STOCK PURCHASE AGREEMENT BY AND AMONG
DATED AS OF JUNE 9, 2006
DIGITAL COMMUNICATIONS SERVICES, INC., A FLORIDA
CORPORATION AS COMPANY
XXXXX X. XXXXXXX AND XXXXXX X. XXXXXXX, AS SELLERS
AND
CHARYS HOLDING COMPANY, INC., A DELAWARE CORPORATION
AS BUYER
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of this day of
_____, 2006 by and among DIGITAL COMMUNICATIONS SERVICES, INC., a Florida
corporation (the "Company"), Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx (the
"Sellers") and CHARYS HOLDING COMPANY, INC. ("the Buyer"), a Delaware
corporation.
RECITALS:
WHEREAS, Buyer desires to acquire all of the issued and outstanding capital
stock of the Company (the "Stock"), and the Sellers desire to sell to Buyer all
of the Stock, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
promises hereinafter set forth and other good and valuable consideration, the
parties hereto hereby agree as follows:
ARTICLE I
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PURCHASE OF STOCK
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1.1 Purchase and Sale.
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Subject to the terms and conditions hereinafter set forth, at the
Closing, the Sellers will sell and transfer to Buyer, and Buyer will purchase
and acquire from the Sellers, all of the Stock.
ARTICLE II
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PURCHASE PRICE
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2.1 The Buyer agrees to pay to the Sellers aggregate consideration of
$840,000 (the "Purchase Price") by delivery of (i) a Promissory Note in the
amount of $640,000.00 in the form attached hereto as EXHIBIT A; and (ii)
$200,000 in shares of Common Stock of the Buyer, based on the volume weighted
average price of the Buyer's Common Stock as quoted on the Bulletin Board for
the last twenty (20) days from the date hereof, said Common Stock to be
delivered at Closing.
2.2 Buyer shall, within ninety (90) days from the date of Closing,
cause the Company's debt facility with Wachovia Bank (the "Wachovia Credit
Facility") to be paid in full and terminated. Buyer shall use commercially
reasonable best efforts to provide Sellers an amount of capital sufficient to
fund Sellers' Business Plan, as reasonably approved by Buyer's Board of
Directors.
2.3 EMPLOYMENT AGREEMENTS. Buyer shall enter into Employment
Agreements with the Sellers under terms and conditions terms and conditions
substantially
similar to their current Employment Agreements the form of which are attached as
EXHIBITS "B" and "C").
2.4 EARN OUT. In addition to the Purchase Price, Sellers shall
have the right to earn additional amounts of equity interest directly or
indirectly in the Buyer based upon the financial performance of the Company as
more specifically defined in EXHIBIT "D" attached hereto, with 40% of such earn
out amount to be paid to Xxxxxxx and 60% of such amount to Xxxxxxx.
ARTICLE III
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CLOSING
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Subject to the terms and conditions of this Agreement, the sale and
purchase of the Stock contemplated hereby (the "Closing") shall take place on or
before June 15, 2006 (the "Closing Date"). Buyer shall have the right to extend
the Closing for any reason for a period of thirty (30) days.
3.1 The Sellers' Obligations at Closing. At the Closing, the
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Sellers will deliver to Buyer, or will cause Company to deliver to Buyer, the
following:
(i) all original stock certificates evidencing the Stock;
(ii) an endorsement on each original Stock certificate or, at
Buyer's election, separate stock powers duly executed in blank,
together with such other instruments of conveyance as may be
reasonably acceptable to Buyer and its counsel and sufficient to
transfer full, marketable title to the Stock to Buyer, free and
clear of any pledges, liens, restrictions (other than securities
laws restrictions), charges, encumbrances, and rights or
interests of any other party thereto;
(iii) a good standing certificate of Company, certifying that
the Company is in good standing in the State of Florida as well
as a true and complete copy of the Articles of Incorporation of
the Company, as currently in effect, certified as of a recent
date by the Secretary of State (or comparable governmental
authority) of Florida, and a true and complete copy of the bylaws
of the Company, as currently in effect, certified by its
corporate secretary;
(iv) a duly executed Closing Certificate of the Company and
the Seller (as defined in Paragraph ____ hereof), dated as of the
Closing Date.
(v) an opinion of counsel in the form attached hereto as
EXHIBIT "E".
(vi) such other documents and instruments as shall be
required to consummate the transaction contemplated hereunder.
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3.2 Buyer's Obligations at Closing. At the Closing, Buyer will
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deliver the following to Sellers:
(i) the Total Purchase Price, including the shares of Common
Stock of the Buyer as calculated pursuant to Article 2.1 herein.
(ii) Executed Employment Agreements with the Sellers as provided
for in Article 2.3.
(iii) a duly-executed Buyer Closing Certificate (as defined in
Paragraph _____ hereof), dated as of the Closing Date
(iv) such other documents and instruments as may be required to
consummate the transactions contemplated hereunder.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
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SELLERS
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The Company and the Sellers hereby represent and warrant to the Buyer as
follows:
4.1 Organization, Good Standing and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Florida and has all requisite corporate power and authority to
carry on its business as described more fully in the Certificate. The Company
is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.
4.2 Capitalization and Voting Rights.
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(a) The authorized capital stock of the Company consists entirely
of 10 shares of voting common stock, without par value, of which 80% of the
shares are issued and outstanding to Xxxxxxx and 20% issued and outstanding to
Xxxxxxx. No shares of capital stock of the Company are held in the Company's
treasury and no shares of capital stock are reserved for issuance. All shares
of issued and outstanding Stock have been duly and validly issued and are fully
paid and non-assessable, without attachment of any options, warrants, rights,
calls or other preemptive rights.
(b) Set forth on SCHEDULE 4.2 is a true and complete list of all
current stockholders and other security holders of the Company showing the
number of shares of Preferred Stock, Common Stock, warrants, options, or other
securities held by each stockholder or security holder. Other than as set forth
in SCHEDULE 4.2, there are no other shareholders or other similar agreements,
written or oral, between the Company and any of the holders of the Company's
capital stock, or between or, to the best of the Company's knowledge, among any
holders of the Company's capital stock, relating to the acquisition,
disposition, or voting of such capital stock.
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4.3 Employee Stock Options. The Company has no outstanding Employee
-------------------------
Stock Options.
4.4 Title to Shares. The Sellers are and will be on the Closing Date,
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the owners, free and clear of any encumbrances, of the Company's Stock as set
forth in paragraph 1.1 of this Agreement.
4.5 Subsidiaries. The Company does not presently own or control,
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directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
4.6 Authorization. All corporate action on the part of the Company,
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its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, has been taken or will be taken prior
to the Closing
4.7 Governmental Consents. No consent, approval, order or
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authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement.
4.8 Financial Statements. The Company has delivered to the Buyer's
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counsel, its unaudited financial statements ending March 31, 2006 (the
"Financial Statements"), attached hereto as EXHIBIT "F". The Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the period(s) indicated and
with each other. The Financial Statements fairly present the financial
condition and operating results of the Company as of the date, and for the
period, indicated therein, subject in the case of unaudited Financial Statements
to normal year-end audit adjustments. Except as set forth in the Financial
Statements or in the Statement of Material Liabilities, attached hereto as
EXHIBIT "G", the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in the Financial Statements, which, in both cases, individually or in
the aggregate, are not material to the financial condition or operating results
of the Company, and has not experienced any material adverse change in the
Company's financial condition subsequent to March 31, 2006, and is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation. The Company shall adopt accounting adjustments suggested by the
Buyer's management, so long as they conform to generally accepted accounting
principles and are consistently applied; and the Company will convert its
accounting system to that being used by the Buyer as soon as practicable.
4.9 Taxes. At Closing, the Company has paid or will have accrued all
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federal, state, and local taxes which are currently due, and the Company has
filed or will file all federal, state, and local tax returns in a timely manner.
4.10 Title to Property and Assets. Except as set forth in SCHEDULE
---------------------------------
4.10, the Company owns its property and assets, as described more fully on the
Financial Statements, free and clear
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of all mortgages, liens, loans and encumbrances, except such encumbrances and
liens that arise in the ordinary course of business and do not materially impair
the Company's ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in compliance with such leases
and, to the best of its knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances.
4.11 Material Contracts. The Company is not a party to any material
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contracts other than those in the Statement of Material Contracts, attached
hereto as EXHIBIT "H," and there are no defaults, nor, to the knowledge of the
Company, any anticipated defaults, by the Company or any of the parties to the
contracts.
4.12 Compliance with Other Instruments. The Company is not, and upon
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filing thereof, will not be, in violation or default of any provision of its
Certificate or Bylaws, as amended (the "Bylaws"), or in any material respect of
any instrument, judgment, order, writ, decree or contract to which it is a party
or by which it is bound, or, to the best of its knowledge, of any provision of
any federal or state statute, rule or regulation applicable to the Company. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and thereby will not result in any such
violation or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event that results
in the creation of any lien, charge or encumbrance upon any assets of the
Company or the suspension, revocation, impairment, forfeiture, or non-renewal of
any material permit, license, authorization, or approval applicable to the
Company, its business or operations or any of its assets or properties.
4.13 Broker's or Finder's Fees. No agent, broker, person or firm acting
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on behalf of Sellers is, or will be, entitled to any commission or broker's or
finder's fees from any of the parties hereto, or from any person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the transactions contemplated herein.
4.14 Xxxxxxx Loan. The Company is the holder of a promissory note in
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the amount of $152,000.00 from shareholder Xxxx Xxxxxxx. This note will be paid
in full within ninety (90) days of Closing.
4.15 Legal Reserve. The Company currently has an accrual reserve, as of
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March 31, 2006, with regard to the SBC litigation of $510,000. If the Company
satisfies the SBC litigation claim for any amount less than such accrued
reserve, any excess funds realized by the Company may be used to reduce the
Wachovia Credit Facility after Closing.
4.16 Property Damage Claim. The Company has a property damage claim in
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the amount of $90,000.00 due to damages from hurricane Xxxxxxx, and this claim
is expected to be paid in full to the Company by American Casualty Insurance, of
Reading, Pennsylvania, policy #C2086822512, within ninety (90) days of Closing.
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4.17 Accounts Receivable. Excluding an amount owed by SBC to the Company
-------------------
of $600,000, the Company has approximately $350,000.00 of Accounts Receivable
which are expected to be collected in full within ninety (90) days of Closing.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES OF BUYER
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Buyer hereby represents and warrants to the Sellers as follows:
5.1 Due Incorporation.
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Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, has full power and authority
to carry on its business as it is now conducted and to own, lease and operate
the property and assets that it now owns, leases and operates and to perform the
transactions contemplated hereby.
5.2 Authority.
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The execution, delivery and performance of this Agreement and the
transactions contemplated hereby by Buyer have been duly and effectively
authorized by all necessary action of Buyer, and this Agreement is a valid,
legally binding and enforceable obligation of Buyer, enforceable in accordance
with its terms.
5.3 No Conflict.
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The execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby by Buyer will not (i)
violate any provision of their Articles of Incorporation or By-Laws; (ii)
violate, conflict with or result in a modification of the effect of, or
otherwise give any other contracting party the right to terminate, or constitute
(or with notice or lapse of time or both, constitute) a default under, or result
in the termination of, or accelerate the performance required by, or cause the
acceleration of the maturity of any liability or obligation pursuant to, or
result in the creation or imposition of any security interest, lien, charge or
other encumbrance upon the Buyer's business or assets, under (a) any statute or
law or any judgment, decree, order, award, writ, injunction, regulation or rule
of any court, arbitrator or governmental or regulatory authority, or (b) any
note, bond, mortgage, indenture, deed of trust, license, lease, instrument,
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character; or (iii) violate any statute, law or regulation as such
statute, law or regulation relates to Buyer.
5.4 Broker's or Finder's Fees.
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No agent, broker, person or firm acting on behalf of Buyer is, or will
be, entitled to any commission or broker's or finder's fees from any of the
parties hereto, or from any person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated herein.
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ARTICLE VI
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COVENANTS
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6.1 Best Efforts.
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(a) Each of the Company and the Sellers shall use their best
efforts to cause all of the conditions contained in Article VII of this
Agreement to be satisfied.
(b) Buyer shall use its best efforts to cause all of the
conditions contained in Article VII of this Agreement to be satisfied.
6.2 Access to Records.
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For a period of five (5) years after the Closing, Buyer shall permit
the Sellers, at the Sellers' expense, upon Sellers' reasonable request with at
least ten (10) days' notice, to inspect records, books and other documents that
existed at or prior to the Closing and that relate to the Company, wherever
located, during normal business hours, for the purposes of preparing tax returns
and financial statements and responding to tax audits, in all cases solely with
respect to matters arising prior to the Closing Date.
ARTICLE VII
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CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
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Unless waived in writing by Buyer in its sole discretion, the obligations
of Buyer hereunder shall be subject to the fulfillment, prior to or at the
Closing, of each of the following conditions precedent:
7.1 Representations, Warranties and Covenants.
---------------------------------------------
(a) As of the Closing Date, neither the Sellers nor the Company
shall have become aware of any fact or circumstance which would indicate that
any of the representations and warranties of the Sellers and the Company
contained in this Agreement are not true.
(b) The Sellers and the Company shall have performed and complied
in all respects with all of its agreements, covenants and conditions required by
this Agreement to be performed or complied with by them prior to or at the
Closing Date.
(c) The Company and the Sellers shall have delivered to Buyer a
certificate of the Company's President or any Vice President certifying the
fulfillment of the conditions set forth in this Section 7.1 (the "Closing
Certificate").
7.2 No Proceeding or Litigation.
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(a) No preliminary or permanent injunction or other order issued
by any governmental or regulatory body, whether federal, state or foreign, shall
have been issued and remain in effect, nor shall any statute, rule, regulation
or executive order be promulgated or
7
enacted by any governmental or regulatory body, whether federal, state or
foreign, in each case which prevents the consummation of the transactions
contemplated in this Agreement.
(b) No suit, action, claim, proceeding or investigation before any
governmental or regulatory body, whether federal, state or foreign shall have
been commenced and be pending against Buyer or any of its affiliates,
associates, officers or directors seeking to prevent the sale of the Stock to
Buyer or asserting that the sale of the Stock to Buyer would be illegal.
7.3 Retirement of Loans and Debts.
----------------------------------
(a) The Company shall have retired all loans owed to and from
shareholders of the Company;
7.4 Closing Deliveries.
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The Sellers shall have delivered to Buyer, or shall have caused the
Company to deliver to Buyer all deliveries to be made to Buyer pursuant to
Section 1.3.
ARTICLE VIII
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CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
--------------------------------------------
Unless waived in writing by the Sellers, the obligations of the Sellers
hereunder shall all be subject to the fulfillment, prior to or at the Closing,
of each of the following conditions precedent:
8.1 Representations, Warranties and Covenants.
---------------------------------------------
(a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date, except for any representation or warranty expressly stated to have been
made or given as of a specified date, which, at the Closing Date, shall be true
and correct in all material respects as of the date expressly stated.
(b) Buyer shall have performed and complied in all respects with
all of its agreements, covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing Date.
(c) Buyer shall have delivered to the Sellers a certificate of its
president or any vice president certifying the fulfillment of the conditions set
forth in this Article VIII (the "Buyer's Closing Certificate").
8.2 No Proceeding or Litigation.
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(a) Except as listed on SCHEDULE 8.2, no preliminary or permanent
injunction or other order issued by any governmental or regulatory body, whether
federal, state or foreign,
8
shall have been issued and remain in effect, nor shall any statute, rule,
regulation or executive order be promulgated or enacted by any governmental or
regulatory body, whether federal, state or foreign, in each case which prevents
the consummation of the transactions contemplated in this Agreement.
(b) Except as listed on SCHEDULE 8.2, no suit, action, claim,
proceeding or investigation before any governmental or regulatory body, whether
federal, state or foreign, shall have been commenced and be pending against the
Company or the Sellers or any of their respective affiliates, associates,
officers or directors seeking to prevent the sale of the Stock or asserting that
the sale of the Stock would be illegal.
8.3 Closing Deliveries.
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Buyer shall have delivered to the Sellers all deliveries to be made to
it pursuant to Article II.
ARTICLE IX
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INDEMNIFICATION
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9.1 Indemnification by the Sellers.
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Buyer and its officers, directors, employees, agents, successors and
assigns shall be indemnified and held harmless by the Sellers from any and all
liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including, without limitation, reasonable legal costs
and expenses) actually suffered or incurred by it (hereinafter a "Buyer Loss"),
arising out of or resulting from:
(a) the breach of any representation or warranty by the Sellers or
the Company contained herein;
(b) the breach of any covenant or agreement by the Company or the
Sellers contained herein or in any document delivered hereunder at the Closing;
or
(c) any investigation, suit, action or other proceeding against
Company or any Sellers by or before any court or governmental or regulatory
agency which seeks to restrain, modify, prohibit or revoke, or seeks
damages or other relief in connection with the consummation of this
transaction.
9.2 Indemnification by Buyer.
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Except as otherwise limited by this Article IX, the Sellers and their
successors and assigns shall be indemnified and held harmless by Buyer from any
and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including, without limitation, reasonable legal
costs and expenses) actually suffered or incurred by them (hereinafter, a
"Sellers' Loss") arising out of or resulting from:
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(a) the breach of any representation or warranty by Buyer
contained herein; or
(b) the breach of any covenant or agreement by Buyer contained
herein or in any document delivered hereunder at the Closing.
9.3 General Indemnification Provisions.
------------------------------------
(a) For the purposes of this Section 7.3, the term "Indemnitee"
shall refer to the person indemnified, or entitled, or claiming to be entitled
to be indemnified, pursuant to the provisions of Section 7.1 or 7.2, as the case
may be; the term "Indemnitor" shall refer to the person having the obligation to
indemnify pursuant to such provisions; and "Losses" shall refer to the "Sellers'
Losses" or the "Buyer Losses", as the case may be.
(b) An Indemnitee shall give written notice (a "Notice of Claim")
to the Indemnitor within ten business days after the Indemnitee has knowledge of
any claim (including a Third Party Claim, as hereinafter defined) which an
Indemnitee has determined has given or could give rise to a right of
indemnification under this Agreement. No failure to give such Notice of Claim
shall affect the indemnification obligations of the Indemnitor hereunder, except
to the extent Indemnitor can demonstrate such failure materially prejudiced such
Indemnitor's ability to successfully defend the matter giving rise to the claim.
The Notice of Claim shall state the nature of the claim, the amount of the Loss,
if known, and the method of computation thereof, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises.
(c) The obligations and liabilities of an Indemnitor under this
Article IX with respect to Losses arising from claims of any third party that
are subject to the indemnification provisions provided for in this Article IX
("Third Party Claims") shall be governed by and contingent upon the following
additional terms and conditions: the Indemnitee at the time it gives a Notice
of Claim to the Indemnitor of the Third Party Claim shall advise the Indemnitor
that it shall be permitted, at its option, to assume and control the defense of
such Third Party Claim at its expense and through counsel of its choice if it
gives prompt notice of its intention to do so to the Indemnitee and confirms
that the Third Party Claim is one with respect to which the Indemnitor is
obligated to indemnify. In the event the Indemnitor exercises its right to
undertake the defense against any such Third Party Claim as provided above, the
Indemnitee shall cooperate with the Indemnitor in such defense and make
available to the Indemnitor all witnesses, pertinent records, materials and
information in its possession or under its control relating thereto as is
reasonably required by the Indemnitor. Similarly, in the event the Indemnitee
is, directly or indirectly, conducting the defense against any such Third Party
Claim, the Indemnitor shall cooperate with the Indemnitee in such defense and
make available to it all such witnesses, records, materials and information in
its possession or under its control relating thereto as is reasonably required
by the Indemnitee. Except for the settlement of a Third Party Claim which
involves the payment of money only and for which the Indemnitee is totally
indemnified by the Indemnitor, no Third Party Claim may be settled by the
Indemnitor without the written consent of the Indemnitee, which consent shall
not be unreasonably withheld. Similarly, no Third Party Claim may be settled by
the Indemnitee without the written consent of the Indemnitor, which consent
shall not be unreasonably withheld.
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9.4 Adjustment of Liability.
