EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of November 30,
1998, is by and between FirstWorld Communications, Inc., a Delaware
corporation (the "COMPANY") and Xxxxx Xxxxxxx ("EXECUTIVE").
RECITAL
The Company desires to employ Executive, effective as of November 30,
1998 (the "COMMENCEMENT DATE"), on the terms and conditions set forth in this
Agreement, and Executive desires to be so employed.
AGREEMENT
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Executive as the
Executive Vice President of Sales of the Company, and Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth.
2. TERM. The period of employment of Executive by the Company
hereunder (the "EMPLOYMENT PERIOD") shall commence at the Commencement Date
and shall continue through November 30, 2001. The Employment Period may be
sooner terminated by either party in accordance with Section 5 of this
Agreement.
3. POSITION AND DUTIES. During the Employment Period, Executive shall
serve as Executive Vice President of Sales of the Company. Executive shall
devote such time, attention and energies to Company affairs as are necessary
to fully perform his duties (other than absences due to illness or vacation)
for the Company. During the Employment Period, Executive shall not, directly
or indirectly, render services to any other organization, entity or person,
as an employee, independent contractor, consultant or otherwise, with or
without compensation, without the prior written consent of the Board of
Directors of the Company (the "Board"), unless such services are unrelated to
any telecommunications or internet business and do not interfere with his
duties to the Company.
4. COMPENSATION AND RELATED MATTERS.
(a) EQUALIZATION PAYMENT. To compensate Executive for certain
benefits that he may lose or forfeit as a result of his termination of
employment with his former employer, ICG Communications, Inc., and
commencement of employment with the Company, the Company shall pay Executive
in cash a $500,000 payment (the "EQUALIZATION PAYMENT") payable in three
installments. The first installment in the amount of $100,000 is due and
payable on January 1, 1999, the second installment in the amount of $200,000
is due and payable on January 1, 2000, and the third installment in the
amount of $200,000 is due and payable on January 1, 2001;
PROVIDED, HOWEVER, that Executive shall have no right to receive any
installment of the Equalization Payment if he is not employed by the Company
(or one of its Affiliates (as defined in Section 5(c)(iv) below)), whether or
not employed as the Executive Vice President of Sales, on the dates such
payments become due and payable as a result of Executive's (i) death, (ii)
Disability (as defined below) , (iii) termination for Cause (as defined
below) or (iv) voluntary termination of employment without Good Reason (as
defined below).
(b) SALARY. During the Employment Period, the Company shall pay
Executive an annual base salary of $185,000 per year ("BASE SALARY").
Executive's Base Salary shall be paid in approximately equal installments in
accordance with the Company's customary payroll schedule and practices.
Executive's Base Salary shall be subject to annual reviews commencing
December 1999 and each year thereafter. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute
the Base Salary for all purposes of this Agreement. All compensation paid to
Executive shall be subject to withholding and other employment taxes imposed
by applicable law.
(c) ANNUAL BONUS. The Board's compensation committee (the
"COMPENSATION COMMITTEE") shall review Executive's performance at least once
annually during each year of the Employment Period and, based on Executive's
performance, recommend whether the Company should award Executive a cash
bonus ("BONUS") in order to reward Executive for services rendered to the
Company and/or as an incentive for continued service to the Company. The
amount of Executive's Bonus, if any, shall be determined in the reasonable
discretion of the Compensation Committee and shall be dependent upon, among
other things, the achievement of certain performance levels by the Company,
including, without limitation, (i) the nature, magnitude and quality of the
services performed by Executive for the Company, (ii) the condition
(financial and other) and results of operations of the Company and (iii) the
compensation paid for positions of comparable responsibility and authority
within the telecommunications industry. The targeted amount of Executive's
Bonus shall be an amount equal to 40% of Base Salary at 100% completion of
applicable performance levels, to be set forth in the Company's Annual Bonus
Plan.
(d) STOCK OPTIONS. Effective as of the Commencement Date, Executive
shall be awarded a stock option (the "STOCK OPTION") to purchase 500,000 shares
of the Company's Series B Common Stock, par value $.0001 per share (the "Common
Stock"). The shares of Common Stock subject to the Stock Option shall vest in
increments of 125,000 shares on each of the first, second, third and fourth
anniversaries of the Commencement Date, with the shares in the first such
increment having an exercise price of $6.00, shares in the second such increment
having an exercise price of $6.50, shares in the third such increment having an
exercise price of $7.00 and shares in the fourth such increment having an
exercise price of $7.50. The Stock Option will be granted under one of the
Company's stock option plans and the terms and conditions of the Stock Option
will be determined in accordance with the applicable stock option plan.
Notwithstanding any such terms, however, all shares subject to the Stock Option
shall become immediately vested and exercisable in the event of the sale of all
or substantially all of the Company's assets or a merger or consolidation in
which the Company is not the surviving entity or the Company's shareholders
prior to the transaction own less than 50% of the voting power of the Company's
outstanding securities immediately following the transaction.
