Exhibit 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT made as of the ___ day of January, 1997
by and between US WATS, INC., a New York corporation, with offices at 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 (the
"Company"), and Xxxx Xxxxxx, residing at 00000 Xxxxxxxxx Xxxx,
Xxxxxxxxxxxx, XX 00000 (the "Executive").
W I T N E S E T H
WHEREAS, the Company desires to employ the Executive, and the
Executive is willing to be employed by the Company, upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
Employment.
The Company agrees to and does hereby employ the Executive, and the
Executive agrees to and does hereby accept employment by the Company,
subject to the terms and conditions herein set forth.
This Agreement shall be effective only if executed and delivered by
all parties hereto on or before January 31, 1997.
Term. The term of the Executive's employment hereunder shall commence
on the date hereof (the "Effective Date") and shall terminate three (3)
years thereafter (such period hereinafter referred to as the "Term").
Duties. During the Term, the Executive shall be employed as Chief
Operating Officer of the Company and any successors thereto or to its
business, and shall be in charge of and responsible for the general and
supervisory duties normally and customarily attendant to such office and
shall render such other lawful services, and exercise such powers, which
are from time to time requested of him, assigned to him or vested in him by
the Chief Executive Officer of the Company and which are commensurate with
his position as Chief Operating Officer.
The Executive agrees that, during the Term, unless the Chief
Executive Officer of the Company shall otherwise consent, he will devote
such amount of his time, energies, labor and skills to the business of the
Company and to the duties and responsibilities specified in Section 3.1 as
shall be reasonably necessary.
Base Compensation. In consideration for services performed hereunder,
the Company shall pay to the Executive an annual base salary of $162,000 in
installments payable in accordance with the Company's customary payroll
practices, but in no event less than one time per month. On each
anniversary of the Effective Date of this Agreement, the Executive's base
salary shall be increased, at a minimum, by an amount equal to the base
salary then in effect multiplied by the percentage increase in the consumer
price index from the preceding year. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by him in
connection with the performance of his duties hereunder and the business of
the Company upon the submission to the Company of appropriate receipts
therefor.
Benefits and Cash Bonus. Throughout the Term, the Executive shall be
eligible to participate in any pension, profit-sharing, stock option or
similar plan or program of the Company now existing or established
hereafter for the benefit of its employees generally, to the extent that he
is eligible under the general provisions thereof. The Executive shall also
be entitled to participate in any group insurance, hospitalization,
medical, health and accident, disability or similar or nonsimilar plan or
program of the Company now existing or established hereafter for the
benefit of its employees or executives generally, to the extent that he is
eligible under the general provisions thereof.
The Company shall provide the Executive with a policy of term
life insurance in an amount equal to not less than two (2) times his yearly
salary hereunder, payable to such beneficiary or such beneficiaries as
shall be designated in writing by the Executive.
The Executive shall participate in the Company's profit sharing
bonus pool (the "Bonus Pool") to be implemented by the Compensation
Committee. The Compensation Committee shall determine, in its discretion,
which eligible participants in the Bonus Pool shall be entitled to bonus
payments thereunder.
The Company shall provide Executive an automobile allowance of
$600 per month to cover Executive's use of his vehicle for business
purposes.
Stock Option Grant. Contemporaneously with the execution hereof, the
Company is granting to the Executive option to purchase an aggregate of up
to 350,000 shares of Common Stock of the Company (the "Option"). Under the
Option, 170,000 shares shall be immediately vested, and 60,000 shares shall
be vested on the first, second and third successive anniversaries of the
date of grant.
Termination of Executive's Employment. Notwithstanding any provisions
contained herein to the contrary, the Executive's employment may be
terminated by the Company upon the Executive's death or disability (as
defined below); or for Cause (as defined below); or upon a Change in
Control (as defined below).
For purposes of this Agreement, "disability" shall mean the
Executive is mentally or physically disabled from properly and fully
performing his duties and responsibilities hereunder for a period of 120
consecutive days or for 180 days, even though not consecutive, within a
360-day period, all as evidenced by the written certification of a
qualified medical doctor agreed to by the Company and the Executive or, in
the absence of such agreement, by a doctor selected by the agreement of a
qualified medical doctor selected by each of the Company and the Executive.
