EXHIBIT 10.1 August 1, 2000
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 1, 2000, by and between RSL
Communications, Ltd., a Bermuda corporation (the "Company"), and Paul B.
Domorski ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Executive, effective as of a
date mutually agreed, but if the parties do not agree on an earlier date, August
19, 2000 (the "Commencement Date") and to set out the terms and conditions of
Executive's employment by the Company from and after the Commencement Date; and
WHEREAS, the Executive desires to enter into the employment of the
Company from and after the Commencement Date under those terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Executive hereby agree as follows:
1. Employment.
(a) Agreement to Employ. Upon the terms and subject to the conditions of
this Agreement, the Company hereby employs Executive, and Executive hereby
accepts employment by the Company.
(b) Term of Employment. The Company shall employ Executive for a term (the
"Term") commencing on the Commencement Date and ending on the date immediately
preceding the third anniversary of the Commencement Date, unless extended by a
written agreement signed by both parties. The period commencing on the
Commencement Date and ending on the earlier of (i) the expiration of the Term,
or (ii) the date of Executive's termination of employment pursuant to Section
5(a) shall be referred to as the "Employment Period".
2. Position and Duties.
(a) In general. Executive shall be employed as Chief Executive Officer and
President and shall perform such duties and services, consistent with such
position for the Company, as may be (i) specified in the Bye-Laws of the Company
or (ii) assigned to him from time to time by the Executive Committee (the
"Executive Committee") of the Board of Directors (the "Board") or the Board. The
duties of the Executive shall include serving as an officer or director or
otherwise performing services for any "Affiliate" of the Company as requested by
the Company, provided, however, that such services are
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consistent with Executive's role as CEO of the Company. An "Affiliate" of the
Company means any entity that controls, is controlled by or is under common
control with the Company. Executive shall report to the Board.
(b) Full-time employment. During the Employment Period, Executive shall
devote his full business time to the services required of him hereunder, except
for time devoted to services required by him to be performed for any "Affiliate"
of the Company, vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use his best efforts, judgement,
skill and energy to perform such services in a manner consonant with the duties
of his position and to improve and advance the business and interests of the
Company. Executive shall not be engaged in any other business activity which, in
the reasonable judgment of the Board, conflicts with the duties of the Executive
under this Agreement. Executive shall travel (if by airfare such travel shall be
business class) to such location or locations as may be requested by the
Company, or which Executive believes is necessary or advisable, in the
performance by Executive of his duties hereunder or to the extent appropriate to
improve and advance the interests of the Company and its Affiliates.
3. Compensation.
(a) Base Salary. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of US$500,000; provided that,
Executive's annual base salary shall be increased as of January 1 of each year,
commencing January 1, 2002, by an amount equal to the base salary then in
effect, multiplied by the percentage increase in the Cost of Living Index during
the preceding year. The "Cost of Living Index" means the Retail Prices Index for
the London metropolitan area published by the Office of National Statistics for
the preceding 12 month period, or if such index is no longer available, such
other generally available index measuring changes in consumer purchasing power
(in the London metropolitan area or nationally) designated by the Board of
Directors. Any delay in increase in Executive's annual base salary by reason of
the unavailability of any such index at the time any such increase shall
otherwise be due shall be made up by a lump sum payment promptly after the index
becomes available. Executive's salary, as adjusted for any increase in the Cost
of Living Index, may be further increased at the option and in the discretion of
the Board of Directors (such salary, as the same may be increased from time to
time, is referred to herein as the "Base Salary"). The Base Salary shall be
payable in such installments (but not less frequent than monthly) as the
salaries of other executives of the Company are paid.
(b) Performance Incentive Plan. During the Employment Period, Executive
shall participate in the Company's 1997 Performance Incentive Plan and be given
an opportunity to earn up to one times Base Salary upon the achievement of
targets determined by the Compensation Committee. The discretionary portion of
the bonus shall be determined by the Compensation Committee. Executive shall be
guaranteed a
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bonus equal to one times Base Salary for the first year of the Employment Period
(the "First Year Bonus") only (provided that such bonus shall be paid on a pro
rata basis with respect to the portion of the Employment Period in the fiscal
year ending December 31, 2000 (such pro rata bonus hereafter referred to as the
"2000 Bonus") and Executive shall be entitled to receive the remainder of the
First Year Bonus following 2001 year end). If the Company shall amend or
terminate the 1997 Performance Incentive Plan in a manner that would reduce the
opportunity of Executive to earn an incentive bonus as provided in the 1997
Performance Incentive Plan, the Company shall provide a substitute arrangement
so that Executive's total bonus opportunity will not be materially reduced.
