EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of January 1, 1998 by and between WorldPort Communications, Inc. a Delaware
Corporation ("WorldPort" or the "Company"), and Xx. Xxxxxxx X. Xxxxxxx
(hereinafter referred to as the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services;
WHEREAS, the Executive is willing to commit himself to serve the
Company, on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and the Executive
wish to enter into an employment agreement on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "ACCRUED BENEFITS" shall mean the amount payable not
later than ten (10) days following an applicable Termination Date, which
shall be equal to the sum of the following amounts:
(i) All salary earned or accrued through the Termination
Date;
(ii) Reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and
necessary expenses incurred by the Executive through the
Termination Date;
(iii) Any and all other cash benefits previously
earned through the Termination Date and deferred at the election of
the Executive or pursuant to any deferred compensation plans then
in effect;
(iv) All other payments and benefits to which the
Executive may be entitled under the terms of any benefit plan of
the Company or otherwise, including, but not limited to, any bonus
declared by the Board, any compensation for earned, but unused,
vacation days, and any unpaid automobile allowance.
(b) "AFFILIATE" shall have the same meaning as given to that
term in Rule 12b-2 of Regulation 12B promulgated under the Securities
Exchange Act of 1934, as amended.
(c) "BOARD" shall mean the Board of Directors of the Company
(d) "DISABILITY" shall mean a physical or mental condition
whereby the Executive is unable to perform on a full-time, continuous
basis the customary duties of the Executive under this Agreement.
(e) "NOTICE OF TERMINATION" shall mean the notice described
in Section 9 hereof;
(f) "TERMINATION DATE" shall mean, except as otherwise
provided in Section 8 hereof,
(i) The Executive's date of death;
(ii) Thirty (30) days after the delivery of the Notice of
Termination terminating the Executive's employment on account of
Disability pursuant to Subsection 8(b) hereof, unless the Executive
returns on a full-time basis to the performance of Executive's
duties prior to the expiration of such period;
(iii) Thirty (30) days after the delivery of the
Notice of Termination if the Executive's employment is terminated
by the Executive voluntarily; and
(iv) Fifteen (15) days after the delivery of the Notice
of Termination if the Executive's employment is terminated by the
Company for any reason other than death or Disability.
2. EMPLOYMENT.
The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein.
3. TERM.
The Company's employment of the Executive under the provisions of this
Agreement shall commence on the date hereof and end on the second anniversary
of the Closing, unless further extended or sooner terminated as hereinafter
provided. On the second anniversary of the Closing and on the last day of
January of each year thereafter, the term of the Executive's employment
shall, unless sooner terminated as hereinafter provided, be automatically
extended for an additional one year period from the date thereof unless, at
least thirty (30) days before such date, the Company shall have delivered to
the Executive or the Executive shall have delivered to the Company written
notice that the term of the Executive's employment hereunder will not be
extended beyond its existing duration.
4. POSITIONS AND DUTIES.
The Executive shall serve as Chief Financial Officer of WorldPort
Communications, Inc. and in such additional capacities as may be reasonably
assigned to the Executive by the Board. In his capacity as Chief Financial
Officer of the Company, the Executive shall have such duties,
responsibilities and authority as are usual and customary for executives who
hold the same or a substantially similar position with companies of
comparable size in the same industry as the Company. In connection with any
capacities, the Executive shall have such duties, responsibilities and
authority as may from time to time be reasonably assigned to the Executive by
the Board. The Executive shall devote substantially all the Executive's
working time and efforts to the business and affairs of the Company.
5. PLACE OF PERFORMANCE.
In connection with the Executive's employment by the Company, the
Executive shall be based in Boston, Massachusetts except for required travel
on Company business, and except as otherwise agreed-to between the Executive
and the Company.
6. COMPENSATION AND RELATED MATTERS.
(a) Commencing on the date hereof, and during Executive's
employment, the Company shall pay to the Executive an annual salary of
$240,000 per annum payable at a rate of $16,666 per month for the first
12 months ($19,166 for the second 12 months) and $3,333 per month, in
accrual, for the first 12 months ($3,833 for the second 12 months) for
the purchase of shares in the Company, at a share price of $2.00, up to
a maximum of 108,000 shares. The Board, in its sole discretion, may
increase the annual salary of the Executive based upon satisfactory
performance and the Executive's salary may be increased from time to
time in accordance with normal business practices of the Company at the
full discretion of the Board.
(b) During the Executive's employment, the Executive shall
receive an annual performance bonus equal to 50% of the Executive's
monthly salary.
