EXHIBIT 10.8
EXECUTION COPY
EXECUTIVE AGREEMENT
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THIS EXECUTIVE AGREEMENT (this "Agreement") dated as of
September 16, 1998, and effective as of the date of the closing of the
transactions contemplated by the Merger Agreement (as defined below) (the
"Effective Date"), by and among Pac-West Telecomm, Inc., a California
corporation (the "Company") and Xxxxxxx X. Xxxxxxx ("Executive"). Certain
definitions are set forth in Section 17 of this Agreement.
WHEREAS, pursuant to the terms of an Agreement and Plan of
Merger, dated as of June 30, 1998, by and among the Company, PWT Acquisition
Corp. and the other parties signatory thereto (as amended and modified from time
to time, the "Merger Agreement"), PWT Acquisition Corp. will merger with and
into the Company;
WHEREAS, as of the Effective Date the Company desires to
secure Executive's services to the Company on the terms described herein and
Executive desires to provide such services to the Company on the terms described
herein;
WHEREAS, the Company and Executive desire to enter into an
agreement pursuant to which the Company shall sell to Executive the number of
shares set forth herein of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), upon the terms set forth herein; and
WHEREAS, certain provisions of this Agreement are intended for
the benefit of, and shall be enforceable by, the investors of the Company set
forth on the signature pages hereto (the "Investors").
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
A. Provisions Relating to Employment.
1. Employment. The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the Effective
Date and ending as provided in paragraph 4 below (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the
Chief Executive Officer and President of the Company and shall have the normal
duties, responsibilities and authority of a Chief Executive Officer and
President, subject to the overall direction and authority of the Company's board
of directors (the "Board").
(b) Executive shall report to the Board, and Executive shall
devote his best efforts and his full business time and attention to the business
and affairs of the Company and its Subsidiaries. Executive shall perform his
duties and responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.
3. Compensation and Benefits.
(a) Base Salary. During the Employment Period, Executive's
base salary shall be $350,000 per annum or such higher rate as the Board in its
sole discretion may designate from time to time (the "Base Salary"), which
salary shall be payable in regular installments in accordance with the Company's
general payroll practices and shall be subject to customary withholding and
other customary deductions.
(b) Bonuses. The Board shall award a bonus (the "Annual
Bonus") to Executive during the Employment Period in an amount to be determined
prior to each fiscal year by the Board and Executive. The Annual Bonus may be
structured, as agreed upon by Executive and the Board in good faith, to provide
for all or a portion of the Annual Bonus to be paid upon the achievement by the
Company of certain separate specific objectives with such objectives generally
designed to provide Executive with an Annual Bonus of 40% of the Base Salary in
a normal year. The Annual Bonus may exceed 40% of the Base Salary as determined
by the Board in its discretion. Such Annual Bonus shall be payable within 90
days following the end of each fiscal year during the Employment Period based
upon the Company having achieved such specific objectives for such fiscal year
determined by the Board and the Executive in good faith prior to such fiscal
year and based upon the Executive's performance during such fiscal year.
(c) Benefits.
(i) During the Employment Period, Executive shall be
entitled to participate in all of the Company's employee benefit plans
and programs for which senior executive employees of the Company are
generally eligible (subject to the Company's right to amend, modify or
terminate any such plan or program in accordance with its terms and
applicable law and subject in each case to any applicable waiting
periods or other restrictions contained in such benefit plans or
programs), which shall include, but shall not be limited to, health
insurance, dental insurance and participation in the Company's 401(k)
plan. The Company shall match any contributions made by Executive to
the Company's 401(k) plan to the extent consistent with the Company's
past practice and the terms of such plan and to
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the extent consistent with applicable law. The Company and Executive
shall work jointly in good faith to provide for life insurance for
Executive on mutually agreeable terms at the expense of the Company.
(ii) Due to the fact that Executive will be required
to be on call continuously for emergency response and to travel
extensively by vehicle on company business, during the Employment
Period the Company shall provide to Executive the use of a reasonably
priced car consistent with the Company's past practice for other senior
executives. Such company car shall be available for Executive's use in
a manner consistent with past practice for other senior executives.
Executive acknowledges and agrees that the Company may report all or a
portion of the cost of such car and its operation as additional
compensation to Executive if the Company reasonably believes the same
may be required by applicable law.
(iii) Executive shall be entitled to four (4) weeks
of paid vacation during each year of the Employment Period, in addition
to legal holidays. Vacation hereunder shall accrue from year to year
based upon the Company's then current policy for all employees as
established from time to time by the Board in its sole discretion.
(iv) The Company shall reimburse Executive for all
reasonable expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with the terms of this
Agreement and the Company's policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject
to the Company's general policies with respect to reporting and
reasonable documentation of such expenses. In addition, the Company
shall reimburse Executive for the reasonable cost (not to exceed a
maximum of $3,000 per year) of membership in a country club of
Executive's choice.
(v) The Company shall reimburse Executive for all
reasonable travel expenses between Denver, Colorado, and Stockton,
California, incurred by Executive or Executive's spouse during the
Employment Period and for the expenses associated with Executive's
relocation to Stockton, California; provided that in no event shall the
aggregate amount of such expenses reimbursed during the Term of this
Agreement exceed $48,000 less the amount previously paid to Executive
prior to the Effective Date with respect to such expenses whether paid
pursuant to Section 6 of the Consulting Agreement or otherwise. All
reimbursements by the Company are subject to the Company's reasonable
requirements with respect to reporting and documentation of expenses
incurred.
