EXHIBIT 10.10
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is dated as of February 7, 2000,
between and among XXXXXX XXXX, a resident of the State of Tennessee
("Executive"), and GRACE DEVELOPMENT, INC., a Colorado corporation (the
"Company").
W I T N E S S E T H:
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WHEREAS, the Company is engaged in the business of providing internet
access, internet provider services, e-commerce application and hosting services,
telecommunications and wireless telecommunications services, and integrated
voice, video and data communications products and services (collectively, the
"Scope of Business"); and
WHEREAS, the Company and Executive each desire to enter into this
Agreement, pursuant to which Executive will be employed by the Company on the
terms and conditions hereinafter set forth, and to make certain other
agreements;
NOW, THEREFORE, in consideration of the premises and of the promises and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, do hereby agree as follows:
SECTION 1. Employment. Subject to the terms hereof, the Company hereby
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employs Executive, and Executive hereby accepts such employment. Executive
shall devote his Full Time and best efforts to rendering services on behalf of
the Company. As used herein, "Full Time" shall mean working during normal
business hours to accomplish his duties and responsibilities with appropriate
timeliness, and such term shall not preclude Executive's devoting incidental
time to the management of his non-Company related business and personal affairs,
during normal business hours nor shall it preclude his participating in other
affairs during non-business hours.
SECTION 2. Position, Authority and Duties.
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(a) Position. Executive shall serve as Vice President of Engineering
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and Infrastructure of the Company and, as such, Executive shall report directly
to the Company's Chief Technology Officer. Executive shall be responsible for
the development and implementation of operational and strategic initiatives
relating to the deployment of the companies published business plan and such
additional duties and responsibilities as the company may determine and direct.
(b) Location. Executive's office shall be located in the Kingsport,
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Tennessee area and may be required to relocate to Atlanta. Extensive travel
will be required for this position.
SECTION 3. Term. The term of this Agreement shall begin on the date
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hereof (the "Effective Date") and shall continue until the earlier of (a) the
date that is one (1) year following the Effective Date (the "Term"), or (b) the
occurrence of a Terminating Event.
As used herein, "Terminating Event" shall mean:
(i) the death or Total Disability of Executive ("Total Disability"
meaning the failure of Executive to perform his normal required services
hereunder at his office for a period of three (3) consecutive months, by
reason of Executive's mental or physical disability as so determined by a
licensed physician selected by the Company reasonably satisfactory to
Executive);
(ii) the mutual written agreement of the parties hereto to terminate
Executive's employment hereunder;
(iii) the Company's termination of Executive's employment hereunder,
upon thirty (30) days' prior written notice to Executive, for "Cause." For
the purposes of this Agreement, "Cause" for termination of Executive's
employment shall exist (a) if Executive is convicted of (from which no
appeal may be taken), or pleads guilty to, any act of fraud,
misappropriation or embezzlement, or any felony, (b) if, in the sole
determination of the Board of Directors of the Company, Executive has
engaged in conduct or activities materially damaging to the business of the
Company (it being understood, however, that neither conduct nor activities
pursuant to Executive's exercise of his good faith business judgment nor
unintentional physical damage to any property of the Company by Executive
shall be a ground for such a determination by the Board of Directors of the
Company) after written notice with specificity as to the conduct or
activities complained of and a reasonable opportunity is given to Executive
to cure the same, or (c) if Executive has failed without reasonable cause
to devote his Full Time and best efforts to the business of the Company
and, after notice from the Company of such failure, Executive at any time
thereafter again so fails; or
(iv) the Executive terminates this Agreement for "Good Reason." For
the purposes of this agreement "Good Reason" for the Executive's
termination of this Agreement shall exist if (a) the Company breaches a
material provision of this agreement and such breach is not remedied within
thirty (30) days following receipt by the Company of notice given by the
Executive of such breach, or (b) the Company materially alters the title,
duties or responsibilities of Executive without obtaining prior written
consent to such change.
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SECTION 4. Compensation and Benefits.
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4.1 Salary and Other Compensation.
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(a) Salary. Executive shall be paid a salary by the Company at
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the annual rate of Ninety Two Thousand Dollars ($92,000), which salary shall be
payable bi-weekly in accordance with the payroll payment practices from time to
time adopted by the Company ("Base Salary"). Thereafter, Executive's salary
shall be as determined by the Company.
