SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
_____________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 1997
US WATS, INC.
(Exact name of Registrant as Specified in its Charter)
0-22944
(Commission File Number)
New York 22-3055962
- ----------------------------------- ------------------------------
(State of Other Jurisdiction of (IRS Employer Identification
Incorporation) Number)
111 Presidential Boulevard
Suite 114
Bala Cynwyd, Pennsylvania 19004
-------------------------------------
(Address, including zip code, of Registrant's Principal Executive Offices)
(610) 660-0100
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
The following summarizes recent strategic initiatives implemented by the
Board of Directors of the Company, resulting executive management changes,
and the associated issuance's and termination's of stock options as a
result of the recently hired executives.
Strategic Initiatives
US Wats, Inc. currently operates as a facilities based Interexchange Long
Distance Carrier with customers generally located in the Mid-Atlantic
States. The Company's primary products include outbound 1+, inbound
800/888, and calling cards marketed primarily through agents and resellers.
As a result of the deregulation of the local telephone market, the Company
has decided to obtain certification to be a Competitive Local Exchange
Carrier (CLEC) in the Mid-Atlantic states. The Company's primary focus
will be to provide a bundled product offering of local and long distance
services to commercial accounts within the region. The Company intends to
continue to pursue and grow its existing base of agent and reseller revenue
however it intends on focusing these efforts generally in the Mid-Atlantic
states. As a result, the Company does not expect to pursue its network and
customer development efforts in the Mid-West and California regions. As a
first step, the Company has recently recruited executive management
experienced both in the provision of local dial tone service and long
distance service to implement the Company's new strategic initiatives.
Executive Management Changes and Additions
On December 16, 1996 the Company hired Kevin M. O'Hare, age 36, as the
Company's new President and Chief Executive Officer. Effective December
16, 1996, Aaron R. Brown, Director, Chief Executive Officer and Treasurer
resigned his positions as Chief Executive Officer and Treasurer. Mr.
O'Hare's appointment also replaced Mr. Mark J. Scully as the President
whose employment with the Company was terminated effective December 30,
1996. The options to purchase 850,000 shares of the Company's Common Stock
previously granted to Mr. Scully terminated with employment on December
30, 1996.
Also on December 16, 1996 the Company hired Mr. David B. Hurwitz, age 34,
as Executive Vice President of Sales and Marketing. Effective December 16,
1996, Mr. Stephen J. Parker Director, Chief Operating Officer and Secretary
resigned his position as Chief Operating Officer.
Prior to joining US Wats, Inc., Mr. O'Hare served from 1995 to 1996 as the
Corporate Executive Vice President of C-TEC a public company in the
telecommunications industry with $370 million in revenue. Prior to his
role at C-TEC Mr. O'Hare served in a general management capacity for ACC
Long Distance Corp. from 1994 to 1995. Prior to joining ACC, Mr. O'Hare
managed telephone companies for Rochester Telephone including two Local
Exchange Carriers from 1985 to 1993; the Seneca Gorham Telephone Company
and The AuSable Valley Telephone Company.
Mr. Hurwitz, prior to joining US Wats, Inc. served as the Vice President of
Sales and Marketing of Commonwealth Long Distance, a C-TEC company from
1995 to 1996. Prior to his position with C-TEC, Mr. Hurwitz served as
Executive Vice President and Chief Operating Officer of InterNet
Communication Services, Inc. and as General Manager of FiberNet from 1992
to 1995 both of which were affiliated companies. Mr. Hurwitz has also held
sales and sales management positions with Frontier, (formerly RCI Long
Distance) a subsidiary of Rochester Telephone from 1985 to 1992.
On January 10, 1997, the Company hired Mr. Mark Mendes, age 34, as its
Chief Operating Officer. Prior to joining US Wats, Inc., Mr. Mendes served
as the Vice President, Service & Technology for ACCESS Teleconferencing
International where he was responsible for daily operations, switch and
telecommunications systems management, access cost management, and customer
service. Prior to joining ACCESS, Mr. Mendes was Vice President of
Engineering and Operations of InterNet Communications Services, Inc. from
1993 to 1995. Prior to InterNet Communications Services Mr. Mendes was the
Director of Network Development at FiberNet, Inc. From 1986 to 1992, Mr.
Mendes was employed by Rochester Telephone in various management positions
relating to service and maintenance of subscriber lines.
Employment Agreements Executed
The Company executed employment agreements with Messrs. O'Hare and Hurwitz
effective December 16, 1996 and January 6, 1997 respectively. Each
contract is for a term of three (3) years from the effective date and
contain cost of living increases of not less than the increase in the
consumer price index. The base salary payable to Messrs. O'Hare and
Hurwitz is $200,000 and $150,000 respectively.
In addition, Mr. O'Hare shall be eligible to participate in the company's
profit sharing bonus pool to be implemented by the Company's Compensation
Committee. Such pool when created shall not exceed 7% of the Company's
pre-tax income. If the bonus pool is not implemented before the first
anniversary of the Term, then Mr O'Hare shall be entitled to receive a cash
bonus equal to 3.5% of the Company's net pre-tax income.
Under Mr Hurwitz's contract, he shall be entitled to receive cash bonus
payments in an amount up to his then base salary based upon to be
determined performance criteria. Until such time that the performance
criteria is established, Mr Hurwitz shall be entitled to a monthly cash
bonus payment equal to one quarter of one percent of the Company's total
revenue provided such monthly bonus shall not exceed one twelfth of his
annual base salary.
Under each of the agreements, the Company shall provide term life insurance
in an amount of not less than two (2) times each executive's annual yearly
salary and an after tax automobile allowance of $600 per month.
On January 10, 1997, the Company executed an employment agreement with Mr.
Mark Mendes. The base salary payable to Mr. Mendes under the agreement is
$162,000 per year. The agreement with Mr. Mendes is for a term of three
(3) years from the effective date and contains cost of living increases of
not less than the increase in the consumer price index from the preceding
year. Under the agreement, the Company shall provide term life insurance
in an amount not less than two (2) times the executive's yearly salary, an
after tax automobile allowance of $600 per month, and participation in the
Company's profit sharing bonus pool to be established by the Company's
Compensation Committee.
Stock Option Transactions
In connection with their resignations as officers of the Corporation,
Messrs. Brown and Parker agreed to terminate certain of their previously
granted Incentive Stock Options. Messrs. Brown and Parker each canceled
300,000 Incentive Stock Options granted on September 1, 1993 which were
scheduled to vest on the attainment of certain performance criteria based
upon revenue and net income targets.
In connection with their employment agreements, Messrs. O'Hare and Hurwitz
were granted both Incentive Stock Options and Non-qualified stock options.
These agreements were subsequently amended as detailed below.
Pursuant to the Company's Stock Option Plan as amended and restated
effective August 13, 1996, (the "Plan") Mr. O'Hare was originally granted
options to purchase 1,100,000 shares of Common Stock of the Company. The
options were issued under two separate agreements one of which covered
Incentive Stock Options for 600,000 shares of Common Stock ("First Option")
and the second of which covered Non-Qualified Stock Options for 500,000
shares of Common Stock (the "Second Option"). Under the First Option,
300,000 shares vested immediately and 150,000 shares were to vest on each
successive anniversary of the date of grant. The exercise price under the
First option was $1.03125. Under the Second Option, an aggregate of up to
500,000 shares of Common Stock were to be vested in 125,000 share
increments in accordance with certain stock price performance criteria
contained in the associated option agreement. The exercise price for the
four 125,000 share groups of Second Options was the average of the bid and
ask less a discount of 15% provided that the stock traded at or above
$1.50, $2.00, $2.50, and $3.00 respectively.
Pursuant to the Company's Stock Option Plan as amended and restated
effective August 13, 1996, Mr. Hurwitz was originally granted options to
purchase 700,000 shares of Common Stock of the Company. The options were
issued under two separate agreements one of which covered 400,000 shares of
Common Stock ("First Option") and the second of which covered 300,000
shares of Common Stock ("the Second Option"). Under the First Option,
200,000 shares shall vest immediately and 100,000 were to vest on each
successive anniversary of the date of grant. Under the Second option, an
aggregate of up to 300,000 shares of Common Stock were to be vested in
75,000 share increments in accordance with certain stock price performance
criteria contained in the associated option agreement. The exercise price
for the four 75,000 share groups of Second Options was the average of the
bid and ask less a discount of 15% provided that the stock traded at or
above $1.50, $2.00, $2.50, and $3.00 respectively.
On January 10, 1997, the stock option agreements for Messrs. O'Hare and
Hurwitz were amended by converting all of the Incentive Stock Options to
Non-Qualified options and converting the exercise prices of the original
Non-Qualified options from the discounted amounts stated above to $1.30.
The fair market value of the Company's stock on January 10, 1997 was
$1.25.
The vesting of Mr. O'Hare's 500,000 Non-Qualified options was amended to
170,000 vesting upon the first anniversary of employment, 165,000 vested on
the second anniversary, and 165,000 vested on the third anniversary of
employment.
