**Exhibit 10.23**

 

**EMPLOYMENT AGREEMENT**

 

**THIS EMPLOYMENT AGREEMENT** (this “Agreement”)is made as of the 1st day of July 2002 by and between WorldxChangeCorp., a Delaware corporation (the “Company”), and James Ducay (“Executive”).

 

**R E C I T A L S:**

 

WHEREAS, pursuant to an Asset Purchase Agreement datedas of March 25, 2002 (the “Purchase Agreement”), the Company will purchasecertain assets (the “Assets”) of RSL COM U.S.A., Inc. (“RSL”);

 

WHEREAS, following the consummation of the purchase ofthe Assets, the Company’s current sales and marketing functions will betransferred to an Affiliate and the sales and marketing functions of RSL willbe transferred to another Affiliate (together, the “Sales Affiliates”);

 

WHEREAS, following the transfer of sales and marketingfunctions referred to above, the Company will provide network, billing andoperation support services to each of the Sales Affiliates and network servicesto I-Link Communications, Inc. (“I-Link”);

 

WHEREAS, in connection with the proposed purchase ofthe Assets, Executive will perform certain network integration and operationaltasks for the Company while still an employee of RSL pursuant to an Agreementamong the Company, RSL and Executive;

 

WHEREAS, the parties hereto believe that it is intheir respective interests to enter into an employment agreement whereby, forthe consideration specified herein, Executive shall provide the servicesspecified herein; certain definitions are set forth in Section 6 ofthis Agreement.

 

The parties hereto agree as follows:

 

**Section 1.****                                          Employment.**

 

(a)                                  EmploymentPeriod. The Company agrees to employ Executive and Executive accepts suchemployment for the period (the “Employment Period”) beginning as of thedate of the closing under the Purchase Agreement (the “Effective Date”)and ending upon (a) the first anniversary of the Effective Date or (b) suchearlier date upon which the employment of the Executive shall terminate inaccordance with Section 2 herein (the date of termination beinghereinafter called the “Termination Date”).  The Employment Period may be extended by written agreement of theparties hereto.  Any employment ofExecutive by the Company following the expiration of the Employment Periodshall be “at will” and may be terminated by the Company at any time without anyliability other than the payment of any base salary and bonus through theeffective date of termination.

 

(b)                                 Positionand Duties.

 

(i)                                     Duringthe Employment Period, Executive shall report to the Board and shall (A)continue the integration of certain of the Assets into the Company’s network,(B) complete such additional network integration as the Board may determine,(C) help Counsel Springwell Communications LLC, the indirect parent company ofthe Company (the “LLC”), to determine which

 

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elements of this integrated network (the “Integrated Network”) shouldbe managed centrally and which should be a part of, respectively, I-Link, theSales Affiliates and any other companies that the LLC purchases during the termof this Agreement (collectively, the “Customer-Facing Companies”) , (D) managethe Integrated Network to efficiently and appropriately provide networkservices for the Customer-Facing Companies and (E) perform such other duties asthe Board may delegate or assign to Executive.

 

(ii)                                  Executiveshall devote his best efforts and his full business time and attention to thebusiness and affairs of the Company, except for permitted vacation periods inaccordance with the Company’s policy, periods of illness or other incapacity,and reasonable time spent with respect to civic and charitable activities.

 

(iii)                               In addition toperforming the duties set forth above, Executive agrees to serve during theEmployment Period as a member of the Management Executive Committee (the “ManagementExecutive Committee”) that has been established pursuant to the resolutionsadopted by the Board of Directors of the LLC, copies of which are attachedhereto as Exhibit A.

 

(c)                                  Salary,Bonus and Benefits.

 

(i)                                     Duringthe Employment Period, the Company will pay Executive a base salary at the rateof $275,000 per annum (the “Annual Base Salary”).  The Annual Base Salary shall be paid in suchinstallments as is the policy of the Company with respect to executive officersof the Company.

