Exhibit 10.26
Personal & Confidential
-----------------------
June 5, 2000
Xxxxxx X. Xxxxxx
00 Xxxxxxxxx Xxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
Dear Xxx:
I am pleased to offer you this employment agreement (the "Agreement") with
Genuity Solutions, Inc. ("Genuity"), a subsidiary of Genuity, Inc., as we enter
an exciting and challenging time for our new company. This Agreement is
contingent upon and does not become effective until the effective date of the
initial public offering of Genuity's Class A common stock (the "IPO").
Position - Under this Agreement, you will continue as a Corporate Officer and
Senior Executive of Genuity, President and Chief Operating Officer, with such
authorities as the Board of Directors of Genuity, Inc. (the "Board") or the
Chief Executive Officer of Genuity, Inc. ("CEO") may from time to time
prescribe. Except as otherwise provided in this Agreement, during the Term of
Employment (as defined below), you will continue to participate in the same
Genuity senior management benefit programs as similarly situated senior
executives of Genuity.
Term - The term of employment under this Agreement ("Term of Employment") will
commence on the effective date of the IPO and end on the third anniversary
thereof; provided that unless Genuity gives you written notice to the contrary
at least 90 calendar days before such third anniversary (a "Non-Renewal
Notice"), the Term of Employment will automatically be extended through the
fourth anniversary of the effective date of the IPO. Whenever this Agreement
refers to the Term of Employment, it refers to the term then in effect (either
the initial 3-year term or, if applicable, the extended 4-year term).
Duties and Responsibilities - During the Term of Employment, you will continue
to perform your duties and responsibilities fully and faithfully, and you shall
cooperate fully with the Board and the CEO and work cooperatively with the other
officers of Genuity. You will continue to devote your entire business skill,
time, and effort
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diligently to the affairs of Genuity in accordance with the duties assigned to
you, and you will perform all such duties, and otherwise conduct yourself, to
promote the best interests of Genuity. During the Term of Employment, except to
the extent specifically permitted in writing by the Board or the CEO, and except
for memberships on boards of directors that you hold on the date of this
Agreement, and except for memberships on boards and committees for charitable or
non-publicly traded entities, you will not, directly or indirectly, render any
services of a business, commercial, or professional nature to any person or
organization other than Genuity or a related company, whether or not the
services are rendered for compensation.
Location - During the Term of Employment, you will perform services for Genuity
at Genuity's headquarters, or at any other location designated by Genuity as
necessary or appropriate for the discharge of your responsibilities under this
Agreement. In the event of a change in your principal work location, you may be
eligible for relocation assistance under the terms of any Genuity relocation
policy then applicable to other similarly situated senior executives of Genuity.
Base Salary - During the Term of Employment, your annual base salary will not be
less than $400,000.00 per year; provided that if you are granted an increase in
your base salary, your base salary will not thereafter be reduced below that
increased level during the Term of Employment.
Incentive Compensation Opportunities - During the Term of Employment, Genuity
will provide you with the opportunity to earn an annual bonus in accordance with
the terms and conditions of the Genuity Executive Incentive Plan or any
successor plan ("EIP") and long-term incentive opportunities in accordance with
the terms and conditions of the Genuity Long-Term Incentive Plan or any
successor plan ("LTIP"), in each case at a level commensurate with the
opportunity offered to other similarly situated senior executives of Genuity.
Fringe Benefits - You will be eligible for perquisites and fringe benefits
available to similarly situated senior executives of Genuity consistent with
company policy or as approved by the Board. A summary of key provisions of the
policy, as currently proposed, are attached. Of course, Genuity does not
guarantee the continuation of any particular benefit or program, and the
perquisites available to you and other executives at your level are subject to
change.
Termination Provisions -
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. Voluntary Termination by You - You may terminate your employment under
this Agreement at any time by giving the CEO written notice of intent to
terminate, delivered at least 30 calendar days before the effective date
of such termination (such period not to include vacation). The
termination will automatically become effective upon the expiration of
the 30-day notice period. You must continue in the active employ of
Genuity during this 30-day notice period. Upon the effective date of such
termination, your base salary and any other Genuity benefits will cease
to accrue, and you will forfeit all rights under this Agreement which as
of the relevant date have not yet been earned under this Agreement. A
termination of employment in accordance with this Section ("Voluntary
Termination by You"), including retirement, will be deemed a "Voluntary
Termination."
