EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered into
effective as of the 21st day of February, 2002 by and between CYPRESS
COMMUNICATIONS, INC., a Delaware corporation (the "COMPANY" or "CYPRESS"), and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a Georgia resident (the "EXECUTIVE" or "EMPLOYEE").
WHEREAS, Executive was materially involved in the U.S. RealTel, Inc.'s
("USRT") acquisition of Cypress and its subsequent merger into a wholly owned
subsidiary of USRT;
WHEREAS, the Company desires to employ the Executive and to obtain the
services of the Executive to act as the President and Chief Operating Officer of
Cypress, and the Executive desires to accept such employment and to perform such
services all pursuant to the terms and conditions hereof.
NOW, THEREFORE, for and in consideration of such employment of the
Executive by the Company, the above premises, the mutual covenants hereinafter
set forth, and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT. The Company hereby employs the Executive, and the
Executive hereby accepts such employment, pursuant and subject to the terms and
conditions hereinafter set forth.
2. SERVICES. At all times during the Term (as hereinafter defined), the
Executive shall perform for and on behalf of the Company the services and duties
as the President and Chief Operating Officer of Cypress, and such other specific
services and duties that may be assigned to him from time to time by the Board
of Directors of the Company ("BOARD") or by its' duly authorized designee(s)
(collectively, the "SERVICES"). At all times during the Term, the Executive
shall (i) devote at least eighty percent (80%) of his full and exclusive
business time, energy and skill to the business of the Company or USRT, and to
the fulfillment of his obligations under this Agreement, to the exclusion of all
other business activities, other than the management of his own passive
investments, (ii) during business hours, devote at least eighty percent (80%) of
his time, attention and best efforts to the performance of the Services, (iii)
to the best of his abilities, perform and discharge the Services faithfully,
diligently and in a timely manner, (iv) comply with all lawful requests,
instructions and regulations made by the Board, or its duly authorized
designee(s), (v) faithfully serve the Company and USRT to the best of his
ability and (vi) use his best efforts to promote the interests of the Company
and USRT.
3. COMPENSATION. During the Term of this Agreement, as compensation for
the proper and satisfactory performance of the Services to be performed by
Executive, the Company shall pay to Executive an annualized base salary of Two
Hundred Thousand Dollars ($200,000.00) (the "Base Salary"), payable in
installments twice per month, less deductions for withholding taxes and other
required statutory and authorized deductions.
3.1 USRT STOCK OPTIONS. Upon the execution of this Agreement,
Executive will be granted options under USRT's 1999 Employee Equity Incentive
Plan (the "Plan"), subject to the terms and conditions of the Plan, the
particular terms be evidenced by the award agreement between USRT and the
Executive which will include 900,000 shares of USRT common stock.
3.2 ADDITIONAL COMPENSATION.
(a) In addition to all other compensation, the Company will
pay to Executive a one-time amount equal to Twenty-Five Thousand
Dollars ($25,000.00) at such time as Cypress' unaudited financial
statements (as prepared in accordance with generally accepted
accounting principles and in a manner consistent with Company's
audited financial statements) show four consecutive quarterly periods
Positive Cash Flow, on a cumulative basis. Positive Cash Flow means
earnings of Cypress before interest, taxes, depreciation and
amortization.
(b) The Executive may also participate in any bonus,
incentive, profit-sharing, performance, discretionary pay or similar
agreement, plan, policy, program or arrangement (whether or not funded)
adopted by the Board.
4. EMPLOYMENT BENEFITS. In addition to the above-described
compensation, in consideration of the Services, during the Term, the Company
shall provide the Executive, and the Executive shall be entitled to, such fringe
benefits as may be approved by the Board and established by the Company from
time to time for the benefit of its senior executive employees generally,
including the following:
4.1 PAID VACATION. During the Term, the Executive
shall be entitled to receive twenty (20) paid vacation days and notice shall be
provided by the Executive to the Board, as required by Company policy.
4.2 INSURANCE BENEFITS. The Executive shall be provided such
major medical, life, worker's compensation, disability and other insurance
coverage as the Company or USRT may make available to its employees from time to
time, subject to applicable law and the respective terms and conditions of such
coverages, including, without limitation, applicable qualification and
eligibility requirements and limitations. Company shall also cover Executive
under its officers' and directors' liability coverage at such levels as the
Company or USRT may provide for its officers and directors from time to time.