(c) During the Executive's employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in performing services
hereunder, including all business, travel, and living expenses while
away from home on business or at the request of and in the service of
the Company, provided that such expenses are incurred and accounted for
in accordance with the Company's policies and procedures.
(d) The Executive shall be entitled to the number of vacation
days in each calendar year, and to compensation for earned but unused
vacation days, determined in accordance with the Company's vacation plan
or policy. The Executive shall also be entitled to all paid holidays
provided by the Company to its other executives.
(e) The Executive shall be entitled to such other benefits,
including, but not limited to, medical insurance, life insurance, and
disability insurance determined in accordance with the Company's benefit
plan or policy.
(f) Commencing on the date hereof, the Executive shall be granted
500,000 (five hundred thousand) shares of the Company's common stock
under the Company's Long Term Incentive Plan.
(g) During the Executive's employment, the Executive shall receive a
monthly car allowance of $400.
7. OFFICES.
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a member of the Board or as a member of the
board of directors of any subsidiary of the Company; provided, however, that
the Executive is indemnified for serving in any and all such capacities to
the fullest extent provided by applicable law.
8. TERMINATION
(a) As a result of death: If the Executive shall die during
the term of this Agreement, the Executive's employment shall terminate
on the Executive's date of death, and the Executive's surviving spouse,
or the Executive's estate if the Executive dies without a surviving
spouse, shall be entitled to the Executive's Accrued Benefits as of the
Termination Date.
(b) As a result of Disability: If, as a result of the
Executive's Disability, the Executive shall have been unable to perform
the Executive's duties hereunder on a full-time, continuous basis for
two (2) consecutive months or for an aggregate of three (3) months
within any twelve (12) month period and if within thirty (30) days after
the Company provides the Executive with a Termination Notice, the
Executive shall not have returned to the performance of the Executive's
duties on a full-time basis, the Company may terminate the Executive's
employment, subject to Section 9 hereof. During the term of the
Executive's Disability prior to termination, the Executive shall
continue to receive all salary and benefits payable under Section 6
hereof, including participation in all employee benefit plans, programs,
and arrangements in which the Executive was entitled to participate
immediately prior to the Disability; provided, however, that the
Executive's continued participation is permitted under the terms and
provisions of such plans, programs, and arrangements. In the event that
the Executive's participation in any such plan, program, or arrangement
is barred as the result of such Disability, the Executive shall be
entitled to receive an amount equal to the contributions, payments,
credits, or allocations which would have been paid by the Company to the
Executive, to the Executive's account, or on the Executive's behalf
under any such plan, program, or arrangement. In the event the
Executive's employment is terminated on account of the Executive's
Disability in accordance with this Section 8, the Executive shall
receive the Executive's Accrued Benefits as of the Termination Date and
shall remain eligible for all benefits provided by any long-term
disability program of the Company in effect at the time of such
termination. The payment of the Accrued Benefits by the Company to the
Executive shall be in addition to, and not in lieu of, any benefits
payable by reason of the Executive's Disability to the extent provided
under any long-term disability program of the Company in effect at the
time of the Executive's termination, or under any disability insurance
policy, or otherwise.
(c) Termination Without Cause: Either party to this Agreement
may terminate the Executive's employment hereunder without cause at any
time upon notice to the other party, and upon any such termination, the
Executive shall be entitled to receive his Accrued Benefits. In the
event that the Company terminates the Executive's employment pursuant to
this Subsection 8(c), the Executive shall receive from the Company on
the Termination Date a lump-sum cash payment (the "Severance Payment"),
as severance, in an amount equal to one hundred percent (100%) of the
greater of (i) the Executive's annual salary at the time of such
termination, or (ii) the Executive's annual salary, as set forth in
Subsection 6(a) hereof.
(d) Termination as a result of cause. The Company may terminate
the Executive for cause, upon the occurrence of any one or more of the
following acts or omissions:
(i) The determination in a binding and final judgment, order,
or decree by a court or administrative agency of competent
jurisdiction, that the Executive has engaged in fraudulent conduct,
and the determination by the Board, in its sole discretion, that
such fraudulent conduct has a significant adverse impact on the
Company;
(ii) The conviction of the Executive on a felony or
misdemeanor involving moral turpitude (as evidenced by a binding
and final judgment, order, or decree of a court of competent
jurisdiction) and the determination by the Board, in its sole
discretion, that such conviction has a significant adverse impact
on the Company;
(iii) The refusal by the Executive to perform the
Executive's duties or responsibilities (unless significantly
changed without the Executive's consent) and after notice from the
Company to the Executive, the Executive's continuing refusal to
perform his duties or responsibilities during the 48-hour period
following the giving of such notice;
(iv) The performance by the Executive of his duties or
responsibilities in a manner constituting gross negligence (unless
such duties or responsibilities have been significantly changed
without the Executive's consent).
