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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this_____day of _____________, 1999 by and between Allied Riser Operations
Corporation, a Delaware corporation with its principal place of business at
_______________, Texas (the "Employer") and ___________________, an individual
residing at ____________________________________________("Executive").
RECITALS
WHEREAS, Employer desires to employ Executive, on an "at will" basis,
upon the terms and conditions stated herein; and
WHEREAS, in consideration for Executive's employment hereunder, Allied
Riser Communications Corporation, a Delaware corporation ("ARCC", f/k/a Allied
Riser Communications Holdings, Inc.), the parent of Employer sold to Executive
certain Restricted Shares (as hereinafter defined); and has granted, or may
grant, to Executive certain Stock Options (as hereinafter defined); and
WHEREAS, in further consideration for Executive's employment hereunder,
Executive has been granted certain pre-emptive rights pursuant to a subscription
agreement with ARCC ("Subscription Agreement") and certain "tag along" rights to
sell shares of common stock of ARCC pursuant to a stockholders" agreement
"Stockholders' Agreement") by and among the holders of capital stock in ARCC;
and
WHEREAS, in connection with the Executive's employment and in
accordance with the terms and conditions set forth herein, Employer and ARCC
have agreed to provide Executive with certain vesting and other benefits
relating to the Restricted Shares and/or Options held by Executive on the date
of certain events (as hereinafter defined); and
WHEREAS, Executive desires to be so employed by Employer upon such
terms and conditions; and
WHEREAS, Executive acknowledges and understands that during the course
of his employment, Executive will become familiar with and/or create or develop
certain confidential information of Employer which is exceptionally valuable to
Employer which is exceptionally valuable to Employer and vital to the success of
the Employer's business; and
WHEREAS, Executive acknowledges that Employer would terminate or
prohibit access to its Customers, employees and Confidential Information (as
each term is hereinafter defined) in the absence of the restrictions and
protections contained in the Subscription Agreement, which provisions are
incorporated by reference into this Agreement; and
WHEREAS, Employer and Executive desire to protect such business and
Confidential Information from disclosure to third parties or its use to the
detriment of Employer; and
WHEREAS, Executive acknowledges that the likelihood of disclosure of
such Confidential Information would be substantially reduced, and that
legitimate business interests of Employer would be protected, if Executive
refrains from competing with Employer and from soliciting its Customers and
employees during the period described in the provisions incorporated by
reference herein from the Subscription Agreement and/or Option Agreement(s), and
Executive acknowledges the reasonableness and necessity of such restrictions and
is willing to covenant that he will refrain from such actions;
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NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto acknowledge
and agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ Executive on an "at
will" basis, and Executive hereby accepts employment, upon the terms
and conditions set forth herein. During the period of Executive's
employment by Employer, Executive shall diligently and faithfully
perform the duties assigned to him from time to time by the Board of
Directors of Employer. Executive agrees to devote his full business
time, attention and energies to the diligent and satisfactory
performance of his duties hereunder. Executive will not, during the
term of his employment or during any period during which Executive is
receiving payments pursuant to Section 6(d), engage in any activity
which is intended to, or which Executive should have known was
reasonably likely to, have an adverse affect on Employer's reputation,
goodwill or business relationships or which is intended to, or which
Executive should have known was reasonably likely to, result in
economic harm to the Employer, or which, in the opinion of the Board of
Directors, would conflict with or detract from Executive's capable
performance of his duties hereunder
2. COMPENSATION. During the period of Executive's employment by
Employer, Executive shall be entitled to receive the salary and bonus,
if any, determined from time to time by the Board of Directors of
Employer.
3. RESTRICTED STOCK OWNERSHIP, STOCK OPTIONS AND VESTING.
(a) Purchase of Restricted Shares. In connection with the
execution of this Agreement, ARCC offered to sell, and Executive
purchased the number of shares set forth opposite Executive's
name on Schedule A hereto, newly-issued shares of common stock,
par value $S0.0001 per share ("Common Stock") of ARCC, at a price
of $0.0001 per share, rounded up to the nearest $0.01
("Restricted Share Purchase Price"), which shares are restricted,
non-transferable and subject to repurchase by Employer (the
"Restricted Shares") until vested in accordance with Section
3(c). Executive is not and shall not be entitled to vote with
respect to any of such unvested Restricted Shares.
