Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into the 4th
day of August, 1999 by and between Log on America, Inc., a Delaware corporation
("Corporation"), and Xxxxxxx X. Xxxxxxx, a Maine resident ("Employee").
WHEREAS, Corporation and Employee desire that the term of this Agreement
begin on the date of execution hereof ("Effective Date").
WHEREAS, Corporation desires to employ Employee as its Executive Vice
President, Retail Dial-Up Services, and Employee is willing to accept such
employment by Corporation, on the terms and subject to the conditions set forth
in this Agreement.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Duties. During the term of this Agreement, Employee agrees to be
employed by and to serve Corporation as its Executive Vice President, Retail
Dial-Up Services, and Corporation agrees to employ and retain Employee in such
capacity. Employee shall devote a substantial portion of his business time,
energy, and skill to the affairs of the Corporation as Employee shall report to
the Corporation's Chief Executive Officer and at all times during the term of
this Agreement shall have powers and duties at least commensurate with his
position as Director, Retail Dial-Up Services. Employee's job description is
attached hereto as Exhibit A.
Section 2. Term of Employment.
a. Definitions. For the purposes of this Agreement the following terms
shall have the following meanings:
(1) "Termination For Cause" shall mean termination by Corporation of
Employee's employment by Corporation by reason of Employee's willful dishonesty
towards, fraud upon, or deliberate injury or attempted injury to, Corporation or
by reason of Employee's willful material breach of this Agreement which has
resulted in material injury to Corporation.
(2) "Termination Other Than For Cause" shall mean termination by
Corporation of Employee's employment by Corporation (other than in a Termination
for Cause) and shall include constructive termination of Employee's employement
by reason of material breach of this Agreement by Corporation, such constructive
termination to be effective upon notice from Employee to Corporation of such
constructive termination.
(3) "Voluntary Termination" shall mean termination by Employee of
Employee's employment by Corporation other than (i) constructive termination as
described in subsection 2.1(b), and (ii) termination by reason of Employee's
death or disability as described in Section 2.5 and 2.6.
b. Initial Term. The term of employment of Employment by Corporation shall
be for a period of three (3) year beginning with Effective Date ("Initial
Term"). Thereafter, the contract will automatically be renewed for successive
periods of one (1) year unless terminated by either party upon thirty (30) days
prior written notice.
c. Termination For Cause. Termination For Cause may be effected by
Corporation at any time during the term of this Agreement and shall be effected
by written notification to Employee. Upon Termination For Cause, Employee shall
promptly be paid all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension play or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Corporation in which Employee is a participant
to the full extent of Employee's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by Employee in connection with
his duties hereunder, all to the date of termination, but Employee shall not be
paid any other compensation or reimbursement of any kind, including without
limitation, severance compensation.
d. Termination Other Than For Cause. Notwithstanding anything else in this
Agreement, Corporation may effect a Termination Other Than For Cause at any time
upon giving written notice to Employee of such termination. Upon any Termination
Other Than For Cause, Employee shall promptly be paid all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of the Corporation in
which Employee is a participant to the full extent of Employee's rights under
such plans (including accelerated vesting, if any, of awards granted to Employee
under the Corporation's stock option plan), accrued vacation pay and any
appropriate business expenses incurred by Employee in connection with his duties
hereunder, all to the date of termination, and all severance compensation
provided in Section 4.2, but no other compensation or reimbursement of any kind.
e. Termination by Reason of Disability. If, during the term of this
Agreement, Employee, in the reasonable judgment of the President and/or the
Chief Executive Officer, has failed to perform his duties under this Agreement
on account of illness or physical or mental incapacity, and such illness or
incapacity continues for a period of more than three (3) consecutive months,
Corporation shall have the right to terminate Employee's employment hereunder by
written notification to Employee and payment to Employee of all accrued salary,
bonus compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Corporation in which Employee is a participant to the full extent of Employee's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by Employee in connection with his duties hereunder, all to
the date of termination, with the exception of medical and dental benefits which
shall continue through the expiration of this Agreement, but Employee shall not
be paid any other compensation or reimbursement of any kind, including without
limitation, severance compensation.
f. Death. In the event of Employee's death during the term of this
Agreement, Employee's employment shall be deemed to have terminated as of the
last day of the month during which his death occurs and Corporation shall
promptly pay to his estate or such beneficiaries as Employee may from time to
time designate all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Corporation in which Employee is a participant
to the full
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extent of Employee's rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by Employee in connection with his duties
hereunder, all to the date of termination, but Employee's estate shall not be
paid any other compensation or reimbursement of any kind, including without
limitation, severance compensation.
