The following Form of Employment Agreement was entered into with the following
individuals: Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxxxxx XxXxxxxx,
Xxxxxxx Xxxxx, Xxxxx Santa Xxxxx, Xxxx Xxxxxx, and Xxxxxxxx Xxxx Xxxxxxx.
FORM OF EMPLOYMENT AGREEMENT
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THIS AGREEMENT is dated as of the 25th day of May, 2000 (the "Date of
this Agreement"), by and among , an adult individual (hereinafter referred to as
"Employee") and Voice & Data Communications (Latin America), Inc., a Delaware
corporation (the "Company").
WITNESSETH:
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WHEREAS, pursuant to a Merger Agreement by and among VDC
Communications, Inc. ("VDC"), the Company, Rare Telephony, Inc., a Nevada
corporation (f/k/a Washoe Technology Corporation) ("Rare Telephony"), and the
holders of all of the outstanding shares of common stock of Rare Telephony (the
"Rare Telephony Shareholders"), dated May 25, 2000 (the "Merger Agreement"),
Rare Telephony will be merging with and into the Company (the "Merger") for
shares of common stock of VDC (the "Shares");
WHEREAS, in connection with the Merger, VDC, the Company, the Rare
Telephony Shareholders, and Xxxxxxxx Ingersoll Professional Corporation entered
into an Escrow Agreement, dated May 25, 2000 (the "Escrow Agreement");
WHEREAS, prior to the execution of this Agreement, the Employee was an
employee of Rare Telephony or one of it subsidiaries; and
WHEREAS, the terms of the Merger Agreement provide for the execution of
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment Term, Duties and Acceptance.
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(a) The Company hereby retains the Employee as to render his
services to the Company and, at the direction of the Company's President, its
subsidiaries, upon the terms and conditions herein contained subject to the
direction of the Company through its principal executive officers (including,
without limitation, its Chief Executive and President) or its Board of Directors
(the "Board" or "Board of Directors").
(b) The Employee hereby accepts the foregoing employment and
agrees to devote his full time, best efforts, energy and skill to such
employment.
(c) The Employee shall not engage in any other business endeavor
or activity during the Employment Period.
(d) The Employee hereby agrees that any and all business
opportunities which are similar to or in competition with the Business of the
Company (as such term is used and defined in Section 6(b) below) and are
available as of the date hereof or become available to the Employee during the
Employment Period (as defined below) shall automatically become the sole
property of the Company without any obligation of the Company to compensate or
otherwise pay the Employee for such opportunities. The Employee further agrees
that any and all inventions, discoveries, developments and innovations conceived
by the Employee during the Employment Period relative to the duties under this
Agreement shall be the exclusive property of the Company; and the Employee
hereby assigns all right, title, and interest in the same to the Company.
(e) The term of the Employee 's employment hereunder (the
"Employment Period") shall commence and the effective date of this Agreement
shall be the "Effective Time" of the Merger (as defined in the Merger Agreement)
and shall end on the third anniversary of the Date of this Agreement, unless
sooner terminated as provided herein, provided, however, that the Employment
Period shall be extended and this Agreement shall be automatically renewed for
successive one-year periods unless: (i) this Agreement is terminated as
otherwise provided herein; or (ii) Employee provides written notice to the
Company of his desire not to extend the Employment Period at least sixty (60)
calendar days prior to the expiration of the then lapsing term. If the Merger
Agreement is terminated, this Agreement shall immediately become null and void.
The "Effective Time" of the Merger for purposes of this Agreement shall be the
"Effective Time" indicated on an "Effective Time Certificate" executed by VDC
Communications, Inc. at the closing of the Merger.
(f) The Employee shall comply with all policies of the Company
whether now existing or hereafter adopted including, without limitation,
policies on xxxxxxx xxxxxxx and harassment.
(g) Without the prior written permission of the Board of
Directors, the Employee shall not enter into agreements, execute instruments,
contractually bind, or incur expenses on behalf of the Company or its
subsidiaries in excess of $100. Without the prior written permission of the
Board of Directors, Employee shall not represent to any individual or entity
that he is an officer or authorized representative of VDC Communications, Inc.
or any subsidiary thereof other than the Company and the Company's subsidiaries.
2. Compensation and Expense Reimbursement.
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(a) As base compensation for the Employee duly rendering his
services to the Company and its subsidiaries pursuant to the terms of this
Agreement, the Company agrees to pay and Employee agrees to accept a base salary
("Base Salary") of Dollars ($ ,000) per annum to be paid in accordance with the
general payroll practices of the Company as from time to time in effect. Certain
additional compensation terms, if any, are set forth on Exhibit "A" hereto and
incorporated herein by reference. The Base Salary shall be subject to deductions
and withholdings permitted or required by law.