The vesting of Mr. Hurwitz's 300,000 Non-Qualified options was amended to
100,000 vesting upon the first anniversary of employment, 100,000 vested on
the second anniversary, and 100,000 vested on the third anniversary of
employment.
Pursuant to the Company's Stock Option Plan as amended and restated
effective August 13, 1996, Mr. Mendes was granted 350,000, Non-Qualified
Stock Options exercisable at $1.25. Under the option, 170,000 shares shall
be immediately vested, and 60,000 shall be vested on the first, second, and
third successive anniversaries of the date of grant.
Board of Directors Changes
On January 8, 1997, Kevin O'Hare was elected by the Board as a Director of
the Corporation
On January 14, 1997, Aaron Brown resigned from the Board of Directors as
Chairman and as an employee. The Company executed a consulting agreement
with Mr. Brown upon his resignation from the Company as an employee. The
consulting agreement executed with Mr. Brown was for a term of six (6)
years terminating on January 13, 2003 with an automatic extension of one
(1) year unless either party serves upon the other written notice of its
intent not to renew no later than thirty (30) days prior to the expiration
of the initial term. Mr. Brown will be compensated under the agreement at
a rate of $125,000 annually increased annually by the increase in the
Consumer Price Index. As a result of Mr. Brown's resignation, 300,000
Incentive Stock Options granted on September 1, 1993 terminated.
On February 11, 1997, the Company announced the appointment of Tansukh
Ganatra to its Board of Directors. Mr. Ganatra currently serves as
President and Chief Operating Officer for US LEC, a privately held
competitive local exchange carrier in Charlotte, N.C.. Prior to founding
US LEC, Mr. Ganatra was employed by ACC Corp. during various periods
starting in 1987. While at ACC, Mr. Ganatra held several positions
including Executive Vice President of ACC Corp., Vice President of
Engineering/Operations of ACC Long Distance Corp., President of ACC Long
Distance Corp.., and President and Chief Operating Officer of ACC Corp.
Prior to joining ACC Corp. Mr. Ganatra held various positions with
Rochester Telephone Corp. (now Frontier Corporation).
Currently, the Board of Directors of US WATS, Inc. is composed of Mr. Steve
Parker, Secretary, Kevin O'Hare, CEO, and outside directors Mr. Murray
Goldberg, and Mr. Tan Ganatra
Item 5. Exhibits
10.08 Employment Agreement dated December 16, 1996 between US WATS,
Inc. and Kevin M. O'Hare
10.09 Employment Agreement dated December 16, 1996 between US WATS,
Inc. and David B. Hurwitz
10.10 Employment Agreement dated January 10, 1997 between US WATS, Inc.
and Mark Mendes
10.11 Amended Employment Agreement dated January 10, 1997 between
US WATS, Inc. and Kevin M. O'Hare
10.12 Amended Employment Agreement dated January 10, 1997 between
US WATS, Inc. and David B. Hurwitz
10.13 Consulting Agreement dated January 14, 1997 between US WATS, Inc.
and Aaron R. Brown
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
US WATS, Inc.
(Registrant)
By: /s/ Kevin M. O'Hare
---------------------------
Kevin M. O'Hare
Chief Executive Officer, Director
By: /s/ Ward Schultz
---------------------------
Ward Schultz
Chief Financial Officer
Dated: February 25, 1997
Exhibit 10.08
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT made as of the 16th day of December
1996, by and between US WATS, INC., a New York corporation, with offices at
111 Presidential Boulevard, Suite 114, Bala Cynwyd, Pennsylvania 19004 (the
"Company"), and KEVIN M. O'HARE, residing at 48 Steeplechase Drive,
Doylestown, PA 18901 (the "Executive").
W I T N E S E T H:
WHEREAS, the Company desires to employ the Executive, and the
Executive is willing to be employed by the Company, upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Employment. The Company agrees to and does hereby employ the
Executive, and the Executive agrees to and does hereby accept employment by
the Company, subject to the terms and conditions herein set forth.
2. Term. The term of the Executive's employment hereunder shall
commence on the date hereof (the "Effective Date") and shall terminate
three (3) years thereafter (such period hereinafter referred to as the
"Term").
3. Duties.
3.1 During the Term, the Executive shall be employed as Chief
Executive Officer of the Company and any successors thereto or to its
business, and shall be in charge of and responsible for the general and
supervisory duties normally and customarily attendant to such office and
shall render such other lawful services, and exercise such powers, which
are from time to time requested of him, assigned to him or vested in him by
the Board of Directors of the Company (the "Board") and which are
commensurate with his position as Chief Executive Officer.
3.2 The Executive at his discretion shall also serve as a member
of the Board of Directors of the Company and as a member of the Company's
Compensation Committee.
3.3 The Executive agrees that, during the Term, unless the Board
shall otherwise consent, he will devote such amount of his time, energies,
labor and skills to the business of the Company and to the duties and
responsibilities specified in Section 3.1 as shall be reasonably necessary.
4. Base Compensation. In consideration for services performed
hereunder, the Company shall pay to the Executive an annual base salary of
$200,000 in installments payable in accordance with the Company's customary
payroll practices, but in no event less than one time per month. On each
anniversary of the Effective Date of this Agreement, the Executive's base
salary shall be increased, at a minimum, by an amount equal to the base
salary then in effect multiplied by the percentage increase in the consumer
price index from the preceding year. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by him in
connection with the performance of his duties hereunder and the business of
the Company upon the submission to the Company of appropriate receipts
therefor.
5. Benefits and Cash Bonus.
5.1 Throughout the Term, the Executive shall be eligible to
participate in any pension, profit-sharing, stock option or similar plan or
program of the Company now existing or established hereafter for the
benefit of its employees generally, to the extent that he is eligible under
the general provisions thereof. The Executive shall also be entitled to
participate in any group insurance, hospitalization, medical, health and
accident, disability or similar or nonsimilar plan or program of the
Company now existing or established hereafter for the benefit of its
employees or executives generally, to the extent that he is eligible under
the general provisions thereof.
5.2 The Company shall provide the Executive with a policy of
term life insurance in an amount equal to not less than two (2) times his
yearly salary hereunder, payable to such beneficiary or such beneficiaries
as shall be designated in writing by the Executive.
5.3 The Executive shall participate in the Company's profit
sharing bonus pool (the "Bonus Pool") to be implemented by the Compensation
Committee, of which the Executive shall be a member. As currently
contemplated, the Bonus Pool shall provide for the award of cash bonuses to
the Company's executive employees in an amount which, in the aggregate,
shall not exceed 7% of the Company's annual net pre-tax income. The
Compensation Committee shall determine, in its discretion, which eligible
participants in the Bonus Pool shall be entitled to bonus payments
thereunder.
5.4 If the Bonus Pool is not implemented, before the first
anniversary of the Term, or such sooner time as bonus payments have
traditionally been determined and distributed by the Company, then in such
event the Executive shall be entitled to receive a cash bonus equal to 3.5%
of the Company's net pre-tax income.
5.5 The Company shall provide Executive an automobile allowance
of $600 per month to cover Executive's use of his vehicle for business
purposes.
6. Stock Option Grant. Contemporaneously with the execution hereof,
the Company is granting to the Executive, pursuant to the Company's Stock
Option Plan as amended and restated effective August 13, 1996 (the
"Plan"), five (5) year options to purchase an aggregate of up to 1,100,000
shares of Common Stock of the Company. The options shall be granted
pursuant to two (2) separate Option Agreements, one of which shall cover an
aggregate of 600,000 shares of Common Stock (the "First Option"), and the
second one of which shall cover 500,000 shares of Common Stock (the "Second
Option"). Under the First Option, 300,000 shares shall be immediately
vested, and 150,000 shares shall be vested on each successive anniversary
of the date of grant. Under the Second Option, an aggregate of up to
500,000 shares of Common Stock shall vest in 125,000 share increments in
accordance with certain performance criteria contained in the option
agreement relating thereto.
7. Termination of Executive's Employment.
7.1 Notwithstanding any provisions contained herein to the
contrary, the Executive's employment may be terminated by the Company upon
the Executive's death or disability (as defined below); or for Cause (as
defined below); or upon a Change in Control (as defined below).
7.2 For purposes of this Agreement, "disability" shall mean the
Executive is mentally or physically disabled from properly and fully
performing his duties and responsibilities hereunder for a period of 120
consecutive days or for 180 days, even though not consecutive, within a
360-day period, all as evidenced by the written certification of a
qualified medical doctor agreed to by the Company and the Executive or, in
the absence of such agreement, by a doctor selected by the agreement of a
qualified medical doctor selected by each of the Company and the Executive.
