EXHIBIT 10.3
------------
EMPLOYMENT AND NONCOMPETITION AGREEMENT
(▇▇▇▇ ▇. ▇▇▇▇▇)
THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT ("Agreement") is entered
into to be effective January 17, 2000 ("Effective Date"), between USOL HOLDINGS,
INC., an Oregon corporation (the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇ ("Employee").
WHEREAS, the Company has requested Employee to serve as, and Employee
has agreed to serve as, the Senior Vice President ("Senior Vice President") of
the Company; and
WHEREAS, the Company and Employee desire to enter into this Agreement
to formally set forth the terms and conditions under which Employee will be
employed by the Company.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:
1. Duties and Responsibilities.
------ --- ----------------
a. Position. The Company and Employee agree that, subject to the terms
and conditions of this Agreement, the Company will employ Employee and Employee
will serve as the Company's Senior Vice President. Employee also agrees to serve
as the Senior Vice President of USOL, Inc., an Oregon corporation ("USOL"). In
the sole discretion of the Board of Directors, Employee may be elected to the
board of, and/or be appointed as an executive officer of, affiliates and
subsidiaries of the Company, without the necessity for an amendment,
modification to or additional compensation under this Agreement.
b. Duties. Employee shall perform the following duties, and shall have
the following authority, and such other executive duties and authority as may
from time to time be assigned to him by the Board of Directors of the Company in
its reasonable discretion.
i. Corporate Development. Employee will be responsible for
assisting the Chief Executive Officer ("CEO"), Chief Operating Officer ("COO"),
President, and Chief Financial Officer ("CFO") of the Company and USOL with
acquisition and merger opportunities consistent with the Company's and USOL's
business plans.
ii. Developing the Company's and USOL's Infrastructure.
Employee will be responsible for assisting the CEO, COO, President and CFO of
the Company and USOL in streamlining and strengthening the Company's and USOL's
systems and procedures, including systems and procedures for processing of
information, completing organizational charts and job descriptions, and human
resource procedures.
iii. Finance. Employee will be responsible for assisting the
CEO, COO, President and CFO of the Company and USOL in identifying and procuring
sources of capital and credit.
iv. Development of General Managers. Employee will be res-
ponsible for assisting the CEO, COO, President of the Company and USOL and other
Company/USOL officers/managers in hiring, managing, training and developing
General Managers for the Company's/USOL's affiliates, markets or divisions.
v. Sales/Marketing. Employee will be responsible for: (a)
assisting the Vice President of Sales of the Company and USOL in meeting sales
quotas; (b) assisting the CEO, COO, President and Vice President of Sales of the
Company and USOL in drafting and implementing strategy; (c) drafting and
implementing budgets of the Company and USOL; (d) assisting in locating and
executing key strategic alliances and ventures for the Company's/USOL's products
and services; and (e) assisting the Vice President of Sales of the Company and
USOL with development of new products and services for the Company's/ USOL's
customers.
1
vi. Customer Service Bureau. Employee will be responsible for
assisting the CEO, COO, President, CFO and Manager of Operations and the Manager
of the Customer Service Bureau ("CSB") of the Company and USOL in continuing to
improve CSB operations and with the development of CTM, billing platforms,
training programs, and overall systems and procedures.
vii. Other Duties. Employee's initial responsibilities will be
focused on the telecommunications portion of the Company's and USOL's business
(including without limitation engineering, technical, field, overall strategic
planning, overall strategic planning with respect to this business segment,
specific strategic direction relating to telecommunications and convergence
technology (Internet, voice, video), comprehensive operations planning to
achieve performance targets of this segment relative to the corporate business
plan, network architecture and economics, switch engineering, organizational
planning and staffing, financial planning for this segment, cost and metrics
analysis, revenue assurance, IXC and LEC billing reconciliation and resolution,
IXC and LEC contract negotiations, P&L and budgeting responsibility for business
segment, federal, state and local regulatory matters affecting
telecommunications. In the sole discretion of the Company and/or USOL,
Employee's responsibilities may be expanded to additionally focus on the cable
and video, internet, and other portions of the Company's and/or USOL's business.
c. Extent of Services.