--------------------------
Any indemnifiable Sellers' Loss or Buyer Loss, as the case may be,
shall be reduced by any tax benefit accruing to the indemnified party on account
of the indemnification payment and by the amounts actually recovered by the
indemnified party from its insurance carriers and any amounts recovered by such
party subsequent to the payment by the indemnifying party hereunder with respect
to the same claim shall be remitted to such indemnifying party, except that such
remittance shall not exceed the amount of the indemnification payment made by
such indemnifying party. Buyer agrees after the Closing Date to maintain
insurance coverage substantially equivalent to the coverage currently maintained
by Company to the extent that such policies provide coverage for Buyer Losses,
provided that such insurance coverage is available at commercially reasonable
rates and upon commercially reasonable terms.
9.5 Limits on Indemnification.
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Any claim against Sellers shall be limited to the Purchase Price.
9.6 Waiver of Contribution.
-------------------------
The Sellers shall have no right to seek contribution from the Company
in the event that the Sellers are required to make any payments under this
Article IX.
9.7 Specific Performance.
----------------------
In addition to any other remedies that the Buyer may have at law or in
equity, the Sellers hereby acknowledge that the Common Stock and the Company are
unique, and that the harm to the Buyer resulting from breaches by the Sellers or
the Company of their obligations may not be adequately compensated by damages.
Accordingly, the Sellers agree that the Buyer shall have the right to have all
obligations, undertakings, agreements, covenants, and other provisions of this
Agreement specifically performed by the Sellers and the Company and that the
Buyer shall have the right to seek an order or decree of such specific
performance in any of the courts of the United States of America or of any state
or other political subdivision thereof.
9.8 Remedies Cumulative.
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The remedies provided herein shall be cumulative and shall not
preclude the assertion by the Sellers or the Buyer of any other rights or the
seeking of any other remedies against the other, or their respective successors
or assigns.
ARTICLE X
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SURVIVAL
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10.1 Survival of Representations. The representations and warranties
-----------------------------
made solely by the Company herein shall terminate upon the Closing. The
representations and warranties of the Company and the Sellers set forth in
Article IV and of Buyer in Article V, all other obligations of the parties
hereunder, shall survive the Closing and, except for (i) the covenant set forth
in
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Section 7.2, which shall survive the Closing until the expiration of the
applicable statute of limitations; (ii) the covenant set forth in 7.2 which
shall continue in effect in accordance with its terms; and (iii) the provisions
of Article VII with respect to indemnification (collectively, the "Surviving
Obligations"), shall expire on the third anniversary of the Closing Date, and
thereafter, except as provided in the next succeeding sentence, no claim may be
brought arising under or in connection with this Agreement or any of the
transactions contemplated hereby, except for a breach by a party of its
obligations under the Surviving Obligations. If written notice of a claim has
been given by a party prior to the fourth anniversary of the Closing Date, then
the relevant representation, warranty or other obligation shall survive as to
such claim until the claim has been finally resolved.
ARTICLE XI
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RESTRICTIVE COVENANT
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11.1 Restrictive Covenant
---------------------
Provided that there is no breach of this Agreement by Buyer, the
Sellers shall not, anywhere in the United States for a period of two (2) years
from and after the date hereof, directly or indirectly, engage in any business
in direct competition with the Company. If any provision of this paragraph is
held invalid, such provisions shall be severed and the balance thereof shall
remain valid and enforceable. In the event that a court of competent
jurisdiction determines that the scope of business restricted or the time or
geographical limitations imposed are too broad to be capable of enforcement,
such court may ignore such provisions and instead enforce such provisions as to
such scope, time and geographical areas as the court deems proper.
ARTICLE XII
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AMENDMENT ANDWAIVER
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12.1 Amendment.
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This Agreement may not be amended except by an instrument in writing
and signed by Buyer, the Company, and the Sellers.
12.2 Waiver.
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Except as otherwise provided in this Agreement, any failure of either
of the parties to comply with any provision hereof may be waived by the party
entitled to the benefit thereof only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such provision shall not operate as a waiver of or estoppel with
respect to, any subsequent or other failure.
ARTICLE XIII
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MISCELLANEOUS
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13.1 Non-Circumvention. The Sellers agree that unless negotiations
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between Buyer and Sellers are earlier terminated by mutual agreement, the
Sellers with regard to the Company will not engage or continue with any current
negotiations or sign any agreements with any person or entity relating in any
way to (i) the sale by the Company of substantially all of its assets or equity
interests, or (ii) a merger of consolidation involving the Company in any way.
The Non- Circumvention Period may be terminated at any time by the Sellers if
the Closing has not occurred by June 15, 2006, unless extended pursuant to the
Closing Extension provision of Article 3.
13.2 Purchase Investigation. Upon execution of this Agreement, Sellers
------------------------
will make available to Buyer and Buyer's representatives, and give them access
to inspect, the physical properties and the books, records, clients and
employees and all other information of the Sellers pertaining to the operation
of the Company. In that regard, the Sellers will provide Buyer with copies of
agreements, accounting statements and records, employee benefit plans and other
records pertaining to the business of the Company, whether or not material.
13.3 Conduct of Business. Until Closing, Sellers will use their best
---------------------
efforts to conduct the Company's business in a reasonable and prudent manner in
accordance with past practices; will engage in no transaction outside of the
ordinary course of business, will enter into no agreement or transaction
extending beyond the Closing Date; will use their best efforts to preserve their
existing business organization and relations with their employees, customers,
suppliers and others with whom it has a business relationship; will not dispose
of any of the assets, except such as are retired and replaced in the ordinary
course of business; will conduct their business in compliance with all
applicable laws and regulations; will not make any distributions and will not
pay any bonuses or make any salary or wage increases not in the ordinary course
of business.
13.4 Personnel. Except as provided for in the Employment Agreements
---------
with the Sellers, Buyer shall have no obligation to maintain any employee of the
Company after Closing and nothing contained herein shall be deemed to create
third-party beneficiary rights of any nature whatsoever on behalf of the
employees of the Company.
13
13.5 Licenses. It shall be a condition to Buyer's obligation to
--------
purchase that Buyer be provided, on the same basis upon which the Company
presently enjoys, all rights to use all licenses necessary to conduct the
business of the Company as the same is now conducted including but not limited
to the assignment of any leases. Any royalty income payable to the Sellers or
the Company after Closing shall become the property of Buyer. Buyer agrees to
assume all such licenses and other agreements under which the Sellers enjoy the
right to use technology.
13.6 Government Permits. It shall be a condition of Buyer's obligation
-------------------
to purchase that all permits and licenses necessary to the operation of the
Company's facilities be assigned to the Buyer. The Sellers and the Company will
use their reasonable efforts to cause such permits and licenses to be assigned
to Buyer on the same terms and conditions on which they are issued and Buyer
agrees to assume such permits and licenses.
13.7 Designated Purchaser; No Other Assignment.
---------------------------------------------
The Company and the Sellers acknowledge and agree that Buyer or a new
entity representing Buyer's Telecommunications Group, or an existing entity of
the Buyer, if mutually agreed to by Buyer and Seller (the "Designated
Purchaser") shall be used by Buyer to carry out all or part of the transactions
contemplated by this Agreement and, in connection therewith, Buyer may assign
any and all of its rights hereunder and any and all of its duties and
obligations hereunder to such Designated Purchaser. No other assignment by any
of the parties of their respective rights nor delegation by any of the parties
of their respective duties shall be permitted hereunder.
13.8 Intended Beneficiaries.
-----------------------
The Company and the Sellers acknowledge and agree that any Designated
Purchaser shall be an intended beneficiary of each of the representations,
warranties, covenants, indemnities, and other agreements made by the Company and
the Sellers in and under the terms of this Agreement as fully and completely as
if the Designated Purchaser were named as a party to this Agreement and such
representations, warranties, covenants, indemnities, and other agreements made
by the Company and the Sellers were made expressly to and in favor of the
Designated Purchaser. Except for the parties hereto and any Designated
Purchaser, the Company, the Sellers and Buyer agree that no other person is
intended to be a beneficiary of this Agreement.
13.9 Costs.
-----
Except as otherwise provided in this Agreement, Buyer will pay its
fees and expenses and Company will pay its fees and expenses incurred in
connection with the negotiation, preparation, and performance of this Agreement.
13.10 Confidentiality.
---------------
Buyer, the Company, and the Sellers will hold, and will cause their
employees, representatives, agents and affiliated persons to hold in strict
confidence, and not disclose to any other party, and not use in any way except
in connection with the transactions contemplated
14
hereby, without the prior written consent of the other party, all confidential
information obtained from the other party in connection with the transactions
contemplated by this Agreement (including the existence of this Agreement, any
of the terms hereof, and the negotiations between the parties hereto), except
such information may be disclosed: (a) where necessary, to any potential lenders
or investors (or others providing debt or equity financing to Buyer in
connection with the acquisition of the Stock); (b) to applicable governmental or
regulatory authorities and, where necessary, to any other person in connection
with the obtaining of the Licenses and Approvals and the consents or waivers
contemplated or required by the terms of this Agreement; (c) if required by
court order or decree or any applicable law; (d) if it is publicly available
through no act or failure to act of such party; (e) was already known to such
party on a confidential basis on the date of receipt; (f) during the course of
or in connection with any litigation, governmental investigation, arbitration or
other proceedings based upon or in connection with the subject matter of this
Agreement, including the failure of the transactions contemplated hereby to be
consummated; or (g) if it is otherwise expressly provided for herein.
13.11 Parties in Interest.
----------------------
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors, heirs, personal representatives, and
assigns permitted under the terms of this Agreement.
13.12 Set Off.
---------
Buyer is hereby authorized to the fullest extent permitted by law, to
set off and to apply any and all amounts due from Buyer to Sellers under this
Agreement, including any amount owed to Sellers pursuant to the Earn Out
provisions of Section 2.4, and any other indebtedness at any time owing by Buyer
to or for the account of Sellers against any and all of the obligations of Buyer
now or hereafter existing under this Agreement with respect to which Buyer has
obtained a certified judgment from a Court of competent jurisdiction. In
addition, Buyer shall have the same Set Off rights for a default of the
representations contained in Sections 4.14, 4.15, 4.16 or 4.17 without having to
first have received a judgment. The rights of Buyer under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set off) which Buyer may have.
13.13 Entire Agreement; No Oral Modifications or Waivers.
---------------------------------------------------------
This Agreement, the Exhibits, Schedules and other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter and supersede
all prior oral and written agreements and understandings between the parties
with respect to its subject matter. This Agreement may be modified and any of
its provisions may only be waived in a writing signed by the party against whom
such modification or waiver is sought to be enforced pursuant to Paragraph 10.1.
13.14 Headings.
---------
The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15
13.15 Notices.
--------
All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally by hand, telecopied or facsimile sent, or if
sent by recognized overnight courier service (e.g. Federal Express), or if sent
by U.S. registered or certified mail, postage prepaid, return receipt requested
(three (3) business days after mailing or one business day in the case of
express mail or overnight courier service), as follows:
If to Buyer:
--------------
Charys Holding Company, Inc
0000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxx X000
Xxxxxxx, XX 00000
ATTN: Xxxxx X Xxx, Xx.
Fax: 000-000-0000
If to Company:
----------------
Digital Communications Services, Inc.
00 Xxxxx 0xx Xxxxxx
Xxxxxx Xxxxx, XX 00000
If to Sellers:
----------------
Digital Communications Services, Inc.
00 Xxxxx 0xx Xxxxxx
Xxxxxx Xxxxx, XX 00000
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
13.16 Counterparts.
-------------
This Agreement may be executed simultaneously in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.17 Governing Law.
---------------
This Agreement is governed by and construed and enforced in accordance
with the laws of the State of Georgia (excluding conflicts of laws rules).
13.18 Severability.
-------------
A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof. If it shall be
16
determined by any court or governmental agency or authority that any provision
of this Agreement is invalid for any reason, such provision shall be considered
to be reduced to the extent required to cure such invalidity.
13.19 Further Assurances.
--------------------
From time to time, at Buyer's request and without further
consideration, the Company and the Sellers shall execute and deliver to Buyer
such documents and take such other action as Buyer may reasonably request in
order to consummate more effectively the transactions contemplated hereby.
13.20 No Drafting Presumption.
--------------------------
Each of the parties hereto shall be deemed to have participated
equally in the drafting and preparation of this Agreement and, accordingly, no
presumption shall arise concerning the interpretation of any of the provisions
hereof with respect to the party or parties responsible for its preparation.
13.21 Incorporation by Reference. Use of Certain Terms.
-------------------------------------------------------
All Exhibits and Schedules attached to this Agreement shall be deemed
incorporated herein by reference as if fully set forth herein. Use of the term
"including" shall be deemed to mean "including but not limited to".
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the date first above written.
WITNESS/ATTEST: COMPANY:
Digital Communication Services, Inc.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
------------------------------ -------------------------------
Xxxxxx X. Xxxxxxx
Secretary Treasurer
BUYER:
17
illegible By: /s/ Xxxxx X. Xxx Xx. (SEAL)
------------------------------ -------------------------------
Name: Xxxxx X. Xxx Xx.
-------------------------
Its: CEO
--------------------------
SELLERS
illegible /s/ Xxxxx X. Xxxxxxx
------------------------------ ----------------------------------
Xxxxx X. Xxxxxxx
illegible /s/ Xxxxxx X. Xxxxxxx
------------------------------ ----------------------------------
Xxxxxx X. Xxxxxxx
18
illegible By: /s/ Xxxxx X. Xxx Xx. (SEAL)
------------------------------ -------------------------------
Name: Xxxxx X. Xxx Xx.
--------------------------
Its: CEO
--------------------------
SELLERS
/s/ Xxxxx X. Xxxxxxx
------------------------------ ----------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
------------------------------ ----------------------------------
Xxxxxx X. Xxxxxxx
19
determined by any court or governmental agency or authority that any provision
of this Agreement is invalid for any reason, such provision shall be considered
to be reduced to the extent required to cure such invalidity.
13.19 Further Assurances.
--------------------
From time to time, at Buyer's request and without further
consideration, the Company and the Sellers shall execute and deliver to Buyer
such documents and take such other action as Buyer may reasonably request in
order to consummate more effectively the transactions contemplated hereby.
13.20 No Drafting Presumption.
--------------------------
Each of the parties hereto shall be deemed to have participated
equally in the drafting and preparation of this Agreement and, accordingly, no
presumption shall arise concerning the interpretation of any of the provisions
hereof with respect to the party or parties responsible for its preparation.
13.21 Incorporation by Reference, Use of Certain Terms.
-------------------------------------------------------
All Exhibits and Schedules attached to this Agreement shall be deemed
incorporated herein by reference as if fully set forth herein. Use of the term
"including" shall be deemed to mean "including but not limited to".
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the date first above written.
WITNESS/ATTEST: COMPANY:
Digital Communication Services, Inc.
By: (SEAL)
----------------------- -------------------------------
BUYER:
20
illegible By: /s/ Xxxxx X. Xxx Xx. (SEAL)
------------------------------ -------------------------------
Name: Xxxxx X. Xxx Xx.
--------------------------
Its: CEO
--------------------------
SELLERS
------------------------------ ----------------------------------
Xxxxx X. Xxxxxxx
------------------------------ ----------------------------------
Xxxxxx X. Xxxxxxx
21
EXHIBIT A
STATE OF GEORGIA , 2006
---------------
COUNTY OF XXXXXX $640,000.00
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, Charys Holding Company,
Inc., (the "Borrower"), promises to pay to the order of Xxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxxxx. (herein the "Lender" and, along with each subsequent holder
of this Note, referred to as the "Holder"), the principal sum of SIX HUNDRED
FORTY THOUSAND ($640,000.00). The Note shall bear no interest.
All principal hereof shall be payable on or before June 30, 2006. If
needed, Borrower shall have a grace period of and additional fifteen (15) days
before Holder may declare a default.
All parties liable for the payment of this Note agree to pay the
Holder hereof an amount equal to ten percent (10%) of the principal and interest
outstanding as attorneys' fees for the services of counsel employed to collect
this Note, whether or not suit be brought, and whether incurred in connection
with collection, trial, appeal, or otherwise, and to indemnity and hold the
Holder harmless against liability for the payment of state intangible,
documentary and recording taxes, and other taxes (including interest and
penalties, if any) which may be determined to be payable with respect to this
transaction.
The remedies of the Holder as provided herein and in any other
documents governing or securing repayment hereof shall be cumulative and
concurrent and may be pursued singly, successively, or together, at the sole
discretion of the Holder, and may be exercised as often as occasion therefore
shall arise.
No act of omission or commission of the Holder, including specifically
any failure to exercise any right, remedy, or recourse, shall be effective
unless set forth in a written document executed by the Holder, and then only to
the extent specifically recited therein. A waiver or release with reference to
one event shall not be construed as continuing, as a bar to, or as a waiver or
release of any subsequent right, remedy, or recourse as to any subsequent event.
The Borrower and all sureties, endorsers, and guarantors of this Note
hereby (a) waive demand, presentment of payment, notice of nonpayment, protest,
notice of protest and all other notice, filing of suit, and diligence in
collecting this Note, or in enforcing any of its rights under any guaranties
securing the repayment hereof; (b) agree
to any substitution, addition, or release of any collateral or any party or
person primarily or secondarily liable hereon; (c) agree that the Holder shall
not be required first to institute any suit, or to exhaust his, their, or its
remedies against the Borrower or any other person or party to become liable
hereunder, or against any collateral in order to enforce payment of this Note;
(d) consent to any extension, rearrangement, renewal, or postponement of time of
payment of this Note and to any other indulgence with respect hereto without
notice, consent, or consideration to any of them; and (e) agree that,
notwithstanding the occurrence of any of the foregoing (except with the express
written release by the Holder or any such person), they shall be and remain
jointly and severally, directly, and primarily, liable for all sums due under
this Note.
Whenever used in this Note, the words "Borrower" and "Holder" shall be
deemed to include the Borrower and the Holder named in the opening paragraph of
this Note, and their respective heirs, executors, administrators, legal
representatives, successors, and assigns. It is expressly understood and agreed
that the Holder shall never be construed for any purpose as a partner, joint
venturer, co-principal, or associate of the Borrower, or of any person or party
claiming by, through, or under the borrower in the conduct of their respective
businesses.
Time is of the essence of this Note.
This Note shall be construed and enforced in accordance with the laws
of the State of Georgia.
The pronouns used herein shall include, when appropriate, either
gender and both singular and plural, and the grammatical construction of
sentences shall conform thereto.
All references herein to any document, instrument, or agreement shall
be deemed to refer to such document, instrument, or agreement as the same may be
amended, modified, restated, supplemented, or replaced from time to time.
IN WITNESS WHEREOF, the undersigned Borrower has executed
this instrument under seal as of the day and year first above written.
Charys Holding Company, Inc.
By: /s/ Xxxxx X. Xxx X
--------------------------------
Name: /s/ Xxxxx X. Xxx .
------------------------------
Its: CEO
-------------------------------
substitution, addition, or release of any collateral or any party or person
primarily or secondarily liable hereon; (c) agree that the Holder shall not be
required first to institute any suit, or to exhaust his, their, or its remedies
against the Borrower or any other person or party to become liable hereunder, or
against any collateral in order to enforce payment of this Note; (d) consent to
any extension, rearrangement, renewal, or postponement of time of payment of
this Note and to any other indulgence with respect hereto without notice,
consent, or consideration to any of them; and (e) agree that, notwithstanding
the occurrence of any of the foregoing (except with the express written release
by the Holder or any such person), they shall be and remain jointly and
severally, directly, and primarily, liable for all sums due under this Note.
Whenever used in this Note, the words "Borrower" and "Holder" shall be
deemed to include the Borrower and the Holder named in the opening paragraph of
this Note, and their respective heirs, executors, administrators, legal
representatives, successors, and assigns. It is expressly understood and agreed
that the Holder shall never be construed for any purpose as a partner, joint
venturer, co-principal, or associate of the Borrower, or of any person or party
claiming by, through, or under the borrower in the conduct of their respective
businesses.
Time is of the essence of this Note.
This Note shall be construed and enforced in accordance with the laws
of the State of Georgia.
The pronouns used herein shall include, when appropriate, either
gender and both singular and plural, and the grammatical construction of
sentences shall conform thereto.
