EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated as of January 1,
1999 (the "Effective Date") by and between InterPacket Group, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇, an individual ("Executive"),
relating to the exclusive professional services of Executive.
WHEREAS, the Company desires to obtain the continued professional
services of Executive; and
WHEREAS, Executive desires to continue to provide such services to the
Company upon the following terms and conditions;
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the parties agree as follows:
1. TERM. The Company hereby employs Executive in the position and with
the duties and responsibilities described in Paragraph 2 for the period
commencing on the Effective Date and ending December 31, 2001 (the "Term"). The
Term shall be extended by an additional period of one (1) year unless either
party shall give written notice to the other of its intent to terminate the
Agreement not less than thirty (30) days prior to the expiration of the Term. If
the Term is so extended, all references to "the Term" in this Agreement shall be
deemed to include such extension thereof.
2. POSITION, DUTIES, RESPONSIBILITIES. The Company hereby agrees to
employ Executive, and Executive agrees to serve, as Executive Vice President -
Sales and Marketing of the Company during the Term, provided that the Company
may change Executive's title during the term to another executive vice president
level title relating to sales and/or marketing. Subject to the terms hereof,
Executive shall serve on an exclusive and full time basis at the Company's
principal place of business in Santa Monica, California or such other place as
the Company may from time to time determine. Executive shall devote her best
efforts and attention to the performance of her duties.
3. COMPENSATION. Executive shall be paid the following compensation
while employed by the Company pursuant to this Agreement:
3.1 SALARY. The Company agrees to pay or cause to be paid
to Executive a base salary at the annual rate of no less than Two hundred
forty thousand ($240,000) per year during the Term ("Base Salary"). Base
Salary shall be paid in accordance with the Company's payroll policy as in
effect from time to time. Base Salary shall be subject to increase in
accordance with Attachment A, and Executive shall be paid a bonus/commission
in accordance with Attachment A.
3.2 BENEFITS; STOCK OPTIONS. Executive shall be entitled to
medical and all other benefits made available generally to executives of the
Company. Executive shall also be entitled to participate in the Company's stock
option plans (the "Option Plans") as determined by the Board of Directors or any
committee thereof, in its discretion.
3.3 TRAVEL AND OTHER EXPENSES. The Company shall reimburse
Executive for reasonable and ordinary expenses relating to the performance of
her duties hereunder including without limitation all travel, accommodation,
meals, entertainment and other necessary business expenses. Such expenses shall
be supported by reasonable documentation and shall be subject to reasonable
audit by the Company.
3.4 VACATION. Executive shall be entitled to four (4) weeks of
vacation for each calendar year during which Executive is employed by the
Company. Executive shall also be entitled to all paid Company holidays. If
Executive ceases to be employed during any calendar year, the total number of
vacation days accruing shall be prorated based on the number of months, or
portion thereof, that Executive was employed by the Company. Such vacation time
shall accrue and cumulate to the extent not actually taken by Executive until
Executive is entitled to eight (8) weeks of accrued vacation. Executive shall be
entitled to customary flexibility in using such vacation time without strict
regard to the actual accrual of vacation.
3.5 BONUS. The Board of Directors, or a committee thereof, may
consider the payment of a cash bonus to Executive based on the Company's
performance and such other incentives or bonuses as the Board of Directors, or
such committee, may in its discretion determine to award.
3.6 INDEMNIFICATION. The Company shall indemnify Executive
pursuant to a separate Indemnification Agreement, such indemnification to
survive the termination of this Agreement and be effective until the expiration
of all statutes of limitations applicable to any and all Proceedings (as defined
in the Indemnification Agreement).
4. [intentionally omitted]
5. TERMINATION OF EMPLOYMENT; COMPENSATION DUE.
5.1 DEATH.
5.1.1 TERMINATION. Other than the obligations
contained in Section 5.1.2 hereof, this Agreement shall terminate automatically
upon the death of Executive.
5.1.2 COMPENSATION. Following the death of
Executive, the Company shall pay to Executive's beneficiary or estate, as
instructed by Executive in writing on file with
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the Company, or if no one has been so designated, to her estate, (i) the
Annual Salary to which Executive is entitled through the date of termination,
(ii) all accrued but unused vacation pay, and (iii) the pro rata portion of
Executive's annual minimum guaranteed bonus based upon the number of expired
months (calculated using the last day of the month in which her death or,
with respect to Sections 5.2.2 and 5.3.1(b), the termination of her
employment occurs) in the calendar year in which her death or termination
occurs (the sum of (i), and (ii) and (iii) hereunder being referred to as
"Accrued Compensation"). Following the death of Executive, the Company shall
make any payments required under any death benefit policy, benefit plan or
then existing life insurance policy maintained by the Company to the
beneficiary thereof. Thereafter, the Company's obligations hereunder shall
terminate.
