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EXHIBIT 10.1
EMPLOYMENT AGREEMENT OF XXXXXX XXXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into
effective the 1st day of February, 1999, by and between Electronic Transmission
Corporation, a Delaware corporation (the "Company"), and Xxxxxx Xxxxxxx (the
"Employee").
RECITALS
WHEREAS, the Employee desires to become employed by the Company and the
Company desires to employ the Employee;
WHEREAS, the Company and the Employee mutually desire to enter into and
formalize their employment relationship by entering into this Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises herein
contained, the employment of the Employee, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, the parties do hereby agree as follows:
AGREEMENTS
1. EMPLOYMENT AND DUTIES. The Company hereby employs the Employee and
the Employee hereby accepts employment with the Company upon the terms and
conditions hereinafter set forth. During the Initial Term (as hereinafter
defined) and any renewal or extension of this Agreement, Employee shall be
employed in the capacity of President and Chief Executive Officer. In such
capacity, Employee shall be responsible for all day to day duties and
responsibilities customarily associated with the offices of President and Chief
Executive Officer.
2. TERM. The term of this Agreement shall be from January 1, 1999,
until January 31, 2000 (the "Initial Term"), unless otherwise terminated in
accordance with Section 7 hereof. In the event of termination, Employee shall be
entitled to the compensation more particularly described in Section 7 hereof.
This Agreement shall automatically renew for two (2) additional terms of one (1)
year each, unless terminated by either party by written notice to the other
party sixty (60) days prior to the end of the Initial Term or any subsequent
term, as applicable.
3. COMPENSATION. The Company agrees to pay compensation to Employee as
follows:
(a) The Company shall pay to Employee Fifty Thousand
and No/100 Dollars ($50,000.00) upon the execution of this
Agreement as compensation for services rendered from October
5, 1998, to January 31, 1999.
(b) The Company shall pay to Employee an initial
monthly base pay (the "Base Salary") of Twenty-Five Thousand
and No/100 Dollars ($25,000.00) payable at the regular payroll
intervals of all other management level employees of the
Company. The Company shall review such Base Salary for
potential increase on an annual basis.
EMPLOYMENT AGREEMENT OF XXXXXX XXXXXXX PAGE 1
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(c) In addition to the Base Salary, the Employee
shall be entitled to receive bonuses and benefits payable
under any executive compensation and bonus arrangements, as
developed by the Board of Directors.
4. STOCK OPTIONS.
4.1 GRANT. Effective on the date of the commencement of the
second renewal term, the Employee shall receive a fully vested option
to purchase 3.00% of the shares of the Company's common stock
calculated on a fully diluted basis, if the Employee is employed with
the Company on the date of grant. The exercise price of this option
shall be the average trading price of the stock on the date of the
grant. The right to exercise this option shall be fully vested and last
for ten years from the date of the grant.
4.2 GENERAL PROVISIONS. The Company now holds and will hold a
sufficient number of its common stock shares to satisfy the
requirements of the stock options granted hereunder. The Employee
agrees that these options are non-transferrable and shall be purchased
for investment and not distribution. Further, the Employee consents to
a restrictive legend being placed upon the stock issued hereunder.
However, the Company agrees to remove said legend upon compliance with
Rule 144 of the Securities and Exchange Commission, and further agree
that it shall "piggyback" any stock issued or optioned hereunder onto a
registration of other stock of the Company unless the Company receives
an opinion of the underwriters that the inclusion of this stock in such
a registration would hinder the successful distribution of the other
stock so registered. The options shall be exercised by written notice
given in accordance with Section 11.1 of this Agreement. Delivery of
the certificates representing the shares granted and purchased under
these options shall be made promptly after receipt of such notice,
against the payment of the purchase price in cash or by certified check
or by cashier's check.
5. EXTENT OF SERVICE. During the term of this Agreement, and except for
illness or incapacity, the Employee shall devote full business time, attention
and energy to the duties more specifically outlined in this Agreement, and such
other duties as the Company's Board of Directors require consistent with this
Agreement, and shall not during the term of employment hereunder be engaged in
any business activity which substantially interferes with Employee's fulfillment
of his duties and obligations under this Agreement; provided, however, that
nothing in this Agreement shall preclude the Employee from devoting reasonable
time during reasonable periods required for any or all of the following:
(i) providing services as a consultant to third parties;
(ii) personal investments; and
(iii) charitable activities.
