SKYLYNX COMMUNICATIONS, INC.
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made
this 23rd of August between SKYLYNX COMMUNICATIONS, INC., a Colorado
corporation (the "Company") and XXXXXXX X. XXXXXXX ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, the parties entered into an Employment Agreement on the 1st day
of December, 1998, and an Amended and Restated Employment Agreement as of
April 20, 1999, and wish to amend and restate certain provisions of such
agreements to accurately reflect the understanding of the parties hereto; and
WHEREAS, it is intended that this Agreement will supercede all prior
agreements and that the provision of this Agreement be deemed in effect as of
April 20, 1999;
NOW, THEREFORE, in consideration of the premises and of the mutual,
promises, covenants and representations herein contained, the parties hereto
agree as follows:
1. Term. The Company will employ Xxxxxxx, and Xxxxxxx will serve the
Company, under the terms of this Agreement for an initial term ending October
31, 2000 (the "Initial Term"), commencing on December 1, 1998 (the "Effective
Date"). Effective as of the expiration of the Initial Term and as of each
anniversary date thereof, the term of this Agreement shall be extended for an
additional one-year period unless, not later than two months prior to each
such respective date, either party hereto shall have given notice to the other
than the term shall not be so extended. Notwithstanding the foregoing,
Xxxxxxx' employment hereunder may be earlier terminated, as provided in
Section 4 hereof. The term of this Agreement, as in effect from time to time
in accordance with the foregoing, shall be referred to herein as the "Term".
The period of time between the Effective Date and the termination of Xxxxxxx'
employment hereunder shall be referred to herein as the "Employment Period".
2. Employment. The Company hereby employs Xxxxxxx as President and
Chief Executive Officer of the Company upon the terms and conditions herein
set forth. Xxxxxxx shall exercise such authority, perform such duties and
functions and discharge such responsibilities as are reasonably associated
with Xxxxxxx' position, commensurate with the authority vested in Xxxxxxx
pursuant to this Agreement and consistent with the bylaws of the Company. In
connection with performance of his duties, Xxxxxxx shall report directly to
the Board of Directors of the Company (the "Board"). During the Employment
Period, Xxxxxxx shall devote full business time, skill and efforts to the
business of the Company. Notwithstanding the foregoing, Xxxxxxx may (i) make
and manage personal business investments of his choice and serve in any
capacity with any civic, educational or charitable organization, or any trade
association, without seeking or obtaining approval by the Board, provided such
activities and service do not materially interfere or conflict with the
performance of his duties hereunder and (ii) with the approval of the Board,
serve on the boards of directors of other corporations. The Company shall
provide Xxxxxxx, incident to the performance of such duties, with office
space, facilities and secretarial assistance commensurate with his position.
Xxxxxxx shall principally perform his duties for the Company in at the
corporate headquarters to be located in Denver, Colorado, or at such location
as the Board may determine in consultation with Xxxxxxx and with his express
consent.
3. Compensation and Benefits.
(a) Base Salary. During the Employment Period, the Company shall
pay to Xxxxxxx, as compensation for the performance of his duties and
obligations under this Agreement, a base salary at the rate of $144,000 per
annum, payable in arrears not less frequently than twice monthly in accordance
with the normal payroll practices of the Company (the "Base Salary"). The
Compensation Committee shall increase Xxxxxxx' base salary annually, at a rate
of not less than ten percent (10%) per year.
In the event the Company completes an initial or secondary public
offering of its common stock, Xxxxxxx' base salary shall be immediately
increased to an amount to be determined by the Compensation Committee of the
Board. Under no set of circumstances shall Xxxxxxx' Base Salary be decreased
at any time.
(b) Bonuses. The Company agrees to pay Xxxxxxx an annual cash
bonus, on or about March 31st of each year for his efforts in the prior
calendar year. The amount of such bonus shall be determined by the
Compensation Committee of the Board.
