Exhibit 10.11
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into as
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of the 1st day of June, 1998, by and between SKYCACHE, INC., a Delaware
corporation (the "Company") and ROBERT M. DUNHAM (the "Employee").
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RECITALS
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A. The Company desires to retain Employee to provide the services set
forth in this Agreement.
B. Employee is willing to provide such services to the Company on the
terms and conditions set forth in this Agreement.
AGREEMENT
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In consideration of the promises and the terms and conditions set forth in
this Agreement, the parties agree as follows:
1. Employment and Term.
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(a) Initial Term. The Company agrees to employ the Employee and the
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Employee agrees to work for the Company, subject to the terms and conditions
below, for an initial term of two (2) years, beginning June 1, 1998, and ending
May 31, 2000.
(b) Renewal. The term of the Employee's employment may be renewed for
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additional one year terms at the sole discretion of the Company, upon ninety
(90) days notice to the Employee.
2. Compensation; Benefits. Subject to the terms and conditions of this
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Agreement, the Company shall pay to the Employee a base salary as set forth on
Schedule A, attached hereto and made a part hereof, payable in accordance with
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the Company's regular payroll policies. In addition to this base salary, the
Employee shall be entitled to the benefits and bonuses described on Schedule A,
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subject to the terms and conditions described therein. In addition, the
Employee shall be entitled to receive such other benefits including, but not
limited to, vacation, holidays and sick leave, as the Company generally provides
to its employees holding similar positions as that of the Employee.
Notwithstanding the foregoing, the Company reserves the right to adopt, amend or
discontinue any employee benefit plan or policy in accordance with then-
applicable law.
3. Title; Duties. The Employee shall be initially employed as Treasurer
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and Chief Financial Officer. The Employee shall diligently and conscientiously
devote his full time and attention and his best efforts to discharge the duties
assigned to him by the Company. The Employee shall perform such duties as may
be assigned to him from time to time by the Company. The Company shall have the
right to reassign the Employee to any other management position for which the
Employee is otherwise qualified, provided that the new management
position meets the following criteria: (i) it entails duties that would
typically be assigned to a senior executive of the Company; (ii) it does not
result in a reduction in pay or benefits; and (iii) the Employee is not required
to relocate outside of the Maryland suburbs of the Washington, D.C. area. In the
event that the Company reassigns the employee to a position which does not meet
these requirements, the Employee may elect to treat such reassignment as a
termination without cause, as defined in Section 5 and the Employee shall be
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eligible for all rights defined in Section 5(c) below.
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4. Transfer by Company. The Company will not transfer the Employee to
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another location without the employee's consent. If at any time during the term
of this Agreement, the Company transfers the Employee to another location, the
Company will reimburse the Employee for all reasonable moving expenses incurred
as a result of such transfer. In the event that the Employee terminates this
Agreement without cause pursuant to Section 7 hereof within one year after any
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such transfer, the Employee shall refund to the Company all amounts paid to him
by the Company as moving expenses (including temporary housing and incidental
expenses) pursuant to this Section 4. The Employee agrees that any amounts
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owing to the Company under this Section 4 may be deducted from any salary,
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bonuses or other amounts owed to him by the Company, consistent with applicable
law.
5. Termination by the Company.
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(a) General. The Company shall have the right to terminate this
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Agreement with or without cause at any time during the term of this Agreement by
giving written notice to the Employee. The termination shall become effective on
the date specified in the notice, which termination date shall not be a date
prior to the date fourteen (14) days following the date of the notice of
termination itself.
(b) Cause. In the event that the Employee is terminated for cause
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(as defined in Section 5(d) below), the Company shall pay the Employee the
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salary and pro rata bonus, if any, due him under this Agreement through the day
on which such termination is effective.
(c) Without Cause. In addition, in the event that the Employee is
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terminated without cause, (i) the Company shall also pay to the Employee
compensation equal to six (6) months of the Employee's base salary as of the
date of termination, and (ii) fifty percent (50%) of any unvested options held
by the Employee pursuant to that certain 1998 Founders Equity Incentive Plan
shall vest immediately. Notwithstanding the foregoing, in the event the Employee
is terminated without cause, ninety (90) days prior to, or within one hundred
eighty (180) days following, a Change of Control Event (as defined below) one
hundred percent (100%) of any unvested options held by the Employee pursuant to
that certain 1998 Founders Equity Incentive Plan shall vest immediately. "Change
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of Control Event" shall mean a merger or consolidation of the Company
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Company with or into another unaffiliated entity, or the acquisition by another
unaffiliated entity or person of all or substantially all of the Company's
assets or more than fifty percent (50%) of the Company's then outstanding voting
stock.
