EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 12, 2002, by and between xxxxxxxx.xxx,
inc., a Delaware corporation (the "Company"), and Xxxxx Xxxxxx ("Executive").
IN CONSIDERATION of the premises and the mutual covenants set forth below, the
parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as the Chief
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Technical Officer of the Company (the "CTO"), and Executive hereby accepts such
employment, on the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the Company under this
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Agreement (the "Employment Period") shall commence on the date hereof (the
"Commencement Date") and shall continue through the first anniversary thereof;
provided, that, the Employment Period shall automatically extend for one year
unless either the Company or Executive provides written notice to the other not
to further extend the Employment Period thirty (30) days prior to the expiration
of the term.
3. Position and Duties. During the Employment Period, Executive shall serve
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as Chief Technical Officer, and shall report either to the Company's President
or Chief Executive Officer. Executive shall devote 100% of his working time,
attention and energies during normal business hours (other than absences due to
illness or vacation) to his duties as Chief Technical Officer of the Company.
4. Place of Performance. The principal place of employment of Executive
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shall be at the Company's principal executive offices in Fort Lauderdale,
Florida, or any other offices deemed necessary by the Company's Board of
Directors.
5. Compensation and Related Matters.
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(a) Base Salary. During the Employment Period, the Company shall pay
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Executive a base salary at the rate of not less than US$125,000 per year ("Base
Salary"). Executive's Base Salary shall be paid in approximately equal
semi-monthly installments in accordance with the Company's customary payroll
practices. The Board of Directors of the Company (the "Board") may at its sole
discretion review Executive's Base Salary for increase annually and consistent
with the compensation practices and guidelines of the Company. If Executive's
Base Salary is increased by the Company, such increased Base Salary shall then
constitute the Base Salary for all purposes of this Agreement. In addition to
Base Salary, Executive may be eligible for certain bonus payments at the sole
discretion of the Board of Directors.
(b) Expenses. The Company shall promptly reimburse Executive for all
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reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all employees of the Company.
(c) Vacation. Executive shall be entitled to (3) weeks of paid
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vacation per year. Unused vacation may not be carried over from one year to the
other. In addition to vacation, Executive shall be entitled to sick days and
personal days in accordance with Company policy.
(d) Benefits. Executive shall be entitled to receive the same benefits
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offered by the Company from time to time to other employees of the Company at
the same level as the Executive, which at the date hereof are those benefits
described in Schedule A hereto.
6. Termination. Executive's employment hereunder may be terminated during
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the Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
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death.
(b) Disability. If, as a result of Executive's incapacity due to
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physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of three (3) consecutive
months, and within thirty (30) days after written Notice of Termination is given
after such three (3) month period, Executive shall not have returned to the
substantial performance of his duties on a full-time basis, the Company shall
have the right to terminate Executive's employment hereunder for "Disability",
and such termination in and of itself shall not be, nor shall it be deemed to
be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
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employment for Cause. Cause is defined as:
(i) final conviction of or plea of guilty or no contest to a
felony involving moral turpitude; or
(ii) willful misconduct that is materially and demonstrably
injurious economically to the Company.
(d) Good Reason. Executive may terminate his employment for "Good
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Reason" within thirty (30) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of any breach of a
material provision of this Agreement by the Company or any Affiliate. For
greater certainty, the failure of the Executive to terminate his employment
within thirty (30) days of his actual knowledge of "Good Reason" shall not
preclude the Executive from subsequently terminating his employment pursuant to
this Section 6(d), provided that he does so within thirty (30) days of his
actual knowledge of the occurrence or reoccurrence of "Good Reason".
(e) Without Cause. Subject to Section 10(a), the Company shall have
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the right to terminate Executive's employment hereunder without Cause by
providing Executive with a Notice of Termination at least thirty (30) days prior
to such termination, and such termination shall not in and of itself be, nor
shall it be deemed to be, a breach of this Agreement.
(e) Without Good Reason. Executive shall have the right to terminate
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his employment hereunder without Good Reason by providing the Company with a
Notice of
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Termination at least thirty (30) days prior to such termination, and such
termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement.
7. Proprietary Information and Inventions. Executive acknowledges that
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any proprietary information owned by the Company must be held in strict
confidence both during and after employment. Executive also acknowledges that
any inventions or proprietary processes, patentable or otherwise, are and will
remain the property of the Company. Executive agrees to assign to xxxxxxxx.xxx
any inventions or proprietary processes, patentable or otherwise, created
through Executive's work with the Company.
