SKYLYNX COMMUNICATIONS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made effective on the 15th
day of July 1999 between SKYLYNX COMMUNICATIONS, INC., a Colorado corporation
(the "Company") and XXXXX X. XXX ("Xxx").
W I T N E S S E T H:
WHEREAS, the parties hereto wish to enter into an employment agreement to
employ Xxx; and
WHEREAS, each of the parties desire to set forth herein certain
agreements between Xxx and the Company concerning Kim's employment;
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 Xxx, and Xxx will serve the Company,
under the terms of this Agreement for an initial term ending December 31, 2000
(the "Initial Term"), commencing on the date hereof (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, Kim's
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 Kim's
employment hereunder shall be referred to herein as the "Employment Period".
2. Employment. The Company hereby employs Xxx as General Counsel, Vice
President Legal Affairs of the Company upon the terms and conditions herein
set forth. Xxx shall exercise such authority, perform such duties and
functions and discharge such responsibilities as are reasonably associated
with Kim's position, commensurate with the authority vested in Xxx pursuant to
this Agreement and consistent with the bylaws of the Company. In connection
with performance of her duties, Xxx shall report directly to the Chief
Executive Officer of the Company. During the Employment Period, Xxx shall
devote full business time, skill and efforts to the business of the Company.
Notwithstanding the foregoing, Xxx xxx (i) make and manage personal business
investments of her 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 her
duties hereunder; and (ii) with the approval of the Board, serve on the boards
of directors of other corporations. The Company shall provide Xxx, incident
to the performance of such duties, with office space, facilities and
secretarial assistance commensurate with her position. Xxx shall principally
perform her duties for the Company at its San Francisco Legal Division, the
Company's headquarters in Denver, Colorado, or at such location as the Board
may determine in consultation with Xxx and with her express consent.
3. Compensation and Benefits.
(a) Base Salary. During the Employment Period, the Company shall
pay to Xxx, as compensation for the performance of her duties and obligations
under this Agreement, a base salary at the rate of $120,000 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 Kim's 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, Kim's 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 Kim's Base Salary be decreased at
any time.
(b) Bonuses. The Company agrees to pay Xxx an annual cash bonus, on
or about March 31st of each year for her 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 Company agrees to xxxxx Xxx fifty
thousand (50,000) shares of the Company's common stock. 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 Xxx 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 Xxx.
(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, Xxx shall fully participate in the ISO Plan and
be granted a number of ISOs commensurate with her 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.
(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 "incentive stock option" under
Section 422 of the Internal Revenue Code of 1986, as amended. Pending
approval of the Board of Directors of the Company and its shareholders to
amend the Company's Equity Incentive Plan to increase the number of shares
subject to such plan, and the grant of stock options to be granted by the
Company to Xxx, the Company and Xxx will enter into a Stock Option Agreement,
substantially in the form attached hereto as Exhibit A, pursuant to which the
Company shall grant to Xxx an option to purchase three hundred eighty seven
thousand five hundred (387,500) shares of Common Stock of the Company on the
terms and conditions set forth therein.
(f) Accelerated Vesting. The parties agree that all of Kim's
Incentive Stock Options and Non-qualified Stock Options shall immediately
vest, regardless of the performance criteria or vesting schedules set forth in
such stock option grants in the event of: (i) Change in Control of the
Company, as defined in Section 4(e) herein; or (ii) in the event of
termination of employment of Xxxxxxx Xxxxxxx as the Company's Chief Executive
Officer.
(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 Xxx according to
Section 3(c), plus (ii) the number of shares of Common Stock represented by
Incentive Stock Options granted to Xxx according to Section 3(d), plus (iii)
the number of shares of Common Stock represented by Non-Qualified Stock
Options granted to Xxx according to Section 3(e) shall represent an equity
interest in the Company equal to 1.8% of the Company's issued and outstanding
Common Stock on a fully diluted basis. To the extent that Kim's equity
interest at such time is less than or greater than 1.8%, the Company and/or
the Company's Compensation Committee shall either increase or decrease the
number of Non-Qualified Stock Options granted to Xxx (through the grant of
additional Non-Qualified Stock Options to Xxx or through the cancellation of
Non-Qualified Stock Options held by Xxx) so that Kim's equity interest at such
time is equal to 1.8% of the Company's issued and outstanding Common Stock on
a fully diluted basis.