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(b) The Company will pay or reimburse Employee for all reasonable
and necessary out-of-pocket expenses incurred by him in the performance of his
duties under this Agreement and pre-approved by the Company in writing. Employee
shall keep detailed and accurate records of expenses incurred in connection with
the performance of his duties hereunder and reimbursement therefor shall be in
accordance with policies and procedures to be established from time to time by
the Board of Directors.
3. Fringe Benefits. Employee shall be entitled, subject to the terms
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and conditions of particular plans and programs, to all fringe benefits
generally afforded to other employees of the Company at Employee's level,
including, but not by way of limitation, the right to participate in any stock
option, major medical, and other employee benefit programs made generally
available, from time to time, by the Company.
4. Vacations. Employee shall be entitled to compensated vacation in each
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fiscal year, to be taken at times which do not unreasonably interfere with the
performance of Employee 's duties hereunder and otherwise in accordance with the
Company's vacation policies in effect from time to time as applied to other
Employees of the Company.
5. Termination.
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(a) Termination by Company for "Cause". In addition to any other
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remedies which the Company may have at law, in equity, or otherwise, if Employee
engages in (i) fraud, (ii) embezzlement, (iii) any other crime involving moral
turpitude, (iv) gross or willful neglect of duty, (v) material breach of any of
the provisions of this Agreement, on his part to be performed (including
material breach of the representations and warranties of Section 16), (vi) such
conduct as results or as is likely to result in damage to the reputation of the
Company, or any of the subsidiaries or affiliates of the Company, (vii) the
theft, misuse, or wrongful disclosure of confidential customer information
(including, without limitation, bank account or credit card numbers); or (viii)
if Employee declines to follow any significant instruction adopted by the Board
of Directors of the Company or given by the Company's Chief Executive Officer or
President, and communicated to Employee, the Company may at any time thereafter
terminate Employee's employment hereunder by written notice to him, effective
immediately and the date of the notice shall be the termination date. Any such
termination shall be deemed to be termination for "cause", for purposes of this
Agreement, the Escrow Agreement, and all other documents referencing a for
"cause" termination in this Agreement.
Upon the early termination of Employee's employment under this
Agreement by the Company for "cause," the Company shall pay to Employee : (i) an
amount equal to Employee 's Base Salary accrued through the effective date of
termination at the rate in effect at the time of termination, payable at the
time such payment is due; and (ii) any expense reimbursement amounts accrued to
the effective date of termination, payable on the effective date of termination.
Upon payment of such amounts, the Company shall have no further obligation to
Employee under this Agreement, and Employee shall have no further rights under
this Agreement. Upon the early termination of Employee 's employment under this
Agreement by the Company for "cause," a percentage of the Shares issued in the
name of the Employee in connection with the Merger (the "Employee Shares") shall
be forfeited and surrendered to VDC for cancellation as set forth in Section
5(e).
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(b) Termination by Company without "Cause". At any time, the
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Company may terminate this Agreement for any reason or no reason other than for
"cause" upon five (5) calendar days written notice to the Employee. Upon the
early termination of the Employee 's employment under this Agreement by the
Company "without cause," the Company shall pay to the Employee : (i) an amount
equal to the Employee 's Base Salary accrued through the effective date of
termination at the rate in effect at the time of termination, payable at the
time such payment is due; and (ii) any expense reimbursement amounts accrued to
the effective date of termination, payable on the effective date of termination.
Upon payment of such amounts, the Company shall have no further obligation to
Employee under this Agreement, and Employee shall have no further rights under
this Agreement.
(c) Death of Employee. This Agreement shall automatically
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terminate upon the death of Employee. Upon the early termination of this
Agreement as a result of death, the Company shall pay the Employee's estate: (i)
an amount equal to the Employee 's Base Salary accrued through the effective
date of termination at the rate in effect at the effective date of termination,
payable at the time such payment is due; and (ii) any expense reimbursement
amounts accrued to the effective date of termination, payable on the effective
date of termination. Upon payment of such amounts, the Company shall have no
further obligation to Employee under this Agreement, and Employee shall have no
further rights under this Agreement.
(d) Termination by Employee. At any time after the six month
--------------------------
anniversary of the date of this Agreement, the Employee may terminate this
Agreement by giving at least thirty (30) calendar days' prior written notice to
the Company. Upon the early termination of Employee 's employment under this
Agreement by the Employee pursuant to this Section, a percentage of the Employee
Shares shall be forfeited and surrendered to VDC for cancellation as set forth
in Section 5(e).
