EXHIBIT 10.24
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of April 12, 2000, by and between, PF
Net Communications, Inc., a Delaware corporation, (the "Company"), and Xxxxxx X.
Xxxxx, residing at 00000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxxx, XX ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as President of
PF Net Network Services, Inc., a Delaware corporation ("Network Services") and a
senior executive officer of the Company;
WHEREAS, the Company and Executive desire to enter into this
agreement (the "Agreement") as to the terms of his employment by the Company and
Network Services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:
1. TERM OF EMPLOYMENT. Except for earlier termination as provided
in Section 7 hereof, Executive's employment under this Agreement shall be for a
term of four (4) years (the "Employment Term") commencing on or about April 24,
2000 (the "Commencement Date") and ending on the day immediately prior to the
fourth anniversary of the Commencement Date (the "Initial Employment Term);
provided, however, the Employment Term shall be automatically extended, subject
to earlier termination as provided in Section 7 hereof, for up to three (3)
successive additional one (1) year periods (the "Additional Employment Term")
unless the Company or Executive gives written notice to the other at least
thirty (30) days prior to the expiration of the Initial Employment Term or the
then Additional Employment Term of the termination of Executive's employment
hereunder at the end of such Employment Term.
2. POSITIONS. (a) During the Employment Term, Executive shall
serve as the President of Network Services and senior executive officer of the
Company and be based at the Company's corporate headquarters, which will be
permanently established in the future.
(b) Executive shall report directly to the Chief Executive Officer
of the Company (the "CEO") and the Boards of Directors of the Company and
Network Services, and shall have such duties and authority, consistent with his
then position as shall be assigned to him from time to time by the CEO, the
Board of Directors of the Company (the "Board") or the Board of Directors of
Network Services.
(c) During the Employment Term, Executive shall devote
substantially all of his business time and best efforts to the performance of
his duties hereunder; provided, however, that Executive shall be allowed, to the
extent that such activities do not interfere with the performance of his duties
and responsibilities hereunder, to manage his passive personal investments and
to serve on corporate, civic, charitable and industry boards or committees.
Notwithstanding the foregoing, the Executive shall only serve on corporate
boards of directors or corporate advisory committees if approved in advance by
the Board and shall promptly resign from any such board if service on it is in
conflict with his fiduciary duty or time commitment to the Company or if he is
otherwise requested to resign by the CEO or the Board.
3. BASE SALARY. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of not less than $400,000 payable in
accordance with the usual payroll practices of the Company. Executive's Base
Salary shall be subject to annual review by the Board or the Compensation
Committee of the Company's Board (the "Committee") during the Employment Term
and may be increased from time to time by the Board or the Committee.
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The base salary as determined as aforesaid from time to time shall constitute
"Base Salary" for purposes of this Agreement.
4. INCENTIVE COMPENSATION. (a) BONUS. For each fiscal year that
ends during the Employment Term (the "Bonus Year"), the Company shall pay a
bonus to Executive based on pre-established performance goals established by the
Board or the Committee with a target bonus of 100% of Base Salary and a range
from 0% to 300% of Base Salary (the "Bonus"); PROVIDED that for the 2000 bonus
year, such Bonus shall be pro-rated for the portion of the year worked by
Executive from and after the Commencement Date.
(b) OPTIONS. Effective on the Commencement Date, the Company shall
grant Executive options (the "Options") to purchase 1,400,000 shares (as
adjusted for any stock splits, stock dividends or other Company transaction or
event having a similar effect, that takes place prior to the grant of the
Option) of the Company's common stock ("Common Stock") on the terms and
conditions contained in the term sheet attached as Exhibit A hereto under an
incentive stock plan adopted by the Company.
5. EMPLOYEE BENEFITS AND VACATION. (a) During the Employment
Term, Executive shall be entitled to participate in all benefit plans and
arrangements and fringe benefits and perquisite programs generally provided to
senior executives of the Company.