All references herein to any document, instrument; or agreement shall
be deemed to refer to such document, instrument, or agreement as the same may be
amended, modified, restated, supplemented, or replaced from time to time.
IN WITNESS WHEREOF, the undersigned Borrower has executed this instrument
under seal as of the day and year first above written.
Charys Holding Company, Inc.
By: /s/ Xxxxx X. Xxx Xx.
--------------------------------
Name: /s/ Xxxxx X. Xxx Xx.
------------------------------
Its: CEO
-------------------------------
EXHIBIT B
EMPLOYMENT AGREEMENT
--------------------
I, XXXXX X. XXXXXXX, an individual ("Executive") residing in ____________ agree
to the terms and conditions of employment with DIGITAL COMMUNICATIONS SERVICES,
INC. A Kentucky corporation located at 00 XX 0xx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx
00000 ("Company"), set forth in this Employment Agreement ("Agreement").
1. TERM OF EMPLOYMENT. My employment under this Agreement shall
commence on June 1, 2006 and shall end on the third anniversary of that date
(Expiration Date), or such earlier date on which my employment is terminated
under Section 5 of this Agreement. On each anniversary of my commencement of
employment under this Agreement, the Expiration Date shall be extended for one
year unless the Company notified me at least thirty (30) days before that
anniversary that it was not extending this Agreement. If the Company
continues to employ me beyond the Expiration Date without entering into a
written agreement extending the term of this Agreement, except as provided in a
new written employment agreement between the Company and me, all obligations and
rights under this Agreement shall prospectively lapse as of the Expiration
Date, except the Company's ongoing indemnification obligation under Section
4, my confidentiality, etc. obligations under Section 6, and our mutual
arbitration obligations under Section 8, and I thereafter shall be an at-will
employee of the Company.
2. NATURE OF DUTIES. I shall be the Co-President and Chief
Financial Officer of the Digital Communications Services subsidiary of Charys
Holding Company. As such, I shall have the responsibilities set forth in
APPENDIX A. I agree that the Company may alter my duties from time to time if
such duties are consistent with that of the position held by the Executive. I
shall devote substantially, all my business time and effort to the performance
of my duties for the Company, which I shall perform faithfully and to the best
of my ability. I shall be subject to the Company's policies, procedures and
approval practices, as generally in effect from time to time. Notwithstanding
the foregoing or any other provision of this Agreement, it shall not be a breach
or violation of this Agreement for me to (i) serve on corporate (subject to
approval of the Board), civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions,
(iii) manage personal investments so long as such activities do not
significantly interfere with or significantly detract from the performance of my
responsibilities to the Company in accordance with this agreement, or (iv)
travel for health reasons related to immediate family members.
3. PLACE OF PERFORMANCE. I shall be based at the Company's office
in Tampa, FL, except for required travel on the Company's business.
4. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. The Company shall pay me, or designated business
entity, a base salary at an annual rate as determined by APPENDIX A. attached
hereto and made a part hereof, with such base salary payable in installments
consistent with the Company's normal payroll schedule, subject to applicable
withholding and other taxes.
(b) DISCRETIONARY BONUSES AND STOCK OPTIONS. Following the
Earn out period described in EXHIBIT C of the Digital Communications Services
Stock Purchase agreement, I shall be eligible for bonuses and other incentive
compensation under bonus and incentive compensation plans generally available to
other similarly situated Company executives.
(c) STANDARD BENEFITS. During my employment, I shall be
entitled to participate in all employee benefit plans and programs, including
paid vacations, to the same extent generally available to other similarly
situated Company executives, in accordance with the terms of those plans and
programs. The Company shall have the right to terminate or change any such plan
or program at any time.
(d) INDEMNIFICATION. The Company shall extend to me the
same indemnification arrangements as are generally provided to other similarly
situated Company executives, including after termination of my employment.
(e) EXPENSES. I shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and business expenses I
incur in connection with my employment, but I must incur and account for those
expenses in accordance with the policies and procedures established by the
Company.
(f) XXXXXXXX-XXXXX ACT LOAN PROHIBITION. To the extent that
any Company benefit, program, practice, arrangement, or this Agreement would or
might otherwise result in my receipt of an illegal loan (Loan), the Company
shall use reasonable efforts to provide me with a substitute for the Loan that
is lawful and of at least equal value to me. If this cannot be done, or if doing
so would be significantly more expensive to the Company than making the Loan,
the Company need not make the Loan to me or provide me substitute for it.
5. TERMINATION.
(a) RIGHTS AND DUTIES. If my employment is terminated, I shall be
entitled to the amounts or benefits shown on the applicable row of the following
table, subject to the balance of this Section 5. The Company and I shall have no
further obligations to each other, except the Company's ongoing indemnification
obligation under Section 4, my confidentiality, etc. obligations under Section
6, and our mutual arbitration obligations
under Section 8, or as set forth in any written agreement I subsequently enter
into with the Company.
--------------------------------------------------------------------------------------------
DISCHARGE Payment or provision when due of (1) any unpaid base salary,
FOR CAUSE expense reimbursements, and vacation days accrued prior to
termination of employment, and (2) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans,
including any Earn Out compensation computed up to the date of
termination of employment.
--------------------------------------------------------------------------------------------
DISABILITY Same as for "Discharge for Cause" EXCEPT that I also shall be
potentially eligible for disability benefits under any Company-
provided disability plan in which I then participate.
--------------------------------------------------------------------------------------------
DISCHARGE OTHER Same as for "Discharge for Cause" EXCEPT that, in exchange for
THAN FOR CAUSE my execution of a release in accordance with this section, my Base
OR DISABILITY Salary, but not my employment, shall continue through for one (1)
year regardless of the remaining term of this Agreement.
--------------------------------------------------------------------------------------------
RESIGNATION Same as for "Discharge for Cause."
--------------------------------------------------------------------------------------------
DEATH Same as for "Discharge for Cause" EXCEPT that payments shall be
made to my legal representative
--------------------------------------------------------------------------------------------
EXPIRATION
OF Same as for "Discharge for Cause."
AGREEMENT
--------------------------------------------------------------------------------------------
CHANGE OF Payment or provision when due of (1) any unpaid base salary,
CONTROL expense reimbursements, and vacation days accrued prior to
termination of employment, (2) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans
(3) pay to the Executive on the termination date a lump sum payment
equal to three (3) times Base Salary as of the date of my resignation
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
resulting from the Change in Control and (4) all stock options
previously granted to Employee shall become fully vested and
immediately exerciseable
--------------------------------------------------------------------------------------------
(b) DISCHARGE FOR CAUSE. The Company may terminate my
employment at any time if it believes in good faith that it has Cause to
terminate me. "Cause" shall include, but not be limited to:
(i) my refusal to follow the Company's lawful directions
or my material failure to perform my duties (other than by reason of physical or
mental illness, injury, or condition), in either case, after I have been given
notice of my default and a 10 day opportunity to cure my default;
(ii) my failure to comply with Company policies;
(i) my engaging in conduct that is or may be unlawful or disreputable, to
the possible detriment of the Company and its subsidiaries n;
(ii) my becoming insolvent or filing for bankruptcy;
(iii) my seeking, exploring, or accepting a position
with another business enterprise or venture without the Company's written
consent at any time more than 90 days before the Expiration Date; or
(iv) my engaging in activities on behalf of an
enterprise which competes or plans to compete with the Company or any of its
subsidiaries or affiliates.
(c) TERMINATION FOR DISABILITY. Except as prohibited by
applicable law, the Company may terminate my employment on account of
Disability, or may transfer me to inactive employment status, which shall have
the same effect under this Agreement as a termination for Disability.
"Disability" means a physical or mental illness, injury, or condition that
prevents me from performing my duties with reasonable accommodations for a
period of 30 consecutive days or 60 days in any one-year period.
(d) DISCHARGE OTHER THAN FOR CAUSE OR DISABILITY. The Company
may terminate my employment at any time for any reason, and without advance
notice. If I am terminated by the Company other than for Cause under Section
5(b) or for Disability under Section 5(c), I will only receive the special
benefits provided for a non-Cause discharge under Section 5(a) if I sign a
general release form furnished to me by the Company (which may include any
provision customary in formal settlement agreements and general releases,
including such things as my release of the Company and all
conceivably related persons or entities ("affiliates") from all known and
unknown claims, my covenant never in the future to pursue any released claim, my
promise not to solicit current or former customers, employees, suppliers or, to
the fullest extent lawful, engage in business activities that compete with the
Company or any affiliate, or disclose or use any of their proprietary or trade
secret information) within 60 days after my employment ends (or within 60 days
after an arbitrator determines that I am entitled to such payments if I sign the
general release) and I do not thereafter properly revoke the release. I may
resign my employment within 60 days after a Change of Control in which event I
shall only receive the special benefits provided for a Non-Cause Discharge Due
to a Change of Control under Section 5(a).
(e) RESIGNATION. I promise not to resign my employment before
the Expiration Date without giving the Company at least 30 days advance written
notice. If I resign, I shall only receive the payments required by Section 5A
and the Company may accept my resignation effective on the date set forth in my
notice or any earlier date.
(f) DEATH. If I die while employed under this Agreement,
the payments required by Section 5(a) in the event of my death shall be made to
my legal representative.
(g) TRANSFERS TO GROUP MEMBER. My transfer to a subsidiary of
the Company ["Group Member"] shall not be deemed a termination of my employment
under this Agreement if it assumes this Agreement. However, not withstanding
anything contained to the contrary in this Agreement or the Stock Purchase
Agreement, when the Company achieves revenues greater than or equal to
$1,000,000 for three months of any five month period, together with achieving a
net operating profit, the Company shall be transferred to or made a part of a
separate division or group for Telecommunications Services and the Executive, at
that time shall assume the duties of President of that Division reporting to the
CEO of Charys Holding Company, Inc.
(h) DISPUTES UNDER THIS SECTION. All disputes relating to
this Agreement, including disputes relating to this section, shall be resolved
by final and binding arbitration under Section 8. For example, if the Company
and I disagree as to whether the Company had Cause to terminate my employment,
we will resolve the dispute through arbitration; the arbitrator will decide
whether the Company had Cause to terminate me.
(i) AMOUNTS OWED TO THE COMPANY. Any amounts payable to me
under this section shall first be applied to repay any amounts I owe the
Company.
(j) DEFINITION OF CHANGE OF CONTROL. Consummation by the
company of (x) a reorganization, merger, consolidation or other form of
corporate transaction or series of related transactions, in each case, with
respect to which persons
who were the shareholders of the Company immediately prior to such
reorganization, merger or consolidation or other transaction do not, immediately
thereafter, own more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, in substantially the
same proportions as their ownership immediately prior to such reorganization,
merger, consolidation or other transaction, or (y) the sale of all or
substantially all of the assets of the Company; provided that, with respect to
this Section, a Change in Control shall not be deemed to have occurred should
any of the contingencies referred to in this Section result from terms of
executed contractual agreements, and such terms are in effect on or before the
Commencement Date.
6. CONFIDENTIALITY. I acknowledge that as an integral part of
the Company's business, the Company has developed, and will develop, at a
considerable investment of time and expense, marketing and business plans and
strategies, procedures, methods of operation and marketing, financial data,
lists of actual and potential customers and suppliers, and independent sales
representatives and related data, technical procedures, engineering and product
specifications, plans for development and expansion, and other confidential and
sensitive information, and I acknowledge that the Company has a legitimate
business interest in protecting the confidentiality of such information. I
acknowledge that I will be entrusted with such information as well as
confidential information belonging to customers, suppliers, and other third
parties.
7. "TRADE SECRETS" are defined as information, regardless of
form, belonging to the Company, licensed by it, or disclosed to it on a
confidential basis by its customers, suppliers, or other third parties,
including, but not limited to, technical or nontechnical data, formulae,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, product plans, or lists of actual or potential
customers or suppliers which are not commonly known by or available to the
public and which information: (i) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use; and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
8. "CONFIDENTIAL INFORMATION" is defined as information,
regardless of form, belonging to the Company, licensed by it, or disclosed to it
on a confidential basis by its customers, suppliers, or other third parties,
other than Trade Secrets, which is material and valuable to the Company and not
generally known by the public.
9. PROMISE NOT TO DISCLOSE. I promise never to use or disclose
any Trade Secret before it has become generally known within the relevant
industry through no fault of my own. I agree that this promise shall never
expire. I further promise that, while this Agreement is in effect and for 2
years after its termination, I will not, without the prior
written approval of the Company, use or disclose any Confidential Information
before it has become generally known within the relevant industry through no
fault of my own.
10. PROMISE NOT TO SOLICIT. To prevent me from inevitably breaking
this promise, I further agree that, while this Agreement is in effect and for 18
months after its termination: (1) as to any customer or supplier of the Group
with whom I had dealings or about whom I acquired proprietary information during
my employment, I will not solicit or attempt to solicit (or assist others to
solicit) the customer or supplier to do business with any person or entity other
than the Group; and (2) I will not solicit or attempt to solicit (or assist
others to solicit) for employment any person who is, or within the preceding 12
months was, an officer, manager, employee, or consultant of the Group.
11. PROMISE NOT TO ENGAGE IN CERTAIN EMPLOYMENT. I agree that,
while this Agreement is in effect and for 18 months after its termination, I
will not accept any employment or engage in any activity, without the written
consent of the Company's Board of Directors if the loyal and complete
fulfillment of my duties in such employment would inevitably require me to
reveal or utilize Trade Secrets or Confidential Information, as reasonably
determined by the Company's Board of Directors.
12. RETURN OF INFORMATION. When my employment with the Company
ends, I will promptly deliver to the Company, or, at its written instruction,
destroy, all documents, data, drawings, manuals, letters, notes, reports,
electronic mail, recordings, and copies thereof, of or pertaining to it or any
other Group member in my possession or control. In addition, during my
employment with the Company or the Group and thereafter, I agree to meet with
Company personnel and, based on knowledge or insights I gained during my
employment with the Company and the Group, answer any question they may have
related to the Company or the Group.
13. PROMISE TO DISCUSS PROPOSED ACTIONS IN ADVANCE. To prevent the
inevitable use or disclosure of Trade Secrets or Confidential Information, I
promise that, before I disclose or use Trade Secrets or Confidential Information
and before I commence employment, solicitations, or any other activity that
could possibly violate the promises I have just made, I will discuss my proposed
actions with an attorney for the Company, who will advise me in writing whether
my proposed actions would violate these promises.
14. INTELLECTUAL PROPERTY. Intellectual property (including such
things as all ideas, concepts, inventions, plans, developments, software, data,
configurations, materials (whether written or machine-readable), designs,
drawings, illustrations, and photographs, that may be protectable, in whole or
in part, under any patent, copyright, trademark, trade secret, or other
intellectual property law), developed, created, conceived, made, or reduced to
practice during my Company employment (except intellectual property that has no
relation to the Group or any Group customer that I developed, etc., purely on my
own time and at my own expense), shall be the sole and exclusive property of the
Company, and I hereby assign all my rights, title, and interest in any such
intellectual property to the Company.
15. EXECUTION OF INNOVATION AGREEMENT. I agree to the terms of
the Company's Assignment of Inventions agreement, which is attached to this
Agreement as Schedule 1, and I promise to execute it contemporaneously with this
Agreement.
16. ENFORCEMENT OF THIS SECTION. Sections 6-13 shall survive
the termination of this Agreement for any reason. t; these section's terms are
reasonable and necessary to protect the Company's legitimate interests, these
section's restrictions will not prevent me from earning or seeking a livelihood,
these section's restrictions shall apply wherever permitted by law, and my
violation of any of thee section's term would irreparably harm the Company.
Accordingly, I agree that, if I violate any of the provisions of these sections,
the Company or any Group member shall be entitled to, in addition to other
remedies available to it, an injunction to be issued by any court of competent
jurisdiction restraining me from committing or continuing any such violation,
without the need to prove the inadequacy of money damages or post any bond or
for any other undertaking.
17. NOTICE.
(a) TO THE COMPANY. I will send all communications to the
Company in writing, addressed as follows (or in any other manner the Company
notifies me to use):Charys Holding Company Inc. Attention: Xxxxx Xxx, CEO 0000
Xxxxxxxxx Xxxxxx Xxxx, Xxxxx X 000 Xxxxxxx, Xxxxxxx 00000 Fax: (000) 000-0000
Tel.: (678) 000- 0000.
(b) TO ME. All communications from the Company to me
relating to this Agreement must be sent to me in writing at my Company office or
in any other manner I notify the Company to use.
(c) TIME NOTICE DEEMED GIVEN. Notice shall be deemed to
have been given when delivered or, if earlier (1) when mailed by United States
certified or registered mail, return receipt requested, postage prepaid, or (2)
faxed with confirmation of delivery, in either case, addressed as required in
this section.
18. ARBITRATION OF DISPUTES. All disputes between the Company and
me are to be resolved by final and binding arbitration in accordance with the
separate Arbitration Agreement attached as Schedule 2 to this Agreement. This
section shall remain in effect after the termination of this Agreement.
19. GOLDEN PARACHUTE LIMITATION. I agree that my payments and
benefits under this Agreement and all other contracts, arrangements, or programs
shall not, in the aggregate, exceed the maximum amount that may be paid to me
without triggering
golden parachute penalties under Section 280G and related provisions of the
Internal Revenue Code, as determined in good faith by the Company's independent
auditors. If any benefits must be cut back to avoid triggering such penalties,
my benefits shall be cut back in the priority order designated by the Company.
If an amount in excess of the limit set forth in this section is paid to me, I
will repay the excess amount to the Company upon demand, with interest at the
rate provided for in Internal Revenue Code Section 1274(b)(2)(B). The Company
and I agree to cooperate with each other in connection with any administrative
or judicial proceedings concerning the existence or amount of golden parachute
penalties with respect to payments or benefits I receive.
20. AMENDMENT. No provisions of this Agreement may be modified,
waived, or discharged except by a written document signed by a duly authorized
Company officer and me. Thus, for example, promotions, commendations, and/or
bonuses shall not, by themselves, modify, amend, or extend this Agreement. A
waiver of any conditions or provisions of this Agreement in a given instance
shall not be deemed a waiver of such conditions or provisions at any other time.
21. INTERPRETATION; EXCLUSIVE FORUM. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the state of Georgia (excluding any that mandate the use of another
jurisdiction's laws). Any litigation, arbitration, or similar proceeding with
respect to such matters only may be brought within that state, and all parties
to this Agreement consent to that state's jurisdiction and agree that venue
anywhere in that state would be proper.
22. SUCCESSORS. This Agreement shall be binding upon, and shall
inure to the benefit of, me and my estate, but I may not assign or pledge this
Agreement or any rights arising under it, except to the extent permitted under
the terms of the benefit plans in which I participate. Without my consent, the
Company may assign this Agreement to any affiliate or successor that agrees in
writing to be bound by this Agreement, after which any reference to the
"Company" in this Agreement shall be deemed to be a reference to the affiliate
or successor, and the Company thereafter shall have no further primary,
secondary or other responsibilities or liabilities under this Agreement of any
kind.
23. TAXES. The Company shall withhold taxes from payments it makes
pursuant to this Agreement as it determines to be required by applicable law.
24. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. In the
event that a court of competent jurisdiction determines that any provision of
this Agreement is invalid or more restrictive than permitted under the governing
law of such jurisdiction, then only as to enforcement of this Agreement within
the jurisdiction of such court, such provision shall be
interpreted and enforced as if it provided for the maximum restriction permitted
under such governing law.
25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute the same instrument.
26. ENTIRE AGREEMENT. All oral or written agreements or
representations, express or implied, with respect to the subject matter of this
Agreement are set forth in this Agreement. However, this Agreement does not
override other written agreements I have executed relating to specific aspects
of my employment, such as conflicts of interest.
27. FORMER EMPLOYERS. I am not subject to any employment,
confidentiality, or other agreement or restriction that would prevent me from
fully satisfying my duties under this Agreement or that would be violated if I
did so.
