EMPLOYMENT AGREEMENT
AGREEMENT made as of the ___ day of August, 1998, by and between Xxxx
Xxxxxxxx, an adult individual residing at 000 Xxxx 00xx Xxxxxx, Xxxxxxxxx 0X,
Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Executive"), and VDC
Corporation Ltd., a Bermuda corporation having a registered office at 00 Xxxxxx
Xxxxxx, Xxxxxxxx XX FX Bermuda (hereinafter referred to as the" Company"), and
Masatepe Communications U.S.A., L.L.C., a Delaware limited liability company
("LLC")
WITNESSETH
WHEREAS, on even date herewith, the Company completed the purchase of all
of the membership interests in LLC;
WHEREAS, the Company and LLC consider it essential and in the best
interests of the Company's stockholders to xxxxxx the continuous employment of
key management personnel and desires to retain the services of the Executive on
the terms and conditions hereinafter set forth; and
WHEREAS, Executive desires to render services to the Company on the terms
and conditions provided in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment Term, Duties and Acceptance
a. In recognition that the Company desires to continue the operation of
the historic business of LLC, the LLC hereby retains to serve as LLC's
President and Chief Executive Officer and Executive accepts such
position and agrees to render such services to LLC in such executive
capacities as are assigned to him by, and subject to the discretion
of, the Board of Directors of the Company.
b. The Executive hereby accepts the foregoing employment and agrees to
devote his full time, best efforts, energy and skill to such
employment.
c. The Executive shall not engage in any other business endeavor or
activity during the Employment Period.
d. The Executive hereby agrees that any and all business opportunities
which are similar to or in competition with the Business of the
Company (as such term is used and defined in Section 6(a) below)
and/or LLC and are available as of the date hereof or become available
to the Executive during the Employment Period shall automatically
become the sole property of the Company without any
obligation of the Company to compensate or otherwise pay the Executive
for such opportunities.
e. The term of the Executive's employment hereunder (the "Employment
Period") shall commence on the date hereof and shall end on the fifth
anniversary hereof, unless sooner terminated as provided herein,
provided, however, that the Employment Period shall be extended and
this Agreement shall be automatically renewed for successive one-year
periods unless: (i) this Agreement is terminated as otherwise provided
herein; or (ii) Executive provides written notice to the Company of
his desire not to extend the Employment Period at least sixty (60)
days prior to the expiration of the then lapsing term.
2. Compensation and Expense Reimbursement
a. As base compensation for the Executive duly rendering his services to
LLC pursuant to the terms of this Agreement, LLC agrees to pay and
Executive agrees to accept a base salary ("Base Salary") of One
Hundred Fifty Thousand Dollars ($150,000) per annum to be paid in
accordance with the general payroll practices of the Company as from
time to time in effect. The Base Salary will be subject to merit
increases annually as determined by the Board of Directors.
b. Any bonus or other compensation provided for herein shall at all times
be exclusive of Executive's interest in and to the options granted by
the Company to him as set forth in the Option to Purchase Common
Shares entered into by the Executive and the Company and dated of even
date herewith (the "Option Agreement"), as well as any stock option
plan(s) that may in the future be adopted by the Company for its and
its subsidiaries' management personnel.
LLC will pay or reimburse Executive for all reasonable and necessary
out-of-pocket expenses incurred by him in the performance of his duties under
this Agreement, including all of the Executive's travel, hotel, meal and other
incidental expenses during the Executive's travel on behalf of LLC. Executive
shall keep detailed and accurate records of expenses incurred in connection with
the performance of his duties hereunder and reimbursement therefor shall be in
accordance with policies and procedures to be established from time to time by
the Board. LLC will also provide an automobile allowance of $550.00 per month
but will not be responsible for any costs incident to the operation of such
automobile, including without limitation insurance, maintenance and other
operational costs
d. Bonus Compensation
i. The Company shall issue to the Executive as a bonus common
stock of the Corporation in the event LLC achieves the following
levels of economic performance:
2
Performance Bonus Grant
----------- -----------
EBITDA of at least $6,000,000 per annum for two
consecutive years within three years of Closing 50,000 shares
EBITDA of at least $9,000,000 per annum for two
consecutive years within four years of Closing an additional
25,000 shares
EBITDA of at least $12,000,000 per annum for two an additional
consecutive years within four years of Closing 25,000 shares
provided, however, that the maximum number of shares of the Company's
as to which options may be awarded pursuant to Section 2(d) shall not
exceed 100,000 shares.
