Exhibit 10.18
SKYLYNX COMMUNICATIONS, INC.
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made
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this 20th day of April 1999 between SKYLYNX COMMUNICATIONS, INC., a Colorado
corporation (the "Company") and XXXXXXX X. XXXXXXX ("Xxxxxxx").
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W I T N E S E T H:
WHEREAS, the parties entered into an Agreement on the 1st day of December,
1998 and wish to amend certain provisions and restate the remaining provisions
of that Agreement;
WHEREAS, it is intended that this Agreement will supercede the prior
Agreement and that all the provisions of the earlier Agreement be deemed in
effect as of the date of the first Agreement;
WHEREAS, the parties hereto wish to enter into an employment agreement to
employ Xxxxxxx and to set forth certain additional agreements between Xxxxxxx
and the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual,
promises, covenants and representations herein contained, the parties hereto
agree as follows:
1. Amended Agreement. The Company and Xxxxxxx enter into this Agreement
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for the purposes of amending certain provisions and restating the remaining
provisions of an employment Agreement entered into by the Company and Xxxxxxx on
the 1st day of December, 1998. The provisions of this Agreement are intended to
supercede the provisions of the prior Agreement and it is intended that all the
provisions of the earlier Agreement be deemed in effect as of the date of the
first Agreement.
2. Term. The Company will employ Xxxxxxx, and Xxxxxxx will serve the
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Company, under the terms of this Agreement for an initial term ending October
31, 2000 (the "Initial Term"), commencing on the date hereof (the "Effective
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Date"). Effective as of the expiration of the Initial Term and as of each
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anniversary date thereof, the term of this Agreement shall be extended for an
additional one-year period unless, not later than two months prior to each such
respective date, either party hereto shall have given notice to the other than
the term shall not be so extended. Notwithstanding the foregoing, Xxxxxxx'
employment hereunder may be earlier terminated, as provided in Section 5 hereof.
The term of this Agreement, as in effect from time to time in accordance with
the foregoing, shall be referred to herein as the "Term". The period of time
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between the Effective Date and the termination of Xxxxxxx' employment hereunder
shall be referred to herein as the "Employment Period".
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3. Employment. The Company hereby employs Xxxxxxx as President and Chief
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Executive Officer of the Company upon the terms and conditions herein set forth.
Xxxxxxx shall exercise such authority, perform such duties and functions and
discharge such responsibilities as are reasonably associated with Xxxxxxx'
position, commensurate with the authority vested in Xxxxxxx pursuant to this
Agreement and consistent with the bylaws of the Company. In connection with
performance of his duties, Xxxxxxx shall report directly to the Board of
Directors of the Company (the "Board"). During the Employment Period, Xxxxxxx
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shall devote full business time, skill and efforts to the business of the
Company. Notwithstanding the foregoing, Xxxxxxx may (i) make and manage personal
business investments of his choice and serve in any capacity with any civic,
educational or charitable organization, or any trade association, without
seeking or obtaining approval by the Board, provided such activities and service
do not materially interfere or conflict with the performance of his duties
hereunder and (ii) with the approval of the Board, serve on the boards of
directors of other corporations. The Company shall provide Xxxxxxx, incident to
the performance of such duties, with office space, facilities and secretarial
assistance commensurate with his position. Xxxxxxx shall principally perform his
duties for the Company at the corporate headquarters to be located in Denver,
Colorado, or at such location as the Board may determine in consultation with
Xxxxxxx and with his express consent.
4. Compensation and Benefits.
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(a) Base Salary. During the Employment Period, the Company shall pay
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to Xxxxxxx, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $144,000 per annum, payable
in arrears not less frequently than twice monthly in accordance with the normal
payroll practices of the Company (the "Base Salary"). The Compensation
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Committee shall increase Xxxxxxx' base salary annually, at a rate of not less
than ten percent (10%) per year.
In the event the Company completes an initial or secondary public
offering of its common stock, Xxxxxxx' base salary shall be immediately
increased to an amount to be determined by the Compensation Committee of the
Board. Under no set of circumstances shall Xxxxxxx' base salary be decreased at
any time.
