxxx will generally perform duties and have responsibilities
commensurate with his position and as prescribed by the Board of Directors of
the Corporation, and will devote substantially all of his business time and
attention thereto.
(b) If the Appointment Date shall have occurred, then
from and after such date, (i) Xxxxxxxxx shall be deemed to have relinquished
voluntarily all duties and responsibilities for the day-to-day operations and
management of the Corporation, and (ii) Xxxxxxxxx'x duties and responsibilities
shall consist of assisting the Corporation with strategic planning, business
development and capital formation, (iii) Xxxxxxxxx shall devote as much of his
business time and attention as is reasonably necessary to fulfill such duties
and responsibilities, and, (iv) in the performance of his duties hereunder,
Xxxxxxxxx shall coordinate with, and keep advised, the chief executive officer
of the Corporation. Upon the appointment of a successor chief executive officer
(including an acting chief executive officer), Xxxxxxxxx agrees to cooperate in
providing for an orderly transition in the senior executive management of the
Corporation.
(c) During the Term, Xxxxxxxxx shall report to, and be
under the direction of, the Board.
Section 4. Compensation
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4.01 In consideration of the services to be rendered by Xxxxxxxxx
under this Agreement, the Corporation shall pay, and Xxxxxxxxx shall be entitled
to receive from the Corporation, the compensation provided for in this Section
4, subject to the terms of this Agreement and the withholding and other required
deductions provided for in this Section 4. The Base Compensation (as defined
herein) and other compensation and benefits provided for herein may be increased
by the Board.
4.02 The Corporation shall pay Xxxxxxxxx a base amount of annual
compensation during the Term of $160,000 (the "Base Compensation"), payable in
equal weekly installments.
If any amount of the Base Compensation is not paid by the Corporation as
provided in this Section, or is not requested or demanded by Xxxxxxxxx, payment
of such amount of the Base Compensation shall not be deemed to be waived by
Xxxxxxxxx but shall accrue and remain due and payable by the Corporation
promptly upon demand by Xxxxxxxxx. The obligation of the Corporation to pay such
amount to Xxxxxxxxx shall remain in effect and binding on the Corporation.
Subject to Section 7, the obligation of the Corporation to pay Xxxxxxxxx any
Base Compensation due on account of any period during the Term shall survive any
termination of this Agreement and shall remain in effect after such termination.
4.03 The Board of Directors of the Corporation shall review
Xxxxxxxxx'x performance from time to time (and in no event less than once
annually), and, in its sole discretion, may award Xxxxxxxxx a bonus based on
such performance review.
4.04 The Corporation shall have the right to deduct or withhold
from all compensation and benefits payable to Xxxxxxxxx prior to the Appointment
Date under this Agreement social security taxes, other federal, state and local
taxes and all other charges and amounts that shall be required by law to be
deducted or withheld.
Section 5. Benefits
5.01 The Corporation will carry and maintain in full force and
effect during the Term, at its own expense and with financially sound and
reputable insurance companies, directors and officers liability insurance in
such amounts, with such deductibles and covering such risks as is customarily
carried by companies engaged in the same or similar businesses and with the same
or similar risk profile.
5.02 Xxxxxxxxx shall be entitled to a private office at the
executive offices of the Corporation, including one of the two largest offices
in the executive suite in the new premises to which the Corporation will be
relocating, and shall further be entitled to receive secretarial and other
support services normally offered by the Corporation to its senior executives.
It is understood that for so long as Xxxxx Xxxxxxxx is providing services to the
Corporation, Xxxxx Xxxxxxxx and Xxxxxxxxx shall share a secretary.
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5.03 Xxxxxxxxx shall be entitled to participate in all retirement,
medical, dental or insurance benefits that the Corporation may make available to
its executive or administrative employees, on terms no less favorable than are
provided to such employees, including all stock option, incentive, pension,
retirement and benefits plans and arrangements and all medical, disability,
hospital, health and life insurance plans and arrangements, and to the extent
such benefits are not available to Xxxxxxxxx because he will not be an employee
after the Appointment Date, the Corporation shall cause the equivalent benefits
to be made available to Xxxxxxxxx. Xxxxxxxxx and his wife and children shall be
entitled to participate in any group health insurance plans adopted or
maintained by the Corporation, on terms no less favorable than are provided to
the Corporation's executive and administrative employees and their immediate
families, as such plans may be approved, modified and in effect from time to
time. If, after the Appointment Date, Xxxxxxxxx and his wife and children are
not entitled to participate in any plans because Xxxxxxxxx is not an employee,
the Corporation shall cause benefits substantially equivalent to those provided
under any such plans to be made available to Xxxxxxxxx, his wife and children on
substantially equivalent terms to the terms under any such plans.