ii. As used in this Xxxxxxx 0 (x), "XXXXXX" shall mean LLC's earnings
from recurring operations before interest, taxes, depreciation and
amortization and shall exclude extra ordinary items, financings,
proceeds from the issuance of equity and/or debt securities, proceeds
from the sale of assets and capital contributions from the Company.
iii. In order to be awarded the options set forth above, the Executive
must not have (i) been terminated for "cause" pursuant to Section 5
hereof, or (ii) Voluntarily Resigned from the Company and LLC prior to
the time the conditions precedent to the grant of such options are
satisfied. For example, and not by way of limitation, if the Executive
Voluntarily Resigns at the end of the third year of this Agreement (a
year during which the LLC's EBITDA is $10,000,000) and the LLC in the
next year achieves EBITDA of $11,000,000, the Executive would not be
eligible for the grant of 25,000 bonus options (or any other bonus
options for other bonuses payable hereunder but not yet achieved).
iv. For the purposes of this Agreement "Involuntarily Resignation" or
variants thereof shall mean if a person resigns as an employee of the
Company and the LLC, because of a change in any of the following (a)
the terms, conditions and or duties of his employment (b) the
compensation to be received by the person whether in the form of base
salary, bonuses and/or expense reimbursements, (c) the location from
which the person is to carry out or perform his employment duties; and
(d) any of the benefits to be received by the person under the terms
and conditions of his Employment Agreement. For the purposes of this
agreement, the term "Voluntary Resignation" or variants thereof shall
mean any resignation which occurs other than an Involuntary
Resignation.
3
e. Agreement with Xxxxxxx Xxxxxxx.
1. Executive shall use his best efforts to negotiate with Xx. Xxxxxxx
Xxxxxxx, who will serve as the LLC's Chief Operating Officer following
Closing, a mutually agreeable arrangement with Xxxxxxx respecting a
phantom ownership interest in the Company of between 2.5% and 5.0% of
the total membership interest in the LLC. The arrangement between Xx.
Xxxxxxx and Executive shall be solely payable to Xxxxxxx out of the
Phantom Membership Interest Payment to the Executive pursuant to
subsection 5(g).
2. Executive shall notify the Company and LLC of the terms of the
agreement with Xx. Xxxxxxx within ten (10) calendar days after such
agreement is reached. Executive agrees that, subject to the provisions
in the immediately following subsection, the portion of the Phantom
Membership Interest Payment payable to Xxxxxxx pursuant to his
agreement with Executive may be retained by the Company and paid to
Xxxxxxx at such time as the Xxxxxxxx Note becomes due and payable.
3. In the event Xx. Xxxxxxx is terminated for "cause" pursuant to his
employment agreement with the Company and the LLC or Voluntarily
Resigns his employment with the Company and the LLC before the third
anniversary of the date of this Agreement, no portion of the Phantom
Membership Interest Payment shall be paid to Xxxxxxx and the entire
Phantom Membership Interest Payment shall be paid to Executive.
3. Fringe Benefits
a. Executive shall be entitled, subject to the terms and conditions of
particular plans and programs, to all fringe benefits afforded to
other senior executives of the Company and its subsidiaries,
including, but not by way of limitation, the right to participate in
any pension, stock option, retirement, major medical, group health,
disability, accident and life insurance, and other employee benefit
programs made generally available, from time to time, by the Company.
b. During the term of this Agreement, the Company shall include Executive
and his family in family health insurance coverage provided for
executive level employees of the Company and its subsidiaries.