(c) Stock Incentive Plan. Except as otherwise provided in this subsection
(c), the Company shall grant Executive an option (the "Option") under the
Company's 1997 Stock Incentive Plan to purchase 3,000,000 shares of the
Company's Class A Common Stock. The Option exercise price shall equal the "Fair
Market Value" (as defined in the 1997 Stock Incentive Plan) on August 1, 2000.
The Option shall become exercisable as set forth below, provided that Executive
is employed by the Company on such date, and once exercisable shall remain
exercisable until the expiration of seven years from the date of grant, unless
otherwise earlier terminated by reason of a termination of Executive's
employment by the Company for Cause or by the Executive other than for Good
Reason (as those terms are hereinafter defined):
Date First Exercisable Percentage Exercisable
---------------------- ----------------------
August 1, 2001 33.33%
August 1, 2002 66.66%
August 1, 2003 100.00%
The Option shall become immediately exercisable in full in the event
that Executive's employment with the Company is terminated by the Company other
than for Cause, by the Executive for Good Reason, or by reason of the death or
Disability (as hereinafter defined) of the Executive and shall, following any
such event, remain exercisable for the lesser of two years and the remaining
term of the Option.
4. Benefits, Perquisites and Expenses.
(a) Benefits. During the Employment Period, Executive shall be eligible to
participate in (i) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each pension, profit sharing, retirement,
deferred compensation or savings plan sponsored or maintained by the Company, in
each case, whether now existing or established hereafter, on the same basis as
generally made available to other senior officers of the Company. In addition,
during the Employment Period, the Company shall provide (at its cost) life
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insurance coverage for the Executive of no less than US$1,000,000, provided that
Executive submits to any physical examination required by the insurer and is
insurable at standard or preferred rates.
(b) Perquisites. During the Employment Period, Executive shall be entitled
to five weeks' paid vacation annually and shall also be entitled to receive such
perquisites as are generally provided to other senior officers of the Company in
accordance with the then current policies and practices of the Company.
(c) Business Expenses. During the Employment Period, the Company shall pay
or reimburse Executive for all reasonable expenses incurred or paid by Executive
in the performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may require and
in accordance with the generally applicable policies and procedures of the
Company.
(d) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance as an officer, director or employee of
the Company or any of its subsidiaries or in any other capacity, including any
fiduciary capacity, in which Executive serves at the request of the Company to
the maximum extent permitted by applicable law and the Company's Memorandum of
Association and Bye-Laws in effect on the date hereof. If any claim is asserted
against Executive with respect to which Executive reasonably believes in good
faith he is entitled to indemnification, the Company shall either defend
Executive or, at its option, pay Executive's legal expenses (or cause such
expenses to be paid) on a quarterly basis, provided that Executive shall
reimburse the Company for such amounts, plus simple interest thereon at the
90-day United States Treasury Bill rate as in effect from time to time,
compounded annually, if Executive shall be found by a court of competent
jurisdiction not to have been entitled to indemnification.
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5. Termination of Employment.
(a) Termination of the Employment Period. The Employment Period shall end
upon the earliest to occur of (i) a termination of Executive's employment on
account of Executive's death, (ii) a Termination due to Disability or
Retirement, (iii) a Termination for Cause, (iv) a Termination Without Cause, (v)
a Termination for Good Reason, (vi) a Termination Without Good Reason, or (vii)
the expiration of the Term. The Company or the Executive may initiate a
termination in any manner permitted hereunder by giving the other party written
notice thereof (the "Termination Notice"). The effective date (the "Termination
Date") of any termination shall be deemed to be the later of (i) in the case of
a Termination Notice from Executive, 45 days after the receipt by the Company of
the Termination Notice, (ii) the date on which the Termination Notice is given,
or (iii) the date specified in the Termination Notice; provided, however, that
in the case of the Executive's death, the Termination Date shall be the date of
death. Upon termination of his employment for any reason, Executive will
immediately resign from all positions that he holds with the Company and its
Affiliates.
(b) Payments Upon Certain Terminations.
(i) Termination for Good Reason or Termination Without Cause. In the
event that Executive's employment is terminated by Executive for Good Reason or
by the Company Without Cause, the Company shall pay Executive his Earned Salary,
Vested Benefits and a Severance Benefit (as such terms are hereinafter defined).
