EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made as of the 22nd day of
April, 1997, by and between ICG Communications, Inc., ("Employer" or the
"Company") and Don Teague, ("Employee").
R E C I T A L S
WHEREAS, Employer desires to hire and employ Employee as Executive
Vice President, General Counsel and Secretary of Employer, and/or
Employer's affiliate and/or subsidiary corporation as Employer may from
time-to-time decide, as provided herein; and
WHEREAS, Employee desires to be employed by Employer as provided
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties agree as follows:
1. Employment. The Company agrees to employ Employee and Employee
hereby agrees to be employed by the Company and/or such of its subsidiary
and affiliate corporations as determined by the Company, on a full-time
basis, for the period and upon the terms and conditions hereinafter set
forth.
2. Capacity and Duties. Employee shall be employed as Executive Vice
President, General Counsel and Secretary of Employer. During his
employment, Employee shall perform the duties and bear the responsibilities
commensurate with his position and as directed by the Chief Executive
Officer of the Company and shall serve the Company faithfully and to the
best of his ability.
3. Compensation and Benefits.
3.1 The Company shall pay Employee during the Term of this Agreement
an annual base salary, payable semi-monthly in arrears. The annual base
salary shall initially be One Hundred Ninety-Five Thousand Dollars
($195,000.00). The base salary shall be reviewed annually and may be
increased in amounts determined by the Board of Directors of the Company or
the Compensation Committee of the Board.
3.2 In addition to his base salary, the Company, during the Term of
this Agreement, shall pay Employee a performance bonus for each fiscal year
of the Company in an exact amount to be determined by the Board of
Directors of the Company or the Compensation Committee of the Board.
3.3 In addition to salary and bonus payments as provided above, the
Company shall provide Employee during the Term of this Agreement, with the
benefits of such insurance plans, hospitalization plans, stock plans,
retirement plans and other employee fringe benefits
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(including sick leave and four (4) weeks vacation time) as shall be
generally provided to senior executive officers of the Company and for
which Employee may be eligible under the terms and conditions thereof.
3.4 Throughout the Term of this Agreement, the Company shall provide
Employee with a Seven Hundred ($700.00) per month car allowance.
3.5 Throughout the Term of this Agreement, the Company shall reimburse
Employee for all reasonable out-of-pocket expenses incurred by Employee in
connection with the business of the Company and in performance of his
duties under this Agreement, upon presentation to the Company by Employee
of an itemized accounting of such expenses with reasonable supporting data.
3.6 The Company will provide to Employee from time to time stock
options under the Company's Incentive Stock Option Plan. Employee will
receive a grant of 50,000 stock options upon employment with an exercise
price equal to the closing price of the Company's common stock on April 22,
1997 ($9 1/8 per share). Employee will receive additional grants of 40,000
stock options on or before April 22, 1998 and of not less than 10,000 stock
options on or before April 22, 1999.
3.7 The Company will pay Employee all relocation expenses associated
with Employee's relocation from Houston, Texas to the Denver, Colorado
metropolitan area. Such expenses, which shall be grossed up one time for
taxes if applicable, shall include, without limitation, moving temporary
housing, real estate commissions on the sale of Employee's current home,
closing costs on the purchase of Employee's new home and any out-of-pocket
tuition termination costs related to Employee's children's private school.
4. Term. The initial term of this Agreement shall be for two (2)
years, commencing on May 19, 1997 ("Term"). Upon completion of the first
twelve (12) months of the Term, this Agreement will automatically renew
from month-to-month such that there will always be twelve (12) months
remaining in the Term, unless and until either party shall give at least
thirty (30) days notice to the other of his or its intention to terminate
this Agreement. The applicable provisions of Sections 3.2, 6, 7, 8, 9 and
10 shall remain in full force and effect as provided and for the time
periods specified in such Sections notwithstanding the termination of this
Agreement; all other obligations of either party to the other under this
Agreement shall terminate at the end of the Term.
5. Termination.
5.1 If Employee dies during the Term of this Agreement, the Company
shall pay his estate the compensation that would otherwise be payable to
him for the remaining term of this Agreement.
