EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January ___,
1998, is entered into between J. XXXX XXXXXXXXXX, residing at 00 Xxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 ("Executive"), and GLOBAL TELECOMMUNICATION
SOLUTIONS, INC., a Delaware corporation having its principal office at 0000
Xxxxxx Xxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Company").
WHEREAS, THE Company and Executive are entering into a Merger And
Reorganization Agreement (the "Merger Agreement") under which Centerpiece
Communications, Inc. ("CCI") will be merged with and into a wholly owned
subsidiary of the Company; and
WHEREAS, Executive is the sole shareholder of CCI; and
WHEREAS, a material term of the Merger Agreement is the employment of
Executive by the Company in accordance with the terms and conditions set forth
herein; and
WHEREAS, the Company and Executive desire to provide for the employment of
Executive by the Company on the terms set forth herein;
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 The Company hereby employs Executive as its Vice President
-Wholesale Sales to supervise and control the Company's wholesale sales. All of
Executive's powers and authority in any capacity shall at all times be subject
to the reasonable direction and control of the Company's Chief Operating
Officer.
1.2 The Chief Operating Officer may assign to Executive such
other executive duties for the Company or any Affiliate (as defined in Section
5.1) as are consistent with Executive's status as Vice President Wholesale
Sales.
1.3 Executive accepts such employment and agrees to devote
substantially all of his business time, energies and attention to the
performance of his duties. Executive shall perform his duties primarily in and
from the Company's offices located in the Northern New Jersey metropolitan area.
2. Compensation and Benefits.
2.1 Subject to any increases in salary pursuant to Section
2.2, the Company shall pay to Executive a base salary ("Salary") at the
aggregate rate of $150,000 per annum during the Employment Term (as such term is
defined in Section 3.1, below). Executive's Salary shall be paid in equal,
periodic installments, in accordance with the Company's normal payroll
procedures and shall be subject to withholding taxes and other normal payroll
deductions.
2.2 The Company shall annually review Executive's performance.
Based upon such review and such other factors as the Company may consider, the
Company may determine to increase Executive's salary and/or award Executive a
bonus (which bonus shall be payable in cash or securities of the Company).
Notwithstanding the foregoing, Executive understands that Company shall not
obligated under any circumstances, to award any such increase in salary or
bonus.
2.3 Executive shall be entitled to such medical, dental and
disability insurance and other such benefits which are no less favorable than
generally afforded to other senior executives of the Company, subject to appli
cable waiting periods and other generally applicable conditions. Executive shall
be entitled to three weeks of paid vacation in each employment year and to a
reasonable number of other paid days off for religious and personal reasons (and
such paid sick leave in accordance with the Company's policies generally).
Executive acknowledges that the Company may, from time to time, apply for and
take out in its own name and at its expense, life, health, disability, accident
or other insurance, including key man insurance, upon Executive that the Company
may deem necessary and advisable to protect its interests hereunder. Executive
agrees to submit to medical or other reasonable examination necessary for such
purpose and to assist and cooperate with the Company in procuring such
insurance; and Executive acknowledges that he shall have no right, title or
interest in or to such insurance.
2.4 The Company will pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by Executive on
business trips and for all other ordinary and reasonable out-of-pocket expenses
actually incurred by him in the conduct of the business of the Company against
itemized vouchers submitted with respect to any such expenses approved in
accordance with customary procedures.
3. Term and Termination.
3.1 The term of this Agreement commences as of January 31,
1998 and shall continue until January 31, 2001 (the "Employment Term"), unless
sooner terminated or extended as herein provided.
3.2 If Executive dies during the term of this Agreement, this
Agreement shall thereupon terminate. Notwithstanding such termination, the
Company shall (i) pay to the legal representative of Executive's estate the
Salary due Executive pursuant to paragraph 2.1 hereof for a period of one (1)
year from the date of his death (the "Benefit Period") and (ii) ensure that the
health insurance afforded such legal representative prior to the date of
Executive's death is continued during the Benefit Period; provided, however,
that the Company shall be entitled to deduct the cost of continuing the health
insurance from the Executive's salary during the Benefit Period. Notwithstanding
anything contained herein to the contrary, the termination of the Agreement
under this section shall not affect Executive's rights (or those of his lawful
heirs or assigns), including Executive's rights as a shareholder of the Company
or the Company's obligations under the transactions contemplated by the Merger
and Reorganization Agreement (the "Merger") and all other agreements entered
into as a part of the Merger.
