Employment Agreement - Executive TeleCard SA and Allen Mandel
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement"), dated September 28, 1995, between
Executive TeleCard, S.A., a Turks & Caicos Island corporation with offices
at MacLaw House, Duke Street, Turks & Caicos (hereinafter called the
"Company"), and Allen Mandel, residing at 9362 South Mountain Brush
Street, Highlands Ranch, Colorado 80126 (hereinafter called "Executive").
WHEREAS, the Executive has held the position of Senior Vice President
and a Director of the Company from January, 1991 until August, 1995 and,
through his efforts has maintained for the Company, at various times the
operations of accounting, finance, customer service, fraud control,
billing and administration, and
WHEREAS, Executive has served as a Consultant from August 18, 1995
until the present with the Company;
WHEREAS, the services of Executive, his experience and knowledge of
the affairs of the Company and his reputation and contacts in the industry
are extremely valuable to the Company; and
WHEREAS, the Company desire that Executive assume the position of
Executive Vice President of the Company for the period as set forth
hereinbelow and is willing to offer Executive an incentive to do so; and
WHEREAS, Executive is willing to accept employment with the Company
upon his terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained, the parties to this Agreement agree as
follows:
1. EMPLOYMENT
Company shall employ Executive, and Executive shall serve as
Executive to the Company during the term of employment set forth in
Paragraph 2 of this Agreement. Executive shall report only to the Board
of Directors of the Company and his powers and authority shall be as set
forth in Paragraph 4.1 hereunder.
2. TERM OF EMPLOYMENT
Executive's "Term of Employment", as this term is used throughout
this Agreement shall be for a period of three (3) years commencing on
September 27, 1995 and ending September 26th, 1998, subject to termination
by the Company for cause as the term is defined in this Agreement.
Company has the right to extend the employment of Executive, subject to
acceptance by Executive, for an additional period as agreed by the parties
in writing prior to the termination of this EMPLOYMENT Agreement.
Notwithstanding anything contained in this Agreement to the contrary,
Executive may voluntarily terminate this Agreement, other than under the
conditions provided for in Paragraph 7.1 (ii) herein, by giving the
Company sixty (60) days written notice of such termination and this
Agreement shall terminate upon the expiration of the sixty day period.
3. EXECUTIVE'S TITLE AND DUTIES
3.1 Title and Duties
During the Employment Term, and any extension thereof,
Executive's title shall be that of Executive Vice President, Finance and
Administration, of the Company and Executive shall have the responsibility
and authority, commensurate with such position. Executive's scope of
responsibility and authority to act on behalf of the Company shall,
subject only to the general direction and control of the Company's Board
of Directors and Chief Executive Officer, including management of the
operations of the Company, formulating policies and administering the
operations of the Company in all respects. Executive may also serve, at
his discretion, as an officer of one or more of any subsidiary corporation
or division of the Company and to carry out the same responsibilities and
duties for each such corporation as set forth above.
3.2 Non-compete
During the Employment Term, Executive shall not accept
employment with any major long distance telephone carrier that presently
provides international calling cards, including, by way of example, such
carriers as British Telecom, MCI, AT&T and Sprint.
4. COMPENSATION AND EXPENSES
4.1 Salary
For all services by Executive under this Agreement, the Company
shall pay Executive an initial annual base salary of One Hundred Thousand
Dollars ($100,000.00) per annum, payable in weekly installments during
each year of such term. The Board of Directors may, at it's sole
discretion, increase such annual base salary at any time during the Term
of this Agreement.
4.2 Business Expenses
The Company will reimburse Executive for all reasonable expenses
properly incurred by him in the performance of his duties hereunder, upon
presentation of properly itemized charges, receipts and/or similar
documentation, otherwise in accordance with policies established from time
to time by the Board of Directors of the Company. Executive's spouse will
be permitted to accompany Executive on all trips and Executive will be
reimbursed by Company for the reasonable expenses of his spouse's
accompaniment, including travel, meals and accommodations, including a
gross-up of any income taxes payable by Executive for such reimbursement.
