AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement") is dated
as of December 22, 1997 but effective for all purposes as of October 31, 1997,
by Xxxxxxx X. Xxxxxxx ("Executive") and Advanced Communications Group, Inc., a
Delaware corporation ("Company") (collectively referred to as the "Parties").
The Company and Executive agree as follows:
1. Employment.
In consideration of the mutual covenants and agreements contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by Executive and the Company, the Company
employs Executive, and Executive accepts employment subject to the terms and
conditions of this Agreement. Unless the contract otherwise requires,
references to the Company in the last sentence of Section 4 and in Sections 5
and 7 of this Agreement include its subsidiaries and other affiliates.
2. Term.
This Agreement shall commence and become effective on the date hereof and end
on December 31, 2003. Such term of employment may be renewed for successive
periods of one year thereafter upon the mutual agreement of the Parties.
3. Compensation and Other Benefits.
3.1 As compensation for his services to the Company under this
Agreement, the Company shall pay to Executive during the term
of this Agreement a base salary ("Base Salary") of (i) prior
to the initial public offering of the common stock, $.0001
par value, of the Company, (the "Offering"), not less than
$200,000 per annum and (ii) after the Offering, not less than
$250,000 per annum, payable in equal semi-monthly
installments, subject only to such payroll and withholding
deductions as may be required by law and other deductions
applied generally to employees of the Company for any
employee benefit plans.
3.2 On December 1, 1997, Executive shall receive a cash bonus of
$50,000. In addition, for 1998 and for each calendar year
thereafter during the term of this Agreement, Executive shall
be eligible to receive a cash bonus of up to 50% of his Base
Salary ("Bonus"). No later than March 31 in each year
during the term of this Agreement, the Compensation Committee
of the Board of Directors of the Company ("Compensation
Committee") shall establish and communicate to Executive the
performance standard that the Company must achieve for the
current calendar year in order for Executive to receive his
entire Bonus for that year ("Target Performance Standard").
Prior to March 31 of the following year, the Compensation
Committee (i) shall determine the extent to which the Company
achieved the Target Performance Standard for the preceding
calendar year ("Achieved Performance Standard") and (ii)
shall cause the Company to pay to Executive the amount, if a
positive number, determined by multiplying half of
Executive's Base Salary for the preceding year by a fraction,
the numerator of which is the Actual Performance Standard for
that year and the denominator of which is the Target
Performance Standard for that year, provided that in no event
shall such fraction be greater than one ("Payment Fraction").
3.3 Executive will be entitled to three weeks of paid vacation
annually during the term of this Agreement.
3.4 Upon execution of this Agreement, Executive will be awarded
five hundred thousand (500,000) non-qualified stock options
("Signing Bonus Options") to acquire common stock, $.0001 par
value, of the Company ("Common Stock"). One hundred fifty
thousand (150,000) of these options (the "Three Month
Options") shall vest ninety (90) days after the date of grant
and shall be exercisable at a price of $2.50 per share. The
remaining three hundred fifty thousand options (the
"Remaining Options") shall vest in 331/3% increments,
commencing on the first anniversary of date of grant, and
shall be exercisable at a price per share equal to the price
to the public of the Common Stock in the Company's initial
underwritten public offering of its Common Stock (the
"Offering"). Accordingly, subject to Section 3.6, the Three
Month Options shall become fully vested ninety (90) days
after the date of grant and the Remaining Options shall
become fully vested three years after the date of grant. The
Signing Bonus Options shall have a term of ten years.
3.5 Prior to March 31 of each year during the term of this
Agreement, commencing in 1999, the Compensation Committee may
award Executive additional non-qualified stock options to
acquire Common Stock (the "Performance Options") in an amount
equal to the result obtained by multiplying 75,000 options by
the Payment Fraction for the preceding calendar year. Such
Performance Options shall be exercisable at the market price
of the Common Stock on the date of grant, as determined by
the
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Compensation Committee. The Performance Options shall have a
term of ten years and shall become exercisable in 331/3%
increments on each anniversary date of the grant thereof.
