Exhibit 10.11
EMPLOYMENT AGREEMENT
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This AGREEMENT (the "Agreement") is made as of October 2, 1998, effective
September 30, 1998 (the "Effective Date"), by and between Voyager Information
Networks, Inc., a Michigan corporation (the "Employer"), and David Shires (the
"Employee").
WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement
dated as of September 26, 1998 (the "Purchase Agreement") by and between the
Employer and NetLink Systems, L.L.C. ("NetLink), the Employer is purchasing all
of the assets used or useful in connection with NetLink's Internet connectivity
service business;
WHEREAS, the Employee is an executive officer and member of NetLink and is
knowledgeable in the Internet connectivity service industry; and
WHEREAS, the parties hereto desire to assure that the Employee's knowledge
and experience will continue to be available to the Employer after consummation
of the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. Employment. The Employer agrees to employ the Employee and the
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Employee agrees to be employed by the Employer on the terms and conditions set
forth in this Agreement.
2. Capacity. The Employee shall initially serve the Employer as the
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Director of Business Development, subject to the approval of the Chief Executive
Officer. The Employee shall also serve the Employer in such other or additional
offices as the Employee may be requested to serve from time to time by the Chief
Executive Officer of the Employer; provided, however that the Employee's
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services and duties with respect to such other or additional offices shall not
result in a material diminution of Employee's role and responsibilities
contemplated hereby. In such capacity or capacities, the Employee shall perform
such services and duties in connection with the business, affairs and operations
of the Employer as may be assigned or delegated to the Employee from time to
time by the Chief Executive Officer.
3. Term. Subject to the provisions of Section 5, the term of employment
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pursuant to this Agreement (the "Term") shall be two (2) years from the
Effective Date and shall be renewed automatically for periods of one (1) year
commencing at the second anniversary of the Effective Date and on each
subsequent anniversary thereafter, unless either the Employee or the Employer
gives written notice to the other not less than sixty (60) days prior to the
date of any such anniversary of such party's election not to extend the Term.
4. Compensation and Benefits. The regular compensation and benefits
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payable to the Employee under this Agreement shall be as follows:
(a) Salary. For all services rendered by the Employee under this
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Agreement, the Employer shall pay the Employee a salary (the "Salary") at the
annual rate of Ninety Thousand Dollars ($90,000), subject to increase from time
to time in the discretion of the Board of Directors of the Employer (the "Board
of Directors"). The Salary shall be payable in periodic installments in
accordance with the Employer's usual practice for its senior Employees, but not
less frequently than monthly.
(b) Bonus. The Employer shall pay to the Employee an annual bonus
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(the "Bonus") which is equal to twenty percent (20%) of the Salary then in
effect, payable in two (2) semi-annual installments on December 31 and June 30
of each calendar year. For any partial year of employment under this Agreement,
including, without limitation, the three-month period ended December 31, 1998,
the Employee shall be paid the pro-rata portion of the Bonus. The Employee
shall not be eligible for other bonus payments under the Employer's bonus pool.
(c) Regular Benefits. The Employee shall also be entitled to
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participate in any employee benefit plans, stock option plans, medical insurance
plans, life insurance plans, disability income plans, retirement plans, vacation
plans, expense reimbursement plans and other benefit plans which the Employer
may from time to time have in effect for all or most of its senior Employees.
Such participation shall be subject to the terms of the applicable plan
documents, generally applicable policies of the Employer, applicable law and the
discretion of the Board of Directors or any administrative or other committee
provided for in or contemplated by any such plan. Nothing contained in this
Agreement shall be construed to create any obligation on the part of the
Employer to establish any such plan or to maintain the effectiveness of any such
plan which may be in effect from time to time.
(d) Taxation of Payments and Benefits. The Employer shall undertake
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to make deductions, withholdings and tax reports with respect to payments and
benefits under this Agreement to the extent that it reasonably and in good faith
believes that it is required to make such deductions, withholdings and tax
reports. Payments under this Agreement shall be in amounts net of any such
deductions or withholdings. Nothing in this Agreement shall be construed to
require the Employer to make any payments to compensate the Employee for any
adverse tax effect associated with any payments or benefits or for any deduction
or withholding from any payment or benefit.