5.04 If Xxxxxxxxx'x services are terminated for any reason, either
by the Corporation or Xxxxxxxxx, Xxxxxxxxx shall have the right to purchase from
the Corporation any insurance policies on his life owned by the Corporation for
a price equal to the cash surrender value of the policies at the date of
termination, plus prepaid premiums. Such right shall be exercised by Xxxxxxxxx
by written notice to the Corporation given not later than sixty (60) days after
such termination. The purchase price for such policies provided for in this
Section 5.04 shall be paid by Xxxxxxxxx to the Corporation upon the giving of
such notice.
5.05 Xxxxxxxxx shall be entitled to take paid vacation and personal
days on terms no less favorable than are provided to the Corporation's
executives, but in no event less than twenty (20) business days of vacation and
five (5) personal days annually during the Term with full payment of his Base
Compensation and other compensation and benefits by the Corporation under this
Agreement during such days. Xxxxxxxxx shall receive as paid days off all
national holidays that the Corporation recognizes and observes.
Section 6. Expenses
The Corporation shall reimburse Xxxxxxxxx for all reasonable business
expenses incurred by Xxxxxxxxx during the Term in the furtherance of the
performance of his duties pursuant to Section 3 of this Agreement, including
expenses of travel, meals, equipment, supplies and lodging.
Section 7. Termination
7.01 By the Corporation for Cause. The Corporation shall have the right
to terminate the services of Xxxxxxxxx hereunder for Cause (as defined in this
Section 7.01), upon sixty (60) days' prior written notice to Xxxxxxxxx. "Cause"
under this
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Agreement shall mean any of the following:
(i) any material breach of this Agreement by Xxxxxxxxx or any
material and intentional illegal conduct by Xxxxxxxxx, unless
such breach or conduct is cured within such sixty (60) day
period;
(ii) any intentional and material act of fraud, embezzlement,
larceny or conversion by Xxxxxxxxx affecting the Corporation;
or
(iii) absence of Xxxxxxxxx from the performance of his duties
hereunder for more than ninety (90) consecutive business days,
other than absence caused by vacation or Disability (defined
in Section 7.02 below) of Xxxxxxxxx and other than absence
that occurs due to causes beyond the control of Xxxxxxxxx that
are deemed by the Board, in its reasonable discretion, to be
reasonable causes for such absence.
7.02 By Either Party upon Xxxxxxxxx'x Disability. Either party
shall have the right to terminate the services of Xxxxxxxxx hereunder in the
event of Xxxxxxxxx'x Disability (as defined in this Section 7.02), upon ninety
(90) days' prior written notice to the other party. "Disability" hereunder shall
mean any physical or mental incapacity, injury, disability or illness of
Xxxxxxxxx that shall give rise to any substantial impairment of his effective
performance of his obligations or duties under this Agreement for any continuous
period of 180 days or that shall give rise to any absence of the Employee from
the performance of his duties or obligations hereunder for any continuous period
of 180 days (any such physical or mental incapacity, injury, disability or
illness, a "Disability").
7.03 Death. In the event that Xxxxxxxxx shall die during the Term,
the services of Xxxxxxxxx hereunder shall be deemed to have terminated as of the
date of death without any requirement for the giving of written notice by either
party.
7.04 By Xxxxxxxxx for Good Reason. Xxxxxxxxx shall have the right
to terminate his services hereunder for Good Reason (as defined in this Section
7.04), by giving the Corporation thirty (30) days' prior written notice of such
termination. "Good Reason" hereunder shall mean any material breach of this
Agreement by the Corporation unless such breach is cured within such thirty (30)
day period.
7.05 Upon a Change of Control. If any Change of Control (as defined
below) shall occur at any time during the Term, then Xxxxxxxxx'x services
hereunder shall terminate and the Corporation shall promptly pay Xxxxxxxxx an
amount equal to the compensation that would have been payable to Xxxxxxxxx
through the end of the Term pursuant to Sections 4.02 of this Agreement.
