Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of May
24, 1999, by and between IFX CORPORATION, a Delaware corporation ("IFX" and,
collectively with its subsidiaries, "Employer"), and ZALMAN LEKACH ("Employee").
W I T N E S S E T H:
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WHEREAS, Employer desires to employ Employee on the terms and subject
to the conditions set forth herein; and
WHEREAS, Employee has had an opportunity to review the terms and
conditions of this Agreement, to negotiate the terms hereof and to engage legal
counsel on his behalf if he so desires.
NOW THEREFORE, in consideration of Employer's employment of Employee,
the terms, conditions and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Employee and Employer, intending to be legally bound, hereby agree as follows:
1. Employment. Employer hereby agrees to employ Employee and
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Employee agrees to accept such employment upon the terms and conditions herein
set forth.
2. Employment Period.
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(a) The initial term of employment hereunder shall commence on the
date hereof and shall expire on May 23, 2001, and shall automatically be
extended for an additional two (2) year period, unless either party to this
Agreement gives the other party written notice of such party's intention to
terminate this Agreement and the employment of Employee at least sixty (60) days
prior to May 23, 2001 (such period, including any extensions thereof, the
"Term"). In the event that Employee continues to be employed by Employer at any
time
following the initial or any extended term hereof, such employment shall be
governed by this Agreement, except that it will be "at-will," without a fixed
term, and may be terminated by Employer or Employee at any time, with or without
notice, for any reason or no reason (and no reason need be given), and without
obligation of severance or additional compensation beyond that owed for periods
that Employee was actually employed by Employer.
3. Position and Duties.
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(a) Position. Employee hereby agrees to serve as Vice President
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of Mergers and Acquisitions of IFX, the Vice President-Acquisitions of Emerging
Networks, Inc., an indirect wholly-owned subsidiary of IFX, and the Vice
President-Business Development of IFX/Communications Ventures, Inc., an indirect
wholly-owned subsidiary of IFX. Employee shall devote his best efforts and full
business time and attention to the performance of services to Employer in
accordance with the terms hereof and as may reasonably be requested by the Board
of Directors of Employer (the "Board") or a person or persons designated by the
Board. Employer shall retain full direction and control of the means and methods
by which Employee performs the above services.
(b) Other Activities. During the Employment Period, Employee shall
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not engage in any other business or professional activities, either on a full-
time or part-time basis, as an employee, consultant or in any other capacity,
whether or not he receives any compensation therefor, without the prior written
consent of the Board; provided, however, that nothing herein shall prevent
Employee from making and managing personal investments consistent with Sections
10 and 11 of this Agreement, engaging in community and/or charitable activities
or sitting on the board of any of the Parlux Fragrances, Perfumania, or
Telcom.Net, L.P., so long as such activities, either singly or in the aggregate,
do not interfere with the proper performance of his duties and responsibilities
to Employer.
4. Compensation.
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(a) Base Salary. Employer shall pay to Employee salary at the
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rate of US$140,000 per year for the period from June 1, 1999 through May 23,
2000 ("Year 1"), and salary at the rate of $150,000 per year for period from May
24, 2000 through May 23, 2001 ("Year 2") (in each case, the "Base Salary").
Payments of Base Salary shall be made in accordance with Employer's generally
applicable compensation policies and shall be net of applicable tax
withholdings. In the event that the Term of this Agreement is extended pursuant
to Section 2 hereof, Base Salary shall be $200,000 for the period from May 24,
2001 through May 23, 2002, and $208,000 for the period from May 24, 2002 through
May 23, 2003.
(b) Bonus Compensation. In addition to Base Salary, Employee
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shall be entitled to receive bonus compensation based on: (i) Employer's
purchase or start-up of Internet service providers; and (ii) customer growth, in
each case pursuant to the terms and conditions set forth on Exhibit A attached
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hereto (the "Bonus Compensation").
(c) Holidays and Vacation Time. Employee shall be entitled to
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such paid holidays as are consistent with Employer's policy for executive
employees with respect to such matters as of the date hereof. Employee is
entitled to three (3) weeks of paid vacation per year, but shall not be
compensated for, or entitled to carry-over, any unused vacation time.
(d) Other Benefits. Subject to Employer's rules, policies and
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regulations as in effect from time to time (and subject to applicable
eligibility requirements, including a minimum employment period), Employee shall
be entitled to (i) group life insurance, disability or accident, death or
dismemberment insurance, (ii) medical and/or dental insurance program (90-day
minimum employment period, for which Employer will reimburse the COBRA expenses
of Employee), (iii) 401(k) benefit plan when the Company has the plan
established, or (iv) other employee benefits that Employer may, in its sole
discretion, make generally available to employees of Employer of the same level
and responsibility as Employee. In addition to the
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foregoing, Employer agrees that it shall pay for fifty percent (50%) of any
premiums for Employee's health insurance policy (PPO or equivalent) and Employee
agrees that he shall pay fifty percent (50%) of any premiums for such policy.
(e) Life and Other Insurance. Subject to Employee meeting
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applicable underwriting criteria, Employer will provide term life and such other
types of insurance for Employee as shall be agreed upon between Employee and
Employer from time to time.
5. Participation in Stock Plan.
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(a) Stock Plan Benefits. Subject to Employer's rules, policies
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and regulations as in effect from time to time (and subject to applicable
eligibility requirements, including minimum employment period), Employee will be
eligible to receive certain benefits under the IFX Corporation 1998 Stock Option
and Incentive Plan or any other stock option plan adopted by IFX (the "Stock
Plan"). Benefits under the Stock Plan will be granted in the sole and absolute
discretion of the committee administering the Stock Plan and shall be subject to
the terms of the Stock Plan, as the same may from time-to-time be amended and/or
modified.
