EXHIBIT 10.8
EMPLOYMENT AGREEMENT
AGREEMENT dated as of August 16, 1998, by and between NETWORK ACCESS
SOLUTIONS, Inc. a Delaware corporation ("NAS" or the "Company"), and Xxxxxxxx
Xxxx (the "Executive").
In consideration of the mutual covenants herein contained and of the mutual
benefits herein provided, the Company and the Executive agree as follows:
1. REPRESENTATIONS AND WARRANTIES. The Executive represents and warrants
to the Company that Executive is not bound by any restrictive covenants and has
no prior or other obligations or commitments of any kind that would in any way
prevent, restrict, hinder or interfere with Executive's acceptance of continued
employment or the performance of all duties and services hereunder to the
fullest extent of the Executive's ability and knowledge. The Executive agrees
to indemnify and hold harmless the Company for any liability which the Company
may incur as the result of the existence of any such covenants, obligations or
commitments.
2. TERM OF EMPLOYMENT. The Company will continue to employ the Executive
and the Executive accepts continued employment by the Company on the terms and
conditions herein contained for a period (the "Employment Period") provided in
paragraph 5.
3. DUTIES AND FUNCTIONS.
(a) (1) The Executive shall be employed as Chief Executive Officer of the
Company and shall oversee and direct strategic and key operational issues
of the Company. The Executive shall report directly to the Board of
Directors (the "Board").
(2) The Executive agrees to undertake the duties and responsibilities
inherent in the position of Chief Executive Officer, which may encompass
different or additional duties as may, from time to time, be assigned by
the Board. The Executive agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any
change thereof which may be adopted at any time by the Company.
(b) During the Employment Period, the Executive will devote his full time
and efforts to the business of the Company and will not engage in
consulting work or any trade or business for his own account or for or on
behalf of any other person, firm or corporation which competes, conflicts
or interferes with the performance of his duties hereunder in any way. The
Executive may engage in non-competitive business or charitable activities
for reasonable periods of time each month so long as such activities do not
interfere with the Executive's responsibilities under this Employment
Agreement.
4. COMPENSATION.
(a) Base Salary: As compensation for his services hereunder, during the
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Executive's employment, the Company agrees to pay the Executive a base
salary at the rate of $240,000 per annum, payable in accordance with the
Company's normal payroll schedule, or on such other periodic basis as may
be mutually agreed upon. Such salary shall be subject to annual review,
based on corporate policy and contributions made by Executive to the
enterprise. As a result of each annual review, the Executive's salary will
increase by a minimum of five percent (5%). Said annual salary increase
will commence, effective July 31, 1999, and continue annually on July 31st
thereafter. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(b) Bonus: Executive shall be eligible to receive an annual cash and/or
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stock bonus award with a target bonus of 20% of the Executive's then
current salary. Said bonus is contingent upon the Executive achieving
deliverables or goals agreed to by the Executive and the Board or
Compensation Committee. Said bonus shall be determined by the Board or
Compensation Committee and paid annually in December. The Executive's
bonus for calendar year 1998 shall be prorated to take into account the
partial year of the Executive's employment contract period.
(c) Other Expenses: In addition to the compensation provided for above,
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the Company agrees to pay or to reimburse the Executive during his
employment for all reasonable, ordinary and necessary, properly vouchered,
client-related business or entertainment expenses incurred in the
performance of his services hereunder in accordance with Company policy in
effect from time to time, provided, however, that the amount available to
the Executive for such travel, entertainment and other expenses may require
advance approval by the Chief Executive Officer (or senior most position of
the Company). The Executive shall submit vouchers and receipts for all
expenses for which reimbursement is sought.
(d) Vacation: The Executive shall be allowed 3 weeks of paid vacation
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during each calendar year.
(e) Car Allowance: The Company shall provide the Executive with an
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automobile expense allowance of $800 per month, regardless of the
Executive's ownership of an automobile.