(e) Exclusivity of Salary and Benefits. The Employee shall not be
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entitled to any payments or benefits other than those provided under this
Agreement.
5. Termination and Termination Benefits. Notwithstanding the provisions
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of Section 3, the Employee's employment under this Agreement shall terminate
under the following circumstances set forth in this Section 5.
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(a) Termination by the Employer for Cause. The Employee's employment
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under this Agreement may be terminated for cause without further liability on
the part of the Employer effective immediately upon written notice to the
Employee by the Employer. Only the following shall constitute "cause" for such
termination:
(i) the probable cause determination by a court of law regarding
the commission by the Employee of a felony or the conviction of the Employee for
any misdemeanor involving moral turpitude, deceit, dishonesty or fraud;
(ii) failure to perform (other than by reason of disability or
illness) to the reasonable satisfaction of the Chief Executive Officer a
substantial portion of the Employee's duties and responsibilities assigned or
delegated under this Agreement, which failure continues, in the reasonable
judgment of the Chief Executive Officer, for thirty (30) days after written
notice given to the Employee by the Chief Executive Officer;
(iii) gross negligence, willful misconduct or insubordination of
the Employee with respect to the Employer or any affiliate of the Employer and
the Employees duties with respect thereto, which continues, in the reasonable
judgment of the Chief Executive Officer, for thirty (30) days after written
notice given to the Employee by the Chief Executive Officer; or
(iv) material breach by the Employee of any of the Employee's
obligations under this Agreement, which breach continues, in the reasonable
judgment of the Chief Executive Officer, for thirty (30) days after written
notice given to the Employee by the Chief Executive Officer.
(b) Termination by the Employee. The Employee's employment under this
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Agreement may be terminated by the Employee by written notice to the Chief
Executive Officer at least sixty (60) days prior to such termination.
(c) Termination by the Employer Without Cause. Subject to the payment
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of Termination Benefits pursuant to Section 5(d), the Employee's employment
under this Agreement may be terminated by the Employer without cause upon
written notice to the Employee from the Employer.
(d) Certain Termination Benefits. Unless otherwise specifically
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provided in this Agreement or otherwise required by law, all compensation and
benefits payable to the Employee under this Agreement shall terminate on the
date of termination of the Employee's employment under this Agreement.
Notwithstanding the foregoing, in the event of termination of the Employee's
employment with the Employer pursuant to Section 5(c) above, the Employer shall
provide to the Employee the following termination benefits ("Termination
Benefits"):
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(i) continuation of the Employee's Salary at the rate then in
effect pursuant to Section 4(a); and
(ii) continuation of group health plan benefits to the extent
authorized by and consistent with 29 U.S.C. (S) 1161 et seq. (commonly known as
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"COBRA"), with the cost of the regular premium for such benefits shared in the
same relative proportion by the Employer and the Employee as in effect on the
date of termination.
The Termination Benefits set forth in (i) and (ii) above shall continue
effective until the earlier to occur of (x) the expiration of the Term and (y)
the first anniversary of the date on which the Employer begins providing
Termination Benefits to the Employee; provided, however, that in the event the
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Employee breaches the terms of the Non-competition Agreement between the
Employee and the Employer (the "Non-competition Agreement"), then all of such
Termination Benefits shall immediately cease. Notwithstanding the foregoing,
nothing in this Section 5(d) shall be construed to affect the Employee's right
to receive COBRA continuation entirely at the Employee's own cost to the extent
that the Employee may continue to be entitled to COBRA continuation after the
Employee's right to cost sharing under Section 5(d)(ii) ceases. The Employee
shall be obligated to give prompt notice of the date of commencement of any
employment or self-employment during the Termination Benefits Period and shall
respond promptly to any reasonable inquiries concerning any employment or self-
employment in which the Employee engages during the Termination Benefits Period.
