EXHIBIT 4.2
Employment Agreement of Dan Potter
EMPLOYMENT AGREEMENT
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This Employment Agreement, ("Agreement"), effective February 5th, 2004 (the
"Effective Date"), is between Dan A. Potter ("Employee") and USURF America, Inc.
("Employer"). In consideration of the mutual covenants contained herein,
Employee and Employer agree as follows:
1. Employment. Employee has certain management skills and expertise related
to the telecommunications industry, which Employer desires to utilize in its
telecommunications operations. Therefore, Employee agrees to render services to
Employer, pursuant to Section 2 and for the period described in Section 3(a),
subject to the terms and conditions set forth herein.
2. Responsibilities of Employee. During the term of this Agreement,
Employee agrees to provide such services (the "Services") as directed by
Employer's Board of Directors.
3. Term.
a. Term. The period of Employee's service under this Agreement shall
commence on the Effective Date and shall terminate one (1) year later, unless
this Agreement is terminated earlier pursuant to Section 3(b) ("Term").
b. Termination. This Agreement may be terminated by Employer without
notice if Employee (1) commits any act of gross misconduct or in any way
breaches his obligations under this Agreement; (2) engages in any misconduct
which, in the opinion of Employer, brings him, Employer, or any affiliated
entity into disrepute; (3) is convicted of any felony or any criminal offense
involving theft or financial impropriety; or (4) commits any act of dishonesty
relating to Employer, any affiliated entity, or any of Employer's employees or
agents. Employer shall not terminate this Agreement for any other reasons than
those specified in this Section 3b. Notwithstanding any other provisions of this
Agreement, including those contained in this sub-section 3b, Employee shall not
be required to refund or forfeit any of the compensation provided in Section 4
(a).
4. Compensation. As compensation for the Services rendered by Employee
under this Agreement, and as an inducement material to entering into employment
with Employer, Employee shall receive the following:
a. 1,514,500 shares of USURF America, Inc. common stock, which shares
shall be represented by a single stock certificate and issued by February 27,
2004. The Shares to be issued hereunder, when issued and delivered in accordance
with this Agreement, will be duly and validly issued, fully paid and
non-assessable, and will be free and clear of any liens or encumbrances. Such
Shares shall be issued pursuant to an effective Form S-8 registration statement
files with the U.S. Securities and Exchange Commission and, when issued, the
Shares shall be free of restriction and freely tradable;
b. 1,514,500 common stock purchase warrants (the "Warrants"), in the
form attached hereto as Exhibit A, to purchase a like number of shares of the
Employer's common stock under the terms and conditions set forth in the Warrant;
c. Local and long-distance telephone service ("On Net") and other
services such as DSL internet and cable television, if and when they become
available On-Net, for Employee, Brent Hawker & Co., Paul Thompson, and Mary
Fortey. All such long-distance telephone services shall be limited to a maximum
of $50.00 per month per party served.
d. Employer will take all steps reasonably necessary to assist
Employee in maintaining the medical insurance coverage provided to him, as of
the Effective Date, through the plan offered by the Personnel Department (the
"Plan"). Employer will not knowingly take any action which may reasonably be
expected to cause a termination of such insurance coverage. Notwithstanding the
foregoing, Employee acknowledges that Employer has no influence or control over
the policies and criteria utilized, or decisions made, by The Personnel
Department regarding the qualification of any person to obtain or maintain
insurance coverage under the Plan. Employer can give no assurances regarding
Employee's continued coverage under the Plan after the Effective Date.
e. Employee may receive such other compensation as mutually agreed to
by Employer and Employee.
5. Employee Status. Employer shall have control over the details and means
of Employee's performance of the Services. This agreement creates an
employer-employee relationship between Employer and Employee.
a. Time and Effort. During the Term of this Agreement, Employee's
shall devote such time and effort as may reasonably be required from
time-to-time to perform the duties under this Agreement as may be requested by
Employer.
b. Expenses. Employer will not be required to reimburse Employee for
any expenses incurred by Employee in rendering the Services under this
Agreement, except to the extent agreed upon by Employer in advance and in
writing.
6. Dispute Resolution. If any dispute arises out of or relates to this
Agreement, or the breach thereof, and if such dispute cannot be settled by the
parties through negotiation, the parties agree to try in good faith to settle
the dispute by mediation. If the dispute cannot be settled by negotiation or
mediation, the dispute shall be settled by final and binding arbitration in
Colorado Springs, Colorado, pursuant to the Commercial Arbitration Rules of the
American Arbitration Association.
7. Notices. Any notice, request, instruction, correspondence or other
document to be given hereunder by either party to the other (collectively called
"Notice") shall be in writing and delivered in person or by courier service
requiring acknowledgment of receipt of delivery or mailed by certified mail,
postage prepaid and return receipt requested, or by telecopier, as follows:
If to Employee, addressed to:
Dan A. Potter
6189 Lehman Drive
Colorado Springs, CIO. 80918
Fax: (719) 592-0836
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If to Employer, addressed to:
USURF America, Inc.
