Exhibit 10.61
AGREEMENT REGARDING CHANGE IN EMPLOYMENT STATUS
This Agreement Regarding Change In Employment Status ("Agreement") is
made this 12th day of July, 2001, by and between XXXX X. XX XXX, ("Employee")
and PAC-WEST TELECOMM, INC., its members, officers, directors, lawyers,
employers, successors, and assigns ("Employer").
RECITALS
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A Employee founded Employer and has served as an employee and officer
of Employer continuously since that time.
B. Employee and Employer have mutually agreed to a reduction in the
responsibilities and compensation of Employee as set forth in this Agreement
commencing as of August 1, 2001 ("Effective Date").
AGREEMENT
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1. Employee hereby resigns as a corporate officer of Employer as of the
Effective Date.
2. Until the Effective Date, the terms and conditions of Employee's
employment shall be the same as those under which Employee was employed at July
1, 2001.
3. From and after the Effective Date, Employee's employment shall be on
the following terms:
A. Employee's title shall be Vice President and Founder but Employee
shall not be a corporate officer.
B. Employee shall work at least one day per week for Employer on
average as mutually agreed but shall not be required to exceed 52 days over
twelve consecutive months in the absence of mutual agreement.
C. Employee shall be provided with an office at Employer's Coronado
Avenue campus and shall have access to all company facilities and equipment on
the same basis as existed prior to the date of this Agreement.
D. Employee's job responsibilities will be to (1) work on projects as
assigned by the CEO or President\COO; (2) serve as technical advisor to the soon
to be appointed Network Operations Vice President; (3) consult and make
suggestions on methods to improve Employer's processes and reduce its cost
structure; (4) provide technical and architectural support for Employer's
network and be available, within the limits specified herein, to support network
maintenance and restoration of service in the event of network failures; and (5)
participate in think tank activities in the areas of (a) product and service
development, (b) network design and development and (c) contract negotiations
with network suppliers.
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E. Employer shall provide Employee with mutually agreed upon support
staff for at least 60 days following the Effective Date.
4. Until the Effective Date, Employee shall be compensated on the same
basis as he has been compensated prior to the date of this Agreement. As of the
Effective Date Employee shall be compensated at the reduced rate of $5000.00 per
month payable in accordance with regular company payroll practices.
5. Employee shall be provided, at Employer's expense, with personal
and dependent health care, dental and vision benefits equivalent to coverage
existing prior to the date of this Agreement.
6. Employee shall continue to be provided with the use of the company
vehicle he is using at the date of this Agreement (or a comparable vehicle in
the event of replacement) on the same terms as such vehicle has been provided
prior to the date of this Agreement. Title to the vehicle shall be transferred
to Employee at no cost to Employee as of the Termination Date.
7. For a period of three years from the Effective Date, Employer
shall, at Employer's expense, provide Employee with the level of telephone,
cellular telephone and paging service provided to Employee by or through
Employer at all locations prior to the date of this Agreement.
8. Employer agrees to transfer title to Truck #31 to Employee for
$6,000.00, at Employee's request made at any time after the Effective Date.
9. On July 31, 2001, in addition to Employee's regular payroll check
for work performed prior to such date, Employer shall make a lump sum payment to
Employee equivalent to five months of Salary at Employee's rate of pay existing
prior to the date of this Agreement plus the full amount of Employee's target
bonus for the year as established prior to the date of this Agreement plus the
full value of Employee's accrued vacation at payroll rates and subject to
policies of Employer existing prior to the date of this Agreement.
10. Employer hereby agrees to indemnify and defend Employee, at
Employer's expense, against any existing or future lawsuits or other liabilities
related to the company or its activities concerning matters which occurred or
are alleged to have occurred during, or arose out of, Employee's service as an
officer or employee of Employer prior to the date of this Agreement and any such
matters which may occur or be alleged to occur during the term of this
Agreement.
11. As of the Termination Date of this Agreement, Employer shall cause
all existing and any future stock options granted to Employee by Employer, which
have not then vested to immediately become fully vested at the Termination Date.
12. Employer and Employee mutually desire that the change in Employee's
status take place in a positive manner so as to preserve the corporate good will
and reputation of the Employer, and the good will and reputation of the Employee
within the telecommunications and business communities as well as in the
geographic communities in which the company does business. All formal external
public announcements and all formal internal announcements with
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respect to the change in Employee's status and the circumstances pertaining
thereto shall be jointly approved by the parties. The parties shall use their
best efforts to speak positively about one another at all times and to refrain
from making unfounded disparaging comments regarding one another to the public
or to other employees of Employer. Nothing contained in this section shall
preclude Employee from the proper performance of his duties as a director of
Employer.