(b) During the Employment Term, Executive shall be entitled to
vacation each year in accordance with the Company's policies in effect from time
to time, but in no event less than four (4) weeks paid vacation per calendar
year. The Executive shall also be entitled to such periods of sick leave as is
customarily provided by the Company for its senior executive employees.
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6. BUSINESS EXPENSES. The Company shall reimburse Executive for
the travel, entertainment and other business expenses incurred by Executive in
the performance of his duties hereunder, in accordance with the Company's
policies as in effect from time to time.
7. TERMINATION. (a) The employment of Executive under this
Agreement shall terminate upon the earliest to occur of any of the following
events:
(i) the death of the Executive;
(ii) the termination of the Executive's employment by the
Company due to the Executive's Disability pursuant to Section 7(b)
hereof;
(iii) the termination of the Executive's employment by the
Executive for Good Reason pursuant to Section 7(c) hereof;
(iv) the termination of the Executive's employment by the
Company without Cause;
(v) the termination of employment by the Executive without
Good Reason after the earlier of (i) the fourth anniversary of the
Commencement Date or (ii) one (1) year after an initial public
offering of the Company's Common Stock pursuant to a registration
statement (other than on a Form S-8 or any successor form) filed
with, and declared effective by, the Securities and Exchange
Commission, upon sixty (60) days prior written notice; or
(vi) the termination of the Executive's employment by the
Company for Cause pursuant to Section 7(e).
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(b) DISABILITY. The Company may terminate Executive's employment
for Disability at any time upon thirty (30) days written notice provided to
Executive in accordance with Section 13(g) hereof. For purposes of this
Agreement, Disability shall mean (i) a mental or physical disability that has
prevented Executive from performing Executive's duties hereunder for a period of
at least one-hundred eighty (180) days within any 365 day period or (ii) a good
faith determination by the Board, based upon a physician's examination of the
Executive, that Executive will be unable to perform his duties hereunder as a
consequence of a mental or physical disability for a period of more than six (6)
consecutive months; provided, that if the Executive refuses to submit to such a
medical examination, the Committee shall make the determination as to the
Executive's Disability based upon evidence as the Committee shall choose, which
determination shall be conclusive.
(c) TERMINATION FOR GOOD REASON. A Termination for Good Reason
means a termination by Executive by written notice given within sixty (60) days
after the event that constitutes Good Reason, unless such circumstances are
fully corrected prior to the date of termination specified in the Notice of
Termination for Good Reason (as defined in Section 7(d) hereof). For purposes of
this Agreement, "Good Reason" shall mean the occurrence or failure to cause the
occurrence, as the case may be, without Executive's express written consent, of
any of the following circumstances: (i) any material diminution of Executive's
positions, duties or responsibilities hereunder (except in each case in
connection with the termination of Executive's employment for Cause or
Disability or as a result of Executive's death, or temporarily as a result of
Executive's illness or other absence), after the commencement of employment of a
permanent CEO and the establishment of the CEO's management structure, or, the
assignment to Executive of duties or responsibilities that are inconsistent with
Executive's then position; (ii) a relocation of the Company's executive offices
(once it is established by the Board) to a location more than fifty
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(50) miles from its initial location and more than thirty-five (35) miles
further from the Executive's residence at the time of relocation; or (iii) any
material breach by the Company of any provision of this Agreement that is not
cured within ten (10) days of the Executive's written notification to the
Company of such breach. Notwithstanding anything herein to the contrary,
Executive's voluntary resignation for any reason during the thirty (30) day
period commencing immediately after the first anniversary of a Change in Control
of the Company (as defined in Exhibit A attached hereto) shall be deemed a
termination for Good Reason hereunder.
(d) NOTICE OF TERMINATION FOR GOOD REASON. A Notice of Termination
for Good Reason shall mean a notice that shall indicate the specific termination
provision in Section 7(c) relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for Termination for Good
Reason. The Notice of Termination for Good Reason shall provide for a date of
termination of not less than twenty (20) nor more than sixty (60) days after the
date such Notice of Termination for Good Reason is given.
