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EXHIBIT 10.22
EMPLOYMENT NON-COMPETITION
AND PROPRIETY RIGHTS AGREEMENT
THIS EMPLOYMENT NON-COMPETITION AND PROPRIETY RIGHTS AGREEMENT (the
"AGREEMENT") is made as of this 15th day of September, 1998, by and between
UNIVERSAL ACCESS, INC., an Illinois corporation (the "COMPANY"), and Xx. Xxxxxx
Xxxxxx (the "EMPLOYEE").
RECITALS:
A. The Company is in the telecommunications business;
B. The Company desires to employ Employee and Employee desires to be
employed by the Company as its Vice President and Chief Operating Officer,
subject to the terms, conditions and covenants hereinafter set forth; and
C. As a condition of the Company employing Employee, Employee has
agreed not to divulge to the public the Company's confidential information, not
to solicit the Company's vendors, customers or employees and not to compete with
the Company, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions set forth herein, the Employee and the Company hereby
agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment. The Company hereby employs, engages and hires
Employee, and Employee hereby accepts employment, upon the terms and conditions
set forth in this Agreement. The Employee shall serve as Vice President and
Chief Operating Officer of the Company. The Employee shall have and fully
perform the duties and responsibilities as may be, from time to time, specified
in the Company's By-laws and assigned or delegated by the Board of Directors.
1.2 Activities and Duties During Employment. Employee represents and
warrants to the Company that Employee is free to accept employment with the
Company, and that Employee has no prior or other commitments or obligations of
any kind to anyone else which would hinder or interfere with the acceptance of
the obligations under this Agreement.
Employee accepts the employment described in Section 1 of this
Agreement and agrees to devote his full time and efforts to the faithful and
diligent performance of the services described therein, including the
performance of such other services and responsibilities as the Company may,
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from time to time, stipulate. Without limiting the generality of the foregoing,
Employee ordinarily shall devote not less than five days per week to his
employment, and shall be present on the Company premises or actively engaged in
service to or on behalf of the Company during normal business hours Monday
through Friday, excluding periods of vacation and sick leave. Notwithstanding
the foregoing, Employee may: (i) serve on the board of directors of other
entities or serve in any capacity with any civic, educational, professional or
charitable organization provided that such service does not materially interfere
or conflict with his duties hereunder; and (ii) make and manage personal
investments of his choice.
ARTICLE II
TERM
2.1 Term. The term of employment under this Agreement shall be three
(3) years, commencing on the date of the Agreement (such term of employment, as
it may be extended or terminated, is herein referred to as the "Employment
Term"), which Employment Term shall automatically renew for additional one (1)
year periods unless terminated by Employee or the Company by written notice not
less than six (6) months prior to expiration of the then-current term.
2.2 Termination. The Employment Term and employment of Employee may
be terminated as follows:
(a) By the Company immediately for "Cause." For the purpose of this
Agreement, "Cause" shall mean (i) conduct amounting to fraud,
embezzlement, or illegal misconduct in connection with Employee's
duties under this Agreement; (ii) the conviction of Employee by a
court of proper jurisdiction of (or his written, voluntary and
freely given confession to) a crime which constitutes a felony
(other than a traffic violation) or an indictment that results in
material injury to the Company's property, operation or
reputation; (iii) the willful failure of Employee to comply with
reasonable directions of the Board after (a) written notices
delivered to the Employee describing such willful failure and (b)
Employee has failed to cure or take substantial steps to cure
such willful failure after a reasonable time period as determined
by the Board in its reasonable discretion (not to be less than 30
days) unless the Employee, after discussion with counsel, in good
faith believes, that the directions of the Board (or its actions
or inactions in response to the Employee's written notice) are
illegal; or (iv) willful misconduct or a material default by the
Employee in the performance or observance of any promise or
undertaking of Employee under this Agreement, which willful
misconduct or default has a material adverse effect on the
Company and has continued for a period of ten (10) business days
after written notice thereof from the Company to the Employee;
provided, that if such willful misconduct or default is of a
nature that it or the injury therefrom cannot be reasonably cured
within such ten (10) day period (but is curable), then, if
Employee shall have commenced an attempt to cure such default
within such ten (10) day period, the period to cure the
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default shall be extended until the earlier of: (i) the date
which is forty-five (45) days after receipt of notice or (ii) the
date that Employee has failed to diligently continue his efforts
in a reasonable manner to cure his default.