7.3 For purposes of this Agreement, "Cause" shall mean: (i) the
conviction of the Executive of a felony by a federal or state court of
competent jurisdiction; (ii) gross misconduct relating to the Company;
(iii) intentional misappropriation of funds; or (iv) deliberate and
premeditated acts against the interest of the Company. In the case of any
of the foregoing, the Company shall have the right, following notice and a
reasonable opportunity to cure of not less than sixty (60) days (except in
the case of clauses (i) and (iii) hereunder), to terminate this Agreement
without further obligation to the Executive.
7.4 In the event that the Executive's employment hereunder is
terminated as a result of death, disability or for Cause by the Company,
then the Company shall have no further obligations or liabilities to the
Executive hereunder, such that all benefits and salary provided for within
this Agreement shall terminate simultaneously with the termination of the
Executive's employment except for benefits and salary earned and accrued
through the date of such termination. Nothing in this Section 7.4 shall
supersede any rights of the Executive to receive any amounts or benefits
otherwise due to him upon the occurrence of any of the events described in
the immediately preceding sentence, whether such rights are created by this
Agreement or otherwise.
7.5 In the event that the Executive's employment hereunder is
terminated for reasons other than Cause, then the Company shall be
obligated to pay the Executive an amount equal to the balance of the
Executive's base salary which would have been earned for the remainder of
the Term.
8. Covenants of the Executive.
8.1 Confidentiality. The Executive acknowledges that his
employment by the Company will throughout his employment bring him into
close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, key personnel, pricing
policies, operational methods, and other business affairs, methods and
information, including plans for future developments, not readily available
to the public. The Executive further acknowledges that the services to be
performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in
all of the states of the United States. In recognition of the foregoing,
the Executive covenants and agrees that: (i) he will not knowingly
divulge any material confidential matters of the Company which are not
otherwise in the public domain and will not intentionally disclose them to
anyone outside of the Company during his employment by the Company
hereunder or following the expiration or termination of his employment with
the Company for any reason; (ii) he will deliver promptly to the Company at
the end of Term, or at any other time the Company may so request, at the
Company's expense, all memoranda, notes, records, reports and other
documents (and all copies thereof) relating to the businesses of the
Company which he obtained while employed by, or otherwise serving or acting
on behalf of, the Company, or any its subsidiaries or affiliates, and which
he may then possess or have under his control; and (iii) during the Term
and any additional period during which the Executive may be employed by the
Company (whether or not such employment shall be pursuant to written
agreement) the Executive will not, unless the Board shall otherwise
consent, along or together with any other person, firm, partnership,
corporation or other entity whatsoever (except any subsidiaries or
affiliates of the Company), directly or indirectly, whether as an officer,
director, stockholder, partner, proprietor, associate, employee,
representative, public relations or advertising representative, management
consultant or otherwise: (A) engage in or (B) become or be interested in
or associated with any other person, corporation, firm, partnership or
other entity whatsoever engaged in any business which is competitive with
any business conducted or contemplated by the Company.
8.2 Anti-Raiding. Executive agrees that during the term of his
employment hereunder, and, thereafter for a period of six (6) months, he
will not, as a principal, agent, employee, employer, consultant, director
or partner of any person, firm, corporation or business entity other than
the Company, or in any individual or representative capacity whatsoever,
directly or indirectly, without the prior express written consent of the
Company approach, counsel or attempt to induce any person who is then in
the employ of the Company to leave the employ of the Company or employ or
attempt to employ any such person or persons who at any time during the
preceding six months was in the employ of the Company.
8.3 Notwithstanding the provisions of Section 8.1(iii), the
Executive may own, as a passive investor, securities of a corporation
engaged in a competitive line of business whose equity securities are
registered under Section 12(b) or 12(g) of the Exchange Act, so long as
his beneficial ownership in any one such corporation shall not in the
aggregate constitute more than five percent (5%) of any class of equity
securities of such corporation.
8.4 The parties agree that the remedy at law for any breach or
threatened breach of any covenant contained in this Section 8 will be
inadequate and that either party, in addition to such other remedies as may
be available to it, and/or them, at law or in equity, shall be entitled to
injunctive relief without bond or other security.
9. Change in Control. A "Change in Control" of the Company shall
mean a change in control of the Company or any entity controlling the
Company (referred to collectively in this Section 8 as the Company) of a
nature that would be required to be reported in response to Item 1 of a
Current Report on Form 8-K, pursuant to Section 13 or 15(d) of the Exchange
Act; provided that, without limitation, such a Change in Control shall be
deemed to have occurred at such time as (a) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than a person
who or which is a shareholder of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the Company's outstanding
securities ordinarily having the right to vote at elections of directors;
or (b) individuals who constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election or
nomination for election by the Company's shareholders was approved by a
vote of at least three quarters of the directors comprising the Incumbent
Board, shall be, for purposes of this clause (b), considered as though he
were a member of the Incumbent Board; or (c) a sale by the Company of all
or substantially all of its assets occurs. Notwithstanding anything in the
foregoing to the contrary, no Change in Control shall be deemed to have
occurred for purposes of this Agreement by virtue of any transactions which
result in the acquisition by the Executive, or by a group of persons which
includes the Executive, directly or indirectly, of a majority of either the
outstanding shares of common stock of the Company or the voting securities
of any corporation which acquires all or substantially all of the assets of
the Company, whether by way of merger, consolidation, sale of such assets
or otherwise. Notwithstanding anything contained in this Agreement to the
contrary, if, while the Executive is employed by the Company, a Change in
Control shall occur, with or without the prior approval of the Board, and
Executive's employment hereunder shall be terminated, then the Company
shall be obligated to pay the Executive an amount equal to the balance of
the Executive's base salary which would have been earned for the remainder
of the Term. In the event that this Agreement is terminated as a result of
a Change in Control, then all options granted to the Executive pursuant to
Section 6 hereof, shall, notwithstanding any provisions contained in the
respective Option Agreements, immediately vest and become exercisable by
the Executive.
10. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York applicable to
contracts executed in and to be performed solely within such state.
11. Notices. All notices required or permitted to be given by either
party hereunder, including notice of change of address, shall be in writing
and delivered by hand, or mailed, postage prepaid, certified or registered
mail, return receipt requested, to the other party as follows:
If to the Company: U.S. WATS, Inc.
111 Presidential Boulevard
Suite 114
Bala Cynwyd, PA 19004
Attention: Aaron R. Brown
Chairman of the Board
With a copy to: Gerard S. DiFiore, Esq.
Herten, Burstein, Sheridan,
Cevasco, Bottinelli & Litt
25 Main Street, 6th floor
Hackensack, NJ 07601
If to the Executive: Kevin M. O'Hare
48 Steeplechase Drive
Doylestown, PA 18901
With a copy to:
12. Miscellaneous.
12.1 Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior oral or written agreements and understandings;
however, this Agreement shall not supersede, diminish or modify any rights
of the Executive under any employee benefit plans of the Company. There
are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof or in effect among the parties. This Agreement may not be
amended, and no provision hereof shall be waived, except by a writing
signed by the Company and the Executive, or in the case of a waiver, by the
party waiving compliance therewith, which states that it is intended to
amend or waive a provision of this Agreement. Any waiver of any rights or
failure to act in any one instance shall not be regarded as an agreement to
waive any rights or failure to act in any other instance, whether or not
similar.
12.2 Further Acts. The parties hereto agree that, after the
execution of this Agreement, they will make, do, execute or cause to be
made, done or executed all such further and other lawful acts, deeds,
things, devices, conveyances and assurances in law whatsoever as may be
required to carry out the true intention and to give full force and effect
to this Agreement.
12.3 Severability. Should any provision of this Agreement be
held by a court of competent jurisdiction to be unenforceable or prohibited
by an applicable law, this Agreement shall be considered divisible as to
such provision, which shall be inoperative, and the remainder of this
Agreement shall be valid and binding as though such provision were not
included herein.
12.4 Successors and Assigns. This Agreement shall inure to
the benefit of, and be binding upon, the Company and any corporation with
which the Company merges or consolidates or to which the Company sells all
or substantially all of its assets, and upon the Executive and his
executors, administrators, heirs and legal representatives.
12.5 Headings. All headings in this Agreement are for
convenience only and are not intended to affect the meaning of any
provision hereof.
12.6 Counterparts. This Agreement may be executed in two or
more counterparts with the same effect as if the signatures to all such
counterparts were upon the same instrument, and all such counterparts shall
constitute but one instrument.
IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.
Attest US WATS, INC.
By:____________________________ By:_______________________________
Aaron R. Brown, Chairman
__________________________________
[corporate seal] Kevin M. O'Hare, individually
Exhibit 10.09
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT made as of the 16th day of December
1996, by and between US WATS, INC., a New York corporation, with offices at
111 Presidential Boulevard, Suite 114, Bala Cynwyd, Pennsylvania 19004 (the
"Company"), and DAVID B. HURWITZ, residing at 48 Dalton Way, Holland,
Pennsylvania 18966 (the "Executive").
