EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of June 19th, 2000 by and
between URSUS TELECOM CORPORATION, a Florida corporation (the "Company"), and
XXXXXXXX XXXXXXXX ("Xxxxxxxx").
In consideration of the mutual covenants contained herein, the parties
hereto agree as follows:
1. Term. The Company hereby employs Xxxxxxxx as the Chief
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Financial Officer of the Company, and Xxxxxxxx agrees to serve the Company as
such, upon the terms and Conditions hereof for the period commencing on the date
hereof and, unless Xxxxxxxx'x employment under the Agreement is otherwise
terminated in accordance with the provisions hereof, ending on December 31,
2000.
2. Duties, (a) Xxxxxxxx shall serve as the Company's Chief
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Financial Officer, with such duties and authority as are generally incident to
such position. Xxxxxxxx will hold such senior offices and/or such
Directorships in the Company and/or any subsidiaries or affiliates of the
Company to which, from time to time, he may be elected or appointed; provided
that the offices to which Xxxxxxxx may be so elected or appointed shall not
be inconsistent with his duties and authority as aforesaid.
(b) Xxxxxxxx agrees that he will devote substantially
all of his time and attention to the affairs of the Company and use his best
efforts to promote the business and interests of the Company and that he will
not engage, directly or indirectly, in any other business or occupation during
the term of employment hereunder. It is understood, however, that the foregoing
will not prohibit Xxxxxxxx from engaging in personal investment activities for
himself and his family that do not detrimentally interfere with the performance
of his duties hereunder.
3. Compensation. The Company will pay Xxxxxxxx an annual salary
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("Base Salary") at an annual rate of $200,000 for the calendar year 2000,
payable in equal, bi-weekly installments in accordance with customary payroll
practices for senior executives of the Company for all services to be rendered
hereunder, including, without limitation, all services to be rendered by him as
an officer and/or director of the Company and its subsidiaries and affiliates.
In addition all existing benefits including medical benefits and the existing
car allowance benefit shall remain in place until the end of the term of this
employment agreement.
In addition to the Annual Bonus described below, as an incentive
to execute this employment agreement and in recognition of his successful
closing of the Tail Wind Fund private placement agreement, the Board of
Directors granted Xxxxxxxx on May 24, 2000 twenty-five thousand (25,000) options
on its common stock (of which up to $100,000 in value are
eligible for a incentive stock option award), subject to shareowner approval of
an increase in the number of shares in the Company Stock Option Plan, at a
strike price of $10.25, vesting and exercisable on the grant date.
Additional Financing Performance Bonus: Simultaneously with the
execution of this employment agreement, the Company by resolution of the
Compensation Committee of the Board of Directors hereby grant's Xxxxxxxx a
performance bonus of up to One hundred thousand (100,000) non-qualified stock
options on its Common Stock at a strike price equal to the closing price on the
date of signing of this agreement, subject to shareowner approval of an increase
in the number of shares in the Company Stock Option Plan, based solely upon the
Company obtaining any additional public or private financing or investment by
May 31, 2001. Of such grant, Fifty-thousand (50,000) options shall be vested and
exercisable on the closing of any financing or investment of up to and including
Five Million dollars ($5,000,000). An additional Twenty five thousand (25,000)
options shall be vested and exercisable on the closing of any financing or
investment of over Five Million dollars ($5,000,000) up to and including Seven
and one half million dollars ($7,500,000). An additional Twenty-five thousand
(25,000) options, for a total of one hundred thousand (100,000) options, shall
be
granted if the Company obtains any additional financing or investment over Seven
and one-half million dollars ($7,500,000). These options shall be vested and
exercisable immediately upon closing of the additional financing or investment.
Xxxxxxxx agrees that he will use his best efforts to obtain such additional
financing during his employment and the Company agrees that these options shall
be issued to Xxxxxxxx irrespective of whether he personally negotiated the
financing arrangements or whether the additional financing occurred after his
termination of employment for any reason, notwithstanding any other provision in
this agreement to the contrary.