28. DEPARTMENT OF HOMELAND SECURITY VERIFICATION REQUIREMENT. If I
have not already done so, I agree to timely file all documents required by the
Department of Homeland Security to verify my identity and my lawful employment
in the United States. Notwithstanding any other provision of this Agreement, if
I fail to meet any such requirements promptly after receiving a written request
from the Company to do so, I agree that my employment shall terminate
immediately and that I shall not be entitled to any compensation from the
Company of any type.
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL. ,
--------------------------------------------------------------------------------
By: /s/ Xxxxx X. Xxxxxxx Charys Holding Company Inc.
------------------------------
Name: Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxx Xx.
---------------------------- ---------------------------------
Name: Xxxxx X. Xxx Xx.
-------------------------------
Title: CEO
------------------------------
Date: 6-12-06 Date: 6-12-06
---------------------------- -------------------------------
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.
--------------------------------------------------------------------------------
By: Charys Holding Company Inc.
------------------------------
Name: By: /s/ Xxxxx X. Xxx X.
---------------------------- ---------------------------------
Name: Xxxxx X. Xxx X.
-------------------------------
Title: CEO
------------------------------
Date: Date: 6-12-06
---------------------------- -------------------------------
Schedule 1
----------
ASSIGNMENT OF INVENTIONS
------------------------
1. I will promptly disclose in writing to the Company all Inventions. For
purposes of this Agreement, "Invention" shall mean any discovery, whether or not
patentable, as well as improvements thereto, which is conceived or first
practiced by me, alone or in a joint effort with others, whether prior to or
following execution of this Agreement, which: (i) may be reasonably expected to
be used in a product of the Company; (ii) results from work that I have been
assigned as part of my duties as an employee of the Company; (iii) is in an area
of technology which is the same as or substantially related to the areas of
technology with which I am involved; (iv) is useful, or which the Company
reasonably expects may be useful, in any manufacturing or product design process
of the Company; or (v) utilizes any Confidential Information.
2. All Inventions developed while employed by the Company in the scope of
such my employment and duties belong to and are the sole property of the Company
and will be subject to this Agreement. I assign to the Company all right, title,
and interest I may have or may acquire in and to all Inventions. I shall sign
and deliver to the Company (during and after employment) any other documents
that the Company considers reasonably necessary to provide evidence of (i) the
assignment of all of my rights, if any, in any Inventions and (ii) the Company's
ownership of such Inventions.
3. I will assist the Company in applying for, prosecuting, obtaining, or
enforcing any patent, copyright, or other right or protection relating to any
Invention, all at the Company's expense but without consideration to me in
excess of my salary or wages. If the Company requires any assistance after
termination of my employment, I will be compensated for time actually spent in
providing that assistance at an hourly rate equivalent to my salary or wages
during the last period of employment with the Company.
4. If the Company is unable to secure my signature on any document necessary
to apply for, prosecute, obtain, or enforce any patent, copyright, or other
right or protection relating to any Invention, whether due to my mental or
physical incapacity or any other cause, I hereby irrevocably designate and
appoint the Company and each of its duly authorized officers and agents as my
agent and attorney-in-fact, to act for and in my behalf to execute and file any
such document and to do all other lawfully permitted acts
to further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protections, with the same force and effect as if executed and
delivered by me.
Employee: Charys Holding Company Inc.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxx Xx.
------------------------------ --------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
--------------------------------------
Print Name of Employee Title of Representative
Xxxxx X. Xxxxxxx 6-12-06
------------------------------ --------------------------------------
Date Date
Schedule 2
----------
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
------------------------------------
I recognize that differences may arise between the Company and me
during or following my employment with the Company, and that those differences
may or may not be related to my employment. I understand and agree that by
entering into this Mutual Agreement to Arbitrate Claims ("Agreement"), I
anticipate gaining the benefits of a speedy, impartial, final and binding
dispute-resolution procedure.
Except as provided in this Agreement, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings pursuant to
this Agreement. To the extent that the Federal Arbitration Act is inapplicable,
or held not to require arbitration of a particular claim or claims, state law
pertaining to agreements to arbitrate shall apply.
Claims Covered by the Agreement
-------------------------------
The Company and I mutually consent to the resolution by arbitration of
all claims or controversies ("claims"), past, present or future, whether or not
arising out of my employment (or its termination), that the Company may have
against me or that I may have against any of the following (1) the Company, (2)
its officers, directors, employees or agents in their capacity as such or
otherwise, (3) the Company's parent, subsidiary and affiliated entities, (4) the
Company's benefit plans or the plans' sponsors, fiduciaries, administrators,
affiliates and agents, and/or (5) all successors and assigns of any of them.
The only claims that are arbitrable are those that, in the absence of
this Agreement, would have been justiciable under applicable state or federal
law. The claims covered by this Agreement include, but are not limited to:
claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination
(including, but not limited to, race, sex, sexual orientation, religion,
national origin, age, marital status, physical or mental disability or handicap,
or medical condition); claims for benefits (except claims under an I benefit or
pension plan that either (1) specifies that its claims procedure shall culminate
in an arbitration procedure different from this one, or (2) is underwritten by a
commercial insurer which decides claims); and claims for violation of any
federal, state, or other governmental law, statute, regulation, or ordinance,
except claims excluded in the section of this Agreement entitled "Claims Not
Covered By The Agreement."
Except as otherwise provided in this Agreement, both the Company and I
agree that neither of us shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination to
the Equal Employment Opportunity Commission, California Department of Fair
Employment and Housing or similar fair employment practices agency, or an
administrative charge within the
jurisdiction of the National Labor Relations Board), in any way related to any
claim covered by this Agreement.
Claims Not Covered by the Agreement
-----------------------------------
Claims for workers' compensation or unemployment compensation benefits
are not covered by this Agreement.
Also not covered are claims by the Company or by me for temporary
restraining orders or preliminary injunctions ("temporary equitable relief") in
cases in which such temporary equitable relief would be otherwise authorized by
law. Such resort to temporary equitable relief shall be pending and in aid of
arbitration only, and in such cases the trial on the merits of the action will
occur in front of, and will be decided by, the Arbitrator, who will have the
same ability to order legal or equitable remedies as could a court of general
jurisdiction.
Time Limits for Commencing Arbitration and Required Notice of All Claims
------------------------------------------------------------------------
The Company and I agree that the aggrieved party must give written
notice of any claim to the other party no later than the expiration of the
statute of limitations (deadline for filing) that the law prescribes for the
claim. Otherwise, the claim shall be void and deemed waived. I understand that
the aggrieved party is encouraged to give written notice of any claim as soon as
possible after the event or events in dispute so that arbitration of any
differences may take place promptly.
Written notice to the Company, or its officers, directors, employees
or agents, shall be sent to the Company's chief operating officer or chief legal
officer or person with similar authority at the Company's then-current address.
I will be given written notice at the last address recorded in my personnel
file.
The written notice shall identify and describe the nature of all
claims asserted, the facts upon which such claims are based and the relief or
remedy sought. The notice shall be sent to the other party by certified or
registered mail, return receipt requested.
Representation
--------------
Any party may be represented by an attorney or other representative
selected by the party.
Discovery
---------
Each party shall have the right to take depositions of up to 10 fact
witnesses and any expert witness designated by another party. Each party also
shall have
the right to make requests for production of documents to any party and to
subpoena documents from third parties. Requests for additional discovery may be
made to the Arbitrator selected pursuant to this Agreement. The Arbitrator may
grant an order for such requested additional discovery if the Arbitrator finds
that the party requires it to adequately arbitrate a claim, taking into account
the parties' mutual desire to have a fast, cost-effective dispute resolution
mechanism.
Designation of Witnesses
------------------------
At least 30 days before the arbitration, the parties must exchange
lists of witnesses, including any experts, and copies of all exhibits intended
to be used at the arbitration.
Subpoenas
---------
Each party shall have the right to subpoena witnesses and documents
for the arbitration as well as documents relevant to the case from third
parties.
Arbitration Procedures
----------------------
The arbitration will be held under the auspices of a sponsoring
organization, either the American Arbitration Association ("AAA") or Judicial
Arbitration & Mediation Services, with the designation of the sponsoring
organization to be made by the party who did not initiate the claim.
The Company and I agree that, except as provided in this Agreement,
the arbitration shall be in accordance with the sponsoring organization's
then-current employment arbitration rules/procedures. The Arbitrator shall be
either a retired judge, or an attorney who is experienced in employment law and
licensed to practice law in the state in which the arbitration is convened (the
"Arbitrator"). The arbitration shall take place in or near the city in which I
am or was last employed by the Company.
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of eleven (11) arbitrators drawn from
its panel of employment dispute arbitrators. Each party shall have ten (10)
calendar days from the postmark date on the list to strike all names on the list
it deems unacceptable. If only one common name remains on the lists of all
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of all parties, the sponsoring organization shall furnish an additional
list of eleven (11) arbitrators from which the parties shall strike alternately,
with the party initiating the claim striking first, until only one name remains.
That person shall be designated as the Arbitrator.
The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal law,
or both, as applicable to the claim(s) asserted. The Arbitrator is without
jurisdiction to apply any different substantive law or law of remedies. The
Federal Rules of Evidence shall apply. The Arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, applicability,
enforceability or formation of this Agreement, including but not limited to any
claim that all or any part of this Agreement is void or voidable. The
arbitration shall be final and binding upon the parties, except as provided in
this Agreement.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person, as the Arbitrator deems advisable. The Arbitrator shall have the
authority to entertain a motion to dismiss and/or a motion for summary judgment
by any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure.
Either party, at its expense, may arrange for and pay the cost of a
court reporter to provide a stenographic record of proceedings.
Should any party refuse or neglect to appear for, or participate in,
the arbitration hearing, the Arbitrator shall have the authority to decide the
dispute based upon whatever evidence is presented.
Either party, upon request at the close of hearing, shall be given
leave to file a post-hearing brief. The time for filing such a brief shall be
set by the Arbitrator.
The Arbitrator shall render an award and written opinion in the form
typically rendered in labor arbitrations no later than thirty (30) days from the
date the arbitration hearing concludes or the post-hearing briefs (if requested)
are received, whichever is later. The opinion shall include the factual and
legal basis for the award.
Either party shall have the right, within twenty (20) days of issuance
of the Arbitrator's opinion, to file with the Arbitrator a motion to reconsider
(accompanied by a supporting brief), and the other party shall have twenty (20)
days from the date of the motion to respond. The Arbitrator thereupon shall
reconsider the issues raised by the motion and, promptly, either confirm or
change the decision, which (except as provided by law) shall then be final and
conclusive upon the parties.
Arbitration Fees and Costs
--------------------------
The Company will be responsible for paying any filing fee and the fees
and costs of the Arbitrator; provided, however, that if I am the party
initiating the claim, I will contribute an amount equal to the filing fee to
initiate a claim in the court of general jurisdiction in the state in which I am
(or was last) employed by the Company. Each
party shall pay for its own costs and attorneys' fees, if any. However, if any
party prevails on a statutory claim which affords the prevailing party
attorneys' fees and costs, or if there is a written agreement providing for
attorneys' fees and/or costs, the Arbitrator may award reasonable attorneys'
fees and/or costs to the prevailing party, applying the same standards a court
would apply under the law applicable to the claim(s).
Judicial Review
---------------
Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award.
Interstate Commerce
-------------------
I understand and agree that the Company is engaged in transactions
involving interstate commerce.
Requirements for Modification or Revocation
-------------------------------------------
This Agreement to arbitrate shall survive the termination of my
employment and the expiration of any benefit plan. It can only be revoked or
modified by a writing signed by both the Company's Chief Executive Officer and
me which specifically states an intent to revoke or modify this Agreement.
Sole and Entire Agreement
-------------------------
This is the complete agreement of the parties on the subject of
arbitration of disputes (except for any arbitration agreement in connection with
any pension or benefit plan). This Agreement supersedes any prior or
contemporaneous oral or written understandings on the subject. No party is
relying on any representations, oral or written, on the subject of the effect,
enforceability or meaning of this Agreement, except as specifically set forth in
this Agreement.
Construction
------------
If any provision of this Agreement is adjudged to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement. All other provisions shall remain in
full force and effect.
Consideration
-------------
The promises by the Company and by me to arbitrate differences, rather
than litigate them before courts or other bodies, provide consideration for each
other.
Voluntary Agreement
-------------------
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO
A JURY TRIAL.
Employee initials:
----------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Xxxxx X. Xxxxxxx: Charys Holding Company Inc.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
Xxxxx X Xxxxxxx CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date Date
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO
A JURY TRIAL.
Employee initials:
----------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Xxxxx X Xxxxxxx: Charys Holding Company Inc.
/s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date Date
APPENDIX A
DUTIES AND PRIORITIES:
----------------------
POSITION: President and Chief Financial Officer
RESPONSIBILITY:
[ ] Development of subsidiary annual operating plan objectives.
[ ] Achievement of annual objectives agreed to by Corporation
[ ] Development of Telecommunications Infrastructure Market
- Sales opportunity development
- Customer relationship management
- Company acquisition opportunity identification
identification
- New market business development
[ ] Management of Telecommunication Infrastructure Businesses
- Financial, Employee, and other management
decisions necessary to ensure profitability and
achievement of objectives
STARTING: Effective Date of purchase of Digital Communications
Services Inc.
REPORTS TO: Chief Executive Officer - Charys Technologies Inc.
LOCATION: As Mutually Agreed
COMPENSATION: Annual Salary: See EXHIBIT 1, attached hereto and made
a part hereof
EXHIBIT 1
---------
BASE SALARY COMPENSATION
------------------------
Initial $750,000 $1 M $1.5M $2M
Xxxxx Xxxxxxx $120,000 $145,000 $165,000 $200,000 $225,000
Xxxxxx X. Xxxxxxx $ 96,000 $110,000 $125,000 $160,000 $185,000
1. Base salary levels based upon achieving revenues at the stated levels
for 3 months of any 5 month period, together with achieving a net operating
profit.
EXHIBIT C
---------
EMPLOYMENT AGREEMENT
--------------------
I, XXX XXXXXXX, an individual ("Executive") residing in West Palm Beach,
Florida, agree to the terms and conditions of employment with DIGITAL
COMMUNICATIONS SERVICES, INC. a Kentucky corporation located at 00 XX 0xx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx 00000 ("Company"), set forth in this Employment
Agreement ("Agreement").
1. TERM OF EMPLOYMENT. My employment under this Agreement shall
commence on June 1, 2006 and shall end on the third anniversary of that date
(Expiration Date), or such earlier date on which my employment is terminated
under Section 5 of this Agreement. On each anniversary of my commencement of
employment under this Agreement, the Expiration Date shall be extended for one
year unless the Company notified me at least thirty (30) days before that
anniversary that it was not extending this Agreement. If the Company continues
to employ me beyond the Expiration Date without entering into a written
agreement extending the term of this Agreement, except as provided in a new
written employment agreement between the Company and me, all obligations and
rights under this Agreement shall prospectively lapse as of the Expiration Date,
except the Company's ongoing indemnification obligation under Section 4, my
confidentiality, etc. obligations under Section 6, and our mutual arbitration
obligations under Section 8, and I thereafter shall be an at-will employee of
the Company.
2. NATURE OF DUTIES. I shall be the Co-President and Chief
Financial Officer of the Digital Communications Services subsidiary of Charys
Holding Company. As such, I shall have the responsibilities set forth in
APPENDIX A. I agree that the Company may alter my duties from time to time if
such duties are consistent with that of the position held by the Executive. I
shall devote substantially, all my business time and effort to the performance
of my duties for the Company, which I shall perform faithfully and to the best
of my ability. I shall be subject to the Company's policies, procedures and
approval practices, as generally in effect from time to time. Notwithstanding
the foregoing or any other provision of this Agreement, it shall not be a breach
or violation of this Agreement for me to (i) serve on corporate (subject to
approval of the Board), civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions,
(iii) manage personal investments, including my interest in Xxxxxx X. Xxxxxxx,
PA, and Xxxxxx Title and Trust, Inc., or other businesses in which I currently
have a financial interest, so long as such activities do not significantly
interfere with or significantly detract from the performance of my
responsibilities to the Company in accordance with this agreement.
3. PLACE OF PERFORMANCE. I shall be based at the Company's office
in Tampa, FL, except for required travel on the Company's business and stays at
my primary residence in West Palm Beach, Florida.
4. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. The Company shall pay me, or designated
business entity, a base salary at an annual rate as determined by APPENDIX A.
attached hereto and made a part hereof, with such base salary payable in
installments consistent with the Company's normal payroll schedule, subject to
applicable withholding and other taxes.
(b) DISCRETIONARY BONUSES AND STOCK OPTIONS. Following the
Earn out period described in EXHIBIT C of the Digital Communications Services
Stock Purchase agreement, I shall be eligible for bonuses and other incentive
compensation under bonus and incentive compensation plans generally available to
other similarly situated Company executives.
(c) STANDARD BENEFITS. During my employment, I shall be
entitled to participate in all employee benefit plans and programs, including
paid vacations, to the same extent generally available to other similarly
situated Company executives, in accordance with the terms of those plans and
programs. The Company shall have the right to terminate or change any such plan
or program at any time.
(d) INDEMNIFICATION. The Company shall extend to me the same
indemnification arrangements as are generally provided to other similarly
situated Company executives, including after termination of my employment.
(e) EXPENSES.I shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and business expenses I
incur in connection with my employment, but I must incur and account for those
expenses in accordance with the policies and procedures established by the
Company.
(f) XXXXXXXX-XXXXX ACT LOAN PROHIBITION. To the extent that
any Company benefit, program, practice, arrangement, or this Agreement would or
might otherwise result in my receipt of an illegal loan (Loan), the Company
shall use reasonable efforts to provide me with a substitute for the Loan that
is lawful and of at least equal value to me. If this cannot be done, or if doing
so would be significantly more expensive to the Company than making the Loan,
the Company need not make the Loan to me or provide me substitute for it.
5. TERMINATION.
(a) RIGHTS AND DUTIES. If my employment is terminated, I
shall be entitled to the amounts or benefits shown on the applicable row of the
following table, subject to the balance of this Section 5. The Company and I
shall have no further obligations to each other, except the Company's ongoing
indemnification obligation under Section 4, my confidentiality, etc. obligations
under Section 6, and our mutual arbitration obligations under Section 8, or as
set forth in any written agreement I subsequently enter into with the Company.
----------------------------------------------------------------------------------
DISCHARGE Payment or provision when due of (1) any unpaid base salary,
FOR CAUSE expense reimbursements, and vacation days accrued prior to
termination of employment, and (2) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans,
including any Earn Out compensation computed up to the date of
termination of employment.
----------------------------------------------------------------------------------
DISABILITY Same as for "Discharge for Cause" EXCEPT that I also shall be
potentially eligible for disability benefits under any Company-
provided disability plan in which I then participate.
----------------------------------------------------------------------------------
DISCHARGE Same as for "Discharge for Cause" EXCEPT that, in exchange for
OTHER my execution of a release in accordance with this section, my Base
THAN Salary, but not my employment, shall continue through for one (1)
FOR CAUSE year regardless of the remaining term of this Agreement.
OR
DISABILITY
----------------------------------------------------------------------------------
RESIGNATION Same as for "Discharge for Cause."
----------------------------------------------------------------------------------
DEATH Same as for "Discharge for Cause" EXCEPT that payments shall be
made to my legal representative
----------------------------------------------------------------------------------
EXPIRATION Same as for "Discharge for Cause."
OF
AGREEMENT
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
CHANGE OF Payment or provision when due of (1) any unpaid base salary,
CONTROL expense reimbursements, and vacation days accrued prior to
termination of employment, (2) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans
(3) pay to the Executive on the termination date a lump sum payment
equal to three (3) times Base Salary as of the date of my resignation
resulting from the Change in Control and (4) all stock options
previously granted to Employee shall become fully vested and
immediately exerciseable..
----------------------------------------------------------------------------------
(b) DISCHARGE FOR CAUSE. The Company may terminate my
employment at any time if it believes in good faith that it has Cause to
terminate me. "Cause" shall include, but not be limited to:
(i) my refusal to follow the Company's lawful directions
or my material failure to perform my duties (other than by reason of physical or
mental illness, injury, or condition), in either case, after I have been given
notice of my default and a 10 day opportunity to cure my default;
(ii) my failure to comply with Company policies;
(i) my engaging in conduct that is or may be unlawful or
disreputable, to the possible detriment of the Company and its
subsidiaries n;
(ii) my becoming insolvent or filing for bankruptcy;
(iii) my seeking, exploring, or accepting a position
with another business enterprise or venture without the Company's written
consent at any time more than 90 days before the Expiration Date; or
(iv) my engaging in activities on behalf of an
enterprise which competes or plans to compete with the Company or any of its
subsidiaries or affiliates.
