EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 23rd day of December, 1997 between
Susan Yezzi individual residing at 23 Norman Lane, Darien, CT 06820 (hereinafter
referred to as "Employee") and ITDS Intelicom Services, Inc. a Delaware
corporation (hereinafter referred to as "Corporation").
WHEREAS, the Corporation desires to employ the Employee, and the Employee
desires to serve as an employee of Corporation on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises of
the parties hereto, the Corporation and the Employee agree as follows:
1. Employment: The Corporation hereby agrees to employ the Employee as
Executive Vice-President of Operations, and the Employee hereby agrees to
function as such for the Corporation on the terms and conditions hereinafter
stated, subject to the directives of the Board of Directors of the Corporation
(the "Board").
2. Term of Employment. The term of this Agreement shall begin on or about
February 1, 1998 (but no later than March 1, 1998) and shall continue in full
force and effect until January 31, 2001, unless sooner terminated as provided
herein.
3. Compensation:
(a) During the term of this Agreement, for all services rendered by
Employee under this Agreement, the Corporation shall pay the Employee an annual
base salary of Two Hundred and Twenty Five Thousand dollars ($225,000.00) per
annum, payable in arrears at a rate of Eighteen Thousand, Seven Hundred and
Fifty dollars ($18,750.00) on the last day of each month or more frequently in
the discretion of the Board. All compensation payable under this Agreement shall
be subject to applicable federal and state withholding tax requirements and
other deductions approved by Employee as well as an annual salary adjustment
based upon changes in the Consumer Price Index.
(b) In addition to the annual base salary described in Section 3(a)
hereof, the Corporation grants Employee a right to immediately become eligible
to participate in the ITDS Employee Stock Option Plan and the Employee Stock
Purchase Plan (collectively, the "Plan"), copies of which are attached hereto
and made a part hereof as Attachment "A," upon the commencement of this
Agreement with Corporation. On the execution of this Agreement, Employee shall
be entitled to receive options to purchase fifty thousand (50,000) shares of
Common Stock of the Corporation, at market value on the date of grant, vesting
over a 4 year period pursuant to the terms of the Plan.
(c) In addition to the base salary and stock options as set forth above,
on February 1, 1997 the Employee shall receive a one time signing bonus equal to
One Hundred Twenty-Five Thousand Dollars ($125,000.00).
(d) In addition to the aforesaid benefits, Employee is eligible to
receive an annual bonus based on Employee and Corporation performance subject to
Board approval.
(e) The Corporation agrees to assume Employee's existing Flexible
Premium Adjustable Life Insurance Policy and pay associated premiums.
4. Fringe Benefits:
(a) Subject to applicable waiting periods and Employee's insurability,
Corporation shall provide the Employee, at no cost to Employee, with medical and
hospitalization insurance coverage similar to that offered to other
Vice-Presidents of the Corporation. Subject to applicable waiting periods,
during the term hereof, Corporation shall provide the Employee, at no cost to
the Employee, with long term disability insurance coverage similar to that
offered to other officers of the Corporation.
(b) Subject to applicable waiting periods, Employee will be eligible to
participate in the Corporation's 401K plan.
5. Duties and Extent of Services: Upon the execution of this Agreement and
throughout its term, the duties of the Employee shall include, but are not
limited to, the following:
(a) Provide managerial and executive supervision and support to the
Corporation;
(b) Responsibility for the delivery of all products and services of the
Corporation to customers pursuant to contractual obligations or otherwise;
(c) Provide day to day on site executive management of the Corporation's
operations in Champaign, Illinois;
(d) Such other duties and responsibilities as may be assigned by the
Board from time to time;
(e) Employee will work exclusively for the Corporation during the term
of this Agreement, Employee shall exert her best efforts and shall devote no
less than the greater of: (i) fifty (50) hours per week, or (ii) the amount of
time necessary for Employee to perform her duties with regard to the business
and affairs of the Corporation in accordance with this Agreement. During the
term of this Agreement, Employee shall not, directly or indirectly, alone or as
a member of the partnership, or as an officer, director, shareholder, owner,
agent or employee of any other corporation, be engaged in or concerned with any
other compensable duties or pursuits whatsoever requiring her personal services
without the prior written consent of the Corporation, which consent may be
withheld for any reason or for no reason.