4.3 Stock Participation
Executive will be eligible to receive stock options to purchase
shares of the Company in an amount of at least the greater of any stock
options granted to the President or Chief Executive Officer or a director
of the Company under any stock option plan in effect during the Employment
Term and under the same terms and conditions in the plan as are provided
for other officers or directors of the Company.
4.4 Location of Executive
Company agrees that without Executive's written consent,
Executive's principal place of work shall not be relocated and, Executive
shall continue to have his office in Denver, Colorado. The Company shall
provide Executive with an office and secretarial support, at the Company's
expense. To the extent that Executive consents to a relocation, Company
agrees to reimburse Executive for the cost of such relocation of Executive
and Executive's spouse and all personal property from Colorado to
Executive's new location. Company further agrees to reimburse Executive
for all temporary living expenses, for a minimum of four (4) months, until
Executive has completed the purchase or lease of and occupied a new
residence near Executive's new work location with Company.
5. BENEFITS
5.1 Participation in Benefit and Insurance Plans
In addition to the other compensation provided in Paragraph 4.1
through 4.4, during the Term of Employment, Executive and eligible members
of Executive's family shall be entitled to participate in all Company
sponsored benefit and insurance plans. Executive shall be included in any
pension, profit-sharing, stock option, or similar plan or program of the
Company now existing, and shall participate in any such plans or programs
established hereafter to the same extent as executive officers and/or
directors of the Company. Executive shall be eligible to receive during
the period of his employment under this Agreement, and during any
subsequent period for which he will be entitled to receive payments from
the Company as provided for in this Agreement, all benefits and emoluments
for which key executives and/or directors are eligible under every such
plan or program and to the same extent and under the same terms and
conditions for which key executives and/or directors are eligible under
such plan or program.
5.2 Vacation
Executive shall be entitled to all paid holidays as available to
employees of the Company, and, in addition, to vacation and personal days
which shall accrue on a pro rata basis during the Employment Term at the
rate of three (3) weeks per annum which vacation and/or personal day(s)
shall be taken by him at such time or times as are consistent with the
needs of the business of the Company. Unused vacations and/or personal
day(s) during each year of the Employment Term shall be carried over from
year to year as necessary due to the exigencies of the business.
5.3 Indemnification
Executive shall be indemnified by the Company to the fullest
extent provided under the indemnification provisions of the By-Laws and/or
Certificate of Incorporation in existence, as of the date hereof, or, to
the extent that the scope of such indemnification is greater, under any
amendments to the By-Laws and/or Certificate of Incorporation. To the
extent that the Company obtains indemnification insurance for its officers
and/or directors, such insurance shall also cover Executive to the same
extent.
6. BENEFITS PAYABLE UPON DISABILITY OR DEATH
6.1 Disability Benefits
In the event of the disability (as hereinafter defined) of
Executive, the Company shall continue to pay Executive the weekly
compensation provided in Paragraph 5 hereof during the period of his
disability; provided, however, that in the event Executive is disabled for
a continuous period exceeding six (6) calendar months, the Company shall
compensate Executive for the difference between the Executive's long-term
disability (including Social Security) and the amount of his salary as of
the sixth month date from the date of disability.
As used in this Agreement, the term "disability" shall mean "the
complete inability of Executive to perform his duties under this Agreement
as determined by an independent physician selected by the Executive with
the approval of the Company, which approval shall not be unreasonably
withheld".
6.2 Death Benefits
In the event of the death of Executive, either during his
disability or otherwise, during the term of this Agreement, or any
extension thereof, the Company shall pay, or cause to be paid, to
Executive's designated beneficiary or beneficiaries or legal
representatives a death benefit of Three Hundred Thousand Dollars
($300,000.00). The Company shall purchase one or more term or other life
or similar insurance policies in the amount to provide for its obligations
under this paragraph, and if no adverse tax consequences would result to
Executive and his designated beneficiary or beneficiaries, the ownership
of said policy or policies shall be transferred to Executive, such
transfer to constitute compliance with the Company's obligations under
this paragraph.
