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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into by and between,
TeleHub Communications Corporation, a Nevada corporation, with offices at 0000
Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000 and 0000 Xxx-Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "EMPLOYER"), and Xxxxxxx X.
Xxxxxx, an individual residing at 000 Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000
("EXECUTIVE"). This Agreement is executed on the date last written at the
signature blocks below and supercedes the employment agreement entered into by
the parties dated as of January 2, 1997. The effective date of this Agreement is
May 4, 1998 ( "EFFECTIVE DATE ").
R E C I T A L S
WHEREAS, Employer desires to hire and employ Executive.
WHEREAS, Executive desires to become an employee of Employer;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT. Employer, its subsidiaries and Affiliates (collectively, the
"COMPANY") agree to employ Executive, and Executive hereby agrees to be employed
by the Company on a full-time basis. For the purpose of this Agreement, the term
"AFFILIATE" means a person, firm or corporation that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control of Employer. Executive represents and warrants that the execution
of this Agreement and his performance under this Agreement does not breach any
other agreement and does not require the consent of any other person.
2. DUTIES. Executive shall perform the duties as assigned by the Company from
time to time and shall serve the Company faithfully and to the best of
Executive's ability. The Executive will hold, without additional compensation,
such other positions for the Company to which Executive may be appointed or
elected from time to time. In its sole discretion the Company may, from time to
time, change Executive's title or responsibility. Executive's conduct must
promote the best interests of the Company and must not discredit the Company,
its products or services.
3. EXCLUSIVITY. Executive shall devote substantially his full business time,
efforts, attention, skill and energy to the Company's business. Executive shall
disclose all other business activities to the Company and Executive shall not
engage in any other business activity that requires significant personal
services by Executive. After notifying the Company, Executive may take
reasonable personal time for:
3.1. personal investments that do not require significant services by
Executive;
3.2. participation in volunteer or charitable activities;
3.3. participation in industry-related organizations;
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3.4. with prior Board approval, serving as a Director for other companies;
and
3.5. activities approved in advance by the Board;
except that Executive shall cease any such outside activity if the Company
determines that such activity will interfere or conflict with the Company's
interests.
4. CONFLICTS OF INTEREST. Executive shall not engage in any activity that, in
the Company's judgment, may interfere or conflict with the proper performance of
Executive's duties or the Company's interest. If Executive has any interest in a
proposed transaction involving the Company, that interest must be fully
disclosed to the Company and the Company must approve of the transaction.
5. INVENTIONS AND CONFIDENTIALITY. Executive acknowledges that TeleHub is in
a unique, world-wide business and has expended significant amounts to develop
its proprietary products and services and, by reason of Executive's position
with the Company, Executive will have access to Confidential Information,
proprietary information and other intellectual property of the Company. As a
condition to the Executive's employment with the Company, the Executive agrees
to and has executed and delivered to the Company, the Invention Assignment and
Confidentiality Covenant ("COVENANT"), the terms of which are hereby
incorporated into and made part of this Agreement. Executive agrees that the
restrictions contained in the Covenant are fair, reasonable and necessary.
6. COMPENSATION AND BENEFITS. In consideration of the services to be rendered
pursuant to this Agreement, Executive shall receive the following compensation
and benefits during the term of his employment:
6.1. Salary. The Company shall pay Executive an annual base salary,
payable semimonthly in arrears. The annual base salary during the term hereof
shall be $165,000.00 ("SALARY").
6.2. Bonus. The Company will pay Executive an incentive bonus up to fifty
percent (50%) of Executive's base Salary per year ("BONUS") based upon
Executive's accomplishments of objectives that are mutually defined and agreed
upon between, and documented by, Executive and the Company. The Company shall
pay Executive's Bonus ninety (90) calendar days after the close of the Company's
fiscal year. The Company's Board of Directors, with the advice of Executive's
supervisor, shall annually review the amounts of Executive's base Salary and
Bonus.
6.3. Benefits. The Company may provide Executive with such insurance
plans, hospitalization plans, retirement plans and other executive benefits that
are generally provided to executive employees of the Company and for which
Executive is eligible under the terms and conditions thereof.
6.4. Reimbursement of Expenses. Upon receipt of an itemized accounting of
such expenses with acceptable supporting documentation, the Company shall
promptly reimburse Executive for all reasonable and necessary out-of-pocket
expenses incurred by Executive in connection with the business of the Company
and in performance of Executive's duties under this Agreement in accordance with
Company policy.