g. Voluntary Termination. In the event of a Voluntary Termination,
Corporation shall promptly pay all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which Employee is a
participant to the full extent of Employee's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, but no
other compensation or reimbursement of any kind, including without limitation,
severance compensation.
h. Notice of Termination. Corporation may effect a termination of this
Agreement pursuant to the provisions of this Section upon giving thirty (30)
days' written notice to Employee of such termination, except in the case of
Termination For Cause where five (5) days' notice shall be deemed sufficient.
Employee may effect a termination of this Agreement pursuant to the provisions
of this Section upon giving thirty (30) days' written notice to Corporation of
such termination.
Section 3. Salary, Benefits and Bonus Compensation.
a. Base Salary. (1) As payment for the services to be rendered by Employee
as provided in Section 1 and subject to the terms and conditions of Section 2,
Corporation agrees to pay to Employee a "Base Salary" for the thirty six (36)
calendar months beginning the Effective Date at the rate of $100,000 per annum
payable in a manner consistent with the general practice of the Corporation in
meeting its payroll obligations subject to withholding required by law.
(2) The Base Salary shall be increased by the Compensation Committee
of the Company's Board of Directors, annually, to be effective on the
anniversary of the Effective Date, in manner consistent with the compensation
offered to executives within the Company.
b. Bonuses. Employee shall be eligible to receive a stock options in a
manner consistent with the incentive stock option agreement of even date hereof
("Incentive Stock Option Agreement").
c. Additional Benefits. During the term of this Agreement, Employee shall
be entitled to the following fringe benefits:
(1) Employee Benefits. Employee shall be eligible to participate
in such of Corporation's benefits as are now generally available or later made
generally available to executive officers of the Corporation, including, without
limitation, any dental and medical plans. For purposes of establishing the
length of service under any benefit plans or programs of Corporation, Employee's
employment with the Corporation will be deemed to have commenced on the
Employee's date of hire.
(2) Vacation. Employee shall be entitled to 3 weeks vacation during
each year during the term of this Agreement and any extensions thereof, prorated
for partial
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years.
(3) Reimbursement for Expenses. During the term of this Agreement,
Corporation shall reimburse Employee for reasonable and properly documented
out-of-pocket business and/or entertainment expenses incurred by Employee in
connection with his duties under this Agreement.
Section 4. Severance Compensation.
x. Xxxxxxxxx Compensation in the Event of a Termination Other Than for
Cause. In the event Employee's employment is terminated in a Termination Other
Than for Cause, the Employee shall be paid as severance compensation 50% of his
then current annual Base Salary (at the rate payable at the time of such
termination), together with the vested rights to purchase 25,000 shares of the
common stock of the Company at $15.00 per share pursuant to the terms of the
Incentive Stock Option.
b. No Severance Compensation Upon Other Termination. In the event of a
Voluntary Termination, Termination For Cause, termination by reason of
Employee's disability pursuant to Section 2.6, Employee or his estate shall not
be paid any severance compensation.
Section 5. Payment Obligations. Corporation's obligation to pay Employee
the compensation and to make the arrangements provided herein shall be
unconditional, and Employee shall have no obligation whatsoever to mitigate
damages hereunder.
Section 6. Board of Directors. During the term of Employee's employment,
Employee shall have the right to have himself or his nominee be appointed and
elected as a member of the Company's Board of Directors to serve at all times
during Employee's employment. Upon his termination, Employee shall resign or
cause his nominee to resign as a member of the Company's Board of Directors.
Section 7. Confidentially. Employee agrees that all confidential and
proprietary information relating to the business of Corporation shall be kept
and treated as confidential both during and after the term of this Agreement,
except as may be permitted in writing by Corporation's President and/or Chief
Executive Officer or as such information is within the public domain or comes
within the public domain without any breach of this Agreement.
