SEPARATION OF EMPLOYMENT AND
RELEASE AGREEMENT
This Separation of
Employment and Release Agreement (this “Agreement”) is
made by and between Global Telecom & Technology, Inc., a
Delaware corporation with its principal place of business in
McLean, Virginia, on behalf of itself and its subsidiaries and
divisions (collectively, “Employer” or
“Company”), and Kevin Welch (“you” or
“Employee”, together with Employer, the
“Parties”). The Effective Date of this Agreement will
be eight (8) days after its execution by the Employee, if
Employee does not revoke acceptance within seven (7) days
after Employee executes this Agreement.
WHEREAS, the
Parties to this Agreement wish to set forth clearly the terms and
conditions of Employee’s separation from employment with
Employer; and
WHEREAS,
Employee’s separation of employment with Employer shall be
effective as of the date set forth below;
NOW THEREFORE, in
consideration of the mutual covenants set forth herein and for
other valuable consideration, the receipt and sufficiency of which
are acknowledged, Employee and Employer, intending to be legally
bound, agree as follows:
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1.
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Separation
. You acknowledge that
your separation from Employer shall be October 31, 2008 (the
“Separation Date”). As of the Separation Date, you will
no longer be required to fulfill any of the duties and
responsibilities associated with your position nor are you
authorized to act on behalf of the Employer or direct the
activities of any of Employer’s employees. By executing this
Agreement, you acknowledge and agree that this Agreement shall
supersede the Employment Agreement that you signed with Employer
dated January 22, 2007 (“Employment Agreement”)
and, except for your continuing obligations in Sections 4, 6,
7.7, 7.8 (except the second sentence), and 8, the remainder of the
Employment Agreement shall no longer have any force or effect
including, without limitation, Sections 5 and 7 (except
Section 7.7 and the first sentence of Section 7.8). You
shall be ineligible for, and not be entitled to receive, any bonus
payment related to Employer’s 2008 bonus program.
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2.
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Severance Payment
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(a)
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In consideration for Employee
signing this Agreement, including the release of claims set forth
in Section 3 below, your covenants and obligations set forth
in this Agreement and your continued performance of your
obligations set forth in this Agreement and the Employment
Agreement as noted above, upon the Effective Date of this
Agreement, you shall be entitled to the following benefits:
(i) the seventy thousand (70,000) shares of Global Telecom
& Technology, Inc.(“GTT”) restricted common stock
that you were granted in February, 2008 shall become fully vested
as of February 1, 2009. Although you shall have the right to
use some of the shares of vested restricted stock to offset the
taxes you owe as a result of the vesting of the shares, you agree
and acknowledge that you shall be personally and fully
responsible
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and liable for payment of all taxes associated
with the vesting of the shares of GTT common stock; and
(ii) as of the Separation Date, you are not entitled to any
additional Company matching benefits under the Company’s
401(k) Plan but any matching amounts already contributed by the
Company as of the Separation Date shall continue to vest in
accordance with the terms of the Company’s 401(k) Plan until
January 22, 2009. You shall also be paid for any earned but
unused vacation days that have accrued as of the Separation Date.
The payment for unused vacation days will be in accordance with the
Company’s regularly scheduled payroll processing, will be
directly deposited in your designated bank account, and will be
subject to standard payroll deductions and withholdings.
