Exhibit 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into and made effective as of
May 1, 1999, by and among Log On America, Inc., a Delaware corporation
("Employer") and Xxxxxxx X. Xxxxxxx ("Employee").
R E C I T A L S
WHEREAS, Employer is desirous of hiring Employee as one of its key employees;
WHEREAS, Employee is willing to accept employment as an employee of Employer;
and WHEREAS, the parties hereto desire to delineate the responsibilities of
Employee and the expectations of Employer;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and obligations herein contained, the parties hereto agree as follows:
AGREEMENT
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby accepts
employment with Employer, upon the terms and conditions set forth in this
Agreement.
2. TERM OF EMPLOYMENT. The employment of Employee pursuant to the terms of
this Agreement shall commence as of May 1, 1999, and shall continue for a
period of Six (6) years, unless sooner terminated pursuant to the
provisions hereof; PROVIDED, HOWEVER, that this Agreement shall, unless
earlier terminated, as of the fifteenth of each month of the term of this
Agreement, be automatically extended for an additional month.
3. DUTIES.
3.1. BASIC DUTIES. Subject to the direction and control of the Board of
Directors of Employer, Employee shall serve as the Chief Financial
Officer of Employer and shall fulfill all duties and obligations of
such office.
3.2. OTHER DUTIES OF EMPLOYEE. In addition to the foregoing, Employee
shall perform such other or different duties related to those set
forth in Paragraph 3.1 as may be assigned to him from time to time
by Employer; PROVIDED, HOWEVER, that any such additional assignment
shall be at a level of responsibility commensurate with that set
forth in Paragraph 3.1 and PROVIDED, FURTHER, that Employee may
serve, or continue to serve, on the boards of directors of and hold
any other offices or positions in, companies or entities that in the
judgment of Employer will not present any conflict of interest with
Employer or any of its operations or adversely affect the
performance of Employee's duties pursuant to this Agreement.
3.3. TIME DEVOTED TO EMPLOYMENT. Employee shall devote his full time to
the business of Employer during the term of this Agreement to
fulfill his obligations hereunder.
3.4. PLACE OF PERFORMANCE OF DUTIES. The services of Employee shall be
performed at Employer's place of business, Gainesville Florida, and
at such other locations as shall be designated from time to time by
Employer.
4) COMPENSATION AND METHOD OF PAYMENT.
4.1 TOTAL COMPENSATION. As compensation under this Agreement, Employer
shall pay and Employee shall accept the following:
1) For each year of this Agreement, measured from the effective date
hereof, base compensation of ninety thousand dollars ($90.000), and
further increased annually by ten percent (10%) per year, plus such
additional increases as may be approved from time to time by the
Employer. All such increases shall be effective as of the beginning
of such calendar year in which the increase becomes effective
pursuant to the terms hereof or is approved by the Employer, as the
case may be. Such adjustments may be based on the performance of
Employer, the value of Employee to Employer or any other factors
considered relevant by Employer.
(2) For each year:
(i) an income performance based bonus ("Income Performance
Bonus"), payable quarterly, as stated in the 1998 management
incentive plan
(3) Reimbursement of such discretionary expenses as are reasonable and
necessary, in the judgment of the Employer, for Employee's
performance of his responsibilities under this Agreement.
(4) Nonqualified options issued at the discretion of the Employer.
(5) Participation in Employer's employee fringe benefit programs in
effect from time to time for employees at comparable levels of
responsibility. Participation will be in accordance with any
applicable policies adopted by Employer. Employee shall be entitled
to vacations, absences for illness, and to similar benefits of
employment, and shall be subject to such policies and procedures as
may be adopted by Employer. Without limiting the generality of the
foregoing, it is initially anticipated that such benefits of
employment shall include four (4) weeks' vacation during each
12-month period of employment with Employer (which shall accrue
monthly on a PRO RATA basis and which shall be carried forward for a
period not to exceed three (3) years and otherwise in accordance
with Employer's policies); major medical and health insurance; life
and disability insurance; and stock option plans for employees and
members of the Board of Directors. Employer further agrees that in
the event it offers disability insurance to its employees, Employer
shall arrange for Employee to be covered by similar insurance.
