EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into this 9th
day of September, 1999 between I-Link Incorporated, a Florida corporation
(the "Company") and Xxxx Xxxxxxx, an individual resident of Provo, Utah (the
"Employee"), and shall be effective upon execution.
WITNESSETH:
WHEREAS, the Employee is desirous of continuing as an employee of
the Company;
WHEREAS, it is the desire of the Company to offer the Employee
employment with the Company upon the terms and subject to the conditions set
forth herein; and
WHEREAS, it is the desire of the Employee to accept the Company's
offer of employment with the Company upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
covenants, conditions and agreements contained herein and for such other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee and
the Employee hereby agrees to be employed by the Company upon the terms and
subject to the conditions set forth herein for the period of employment as
set forth in Section 2 hereof (the "Period of Employment").
2. TERM; PERIOD OF EMPLOYMENT. Subject to termination as hereinafter
provided, the Period of Employment hereunder shall be from the date hereof
(the "Effective Date") through the third anniversary of the Effective Date.
Such Period of Employment may be extended for such period and upon such terms
as the parties hereto may hereafter mutually agree.
3. OFFICE AND DUTIES. During the Period of Employment:
(a) the Company shall employ the Employee as Chief Executive
Officer with the responsibilities reasonably prescribed for such position by
the Board of Directors of the Company; and
(b) the Company shall cause Employee to be elected a director of
the Company; and
(c) the Employee shall devote substantially all of his working
time to the business and affairs of the Company; except (i) for vacations of
four (4) weeks per year, (ii) illness or (iii) incapacity. Notwithstanding
the preceding sentence, nothing in this Agreement shall preclude the Employee
from devoting reasonable amounts of time:
(i) for serving as a director or member of a committee of
any organization or entity involving no conflict of interest with the
Company; or
(ii) engaging in charitable and community activities;
PROVIDED, HOWEVER, that such activities do not interfere with the performance
by the Employee of his duties hereunder. In consideration of such employment,
the Employee agrees that he shall not, without the prior written consent of
the Company, directly or indirectly, individually or as a member of any
partnership or joint venture, or as an officer, director, stockholder,
employee or agent of any other person, firm, corporation,
business organization or other entity, engage in any trade or business
activity or pursuit for his own account or for, or on behalf of, any other
person, firm, corporation, business organization or other entity,
irrespective of whether the same competes, conflicts or interferes with that
of the Company or the performance of the Employee's obligations hereunder;
PROVIDED, HOWEVER, that nothing contained herein shall be construed to
require the Employee to change or terminate existing relationships or to
divest himself from existing ownership interests in other entities or to
prevent the Employee from investing in the stock of any corporation, which
does not compete with the Company, which is listed on a national securities
exchange or traded in the over-the-counter market if the Employee does not
and will not as a result of such investment own more than five percent (5%)
of the stock of such corporation ("Permitted Investments"). The Employee
represents and warrants that he is not party to any agreement, oral or
written, which restricts in any way: (a) his ability to perform his
obligations hereunder; or (b) his right to compete with a previous employer
or such employer's business.
4. COMPENSATION AND BENEFITS. In exchange for the services rendered
by the Employee pursuant hereto in any capacity during the Period of
Employment, including without limitation, services as an officer, director,
or member of any committee of the Company or any affiliate, subsidiary or
division thereof, the Employee shall be compensated as follows:
(a) COMPENSATION. The Company shall pay the Employee compensation
equal to at least Two Hundred Twenty-Five Thousand Dollars ($225,000) per
annum as it may be adjusted herein below ("Salary") at a rate of Eighteen
Thousand Seven Hundred Fifty Dollars ($18,750.00) per month (such monthly
amount as the same may be increased from time to time by virtue of the
adjustments set forth hereinbelow shall be defined as the "Monthly
Compensation").
(b) PROFITABILITY BONUS. The Company may pay the Employee a bonus
if, in the sole judgment of the Board of Directors, the earnings of the
Company or the services of the Employee merit such a bonus.
(c) WITHHOLDING AND EMPLOYMENT TAX. Payment of all compensation
hereunder shall be subject to customary withholding tax and other employment
taxes as may be required to be withheld or otherwise imposed pursuant to
applicable laws, rules or regulations to which the Company as an employer is
subject with respect to compensation paid by an employer/corporation to an
employee.
