EX 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of this ___ day
of July, 1996 (the "Commencement Date"), by and between KMC TELECOM INC., a
New Jersey corporation with its principal place of business located at 0000
Xxxxx 000, Xxxxx 000 Xxxxxxxxxx, X.X. 00000 ("KMC") and XXXXXXX X. XXXXXXXXX,
an individual, residing at 000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
("Xx. Xxxxxxxxx").
W I T N E S E T H:
WHEREAS, KMC is engaged in, among other things, the development, licensing,
design, financing, installation, marketing, sale and operation of
voice/video/data communications systems including but not limited to competitive
access provider systems (individually, a "Project", collectively
"Telecommunication Projects");
WHEREAS, KMC believes that Xx. Xxxxxxxxx has extensive experience and
knowledge with respect to the development, licensing, design, marketing, sale,
financing, installation and operation of Telecommunication Projects and further
KMC believes that Xx. Xxxxxxxxx will make a significant contribution in
developing and maintaining KMC's business and desires Xx. Xxxxxxxxx to be the
President and Chief Executive Officer of KMC by, among other things, offering
Xx. Xxxxxxxxx the compensation and benefits package provided for herein; and
WHEREAS, KMC desires to formalize the terms of employment of Xx. Xxxxxxxxx,
and Xx. Xxxxxxxxx agrees to formalize the terms of his employment as hereinafter
set forth and to supervise the development, licensing, design, marketing, sale,
financing,
installation and operation of Telecommunication Projects located primarily, but
not exclusively, in cities within the contiguous forty-eight United States (the
"Territory").
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which hereby is acknowledged, KMC and Xx. Xxxxxxxxx
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Affiliate" shall mean any corporation, partnership or other business
entity owned, controlled or in which Xxxxxx X. Xxxxxx or his family has a
substantial interest directly or indirectly which is engaged in
Telecommunication Projects or which is a successor in interest to KMC, and for
purposes hereof "substantial interest" shall mean the ownership of 15% or more
of the equity interest in such entity.
"Base Salary" shall have the meaning assigned to it in Section 4(a) of this
Agreement.
"Bonus Payment" shall have the meaning assigned to it in Section 4(c) of
this Agreement.
"Business" shall mean the business conducted by KMC in the past and on the
date of execution of this Agreement, including business activities under review
or in developmental stages, all other business activities which emanate
therefrom by a reasonable expansion of the present activities of KMC, all
business activities which may be developed by KMC during the Term, and all
business activities now conducted by any Affiliate of KMC or which may be
developed by such Affiliate, during the term of this Agreement, as reasonable
expansions of their present activities.
2
"Business Plan" shall mean KMC's business plan with respect to the full
scale development of competitive access provider network(s) and other
Telecommunication Projects.
"CAP Project" shall have the meaning assigned to it in Section 4(c).
"Commencement Date" shall mean the date of this Agreement, as stated in the
preamble on page 1.
"Companies" shall have the meaning assigned to it in Section 2(c).
"Employment Year" shall mean each twelve-month period during which Xx.
Xxxxxxxxx is employed hereunder commencing on the Commencement Date.
"Project" shall have the meaning assigned to it in the first whereas
paragraph.
"Subject Matter" shall have the meaning assigned to it in Section 3(e).
"Telecommunication Projects" shall have the meaning assigned to it in the
first WHEREAS paragraph.
"Term" shall mean the term of employment of Xx. Xxxxxxxxx under this
Agreement.
"Territory" shall have the meaning assigned to it in the third WHEREAS
paragraph.
Wherever from the context it appears appropriate, each word or phrase
stated in either the singular or the plural shall include the singular and the
plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter.
3
2. EMPLOYMENT AND DUTIES.
(a) Employment and Term. KMC hereby agrees to employ Xx. Xxxxxxxxx,
and Xx. Xxxxxxxxx hereby agrees to be employed by KMC, upon the terms and
conditions set forth herein. The Term of Xx. Xxxxxxxxx'x employment hereunder
shall commence as of the Commencement Date and, except as otherwise provided in
this Agreement, shall continue for a period of three (3) consecutive years and
end on July 29, 1999, subject to extension thereafter as provided in Section
2(b), below.