(e) Death; Disability. Upon the death of the Employee or the
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permanent disability (as defined below) of the Employee continuing for a period
in excess of one hundred eighty (180) consecutive days, all obligations of the
Employer under this Agreement shall immediately terminate other than any
obligation of the Employer with respect to earned but unpaid Salary and benefits
contemplated hereby to the extent accrued or vested through the date of
termination. As used herein, the terms "permanent disability" or "permanently
disabled" shall mean the inability of the Employee, by reason of injury, illness
or other similar cause, to perform a major part of his duties and
responsibilities in connection with the conduct of the business and affairs of
the Employer, as determined reasonably and in good faith by the Employer. The
Employer shall use reasonable commercial efforts to obtain and maintain in
effect disability insurance with respect to the Employee providing for
disability payments equivalent to Salary payments that would have been made from
termination due to disability through the date on which Salary obligations
otherwise would have terminated provided such insurance is obtainable on
commercially reasonable terms. Nothing in this Section 5(e) shall be construed
to waive the Employee's rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. (S) 2601 et seq.
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and the Americans with Disabilities Act, 42 U.S.C. (S) 12101 et seq.
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6. Confidential Information and Cooperation.
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(a) Confidential Information. As used in this Agreement,
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"Confidential Information" means information belonging to the Employer which is
of value to the Employer
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in the course of conducting its business and the disclosure of which could
result in a competitive or other disadvantage to the Employer. Confidential
Information includes, without limitation, financial information, reports, and
forecasts; inventions, improvements and other intellectual property; trade
secrets; know-how; designs, processes or formulae; software; market or sales
information or plans; customer lists; and business plans, prospects and
opportunities (such as possible acquisitions or dispositions of businesses or
facilities) which have been discussed or considered by the management of the
Employer. Confidential Information includes information developed by the
Employee in the course of the Employee's employment by the Employer, as well as
other information to which the Employee may have access in connection with the
Employee's employment. Confidential Information also includes the confidential
information of others with which the Employer has a business relationship.
Notwithstanding the foregoing, Confidential Information does not include
information which (i) is or becomes generally available to the public other than
as a result of disclosure by the Employee, or (ii) is acquired or developed by
or on behalf of the Employee without the use, directly or indirectly, of any
information that would otherwise constitute Confidential Information.
(b) Confidentiality. The Employee understands and agrees that the
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Employee's employment creates a relationship of confidence and trust between the
Employee and the Employer with respect to all Confidential Information. At all
times, both during the Employee's employment with the Employer and after his
termination, the Employee will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the written consent of the Employer, except as may be
necessary in the ordinary course of performing the Employee's duties to the
Employer.
(c) Documents, Records, etc. All documents, records, data, apparatus,
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equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Employee by the Employer or are produced
by the Employee in connection with the Employee's employment will be and remain
the sole property of the Employer. The Employee will return to the Employer all
such materials and property as and when requested by the Employer. In any
event, the Employee will return all such materials and property immediately upon
termination of the Employee's employment for any reason. The Employee will not
retain with the Employee any such material or property or any copies thereof
after such termination.
(d) Third-Party Agreements and Rights. The Employee hereby confirms
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that the Employee is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way the Employee's use or
disclosure of information or the Employee's engagement in any business,
including, without limitation, any agreement with NetLink, which agreement shall
be terminated prior to the effectiveness hereof. The Employee represents to the
Employer that the Employee's execution of this Agreement, the Employee's
employment with the Employer and the performance of the Employee's proposed
duties for the Employer will not violate any obligations the Employee may have
to any such previous employer or other party, including, without limitation,
NetLink. In the Employee's work for
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the Employer, the Employee will not disclose or make use of any information in
violation of any agreements with or rights of any such previous employer or
other party, and the Employee will not bring to the premises of the Employer any
copies or other tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.
(e) Litigation and Regulatory Cooperation. During and after the
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Employee's employment, the Employee shall cooperate fully with the Employer in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Employer which relate
to events or occurrences that transpired while the Employee was employed by the
Employer. The Employee's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Employer at mutually convenient times. During and after the Employee's
employment, the Employee also shall cooperate fully with the Employer in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Employee was employed by the Employer.
The Employer shall reimburse the Employee for any reasonable out-of-pocket
expenses incurred in connection with the Employee's performance of obligations
pursuant to this Section 6(e).
(f) Injunction. The Employee agrees that it would be difficult to
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measure any damages caused to the Employer which might result from any breach by
the Employee of the promises set forth in this Section 6, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
subject to Section 7 of this Agreement, the Employee agrees that if the Employee
breaches, or proposes to breach, any portion of this Agreement, the Employer
shall be entitled, in addition to all other remedies that it may have, to an
injunction or other appropriate equitable relief to restrain any such breach
without showing or proving any actual damage to the Employer.