4. Vacations
Executive shall be entitled to compensated vacation in each fiscal year,
to be taken at times which do not unreasonably interfere with the
performance of Executive's duties hereunder and otherwise in accordance with the
Company's vacation policies in effect from time to time as applied to other
executives of the Company and its subsidiaries.
4
5. Termination
a. Termination by Company for "Cause". In addition to any other remedies
which the Company may have at law or in equity, the Board of Directors
may upon the affirmative vote of no less than a majority of its
members, terminate Executive's employment under this Agreement by
giving Executive written notice of such termination upon or at any
time following the occurrence of any of the following events, and each
such termination shall constitute a termination for "cause," provided,
however, that Executive has first been given written notice of the
facts or circumstances constituting the determination of "cause" and a
reasonable opportunity (in no event less than fifteen (15) days) to
cure, rectify or reverse such facts or circumstances and Executive
shall have failed to do so: (a) any act or failure to act (or series
or combination thereof) by Executive done with the intent to harm in
any material respect the interests of the Company or any affiliate
thereof taken as a whole; (b) the commission by Executive of a felony
for which he is convicted by a court of competent jurisdiction; (c)
the finding by a court of competent jurisdiction that Executive
perpetrated a dishonest act or common law fraud against the Company or
any affiliate thereof; or (d) a grossly negligent act or failure to
act (or series or combination thereof) by Executive detrimental to a
material extent to the interests of the LLC and/or the Company and any
affiliate or subsidiary taken as a whole; or (e) the continued refusal
to follow the directives of the Board or the Company's Chief Executive
Officer which are consistent with Executive's duties, responsibilities
and covenants hereunder unless the failure to follow such directives
were either: (i) based upon the advice of counsel; or (ii) based upon
the Executive's judgment in good faith that such directives would not
be in the best interests of the Company or its members; or (f) the
failure of the LLC to achieve the following levels of economic
performance of annualized EBITDA calculated on an annualized basis by
multiplying (i) the EBITDA for the three months immediately preceding
the date of calculation by (ii) 4, at the dates listed below:
Time Period Annualized EBITDA
----------- -----------------
12/31/98 break-even ($0)
6/30/99 $500,000
12/31/99 $1,000,000
6/30/2000 $1,500,000
12/31/2000 and thereafter $2,000,000
Upon the early termination of Executive's employment under this Agreement
by the Company for "cause," the Company shall pay to Executive: (i) an amount
equal to Executive's Base Salary accrued through the effective date of
termination at the rate in effect at the time of
5
termination, payable at the time such payment is due; and (ii) any expense
reimbursement amounts accrued to the effective date of termination, payable on
the effective date of termination. Upon payment of such amounts, the Company
shall have no further obligation to Executive under this Agreement.
b. Incapacity of Executive. Subject to applicable law, if Executive shall
become ill or be injured or otherwise become incapacitated such that,
in the opinion of the Company's Board of Directors, he cannot fully
carry out and perform his duties hereunder, and such incapacity shall
continue for a period of 180 consecutive days, the Company's Board of
Directors may, at any time thereafter, by giving Executive twenty (20)
days' prior written notice, fully and finally terminate his employment
under this Agreement. Termination under this Section 5(c) shall be
effective as of the date provided in such notice, which date shall not
be fewer than thirty (30) days after such notice is delivered to
Executive or his representative, and on the effective date of
termination, the LLC shall pay the Executive (i) his Base Salary
accrued to the effective date of termination at the rate in effect at
the time of such notice, payable at the time such payment is due; and
(ii) any expense reimbursement amounts accrued to the effective date
of termination, payable on the effective date of termination. Upon
payment of such amounts, the Company and the LLC shall have no further
obligation to Executive under this Agreement.