(b) Extension of Term of Employment. If Xx. Xxxxxxxxx'x employment
hereunder has not previously been terminated in accordance with Section 9
hereof, then KMC shall have the sole and absolute right to extend the Term of
Xx. Xxxxxxxxx'x employment hereunder, on the terms and conditions set forth
herein for a further period of two (2) years, by written notice to Xx. Xxxxxxxxx
delivered within ninety (90) days of the end of the Term.
(c) Duties. KMC shall employ Xx. Xxxxxxxxx as President and Chief
Executive Officer of KMC. As President and Chief Executive Officer, Xx.
Xxxxxxxxx shall have the responsibility and authority to
(i) supervise and administer the development, marketing, sales,
financing, installation and operation of Telecommunication Projects, including
without limitation, CAP Projects to corporations or other entities (such
corporations, together with such other entities, being herein referred to as the
"Companies"),
(ii) provide such customary services with respect to offering and
promoting the Business to Companies,
4
(iii) assist in identification and introduction of Companies and
strategic business partners and joint ventures to KMC,
(iv) assist KMC, if required, in obtaining the execution by
Companies, acceptable to KMC, of binding, written commitments indicating that
such Companies will serve as joint venture partners of Project, provided that
any necessary requirements are met so that Project can be successfully financed
and built,
(v) supervise and administer all aspects of the Business with a
view to meeting KMC's short-term and long-term targets, including, but not
limited to (A) the management of all operations and personnel relating to the
Business, (B) the review, approval and recommendation of areas for modification
in the current Business Plan, and the preparation and presentation of a revised
Business Plan for each fiscal year not later than ninety (90) days prior to the
beginning of such fiscal year, and (C) the development of the Business as it
relates to KMC and its Affiliates or its joint venturers, in accordance with the
Business Plan, as amended from time to time,
(vi) perform such other duties as are usually attendant upon the
President and CEO of a corporation in the performance of the foregoing services,
and
(vii) assist in the raising of debt or equity capital for KMC.
(d) Performance of Services. During the term of his employment
hereunder, Xx. Xxxxxxxxx shall
(i) perform faithfully the responsibilities assigned to him
hereunder to the best of his ability,
5
(ii) devote his full and undivided business time, other than
during vacations taken in accordance with KMC's established policies, to the
performance of such responsibilities,
(iii) not engage, without the prior written approval of KMC, in
any other business activities, other than (A) personal investment activities
which are not in competition with the Business and in which Xx. Xxxxxxxxx is not
in any managerial or active role and (B) for a period not exceeding ninety (90)
days after the Commencement Date, individual consulting projects commenced prior
to the Commencement Date, provided that such consulting activities are not
performed for entities in competition with the Business or interfere with Xx.
Xxxxxxxxx'x duties as President and Chief Executive Officer of KMC, and
(iv) if requested by KMC, perform the responsibilities assigned
to him hereunder or related services for the benefit of joint venturers or
subsidiaries of KMC to the best of his ability. Notwithstanding anything to the
contrary contained in this Agreement, nothing shall prevent the Board of
Directors of KMC from reasonably supervising the manner of performance of such
responsibilities by Xx. Xxxxxxxxx.
(e) Services to KMC and/or its Subsidiaries. During the Term of
this Agreement, it is understood that Xx. Xxxxxxxxx may be requested from time
to time to provide assistance or consultative or other services to, or to act
temporarily as an executive of a subsidiary of KMC other than (and in addition
to) KMC. Xx. Xxxxxxxxx shall perform such services and, if elected as an
officer or director of any such other company, shall hold such office (and
discharge its duties) without additional compensation other than the
compensation set forth in this Agreement.
6
(f) Place of Employment. The principal place of employment of
Xx. Xxxxxxxxx shall be Bedminster, New Jersey. It is however distinctly
understood and agreed that Xx. Xxxxxxxxx may be required, in connection with the
performance of his duties, to work from time to time at other locations
designated by the Board of Directors of KMC to carry out Xx. Xxxxxxxxx'x duties
as President and Chief Executive Officer. When required to travel to and/or
spend time at such other locations, Xx. Xxxxxxxxx'x reasonable and customary
traveling and temporary living expenses shall be reimbursed to him by KMC, upon
his submittal of detailed written vouchers, supported by appropriate
documentation in accordance with the general reimbursement policies of KMC with
respect to executive officers.