(f) Fringe Benefits: In addition to his compensation provided by the
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foregoing, the Executive shall be entitled to the benefits available
generally to Company employees
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pursuant to Company programs, including, by way of illustration, personal
leave, paid holidays, sick leave, profit-sharing, retirement, disability,
dental, vision, group sickness, accident or health insurance programs of
the Company which may now or, if not terminated, shall hereafter be in
effect, or in any other or additional such programs which may be
established by the Company, as and to the extent any such programs are or
may from time to time be in effect, as determined by the Company and the
terms hereof.
5. EMPLOYMENT PERIOD; TERMINATION.
(a) The Executive's employment shall continue unabated until terminated by
either party pursuant to the terms of this Agreement.
(b) The Executive's employment with the Company under this Agreement shall
be effective as of the date of this Agreement and shall continue until
terminated upon the earlier to occur of the following events: (i) the
close of business on the fourth anniversary of this Agreement or (ii) the
death or permanent disability (as defined in Paragraph 5 (f)) of the
Executive, provided, however, that, on the fourth anniversary of the date
of this Agreement, and on every subsequent annual anniversary, and unless
either party has given the other party written notice at least thirty (30)
days prior to the such anniversary date, the term of this Agreement and the
Employment Period shall be renewed for a term ending one (1) year
subsequent to such date, unless sooner terminated as provided herein.
(c) Notwithstanding the provisions of paragraphs 5 (a) and (b) above, the
Executive may terminate the employment relationship at any time for any
reason by giving the Company written notice at least thirty (30) days prior
to the effective date of termination. Unless otherwise provided by this
Section, all compensation and benefits paid by the Company to the Executive
shall cease upon his last day of employment. However, if the Executive
terminates his employment due to a material breach of this Employment
Agreement by the Company or due to a material reduction in the
responsibilities or reporting relationship of the Executive, the Company
will continue to pay the Executive's base salary, bonus compensation and
medical benefits for up to twelve (12) months. The Executive acknowledges
and agrees that the non-compete restrictions set forth in Section 7 of this
Employment Agreement will remain in full force and effect for the twelve
(12) month period after the termination of his employment. At its sole
election and discretion, the Company may release the Executive from the
non-compete restrictions of this Agreement. If said election is made, the
Company will continue to pay the Executive's base salary, a pro-rated bonus
and medical benefits for a six (6) month period.
(d) If the Executive's employment is terminated "for cause," the Executive
will not be entitled to and shall not receive any compensation or benefits
of any type following the
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effective date of termination. As used in this Agreement, the term "for
cause" shall include a termination for conviction of a felony, a willful
unauthorized disclosure of material confidential information, a violation
of any material Company rule, regulation or policy which has a material
adverse impact to the Company, or a breach of any material obligation under
this Agreement, including, without limitation, willful refusal to perform
the Executive's duties hereunder, except in the event that the Executive
becomes permanently disabled as set forth in paragraph 5 (f). Anything
herein to the contrary notwithstanding, the Company shall give the
Executive written notice prior to terminating this Agreement of the
Executive's material breach of this Agreement, setting forth the exact
nature of any alleged breach and the conduct required to cure such breach.
The Executive shall have thirty (30) days from the giving of such notice
within which to cure, and shall be entitled to appear before the Board to
discuss such written notice of material breach. Notwithstanding the
forgoing, actions or inactions on the part of the Executive which were
taken or not taken in good faith shall not constitute a material breach of
this agreement.
(e) Upon sixty (60) days written notice, the Company shall retain the right
to terminate the Executive without cause. If the Executive's employment is
terminated by the Company without cause, the Executive shall continue to
receive his base salary, bonus and medical benefits for a period of twelve
(12) months. The Executive acknowledges and agrees that the non-compete
restrictions set forth in Section 7 of this Employment Agreement will
remain in full force and effect for the twelve (12) month period subsequent
to his termination. At its sole election and discretion, the Company may
release the Executive from the non-compete restrictions of this Agreement.
If said election is made, the Company will continue to pay the Executive's
base salary, a pro-rated bonus and medical benefits for a six (6) month
period.