(c) TERMINATION FOR DISABILITY. Except as prohibited by
applicable law, the Company may terminate my employment on account of
Disability, or may transfer me to inactive employment status, which shall have
the same effect under this Agreement as a termination for Disability.
"Disability" means a physical or mental illness, injury, or condition that
prevents me from performing my duties with reasonable accommodations for a
period of 30 consecutive days or 60 days in any one-year period.
(d) DISCHARGE OTHER THAN FOR CAUSE OR DISABILITY. The Company
may terminate my employment at any time for any reason, and without advance
notice. If I am terminated by the Company other than for Cause under Section
5(b) or for Disability under Section 5(c), I will only receive the special
benefits provided for a non-Cause discharge under Section 5 (a) if I sign a
general release form furnished to me by the Company (which may include any
provision customary in formal settlement agreements and general releases,
including such things as my release of the Company and all conceivably related
persons or entities ("affiliates") from all known and unknown claims, my
covenant never in the future to pursue any released claim, my promise not to
solicit current or former customers, employees, suppliers or, to the fullest
extent lawful, engage in business activities that compete with the Company or
any affiliate, or disclose or use any of their proprietary or trade secret
information) within 60 days after my employment ends (or within 60 days after an
arbitrator determines that I am entitled to such payments if I sign the general
release) and I do not thereafter properly revoke the release. I may resign my
employment within 60 days after a Change of Control in which event I shall only
receive the special benefits provided for a Non-Cause Discharge Due to a Change
of Control under Section 5(a).
(b) RESIGNATION. I promise not to resign my employment before
the Expiration Date without giving the Company at least 30 days advance written
notice. If I resign, I shall only receive the payments required by Section 5A
and the Company may accept my resignation effective on the date set forth in my
notice or any earlier date.
(f) DEATH. If I die while employed under this Agreement,
the payments required by Section 5(a) in the event of my death shall be made to
my legal representative.
(g) TRANSFERS TO GROUP MEMBER. My transfer to a subsidiary of
the Company ["Group Member"] shall not be deemed a termination of my employment
under this Agreement if it assumes this Agreement. However, not withstanding
anything contained to the contrary in this Agreement or the Stock Purchase
Agreement, when the Company achieves revenues greater than or equal to
$1,000,000 for three months of any five month period, together with achieving a
net operating profit, the Company shall be transferred to or made a part of a
separate division or group for Telecommunications Services and the Executive, at
that time shall assume the duties of President of that Division reporting to the
CEO of Charys Holding Company, Inc.
(h) DISPUTES UNDER THIS SECTION. All disputes relating to
this Agreement, including disputes relating to this section, shall be resolved
by final and binding arbitration under Section 8. For example, if the Company
and I disagree as to whether the Company had Cause to terminate my employment,
we will resolve the dispute through arbitration; the arbitrator will decide
whether the Company had Cause to terminate me.
(i) AMOUNTS OWED TO THE COMPANY. Any amounts payable to me
under this section shall first be applied to repay any amounts I owe the
Company.
(j) DEFINITION OF CHANGE OF CONTROL. Consummation by the
company of (x) a reorganization, merger, consolidation or other form of
corporate transaction or series of related transactions, in each case, with
respect to which persons who were the shareholders of the Company immediately
prior to such reorganization, merger or consolidation or other transaction do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company's then outstanding voting securities, in
substantially the same proportions as their ownership immediately prior to such
reorganization, merger, consolidation or other transaction, or (y) the sale of
all or substantially all of the assets of the Company; provided that, with
respect to this Section, a Change in Control shall not be deemed to have
occurred should any of the contingencies referred to in this Section result from
terms of executed contractual agreements, and such terms are in effect on or
before the Commencement Date.
17. CONFIDENTIALITY. I acknowledge that as an integral part of
the Company's business, the Company has developed, and will develop, at a
considerable investment of time and expense, marketing and business plans and
strategies, procedures, methods of operation and marketing, financial data,
lists of actual and potential customers and suppliers, and independent sales
representatives and related data, technical procedures, engineering and product
specifications, plans for development and expansion, and other confidential and
sensitive information, and I acknowledge that the Company has a legitimate
business interest in protecting the confidentiality of such information. I
acknowledge that I will be entrusted with such information as well as
confidential information belonging to customers, suppliers, and other third
parties.
18. "TRADE SECRETS" are defined as information, regardless of
form, belonging to the Company, licensed by it, or disclosed to it on a
confidential basis by its customers, suppliers, or other third parties,
including, but not limited to, technical or nontechnical data, formulae,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, product plans, or lists of actual or potential
customers or suppliers which are not commonly known by or available to the
public and which information: (i) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use; and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
19. "CONFIDENTIAL INFORMATION" is defined as information,
regardless of form, belonging to the Company, licensed by it, or disclosed to it
on a confidential basis by its customers, suppliers, or other third parties,
other than Trade Secrets, which is material and valuable to the Company and not
generally known by the public.
20. PROMISE NOT TO DISCLOSE. I promise never to use or disclose
any Trade Secret before it has become generally known within the relevant
industry through no fault of my own. I agree that this promise shall never
expire. I further promise that, while this Agreement is in effect and for 2
years after its termination, I will not, without the prior written approval of
the Company, use or disclose any Confidential Information before it has become
generally known within the relevant industry through no fault of my own.
21. PROMISE NOT TO SOLICIT. To prevent me from inevitably breaking
this promise, I further agree that, while this Agreement is in effect and for 18
months after its termination: (1) as to any customer or supplier of the Group
with whom I had dealings or about whom I acquired proprietary information during
my employment, I will not solicit or attempt to solicit (or assist others to
solicit) the customer or supplier to do business with any person or entity other
than the Group; and (2) I will not solicit or attempt to solicit (or assist
others to solicit) for employment any person who is, or within the preceding 12
months was, an officer, manager, employee, or consultant of the Group.
22. PROMISE NOT TO ENGAGE IN CERTAIN EMPLOYMENT. I agree that,
while this Agreement is in effect and for 18 months after its termination, I
will not accept any employment or engage in any activity, without the written
consent of the Company's Board of Directors if the loyal and complete
fulfillment of my duties in such employment would inevitably require me to
reveal or utilize Trade Secrets or Confidential Information, as reasonably
determined by the Company's Board of Directors.
23. RETURN OF INFORMATION. When my employment with the Company
ends, I will promptly deliver to the Company, or, at its written instruction,
destroy, all documents, data, drawings, manuals, letters, notes, reports,
electronic mail, recordings, and copies thereof, of or pertaining to it or any
other Group member in my possession or control. In addition, during my
employment with the Company or the Group and thereafter, I agree to meet with
Company personnel and, based on knowledge or insights I gained during my
employment with the Company and the Group, answer any question they may have
related to the Company or the Group.
24. PROMISE TO DISCUSS PROPOSED ACTIONS IN ADVANCE. To prevent the
inevitable use or disclosure of Trade Secrets or Confidential Information, I
promise that, before I disclose or use Trade Secrets or Confidential Information
and before I commence employment, solicitations, or any other activity that
could possibly violate the promises I have just made, I will discuss my proposed
actions with an attorney for the Company, who will advise me in writing whether
my proposed actions would violate these promises.
25. INTELLECTUAL PROPERTY. Intellectual property (including such
things as all ideas, concepts, inventions, plans, developments, software, data,
configurations, materials (whether written or machine-readable), designs,
drawings, illustrations, and photographs, that may be protectable, in whole or
in part, under any patent, copyright,
trademark, trade secret, or other intellectual property law), developed,
created, conceived, made, or reduced to practice during my Company employment
(except intellectual property that has no relation to the Group or any Group
customer that I developed, etc., purely on my own time and at my own expense),
shall be the sole and exclusive property of the Company, and I hereby assign all
my rights, title, and interest in any such intellectual property to the Company.
26. EXECUTION OF INNOVATION AGREEMENT. I agree to the terms of
the Company's Assignment of Inventions agreement, which is attached to this
Agreement as Schedule 1, and I promise to execute it contemporaneously with this
Agreement.
27. ENFORCEMENT OF THIS SECTION. Sections 6-13 shall survive
the termination of this Agreement for any reason, t; these section's terms are
reasonable and necessary to protect the Company's legitimate interests, these
section's restrictions will not prevent me from earning or seeking a livelihood,
these section's restrictions shall apply wherever permitted by law, and my
violation of any of thee section's term would irreparably harm the Company.
Accordingly, I agree that, if I violate any of the provisions of these sections,
the Company or any Group member shall be entitled to, in addition to other
remedies available to it, an injunction to be issued by any court of competent
jurisdiction restraining me from committing or continuing any such violation,
without the need to prove the inadequacy of money damages or post any bond or
for any other undertaking.
17. NOTICE.
(a) TO THE COMPANY. I will send all communications to the
Company in writing, addressed as follows (or in any other manner the Company
notifies me to use): Charys Holding Company Inc. Attention: Xxxxx Xxx, CEO 0000
Xxxxxxxxx Xxxxxx Xxxx, Xxxxx X 000 Xxxxxxx, Xxxxxxx 00000 Fax: (000) 000-0000
Tel: (000) 000-0000.
(b) TO ME. All communications from the Company to me relating
to this Agreement must be sent to me in writing at my Company office or in any
other manner I notify the Company to use.
(c) TIME NOTICE DEEMED GIVEN. Notice shall be deemed to
have been given when delivered or, if earlier (1) when mailed by United States
certified or registered mail, return receipt requested, postage prepaid, or (2)
faxed with confirmation of delivery, in either case, addressed as required in
this section.
18. ARBITRATION OF DISPUTES. All disputes between the Company and
me are to be resolved by final and binding arbitration in accordance with the
separate Arbitration Agreement attached as Schedule 2 to this Agreement. This
section shall remain in effect after the termination of this Agreement.
19. GOLDEN PARACHUTE LIMITATION. I agree that my payments and
benefits under this Agreement and all other contracts, arrangements, or programs
shall not, in the aggregate, exceed the maximum amount that may be paid to me
without triggering golden parachute penalties under Section 280G and related
provisions of the Internal Revenue Code, as determined in good faith by the
Company's independent auditors. If any benefits must be cut back to avoid
triggering such penalties, my benefits shall be cut back in the priority order
designated by the Company. If an amount in excess of the limit set forth in
this section is paid to me, I will repay the excess amount to the Company upon
demand, with interest at the rate provided for in Internal Revenue Code
Section 1274(b)(2)(B). The Company and I agree to cooperate with each other in
connection with any administrative or judicial proceedings concerning the
existence or amount of golden parachute penalties with respect to payments or
benefits I receive.
20. AMENDMENT. No provisions of this Agreement may be modified,
waived, or discharged except by a written document signed by a duly authorized
Company officer and me. Thus, for example, promotions, commendations, and/or
bonuses shall not, by themselves, modify, amend, or extend this Agreement. A
waiver of any conditions or provisions of this Agreement in a given instance
shall not be deemed a waiver of such conditions or provisions at any other time.
21. INTERPRETATION; EXCLUSIVE FORUM. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the state of Georgia (excluding any that mandate the use of another
jurisdiction's laws). Any litigation, arbitration, or similar proceeding with
respect to such matters only may be brought within that state, and all parties
to this Agreement consent to that state's jurisdiction and agree that venue
anywhere in that state would be proper.
22. SUCCESSORS. This Agreement shall be binding upon, and shall
inure to the benefit of, me and my estate, but I may not assign or pledge this
Agreement or any rights arising under it, except to the extent permitted under
the terms of the benefit plans in which I participate. Without my consent, the
Company may assign this Agreement to any affiliate or successor that agrees in
writing to be bound by this Agreement, after which any reference to the
"Company" in this Agreement shall be deemed to be a reference to the affiliate
or successor, and the Company thereafter shall have no further primary,
secondary or other responsibilities or liabilities under this Agreement of any
kind.
23. TAXES. The Company shall withhold taxes from payments it makes
pursuant to this Agreement as it determines to be required by applicable law.
24. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. In
the event that a court of competent jurisdiction determines that any provision
of this Agreement is invalid or more
restrictive than permitted under the governing law of such jurisdiction, then
only as to enforcement of this Agreement within the jurisdiction of such court,
such provision shall be interpreted and enforced as if it provided for the
maximum restriction permitted under such governing law.
25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute the same instrument.
26. ENTIRE AGREEMENT. All oral or written agreements or
representations, express or implied, with respect to the subject matter of this
Agreement are set forth in this Agreement. However, this Agreement does not
override other written agreements I have executed relating to specific aspects
of my employment, such as conflicts of interest.
27. FORMER EMPLOYERS. I am not subject to any employment,
confidentiality, or other agreement or restriction that would prevent me from
fully satisfying my duties under this Agreement or that would be violated if I
did so.
28. DEPARTMENT OF HOMELAND SECURITY VERIFICATION REQUIREMENT. If I
have not already done so, I agree to timely file all documents required by the
Department of Homeland Security to verify my identity and my lawful employment
in the United States. Notwithstanding any other provision of this Agreement, if
I fail to meet any such requirements promptly after receiving a written request
from the Company to do so, I agree that my employment shall terminate
immediately and that I shall not be entitled to any compensation from the
Company of any type.
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL
--------------------------------------------------------------------------------
By: /s/ Xxx Xxxxxxx Charys Holding Company Inc.
----------------------
Name: Xxx Xxxxxxx By: /s/ Xxxxx X. Xxx Xx.
-------------------- -------------------------------------------
Name: Xxxxx X. Xxx Xx.
-----------------------------------------
Title: CEO
----------------------------------------
Date: 06-06-06 Date: 6-12-06
-------------------- -----------------------------------------
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.
--------------------------------------------------------------------------------
By: Charys Holding Company Inc.
----------------------
Name: By: /s/ Xxxxx X. Xxx Xx.
-------------------- -------------------------------------------
Name: Xxxxx X. Xxx Xx.
-----------------------------------------
Title: CEO
----------------------------------------
Date: Date: 6-12-06
-------------------- -----------------------------------------
Schedule 1
----------
ASSIGNMENT OF INVENTIONS
------------------------
1. I will promptly disclose in writing to the Company all Inventions. For
purposes of this Agreement, "Invention" shall mean any discovery, whether or not
patentable, as well as improvements thereto, which is conceived or first
practiced by me, alone or in a joint effort with others, whether prior to or
following execution of this Agreement, which: (i) may be reasonably expected to
be used in a product of the Company; (ii) results from work that I have been
assigned as part of my duties as an employee of the Company; (iii) is in an area
of technology which is the same as or substantially related to the areas of
technology with which I am involved; (iv) is useful, or which the Company
reasonably expects may be useful, in any manufacturing or product design process
of the Company; or (v) utilizes any Confidential Information.
2. All Inventions developed while employed by the Company in the scope of
such my employment and duties belong to and are the sole property of the Company
and will be subject to this Agreement. I assign to the Company all right, title,
and interest I may have or may acquire in and to all Inventions. I shall sign
and deliver to the Company (during and after employment) any other documents
that the Company considers reasonably necessary to provide evidence of (i) the
assignment of all of my rights, if any, in any Inventions and (ii) the Company's
ownership of such Inventions.
3. I will assist the Company in applying for, prosecuting, obtaining, or
enforcing any patent, copyright, or other right or protection relating to any
Invention, all at the Company's expense but without consideration to me in
excess of my salary or wages. If the Company requires any assistance after
termination of my employment, I will be compensated for time actually spent in
providing that assistance at an hourly rate equivalent to my salary or wages
during the last period of employment with the Company.
4. If the Company is unable to secure my signature on any document necessary
to apply for, prosecute, obtain, or enforce any patent, copyright, or other
right or protection relating to any Invention, whether due to my mental or
physical incapacity or any other cause, I hereby irrevocably designate and
appoint the Company and each of its duly authorized officers and agents as my
agent and attorney-in-fact, to act for and in my behalf to execute and file any
such document and to do all other lawfully permitted acts
to further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protections, with the same force and effect as if executed and
delivered by me.
Employee: Charys Holding Company Inc.
/s/ Xxx Xxxxxxx /s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
Xxx Xxxxxxx Xxxxx X. Xxx Xx. CEO
----------------------------------------------
Print Name of Employee Title of Representative
06-06-06 6-12-06
------------------------- ----------------------------------------------
Date Date
to further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protections, with the same force and effect as if executed and
delivered by me.
Employee: Charys Holding Company Inc.
/s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date Date
Schedule 2
----------
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
------------------------------------
I recognize that differences may arise between the Company and me
during or following my employment with the Company, and that those differences
may or may not be related to my employment. I understand and agree that by
entering into this Mutual Agreement to Arbitrate Claims ("Agreement"), I
anticipate gaining the benefits of a speedy, impartial, final and binding
dispute-resolution procedure.
Except as provided in this Agreement, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings pursuant to
this Agreement. To the extent that the Federal Arbitration Act is inapplicable,
or held not to require arbitration of a particular claim or claims, state law
pertaining to agreements to arbitrate shall apply.
Claims Covered by the Agreement
-------------------------------
The Company and I mutually consent to the resolution by arbitration of
all claims or controversies ("claims"), past, present or future, whether or not
arising out of my employment (or its termination), that the Company may have
against me or that I may have against any of the following (1) the Company, (2)
its officers, directors, employees or agents in their capacity as such or
otherwise, (3) the Company's parent, subsidiary and affiliated entities, (4) the
Company's benefit plans or the plans' sponsors, fiduciaries, administrators,
affiliates and agents, and/or (5) all successors and assigns of any of them.
The only claims that are arbitrable are those that, in the absence of
this Agreement, would have been justiciable under applicable state or federal
law. The claims covered by this Agreement include, but are not limited to:
claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination
(including, but not limited to, race, sex, sexual orientation, religion,
national origin, age, marital status, physical or mental disability or handicap,
or medical condition); claims for benefits (except claims under an I benefit or
pension plan that either (1) specifies that its claims procedure shall culminate
in an arbitration procedure different from this one, or (2) is underwritten by a
commercial insurer which decides claims); and claims for violation of any
federal, state, or other governmental law, statute, regulation, or ordinance,
except claims excluded in the section of this Agreement entitled "Claims Not
Covered By The Agreement."
Except as otherwise provided in this Agreement, both the Company and I
agree that neither of us shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination to
the Equal Employment Opportunity Commission, California Department of Fair
Employment and Housing or similar fair employment practices agency, or an
administrative charge within the jurisdiction of the National Labor Relations
Board), in any way related to any claim covered by this Agreement.
Claims Not Covered by the Agreement
-----------------------------------
Claims for workers' compensation or unemployment compensation benefits
are not covered by this Agreement.
Also not covered are claims by the Company or by me for temporary
restraining orders or preliminary injunctions ("temporary equitable relief") in
cases in which such temporary equitable relief would be otherwise authorized by
law. Such resort to temporary equitable relief shall be pending and in aid of
arbitration only, and in such cases the trial on the merits of the action will
occur in front of, and will be decided by, the Arbitrator, who will have the
same ability to order legal or equitable remedies as could a court of general
jurisdiction.
Time Limits for Commencing Arbitration and Required Notice of All Claims
------------------------------------------------------------------------
The Company and I agree that the aggrieved party must give written
notice of any claim to the other party no later than the expiration of the
statute of limitations (deadline for filing) that the law prescribes for the
claim. Otherwise, the claim shall be void and deemed waived. I understand that
the aggrieved party is encouraged to give written notice of any claim as soon as
possible after the event or events in dispute so that arbitration of any
differences may take place promptly.
Written notice to the Company, or its officers, directors, employees
or agents, shall be sent to the Company's chief operating officer or chief legal
officer or person with similar authority at the Company's then-current address.
I will be given written notice at the last address recorded in my personnel
file.
The written notice shall identify and describe the nature of all
claims asserted, the facts upon which such claims are based and the relief or
remedy sought. The notice shall be sent to the other party by certified or
registered mail, return receipt requested.