(d) Stock Options. The Company hereby agrees to grant to
Executive on or promptly after the Effective Date, stock options to purchase a
number of shares of the Company's Common Stock equal to 2% of the total number
of shares of common stock outstanding on the Effective Date. The grant of such
stock options shall be subject to prior mutual agreement of the parties as to
the terms of such stock options and the vesting schedule for such stock options
shall be
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consistent with the vesting schedule set forth in the May 29, 1998 memorandum to
Executive from Xxxxx Xxxxxxx and Xxxxxx Xxxx. The terms of such stock options
shall be contained in an option agreement issued pursuant to the Company's stock
option plan as in effect as of the time of such grant. Executive shall also be
eligible to further participate in the Company's employee stock option plans and
other employee equity incentive plans for which other senior executive employees
of the Company are eligible. The amount of any additional awards under such
plans to Executive shall be determined by the Board in its sole discretion.
(e) Key-Man Life Insurance. Executive agrees to cooperate at
the request of the Company in any efforts to obtain "key-man" life insurance on
Executive's life.
4. Term and Termination.
(a) The Employment Period pursuant to this Agreement shall be
for a term ending on the third anniversary of the Effective Date (the "Term");
provided that, notwithstanding anything in this Agreement to the contrary,
expressed or implied, or Section 2924 of the California Labor Code or any
similar provision of applicable law, the Employment Period pursuant to this
Agreement shall terminate prior to the expiration of the Term upon (i)
Executive's resignation for any reason (with such resignation being effective 30
days after notice thereof is delivered by Executive to the Company), (ii)
Executive's death or Disability or (iii) termination of Executive's employment
by the Company with or without Cause.
5. Severance.
(a) If the Employment Period is terminated by the Company
without Cause, Executive shall be entitled to receive an amount equal to his
Base Salary at the times set forth in this Agreement for the greater of (i) the
remainder of the Term and (ii) the six-month period after such termination (for
purposes of this Section 5(a), the "Severance Period"), so long as Executive has
not breached and does not breach the provisions of any of paragraphs 6, 7, 8, 9,
10, 12, 15 or 16 below during the time period set forth therein or breached the
provisions of any agreement referenced thereby.
(b) If the Employment Period is terminated as a result of
Executive's Disability, Executive and/or his estate or beneficiaries, as the
case may be, shall be entitled to receive benefits under the Company's employee
benefit programs as in effect on the date of such termination to the extent
permitted thereunder and under applicable law and, in addition, shall be
entitled to receive (i) an amount equal to Executive's Base Salary at the times
set forth in this Agreement for the one-year period after the termination of the
Employment Period and (ii) the amount of any Annual Bonus otherwise payable to
Executive pursuant to paragraph 3(b) above for the fiscal year in which
Executive's employment is terminated, except that the amount of any such Annual
Bonus otherwise payable pursuant to this paragraph 5(b) shall be pro rated on
the basis of the number of days during such fiscal year that Executive was
employed by the Company; provided that in the event the Company establishes and
maintains disability insurance providing to Executive and/or his estate or
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beneficiaries, as the case may be, a benefit at least equal to the amount to be
paid to Executive pursuant to clauses (i) and (ii) of this paragraph 5(b), the
Company shall be relieved of its obligation to make such payments pursuant to
this paragraph 5(b).
(c) If the Employment Period is terminated as a result of
Executive's death, Executive and/or his estate or beneficiaries, as the case may
be, shall be entitled to receive benefits under the Company's employee benefit
programs as in effect on the date of such termination to the extent permitted
thereunder and under applicable law and, in addition, shall be entitled to
receive the amount of any Annual Bonus otherwise payable to Executive pursuant
to paragraph 3(b) above for the fiscal year in which Executive's employment is
terminated, except that the amount of any such Annual Bonus otherwise payable
pursuant to this paragraph 5(c) shall be pro rated on the basis of the number of
days during such fiscal year that Executive was employed by the Company;
provided that in the event the Company establishes and maintains life insurance
providing to Executive and/or his estate or beneficiaries, as the case may be, a
benefit at least equal to the amount to be paid to Executive pursuant to this
paragraph 5(c), the Company shall be relieved of its obligation to make such
payments pursuant to this paragraph 5(c).
(d) If the Employment Period is terminated by the Company for
Cause or if Executive resigns for any reason, Executive shall be entitled to
receive only his Base Salary through the date of termination and the Company
shall have no further liability whatsoever to Executive.
(e) Except as otherwise expressly provided herein or as
expressly required by applicable law (including under Section 4980B of the
Internal Revenue Code of 1986, as amended), all of Executive's rights to fringe
benefits and bonuses hereunder shall cease upon termination of the Employment
Period.
6. Confidential Information; Nonsolicitation.
(a) Executive agrees to execute on the Effective Date and to
be bound as of the Effective Date by the terms of the Company's form of
confidentiality agreement attached hereto as Exhibit A. The terms of such
confidentiality agreement shall supersede and preempt all prior confidentiality
agreements in effect between Executive and the Company prior to the Effective
Time.
(b) Executive agrees that until the date which is two years
after the termination of the Employment Period, he shall not directly, or
indirectly through another Person, (i) induce or attempt to induce any employee
of the Company or any of its Subsidiaries to leave the employ of the Company or
such Subsidiary, or in any way interfere with the relationship between the
Company or any of its Subsidiaries and any employee thereof, (ii) hire any
person who was an employee of the Company or any of its Subsidiaries at any time
during the 180-day period immediately prior to the date on which such hiring
would take place (it being conclusively presumed by the Company and Executive so
as to avoid any disputes under this paragraph 6(b) that any such hiring within
such 180-day period is in violation of clause (i) above), or (iii) call on,
solicit or service any customer, supplier, licensee, licensor or other business
relation of the Company or any of its Subsidiaries in
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order to induce or attempt to induce such Person to cease doing business, or to
reduce the amount of business conducted, with the Company or such Subsidiary. In
addition, during the Employment Period and for the three-year period thereafter,
Executive shall not in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any of its
Subsidiaries (including making any negative statements or communications about
the Company or any of its Subsidiaries).