(b) Automatically, without the action of either party, upon the death
of Employee.
(c) By either party upon the Total Disability of the Employee. The
Employee shall be considered to have a Total Disability for
purposes of this Agreement is he is unable by reason of accident
or illness to substantially perform his employment duties, and is
expected to be in such condition for periods totaling six (6)
months (whether or not consecutive) during any period of twelve
(12) months. The determination of whether a Total Disability has
occurred shall be based on the determination of a physician
mutually acceptable to the Company and the Employee. Nothing
herein shall limit the Employee's right to receive any payments
to which Employee may be entitled under any disability or
employee benefit plan of the Company or under any disability or
insurance policy or plan. During a period of Total Disability
prior to termination hereunder, Employee shall continue to
receive his full compensation (including base salary and bonus)
and benefits.
(d) By the Employee upon a Change of Control. For the purpose of this
Agreement, "change of Control" shall mean the occurrence of any
of the following:
1. the Company consummates a merger or consolidation which
results in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) less then fifty percent
(50%) of the total voting power represented by the voting
securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
2. a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of (in
one transaction or a series of transactions) all or
substantially all of the Company's assets is consummated;
3. Company consummates a plan of complete liquidation of the
Company or an agreement for the sale or disposition (in one
transaction or a series of transactions) by the Company of
all or substantially all of the Company's assets;
provided, however, that a public offering of the stock of the
Company irrespective of the amount of voting securities owned by
present Shareholders after such offering shall not be deemed to
constitute a Change of Control.
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(d) By the Employee upon ten (10) business days notice to the Company
for Good Reason, which notice shall state the reason for
termination. For the purpose of this Agreement, "Good Reason"
shall mean: (i) a demotion or reduction in the Employee's duties,
responsibilities or authority as Vice President and Chief
Operating Officer or without his written consent or the
assignment to the Employee of duties and responsibilities
inconsistent with his position as Vice President and Chief
Operating Officer of the Company without his written consent or
which diminishes his authority without his written consent
(together, the "Demotion Actions"), and the Demotion Actions are
not cured by the Company within thirty (30) days after written
notice of the Demotion Actions from the Employee; (ii) the
relocation of the Employee's principal place of employment, or
the principal offices for the Company to a location of more than
fifty (50) miles from the current location; or (iii) any material
failure by the Company to comply with the provisions of this
Employee Agreement, including but not limited to, failure to
timely pay any part of Employee's compensation (including salary
or bonus) or provide the benefits contemplated herein, and which
is not remedied by the Company within ten (10) business days
after receipt by the Company of written notice thereof from
Employee; provided, that if such default is of a nature that it
cannot be reasonably cured within ten (10) day period (but is
curable), then if the Company shall have commenced an attempt to
cure such default within such ten (10) day period, the period to
cure the default shall be extended until the earlier of the date
which is forty-five (45) days after receipt of notice or the
Company has failed to diligently continue its efforts in a
reasonable manner to cure its default.
(e) By the Employee without Good Reason, and therefore in breach of
this Agreement.
2.3 Cessation of Rights and Obligations: Survival of Certain
Provisions. On the date of expiration or earlier termination of the Employment
Term for any reason, all of the respective rights, duties, obligation and
covenants of the parties, as set forth herein, shall, except as specifically
provided herein to the contrary, cease and become of no further force or effect
as of the date of said termination, and shall only survive as expressly provided
for herein.