5.2 DISABILITY.
5.2.1 TERMINATION. Should Executive be prevented
from properly performing Executive's duties hereunder by reason of any physical
or mental incapacity for a period of more than 180 days in the aggregate during
any twelve (12) month period, then, to the extent permitted by law, at the
Company's discretion, the Company may terminate its obligations hereunder except
for (i) any Accrued Compensation through the date of such termination, and (ii)
any rights Executive may have under any disability plan in which Executive is a
participant.
5.2.2 COMPENSATION. During any period that
Executive is disabled under this Agreement, but terminating upon any termination
of this Agreement pursuant to Section 5.2.1, Executive shall continue to receive
an amount equal to her Annual Salary minus any compensation received by
Executive under any disability insurance policy the premiums for which have been
paid by the Company. Following the termination of Executive's employment under
Section 5.2.1, the Company shall pay Executive an amount equal to her Accrued
Compensation through the date on which her employment is terminated, and the
Company shall have no further obligations to Executive under this Agreement.
5.3 BY THE COMPANY.
5.3.1 FOR CAUSE. (a) The Company may terminate,
without liability, this Agreement For Cause (as defined in this paragraph), at
any time upon written notice to Executive. "Cause" is defined as (i) the breach
by Executive of any material term of this Agreement, provided such breach, if
capable of a cure, is not cured within thirty (30) days after Executive received
written notice of such breach and demand for a cure by the Company, which notice
identifies such breach with particularity, (ii) the engaging by Executive in
conduct adverse to the Company or materially inconsistent with her duties and
responsibilities under Section 2 above and the failure to cease such conduct and
rectify any harm to the Company within thirty (30) days after written demand
therefor by the Company identifying with reasonable particularity such conduct
and harm or (iii) the conviction (by trial or upon a plea) of Executive of a
misdemeanor involving moral turpitude or a felony.
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(b) In the event the Company terminates Executive For Cause,
the Company shall pay Executive an amount equal to her Accrued Compensation
through the date on which her employment is terminated, and the Company shall
have no further obligations to Executive under this Agreement.
5.3.2 WITHOUT CAUSE. If the Company terminates
Executive for any reason other than due to her death, disability (as determined
pursuant to Section 5.2.1) or as a result of those reasons listed in Section
5.3.1 hereof ("Without Cause"), the Company shall (i) continue to pay Executive
her Annual Salary, (ii) pay to Executive, pursuant to Section 3.5 hereof, the
greater of (A) her minimum guaranteed bonus, (B) her actual bonus paid during
the preceding year, and (C) the average of the actual bonuses paid during the
two preceding years, and (iii) continue to provide the health and other benefits
described in Sections 3.2 and 3.4 hereof (clauses (i), (ii) and (iii) hereof
collectively, "Termination Without Cause Obligations"); the Termination Without
Cause Obligations shall be provided for a period of time equal to the greater of
(i) the remainder of the unexpired Term calculated as if no premature
termination of this Agreement had occurred, or (ii) if the Term has less than
one year remaining at the time of such termination, such remaining amount of
time plus twelve months. In addition, at the time of any termination Without
Cause, all of Executive's outstanding options granted pursuant to any of the
Option Plans shall immediately vest and the time period during which such
options may be exercised shall be extended for two (2) years.
5.4 BY EXECUTIVE.
5.4.1 FOR GOOD REASON. Executive may terminate,
without liability, this Agreement "For Good Reason" if (i) the Company breaches
any material term of this Agreement, provided that, if such breach is capable of
cure, such breach continues for a period of thirty (30) days after the Company
receives written notice of such breach by Executive identifying such breach with
particularity or (ii) if the Company assigns to Executive duties and
responsibilities substantially inconsistent with the duties and responsibilities
described in Section 2 of this Agreement, or (iii) upon a Change in Control (as
defined below), provided that any change in Executive's title in accordance with
Section 2 shall not constitute an event giving rise to the right of Executive to
terminate this Agreement For Good Reason hereunder.
A "Change in Control" means the happening of any of
the following: (i) when any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act"), 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 fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities, or (ii) the occurrence of a transaction requiring
shareholder approval and involving the sale of all or substantially all of the
assets of the Company or the merger of the Company with or into another
corporation in which (A) the Company is not the surviving corporation, or (B)
the shareholders of the Company
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immediately prior to such merger are the owners of less than fifty percent
(50%) of the combined voting power of the Company and such other corporation
immediately after such merger, or (iii) the election of the Board of
Directors in any special or annual election or shareholders' consent where
the incumbent directors immediately prior to such election or consent do not
constitute a majority of the Board of Directors immediately after such
election, provided that in no event shall the initial public offering of the
Company's securities constitute a Change in Control for purposes of this
Agreement.