(c) Advance Incentives. The parties hereto acknowledge that the
Company has previously granted to Xxxxxxx three hundred and twenty-five
thousand (325,000) shares of the Company's common stock during the 1999
calendar year. The Company agrees to register the shares granted as an
advance incentive with the Securities and Exchange Commission as soon as
practicable, but in no event later than when the Company files for its Initial
Public Offering or a Secondary offering, subject to the requirements of the
underwriter. The total number of shares the Company must register for Xxxxxxx
shall be no more than the aggregate number of shares the Company is otherwise
registering. The Company shall bear all costs of registration associated with
such piggyback registration for Xxxxxxx.
(d) Incentive Stock Options ("ISOs"). The Company has caused to be
established a qualified incentive stock option plan (the "ISO Plan") under
Section 422 of the Internal Revenue Code of 1986, as amended. Each year
during the Employment Period, Xxxxxxx shall fully participate in the ISO Plan
and be granted a number of ISOs commensurate with his position in the Company.
The number of ISO's granted shall be calculated using the same formula used to
calculate the amount of ISOs granted other senior executives of the Company;
it being understood that as of the date of this Agreement, Xxxxxxx has been
previously granted by the Company's board of directors, incentive stock
options to purchase a total of one hundred thirty thousand four hundred thirty
four (130,434) shares of the Company's common stock.
(e) Non-Qualified Stock Options ("NSOs"). The Company has caused
to be established a Non-qualified Stock Option plan (the "Equity Incentive
Plan") that is not intended to qualify as an ISO under Section 422 of the
Internal Revenue Code of 1986, as amended. The Company's board of directors
has previously granted Xxxxxxx NSOs to purchase a total of one million eighty
thousand nine hundred sixty six (1,080,966) shares of the Company's common
stock on substantially the terms and conditions set forth in the attached form
of Stock Option Agreement, attached hereto as Exhibit A. Concurrently with
the execution of this Agreement, the Company and Xxxxxxx will enter into a
Stock Option Agreement, substantially in the form attached hereto as Exhibit
A, pursuant to which Xxxxxxx shall have an option to purchase one million
eighty thousand nine hundred sixty six (1,080,966) shares of common stock of
the Company on the terms and conditions set forth therein.
(f) Accelerated Vesting. The parties agree that all of Xxxxxxx'
Incentive Stock Options and Non-qualified Stock Options shall immediately
vest, regardless of the performance criteria, in the event of a Change in
Control of the Company as defined in Section 4(e) herein.
(g) Equity Catch-Up or Claw-Back. Notwithstanding anything
contained herein to the contrary, the parties agree that, upon the completion
of an initial or secondary public offering of the Company's Common Stock, the
sum of (i) the number of shares of Common Stock granted to Xxxxxxx according
to Section 3(c), plus (ii) the number of shares of Common Stock represented by
Incentive Stock Options granted to Xxxxxxx according to Section 3(d), plus
(iii) the number of shares of Common Stock represented by Non-Qualified Stock
Options granted to Xxxxxxx according to Section 3(e) shall represent an equity
interest in the Company equal to seven percent (7%) of the Company's issued
and outstanding Common Stock on a fully diluted basis. To the extent that
Xxxxxxx' equity interest at such time is less than or greater than seven
percent (7%), the Company and/or the Company's Compensation Committee shall
either increase or decrease the number of Non-Qualified Stock Options granted
to Xxxxxxx (through the grant of additional Non-Qualified Stock Options to
Xxxxxxx or through the cancellation of Non-Qualified Stock Options held by
Xxxxxxx) so that Xxxxxxx' equity interest at such time is equal to seven
percent (7%) of the Company's issued and outstanding Common Stock on a fully
diluted basis.
(h) Benefits. During the Employment Period, Xxxxxxx shall receive
such life insurance, disability, pension, health insurance, holiday, and sick
pay benefits and other benefits which the Company extends, as a matter of
policy, to its executives and, except as otherwise provided herein, shall be
entitled to participate in all deferred compensation and other incentive plans
of the Company on the same basis as other like executives of the Company.
