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EX. 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 21st day
of January, 2000 by and between XXXXXXXX.XXX LLC (the "Company") having its
principal office in St. Louis, Missouri, and XXXXX XXXXXXXXX, an individual
("Employee").
WHEREAS, Employee desires to be employed by the Company, and the
Company desires to employ Employee, upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the compensation and other benefits
of Employee's employment by the Company and the recitals, mutual covenants and
agreements hereinafter set forth, Employee and the Company agree as follows:
1. Employment Services.
(a) Employee is hereby employed by the Company, and Employee hereby
accepts such employment, upon the terms and conditions hereinafter set forth.
During the Employment Period (as defined below), Employee shall serve as Chief
Executive Officer ("CEO") of the Company.
(b) Employee agrees that, throughout the Employment Period, Employee
shall have such authorities, duties and responsibilities as are customarily
assigned to the CEO of an enterprise like the Company. Such duties,
responsibilities, and authorities shall include, without limitation, but subject
to the authority and directions of the Board of Managers of the Company,
responsibility for the management, operation, strategic direction and overall
conduct of the business of the Company. The Employee shall be assigned no duties
or responsibilities that are materially inconsistent with, or that materially
impair his ability to discharge, the foregoing duties and responsibilities. All
other employees of the Company shall report directly or indirectly to the
Employee and not directly to the Board of Managers or any member. The Employee
may (i) with the consent of the Board of Managers (which shall not be
unreasonably withheld), serve as a director or trustee of other for profit
corporations or businesses which are not in substantial competition with the
Company, (ii) continue to serve as an unpaid consultant and/or advisory director
of World Wide Technology, Inc., (iii) serve on civic or charitable boards or
committees, and (iv) manage personal investments; provided, however, that the
Employee may not engage in any of the activities described in this Section 1(b)
to the extent such activities materially interfere with the performance of
Employee's duties and responsibilities to the Company.
2. Term of Employment. The term of this Employment Agreement (the
"Employment Period") shall commence on January 21, 2000 (the "Effective Date"),
shall end on December 31, 2002 (the "Initial Period"), and shall thereafter
continue from year to year (each an "Annual Extension"), unless sooner
terminated as provided in the second sentence of this Section 2 or in Section 4
hereof. Unless sooner terminated as provided in Section 4 hereof, the Employment
Period may be terminated by either the Company or Employee, at the end of the
Initial Period or an
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Annual Extension, if a written notice of nonrenewal is delivered to the other
party at least six (6) months prior to the end of such Initial Period or Annual
Extension, as the case may be.
3. Compensation and Benefits.
(a) Annual Base Salary. During the Employment Period, the Company
shall pay Employee as compensation for his services an initial annual base
salary of $160,000.00 per year. Employee's annual base salary rate shall be
reviewed at least annually for increase (but in no event decrease) in the
discretion of the Compensation Committee and approved by the Board of Managers,
including at least one Investor Manager. The annual base salary shall be paid to
Employee on the regular pay periods established by the Company.
(b) Bonus. In addition to Employee's base compensation, Employee
shall be eligible to earn a bonus upon achievement of such objectives as may be
established from time to time by the Compensation Committee and approved by the
Board of Managers, including at least one Investor Manager. It is the
expectation that the Employee will be eligible to earn a bonus equal to his base
salary upon achievement of such objectives, with greater bonus payments
available if such objectives are exceeded.
(c) Additional Equity Participation. In addition, Employee shall be
entitled to participate in such equity incentive plan as may be approved from
time to time by the Board of Managers, including at least one Investor Manager.
(d) Diminished Opportunity Payment. In the event that, during the
Employment Period, (A) the members or stockholders of the Company approve the
liquidation, dissolution or winding up of the Company or any sale of all or
substantially all of the assets of the Company (other than in connection with
the conversion of the Company into a corporation), or (B) (i) a Change in
Control as described in Article 11 of the Amended and Restated Operating
Agreement (as in effect on the date hereof) shall occur or (ii) any "person," as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than any member of the Company on
the date hereof, the Company, any subsidiary of the Company, or any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any subsidiary of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 40% or more of the combined voting power
of the Company's then outstanding securities, and, in the case of either clause
(A) or clause (B), the Employee shall be entitled to additional payments if and
to the extent set forth in Section 4.
