EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“
Agreement” )
is made as of the 1st
day
of January, 2005 (the “
Effective Date” )
by and between Acceris Communications Inc., a Florida corporation
(the “
Company ”),
and Eric S. Lipscomb (“
Executive ”).
The
Executive is skilled in business and financial matters and
possesses knowledge of the business, products and operations
of the Company. The parties hereto believe that it is in their
respective interests to enter into an employment agreement
whereby, for the consideration specified herein, Executive
shall provide the services specified herein. Certain
definitions are set forth in
Section 7 of
this Agreement.
The
parties hereto agree as follows:
Section 1.
Employment .
(a)
Employment Period .
The Company agrees to employ Executive and Executive accepts such
employment for the period (the ‘
Employment Period” )
beginning as of the Effective Date and ending upon (a) the first
anniversary of the Effective Date or (b) such earlier date upon
which the employment of the Executive shall terminate in accordance
with
Section 2 herein
(the date of termination being hereinafter called the
“
Termination Date”) .
The Employment Period may be extended by written agreement of the
parties hereto. Any employment of Executive by the Company
following the expiration of the Employment Period shall be
“at will” and may be terminated by the Company at any
time without any liability other than the payment of any base
salary and earned bonus through the effective date of
termination.
(b)
Position and Duties .
(i)
During
the Employment Period, Executive shall serve as the Vice
President of Accounting, Controller and Chief Accounting
Officer of the Company and the Executive shall report to the
Chief Financial Officer of the Company. Executive shall
perform all duties and shall have all powers which are
commonly incident to his office as well as all powers that are
delegated to Executive by the Chief Financial
Officer.
(ii)
Executive
shall devote his best efforts and his full business time and
attention to the business and affairs of the Company, except
for permitted vacation periods in accordance with the
Company’s policy, periods of illness or other
incapacity, and reasonable time spent with respect to civic
and charitable activities, provided that none of such
activities shall materially interfere with Executive’s
duties to the Company or its Subsidiaries.
(c)
Salary. Bonus and Benefits .
(i)
During
the Employment Period, the Company will pay Executive a base
salary at the rate of $150,000 per annum (the “
Annual Base Salary”) .
The Annual Base Salary shall be paid in such installments as is the
policy of the Company with respect to executive officers of the
Company.
(ii)
Commencing
with the Effective Date, Executive shall be eligible for a
discretionary annual bonus of up to twenty-five percent (25%)
of Executive’s Annual Base Salary (the
“Bonus”). The amount of any Bonus to be awarded
shall be determined pursuant to the Acceris Management System,
based on performance criteria established at the beginning of
each fiscal year, and the timing of such award and the payment
of any such Bonus shall be consistent with the practice of the
Company.
(iii)
Executive shall be entitled to participate in all employee
stock option, pension and welfare benefit plans, programs and
practices maintained by the Company for its employees
generally in accordance with the terms of such plans, programs
and practices as in effect from time to time, and in any other
insurance, pension, retirement or welfare benefit plans,
programs and practices which the Company generally provides to
its executives from time to time.
(d)
Expenses .
The Company shall pay, or reimburse the Executive (at the
Company’s option), in accordance with policies established by
the Company, for all reasonable and necessary expenses and other
disbursements incurred by the Executive for or on behalf of the
Company in the performance of his duties hereunder, including,
without limitation, travel on behalf of or in connection with his
services for the Company in a manner customary for the
Company’s senior executives, including food and lodging
expenses while the Executive is away from home performing services
for the Company.
(e)
Workplace and Work Schedule .
Executive’s workplace shall be the Company’s office in
Pittsburgh, Pennsylvania. Executive shall be entitled to such
holidays as are established by the policies of the Company.
Executive shall be entitled to three (3) weeks (or more, in
accordance with the Company’s vacation policy) of vacation
per year, which may be taken in various periods, subject to the
Company’s needs.
Section 2.
Termination Of
Employment .
(a)
Death or Disability .
The Company may terminate the Executive’s employment
hereunder due to the Executive’s death or Disability. If the
Executive dies during the Employment Period, the Termination Date
shall be deemed to be the date of the Executive’s
death.
(b)
Cause .
The Company may terminate the employment of Executive hereunder at
any time for Cause (such termination being referred to herein as a
“
Termination for Cause” )
by giving the Executive written notice of such termination, with
such termination to take effect as of the date of such
notice.
(c)
Without Cause .
The Company may terminate the employment of the Executive at any
time during the Employment Period without Cause by giving the
Executive written notice of such termination, with such termination
to take effect as of the date of such notice.
(d)
Good Reason ,
Executive may terminate his employment hereunder for Good Reason by
providing written notice to the Company within 45 days of his
knowledge of the event constituting Good Reason. Notwithstanding
the foregoing provisions to the contrary, in no event shall the
Executive terminate his employment hereunder for Good Reason
without providing the Company with at least fifteen (15)
days’ prior written Notice of Termination given by the
Executive to the Company and an opportunity for the Company to cure
within that fifteen (15) day period the Good Reason which the
Executive believes provides him with grounds to terminate his
employment.