Executive shall also enjoy such indemnification protections as provided under
the Company's By-Laws, as may be amended from time to time and as provided by
the laws of the state of the Company's Articles of Incorporation, currently the
State of Delaware.
4.3 BENEFIT PLANS. The Executive shall be entitled to
participate in those deferred compensation, retirement and employee welfare
benefit plans adopted or sponsored by the Company from time to time and made
available to the Company's employees, subject to
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applicable law and the respective terms and conditions thereof, including,
without limitation, applicable participation limitations.
4.4 EXPENSES. During the Term, the Company shall reimburse the
Executive for all reasonable, actual and direct expenses incurred by the
Executive in connection with his performance of the Services, provided such
expenses are properly characterized as being business expenses that are properly
tax deductible for the Company, and further provided that such expenses were
incurred by the Executive only in accordance with the policies and procedures
established by the Company from time to time, or otherwise were of the types
authorized in advance by the Board. The Executive shall comply with the
limitations and reporting requirements with respect to such expenses that the
Board may establish from time to time, including, without limitation, the timely
submission to the Company of written documentation of such expenses in a form
complying with the records required of the Company by the Internal Revenue
Service and appropriate state authorities for tax deductibility purposes.
4.5 HANDBOOK, POLICIES AND PROCEDURES. The Executive
acknowledges that the Company may promulgate employee handbooks, policies and
procedures from time to time, and the Executive agrees to adhere to the terms of
any and all such handbooks, policies and procedures. The Company reserves the
right, in its sole discretion, to modify, amend, discontinue or repeal any such
handbook, policy or procedure. To the extent any conflict in terms between this
Agreement and any such other handbooks, policies or procedures should arise, the
terms of this Agreement shall control.
4.6 MODIFICATIONS. To the extent permitted by applicable law,
the Company reserves the sole right and discretion to modify, amend, discontinue
or repeal, at any time, any of the benefits described in this Section 4 or
otherwise established by the Company.
5. WITHHOLDINGS. All compensation and other amounts, if any, payable to
the Executive pursuant to the terms and conditions of this Agreement are stated
in gross amounts and shall be subject to all applicable withholding taxes, other
normal payroll deductions and any other amounts required by any law, rule or
regulation to be withheld.
6. TERM. The initial term of the Executive's employment with the
Company hereunder (the "Term") shall commence as of the effective date hereof
and shall continue for a period of one (1) year. This Agreement will continue
thereafter from year to year, unless and until earlier terminated pursuant to,
and in accordance with, Section 7 or Section 8, hereof.
7. TERMINATION OF EMPLOYMENT.
7.1 DEATH. In the event of the death of the Executive at any
time during the Term, his employment hereunder shall automatically terminate,
which termination shall be effective as of the end of the day on the date on
which his death occurs.
7.2 DISABILITY. In the event of the Total Disability (as
hereinafter defined) of the Executive at any time during the Term, his
employment hereunder shall automatically
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terminate, which termination shall be effective as of the end of the day on the
date on which his Total Disability occurs for all purposes of compensation,
except that to the extent required to obtain the benefits of Company's
disability insurance, Executive shall continue to be treated as an employee on a
leave of absence. For purposes of this Agreement, the Executive shall be deemed
to have a "TOTAL DISABILITY" if he shall be unable, by reason of illness or
physical or mental incapacity or disability (from any cause or causes
whatsoever) (each a "DISABILITY"), to perform his essential job functions
required by this Agreement, whether with or without reasonable accommodation by
the Company, in substantially the manner and to the extent required by this
Agreement immediately prior to the occurrence of such Disability, for a period
of ninety (90) consecutive days, and such Total Disability shall be deemed to
have occurred on the first day immediately after such period. In the event of
any disagreement between the Executive and the Company about whether he has a
Disability or Total Disability, the question shall be submitted to an impartial
and reputable physician selected by the Company and the Executive. The
determination of the question of such Disability or Total Disability by such
physician shall be final and binding on the Executive and the Company for
purposes of this Agreement. The Company shall pay the reasonable fees and
expenses of such determining physician. For purposes of determining whether a
Disability continued for ninety (90) consecutive days, if the Executive shall
have suffered a Disability and shall have returned to work after the end of such
Disability, any Disability commencing within sixty (60) days after the
termination of the prior Disability shall be deemed to be a continuation of the
prior Disability, and the periods of all such Disabilities shall be added as if
they fell on consecutive days.