------------------
i. Except as provided in this Agreement or otherwise permitted
by the Board of Directors of the Company, Employee shall devote his full time,
attention and energies to the business of the Company and USOL and to the
performance of his duties as described above. Employee will use his full time,
attention and energies to promote the interests and welfare of the Company and
USOL. Notwithstanding the preceding two sentences, the Company understands and
agrees that during the first 120 days of this Agreement Employee will continue
to have other outside responsibilities in transitioning from his prior
activities; during this 120 day period, Employee will not be able to devote his
full time to the Company and the Company agrees that Employee's completion of
his prior responsibilities and other transition tasks will not constitute a
breach of this Agreement; provided, Employee will devote such time to the
Company during this 120-day period that is acceptable to the Company in its sole
discretion.
ii. Employee may participate in other businesses as a passive investor, provided
that Employee shall not, without the prior approval of a majority of the Board
of Directors of the Company (other than Employee if he is serving as a
director): (a) actively participate in the operation or management of such
businesses; or (b) make or maintain any investment in any entity with which the
Company has a commercial relationship of any kind, including that of lessor,
partner, investor, vendor, supplier, consultant or otherwise, or which is in
competition with the Company. The following exceptions apply to the restrictions
on Employee's activities in the preceding sentence: Employee may invest in the
securities of any publicly traded companies so long as such investments do not
constitute more than five percent (5%) of the outstanding voting securities of
any such company.
2. Term of Employment.
----------------
a. Definitions. For the purposes of this Agreement the following
terms shall have the following meanings:
i. "Termination For Cause" shall mean termination by Company
of Employee's employment with Company because of (A) Employee's material breach
of this Agreement, and such breach is not cured within thirty (30) days after
written notice of such breach from Company to Employee; (B) a consistent course
of Employee's conduct which would hold Company or any of its affiliates in
disrepute or scandal, as determined by Company's Board of Directors in its
reasonable discretion; (C) failure to follow lawful directions in conformity
with this Agreement of Company's Board of Directors or its designee; and such
failure is not cured within thirty (30) days after written notice of such
failure from Company to Employee; (D)
2
any material breach by Employee of his fiduciary duties to Company or USOL; (E)
gross neglect by Employee of his duties under this Agreement as determined by
Company's Board of Directors in its reasonable discretion; (F) any act of theft
or dishonesty by Employee--this clause is intended to apply to Employee acts
that would cause the Company's board of directors in its reasonable discretion
to lose trust in Employee to such an extent that it would no longer trust
Employee to fulfill his duties under this Agreement; (G) Employee's disability
pursuant to Section 2.e of this Agreement; or (H) Employee's death pursuant to
Section 2.f of this Agreement.
ii. "Termination Other Than For Cause""shall mean termination
by Company of Employee's employment with Company (other than in a Termination
for Cause) and shall include constructive termination of Employee's employment
resulting from material breach of this Agreement by Company; such termination
shall only be effective if Company has failed to cure such material breach
within thirty (30) days after written notice from Employee to Company of a
material breach.
iii. "Voluntary Termination" shall mean termination by
Employee of Employee's employment by Company other than (a) constructive
termination as described in Section 2.a.ii, (b) "Termination Upon a Change in
Control," and (c) termination by reason of Employee's death or disability as
described in Sections 2.e and 2.f.
iv. "Termination Upon a Change in Control" shall mean a
termination by Employee of Employee's employment with Company within 120 days
following a "Change in Control."
v. "Change in Control" shall mean (A) the time that Company
first determines that any person and all other persons who constitute a group
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934
("Exchange Act")) have acquired direct or indirect beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of forty percent (40%) or more
of the outstanding securities of the Company or of USOL, or (B) a sale of all or
substantially all of the assets of the Company or USOL.
b. Initial Term. The term of employment of Employee by Company shall be
for a period of three (3) years beginning with the Effective Date ("Initial
Term"), unless terminated earlier pursuant to this Section 2. If Employee's
employment by the Company continues after the expiration of the Initial Term of
this Agreement, the Agreement shall continue to govern the parties'
relationship, except that Employee's employment may thereafter be terminated by
either party at any time for any or no reason upon sixty (60) days prior notice
to the other party. If Company and Employee do not enter into a new employment
agreement within 30 months of the Effective Date, during the last six months of
the Initial Term Employee may take off reasonable amounts of time to conduct job
interviews for future employment; Employee must request such time off in writing
and may take the time off only after approval by the Company, which approval
will not be unreasonably withheld, conditioned or delayed.
