EXHIBIT 10.3
EXECUTION ORIGINAL
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "AGREEMENT") is
effective as of this 30th day of July, 2001 (the "EFFECTIVE DATE"), by and
between Rhythms NetConnections Inc., a Delaware corporation with offices at 0000
Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "COMPANY"), and Xxxxx
Xxxxxxxx, an individual residing at
("EXECUTIVE"). Each of the Company and Executive are referred to
herein as a "PARTY," and the two of them, together, are collectively referred to
herein as the "PARTIES".
W I T N E S S E T H
WHEREAS, Executive was appointed President and Chief Operating Officer
("COO") (collectively, "PRESIDENT") of the Company, effective as of April 21,
1999;
WHEREAS, at the request of the Board of Directors of the Company (the
"BOARD"), as of April 2, 2001, Executive assumed and agreed to perform the
duties, responsibilities and obligations of the Chief Executive Officer ("ACTING
CEO"), but retained the titles of President and COO; and
WHEREAS, certain compensation, incentive compensation, bonus and retention
programs were put into place for Executive in February 2001 (the "EXISTING
PROGRAMS"); and
WHEREAS, as an incentive for Executive to remain in the employ of the
Company, continue to perform all duties, responsibilities and obligations of the
President and accept and perform all of the duties, responsibilities and
obligations of the Acting CEO and in order to memorialize the Existing Programs
and other arrangements by and between the Company and Executive, the Executive
and the Company entered into that certain Employment Agreement, dated as of June
1, 2001 (the "ORIGINAL AGREEMENT"); and
WHEREAS, the Company has entered into a Voting Agreement (the "VOTING
AGREEMENT") with the Ad Hoc Committee of Bondholders (the "AD HOC COMMITTEE"),
pursuant to which the Company has agreed, among other things, to file for
protection under Chapter 11 of the Bankruptcy Code ("CHAPTER 11") on August 1,
2001; and
WHEREAS, it is a condition to the continuing effectiveness of the Voting
Agreement that the Company and the Executive amend the Original Agreement in
order to effect certain agreed upon changes to the Original Agreement; and
WHEREAS, Executive and Company now desire to amend and restate the Original
Agreement to, among other things, effect the changes to the Original Agreement
and to make the other changes and modifications to the Original Agreement set
forth herein; and
WHEREAS, from an after the Effective Date hereof, this Agreement shall
supercede and replace the Original Agreement, in its entirety.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be bound
hereby, agree as follows:
1. TITLE AND RESPONSIBILITIES. Executive shall continue to be employed as
the President and Acting CEO of the Company. Executive shall have responsibility
for managing the day to day affairs of the Company, subject to policies and
procedures established by, the ultimate authority of and the oversight and
supervision of, the Board. Executive shall report directly to the Board.
2. BASE SALARY AND BONUS(ES).
a. BASE SALARY. Executive's salary shall be $400,000, on an
annualized basis ("BASE SALARY"), payable in accordance with the Company's
standard and customary payroll practices. Executive's Base Salary shall be
subject to annual review and adjustment by the Board, in its sole and absolute
discretion.
b. RETENTION BONUS. Executive shall be entitled to receive a cash
retention bonus in the amount of $2,729,258 (the "RETENTION BONUS"), payable as
follows: (i) $711,984 was paid to Executive on the effective date of the
Original Agreement; and (ii) $2,017,274 will be earned, and accrue, in nineteen
(19) equal monthly installments of $106,172.32 per month (the "MONTHLY RETENTION
BONUS"), starting with June 2001 and ending with December 2002, so long as
Executive is employed by the Company on the last business day of each such
month. The Monthly Retention Bonus for June was paid on June 30, 2001. The
Monthly Retention Bonus for July 2001 will be paid on July 31, 2001, in
accordance with the Company's standard and customary bonus payment practices, so
long as Executive is employed by the Company on July 31, 2001. The Monthly
Retention Bonus payments for the period August 1, 2001 through December 31,
2002, to the extent earned and accrued, will be paid in accordance with Sections
6. and 7. below.
c. ANNUAL BONUS. Executive shall be entitled to receive a guaranteed
annual cash bonus, payable quarterly in arrears, in an amount equal to sixty
percent (60%) of Executive's annual Base Salary ("ANNUAL BONUS"). The Annual
Bonus shall be guaranteed through December 31, 2002. The Annual Bonus each year
shall be paid in accordance with the Company's standard and customary executive
management annual bonus payment practices, so long as Executive is employed by
the Company on the last business day of the applicable Annual Bonus payment
period.
