EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated October 11, 1999, between Quest Net
Corp. (the "Company"), and Xxxxxxx X. Del Medico (the "Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. TERM OF EMPLOYMENT.
(a) TERM. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, for a period
commencing on the date of this Agreement and ending five years from the
date hereof (the "Term").
(b) CONTINUING EFFECT. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 6 and 7 shall remain in full force and effect and the
provisions of Sections 6(b) and 7 shall be binding upon the legal
representatives, successors and assigns of the Executive, except as
otherwise provided in Section 5(d).
2. DUTIES.
(a) GENERAL DUTIES. The executive shall serve as
President/Chief Operating Officer of the Company, with duties and
responsibilities that are customary for such executives subject to the
direction of the Company's Chairman/Chief Executive Officer. The
Executive will also perform services for such subsidiaries as may be
necessary. The Executive will use her best efforts to performs her
duties and discharge her responsibilities pursuant to this Agreement
competently, carefully and faithfully.
(b) DEVOTION OF TIME. The Executive will devote all of her
time, attention and energies during normal business hours (exclusive of
periods of sickness and disability and of such normal holiday and
vacation periods as have been established by the Company) to the
affairs of the Company. The Executive will not enter the employ of or
serve as a consultant to, or in any way perform any services with or
without compensation to, any other persons, business or organization
without the prior consent of the Company; provided, that the Executive
shall be permitted to devote a limited amount of her time, without
compensation, to charitable or similar organizations.
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3. COMPENSATION AND EXPENSES.
(a) SALARY. For the services of the Executive to be rendered
under this Agreement, the Company will pay the Executive an annual base
salary of $110,000 during the Term, subject to annual cost of living
increases based upon changes in the Consumer Price Index published by
the Bureau of Labor Statistics (or similar successor index) for the
region in which the Executive resides, but in no event shall the cost
of living increase be less than 7% per annum. The annual salary under
this Section 3(a) will be reduced, however, to the extent that the
Executive elects to defer any portion thereof under the terms of any
deferred compensation or savings plan maintained by the Company. The
Company will pay the Executive her annual salary in equal installments
no less frequently than twice a month.
(b) BONUS. For the services to be rendered by the Executive
under this Agreement, the Company's Board of Directors, on a yearly
basis, shall determine a bonus to be paid to Employee, based upon a
percentage of the adjusted consolidated net earnings of the Company for
each calendar year of Executive's employment, such sum to be computed
as follows:
(i) The adjusted consolidated net earnings of the Company
shall be determined in accordance with accepted accounting
practice by the independent accounting firm employed by the
Company as its auditors, within 90 days after the end of each
fiscal year.
(ii) This computation of net earnings and of the Executive's
percentage compensation, made in the manner here provided,
shall be final and binding upon the Company and the Executive,
and the Company shall pay such compensation to the Executive
within 120 days after the end of the fiscal year in question.
The Bonus may be paid in cash, stock, or options, by mutual
agreement of the Executive and the Company.
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(iii) For purposes of computing the executive's percentage
compensation, the adjusted consolidated net earnings of the
company shall be determined after full allowance for, and
deduction of the following: (a) all federal, state and
municipal taxes; (b) depreciation for the period based on the
amount of depreciation set forth in the annual report of the
company to its shareholders for the fiscal year which includes
such period.
(c) EXPENSES. In addition to any compensation received
pursuant to Section 3(a), (b) and (c), the Company will reimburse or
advance funds to the Executive for all reasonable travel, entertainment
and miscellaneous expenses incurred in connection with the performance
of her duties under this Agreement, provided that the Executive
properly accounts for such expenses to the Company in accordance with
the Company's practices. Such reimbursement or advances will be made in
accordance with policies and procedures of the Company in effect from
time to time relating to reimbursement of or advances to executive
officers.
4. BENEFITS.
(a) VACATION. For each 12-month period during the Term, the
Executive will be entitled to five weeks of vacation without loss of
compensation or other benefits to which she is entitled under this
Agreement, to be taken at such times as the Executive may select and
the affairs of the Company may permit.
(b) EMPLOYEE BENEFIT PROGRAMS. Without limiting the
compensation to which the Executive is entitled pursuant to the
provisions of Section 3 or this Section 4, during the Term, the
Executive will be entitled to participate in any pension, insurance or
other employee benefit plan that is maintained at that time by the
Company for its executive officers, including programs of life and
medical insurance and reimbursement of membership fees in civic, social
and professional organizations.