. Termination Due to Death or Disability - If, during the Term of
Employment, you terminate employment because of your death or Disability
(which, for purposes of this Agreement, shall mean inability due to
illness or injury to perform the essential functions of your position, as
they existed immediately before your illness or injury, on a full-time
basis for six consecutive months), your base salary and other Genuity
benefits will cease to accrue, and Genuity will pay you or your
beneficiary, as appropriate, all benefits to which you or your
beneficiary has a right pursuant to Genuity's compensation and benefit
plans.
. Involuntary Termination by Genuity - Genuity may terminate your
employment under this Agreement at any time, for any reason. However, if
Genuity terminates your employment for any reason other than Cause (as
defined below), such termination will be deemed an Involuntary
Termination by Genuity. If you incur an Involuntary Termination during
the initial 3-year term of this Agreement, you will become entitled to
the greater of: (1) your then-current annual base pay and then-current
target annual bonus for the remainder of the Term of Employment (paid
over the remaining Term of Employment) or (2) a severance payment,
payable over the two-year period following your termination from
employment, equal to two times the sum of (x) your then-current annual
base pay and (y) your then-current target annual bonus. If you incur an
Involuntary Termination during or at the conclusion of a fourth year
under this Agreement (if applicable), you will receive a severance
payment, payable over the two-year period following your termination from
employment, equal to two times the sum of (x) your then-current annual
base pay and (y) your then-current target annual bonus.
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. Termination For Good Reason - You may terminate your employment under
this Agreement for Good Reason by giving the CEO 30 calendar days'
written notice of your intent to so terminate which sets forth in
reasonable detail the facts and circumstances deemed to provide a basis
for such termination. You must continue in the active employ of Genuity
for this 30-day notice period. For purposes of this Agreement, "Good
Reason" shall mean a change in your principal work location that is
initiated by Genuity and that causes the distance between your new
principal work location and your principal residence to be at least 50
miles greater than the distance between your previous principal work
location and your principal residence; a material reduction in
compensation opportunities (base plus bonus opportunities as compared to
the compensation of similarly situated senior executives of Genuity);
diminution in your responsibilities; or your receipt of a Non-Renewal
Notice.
Notwithstanding the foregoing, Genuity will have 15 calendar days from
its receipt of such notice to cure the action specified in the notice. In
the event of a cure by Genuity within the 15-day period, the action in
question will not constitute Good Reason.
Except as provided in the preceding paragraph, upon the lapse of the 30
calendar days' notice period, the Good Reason termination will take
effect, and your obligation to serve Genuity, and Genuity's obligation to
employ you, under the terms of this Agreement will terminate
simultaneously, and you will be deemed to have incurred an Involuntary
Termination, with the consequences described above in the Section
captioned "Involuntary Termination by Genuity."
If you do not fulfill the notice and explanation requirements imposed by
this Section ("Termination for Good Reason"), the resulting termination
of employment will be deemed a Voluntary Termination.
. Termination For Cause - Nothing in this Agreement prevents Genuity from
terminating your employment under this Agreement for Cause. In the event
of your termination for Cause, Genuity will pay you your accrued base
salary and accrued vacation time through the date of your termination.
Genuity will have no further obligations under this Agreement, and you
will be treated as a "for cause" termination under other compensation and
benefits plans of Genuity. For purposes of this Agreement, "Cause" is
defined as a good faith determination by the CEO, after consultation with
outside legal counsel, that you have committed an act or
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omission that is materially contrary to Genuity's best interests or that
you materially breached any of the terms and conditions of this
Agreement.
Release - You will not be entitled to any benefits under this Agreement
following the termination of your employment unless, at the time you terminate
your employment, you execute a release satisfactory to Genuity releasing
Genuity, its parent, subsidiaries, affiliates, shareholders, directors,
officers, employees, representatives, and agents and their successors and
assigns from any and all employment-related claims you or your successors and
beneficiaries might then have against them (excluding any claims you might then
have under this Agreement or any employee benefit plan that is subject to the
vesting standards imposed by the Employee Retirement Income Security Act of
1974, as amended).
Covenants - In consideration for the benefits and agreements described above and
your access to confidential and proprietary information in the course of your
employment with Genuity, you agree that:
(a) Prohibited Conduct - During your employment with Genuity, during any time
period during which you are eligible for payments (including, but not limited
to, severance payments following an Involuntary Termination) under this
Agreement, and, if longer, for at least 12 months following your separation from
employment with Genuity for any reason, you, without the prior written consent
of the CEO, will not:
. engage in Competitive Activities (as defined below); or
. work for, own, manage, operate, control, or participate in the ownership,
management, operation, or control of, or provide consulting or advisory
services to, any individual, partnership, firm, corporation, or
institution engaged in Competitive Activities, or any company or person
affiliated with such person or entity engaged in Competitive Activities;
provided that neither (1) your purchase or holding, for investment
purposes, of securities of a publicly-traded entity nor (2) passive
investments in non-publicly traded entities shall constitute "ownership"
or "participation in ownership" for purposes of this paragraph so long as
your equity interest in any such entity is less than, in the case of a
publicly-traded entity, 1% of the publicly-traded securities of that
entity or, in the case of a non-publicly traded entity, a 1% ownership
interest.