13. This Agreement is for a term commencing on its execution and ending
July 31, 2002, unless extended by a written document executed on behalf of both
Employer and Employee. This Agreement may be terminated prior to July 31, 2002,
by mutual agreement of the parties or, upon the giving of 30 days prior written
notice, by the unilateral action of either party in the event of a material
breach of this Agreement by the other party. The date of termination of this
agreement whether by expiration of its original or any extended term, by mutual
written agreement of the Parties, or by unilateral action due to breach, shall
be referred to as the "Termination Date".
14. Employer's obligations under Sections 6 (to transfer title) through
11, inclusive, of this Agreement shall survive the Termination Date regardless
of the cause of termination. Employer's obligations pursuant to Sections 4 and 5
of this Agreement shall cease as of the Termination Date if the cause of
termination is material breach by Employee or expiration of the full or any
extended term, but subject to applicable COBRA rights of Employee with respect
to Section 5 benefits.
15. EMPLOYER AND EMPLOYEE ACKNOWLEDGE THAT THEY HAVE EACH CONSIDERED
AND DECIDED AGAINST RETENTION OF INDEPENDENT LEGAL REPRESENTATION IN THE
NEGOTIATION AND PREPARATION OF THIS AGREEMENT. INSTEAD, THEY HAVE JOINTLY
REQUESTED XXXXXXXXX & XXXXXXXXX, A PROFESSIONAL CORPORATION TO REDUCE THEIR
PREVIOUSLY NEGOTIATED AGREEMENT TO WRITING. THIS DECISION HAS BEEN MADE
NOTWITHSTANDING THE FACT THAT XXXXXXXXX & XXXXXXXXX (A) HAS DISCLOSED THE FACT
OF ITS PRIOR LEGAL REPRESENTATION OF EACH PARTY TO THE OTHER, (B) HAS INDICATED
IT WILL NOT UNDERTAKE RESPONSIBILITY TO INDEPENDENTLY RAISE OR ADVISE WITH
RESPECT TO ADDITIONAL ISSUES TO BE NEGOTIATED IN THE COURSE OF REDUCING THE
PRIOR AGREEMENT OF THE PARTIES TO WRITING, (C) HAS INFORMED EACH PARTY THAT IT
WILL NOT BE ABLE TO REPRESENT EITHER PARTY IN THE EVENT OF A DISPUTE OVER THIS
AGREEMENT, (D) HAS ADVISED EACH PARTY THAT HAVING JOINT REPRESENTATION WILL
RESULT IN WAIVER OF THE ATTORNEY CLIENT PRIVILEGE SUCH PARTY WOULD HAVE IF HE OR
IT CONSULTED WITH SEPARATE COUNSEL, AND (E) HAS ADVISED EACH PARTY TO RETAIN
INDEPENDENT COUNSEL TO ASSIST WITH THE NEGOTIATION AND PREPARATION OF THIS
AGREEMENT AND TO ASSIST IN EVALUATING WHETHER TO HAVE XXXXXXXXX & XXXXXXXXX
PREPARE IT PURSUANT TO THEIR JOINT DIRECTION. BY SIGNING THIS AGREEMENT, EACH
PARTY, FOR THE BENEFIT OF THE OTHER PARTY, WAIVES ANY OBJECTION OR DEFENSE TO
THE PERFORMANCE AND ENFORCEABILITY OF THIS AGREEMENT ARISING OUT OF THEIR
DECISION NOT TO OBTAIN INDEPENDENT COUNSEL
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AND EACH PARTY KNOWINGLY CONSENTS, FOR THE BENEFIT OF XXXXXXXXX & XXXXXXXXX, TO
THE TERMS AND LIMITATIONS OF REPRESENTATION BY XXXXXXXXX & XXXXXXXXX AS
DESCRIBED HEREIN.
16. Any disputes between the parties to this Agreement shall be
resolved by binding arbitration before a single arbitrator appointed by the
American Arbitration Association ("AAA") pursuant to the AAA rules applicable to
arbitration of commercial disputes over employment agreements. The award of the
arbitrator shall be final and judgment may be entered upon it. The award of the
arbitrator may, at the discretion of the arbitrator, include an award of
attorney fees and costs to the prevailing party.
17. This Agreement constitutes the entire Agreement and understanding
among the parties and supersedes and pre-empts any prior understandings,
agreements, or representations by or among the parties, written or oral, which
may have related to the subject matters hereto in any way.
EMPLOYEE:
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/s/ Xxxx X. Xx Xxx
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XXXX X. XX XXX
EMPLOYER:
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PAC-WEST TELECOMM, INC, a
California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Chairman and CEO
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