8. Non-Compete. Executive shall not be permitted to seek employment in the
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Digital Telephony industry in any capacity for a period of:
(i) One (1) year following termination without Cause by the
Company or resignation for Good Reason by the Executive.
(ii) Three (3) years following termination for Cause by the
Company or resignation without Good Reason by the Executive.
9. Termination Procedure.
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(a) Notice of Termination. Any termination of Executive's employment
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by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 13. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if
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Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination, and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
10. Compensation Upon Termination or During Disability. In the event
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Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 10 constitute liquidated damages for termination of his employment
during the Employment Period.
(a) Termination By Company without Cause or By Executive for Good
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Reason. If Executive's employment is terminated by the Company without Cause or
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by Executive for Good Reason:
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(i) within ten (10) days following such termination, the Company
shall pay to Executive (A) his Base Salary and bonus through the Date of
Termination, (B) any accrued vacation pay (clauses (A) and (B) of this
Section 8(a)(i) collectively referred to as the "Accrued Benefits"); and
(C) his Base Salary shall continue to be paid, consistent with normal
payroll practices for: (a) the number of months following such termination
calculated as 12 less the number of months or part months that have elapsed
since the Commencement Date, if such termination occurs within six months
of the Commencement Date; and (b) six months following such termination in
all other cases.
(ii) the Company shall reimburse Executive pursuant to Section 5 for reasonable
expenses incurred, but not paid prior to such termination of employment; and
(b) Cause or By Executive Without Good Reason. If Executive's
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employment is terminated by the Company for Cause or by Executive (other than
for Good Reason):
(i) the Company shall pay Executive his Accrued Benefits; and
(ii) the Company shall reimburse Executive pursuant to Section 5
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(c) Disability. During any period that Executive fails to perform his
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duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b). In the event Executive's employment is terminated for Disability pursuant
to Section 6(b):
(i) the Company shall pay to Executive his Accrued Benefits and
continue to provide continued benefits for one (1) year; and
(ii) the Company shall reimburse Executive pursuant to Section 5
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(d) Death. If Executive's employment is terminated by his death:
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(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be,
Executive's Accrued Benefits; and
11. Arbitration. If any contest or dispute arises between the parties with
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respect to this Agreement, such contest or dispute shall be submitted to binding
arbitration for resolution in Fort Lauderdale, Florida in accordance with the
rules and procedures of the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect.
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The decision of the arbitrator shall be final and binding on both parties, and
any court of competent jurisdiction may enter judgment upon the award.
12. Successors; Binding Agreement.
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(a) Company's Successors. The Company may assign or transfer its
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rights and obligations under this Agreement to any of its successors (whether
direct or indirect, by purchase, merger, consolidation or otherwise).
(b) Executive's Successors. No rights or obligations of Executive
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under this Agreement may be assigned or transferred by Executive other than his
rights to payments or benefits hereunder, which may be transferred only by will
or the laws of descent and distribution.
13. Notice. For the purposes of this Agreement, notices, demands and all
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other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally or by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
000 XX 000 Xxxx
Xxxxxxx, Xxxxxxx
00000
If to the Company:
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may be amended,
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modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The respective rights and obligations of the
parties hereunder of this Agreement shall survive Executive's termination of
employment and the termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations. The validity,
interpretation, construction and
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performance of this Agreement shall be governed by the laws of the State of
Florida without regard to its conflicts of law principles.
15. Validity. The invalidity or unenforceability of any provision or
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provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
16. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Entire Agreement. Except as other provided herein, this Agreement sets
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forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersede all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in
respect of such subject matter. Except as other provided herein, any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.
18. Withholding. All payments hereunder shall be subject to any required
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withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
19. Noncontravention. The Company represents that the Company is not
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prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
20. Section Headings. The section headings in this Agreement are for
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convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.
21. Conditions. Employment of the Executive pursuant to this Agreement is
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conditional upon the Company completing to its complete satisfaction background
investigations of the Executive and upon the Executive verifying to the
Company's satisfaction his eligibility for employment in the U.S. which meets
the requirements of the U.S. Department of Justice. Upon the execution of this
Agreement, the Executive shall provide the Company with: (i) a copy of the
Executive's Social Security Card; (ii) proof of permanent residency in the U.S.
or, if the Executive is a U.S. citizen, a copy of a document proving legal
immigration status; and (iii) a copy of the Executive's driver's license.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
xxxxxxxx.xxx, inc.
By:
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Name:
Title:
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Executive
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