(b) Restrictions on Stock Plan Benefits. No options or other
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benefits shall be granted to Employee under the Stock Plan unless, in Employer's
judgment based on the advice of its legal counsel, such issuance complies with
applicable state and federal securities laws, and other laws and regulations
related thereto. All such Stock Plan benefits shall be subject to Employee
signing such option agreements or other instruments that Employer deems to be
necessary or appropriate and to such other restrictions as are required by the
Stock Plan and/or applicable law.
(c) Employer's Sole Discretion Regarding Stock, Etc. Subject to
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the provisions of this Agreement, Employee acknowledges and agrees that Employer
has the right, in its sole discretion, to make all decisions regarding its
stock, stock rights, Stock Plan benefits,
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profits, debt and equity configuration, including but not limited to what types,
when and to whom to issue stock, stock rights, Stock Plan benefits, profits,
debt and equity interests.
(d) Sign-on Bonus. Upon the execution of this Agreement, Employer
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shall grant to Employee, as a sign-on bonus, an aggregate of 3,371 shares of
Restricted Stock, as defined in and subject to the terms of the Stock Plan.
Upon issuance to Employee, such 3,371 shares of Restricted Stock shall be deemed
fully vested and shall not be subject to forfeiture.
6. Termination of Employment.
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(a) Permanent Disability. In the event of the Permanent
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Disability (as defined below) of Employee, the Company, in its sole discretion,
may elect either (i) to the extent feasible consistent with Employee's mental
and physical condition and consistent with applicable law, to reassign Employee
to other duties within the Company that Employee is able to perform despite his
Permanent Disability at the compensation and benefit levels commensurate with
Employee's reassigned duties, or (ii) to terminate this Agreement and Employee's
employment hereunder. In the event that the Company elects to terminate Employee
as provided in clause (ii) above, the Company shall, subject to following
sentence, pay to Employee (A) within sixty (60) days after the date of such
termination, all amounts of Base Salary and Bonus Compensation accrued pursuant
to Section 4 above prior to the date of such termination, and (B) compensation
on the basis of 60% of the then current Base Salary for the first ninety (90)
days of such Permanent Disability and, thereafter, compensation on the basis of
60% of the then current Base Salary through the end of the Permanent Disability
period. This benefit may be provided by the Company to Employee through the
purchase of a disability insurance policy that is contingent upon the
insurability of Employee; provided, however, that the maximum premium that the
Company shall be required to pay towards this benefit will not exceed US$100,000
per year. Notwithstanding the foregoing, all payments hereunder shall end upon
the earlier to occur of Executive's attaining the age of sixty-five (65) and the
cessation of such Permanent Disability (whether as a result of recovery,
rehabilitation, death or otherwise), and, thereafter, the Company shall have no
further obligations to Employee under this Agreement. Additionally, if prior to
the termination of the Company's obligation to make payments to Employee
pursuant
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to this Section 6(a) Employee receives compensation for services rendered,
whether as an employee or otherwise, such compensation shall reduce the payments
due under this Section 6(a), dollar for dollar. Employee shall promptly inform
the Company of all such compensation received by him on a monthly basis during
such period.
(b) Death. In the event of Employee's death, the Company shall pay to
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Employee's personal representative (on behalf of Employee's estate), within
sixty (60) days after the Company receives written notice of such
representative's appointment, all amounts of Base Salary and Bonus Compensation
accrued pursuant to Section 4 above as of the date of Employee's death which
payment shall constitute full and complete satisfaction of the Company's
obligations hereunder. Employee's dependents shall also be entitled to any
continuation of health insurance coverage rights, if any, under applicable law.
(c) Termination for Cause or Voluntary Termination Without Good
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Reason. The Company may in its sole discretion terminate this Agreement and
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Employee's employment with the Company for Cause (as defined in Section 7(a)
below) at any time and with or without advance notice to Employee. If
Employee's employment is terminated for Cause, or if Employee Voluntarily
Terminates (as defined in Section 7(b) below) his employment with the Company
without Good Reason (as defined in Section 7(c) below), the Company shall
promptly pay to Employee all amounts of Base Salary accrued pursuant to Section
4 above through the date of termination (but not Bonus Compensation), whereupon
the Company shall have no further obligations to Employee under this Agreement.
Employee and his dependents shall also be entitled to any continuation health
insurance coverage rights, if any, under applicable law. Without waiving any
rights the Company or any of its affiliates may have hereunder or otherwise, the
Company hereby expressly reserves its right to proceed against Employee for
damages in connection with any claim or cause of action that the Company may
have arising out of or related to Employee's employment hereunder. In the event
the Company terminates Employee's employment for Cause or Employee voluntarily
terminates his employment without Good Reason, all unexercised options and other
awards granted to Employee under the Stock Plan, as Bonus Compensation or
otherwise shall be cancelled and forfeited by Employee.
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(d) Termination Without Cause; Voluntary Termination With Good Reason.
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Subject to the penultimate sentence of this paragraph, the Company may terminate
this Agreement and Employee's employment with the Company without Cause at any
time, with or without notice, for any reason or no reason (and no reason need be
given). Employee may terminate this Agreement and Voluntarily Terminate his
employment with the Company with Good Reason upon thirty (30) days' prior
written notice to the Company, provided that the Company does not correct the
circumstances giving Employee Good Reason during such thirty (30) day period.