Employment Agreement Supercedes: To the extent that any
provisions of this employment agreement conflict with or are inconsistent with
any provision in the 1998 stock incentive plan of Ursus Telecom Corporation or
any subsequently revised Company stock incentive plan, the provisions of this
employment agreement shall control; and any inconsistent or conflicting
provision of the Company's employee stock incentive plan shall be null and
void.
Strategic Relationship Performance Bonus: In addition and
simultaneously with the execution of this employment agreement the Company by
resolution of the Compensation Committee of the Board of Directors hereby grants
Xxxxxxxx a performance bonus of Seventy-five thousand (75,000) non-qualified
stock options on its Common Stock at a strike price equal to the closing price
on the date of signing of this agreement, subject to shareowner approval of an
increase in the number of shares in the Company Stock Option Plan, based solely
upon the Company closing by May 31, 2001, any of the following strategic
relationship agreements:
A joint venture, and/or strategic alliance
A partnering agreement
An advertising contract or agreement
A revenue share agreement
with any of following organizations:
*
These options shall be vested and exercisable immediately upon closing of an
agreement with any of the above named entities. The Company agrees that these
options shall be issued to Xxxxxxxx irrespective of whether he personally
negotiated the agreements with the specified organizations or whether the
closing of such agreement occurred after his termination of employment for any
reason, notwithstanding any other provision in this agreement to the contrary.
Nothing contained herein shall prohibit the Board of Directors of the
Company, in its sole discretion, from increasing the compensation payable to
Xxxxxxxx pursuant to this Agreement, by way of increased Base Salary, Annual
Bonus, grant of options or warrants, or otherwise and/or making available to
Xxxxxxxx other benefits in addition to those to which he is entitled hereunder.
4. Expenses. Xxxxxxxx shall be entitled to reimbursement by
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the Company, in accordance with the Company's policies then applicable to senior
executives, against appropriate vouchers or other receipts for travel,
entertainment and other business expenses reasonably incurred by him in the
performance of his duties hereunder.
5. Executive Benefits. Xxxxxxxx shall be entitled to a paid vacation of
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4 weeks during calendar year 2000. Such vacation shall be taken at such time or
times during the applicable year as may be determined by Xxxxxxxx subject to the
Company's reasonable business needs. Xxxxxxxx shall be entitled to
participate in, and receive benefits under, any pension, profit sharing,
insurance, hospitalization, medical, disability, stock purchase, stock option,
stock ownership or other employee benefit plan, program or policy of the Company
that may be in effect at any time during the course of his employment by the
Company and which shall be generally available to senior executives of the
Company occupying positions of comparable status or responsibility, subject to
the terms of such plans, programs or policies. Notwithstanding the foregoing,
the Company may, in its sole discretion, at any time and from time to time,
change or revoke any of its employee benefits plans, programs or
policies and Xxxxxxxx shall not be deemed, solely by virtue of this Agreement,
to have any vested interest in the continuation of any such plans, programs or
policies; provided, however, that nothing in this Agreement shall affect
or impair any vested rights of Xxxxxxxx under the terms of any such plan,
program or policy.
6. Withholding. All payments required to be made by the Company
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hereunder to Xxxxxxxx shall be subject to the withholding of such amounts
relating to taxes and other governmental assessments as the Company may
reasonably determine it should withhold pursuant to any applicable law, rule or
regulation.
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*Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
7. Death: Permanent Disability. In the event of the death of Xxxxxxxx
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during the term of this Agreement, this Agreement shall terminate. If during the
term of this Agreement Xxxxxxxx fails because of illness or other incapacity to
perform the services required to be performed by him hereunder for any
consecutive period of more than 120 days, or for shorter periods aggregating
more than 180 days in any consecutive twelve-month period
(any such illness or incapacity being hereinafter referred to as a "permanent
disability"), then the Company, in its discretion, may at any time thereafter
terminate this Agreement upon not less than 10 days' written notice thereof to
Xxxxxxxx, and this Agreement shall terminate and come to an end upon the date
se tforth in said notice as if said date were the termination date of this
Agreement; provided, however, that no such termination shall be effective if
prior to the date when such notice is given, Xxxxxxxx'x illness or incapacity
shall have terminated and he shall be physically and mentally able to perform
the services required hereunder and shall have taken up and be performing such
duties.
