EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made this 23RD day of April
1998 between COMMUNICATION TELESYSTEMS INTERNATIONAL, a California
Corporation, having its principal office at 0000 Xxxxxx Xxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, (hereinafter referred to as "CTS" or "Company") and
XXXXX XXXXXXX, of Titcheners, Xxxxxxxxxx, Xxxxxxx, Xxxxxx, XX0 0XX, Xxxxxxx
(hereinafter referred to as "Employee").
In consideration of the mutual promises of the parties hereto, and other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT: CTS hereby agrees to hire Employee as an employee of
CTS, commencing on May 1, 1998 (the "Commencement Date").
2. GENERAL DUTIES OF EMPLOYEE: Employee shall have the title of
President and Chief Operating Officer of CTS. Employee shall perform such
duties as requested by CTS and, upon request, serve on the Board of Directors
of CTS and/or its subsidiaries and affiliates. Employee may, at the sole
discretion of CTS, be assigned to work anywhere in the United States and/or
outside the United States and may be transferred between locations from time
to time on a permanent or temporary basis; provided however, Employee shall
be given at least thirty (30) days prior notice of a permanent transfer, and
provided further that Company shall reimburse Employee for reasonable moving
expenses in connection with all transfers. Notwithstanding any other
provision contained herein, for the duration of any period during which
Employee remains bound by the Employment Continuation Incentive Agreement
dated October 17, 1997 between Employee and ACC Long Distance UK ("ACC"),
Employee shall not have any direct or indirect duties or responsibilities in
connection with any operations of the Company, or its subsidiaries or
affiliates, in the United Kingdom.
3. CONDUCT OF EMPLOYEE: Employee shall use his best efforts to promote
the interests of CTS and shall refrain from any acts which may adversely
affect the reputation or business of CTS. Employee shall adhere to all laws
and ethical standards applicable to his conduct as an Employee for CTS, shall
abide by and observe all rules, regulations and policies of CTS presently in
effect and any amendments and additions thereto made from time to time and
shall perform in a manner consistent with generally accepted procedures for
his profession.
4. COMPENSATION: As Employee's sole and complete compensation, CTS will
pay to Employee, subject to the conditions and limitations set forth in this
Agreement and all applicable withholding requirements and authorized
deductions, the following compensation:
(a) SALARY: CTS shall pay Employee a salary of Three Hundred Fifty
Thousand Dollars ($350,000.00) per year.
(b) HEALTH INSURANCE: Employee shall participate in such medical
programs or plans that are generally available to employees of CTS.
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(c) VACATION: Employee shall receive twenty (20) days of paid
vacation per year.
(d) DUAL LIVING ALLOWANCE: Employee shall receive a dual living
allowance of Three Thousand Dollars ($3,000.00) per month during the first
six (6) months of his employment with CTS.
(e) TRAVEL REIMBURSEMENT: During each year of Employee's employment,
CTS will reimburse Employee for the reasonable equivalent value (on a
discounted fare/advance purchase basis) of four (4) round-trip business class
airline tickets between London and San Diego, for travel by Employee's spouse
or dependent children.
(f) BONUS PROGRAM: Company shall provide Employee with a bonus
program which provides Employee with the opportunity to earn up to $50,000 in
additional compensation during each year of his employment with the Company.
The terms of this bonus program, which shall be based upon achievement of
financial performance levels, shall be finalized within thirty (30) days
after the Commencement Date.
5. RECORDS TO REMAIN PROPERTY OF CTS: All records of CTS, and its
subsidiaries, all records pertaining or relating to clients of CTS and its
subsidiaries, and all records and documents prepared or generated by
Employee, CTS or any other person or entity in connection with the
performance of Employee under this Agreement, including but not limited to
account cards, invoice copies, customer lists, leads and all documents
containing the names or addresses of or information relating to clients who
have done business with CTS, or its subsidiaries are and shall remain the
property of CTS at all times during the term of Employee's employment with
CTS, and after termination of such employment for any reason. None of such
records, nor any part of them may be used by Employee either in original form
or in computerized, duplicated, or copied form except for the purpose of
conducting the business of CTS and the names, addresses, and other
information and data in such records are not to be transmitted verbally, in
writing, or in computerized form by Employee except in the ordinary course of
conducting business for CTS. All of said records or any part of them are the
sole proprietary information of CTS and shall be treated by Employee as
confidential information of CTS. In the event of the termination of
Employee's employment with CTS for any reason, Employee shall return to CTS
all such records and any copies or summaries thereof in computerized,
duplicated, copied or any other form.