(b) Bonuses. The Company agrees to pay Xxxxxxx an annual cash bonus,
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on or about March 31st of each year for his efforts in the prior calendar year.
The amount of such bonus shall be determined by the Compensation Committee of
the Board.
(c) Advance Incentives. Concurrently with the execution of this
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Agreement, the Company agrees to xxxxx Xxxxxxx three hundred and twenty-five
thousand (325,000) shares of the Company's common stock. The Company agrees to
register the sale of the shares underlying this Stock Agreement with the
Securities and Exchange Commission at the time the Company files for its an
Initial Public Offering or a Secondary offering, subject to the requirements of
the underwriter. The total number of shares the Company must register for
Xxxxxxx shall be no more than the aggregate number of shares the Company is
otherwise registering. The Company shall bear all costs of registration
associated with such piggyback registration for Xxxxxxx.
(d) Incentive Stock Options ("ISOs"). The Company has caused to be
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established a qualified incentive stock option plan (the "ISO Plan") under
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Section 422 of the Internal Revenue Code of 1986, as amended. Each year during
the Employment Period, Xxxxxxx shall fully participate in the ISO Plan and be
granted a number of ISOs commensurate with his position in the Company. The
number of ISO's granted shall be calculated using the same formula used to
calculate the amount of ISOs granted other senior executives of the Company.
(e) Non-Qualified Stock Options ("NSOs"). The Company has caused to
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be established a Non-qualified Stock Option plan (the "Equity Incentive Plan")
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that is not intended to qualify as an "incentive stock option" under Section 422
of the Internal Revenue Code of 1986, as amended. Concurrently with the
execution of this Agreement, the Company and Xxxxxxx will enter into a Stock
Option Agreement, attached hereto as Exhibit A, pursuant to which the Company
shall grant to Xxxxxxx an
option to purchase one million eighty thousand nine hundred and sixty-six
(1,080,966) shares of Common Stock of the Company on the terms and conditions
set forth therein.
(f) Accelerated Vesting. The parties agree that all of Xxxxxxx'
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Incentive Stock Options and Non-qualified Stock Options shall immediately vest,
regardless of the performance criteria, in the event of a Change in Control of
the Company as defined in Paragraph 5(e) herein.
(g) Equity Catch-Up or Claw-Back. Notwithstanding anything contained
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herein to the contrary, the parties agree that, upon the completion of an
initial or secondary public offering of the Company's Common Stock, the sum of
(i) the number of shares of Common Stock granted to Xxxxxxx according to
Paragraph 4(c), plus (ii) the number of shares of Common Stock represented by
Incentive Stock Options granted to Xxxxxxx according to Paragraph 4(d), plus
(iii) the number of shares of Common Stock represented by Non-Qualified Stock
Options granted to Xxxxxxx according to Paragraph 4(e) shall represent an equity
interest in the Company equal to seven percent (7%) of the Company's issued and
outstanding Common Stock on a fully diluted basis. To the extent that Xxxxxxx'
equity interest at such time is less than or greater than seven percent (7%),
the Company and/or the Company's Compensation Committee shall either increase or
decrease the number of Non-Qualified Stock Options granted to Xxxxxxx (through
the grant of additional Non-Qualified Stock Options to Xxxxxxx or through the
cancellation of Non-Qualified Stock Options held by Xxxxxxx) so that Xxxxxxx'
equity interest at such time is equal to seven percent (7%) of the Company's
issued and outstanding Common Stock on a fully diluted basis.
(h) Benefits. During the Employment Period, Xxxxxxx shall receive
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such life insurance, disability, pension, health insurance, holiday, and sick
pay benefits and other benefits which the Company extends, as a matter of
policy, to its executives and, except as otherwise provided herein, shall be
entitled to participate in all deferred compensation and other incentive plans
of the Company on the same basis as other like executives of the Company.
(i) Vacation. Xxxxxxx shall be entitled to four (4) weeks of vacation
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each year with full compensation. Xxxxxxx agrees to schedule his vacation in a
way that least interferes with the Company's business.