6. Vacation: During each year of the term of this Agreement, the Employee
shall be entitled to four (4) weeks' vacation, the time of which shall be
determined after consultation with the Board of the Corporation. For purposes of
this Section 6, Employee shall be entitled to carry forward any unused vacation
time from one period to another and any unused accrued vacation will be paid to
Employee upon termination.
7. Termination: The Employee's employment hereunder shall terminate on the
date set forth in Section 2 hereof, or sooner upon the occurrence of any of the
following events:
(a) The Employee's death;
(b) The termination of the Employee's employment hereunder by
Corporation, at its option, to be exercised by written notice from Corporation
to the Employee, upon the Employee's incapacity or inability to perform her
services as contemplated herein for a period of at least seventy-five (75)
consecutive days or an aggregate of one hundred (100) consecutive or
non-consecutive days during any twelve (12) month period during the term hereof
due to the fact that her physical or mental health shall have become impaired so
as to make it impossible or impractical for her to perform the duties and
responsibilities contemplated for her hereunder; or
(c) The termination for "cause" of the Employee's employment hereunder
by Corporation, at its option, to be exercised by written notice from
Corporation to the Employee. The term "cause," as used herein, shall mean: (i)
the Employee's inability or incapacity to perform her duties and/or services in
accordance with the reasonable expectation of the Corporation, (ii) the
Employee's willful misconduct or gross negligence in the performance of her
duties on behalf of the Corporation, or the Employee's dishonesty in the
performance of his duties on behalf of the Corporation, (iii) the neglect,
failure or refusal of the Employee to carry out any reasonable request of the
Board for the provision of services hereunder, (iv) the material breach of any
provision of the Agreement by the Employee or (v) the Employee's plea of guilty
or nolo contendere to, or conviction of any crime involving moral turpitude,
common law fraud, dishonesty, theft, or unethical conduct.
(d) Cessation of the Corporation's business.
In the event of any such termination, Corporation shall pay to Employee
such portion of his annual base salary payable to Employee to the date such
termination becomes effective, and thereafter Employee shall have no claim for
any further compensation hereunder.
8. Restrictions On Employee: During the period commencing on the date
hereof and ending two (2) years after the termination of the Employee's
employment by Corporation for any reason, the Employee shall not directly or
indirectly induce or attempt to induce any of the employees of Corporation to
leave the employ of Corporation.
9. Covenant Not to Compete: During the period commencing on the date
hereof, and ending one (1) year after the termination of the Employee's
employment for any reason, the Employee shall not, except as a passive investor
in publicly held companies, directly or indirectly engage in, associate with, or
own or control any interest in, or act as principal, director, officer, agent,
or employee of, or consultant to: (i) Cincinnati Bell Information Systems,
Systematics, Saville Systems, Cable Services Group, Computer Sciences
Corporation, Electronic Data Systems,
Alltel, Comsoft, LHS, Danet, Subscriber Computing, H.O. Software, Baja Systems
or their successors or assigns, or (ii) any person, firm or corporation, located
in the eastern third of the United States, whose activity is (a) a venture or
business, substantially similar to that of Corporation, and/or (b) which is in
direct competition with the Corporation. Notwithstanding anything to the
contrary contained herein, to the extent Corporation (i) makes an absolute
assignment of the bulk of its assets for the benefit of creditors, (ii) consents
to the appointment of a bankruptcy trustee, (iii) institutes bankruptcy
proceedings, or (iv) experiences a cessation, the provisions of this Section 9
shall lapse.