7.3 TERMINATION BY THE COMPANY FOR CAUSE. The Executive's
employment hereunder may be terminated by the Company for Cause (as hereinafter
defined) immediately upon written notice by the Company to Executive. For
purposes of this Agreement, "CAUSE" for termination shall mean only the
following:
(a) Executive's criminal indictment for a felony or
any crime involving moral turpitude;
(b) Acts of the Executive which constitute willful fraud on
the part of Executive in connection with his duties under this
Agreement, including, but not limited to, misappropriation or
embezzlement in the performance of his duties as an employee of the
Company; making false, fraudulent or inappropriate statements about the
Company, its employees or products; engaging in any unethical, immoral
or unprofessional conduct; falsifying or misrepresenting any
information to Company; or Executive's engaging in conduct materially
injurious to the Company and in violation of any covenant, promise,
representation or warranty of this Agreement or any fiduciary or other
obligation owed by the Executive to the Company, including, without
limitation, the obligation to refrain from engaging in the activities
prohibited by Sections 8 and 9 hereof; or
(c) Gross misconduct, including, but not limited to, the
willful failure of the Executive either to (i) continue to obey lawful
written instructions of the Board (that do not involve matters which,
if obeyed by the Executive, would permit the Executive to terminate his
employment for "Good Reason," as defined in subsection 7.5 hereof)
after
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receiving thirty (30) days notice in writing of the Employee's failure
to do so and the Company's intention to terminate the Executive if
such failure is not corrected, or (ii) correct any conduct of the
Executive which constitutes a material breach of this Agreement after
receiving thirty (30) days notice in writing of the Executive's
failure to do so and the Company's intention to terminate Executive if
such failure is not corrected. This cure right may be exercised on
only one occasion during each calendar year of the Term.
7.4 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Executive's
employment hereunder may be terminated by the Company for any reason, or for no
reason whatsoever, by giving notice of such termination (the "Company's Notice")
to the Executive, which termination shall be effective as of the end of the day
on the later of (i) the thirtieth (30th) day after the Executive's receipt of
the Company's Notice, or (ii) such later date, if any, specified by the Company
therein, subject to the last sentence of this subsection 7.4. Company's failure
to extend the term of this Agreement at the end of the term hereof shall
constitute termination under this subsection 7.4 without the need for any notice
on the part of the Company. Until the effective date of such termination
(without giving effect to the last sentence of this subsection 7.4), the
Executive shall be obligated to continue to perform the Services at all times;
provided, however, the Company reserves the right, exercisable by giving notice
to the Executive (within the Company's Notice or otherwise), to require the
Executive to cease performing the Services at any time on or after delivery of
the Company's Notice to the Executive. In the event that, prior to the effective
date of termination set forth above in this subsection 7.4, the Executive ceases
performing the Services, other than at the Company's request (as described
above), then such termination shall be deemed effective as of the end of the day
on the date that the Executive ceases performing the Services.
7.5 TERMINATION BY THE EXECUTIVE. The Executive's employment
hereunder may be terminated by the Executive for any reason, or for no reason
whatsoever, by giving notice of such termination (the "Executive's Notice") to
the Company, which termination shall be effective as of the end of the day on
the later of (i) the thirtieth (30th) day after the Company's receipt of the
Executive's Notice, or (ii) such later date, if any, specified by the Executive
therein, unless such effective date is accelerated (1) by the Company as
provided below or (2) pursuant to the third sentence of this subsection 7.5.
Until the effective date of such termination (without giving effect to the third
sentence of this subsection 7.5), the Executive shall be obligated to continue
to perform the Services at all times; provided, however, the Company reserves
the right, exercisable by giving notice to the Executive, to accelerate the
effective date of termination pursuant to this subsection 7.5 to any date on or
after the thirtieth (30th) day after the Company's receipt of the Executive's
Notice. In the event that, prior to the effective date of termination set forth
above in this subsection 7.5, the Executive ceases performing the Services,
other than as a result of the Company's acceleration of the effective date (as
described above), then such termination shall be deemed effective as of the end
of the day on the date that the Executive ceases performing the Services. If the
Executive terminates his employment, as provided above and states in his notice
of termination Good Reason for the termination, then such termination shall be
effective immediately. For purposes hereof, "GOOD REASON" shall mean the
occurrence of any of the following (i) breach of this Agreement by the Company;
(ii)
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insolvency of the Company; (iii) a reduction by the Company in the
Executive's annual base salary as then in effect; (iv) a new Company requirement
is instituted which requires the Executive to change his work location to a
location greater than fifty (50) miles from Executive's work location
immediately prior to the institution of the requirement; but not including a
requirement that the Executive travel on the Company's business to an extent
substantially consistent with his present business travel obligations, or (v)
The failure by the Company, without the Executive's consent, to pay to the
Executive any portion of his compensation, or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven (7) days of the date such
compensation is due, unless such failure to pay is reasonably in dispute by the
Company.