In the event Employee's employment with the Company is terminated pursuant to
this Section 6(d), (i) the Company shall pay to Employee all amounts of Base
Salary for the entire length of the Term (including any renewal period) and if
such termination occurs within the initial term of this Agreement, the Bonus
Compensation payable to Employee pursuant to Section 4(b) shall be calculated
based on the assumption that Employer made 10 Initial ISP Purchases in Year 1
and 10 ISP Purchases in Year 2, (ii) Employee shall be relieved of his
obligations under Sections 1 and 3 hereof, and (iii) Employee shall be free to
seek other employment subject to the terms of Sections 8, 9, 10 and 11 hereof.
Employee and his dependents shall also be entitled to any continuation health
insurance coverage rights, if any, under applicable law.
(e) Termination Obligations.
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(i) Employee hereby acknowledges and agrees that all personal property and
equipment furnished to or prepared by Employee in the course of or incident to
his employment by the Company, belongs to the Company and shall be promptly
returned to the Company upon termination of the Employee's employment. The term
"personal property" includes, without limitation, all books, manuals, records,
reports, notes, contracts, requests for proposals, bids, lists, blueprints, and
other documents, or materials, or copies thereof (including computer files), and
all other proprietary information relating to the business of the Company or any
of its affiliates. Following termination, Employee will not retain any written
or other tangible material containing any proprietary information of the Company
or any of its affiliates.
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(ii) Upon termination of the Employment Period, Employee shall be
deemed to have resigned from all offices and directorships then held with the
Company and each of its affiliates.
(iii) The representations and warranties contained herein and
Employee's obligations under Sections 6(e), 8, 9, 10, 11 and 17 shall survive
termination of the Employment Period and the expiration of this Agreement.
(iv) If the average of the closing bid and ask price of the common
stock of Employer (or any successor to Employer) equals or exceeds 100% of the
exercise price of any options granted pursuant to Section 4(b) hereof for 5
consecutive trading days after the termination of Employee's employment, any
options held by Employee must be exercised within 90 days after the end of such
5 day period. Any options which are not exercised at the end of such 90 day
period will be forfeited by Employee.
(f) Change of Control. In the event of a Change of Control (as
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defined below), the remaining Base Salary payable under the Term of this
Agreement shall be doubled and shall be payable in one lump-sum within 30 days
after the effective date of the Change of Control. Also, in the event of a
Change of Control, the Bonus compensation will be computed and paid out in the
same manner as if Employee were terminated without Cause. Further, in the year
of a Change of Control, the number of options granted under Exhibit A shall be
the greater of: a) the number of options which Employee is entitled to be
granted for such year under Exhibit A and b) 150,000. In addition, if so
requested by Employee in writing within 15 days prior to the effective date of
the Change of Control, Employer will repurchase Employee's options within a
period beginning five (5) business days before and ending five (5) business days
after the effective date of the Change of Control based on the average of the
closing bid and ask prices of IFX's common stock for the twenty trading days
ending with the day that Employee provides the above notice.
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7. Definitions. For the purposes of this Agreement the following
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terms and phrases shall have the following meanings:
(a) "Cause" The Company shall have "Cause" to terminate the
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Employee's employment under this Agreement upon (a) the willful and
continued failure by the Employee to substantially perform his duties
under this Agreement (other than any failure resulting from the
Employee's incapacity due to physical or mental illness) for thirty
(30) days after written demand for substantial performance is
delivered by the Company specifically identifying the manner in which
the Company believes the Employee has not substantially performed his
duties or (B) the willful engaging by the Employee in misconduct
(including embezzlement and criminal fraud) which is materially
injurious to the Company, or (C) the willful violation by the Employee
of Sections 8, 9, 10 or 11 of this Agreement, provided that the
violation results in material injury to the Company, or (D) the
conviction of the Employee of a felony. for purposes of this
paragraph, no act, or failure to act, by the Employee shall be
considered "willful" unless done or permitted to be done, by him not
in good faith and without reasonable belief that his action or
omission was in the interest of the Company. The Employee shall not be
deemed to have been terminated for Cause unless and until there shall
have been delivered to the Employee a copy of a resolution, duly
adopted by the affirmative vote of a majority of the Board of the
Company at a meeting of the Board called and held for such purposes
(after a reasonable notice to the Employee and an opportunity for him,
together with his counsel, to be heard before the Board), finding that
in the good faith opinion of the Board the Employee was guilty of
conduct set forth above in clause (a), (B), (C), or (D) and specifying
the particulars of the conduct in detail.
(b) "Change in Control" means (i) a merger or consolidation of the
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Company with or into any other entity unless after such event at least
a majority of the voting power of the surviving or resulting entity is
beneficially owned by persons who beneficially own a majority of the
voting power of the Company immediately prior to such event, (ii) the
sale of all or substantially all the assets of the Company, (iii) the
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dissolution of the Company, or (iv) a change in the identity of a
majority of the members of the Company's Board of Directors within any
twelve-month period, which change or changes are not recommended by
the incumbent directors determined immediately prior to any such
change or changes; provided, however, that no "Change of a Control"
will arise as a result of the issuance of shares of the stock of the
Company in connection with the exercise of an option granted to
International Technology Investments, LC on November 23, 1998.