(i) Vacation. Xxxxxxx shall be entitled to four (4) weeks of
vacation each year with full compensation. Xxxxxxx agrees to schedule his
vacation in a way that least interferes with the Company's business.
(j) Expenses. Xxxxxxx shall be reimbursed for his reasonable
expenses, commensurate with his position and related to the carrying out of
his duties, including expenses for entertainment, travel and similar items.
The Company shall reimburse Xxxxxxx for such expenses in a timely manner and
in accordance with the policies and procedures of the Company in effect from
time to time.
(k) Perquisites. During the Term of this Agreement, Xxxxxxx shall
be entitled to perquisites and fringe benefits that are accorded senior
executives of the Company. Such perquisites shall include an automobile
allowance of six hundred and fifty dollars ($650) per month, reimbursement for
medical expenses which may otherwise be uninsured or unreimbursed under the
Company's medical plan for Xxxxxxx and his dependents, payment for all
premiums for Xxxxxxx and his dependents under its medical insurance plans, and
payment for all premiums for Xxxxxxx under its life and disability insurance
plans. The Company shall also waive any applicable waiting periods for such
benefits, if any.
(l) Cumulative Compensation. The compensation provided for in
Sections 3(a) - (k) herein are in addition to the benefits provided for upon
termination pursuant to Section 5 herein.
4. Termination of Employment.
(a) Termination for Cause. The Company may terminate Xxxxxxx'
employment hereunder for cause. For purposes of this Agreement and subject to
Xxxxxxx' opportunity to cure as provided in Section 4(c) hereof, the Company
shall have "cause" to terminate Xxxxxxx' employment hereunder if Xxxxxxx shall
commit any of the following:
(i) any act or omission which shall represent a material
breach in any material respect of any of the terms of this Agreement;
(ii) gross misconduct that, in the reasonable good faith
opinion of the Company that is or is likely to be significantly injurious to
the Company;
(iii) gross negligence or wanton and reckless acts or omissions
in the performance of Xxxxxxx' duties, in any such case which are
significantly injurious to the Company;
(iv) bad faith in the performance of Xxxxxxx' duties,
consisting of willful acts or omissions, which are significantly injurious to
the Company;
(v) addiction to illegal drugs or chronic alcoholism; or
(vi) any conviction or pleading of guilty to a crime that
constitutes a felony under the laws of the United States or any political
subdivision thereof.
(b) Termination with Adequate Reason. Xxxxxxx shall have the right
at any time to terminate his employment with the Company with adequate reason.
For purposes of this Agreement and subject to the Company's opportunity to
cure as provided in Section 4(c) hereof, Xxxxxxx shall have adequate reason to
terminate his employment hereunder if such termination shall be the result of:
(i) a diminution during the Employment Period in Xxxxxxx'
title, duties or responsibilities as set forth in Section 2 hereof;
(ii) a breach by the Company of the compensation and benefits
provisions set forth in Section 3 hereof; or
(iii) any action of the Company to which Xxxxxxx does not
consent which would require Xxxxxxx to change his present place of residence;
or
(iv) a material breach by the Company of any material terms of
this Agreement.
(c) Notice and Opportunity to Cure. Notwithstanding the foregoing,
it shall be a condition precedent to the Company's right to terminate Xxxxxxx'
employment for "cause" and Xxxxxxx' right to terminate his employment for
"good reason" that (1) the party seeking the termination shall first have
given the other party written notice stating with specificity the reason for
the termination ("breach") and (2) if such breach is susceptible of cure or
remedy, a period of thirty (30) days from and after the giving of such notice
shall have elapsed without the breaching party having effectively cured or
remedied such breach during such 30-day period, unless such breach cannot be
cured or remedied within thirty (30) days, in which case the period for remedy
or cure shall be extended for a reasonable time (not to exceed thirty (30)
days) provided the breaching party has made and continues to make a diligent
effort to effect such remedy or cure.