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(e) EXPENSES. The Company shall promptly reimburse Executive for
all reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified
with respect to all senior executive officers of the Company.
(f) WELFARE AND PENSION PLANS. In addition to Executive's Base
Salary and any incentive compensation and bonuses awarded to Executive
hereunder, he (and his family) shall be entitled to participate, to the
extent that he is (and they are) eligible under the terms and conditions
thereof, in any pension, retirement, hospitalization, insurance, disability
or medical service plan generally available to the executive officers of the
Company that may be in effect from time to time during the Employment Period.
The Company shall be under no obligation to institute or continue the
existence of any such employee benefit plan.
5. TERMINATION. Executive's employment hereunder may be terminated
during the Employment Period under the following circumstances:
(a) DEATH. Executive's employment hereunder shall terminate upon
his death.
(b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of thirty (30) consecutive
days, and within thirty (30) days after written Notice of Termination (as
defined in Section 6(a)) is given after such thirty (30) day period,
Executive shall not have returned to the substantial performance of his
duties on a full-time basis, the Company shall have the right to terminate
Executive's employment hereunder for "Disability," and such termination in
and of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement.
(c) CAUSE. The Company shall have the right to terminate
Executive's employment for Cause (as defined), and such termination in and of
itself shall not be, nor shall it be deemed to be, a breach of this
Agreement. For purposes of this Agreement, the Company shall have "Cause" to
terminate Executive's employment upon Executive's:
(i) conviction of, or plea of guilty or nolo contendere to,
any crime constituting a felony;
(ii) commission of a material act of dishonesty, fraud,
misrepresentation or other act of moral turpitude that would, in the
Board's reasonable judgment, prevent the effective performance of his
duties hereunder;
(iii) continued failure to substantially perform his duties
hereunder to the reasonable satisfaction of the Board (other than such
failure resulting from Executive's incapacity due to physical or mental
illness or subsequent to the issuance of a Notice of Termination by
Executive for Good Reason (as defined in Section 5(d)) after demand for
substantial performance is delivered by the Board in writing that
specifically identifies the
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manner in which the Board believes Executive has not used reasonable best
efforts to substantially perform his duties; or
(iv) willful misconduct (including, but not limited to, a
willful breach of the provisions of Section 8) that is, in the Board's
reasonable judgment, injurious to the Company or to any entity in control
of, controlled by or under common control with the Company ("Affiliate").
For purposes of this Section 5(c), no act, or failure to act, by
Executive shall be considered "WILLFUL" unless committed in bad faith and
without a reasonable belief that the act or omission was in the best
interests of the Company or any Affiliates thereof; PROVIDED, HOWEVER, that
the requirements outlined in paragraphs (iii) or (iv) above shall be deemed
to have occurred if Executive's action or non-action continues for more than
ten (10) days after Executive has received written notice of the
inappropriate action or non-action. This Section 5(c) shall not prevent
Executive from challenging the Board's determination that Cause exists or
that Executive has failed to cure any act (or failure to act) that
purportedly formed the basis for the Board's determination, under the
arbitration procedures set forth in Section 10 below.
(d) GOOD REASON. Executive may terminate his employment for "Good
Reason" within thirty (30) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of one of the following
events that has not been cured within thirty (30) days after written notice
thereof has been given by Executive to the Company (PROVIDED, that with
respect to this Section 5(d), the Company shall have the right to challenge
Executive's determination that he has the right to terminate his employment
for "Good Reason" under the arbitration procedures set forth in Section 10
below):
(i) a reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(ii) any purported termination of Executive's employment for
Cause which is not effected pursuant to the procedures of Section 5(c) (and
for purposes of this Agreement, no such purported termination shall be
effective);
(iii) the Company's failure to provide the Stock Option or the
Company's material breach of one or more of the stock option agreements
pursuant to which the Stock Option was issued to Executive;
(iv) the Company's failure to substantially provide any
material employee benefits due to be provided to Executive; or
(v) the Company's failure to provide in all material respects
the indemnification set forth in the agreement referenced in Section 9 of
this Agreement.
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Executive's continued employment during the thirty (30) day period
referred to above in this paragraph (d) shall not constitute Executive's
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(e) WITHOUT GOOD REASON OR CAUSE. Executive shall have the right
to terminate his employment hereunder without Good Reason and the Company
shall have the right to terminate Executive's employment hereunder without
Cause by providing the other with a Notice of Termination, and such
termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement.
6. TERMINATION PROCEDURE.
(a) NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company or by Executive during the Employment Period (other
than termination pursuant to Section 5(a)) shall be communicated by written
Notice of Termination (as defined below) to the other party hereto in
accordance with Section 12 below. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
(b) DATE OF TERMINATION. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated pursuant to Section 5(b), thirty
(30) days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period) and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY. In the event
Executive is disabled or his employment terminates during the Employment
Period, the Company shall provide Executive with the payments and benefits
set forth below. Executive acknowledges and agrees that the payments set
forth in this Section 7 constitute liquidated damages for termination of his
employment during the Employment Period.