c. Termination For Cause. Termination For Cause may be effected by
Company at any time during the term of this Agreement after the occurrence of an
event which constitutes a Termination For Cause and shall be effected by written
notification to Employee. Upon a Termination For Cause, Employee shall promptly
be paid all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Company in which Employee is a participant to the full extent
of Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by Employee in connection with his duties hereunder,
all to the date of termination, but Employee shall not be paid any other
compensation or reimbursement of any kind, including without limitation,
severance compensation. If at the time of a Termination For Cause Employee owes
any amounts to Company, such amounts shall be offset against the amounts payable
to Employee under the preceding sentence.
d. Termination Other Than For Cause. Notwithstanding anything else in
this Agreement, Company may effect a Termination Other Than For Cause at any
time upon giving written notice to Employee of such termination. Upon a
Termination Other Than For Cause, Employee shall, within 30 days of such
termination,
3
be paid all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Company in which Employee is a participant to the full extent
of Employee's rights under such plans (including accelerated vesting of any
awards granted to Employee under any of the Company's or USOL's stock option
plans and stock award plans), accrued vacation pay and any appropriate business
expenses incurred by Employee in connection with his duties hereunder, all to
the date of termination, and all severance compensation provided in Section 4.a,
but no other compensation or reimbursement of any kind. The bonus owed pursuant
to the preceding sentence includes only the fraction of any bonus earned through
the date of Termination Other Than For Cause for such bonus period; the
numerator of such fraction is the number of days of the bonus period during
which Employee was employed with Company, and the denominator of such fraction
is the total number of days in the bonus period. If the amount of any bonus
compensation due Employee cannot be determined within 30 days of the Termination
Other Than For Cause, such amount will be paid to Employee within 30 days of the
date the amount of the bonus due is determined. Employee shall have the right to
review the Company's books and records relating to the calculation of the bonus
owed under this Section 2(d); such right shall expire 6 months after Employee is
notified of the bonus amount. If at the time of a Termination Other Than For
Cause Employee owes any amounts to Company, such amounts shall be offset against
the amounts payable to Employee under the preceding sentence.
e. Termination by Reason of Disability. If, during the term of this
Agreement, Employee, in the reasonable judgment of the Board of Directors of
Company, has failed to perform his duties under this Agreement on account of
illness or physical or mental incapacity, and such illness or incapacity
continues for a period of more than four (4) consecutive months, Company shall
(to the extent permitted by applicable law) have the right to terminate
Employee's employment hereunder by written notification to Employee and payment
to Employee of all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Company in which Employee is a participant to
the full extent of Employee's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by Employee in connection with his
duties hereunder, all to the date of termination, with the exception of medical
and dental benefits which shall continue through the expiration of this
Agreement, but Employee shall not be paid any other compensation or
reimbursement of any kind, including without limitation, severance compensation.
If at the time of a Termination By Reason of Disability Employee owes any
amounts to Company, such amounts shall be offset against the amounts payable to
Employee under the preceding sentence.
f. Death. In the event of Employee's death during the term of this
Agreement, Employee's employment shall be deemed to have terminated as of the
last day of the month during which his death occurs and Company shall promptly
pay to his estate or such beneficiaries as Employee may from time to time
designate all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Company in which Employee is a participant to the full extent
of Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by Employee in connection with his duties hereunder,
all to the date of termination, but Employee's estate shall not be paid any
other compensation or reimbursement of any kind, including without limitation,
severance compensation. If at the time of Employee's Death Employee owes any
amounts to Company, such amounts shall be offset against the amounts payable to
Employee under the preceding sentence.
g. Voluntary Termination. In the event of a Voluntary Termination,
Company shall promptly pay all accrued salary, bonus compensation to the extent
earned, vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Company in which Employee is a participant to
the full extent of Employee's rights under such plans, accrued vacation pay and
any appropriate business expenses incurred by Employee in connection with his
duties hereunder, all to the date of termination, but no other compensation or
reimbursement of any kind, including without limitation, severance compensation.
If at the time of a Voluntary Termination Employee owes any amounts to Company,
such amounts shall be offset against the amounts payable to Employee under the
preceding sentence.