W I T N E S E T H:
WHEREAS, the Company desires to employ the Executive, and the
Executive is willing to be employed by the Company, upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Employment. The Company agrees to and does hereby employ the
Executive, and the Executive agrees to and does hereby accept employment by
the Company, subject to the terms and conditions herein set forth.
2. Term. The term of the Executive's employment hereunder shall
commence on January 6, 1997 (the "Effective Date") and shall terminate
three (3) years thereafter (such period hereinafter referred to as the
"Term").
3. Duties.
3.1 During the Term, the Executive shall be employed as
Executive Vice President of Sales and Marketing of the Company and any
successors thereto or to its business, and shall be in charge of and
responsible for the general and supervisory duties normally and customarily
attendant to such office and shall render such other lawful services, and
exercise such powers, which are from time to time requested of him,
assigned to him or vested in him by the Board of Directors of the Company
(the "Board") and which are commensurate with his position as Executive
Vice President of Sales and Marketing.
3.2 The Executive agrees that, during the Term, unless the
Board shall otherwise consent, he will devote such amount of his time,
energies, labor and skills to the business of the Company and to the duties
and responsibilities specified in Section 3.1 as shall be reasonably
necessary.
4. Base Compensation. In consideration for services performed
hereunder, the Company shall pay to the Executive an annual base salary of
$150,000 in installments payable in accordance with the Company's customary
payroll practices, but in no event less than one time per month. On each
anniversary of the Effective Date of this Agreement, the Executive's base
salary shall be increased at a minimum by an amount equal to the base
salary then in effect multiplied by the percentage increase in the consumer
price index from the preceding year. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by him in
connection with the performance of his duties hereunder and the business of
the Company upon the submission to the Company of appropriate receipts
therefor.
5. Benefits and Cash Bonus.
5.1 Throughout the Term, the Executive shall be eligible to
participate in any pension, profit-sharing, stock option or similar plan or
program of the Company now existing or established hereafter for the
benefit of its employees generally, to the extent that he is eligible under
the general provisions thereof. The Executive shall also be entitled to
participate in any group insurance, hospitalization, medical, health and
accident, disability or similar or nonsimilar plan or program of the
Company now existing or established hereafter for the benefit of its
employees or executives generally, to the extent that he is eligible under
the general provisions thereof.
5.2 The Company shall provide the Executive with a policy of
term life insurance in an amount equal to not less than two (2) times his
yearly salary hereunder, payable to such beneficiary or such beneficiaries
as shall be designated in writing by the Executive.
5.3 The Company shall provide performance criteria in
accordance with its annual business plan, which, depending upon the level
of attainment by the Executive of such criteria, shall entitle the
Executive to earn an annual cash bonus payable quarterly, in arrears, in an
amount up to the Executive's then current annualized base salary payable
under this Agreement.
5.4 Until such time as the Company shall have implemented the
bonus plan under Section 5.3 hereof, but in no event for less than the
first six months of the Term, the Company shall pay the Executive a monthly
cash bonus, payable monthly in arrears, equal to one quarter of one percent
of the Company's total revenue, provided such monthly bonus shall not
exceed one twelfth of the Executive's annual base salary payable under this
Agreement.
5.5 The Company shall provide Executive an automobile
allowance of $600 per month to cover Executive's use of his vehicle for
business purposes.
6. Stock Option Grant. Contemporaneously with the execution hereof,
the Company is granting to the Executive, pursuant to the Company's Stock
Option Plan as amended and restated effective August 13, 1996 (the
"Plan"), five (5) year options to purchase an aggregate of up to 700,000
shares of Common Stock of the Company. The options shall be granted
pursuant to two (2) separate Option Agreements, one of which shall cover an
aggregate of 400,000 shares of Common Stock (the "First Option"), and the
second of which shall cover 300,000 shares of Common Stock (the "Second
Option"). Under the First Option, 200,000 shares shall be immediately
vested, and 100,000 shares shall be vested on each successive anniversary
of the date of grant. Under the Second Option, an aggregate of up to
300,000 shares of Common Stock shall vest in 75,000 share increments in
accordance with certain performance criteria contained in the option
agreement relating thereto.
7. Termination of Executive's Employment.
7.1 Notwithstanding any provisions contained herein to the
contrary, the Executive's employment may be terminated by the Company upon
the Executive's death or disability (as defined below); or for Cause (as
defined below); or upon a Change in Control (as defined below).
7.2 For purposes of this Agreement, "disability" shall mean
the Executive is mentally or physically disabled from properly and fully
performing his duties and responsibilities hereunder for a period of 120
consecutive days or for 180 days, even though not consecutive, within a
360-day period, all as evidenced by the written certification of a
qualified medical doctor agreed to by the Company and the Executive or, in
the absence of such agreement, by a doctor selected by the agreement of a
qualified medical doctor selected by each of the Company and the Executive.
7.3 For purposes of this Agreement, "Cause" shall mean: (i)
the conviction of the Executive of a felony by a federal or state court of
competent jurisdiction; (ii) gross misconduct relating to the Company;
(iii) intentional misappropriation of funds; or (iv) deliberate and
premeditated acts against the interest of the Company. In the case of any
of the foregoing, the Company shall have the right, following notice and a
reasonable opportunity to cure of not less than sixty (60) days (except in
the case of clauses (i) and (iii) hereunder), to terminate this Agreement
without further obligation to the executive.
7.4 In the event that the Executive's employment hereunder is
terminated as a result of death, disability or for Cause by the Company,
then the Company shall have no further obligations or liabilities to the
Executive hereunder, such that all benefits and salary provided for within
this Agreement shall terminate simultaneously with the termination of the
Executive's employment except for benefits and salary earned and accrued
through the date of such termination. Nothing in this Section 7.4 shall
supersede any rights of the Executive to receive any amounts or benefits
otherwise due to him upon the occurrence of any of the events described in
the immediately preceding sentence, whether such rights are created by this
Agreement or otherwise.
7.5 In the event that the Executive's employment hereunder is
terminated for reasons other than Cause, then the Company shall be
obligated to pay the Executive an amount equal to the balance of the
Executive's base salary which would have been earned for the remainder of
the Term.
8. Covenants of the Executive.
8.1 Confidentiality. The Executive acknowledges that his
employment by the Company will throughout his employment bring him into
close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, key personnel, pricing
policies, operational methods, and other business affairs, methods and
information, including plans for future developments, not readily available
to the public. The Executive further acknowledges that the services to be
performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in
all of the states of the United States. In recognition of the foregoing,
the Executive covenants and agrees that: (i) he will not knowingly
divulge any material confidential matters of the Company which are not
otherwise in the public domain and will not intentionally disclose them to
anyone outside of the Company during his employment by the Company
hereunder or following the expiration or termination of his employment with
the Company for any reason; (ii) he will deliver promptly to the Company at
the end of Term, or at any other time the Company may so request, at the
Company's expense, all memoranda, notes, records, reports and other
documents (and all copies thereof) relating to the businesses of the
Company which he obtained while employed by, or otherwise serving or acting
on behalf of, the Company, or any its subsidiaries or affiliates, and which
he may then possess or have under his control; and (iii) during the Term
and any additional period during which the Executive may be employed by the
Company (whether or not such employment shall be pursuant to written
agreement) the Executive will not, unless the Board shall otherwise
consent, along or together with any other person, firm, partnership,
corporation or other entity whatsoever (except any subsidiaries or
affiliates of the Company), directly or indirectly, whether as an officer,
director, stockholder, partner, proprietor, associate, employee,
representative, public relations or advertising representative, management
consultant or otherwise: (A) engage in or (B) become or be interested in
or associated with any other person, corporation, firm, partnership or
other entity whatsoever engaged in any business which is competitive with
any business conducted or contemplated by the Company.
8.2 Anti-Raiding. Executive agrees that during the term of
his employment hereunder, and, thereafter for a period of six (6) months,
he will not, as a principal, agent, Executive, employer, consultant,
director or partner of any person, firm, corporation or business entity
other than the Company, or in any individual or representative capacity
whatsoever, directly or indirectly, without the prior express written
consent of the Company approach, counsel or attempt to induce any person
who is then in the employ of the Company to leave the employ of the Company
or employ or attempt to employ any such person or persons who at any time
during the preceding six months was in the employ of the Company.
8.3 Notwithstanding the provisions of Section 8.1(iii), the
Executive may own, as a passive investor, securities of a corporation
engaged in a competitive line of business whose equity securities are
registered under Section 12(b) or 12(g) of the Exchange Act, so long as his
beneficial ownership in any one such corporation shall not in the aggregate
constitute more than five percent (5%) of any class of equity securities of
such corporation.
8.4 The parties agree that the remedy at law for any breach
or threatened breach of any covenant contained in this Section 8 will be
inadequate and that either party, in addition to such other remedies as may
be available to it, and/or them, at law or in equity, shall be entitled to
injunctive relief without bond or other security.