7. TERMINATION, RIGHTS AND OBLIGATIONS, RENEWAL
7.1 Termination
Upon the occurrence of an event of termination (as hereinafter
defined) during the period of Executive's employment under this Agreement,
or any extension thereof, the provisions of this Paragraph 8 shall apply.
As used in this Agreement an "event of termination" shall mean and include
any one or more of the following:
(i) The termination by the Company of Executive's employment
hereunder for any reason other than for cause. For purposes of the
Agreement only, the Company shall have "cause" to terminate Executive
hereunder only on the basis of material fraud, or a criminal conviction
for an act by Executive that is directly contrary to the Company's
interest; or
(ii) Executive's resignation from the Company's employ upon any
(a) material change by the Company of the Executive's functions, duties or
responsibilities which change would cause Executive's position with the
Company to become of less dignity, responsibility, importance, or scope
from the position and attributes thereof described in Paragraph 4 above,
and any such material change shall be deemed a continuing breach of this
Agreement; (b) reduction in Executive's salary from that provided to him
under the terms of this Agreement or a diminution in Executive's
eligibility to participate in bonus, stock option, incentive award and
other benefit plans, or a diminution in Executive's or Executive's
spouse's benefits including, but not limited to, medical, dental or life
insurance and long term disability plans; or (c) liquidation, dissolution,
consolidation, or merger of the Company, or transfer of all or
substantially all of its assets; or (d) other breach of this Agreement by
the Company. Upon the occurrence of any event described in Clauses (a),
(b), (c) or (d) above, Executive shall have the right to elect to
terminate his employment under this Agreement by resignation upon not less
than thirty (30) days prior written notice given within a reasonable
period of time not to exceed, except in case of continuing breach, four
(4) calendar months after the event giving rise to said right to elect.
7.2 Termination Pay
Upon the occurrence of an event of termination, the Company
shall pay Executive (a) a lump sum compensation of the greater of One
Hundred, Twenty Thousand ($120,000.00) or the balance of the salary to
which the Executive would be entitled to the end of the Term of Employment
(b) the number of unrestricted shares of the common stock of the Company
equal to the total number of outstanding stock options held by Executive
on the fifth day following termination or in lieu of exercising or
retaining his right to exercise any outstanding stock options then held by
Executive, Executive may elect to surrender to Company his rights in such
outstanding stock options (whether or not then exercisable) then held by
Executive, and, upon such surrender, Company shall pay to Executive an
amount in cash per share equal to the mean between the high and low
selling price of such stock on the Nasdaq National Market or other market
as the Company's stock is then traded on the date of Executive's
termination.
7.3 No Obligation to Mitigate Damages
(i) Executive's benefits hereunder shall be considered
severance pay in consideration of his past service and pay and
consideration of his continued service from the date hereof and his
entitlement thereto shall not be governed by any duty to mitigate his
damages by seeking further employment nor offset by any compensation which
he may receive from future employment.
(ii) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any
way diminish the Executive's existing rights, or rights which would accrue
solely as a result of the passage of time, to the benefits provided under
Sections 4.3, 5.1, 5.2, 6.1 and 6.2 of this Agreement.
7.4 No Right to Set-off.
There shall be no right of set-off or counterclaim by the
Company in respect to any claim, debt or obligation against any payments
to Executive, his dependents, beneficiaries, or estate provided for in
this Agreement.
8. ASSIGNMENT
This Agreement and any rights (including Executive's Compensation)
hereunder shall not be assigned, pledged or transferred in any way by
either party hereto except that the Company shall have the obligation to
assign its rights hereunder to any successor in interest of the Company
whether by merger, consolidation, purchase of assets or stock or
otherwise. Any attempted assignment, pledge, transfer or other
disposition of this Agreement or any rights, interests or benefits
contrary to the foregoing provisions shall be null and void.
9. NOTICES
All notices, requests, demands and other communications hereunder
must be in writing and shall be deemed to have been duly given if
delivered by hand, sent by facsimile (if to Company), or mailed within the
continental United States by first class, registered mail, return receipt
requested, postage and registry fees prepaid, the applicable party and
addressed as follows:
(i) if to the Company: Executive TeleCard, S.A.
