1
Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of February 1,
1998, between LONG DISTANCE INTERNATIONAL INC., a Florida corporation with
offices at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx, XX 00000 (the
"Company"), and XXXXXXXXX XXXXXX, residing at ____________________________
("Employee").
The Company desires to engage Employee to perform services for the
Company, and any present or future parent, subsidiary, or affiliate of the
Company, and (subject to Section 10) any successor or assign of the Company (the
"LDI Companies"), and Employee desires to perform such services, on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
SECTION 1. Term
The Company agrees to employ Employee, and Employee agrees to
serve, on the terms and conditions of this Agreement, for a period commencing
February 1, 1998 (the "Commencement Date") and ending three (3) years from the
Commencement Date, or such shorter period as may be provided for herein. The
period during which Employee is employed hereunder is hereinafter referred to as
the "Employment Period."
SECTION 2. Duties and Services
Employee shall serve as Chief Financial Officer of the
Company. In performance of her duties, Employee shall be subject to the
direction of the Board of Directors of the Company and the co-chief executive
officers of the Company. Employee agrees to her employment as described in this
Section 2 and agrees to devote all of her business time and efforts to the
performance of her duties under this Agreement.
SECTION 3. Compensation
(a) Base Salary. The Company shall pay Employee, during the
Employment Period, an annual base salary of $100,000, ("Base Salary"), payable
in equal, bi-weekly installments, or in such other manner or on such days as the
Board of
2
Directors of the Company may prescribe for the payment of salaries to employees
of the Company.
(b) Options.
(i) The Company shall award Employee, subject to
the terms and provisions of the Company's stock option plan ("Stock Option
Plan") and the stock option agreement to be executed and delivered pursuant
thereto, options (the "Stock Options") to purchase 120,000 shares of the
Company's common stock, $0.001 par value per share ("Common Stock"), at an
exercise price of $2.10 per share.
(ii) The Stock Options shall have a term of seven
(7) years following the date the related Stock Options vest, subject to the
following: (x) if Employee's employment hereunder shall be terminated by Company
for a reason set forth in clauses (ii), (iii) or (iv) of Section 9(a)(1), or by
Employee, then any unvested Stock Options and any vested and unexercised Stock
Options shall terminate on the effective date of such termination; or (y) if
Employee's employment hereunder shall be terminated by the Company for a reason
set forth in Section 9(a)(1)(i) or by reason of Employee's death, any unvested
Stock Options shall cease to vest on the effective date of termination and any
vested but unexercised Stock Options shall terminate on the six month
anniversary of the effective date of termination.
(iii) The Stock Options shall vest during the
Employment Period in accordance with the following schedule:
on June 30, 1998, 20,000 shares and on each of September 30,
December 31, 1998, March 31, June 30, September 30, December 31, 1999, March 31,
June 30, September 30, and December 31, 2000, 10,000 shares.
(c) Benefits. Employee shall be entitled to participate in all
benefits for which Employee qualifies that the Company may make available to
executive or administrative employees, on like terms, including all medical,
disability, hospital, and health insurance plans and arrangements.
(d) Severance. If the Company shall give notice of termination of
Employee's services hereunder for reasons other than those described in Section
9.a. hereof, Employee shall be entitled to receive her full compensation (i.e.,
her Base Salary and the vesting of Stock Options) to such effective date, plus a
severance payment, payable on such date, equal to the amount of her Base Salary,
at the rate provided in Section 3 which would have been paid over a period of
three (3) months, plus Stock Options that would have vested from such effective
date through the end of such three (3) month period shall be deemed to have
vested on such effective date. In the event the Company becomes obligated to pay
any severance pay, the Company may elect to make
2
3
payments of the Base Salary component thereof in regular installments or in a
single payment equal to the present value thereof.
(e) Limitations. The Company shall have the right to deduct or
withhold from all compensation and benefits payable hereunder all social
security taxes, other federal, state and local taxes, and all other charges and
amounts as may be required by law to be deducted or withheld.