Section 8. Non-Competition. (a) the Employee hereby covenants and agrees
that at no time during the Employee's employment by the Company, or in the event
of Employee's Termination Other Than For Cause, for a period of two (2) years
immediately following the termination thereof, will the Employee for himself or
on behalf of any other person, partnership, company or corporation, directly or
indirectly (i) acquire any financial or beneficial interest in, provide
consulting services to, be employed by, contract with, or own, manage, operate
or control any business engaged in any business which directly or indirectly
engages in the business of the business conducted by the Company in the New
England states and the State of New York, (ii) employ or seek to employ any
person or entity employed at that time by the Company or otherwise encourage or
entice such person or entity to leave employment or terminate such employment or
(iii) solicit any customer of the Company. Nothing in this Agreement shall
prevent the Employee from holding or investing in securities
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listed on a national securities exchange or sold in the over-the-counter market,
provided such investments do not exceed in the aggregate on percent (1%) of the
issued and outstanding capital stock of a corporation described in this
Section.
(b) In the event that this Section shall be determined by arbitrators or by
any court of competent jurisdiction to be unenforceable by reason of its
extending for too great a period of time or over too large a geographic area or
over too great a range of activities, it shall be interpreted to extend only
over the maximum period of time, geographic area or range of activities as to
which it may be inforceable.
Section 9. Withholdings. All compensation and benefits to Employee
hereunder shall be reduced by all federal, state, local and other withholdings
and similar taxes and payments required by applicable law.
Section 10. Indemnification. In addition to any rights to indemnification
to which Employee is entitled to under the Corporation's Articles of
Incorporation and Bylaws, Corporation shall indemnify Employee at all times
during and after the term of this Agreement to the maximum extent permitted
under the Delaware Business Corporation Act or any successor provision thereof
and any other applicable state law, and shall pay Employee's expenses in
defending any civil or criminal action, suit, or proceeding in advance of the
final disposition of such action, suit or proceeding, to the maximum extent
permitted under such applicable state laws.
Section 11. Notices. Any notices permitted or required under this Agreement
shall be deemed given upon the date of personal delivery or forty-eight (48)
hours after deposits in the United States mail, postage fully prepaid, return
receipt requested, addressed to the Corporation at:
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: Chief Financial Officer
addressed to the Employee at:
0 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx 00000
or at any other address as any party may, from time to time, designate by notice
given in compliance with this Section.
Section 12. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Rhode Island.
Section 13. Titles and Captions. All section titles or captions contained
in this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
Section 14. Entire Agreement. This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.
Section 15. Agreement Binding. This Agreement shall be binding upon the
heirs.
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executors, administrators, successors and assigns of the parties hereto.
Section 16. Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
Section 17. Computation of Time. In computing any period of time pursuant
to this Agreement, the day of the act, event or default from which the
designated period of time begins to run shall be included, unless it is a
Saturday, Sunday, or a legal holiday, in which event the period shall begin to
run on the next day which is not a Saturday, Sunday, or legal holiday, in which
event the period shall run until the end of the next day thereafter which is not
a Saturday, Sunday, or legal holiday.
Section 18. Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular, or plural
as the identity of the person or persons may require.
Section 19. Arbitration. If at any time during the term of this Agreement
any dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in Providence, Rhode Island in accordance with the then
prevailing commercial rules of the American Arbitration Association, and
judgment upon the award rendered by the arbiter may be entered in any court
having jurisdiction thereof.
Section 20. Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
Section 21. Further Action. The parties hereto shall execute and deliver
all documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of the Agreement.
Section 22. Parties in Interest. Nothing herein shall be construed to be to
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
Section 23. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
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Section 24. Separate Counsel. The parties acknowledge that the Corporation
and the Employee have not been represented in this transaction by the
Corporation's attorneys, and the Employee has been advised that it is important
for the Employee to seek separate legal advise and representation in this
matter.
IN WITNESS WHEREOF, the parties have executed this agreement as of the day
and date first set forth above.
/s/ Xxxxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- ------------------------------
Witness: Xxxxxxx X. Xxxxxxx
Print Name: Xxxxxxxxx X. Xxxxxx
Log on America, Inc.
By: /s/ Xxxxx X. Paolo
---------------------------
Xxxxx X. Paolo, President
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Exhibit A
Job Description
During the term of this Employment Agreement, Xxxxxxx X. Xxxxxxx as the
Executive Vice President of the Retail Dail-Up Division of Log On America, Inc.,
shall be responsible for such Division's day-to-day operations and its
expansion, whether through an increased subscription base or through directed
acquisition of subscribers. Xx. Xxxxxxx will xxxxxx with the Chief Executive
Officer as such officer from time to time requests reporting on technical
performance, profit/loss, expansion plans and capital needs for same.
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