4260 East Evans Avenue
Denver, Colorado 80222
Facsimile: (303) 692-0965
(ii) if to Executive: Allen Mandel
9362 S. Mountain Brush Street
Highlands Ranch, CO 80126
10. SEVERABILITY
If any provision of this Agreement shall, for any reason, be adjudged
by any court of competent jurisdiction to be invalid or unenforceable,
such judgment shall not affect, impair or invalidate the remainder of this
Agreement but shall be confined in its operation to the jurisdiction in
which made and to the provisions of this Agreement directly involved in
the controversy in which said judgment shall have been rendered.
11. WAIVER
No course of dealing and no delay on the part of any party hereto in
exercising any right, power, or remedy under or relating to this Agreement
shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies. No single or partial exercise of any rights,
powers or remedies under or relating to this Agreement shall preclude any
other or further exercise thereof or the exercise of any other right,
power or remedy.
12. ENTIRE AGREEMENT/GOVERNING LAW
This Agreement embodies the entire understanding and supersedes all
other oral or written agreements or understandings between the parties
regarding the subject matter hereof. No change, alteration, or
modification hereof may be made except in writing signed by both parties
hereto. This Agreement shall be construed and governed in all respect and
shall at all times be determined in accordance with the laws of the State
of New York. The parties consent to the exclusive jurisdiction of the
appropriate court in New York state as to any controversy arising out of
execution of this Agreement or the terms and conditions of this Agreement.
13. HEADINGS
The headings of Paragraphs herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of
the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, consisting of eight (8) pages, on this 28th day of September,
1995.
EXECUTIVE TELECARD, S.A.
/s/Robert N. Schuck By:/s/Anthony Balinger
Witness Its: President
/s/Robert N. Schuck By:/s/Allen Mandel
Witness Allen Mandel
GUARANTY
For valuable consideration and to induce Executive to enter into the
within Agreement with the Company, the undersigned hereby unconditionally
guarantees to Executive, his heirs and assigns, full, prompt and complete
performance by the Company of all of the provisions, conditions, covenants
and agreements contained in the within Agreement and does hereby waive all
notice of default by the Company, notice of the acceptance of this
Guaranty by Executive and consents to any extension of time that may be
given by Executive to the Company of time of payment and performance.
This guaranty is an absolute, continuing and unlimited guarantee of
payment and performance.
IN WITNESS WHEREOF, Guarantor has signed this guaranty on September 28,
1995.
EXECUTIVE TELECARD, S.A.
/s/ John Gitlin By:/s/Edward J. Gerrity, Jr.
Witness Its: Chairman
<PAGE>
TERMINATION AGREEMENT
This AGREEMENT ("Agreement"), dated September 28, 1995, by and
between Executive TeleCard, S.A., a Turks & Caicos corporation (the
"Company"), and Allen Mandel (the "Executive").
WHEREAS, the services of Executive, his experience and knowledge of
the affairs of the Company and his representation and contacts in the
industry are extremely valuable to the Company and Company recognizes the
valuable services that Executive has rendered and desires to be assured
that Executive will continue his active participation in the business of
Company; and
WHEREAS, Executive is willing to continue to serve Company but
desires assurances that in the event of any change in control of Company
he will continue to have the responsibility and status he has earned;
NOW THEREFORE, in consideration of the promises and the mutual
agreements herein contained, Company and Executive hereby agree as
follows:
1. Term.
This Agreement shall terminate the later of three (3) years from
the date of this Agreement or two years from the effective date of a
Change in Control of the Company or a Change in Control of Executive
TeleCard, Ltd. ("EXTL").