(e) Life Insurance and other Benefits. The Company, at its sole cost
and expense, shall during the term of this Agreement annually pay all of the
premiums on Employee's $250,000 face value whole life insurance policy with
Connecticut Mutual (Policy Number 6061155). Employee shall pay taxes on the
portion of these premiums which are reported on Employee's Form W-2. Employee
shall be the owner of said life insurance policy. Employee shall not reimburse
the Company for any of said premiums which the Company has prepaid prior to the
termination of Employee's employment hereunder. Employee, within his sole
discretion, may designate the beneficiary or beneficiaries for said policy. The
Company shall also be responsible to
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make life insurance premium payments as required to maintain the current life
insurance policy in full force and effect, which payments are currently $2410.00
per year, on behalf of Employee, pursuant to the terms of the existing split
dollar agreement between Employee and World Wide Technology, Inc. Should
additional insurance be requested by Employee, the payment of additional
premiums by the Company must be approved by the Board of Managers. For so long
as he is employed by the Company, the Company will pay for Employee's personal
vehicle, which Employee can replace every three (3) years. The payments on the
current vehicle are $566.01 per month (expiring in March of 2000). Employee
shall also receive all other standard employee benefits made available to senior
executives of the company.
(f) Benefits. Employee shall be eligible for all of the Company's
benefits, including participation in any pension or option plan(s), so long as
Employee qualifies under the terms of the plan documents. Subsequent to
termination of Employee's employment, Employee shall have the option to continue
in the Company's benefit plans at his sole cost so long as Employee qualifies
under the terms of the plan documents.
(g) Expenses. The Company agrees to reimburse Employee for those
reasonable expenses incurred by Employee as a result of Employee promoting the
business of the Company, including expenses for entertainment, travel and
similar items upon the presentation by Employee of any itemized account of such
expenses in such detail as to meet IRS requirements for the deduction of such
expenses and said expenses must be ordinary an necessary expenses of the Company
paid or incurred in carrying on the Company's trade or business.
4. Termination of Employment. Prior to the expiration of the Employment
Period, this Agreement and Employee's employment may be terminated as follows:
(a) By the Company, if Employee engages in conduct which gives the
Company cause to discharge him. "Cause" shall be defined as fraud,
misrepresentation, theft, embezzlement, or intentional violation of law or the
Company's policies or willful refusal to follow lawful directives of the Board
of Managers, which violation or willful refusal is not remedied within ten (10)
days after receipt of notice thereof from the Company.
(b) Automatically, upon Employee's death or legal incapacity.
(c) By the Company, upon the Employee's incapacity or inability to
perform the services contemplated by this Agreement for a period of at least one
hundred-eighty (180) days in any three hundred-sixty (360) day period because
his physical or mental health shall have become so impaired as to make it
impossible or impractical to perform the duties and responsibilities
contemplated hereunder.
(d) By the Company, if any of the events described in Section 3(d)
hereof occur.
(e) By Employee, if any of the events described in Section 3(d)
hereof shall occur.
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(f) By the Company, upon a majority vote of the Board of Managers.
(g) By the Employee for "Good Reason." "Good Reason" shall be
defined as only one or more of the following: (i) a material diminution of the
Employee's responsibilities or authority which is not cured within ten (10) days
after notice thereof from the Employee to the Company, (ii) a reduction in the
compensation which the Employee is entitled to earn, or (iii) relocation of the
Employee without his consent outside of the St. Louis, Missouri metropolitan
area.
5. Effect of Termination of Employment. Upon termination of Employee's
employment and this Agreement, the rights and obligations of the parties
pursuant to Sections 7 through 14 and Sections 16, 17 and 18 shall be
unaffected, but all other rights and obligations of the parties hereunder shall
cease, except:
(a) If the Agreement is terminated pursuant to Section 4(a), all of
the Employee's rights to receive compensation and benefits under this Agreement
shall terminate as of the date of such termination, except as otherwise mandated
by law, and the Employer shall not be entitled to any bonus with respect to the
year in which termination occurs.