Attention: Ken Upcraft
6005 Delmonico Dr., Suite 140
Colorado Springs, CO 80919
Fax: (719) 260-6456
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. Any party may change any address
to which notice is to be given to it by giving notice as provided above of such
change of address.
8. Entire Agreement: Amendments and Waivers. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein. No supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. The failure of a
party to exercise any right or remedy shall not be deemed or constitute a waiver
of such right or remedy in the future. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
9. Binding Effect and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective permitted successors
and assigns; but neither this Agreement nor any of the rights, benefits or
obligations hereunder shall be assigned, by operation of law or otherwise, by
any party without the prior written consent of the other party; provided,
however, that Employer may assign its rights and obligation under this Agreement
to any of its affiliated companies, without Employee's prior consent.
10. Severability. If any provision of the Agreement is rendered or declared
illegal or unenforceable by reason of any existing or subsequently enacted
legislation or by decree of a court of last resort, Employer and Employee shall
promptly meet and negotiate substitute provisions for those rendered or declared
illegal or unenforceable, but all of the remaining provisions of this Agreement
shall remain in full force and effect.
11. Nondisclosure of Confidential Information.
a. Employee agrees not to make any unauthorized use, publication, or
disclosure, during or subsequent to Employee's service to the Employer, of any
confidential or proprietary information generated or acquired by Employee during
the course of Employee's service, except to the extent that the disclosure of
the information is necessary to fulfill Employee's responsibilities in its
service to the Employer.
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b. Employee understands that "confidential" and/or "proprietary"
information includes information not generally known by or available to the
public, pertaining or belonging to Employer, the Employer's clients or other
entities which Employer may have an obligation to maintain information in
confidence, and that authorization for public disclosure may be obtained only
through Employer's written consent.
c. Employee understands and agrees that the information protected by
this Agreement includes, but is not limited to, information regarding ideas,
discoveries, designs, inventions, improvements, trade secrets, know-how,
manufacturing processes, product formulae, design specifications, writings and
other works of authorship, computer programs, financial figures, marketing
plans, vendor lists and data, customer lists and data, business plans or methods
and the like, which relate in any manner to the actual or anticipated business
of the Employer, or related to its actual or anticipated areas of research and
development.
d. Employee agrees to deliver to Employer, at the request of the
Employer, or at the termination of Employee's service, all correspondence,
memoranda, notes, records, drawings, sketches, plans, customer lists, computer
programs, computer software and data, programming documents and all copies
thereof made, composed or received by Employee, during the term of the
Employee's service.
e. In the event of a breach or attempted breach of the provisions of
this Section 12 by Employee, it is understood and agreed that, notwithstanding
the provisions of Section 7 above, Employer shall be entitled to injunctive
relief, as well as any other applicable remedy at law or in equity. Employee
expressly agrees and acknowledges that this Agreement is reasonable and
necessary for the protection of the business of Employer.
12. Headings. The headings of the sections herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
13. Governing Law. The provisions of this Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Colorado.
14. Execution. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which shall constitute one
instrument.
[Signatures on next page]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above to be effective as of such date.
EMPLOYEE USURF AMERICA, INC.
_______________________________ By: ________________________________
DAN A. POTTER
____________________________________
Printed Name
____________________________________
Title
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Exhibit A
Common Stock Warrant
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE, AS WELL AS THE SECURITIES INTO
WHICH THESE SECURITIES MAY BE CONVERTED, HAVE BEEN ISSUED IN RELIANCE UPON THE
EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(6) OF THE SECURITIES ACT OF
1933, AS AMENDED. THESE SECURITIES MAY NOT BE TRANSFERRED WITHOUT REGISTRATION,
EXCEPT IN A TRANSACTION EXEMPT FROM REGISTRATION.
USURF America, Inc.
(Incorporated Under the Laws of the State of Nevada)
____________ COMMON STOCK PURCHASE WARRANTS
(EACH WARRANT ENTITLES THE HOLDER TO PURCHASE ONE COMMON SHARE)
INITIAL WARRANT EXERCISE PRICE $0.25
THIS CERTIFIES THAT, for value received, ___________________ (the "Holder"), as
registered owner of this Common Stock Purchase Warrant (a "Warrant" or the
"Warrants"), is entitled at any time or from time to time after issuance hereof
at or before 5:00 p.m., Central Time, on the date that is one year from the date
hereof (the "Expiration Date"), to subscribe for, purchase and receive the above
specified, fully-paid and non-assessable shares of $.0001 par value common stock
(the "Common Shares") of USURF America, Inc., a Nevada corporation (the
"Company"), at the purchase price of $0.25 per share (the "Exercise Price"),
upon presentation and surrender of this Warrant and payment of the Exercise
Price for such Common Shares of the Company at the principal office of the
Company, but only subject to the conditions set forth herein. The Exercise Price
and the number of Common Shares purchasable upon exercise of each Warrant are
subject to adjustments upon the occurrence of certain events described herein.