(c) "Good Reason" shall mean, with respect to a Voluntary
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Termination, if (i) such Voluntary Termination promptly follows a
permanent material reduction of Employee's duties and responsibilities
or a permanent change in Employee's duties and responsibilities such
that Employee's duties and responsibilities are materially
inconsistent with the type of duties and responsibilities of Employee
in effect immediately prior to such reduction or change, (ii) such
Voluntary Termination promptly follows a material reduction in
Employee's benefits if such reduction results in Employee's receiving
benefits which are, in the aggregate, less than the benefits received
by other comparable employees of the Company generally, (iii) the
Company is in material breach of its payment obligations under this
Agreement, which breach has not been cured within fifteen (15) days
following the Company's receipt of written notice thereof, or (iv) the
Board of Directors of the Company otherwise determines that a
Voluntary Termination by Employee is for "Good Reason" under the
circumstances then prevailing.
(d) "Voluntary Termination" (including "Voluntarily Terminates")
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shall mean the termination by Employee of his employment by the
Company by voluntary resignation or any other means other than death,
retirement or Permanent Disability and other than simultaneous with or
following termination for Cause or an event which, whether or not
known to the Company at the time of such Voluntary Termination by such
Executive, would constitute Cause.
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8. Records and Confidential Data.
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(a) Employee acknowledges that, in connection with the performance
of his duties during the term of this Agreement, the Company and its affiliates
will make available to Employee, and/or Employee will have access to, certain
Confidential Information (as defined below) of the Company and its affiliates.
Employee acknowledges and agrees that any and all Confidential Information
learned or obtained by Employee during the course of his employment by the
Company or otherwise (including, without limitation, information that Employee
obtained through or in connection with his ownership of equity interests in, or
services as a director of, the Company), whether developed by Employee alone or
in conjunction with others or otherwise, shall be and is the property of the
Company and its affiliates.
(b) The Confidential Information shall be kept confidential by
Employee, shall not be used in any manner which is detrimental to the Company or
any of its affiliates, shall not be used other than in connection with
Employee's discharge of his duties hereunder, and shall be safeguarded by
Employee from unauthorized disclosure.
(c) Following the first to occur of the termination of this
Agreement or Employee's termination hereunder, as soon as possible after the
Company's written request, Employee shall return to the Company all written
Confidential Information which has been provided to Employee and Employee shall
destroy all copies of any analyses, compilations, studies or other documents
prepared by Employee or for Employee's use containing or reflecting any
Confidential Information. Within five (5) business days of the receipt of such
request by Employee, Employee shall, upon written request of the Company,
deliver to the Company a notarized document certifying that such written
Confidential Information has been returned or destroyed in accordance with this
Section 8(c).
(d) For the purposes of this Agreement, "Confidential Information"
shall mean all confidential and proprietary information of the Company and/or
its affiliates, including, without limitation, information derived from reports,
investigations, experiments, research, trade
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secrets, work in progress, drawing, designs, plans, proposals, requests for
proposals, bids, codes, marketing and sales programs, client lists, client
mailing lists, medical, psychological, academic and other records and reports,
supplier lists, financial projections, cost summaries, payor information,
pricing formulae, marketing studies relating to prospective business
opportunities and all other concepts, ideas, materials, or information prepared
for performed for or by the Company and/or any of its affiliates. For purposes
of this Agreement, the Confidential Information shall not include and Employee's
obligations under this Section 8 shall not extend to (i) information which is
generally available to the public without undue expense or effort, (ii)
information obtained by Employee from third persons not under agreement to
maintain the confidentiality of the same and (iii) information which is required
to be disclosed by law or legal process (after giving the Company prior written
notice thereof and an opportunity to contest such disclosure). Without in any
way limiting the foregoing, "Confidential Information" also includes all
information relating to any options or other awards granted to Employee,
pursuant to the Stock Plan or otherwise, including the amount of any such award,
the exercise price and the rate of vesting thereof.
(e) Employee hereby acknowledges that each subsidiary and
affiliate of Employer is expressly made a third party beneficiary hereto for
purposes of protecting its rights and interests hereunder.
9. Inventions and Other Matters.
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(a) Employee agrees that all ideas, inventions, discoveries or
improvements made during the period of Employee's employment with Employer,
including, without limitation, new machines, devices, computer software
(including source code, operating systems and specifications, data, data bases,
files documentation and other materials related thereto), programs, processes,
uses, apparatuses, specialized information relating in any way to or that is
useful in the business or products of Employer or Employer's actual or
demonstrably anticipated research or development, designs or compositions of any
kind that Employee, individually or with others, may originate or develop while
employed by Employer (collectively,
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"Inventions"), shall belong to and be the sole property of Employer and shall
constitute works specially ordered or commissioned as "works made for hire"
under the United States Copyright Act and other applicable law. Without limiting
the foregoing, Employee hereby assigns and transfers to Employer all rights of
whatever nature that Employee may have, including, without limitation, any
patent, trade secret, trademark or service mark rights (and any goodwill
appurtenant thereto), any rights of publicity and any right, title and interest
in any copyright and any right that may affix under any copyright law now or
hereinafter in force and effect in the United States of America or in any other
country or countries, in and to any Invention. Employee acknowledges and agrees
that Employer shall have the royalty-free right to use in its businesses, and to
make and sell products, processes, programs, systems designs, methods, formulas,
apparatus, techniques, and services derived from any Inventions (whether or not
patentable or copyrightable), as well as all improvements thereof or know-how
related thereto.