In the event Executive terminates this Agreement For
Good Reason, the Company shall fulfill the obligations set forth in Section
5.3.2 hereof and all of Executive's outstanding options granted pursuant to any
of the Option Plans shall immediately vest and the time period during which such
options may be exercised shall be extended for two (2) years.
6. EXECUTIVE COVENANTS.
6.1 CONFIDENTIALITY. Executive acknowledges that in her
employment hereunder she will occupy a position of trust and confidence.
Executive shall not, except as may be required to perform her duties hereunder
or as required by applicable law, for a period of one (1) year following the
termination of this Agreement or until such information shall have become public
other than by Executive's unauthorized disclosure, disclose to others or use,
whether directly or indirectly, any Confidential Information regarding the
Company, its subsidiaries and affiliates. "Confidential Information" shall mean
information about the Company, its subsidiaries and affiliates, and their
respective clients and customers and that was learned by Executive in the course
of her employment by the Company, its subsidiaries and affiliates, including
without limitation any proprietary knowledge, trade secrets, data, formulae,
information and client and customer lists and all papers, resumes, and records
(including computer records) of the documents containing such Confidential
Information. Executive acknowledges that such Confidential Information is
specialized, unique in nature and of great value to the Company, its
subsidiaries and affiliates, and that such information gives the Company a
competitive advantage. Executive agrees to deliver or return to the Company, at
the Company's request at any time or upon termination or expiration of her
employment or as soon thereafter as possible, (i) all documents, computer tapes
and disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by the Company, its subsidiaries and
affiliates, or prepared by Executive during the term of her employment with the
Company, its subsidiaries and affiliates, and (ii) all notebooks and other data
relating to research or experiments or other work conducted by Executive in the
scope of her employment.
6.2 NON-COMPETITION. During the Term, Executive shall not,
directly or indirectly, without the prior written consent of the Company,
provide consultative services or otherwise provide services to (whether as an
employee or a consultant, with or without pay), own, manage, operate, join,
control, participate in, or be connected with (as a stockholder, partner or
otherwise), any business, individual, partner, firm, corporation, or other
entity that
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is then a competitor of the Company, its subsidiaries or affiliates (each
such competitor a "Competitor of the Company"); provided that nothing herein
shall prevent Executive from the beneficial ownership of up to 5% of the
publicly traded securities of any person who may be deemed to be a Competitor
of the Company, and provided, further, that if the Company terminates the
Employee's employment hereunder Without Cause or the Employee terminates her
employment For Good Reason prior to the expiration of the term of this
Agreement, the provisions of this Section 6.2 shall not apply from and after
the date of such termination of employment.
6.3 NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS. During the
Term and for a period of [six (6) months] thereafter, Executive shall not,
directly or indirectly, influence or attempt to influence customers or suppliers
of the Company, or any of its subsidiaries or affiliates, or to divert their
business to any Competitor of the Company, provided that if the Company
terminates Executive's employment hereunder Without Cause or Executive
terminates her employment For Good Reason prior to the expiration of the term of
this Agreement, the provisions of this Section 6.3 shall not apply from and
after the date of such termination of employment.
6.4 NON-SOLICITATION OF EMPLOYEES. Executive recognizes that
she possesses and will possess confidential information about other employees of
the Company, its subsidiaries and affiliates, relating to their education,
experience, skills, abilities, compensation and benefits, and interpersonal
relationships with customers of the Company, its subsidiaries and affiliates.
Executive recognizes that the information she possesses and will possess about
these other employees is not generally known, is of substantial value to the
Company, it subsidiaries and affiliates in developing their business and in
securing and retaining customers, and has been and will be acquired by him
because of her business position with the Company, its subsidiaries and
affiliates. Executive agrees that, during the term of this Agreement and for a
period of [six (6) months] thereafter, she will not, directly or indirectly,
solicit or recruit any employee of the Company, its subsidiaries and affiliates
for the purpose of being employed by him or by any Competitor of the Company on
whose behalf she is acting as an agent, representative or employee and that she
will not convey any such Confidential Information or trade secrets about other
employees of the Company, its subsidiaries and affiliates to any other person,
provided that it the Company terminates Executive's employment hereunder Without
Cause or Executive terminates her employment For Good Reason prior to expiration
of the term of this Agreement, the provisions of this Section 6.4 shall not
apply from and after the date of such termination of employment.