6. LIMITATIONS ON EMPLOYEE'S USE OF PROPRIETARY INFORMATION: Employee
shall not at any time, or in any manner, directly or indirectly divulge,
disclose or communicate to any other person, firm or corporation, nor shall
Employee use for his own benefit other than in connection with the
performance of Employee's duties under this Agreement: (i) any of the names,
addresses, telephone numbers of or other data relating to clients of CTS,
prospective customers of CTS or persons, firms or corporations to whom
Employee may have provided services in his capacity as a representative of
CTS or to whom other representatives of CTS have provided such services at
any time; (ii) any of the records or documents referred to in Paragraph 5 of
this Agreement; or (iii) any other information acquired by Employee as a
consequence of his employment with CTS.
7. INVENTIONS: All improvements, discoveries, inventions, designs,
documents or other data related to the Company's business (whether or not
deemed patentable) conceived, developed, made, perfected, acquired, or first
reduced to practice, in whole or in part, during off-duty hours and away from
the Company's
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premises as well as in the regular course of employment by Employee during
development and research, of the Company or its subsidiaries and affiliates
shall be promptly disclosed to the Company, and Employee shall hereby assign
and transfer his right, interest and title thereto and such improvements,
discoveries, inventions, designs, documents, or other data shall become the
property of the Company. During the term of Employee's employment and anytime
thereafter, upon request of the Company. Employee will join and render
assistance in any proceedings, and execute any papers necessary to file and
prosecute applications for, and to acquire, maintain and enforce letters,
patent, trademarks, registrations and/or copyrights, both domestic and
foreign, with respect to such improvements, discoveries, inventions, designs,
documents, or other data as required for vesting title to same in the
Company. The requirement under this Agreement that Employee assign his rights
in inventions shall not apply to an invention that Employee developed
entirely on his own time without using the Company's equipment, supplies,
facilities, or trade secret information except for those inventions that
either: (i) relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably anticipated
research or development of the Company; or (ii) result from any work
performed by Employee for the Company.
8. CUSTOMER SOLICITATION: During the term or this Agreement, and for a
period of one (1) year after the termination of this Agreement for any
reason, Employee will not, for himself or on behalf of any other person,
firm, partnership or corporation, call upon or deal with any Customers of
CTS or its subsidiaries for the purpose of soliciting or providing to such
Customer any products or services which are the same as or substantially
similar to those provided to Customers by CTS or its subsidiaries. For the
purposes of this Agreement "Customer" shall mean those Customers with whom
Employee has dealt with in the course of the Company's or its subsidiaries
business at any time within twelve (12) months prior to termination of his
employment.
9. SOLICITATION OF OTHER EMPLOYEES: During the term of this Agreement,
and for a period of one (1) year after the termination of this Agreement for
any reason, Employee will not, directly or through another person or entity,
for himself or on behalf of any other person, firm, partnership, or
corporation, directly or indirectly, seek to persuade any director or officer
of the Company, or its subsidiaries, or any person employed in a managerial
or technical capacity or a sales representative or in a skilled supervisory
role to discontinue that individual's status or employment with the Company
or its subsidiaries.
10. COMPENSATION AFTER TERMINATION OF EMPLOYMENT: Except as otherwise
expressly provided in this Agreement or in any written option agreement or
plan. Employee shall have no further right to salary or any other
compensation after termination of Employee's employment with CTS,
irrespective of the time, manner or cause of such termination.
11. TERMINATION OF EMPLOYMENT:
(a) DEATH OR DISABILITY: Employee's employment shall terminate
automatically upon Employee's death. If the Company determines in good faith
that the Disability of Employee has occurred (pursuant to the definition of
Disability set forth below), it may give to Employee written notice of its
intention
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to terminate Employee's employment. In such event, Employee's employment with
the Company shall terminate effective on the 30th day after receipt of such
notice by Employee, provided that, within the 30 days after such receipt,
Employee shall not have returned to full-time performance of his duties. For
purposes of this Agreement, "Disability" shall mean a physical or mental
impairment which substantially limits a major life activity of Employee and
which renders Employee unable to perform the essential functions of his
position, even with reasonable accommodation which does not impose an undue
hardship on the Company. The Company reserves the right, in good faith, to
make the determination of disability under this Agreement based upon
information supplied by Employee and/or his medical personnel, as well as
information from medical personnel (or others) selected by the Company or its
insurers.