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(b)
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The Company will hire you as an
employee at an annualized salary of $200,000 commencing the day
after the Separation Date and continuing in effect for six (6)
months from the Effective Date. You will not accrue vacation or
leave time after the Separation Date. At the end of the first six
(6) month period, you shall have an option to continue work
for GTT at an annualized salary of $200,000 for an additional
period that is not to exceed six (6) months (“Extension
Period”). You can exercise this extension unless you are
working for another employer at an annualized salary of $150,000 or
more. During the Extension Period, if you accept a position with
another employer at an annualized salary of $150,000 or more, you
will provide notice to GTT and terminate this agreement. The final
date of your employment with the company after the six month period
following the Separation Date and any Extension Period shall be the
“Final Separation Date”. Company may not terminate your
employment prior to the Final Separation Date except for
“Cause”. For purposes of this agreement, the Company
shall have “Cause” to terminate your employment only
if: (i) you commit an act of fraud, embezzlement,
misappropriation of funds, or dishonesty, (ii) you are grossly
negligent or engage in willful misconduct in the performance of
your duties hereunder, and fails to remedy such breach within ten
(10) days of receiving written notice thereof from the
Company, provided, however, that no act, or failure to act, by you
shall be considered “grossly negligent” or an act of
“willful misconduct” unless committed without good
faith and without a reasonable belief that the act or omission was
in or not opposed to the Company’s best interest;
(iii) you are convicted of a felony or a crime of moral
turpitude; or (vi) you have a drug or alcohol
dependency.
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(c)
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You agree, understand, and
acknowledge that the vesting of the restricted shares of GTT common
stock as well as any other promises made to you hereunder represent
the sole consideration for signing and performing this Agreement
and not salary, wages or benefits to which you were already
entitled. Up until the Final Separation Date you will be eligible
to continue participation in the Company’s medical and dental
plans. After the Final Separation Date, Employee or
Employee’s covered dependents may elect to pay for COBRA
medical and dental insurance continuation coverage for Employee
and/or Employee’s covered dependents for the time period
and
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under such conditions as are provided by COBRA.
You will be responsible for any and all COBRA coverage insurance
payments (if you so elect) after the Final Separation Date;
provided, however, that you will be eligible to purchase COBRA
continuation coverage at the rate applicable to active GTT
employees for six (6) months from the Final Separation Date
followed by twelve (12) months of COBRA coverage at the full
rate. You are not entitled to any Company matching benefits under
the Company’s 401(k) Plan as of the Separation Date but any
matching amounts contributed by the Company as of the Separation
Date shall continue to vest in accordance with the terms of the
Company’s 401(k) Plan until January 22, 2009
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(d)
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You further represent and warrant
that no other inducements, promises, agreements or arrangements
exist between you and Employer regarding your separation from
employment with Employer.
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(a)
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By our mutual signatures below, the
Parties have agreed that: (i) Company will have no further
obligations to make payments of money in the form of salary, bonus,
or otherwise, benefit contributions, transfers of stock or other
things of value (including, but not limited to, perquisites) except
as provided in this Agreement; and (ii) the Company shall have
no liability with respect to the termination of your employment
except as expressly set forth herein.
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(b)
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In exchange for the benefits set
forth herein, you (for yourself, your heirs, assigns or executors)
release and forever discharge Employer, any of its affiliates,
successors, assigns, insurers or attorneys, and its and their
directors, officers, contractors, agents and employees from any and
all claims, suits, demands, causes of action, contracts, covenants,
obligations, debts, costs, expenses, attorneys’ fees,
liabilities of whatever kind or nature in law or equity, by statute
or otherwise, whether now known or unknown, vested or contingent,
suspected or unsuspected, and whether or not concealed or hidden,
which have existed or may have existed, or which do exist, on or
before the Separation Date, of any kind, which relate in any way to
your employment with Employer or the termination of that employment
(“Claims”), except (i) those arising out of the
performance of this Agreement, (ii) your rights under the
employee benefit plans of Employer that by their terms are
available to terminated employees; (iii) your rights to
accrued, unused vacation; and (iv) any rights or claims that
may arise after the Separation Date.
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(c)
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The released Claims include,
without limiting the generality of the foregoing language, any and
all claims that Employer has violated any statute, public policy or
common law including, without limitation, claims for retaliatory
discharge; negligent hiring, retention or supervision; defamation;
intentional or negligent infliction of emotional distress and/or
mental anguish; intentional interference with contract; negligence;
detrimental reliance; loss of consortium
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