EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 23rd day of
September, 1998 by and between ICG TELECOM GROUP, INC. ("Employer" or the
"Company") and XXXXXXX X. XXXX ("Employee").
RECITALS
WHEREAS, Employer desires to hire and employ Employee as President of
Employer, or in such other position with Employer or an affiliate corporation of
Employer as Employer may from time-to-time decide, as provided herein; and
WHEREAS, Employee desires to be employed by Employer as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. Employment. The Company agrees to employ Employee and Employee hereby
agrees to be employed by the Company or by such of its affiliate corporations as
determined by the Company, on a full-time basis, for the period and upon the
terms and conditions hereinafter set forth.
2. Capacity and Duties. Employee will be employed as President of Employer
or such other position as Employer shall decide. Employee will also be elected
Executive Vice President of the Employer's parent, ICG Communications, Inc.,
subject to the approval of the Board of Directors of such entity. Employee will
make himself available to provide to ICG Communications, Inc. such services as
such entity shall request of him. During his employment, Employee shall perform
the duties and bear the responsibilities commensurate with his position and
shall serve the Employer faithfully and to the best of his ability. Employee
shall devote 100% of his working time to carrying out his obligations hereunder.
3. Compensation and Benefits.
3.1 The Company will pay Employee during the Term of this Agreement an
annual base salary, payable in accordance with customary Company
procedures. The annual base salary will be Two Hundred Twenty-Five Thousand
and 00/100 Dollars ($225,000.00).
3.2 In addition to the base salary, Employee shall be eligible for an
annual performance bonus in an exact amount to be determined by the
Company. The annual bonus will be based on objectives and goals set for the
Company (the annual bonus is expected to be approximately forty-five
percent (45%) of annual base salary if all objectives and goals are met).
3.3 In addition to salary and bonus payments as provided above, the
Company will provide Employee, during the Term of this Agreement, with the
benefits of such insurance plans, hospitalization plans, stock plans,
retirement plans and other employee fringe benefits as shall be generally
provided to senior executive officers of the Company (including sick leave
and four (4) weeks vacation time) and for which Employee may be eligible
under the terms and conditions thereof.
3.4 Throughout the Term of this Agreement, the Company shall provide
Employee a monthly car allowance in the amount of Seven Hundred and 00/100
Dollars ($700.00). The Company will gross up Employee's income to offset
the tax impact of the car allowance.
3.5 Throughout the Term of this Agreement, the Company will reimburse
Employee for all reasonable out-of-pocket expenses incurred by Employee in
connection with the business of the Company and the performance of his
duties under this Agreement, upon presentation to the Company by Employee
of an itemized accounting of such expenses with reasonable supporting data.
3.6 The Company will provide to Employee from time to time stock
options under ICG Communications, Inc.'s Incentive Stock Option Plan.
Employee will receive a grant of Thirty Thousand (30,000) stock options
relating to the stock of the Company's ultimate parent, ICG Communications,
Inc., upon employment with an exercise price equal to the closing price of
ICG Communications, Inc.'s common stock on September 23, 1998 pursuant to
and subject to the terms and conditions of (including vesting schedule) the
1998 ICG Incentive Stock Option Plan.
3.7 The Company will pay Employee certain relocation expenses
associated with Employee's relocation from Dallas, Texas to the Denver,
Colorado metropolitan area. This reimbursement will be pursuant to the Tier
One Relocation Policy of the Company and such expenses shall be grossed up
one time for taxes, if applicable.
4. Term. The initial term of this Agreement shall be for one (1) year,
commencing on September 23, 1998 ("Initial Term"). Upon completion of the first
(12) twelve months of the Term, this Agreement will automatically renew from
month to month such that there will always be twelve (12) months remaining in
the Term, unless and until either party shall give at least (30) thirty days
notice to the other of his or its intention to terminate this Agreement. The
applicable provisions of Section 6, 7, 8, 9 and 10 shall remain in full force
and effect as provided and for the time periods specified in such Sections
notwithstanding the termination of this Agreement; all other obligations of
either party to the other under this Agreement shall terminate at the end of the
Term.