Upon due presentment for transfer of this Warrant at the principal office of the
Company, a new Warrant of like tenor and evidencing, in the aggregate, a like
number of Warrants, subject to any adjustments made in accordance with the
provisions hereof, shall be issued to the transferee in exchange for this
Warrant, subject to the limitations provided herein, upon payment of any tax or
governmental charge imposed in connection with such transfer.
The holder of the Warrants evidenced hereby may exercise all or any whole number
of such Warrants during the period and in the manner stated herein. The Exercise
Price payable in lawful money of the United States of America and in cash or by
certified or bank cashier's check or bank draft payable to the order of the
Company. If, upon exercise of any Warrants evidenced hereby, the number of
Warrants exercised shall be less than the total number of Warrants so evidenced,
there shall be issued to the Warrant holder a new Warrant evidencing the number
of Warrants not so exercised. No Warrant may be exercised after 5:00 p.m.,
Central Time, on the Expiration Date and any Warrant not exercised by such time
shall become void, unless extended by the Company. The Company covenants that it
will, at all times, reserve and have available from its authorized shares of
Common Stock such number of shares of Common Stock as shall then be issuable on
exercise of all outstanding Warrants. The Company covenants that all Warrant
Shares, when issued, shall be duly and validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof.
At any time prior to ninety (90) days after the registration of the common
stock under the Securities Act of 1933, the Holder may request recertification
of the Warrant to additional parties (each a "Holder") on the same terms and
conditions as set forth in this Certificate, provided that the Company has the
right to refuse this request if it reasonably determines that the requested
redistribution would not comply with state or federal securities laws.
Adjustment of Exercise Price and Shares
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In the event, prior to the expiration of the Warrants by exercise or by their
terms, the Company shall issue any of its Common Stock as a stock dividend or
shall subdivide the number of outstanding shares of Common Stock into a greater
number of shares, then, in either of such events, the Exercise Price in effect
at the time of such action shall be reduced proportionately and the number of
shares of Common Stock purchasable pursuant to the Warrants shall be increased
proportionately. Conversely, in the event the Company shall reduce the number of
its outstanding shares of Common Stock by combining such shares into a smaller
number of shares, then, in such event, the Exercise Price in effect at the time
of such action shall be increased proportionately and the number of shares of
Common Stock at that time purchasable pursuant to the Warrants shall be
decreased proportionately. Such stock dividend paid or distributed on the Common
Stock in shares of any other class of the Company or securities convertible into
shares of Common Stock shall be treated as a dividend paid or distributed in
shares of Common Stock to the extent shares of Common Stock are issuable on the
payment or conversion thereof.
In the event, prior to the expiration of the Warrants by exercise or by their
terms, the Company shall be recapitalized by reclassifying its outstanding
shares of Common Stock into shares with a different par value, or by changing
its outstanding Common Stock to shares without par value or in the event of any
other material change of the capital structure of the Company or of any
successor corporation by reason of any reclassification, recapitalization or
conveyance, prompt, proportionate, equitable, lawful and adequate provision
shall be made whereby any holder of the Warrants shall thereafter have the right
to purchase, on the basis and the terms and conditions specified in this
Agreement, in lieu of the shares of Common Stock of the Company theretofore
purchasable on the exercise of any Warrant, such securities or assets as may be
issued or payable with respect to, or in exchange for, the number of shares of
Common Stock of the Company theretofore purchasable on exercise of the Warrants
had such reclassification, recapitalization or conveyance not taken place; and,
in any such event, the rights of any holder of a Warrant to any adjustment in
the number of shares of Common Stock purchasable on exercise of such Warrant, as
set forth above, shall continue and be preserved in respect of any stock,
securities or assets which the holder becomes entitled to purchase; provided,
however, that a merger, acquisition of a going business or a portion thereof
(whether for cash, stock, notes, other securities, or a combination of cash and
securities), exchange of stock for stock, exchange of stock for assets, or like
transaction involving the Company, in which the Company is the surviving entity,
will not be considered a "material change" for purposes of this paragraph, and
no adjustment shall be made hereunder by reason of any such merger, acquisition,
exchange of stock for stock, exchange of stock for assets, or like transaction.