Accordingly, subject to Section 3.6, the Performance Options
shall become fully vested three years after the date of
grant.
3.6 Notwithstanding the provisions of Section 3.4 or 3.5, the
vesting of all Signing Bonus Options and Performance Options
(collectively, the "Options") will be accelerated in the
event of the termination of Executive's employment hereunder
pursuant to Sections 6.1(b),(d) or (f); and in the event of
any other termination, no Options shall vest after the date
of termination. The Signing Bonus Options and Performance
Options shall be granted pursuant to the Company's 1997 Stock
Awards Plan ("Stock Awards Plan"), a copy of which has
heretofore been delivered to Executive.
3.7 Executive shall receive such other benefits commensurate with
his level of employment as are available under the executive
employee benefits plans of the Company. For example, the
Executive shall be entitled to participate in the Company's
401K plan which the Company intends to establish.
3.8 The Company will cause the Executive to be appointed to the
board of directors of the Company (with a term expiring in
2000) concurrently with or prior to the consummation of the
Offering.
3.9 To ensure the Executive's accessibility, the Company shall
furnish him during the term of his Employment with a cellular
telephone that is to be utilized primarily for Company
business. The Company shall pay the fixed charges associated
with the telephone as well as all charges directly associated
with its use in connection with Company business.
4. Duties and Extent of Service.
Executive shall hold the offices of Chairman and Chief Executive Officer of the
Company. Executive agrees to perform the duties incidental to his positions, as
determined from time to time by the Board of Directors of the Company.
Executive shall devote such time, attention, and energy to the business of the
Company as are required to perform his duties and responsibilities. Executive
shall not after the date hereof and during the remaining term of this Agreement
be engaged, directly or indirectly, in any other business activity if pursued
for gain, profit, or other pecuniary advantage without the prior written
consent of the Board of Directors of the Company. In any event after the date
hereof, Executive shall not take any action inconsistent with Executive's
relationship and responsibilities as an employee of the
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Company, or take any action which is intended, or may be reasonably expected,
to harm the reputation, business, prospects, or operations of the Company.
5. Protection of Confidential Information and Executive Non-Competition.
5.1 Executive recognizes and acknowledges that he will have
access to certain confidential information and trade secrets
of the Company ("Confidential Information"). Such
Confidential Information includes, but is not limited to:
customer names; contracts; products purchased by customers;
production capabilities and processes; customer account and
credit data; referral sources; computer programs and
software; names and information relating to potential
acquisition candidates; financing sources and other business
relationships; information relating to confidential or secret
designs, processes, formulae, plans, devices, or materials of
the Company's business and marketing plans, confidential
information and trade secrets relating to the distribution
and marketing of the Company's products and services; patents
pending; confidential characteristics of the Company's
products and services; customer comments; troubleshooting
requirements; product and service development; market
development; manuals written by the Company; management,
accounting, and reporting systems, procedures, and programs;
off net contracts, leases, marketing agreements, sales
employee compensation information, plans, and programs;
marketing and financial analysis, plans, research, programs,
and related information and data; forms, agreements, and
legal documents; regulatory and supervisory reports;
correspondence; statements; corporate books and records; and
other similar information.
5.2 Executive acknowledges and agrees that the Confidential
Information constitutes valuable, special, and unique
property of the Company.
5.3 Executive will not, at any time during the term of this
Agreement or his employment with the Company, and for a
period of three years after the termination of this Agreement
or such employment, disclose any Confidential Information to
any person, firm, corporation, association, or other entity
for any reason or purpose.
5.4 The foregoing restrictions shall not apply to: (a) any
information in Executive's possession before its disclosure
to Executive by the Company; (b) information that is or shall
lawfully be published or become part of the general knowledge
through no act or omission of Executive; or (c) any
information which Executive is authorized to disclose in the
performance of his duties. The Confidential Information
disclosed to Executive under this Agreement is not within the
foregoing exceptions merely because such
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information is embraced by more general information in the
public domain or in Executive's possession, or merely because
portions thereof are in the public domain or in Executive's
possession.