3. TERM.
a. TERM. The term ("TERM") of this Agreement will commence on the
Effective Date and will expire on January 2, 2003, unless renewed as provided
for in Section 3.b. below or unless this Agreement is terminated before January
2, 2003 by Executive or the
Company. The term of the Original Agreement commenced as of June 1, 2001, and
will expire on and as of the Effective Date of this Agreement. It is intended
that (i) the terms and conditions of this Agreement shall govern during the Term
of this Agreement and (ii) the terms and conditions of the Original Agreement
shall govern during the term of the Original Agreement.
b. RENEWAL TERM(S). The Term shall automatically renew for
successive one (1) year periods from the then scheduled expiration date unless,
not less than 90 days prior thereto, either the Company or the Executive
notifies the other of its or his intention not to renew, in which case this
Agreement shall expire at the end of the then current Term.
4. BENEFITS AND OTHER MATTERS.
a. INSURANCE. The Company will provide retirement, employee health
and welfare, and fringe benefit plans to Executive no less favorable than those
generally made available to the Company's executive employees. Executive will be
fully vested for all purposes under all such plans, other than any tax-qualified
Company retirement plans.
b. PTO. Executive will be entitled to 120 hours of personal time
off, on an annualized basis ("PTO"). Unused PTO will accrue indefinitely up to a
maximum of 160 hours (accrued PTO in excess of 160 accrued hours will be
forfeited). Upon expiration of this Agreement or termination of Executive's
employment for any reason, Executive will be entitled to receive payment for any
accrued but unused PTO (up to the accrual limitation set forth herein) through
the date of termination at the rate of $192.31 per hour.
c. REIMBURSEMENT OF EXPENSES. The Company will reimburse Executive
for all reasonable out-of-pocket expenses actually incurred by Executive (in
accordance with the Company's published expense reimbursement policies, as
amended from time to time) in connection with performing his obligations
hereunder upon receipt from Executive of standard documentation supporting such
expenses.
5. PROPRIETARY INFORMATION AGREEMENT; NON-COMPETE AGREEMENT.
a. PROPRIETARY INFORMATION AGREEMENT. Executive hereby affirms the
validity, to the extent of applicable law, of that certain Employee Proprietary
Information and Inventions Agreement, dated as of April 17, 1999, by and between
Executive and the Company ("PROPRIETARY INFORMATION AGREEMENT").
b. NON-COMPETE AGREEMENT. Executive hereby affirms the validity, to
the extent of applicable law, of that certain Non-Compete Agreement, dated as of
April 17, 1999, by and between Executive and the Company ("NON-COMPETE
AGREEMENT").
c. ENFORCEMENT OF PROPRIETARY INFORMATION AGREEMENT AND NON-COMPETE
AGREEMENT. If a determination is made that any temporal, territorial or
activity-related restriction contained in the Proprietary Information Agreement
and/or Non-Compete Agreement is too broad to permit enforcement thereof to its
fullest extent, then such restriction shall be
enforced to the maximum extent permitted by law, and the Parties agree that the
Proprietary Information Agreement and/or Non-Compete Agreement may be judicially
reformed, revised, modified or partially enforced in any proceeding brought to
enforce agreement or portion thereof. Subject to the foregoing, if any provision
of the Proprietary Information Agreement and/or Non-Compete Agreement is deemed
invalid or unenforceable by a court of law, such provision shall be considered
to be automatically deleted therefrom. However, any such deletion shall apply
only to that portion of any provision so adjudicated, and the operation of such
provision shall only be deemed inapplicable in the particular jurisdiction in
which the adjudication is made.
6. TERMINATION.
a. GENERAL. The Company may terminate Executive's employment at any
time, with or without Cause (as defined below), subject to the provisions
hereof. Executive may terminate his employment at any time, with or without Good
Reason (as defined below), subject to the provisions hereof.
b. TERMINATION BY THE COMPANY WITH CAUSE, TERMINATION BY EXECUTIVE
WITHOUT GOOD REASON OR NONRENEWAL OF THIS AGREEMENT UNDER SECTION 3 ABOVE. If
(i) the Company terminates the employment of Executive with Cause or (ii) the
Executive terminates his employment without Good Reason or (iii) either Party
properly elects not to renew the Term of this Agreement pursuant to Section 3
above, Executive shall be entitled to receive (A) the amount of any accrued but
unpaid Base Salary, accrued but unpaid Annual Bonus payments and all other
accrued but unpaid employee benefits to which Executive is entitled through the
date of termination plus (B) unreimbursed expenses properly incurred through the
date of termination.
c. TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD
REASON.
i. PRIOR TO A SUCCESSFUL RESTRUCTURING. If, prior to the
occurrence of a Successful Restructuring (as defined in Section 7.a. below), (A)
the Company terminates the employment of Executive without Cause or (B)
Executive terminates his employment for Good Reason, Executive shall be entitled
to receive (1) the amount of any accrued but unpaid Base Salary, accrued but
unpaid Annual Bonus payments, accrued but unpaid Retention Bonus payments and
all other accrued but unpaid employee benefits to which Executive is entitled
through the date of termination, (2) fifty percent (50%) of all remaining
unaccrued and unpaid Retention Bonus payments, but in no event less than one (1)
year's Base Salary (as in effect at such time), (3) unreimbursed expenses
properly incurred through the date of termination and (4) the Restructuring
Payments in accordance with Section 7.d. in the event the Company consummates a
Successful Restructuring.
ii. SUBSEQUENT TO A SUCCESSFUL RESTRUCTURING.If, subsequent to
the occurrence of a Successful Restructuring (as defined in Section 7.a. below),
(A) the Company terminates the employment of Executive without Cause or (B)
Executive terminates his employment for Good Reason, Executive shall be entitled
to receive (1) the amount of any
accrued but unpaid Base Salary, accrued but unpaid Annual Bonus payments,
accrued but unpaid Retention Bonus payments (if any, after taking into account
payments received under Section 7.a. below), accrued but unpaid Restructuring
Payments (if any, after taking into account payments received under Section 7.a.
below) and all other accrued but unpaid employee benefits to which Executive is
entitled through the date of termination and (2) unreimbursed expenses properly
incurred through the date of termination.
d. DEFINED TERMS. For purposes of this Agreement:
i. "CAUSE" shall be limited to the following: (A) deliberate
dishonesty or willful misconduct in the performance of Executive's
responsibilities resulting in a material adverse effect on the Company's
business, financial condition or operational results; (B) Executive shall be
convicted of a felony, or plea of NOLO CONTENDERE thereto, involving moral
turpitude which materially adversely reflects on the Company; or (C) breach by
Executive of his Proprietary Information Agreement and/or Non-Compete Agreement.
A determination that Cause exists shall be made by the Board, acting reasonably
and in good faith, which determination shall be final and binding on all
Parties.
ii. "GOOD REASON" shall mean termination at the election of
Executive based on (A) or (B) below (provided that Employee gives written notice
of his intention to terminate employment within thirty (30) days of the date on
which the event described in (A) or (B) occurs and that the Company shall have
thirty (30) days from the receipt of such notice to cure any such defects) or by
reason of the occurrence of an event described in (C) below:
(A) Without Executive's express written consent, the
assignment of Executive to a position other than President and Acting CEO of the
Company with day-to-day responsibility and authority for the operation of the
business of the Company or a material diminution in Executive's duties as
President and Acting CEO, except in connection with the termination of his
employment by the Company with Cause, normal retirement, death or disability of
Executive (see clause (C.) below) or termination by the Executive without Good
Reason;
(B) A reduction in Executive's fringe or retirement
benefits that is not applied by the Company to executives generally or, in the
case of any benefit unique to Executive, a material reduction in such benefit,
or a reduction by the Company in Executive's Base Salary, Annual Bonus amount,
Retention Bonus amount, Success Payments or severance or Executive is required
to return to the Company any previously received Base Salary, Annual Bonus
amount, Retention Bonus amount, Success Payments or severance amounts; or
(C) Executive dies or becomes mentally or physically
disabled for such period of time and under circumstances which entitle Executive
to receive disability benefits under the terms of the Company's long-term
disability insurance policy then maintained by the Company.
