Sample Business Contracts

Employment Agreement - Tel-Save Inc., Inc. and Gary McCulla

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

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                              As of January 5, 1999

Mr. Gary McCulla
3728 Windy Bush
New Hope, PA  18938

Dear Gary:

     We are writing to confirm our agreements and  understandings  regarding the
terms of your continued employment under the Employment  Agreement,  dated as of
October  13,  1998 (the  "Employment  Agreement"),  among  you,  as  "Employee",
Tel-Save,  Inc.,  as  "Company",  and,  Inc.  (formerly,  Tel-Save
Holdings,  Inc.),  as  "Holdings",  from and after  January 5, 1999 (the "Change
Date") (except as otherwise  defined herein,  capitalized terms shall be defined
as in the Employment Agreement):

     1.        From and after the Change  Date,  you,  as  "Employee"  under the
          Employment Agreement, will continue as an employee of Company, but you
          shall  have no  duties  or  responsibilities,  nor  shall you have any
          rights,  except as specifically set forth herein and in the Employment
          Agreement  as hereby  amended.  Each of  Sections 3, 4, 5 and 6 of the
          Employment  Agreement is hereby  eliminated and shall be of no further
          force and effect from and after the Change Date,  except as and to the
          extent specifically set forth elsewhere herein.

     2.        The "Term" of your employment  under the Employment  Agreement as
          hereby amended shall commence on the Change Date and shall continue in
          effect to,  but not  including,  January  5,  2001,  except as earlier
          terminated as herein specifically provided.

     3.        The sole  compensation  payable to you pursuant to the Employment
          Agreement (including, without limitation, Sections 4,6 and 10 thereof)
          from and after the Change Date is $750,000  per year,  payable for the
          Term and in the same manner (equal  periodic  payments  throughout the
          year) as your base  salary was paid to you  pursuant  to  Section  4.1
          before the Change Date.  The aggregate  amount payable to you pursuant
          to this paragraph 3 will not exceed  $1,500,000.  Upon your death or a
          "Change of Control" (as such term is defined in the  Indenture,  dated
          as  of  December  10,  1997,  relating  to  Company's  5%  Convertible
          Subordinated Notes due 2004), any balance of such compensation for the
          Term not  theretofore  paid to you or on your behalf  shall be paid to
          you (or, in the case of your death,  to your estate or  beneficiaries)
          in a lump sum and the Term shall thereupon


          terminate  for all  purposes  of the  Employment  Agreement  as hereby

     4.        The sole benefits and  perquisites to which you will be entitled,
          and  Company  will  provide,  pursuant  to  the  Employment  Agreement
          (including,  without  limitation,  Sections 4 and 6 thereof)  from and
          after the Change Date are: (a) health and medical benefits, during the
          Term only, equal to the greater of (i) the health and medical benefits
          provided to you immediately before the Change Date and (ii) the health
          and medical benefits as are made available  generally to the Company's
          senior  executives in effect during the Term; (b) maintenance,  during
          the Term and until the third anniversary of the last day of such Term,
          by Company of director and officer  insurance  policies  with benefits
          equal to or greater  than  Company's  director  and officer  insurance
          policy in effect as of the Change Date;  and (c) the  continued use of
          the 1998 Mercedes SL500  automobile  leased by Company and used by you
          as of the Change Date for the  remainder  of the term of the  existing
          lease of such  automobile and the continued  payment by Company of all
          lease,  insurance and other  payments with respect to such  automobile
          for the remainder of such lease term ( it being expressly  understood,
          however,  that you shall  defend and hold  Company  harmless  from all
          claims,  damages,  litigation,  liabilities and all matters whatsoever
          regarding such  automobile and your use thereof,  except such as shall
          be covered by insurance). In addition, at the end of the Term, Company
          acknowledges  that you will be entitled to such COBRA  benefits as are
          provided by law.

     5.        Except as  specifically  provided in  paragraphs  4 and 5 of this
          letter  agreement  and  except  for  your  entitlement,   if  any,  to
          indemnification  and  reimbursement by Company or Holdings arising out
          of your having been an officer or director thereof,  provided that you
          hereby  agree to  cooperate  with  Company or  Holdings  to the extent
          reasonably requested by Company or Holdings in any proceeding that may
          give rise to any such indemnification,  neither you nor your estate or
          beneficiaries  shall be entitled to any other payments,  compensation,
          perquisites  or  other  benefits,  from  Company  or  Holdings  or any
          subsidiary thereof,  under or by reason of the Employment Agreement or
          otherwise and all such other  payments,  compensation,  perquisites or
          other  benefits are hereby  expressly  waived by you (for yourself and
          for your estate and your  beneficiaries).  Company shall  withhold any
          state, federal or other taxes that it may be required to withhold from
          or with respect to any such  payments,  compensation,  perquisites  or
          other benefits.

     6.        You will be entitled to no additional compensation for serving as
          a director of Holdings. While you may, of course, resign as a director
          of Holdings at any time,  you hereby  agree to resign as a director of
          Holdings  as and  when  requested  by the  Chairman  of the  Board  of
          Holdings, but not


          earlier  than August 15, 1999.  Furthermore,  you agree that you will,
          prior to your resignation as a director, vote in favor of the election
          or nomination of your  successor as a director or such other person as
          shall have been  designated  as a nominee for  director  by  Company's
          Chairman of the Board.

     7.        The  provisions  of Section 10 of the  Employment  Agreement  are
          amended as follows:  (a) the provisions  thereof shall be for the Term
          only and the "Restricted Period" therein shall be coterminous with the
          Term, without regard to any conditions in the existing Section 10; (b)
          you shall not be entitled to any  compensation or other payments under
          or otherwise  by reason of such  Section 10; and (c) you may,  without
          violation  of the  terms  of such  Section  10,  also be  employed  by
          Communications    TeleSystems    International   d.b.a.   WorldxChange
          Communications  during the Term without  violation  of the  Employment
          Agreement, as hereby amended, including Section 10 thereof.

     8.        You will make  yourself  available and shall  cooperate,  in each
          case to the extent  reasonably  requested by Company or  Holdings,  in
          respect of any litigation or other proceedings that arise out of or by
          reason of the conduct of Company's or Holding's business or operations
          during any time that you were a director or officer  thereof,  without
          further  compensation or payment except the payment of your reasonable
          out-of-pocket costs and expenses in connection therewith.

     9.        Except as specifically  provided herein, the Employment Agreement
          shall continue in full force and effect.

     10.       The  provisions of Sections 16 through (and  including) 21 of the
          Employment  Agreement shall apply to this letter agreement as fully as
          if set  forth  in full  herein  and the  references  therein  to "this
          Agreement" were a reference to this letter agreement.

     If the foregoing  correctly sets forth our  agreements and  understandings,
please so acknowledge  by signing the enclosed copy of this letter  agreement in
the space  provided and returning it to us,  whereupon this shall be a valid and
binding agreement by and among us.


                                                  Very truly yours,
                                                  Tel-Save, Inc.


                                        , Inc.


Accepted and agreed as of the date first above written:

Gary McCulla