5. Termination.
5.1 If Employee dies during the Term of this Agreement, the Company
shall pay his estate the compensation that would otherwise be payable to
him for the remaining term of this Agreement.
5.2 If, during the Term of this Agreement, Employee is prevented from
performing his duties by reason of illness or incapacity for one hundred
forty (140) days in any one hundred eighty (180) day period, the Company
may terminate this Agreement, upon thirty (30) days prior notice thereof to
Employee or his duly appointed legal representative.
5.3 The Company may terminate this Agreement at any time during the
Term upon the happening of any of the following events:
5.3.1 The sale by the Company of substantially all of its assets
to a single purchaser or associated group of purchasers who are not
affiliates of the Company.
5.3.2 The sale, exchange or other disposition in one or more
related transactions resulting in a change of ownership of fifty
percent (50%) or more of the outstanding voting stock of the Company
to or with a person, firm or corporation not then an affiliate of the
Company.
5.3.3 The merger or consolidation of the Company in a transaction
not involving an affiliate of the Company in which the shareholders of
the Company receive less than fifty percent (50%) of the outstanding
voting stock of the new continuing corporation.
5.3.4 A bona fide decision by the Company to terminate its
business and liquidate its assets (but only if such liquidation is not
part of a plan to carry on the Company's business through its
shareholders).
For the purpose of this Agreement, the term "affiliate" means a person, firm or
corporation that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the Company.
5.4 The Company may terminate this Agreement immediately for gross
negligence or intentional misconduct by the Employee.
5.5 The Company may terminate this Agreement immediately upon the
commission by Employee of theft, fraud, embezzlement or any other felony or
upon a material breach by Employee of any obligation or covenant created by
or under this Agreement.
5.6 Employee may terminate this Agreement upon at least thirty (30)
days prior notice to the Company upon the happening of any of the events
described in Section 5.3 above.
5.7 If this Agreement is terminated by the Company under Section 4 or
Section 5.3 or by Employee under Section 5.6 during the Term hereof, the
Company will pay Employee a Termination Fee equal to Employee's then
current monthly base salary multiplied by twelve (12) plus an amount
equivalent to twelve (12) months of COBRA premiums. Such Termination Fee
will be paid in twelve (12) equal installments with the exception of the
COBRA equivalent payment which will be paid in a lump sum.
6. Covenant Not to Compete.
6.1 During the Term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for
a period of twelve (12) months after termination of this Agreement (or, if
later, termination of Employee's employment with the Company or any of its
affiliates), Employee shall not, directly or indirectly, own, mange,
operate, control, be employed by, or participate in the ownership,
management, operation or control of a business that is engaged in the same
business as the Company within any area or at any location constituting,
during the term of Employee's employment and/or at the time Employee's
employment is terminated, a Relevant Area. For the purposes of this Section
6, including all subsections of this Section 6, the business in which the
Company is engaged is providing telecommunications services and all other
services the Company provides during the term of Employee's employment
("Services"). The "Relevant Area" shall be defined for the purposes of this
Agreement as any area located within, or within fifty (50) miles of, the
legal boundaries or limits of any city within which the Company or any
affiliate thereof is providing Services, or in which the Company has
publicly announced or privately disclosed to Employee that it plans to
provide Services.
6.2 During the Term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for
a period of twelve (12) months after termination of this Agreement (or, if
later, termination of Employee's employment with the Company or any of its
affiliates), Employee shall not (i) directly or indirectly cause or attempt
to cause any employee of the Company or any of its affiliates to leave the
employ of the Company or any affiliate, (ii) in any way interfere with the
relationship between the Company and any employee or between an affiliate
and any employee of the affiliate, or (iii) interfere or attempt to
interfere with any transaction in which the Company or any of its
affiliates was involved during the Term of this Agreement or Employee's
employment, whichever is longer.