For purposes of this Agreement, "Cause" shall mean: (i) the
conviction of the Executive of a felony by a federal or state court of
competent jurisdiction; (ii) gross misconduct relating to the Company;
(iii) intentional misappropriation of funds; or (iv) deliberate and
premeditated acts against the interest of the Company. In the case of any
of the foregoing, the Company shall have the right, following notice and a
reasonable opportunity to cure of not less than sixty (60) days (except in
the case of clauses (i) and (iii) hereunder), to terminate this Agreement
without further obligation to the Executive.
In the event that the Executive's employment hereunder is
terminated as a result of death, disability or for Cause by the Company,
then the Company shall have no further obligations or liabilities to the
Executive hereunder, such that all benefits and salary provided for within
this Agreement shall terminate simultaneously with the termination of the
Executive's employment except for benefits and salary earned and accrued
through the date of such termination. Nothing in this Section 7.4 shall
supersede any rights of the Executive to receive any amounts or benefits
otherwise due to him upon the occurrence of any of the events described in
the immediately preceding sentence, whether such rights are created by this
Agreement or otherwise.
In the event that the Executive's employment hereunder is
terminated for reasons other than Cause, then the Company shall be
obligated to pay the Executive an amount equal to the balance of the
Executive's base salary which would have been earned for the remainder of
the Term.
Covenants of the Executive.
Confidentiality. The Executive acknowledges that his employment
by the Company will throughout his employment bring him into close contact
with many confidential affairs of the Company, including information about
costs, profits, markets, sales, key personnel, pricing policies,
operational methods, and other business affairs, methods and information,
including plans for future developments, not readily available to the
public. The Executive further acknowledges that the services to be
performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in
all of the states of the United States. In recognition of the foregoing,
the Executive covenants and agrees that: (i) he will not knowingly divulge
any material confidential matters of the Company which are not otherwise in
the public domain and will not intentionally disclose them to anyone
outside of the Company during his employment by the Company hereunder or
following the expiration or termination of his employment with the Company
for any reason; (ii) he will deliver promptly to the Company at the end of
Term, or at any other time the Company may so request, at the Company's
expense, all memoranda, notes, records, reports and other documents (and
all copies thereof) relating to the businesses of the Company which he
obtained while employed by, or otherwise serving or acting on behalf of,
the Company, or any its subsidiaries or affiliates, and which he may then
possess or have under his control; and (iii) during the Term and any
additional period during which the Executive may be employed by the Company
(whether or not such employment shall be pursuant to written agreement) the
Executive will not, unless the Board shall otherwise consent, along or
together with any other person, firm, partnership, corporation or other
entity whatsoever (except any subsidiaries or affiliates of the Company),
directly or indirectly, whether as an officer, director, stockholder,
partner, proprietor, associate, employee, representative, public relations
or advertising representative, management consultant or otherwise: (A)
engage in or (B) become or be interested in or associated with any other
person, corporation, firm, partnership or other entity whatsoever engaged
in any business which is competitive with any business conducted or
contemplated by the Company.
Anti-Raiding. Executive agrees that during the term of his
employment hereunder, and, thereafter for a period of six (6) months, he
will not, as a principal, agent, employee, employer, consultant, director
or partner of any person, firm, corporation or business entity other than
the Company, or in any individual or representative capacity whatsoever,
directly or indirectly, without the prior express written consent of the
Company approach, counsel or attempt to induce any person who is then in
the employ of the Company to leave the employ of the Company or employ or
attempt to employ any such person or persons who at any time during the
preceding six months was in the employ of the Company.
Notwithstanding the provisions of Section 8.1 (iii), the
Executive may own, as passive investor, securities of a corporation engaged
in a competitive line of business whose equity securities are registered
under Section 12(b) or 12(g) of the Exchange Act, so long as his beneficial
ownership in any one such corporation shall not in the aggregate constitute
more than five percent (5%) of any class of equity securities of such
corporation.
The parties agree that the remedy at law for any breach or
threatened breach of any covenant contained in this Section 8 will be
inadequate and that either party, in addition to such other remedies as may
be available to it, and/or them, at law or in equity, shall be entitled to
injunctive relief without bond or other security.