6. CONFIDENTIALITY. The Employee recognizes and acknowledges that
Employee will have access to certain confidential information of the Company and
that such information constitutes valuable, special and unique property of the
Company. The Employee will not, during or after the term of this Agreement,
disclose any of such
EMPLOYMENT AGREEMENT OF XXXXXX XXXXXXX PAGE 2
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confidential information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, except to authorized
representatives of the Company, pursuant to valid court order, to the extent
already publicly disclosed other than as a result of disclosure by Employee, in
connection with any litigation between Employee and the Company, or as otherwise
permitted under this Agreement. The Employee recognizes and agrees that
violation of any of the agreements contained in this Section 6 will cause
irreparable damage or injury to the Company, the exact amount of which would be
impossible to ascertain, and that, for such reason, among others, the Company
shall be entitled to an injunction, without the necessity of posting bond
therefor, restraining any further violation of this Agreement. The rights to any
injunction shall be in addition to, and not in limitation of, any other rights
and remedies the Company may have against the Employee, including, but not
limited to, the recovery of damages. For purposes of this Agreement, the term
"confidential information" means information of any kind, nature, and
description disclosed to, discovered by or otherwise known by the Employee as a
direct or indirect consequence of or through his employment with the Company,
not generally known in the business in which the Company is or may become
engaged, about the Company, any clients of the Company (past, present, or
future), or the Company's business.
7. TERMINATION.
7.1 DEATH. In the event of the Employee's death during the
term of employment hereunder, this Agreement shall automatically
terminate and the Company shall pay to the executor or administrator of
the Employee's estate six (6) monthly installments (or portions
thereof) of Base Salary from the date on which Employee dies, plus any
earned, but unpaid bonuses. Thereafter, the Company shall have no
further liability to the Employee or Employee's executors or
administrators for compensation or other benefits or obligations. The
Employee's designated beneficiary will be entitled to receive the
proceeds of any life or other insurance or other death benefit programs
provided in this Agreement.
7.2 DISABILITY. The following terms shall apply in the event
of a disability of Employee:
(a) The terms "disabled" and "disability" shall mean
the inability of Employee to regularly perform the normal
duties assigned to him by the Board of Directors for a period
of ninety (90) consecutive days or an aggregate of one hundred
eighty (180) days in a twelve (12) month period.
(b) In the event Employee shall become disabled
during the term of this Agreement, as hereinabove defined,
Employee shall be entitled to receive on a monthly basis
whatever benefits are available under any policy of insurance
in effect from time to time, if any, plus the difference
between (i) the amount of any benefits payable under any
policy of insurance in effect and (ii) the Base Salary being
paid to Employee for such months. Such disability benefits
beyond benefits payable under any policy of insurance shall be
available for six (6) months. Thereafter, for a period of five
(5) years, Employee shall be entitled to receive from the
Company the difference between (x) the amount of any benefits
payable and (y) 50% of
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the Base Salary being paid to Employee for such five (5) year
period. A recurrence of a disability from the same or related
cause within six (6) months following Employee's resumption of
regular full-time employment shall be deemed a continuation of
disability and Employee shall be entitled to no more than the
unused portion, if any, of the original six (6) months
benefit.