(b) Bonuses. Executive shall be eligible to participate in the
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Company's incentive and bonus programs, including, without limitation, any stock
option programs, to the same extent as other senior executive officers of the
Company. The bonus program will provide a scaled structure to the executive,
ranging from 43% to 75% of annual salary based on the obtainment of company
objectives achieved ranging from 80% to 150% of planned annual objectives.
During the next planning quarter, objectives will be further outlined and agreed
upon and used for determination of bonus eligibility.
(c) Stock Options. In addition, as an inducement to Executive
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to enter into and remain in the employ of the Company during the Term, the
Company shall issue to Executive options to purchase Three Hundred Fifty
Thousand (350,000) shares of Common Stock at an exercise price of One Dollar
($1.00) per share. The options to be issued pursuant to this Section 4.1(c)
shall be issued pursuant to stock option plan to be approved by the Board of
Directors and are restricted in accordance with rule 144F, and shall vest at the
rate of 175,000 shares on March 1, 2001 and 175,000 shares shall vest on March
1, 2002. If no other stock option plan exists at the time any of the optioned
shares have vested, Executive shall be able to exercise such options at his
discretion with no restrictions or limitations.
4.2 Insurance.
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(a) Life and Other Insurance. The Company shall, at its
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expense, provide or arrange for and keep in effect, during the term of
Executive's employment hereunder, so long as he is insurable, such group term
life insurance, travel accident, accidental death and dismemberment insurance
and long-and short-term disability insurance, or their equivalents, as is
provided from time to time for other senior executive officers of the Company.
(b) Medical Insurance. During the term of Executive's
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employment hereunder, the Company shall, at its expense, provide or arrange for
and keep in effect, hospitalization, major medical and similar medical and
health insurance for Executive and his family, to the same extent as is provided
from time to time for other senior executive officers of the Company.
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4.3 Vacation. Executive shall be entitled to the same number of days
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of paid vacation during each year of his employment hereunder as is allowed to
other senior executive officers of the Company, but in no event less than two
(2) weeks of paid vacation per year.
4.4 Retirement Benefits. During the term of his employment
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hereunder, Executive shall have the same right as other senior executive
officers of the Company to participate in all profit sharing, pension and other
retirement plans as are now, or as may hereafter be, established by the Company.
4.5 Out-of-Pocket Expenses. The Company shall reimburse Executive
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for all reasonable out-of-pocket expenses incurred by Executive in connection
with the performance of his duties hereunder upon presentation of appropriate
vouchers therefor.
SECTION 5. Termination.
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(a) Notice of Termination. Any termination of Executive's employment
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by the Company or by Executive (other than termination for death pursuant to
subparagraph (i) of Section 3) shall be communicated by written Notice of
Termination to the other party hereto. 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.
(c) Date of Termination. "Date of Termination" shall mean (i) if
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Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated for Total Disability pursuant to
subparagraph (i) of Section 3 hereof, thirty (30) days after Notice of
Termination is given (provided that Executive shall not have returned to the
performance of his duties on a full-time basis during such thirty (30) day
period), (iii) if Executive's employment is terminated for Cause pursuant to
subparagraph (iii) of Section 3 hereof, the date specified in the Notice of
Termination, and (iv) if Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given; provided, however,
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that, in all instances, if within thirty (30) days after any Notice of
Termination is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a final judgment order or decree
of a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).
(d) Exclusive Provisions. Executive may not be terminated by the
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Company and Executive may not terminate his employment hereunder except as
provided in this Section 5.
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SECTION 6. Compensation Upon Termination or During Disability.
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(a) In the Event of Death. If Executive's employment shall be
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terminated by reason of his death, the Company shall pay to such person as his
shall designate in a notice filed with the Company, or, if no such person shall
be designated, to his estate as a lump sum death benefit, the amount of his
accrued but unpaid full Base Salary to the date of his death and any other
benefits payable hereunder, such as un-reimbursed relocation and out-of-pocket
expenses, such payments to be in addition to any payments Executive's spouse,
beneficiaries or estate may be entitled to receive pursuant to any pension or
executive benefit plan or life insurance policy presently maintained by the
Company, and such payments shall fully discharge the Company's obligations
hereunder. All stock options granted to the executive from and after the date
hereof shall become vested and immediately exercisable as of the date of
Executive's death in accordance with the plan or plans pursuant to which such
options are to be issued. If no stock option plan exists at the time of
Executive's death, Executive's beneficiaries or the estate shall be able to
exercise any such options within eighteen (18) months of the date of Executive's
death.
