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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
of the 1st day of August, 1999, by and between US XCHANGE, L.L.C., a Michigan
limited liability company, of 00 Xxxxxx, X.X., Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxx
00000 ("Company"), and XXXXXX X. XXXXXXX, of 00 Xxxxxx Xxxxxx, X.X., Xxxxx
Xxxxxx, Xxxxxxxx 00000 ("Xxxxxxx").
Statement of Facts
Company is a telecommunications corporation engaged in the
business of establishing regional competitive local exchanges. Xxxxxxx has
significant financial management experience and expertise which can benefit
Company. Company wishes to employ Xxxxxxx and Xxxxxxx wishes to be employed by
Company. Therefore, this Agreement is being entered into by the parties to
provide the terms and conditions under which Xxxxxxx shall be employed by
Company.
Agreement
IN CONSIDERATION OF THE FACTS STATED ABOVE AND THE MUTUAL
COVENANTS CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:
1. Employment. Company hires and employs Xxxxxxx as a key
employee in the operation by Company of its business. Xxxxxxx accepts employment
and agrees to continue to render his expert services to Company during the term
of this Agreement. Xxxxxxx shall have the title Executive Vice President/CFO,
unless the parties mutually agree otherwise.
2. Term. The term of this Agreement ("Employment Period ")
shall be for a period of one (1) year, commencing on July 12, 1999, and ending
July 12, 2000; provided, however, that the term of this Agreement shall
automatically renew for successive one (1) year periods unless terminated by
either party providing the other with written notice of termination at least
ninety (90) days prior to the applicable anniversary of the date of this
Agreement.
(a) Termination by Company. Company may terminate this
Agreement at any time by providing Xxxxxxx with ninety (90) days
prior written notice.
(b) Termination by Xxxxxxx. Xxxxxxx may terminate this
Agreement by providing Company with ninety (90) days prior
written notice.
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3. Compensation.
(a) Salary. For services rendered by Xxxxxxx as an employee
pursuant to the provisions of this Agreement, Company shall pay
Xxxxxxx an annual salary of not less than One Hundred
Seventy-Five Thousand and 00/100 Dollars ($175,000.00). The
annual salary shall be paid bi-monthly with equal installments of
Seven Thousand Two Hundred Ninety-One and 67/100 Dollars
($7,291.67) payable on the fifteenth (15th) and last day of each
month during the Employment Period. There shall be withheld from
Xxxxxxx'x compensation such amount as Company is required by law
to withhold and such other deductions as Xxxxxxx shall authorize.
Except as provided in Paragraph 3(d) below, in the event of early
termination of this Agreement pursuant to Paragraph 2(a) or 2(b)
above, or the death of Xxxxxxx prior to the expiration of the
Employment Period or any extension of this Agreement, Company
shall have no obligation to make further payment of compensation
to Xxxxxxx or his estate under this Paragraph. However, in the
event of early termination of this Agreement for any reason,
Xxxxxxx shall continue to be subject to the provisions of
Paragraphs 7 and 8 of this Agreement.
(b) Benefits. During the Employment Period, the Company
shall make available to Xxxxxxx the following benefits:
i. Participation in the Company's health insurance plan
and pension plan.
ii. Four (4) weeks of vacation annually.
iii. Automobile allowance (including insurance) in a
minimum amount of $800.00 per month.
iv. At Xxxxxxx'x option, either a membership at Wuskowhan
Players Club or reimbursement for dues at another
local country club.
v. A full annual physical.
vi. Short and long-term disability coverage.
vii. Participation in any employee equity ownership plan
as adopted or amended by Company from time to time.
viii. Executive outplacement services as are standard in
the industry.
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(c) Bonus. During the Employment Period, Xxxxxxx shall be
eligible to receive an annual bonus in such amount as is approved
by Company's management. Xxxxxxx shall receive a one time signing
bonus of Twenty-Five Thousand Dollars ($25,000.00) within thirty
(30) days of execution of this Agreement by Xxxxxxx.
(d) Salary Guarantee. Notwithstanding Paragraph 3(a),
above, in the event Company terminates this Agreement for any
reason other than just cause, Company shall continue to pay
Xxxxxxx'x salary and provide Xxxxxxx'x benefits for a period of
one (1) year following the date of termination. Just cause for
the purposes of this Agreement shall be defined as any of the
following: (i) failure of Xxxxxxx to perform competently any duty
assigned to him which nonperformance rises to the level of the
industry standard for just cause termination, (ii) failure of
Xxxxxxx to perform any provision under this Agreement, or (iii)
Xxxxxxx'x dishonesty or fraud. Company may not terminate this
Agreement for just cause under Paragraph 3(d)(i) or 3(d)(ii)
without having provided Xxxxxxx with written notice of such cause
and a period of sixty (60) days to take corrective action.
4. Post-Sale Covenants. Upon the occurrence of (i) the sale of
a majority of Company's assets or equity interests; (ii) the completion of an
initial public offering of Company's equity interests; or (iii) a merger of
Company with another entity where Company is not the surviving entity, Xxxxxxx
agrees to execute an employment agreement with the purchaser/successor for a
period of not less than one (1) year, provided that the salary to be paid
Xxxxxxx during such period shall not be less than Xxxxxxx'x annual salary
immediately prior to the sale, and further provided that the employment
agreement shall be consistent with the terms and conditions of this Agreement.