(f) In the event the Executive becomes permanently disabled during
employment with the Company, the Company may terminate this Agreement by
giving thirty (30) days notice to the Executive of its intent to terminate,
and unless the Executive resumes performance of the duties set forth in
Paragraph 3 within five (5) days of the date of the notice and continues
performance for the remainder of the notice period, this Agreement shall
terminate at the end of the thirty (30) day period. The Executive will not
be entitled to and shall not receive any compensation or benefits of any
type following the effective date of termination. "Permanently disabled"
for the purposes of this Agreement means the inability, due to physical or
mental ill health, to perform the Executive's duties for one hundred eighty
(180) days during any one employment year irrespective of whether such days
are consecutive.
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(g) This Agreement will terminate immediately upon the Executive's death
and no further compensation or benefits of any type will be paid to the
Executive or his heirs thirty (30) days following the date of the
Executive's death, except that bonuses earned but not paid prior to the
Executive's death will be paid.
6. COMPANY PROPERTY. All correspondence, records, documents, software,
promotional materials, and other Company property, including all copies, which
come into the Executive's possession by, through or in the course of his
employment, regardless of the source and whether created by the Executive, are
the sole and exclusive property of the Company, and immediately upon the
termination of the Executive's employment, the Executive shall return to the
Company all such property of the Company.
7. NON-COMPETITION.
(a) The Executive agrees that while he is in the employ of the Company and
for a one year period after the termination of his employment, he shall
not, either on his own behalf or on behalf of any third party, except on
behalf of the Company, directly or indirectly:
(1) Other than through his ownership of stock of the Company, as an
individual proprietor, partner, stockholder, officer, employee, director,
joint venturer, investor, lender, or in any other capacity whatsoever
(other than as the holder of not more than one percent (1%) of the total
outstanding stock of a publicly held company), engage directly in any
substantial business in markets where NAS has a physical office that
competes against NAS for its existing customer base at the time of
departure; or
(2) Attempt in any manner to solicit from a current client or customer
of the Company at the time of his termination, business of the type
performed by the Company or to persuade any client of the Company to cease
to do business or to reduce the amount of business which any such client
has customarily done or actively contemplates doing with the Company; or
(3) Recruit, solicit or induce, or attempt to induce, any employee or
employees of the Company or its affiliates to terminate their employment
with, or otherwise cease their relationship with the Company or its
affiliates.
(b) The parties agree that the relevant public policy aspects of covenants
not to compete have been discussed, and that every effort has been made to
limit the restrictions placed upon the Executive to those that are
reasonable and necessary to protect the Company's legitimate interests.
(c) If any restriction set forth in Section 7 are found by any court of
competent jurisdiction to be unenforceable because it extends for too long
a period of time or over
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too great a range of activities or geographic area, it shall be interpreted
to extend over the maximum period of time, range of activities or
geographic areas as to which it may be enforceable.
(d) The restrictions contained in Section 7 are necessary for the
protection of the business and goodwill of the Company and/or its
affiliates and are considered by the Executive to be reasonable for such
purposes. The Executive agrees that any material breach of Section 7 will
cause the Company and/or its affiliates substantial and irrevocable damage
and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief. The Executive acknowledges
that he will receive compensation for the terms of Section 7 pursuant to
various stock option agreements which will be executed between the
Executive and the Company.
(e) The provisions of Section 7 shall survive termination of this
Agreement.
8. PROTECTION OF CONFIDENTIAL INFORMATION. The Executive agrees that all
information, whether or not in writing, relating to the business, technical or
financial affairs of the Company and that it is generally understood in the
industry as being confidential and/or proprietary information, is the exclusive
property of the Company. The Executive agrees to hold in a fiduciary capacity
for the sole benefit of the Company all secret, confidential or proprietary
information, knowledge, data, or trade secret ("Confidential Information")
relating to the Company or any of its affiliates or their respective clients,
which Confidential Information shall have been obtained during his employment
with the Company. The Executive agrees that he will not at any time, either
during the Term of this Agreement or after its termination, disclose to anyone
any Confidential Information, or utilize such Confidential Information for his
own benefit, or for the benefit of third parties without written approval by an
officer of the Company. Executive further agrees that all memoranda, notes,
records, data, schematics, sketches, computer programs, prototypes, or written,
photographic, magnetic or other documents or tangible objects compiled by him or
made available to him during the Term of his employment concerning the business
of the Company and/or its clients shall be the property of the Company and shall
be delivered to the Company on the termination of his employment, or at any
other time upon request of the Company.
