EXHIBIT 10.5
XXXXXXX X. XxXXX
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of this 9th day of
December 1996 is by and between VIEW TECH, INC., a Delaware corporation with its
principal place of business at 000 Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
(hereinafter called the "Employer"), and Xxxxxxx X. XxXxx, an individual
residing at 00000 Xxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000 (hereinafter
called the "Employee").
WHEREAS, the Employer, recently acquired USTeleCenters, Inc., a
Massachusetts corporation ("UST"), by means of a merger between UST and View
Tech Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of
Employer ("VTAI"), whereby UST merged with and into VTAI (the "Merger"); and
WHEREAS, the Employer wishes to provide assurance to the Employee that his
duties, responsibilities and authority will not be reduced as a consequence of
the Merger; and
WHEREAS, the Employer desires to employ the Employee, who has served as its
secretary and chief financial officer since the May 1, 1995, on terms that
reflect the Company s desire to continue to employ the Employee in his current
capacity, and the Employee desires to accept such employment, all upon the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto hereby mutually agree as follows:
1. Employment. The Employer hereby employs the Employee, and the
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Employee hereby accepts such employment, upon and subject to the terms and
conditions set forth herein.
2. Effective Date and Term. This Agreement shall take effect as of the
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date hereof (the "Effective Date") and shall continue thereafter in full force
and effect until December 31, 1998 (the "Expiration Date").
3. Title and Duties; Extent of Services. The Employee shall promote the
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business and affairs of the Employer as the Secretary and Chief Financial
Officer. The Employee shall report and be responsible to the Chief Executive
Officer of the Employer, and shall devote his full efforts, time, attention and
energies to the business and affairs of the Employer; provided, however, that
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nothing in this Agreement or in the Employee's employment relationship with the
Employer shall prevent the Employee from having an ownership interest in, and
from rendering services to, other companies or entities so long as any such
ownership interest of the Employee or any such services rendered by the Employee
to any such other companies or entities do not interfere with the reasonable
performance of the Employee's duties and responsibilities hereunder.
4. Travel. During the term of this Agreement, the Employee shall engage
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in reasonable business travel on behalf of the Employer.
5. Compensation and Benefits.
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5.1. Salary. The Employer shall pay the Employee a salary at the
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annual rate of $136,000. The Employee's salary, which may be increased from
time to time by the Chief Executive Officer (in the absence thereof, by the
Board of Directors) of the Employer (hereinafter, the "Salary"), shall not be
decreased without the consent of the Employee. The Employee's Salary shall be
paid in accordance with the Employer's payroll practices as in effect from time
to time.
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5.2. Fringe Benefits. In addition to the Salary provided for in
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Section 5.1 above, in connection with the Employee's employment by the Company,
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the Employee shall be entitled to receive all fringe benefits customarily
offered by the Company to its senior executive officers, including without
limitation, an expense account and an automobile expense allowance.
5.3. Health and Dental Insurance. The Employee shall be entitled, on
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a family coverage basis and at the Employer's sole cost and expense, to
participate in the health insurance plan (the Employer's Health Plan ) and the
dental insurance plan (the "Employer's Dental Plan") generally made available to
the Employer's executive officers.
5.4. Disability Insurance. The Employee shall be entitled to
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participate, at the Employer's sole cost and expense, in the long-term
disability insurance plan generally made available to other executive officers
of the Employer (the "L.T. Disability Plan").
5.5. Life Insurance. The Employee shall be entitled to participate,
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at the Employer's sole cost and expense, in the life insurance plan of the
Employer (the "Life Insurance Plan") generally made available to other executive
officers of the Employer.
5.6. D&O Liability Insurance. The Employer shall maintain at all
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times a directors and officers liability insurance policy (the "D&O Policy") and
the Employee shall be covered in his capacity as an officer of the Employer
under the D&O Policy. The cost of such coverage shall be borne by the Employer.
In addition, the Employee shall be entitled to indemnification from the Employer
for any claim, loss, damage or expense made against or suffered by the Employee
in his capacity as an officer of the Employer.
5.7. 401(k) Plan. The Employee shall be entitled to participate in
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the Employer's 401(k) Plan and profit sharing plans on the same basis as other
officers of the Employer. The Employee shall be eligible to participate in the
Employer's 401(k) Plan and profit sharing plans commencing on the Effective
Date.
5.8. Vacation. The Employee shall be entitled to at least four weeks
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of vacation per fiscal year during which time his compensation shall be paid in
full, and any unused vacation time shall accrue from year to year in accordance
with the Employer s policy therefor.
