EXHIBIT 99.1
EMPLOYMENT AGREEMENT
FASTNET CORP. (the "Company") and XXXXXXX X. XXXXX ("Executive") agree to enter
into this EMPLOYMENT AGREEMENT dated as of December 15, 2000, as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ Executive, and Executive hereby agrees to be
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement.
2. EMPLOYMENT TERM.
The period of Executive's employment under this Agreement shall begin as of
December 18, 2000 (the "Effective Date") and shall continue unless and until
terminated in accordance with Section 5 below. Executive's employment shall be
at will, and is subject to termination by the Company or Executive at any time.
3. DUTIES AND RESPONSIBILITIES.
(a) The Company will employ Executive as its President and Chief
Executive Officer. In such capacity, Executive shall perform
the duties and have the responsibilities assigned to Executive
from time to time by the Company's Board of Directors (the
"Board").
(b) The Executive shall be nominated to serve on the Board of
Directors of the Company.
(c) Executive agrees to faithfully serve the Company, devote his
full working time, attention and energies to the business of
the Company and perform the duties under this Agreement to the
best of his abilities. Executive may perform services without
direct compensation therefor in connection with the management
of personal investments which do not materially detract from
the performance of duties hereunder or constitute a
competitive activity under Section 7(c) of this Agreement, or
in connection with charitable or civic organizations.
(d) Executive agrees (i) to comply with all applicable laws,
governmental rules and regulations, and all requirements of
all applicable regulatory, self-regulatory, and administrative
bodies; and (ii) not to engage in any other business or
employment endeavors without the prior written consent of the
Board except as otherwise specifically provided herein.
4. COMPENSATION AND BENEFITS.
(a) BASE SALARY. The Company shall pay Executive a base salary of
$150,000 per year.
(b) ANNUAL INCENTIVE BONUS. Subject to Section 6 hereof, during
the Employment Term, the Executive shall be eligible for an
annual incentive bonus of at least $50,000 based on the
Board's assessment of Executive's attainment of performance
metrics for the relevant year, determined by the Compensation
Committee of the Board.
(c) COMPANY STOCK ACQUISITION. The Company shall sell 1,000,000
common shares to Executive at the closing price of such shares
on the NASDAQ on December 11, 2000. The Company shall accept
as payment for such shares a note pursuant to the Note and
Restricted Stock Agreement attached hereto as Attachment A,
and the shares so acquired shall be subject to restrictions as
set forth in that Agreement.
(d) EXPENSE REIMBURSEMENT. The Company shall promptly reimburse
Executive for the ordinary and necessary business expenses
incurred by Executive in the performance of his duties under
this Agreement in accordance with the Company's customary
practices applicable to senior executives, provided that such
expenses are incurred and accounted for in accordance with the
Company's policy.
(e) VACATION. The Executive shall be entitled to 4 weeks vacation
on the terms generally applicable to senior executives of the
Company.
(f) OTHER BENEFIT PLANS AND FRINGE BENEFITS. Executive shall be
eligible to participate in or receive benefits under any
pension plan, profit sharing plan, 401(k) plan, non-qualified
deferred compensation plan, supplemental executive retirement
plan, medical and dental benefits plan, life insurance plan,
short-term and long-term disability plans, incentive
compensation plans, or any other fringe plan, generally made
available by the Company to senior executives. Except as
otherwise provided in this Agreement, any such participation
shall be in accordance with the provisions of such plans and
nothing contained in this Agreement is intended to, or shall
be deemed to, affect adversely any of Executive's rights as a
participant under any such plans, provided, however, nothing
herein shall prevent the Board from modifying or discontinuing
any benefit plan.
(g) RELOCATION. The Company shall pay Executive's reasonable costs
incurred in relocating himself and his family to the
Allentown, Pennsylvania area in an aggregate amount not
greater than $50,000.
5. TERMINATION OF EMPLOYMENT.
Executive's employment under this Agreement may be terminated under the
following circumstances:
(a) DEATH. Executive's employment shall terminate upon Executive's
death.