2.4 Cessation of Compensation. In lieu of any severance under any
severance plan that the Company may then have in effect, and subject to any
amounts owed by the Employee to the Company under any contract, agreement or
loan document entered into after the date hereof which relates solely to his
employment with the Company (including, but not limited to, loans made by the
Company to the Employee), the Company shall pay to the Employee, and the
Employee shall be entitled to receive, the following amounts within thirty (30)
days of the date of a termination of his employment:
(a) Voluntary Termination/Cause/Expiration of Term. Upon (i) Employee
terminating his employment without Good Reason as provided in
Section II. B.6., (ii) the expiration of the Employment Term
because either the Company or the Employee
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elects not extend the Employment Term, or (iii) a termination of
the Employment Term for Cause by the Company, the Employee shall
be entitled to receive solely through the date of termination and
expense reimbursement.
(b) Death or Total Disability. Upon the termination of the Employment
Term by reason of the death or Total Disability of the Employee,
the Employee (or, in the case of death, his estate) shall be
entitled to receive in a lump sum his base salary (which shall
include any of his unused vacation pay for the year of such
termination), unpaid bonus based on the portion of the calendar
year through the date the Employment Term ends hereunder using
the greater of the "Guaranteed Annual Bonus" (as defined under
Section III.A.2) or the annual bonus paid in the immediately
preceding calendar year and expense reimbursement through the
date of termination.
(c) Involuntary. Upon the termination of the Employment Term:
(1) by the Company for any reason other than Cause, Death or
Total Disability;
(2) by the Employee for Good Reason,
the Executive shall be entitled to receive in a lump sum the
balance of his base salary and the bonus using the greater of the
Guaranteed Annual Bonus or the annual bonus paid in the
immediately preceding calendar year for the remaining term of the
Employment Term, exclusive of any renewals of the then existing
term, plus prorated vacation pay and expense reimbursement
through the date of termination. The bonus payment to be made
hereunder shall be based on the bonus that would have been paid
through the remainder of the Employment Term based on the greater
of: (i) the Guaranteed Annual Bonus provided for under Section
III.A.2. hereof; or (ii) the annual bonus paid in the immediately
preceding calendar year. In addition, if permitted under the
Company's group health, life and disability insurance coverage
("Insurance Coverage"), Employee shall be entitled to
continuation of Employee's coverage thereunder (subject to such
changes in coverage as shall apply to Company's employees
generally) for the one (1) year period after the termination of
the Employment Term at the cost of the Company or if not so
permitted, payment by the Company of the premiums for group
health insurance coverage otherwise payable by Employee under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").
It shall be a condition to Employee's right to receive the
payments described above that Employee shall be in compliance
with all of the Employee's obligations which survive termination
hereof, including without limitation those arising under Article
IV hereof. The payments described above are intended to be in
lieu of all other payments to which Employee might otherwise be
entitled in respect of termination of Employee's employment
without Cause unless otherwise required by law or under other
agreements between the parties.
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2.5 No Offset/No Mitigation of Damages. Notwithstanding anything
herein to the contrary, Employee shall have no obligation to mitigate or seek
other employment with respect to the payments and benefits under this Agreement
and the Company's obligations under this Agreement shall not be subject to any
offset for any counterclaim, recoupment, defense or other right which the
Company may have (other than amounts if any loaned by the Company to the
Employee as a result of his employment with the Company).