If Xxxxxxxx'x employment shall be terminated by reason of his death
or permanent disability, Xxxxxxxx or his estate, as the case may be, shall be
entitled to receive (i) any earned and unpaid salary accrued
through the date of termination, (ii) a pro rata portion of any annual bonus
which Xxxxxxxx would otherwise have been entitled to receive pursuant to any
bonus plan or arrangement for senior executives of the Company, (iii) options on
the Company's Common stock awarded in accordance with the above paragraphs on
the additional financing performance bonus or the strategic relationships
performance bonus as designated in this employment agreement and (iv) subject to
the terms thereof, any benefits that may be due to Xxxxxxxx on the date of
termination under the provisions of any employee benefit plan, program or
policy.
8. Termination for Cause. The Company may at any time
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during the term of this Agreement, by written notice, terminate the employment
of Xxxxxxxx for cause, the cause to be specified in the notice. For purposes of
this Agreement, "cause" shall mean (i) any willful misconduct of Xxxxxxxx in
connection with the performance of any of his duties hereunder, including
without limitation misappropriation of funds or property of the Company,
securing or attempting to secure personally any profit in connection with any
transaction entered into on behalf of the Company or any willful and intentional
act having
the effect of injuring the reputation, business or business relationships of the
Company; (ii) willful failure, neglect or refusal to perform Xxxxxxxx'x material
duties hereunder that is not cured within 20 days after the Company notifies
Xxxxxxxx thereof; (iii) breach of any material covenants contained in this
Agreement that is not cured within 20 days after the Company notifies Xxxxxxxx
thereof; and (iv) conviction (or nolo contendere plea) in connection with a
felony relating in any way to the business or affairs of the Company, or which
would be required to be disclosed in any filing or report with the U.S.
Securities and Exchange Commission. The determination of whether "cause" exists
shall only be made at a meeting of the Board of Directors of which Xxxxxxxx
receives notice and an opportunity to address the Board on such matter.
Termination for Cause shall be effective upon the giving of such notice and
Xxxxxxxx shall be entitled to receive (i) any earned and unpaid salary
accrued through the date of termination
and (ii) subject to the terms thereof, any benefits which may be due to Xxxxxxxx
on such date under the provisions of any employee benefit plan,
program or policy. Xxxxxxxx hereby disclaims any right to receive a pro-rata
portion of any annual bonus with respect to the fiscal year in which such
termination occurs.
9. Resignation for Good Reason. Xxxxxxxx may at any time during the
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term of this Agreement, by written notice, terminate his employment for good
reason, the reason to be specified in the notice. For purposes of this
Agreement,
"good reason" shall exist if (i) the Company materially fails to comply with any
of the provisions of this Agreement, other than isolated, insubstantial or
inadvertent failures not occurring in bad faith and which are remedied by the
Company promptly after receipt of notice thereof given by Xxxxxxxx, or (ii) the
Company shall diminish Xxxxxxxx'x title, duties, base salary or benefits.
10. Payments Upon Termination. If during the term of this Agreement,
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Xxxxxxxx' s employment is terminated (i) by the Company without "cause" or
(ii) by Xxxxxxxx for any "good reason," the Company shall pay to Xxxxxxxx the
Base Salary at the rate in effect at the time notice of termination is given,
together with any applicable Annual Bonuses and benefits payable under the terms
of this Agreement and other rights and benefits Xxxxxxxx may have under employee
benefits plans and programs of the Company in existence as of the date of such
termination for the balance of the term of this Agreement In addition, the
exercise period for all granted and vested unexercised options shall be extended
for twelve (12) months following the date of Xxxxxxxx'x termination.