(c) INCENTIVE EQUITY AWARDS. The Executive shall receive an
incentive stock award of 150,000 shares of the Company's common stock
and options to purchase up to 600,000 shares of the Company's common
stock, the terms and conditions of which are more fully set forth in
that certain Stock Option Agreement dated as of October 11, 1999.
(d) MISCELLANEOUS BENEFITS. The Company shall also provide
Executive with the following: (a) a $500 per month automobile
allowance, (b) a $500 expense allowance and (c) telephone card,
cellular phone, and major credit card.
5. TERMINATION.
(a) TERMINATION WITHOUT CAUSE. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement without
cause. Such termination will become effective upon the date specified
in such notice, provided that such date is at least 60 days from the
date of such notice. Upon any such termination without cause:
(i) for the remainder of the term of this Agreement
or for a period of 6 months following such termination,
whichever is less, the Company will continue to pay the
Executive her annual salary pursuant to Section 3(a) and her
Bonus pursuant to Section 3(b), and
(ii) the Company will continue to maintain for such
period, for the benefit of the Executive, the employee benefit
programs referred to in Section 4(b) that were in effect on
the date of such termination.
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(b) TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement at any
time for cause by given written notice of termination. Such termination
will become effective upon the giving of such notice, except that
termination based upon clause (v) below shall not become effective
unless the Executive shall fail to correct such breach within 30 days
of receipt of written notice thereof provided pursuant to the preceding
sentence. Upon any such termination for cause, the Executive shall have
no right to compensation, commission, bonus or reimbursement under
Section 3, or to participate in any employee benefit programs under
Section 4 for any period subsequent to the effective date of
termination. For purposes of this Section 5(b), "cause" shall mean: (i)
the Executive is convicted of a felony which is related to the
Executive's employment or the business of the Company; (ii) the
Executive, in carrying out her duties hereunder, has been found in a
civil action by the Company, to have committed willful gross negligence
or willful gross misconduct resulting, in either case, in material harm
to the Company; (iii) the Executive misappropriates Company funds or
otherwise defrauds the Company; (iv) the Executive materially breaches
any provision of Section 6 or Section 7; and (v) the Executive
materially fails to perform her duties under Section 2 resulting in
material harm to the Company.
(c) DEATH OR DISABILITY. Excepting for the conditions and
obligations contained in this Section 5(c), this Agreement and the
obligations of the Company hereunder will terminate upon the death or
disability of the Executive. For purposes of this Section 5(c),
"disability" shall mean that for a period of six months in any 12-month
period the Executive is incapable of substantially fulfilling the
duties set forth in Section 2 because of physical, mental or emotional
incapacity resulting from injury, sickness or disease.
Upon termination by death or disability, the Company will pay the
Executive or her legal representative, as the case may be: (i) her
annual salary at such time pursuant to Section 3(a) through the date of
such termination of employment; and (ii) the Executive's share of the
Bonus as set forth in Section 3(b) of this Agreement. ;
(d) SPECIAL TERMINATION. In the event that (i) the Executive,
with or without change in title or formal corporate action, shall no
longer exercise all of the duties and responsibilities and shall no
longer possess substantially all the authority set forth in Section 2;
or (ii) the Company materially breaches this Agreement or the
performance of its duties and obligations hereunder; or (iii) any
entity or person not now an executive officer of the Company becomes
either individually or as part of a group the beneficial owner of 30%
or more of the Company's common stock, the Executive, by written notice
to the Company, may elect to deem the Executive's employment hereunder
to have been terminated by the Company without cause under Section 5(a)
hereof, in which event the Executive shall be entitled to the
compensation payable pursuant to clauses (i)-(iii) of Section 5(a). for
the remainder of the term of this Agreement or for a period of 12
months following such termination, whichever is greater, and the
Company will continue to maintain for such period, for the benefit of
the Executive, the employee benefit programs referred to in Section
4(b) that were in effect on the date of such termination.