(b) For purposes of this Agreement, an Invention shall be deemed
to have been "made during the period of Employee's employment" if, during such
period, the Invention was conceived, in part or in whole, or first actually
reduced to practice. Employee agrees that any patent, copyright or trade mark
application filed by or for the benefit of Employee or any of his affiliates
within a year after termination of Employee's employment shall be presumed to
relate to an Invention made during the term of his employment and Employee shall
have the burden of proof to prove otherwise.
(c) This Section 9 shall not apply to an Invention for which no
equipment, supplies, facilities or Confidential Information (as defined below)
of Employer was used and that was developed entirely on Employee's own time,
unless (i) the invention relates in any way to or is useful in the business or
products of Employer, or Employer's actual or demonstrably anticipated research
or development, or (ii) results from any work performed by Employee for or on
behalf of Employer.
(d) Employee agrees, without further consideration, to (i)
promptly disclose each such Invention to Employer, to Employee's immediate
supervisor and to such other
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individuals as Employer may direct, (ii) execute and to join others in executing
such applications, assignments and other documents as may be necessary or
convenient to vest in Employer, or its designee, full title to each such
Invention and as may be necessary or convenient to obtain United States and
foreign patents and copyrights thereon, to the extent Employer may so choose in
its sole discretion, (iii) testify in any legal proceeding relative to such
Invention whenever requested to do so by Employer, and (iv) furnish all facts
relating to such Inventions or the history thereof.
(e) Employee agrees that he will not at any time, except as
authorized or directed by Employer, publish or disclose any information or
knowledge concerning any Inventions.
10. Non-Competition.
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(a) Employer and Employee recognize that Employee has been
retained to occupy a position that constitutes part of the professional,
management and executive staff of Employer, whose duties will include the
formulation and execution of management policy. Employee, for and in
consideration of the payments, rights and benefits provided herein, agrees that
so long as he is employed by Employer and, if Employer terminates his employment
for Cause or if Employee voluntarily terminates his employment with Employer,
for a period of one (1) year thereafter, Employee shall not (i) work, (ii)
assist, (iii) own any interest, directly or indirectly and whether individually
or as a joint venturer, partner, member, officer, director, shareholder,
consultant, employee or otherwise, in or (iv) make a financial investment,
whether in the form of equity or debt, in any business that is directly or
substantially competitive with the Business in the United States, Latin America
or in any other market in which Employer is conducting the Business at the time
Employee's employment with Employer is terminated, with respect to Employer's
clients or customers.
(b) Notwithstanding the foregoing, nothing herein shall prohibit
Employee from holding five percent (5%) or less of any class of voting
securities of any entity whose
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equity securities are listed on a national securities exchange or regularly
traded in the over-the-counter market and for which quotations are readily
available on the National Association of Securities Dealers Automated Quotation
system.
(c) Upon the termination of Employee's employment with Employer,
and for one (1) year thereafter, Employee shall immediately notify Employer of
each employment or agency relationship entered into by Employee, and each
corporation, proprietorship or other entity formed or used by Employee, the
business of which is directly or indirectly, similar to or in competition with
the Business. The provisions of this Section 10 shall survive termination of
this Agreement for any reason.
(d) Employee agrees that the restrictions contained in this
Section 10 are reasonable as to time and geographic scope because of the nature
of the Business and Employee agrees, in particular, that the geographic scope of
this restriction is reasonable because companies in the same industry as the
Business, compete on a nationwide basis. Employee acknowledges that Employer is
in direct competition with all other companies that provide services and
products similar to Employer's products and services throughout the United
States, Latin America and other markets in which Employer may be conducting the
Business at the time Employee's employment with Employer is terminated, and
because of the nature of the Business, Employee agrees that the covenants
contained in this Section 10 cannot reasonably be limited to any smaller
geographic area.
11. Non-Solicitation and Non-Interference.
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(a) Employee acknowledges that Employer has invested substantial
time and effort in assembling its present staff of personnel. Employee agrees
that so long as he is employed by Employer and, if Employer terminates his
employment for Cause or if Employee voluntarily terminates his employment with
Employer, for a period of one (1) year thereafter, Employee shall not either
directly or indirectly employ, solicit for employment, or advise or
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recommend to any other person that such other person employ or solicit for
employment, any of Employer's employees.
(b) Employee acknowledges that all customers of Employer, which
Employee has serviced or hereafter services during Employee's employment by
Employer and all prospective customers from whom Employee has solicited or may
solicit business while in the employ of Employer, shall be solely the customers
of Employer. Employee agrees that so long as he is employed by Employer and, if
Employer terminates his employment for Cause or if Employee voluntarily
terminates his employment with Employer, for a period of one (1) year
thereafter, Employee shall not either directly or indirectly solicit business,
as to products or services competitive with the Business of Employer, from any
of Employer's customers with whom Employee had contact during his employment
with Employer.
(c) Employee agrees that so long as he is employed by Employer
and, if Employer terminates his employment for Cause or if Employee voluntarily
terminates his employment with Employer, for a period of one (1) year
thereafter, Employee shall not either directly or indirectly interfere with any
relationship between Employer and any of its suppliers, clients or employees.
Employee agrees that during such one (1) year period, he will not influence or
attempt to influence any of the customers or clients of Employer not to do
business with Employer.
(d) Employee agrees that the restrictions contained in this
Section 11 are reasonable as to time and geographic scope because of the nature
of the Business and Employee agrees, in particular, that the geographic scope of
this restriction is reasonable because companies in the same industry as the
Business compete on a nationwide basis. Employee acknowledges that Employer is
in direct competition with all other companies that provide services and
products similar to Employer's products and services on an outsourced basis
throughout the United States, Latin America and other markets in which Employer
may be conducting the Business at the time Employee's employment with Employer
is terminated and,
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because of the nature of the Business, Employee expressly agrees that the
covenants contained in this Section 11 cannot reasonably be limited to any
smaller geographic area.