10. Proprietary Information:
(a) For purposes of this Agreement, "proprietary information" shall mean
any information relating to the business of Corporation or any entity in which
Corporation has an ownership interest that has not previously been publicly
released by duly authorized representatives of Corporation and shall include
(but shall not be limited to) information encompassed in all proposals,
marketing and sales plans, financial information, costs, pricing information,
computer programs, customer information, customer lists, and all methods,
concepts or ideas in or reasonably related to the business of Corporation or any
entity in which Corporation has an interest. The Employee agrees to regard and
preserve as confidential all proprietary information, whether he has such
information in his memory or in writing or other physical form. The Employee
will not, without written authority from Corporation to do so, directly or
indirectly, use for her benefit or purposes, nor disclose to others, either
during the term of his employment hereunder or thereafter, except as required by
the conditions of his employment hereunder, any proprietary information. The
Employee agrees not to remove from the premises of Corporation or any subsidiary
or affiliate of Corporation, except as an employee of Corporation in pursuit of
the business of Corporation or any of its subsidiaries, affiliates or any entity
in which Corporation has an ownership interest, or except as specifically
permitted in writing by Corporation, any document or object containing or
reflecting any proprietary information. The Employee recognizes that all such
documents and objects, whether developed by her or someone else during the term
of her employment with Corporation, are the exclusive property of Corporation.
(b) All proprietary information and all of the Employee's interest in
trade secrets, trademarks, computer programs, customer information, customer
lists, employee lists, products, procedure, copyrights and developments
hereafter to the end of the period of employment hereunder developed by Employee
as a result of, or in connection with, her employment hereunder, shall belong to
Corporation; and without further compensation, but at Corporation's expense,
forthwith upon request of Corporation, Employee shall execute any and all such
assignments and other documents and take any and all such other action as
Corporation may reasonably request in order to vest in Corporation all
Employee's right, title and interest in and all of the aforesaid items, free and
clear of liens, charges and encumbrances.
(c) The Employee expressly agrees that the covenants set forth in
Sections 9, 9 and 10 of this Agreement are being given to Corporation in
connection with the employment of the Employee by Corporation and that such
covenants are intended to protect Corporation against the competition by the
Employee, within the terms stated, to the fullest extent deemed reasonable and
permitted in law and equity. In the event that the foregoing limitations upon
the conduct of the Employee are beyond those permitted by law, such limitations,
both as to time and geographical area, shall be, and be deemed to be, reduced in
scope and effect to the maximum extent permitted
by law.
11. Injunctive Relief: The Employee acknowledges that the injury to
Corporation resulting from any violation by her of any of the covenants
contained in this Agreement will be of such a character that it cannot be
adequately compensated by money damages, and, accordingly, Corporation may, in
addition to pursuing its other remedies, obtain an injunction from any court
having jurisdiction of the matter restraining any such violation; and no bond or
other security shall be required in connection with such injunction.
12. Representation of Employee: The Employee represents and warrants that
neither the execution and delivery of this Agreement nor the performance of his
duties hereunder violates the provisions of any other agreement to which she is
a party or by which she is bound.
13. Parties; Non-Assignability: As used herein, the term "Corporation"
shall mean and include Corporation and any subsidiary or affiliate thereof and
any successor thereto unless the context indicates otherwise. This Agreement and
all rights hereunder are personal to the Employee and shall not be assignable by
her and any purported assignment shall be null and void and shall not be binding
on Corporation.
14. Entire Agreement: This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated herein and
supersedes all previous representations, negotiations, commitments, and writing
with respect thereto.
15. Amendment or Alteration: No amendment or alteration of the terms of
this Agreement shall be valid unless made in writing and signed by all of the
parties hereto.
16. Choice of Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, except a provision of that
law which would refer resolution of any issue to another jurisdiction. The forum
for resolution of any dispute shall be the State of Connecticut.