(d) Termination Upon Death or Permanent and Total Disability. The
Employment Period shall be terminated by the death of Xxxxxxx. The Employment
Period may be terminated by the Company if Xxxxxxx shall be rendered incapable
of performing his duties to the Company by reason of any medically determined
physical or mental impairment that reasonably can be expected to result in
death or that can be expected to last for a period of six (6) or more
consecutive months from the first date of the disability ("Disability"). In
the event of a dispute as to whether Xxxxxxx is mentally impaired within the
meaning of this Section 4(d), or as to the likely duration of any incapacity
of Xxxxxxx either party may request a medical examination of Xxxxxxx by a
doctor appointed by the Chief of Staff of a hospital selected by mutual
agreement of the parties, or as the parties may otherwise agree, and the cost
of such written medical opinion of such doctor shall be borne by the Company.
If the Employment Period is terminated by reason of Disability of Xxxxxxx, the
Company shall give thirty (30) days' advance written notice to that effect to
Xxxxxxx.
(e) Change in Control. A "Change in Control" shall be deemed to
have occurred if and when (i) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Securities and Exchange Act of 1934, as amended) who
does not own fifty percent (50%) or more of the combined voting power of the
Company's then issued and outstanding securities is or becomes a beneficial
owner, directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
issued and outstanding voting securities; (ii) the Company sells all or
substantially all of the assets of the Company; (iii) a merger is effected
whereby the Company is not the surviving entity after the merger (except in
the instance where the sole purpose of the merger is to effect a change in
domicile of the Company from one state to another); or (iv) a majority of the
individuals who were members of the Board of Directors of the Company
immediately prior to an action or series of actions, do not constitute a
majority of the Board of Directors following such action or series of actions.
In the event of a Change in Control, if Xxxxxxx and the new controlling entity
do not agree to continue with the terms of this Agreement, then this Agreement
shall be terminated and the Company shall pay Xxxxxxx the liquidated damages
defined in Section 5(a) below.
5. Consequences of Termination.
(a) Termination Without Cause or for Adequate Reason or Change of
Control. In the event of termination of Xxxxxxx' employment hereunder: (1)
by the Company without "cause" (other than upon death or Disability); (2) by
Xxxxxxx for "adequate reason"; or (3) termination effected after or upon a
Change of Control (each as defined in Section 4 hereof), in addition to any
other benefits and payments as may be required by law or otherwise accrued as
of such termination date by Xxxxxxx, Xxxxxxx shall be entitled to the
following severance pay and benefits:
(i) Severance Pay - a lump sum amount equal to one half (1/2)
of Xxxxxxx' then annual Base Salary;
(ii) Benefits Continuation - continuation for six (6) months
(the "Severance Period") of coverage under the group medical care, disability
and life insurance benefit plans or arrangements in which Xxxxxxx is
participating at the time of termination with the Company continuing to pay
its share of premiums and associated costs as if Xxxxxxx continued in the
employ of the Company; provided, however, that the Company's obligation to
provide such coverages shall be terminated if Xxxxxxx obtains comparable
substitute coverage from another employer at any time during the Severance
Period. Xxxxxxx shall be entitled, at the expiration of the Severance Period,
to elect continued medical coverage in accordance with Section 4980B of the
Internal Revenue Code of 1986, as amended (or any successor provision
thereto); and
(iii) Pro Rata Bonus Amounts - a lump sum amount equal
to the pro rata portion of any bonus amounts paid by the Company in the prior
year as bonuses.
(b) Termination Upon Disability. In the event of termination of
Xxxxxxx' employment hereunder by the Company on account of Disability, Xxxxxxx
shall be entitled to the following severance pay and benefits:
(i) Severance Pay - severance payments in the form of
continuation of Xxxxxxx' Base Salary as in effect immediately prior to such
termination for a period of six (6) months following the first date of
Disability; and
(ii) Benefits Continuation - the same benefits as provided in
Section 5(a)(ii) above, to be provided during the Employment Period while
Xxxxxxx is suffering from Disability and for a period of three (3) months
following the effective date of Xxxxxxx' termination by reason of Disability.
