EXTENSION OF AGREEMENT
THIS
AGREEMENT
(“Agreement”)
is made and entered into this 25th day of October 2006, by and between Pac-West
Telecomm, Inc., a California corporation (the “Company”), and Xxxxxxx X. Xxxxxxx
(“Board Chairman”).
Whereas,
the Board of Directors have determined that given the circumstances facing
the
corporation and the need for an increasingly active board Chairman it is in
the
best interest of the Company and its various stakeholders to continue to retain
the services of Xx. Xxxxxxx as described in the Separation Agreement previously
executed on October 21, 2003 and modified hereby; and
Whereas,
Xx. Xxxxxxx and the Board of directors wish to evidence in writing their
agreement to extend the Separation Agreement on the terms set forth herein
for
an initial term of six months commencing October 1, 2006 and ending March 31,
2007 with provision for automatic quarterly extensions as more particularly
described below;
It
is
Therefore Agreed as follows:
1. Compensation
as Director and Board Chairman.
For so
long as he is a member of the Board of Directors of Company, Executive shall
receive the sum of $5,000.00 per quarter payable in arrears as compensation
for
board service together with stock option grants on the same terms extended
to
outside directors. For so long as Executive serves as Chairman of the Board
of
Directors he shall receive $24,000.00 per quarter payable in arrears for
performing the duties of Board Chairman and making himself available to assist
the CEO of the corporation on special projects as reasonably requested by the
CEO. Such payments shall commence with respect to the fourth calendar quarter
of
2006.
2. Business
Expenses and Support.
During
the term of his service as Board Chairman at the Company’s expense:
| (a) | Executive will have full use of his present Company office in Stockton, California (including a part-time administrative assistant); |
| (b) | Executive will be provided with a home computer and a laptop and e-mail service; |
|
(c)
|
Company
will continue to provide existing telephone service, including home
and
wireless services currently provided to Executive on the same terms
such
service is provided to the CEO;
|
|
(d) |
Title
to the Lexus vehicle owned by the Company and presently utilized
by Xx.
Xxxxxxx shall be transferred to Executive forthwith as contemplated
by the
terms of the Separation Agreement; provided that Xx. Xxxxxxx shall
reimburse the company in the amount of $15,120.64 which is required
to pay
off the existing financing on the vehicle at September 30, 2006.
Effective
as of the date of transfer of title, upkeep, maintenance and insurance
shall become the responsibility of
Executive.
|
|
(e)
|
Reimbursement
of expenses reasonably incurred on behalf of the corporation as approved
by the audit committee of the board of
directors.
|
3. Certain
Covenants.
| (a) |
The
terms of Sections 6, 7, 8, 9, and 10 of the Executive Agreement,
Sections
8 and 9 (b) of the Separation Agreement and Section 3(b) of this
Agreement
shall survive this Agreement and remain fully enforceable in the
manner
set forth in Section 11 of the Executive Agreement, which is hereby
incorporated herein.
|
| (b) |
Unless
specifically approved in writing by the Board of Directors or its’ Audit
Committee, the Executive shall not, for a period of one year from
the date
of termination of this Agreement (the “Non-Compete Period”), for himself
or on behalf of any other persons, firm, partnership, corporation,
or
other entity, engage, directly or indirectly, either as an officer,
director, employee, partner, consultant, individual proprietor, agent,
or
otherwise (including, but not limited to, as an owner or shareholder),
in
any business which (A) provides telecommunication services of the
type
provided any time prior to the end of the Non-Compete Period by the
Company and any of its affiliates (including, without limitation,
(i)
switched local service, (ii) switched long-distance service, (iii)
dedicated transport services, (iv) collocate and interconnect services
and
(v) date switched services and including, without limitation,
telecommunication services of the type provided by the Company and
any of
its affiliates to information service providers) or (B) provides
services
of the type which the Company and any of its affiliates have taken
significant actions prior to the end of the Non-Compete Period to
begin
providing or of the type the Company or any of its affiliates have
indicated that they plan to begin providing in any business plan
or
similar document delivered to Executive at any time prior to the
end of
the Non-Compete Period, in each case within any of the Restricted
Territories (as defined below); provided that the restrictions set
forth
in this Section 9(b) shall not prohibit Executive from being a passive
owner of not more than 5% of the outstanding stock of any class of
a
corporation which is publicly traded; and provided further that the
restrictions set forth in this paragraph shall not restrict the activities
of Executive to the extent Executive has received the consent of
the Board
of Directors of the Company to such
activities.
|
| (c) |
In
consideration of the performance by Executive of the obligations
set forth
in the covenants set forth and referred to in this Section 3, Xx.