(e) VOLUNTARY TERMINATION. The Executive, on 30 days prior
written notice to the Company, may terminate her employment voluntarily
(i) at any time following termination of the initial Term or (ii) at
any time following the death or disabling illness of a member of the
Executive's immediate family or similar personal, non-business related
occurrence as a result of which the Executive concludes she must devote
a substantial amount of her time and energies to her family or other
personal matter and not to her business activities so as to preclude
her fulfilling her obligations under this Agreement. Upon any such
termination, the Company will pay the Executive (i) her annual salary
at such time pursuant to Section 3(a) through the date of such
termination of employment; and (ii) any bonus which would have been
payable through the date of termination pursuant to Section 3(b).
(F) CONTINUING EFFECT. Notwithstanding any termination of the
Executive's employment as provided in this Section 5 or otherwise, the
provisions of Sections 6 and 7 shall remain in full force and effect.
6. NON-COMPETITION AGREEMENT.
(a) COMPETITION WITH THE COMPANY. Until termination of her
employment and for a period of 12 months commencing on the date of
termination, the Executive, directly or indirectly, in association with
or as a stockholder, director, officer, consultant, employee, partner,
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joint venturer, member or otherwise of or through any person, firm,
corporation, partnership, association or other entity, will not compete
with the Company or any of its affiliates in the offer, sale or
marketing of products or services that are competitive with the
products or services offered by the Company, within any metropolitan
area in the United States or elsewhere in which the Company is then
engaged in the offer and sale of competitive products or services;
provided, however, the foregoing shall not prevent Executive from
accepting employment with an enterprise engaged in two or more lines of
business, one of which is the same or similar to the Company's business
(the "Prohibited Business") if Executive's employment is totally
unrelated to the Prohibited Business; provided, further, the foregoing
shall not prohibit Executive from owning up to 5% of the securities of
any publicly-traded enterprise provided Executive is not an employee,
director, officer, consultant to such enterprise or otherwise
reimbursed for services rendered to such enterprise. Provided however
that nothing contained herein shall prevent Executive from practicing
law and representing clients engaged in a line of business the same or
similar to the Company.
(b) SOLICITATION OF CUSTOMERS. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly
or indirectly, will not seek Prohibited Business from any Customer (as
defined below) on behalf of any enterprise or business other than the
Company, refer Prohibited Business from any Customer to any enterprise
or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any
Customer, or any enterprise or business other than the Company. For
purposes of this Section 6(b), the term "Customer" means any person,
firm, corporation, partnership, association or other entity to which
the Company or any of its affiliates sold or provided goods or services
during the 24-month period prior to the time at which any determination
is required to be made as to whether any such person, firm,
corporation, partnership, association or other entity is a Customer.
(c) SOLICITATION OF EMPLOYEES. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, will not
directly or indirectly, solicit employees of the Company for employment
by any person, enterprise, business, company, partnership, joint
venture or other entity. For the purposes of this Agreement, the term
"Employee " means any person, firm, corporation, partnership,
association or other entity which the Company, or any of its
affiliates, employed during the during the 24-month period prior to the
time at which any determination is required to be made as to whether
any such person, firm, corporation, partnership, association or other
entity is an Employee.
(d) NO PAYMENT. The Executive acknowledges and agrees that no
separate or additional payment will be required to be made to her in
consideration of her undertakings in this Section 6.
7. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
The Executive acknowledges that during her employment she will
learn and will have access to confidential information regarding the
Company and its affiliates, including without limitation (i)
confidential or secret plans, programs, documents, agreements or other
material relating to the business, services or activities of the
Company and its affiliates and (ii) trade secrets, market reports,
customer investigations, customer lists and other similar information
that is proprietary information of the Company or its affiliates
(collectively referred to as "confidential information"). The Executive
acknowledges that such confidential information as is acquired and used
by the Company or its affiliates is a special, valuable and unique
asset. All records, files, materials and confidential information
obtained by the Executive in the course of her employment with the
Company are confidential and proprietary and shall remain the exclusive
property of the Company or its affiliates, as the case may be. The
Executive will not, except in connection with and as required by her
performance of her duties under this Agreement, for any reason use for
her own benefit or the benefit of any person or entity with which she
may be associated or disclose any such confidential information to any
person, firm, corporation, association or other entity for any reason
or purpose whatsoever without the prior written consent of the board of
directors of the Company, unless such confidential information
previously shall have become public knowledge through no action by or
omission of the Executive.
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8. EQUITABLE RELIEF.