(b) TOTAL DISABILITY. The Company may terminate Executive's
employment upon his becoming "Totally Disabled". For purposes
of this Agreement, Executive shall be "Totally Disabled" if he
is physically or mentally incapacitated so as to render him
incapable of performing his usual and customary duties under
this Agreement for a period of 180 consecutive days, as
determined by the Board in good faith.
(c) TERMINATION BY THE COMPANY. The Company may terminate
Executive's employment under this Agreement at any time after
providing Notice of Termination to Executive.
(d) TERMINATION BY EXECUTIVE. Executive may terminate his
employment under this Agreement at any time after providing
Notice of Termination to the Company.
(e) NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company or by Executive (other than by
reason of Executive's death) shall be communicated by written
Notice of Termination to the other party in accordance with
Section 14 below. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice in writing which shall
indicate the specific termination provision in this Agreement
relied upon to terminate Executive's employment and if
applicable, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated and
shall specify the Termination Date (as hereafter defined).
(f) TERMINATION DATE. "Termination Date" shall mean (i) if
Executive's employment is terminated because of his death, the
date of death, or (ii) if employment is terminated for any
other reason, the date specified in the Notice of Termination.
6. COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT.
(a) COMPENSATION. In the event that Executive's employment is
terminated, the Company shall pay the following amounts to
Executive's beneficiary or estate:
(i) EARNED BUT UNPAID COMPENSATION. Any accrued by unpaid
Base Salary for services rendered to Executive's
Termination Date, any accrued but unpaid expenses
required to be reimbursed under this Agreement, any
vacation accrued to the Termination Date.
(ii) OTHER BENEFITS. Any benefits which Executive may be
entitled pursuant to the plans, policies and
arrangements referred to in Section 4(g) hereof,
determined and paid in accordance with the terms of
such plans, policies and arrangements.
(b) NO OTHER BENEFITS OR COMPENSATION. Except as may be provided
under this Agreement, under the terms of any incentive
compensation, employee benefit, or fringe benefit plan,
applicable to Executive as of the Termination Date, Executive
shall have no right to receive any other compensation, or to
participate in any other plan, arrangement or benefit, with
respect to future periods after such termination or
resignation.
7. RESTRICTIVE COVENANTS.
(a) PROTECTED INFORMATION. Executive recognizes and acknowledges
that he will have access to various confidential or
proprietary information concerning the Company of a special
and unique value which may include, without limitation, (i)
books, records, agreements, contracts, programs, software,
data bases, manuals and similar items relating to operations,
finance, accounting, marketing, sales, products, services,
personnel and management, (ii) policies and matters relating
particularly to the Company's Business (as hereafter defined)
and intellectual property, and (iii) various trade or business
secrets, know how with respect to technology, patents,
copyrights, trademarks, service marks, tradenames, designs and
applications relating to the foregoing and similar items, as
well as business or customer lists and opportunities, client
relationships, expansion or diversification plans,
development, techniques, methods, processes, data, pricing
policies and the like (collectively, the "Protected
Information"). Executive therefore covenants and agrees that
he will not at any time, either while employed by the Company
or afterwards, knowingly make any independent use of, or
knowingly disclose to any other person or organization (except
as authorized by the Company) any of the Protected
Information. Information will not be "Protected Information"
under the provisions of this Agreement if (i) it was known by
the Executive prior to his employment with the Company, (ii)
it is available from public sources or otherwise known to the
general public or disclosed by the Company to third parties
without a duty of confidentiality, or (iii) it is known to the
trade or in the Company's industry; provided, that (ii) and
(iii) did not result from Executive's breach of this Section
7(a).
(b) INVENTIONS.
(i) Executive acknowledges and agrees that any
inventions, discoveries or improvements Executive has
conceived or made or may conceive or make during
Executive's employment with the Company, whether made
individually or jointly with others, which relate to
or pertain to, or are in any way connected with, the
Company's Business (actual or anticipated) or are the
subject of research or development (actual or
anticipated) by the Company; or utilize equipment,
supplies, facilities, personnel or Protected
Information belonging to the Company (collectively
the "INVENTIONS") shall be the sole and exclusive
property of the Company and the Inventions shall be
deemed to be works for hire.