(6) In addition, Employee shall be entitled to: (a) a car allowance of
$750 per month, (b) if for any reason Employee shall not be covered
by a health insurance policy of Employer, a medical insurance
coverage expense allowance of $800 per month.
(7) In the event of a Change of Control of Employer (as such term is
defined in Section 4.3(2) hereof), Employee shall be entitled to
receive the balance of the unpaid base compensation ("Unpaid Base
Compensation") which would otherwise be payable to
Employee during the remainder of the term of this Agreement pursuant
to Section 4.1(1) hereof within thirty (30) days of the date of such
Change of Control and any and all options granted to Employee
pursuant to Section 4.1(4) hereof and otherwise shall vest
immediately upon the date of such Change of Control; PROVIDED,
HOWEVER, in the event of such Change of Control of Employer, the
term of this Agreement shall automatically be extended to a period
of five (5) years from the date of such Change of Control of
Employer for purposes of this Section 4.1(7).
4.2 PAYMENT OF COMPENSATION. Employer shall pay the compensation provided for
in Section 4.1 hereof as follows:
(1) Employer shall pay the base compensation in cash in twenty-six equal
installments or in accordance with Employer's payroll practices for
all its employees, but in no event less frequently than bimonthly.
(2) Employer shall pay in cash the reimbursement of such discretionary
expenses provided in Section 4.1(3) hereof.
5. TERMINATION OF AGREEMENT.
5.1. BY NOTICE. This Agreement, and the employment of Employee hereunder,
may be terminated by Employee or Employer upon ninety (90) days'
written notice of termination; PROVIDED, HOWEVER, in the event
Employer terminates this Agreement for any reason other than the
occurrence of any of the events set forth in Sections 5.2(2), (3),
(4), (6), or (8), and subject to Section 4.1(7) hereof. Employee
shall be entitled to receive the balance of the unpaid base salary
which would otherwise be payable to Employer during the remainder of
the term of this Agreement pursuant to Sections 4.1(1) and 4.1(6)
hereof within thirty (30) days after such ninety (90) day notice
period.
5.2. OTHER TERMINATION. This Agreement, and the employment of Employee
hereunder, shall terminate immediately upon the occurrence of any
one of the following events:
(1) The death or mental or physical incapacity of Employee.
(2) The loss by Employee of legal capacity (other than as
described in Section 5.2(l) hereof).
(3) The willful engaging by Employee in an act of dishonesty
constituting a felony under the laws of the state in which
Employer's principal place of business is located, resulting
or intending to result in gain or personal enrichment at the
expense of Employer or to the detriment of Employer's business
and to which Employee is not legally entitled.
(4) The continued incapacity in excess of one hundred eighty (180)
days on the part of Employee to perform his duties, unless
waived by Employer.
(5) The mutual written agreement of Employee and Employer.
(6) The expiration of the term of this Agreement.
(7) The involuntary termination of Employee as a director of
Employer.
(8) Employee's breach of this Agreement.
5.3 EFFECT OF TERMINATION BY REASON OF DEATH OR INCAPACITY. In the event
of the termination of Employee's employment pursuant to Sections
5.2(l) or (4) of this Agreement prior to the completion of the term
of employment specified herein, and subject to Section 4.1(7)
hereof, Employee shall be entitled to receive the balance of the
unpaid compensation (including any Incentive Compensation pursuant
to Section 4.4 hereof) which is not covered by disability or other
insurance and which would otherwise be payable to Employee during
the term of this Agreement pursuant to Section 4.1(1) hereof within
60 days after such termination.
5.4. REMEDIES. No termination of the employment of Employee pursuant to
the terms of this Agreement shall prejudice any other remedy to
which any party to this Agreement may be entitled either at law, in
equity, or under this Agreement.