(a) TERMINATION BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD
REASON. If Executive's employment is terminated by the Company without Cause
or by Executive for Good Reason:
(i) the Company shall pay to Executive a severance payment
equal to the amount of Base Salary Executive would have received under the
Agreement if Executive had remained employed throughout the Employment
Period stated in Section 2, plus accrued vacation, within thirty (30) days
following the Date of Termination;
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(ii) the Company shall reimburse Executive pursuant to Section
4(e) for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation, stock options (as described herein) and/or benefits as may be
due to Executive in accordance with the terms and provisions of any
agreements, plans or programs of the Company.
(b) TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD
REASON. If Executive's employment is terminated by the Company for Cause or
by Executive (other than for Good Reason):
(i) the Company shall pay Executive his Base Salary and, to
the extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination;
(ii) the Company shall reimburse Executive pursuant to Section
4(e) for reasonable expenses incurred, but not paid prior to such
termination of employment, unless such termination resulted from a
misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(c) DISABILITY. During any period that Executive fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, Executive shall continue to receive his full Base Salary set forth
in Section 4(b) until his employment is terminated pursuant to Section 5(b).
In the event Executive's employment is terminated for Disability pursuant to
Section 5(b):
(i) the Company shall pay to Executive his Base Salary and
accrued vacation pay through the Date of Termination, within 30 days
following the Date of Termination;
(ii) the Company shall reimburse Executive pursuant to Section
4(e) for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(d) DEATH. If Executive's employment is terminated by his death:
(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be,
Executive's Base Salary through the Date of Termination;
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(ii) the Company shall reimburse Executive's beneficiary, legal
representatives, or estate, as the case may be, pursuant to Section 4(e)
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary, legal representatives or estate,
as the case may be, shall be entitled to any other rights, compensation and
benefits as may be due to any such persons or estate in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
8. CONFIDENTIAL INFORMATION, OWNERSHIP OF DOCUMENTS; NON-COMPETITION.
(a) CONFIDENTIAL INFORMATION. Executive shall hold in a fiduciary
capacity for the benefit of the Company all Confidential Information (as
defined below) relating to the Company and its businesses and investments,
which shall have been obtained by Executive during Executive's employment by
the Company and which is not generally available public knowledge (other than
by acts of Executive in violation of this Agreement). Except as may be
required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company
(in which case Executive shall use his reasonable best efforts in cooperating
with the Company in obtaining a protective order against disclosure by a
court of competent jurisdiction), communicate or divulge any such
Confidential Information relating to the Company to anyone other than the
Company and those designated by the Company or on behalf of the Company in
the furtherance of its business or to perform duties hereunder.
For the purposes hereof, the term "Confidential Information" means, with
respect to any person, any information concerning such person or its
business, products, financial condition, prospects and affairs that is not
generally available to the public. The term Confidential Information shall
not include information that: (i) is already known to the recipient and was
properly obtained by the recipient prior to the date of this Agreement; (ii)
is in the public domain other than through a negligent act or omission or
willful misconduct of the recipient; (iii) is acquired in good faith from a
third party and, at the time of the acquisition, the recipient had no
knowledge or reason to believe that such information was wrongfully obtained
or disclosed by the third party; (iv) is independently developed by the
recipient from information not defined as "Confidential Information" in this
Agreement, as evidenced by the recipient's written records; (v) is disclosed
to third parties by the disclosing party without restriction; (vi) is
required to be disclosed under applicable law or by a valid subpoena or other
court or governmental order, decree, regulation or rule; PROVIDED, HOWEVER,
that if disclosure is required under this provision the recipient shall
advise the disclosing party of the requirement to disclose the Confidential
Information prior to such disclosure and as soon as reasonably practicable
after the recipient becomes aware of such required disclosure; and FURTHER
PROVIDED THAT upon the request of the disclosing party, the recipient agrees
to cooperate in good faith with any reasonable and lawful actions which the
disclosing party takes to resist such disclosure, limit the
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information to be disclosed or limit the extent to which the information so
disclosed may be used or made available to third parties, at the cost of the
disclosing party.
(b) REMOVAL OF DOCUMENTS; RIGHTS TO PRODUCTS. All records, files,
drawings, documents, models, equipment, and the like relating to the
Company's business, which Executive has control over shall not be removed
from the Company's premises by Executive without the Board's written consent,
unless such removal is in the furtherance of the Company's business or is in
connection with Executive's carrying out his duties under this Agreement and,
if so removed by Executive, shall be returned to the Company promptly after
termination of Executive's employment hereunder, or otherwise promptly after
removal if such removal occurs following termination of employment.