(b) If this agreement is terminated pursuant to Section 4(f) or
4(g), the Company shall continue to pay Employee (or his estate), his Annual
Base Salary at the time of termination described in Section 3(a) of this
Agreement for two (2) years, a prorata bonus under Section 3(b) for the period
through the date of termination, and a bonus under Section 3(b) for the twelve
month period following the termination (collectively, "Severance Pay"). The
Severance Pay shall be paid to Employee (or his estate) on the regular pay
periods established by the Company, but at least on a monthly basis, and shall
be subject to withholding and other applicable taxes. Notwithstanding the terms
of any option plan or any equity awards granted to Employee thereunder, all such
options and equity awards outstanding immediately prior to such termination
shall immediately become exercisable. If Employee has been found to have in any
manner breached Section 7 of this Agreement, then the Company's duty to pay any
Severance Pay to Employee under this Section 5(b) of this Agreement shall
terminate from the date on which it is determined that said breach occurred and
Employee shall immediately reimburse the Company for any Severance Pay payments
made by the Company to Employee after the first date on which said breach
occurred.
(c) If this Agreement is terminated pursuant to Section 4(b) or
4(c), Employee (or his estate) shall receive his annual base salary for the
remainder of the calendar year in which such termination occurs (according to
the same payroll practices in effect at the time of termination) and benefits
(as applicable) for the remainder of the year and six months of the following
year. Notwithstanding the terms of any option plan or any equity awards granted
to Employee thereunder, all such options and equity awards outstanding
immediately prior to such termination shall immediately become exercisable.
(d) If this Agreement is terminated pursuant to Section 4(d),
Employee shall receive Severance Pay as provided in Section 5(a).
Notwithstanding the terms of any option plan or equity award granted to Employee
thereunder, all such options and equity awards outstanding immediately prior to
such termination shall immediately become exercisable.
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(e) If this Agreement is terminated pursuant to Section 4(e), all of
the Employee's rights to receive compensation and benefits under this Agreement
shall terminate as of the date of such termination, except that the Employee
shall be entitled to receive a pro rata bonus through the date of termination
and shall be entitled to receive benefits otherwise mandated by law; provided,
however, that if the Employee continues to provide services under this Agreement
for a period of at least six (6) months following the closing date of an event
described in Section 3(d), and within six(6) months thereafter decides to
terminate his employment, the Employee shall be entitled to receive Severance
Pay.
6. Withholding. All compensation paid to Employee shall be subject to
customary withholding taxes and other employment taxes as required with respect
thereto.
7. Non-Competition and Non-Solicitation Agreement. Employee agrees that
during his employment by the Company and for the period beginning on the date
hereof and ending twenty-four (24) months following expiration or termination of
employment for any reason, Employee will not, as an individual or as a partner,
employee, agent, advisor, consultant or in any other capacity of, or, directly
or indirectly, (i) carry on any business, or own greater than a 10% interest in
any, Internet intensive business that uses the Global Portal Platform or a
company that derives over 50% of its gross revenues or over one hundred million
dollars ($100,000,000.00) from the sale of telecommunications infrastructure
equipment over or through the use of the internet or the world wide web,
anywhere in the United States (the "Territory"), or (ii) solicit or hire, or
engage as a consultant or in any other capacity, any person who was an employee
or officer of the Company at the time of termination of the Employee's
employment, or at any time within six (6) months prior to such termination.
Employee recognizes the broad territorial scope of the covenant above,
but acknowledges and agrees that the restriction is reasonable and enforceable
in view of, among other things, (1) the narrow range of activities prohibited,
(2) the national market in which the Company and its affiliates operate, and (3)
Employee's background, which is such that the restraint will not impose an undue
hardship on Employee.
Employee expressly agrees that the covenant set forth in this Section 7
is reasonable in light of the scope of the business heretofore conducted by the
Company. If any court or tribunal of competent jurisdiction shall refuse to
enforce the foregoing covenant because the time limit applicable thereto is
deemed unreasonable, it is expressly understood and agreed that such covenant
shall not be void, but that for the purpose of such proceedings and in such
jurisdiction, such time limitation shall be deemed reduced to the extent
necessary to permit enforcement of the covenant. If any court or tribunal of
competent jurisdiction shall refuse to enforce the foregoing covenant because it
is more extensive (whether as to geographic area, scope of business or
otherwise) than is deemed reasonable, it is expressly understood and agreed
between the parties hereto that such covenant shall not be void, but that for
the purpose of such proceedings and in such jurisdiction, the restrictions
contained herein (whether as to geographic area, scope of business or otherwise)
shall be deemed reduced to the extent necessary to permit enforcement of the
covenant.