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(b) Competitive Activities - For purposes of this Agreement, "Competitive
Activities" means business activities involving products or services of the same
or similar type as the products or services (i) which are (or, pursuant to an
existing business plan, will be) sold, bartered, or transferred or exchanged for
consideration to customers of Genuity, and (ii) for which you have
responsibility to plan, develop, manage, market, or oversee, or had any such
responsibility within your most recent 24 months of employment with Genuity
(including for this purpose months of employment with GTE Corporation and its
affiliates). Notwithstanding the previous sentence, a business activity shall
not be treated as a Competitive Activity if the geographic marketing area of the
relevant products or services sold by you or a third party does not overlap with
the geographic marketing area for the applicable products or services of
Genuity.
(c) Interference With Business Relations - During the period of your employment
with Genuity, during any time period during which you are eligible for payments
(including, but not limited to, any severance payments following an Involuntary
Termination), and, if longer, for a period of 24 months following your
separation from employment with Genuity for any reason, you will not, without
the written consent of the CEO, directly or indirectly:
. recruit, solicit, induce, or influence any employee of Genuity to cease
being an employee of Genuity or to accept employment with, or to become a
consultant or service provider for, any entity other than Genuity;
. hire or participate (with another company or third party) in the process
of hiring any person who is then or was at any time in the prior six
months an employee of Genuity (and whom you knew of while employed by
Genuity), or provide names or other information about Genuity employees
to any person or business under circumstances which could lead to the use
of that information for purposes of recruiting or hiring;
. interfere with the relationship of Genuity with any of its employees,
agents, or representatives;
. solicit or induce, or in any manner attempt to solicit or induce, any
client, customer, or prospect of Genuity (1) to cease being, or not to
become, a customer of Genuity or (2) to divert any business of such
customer or prospect from Genuity; or
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. otherwise interfere with, disrupt, or attempt to interfere with or
disrupt, the relationship, contractual or otherwise, between Genuity and
any of its customers, clients, prospects, suppliers, consultants, or
employees.
Nothing in the foregoing provisions would prohibit you from providing routine
employment references for Genuity employees and former employees in
circumstances where you did not otherwise participate or have any involvement
in, or provide any information leading to, the solicitation, recruitment, or
hiring of such individuals.
(d) Return of Property; Intellectual Property Rights - You agree that on or
before your termination of employment for any reason with Genuity, you will
return to Genuity all property owned by Genuity or in which Genuity has an
interest, including files, documents, data and records (whether on paper or in
tapes, disks, or other machine-readable form), office equipment, credit cards,
and employee identification cards. You acknowledge that Genuity is the rightful
owner of any programs, ideas, inventions, discoveries, copyright material, or
trademarks that you may have originated or developed, or assisted in originating
or developing, during your period of employment with Genuity, where any such
origination or development involved the use of company time or resources, or the
exercise of your responsibilities for or on behalf of Genuity. You will at all
times, both before and after separation from employment, cooperate with Genuity
in executing and delivering documents requested by Genuity, and taking any other
actions, that are necessary or requested by Genuity to assist Genuity in
patenting, copyrighting, or registering any programs, ideas, inventions,
discoveries, copyright material, or trademarks, and to vest title thereto in
Genuity.
(e) Proprietary and Confidential Information - You will at all times preserve
the confidentiality of all proprietary information and trade secrets of Genuity,
except to the extent that disclosure of such information is legally required.
"Proprietary information" means information that has not been disclosed to the
public and that is treated as confidential within the business of Genuity, such
as strategic or tactical business plans; undisclosed financial data; ideas,
processes, methods, techniques, systems, patented or copyrighted information,
models, devices, programs, computer software, or related information; documents
relating to regulatory matters and correspondence with governmental entities;
undisclosed information concerning any past, pending, or threatened legal
dispute; pricing and cost data; reports and analyses of business prospects;
business transactions which are contemplated or planned; research data;
personnel information and data; identities of users and purchasers of Genuity's
products or services; and other confidential matters pertaining to or known by
Genuity,
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including confidential information of a third party which you know or should
know Genuity is bound to protect.