(b) Stock Options. In connection with Executive's employment,
ARCC has granted, or may grant, to Executive options to purchase
shares of Common Stock of ARCC ("Stock Options") pursuant to the
ARCC Stock Option and Equity Incentive Plan (the "Plan") and
associated Stock Option agreement documents (the "Option
agreement(s)") which Stock Options shall be subject to the terms
of the Plan and such restrictions, including vesting schedule, as
shall be set forth in the Option Agreement(s).
(c) Vesting. To the extent that Executive is employed by
Employer, the Restricted Shares shall vest in Executive and the
restrictions set forth in Section 3 (a) hereof and repurchase
rights with resect to such Restricted Shares shall terminate at a
rate of 2.083% of the restricted Shares per month for a period of
48 consecutive months, such that Executive shall be 100% vested
in the Restricted Shares at the end of such 48 month period;
Stock Options shall vest in accordance with the schedule set
forth in the applicable Option Agreement(s); provided, however,
that in the event that Executive's employment is terminated by
the Company within 24 months following the date of this Agreement
pursuant to Section 6(d), then Executive shall automatically, and
without action on the part of Executive or Employer, vest in 50%
of the Restricted shares and the Stock Options.
(d) Repurchase of Restricted Shares and Forfeiture of Options.
In the event that Executive voluntarily terminates employment, or
is terminated by Employer pursuant to Sections 6(a), 6(b), or
6(c) or is terminated by Employer pursuant to Section 6(d) at any
time after 24 months following the date Executive commenced
employment with Employer, then Executive shall be entitled to
retain all Restricted Shares and Stock Options in which Executive
has vested. In the event that Executive's employment is
terminated within 24 months following the date of this Agreement
pursuant to Section 6(d), then as provided in Section 3(c)
hereof, Executive shall
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immediately vest and be entitled to retain 50% of the Restricted
Shares and Stock Options. In either case, pursuant to this
Agreement and without further action by Executive, ARCC shall
have the right to repurchase all unvested Restricted Shares upon
payment to executive of an amount equal to the product of the
Restricted Share Purchase Price multiplied by the number of
unvested Restricted Shares and all unvested Stock Options shall
be forfeited by Executive.
(e) Acceleration of Restricted Share and Stock Option Vesting.
In the event of a Business Combination (as hereinafter defined)
of Employer or ARCC prior to the termination or expiration of
this Agreement, then notwithstanding the Restricted Share vesting
schedule set forth in Section 3(c) hereof and the Stock Option
vesting schedule set forth in the Option Agreement(s), all of the
unvested Restricted Shares and Stock Options shall immediately
vest and ARCC'S right of repurchase shall terminate. For purposes
of this Agreement, a "Business Combination" shall mean a sale to
an unaffiliated third party of at least a majority of the
outstanding shares of Common Stock, a sale or transfer to an
unaffiliated third party of the power to elect a majority of the
members of the Board of Directors of Employer or ARCC, a sale to
an unaffiliated third party of substantially all of the assets of
Employer or ARCC, a merger or other consolidation transaction
with an unaffiliated third party following which the ability to
elect a majority of the members of the Board of Directors of
Employer or ARCC or a majority of the voting power of the
surviving corporation is not held by any party other than a
holder of record prior to a public offering of the Company's
common stock.
(f) Subscription and Stockholder's Agreement. As a condition to
the sale and issuance of the Restricted Shares, Executive shall
be required to execute a Subscription Agreement and Stockholders'
Agreement in substantially the forms attached hereto as Exhibits
A and B, which Subscription Agreement contains certain
pre-emptive rights for the benefit of Executive and certain
restrictive covenants for the benefit of Employer and which
Stockholder's Agreement contains certain restrictions on the
ability of Executive to transfer or dispose of the Restricted
shares and certain rights of Executive to sell all or a portion
of the Restricted Shares in the event of certain sales of capital
stock. The parties further agree that the vesting, repurchase and
acceleration of vesting provisions contained in Section 3(c)(d)
and(e) shall equally apply to any shares of Common Stock of ARCC
acquired by Executive pursuant to the exercise of pre-emptive or
other similar anti-dilution rights under Section 5 of the
Subscription Agreement, such that Executive shall vest, on an
identical pro rata basis, in the Restricted shares and any shares
of Common stock acquired pursuant to the exercise of pre-emptive
rights in order to preserve the intents the purposes of the
parties in granting such pre-emptive or other anti-dilution
rights prior to the complete vesting of the Restricted Shares.