17. Arbitration: Any controversy, claim, or breach arising out of or
relating to this Agreement or the breach thereof may, in the sole discretion of
the Corporation, be settled by arbitration in Stamford, Connecticut in
accordance with the rules of the American Arbitration Association and the
judgment upon the award rendered shall be entered by consent in any court having
jurisdiction thereof.
18. Waiver of Breach: The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any of the parties hereto.
19. Binding Effect: The terms of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective personal
representatives, heirs, administrators, successors, and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
CORPORATION:
ITDS Intelicom Services, Inc.
By /s/ Peter P. Bassermann
-----------------------
Peter P. Bassermann
President
EMPLOYEE:
/s/ Susan L. Yezzi
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Susan Yezzi
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to the Employment Agreement dated as of December 23, 1997
between Susan Yezzi ("Employee") and ITDS Intelicom Services, Inc.
("Corporation") is hereby effective May 1, 1998 as follows:
1. The following new Section 20 is hereby added:
"20. Change in Control.
(a) In the event of a Change in Control (as hereinafter defined), (i) all
unvested stock options and other benefits shall become fully vested and
immediately exercisable and shall remain so for a period of six months
thereafter or, if longer, for the period during which such option or other
benefit would otherwise be exercisable in accordance with its terms or the terms
of the applicable plan and (ii) Employee shall be entitled to thirty-six (36)
months of base salary (as defined in Section 3(a)) in a single lump sum payout
within thirty (30) days after the Change in Control; provided, however, that
prior to the occurrence of the Change in Control the Employee may elect to defer
payment of any amounts payable pursuant to this Section until the calendar year
beginning at least 30 days after the Change in Control.
(b) Change in Control shall mean (i) any transfer or other transaction
whereby the right to vote more than fifty percent (50%) of the then issued and
outstanding capital stock of (A) International Telecommunication Data Systems,
Inc. (the "ITDS") or (B) any subsidiary of ITDS to which ITDS shall have
transferred all or substantially all of its business, is transferred to any
party or affiliated group of parties, (ii) any merger or consolidation of ITDS
(or a subsidiary of ITDS of the type described in clause (i)(B) above) with any
other business entity, at the conclusion of which transaction the persons who
were holders of all the voting stock of ITDS immediately prior to the
transaction hold less than fifty percent (50%) of the total voting stock of the
successor entity immediately following the transaction, or (iii) any sale,
lease, transfer or other disposition of all or substantially all the assets of
ITDS (or a subsidiary of the type described in clause (i)(B) above).
(c) Notwithstanding any other provision of this Agreement, in the event
that any payment or benefit received or to be received by the Employee (i) is
deemed to be in connection with a Change in Control (whether payable pursuant to
the terms of this Agreement or any other plan, arrangement or agreement with
ITDS, its successors, any person whose actions result in a Change in Control or
any corporation ("Affiliates") affiliated ( or which, as a result of the
completion of the transactions causing a Change in Control will become
affiliated) with ITDS within the meaning of Section 1504 of the Internal Revenue
Code of 1986, as amended (the "Code") (collectively with the payments and
benefits pursuant
to this Agreement if deemed to be paid pursuant to a Change in Control, "Total
Payments")) and (ii) is determined by ITDS's independent certified accounting
firm (the "Tax Advisor") that an excise tax is payable by Employee under Section
4999 of the Code, then ITDS will pay to the Employee additional compensation
which will be sufficient to enable Employee to pay such excise tax as well as
the income tax, medicare tax and excise tax on such additional compensation,
such that, after the payment of income, medicare and excise taxes, Employee is
in the same economic position in which he would have been if the provisions of
Section 4999 of the Code had not been applicable. The additional compensation
required by this Section 20(c) will be paid to Employee promptly after the date
or dates on which the amount of such additional compensation is determinable, in
whole or in part by the Tax Advisor."
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the 1st day of May, 1998.
ITDS INTELICOM SERVICES, INC. EMPLOYEE
By /s/ Peter P. Bassermann /s/ Susan L. Yezzi
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Peter P. Bassermann Susan Yezzi