(e) CAUSE. Subject to the notification provisions of Section 7(f)
below, Executive's employment hereunder may be terminated by the Company for
Cause. For purposes of this Agreement, the term "Cause" shall be limited to (i)
the willful misconduct or gross negligence of Executive which has a material
adverse effect on the Company or its affiliates; (ii) the willful refusal of
Executive to attempt to follow the proper written direction of the CEO or Board;
(iii) the willful failure by the Executive to attempt in good faith to perform
the duties required of him hereunder (other than any such failure resulting from
incapacity due to physical or mental illness) after a written demand for
substantial performance is delivered to the Executive by the Board which
specifically identifies the manner in which it is believed that the Executive
has failed to attempt to perform his duties hereunder; (iv) the Executive being
convicted of a felony or any crime involving dishonesty, fraud or moral
turpitude; (v) the Executive's theft, fraud,
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dishonesty or knowing breach of fiduciary duty with regard to the Company or
performance of his duties hereunder; or (vi) the Executive's breach of this
Agreement unless corrected by Executive within ten (10) days of the Company's
written notification to Executive of such breach. For purposes of this
paragraph, no act, or failure to act, on Executive's part shall be considered
"willful" unless done or omitted to be done by him not in good faith and without
reasonable belief that his action or omission was in the best interests of the
Company. A notice by the Company of a non-renewal of the Employment Term
pursuant to Section 1 hereof shall be deemed an involuntary termination of
Executive by the Company without Cause as of the end of the then Employment
Term.
(f) NOTICE OF TERMINATION FOR CAUSE. A Notice of Termination for
Cause shall mean a notice that shall indicate the specific termination provision
in Section 7(e) relied upon and shall set forth in reasonable detail the facts
and circumstances which provide for a basis for Termination for Cause.
8. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
(a) DEATH. Subject to Section 8(e) hereof, if, Executive's
employment is terminated by reason of Executive's death, the Employment Term
shall terminate without further obligations to the Executive's legal
representatives under this Agreement except for: (i) any compensation earned but
not yet paid, including and without limitation, any bonus if declared or earned
but not yet paid for a completed fiscal year, any amount of Base Salary earned
but unpaid, any unpaid vacation pay accrued in the year of the Executive's
termination, and any unreimbursed business expenses payable pursuant to Section
6 hereof (collectively "Accrued Amounts"), which amounts shall be promptly paid
in a lump sum to Executive's estate (other than any bonus, which shall be paid
when bonuses for such period are paid to other Company executives); (ii) any
other
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amounts or benefits owing to the Executive under the then applicable employee
benefit plans, long term incentive plans or equity plans and programs of the
Company which shall be paid or treated in accordance with Exhibit A hereof with
regard to the Options and otherwise in accordance with the terms of such plans
and programs; (iii) payment of COBRA premiums for a period of twelve (12) months
for the Executive's dependent's health benefits at the same level and cost as if
Executive was an employee of the Company, provided, that the dependents are
eligible and remain eligible for coverage under COBRA, timely elect such
coverage and timely pay their portion of the premiums; and (iv) an amount equal
to the product of (x) the target Bonus for the fiscal year of Executive's death,
multiplied by (y) a fraction, the numerator of which is the number of days of
the fiscal year during which Executive was employed by the Company, and the
denominator of which is 365, which bonus shall be paid when bonuses for such
period are paid to the other executives (the "Pro-Rata Bonus").