4. CONFIDENTIAL INFORMATION; NON-COMPETITION AND NON-SOLICITATION
COVENANTS. Executive hereby acknowledges and agrees that the
restrictions set forth in Section 6- Covenants in Respect of Employment
and Exhibit B to the Subscription Agreement, which provisions are
incorporated by reference herein and made a part here of, are
reasonable and necessary to protect the rights of Employer, which
rights, the parties agree, are exceptionally valuable to Employer and
vital to the success of the Employer's business.
5. CONTINUING OBLIGATIONS. The obligations, duties and liabilities
of Executive pursuant to Section 6 - Covenants in Respect of Employment
and Exhibit B to the Subscription Agreement are continuing, absolute
and unconditional and shall remain in full force and effect as provided
herein. If (i) Executive's employment hereunder is terminated pursuant
to the provisions of Section 6(d), and (ii) Executive is receiving
severance benefits pursuant to the provisions of Section 6(d), and
(iii) Executive violates the provisions of Section 6 - Covenants in
Respect of Employment and Exhibit B to the Subscription Agreement, then
Executive agrees that he shall forfeit all rights to any unpaid portion
of the severance benefits provided pursuant to Section 6(d). Employer
may also exercise any additional remedies available to it under this
Agreement, whether at law or in equity, upon any such violation.
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6. TERMINATION
(a) Termination by Employer of Executive for Cause. Employer
shall have the right to terminate Executive's employment at any
time for "cause." For purposes hereof, "cause" shall mean that
Executive has:
(i) committed a breach of any material covenant, provision,
term, condition, understanding or undertaking set forth in
Section 1 of this Agreement or in Section 6 - Covenants in
respect of Employment or Exhibit B to the Subscription
Agreement; or
(ii) been convicted of, or plead nolo contendere to, a felony or
crime involving moral turpitude; or
(iii) committed an act of personal dishonesty or fraud in
connection with Executive's employment by the Employer; or
(iv) committed an act involving willful misconduct or negligence
on the part of Executive in connection with his employment
by the Employer.
If Employer shall terminate Executive's employment pursuant to this Section 6(a)
employer shall be obligated to pay to Executive the salary then in effect
accrued up to and including the date on which Executive's employment is so
terminated. Thereafter, Employer shall have no further obligation whatsoever to
Executive.
(b) Termination by Employer of Executive Because of Executive's
Disability, Injury, or Illness. Employer shall have the right to
terminate Executive's employment if Executive unable to perform
the duties assigned to hem by the Employer because of Executive's
disability, injury or illness; provided, however, that in the
event of such disability, injury, or illness, Executive's
inability to perform such duties must have existed for a total of
six (6) months in any consecutive twelve (12) month period before
such termination can be made effective. If Employer shall
terminate Executive's employment pursuant to this Section 6(b)
then Employer shall be obligated (i) to pay to Executive the
salary then in effect payable to Executive pursuant to this
Agreement, for a period of six (6) months following such
termination of employment.
(c) Termination by Employer as a Result of Executive's Death.
The obligations of Employer to Executive under this Agreement
(except as provided in this Section 6(c)) shall automatically
terminate upon Executive's death and Employer shall then only be
obligated to pay to Executive's estate the salary then in effect
through the date of Executive's death. Thereafter, the Employer
shall have no further obligation whatsoever to Executive's
estate.
(d) Termination of Executive for Any Other Reason. Employer
shall have the right to terminate Executive's employment for any
other reason upon thirty (30) days prior written notice to
Executive. If Executive's employment is terminated by the
Employer for any reason other than the reasons set forth in
Sections 6(a), 6(b) or 6(c) above, Employer shall be obligated to
continue to pay to executive the salary then in effect for a
period of six (6) months following such termination of
employment.
(e) Termination by Executive. Executive may resign and terminate
his employment with employer for any reason whatsoever upon
thirty (30) days prior written notice to the Employer. If
Executive's employment is so terminated, Employer shall be
obligated to continue to pay to Executive his then current salary
payable to Executive, accrued up to and including the date on
which Executive's employment is so terminated. Thereafter,
Employer shall have no further obligation to Executive whatsoever
pursuant to this Agreement.