Executive shall assign to the Company all rights to trade secrets and other
products relating to the Company's business developed by him alone or in
conjunction with others at any time while employed by the Company.
(c) CONTINUING OPERATION. Except as specifically provided in this
Section 8, the termination of Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 8.
9. INDEMNIFICATION.
(a) Upon the Commencement Date, Executive will enter into the
Company's standard directors and officers indemnification agreement.
(b) Upon the Commencement Date, Company will ensure that Executive
is added as an insured on its directors and officers liability insurance
policy. In the event that Executive's employment relationship with Company is
severed, for any reason, the Company will provide that Executive shall
continue to be an insured under the Company's directors and officers
liability insurance policy for as long as the Company retains such coverage,
and if the Company discontinues such coverage, Executive and/or his heirs or
personal or legal representative shall be given the opportunity to purchase
continuation coverage in accordance with the terms of the applicable policy.
10. ARBITRATION. Any controversy between Executive and the Company
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, including, without limitation, the
determination of whether "Cause" or "Good Reason" exists under Section 5(c)
or Section 5(d) hereof and claims involving specific performance, shall on
the written request of either party served on the other in accordance with
Section 12 below be submitted to binding arbitration. EACH PARTY, BY SIGNING
THIS AGREEMENT, VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVES ANY RIGHTS
SUCH PARTY MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR OTHER FORUMS,
INCLUDING THE RIGHT TO A JURY TRIAL. Arbitration shall comply with and be
governed in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). The arbitration will be conducted only
in Denver, Colorado, before a single arbitrator selected by the parties or,
if they are unable to agree on an arbitrator, before an arbitrator selected
by the AAA. The arbitrator shall have full authority to order specific
performance and award damages and other relief available under this Agreement
or applicable
8
law, but shall have no authority to add to, detract from, change or amend the
terms of this Agreement or existing law. All arbitration proceedings,
including settlements and awards, shall be confidential. The decision of the
arbitrator will be final and binding, and judgment on the award by the
arbitrator may be entered in any court of competent jurisdiction. THIS
SUBMISSION AND AGREEMENT TO ARBITRATE WILL BE SPECIFICALLY ENFORCEABLE. The
arbitrator will have no power to award punitive or exemplary damages, to
ignore or vary the terms of this Agreement and any other agreement between
Executive and the Company and will be bound to apply controlling law. The
prevailing party in any such arbitration shall be entitled to receive the
costs of arbitration, including reasonable attorneys' fees and costs, from
the losing party.
11. SUCCESSORS; BINDING AGREEMENT.
(a) COMPANY'S SUCCESSORS. No rights or obligations of the Company
under this Agreement may be assigned or transferred, except that the Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in
this Agreement, "Company" shall mean the Company as herein before defined and
any successor to its business and/or assets (by merger, purchase or
otherwise) which executes and delivers the agreement provided for in this
Section 11 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) EXECUTIVE'S SUCCESSORS. No rights or obligations of Executive
under this Agreement may be assigned or transferred by Executive other than
his rights to payments or benefits hereunder, which may be transferred only
by will or the laws of descent and distribution. Upon Executive's death, this
Agreement and all rights of Executive hereunder shall inure to the benefit of
and be enforceable by Executive's beneficiary or beneficiaries, personal or
legal representatives or estate, to the extent any such person succeeds to
Executive's interests under this Agreement. Executive shall be entitled to
select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by giving the
Company written notice thereof. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his
beneficiary(ies), estate or other legal representative(s). If Executive
should die following his Date of Termination while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts unless
otherwise provided herein shall be paid in accordance with the terms of this
Agreement to such person or persons so appointed in writing by Executive, or
otherwise to his legal representatives or estate.
12. NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered either personally
or by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
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If to Executive:
Xxxxx Xxxxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
If to the Company:
FirstWorld Communications, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Secretary
Telecopy: (000) 000-0000
With a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
13. WAIVER. No provisions of this Agreement may be amended, modified,
or waived unless such amendment or modification is agreed to in a writing
signed by Executive and by a duly authorized officer of the Company, and such
waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time
14. SURVIVAL. Except as otherwise expressly set forth herein, the
respective rights and obligations of the parties under this Agreement shall
survive Executive's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation of such
rights and obligations.
15. CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Colorado without regard to its conflicts of law principles.
16. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
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17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument. Facsimile
signatures will be deemed to be effective originals hereunder.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any officer, employee or representative of any party hereto in respect of
such subject matter. Any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and canceled.
19. WITHHOLDING. All payments hereunder shall be subject to any
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
20. SECTION HEADINGS. The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and
shall not affect its interpretation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
FIRSTWORLD COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
/s/ Xxxxx Xxxxxxx
----------------------------------------------
XXXXX XXXXXXX
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of November 30,
1998, is by and between FirstWorld Communications, Inc., a Delaware
corporation (the "COMPANY") and Xxxxx Xxxxxxx ("EXECUTIVE").
