EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 29th day of December, 1997 between Xxxx
X. Xxxxxxx, an individual residing at 00 Xxxxxxx Xx., Xxxx Xxxxx, Xxx Xxxxxx
00000 (hereinafter referred to as "Employee"), and ITDS Intelicom Services,
Inc., a Delaware corporation which is a wholly owned subsidiary of International
Telecommunication Data Systems, Inc. with offices at 000 Xxxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 (hereinafter referred to as "Corporation").
WHEREAS, the Corporation desires to employ the Employee, and the Employee
desires to serve as an employee of Corporation on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and promises of the
parties hereto, the Corporation and the Employee agree as follows:
1. Employment: The Corporation hereby agrees to employ the Employee as
Chief Financial Officer, and the Employee hereby agrees to function as such for
the Corporation on the terms and conditions hereinafter stated, subject to the
directives of the Chief Executive Officer and Board of Directors of the
Corporation (the "Board").
2. Term of Employment: The term of this Agreement shall begin on February
9, 1998 and shall continue in full force and effect until February 8, 2000,
unless sooner terminated as provided herein.
3. Compensation:
(a) During the term of this Agreement, for all services rendered by
Employee under this Agreement, the Corporation shall pay the Employee an annual
base salary of Two Hundred Third Thousand And 00/100 Dollars ($230,000.00) per
annum, payable in arrears at a rate of Nineteen Thousand One Hundred Sixty-Six
and 00/100 Dollars ($19,166.00) on the last day of each month or more frequently
in the discretion of the Board. All compensation payable under this Agreement
shall be subject to applicable federal and state withholding tax requirements
and other deductions approved by Employee.
(b) In addition to the base salary set forth above, the Corporation
shall pay the Employee a signing bonus in the amount of Two Hundred Thousand And
00/100 Dollars ($200,000.00), payable one month after the commencement of
employment. The Employee is also eligible to receive an annual bonus in an
amount to be determined by the Board of Directors.
(c) In addition to the annual base salary described in Section 3(a)
hereof and the signing bonus described in Section 3(b), the Corporation grants
Employee a right to immediately become eligible to participate in the ITDS
Employee
Stock Option Plan and the Employee Stock Purchase Plan (collectively the
"Plan"), copies of which are attached hereto and made a part hereof as
Attachment "A," upon the commencement of this Agreement with the Corporation. On
the effective date of this Agreement, Employee shall be granted options to
purchase seventy-five thousand (75,000) shares of Common Stock of the
Corporation, at market value on the date of grant, vesting annually over a 4
year period pursuant to the terms of the Plan.
4. Fringe Benefits:
(a) Subject to applicable waiting periods and Employee's insurability,
Corporation shall provide the Employee, at no cost to Employee, with medical and
hospitalization insurance coverage similar to that offered to other employees of
the Corporation. Subject to applicable waiting periods, during the term hereof,
Corporation shall provide the Employee, at no cost to the Employee, with long
term disability insurance coverage similar to that offered to other employees of
the Corporation.
(b) Subject to applicable waiting periods and during the term hereof,
Corporation shall provide Employee, at no cost to Employee, with term life
insurance coverage on Employee's life equal to twice Employee's base salary to a
maximum of One Hundred Fifty Thousand And 00/100 Dollars ($150,000.00). The
proceeds of such life insurance policies shall be payable to Employee's named
beneficiary.
(c) Subject to applicable waiting periods, Employee will be eligible to
participate in the Corporation's 401K plan.
5. Duties and Extent of Services: Upon the execution of this Agreement and
throughout its term, the duties of the Employee shall include, but are not
limited to, the following:
(a) Provide managerial and executive supervision and support to the
Corporation's accounting personnel;
(b) Provide investor relations support and management;
(c) Provide financial supervision of all aspects of the Corporation's
business;
(d) Develop budgeting, accounting and management programs to support the
development and distribution of the products and services of the Corporation;
(e) Responsibility for the Corporation's financial reporting
obligations;
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(f) Such other duties and responsibilities as may be assigned by the
Board from time to time.