In addition, if Executive's employment terminates pursuant to this subsection
(i), the Company shall continue to provide to Executive the welfare benefits
(other than disability insurance) referred to in Section 4, or substantially
comparable benefits, until the earlier of (x) the date on which Executive is
eligible to obtain comparable benefits from other employment or (y) the
expiration of the Term.
(ii) Termination due to Death. In the event of the termination of
Executive's employment due to Executive's death, the Company shall pay
Executive's estate Executive's Earned Salary, Vested Benefits and a lump sum
payment equal to 12 months of Executive's Base Salary (at the rate in effect on
the date of his death), in addition to any life insurance benefits that
Executive shall be entitled pursuant to this Agreement.
(iii) Termination due to Disability or Retirement. In the event of
termination of Executive's employment by the Company due to Disability or a
Termination due to Retirement, the Company shall pay Executive his Earned Salary
and Vested Benefits, plus, in the event of termination due to Disability, to the
Executive or his estate his Base Salary at the Termination Date on a monthly
basis for 12 months following the month in which Executive's employment is
terminated. In addition, if Executive's employment is terminated by reason of
Disability, the Company shall continue to provide to Executive the welfare
benefits (other than disability insurance) referred to in Section 4 during the
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term of his disability. In the event that Executive's employment with the
Company is terminated due to Disability, Executive's benefits under this
subsection (iii) shall be reduced by the amount of any Company sponsored (and
paid for) disability benefits paid to Executive. The payments to be made to
Executive during the period of disability prior to termination are intended to
comply with the Disability Discrimination Act (United Kingdom).
(iv) Termination Without Good Reason. In the event of a termination
of Executive's employment by Executive Without Good Reason, the Company shall
pay Executive his Earned Salary and Vested Benefits.
(v) Termination for Cause. In the event of a termination of
Executive's employment by the Company for Cause, the Company shall pay Executive
his Earned Salary and Vested Benefits.
(c) Timing of Payments. Earned Salary shall be paid in a single lump sum
as soon as practicable, but in no event later than the earlier of 60 days or the
day such Earned Salary would have been payable under the Company's normal
payroll practices. Vested Benefits shall be payable in accordance with the terms
of the plan, policy, practice, program, contract or agreement under which such
benefits have accrued except as otherwise expressly modified by this Agreement.
Fifty percent (50%) of Severance Benefits shall be paid within 30 days after the
Termination Date and the remaining 50% of the Severance Benefits shall be paid
in equal monthly installments for a period commencing one month after the
payment of the first 50% of Severance Benefits and ending on the expiration date
of the Term; provided that in the event of the Executive's Termination for Good
Reason as the result of a "Change in Control", 100% of the Severance Benefit
shall be paid within five days after the Termination Date.
(d) Definitions. The following capitalized terms have the following
meanings:
"Earned Salary" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.
"Normal Retirement Age" means the first day of the month following
Executive attaining age 65.
"Severance Benefit" means the sum of (i) Executive's minimum Base
Salary for the remainder of the Term, but in no event less than 12 months, and
(ii) an amount equal to Executive's award, if any, under the 1997 Performance
Incentive Plan (or any successor plan) for the year immediately preceding the
year in which Executive's employment is terminated or (a) if Executive's
termination has occurred before the first anniversary of the Commencement Date,
the pro-rata portion of the First Year Bonus and
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(b) if Executive's termination has occurred on or after the first anniversary of
the Commencement Date and before December 31, 2001, the First Year Bonus.
"Termination due to Disability" means a termination of Executive's
employment by the Company because Executive has been incapable of substantially
fulfilling the positions, duties, responsibilities and obligations set forth in
this Agreement because of physical, mental or emotional incapacity resulting
from injury, sickness or disease for a period of (i) at least six consecutive
months or (ii) more than nine months in any twelve month period. Any question as
to the existence, extent or potentiality of Executive's disability upon which
Executive and the Company cannot agree shall be determined by a qualified,
independent physician selected by the Company and reasonably acceptable to
Executive. The determination of any such physician shall be final and conclusive
for all purposes of this Agreement. Executive or his legal representative or any
adult member of his immediate family shall have the right to present to such
physician such information and arguments as to Executive's disability as he, she
or they deem appropriate, including the opinion of Executive's personal
physician.