For purposes hereof, a "Change of Control" shall occur or be deemed to occur if
any of the following events occur:
(i) Any individual, entity or group (within the meaning of Section
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13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than a group including any of Xxxxx Xxxxxxxx, Xxxxxxxx
Xxxxxxxxx, Advent International Corp. or any of their respective affiliates (a
"Person") is or becomes the "beneficial owner" (as defined in Rule 13(d)(3)
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 50% or more of the combined voting power of the
Corporation's then outstanding voting securities entitled to vote generally in
the election of directors (the "Outstanding Corporation Voting Securities");
provided however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (A) any redemption by the
Corporation, (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any Person controlled by the
Corporation, or (C) any acquisition by any Person pursuant to a transaction
which complies with clauses (A), (B) and (C) of paragraph (ii) below;
(ii) The majority of the stockholders of the Corporation approve a
reorganization, merger or consolidation of the Corporation with any other Person
or the sale or other disposition of all or substantially all of the assets of
the Corporation (a "Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors of the Person resulting from such Business Combination
(including, without limitation, a Person which as a result of such transaction
owns the Corporation or all or substantially all of the Corporation's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership of the Outstanding Corporation Voting Securities
immediately prior to such Business Combination, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 50% or
more of, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination, and (C) at least a
majority of the members of the Board of Directors of the corporation resulting
from such Business Combination were members of the Board of Director at the time
of the execution of the initial agreement, or of the action of the board,
providing for such Business Combination.
7.06 In the event of any termination of Xxxxxxxxx'x services
hereunder by the Corporation with Cause under Section 7.01, the Corporation
shall pay Xxxxxxxxx all of his Base Compensation and other compensation, and
shall continue to provide to Xxxxxxxxx all benefits provided for in this
Agreement, through the end of the sixty-day notice period specified in Section
7.01, which compensation and benefits shall be paid or provided to Xxxxxxxxx at
the times specified in Section 4.
7.07 In the event of the termination of Xxxxxxxxx'x services
hereunder due to Xxxxxxxxx'x Disability pursuant to Section 7.02 or Xxxxxxxxx'x
death pursuant to
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Section 7.03, the Corporation shall pay to Xxxxxxxxx or to his heirs,
administrators or estate, as the case may be, twice the amount of the Base
Compensation that would have been payable to Xxxxxxxxx through the end of the
Term during which such termination occurs. Such payment shall not be deemed to
be liquidated damages in connection with any breach by the Corporation of this
Agreement and shall not affect or be deemed to release or waive any other rights
or remedies of Xxxxxxxxx in connection with any such breach. All compensation
required to be paid on any termination of services under this Section 7.07 shall
be paid by the Corporation to Xxxxxxxxx no later than the earlier of the end of
the notice period required in connection with such termination or sixty (60)
days after the death of Xxxxxxxxx.
7.08 In the event of any termination of Xxxxxxxxx'x services
hereunder by the Corporation without Cause or by Xxxxxxxxx for Good Reason, the
Corporation shall immediately pay Xxxxxxxxx an amount equal to the compensation
that would have been payable to Xxxxxxxxx through the end of the Term under
Sections 4.02 and 4.03 of this Agreement.
7.09 In the event of any termination of Xxxxxxxxx'x services
hereunder by Xxxxxxxxx for a reason other than Good Reason or Disability, the
Corporation shall pay Xxxxxxxxx the amount of his compensation and benefits
through the effective date of such termination within ten (10) days thereof.
7.10 The Corporation shall pay all legal fees and expenses incurred
by Xxxxxxxxx in connection with any litigation or proceeding relating to the
payment of any compensation or amounts referred to in this Section, provided
that Xxxxxxxxx prevails in part or all of such litigation or proceeding.
Section 8. Miscellaneous
8.01 This Agreement shall be governed by and interpreted and
enforced in accordance with the law of the State of Florida applicable to
contracts negotiated, entered into and to be performed in that State, without
regard to the choice or conflicts of law principles of such State. The parties
hereto consent to the jurisdiction of the federal and state courts located in
Broward County, Florida over the parties hereto and over any disputes, actions,
proceedings or claims relating to or arising in connection with this Agreement.
8.02 If any part of this Agreement is held to be unenforceable or
invalid under, or in conflict with, the applicable law of any jurisdiction, then
the unenforceable, invalid or conflicting part shall be narrowed or replaced, to
the extent possible, by a judicial construction in such jurisdiction that
effectuates the intent of the parties regarding this Agreement and the
unenforceable, invalid or conflicting part, and such part shall be deemed to be
amended by such construction. Notwithstanding the unenforceability, invalidity
or conflict with applicable law of any part of this Agreement, the remaining
parts shall be valid, enforceable and binding on the parties.