The Executive's right to terminate his employment pursuant to this
subsection shall not be affected by his incapacity due to physical or mental
illness. The Executive's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any circumstance constituting Good Reason
hereunder.
7.6 EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Upon the effective date of termination of the
Executive's employment hereunder for any reason, the Executive shall be
deemed to have automatically resigned from any and all directorships,
offices or other positions (fiduciary or otherwise) that the Executive
may then hold in connection with the Company or in connection with any
employee welfare benefit plan sponsored by the Company, which
resignation shall be deemed effective without the requirement that a
written resignation be delivered by the Executive. Further, upon the
effective date of termination of the Executive's employment hereunder
for any reason, all debts, obligations and liabilities (whether or not
contingent) of the Executive to the Company shall be immediately due
and payable to the Company and may be offset, at the Company's sole
option, against any amounts due and owing by the Company to the
Executive. From and after the effective date of the termination of the
Executive's employment hereunder for any reason, the Executive shall
not at any time represent himself still to be connected, or to have any
connection, with the Company.
(b) If the Company terminates the Executive's
employment without Cause pursuant to subsections 7.1, 7.2 or 7.4 or if
the Executive terminates his employment for Good Reason pursuant to
subsection 7.5 hereof, the Company (i) shall continue to pay to the
Executive the Executive's then current salary with the Company, in
accordance with the Company's payroll policies, for a period of twelve
(12) months following the date of termination, (ii) shall provide
Executive with benefits coverage, including, without limitation,
coverage under medical, dental and vision, but excluding disability
plans for a period of twelve (12) months following the date of
termination and (iii) shall accelerate Executive's stock options, if
any, subject to any deductions or offsets described in this Agreement.
Except as provided in the immediately preceding sentence, from and
after the effective date of the termination of the Executive's
employment hereunder, the Company shall not have any further
obligations under this Agreement or
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otherwise with respect to the Executive or his employment hereunder,
except for the Company's obligation to pay to the Executive (or the
estate of the Executive in the event of termination pursuant to
subsection 7.1 hereof) all earned and accrued but unpaid salary through
the effective date of termination of the Executive's employment
hereunder, subject to any deductions or offsets described in this
Agreement.
(c) Notwithstanding the foregoing, the Company shall
continue to have all rights available to the Company under this
Agreement, including, without limitation, all rights under Sections 8,
9, 10 and 11 hereof, at law or in equity, and the provisions of this
Agreement shall survive the termination of the Executive's employment
hereunder to the extent required to give full effect to the covenants
and agreements contained herein.
8. TERMINATION UPON A CHANGE IN CONTROL.
8.1 CHANGE OF CONTROL. For purposes of this Agreement, a
"Change in Control"' shall mean (a) the time that any person and all other
persons who constitute a group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), have acquired
within any 12 month period (i) direct or indirect beneficial ownership (within
the meaning of Section 13(d)(3) under the Exchange Act) of 51% or more of USRT's
or the Company's outstanding securities or (ii) assets of the Company or USRT
having a fair market value in excess of one-third of the Company's or USRT's
total assets, as applicable (b) the first day on which a majority of the members
of the USRT's or the Company's Board are not continuing directors, or (c) upon
the occurrence of a merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation of the Company or USRT, as a result of
which the stockholders of the Company or USRT receive cash, stock or other
property in exchange for their shares of the Company's or USRT's stock (but not
a public offering of stock by the Company or USRT), and USRT is not the
surviving entity. However, these Change in Control provisions shall not become
effective if a technical Change in Control is met purely due to the Company's or
USRT's financing activities.