3.3 The Company, by written notice to Executive, may terminate
this Agreement if Executive shall fail because of illness or incapacity to
render, for six (6) consecutive months, services of the character contemplated
by this Agreement. To enforce this provision, the Company shall deliver to
Executive a written statement, to be signed by an officer of the Company,
setting forth its intent to terminate this Agreement, the date on which
termination will occur and
all reasons for the termination at least ten (10) days prior to the termination
date. Notwithstanding anything contained herein to the contrary, the termination
of the Agreement under this section shall not affect Executive's rights (or
those of this lawful heirs or assigns), including Executive's rights as a
shareholder of the Company or the Company's obligations under the transactions
contemplated by the Merger and all other agreements entered into as a part of
the Merger.
3.4 The Company, by not less than thirty (30) days written
notice to Executive, may terminate this Agreement without cause at any time. In
the event of such termination the Company shall pay to Executive the salary and
benefits due Executive pursuant to Article 2 through the full Employment Term as
provided in Section 3.1. Notwithstanding such termination, the provisions of
paragraph 4 shall survive. In addition, notwithstanding anything contained
herein to the contrary, the termination of the Agreement under this section
shall not affect Executive's rights (or those of this lawful heirs or assigns),
including Executive's rights as a shareholder of the Company or the Company's
obligations under the transactions contemplated by the Merger and all other
agreements entered into as a part of the Merger.
3.5 The Company, by written notice to Executive setting forth
a detailed explanation of the circumstances giving rise to the right to
terminate, may terminate this Agreement for cause. As used herein, "cause" shall
include, but not be limited to: (a) the refusal or failure by Executive to carry
out specific directions of the Chief Operating Officer which are of a material
nature and consistent with his status as Vice President - Wholesale Sales, or
the refusal or failure by Executive to perform a material part of Executive's
duties hereunder; (b) the commission by Executive of a material breach of any of
the provisions of this Agreement; (c) common law fraud or dishonest action by
Executive in his relations with the Company or any of its subsidiaries or
affiliates, or with any customer or business contact of the Company or any of
its subsidiaries or affiliates ("dishonest" for these purposes shall mean
Executive's knowingly or recklessly making of a material misstatement or
omission for his personal benefit); or (d) the conviction of Executive of any
crime involving an act of moral turpitude. Notwithstanding the foregoing, no
"cause" for termination shall be deemed to exist with respect to Executive's
acts described in clauses (a) or (b) above, unless the Company shall have given
written notice to Executive, signed by an officer of the Company, specifying the
"cause" with reasonable particularity and, within ten (10) business days after
such notice, Executive shall not have cured or eliminated the problem or thing
giving rise to such "cause;" provided, however, that a breach of any provision
of clauses (a) or (b) above, involving the same or substantially similar actions
or conduct for which the Company previously gave notice of termination and with
respect to which, Executive satisfactorily cured, shall be grounds for
termination for cause without any additional notice from the Company.
Notwithstanding such termination, the provisions of paragraph 4 shall survive.
In addition, notwithstanding anything contained herein to the contrary, the
termination of the Agreement under this section shall not affect Executive's
rights (or those of this lawful heirs or assigns), including Executive's rights
as a shareholder of the Company or the Company's obligations under the
transactions contemplated by the Merger and all other agreements entered into as
a part of the Merger.
3.6 The Executive, by written notice to the Company setting
forth a detailed explanation of the circumstances giving rise to the right to
terminate, may terminate this Agreement for cause if the Company materially
breaches any of the provisions of this Agreement. Notwithstanding the foregoing,
the Executive shall not have grounds for termination unless Executive shall have
given written notice to the Company specifying the breach with reasonable
particularity and, within ten (10) days after such notice, the Company shall not
have cured or eliminated the problem or thing giving rise to such breach;
provided, however, that a breach of any provision of this Agreement involving
the same or substantially similar actions or conduct for which the Executive
previously gave notice of termination and with respect to which, the Company
satisfactorily cured, shall be grounds for termination for cause without any
additional notice from the Executive. In the event of termination by Executive
under this Section 3.6, the Company shall pay to Executive the Salary due
Executive pursuant to paragraph 2.1 hereof through the Employment Term.
Notwithstanding such termination, the provisions of paragraph 4 shall survive
termination if the Company continues to pay Executive the Salary as provided in
the immediately preceding sentence. In addition, notwithstanding anything
contained herein to the contrary, the termination of the Agreement under this
section shall not affect Executive's rights (or those of this lawful heirs or
assigns), including Executive's rights as a shareholder of the Company or the
Company's obligations under the transactions contemplated by the Merger and all
other agreements entered into as a part of the Merger.