(d) OPTIONS. Effective as of the date of this Agreement, the
Company grants to the Employee a non-qualified, non-statutory option to
purchase two hundred thousand (200,000) shares of its common stock (the
"Common Stock") at an exercise price of $3.563 (the "Option"). The Option
shall have a ten-year term and shall vest and become exercisable with respect
to 33,340 shares of Common Stock immediately, and shall thereafter vest and
be exercisable in increments of 16,666 shares of Common Stock on a
calendar-quarterly basis on the first calendar day of each quarter for the
ten quarters following execution hereof, commencing October 1, 1999.
In the event of termination of the Employee's employment pursuant to
Section 7(a) hereof, the Option shall remain exercisable to the extent vested
through the date of termination hereunder and shall expire as to any portions
thereof which have not vested prior to such date.
In the event of termination of the Employee's employment pursuant to
Sections 7(b) and 7(c) hereof, the Option shall fully vest and become
immediately exercisable upon termination by the Company as set forth in
Section 7(b) and upon delivery by the Employee of the notice set forth in
Section 7(c), respectively.
In the event of a Change in Control , the Option shall fully vest
and become immediately exercisable upon the consummation of such Change of
Control. A Change in Control shall be deemed to occur if: (a) the Company is
merged into another corporation and, after such merger, the voting securities
of the Company outstanding immediately prior to such merger represent less
than 50% of the voting securities of the surviving corporation, or (b) all or
substantially all of the assets of the Company are sold.
5. BUSINESS EXPENSES. The Company shall pay or reimburse the
Employee for all reasonable travel or other expenses incurred by the Employee
in connection with the performance of his duties under this Agreement,
provided that the same are incurred, in accordance with such procedures as
the Company may from time to time establish for employees and as required to
preserve any deductions for federal income taxation purposes to which the
Company may be entitled.
6. OTHER BENEFITS The Company shall provide the Employee health
insurance for the Employee and his dependents, life insurance, and disability
insurance benefits and such other benefits as are generally provided to
executive officers of the Company. The Employee shall have the right to
participate in any and all Company stock option, stock purchase and similar
plans currently in effect or hereafter adopted for which he is eligible.
7. TERMINATION OF EMPLOYMENT. Notwithstanding any other provision of
this Agreement, employment hereunder may be terminated:
(a) By the Company, in the event of the employee's death or
Disability or for "Just Cause." "Just Cause" shall be defined to include: (i)
the Employee's indictment of a crime constituting a felony or conviction of a
crime involving an act or acts of dishonesty, fraud or moral turpitude; or
(ii) violation of any material Company policy or failure to observe any
directive of the Board of Directors. The Employee shall be deemed to have a
"Disability" for purposes of this Agreement if he is unable to perform, by
reason of physical or mental incapacity, his duties or obligations under this
Agreement for a total period of ninety (90) days in any 365-day period. The
Board of Directors shall determine whether and when the Disability of the
Employee has occurred and such determination shall not be arbitrary or
unreasonable. The Company shall by written notice to the Employee given
within thirty (30) days after discovery of the occurrence of an event or
circumstance which constitutes "Just Cause," specify the event or
circumstance giving rise to the Company's exercise of its right under Section
7(a) and, with respect to Just Cause arising under Section 7(a)(i), the
Employee's employment hereunder shall be deemed terminated as of the date of
such notice; with respect to Just Cause arising under Sections 7(a)(ii) the
Company shall provide the Employee with thirty (30) days written notice of
such violation or failure and the Employee shall be given reasonable
opportunity during such thirty (30) day period to cure the subject violation
or failure; or
(b) By the Company, in its sole and absolute discretion, provided
that in such event the Company shall, as liquidated damages or severance pay,
or both, pay to the Employee an amount equal to the Employee's Monthly
Compensation (as defined in Section 4(a) hereof) for shorter of (a) the
remaining term hereof or (b) two years (the "Remaining Compensation"); or
(c) By the Employee, upon any violation of any material provision
of this Agreement by the Company, which violation remains unremedied for a
period of thirty (30) days after written notice of the same is delivered to
the Company by the Employee , provided that in such event, the Company shall,
as liquidated damages or severance pay, or both, pay to the Employee the
Remaining Compensation; or
(d) Failure to timely make more than one monthly payment of
Remaining Compensation under Section 7(b) or 7(c) hereof shall result in the
Company being obligated to pay the balance of the Remaining Compensation to
the Employee in a lump sum distribution and the Option under Section 4(d)
shall fully vest as set forth herein.