(e
)
Notice of
Termination .
Any termination pursuant to this
Section 2 shall
be communicated to Executive or the Chief Financial Officer, as
applicable, by Notice of Termination.
Section 3.
Effect
Of
Termination Of
Employment
.
(a)
Death or Disability .
Upon the termination of Executive’s employment hereunder due
to death or Disability pursuant to
Section 2(a) ,
neither Executive nor his beneficiary or estate shall have any
further rights or claims against the Company under this Agreement,
except the right to receive (i) the unpaid portion, if any, of the
Annual Base Salary provided for in
Section 1 ,
computed on a pro rata basis to the Termination Date (based on the
actual number of days elapsed over a year of 365 or 366 days, as
applicable), (ii) the unpaid portion, if any, of the Bonus and
(iii) reimbursement for any expenses for which Executive shall not
have been reimbursed as provided for in
Section 1 (such
amounts being collectively referred to as “
Accrued Compensation”) .
(b)
Cause .
Upon a termination of Executive’s employment hereunder by the
Company for Cause pursuant to
Section 2(b) ,
neither Executive nor his beneficiary or estate shall have any
further rights or claims against the Company under this Agreement,
except the right to receive (i) the unpaid portion, if any, of the
Annual Base Salary provided for in
Section 1 ,
computed on a pro rata basis to the Termination Date (based on the
actual number of days elapsed over a year of 365 or 366 days, as
applicable) and (ii) reimbursement for any expenses for which the
Executive shall not have been reimbursed as provided for in
Section 1 .
(c)
Without Cause .
Upon a termination of Executive’s employment hereunder by the
Company without Cause pursuant to
Section 2(c) ,
neither Executive nor his beneficiary or estate shall have any
further rights or claims against the Company under this Agreement,
except the right to receive:
(i)
any
Accrued Compensation;
(ii)
off
payroll, an amount equal to the amount of the Annual Base
Salary, payable in accordance with
Section 1 (
c)(i) ,
Executive would have received for the period commencing on the
Termination Date and ending six months after the Termination Date;
and
(iii)
provided that Executive has met, as of the Termination Date,
the performance criteria established with respect to the Bonus
for the fiscal year in which the Termination Date occurs, the
pro rata portion of the Bonus for such fiscal year (based on
the actual number of days elapsed from the beginning of the
fiscal year to the Termination Date), the timing of the
payment of any such Bonus to be consistent with the past
practice of the Company.
(d)
Upon
a termination of the Executive’s employment hereunder by
the Executive for Good Reason pursuant to
Section 2(d) ,
neither the Executive nor his beneficiary or estate shall have any
further rights or claims against the Company under this Agreement,
except the right to receive:
(i) any
Accrued Compensation; and
(ii)
off
payroll, an amount equal to the amount of the Annual Base
Salary, payable in accordance with
Section 1(c)(i) ,
Executive would have received for the period commencing on the
Termination Date and ending six months after the Termination
Date.
(e)
Release .
Executive
acknowledges and agrees that the payments provided for in
Sections 3(c)(ii) and 3(d)(ii )
constitute liquidated damages for any claim of breach of contract
under this Agreement as it relates to termination of his employment
during the Employment Period without Cause pursuant to
Section 2(c )
or with Good Reason pursuant to
Section 2(d) .
Notwithstanding the foregoing, if Executive is entitled to the
payments set forth in
Section 3(c)(ii )
or
Section 3(d)(ii )
of this Agreement, Executive shall execute and agree to be bound by
an agreement, in form and substance satisfactory to the Company
(the “Release”), relating to the waiver and general
release of any and all claims arising out of or relating to
Executive’s employment and termination of employment, and the
Company shall have no obligation to make the payments contemplated
under
Section 3(c)(ii )
or
Section 3(d)(ii) ,
as the case may be if Executive fails to execute such Release or
seeks to revoke such Release. In addition, if Executive should
violate or threaten to violate the terms of
Section 4 of
this Agreement, the continuing obligations of the Company to make
the payments contemplated under
Section 3(c)(ii )
or
Section 3(d)(ii) ,
as the case may be, shall immediately terminate.
(f)
Mitigation .
Notwithstanding the foregoing and subject to the limitations on
competition hereunder, the amount of any payment by the Company
provided for in
Section 3(c)(ii )
or
Section 3(d)(ii) ,
as the case may be, shall be reduced by the amount of any
compensation earned by the Executive from a competitor of the
Company or any Subsidiary during the period such payment is to be
made by the Company.
Section 4.
Confidentiality .
(a)
Executive
agrees that at all times, both du
