EXHIBIT 10.11
EMPLOYMENT AGREEMENT
AGREEMENT dated as of August 18, 1998, by and between NETWORK ACCESS
SOLUTIONS, INC., a Virginia corporation ("NAS" or the "Company"), and XXX XXXX
(the "Executive").
In consideration of the mutual covenants herein contained and of the mutual
benefits herein provided, the Company and the Executive agree as follows:
1. REPRESENTATIONS AND WARRANTIES. The Executive represents and warrants
to the Company that Executive is not bound by any restrictive covenants and has
no prior or other obligations or commitments of any kind that would in any way
prevent, restrict, hinder or interfere with Executive's acceptance of continued
employment or the performance of all duties and services hereunder to the
fullest extent of the Executive's ability and knowledge. The Executive agrees
to indemnify and hold harmless the Company for any liability which the Company
may incur as the result of the existence of any such covenants, obligations or
commitments.
2. TERM OF EMPLOYMENT. The Company will continue to employ the Executive
and the Executive accepts continued employment by the Company on the terms and
conditions herein contained for a period (the "Employment Period") provided in
paragraph 5.
3. DUTIES AND FUNCTIONS.
(a) (1) The Executive shall be employed as Vice President, Operations
and Engineering of the Company and shall oversee and direct activities within
those departments of the Company. The Executive shall report directly to the
Chief Operating Officer ("COO").
(2) The Executive agrees to undertake the duties and
responsibilities inherent in the position of Vice President, Operations and
Engineering, which may encompass different or additional duties as may, from
time to time, be assigned by the Board. The Executive agrees to abide by the
rules, regulations, instructions, personnel practices and policies of the
Company and any change thereof which may be adopted at any time by the Company.
(b) During the Employment Period, the Executive will devote his full
time and efforts to the business of the Company and will not engage in
consulting work or any trade or business for his own account or for or on behalf
of any other person, firm or corporation which competes, conflicts or interferes
with the performance of his duties hereunder in any way. The Executive may
engage in non-competitive business or charitable activities for reasonable
periods of time each month so long as such activities do not interfere with the
Executive's responsibilities under this Employment Agreement.
4. COMPENSATION.
(a) Base Salary: As compensation for his services hereunder, during
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the Executive's employment, the Company agrees to pay the Executive a base
salary at the rate of $125,000 per annum, payable in accordance with the
Company's normal payroll schedule, or on such other periodic basis as may be
mutually agreed upon. Such salary shall be subject to annual review, based on
corporate policy and contributions made by Executive to the enterprise. As a
result of each annual review, the Executive's salary will increase by a minimum
of five percent (5%). Said annual salary increase will commence, effective July
31, 1999, and continue annually on July 31st thereafter. The Company may
withhold from any amounts payable under this Agreement such federal, state or
local taxes as shall be required to be withheld pursuant to any applicable law
or regulation.
(b) Bonus: Executive shall be eligible to receive an annual cash
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and/or stock bonus award with a target bonus of 20% of the Executive's then
current salary. Said bonus is contingent upon the Executive achieving
deliverables or goals agreed to by the Executive and the Board or Compensation
Committee. Said bonus shall be determined by the Board or Compensation
Committee and paid annually in December. The Executive's bonus for calendar
year 1998 shall be prorated to take into account the partial year of the
Executive's employment with the Company.
(c) Other Expenses: In addition to the compensation provided for
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above, the Company agrees to pay or to reimburse the Executive during his
employment for all reasonable, ordinary and necessary, properly vouchered,
client-related business or entertainment expenses incurred in the performance of
his services hereunder in accordance with Company policy in effect from time to
time, provided, however, that the amount available to the Executive for such
travel, entertainment and other expenses may require advance approval by the
Chief Operating Officer (or senior most position of the Company). The Executive
shall submit vouchers and receipts for all expenses for which reimbursement is
sought.
(d) Vacation: The Executive shall be allowed three (3) weeks of paid
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vacation during each calendar year.
(e) Car Allowance: The Company shall provide the Executive with an
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automobile expense allowance of $500 per month, regardless of the Executive's
ownership of an automobile.
