EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT dated as of August 31, 1998 between Xxxxxx Xxxxxx ("Executive")
and Advanced Radio Telecom Corp. (the "Company"), a Delaware corporation located
at 000 000xx Xxx XX, Xxxxx 0000, Xxxxxxxx, XX 00000.
RECITALS
--------
Executive seeks to be employed by the Company, and the Company seeks to
employ Executive as its Executive Vice President, Sales. The Company and
Executive intend that Executive shall serve the Company on the terms set forth
below and, to that end, deem it desirable and appropriate to enter into this
Agreement.
AGREEMENT
---------
The parties hereto, in consideration of the mutual agreements hereinafter
contained, agree as follows:
1. EFFECTIVE DATE; TERM OF AGREEMENT. This Agreement shall become effective
---------------------------------
as of September 1, 1998 (the "Effective Date"). Executive's employment shall
continue on the terms provided herein until December 31, 2000, subject to
earlier termination as provided herein (such period of employment hereinafter
called the "Employment Period").
2. SCOPE OF EMPLOYMENT.
-------------------
a. Nature of Services. During the Employment Period, Executive shall be
------------------
elected and serve as Executive Vice President, Sales or as such other executive
vice president designated by the Chief Executive Officer or the Board of
Directors ("Board") of the Company and shall have and diligently perform the
duties and the responsibilities of such office and such additional executive
duties and responsibilities consistent with such office as shall from time to
time be assigned to him.
b. Extent of Services. Except for illnesses and vacation periods, Executive
------------------
shall devote substantially all his working time and attention and his best
efforts to the performance of his duties and responsibilities under this
Agreement. However, Executive may (i) make any passive investments where he is
not obligated or required to, and shall not in fact, devote any managerial
efforts, (ii) participate in charitable or community activities or in trade or
professional organizations, or (iii) subject to Board approval (which approval
shall not be unreasonably withheld or withdrawn), hold directorships in public
companies, provided that the Board shall have the right to limit such
investments, participation and services whenever the Board shall reasonably
believe that the time spent on such activities infringes in any material respect
upon
the time required by Executive for the performance of his duties under this
Agreement or is otherwise incompatible in any material regard with those duties.
3. COMPENSATION AND BENEFITS.
-------------------------
a. Base Salary. Executive shall be paid a base salary at the annualized rate
-----------
of Two Hundred Thousand Dollars ($200,000.00) or such higher annualized rate as
the Board may determine ("Base Salary"), such Base Salary to be paid in the same
manner and at the same times as the Company shall pay base salary to other
executive employees.
b. Bonus Compensation. Executive will be eligible for an incentive bonus
------------------
with respect to each fiscal year or portion thereof during the Employment Period
pursuant to such bonus or incentive compensation plan as is then available to
executives of the Company generally, or if there is no such plan, as the Board
may determine based on performance criteria set annually. The maximum incentive
bonus for each fiscal year shall be 100% of his Base Salary in effect with
respect to such fiscal year. For each fiscal year or portion thereof, the
determination of the target incentive bonus and whether Executive has earned any
incentive bonus and the amount thereof shall be made by the Board in its
judgment.
c. Policies and Fringe Benefits. Executive shall be subject to Company
----------------------------
policies applicable to its executives generally and shall be entitled to receive
all such fringe benefits as the Company shall from time to time make available
to other executives generally (subject to the terms of any applicable fringe
benefit plan), including vacation of four weeks per year, in accordance with and
subject to prevailing Company policies.
4. TERMINATION OF EMPLOYMENT.
-------------------------
a. The Company shall have the right to terminate Executive's employment at any
time and for any reason, with or without Cause. Executive may resign for any
reason on thirty (30) days notice and upon Constructive Termination (as defined
below).
b. The Employment Period shall terminate when Executive dies or becomes
Disabled. In addition, if by reason of Incapacity Executive is unable to
perform his duties for at least six continuous months, the Employment Period may
be terminated by the Company for Incapacity upon written notice by the Company
to Executive. "Disability" and "Disabled" shall have the meaning given in the
Company's long-term disability plan. Executive's employment shall be deemed to
be terminated for Disability on the date on which Executive is entitled to
receive long-term disability compensation pursuant to such long-term disability
plan.