RECITAL
The Company desires to employ Executive, effective as of November 30,
1998 (the "COMMENCEMENT DATE"), on the terms and conditions set forth in this
Agreement, and Executive desires to be so employed.
AGREEMENT
IN CONSIDERATION of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Executive as the
Executive Vice President of Sales of the Company, and Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth.
2. TERM. The period of employment of Executive by the Company
hereunder (the "EMPLOYMENT PERIOD") shall commence at the Commencement Date
and shall continue through November 30, 2001. The Employment Period may be
sooner terminated by either party in accordance with Section 5 of this
Agreement.
3. POSITION AND DUTIES. During the Employment Period, Executive shall
serve as Executive Vice President of Sales of the Company. Executive shall
devote such time, attention and energies to Company affairs as are necessary
to fully perform his duties (other than absences due to illness or vacation)
for the Company. During the Employment Period, Executive shall not, directly
or indirectly, render services to any other organization, entity or person,
as an employee, independent contractor, consultant or otherwise, with or
without compensation, without the prior written consent of the Board of
Directors of the Company (the "Board"), unless such services are unrelated to
any telecommunications or internet business and do not interfere with his
duties to the Company.
4. COMPENSATION AND RELATED MATTERS.
(a) EQUALIZATION PAYMENT. To compensate Executive for certain
benefits that he may lose or forfeit as a result of his termination of
employment with his former employer, ICG Communications, Inc., and
commencement of employment with the Company, the Company shall pay Executive
in cash a $500,000 payment (the "EQUALIZATION PAYMENT") payable in three
installments. The first installment in the amount of $100,000 is due and
payable on January 1, 1999, the second installment in the amount of $200,000
is due and payable on January 1, 2000, and the third installment in the
amount of $200,000 is due and payable on January 1, 2001;
PROVIDED, HOWEVER, that Executive shall have no right to receive any
installment of the Equalization Payment if he is not employed by the Company
(or one of its Affiliates (as defined in Section 5(c)(iv) below)), whether or
not employed as the Executive Vice President of Sales, on the dates such
payments become due and payable as a result of Executive's (i) death, (ii)
Disability (as defined below) , (iii) termination for Cause (as defined
below) or (iv) voluntary termination of employment without Good Reason (as
defined below).
(b) SALARY. During the Employment Period, the Company shall pay
Executive an annual base salary of $185,000 per year ("BASE SALARY").
Executive's Base Salary shall be paid in approximately equal installments in
accordance with the Company's customary payroll schedule and practices.
Executive's Base Salary shall be subject to annual reviews commencing
December 1999 and each year thereafter. If Executive's Base Salary is
increased by the Company, such increased Base Salary shall then constitute
the Base Salary for all purposes of this Agreement. All compensation paid to
Executive shall be subject to withholding and other employment taxes imposed
by applicable law.
(c) ANNUAL BONUS. The Board's compensation committee (the
"COMPENSATION COMMITTEE") shall review Executive's performance at least once
annually during each year of the Employment Period and, based on Executive's
performance, recommend whether the Company should award Executive a cash
bonus ("BONUS") in order to reward Executive for services rendered to the
Company and/or as an incentive for continued service to the Company. The
amount of Executive's Bonus, if any, shall be determined in the reasonable
discretion of the Compensation Committee and shall be dependent upon, among
other things, the achievement of certain performance levels by the Company,
including, without limitation, (i) the nature, magnitude and quality of the
services performed by Executive for the Company, (ii) the condition
(financial and other) and results of operations of the Company and (iii) the
compensation paid for positions of comparable responsibility and authority
within the telecommunications industry. The targeted amount of Executive's
Bonus shall be an amount equal to 40% of Base Salary at 100% completion of
applicable performance levels, to be set forth in the Company's Annual Bonus
Plan.
(d) STOCK OPTIONS. Effective as of the Commencement Date, Executive
shall be awarded a stock option (the "STOCK OPTION") to purchase 500,000 shares
of the Company's Series B Common Stock, par value $.0001 per share (the "Common
Stock"). The shares of Common Stock subject to the Stock Option shall vest in
increments of 125,000 shares on each of the first, second, third and fourth
anniversaries of the Commencement Date, with the shares in the first such
increment having an exercise price of $6.00, shares in the second such increment
having an exercise price of $6.50, shares in the third such increment having an
exercise price of $7.00 and shares in the fourth such increment having an
exercise price of $7.50. The Stock Option will be granted under one of the
Company's stock option plans and the terms and conditions of the Stock Option
will be determined in accordance with the applicable stock option plan.
Notwithstanding any such terms, however, all shares subject to the Stock Option
shall become immediately vested and exercisable in the event of the sale of all
or substantially all of the Company's assets or a merger or consolidation in
which the Company is not the surviving entity or the Company's shareholders
prior to the transaction own less than 50% of the voting power of the Company's
outstanding securities immediately following the transaction.
