EMPLOYMENT/STOCK REPURCHASE AGREEMENT
EMPLOYMENT/STOCK
REPURCHASE AGREEMENT
This
Employment/Stock Repurchase Agreement (hereinafter “Agreement” is entered into
on this 13th
day of
October, 1999 by XXXXX X. XXXX (hereinafter “Executive”) and MGC COMMUNICATIONS,
INC., a Nevada corporation (hereinafter the “Company”). Executive and Company
are collectively designated herein as the “Parties” and “Party” shall mean
either one of the Parties.
The
Parties, for and in consideration of the promises, covenants, terms, conditions
and obligations hereinafter set forth, agree as follows:
1.
Employment.
Company
hereby employs Executive and Executive hereby accepts employment by Company
upon
all terms and conditions as are hereinafter set forth.
2.
Scope
of Service.
A.
Executive shall be employed by Company no later than November 1, 1999, as
its
President and Chief Executive Officer. Executive shall report directly and
solely to Company’s Board of Directors. The duties and responsibilities of
Executive as President and Chief Executive Officer shall be those of the
chief
executive officer of similar companies and as defined in the by-laws of Company,
and shall be without consideration of other positions Executive may hold
with
Company. Executive’s services are mutually agreed to be unique personal
services. Executive acknowledges that Company is relying upon Executive’s
experience, expertise and other qualifications in entering into this Agreement.
Executive shall not assign or delegate any right, obligation or duty hereunder
to any other person or entity without the express written consent of the
Company.
B.
During
Executive’s period of service hereunder, Executive agrees to perform such
services not inconsistent with his position as shall from time to time be
assigned to him by Company’s Board of Directors. During the term of this
Agreement, except for disability, illness and vacation periods, Executive
shall
devote his full productive time, attention and energies to the position of
President and Chief Executive Officer of Company.
C.
Executive’s expenditure of reasonable amounts of time in connection with outside
activities, not competitive with the business of Company, such as outside
directorships or charitable activities, shall not be considered in contravention
of this Agreement so long as such activities do not materially interfere
with
his performance of this Agreement. Further, it is understood and agreed by
the
Parties hereto that Executive is entitled to engage in passive and personal
investment activities not materially interfering with his performance of
this
Agreement.
D.
Company shall cause Executive to be elected to Company’s Board of Directors and
to be nominated for reelection to the Board so long as he continues to serve
as
President and Chief Executive Officer of Company.
3.
Term
of Agreement.
This
Agreement shall be effective as of a date, not later than November 1, 1999,
mutually agreeable to the Parties (the “Effective Date”) and Executive’s
employment hereunder shall continue until October 31, 2002, unless sooner
terminated by either Party as provided in Item 11 herein. Thereafter, this
Agreement shall be automatically renewed on a year-to-year basis after the
expiration of the initial or any subsequent term of this Agreement unless
terminated by either Party as provided in Item 11 hereof.
4.
Compensation.
During
the term of this Agreement, Company agrees to pay to Executive, and Executive
agrees to accept from Company, in full payment for services rendered by
Executive and work to be performed by him under the terms of this Agreement,
the
following:
A.
An
annual base salary (“Base Salary”) of Five Hundred Thousand Dollars
($500,000.00), payable in installments in accordance with Company’s payroll
practices. The base salary may be increased annually in the discretion of
the
Board of Directors of Company based on Company’s performance and Executive’s
personal accomplishments.
B.
Executive shall be entitled to a bonus of up to one hundred percent (100%)
of
his Base Salary each calendar year based on either (i) Company’s achievement of
certain annual targets to be established by Company’s Board of Directors in
conjunction with the establishment of Company’s operating budget each year, or
(ii) in the event such targets are not met or an additional bonus is warranted,
in the discretion of Company’s Board of Directors.
C.
Company shall pay Executive a cash signing bonus of One Million Dollars
($1,000,000) payable within fifteen (15) days of Executive’s commencement of
employment hereunder. The cash signing bonus shall be repaid by Executive
to
Company in full in the event of Executive’s resignation from Company without
“Good Reason” (as defined in Item 11B) or termination for “Cause” (as defined in
Item 11A) before completion of three (3) years of employment with Company.
