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Exhibit 10.16
KEY EMPLOYEE EMPLOYMENT AGREEMENT
THIS KEY EMPLOYEE EMPLOYMENT AGREEMENT ("Agreement") executed as of the
21st Day of June, 1999, by and between ADVANCED SWITCHING COMMUNICATIONS, INC.,
a Delaware corporation ("Employer") and ▇▇▇▇▇ ▇. D'▇▇▇▇▇▇ ("Employee"), an
individual resident of Potomac, Maryland.
W I T N E S S E T H:
WHEREAS, the Employee is the Chief Financial Officer and Employer and
Employee shall each benefit in a significant way if the Employer retains or
continues to retain the services of Employee for the future and accordingly the
parties hereto have determined it to be in their mutual best interest to enter
into this Employment Agreement; and
NOW, THEREFORE, in consideration of the covenants and conditions
hereinafter stated, and intending to be legally bound, the parties hereto agree
as follows:
1. EMPLOYMENT: Employer hereby employs Employee and Employee hereby
accepts employment upon the terms and conditions set forth herein.
2. TERM: Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall begin on the date set forth above and
shall continue for a period of three (3) years unless sooner terminated as
herein provided.
3. COMPENSATION:
a. BASE SALARY: For services rendered by Employee under this
Agreement, the Employer shall pay to the Employee base salary at the rate of
$150,000.00 per year, payable in semi monthly installments or more frequently
according to the policies of the Employer. Said salary is subject to annual
adjustments as approved by the Board of Directors of Employer, or the Chief
Executive Officer of Employer.
b. BONUSES: Employee shall receive such bonuses as may be
determined by the Board of Directors of Employer or the Chief Executive Officer
of Employer.
c. EXPENSES: In addition to base salary and bonuses, Employer shall
reimburse Employee for all necessary business expenses incurred by him in the
performance of his duties, including, without limitation, expenses for travel,
meals, entertainment and other miscellaneous business expenses. Employee shall
submit to Employer written itemized expense accountings and
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such additional substantiation and justification as Employer may reasonably
request.
d. OTHER EMPLOYEE BENEFITS. Employee shall be provided with such
other benefits as are made available to other Employees of the Employer,
including but not limited to, medical and permanent disability insurance.
4. DUTIES; EXTENT OF SERVICES: Employee is engaged for the purpose
of (i) performing services Chief Financial Officer, and shall train the
Employer's other employees (as applicable). Employee shall have such other
duties as shall be assigned by the board of directors or Chief Executive Officer
of Employer. Employee shall devote full time and attention, and best efforts, to
the performance of the duties described hereunder. Key Employee acknowledges
that the discharge of the duties of Employee may require Employee to work, from
time to time, at reasonable hours on weekends or evenings and accordingly
Employee agrees not to undertake any part time work responsibilities without the
prior written approval of Employer and Employee agrees that this is a reasonable
restriction.
5. WORKING FACILITIES: The Employee shall be furnished with
appropriate working facilities and tools necessary for the proper performance of
his duties.
6. SPECIAL COVENANTS REGARDING WORK PRODUCT AND INTELLECTUAL
PROPERTY.
a. In consideration of the salary or wages received by Employee and as a
condition upon, and part of the consideration for, the employment or continued
employment of Employee, but without limitation upon Employer's right to
terminate the Employee's employment, Employee hereby assigns and transfers to
Employer, and agrees that Employer shall be the owner of all inventions,
discoveries, drawings, computer software, algorithms, improvements and devices
heretofore or hereafter conceived, including intellectual property rights such
as patents and copyrights (hereinafter referred to as "work product") developed
or made by Employee, either alone or with others, in whole or in part during
Employee's employment by Employer, which are useful in, or directly or
indirectly related to Employer's business or which relate to, or are conceived,
developed or made in the course of, Employee's employment or which are developed
or made from, or by reason of knowledge gained from, such employment. Employer
shall have the right to use work product as described hereinabove, whether
original or derivative, in any manner whatsoever, and Employee acknowledges that
all work product described hereinabove shall be considered as "work made for
hire"
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belonging to the Employer.
b. Employee hereby agrees to disclose promptly and in writing to any
officers or representatives designated by Employer all work product heretofore
or hereafter conceived or made by Employee alone or with others during
Employee's employment to which Employer is entitled as above provided and agrees
not to disclose such work product except as required by his employment, without
the express consent of the Employer. Employee further agrees that during his
employment by Employer and at any time thereafter, he will, upon the request of
Employer, execute proper assignments to Employer of any and all such work
product to which Employer is entitled as above provided, and will execute all
papers and perform all other lawful acts which Employer may deem necessary or
advisable for the preparation, prosecution, procurement and maintenance of
trademark, copyright and/or patent applications and trademarks, copyrights
and/or patents of the United States of America and foreign countries for such
work product to which Employer is entitled as above provided, and will execute
any and all proper documents as shall be required or necessary to vest title in
Employer to such work product and all trademark, copyright, and patent
applications and trademarks, copyrights and patents pertaining thereto. It is
understood that all expenses in connection with such trademarks, copyrights, and
patents and all applications related thereto shall be borne by Employer, but
Employer shall be under no obligation to protect by trademark, copyright,
patent, or otherwise any such work product except at its own discretion and to
such extent as Employer shall deem desirable. Employee shall not be entitled to
any additional compensation, other than his regular salary or wages and his
participation in an employee benefit plan, if any, of the Employer, for any
services rendered by Employee as herein provided during the term of his
employment. Employee shall be entitled to reimbursement for reasonable expenses
incurred in connection with employment hereunder, provided, however, that any
expense in excess of $100.00 shall be subject to the prior written consent of
the board of directors.