(ii) To the extent Executive would be deemed to be an
owner of any of the rights in the Invention,
Executive hereby assigns to the Company all such
rights in the Inventions. Executive hereby agrees to
execute and assign any and all applications,
assignments or other instruments which the Company
may deem necessary in order to enable it, as its
expense, to apply for, prosecute and obtain letters
of patent, trademarks, copyrights or other legal
protections in the United States or foreign countries
for the Inventions, or in order to assign or convey
to or vest in the Company the sole and exclusive
right, title and interest in and to the Inventions.
(c) COMPETITIVE ACTIVITY. Executive covenants and agrees that at
all times during his period of employment with the Company,
and for a period of one (1) year after the Termination Date
unless such termination is without Cause (as defined in the
Note and Restricted Stock Agreement), he will not, directly or
indirectly, engage in, assist, or have any active interest or
involvement whether as an employee, agent, consultant,
creditor, advisor, officer, director, stockholder (excluding
holdings of less than 1% of the stock of public company),
partner, proprietor or any type of principal whatsoever, in
any person, firm, or business entity which is engaged in the
same "Business" (as defined herein) as that conducted by the
Company on the Termination Date and continued thereafter,
without the Company's specific written consent to do so, all
of the foregoing in any geographic area in which the Company
does Business. For purposes of this Section, "Business" shall
mean the business of providing Internet access services, total
managed security, Web hosting services, Internet applications
hosting services, virtual private networks, unified messaging
and total managed backup and recovery services and such other
business as the Company shall enter into during the Term.
(d) NON-SOLICITATION. Executive covenants and agrees that at all
times during his period of employment with the Company, and
during the one year period after the Executive's Termination
Date he will not, without the Company's prior written consent,
directly or indirectly, offer to employ, solicit or encourage
to leave the employment or other service of the Company, or
any of its affiliates, any employee of the Company or its
affiliates or any person who was so employed within the one
year prior to such offer or solicitation.
(e) RETURN OF DOCUMENTS AND OTHER MATERIALS. Executive shall
promptly deliver to the Company, on or prior to the
Termination Date, or at any other time as the Company may so
request, all documentation, memoranda, notes, records,
reports, tapes, manuals, drawings, blueprints, programs, and
any other materials, whether in hard copy or in an electronic
or similar form, and all copies thereof, relating to the
Company's property, including its Protected Information or any
Inventions, employees, customers or business, which Executive
may then possess or have under his control and which Executive
acknowledges constitute the property of the Company
exclusively and for all purposes, including the right of
copyright.
8. ENFORCEMENT OF COVENANTS.
(a) RIGHT TO INJUNCTION. Executive acknowledges that a breach of
the covenants set forth in Section 7 hereof will cause
irreparable damage to the Company with respect to which the
Company's remedy at law for damages will be inadequate.
Therefore, in the event of breach or anticipatory breach of
the covenants set forth in this section by Executive,
Executive and the Company agree that the Company shall be
entitled to cease making any cash payments due hereunder
pending ultimate resolution of the matter and shall also be
entitled to the following particular forms of relief, in
addition to remedies otherwise available to it at law or
equity, injunctions, both preliminary and permanent, enjoining
or retraining such breach or anticipatory breach and Executive
hereby consents to the issuance thereof forthwith and without
bond by any court of competent jurisdiction.
(b) SEPARABILITY OF COVENANTS. The covenants contained in Section
7 hereof constitute a series of separate covenants, one for
each county and city included within each State in the United
States and the District of Columbia, and one for each
applicable foreign city or province included within each
foreign country. The parties acknowledge that the covenants
deemed included in Section 7 are, taken as a whole, reasonable
in their geographic scope and their duration and no party will
raise any issue of the reasonableness of the scope or duration
of such covenants in any proceeding to enforce any such
covenants. If in any judicial proceeding, a court shall hold
that any of the covenants set forth in Section 7 exceed the
time, geographic, or occupational limitations permitted by
applicable laws, Executive and the Company agree that such
provisions shall and hereby reformed to the maximum time,
geographic, or occupational limitations permitted by such
laws. Further, in the event a court shall hold unenforceable
any of the separate covenants deemed included herein, then
such unenforceable covenant or covenants shall be deemed
eliminated from the provisions of this Agreement for the
purpose of such proceeding to the extent necessary to permit
the remaining separate covenants to be enforced in such
proceedings. Executive and the Company further agree that the
covenants in Section 7 shall each be construed as a separate
agreement independent of any other provisions of this
Agreement, and the existence of any claim or clause of action
by Executive against the Company whether predicated on this
Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any of the covenants of Section
7.