5. Nature of Employment. Company is employing Xxxxxxx as one
of its key employees. Xxxxxxx will provide management services to Company
pursuant to Company's business requirements. Xxxxxxx shall conscientiously and
competently perform all the duties of any position which he holds, including any
additional duties assigned to him. During the Employment Period, Xxxxxxx shall
devote his time and efforts as required in the performance of his duties under
this Agreement and shall use his best efforts to promote the business and
interests of Company.
6. Use of Information Obtained During Employment Period.
Xxxxxxx shall not for any reason, except in the ordinary course of business, use
or divulge to any other person or party, except an officer or director of
Company, any trade secrets or private business information of Company,
including, without limitation, the names and/or records of any customer of
Company, the names of any companies which are providing any services to Company,
and correspondence or any other confidential or proprietary information relating
to Company's business which may harm Company in any way.
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7. Ownership of Documents, Inventions, Discoveries and
Improvements. All records, files, plans, sketches, notes, notebooks, letters or
the like relating to the business of Company, which Xxxxxxx uses, prepares or
comes in contact with shall remain the sole property of Company. Upon
termination of employment, Xxxxxxx shall promptly return all such materials in
Xxxxxxx'x possession or control to Company. Further, Xxxxxxx shall promptly
inform Company of all inventions, discoveries and improvements made by Xxxxxxx
individually or in conjunction with others during the course of Xxxxxxx'x
employment, which relate to Company's business. Xxxxxxx shall assign to Company
all of Xxxxxxx'x rights to such inventions, discoveries and improvements, and
Company shall have a royalty-free right to use such inventions, discoveries and
improvements in its business.
8. Equitable Relief. The covenants of Xxxxxxx contained in
this Agreement represent special, unique and extraordinary consideration of an
immeasurable value which cannot be reasonably or adequately compensated by
damages in an action at law, and a breach by Xxxxxxx would cause Company
irreparable injury and damage. Xxxxxxx agrees that Company will be entitled to a
remedy of injunction, specific performance or other equitable relief which will
prevent the breach or breaches of the covenants contained in this Agreement, and
this relief shall not constitute the waiver of any rights which Company may have
for other damages.
9. Indemnification. Company shall indemnify Xxxxxxx and hold
him harmless for all acts or decisions made by him in good faith while
performing services to the Company to the full extent allowed under the Michigan
Business Corporation Act, M.C.L.A. Section 450.1101 et seq.
10. Anticipation of Compensation. Xxxxxxx shall have no power
to transfer, assign, anticipate or otherwise encumber any payment required to be
made under this Agreement, nor will any such payment be subject to seizure for
the payment of any debt or judgment or be transferable by operation of law in
the event of bankruptcy, insolvency or otherwise.
11. Assignment. This Agreement shall not be assignable by
Xxxxxxx without the written consent of Company. This Agreement shall be freely
assignable by Company.
12. Miscellaneous. No waiver by either party of any breach of
this Agreement will be deemed a waiver of any preceding or succeeding breach of
the same or any other provision hereof. Each and all of the several rights,
remedies and options of either party under this Agreement will be construed as
cumulative and no one of them is exclusive of the other or of any right, remedy
or priority allowed by law or in equity.
13. Arbitration. Any dispute arising under or relating to this
Agreement which may be the subject of a civil action shall be submitted to the
American Arbitration
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Association (the "Arbitrator ") under its rules then in force for resolution.
The Arbitrator shall be located in the City of Grand Rapids, Michigan. Both
parties shall be bound by the Arbitrator's decision, and a judgment of any
federal or state court of competent jurisdiction shall be rendered upon such
decision made by the Arbitrator. The parties understand that they have the right
under law to litigate any disputes arising under or relating to this Agreement
in a court of law, however, the parties prefer to resolve any disputes through
the arbitration process. THE PARTIES HEREBY VOLUNTARILY AND KNOWINGLY WAIVE ANY
RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT.
14. Governing Law. This Agreement will be governed by and
construed under and in accordance with the laws of the State of Michigan.
15. Headings. Paragraph headings contained in this Agreement
are for convenience only and will not be considered for any purpose in
construing this Agreement.
16. Notices. All notices and other communications provided for
in this Agreement shall be in writing and shall be deemed to have been given
when delivered in person to the recipient or 48 hours after depositing the same
in the United States Mail, by certified mail, postage prepaid, addressed to the
party at its address set forth above.
17. Successors and Assigns. All the terms and provisions of
this Agreement shall be binding upon, shall inure to the benefit of, and shall
be enforceable by the respective heirs, beneficiaries, personal representative,
successors and assigns of the parties to this Agreement.
18. Third Parties. This Agreement is for the benefit of the
parties, their successors and assigns, and is not for the benefit of any third
party.
19. Entire Agreement. This Agreement cancels and supersedes
all prior negotiations and understandings between the parties relating to its
subject matter, and contains all of the terms, conditions and promises of the
parties in connection with Xxxxxxx'x employment by Company; no modification or
waiver of any of the provisions of this Agreement will be valid and binding
unless in writing.
20. Severability. The unenforceability of any provision of
this Agreement shall not affect the enforceability of the remaining provisions
of this Agreement.
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WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE
DATE FIRST WRITTEN ABOVE.
US XCHANGE, L.L.C.
By /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx, Member
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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