SECTION 4. Expenses
Employee shall be entitled to reimbursement for reasonable
travel and other out-of-pocket expenses necessarily incurred in the performance
of her duties hereunder, upon submission and approval of written statements and
bills in accordance with the then regular procedures of the Company. Employee
shall be entitled to reasonable vacations in accordance with the then regular
procedures of the Company governing executives.
SECTION 5. Representations and Warranties of Employee
Employee represents and warrants to the Company that (a)
Employee is under no contractual or other restriction or obligation which is
inconsistent with the execution of this Agreement, the performance of her duties
hereunder, or the other rights of the Company hereunder and (b) Employee is
under no physical or mental disability that would hinder her performance of
duties under this Agreement.
SECTION 6. Non-Competition
(a) In view of the unique and valuable services it is
expected Employee will render to the LDI Companies, Employee's knowledge of the
customers, trade secrets, and other proprietary information relating to the
business of the Company and its customers and suppliers and similar knowledge
regarding the LDI Companies it is expected Employee will obtain, and in
consideration of the compensation to be received hereunder, Employee agrees (i)
that she will not during the period she is employed by any of the LDI Companies
under this Agreement or otherwise Participate In (hereinafter defined in this
Section 6) any other business or organization, whether or not such business or
organization now is or shall then be competing with, or now is or shall then be
of a nature similar to, the business of any of the LDI Companies, and (ii) for a
period of six (6) months after she ceases to be employed by any of the LDI
Companies under this Agreement or otherwise, she will not compete with or be
engaged in the same business as, or Participate In any other business or
organization which during such six-month period competes with or is engaged in
the same business as, either the Company or any of the other LDI Companies for
which Employee renders services
3
4
hereunder, with respect to any product or service sold or activity engaged in up
to the time of such cessation in any geographical area in which at the time of
such cessation such product or service is sold or activity engaged in, except
that in each case the provisions of this Section 6(a) will not be deemed
breached merely because Employee owns not more than 5% of the outstanding common
stock of a corporation, if, at the time of its acquisition by Employee, such
stock is listed on a national securities exchange, is reported on NASDAQ, or is
regularly traded in the over-the-counter market by a member of a national
securities exchange.
(b) The term "Participate In" shall mean: "directly or
indirectly, for her own benefit or for, with, or through any other person, firm,
or corporation, own, manage, operate, control, loan money to, or participate in
the ownership, management, operation, or control of, or be connected as a
director, officer, employee, partner, consultant, agent, independent contractor,
or otherwise with, or acquiesce in the use of her name in."
(c) In view of the unique and valuable services it is
expected Employee will render to the LDI Companies, Employee's knowledge of the
customers, trade secrets, and other proprietary information relating to the
business of the Company and its customers and suppliers and similar knowledge
regarding the LDI Companies it is expected Employee will obtain, and in
consideration of the compensation to be received hereunder, Employee agrees:
(i) that she will not during the period she is employed
by any of the LDI Companies under this Agreement or otherwise directly or
indirectly reveal the name of, solicit or interfere with, or endeavor to entice
away from any of the LDI Companies any of its suppliers, customers, or
employees; and,
(ii) for a period of two (2) years after she ceases to
be employed by any of the LDI Companies under this Agreement or otherwise, that
neither she nor any of her affiliates will:
(A) intentionally solicit, or attempt to cause any
employee of the LDI Companies to terminate her employment therewith or hire any
person who within twelve (12) months preceding such hiring had been employed
thereby; provided, however, that this subsection (A) shall not prohibit such
action with respect to any person whose employment is terminated or suspended by
the LDI Companies; and
(B) in any manner intentionally (1) cause or
attempt to cause any customer, supplier or other independent contractor of the
LDI Companies to reduce the level of business theretofore conducted by such
customer, supplier or other independent contractor with, or to cease doing
business with, the LDI Companies, or (2) discourage or attempt to discourage any
prospective customer, supplier or other independent contractor from doing
business with the LDI Companies.