7. Company's Ownership of Intellectual Property.
(a) Executive acknowledges that all Work Product is the
exclusive property of the Company. Executive hereby assigns all right, title and
interest in and to such Work Product to the Company. Any copyrightable work
prepared in whole or in part by Executive will be deemed "a work made for hire"
under Section 201(b) of the 1976 Copyright Act, and the Company shall own all of
the rights comprised in the copyright therein.
(b) The Company and Executive each acknowledge the
applicability of Section 2870 of the California Labor Code. Accordingly, the
provisions of paragraph 7(a) shall not apply to, and the term "Work Product"
shall not include, any invention that Executive developed entirely on his own
time without using the Company's equipment, supplies, facilities, or trade
secret information except for those inventions that either: (i) relate at the
time of conception or reduction to practice of the invention to the Company's or
any Subsidiary's business, or to the actual or demonstrably anticipated research
or development of the Company or any Subsidiary; or (ii) result from any work
performed by Executive for the Company or any Subsidiary. Set forth on the
attached "Excluded Inventions Schedule" are the inventions Executive believes
meet the criteria for exclusion set forth above. Executive agrees to promptly
advise the Company in writing of any inventions developed after the Effective
Date which Executive believes meet the criteria for exclusion set forth above.
(c) Executive shall promptly and fully disclose all Work
Product to the Company and shall cooperate and perform all actions reasonably
requested by the Company (whether during or after the Employment Period) to
establish, confirm and protect the Company's right, title and interest in such
Work Product. Without limiting the generality of the foregoing, Executive agrees
to assist the Company, at the Company's expense, to secure the Company's rights
in the Work Product in any and all countries, including the execution of all
applications and all other instruments and documents which the Company shall
deem necessary in order to apply for and obtain rights in such Work Product and
in order to assign and convey to the Company the sole and exclusive right, title
and interest in and to such Work Product. If the Company is unable because of
Executive's mental or physical incapacity or for any other reason (including
Executive's refusal to do so after request therefor is made by the Company) to
secure Executive's signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Work
Product belonging to or assigned to the Company pursuant to paragraph 7(a)
above, then Executive hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents as Executive's agent and
attorney-in-fact to act for and in Executive's behalf and stead to execute and
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file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of patents or copyright registrations
thereon with the same legal force and effect as if executed by Executive. During
Executive's employment with the Company, Executive agrees not to apply for or
pursue any application for any United States or foreign patents or copyright
registrations covering any Work Product other than pursuant to this paragraph in
circumstances where such patents or copyright registrations are or have been or
are required to be assigned to the Company.
8. Delivery of Materials Upon Termination of Employment. As
requested by the Company upon the termination of Executive's employment with the
Company for any reason, Executive shall promptly deliver to the Company all
copies and embodiments, in whatever form, of all Confidential Information and
Work Product in Executive's possession or within his control irrespective of the
location or form of such material and, if requested by the Company, shall
provide the Company with written confirmation that all such materials have been
delivered to the Company.
9. Subsequent Inventions. Executive understands and agrees
that all Intellectual Property Rights made, conceived, developed, or reduced to
practice by Executive, either alone or jointly with others, shall be disclosed
to the Company by Executive for six (6) months following the termination of
Executive's employment with the Company. Employee further agrees that all
Intellectual Property Rights made, conceived, developed or reduced to practice
within six (6) months following such termination shall be presumed to have been
conceived during Executive's employment with the Company and with the use of the
Company's Confidential Information, but such presumption may be overcome by
Executive by a showing that such Intellectual Property Rights were conceived
after such employment and without the use of any such Confidential Information.
In the event Executive is not able to rebut such presumption and prove that such
Intellectual Property Rights were conceived after such employment and without
the use of Confidential Information, Executive agrees to assign all right, title
and interest in such Intellectual Property Rights to the Company.
10. Disclosure. Following the termination of the Executive's
employment with the Company, Executive shall communicate the restrictions
contained in this Agreement to any Person he intends to be employed by, provide
consulting services to or otherwise represent. Executive hereby consents to the
Company's communication of the restrictions contained in this Agreement to any
such Person.
11. Enforcement; Remedies.
(a) If, at the time of enforcement of the covenants contained
in paragraphs 6, 7, 8, 9 or 10 (the "Protective Covenants"), a court shall hold
that the duration or scope stated therein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum duration or scope
reasonable under such circumstances shall be substituted for the stated duration
or scope and that the court shall be allowed to revise the restrictions
contained therein to cover the maximum period or scope permitted by law;
provided that in no event shall the duration or scope
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determined by such court exceed the duration or scope set forth in this
Agreement. Executive has consulted legal counsel regarding the Protective
Covenants and based on such consultation has determined and hereby acknowledges
that the Protective Covenants are reasonable in terms of duration and scope and
are necessary to protect the goodwill of the Company's business and the
Confidential Information. Executive further agrees that the Protective Covenants
were a material inducement to certain investors of the Company to enter into the
Merger Agreement and consummate the transactions contemplated thereby, and such
investors would not obtain the benefit of the bargain as set forth in the Merger
Agreement and the other agreements contemplated thereby if Executive breached or
challenged the validity of any of the Protective Covenants.
(b) If Executive breaches, or threatens to commit a breach of,
any of the Protective Covenants, the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the others
and severally enforceable, and each of which is in addition to, and not in lieu
of, any other rights and remedies available to the Company at law or in equity:
(i) the right and remedy to have the Protective
Covenants specifically enforced by any court of competent jurisdiction
(without the need to post a bond or other security), it being agreed
that any breach or threatened breach of the Protective Covenants would
cause irreparable injury to the Company and that money damages would
not provide an adequate remedy to the Company; and
(ii) the right and remedy to require Executive to
account for and pay over to the Company any profits, monies, accruals,
increments or other benefits derived or received by Executive as the
result of any transaction(s) constituting a breach of the Protective
Covenants.