3. EXCLUSIVITY OF SERVICE; CONFIDENTIAL INFORMATION; UNIQUE SERVICES.
(a) Exclusive Service. During the Term and for a period of eighteen
(18) months after the date of termination of Xx. Xxxxxxxxx'x employment
hereunder, Xx. Xxxxxxxxx shall not (i) directly or indirectly, as an employee,
agent, manager, director, officer, stockholder, partner or otherwise, own,
manage, operate, control, be employed by, participate in or be connected in any
manner whatsoever with the ownership, management, operation or control of any
business in competition with activities in which KMC, is engaged, (ii) solicit
from any Company, or any division, department or subsidiary of any Company, or
any individual employed by any of the foregoing, any business relating to
services similar to the services which were performed by KMC, its joint
venturers or Affiliates for such Company during Xx. Xxxxxxxxx'x employment by
KMC or (iii) request or cause any Company to cancel or terminate any business
relationship with KMC, its joint
7
venturers or Affiliates, or directly or indirectly solicit or otherwise cause
any employee to terminate such employee's relationship with KMC, its joint
venturers or Affiliates.
(b) Invalidity. If any portion of the restrictions set forth in
Section 3(a) hereof should, for any reason whatsoever, be declared invalid by a
court of competent jurisdiction, the validity or enforceability of the remainder
of such restrictions shall not thereby be adversely affected.
(c) Reasonable Scope and Time Limitation. Xx. Xxxxxxxxx acknowledges
and declares that the scope and time limitations set forth in Section 3(a) are
reasonable and customary, and properly required for the adequate protection of
the Business of KMC, its joint venturers, Affiliates and employees. In the
event any such scope or time limitation is deemed to be unreasonable by a court
of competent jurisdiction, Xx. Xxxxxxxxx agrees to the reduction of said scope
or time limitation or such scope or period which said court shall have deemed
reasonable.
(d) Claim not a Defense. The existence of any claim or cause of
action by Xx. Xxxxxxxxx against KMC other than under this Agreement shall not
constitute a defense to the enforcement by KMC of the foregoing restrictive
covenants, but such claim or cause of action shall be litigated separately.
(e) Disclosure of Subject Matter. Xx. Xxxxxxxxx shall promptly and
fully disclose to KMC, and with all necessary detail for development, marketing,
sale and installation, any and all know-how, discoveries, inventions,
improvements, ideas, writings, formulae, processes and methods (whether
copyrightable, patentable or otherwise) made, received, conceived, acquired or
written by Xx. Xxxxxxxxx (whether or not at the request or upon the suggestion
of KMC) during the Term, solely or jointly with others, in or relating to
8
any activities of KMC or an Affiliate known to Xx. Xxxxxxxxx as a consequence of
his employment (collectively referred to herein as the "Subject Matter").
(f) Assignment of Rights in Subject Matter. Xx. Xxxxxxxxx hereby
assigns and transfers, and agrees to assign and transfer, to KMC, all right,
title and interest in and to the Subject Matter, and Xx. Xxxxxxxxx further
agrees to execute, acknowledge and deliver all such further papers, including
applications for copyrights and patents, as may be necessary to obtain
copyrights or patents for any thereof in any and all countries and to vest title
thereto to KMC. Xx. Xxxxxxxxx shall assist KMC in obtaining such copyrights or
patents during the period of this Agreement and any time thereafter and to
testify in any prosecution or litigation involving any of the Subject Matter.