(b) DISABILITY. Subject to Section 8(e) hereof, if Executive's
employment is terminated by reason of Executive's Disability, Executive shall be
entitled to receive (i) the Accrued Amounts, paid promptly in a lump sum to
Executive (other than any bonus, which shall be paid when bonuses for such
period are paid to other Company executives); (ii) any other amounts or benefits
owing to the Executive under the then applicable employee benefit plans, long
term incentive plans or equity plans and programs of the Company which shall be
paid or treated in accordance with Exhibit A hereof with regard to the Options
and otherwise in accordance with the terms of such plans and programs; (iii)
payment of COBRA premiums for a period of twelve (12) months for Executive's and
Executive's dependents health benefits at the same level and cost as if
Executive was an employee of the Company, provided, that they are eligible and
remain eligible for coverage under COBRA, timely elect such coverage and timely
pay their portion of the premiums (the "COBRA Medical Benefit"); and (iv) the
Pro-Rata Bonus.
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(c) TERMINATION BY EXECUTIVE FOR GOOD REASON; TERMINATION BY THE
COMPANY WITHOUT CAUSE. Subject to Section 8(e) hereof, if (x) Executive
terminates his employment hereunder for Good Reason or (y) Executive's
employment with the Company is terminated by the Company without Cause, except
as provided below, Executive shall be entitled to receive, (i) an amount equal
to the Base Salary that the Executive would have been entitled to hereunder, had
Executive continued working through the end of the then current Employment Term
(but no greater than two (2) years or less than one (1) year), payable monthly
over the relevant period; (ii) any Accrued Amounts at the date of termination;
(iii) the COBRA Medical Benefit; (iv) the Pro-Rata Bonus; and (iv) any other
amounts or benefits owing to Executive under the then applicable employee
benefit, long term incentive or equity plans and programs of the Company, which
shall be paid or treated in accordance with Exhibit A hereof with regard to
Options and otherwise in accordance with the terms of such plans and programs.
Notwithstanding anything in this Agreement to the contrary, in the event
Executive violates any provision of Section 10 hereof, all payments and benefits
then being made or provided to Executive under this Section 8(c) shall
immediately terminate.
(d) TERMINATION WITH CAUSE OR VOLUNTARY RESIGNATION WITHOUT GOOD
REASON OR RETIREMENT. If, Executive's employment hereunder is terminated (i) by
the Company for Cause or (ii) by Executive without Good Reason (including a
termination pursuant to a notice of non-renewal given by the Executive to the
Company in accordance with Section 1 hereof), the Executive shall be entitled to
receive only his Base Salary through the date of termination, any unpaid
vacation accrued in the year of the Executive's termination of employment and
any unreimbursed business expenses payable pursuant to Section 6. Executive's
rights under all benefits plans and equity grants shall be determined in
accordance with the Company's plans, programs and grants, except as provided in
Exhibit A hereof with respect to the Options.
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(e) RELEASE. Notwithstanding anything in this Agreement to the
contrary, if the Executive (or his estate or legal representative) becomes
entitled to payments and/or benefits under Section 8(a), 8(b) or 8(c) hereof, as
a condition of receiving such payments and benefits, including, without
limitation, any amounts set forth on Exhibit A, beyond those then vested,
Executive (or his or his estates' legal representative) shall execute and agree
to be bound by a waiver and general release of any and all claims arising or
relating to Executive's employment with the Company and its affiliates and
termination thereof (other than claims for payments and benefits payable under
Sections 8(a), 8(b) and 8(c) hereof, as applicable, and rights of
indemnification under Section 11 hereof) in such form as required by the Company
(the "Release").
(f) EXCISE TAX In the event Executive becomes subject to the
excise tax under Section 4999 of the Code (the "Excise Tax") as a result of a
transaction involving the Company or the Company's securities and the net amount
retained by Executive after payment of all federal, state and local income and
payroll taxes (including, without limitation, the Excise Tax) on the amounts and
benefits to be received by Executive would be less than $100,000 more than if
the payments and benefits were reduced so they do not exceed 2.99 times
Executive's "Base Amount" (as defined in Section 280G of the Code), then the
payments and benefits shall be so reduced by reduction first of any cash amounts
payable to Executive and then by reduction in such other manner as specified by
the Executive.