8. NON-COMPETITION. Notwithstanding any earlier termination, during
the Period of Employment and for one (1) year thereafter:
(a) The Employee shall not, anywhere in North America or in any
other place or venue where the Company or any affiliate, subsidiary or
division thereof now conducts or operates, or may conduct or operate its
business in the future, directly or indirectly, individually or as a member
of any
partnership or joint venture, or as an officer, director, stockholder,
employee or agent of any other person, firm, corporation, business
organization or other entity, participate in, engage in, solicit or have any
financial or other interest in any activity or any business or other
enterprise in the field of marketing, distribution, sale, production,
research or development of Internet related access services or any services
or products primarily using the Internet as a means of delivery, or in any
other field which is or may be reasonably expected to become competitive with
the current or contemplated business of the Company or any affiliate,
subsidiary or division thereof (unless the Board of Directors shall have
authorized such activity and the Company shall have consented thereto in
writing), as an individual or as a member of any partnership or joint
venture, or as an officer, director, stockholder, investor, employee or agent
of any other person, firm, corporation, business organization or other
entity; PROVIDED, HOWEVER, that nothing contained herein shall be construed
to prevent the employee from investing in Permitted Investments; and
(b) The Employee shall not: (i) solicit or induce any employee of
the Company to terminate his employment or otherwise leave the Company's
employ or hire any such employee (unless the Board of Directors shall have
authorized such employment and the Company shall have consented thereto in
writing); or (ii) contact, service or solicit any clients, customers,
vendors, suppliers or other accounts of the Company, either as an individual
or as a member of any partnership or joint venture, or as an officer,
director, stockholder, investor, employee or agent of any other person, firm,
corporation, business organization or other entity with respect to any
business, matter, service or product related to similar, comparable to or
otherwise competitive with that which is provided by the Company.
9. CONFIDENTIAL INFORMATION. The parties hereto recognize that it is
fundamental to the business and operation of the Company, its affiliates,
subsidiaries and divisions thereof to preserve the specialized knowledge,
trade secrets, and confidential information of the foregoing concerning the
Internet services industry. The strength and good will of the Company is
derived from the specialized knowledge, trade secrets, and confidential
information generated from experience through the activities undertaken by
the Company, its affiliates, subsidiaries and divisions thereof. The
disclosure of any of such information and the knowledge thereof on the part
of competitors would be beneficial to such competitors and detrimental to the
Company, its affiliates, subsidiaries and divisions thereof, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical techniques,
concepts, ideas, process developments (whether or not patentable), customer
and client agreements, vendor and supplier agreements and similar items or
technologies. By reason of his being an employee of the Company, in the
course of his employment, the Employee has or shall have access to, and has
obtained or shall obtain, specialized knowledge, trade secrets and
confidential information such as that described herein about the business and
operation of the Company, its affiliates, subsidiaries and divisions thereof.
Therefore, the Employee hereby agrees as follows, recognizing and
acknowledging that the Company is relying on the following in entering into
this Agreement:
(a) The Employee hereby sells, transfers and assigns to the
Company, or to any person or entity designated by the Company, any and all
right, title and interest of the Employee in and to all inventions, ideas,
disclosures and improvements, whether patented or unpatented, and
copyrightable material, made or conceived by the Employee solely or jointly,
in whole or in part, during the term hereof which: (i) relate to methods,
apparatus, designs, products, processes or devices distributed, sold, leased,
used or under construction or development by the Company or any affiliate,
subsidiary or division thereof; or (ii) otherwise relate to or pertain to the
business, operations or affairs of the Company or any affiliate, subsidiary
or division thereof. The Company shall acquire all right, title and interest
to the Employee's inventions, ideas, disclosures and improvements whether
made or conceived during the term hereof or before. The Employee shall make
adequate written records of all inventions (which records shall be the
Company's property) and shall communicate promptly and disclose to the
Company, in such form as the Company requests, all information, details and
data pertaining to such inventions, ideas, disclosures and improvements.