(g) Employee will work exclusively for the Corporation during the term
of this Agreement, Employee shall exert his best efforts and shall devote no
less than the greater of: (i) fifty (50) hours per week, or (ii) the amount of
time necessary for Employee to perform his duties with regard to the business
and affairs of the Corporation in accordance with this Agreement. During the
term of this Agreement Employee shall not, directly or indirectly, alone or as a
member of the partnership, or as an officer, director, shareholder, owner, agent
or employee of any other corporation, be engaged in or concerned with any other
compensable duties or pursuits whatsoever requiring his personal services
without the prior written consent of the Corporation, which consent may be
withheld for any reason or for no reason.
6. Vacation: During each year of the term of this Agreement, the Emplo xxx
shall be entitled to three (3) weeks' vacation, the time of which shall be
determined after consultation with the Chief Executive Officer of the
Corporation. For purposes of this Section 6, Employee shall be entitled to carry
forward any unused vacation time from one period to another.
7. Termination: The Employee's employment hereunder shall terminate on the
date set forth in Section 2 hereof, or sooner upon the occurrence of any of the
following events:
(a) The Employee's death;
(b) The termination of the Employee's employment hereunder by
Corporation, at its option, to be exercised by written notice from Corporation
to the Employee, upon the Employee's incapacity or inability to perform his
services as contemplated herein for a period of at least seventy-five (75)
consecutive days or an aggregate of one hundred (100) consecutive or
non-consecutive days during any twelve (12) month period during the term hereof
due to the fact that his physical or mental health shall have become impaired so
as to make it impossible or impractical for him to perform the duties and
responsibilities contemplated for him hereunder; or
(c) The termination for "cause" of the Employee's employment hereunder
by Corporation, at its option, to be exercised by written notice from
Corporation to the Employee. The term "cause", as used herein, shall mean: (i)
the Employee's inability or incapacity to perform his duties and/or services in
accordance with the reasonable expectations of the Corporation, (ii) the
Employee's willful misconduct or gross negligence in the performance of his
duties on behalf of the Corporation, or the Employee's dishonesty in the
performance of his duties on behalf of the Corporation, (iii) the neglect,
failure or refusal of the Employee to carry out any reasonable request of the
Chief Executive Officer or Board for the provision of
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services hereunder, (iv) the material breach of any provision of the Agreement
by the Employee or (v) the Employee's plea of guilty or nolo contendere to, or
conviction of any crime involving moral turpitude, common law fraud, dishonesty,
theft, or unethical conduct.
8. Restrictions on Employee: During the period commencing on the date
hereof and ending two (2) years after the termination of the Employee's
employment by Corporation for any reason, the Employee shall not directly or
indirectly induce or attempt to induce any of the employees of Corporation to
leave the employ of Corporation.
9. Covenant Not To Compete: During the period commencing on the date
hereof, and ending one (1) year after the termination of the Employee's
employment for any reason, the Employee shall not, except as a passive investor
in publicly held companies, directly or indirectly engage in, associate with, or
own or control any interest in, or act as principal, director, officer, agent,
or employee of, or consultant to: (i) Cincinnati Xxxx Information Systems,
Systematics, Xxxxxxx Systems, Cable Services Group, Computer Sciences
Corporation, Electronic Data Systems, Alltel, Comsoft, LHS, Danet, Subscriber
Computing, H.O. Software, Baja Systems or their successors or assigns, or (ii)
any person, firm or corporation, located in the eastern third of the United
States, whose activity is (a) a venture or business, substantially similar to
that of Corporation and/or (b) which is in direct competition with the
Corporation. Notwithstanding anything to the contrary contained herein, to the
extent Corporation (i) makes an absolute assignment of the bulk of its assets
for the benefit of creditors, (ii) consents to the appointment of a bankruptcy
trustee, (iii) institutes bankruptcy proceedings or (iv) experiences a
cessation, the provisions of this Section 9 shall lapse.