(v) In the event of termination for cause, as set forth above,
the Executive will be entitled to receive his Accrued Benefits, but
will not be entitled to the Severance Payment, except as otherwise
provided by Delaware law.
9. TERMINATION NOTICE.
Any termination by the Company or the Executive of the Executive's
employment hereunder shall be communicated by written Notice of Termination
to the Executive, if such Notice of Termination is delivered by the Company,
and to the Company, if such Notice of Termination is delivered by the
Executive. The Notice of Termination shall indicate the specific termination
provision in this Agreement relied upon and shall set forth the Termination
Date.
10. NONDISCLOSURE OF PROPRIETARY INFORMATION.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes, the
manufacturing of products, or the performance of services, which involve
experimental and inventive work and that the success of its business depends
upon the protection of such processes, products, and services by patent,
copyright, or secrecy and that the Executive has had, or during the course of
Executive's engagement as an employee or consultant may have, access to
Proprietary Information, as hereinafter defined, of the Company and that the
Executive has furnished, or during the course of the Executive's engagement
may furnish, Proprietary Information to the Company, the Executive agrees
that:
(a) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not patentable or
copyrightable, and any other information of a secret, proprietary,
confidential, or generally undisclosed nature relating to the Company,
its products, customers, processes, and services, including information
relating to testing research, development, manufacturing, marketing, and
selling, disclosed to the Executive or otherwise made known to the
Executive as a consequence of or through the Executive's engagement by
the Company (including information originated by the Executive) in any
technological area previously developed by the Company or developed,
engaged in, or researched, by the Company during the term of the
Executive's engagement, including, but not limited to, trade secrets,
processes, products, formulae, apparatus, techniques, know-how,
marketing plans, data, improvements, strategies, forecasts, customer
lists, and technical requirements of customers, unless such information
is in the public domain to such an extent as to be readily available to
the Company's competitors.
(b) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information, and the Executive hereby
assigns all rights that the Executive might otherwise possess in any
Proprietary Information to the Company. Except as required in the
performance of the Executive's duties to the Company, the Executive will
not at any time during or after the term of the Executive's engagement,
which term shall include any time in which the Executive may be retained
by the Company as a consultant, directly or indirectly use, communicate,
disclose, or disseminate any Proprietary Information.
(c) All documents, records, notebooks, notes, memoranda, and
similar repositories of, or containing, Proprietary Information made or
compiled by the Executive at any time or made available to the Executive
prior to or during the term of Executive's engagement by the Company,
including any and all copies thereof, shall be the property of the
Company, shall be held by the Executive in trust solely for the benefit
of the Company, and shall be delivered to the Company by the Executive
on the termination of the Executive's engagement or at any other time on
the request of the Company.
(d) The Executive will not assert any rights under any
inventions, copyrights, discoveries, concepts, or ideas, or improvements
thereof, or know-how related thereto, as having been made or acquired by
the Executive prior to the Executive's being engaged by the Company or
during the term of the Executive's engagement if based on or otherwise
related to Proprietary Information.
11. ASSIGNMENT OF INVENTIONS.
(a) For purposes of this Section 11, the term "Inventions"
shall mean discoveries, concepts, and ideas, whether patentable or
copyrightable or not, including, but not limited to, improvements, know-
how, data, processes, methods, formulae, and techniques, as well as
improvements thereof, or know-how related thereto, concerning any past,
present, or prospective activities of the Company, which the Executive
makes, discovers, or conceives (whether or not during the hours of the
Executive's engagement or with the use of the Company's facilities,
materials, or personnel), either solely or jointly with others during
the Executive's engagement by the Company or any Affiliate of the
Company and, if based on or related to Proprietary Information, at any
time after termination of such engagement. All Inventions shall be the
sole property of the Company, and the Executive agrees to perform the
provisions of this Section 11 with respect thereto without the payment
by the Company of any royalty or any consideration therefor, other than
the regular compensation paid to the Executive in his capacity of as an
employee or consultant.
(b) The Executive shall maintain written notebooks in which
the Executive shall set forth, on a current basis, information as to the
Inventions, describing in detail the procedures employed and the results
achieved, as well as information as to any studies or research projects
undertaken on the Company's behalf. The written notebooks shall at all
times be the property of the Company and shall be surrendered to the
Company upon termination of the Executive's engagement or, upon request
of the Company, at any time prior thereto.