"Termination due to Retirement" means termination of employment by
Executive other than for Good Reason, or termination of Executive's employment
by the Company other than a Termination for Cause, on or after Executive's
Normal Retirement Age.
"Termination for Cause" means a termination of Executive's
employment by the Company due to (i) Executive's conviction of a felony (as
defined under United States federal law) or the entering by Executive of a plea
of nolo contendere (or equivalent) with respect to a charged felony (as defined
under United States federal law), (ii) Executive's gross negligence,
recklessness, dishonesty, fraud, willful malfeasance or willful misconduct in
the performance of the services contemplated by this Agreement, (iii) a willful
failure without reasonable justification to comply with a reasonable written
order of the Board of Directors; or (iv) a willful and material breach of
Executive's duties or obligations under this Agreement. Notwithstanding the
foregoing, a termination shall not be treated as a Termination for Cause unless
the Company shall have delivered a written notice to Executive stating that it
intends to terminate his employment for Cause and specifying the factual basis
for such termination, and the event or events that form the basis for the
notice, if capable of being cured, shall not have been cured within 30 days of
the receipt of such notice.
"Termination for Good Reason" means a termination of Executive's
employment by Executive within 90 days following (i) a reduction in Executive's
annual Base Salary or opportunity under the 1997 Performance Incentive Plan
below the levels contemplated by Sections 3(a) and (b), (ii) a significant
reduction in Executive's positions, duties, responsibilities or reporting lines
from those described in Section 2 hereof; (iii) a material breach of this
Agreement by the Company, (iv) relocation of
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Executive's principal place of employment outside of the London metropolitan
area or (v) a "Change in Control" of the Company. Notwithstanding the foregoing,
a termination shall not be treated as a Termination for Good Reason (x) if
Executive shall have consented in writing to the occurrence of the event giving
rise to the claim of Termination for Good Reason or (y) unless Executive shall
have delivered a written notice to the Company within 30 days of his having
actual knowledge of the occurrence of one of the events specified in clause (i),
(ii), (iii) or (iv) above stating that he intends to terminate his employment
for Good Reason and specifying the factual basis for such termination, and such
event, if capable of being cured, shall not have been cured within 30 days of
the receipt of such notice.
"Change in Control" means the occurrence of (i) a sale or other
disposition of stock of the Company, other than a spin-off or any other form of
distribution of the Company's shares, or an issuance of stock of the Company as
a result of which any "person" (as such term is used in section 13(d) and 14(d)
of the Exchange Act), other than the Company, or Ronald S. Lauder ("Lauder"), or
any of his controlled entities, is or becomes the beneficial owner of more than
50% of the total voting power of the Company and those persons who are members
of the Board of Directors of the Company immediately prior to the closing of
such transaction constitute less than one half of the membership of the Board of
Directors of the Company immediately following the closing of such transaction,
(ii) any merger, consolidation or reorganization following which those persons
who are members of the Board of Directors of the Company immediately prior to
the closing of such transaction constitute less than one half of the membership
of the board of directors of the surviving entity immediately following the
closing of such transaction, (iii) a transaction pursuant to which more than 50%
of the total value of the assets of the Company and its consolidated
subsidiaries are transferred and the transferee of such assets is not Lauder or
a company controlled by him, or (iv) a complete liquidation of the Company.
"Termination Without Cause" means any termination by the Company of
Executive's employment hereunder other than (i) a Termination due to Disability,
(ii) a Termination due to Retirement or (iii) a Termination for Cause.
"Termination Without Good Reason" means any termination by Executive
of Executive's employment hereunder other than (i) a termination due to
Executive's death, (ii) a Termination due to Retirement, (iii) a Termination for
Good Reason, or (iv) a Termination due to Disability.
"Vested Benefits" means amounts which are vested or which Executive
is otherwise entitled to receive under the terms of or in accordance with any
plan, policy, practice or program of, or any contract or agreement with, the
Company, at or subsequent to the date of his termination without regard to the
performance by Executive of further
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services or the resolution of a contingency and expenses incurred prior to
termination of employment that are reimbursable under Section 4(c).
(e) Adjustment to Notice. The Company reserves the right to make a payment
in lieu of notice should it so desire, or require Executive to remain away from
work during the notice period, whichever it may deem appropriate. Any payment in
lieu of notice will have any appropriate PAYE tax and National Insurance
Contributions deducted at source.
