Exhibit 10.9
JATO COMMUNICATIONS CORP.
EMPLOYMENT AGREEMENT
FOR
XXXXXX X. XXXXXXXX
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into as of the 31st
day of August, 1999, by and between XXXXXX X. XXXXXXXX ("EXECUTIVE") and JATO
COMMUNICATIONS CORP., a Delaware corporation (the "COMPANY").
WHEREAS, the Company desires to employ Executive to provide personal
services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his services; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. EMPLOYMENT BY THE COMPANY.
1.1 TERM. Executive will commence employment on August 31, 1999.
Subject to terms set forth herein, for a period of two (2) years the Company
agrees to employ Executive in the position of President and Chief Operating
Officer and Executive hereby accepts such employment effective as of the date
first written above. The Board of Directors will elect Executive to fill a
vacancy on the Board at its next scheduled meeting. This Agreement shall
automatically renew on a month-to-month basis unless either party gives
thirty (30) days' prior written notice to the other party. During the term
of his employment with the Company, Executive will devote his best efforts
and substantially all of his business time and attention (except for vacation
periods and reasonable periods of illness or other incapacities permitted by
the Company's general employment policies) to the business of the Company.
1.2 DUTIES. Executive shall serve in an executive capacity and
shall perform such duties as are customarily associated with his then
existing title(s), consistent with the Bylaws of the Company and as required
by the Company's Board of Directors (the "BOARD").
1.3 EMPLOYMENT RELATIONSHIP. The employment relationship between
the parties shall also be governed by the general employment policies and
practices of the Company, including those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall control.
1.
2. COMPENSATION.
2.1 SALARY. Executive shall receive for services to be rendered
hereunder an annualized base salary of $225,000, payable on a semi-monthly
basis, which will be reviewed annually at the discretion of the Compensation
Committee of the Board of Directors. Executive's base salary shall be
increased annually by an amount determined by the Board of Directors.
2.2 BONUS. Executive will be eligible for a discretionary bonus of
up to 100% of his base salary, in an amount to be determined solely by the
Compensation Committee in its discretion, upon achieving targets established
by the Board subject to the terms and conditions outlined in a Company bonus
plan, which may be established and in effect from time to time. In addition,
subject to Executive not terminating his employment with Jato, principal and
interest on the Promissory Note dated this date will be forgiven in two
installments of equal amount; the first installment upon the first
anniversary of Executive's start date. Upon each such installment Jato will
pay Executive a payment of $80,000 to cover taxes associated with note
forgiveness. All principal and interest related to the Promissory Note will
be forgiven and both tax-related payment will be paid upon the occurrence of
an Acceleration Event as defined above.
2.3 STOCK RIGHTS. Simultaneous with the execution of this
Agreement, Executive will purchase 500,000 shares of Common Stock of the
Company on the terms set forth in the Restricted Stock Purchase Agreement
attached hereto as EXHIBIT A (the "PURCHASE AGREEMENT"). In connection with
this purchase Executive agrees to be bound by the terms of the Stockholders'
Agreement dated April 16, 1999, attached hereto as EXHIBIT B. In addition,
should the Company complete a Series C Preferred Stock financing, Executive
will be given an opportunity to purchase 75,000 shares of such Series C
Preferred Stock on the terms set forth in the documentation for such
financing.
2.4 RELOCATION/COMMUTING EXPENSES. Jato will provide the
following to support the expenses of Executive's relocation/commuting to
Denver from Dallas (i) reimbursement of all out-of-pocket expenses associated
with travel between Denver and Dallas for up to six months including up to 3
trips for family members; (ii) reimbursement of temporary housing expense for
up to six months; (iii) reimbursement of closing costs, moving expenses,
furnishings, and related expenses up to an aggregate maximum of $100,000; and
(iv) reimbursement of travel expenses for up to two trips to and from Dallas
each month.
2.5 FUTURE OPTION GRANTS. Executive will be eligible to be
granted options to purchase Common Stock of the Company commencing on the
first anniversary of his employment, at times and in amounts to be determined
in the sole discretion of the Compensation Committee of the Board.
2.6 STANDARD COMPANY BENEFITS. Executive shall be entitled
to all rights and benefits for which he is eligible under the terms and
conditions of the standard Company benefits and compensation practices which
may be in effect from time to time and provided by the Company to its
employees in comparable positions.
3. PROPRIETARY INFORMATION OBLIGATIONS.
3.1 AGREEMENT. Executive agrees to be bound by the terms of the
executed Non-competition, Proprietary Information and Inventions Agreement
attached hereto as EXHIBIT C.
3.2 REMEDIES. Executive's duties under the Proprietary Information
and Inventions Agreement shall survive termination of his employment with the
Company. Executive acknowledges that a remedy at law for any breach or
threatened breach by him of the provisions of the Non-competition Proprietary
Information and Inventions Agreement would be inadequate, and he therefore
agrees that the Company shall be entitled to injunctive relief in case of any
such breach or threatened breach.