In
such event, the repayment of the cash signing bonus shall be made within
thirty
(30) days of Executive’s termination of employment.
D.
In the
event Executive’s employment with Company shall cease within one (1) year after
a “Change of Control” (as defined in Item 10), shall be terminated by Company
without Cause or shall be terminated by Executive with Good Reason, Company
shall pay to Executive severance pay in an aggregate amount (not less than
One
Million Dollars ($1,000,000)) equal to two (2) times the total amount of
Base
Salary and incentive bonus paid by Company to Executive during the twelve
(12)
month period immediately preceding the date of his termination of employment.
Such amount shall be paid by Company to Executive in twenty-four (24) equal
monthly installments beginning on the date that is one (1) month after the
date
of his termination of employment.
E.
Company shall also reimburse Executive for all reasonable and necessary expenses
actually incurred by Executive in performing services hereunder to the extent
approved by Company. Executive shall prepare and submit to Company a periodic
statement of charges in such detail and supported by such receipts, evidence
and
documentation as Company may reasonably require.
5.
Fringe
Benefits.
A.
Company shall provide Employee such vacation time, sick leave and fringe
benefits, including but not limited to participation in any pension, 401(k),
health insurance and employee benefit plans that may be maintained by Company
from time to time as are made generally available to other senior management
employees of Company in accordance with Company policies. Company reserves
the
right to change the benefits available under its benefit plans at any time
or
times.
B.
Company shall pay on behalf of Executive his automobile expenses and the
annual
dues for Executive’s membership in a country club which shall be subject to
Company’s approval if the aggregate of such automobile expenses and dues are in
excess of $3,000 per month, which approval shall not be unreasonably
withheld.
C.
Company shall pay Executive’s living expenses (including living quarters and
local transportation costs) while Executive is in Las Vegas for business
and
shall pay Executive’s travel costs to and from Las Vegas on business. Any such
amounts paid by Executive shall be reimbursed by Company upon presentation
of
receipts for such expenses.
6.
Deductions.
Deductions shall be made from Executive’s salary for social security, Medicare,
federal and state withholding taxes, and any other such taxes as may from
time
to time be required by governmental authority.
7.
Fiduciary
Relationship.
Both
Parties acknowledge and agree that a fiduciary and confidential relationship
has
commenced and will continue to exist between them and that said relationship
will continue during the term of this Agreement.
8.
Stock
Options.
A.
Executive shall be eligible to participate in any stock option plans maintained
by Company and any additional or successor plans created from time to
time.
B.
As of
the date hereof, Executive shall be granted a stock option for the purchase
of
400,000 shares of Company’s Common Stock. Such option shall: (i) have an
exercise price equal to $20.00 per share; (ii) vest in four (4) equal annual
installments at the rate of 25% on each of the first four anniversaries of
the
grant; (iii) accelerate and become fully vested in the event of a Change
of
Control (as defined in Item 10 hereof) or in the event Executive’s employment is
terminated by him with Good Reason as provided in Item 11B; and (iv) be
non-qualified options to the extent required by the Internal Revenue
Code.
C.
As of
the first anniversary of the Effective Date, Executive shall, if he is then
employed by Company, be granted a stock option for the purchase of an additional
200,000 shares of Company’s Common Stock. Such option shall: (i) have an
exercise price equal to the greater of $30.00 per share or the closing price
of
Company’s Common Stock on the date of grant as reported in the Nasdaq National
Market; (ii) vest in four (4) equal annual installments at the rate of 25%
on
each of the first four anniversaries of the grant; (iii) accelerate and become
fully vested in the event of a Change of Control (as defined in Item 10 hereof)
or in the event Executive’s employment is terminated by him with Good Reason as
provided in Item 11B; and (iv) be non-qualified options to the extent required
by the Internal Revenue Code.
D.
In
addition to the stock options grants pursuant to Paragraphs B and C above,
Executive shall be eligible for additional grants on an annual
basis.
9.
Stock
Sale and Company Option to Repurchase Executive’s Shares.
A.