(c) Termination Upon Death. In the event of termination of
Xxxxxxx' employment hereunder on account of Xxxxxxx' death, Xxxxxxx' heirs,
estate or personal representatives under law, as applicable, shall be entitled
to the payment of Xxxxxxx' Base Salary as in effect immediately prior to death
for a period of not less than two (2) calendar months and not more than the
earlier of six (6) calendar months or the payment of benefits pursuant to
Xxxxxxx' life insurance policy, as provided for in Section 3(h) above.
Xxxxxxx' beneficiary or estate shall not be required to remit to the Company
any payments received pursuant to any life insurance policy purchased pursuant
to Section 3(h) above.
(d) Accrued Rights. Notwithstanding the foregoing provisions of
this Section 5, in the event of termination of Xxxxxxx' employment hereunder
for any reason, Xxxxxxx shall be entitled to payment of any unpaid portion of
his Base Salary through the effective date of termination, accrued by unpaid
vacation or benefits otherwise agreed to by the Company, and payment of any
accrued but unpaid rights solely in accordance with the terms of any incentive
bonus or employee benefit plan or program of the Company.
(e) Conditions to Severance Benefits.
(i) The Company shall have the right to seek repayment of the
severance payments and benefits provided by this Section 5 in the event that
Xxxxxxx fails to honor in accordance with their terms the provisions of
Section 6 hereof.
(ii) For purposes only of this Section 5(e), Xxxxxxx shall be
treated as having failed to honor the provisions of Sections 6 hereof only
upon the vote of two-thirds of the Board following notice of the alleged
failure by the Company to Xxxxxxx, an opportunity for Xxxxxxx to cure the
alleged failure for a period of thirty (30) days from the date of such notice
and Xxxxxxx' opportunity to be heard on the issue by the Board.
(f) Registration and/or Buyback of Securities. No later than
ninety (90) days following termination of this Agreement by Company without
cause (as described in Section 4(a)) or by Xxxxxxx with adequate reason (as
described in Section 4(b)), the Company shall cause to be prepared and filed
at its sole cost and expense registration documents with the Securities and
Exchange Commission for the purpose of registering for sale under the
Securities Act of 1933, as amended, all shares of the Company's common stock
owned by Xxxxxxx or purchasable by Xxxxxxx upon exercise of outstanding
Incentive Stock Options and Non-Qualified Stock Options that are vested as of
the date of termination. In connection with such registration, the Company
shall do the following: (i) attempt to cause such registration to be declared
effective by the Securities and Exchange Commission within one hundred twenty
(120) days of the date of termination, (ii) if successful in (i) above,
maintain the effectiveness of such registration for a minimum period of one
hundred eighty (180) days, and (iii) qualify the sale of all shares of the
Company's common stock owned by Xxxxxxx or purchasable by Xxxxxxx upon
exercise of his outstanding, vested Incentive Stock Options and Non-Qualified
Stock Options in such states and under such Blue Sky regulations as Xxxxxxx
may reasonably request. In the event said registration fails to become
effective, Xxxxxxx shall be permitted to sell in accordance with the
provisions of Rule 144 and the remaining shares shall be registered in
accordance with Section 3(c) above.
6. Confidential Information and Covenant Not to Compete. All payments
and benefits to Xxxxxxx shall be subject to Xxxxxxx' compliance with this
Agreement and the provisions of this Section 6. However, Xxxxxxx' covenants
contained in this Section 6 shall terminate and shall be unenforceable and of
no further legal force or effect in the event the Company, its successors or
assigns, becomes insolvent, is liquidated or ceases for any reason to conduct
business operations for a continuous period of at least thirty (30) days.