4. OUTSIDE ACTIVITIES. Except with the prior written consent of the
Company's Board, Executive will not, during the term of this Agreement,
undertake or engage in any other employment, occupation or business
enterprise, other than those in which Executive is a passive investor.
Executive may engage in civic and not-for-profit activities so long as such
activities do not materially interfere with the performance of his duties
hereunder.
5. TERMINATION OF EMPLOYMENT.
(a) Either the Executive or the Company may terminate the
employment relationship at any time for any reason whatsoever, with thirty
(30) days' prior written notice by the Company and with thirty (30) days'
prior written notice by the Executive with or without Cause (as defined
below) or advance notice. This at-will employment relationship cannot be
changed except in a writing approved by the Board. If the Company terminates
Executive's employment without Cause at any time, Executive will receive as
severance: (i) twelve (12) months of base salary, less payroll deductions
and required withholdings, payable in accordance with the standard pay
schedule of the Company, and (ii) a lump sum payment of that portion of the
bonus Executive is entitled to for the calendar year pro-rated based upon the
number of full months Executive was employed during such year in exchange for
the execution of a release of all claims against the Company. If Executive
resigns or if Executive's employment is terminated for cause, all
compensation and benefits will cease immediately, and Executive will receive
no severance benefits.
For purpose of this Agreement, "CAUSE" shall mean misconduct, including: (i)
conviction of any felony or any crime involving moral turpitude or
dishonesty; (ii) participation in a fraud or act of dishonesty against the
Company; (iii) willful breach of the Company's policies; (iv) intentional
damage to the Company's property; (v) material breach of this Agreement or
Executive's Proprietary Information and Inventions Agreement; (vi) a failure
or refusal in a material respect of Executive to follow the reasonable
policies or directions of the Company as specified by the Board of Directors
after being provided with notice of such failure and an opportunity to cure;
or (vii) failure to carry out the duties of the Executive's position after
being provided with notice of such failure and an opportunity to cure within
seven (7) days of receipt of such notice. Physical or mental disability
shall not constitute "Cause."
(b) In the event of death, the Company shall pay to Executive any
earned but unpaid salary at the time of death and, at the time such amount
would otherwise have been due, a pro rata portion of a discretionary bonus,
if any, which may otherwise have been paid to Executive pursuant to Section
2.3 hereof with respect to the annual period in which the death occurs.
Furthermore, Executive shall vest in 50% of any unvested stock options as of
the date of death and the Company shall waive its repurchase rights with
respect to 50% of any unvested shares as of the date of death; PROVIDED,
HOWEVER, that Executive's estate, administrator or distributor shall become a
party to, and be subject to the provisions of, the Stockholders' Agreement.
6. GENERAL PROVISIONS.
6.1 NOTICES. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class
mail, to the Company at its primary office location and to Executive at his
address as listed on the Company's then current payroll records.
6.2 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provisions had never been contained
herein.
6.3 WAIVER. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision
of this Agreement.
6.4 COMPLETE AGREEMENT. This Agreement and exhibits hereto
constitute the entire agreement between Executive and the Company and it is
the complete, final, and exclusive embodiment of their agreement with regard
to this subject matter. It is entered into without reliance on any promise
or representation other than those expressly contained herein, and it cannot
be modified or amended except in a writing signed by an officer of the
Company.
6.5 COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
6.6 HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
6.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may
not assign any of his rights hereunder without the written consent of the
Company, which shall not be withheld unreasonably.
6.8 ATTORNEY FEES. If either party hereto brings any action to
enforce his or its rights hereunder, the prevailing party in any such action
shall be entitled to recover his or its reasonable attorneys' fees and costs
incurred in connection with such action.
6.9 CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of
the State of Colorado.
6.10 SURVIVAL. The following provisions of this Agreement shall
survive the termination of Executive's employment and the assignment of this
Agreement by the Company to any successor in interest or other assignee:
Section 2 and Section 5.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
JATO COMMUNICATIONS CORP.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
President and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
EXHIBIT A
STOCK PURCHASE AGREEMENT
A-1
EXHIBIT B
STOCKHOLDERS' AGREEMENT
B-1
EXHIBIT C
NON-COMPETITION PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
NON-COMPETITION, PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
As an employee of JATO Communications Corp., a Delaware corporation, its
subsidiaries or its affiliates (together, the "Company"), and as a condition
of my employment by the Company and in consideration of the compensation now
and hereafter paid to me, I agree to the following (the "Agreement"):
1. MAINTAINING CONFIDENTIAL INFORMATION
(a) COMPANY INFORMATION. I agree at all times during the term of
my employment and thereafter to hold in strictest confidence, and not to use,
except for the benefit of the Company, or to disclose to any person, firm or
corporation, without the written authorization of the Board of Directors of
the Company, any trade secrets, confidential knowledge, data or other
proprietary information of the Company. By way of illustration and not
limitation, this shall include information relating to products, processes,
know-how, methods, software, developmental work, improvements, discoveries,
plans for marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers,
and information regarding the skills and compensation of other employees of
the Company. Notwithstanding the foregoing, confidential information shall
not include any information which:
(i) at the time of disclosure, or thereafter, is generally available to
and known by the public;
(ii) was or is available to me on a non-confidential basis from a source
other than the Company; or
(iii) has been independently acquired or developed by me without
violating any of my obligations under this Agreement, as shown by my
competent written records.