12. Employment Relationship. The relationship between Employer and
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Employee is and shall be specifically limited to an employer/employee
relationship. As a result, nothing contained in this Agreement or relating to
any past, present or future relationship between Employee and Employer
(employment or otherwise) shall be construed as creating any partnership, joint
venture, trustee/beneficiary or other type of fiduciary or business relationship
between the parties.
13. Prior Obligations. Employee represents and warrants that (a)
-----------------
Employee has no obligation of confidence or other commitments to any previous
employer or any others that conflict with this Agreement or restrict Employee's
field of activities, and (b) no other agreement to which Employee is subject
will conflict with, prevent, be breached by, interfere with or in any manner
affect the terms and conditions of this Agreement.
14. Dedication Of Services. Subject to the provisions of Section
----------------------
3(b) hereof, Employee agrees that while employed with Employer, Employee shall
devote his entire productive time, ability and attention to the business of
Employer during Employer's normal business hours. Employee further agrees that
during his employment by Employer, Employee will not, without Employer's prior
written consent, directly or indirectly engage in any employment, consulting, or
other activity which would conflict with Employee's duties and obligations to
Employer.
15. Jurisdiction; Service of Process. Each of the parties hereto
--------------------------------
agrees that all any action or proceeding initiated or otherwise brought to
judicial proceedings by either Employee or Employer concerning the subject
matter of this Agreement shall be litigated in the United States District Court
for the Northern District of Illinois or, in the event such court cannot or will
not exercise jurisdiction, in the state courts of the State of Illinois (the
"Courts"). Each of the parties hereto expressly submits to the jurisdiction and
venue of the Courts and consents to
17
process being served in any suit, action or proceeding of the nature referred to
above either (a) by the mailing of a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to his or its address as set
forth herein or (b) by serving a copy thereof upon such party's authorized agent
for service of process (to the extent permitted by applicable law, regardless
whether the appointment of such agent for service of process for any reason
shall prove to be ineffective or such agent for service of process shall accept
or acknowledge such service); provided that, to the extent lawful and
practicable, written notice of said service upon said agent shall be mailed by
registered or certified mail, postage prepaid, return receipt requested, to the
party at his or its address as set forth herein. Each party hereto agrees that
such service, to the fullest extent permitted by law, (i) shall be deemed in
every respect effective service of process upon him or it in any such suit,
action or proceeding and (ii) shall be taken and held to be valid personal
service upon and personal delivery to him or it. Each party hereto waives any
claim that the Courts are an inconvenient forum or an improper forum based on
lack of venue or jurisdiction. Each party shall bear its own costs and
attorneys' fees incurred in connection with any such actions or proceedings.
16. Injunctive Relief. Employee acknowledge that damages would be an
-----------------
inadequate remedy for Employee's breach of any of the provisions of Sections 8,
9, 10 and/or 11 of this Agreement, and that breach of any of such provisions
will result in immeasurable and irreparable harm to Employer. Therefore, in
addition to any other remedy to which Employer may be entitled by reason of
Employee's breach or threatened breach of any such provision, Employer shall be
entitled to seek and obtain a temporary restraining order, a preliminary and/or
permanent injunction, or any other form of equitable relief from any court of
competent jurisdiction restraining Employee from committing or continuing any
breach of such Sections, without the necessity of posting a bond. It is further
agreed that the existence of any claim or cause of action on the part of
Employee against Employer, whether arising from this Agreement or otherwise,
shall in no way constitute a defense to the enforcement of the provisions of
Sections 8, 9, 10 and/or 11 of this Agreement.
18
17. Miscellaneous.
-------------
(a) Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed given (i) when made, if delivered personally,
(ii) three (3) days after being mailed by certified or registered mail, postage
prepaid, return receipt requested, or (iii) two (2) days after delivery to a
reputable overnight courier service, to the parties, their successors in
interest or their assignees at the following addresses, or at such other
addresses as the parties may designate by written notice in the manner
aforesaid:
To Employer:
IFX Corporation
200 West Adams Street
Chicago, Illinois 60606
Attention: President
To Employee, to his home address as recorded in the payroll
records of Employer from time to time.
(b) Governing Law. This Agreement shall be governed as to its
-------------
validity and effect by the internal laws of the State of Illinois, without
regard to its rules regarding conflicts of law.
(c) Successors and Assigns. This Agreement shall be binding upon
----------------------
and shall inure to the benefit of (i) the heirs, executors and legal
representatives of Employee, upon Employee's death, and (ii) any successor of
IFX, and any such successor shall be deemed substituted for Employee or
Employer, as the case may be, under the terms hereof for all purposes. As used
in this Agreement, "successor" shall include any person, firm, corporation or
other business entity that at any time, whether by purchase, merger,
consolidation or otherwise, directly or indirectly acquires a majority of the
assets, business or stock of Employer. Employee acknowledges and agrees that the
rights and obligations of IFX hereunder may be
19
assigned to and assumed by any of its wholly or majority-owned subsidiaries,
without Employee's consent, which assignment and assumption shall constitute a
release of IFX, its subsidiaries or any of their respective affiliates that is
then bound by the terms of this Agreement, of all of its obligations and
liabilities hereunder.