(a) Confidentiality. Xxxxxxx agrees that he will not at any time
during the Employment Period or for a period of two (2) year following
employment with the Company, for any reason, in any fashion, form or manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, corporation or other business entity, in any manner whatsoever, any
confidential information or trade secrets concerning the business of the
Company, including, without limiting the generality of the foregoing, the
techniques, methods or systems of its operation or management, any information
regarding its financial matters, or any other material information concerning
the business of the Company (including customer lists), its manner of
operation, its plans or other material data (the "Business"). The provisions
of Section 6(a) shall not apply to (i) information disclosed in the
performance of Xxxxxxx' duties to the Company based on his good faith belief
that such a disclosure is in the best interests of Company; (ii) information
that is, at the time of the disclosure, public knowledge; (iii) information
disseminated by the Company to third parties in the ordinary course of
business; (iv) information lawfully received by Xxxxxxx from a third party
who, based upon inquiry by Xxxxxxx, is not bound by a confidential
relationship to the Company; or (v) information disclosed under a requirement
of law or as directed by applicable legal authority having jurisdiction over
Xxxxxxx.
(b) Litigation Support. During the Term of this Agreement, Xxxxxxx
shall, upon reasonable notice, furnish such information and proper assistance
to the Company as may reasonably be required in connection with any litigation
in which the Company or any of its subsidiaries is, or may become, a party.
Except for litigation that may be between the Company and Xxxxxxx, Xxxxxxx'
reasonable expenses (including, but not limited to, travel and attorneys'
fees) incurred in complying with this covenant shall be either advanced or
promptly reimbursed by Company to Xxxxxxx.
(c) No Solicitation of Employees. Xxxxxxx agrees that during the
Term of this Agreement and continuing for a period of one (1) year after
termination under Section 4 herein, neither Xxxxxxx nor any person or
enterprise controlled by Xxxxxxx, will solicit for employment any person
employed by the Company, with the exception of Xxxxx X. Xxxxxx.
(d) Covenant Not to Compete. Xxxxxxx agrees that he shall not
during the Employment Period, without the approval of the Board, directly or
indirectly, alone or as partner, joint venturer, officer, director, employee,
consultant, agent, independent contractor, guarantor, financier, consultant,
option holder or stockholder (other than as provided below) of any company or
business, participate in, engage in or have a financial interest in any
"Competitive Business" within the United States. For purposes of the
foregoing, the term "Competitive Business" shall mean any business, firm,
corporation or other business entity related to the provision of Internet
access or Internet related services and any business directly competing with
any product or service of SkyLynx Communications, Inc. or any affiliate
thereof. Notwithstanding the foregoing, Xxxxxxx shall not be prohibited
during the noncompetition period applicable above from acting as a passive
investor where he owns not more than five percent (5%) of the issued and
outstanding capital stock of any publicly-held company.
7. Breach of Restrictive Covenants. The parties agree that a breach or
violation of Section 6 hereof will result in immediate and irreparable injury
and harm to the innocent party, and that such innocent party shall have, in
addition to any and all remedies of law and other consequences under this
Agreement, the right to seek an injunction, specific performance or other
equitable relief to prevent the violation of the obligations hereunder.
8. Indemnification and Duty to Defend.
(a) Indemnification. Except for litigation between the Company and
Xxxxxxx, the Company agrees to indemnify Xxxxxxx to the fullest extent against
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative in which he is made party or
is threatened to be made a party by reason of his having been an officer or
director of the Company or any of its subsidiaries or affiliates, or for
actions taken purportedly on behalf of the Company or any of its subsidiaries
or affiliates. Indemnification shall include, but is not limited to: expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by Xxxxxxx as long as Xxxxxxx acted in good
faith and in a manner he reasonably believed to be in the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. Indemnification
shall extend to all matters that relate to Xxxxxxx' association with the
Company beginning on the Effective Date of this Agreement, and such
indemnification shall survive the termination of this Agreement, regardless of
the reason for termination.
(b) Duty to Defend. Except for litigation between the Company and
Xxxxxxx, the Company will provide Xxxxxxx with a legal defense with counsel of
his choosing against any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative in which
he is made party or is threatened to be made a party by reason of his having
been an officer or director of the Company or any of its subsidiaries or
affiliates, for action taken purportedly on behalf of the Company or any of
its subsidiaries or affiliates. No settlement shall be entered into with
respect to litigation pursuant to this Section 8(b) without the express
written approval of Xxxxxxx. Additionally, upon request by Xxxxxxx, the
Company will promptly advance or pay any amounts for costs, charges, or
expenses in respect to his right to a defense and indemnification hereunder.