2. Change in Control.
No benefits shall be payable under this Agreement unless and
until (a) there shall have been a Change in Control of the Company or a
Change in Control of EXTL, while the Executive is still an employee of the
Company and (b) the Executive's employment by the Company thereafter shall
have been terminated in accordance with Section 3 below. For purposes of
this Agreement, a Change in Control of the Company and/or EXTL shall be
deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company or EXTL in which the Company or
EXTL is not the continuing or surviving corporation or pursuant to which
shares of the Company's or EXTL's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company or
EXTL in which the holders of the Company's or EXTL's Common Stock
immediately prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of the Company or EXTL, or (ii) the stockholders of the Company or
EXTL approved any plan or proposal for the liquidation or dissolution of
the Company or EXTL, or (iii) any person (as such term is used in Section
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of 20% or more of the Company's or
EXTL's outstanding Common Stock, or (iv) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the entire Board of Directors of either the Company or EXTL
shall cease for any reason to constitute a majority thereof unless the
election, or the nomination for election by the Company's or EXTL's
stockholders, of each new director was approved by a vote of at least
three-fourths of the directors then still in office who were directors at
the beginning of the period.
3. Termination Following Change in Control.
(a) If a Change in Control of the Company or EXTL shall have
occurred while the Executive is still an employee of the Company, the
Executive shall be entitled to the benefits provided in Section 4 below
upon the subsequent termination of the Executive's employment with the
Company by the Executive for Good Reason (as defined in Section 3 (c)
below) or by the Company unless such termination is a result of (i) the
Executive's death; or (ii) the Executive's termination by the Company for
Cause (as defined in Section 3(b) below).;
(b) Cause: For purposes of this Agreement only, the Company
shall have "Cause" to terminate the Executive's employment hereunder only
on the basis of material fraud or a criminal conviction involving moral
turpitude or arising from an act of the Executive that is directly
contrary to the Company's interest. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-
quarters of the entire membership of the Company's Board of Directors at a
meeting of the Board called and held for that purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together
with the Executive's counsel, to be heard before the Board), finding that
in the good faith opinion of the Board the Executive was guilty of the
conduct set forth in the first sentence of this Section 3(b) and
specifying the particulars thereof in detail, and an opinion of counsel
for the Company confirming that the opinion of the Board has a substantial
basis in fact and in law.
(c) Good Reason. For purpose of this Agreement "Good Reason"
shall mean any of the following (without the Executive's express written
consent):
(i) The assignment to the Executive by the Company of
duties inconsistent with the Executive's position, duties,
responsibilities and status with the Company immediately prior to a
Change in Control of the Company or EXTL, or a change in the
Executive's titles or offices then in effect immediately prior to the
Change in Control of the Company or EXTL, or any removal of the
Executive from or any failure to reelect or reappoint the Executive
to any such positions;
(ii) a reduction by the Company in the Executive's base
salary in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the Company's
failure to increase (within 12 months of the Executive's last
increase in base salary) the Executive's base salary after a Change
in Control of the Company or EXTL in an amount which at least equals,
on a percentage basis, the average percentage increase in base salary
for officers of the Company effected in the preceding 12 months;
(iii) any failure by the Company to continue in effect any
benefit plan, program or arrangement in which the Executive and/or
eligible family members are participating at the time of a Change in
Control of the Company or EXTL and any other plans or fringe benefits
providing the Executive with substantially similar benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any
action by the Company which would adversely affect the Executive's
and/or Executive's eligible family members participation in or
materially reduce the Executive's and/or Executive's eligible family
member's benefits under any such Benefit Plan or deprive the
Executive and/or any eligible family member of any material fringe
benefit enjoyed by the Executive at the time of a Change in Control
of the Company or EXTL;
(iv) any failure by the Company to continue in effect any
incentive plan or arrangement in which the Executive is participating
at the time of a Change in Control of the Company or EXTL (or any
other plans or arrangements providing him with substantially similar
benefits) (hereinafter referred to as "Incentive Plans") or the
taking of any action by the Company which would adversely affect the
Executive's participation in any such Incentive Plan or reduce the
Executive's benefits under any such Incentive Plan;
(v) any failure by the Company to continue in effect any
plan or arrangement to receive securities of the Company (including,
without limitation, the Company's existing Stock Option Plan, or any
future Stock Option Plan through the term of Executive's employment
and any other plan or arrangement to receive and exercise stock
options, stock appreciation rights, restricted stock or grants
thereof) in which the Executive is participating at the time of a
Change in Control of the Company or EXTL (or plans or arrangements
providing him with substantially similar benefits) (hereinafter
referred to as "Securities Plans") or the taking of any action by the
Company which would adversely affect the Executive's participation in
or materially reduce the Executive's benefits under any such
Securities Plan;
(vi) a relocation of Executive's offices to a location
greater then twenty-five miles from the Executive's office as of the
effective date of Change in Control, or the Executive's relocation to
any place other than the location at which the Executive performed
the Executive's duties prior to a Change in Control of the Company or
EXTL, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company or EXTL;
(vii) any failure by the Company to provide the Executive
with the number of paid vacation days to which the Executive is
entitled at the time of a Change in Control of the Company;
(viii) any material breach by the Company of any provision
of this Agreement;
(ix) any failure by the Company to obtain the assumption
of this Agreement by any successor or assign of the Company; or
(x) any purported termination of the Executive's
employment which is not effected pursuant to the Notice of
Termination satisfying the requirements of Section 3(d), and for
purposes of this Agreement, no such purported termination shall be
effective.