4
h. Termination Upon a Change in Control. In the event of a Termination
Upon a Change in Control, Employee shall immediately be paid all accrued salary,
bonus compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Company in which Employee is a participant to the full extent of Employee's
rights under such plans (including accelerated vesting of any awards granted to
Employee under any of the Company's or USOL's stock option plans and stock award
plans), accrued vacation pay and any appropriate business expenses incurred by
Employee in connection with his duties hereunder, all to the date of
termination, and all severance compensation provided in Section 4.a, but no
other compensation or reimbursement of any kind. If at the time of a Termination
Upon A Change In Control Employee owes any amounts to Company, such amounts
shall be offset against the amounts payable to Employee under the preceding
sentence.
i. Notice of Termination. Other than a Termination For Cause, Company
may effect a termination of Employee's employment pursuant to the provisions of
this Section 2 upon giving thirty (30) days written notice to Employee of such
termination. Company may effect a Termination For Cause immediately without any
prior notice other than the notice and cure period as provided in Section 2.a.i.
Employee may effect a termination of Employee's employment pursuant to the
provisions of this Section 2 upon giving thirty (30) days written notice to
Company of such termination.
3. Salary, Benefits and Bonus Compensation. As compensation for services
to be rendered by Employee under this Agreement, the Company shall compensate
Employee as follows:
a. Base Salary. As payment for the services to be rendered by Employee
as provided in Section 1 and subject to the terms and conditions of Section 2,
Company agrees to pay to Employee a "Base Salary" for the twelve (12) calendar
months beginning the Effective Date equal to the following:
i. $142,500.00 per annum (prorated for any partial year)
with health insurance under the Company's group health insurance plan and dental
plan for Employee and Employee's dependents paid for 100% by the Company.
The Company shall pay Employee's Base Salary in installments in
accordance with the Company's payroll policy for other employees. Employee's
Base Salary shall be reviewed annually by the Board of Directors to determine an
appropriate increase (if any).
b. Bonuses. Employee will be eligible for an annual bonus of up to
fifty percent (50%) of his then current base salary. The amount of Employee's
bonus will be determined by the Board of Directors, based upon the Company's
performance each year, and will be tied to both qualitative and quantitative
performance standards to be established by the Board of Directors at the
beginning of the calendar year. The Board of Directors will provide written
performance standards to Employee each year during the term of this Agreement,
not later than January 30 of the applicable year. Notwithstanding the Company's
performance, a minimum bonus of 5% of base salary will apply for each year
Employee is employed by Company if: (i) exemplary individual performance
warrants it and (ii) the application would be consistent with the benchmarks and
eligibility of the Company's CEO and President with respect to a bonus for this
purpose.
The Company shall pay Employee a one time initial signing bonus of
$12,000 within five business days of the execution of this Agreement . Employee
shall immediately repay a portion of such $12,000 amount (the "Repayment
Amount") to the Company if his employment with the Company is terminated by
reason of a Termination For Cause or a Voluntary Termination during the first
year of this Agreement. The Repayment Amount shall be equal to product of
$12,000 and a fraction, the numerator of which shall be the number of days
remaining in the first year of this Agreement following the termination event,
and the denominator of which shall be 365.
5
c. Additional Benefits. During the term of this Agreement, Employee
shall be entitled to the following fringe benefits:
i. Employee Benefits. Employee shall be eligible to
participate in such of Company's benefits and deferred compensation plans as are
now available or later made available to executive officers of the Company,
including, without limitation, Company's stock option plans, profit sharing
plans, annual physical examinations, dental and medical plans, personal
catastrophe and disability insurance, financial planning, retirement plans and
supplementary executive retirement plans, if any.
ii. Vacation. Employee shall be entitled to three (3) weeks
of vacation during each year during the term of this Agreement and any
extensions thereof, prorated for partial years, in accordance with the Company's
vacation policy.
iii. Reimbursement for Expenses. During the term of this
Agreement, Company shall reimburse Employee for reasonable out-of-pocket
business and/or entertainment expenses incurred by Employee in connection with
his duties under this Agreement and documented in accordance with Company
policy. The Company shall reimburse (or pay directly) Employee's reasonable
actual out-of-pocket expenses directly incurred in (i) moving Employee and
Employee's immediate family to Austin, Texas, not to exceed $ 25,000.00
(Employee will submit an estimate for approval prior to the move), (ii) up to
three house hunting trips, and (iii) approved commuting expenses until
Employee's family has moved to Austin, Texas. Employee and Employee's family
shall complete their move to Austin no later than July 30, 2000).Company shall
also reimburse Employee the lesser of the actual Direct Closing Costs incurred
in connection with the sale of Employee's home in Seattle or $ 45,200.00 .