(f) Full Discharge of Company Obligations. The amounts payable to
Executive pursuant to this Section 5 following termination of his employment
(including amounts payable with respect to Vested Benefits) shall be in full and
complete satisfaction of Executive's rights under this Agreement and any other
claims he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Company and its subsidiaries, other than
Executive's rights to indemnification under Section 4(d).
6. Agreement Not to Compete With Company
(a) During the Employment Period and for a period of one year
thereafter (the "Applicable Period"), Executive shall not directly or indirectly
own, manage, operate, finance, join, control, advise, consult, render services
to, have an interest or future interest or participate in the ownership,
management, operation, financing or control of, or be employed by or connected
in any manner with any Competing Business (other than as a holder of common
stock of the Company, and not in excess of 5% of the outstanding voting shares
of any other publicly traded company); provided that Executive shall not make
any equity investment during the Applicable Period in a non-publicly traded
company that engages in a Competing Business without the prior written approval
of the Executive Committee. "Competing Business" means the business of
telecommunication services and solutions engaged in by the Company in any
country where the Company or an Affiliate conducts such business at any time
during the Term. Notwithstanding the foregoing, if the Company disengages in any
such business prior to the expiration of the Term, then such disengaged business
shall not be considered a Competing Business. Any opportunity directly or
indirectly related to any business engaged in by the Company, its subsidiaries
and Affiliates of which Executive becomes aware during the Term shall be deemed
a corporate opportunity of the Company, and Executive shall promptly make such
opportunity available to the Company.
(b) If, during the period of one year after expiration of the
Employment Period, Executive or an Affiliate of Executive proposes to engage in
what may be a
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Competing Business, Executive shall so notify the Company in a writing which
shall fully set forth and describe in detail the nature of the activity which
may be a competitive Business, the names of the companies or other entities with
or for whom such activity is proposed to be engaged in by Executive or by an
Affiliate of Executive (the "Section 6 Notice"). If, within 30 days after
receipt by the Company of a Section 6 Notice, the Company shall fail to notify
Executive that it deems the proposed activity to be a Competitive Business, then
Executive shall be free to engage in the activities described in the Section 6
Notice without violation of Section 6(a). If, however, the Company notifies
Executive that the proposed activities constitute a Competitive Business, then
(i) Executive shall not engage in such Competitive Business during the one-year
period following expiration of the Employment Period, and (ii) the Company shall
pay Executive, during such one-year period, in equal monthly installments, an
amount equal to his highest Base Salary; provided that the amount payable under
this Section 6(b) shall be reduced by the amount of Severance Benefit that
Executive is receiving for such period.
7. Confidential Information
(a) Without the prior written consent of the Company, Executive shall not
disclose at any time during the Employment Period or any time thereafter any
Confidential Information (as defined below) to any third person other than in
the course of fulfilling Executive's responsibilities under this Agreement
unless such Confidential Information has been previously disclosed to the public
by the Company or an Affiliate or is in the public domain (other than by reason
of Executive's breach of the provisions of this paragraph).
(b) "Confidential Information" is any non-public information pertaining to
the Company or an Affiliate, any of their businesses or the business or personal
affairs of Lauder or his family and how any of them conducts its or his business
or affairs. "Confidential Information" includes not only information disclosed
by the Company or an Affiliate to Executive, but non-public information
developed, created or learned by Executive during the course of or as a result
of Executive's employment with the Company. "Confidential Information"
specifically includes non-public information and documents concerning the
Company's and its Affiliates' methods of doing business; research,
telecommunications technology, its actual and potential clients, transactions
and suppliers (including the Company's or an Affiliate's terms, conditions and
other business arrangements with them); client or potential client or
transaction lists and billing; advertising, marketing and business plans and
strategies (including prospective or pending licensing applications or
investments in license holders or applicants); profit margins, goals, objectives
and projections; compilations, analyses and projections regarding the Company,
its Affiliates or any of its clients or potential clients or their businesses;
trade secrets; salary, staffing, management organization or employment
information; information relating to members of the Board of Directors and
management of the Company or an Affiliate; files, drawings or designs;
information regarding product development,
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marketing plans, sales plans or manufacturing plans; operating policies or
manuals, business plans, financial records or packaging design; or any other
non-public financial, commercial, business or technical information relating to
the Company, an Affiliate, Lauder or his family or non-public information
designated as confidential or proprietary that the Company, an Affiliate or
Lauder may receive belonging to others who do business with any of them.