-2-
"Incapacity" shall mean a disability (other than Disability) or other impairment
of health that renders Executive unable to perform his duties to the reasonable
satisfaction of the Board.
c. Whenever the Employment Period shall terminate, Executive shall resign all
offices or other positions he holds with the Company and any affiliated
entities.
5. BENEFITS UPON TERMINATION OF EMPLOYMENT OR UPON EXPIRATION OF THE
-----------------------------------------------------------------
AGREEMENT.
---------
a. Certain Terminations Prior to December 31, 2000. If the Employment Period
-----------------------------------------------
shall terminate prior to December 31, 2000 by reason of (i) death, Disability or
Incapacity of Executive, (ii) termination by the Company for any reason other
than Cause or (iii) termination by Executive in the event that either (A)
Executive shall be removed from or fail to be reelected as an Executive Vice
President or (B) Executive is relocated more than 40 miles from the current
corporate headquarters of the Company, in the case without his prior written
consent (each a "Constructive Termination") and subject to Section 6 hereof,
Executive shall be entitled to the following severance benefits:
(i) The Company shall continue to pay to Executive or his legal representative
his Base Salary for twelve (12) months following such termination and, at the
termination of such twelve-month period, shall pay Executive an incentive bonus
at the target amount at the time of his termination; provided that if Executive
is eligible for long-term disability compensation benefits under any Company
long-term disability plan, the amount payable under this clause shall be reduced
by the long-term disability compensation benefits under such plan for which
Executive is eligible with respect to the period following termination.
(ii) For twelve (12) months following termination, and subject to such minimum
coverage-continuation requirements as may be required by law, the Company will
provide (except to the extent that Executive shall obtain or be eligible to
obtain such insurance from another employer) such medical and hospital insurance
and term life insurance for Executive and his family, comparable to the
insurance provided for executives generally, as the Company shall determine, and
upon the same terms and conditions as the same shall be provided for other
Company executives generally; provided, however, that in no event shall such
insurance benefits supplied by the Company or the terms and conditions thereof
be less favorable to Executive than those afforded to him as of the date of
termination. To the extent it is impossible or impracticable to provide any
such benefits to Executive under the Company's then existing employee benefit
plans or arrangements, the Company shall arrange for alternative comparable
coverage or, if such alternative coverage is not available, shall pay to
Executive the cost of such coverage, as reasonably determined by the Company.
(iii) All of Executive's previously granted stock options ("Options") then
outstanding, to the extent not already vested, shall be immediately vested and
shall remain exercisable for a period of one year or, if less, the remainder of
the original option term, and shall then terminate.
-3-
(iv) It is agreed and understood that all payments and benefits provided to
Executive hereunder shall be expressly conditioned on the execution by Executive
or his legal representative of a general release and waiver of claims in favor
of the Company and its directors, officers, affiliates, and representatives.
b. Voluntary Termination of Employment. If Executive terminates his employment
-----------------------------------
voluntarily (other than a Constructive Termination), Executive or his legal
representative shall not be entitled to any severance or other benefits under
this Agreement.
c. Termination for Cause. If the Company should terminate Executive's
---------------------
employment for Cause, Executive or his legal representative shall not be
entitled to any severance or other benefits under this Agreement, all Options
shall immediately terminate and the Company shall not waive any rights it may
have for damages or for injunctive relief. "Cause" shall mean dishonesty by
Executive in the performance of his duties, conviction of a felony (other than a
conviction arising solely under a statutory provision imposing criminal
liability upon Executive on a per se basis due to the Company offices held by
Executive, so long as any act or omission of Executive with respect to such
matter was not taken or omitted in contravention of any applicable policy or
directive of the Board), gross neglect of duties (other than as a result of
Disability, Incapacity or death) rising to the level of deliberate dereliction,
conflict of interest, which conflict shall continue for 30 days after the
Company gives written notice to Executive requesting the cessation of such
conflict, or material breach by Executive of any of the restrictive covenants
contained in Sections 6(a) and 6(b) hereof.
