The following Form of Employment Agreement was entered into with the following
executive officers:
Name Start Date Term Salary Positions Other Significant Changes
▇▇▇▇▇▇ ▇▇▇▇▇▇ 03/15/98 3 years $60,000 Senior Account Section 5.b, Termination
Executive/Director by Company without
of Carrier Sales "Cause", eliminated
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 04/01/98 3 years $80,000 Vice President/ Section 5.b, Termination
Executive Vice by Company without
President "Cause", eliminated
FORM OF EMPLOYMENT AGREEMENT
----------------------------
AGREEMENT made as of the ___ day of ______, 1998, by and between
____________, an adult individual residing at
___________________________________ (hereinafter referred to as "Executive") and
VDC Corporation Ltd., a Bermuda corporation having a registered office at ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ (hereinafter referred to as the"
Company").
WITNESSETH
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WHEREAS, on even date herewith, through its wholly-owned subsidiary,
Blue Sky Telecommunications, Inc., (the "Sub"), the Company completed the
purchase of the assets, business and operations of Blue Sky International,
L.L.C., a Colorado limited liability company ("LLC");
WHEREAS, the purchase of LLC was accomplished pursuant to the terms of
an Asset Purchase Agreement entered into among the parties hereto on even date
herewith ("Asset Purchase Agreement"); and
WHEREAS, pursuant to the terms of the Asset Purchase Agreement, the
Company agreed to employ Executive and Executive agreed to become employed by
the Company, each upon the terms and conditions contained within this Employment
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment Term, Duties and Acceptance
a. The Company hereby retains the Executive as ___________________,
to render his services to the Company upon the terms and
conditions herein contained, in such executive capacity, subject
to the direction of the Company through its principal executive
officers (including its Chief Executive, Chief Operating or Chief
Financial Officers), or its Board of Directors.
b. In recognition that the Company desires to continue the operation
of the historic business of LLC through the Sub, the Company also
assigns to the Executive the position as _______________________
of the Sub, and Executive accepts such position and agrees to
render such services to the Sub in such executive capacities as
are assigned to him by, and subject to the discretion of, the
Board of Directors of Sub.
c. The Executive hereby accepts the foregoing employment and agrees
to devote his full time, best efforts, energy and skill to such
employment.
d. The Executive shall not engage in any other business endeavor or
activity during the Employment Period.
e. The Executive hereby agrees that any and all business
opportunities which are similar to or in competition with the
Business of the Company (as such term is used and defined in
Section 6(a) below) and are available as of the date hereof or
become available to the Executive during the Employment Period
shall automatically become the sole property of the Company
without any obligation of the Company to compensate or otherwise
pay the Executive for such opportunities.
f. The term of the Executive's employment hereunder (the
"Employment Period") shall commence on the date hereof and shall
end on the third anniversary hereof, unless sooner terminated as
provided herein, provided, however, that the Employment Period
shall be extended and this Agreement shall be automatically
renewed for successive one-year periods unless: (i) this
Agreement is terminated as otherwise provided herein; or (ii)
Executive provides written notice to the Company of his desire
not to extend the Employment Period at least sixty (60) days
prior to the expiration of the then lapsing term.
2. Compensation and Expense Reimbursement
a. As base compensation for the Executive duly rendering his
services to the Company and the Sub pursuant to the terms of this
Agreement, Company agrees to pay and Executive agrees to accept a
base salary ("Base Salary") of _________ Dollars ($___________)
per annum to be paid in accordance with the general payroll
practices of the Company as from time to time in effect. The Base
Salary will be subject to merit increases annually as determined
by the Board of Directors.
b. Any bonus or other compensation provided for herein shall at all
times be exclusive of Executive's interest in and to the options
granted by the Company to him as set forth in the Option to
Purchase Common Shares entered into by the Executive and the
Company and dated of even date herewith (the "Option Agreement"),
as well as any stock option plan(s) that may in the future be
adopted by the Company for its management personnel.
c. The Company will pay or reimburse Executive for all reasonable
and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, including all of
the Executive's travel, hotel, meal and other incidental expenses
during the Executive's travel on behalf of the Company. Executive
shall keep detailed and accurate records of expenses incurred in
connection with the performance of his duties hereunder and
reimbursement therefor shall be in accordance with policies and
procedures to be established from time to time by the Board.