(h) Benefits. During the Employment Period, Xxx 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. Xxx shall be entitled to four (4) weeks of vacation
each year with full compensation. Xxx agrees to schedule her vacation in a way
that least interferes with the Company's business.
(j) Expenses. Xxx shall be reimbursed for her reasonable expenses,
commensurate with her position and related to the carrying out of her duties,
including expenses for entertainment, travel and similar items. The Company
shall reimburse Xxx 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, Xxx shall be
entitled to perquisites and fringe benefits that are accorded senior
executives of the Company. Such perquisites shall include an automobile
allowance of Four Hundred Dollars ($400) per month, reimbursement for medical
expenses which may otherwise be uninsured or unreimbursed under the Company's
medical plan for Xxx, payment for all premiums for Xxx under its medical
insurance plans, and payment for all premiums for Xxx 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 Kim's
employment hereunder for cause. For purposes of this Agreement and subject to
Kim's opportunity to cure as provided in Section 4(c) hereof, the Company
shall have "cause" to terminate Kim's employment hereunder if Xxx 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 Kim's duties, in any such case which are significantly
injurious to the Company;
(iv) bad faith in the performance of Kim's duties, consisting
of willful acts or omissions, which are significantly injurious to the
Company;
(v) addiction to illegal drugs or chronic alcoholism, as may
be permitted by law; 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. Xxx shall have the right at
any time to terminate her 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, Xxx shall have adequate reason to
terminate her employment hereunder if such termination shall be the result of:
(i) a diminution during the Employment Period in Kim's title,
duties or responsibilities as set forth in Section 1 hereof;
(ii) a breach by the Company of the compensation and benefits
provisions set forth in Section 3 hereof;
(iii) any action of the Company to which Xxx does not consent
which would require Xxx to change her 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 Kim's
employment for "cause" and Kim's right to terminate her 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 Xxx. The Employment
Period may be terminated by the Company if Xxx shall be rendered incapable of
performing her 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 Xxx is mentally impaired within the
meaning of this Section 4(d), or as to the likely duration of any incapacity
of Xxx either party may request a medical examination of Xxx 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 Xxx, the Company
shall give thirty (30) days' advance written notice to that effect to Xxx.
(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 Xxx 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 Xxx 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 Kim's employment hereunder: (1) by
the Company without "cause" (other than upon death or Disability); (2) by Xxx
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 Xxx, Xxx shall be entitled to the following severance
pay and benefits:
(i) Severance Pay - a lump sum amount equal to one half (1/2)
of Kim's 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 Xxx is participating
at the time of termination with the Company continuing to pay its share of
premiums and associated costs as if Xxx continued in the employ of the
Company; provided, however, that the Company's obligation to provide such
coverages shall be terminated if Xxx obtains comparable substitute coverage
from another employer at any time during the Severance Period. Xxx 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
Kim's employment hereunder by the Company on account of Disability, Xxx shall
be entitled to the following severance pay and benefits:
(i) Severance Pay - severance payments in the form of
continuation of Kim's Base Salary as in effect immediately prior to such
termination for a period of 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 Xxx
is suffering from Disability and for a period of three (3) months following
the effective date of Kim's termination by reason of Disability.
(c) Termination Upon Death. In the event of termination of Kim's
employment hereunder on account of Kim's death, Kim's heirs, estate or
personal representatives under law, as applicable, shall be entitled to the
payment of Kim's 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 Kim's life
insurance policy, as provided for in Section 3(h) above. Kim's 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 Kim's employment hereunder for
any reason, Xxx shall be entitled to payment of any unpaid portion of her 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
Xxx fails to honor in accordance with their terms the provisions of Section 6
hereof.
(ii) For purposes only of this Section 5(e), Xxx shall be
treated as having failed to honor the provisions of Section 6 hereof only upon
the vote of two-thirds of the Board following notice of the alleged failure by
the Company to Xxx, an opportunity for Xxx to cure the alleged failure for a
period of thirty (30) days from the date of such notice and Kim's opportunity
to be heard on the issue by the Board.