7. RESTRUCTURING TRANSACTION.
a. GENERAL. Upon the occurrence of all of the following three events
(the date that all three events occurs is referred to herein as the
"RESTRUCTURING DATE"), (i) consummation of a Restructuring Transaction (as
defined in Section 7.b. below), (ii) approval of a Plan of Reorganization (as
defined in Section 7.c. below) by the Bondholder Class (as defined in Section
7.c. below) and (iii) the order of the Bankruptcy Court (as defined in Section
7.c. below) confirming the Plan of Reorganization becoming final (the occurrence
of all three such events being referred to herein as a "SUCCESSFUL
RESTRUCTURING"), Executive shall be entitled to receive (A) the amount of any
accrued but unpaid Base Salary, accrued but unpaid Annual Bonus payments,
accrued but unpaid Retention Bonus payments and all other accrued but unpaid
employee benefits to which Executive is entitled through the Restructuring Date,
(B) the Earned Portion (as defined in Section 7.d. below) of all remaining
as-yet unaccrued and unpaid Retention Bonus payments and (C) the Restructuring
Success Bonus (as defined in Section 7.d. below). The Earned Portion (as defined
in Section 7.d. below) of all remaining as-yet unaccrued and unpaid Retention
Bonus payments and the Restructuring Success Bonus are collectively referred to
herein as the "RESTRUCTURING PAYMENTS."
b. RESTRUCTURING TRANSACTION. The term "RESTRUCTURING TRANSACTION"
means (i) any joint venture, strategic alliance, recapitalization, sale, merger,
consolidation, or any other business combination or reorganization, in one or a
series of related transactions, as a result of which any "person" or "group" (as
such terms are defined in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended), other than the Company, one or more of its
subsidiaries or any of its affiliates (including any employee benefit plan
thereof) (A) becomes the "beneficial owner," directly or indirectly, of thirty
percent (30%) or more of (1) the outstanding equity securities of the Company,
determined on a fully diluted basis, including all options, warrants or other
convertible securities or (2) the combined voting power of all classes of equity
securities entitled to vote, determined on a fully diluted basis, including all
options, warrants or other convertible securities or (3) the equity securities
of any entity that owns all or substantially all of the assets of the Company
(transactions described in (1), (2) and (3) being referred to herein as "EQUITY
TRANSACTIONS") or (B) acquires assets representing thirty percent (30%) or more
of the total assets of the Company, on a consolidated basis (an "ASSET
TRANSACTION") or (ii) a liquidation, wind-down or dissolution of the Company (a
"LIQUIDATION"). A Restructuring Transaction includes any Equity Transaction,
Asset Transaction or Liquidation, whether or not the Company has filed for
protection under federal bankruptcy law or has availed itself of any similar
state law proceeding or other similar proceeding or arrangement.
c. PLAN OF REORGANIZATION; BANKRUPTCY COURT; BONDHOLDER CLASS;
NOTES. The term "PLAN OF REORGANIZATION" means a plan of reorganization, within
the meaning of Chapter 11. The term "BONDHOLDERS CLASS" means the class of
creditors in the Company's Chapter 11 case (the "CHAPTER 11 CASE") comprised of
the holders of the Company's 13-1/2% Senior Discount Notes due 2008 (the "1998
NOTES"), 12-3/4% Senior Notes due 2009 (the "1999 NOTES") and 14% Senior Notes
due 2010 (the "2000 NOTES" and, along with the 1998 Notes and the 1999 Notes,
the "NOTES"). The term "BANKRUPTCY COURT" means the federal bankruptcy court
having jurisdiction over the Company's Chapter 11 Case.
d. EARNED PORTION OF THE RETENTION BONUS; RESTRUCTURING SUCCESS
BONUS. The "EARNED PORTION" of the Retention Bonus and the "RESTRUCTURING
SUCCESS BONUS" shall be based on the amount of the Bondholder Recovery (as
defined below), determined in accordance with the following table:
AGGREGATE EARNED PORTION OF RESTRUCTURING SUCCESS
BONDHOLDER RECOVERY RETENTION BONUS (STATED BONUS
AS A PERCENTAGE)
$0 - $49,999,999.99 20% --
$50,000,000.00 - $99,999,999.99 40% $ 75,000
$100,000,000.00 - $149,999,999.99 60% $150,000
$150,000,000.00 - $199,999,999.99 80% $250,000
$200,000,000.00 and above 100% $500,000
The term "BONDHOLDER RECOVERY" shall mean the total amount of cash and
the fair market value (on the date of determination) of all other property
(including all debt securities, common equity securities, preferred equity
securities, warrants, options or similar rights of the Company) distributed to
the Bondholder Class pursuant to the Plan of Reorganization, exclusive of any
funds distributed to the Bondholder Class out of the escrow fund created under
that certain Pledge and Escrow Agreement, dated as of April 23, 1999, by and
between the Company, as pledgor, and State Street Bank and Trust Company of
California, N.A., as trusteee.