(j) Expenses. Xxxxxxx shall be reimbursed for his reasonable
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expenses, commensurate with his position and related to the carrying out of his
duties, including expenses for entertainment, travel and similar items. The
Company shall reimburse Xxxxxxx for such expenses in a timely manner and in
accordance with the policies and procedures of the Company in effect from time
to time.
(k) Perquisites. During the Term of this Agreement, Xxxxxxx shall be
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entitled to perquisites and fringe benefits that are accorded senior executives
of the Company. Such perquisites shall include an automobile allowance of six
hundred and fifty dollars ($650) per month, reimbursement for medical expenses
which may otherwise be uninsured or unreimbursed under the Company's medical
plan for Xxxxxxx and his dependents, payment for all premiums for Xxxxxxx and
his dependents under its medical insurance plans, and payment for all premiums
for Xxxxxxx under its life and disability insurance plans. The Company shall
also waive any applicable waiting periods for such benefits, if any.
(l) Cumulative Compensation. The compensation provided for in
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Paragraphs 3(a) - (k) herein are in addition to the benefits provided for upon
termination pursuant to Section 6 herein.
5. Termination of Employment.
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(a) Termination for Cause. The Company may terminate Xxxxxxx'
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employment hereunder for cause. For purposes of this Agreement and subject to
Xxxxxxx' opportunity to cure as provided in Section 5(c) hereof, the Company
shall have "cause" to terminate Xxxxxxx' employment hereunder if Xxxxxxx shall
commit any of the following:
(i) any act or omission which shall represent a material breach
in any material respect of any of the terms of this Agreement;
(ii) gross misconduct that, in the reasonable good faith opinion
of the Company, is or is likely to be significantly injurious to the
Company;
(iii) gross negligence or wanton and reckless acts or omissions
in the performance of Xxxxxxx' duties, in any such case which are
significantly injurious to the Company;
(iv) bad faith in the performance of Xxxxxxx' duties, consisting
of willful acts or omissions, which are significantly injurious to the
Company;
(v) addiction to illegal drugs or chronic alcoholism; or
(vi) any conviction or pleading of guilty to a crime that
constitutes a felony under the laws of the United States or any political
subdivision thereof.
(b) Termination with Adequate Reason. Xxxxxxx shall have the right at
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any time to terminate his employment with the Company with adequate reason. For
purposes of this Agreement and subject to the Company's opportunity to cure as
provided in Section 5(c) hereof, Xxxxxxx shall have adequate reason to terminate
his employment hereunder if such termination shall be the result of:
(i) a diminution during the Employment Period in Xxxxxxx'
title, duties or responsibilities as set forth in Section 2 hereof;
(ii) a breach by the Company of the compensation and benefits
provisions set forth in Section 4 hereof;
(iii) any action of the Company to which Xxxxxxx does not consent
which would require Xxxxxxx to change his present place of residence;
(iv) a material breach by the Company of any material terms of
this Agreement.
(c) Notice and Opportunity to Cure. Notwithstanding the foregoing, it
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shall be a condition precedent to the Company's right to terminate Xxxxxxx'
employment for "cause" under Section 5(a) and Xxxxxxx' right to terminate his
employment for "adequate reason" under Section 5(b) that (1) the party seeking
the termination shall first have given the other party written notice stating
with specificity the reason for the termination ("breach") and (2) if such
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breach is susceptible to cure or remedy, a period of thirty (30) days from and
after the giving of such notice shall have elapsed without the breaching party
having effectively cured or remedied such breach during such 30-day period,
unless such breach cannot be cured or remedied within thirty (30) days, in which
case the period for remedy or cure shall be extended for
a reasonable time (not to exceed thirty (30) days) provided the breaching party
has made and continues to make a diligent effort to effect such remedy or cure.