(f) Registration and/or Buyback of Securities. Not later than
ninety (90) days following termination of this Agreement by Company without
cause (as described in Section 4(a)) or by Xxx 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 document 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 Xxx or purchasable by Xxx 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 Xxx or purchasable by Xxx upon exercise of her outstanding,
vested Incentive Stock Options and Non-Qualified Stock Options in such states
and under such Blue Sky regulations as Xxx xxx reasonably request. In the
event said registration fails to become effective, Xxx shall be permitted to
sell in accordance with the provisions of Rule 144 and the remaining shares
shall be registered in accordance with 3(c) above.
6. Confidential Information and Covenant Not to Compete. All payments
and benefits to Xxx shall be subject to Kim's compliance with this Agreement
and the provisions of this Section 6. However, Kim's 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. Xxx agrees that she 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 7(a) shall not apply to (i) information disclosed in the
performance of Kim's duties to the Company based on her 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 Xxx from a third party who,
based upon inquiry by Xxx, 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 Xxx.
(b) Litigation Support. During the Term of this Agreement, Xxx
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 Xxx, Xxx'x
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 Xxx.
(c) No Solicitation of Employees. Xxx agrees that during the Term
of this Agreement and continuing for a period of one (1) year after
termination under Section 4 herein, neither Xxx nor any person or enterprise
controlled by Xxx, will solicit for employment any person employed by the
Company.
(d) Covenant Not to Compete. Xxx agrees that she 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, Xxx shall not be prohibited during
the noncompetition period applicable above from acting as a passive investor
where she 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
Xxx, the Company agrees to indemnify Xxx to the fullest extent against any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative in which she is made party or is
threatened to be made a party by reason of her 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 Xxx as long as Xxx acted in good faith and
in a manner she 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 her conduct was unlawful. Indemnification
shall extend to all matters that relate to Kim's 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
Xxx, the Company will provide Xxx with a legal defense with counsel of her
choosing against any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative in which
she is made party or is threatened to be made a party by reason of her 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 Xxx. Additionally, upon request by Xxx, the Company will
promptly advance or pay any amounts for costs, charges, or expenses in respect
to her right to a defense and indemnification hereunder. This duty to defend
shall extend to all matters that relate to Kim's affiliation with the Company
beginning from July 15, 1999, and such duty shall survive the termination of
this Agreement. Notwithstanding anything contained herein to the contrary,
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 Xxx, to:
Chairman of the Board Xxxxx X. Xxx
SkyLynx Communications, Inc. 000 Xxxxxxxxx Xxxxxx, #0
000 Xxxxx Xxxxxx Xxxxxx - Xxxxx 000 Xxxxx Xxxx, XX 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 Xxx or of the Company.
11. Non-Assignment; Successors. Neither party hereto may assign her or
its rights or delegate her 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 Xxx 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 Xxx 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 Xxx 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 Xxx or provided to or in respect of Xxx pursuant
to this Agreement shall not be reduced by amounts owing from Xxx to the
Company.
15. Authority. Each of the parties hereto hereby represents that each
has taken or will take 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 Xxx with respect to the subject matter
hereof and supersedes any and all prior agreements or understandings between
Xxx 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 Xxx 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. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
/s/ Xxxxx X. Xxx
-----------------------------------
Xxxxx X. Xxx
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-fifty thousand (25,000)
subscriber, Xxx shall vest in one hundred three thousand three hundred forty
six (103,346) stock options.
(2) Upon obtaining acceptable commitments to fund the Company for a
minimum $30,000,000, Xxx shall vest in one hundred thirty seven thousand
seven hundred ninety five (137,795) 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
( Vendor Financing.
(3) Upon the acquisition of the Company's fifth (5th) Internet Service
Provider, Xxx shall vest in sixty nine thousand fourteen (69,014) stock
options.
(4) Upon obtaining annualized gross revenues of $15,000,000 for the
Company, (based upon last quarter revenues annualized), Xxx shall vest in
seventy seven thousand three hundred forty five (77,345) stock options.