5.9. Expense Reimbursement. The Employee may incur reasonable
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expenses in connection with the promotion of the Employer's business, all upon
presentation by the Employee of documentation, expense statements, vouchers
and/or such other supporting documentation as the Employer may reasonably
request. The Employer shall directly pay, or shall reimburse the Employee, for
all of such reasonable expenses.
5.10. Other Benefits. The Employee shall be entitled to receive such
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other fringe benefits as are customarily provided by the Employer to other
officers.
6. Stock Option. The Employee shall be entitled to participate in
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the Employer's stock option plans on a basis consistent with other officers of
the Employer.
7. Termination.
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7.1. Termination Rights of the Parties.
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(a) The Employee may terminate his employment hereunder at any time
for Good Reason (as defined below) by giving the Employer thirty (30) days'
prior written notice thereof, whereupon such employment shall terminate on the
earlier of (i) the 30th day following the date on which such notice is given to
the Employer or (ii) any date prior to such 30th day that is specified by the
Employer by written notice to the Employee. For purposes of this Agreement, the
term "Good Reason" shall mean (i) material breach by the Employer of any of the
terms or provisions of this Agreement, (ii) any event of bankruptcy or
insolvency in respect of the Employer, (iii) any diminution, on a cumulative
basis, of the Employee's duties, responsibility or
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authority to a level less than the duties, responsibility and authority of the
Employee as an officer of the Employer prior to the Merger, (iv) the principal
place of business at which the Employee performs his duties is changed to a
location outside Camarillo, California, or (v) the occurrence of a Change of
Control (as defined in Section 7.3 hereof).
(b) The Employee may terminate his employment hereunder for any reason
whatsoever at any time by giving ninety (90) days' prior written notice of such
termination, whereupon such employment shall terminate on the earlier of (i) the
90th day following the date on which such notice is given or (ii) any date prior
to such 90th day that is specified by the Employer by written notice to the
Employee.
(c) The Employer may terminate the Employee's employment hereunder at
any time for Cause (as defined below) by giving the Employee written notice of
such termination whereupon such employment shall terminate on the date such
written notice is given to the Employee. For purposes of this Agreement, the
term "Cause" shall mean (i) any willful misconduct by the Employee which
materially injures the Employer, (ii) any act of dishonesty in the Employee's
relations with the Employer or any of its directors, employees or vendors which
materially injures the Employer, (iii) any act of larceny, embezzlement,
conversion or any other similar act involving the misappropriation of Employer
funds in the course of the Employee's employment, (iv) any material breach of
this Agreement by the Employee which is not cured by the Employee within ten
(10) days after receiving written notice thereof from the Employer, or (v) the
conviction of the Employee of any felony which includes moral turpitude.
(d) The Employer may terminate the Employee's employment hereunder at
any time without Cause by giving the Employee ninety (90) days' prior written
notice thereof, whereupon such employment shall terminate on the earlier of (i)
the 90th day following the date on which such notice is given and (ii) any date
prior to such 90th day that is specified by the Employee by written notice to
the Employer.
(e) The Employee's employment hereunder shall terminate automatically
(i) upon the Employee's death or (ii) on the thirtieth (30th) day following any
determination of Disability (as defined below) in accordance with the procedures
specified in this Section 7.1(e). For purposes of this Agreement, the term
"Disability" shall mean an inability to perform the material services
contemplated under this Agreement for a period of six consecutive months. A
determination of Disability shall be made by a physician satisfactory to both
the Employee and the Employer, provided that, if the Employee and the Employer
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do not agree on a physician, the Employee and the Employer shall each select a
physician and these two together shall select a third physician, whose
determination as to Disability shall be binding on all parties.
(f) The effective date of any termination of the Employee's employment
hereunder is hereinafter referred to as the "Termination Date."
7.2. Employee's Right to Compensation Following Termination; Severance
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Benefits.
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(a) Upon any termination of the Employee's employment hereunder by the
Employer or the Employee for any reason whatsoever, or upon any termination of
the Employee's employment hereunder on account of his death or Disability, the
Employer shall (1) pay to the Employee all Salary accrued by the Employee
through the Termination Date, (2) pay to the Employee any accrued but previously
unpaid bonuses and (3) pay and make available to the Employee all other benefits
accrued by the Employee through the Termination Date pursuant to Section 5
hereof, all in the manner and at the time provided in said Section 5. Any
payments due or benefits owed to the Employee by the Employer under this Section
7.2(a) shall be paid or made available by the Employer to the Employee's legal
representative or heirs, as the case may be, upon the Employee's death or
Disability.