7.3 TERMINATION FOR CAUSE. In the event the Employee (i) fails
to observe or perform any of the material duties required under this
Agreement and such failure continues for thirty (30) business days
following written notice to Employee specifying in reasonable detail
the nature of such breach and Employee shall not have taken steps
sufficient to cure such failure within the thirty (30) business days
following written notice, (ii) commits an unexcused violation of the
Company's Code of Conduct Policy, after any applicable notice,
hearings, or opportunities to cure as are available under such policy,
or (iii) otherwise violates any material provision of this Agreement
and such failure continues for thirty (30) business days following
written notice to Employee specifying in reasonable detail the nature
of such breach and Employee shall not have taken steps sufficient to
cure such failure within the thirty (30) business days following
written notice, the Company may immediately, or at any time thereafter,
terminate the Employee's employment under this Agreement for cause by
written notice to Employee, effective upon receipt. During such thirty
(30) day period, the Company shall afford Employee and his counsel an
opportunity to meet with the Board of Directors to discuss the alleged
violations. In addition, if the Employee commits any felony or any
other crime involving moral turpitude, the Company may immediately, or
at any time thereafter, terminate the Employee's employment under this
Agreement for cause. In the event of a termination of the Employee's
employment in accordance with the provisions of this Section 7.3, upon
payment by the Company to the Employee of all installments (or portions
thereof) of salary accrued to the date of such termination along with
any accrued, but unpaid, bonus or executive compensation, the Company
shall have no further obligations to the Employee except as set forth
herein. Termination "without cause" means termination of Employee's
employment other than as provided in Sections 7.1, 7.2, or this Section
7.3.
7.4 SEVERANCE PAYMENTS. If (i) the Company terminates the
Employee's employment following a Change of Control, as hereinafter
defined, or if after a Change of Control the Employee remains employed
with the Company, but not with equal or greater responsibilities, (ii)
the Employee terminates this Agreement for Good Reason, or (iii) the
Company terminates the Employee without cause (individually or
collectively a "Terminating Event"), the Company shall, after such
termination, pay to the Employee a lump sum equivalent to the sum of
(A) the Base Salary for the number of months left in the then present
term calculated in accordance with the provisions of Section 3(b)
hereof, plus (B) twelve (12) months' Base Salary calculated in
accordance with the provisions of Section 3(b) hereof. In addition,
after a Terminating Event, all options under Section 4 of this
Agreement shall be granted and vest, if not already vested, and be
exercisable over a period of 18 months, and all fringe benefit plans in
which Employee is a participant shall remain in effect for 12 months.
For purposes of this Agreement, a "Change of
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Control" shall be deemed to have occurred if, after the effective date
of this Agreement (i) any person (within the meaning of Section
13(d)(3) of the Securities and Exchange Act of 1934, as amended)
("Person") other than Employee, is or becomes the beneficial owner,
directly or indirectly, of 50% or more of the Company's common stock,
(ii) any Person makes a tender offer and consummates the acquisition of
50% or more of the outstanding voting securities of the Company, (iii)
the Company shall be merged or consolidated with another corporation
and as a result of such merger or consolidation less than 50% of the
outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the former shareholders of the
Company, or (iv) the Company shall sell all or substantially all of its
assets to another corporation which is not a wholly-owned subsidiary
of, or wholly controlled by, the Company. For purposes of this
Agreement, resignation for "Good Reason" shall mean (a) the resignation
of the Employee after the Company, without express written consent of
the Employee, materially breaches this Agreement to the substantial
detriment of Employee, and the Company fails to cure such material
breach within thirty (30) days of written notice from Employee
specifying in reasonable detail the nature of such breach, or (b) in
connection with a Change of Control the title, duties, or
responsibilities of the Employee are reduced.
7.5 FINAL PAYMENT. The parties agree that upon payment of the
amounts owed or to be owed to Employee at the time of termination of
this Agreement, or otherwise in accordance with this Agreement, the
Company shall have no further obligations to Employee, except for the
continuation of medical benefits, to the extent provided by the
Company, as required by applicable law.
8. INDEMNIFICATION. The Company shall have in effect a directors and
officers liability policy which covers Employee. In addition, the Company shall
indemnify the Employee to the fullest extent permitted by the Delaware General
Corporation Law, including the provisions of Section 145 thereof. This
indemnification requires the advance of expenses to the Employee, as permitted
in Section 145.e. The parties to this Agreement further agree that this
Agreement has been negotiated by each in an arm's length transaction, and that
each has been represented by counsel in the negotiation and execution of the
Agreement.