6. PROPERTY RIGHTS AND OBLIGATIONS OF EMPLOYEE.
6.1. TRADE SECRETS. For purposes of this Agreement, "trade secrets" shall
include without limitation any and all financial, cost and pricing
information and any and all information contained in any drawings,
designs, plans, proposals, customer lists, records of any kind,
data, formulas, specifications, concepts or ideas, where such
information is reasonably related to the business of Employer and
has not previously been publicly released by duly authorized
representatives of Employer or Parent or otherwise lawfully entered
the public domain.
6.2. PRESERVATION OF TRADE SECRETS. Employee will preserve as
confidential all trade secrets pertaining to Employer's business
that have been or may be obtained or learned by him by reason of his
employment or otherwise. Employee will not, without the written
consent of Employer, either use for his own benefit or purposes or
disclose or permit disclosure to any third parties, either during
the term of his employment hereunder or thereafter (except as
required in fulfilling the duties of his employment), any trade
secret connected with the business of Employer.
6.3. TRADE SECRETS OF OTHERS. Employee agrees that he will not disclose
to Employer or induce Employer to use any trade secrets belonging to
any third party.
6.4. PROPERTY OF EMPLOYER. Employee agrees that all documents, reports,
files, analyses, drawings, designs, tools, equipment, plans
(including, without limitation, marketing and sales plans),
proposals, customer lists, computer software or hardware, and
similar materials that are made by him or come into his possession
by reason of his employment with Employer are the property of
Employer and shall not be used by him in any way adverse to
Employer's interests. Employee will not allow any such documents or
things, or any copies, reproductions or summaries thereof to be
delivered to or used by any third party without the specific consent
of Employer. Employee agrees to deliver to the Board of Directors of
Employer or its designee, upon demand, and in any event upon the
termination of Employee's employment, all of such documents and
things which are in Employee's possession or under his control.
6.5 NONCOMPETITION BY EMPLOYEE. During the term of this Agreement, and
for a period of one (1) year following the termination of this
Agreement, Employee shall not, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, principal
stockholder, corporate officer, director, or in any other individual
or representative capacity: (i) engage or participate in any
business that is in competition in any manner with the business of
Employer; (ii) divert, take away or attempt to divert or take away
(and during the one year period, call on or solicit) any of
Employer's clients within the United States. For purposes of this
Agreement, the term "Employer's clients" shall mean clients who had
a business relationship with Employer prior to Employee's employment
with Employer and those who develop a business relationship with
Employer, during Employee's employment with Employer; (iii)
undertake planning for or organization of any business within the
United States or in any other country in which Employer is engaged
in business activity competitive with Employer's business within the
United States or in any other country in which Employer is engaged
in business or combine or conspire with employees or other
representative of Employer's business within the United States or in
any other country in which Employer is engaged in business for the
purpose of organizing any such competitive activity within the
United States or in any other country in which Employer is engaged
in business; or (iv) induce or influence (or seek to induce or
influence) any person who is engaged, as an employee, agent,
independent contractor or otherwise by Employer within the United
States or in any other country in which Employer is engaged in
business to terminate his or her employment or engagement.
6.6 SURVIVAL PROVISIONS AND CERTAIN REMEDIES. Unless otherwise agreed to
in writing between the parties hereto, the provisions of this
Section 6 shall survive the termination of this Agreement. The
covenants in this Section 6 shall be construed as separate covenants
and to the extent any covenant shall be judicially unenforceable, it
shall not affect the enforcement of any other covenant. In the event
Employee breaches any of the provisions of this Section 6, Employee
agrees that Employer shall be entitled to injunctive relief in
addition to any other remedy to which Employer may be entitled.
7. GENERAL PROVISIONS.
7.1. NOTICES. Any notices or other communications required or permitted
to be given hereunder shall be given sufficiently only if in writing
and served personally or sent by certified mail, postage prepaid and
return receipt requested, addressed as follows:
If to Employer: Log On America, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Paolo
Tel: 000-000-0000 Ext: 2
Fax: 000-000-0000
If to Employee: Xxxxxxx X. Xxxxxxx
0000 XX 00xx Xxxx
Xxxxxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
However, either party may change his/its address for purposes of this Agreement
by giving written notice of such change to the other party in accordance with
this Paragraph 7.1. Notices delivered personally shall be deemed effective as of
the day delivered and notices delivered by mail shall be deemed effective as of
three days after mailing (excluding weekends and federal holidays).