 

(ii)                                  Executiveshall be eligible for a discretionary bonus with respect to the 12-month periodfollowing the Effective Date of up to one hundred percent (100%) of Executive’sAnnual Base Salary (the “Bonus”). The amount of the Bonus to be awarded shall be determined by the Board,based on metrics  to be set forth in aseparate letter agreement prior to the Effective Date (the “PerformanceCriteria”).  At least fifty percent(50%) of the Performance Criteria will consist of milestones to be achieved byExecutive related to network, billing and operation support services, and thebalance will consist of financial results of the Company and other PerformanceCriteria to be established by the Board. If all the Performance Criteria are met, the Bonus will be in an amountequal to one hundred percent (100%) of Executive’s Annual Base Salary.  The Bonus shall be paid within thirty (30)days following the expiration of the Employment Period.

 

(iii)                               Executive shall beentitled to participate in all employee pension and welfare benefit plans, programsand practices maintained by the Company for its employees generally inaccordance with the terms of such plans, programs and practices as in effectfrom time to time, and in any other insurance, pension, retirement or welfarebenefit plans, programs and practices which the Company generally provides toits executives from time to time.

 

(d)                                 Expenses.  The Company shall pay, or reimburse theExecutive (at the Company’s option), in accordance with policies established bythe Company, for all reasonable and necessary expenses and other disbursementsincurred by the Executive for or on behalf of the Company in the performance ofhis duties hereunder, including, without limitation, travel on behalf of or inconnection with his services for the Company in a manner customary for theCompany’s senior executives, including food and lodging expenses while theExecutive is away from his home in Lake Forest, Illinois performing servicesfor the Company.

 

(e)                                  Workplaceand Work Schedule.  Executive’sworkplace shall be the Company’s offices in San Diego, California andPittsburgh, Pennsylvania.  Executiveshall also, as requested, attend

 

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meetings of the Management Executive Committee and other meetings withthe management of the LLC at the offices of the LLC in Stamford,Connecticut.  Executive shall beentitled to such holidays as are established by the policies of theCompany.  Executive shall be entitled tofour (4) weeks of vacation per year, which may be taken in various periods,subject to the Company’s needs.

 

**Section 2.****                                          TerminationOf Employment.**

 

(a)                                  Deathor Disability.  The Company mayterminate the Executive’s employment hereunder due to the Executive’s death orDisability.  If the Executive diesduring the Employment Period, the Termination Date shall be deemed to be thedate of the Executive’s death.

 

(b)                                 Cause.  The Company may terminate the employment ofExecutive hereunder at any time for Cause (such termination being referred toherein as a “Termination for Cause”) by giving the Executive writtennotice of such termination, with such termination to take effect as of the dateof such notice.

 

(c)                                  WithoutCause.  The Company may terminatethe employment of the Executive at any time during the Employment Periodwithout Cause by giving the Executive written notice of such termination, withsuch termination to take effect as of the date of such notice.

 

(d)                                 GoodReason.  Executive may terminate hisemployment hereunder for Good Reason by providing written notice to the Companywithin 45 days of his knowledge of the event constituting Good Reason.  Notwithstanding the foregoing provisions tothe contrary, in no event shall the Executive terminate his employment hereunderfor Good Reason without providing the Company with at least fifteen (15) days’prior written Notice of Termination given by the Executive to the Company andan opportunity for the Company to cure within that fifteen (15) day period theGood Reason which the Executive believes provides him with grounds to terminatehis employment.

 

(e)                                  Noticeof Termination.  Any terminationpursuant to this Section 2 shall be communicated to Executive orthe Board, as applicable, by Notice of Termination.

 

**Section 3.****                                          EffectOf Termination Of Employment.**

 

(a)                                  Deathor Disability.  Upon the terminationof 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 rightsor 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 actualnumber of days elapsed over a year of 365 or 366 days, as applicable), (ii) theunpaid portion, if any, of the Bonus and (iii) reimbursement for any expensesfor 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 employmenthereunder by the Company for Cause pursuant to Section 2(b),neither Executive nor his beneficiary or estate shall have any further rightsor 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 actualnumber 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 beenreimbursed as provided for in Section 1.