Whether during the Period of Employment or thereafter, the Employee shall
execute and deliver to the Company such formal transfers and assignments and
such other papers and documents as may be required of the Employee to permit
the Company or any person or entity designated by the Company to file,
enforce and prosecute the patent applications relating to any of the
foregoing and, as to copyrightable material, to obtain copyright thereon; and
(b) Notwithstanding any earlier termination, during the Period of
Employment and thereafter, the Employee shall keep secret and retain in
strict confidence, and shall not, except in furtherance of the Company's
business, use, disclose to others, or publish any information, other than
information which is in the public domain or becomes publicly available
through no wrongful act on the part of the Employee, which information shall
be deemed not to be confidential information, relating to the business,
operation or other affairs of the Company, its affiliates, subsidiaries and
divisions thereof, including but not limited to confidential information
concerning the marketing practices, pricing practices, costs, profit margins,
products, methods, guidelines, procedures, engineering designs and standards,
design specifications, analytical techniques, technical information,
customer, client, vendor or supplier information, employee information, and
any and all other confidential information acquired by him in the course of
his past or future services for the Company or any affiliate, subsidiary or
division thereof. The Employee shall hold as the Company's property all
notes, memoranda, books, records, papers, letters, formulas and other data
and all copies thereof and therefrom in any way relating to the business,
operation or other affairs of the Company, its affiliates, subsidiaries and
divisions thereof, whether made by him or otherwise coming into his
possession. Upon termination of his employment or upon the demand of the
Company, at any time, the Employee shall deliver the same to the Company
within twenty-four (24) hours of such termination or demand.
10. REASONABLENESS OF RESTRICTIONS. The Employee hereby agrees that
the restrictions in this Agreement, including without limitation, those
relating to the duration of the provisions hereof and the territory to which
such restrictions apply, are necessary and fundamental to the protection of
the business and operation of the Company, its affiliates, subsidiaries and
divisions thereof, and are reasonable and valid, and all defenses to the
strict enforcement thereof by the Employee are hereby waived by the Employee.
11. REFORMATION. In the event that a court of competent jurisdiction
determines that the non-compete or the confidentiality provisions hereof are
unreasonably broad or otherwise unenforceable because of the length of their
respective terms or the breadth of their territorial scope, or for any other
reason, the parties hereto agree that such court may reform the terms and/or
scope of such covenants so that the same are reasonable and, as reformed,
shall be enforceable.
12. REMEDIES. Subject to Section 14 below, in the event of a breach
of any of the provisions of this Agreement, the non-breaching party shall
provide written notice of such breach to the breaching party. The breaching
party shall have thirty (30) days after receipt of such notice in which to
cure its breach. If, on the thirty-first (31st) day after receipt of such
notice, the breaching party shall have failed to cure such breach, the
non-breaching party thereafter shall be entitled to seek damages. It is
acknowledged that this Agreement is of a unique nature and of extraordinary
value and of such a character that a breach hereof by the Employee shall
result in irreparable damage and injury to the Company for which the Company
may not have any adequate remedy at law. Therefore, if, on the thirty-first
(31st) day after receipt of such notice, the breaching party shall have
failed to cure such breach, the non-breaching party shall also be entitled to
seek a decree of specific performance against the breaching party, or such
other relief by way of restraining order, injunction or otherwise as may be
appropriate to ensure compliance with this Agreement. The remedies provided
by this Section 13 are non-exclusive and the pursuit of such remedies shall
not in any way limit any other remedy available to the parties with respect
to this Agreement, including, without limitation, any remedy available at law
or equity with respect to any anticipatory or threatened breach of the
provisions hereof.
13. CERTAIN PROVISIONS; SPECIFIC PERFORMANCE. In the event of a
breach by the Employee of the non-competition or confidentiality provisions
hereof, such breach shall not be subject to the cure provision of Section 13
above and the Company shall be entitled to seek immediate injunctive relief
and a decree of specific performance against the Employee. Such remedy is
non-exclusive and shall be in addition to any other remedy to which the
Company or any affiliate, subsidiary or division thereof may be entitled.