(d) Termination Upon Death or Permanent and Total Disability. The
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Employment Period shall be terminated by the death of Xxxxxxx. The Employment
Period may be terminated by the Company if Xxxxxxx shall be rendered incapable
of performing his duties to the Company by reason of any medically determined
physical or mental impairment that reasonably can be expected to result in death
or that can be expected to last for a period of six (6) or more consecutive
months from the first date of the disability ("Disability"). In the event of a
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dispute as to whether Xxxxxxx is mentally impaired within the meaning of this
Section 5(d), or as to the likely duration of any incapacity of Xxxxxxx, either
party may request a medical examination of Xxxxxxx by a doctor appointed by the
Chief of Staff of a hospital selected by mutual agreement of the parties, or as
the parties may otherwise agree, and the cost of such written medical opinion of
such doctor shall be borne by the Company. If the Employment Period is
terminated by reason of Disability of Xxxxxxx, the Company shall give thirty
(30) days' advance written notice to that effect to Xxxxxxx.
(e) Change in Control. A "Change in Control" shall be deemed to have
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occurred if and when (i) any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities and Exchange Act of 1934, as amended) who does
not own fifty percent (50%) or more of the combined voting power of the
Company's then issued and outstanding securities is or becomes a beneficial
owner, directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then issued
and outstanding voting securities; (ii) the Company sells all or substantially
all of the assets of the Company; (iii) a merger is effected whereby the Company
is not the surviving entity after the merger (except in the instance where the
sole purpose of the merger is to effect a change in domicile of the Company from
one state to another); or (iv) a majority of the individuals who were members of
the Board of Directors of the Company immediately prior to an action or series
of actions, do not constitute a majority of the Board of Directors following
such action or series of actions. In the event of a Change in Control, if
Xxxxxxx and the new controlling entity do not agree to continue with the terms
of this Agreement, then this Agreement shall be terminated and the Company shall
pay Xxxxxxx the liquidated damages defined in Paragraph 6(a) below.
6. Consequences of Termination.
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(a) Termination Without Cause or for Adequate Reason or Change of
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Control. In the event of termination of Xxxxxxx' employment hereunder: (1) by
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the Company without "cause" (other than upon death or Disability); (2) by
Xxxxxxx for "adequate reason"; or (3) termination effected after or upon a
Change of Control (each as defined in Section 5 hereof), in addition to any
other benefits and payments as may be required by law or otherwise accrued as of
such termination date by Xxxxxxx, Xxxxxxx shall be entitled to the following
severance pay and benefits:
(i) Severance Pay - a lump sum amount equal to one half (1/2) of
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Xxxxxxx' then annual Base Salary;
(ii) Benefits Continuation - continuation for six (6) months (the
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"Severance Period") of coverage under the group medical care, disability
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and life insurance benefit plans or arrangements in which Xxxxxxx is
participating at the time of termination with the Company continuing to pay
its share of premiums and associated costs as if Xxxxxxx continued in the
employ of the Company; provided, however, that the Company's obligation to
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provide such coverages
shall be terminated if Xxxxxxx obtains comparable substitute coverage from
another employer at any time during the Severance Period. Xxxxxxx shall be
entitled, at the expiration of the Severance Period, to elect continued medical
coverage in accordance with Section 4980B of the Internal Revenue Code of 1986,
as amended (or any successor provision thereto); and
(iii) Pro Rata Bonus Amounts - a lump sum amount equal to the
pro rata portion of any bonus amounts paid by the Company in the prior year
as bonuses.
(b) Termination Upon Disability. In the event of termination of
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Xxxxxxx' employment hereunder by the Company on account of Disability, Xxxxxxx
shall be entitled to the following severance pay and benefits:
(i) Severance Pay - severance payments in the form of
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continuation of Xxxxxxx' Base Salary as in effect immediately prior to such
termination for a period of 6 months following the first date of
Disability; and
(ii) Benefits Continuation - the same benefits as provided in
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Section 6(a)(ii) above, to be provided during the Employment Period while
Xxxxxxx is suffering from Disability and for a period of three (3) months
following the effective date of Xxxxxxx' termination by reason of
Disability.