Direct Closing Costs for purposes of this Agreement shall be limited to brokers'
selling commissions and the premium cost of the Seller's Title Policy. Company
shall not reimburse any closing costs incurred by Employee in connection with
the purchase of a home. Company shall not be obligated to reimburse any
attorney's fees incurred by Employee in connection with the completion and
execution of this agreement. The Company will also loan Employee up to $150,000,
at a per annum interest rate of 6.5% (the "Funds"), secured by, at the Company's
sole option and discretion, (i) Employee's equity in the Company, stock options
in the Company, earned bonus with the Company, any deferred compensation with
the Company and any severance with the Company, and (ii) a security interest
and/or deed of trust lien and/or mortgage lien in either Employee's Seattle,
Washington home or in the home this Agreement contemplates that Employee will
purchase in or in the vicinity of Austin, Texas, as determined by Company in its
sole discretion at the time the Funds are advanced, and conditioned upon
Company's determination, not to be unreasonably withheld, that all loan and
security documents are satisfactory to Company. The Funds shall only be advanced
for the purpose of assisting in Employee's purchase of a home in or in the
vicinity of Austin, Texas; in accordance with this stated purpose, the Funds
shall only be released to the title company closing such home purchase and only
at the actual time such home purchase is made. All interest and principal for
this loan will be due and payable on the earlier of Employee's completion of the
sale of his current home in Seattle, Washington or October 31, 2000. The Company
will pay Employee a bonus sufficient to cover the interest portion of such loan
and any Employee taxes associated with such bonus. If the Company requires the
Employee to relocate outside of the Austin, Texas metropolitan area during the
term of this Agreement, the Company will pay Employee's reasonable relocation
expenses.
4. Severance Compensation.
--------- ------------
▇. ▇▇▇▇▇▇▇▇▇ Compensation in the Event of a Termination Upon a Change
in Control or in the Event of a Termination Other Than for Cause. In the event
Employee's employment is terminated in a Termination Upon a Change in Control or
in a Termination Other Than For Cause, Employee shall be paid as severance
compensation his Base Salary (at the rate payable at the time of such
termination), for a period of six (6) months from the date of such termination.
Employee is under no obligation to mitigate the amount owed Employee pursuant to
this Section 4.a by seeking other employment or otherwise. Notwithstanding
anything in this Section 4.a to the contrary, Employee may in Employee's sole
discretion, by delivery of a notice to Company within thirty (30) days following
a Termination Upon a Change in Control or a Termination Other Than For Cause,
elect to receive
6
severance compensation as a lump sum severance payment by bank cashier's check
equal to the present value of the flow of cash payments that would otherwise be
paid to Employee pursuant to this Section 4.a discounted at a rate of 8% per
annum. In the event Employee's employment is terminated in a Termination Upon a
Change in Control or in a Termination Other Than For Cause, Employee shall also
be entitled to an accelerated vesting of any awards granted to Employee under
the Company's or USOL's stock option plans and any other equity rights or
participation plans under which Employee is a participant; such accelerated
vesting shall occur regardless of the terms and conditions contained in any such
plans. Employee shall continue to accrue retirement benefits (if any) and shall
continue to enjoy any benefits under any plans of the Company in which Employee
is a participant to the full extent of Employee's rights under such plans (as if
Employee was still an employee of Company), including any perquisites provided
under this Agreement, through the lesser of the remaining term of this Agreement
or six (6) months from the date of termination under this subsection; provided,
however, that the benefits under any such plans of the Company in which Employee
is a participant, including any such perquisites, shall cease upon re-employment
by a new employer to the extent such benefits are provided by any such new
employer.
b. No Severance Compensation Upon Other Termination. In the
event of a Voluntary Termination or Termination For Cause, Employee or his
estate shall not be paid any severance compensation.