3. Fringe Benefits
a. Executive shall be entitled, subject to the terms and conditions
of particular plans and programs, to all fringe benefits
generally afforded to other employees of the Company at the level
of Executive, including, but not by way of limitation, the right
to participate in any pension, stock option, retirement, major
medical, group health, disability, accident and life insurance,
and other employee benefit programs made generally available,
from time to time, by the Company.
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b. During the term of this Agreement, the Company shall include
Executive and his family in family health insurance coverage
provided for executive level employees of the Company.
4. Vacations
Executive shall be entitled to compensated vacation in each
fiscal year, to be taken at times which do not unreasonably interfere with the
performance of Executive's duties hereunder and otherwise in accordance with the
Company's vacation policies in effect from time to time as applied to other
executives of the Company.
5. Termination
a. Termination by Company for "Cause". In addition to any other
remedies which the Company may have at law or in equity, the
Board of Directors may upon the affirmative vote of no less than
a majority of its members, terminate Executive's employment under
this Agreement by giving Executive written notice of such
termination upon or at any time following the occurrence of any
of the following events, and each such termination shall
constitute a termination for "cause," provided, however, that
Executive has first been given written notice of the facts or
circumstances constituting the determination of "cause" and a
reasonable opportunity (in no event less than fifteen (15) days)
to cure, rectify or reverse such facts or circumstances and
Executive shall have failed to do so: (a) any act or failure to
act (or series or combination thereof) by Executive done with the
intent to harm in any material respect the interests of the
Company or any affiliate thereof; (b) the commission by Executive
of a felony for which he is convicted by a court of competent
jurisdiction; (c) the finding by a court of competent
jurisdiction that Executive perpetrated a dishonest act or common
law fraud against the Company or any affiliate thereof; or (d) a
grossly negligent act or failure to act (or series or combination
thereof) by Executive detrimental to a material extent to the
interests of the Company or any affiliate thereof; or (e) the
continued refusal to follow the directives of the Board or the
Company's Chief Executive Officer which are consistent with
Executive's duties, responsibilities and covenants hereunder
unless the failure to follow such directives were either: (i)
based upon the advice of counsel; or (ii) based upon the
Executive's judgment in good faith that such directives would not
be in the best interests of the Company or its members.
Upon the early termination of Executive's employment under this
Agreement by the Company for "cause," the Company shall pay to Executive: (i) an
amount equal to Executive's Base Salary accrued through the effective date of
termination at the rate in effect at the time of termination, payable at the
time such payment is due; and (ii) any expense reimbursement amounts accrued to
the effective date of termination, payable on the effective date of termination.
Upon payment of such amounts, the Company shall have no further obligation to
Executive under this Agreement.
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b. Termination by Company without "Cause". At any time after the
six month anniversary of the date of this Agreement, the Company
may terminate this Agreement for any reason or no reason other
than for cause upon thirty (30) days written notice to the
Executive. Upon the early termination of the Executive's
employment under this Agreement by the Company "without cause,"
the Company shall pay to the Executive: (i) an amount equal to
the Executive's Base Salary accrued through the effective date of
termination at the rate in effect at the time of termination,
payable at the time such payment is due; (ii) a lump sum payment
at the time of termination equal to three month's Base Salary,
payable on the effective date of termination; and (iii) any
expense reimbursement amounts accrued to the effective date of
termination, payable on the effective date of termination. Upon
payment of such amounts, the Company shall have no further
obligation to Executive under this Agreement, and Executive shall
have no further rights under this Agreement.