(c) In the event of any breach or violation by Executive of
any of the Protective Covenants, the time period of such covenant with respect
to Executive (to the extent such covenant is limited in duration) shall be
tolled until such breach or violation is resolved.
12. Loss of Severance due to Competition.
(a) The Executive shall not during the Employment Period and
during the period Executive is receiving any Severance Payment pursuant to
paragraph 5(a) (the "Noncompete Period"), for himself or on behalf of any other
person, firm, partnership, corporation, or other entity, engage, directly or
indirectly, either as an officer, director, employee, partner, consultant,
individual proprietor, agent, or otherwise (including, but not limited to, as an
owner or shareholder), in any business which (A) provides telecommunication
services of the type provided during the Employment Period by the Company and
any of its Subsidiaries (including, without limitation, (i) switched local
service, (ii) switched long-distance service, (iii) dedicated transport
services, (iv) co-locate and interconnect services and (v) data switched
services and including, without limitation, telecommunication services of the
type provided by the Company and any of its Subsidiaries to information service
providers) or (B) provides services of the type which the Company and any of its
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Subsidiaries have taken significant actions during the Employment Period to
begin providing or of the type the Company or any of its Subsidiaries have
indicated that they plan to begin providing in any business plan or similar
document delivered to Executive during the Employment Period, in each case
within any of the Restricted Territories (as defined below); provided that the
restrictions set forth in this paragraph 12 shall not prohibit Executive from
being a passive owner of not more than 5% of the outstanding stock of any class
of a corporation which is publicly traded; and provided further that the
restrictions set forth in this paragraph 12 shall not restrict the activities of
Executive to the extent Executive has received the consent of the Board to such
activities.
(b) For purposes of this Agreement, "Restricted Territories"
shall mean (i) the counties (or similar jurisdictions) in the United States of
America, Canada and Mexico and (ii) any other jurisdictions in which the Company
or its Subsidiaries are engaged in business during the Employment Period or have
taken significant actions to begin engaging in business during the Employment
Period. Executive acknowledges that the business of the Company is contemplated
to be conducted in the jurisdictions set forth in subparagraph 12(b)(i)
(including as the same relates to the production, promotion, marketing and sale
of its products and services), and that the geographic restrictions set forth
above are reasonable and necessary to protect the goodwill of the Company's
business.
(c) If Executive breaches any of the provisions of this
paragraph 12, Executive and the Company acknowledge and agree that the Company's
sole remedy for such breach shall be the termination of the Severance Payments
otherwise payable to Executive pursuant to paragraph 5(a) hereof.
B. Provisions Relating to Executive Stock.
13. Purchase and Sale of Executive Stock.
(a) On the Effective Date, the Company shall sell, and
Executive shall purchase, 37,500 shares of Common Stock of the Company for an
aggregate purchase price of $250,000; provided that the Company shall have no
such obligation to sell such Common Stock, and Executive shall have no such
right to purchase such Common Stock, in the event the transactions contemplated
by the Merger Agreement are not consummated. The Company shall deliver to
Executive a copy of, and a receipt for, the certificate representing such shares
of Common Stock, and Executive shall deliver to the Company a check or wire
transfer of funds in the aggregate amount of $50,000 (the "Cash Amount") and a
promissory note in the form of Exhibit B attached hereto in an aggregate
principal amount of $200,000 (the "Executive Note"). Executive's obligations
under the Executive Note shall be secured by a pledge of all of the shares of
Executive Stock to the Company, and in connection therewith, Executive shall
enter into a pledge agreement in the form of Exhibit C attached hereto (the
"Pledge Agreement").
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(b) The Company shall hold each certificate representing
Executive Stock until such time as the Executive Stock represented by such
certificate is released from the pledge to the Company.
14. Representations and Warranties.
(a) Executive represents and warrants to the Company that:
(i) The Executive Stock to be acquired by Executive
pursuant to this Agreement shall be acquired for Executive's own
account and not with a view to, or intention of, distribution thereof
in violation of the 1933 Act, or any applicable state securities laws,
and the Executive Stock shall not be disposed of in contravention of
the 1933 Act or any applicable state securities laws.
(ii) Executive is sophisticated in financial matters
and is able to evaluate the risks and benefits of the investment in the
Executive Stock.
(iii) Executive is able to bear the economic risk of
his investment in the Executive Stock for an indefinite period of time
because the Executive Stock has not been registered under the 1933 Act
and, therefore, cannot be sold unless subsequently registered under the
1933 Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask
questions and receive answers concerning the terms and conditions of
the offering of Executive Stock and has had full access to such other
information concerning the Company as he has reasonably requested.
Executive has reviewed, or has had an opportunity to review, a copy of
the Merger Agreement and Executive is familiar with the transactions
contemplated thereby. Executive has also reviewed, or has had an
opportunity to review the Company's articles of incorporation and
bylaws.
(v) This Agreement constitutes the legal, valid and
binding obligation of Executive, enforceable in accordance with its
terms, and the execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, violate or cause a breach
of any agreement, contract or instrument to which Executive is a party
or any judgment, order or decree to which Executive is subject.
(vi) Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity that conflicts with Executive's duties
to the Company.
(vii) Upon the execution and delivery of this
Agreement by Executive and the other parties hereto, this Agreement
shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms.
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(b) As an inducement to the Company to issue the Executive
Stock to Executive, and as a condition thereto, Executive acknowledges and
agrees that:
(i) Neither the issuance of the Executive Stock to
Executive nor any provision contained herein shall entitle Executive to
remain in the employment of the Company and its Subsidiaries or affect
the right of the Company or its Subsidiaries to terminate Executive's
employment at any time.