5. Indemnification. The Company shall defend, indemnify and hold Employee
harmless from any and all liabilities, obligations, claims or expenses which
arise in connection with or as a result of Employee's service as an officer,
manager, director or employee of the Company to the fullest extent allowed by
the Company's organizational documents; provided, that the Company shall not be
obligated to defend, indemnify or hold Employee harmless from any liabilities,
obligations, claims or expenses which directly result from or are related to
Employee having committed an act of dishonesty, obtained any benefit of money or
other property to which he was not entitled, or engaged in any willful
misconduct or engaged in behavior that is grossly negligent.
6. Noncompetition and Confidentiality.
----------------------------------
a. Fiduciary Obligations. During his employment hereunder, Employee
shall comply with his fiduciary obligations as an officer and, if elected, as a
member of the Board of Directors of the Company.
b. Noncompete and Nonsolicitation. During his employment hereunder and
for a period of twelve (12) months following the termination or other cessation
of his employment hereunder, Employee shall not, directly or indirectly, as a
director, officer, employee, owner, partner, agent, consultant, lessor, creditor
or otherwise, for any person, firm or entity, in any of the counties of the
states of the United States, engage in any of the following activities:
i. solicit or attempt to persuade any person or entity
that was a customer of the Company or any affiliate of the Company during
Employee's employment hereunder to terminate or rescind its business or
contractual relationship with the Company or any affiliate of the Company;
ii. solicit for employment any employee of the Company
or any affiliate of the Company or attempt to persuade or entice any such
employee to terminate his or her employment with the Company or any affiliate of
the Company; or
iii. engage or participate in the business of selling,
installing or servicing telecommunications or cable or broadcast television
products, services or software, or in any other business engaged in by the
Company or any affiliate of the Company at any time during Employee's employment
hereunder.
The restrictions contained in this Section 6.b shall not apply only in the event
the Company materially breaches this Agreement and fails to cure such breach
within thirty (30) days following receipt of written notice of such breach. For
purposes of this Section 6, the term "affiliate" means any person or entity (i)
which directly or indirectly controls, is controlled by, or is under common
control with the Company, or (ii) 10% of which entity's equity rights are held
beneficially or of record by the Company.
7
c. Confidentiality. Employee shall not, during his employment hereunder
or at any time thereafter, use for his own purposes or disclose to any other
person or entity any "Confidential Information" (defined below) concerning the
Company, its affiliates or any of their business operations, except as may be
consistent with his duties hereunder or as may be required by order of a court
of competent jurisdiction. "Confidential Information" means any information,
formula, pattern, compilation, program, device, method, technique, customer
list, or process concerning the Company or its business or customers: (i) that
derives independent 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; or (ii)
the disclosure of which would be harmful to the interests of the Company.
d. Proprietary Rights. Employee hereby assigns and transfers to Company
all of his proprietary interest in any device, design, machine, practice,
process, method, product, literary composition, algorithm, or development,
innovation or improvement to existing Confidential Information (collectively,
the "Works") that is developed, conceived or created, in whole or in part,
during the term of this Agreement regardless of whether the Work is developed,
created or conceived while at Company facilities or another location or during
or after normal business hours; provided, however, that for the purposes of this
Agreement, Works shall only be deemed to include any of the foregoing that (i)
in any way relate to the present or anticipated business, activities or research
and development work of the Company, (ii) result from or are related to any work
performed for the Company, or (iii) were developed, created or conceived
utilizing the Company's time, equipment, supplies, facilities, materials,
software, resources or other Confidential Information. Any Work that involves
the creation of any copyrightable work shall be considered a "work made for
hire," to the maximum extent permitted by law. If any copyrightable work is not
considered a "work made for hire," Employee, without further consideration,
hereby assigns and transfers all copyrights in the Work to Company. Employee
recognizes that all Works shall be the exclusive property of the Company.