9. WITHHOLDING TAXES.
The Company shall withhold from any compensation and benefits payable under this
Agreement all applicable federal, state, local or other taxes and such
compensation and benefits (to the extent reportable as income) will be reported
as W-2 income of the Executive by the Company.
10. SOURCE OF PAYMENTS.
All payments provided under this Agreement, other than payments made pursuant to
a plan which provides otherwise, shall be paid from the general funds of the
Company, and no special or separate fund shall be established, and no other
segregation of assets made, to assure payment. Executive shall have no right,
title or interest whatever in or to any investments which the Company may make
to aid the Company in meeting its obligations under this Agreement. To the
extent that any person acquires a right to receive payments from the Company
under this Agreement, such right shall be no greater than the right of an
unsecured creditor of the Company.
11. SUCCESSOR AND BINDING AGREEMENT.
(a) COMPANY SUCCESSOR. The Company shall require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and
agree to perform this Agreement in the same manner and to the
same extent as the Company would be required to perform it if
no such succession had taken place. For purposes of this
Agreement, the Company shall include all of the Company's
subsidiaries and affiliated entities.
(b) EXECUTIVE'S SUCCESSOR. This Agreement shall inure to the
benefit of and be enforceable by Executive and his personal or
legal representatives and successors in interest under this
Agreement; provided, however, that Executive may not assign
any of the duties and obligations hereunder without the
written consent of the Board.
(c) FACILITY OF PAYMENT. In the event of Executive's legal
incapacity, the Company may make any payments due under this
Agreement to his legal representative. In the event of
Executive's death, the Company may make any payment due under
this Agreement to his surviving spouse or, if none, to
Executive's estate. Any payment made in accordance with this
provision fully discharges the obligation of the Company
therefor.
12. ASSIGNMENT.
The rights and benefits of Executive under this Agreement are personal to him
and no such right or benefit shall be subject to voluntary or involuntary
alienation, assignment or transfer; PROVIDED, however, that nothing in this
Section 12 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death or from transferring
any of his rights and benefits hereunder to (a) his executors, administrators,
testamentary trustees, legatees or beneficiaries, (b) the executors,
administrators, testamentary trustees, legatees or beneficiaries of any of the
persons in clause (a) above or (c) a trust or custodianship, the beneficiaries
of which include only the Executive, his spouse or his lineal descendants by
blood or adoption. This Agreement may be assigned by the Company to any Company
successor as described in Section 11(a) hereof.
13. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania applicable to agreements made and to be
performed in that State, without regard to its conflict of laws provisions.
14. NOTICES.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:
To the Company:
FASTNET Corp.
Two Xxxxxxxx Place, Suite 130
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxx Xxxxx, Chairman
Fax: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxx & Bockius, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Fax: (000) 000-0000
To Executive:
Xxxxxxx X. Xxxxx
C/O FASTNET Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx XX 00000
15. MISCELLANEOUS.
(a) WAIVER. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be
considered a waiver thereof or deprive that party of the right
thereafter to insist upon strict adherence to that term or any
other terms of this Agreement.
(b) SEPARABILITY. If any term or provision of this Agreement is
declared illegal or unenforceable by any court of competent
jurisdiction and cannot be modified to be enforceable, such
term or provision shall immediately become null and void,
leaving the remainder of this Agreement in full force and
effect.
(c) HEADINGS. Section headings are used herein for convenience of
reference only and shall not affect the meaning of any
provision of this Agreement.
(d) RULES OF CONSTRUCTION. Whenever the context so requires, the
use of the singular shall be deemed to include the plural and
vice versa.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be
an original, and such counterparts will together constitute
but one Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
day and year set forth below.
FASTNET CORP. EXECUTIVE:
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------ ------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
Date: December 15, 2000 Date: December 15, 2000