(ii) Executive has consulted with independent legal
counsel regarding his rights and obligations under this Agreement and
Executive fully understands the terms and conditions contained herein.
15. Repurchase Option.
(a) In the event of the termination of Executive's employment
with the Company for any reason (a "Termination"), the Executive Stock (whether
held by Executive or one or more of Executive's transferees, other than any
Investor or the Company) will be subject to repurchase by the Company and the
Investors pursuant to the terms and conditions set forth in this Section 15 (the
"Repurchase Option").
(b) In the event of a repurchase of the Executive Stock, the
purchase price for each share of Executive Stock will be the Fair Market Value
of such share; provided that in the event Executive's employment with the
Company is terminated with Cause, the purchase price for each share of Executive
Stock shall be the lesser of the Original Cost or the Fair Market Value of such
share.
(c) The Company may elect to purchase all or any portion of
the Executive Stock by delivering written notice (the "Repurchase Notice") to
the holder or holders of the Executive Stock. The Repurchase Notice will set
forth the number of shares of Executive Stock to be acquired from each holder,
the aggregate consideration to be paid for such shares and the time and place
for the closing of the transaction. The number of shares to be repurchased by
the Company shall first be satisfied to the extent possible from the Executive
Stock held by Executive at the time of delivery of the Repurchase Notice. If the
number of shares of Executive Stock then held by Executive is less than the
total number of shares of Executive Stock which the Company has elected to
purchase, the Company shall purchase the remaining shares elected to be
purchased from the other holder(s) of Executive Stock under this Agreement, pro
rata according to the number of shares of Executive Stock held by such other
holder(s) at the time of delivery of such Repurchase Notice (determined as
nearly as practicable to the nearest share).
(d) If for any reason the Company does not elect to purchase
all of the Executive Stock pursuant to the Repurchase Option, the Investors
shall be entitled to exercise the Repurchase Option for the Executive Stock that
the Company has not elected to purchase (the "Available Shares"). As soon as
practicable after the Company has determined that there will be Available
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Shares, the Company shall give written notice (the "Option Notice") to the
Investors setting forth the number of Available Shares and the purchase price
for the Available Shares. The Investors may elect to purchase any or all of the
Available Shares by giving written notice to the Company within one month after
the Option Notice has been given by the Company. If more than one Investor
elects to purchase any or all Available Shares and the number of Available
Shares is less than the aggregate number of shares elected to be purchased by
such electing Investors, each Investor shall be entitled to purchase the lesser
of (i) the number of Available Shares such Investor has elected to purchase as
indicated in the Election Notice or (ii) the number of Available Shares obtained
by multiplying the number of shares specified in the Option Notice by a
fraction, the numerator of which is the number of shares of Common Stock (on a
fully-diluted basis) held by such Investor and the denominator of which is the
aggregate number of shares of Common Stock (on a fully-diluted basis) held by
all electing Investors. In the event all Available Shares are not purchased by
the Investors pursuant to the immediately preceding sentence, the Available
Shares remaining to be purchased shall be allocated among the Investors who
elect to purchase more Available Shares (as indicated in their respective
Election Notices) than they are entitled to purchase pursuant to the immediately
preceding sentence as the Investors shall agree in writing. As soon as
practicable, and in any event within ten days, after the expiration of the
one-month period set forth above, the Company shall notify each holder of
Executive Stock as to the number of shares being purchased from such holder by
the Investors (the "Supplemental Repurchase Notice"). At the time the Company
delivers the Supplemental Repurchase Notice to the holder(s) of Executive Stock,
the Company shall also deliver written notice to the Investors setting forth the
number of shares such Investor is entitled to purchase, the aggregate purchase
price and the time and place of the closing of the transaction.
(e) The closing of the purchase of the Executive Stock
pursuant to the Repurchase Option shall take place on the date designated by the
Company in the Repurchase Notice or Supplemental Repurchase Notice, which date
shall not be more than one month nor less than five days after the delivery of
the later of either such notice to be delivered. The Company and/or the
Investors shall pay for the Executive Stock to be purchased pursuant to the
Repurchase Option by delivery of, in the case of any Investor, a check or wire
transfer of funds and, in the case of a purchase by the Company of Executive
Stock, at its option, (A) a check or wire transfer of funds, (B) a subordinate
note or notes payable in up to three equal annual installments (or as otherwise
agreed to by the Company and Executive) beginning on the first anniversary of
the closing of such purchase and bearing interest (payable quarterly) at a rate
per annum equal to the prime rate as published in The Wall Street Journal from
time to time or (C) both (A) and (B), in the aggregate amount of the purchase
price for such shares; provided that the Company shall use reasonable efforts to
make all such repurchases in full with a check or wire transfer of funds. Any
notes issued by the Company pursuant to this Section 15 shall be subject to any
restrictive covenants to which such issuer is subject at the time of such
purchase. In addition, the Company may pay the purchase price for such shares by
offsetting amounts outstanding under the Executive Note issued to the Company
hereunder and any other bona fide debts owed by Executive to the Company. The
Company and the Investors will be entitled to receive customary representations
and warranties from the sellers regarding such sale and to require all sellers'
signatures be guaranteed.
12
(f) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Executive Stock by the Company shall be subject to
applicable restrictions contained in the California General Corporation Law and
in the Company's and its Subsidiaries' debt and equity financing agreements. If
any such restrictions prohibit the repurchase of Executive Stock hereunder which
the Company is otherwise entitled or required to make, the Company may make such
repurchases as soon as it is permitted to do so under such restrictions.
(g) The right of the Company and the Investors to repurchase
the Executive Stock pursuant to this Section 15 shall terminate upon a Sale of
the Company, a Transfer pursuant to the participation rights set forth in
paragraph 2(d) of the Shareholders Agreement (as defined below) and, with
respect to any Option Shares, upon the consummation of a Public Offering.