2
(e) EXPENSES. The Company shall promptly reimburse Executive for
all reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified
with respect to all senior executive officers of the Company.
(f) WELFARE AND PENSION PLANS. In addition to Executive's Base
Salary and any incentive compensation and bonuses awarded to Executive
hereunder, he (and his family) shall be entitled to participate, to the
extent that he is (and they are) eligible under the terms and conditions
thereof, in any pension, retirement, hospitalization, insurance, disability
or medical service plan generally available to the executive officers of the
Company that may be in effect from time to time during the Employment Period.
The Company shall be under no obligation to institute or continue the
existence of any such employee benefit plan.
5. TERMINATION. Executive's employment hereunder may be terminated
during the Employment Period under the following circumstances:
(a) DEATH. Executive's employment hereunder shall terminate upon
his death.
(b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of thirty (30) consecutive
days, and within thirty (30) days after written Notice of Termination (as
defined in Section 6(a)) is given after such thirty (30) day period,
Executive shall not have returned to the substantial performance of his
duties on a full-time basis, the Company shall have the right to terminate
Executive's employment hereunder for "Disability," and such termination in
and of itself shall not be, nor shall it be deemed to be, a breach of this
Agreement.
(c) CAUSE. The Company shall have the right to terminate
Executive's employment for Cause (as defined), and such termination in and of
itself shall not be, nor shall it be deemed to be, a breach of this
Agreement. For purposes of this Agreement, the Company shall have "Cause" to
terminate Executive's employment upon Executive's:
(i) conviction of, or plea of guilty or nolo contendere to,
any crime constituting a felony;
(ii) commission of a material act of dishonesty, fraud,
misrepresentation or other act of moral turpitude that would, in the
Board's reasonable judgment, prevent the effective performance of his
duties hereunder;
(iii) continued failure to substantially perform his duties
hereunder to the reasonable satisfaction of the Board (other than such
failure resulting from Executive's incapacity due to physical or mental
illness or subsequent to the issuance of a Notice of Termination by
Executive for Good Reason (as defined in Section 5(d)) after demand for
substantial performance is delivered by the Board in writing that
specifically identifies the
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manner in which the Board believes Executive has not used reasonable best
efforts to substantially perform his duties; or
(iv) willful misconduct (including, but not limited to, a
willful breach of the provisions of Section 8) that is, in the Board's
reasonable judgment, injurious to the Company or to any entity in control
of, controlled by or under common control with the Company ("Affiliate").
For purposes of this Section 5(c), no act, or failure to act, by
Executive shall be considered "WILLFUL" unless committed in bad faith and
without a reasonable belief that the act or omission was in the best
interests of the Company or any Affiliates thereof; PROVIDED, HOWEVER, that
the requirements outlined in paragraphs (iii) or (iv) above shall be deemed
to have occurred if Executive's action or non-action continues for more than
ten (10) days after Executive has received written notice of the
inappropriate action or non-action. This Section 5(c) shall not prevent
Executive from challenging the Board's determination that Cause exists or
that Executive has failed to cure any act (or failure to act) that
purportedly formed the basis for the Board's determination, under the
arbitration procedures set forth in Section 10 below.
(d) GOOD REASON. Executive may terminate his employment for "Good
Reason" within thirty (30) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of one of the following
events that has not been cured within thirty (30) days after written notice
thereof has been given by Executive to the Company (PROVIDED, that with
respect to this Section 5(d), the Company shall have the right to challenge
Executive's determination that he has the right to terminate his employment
for "Good Reason" under the arbitration procedures set forth in Section 10
below):
(i) a reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(ii) any purported termination of Executive's employment for
Cause which is not effected pursuant to the procedures of Section 5(c) (and
for purposes of this Agreement, no such purported termination shall be
effective);
(iii) the Company's failure to provide the Stock Option or the
Company's material breach of one or more of the stock option agreements
pursuant to which the Stock Option was issued to Executive;
(iv) the Company's failure to substantially provide any
material employee benefits due to be provided to Executive; or
(v) the Company's failure to provide in all material respects
the indemnification set forth in the agreement referenced in Section 9 of
this Agreement.
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Executive's continued employment during the thirty (30) day period
referred to above in this paragraph (d) shall not constitute Executive's
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(e) WITHOUT GOOD REASON OR CAUSE. Executive shall have the right
to terminate his employment hereunder without Good Reason and the Company
shall have the right to terminate Executive's employment hereunder without
Cause by providing the other with a Notice of Termination, and such
termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement.
6. TERMINATION PROCEDURE.
(a) NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company or by Executive during the Employment Period (other
than termination pursuant to Section 5(a)) shall be communicated by written
Notice of Termination (as defined below) to the other party hereto in
accordance with Section 12 below. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
(b) DATE OF TERMINATION. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated pursuant to Section 5(b), thirty
(30) days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period) and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY. In the event
Executive is disabled or his employment terminates during the Employment
Period, the Company shall provide Executive with the payments and benefits
set forth below. Executive acknowledges and agrees that the payments set
forth in this Section 7 constitute liquidated damages for termination of his
employment during the Employment Period.
