JATO COMMUNICATIONS CORP.
EMPLOYMENT AGREEMENT
FOR
XXX XXXX
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into as of the 29th
day of November , 1999, by and between Xxx Xxxx ("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. Subject to terms set forth herein, for a period of one (1)
year the Company agrees to employ Executive in the position of Vice
President, Indirect Markets hereby accepts such employment effective as of
the date first written above. 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 or the Executive's supervisor (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.
2. COMPENSATION.
2.1 SALARY. Executive shall receive for services to be rendered
hereunder an annualized base salary of $12,500 per month reviewed annually at
the discretion of the
1
Compensation Committee of the Board of Directors. Executive's base salary
shall be increased annually by an amount equal to the greater of (i) 5% of
Executive's base salary and (ii) an amount determined by the Board of
Directors.
2.2 DISCRETIONARY BONUS. Executive will be eligible for a
discretionary bonus, in an amount to be determined solely by the Compensation
Committee in its discretion, subject to the terms and conditions outlined in
a Company bonus plan, which may be established and in effect from time to
time.
2.3 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.
2.4 ACCELERATION OF STOCK RIGHTS. In the event that the Company
consummates an Acquisition or Asset Transfer, as those terms are defined in
the Company's Restated Certificate of Incorporation, then the vesting of 100%
of all stock options and/or grants unvested at the time of such Acquisition
or Asset Transfer held by Executive shall accelerate.
3. PROPRIETARY INFORMATION OBLIGATIONS.
3.1 AGREEMENT. Executive agrees to continue to abide by Executive's
previously executed Non-competition, Proprietary Information and Inventions
Agreement attached hereto as EXHIBIT A.
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
2
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
within seven (7) days of receipt of such notice; 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. 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
2.2 hereof with respect to the annual period in which the death occurs.
Furthermore, Executive shall vest in 100% of any unvested stock options as of
the date of death and the Company shall waive its repurchase rights with
respect to 100% 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. CONTINUATION OF EMPLOYMENT/RESTRICTIVE COVENANT. During the term of
Executive's employment and for a period of twelve (12) months immediately
following Executive's termination for Cause or the Executive's resignation,
Executive shall not without first obtaining the prior written approval of the
Company, directly or indirectly engage or prepare to engage, in any
activities in competition with the Company, or accept employment or establish
a business relationship with a business that directly competes with the
Company in providing high speed data transmission services in a market in
which the Company has at least one (1) operational DSLAM or at least one (1)
central office colocation under construction.
7. NONSOLICITATION. While employed by the Company, and for twelve (12)
months immediately following the Executive's termination of employment,
Executive agrees not to interfere with the business of the Company by
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 competitor of
the Company.
3
8. GENERAL PROVISIONS.
8.1 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.
8.2 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.
8.3 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.
8.4 COMPLETE AGREEMENT. This Agreement and EXHIBIT A 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.
8.5 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.
8.6 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.
8.7 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.
8.8 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.
8.9 CHOICE OF LAW. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the law of the State
of Delaware.
8.10 SURVIVAL. The following provisions of this Agreement shall survive
the termination of Executive's employment and the assignment of this
Agreement by the Company
4
to any successor in interest or other assignee: Section 2; Section 3;
Section 6; Section 7; and Section 8.
8.11 INJUNCTIVE RELIEF. Executive acknowledges that the restrictions
set forth in Sections 3, 4, 6 and 7 above are necessary to protect the
Company's confidential proprietary information and other legitimate business
interests and are reasonable in all respects, including duration, territory
and scope of activity restricted. Executive further acknowledges that the
provisions of Sections 3, 4, 6 and 7 hereof are essential to the Company,
that the Company would not enter into this Agreement if it did not include
these provisions and that damages sustained by the Company as a result of a
breach of these provisions cannot be adequately remedied by damages, and
Executive agrees that the Company, in addition to any other remedy it may
have under this Agreement or at law, shall be entitled to injunctive and
other equitable relief to prevent or curtail any breach of Sections 3, 4, 6
and 7 of this Agreement. Executive agrees that the existence of any claim or
cause of action by Executive against the Company or its affiliates, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of any of the provisions of Sections 3, 4, 6
and 7 hereof. Executive shall have no right to enforce any of his rights
under this Agreement by seeking or obtaining injunctive or other equitable
relief and acknowledges that damages are an adequate remedy for any breach by
the Company of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
5
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
JATO COMMUNICATIONS CORP.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
Vice President, Human Resources
By: /s/ Xxxxxx X. Xxxx
--------------------------------------
Xx. Xxxxxx X. Xxxx
6