(c) The Executive shall apply, at the Company's request and
expense, for United States and foreign letters patent or copyrights,
either in the Executive's name or otherwise as the Company shall desire.
(d) The Executive hereby assigns to the Company all of the
Executive's rights to the Inventions and to applications for United
States and/or foreign letters patent or copyrights and to United States
and/or foreign letters patent or copyrights granted in respect of the
Inventions.
(e) The Executive shall acknowledge and deliver promptly to
the Company, without charge to the Company, but at its expense, such
written instruments (including applications and assignments) and do such
other acts, such as giving testimony in support of the Executive's
inventorship, as may be necessary in the opinion of the Company to
obtain, maintain, extend, reissue, and enforce United States and/or
foreign letters patent and copyrights relating to the Inventions and to
vest the entire right and title thereto in the Company or its nominee.
The Executive acknowledges and agrees that any copyright developed or
conceived of by the Executive during the term of the Executive's
employment which is related to the business of the Company shall be a
"work for hire" under the copyright law of the United States and other
applicable jurisdictions.
(f) The Executive represents that the Executive's performance
of all of the terms of this Agreement and as an employee of or
consultant to the Company does not and will not breach any trust
existing prior to the Executive's employment by the Company. The
Executive agrees not to enter into any agreement, either written or
oral, in conflict herewith and represents and agrees that the Executive
has not brought and will not bring with the Executive to the Company or
use in the performance of the Executive's responsibilities at the
Company any materials or documents of a former employer which are not
generally available to the public, unless the Executive has obtained
written authorization from the former employer for their possession and
use, and the Executive has provided a copy of such written authorization
to the Company.
(g) No provision of this Section 11 shall be deemed to limit
the restrictions applicable to the Executive under Section 10 hereof.
12. SHOP RIGHTS.
The Company shall also have the royalty-free right to use in its
business, and to make, use, and sell products, processes, and/or services
derived from any inventions, discoveries, concepts, and ideas, whether or not
patentable, including, but not limited to, processes, methods, formulas, and
techniques, as well as improvements thereof or know-how related thereto,
concerning any past, present, or prospective activities of the Company, which
are not within the scope of Inventions as defined in Section 11 hereof, but
which are conceived or made by the Executive during the period that the
Executive is engaged by the Company with the use or assistance of the
Company's facilities, materials, or personnel.
13. NON-COMPETE.
The Executive hereby agrees that during the Executive's employment, and
for a period of six months from the termination thereof, the Executive will
not, without the written consent of the Company:
(a) Within any jurisdiction or marketing area in which the
Company or any subsidiary thereof is doing business, own, manage,
operate, or control any Business, provided, however, that for purposes
of this Subsection 13(a), ownership of securities of not in excess of
five percent (5%) of any class of securities of a public company shall
not be considered as owning, managing, operating, or controlling any
Business; or
(b) Within any jurisdiction or marketing area in which the
Company or any subsidiary thereof is doing business, act as, or become
employed as, an officer, director, employee, consultant or agent of any
Business; or
(c) Solicit any Business for, or sell any products that are
in competition with the Company's products to, any company, which is a
customer or client of the Company or any of its subsidiaries as of the
Termination Date; or
(d) Solicit the employment of, or hire, any full time
employee employed by the Company or its subsidiaries as of the
Termination Date.
The term "Business," as used in this Section 13, shall mean any
person or entity which is an international facilities-based
telecommunications carrier or any of the services which are necessarily
provided by an international facilities-based telecommunications carrier
to its customers.
14. REMEDIES AND JURISDICTION.
(a) The Executive hereby acknowledges and agrees that a
breach of the agreements contained in Section 13 of this Agreement will
cause irreparable harm and damage to the Company, that the remedy at law
for the breach or threatened breach of the agreements set forth in
Section 13 of this Agreement will be inadequate, and that, in addition
to all other remedies available to the Company for such breach or
threatened breach (including, without limitation, the right to recover
damages), the Company shall be entitled to injunctive relief for any
breach or threatened breach of the agreements contained in Section 13 of
this Agreement.
(b) All claims, disputes and other matters in question
between the parties arising under this Agreement, except those
pertaining to Section 13 hereof, shall, unless otherwise provided
herein, be decided by arbitration in the State of Delaware in accordance
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association (including such procedures governing
selection of the specific arbitrator or arbitrators), unless the parties
otherwise agree. The Company shall pay the costs of any such
arbitration. The award by the arbitrator or arbitrators shall be final,
and judgment may be entered upon it in accordance with applicable law in
any state or federal court having proper jurisdiction.