5.5 To protect the confidentiality of the Confidential
Information, Executive further agrees that while employed by
the Company and for a period of one year (in the case of a
termination pursuant to Section 6.1(a), (b), (d), (e) or (f))
or three years (in the case of termination pursuant to
Section 6.1(c)) immediately after the termination of this
Agreement or his employment with the Company, he will not,
for himself, or on behalf of any other person, firm,
partnership, company, or corporation (i) generally compete in
any manner whatsoever with the Company or solicit, accept,
divert, or take away from the Company the business of any
person, company, or business; (ii) directly or indirectly
induce or attempt to influence any employee, officer,
director, consultant, agent, vendor or other entity related
to the Company to terminate his or her employment or
association in any manner whatsoever with the Company; or
(iii) engage in any commercial or technical activity
involving the development, formulation, manufacture,
production, distribution, marketing or sale of any product or
service that the Company designs, produces, manufactures,
distributes, markets or sells during the term of this
Agreement or Executive's employment with the Company. The
prescribed territory in which Executive shall not compete
with the Company as contemplated by this Section 5.5 shall
consist of all of those areas of the United States in which
the Company is doing business at the time of Executive's
termination of employment.
5.6 Executive understands and acknowledges that, due to the
unique nature of the products and services provided by the
Company and the need for senior officers to have a high
degree of technical knowledge concerning these products and
services, employment by the Company, including the special
training, knowledge, and confidential information that will
be acquired in the course of such employment, will give
Executive distinct and substantial advantages for potential
sales activities concerning such products and services.
Executive further understands and acknowledges that: because
of the definition of products and services covered by this
Agreement, the highly specialized nature of those products
and services, the limited size and number of business
entities in the business of developing and/or selling those
products and services, and the much more numerous
opportunities for Executive to work in his trade with respect
to products and services not covered by this Agreement, the
limitations as to time and geographic area contained in
Section 5.5 are reasonable and are not unduly onerous on
Executive. Executive therefore agrees that the limitations as
to time,
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geographic area, and scope of activity contained in Section
5.5 do not impose a greater restraint than is necessary to
protect the Confidential Information, goodwill, and other
business interests of the Company. Executive also agrees that
in light of the facts acknowledged in this Section 5.6, the
substantial investment of the Company in developing its
business and providing special training to Executive, and the
certain and substantial harm that the Company would suffer if
Executive were to engage in any of the activities described
in Section 5.5, the Company's need for the protection
afforded by Section 5.5 is greater than any hardship
Executive might experience by complying with its terms.
Executive also agrees that, if any provision or covenant set
forth in Section 5.5 is found to be invalid in part or whole,
the Company may elect, but shall not be required, to have
such provision reformed, whether as to time, geographic area,
scope of activity, or otherwise, as and to the extent
required for its validity under applicable law, and, as so
reformed, such provisions shall be enforceable.
5.7 Executive acknowledges that a violation or attempted
violation on his part of any provision in this Section 5 may
cause irreparable damage to the Company. Accordingly, in the
event of a breach or threatened breach by Executive of the
provisions of this Section 5, Executive agrees that the
Company shall be entitled as a matter of right to an
injunction, out of any court of competent jurisdiction,
restraining any violation or further violation of such
agreements by Executive or his agents, without showing any
evidence of actual monetary loss resulting from such breach,
including, but not limited to, restraining Executive from
using or disclosing, in whole or in part, such Confidential
Information or trade secrets; rendering any services to any
person, firm, corporation, or other entity to whom any of
such information may have been disclosed or is threatened to
be disclosed; and/or violating the non-competition and
non-solicitation provisions of this Agreement. Nothing herein
shall be construed as prohibiting the Company from pursuing
any other remedies available to it for such breach or
threatened breach, including the recovery of damages and
attorneys' fees from Executive.
6. Termination of Employment.
6.1 Executive's employment under this Agreement shall terminate
on the occurrence of any of the following events:
(a) End of Term. If the term of employment under the
Agreement or any renewal of this Agreement ends.