c. Death of Executive. This Agreement shall automatically terminate upon
the death of Executive. Upon the early termination of this Agreement
as a result of death, the LLC shall pay the Executive's estate: (i) an
amount equal to the Executive's Base Salary accrued through the
effective date of termination at the rate in effect at the effective
date of termination, payable at the time such payment is due; and (ii)
any expense reimbursement amounts accrued to the effective date of
termination, payable on the effective date of termination. Upon
payment of such amounts, the Company and LLC shall have no further
obligation to Executive under this Agreement.
d. Termination by Employee. Executive may, at his election, terminate
this Agreement at any time following the third anniversary of this
Agreement upon sixty (60) days notice to the Company. Upon the early
termination of the Executive's employment under this Agreement by the
Executive pursuant to a voluntary Resignation, the Company and LLC
shall pay to the Executive: (i) an amount equal to the Executive's
Base Salary accrued through the effective date of termination at the
rate in effect at the time of termination, payable at the time such
payment is due; and (ii) any expense reimbursement amounts accrued to
the effective date of termination, payable on the effective date of
termination.
e. Mitigation. The Executive shall not be required to mitigate the amount
of any payment or other benefits provided for under this Agreement by
seeking other employment and none of these payments or other benefits
may be reduced by any salary or other benefits that Executive may
earn.
6
g. Phantom Membership Interest Payment.
i. Upon written notice to the Company given not later than June 30,
2001, the Executive shall have the right to require the Company to
repay all amounts due under the "Xxxxxxxx Note" (as defined in the
Purchase Agreement) (the amount payable under the Xxxxxxxx Note being
referred to as the "Phantom Membership Interest Payment") on the third
anniversary of the date of this Agreement. Upon written notice to the
Company given not later than June 30, 2001, the Executive may extend
the term of the Xxxxxxxx Note for an additional two-year period.
ii. The Company shall have the right to prepay in full the Xxxxxxxx
Note at any time following July 31, 2001 in the event the Executive is
no longer employed by the Company or the LLC. In no event shall the
term of the Xxxxxxxx Note be extended beyond July 31, 2003.
iii. The Company shall issue shares of its common stock ("VDC Shares")
equal in value to the amount of the Phantom Membership Interest
Payment. The value of the shares issuable on account of the Phantom
Interest Payment shall be determined as follows:
(A) If the VDC Shares are traded in the over-the-counter market
and not on any national securities exchange nor in the
NASDAQ Reporting System, the market price shall be the
average of the mean between the last bid and ask prices per
share, as reported by the National Quotation Bureau, Inc. or
an equivalent generally accepted reporting service, for the
consecutive 45 trading days prior to the date on which the
Executive gives notice of his election to require the
Company to make the Phantom Membership Interest Payment (the
"Calculation Date"), or if not so reported, the average of
the closing bid and asked prices for a share of VDC common
stock for the consecutive 45 trading days prior to the
Calculation Date as furnished to the Company by any member
of the National Association of Securities Dealers, Inc.,
selected by the Company for that purpose.
(B) If the VDC Shares are traded on a national securities
exchange or in the NASDAQ Reporting System, the market price
shall be the simple average of the closing prices at which a
VDC Share traded, as quoted on the NASDAQ Reporting System
or its other principal exchange for the consecutive 45
trading days prior to the Calculation Date.
7
iv. The amount of the Phantom Membership Interest Payment shall be reduced
by an amount equal to
(A) 100% of such amount, in the event that the Executive Voluntarily
Resigns his Employment before the first anniversary of this
Agreement or is terminated by the Company and the LLC for "Cause"
on or before the third anniversary of the date of this Agreement
pursuant to Section 5(a) hereof; and
(B) 50%, of such amount, in the event the Executive Voluntarily
Resigns his employment with the Company and LLC during the period
commencing on the first anniversary of this Agreement and ending
on the third anniversary hereof.