Employee agrees to assist the Company in obtaining any patents, copyrights or
other form of proprietary rights protection on any Work, to sign all documents
and take other actions as the Company may reasonably request to obtain such
protection for Company, and to assist Company in protecting the Works against
infringement by other parties. Employee appoints the executive officers of the
Company to act as his agent and attorney-in-fact to perform any act necessary to
obtain any patents, copyrights or other form of proprietary protection covering
the Works. Employee represents that there are no Works owned wholly or in part
by him that are to be excluded from the scope of this Agreement. Employee also
agrees to disclose to the Company, in confidence, (A) all Works that Employee
develops, conceives or creates while employed by the Company and (B) all patent
or copyright applications filed by Employee within one (1) year after
termination of employment with the Company.
e. Damages. Employee agrees that the provisions of this Section 6 may
be enforced by temporary or permanent injunction; the Company shall not be
required to post any bond or security in any such temporary or permanent
injunction proceeding. The right to such injunctive relief shall be in addition
to and not in place of any further remedies to which the Company may be
entitled.
f. Enforcement. Employee agrees that the provisions of this Section 6
are reasonable. However, if any court of competent jurisdiction determines that
any provision within this Section 6 is unreasonable in any respect, the parties
intend that this Section 6 should be enforced to the fullest extent allowed by
such court.
g. Severable Units. Each county of each state covered by the covenant
not to compete set forth in Section 6.b, each of such states and each month
covered by this covenant not to compete shall be deemed a severable unit and
should any court determine that the inclusion of all such counties, states or
months would render such undertaking unreasonable or unenforceable for any
reason, those units which are necessary, in the judgment of the court, to be
deleted in order to render such an undertaking reasonable and enforceable shall
be deemed free of such noncompete and nonsolicitation undertaking but such
undertaking shall remain in full force and effect as to every other unit of
territory and time.
h. Survival. This Section 6 will survive the termination of this
Agreement except as otherwise indicated in Section 6.b.
8
i. Exception at End of Initial Term of Agreement. If the Agreement
expires naturally at the end of the Initial Term, the noncompete and
nonsolicitation period in Section 6.b. above shall only last for six (6) months.
7. Arbitration. Any dispute arising out of or relating to this Agreement shall
be resolved by arbitration before a single, neutral arbitrator in Austin, Texas,
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association; provided, however, that nothing herein shall prevent a
party from seeking injunctive relief to enforce compliance with this Section 7
or Section 6, or to enforce any ruling of the arbitrator. The results of the
arbitration shall be binding on the parties. All reasonable costs of the
arbitration (or any litigation to the extent litigation is otherwise permitted
under this Agreement), including attorney's fees, shall be paid by the
non-prevailing party.
8. Notices. All notices, requests, consents and other communications required or
provided for in this Agreement shall be in writing and shall be deemed to be
given when: (a) delivered in person; (b) three days following deposit in the
U.S. mail for first class registered or certified mail with postage prepaid; (c)
delivered by overnight receipted courier service; or (d) sent by confirmed
facsimile transmission. Notices shall be addressed to the party at the address
set forth below, or such other addresses as may hereafter be designated in
writing by the party.
If to the Company, to:
USOL Holdings, Inc.
Attn: President
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to Employee:
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9. Miscellaneous.
-------------
a. Waiver of Breach. The waiver by a party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach
9
b. Assignment. Neither party may assign its rights or delegate its duties
hereunder without the prior written consent of the other party.
c. Entire Agreement. This Agreement and the transaction and documents
referred to herein including (i) that one certain USOL Holdings, Inc. Incentive
Stock Option Agreement between the Company and Employee, and (ii) to be executed
together with the documents specified in section 3. c. iii.. Without limiting
the generality of the foregoing, Employee agrees that this Agreement supersedes
and replaces that one certain letter dated July 26, 1999 between USOL, Inc. ,
and acknowledges and agrees such letter is null and void and of no further force
and effect.
d. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the respective parties, and their legal representatives, successors,
heirs, and permitted assigns.
e. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Texas, without giving
effect to principles and provisions thereof relating to conflict or choice of
laws and irrespective of the fact that any one of the parties is now or may
become a resident of a different state.
f. Validity. If any term of this Agreement shall be invalid, illegal,
or unenforceable, in whole or in part, the validity of any of the other terms of
this Agreement shall not in an way be affected thereby.
g. Survival of Terms. The applicable provisions of Sections 2, 4, 5, 6, 7,
8, and 9 shall survive any termination of this Agreement.
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement to be
effective as of the date first above written.
COMPANY:
USOL HOLDINGS, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Date Signed: _______________________
EMPLOYEE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Date Signed: _______________________
10