6.3 Employee agrees that, because of the nature and sensitivity of the
information to which he will be privy and because of the nature and scope
of the Company's business, the restrictions contained in this Section 6 are
fair and reasonable.
7. Confidential Information:
7.1 The relationship between the Company and the Employee is one of
confidence and trust. This relationship and the rights granted and duties
imposed by this Section shall continue until a date ten (10) years from the
date Employee's employment is terminated.
7.2 As used in this Agreement (i) "Confidential Information" means
information disclosed to or acquired by Employee about the Company's plans,
products, processes and services including the Services and any Relevant
Area, including information relating to research, development, inventions,
manufacturing, purchasing, accounting, engineering, marketing,
merchandising, selling, pricing and tariffed or contractual terms, customer
lists and prospect lists or other market information, with respect to any
of the Company's then current business activities; and (ii) "Inventions"
means any inventions, discoveries, concepts and ideas, whether patentable
or not, including, without limitation, processes, methods, formulas, and
techniques (as well as related improvements and knowledge) that are based
on or related to Confidential Information, that pertain in any manner to
the Company's then currently used technology, expertise or business and
that are made or conceived by Employee, either solely or jointly with
others, and while employed by the Company or within six (6) months
thereafter, whether or not made or conceived during working hours or with
the use of the Company's facilities, materials or personnel.
7.3 Employee agrees that he shall at no time during the Term of his
employment or at any time thereafter disclose any Confidential Information
or component thereof to any person, firm or corporation to any extent or
for any reason or purpose or use any Confidential Information or component
thereof for any purpose other than the conduct of the Company's business.
7.4 Any Confidential Information or component thereof that is directly
or indirectly originated, developed or perfected to any degree by Employee
during the Term of this employment by the Company shall be and remain the
sole property of the Company and shall be deemed trade secrets of the
Company.
7.5 Upon termination of Employee's employment pursuant to any of the
provisions herein, Employee or his legal representative shall deliver to
the Company all originals and all duplicates and/or copies of all
documents, records, notebooks, and similar repositories of or containing
Confidential Information then in his possession, whether prepared by him or
not.
7.6 Employee agrees that the covenants and agreements contained in
this Section 7 are fair and reasonable and that no waiver or modification
of this Section or any covenant or condition set forth herein shall be
valid unless set forth in writing and duly executed by the parties hereto.
Employee agrees to execute such separate and further confidentiality
agreements embodying the provisions of this Section 7 as the Company may
reasonably request.
8. Injunctive Relief. Upon a material breach or threatened material breach
by Employee of any of the provisions of Sections 6 and 7 of this Agreement, the
Company shall be entitled to an injunction restraining Employee from such
breach. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies for such breach or threatened breach, including
recovery of damages from Employee.
9. No Waiver. A waiver by the Company of a breach of any provision of this
Agreement by Employee shall not operate or be construed as a waiver of any
subsequent or other breach by Employee.
10. Severability. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such Section in the particular jurisdiction in which
such adjudication is made.
11. Notices. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed given if
mailed by first class mail, postage prepaid, certified or return receipt
requested to the last known address of the recipient.
12. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado.
13. Assignment. The Company may assign its rights and obligations under
this Agreement to any affiliate of the Company or, subject to the provisions of
Section 5.3, to any acquirer of substantially all of the business of the
Company, and all covenants and agreements hereunder shall inure to the benefit
of and be enforceable by or against any such assignee. Neither this Agreement
nor any rights or duties hereunder may be assigned or delegated by Employee.
14. Amendments. No provision of this Agreement shall be altered, amended,
revoked or waived except by an instrument in writing, signed by each party to
this Agreement.
15. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
16. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties and supersedes all prior understandings, agreements
or representations by or between the parties, whether written or oral, which
relate in any way to the subject matter hereof, including without limitation,
the Employment Agreement dated August 14, 1996 between ICG Satellite Services,
Inc. and Employee and the Employment Agreement dated May 15, 1998 between Netcom
On-Line Communication Services, Inc. and Employee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
ICG TELECOM GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
ICG COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