5.2 If, during the Term of this Agreement, Employee is prevented from
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performing his duties by reason of illness or incapacity for one hundred
forty (140) days in any one hundred eighty (180) day period, the Company
may terminate this Agreement, upon thirty (30) days prior notice thereof to
Employee or his duly appointed legal representative.
5.3 Pursuant to and subject to the provisions of Section 4 hereof, the
Company may terminate this Agreement upon at least thirty (30) days prior
notice to Employee upon the happening of any of the following events:
5.3.1 The sale by the Company of substantially all of its assets
to a single purchaser or associated group of purchasers who are not
affiliates of the Company.
5.3.2 The sale, exchange or other disposition in one transaction
of eighty percent (80%) or more of the outstanding voting stock of the
Company to or with a person, firm or corporation not then an affiliate
of the Company.
5.3.3 The merger or consolidation of the Company in a transaction
not involving an affiliate of the Company in which the shareholders of
the Company receive less than fifty percent (50%) of the outstanding
voting stock of the new continuing corporation.
5.3.4 A bona fide decision by the Company to terminate its
business and liquidate its assets (but only if such liquidation is not
part of a plan to carry on the Company's business through its
shareholders).
For the purpose of this Agreement, the term "affiliate" means a person
firm or corporation that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with the Company.
5.4 Pursuant to and subject to the provisions of Section 4 hereof, the
Company may terminate this Agreement at any time for gross negligence or
non-performance by Employee of any material duties as an executive officer
of the Company which continues thirty (30) days after Company gives
Employee written notice specifying such negligence or non-performance.
5.5 The Company may terminate this Agreement immediately upon the
commission of any theft, fraud, embezzlement or similar crime involving the
commission of any felony, or for a material breach of any obligation of
covenant created by or under this Agreement.
5.6 Employee may terminate this Agreement upon at least thirty (30)
days prior notice to the Company upon the happening of any of the events
described in subsection 5.3 above.
5.7 If this Agreement is terminated by the Company under subsection
5.2, 5.3 or 5.4, or by Employee under subsection 5.6 above, during the Term
hereof, the Company shall pay Employee a Termination Fee equal to
Employee's then current monthly base salary for the
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number of months remaining in the Term.
6. Covenant Not to Compete.
6.1 During the Term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for
a period of twelve (12) months after termination of this Agreement (or, if
later, termination of Employee's employment with the Company or any of its
affiliates), Employee shall not, directly or indirectly, own, manage,
operate, control, be employed by, or participate in the ownership,
management, operation or control of a business that is engaged in the same
business as the Company within any area or at any location constituting,
during the term of Employee's employment and/or at the time Employee's
employment is terminated, a Relevant Area. For the purposes of this Section
6, including all subsections of this Section 6, the business in which the
Company is engaged is that business commonly known as the competitive
access and network services business, and which services the Company
provides, whether or not the Company is authorized to provide and actually
provides such services during the term of Employee's employment
("Services"). The "Relevant Area" shall be defined for the purposes of this
Agreement as any area located within, or within fifty (50) miles of, the
legal boundaries or limits of any city within which the Company or any
parent, subsidiary or affiliate thereof is providing Services, has
commenced the acquisition of any authorizations, rights of way or
facilities or has commenced the construction of facilities for the purpose
of providing Services, or the Company has publicly announced or privately
disclosed in writing to Employee that it plans to provide Services.
6.2 During the Term of this Agreement (or, if longer, during the term
of Employee's employment with the Company or any of its affiliates) and for
a period of twelve (12) months after termination of this Agreement (or, if
later, termination of Employee's employment with the Company or any of its
affiliates), Employee shall not (i) directly or indirectly cause or attempt
to cause any employee of the Company or any of its affiliates to leave the
employ of the Company or any affiliate, (ii) in any way interfere with the
relationship between the Company and any employee or between an affiliate
and any employee of the affiliate, (iii) directly or indirectly hire any
employee of the Company or any affiliate to work for any organization of
which Employee is an officer, director, employee, consultant, independent
contractor or owner of an equity or other financial interest, or (iv)
interfere or attempt to interfere with any transaction in which the Company
or any of its affiliates was involved during the Term of this Agreement or
Employee's employment, which ever is longer.
6.3 Employee agrees that, because of the nature and sensitivity of the
information to which he will be privy and because of the nature and
national and international scope of the Company's business, the
restrictions contained in this Section 6 are fair and reasonable.