(c) Nothing herein shall prevent the disclosure by Executive of any
information required by an order of a court having competent jurisdiction or
under subpoena from a government agency, provided that, if Executive receives a
request for the disclosure of any Confidential Information pursuant to court
process or by a government agency, Executive shall promptly (and at the latest
within five business days but not less than three days prior to the date
Executive is required to respond to the request) notify the Company of that
request and cooperate to the maximum extent authorized by law with the Company
in protecting the Company's and it Affiliates' interest in maintaining the
confidentiality of any Confidential Information. The Company will reimburse
Executive for reasonable out-of-pocket costs or expenses incurred by Executive
in connection with his cooperation with the Company and its Affiliates
hereunder.
8. No Disparaging Comments
Each of the parties hereto agrees not to make disparaging or derogatory comments
about the other party, members of the Board or Affiliates, except to the extent
required by law, and then only after consultation with the other party to the
maximum extent possible in order to maintain goodwill for each of the parties.
9. Return of Company Property
Promptly (and at the latest within ten business days) following Executive's
termination of services, Executive shall:
(i) return to the Company all documents, records, notebooks, computer
diskettes and tapes and anything else containing the Company's
Confidential Information (as defined above), and any other property
or Confidential Information of the Company or its Affiliates,
including all copies thereof in Executive's possession, custody or
control, and
(ii) delete from any computer or other electronic storage medium owned by
Executive any of the proprietary or Confidential Information of the
Company or its Affiliates.
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10. No Soliciting or Hiring Company Employees
Without the prior written consent of the Company, during the Employment Period
and for a one-year period thereafter, Executive shall not directly or indirectly
induce any employee of the Company or any Affiliate, other than Executive's
secretary or personal assistant, to terminate employment with such entity, and
during the Employment Period and for a six-month period thereafter, shall not
directly or indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ or offer employment to any person who is or was
employed by the Company or any Affiliate as an employee.
11. Continuing Obligations Following Termination
Executive agrees that his obligations and restrictions with respect to
noncompetition, confidentiality, Company property, nondisparagement and
nonsolicitation, and the Company obligations to indemnify Executive under
Section 4(d), will continue to apply following the termination of Executive's
relationship regardless of the manner in which his relationship with the Company
is terminated, whether voluntarily, for Cause, for Good Reason, without Cause or
otherwise.
12. Arbitration of All Disputes
(a) Any dispute, controversy or claim between the Executive and the
Company or any of its officers, directors, employees or shareholders (who are
expressly made third-party beneficiaries of this agreement) arising out of,
relating to or in connection with this agreement, or the breach, termination or
validity thereof, shall be finally resolved by binding and non-appealable
arbitration, before a single arbitrator selected by the procedure set forth
below, conducted in New York, New York.
(b) Either party may commence an arbitration proceeding by giving written
notice to the other party of its desire to arbitrate.
(c) The single arbitrator (the "Arbitrator") shall be selected from among
the New York City members of the New York Regional Panel of Distinguished
Neutrals (the "Panel") of the Center for Public Resources ("CPR") by mutual
agreement of the parties, or if the parties are unable to agree, by the
following means:
(A) The Company, on one hand, and Executive on the other
hand, shall simultaneously exchange lists each containing the names
of five members of their choice of the Panel who have indicated a
willingness to serve.
(B) If a single name appears on both lists, that
individual shall be appointed.
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(C) If more than one name appears on both parties'
lists, the Arbitrator shall be selected from the common names by
mutual agreement of the parties or by the toss of a coin.
(D) If the lists contain no names in common, each party
shall strike four names from the other party's list and the
Arbitrator shall be selected from the remaining two names by mutual
agreement of the parties or by the toss of a coin.
(E) If the CPR ceases to have a Panel or it is otherwise
impossible to select the Arbitrator from the Panel as contemplated
by this Agreement, the Arbitrator shall be selected by the President
of the CPR in the manner that the President deems closest to
satisfying the purposes of this Section, or, if such person is
unable to do so, by the President of the Association of the Bar of
the City of New York.
(d) The Arbitrator, after appropriate consultation with the parties, shall
(i) determine, in his or her sole discretion, the rules governing the
arbitration proceeding, including whether and to what extent the parties shall
have any right to pre-hearing discovery or other forms of disclosure, the manner
of presentation of arguments and/or evidence before or at any hearing, whether
and to what extent formal rules of evidence shall govern the proceeding and the
parties' rights following the proceeding, and (ii) be governed in exercising
such discretion by the goal of reaching a fair and reasonable decision in an
expeditious and efficient manner while endeavoring to streamline the process and
avoid undue litigation costs.