(c) Termination Upon Death. In the event of termination of Xxxxxxx'
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employment hereunder on account of Xxxxxxx' death, Xxxxxxx' heirs, estate or
personal representatives under law, as applicable, shall be entitled to the
payment of Xxxxxxx' Base Salary as in effect immediately prior to death for a
period of not less than two (2) calendar months and not more than the earlier of
six (6) calendar months or the payment of benefits pursuant to Xxxxxxx' life
insurance policy, as provided for in Section 4(h) above. Xxxxxxx' beneficiary
or estate shall not be required to remit to the Company any payments received
pursuant to any life insurance policy purchased pursuant to Section 4(h) above.
(d) Accrued Rights. Notwithstanding the foregoing provisions of this
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Section 6, in the event of termination of Xxxxxxx' employment hereunder for any
reason, Xxxxxxx shall be entitled to payment of any unpaid portion of his Base
Salary through the effective date of termination, accrued but unpaid vacation or
benefits otherwise agreed to by the Company, and payment of any accrued but
unpaid rights solely in accordance with the terms of any incentive bonus or
employee benefit plan or program of the Company.
(e) Conditions to Severance Benefits.
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(i) The Company shall have the right to seek repayment of the
severance payments and benefits provided by this Section 6 in the event
that Xxxxxxx fails to honor in accordance with their terms the provisions
of Section 7 hereof.
(ii) For purposes only of this Section 6(e), Xxxxxxx shall be
treated as having failed to honor the provisions of Sections 7 hereof only
upon the vote of two-thirds of the Board following notice of the alleged
failure by the Company to Xxxxxxx, an opportunity for Xxxxxxx to cure the
alleged failure for a period of thirty (30) days from the date of such
notice and Xxxxxxx' opportunity to be heard on the issue by the Board.
(f) Registration and/or Buyback of Securities. No later than ninety
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(90) days following termination of this Agreement by Company without cause (as
described in Section 5(a)) or by Xxxxxxx with adequate reason (as described in
Section 5(b)), the Company shall cause to be prepared and filed at its sole cost
and expense registration documents with the Securities and Exchange Commission
for the purpose of registering for sale under the Securities Act of 1933, as
amended, all shares of the Company's common stock owned by Xxxxxxx or
purchasable by Xxxxxxx upon exercise of outstanding Incentive Stock Options and
Non-Qualified Stock Options that are vested as of the date of termination. In
connection with such registration, the Company shall do the following: (i)
attempt to cause such registration statement to be declared effective by the
Securities and Exchange Commission within one hundred twenty (120) days of the
date of termination, (ii) if successful in (i) above, maintain the effectiveness
of such registration for a minimum period of one hundred eighty (180) days, and
(iii) qualify the sale of all shares of the Company's common stock owned by
Xxxxxxx or purchasable by Xxxxxxx upon exercise of his outstanding, vested
Incentive Stock Options and Non-Qualified Stock Options in such states and under
such Blue Sky regulations as Xxxxxxx may reasonably request. In the event said
registration fails to become effective, Xxxxxxx shall be permitted to sell in
accordance with the provisions of Rule 144 and the remaining shares shall be
registered in accordance with 4(c) above.
7. Confidential Information and Covenant Not to Compete. All payments and
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benefits to Xxxxxxx shall be subject to Xxxxxxx' compliance with this Agreement
and the provisions of this Section 7. However, Xxxxxxx' covenants contained in
this Section 7 shall terminate and shall be unenforceable and of no further
legal force or effect in the event the Company, its successors or assigns,
becomes insolvent, is liquidated or ceases for any reason to conduct business
operations for a continuous period of at least thirty (30) days.
(a). Confidentiality. Xxxxxxx agrees that he will not at any time
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during the employment period or for a period of two (2) years following
employment with the Company, for any reason, in any fashion, form or manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, corporation or other business entity, in any manner whatsoever, any
confidential information or trade secrets concerning the business of the
Company, including, without limiting the generality of the foregoing, the
techniques, methods or systems of its operation or management, any information
regarding its financial matters, or any other material information concerning
the business of the Company (including customer lists), its manner of operation,
its plans or other material data (the "Business"). The provisions of Section
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7(a) shall not apply to (i) information disclosed in the performance of Xxxxxxx'
duties to the Company based on his good faith belief that such a disclosure is
in the best interests of Company; (ii) information that is, at the time of the
disclosure, public knowledge; (iii) information disseminated by the Company to
third parties in the ordinary course of business; (iv) information lawfully
received by Xxxxxxx from a third party who, based upon inquiry by Xxxxxxx, is
not bound by a confidential relationship to the Company; or (v) information
disclosed under a requirement of law or as directed by applicable legal
authority having jurisdiction over Xxxxxxx.