6.5. Car Allowance. The Company shall pay Executive a car allowance of
$450.00 per month, in addition to Executive's other compensation.
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7. DURATION. Executive's employment shall commence on the Effective Date and
continue until terminated in accordance with Section 8. The initial term of
Executive's employment shall be four (4) years ("INITIAL TERM"), and shall be
automatically renewed for additional terms of one (1) year unless earlier
terminated pursuant to the terms of this Agreement. After termination of
Executive's employment, the applicable provisions of Sections 5 and 8 shall
remain in full force and effect until the time specified in each such section.
8. TERMINATION. Executive's employment may be terminated as follows:
8.1. Expiration of Term. Upon written notice by either party delivered at
least thirty (30) calendar days before the expiration of the Initial Term or
renewal term (collectively, "TERM"), Executive's employment will terminate at
the expiration of the then current Term.
8.2. Death. If Executive dies during the Term of his employment, the
Company shall pay his estate the compensation that would otherwise be payable to
him for the month in which his death occurs, and his employment shall be deemed
terminated on the last day of such month.
8.3. Cause. The Company may immediately terminate Executive's employment
at any time for:
8.3.1. non-performance or gross negligent performance by Executive
of any material duties which continues after fifteen (15)
calendar days' written notice specifying such non-performance
or gross negligent performance; or
8.3.2. the commission of any theft, fraud, embezzlement or similar
crime involving the commission of any felony; for acts of
dishonesty or moral turpitude; for violation of Company
policy or applicable local, state or federal laws or
regulations, including anti-discrimination laws or securities
laws; or for violation of other laws which causes material
economic damage to the Company or material damage to the
business reputation of the Company; or for a material breach
of any provision of this Agreement.
8.4. Demotion. The Executive may terminate Executive's employment with
the Company upon thirty (30) calendar days' written notice if the Company
assigns the Executive to a position of lower responsibility and Executive
rejects such assignment.
8.5. Discretion. Either party, in its sole discretion, may terminate
Executive's employment at any time upon thirty (30) calendar days' prior written
notice.
8.6. Change of Control. Either party may terminate Executive's employment
upon at least thirty (30) calendar days' written notice upon the occurrence of
any of the following events:
8.6.1. sale by the Company of substantially all of its assets to a
single purchaser or associated group of purchasers who are not
Affiliates of the Company;
8.6.2. sale, exchange or other disposition in one transaction of 35 %
or more of the outstanding voting stock of the Company to
persons, firms or corporations who are not Affiliates of the
Company;
8.6.3. merger or consolidation of the Company in a transaction not
involving an
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Affiliate of the Company in which the shareholders of the
Company receive less than 50 % of the outstanding voting stock
of the new continuing corporation or successor entity;
8.6.4. a bona fide decision by the Company to terminate its business
and liquidate its assets (but only if such liquidation is not
part of a plan to carry on the Company's business through its
shareholders).
8.7. Severance. If Executive's employment is terminated pursuant to
Subsection 8.4 or 8.6 hereof, or the Company terminates Executive's employment
pursuant to Subsection 8.5 hereof, the Company shall pay Executive a Termination
Fee equal to one-hundred percent (100%) of Executive's annual Salary, plus
Benefits, plus the Bonus specified in Section 6.2 hereof; if Executive's
employment is terminated during the first year of employment, the Bonus will be
fifty percent (50%) of Executive's annual Salary pro-rated for the portion of
the year served; otherwise the Bonus will be the amount of the previous year's
Bonus pro rated for the portion of the year served. Such Bonus shall be paid
within ninety (90) calendar days of Executive's termination. Payments to be made
pursuant to this paragraph shall only be made upon Executive's execution of a
standard release waiving all claims against the Company.
9. SECURITIES MATTERS. Since the Executive will have access to Confidential
Information. Executive's ability to engage in securities transactions (including
securities issued by the Company and by others) will be limited. Executive
agrees to:
9.1. not engage in any transactions that intentionally or knowingly
violate federal and state securities laws;
9.2. file all reports required by securities regulatory authorities;
9.3. provide information about securities transactions when requested by
the Company;
9.4. follow written Company policies concerning securities transactions;
9.5. execute any "lock-up" agreements or other restrictions on
transactions, which are fully consistent with requests of other
Executives, when requested by the Company; and
9.6. comply with securities law requirements for all transactions.