c. Incapacity of Executive. Subject to applicable law, if
Executive shall become ill or be injured or otherwise become
incapacitated such that, in the opinion of the Board of
Directors, he cannot fully carry out and perform his duties
hereunder, and such incapacity shall continue for a period of 180
consecutive days, the Board of Directors may, at any time
thereafter, by giving Executive twenty (20) days' prior written
notice, fully and finally terminate his employment under this
Agreement. Termination under this Section 5(c) shall be effective
as of the date provided in such notice, which date shall not be
fewer than thirty (30) days after such notice is delivered to
Executive or his representative, and on the effective date of
termination, the Company shall pay the Executive (i) his Base
Salary accrued to the effective date of termination at the rate
in effect at the time of such notice, payable at the time such
payment is due; and (ii) any expense reimbursement amounts
accrued to the effective date of termination, payable on the
effective date of termination. Upon payment of such amounts, the
Company shall have no further obligation to Executive under this
Agreement, and Executive shall have no further rights under this
Agreement.
d. Death of Executive. This Agreement shall automatically
terminate upon the death of Executive. Upon the early termination
of this Agreement as a result of death, the Company shall pay the
Executive's estate: (i) an amount equal to the Executive's Base
Salary accrued through the effective date of termination at the
rate in effect at the effective date of termination, payable at
the time such payment is due; and (ii) any expense reimbursement
amounts accrued to the effective date of termination, payable on
the effective date of termination. Upon payment of such amounts,
the Company shall have no further obligation to Executive under
this Agreement, and Executive shall have no further rights under
this Agreement.
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e. Termination by Employee. At any time after the six month
anniversary of the date of this Agreement, the Executive may
terminate this Agreement by giving at least thirty (30) days'
prior written notice to the Company.
f. Mitigation. The Executive shall not be required to mitigate the
amount of any payment or other benefits provided for under this
Agreement by seeking other employment and none of these payments
or other benefits may be reduced by any salary or other benefits
that Executive may earn.
6. Covenant Not to Compete
a. The Executive recognizes and acknowledges that the Company is
placing its confidence and trust in the Executive. The Executive,
therefore, covenants and agrees that during the Applicable
Non-Compete Period (as defined below), the Executive shall not,
either directly or indirectly, without the prior written consent
of the Board of Directors: (i) engage in or carry on any business
or in any way become associated with any business which is
similar to or is in competition with the Business of the Company
(as such term is used and defined below); (ii) solicit the
business of any person or entity, on behalf of himself or any
other person or entity, which is or has been at any time during
the term of this Agreement a material customer or material
supplier of the Company including, but not limited to, former or
present customers or suppliers with whom the Executive has had
personal contact during, or by reason of, his relationship with
the Company; (iii) be or become an employee, agent, consultant,
representative, director or officer of, or be otherwise in any
manner associated with, any person, firm, corporation,
association or other entity which is engaged in or is carrying on
any business which is similar to or in competition with the
Business of the Company; (iv) solicit for employment or employ
any person employed by the Company at any time during the
12-month period immediately preceding such solicitation or
employment; or (v) be or become a shareholder, joint venturer,
owner (in whole or in part), partner, or be or become associated
with or have any proprietary or financial interest in or of any
firm, corporation, association or other entity which is engaged
in or is carrying on any business which is similar to or in
competition with the Business of the Company. Notwithstanding the
preceding sentence above, the following shall not be deemed to
violate this Section 6:
i. passive equity investments by Executive of $25,000 or less
in any entity or affiliated group of any entity which is
engaged in or is carrying on any business which is similar
to or in competition with the Business of the Company; or
ii. passive equity investments by Executive in excess of
$25,000 in any entity or affiliated group of any entity
which is engaged in or is carrying on any business which
is similar to or in competition with the Business of the
Company, so long as and only to the extent that Executive
has obtained the prior written consent of the Company to
make such investments; or
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iii. an equity investment by Executive of up to 5% in any
publicly traded company which is engaged in or is carrying
on any business which is similar to or in competition with
the Business of the Company.