(d) Integration. This Agreement (together with any option
-----------
agreement Employer may require Employee to execute in order to avail
himself/herself of any Stock Plan benefits specifically contemplated herein and
any agreement to release and hold harmless Employer executed concurrently
herewith) constitutes the entire agreement between the parties with respect to
all matters covered herein, including but not limited to the parties' employment
relationship and Employee's entitlement to compensation, commissions and
benefits from Employer or any of its affiliated companies and/or the termination
of Employee's employment. This Agreement supersedes all prior oral or written
understandings and agreements relating to its subject matter and all other
business relationships between Employer and/or its affiliated companies.
(e) No Representations. No person or entity has made or has the
------------------
authority to make any representations or promises on behalf of any of the
parties which are inconsistent with the representations or promises contained in
this Agreement, and this Agreement has not been executed in reliance on any
representations or promises not set forth herein. Specifically, no promises,
warranties or representations have been made by anyone on any topic or subject
matter related to Employee's relationship with Employer or any of its executives
or employees, including but not limited to any promises, warranties or
representations regarding future employment, compensation, commissions and
benefits, any entitlement to stock, stock rights, Stock Plan benefits, profits,
debt and equity interests in Employer or any of its affiliated companies or
regarding the termination of Employee's employment. In this regard, Employee
agrees that no promises, warranties or representations shall be deemed to be
made in the future unless they are set forth in writing and assigned by an
authorized representative of Employer.
20
(f) Amendments. This Agreement may be modified only by a written
----------
instrument executed by the parties that is designated as an amendment to this
Agreement.
(g) Counterparts. This Agreement is being executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(h) Severability and Non-Waiver. Any provision of this Agreement
---------------------------
(or portion thereof) which is deemed invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction and subject to this Section, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions thereof in such
jurisdiction or rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable. No waiver of any provision or violation
of this Agreement by Employer shall be implied by Employer's forbearance or
failure to take action.
(i) Attorneys Fees. In the event that any action or proceeding is
--------------
commenced by any party hereto for the purpose of enforcing any provision of this
Agreement, the parties to such action, proceeding or arbitration may receive as
part of any award, settlement, judgment, decision or other resolution of such
action or proceeding, whether or not reduced to a court judgment, their costs
and reasonable attorneys fees as determined by the person or body making such
award, settlement, judgment, decision or resolution.
(j) Voluntary and Knowledgeable Act. Employee represents and
-------------------------------
warrants that Employee has read and understands each and every provision of this
Agreement and has freely and voluntarily entered into this Agreement.
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EMPLOYER:
IFX CORPORATION
By: /s/ Joel Eidelstein
-------------------------------
Name: Joel Eidelstein
Title: President
EMPLOYEE:
/s/ Zalman Lekach
-----------------------------------
Zalman Lekach
22
EXHIBIT A
TO
EMPLOYEE AGREEMENT
(Zalman Lekach)
Bonus Compensation
------------------
The Bonus Compensation payable by Employer to Employer shall be payable in
shares, or Options to purchase shares, of the common stock, par value US$.02 per
share, of IFX (the "Common Stock"), which terms are defined in, and which awards
shall be granted under the Stock Plan, and calculated and paid as follows:
1. with respect to Year 1:
(a) for every ISP purchased or created by Employer or an affiliate of
Employer from and after June 1, 1999, and prior to the last day of
Year 1, whether by means of a share or asset purchase, merger,
consolidation, start-up, purchase of users or otherwise, in a country
in which Employer does not, on the date hereof, currently own an ISP
(each, an "Initial ISP Purchase"), Employee shall receive that number
of shares of Restricted Stock with an aggregate value of US$10,000
(based on the average closing price of the Common Stock as reported by
the Nasdaq Small Cap Market for the five (5) trading days immediately
prior to (x) the closing date of such Initial ISP Purchase or (y) the
first date on which the ISP provides services to third party
customers, as the case may be, without applying any restricted stock
discount), which shares of Restricted Stock shall be issued to
Employee within fifteen (15) days following the closing date of such
Initial ISP Purchase; provided, however, that even though Employer
currently owns an ISP in Argentina, if the Employer purchases an
additional ISP prior to the last day of Year 1, such additional ISP
purchase in Argentina shall be treated as an Initial ISP Purchase;
(b) upon the closing of the fourth (4th) Initial ISP Purchase for which
Employee receives Bonus Compensation pursuant to Section 1(a) above
during Year 1, Employee shall receive an additional one-time bonus of
that number of shares of Restricted Stock with an aggregate value of
US$50,000 (based on the average closing price of the Common Stock as
reported by the Nasdaq Small Cap Market on the five (5) trading days
immediately prior to the closing date of such fourth (4th) Initial ISP
Purchase, without applying any restricted stock discount), and which
shares of Restricted Stock shall be issued to Employee within fifteen
(15) days following the closing date of such fourth (4th) Initial ISP
Purchase;
A-1
(c) (i) for each internally generated net New User (a "New Users") of an
ISP described in Section 1(a) above (including, for this
purpose, any ISPs acquired by Employer which were acquired prior
to the effective date of this Agreement but which would have
been described in Section 1(a) if they had been acquired after
the effective date of the Agreement), other than a Retained User
(as defined below) or an Acquired User (as defined below), who
or which becomes a client of Employer, Employee shall receive an
Option to acquire two (2) shares of Common Stock, which Option
shall have an exercise price of US$8.75 per share,
(ii) for each net New User of an ISP described in Section 1(a) above
(including, for this purpose, any ISPs acquired by Employer
prior to the effective date of this Agreement but which would
have been described in Section 1(a) if they had been acquired
after the effective date of the Agreement), other than a
Retained User or a New User, who or which becomes a client of
Employer as the result of an acquisition of another Internet
service provider by Employer or any wholly-owned subsidiary of
Employer (each, an "Acquired User"), Employee shall receive an
Option to acquire one (1) share of Common Stock, which Option
shall have an initial exercise price of US$8.75 per share; and
(iii) for each Retained User of an ISP described in Section 1(a)
above, (including, for this purpose, any ISPs acquired by
Employer prior to the effective date of this Agreement but which
would have been described in Section 1(a) if they had been
acquired after the effective date of the Agreement), Employee
shall not be entitled to receive any Options to purchase shares
of Common Stock or other compensation pursuant to this
Agreement.