7. Confidential Information.
7.1 The relationship between the Company and Employee is one of
confidence and trust. This relationship and the rights granted and duties
imposed by this Section shall
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continue until a date ten (10) years from the date Employee's employment is
terminated.
7.2 As used in this Agreement (i) "Confidential Information" means
information disclosed to or acquired by Employee about the Company's plans,
products, processes and services including the Services and any Relevant
Area, including information relating to research, development, inventions,
manufacturing, purchasing, accounting, engineering, marketing,
merchandising, selling, pricing and tariffed or contractual terms, customer
lists and prospect lists or other market information, with respect to any
of the Company's then current business activities; and (ii) "Inventions"
means any inventions, discoveries, concepts and ideas, whether patentable
or not, including, without limitation, processes, methods, formulas, and
techniques (as well as related improvements and knowledge) that are based
on or related to Confidential Information, that pertain in any manner to
the Company's then currently used technology, expertise or business and
that are made or conceived by Employee, either solely or jointly with
others, and while employed by the Company or within six (6) months
thereafter, whether or not made or conceived during working hours or with
the use of the Company's facilities, materials or personnel.
7.3 Employee agrees that he shall at no time during the term of his
employment or at any time thereafter disclose any Confidential Information
or component thereof to any person, firm or corporation to any extent or
for any reason or purpose or use any Confidential Information or component
thereof for any purpose other than the conduct of the Company's business.
7.4 Any Confidential Information or component thereof that is directly
or indirectly originated, developed or perfected to any degree by Employee
during the term of his employment by the Company shall be and remain the
sole property of the Company and shall be deemed trade secrets of the
Company.
7.5 Upon termination of Employee's employment pursuant to any of the
provisions herein, Employee or his legal representative shall deliver to
the Company all originals and all duplicates and/or copies of all
documents, records, notebooks, and similar repositories of or containing
Confidential Information or subject matter then in his possession, whether
prepared by him or not.
7.6 Employee agrees that the covenants and agreements contained in
this Section 7 are fair and reasonable and that no waiver or modification
of this Section or any covenant or condition set forth herein shall be
valid unless set forth in writing and duly executed by the parties hereto.
Employee agrees to execute such separate and further confidentiality
agreements embodying and enlarging upon the provisions of this Section 7 as
the Company may reasonably request.
8. Injunctive Relief. Upon a material breach or threatened material
breach by Employee of any of the provisions of Sections 6 and 7 of this
Agreement, the Company shall be entitled to an injunction restraining
Employee from such breach. Nothing herein shall be
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construed as prohibiting the Company from pursuing any other remedies for
such breach or threatened breach, including recovery of damages from
Employee.
9. No Waiver. A waiver by the Company of a breach of any provision of
this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent or other breach by Employee.
10. Severability. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought. Accordingly, if any particular provision or
portion of this Agreement shall be adjudicated to be invalid or
unenforceable, this Agreement shall be deemed amended to delete therefrom
the portion thus adjudicated to be invalid or unenforceable, such deletion
to apply only with respect to the operation of such Section in the
particular jurisdiction in which such adjudication is made.
11. Notices. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed
given if mailed by first class mail, postage prepaid, certified or return
receipt requested to the last known address of the recipient.
12. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Colorado.
13. Assignment.The Company may assign its rights and obligations under
this Agreement to any affiliate of the Company or, subject to the
provisions of Section 5.5, to any acquirer of substantially all of the
business of the Company, and all covenants and agreements hereunder shall
inure to the benefit of and be enforceable by or against any such assignee.
Neither this Agreement nor any rights or duties hereunder may be assigned
or delegated by Employee.
14. Amendments. No provision of this Agreement shall be altered,
amended, revoked or waived except by an instrument in writing, signed by
each party to this Agreement.
15. Binding Effect. Except as otherwise provided herein, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective legal representatives, heirs,
successors and assigns.
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16. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
17. Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties and supersedes all prior understandings,
agreements or representations by or between the parties, whether written or
oral, which relate in any way to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Don Teague
/s/Don Teague
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ICG COMMUNICATIONS, INC.
By: /s/J. Shelby Bryan
______________________________________
J. Shelby Bryan
Its: President and Chief Executive Officer
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