In the event the Company, at any time while the Warrants shall remain unexpired
and unexercised, shall sell all or substantially all of its property, or
dissolves, liquidates or winds up its affairs, prompt, proportionate, equitable,
lawful and adequate provision shall be made as part of the terms of such sale,
dissolution, liquidation or winding up such that the holder of a Warrant may
thereafter receive, on exercise of such Warrant, in lieu of each share of Common
Stock of the Company which such holder would have been entitled to receive upon
exercise of such Warrant, the same kind and amount of any stock, securities or
assets as may be issuable, distributable or payable on any such sale,
dissolution, liquidation or winding up with respect to each share of Common
Stock of the Company; provided, however, that, in the event of any such sale,
dissolution, liquidation or winding up, the right to exercise the Warrants shall
terminate on a date fixed by the Company, such date to be not earlier than 5:00
p.m., Central Time, on the 30th day next succeeding the date on which notice of
such termination of the right to exercise the Warrants has been given by mail to
the holders thereof at such addresses as may appear on the books of the Company.
In the event, prior to the expiration of the Warrants by exercise or by their
terms, the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to purchase shares of its Common Stock at a price
per share more than 10% below the then-current market price per share (as
defined below) of its Common Stock at the date of taking such record, then (i)
the number of shares of Common Stock purchasable pursuant to the Warrants shall
be determined as follows: the number of shares of Common Stock purchasable
pursuant to a Warrant immediately prior to such adjustment (taking into account
fractional interests to the nearest 1,000th of a share) shall be multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
of the Company then outstanding (excluding the Common Stock then owned by the
Company) immediately prior to the taking of such record, plus the number of
additional shares offered for purchase, and the denominator of which shall be
the number of shares of Common Stock of the Company outstanding (excluding the
Common Stock owned by the Company) immediately prior to the taking of such
record, plus the number of shares which the aggregate offering price of the
total number of additional shares so offered would purchase at such current
market price; and (ii) the Exercise Price per share of Common Stock purchasable
pursuant to a Warrant shall be determined as follows: the Exercise Price in
effect immediately prior to the taking of such record shall be multiplied by a
fraction, the numerator of which is the number of shares of Common Stock
purchasable immediately prior to the taking of such record, and the denominator
of which is the number of shares of Common Stock purchasable immediately after
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the taking of such record as determined pursuant to clause (i) above. For the
purpose hereof, the current market price per share of Common Stock of the
Company at any date shall be deemed to be the average of the closing prices, as
reported by the American Stock Exchange, for 20 consecutive business days
commencing 15 business days prior to the record date.
On exercise of the Warrants by the Holder, the Company shall not be required to
deliver fractions of shares of Common Stock; provided, however, that prompt,
proportionate, equitable, lawful and adequate adjustment in the Exercise Price
payable shall be made in respect of any such fraction of one share of Common
Stock on the basis of the Exercise Price per share.
In the event, prior to expiration of the Warrants by exercise or by their terms,
the Company shall determine to take a record of the holders of its Common Stock
for the purpose of determining shareholders entitled to receive any stock
dividend, distribution or other right which will cause any change or adjustment
in the number, amount, price or nature of the Common Stock or other stock,
securities or assets deliverable on exercise of the Warrants pursuant to the
foregoing provisions, the Company shall give to the Registered Holder of the
Warrants at the addresses as may appear on the books of the Company at least 15
days' prior written notice to the effect that it intends to take such a record.
Such notice shall specify the date as of which such record is to be taken; the
purpose for which such record is to be taken; and the number, amount, price and
nature of the Common Stock or other stock, securities or assets which will be
deliverable on exercise of the Warrants after the action for which such record
will be taken has been completed. Without limiting the obligation of the Company
to provide notice to the Registered Holder of the Warrant Certificate of any
corporate action hereunder, the failure of the Company to give notice shall not
invalidate such corporate action of the Company.
The Warrant shall not entitle the Holder to any of the rights of shareholders or
to any dividend declared on the Common Stock, unless the Warrant is exercised
and the Warrant Shares purchased prior to the record date fixed by the Board of
Directors of the Company for the determination of holders of Common Stock
entitled to such dividend or other right.
No adjustment of the Exercise Price shall be made as a result of, or in
connection with, (i) the establishment of one or more employee stock option
plans for employees of the Company, or the modification, renewal or extension of
any such plan, or the issuance of Common Stock on exercise of any options
pursuant to any such plan, (ii) the issuance of individual warrants or options
to purchase Common Stock, the issuance of Common Stock upon exercise of such
warrants or options, or the issuance of Common Stock in connection with
compensation arrangements for directors, officers, employees, consultants or
agents of the Company or any Subsidiary, and the like, or (iii) the issuance of
Common Stock in connection with a merger, acquisition of a going business or a
portion thereof (whether for cash, stock, notes, other securities, or a
combination of thereof), exchange of stock for stock, exchange of stock far
assets, or a like transaction.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
President and its Executive Vice President.
Dated: ______________, 2004
USURF America, Inc.
By: _____________________________
Douglas O. McKinnon
President and CEO
By: _____________________________
Kenneth J. Upcraft
Executive Vice President
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