2.6 Tax Gross-Up.
(a) The Company shall attempt to satisfy Section 280G(b)(5) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder to the extent such Code Section is
applicable. In the event that the shareholder approval
requirements under Section 280G(b)(5) of the code and the
regulations thereunder are not satisfied or any other amounts
(whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the company, any person whose
actions result in a change of ownership covered by Code Section
280G(b)(2) or any person affiliated with the company or such
person) as a result of a Change of Control, (collectively the
"Company Payments"), and such Company Payments will be subject to
the tax (the "Excise Tax") imposed by Section 4999 of the Code
(and any similar tax that may hereafter be imposed), the Company
shall have to pay to the Employee, an additional amount (the
"Gross-up Payment") such that the net amount retained by the
Employee, after deduction of any Excise Tax on the Company
Payments and any federal, state and local income tax and Excise
Tax upon the Gross-up Payment provided for by this Section
II.F.1., but before deduction for any federal, state or local
income tax on the Company Payments, shall be equal to the Company
Payments.
(b) Prior to any change in ownership (as defined under Section 280(G)
of the Code), the Employee and the Company shall select an
independent certified public accountant or qualified tax counsel
(the "Tax Professional") to determine whether any of the Company
Payments and Gross-up Payments (collectively, the "Total
Payments") will be subject to the Excise Tax and the amount of
such Excise Tax taking into account all provisions of the Code,
including but not limited to exemptions contained in Section
280(G) such as those for payments of reasonable compensation for
services actually rendered. In addition, the Tax Professional
shall determine the value of any non-cash benefits or any
deferred payment or benefit for purposes of determining the
amount, if any, of the Excise Tax. It the Employee and the
Company are unable to mutually determine appropriate Tax
Professional, the decision will be made in accordance with the
arbitration procedures in this Agreement.
(c) For purposes of determining the amount of the Gross-up Payment,
the Employee shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar
year in which the Gross-up Payment is to be made
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and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Employee's residence
for the calendar year in which the Company Payment is to be made,
net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes if paid
in such year.
(d) The Gross-up Payment shall be paid not later than the fifteenth
(15th) day following the final determination of the amount of the
Excise Tax by the Tax Professionals or under the arbitration
procedures.
(e) In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time the
Gross-up Payment is made, Employee shall repay to the Company at
the time that the amount of such reduction in Excise Tax is
finally determined (but, if previously paid to the taxing
authorities, not prior to the time the amount of such reduction
is refunded to Employee or otherwise realized as a benefit by
Employee) the portion of the Gross-up Payment that would not have
been paid if such Excise Tax had been applied to initially
calculating the Gross-up Payment, plus interest on the amount of
such repayment at the rate provided in Section 2375(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time the
Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of
the Gross-up Payment), the Company shall make an additional
Gross-up Payment and shall indemnify and hold Employee harmless
in respect of such excess (plus any interest and penalties
payable with respect to such excess) at the time that the amount
of such excess is finally determined.
The Gross-up Payment provided for above shall be paid on the 15th
day (or such earlier date as the Excise Tax becomes due and
payable to the taxing authorities) after it has been determined
that the Total Payments (or any other portion thereof) are
subject to the Excise Tax; provided, however, that if the amount
of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to
Employee on such day an estimate, as determined by the Tax
Professionals, of the minimum amount of such payments and shall
pay the remain of such payments (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code), as soon as
the amount thereof can be determined. In the event that the
amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan
by the Company to Employee, payable on the fifth day after demand
by the Company (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code). If more than one Gross-up
Payment is made, the amount of each Gross-up Payment shall be
computed so as not to duplicate any prior Gross-up Payment.
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Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-up Payment. Such notification
shall be given as soon as practicable but no later than ten (10)
business days after Employee is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. Employee shall
not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the company notifies
Employee in writing prior to the expiration of such period that
it desires to contest such claim, Employee shall:
(1) give the Company any information reasonably requested by the
Company relating to such claim;
2.7 Payment. All compensation shall be payable in intervals in
accordance with the general payroll payment practice of the Company, but not
less frequently than monthly. The compensation shall be subject to such
withholdings and deductions by the Company as are required by law.