(f) Waiver - Nothing in this Agreement will bar you from requesting that the
CEO, in his sole discretion, waive in writing Genuity's rights to enforce some
or all of this Section ("Covenants").
(g) Other Agreements and Policies - The obligations imposed on you by this
Section ("Covenants") are in addition to, and not in lieu of, any and all other
policies and agreements of Genuity regarding the subject matter of the foregoing
obligations.
(h) Genuity - For purposes of this Section ("Covenants"), "Genuity" means
Genuity Solutions, Inc., Genuity Inc., and their successors, and assigns and all
corporate subsidiaries or other companies affiliated with Genuity Inc. or
Genuity Solutions, Inc., all companies in which Genuity Inc. or Genuity
Solutions, Inc. directly or indirectly owns a substantial equity interest, and
their successors and assigns, including any company into which Genuity Inc. or
Genuity Solutions, Inc. is merged and its subsidiaries and affiliates.
Miscellaneous -
Nonduplication of Benefits/No Severance - The payment of any benefits hereunder
will be in lieu of any other separation or severance benefits and will fulfill
all Genuity obligations under associated separation or severance plans and
programs. No provision of this Agreement will require Genuity to provide you
with any payment, benefit, or grant that duplicates any payment, benefit, or
grant that you are entitled to receive under any other agreement or under any
Genuity compensation or benefit plan, award agreement, or other arrangement.
Other Genuity Plans - Except to the extent otherwise explicitly provided by this
Agreement, any awards made to you under any Genuity compensation or benefit plan
or program will be governed by the terms of that plan or program and any
applicable award agreement thereunder.
Waiver - Failure to insist upon strict compliance with any of the terms,
covenants, or conditions of this Agreement will not be deemed a waiver of such
term, covenant, or condition, nor will any waiver or relinquishment of any right
or power hereunder at any
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one or more times be deemed a waiver or relinquishment of such right or power at
any other time or times.
Taxes - Genuity may withhold from any benefits payable under this Agreement all
taxes that Genuity reasonably determines to be required pursuant to any law,
regulation, or ruling. However, it is your obligation to pay all required taxes
on any amounts provided under this Agreement, regardless of whether withholding
is required.
Confidentiality - Except to the extent otherwise required by law, you will not
disclose, in whole or in part, any of the terms of this Agreement. This Section
("Confidentiality") does not prevent you from disclosing the terms of this
Agreement to your spouse or to your legal or financial adviser, provided that
you take all reasonable measures to assure that he or she does not disclose the
terms of this Agreement to a third party except as otherwise required by law.
Governing Law - To the extent not preempted by federal law, the provisions of
this Agreement will be construed and enforced in accordance with the laws of the
Commonwealth of Massachusetts, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of such
provisions to the substantive law of another jurisdiction.
Assignment - Genuity may, without your consent, assign its rights and
obligations under this Agreement, and if Genuity makes such an assignment, all
references in this Agreement to Genuity will be deemed to refer to the assignee.
However, you may not assign your rights and obligations under this Agreement.
Severability - The agreements contained herein and within the release prescribed
by the Section captioned "Release" will each constitute a separate agreement
independently supported by good and adequate consideration, and will each be
severable from the other provisions of the Agreement and such release. If an
arbitrator or court of competent jurisdiction determines that any term,
provision, or portion of this Agreement or such release is void, illegal, or
unenforceable, the other terms, provisions, and portions of this Agreement or
such release will remain in full force and effect, and the terms, provisions,
and portions that are determined to be void, illegal, or unenforceable will
either be limited so that they will remain in effect to the extent permissible
by law, or such arbitrator or court will substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to Genuity, to
the fullest
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extent permitted by applicable law, the benefits intended by this Agreement and
such release.