3.7 Executive, by not less than thirty (3o) days written notice to
Company may terminate this Agreement without cause at any time. In the event of
termination under this Section 3.7, the Company's prospective payment
obligations under Article 2 shall terminate simultaneously with the date on
which the Executive leaves Company's employ. Notwithstanding such termination by
Executive, the provisions of Article 4 shall survive termination. In addition,
notwithstanding anything contained herein to the contrary, the termination of
the Agreement under this section shall not affect Executive's rights (or those
of this lawful heirs or assigns), including Executive's rights as a shareholder
of the Company or the Company's obligations under the transactions contemplated
by the Merger and all other agreements entered into as a part of the Merger.
3.8 Notwithstanding any other provision contained herein, in the event
of a termination for cause pursuant to Section 3.6 or 3.7 hereof, the parties
shall promptly submit the determination of whether cause for termination existed
to binding arbitration. The arbitration shall be held before the American
Arbitration Association (the "AAA") at its office in New York, New York, shall
be administered under the AAA's Commercial Arbitration Rules and Section 6.3
shall be applicable to such arbitration. The parties agree to jointly request
that the arbitration hearing be concluded and a decision rendered within 120
days after the end of the cure period as defined in the applicable Section 3.6
or 3.7. The arbitrator's decision shall be final and non-appealable. The
prevailing party in any such arbitration shall be entitled to reimbursement from
the non-prevailing party for all of its reasonable arbitration and attorneys'
fees and costs. Upon termination for cause as provided in Section 3.6 or 3.7,
the Company shall pay Executive's Salary and bonus into a third party escrow
account to be held in such account pending final resolution of the arbitration
hearing as set forth in this Section. In the event the Arbitrator determines
that the Company's termination of Executive was based upon cause as defined in
Section 3.6, then all funds previously deposited into escrow hereunder shall be
immediately returned to the Company and the Company shall have no further
obligation hereunder. In the event the Arbitrator determines that the Company's
termination of Executive was not based upon cause as defined in Section 3.6,
then all funds previously deposited into escrow hereunder shall be immediately
released to the Executive
and the Company shall immediately commence providing Executive with his Salary
and benefits for the remaining term of this Agreement. In the event the
Arbitrator determines that the Executive's termination of this Agreement was
based upon cause as defined in Section 3.7, then all funds previously deposited
into escrow hereunder shall be immediately released to Executive and the Company
shall immediately commence providing Executive with his Salary and benefits for
the remaining term of this Agreement. In the event the Arbitrator determines
that the Executive's termination of this Agreement was not based upon cause as
defined in Section 3.7, then all funds previously deposited into escrow
hereunder shall be immediately returned to the Company and the Company shall
have no further obligation hereunder.
4. Protection of Confidential Information.
4.1 Executive acknowledges that:
(a) As a result of his employment with the Company, Executive will obtain
secret and confidential information concerning the business of the Company
and/or its subsidiaries and affiliates (referred to collectively in this
paragraph 4 as the "Company"), including, without limitation, financial
information, designs and other proprietary rights, trade secrets and "know-how,"
customers and sources ("Confidential Information").
(b) The Company will suffer substantial damage which will be difficult to
compute if, during the period of his employment with the Company or thereafter,
Executive should enter a business competitive with the Company or divulge
Confidential Information. (c) The provisions of this Agreement are reasonable
and necessary for the protection of the business of the Company.
4.2 Executive agrees that he will not at any time, either during the term
of this Agreement or thereafter, divulge to any person or entity any
Confidential Information obtained or learned by him as a result of his
employment with, or prior retention by, the Company, except (i) in the course of
performing his duties hereunder; (ii) with the Company's express written
consent; (iii) to the extent that any such information is in the public domain
other than as a result of Executive's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. If Executive shall be required to make disclosure
pursuant to the provisions of clause (iv) of the preceding sentence, Executive
promptly, but in no event more than seventy two (72) hours after learning of
such subpoena, court order, or other government process, shall (unless
prohibited by law, regulation, court order, administrative decree or other
governmental action) notify, by personal delivery or by electronic means,
confirmed by mail, the Company and, at the Company's expense, Executive shall:
(a) take all reasonably necessary and lawful steps required by the Company to
defend against the enforcement of such subpoena, court order or other government
process, and (b) permit the Company to intervene and participate with counsel of
its choice in any proceeding relating to the enforcement thereof.