16. Restrictions on Transfer.
(a) Until the third anniversary of the Effective Date,
Executive shall not Transfer any interest in any shares of Executive Stock,
except for (i) Transfers to members of Executive's Family Group, (ii) Transfers
upon a Sale of the Company, (iii) Transfers pursuant to the participation rights
set forth in paragraph 2(d) of the Shareholders Agreement (as defined below) and
(iv) Transfers of Option Shares after the consummation of a Public Offering;
provided that prior to any such Transfer to a member of Executive's Family
Group, such member shall agree in writing to be bound by the provisions of this
Agreement with respect to the Executive Stock.
(b) Executive acknowledges and agrees that shares of Executive
Stock are subject to the restrictions on transfer set forth in the Shareholders
Agreement of the Company, dated as of the Effective Date, by and among Executive
and each of the other persons named therein, as the same may be amended and
modified from time to time (the "Shareholders Agreement").
(c) In addition to any other legend required pursuant to the
Stockholders Agreement or otherwise, the certificates representing the Executive
Stock shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON SEPTEMBER 16, 1998, AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET
FORTH IN A MANAGEMENT AGREEMENT AMONG THE ISSUER AND THE ORIGINAL
HOLDER HEREOF DATED AS OF SEPTEMBER 16, 1998, AS AMENDED AND MODIFIED
FROM TIME TO TIME. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE
HOLDER HEREOF AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT
CHARGE."
C. General Provisions
17. Definitions.
13
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Cause" means (A) Executive's theft or embezzlement, or
attempted theft or embezzlement, of money or property of the Company or any of
its Affiliates, Executive's perpetration or attempted perpetration of fraud, or
Executive's participation in a fraud or attempted fraud, on the Company or any
of its Affiliates or Executive's unauthorized appropriation of, or Executive's
attempt to misappropriate, any tangible or intangible assets or property of the
Company or any of its Affiliates; (B) Executive's conviction or commission of a
felony or conviction for any crime involving acts which tend to insult or offend
community moral standards or public decency or that materially and adversely
affect the reputation or business activities of the Company or its Affiliates;
(C) Executive's substance abuse, including abuse of alcohol or use of illegal
narcotics, or other illegal drugs or substances, for which Executive fails to
undertake and maintain treatment within 15 days after requested by the
Corporation; (D) Executive's refusal to carry out the lawful instructions of the
Board following receipt of written notice of such instructions from the Board;
or (E) Executive's material breach of any provision of this Agreement which is
incapable of cure or which is not cured within 15 days after written notice
thereof to Executive.
"Confidential Information" means all information of a
confidential or proprietary nature (whether or not specifically labeled or
identified as "confidential"), in any form or medium, that is or was disclosed
to, or developed or learned by, Executive in connection with Executive's prior
relationship with the Company or during the Employment Period and that relates
to the business, products, services, research or development of the Company or
its suppliers, distributors or customers. Confidential Information includes but
is not limited to the following: (i) internal business information (including
information relating to strategic and staffing plans and practices, business,
training, marketing, promotional and sales plans and practices, cost, rate and
pricing structures and accounting and business methods); (ii) identities of,
individual requirements of, specific contractual arrangements with, and
information about, the Company's suppliers, distributors and customers and their
confidential information; (iii) trade secrets, know-how, compilations of data
and analyses, techniques, systems, formulae, research, records, reports,
manuals, documentation, models, data and data bases relating thereto; and (iv)
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable). Confidential Information shall not include information that
Executive can demonstrate: (a) is publicly known through no wrongful act or
breach of obligation of confidentiality; (b) was lawfully known to Executive
prior to the time Executive began rendering services to the Company and its
predecessors; or (c) was rightfully received by Executive from a third party
without a breach of any obligation of confidentiality by such third party.
"Consulting Agreement" means that certain consulting agreement
between the Company and Executive dated June 30, 1998.
14
"Disability" means the inability, due to illness, accident,
injury, physical or mental incapacity or other disability, of Executive to carry
out effectively his duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 180 consecutive days or for shorter periods aggregating at least 180 days
(whether or not consecutive) during any twelve-month period, as determined in
the reasonable good faith judgment of the Board.
"Executive Stock" means all shares of Common Stock purchased
pursuant hereto and all shares of Common Stock hereafter acquired by Executive
(including upon the exercise of any Stock Options or similar rights). Executive
Stock will continue to be Executive Stock in the hands of any holder other than
Executive (except for the Company and the Investors and except for transferees
in a Public Sale or pursuant to paragraph 2(d) of the Shareholders Agreement),
and except as otherwise provided herein, each such other holder of Executive
Stock will succeed to all rights and obligations attributable to Executive as a
holder of Executive Stock hereunder.
"Fair Market Value" of any share of Executive Stock means:
(i) the average of the closing prices of the sales of such
security on all securities exchanges of which such security may at the
time be listed, or, if there have been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all
such exchanges at the end of such day, or if on any day such security
is not listed, the average of the representative bid and asked prices
quoted in the Nasdaq Stock Market as of 4:00 P.M., New York time, or,
if on any day such security is not quoted in the Nasdaq Stock Market,
the average of the highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the
day as of which the Fair Market Value is being determined and the 20
consecutive business days prior to such day; or
(ii) if the Executive Stock is not listed on any securities
exchange or quoted in the Nasdaq Stock Market or the over-the-counter
market for the entire 21-day averaging period specified above, then the
fair value of such security determined jointly by the Company and
Executive in good faith. If such parties are unable to reach agreement
within a reasonable period of time, such fair value shall be determined
by an independent appraiser experienced in valuing securities jointly
selected by the Company and Executive. If the parties are unable to
agree on an independent appraiser, a firm shall be selected by lot from
six nationally recognized investment banking firms, three of such firms
to be selected by Executive and three of such firms to be selected by
the Company. The expenses of such appraiser shall be borne by the
Executive unless the appraiser's valuation is more than 10% greater
than the amount determined by the Company, in which case, the costs of
the appraiser shall be borne by the Company. The determination of such
appraiser shall be final and binding upon all parties, except that
after the determination of Fair Market Value, any party that has
offered to purchase shares of capital stock may rescind its offer to
purchase such shares at any time
15
within ten business days after receiving written notice of such
determination of Fair Market Value. Fair Market Value shall be
determined as of the date the earlier of the Repurchase Notice or
Supplemental Repurchase Notice is delivered.