(a) The Company and the Executive recognize that the services
to be rendered under this Agreement by the Executive are special,
unique and of extraordinary character, and that in the event of the
breach by the Executive of the terms and conditions of this Agreement
or if the Executive, without the prior consent of the board of
directors of the Company, shall leave her employment for any reason and
take any action in violation of Section 6 or Section 7, the Company
will be entitled to institute and prosecute proceedings in any court of
competent jurisdiction referred to in Section 8(b) below, to enjoin the
Executive from breaching the provisions of Section 6 or Section 7. In
such action, the Company will not be required to plead or prove
irreparable harm or lack of an adequate remedy at law. Nothing
contained in this Section 8 shall be construed to prevent the Company
from seeking such other remedy in arbitration in case of any breach of
this Agreement by the Executive, as the Company may elect.
(b) Any proceeding or action must be commenced in the federal
courts, or in the absence of federal jurisdiction in state court, in
either case in Florida where the Company maintains its principal
offices. The Executive and the Company irrevocably and unconditionally
submit to the jurisdiction of such courts and agree to take any and all
future action necessary to submit to the jurisdiction of such courts.
The Executive and the Company irrevocably waive any objection that they
now have or hereafter irrevocably waive any objection that they now
have or hereafter may have to the laying of venue of any suit, action
or proceeding brought in any such court and further irrevocably waive
any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Final judgment against
the Executive or the Company in any such suit shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy or which shall be conclusive evidence of the
fact and the amount of any liability of the Executive or the Company
therein described, or by appropriate proceedings under any applicable
treaty or otherwise.
9. ASSIGNABILITY. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, provided that such successor or assign shall acquire all
or substantially all of the assets and business of the Company. The Executive's
obligations hereunder may not be assigned or alienated and any attempt to do so
by the Executive will be void.
10. SEVERABILITY.
(a) The Executive expressly agrees that the character,
duration and geographical scope of the provisions set forth in this
Agreement are reasonable in light of the circumstances, as they exist
on the date hereof. Should a decision, however, be made at a later date
by a court of competent jurisdiction that the character, duration or
geographical scope of such provisions is unreasonable, then it is the
intention and the agreement of the Executive and the Company that this
Agreement shall be construed by the court in such a manner as to impose
only those restrictions on the Executive's conduct that are reasonable
in the light of the circumstances and as are necessary to assure to the
Company the benefits of this Agreement. If, in any judicial proceeding,
a court shall refuse to enforce all of the separate covenants deemed
included herein because taken together they are more extensive than
necessary to assure to the Company the intended benefits of this
Agreement, it is expressly understood and agreed by the parties hereto
that the provisions of this Agreement that, if eliminated, would permit
the remaining separate provisions to be enforced in such proceeding
shall be deemed eliminated, for the purposes of such proceeding, from
this Agreement.
(b) If any provision of this Agreement otherwise is deemed to
be invalid or unenforceable or is prohibited by the laws of the state
or jurisdiction where it is to be performed, this Agreement shall be
considered divisible as to such provision and such provision shall be
inoperative in such state or jurisdiction and shall not be part of the
consideration moving from either of the parties to the other. The
remaining provisions of this Agreement shall be valid and binding and
of like effect as though such provision were not included.
11. NOTICES AND ADDRESSES. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
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To the Company: Quest Net Corp.
0000 X.X. 000 Xxxxxx, Xx0
Xxxxxxxx, Xxxxxxx 00000
To the Executive: Xxxxxxx X. Del Medico
00 Xxxx Xxxxx Xxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
12. COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
13. ARBITRATION. Except for any controversy or claim seeking equitable
relief as provided in Section 8 of this Agreement, any controversy or claim
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof or any other dispute between the parties, shall be
submitted to one arbitrator and settled by arbitration in Miami, Florida, in
accordance with the rules, then obtaining, of the American Arbitration
Association. Any reward made by such arbitrator shall be final, binding and
conclusive on all parties hereto for all purposes, and judgment may be entered
thereon in any court having jurisdiction thereof.
14 ATTORNEY'S FEES. In the event that there is any controversy or claim
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof, and any action or proceeding is commenced to enforce the
provisions of this Agreement, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
15. GOVERNING LAW. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided therein or performance
shall be governed or interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
17. ADDITIONAL DOCUMENTS. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
18. SECTION AND PARAGRAPH HEADINGS. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
Quest Net, Corp.
s/Xxxxxxx X. Del Medico, Executive By: /s/ Xxxxxx Xxxxxxx, Chairman
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