9. Change in Control. A "Change in Control" of the Company shall
mean a change in control of the Company or any entity controlling the
Company (referred to collectively in this Section 8 as the Company) of a
nature that would be required to be reported in response to Item 1 of a
Current Report on Form 8-K, pursuant to Section 13 or 15(d) of the Exchange
Act; provided that, without limitation, such a Change in Control shall be
deemed to have occurred at such time as (a) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than a person
who or which is a shareholder of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the Company's outstanding
securities ordinarily having the right to vote at elections of directors;
or (b) individuals who constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election or
nomination for election by the Company's shareholders was approved by a
vote of at least three quarters of the directors comprising the Incumbent
Board, shall be, for purposes of this clause (b), considered as though he
were a member of the Incumbent Board; or (c) a sale by the Company of all
or substantially all of its assets occurs. Notwithstanding anything in the
foregoing to the contrary, no Change in Control shall be deemed to have
occurred for purposes of this Agreement by virtue of any transactions which
result in the acquisition by the Executive, or by a group of persons which
includes the Executive, directly or indirectly, of a majority of either the
outstanding shares of common stock of the Company or the voting securities
of any corporation which acquires all or substantially all of the assets of
the Company, whether by way of merger, consolidation, sale of such assets
or otherwise. Notwithstanding anything contained in this Agreement to the
contrary, if, while the Executive is employed by the Company, a Change in
Control shall occur, with or without the prior approval of the Board, and
Executive's employment hereunder shall be terminated, then the Company
shall be obligated to pay the Executive an amount equal to the balance of
the Executive's base salary which would have been earned for the remainder
of the Term. In the event that this Agreement is terminated as a result of
a Change in Control, then all options granted to the Executive pursuant to
Section 6 hereof, shall, notwithstanding any provisions contained in the
respective Option Agreements, immediately vest and become exercisable by
the Executive.
10. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York applicable to
contracts executed in and to be performed solely within such state.
11. Notices. All notices required or permitted to be given by either
party hereunder, including notice of change of address, shall be in writing
and delivered by hand, or mailed, postage prepaid, certified or registered
mail, return receipt requested, to the other party as follows:
If to the Company: U.S. WATS, Inc.
111 Presidential Boulevard
Suite 114
Bala Cynwyd, PA 19004
Attention: Aaron R. Brown
Chairman of the Board
With a copy to: Gerard S. DiFiore, Esq.
Herten, Burstein, Sheridan,
Cevasco, Bottinelli & Litt
25 Main Street, 6th floor
Hackensack, NJ 07601
If to the Executive: David B. Hurwitz
48 Dalton Way
Holland, PA 18966
With a copy to:
12. Miscellaneous.
12.1 Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior oral or written agreements and understandings;
however, this Agreement shall not supersede, diminish or modify any rights
of the Executive under any employee benefit plans of the Company. There
are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof or in effect among the parties. This Agreement may not be
amended, and no provision hereof shall be waived, except by a writing
signed by the Company and the Executive, or in the case of a waiver, by the
party waiving compliance therewith, which states that it is intended to
amend or waive a provision of this Agreement. Any waiver of any rights or
failure to act in any one instance shall not be regarded as an agreement to
waive any rights or failure to act in any other instance, whether or not
similar.
12.2 Further Acts. The parties hereto agree that, after the
execution of this Agreement, they will make, do, execute or cause to be
made, done or executed all such further and other lawful acts, deeds,
things, devices, conveyances and assurances in law whatsoever as may be
required to carry out the true intention and to give full force and effect
to this Agreement.
12.3 Severability. Should any provision of this Agreement be
held by a court of competent jurisdiction to be unenforceable or prohibited
by an applicable law, this Agreement shall be considered divisible as to
such provision, which shall be inoperative, and the remainder of this
Agreement shall be valid and binding as though such provision were not
included herein.
12.4 Successors and Assigns. This Agreement shall inure to
the benefit of, and be binding upon, the Company and any corporation with
which the Company merges or consolidates or to which the Company sells all
or substantially all of its assets, and upon the Executive and his
executors, administrators, heirs and legal representatives.
12.5 Headings. All headings in this Agreement are for
convenience only and are not intended to affect the meaning of any
provision hereof.
12.6 Counterparts. This Agreement may be executed in two or
more counterparts with the same effect as if the signatures to all such
counterparts were upon the same instrument, and all such counterparts shall
constitute but one instrument.
IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.
Attest US WATS, INC.
By:__________________________ By: _________________________
Aaron R. Brown, Chairman
[corporate seal]
______________________________
David B. Hurwitz, individually
Exhibit 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT made as of the ___ day of January, 1997
by and between US WATS, INC., a New York corporation, with offices at 111
Presidential Boulevard, Suite 114, Bala Cynwyd, Pennsylvania 19004 (the
"Company"), and Mark Mendes, residing at 35641 Dunthorpe Lane,
Purcellville, VA 20132 (the "Executive").
W I T N E S E T H
WHEREAS, the Company desires to employ the Executive, and the
Executive is willing to be employed by the Company, upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
Employment.
The Company agrees to and does hereby employ the Executive, and the
Executive agrees to and does hereby accept employment by the Company,
subject to the terms and conditions herein set forth.
This Agreement shall be effective only if executed and delivered by
all parties hereto on or before January 31, 1997.
Term. The term of the Executive's employment hereunder shall commence
on the date hereof (the "Effective Date") and shall terminate three (3)
years thereafter (such period hereinafter referred to as the "Term").
Duties. During the Term, the Executive shall be employed as Chief
Operating Officer of the Company and any successors thereto or to its
business, and shall be in charge of and responsible for the general and
supervisory duties normally and customarily attendant to such office and
shall render such other lawful services, and exercise such powers, which
are from time to time requested of him, assigned to him or vested in him by
the Chief Executive Officer of the Company and which are commensurate with
his position as Chief Operating Officer.
The Executive agrees that, during the Term, unless the Chief
Executive Officer of the Company shall otherwise consent, he will devote
such amount of his time, energies, labor and skills to the business of the
Company and to the duties and responsibilities specified in Section 3.1 as
shall be reasonably necessary.
Base Compensation. In consideration for services performed hereunder,
the Company shall pay to the Executive an annual base salary of $162,000 in
installments payable in accordance with the Company's customary payroll
practices, but in no event less than one time per month. On each
anniversary of the Effective Date of this Agreement, the Executive's base
salary shall be increased, at a minimum, by an amount equal to the base
salary then in effect multiplied by the percentage increase in the consumer
price index from the preceding year. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by him in
connection with the performance of his duties hereunder and the business of
the Company upon the submission to the Company of appropriate receipts
therefor.
Benefits and Cash Bonus. Throughout the Term, the Executive shall be
eligible to participate in any pension, profit-sharing, stock option or
similar plan or program of the Company now existing or established
hereafter for the benefit of its employees generally, to the extent that he
is eligible under the general provisions thereof. The Executive shall also
be entitled to participate in any group insurance, hospitalization,
medical, health and accident, disability or similar or nonsimilar plan or
program of the Company now existing or established hereafter for the
benefit of its employees or executives generally, to the extent that he is
eligible under the general provisions thereof.
The Company shall provide the Executive with a policy of term
life insurance in an amount equal to not less than two (2) times his yearly
salary hereunder, payable to such beneficiary or such beneficiaries as
shall be designated in writing by the Executive.
The Executive shall participate in the Company's profit sharing
bonus pool (the "Bonus Pool") to be implemented by the Compensation
Committee. The Compensation Committee shall determine, in its discretion,
which eligible participants in the Bonus Pool shall be entitled to bonus
payments thereunder.
The Company shall provide Executive an automobile allowance of
$600 per month to cover Executive's use of his vehicle for business
purposes.
Stock Option Grant. Contemporaneously with the execution hereof, the
Company is granting to the Executive option to purchase an aggregate of up
to 350,000 shares of Common Stock of the Company (the "Option"). Under the
Option, 170,000 shares shall be immediately vested, and 60,000 shares shall
be vested on the first, second and third successive anniversaries of the
date of grant.
Termination of Executive's Employment. Notwithstanding any provisions
contained herein to the contrary, the Executive's employment may be
terminated by the Company upon the Executive's death or disability (as
defined below); or for Cause (as defined below); or upon a Change in
Control (as defined below).
For purposes of this Agreement, "disability" shall mean the
Executive is mentally or physically disabled from properly and fully
performing his duties and responsibilities hereunder for a period of 120
consecutive days or for 180 days, even though not consecutive, within a
360-day period, all as evidenced by the written certification of a
qualified medical doctor agreed to by the Company and the Executive or, in
the absence of such agreement, by a doctor selected by the agreement of a
qualified medical doctor selected by each of the Company and the Executive.
For purposes of this Agreement, "Cause" shall mean: (i) the
conviction of the Executive of a felony by a federal or state court of
competent jurisdiction; (ii) gross misconduct relating to the Company;
(iii) intentional misappropriation of funds; or (iv) deliberate and
premeditated acts against the interest of the Company. In the case of any
of the foregoing, the Company shall have the right, following notice and a
reasonable opportunity to cure of not less than sixty (60) days (except in
the case of clauses (i) and (iii) hereunder), to terminate this Agreement
without further obligation to the Executive.