4
5
SECTION 7. Patents, Etc.
Any interest in patents, patent applications, inventions,
technological innovations, copyrights, copyrightable works, developments,
discoveries, designs, and processes ("Such Inventions") which Employee now or
hereafter during the period she is employed by any of the LDI Companies under
this Agreement or otherwise and for six months thereafter may own, conceive of,
or develop and either relating to the fields in which any of the LDI Companies
may then be engaged or contemplates being engaged or conceived of or developed
utilizing the time, material, facilities, or information of any of the LDI
Companies, shall belong to the Company; as soon as Employee owns, conceives of,
or develops any Such Invention, she agrees immediately to communicate such fact
in writing to the Secretary of the Company, and without further compensation,
but at the Company's expense (except as noted in clause (a) of this Section 7),
forthwith upon request of the Company, Employee shall execute all such
assignments and other documents (including applications for patents, copyrights,
trademarks, and assignments thereof) and take all such other action as the
Company may reasonably request in order (a) to vest in the Company all
Employee's right, title, and interest in and to Such Inventions, free and clear
of liens, mortgages, security interests, pledges, charges, and encumbrances
("Liens") (Employee to take such action, at her expense, as is necessary to
remove all such Liens) and (b), if patentable or copyrightable, to obtain
patents or copyrights (including extensions and renewals) therefor in any and
all countries in such name as the Company shall determine.
SECTION 8. Confidential Information
All confidential information (including, without limitation,
trade secrets, know how, proprietary information, price lists, marketing plans
and customer lists), which Employee may now possess, may obtain during or after
the Employment Period, or may create prior to the end of the Employment Period
relating to the business of the Company or of any customer or supplier of the
Company shall not be published, disclosed, or made accessible by Employee to any
other person, firm, or corporation either during or after the termination of her
employment or used by her except during the Employment Period in the business
and for the benefit of the Company in each case without prior written permission
of the Company. Employee shall return all tangible evidence of such confidential
information to the Company prior to or at the termination of her employment.
5
6
SECTION 9. Termination
(a) Notwithstanding anything herein contained, if on or after the
date hereof and prior to the end of the Employment Period,
(1) either (i) Employee shall be physically or mentally
incapacitated or disabled or otherwise unable fully to discharge her
duties hereunder for a period of three months, (ii) Employee shall be
convicted of a felony, (iii) Employee materially breaches a fiduciary
duty, or (iv) Employee breaches a material term of this Agreement then,
and in each such case, the Company shall have the right to give notice of
termination of Employee's services hereunder as of a date (not earlier
than 10 days from such notice) to be specified in such notice, and
Employee's employment hereunder shall terminate on the date so specified;
provided, however, that, in the case of an event specified in clause (iii)
or (iv), if the breach is curable within 30 days or less, then the Company
shall provide, if Employee has not cured such breach to the satisfaction
of the Company within the period specified, then Employee with notice of
such breach and a reasonable opportunity to cure such breach under the
circumstances (but not more than 30 days), and Employee's employment
hereunder shall terminate on the date so specified, or
(2) Employee shall die, then Employee's employment hereunder
shall terminate on the date of Employee's death. Upon termination of
Employee's employment under this Section 9(a), Employee or her estate, as
the case may be, shall be entitled to receive her Base Salary, at the rate
provided in Section 3, to the date on which termination shall take effect.
(b) Nothing contained in this Section 9 shall be deemed to limit any
other right the Company may have to terminate Employee's employment
hereunder upon any ground permitted by law (a termination "without
cause"), by giving notice of termination of Employee's services hereunder.
Upon termination of Employee's employment under this Section 9(b),
Employee shall be entitled to severance pay pursuant to and in accordance
with the terms of Section 3(d) hereof.
SECTION 10. Merger, Etc.