b. As used in this Agreement, the term "Business of the Company"
shall include all material business activities in which the
Company is engaged now or during the Applicable Non-Compete
Period, which are: (i) telephony gateways in the United States,
Ukraine, Kazakhstan, Russia, China and Egypt; (ii) the
acquisition of Alaska Telecom; (iii) cellular, PCS or other
wireless telephony licenses and businesses for the United States,
Egypt, Kazakhstan, Ukraine, China and various republics and
regions of Russia; (iv) Internet service provision and local loop
opportunities in the United States, Egypt, Kazakhstan, Ukraine,
China and Russia; (v) funding and/or vendor financing from NTS,
Qualcomm, Ericcson and Motorola; (vi) paging and cable TV
licenses for the entire country of Ukraine; (vii) a billing
system the United States, Egypt, Kazakhstan, Ukraine, China and
Russia; (viii) a long distance in country project for the
national railway system of Ukraine; (ix) communications tower
site management business in the United States, Ukraine,
Kazakhstan, Egypt, China and Russia; and (x) Internet service
provision in the United States, Egypt, Kazakhstan, Ukraine, China
and Russia. The term "Business of the Company" shall not include
the business and activity currently conducted by Blue Sky
International L.L.C., which consists entirely of (i) marketing
and reselling telecommunications services and (ii) providing
consulting services to carriers, networks, telephone companies
and prepaid telephone card companies (the "Business of Blue
Sky").
c. Executive hereby recognizes and acknowledges that the existing
Business of the Company extends throughout a number of countries,
including Ukraine, Russia, China, Egypt and Kazakhstan and most
states of the United States, and therefore agrees that the
covenants not to compete contained in this Section 6 shall be
applicable in and throughout such countries and states, as well
as throughout such additional areas, states or countries in which
the Company may be (or has prepared written plans to be) doing
business as of the date of termination of the Executive's
employment. The Executive further warrants and represents that,
because of his varied skill and abilities, he does not need to
compete with the Business of the Company and that this Agreement
will not prevent him from earning a livelihood and acknowledges
that the restrictions contained in this Section 6 constitute
reasonable protections for the Company.
d. As used in this Section 6, "Applicable Non-Compete Period" shall
mean all periods of employment hereunder and that period of one
year following the termination of Executive's employment
hereunder.
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7. Trade Secrets and Confidential Information
Executive recognizes and acknowledges that certain information
including, without limitation, information pertaining to the financial condition
of the Company, its systems, methods of doing business, agreements with
customers or suppliers or other aspects of the Business of the Company or which
is sufficiently secret to derive economic value from not being disclosed
("Confidential Information") may be made available or otherwise come into the
possession of the Executive by reason of his employment with the Company.
Accordingly, the Executive agrees that he will not at any time disclose any
Confidential Information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever or make use to his personal
advantage or to the advantage of any third party, of any Confidential
Information, without the prior written consent of the Board of Directors. The
Executive shall, upon termination of employment, return to the Company all
documents which reflect Confidential Information (including copies thereof).
Notwithstanding anything heretofore stated in this Section 7, the Executive's
obligations under this Section 7 shall not, after termination of the Executive's
employment with the Company, apply to information which has become generally
available to the public without any action or omission of the Executive (except
that any Confidential Information which is disclosed to any third party by an
employee or representative of the Company who is not authorized to make such
disclosure shall be deemed to remain confidential and protectable by the
Executive under this Section 7).
8. Severability
The invalidity or unenforceability of any term of this Agreement
shall not affect the validity or enforceability of this Agreement or any of its
other terms; and this Agreement and such other terms shall be construed as
though the invalid or unenforceable term(s) were not included herein, unless the
effect would be to vitiate the parties' fundamental purposes in entering into
this Agreement.