(f) Fringe Benefits: In addition to his compensation provided by the
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foregoing, the Executive shall be entitled to the benefits available generally
to Company employees pursuant to Company programs, including, by way of
illustration, personal leave, paid holidays, sick leave, profit-sharing,
retirement, disability, dental, vision, group sickness, accident or health
insurance programs of the Company which may now or, if not terminated, shall
hereafter be in effect, or in any other or additional such programs which may be
established by the Company, as and to the extent any such programs are or may
from time to time be in effect, as determined by the Company and the terms
hereof.
5. EMPLOYMENT PERIOD; TERMINATION.
(a) The Executive's employment shall continue unabated until
terminated by either party pursuant to the terms of this Agreement.
(b) The Executive's employment under this Agreement shall be effective
as of the date of this Agreement and shall continue until terminated upon the
earlier to occur of the following events: (i) the close of business on the
fourth anniversary of this Agreement or (ii) the death or permanent disability
(as defined in Paragraph 5 (f)) of the Executive, provided, however, that, on
the fourth anniversary of the date of this Agreement, and on every subsequent
annual anniversary, and unless either party has given the other party written
notice at least thirty (30) days prior to the such anniversary date, the term of
this Agreement and the Employment Period shall be renewed for a term ending one
(1) year subsequent to such date, unless sooner terminated as provided herein.
(c) Notwithstanding the provisions of paragraphs 5 (a) and (b) above,
the Executive may terminate the employment relationship at any time for any
reason by giving the Company written notice at least thirty (30) days prior to
the effective date of termination. Unless otherwise provided by this Section,
all compensation and benefits paid by the Company to the Executive shall cease
upon his last day of employment. However, if the Executive terminates his
employment due to a material breach of this Employment Agreement by the Company
or due to a material reduction in the responsibilities or reporting relationship
of the Executive, the Company will continue to pay the Executive's base salary,
bonus compensation and medical benefits for up to twelve (12) months. The
Executive acknowledges and agrees that the non-compete restrictions set forth in
Section 7 of this Employment Agreement will remain in full force and effect for
the twelve (12) month period after the termination of his employment. At its
sole election and discretion, the Company may release the Executive from the
non-compete restrictions of this Agreement. If said election is made, the
Company will continue to pay the Executive's base salary, a pro-rated bonus and
medical benefits for a six (6) month period.
(d) If the Executive's employment is terminated "for cause," the
Executive will not be entitled to and shall not receive any compensation or
benefits of any type following the effective date of termination. As used in
this Agreement, the term "for cause" shall include a termination for
insubordination, dishonesty, conviction of a felony, a willful unauthorized
disclosure of confidential information, a violation of any material Company
rule, regulation or policy, which has a materially adverse impact to the
Company, or a breach of any material obligation under this Agreement, including,
without limitation, willful refusal to perform the Executive's duties hereunder,
except in the event that the Executive becomes permanently disabled as set forth
in paragraph 5 (f). Anything herein to the contrary notwithstanding, the
Company shall give the Executive written notice prior to terminating this
Agreement of the Executive's material breach of this Agreement, setting forth
the exact nature of any alleged breach and the conduct required to cure such
breach. The Executive shall have thirty (30) days from the giving of such
notice within which to cure, and shall be entitled to appear before the Board to
discuss such written notice of material breach. Notwithstanding the foregoing,
actions or inactions on the part of the Executive which were taken or not taken
in good faith shall not constitute a material breach of this agreement.
(e) Upon sixty (60) days written notice, the Company shall retain the
right to terminate the Executive without cause. If the Executive's employment
is terminated by the Company without cause, the Executive shall continue to
receive his base salary, bonus and medical benefits for a period of twelve (12)
months. The Executive acknowledges and agrees that the non-compete restrictions
set forth in Section 7 of this Employment Agreement will remain in full force
and effect for the twelve (12) month period subsequent to his termination. At
its sole election and discretion, the Company may release the Executive from the
non-compete restrictions of this Agreement. If said election is made, the
Company will continue to pay the Executive's base salary, a pro-rated bonus and
medical benefits for a six (6) month period.
