EXHIBIT 10.10
DIGITAL ISLAND
EMPLOYMENT AGREEMENT
October 24, 1999
Xxx X. Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxx #000
Xxxxxxxx Xxxx, XX 00000
Dear Xxx:
We are pleased to offer you the position of President reporting to
Xxxxx Xxxxx. This letter, if accepted, sets forth the terms of your employment
with Digital Island, Inc. and Sandpiper Networks, Inc. (hereafter "Sandpiper")
(collectively "Digital Island") after the closing. This offer is contingent on
the occurrence of the closing of Digital Island, Inc.'s acquisition (the
"Acquisition") of Sandpiper and, if you accept this offer, it would take effect
as of that Closing Date. The terms of your employment would be as follows:
Compensation and Benefits
-------------------------
You would receive an annual base salary of $240,000, less all
applicable deductions, and would be eligible to participate in the Digital
Island Bonus Plan, with an annual bonus target of $48,000. The bonus is
currently structured to be paid in quarterly installments each fiscal year based
upon (i) the Company's achievement of financial objectives and performance
milestones established by the Board for that year, (ii) the achievement of your
individual objectives as agreed by you and the Chief Executive Officer, and
(iii) your continuation of employment through the close of each quarter. In
addition, you would participate in all of Digital Island's employee benefit
programs for which you are eligible.
Term of Employment
------------------
You agree to remain employed through November 24, 2000. Nevertheless,
Digital Island may terminate your employment at any time for any reason, with or
without cause, by giving you written notice of such termination.
If Digital Island terminates your employment "Without Cause" or if you
terminate your employment for "Good Reason" prior to November 24, 2000, then
Digital Island will continue your base salary as a severance payment until the
earlier of (1) one (1) year after the termination of your employment or (2) the
date you begin employment with another employer. You will notify Digital Island
in writing within ten days of your acceptance of any new employment. The
severance set forth herein will be in lieu of any entitlement you may have to
notice of termination, pay in lieu of notice of termination, or any other
severance payment from any other source. All benefits and future stock and
option vesting would terminate as of the date of termination of your employment,
except as provided for under a separate "Acknowledgement Letter" dated as of the
date hereof and attached hereto. You would, of course, be paid your salary
through your date of termination and for the value of all unused paid time off
earned through that date and allowed to continue your medical coverage at your
own expense to the extent provided for by COBRA, but you would not be entitled
to any additional payments or benefits except as set forth herein or as provided
for under a separate "Acknowledgement Letter" dated as of the date hereof and
attached hereto. You would be allowed to exercise your vested options during the
time period set forth in and in accordance with your option agreement.
If you were to resign for any reason other than for "Good Reason" or
your employment were to be terminated for "Cause" before November 24, 2000, then
you would be paid all salary and benefits, as well as for the value of your
unused paid time off, through the date of termination of your employment, but
nothing else. A termination for "Cause" shall mean a termination for any of the
following reasons: (i) willful and repeated failure or refusal to comply in any
material respect with reasonable directives from the CEO which are consistent
with your job responsibilities and stature, provided that such failure or
refusal continues for 45 days after written notice is given to you describing
such failure or refusal in reasonable detail and stating the Company's intention
to terminate your employment if such continues, (ii) conviction of a felony
which has a material adverse impact on Digital Island or (iii) the intentional
and known unauthorized use or disclosure of the confidential proprietary
information of Digital Island or any Digital Island subsidiary, including
Sandpiper after the Acquisition, which has a material adverse impact on Digital
Island. Digital Island will provide written notice of the reason for termination
in the case of any termination for "Cause." A termination for any other reason
shall be a termination "Without Cause."
A termination for "Good Reason" shall mean a termination by you of
your employment for any of the following reasons: (i) diminution of
responsibilities consistent with your position of President as agreed upon at
the time of Acquisition, after providing notice to the CEO and allowing for
reasonable opportunity to cure the diminution of responsibilities; (ii) change
in title or reporting relationship; or (iii) involuntary relocation from your
principal place of employment in San Diego, California.
You will not be required to relocate your principal place of
employment in San Diego, California before November 24, 2000 unless mutually
agreed upon by you and Digital Island.
If your employment with Digital Island terminates for any reason
before November 24, 2000, you agree to contemporaneously resign from the Board
of Directors.
If your employment with Digital Island were to continue after November
24, 2000, then your employment would continue to be on an "at-will" basis. This
means that either you or Digital Island could terminate your employment at any
time for any reason with or without cause and without the obligation to pay you,
or your right to, any severance payment except as may be provided at such time
under Digital Island's employee benefit plans for which you are eligible.
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Your Position
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You will have the title of President, reporting to Xxxxx Xxxxx. You
will have whatever reasonable duties are assigned to you consistent with your
title and position.
Non-Competition
---------------
You understand and agree that this agreement is entered into in
connection with the acquisition by Digital Island, Inc. of all of the
outstanding stock of Sandpiper. You further understand and agree that you were a
substantial shareholder or optionholder of Sandpiper; a key and significant
member of either the management and/or the technical workforce of Sandpiper; and
that Digital Island, Inc. paid you substantial consideration in order to
purchase your stock and/or option interest in Sandpiper. In addition, the
parties agree that, prior to acquisition by Digital Island, Inc. of the stock of
Sandpiper, Sandpiper was engaged in its business in each of the fifty states of
the United States and throughout the world. Digital Island represents and you
understand that, following the acquisition by Digital Island of the stock of
Sandpiper, Digital Island will continue conducting such business in all parts of
the United States and throughout the world.
You agree that during your employment with Digital Island you will not
engage in any other employment, business, or business related activity unless
you receive Digital Island's prior written approval from the Chief Executive
Officer to hold such outside employment or engage in such business or activity.