(d) Cause Defined. For purposes of this Section 5, "cause" shall
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mean (i) a material breach by the Employee of any covenant or condition under
this Agreement (including the Covenant set forth in the second sentence of
Section 3 above); (ii) the commission by
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the Employee of any willful act constituting dishonesty, fraud, immoral or
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disreputable conduct which is harmful to the Company or its reputation; (iii)
any felony conviction of the Employee; (iv) any willful act of gross misconduct
which is materially and demonstrably injurious to the Company; (v) material
violation by the Employee of the Company's policies as set forth in the
Company's personnel handbook, if one has been adopted, or announced by Company
management from time to time; or (vi) violation of the Company's drug and
alcohol policy as set forth in the Company's personnel handbook, if one has been
adopted, or announced by Company management from time to time.
6. Termination by Death or Disability of the Employee.
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(a) General. In the event of the Employee's death during the term
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of this Agreement, all obligations of the parties hereunder shall terminate
immediately, and the Company shall pay to the Employee's legal representatives
the salary due the Employee through the day on which his death shall have
occurred.
(b) Disability. If the Employee is unable to perform his duties
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hereunder due to mental, physical or other disability for a period of ninety
(90) consecutive business days, as determined in good faith by the Board of
Directors of the Company, or for ninety (90) business days in any period of
twelve (12) consecutive months, this Agreement may be terminated by the Company,
at its option, by written notice to the Employee, effective on the termination
date specified in such notice, provided such termination date shall not be a
date prior to the date of the notice of termination itself. In this case, the
Company will pay the Employee the salary due him through the day on which such
termination is effective.
(c) Disability Insurance. Any amounts paid the Employee pursuant to
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disability insurance policies provided by the Company shall be offset against
the amount of salary due from the Company to the Employee hereunder during the
period of the Employee's disability.
7. Termination by the Employee.
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(a) General. The Employee may terminate this Agreement at any time,
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with or without cause, by giving written notice to the Company. Any such
termination shall become effective on the date specified in such notice,
provided that the Company may elect to have such termination become effective on
a date after, but not more than, fourteen (14) days after the date of the
notice.
(b) Salary/Bonus. After the date of any such termination, the
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Employee shall be entitled to the salary and pro rata bonus, if any, due him
through the day on which such termination becomes effective.
(c) Cause. In addition, if the termination is with cause (as defined
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in Section 7(d) below), the Company shall pay to the Employee compensation
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equal to six (6) months of the Employee's base salary as of the date of
termination.
(d) Cause Defined. For purposes of this Section 7, "cause" shall
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mean a material failure by the Company to perform its obligations under this
Agreement.
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8. Suspension. In the event the Company has reasonable cause to believe
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that there exists cause for termination of this Agreement as defined in Section
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5, immediately upon written notice to the Employee, the Company may, but shall
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not be obligated to, suspend the Employee, with pay, for a period not to exceed
two weeks, either as a disciplinary measure or in order to investigate the
Company's belief that such cause exists. No such suspension shall prevent the
Company from thereafter exercising its rights to terminate this Agreement in
accordance with its terms.
9. Noncompetition.
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(a) The Employee agrees that, during his employment hereunder, and for
a period of one (1) year after the effective date of termination of this
Agreement, he will not:
(i) Compete (as defined below) with the Company; or
(ii) assist a Competitor (as defined below) of the Company by
providing consulting or other advisory services to that Competitor.
(b) The following terms, as used in this Section 9 shall have the
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meanings set forth below:
(i) The Company's "Business" means development and deployment of
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an Internet broadcast and data delivery system using satellites, and other
businesses or services that the Company may establish from time to time during
the term of this Agreement.
(ii) The term "Competitor" means any firm, corporation or entity
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that is engaged in business substantially similar to the Company's Business.