8.03 This Agreement shall be binding upon, enforceable by and shall
inure
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to the benefit of each of the parties and their respective permitted
successors. This Agreement and all rights and obligations hereunder are personal
to Xxxxxxxxx and shall not be assignable or delegable, and any purported
assignment or delegation in violation hereof shall be null and void. Any person,
firm or corporation succeeding to the business of the Corporation by merger,
consolidation, purchase of assets or otherwise, shall assume by contract or
operation of law the obligations of the Corporation hereunder; provided,
however, that the Corporation shall, notwithstanding such assumption or
assignment, remain liable and responsible for the fulfillment of the terms and
conditions of the Agreement on the part of the Corporation.
8.04 This Agreement may be amended only by a writing signed by both
parties hereto. This Agreement constitutes the entire agreement among parties
hereto relating to the subject matter of this Agreement. Neither any failure nor
any delay on the part of any party to this Agreement in exercising any right,
power or privilege hereunder shall operate as a waiver of any rights of any such
party, unless such waiver is explicitly expressed by a writing executed by such
party and delivered to the other parties, nor shall a single or partial exercise
of any right preclude any other or further exercise of any other right, power or
privilege accorded to any party to this Agreement.
8.05 (a) All notices permitted or required hereunder shall be in
writing and shall be delivered by hand, by recognized, national, overnight
courier or by deposit in the United States mail, postage prepaid, by registered
or certified mail, return receipt requested, addressed to the Corporation or
Xxxxxxxxx, as the case may be, at the address of such party set forth below:
(i) if to the Corporation to:
Long Distance International Inc.
000 Xxxxx Xxxxxxx Xxxxxx - Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Board of Directors
(ii) if to Xxxxxxxxx to:
Xxxxxxxx Xxxxxxxxx
0000 Xxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
(b) Notices given by mail shall be deemed effective on the
earlier of the date shown on the proof of receipt of such mail or, unless the
recipient proves that the notice was received later or not received, three (3)
days after the date of mailing thereof. Other notices shall be deemed given on
the date of receipt. Any party hereto may change the address specified above by
written notice to the other parties hereto.
8.06 The headings appearing in this Agreement are for convenience
in reference only and shall not affect the meaning or interpretation of this
Agreement.
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8.07 This Agreement may be executed in multiple counterpart copies,
each of which shall be considered an original and all of which shall be deemed
to be one and the same agreement.
8.08 The provisions of Sections 5.04, 6, 7, 8.01 and 8.09 of this
Agreement shall survive any termination of this Agreement and shall remain in
effect after any such termination.
8.09 (a) Xxxxxxxxx fully and unconditionally releases and
discharges all claims and causes of action which he or his heirs, personal
representatives, or assigns ever had, now have, or hereafter may have against
the Corporation, its subsidiaries and, when acting as such, their respective
officers, directors, employees, counsel, agents, and stockholders, in each case
past, present, or as they may exist at any time after this date, and each
person, if any, who controls, controlled, or will control any of them within the
meaning of Section 15 of the Securities Act of 1933, as amended, or Section
20(a) of the Securities Exchange Act of 1934, as amended, arising out of, based
upon, or in connection with the Employment Agreement and the employment of
Xxxxxxxxx thereunder, except for (i) any unpaid compensation and benefits
pursuant to Section 4 of the Employment Agreement, (ii) any employee benefits
pursuant to Section 5 of the Employment Agreement, (iii) any unreimbursed
business expenses pursuant to Section 6 of the Employment Agreement, and (iv)
all stock options granted to Xxxxxxxxx under the Long Distance International
Inc. 1994 Stock Option Plan and the Long Distance International Inc. 1997 Stock
Option Plan and the related Stock Option Agreements.
(b) The Corporation fully and unconditionally releases and
discharges all claims and causes of action which the Corporation or its
successors or assigns ever had, now have, or hereafter may have against
Xxxxxxxxx, his heirs, personal representatives, or assigns, and when acting as
such, their counsel and agents, in each case past, present, or as they may exist
at any time after this date, arising out of, based upon, or in connection with
the Employment Agreement and the employment of Xxxxxxxxx thereunder.
(c) Nothing in this Section 8.09 shall be construed as a
release, waiver or settlement of any rights, claims, causes of action, remedies,
duties, obligations, liabilities under any other agreements to which both the
Corporation and Xxxxxxxxx are a party, including, without limitation, the
Shareholders Agreement, dated as of July 22, 1994, the Shareholders Agreement
dated as of September, 1994, and the Preemptive Rights Agreement dated as of
July 18, 1997.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
LONG DISTANCE INTERNATIONAL INC.
By:
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Xxxx Xxxxx, by resolution of
the Board of Directors of
the Corporation
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Xxxxxxxx Xxxxxxxxx
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