(b) CAUSE: The Company may terminate Employee's employment for
Cause. For purposes of this Agreement, "Cause" shall mean that the Company,
acting in good faith based upon the information then known to the Company,
determines that Employee has engaged in or committed wilful misconduct,
abandonment of employment or excessive absences, conflict of interest or
breach of fiduciary duty involving his responsibilities as an employee
involving intent for or obtainment of material personal or family profit,
sexual harassment, conviction of any criminal offense which constitutes a
felony under the laws of the United States or of any state, or a material
breach of this Agreement, or that a court or regulatory agency has issued an
order prohibiting Employee's continued employment with CTS or a final cease
and desist order.
(c) OTHER THAN CAUSE OR DEATH OR DISABILITY: The Company or
Employee may terminate Employee's employment at any time without cause upon
thirty (30) days' written notice to the other party.
(d) OBLIGATIONS OF THE COMPANY UPON TERMINATION:
(1) DEATH OR DISABILITY: If Employee's employment is
terminated by reason of Employee's Death or Disability, this Agreement shall
terminate without further obligations to Employee for his legal
representatives under this Agreement, other than for (a) payment of the sum
of (i) Employee's base salary through the date of termination to the extent
not theretofore paid and (ii) any compensation previously deferred by
Employee (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid (the
sum of the amounts described in clauses (i) and (ii) shall be hereinafter
referred to as the "Accrued Obligations"), which shall be paid to Employee or
his estate or beneficiary, as applicable, in a lump sum in cash within 30
days of the date of termination; and (b) payment to Employee or his estate or
beneficiary, as applicable, of any amounts due pursuant to the terms of any
applicable welfare benefit plans.
(2) CAUSE: If Employee's employment is terminated by the
Company for Cause, this Agreement shall terminate without further obligations
to Employee other than for the timely payment of Accrued Obligations. If it
is subsequently determined that the Company did not have Cause for
termination in any arbitration or other proceeding under this Agreement, then
the Company's termination shall be deemed to have been "without cause" under
Paragraph 11(e) and the amounts payable under Paragraph 11(d)(3) of this
Agreement for a termination other than for cause, death, or disability shall
be the only amounts Employee may receive for his termination.
(3) OTHER THAN FOR CAUSE OR DEATH OR DISABILITY: If the
Company terminates Employee's employment
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for other than Cause or Death or Disability, this Agreement shall terminate
without further obligations to Employee other than (a) the timely payment of
Accrued Obligations and (b) the continued payment to Employee of Employee's
compensation set forth in Paragraphs 4(a) through 4(c) of this Agreement
through and including the date which is the three hundred sixty-fifth (365th)
day after the Commencement Date.
(4) ORDER PROHIBITING EMPLOYEE'S EMPLOYMENT: It is the
intention and expectation of the Company and Employee that neither this
Agreement nor any action undertaken by Employee within the scope and course
of his employment with Company violates or constitutes, or will violate or
constitute, a breach by Employee of his employment agreements with ACC. In
the event, however, that a court issues an order prohibiting Employee's
continued employment with CTS on account of the ACC Employment Continuation
Incentive Agreement between Employee and ACC dated October 17, 1997, the
Company will continue to pay Employee the compensation set forth in paragraph
4(a) through 4(e) of this Agreement for the shorter of the following periods:
(i) the duration of the court order prohibiting Employee's continued
employment with CTS; (ii) six (6) months; or (iii) through and including the
date which is the three hundred sixty-fifth (365th) day after the
Commencement Date.
(5) EXCLUSIVE REMEDY: Employee agrees that the payments
contemplated by this Agreement shall constitute the exclusive and sole remedy
for any termination of his employment and Employee covenants not to assert or
pursue any other remedies, at law or in equity, with respect to any
termination of employment.
12. ASSIGNMENT: Neither this Agreement nor any other benefits to
accrue hereunder shall be assigned or transferred by Employee, either in
whole or in part (except a transfer effective upon the death of Employee of
any payments due hereunder), without the written consent of CTS, any any
purported assignment in violation hereof shall be void.
13. CHOICE OF LAW: This Agreement is executed and intended to be
performed in the State of California and the laws of the State of California
shall govern its interpretation and effect.