(f) In the event the Executive becomes permanently disabled during
employment with the Company, the Company may terminate this Agreement by giving
thirty (30) days notice to the Executive of its intent to terminate, and unless
the Executive resumes performance of the duties set forth in Paragraph 3 within
five (5) days of the date of the notice and continues performance for the
remainder of the notice period, this Agreement shall terminate at the end of the
thirty (30) day period. The Executive will not be entitled to and shall not
receive any compensation or benefits of any type following the effective date of
termination. "Permanently disabled" for the purposes of this Agreement means
the inability, due to physical or mental ill health, to perform the Executive's
duties for one hundred eighty (180) days during any one employment year
irrespective of whether such days are consecutive.
(g) This Agreement will terminate immediately upon the Executive's
death and no further compensation or benefits of any type will be paid to the
Executive or his heirs thirty (30) days following the date of the Executive's
death, except that bonuses earned but not paid prior to the Executive's death
will be paid.
6. COMPANY PROPERTY. All correspondence, records, documents, software,
promotional materials, and other Company property, including all copies, which
come into the Executive's possession by, through or in the course of his
employment, regardless of the source and whether created by the Executive, are
the sole and exclusive property of the Company, and immediately upon the
termination of the Executive's employment, the Executive shall return to the
Company all such property of the Company.
7. NON-COMPETITION.
(a) The Executive agrees that while he is in the employ of the Company
and for a one year period after the termination of his employment, he shall not,
either on his own behalf or on behalf of any third party, except on behalf of
the Company, directly or indirectly:
(1) Other than through his ownership of stock of the Company, as
an individual proprietor, partner, stockholder, officer, employee,
director, joint venturer, investor, lender, or in any other capacity
whatsoever (other than as the holder of not more than one percent (1%) of
the total outstanding stock of a publicly held company), engage directly in
any business in markets where NAS has a physical office that competes
against NAS for its existing or potential customer base at the time of
departure; or
(2) Attempt in any manner to solicit from a current client or
customer of the Company at the time of his termination, business of the
type performed by the
Company or to persuade any client of the Company to cease to do business or
to reduce the amount of business which any such client has customarily done
or actively contemplates doing with the Company; or
(3) Recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company or its affiliates to terminate their
employment with, or otherwise cease their relationship with the Company or
its affiliates.
(b) The parties agree that the relevant public policy aspects of
covenants not to compete have been discussed, and that every effort has been
made to limit the restrictions placed upon the Executive to those that are
reasonable and necessary to protect the Company's legitimate interests.
(c) If any restriction set forth in Section 7 are found by any court
of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or geographic area, it
shall be interpreted to extend over the maximum period of time, range of
activities or geographic areas as to which it may be enforceable.
(d) The restrictions contained in Section 7 are necessary for the
protection of the business and goodwill of the Company and/or its affiliates and
are considered by the Executive to be reasonable for such purposes. The
Executive agrees that any material breach of Section 7 will cause the Company
and/or its affiliates substantial and irrevocable damage and therefore, in the
event of any such breach, in addition to such other remedies which may be
available, the Company shall have the right to seek specific performance and
injunctive relief. The Executive acknowledges that he will receive compensation
for the terms of Section 7 pursuant to various stock option agreements which
will be executed between the Executive and the Company.
(e) The provisions of Section 7 shall survive termination of this
Agreement.
8. PROTECTION OF CONFIDENTIAL INFORMATION. The Executive agrees that all
information, whether or not in writing, relating to the business, technical or
financial affairs of the Company and that it is generally understood in the
industry as being confidential and/or proprietary information, is the exclusive
property of the Company. The Executive agrees to hold in a fiduciary capacity
for the sole benefit of the Company all secret, confidential or proprietary
information, knowledge, data, or trade secret ("Confidential Information")
relating to the Company or any of its affiliates or their respective clients,
which Confidential Information shall have been obtained during his employment
with the Company. The Executive agrees that he will not at any time, either
during the Term of this Agreement or after its termination, disclose to anyone
any Confidential Information, or utilize such Confidential Information for his
own benefit, or for the benefit of third parties without written approval by an
officer of the Company. Executive further agrees that all memoranda, notes,
records, data, schematics, sketches, computer programs, prototypes, or written,
photographic, magnetic or other documents or tangible objects compiled by him or
made available to him during the Term of his employment concerning the business
of the Company and/or its clients shall be the property of the Company and shall
be delivered to the Company on the termination of his employment, or at any
other time upon request of the Company.