Upon
the Effective Date, Company shall sell to Executive 150,000 shares of its
common
stock (the “Note Shares”) for a purchase price equal to 150,000 multiplied by
the closing price of Company’s Common Stock as of the date of this Agreement as
reported in the Nasdaq National Market.
B.
The
purchase price for the Note Shares shall be paid by Executive’s execution and
delivery to Company of a non-recourse promissory note (the “Note”) in favor of
Company. The Note will be secured by the Note Shares pursuant to a stock
pledge
agreement in a form reasonably agreeable to the Parties. The term of the
Note
will be three (3) years, and the Note will bear interest at the rate of 7.5%
per
annum on the unpaid balance, with no interest payment required prior to the
maturity of the Note. The Note may be prepaid at any time without penalty,
and
prepayment will be required within 30 days after termination of employment
by
Company for Cause pursuant to Item 11A or by Executive’s resignation without
Good Reason. Executive acknowledges that his holding period for Note Shares
will
not begin until he has paid for such shares for purposes of determining whether
he has met the one-year holding period required before being able to sell
such
shares under Rule 144 under the Securities Act of 1933.
C.
Company shall forgive the Note in full (principal and interest) in the event:
(i) Executive is in the continuous employment of Company during the three
(3)
year period beginning on the Effective Date, (ii) Executive’s employment with
Company is terminated by Company without Cause prior to the date that is
three
(3) years after the Effective Date, (iii) Executive’s employment with Company is
terminated by Executive with Good Reason, (iv) Executive’s employment is
terminated as a result of disability, or (v) of a Change of Control (as defined
in Item 10 hereof).
D.
If
Executive is at any time prior to the date that is three (3) years after
the
Effective Date, not an employee of Company for any reason whatsoever other
than
as a result of termination of employment by Company without Cause, termination
of employment by Executive with Good Reason, death, disability or a Change
of
Control (the date of such termination of employment being referred to herein
as
the “Termination Date”), then Company shall have the option to purchase,
whereupon Executive shall be obligated to sell, any portion or all of the
Note
Shares in Company owned by Executive or any Affiliate of his on the Termination
Date. In such event, such Note Shares shall be sold free and clear of any
and
all liens and encumbrances. The purchase price for the Note Shares shall
be the
amount per share paid by executive for such Note Shares (including any interest
paid or accrued on the Note with respect to the Note Shares being
repurchased).
E.
The
option provided herein shall be exercised, if at all, by delivery of written
notice by Company within ninety (90) days after the Termination
Date.
F.
The
closing of the purchase and sale hereunder shall occur within thirty (30)
days
following the exercise of said option and at a time and place as Company
may
designate by written notice to Executive at least five (5) days in advance
of
such closing. The parties hereto hereby agree to execute any and all instruments
and documents to transfer full and complete title to such Note Shares to
effectuate the foregoing. At the closing, the purchase price shall be paid
by
the cancellation of the Note up to but not in excess of the purchase price
for
the Note Shares being repurchased with the balance of such purchase price
payable in cash.
G.
The
repurchase price per share set forth in this Item shall be adjusted
appropriately in the event of any stock split, stock dividend or other similar
change in the capitalization of Company. The Board of Directors of Company
shall
make the determination of any such adjustments and shall provide Executive
with
written notice thereof.
H.
All
certificates representing Note Shares shall bear the following restrictive
legend (in addition to any other legends required to be placed
thereon):
The
Shares represented by this certificate are subject to repurchase by Company
pursuant to the terms of an Employment/Stock Repurchase Agreement dated October
13, 1999, a copy of which is on file with Company.
10.
Change
of Control.
A.
In the
event of a Change of Control (as defined in Paragraph B below), Executive’s
obligation to repay his cash signing bonus shall terminate, the stock options
theretofore granted to Executive pursuant to Item 8B and 8C shall become
immediately vested and Executive’s obligations to repay the Note referenced in
Item 10B shall be forgiven as provided herein.
B.