(xi) Executive's voluntary resignation for any reason
within six (6) months from the effective date of Change in Control of
the Company or EXTL;
(d) Notice of Termination by the Company. Any termination by
the Company pursuant to Section 3(b) shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination"
shall mean a written notice which shall indicate those specific
termination provisions in this Agreement relied upon and which sets forth
in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated. For the purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(e) Date of Termination. "Date of Termination" shall mean if
the Executive's employment is terminated by Executive or by the Company
for any reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given
to the Executive by the Company, the Executive notifies the Company that a
dispute exists concerning the termination, the Date of Termination shall
be the date the dispute is finally determined, whether by mutual agreement
by the parties or upon final judgment, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and
no appeal having been perfected).
4. Severance Compensation upon Termination of Employment.
If the Company shall terminate the Executive's employment other
than pursuant to Section 3(b) or if the Executive shall terminate his
employment for Good Reason, then the Company shall pay to the Executive as
severance pay the following compensation:
(a) On the fifth day following termination, in a lump sum, in
cash, an amount equal to three times the average of the aggregate of the
annual compensation paid by the Company to the Executive during the term
of his employment preceding the Change in Control of the Company or EXTL;
provided, however, that if the lump sum severance payment under this
Section 4, either alone or together with other payments which the
Executive has the right to receive from the Company, would constitute a
"parachute payment" (as defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), such lump sum severance payment
shall be reduced to the largest amount as will result in no portion of the
lump sum severance payment under this Section 4 being subject to the
excise tax imposed by Section 4999 of the Code. The determination of any
reduction in the lump sum severance payment under this Section 4 pursuant
to the foregoing provision shall be made by the Executive in good faith,
and such determination shall be conclusive and binding on the Company;
(b) To the extent Executive and the Executive's eligible family
members are eligible they shall continue to be covered by all noncash
benefit plans of the Company or any successor plans or programs in effect
on the date of acquisition of control, for twenty-four months thereafter.
In the event Executive and participating family members are ineligible
under the terms of such plans to continue to be so covered, Company shall
provide substantially equivalent coverage from other sources;
(c) At no cost to Executive, the number of unrestricted shares
of the common stock of Executive TeleCard, Ltd. equal to the total number
of outstanding stock options held by Executive on the fifth day following
termination or in lieu thereof Executive may elect to surrender to Company
his rights in such outstanding stock options (whether or not then
exercisable) then held by Executive, and, upon such surrender, Company
shall pay to Executive an amount in cash per share, which is the greater
of the average price per share paid in connection with the acquisition of
control of Executive TeleCard, Ltd. if such control was acquired by the
payment of cash or the then fair market value per option share of the
consideration paid for such shares if such control was acquired for
consideration other than cash, or the price per share paid in connection
with any tender offer for shares of Executive TeleCard, Ltd. common stock
leading to control, or the mean between the high and low selling price of
such stock on the Nasdaq National Market or other market on which
Executive TeleCard, Ltd. stock is then traded on the date of Executive's
termination.