6. Covenant Not to Compete
a. The Executive recognizes and acknowledges that the Company and LLC are
placing their confidence and trust in the Executive. The Executive,
therefore, covenants and agrees that during the Applicable Non-Compete
Period (as defined below), the Executive shall not, either directly or
indirectly, without the prior written consent of the Board of
Directors: (i) engage in or carry on any business or in any way become
associated with any business which in any way is in competition with
the Business of the Company (as such term is used and defined below);
(ii) solicit the business of any person or entity, on behalf of
himself or any other person or entity, which is or has been at any
time during the term of this Agreement a material customer or material
supplier of the Company including, but not limited to, former or
present customers or suppliers with whom the Executive has had
personal contact during, or by reason of, his relationship with the
Company in a manner adverse to the interest of the Company; (iii) be
or become an employee, agent, consultant, representative, director or
officer of, or be otherwise in any manner associated with, any person,
firm, corporation, association or other entity which is engaged in or
is carrying on any business which is in any way is in competition with
the Business of the Company; (iv) solicit for employment or employ any
person employed by the Company at any time during the 12-month period
immediately preceding such solicitation or employment; or (v) be or
become a shareholder, joint venturer, owner (in whole or in part),
partner, or be or become associated with or have any proprietary or
financial interest in or of any firm, corporation, association or
other entity which is engaged in or is carrying on any business which
is in any way in competition with the Business of the Company.
Notwithstanding the preceding sentence above, the following shall not
be deemed to violate this Section 6:
i. passive equity investments by Executive of $25,000 or less in any
entity or affiliated group of any entity which is engaged in or
is carrying on any business which is similar to or in competition
with the Business of the Company; or
8
ii. passive equity investments by Executive in excess of $25,000 in
any entity or affiliated group of any entity which is engaged in
or is carrying on any business which is similar to or in
competition with the Business of the Company, so long as and only
to the extent that Executive has obtained the prior written
consent of VDC to make such investments; or
iii. an equity investment by Executive of up to 5% in any publicly
traded company which is engaged in or is carrying on any business
which is similar to or in competition with the Business of the
Company.
b. As used in this Agreement, the term "Business of the Company" shall
include all material business activities in which the Company and LLC
are engaged now or during the Applicable Non-Compete Period, which
are: (i) telephony gateways in the United States, Central America,
South America, Ukraine, Kazakhstan, Russia, China and Egypt; (ii) the
acquisition of Alaska Telecom; (iii) cellular, PCS or other wireless
telephony licenses and businesses for the United States, Central
America, South America, Egypt, Kazakhstan, Ukraine, China and various
republics and regions of Russia; (iv) Internet service provision and
local loop opportunities in the United States, Central America, South
America, Egypt, Kazakhstan, Ukraine, China and Russia; (v) funding
and/or vendor financing from NTS, Qualcomm, Ericcson and Motorola;
(vi) paging and cable TV licenses for the entire country of Ukraine;
(vii) a billing system for the United States, Egypt, Kazakhstan,
Ukraine, China and Russia; (viii) a long distance in country project
for the national railway system of Ukraine; (ix) communications tower
site management business in the United States, Ukraine, Kazakhstan,
Egypt, China and Russia; and (x) Internet service provision in the
United States, Egypt, Kazakhstan, Ukraine, China and Russia.
c. Executive hereby recognizes and acknowledges that the existing
Business of the Company extends throughout a number of countries,
including Central America, South America, Ukraine, Russia, China,
Egypt and Kazakhstan and most states of the United States, and
therefore agrees that the covenants not to compete contained in this
Section 6 shall be applicable in and throughout such countries and
states, as well as throughout such additional areas, states or
countries in which the Company and LLC may be (or has prepared written
plans to be) doing business as of the date of termination of the
Executive's employment. The Executive further warrants and represents
that, because of his varied skill and abilities, he does not need to
compete with the Business of the Company and that this Agreement will
not prevent him from earning a livelihood and acknowledges that the
restrictions contained in this Section 6 constitute reasonable
protections for the Company.
d. As used in this Section 6, "Applicable Non-Compete Period" shall mean
that period of one year following the termination of Executive's
employment hereunder.