(g) Confidential Information. Xx. Xxxxxxxxx shall not, during the
period of this Agreement, or at any time thereafter, directly or indirectly,
disclose or permit to be known, to any person, firm or corporation, any
trade-secrets or confidential information acquired by him during the course of
or as an incident to the employment hereunder, relating to KMC, its officers or
directors, any Company which Xx. Xxxxxxxxx has knowledge of or dealt with in the
course of his employment by KMC, or any joint venture or Affiliate of KMC, or in
which any of the foregoing has a beneficial interest, including, but not limited
to, the business affairs of each of the foregoing. Such confidential
information shall include, but is not limited to, the Subject Matter as well as
information relating to agreements, research, methods, writings, manuals,
developments, marketing and any other document embodying such confidential
information. Confidential information shall not include any information that
(i) is in the public domain other than by reason of a breach hereof; or (ii) was
in the possession of Xx. Xxxxxxxxx at the time of the disclosure; or (iii)
9
was obtained by Xx. Xxxxxxxxx in good faith from a third party entitled to
disclose it; or (iv) was required to be disclosed by a court of competent
jurisdiction or a governmental authority with authority over KMC, in which case
Xx. Xxxxxxxxx shall use his best efforts, prior to such disclosure, to give
timely notice of such requirement to the Board of Directors of KMC, which shall
have the right to object to such disclosure or seek confidential treatment of
the Confidential Information.
(h) Client Lists; Return of Confidential Information. All names of
actual or potential clients which have been solicited or are on any mailing
lists, rolodex, files or directories in the possession or under the control of
Xx. Xxxxxxxxx, and all information and documents relating to KMC or its joint
venturers or Affiliates, shall be the exclusive property of KMC, and Xx.
Xxxxxxxxx shall use his best efforts to prevent any publication or disclosure
thereof. Upon termination of Xx. Xxxxxxxxx'x employment with KMC, all names of
actual or potential customers, documents, records, reports, writings and other
similar documents containing confidential information, or trade-secrets
including copies thereof, then in Xx. Xxxxxxxxx'x possession or control shall be
promptly returned to KMC.
(i) Remedies. Xx. Xxxxxxxxx and KMC recognize that the services to
be rendered hereunder are of a special, unique, unusual, extraordinary and
intellectual character involving a high degree of skill and having a peculiar
value, the loss of which may cause KMC immediate and irreparable harm which
cannot be adequately compensated in damages. In the event of a breach or
threatened breach by Xx. Xxxxxxxxx of this Agreement, Xx. Xxxxxxxxx consents
that KMC shall be entitled to injunctive relief, both preliminary and permanent,
without bond, and Xx. Xxxxxxxxx will not raise the defense that KMC has an
adequate remedy at law. In addition, KMC shall be entitled to any other legal
or equitable
10
remedies as may be available under law. The remedies provided in this Agreement
shall be deemed cumulative and the exercise of one shall not preclude the
exercise of any other remedy at law or in equity for the same event or any other
event.
(j) Survival. The provisions of this Section 3 shall survive the
termination of Xx. Xxxxxxxxx'x employment for a period of eighteen (18) months
for any reason whatsoever and whether or not specifically set forth or
contemplated by this Agreement.
4. COMPENSATION. As compensation for services rendered during the Term,
KMC shall pay, or cause to be provided, to Xx. Xxxxxxxxx the following amounts
and benefits:
(a) Base Salary. The sum of $16,666.67 for each full calendar month
from the Commencement Date through the date of termination of Xx. Xxxxxxxxx'x
employment, such sum, when paid for a full calendar year, shall be $200,000 (the
"Base Salary").
(b) Payments of Base Salary. Payments made by KMC to Xx. Xxxxxxxxx
pursuant to Section 4(a) hereof shall be divided into and paid in equal
consecutive bi-weekly installments in accordance with KMC's standard payroll
practices, as such practices may be amended from time to time.
(c) Bonus. In addition to the Base Salary, KMC shall pay Xx.
Xxxxxxxxx, the sum of $25,000 for each city in which a Project involving the
development, licensing, design, marketing, sale, financing, installation and
operation of a competitive access provider network (a "CAP Project") is
successfully completed (the "Bonus Payment"), which shall be payable as follows:
11
(i) $12,500 after satisfactory completion of construction of a
CAP Project, it being agreed that construction of each CAP Project shall be
considered satisfactorily completed when all backbone fibers are carrying light
and are ready for customer use, and
(ii) $12,500 when recurring revenues for such CAP Project are
equal to eighty percent (80%) of the projected first month's revenues as stated
in the Business Plan.