(b) Litigation Support. During the Term of this Agreement, Xxxxxxx
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shall, upon reasonable notice, furnish such information and proper assistance to
the Company as may reasonably be required in connection with any litigation in
which the Company or any of its subsidiaries is, or may become, a party. Except
for litigation that may be between the Company and Xxxxxxx, Xxxxxxx' reasonable
expenses (including, but not limited to, travel and attorneys' fees) incurred in
complying with this covenant shall be either advanced or promptly reimbursed by
Company to Xxxxxxx.
(c) No Solicitation of Employees. Xxxxxxx agrees that during the Term
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of this
Agreement and continuing for a period of one (1) year after termination under
Paragraph 5 herein, neither Xxxxxxx nor any person or enterprise controlled by
Xxxxxxx, will solicit for employment any person employed by the Company, with
the exception of Xxxxx X. Xxxxxx.
(d) Covenant Not to Compete. Xxxxxxx agrees that he shall not during
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the Employment period, without the approval of the Board, directly or
indirectly, alone or as partner, joint venturer, officer, director, employee,
consultant, agent, independent contractor, guarantor, financier, consultant,
option holder or stockholder (other than as provided below) of any company or
business, participate in, engage in or have a financial interest in any
"Competitive Business" within the United States. For purposes of the foregoing,
the term "Competitive Business" shall mean any business, firm, corporation or
other business entity related to the provision of Internet access or Internet
related services and any business directly competing with any product or service
of the Company or any affiliate thereof. Notwithstanding the foregoing, Xxxxxxx
shall not be prohibited during the noncompetition period applicable above from
acting as a passive investor where he owns not more than five percent (5%) of
the issued and outstanding capital stock of any publicly-held company.
8. Breach of Restrictive Covenants. The parties agree that a breach or
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violation of Section 7 hereof will result in immediate and irreparable injury
and harm to the innocent party, and that such innocent party shall have, in
addition to any and all remedies of law and other consequences under this
Agreement, the right to seek an injunction, specific performance or other
equitable relief to prevent the violation of the obligations hereunder.
9. Indemnification and Duty to Defend.
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(a) Indemnification. Except for litigation between the Company and
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Xxxxxxx, the Company agrees to indemnify Xxxxxxx to the fullest extent against
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative in which he is made party or is
threatened to be made a party by reason of his having been an officer or
director of the Company or any of its subsidiaries or affiliates, or for actions
taken purportedly on behalf of the Company or any of its subsidiaries or
affiliates. Indemnification shall include, but is not limited to: expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by Xxxxxxx as long as Xxxxxxx acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. Indemnification shall
extend to all matters that relate to Xxxxxxx' association with the Company
beginning on July 1, 1998, and such indemnification shall survive the
termination of this Agreement, regardless of the reason for termination.
(b) Duty to Defend. Except for litigation between the Company and
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Xxxxxxx, the Company will provide Xxxxxxx with a legal defense with counsel of
his choosing against any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative in which he
is made party or is threatened to be made a party by reason of his having been
an officer or director of the Company or any of its subsidiaries or affiliates,
for action taken purportedly on behalf of the Company or any of its subsidiaries
or affiliates. No settlement shall be entered into with respect to litigation
pursuant to this Section 9(b) without the express written approval of Xxxxxxx.
Additionally, upon request by Xxxxxxx, the Company will promptly advance or pay
any amounts for costs, charges, or expenses in respect to his right to a defense
and indemnification hereunder. This duty to defend shall extend to all matters
that relate to Xxxxxxx' affiliation with the Company beginning from July 1,
1998, and such duty shall survive the termination of this Agreement.