In the event that the Executive's employment hereunder is
terminated as a result of death, disability or for Cause by the Company,
then the Company shall have no further obligations or liabilities to the
Executive hereunder, such that all benefits and salary provided for within
this Agreement shall terminate simultaneously with the termination of the
Executive's employment except for benefits and salary earned and accrued
through the date of such termination. Nothing in this Section 7.4 shall
supersede any rights of the Executive to receive any amounts or benefits
otherwise due to him upon the occurrence of any of the events described in
the immediately preceding sentence, whether such rights are created by this
Agreement or otherwise.
In the event that the Executive's employment hereunder is
terminated for reasons other than Cause, then the Company shall be
obligated to pay the Executive an amount equal to the balance of the
Executive's base salary which would have been earned for the remainder of
the Term.
Covenants of the Executive.
Confidentiality. The Executive acknowledges that his employment
by the Company will throughout his employment bring him into close contact
with many confidential affairs of the Company, including information about
costs, profits, markets, sales, key personnel, pricing policies,
operational methods, and other business affairs, methods and information,
including plans for future developments, not readily available to the
public. The Executive further acknowledges that the services to be
performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in
all of the states of the United States. In recognition of the foregoing,
the Executive covenants and agrees that: (i) he will not knowingly divulge
any material confidential matters of the Company which are not otherwise in
the public domain and will not intentionally disclose them to anyone
outside of the Company during his employment by the Company hereunder or
following the expiration or termination of his employment with the Company
for any reason; (ii) he will deliver promptly to the Company at the end of
Term, or at any other time the Company may so request, at the Company's
expense, all memoranda, notes, records, reports and other documents (and
all copies thereof) relating to the businesses of the Company which he
obtained while employed by, or otherwise serving or acting on behalf of,
the Company, or any its subsidiaries or affiliates, and which he may then
possess or have under his control; and (iii) during the Term and any
additional period during which the Executive may be employed by the Company
(whether or not such employment shall be pursuant to written agreement) the
Executive will not, unless the Board shall otherwise consent, along or
together with any other person, firm, partnership, corporation or other
entity whatsoever (except any subsidiaries or affiliates of the Company),
directly or indirectly, whether as an officer, director, stockholder,
partner, proprietor, associate, employee, representative, public relations
or advertising representative, management consultant or otherwise: (A)
engage in or (B) become or be interested in or associated with any other
person, corporation, firm, partnership or other entity whatsoever engaged
in any business which is competitive with any business conducted or
contemplated by the Company.
Anti-Raiding. Executive agrees that during the term of his
employment hereunder, and, thereafter for a period of six (6) months, he
will not, as a principal, agent, employee, employer, consultant, director
or partner of any person, firm, corporation or business entity other than
the Company, or in any individual or representative capacity whatsoever,
directly or indirectly, without the prior express written consent of the
Company approach, counsel or attempt to induce any person who is then in
the employ of the Company to leave the employ of the Company or employ or
attempt to employ any such person or persons who at any time during the
preceding six months was in the employ of the Company.
Notwithstanding the provisions of Section 8.1 (iii), the
Executive may own, as passive investor, securities of a corporation engaged
in a competitive line of business whose equity securities are registered
under Section 12(b) or 12(g) of the Exchange Act, so long as his beneficial
ownership in any one such corporation shall not in the aggregate constitute
more than five percent (5%) of any class of equity securities of such
corporation.
The parties agree that the remedy at law for any breach or
threatened breach of any covenant contained in this Section 8 will be
inadequate and that either party, in addition to such other remedies as may
be available to it, and/or them, at law or in equity, shall be entitled to
injunctive relief without bond or other security.
Change in Control. A "Change in Control" of the Company shall mean a
change in control of the Company or any entity controlling the Company
(referred to collectively in this Section 8 as the Company) of a nature
that would be required to be reported in response to Item 1 of a Current
Report on Form 8-K, pursuant to Section 13 or 15(d) of the Exchange Act;
provided that, without limitation such a Change in Control shall be deemed
to have occurred at such time as (a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than a person who or
which is a shareholder of the Company, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or more
of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of directors; or (b)
individuals who constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election or
nomination for election by the Company's shareholders was approved by a
vote of at least three quarters of the directors comprising the Incumbent
Board, shall be, for purposes of this clause (b), considered as though he
were a member of the Incumbent Board; or (c) a sale by the Company of all
or substantially all of its assets occurs. Notwithstanding anything in the
foregoing to the contrary, no Change in Control shall be deemed to have
occurred for purposes of this Agreement by virtue of any transactions which
result in the acquisition by the Executive, or by a group of persons which
includes the Executive, directly or indirectly, of a majority of either the
outstanding shares of common stock of the Company or the voting securities
of any corporation which acquires all or substantially all of the assets of
the Company, whether by way of merger, consolidation, sale of such assets
or otherwise. Notwithstanding anything contained in this Agreement to the
contrary, if, while the Executive is employed by the Company, a Change in
Control shall occur, with or without the prior approval of the Board, and
Executive's employment hereunder shall be terminated, then the Company
shall be obligated to pay the Executive an amount equal to the balance of
the Executive's base salary which would have been earned for the remainder
of the Term. In the event that this Agreement is terminated as a result of
a Change in Control, then all options granted to the Executive pursuant to
Section 6 hereof, shall, notwithstanding any provisions contained in the
respective Option Agreements, immediately vest and become exercisable by
the Executive.
Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York applicable to contracts
executed in and to be performed solely within such state.
Notices. All notices required or permitted to be given by either
party hereunder, including notice of change of address, shall be in writing
and delivered by hand, or mailed, postage prepaid, certified or registered
mail, return receipt requested, to the other party as follows:
If to the Company: U.S. WATS, Inc.
111 Presidential Boulevard
Suite 114
Bala Cynwyd, PA 19004
Attention: Kevin M. O'Hare, President
With a copy to: Peter W. Laberee
Buchanan Ingersoll, P.C.
Two Logan Square, 12th Floor
18th & Arch
Philadelphia, PA 19130
If to the Executive: Mark Mendes
35641 Dunthorpe Lane
Purcellville, VA 20132
Miscellaneous.
Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes
any and all prior oral or written agreements and understandings; however,
this Agreement shall not supersede, diminish or modify any rights of the
Executive under any employee benefit plans of the Company. There are no
oral promises, conditions, representations, understandings, interpretations
or terms of any kind as conditions or inducements to the execution hereof
or in effect among the parties. This Agreement may not be amended, and no
provision hereof shall be waived, except by a writing signed by the Company
and the Executive, or in the case of a waiver, by the party waiving
compliance therewith, which states that it is intended to amend or waive a
provision of this Agreement. Any waiver of any rights or failure to act in
any one instance shall not be regarded as an agreement to waive any rights
or failure to act in any other instance, whether or not similar.
Further Acts. The parties hereto agree that, after the execution of
this Agreement, they will make, do, execute or cause to be made, done or
executed all such further and other lawful acts, deeds, things, devices,
conveyances and assurances in law whatsoever as may be required to carry
out the true intention and to give full force and effect to this Agreement.
Severability. Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or prohibited by an
applicable law, this Agreement shall be considered divisible as to such
provision, which shall be inoperative, and the remainder of this Agreement
shall be valid and binding as though such provision were not included
herein.
Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially
all of its assets, and upon the Executive and his executors,
administrators, heirs and legal representatives.
Headings. All headings in this Agreement are for convenience only and
are not intended to affect the meaning of any provision hereof.
Counterparts. This Agreement may be executed in two or more
counterparts with the same effect as if the signatures to all such
counterparts were upon the same instrument, and all such counterparts shall
constitute but one instrument.
IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.
Attest US WATS, INC.
By:_____________________________ By: ____________________________
Kevin O'Hare, President
____________________________
Mark Mendes, individually
Exhibit 10.11
AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
(O'Hare)
This AMENDMENT to EXECUTIVE EMPLOYMENT AGREEMENT ("Amendment") is made
as of the 10th day of January, 1997 by and between US WATS, INC., a New
York corporation (the "Company") having an address at 111 Presidential
Boulevard, Suite 114, Bala Cynwyd, PA 19004 and KEVIN M. O'HARE
("Executive") having an address at 48 Steeplechase Drive, Doylestown,
Pennsylvania 18901.
BACKGROUND
Reference is made to the Executive Employment Agreement between the
Company and Executive dated December 16, 1996 (the "Original Agreement").
Capitalized terms used herein and not otherwise defined shall have the
meaning provided for in the Original Agreement. Reference is also made to
the Amended and Restated Stock Option Agreement dated as of January 10,
1997 and the Non-Qualified Stock Option Agreement dated as of January 10,
1997 (together, the "Stock Option Agreement") pursuant to which Executive
was granted certain stock options in respect of shares of the Company's
capital stock. The parties hereto wish to amend the Original Agreement to
eliminate the reference to performance vesting and certain references to
the "Plan" in Section 6 of the Original Agreement.