(b) THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive confidential or proprietary
information from third parties subject to a duty on the Company's part to
maintain the confidentiality of such information and, in some cases, to use
it only for certain limited purposes. I agree that I owe the Company and
such third parties, both during the term of my employment and thereafter, a
duty to hold all such confidential or proprietary information in the
strictest confidence and not to, except as is consistent with the Company's
agreement with the third party, disclose it to any person, firm or
corporation or use it for the benefit of anyone other than the Company or
such third party, unless expressly authorized to act otherwise by an officer
of the Company.
2. ASSIGNMENT OF INVENTIONS AND ORIGINAL WORKS.
I agree that I will make prompt written disclosure to the Company, will
hold in trust for the sole right and benefit of the Company, and hereby
assign to the Company all my right, title and interest in and to any ideas,
inventions, original works of authorship, developments, improvements or trade
secrets which I may solely or jointly conceive or reduce to practice, or
cause to be conceived or reduced to practice, during the period of my
employment with the Company and for one (1) year after my employment. This
Agreement will not be deemed to require assignment of any invention developed
entirely on my own time without using the Company's equipment, supplies,
facilities or trade secrets and neither related to the Company's actual or
anticipated business, research or development, nor resulted from work
performed by me for the Company.
3. NO CONFLICTS OR SOLICITATION
For the period of my employment by the Company and for one (1) year
following my termination, I will not interfere with the business of the
Company by (i) soliciting, attempting to solicit, inducing, or otherwise
causing any employee of the Company to terminate his or her employment in
order to become an employee, consultant or independent contractor to or for
any other entity engaged in marketing or selling the type of products and
services offered by the Company or (ii) directly soliciting the business of
any customer or client of the Company (other than on behalf of the Company)
for the type of products and services offered by the Company.
4. COVENANT NOT TO COMPETE.
(a) I agree that during my employment with the Company, I will not
directly or indirectly engage in (whether as an employee, consultant,
proprietor, partner, director or otherwise), or have any ownership interest
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in, or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a "Restricted Business"
in a "Restricted Territory" (as defined below). It is agreed that ownership
of (i) no more than ten percent (10%) of the outstanding voting stock of a
publicly traded corporation or (ii) any stock I presently own or (iii) any
options or other rights to acquire shares of a company's capital stock I
presently own shall not constitute a violation of this provision.
(b) As used herein, the terms:
(i) "Restricted Business" shall mean any competitive local exchange
carrier, high speed data communication services provider or any business
which otherwise engages in any other manner in any business which is
competitive with the Company.
(ii) "Restricted Territory" shall mean all regions within a fifty mile
radius of those cities in which the Company operates, or has disclosed to
you that it intends to operate, a business.
5. RETURN OF COMPANY DOCUMENTS
When I leave the employ of the Company, I will deliver to the Company
(and will not keep in my possession, recreate or deliver to anyone else) any
and all documents and other property, together with all copies thereof (in
whatever medium recorded) belonging to the Company, its successors or assigns
whether kept at the Company, home or elsewhere. I further agree that any
property situated on the Company's premises and owned by the Company,
including disks and other storage media, filing cabinets or other work areas,
is subject to inspection by Company personnel at any time with or without
notice.
6. LEGAL AND EQUITABLE REMEDIES
Because my services are personal and unique and because I may have access
to and become acquainted with the proprietary information of the Company, the
Company shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
7. NOT AN EMPLOYMENT CONTRACT. I agree and understand that nothing in
this Agreement shall confer any right with respect to continuation of my
employment by the Company, nor shall it interfere in any way with my right or
the Company's right to terminate my employment at a ny time, with or without
cause.
8. GENERAL PROVISIONS.
(a) GOVERNING LAW. This Agreement will be governed by and
construed according to the laws of the State of Colorado, excluding conflicts
of laws principles. I hereby expressly consent to the personal jurisdiction
of the state and federal courts located in Colorado for any lawsuit filed
there against me by the Company arising from or relating to this Agreement,
or such other location as the Company's principal executive office may then
be located.
(b) SEVERABILITY. If one or more of the provisions in this
Agreement are deemed unenforceable by law, then the remaining provisions will
continue in full force and effect. Moreover, if any restriction set forth in
Sections 3 or 4 hereof is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too
great a range of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) BENEFIT; BINDING EFFECT. This Agreement will be binding upon
my heirs, executors, administrators and other legal representatives and will
be for the benefit of the Company, its successors and its assigns.
(d) SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.
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I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE
DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY'S
PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.
Dated:
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Name
Address
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ACCEPTED AND AGREED TO:
JATO COMMUNICATIONS CORP.
By:
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Name:
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Title:
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