For
all purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if: (i) by any method, transaction or series of related transactions
more than 50% of the outstanding shares of Company or beneficial ownership
thereof are acquired within a period of one year by persons other than the
members of Company’s Board of Directors, those persons who were more than 5%
stockholders of Company prior to the Effective Date, employees of Company
and
any of their immediate family members and affiliates and there is a change
in
the membership of Company’s Board within a one year period thereafter such that
fewer than 50% of the members of the Board are persons who served in such
position prior to the change in ownership; (ii) there is a merger or
consolidation of Company in which Company is not the continuing or surviving
entity or pursuant to which Company’s shares are converted into cash, securities
or other property, or (iii) Company sells, leases or exchanges all or
substantially all of its assets or Company’s stockholders approve the
liquidation or dissolution of Company.
C.
In the
event any payment or financial accommodation under this Agreement results
in a
liability of Executive for excise taxes based on the application of Sections
4999 and 280G of the Internal Revenue Code, as amended, then Company shall
pay
to Executive such additional amount (the “Additional Payment”) as shall enable
Executive to pay all excise taxes attributable to payments under this Paragraph
D (including any Additional Payment) and all income taxes on the Additional
Payment so that Executive will be in the same financial position after payment
of the Section 4999 excise tax and income taxes on the Additional Payment
that
he would have been had the golden parachute rules not been applied.
11.
Duration
of Services.
A.
Termination
for Cause.
Company
may terminate this Agreement for “Cause”, effective immediately upon delivery of
notice to Executive. For all purposes of this Agreement, “Cause shall exist only
in the event Executive (i) shall be arrested for commission of a felony or
other
act involving moral turpitude, (ii) shall commit any act, specifically including
but not limited to drug or alcohol abuse, which is materially and objectively
harmful to Company or its business, (iii) shall commit any act of fraud,
dishonesty or theft, whether or not related to his activities on behalf of
Company, or (iv) shall fail to comply with any material provision of this
Agreement and Executive has not cured such failure within twenty (20) days
after
written notice of such noncompliance has been given by Company to Executive,
or
if such failure is not capable of being cured in such time, a cure shall
not
have been diligently initiated by Executive within such twenty (20) day period
and Executive shall not have cured such failure within forty (40) days
thereafter; provided, however, that in no event shall Executive have the
right
to cure more than two (2) such failures under clause (iv) in any one calendar
year.
B.
Termination
by Executive for Good Reason.
Executive may terminate this Agreement for “Good Reason” by giving to Company
sixty (60) days written notice and such termination shall be effective on
the
sixtieth (60th)
day
following the date of such notice; provided, however, that Company may, in
its
sole and absolute discretion, accelerate the effective date of Executive’s
termination to any date following the date such of notice. For all purposes
of
this Agreement, “Good Reason” shall mean (i) the failure of Company to comply
with any material provision of this Agreement and Company has not cured such
failure within twenty (20) days after written notice of such noncompliance
has
been given by Executive to Company, or if such failure is not capable of
being
cured in such time, a cure shall not have been diligently initiated by Company
within such twenty (20) day period and Company shall not have cured such
failure
within forty (40) days thereafter; provided, however, that in no event shall
Company have the right to cure more than two (2) such failures under this
clause
(i) in any one calendar year, or (ii) if any of the following shall occur
without Executive’s consent and shall not be remedied within thirty (30) days
after written notice of objection has been delivered by Executive to
Company:
(a)
Executive is not elected or retained as President and Chief Executive Officer
and a director of Company during the term of this Agreement;
(b)
any
assignment to Executive of any duties other than those reasonably contemplated
by Item 2 of this Agreement;
(c)
any
removal of Executive from responsibilities substantially similar to those
described or contemplated in Item 2 hereof; or
(d)
Company’s Board of Directors requires Executive to relocate or transfer Company
headquarters or his principal place of residence away from the Rochester,
New
York area.
C.
Termination
Without Cause.
1.
Executive may terminate this Agreement by giving to Company ninety (90) days
written notice and such termination shall be effective on the ninetieth
(90th)
day
following the date of such notice; provided, however, that Company may, in
its
sole and absolute discretion, accelerate the effective date of Executive’s
voluntary termination to any date following the date of such
notice.
2.
Company may, without cause, terminate this Agreement at any time by giving
to
Executive ninety (90) days written notice and such termination shall be
effective on the ninetieth (90th)
day
following the date of such notice. At the option of Company, Executive shall
immediately cease performing his duties hereunder upon receipt of the
notice.
