JATO COMMUNICATIONS CORP.
EMPLOYMENT AGREEMENT
FOR
XXXXXX X. XXXXXX
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into as of the
1st day of June, 1999, by and between XXXXXX X. XXXXXX ("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 - Marketing and Executive 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 $150,000, payable on a semi-monthly
basis, which will be reviewed
1.
annually at the discretion of the 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 10%
of all stock options 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 enter into a 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 and
except for those activities specifically described in EXHIBIT B. 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
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 50% of any unvested stock options as of
the date of death and the Company shall waive its repurchase rights with
respect to 50% 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, 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.
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
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]
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
JATO COMMUNICATIONS CORP.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
President and Chief Executive Officer
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
EXHIBIT A
JATO COMMUNICATIONS CORP.
NON-COMPETITION PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
NON-COMPETITION, PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
As an employee of JATO Communications Corp., a Delaware corporation, its
subsidiaries or its affiliates (together, the "Company"), and as a condition
of my employment by the Company and in consideration of the compensation now
and hereafter paid to me, I agree to the following (the "Agreement"):
1. MAINTAINING CONFIDENTIAL INFORMATION
(a) COMPANY INFORMATION. I agree at all times during the term of
my employment and thereafter to hold in strictest confidence, and not to use,
except for the benefit of the Company, or to disclose to any person, firm or
corporation, without the written authorization of the Board of Directors of
the Company, any trade secrets, confidential knowledge, data or other
proprietary information of the Company. By way of illustration and not
limitation, this shall include information relating to products, processes,
know-how, methods, software, developmental work, improvements, discoveries,
plans for marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers,
and information regarding the skills and compensation of other employees of
the Company. Notwithstanding the foregoing, confidential information shall
not include any information which:
(i) at the time of disclosure, or thereafter, is generally available to
and known by the public;
(ii) was or is available to me on a non-confidential basis from a source
other than the Company; or
(iii) has been independently acquired or developed by me without
violating any of my obligations under this Agreement, as shown by my
competent written records.
(b) THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive confidential or proprietary
information from third parties subject to a duty on the Company's part to
maintain the confidentiality of such information and, in some cases, to use
it only for certain limited purposes. I agree that I owe the Company and
such third parties, both during the term of my employment and thereafter, a
duty to hold all such confidential or proprietary information in the
strictest confidence and not to, except as is consistent with the Company's
agreement with the third party, disclose it to any person, firm or
corporation or use it for the benefit of anyone other than the Company or
such third party, unless expressly authorized to act otherwise by an officer
of the Company.
2. ASSIGNMENT OF INVENTIONS AND ORIGINAL WORKS.
I agree that I will make prompt written disclosure to the Company, will
hold in trust for the sole right and benefit of the Company, and hereby
assign to the Company all my right, title and interest in and to any ideas,
inventions, original works of authorship, developments, improvements or trade
secrets which I may solely or jointly conceive or reduce to practice, or
cause to be conceived or reduced to practice, during the period of my
employment with the Company and for one (1) year after my employment. This
Agreement will not be deemed to require assignment of any invention developed
entirely on my own time without using the Company's equipment, supplies,
facilities or trade secrets and neither related to the Company's actual or
anticipated business, research or development, nor resulted from work
performed by me for the Company.
3. NO CONFLICTS OR SOLICITATION
For the period of my employment by the Company and for one (1) year
following my termination, I will not interfere with the business of the
Company by (i) 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 other entity engaged in marketing or selling the type of products and
services offered by the Company or (ii) directly soliciting the business of
any customer or client of the Company (other than on behalf of the Company)
for the type of products and services offered by the Company.
4. COVENANT NOT TO COMPETE.
(a) I agree that during my employment with the Company, I will not
directly or indirectly engage in (whether as an employee, consultant,
proprietor, partner, director or otherwise), or have any ownership interest
1
in, or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a "Restricted Business"
in a "Restricted Territory" (as defined below). It is agreed that ownership
of (i) no more than ten percent (10%) of the outstanding voting stock of a
publicly traded corporation or (ii) any stock I presently own or (iii) any
options or other rights to acquire shares of a company's capital stock I
presently own shall not constitute a violation of this provision.