Monetary breaches by the Company shall not be subject to the notice and cure
provisions hereunder.
14. CONSOLIDATION; MERGER; SALE OF ASSETS. Nothing in this Agreement
shall preclude the Company from combining, consolidating or merging with or
into, transferring all or substantially all of its
assets to, or entering into a partnership or joint venture with, another
corporation or other entity, or effecting any other kind of corporate
combination, provided that, the corporation resulting from or surviving such
combination, consolidation or merger, or to which such assets are
transferred, or such partnership or joint venture assumes this Agreement and
all obligations and undertakings of the Company hereunder. Upon such a
consolidation, merger, transfer of assets or formation of such partnership or
joint venture, this Agreement shall inure to the benefit of, be assumed by,
and be binding upon such resulting or surviving transferee corporation or
such partnership or joint venture, and the term "Company," as used in this
Agreement, shall mean such corporation, partnership or joint venture, or
other entity and subject to the provisions of this Agreement relating to the
Change of Control this Agreement shall continue in full force and effect and
shall entitle the Employee and his heirs, beneficiaries and representatives
to exactly the same compensation, benefits, perquisites, payments and other
rights as would have been their entitlement had such combination,
consolidation, merger, transfer of assets or formation of such partnership or
joint venture not occurred.
15. SURVIVAL. Sections 9 through 14 shall survive the termination
for any reason of this Agreement (whether such termination is by the Company,
by the Employee, upon the expiration of this Agreement by its terms or
otherwise); PROVIDED, HOWEVER, that in the event that the Company ceases to
exist and neither an affiliate, subsidiary or division thereof has assumed,
at its option, the obligations of the Company hereunder, the Employee shall
no longer be bound by the Non-Competition provision set forth in Section 9
hereof.
16. SEVERABILITY. The provisions of this Agreement shall be
considered severable in the event that any of such provisions are held by a
court of competent jurisdiction to be invalid, void or otherwise
unenforceable. Such invalid, void or otherwise unenforceable provisions shall
be automatically replaced by other provisions which are valid and enforceable
and which are as similar as possible in term and intent to those provisions
deemed to be invalid, void or otherwise unenforceable. Notwithstanding the
foregoing, the remaining provisions hereof shall remain enforceable to the
fullest extent permitted by law.
17. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
agreement between the Company and the Employee with respect to the subject
matter hereof and thereof. This Agreement may not be amended, changed,
modified or discharged, nor may any provision hereof be waived, except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any amendment, waiver, change, modification or discharge is
sought. No course of conduct or dealing shall be construed to modify, amend
or otherwise affect any of the provisions hereof.
18. NOTICES. All notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
physically delivered, delivered by express mail or other expedited service or
upon receipt if mailed, postage prepaid, via first class mail as follows:
(a) To the Company: I-Link Incorporated
13751 So. Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: General Counsel
(b) To the Employee: Xxxx Xxxxxxx
0000 Xxxxx 0000 Xxxx
Xxxxx, Xxxx 00000
and/or to such other persons and addresses as any party hereto shall have
specified in writing to the other.
19. ASSIGNABILITY. This Agreement shall not be assignable by the
Employee. This Agreement shall be assignable by the Company to any affiliate,
subsidiary or division thereof and to any successor in interest, subject to
the Employee's right to terminate employment hereunder pursuant to Section
7(c) above.
20. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Utah, without regard to the principles of
conflicts of laws thereof.
21. WAIVER AND FURTHER AGREEMENT. Any waiver of any breach of any
terms or conditions of this Agreement shall not operate as a waiver of any
other breach of such terms or conditions or any other term or condition
hereof, nor shall any failure to enforce any provision hereof operate as a
waiver of such provision or of any other provision hereof. Each of the
parties hereto agrees to execute all such further instruments and documents
and to take all such further action as the other party may reasonably require
in order to effectuate the terms and purposes of this Agreement.
22. HEADINGS OF NO EFFECT. The paragraph headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
23. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts each of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
to be effective as of the date first above written.
THE COMPANY
I-LINK INCORPPORATED
By:
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Xxxxx X. Xxxxx, Secretary
THE EMPLOYEE
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Xxxx Xxxxxxx