7.2. CHOICE OF LAW AND FORUM. Except as expressly provided otherwise in
this Agreement, this Agreement shall be governed by and construed in
accordance with the laws of the State of Rhode Island. The parties
agree that any dispute arising under this Agreement, whether during
the term of this Agreement or at any subsequent time, shall be
resolved exclusively in the courts of the State of Rhode Island and
the parties hereby submit to the jurisdiction of such courts for all
purposes provided herein and appoint the Secretary of State of the
State of Rhode Island as agent for service of process for ail
purposes provided herein.
7.3. ENTIRE AGREEMENT; MODIFICATION AND WAIVER, This Agreement supersedes
any and all other agreements, whether oral or in writing, between
the parties hereto with respect to the employment of Employee by
Employer and contains all covenants and agreements between the
parties relating to such employment in any manner whatsoever. Each
party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, oral or written, have been
made by any party, or anyone acting on behalf of any party, which
are not embodied herein, and that no other agreement, statement, or
promise not contained in this Agreement shall be valid or binding.
Any modification of this Agreement shall be effective only if it is
in writing signed by the party to be charged. No waiver of any of
the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall
be binding unless executed in writing by the party making the
waiver.
7.4. ASSIGNMENT. Because of the personal nature of the services to be
rendered hereunder, this Agreement may not be assigned in whole or
in part by Employee without the prior written consent of Employer.
However, subject to the foregoing limitation, this Agreement shall
be binding on, and shall inure to the benefit of, the parties hereto
and their respective heirs, legatees, executors, administrators,
legal representatives, successors and assigns.
7.5. SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable, or invalid as applied to any particular
case or in all cases, such circumstances shall not have the effect
of rendering any such provision inoperative, unenforceable, or
invalid in any other case or of rendering any of the other
provisions of this Agreement inoperative, unenforceable or invalid.
7.6 CORPORATE AUTHORITY. Employer represents and warrants as of the date
hereof that Employer's execution and delivery of this Agreement to
Employee and the carrying out of the provisions hereof have been
duly authorized by Employer's Board of Directors and authorized by
Employer's shareholders and further represents and warrants that
neither the execution and delivery of this Agreement, nor the
compliance with the terms and provisions thereof by Employer will
result in the breach of any state regulation, administrative or
court order, nor will such compliance conflict with, or result in
the breach of, any of the terms or conditions of Employer's Articles
of Incorporation or Bylaws, as amended, or any agreement or other
instrument to which Employer is a party, or by which Employer is or
may be bound,
or constitute an event of default thereunder, or with the lapse of
time or the giving of notice or both constitute an event of default
thereunder.
7.7. ATTORNEYS' FEES. In any action at law or in equity to enforce or
construe any provisions or rights under this Agreement, the
unsuccessful party or parties to such litigation, as determined by
the courts pursuant to a final judgment or decree, shall pay the
successful party or parties all costs, expenses, and reasonable
attorneys' fees incurred by such successful party or parties
(including, without limitation, such costs, expenses, and fees on
any appeals), and if such successful party or parties shall recover
judgment in any such action or proceedings, such costs, expenses,
and attorneys' fees shall be included as part of such judgement.
7.8. COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
7.9. HEADINGS AND CAPTIONS. Headings and captions are included for
purposes of convenience only and are not a part hereof.
7.10. CONSULTATION WITH COUNSEL. Employee acknowledges that he has had the
opportunity to consult with counsel independent of Employer or
Employer's counsel, Xxxxxxxx Xxxxxx Esq., regarding the entering
into of this Agreement and has done so to the extent he sees fit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the day and year first written above at Providence, Rhode Island.
"Employer"
Log On America, Inc.,
a Delaware corporation
By: /s/ Xxxxx X. Paolo 5/1/99
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Xxxxx X. Paolo Chief Executive Officer
"Employee"
By: Xxxxxxx X. Xxxxxxx 5/1/99
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Xxxxxxx X. Xxxxxxx