c. Notwithstanding the foregoing, the provisions of this agreement do not
apply to an invention for which no equipment, supplies, facility, or trade
secret information of the Employer was used and which was developed entirely on
the Employee's own time, unless (a) the invention is useful in, or directly or
indirectly related to (i) Employer's business or relates to, or is conceived,
developed or made in the course of, Employee's employment or is developed or
made from, or by reason of knowledge gained from, such employment, or (ii) to
the Employer's actual or demonstrably anticipated research or development, or
(b) the invention or rendering results from any work performed by the Employee
for the Employer.
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7. RESTRICTIVE COVENANTS/PROTECTION OF PROPRIETARY INFORMATION:
a. The parties hereto recognize that Employee's knowledge and skill are a
material factor in inducing the Employer to enter into this Agreement. Further,
in the course of his employment, and because of the nature of his
responsibilities, Employee will acquire valuable and confidential information
and trade secrets with regard to the Employer's business operation, including,
but not limited to, Employer's existing and contemplated services and products,
documentation, technical data, business and financial methods and practices,
plans, pricing, lists of Employer's customers and prospective customers, methods
of obtaining customers, financial and operational data of Employer's present and
prospective customers, and the particular business requirements of the
Employer's present and prospective customers. In addition, Employee may develop
on behalf of the Employer, a personal acquaintance with some of the Employer's
customers and prospective customers. As a consequence, Employee will occupy a
position of trust and confidence with respect to the Employer's affairs and its
services. In view of the foregoing, and in consideration of the remuneration
paid and to be paid to the Employee, Employee agrees that it is reasonable and
necessary for the protection of the good will and business of the Employer that
the Employee make the covenants contained in subparagraphs b., c., and d. below
regarding the conduct of Employee during and after his employment relationship
with the Employer, and that the Employer will suffer irreparable injury if
Employee engages in conduct prohibited thereby.
b. Employee covenants and agrees that for a period of twenty four (24)
months from the termination of his employment for any reason whatsoever, or the
from the expiration of the term, (the "Non-Compete Period"), he will not
directly or indirectly, as principal, agent, owner, joint venturer, investor,
employee, or consultant, develop software or related hardware, or assist others
to develop software or related hardware, which is in competition with the
Employer, with functionality similar to the functionality of any software
product(s) developed or under development by Employer, anywhere in the world
(the "Non-Compete Zone"). "Develop software products or related hardware" shall
mean design, create, general or detailed functional or technical specifications
for, create or write code for, enhance, debug or otherwise modify code for, or
otherwise participate in the creation or modification of software product(s) or
hardware related thereto. Employee agrees that the Employer is engaged in the
development of certain internet technology which is capable of application on a
worldwide basis and, accordingly, the above restriction is reasonable and will
not prohibit Employee from obtaining employment at the date of termination of
this Agreement.
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c. Employee further covenants and agrees that during the Non-Compete
Period, he shall not, directly or indirectly, (i) induce or attempt to induce,
or aid others in inducing, an employee of Employer or its affiliates to leave
the employ of Employer or its affiliates, or in any way interfere with the
relationship between Employer or its affiliates and an employee thereof, or (ii)
in any way interfere with the relationship between Employer or its affiliates
and any customer, supplier, licensee or other business relation of Employer or
its affiliates.
d. Employee agrees that any and all of the Employer's confidential and
proprietary information, which includes the matters contained above, including
all intellectual property rights therein, shall be and shall remain the sole and
exclusive property of the Employer. While in the employ of the Employer, or at
any time thereafter, Employee will not, without the express written consent of
the Employer, directly or indirectly, communicate or divulge to or use for the
benefit of himself or any other person, firm, association or corporation, any of
the Employer's trade secrets or confidential information, including, by way of
illustration, the matters contained in subparagraph a. above, or which were
communicated to or otherwise learned of or acquired by Employee in the course of
his employment with the Employer, except that Employee may disclose such matters
to the extent that disclosure is required, (i) in the course of his employment
with Employer or (ii) by a court or governmental agency of competent
jurisdiction without proof of specific damages. Employee will not use such trade
secrets or confidential information in any way or in any capacity other than as
an employee of the Employer and to further the interest of the Employer.
8. VACATION: Employee shall be entitled to receive such paid
vacation during each year of this Agreement, while employed full time as the
Employer shall approve from time to time. Vacation shall be taken at such time
or times as will not unreasonably hinder or interfere with Employee's
representation of the Employer's customers or the business or operations of
Employer.