2. with respect to Year 2:
(a) for every ISP purchased or created by Employer or an affiliate of
Employer during Year 2, whether by means of a share or asset purchase,
merger, consolidation, start-up, purchase of users or otherwise,
including ISPs purchased in countries where Employer already owns an
ISP (each, an "ISP Purchase"), Employee shall receive that number of
shares of Restricted Stock with an aggregate value of US$7,500 (based
on the average closing price of the Common Stock for the five (5)
trading days immediately prior to the closing date of such ISP
Purchase), which shares of Restricted Stock shall be issued to
Employee within fifteen (15) days following the closing date of such
ISP Purchase;
(b) upon the closing of the tenth (10th) ISP Purchase for which Employee
receives Bonus Compensation pursuant to Section 2(a) above during Year
2, Employee shall receive an additional one-time bonus of that number
of shares of Restricted
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Stock with an aggregate value of US$50,000 (based on the average
closing price of the Common Stock for the five (5) trading days
immediately prior to the closing date of such tenth (10th) ISP
Purchase), which shares of Restricted Stock shall be issued to
Employee within fifteen (15) days following the closing date of such
tenth (10th) ISP Purchase.
(c) (i) for each net New User of an ISP described in Section 2(a), other
than a Retained User or an Acquired User, who or which becomes a
client of Employer, Employee shall receive an option to acquire
shares of Common Stock, which option shall have an exercise
price or US$8.75 per share;
(ii) for each Acquired User of an ISP described in Section 2(a)
above, Employee shall receive an option to acquire one (1) share
of Common Stock, which option shall have an exercise price of
US$8.75 per share;
(iii) for each Retained User of an ISP described in Section 2(a)
above, Employee shall not be entitled to receive any options to
purchase shares of Common Stock or other compensation pursuant
to this Agreement.
All shares of Restricted Stock granted to Employee hereunder as Bonus
Compensation shall be deemed fully vested on the date of grant to Employee and
shall not be subject to forfeiture. With respect to Sections 1(c) and 2(c)
above, the parties agrees as follows:
A. the number of Options to be granted as compensation to Employee shall
be determined and issued and delivered to Employee on a quarterly
basis for the prior quarter, commencing with July 1, 1999 (each such
date, a "Determination Date");
B. all calculations of changes in the number of Users shall be on a net
basis (i.e., options shall only be granted to the extent that there is
a total increase in the number of Users and any decreases in the
number of Users in a given category described above -- new Users,
Retained Users and/or Acquired Users -- shall offset increases in
Users in the other categories and any loss of Users in a given
category in excess of the gain of Users in a different category shall
be carried forward to offset any increase in the number of Users with
respect to any subsequent periods);
C. no Options shall be issued or shares shall be granted unless Employee
is employed on each Determination Date, all Options shall become
vested and exercisable on the one (1) year anniversary of the date of
issuance, if Employee is Terminated Without Cause or Voluntarily
Terminates with Good Reason, then any unvested Options shall vest and
be exercisable immediately and any vested but unexercised Options
shall be subject to
A-3
forfeiture in the event Employee's employment is terminated by
Employer for Cause or Employee Voluntarily Terminates without Good
Reason;
D. all shares of Restricted Stock and Options to acquire shares of Common
Stock granted hereunder to Employee shall, except as otherwise
expressly provided herein, be subject to the terms and conditions of
the Stock Plan, and, as applicable, a Stock Option Agreement to be
executed between Employer and Employee;
E. for the purposes hereof, the term "User" shall mean each single client
of Employer (i) who or which has been a client of Employer, including
any subsidiary of Employer, for a period of at least three (3)
consecutive months, (ii) whose account is current (i.e., no amounts
due from such client are more than sixty (60) days past due) as of the
applicable Determination Date, and (iii) for whom or which Employer
has current billing and address information; provided, however, that:
(x) any client who uses one of the ISPs to maintain or host a web site
shall be counted as one User for each such maintained or hosted web
site, and with respect to dedicated lines, (y) the parties agree that
the number of Users shall be deemed to be the greater of (i) fifteen
(15) Users for each 64k dedicated line, and (ii) that number as shall
be determined by dividing (A) the actual amount received by Employer
per month the dedicated line, by (B) the average dial-up account price
charged by Employer (on a monthly basis) as of the applicable
Determination Date, and (z) for any Internet service that is at least
twice the price of the average dial up service (and not described
above), the number of users shall be deemed to equal the price of that
service divided by the price of the average dial-up service charged by
that ISP; and
F. for the purposes hereof, the term "Retained User" shall mean any User
who or which is a client of Employer acquired pursuant to an Initial
ISP Purchase, which User remains continuously active and current in
payments from the date thereof for a period of at least three (3)
consecutive months thereafter.
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