(d) Compensation upon Termination. Notwithstanding anything to the
contrary contained herein:
(i) in the event KMC shall terminate Xx. Xxxxxxxxx'x employment
hereunder in accordance with Section 8(b) hereof, then, effective on the date of
such termination, all compensation previously payable to Xx. Xxxxxxxxx shall
cease and under no circumstance whatsoever shall Xx. Xxxxxxxxx be entitled to
receive any Bonus Payment hereunder;
(ii) in the event KMC shall terminate Xx. Xxxxxxxxx'x employment
hereunder in accordance with Section 8(a) hereof, then, as of the date of such
termination, Xx. Xxxxxxxxx shall be entitled to (A) all accrued Base Salary to
the date of such termination, (B) all unreimbursed expenses in accordance with
Section 5(c), (C) the Bonus Payment, if any, in accordance with Section 4(c)
hereof, as of the day immediately preceding the date of such termination, (D)
severance payment in an amount equal to the annual Base Salary and (E) COBRA
payments for insurance continuation for a period of one year after the date of
such termination within seven (7) days of termination.
12
5. FRINGE BENEFITS.
(a) Short Term Benefits. KMC shall reimburse. Xx. Xxxxxxxxx for all
reasonable and documented expenses actually incurred by Xx. Xxxxxxxxx in
relocating from his residence located at 000 Xxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxx to a new address in order to assume his duties at the principal place
of business of KMC in Bedminster, New Jersey, including real estate broker's
commissions and other closing costs in respect of Xx. Xxxxxxxxx'x old and new
residence. In addition, for a period of not more than six (6) months after the
Commencement Date, KMC shall provide Xx. Xxxxxxxxx a furnished apartment at a
mutually agreed upon location.
(b) Additional Benefits. KMC shall provide the following additional
benefits to Xx. Xxxxxxxxx during the Term:
(i) participation, on terms and conditions at least equal with
all other employees of KMC, in (A) any stock option plan KMC adopts, provided
that such stock option plan shall provide that Xx. Xxxxxxxxx shall have the
right to purchase at least 40,000, but, in any event, not less than four percent
(4%), of KMC's outstanding shares of stock at the prices and during the periods
set forth in Exhibit 1 hereto, (B) KMC's 401(k) plan for salaried employees of
KMC, subject to any eligibility requirements thereof, and (C) KMC's group life,
medical, dental, hospitalization or accident/disability insurance plans and
health programs, but in all events, subject to applicable terms of the plans,
and (D) and any other benefits accorded a comparable employee of KMC;
(ii) two weeks vacation and one week illness allowance with pay
in each Employment Year comparable to that afforded other executives of KMC and
its Affiliates. In the event KMC's vacation policy is modified then Xx.
Xxxxxxxxx will be
13
entitled to any increase in vacation such modification provides. There will be
no carryover of unused vacation time or pay from year to year. Xx. Xxxxxxxxx
shall also be entitled to all holiday privileges regularly observed by KMC
during the Term; and
(iii) the use of a leased automobile, including lease
payments.
(c) Reimbursement for Expenses. KMC shall pay or reimburse Xx.
Xxxxxxxxx for all reasonable and proper expenses actually incurred or paid by
him during the Term in the performance of his services under this Agreement in
accordance with the policies and procedures established by KMC from time to
time. Except as otherwise specifically provided for in this Agreement, as part
of such policies and procedures, the Board of Directors of KMC may from time to
time require prior approval for individual expense items in excess of
pre-established aggregate amounts for a fixed period or in excess of
pre-established amounts for any type of expenditure during any fixed period.
Xx. Xxxxxxxxx will incur expenses in accordance with such policies and
procedures both as to the nature and amount of such expenses.
6. KEY MAN LIFE POLICY; DEATH AND DISABILITY BENEFITS.
(a) Key Man Policy. Separate and apart from any life insurance
policy provided by KMC for the benefit of Xx. Xxxxxxxxx pursuant to Section
5(b)(i), KMC shall be permitted to maintain a "key man life insurance policy",
in such amount and on such terms as KMC shall in its sole discretion determine,
on the life of Xx. Xxxxxxxxx for so long as this Agreement remains in effect.
Any proceeds from any such "key man" policy shall be payable solely to KMC; Xx.
Xxxxxxxxx, his heirs, assigns and beneficiaries shall have no
14
rights with respect thereto. Xx. Xxxxxxxxx confirms that he is in good health
and therefore has no reason to believe that such insurance will not be available
at standard rates.