6. AGREEMENT NOT TO SOLICIT OR COMPETE; CONFIDENTIALITY.
----------------------------------------------------
a. Nonsolicitation. For a period of one year after the termination of his
---------------
employment, Executive shall not under any circumstances employ, solicit the
employment of, accept unsolicited the services of or assist any other entity in
employing or soliciting the employment of, any Protected Person (as defined
below), recommend the employment of any Protected Person to any other business
or encourage any Protected Person to terminate his or her employment
relationship with the Company. A "Protected Person" shall mean any person who
was employed by the Company or its subsidiaries prior to the termination of
Executive's employment and is, or during the three months prior to the
commencement of conversations with Executive with respect to employment was,
employed by the Company or its subsidiaries.
-4-
b. Noncompetition. During the course of his employment, Executive will learn
--------------
trade secrets of the Company and will have access to Confidential Information
(as hereinafter defined) and business plans of the Company. Therefore, (i)
during the Employment Period, (ii) upon automatic termination of the Employment
Period on December 31, 2000, if Executive should terminate his employment
voluntarily at any time, or if Executive's employment is terminated for
Disability or Incapacity, then for a period of one year after the termination of
his employment, or Executive will not, directly or indirectly, engage in, become
associated in any manner with, lend his name to or have any financial interest
in any Competitive Business (as defined below) anywhere in the world, whether as
a contractor, consultant, agent, partner, principal, investor, employee, owner,
manager or otherwise. Without limiting the generality of the foregoing,
Executive agrees during such period that he shall not, directly or indirectly,
solicit or encourage any customer or vendor of the Company to terminate or
diminish its relationship with the Company or to conduct with himself or with
any other person, organization or other entity any business or activity which
such customer or vendor conducts or could conduct with the Company.
"Competitive Business" shall mean any line of business in which the Company is
at the time engaged or for which the management or the Board of Directors of the
Company is at the time actively planning to become engaged. Nothing herein
shall prevent Executive from owning not in excess of one percent of any security
issued and outstanding listed on a national securities exchange or traded on the
Nasdaq National Market. It is agreed and understood that the post-employment
Noncompetition period prescribed herein shall be tolled, and shall not run,
during any period of time in which Executive is in breach of the provisions of
this Section 6(b).
c. Confidentiality. Executive acknowledges that during his employment, he may
---------------
develop Confidential Information for the Company and may learn Confidential
Information developed or owned by the Company or entrusted to it by others.
Executive agrees that he will not, during the term of this Agreement or at any
time thereafter, other than as required in furthering the best interests of the
Company, use or disclose any Confidential Information. "Confidential
Information" means any and all information of the Company that is not generally
available to the public. Confidential Information includes but is not limited
to (i) the Company's development, research and marketing activities, (ii) the
Company's products and services, (iii) the Company's costs, sources of supply
and strategic plans, (iv) the identity and requirements of the Company's
customers, prices charged and services provided and (v) the people and
organizations with whom the Company has business relationships and those
relationships. Confidential Information also includes such information as the
Company may receive or has received belonging to customers or others who do
business with it, but shall not include information which is either generally
known to the public and/or is required to be disclosed publicly by operation of
law or regulation.
d. Return of Confidential Information. All Confidential Information created
----------------------------------
by Executive or to which Executive has access and all documents, records and
files, in any media of whatever kind and description, relating to the business,
present or otherwise, of the Company or containing, based on or reflecting
Confidential Information (the "Documents"), whether or not prepared by
Executive, shall be the sole and exclusive property of the Company. Executive
shall
-5-
return to the Company immediately after the termination of this Agreement, and
at such other times as may be specified by the Company, all Documents and all
other property of the Company then in his possession or control.
7. ENFORCEMENT. The parties desire that the provisions of this Agreement
-----------
shall be enforced to the fullest extent permissible under the laws and public
policies applied to the jurisdiction whose laws govern this Agreement.