8.2 EFFECT OF CHANGE IN CONTROL. In the event of Employee's
termination of employment coincident with a Change in Control, whether at
Employee's direction or otherwise, Employee shall immediately be paid all
accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of the Company or USRT in which
Employee is a participant to the full extent of Employee's rights under such
plans (including accelerated vesting of any awards granted to Employee under the
Company's or USRT's stock incentive plans, which shall provide for accelerated
vesting), accrued vacation pay and any appropriate business expenses incurred by
Employee in connection with his duties hereunder, all to the date of
termination. The Company or USRT, as applicable, (i) shall continue to pay to
the Executive the Executive's then current salary with the Company, in
accordance with the Company's payroll policies, for a period of twelve (12)
months following the date of termination, (ii) shall provide Executive with
benefits coverage, including, without limitation, coverage under medical, dental
and vision, but excluding disability plans for a period of twelve (12) months
following the date
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of termination and (iii) shall accelerate one hundred percent (100%) of the
Executive's stock options, if any, subject to any deductions or offsets
described in this Agreement. If Executive's employment is terminated prior to
the date on which a Change in Control event occurs, and such termination was at
the request of a third party who has taken steps to effect a Change in Control
event or was otherwise caused by the Change in Control event, then for all
purposes of this Agreement, a Change in Control event shall be deemed to have
occurred prior to such termination.
9. PROPRIETARY INFORMATION.
9.1 NONDISCLOSURE.
(a) The Executive acknowledges that, in performing the
Services, the Executive will be making use of, acquiring and adding to the
confidential and proprietary information of the Company and/or those persons or
entities directly or indirectly controlling or controlled by, or under direct or
indirect common control with, the Company (each an "AFFILIATE" and collectively,
the "AFFILIATES"), which (i) is of a special and unique nature and value, (ii)
is not public information or is not generally known or available to the
Company's and/or the Affiliates' competitors, (iii) is known only by the Company
and/or the Affiliates and those of their respective Executives, independent
contractors, consultants, suppliers, customers or agents to whom such data and
information must be confided in order to apply it to the uses intended, and (iv)
relates to matters such as, but not limited to, the Company's and the
Affiliates' respective methods of operation, internal structure, financial
affairs, programs, software, equipment and techniques, existing and contemplated
facilities, products and services, know-how, inventions, systems, devices
(whether or not patentable), methods, ideas, procedures, manuals, confidential
studies and reports, lists of suppliers and customers and prospective suppliers
and customers, financial information and practices, plans, pricing, selling
techniques, sales and marketing programs and methods, names, addresses and
telephone numbers of the Company's and/or the Affiliates' suppliers and
customers, credit and financial data of the Company's and/or the Affiliates'
suppliers and customers, particular business requirements of the Company's
and/or the Affiliates' suppliers and customers, special methods and processes
involved in designing, producing and selling the Company's and/or the
Affiliates' products and services, any other information related to the
Company's and/or the Affiliates' suppliers and customers that could be used as a
competitive advantage by the Company's and/or the Affiliates' competitors if
revealed or disclosed to such competitors or to persons or entities revealing or
disclosing same to such competitors, and all "trade secrets" (as that term is
defined in O.C.G.A. ss. 10- 1-76 1, as amended) of the Company and/or the
Affiliates, all of which, together with any and all extracts, summaries and
photo, electronic or other copies or reproductions, in whole or in part thereof,
stored in whatever medium (including electronic or magnetic), shall be deemed
the Company's and/or the Affiliates' exclusive property, as applicable, and
shall be deemed to be "CONFIDENTIAL INFORMATION." The Executive acknowledges
that the Confidential Information has been and will continue to be of central
importance to the business of the Company and the Affiliates, and that
disclosure of it to, or its use by, others could cause substantial loss to the
Company and the Affiliates. In consideration of the Executive's employment
hereunder, the Executive agrees that, at all times during the Term, and (i) with
respect to all Confidential Information constituting "trade secrets", for so
long thereafter as such Confidential Information continues to constitute "trade
secrets" (or for the period beginning on the last day of the Term and ending two
(2) years thereafter, whichever is longer); and (ii) with respect to all
Confidential Information not constituting
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"trade secrets", for the period beginning on the last day of the Term and ending
two (2) years thereafter, the Executive shall not, directly or indirectly, use,
divulge or disclose to any person or entity, other than those persons or
entities employed or engaged by the Company who or which are authorized to
receive such information, any of such Confidential Information, and the
Executive shall hold all of the Confidential Information confidential and
inviolate and will not use such Confidential Information against the best
interests of the Company or any of the Affiliates.