14. PARTIAL INVALIDITY: If any term, provision, covenant, or condition
of this Agreement is held by a Court of competent jurisdiction to be invalid,
void or unenforceable, the rest of this Agreement shall remain in full force
and effect and shall in no way be effected, impaired or invalidated. In the
event any provision contained in Paragraphs 5, 6, 7, 8, or 9 of this
Agreement should ever be deemed to exceed the law in any respect, then the
parties hereto agree that such provision shall be amended automatically to
provide CTS with the maximum protection permitted by law.
15. ENTIRE AGREEMENT: This Agreement contains the entire agreement
between the parties concerning the subject matter of this Agreement. It
supersedes all negotiations, statements, promises, or understandings, if any,
made prior to the execution of this Agreement. Any such negotiations,
promises or understandings shall not be used to interpret or constitute this
Agreement.
16. GENDER: As used in this Agreement, the masculine, feminine or
neuter gender, and the singular or plural number, shall each be deemed to
include the others whenever the context so indicates.
17. OUTSIDE EMPLOYMENT: During the term of Employee's employment with
CTS, Employee shall not engage in any other employment or outside business
activity without the prior written consent of CTS.
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This provision shall not prohibit passive investments by employee.
18. VENUE: The venue of any civil action, arbitration or other legal
proceeding between Employee, on one hand, and CTS and/or its officers,
directors and employees, on the other hand, arising out of or relating to
this Agreement, the employment of Employee by CTS, the termination of
Employee's employment with CTS, or any other dealings between Employee and
CTS, lies only in San Diego, California, and Employee and CTS waive any right
they may have under any statute or law to cause such action or proceeding to
be transferred to any other venue.
19. AMENDMENT OR WAIVER: The terms of this Agreement may be amended,
modified or eliminated, or the observance or performance of any term,
covenant or provision herein may be omitted or waived (either generally or in
a particular instance, and either prospectively or retroactively) only by a
writing signed by Employee and CTS. The waiver by CTS of any breach by
Employee of any term or provision of this Agreement shall not be construed as
a waiver of any subsequent breach.
20. SURVIVAL OF PROVISIONS: The provisions contained in Paragraphs 5,
6, 7, 8, 9, 18 and 24 of this Agreement, and the other provisions hereof to
the extent applicable, shall survive the termination of Employee's employment
with CTS.
21. INUREMENT: This Agreement shall be binding upon and inure to the
benefit of all heirs, assigns (to the extent permitted) and successors in
interest of the parties hereto.
22. HEADLINES AND CONSTRUCTION: Both parties have cooperated in the
drafting of this Agreement, which shall not be construed against either
party. The titles and headlines herein are for convenience only and shall not
be used to interpret this Agreement.
23. EFFECTIVE DATE: This Agreement shall be effective as of the date
written on the first page hereof.
24. ARBITRATION: Any claim or controversy arising out of or relating
to this Agreement or any dealings between Employee, on one hand, and CTS
and/or CTS' officers, directors, employees or agents, on the other hand,
shall be settled before J.A.M.S./ENDISPUTE ("JAMS") in accordance with the
then obtaining Comprehensive Arbitration Rules and Procedures of JAMS, as
modified herein. The arbitrator may not limit, expand or otherwise modify the
terms of this Agreement. The award in such arbitration proceeding may be
entered in any Court of competent jurisdiction specified in Paragraph 18 of
this Agreement.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK]
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IT IS SO AGREED:
THIS IS A BINDING LEGAL AGREEMENT WHICH SETS FORTH THE TERMS
AND CONDITIONS OF YOUR EMPLOYMENT, INCLUDING COMPENSATION
MATTERS. READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT.
THIS AGREEMENT ALSO CONTAINS AN ARBITRATION AGREEMENT, WHICH
YOU SHOULD STUDY CAREFULLY. ARBITRATION IS GENERALLY FINAL AND
BINDING ON THE PARTIES. BY AGREEING TO ARBITRATION, YOU ARE
WAIVING YOUR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE
RIGHT TO A JURY TRIAL. PRE-ARBITRATION DISCOVERY IS GENERALLY
MORE LIMITED AND DIFFERENT FROM COURT PROCEEDINGS.
ADDITIONALLY, THE ARBITRATORS' AWARD IS NOT REQUIRED TO
INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY'S
RIGHT TO APPEAL OR SEEK MODIFICATION OF RULINGS BY THE
ARBITRATORS IS STRICTLY LIMITED.
EMPLOYEE:
/s/ Xxxxx Xxxxxxx
------------------------------
(Signature)
XXXXX XXXXXXX
------------------------------
(PRINT NAME)
CTS:
Communication TeleSystems International
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Its:
-------------------------
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