(b) In the Event of Physical or Mental Illness. During any period
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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 and bonus payments until Executive's employment is terminated for
Total Disability pursuant to subparagraph (i) of Section 3 hereof. After
termination, Executive shall be paid his Base Salary at the rate in effect at
the time Notice of Termination is given less, in each case, any disability
payments otherwise payable by or pursuant to plans provided by the Company and
actually paid to Executive in substantially equal monthly installments over the
remaining term hereof, and other benefits payable hereunder, such as un-
reimbursed relocation and out-of-pocket expenses, and the Company shall have no
further obligations to Executive under this Agreement. All stock options granted
to the executive from and after the date hereof shall become vested and
immediately exercisable as of the date of the Notice of Termination given in
respect of Total Disability in accordance with the plan or plans pursuant to
which such options are to be issued. If no stock option plan exists at the time
of termination, executive shall be able to exercise such options within six (6)
months of the date of the Notice of Termination.
(c) Cause. If Executive's employment shall be terminated for Cause,
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the Company shall pay Executive the amount of his accrued but unpaid Base Salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given and the Company shall have no further obligations to
Executive under this Agreement. If Executive's employment shall be terminated
for Cause within the first twelve (12) months of employment, the Executive shall
reimburse the Company in full for all relocation expenses paid or reimbursed by
the Company pursuant to Section 2(b) of this Agreement and the Swing Loan, if
then outstanding
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(d) Wrongful Termination. If in breach of this Agreement, the
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Company shall terminate Executive's employment other than in the manner allowed
pursuant to Section 3 hereof (a purported termination pursuant to Section 3
hereof which is disputed and finally determined not to have been proper shall be
a termination by the Company in breach of this Agreement), or if Executive
terminates this Agreement for Good Reason, then:
(i) the Company shall pay Executive his full Base Salary and any
other benefits payable hereunder, such as un-reimbursed relocation or out-of-
pocket expenses, through the Date of Termination at the rate in effect at the
time Notice of Termination is given;
(ii) the company shall continue to reimburse Executive for
relocation expenses in accordance with Section 2(b) hereof;
(iii) in lieu of any further salary payments to Executive for periods
subsequent to the Date of Termination, the Company shall pay as severance pay to
Executive an amount equal to twenty-five percent (25%) of the sum of (i) the
annual Base Salary at the highest rate in effect during the twelve (12) months
immediately preceding the Date of Termination and (ii) the highest annual bonus
payments paid or accrued pursuant to this Agreement, with such amount being paid
to Executive in substantially equal monthly installments for a three (3) month
period following the Date of Termination; and
(iv) all stock options granted to the Executive hereunder and from
and after the date hereof shall become vested and immediately exercisable in
accordance with the plans or plans pursuant to which such options are to be
issued. If no stock option plan exists at the time of such termination,
Executive shall be able to exercise such options at his discretion within six
(6) months of the date of termination of his employment.
(e) Voluntary Termination by Executive. If Executive terminates
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his employment with the Company voluntarily, then:
(i) the Company shall pay Executive his full Base Salary through the
Date of Termination at the rate in effect at the time Notice of Termination is
given;
(ii) all unvested options granted shall terminate and vested options
may be exercised in accordance with the terms of the plan or plans pursuant to
which such options are to be issued; and
(iii) if Executive voluntarily terminates his employment with the
Company prior to the first anniversary of the date hereof, the Executive shall
reimburse the Company in full for all relocation expenses paid or reimbursed by
the Company pursuant to Section 2(b) of this Agreement and the Swing Loan, if
then outstanding.
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(f) Mitigation. Executive shall not be required to mitigate the
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amount of any payment provided for in this Section 6 by seeking other employment
or otherwise, nor shall the amount of any payment provided for in this Section 6
be reduced by any compensation earned by Executive as the result of employment
by another employer after the Date of Termination.
SECTION 7. Successors; Binding Agreement.
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(a) Successor Companies. The Company shall require any successor
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(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance reasonably satisfactory to Executive, 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. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to compensation from the Company in the
same amount and on the same terms as he would be entitled to hereunder if he
terminated his employment for Good Reason as set forth in Section 3(iv), except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid, which executes and
delivers the Agreement provided for in this Section 7(a) or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Estate and Heirs. This Agreement and all rights of
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Executive hereunder shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die
while any amounts would still be payable to his 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 Executive's devisee, legatee, or
other designee or, if there be no such designee, to Executive's estate.