 

(c)                                  WithoutCause.            Upon a termination ofExecutive’s employment hereunder by the

 

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Company without Cause pursuant to Section 2(c), neitherExecutive nor his beneficiary or estate shall have any further rights or claimsagainst the Company under this Agreement, except the right to receive

 

(i)                                     anyAccrued Compensation,

 

(ii)                                  offpayroll, an amount equal to the amount of the Annual Base Salary, payable inaccordance with Section 1(c)(i), Executive would have received forthe period commencing on the Termination Date and ending on the firstanniversary of the Effective Date, and

 

(iii)                               providedthat Executive has met, as of the Termination Date, the Performance Criteria,the pro rata portion of the Bonus (based on the actual number of days elapsedfrom the Effective Date to the Termination Date).

 

(d)                                 Upona termination of the Executive’s employment hereunder by the Executive for GoodReason pursuant to Section 2(d), neither the Executive nor hisbeneficiary or estate shall have any further rights or claims against theCompany under this Agreement, except the right to receive

 

(i)                                     anyAccrued Compensation;

 

(ii)                                  offpayroll, an amount equal to the amount of the Annual Base Salary, payable inaccordance with Section 1(c)(i), Executive would have received forthe period commencing on the Termination Date and ending on the firstanniversary of the Effective Date; and

 

(iii)                               providedthat Executive has met, as of the Termination Date, the Performance Criteria,the pro rata portion of the Bonus (based on the actual number of days elapsedfrom the Effective Date to the Termination Date).

 

(e)                                  Release.  Executive acknowledges and agrees that thepayments provided for in Sections 3(c)(ii) and3(d)(ii)constitute liquidated damages for any claim of breach of contract under thisAgreement as it relates to termination of his employment during the EmploymentPeriod without Cause pursuant to Section 2(c) or with Good Reasonpursuant to Section 2(d). Notwithstanding the foregoing, if Executive is entitled to the paymentsset forth in Section 3(c)(ii) or Section 3(d)(ii) ofthis 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 ofor relating to this Employment Agreement, Executive’s employment and terminationof employment, and the Company shall have no obligation to make the paymentscontemplated under Section 3(c)(ii) or Section 3(d)(ii),as the case may be if Executive fails to execute such Release or seeks torevoke such Release.  In addition, ifExecutive should violate or threaten to violate the terms of Section 4of this Agreement, the continuing obligations of the Company to make thepayments contemplated under Section 3(c)(ii) or Section 3(d)(ii),as the case may be, shall immediately terminate.

 

**Section 4.****                                          Covenants.**

 

(a)                                  Executiveagrees that at all times, both during and for two years after Executive’semployment by the Company, Executive will hold in a fiduciary capacity for thebenefit of the Company and not use or disclose to any third party any tradesecret, or other information, knowledge or data not generally known to thepublic which Executive may have learned, discovered, developed, conceived,originated, prepared or received during or as a result of Executive’semployment by the Company or any Subsidiary or Affiliate (or any entityacquired by the Company or any Subsidiary or Affiliate or any entity from whichthe Company or any Subsidiary or Affiliate acquired assets) with respect to theoperations, businesses, affairs, products, services, technology, intellectualproperties, Agents, customers, clients,

 

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pricing of products or services, policies, procedures, accounts,personnel, concepts, format, style, techniques or software of the Company orany Subsidiary or Affiliate (“Proprietary Information”).  Executive agrees that Company’s ProprietaryInformation includes, without limitation, the business or other needs,requirements, preferences or other information relating to Agents and customersof the Company or any Subsidiary or Affiliate, acquisition targets of theCompany or any Subsidiary or Affiliate and all information or data collected bythe Company with reference thereto. Executive agrees to comply with any and all procedures which the Companymay adopt from time to time to preserve the confidentiality of any trade secretor other non-public proprietary, information, knowledge or data; that theabsence of any legend indicating the confidentiality of any materials will notgive rise to an inference that the contents thereof or information derivedtherefrom are not confidential and that, immediately following the terminationof Executive’s employment by the Company, Executive will return to Company allmaterials, except for Executive’s personal items, provided to Executive by theCompany during the term hereof, all works created by Executive or others duringthe term of Executive’s employment hereunder and all copies thereof.  Notwithstanding the foregoing, thelimitations imposed on Executive pursuant to this Section 4(a)shall not apply to Executive’s (i) compliance with legal process or subpoena or(ii) statements in response to inquiry from a court or regulatory body;provided, that Executive gives the Company reasonable prior written notice ofsuch process, subpoena or request.