11. Payments Upon Change of Control. During the term of this
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Agreement, if there is a Change of Control (as hereinafter defined) and the
Company takes any action that would entitle Xxxxxxxx to terminate his employment
for "good reason," as such term is defined in Section 9 hereof (a "Triggering
Event"), then Xxxxxxxx may at his election, at any time within the term of this
employment agreement terminate this Agreement (a "Voluntary Termination"), and
Xxxxxxxx shall be entitled to the following compensation, in addition to the
other compensation and bonuses provided for herein:
(a) In lieu of any further salary payments to Xxxxxxxx for
periods subsequent to the date of Voluntary Termination, the Company shall pay
as severance payment to Xxxxxxxx, no later than the fifth day following the date
of Voluntary Termination, a lump-sum severance payment of two years' base
includible
compensation, equal to the maximum tax deduction that the Company is eligible to
receive under the applicable "golden parachute" regulations; and
(b) The Company shall provide Xxxxxxxx with all employee
benefits and programs of the Company that Xxxxxxxx was entitled to receive or
participate in immediately prior to the effective date of the Voluntary
Termination for the twelve (12) month period following the date of such
Voluntary Termination. In addition, the exercise period for granted and vested
options shall be extended for twelve (12) months following the date of
Xxxxxxxx'x termination.
For the purposes of this Agreement, "Change of Control" shall mean
the occurrence of any of the following events:
(i) Any "person" or "group" (as such terms are used under
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as Amended
(the"Exchange Act"), whether or not such Sections are applicable) is or becomes,
whether by means of any issuance or direct or indirect transfer of securities,
merger, consolidation, liquidation, dissolution or otherwise, the
"beneficial owner" (as that term is used under Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not such rules are applicable, except that a "person"
or
"group" shall be deemed to have "beneficial ownership" of all shares that he or
it has the right to acquire, whether such right is exercisable immediately or
only after the passage of time or otherwise), directly or indirectly through one
or more intermediaries, of either 33% or more of the total voting power
represented by all of the voting stock of the Company; or 33% of all of the
outstanding common stock of the Company
(ii) Directly or indirectly, a transfer, sale, lease or other
disposition of all or substantially all of the assets of the Company and its
subsidiaries taken as a whole to any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act, whether or not such sections
are applicable), excluding any disposition to or among the Company and/or one or
more of its subsidiaries; or
(iii) Any "person" or "group" (as such terms are used under
Sections 13(d) and 14(d) of the Exchange Act, whether or not such sections are
applicable) otherwise obtains the right or power (through any arrangement,
contract, proxy or other means) to elect or designate a majority of the members
of the Board of Directors of the Company then in office, without regard to
whether such right or power is exercised or invoked and without taking into
account the necessity of a special or annual stockholders meeting or the taking
of other procedural actions to exercise or invoke such
right or power.
12. Insurance. Xxxxxxxx agrees that the Company, at its sole
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expense, may procure insurance on the life of Xxxxxxxx, in such amounts as the
Company may in its discretion determine, and with the Company named as the
beneficiary under the policy or policies. Xxxxxxxx agrees that upon request from
the Company he will submit to a physical examination and will execute such
applications and other documents as may be required for the procurement of such
insurance.
13. Non-Competition: Solicitation, (a) Xxxxxxxx agrees that during
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his employment with the Company he shall not, without the written consent of the
Company, directly or indirectly, either individually or as an employee, agent,
partner, shareholder, consultant, option holder, lender of money, guarantor or
in any other capacity, participate in, engage in or have a financial interest or
management position or other interest in any business, firm, corporation or
other
entity within the State of Florida if it competes directly with any business
operation conducted by the Company or its subsidiaries or affiliates or any
successor or assign thereof, nor will he solicit any other person to engage in
any of the foregoing activities. Participation in the management of any business
operation other than in
connection with the management of a business operation which is in direct
competition with the Company or its subsidiaries or affiliates or any successor
or assign thereof shall not be deemed to be a breach of this Section 13(a). The
foregoing provisions of this Section 13(a) shall not prohibit the ownership by
Xxxxxxxx (as the result of open market purchase) of 5% or less of any class of
capital stock of a corporation which is regularly traded on a national
securities exchange or over-the-counter on the NASDAQ System.