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7. MISCELLANEOUS
(a) Assignment. Executive and Employer acknowledge and agree
that the covenants, terms and provisions contained in this
Agreement constitute a personal employment contract and the
rights of the parties hereunder cannot be transferred, sold,
assigned, pledged or hypothecated, except that the rights and
obligations of Employer under this Agreement may be assigned or
transferred by Employer (i) to any affiliate of Employer, or (ii)
pursuant to a sale of the business, merger, consolidation, share
exchange, sale of substantially all of the assets or on-going
business of the Employer, or other reorganization described in
Section 368 of the Internal Revenue Code, or through liquidation,
dissolution or otherwise, whether or not Employer is continuing
entity, provided that the assignee, or transferee is the
successor to all or substantially all of the assets or on-going
business of Employer and such assignee or transferee assumes the
rights and duties of the Employer, if any, as contained in this
Agreement, either contractually or as a matter of law.
(b) Entire Agreement. This Agreement, together with the
Subscription Agreement and Stockholders' Agreement contains the
entire agreement between the parties with respect to the subject
matter hereof and may not be modified except in writing by he
parties hereto; provided, however, that in the event of any
conflict between the terms of this Agreement and the Subscription
Agreement, the terms of this Agreement shall supersede and govern
in all respects. Furthermore, the parties hereto specifically
agree that all prior agreements, whether written or oral relating
to Executive's employment by Employer shall be of no further
force or effect form and after the date hereof.
(c) Severability. If any restriction or limitation in this
Agreement is deemed to be unenforceable, onerous, unduly
restrictive or unreasonable as to scope, activity, territory or
duration, by a court of competent jurisdiction, it shall not be
stricken in its entirety and held totally void and unenforceable,
but shall be deemed rewritten to the minimum extent possible in
order to limit any restriction or limitation or other term to the
minimum extent necessary in order to effectuate the intent of the
parties and shall remain enforceable to the maximum extent
permissible within reasonable bounds in order to effect such
lesser restriction as such court shall deem reasonable. If any
phrase, clause or provision of this Agreement is declared invalid
or unenforceable by a court of competent jurisdiction, and such
phrase, clause or revision is not capable of being rewritten
pursuant to the foregoing sentence, then such phrase, clause or
provision shall be deemed severed from this Agreement, but will
not affect any other provisions of this Agreement, which shall
otherwise remain in full force and effect.
(d) Notices. Any notice, request or other communication required
to be given pursuant to the provisions hereof shall be in writing
and shall be deemed to have been given when delivered in person,
or on the next succeeding business day after being delivered to a
recognized overnight courier service, or five (5) days after
being deposited in the United States mail, certified or
registered, postage prepaid, return receipt requested and
addressed to the party at its or his last known addresses. The
address of any party may be changed by notice in writing to the
other parties duly served in accordance herewith.
(e) Waiver. The waiver by Employer or Executive of any breach of
any term or condition of this Agreement shall not be deemed to
constitute the waiver of any other breach of the same or any
other term or condition hereof.
(f) Governing Law. This Agreement and the enforcement thereof
shall be governed and controlled in all respects by the laws of
the State of Delaware and any litigation concerning this
Agreement shall be before a court of competent jurisdiction
sitting in the State of Delaware.
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(g) WAIVER OF JURY TRIAL. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to the Agreement or
the transactions contemplated hereby.
(h) Consent to Jurisdiction and Service of Process. The parties
hereto each hereby consent tot he jurisdiction of any state of
Federal court located within the State of Delaware and
irrevocably agree that all actions or proceedings arising out or
relating to this Agreement connection with its respective
properties, generally and unconditionally, the exclusive
jurisdiction and venue of the aforesaid courts and waives any
defense of forum non conveniens, and irrevocably agrees to be
bound by any non-appealable judgment rendered thereby in
connection with this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
EMPLOYER:
ALLIED RISER OPERATIONS CORPORATION
By:
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Title:
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HOLDINGS:
ALLIED RISER COMMUNICATIONS CORPORATION
By:
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Title:
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EXECUTIVE:
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SCHEDULE A
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