1
EXHIBIT 10.14
EMPLOYMENT CONTRACT
This Employment Contract (the "Contract"), made and entered into effective
as of the 15th day of March, 1997, is by and between SplitRock Services, Inc., a
Texas corporation (the "Corporation"), and Xxxxxxx X. Xxxxxx ("Employee").
1. Introduction. The Corporation hereby employs Employee to perform the
services described herein and Employee hereby accepts such employment, on the
terms and conditions set forth herein.
2. Position and Duties. Employee hereby agrees to accept and perform
the duties of President of the Corporation and in that capacity agrees to exert
his best efforts to the prosecution of the duties of those offices ("Duties")
and faithfully to perform all such Duties. The Corporation agrees to elect
Employee to, and to employ Employee in, such office for the Employment Term (as
defined below). Employee shall generally have the Duties specified in the Bylaws
of the Corporation as in effect on the date of execution hereof (a copy of which
is attached hereto as Exhibit "A"), and the Corporation may not enlarge or
diminish Employee's Duties or responsibilities hereunder without Employee's
prior written consent.
3. Term. The term of this Contract (the "Employment Term") shall
commence on the date of this Contract and shall end on the fifth anniversary
hereof.
4. Compensation. For Employee's covenants included in this Contract and
for all services rendered by Employee in any capacity during the Employment
Term, including services as an officer, director or member of any committee of
the Corporation or of any subsidiary, division or affiliate thereof, Employee
shall be paid as compensation a base annual salary of not less than $150,000 (a
ratable part of which annual salary shall be payable monthly) with such
increases in such rate as shall be awarded from time to time by the Board of
Directors. Additionally, Employee shall be eligible for the same performance
incentive award that is made available to other officers of the Corporation.
5. Benefits and Working Facilities. During the Employment Term, Employee
shall be furnished with office space, stenographic help, all employee benefits
customarily offered by the Corporation to its senior
2
executive employees, and reimbursement of all expenses incurred in the conduct
of the Corporation's business as are reasonable, prudent and necessary.
Employee shall have the right to reasonable vacation time in accordance with
the Corporation's standard policy. Health and disability insurance coverage
afforded other employees of the Corporation shall be made available to
Employee, subject to his eligibility for such coverage. Upon termination of
Employee's employment for any reason, the Corporation shall transfer any term
life insurance policy which Employer owns to Employee upon Employee's request,
and Employee shall thereafter pay the premiums and reimburse the Corporation
for prepaid premiums, prorated to the date of Employee's termination.
6. Affiliates. During the Employment Term, Employee shall also serve,
without compensation except as hereinafter provided, if and when elected and
reelected, as an officer or director, or both, of any subsidiary or division of
the Corporation or affiliate in which the Corporation holds a majority of the
outstanding equity interests.
7. Performance of Duties. During the Employment Term, Employee shall
devote his best efforts to the business and affairs of the Corporation. It is
understood and agreed that Employee may have other business endeavors which
will require his time and efforts and that he may engage in such business
endeavors without being in default of his Duties or this Agreement. It is
further understood and agreed that Employee shall take reasonable vacations,
may take time off due to illness or incapacity and may devote reasonable
periods required for engaging in charitable, professional, and community
activities, in each case so long as such activities do not interfere with the
proper performance of his Duties hereunder.
8. Termination. (a) The employment relationship between Employee and
the Corporation shall be terminated upon the first to occur of any of the
following events:
(i) the death of Employee;
(ii) the permanent disability of Employee;
-2-
3
(iii) the resignation by Employee, which shall be made by
written notice to the Board specifying an effective date
of such resignation not less than 30 days after the date
of such notice; or
(iv) the termination by the Corporation of Employee's
employment with or without Cause, as defined below, which
shall be made by written notice to Employee specifying an
effective date of such termination and, if with Cause,
specifying such Cause.
(b) As used in this Contract, "Cause" shall mean:
(i) final conviction of Employee for a felony-grade crime or
any crime involving moral turpitude; or
(ii) the willful or grossly negligent violation by Employee of
the provisions of Section 9.
(c) Upon termination of the employment relationship between Employee and
the Corporation for any reason other than (i) by the Corporation with Cause or
(ii) by voluntary resignation by Employee the Corporation will pay Employee the
balance of the base salary remaining to be paid under this Contract and any
incentive awards which have been granted by the Board of Directors.
9. Confidential Information and Inventions. Employee agrees and
covenants to use his best efforts and exercise utmost diligence to protect and
safeguard the trade secrets and confidential and proprietary information of the
Corporation. Employee further agrees and covenants that, except as may be
required by the Corporation in connection with this Contract, or with the prior
written consent of the Corporation, Employee shall not, either during the term
of this Contract or thereafter, use for Employee's own benefit or for the
benefit of another, or disclose, disseminate or distribute to another, any
trade secret or confidential or proprietary information (whether or not
acquired, learned, obtained or developed by Employee alone or in conjunction
with another) of the Corporation or of any other person with whom the
Corporation has a business relationship. All memoranda, notes, records,
drawings, documents or other writings whatsoever made, compiled, acquired or
received by Employee during the Employment Term, arising out of, in connection
with, or related to any
-3-
4
activity or business of the Corporation are and shall continue to be, the sole
and exclusive property of the Corporation, and shall, together with all copies
thereof, be returned and delivered to the Corporation by Employee immediately,
without demand, when Employee ceases to be employed by the Corporation, or at
any time upon the Corporation's demand.