(b) As used herein, the terms:
(i) "Restricted Business" shall mean any competitive local exchange
carrier, high speed data communication services provider or any business
which otherwise engages in any other manner in any business which is
competitive with the Company.
(ii) "Restricted Territory" shall mean all regions within a fifty mile
radius of those cities in which the Company operates, or has disclosed to
you that it intends to operate, a business.
5. RETURN OF COMPANY DOCUMENTS
When I leave the employ of the Company, I will deliver to the Company
(and will not keep in my possession, recreate or deliver to anyone else) any
and all documents and other property, together with all copies thereof (in
whatever medium recorded) belonging to the Company, its successors or assigns
whether kept at the Company, home or elsewhere. I further agree that any
property situated on the Company's premises and owned by the Company,
including disks and other storage media, filing cabinets or other work areas,
is subject to inspection by Company personnel at any time with or without
notice.
6. LEGAL AND EQUITABLE REMEDIES
Because my services are personal and unique and because I may have access
to and become acquainted with the proprietary information of the Company, the
Company shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
7. NOT AN EMPLOYMENT CONTRACT. I agree and understand that nothing in
this Agreement shall confer any right with respect to continuation of my
employment by the Company, nor shall it interfere in any way with my right or
the Company's right to terminate my employment at a ny time, with or without
cause.
8. GENERAL PROVISIONS.
(a) GOVERNING LAW. This Agreement will be governed by and
construed according to the laws of the State of Colorado, excluding conflicts
of laws principles. I hereby expressly consent to the personal jurisdiction
of the state and federal courts located in Colorado for any lawsuit filed
there against me by the Company arising from or relating to this Agreement,
or such other location as the Company's principal executive office may then
be located.
(b) SEVERABILITY. If one or more of the provisions in this
Agreement are deemed unenforceable by law, then the remaining provisions will
continue in full force and effect. Moreover, if any restriction set forth in
Sections 3 or 4 hereof is 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 in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of
activities or geographic area as to which it may be enforceable.
(c) BENEFIT; BINDING EFFECT. This Agreement will be binding upon
my heirs, executors, administrators and other legal representatives and will
be for the benefit of the Company, its successors and its assigns.
(d) SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.
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I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE
DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY'S
PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.
Dated:
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Name
Address
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ACCEPTED AND AGREED TO:
JATO COMMUNICATIONS CORP.
By:
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Name:
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Title:
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EXHIBIT B
PERMITTED OUTSIDE ACTIVITIES
1. Continuation of pre-existing consulting arrangement with Vulcan
Ventures, Vulcan Northwest, or any other subsidiary, company, or
partnership controlled by, or affiliated with, Xxxx Xxxxx or any of his
Vulcan companies. Executive has already given notice of his intent to
withdraw from this assignment on the latter of two occurrences,
July 20, 1999, or the presentation of the project team's findings to
owner Xxxx Xxxxx.
2. Strategic Advisory Board participation in MCSI, a LaJolla,
California-based technology development company. Anticipated time
required is one (1) business day per calendar quarter. Executive agrees
to resign from this assignment as soon as it can be done without loss
of the equity portion of his compensation.
3. Executive may continue to offer his existing syndicated marketing
programs to the cable television industry as long as he is passive in
his participation. In this regard, passive is defined to mean not
taking a lead or active role in the continuing sales and marketing of
the programs, other than that amount of time necessary to employ
someone to discharge these responsibilities. The programs include DISH
HELP, Ctv Updates, Contact, and DATA SPEED. Executive is obligated to
delegate day-to-day responsibilities to existing business partners,
and/or employees of those ventures, and may participate at the board
level, or equivalent, in such a way as to not interfere with his
Company responsibilities.
4. Executive is involved with a partnership anticipating the purchase of
two operating cable television systems in Battlement Mesa and
Parachute, Colorado, and will act as a passive partner and strategic
advisor with no operating responsibilities. This partnership, or an
additional one involving Interface Communications Group, may purchase
or develop other cable television assets in the future but Executive's
role will remain unchanged.
5. Executive is a participant with an effort to provide video, high-speed
Internet access, and potentially other telecommunications services to
multiple dwelling units (MDUs) in the Denver metropolitan area in
association with Interface Communications Group, and another entity
that owns fifty (50) percent of the equity in this venture and is
responsible for the day-to-day operation of the business. Executive
participates as an investor and strategic advisor.
A-1