(b) Upon the termination of the Employee's employment hereunder by the
Employee for Good Reason pursuant to Section 7.1(a) hereof or by the Employer
without Cause pursuant to Section 7.1(d) hereof, the Employer shall provide
severance to the Employee by (1)
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continuing to pay to the Employee the Salary through (i) the first anniversary
of the Termination Date, or (ii) the Expiration Date, whichever period is
longer, in the manner and at the time provided in Section 5.1 hereof, and (2)
paying and making available to the Employee through (i) the first anniversary of
the Termination Date, or (ii) the Expiration Date, whichever period is longer,
all fringe benefits set forth in Section 5.3 through 5.10 hereof. Except as
provided under Section 7.3(c) below, the provisions of this Section 7.2(b) shall
not be applicable with respect to any termination of the Employee's employment
hereunder to the extent that the Employee shall be entitled to severance
therefor pursuant to Section 7.3 hereof.
7.3. Special Severance Upon a Change of Control.
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(a) Notwithstanding anything in this Agreement (including, without
limitation, Section 7.2 hereof) to the contrary, in the event that the
Employee's employment under this Agreement is terminated by the Employer for any
reason whatsoever, or by the Employee with Good Reason (which for purposes of
this Section 7.3(a) shall mean the occurrence of any of the events described in
clauses (i), (ii), (iii) or (iv) of the definition of the term Good Reason as
set forth in Section 7.1(a) hereof), at any time within the two year period
after a Change of Control, the Employer shall, in addition to performing its
obligations under 7.2(a) hereof, provide severance to the Employee by (i)
continuing to pay to the Employee the Salary through the last business day of
the Special Severance Period (as defined in Section 7.3(c) below) in the manner
and at the time provided in Section 5.1 hereof, and (ii) paying and making
available to the Employee through the last business day of the Special Severance
Period all fringe benefits set forth in Section 5.3 through 5.10 hereof.
(b) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred upon any of the following events:
(i) when, pursuant to any transaction or series of transactions, any
"person" (as such term is used in Section 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"))
becomes a "beneficial owner" (as such term is defined in Rule
13d-3 promulgated under the 1934 Act), directly or indirectly, of
securities of the Employer representing thirty-five percent (35%)
or more of the total number of votes that may be cast for
election of directors of the Employer;
(ii) any contested election of directors, the result of which is that
the individuals who were directors of the Employer immediately
before such election shall cease to constitute a majority of the
directors serving on the Board of Directors of the Employer or
any successor thereof;
(iii) any merger of consolidation of the Employer with or into
another corporation or entity where the Employer is not the
survivor;
(iv) a sale or disposal by the Employer of substantially all of its
assets to another corporation, entity or person; or
(v) any tender or exchange offer, or other business combination, the
result of which is the persons who were directors of the Employer
before such transaction shall cease to constitute a majority of
the directors serving on the Board of Directors of the Employer
or any successor thereof.
(c) For purposes of Section 7.3(a) above, the term "Special Severance
Period" shall mean a period of time, commencing on the Termination Date, equal
to two months for each calendar quarter through which the Employee shall have
been employed hereunder; provided, however, that in no event shall such period
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have a total duration of less than one year from the Termination Date or more
than two years from the Termination Date; and provided, further, that in no
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event shall such period have a total duration of less than the severance period
applicable under Section 7.2(b) above.
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7.4. Mitigation. The Employee shall be under no obligation to
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mitigate the amount of any severance payments provided for in Sections 7.2 and
7.3 hereof or to seek other employment following any termination of employment
hereunder, and any amounts he may earn in any other employment shall not reduce
or offset the severance payments or other amounts due hereunder.
7.5. No Offset. The Employer shall not be entitled to setoff,
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offset, reduce or otherwise withhold any compensation due by the Employer to the
Employee hereunder. In the event that the Employer shall have any claim against
the Employee hereunder, the Employer's only remedy shall be to commence an
action at law or in equity against the Employee seeking damages or injunctive
relief.
8. General Provisions.
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8.1. Acceleration. In the event of any failure by the Employer
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to pay any of the amounts due and payable by the Employer under Section 7.2 or
7.3 hereof, or in the event of the filing of any bankruptcy petition by or
against the Employer or the appointment of a receiver to wind up and liquidate
the Employer, at any time after the Termination Date, the Employee shall be
entitled to accelerate any and all amounts due and payable by the Employer to
the Employee under this Agreement. Any such right of acceleration shall not be
in lieu of, or otherwise limit, any remedies available to the Employee at law or
in equity.
