EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made this 7th day of August, 1997,
by and between CONVERGENT COMMUNICATIONS, INC., a Colorado corporation whose
address is 00 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000
("Employer" or the "Company") and XXXXXX X. XXXXXXX an individual whose address
is 0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000 ("Employee").
R E C I T A L S
A. Employer desires to hire and employ Employee as Executive Vice
President and General Counsel of Employer, as provided herein; and
B. Employee desires to be employed by Employer as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Employee and Employee
hereby agrees to be employed by the Company and/or such of its subsidiaries and
affiliate corporations as determined by the Company on a full-time basis, for
the period and upon the terms and conditions hereinafter set forth.
2. CAPACITY AND DUTIES. Employee shall be employed as Executive Vice
President and General Counsel of Employer and each of its subsidiaries. During
his employment, Employee shall perform the duties and bear the responsibilities
commensurate with his position and as directed by the Chief Executive Officer
and the Board of Directors of the Company and shall serve the Company faithfully
and to the best of his ability.
3. COMPENSATION AND BENEFITS.
3.1 The Company shall pay Employee during the Term of this
Agreement an initial annual base salary, payable semi-monthly in arrears. The
initial annual base salary shall be One Hundred Twenty-Five Thousand Dollars
($125,000.00). The Board of Directors of the Company may increase that amount
from time to time in their discretion.
3.2 In addition to his base salary, the Company, during the Term
of this Agreement, shall pay Employee a performance bonus for each fiscal year
of the Company after the end of the fiscal year, in an exact amount to be
determined by
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the Board of Directors of the Company. The target bonus will be one hundred
percent (100%) of Employee's annual base salary. This bonus may be adjusted
based upon performance and as determined by the Board of Directors of the
Company.
3.3 Throughout the Term of this Agreement, the Company shall
provide Employee a monthly car allowance in the amount of $500.00.
3.4 In addition to salary as provided above, the Company shall
provide Employee during the Term of this Agreement, with the benefits of such
insurance plans, hospitalization plans, stock plans, retirement plans and other
employee fringe benefits (including sick leave and four (4) weeks annual
vacation time) as shall be generally provided to similar positions within the
Company and for which Employee may be eligible under the terms and conditions
thereof. The Company reserves the right to modify, delete or change its
benefits at any time.
3.5 Throughout the Term of this Agreement, the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in connection with the business of the Company and in performance of
his duties under this Agreement, upon presentation to the Company by Employee of
an itemized accounting of such expenses with reasonable supporting data.
3.6 The Company will provide to Employee from time to time stock
options under the Company's Incentive Stock Option Plans. Employee initially
will have the option to purchase a total of Three Hundred Thousand (300,000)
shares of the Company's no par value common stock ("Common Stock"), which shares
will vest as to twenty percent (20%) of the total on each twelve (12) month
anniversary of the date of granting of the options. The xxxxx xxxxx will be
$2.50 per share.
4. TERM. The term ("Term") of this Agreement shall commence on
September 15, 1997 and shall continue for an initial term of five (5) years
(through September 15, 2002). Thereafter, the Term of this Agreement shall
continue on an annual basis, from year to year, unless and until either party
terminates the Agreement pursuant to Section 5 below. The applicable provisions
of Sections 6, 7, 8, 9 and 10 shall remain in full force and effect as provided
and for the time periods specified in such Sections notwithstanding the
termination of this Agreement; all other obligations of either party to the
other under this Agreement shall terminate at the end of the Term.
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5. TERMINATION.
5.1 If, during the Term of this Agreement, Employee dies or is
prevented from performing his duties by reason of illness or incapacity for one
hundred forty (140) days in any one hundred eighty (180) day period, the Company
may terminate this Agreement, upon thirty (30) days prior notice thereof to
Employee or his duly appointed legal representative.
5.2 The Company or the Employee may terminate this Agreement upon
at least thirty (30) days prior notice to Employee upon the happening of any of
the following events:
5.2.1 The sale by the Company of substantially all of its
assets to a single purchaser or associated group of purchasers who are not
affiliates of the Company. For the purposes of this Agreement, the term
"affiliate" means a person, firm or corporation that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with the Company.