While Executive may request the Company's permission to engage in proposed
securities transactions, Executive is still responsible for compliance with
applicable legal requirements.
10. INJUNCTIVE RELIEF. Upon a material breach or threatened material breach by
Executive of any of the provisions of Sections 3, 4, 5 and 9 of this Agreement,
or any term of the Covenant, the Company shall be entitled to institute and
prosecute proceedings in any court of competent jurisdiction either in law or in
equity to obtain the specific performance thereof by Executive or to enjoin
Executive from violating the provisions hereof. Pending the outcome of any such
litigation, Company shall be entitled to obtain injunctive or other relief,
without bond. If the Company takes such legal action, the prevailing party, as
part of its damages, shall be entitled to recover its legal fees and expenses
incurred in such action from the other party.
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11. SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any provision of this Agreement shall be
adjudicated to be invalid or unenforceable, then the remaining provisions will
continue in full force and effect.
12. NOTICES. All communications, requests, consents and other notices under
this Agreement shall be given in writing and delivered by courier, registered or
certified mail (postage prepaid), return receipt requested, and shall be
effective upon delivery. Notices to the Company shall be delivered to the
attention of the General Counsel at TeleHub's Walnut Creek address written
above, and Notices to Executive shall be delivered to the Executive's address
written above.
13. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
California law, irrespective of choices of law principles. The parties agree
that any action brought pursuant to the terms of this Agreement shall be brought
in, and the parties hereby submit exclusively to, the personal jurisdiction and
venue of the state and federal courts in or presiding over Walnut Creek,
California.
14. ASSIGNMENT. The Company may assign its rights and obligations under this
Agreement to any successor corporation or to any acquirer of substantially all
of the business of the Company, and all covenants and agreements hereunder shall
inure to the benefit of and be enforceable by or against any such assignee.
Neither this Agreement nor any rights or duties hereunder may be assigned or
delegated by Executive.
15. NO WAIVER. A waiver by either party of any breach of this Agreement shall
not be a waiver for any preceding or succeeding breach. A waiver by either party
of any right under this Agreement shall not be construed as a waiver of any
other right.
16. AMENDMENTS. No provision of this Agreement shall be altered, amended,
revoked or waived, except by an instrument in writing, signed by the Company and
Executive.
17. BINDING EFFECT. Except as otherwise provided herein, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs, successors and assigns.
18. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. ENTIRE AGREEMENT. This Agreement together with the Invention Assignment
and Confidentiality Covenant set forth the entire agreement and understanding of
the parties related to the subject matter of this Agreement and supersede all
prior and contemporaneous understandings, agreements or representations by or
between the parties, whether written or oral.
20. DISPUTES. Other than an action brought under Section 10, which may be
brought directly
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in any court of competent jurisdiction, any dispute or controversy arising
under, out of, in connection with or in relation to this Agreement or the
employment of Xxxxxxx X. Xxxxxx and the Company or the termination of employment
of Xxxxxxx X. Xxxxxx with the Company, including any claims under Tide VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans With Disabilities Act, the Family and Medical Leave Act, and any ocher
federal, state or local statute, regulation or ordinance perching to employment,
shall be finally determined and settled by arbitration. Arbitration shall be
initiated by one party making written demand upon the other party and
simultaneously filing the demand together with required fees in the office of
the American Arbitration Association in Walnut Creek, California. The
arbitration proceeding shall be conducted in Walnut Creek, California by a
single arbitrator in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, except as otherwise
provided herein. Discovery shall be permitted to the extent ordered by the
arbitrator in compliance with and pursuant to the Employment Dispute Resolution
Rules of the American Arbitration Association. The arbitration award shall be a
final and binding determination of the dispute and shall be fully enforceable as
an arbitration award in any court having jurisdiction and venue over such
parties. The prevailing party (as determined by the arbitrator) shall be awarded
by the arbitrator such party's attorneys' fees, costs and expenses in connection
with such proceeding, in addition to any other relief that may be granted.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the "EFFECTIVE DATE" as stated above.