9. INTELLECTUAL PROPERTY. During the Term of this Agreement, the
Executive will disclose to the Company all ideas, concepts, inventions, product
ideas, new products, discoveries, methods, software, business plans and business
opportunities developed by him during working time through the use of Company
resources, which relate directly or indirectly to the Company's business or the
business of any of its affiliates or their respective clients, including without
limitation, any process, product or product improvement, product ideas, new
products, discoveries, methods or software which may or may not be patentable or
copyrightable, any trade names, trademarks or slogans. The Executive agrees
that such will be the property of the Company and that he will at the Company's
request and cost do whatever is necessary to secure for the Company the rights
thereto by patent, copyright or otherwise.
10. PUBLICITY. Neither party shall issue without consent of the other
party any press release or make any public announcement with respect to this
Agreement or the employment relationship between them.
11. BINDING AGREEMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their heirs, personal representatives,
successors and assigns. In the event the Company is acquired, is a non
surviving party in a merger, or transfers substantially all of its assets, this
Agreement shall not be terminated and the transferee or surviving company shall
be bound by the provisions of this Agreement. The parties understand that the
obligations of the Executive xxxx personal and may not be assigned by him.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the Executive and the Company with respect to employment of the Executive and
supersedes any and all prior understandings, written or oral. This Agreement
may not be amended, waived, discharged or terminated orally, but only by an
instrument in writing. By entering into this Agreement, the Executive certifies
and acknowledges that he has carefully read all of the provisions of this
Agreement and that he voluntarily and knowingly enters into said Agreement.
13. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed
severable from the remainder of this Agreement, and the remaining provisions
contained in this Agreement shall be construed to preserve to the maximum
permissible extent the intent and purposes of this Agreement. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
14. GOVERNING LAW AND SUBMISSION TO JURISDICTION. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
Commonwealth of Virginia, without giving effect to the principles of conflicts
of law thereof.
15. NOTICES. Any notice provided for in this Agreement shall be provided
in writing. Notices shall be effective from the date of service, if served
personally on the party to whom notice is to be given, or on the second day
after mailing, if mailed by first class mail, postage prepaid. Notices shall be
properly addressed to the parties at their respective addresses or to such other
address as either party may later specify by notice to the other.
16. ARBITRATION. The parties agree that any controversy, claim or dispute
arising out of or relating to this Agreement, or the breach thereof, or arising
out of or relating to the
employment of the Executive, or the termination thereof, including any statutory
or common law claims under federal, state, or local law, shall be resolved by
arbitration in Fairfax, Virginia in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association. The parties agree that
any award rendered by the arbitrator shall be final and binding, and that
judgment upon the award may be entered in any court having jurisdiction thereof.
17. INDEMNIFICATION. The Company shall indemnify and hold harmless the
Executive for any liability incurred by reason of any act or omission performed
by the Executive while acting in good faith on behalf of the Company and within
the scope of the authority of the Executive pursuant to this Agreement and under
the rules and policies of the Company, except that the Executive must have in
good faith believed that such action was in the best interest of the Company and
such course of action or inaction must not have constituted gross negligence,
fraud, willful misconduct, or breach of a fiduciary duty.
18. MISCELLANEOUS.
(a) No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver
or consent given by the Company on any one occasion shall be effective only in
that instance and shall not be construed as a bar or waiver of any right on any
other occasion.
(b) The captions of the sections of this Agreement are for convenience
of reference only and in no way define, limit or affect the scope or substance
of any section of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered under seal, by its authorized officers or
individually, on the 18th day of August, 1998.
NETWORK ACCESS SOLUTIONS, INC.
/s/ Xxxxxxxx Xxxx
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Xxxxxxxx Xxxx
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/s/ Xxx Xxxx
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Xxx Xxxx (Executive)
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