8. ARBITRATION. Subject to Section 10.b. below, the Parties hereto agree
to submit any dispute hereunder to binding arbitration. Arbitration shall be
conducted in Denver,
Colorado, under the commercial rules of the American
Arbitration Association ("AAA") by a panel of three (3) arbitrators. The
aforementioned arbitrators shall be chosen as follows: The Company and Executive
shall each designate one arbitrator from a list of acceptable and qualified
arbitrators which will be provided by the AAA. The two arbitrators so designated
shall then choose the panel's third arbitrator who shall be an attorney-at-law
and who shall serve as the Chairman of the panel; provided that if either Party
fails to designate an arbitrator within ten (10) days of receipt of AAA's list
or if the two arbitrators are unable to agree on the appointment of the third
arbitrator within 10 days of the later of the date of their respective
appointments, such arbitrator shall be designated by AAA. If any arbitrator
resigns or is unable to continue serving as such, the successor to such
arbitrator shall be appointed by the Party who appointed such arbitrator or by
the remaining arbitrators if they appointed such arbitrator, or by the AAA, as
the case may be. A stenographic record of the arbitration must be maintained,
the panel, including the successor arbitrator, may rely on such record and no
rehearing shall be required. Subject to Section 10.k. hereof, each of the
Parties shall pay the fees and expenses of the arbitrator appointed by it and
each shall pay one-half (1/2) of the fees and expenses of the third arbitrator
and any other expenses of the arbitration, unless the arbitrators determine that
the losing Party shall bear the cost of the arbitration. The decision of the
arbitrators with respect to any issues subject to arbitration shall be final and
binding on the Parties and may be entered into any court of competent
jurisdiction by either Party, or application may be made to such court for
judicial
confirmation of the award and order of enforcement, as the case may be. The
demand for arbitration shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen. Notwithstanding the foregoing,
it is hereby agreed that no arbitration panel shall have any power to (a) add
to, alter or modify the terms and conditions of this Agreement, (b) decide any
issue which does not arise from the interpretation or application of the
provisions of this Agreement or (c) award any punitive damages under this
Agreement.
9. INDEMNIFICATION. The Company hereby agrees to indemnify and hold
harmless the Executive to the fullest extent permitted by law from and against
any and all losses, claims, damages, expenses (including reasonable fees, costs
and expenses of counsel) or other liabilities ("LIABILITIES") resulting from any
Covered Claim (as defined below)); provided, however, that the indemnification
provided under this Section 9 shall not exceed the sum of the following three
items: (a) the funds held by The Bank of Cherry Creek, N.A., as trustee (the
"TRUSTEE"), pursuant to that certain Agreement and Declaration of Trust, dated
as of July 6, 2001, by and between the Company, as settlor, and the Trustee, the
purpose of which is to fund payments to employees of the Company under the
Company's 2001 Retention Program (the "RETENTION TRUST," which was originally
funded with $7.0 million), (b) the funds held by the Trustee, pursuant to that
certain Agreement and Declaration of Trust, dated as of July 6, 2001, by and
between the Company, as settlor, and the Trustee, the purpose of which is to
fund payments to employees of the Company under the Company's Severance Policy
and Paid Time Off and Family Medical Leave Act Policy (the "SEVERANCE TRUST,"
which was originally funded with $7.4 million) plus (c) $1.625 million of
severance payable, if earned, to the six (6) senior executives (not including
Executive and Xxx Xxxxxxxx, the Chief Financial Officer of the Company) under
the Company's Severance Policy, which amounts were not placed in the Severance
Trust (the "SENIOR EXECUTIVE SEVERANCE"); and, provided further, that the
indemnification provided herein is intended to supplement and enhance (and is
not intended to reduce or to be in lieu of) the rights of indemnity that the
Executive has or may have against the Company, including, but not limited to,
the rights of indemnity afforded the Executive under (i) any other indemnity
documents, agreements or instruments between the Executive and the Company, (ii)
the articles of incorporation and/or bylaws of the Company and (iii) the
applicable provisions of the Delaware General Corporation Law. A "COVERED Claim"
is defined to mean any claim asserted against the Executive under, arising out
of or by reason of the
Colorado Wage Act (as defined in Section 10.g. below),
which claim is, or was intended to be, covered by and paid out of the funds held
in the Retention Trust, the Severance Trust and/or reserved for payment of the
Senior Executive Severance.
10. GENERAL.
a. SEVERABILITY. The Company and Executive agree that the agreements
and provisions contained in this Agreement are severable and divisible, that
each such agreement and provision does not depend upon any other provision or
agreement for its enforceability, and that each such agreement and provision set
forth herein constitutes an enforceable obligation between the Parties.