2.8 Business Expenses.
(a) Reimbursement. The Company shall reimburse the Employee for all
reasonable, ordinary, and necessary business expenses incurred by
him in connection with the performance of his duties hereunder,
including, but not limited to, ordinary and necessary travel
expenses and entertainment expenses. The reimbursement of
business expenses will be governed by the policies for the
Company and the terms otherwise set forth herein.
(b) Accounting. The Employee shall provide the Company with an
accounting of his expenses, which accounting shall clearly
reflect which expenses were incurred for proper business purposes
in accordance with the policies adopted by the Company and as
such are reimbursable by the Company. The Employee shall provide
the Company with such other supporting documentation and other
substantiation of reimbursable expenses as will conform to
Internal Revenue Service or other requirements. All such
reimbursements shall be payable by the Company to the Employee
within a reasonable time after receipt by the Company of
appropriate documentation therefor.
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ARTICLE III
COMPENSATION AND BENEFITS
3.1 Compensation. During Employee's employment, the Company shall pay
Employee such salary and bonus as set forth on Exhibit A.
3.2 Payment. All compensation shall be payable in intervals in
accordance with the general payroll payment practice of the Company. The
compensation shall be subject to such withholdings and deductions by the Company
as are required by law.
3.3 Other Benefits. Employee shall be entitled to participate in any
retirement, pension, profit-sharing, stock option, health plan, incentive
compensation and welfare or any other benefit plan or plans of the Company which
may now or hereafter be in effect and for which the Employee is eligible.
Notwithstanding the forgoing, the Company shall be under no obligation to
institute or continue the existence of any such benefit plan.
ARTICLE IV
CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETE AGREEMENT
4.1 Non-Disclosure of Confidential Information. Employee hereby
acknowledges and agrees that the duties and services to be performed by Employee
under this Agreement are special and unique and that as of a result of the
employment hereunder, Employee will acquire, develop and use information of a
special and unique nature and value that is not generally known to the public or
to the Company's industry, including but not limited to, certain records, phone
locations, documentation, software programs, price lists, contract prices for
purchase and sale of telephone access and telephone services, equipment
configurations, business plans, ledgers and general information, employee
records, mailing lists, lists, accounts receivable and payable ledgers,
financial and other records of the Company or its affiliates, information
regarding other similar matters (all such information being hereinafter referred
to as "CONFIDENTIAL INFORMATION"). Employee further acknowledges and agrees that
the Confidential Information is of great value to the Company and its affiliates
and that the restrictions and agreements contained in this Agreement are
reasonably necessary to protect the Confidential Information and the goodwill of
the Company. Accordingly, Employee hereby agrees that:
(a) Employee will not, while employed by the Company or at any time
thereafter, directly or indirectly, except in connection with
Employee's performance of the duties under this Agreement, or as
otherwise authorized in writing by the Company for the benefit of
the Company, divulge to any person, firm, corporation, limited
liability company, or organization, other than the Company
(hereinafter referred to
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as "THIRD PARTIES"), or use or cause or authorize any Third
Parties to use, the Confidential Information, except as required
by law; and
(b) Upon the termination of Employee's employment for any reason
whatsoever, Employee shall deliver or cause to be delivered to
the Company any and all Confidential Information, including
drawings, notebooks, notes, records, keys, data and other
documents and materials belonging to the Company or its
affiliates which is in his possession or under his control
relating to the Company or its affiliates, regardless of the
medium upon which it is stored, and will deliver to the Company
upon such termination of employment any other property of the
Company or its affiliates which is in his possession or control.
4.2 Non-Solicitation Covenant. Employee hereby covenants and agrees
that while employed by the Company and for a period of one (1) year following
the termination of Employee's employment with the Company for any reason,
Employee shall not (i) directly or indirectly, contact, solicit, interfere with,
or endeavor to entice away from the Company or its Affiliates any person, firm,
corporation, limited liability company or other entity that was a vendor or
customer of the Company at any time while Employee was an employee of the
Company or its Affiliates or who is a "PROSPECTIVE VENDOR OR CUSTOMER" of the
Company, or (ii) induce, attempt to induce or hire any employee (or any person
who was an employee during the year preceding the date of any solicitation) of
the Company or its Affiliates to leave the employ of the Company or its
Affiliates, or in any way interfere with the relationship between any such
employee and the Company or its Affiliates. For purposes hereof, "PROSPECTIVE
VENDOR OR CUSTOMER" shall mean any person or entity which has been solicited for
business by Employee or any officer or other employee of the Company at any time
during Employee's employment.