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(b) Death or Disability of Executive. If Executive dies
or becomes disabled such that he no longer is
reasonably able to perform his duties as
contemplated by this Agreement, the Company shall
pay to Executive, or to the estate of Executive if
he dies, (i) that part of his Base Salary which
would otherwise be payable to Executive through the
end of the month in which his death or disability
occurs, after giving effect to accrued sick leave
benefits and accrued vacation time, if any, and (ii)
any earned but unpaid Bonus or other compensation
for the prior year due to Executive. Upon such
payments, as well as applicable insurance benefits,
if any, all obligations of the Company to the
Executive or his estate shall be fully satisfied,
and this Agreement shall terminate. If Executive's
employment is terminated by his death, then the
Options theretofore granted to him prior to his
death shall immediately vest and be exercisable
within ninety (90) days therefrom by the executor or
administrator of Executive's estate or by the person
or persons to whom Executive's option rights shall
pass by will or the laws of descent and
distribution; provided, however, that in no event
may any option be exercised after the date of its
expiration under the terms of the relevant option
agreement.
(c) Resignation of Executive. If Executive resigns prior
to the end of the term of this Agreement, this
Agreement shall terminate immediately, and the
Company shall pay to Executive that part of his Base
Salary which would otherwise be payable to Executive
through the effective date of his resignation. Upon
such payment, all obligations in any manner
whatsoever of the Company to Executive shall be
fully satisfied.
(d) Change in Ownership, Management, or Executive's
Responsibilities. If there is a change in the
ownership or management of the Company after the
date hereof, and either of these changes
significantly alters Executive's job
responsibilities or compensation, Executive may
resign from his positions within 60 days of such a
change. If Executive resigns pursuant to this
Section 6.1(d), the Company (i) will continue to pay
Executive his Base Salary for a period of two years
after the initial date of any such change and (ii)
will pay to Executive any earned but unpaid Bonus or
other compensation for the prior year due to
Executive. Executive will not be entitled to receive
any Bonus for the current or any future year or
additional awards of Options if he resigns as
provided in this Section 6.1(d). For the period
after Executive's resignation during which Executive
will
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receive his Base Salary, Executive will not have any
authority to act on behalf of the Company.
(e) Termination by the Company "With Cause." If
Executive (i) violates any material provision of
this Agreement; (ii) fails to perform the services
required of him pursuant to this Agreement; (iii)
commits acts of fraud or dishonesty against the
Company; and/or (iv) is convicted of a crime that is
classified as a felony, the Company may terminate
the employment of Executive with cause. If Executive
is terminated "with cause," Executive shall not be
entitled to receive any further salary or benefits
under this Agreement other than payment for that
part of Executive's compensation that would
otherwise be payable to Executive through the last
date of his employment with the Company. Upon such
payment, all obligations of the Company to Executive
shall be fully satisfied, and this Agreement will
terminate. Executive shall not be entitled to
receive any Bonus, award of additional Options or
accrued vacation pay if his termination is "with
cause."
(f) Termination by the Company Without Cause. In the
event the Company terminates Executive's employment
for any reason other than as described in Sections
6.1(d) or (e), Executive shall be entitled (i) to
continue to receive his Base Salary for a period of
one year after such termination and (ii) to receive
any earned but unpaid Bonus or other compensation
for the prior year due to Executive. Executive shall
not be entitled to receive any Bonus or award of
additional Options in respect of the one-year period
in which he receives salary continuation.
6.2 Termination of this Agreement shall not relieve Executive of
any continuing obligations expressly provided in this
Agreement, including, without limitation, those set forth in
Section 5. Except as expressly provided herein with respect
to the acceleration of the vesting of Options under certain
limited circumstances, the exercise of all Options in the
event of a termination of employment will be governed by the
terms of the Stock Awards Plan and the related stock option
agreements entered into with Executive. All vested Options
must be exercised within 90 days after the termination of
Executive's employment.