6.5 INJUNCTIVE RELIEF. It is expressly agreed that the
Company will or would suffer irreparable injury if Executive were to disclose
Confidential Information, compete with the Company or solicit customers,
suppliers or employees of the Company in violation of this Section 6, that
money damages would be insufficient to compensate the Company and that the
Company would by reason of such competition or disclosure be entitled to
injunctive relief in a court of appropriate jurisdiction.
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6.6 SURVIVAL OF PROVISIONS. Except as expressly provided
otherwise herein, the obligations contained in this Section 6 shall survive the
termination or expiration of Executive's employment with the Company and shall
be fully enforceable thereafter. If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 6 is excessive in
duration or scope or is unreasonable or unenforceable under the laws of that
state, it is the intention of the parties that such restriction may be modified
or amended by the court to render it enforceable to the maximum extent permitted
by the law of that state.
7. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned without
the written consent of the non-assigning party, provided that Executive's rights
to payments hereunder shall, upon her death, inure to the benefit of Executive's
personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees.
8. NOTICES. All notices hereunder shall be in writing and shall be
either served by certified or registered mail, air courier, by hand, or by
facsimile, in each case with charges prepaid. Notices shall be deemed effective
when mailed, hand delivered, or faxed. Notices to Executive shall be given at
the address set forth in the records of the Company for Executive, with a copy
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, c/o Wolf, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Notices to the Company shall be addressed to
its principal place of business, currently ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇., ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax No. (▇▇▇) ▇▇▇-▇▇▇▇, Attn: General
Counsel, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Fax No. (▇▇▇) ▇▇▇-▇▇▇▇.
This notice provision may be changed with respect to any party by such party
notifying the other of such change in accordance with the provisions of this
Section.
9. PLACE OF PERFORMANCE. Executive agrees to render her services away
from the Company's principal place of business from time to time in the ordinary
course of business, as the proper performance of her duties may require.
10. EQUITABLE REMEDIES. Executive and the Company agree that the
services to be rendered by Executive pursuant to this Agreement are of a
special, unique and extraordinary character which gives them a peculiar value,
the loss of which may not be reasonably or adequately compensated in damages in
any action at law, and that a breach by Executive of any of the terms of this
Agreement may cause the Company great and irreparable injury and damage.
Executive expressly agrees that the Company may apply for the remedies of
injunction, specific performance and other equitable relief to prevent a breach
of this Agreement by Executive. This provision shall not, however, be construed
as a waiver of any of the rights which the Company may have hereunder, at law,
for damages, or otherwise.
11. COMPLETE AGREEMENT. In entering into this Agreement, neither party
has relied upon any representation, warranty, assurance or statement of
intention not expressly set forth herein.
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12. SEVERABILITY. If any provision of this Agreement is declared
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction, all of the remaining provisions of this Agreement shall
nevertheless continue in full force and effect.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed in California. Only California courts (state and
federal) shall have jurisdiction of any action, suit or proceeding brought
regarding this Agreement.
14. MODIFICATION AND WAIVER. No provision of this Agreement may be
modified, waived, or discharged unless agreed to in writing by both parties
hereto. The failure of a party to insist upon strict adherence to any term,
condition or other provision of this Agreement shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term, condition or other provision of this Agreement.
15. ATTORNEY FEES. In the event of any action, suit, or proceeding
arising from or based on this Agreement brought by either party hereto against
the other, the prevailing party shall be entitled to recover from the other its
reasonable, attorneys' fees and disbursements in connection therewith in
addition to the costs of such action, suit or proceeding.
16. HEADINGS. The headings in this Agreement are solely for the
convenience of reference and shall not affect its interpretation.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
INTERPACKET GROUP, INC. ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------- -------------------
Name: ▇▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
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ATTACHMENT A
Base Salary and Commission Plan
The following is the commission/bonus plan for 1999-2001.
1999 Base Salary $240,000/year
Commission/Bonus: $20,000 will be paid for $5 million in bandwidth sales
$40,000 will be paid for $7.5 million in bandwidth sales
$60,000 will be paid for $10 million in bandwidth sales
2000 Base Salary $270,000/year
Commission/Bonus: $25,000 based upon a mutually agreeable goal
$50,000 based upon a mutually agreeable goal
$75,000 based upon a mutually agreeable goal
2001 Base Salary $300,000/year
Commission/Bonus: $30,000 based upon a mutually agreeable goal
$60,000 based upon a mutually agreeable goal
$90,000 based upon a mutually agreeable goal
Commissions/bonuses will be paid at the time of achievement.