Additional Remedies - In addition to any other rights or remedies, whether
legal, equitable, or otherwise, that each of the parties to this Agreement may
have, you acknowledge that (i) the covenants in the Sections captioned
"Covenants" and "Confidentiality" are essential to the continued good will and
profitability of Genuity; (ii) you have broad-based skills that will serve as
the basis for employment opportunities that are not prohibited by the covenants
in the Sections captioned "Covenants" and "Confidentiality;" (iii) when your
employment with Genuity terminates, you will be able to earn a livelihood
without violating any of the terms of this Agreement; (iv) irreparable damage to
Genuity will result in the event that the foregoing sections of this Agreement
are not specifically enforced and that monetary damages will not adequately
protect Genuity from a breach of these sections of this Agreement; (v) if any
dispute arises concerning the violation by you of the provisions of this
Agreement, an injunction may be issued restraining such violation pending the
determination of such controversy, and no bond or other security may be required
in connection therewith; (vi) such covenants will continue to apply after any
expiration, termination, or cancellation of this Agreement; (vii) your breach of
any of such covenants will result in your immediate forfeiture of all rights
under this Agreement; and (viii) in the event of any such breach by you, you
will, at Genuity's request, return all payments (other than base annual salary
and EIP awards for the time you were actively employed by Genuity) received
pursuant to this Agreement including, but not limited to, stock option gains
received or deferred during the six-month period prior to the date of your
initial breach of this Agreement. You further agree that if Genuity is required
to seek the enforcement of or to defend the terms of this Agreement, and you are
found to have breached the terms of this Agreement (either by an arbitrator or a
court of competent jurisdiction), you will pay for any applicable attorneys'
fees and court costs incurred by Genuity; provided, however, that should you not
be found to have breached the terms of this Agreement by said arbitrator or
court, Genuity will pay for any applicable attorneys' fees and court costs
incurred by you.
Survival - The provisions in the Sections captioned "Covenants" and
"Miscellaneous" will survive the Term of Employment. If your employment
continues after the Term of Employment, you will be subject to the obligations
imposed by each of such Sections with respect to such employment. Any
obligations that Genuity has incurred under this Agreement to provide benefits
that are due under the terms of this Agreement, as well as any conditions that
you must meet in order to be entitled to receive or retain such
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benefits, will likewise survive the Term of Employment. Except as provided by
the preceding provisions of this Section ("Survival"), the terms of your
employment after the end of the Term of Employment will not be governed by this
Agreement.
Arbitration - Any dispute arising out of or relating to this Agreement, except
any dispute arising out of or relating to the Sections captioned "Covenants" and
"Confidentiality," and any dispute arising out of or relating to your
employment, will be settled by final and binding arbitration, which will be the
exclusive means of resolving any such dispute, and the parties specifically
waive all rights to pursue any other remedy, recourse, or relief. With respect
to disputes arising out of or relating to the Sections captioned "Covenants" and
"Confidentiality," Genuity has retained all its rights to legal and equitable
recourse and relief, including but not limited to injunctive relief, as referred
to in Section captioned "Additional Remedies." The arbitration will be
expedited and conducted in Boston, Massachusetts pursuant to the Center for
Public Resources ("CPR") Rules for Non-Administered Arbitration of Employment
Disputes in effect at the time of notice of the dispute before one neutral
arbitrator appointed by CPR from the CPR Panel of neutrals unless the parties
mutually agree to the appointment of a different neutral arbitrator. The
arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. Sections
1-16, and judgment upon the award rendered by the arbitration may be entered by
any court having jurisdiction. The finding of the arbitrator may not change the
express terms of this Agreement and shall be consistent with the arbitrator's
understanding of the findings a court of proper jurisdiction would make in
applying the applicable law to the facts underlying the dispute. In no event
whatsoever will such an arbitration award include any award of damages other
than the amounts in controversy under this Agreement. The parties waive the
right to recover, in such arbitration, punitive damages. Each party hereby
agrees that Boston, Massachusetts is the proper venue for any litigation seeking
to enforce any provision of this Agreement or to enforce any arbitration award
under this Section, and each party hereby waives any right it otherwise might
have to defend, oppose, or object to, on the basis of jurisdiction, venue, or
forum nonconveniens, a suit filed by the other party in any federal or state
court in Boston, Massachusetts to enforce any provision of this Agreement or to
enforce any arbitration award under this Section. Each party also waives any
right it might otherwise have to seek to transfer from a federal or state court
in Boston, Massachusetts a suit filed by the other party to enforce any
provision of this Agreement or to enforce any arbitration award under this
Section.
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Entire Agreement - Except for the terms of the compensation and benefit plans in
which you participate, this Agreement sets forth the entire understanding of you
and Genuity, and supersedes all prior agreements and communications, whether
oral or written, between Genuity and you. This Agreement will not be modified
except by written agreement of you and Genuity.
I believe that this generous offer provides you with financial security as our
industry and Genuity evolve. We recognize that the requirements that have been
and will be placed on you are significant. It is my hope that this compensation
arrangement provides you with a level of comfort to allow you to continue to
perform your responsibilities in an exemplary manner. Please indicate your
acceptance by signing below and returning to me within three working days.
Sincerely yours,
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
c:
I agree to the terms described above.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