(e) Forfeiture of Shares. IF THE EMPLOYEE IS TERMINATED FOR
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"CAUSE" (PURSUANT TO SECTION 5(A).), RESIGNS FROM EMPLOYMENT (PURSUANT TO
SECTION 5(D)), OR BREACHES A MATERIAL TERM OF THIS AGREEMENT (ANY SUCH EVENT
CONSTITUTING A "DEFAULT EVENT"), THEN THE EMPLOYEE SHALL FORFEIT (AND SAID
SHARES SHALL BE SURRENDERED TO VDC FOR CANCELLATION) A PERCENTAGE OF THE
EMPLOYEE SHARES AS FOLLOWS: (A) 50% IF THE DEFAULT EVENT OCCURS WITHIN THE FIRST
ONE YEAR PERIOD FOLLOWING THE EFFECTIVE TIME; (B) 33% IF THE DEFAULT EVENT
OCCURS WITHIN THE SECOND ONE YEAR PERIOD FOLLOWING THE EFFECTIVE TIME; AND (C)
20% IF THE DEFAULT EVENT OCCURS WITHIN THE THIRD ONE YEAR PERIOD FOLLOWING THE
EFFECTIVE TIME. TO THE EXTENT THERE ARE NOT ENOUGH EMPLOYEE SHARES BEING HELD IN
ESCROW PURSUANT TO THE ESCROW AGREEMENT TO COVER THE FORFEITURES ABOVE, THEN,
WITHIN FIVE (5) CALENDAR DAYS OF RECEIVING NOTICE OF THIS FACT FROM THE COMPANY,
THE EMPLOYEE SHALL DELIVER ADDITIONAL VDC SHARES TO VDC FOR CANCELLATION TO
COVER ANY SUCH DEFICIENCY. FOR PURPOSES OF THE PERCENTAGE CALCULATIONS ABOVE,
ALL FRACTIONS SHALL BE ROUNDED UP. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT THE
FORFEITURE OF SHARES IN ACCORDANCE WITH THIS SECTION IS IN ADDITION TO ANY OTHER
REMEDIES WHICH THE COMPANY MAY HAVE AT LAW, IN EQUITY, OR OTHERWISE.
6. Covenant Not to Compete.
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(a) The Employee recognizes and acknowledges: (i) that the
execution of this Agreement containing the following Covenant Not to Compete was
a condition precedent to the closing of the Merger and the Company would not
have consummated said Merger without the same; and (ii) that the Company is
placing its confidence and trust in the Employee. The Employee , therefore,
covenants and agrees that during the Applicable Non-Compete Period (as defined
below), the Employee shall not, either directly or indirectly, without the prior
written consent of the Board of Directors: (i) engage in or carry on any
business which is similar to or is in competition with the Business of the
Company (as such term is used and defined below); (ii) be or become an employee,
agent, consultant, representative, director or officer of any person, firm,
corporation, association or other entity which is engaged in or is carrying on
any business which is similar to or in competition with the Business of the
Company; or (iii) solicit for employment or employ any person employed by the
Company (or its subsidiaries) at any time during the 12-month period immediately
preceding such solicitation or employment.
(b) As used in this Agreement, the term "Business of the Company"
shall include all material business activities in which the Company and its
subsidiaries are engaged now which includes, but is not limited to,
international and domestic (i.e. in the United States) long distance
telecommunications services.
(c) Employee hereby recognizes and acknowledges that the existing
Business of the Company extends throughout the United States and therefore
agrees that the covenants not to compete contained in this Section 6 shall be
applicable in and throughout the United States, as well as throughout such
additional areas, states or countries in which the Company may be (or has
prepared written plans to be) doing business as of the date of termination of
the Employee 's employment hereunder. Employee further warrants and represents
that, because of his varied skill and abilities, he does not need to compete
with the Business of the Company and that this Agreement will not prevent him
from earning a livelihood and acknowledges that the restrictions contained in
this Section 6 constitute reasonable protections for the Company.
(d) As used in this Section 6, "Applicable Non-Compete Period"
shall mean all periods of employment hereunder and that period of two (2) years
following the termination of Employee 's employment hereunder.
7. Trade Secrets and Confidential Information. Employee recognizes
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and acknowledges that certain information including, without limitation,
information pertaining to the financial condition of the Company, its systems,
methods of doing business, agreements with customers or suppliers or other
aspects of the Business of the Company or which is sufficiently secret to derive
economic value from not being disclosed or customer confidential personal
information (including, without limitation, credit card and banking account
data) ("Confidential Information") may be made available or otherwise come into
the possession of the Employee by reason of his employment with the Company.