9. NO MITIGATION; NO SET-OFF. In the event of any termination of
employment hereunder, Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts due Executive under
this Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.
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10. NON-COMPETITION; NON-DISCLOSURE OF PROPRIETARY INFORMATION,
SURRENDER OF RECORDS; INVENTIONS AND PATENTS. (a) Non-Competition (i) Executive
acknowledges that in the course of his employment with the Company he will
become familiar with the trade secrets and other confidential information of the
Company, that he will make contacts with, and be introduced to, customers
suppliers joint venturers and employees of the Company and that his services
will be of special, unique and extraordinary value to the Company. Therefore,
Executive agrees that, during the Employment Term and for one (1) year
thereafter (the "Noncompete Period"), he shall not directly or indirectly own,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business competing with the businesses of the Company or
any business that is under development or consideration by the Company and is
reasonably likely to develop during the Noncompete Period into, a material
portion of the Company's overall business within the United States and any other
geographical area in which the Company or any of its subsidiaries engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock or debt of any corporation which is
publicly traded so long as Executive has no active participation in the business
of such corporation.
(ii) During the Employment Term and for a period of one (1) year
thereafter, Executive shall not directly or indirectly (1) induce or attempt to
induce any employee of the Company to leave the employ of the Company, or in any
way interfere with the employee relationship between the Company and any
employee thereof, (2) hire any person who was an employee of the Company at any
time during the Employment Term (other than individuals who have not been
employed by the Company for a period of at least six (6) months prior to
employment by Executive directly or indirectly through another entity), or (3)
induce or attempt to induce any customer, supplier, licensee or other person
having a business relationship with the
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Company to cease doing business, or reduce the amount of business being done,
with the Company or interfere materially with the relationship between any such
customer, supplier, licensee or other person having a business relationship with
the Company.
(b) PROPRIETARY INFORMATION. Executive agrees that he shall not
use for his own purpose or for the benefit of any person or entity other than
the Company or its shareholders or affiliates, nor otherwise disclose to any
individual or entity at any time while he is employed by the Company or
thereafter any proprietary information of the Company unless such disclosure (1)
has been authorized by the Board, (2) is in the course of such individual's or
entity's employment or retention by the Company, or (3) is required by law, a
court of competent jurisdiction or a governmental or regulatory agency, provided
that for purposes of clause (3), the Executive gives written prompt notice to
the Company prior to disclosure. For purposes of this Agreement, the term
"proprietary information" shall include, but shall not be limited to (1) the
name or address of any customer, supplier or affiliate of the Company or any
information concerning the transactions or relations of any customer, supplier
or affiliate of the Company or any of its shareholders; (2) any information
concerning any product, technology or procedure employed by the Company, or
under development by or being tested by the Company; (3) any information
relating to the marketing methods, sales margins, discounts, rebates, supplier
incentives, or the like, the capital structure, or results of any business plan
of the Company; (4) any information contained in the Company's policies and
procedures or employees' manual; and (5) any inventions, innovations, trade
secrets or other items covered by Section 10(d) below. However, proprietary
information shall not include any information that is or becomes generally known
to the public other than through actions of Executive in violation of Sections
10(a), 10(b) or 10(c) hereof.
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(c) CONFIDENTIALITY AND SURRENDER OF RECORDS. Executive agrees
that, while he is employed by the Company or at any time thereafter, he shall
not give any "confidential records" (as hereinafter defined) to, or permit any
inspection or copying of confidential records by, any individual or entity other
than (1) in the course of such individual's or entity's employment or retention
by the Company or (2) as required by law, a court of competent jurisdiction, or
a governmental or regulatory agency, provided that in the case of clause (2),
the Executive gives prompt written notice to the Company prior to taking any
prohibited action, nor shall he retain any of the same following termination of
this employment, without the prior approval of the Board. For purposes hereof,
"confidential records" includes all correspondence, memoranda, files, manuals,
financial, operating or marketing records, magnetic tape, or electronic or other
media of any kind which may be in Executive's possession or under his control or
accessible to him which contain any proprietary information as defined in
Section 10(b) above. Executive agrees that upon termination of employment with
the Company, Executive will return to the Company any and all documents,
software, equipment, and all other materials in Executive's possession, custody
or control that are property of the Company, including, without limitation,
copies of all materials relating to Executive's employment, or obtained or
created in the course of Executive's employment with the Company.