(e) The Arbitrator shall assess the costs of the proceeding (including the
prevailing party's reasonable attorney's fees) on any unsuccessful party to the
extent the Arbitrator concludes that such party is unsuccessful, unless he or
she concludes that (i) matters of equity or important considerations of fairness
dictate otherwise or (ii) in the case of Executive, the Arbitrator determined
that Executive acted reasonably and in good faith in pursuing all of the claims
asserted by him in such arbitration.
(f) The Arbitrator shall be required to state his or her decision in
writing and may, but shall not be required to, elaborate on the reasons for such
decision.
(g) The arbitrator(s) shall have the authority upon application by a party
to direct specific performance, including preliminary or interim specific
performance pending the final resolution of the arbitration, of any portion of
this agreement. The parties expressly consent to the jurisdiction and power of
any federal or state court in New York to enforce the terms of such a direction
upon application by a party. If the arbitrator(s) have not yet been appointed,
the parties may obtain injunctive or other appropriate relief from a court
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to enforce the terms of this agreement pending the appointment of the
arbitrator(s) who shall thereafter have full power to continue, modify or vacate
the terms of any injunctive relief ordered by the court.
(h) Notwithstanding the terms of this agreement that provide that New York
law shall govern, the arbitration and the provisions in this agreement dealing
with arbitration shall be governed exclusively by the United States (Federal)
Arbitration Act, 9 U.S.C. ss.ss. 1-16, and judgment on or enforcement of the
award or any direction for specific performance rendered by the arbitrators may
be entered by any court having jurisdiction thereof or having jurisdiction over
the relevant party or assets of such party.
(i) If, notwithstanding the parties' agreement to arbitrate, any issue is
presented to a court for decision, the parties hereby waive any right to trial
by jury.
(j) The parties agree that any dispute between the parties and the
arbitration itself shall be kept confidential and that the existence of the
arbitration and any element of it (including but not limited to any pleading,
brief or other document submitted or exchanged, any testimony or other oral
submission, and any award) shall not be disclosed except to the arbitrator(s),
the CPR Institute for Dispute Resolution, the parties, their counsel and any
person necessary to the conduct of the proceeding, except as may be lawfully
required in judicial proceedings relating to the arbitration or otherwise.
13. No Punitive or Emotional Damages
The parties hereto agree that neither the Executive nor the Company will be
entitled to seek or obtain punitive, exemplary or similar damages of any kind
from the other or, in the case of Executive, from the Company's officers,
directors, employees or shareholders, or to seek or obtain damages or
compensation for emotional distress, as a result of any dispute, controversy or
claim arising out of, relating to or in connection with this Agreement, or the
performance, breach, termination or validity thereof. Nothing herein shall
preclude an award of compensatory or punitive damages against any other third
party.
14. Injunctive Relief to Avoid Irreparable Injury
(a) Executive acknowledges and agrees that the individualized services and
capabilities that he will provide to the Company under this Agreement are of a
personal, special, unique, unusual, extraordinary and intellectual character.
(b) Executive acknowledges and agrees that the restrictions in this
agreement are reasonable to protect the Company's rights under this Agreement
and to safeguard the Company's and its Affiliates' Confidential Information.
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(c) Executive acknowledges and agrees that the covenants and obligations
of Executive with respect to noncompetition, nonsolicitation, confidentiality
and Company property relate to special, unique and extraordinary matters and
that a violation of any of the terms of such covenants and obligations will
cause the Company and its Affiliates irreparable injury for which adequate
remedies are not available at law. Executive therefore agrees that the Company
shall be entitled to an order of specific performance, injunction, restraining
order or such other interim or permanent equitable relief (without the
requirement to post bond) restraining Executive from committing any violation of
the covenants and obligations contained in this Agreement
(d) These injunctive remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.
(e) Executive represents that his economic means and circumstances are
such that the provisions of this Agreement, including the noncompetition,
nonsolicitation, confidentiality and Company property provisions, will not
prevent him from providing for himself and his family on a basis satisfactory to
him and them.
15. Automatic Amendment by Court Order and Interim Enforcement
(a) If the Arbitrator(s) or a court determines that, but for the
provisions of this paragraph, any part of this agreement is illegal, void as
against public policy or otherwise unenforceable, the relevant part will
automatically be amended to the extent necessary to make it sufficiently narrow
in scope, time and geographic area to be legally enforceable. All other terms
will remain in full force and effect.