9
7. Trade Secrets and Confidential Information
Executive recognizes and acknowledges that certain information including,
without limitation, information pertaining to the financial condition of the
Company, its systems, methods of doing business, agreements with customers or
suppliers or other aspects of the Business of the Company or which is
sufficiently secret to derive economic value from not being disclosed
("Confidential Information") may be made available or otherwise come into the
possession of the Executive by reason of his employment with the Company.
Accordingly, the Executive agrees that he will not at any time disclose any
Confidential Information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever or make use to his personal
advantage or to the advantage of any third party, of any Confidential
Information, without the prior written consent of the Board of Directors. The
Executive shall, upon termination of employment, return to the Company all
documents which reflect Confidential Information (including copies thereof).
Notwithstanding anything heretofore stated in this Section 7, the Executive's
obligations under this Section 7 shall not, after termination of the Executive's
employment with the Company, apply to information which has become generally
available to the public without any action or omission of the Executive (except
that any Confidential Information which is disclosed to any third party by an
employee or representative of the Company who is not authorized to make such
disclosure shall be deemed to remain confidential and protectable by the
Executive under this Section 7 or disclosure of which is required by law).
8. Severability
The invalidity or unenforceability of any term of this Agreement shall not
affect the validity or enforceability of this Agreement or any of its other
terms; and this Agreement and such other terms shall be construed as though the
invalid or unenforceable term(s) were not included herein, unless the effect
would be to vitiate the parties' fundamental purposes in entering into this
Agreement.
9. Breach
The Executive hereby recognizes and acknowledges that irreparable injury or
damage shall result to the Company in the event of a breach or threatened breach
by the Executive of any of the terms of provisions Section 6 or 7 hereunder, and
the Executive therefore agrees that the Company shall be entitled to an
injunction restraining Executive from engaging in any activity constituting such
breach or threatened breach. Nothing contained herein shall be construed as
prohibiting the Company from pursuing any other remedies available to the
Company at law or in equity for breach or threatened breach of this Agreement,
including but not limited to, the recovery of damages from the Executive and, if
the Executive is an employee of the Company, the termination of his employment
with the Company in accordance with the terms and provisions of this Agreement.
10
10. Arbitration
All controversies which may arise between the parties hereto including, but
not limited to, those arising out of or related to this Agreement shall be
determined by binding arbitration applying the laws of the State of Delaware as
set forth in Section 14 hereof. Any arbitration pursuant to this Agreement shall
be conducted in Philadelphia, Pennsylvania before the American Arbitration
Association in accordance with its arbitration rules. The arbitration shall be
final and binding upon all the parties (so long as the award was not procured by
corruption, fraud or undue means) and the arbitrator's award shall not be
required to include factual findings or legal reasoning. Nothing in this Section
10 will prevent either party from resorting to judicial proceedings if interim
injunctive relief under the laws of the State of Delaware from a court is
necessary to prevent serious and irreparable injury to one of the parties, and
the parties hereto agree that the federal and state courts located in
Philadelphia, Pennsylvania shall have exclusive subject matter and in personam
jurisdiction over the parties and any such claims or disputes arising from the
subject matter contained herein.
11. Remedies Cumulative
Except as otherwise expressly provided herein, each of the
rights and remedies of the parties set forth in this Agreement shall be
cumulative with all other such rights and remedies, as well as with all rights
and remedies of the parties otherwise available at law or in equity.
12. Counterparts
This Agreement may be executed via facsimile transmission
signature and in counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument.
13. Waiver
The failure of either party at any time or times to require performance of
any provision hereof shall in no manner affect the right at a later time to
enforce the same. To be effective, any waiver must be contained in a written
instrument signed by the party waiving compliance by the other party of the term
or covenant as specified. The waiver by either party of the breach of any term
or covenant contained herein, whether by conduct or otherwise, in any one or
more instances, shall not be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
14. Governing Law
This Agreement shall be governed by the laws of the State of Delaware
without regard to principles of conflict of laws.