Change in Control. A "Change in Control" of the Company shall mean a
change in control of the Company or any entity controlling the Company
(referred to collectively in this Section 8 as the Company) of a nature
that would be required to be reported in response to Item 1 of a Current
Report on Form 8-K, pursuant to Section 13 or 15(d) of the Exchange Act;
provided that, without limitation such a Change in Control shall be deemed
to have occurred at such time as (a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than a person who or
which is a shareholder of the Company, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or more
of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of directors; or (b)
individuals who constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election or
nomination for election by the Company's shareholders was approved by a
vote of at least three quarters of the directors comprising the Incumbent
Board, shall be, for purposes of this clause (b), considered as though he
were a member of the Incumbent Board; or (c) a sale by the Company of all
or substantially all of its assets occurs. Notwithstanding anything in the
foregoing to the contrary, no Change in Control shall be deemed to have
occurred for purposes of this Agreement by virtue of any transactions which
result in the acquisition by the Executive, or by a group of persons which
includes the Executive, directly or indirectly, of a majority of either the
outstanding shares of common stock of the Company or the voting securities
of any corporation which acquires all or substantially all of the assets of
the Company, whether by way of merger, consolidation, sale of such assets
or otherwise. Notwithstanding anything contained in this Agreement to the
contrary, if, while the Executive is employed by the Company, a Change in
Control shall occur, with or without the prior approval of the Board, and
Executive's employment hereunder shall be terminated, then the Company
shall be obligated to pay the Executive an amount equal to the balance of
the Executive's base salary which would have been earned for the remainder
of the Term. In the event that this Agreement is terminated as a result of
a Change in Control, then all options granted to the Executive pursuant to
Section 6 hereof, shall, notwithstanding any provisions contained in the
respective Option Agreements, immediately vest and become exercisable by
the Executive.
Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York applicable to contracts
executed in and to be performed solely within such state.
Notices. All notices required or permitted to be given by either
party hereunder, including notice of change of address, shall be in writing
and delivered by hand, or mailed, postage prepaid, certified or registered
mail, return receipt requested, to the other party as follows:
If to the Company: U.S. WATS, Inc.
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxxx X. X'Xxxx, President
With a copy to: Xxxxx X. Xxxxxxx
Xxxxxxxx Xxxxxxxxx, P.C.
Two Xxxxx Square, 00xx Xxxxx
00xx & Xxxx
Xxxxxxxxxxxx, XX 00000
If to the Executive: Xxxx Xxxxxx
00000 Xxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Miscellaneous.
Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes
any and all prior oral or written agreements and understandings; however,
this Agreement shall not supersede, diminish or modify any rights of the
Executive under any employee benefit plans of the Company. There are no
oral promises, conditions, representations, understandings, interpretations
or terms of any kind as conditions or inducements to the execution hereof
or in effect among the parties. This Agreement may not be amended, and no
provision hereof shall be waived, except by a writing signed by the Company
and the Executive, or in the case of a waiver, by the party waiving
compliance therewith, which states that it is intended to amend or waive a
provision of this Agreement. Any waiver of any rights or failure to act in
any one instance shall not be regarded as an agreement to waive any rights
or failure to act in any other instance, whether or not similar.
Further Acts. The parties hereto agree that, after the execution of
this Agreement, they will make, do, execute or cause to be made, done or
executed all such further and other lawful acts, deeds, things, devices,
conveyances and assurances in law whatsoever as may be required to carry
out the true intention and to give full force and effect to this Agreement.
Severability. Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or prohibited by an
applicable law, this Agreement shall be considered divisible as to such
provision, which shall be inoperative, and the remainder of this Agreement
shall be valid and binding as though such provision were not included
herein.
Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially
all of its assets, and upon the Executive and his executors,
administrators, heirs and legal representatives.
Headings. All headings in this Agreement are for convenience only and
are not intended to affect the meaning of any provision hereof.
Counterparts. This Agreement may be executed in two or more
counterparts with the same effect as if the signatures to all such
counterparts were upon the same instrument, and all such counterparts shall
constitute but one instrument.
IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.
Attest US WATS, INC.
By:_____________________________ By: ____________________________
Xxxxx X'Xxxx, President
____________________________
Xxxx Xxxxxx, individually