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7. Return of Company Property.
7.1 All data, drawings, documents, contracts, computerized data,
information printouts, and tapes, tape recordings, documents,
data, accounting records, personnel files, computer
terminals, equipment, and other records and written material
prepared or compiled by Executive or furnished to Executive
while in the employ of the Company shall be the sole and
exclusive property of the Company, and none of such data,
drawings or other records and written material, or copies
thereof, shall be retained by Executive upon termination of
his employment. This Company property shall not be removed
from the Company premises without the Company's prior written
consent.
7.2 Upon termination of this Agreement or whenever requested by
the Company, Executive immediately shall deliver to the
Company all of the Company property or any of the Company's
documents in Executive's possession or under Executive's
control, including, but not limited to, all documents or
data, Confidential Information, accounting records, computer
terminals, data, discs, printouts and tapes, accounting
machines, and all office furniture and fixtures, supplies,
equipment, and other personal property placed in the office
by the Company. No copies of any such data shall be retained
by Executive.
8. Notices.
Any notice required or permitted to be given under this Agreement shall be in
writing and addressed to Executive at 00000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000, and to the Company, c/o Xxx X. Xxxxxxxxx, 0000 Xxxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000 (Telecopy No.: 713-599-0222), or to such other
address as either party shall designate by written notice to the other. Notices
may be sent by messenger, by telecopy or by registered or certified mail,
postage prepaid, addressed to the party or parties to be notified, with return
receipt requested. Notices sent by messenger or telecopy shall be deemed
received upon their actual receipt of the party to whom they are directed.
Notices sent by registered or certified mail shall be deemed received on the
third day following their deposit with the United States Postal Service.
9. Arbitration.
Except for actions by the Company seeking to enforce the provisions of Sections
5 and 7 of this Agreement, any dispute, controversy, or claim brought by the
Company or Executive
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concerning the subject matter contained in this Agreement, including, but not
limited to, Executive's employment, termination from, and/or affiliation with
the Company, shall be settled exclusively by binding arbitration in Houston,
Texas in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association. Any other dispute, controversy, or claim
brought by the Executive against the Company or any of its officers, directors,
shareholders, or employees, or by the Company against Executive (except for
actions by the Company seeking to enforce the provisions of Sections 5 and 7 of
this Agreement), shall likewise be settled exclusively by binding arbitration
in Houston, Texas in accordance with the rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction. In reaching his or her decision, the
arbitrator shall have no authority to change or modify any provision of this
Agreement. Any and all charges that may be made for the cost of the arbitration
and the fees and expenses of the arbitrator shall be borne equally by the
parties; attorneys' fees and witness expenses shall be borne by the party
incurring them.
10. Miscellaneous.
10.1 The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company. This
Agreement shall be binding upon the Executive and his agents,
heirs, executors, administrators and legal representatives.
The rights and obligations of Executive hereunder shall not
be assignable by Executive.
10.2 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
10.3 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which shall
constitute one instrument.
10.4 This Agreement contains the entire agreement of the parties
pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and
discussions, whether oral or written, and there are no other
warranties, representations, covenants or agreements among
the Company, the Executive and Xxx X. Xxxxxxxxx in connection
with the subject matter hereof.
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10.5 The waiver by the Company of a breach of any provision of
this Agreement by Executive shall not operate or be construed
as a waiver by the Company of any subsequent breach by
Executive.
10.6 If a court of competent jurisdiction shall adjudge to be
invalid any clause, sentence, subparagraph, paragraph or
section of this Agreement, such judgment or decree shall not
affect, impair, invalidate, or nullify the remainder of this
Agreement, but the effect thereof shall be confined to the
clause, sentence, subparagraph, paragraph, or section so
adjudged to be invalid.
The parties have executed this Agreement to be effective as of the day
and year first above written.
"COMPANY" "EXECUTIVE"
ADVANCED COMMUNICATIONS
GROUP, INC.
---------------------------------- ----------------------------------
By: Xxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxx
Its: Chairman and
Chief Executive Officer
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