(b) Death Benefits. If Xx. Xxxxxxxxx dies during the term of this
Agreement, KMC shall, promptly after his death, pay to his designated
beneficiary or, if none, his estate (i) all accrued and unpaid Base Salary due
under Section 4(a) for that portion of the term of his employment hereunder
through the date of death, (ii) all unreimbursed expenses due under Section 5(c)
hereof, (iii) any Bonus Payment due under Section 4(c) hereof and (iv) any
insurance proceeds received by KMC under any life insurance policy maintained
for the benefit of Xx. Xxxxxxxxx pursuant to Section 5(b)(i).
(c) Disability Benefits. If, during the term of his employment
hereunder, Xx. Xxxxxxxxx becomes incapable of performing the responsibilities
contemplated herein (as confirmed by competent medical evidence reasonably
acceptable to KMC), KMC shall continue to pay to Xx. Xxxxxxxxx the compensation
due under Section 4 for the first three months of such incapacity. At its
option, KMC may, after the end of such three-month period, continue or extend,
as the case may be, the term of Xx. Xxxxxxxxx'x employment hereunder by
continuing to pay all compensation under this Agreement, or, at the end of such
three-month period or at any time thereafter, terminate the term of Xx.
Xxxxxxxxx'x employment hereunder by paying to Xx. Xxxxxxxxx (i) all accrued and
unpaid compensation due under Section 4 for that portion of the term of his
employment hereunder through the date of termination and (ii) all unreimbursed
expenses due under Section 5 hereof. Xx. Xxxxxxxxx hereby agrees to submit to
any medical examination or examinations as may be reasonably recommended by KMC
for the purpose of determining the existence or absence of such incapacity.
Nothing in this Agreement shall impair Xx. Xxxxxxxxx'x rights, if any, to
15
disability benefits under any disability plan or program of KMC in which Xx.
Xxxxxxxxx is a participant.
7. REPRESENTATIONS AND WARRANTIES BY XX. XXXXXXXXX.
(a) No Prohibitions under Other Agreements. Xx. Xxxxxxxxx hereby
represents and warrants, the same being part of the essence of this Agreement
that, as of the Commencement Date, he is not a party to any agreement, contract
or understanding, and that no facts or circumstances exist which would in any
way restrict or prohibit him from undertaking or performing any of his
obligations under this Agreement. The foregoing representation and warranty
shall remain in effect throughout the Term.
(b) Achievability of Business Plan. Xx. Xxxxxxxxx further represents and
warrants that he has read the Business Plan, believes it to be reasonable and
achievable, has participated in its finalization, and understands that he is
responsible for achieving the targets set forth therein.
8. TERMINATION OF EMPLOYMENT.
(a) Termination Without Cause. KMC may terminate this Agreement at
any time without cause upon ninety (90) days notice to Xx. Xxxxxxxxx. In such
event, Xx. Xxxxxxxxx shall continue to render his services hereunder, and shall
be paid his regular compensation up to the date of termination and be entitled
to receive the payments set forth in Section 4(d)(ii) hereof; provided, however,
if, during such ninety (90) day period, Xx. Xxxxxxxxx shall fail to perform the
services required of him pursuant to this Agreement, KMC may, at its option,
elect to terminate Xx. Xxxxxxxxx'x employment immediately. In such event, Xx.
Xxxxxxxxx shall cease to be an employee of KMC on the date that KMC elects to
terminate Xx. Xxxxxxxxx in accordance with this Section 8.
16
(b) Termination for Cause. KMC shall have the right to terminate the
term of Xx. Xxxxxxxxx'x employment hereunder for cause. For the purposes of
this Agreement, the term "cause" shall mean:
(i) misappropriation of corporate funds or other acts of fraud
or dishonesty by Xx. Xxxxxxxxx;
(ii) Xx. Xxxxxxxxx'x willful refusal to perform, or gross
negligence in connection with, his responsibilities under
Section 2 hereof;
(iii) Xx. Xxxxxxxxx'x breach of (A) any of the covenants or
agreements contained in Section 3 hereof, or (B) the
representations and warranties contained in Section 7(a)
hereof; and
(iv) Xx. Xxxxxxxxx'x being convicted of a felony.
