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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 30, 2000, by and between,
deltathree.com, Inc., a Delaware corporation (the "Company"), and Lisa J.
Indovino ("Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to enter into an agreement, effective
as of October 2, 2000 (the "Commencement Date") 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 continue in 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 continued 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 September 30, 2003,
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 Executive Vice President of
Sales and Marketing and shall perform such duties and services, consistent with
such position and his current duties and services for the Company, and as may be
assigned to him from time to time by the Chief Executive Officer (the "CEO") of
the Company. 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. An "Affiliate" of the Company means any entity
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that controls, is controlled by or is under common control with the Company.
Executive shall report to the CEO.
(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 reasonable best efforts,
judgment, 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 CEO, conflicts with the duties of the
Executive under this Agreement. In such event, Executive shall receive five
days' written notice to disengage from such business activity. Executive may
serve on the Board of Directors or on advisory boards of other corporations
which do not compete with the Company. Executive shall travel 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. There is no formal disciplinary procedure, but Executive is
expected at all times to behave in a manner befitting his employment.
3. COMPENSATION.
(a) BASE SALARY. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of US$170,000; PROVIDED that
Executive's annual base salary shall be increased as of January 1 of each year,
commencing January 1, 2001, 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 consumer price index
for all urban consumers in the New York metropolitan area published by the
Department of Labor, or if such index is no longer available, such other
generally available index measuring changes in consumer purchasing power (in the
New York 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 be eligible to participate in the Company's 1999 Performance Incentive
Plan. The discretionary portion of the bonus shall be determined by the
Compensation Committee. If the Company shall amend or terminate the 1999
Performance Incentive Plan in a manner that would reduce the opportunity of
Executive to earn an incentive bonus as provided in the 1999 Performance
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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. The Company shall grant Executive an award of
stock options (the "Option") to purchase 160,000 shares of the Company's Class A
Common Stock (the "Common Stock") at an exercise price equal to US $6.4375 per
share, the Fair Market Value (as defined under the 1999 Stock Incentive Plan) on
the date of grant. The Option shall be governed by, and fall under, the
Company's 1999 Stock Incentive Plan. The Option shall become exercisable as set
forth below, PROVIDED that Executive is employed by the Company on such date,
and once exercisable shall, except as otherwise provided below, remain
exercisable until the expiration of seven years from the date of grant. However,
the Option shall be immediately terminated upon a termination of Executive's
employment by the Company for Cause (as hereinafter defined):
<TABLE>
<CAPTION>
Date First Exercisable Percentage Exercisable
---------------------- ----------------------
<S> <C>
First Anniversary of the Commencement Date 33-1/3%
Second Anniversary of the Commencement Date 66-2/3%
Third Anniversary of the Commencement Date 100%
</TABLE>
The Option shall become immediately exercisable in full in the event that
Executive's employment with the Company is terminated: (I) by the Company other
than for Cause, (II) by Executive for Good Reason or (III) by reason of the
death or Disability of the Executive; PROVIDED, HOWEVER, that if Executive's
employment is terminated for any reason prior to the 18 month anniversary of the
Commencement Date, only the exercisable portion of the Option, if any, shall
remain exercisable and any unvested portion of the Option shall not be
exercisable. The Option shall expire on the seven-year anniversary of the
Commencement Date.
Additionally, the Option shall become immediately exercisable in full upon
a Change in Control. The exercisable portion of the Option shall, following any
termination of Executive's employment (other than for Cause), 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.
(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
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generally provided to other senior officers of the Company in accordance with
the then current policies and practices of the Company. Executive shall not be
entitled to receive remuneration for unused vacation and shall not be permitted
to carry-over unused vacation to the following year, unless Executive receives
the written consent from the CEO prior to September 30th of such year.
(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 affiliates 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
Certificate of Incorporation and Bylaws 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.
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 by Executive for Good Reason, (vi) a Termination by
Executive other than for 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.
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(b) PAYMENTS UPON CERTAIN TERMINATIONS.
(i) TERMINATION WITHOUT CAUSE OR TERMINATION BY EXECUTIVE FOR GOOD
REASON. In the event that Executive's employment is terminated by the Company
Without Cause or by Executive for Good Reason, 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, (y)
the expiration of the Term or (z) one year.
(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).
(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 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.