4.3 Non-Competition Covenant. Employee acknowledges that the
covenants set forth in this Section 4.3 are reasonable in scope and essential to
the preservation of the Business of the Company (as defined herein). Employee
also acknowledges that the enforcement of the covenant set forth in this Section
4.3 will not preclude Employee from being gainfully employed in such manner and
to the extent as to provide a standard of living for himself, the members of his
family and the others dependent upon him of at least the level to which he and
they have become accustomed and may expect. In addition, Employee acknowledges
that the Company has obtained an advantage over its competitors as a result of
its name, location and reputation that is characterized by near permanent
relationships with vendors, customers, principals and other contacts which it
has developed at great expense. Furthermore, Employee acknowledges that
competition by him following the termination or expiration of his employment
would impair the operation of the Company beyond that which would arise from the
competition of an unrelated third party with similar skills. Employee hereby
agrees that he shall not, during his employment and for a period of one (1) year
after the end of his employment, directly or indirectly, engage in or become
directly or indirectly interested in any proprietorship, partnership, firm,
trust, company, limited liability company or other entity, other than the
Company (whether as owner, partner, trustee, beneficiary, stockholder, member,
officer, director, employee, independent contractor, agent, servant, consultant,
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lessor, lessee or otherwise) that competes with the Company in the Business of
the Company in the Restricted Territory (as defined herein), other than an
interest in a company listed on a recognized stock exchange in an amount which
does not exceed five percent (5%) of the outstanding stock of such corporation.
For purposes of this Agreement, (i) the term "BUSINESS OF THE COMPANY" shall
include all business activities and ventures related to providing high speed
bandwidth telecommunications in which the Company is engaged, plans to engage in
the next twelve months or has engaged in the prior twelve months, as determined
at any time during the employment of the Employee; and (ii) the term "RESTRICTED
TERRITORY" means the geographical area consisting of Xxxx County, Illinois.
4.4 Remedies.
(a) Injunctive Relief. Employee expressly acknowledges and agrees
that the Business of the Company is highly competitive and that a
violation of any of the provisions of Sections 4.1, 4.2 or 4.3
would cause immediate and irreparable harm, loss and damage to
the Company not adequately compensable by a monetary award.
Employee further acknowledges and agrees that the time periods
and territorial areas provided for herein are the minimum
necessary to adequately protect the Business of the Company, the
enjoyment of the Confidential Information and the goodwill of the
Company. Without limiting any of the other remedies available to
the Company at law or in equity, or the Company's right or
ability to collect money damages, Employee agrees that any actual
or threatened violation of any of the provisions of Sections 4.1,
4.2 or 4.3 may be immediately restrained or enjoined by any court
of competent jurisdiction, and that a temporary restraining order
or emergency, preliminary or final injunction may be issued in
any court of competent jurisdiction, without notice and without
bond. Notwithstanding anything to the contrary contained in this
Agreement, the provisions of this Section shall survive the
termination of Employee's employment.
(b) Enforcement. It is the desire of the parties that the provisions
of Sections 4.1, 4.2 or 4.3 be enforced to the fullest extent
permissible under the laws and public policies in each
jurisdiction in which enforcement might be sought. Accordingly,
if any particular portion of Sections 4.1, 4.2 or 4.3 shall ever
be adjudicated as invalid or unenforceable, or if the application
thereof to any party or circumstance shall be adjudicated to be
prohibited by or invalidated by such laws or public policies,
such section or sections shall be (i) deemed amended to delete
therefrom such portions so adjudicated or (ii) modified as
determined appropriate by such a court, such deletions or
modifications to apply only with respect to the operation of such
section or sections in the particular jurisdictions so
adjudicating on the parties and under the circumstances as to
which so adjudicated.