(b) If the Executive raises any question as to the enforceability of any
part or terms of this agreement, including, without limitation, the provisions
relating to noncompetition, nonsolicitation, confidentiality and Company
property, the Executive specifically agrees that he will comply fully with this
Agreement unless and until the entry of an arbitral award to the contrary.
16. Notices
All notices and other communications required or permitted hereunder shall be
sufficiently given if (a) delivered personally, (b) sent by facsimile
transmission (with confirmation received), (c) sent by a nationally-recognized
air courier assuring overnight delivery, or (d) mailed (by registered or
certified mail, return receipt requested and postage prepaid) as follows:
if to the Executive, to the Executive at:
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Birch Common
Brockenhurst Road
South Ascot
Berkshire
United Kingdom
SL5 9HA
with a copy to:
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, Pennsylvania 19103-2097
Fax: (215) 977-2334
Attn: Robert M. Goldich, Esq.
if to the Company, to the Company at
Clarendon House
Church Street
Hamilton HM CX
Bermuda
Fax: (441) 292-4720
Attention: Roger Burgess
with a copy to:
c/o RSL Communications, N. America, Inc.
810 Seventh Avenue, 39th Floor
New York, New York 10019
Fax: (212) 445-7531
Attention: General Counsel
or to such other address as shall be furnished by notice from time to time by
one party hereto to the other party. Any such communication shall be deemed to
have been given, (i) in the case of personal delivery, on the date of delivery,
(ii) in the case of delivery by air courier, on the first business day following
the day on which such communication was posted, and (iii) in the case of
mailing, on the third business day following the day on which such notice was
posted.
17. Sole and Entire Understanding; Amendments
The entire understanding and agreement between the Company and Executive have
been incorporated into this Agreement. There are no other promises,
representations, under-
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standings or inducements by the Company to Executive or Executive to the Company
other than those specifically set forth in this Agreement. This Agreement may
not be altered, amended or added to except in a single writing signed by the
Company and the Executive.
18. Waiver of Breach
A waiver or breach of any provision of this Agreement shall not constitute or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate as
a waiver of such provision or of any other provision.
19. Headings
The headings of sections in this Agreement are for convenience only, are not a
part of this Agreement and shall not affect the construction of the provisions
of this Agreement.
20. Arm's Length
(a) This Agreement was entered into at arm's length, without duress or
coercion, and is to be interpreted as an agreement between parties of equal
bargaining strength. Both the Company and the Executive agree that this
Agreement is clear and unambiguous as to its terms, and that no parol or other
evidence will be used or admitted to alter or explain the terms of this
Agreement, but that it will be interpreted based on the language within its four
corners in accordance with the purposes for which it is entered into.
(b) The parties hereto expressly agree that any rule or contractual
interpretation, as applied under California law or anywhere else, that would
allow parol or extrinsic evidence to attempt to show fraud in the inducement or
duress to contradict the plain, unambiguous terms of this Agreement shall not
apply to this Agreement and its performance and enforcement. This provision is a
material part of this Agreement and, should any party try to introduce evidence
contrary to this provision, any other party shall be entitle to consider it a
breach and to rescind this contract in full.
21. Successors and Assigns
(a) This Agreement will inure to the benefit of, and will be binding upon,
the Company, its successors and assigns and upon the Executive and his heirs,
successors and assigns; provided, however, that, because this is an Agreement
for personal services, the Executive cannot assign any of his obligations under
this Agreement to anyone else.
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(b) This Agreement may be executed in counterparts, in which case each of
the two counterparts will be deemed to be an original and the final counterpart
shall be deemed to have been executed in New York, New York.
22. New York Law Governs
Any questions or other matters arising under this Agreement, whether of
validity, interpretation, performance or otherwise, will therefore be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be wholly performed in New York, without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.
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IN WITNESS WHEREOF, this Agreement has been executed by Executive
and then by the Company in New York, New York, on the dates shown below, but
effective as of the date and year first above written.
Date: 8/1/00 /s/ Paul B. Domorski
------------------------------ --------------------------------------
Executive
RSL COMMUNICATIONS, LTD.
Date: 8/1/00 BY: /s/ Itzhak Fisher
------------------------------ -----------------------------------
Title: Chief Executive Officer
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