Representation
--------------
Any party may be represented by an attorney or other representative
selected by the party.
Discovery
---------
Each party shall have the right to take depositions of up to 10 fact
witnesses and any expert witness designated by another party. Each party also
shall have the right to make requests for production of documents to any party
and to subpoena documents from third parties. Requests for additional discovery
may be made to the Arbitrator selected pursuant to this Agreement. The
Arbitrator may grant an order for such requested additional discovery if the
Arbitrator finds that the party requires it to adequately arbitrate a claim,
taking into account the parties' mutual desire to have a fast, cost-effective
dispute resolution mechanism.
Designation of Witnesses
------------------------
At least 30 days before the arbitration, the parties must exchange
lists of witnesses, including any experts, and copies of all exhibits intended
to be used at the arbitration.
Subpoenas
---------
Each party shall have the right to subpoena witnesses and documents
for the arbitration as well as documents relevant to the case from third
parties.
Arbitration Procedures
----------------------
The arbitration will be held under the auspices of a sponsoring
organization, either the American Arbitration Association ("AAA") or Judicial
Arbitration & Mediation Services, with the designation of the sponsoring
organization to be made by the party who did not initiate the claim.
The Company and I agree that, except as provided in this Agreement,
the arbitration shall be in accordance with the sponsoring organization's
then-current employment arbitration rules/procedures. The Arbitrator shall be
either a retired judge, or an attorney who is experienced in employment law and
licensed to practice law in the state in which the arbitration is convened (the
"Arbitrator"). The arbitration shall take place in or near the city in which I
am or was last employed by the Company.
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of eleven (11) arbitrators drawn from
its panel of employment dispute arbitrators. Each party shall have ten (10)
calendar days from the postmark date on the list to strike all names on the list
it deems unacceptable. If only one common name remains on the lists of all
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of all parties, the sponsoring organization shall furnish an additional
list of eleven (11) arbitrators from which the parties shall strike alternately,
with the party initiating the claim striking first, until only one name remains.
That person shall be designated as the Arbitrator.
The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal law,
or both, as applicable to the claim(s) asserted. The Arbitrator is without
jurisdiction to apply any different substantive law or law of remedies. The
Federal Rules of Evidence shall apply. The Arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, applicability,
enforceability or formation of this Agreement, including but not limited to any
claim that all or any part of this Agreement is void or voidable. The
arbitration shall be final and binding upon the parties, except as provided in
this Agreement.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person, as the Arbitrator deems
advisable. The Arbitrator shall have the authority to entertain a motion to
dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure.
Either party, at its expense, may arrange for and pay the cost of a
court reporter to provide a stenographic record of proceedings.
Should any party refuse or neglect to appear for, or participate in,
the arbitration hearing, the Arbitrator shall have the authority to decide the
dispute based upon whatever evidence is presented.
Either party, upon request at the close of hearing, shall be given
leave to file a post-hearing brief. The time for filing such a brief shall be
set by the Arbitrator.
The Arbitrator shall render an award and written opinion in the form
typically rendered in labor arbitrations no later than thirty (30) days from the
date the arbitration hearing concludes or the post-hearing briefs (if requested)
are received, whichever is later. The opinion shall include the factual and
legal basis for the award.
Either party shall have the right, within twenty (20) days of issuance
of the Arbitrator's opinion, to file with the Arbitrator a motion to reconsider
(accompanied by a supporting brief), and the other party shall have twenty (20)
days from the date of the motion to respond. The Arbitrator thereupon shall
reconsider the issues raised by the motion and, promptly, either confirm or
change the decision, which (except as provided by law) shall then be final and
conclusive upon the parties.
Arbitration Fees and Costs
--------------------------
The Company will be responsible for paying any filing fee and the fees
and costs of the Arbitrator; provided, however, that if I am the party
initiating the claim, I will contribute an amount equal to the filing fee to
initiate a claim in the court of general jurisdiction in the state in which I am
(or was last) employed by the Company. Each party shall pay for its own costs
and attorneys' fees, if any. However, if any party prevails on a statutory claim
which affords the prevailing party attorneys' fees and costs, or if there is a
written agreement providing for attorneys' fees and/or costs, the Arbitrator may
award reasonable attorneys' fees and/or costs to the prevailing party, applying
the same standards a court would apply under the law applicable to the claim(s).
Judicial Review
---------------
Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award.
Interstate Commerce
-------------------
I understand and agree that the Company is engaged in transactions
involving interstate commerce.
Requirements for Modification or Revocation
-------------------------------------------
This Agreement to arbitrate shall survive the termination of my
employment and the expiration of any benefit plan. It can only be revoked or
modified by a writing signed by both the Company's Chief Executive Officer and
me which specifically states an intent to revoke or modify this Agreement.
Sole and Entire Agreement
-------------------------
This is the complete agreement of the parties on the subject of
arbitration of disputes (except for any arbitration agreement in connection with
any pension or benefit plan). This Agreement supersedes any prior or
contemporaneous oral or written understandings on the subject. No party is
relying on any representations, oral or written, on the subject of the effect,
enforceability or meaning of this Agreement, except as specifically set forth in
this Agreement.
Construction
------------
If any provision of this Agreement is adjudged to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement. All other provisions shall remain in
full force and effect.
Consideration
-------------
The promises by the Company and by me to arbitrate differences, rather
than litigate them before courts or other bodies, provide consideration for each
other.
Voluntary Agreement
-------------------
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO
A JURY TRIAL.
Employee initials:
----------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Xxx Xxxxxxx: Charys Holding Company Inc.
/s/ Xxx Xxxxxxx /s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
Xxx Xxxxxxx CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
06-06-06 6-12-06
------------------------- ----------------------------------------------
Date: Date:
Xxx Xxxxxxx: Charys Holding Company Inc.
/s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date: Date:
APPENDIX A
DUTIES AND PRIORITIES:
----------------------
POSITION: Co-President and Chief Financial Officer
RESPONSIBILITY:
[ ] Development of subsidiary annual operating plan objectives.
[ ] Achievement of annual objectives agreed to by Corporation
[ ] Development of Telecommunications Infrastructure Market
- Sales opportunity development
- Customer relationship management
- Company acquisition opportunity identification
- New market business development
[ ] Management of Telecommunication Infrastructure Businesses
- Financial, Employee, and other management
decisions necessary to ensure profitability and
achievement of objectives
STARTING: Effective Date of purchase of Digital Communications
Services Inc.
REPORTS TO: Chief Executive Officer - Charys Technologies Inc.
LOCATION: As Mutually Agreed
COMPENSATION: Annual Salary: See EXHIBIT 1, attached hereto and made
a part hereof
EXHIBIT 1
---------
BASE SALARY COMPENSATION
------------------------
Initial $750,000 $1M $1.5M $2M
Xxxxx Xxxxxxx $120,000 $145,000 $165,000 $200,000 $225,000
Xxxxxx X. Xxxxxxx $ 96,000 $110,000 $125,000 $160,000 $185,000
1. Base salary levels based upon achieving revenues at the stated levels
for 3 months of any 5 month period, together with achieving a net operating
profit.
EXHIBIT D
EARN OUT: Following are the performance targets including sale revenue, net income
and EBITDA for the Company for the approximate 3 years following the
date of Acquisition. If targets are achieved then, for each year, a
percentage of net income, as illustrated, will be paid as Bonus
Compensation within 90 days following the end of each fiscal year. Of
such Bonus Compensation, the respective Sellers may elect, in their sole
discretion, to receive up to 50% of the Bonus Compensation in cash. The
balance of the Bonus Compensation may be paid in cash or stock, at the
discretion of Charys, with acceptance by Executive. In the event Charys
elects to pay the Bonus Compensation in stock, the number of shares to be
issued to the Executive shall be computed based on a share price equal to
the Closing Price of the Buyers' stock ads of the date of this Agreement.
However, in the event that the Company incurs a net operating loss during
any annual period such share price shall change to the then current market
price of the Buyers' stock for all remaining earn out payments.
EARN OUT
CALCULATION
FULL YEAR 1 FULL YEAR 2 FULL YEAR 3
------------ ------------ ------------
Revenue Projection - $ 18,000,000 $ 30,000,000 $ 45,000,000
EBITDA Projection - 10% 1,800,000 $ 3,000,000 $ 4,500,000
Net Earnings Projection - 6% 1,080,000 $ 1,800,000 $ 2,700,000
EARN-OUT GOAL - $ 540,000 $ 900,000 $ 1,350,000
TOTAL EARN-OUT GOAL $ 1,560,000
ACTUAL RESULTS ILLUSTRATION
Revenues $11,000,000 $18,000,000 $22,000,000
EBITDA $ 1,000,000 $ 1,900,000 $ 2,200,000
Net Earnings $ 300,000 $ 1,100,000 $ 1,400,000
PERCENTAGE OF GOAL MET
Revenues 110.00% 100.00% 91.67%
EBITDA 100.00% 105.56% 91.67%
Net Earnings 50.00% 101.85% 97.22%
CALCULATION FACTOR
Revenues 10% 11.00% 10.00% 9.17%
EBITDA 60% 60.00% 63.33% 55.00%
Net Earnings 30% 15.00% 30.56% 29.17%
Calculation Factor (i) 86.00% 103.89% 93.33%
$258,000 $561,000 $672,000
Earn-out - Cash/Stock Payout
TOTAL EARN-OUT ACHIEVED $1,491,0
NOTES
-----
(i) Such calculation factor shall not exceed 110% for any given
period. However, any Earn Out amounts not utilized during any annual
period due to the 110% cap on the calculation factor may be carried
forward to benefit any remaining earn out periods.
(ii) Management fees shall be limited to those expenses incurred by
Buyer directly for the benefit of the Company. Any allocated income
taxes shall be based upon Buyer's actual effective income tax rate for
each respective annual period.
(iii) Sellers shall have the right to receive additional compensation,
under a plan to be mutually agreed to, for acquisitions completed by
the Buyer resulting from the direct efforts of the Sellers.
EARN OUT ILLUSTRATION
FULL YEAR 1 FULL YEAR 2 FULL YEAR 3
------------ ------------ ------------
Revenue Projection - $ 10,000,000 $ 18,000,000 $ 24,000,000
EBITDA Projection - 10% $ 1,000,000 $ 1,800,000 $ 2,400,000
Net Earnings Projection - 6% $ 600,000 $ 1,080,000 $ 1,440,000
EARN-OUT GOAL $ 300,000 $ 540,000 $ 720,000
EXHIBIT E
OPINION OF COUNSEL
EXHIBIT F
FINANCIAL STATEMENTS
EXHIBIT G
STATEMENT OF MATERIAL LIABILITIES
Pending litigation with Cross Country Cable
Pending Inland Marine Insurance Settlement with CNA with regard to Equipment,
lost in connection with Hurricane Xxxxxxx
EXHIBIT H
STATEMENT OF MATERIAL CONTRACTS
SCHEDULE 4.2
LIST OF CURRENT STOCKHOLDERS OF THE COMPANY
Xxxxx X. Xxxxxxx 80%
Xxxxxx X. Xxxxxxx 20%
SCHEDULE 4.10
TITLE TO PROPERTY AND ASSETS
SCHEDULE 8.2
PROCEEDING OR LITIGATION
Cross Country Cable litigation, with Plaintiff claiming approximately $638,000,
of which the Company has accrued a reserve for settlement the amount of $510,000
as of March 31, 2006.
Schedule 2
----------
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
------------------------------------
I recognize that differences may arise between the Company and me
during or following my employment with the Company, and that those differences
may or may not be related to my employment. I understand and agree that by
entering into this Mutual Agreement to Arbitrate Claims ("Agreement"), I
anticipate gaining the benefits of a speedy, impartial, final and binding
dispute-resolution procedure.
Except as provided in this Agreement, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings pursuant to
this Agreement. To the extent that the Federal Arbitration Act is inapplicable,
or held not to require arbitration of a particular claim or claims, state law
pertaining to agreements to arbitrate shall apply.
Claims Covered by the Agreement
-------------------------------
The Company and I mutually consent to the resolution by arbitration of
all claims or controversies ("claims"), past, present or future, whether or not
arising out of my employment (or its termination), that the Company may have
against me or that I may have against any of the following (1) the Company, (2)
its officers, directors, employees or agents in their capacity as such or
otherwise, (3) the Company's parent, subsidiary and affiliated entities, (4) the
Company's benefit plans or the plans' sponsors, fiduciaries, administrators,
affiliates and agents, and/or (5) all successors and assigns of any of them.
The only claims that are arbitrable are those that, in the absence of
this Agreement, would have been justiciable under applicable state or federal
law. The claims covered by this Agreement include, but are not limited to:
claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination
(including, but not limited to, race, sex, sexual orientation, religion,
national origin, age, marital status, physical or mental disability or handicap,
or medical condition); claims for benefits (except claims under an I benefit or
pension plan that either (1) specifies that its claims procedure shall culminate
in an arbitration procedure different from this one, or (2) is underwritten by a
commercial insurer which decides claims); and claims for violation of any
federal, state, or other governmental law, statute, regulation, or ordinance,
except claims excluded in the section of this Agreement entitled "Claims Not
Covered By The Agreement."
Except as otherwise provided in this Agreement, both the Company and I
agree that neither of us shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination to
the Equal Employment Opportunity Commission, California Department of Fair
Employment and Housing or similar fair employment practices agency, or an
administrative charge within the
jurisdiction of the National Labor Relations Board), in any way related to any
claim covered by this Agreement.
Claims Not Covered by the Agreement
-----------------------------------
Claims for workers' compensation or unemployment compensation benefits
are not covered by this Agreement.
Also not covered are claims by the Company or by me for temporary
restraining orders or preliminary injunctions ("temporary equitable relief") in
cases in which such temporary equitable relief would be otherwise authorized by
law. Such resort to temporary equitable relief shall be pending and in aid of
arbitration only, and in such cases the trial on the merits of the action will
occur in front of, and will be decided by, the Arbitrator, who will have the
same ability to order legal or equitable remedies as could a court of general
jurisdiction.
Time Limits for Commencing Arbitration and Required Notice of All Claims
------------------------------------------------------------------------
The Company and I agree that the aggrieved party must give written
notice of any claim to the other party no later than the expiration of the
statute of limitations (deadline for filing) that the law prescribes for the
claim. Otherwise, the claim shall be void and deemed waived. I understand that
the aggrieved party is encouraged to give written notice of any claim as soon as
possible after the event or events in dispute so that arbitration of any
differences may take place promptly.
Written notice to the Company, or its officers, directors, employees
or agents, shall be sent to the Company's chief operating officer or chief legal
officer or person with similar authority at the Company's then-current address.
I will be given written notice at the last address recorded in my personnel
file.
The written notice shall identify and describe the nature of all
claims asserted, the facts upon which such claims are based and the relief or
remedy sought. The notice shall be sent to the other party by certified or
registered mail, return receipt requested.
Representation
--------------
Any party may be represented by an attorney or other representative
selected by the party.
Discovery
---------
Each party shall have the right to take depositions of up to 10 fact
witnesses and any expert witness designated by another party. Each party also
shall have
the right to make requests for production of documents to any party and to
subpoena documents from third parties. Requests for additional discovery may be
made to the Arbitrator selected pursuant to this Agreement. The Arbitrator may
grant an order for such requested additional discovery if the Arbitrator finds
that the party requires it to adequately arbitrate a claim, taking into account
the parties' mutual desire to have a fast, cost-effective dispute resolution
mechanism.
Designation of Witnesses
------------------------
At least 30 days before the arbitration, the parties must exchange
lists of witnesses, including any experts, and copies of all exhibits intended
to be used at the arbitration.
Subpoenas
---------
Each party shall have the right to subpoena witnesses and documents
for the arbitration as well as documents relevant to the case from third
parties.
Arbitration Procedures
----------------------
The arbitration will be held under the auspices of a sponsoring
organization, either the American Arbitration Association ("AAA") or Judicial
Arbitration & Mediation Services, with the designation of the sponsoring
organization to be made by the party who did not initiate the claim.
The Company and I agree that, except as provided in this Agreement,
the arbitration shall be in accordance with the sponsoring organization's
then-current employment arbitration rules/procedures. The Arbitrator shall be
either a retired judge, or an attorney who is experienced in employment law and
licensed to practice law in the state in which the arbitration is convened (the
"Arbitrator"). The arbitration shall take place in or near the city in which I
am or was last employed by the Company.
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of eleven (11) arbitrators drawn from
its panel of employment dispute arbitrators. Each party shall have ten (10)
calendar days from the postmark date on the list to strike all names on the list
it deems unacceptable. If only one common name remains on the lists of all
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of all parties, the sponsoring organization shall furnish an additional
list of eleven (11) arbitrators from which the parties shall strike alternately,
with the party initiating the claim striking first, until only one name remains.
That person shall be designated as the Arbitrator.
The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal law,
or both, as applicable to the claim(s) asserted. The Arbitrator is without
jurisdiction to apply any different substantive law or law of remedies. The
Federal Rules of Evidence shall apply. The Arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, applicability,
enforceability or formation of this Agreement, including but not limited to any
claim that all or any part of this Agreement is void or voidable. The
arbitration shall be final and binding upon the parties, except as provided in
this Agreement.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person, as the Arbitrator deems advisable. The Arbitrator shall have the
authority to entertain a motion to dismiss and/or a motion for summary judgment
by any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure.
Either party, at its expense, may arrange for and pay the cost of a
court reporter to provide a stenographic record of proceedings.
Should any party refuse or neglect to appear for, or participate in,
the arbitration hearing, the Arbitrator shall have the authority to decide the
dispute based upon whatever evidence is presented.
Either party, upon request at the close of hearing, shall be given
leave to file a post-hearing brief. The time for filing such a brief shall be
set by the Arbitrator.
The Arbitrator shall render an award and written opinion in the form
typically rendered in labor arbitrations no later than thirty (30) days from the
date the arbitration hearing concludes or the post-hearing briefs (if requested)
are received, whichever is later. The opinion shall include the factual and
legal basis for the award.
Either party shall have the right, within twenty (20) days of issuance
of the Arbitrator's opinion, to file with the Arbitrator a motion to reconsider
(accompanied by a supporting brief), and the other party shall have twenty (20)
days from the date of the motion to respond. The Arbitrator thereupon shall
reconsider the issues raised by the motion and, promptly, either confirm or
change the decision, which (except as provided by law) shall then be final and
conclusive upon the parties.
Arbitration Fees and Costs
--------------------------
The Company will be responsible for paying any filing fee and the fees
and costs of the Arbitrator; provided, however, that if I am the party
initiating the claim, I will contribute an amount equal to the filing fee to
initiate a claim in the court of general jurisdiction in the state in which I am
(or was last) employed by the Company. Each
party shall pay for its own costs and attorneys' fees, if any. However, if any
party prevails on a statutory claim which affords the prevailing party
attorneys' fees and costs, or if there is a written agreement providing for
attorneys' fees and/or costs, the Arbitrator may award reasonable attorneys'
fees and/or costs to the prevailing party, applying the same standards a court
would apply under the law applicable to the claim(s).
Judicial Review
---------------
Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award.
Interstate Commerce
-------------------
I understand and agree that the Company is engaged in transactions
involving interstate commerce.
Requirements for Modification or Revocation
-------------------------------------------
This Agreement to arbitrate shall survive the termination of my
employment and the expiration of any benefit plan. It can only be revoked or
modified by a writing signed by both the Company's Chief Executive Officer and
me which specifically states an intent to revoke or modify this Agreement.
Sole and Entire Agreement
-------------------------
This is the complete agreement of the parties on the subject of
arbitration of disputes (except for any arbitration agreement in connection with
any pension or benefit plan). This Agreement supersedes any prior or
contemporaneous oral or written understandings on the subject. No party is
relying on any representations, oral or written, on the subject of the effect,
enforceability or meaning of this Agreement, except as specifically set forth in
this Agreement.
Construction
------------
If any provision of this Agreement is adjudged to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement. All other provisions shall remain in
full force and effect.
Consideration
-------------
The promises by the Company and by me to arbitrate differences, rather
than litigate them before courts or other bodies, provide consideration for each
other.