Consequently, the Parties agree that neither the invalidity nor the
unenforceability of any provision of this Agreement shall affect the other
provisions, and this Agreement shall
remain in full force and effect and be construed in all respects as if such
invalid or unenforceable provision were omitted.
b. SPECIFIC PERFORMANCE. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of the Proprietary
Information Agreement and/or Non-Compete Agreement hereof would be inadequate
and, in recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
c. WAIVER, MODIFICATION. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Company or such officer
as may be specifically designated by the Board. No waiver by either Party hereto
at any time of any breach by the other Party of, or compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions of this Agreement at the same or any prior
or subsequent time.
d. SUCCESSORS; BINDING AGREEMENT. Executive hereby consents and
agrees that the Company may require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company or any division of the Company by
which the Executive is employed to expressly assume and agree in writing 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
or, in the event the Company remains in existence, the Company may continue to
employ the Executive under the terms hereof. Except in accordance with the
foregoing sentence, this Agreement may not be assigned by the Company. This
Agreement shall inure to the benefit of and be enforceable by Executive's
personal or legal representatives, executors, estate, trustees, administrators,
successors, heirs, distributees, devisees and legatees. This Agreement is
personal to Executive and neither this Agreement nor any rights hereunder may be
assigned by the Executive.
e. SURVIVAL. Notwithstanding anything to the contrary herein, in the
event of a termination of this Agreement, the provisions of Section 5 and
Section 10.b. above shall survive and be enforceable in accordance with their
terms.
f. ENTIRE AGREEMENT. From and after the Effective Date, this
Agreement supersedes all prior agreements, negotiations and understandings of
any kind with respect to the subject matter hereof (including Executive's offer
letter, dated as of April 16, 1999, and Executive's Original Agreement) and
constitutes the entire understanding and agreement between the Parties hereto
with respect to the subject matter hereof. Any representation, promise or
condition, whether written or oral, not specifically incorporated herein, shall
be of no binding effect upon the Parties.
g. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of
Colorado, without regard to
conflicts of laws rules. Notwithstanding anything herein to the contrary, it is
the express intent of the Parties that all of the Company's monetary obligations
to Executive hereunder shall be considered "wages" or "compensation," as defined
in C.R.S. Section 8-4-101 ET. SEQ. (2001) (known as the
Colorado Wage Act), and
that Executive shall be entitled to all of the rights, benefits and protections
afforded an "employee," as defined in C.R.S. Section 8-4-101, for all purposes
of the
Colorado Wage Act.
h. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
i. HEADINGS. The inclusion of headings in this Agreement is for
convenience of reference only and shall not affect the construction or
interpretation hereof.
j. WITHHOLDING TAXES. Notwithstanding anything herein to the
contrary, all amounts payable to Executive under this Agreement shall be subject
to withholding by the Company for federal, state, local and other withholding
taxes, as well as for the portion of the cost of such employee benefits elected
by Executive for which Executive is responsible for paying (such as, Executive's
portion of any life or health, dental or other insurance premiums, etc.). In
addition, the Company shall have the right to offset against any amounts payable
to Executive hereunder all amounts, if any owed, by Executive to the Company.
k. ENFORCEMENT. If either Party is required to arbitrate or seek
judicial enforcement of his or its rights under this Agreement, the Party
prevailing in such proceeding shall be entitled to be reimbursed by the other
for all reasonable attorneys' fees and expenses.
l. VALID AND BINDING. The Company represents that it has all
requisite power and authority to execute and deliver, and to perform its
obligations under, this Agreement, and that this Agreement is valid, binding and
enforceable against the Company in accordance with its terms.
m. NOTICES. All notices or other communications in connection with
the Agreement shall be in writing and may be given by personal delivery or
mailed, certified mail, return receipt requested, postage prepaid or delivered
by a nationally recognized overnight courier to the Parties at the addresses set
forth below (or at such other address as the Company or Executive may specify in
a notice to the Executive or Company, as the case may be):
If to the Company:
Rhythms NetConnections Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Fax No.: 303/000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxxxxxx Xxxxx & Xxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax No: 303/000-0000
Attn: Xxxx X. Xxxxxxx, Esq.
If to Executive:
Xxxxx Xxxxxxxx
[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement
as of the Effective Date.
RHYTHMS NETCONNECTIONS INC.
By:
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Name:
-------------------------
Title:
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XXXXX XXXXXXXX
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