NOW WHEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Section 6 of the Original Agreement is hereby amended and
restated to read in its entirety as follows:
6. Stock Option Grant. Contemporaneously with the
execution hereof, the Company is granting to the
Executive two (2) five (5) year options to purchase an
aggregate of up to 1,100,000 shares of Common Stock of
the Company. The options shall be granted pursuant to
two (2) separate Option Agreements, one of which shall
cover an aggregate of 600,000 shares of Common Stock
(the "First Option''), and the second one of which
shall cover 500,000 shares of Common Stock (the "Second
Option"). Under the First Option, 300,000 shares shall
be immediately vested, and 150,000 shares shall be
vested on each successive anniversary of the date of
grant. Under the Second Option, an aggregate of up to
500,000 shares of Common Stock shall vest in one (1)
170,000 and two (2) 165,000 share increments on each
successive anniversary of the date of grant.
2. All of the terms, conditions, provisions and covenants in the
Original Agreement, the Stock Option Agreement, and all other documents
delivered in connection with any of the foregoing documents shall remain
unaltered and in full force and effect except as modified by this
Amendment. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York. Each and every one of the terms
and provisions of this Amendment shall be binding upon and shall inure to
the benefit of the Company and the Executive and their respective heirs,
devisees, successors and assigns. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute but one and the same instrument.
Attest US WATS, INC.
By: _________________________________ By: _____________________________
Ward Schultz, Assistant Secretary Stephen Parker, Secretary
_____________________________
Kevin M. O'Hare, individually
Exhibit 10.12
AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
(Hurwitz)
This AMENDMENT to EXECUTIVE EMPLOYMENT AGREEMENT ("Amendment") is made
as of the 10th day of January, 1997 by and between US WATS, INC., a New
York corporation (the "Company") having an address at 111 Presidential
Boulevard, Suite 114, Bala Cynwyd, PA 19004 and DAVID B. HURWITZ
("Executive") having an address at 48 Dalton Way, Holland, Pennsylvania
18966.
BACKGROUND
Reference is made to the Executive Employment Agreement between the
Company and Executive dated December 16, 1996 (the "Original Agreement").
Capitalized terms used herein and not otherwise defined shall have the
meaning provided for in the Original Agreement. Reference is also made to
the Amended and Restated Stock Option Agreement dated as of January 10,
1997 and the Non-Qualified Stock Option Agreement dated as of January 10,
1997 (together, the "Stock Option Agreement") pursuant to which Executive
was granted certain stock options in respect of shares of the Company's
capital stock. The parties hereto wish to amend the Original Agreement to
eliminate the reference to performance vesting and certain references to
the "Plan" in Section 6 of the Original Agreement.
NOW WHEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Section 6 of the Original Agreement is hereby amended and
restated to read in its entirety as follows:
6. Stock Option Grant. Contemporaneously with the
execution hereof, the Company is granting to the
Executive two (2) five (5) year options to purchase an
aggregate of up to 700,000 shares of Common Stock of
the Company. The options shall be granted pursuant to
two (2) separate Option Agreements, one of which shall
cover an aggregate of 400,000 shares of Common Stock
(the "First Option''), and the second one of which
shall cover 300,000 shares of Common Stock (the "Second
Option"). Under the First Option, 200,000 shares shall
be immediately vested, and 100,000 shares shall be
vested on each successive anniversary of the date of
grant. Under the Second Option, an aggregate of up to
300,000 shares of Common Stock shall vest in 75,000
share increments on each successive anniversary of the
date of grant.
2. All of the terms, conditions, provisions and covenants in the
Original Agreement, the Stock Option Agreement, and all other documents
delivered in connection with any of the foregoing documents shall remain
unaltered and in full force and effect except as modified by this
Amendment. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York. Each and every one of the terms
and provisions of this Amendment shall be binding upon and shall inure to
the benefit of the Company and the Executive and their respective heirs,
devisees, successors and assigns. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute but one and the same instrument.
Attest US WATS, INC.
By: _________________________________ By: ____________________________
Ward Schultz, Assistant Secretary Kevin M. O'Hare, President
______________________________
David B. Hurwitz, individually
Exhibit 10.13
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, made as of this 14th day of January, 1997, by
and between:
US WATS, Inc., a corporation having its business office at 111 Presidential
Boulevard, Bala Cynwyd, PA 19004 (hereinafter referred to as "COMPANY").
AND
Aaron R. Brown, an adult individual presently residing at 3388 Manor Road,
Huntingdon Valley, PA 19006 (hereinafter referred to as "CONSULTANT").
WHEREAS, COMPANY desires to provide potential investors with the assurance
of continued availability of key personnel, on certain protective terms and
conditions, so as to provide business continuity;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
forebearances contained herein, and intending to be legally bound, the
parties have agreed as follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT
(a) The parties hereby agree that the "Employment Agreement" dated
December 23, 1993 between the parties, and all amendments thereto, is
terminated effective this date and, further, that CONSULTANT shall no
longer be employed in any capacity with COMPANY.
(b) CONSULTANT agrees that he shall not, at any time in the future,
seek re-employment with COMPANY or any affiliated entity.
2. TERM
(a) This Agreement shall become effective as of the date
hereof.
(b) This Agreement shall continue and exist for an initial
period from the effective date to January 13, 2003.
(c) This Agreement shall be automatically renewed and
extended for an additional period of one (1) year, unless either party
serves upon the other written notice of its intent not to renew no later
than thirty (30) days prior to the expiration of the initial term.
(d) Notwithstanding the foregoing, the term of this Agreement
is otherwise subject to the termination provisions contained hereafter.
3. COMPENSATION
(a) For all services rendered under this Agreement, COMPANY
shall pay CONSULTANT the gross amount of $125,000.00 annually. Such
payment is to be made in equal installments at intervals no greater than
semi-monthly.
(b) This compensation shall be increased annually on January
14th of each year ("Anniversary Date"), beginning January 14th of 1998 as
follows:
(1) The index number of the Consumer Price Index - Urban
Consumer, All Items, U.S. Cities' Average (1982-4'100) published by the
Bureau of Labor Statistics of the United States for August, 1991, shall be
the denominator of a fraction. The numerator of the fraction shall be the
like index number for the August immediately preceding the applicable
Anniversary Date.
(2) Multiply said fraction, if in excess of 1.00, by the
then current annual compensation.
(3) The resulting amount shall be such compensation for
the following twelve month period.
(c) At the end of each calendar year, the Board of Directors
of COMPANY shall review the performance of CONSULTANT during the preceding
year and, based upon such evaluation, may establish any increase in the
amount payable to CONSULTANT for the succeeding calendar year. However,
COMPANY shall not be obligated to provide any increase.
4. DUTIES/STATUS AS INDEPENDENT CONTRACTOR
(a) CONSULTANT shall render only consulting services, limited
to telephonic consultations regarding investment banking, to COMPANY and
shall only render such consulting services as are from time to time
requested in writing by the President of the COMPANY. CONSULTANT agrees
and acknowledges that he is not to appear at the COMPANY'S workplaces,
without the prior written approval of the President of the COMPANY, and he
further agrees and acknowledges that he shall have no contact, of any
nature whatsoever, with any COMPANY employee, other than its President,
without the prior written approval of the President. CONSULTANT is not
authorized to act on behalf of the COMPANY or to represent the COMPANY to
third parties without the prior written approval of the President.
Notwithstanding the provisions of this subparagraph, CONSULTANT shall have
the same right as other shareholders to attend special and regular
shareholder meetings, so long as he remains a shareholder of the COMPANY.
(b) The CONSULTANT is an independent contractor and is not an
officer, director, employee or agent of the COMPANY for any purpose
whatsoever. The CONSULTANT does not have, nor shall he hold himself out as
having, any right, power or authority to create any contract or obligation,
express or implied, on behalf of, in the name of, or binding upon the
COMPANY, or to pledge the COMPANY's credit, or to extend credit in the
COMPANY's name, unless the COMPANY shall consent thereto, in advance, in
writing.
(c) As a result of his status as an independent contractor,
the CONSULTANT hereby acknowledges and agrees that he is not entitled to
any form of indemnification from the COMPANY for any actions taken or
omissions made by the CONSULTANT in connection with or pursuant to the
services to be performed by the CONSULTANT under this Agreement, whether
such indemnification may otherwise be available under applicable corporate
law, the COMPANY's charter or By-Laws, any insurance policy maintained by
the COMPANY, or any other agreement of the COMPANY, including without
limitation the Indemnity Agreement between the COMPANY and the CONSULTANT
dated as of August 1, 1990.