COMPANY: TeleHub Communications Corporation,
a Nevada corporation
Date: 5/4/98 Date: 5/4/98
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By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President & CEO Xxxxxxx X. Xxxxxx
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AMENDMENT TO EMPLOYMENT AGREEMENT
The EMPLOYMENT AGREEMENT ("Agreement") entered into by and between TELEHUB
COMMUNICATIONS CORPORATION, a Nevada corporation, with offices at 0000 Xxxx
Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000 and 0000 Xxx-Xxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Employer"), and XXXXXXX X. XXXXXX, an
individual residing 000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000
("Executive"), is hereby amended as of May 4, 1998 ("Effective Date").
R E C I T A L S
WHEREAS, Employer and Executive entered into an Employment Agreement dated
May 4, 1998 ("May 4 Employment Agreement") which provided for the employment of
Executive;
WHEREAS, Employer and Executive desire to amend the Employment Agreement to
add additional provisions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the parties agree as follows:
1. The compensation and benefits provision of the May 4 Employment
Agreement dated May 4, l998 is amended to add Section 6.6, 6.7 and 6.8 as
follows:
6.6. Stock Options. The Company has created stock option plans for
directors, officers and employees. Executive will be eligible to
receive stock options in accordance with the terms of such plans.
6.7. Mortgage. The Company agrees to loan up to Four Hundred
Thousand Dollars ($400,000.00) for the purchase of a home in
Illinois. The loan will be for a period of seven (7) years, and will
be secured by a deed of trust on Executive's home. Interest will
accrue on the loan for the first three years. Therefore, principal
and interest will be amortized monthly starting the fourth year from
the date of execution of the loan with the balance due at the end of
the seventh year from the date of execution of the loan.
6.8. Club Membership. The Company shall pay reasonable initial
membership fee not to exceed Fifty Thousand Dollars U.S. (U.S.
$50,000.00) for Executive in a club of Executive's.
AMENDMENT TO EMPLOYMENT AGREEMENT
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2. The Agreement is amended to add Section 21 as follows:
21. COVENANT NOT TO COMPETE. Since Executive will be a key employee
of the Company, Executive shall have access to Confidential
Information, and the national scope of the Company's proposed business,
Employee agrees that the restrictions on his future activities
contained in this Section are fair, reasonable and necessary.
21.1. Covenant Period. The covenants contained in this Section
shall continue until one year after the later of:
21.1.1. termination of Executive's employment;
21.1.2. the Company receives revenue from wholesale long
distance services;
21.1.3. the Company receives revenue from Open Access Mediation
Services; or
21.1.4. the Company becomes subject to the reporting
requirements of sections 12 or 15(d) of the federal
Securities Exchange Act of 1934.
(the "Covenant Period"). Subsections 21.1.2, 21.1.3, and 21.1.4 do
not apply if they have not occurred within one year after termination
of Executive's employment.
21.2. Restrictions on Future Employment. Until the Covenant Period
expires, Executive shall not, directly or indirectly, own, manage,
operate, control, be employed by, assist or participate in the
ownership, management, operation or control of a business operating
in the United States that is engaged in the following activities:
21.2.1. the provision of management, billing and control
services using Advanced Intelligent Network
technologies;
21.2.2. the provision of wholesale long distance services using
Asynchronous Transfer Mode techniques: or
21.2.3. the provision of Open Access Mediation Services.
This restriction applies whether or not the Company is authorized to
provide and actually provides such services during of Executive's
employment by the Company
21.3. Non-solicitation. Executive shall not directly or indirectly:
21.3.1 induce any employee of the Company to leave the employ
of the Company;
21.3.2. interfere with the relationship between the Company and
any employee;
AMENDMENT TO EMPLOYMENT AGREEMENT
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21.3.3. hire any Company employee to work for any organization
of which Executive is an officer, director, employee,
consultant, independent contractor or owner of an equity
or other financial interest; or
21.3.4. solicit or service any actual or prospective supplier,
client, customer of the Company who was solicited or
serviced during Executive's employment;
21.3.5. interfere or attempt to interfere with any transaction
involving the Company;
until the Covenant Period expires.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY: TELEHUB COMMUNICATIONS CORPORATION,
a Nevada corporation
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Chief Executive Officer
EXECUTIVE: /s/ XXXXXXX X. XXXXXX
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XXXXXXX X. XXXXXX
AMENDMENT TO EMPLOYMENT AGREEMENT
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