(a) TERMINATION BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD
REASON. If Executive's employment is terminated by the Company without Cause
or by Executive for Good Reason:
(i) the Company shall pay to Executive a severance payment
equal to the amount of Base Salary Executive would have received under the
Agreement if Executive had remained employed throughout the Employment
Period stated in Section 2, plus accrued vacation, within thirty (30) days
following the Date of Termination;
5
(ii) the Company shall reimburse Executive pursuant to Section
4(e) for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation, stock options (as described herein) and/or benefits as may be
due to Executive in accordance with the terms and provisions of any
agreements, plans or programs of the Company.
(b) TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD
REASON. If Executive's employment is terminated by the Company for Cause or
by Executive (other than for Good Reason):
(i) the Company shall pay Executive his Base Salary and, to
the extent required by law or the Company's vacation policy, his accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination;
(ii) the Company shall reimburse Executive pursuant to Section
4(e) for reasonable expenses incurred, but not paid prior to such
termination of employment, unless such termination resulted from a
misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(c) DISABILITY. During any period that Executive fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, Executive shall continue to receive his full Base Salary set forth
in Section 4(b) until his employment is terminated pursuant to Section 5(b).
In the event Executive's employment is terminated for Disability pursuant to
Section 5(b):
(i) the Company shall pay to Executive his Base Salary and
accrued vacation pay through the Date of Termination, within 30 days
following the Date of Termination;
(ii) the Company shall reimburse Executive pursuant to Section
4(e) for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the
Company.
(d) DEATH. If Executive's employment is terminated by his death:
(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be,
Executive's Base Salary through the Date of Termination;
6
(ii) the Company shall reimburse Executive's beneficiary, legal
representatives, or estate, as the case may be, pursuant to Section 4(e)
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary, legal representatives or estate,
as the case may be, shall be entitled to any other rights, compensation and
benefits as may be due to any such persons or estate in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
8. CONFIDENTIAL INFORMATION, OWNERSHIP OF DOCUMENTS; NON-COMPETITION.
(a) CONFIDENTIAL INFORMATION. Executive shall hold in a fiduciary
capacity for the benefit of the Company all Confidential Information (as
defined below) relating to the Company and its businesses and investments,
which shall have been obtained by Executive during Executive's employment by
the Company and which is not generally available public knowledge (other than
by acts of Executive in violation of this Agreement). Except as may be
required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company
(in which case Executive shall use his reasonable best efforts in cooperating
with the Company in obtaining a protective order against disclosure by a
court of competent jurisdiction), communicate or divulge any such
Confidential Information relating to the Company to anyone other than the
Company and those designated by the Company or on behalf of the Company in
the furtherance of its business or to perform duties hereunder.
For the purposes hereof, the term "Confidential Information" means, with
respect to any person, any information concerning such person or its
business, products, financial condition, prospects and affairs that is not
generally available to the public. The term Confidential Information shall
not include information that: (i) is already known to the recipient and was
properly obtained by the recipient prior to the date of this Agreement; (ii)
is in the public domain other than through a negligent act or omission or
willful misconduct of the recipient; (iii) is acquired in good faith from a
third party and, at the time of the acquisition, the recipient had no
knowledge or reason to believe that such information was wrongfully obtained
or disclosed by the third party; (iv) is independently developed by the
recipient from information not defined as "Confidential Information" in this
Agreement, as evidenced by the recipient's written records; (v) is disclosed
to third parties by the disclosing party without restriction; (vi) is
required to be disclosed under applicable law or by a valid subpoena or other
court or governmental order, decree, regulation or rule; PROVIDED, HOWEVER,
that if disclosure is required under this provision the recipient shall
advise the disclosing party of the requirement to disclose the Confidential
Information prior to such disclosure and as soon as reasonably practicable
after the recipient becomes aware of such required disclosure; and FURTHER
PROVIDED THAT upon the request of the disclosing party, the recipient agrees
to cooperate in good faith with any reasonable and lawful actions which the
disclosing party takes to resist such disclosure, limit the
7
information to be disclosed or limit the extent to which the information so
disclosed may be used or made available to third parties, at the cost of the
disclosing party.
(b) REMOVAL OF DOCUMENTS; RIGHTS TO PRODUCTS. All records, files,
drawings, documents, models, equipment, and the like relating to the
Company's business, which Executive has control over shall not be removed
from the Company's premises by Executive without the Board's written consent,
unless such removal is in the furtherance of the Company's business or is in
connection with Executive's carrying out his duties under this Agreement and,
if so removed by Executive, shall be returned to the Company promptly after
termination of Executive's employment hereunder, or otherwise promptly after
removal if such removal occurs following termination of employment.