5. No Obligation to Mitigate Damages; No Effect on Other
Contractual Rights; No Right of Set-Off.
(a) Executive's benefits hereunder shall be considered
severance pay in consideration of his past service and pay and
consideration of his continued service from the date hereof and his
entitlement thereto shall not be governed by any duty to mitigate his
damages by seeking further employment nor offset by any compensation which
he may receive from future employment.
(b) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any
way diminish the Executive's or the Executive's eligible family members'
existing rights, or rights which would accrue solely as a result of the
passage of time, under any Benefit Plan, Incentive Plan or Securities
Plan, employment agreement or other contract, plan or arrangement.
(c) The Company shall have no right of set-off or counterclaim
in respect of any claim, debt or obligation against any payments to
Executive, his dependents, beneficiaries, or estate provided for in this
Agreement.
6. Successor to the Company.
(a) The Company and EXTL will require any successor or assign
(whether direct or indirect, by purchase merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of
the Company, by agreement in form and substance satisfactory to the
Executive, expressly, absolutely and unconditionally to assume and agree
to perform this Agreement in the same manner and to the same extent that
the Company and EXTL would be required to perform it if no such succession
or assignment had taken place. Any failure by the Company or EXTL to
obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle
the Executive to terminate the Executive's employment for Good Reason. As
used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor or assign to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 6 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law. If at any time during the term of
this Agreement the Executive is employed by any corporation a majority of
the voting securities of which is then owned by the Company, "Company" as
used in this Agreement shall in addition include such employer. In such
event, the Company agrees that it shall pay or shall cause such employer
to pay any amounts owed to the Executive pursuant to Section 4 hereof.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable
to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee or, if there be no such
designee, to the Executive's estate.
7. Notice.
For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt registered, postage prepaid as
follows:
If to the Company: Executive TeleCard, S.A.
MacLaw House, Duke Street
Grand Turk, Turks & Caicos Island, B.W.I.
If to Executive: Allen Mandel
9362 S. Mountain Brush Street
Highlands Ranch, CO 80126
or such other address as either of the parties may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
8. Miscellaneous.
No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by any party
hereto at any time of any breach by another party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party which are
not set forth expressly in this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York.
9. Validity.
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts.
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
11. Legal Fees and Expenses.
In the event that the Company terminates or seeks to terminate
Executive and Executive disputes such termination or attempted termination
and prevails and, or Executive elects to terminate his service hereunder
for Good Reason and the Company disputes its obligation to pay Executive
the benefits provided for under Section 4 of this Agreement and Executive
prevails, the Company shall pay or reimburse Executive for all reasonable
costs incurred by Executive in such dispute, including attorney's fees and
costs.
12. Entire Agreement/Governing Law
This Agreement embodies the entire understanding and supersedes
all other oral or written agreements or understandings, between the
parties regarding the subject matter hereof. No change, alteration or
modification hereof may be made except in writing signed by both parties
hereto. This Agreement shall be construed and governed in all respect and
shall at all times be determined in accordance with the laws of the State
of New York.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement, consisting of eight (8) pages, on this 28th day
of September, 1995.
EXECUTIVE TELECARD, S.A.
/s/John Gitlin By:Anthony Balinger
Witness Its:
/s/Harold Reisner By:/s/Allen Mandel
Witness Allen Mandel
GUARANTY
For valuable consideration and to induce Executive to enter into the
within Agreement with the Company, the undersigned hereby unconditionally
guarantees to Executive, his heirs and assigns, full, prompt and complete
performance by the Company of all of the provisions, conditions, covenants
and agreements contained in the within Agreement and does hereby waive all
notice of default by the Company, notice of the acceptance of this
Guaranty by Executive and consents to any extension of time that may be
given by Executive to the Company of time of payment and performance.
This guaranty is an absolute, continuing and unlimited guarantee of
payment and performance.
IN WITNESS WHEREOF, Guarantor has signed this guaranty on September 28,
1995.
EXECUTIVE TELECARD, S.A.
/s/John Gitlin By:/s/Edward J. Gerrity, Jr.
Witness Its: Chairman