D.
Disability.
If
Executive shall fail or be unable to perform the services required hereunder
because of any physical or mental infirmity, and such failure or inability
shall
continue for sixty (60) consecutive days, Company shall have the right to
terminate Executive’s employment after delivering written notice thereof to
Executive. Company shall in no way be obligated to compensate Executive after
the expiration of the initial sixty (60) days of disability.
E.
Death.
Executive’s employment shall terminate upon his death.
F.
Termination
of Company’s Obligations.
Company’s obligations under Item 4A and B of this Agreement shall terminate upon
the expiration of the term of this Agreement without renewal or upon termination
of Executive’s employment as provided in this Item.
G.
Termination
of Executive’s Obligations.
Executive’s obligations under Items 12, 13 and 15 of this Agreement shall
survive the expiration of the term of this Agreement without renewal and
termination of Executive’s employment as provided in such Items.
12.
Non-Competition.
A.
Executive and Company agree that Company’s activities are of a unique and
special nature and that if Executive’s services were used in competition with
Company, such use would cause serious and possibly irreparable harm to Company.
Accordingly, Executive agrees to the commitments of non-competitive activities
as described herein:
1.
Executive agrees that during the period of employment with Company and for
a
period of twelve (12) months after the last day of Executive’s employment with
Company, that Executive shall not directly or indirectly: (a) call on, solicit,
take away or attempt to take away for the benefit of Executive or of any
other
person or entity, any customer or supplier or prospective customer or supplier
of Company, or (b) solicit, take away, or attempt to take away, for the benefit
of Executive or of any other person or entity, any employee, officer or
consultant of Company.
2.
Executive agrees that during the period of employment with Company and for
a
period of twelve (12) months after the last day of Executive’s employment with
Company, that Executive shall not directly or indirectly engage, either as
a
consultant, independent contractor, proprietor, stockholder, partner, owner,
officer, director, employee or otherwise in any business which (a) engages
in
any business which competes with the business of Company within the “Prohibited
Geographic Area” (as defined below) as such business is conducted or planned to
be conducted as of the date of termination of employment, or (b) calls on,
solicits, takes away, sells to, or otherwise deals with any customers, suppliers
or contacts of Company in a way that would adversely affect Company’s business,
or (c) which otherwise competes with Company within the Prohibited Geographic
Area. For purposes of this Agreement, the “Prohibited Geographic Area” shall
mean the geographic area within the United States where Company shall then
be
doing business or shall then be actively planning to do business.
B.
The
parties hereto agree that: (i) the covenants and agreements of Executive
contained in Paragraph A of this Item are reasonably necessary to protect
the
interests of Company in whose favor said covenants and agreements are imposed
in
light of the nature of Company’s business and the professional involvement of
Executive in such business; (ii) the restrictions imposed by Paragraph A
of this
Item are not greater than are necessary for the protection of Company in
light
of the substantial harm that Company will suffer should Executive breach
any of
the provisions of said covenants or agreements; (iii) the covenants and
agreements of Executive contained in Paragraph A of this Item have been
independently negotiated between the parties hereto and have served as a
material inducement for Company to enter into this Agreement; (iv) the periods
of restriction and restricted area referred to in Paragraph A of this Item
are
fair and reasonable in that they are reasonably required for the protection
of
Company; and (v) the nature, kind and character of the activities Executive
is
prohibited to engage in are reasonable and necessary to protect Company in
that
Company will rely on Executive for many important aspects of its
business.
C.
Executive acknowledges that a material breach by him of any part of Paragraph
A
of this Item will result in irreparable and continuing damage to Company
and any
material breach or threatened breach of the covenants provided in Paragraph
A of
this Item shall be subject to specific performance by temporary as well as
permanent injunction or any other equitable remedies of any court of competent
jurisdiction.
D.
The
covenants and agreements on the part of Executive contained in Paragraph
A of
this Item shall be construed as agreements independent of any other agreement
between Executive and Company. The existence of any claim or cause of action
of
Executive against Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Company of each of such
covenants and agreements or otherwise affect the remedies to which Company
is
entitled hereunder.