Accordingly, to the extent that a restriction contained in this Agreement is
more restrictive than permitted by the laws of any jurisdiction where this
Agreement may be subject to review and interpretation, and in the event that any
restriction shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large a
geographic area or too great a range of activities, the terms of such
restriction, for the purpose only of the operation of such restriction in such
jurisdiction, shall be the maximum restriction allowed by the laws of such
jurisdiction and such restriction shall be deemed to have been revised
accordingly.
8. REMEDIES. Executive acknowledges that he has carefully read and
--------
considered all the terms and conditions of this Agreement, including the
restraints imposed upon him pursuant to Section 6 hereof. Executive agrees that
said restraints are necessary for the reasonable and proper protection of the
Company and that each and every one of the restraints is reasonable in respect
to its core subject matter, length of time and geographic area. Executive
acknowledges that the provisions of this Agreement are of a special and unique
nature, the loss of which cannot be accurately compensated for in damages by an
action at law, and that, were he to breach any of the covenants contained in
Section 6 hereof, the damage to the Company would be irreparable. The Executive
therefore agrees that the Company, in addition to any other remedies available
to it, shall be entitled to preliminary and permanent injunctive relief against
any breach or threatened breach by the Executive of any of said covenants,
without having to post bond, and shall be further entitled to recover from
Executive its reasonable attorney's fees and expenses incurred in connection
with the enforcement of its rights hereunder should the Company prevail.
9. ASSIGNMENT. The rights and obligations of the Company shall inure to the
----------
benefit of and shall be binding upon the successors and assigns of the Company.
The rights and obligations of Executive are not assignable except only that
payments payable to him after his death shall be made by devise or descent.
10. NOTICES. All notices and other communications required hereunder shall be
-------
in writing and shall be given by mailing the same by certified or registered
mail, return receipt requested, postage prepaid. If sent to the Company, the
same shall be mailed to the Company at 000 000xx Xxxxxx, X.X., Xxxxx 0000,
Xxxxxxxx, XX 00000, Attention: General Counsel, or other such address as the
Company may hereafter designate by notice to Executive; and if sent to
Executive, the same shall be mailed to Executive c/o the Company at 000 000xx
Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxx, XX 00000 with a copy to 0000 Xxxxx Xxx
Xxxxxx, Xxxxx Xxxx, XX 00000, or such other address as Executive may hereafter
designate by notice to the Company.
-6-
11. WITHHOLDING. Anything to the contrary notwithstanding, all payments
-----------
required to be made by the Company hereunder to Executive shall be subject to
the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.
12. GOVERNING LAW. This Agreement and the rights and obligations of the
-------------
parties hereunder shall be governed by the laws of the State of Washington.
13. CONFLICTING AGREEMENTS. Executive hereby represents and warrants that the
----------------------
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which Executive is
a party or is bound and that the Executive is not now subject to any covenants
against competition or similar covenants that would affect the performance of
his obligations hereunder. Executive will not disclose to or use on behalf of
the Company any proprietary information of a third party without such party's
consent.
14. SEVERABILITY. If any portion or provision of this Agreement shall to any
------------
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. The parties agree to substitute a provision
that effects the intent of the invalidated provision as nearly as possible.
15. WAIVER; AMENDMENT. No waiver of any provision hereof shall be effective
-----------------
unless made in writing and signed by the waiving party. The failure of either
party to require the performance of any term or obligation of this Agreement, or
the waiver by either party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly or authorized
representative of the Company.
16. HEADINGS; COUNTERPARTS. The headings and captions in this Agreement are
----------------------
for convenience only and in no way define or describe the scope or content of
any provision of this Agreement.
-7-
17. ENTIRE AGREEMENT. This Agreement represents the entire agreement between
----------------
the parties relating to the terms of Executive's employment by the Company and
supersedes all prior written or oral agreements between them.
______________________________
Xxxxxx Xxxxxx
ADVANCED RADIO TELECOM CORP.
By:_________________________________
Xxxxx X. Xxxxxx
Chairman, CEO & President
-8-
