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EXHIBIT 10.61
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Employment Agreement") is made by and
between E.SPIRE(R) Communications, Inc., a Delaware corporation, having its
principal place of business at 00000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
(which, together with any affiliates or subsidiaries are hereinafter
collectively referred to as "Company") and XXXXXXX XXXXXX, an individual
residing at 00000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, XX 00000 (hereinafter referred to
as "Employee").
WITNESSETH
WHEREAS, the Company desires to employ the services of Employee as its
Chief Financial Officer under the terms and conditions set forth herein; and
WHEREAS, Employee desires to provide services as Chief Financial Officer
for the Company under the terms and conditions set forth herein,
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants undertaken herein, and with the intent to be legally bound hereby, the
Company and Employee hereby agree as follows:
1 Employment. The Company hereby agrees to employ Employee and Employee
hereby agrees to said employment in accordance with the terms and
conditions hereinafter set forth.
2 Term. Employment hereunder shall be deemed to have commenced as of
January 2, 2001 (the "Effective Date") and continue through December 31,
2001, unless otherwise terminated pursuant to the terms hereof, or
otherwise extended or renewed by written agreement upon such terms and
conditions as are then mutually acceptable to the Employee and the
Company.
3 Location. The Company shall provide office space for Employee in
Herndon, Virginia or wherever the Company's headquarters may be located.
4 Duties. Employee shall serve as Chief Financial Officer of the Company
or any other position of comparable seniority as directed by the CEO.
Employee shall report to, and take direction from the Chief Executive
Officer ("CEO") or President of the Company and shall devote his full
business time to the affairs of the Company.
5 Compensation.
a) Salary. Employee shall be compensated by the payment of $180,000
per annum in accordance with the Company's standard payroll
practices for employee at his level (as such amount may be
increased from time to time, "Base Salary"). Employee
understands that all salary and bonus compensation paid to
Employee under this Employment Agreement shall be subject to the
usual and customary federal and state tax withholding and other
employment taxes as required by law. Except for the cash bonuses
payable in
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accordance with Paragraph 5(b) hereof, in the event Employee is
terminated for Cause as defined in Paragraph 11 hereof or voluntarily
terminates his employment with the Company, all compensation shall be
prorated if employment is terminated other than at the end of a calendar
month. Employee will receive a salary review on the anniversary of this
Agreement. Additional or increased compensation, while not formalized,
will be based on the Company's performance as well as his individual
contribution to that performance, and shall be determined at the sole
discretion of the CEO and the Company's Board of Directors (the
"Board").
b) Bonus. In March of 2001, Employee shall be eligible for a performance
bonus of 50% of employee's Base Salary less required deductions.
Eligibility for this bonus is outlined in the year 2000 Bonus Plan.
c) Stock Options.
i) In addition to the foregoing compensation, Employee is hereby
granted incentive stock options under the Company's Amended 1994
Stock Option Plan (the "Plan") to purchase up to 150,000 shares
of the common stock of the Company upon the following terms and
conditions (such options are referred to herein as the "Stock
Options"). Subject to the vesting requirement set forth herein,
the Stock Options shall be exercisable as to each tranche of
shares through the day immediately preceding the fifth (5th)
anniversary of the vesting date for such tranche. The exercise
price of the Stock Options will be the last reported sale price
of the common stock on the date of grant on January 2, 2001. The
Stock Options will vest on an "earn out" basis, that is 25% of
the Stock Options will vest on each anniversary of the Effective
Date of this Agreement. Once vested, the Stock Options shall be
exercisable for a period of twelve (12) months from the date
Employee's employment is terminated either voluntarily by the
Employee or without Cause by the Company. The Stock Options
shall not vest if, prior to the relevant vesting date, Employee
is terminated for Cause. If the Employee is terminated without
Cause, the Stock Options shall vest only as expressly provided
in Paragraph 11(b).
ii) With respect to amendments to the Plan, and with respect to
future stock option plans or programs to be participated in by
senior officers or key employees of the Company or its successor
companies, Employee shall participate in an equitable manner,
and at a level consistent with the participation of other
officers and key employees of the Company.
d) Restricted Stock. The Compensation Committee of the Board of Directors
shall grant to Employee 100,000 shares of common stock of the Company,
$.01 par value per share. The shares will not be registered under the
Securities Act of 1933, as amended, and thus will bear a restrictive
legend to that effect. The shares are also subject to the terms and
conditions of the 1998 Restricted Stock Plan (exhibit A hereto),
including the risk of forfeiture. In order to receive such shares,
Employee shall execute a Restricted Stock Agreement (exhibit B hereto)
and an associated Stock Power Agreement (exhibit C hereto).
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6 Fringe Benefit Plans. Employee shall be entitled to all benefits
accorded to Company officers in general. Employee shall also be entitled
to participate in fringe benefit plans, including, but not limited to,
the Company's medical and dental insurance, life insurance, disability
insurance, stock option plans, or other benefit plans which may be
adopted or amended by the Company from time to time during the term of
this Employment Agreement to the same extent and in the same manner as
other senior employees similarly situated.