E.
If the
provisions of this Item should ever be adjudicated to exceed the time,
geographic or other limitations permitted by applicable law in any jurisdiction,
then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic or other limitation permitted by applicable
law.
F.
Nothing contained in this Item shall restrict Executive from being a stockholder
(but not an officer, director, employee, consultant or advisor) of any
corporation that directly or indirectly competes with Company provided the
stock
of such competing corporation is publicly held and listed on a national stock
exchange.
13.
Professional
Responsibility.
A.
Executive agrees that he will provide in connection with the performance
of all
services under this Agreement the standards of care, skill and diligence
normally provided by competent professionals in the performance of services
similar to that contemplated by this Agreement.
B.
Executive represents that he has no conflicts of interest in rendering his
professional services to Company.
14.
Confidential
Information, Confidential Material.
A.
“Confidential Information” as used herein, whether or not reduced to writing and
in any and all stages of development, shall include all relevant information
concerning, in use or under consideration with respect to intended research
or
production areas of interest of Company, but shall not be limited to designs,
procedures, experiments, protocols, test results, specifications, documentation,
identity of and class of agreements with third parties, costs, profits,
revenues, financial statements, and any and all other information, data,
financial information, names or lists of names of suppliers and customers,
interpretations, analyses, surveys, ideas, strategies, forecasts, discoveries,
marketing plans, development plans, techniques, processes, specialized software
and databases, know-how and trade secrets which are (a) directly or indirectly
disclosed or revealed to Executive by Company or any of its officers, employees,
agents, attorneys or representatives, or (b) created, developed, conceived
or
originated by Executive at any time during his employment hereunder.
Notwithstanding the foregoing, any and all such information which Executive
can
show was previously known to him or which may constitute common and/or public
knowledge shall be specifically excluded from this definition of “Confidential
Information”.
B.
“Confidential Material” as used herein shall be any and all tangible materials
and objects which embody Confidential Information or from which Confidential
Information can be read, reproduced, developed or utilized.
C.
Anything which is legitimately and lawfully disclosed to Executive by a third
party shall be released from the provisions and restrictions of this Agreement,
but only to the extent necessary to permit such use and disclosure as are
permitted by said third party.
15.
Confidentiality.
A.
Except
in connection with Company’s business or as first authorized by Company,
Executive shall not:
1.
directly or indirectly disclose, reveal, report, duplicate or transfer any
Confidential Information or Confidential Material to any other person or
entity;
2.
directly or indirectly aid, encourage, direct or allow any other person or
entity to gain possession of or access to Confidential Information or
Confidential Material;
3.
directly or indirectly copy or reproduce Confidential Material or create
Confidential Material from Confidential Information; or
4.
directly or indirectly use, sell or exploit any Confidential Information
or any
Confidential Material or aid, encourage, direct or allow any other person
or
entity to use, sell or exploit any Confidential Information or Confidential
Material.
B.
Executive hereby acknowledges and agrees that (i) Company has expended
considerable and substantial time, effort and capital resources to develop
the
Confidential Information, (ii) the Confidential Information is innovative
and
must receive confidential treatment to protect Company’s competitive position in
the market and Company’s proprietary interest therein from irreparable damage,
(iii) Executive, by virtue of his relationship with Company, will have access
to
the Confidential Information, and (iv) the Confidential Information and all
physical embodiments or other repositories of the same shall be and at all
times
remain the sole and exclusive property of Company.
C.
In the
event of a breach or threatened breach by Executive of the provisions of
this
Item, Company shall be entitled to an injunction restraining Executive from
disclosing, in whole or in part, any Confidential Information, or from rendering
any services to any person, firm, corporation, association or other entity
to
whom such Confidential Information, in whole or in part, has been disclosed
or
is threatened to be disclosed.
D.
Upon
receipt of a written request by Company, Executive agrees to surrender and
return to Company all documents, records, memoranda, notebooks and any other
repositories of Confidential Information of every character or
description.
16.
Miscellaneous.
A.
This
Agreement may only be amended in writing, signed by each Party hereto. The
terms
of this Agreement shall be interpreted under the laws of the State of
Nevada.