Voluntary Agreement
-------------------
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO
A JURY TRIAL.
Employee initials:
----------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Xxxxx X. Xxxxxxx: Charys Holding Company Inc.
/s/ Xxxxx X. Xxxxxxx /s/Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
Xxxxx X Xxxxxxx CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date Date
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO
A JURY TRIAL.
Employee initials:
----------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Xxxxx X Xxxxxxx: Charys Holding Company Inc.
/s/Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date Date
APPENDIX A
DUTIES AND PRIORITIES:
----------------------
POSITION: President and Chief Financial Officer
RESPONSIBILITY:
[] Development of subsidiary annual operating plan objectives.
[] Achievement of annual objectives agreed to by Corporation
[] Development of TelecommunicationsInfrastructure Market
- Sales opportunity development
- Customer relationship management
- Company acquisition opportunity identification
identification
- New market business development
[] Management of Telecommunication Infrastructure Businesses
- Financial, Employee, and other management
decisions necessary to ensure profitability and
achievement of objectives
STARTING: Effective Date of purchase of Digital Communications
Services Inc.
REPORTS TO: Chief Executive Officer - Charys Technologies Inc.
LOCATION: As Mutually Agreed
COMPENSATION: Annual Salary: See EXHIBIT 1, attached hereto and made
a part hereof
EXHIBIT 1
---------
BASE SALARY COMPENSATION
------------------------
Initial $750,000 $1 M $1.5M $2M
Xxxxx Xxxxxxx $120,000 $145,000 $165,000 $200,000 $225,000
Xxxxxx X. Xxxxxxx $ 96,000 $110,000 $125,000 $160,000 $185,000
1. Base salary levels based upon achieving revenues at the stated levels
for 3 months of any 5 month period, together with achieving a net operating
profit.
EXHIBIT C
---------
EMPLOYMENT AGREEMENT
--------------------
I, XXX XXXXXXX, an individual ("Executive") residing in West Palm Beach,
Florida, agree to the terms and conditions of employment with DIGITAL
COMMUNICATIONS SERVICES, INC. a Kentucky corporation located at 00 XX 0xx
Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx 00000 ("Company"), set forth in this Employment
Agreement ("Agreement").
1. TERM OF EMPLOYMENT. My employment under this Agreement shall
commence on June 1, 2006 and shall end on the third anniversary of that date
(Expiration Date), or such earlier date on which my employment is terminated
under Section 5 of this Agreement. On each anniversary of my commencement of
employment under this Agreement, the Expiration Date shall be extended for one
year unless the Company notified me at least thirty (30) days before that
anniversary that it was not extending this Agreement. If the Company
continues to employ me beyond the Expiration Date without entering into a
written agreement extending the term of this Agreement, except as provided in a
new written employment agreement between the Company and me, all obligations and
rights under this Agreement shall prospectively lapse as of the Expiration
Date, except the Company's ongoing indemnification obligation under Section 4,
my confidentiality, etc. obligations under Section 6, and our mutual arbitration
obligations under Section 8, and I thereafter shall be an at-will employee of
the Company.
2. NATURE OF DUTIES. I shall be the Co-President and Chief
Financial Officer of the Digital Communications Services subsidiary of Charys
Holding Company. As such, I shall have the responsibilities set forth in
APPENDIX A. I agree that the Company may alter my duties from time to time if
such duties are consistent with that of the position held by the Executive. I
shall devote substantially, all my business time and effort to the performance
of my duties for the Company, which I shall perform faithfully and to the best
of my ability. I shall be subject to the Company's policies, procedures and
approval practices, as generally in effect from time to time. Notwithstanding
the foregoing or any other provision of this Agreement, it shall not be a breach
or violation of this Agreement for me to (i) serve on corporate (subject to
approval of the Board), civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions,
(iii) manage personal investments, including my interest in Xxxxxx X. Xxxxxxx,
PA, and Xxxxxx Title and Trust, Inc., or other businesses in which I currently
have a financial interest, so long as such activities do not significantly
interfere with or significantly detract from the performance of my
responsibilities to the Company in accordance with this agreement.
3. PLACE OF PERFORMANCE. I shall be based at the Company's office
in Tampa, FL, except for required travel on the Company's business and stays at
my primary residence in West Palm Beach, Florida.
4. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. The Company shall pay me, or designated
business entity, a base salary at an annual rate as determined by APPENDIX A.
attached hereto and made a part hereof, with such base salary payable in
installments consistent with the Company's normal payroll schedule, subject to
applicable withholding and other taxes.
(b) DISCRETIONARY BONUSES AND STOCK OPTIONS. Following the
Earn out period described in EXHIBIT C of the Digital Communications Services
Stock Purchase agreement, I shall be eligible for bonuses and other incentive
compensation under bonus and incentive compensation plans generally available to
other similarly situated Company executives.
(c) STANDARD BENEFITS. During my employment, I shall be
entitled to participate in all employee benefit plans and programs, including
paid vacations, to the same extent generally available to other similarly
situated Company executives, in accordance with the terms of those plans and
programs. The Company shall have the right to terminate or change any such plan
or program at any time.
(d) INDEMNIFICATION. The Company shall extend to me the same
indemnification arrangements as are generally provided to other similarly
situated Company executives, including after termination of my employment.
(e) EXPENSES.I shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and business expenses I
incur in connection with my employment, but I must incur and account for those
expenses in accordance with the policies and procedures established by the
Company.
(f) XXXXXXXX-XXXXX ACT LOAN PROHIBITION. To the extent that
any Company benefit, program, practice, arrangement, or this Agreement would or
might otherwise result in my receipt of an illegal loan (Loan), the Company
shall use reasonable efforts to provide me with a substitute for the Loan that
is lawful and of at least equal value to me. If this cannot be done, or if doing
so would be significantly more expensive to the Company than making the Loan,
the Company need not make the Loan to me or provide me substitute for it.
5. TERMINATION.
(a) RIGHTS AND DUTIES. If my employment is terminated, I
shall be entitled to the amounts or benefits shown on the applicable row of the
following table, subject to the balance of this Section 5. The Company and I
shall have no further obligations to each other, except the Company's ongoing
indemnification obligation under Section 4, my confidentiality, etc. obligations
under Section 6, and our mutual arbitration obligations under Section 8, or as
set forth in any written agreement I subsequently enter into with the Company.
----------------------------------------------------------------------------------
DISCHARGE Payment or provision when due of (1) any unpaid base salary,
FOR CAUSE expense reimbursements, and vacation days accrued prior to
termination of employment, and (2) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans,
including any Earn Out compensation computed up to the date of
termination of employment.
----------------------------------------------------------------------------------
DISABILITY Same as for "Discharge for Cause" EXCEPT that I also shall be
potentially eligible for disability benefits under any Company-
provided disability plan in which I then participate.
----------------------------------------------------------------------------------
DISCHARGE Same as for "Discharge for Cause" EXCEPT that, in exchange for
OTHER my execution of a release in accordance with this section, my Base
THAN Salary, but not my employment, shall continue through for one (1)
FOR CAUSE year regardless of the remaining term of this Agreement.
OR
DISABILITY
----------------------------------------------------------------------------------
RESIGNATION Same as for "Discharge for Cause."
----------------------------------------------------------------------------------
DEATH Same as for "Discharge for Cause" EXCEPT that payments shall be
made to my legal representative
----------------------------------------------------------------------------------
EXPIRATION Same as for "Discharge for Cause."
OF
AGREEMENT
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
CHANGE OF Payment or provision when due of (1) any unpaid base salary,
CONTROL expense reimbursements, and vacation days accrued prior to
termination of employment, (2) other unpaid vested amounts or
benefits under Company compensation, incentive, and benefit plans
(3) pay to the Executive on the termination date a lump sum payment
equal to three (3) times Base Salary as of the date of my resignation
resulting from the Change in Control and (4) all stock options
previously granted to Employee shall become fully vested and
immediately exerciseable..
----------------------------------------------------------------------------------
(b) DISCHARGE FOR CAUSE. The Company may terminate my
employment at any time if it believes in good faith that it has Cause to
terminate me. "Cause" shall include, but not be limited to:
(i) my refusal to follow the Company's lawful directions
or my material failure to perform my duties (other than by reason of physical or
mental illness, injury, or condition), in either case, after I have been given
notice of my default and a 10 day opportunity to cure my default;
(ii) my failure to comply with Company policies;
(i) my engaging in conduct that is or may be unlawful or
disreputable, to the possible detriment of the Company and its
subsidiaries n;
(ii) my becoming insolvent or filing for bankruptcy;
(iii) my seeking, exploring, or accepting a position
with another business enterprise or venture without the Company's written
consent at any time more than 90 days before the Expiration Date; or
(iv) my engaging in activities on behalf of an
enterprise which competes or plans to compete with the Company or any of its
subsidiaries or affiliates.
(c) TERMINATION FOR DISABILITY. Except as prohibited by
applicable law, the Company may terminate my employment on account of
Disability, or may transfer me to inactive employment status, which shall have
the same effect under this Agreement as a termination for Disability.
"Disability" means a physical or mental illness, injury, or condition that
prevents me from performing my duties with reasonable accommodations for a
period of 30 consecutive days or 60 days in any one-year period.
(d) DISCHARGE OTHER THAN FOR CAUSE OR DISABILITY. The Company
may terminate my employment at any time for any reason, and without advance
notice. If I am terminated by the Company other than for Cause under Section
5(b) or for Disability under Section 5(c), I will only receive the special
benefits provided for a non-Cause discharge under Section 5 (a) if I sign a
general release form furnished to me by the Company (which may include any
provision customary in formal settlement agreements and general releases,
including such things as my release of the Company and all conceivably related
persons or entities ("affiliates") from all known and unknown claims, my
covenant never in the future to pursue any released claim, my promise not to
solicit current or former customers, employees, suppliers or, to the fullest
extent lawful, engage in business activities that compete with the Company or
any affiliate, or disclose or use any of their proprietary or trade secret
information) within 60 days after my employment ends (or within 60 days after an
arbitrator determines that I am entitled to such payments if I sign the general
release) and I do not thereafter properly revoke the release. I may resign my
employment within 60 days after a Change of Control in which event I shall only
receive the special benefits provided for a Non-Cause Discharge Due to a Change
of Control under Section 5(a).
(b) RESIGNATION. I promise not to resign my employment before
the Expiration Date without giving the Company at least 30 days advance written
notice. If I resign, I shall only receive the payments required by Section 5 A
and the Company may accept my resignation effective on the date set forth in my
notice or any earlier date.
(f) DEATH. If I die while employed under this Agreement,
the payments required by Section 5(a) in the event of my death shall be made to
my legal representative.
(g) TRANSFERS TO GROUP MEMBER. My transfer to a subsidiary of
the Company ["Group Member"] shall not be deemed a termination of my employment
under this Agreement if it assumes this Agreement. However, not withstanding
anything contained to the contrary in this Agreement or the Stock Purchase
Agreement, when the Company achieves revenues greater than or equal to
$1,000,000 for three months of any five month period, together with achieving a
net operating profit, the Company shall be transferred to or made a part of a
separate division or group for Telecommunications Services and the Executive, at
that time shall assume the duties of President of that Division reporting to the
CEO of Charys Holding Company, Inc.
(h) DISPUTES UNDER THIS SECTION. All disputes relating to
this Agreement, including disputes relating to this section, shall be resolved
by final and binding arbitration under Section 8. For example, if the Company
and I disagree as to whether the Company had Cause to terminate my employment,
we will resolve the dispute through arbitration; the arbitrator will decide
whether the Company had Cause to terminate me.
(i) AMOUNTS OWED TO THE COMPANY. Any amounts payable to me
under this section shall first be applied to repay any amounts I owe the
Company.
(j) DEFINITION OF CHANGE OF CONTROL. Consummation by the
company of (x) a reorganization, merger, consolidation or other form of
corporate transaction or series of related transactions, in each case, with
respect to which persons who were the shareholders of the Company immediately
prior to such reorganization, merger or consolidation or other transaction do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company's then outstanding voting securities, in
substantially the same proportions as their ownership immediately prior to such
reorganization, merger, consolidation or other transaction, or (y) the sale of
all or substantially all of the assets of the Company; provided that, with
respect to this Section, a Change in Control shall not be deemed to have
occurred should any of the contingencies referred to in this Section result from
terms of executed contractual agreements, and such terms are in effect on or
before the Commencement Date.
17. CONFIDENTIALITY. I acknowledge that as an integral part of
the Company's business, the Company has developed, and will develop, at a
considerable investment of time and expense, marketing and business plans and
strategies, procedures, methods of operation and marketing, financial data,
lists of actual and potential customers and suppliers, and independent sales
representatives and related data, technical procedures, engineering and product
specifications, plans for development and expansion, and other confidential and
sensitive information, and I acknowledge that the Company has a legitimate
business interest in protecting the confidentiality of such information. I
acknowledge that I will be entrusted with such information as well as
confidential information belonging to customers, suppliers, and other third
parties.
18. "TRADE SECRETS" are defined as information, regardless of
form, belonging to the Company, licensed by it, or disclosed to it on a
confidential basis by its customers, suppliers, or other third parties,
including, but not limited to, technical or nontechnical data, formulae,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, product plans, or lists of actual or potential
customers or suppliers which are not commonly known by or available to the
public and which information: (i) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use; and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
19. "CONFIDENTIAL INFORMATION" is defined as information,
regardless of form, belonging to the Company, licensed by it, or disclosed to it
on a confidential basis by its customers, suppliers, or other third parties,
other than Trade Secrets, which is material and valuable to the Company and not
generally known by the public.
20. PROMISE NOT TO DISCLOSE. I promise never to use or disclose
any Trade Secret before it has become generally known within the relevant
industry through no fault of my own. I agree that this promise shall never
expire. I further promise that, while this Agreement is in effect and for 2
years after its termination, I will not, without the prior written approval of
the Company, use or disclose any Confidential Information before it has become
generally known within the relevant industry through no fault of my own.
21. PROMISE NOT TO SOLICIT. To prevent me from inevitably breaking
this promise, I further agree that, while this Agreement is in effect and for 18
months after its termination: (1) as to any customer or supplier of the Group
with whom I had dealings or about whom I acquired proprietary information during
my employment, I will not solicit or attempt to solicit (or assist others to
solicit) the customer or supplier to do business with any person or entity other
than the Group; and (2) I will not solicit or attempt to solicit (or assist
others to solicit) for employment any person who is, or within the preceding 12
months was, an officer, manager, employee, or consultant of the Group.
22. PROMISE NOT TO ENGAGE IN CERTAIN EMPLOYMENT. I agree that,
while this Agreement is in effect and for 18 months after its termination, I
will not accept any employment or engage in any activity, without the written
consent of the Company's Board of Directors if the loyal and complete
fulfillment of my duties in such employment would inevitably require me to
reveal or utilize Trade Secrets or Confidential Information, as reasonably
determined by the Company's Board of Directors.
23. RETURN OF INFORMATION. When my employment with the Company
ends, I will promptly deliver to the Company, or, at its written instruction,
destroy, all documents, data, drawings, manuals, letters, notes, reports,
electronic mail, recordings, and copies thereof, of or pertaining to it or any
other Group member in my possession or control. In addition, during my
employment with the Company or the Group and thereafter, I agree to meet with
Company personnel and, based on knowledge or insights I gained during my
employment with the Company and the Group, answer any question they may have
related to the Company or the Group.
24. PROMISE TO DISCUSS PROPOSED ACTIONS IN ADVANCE. To prevent the
inevitable use or disclosure of Trade Secrets or Confidential Information, I
promise that, before I disclose or use Trade Secrets or Confidential Information
and before I commence employment, solicitations, or any other activity that
could possibly violate the promises I have just made, I will discuss my proposed
actions with an attorney for the Company, who will advise me in writing whether
my proposed actions would violate these promises.
25. INTELLECTUAL PROPERTY. Intellectual property (including such
things as all ideas, concepts, inventions, plans, developments, software, data,
configurations, materials (whether written or machine-readable), designs,
drawings, illustrations, and photographs, that may be protectable, in whole or
in part, under any patent, copyright,
trademark, trade secret, or other intellectual property law), developed,
created, conceived, made, or reduced to practice during my Company employment
(except intellectual property that has no relation to the Group or any Group
customer that I developed, etc., purely on my own time and at my own expense),
shall be the sole and exclusive property of the Company, and I hereby assign all
my rights, title, and interest in any such intellectual property to the Company.
26. EXECUTION OF INNOVATION AGREEMENT. I agree to the terms of
the Company's Assignment of Inventions agreement, which is attached to this
Agreement as Schedule 1, and I promise to execute it contemporaneously with this
Agreement.
27. ENFORCEMENT OF THIS SECTION. Sections 6-13 shall survive
the termination of this Agreement for any reason, t; these section's terms are
reasonable and necessary to protect the Company's legitimate interests, these
section's restrictions will not prevent me from earning or seeking a livelihood,
these section's restrictions shall apply wherever permitted by law, and my
violation of any of thee section's term would irreparably harm the Company.
Accordingly, I agree that, if I violate any of the provisions of these sections,
the Company or any Group member shall be entitled to, in addition to other
remedies available to it, an injunction to be issued by any court of competent
jurisdiction restraining me from committing or continuing any such violation,
without the need to prove the inadequacy of money damages or post any bond or
for any other undertaking.
17. NOTICE.
(a) TO THE COMPANY. I will send all communications to the
Company in writing, addressed as follows (or in any other manner the Company
notifies me to use):Charys Holding Company Inc. Attention: Xxxxx Xxx, CEO 0000
Xxxxxxxxx Xxxxxx Xxxx, Xxxxx X 000 Xxxxxxx, Xxxxxxx 00000 Fax: (000) 000-0000
Tel: (000) 000-0000.
(b) To Me. All communications from the Company to me relating
to this Agreement must be sent to me in writing at my Company office or in any
other manner I notify the Company to use.
(c) TIME NOTICE DEEMED GIVEN. Notice shall be deemed to
have been given when delivered or, if earlier (1) when mailed by United States
certified or registered mail, return receipt requested, postage prepaid, or (2)
faxed with confirmation of delivery, in either case, addressed as required in
this section.
18. ARBITRATION OF DISPUTES. All disputes between the Company and
me are to be resolved by final and binding arbitration in accordance with the
separate Arbitration Agreement attached as Schedule 2 to this Agreement. This
section shall remain in effect after the termination of this Agreement.
19. GOLDEN PARACHUTE LIMITATION. I agree that my payments and
benefits under this Agreement and all other contracts, arrangements, or programs
shall not, in the aggregate, exceed the maximum amount that may be paid to me
without triggering golden parachute penalties under Section 280G and related
provisions of the Internal Revenue Code, as determined in good faith by the
Company's independent auditors. If any benefits must be cut back to avoid
triggering such penalties, my benefits shall be cut back in the priority order
designated by the Company. If an amount in excess of the limit set forth in
this section is paid to me, I will repay the excess amount to the Company upon
demand, with interest at the rate provided for in Internal Revenue Code
Section 1274(b)(2)(B). The Company and I agree to cooperate with each other in
connection with any administrative or judicial proceedings concerning the
existence or amount of golden parachute penalties with respect to payments or
benefits I receive.
20. AMENDMENT. No provisions of this Agreement may be modified,
waived, or discharged except by a written document signed by a duly authorized
Company officer and me. Thus, for example, promotions, commendations, and/or
bonuses shall not, by themselves, modify, amend, or extend this Agreement. A
waiver of any conditions or provisions of this Agreement in a given instance
shall not be deemed a waiver of such conditions or provisions at any other time.
21. INTERPRETATION; EXCLUSIVE FORUM. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the state of Georgia (excluding any that mandate the use of another
jurisdiction's laws). Any litigation, arbitration, or similar proceeding with
respect to such matters only may be brought within that state, and all parties
to this Agreement consent to that state's jurisdiction and agree that venue
anywhere in that state would be proper.
22. SUCCESSORS. This Agreement shall be binding upon, and shall
inure to the benefit of, me and my estate, but I may not assign or pledge this
Agreement or any rights arising under it, except to the extent permitted under
the terms of the benefit plans in which I participate. Without my consent, the
Company may assign this Agreement to any affiliate or successor that agrees in
writing to be bound by this Agreement, after which any reference to the
"Company" in this Agreement shall be deemed to be a reference to the affiliate
or successor, and the Company thereafter shall have no further primary,
secondary or other responsibilities or liabilities under this Agreement of any
kind.