Such written approval will not be unreasonably withheld if such outside
employment, business or activity would not in any way be competitive with the
business or proposed business of Digital Island or otherwise conflict with or
adversely affect in any way your performance of your employment obligations to
Digital Island. The requirement for written approval will not apply to your
current position of Director at Videoscape, Inc., so long as that activity is
not in any way competitive with the business or proposed business of Digital
Island, or does not conflict with or adversely affect in any way your
performance of your employment obligations to Digital Island.
Commencing on the Closing Date and continuing until the latter of (1)
November 24, 2000, or (2) one (1) year after the date of termination of your
employment with Digital Island, you will not, as an employee, agent, consultant,
advisor, independent contractor, general partner, officer, director,
stockholder, investor, lender or guarantor of any corporation, partnership or
other entity, or in any other capacity directly or indirectly:
1. render any services to any Content Distribution companies that
operate networks which serve content in one or two ways to multiple devices
distributed throughout deployed networks of distributed servers (including
without limitation Adero, Akamai, Real Broadcast Networks, Exodus, AT&T)
(hereafter collectively referred to as "the Businesses") in the United States or
throughout the world; or
2. permit your name to be used in connection with a business which
is competitive or substantially similar to the Businesses.
Notwithstanding the foregoing, you may own, directly or indirectly,
solely as an investment, up to one percent (1%) of any class of "publicly traded
securities" of any business
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that is competitive or substantially similar to the Businesses person or any
person who owns a business that is competitive or substantially similar to the
Businesses. The term "publicly traded securities" shall mean securities that are
traded on a national securities exchange or listed on the National Association
of Securities Dealers Automated Quotation System.
If any restriction set forth in this non-competition section is found
by a court to be unreasonable, then you agree, and hereby submit, to the
reduction and limitation of such prohibition to such area or period as shall be
deemed reasonable. You acknowledge that the services that you will provide to
Digital Island under this agreement are unique and that irreparable harm will be
suffered by Digital Island in the event of the breach by you of any of your
obligations under this agreement, and that Digital Island will be entitled, in
addition to its other rights, to enforce by an injunction or decree of specific
performance the obligations set forth in this agreement. Any claims asserted by
you against Digital Island shall not constitute a defense in any injunction
action brought by Digital Island to obtain specific enforcement of said
paragraphs.
Arbitration
-----------
We each agree that any and all disputes between us which arise out of
your employment, the termination of your employment, or under the terms of this
agreement shall be resolved through final and binding arbitration. This shall
include, without limitation, disputes relating to this agreement, any disputes
regarding your employment by Digital Island or the termination thereof, claims
for breach of contract or breach of the covenant of good faith and fair dealing,
and any claims of discrimination or other claims under any federal, state or
local law or regulation now in existence or hereinafter enacted and as amended
from time to time concerning in any way the subject of your employment with
Digital Island or its termination. The only claims not covered by this section
are the following: (i) claims for benefits under the unemployment insurance or
workers' compensation laws and (ii) claims concerning the validity, infringement
or enforceability of any trade secret, patent right, copyright, trademark or any
other intellectual property held or sought by Digital Island, or which Digital
Island could otherwise seek; in each of these instances such disputes or claims
shall not be subject to arbitration, but rather, will be resolved pursuant to
applicable law. Binding arbitration will be conducted in San Francisco County,
California in accordance with the rules and regulations of the American
Arbitration Association. If, however, you do not reside within 100 miles of San
Francisco County at the time the dispute arose, then the arbitration may take
place in the largest metropolitan area within fifty miles of your place of
residence when the dispute arose. The prevailing party in the arbitration shall
be entitled to the recovery of all reasonable attorney's fees and costs incurred
with respect to the arbitration. You understand and agree that arbitration shall
be instead of any civil litigation, that each side waives its right to a jury
trial, and that the arbitrator's decision shall be final and binding to the
fullest extent permitted by law and enforceable by any court having jurisdiction
thereof.
Miscellaneous Provisions
------------------------
This agreement, the accompanying Confidential Information and
Inventions Agreement, the accompanying "Acknowledgement Letter", the
accompanying Amendment to the Sandpiper Purchase Agreement, any stock option and
stock purchase agreement that you
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have with Sandpiper, and any loan obligations you have to Sandpiper will be the
entire agreement between Digital Island and you relating to your employment and
the additional matters provided for herein. You agree that there were no
promises or commitments made to you regarding your employment with Digital
Island except as set forth in this letter. This agreement supersedes and
replaces (i) any prior verbal or written agreements between you and Digital
Island and (ii) any prior verbal or written agreements between you and
Sandpiper, except as provided for herein, relating to the subject matter hereof,
including, but not limited to, any and all prior employment agreements. This
agreement may be amended or altered only in a writing signed by you and Digital
Island's Chief Executive Officer. This agreement shall be construed and
interpreted in accordance with the laws of the State of California. Each
provision of this agreement is severable from the others, and if any provision
hereof shall be to any extent unenforceable, it and the other provisions shall
continue to be enforceable to the full extent allowable, as if such offending
provision had not been a part of this agreement. This offer is also contingent
on your executing the Digital Island Confidential Information and Inventions
Agreement, a copy of which is attached hereto.
We are delighted that you will be joining Digital Island. We believe
that you bring the skills and expertise to help us continue to build our
reputation in the industry. We look forward to working with you in developing
the full potential of our company.
If you have any questions about this offer, please contact me. If you
find this offer acceptable, please sign and date this letter below and return it
to me.
Sincerely,
DIGITAL ISLAND, INC.
/s/ Xxxxx Xxxxxxxx
XXXXX XXXXXXXX
V.P. CORPORATE DEVELOPMENT
I agree to the terms and conditions in this offer.
Date: 10-24-99 Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
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