7 Employee and Company Representations. Employee hereby represents and
warrants to the Company that: (a) the execution, delivery and
performance of this Employment Agreement by Employee does not and will
not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgement or decree to which
Employee is a party or is presently bound; and (b) Employee is not a
party to or bound by any employment agreement or non-competition
agreement with any other person or entity.
8 Business Expenses. The Company shall reimburse Employee for all
reasonable business and professional expenses incurred by Employee in
connection with his employment within thirty (30) days of the Company's
receipt of vouchers, receipts or other appropriate documentation which
conform to the requirements of the Company's expense reimbursement
procedures.
9 Vacation. Employee shall be entitled to an initial annual vacation of
three (3) weeks. Scheduling of each vacation shall be with the
reasonable consent of the CEO.
10 Professional Education. Employee's attendance at professional seminars,
and the payment and/or reimbursement of costs and expenses associated
therewith, shall be decided on an ad hoc basis by the Company and
Employee.
11 Severance.
a) The Company reserves the right to terminate Employee's
employment at any time, in its sole discretion, without Cause.
For purposes of this Employment Agreement, "Cause" shall mean
(i) the conviction for a felony or any crime involving moral
turpitude or the commission of any other act involving
dishonesty, conflict of interest, or fraud with respect to the
Company; (ii) substantial failure to perform duties as
reasonably directed by the Company, which failure is not cured
within five (5) days, or if not curable within five (5) days
action to cure such failure is not initiated within five (5)
days, of Company's written notice to Employee and thereafter
consistenlty and diligently pursued until cured; (iii) gross
negligence, intentional or willful misconduct; (iv) or, any
other material breach of this Employment Agreement by Employee
which is not cured within thirty (30) days' after written notice
thereof to Employee from the Company.
b) If Employee's employment is terminated without Cause
("Termination"), Employee shall receive his then current Base
Salary (payable in accordance with the Company's normal payroll
practices, and not in a lump sum payment) and health and medical
benefits coverage at the Company's expense for a period of one
year from the date of Termination, compensation for unused
vacation for the year in which Employee is
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terminated and he shall then vest in all Stock Options which
would vest during that fiscal year, plus an additional 10,000
unvested Stock Options. Any substantial reduction in Employee's
responsibilities, reduction in reporting structure, reduction in
Title, or reduction in Base Salary, will constitute a
constructive Termination and will entitle Employee to terminate
his employment and to deem such Termination a termination
without Cause and to receive all of the benefits for such
Termination except that the Base Salary shall be the Base Salary
before any such reduction.
c) Employee will not be required to mitigate the amount of any
payment or benefit provided in this Paragraph 11 by seeking
other employment or otherwise, nor will the amount of
compensation or benefit provided for in this Paragraph be
reduced by any compensation she may earn as a result of his
subsequent employment by another employer.
d) In the event of a Sale of the Company (as such term is defined
in Section 10.c. of the Company's 1994 Stock Option Plan, as
amended (the "Plan")) Employee shall be offered continued
employment in the same position or in another position of
comparable seniority and responsibility for a period of one (1)
year from the date of such Sale.
e) In the event Employee is subject to any excise charges pursuant
to Sections 4999 and 280g of the Internal Revenue Code, for any
compensation hereunder as a result of a Sale (as such term is
defined in Section 10.c. of the Plan) Company shall pay Employee
such excise amounts as well as any further federal, state, and
local income taxes payable by Employee with respect to such
excise amounts received by Employee from Company.
12 Loyalty. The performance of services hereunder shall be Employee's
exclusive employment relationship and Employee shall devote his full
business time and best efforts to the performance of services under this
Employment Agreement. During the term of this Employment Agreement,
Employee shall not at any time or place whatsoever, either directly or
indirectly, engage in business or render services to any extent
whatsoever to any third party, except under and pursuant to this
Employment Agreement, unless expressly agreed upon by the parties.
13 Confidential Information. Employee acknowledges that the proprietary
information, observations and data obtained by Employee while employed
by the Company concerning the business or affairs of the Company or any
affiliate or subsidiary thereof ("Confidential Information") is the
property of the Company. Therefore, Employee agrees not to disclose to
any unauthorized person or use for the Employee's account any
Confidential Information without the prior written consent of the
Company unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a
result of Employee's acts or omissions. Upon request, Employee shall
deliver to the Company at the termination of this Employment Agreement,
or at any other time the Company may request, all memoranda, notes,
plans, records, reports, and other documents (and copies thereof)
relating to the Confidential Information or the business of the Company.
This provision shall not apply to information (other than Confidential
Information even if obtained prior to this Agreement) deemed to be known
by Employee at the time of the
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execution of the Employment Agreement, including information gained by
virtue of his past experience and know-how, or to his general expertise.