8.2. Entire Agreement. This Agreement represents the entire
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agreement of the parties and supersedes any prior understandings, agreements or
representations by and between the Employer and the Employee with respect to the
arrangements contemplated hereby. No prior agreement, whether written or oral,
shall be construed to change, amend, alter, repeal or invalidate this Agreement.
This Agreement may be amended only by a written instrument executed in one or
more counterparts by the parties.
8.3. Waiver. No consent to or waiver of any breach or default in
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the performance of any obligations hereunder shall be deemed or construed to be
a consent to or waiver of any other breach or default in the performance of any
of the same or any other obligations hereunder. Failure on the part of either
party to complain of any act or failure to act of the other party or to declare
the other party in default, irrespective of the duration of such failure, shall
not constitute a waiver of rights hereunder and no waiver hereunder shall be
effective unless it is in writing, executed by the party waiving the breach or
default hereunder.
8.4. Assignment. This Agreement shall be binding upon and inure
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to the benefit of the parties hereto, their respective successors and assigns
and, in the case of the Employee, his heirs. Neither the Employee nor the
Employer may assign or transfer any or all of their respective rights or
obligations under this Agreement.
8.5. Venue. In case of any dispute hereunder, the parties will
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submit to the exclusive jurisdiction and venue of any court of competent
jurisdiction sitting in Ventura County, California, and will comply with all
requirements necessary to give such court jurisdiction over the parties and the
controversy.
8.6. Severability. All headings and subdivisions of this
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Agreement are for reference only and shall not affect its interpretation. In
the event that any provision of this Agreement should be held unenforceable by a
court of competent jurisdiction, such court is hereby authorized to amend such
provision so as to be enforceable to the fullest extent permitted by law, and
all remaining provisions shall continue in full force without being impaired or
invalidated in any way.
8.7. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of California, without regard
to its conflict of laws principles.
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8.8. Survival. The provisions of Sections 5, 6, 7, and 8 shall
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survive any termination of this Agreement or of the employment relationship of
the Employee and the Employer, including any termination of such employment
relationship at any time on or after the expiration of the term of this
Agreement as set forth in Section 2 hereof. Without in any way or to any extent
limiting the generality of the foregoing, the parties hereby expressly agree
that the provisions of Section 7 hereof (other than Section 7.1(d) under which
prior written notice of termination shall be thirty (30) days) shall survive the
expiration of the term of this Agreement as set forth in Section 2 hereof, it
being the intention of the parties hereto that the Employee shall be entitled to
compensation and severance as set forth in Section 7 hereof, upon any
termination of the employment relationship of the Employee and the Employer at
any time after the expiration of the term of this Agreement, all to the same
extent as if the Employee were employed under the terms of this Agreement at the
time of such termination.
8.9. Notices. All notices required or permitted under this
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Agreement shall be in writing and shall be deemed effective upon personal
delivery or three days after deposit in the United States Post Office, by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the other party at the address shown above, or at such other
address or addresses of which either party shall notify the other in accordance
with this Section 8.9.
8.10. Counterparts. This Agreement may be executed in
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counterparts, all of which together shall for all purposes constitute one
Agreement, binding on each of the parties hereto notwithstanding that each such
party shall not have signed the same counterpart.
8.11. Attorneys' Fees. Each party agrees that the losing party in
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any suit or action shall reimburse the prevailing party for its reasonable
costs, expenses and attorneys' fees incurred in any action or suit brought to
determine the rights of the parties hereunder.
8.12. Arbitration. Any disputes arising out of this Agreement
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between the Employee and the Employer shall be settled by binding arbitration to
be held in Ventura County, California, in accordance with the rules of the
American Arbitration Association. Judgment upon any award rendered by any
arbitrator may be entered in any court having jurisdiction. The statute of
limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in any action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of any action for these purposes.
8.13. Indemnification. Employer shall indemnify, defend and hold
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harmless Employee from and against any and all actions, claims, liabilities,
demands and proceedings asserted against Employee by reason of the fact that
Employee is or was an employee or officer of the Employer on or after the date
hereof to the fullest extent permitted under the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have signed this agreement as of the
date written above as a sealed instrument.
VIEW TECH, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
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Employee
/s/ Xxxxxxx X. XxXxx
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Xxxxxxx X. XxXxx
Secretary and Chief Financial Officer
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