(iii) The term "Compete" means to engage in direct competition
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with the Company by serving as an employee, officer, director, proprietor,
partner, stockholder or other security holder (other than a holder of securities
of a corporation listed on a national securities exchange or the securities of
which are regularly traded in the over-the-counter market, provided that the
Employee at no time owns in excess of 1% of the outstanding securities of such
corporation entitled to vote for the election of directors or other than of a
corporation in which the Employee makes passive investments through a venture
fund or similar investment vehicle) of any firm, corporation or entity that is a
Competitor of the Company.
(iv) The term "affiliate" means any person, firm or corporation,
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directly or indirectly through one or more intermediaries, controlling,
controlled by or under common control with the Company.
(c) The Employee further acknowledges that this Section 9 is an
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independent covenant within this Agreement, and that this covenant shall survive
any termination of Agreement and shall be treated as an independent covenant for
the purposes of enforcement. With respect to this covenant, the Employee hereby
acknowledges receipt of Ten Dollars ($10.00) and other good and valuable
consideration stated herein including the consideration of his continued
employment by the Company.
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(d) The Employee shall, during the term of this Agreement and
thereafter, notify any prospective employer of the terms and conditions of this
Agreement regarding confidentiality, nondisclosure and noncompetition.
(e) Notwithstanding anything to the contrary contained herein, in the
event the Employee is terminated without cause pursuant to Section 5 above or
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in the event this Agreement is terminated by the Employee for cause pursuant to
Section 7 above, then the non-competition provision set forth in this Section 9
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shall be of no force or effect unless, in addition to the severance payments
provided pursuant to Section 5(c) or Section 7(c), as applicable, the Company
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pays the Employee an amount equal to six (6) months of base salary as of the
date of termination.
10. Confidentiality and Non-Disclosure.
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(a) The Employee shall hold in strict confidence and shall not,
either during the term of this Agreement or after the termination hereof,
disclose, directly or indirectly, to any third party, person, firm, corporation
or other entity, irrespective of whether such person or entity is a competitor
of the Company or is engaged in a business similar to that of the Company, any
trade secrets or other proprietary or confidential information of the Company
or any subsidiary or affiliate (as defined in Section 9) of the Company
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(collectively, "Proprietary Information") obtained by the Employee from or
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through his employment hereunder. Such Proprietary Information includes but is
not limited to Inventions (as defined below), marketing plans, product plans,
business strategies, financial information, forecasts, personnel information and
customer lists. The Employee hereby acknowledges and agrees that all Proprietary
Information referred to in this Section 10 shall not be used for any purpose
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other than his duties hereunder and shall be deemed trade secrets of the
Company and of its subsidiaries and affiliates, as defined in Section 9, and
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and that the Employee shall take such steps, undertake such actions and refrain
from taking such other actions, as mandated by the provisions hereof and by the
provisions of the Maryland Uniform Trade Secret Act. The Employee further
acknowledges that the Company's products and titles consist of copyrighted
material, and the Employee shall exercise his best efforts to prevent the use of
such copyrighted material by any person or entity which has not prior thereto
been authorized to use such information by the Company.
(b) The Employee further hereby agrees and acknowledges that any
disclosure of any Proprietary Information prohibited herein, or any breach of
the provisions of Section 10 of this Agreement, may result in irreparable
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injury and damage to the Company which will not be adequately compensable in
monetary damages, that the Company will have no adequate remedy at law therefor,
and that the Company may obtain such preliminary, temporary or permanent
mandatory or restraining injunctions, orders or decrees as may be necessary to
protect the company against, or on account of, any breach by the Employee of the
provisions contained in Sections 10 or 11.
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(c) The Employee further agrees that, upon termination of this
Agreement, whether voluntary or involuntary or with or without cause, the
Employee shall notify any new employer, partner, associate or any other firm or
corporation with whom the Employee shall become associated in any capacity
whatsoever of the provisions of this Section 10, and that the Company may
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give such notice to such firm, corporation or other person.
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11. Assignment and Disclosure of Inventions.
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(a) Disclosure. From and after the date the Employee first became
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employed with the Company, the Employee hereby agrees to promptly disclose in
confidence to the Company all inventions, improvements, designs, original works
of authorship, formulas, processes, compositions of matter, computer software
programs, databases, mask works, and trade secrets that are directly related to
the Company's Business (as defined above) ("Inventions"), whether or not
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patentable, copyrightable or protectible as trade secrets, that are made or
conceived or first reduced to practice or created by the Employee, either alone
or jointly with others, during the period of the Employee's employment and in
the course of the Employee's employment.