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(c) Legal Fees. The Employee shall reimburse the Company for all
reasonable costs and expenses, including, but not limited to
attorney's fees, incurred by the Company in connection with the
enforcement of the provisions set forth in this Agreement.
4.5 Company. All references to the Company in this Article 4 shall
include "Affiliates" of the Company, as that term is construed under Rule 405 of
the Securities Act of 1933, as amended.
ARTICLE V
MISCELLANEOUS
5.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given, delivered and
received (a) when delivered, if delivered personally, (b) four days after
mailing, when sent by registered or certified mail, return receipt requested and
postage prepaid, (c) one business day after delivery to a private courier
service, when delivered to a private courier service providing documented
overnight service, and (d) on the date of delivery if delivered by telecopy,
receipt confirmed, provided that a confirmation copy is sent on the next
business day by first class mail, postage prepaid, in each case addressed as
follows:
To Employee at his home address.
To Company at: Universal Access, Inc.
Xxxxx 000
0000 Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.:
Ph: 000-000-0000
Fax: 000-000-0000
With a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn.: Xxxxxxxx X. Xxxxxxxxx
Ph: (000) 000-0000
Fax: (000) 000-0000
Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.
5.2 Entire Agreement; Amendments, Etc. This Agreement contains the
entire agreement and understanding of the parties hereto, and supersedes all
prior agreements and understandings
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relating to the subject matter hereof. Except as provided in Section 4.4(b), no
modification, amendment, waiver or alteration of this Agreement or any provision
or term hereof shall in any event be effective unless the same shall be in
writing, executed by both parties hereto, and any waiver so given shall be
effective only in the specific instance and for the specific purpose for which
given.
5.3 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, and shall be enforceable by, the heirs, successors, legal
representatives and permitted assignees of Employee and the successors,
assignees and transferees of the Company. This Agreement or any right or
interest hereunder may not be assigned by Employee without the prior written
consent of the Company.
5.4 No Waiver. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder or pursuant hereto shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or pursuant thereto.
5.5 Severability. Wherever 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 shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. If any part of any
covenant or other provision in this Agreement is determined by a court of law to
be overly broad thereby making the covenant unenforceable, the parties hereto
agree, and it is their desire, that the court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant shall
be binding upon the parties as if originally set forth herein.
5.6 Compliance and Headings. Time is of the essence of this
Agreement. The headings in this Agreement are intended to be for convenience and
reference only, and shall not define or limit the scope, extent or intent or
otherwise affect the meaning of any portion hereof.
5.7 Governing Law. The parties agree that this Agreement shall be
governed by, interpreted and construed in accordance with the laws of the State
of Illinois, and the parties agree that any suit, action or proceeding with
respect to this Agreement shall be brought in the courts of Lake County in the
State of Illinois or in the U.S. District Court for the Northern District of
Illinois. The parties hereto hereby accept the exclusive jurisdiction of those
courts for the purpose of any such suit, action or proceeding. Venue for any
such action, in addition to any other venue permitted by statute, will be Lake
County, Illinois.
5.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
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5.9 Recitals. The Recitals set forth above are hereby incorporated in
and made a part of this Agreement by this reference.