14 Work Product. Employee agrees that all methods, analyses, reports, plans
and all similar or related information which: (a) relate to the Company
or any of its affiliates or subsidiaries and which (b) are conceived,
developed or made by Employee in the course of his employment by the
Company ("Work Product") belong to the Company. Employee will promptly
disclose such Work Product to the Company and perform all actions
reasonably requested by the Company to establish and confirm such
ownership by the Company.
15 Covenant Not to Compete. For one (1) year following the termination of
Employee's employment with the Company, Employee covenants and agrees
with the Company not to engage, either directly or indirectly, as an
equity owner or personally as an officer, director, employee, partner,
consultant or agent, in the rendering of any of the same services as are
provided by the Company at the time Employee's employment with the
Company is terminated, or which the Company has targeted to provide in
its written business plan which has been approved by the Board of
Directors as of the time of such termination, in any of the market areas
in which the Company has targeted to provide such services in its
business plan at the time of such termination, provided that Employee
may own up to 2% of the outstanding equity securities of any
publicly-traded company regardless of whether any such company is a
competitor of the Company, so long as Employee's relationship to any
such company is that of a strictly passive investor.
16 Covenant Not to Solicit. During the term of Employee's employment with
Employer, and for a period of 18 months thereafter, Employee shall not
either directly or indirectly:
i) employ, retain the services of, or seek to employ or to retain
the services of any person who is at that time or was within the
previous four months employed by, or providing services to
Employer, without the prior express written permission of
Employer, which Employer may in its absolute discretion
withhold;
ii) induce any Employee or other person providing services to
Employer to leave his employment or to cease providing services
to Employer; nor
iii) solicit customers serviced by the Employee or sought to be
serviced by the Employee, or whose identity the Employee learned
while employed by Employer, which solicitation is for or on
behalf of any entity engaged in or seeking to be engaged in
Employer's Business.
Employee attests that if his employment with Employer were to terminate,
he could earn a living while fully complying with all the terms of this
Agreement and that the restrictions contained in this Agreement are
reasonable and necessary to protect Employer's legitimate interests in
its Confidential Information and customer relationships.
17 Non-Assignability. Neither this Employment Agreement nor any right or
interest hereunder shall be assignable or subject to any encumbrance,
pledge, hypothecation, attachment, or
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anticipation of any kind by Employee, his spouse or his legal
representatives, without the company's written consent but shall inure
to the benefit of and be binding upon Employee's estate. If Employee
should die while any amounts would still be payable to Employee under
this Agreement, all such amounts will be paid in accordance with this
Agreement to Employee's estate.
18 Entire Agreement. This Employment Agreement shall be the entire
agreement and understanding of the parties relating to the subject
matter hereof, and any prior negotiations, promises, agreements,
representations, warranties, or understandings relating to the same
subject matter, and except as specifically provided herein, shall be
subject to subsequent modification only by another mutually signed
written instrument which by its terms evidences an intention to modify
or amend the provisions hereof.
19 Choice of Law. This Employment Agreement shall be construed in
accordance with the internal laws of the Commonwealth of Virginia. For
purposes of this Employment Agreement, the parties consent to
jurisdiction in the Commonwealth of Virginia
20 Cost of Enforcement. Each party shall bear its own costs and attorney's
fees in connection with any suit or proceeding against the other to
enforce any provision of this Employment Agreement or to recover damages
resulting from a breach hereof, however, the party which prevails in any
such suit or proceeding shall be entitled to receive from the
non-prevailing party the costs and reasonable attorneys' fees of the
prevailing party incurred in such suit or proceeding.
21 Severability. In the event that any provision hereof is determined to be
illegal or unenforceable, such determination shall not affect the
validity or enforceability of the remaining provisions hereof, all of
which shall remain in full force and effect.
22 Counterparts. This Employment Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This
Employment Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
23 Notices. Any notice, request, claim, demand, document and other
communication hereunder to either party shall be effective upon receipt
(or refusal of receipt) and shall be in writing and delivered personally
or sent by telex or telecopy (with such telex or telecopy confirmed
promptly in writing sent by first class mail) or other similar means of
communications, as follows:
i) If to the Company, addressed to e.spire(R) Communications
Services, Inc.,
00000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel;
ii) If to Employee, addressed to him at:
00000 Xxxx Xxxxxxx Xxxxx
0
0
Xxxxxxx, XX 00000
or, in each case, to such other address or telex or telecopy number as such
party may designate in writing to the other by written notice given in the
manner specified herein.
All such communications shall be deemed to have been given, delivered or
made when so delivered personally or sent by telex or telecopy (confirmation
received), or five business days after being so mailed.
INTENDING TO BE LEGALLY BOUND BY THIS EMPLOYMENT AGREEMENT, the parties
have signed below as of the date first written above.
EMPLOYEE: EMPLOYER:
/s/ XXXXXXX XXXXXX /s/ XXXXXX X. XXXXXXX
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Xxxxxxx Xxxxxx e.spire(R) Communications, Inc.
1/2/01 1-2-01
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Date Date
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