 

(b)                                 Executiveshall not, at any time prior to the Termination Date or during the periodthereafter ending on the first anniversary of the Termination Date (such periodbeing referred to herein as the “Stipulated Period”), intentionallydisrupt or attempt to disrupt the relationship, contractual or otherwise,between the Company or any of its Subsidiaries or Affiliates and any thirdparty, including, but not limited to, any Agent, customer, supplier or employeeof any of them.  Executive shall bedeemed to have violated the provisions of the foregoing sentence if he shallsolicit or directly or indirectly for himself or any third party hire orotherwise retain the services of any individual who shall have been an Agent oremployee of the Company or any Subsidiary or Affiliate within the immediatelypreceding two-year period; provided, however, that notwithstanding theforegoing, the parties agree that Executive shall not be deemed to haveviolated the provisions of this Section 4(b) in the event that anyPerson of which Executive is an employee, agent or consultant (the “NewEmployer”) disrupts or attempts to disrupt the relationship between theCompany or any of its Subsidiaries or Affiliates and any Agent, employee,customer or supplier of any of them, so long as Executive has neitheridentified such Agent, employee, customer or supplier to the New Employer nordirected that such action be taken.

 

(c)                                  Executivehereby assigns to the Company the entire right, title and interest of Executivein and to all work, inventions, ideas, disclosures and improvements, whether ornot patented or patentable, made, conceived or reduced to practice byExecutive, solely or with others, in whole or in part, at any time during theEmployment Period, which in any way relate to the Business.  During the Employment Period, Executiveshall communicate promptly and disclose to the Company all information, detailsand data pertaining to such work, inventions, ideas, disclosures and improvements.  Executive shall, at any time (including anytime after the expiration of the Employment Period), execute and deliver to theCompany such formal transfers and assignments and such other papers anddocuments as may be required of Executive to perfect the Company’s rightshereunder and to permit the Company to file and prosecute patentapplications.  Any work, invention,idea, disclosure or improvement by Executive relating to the Business withinsix (6) months following the expiration of the Employment Period shall bedeemed to fall within the provisions of this Section 4(c) unlessproved by Executive to have been first conceived and made following suchexpiration.  Nothing in this Section 4(c)shall abrogate or reduce any other restrictions on Executive under applicablelaw.

 

(d)                                 Becausethe breach or attempted or threatened breach of this Section 4 mayresult in immediate and irreparable injury to the Company for which the Companymay not have an adequate remedy at law, the Company shall be entitled, in additionto all other remedies, to a decree of specific

 

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performance thereof and to a temporary and permanent injunctionenjoining such breach, without posting bond or furnishing similarsecurity.  The parties’ obligationsunder this Section 4 shall survive any termination of Executive’semployment or this Agreement.

 

**Section 5.****                                          TaxWithholding**.

 

The Company may withholdfrom any compensation or severance payable under this Agreement all federal,state, city or other taxes as shall be required pursuant to any law orgovernmental regulation or ruling.

 

**Section 6.****                                          Definitions.**

 

“Affiliate” of the Company means (i) any otherPerson controlling, controlled by, or under common control with the Company,where “control” means the possession, directly or indirectly, of the power todirect the management and policies of a Person whether through the ownership ofvoting securities, by contract, or otherwise, and (ii) if such Person is apartnership, any partner thereof.

 

“Agent” means any Person which has received oris entitled to receive a commission from the Company related to the sale ormarketing of the Company’s products or services.

 

“Board” means the Board of Directors of theCompany.

 

“Business” meansthe offering of data and long distance voices services, including frame relayand “dial around” voice communications. “Business” also means any other business activity which is the Company’sprincipal business activity at the time Section 4 is invoked.