5.2.2 The sale, exchange or other disposition in one
transaction of eighty percent (80%) or more of the outstanding voting stock
of the Company to or with a person, firm or corporation not then an affiliate
of the Company.
5.2.3 The merger or consolidation of the Company in a
transaction not involving an affiliate of the Company in which the
shareholders of the Company receive less than fifty percent (50%) of the
outstanding voting stock of the new continuing corporation.
5.2.4 A bona fide decision by the Company to terminate its
business and liquidate its assets (but only if such liquidation is not part
of a plan to carry on the Company's business through its shareholders).
5.3 The Company may terminate this Agreement at any time for
gross negligence or material non-performance by Employee of any duty as an
executive officer of the Company which continues for a period of thirty (30)
days after written notice specifying such negligence or non-performance.
5.4 The Company may terminate this Agreement immediately upon the
commission of a violation of any federal law, rule or regulation, or any theft,
fraud, embezzlement or similar crime involving the commission of any felony, or
for a
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material breach of any obligation or covenant created by or under this
Agreement.
5.5 Employer or Employee may terminate this Agreement without
cause upon at least thirty (30) days prior notice.
5.6 If this Agreement is terminated (i) by the Company or Employee
under subsection 5.2; or (ii) by the Company under subsections 5.1 or 5.5 above,
during the Term, or any renewal Term, the Company shall pay Employee a
termination fee ("Termination Fee") equal to Employee's monthly salary at the
time of termination multiplied by twenty-four (24). In addition, the Company
shall continue to provide Employee with all employee benefits that were being
provided at the time of termination for a period of twelve (12) months from the
date of termination. No Termination Fee shall be paid to Employee in the event
that this Agreement is terminated for any other reason, including, without
limitation, pursuant to subsections 5.3, 5.4 or without cause by Employee
pursuant to subsection 5.5 herein.
6. NON-INTERVENTION.
6.1 During the Term of this Agreement (or, if longer, during the
term of Employee's employment with the Company or any of its affiliates) and for
a period of twelve (12) months after termination of this Agreement (or, if
longer, termination of Employee's employment with the Company or any of its
affiliates), Employee shall not (i) directly or indirectly cause or attempt to
cause any employee of the Company or any of its affiliates to leave the employ
of the Company or any affiliate, (ii) in any way interfere with the relationship
between the Company and any employee or between an affiliate and any employee of
the affiliate, (iii) directly or indirectly hire any employee of the Company or
any affiliate to work for any organization of which Employee is an officer,
director, employee, consultant, independent contractor or owner of an equity or
other financial interest, or (iv) interfere or attempt to interfere with any
transaction in which the Company or any of its affiliates was involved during
the Term of this Agreement or Employee's employment, which ever is longer.
6.2 EMPLOYEE AGREES THAT, BECAUSE OF THE NATURE AND SENSITIVITY OF
THE INFORMATION TO WHICH HE WILL BE PRIVY AND BECAUSE OF THE NATURE AND NATIONAL
AND INTERNATIONAL SCOPE OF THE COMPANY'S BUSINESS, THE RESTRICTIONS IN THIS
SECTION 6 ARE FAIR AND REASONABLE.
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7. CONFIDENTIAL INFORMATION.
7.1 The relationship between the Company and Employee is one of
confidence and trust. This relationship and the rights granted and duties
imposed by this Section shall continue until a date two (2) years from the date
Employee's employment is terminated.
7.2 As used in this Agreement (i) "Confidential Information" means
information disclosed to or acquired by Employee about the Company's plans,
products, processes and services including the Services and any Relevant Area,
including information relating to research, development, inventions,
manufacturing, purchasing, accounting, engineering, marketing, merchandising,
selling, pricing and tariffed or contractual terms, customer lists and prospect
lists or other market information, with respect to any of the Company's then
current business activities; and (ii) "Inventions" means any inventions,
discoveries, concepts and ideas, whether patentable or not, including, without
limitation, processes, methods, formulas, and techniques (as well as related
improvements and knowledge) that are based on or related to Confidential
Information, that pertain in any manner to the Company's then currently used
technology, expertise or business and that are made or conceived by Employee,
either solely or jointly with others, and while employed by the Company or
within six (6) months thereafter, whether or not made or conceived during
working hours or with the use of the Company's facilities, materials or
personnel.