(d) INVENTIONS AND PATENTS.
(i) Executive agrees that all ideas, methods, inventions,
discoveries, improvements or developments ("Inventions"), whether patentable or
unpatentable, that relate to Executive's duties and responsibilities hereunder
that are (x) made or conceived by Executive (solely or jointly with others)
during the Employment Term or (y) suggested by any work that Executive performs
in connection with the Company either while performing his duties and
responsibilities hereunder or on Executive's own time, shall belong exclusively
to the Company (or its designee), whether or
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not patent applications are filed thereon. Executive shall keep full and
complete written records (the "Records"), in the manner prescribed by the
Company, of all Inventions, and will promptly disclose all Inventions completely
and in writing to the Company. The Records shall be the sole and exclusive
property of the Company, and the Executive shall surrender them upon the
termination of the Employment Term, or upon request by the Company.
(ii) Executive shall assign to the Company the Inventions and all
patents that may issue thereon in any and all countries, whether during or
subsequent to Executive's employment with the Company, together with the right
to file, in Executive's name or in the name of the Company (or its designee),
applications for patents and equivalent rights (the "Applications"). Executive
shall, at any time during and subsequent to the termination of the Employment
Term, make such applications, sign such papers, take all rightful oaths, and
perform all acts as may be requested from time to time by the Company with
respect to the Inventions. Executive shall also execute assignments to the
Company (or its designee) of the Applications, and give the Company and its
attorneys all reasonable assistance (including the giving of testimony) to
obtain the Inventions for its benefit, all without additional compensation to
Executive from the Company, but entirely at the Company's expense.
(iii) Executive hereby waives any and all currently existing and
future monetary rights in and to the Inventions and all patents that may issue
thereon, including, without limitation, any rights that would otherwise accrue
to Executive's benefit by virtue of Executive being an employee of the Company.
(iv) Executive represents that he is not under any contractual or
other obligation that would prevent, limit or impair, in any way, the
performance of Executive's obligations under this Section 10(d).
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(e) NONDISPARAGEMENT. During the Employment Term and thereafter,
the Executive shall not disparage the Company, its subsidiaries or their
respective past or present officers, directors or employees, provided, that the
foregoing shall not apply to (i) non-public actions or statements taken or made
by the Executive while employed by the Company in good faith as fulfilling the
Executive's duties with the Company or otherwise at the request of the Company
or (ii) truthful statements made in compliance with legal process or
governmental inquiry.
(f) DEFINITION OF COMPANY. For purposes of this Section 10, the
term "Company" shall include the Company and all of its subsidiaries, ventures
or affiliates whether currently existing or hereafter formed.
(g) ENFORCEMENT. The parties hereto agree that the duration and
area for which the covenants set forth in Section 10 are to be effective are
reasonable. In the event that any court or arbitrator determines that the time
period or the area, or both of them, are unreasonable and that any of the
covenants are to that extent unenforceable, the parties hereto agree that such
covenants will remain in full force and effect, first, for the greatest time
period, and second, in the greatest geographical area that would not render them
unenforceable.
(h) EQUITABLE RELIEF. Executive agrees that damages are an
inadequate remedy for any breach of the covenants in this Section 10 and that
the Company will, in addition to its pursuing any potential remedies at law, be
entitled to equitable relief in the form of preliminary and permanent
injunctions without bond or other security upon any actual or threatened breach
of this Section 10.