15. INDEMNIFICATION.
The Company agrees to indemnify and hold the Executive harmless from and
against any and all losses, liabilities, or costs (including, but not limited
to, reasonable attorney's fees), which the Executive may sustain, incur, or
assume as a result of, or relative to, any allegation, claim, civil or
criminal action, proceeding, charge, or prosecution, which may be alleged,
made, instituted, or maintained against the Executive or the Company, jointly
or severally, arising out of or based upon the Executive's employment with
the Company, to the fullest extent permitted by applicable law including, but
not limited to, any injury to person(s) or damage to property or business by
reason of any cause whatsoever, regardless of whether any such injury or
damage is caused by negligence on the part of the Executive. THIS INDEMNITY
PROVISION IS INTENDED TO INDEMNIFY THE EXECUTIVE (A) AGAINST THE CONSEQUENCES
OF HIS OWN NEGLIGENCE OR FAULT, REGARDLESS OF WHETHER THE EXECUTIVE IS SOLELY
NEGLIGENT OR CONTRIBUTORILY, PARTIALLY, JOINTLY, COMPARATIVELY, OR
CONCURRENTLY NEGLIGENT WITH ANY OTHER PERSON, AND (B) AGAINST ANY LIABILITY
OF THE EXECUTIVE BASED ON APPLICABLE DOCTRINE OF STRICT LIABILITY. Not
withstanding the foregoing, the Company will not, however, indemnify the
Executive for any claims, liabilities, losses, damages or expenses that
result solely from bad faith, gross negligence or willful misconduct by the
Executive.
16. ATTORNEYS' FEES.
The Company shall reimburse the Executive for any and all costs incurred
by the Executive in connection with any legal proceedings in connection with
the Executive's rights or obligations under this Agreement, including
reasonable attorneys' fees, together with interest thereon as provided by
applicable law.
17. SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, estate, executors, administrators, heirs, or beneficiaries.
In the event of the Executive's death, all amounts payable to the Executive
under this Agreement shall be paid to the Executive's surviving spouse, if
the Executive dies without a surviving spouse, to the Executive's estate.
This Agreement shall inure to the benefit of, be binding upon, and be
enforceable by or against, any successor, surviving or resulting corporation,
or other entity or any assignee of the Company to which all or substantially
all of the business and assets of the Company is transferred whether by
merger, consolidation, exchange, assignment, sale, lease, or other
disposition or action.
18. ENFORCEMENT.
The provisions of this Agreement shall be regarded as divisible, and if
any of such provisions or any part hereof is declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or the parts hereof and
the applicability thereof shall not be affected thereby.
19. AMENDMENT OR TERMINATION.
This Agreement may not be amended or terminated during its term, except
by written instrument executed by both the Company and the Executive.
20. SURVIVABILITY.
The provisions of Sections 10, 11, 12, 13 and 15 hereof and the
provisions hereof relating to the payment of the Accrued Benefits and the
Severance Payment shall survive the termination of this Agreement.
21. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement between the Executive and
the Company with respect to the subject matter hereof and supersedes all
prior oral or written agreements, negotiations, commitments, and
understandings with respect thereto.
22. GOVERNING LAW; VENUE.
This Agreement and the respective rights and obligations of the
Executive and the Company hereunder shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
the provisions, principles, or policies thereof relating to choice of law or
conflict of laws.
23. NOTICE.
Notices given pursuant to this Agreement shall be in writing and shall
be deemed given when received, and if mailed, shall be mailed by United
States registered or certified mail, return receipt requested, postage
prepaid, if to the Company, to:
WorldPort Communications, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
with a copy to corporate counsel for the Company to:
XxXxxxxxx, Will & Emory
Attn: Xxxxx Xxxxxx
000 Xxxx Xxxxxx Xx.
Xxxxxxx, XX 00000
000-000-0000
or to such other address as the Company shall have given to the Executive or,
if to the Executive, to:
Xxxxxxx X. Xxxxxxx
0 Xxxxxxxx Xxxx
Xxxxx, XX 00000
000-000-0000
or to such other address as the Executive shall have given to the Company.
24. NO WAIVER.
No waiver by either party at any time of any breach by the other party
of, or any failure by the other party to comply with, any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.
25. HEADINGS.
The headings herein contained are for reference only and shall not
affect the meaning or interpretation of any provision of this Agreement.
26. 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.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
THE COMPANY:
WORLDPORT COMMUNICATIONS, INC.
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