9. FRINGE BENEFITS. The Company will provide the Employee with existing
and future fringe benefits as are provided to other employees of the Company of
a similar level and station, all according to Company policy enacted and in
effect from time to time. Notwithstanding the foregoing, the Employee shall
always receive the following benefits:
(a) The Company will include the Employee under the Company's
group term life insurance policy in an amount equal to three times the
annual salary of the Employee under this Agreement. The Company shall
pay all premiums for such coverage.
(b) The Company will provide disability insurance to Employee
on the same basis and to the extent provided to all of the Company's
employees.
(c) The Employee shall be eligible to participate in the
Company's 401(k) plan in accordance with the terms of such plan.
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(d) The Employee shall be entitled to five (5) weeks paid
vacation per calendar year (any unused vacation will not accrue to a
subsequent year).
(e) The Company will provide Employee with the use of a
Company cellular telephone for Company business.
(f) The Company will pay to or on behalf of the Employee or
reimburse Employee an automobile allowance of Eight Hundred Fifty and
No/100 Dollars ($850.00) per month.
(g) The Company will bear the reasonable cost of an annual
physical examination of the Employee by the physicians or clinic of the
Employee's choice.
(h) The Employee shall participate in all insurance (medical,
dental, surgical, hospital) adopted by the Company, including dependent
coverage. The Company shall pay all premiums for such coverage.
(i) The Company will make an annual contribution of Three
Thousand and No/100 Dollars ($3,000.00) to a charity designated by
Employee.
(j) The Company will bear the cost of personal tax planning
and accounting services of the Employee in an amount not to exceed Five
Thousand and No/100 Dollars ($5,000.00) per year.
(k) The Company will reimburse the Employee for expenses
attributable to the Employee's home office in an amount not to exceed
Three Thousand and No/100 Dollars ($3,000.00) per year.
(l) The Company will reimburse the Employee for the fees
necessary to maintain the member benefits of the Employee at the La
Cima Club.
(m) The Company will reimburse the Employee for the fees
necessary to maintain the member benefits of the Employee at a health
club.
10. EXPENSES. The Company shall reimburse the Employee for any
reasonable travel or other expenses incurred by Employee in rendering services
hereunder so long as such expenses are properly reported and verified in
accordance with the Company's normal procedures with respect to such expenses
within a reasonable time after the time such expenses are incurred.
11. COVENANT NOT TO COMPETE. The Employee agrees that during the term
of this Agreement, and for a period of one (1) year thereafter, Employee shall
not compete directly or indirectly with the business of the Company, nor own,
directly or indirectly, any part of or become the employee of or otherwise
render services to, any enterprise which directly or indirectly competes with
the business of the Company, unless employee could have acted in such capacity
while employed with the Company.
12. COVENANT NOT TO SOLICIT. The Employee agrees that during the term
of this Agreement, and for a period of one (1) year thereafter, Employee shall
not directly or indirectly solicit any of the accounts, clients, employees, or
customers of the Company for a competitor or in competition with the Company.
For purposes of this Agreement, the
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term "accounts" shall mean any person or business entity for which the Company
has performed services or to which the Company has sold products during the
period beginning at the Company's inception and ending on the date of
termination of the Employee's employment.
13. INJUNCTIVE RELIEF. The Employee agrees that the limitations set
forth herein on Employee's rights to compete with the Company during the period
of and after termination of employment are reasonable and necessary for the
protection of the goodwill and business interests of the Company. The Employee
further recognizes and agrees that violation of any of the agreements contained
in Section 11 and/or 12 will cause irreparable damage or injury to the Company,
the exact amount of which would be impossible to ascertain, and that, for such
reason, among others, the Company shall be entitled to an injunction, without
the necessity of posting bond therefor, restraining any further violation of
this Agreement. The rights to any injunction shall be in addition to, and not in
limitation of, any other rights and remedies the Company may have against the
Employee, including, but not limited to, the recovery of damages. Further, it is
agreed by the Employee that in the event that the provisions of Section 11
and/or 12 should ever be deemed to exceed the time, geographic, or scope of
activity limitations permitted by applicable law, then such provisions shall be
reformed to the maximum limitations permitted and thereafter enforced as
reformed.