9. INTELLECTUAL PROPERTY. During the Term of this Agreement, the
Executive will disclose to the Company all ideas, concepts, inventions, product
ideas, new products, discoveries, methods, software, business plans and business
opportunities developed by him during working time through the use of Company
resources, which relate directly or indirectly to the Company's business or the
business of any of its affiliates or their respective clients, including without
limitation, any process, product or product improvement, product ideas, new
products, discoveries, methods or software which may or may not be patentable or
copyrightable,
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any trade names, trademarks or slogans. The Executive agrees that such will be
the property of the Company and that he will at the Company's request and cost
do whatever is necessary to secure for the Company the rights thereto by patent,
copyright or otherwise.
10. PUBLICITY. Neither party shall issue without consent of the other
party any press release or make any public announcement with respect to this
Agreement or the employment relationship between them.
11. BINDING AGREEMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their heirs, personal representatives,
successors and assigns. In the event the Company is acquired, is a non
surviving party in a merger, or transfers substantially all of its assets, this
Agreement shall not be terminated and the transferee or surviving company shall
be bound by the provisions of this Agreement. The parties understand that the
obligations of the Executive are personal and may not be assigned by him.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the Executive and the Company with respect to employment of the Executive and
supersedes any and all prior understandings, written or oral. This Agreement
may not be amended, waived, discharged or terminated orally, but only by an
instrument in writing. By entering into this Agreement, the Executive certifies
and acknowledges that he has carefully read all of the provisions of this
Agreement and that he voluntarily and knowingly enters into said Agreement.
13. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed
severable from the remainder of this Agreement, and the remaining provisions
contained in this Agreement shall be construed to preserve to the maximum
permissible extent the intent and purposes of this Agreement. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
14. GOVERNING LAW AND SUBMISSION TO JURISDICTION. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
Commonwealth of Virginia, without giving effect to the principles of conflicts
of law thereof.
15. NOTICES. Any notice provided for in this Agreement shall be provided
in writing. Notices shall be effective from the date of service, if served
personally on the party to whom notice is to be given, or on the second day
after mailing, if mailed by first class mail, postage prepaid. Notices shall be
properly addressed to the parties at their respective addresses or to such other
address as either party may later specify by notice to the other.
16. ARBITRATION. The parties agree that any controversy, claim or dispute
arising out of or relating to this Agreement, or the breach thereof, or arising
out of or relating to the
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employment of the Executive, or the termination thereof, including any statutory
or common law claims under federal, state, or local law, but excluding actions
to enforce provisions of Sections 7 and 8 hereof, shall be resolved by
arbitration in Fairfax, Virginia in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association. The parties agree
that any award rendered by the arbitrator shall be final and binding, and that
judgment upon the award may be entered in any court having jurisdiction thereof.
17. INDEMNIFICATION. The Company shall indemnify and hold harmless the
Executive for any liability incurred by reason of any act or omission performed
by the Executive while acting in good faith on behalf of the Company and within
the scope of the authority of the Executive pursuant to this Agreement and under
the rules and policies of the Company, except that the Executive must have in
good faith believed that such action was in the best interest of the Company and
such course of action or inaction must not have constituted gross negligence,
fraud, willful misconduct, or breach of a fiduciary duty.
18. MISCELLANEOUS.
(a) No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver
or consent given by the Company on any one occasion shall be effective only
in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
(b) The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance
of any section of this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered under seal, by its authorized officers or
individually, on the 13-th day of August, 1998.
NETWORK ACCESS SOLUTIONS
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, Director (on behalf of the Board)
/s/ Xxxxxxxx Xxxx
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Xxxxxxxx Xxxx
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