10. Notice. For the purposes of this Agreement, notices, demands and all
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other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Company, to: If to Xxxxxxx, to:
Chairman of the Board Xxxxxxx X. Xxxxxxx
SkyLynx Communications, Inc. 000 Xxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx - Xxxxx 000 Xxxxxxx, Xxxxxxx 00000
Xxxxxx, Xxxxxxxx 00000
or to such other respective addresses as the parties hereto shall designate to
the other by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.
11. Waiver of Breach. Any waiver of any breach of this Agreement shall
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not be construed to be a continuing waiver or consent to any subsequent breach
on the part either of Xxxxxxx or of the Company.
12. Non-Assignment: Successors. Neither party hereto may assign his or
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its rights or delegate his or its duties under this Agreement without the prior
written consent of the other party; provided, however, that: (i) this Agreement
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shall inure to the benefit of and be binding upon the successors and assigns of
the Company upon any sale of all or substantially all of the Company's assets,
or upon any merger, consolidation or reorganization of the Company with or into
any other corporation, all as though such successors and assigns of the company
and their respective successors and assigns were the Company; and (ii) this
Agreement shall inure to the benefit of and be binding upon the heirs, assigns
or designees of Xxxxxxx to the extent of any payments due to them hereunder. As
used in this Agreement, the term "Company" shall be deemed to refer to any such
successor or assign of the Company referred to in the preceding sentence.
13. Withholding of Taxes. All payments required to be made by the Company
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to Xxxxxxx under this Agreement shall be subject to the withholding of such
amounts, if any, relating to tax, and other payroll deductions as the Company
may reasonably determine it should withhold pursuant to any applicable law or
regulation.
14. Severability. To the extent any provision of this Agreement or
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portion thereof shall be invalid or unenforceable, it shall be considered
deleted therefrom and the remainder of such provision and of this Agreement
shall be unaffected and shall continue in full force and effect.
15. Payment. All amounts payable by the Company to Xxxxxxx under this
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Agreement shall be paid promptly on the dates required for such payment in this
Agreement without notice or demand. Any salary, benefits or other amounts paid
or to be paid to Xxxxxxx or provided to or in respect of Xxxxxxx pursuant to
this Agreement shall not be reduced by amounts owing from Xxxxxxx to the
Company.
16. Authority. Each of the parties hereto hereby represents that each has
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taken all actions necessary in order to execute and deliver this Agreement and
the Stock Option Agreement attached hereto as Exhibit A.
17. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the laws of the State of Colorado, without giving
effect to the choice of law principles thereof.
19. Entire Agreement. This Agreement, the attached Stock Option
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Agreements and the Plan as defined in the Stock Option Agreements constitute the
entire agreement by the Company and Xxxxxxx with respect to the subject matter
hereof and supersedes any and all prior agreements or understandings between
Xxxxxxx and the Company with respect to the subject matter hereof, whether
written or oral. This Agreement may be amended or modified only by a written
instrument executed by Xxxxxxx and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and month first above-written.
SKYLYNX COMMUNICATIONS, INC.
By:
Xxxxxxx X. Xxxxxx
Chairman of the Board
Xxxxxxx X. Xxxxxxx
EXHIBIT "A"
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AMENDED AND RESTATED
STOCK OPTION AGREEMENT
SkyLynx Communications, Inc.
Stock Options
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This AMENDED AND RESTATED STOCK OPTION AGREEMENT (the "Agreement") dated as
of the 20th day of April, 1998 is intended to amend certain terms and restate
the remaining provisions of an Agreement entered into on the 1st day of
December, 1998 (the "Date of Grant"), between SkyLynx Communications, Inc., a
Colorado corporation (the "Company") and Xxxxxxx X. Xxxxxxx (the "Optionee").
Pursuant to any authorized stock option plan of the Company or any other
appropriate and lawful method (collectively, the "Plan"), the Company has
authorized the execution and delivery of this Agreement. A copy of the Plan as
in effect on the Date of Grant has been supplied to the Optionee and the
Optionee hereby acknowledges receipt thereof. The provisions of the Plan,
including the definitions of capitalized terms that are not otherwise defined in
this Agreement, are incorporated herein by reference.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. Grant of Option. Subject to all the terms and conditions of the Plan
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and this Agreement, the Company grants to the Optionee as of the date of grant
an option (the "Option") to purchase one million eighty thousand nine hundred
and sixty-six (1,080,966) shares of common stock, par value $.001, of the
Company ("Common Stock"). The Option is not intended to qualify as an "incentive
stock option" under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), and shall be treated as a non-qualified stock option under the
Plan.