4.3 Upon termination of his employment with the Company, Executive will
promptly deliver to the Company all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the business of the Company and all property associated therewith, which he may
then possess or have under his control; provided, however, subject
to Executive's obligations under this Section 4, that Executive shall be
entitled to retain copies of such documents reasonably necessary to document his
financial relationship (both past and future) with the Company. 4.4
[Intentionally left blank] 4.5 [Intentionally left blank]
4.6 If Executive commits a breach, or threatens to commit a breach, of any
of the provisions of Sections 4.2, the Company shall have the right and remedy:
(a) to have the provisions of this Agreement specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that the services being rendered hereunder to the Company are of a special,
unique and extraordinary character and that any such breach or threatened breach
will cause irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company; and
(b) to require Executive to account for and pay over to the Company all
monetary damages suffered by the Company as the result of any transactions
constituting a breach of any of the provisions of Section 4.2, and Executive
hereby agrees to account for and pay over such damages to the Company.
Each of the rights and remedies enumerated in this Section 4.6 shall be
independent of the other, and shall be severally enforceable, and such rights
and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or equity.
In connection with any legal action or proceeding arising out of Section
4.6, the prevailing party in such action or proceeding shall be entitled to be
reimbursed by the other party for the reasonable attorneys' fees and costs
incurred by the prevailing party.
4.7 If any provision of Section 4.2 is held to be unenforceable because of
the scope, duration or area of its applicability, the tribunal making such
determination shall have the power to modify such scope, duration, or area, or
all of them, and such provision or provisions shall then be applicable in such
modified form.
4.8 The provisions of this paragraph 4 shall survive the termination of
this Agreement for any reason.
5. Definitions.
As used in this Agreement:
5.1 "Affiliate" shall mean any entity that, directly or indirectly, is
controlled by, controlling, or under common control with the Company.
6. Miscellaneous Provisions.
6.1 All notices provided for in this Agreement shall be in writing, and
shall be deemed to have been duly given when delivered personally to the party
to receive the same, when transmitted by electronic means, or when delivered by
reputable overnight courier, postage prepaid, addressed to the party to receive
the same at his or its address set forth below, or such other address as the
party to receive the same shall have specified by written notice given in the
manner provided for in this Section 6.1. All notices shall be deemed to have
been given upon actual receipt.
If to Executive:
J. Xxxx Xxxxxxxxxx
at 00 Xxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000
Marked: "Personal and Confidential"
If to the Company:
Global Telecommunication Solutions, Inc.
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: General Counsel
6.2 This Agreement sets forth the entire agreement of the parties relating
to the employment of Executive and are intended to supersede all prior
negotiations, understandings and agreements. No provisions of this Agreement may
be waived or changed except by a writing by the party against whom such waiver
or change is sought to be enforced. The failure of any party to require
performance of any provision hereof or thereof shall in no manner affect the
right at a later time to enforce such provision.
6.3 All questions with respect to the construction of this Agreement, and
the rights and obligations of the parties hereunder, shall be determined in
accordance with the law of the State of New York applicable to agreements made
and to be performed entirely in New York.
6.4 This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company. This Agreement shall not be assignable by
Executive, but shall inure to the benefit of and be binding upon Executive's
heirs and legal representatives.
6.5 Should any provision of this Agreement become legally unenforceable, no
other provision of this Agreement shall be affected, and this Agreement shall
continue as if the Agreement had been executed absent the unenforceable
provision.
6.6 Executive expressly agrees that the compensation to which he may be
entitled pursuant to Section 2 hereof may be reduced as provided in Article 8 of
the Merger and Reorganization Agreement and pursuant to any other
indemnification obligation of Executive incurred in connection with the
transactions contemplated by the Merger and Reorganization Agreement. Executive
expressly agrees that any such reduction shall not constitute a deduction from
"wages" as defined in Section 190, Article 6, of the New York Labor Law, and
that such reduction is not prohibited under Section 193, Article 6, of the New
York Labor Law. Executive shall not bring or participate in any action claiming
that such reduction is in violation of Section 193, Article 6, of the New York
Labor
Law, or any other provision of applicable law.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EXECUTIVE
/s/ J. Xxxx Xxxxxxxxxx
-----------------------------------
J. Xxxx Xxxxxxxxxx
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx,
Vice President and Chief
Financial Officer