7.3 Employee agrees that he shall at no time during the term of
his employment or at any time for a period of ten (10) years thereafter disclose
any Confidential Information, Inventions or component thereof to any person,
firm or corporation to any extent or for any reason or purpose or use any
Confidential Information or component thereof for any purpose other than the
conduct of the Company's business.
7.4 Any Confidential Information, Invention or component thereof
that is directly or indirectly originated, developed or perfected to any degree
by Employee during the term of his employment by the Company shall be and remain
the sole property of the Company and shall be deemed trade secrets of the
Company.
7.5 Upon termination of Employee's employment pursuant to any of
the provisions herein, Employee or his legal representative shall deliver to the
Company all originals and all duplicates and/or copies of all documents,
records, notebooks,
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and similar repositories of or containing Confidential Information or subject
matter then in his possession, whether prepared by him or not.
7.6 EMPLOYEE AGREES THAT THE COVENANTS AND AGREEMENTS CONTAINED IN
THIS SECTION 7 ARE FAIR AND REASONABLE AND THAT NO WAIVER OR MODIFICATION OF
THIS SECTION OR ANY COVENANT OR CONDITION SET FORTH HEREIN SHALL BE VALID UNLESS
SET FORTH IN WRITING AND DULY EXECUTED BY THE PARTIES HERETO. EMPLOYEE AGREES
TO EXECUTE SUCH SEPARATE AND FURTHER CONFIDENTIALITY AGREEMENTS EMBODYING AND
ENLARGING UPON THE PROVISIONS OF THIS SECTION 7 AS THE COMPANY MAY REASONABLY
REQUEST.
8. INJUNCTIVE RELIEF. Upon a breach or threatened breach by Employee
of any of the provisions of Sections 6 or 7 of this Agreement, the Company shall
be entitled to an injunction restraining Employee from such breach without a
showing of damage as irreparable harm. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies for such breach or
threatened breach, including recovery of damages from Employee.
9. NO WAIVER. A waiver by the Company of a breach of any provision of
this Agreement by Employee shall not operate or be construed as a waiver of any
subsequent or other breach by Employee.
10. SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such Section in the particular jurisdiction in which
such adjudication is made.
11. NOTICES. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed given if
mailed by first class mail, postage prepaid, certified or return receipt
requested to the addresses set forth above, or last known address.
12. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Colorado.
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13. ASSIGNMENT. The Company may assign its rights and obligations under
this Agreement to any affiliate of the Company or, subject to the provisions of
Section 5, to any acquirer of substantially all of the business of the Company,
and all covenants and agreements hereunder shall inure to the benefit of and be
enforceable by or against any such assignee. Neither this Agreement nor any
rights or duties hereunder may be assigned or delegated by Employee.
14. AMENDMENTS. No provision of this Agreement shall be altered,
amended, revoked or waived except by an instrument in writing, signed by each
party to this Agreement.
15. BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
16. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding of the parties and supersedes all prior understandings,
agreements or representations by or between the parties, whether written or
oral, which relate in any way to the subject matter hereof.
18. ARBITRATION. ANY DISPUTE ARISING OUT OF THIS AGREEMENT, THE
EMPLOYEE'S APPLICATION FOR EMPLOYMENT, THE EMPLOYEE'S RELATIONSHIP WITH THE
COMPANY, OR THE EMPLOYEE'S EMPLOYMENT OR SEPARATION FROM EMPLOYMENT SHALL BE
SUBJECT TO ARBITRATION PURSUANT TO THE COMPANY'S ARBITRATION PROCEDURES. THE
EMPLOYEE ACKNOWLEDGES THAT A COPY OF THE PROCEDURES HAVE BEEN DELIVERED TO AND
READ BY THE EMPLOYEE PRIOR TO THE TIME HE/SHE EXECUTED THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONVERGENT COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Chief Executive
Officer
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EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Dated: August 7, 1997
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