Xxxxxxx
shall receive quarterly installments of $4,750.00 in arrears commencing
on
December 31, 2006, and on the last day of each quarter thereafter
during
the term of this Agreement.
|
For
purposes of this Agreement, “Restricted Territories” shall mean any states or
comparable jurisdictions in which the Company or its Subsidiaries are engaged
in
business prior to the end of the Non-Compete Period or have taken significant
actions to begin engaging in business during that period, including, but not
limited to, such states or comparable jurisdictions located within the United
States of America, Canada and Mexico. Executive acknowledges that the geographic
restrictions set forth above are reasonable and necessary to protect the good
will of the Company’s business.
4. Automatic
Extension and Termination.
This
Agreement is for an initial term of two quarters commencing October 1, 2006
and
ending March 31, 2007. The term of this Agreement shall be automatically
extended for one additional quarter at a time unless written notice of
termination is given by Company or Xx. Xxxxxxx prior to the commencement of
the
final quarter of the then existing or extended term. In the event of early
termination by the Company, Xx. Xxxxxxx shall be entitled to receive all amounts
to which he would have been entitled pursuant to sections 1 and 3 of this
Agreement through the end of the then current term. In the event of early
termination by Xx. Xxxxxxx, he shall be entitled to receive only such amounts
to
which he is entitled through the date of termination. Notwithstanding anything
to the contrary in the preceding sentences of this section, this Agreement
shall
terminate immediately in the event that Xx. Xxxxxxx is not elected to the board
of directors at any subsequent annual meeting of the shareholders of Company
and
Xx. Xxxxxxx shall only be entitled to receive amounts which would have fallen
due hereunder with respect to service through the end of the quarter during
which he fails to be elected to the board.
5. Notices.
All
notices necessary or desirable to be served hereunder shall be in writing and
shall be: (i) personally delivered, or (ii) sent by certified mail, return
receipt requested, postage prepaid, to the address for the intended recipient
set forth below, or (iii) sent by facsimile telecopier to the facsimile telecopy
number for the intended recipient set forth below, as follows:
(a) If
to the
Company:
Pac-West
Telecomm, Inc.
0000
X.
Xxxxx Xxxx #000
Xxxxxxxx,
XX 00000
Attn:
General Counsel
Telecopier:
(000) 000-0000
(b) If
to
Executive:
Xx.
Xxxxxxx X. Xxxxxxx
0000
Xxxxxxxxx Xx.
Xxxxxxxx,
XX 00000
Telecopier:
[000-000-0000 ]
or
to
such other address or facsimile telecopy number as either party hereto may
designate for itself or himself from time to time in a written notice served
upon the other party hereto as provided herein. Any notice sent by mail as
provided above shall be deemed delivered on the second (2nd) business day next
following the postmark date which it bears. Any notice sent by facsimile
telecopier as provided above shall be deemed delivered when sent.
6. Confidentiality. Executive
acknowledges that he has had access to confidential information of the Company
and its respective affiliates, and of their respective current and former
shareholders, members, directors, officers, managers, independent contractors,
trustees, beneficiaries, representatives, employees and agents, as a result
of
his employment by the Company. Executive hereby agrees not to use such
confidential information personally or for the benefit of others. Executive
further agrees not to disclose to anyone any such confidential information
at
any time in the future so long as such information remains
confidential.
7. Entire
Agreement.
This
Agreement contains the entire agreement between the Company and Executive with
respect to the subject matter hereof, and may not be modified or rescinded
except pursuant to a written instrument signed by the party against whom
enforcement is sought.
8. Governing
Law.
This
Agreement and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of
California, without regard to the laws of the any other jurisdiction. Any suit,
claim or other legal proceeding arising out of or relating to Executive’s
engagement hereunder, the termination of Executive’s engagement hereunder, or
this Agreement shall be brought exclusively in the federal or state courts
located in San Xxxxxxx County, California and for such purpose Executive and
the
Company hereby submit to personal jurisdiction in the State of California and
to
venue in such courts.
*
* *
*
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the day and year first above
written.
PAC-WEST
TELECOMM, INC.
a
California corporation
By: /s/
Xxxx Xxxxxxxxx
Xxxx
Xxxxxxxxx
President
and Chief Executive Officer
By:
/s/ Xxxxxx Xxxx
Xxxxxx
Xxxx
Lead
Independent Director & Chair of
Compensation
Committee
/s/
Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