10. Proprietary Information:
(a) For purposes of this Agreement, "proprietary information" shall
mean any information relating to the business of Corporation or any entity in
which Corporation has an ownership interest that has not previously been
publicly released by duly authorized representatives of Corporation and shall
include (but shall not be limited to) information encompassed in all proposals,
marketing and sales plans, financial information, costs, pricing information,
computer programs, customer information, customer lists, and all methods,
concepts or ideas in or reasonably related to the business of Corporation or any
entity in which Corporation has an interest. The Employee agrees to regard and
preserve as confidential all proprietary information, whether she has such
information in her memory or in writing or other physical form. The Employee
will not, without written authority from Corporation to do so, directly or
indirectly, use for her benefit or purposes, nor disclose to others, either
during the term of her employment hereunder or thereafter, except as required by
the conditions of her employment hereunder, any proprietary information. The
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Employee agrees not to remove from the premises of Corporation or any subsidiary
or affiliate of Corporation, except as an employee of Corporation in pursuit of
the business of Corporation or any of its subsidiaries, affiliates or any entity
in which Corporation has an ownership interest, or except as specifically
permitted in writing by Corporation, any document or object containing or
reflecting any proprietary information. The Employee recognizes that all such
documents and objects, whether developed by her or by someone else during the
term of her employment with Corporation, are the exclusive property of
Corporation.
(b) All proprietary information and all the Employee's interest in
trade secrets, trademarks, computer programs, customer information, customer
lists, employee lists, products, procedure, copyrights and developments
hereafter to the end of the period of employment hereunder developed by Employee
as a result of, or in connection with, her employment hereunder, shall belong to
Corporation; and without further compensation, but at Corporation's expense,
forthwith upon request of Corporation, Employee shall execute any and all such
assignments and other documents and take any and all such other action as
Corporation may reasonably request in order to vest in Corporation all
Employee's right, title and interest in and all of the aforesaid items, free and
clear of liens, charges and encumbrances.
(c) The Employee expressly agrees that the covenants set forth in
Sections 8, 9, and 10 of this Agreement are being given to Corporation in
connection with the employment of the Employee by Corporation and that such
covenants are intended to protect Corporation against the competition by the
Employee, within the terms stated, to the fullest extent deemed reasonable and
permitted in law and equity. In the event that the foregoing limitations upon
the conduct of the Employee are beyond those permitted by law, such limitations,
both as to time and geographical area, shall be, and be deemed to be, reduced in
scope and effect to the maximum extent permitted by law.
11. Injunctive Relief: The Employee acknowledges that the injury to
Corporation resulting from any violation by her of any of the covenants
contained in this Agreement will be of such a character that it cannot be
adequately compensated by money damages, and, accordingly, Corporation may, in
addition to pursuing its other remedies, obtain an injunction from any court
having jurisdiction of the matter restraining any such violation; and no bond or
other security shall be required in connection with such injunction.
12. Representation of Employee: The Employee represents and warrants that
neither the execution and delivery of this Agreement nor the performance of his
duties hereunder violates the provisions of any other agreement to which she is
a party or by which she is bound.
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13. Parties; Non-Assignability: As used herein, the term "Corporation"
shall mean and include Corporation and any subsidiary or affiliate thereof and
any successor thereto unless the context indicates otherwise. This Agreement and
all rights hereunder are personal to the Employee and shall not be assignable by
her and any purported assignment shall be null and void and shall not be binding
on Corporation.
14. Entire Agreement: This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated herein and
supersedes all previous representations, negotiations, commitments, and writing
with respect thereto.
15. Amendment or Alteration: No amendment or alteration of the terms of
this Agreement shall be valid unless made in writing and signed by all of the
parties hereto.
16. Choice of Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, except a provision of that
law which would refer resolution of any issue to another jurisdiction. The forum
for resolution of any dispute shall be the State of Connecticut.
17. Arbitration: Any controversy, claim, or breach arising out of or
relating to this Agreement or the breach thereof may, in the sole discretion of
the Corporation, be settled by arbitration in Stamford, Connecticut in
accordance with the rules of the American Arbitration Association and the
judgment upon the award rendered shall be entered by consent in any court having
jurisdiction thereof.
18. Waiver of Breach: The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any of the parties hereto.
19. Binding Effect: The terms of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective personal
representatives, heirs, administrators, successors, and permitted assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
CORPORATION:
ITDS Intelicom Services, Inc.
By: /s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx, President
EMPLOYEE:
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