(iv) TERMINATION BY EXECUTIVE OTHER THAN FOR GOOD REASON. In the
event of a Termination by Executive other than for 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
following the end of the Employment Period 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 during the eleven-month period following the first payment.
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(d) RETENTION OF MONIES OWED. The Company may at any time during
Executive's employment or upon his termination for any reason deduct and retain
from any monies owed by it to Executive any sum properly paid by it or any
Affiliate to, on behalf or at the request of Executive or due to it from
Executive including, but not limited to, unauthorized expenses or excess
vacation.
(e) DEFINITIONS. The following capitalized terms have the following
meanings:
"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 owned by RSL COM to the shareholders of RSL
COM, 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 RSL COM or any of its subsidiaries, 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 RSL COM or
any of its subsidiaries, or Lauder or a company controlled by him, or (iv) a
complete liquidation of the Company.
"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 an amount equal to Executive's annual Base
Salary as in effect immediately prior to the Termination Date.
"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
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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 or
the entering by Executive of a plea of nolo contendere with respect to a
charged felony, (ii) Executive's gross negligence, recklessness, dishonesty,
or fraud, willful malfeasance or willful misconduct in the performance of the
services contained in this Agreement; (iii) a willful failure without
reasonable justification to comply with a reasonable written order of the
Board of Directors or the CEO; or (iv) a willful and material breach of
Executive's duties or obligations under this Agreement, including, without
limitation, Executive's failure to devote full business time to the Company
in accordance with Section 2(b) of 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 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 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 1999 Performance
Incentive Plan below the levels contemplated by Sections 3(a) and (b), (ii) a
material reduction in Executive's positions, duties, responsibilities or
reporting lines from those described in Section 2 hereof; or (iii) a material
breach of this Agreement by 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) or (iii) 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 or (z) if the
opportunity under the Company's proposed 1999 Performance Incentive Plan is
reduced by action of the Board of Directors of the Company. Following a
"Change in Control," Executive shall not be deemed to have Good Reason under
clause (ii) above so long as he continues to have substantially the
responsibilities he had at the time of the Change in Control.
"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
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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,
including the Option (to the extent provided in Section 3(c)), at or subsequent
to the date of his termination without regard to the performance by Executive of
further services or the resolution of a contingency and expenses incurred prior
to termination of employment that are reimbursable under Section 4(c).
(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 or Affiliates, including, without limitation, RSL COM. 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 and Affiliates, 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 twelve months
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 1% of the outstanding voting shares
of any other publicly traded company). "Competing Business" means the business
of internet telephony and web telephony communication services engaged in by the
Company in any country where the Company or an Affiliate conducts such business
at any time during the Term. 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 twelve months after expiration of the
Employment Period, Executive proposes to engage directly or indirectly in what
may be a 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
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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 twelve month period following expiration of the
Employment Period, and (ii) the Company shall pay Executive, during such twelve
month 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, 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
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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, or members
of the Board of 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.
10. NO SOLICITING OR HIRING COMPANY EMPLOYEES
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
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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.
(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
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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 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.
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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 because the internet telephony
and web communications industry is globally integrated and that its constituent
companies are dependent for their survival on protection of their confidential
information which is highly advanced and technical and on carefully developed
knowledge of customer systems and requirements, the restrictions in this
agreement are reasonable to protect the Company's rights under this Agreement
and to safeguard the Company's and it Affiliates' Confidential Information.
(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. Executive
acknowledges and agrees that if any one or more of any part of such restrictions
shall be rendered or judged invalid or unenforceable, such restriction or part
shall be deemed to be severed from this Agreement and such invalidity or
unenforceability shall not in any way affect the validity of the remaining
provisions.
(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.
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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:
Ms. Lisa Joan Indovino
118 Bellevue Avenue
Upper Montclair, New Jersey 07043
U.S.A.
if to the Company, to the Company at
deltathree.com, Inc.
75 Broad St
31st Floor
New York , NY 10004
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
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The entire understanding and agreement between the Company and Executive
have been incorporated into this Agreement. There are no other agreements,
promises, representations, understandings 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.
(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.
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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.
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: August 30, 2000 /s/ Lisa J. Indovino
----------------------- ----------------------------------
Lisa J. Indovino
DELTATHREE.COM, INC.
Date: August 30, 2000 By: /s/ Noam Bardin
----------------------- ------------------------------
Name: Noam Bardin
Title: Chief Executive Officer
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