SECTION 8. Restrictive Covenants.
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(a) The Executive acknowledges that (i) the covenants herein are
necessary to protect the goodwill and other value of the Company; (ii) at the
Effective Date the Company will have bargained and paid adequate and sufficient
consideration for the restrictive covenants herein; and (iii) the Company is
employing the Executive in reliance on the covenants of this Section 8 in view
of the unique and essential nature of the services the Executive is to perform
hereunder and the irreparable injury that would befall the Company should the
Executive breach such covenants.
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(b) The Executive further acknowledges that his services hereunder
are of a special, unique and extraordinary character and that his position with
the Company will place his in a position of confidence and trust with the
customers and executives of the Company and allow his access to Confidential
Information (as hereinafter defined).
(c) The Executive further acknowledges that the type and periods of
restrictions imposed by the covenants in this Section 8 are fair and reasonable
and that such restrictions will not prevent the Executive from earning a
livelihood.
(d) The Executive further acknowledges that, as of the Effective Date
(i) the Company is engaged in the Scope of Business; (ii) the Company conducts
its business activity in and throughout the Area (as hereinafter defined); and
(iii) Competing Businesses (as hereinafter defined) are engaged in businesses
like and similar to the business of the Company.
(e) Having acknowledged the foregoing, the Executive covenants and
agrees with the Company that he will not, directly or indirectly:
(i) while he is in the Company's employ and after the termination of
his employment for any reason whatsoever (whether voluntarily or
involuntarily), disclose, use or otherwise exploit, except as may be
necessary in the performance of his duties hereunder, any Confidential
Information disclosed to the Executive or of which the Executive
became aware by reason of his employment with the Company;
(ii) while he is in the Company's employ and through the period
ending one (1) year after the termination of his employment for any
reason whatsoever (whether voluntarily or involuntarily), employ or
attempt to employ or assist anyone else in employing in any Competing
Business in the Area any managerial or executive of the Company
(whether or not such employment is full time or is pursuant to a
written contract with the Company); and
(iii) while he is in the Company's employ and through the period
ending one (1) year after the termination of his employment (whether
voluntarily or involuntarily) for any reason whatsoever, except for
(a) termination by the Company without cause or (b) termination by the
Executive for "good reason" or (c) expiration of the Term, engage in
or render any services to or be employed by any Competing Business in
the Area in a capacity substantially similar to the capacity in which
Executive is employed by the Company hereunder, whether as a director,
officer, shareholder, owner, executive or as a consultant (other than
as the owner of less than five (5%) percent of the shares of a
publicly-owned corporation whose shares are
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traded on a national securities exchange or on the NASDAQ National
Market System).
(f) The Executive agrees that upon the termination of his employment
for any reason whatsoever (whether voluntarily or involuntarily), he will not
take with him or retain without written authorization, and he will promptly
deliver to the Company, originals and all copies of all papers, files or other
documents containing any Confidential Information and all other property
belonging to the Company and in his possession or under his control.
(g) For purposes of this Section 8, the term (a) "Area" means any
state within the United States of America within which the Company is operating;
(b) "Competing Business" means the Scope of Business or such other line of
business in which the Company is actively engaged at the Date of Termination;
and (c) "Confidential Information" means any and all data, knowledge and
information relating to the business of the Company (whether or not constituting
a trade secret) that is, has been or will be obtained by or disclosed to the
Executive or of which the Executive became or becomes aware as a consequence of
or through his relationship with the Company and that has value to the Company
and is not generally known by its competitors, provided, however, that no
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information will be deemed confidential unless it is known to the Executive to
be confidential information or has been reduced to writing and marked clearly
and conspicuously as confidential information. Confidential Information shall
not include any data or information that has been voluntarily disclosed to the
public by the Company (except where such public disclosure has been made without
authorization by the Company), or that has been independently developed and
disclosed by others, or that otherwise enters the public domain through lawful
means. Confidential Information includes, but is not limited to, information
relating to the Company's financial affairs, processes, services, customers,
Executive or executives, compensation, research, development, purchasing,
accounting or marketing.