9.2 RETURN OF RECORDS. The Executive acknowledges and agrees
that all supplier, customer, employee and contractor files, contracts,
agreements, financial books, records, instruments and documents, supplier and
customer lists, memoranda, data, reports, sales documentation and literature,
software, rolodexes, telephone and address books, letters, research, listings,
and any other instruments, records or documents relating or pertaining to (i)
the customers or suppliers of the Company and/or any of the Affiliates serviced
by or serving the Company, any of the Affiliates or the Executive, (ii) the
duties performed hereunder by the Executive, or (iii) the business of the
Company and/or any of the Affiliates (collectively, the "RECORDS") shall at all
times be and remain the exclusive property of the Company and/or the Affiliates,
as applicable. Upon termination of the Executive's employment hereunder for any
reason whatsoever, the Executive shall promptly return to the Company all
Records (whether furnished by the Company or any of the Affiliates or prepared
by the Executive), and the Executive shall neither make nor retain, nor allow
any third party to make or retain, any photo, electronic or other copy or other
reproduction of any of such Records after such termination.
9.3 ASSIGNMENT OF INVENTIONS AND WORKS MADE FOR HIRE. The
Executive hereby irrevocably assigns and transfers, and agrees to assign and
transfer, to the Company all of the Executive's night, title and interest in and
to any and all Inventions and Works Made for Hire (each as hereinafter defined)
made, generated or conceived by the Executive at any time during the Term,
whether alone or with the assistance of others, whether or not made, generated
or conceived during normal business hours, and whether or not his employment
with the Company is hereafter terminated for any reason whatsoever. For purposes
of this Agreement, "INVENTIONS" shall mean any and all discoveries,
improvements, innovations, ideas, formulae, devices, systems, software programs,
processes, products and any other creations similar thereto. For purposes of
this Agreement, "WORKS MADE FOR HIRE" shall mean any and all "work made for
hire", as that term is defined in ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Copyright
Law, Title 17 of the United States Code, as amended. Upon the Company's request,
the Executive will promptly execute and sign any and all applications,
assignments, and other documents, and will promptly render all assistance, which
may be reasonably necessary for the Company to obtain patent, copyright or any
other form of intellectual property protection.
10. PROTECTIVE COVENANTS. The Executive acknowledges that his
specialized skills, abilities and contacts are important to the success of the
Company, and agrees that he shall faithfully and strictly adhere to the
following covenants:
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10.1 NONCOMPETITION. The Executive acknowledges that by reason
of the character and nature of the Company's business activities and operations,
and further by reason of the scope of the territory in which the Executive will
perform the Services, in order to protect the Company's legitimate business
interests it is necessary for the Executive to agree not to engage in certain
specified activities in such territory at any time during the Term and for a
period of time thereafter. Therefore, at all times during the Term, and for a
period of time in which any termination fee is paid to Executive (i.e., twelve
(12) months in the event that the termination fee is paid pursuant to Sections 7
or 8 hereof), the Executive will not, directly or indirectly, within the
Territory (as defined below), (a) for himself, (b) as a consultant, manager,
supervisor, employee or owner of a Competing Business (as defined below), or (c)
as an independent contractor for a Competing Business, engage in any business in
which the Executive provides services which are the same as or substantially
similar to the Services. "COMPETING BUSINESS" shall mean any person, business or
entity who or which sells, markets or distributes products and/or sells,
furnishes or provides services substantially the same as those sold, marketed,
distributed, furnished or supplied by the Company during the Term. "TERRITORY"
shall mean the geographic area encompassed within a fifty (50) mile radius of
Atlanta, Georgia. The Executive agrees that he and the Company may amend the
definition of "Territory" from and after the date hereof to reflect any
significant contraction or expansion of the geographical area in which he
performs the Services.
10.2 NONSOLICITATION OF CUSTOMERS. The Executive agrees that
all customers whose relationships are managed by the Executive, or with whom the
Executive has contact during the Term, are the Company's customers, and that all
fees and revenues produced from such relationships or contacts are the exclusive
property of the Company. The Executive hereby waives and releases all claims and
rights of ownership to such customer relationships, fees and revenues.
Furthermore, at all times during the Term and for a period of two (2) years
thereafter, the Executive will not directly or indirectly, on his own behalf or
on behalf of any person, firm, partnership, association, corporation, business
organization, entity or enterprise, solicit, call upon or attempt to solicit or
call upon, any customer or prospective customer of the Company, or any
representative of any customer or prospective customer of the Company, with a
view to the sale or provision of any product or service competitive or
potentially competitive with any product or service sold or provided, or under
development, by the Company at any time during the shorter in duration of the
Term and the last two (2) years thereof; provided that the restrictions set
forth in this sentence shall apply only to customers or prospective customers of
the Company, or representatives of customers or prospective customers of the
Company, with which the Executive had material contact at any time during the
shorter in duration of the Term and the last two (2) years thereof. "Material
contact" exists between Executive and each of the Company's existing customers:
(i) with whom Executive actually dealt; or (ii) whose dealings with the Company
were handled, coordinated or supervised by Executive.