(b) Xxxxxxxx will not, without the written consent of the Company, at
any time during his employment with the Company and for a period of one year
after Xxxxxxxx leaves the Company's employ for any reason, solicit (or assist or
encourage the solicitation of) any employee of the Company or any of its
subsidiaries or affiliates to work for Xxxxxxxx or for any business, firm,
corporation or other entity in which Xxxxxxxx, directly or indirectly, in any
capacity described in Section 13 (a) hereof, participates or engages (or expects
to participate or engage) or has (or expects to have) a financial interest or
management position, except that this provision shall not affect Xxxxxxxx'x
right, after the termination of his employment for any reason, to solicit those
employees of the Company or its subsidiaries or affiliates with whom Xxxxxxxx
has had a business or personal association prior to the
original commencement of Xxxxxxxx'x employment by the Company, to become
associated with or work for an entity with which Xxxxxxxx is then associated or
working with, in compliance with the non-compete provisions of Section 13
(a) (e.g., for an employer not within the State of Florida).
(c) If any of the covenants contained in this Section 13 or any part
thereof is held by a court of competent jurisdiction to be unenforceable because
of the duration of such provision, the activity limited by or the
subject of such provision and/or the area covered thereby, then the court making
such determination shall construe such restriction so as to thereafter be
limited or reduced to be enforceable to the greatest extent permissible by
applicable law.
14. Inventions, Etc. Xxxxxxxx agrees that any and all systems, work-
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in- progress, inventions, discoveries, improvements, compounds, formulae,
patents, copyrights and trademarks, made or developed by him, solely or jointly
with others, or otherwise, during the term of his employment by the Company, and
which may be useful in or relate to any business of the Company and/or any
subsidiary or affiliate of the Company shall be fully disclosed by Xxxxxxxx to
the Chief Executive Officer of the Company, and shall be the sole and absolute
property of the Company, and the Company will be the sole and absolute owner
thereof. Xxxxxxxx agrees that at all times, both during his employment and after
the termination of his employment, he will keep all of the same secret from
everyone except the Company and its duly authorized employees and will disclose
the same to no one except as required in good faith in the course of his
employment with the Company, or by law, or unless otherwise authorized in
writing by the Chief Executive Officer of the Company.
15. Patents. Xxxxxxxx agrees, at the request of the Company, to make
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application in due form for United States Letters Patent and foreign Letters
Patent on any of such systems, inventions, discoveries, improvements, compounds
and formulae referred to in Section 14 hereof, and to assign to the Company all
of his right, title and interest in and to said inventions,
discoveries, improvements, compounds, formulae and patent applications therefore
or patents thereon, and to execute at any and all times any and all instruments,
and to do any and all acts necessary, or which the Company may reasonably deem
appropriate, in connection with such applications for Letters Patent, in order
to establish and perfect in the Company the entire right, title and interest in
and to said systems, inventions, discoveries, improvements, compounds, formulae
and patent applications therefore, or in the conduct of any proceedings or
litigation in regard thereto. It is
understood and agreed that all costs and expenses, including but not limited to
reasonable attorneys' fees, incurred at the request of the Company in connection
with any action taken by Xxxxxxxx pursuant to this Section 15, shall be borne by
the Company.
16. Trade Secrets, Etc. Xxxxxxxx agrees that he shall not, during
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or after the termination of this Agreement, divulge, furnish or make accessible
to any person, firm, corporation or other business entity, any
confidential information, trade secrets, technical data or know-how relating to
the business, business practices, methods, products, equipment, client's prices
or other confidential or secret aspect of the business of the Company
and/or any subsidiary or affiliate, except as may be required in good faith in
the course of his employment with the Company or by law, without the prior
written consent of the Company, unless such information shall become public
knowledge (other than by reason of Xxxxxxxx'x breach of the provisions hereof).