(g) Non-competition Agreement. The Employee acknowledges that the
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Non-competition Agreement is an integral part of his employment arrangements
with the Employer.
7. Dispute Resolution. Except as provided below, any dispute arising out
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of or relating to this Escrow Agreement or the breach, termination or validity
hereof shall be finally settled by arbitration conducted expeditiously in
accordance with the CPR Institute For Dispute Resolution Rules for
Nonadministered Arbitration of Business Disputes (the "CPR Rules"). The CPR
Institute For Dispute Resolution shall appoint a neutral advisor from its
National CPR Panel. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. (S)(S)1-16, and judgment upon the award rendered by
the arbitrators may be entered by any court having jurisdiction thereof. The
place of arbitration shall be Detroit, Michigan.
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Such proceedings shall be administered by the neutral advisor in accordance
with the CPR Rules as he/she deems appropriate, however, such proceedings shall
be guided by the following agreed upon procedures:
(a) mandatory exchange of all relevant documents, to be accomplished
within forty-five (45) days of the initiation of the procedure;
(b) no other discovery;
(c) hearings before the neutral advisor which shall consist of a
summary presentation by each side of not more than three (3) hours; such
hearings to take place on one or two days at a maximum; and
(d) decision to be rendered not more than ten (10) days following
such hearings.
Notwithstanding anything to the contrary contained herein, the provisions
of this Section 7 shall not apply with regard to any equitable remedies to which
any party may be entitled hereunder.
Each of the parties hereto (a) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction in
the State of Michigan for the purpose of enforcing the award or decision in any
such proceeding, (b) hereby waives, and agrees not to assert, by way of motion,
as a defense, or otherwise, in any such suit, action or proceeding, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Employment Agreement
or the subject matter hereof may not be enforced in or by such court, and hereby
waives and agrees not to seek any review by any court of any other jurisdiction
which may be called upon to grant an enforcement of the judgment of any such
court. Each of the parties hereto hereby consents to service of process by
registered mail at the address to which notices are to be given. Each of the
parties hereto agrees that its or his submission to jurisdiction and its or his
consent to service of process by mail is made for the express benefit of the
other parties hereto. Final judgment against any party hereto in any such
action, suit or proceeding may be enforced in other jurisdictions by suit,
action or proceeding on the judgment, or in any other manner provided by or
pursuant to the laws of such other jurisdiction; provided, however, that any
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party hereto may at its or his option bring suit, or institute other judicial
proceedings, in any state or federal court of the United States or of any
country or place where the other parties or their assets, may be found.
8. Integration. This Agreement and, to the extent related hereto, the
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Employee's Non-competition Agreement, constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to any related subject matter.
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9. Assignment; Successors and Assigns, etc. Neither the Employer nor the
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Employee may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided that the Employer may assign its rights under this Agreement
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without the consent of the Employee (a) in the event that the Employer shall
effect a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets or stock to any other corporation, partnership,
organization or other entity or (b) in connection with the granting of a
security interest in this Agreement to its senior lenders. This Agreement shall
inure to the benefit of and be binding upon the Employer and the Employee, their
respective successors, executors, administrators, heirs and permitted assigns.
10. Enforceability. If any portion or provision of this Agreement
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(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
11. Waiver. No waiver of any provision hereof shall be effective unless
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made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
12. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Employee at the last address the Employee has filed in writing with the Employer
or, in the case of the Employer, at its main offices, attention of the Chief
Executive Officer, and shall be effective on the date of delivery in person or
by courier or three (3) days after the date mailed.
13. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by the Employee and by a duly authorized
representative of the Employer.
14. Governing Law. This is a Michigan contract and shall be construed
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under and be governed in all respects by the laws of the State of Michigan,
without giving effect to the conflict of laws principles there.
15. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
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IN WITNESS WHEREOF, this Employment Agreement has been executed by the
Employer, by its duly authorized officer, and by the Employee, as of the
Effective Date.
EMPLOYER:
VOYAGER INFORMATION NETWORKS, INC.
By: /s/ Christopher Torto
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Name: Christopher Torto
Title: Chief Executive Officer
EMPLOYEE:
/s/ David Shires
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David Shires
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