9. DISABILITY: Employee's disability and/or sick leave shall be
covered by the usual and customary policies and procedures of the Employer.
10. TERMINATION:
a. WITH CAUSE: Employer may, at any time, terminate this Agreement
with cause, with no further obligations to
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Employee. With cause shall include:
i. The Employee's conviction of, or plea of guilty or nolo contendere to, a
felony or a crime of falsehood or involving moral turpitude, or fraud or other
act or acts of dishonesty on the Employee's part;
ii. The failure of Employee to perform his duties to the Employer or the
failure of Employee to comply with the reasonable directions of the board of
directors or Chief Executive Officer of Employer;
iii. The determination of the Board of directors in the exercise of its
reasonable judgement that the Employee has committed an act that negatively
affects the Employer's business or reputation or indicates alcohol or drug abuse
by Employee that adversely affects his performance hereunder;
iv. Direct or indirect competition with the Employer; and/or
v. A material breach by Employee of the terms of this Agreement or that
certain Key Employee Stock Purchase Agreement between Employer and Employee.
If the Employee's Employment is terminated with cause, Employee shall be
entitled to receive accrued Base Salary.
b. WITHOUT CAUSE: Without cause, the Employee may terminate this
Agreement upon two (2) weeks written notice to the Employer. In such event,
Employee shall continue to render his services up to the date of termination.
Without cause, the Employer may terminate this agreement at any time with two
(2) weeks written notice to Employee upon the consent of the Board of Directors.
Termination without cause by Employee shall mean the voluntary termination of
the Agreement by Employee. In such event, Employee, if requested by the
Employer, shall continue to render his services and shall be paid his regular
compensation, including any declared but unpaid bonuses, up to the date of
termination.
11. WARRANTIES OF EMPLOYEE: As a material consideration in the
employment of Employee, Employee hereby confirms representations previously made
to Employer that he or she is free to enter into this employment arrangement
with Employer and hereby warrants that the obligations contained herein do not
conflict with any other agreement with any previous employer or independent
contracting party.
12. REMEDIES:
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(a) In the event of a breach or threatened breach of this Agreement
by Employee, Employer shall be entitled, in addition to all other remedies
otherwise available to Employer, to an injunction, enjoining and restraining
such breach or threatened or intended breach, and the Employee hereby consents
to the issuance thereof forthwith in any court of competent jurisdiction without
proof of specific damages.
(b) In the event that either party shall enforce any part of this
Agreement through legal proceedings and the other shall have been in default
hereof, such defaulting party agrees to pay to nondefaulting party any costs and
attorneys' fees reasonably incurred in connection therewith.
13. CUMULATIVE RIGHTS: All of the rights and remedies of the parties
hereto shall be cumulative with, and in addition to, any other rights, remedies
or causes of action allowed by law and shall not exclude any other rights or
remedies available to either of the parties hereto.
14. NOTICES: Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by certified mail,
return receipt requested, to his residence in the case of the Employee, or to
the principal office in the case of the Employer.
15. WAIVER OF BREACH: The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such party.
16. GOVERNING LAW AND VENUE: The validity of this Agreement, the
construction and enforcement of its terms, and the interpretation of the rights
and duties of the parties shall be governed by the laws of the Commonwealth of
Virginia, and the venue for disputes related thereto will be the United States
District Court for the Eastern District of Virginia or the Circuit Court of
Fairfax County.
17. SEVERABILITY: In the event any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall be unimpaired,
and shall continue in full force and effect.
18. ASSIGNMENT: The rights and obligations of the Employee under
this Agreement are not assignable. The rights and obligations of the Employer
under this Agreement inure to the benefit and shall be binding upon the
successors and assigns of the Employer.
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19. SURVIVAL OF PROVISIONS: The provisions of this Agreement set
forth in paragraphs 6,7 and 11 hereof, and Employee's representations and
warranties contained herein, shall survive termination of employment.
20. ENTIRE AGREEMENT: This instrument contains the entire agreement
of the parties with respect to employment of Employee. It may not be changed
orally, but only by agreement in writing, signed by the party against whom
enforcement of any such waiver, change, modification, extension or discharge is
sought.
21. ADVICE OF COUNSEL AND CONSTRUCTION. The parties acknowledge that
this Agreement was drafted by counsel to the Employer who represented its
interests and not Employee. All parties to this Agreement have been represented
by counsel or have had the opportunity to be so represented. Accordingly the
rule of construction of contract language against the drafting party is hereby
waived by all parties.
IN WITNESS WHEREOF, the parties have executed this agreement on the day and
year first above written.
EMPLOYER:
ADVANCED SWITCHING COMMUNICATIONS, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. MOSTATA
Name: ▇▇▇▇▇▇ ▇. Mostata
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Title: President & CEO
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EMPLOYEE:
/s/ ▇▇▇▇▇ ▇. D'▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. D'▇▇▇▇▇▇
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