14. GENERAL PROVISIONS.
14.1 NOTICES. Except as otherwise provided herein, all
notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given if delivered personally, given by telecopy,
facsimile, prepaid telex or telegram or mailed first class, postage
prepaid, certified United States mail, return receipt requested, to the
party to receive such notice, request, demand or communication at such
party's address set forth on the signature page hereof, provided that,
any party may change its address for notice by giving to the other
party written notice of such change. Any notice given under this
Section 14.1 shall be effective (i) if delivered personally, when
delivered, (ii) if sent by telecopy, facsimile, telex or telegram, 24
hours after sending, and (iii) if mailed, 48 hours after mailing.
14.2 GOVERNING LAW; VENUE; INTERPRETATION; SECTION HEADINGS.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Texas. The section headings
contained herein are for purposes of convenience only, and shall not be
deemed to constitute a part of this Agreement or to affect the meaning
or interpretation of this Agreement in any way. Venue for any dispute
under this Agreement shall be in Dallas County, Texas.
14.3 SEVERABILITY. Should any provision of this Agreement be
held unenforceable or invalid under the laws of the United States of
America or the State of Texas or under any other applicable laws of any
other jurisdiction, then the parties hereto agree that such provision
shall be deemed modified for purposes of
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performance of this Agreement in such jurisdiction to the extent
necessary to render it lawful and enforceable, or if such a
modification is not possible without materially altering the intention
of the parties hereto, then such provision shall be severed herefrom
for purposes of performance of this Agreement in such jurisdiction. The
validity of the remaining provisions of this Agreement shall not be
affected by any such modification or severance.
14.4 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the
transactions contemplated hereby, and supersedes all prior agreements,
written or oral, arrangements and understandings relating to the
subject matter hereof. No representation, promise, inducement or
statement of intention has been made by any party hereto which is not
embodied in this Agreement, and no party hereto shall be bound by or
liable for any alleged representation, promise, inducement or statement
of intention not so set forth.
14.5 BINDING EFFECT; ASSIGNMENT. The rights of the Company
hereunder shall inure to the benefit of its successors and assigns. The
Employee may not assign or delegate rights or obligations hereunder.
14.6 AMENDMENT; WAIVER. This Agreement may be amended,
modified, superseded or canceled, and any of the terms, provisions,
covenants or conditions hereof may be waived, only by a written
instrument executed by all parties hereto, or, in the case of a waiver,
by the party waiving compliance. The failure of any party at any time
or times to require performance of any provision hereof shall in no
manner affect the right to enforce the same. No waiver by any party of
any condition contained in this Agreement, or of the breach of any
term, provision or covenant contained in this Agreement, in any one or
more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach, or as a waiver of
any other condition or of the breach of any other term, provision or
covenant.
14.7 ATTORNEYS' FEES. In the event a party must hire a lawyer,
bring suit or otherwise seek enforcement of any provisions of this
Agreement, the prevailing party shall receive from the non-prevailing
party payment for all attorneys' fees, court costs, expert witness
fees, and other costs of enforcement in connection herewith and
therewith.
14.8 GENDER; NUMBERS. All references in this Agreement to the
masculine, feminine or neuter genders shall, where appropriate, be
deemed to include all other genders. All plurals used in this Agreement
shall, where appropriate, be deemed to be singular, and vice versa.
14.9 COUNTERPARTS. The Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement shall be binding when one or more
counterparts hereof, individually or taken together, shall bear the
signatures of the parties reflected hereon as signatories.
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14.10 MEDIATION. In the event that a dispute arises under this
Agreement, other than a dispute entitling a party to injunctive or
equitable relief hereunder, the Employee and the Company agree to
submit the matter to nonbinding mediation prior to seeking redress in
the courts. Nothing in this Section 14.10 is intended to impact a
parties' rights under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written, but to be effective as set forth above.
"COMPANY"
ELECTRONIC TRANSMISSION CORPORATION, A
DELAWARE CORPORATION
By: /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxxxxxxxx, Executive Vice
President and Chief Operating Officer
Address: 0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
"EMPLOYEE"
/s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx
Address: 000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
EMPLOYMENT AGREEMENT OF XXXXXX XXXXXXX PAGE 9