10.3 NONSOLICITATION OF EXECUTIVES AND INDEPENDENT
CONTRACTORS. At all times during the Term and for a period of two (2) years
thereafter, the Executive will not directly or indirectly solicit or encourage
any employee or independent contractor of the Company to leave such employment
or engagement with the Company, or directly or indirectly employ or
10
engage in any capacity any former employee or independent contractor of the
Company, unless such former employee or independent contractor of the Company
shall have ceased to be so employed or engaged by the Company for a period of at
least one (1) year immediately prior to such action by the Executive.
Notwithstanding the provisions of this Section 10, if the Company
terminates the Executive's employment without Cause pursuant to subsection 7.4
hereof or if the Executive terminates with Good Reason pursuant to subsection
7.5 hereof, the obligations of the Executive under subsections 9.1, 9.2 and 9.3
shall expire ninety (90) days after the termination of Executive's employment
without cause.
11. CONSTRUCTION. The Executive acknowledges and agrees that the
covenants and agreements contained in Sections 9 and 10 of this Agreement are of
the essence of this Agreement, and that each of such covenants and agreements is
reasonable and necessary to protect and preserve the interests and business of
the Company. The Executive further acknowledges and agrees that: (i) each of
such covenants and agreements is separate, distinct and severable, not only from
the other of such covenants and agreements, but also from the remaining
provisions of this Agreement, (ii) the unenforceability of any such covenants or
agreements shall not affect the validity or enforceability of any other such
covenants or agreements or any other provision or provisions of this Agreement,
and (iii) in the event any court of competent jurisdiction or arbitrator, as
applicable, determines, rules or holds that any such covenant or agreement
hereof is overly broad or against the public policy of the state, then said
court or arbitrator, as the case may be, is specifically authorized to reform
and narrow said covenant or agreement to the extent necessary to make said
reformed and narrowed covenant or agreement valid and enforceable.
12. REMEDIES. It is specifically understood and agreed that (i) any
breach of any of the provisions of Section 9 or 10 of this Agreement is likely
to result in irreparable injury to the Company, (ii) the remedy at law alone
will be an inadequate remedy for such breach, and (iii) in addition to any other
remedy it may have for such breach, the Company shall be entitled to enforce the
specific performance of this Agreement by the Executive and to seek both
temporary and permanent injunctive relief (to the extent permitted by law)
without the necessity of proving actual damages. Notwithstanding any other
provision of this Agreement to the contrary, any and all obligations of the
Company to pay any compensation to the Executive for any reason shall cease and
terminate upon the material breach by the Executive of any of the obligations of
the Executive under Sections 8 or 9 of this Agreement.
13. EXISTING RESTRICTIVE COVENANTS AND INDEMNIFICATION. The Executive
represents and warrants that (i) the Executive is not a party to or subject to
any outstanding contract, agreement or order whereby the Executive is prohibited
from entering into this Agreement, or any outstanding restrictive covenant or
noncompetition agreement which would interfere with or prevent the Executive's
employment hereunder as contemplated by this Agreement; (ii) the Executive has
performed any and all duties or obligations that he may have under any contract
or agreement with a former employer or other party, including, without
limitation, the return of all confidential materials; and (iii) the Executive is
currently not in possession of any confidential
11
materials or property belonging to any such former employer or other party. The
Executive acknowledges and agrees that he shall advise the Company in the event
that his duties with the Company should be changed or enlarged in such a manner
as to conflict with any such prior contract, agreement, order or restrictive
covenant. Without limitation on any other rights or remedies available to the
Company with respect to the Executive's breach of his obligations hereunder, the
Executive shall defend, indemnify and hold the Company, the Affiliates, and each
of their respective shareholders, officers, directors, employees, counsel,
agents, affiliates and assigns (collectively, the "COMPANY INDEMNITEES")
harmless from and against any and all direct or indirect demands, claims,
payments, obligations, recoveries, deficiencies, fines, penalties, assessments,
actions, causes of action, suits, losses, diminution in the value of assets of
the Company, compensatory, punitive, exemplary or consequential damages
(including, without limitation, lost income and profits and interruptions of
business), liabilities, costs, expenses, and interest on any amount payable to a
third party as a result of the foregoing, whether accrued, absolute, contingent,
known, unknown or otherwise asserted against, imposed upon or incurred by the
Company Indemnitees, or any of them, by reason of or resulting from, arising out
of, based upon or otherwise in respect of (1) any conflict between the
Executive's employment hereunder and any prior employment, duty, contract,
express or implied agreement, order or restrictive covenant, or (2) any
misrepresentation by the Executive hereunder as to any facts which are the
subject matter of any conflict or violation of any prior contract, agreement,
order or restrictive covenant on the part of the Executive.
14. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and, if mailed by prepaid
first class mail or certified mail, return receipt requested, at any time other
than during a general discontinuance of postal service due to strike, lockout or
otherwise, shall be deemed to have been received on the earlier of the date
shown on the receipt or three (3) business days after the postmarked date
thereof. In addition, notices hereunder may be delivered by hand, in which event
the notice shall be deemed effective when delivered, or by overnight courier, in
which event the notice shall be deemed to have been received on the next
business day following delivery to such courier. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(a) If to the Company:
Cypress Communications, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
#▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
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with a copy to:
Ungaretti & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Executive:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
unless and until notice of another or different address shall be given as
provided herein.
15. MISCELLANEOUS.
15.1 ENTIRE AGREEMENT. This Agreement, including all exhibits
and all other attachments hereto, if any, embodies the entire agreement between,
and the understanding of, the parties hereto in respect of the subject matter
contained herein. The parties hereto have not relied upon any promises,
representations, warranties, agreements, covenants or undertakings, other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior or contemporaneous negotiations, understandings and agreements, whether
written or oral, between the parties hereto with respect to the subject matter
contained herein. The parties acknowledge and agree that Executive and USRT
previously entered into a letter agreement dated on December 20, 2001. The
parties agree that the various agreements and undertakings contained therein
shall remain in full force and effect, and the provisions thereof are superseded
only to the extent they are inconsistent with in this Agreement.
15.2 EXTENSIONS, MODIFICATIONS OR AMENDMENTS. No extension,
modification or amendment of this Agreement shall be binding upon a party hereto
unless such extension, modification or amendment is set forth in a written
instrument which is executed and delivered on behalf of such party, which in the
case of the Company must be by a duly authorized officer of the Company only
upon the express, prior authorization of the Board.
15.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, successors and permitted assigns; and shall also inure to the
benefit of the Affiliates and their respective successors and assigns.
Notwithstanding the foregoing, neither party shall assign any of his or its
rights or obligations hereunder to any other person or entity without the prior
written consent of the other.
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15.4 CAPTIONS. The captions herein have been inserted solely
for convenience of reference and in no way define, limit or describe the scope
or substance of any provision of this Agreement.
15.5 SEVERABILITY. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision were limited
or modified, consistent with its general intent, to the extent necessary so that
it shall be valid, legal and enforceable, or if it shall not be possible to so
limit or modify such invalid, illegal or unenforceable provision, this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein, and all other provisions hereof shall be and remain
unimpaired and in full force and effect.
15.6 WAIVER. The failure or delay of either party hereto at
any time or times to require performance of any provision of this Agreement
shall in no manner affect its or his right to enforce that provision. No single
or partial waiver by either party hereto of any condition of this Agreement, or
of the breach of any term, agreement or covenant or of the inaccuracy of any
representation or warranty of this Agreement, whether by conduct or otherwise,
in any one or more instances shall be construed or deemed to be a further or
continuing waiver of any such condition, breach or inaccuracy or a waiver of any
other condition, breach or inaccuracy.
15.7 GOVERNING LAW. This Agreement, including, without
limitation, the obligations, rights and remedies of the parties hereto, and any
and all claims arising out of the relationship between the parties hereto, shall
be governed by and construed in accordance with the laws of the State of
Georgia, without giving effect to any conflicts or choice of laws principles
which otherwise might be applicable.
[SIGNATURE PAGES ATTACHED]
14
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be executed, effective as of the day and
year first above written.
COMPANY:
CYPRESS COMMUNICATIONS, INC.
By:
-----------------------------------------------------------
Name:
---------------------------------------------------------
Its:
----------------------------------------------------------
EXECUTIVE:
--------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
U. S. RealTel, Inc., as the sole stockholder of Cypress Communications, Inc., hereby guarantees the performance
of the obligations set forth in this Employment Agreement.
U.S. REALTEL, INC.
By:
-----------------------------------------------------------
Name:
---------------------------------------------------------
Its: Chairman