5.10 Arbitration. Except as expressly contemplated by Article IV, any
dispute arising between the parties pursuant to this Agreement shall be
submitted to binding arbitration. Any arbitration proceeding involving any
provision hereof will be conducted in Chicago, Illinois. Except as otherwise
provided in this Agreement, all arbitration proceedings will be conducted in
accordance with the then current National Rules for the Resolution of Employment
Disputes of the American Arbitration Association. Three arbitrators shall
conduct the proceedings. The arbitrators shall allow such discovery as the
arbitrators determine appropriate under the circumstances. The arbitrators shall
determine which party, if either, prevailed and shall award the prevailing party
its costs and reasonable attorneys fees. The award and decision of the
arbitrators shall be conclusive and binding on all parties to this Agreement and
judgment on the award may be entered in any court of competent jurisdiction. The
parties acknowledge and agree that any arbitration award may be enforced against
either or both of them in a court of competent jurisdiction and each waives any
right to contest the validity or enforceability of such award. The parties
further agree to be bound by the provisions of any statute of limitations which
would be applicable in a court of law to the controversy or claim which is the
subject of any arbitration proceeding initiated under this Agreement. The
parties further agree that they are entitled in any arbitration proceeding to
the entry of an order, by a court of competent jurisdiction pursuant to an
opinion of the arbitrator, for specific performance of any of the requirements
of this Agreement. The parties further agree that the arbitrators shall provide
a statement of reasons explaining the basis of the decision rendered.
5.11 Indemnification/D&O Insurance. The Company shall indemnify and
hold Employee harmless to the fullest extent permitted by law and under the
bylaws of the Company as, to and from any and all costs, expenses (including
reasonable attorneys' fees, which shall be paid in advance by the Company,
subject to recoupment in accordance with applicable law) or damages incurred by
Employee as a result of any claim, suit, action or judgment arising out of the
activities of the Company or its Affiliates or the Employee's activities as an
employee, officer or director of the Company or any related company; provided,
however that the Employee shall not be entitled to indemnification hereunder to
the extent the damages are the result of actions or omissions which have been
finally adjudicated by a court of competent jurisdiction to constitute gross
negligence or wilful or intentional misconduct by the Employee. This provision
shall survive the termination of this Agreement. In addition, the Company shall
cover Employee under any directors' and officers' liability insurance which it
may maintain from time to time, both during and for six (6) years after the
Employment Term in the same amount and to the same extent as the Company covers
its other officers and directors, if no coverage is maintained by the Company,
it shall be under no obligation to maintain coverage for Employee.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered as of the day and year first above
written.
UNIVERSAL ACCESS, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Authorized Signatory
EMPLOYEE:
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
Home Address:
0000 Xxxxxxxx Xxxx
---------------------------------------
Xxxxxxxxxx, Xx 00000
---------------------------------------
---------------------------------------
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EXHIBIT A
UNIVERSAL ACCESS, INC./XXXXXX XXXXXX
A. Compensation.
1. During the Employment Term, the Company shall pay Employee
such salary and benefits as shall be agreed upon each year
between Employee and the Company. For the first year of the
Employment Term, the Company shall pay Employee a base salary
of $150,000 (One Hundred Fifty Thousand Dollars) per year.
Thereafter, the Company shall review salary at least annually,
and as a result of such review, can not reduce the Employee's
base salary without his consent. In no event shall any
increases to Employee's base salary be used as a substitute
for the Guaranteed Annual Bonus or used to offset the
Company's obligations to the Employee under this Agreement or
otherwise.
2. The Company will, in addition to Employee's base salary, pay
Employee an annual bonus with respect to each calendar year in
the Employment Term based upon two percent (2%) of the
Company's net operating income.
3. Other Benefits. Employee shall be entitled to participate in
any retirement, pensions, profit-sharing, stock option, health
plan, incentive compensation, vacation and welfare or any
other benefit plan or plans of the Company which may now or
hereafter be in effect and for which he is eligible or for
which all senior executives in general are eligible.
4. Vacation. Employee shall be entitled to up to four (4) weeks
of non-accruing paid vacation in each calendar year during the
Employment Term, provided, however, that the Employee's 1998
calendar year vacation shall be prorated for the portion of
the calendar year remaining after the date hereof.
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