(b) Assignment. The Employee hereby acknowledges that copyrightable
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works prepared by the Employee within the scope of the Employee's employment are
"works for hire" under the Copyright Act and that the Company will be considered
the author thereof. The Employee hereby agrees that all Inventions that (a) are
developed using equipment, supplies, facilities or trade secrets of the Company,
(b) result from work performed by the Employee for the Company, or (c) directly
relate to the Company's Business (as defined above), will be the sole and
exclusive property of the Company and are hereby assigned by the Employee to the
Company.
12. Severability. The Company and the Employee recognize that the laws
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and public policies of the State of Maryland are subject to varying
interpretations and change. It is the intention of the Company and of the
Employee that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of the State of Maryland,
but that the unenforceability (to the modification to conform to such laws or
public policies) of any provision or provisions hereof shall not render
unenforceable, or impair, the remainder of this Agreement. Accordingly, if any
provisions of this Agreement shall be determined to be invalid or unenforceable,
either in whole or in part, this Agreement shall be deemed amended to delete or
modify, as necessary, the offending provision or provisions and to alter the
balance of this Agreement in order to render it valid and enforceable.
13. Assignment. Neither the rights nor obligations under this Agreement
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may be assigned by either party, in whole or in part, by operation of law or
otherwise, except that it shall be binding upon and inure to the benefit of any
successor of the Company and its subsidiaries and affiliates, whether by merger,
reorganization or otherwise, or any purchaser of all or substantially all of the
assets of the Company. may be
14. Notices. Any notice expressly provided for under this Agreement
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shall be in writing, shall be given either manually or by mail and shall be
deemed sufficiently given when actually received by the party to be notified or
when mailed, if mailed by certified or registered mail, postage prepaid,
addressed to such party at their addresses as set forth below. Either party may,
by notice to the other party, given in the manner provided for herein, change
their address for receiving such notices.
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(a) If to the Company, to:
SkyCache, Inc.
312 Laurel Avenue
Laurel, Maryland 20707
(b) If to the Employee, to:
Mr. Robert M. Dunham
706 Anderson Avenue
Rockville, Maryland 20850.
15. Governing Law. This Agreement shall be executed, construed and
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performed in accordance with the laws of the State of Maryland without reference
to conflict of laws principles. The parties agree that the venue for any dispute
hereunder will be the state or federal courts sitting in Prince George's County,
Maryland and the parties hereby agree to the exclusive jurisdiction thereof.
16. Headings. The section headings contained in this Agreement are for
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reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17. Entire Agreement; Amendments. This Agreement constitutes and
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embodies the entire agreement between the parties in connection with the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings in connection with such subject matter. No covenant or condition
not expressed in this Agreement shall affect or be effective to interpret,
change or restrict this Agreement. In the event of a conflict or inconsistency
between the terms of this Agreement and the Company's policies regarding
employees, the terms of this Agreement shall supersede the conflicting or
inconsistent Company policies. No change, termination or attempted waiver of any
of the provisions of this Agreement shall be binding unless in writing signed by
the Employee and on behalf of the Company by an officer thereunto duly
authorized by the Company's Board of Directors. No modification, waiver,
termination, rescission, discharge or cancellation of this Agreement shall
affect the right of any party to enforce any other provision or to exercise any
right or remedy in the event of any other default.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY:
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SKYCACHE, INC.,
a Delaware corporation
By: /s/ Douglas E. Humphrey
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Douglas E. Humphrey
President
EMPLOYEE:
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/s/ Robert M. Dunham
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Robert M. Dunham
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SCHEDULE A
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1. The Employee shall be paid an initial annual base salary equal to $90,000
which shall be reviewed annually by the Board of Directors (or the
Compensation Committee thereof) and which shall be subject to increase by
the Board of Directors (or the Compensation Committee thereof) from time to
time. Employee shall automatically receive a salary increase to $110,000
after the Company achieves three consecutive months of operating
profitability.
2. Participation in all Company benefit plans as may be established from time
to time.
3. Participation in any Executive Bonus and/or Option Plan as may be
established on no less favorable terms than other executive officers of the
Company. The Employee acknowledges that the Company is not guaranteeing
any level of compensation from such plans.