"Family Group" means Executive's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of such
Executive and/or Executive's spouse and/or descendants.
"Independent Third Party" means any person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Company's Common Stock on a fully-diluted basis, who is not controlling,
controlled by or under common control with any such 5% owner of the Company's
Common Stock and who is not the spouse or descendent (by birth or adoption) of
any such 5% owner of the Company's Common Stock.
"Intellectual Property Rights" means all inventions,
innovations, improvements, developments, methods, processes, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable or reduced to practice) and any copyrightable work, trade xxxx, trade
secret or other intellectual property rights which relate to the Company's or
any of its Subsidiaries' actual or anticipated business.
"Original Cost" of (i) each share of Common Stock purchased
hereunder shall be equal to $6.67 and (ii) each Option Share shall be the
exercise price or similar amount paid upon the issuance of such share to
Executive (in each case as proportionately adjusted for all subsequent stock
splits, stock dividends and other recapitalizations).
"Option Shares" shall mean all shares of Common Stock issued
to Executive upon exercise of any stock options or similar rights granted to
Executive by the Company.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means any offering by the Company of its
Common Stock or rights to purchase it Common Stock to the public pursuant to an
effective registration statement under the Securities Act, as then in effect, or
any comparable statement under any similar federal statute then in force.
"Public Sale" means any sale pursuant to a registered public
offering under the Securities Act or any sale to the public pursuant to Rule 144
(other than Rule 144(k)) promulgated under the Securities Act effected through a
broker, dealer or market maker.
"Sale of the Company" means the sale of the Company to an
Independent Third Party or affiliated group of Independent Third Parties
pursuant to which such party or parties acquire
16
(i) capital stock of the Company possessing the voting power to elect a majority
of the Company's board of directors (whether by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of the
Company's assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.
"Transfer" means to sell, transfer, assign, pledge or
otherwise dispose of (whether with or without consideration and whether
voluntarily or involuntarily or by operation of law).
"Work Product" means all inventions, innovations,
improvements, developments, methods, processes, designs, analyses, drawings,
reports, research and development of existing or future products or services
which were or are conceived, reduced to practice, contributed to or developed or
made by Executive (whether alone or jointly with others) while employed (both
before and after the Effective Date) by the Company (or its predecessors,
successors or assigns) and its Subsidiaries and all similar or related
information (whether or not patentable or reduced to practice) and any
copyrightable work, trade xxxx, trade secret or other intellectual property
rights, any of which relate to the Company's or any of its Subsidiaries' actual
or anticipated business.
18. Survival. The provisions set forth in paragraphs 6 through
32 of this Agreement shall survive and continue in full force and effect in
accordance with their terms notwithstanding any termination of the Employment
Period.
19. Notices. Any notice provided for in this Agreement shall
be deemed to have been given when delivered personally to the recipient, sent to
the recipient by reputable express courier (charges prepaid), telecopied (with
hard copy to follow) or 5 days after mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notice will
be sent to Executive or to the Company at the address set forth below:
17
Notices to Executive:
---------------------
0000 Xxxxxxxxxxx Xxxxx #00,
Xxxxxxxx, XX. 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices to the Company:
-----------------------
Pac-West Telecomm, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or 5 days after mailed.
20. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. The
Executive acknowledges and agrees that the covenants and agreements set forth in
this agreement were a material inducement to certain investors of the Company to
enter into the Merger Agreement and consummate the transactions contemplated
thereby, and such investors would not obtain the benefit of their bargain as set
forth in the Merger Agreement and the other agreements contemplated thereby as
specifically negotiated by the investors if Executive breached or challenged any
of the provisions of this Agreement.
21. No Strict Construction. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party. The use of the word "including" herein shall mean "including
without limitation."
22. Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopies signature pages), each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.
18
23. Choice of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and any
schedules shall be governed by, and construed in accordance with, the laws of
the State of California, without giving effect to any choice of law or conflict
of law rules or provisions (whether of the State of California or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of California.
24. Consent to Personal Jurisdiction. Executive hereby
expressly consents to the nonexclusive personal jurisdiction and venue of the
state and federal courts located in the federal Eastern District of California
for any lawsuit filed against Executive by the Company arising from or relating
to this Agreement.
25. Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Executive Stock in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Executive Stock as the owner of
such shares for any purpose.
26. Complete Agreement. This Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way, including, without limitation, the Consulting Agreement.
27. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by Executive, the Company, the Investors and their respective successors and
assigns (including subsequent holders of Executive Stock); provided that the
rights and obligations of Executive under this Agreement shall not be assignable
except in connection with a permitted Transfer of Executive Stock hereunder. The
Investors shall be permitted to assign any and all of their rights pursuant to
this Agreement to any other holder of Common Stock of the Company without
obtaining the consent or approval of any other party hereto.
28. Remedies. Each of the parties to this Agreement (including
the Investors) will be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including attorney's fees) caused by
any breach of any provision of this Agreement and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.
29. Amendment and Waiver. The provisions of this Agreement may
be amended and waived only with the prior written consent of the Company, the
Investors owning a majority of Common Stock held by the Investors and Executive.
19
30. Business Days. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or holiday
in the state in which the Company's chief executive office is located, the time
period shall be automatically extended to the business day immediately following
such Saturday, Sunday or holiday.