Executive shall assign to the Company all rights to trade secrets and other
products relating to the Company's business developed by him alone or in
conjunction with others at any time while employed by the Company.
(c) CONTINUING OPERATION. Except as specifically provided in this
Section 8, the termination of Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 8.
9. INDEMNIFICATION.
(a) Upon the Commencement Date, Executive will enter into the
Company's standard directors and officers indemnification agreement.
(b) Upon the Commencement Date, Company will ensure that Executive
is added as an insured on its directors and officers liability insurance
policy. In the event that Executive's employment relationship with Company is
severed, for any reason, the Company will provide that Executive shall
continue to be an insured under the Company's directors and officers
liability insurance policy for as long as the Company retains such coverage,
and if the Company discontinues such coverage, Executive and/or his heirs or
personal or legal representative shall be given the opportunity to purchase
continuation coverage in accordance with the terms of the applicable policy.
10. ARBITRATION. Any controversy between Executive and the Company
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, including, without limitation, the
determination of whether "Cause" or "Good Reason" exists under Section 5(c)
or Section 5(d) hereof and claims involving specific performance, shall on
the written request of either party served on the other in accordance with
Section 12 below be submitted to binding arbitration. EACH PARTY, BY SIGNING
THIS AGREEMENT, VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVES ANY RIGHTS
SUCH PARTY MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR OTHER FORUMS,
INCLUDING THE RIGHT TO A JURY TRIAL. Arbitration shall comply with and be
governed in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). The arbitration will be conducted only
in Denver, Colorado, before a single arbitrator selected by the parties or,
if they are unable to agree on an arbitrator, before an arbitrator selected
by the AAA. The arbitrator shall have full authority to order specific
performance and award damages and other relief available under this Agreement
or applicable
8
law, but shall have no authority to add to, detract from, change or amend the
terms of this Agreement or existing law. All arbitration proceedings,
including settlements and awards, shall be confidential. The decision of the
arbitrator will be final and binding, and judgment on the award by the
arbitrator may be entered in any court of competent jurisdiction. THIS
SUBMISSION AND AGREEMENT TO ARBITRATE WILL BE SPECIFICALLY ENFORCEABLE. The
arbitrator will have no power to award punitive or exemplary damages, to
ignore or vary the terms of this Agreement and any other agreement between
Executive and the Company and will be bound to apply controlling law. The
prevailing party in any such arbitration shall be entitled to receive the
costs of arbitration, including reasonable attorneys' fees and costs, from
the losing party.
11. SUCCESSORS; BINDING AGREEMENT.
(a) COMPANY'S SUCCESSORS. No rights or obligations of the Company
under this Agreement may be assigned or transferred, except that the Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in
this Agreement, "Company" shall mean the Company as herein before defined and
any successor to its business and/or assets (by merger, purchase or
otherwise) which executes and delivers the agreement provided for in this
Section 11 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) EXECUTIVE'S SUCCESSORS. No rights or obligations of Executive
under this Agreement may be assigned or transferred by Executive other than
his rights to payments or benefits hereunder, which may be transferred only
by will or the laws of descent and distribution. Upon Executive's death, this
Agreement and all rights of Executive hereunder shall inure to the benefit of
and be enforceable by Executive's beneficiary or beneficiaries, personal or
legal representatives or estate, to the extent any such person succeeds to
Executive's interests under this Agreement. Executive shall be entitled to
select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by giving the
Company written notice thereof. In the event of Executive's death or a
judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his
beneficiary(ies), estate or other legal representative(s). If Executive
should die following his Date of Termination while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts unless
otherwise provided herein shall be paid in accordance with the terms of this
Agreement to such person or persons so appointed in writing by Executive, or
otherwise to his legal representatives or estate.
12. NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered either personally
or by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
9
If to Executive:
Xxxxx Xxxxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
If to the Company:
FirstWorld Communications, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Secretary
Telecopy: (000) 000-0000
With a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
13. WAIVER. No provisions of this Agreement may be amended, modified,
or waived unless such amendment or modification is agreed to in a writing
signed by Executive and by a duly authorized officer of the Company, and such
waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time
14. SURVIVAL. Except as otherwise expressly set forth herein, the
respective rights and obligations of the parties under this Agreement shall
survive Executive's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation of such
rights and obligations.
15. CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Colorado without regard to its conflicts of law principles.
16. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
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17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument. Facsimile
signatures will be deemed to be effective originals hereunder.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any officer, employee or representative of any party hereto in respect of
such subject matter. Any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and canceled.
19. WITHHOLDING. All payments hereunder shall be subject to any
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
20. SECTION HEADINGS. The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and
shall not affect its interpretation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
FIRSTWORLD COMMUNICATIONS, INC.,
a Delaware corporation
By:
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
----------------------------------------------
XXXXX XXXXXXX
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