(c) Maximum Liability. In the event Xx. Xxxxxxxxx'x employment
hereunder shall be terminated for reasons not expressly contemplated by this
Agreement then it is expressly understood and agreed that the maximum liability
for compensation owing by KMC to Xx. Xxxxxxxxx shall be all accrued and unpaid
Base Salary pursuant to Section 4(a), any earned but unpaid Bonus Payment
pursuant to Section 4(c) and any unreimbursed expenses pursuant to Section 5(c),
in each case, to the date of such termination.
9. ASSIGNABILITY. The obligations of Xx. Xxxxxxxxx hereunder are
personal and may not be assigned or transferred by him to any person or entity
in any manner whatsoever. This Agreement may be assigned by KMC to any parent,
subsidiary or Affiliate of KMC or any person, firm or corporation which succeeds
to the business of
17
KMC, if the obligations of KMC hereunder are expressly assumed by, and shall be
binding upon, the assignee or successor, and the assignee or successor is or
will then be engaged in the Business.
10. ARBITRATION. Except as otherwise provided in Sections 3(b) or 3(c)
hereof, any controversy or claim arising out of or relating to this Agreement or
any breach thereof shall be settled by 3 arbitrators in Bedminster, New Jersey,
or such other place in New Jersey as the parties hereto shall agree, in
accordance with the rules then promulgated by the American Arbitration
Association. Judgment upon any award rendered may be entered in any court
having jurisdiction thereof.
11. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement constitutes the
entire agreement of KMC and Xx. Xxxxxxxxx with respect to the subject matter
hereof and supersedes all prior written and oral agreements and understandings
with respect to such subject matter. Neither this Agreement nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by both parties. No failure
or delay of KMC in exercising any power or right under this Agreement shall
operate as a waiver hereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the exercise
of any other right or power.
12. NOTICES. Any notice or request required or permitted to be given
hereunder shall be deemed to have been properly given if it is given in writing
and is delivered personally or sent by registered mail, return receipt
requested. If to Xx. Xxxxxxxxx, such notice shall be sent to his new address,
which he will make known to KMC
18
by notice similarly given. If to KMC, such notice shall be directed to the
attention of Xxxxxx X. Xxxxxx at the address of KMC set forth in the first
paragraph hereof. In addition to notice to KMC, Xx. Xxxxxxxxx shall also
deliver or send a copy of any notice to KMC to Xxxx X. Xxxxxxx, Esq., Xxxxxx
Xxxx & Xxxxxx, LLP. 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
13. SEVERABILITY. Any provision of this Agreement that shall be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, KMC and Xx. Xxxxxxxxx hereby waive any provision of law that
renders any provision hereof prohibited or unenforceable in any respect;
provided that any final decision of any court of competent jurisdiction in the
State of New Jersey that is not subject to appeal with respect to Section 3
shall be binding on the parties in all jurisdictions.
14. GOVERNING LAW. This Agreement shall in all respects be governed by,
and construed, interpreted and enforced in accordance with, the law (excluding
principles of conflicts of law to the extent application thereof would result in
the application of the laws of another jurisdiction) of the State of New Jersey.
15. COUNTERPARTS. This Agreement may be executable in counterparts, each
of which, for all purposes, shall be deemed an original.
19
IN WITNESS WHEREOF, KMC has caused this Agreement to be signed by its duly
authorized officer and Xx. Xxxxxxxxx has signed this Agreement, each as of the
day and year first above written.
EMPLOYEE EMPLOYER
-------- --------
/s/ Xxxxxxx X. Xxxxxxxxx KMC TELECOM INC.
------------------------
Xxxxxxx X. Xxxxxxxxx
By:
---------------------------------
Title: Vice President
------------------------------
20
Exhibit 1
Number of Shares Option
of Common Price
Employment Year Date Option Vests Stock Vested Per Share
--------------- ----------------- ----------------- ---------
July 29, 1996 to July 29, 1997 -- 0 --
July 29, 1997 to July 29, 1998 July 29, 1997 5,000 $50
July 29, 1998 to July 29, 1999 July 29, 1998 15,000 $200
July 29, 1999 to July 29, 2000 July 29, 1999 15,000 $300
July 29, 2000 to July 29, 2001 July 29, 2000 5,000 $500
21