31. Adjustments of Numbers. All numbers set forth herein which
refer to stock prices or amounts will be appropriately adjusted to reflect stock
splits, stock dividends, combinations of stock and other recapitalizations
affecting the subject class of stock.
32. Third-Party Beneficiaries. Certain provisions of this
Agreement are entered into for the benefit of and shall be enforceable by the
Investors as provided herein.
* * * * *
20
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above which shall be effective as of the
Closing Date.
PAC-WEST TELECOMM, INC.
By: /s/ Xxxx X. Xx Xxx
-------------------------
Name: Xxxx X. Xx Xxx
-----------------------
Its: President
------------------------
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------
Its: Secretary
------------------------
/s/ Xxxxxxx X. Xxxxxxx
----------------------------
XXXXXXX X. XXXXXXX
INVESTORS:
Agreed and Accepted:
XXXXXXX XXXXX CAPITAL
PARTNERS VI, LP
By: Xxxxxxx Xxxxx Capital Partners VI, L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Its Managing Director
[Signature Page to Executive Agreement]
SCP PRIVATE EQUITY PARTNERS, L.P.
By: SCP Private Equity Management, L.P., its General
Partner
By: /s/ Xxxxxx X. Plum
------------------------------------
Name: Xxxxxx X. Plum
----------------------------------
Its General Partner
SAFEGUARD 98 CAPITAL, L.P.
By: Safeguard Delaware, Inc.
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name Xxxxx X. Xxxxxxx
----------------------------------
Title: Senior Vice President
---------------------------------
TL VENTURES III L.P.
By: TL Ventures III Management L.P.,
its General Partner
By: TL Ventures III LLC,
its General Partner
By: /s/ Xxxx Xx Xxxx
------------------------------------
Name: Xxxx Xx Xxxx
----------------------------------
[Signature Page to Executive Agreement]
Title: Managing Director
---------------------------------
TL VENTURES III OFFSHORE L.P.
By: TL Ventures III Offshore Partners L.P.,
its General Partner
By: TL Ventures Offshore Ltd.,
its General Partner
By: /s/ Xxxx Xx Xxxx
------------------------------------
Name: Xxxx Xx Xxxx
----------------------------------
Title: Managing Director
---------------------------------
TL VENTURES III INTERFUND L.P.
By: TL Ventures III LLC,
its General Partner
By: /s/ Xxxx Xx Xxxx
------------------------------------
Name: Xxxx Xx Xxxx
----------------------------------
Title: Managing Director
---------------------------------
ENERTECH CAPITAL PARTNERS, L.P.
By: EnerTech Management, L.P.
Its General Partner
By: EnerTech Management Company, L.L.C.,
Its General Partner
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
----------------------------------
[Signature Page to Executive Agreement]
Title: Managing Director
---------------------------------
/s/ Xxxx X. Xx Xxx
---------------------------------------
XXXX X. XX XXX
BAY ALARM COMPANY
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
----------------------------------
Its: Chairman
-----------------------------------
[Signature Page to Executive Agreement]
EXCLUDED INVENTIONS SCHEDULE
----------------------------
None.
Exhibit A
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement ("Agreement") is made between Pac-West Telecomm,
Inc. ("Company" or "Pac-West") and Xxxxxxx X. Xxxxxxx ("Executive").
1. Confidential Information
Pac-West Telecomm will disclose certain confidential and proprietary
information ("Confidential Information") to Executive. Confidential
Information shall include any data, materials, products, technology,
computer programs, specifications, manuals, software, marketing plans,
business plans, financial information, customer lists, customer files,
promotional materials, employee information, and other information
disclosed or submitted, orally, in writing, or by any other media, to
Executive by Company. In addition, any analyses, compilations, studies,
data, information, documents or materials (collectively called "Work
Product") prepared by Executive for or on behalf of the Company shall be
deemed to be proprietary and Confidential Information.
2. Executive's Obligations:
A. Executive agrees that the Confidential Information is to be
considered confidential and proprietary to Company, and
Executive shall hold the same in confidence, shall not use the
Confidential Information other than for the purposes of his
business with Company, and shall disclose it only to Company's
officers, directors, employees, customers, suppliers, or other
outside parties with a specific need to know for purposes of
Pac-West business operations and as required for Executive to
perform his assigned responsibilities. With the exception of
the aforementioned, Executive will not disclose, publish or
otherwise reveal any of the Confidential Information received
from Company to any party whatsoever except with the specific
prior written authorization of the Company's chief executive
officer.
B. Confidential Information
furnished in tangible form shall not be duplicated by
Executive except for purposes of this Agreement. Upon the
request of Company, Executive shall return all Confidential
Information, including all Work Product, received or produced
in written or tangible form, including copies, or
reproductions or other media containing such Confidential
Information.
3. Terms:
The obligations of Executive herein shall be effective during Executive's
employment and for three years after the date of separation from the
Company.
4. Governing Law and Equitable Relief:
This Agreement shall be governed and construed in accordance with the
laws of the State of California. Jurisdiction and venue in any action to
enforce the terms of this agreement and the obligations created hereunder
shall be deemed to have been made in and to be fully performed in San
Xxxxxxx County, California. Executive agrees that in the event of any
breach or threatened breach by Executive, Company may obtain, in addition
to any other legal remedies which may be available, restraining orders
and such equitable relief as may be necessary to protect Company against
any such breach or threatened breach.
5. Separations:
All Confidential Information furnished to Executive will be returned to
Company upon separation from the Company.
6. Entire Agreement:
This Agreement may not be modified except by written agreement signed by
both parties.
Executive
By: Date:
------------------------------ --------------------
Pac-West Telecomm
By: Date:
------------------------------ --------------------
Title:
---------------------------