(d) The CONSULTANT hereby agrees to indemnify and hold
harmless the COMPANY, and its affiliates, and their respective officers,
directors, agents, and employees, and their respective successors and
assigns (collectively, the "Indemnified Parties"), from and against any and
all claims, demands, loss, cost, liability or expense (including reasonable
attorneys' fees, fees for appeals, and settlement payments), whenever
arising or asserted, incurred as a result of (i) the breach of any
representation, warranty or covenant made by the CONSULTANT herein or the
breach of any provision of this Agreement by the CONSULTANT; (ii) the
performance by the CONSULTANT of any of his obligations hereunder; or (iii)
the acts or omissions of the CONSULTANT taken pursuant to this Agreement,
including without limitation any employment-related claim asserted by an
employee or agent of the CONSULTANT or the COMPANY.
(e) In the event that an Indemnified Party receives a claim
or notice of suit likely to give rise to a request for indemnification
hereunder, the Indemnified Party shall give the CONSULTANT prompt notice of
such action, proceeding, claim or liability, and upon receiving such
notice, the CONSULTANT agrees to defend against such action, proceeding,
claim or liability at the CONSULTANT's sole expense. If the CONSULTANT,
prior to the expiration of thirty (30) days after receipt of notice of any
claim by an Indemnified Party under this section, has not assumed the
defense thereof, the Indemnified Party may thereupon undertake the defense
thereof on behalf of, and at the risk and expense of, the CONSULTANT, with
all costs and expenses of such defense to be paid by the CONSULTANT. An
Indemnified Party shall not settle such a claim without the consent of the
CONSULTANT.
(f) The parties acknowledge that the provisions set forth in
subparagraphs 4(a) through 4(e) are material terms of this Agreement and
that the breach thereof by CONSULTANT will give the COMPANY the right to
terminate this Agreement immediately and without prior notice, at the
COMPANY's sole discretion.
5. WORKING FACILITIES
CONSULTANT shall not be granted an office or other working space
at any of the COMPANY's workplaces and/or facilities, nor shall he receive
clerical help, telephone services or other facilities for the performance
of his services hereunder. CONSULTANT shall be solely responsible for
furnishing all working facilities needed for the performance of his
services hereunder and shall bear the full cost thereof.
6. EXPENSES
CONSULTANT is not authorized to incur expenses on behalf of, or
chargeable to, COMPANY without the express prior written approval of the
President. The parties agree and acknowledge that it is their intent that,
except in extraordinary circumstances, all expenses incurred by CONSULTANT
in connection with his provision of services hereunder shall be the
responsibility solely of CONSULTANT.
7. NONDISCLOSURE OF INFORMATION
CONSULTANT recognizes and acknowledges that, during the course of
this Agreement, he may have access to valuable proprietary information,
including, but not limited to: contractual arrangements and compensation
arrangements with subcontractors and customers of COMPANY; compensation
arrangement with subcontractors, vendors, and outside personnel; estimating
and bidding methods, procedures, and amounts; management and operating
procedures and software; management information systems, etc., marketing
plans and strategy; personnel policies and contractual arrangement,
including job assignments and compensation; customer leads; customer lists;
and that such information constitutes unique assets of the business of
COMPANY. CONSULTANT will not, during or after the term of this Agreement,
personally use or disclose all, or any part of, such proprietary
information to any person, firm, corporation, association, agency, or other
entity except as properly required in the conduct of the business of the
COMPANY, or except as authorized in writing by COMPANY. CONSULTANT will
not publish, disclose or authorize anyone else to publish or disclose, any
secret or confidential matter relating to any aspect of the business of the
COMPANY with which CONSULTANT's service may in any way have acquainted
CONSULTANT. In the event of a breach, or threatened breach, by CONSULTANT,
of the provisions of this Paragraph, COMPANY shall be entitled to a
preliminary, temporary and permanent injunction restraining CONSULTANT from
disclosing in whole or in part, any such proprietary information and/or
from rendering any such services to any person, firm, corporation,
associations, agency, or other entity to whom such information, in whole or
in part, has been disclosed or is threatened to be disclosed. Furthermore,
nothing herein shall be construed as prohibiting COMPANY from pursuing any
other equitable or legal remedies available to it for such breach or
threatened breach, including the recovery of damages from CONSULTANT.
8. NONSOLICITATION COVENANT
(a) During, and for a period of eighteen (18) months after
the termination of, this Agreement (including any extension thereof) (the
"Post Termination Period"), CONSULTANT shall not solicit, directly or
indirectly, by any means, any of the clients, account, employees or "leads"
of COMPANY during the Post Termination Period.
(b) COMPANY and CONSULTANT agree that if any court of
competent jurisdiction shall, for any reason conclude that any portion of
this covenant shall be too restrictive, the court shall determine and apply
lesser restrictions, it being the intent of the parties that some such
restrictions shall be applicable for the protection of COMPANY and its
shareholders.
(c) This covenant has been given to induce COMPANY to enter
into this Agreement.
9. DISABILITY AND DEATH
(a) If the CONSULTANT is unable to perform his services by
reason of illness or incapacity for a period of more than twenty-one (21)
consecutive work days, or more than four (4) weeks in any two-month period,
the amounts otherwise payable to him thereafter during the continued period
of such illness or incapacity may, at the option of the COMPANY be reduced
by twenty percent (20%).
(b) In the event that the CONSULTANT dies prior to the
expiration of the term of the Agreement, the compensation which would have
been paid to him will be paid to CONSULTANT's spouse, and may, at the
option of the COMPANY, be reduced by twenty percent (20%).
10. TERMINATION
This Agreement shall cease and terminate upon the occurrence of
any one of the following events:
(a) The expiration of this Agreement's term under paragraph 2
herein;
(b) "For cause" which shall be defined as (i) breach by the
CONSULTANT of any material term or provision of this Agreement as
determined in the good faith judgment of the Board of Directors of the
COMPANY; (ii) any conduct of CONSULTANT within the course of the provision
of services hereunder or otherwise which would adversely affect the
COMPANY's reputation in the community or with the public, as determined in
the good faith judgment of the Board of Directors; (iii) dishonesty, fraud,
misappropriation or embezzlement by CONSULTANT in connection with the
COMPANY's business, as determined in the good faith judgment of the Board
of Directors.
(c) The COMPANY's exercise of its rights to terminate this
Agreement shall be without prejudice to any other remedy which the COMPANY
may be entitled to at law, in equity, or under any other provision of this
Agreement. Nothing in this subparagraph or paragraph shall affect
CONSULTANT's obligations under paragraphs 8 and 9 of this Agreement.
11. RELEASE.
In consideration of the signing of this Agreement, CONSULTANT and
his beneficiaries, heirs, successors and assigns, release forever the
COMPANY and its officers, directors, employees, agents, predecessors,
successors and assigns, from all actions, suits, claims and demands in law
or equity, that he ever had, now has, or hereafter may have, resulting from
anything which has happened up until now, including but not limited to any
and all claims relating in any way to his employment relationship, the
termination thereof, his removal from the position of Chairman of the Board
of Directors of the COMPANY, his removal from the Board of Directors of the
COMPANY, or the execution of this Agreement with the COMPANY. This
Release includes, but is not limited to, any claims arising under the
Employee Retirement Income Security Act, The Pennsylvania Human Relations
Act, Title VII of the Civil Rights Act of 1964, as amended, The Americans
With Disabilities Act, The Age Discrimination in Employment Act, The
Pennsylvania Constitution, the parties' previous Employment Agreement, and
all amendments thereto, or any other federal, state or local law or
ordinances, and any common law claims under tort, contract, or any other
theories now or hereafter recognized.
12. WAIVER OF BREACH
The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach by such other party.
13. BENEFIT
The rights and obligations of COMPANY under this Agreement shall
inure to the benefit of, and shall be binding upon, its successors and
assigns.
14. NOTICES
Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing, and if sent by certified mail to his
residence in the case of CONSULTANT, or to its principal office in the case
of COMPANY.
15. ARBITRATION
Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by final and binding
arbitration in the County of Philadelphia, State of Pennsylvania, in
accordance with the rules then in effect of the American Arbitration
Association - Philadelphia Regional Office, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof, except
that the Company shall have the option of seeking remedy for any alleged
breach or threatened breach of paragraph 8 or 9 hereof in any court of
competent jurisdiction. The arbitrator shall have the power to make
CONSULTANT whole for any breach of this Agreement by COMPANY.
16. ENTIRE AGREEMENT
This instrument contains the entire agreement of the parties and
supersedes any other discussions, representations, and agreements prior to
and contemporaneous with the execution of this agreement and may be
modified only by agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
17. APPLICABLE LAW
This Agreement shall be governed for all purposes by the laws of
the Commonwealth of Pennsylvania. If any provision of this Agreement is
declared void, such provision shall be deemed severed from this Agreement,
which shall otherwise remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto set their hands and seals as of the day and year hereinabove
written.
US WATS, INC.
BY:________________________________________
KEVIN M. O'HARE
President and Chief Executive Officer
__________________________________________
AARON R. BROWN