11
15. Complete Agreement
This Agreement constitutes the complete and exclusive agreement between the
parties hereto which supersedes all proposals, oral and written, and all other
communications between the parties relating to the subject matter contained
herein.
16. Warranties
The Executive represents, warrants, covenants and agrees that he has a
right to enter into this Agreement, that he is not a party to any agreement or
understanding whether or not written which would prohibit or restrict his
performance of his obligations under this Agreement and that he will not use in
the performance of his obligations hereunder any proprietary information of any
other party which he is legally prohibited from using.
17. Notice
Any notice required to be given pursuant to the provisions of this
Agreement shall be in writing and sent by registered mail or nationally
recognized overnight carrier, to the parties at the following addresses:
To the Company at:
Xxxxxxxxx X. Xxxxx, Chief Executive Officer
VDC Corporation Ltd.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx Ingersoll Professional Corporation
Eleven Xxxx Xxxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
To the Executive at:
Xxxx Xxxxxxxx
000 Xxxx 00xx Xxxxxx, Xxxxxxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Tab X. Xxxxxxxxx
Xxxxxxxxx, Xxxxxx & Xxxx, L.L.P.
1133 Avenue of the Americas - Suite 3825
New York, New York 10036
12
18. Key Man Insurance
The Company shall have the right to obtain what is commonly known as "Key
Man Insurance" on the life of the Executive in such amount as the Company deems
appropriate. The Executive agrees to cooperate in all manner in the obtaining of
such a policy. All expenses involved in connection with the obtaining and
maintaining of such a policy shall be that of the Company.
19. Due Authorization
The Company represents to the Executive that this Agreement has been duly
authorized and approved by the Board of Directors of the Company.
20. Assignment
This Agreement shall inure to the benefit of and be binding upon the
Company, its successors and assigns. This Agreement may not be assigned to any
third party without the written consent of all parties to the assignment.
[THIS SPACE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of this ___ day of August, 1998.
ATTEST: VDC CORPORATION LTD.
_______________________________ By: /s/ Xxxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxxx X. Xxxxx
Chief Executive Officer
MASATEPE COMMUNICATIONS USA, LLC
BY: VDC Corporation Ltd.,
Its Managing Member
By: /s/ Xxxxxxxxx X. Xxxxx
----------------------------
Xxxxxxxxx X. Xxxxx
Chief Executive Officer
WITNESS: EXECUTIVE:
_______________________________ /s/ Xxxx Xxxxxxxx
----------------------------
Xxxx Xxxxxxxx
14
ANNEX A
The attached cash flow projections and expected expenses of Masatepe
Communications USA, LLC, have been provided by Xx. Xxxxxxxx. All performance
based compensation will be based on Masatepe's performance as a stand alone
subsidiary, with such performance measured as the EBITDA of Masatepe USA, LLC.
Any debt added to Masatepe's books will not affect the EBITDA calculation to
measure Masatepe's performance.
VDC also agrees to fund or find financing for the installation of all necessary
multiplexing equipment, and the purchase and installation of any necessary
permanent earth station in Managua, Nicaragua. These expenses are estimated to
be $775,000, and Xxxx Xxxxxxxx will agree to have these items financed to the
extent they may be, and to be carried as debt on the books of Masatepe USA, LLC.
Additionally, VDC agrees to fund all operating costs of Masatape Communications
USA, LLC, including, but not limited to, salaries, satellite links, teleport
leases, and all other monthly recurring charges as more fully detailed in the
attached cash flow projections. Failure to comply with these funding obligations
could cause material adverse affect to Masatepe USA, LLC's ability to grow its
business, and meet its targets. March Xxxxxxxx has also indicated, per the
attached cash flow projections that Masatepe USA, LLC will begin producing cash
flow and continue to do so beginning in the third month from closing.
15