2. Exercise Price. The exercise price per share of Common Stock covered
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by this Option (the "Option Price") shall be $1.94.
3. Vesting. The Optionee's right to purchase shares of the Company's
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Common Stock under the Option shall vest according to the following milestones:
a. When the Company achieves certain performance based milestones as
detailed in the Performance Criteria ("Performance Criteria") set forth on
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Schedule 3(a) hereto; or
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b. In any event, upon the tenth (10th) anniversary of the grant of
the options all options that are not then vested will immediately vest.
4. Term. The term of the Option (the "Option Term") shall commence on the
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Date of Grant and shall expire on the tenth anniversary thereof unless the
Option shall have been earlier terminated in accordance with the terms hereof or
of the Plan. Shares of Common Stock as to which the Option becomes exercisable
pursuant to Section 3 hereof may be purchased at any time during the Option
Term.
5. Termination of Option. The unexercised portion of the Option shall
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automatically terminate and shall become null and void and be of no further
force or effect upon the expiration of the Option Term.
6. Notices. All notices or other communications which are required or
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permitted hereunder shall be deemed sufficient if contained in a written
instrument given by personal delivery, telex, telecopier, telegram, air courier
or registered or certified mail, postage prepaid, return receipt requested,
addressed to such party at the address set forth below or such other address as
may thereafter be designated in a written notice from such party to the other
party.
If to the Company:
Attn: Chairman of the Board
SkyLynx Communications, Inc.
000 Xxxxx Xxxxxx Xxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to Xxxxxxx, to:
Xxxxxxx X. Xxxxxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
All such notices, advances and communications shall be deemed to have been
delivered and received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of telecopier, upon receipt of machine confirmation
and (iii) in the case of mailing, on the third business day following such
mailing.
7. No Waiver. No waiver of any breach or condition of this Agreement
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shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.
8. Optionee Undertaking. The Optionee shall take whatever additional
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actions and execute whatever additional documents the Company or the Committee
may in its reasonable judgment deem necessary or advisable in order to carry out
or effect one or more of the obligations or restrictions imposed on the Optionee
pursuant to the express provisions of this Agreement.
9. Governing Law. This Agreement shall be governed by, and construed in
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accordance with, the laws of the State of Colorado, excluding the choice of law
rules thereof.
10. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above-written.
SKYLYNX COMMUNICATIONS, INC.
By:
Xxxxxxx X. Xxxxxx
Chairman of the Board
Xxxxxxx X. Xxxxxxx
SCHEDULE 3(A)
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PERFORMANCE CRITERIA
The Optionee's right to purchase shares of the Company's Common Stock under
the Option shall vest immediately, subject to Section 3 hereof, pursuant to the
following schedule:
(1) Upon acquisition of the Company's twenty-fifth thousand (25,000)
subscriber, Xxxxxxx shall vest in 288,258 stock options.
(2) Upon obtaining acceptable commitments to fund the Company for a
minimum $30,000,000, Xxxxxxx shall vest in 384,343 stock options. Such
commitments may consist of, but shall not be limited to, any combination of the
following:
(i) Initial or Secondary Public Offering;
(ii) Private Equity Placement;
(iii) High Yield Debt Offering;
(iv) Private Debt Placement;
(v) Public or Private Placement of Convertible Securities;
(vi) Joint Venture / Project Financing; and
(vii) Vendor Financing.
(3) Upon the acquisition of the Company's fifth (5th) Internet Service
Provider, Xxxxxxx shall vest in 192,172 stock options.
(4) Upon obtaining annualized gross revenues of $15,000,000 for the
Company, (based upon last quarter revenues annualized), Xxxxxxx shall vest in
another 216,193 stock options.