17. Acceptance. Each of the Company and Xxxxxxxx accepts all of
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the terms and provisions of this Agreement and agrees to perform all of the
covenants to be performed hereunder.
18. Equitable Remedies. Xxxxxxxx acknowledges that he has been
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employed for his unique talents and that his leaving the employ of the Company
would seriously hamper the business of the Company and that the Company will
suffer irreparable damage if any provisions of Sections 13, 14, 15 or 16 hereof
are not performed strictly in accordance with their terms or are otherwise
breached. Xxxxxxxx hereby expressly agrees that the Company shall be entitled as
a matter of right to injunctive or other equitable relief, in addition to all
other remedies permitted by law, to prevent a breach or violation by Xxxxxxxx
and to secure enforcement of the provisions of Sections 13, 14, 15 or 16 hereof.
Resort to such equitable relief, however, shall not constitute a waiver or any
other rights or remedies that the Company may have.
19. Indemnification. Xxxxxxxx shall be entitled to the fullest
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extent permitted by law to the benefit of indemnification of the assertion
against Xxxxxxxx of any liability, damages, losses or expenses, including
reasonable attorneys' fees and costs, sustained by Xxxxxxxx arising out of his
performance of duties as an employee of the Company. This provision shall
survive termination of this Agreement. The Company shall add Xxxxxxxx as a
covered officer under any insurance policy (including Directors' and Officers'
insurance policies) that may be maintained by the Company covering the directors
and officers of the Company acting in their capacity as such.
The Company will use its reasonable efforts to maintain such coverage for a
period of at least two years after the termination of this Agreement.
20. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties hereto and there are no other terms other than
those contained herein. No variation hereof shall be deemed valid unless in
writing and signed by the parties hereto and no discharge of the terms hereof
shall be deemed valid unless by full performance of the parties hereto or by a
writing signed by the parties hereto. No waiver by the Company or Xxxxxxxx of
any
breach by the other party of any provision or condition of this Agreement shall
be deemed a waiver of a breach of a similar or dissimilar provision or condition
at the same time or any prior or subsequent time. This Agreement supersedes and
controls over all previous agreements between the Company and Xxxxxxxx regarding
his employment by the Company.
21. Severability. In case any provision in this Agreement shall be
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declared invalid, illegal or unenforceable by any court of competent
jurisdiction, the validity and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
22. Notices. All notices, requests, demands and other
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communications provided for by this Agreement shall be in writing and shall be
deemed to have been given at the time when mailed in the United States
enclosed in a registered or certified post-paid envelope, return receipt
requested, and addressed to the addresses of the respective parties stated below
or to such changed addresses as such parties may fix by notice:
If to the Company:
Ursus Telecom Corporation
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
If to Xxxxxxxx:
Xxxxxxxx Xxxxxxxx
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provided, however, that any notice of change of address shall be effective only
upon receipt.
23. Successors and Assigns. This Agreement is personal in its nature
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and neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder
(except for an assignment or transfer by the Company to a successor as
contemplated by the following proviso); provided, however, that the provisions
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hereof shall inure to the benefit of, and be binding upon, any successor of the
Company, whether by merger, consolidation, transfer of all or substantially all
of the assets of the Company, or otherwise, and upon Xxxxxxxx, his heirs,
executors, administrators and legal representatives.
24. Governing Law. This Agreement and its validity, construction
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and performance shall be governed in all respects by the internal laws of the
State of Florida without giving effect to
any principles of conflict of laws. In any suit, action or proceeding arising
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out of or in connection with this Agreement, the prevailing party shall be
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entitled, as a part of the judgment therein, to an award of the reasonable
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attorneys' and other Professionals' fees and costs incurred in connection
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therewith.
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25. Headings. The headings in this Agreement are for convenience
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of reference only and shall not control or affect the meaning or construction of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
URSUS TELECOM CORPORATION
By:
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Name: Luca Giussani
Title: Chief Executive Officer
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Xxxxxxxx Xxxxxxxx