In the event of a future disposition of (or including) the
properties and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, or otherwise, then the Company may elect to
assign this Agreement and all of its rights and obligations hereunder to the
acquiring or surviving corporation; provided that such corporation shall assume
in writing all of the obligations of the Company hereunder; and provided further
that the Company (in the event and so long as it remains
6
7
in business as an independent going enterprise) shall remain liable for the
performance of its obligations hereunder in the event of an unjustified failure
of the acquiring corporation to perform its obligations under this Agreement.
SECTION 11. Survival
The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment, irrespective of any investigation made by or on
behalf of any party.
SECTION 12. Modification
This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all existing
agreements between them concerning such subject matter, and may be modified only
by a written instrument duly executed by each party.
SECTION 13. Notices
Any notices or other communication required or permitted by
this Agreement shall be sufficiently given if delivered in person, by courier,
or if sent by registered or certified mail, postage prepaid, return receipt
requested, or by Express Mail, or similar overnight delivery service, or by
facsimile transmission (followed by telephone communication and hard copy), at
the address set forth in the preamble to this Agreement (or to such other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 13). Any such notice or communication shall be deemed
given (1) if sent by certified or registered mail, return receipt requested,
postage prepaid, five calendar days after being deposited in the United States
mail, postage prepaid; (2) if sent by Express Mail, Federal Express or similar
overnight delivery service for next Business Day delivery, the next Business Day
after being entrusted to such service, with delivery charges prepaid or charged
to the sender's account; (3) if sent by facsimile transmission, on the date sent
and (4) if delivered in person, by courier, on the date of delivery.
SECTION 14. Waiver
Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more
7
8
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
SECTION 15. Binding Effect
Employee's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, such rights shall not be subject
to commutation, encumbrance, or the claims of Employee's creditors, and any
attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Employee and her
heirs and personal representatives, and shall be binding upon and inure to the
benefit of the Company and its successors and those who are its assigns under
Section 10.
SECTION 16. No Third Party Beneficiaries
Except as provided in Section 15, this Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.
SECTION 17. Headings
The headings in this Agreement are solely for the convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.
SECTION 18. Counterparts; Governing Law
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. It shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
conflict of laws rule which would have the substantive law of any other state
apply to the subject matter hereof.
SECTION 19. Specific Performance
Since a breach of the provisions of Sections 6, 7 and 8 could
not adequately be compensated by money damages, the Company shall be entitled,
in
8
9
addition to any other right and remedy available to it, to an injunction
restraining such breach or a threatened breach, and in either case no bond or
other security shall be required in connection therewith, and Employee hereby
consents to the issuance of such injunction. Employee agrees that the provisions
of Sections 6, 7 and 8 are necessary and reasonable to protect the Company in
the conduct of its business. If any restriction contained in Sections 6, 7 and 8
shall be deemed to be invalid, illegal, or unenforceable by reason of the
extent, duration, or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.
SECTION 20. Severability
If any provision of this Agreement (including any provision
relating to the scope or term of or geographic areas covered by Sections 6, 7 or
8) or the application thereof to any person or circumstance is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby; provided that, if any provision
hereof or the application thereof shall be so held to be invalid, void or
unenforceable by a final judgment of a court of competent jurisdiction, then
such court may substitute therefor a suitable and equitable provision in order
to carry out, so far as may be valid and enforceable, the intent and purpose of
the invalid, void or unenforceable provision and if such court shall fail or
decline to do so, the parties shall negotiate in good faith a suitable and
equitable substitute provision. To the extent that any provision shall be
judicially unenforceable in any one or more jurisdictions, such provision shall
not be affected with respect to any other jurisdiction, each provision with
respect to each state being construed as several and independent.
9
10
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
LONG DISTANCE INTERNATIONAL INC.
By:
-----------------------------------
Xxxxxxxx Xxxxxxxxx, Chairman
----------------------------------------
Xxxxxxxxx Xxxxxx
10