This duty to defend shall extend to all matters that relate to Xxxxxxx'
affiliation with the Company beginning from July 1, 1998, and such duty shall
survive the termination of this Agreement.
9. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Company, to: If to Xxxxxxx, to:
Chairman of the Board Xxxxxxx X. Xxxxxxx
SkyLynx Communications, Inc. 000 Xxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxx 00000
Xxxxxx, Xxxxxxxx 00000
or to such other respective addresses as the parties hereto shall designate to
the other by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.
10. Waiver of Breach. Any waiver of any breach of this Agreement shall
not be construed to be a continuing waiver or consent to any subsequent breach
on the part either of Xxxxxxx or of the Company.
11. Non-Assignment: Successors. Neither party hereto may assign his or
its rights or delegate his or its duties under this Agreement without the
prior written consent of the other party; provided, however, that: (i) this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company upon any sale of all or substantially all of the
Company's assets, or upon any merger, consolidation or reorganization of the
Company with or into any other corporation, all as though such successors and
assigns of the company and their respective successors and assigns were the
Company; and (ii) this Agreement shall inure to the benefit of and be binding
upon the heirs, assigns or designees of Xxxxxxx to the extent of any payments
due to them hereunder. As used in this Agreement, the term "Company" shall be
deemed to refer to any such successor or assign of the Company referred to in
the preceding sentence.
12. Withholding of Taxes. All payments required to be made by the
Company to Xxxxxxx under this Agreement shall be subject to the withholding of
such amounts, if any, relating to tax, and other payroll deductions as the
Company may reasonably determine it should withhold pursuant to any applicable
law or regulation.
13. Severability. To the extent any provision of this Agreement or
portion thereof shall be invalid or unenforceable, it shall be considered
deleted there from and the remainder of such provision and of this agreement
shall be unaffected and shall continue in full force and effect.
14. Payment. All amounts payable by the Company to Xxxxxxx under this
Agreement shall be paid promptly on the dates required for such payment in
this Agreement without notice or demand. Any salary, benefits or other
amounts paid or to be paid to Xxxxxxx or provided to or in respect of Xxxxxxx
pursuant to this Agreement shall not be reduced by amounts owing from Xxxxxxx
to the Company.
15. Authority. Each of the parties hereto hereby represents that each
has taken all actions necessary in order to execute and deliver this Agreement
and the Stock Option Agreement attached hereto as Exhibit A.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Colorado, without giving
effect to the choice of law principles thereof.
18. Entire Agreement. This Agreement, the attached Stock Option
Agreements and the Plan as defined in the Stock Option Agreements constitute
the entire agreement by the Company and Xxxxxxx with respect to the subject
matter hereof and supersedes any and all prior agreements or understandings
between Xxxxxxx and the Company with respect to the subject matter hereof,
whether written or oral. This Agreement may be amended or modified only by a
written instrument executed by Xxxxxxx and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and month first above-written.
SKYLYNX COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Chairman of the Board
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
EXHIBIT "A"
AMENDED AND RESTATED
STOCK OPTION AGREEMENT
SkyLynx Communications, Inc.
Stock Options
This AMENDED AND RESTATED STOCK OPTION AGREEMENT (the "Agreement") dated
as of this 20th day of April, 1999 is intended to amend certain terms and
restate the remaining provisions of an Agreement entered into on the 1st day
of December, 1998 (the "Date of Grant"), between SkyLynx Communications, Inc.,
a Colorado corporation (the "Company") and Xxxxxxx X. Xxxxxxx (the
"Optionee").