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Employee further acknowledges and agrees that the damages resulting
from any breach of the foregoing covenant may be intangible in whole or in part
and that the Company is entitled to seek specific enforcement, injunctive relief
and other equitable remedies in addition to monetary damages, and Employee
hereby stipulates to the entering of such injunctive relief prohibiting Employee
from competing with the Company in breach of such covenant.
8. Non-Waiver of Rights. The failure of either party to enforce at any
time any of the provisions of this Agreement or to require at any time
performance by the other party of any of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect either the validity
of this Agreement, or any part hereof, or the right of either party thereafter
to enforce each and every provision in accordance with the terms of this
Agreement.
9. Severability and Interpretation. Whenever possible, each provision
of this Agreement and any portion hereof shall be interpreted in such a manner
as to be effective and valid under applicable law, rules and regulations. If any
covenant or other provision of this Agreement (or portion thereof) shall be held
to be invalid, illegal, or incapable of being enforced, by reason of any rule of
law, rule, regulation, administrative order, judicial decision or public policy,
all other conditions and provisions of this Agreement shall, nevertheless,
remain in full force and effect, and no covenant or provision shall be deemed
dependent upon any other covenant or provision (or portion) unless so expressed
herein. The parties hereto desire and consent that the court or other body
making such determination shall, to the extent necessary to avoid any
unenforceability, so reform such covenant or other provision or portions of this
Agreement to the minimum extent necessary so as to render the same enforceable
in accordance with the intent herein expressed.
10. Entire Agreement. This Agreement represents the entire and
integrated Employment Agreement between Employee and the Company and supersedes
all prior negotiations, representations and agreements, either written or oral,
with respect thereto.
11. Notice. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party, by registered or
certified mail, return receipt requested, postage prepaid, or by overnight
courier, addressed to such address as may have been furnished to the other party
in writing. Notices and communications shall be effective at the time they are
given in the foregoing manner (provided that notice by mail shall be deemed
given three business days after posting).
12. Amendments and Waivers. No modification, amendment or waiver of any
of the provisions of this Agreement shall be effective unless in writing
specifically referring hereto, and signed by the parties hereto.
13. Assignments. This Agreement shall be binding upon, and shall inure
to the benefit of the Parties heirs, administrators, executors, successors and
assigns.
14. Arbitration. Except for disputes for which equitable relief is
permitted under this Agreement, any controversy or claim arising out of or
relating to this Agreement, the employment relationship or any breach thereof
between the Company and Employee and any of their agents, employees and
affiliated companies shall be settled by arbitration in accordance with
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the rules of the America Arbitration Association and judgment upon the award may
be entered in any court having jurisdiction.
15. Headings. Section headings are provided in this Agreement for
convenience only and shall not be deemed to substantively alter the content of
such sections.
16. Indemnification. To the fullest extent permitted by the
indemnification provisions of the operating agreement of the Company in effect
as of the date of this Agreement (collectively, the "Indemnification
Provision"), and in each case subject to the conditions thereof, the Company
shall (i) indemnify the Employee, as an officer or director of the Company if
the Employee shall be serving in such capacity at the Company's written request,
against all liabilities and reasonable expenses that may be incurred by the
Employee in any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and whether formal or
informal, because the Employee is or was an officer or director of the Company
and (ii) pay for or reimburse the reasonable expenses incurred by the Employee
in the defense of any proceeding to which the Employee is a party because the
Employee is or was an officer or director of the Company. The rights of the
Employee under the Indemnification Provision shall survive the termination of
the employment of the Employee by the Company.
17. Non-Disclosure Agreement. Employee shall execute the non-disclosure
agreement attached as Exhibit B.
18. Termination and Release. The Employee acknowledges that the
Employment Agreement dated June 12, 1996, between the Employee and World Wide
Technology, Inc. is terminated as of the date hereof, and that the Employee has
no further rights thereunder.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
/s/ Xxxxx X. Xxxxxxxxx
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XXXXX X. XXXXXXXXX
XXXXXXXX.XXX LLC
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Member of xxxxxxxx.xxx LLC and Chief
Executive Officer of World Wide Technology
Inc., Majority Member of xxxxxxxx.xxx LLC.
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