Employment Agreement - Executive TeleCard SA and Stig Sonnerberg
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement"), dated November 1, 1995, between
Executive TeleCard, S.A., a Turks and Caicos corporation with offices at
Duke Street, Grand Turk, Turks and Caicos, BWI (hereinafter called the
"Company"), and Stig Sonnerberg, residing at Stavgardsgatan 76, S16145
Bromma, Sweden (hereinafter called "Executive").
WHEREAS, the Company wishes to secure the services of Executive as its
Senior Vice President and Director of European Operations for an extended
period to and including October 31, 1998; and
WHEREAS, Executive is willing to enter into this Agreement for such period
upon the 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 the
Senior Vice President and Director of European Operations of the Company
during the term of employment set forth in Paragraph 2 of this Agreement.
2. TERM OF EMPLOYMENT
Executive's "Term of Employment", as this term is used
throughout this Agreement, shall be for a period of three years commencing
on November 1, 1995 and ending October 31, 1998, and any extension
thereof.
3. EXECUTIVE ACCEPTANCE
Should Executive accept this Agreement as evidenced by his
signature and terminate employment with his present employer and Company
subsequently withdraws its offer prior to commencement of the Employment
Term, regardless of the reason for the withdrawal, Executive shall receive
a lump sum compensation of One Hundred Thousand Dollars (US $100,000.00)
payable within fifteen (15) days of notice of the withdrawal.
4. EXECUTIVE'S TITLE AND DUTIES
4.1 Title and Duties
Executive shall during the term of this employment hereunder,
have responsibility for marketing and sales primarily in Europe, Africa
and the Middle East. Executive's responsibilities shall primarily consist
of the solicitation and securing of enhancement agreements with financing
institutions and credit card companies as well as revenue sharing and
enhancement arrangements with Postal Telegraph and Telephone authorities
in the defined area. Executive shall devote his full time and attention
to, and exert his best effort in the performance of his duties hereunder,
so as to promote the business of the Company, and its affiliates.
Executive shall accept the payments to be made to him under this Agreement
as full and complete compensation for all the services performed by him
under this Agreement except as may be otherwise provided in writing.
4.2 Confidential Information
Executive shall not, directly or indirectly, or at any time,
during the term of his employment hereunder or thereafter and without
regard to when or for what reason, if any, such employment shall
terminate, use or permit the use of any trade secrets, customer's lists,
or other information of, or relating to information of, the Company, or
any such subsidiary or affiliate in connection with any activity or
business, except the business of the Company or any such subsidiary or
affiliate and shall not divulge such trade secrets, customer's lists, and
information to any person, firm, or corporation whatsoever, except as may
be necessary in the performance of his duties hereunder or as may be
required by any applicable law or determination of any duly constituted
administrative agency.
5. COMPENSATION AND EXPENSES
5.1 Salary
The Company shall pay Executive during the Term of Employment a
total base salary (the "Salary") of not less than sixty thousand dollars
($60,000.00) per annum, payable in the normal pay periods of the Company
relating to executives of the Company, during each year of such term. It
is understood that the Company may, in its sole discretion of its Board of
Directors, increase such base salary. If the Company in its discretion
increases the compensation of Executive for any period of time, and if
Executive accepts such increase, this Agreement shall continue in full
force and effect whether or not it has been amended to reflect such
increase. Nothing herein is intended or shall be construed to obligate
the Company to make such increase.
5.2 Business Expenses
The Company will reimburse Executive for all reasonable expenses
properly incurred by him in its behalf in the performance of his duties
hereunder, upon presentation of properly itemized charges, receipts and/or
similar documentation, and otherwise in accordance with policies
established from time to time by the Board of Directors of the Company, as
well as mileage reimbursement for automobile usage at a rate of 2.50
kroner per kilometer. In addition, Company will provide Executive with a
personal computer, printer, mobile phone and a facsimile machine.
5.3 Stock Participation
Executive will be eligible to receive stock options to purchase
shares of Executive TeleCard, Ltd. in an amount to be determined by the
Stock Option Committee under any stock option plan in effect during the
Employment Term and under the same terms and conditions as are provided
for other officers and directors under such plan.