 

“Cause” means (i) Executive’s conviction of, orplea of guilty or *nolo**contendere* to, a crime constituting afelony, (ii) gross misconduct by the Executive that is materially inconsistentwith the terms hereof, (iii) material failure by the Executive to perform his duties,which nonperformance continues after written notice thereof and a fifteen (15)day chance to cure, (iv) the Executive’s material breach of this Agreement,which, if curable, shall not have been cured within fifteen (15) days afterwritten notice thereof from the Company, (v) habitual drug or alcohol use whichimpairs the ability of Executive to perform his duties hereunder, or (vi)Executive’s engaging in fraud, embezzlement or any other illegal conduct withrespect to the Company which acts are harmful to, either financially, or to thebusiness reputation of, the Company or (vii) breach of the fiduciary duty owedby Executive to the Company or of any of its Subsidiaries or Affiliates, whichbreach, if curable, shall not have been cured within fifteen (15) days afterwritten notice thereof from the Company.

 

“Disability” means a physical or mentalinfirmity which impairs Executive’s ability to perform substantially his dutiesfor a total period exceeding six (6) months during the Employment Period or fora period of four (4) consecutive months. Disability shall be determined by a physician acceptable to both theCompany and Executive, or, if the Company and Executive cannot agree upon aphysician within 15 days after the Company claims that Executive is sufferingfrom a Disability, by a physician selected by two physicians, one designated byeach of the Company and Executive. Executive’s failure to submit to any physical examination by any suchphysician after such physician has given reasonable notice of time and place ofsuch examination shall be conclusive evidence of Executive’s inability toperform his duties hereunder.

 

“Good Reason” means, during the EmploymentPeriod and without Executive’s consent:

 

(i)                                     amaterial diminution of Executive’s title, reporting structure, position orresponsibilities or

 

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(ii)                                  areduction in, or failure to pay, Executive’s Annual Base Salary or anyreduction in the benefits being required to be provided herein or any other material breach of thisAgreement.

 

“Notice of Termination”means a written notice which indicates the Termination Date, the specifictermination provision in this Agreement relied upon, and the facts andcircumstances, if any, claimed to provide a basis for such termination.

 

“Person” means an individual, a partnership, alimited liability company, a corporation, an association, a joint stockcompany, a trust, a joint venture, an unincorporated organization and agovernmental entity or any department, agency or political subdivision thereof.

 

“Subsidiary” means any corporation or otherentity of which the securities having a majority of the ordinary voting powerin electing the board of directors are, at the time as of which anydetermination is being made, owned by the Company either directly or throughone or more Subsidiaries.

 

**Section 7.****                                          Notices.**

 

Any notice provided for in this Agreement must be inwriting and must be either personally delivered, mailed by first class mail(postage prepaid and return receipt requested) or sent by reputable overnightcourier service (charges prepaid) to the recipient at the address belowindicated:

If to Company:

 

WorldxChange Corp.

9775 Business Park Avenue

San Diego, California 92131

Attn:  Chairmanof the Board

 

If to Executive:

 

951 Oak Knoll

Lake Forest, Illinois60045

 

or such other address or to the attention of such other person as therecipient party shall have specified by prior written notice to the sendingparty.  Any notice under this Agreementwill be deemed to have been given when so delivered or sent or, if mailed, fivedays after deposit in the U.S. mail.

 

**Section 9.****                                          GeneralProvisions.**

 

(a)                                  Severability.  Whenever possible, each provision of thisAgreement will be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Agreement is held to be invalid,illegal or unenforceable in any respect under any applicable law or rule in anyjurisdiction, such invalidity, illegality or unenforceability will not affectany other provision or any other jurisdiction, but this Agreement will bereformed, construed and enforced in such jurisdiction as if such invalid,illegal or unenforceable provision had never been contained herein.

 

(b)                                 CompleteAgreement.  This Agreement, thosedocuments expressly referred to herein and other documents of even dateherewith embody the complete agreement and understanding among the parties andsupersede and preempt any prior understandings, agreements or representationsby or among the parties, written or oral, which may have related to the subjectmatter hereof in any way.

 

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(c)                                  Counterparts.  This Agreement may be executed in separatecounterparts, each of which is deemed to be an original and all of which takentogether constitute one and the same agreement.