11 INDEMNIFICATION. The Company shall indemnify and hold harmless
Executive as provided in its By-Laws for any action or inaction of Executive
while serving as an
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officer and director of the Company or, at the Company's request, as an officer
or director of any other entity or as a fiduciary of any benefit plan. The
Company shall cover the Executive under directors and officers liability
insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent as the Company covers
its other officers and directors.
12 LEGAL FEES.
(a) The Company shall pay the Executive's reasonable legal fees
and costs associated with entering into this Agreement at his counsel's standard
rates up to a maximum of $10,000.
(b) All disputes and controversies arising under or in connection
with this Agreement, other than issues with regard to Section 10 hereof, shall
be settled by arbitration conducted before one (1) arbitrator sitting in the
city in which the Company's executive offices are located, or such other
location agreed by the parties hereto, in accordance with the rules for
expedited resolution of commercial disputes of the American Arbitration
Association then in effect. The determination of the arbitrator shall be final
and binding on the parties. Judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction. The Company and Executive
shall each bear their own costs associated with any such arbitration, including
the fees and expenses of counsel, provided, however, that the prevailing party
may be awarded its fees and costs as appropriate in the arbitrator's discretion.
13 MISCELLANEOUS.
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(a) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without reference
to principles of conflict of laws.
(b) ENTIRE AGREEMENT/AMENDMENTS. This Agreement and the
instruments contemplated herein, contain the entire understanding of the parties
with respect to the employment of Executive by the Company from and after the
Commencement Date and supersedes any prior agreements between the Company and
Executive. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein and therein. This Agreement
may not be altered, modified, or amended except by written instrument signed by
the parties hereto.
(c) NO WAIVER. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any such waiver must be in writing and signed by Executive or an authorized
officer of the Company, as the case may be.
(d) ASSIGNMENT. This Agreement shall not be assignable by
Executive. This Agreement shall be assignable by the Company only to (i) a
subsidiary or an affiliate of the Company or (ii) an acquirer of all or
substantially all of the assets of the Company, provided that such acquirer
assumes all of the obligations hereunder of the Company in a writing delivered
to the Executive promptly after written demand by the Executive. Notwithstanding
anything in this Agreement to the contrary, any amounts paid or benefits
provided to Executive by a subsidiary or
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affiliate of the Company shall be credited against the Company's obligations to
the Executive hereunder, whether or not this Agreement has been assigned to any
such subsidiary or affiliate.
(e) REPRESENTATION. Executive represents that the Executive's
employment by the Company and the performance by the Executive of his
obligations under this Agreement do not, and shall not, breach any agreement,
including, but not limited to, any agreement that obligates him to keep in
confidence any trade secrets or confidential or proprietary information of his
or of any other party, to write or consult to any other party or to refrain from
competing, directly or indirectly, with the business of any other party. The
Executive shall not disclose to the Company, and the Company shall not request
that the Executive disclose, any trade secrets or confidential or proprietary
information of any other party.
(f) SUCCESSORS; BINDING AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees legatees and permitted assignees of the parties hereto.
(g) COMMUNICATIONS. For the purpose of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given (i) when faxed or delivered, or (ii) two
(2) business days after being mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth on the initial page of this Agreement, provided that all
notices to
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the Company shall be directed to the attention of the Secretary of the Company,
or to such other address as any party may have furnished to the other in writing
in accordance herewith. Notice of change of address shall be effective only upon
receipt.
(h) WITHHOLDING TAXES. The Company may withhold from any and all
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
(i) SURVIVORSHIP. The respective rights and obligations of the
parties hereunder, including without limitation Section 10 hereof, shall survive
any termination of Executive's employment to the extent necessary to the agreed
preservation of such rights and obligations.
(j) COUNTERPARTS. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(k) HEADINGS. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PF NET COMMUNICATIONS, INC.
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By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Chairman
/s/ Xxxxxx X. Xxxxx
------------------------------------------
Xxxxxx X. Xxxxx
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