5.4 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 offices in Bromma, Sweden. 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 family and
all personal property from Bromma, Sweden to Executive's new location.
Company further agrees to reimburse Executive for all temporary living
expenses for a minimum of three months, until Executive has completed the
purchase or lease of and occupied a new residence near Executive's new
work location with the Company.
5.5 Additional Compensation
During the Term of Employment, Executive shall be entitled to
additional compensation in an amount equal to the rate of taxed costs
which would be assessable against the amount of Salary payable to
Executive in Sweden under the terms of this Agreement which tax rate is
currently thirty-three percent (33%). Such additional compensation shall
be payable monthly and shall be adjusted as necessary to meet any change
in the percent of taxed costs to Executive on the amount of Salary
received hereunder.
6. BENEFITS
6.1 Participation in Benefit Plans
In addition to the other compensation provided in Paragraph 5.1
through 5.5, during the Term of Employment, Executive shall be entitled to
participate and shall be included in any profit-sharing and stock option
plan or program of the Company now existing, and shall participate in any
such plans or programs, except for any pension or retirement plans,
established hereafter to the same extent as executive officers and/or
directors of the Company. Additionally, and in lieu of Executive's
participation in any retirement or pension plan of the Company, the
Company shall pay annually to a pension plan designated by Executive the
sum of thirty-four thousand six hundred dollars ($34,600) to fund an
individual pension plan for Executive.
6.2 Holidays and Annual Vacation Leave
Executive shall be entitled to all paid holidays as available to
other employees of the Company and, in addition, to annual vacation leave
which shall accrue on a pro rata basis during the Employment Term at the
rate of thirty (30) working days per annum. Unused annual vacation leave
during each year of the Employment Term shall be carried over from year to
year as necessary due to the exigencies of the business.
6.3 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 presently in existence, 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.
6.4 Exchange Rate Adjustments
Executive and the Company agree that to the extent that the
exchange rate between the dollar and Swedish kroner changes so that the
rate of the dollar drops more than ten percent (10%) against the Swedish
kroner, then the Company will pay Executive an additional amount equal to
the difference in the exchange rate. Payment of the difference shall be
made on a quarterly basis.
7. TERMINATION AND SEVERANCE PAYMENT
7.1 Termination
Upon the occurrence of an event of termination (as hereinafter
defined) during the period of Executive's employment under this Agreement,
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 a material breach by Executive of this
Agreement or for "cause" as defined in (iii) hereinbelow, or
(ii) Executive's resignation from the Company's employ, pursuant to
the provisions of this paragraph, upon (a) any liquidation, dissolution,
consolidation, or merger of the Company with any third party, or transfer
of all or substantially all of its assets to any third party; or (b)
material breach of this Agreement by Company and such breach continues for
at least thirty (30) days following written notification by Executive of
such breach. Upon the occurrence of any event described in Clauses (a),
or (b) 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.
(iii) Termination by the Company for "cause" shall mean the
Executive's termination by action of the Company's Board of Directors
because of dishonesty, gross neglect of duties hereunder, conviction of a
felony, engaging directly or indirectly in any competing business, or
willful misconduct.
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) 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 or shares (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 such
other market as Executive TeleCard, Ltd. stock is then traded on the date
of Executive's termination.
7.3 No Obligation to Mitigate Damages
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.
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, with Executive's
consent, the right to assign its rights hereunder to any third party
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, or mailed by first class, registered
mail, return receipt requested, postage and registry fees prepaid to, the
applicable party and addressed as follows:
(i) if to the Company: Executive TeleCard, S.A.
8 Avenue C
Nanuet, New York 10954
Facsimile: (914) 627 3631
(ii) if to Executive: Stig Sonnerberg
Stavgardsgatan 76
S16145
Bromma, Sweden
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 judgement 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 such judgement 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.
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 seven (7) pages, on this 1st day of November,
1995.
EXECUTIVE TELECARD, S.A.
/s/John Gitlin By:/s/Robert N. Schuck
Witness Its:
EXECUTIVE
/s/Stig Sonnerberg
Witness Stig Sonnerberg
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 November 1,
1995.
EXECUTIVE TELECARD, LTD.
/s/John Gitlin By:/s/Robert N. Schuck
Witness Its: Executive Vice President