10. Indemnification. The Corporation shall indemnify, and advance
expenses to, Employee (whether or not then employed by the Corporation) against
all judgments, penalties (including excise and similar taxes), fines, amounts
paid in settlement and reasonable expenses actually incurred by Employee in
connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his being or having been a director, officer,
employee or agent of the Corporation (whether or not he continues to be a
director, officer, employee or agent at the time of incurring such expenses and
liabilities) to the extent that indemnification of directors is permitted by
all valid and applicable laws, including, without limitation, Article 2.02-1
of the Texas Business Corporation Act; provided, however, that the Corporation
shall in no event be obligated to indemnify Employee or advance expenses to
Employee in connection with any action, suit or proceeding in which Employee
has been found liable for gross negligence, willful misconduct or an
intentional act. The indemnification and advancement of expenses provided in
this section shall (a) also extend to Employee who while serving as an officer,
director, employee or agent of the Corporation also served at the Corporation's
request as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, (b) not be deemed exclusive of any other rights of Employee arising
under any law, by any agreement or vote of shareholders or directors, by
contract, under any insurance policy maintained by the Corporation, or
otherwise, and (c) not be required if and to the extent that the person
otherwise entitled to payment of such amounts hereunder has actually received
payment therefor under any insurance policy, contract or otherwise. Neither the
amendment or modification of, nor the termination of, this Contract or any
provision hereof shall in any manner terminate, reduce or impair the right of
Employee to be indemnified by the Corporation, or the obligation of the
Corporation to indemnify Employee under and in accordance with the
-4-
5
provisions of this Section 10 as in effect immediately prior to such amendment,
modification or termination with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification,
or termination, regardless of when such claims may arise or be asserted.
11. SURVIVAL OF COVENANTS. In the event of termination of this Contract
for any reason whatsoever, the Corporation shall remain bound by the provisions
of Sections 8(c) and 10 of this Contract and Employee shall remain bound by the
provisions of Section 9 of this Contract.
12. NOTICES. Any notice or other communication hereunder shall be in
writing and shall be delivered by (i) personal delivery, (ii) certified or
registered mail, postage prepaid or (iii) telex or telecopier. Any such notice
shall be deemed given upon its receipt at the following address:
(a) If to Employee:
Xx. Xxxxxxx X. Xxxxxx
---------------------
---------------------
With a copy to:
---------------------
---------------------
---------------------
(b) If to the Corporation:
SplitRock Services, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
With a copy to:
Xxxxxx X. Xxxxx
Xxxxxxxx & Xxxxx, P.C.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Any party may, by notice given in accordance with this Section 12 to the other
party, designate another address or person for receipt of notices hereunder.
-5-
6
13. Parties Bound. This Contract shall inure to the benefit of and be
binding upon the parties hereto, their respective heirs, legal representatives,
successors and permitted assigns. Without limiting the generality of the
foregoing, any corporation into or with which the Corporation shall merge or
consolidate or to which the Corporation shall transfer all or substantially all
of its assets shall be deemed a successor of the Corporation. Neither party may
assign any of its or his rights or obligations under this Contract unless the
other party agrees thereto in writing, provided, however, that this provision
shall not preclude Employee from designating one or more beneficiaries to
receive any amount that may be payable after his death and shall not preclude
the legal representative or his estate from assigning any right hereunder to
the person or persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the laws of
intestacy applicable to his estate.
14. Integration and Amendments. This Contract contains the entire
agreement between the parties, and supersedes all prior and contemporaneous
written or oral agreements and understandings and may be amended only by an
instrument in writing signed by both parties hereto.
15. Captions. The headings herein are for convenience only and shall not
affect the construction hereof.
16. Time of the Essence. The parties agree that time shall be of the
essence in the performance of obligations hereunder.
17. Severability of Provisions. If any provision of this Contract is held
by a court of competent jurisdiction to be illegal, invalid, or unenforceable,
the remainder of the terms, provisions, covenants and restriction of this
Contract shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby, and, in lieu of such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Contract a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable.
-6-
7
18. Governing Law. THIS CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW.
19. Due Authorization. The Corporation represents and warrants to
Employee that the Corporation has all necessary legal power and authority to
execute, deliver and perform this Contract, and has taken all necessary action
authorizing the execution, delivery and performance of same.
20. Alternative Dispute Resolution. The parties hereto agree that if a
dispute arises under this Contract that they will join in a motion requesting
the court with jurisdiction over the dispute to refer the dispute for
resolution by an alternative dispute resolution procedure as established under
Chapter 154 of the Texas Civil Practice and Remedies Code.
21. Fees and Expenses. The parties hereto agree that if a dispute over
the terms or enforcement of this Contract is litigated or is settled by an
alternative dispute resolution procedure, the party that prevails shall be
entitled to recover all fees and expenses incurred in connection with the
dispute, including reasonable fees of attorneys and accountants.
IN WITNESS WHEREOF, the parties hereto have executed this Contract
effective as of the date first above written.
SPLITROCK SERVICES, INC., a Texas
corporation
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name:
Title:
/s/ XXXXXXX X. XXXXXX
-------------------------
XXXXXXX X. XXXXXX
-7-