9. Breach
The Executive hereby recognizes and acknowledges that irreparable
injury or damage shall result to the Company in the event of a breach or
threatened breach by the Executive of any of the terms of provisions Section 6
or 7 hereunder, and the Executive therefore agrees that the Company shall be
entitled to an injunction restraining Executive from engaging in any activity
constituting such breach or threatened breach. Nothing contained herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to the Company at law or in equity for breach or threatened breach of this
Agreement, including but not limited to, the recovery of damages from the
Executive and, if the Executive is an employee of the Company, the termination
of his employment with the Company in accordance with the terms and provisions
of this Agreement.
10. Arbitration
All controversies which may arise between the parties hereto
including, but not limited to, those arising out of or related to this Agreement
shall be determined by binding arbitration applying the laws of the State of
Delaware as set forth in Section 14 hereof. Any arbitration pursuant to this
Agreement shall be conducted in Philadelphia, Pennsylvania before the American
Arbitration Association in accordance with its arbitration rules. The
arbitration shall be final and binding upon all the parties (so long as the
award was not procured by corruption, fraud or undue means) and the arbitrator's
award shall not be required to include factual findings or legal reasoning.
Nothing in this Section 10 will prevent either party from resorting to judicial
proceedings if interim injunctive relief under the laws of the State of Delaware
from a court is necessary to prevent serious and irreparable injury to one of
the parties, and the parties hereto agree that the federal and state courts
located in Philadelphia, Pennsylvania shall have exclusive subject matter and in
personam jurisdiction over the parties and any such claims or disputes arising
from the subject matter contained herein.
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11. Remedies Cumulative
Except as otherwise expressly provided herein, each of the rights
and remedies of the parties set forth in this Agreement shall be cumulative with
all other such rights and remedies, as well as with all rights and remedies of
the parties otherwise available at law or in equity.
12. Counterparts
This Agreement may be executed via facsimile transmission
signature and in counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument.
13. Waiver
The failure of either party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. To be effective, any waiver must be contained in
a written instrument signed by the party waiving compliance by the other party
of the term or covenant as specified. The waiver by either party of the breach
of any term or covenant contained herein, whether by conduct or otherwise, in
any one or more instances, shall not be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
14. Governing Law
This Agreement shall be governed by the laws of the State of
Delaware without regard to principles of conflict of laws.
15. Complete Agreement
This Agreement constitutes the complete and exclusive agreement
between the parties hereto which supersedes all proposals, oral and written, and
all other communications between the parties relating to the subject matter
contained herein.
16. Warranties
The Executive represents, warrants, covenants and agrees that he
has a right to enter into this Agreement, that he is not a party to any
agreement or understanding whether or not written which would prohibit or
restrict his performance of his obligations under this Agreement and that he
will not use in the performance of his obligations hereunder any proprietary
information of any other party which he is legally prohibited from using.
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17. Notice
Any notice required to be given pursuant to the provisions of
this Agreement shall be in writing and sent by registered mail or nationally
recognized overnight carrier, to the parties at the following addresses:
To the Company at:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
VDC Corporation Ltd.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
Eleven Penn Center, 14th Floor
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To the Executive at:
--------------------------------
--------------------------------
--------------------------------
18. Key Man Insurance
The Company shall have the right to obtain what is commonly known
as "Key Man Insurance" on the life of the Executive in such amount as the
Company deems appropriate. The Executive agrees to cooperate in all manner in
the obtaining of such a policy. All expenses involved in connection with the
obtaining and maintaining of such a policy shall be that of the Company.
19. Due Authorization
The Company represents to the Executive that this Agreement has
been duly authorized and approved by the Board of Directors of the Company.
20. Assignment
This Agreement shall inure to the benefit of and be binding upon
the Company, its successors and assigns. This Agreement may not be assigned to
any third party without the written consent of all parties to the assignment.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of this __ day of ______, 1998.
ATTEST: VDC CORPORATION LTD.
_______________________________ By:_________________________________
, Secretary ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
WITNESS: EXECUTIVE:
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