B.
Executive agrees to execute such additional documents and do such further
acts
and deeds as may be necessary or desirable to effectuate the purposes hereof
and
for the perfection of the rights and interests of Company expressed
herein.
C.
Each
of the undersigned further agrees that any action or proceeding brought or
initiated in respect of this Agreement may be brought or initiated in the
State
Court of Xxxxx County, Nevada, or in federal district court in Nevada and
each
of the undersigned consents to the exercise of personal jurisdiction and
the
placement of venue in any of such courts, in any such action or proceeding
and
further consents that service of process may be effected in any such action
or
proceeding in such manner as may be permitted by law. Each of the undersigned
further agrees that no such action shall be brought against any Party hereunder
except in one of the courts above named.
D.
For
all purposes of this Agreement, action or consent by Company shall require
the
action or consent of Company’s Board of Directors without participation by
Executive.
E.
The
waiver by either Party of any provision of this Agreement shall not operate
as,
or be construed to be, a waiver of any subsequent breach hereof.
F.
This
Agreement shall inure to the benefit of and be binding upon the Parties hereto
and their respective successors and assigns.
G.
This
Agreement supersedes any and all other agreements, either oral or in writing,
between the Parties hereto with respect to the subject matter hereof (including
but not limited to that certain offer letter dated as of October 8, 1999)
and
this Agreement contains all the covenants and agreements among the Parties
with
respect to such subject matter.
H.
The
headings contained in this Agreement are for reference purposes only and
shall
not affect in any way the meaning or interpretation of this
Agreement.
I.
Any
provision of this Agreement which is invalid, illegal or unenforceable in
any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of
such invalidity, illegality or unenforceability, without affecting in any
way
the remaining provisions hereof in such jurisdiction or rendering that or
any
other provision of this Agreement invalid, illegal or unenforceable in any
other
jurisdiction.
J.
For
purposes of this Agreement, notices and all other communications provided
for in
this Agreement shall be in writing and shall be deemed to have been duly
given
when personally delivered and acknowledged or delivered by United States
registered mail, return receipt requested, addressed, in the case of Executive
to Executive at his then current primary residence as Company may, from time
to
time be notified, and in the case of Company, to the attention to the Corporate
Secretary of Company at the principal executive offices of Company, or to
such
other address as either Party may have furnished to the other in writing
in
accordance herewith, except that notice of a change of address shall be
effective only upon receipt.
K.
As an
inducement to Company to enter into this Agreement, Executive represents
and
warrants that other than his contractual obligations to keep confidential
certain information of his former employer pursuant to a written agreement,
a
copy of which has been provided to Company: (i) he is not a party to any
other
agreement or obligation for personal services; (ii) there exist no impediments
or restraints, contractual or otherwise, on Executive’s power, right or ability
to enter into this Agreement and to perform his duties and obligations
hereunder; (iii) the performance of his obligations under this Agreement
do not
and will not violate or conflict with any agreement relating to confidentiality,
non-competition or exclusive employment to which Executive is or was subject;
and (iv) Executive has not been involved in any legal proceedings that would
be
required to be disclosed in response to Item 401(f) of Regulation S-K
promulgated under the Securities Act of 1933, as amended. As an inducement
to
Executive to enter into this Agreement, Company represents and warrants that
there exist no impediments, or restraints, contractual or otherwise, on
Company’s power, right or ability to enter into this Agreement and to perform
its duties and obligations hereunder.
L.
Each
Party has had the opportunity to be represented by counsel of its choice
in
negotiating this Agreement. This Agreement shall therefore be deemed to have
been negotiated and prepared at the joint request and direction of the Parties,
at arm’s length, with the advice and participation of counsel, and shall be
interpreted in accordance with its terms and without favor to any
Party.
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on or as
of the
date first above written.
|
Company:
MGC Communications, Inc.
|
Executive: | ||
| By: /s/ Xxxxxxx X. Xxxxxxxxx | /s/ Xxxxx X. Xxxx | ||
|
|
|
||
| Xxxxxxx
X.
Xxxxxxxxx, Xx. Its: Chairman
of the Board
|
Xxxxx
X.
Xxxx |