 

(d)                                 Successorsand Assigns.  Except as otherwiseprovided herein, this Agreement shall bind and inure to the benefit of and beenforceable by Executive, the Company and their respective successors andassigns; provided that the rights and obligations of Executive underthis Agreement shall not be assignable.

 

(e)                                  Choiceof Law.  This Agreement will begoverned by and construed in accordance with the internal laws of the State ofDelaware, without giving effect to any choice of law or conflict of lawprovision or rule (whether of the State of Delaware or any other jurisdiction)that would cause the application of the laws of any jurisdiction other than theState of Delaware.

 

(f)                                    Remedies.  Except as provided in Section 4(d)hereof, if any contest or dispute arises between the parties with respect tothis Agreement, such contest or dispute shall be submitted to bindingarbitration for resolution in New York City in accordance with the rules andprocedures of the American Arbitration Association then in effect.  The decision of the arbitrator shall befinal and binding on both parties, and any court of competent jurisdiction mayenter judgment upon the award.  Eachparty shall pay its own legal fees and expenses incurred in connectiontherewith.

 

(g)                                 Amendmentand Waiver.  The provisions of thisAgreement may be amended and waived only with the prior written consent of theCompany and Executive.

 

(h)                                 Insurance.  The Company, at its discretion, may applyfor and procure in its own name and for its own benefit life and/or disabilityinsurance on Executive in any amount or amounts considered available.  Executive agrees to cooperate in any medicalor other examination, supply any information, and to execute and deliver anyapplications or other instruments in writing as may be reasonably necessary toobtain and constitute such insurance. Executive hereby represents that he has no reason to believe that hislife is not insurable at rates now prevailing for healthy men of his age.

 

(i)                                     BusinessDays.  If any time period for givingnotice or taking action hereunder expires on a day which is a Saturday, Sundayor holiday in the state in which the Company’s chief executive office islocated, the time period shall be automatically extended to the business dayimmediately following such Saturday, Sunday or holiday.

 

IN WITNESS WHEREOF, the parties hereto have executedthis Employment Agreement on the date first written above.

 
|   | WORLDXCHANGE CORP. |
|--------|--------------------|
|   |               |
|   | By:                |   |   |
|   | Name:              |
|   | Its:               |
|   |               |
|   |               |   |
|   | James Ducay        |

 

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**Exhibit A**

 

WHEREAS, the Company ownsand provides management services to portfolio companies which operate incertain segments of the telecommunications industry;

 

WHEREAS, one of thestrategic goals of the Company is to identify new platforms within thetelecommunications industry for future acquisitions by the Company;

 

WHEREAS, the Board ofDirectors has established a Management Executive Committee to assist the Boardin connection with the management of the Company’s portfolio companies and inconnection with the identification and integration of new platforms;

 

WHEREAS, the Board ofDirectors wishes to expand the responsibility of the Management ExecutiveCommittee;

 

NOW, THEREFORE, BE ITRESOLVED, that a Management Executive Committee of the Company be, and ithereby is, established and that the Management Executive Committee shall havethe responsibility for assisting the Board of Directors of the Company inconnection with (i) overseeing the management of the Company’s portfoliocompanies, (ii) identifying and developing new platforms for the Company, (iii)providing advice with respect to the interaction of such new platforms with theportfolio companies of the Company with the objective of maximizing the valuecreated among them and  (iii) ensuringthat the integrated network, consisting of the network assets of I-LinkIncorporated and WorldxChange Corp., the network assets to be acquired from RSLCOM U.S.A., Inc. and any other network assets that the Company may acquire inthe future, is efficiently and appropriately supporting those subsidiaries ofthe Company marketing and selling telecommunications services directly to endusers and customers (the “Customer-Facing Companies”); and further

 

RESOLVED, that WilliamBarker, Mufit Cinali and Gary Wasserson, members of the Board of Directors ofthe Company, James Ducay and the Chief Executive Officers of each of theCustomer-Facing Companies be, and they hereby are, appointed as the members ofthe Management Executive Committee.

 

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