Pursuant to any authorized stock option plan of the Company or any other
appropriate and lawful method (collectively, the "Plan"), the Company has
authorized the execution and delivery of this Agreement. A copy of the Plan
as in effect on the Date of Grant has been supplied to the Optionee and the
Optionee hereby acknowledges receipt thereof. The provisions of the Plan,
including the definitions of capitalized terms that are not otherwise defined
in this Agreement, are incorporated herein by reference.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree
as follows:
1. Grant of Option. Subject to all the terms and conditions of the
Plan and this Agreement, the Company grants to the Optionee as of the date of
grant an option (the "Option") to purchase one million eighty thousand nine
hundred and sixty-six (1,080,966) shares of common stock, par value $.001, of
the Company ("Common Stock"). The Option is not intended to qualify as an
"incentive stock option" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and shall be treated as a non-qualified stock
option under the Plan.
2. Exercise Price. The exercise price per share of Common Stock
covered by this Option (the "Option Price") shall be $1.94.
3. Vesting. The Optionee's right to purchase shares of the Company's
Common Stock under the Option shall vest according to the following
milestones:
a. When the Company achieves certain performance based milestones
as detailed in the Performance Criteria ("Performance
Criteria") set forth on Schedule 3(a) hereto; or
b. In any event, upon the tenth (10th) anniversary of the grant of
the options all options that are not then vested will
immediately vest.
4. Term. The term of the Option (the "Option Term") shall commence on
the Date of Grant and shall expire on the tenth anniversary thereof unless the
Option shall have been earlier terminated in accordance with the terms hereof
or of the Plan. Shares of Common Stock as to which the Option becomes
exercisable pursuant to Section 3 hereof may be purchased at any time during
the Option Term.
5. Termination of Option. The unexercised portion of the Option shall
automatically terminate and shall become null and void and be of no further
force or effect upon the expiration of the Option Term.
6. Notices. All notices or other communications which are required or
permitted hereunder shall be deemed sufficient if contained in a written
instrument given by personal delivery, telex, telecopier, telegram, air
courier or registered or certified mail, postage prepaid, return receipt
requested, addressed to such party at the address set forth below or such
other address as may thereafter be designated in a written notice from such
party to the other party.
If to the Company: Attn: Chairman of the Board
SkyLynx Communications, Inc.
000 Xxxxx Xxxxxx Xxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to Xxxxxxx, to: Xxxxxxx X. Xxxxxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
All such notices, advances and communications shall be deemed to have
been delivered and received (i) in the case of personal delivery, on the date
of such delivery, (ii) in the case of telecopier, upon receipt of machine
confirmation and (iii) in the case of mailing, on the third business day
following such mailing.
7. No Waiver. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
8. Optionee Undertaking. The Optionee shall take whatever additional
actions and execute whatever additional documents the Company or the Committee
may in its reasonable judgment deem necessary or advisable in order to carry
out or effect one or more of the obligations or restrictions imposed on the
Optionee pursuant to the express provisions of this Agreement.
9. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Colorado, excluding the choice of
law rules thereof.
10. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above-written.
SKYLYNX COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Chairman of the Board
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Schedule 3(a)
PERFORMANCE CRITERIA
The Optionee's right to purchase shares of the Company's Common Stock
under the Option shall vest immediately, subject to Section 3 hereof, pursuant
to the following schedule:
(1) Upon acquisition of the Company's twenty-five thousand (25,000)
subscriber, Xxxxxxx shall vest in 288,294 stock options.
(2) Upon obtaining acceptable commitments to fund the Company for a
minimum $30,000,000, Xxxxxxx shall vest in 384,392 stock options.
Such commitments may consist of, but shall not be limited to, any
combination of the following:
(i) Initial or Secondary Public Offering;
(ii) Private Equity Placement;
(iii) High Yield Debt Offering;
(iv) Private Debt Placement;
(v) Public or Private Placement of Convertible Securities;
(vi) Joint Venture / Project Financing; and
(vii) Vendor Financing.
(3) Upon the acquisition of the Company's fifth (5th) Internet Service
Provider, Xxxxxxx shall vest in 192,481 stock options.
(4) Upon obtaining annualized gross revenues of $15,000,000 for the
Company, (based upon last quarter revenues annualized), Xxxxxxx
shall vest in another 215,799 stock options.