23. TAXES. The Company shall withhold taxes from payments it makes
pursuant to this Agreement as it determines to be required by applicable law.
24. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. In
the event that a court of competent jurisdiction determines that any provision
of this Agreement is invalid or more
restrictive than permitted under the governing law of such jurisdiction, then
only as to enforcement of this Agreement within the jurisdiction of such court,
such provision shall be interpreted and enforced as if it provided for the
maximum restriction permitted under such governing law.
25. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute the same instrument.
26. ENTIRE AGREEMENT. All oral or written agreements or
representations, express or implied, with respect to the subject matter of this
Agreement are set forth in this Agreement. However, this Agreement does not
override other written agreements I have executed relating to specific aspects
of my employment, such as conflicts of interest.
27. FORMER EMPLOYERS. I am not subject to any employment,
confidentiality, or other agreement or restriction that would prevent me from
fully satisfying my duties under this Agreement or that would be violated if I
did so.
28. DEPARTMENT OF HOMELAND SECURITY VERIFICATION REQUIREMENT. If I
have not already done so, I agree to timely file all documents required by the
Department of Homeland Security to verify my identity and my lawful employment
in the United States. Notwithstanding any other provision of this Agreement, if
I fail to meet any such requirements promptly after receiving a written request
from the Company to do so, I agree that my employment shall terminate
immediately and that I shall not be entitled to any compensation from the
Company of any type.
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL
--------------------------------------------------------------------------------
By: Charys Holding Company Inc.
----------------------
Name: /s/Xxx Xxxxxxx By: /s/ Xxxxx X. Xxx Xx.
-------------------- -------------------------------------------
Name: Xxxxx X. Xxx Xx.
-----------------------------------------
Title: CEO
----------------------------------------
Date: 06-06-06 Date: 6-12-06
-------------------- -----------------------------------------
--------------------------------------------------------------------------------
I ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME
RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED IN IT AND THAT
I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY
PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT ITSELF.
I FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.
--------------------------------------------------------------------------------
By: Charys Holding Company Inc.
----------------------
Name: By: /s/ Xxxxx X. Xxx Xx.
-------------------- -------------------------------------------
Name: Xxxxx X. Xxx Xx.
-----------------------------------------
Title: CEO
----------------------------------------
Date: Date: 6-12-06
-------------------- -----------------------------------------
Schedule 1
----------
ASSIGNMENT OF INVENTIONS
------------------------
1. I will promptly disclose in writing to the Company all Inventions. For
purposes of this Agreement, "Invention" shall mean any discovery, whether or not
patentable, as well as improvements thereto, which is conceived or first
practiced by me, alone or in a joint effort with others, whether prior to or
following execution of this Agreement, which: (i) may be reasonably expected to
be used in a product of the Company; (ii) results from work that I have been
assigned as part of my duties as an employee of the Company; (iii) is in an area
of technology which is the same as or substantially related to the areas of
technology with which I am involved; (iv) is useful, or which the Company
reasonably expects may be useful, in any manufacturing or product design process
of the Company; or (v) utilizes any Confidential Information.
2. All Inventions developed while employed by the Company in the scope of
such my employment and duties belong to and are the sole property of the Company
and will be subject to this Agreement. I assign to the Company all right, title,
and interest I may have or may acquire in and to all Inventions. I shall sign
and deliver to the Company (during and after employment) any other documents
that the Company considers reasonably necessary to provide evidence of (i) the
assignment of all of my rights, if any, in any Inventions and (ii) the Company's
ownership of such Inventions.
3. I will assist the Company in applying for, prosecuting, obtaining, or
enforcing any patent, copyright, or other right or protection relating to any
Invention, all at the Company's expense but without consideration to me in
excess of my salary or wages. If the Company requires any assistance after
termination of my employment, I will be compensated for time actually spent in
providing that assistance at an hourly rate equivalent to my salary or wages
during the last period of employment with the Company.
4. If the Company is unable to secure my signature on any document necessary
to apply for, prosecute, obtain, or enforce any patent, copyright, or other
right or protection relating to any Invention, whether due to my mental or
physical incapacity or any other cause, I hereby irrevocably designate and
appoint the Company and each of its duly authorized officers and agents as my
agent and attorney-in-fact, to act for and in my behalf to execute and file any
such document and to do all other lawfully permitted acts
to further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protections, with the same force and effect as if executed and
delivered by me.
Employee: Charys Holding Company Inc.
/s/ Xxx Xxxxxxx /s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
Xxx Xxxxxxx Xxxxx X. Xxx Xx. CEO
----------------------------------------------
Print Name of Employee Title of Representative
06-06-06 6-12-06
------------------------- ----------------------------------------------
Date Date
to further the prosecution, issuance, and enforcement of patents, copyrights, or
other rights or protections, with the same force and effect as if executed and
delivered by me.
Employee: Charys Holding Company Inc.
/s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date Date
Schedule 2
----------
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
------------------------------------
I recognize that differences may arise between the Company and me
during or following my employment with the Company, and that those differences
may or may not be related to my employment. I understand and agree that by
entering into this Mutual Agreement to Arbitrate Claims ("Agreement"), I
anticipate gaining the benefits of a speedy, impartial, final and binding
dispute-resolution procedure.
Except as provided in this Agreement, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings pursuant to
this Agreement. To the extent that the Federal Arbitration Act is inapplicable,
or held not to require arbitration of a particular claim or claims, state law
pertaining to agreements to arbitrate shall apply.
Claims Covered by the Agreement
-------------------------------
The Company and I mutually consent to the resolution by arbitration of
all claims or controversies ("claims"), past, present or future, whether or not
arising out of my employment (or its termination), that the Company may have
against me or that I may have against any of the following (1) the Company, (2)
its officers, directors, employees or agents in their capacity as such or
otherwise, (3) the Company's parent, subsidiary and affiliated entities, (4) the
Company's benefit plans or the plans' sponsors, fiduciaries, administrators,
affiliates and agents, and/or (5) all successors and assigns of any of them.
The only claims that are arbitrable are those that, in the absence of
this Agreement, would have been justiciable under applicable state or federal
law. The claims covered by this Agreement include, but are not limited to:
claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination
(including, but not limited to, race, sex, sexual orientation, religion,
national origin, age, marital status, physical or mental disability or handicap,
or medical condition); claims for benefits (except claims under an I benefit or
pension plan that either (1) specifies that its claims procedure shall culminate
in an arbitration procedure different from this one, or (2) is underwritten by a
commercial insurer which decides claims); and claims for violation of any
federal, state, or other governmental law, statute, regulation, or ordinance,
except claims excluded in the section of this Agreement entitled "Claims Not
Covered By The Agreement."
Except as otherwise provided in this Agreement, both the Company and I
agree that neither of us shall initiate or prosecute any lawsuit or
administrative action (other than an administrative charge of discrimination to
the Equal Employment Opportunity Commission, California Department of Fair
Employment and Housing or similar fair employment practices agency, or an
administrative charge within the jurisdiction of the National Labor Relations
Board), in any way related to any claim covered by this Agreement.
Claims Not Covered by the Agreement
-----------------------------------
Claims for workers' compensation or unemployment compensation benefits
are not covered by this Agreement.
Also not covered are claims by the Company or by me for temporary
restraining orders or preliminary injunctions ("temporary equitable relief") in
cases in which such temporary equitable relief would be otherwise authorized by
law. Such resort to temporary equitable relief shall be pending and in aid of
arbitration only, and in such cases the trial on the merits of the action will
occur in front of, and will be decided by, the Arbitrator, who will have the
same ability to order legal or equitable remedies as could a court of general
jurisdiction.
Time Limits for Commencing Arbitration and Required Notice of All Claims
------------------------------------------------------------------------
The Company and I agree that the aggrieved party must give written
notice of any claim to the other party no later than the expiration of the
statute of limitations (deadline for filing) that the law prescribes for the
claim. Otherwise, the claim shall be void and deemed waived. I understand that
the aggrieved party is encouraged to give written notice of any claim as soon as
possible after the event or events in dispute so that arbitration of any
differences may take place promptly.
Written notice to the Company, or its officers, directors, employees
or agents, shall be sent to the Company's chief operating officer or chief legal
officer or person with similar authority at the Company's then-current address.
I will be given written notice at the last address recorded in my personnel
file.
The written notice shall identify and describe the nature of all
claims asserted, the facts upon which such claims are based and the relief or
remedy sought. The notice shall be sent to the other party by certified or
registered mail, return receipt requested.
Representation
--------------
Any party may be represented by an attorney or other representative
selected by the party.
Discovery
---------
Each party shall have the right to take depositions of up to 10 fact
witnesses and any expert witness designated by another party. Each party also
shall have the right to make requests for production of documents to any party
and to subpoena documents from third parties. Requests for additional discovery
may be made to the Arbitrator selected pursuant to this Agreement. The
Arbitrator may grant an order for such requested additional discovery if the
Arbitrator finds that the party requires it to adequately arbitrate a claim,
taking into account the parties' mutual desire to have a fast, cost-effective
dispute resolution mechanism.
Designation of Witnesses
------------------------
At least 30 days before the arbitration, the parties must exchange
lists of witnesses, including any experts, and copies of all exhibits intended
to be used at the arbitration.
Subpoenas
---------
Each party shall have the right to subpoena witnesses and documents
for the arbitration as well as documents relevant to the case from third
parties.
Arbitration Procedures
----------------------
The arbitration will be held under the auspices of a sponsoring
organization, either the American Arbitration Association ("AAA") or Judicial
Arbitration & Mediation Services, with the designation of the sponsoring
organization to be made by the party who did not initiate the claim.
The Company and I agree that, except as provided in this Agreement,
the arbitration shall be in accordance with the sponsoring organization's
then-current employment arbitration rules/procedures. The Arbitrator shall be
either a retired judge, or an attorney who is experienced in employment law and
licensed to practice law in the state in which the arbitration is convened (the
"Arbitrator"). The arbitration shall take place in or near the city in which I
am or was last employed by the Company.
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of eleven (11) arbitrators drawn from
its panel of employment dispute arbitrators. Each party shall have ten (10)
calendar days from the postmark date on the list to strike all names on the list
it deems unacceptable. If only one common name remains on the lists of all
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of all parties, the sponsoring organization shall furnish an additional
list of eleven (11) arbitrators from which the parties shall strike alternately,
with the party initiating the claim striking first, until only one name remains.
That person shall be designated as the Arbitrator.
The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state in which the claim arose, or federal law,
or both, as applicable to the claim(s) asserted. The Arbitrator is without
jurisdiction to apply any different substantive law or law of remedies. The
Federal Rules of Evidence shall apply. The Arbitrator shall have exclusive
authority to resolve any dispute relating to the interpretation, applicability,
enforceability or formation of this Agreement, including but not limited to any
claim that all or any part of this Agreement is void or voidable. The
arbitration shall be final and binding upon the parties, except as provided in
this Agreement.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person, as the Arbitrator deems
advisable. The Arbitrator shall have the authority to entertain a motion to
dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure.
Either party, at its expense, may arrange for and pay the cost of a
court reporter to provide a stenographic record of proceedings.
Should any party refuse or neglect to appear for, or participate in,
the arbitration hearing, the Arbitrator shall have the authority to decide the
dispute based upon whatever evidence is presented.
Either party, upon request at the close of hearing, shall be given
leave to file a post-hearing brief. The time for filing such a brief shall be
set by the Arbitrator.
The Arbitrator shall render an award and written opinion in the form
typically rendered in labor arbitrations no later than thirty (30) days from the
date the arbitration hearing concludes or the post-hearing briefs (if requested)
are received, whichever is later. The opinion shall include the factual and
legal basis for the award.
Either party shall have the right, within twenty (20) days of issuance
of the Arbitrator's opinion, to file with the Arbitrator a motion to reconsider
(accompanied by a supporting brief), and the other party shall have twenty (20)
days from the date of the motion to respond. The Arbitrator thereupon shall
reconsider the issues raised by the motion and, promptly, either confirm or
change the decision, which (except as provided by law) shall then be final and
conclusive upon the parties.
Arbitration Fees and Costs
--------------------------
The Company will be responsible for paying any filing fee and the fees
and costs of the Arbitrator; provided, however, that if I am the party
initiating the claim, I will contribute an amount equal to the filing fee to
initiate a claim in the court of general jurisdiction in the state in which I am
(or was last) employed by the Company. Each party shall pay for its own costs
and attorneys' fees, if any. However, if any party prevails on a statutory claim
which affords the prevailing party attorneys' fees and costs, or if there is a
written agreement providing for attorneys' fees and/or costs, the Arbitrator may
award reasonable attorneys' fees and/or costs to the prevailing party, applying
the same standards a court would apply under the law applicable to the claim(s).
Judicial Review
---------------
Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement and to enforce an
arbitration award.
Interstate Commerce
-------------------
I understand and agree that the Company is engaged in transactions
involving interstate commerce.
Requirements for Modification or Revocation
-------------------------------------------
This Agreement to arbitrate shall survive the termination of my
employment and the expiration of any benefit plan. It can only be revoked or
modified by a writing signed by both the Company's Chief Executive Officer and
me which specifically states an intent to revoke or modify this Agreement.
Sole and Entire Agreement
-------------------------
This is the complete agreement of the parties on the subject of
arbitration of disputes (except for any arbitration agreement in connection with
any pension or benefit plan). This Agreement supersedes any prior or
contemporaneous oral or written understandings on the subject. No party is
relying on any representations, oral or written, on the subject of the effect,
enforceability or meaning of this Agreement, except as specifically set forth in
this Agreement.
Construction
------------
If any provision of this Agreement is adjudged to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement. All other provisions shall remain in
full force and effect.
Consideration
-------------
The promises by the Company and by me to arbitrate differences, rather
than litigate them before courts or other bodies, provide consideration for each
other.
Voluntary Agreement
-------------------
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I
UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT,
AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON
ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN
THIS AGREEMENT ITSELF.
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO
A JURY TRIAL.
Employee initials:
----------
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF
THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
Xxx Xxxxxxx: Charys Holding Company Inc.
/s/ Xxx Xxxxxxx /s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
Xxx Xxxxxxx CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
06-06-06 6-12-06
------------------------- ----------------------------------------------
Date: Date:
Xxx Xxxxxxx: Charys Holding Company Inc.
/s/ Xxxxx X. Xxx Xx.
------------------------- ----------------------------------------------
Signature of Employee Signature of Authorized Company Representative
CEO
------------------------- ----------------------------------------------
Print Name of Employee Title of Representative
6-12-06
------------------------- ----------------------------------------------
Date: Date:
APPENDIX A
DUTIES AND PRIORITIES:
----------------------
POSITION: Co-President and Chief Financial Officer
RESPONSIBILITY:
[] Development of subsidiary annual operating plan objectives.
[] Achievement of annual objectives agreed to by Corporation
[] Development of Telecommunications Infrastructure Market
- Sales opportunity development
- Customer relationship management
- Company acquisition opportunity
identification
- New market business development
[] Management of Telecommunication Infrastructure Businesses
- Financial, Employee, and other management
decisions necessary to ensure profitability and
achievement of objectives
STARTING: Effective Date of purchase of Digital Communications
Services Inc.
REPORTS TO: Chief Executive Officer - Charys Technologies Inc.
LOCATION: As Mutually Agreed
COMPENSATION: Annual Salary: See EXHIBIT 1, attached hereto and made
a part hereof
EXHIBIT 1
---------
BASE SALARY COMPENSATION
------------------------
Initial $750,000 $1 M $1.5M $2M
Xxxxx Xxxxxxx $120,000 $145,000 $165,000 $200,000 $225,000
Xxxxxx X. Xxxxxxx $ 96,000 $110,000 $125,000 $160,000 $185,000
1. Base salary levels based upon achieving revenues at the stated levels
for 3 months of any 5 month period, together with achieving a net operating
profit.
EXHIBIT D
Earn out: Following are the performance targets including sale revenue, net income
and EBITDA for the Company for the approximate 3 years following the
date of Acquisition. If targets are achieved then, for each year, a
percentage of net income, as illustrated, will be paid as Bonus
Compensation within 90 days following the end of each fiscal year. Of
such Bonus Compensation, the respective Sellers may elect, in their sole
discretion, to receive up to 50% of the Bonus Compensation in cash. The
balance of the Bonus Compensation may be paid in cash or stock, at the
discretion of Charys, with acceptance by Executive. In the event Charys
elects to pay the Bonus Compensation in stock, the number of shares to be
issued to the Executive shall be computed based on a share price equal to
the Closing Price of the Buyers' stock ads of the date of this Agreement.
However, in the event that the Company incurs a net operating loss during
any annual period such share price shall change to the then current market
price of the Buyers' stock for all remaining earn out payments.
Earn Out
Calculation
FULL YEAR 1 FULL YEAR 2 FULL YEAR 3
------------ ------------ ------------
Revenue Projection - $ 18,000,000 $ 30,000,000 $ 45,000,000
EBITDA Projection - $10% 1,800,000 $ 3,000,000 $ 4,500,000
Net Earnings Projection - $ 6% 1,080,000 $ 1,800,000 $ 2,700,000
Earn-out Goal - $ 540,000 $ 900,000 $ 1,350,000
Total Earn-out Goal $ 1,560,000
Actual Results Illustration
Revenues $11,000,000 $18,000,000 $22,000,000
EBITDA $ 1,000,000 $ 1,900,000 $ 2,200,000
Net Earnings $ 300,000 $ 1,100,000 $ 1,400,000
Percentage of Goal Met
Revenues 110.00% 100.00% 91.67%
EBITDA 100.00% 105.56% 91.67%
Net Earnings 50.00% 101.85% 97.22%
Calculation Factor
Revenues 10% 11.00% 10.00% 9.17%
EBITDA 60% 60.00% 63.33% 55.00%
Net Earnings 30% 15.00% 30.56% 29.17%
Calculation Factor (i) 86.00% 103.89% 93.33%
$258,000 $561,000 $672,000
Earn-out - Cash/Stock Payout
Total Earn-out Achieved $1,491,0
NOTES
-----
(i) Such calculation factor shall not exceed 110% for any given
period. However, any Earn Out amounts not utilized during any annual
period due to the 110% cap on the calculation factor may be carried
forward to benefit any remaining earn out periods.
(ii) Management fees shall be limited to those expenses incurred by
Buyer directly for the benefit of the Company. Any allocated income
taxes shall be based upon Buyer's actual effective income tax rate for
each respective annual period.
(iii) Sellers shall have the right to receive additional compensation,
under a plan to be mutually agreed to, for acquisitions completed by
the Buyer resulting from the direct efforts of the Sellers.
Earn Out Illustration
FULL YEAR 1 FULL YEAR 2 FULL YEAR 3
------------ ------------ ------------
Revenue Projection - $ 10,000,000 $ 18,000,000 $ 24,000,000
EBITDA Projection - 10% $ 1,000,000 $ 1,800,000 $ 2,400,000
Net Earnings Projection - 6% $ 600,000 $ 1,080,000 $ 1,440,000
Earn-out Goal $ 300,000 $ 540,000 $ 720,000
EXHIBIT E
OPINION OF COUNSEL
EXHIBIT F
FINANCIAL STATEMENTS
EXHIBIT G
STATEMENT OF MATERIAL LIABILITIES
Pending litigation with Cross Country Cable
Pending Inland Marine Insurance Settlement with CNA with regard to Equipment,
lost in connection with Hurricane Xxxxxxx
EXHIBIT H
STATEMENT OF MATERIAL CONTRACTS
SCHEDULE 4.2 LIST OF CURRENT STOCKHOLDERS OF THE COMPANY
Xxxxx X. Xxxxxxx 80%
Xxxxxx X. Xxxxxxx 20%
SCHEDULE 4.10
TITLE TO PROPERTY AND ASSETS
SCHEDULE 8.2
PROCEEDING OR LITIGATION
Cross Country Cable litigation, with Plaintiff claiming approximately $638,000,
of which the Company has accrued a reserve for settlement the amount of $510,000
as of March 31, 2006.