Accordingly, the Employee agrees that he will not at any time disclose any
Confidential Information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever or make use to his personal
advantage or to the advantage of any third party, of any Confidential
Information, without the prior written consent of the Board of Directors. The
Employee shall, upon termination of employment, return to the Company all
documents which reflect Confidential Information (including copies thereof).
Notwithstanding anything heretofore stated in this Section 7, the Employee 's
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obligations under this Section 7 shall not, after termination of the Employee 's
employment with the Company, apply to information which has become generally
available to the public without any action or omission of the Employee (except
that any Confidential Information which is disclosed to any third party by an
employee or representative of the Company who is not authorized to make such
disclosure shall be deemed to remain confidential and protectable by the
Employee under this Section 7).
8. Severability. The invalidity or unenforceability of any term of
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this Agreement shall not affect the validity or enforceability of this Agreement
or any of its other terms; in the event that any court or arbitrator determines
that the time period and/or scope of any paragraph or section of this Agreement
is unenforceably long or broad, as the case may be, then, and in either such
event, neither the enforceability nor the validity of said paragraph or section
as a whole or the Agreement as a whole shall be affected. Rather, the scope of
the section shall be revised by the court or arbitrator as little as possible to
make the section enforceable. If the court or arbitrator will not revise said
paragraph or section, then this Agreement shall be construed as though the
invalid or unenforceable term(s) were not included herein
9. Breach. The Employee hereby recognizes and acknowledges that
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irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by the Employee of any of the terms of provisions
Section 6 or 7 hereunder, and the Employee therefore agrees that the Company
shall be entitled to an injunction (without posting bond) restraining Employee
from engaging in any activity constituting such breach or threatened breach.
Nothing contained herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company at law, in equity, or
otherwise for breach or threatened breach of this Agreement, including but not
limited to, the recovery of damages from the Employee and, if the Employee is an
employee of the Company, the termination of his employment with the Company in
accordance with the terms and provisions of this Agreement.
10. Arbitration
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(a) Arbitration Disclosures. (i) arbitration is usually final
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and binding on the parties and subject to only very limited review by a court;
(ii) the parties are waiving their right to litigate in court, including their
right to a jury trial; (iii) Pre-arbitration discovery is generally more limited
and different from court proceedings; (iv) any party's right to appeal or to
seek modification of rulings by arbitrators is strictly limited; and (v) a panel
of arbitrators might include an arbitrator who is or was affiliated with the
telecommunications industry.
(b) Arbitration. All controversies or claims arising out of or
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relating to this Agreement, or arising out of or relating to the employment
contemplated herein, or the termination thereof, shall be determined by binding
arbitration applying the laws of the State of New Jersey and the rules of the
American Arbitration Association applicable to the Commercial Panel, except that
there shall only be one (1) arbitrator. The arbitration shall be conducted at
Acquiror's offices in Greenwich, Connecticut, or at such other location
designated by Acquiror. The decision of the arbitrator shall be final and
binding upon the parties, shall include written findings of law and fact, and
judgment may be obtained thereon in any court of competent jurisdiction. Each
party shall bear the cost of preparing and presenting its own case (except as
provided for in Section 4 of the Escrow Agreement). The cost of the arbitration,
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including the fees and expenses of the arbitrator, shall be shared equally by
the parties thereto unless the award otherwise provides (except as provided for
in Section 4 of the Escrow Agreement). Nothing herein shall preclude a party
from seeking injunctive relief to restrain any breach or threatened breach of
the covenants and agreements set forth in this Agreement or otherwise to obtain
specific performance of any such covenant or agreement, without the necessity of
posting bond or security in connection therewith.
11. Remedies Cumulative. Except as otherwise expressly provided herein,
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each of the rights and remedies of the parties set forth in this Agreement shall
be cumulative with all other such rights and remedies, as well as with all
rights and remedies of the parties otherwise available at law or in equity.
12. Counterparts. This Agreement may be executed in multiple counterparts
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each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may also be executed and delivered
by exchange of facsimile copies showing the signatures of the parties, and those
signatures need not be affixed to the same copy. The facsimile copies showing
the signatures of the parties will constitute originally signed copies of the
Agreement requiring no further execution.