(h) The Executive acknowledges that irreparable loss and injury would
result to the Company upon the breach of any of the covenants contained in this
Section 8 and that damages arising out of such breach would be difficult to
ascertain. The Executive hereby agrees that, in addition to all other remedies
provided at law or in equity, the Company may petition and obtain from a court
of law or equity both temporary and permanent injunctive relief to prevent a
breach by the Executive of any covenant contained in this Section 8. The parties
hereto agree that all references to the Company in this Section 8 shall include,
unless the context otherwise requires, all subsidiaries (if any) of the Company.
SECTION 9. Miscellaneous.
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9.1 Confidentiality.
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(a) Executive recognizes and acknowledges that in the course of his
employment with the Company, as contemplated by this Agreement, and as a result
of the position of trust that he will hold under this Agreement, he will obtain
private and confidential information and proprietary data relating to the
Company, including, without limitation, financial information, product and
design information, marketing information, customer lists and other data that
are valuable assets and property rights of the Company (collectively referred to
as "Confidential Information"). Executive agrees that he will not, during the
term of this Agreement or any time after the termination of this Agreement,
either directly or indirectly, disclose or use any Confidential Information
acquired during his employment with the Company, unless (i) the Confidential
Information has been made public through no action or fault of the Executive, or
(ii) its disclosure is requested or compelled by applicable law or regulatory
agency. Executive further agrees that after the termination of this Agreement,
or at such other time as the Company requests, Executive will return to the
Company all documents, papers and records constituting Confidential Information,
and all copies of same in Executive's possession and control.
(b) Executive acknowledges that irreparable loss and injury would
result to the Company upon the breach of any of the covenants contained in this
Section 9.1 and that damages arising out of such breach would be difficult to
ascertain. Executive agrees that, in addition to all other remedies provided at
law or at equity, the Company may petition and obtain from a court of law or
equity both temporary and permanent injunctive relief to prevent a breach by
Executive of any covenant contained in this Section 9.1.
9.2 Binding Effect. This Agreement shall inure to the benefit of and
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shall be binding upon Executive, his executor, administrator, heirs, personal
representatives and assigns, and upon the Company and its successors and
assigns; provided, however, that the obligations and duties of Executive may not
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be assigned or delegated.
9.3 Governing Law. This Agreement shall be deemed to be made in, and
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in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia, without giving effect to
principles of conflicts of laws.
9.4 Invalid Provisions. The parties herein hereby agree that the
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agreements, provisions and covenants contained in this Agreement are severable
and divisible, that none of such agreements, provisions or covenants depends
upon any other provision, agreement or covenant for its enforceability, and that
each such agreement, provision and covenants constitutes an enforceable
obligation between the Company and Executive. Consequently, the parties hereto
agree that neither the invalidity nor the unenforceability of any agreement,
provision or covenant of this Agreement shall affect the other agreements,
provisions or covenants hereof, and this Agreement shall remain in full force
and effect and be construed in all respects as if such invalid or unenforceable
agreement, provision or covenant were omitted.
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9.5 Headings. The section and paragraph headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.6 Notices. All communications provided for hereunder shall be in
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writing and shall be deemed to be given when delivered in person or deposited in
the United States mail, first class, registered mail, return receipt requested,
with proper postage prepaid, and
(a) If to Executive, addressed to:
Xxxxxx Xxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(b) If to the Company, addressed to:
Grace Development, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
or at such other place or places or to such other person or persons as shall be
designated in writing by the parties hereto in the manner provided above for
notices.
9.7 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
9.8 Waiver of Breach. The waiver by the Company of a breach of any
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provision, agreement or covenant of this Agreement by Executive shall not
operate or be construed as a waiver of any prior or subsequent breach of the
same or any other provision, agreement or covenant by Executive.
9.9 Entire Agreement. This Agreement is intended by the parties
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hereto to be the final expression of their agreement with respect to the subject
matter hereof and is the complete and exclusive statement thereof
notwithstanding any representation or statements to the contrary heretofore
made. This Agreement may be modified only by a written instrument signed by each
of the parties hereto.
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IN WITNESS WHEREOF, Executive has executed this Agreement, and the Company
has caused this Agreement to be duly executed by its duly authorized officers
and has caused its proper corporate seal to be affixed hereto, and the parties
have caused this Agreement to be delivered, all on the day and year first
written above.
/s/ Xxxxxx Xxxx
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XXXXXX XXXX
GRACE DEVELOPMENT, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Its: President
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