13. Waiver. The failure of either party at any time or times to require
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performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. To be effective, any waiver must be contained in
a written instrument signed by the party waiving compliance by the other party
of the term or covenant as specified. The waiver by either party of the breach
of any term or covenant contained herein, whether by conduct or otherwise, in
any one or more instances, shall not be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
14. Governing Law. This Agreement shall be governed by the laws of the
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State of New Jersey without regard to principles of conflict of laws.
15. Complete Agreement. This Agreement constitutes the complete and
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exclusive agreement between the parties hereto which supersedes all proposals,
oral and written, and all other communications between the parties relating to
the subject matter contained herein. Without limiting the foregoing, the
Agreement supersedes and renders null and void any employment or consulting
agreement the Employee had with Rare Telephony or its subsidiaries (or all of
their predecessors) prior to the Merger. Notwithstanding the foregoing, this
Agreement shall not supersede the Merger Agreement or the Schedules or Exhibits
thereto or the Escrow Agreement. No change or modification of this Agreement
shall be valid or binding unless the same is in writing and signed by the
parties hereto.
16. Warranties. The Employee represents, warrants, covenants and agrees
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that:
(a) The Employee has a right to enter into this Agreement, that
he is not a party to any agreement or understanding whether or not written which
would prohibit or restrict his performance of his obligations under this
7
Agreement and that he will not use in the performance of his obligations
hereunder any proprietary information of any other party which he is legally
prohibited from using; and
(b) The Employee has had an opportunity to consult with an
attorney, and such other experts or consultants as he deemed necessary or
prudent, regarding this Agreement and the Employee has read and understands this
Agreement.
Each representation and warranty of Employee shall survive the execution of this
Agreement and shall continue throughout the Employment Period. The right to any
remedy based on such representations and warranties will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and
delivery of this Agreement, with respect to the accuracy or inaccuracy of or
compliance with, any such representation or warranty.
17. Notice. All notices, requests, instructions, consents and other
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communications to be given pursuant to this Agreement shall be in writing and
shall be deemed received (i) on the same day if delivered in person, by same-day
courier or by telegraph, telex or facsimile transmission (receipt confirmed)
(provided that telegraph, telex or facsimile notice shall be deemed received on
the next business day if received after 5:00 p.m. Eastern Standard Time), (ii)
on the next day if delivered by overnight mail or courier, or (iii) on the date
indicated on the return receipt, or if there is no such receipt, on the third
calendar day (excluding Sundays) if delivered by certified or registered mail,
postage prepaid. If notice is being given under both this Agreement and the
Escrow Agreement to the Employee, then notice may be given to the Employee for
purposes of both such agreements at the address given for the Employee in the
Escrow Agreement.
18. Assignment. This Agreement shall inure to the benefit of and be binding
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upon the Company, its successors and assigns. This Agreement may not be assigned
by the Employee without the prior written consent of the Company. This Agreement
may be assigned by the Company and the execution of this Agreement by the
Employee shall be deemed a consent to such assignment.
19. Material Provisions; Survival of Certain Terms. The following sections
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(including all subsections thereto) of the Agreement, without limitation, shall
be deemed material: Section 1, Section 5, Section 6, Section 7, Section 10,
Section 14, and Section 21. The terms and provisions contained in this Agreement
that by their sense and context are intended to survive the termination of this
Agreement shall so survive the termination of this Agreement; including, without
limitation, Section 5, Section 6, Section 7, Section 10, Section 14, and Section
21.
20. Payment Offsets. The Company shall be entitled to deduct from any
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payment due to Employee under this Agreement any payments or amounts owed to the
Company or any of its affiliates from the Employee.
21. Statement. Within ten (10) calendar days of receipt of a written
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request from the Board of Directors, the Employee shall provide the President of
the Company with a statement (sworn before a Notary Public and signed by said
Notary Public) that, as of the date of said statement, the Employee has complied
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with all material terms of this Agreement. This provision shall expire two (2)
years following the termination of this Agreement.
22. Rule of Construction; Pronouns. No rule of construction requiring
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interpretation against the drafting party shall apply to the interpretation of
this Agreement. To the extent the terms of this Agreement and the Escrow
Agreement conflict, the terms of this Agreement shall govern. Whenever the
context of this Agreement may require, any pronoun will include the
corresponding masculine, feminine and neuter form, and the singular form of
nouns and pronouns will include the plural.
23. Recitals. The recitals to this Agreement constitute part of this
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Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST: Voice & Data Communications
(Latin America), Inc.
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Signature By:
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Xxxxxxxxx X. Xxxxx, Chief Executive Officer
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Print Name
WITNESS: EMPLOYEE :
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Signature
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Print Name
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EXHIBIT "A"
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